Greif says 2022 most successful financial year in company history

Greif President and CEO Ole Rosgaard says the Delaware, Ohio-based packaging producer has had the most successful year in financial terms in the company’s history, highlighted by a strategic acquisition and a free cash flow generation of more than $500 million.

The company reports a strong finish to its 2022 fiscal year, “despite growing headwinds,” with a net income for the fourth quarter of $99.5 million compared with $104.5 million in the same period last year and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $218.7 million, an increase of $7.4 million compared with last year.

RELATED: Greif invests in recycling operations

For the fiscal year, Greif reports net income of $376.7 million and net income excluding the impact of adjustments of $471.2 million. Its adjusted EBITDA of $917.5 million is up $153.3 million compared with last year’s adjusted EBITDA of $764.2 million.

The most notable figure, however, was Greif’s adjusted free cash flow, which reached $506.3 million—a full-year record—representing a $232.2 million increase.

“We believe these outstanding results are driven by the high engagement among our teams, our focus on delivering legendary customer service and our consistent commitment to a value-over-volume approach,” Rosgaard says.

Greif’s acquisition of Homerville, Georgia-based Lee Container highlights the company’s 2022 acquisition activity. The high-performance barrier and conventional blow-molded container manufacturer was purchased for $300 million in early November, and the deal is expected to close by the end of the calendar year.

Lee Container primarily serves the agricultural, specialty chemical, oil and lubricant and pet care sectors in North America, operating three manufacturing facilities with locations in Homerville; Centerville, Iowa; and Nacogdoches, Texas, and 500 employees across the United States.

For the trailing 12 months ended Sept. 30, Lee Container generated sales of $162 million and adjusted EBITDA of $33 million, and Greif says it expects to realize approximately $6 million in synergies within the first two years of ownership.

“The expected acquisition of Lee Container will help further drive margin-accretive growth,” Rosgaard says. “I am excited about this new opportunity and look forward to the year ahead with our new Lee colleagues following closing in December.”

All Lee Container products are 100 percent recyclable, and Greif adds that the move offers immediate scale in jerrycans and small plastic bottles in North America, a platform for future growth, favorable exposure to growing agricultural and specialty chemicals end markets and attractive return profile.

RELATED: Greif to invest $13M to expand operations in South Carolina

In its Paper Packaging & Services segment, Greif says sequentially slowing domestic demand resulted in 26,000 tons of downtime in the fourth quarter. Tubes and core and sheet demand was down to high single digits, and film and paper core end markets were the slowest during the quarter, partially offset by what Greif says is stronger-than-expected construction core demand.

The company adds that rapid steel cost declines pressured its Global Industrial Packaging (GIP) segment margins and it expects the trend to continue into 2023. Greif reports GIP net sales decreased by $126.7 million primarily due to nearly $84 million of prior-year net sales attributable to its Flexible Products & Services business that was sold April 1, negative foreign currency translation impacts and lower volumes.