11.01.23
Graphic Packaging Holding Company reported results for the third quarter of 2023.
Net sales decreased 4% to $2,349 million in the third quarter of 2023, compared to $2,451 million in the prior year period. The $102 million decrease was driven by $223 million of unfavorable volume/mix. This was partially offset by $92 million of positive pricing and $29 million of foreign exchange impact.
EBITDA for the third quarter of 2023 was $448 million, $16 million higher than the third quarter of 2022. After adjusting both periods for business combinations and other special charges, Adjusted EBITDA was $482 million in the third quarter of 2023 versus $441 million in the third quarter of 2022.
Net income for third quarter 2023 was $170 million, or $0.55 per share, based upon 309.2 million weighted average diluted shares. This compares to third quarter 2022 net income of $193 million, or $0.62 per share, based upon 309.6 million weighted average diluted shares.
The third quarters of 2023 and 2022 were impacted by a net negative $42 million and a net positive $3 million of special charges, respectively.
“We made further progress toward achieving Vision 2025 goals in the quarter, operating the business at sustained, higher margin levels supported by our innovation engine and focus on consumer packaging,” said Michael Doss, the company's president and CEO. “Our multi-year CRB system transformation continues with the 550,000-ton K2 recycled paperboard machine fully ramped and operating at or above committed efficiency and quality levels.
“Correspondingly, with the recent decommissioning of our longest-running CRB machine, we have removed approximately 480,000 tons of higher-cost, less-efficient production capacity since beginning the project in 2019,” Doss added. “Paperboard quality on our state-of-the-art machine is generating significant interest and we recently sold our first packaging solution utilizing the new Pacesetter Rainier recycled paperboard. Finally, in alignment with our balanced approach to capital allocation and investments for growth, we completed the Bell Incorporated acquisition during the quarter, further expanding our portfolio of solutions into new product categories.
"Despite the continuing modest impact to packaging volume caused by inventory normalization and some fluctuations in consumer purchasing behavior, we delivered adjusted EBITDA growth and margin expansion in the quarter,” Doss noted. “We exercised a disciplined approach to production and actively managed our supply to the current demand environment. During the quarter, we reduced paperboard production by 150,000 tons.
“Importantly, we remain on track to achieve $1.9 billion in adjusted EBITDA, the midpoint of guidance for 2023, an increase of $300 million from 2022,” Doss concluded. “In addition, leverage exiting the year is expected to return to the lower end of our targeted range. We were pleased to publish our 2022 ESG Report in September, and to learn in early October the Science Based Targets initiative approved our 2032 carbon reduction goals. We are focused on driving innovation with customers and advancing the circularity of our products. As we do this, we are fulfilling our purpose to package life's everyday moments for a renewable future."
Net sales decreased 4% to $2,349 million in the third quarter of 2023, compared to $2,451 million in the prior year period. The $102 million decrease was driven by $223 million of unfavorable volume/mix. This was partially offset by $92 million of positive pricing and $29 million of foreign exchange impact.
EBITDA for the third quarter of 2023 was $448 million, $16 million higher than the third quarter of 2022. After adjusting both periods for business combinations and other special charges, Adjusted EBITDA was $482 million in the third quarter of 2023 versus $441 million in the third quarter of 2022.
Net income for third quarter 2023 was $170 million, or $0.55 per share, based upon 309.2 million weighted average diluted shares. This compares to third quarter 2022 net income of $193 million, or $0.62 per share, based upon 309.6 million weighted average diluted shares.
The third quarters of 2023 and 2022 were impacted by a net negative $42 million and a net positive $3 million of special charges, respectively.
“We made further progress toward achieving Vision 2025 goals in the quarter, operating the business at sustained, higher margin levels supported by our innovation engine and focus on consumer packaging,” said Michael Doss, the company's president and CEO. “Our multi-year CRB system transformation continues with the 550,000-ton K2 recycled paperboard machine fully ramped and operating at or above committed efficiency and quality levels.
“Correspondingly, with the recent decommissioning of our longest-running CRB machine, we have removed approximately 480,000 tons of higher-cost, less-efficient production capacity since beginning the project in 2019,” Doss added. “Paperboard quality on our state-of-the-art machine is generating significant interest and we recently sold our first packaging solution utilizing the new Pacesetter Rainier recycled paperboard. Finally, in alignment with our balanced approach to capital allocation and investments for growth, we completed the Bell Incorporated acquisition during the quarter, further expanding our portfolio of solutions into new product categories.
"Despite the continuing modest impact to packaging volume caused by inventory normalization and some fluctuations in consumer purchasing behavior, we delivered adjusted EBITDA growth and margin expansion in the quarter,” Doss noted. “We exercised a disciplined approach to production and actively managed our supply to the current demand environment. During the quarter, we reduced paperboard production by 150,000 tons.
“Importantly, we remain on track to achieve $1.9 billion in adjusted EBITDA, the midpoint of guidance for 2023, an increase of $300 million from 2022,” Doss concluded. “In addition, leverage exiting the year is expected to return to the lower end of our targeted range. We were pleased to publish our 2022 ESG Report in September, and to learn in early October the Science Based Targets initiative approved our 2032 carbon reduction goals. We are focused on driving innovation with customers and advancing the circularity of our products. As we do this, we are fulfilling our purpose to package life's everyday moments for a renewable future."