Graphic Packaging Reports Strong 4Q, Full Year 2022 Results

Graphic Packaging Holding Company reported net income for fourth quarter 2022 of $156 million, or $0.50 per share, based on 309 million weighted average diluted shares. This compares to fourth quarter 2021 net income of $39 million, or $0.13 per share, based on 309 million weighted average diluted shares.                              

For the full year 2022, net income was $522 million, or $1.69 per share, based on 309 million weighted average diluted shares. This compares to 2021 net income of $204 million, or $0.68 per share, based on 298 million weighted average diluted shares.

Michael Doss, the company’s president and CEO, said, “2022 was an excellent year of performance and execution by our global team. Financial results improved materially and are on pace to meet our Vision 2025 goals. Our continued innovation in fiber-based consumer packaging solutions drove a third consecutive year of net organic sales growth at or above the high-end of our targeted range. Our large acquisition in Europe has been integrated and is providing growth opportunities in new consumer markets while meeting our financial and synergy expectations. The state-of-the-art CRB machine in Kalamazoo, Michigan successfully ramped production and is on track to achieve an expected $130 million in incremental, annual EBITDA from the investment. Price execution, strong demand for innovative packaging solutions, acquisitions, and positive net productivity resulted in adjusted EBITDA increasing 52% to $1.6 billion.”

“We delivered robust fourth quarter financial results despite a $20 million unfavorable impact to adjusted EBITDA from the late December winter storm, which impacted paperboard production by approximately 40,000 tons,” Stephen Scherger, the company’s EVP and CFO, added. “During the year, we reduced net debt by $526 million and, as committed, exited the year with net leverage of 3.2x, down from a proforma 4.6x at the end of 2021. We expect to grow sales, adjusted EBITDA, and adjusted EPS in 2023 and further reduce net leverage to approximately 2.5x by year-end, while continuing to invest in our capabilities to drive growth.”

Net sales increased 20% to $2,386 million in the fourth quarter of 2022, compared to $1,988 million in the prior year period. The $398 million increase was driven by $137 million of favorable volume/mix and $298 million in positive pricing, partially offset by $37 million in unfavorable foreign exchange.

Net sales increased 32% to $9,440 million for the full year 2022, compared to $7,156 million in the prior year. The $2,284 million increase was driven by $1,283 million of favorable volume/mix from organic growth and acquisitions and $1,131 million in positive pricing, partially offset by $130 million in unfavorable foreign exchange.

EBITDA for the fourth quarter of 2022 was $408 million, an increase of $190 million from the fourth quarter of 2021. After adjusting for charges associated with business combinations and other special charges, adjusted EBITDA increased $128 million to $413 million in the fourth quarter of 2022 from $285 million in the fourth quarter of 2021.

EBITDA for the full year 2022 was $1,469 million, an increase of $563 million from the full year 2021. After adjusting for charges associated with business combinations and other special charges, adjusted EBITDA increased 52% to $1,600 million in the full year 2022 from $1,056 million in the full year 2021.

Net cash provided by operating activities was $1,090 million for the full year 2022, compared to $609 million for the full year 2021. Adjusting for GAAP guidelines related to the classification of certain cash receipts and payments associated with our receivable sale programs and the cash payments associated with special charges, adjusted net cash provided by operating activities was $1,249 million for the full year 2022, compared to $883 million for the full year 2021. Adjusted cash flow for the full year 2022 was $700 million, compared to $81 million for the full year 2021.