Greif CEO says Q1 results highlight ‘resilience’ of new business model

Despite a significant decrease in net income for the first quarter of 2025, executives at Delaware, Ohio-based packaging company Greif Inc. expressed confidence in the company’s restructured business model, with CEO Ole Rosgaard saying Greif is “transitioning from good to great.”

The company’s net income decreased 87.2 percent, shrinking from $67.2 million in the first quarter of 2024 to $8.6 million in the most recently completed quarter, which Greif primarily attributes to a nonrecurring income tax benefit of $48.1 million in the first quarter of last year. Net income, excluding the impact of adjustments, is down 69.1 percent to $22.5 million.

In December 2023, the company announced an organizational shift from region-based to substrate-based operations, which officially took effect in November 2024. The move was meant to emphasize Greif’s shifting product mix and is structured in segments that include paper, metals, polymers and integrated products.

“We continue optimizing and fine-tuning our business,” Rosgaard said during Greif’s earnings call Feb. 27. “We are transitioning from good to great. We are a market leader in our chosen markets. We have strong track records and are very disciplined in the way we execute our strategy.

“In other words, we are well-positioned for growth. We are helping ourselves to grow in a very depressed market, and when that market returns even the slightest, we are in an ideal situation to take off.”

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Greif’s first-quarter operating profit came in at $59.9 million, down from $68.9 million in the same period last year, however, its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are up slightly, coming in at $145.1 million in this year’s first quarter compared with last year’s.

The company also reports its fiber segment saw a slight increase in volumes and operating rates across paper grades, and gross profit in the segment is up year over year thanks to an improving price/cost environment.

“Total boxboard is basically flat year on year, and when you look at the URB [uncoated recycled paperboard] business, then the edge protection is softest, but the tube and cores … they’re actually up year on year,” Rosgaard added of fiber markets. “Until we see a paper market inflection, we don’t really see a big drive of demand.”

According to Greif, the Europe, Middle East and Africa region has demonstrated the “highest level of resilience,” followed by the Asia-Pacific region. Meanwhile, the Latin American region has “started to trend slightly downwards,” which Rosgaard says Greif is keeping an eye on.

“But the clear outlier remains North America, where demand sentiment continues to be the most bearish,” he said.

The company’s total debt increased by $548.4 million, primarily as a result of its acquisition of French packaging company Ipackchem in the second quarter of 2024, and in an effort to reduce debt, Greif intends to divest its nearly 176,000 acres of timberland in the U.S. Southeast.

Rosgaard also provided an update on Greif’s tariff mitigation measures, crediting the company’s restructured business model for embedding adaptability into its global supply chain.

“Thanks to our restructured business model, we have embedded flexibility and adaptability into our global supply chain, allowing us to seamlessly navigate disruptions without any material impacts,” he said

“At Greif, we view our key suppliers as critical partners, and by fostering strong collaborative partnerships, we respond swiftly and effectively to volatility. Our supply chain team has conducted a thorough impact assessment across multiple tariff scenarios and developed a robust action plan to effectively mitigate any P&L [profit and loss] exposure. Regardless of potential tariff changes, our global scale, operational agility and supplier relationships ensure we continue delivering legendary customer service while driving sustainable profitable growth.”