Greif (GEF) 8 Jun 232023 Q2 Earnings call transcript

Good morning and thank you for standing by. Welcome to the Greif, Inc.

Second Quarter 2023 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Leahy, Vice President of Corporate Development and Investor Relations. ahead. go Please

I morning, Hilsheimer, XXXX good Greif’s to second Executive Relations. Greif’s President Greif’s Ole Thanks and Chief President conference everyone. Financial call. fiscal Chief And Investor and earnings Corporate and Leahy, joined This quarter by of Rosgaard, Larry and Officer; Development Welcome am Greif’s is Vice Matt Officer.

because the please we In accordance you fair disclosure, ask We material regarding with call. consider prohibited non-public will with you individual are today’s important take from discussing on end of questions basis. issues questions at the information regulation an

Please turn to Slide X.

reminder, beliefs will make related a those could forward-looking and events. today’s future from expectations results Actual plans, As call, to differ during statements we materially involving discussed.

non-GAAP most to and be certain financial presentation. metrics of can Additionally, measures directly in GAAP we the the appendix found today’s be reconciliation comparable will referencing

turn And X. Slide now over I on will to Ole the presentation

Greif of likes quarter good second posted Thanks, exceptional morning we which Great of volume Matt historic since Recession. have not everyone. and The an seen face headwinds, the in the

strategy. from value-over-volume year, and proud Our our doing could of discipline swift extremely the we our advance executing and pricing well work taking teams be businesses our maintaining are down to base driving working this network, capital. Build under across action cost to cash our are extracting Last by not manufacturing on lower philosophy to I our team our

half of making. process challenging the the and years Our under a market to first performance been well our has in XXXX specifically, ability conditions execute in

our past our June, the continued visible last teams Investor are now work today. put of the and bearing several with evolution benefits in have becoming As you company we are fruit shared our growing more Day years at as hard over a the

terms to contributions service, call in like to outstanding long mission would it, as we I On teams. used the of CSI results, metric specifically service reflect set become the second our our XX. recognize Index legendary during I success. customer our out or quarter achievements financial above our made a highlight the in we to to drive overall customer XXX ability three recognize our as discussing of Customer a Satisfaction of satisfaction am produced score product our value. proud we second of target as deliver several team and and XX We Before benchmark our have And GIP CSI, quality, who, consecutive to an of of quarter, aspirational customer for

score XX. Our PPS colleagues a of with were not behind far

of to the in is performing for colleagues team of To towards the our support in to to world. to provide to everyday XX,XXX our of the customers. you Thank market period our be level service almost challenging a each conditions customer unwavering and service best Greif this continue a dedication vision your testament working global company

ability Our engagement to related directly to is the drive our of and service colleagues. legendary customer well-being

in colleagues Our thriving and creating first mission, Last is our our first Build mission communities. why to come

And Engagement I with of Annual in quarter, to Greif engagement percentile proud share around the compared X% to year. manufacturing improve XX% in global participating. survey am with over all our completed companies by world second the quartile During of top engagement continue Sixth last jump Gallup remain to colleagues we the we Gallup, that our and Survey at a

the was a it Global In announced Loved among Workplaces we Newsweek. XXX rank done that survey amongst top or addition, Most in the past month, in by

all results firm direct about of are of result you of year dedicated that we survey the placed the our new for we which survey Newsweek’s the are financial in was to engagement the with years, U.S. now we top to our belief It’s top a While company based this as company are in as be first elated are counted a global colleagues. XXX conducted. share very

Our solutions of and serve on a circular third organization and to our support and sustainability, focus customers ability our lowering and model economy. promote our with the the to carbon long-term. with our driving ethically business for critical footprint is been mission has a sound to cornerstone always about remains future At a protecting profitable Greif, sustainability excellence

your This us quarter, investors a sustainability sustainability our XXth we published includes sustainability encourage on our I and of strategy. Annual and Sustainability announced to our which this Report, recently report targets strategy. share overview highly our XXXX thoughts share with our review comprehensive

Finally, advancing scalable extraordinary strength. a more stronger, for a final at become modernized are moment of us of financial three our recognition mission helping organization, our and of and leaner teams Greif, ensuring who

are global possible be global our and our And global support operations and not performance technology would operations over in with without simply team organization group, a digital our our We organization. XX supply coordination information of and chain the countries.

the or we as Kim February consistent with globally a operations Operations led Our tools, and Group, Kellermann, purpose processes Global approach improving in of behaviors. GOG, call XXXX it, to formed through was by

Our One a has colleagues’ safety, culture manufacturing level well-being, and productivity. retention safety across safety XX% significantly improved incidents improving lower to network measures zero-harm production Greif our by approach driving with and is

as cost synergy optimize yield that structural continues and also through drive enterprise. the gains integration provides out value Sigma real to Our Gemba as designed the we These GOG modernization productivity team current daily programs, business, help performance driving continuous to to also grow of greenbelt teams standards savings and Business execution and are only elevate cost automation collective System certification the but or our foundation all not plant X.X improvements, our well and as Six acquisitions. GBS and champions to creation across GOG Greif our of capture efforts accelerate as accelerate

starting savings are in a the already is initiatives. see our impact those example these to of and quarter of success the this financials We of prime

digital-first to order market management ecosystem and and delivery This speed team Vivian in and on our digital a approach. comprehensive deliver joined production our information to strategy gains of leadership, accelerate scale. better led by of experiences frictionless leveraging with at Our a Vivian’s aims and strategy digital XXXX is to to are who technology our leverage legendary effort opportunities customers December multiyear for modernization to margin Greif and and infrastructure operations scale, Bouet, is transformative launching global modernization expansion technology improve will Under building automation, AI service. our This and real-time we exploring Greif efficiency enable intelligence accelerate and service. our technology our drive customer market further and systems capitalize

terms. Schoner, leveraging our GIP chain advanced is improve benefits. chain are are optimize our to team to supply management scale revamping across asset and material Finally, and advancing approach undergoing and utilization sourcing raw network function Greif PPS Tina is capital working supply advance us transformation purchasing chain. circularity digitization, chain a a and global taking and The They logistics in automation to led better to model. sustainability supply chain, supply sourcing One supply also our helping invest They drive global by and our and focused on capabilities,

continue serve of improve Greif the partner savings Tina’s purchasing We being customers element decision-making, We well a this supply group best-in-class and My excellence. with identity ability and our flex to to and key quicker work better profiles to is believe you our this our success, chain to as provide tangible multiyear expect One agility the Vivian’s to with that teams across a our will our three global thanks The changing IT cooperative world. our of enabling commitment teamwork, customers approach for as journey Kim’s, demand proud under all. global teams’ I GOG, the exemplify leadership. of am sincere cycles.

million on of results million financial our to over posted flow. strong Slide shift free and I’ll EBITDA a $XXX.X in result Now with X. quarter of $XXX.X cash Greif second

Our XX%, testament our Day. and well conditions. of conversion historic history, These model. the of only by remain exceptional headwinds greater can above market EBITDA was XX% delivering at what business of over XXXX highest in and controlling our a QX was exceeded Investor results on the the we long-term considering second year. regardless We volume focused ratio than resiliency outlined last to And our results are control cash company are target

$XXX growth in story to closed of delighted target more We the and organic GIP the growing acquisitions minority our advanced Lee fit X leverage nearly months Centurion the yet strategy on the and could a range. Container offering supports enhances margin-accretive still North IBC years. resin-based it growth acquisition in offers The business watched business and of inorganic in step excellent Between at X Centurion a million not with our a be we as midpoint is the for next past we America, This ratio we quarter as spent we this majority portfolio. take goals, Greif’s partner business quarter, have rapidly an have partnership. grow this and Centurion, past our also Centurion economy to Container, the circular

to we targets the deploy intend Our towards capital robust remains M&A continue pipeline quarters. and value-accretive in to coming

take into dive a the Now of of Slide I’d deeper like results turn primary Please our segments. X. to to each

strict the produced actions quarter cost teams persistent sales. Greif Our by substrates well solid our posted GIP systems margins results decisive our for despite business lower demand to This is regions. pressures philosophy despite and in strong and the quarter value-over-volume adherence Quick business all action. as yet in in as another

other volume support past APAC largely North on few compared comparatively feel some side, the basis. steel due lower year-over-year volumes to automotive as GIP effects year remain now chemical which a down agricultural products both EMEA demand products and started the still volume with and our from with prior regions stronger, same the double-digits. though in and all resin-based markets markets. perspective the American a has low and macroeconomic and was end day global and weakest double-digits softness better down end LatAm, low to the markets. has On The showed geographies to fared from quarters, within down were coding per

back and of However, we occur inflection to anticipating are and see into one volume did material quarter in the May the not XXXX. half exiting not a

regardless second We excellent focus quarter. value to the our levels continue their work demand the for in commend team environment the will I of GIP and global on

primarily owing XX,XXX demand to Despite converting $XXX added which second declines only operations. our a of to day headwind, substantial double-digit $XX performance material ongoing raw tons to Paper our system total the our mill took soft swift cost volume turn PPS costs. Slide million and by due X. Please downtime in we We from primary per this Packaging year-over-year million volume approximately with environment. quarter actions, faced sales to was benefits across as management exemplary quarter team’s EBITDA declined second the margin lower effective down both in year-over-year

paper half, will PPS and that our expect volumes declines comps most year into in converting in as but year-over-year May. end the outlook second markets remain our We become conservative prior easier. soft throughout remains in second Demand for quarter the ease

rationalization, winning delivering quarter. value time. new this cost And on team in challenging colleagues our focused PPS profitable business am Our customers during work remains proud laser I put to the our and the of forth

to QX I for will to Larry X as review now financial well XXXX Slide discuss turn guidance. our as over revised it

morning you, Thank good and everyone. Ole

collective comments teams will and across all grows result our First, than and our statement each with I excited results echo to Day. to before the this Greif want with our The growth truly to the and conviction that to colleagues. considering of a of Greif made second efforts quarter. environment serving of excellence. are Investor of Ole’s at Thank more regarding customers take all quarter I macro company a the of in teams. you only about is I moment future commitment and repeat ever a contribution the exceptional opening the the our am I

and points lower mentioned, margin actions by million. and Ole of it a $XX ‘XX. our volumes compared customer resulted philosophies $XXX in period sales environments, over and As to businesses Despite QX EBITDA our drove to to global In QX historic down teams operating compared the XXX EBITDA only commitment adhere tougher were to service. legendary year-over-year perseverance million across basis decrease to deliver this, both of approximately ‘XX demand about dollars takes expansion

Our the quarter. in did teams both

unfaltering are Our to that customers service quality know committed because they every our environment. in remain Greif and

and reliable day. customer We deliver value are every

demand how business their agile and and my manage At while our time, appreciation know respond remaining to colleagues to their customer for quickly want each changing worked teams well cost the structure executing slower have our the task, to to not to right-size dedication This in face enough extended our same to well. to as and easy resilience an extend is heartfelt of needs. I of

on that our and capital our of projects end, cycles. in are allocation, well teams the the second to several half On our fiscal will encouraged value business larger to we executing organic up accretive continue CapEx of regardless short-term grow year. pursue are To launching we opportunities CapEx that economic spend, ramp which

report the synergy front, expectations. and with with Centurion meet line recently pleased On line acquired are initial to expectations. in post-close that performing to am going I well Container integration of Container the sight M&A is or our Lee a both businesses beat And

Lastly, do The cash but million flow. free flow I’d conversion not on source encouraged like plus period. we to of am I cash an cash second the volume every focus quarter business a and lower in our ability team’s free the Clearly, extraordinary act XX% quarter, result. is during expect by drive of to out $XXX.X

flow is past we mentioned over X Greif As have machine, value are our our great shareholders. past, the a years the yielding cash and efforts in transformation several times to

when and running dramatically we respectively. in fresh believe I XXXX regarding long-standing joined earned and themselves, a overly sensitive our I different stronger, view cash XXXX, than Ole is of and and sensitive XXXX business cyclicality. for leaner less speak flow to being of model economically results consideration are evidence has Greif performance that Our in Greif a the

Let’s ‘XX In our revised strong guidance. we our now for the X full and second improved to visibility year, the performance discuss of raising guidance. quarter Slide turn are XXXX fiscal to light

continue moving team’s guidance of $XXX range million new increase results midpoint low-end reflective guidance, deliver million ‘XX, to from of are over back and ability $XX at a low-end away first of of our the introducing year. half in to of to quarter million adjusted prior fiscal the $XXX the for the EBITDA an We our

Slide adjusted cash high-priority This our of reflects to fiscal ‘XX further by modeling higher outlines pull of increase on our range cash higher taxes strong raising X also offset given as a with forward adjusted guidance million $XX and to ranges. our are generation. CapEx guidance free assumptions embedded We growth we million, flow for EBITDA, new partially expectations $XXX an projects million. higher organic our key expect cash in $XXX

close our on like I’d allocation. update recent an X Slide on providing capital to by

as nearly As mentioned of a past includes X the our range the leverage can an our in sustaining of acquisitions as that closed ratio ratio target Ole’s that extended In how completed context, the in months. the opening $XXX this funding reminder we at of remarks, capable machine cash cycle you is million at quarter as see M&A. organic X.XXx, midpoint CapEx of well

this of actionable, margin-accretive Our that And targets in acquisition to full the our continue pipeline strategy. is expect fit robust, we capacity deploying capital near-term. in

we share also following quarter, May, program. million In completed our repurchase second $XXX

We further do continue believe highly most the deployment to attractive nature gap. significant near-term, very attractive one still repurchase table. own case for valuation of the of given our much to opportunities some available plan M&A the Due the the our actionable to capital in that we not on offers buybacks of opportunities, is implement stock plan the but another and

a return bears compelling. directly we continue expanding And cash our our further intend shareholders. to to but dividend before dividend discussed we’ve our it to as reminder, remains back Lastly, yield

more opportunities in In never today. been the closing, us front excited of than I I’ve for am

are all the a teams years the resilient, the dependable, value-accretive business ways. many in ahead. operating I fund driving business cash-generating look in this on that Our and months our will forward exciting for potential growth future and to cylinders,

Slide on XX. back Ole I’ll that, turn things With to

nicely. Larry think I summed things up

we’re We day not day in of surprised this the changes the because commitment of are proud and our transformative teams out quarter, and see extremely performance our although we underway.

people our a Greif’s excellence. journey continue will Last to and evolution and by customers strategy business of to with higher serving taking growth to our and margin Build Our care fuel

and ahead, in your results work of We are for investments produce company. your will we to worthy continue to you road for thank our We interest excited Greif. the in

the Operator, questions. please line open to

Stifel. Instructions] first comes with The question [Operator Hoffman from Michael

line Your open. is now

good taking Hi, for And the thanks morning. question.

where subtracting the segments revised think to a and revision? you bit us you guidance, the segments, relative adding to two the want can in across give how two about Given guidance the proportioning little of we’re

And do was low-end midpoint you that thanks elements talk never I’ll walk end, the $XXX was had else. question. guidance said that again, various and and million. or for low sort Michael, through Certainly. at anything We each a like I’ll of about business. the walk. we

price of manufacturing total mentioned million. of a transportation mix of our From a the between as and Ole $XX $XX actions million So ones as is GIP cost lift for well leaders, cost result PPS, cost our by lower drive that million standpoint, a that units, business from of adds lift the the is about as $XX million $XX and relative will a $XX remainder of about Centurion of about kind drag. million There where drag is Volume $X year. SG&A incentives the PPS. in over $X to and that in some and $XX the a to GIP million were. better million we about is million thing. mostly about related drag FX big

You’ve million predominantly of guidance X the line below just items, got in ends are about PPS of between about we million in $X first then that with $XX than GIP things. at the just of being worse XX before where odds kind better various million what on given $X or were And that the items X. had we slightly other actually it’s businesses quarter than the and

hopefully, from that helps the to you walk XXX the So XXX midpoint.

Okay. That’s terrific. Thank you.

level not analyst in And my world coverage packaging I outlook things. and growth yet is in the volume per economy. your in a lot there of paper suggest that’s that saying low a GIP case. industrial not particular would the the I’m is industrial So se. cover And still and

needs excess is actually product a is, story this do structural – I’m clear. not about in versus happening that? see growth think the what’s curious do or it how stable is your you you there fact, view. a that behind channel But there demand to So in the under

one face we So taking even Michael. just XXX the went volumes further the quarter, thing, sales. unit now And was of in GIP. significant last clarifying we’re to When in in declines that down

So and let of end at markets our are there year. guidance more prior year the on But beginning I’ll end significantly impacts. the the Ole impacted even original – the market specifically some to relative of comment

Yes.

Michael, your we bulk declines the and three chemicals are your thing, bulk we is sort to particular insulation end cars. of chemicals, like GDI chemicals fridge, have biggest – They MDI. the where foam used if in markets that dashboard in and in you So in the produce seats and see

fact So they they less that move means so world, that around houses with thing. people the that fridges less buying of and the and sort buy on, less are

The other last there the one are business. coatings. same. is And reasons one loop then the paint is the and And the

So to the their pattern those those the We lot And We thing. changed ordering. that level are smaller past. down se. that of is three are And of destocking sort orders, and more are are down. frequent than our now lower what our has see They significant a are lot we that segments, the and are which safety we see accordingly, But in customers. – any biggest orders per then but see taking we’ve of is us to that to doing. they order seen from stocks to what a more three us paying of don’t panic urgent a sort respond means customers

have our beginning that beginning, gradual in again fiber. in you PPS a And this reflected guidance? in another – of we’re Okay. on seeing revised part very recovery coverage And and then business, how the recycled

across week. pricing primarily downtime being year, is Yes. of slightly all it’s related. up There through so. early Michael, this taken week rest increased maybe ago generation believe the paper produced. or more industry, the We the another it with trend just OCC a that aware, – are resin or – the that will being less is you $XX We of economic – We in

pricing some say, one-off And allows of so of the a down, I more stuff level haulers is also the things that side may is the kind profitability. supply trash would of imagine at that the although various still we and dominantly, in communities, not of that

land getting instead our sold. is some still belief of built So

very Okay. Thank much. you

Staphos George [Operator Instructions] The of America. next with question Bank comes from

line Your open. is

but Hi, a your Ole, congratulations to I end that. was PPS, said your you did Good and relative I the a much. Thanks between wanted everyone. come morning. terms in and On to quarter were so And just discussion, back question. GIP details back relative you Larry, about Thanks forecast. not breakdown answer $XX one to talking million for you really thing the to price/cost catch to can benefit during classification, good the go our certainly Michael’s if markets. it of mix, on also bridge, in to the

America sure a North in weakened, said had but couple wanted other for posterity I was I and follow-ons. just of You I weak, make what that to other markets some weakened. had had of also terms had

Yes.

the breakdown from $XX million reiterate, to we numbers So million $X this on And the and was guidance PPS. the I’ll walk that GIP George, guidance. is QX million $XX revised the in gave

to from, I QX turn Ole. back to obviously, QX, but year-over-year different which like, you can separately So it address I’ll if

Hi, George.

you North So mentioned America.

we was if it in the in American aside other non-residential sequentially And at the than our worse from look market, weakest were all construction, QX. So markets portfolio. clearly North

those been the are a and primarily actually EMEA year-over-year, [indiscernible] coming and and And volumes has under reason then markets. showing they greater fairly other is in the APAC, markets but and markets. that’s primarily LatAm from pressure were down QX auto coming And end in are LatAm, at the resiliency than regions, then from the strong still but volumes real again QX. stable, ag came loop For

manufacturing costs Thanks terms those if guidance think, right combined you down snap XX, if where want said time GIP And obviously XX, of taking for the to now. think you through talked come are to it we the terms from your that PPS not What’s end as low It’s ultimately way you play. it start it in in did you provide relative can finger, quantification differently, to a what And comes there Thank Said of it you. when do this working in turn wrote that’s from I’ll back XX. and on was XQ? on it to right, benefit negative were, over. that. I I to price it XQ the into into of how all reductions. sorts lead might steel the actions? lower clarity a some what on the year-on-year of And cost then I a a flipped and you actions And XQ have That’s XQ? transportation us, or that cost XQ, specific is I was versus materializing helpful. very and some basis,

me So address manufacturing first. costs let transportation the

Our on playing also the comments GIP system, really July negotiating shifts, mean in Greif supply business spot of hawks to teams we opening those and costs see the really he the us, our maintenance and decline our chain, driving as overtime on aggressively are maintenance beginning leveraging vendors excellence and to our specifically overtime like market better summer management, on started his great business reason really rebates working on also I program. those jumped managing with did Ole then spent delivering GOG the on chain on improving and costs and in kind this is things value well volumes of from time with group the supply out – and last of looking being shift at executed eliminating and

remember, pricing that you on telling fuel a change are PPS, transportation, diesel to did we’re and they lot as a January. also in that some might pick little cost better. starting volume George, it volume-related. our is they But well. up also migrating in On to us expected see of So was customer base costs improvements really

were are information everybody pull things we cost. that structurally industry, lines attacked even sure actioned they the time of structural weakness pull those the very up. that worked they really diligently So that sort took paper when When materialize, to though And to over dramatically it’s time. our they take were and they – very from customers back in things and seeing built teams hearing shift fall, didn’t expected hesitant to the of out the in. is kind restructured and over In make rapidly

key timing. elements. So, those were the the about That’s

a them. all the when really of so And in combine of came to you across that play quarter second both lot that

your though mix price in I side in was year-over-year we tailwind if cost of price/cost terms about year-over-year, an steel $XX through in question quarter-over-quarter, the In steel, – go business, flowing about year-over-year and million down the business saw that was our on on $XX our what business. GSE steel and million

Thank will you, it I you. Larry. over. Thank turn

[Operator Instructions] Wells The Hajde with question next comes from Gabe Fargo.

is line Your open.

very on morning the quarter nice and thus doing good are you what guys Ole, far. work and

Thanks Gabe.

ask, least I million the of Day Investor laid that are actually that updated I world at doing to not we an and sort you I guys is but wanted appreciate part or $XXX here, have North worst-case fire of America think of the scenario EBITDA is out, on right now.

for How teens, talking baseline EBITDA being fit we million it the down think now well as much seeing million talking would would that you Container scenario you think backdrop. what million $XX the Centurion is about add in from are in maybe it view permanent kind in of And about mid or case from the which I so And as about, to have backdrop? business? in of economic much anything a worst like else being new are then response you XXX would how might the maybe about the base understand scenario the So, situations pretty worst-case that is Greif. characterization in of $XXX of for the look volume Lee structurally, high that to XX $XX are us EBITDA, backdrop? massive the again, in recessed is now we the what sort you and as pretty think to of [ph] and is If bad the of or okay, or the

at element every the of But had Centurion. on elements through, at they question, have you in job. have maybe teams Day, and optimistic as we think it’s on a on mean that Yes, executing great point I are how I mentioned that walked our a yes, the Lee you laid do out and obviously, you Gabe. strategy, that we been Investor doing fair would also and not

then guidance impact It You scenario came of the Centurion. up for Lee at we plus XXX we the XXX. And us. of with That future year. see in end quarter below Centurion. out in I a of low-end not rest acquisitions where any include front did don’t more last plus Lee included have – full the we

baselines old So, I think those are gone.

I that. through will all. what we to just haven’t say are you to baseline, be at really think come But far yes, we off could you walked walked our playing, the back So think ballpark what’s I and through new don’t

that also improvements what we have made consolidations And the we haven’t Gabe, I – all of that rooftop as mentioned some we well. mentioned mean the we is made. operational

Most We progress. have of in done are six. them

benefits come of through immediately, don’t the end. trickling towards lot While the coming, year are a them them from

year well. You of the will the full those see brunt exiting as

Yes. URB the And in business those side. are primarily in our IPG

going because level for that would are Okay. And you guys, kind or the like fact, maybe of kind maybe seeing. know basis, thinking and outlook like because a the to midpoint to high there of if just some guess are we about, of case, I or this that how is something one are midpoint, easier in then end? about But is, Maybe maybe for in which underlying consistent month end upside, restock year. year-over-year of relative what October sort the get I if event sounds economy to it would again, what you maybe thinking on but only the I guess of comps. just low the the or you be is reaccelerates that And demand improves easiest. you guess embedding I to that’s But that,

Yes.

I correctly, went at. reason the to the we where we We quarter, talked the being said low-end you think are first when – we about guidance just uncertainty total it Gabe.

We are not by that’s as range. came we uncertain stretch, the any back to and now why

high half actually. some than second demand confidence did build then on element the any come into ours. does we are have drives seasonality at, upside, up, second are so upside where ag if other of that we up in minor We of of stuff. And we get a on something you not really tick that improvement gee, confidence in But kind little the the some over forecasting half

if So, like on the the But things for better building slight for for up, pick great, you not look, just that turn mentioned. hey, upside in a are and around us. events if we amount all except

as GIP year? out looking difference that I that, side we remainder else if And to of should of GIP, come that...? in this, to Does that Okay. fiscal of and mostly million earns of I the out And appreciate unwind $XX this hate because on hone QX? the Is next timing-related. more less $XX there equal, the know are assume sort then we that that and steel was next all over timing called but in year, on the then between price cost you million year and I kind

It of we better a not, and no. remainder is of the year. are flat actually, predicting over But steel relatively this Gabe, on cost-price timing. lot this

that us trends ‘XX, cost over quarter had year mechanism. year turned normally it but costs, some that benefited around. pick industry, talked they up, steel of pick on highly going the again, We through or mitigated it really in up the a picks trend have rapid if the actually bit to demand that it the odd, costs a had continues very pass-through nicely. up, see so, And of very cycle us. about beginning of in then it in as incessantly benefit for because it the first second in We that this to We if very up we even construction in increase to auto if quarter, steel continues up a steel of and out start that us

some got – decrease steel turning of costs end in had shouldn’t the with we that rapid toward high-cost inventory, around have we a where be anything quarter So, us. stuck will we on unless some we

Okay. I you. Thank it turn over. will

an bid environment One and going lots that. caveat to like on that. where customers This are of pricing is out stuff

value. that how have are we the play we marginal see could see in the environment value to But deliver is. impact. have some and confident But that service you customers our to So, that that through competitive

for Securities. standby question George with question. of comes from Please next America Bank our next The Staphos

Your is line open.

you guys. very Hey much. Hey. Thank

And a be go XX%. EBITDA, the to rate expense up I just QX tax The up goes $XX to a directly up are If cash tax low now million. million. necessarily EBITDA from not I wouldn’t big guidance, just of recognizing $XX comparable. would more Just knit-type revised at they the was question, EBITDA than applying and again, a would tax but little your goes bit given look deal applying one I sort expect midpoint that not XQ,

rest And XXXX? is on improvement would anything call outlook more on you else cash the year, this importantly, we year away going remember future? capital, Thank else for of the get we working tax anything and for that the significant anything terms in into comparative reasons need for then or you. would take there the that either we this of to out as that So,

it’s income of So, it really the just cash the on taxes, where mix is.

in the income higher all rate previously the It’s – just is than we range over at remains is. jurisdictions change XX% generated XX%. It that’s had tax been it rate where it’s of it it’s just slightly of Some it still, remainder of predicted. on – tax And rate. didn’t the tax our And year. to a

were reverse. to working opportunity built but we our out over to have this well. sort nothing into offset right thing build still increase capital, concern year-over-year is working a capital improvement will capital, improvement call are to that have on job, doing continue to obviously we in we you a to improvement rapid actually – continued say, in source, to profitability. nothing drive what to of is we only be and had yes, growing The – should it’s we the have you and but doing The there sales basis range. So, capital. working obviously if then think again, growing economy teams Relative great that by only which slight a bridge in because before But a on working guided we a

hey, headwind hearing there or isn’t build is what either out, But a watch for I that tailwind from there am in further something No, in that’s need from we fine. for listen, you. environment, next year, to whatever the

No.

have guys will I you over. while turn and One last it I one

do customers in Ole, the now, be where to area Thank So, your reconditioning in from you that’s and should a look the platform an IBC to in reflect of, grow right the both total reconditioning? grow you you product the with to have luck IBC need want you be think you basically still quarter. Greif there and you both on also business, Larry, we you and also inorganically, and suite, again, good terms or expect if

into pipeline, yes we Yes. Without George, answer. getting the what our have is in

are close very, We they are what looking to at some we doing. very adjacencies, but are

So, are primarily that. strategy. go not reconditioning, containers, our within life everything to going core we cycle And supports outside at. we That’s that looking services are business our what of resin-based

Okay. the I guys. here. turn will I it comments over. appreciate you, Thank

for next the from Please Fargo. standby question. Gabe question Hajde next The Wells with comes

line Your is open.

backdrop. you, actually Larry, to competitive dig my wanted in I it had terms Thank guys. and you up brought the I on in, list, of it

rising versus maybe feeling in to anything would that folks kind side? to or you economic this you kind journey no, from up interest of or expected a for tough I in you pretty feedback translate disciplined has rate anyone a you perspective GIP your to So, operating competitive where sheet sort of I have would who disciplined maybe balance you been where asking me, And tighter in commercial the response intuitively speak the pretty anecdotal specifically are terms at. the comfortable conceptually to-date that and from Have compete is say credit against for of environment. a not of am more just seen now you are guys into environment, on your backdrop,

Yes.

side, go which of That’s entire totally world pretty our But talked extremely acquisitions the in a available capacity are at leverage X.X% way, at facility, the $X.X we perspective, around in I by us we markets from individual ratio. from farm competitors quite from closing know having is situation. targets our our up constant. credit of the rogue billion still you have a standpoint, that always on sheet in just GIP and right we system, of completed not and very And right, financing least are rates. get frees competitive we giving the time-to-time. one middle a about mean I And a our debt X%, position of good good On yes, very, much sort million which you balance $XXX be mentioned,

to we it they we and the I things. to think realistic we but at from are act with be be optimism, good team. mean heard going continue way haven’t And competing our in going for they appropriate anything about to competitors differently look business. yes, also So yes, are an

these story teams for are, through being So, pandemic the work board. across well that are tell proposals through sometimes to that you be the they our always these business our we our as wasn’t value serve RFPs customers how – good particularly negotiations. will the and when we true the deliver, have tough a But about

quite away seen a have we from that, boomerang call gone we to them, they where addition in just And have well us. few customers as as

a examples of And door. away a the months they our more the for later, have reason, from us and basis. we to back several then say knocking regional that’s whatever local are is provide this exceptional They gone or customers. would on I on And So, due service have that. six we

last Thank the you about, One bridge on plus that you XX. for price-cost talked Ole. one that

translate it, OCC to GIP would in like minus $XX maybe I was containerboard And plus cut to, another to million. that applicable the I XX. half I a the was assume something that, ton And think Paper that’s take year assumption call trying for, $XX XX. of the increase compare, am maybe if and then contrast just X. the or that’s in incremental

into timing-related, So, it’s we have I am am ‘XX. or through something if fiscal and if more I curious missing there carry that to is

Yes.

about Gabe, way to that QX-over-QX, talking And XX positive to X total maybe we Just we GIP for but originally company XX on on to to within get positive and is PPS relative a year-over-year. gave. the obviously, pricing the for relative guidance clarify, in you for assumptions PPS it guidance, had different at OCC, was a basis better

basis on and throughout million up we businesses. down on pricings So, $XX on two million the are an overall $XX costs

in side is inventory CorrChoice, the mill into system until sell our Some CorrChoice – related management of that actually it system gain when because get that working cost hasn’t we sold. capital in gets that the to doesn’t been from if mill recognized

does team of a at profit. that in job CorrChoice quarter, frees it the when a really So, intercompany up inventories driving down good then

and $X your million So, $X element of CRB down profit the that’s of the about driving free offset actually helpful. elimination impact of inventory, down million have by wave Hopefully, and up. you $XX opposite million price by that million of $XX benefit OCC about up of containerboard

you. Thank

I turn for this time. I to closing like to show at the call further back remarks. no Matt now would questions

Very hope and good. Thank you everybody for I have a day. joining today you nice

participating. This you concludes for Thank conference today’s call.

disconnect. may You now