Good day, and thank you for standing by. Welcome to the Greif First Quarter 2026 Earnings Call. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Bill D’Onofrio, Vice President of Investor Relations and Corporate Development. Please go ahead.

Good morning, and thank you for joining Greif's Fiscal First Quarter 2026 Earnings Conference Call. Today, our CEO, Ole Rosgaard, will provide a strategy and market update, followed by our CFO, Larry Hilsheimer, with a review of our financial results. Please turn to Slide 2. In accordance with Regulation Fair Disclosure, please ask questions regarding topics you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. During today's call, we will make forward-looking statements involving plans, expectations and beliefs related to future events. Actual results could differ materially from those discussed. Additionally, we will be referencing certain non-GAAP financial measures and the reconciliation to the most directly comparable GAAP metrics that can be found in the appendix of today's presentation. I'll now turn the call over to Ole on Slide 3.

Thank you, Bill, and thank you all for joining us today. We entered 2026 from a position of strength despite a still muted industrial backdrop. Our Q1 performance demonstrates the progress we are making on two critical fronts, delivering solid financial results in the present while also making progress on our longer-term build-to-last strategy. During the quarter, volumes performed as anticipated, remaining in line with expectations due to continued softness in the industrial economy. Our EBITDA margin profile continues to improve meaningfully, up 260 basis points year-over-year, which is the result of decisive actions taken on our cost optimization. As a result, adjusted EBITDA increased 24% versus prior year, and our results came in as expected. Based on this performance, we are reaffirming our 2026 guidance. Following the portfolio rationalization we undertook in 2025, our leverage is now historically low, enabling significant capital flexibility to create shareholder value. In Q1, we completed $130 million of the $150 million share repurchase program we announced three months ago. Given our strong free cash flow projection for the year with a conversion ratio of 50%, we fully anticipate remaining well below a leverage of 2x. Our strong free cash flow generation and balance sheet strength allows us to fund value-creative organic growth, including growth CapEx in our existing operations and higher return end markets. As we drive growth externally, we are also accelerating internal transformation. Our run rate cost optimization is now at $65 million, which reflects primarily SG&A actions taken early in fiscal 2026, which will benefit EBITDA for the majority of the year as contemplated in our original guidance. As a reminder, our fiscal 2026 year-end run rate commitment is $80 million to $90 million. We are confident in the progress we are making, and we believe we are demonstrating our ability to manage the present while continuing to shape the future. Please turn to Slide 4. Our end market performance reflects the reality of broader economic conditions remaining soft. In Customized Polymer Solutions, demand was essentially flat overall. IBC volumes were up low single digits. Small containers were down low single digits and large containers down mid-single digits due to continued industrial softness. This is consistent with our expectations heading into the year, and we expect small containers to sequentially improve into Q2 as Ag seasonality picks up. Durable Metal Solutions remained under pressure with softness across regions, especially with chemical customers. We continue to focus this business on cost discipline and cash generation. Sustainable Fiber solutions saw volume declines in converting due to North America industrial softness, but the mills ran at solid operating rates throughout the quarter. Innovative Closure Solutions volumes declined high single digits from both metal and polymer closure demand, driven by the industrial softness I just spoke on. Importantly, total sales, which reflects sales both direct to third parties and sold through our polymers and metals businesses were approximately flat due to strong price/mix, with volume down only mid-single digits. This shows that our highest performing products remained the most resilient in the quarter. Overall, Q1 performance was consistent with our expectations and reflects our ability to improve margins through disciplined execution even in a muted industrial environment. With that context, I'll turn it over to Larry to walk through the financials on Slide 5.

Thank you, Ole, and hello, everyone. Adjusted EBITDA for the quarter increased 24% and margins improved 260 basis points to 12.3%, driven by better price-to-cost ratios and the significant advantages of our structural cost optimization. Although Q1 adjusted free cash flow was lower compared to the previous year, this decline is mainly due to cash flow from recently sold businesses being included in last year’s figures. When excluding that impact, the core cash generation and ongoing operations showed improvement year-over-year, bolstered by EBITDA growth, reduced interest expenses after deleveraging, and lower maintenance capital following our containerboard sale. As mentioned last quarter, Q1 is typically the weakest quarter for free cash flow, and we are fully confident in our low-end adjusted free cash flow guidance of $315 million for the year, which we expect to convert at approximately 50%. Our earnings strength is evident in our earnings per share, which rose 140% year-over-year, fueled by increased EBITDA and lower interest expenses, even with a rise in tax expenses. In Customized Polymers, gross profit decreased with volumes remaining stable primarily due to product mix, despite gains from cost optimization. Durable Metals saw a slight increase in gross profit year-over-year, mainly from structural cost optimizations. Fiber sales were affected by the anticipated demand softness we discussed during our Q4 call; however, margins expanded year-over-year due to strict cost management and favorable pricing changes. We are maintaining our low-end 2026 guidance of $630 million in adjusted EBITDA and $315 million in adjusted free cash flow, reflecting significant structural cost optimization, year-over-year pricing changes in fiber, and flat volumes for the year. Our Q1 results aligned closely with our guidance expectations. While price and raw material costs were slightly better than anticipated, volumes and manufacturing costs were slightly behind, with SG&A in line. No individual category showed significant change, and the overall impact was consistent with our projections, reinforcing our confidence in our guidance. Our capital allocation strategy continues to focus on pursuing margin-accretive organic growth and achieving a high return on invested capital. Our leverage remains historically low, and our maintenance CapEx needs have significantly decreased from last year, both of which allow us to pursue high-return organic growth investments. We aim to keep increasing our dividend over time and are nearing completion of the $150 million share repurchase program announced last quarter. We believe our stock remains one of the most attractive investments, prompting our Board to approve a new $300 million share repurchase authorization in December. We will implement this buyback authorization thoughtfully and as part of our balanced capital allocation strategy, aiming to repurchase up to 2% of our outstanding shares annually. As Ole mentioned, we can achieve these objectives while keeping our leverage well below 2x. The strength of our balance sheet and our robust free cash flow generation enable us to accelerate organic investments, funding growth CapEx within our existing operations and targeting high-return markets, even in a challenging macroeconomic environment.

Thanks, Larry. As we look ahead, we remain grounded in the realities of a still cautious demand environment, but we're not standing still. We're executing on cost, on capital and on strategy. The work we've done to transform Greif is not cyclical. It's structural, and it shows how we perform, how we invest, and how we allocate capital. My sincere thanks to our colleagues all around the world for driving this transformation with me. We remain focused on managing the presence while also building the next era of durable value creation for Greif. Thank you for your support. Operator, please open the lines for questions.

And our first question will be coming from Gabe Hajde of Wells Fargo Securities LLC.

I wanted to ask, I mean, you guys have been operating sort of in this muted environment now for three years and have done a really good job of kind of hitting the low-end guidance and even moving it up a little bit. I'm curious, Larry, you kind of talked about some costs coming in a little bit better and that gives you confidence in the full year. But the volume performance here in fiscal Q1 was maybe a little bit even below what we were expecting. So was there anything, I guess, as the quarter progressed from an inventory management standpoint from your customers that jumps out at you? And then just being a little bit more back-end weighted, I'm curious if you can talk about trends in the fiscal Q2 such that it kind of implies a pretty good ramp into the back half of the year, on the volume side.

Yes. Thanks, Gabe. I mean I have to say that demand conditions remain muted and in particular, across fiber and steel. That's reflecting the continued pressure in both the industrial and chemical end markets. In some of our end segments, you will see some seasonality in there, which will mean they’ll pick up during Q2. But importantly, the environment really is not changing. Last week, I visited about eight customers in various parts of the world, and the message is really the same. Conditions are still muted. But importantly, that doesn't mean we're standing still, as you quite rightly pointed out. Our commercial teams are executing with intent, and we are transforming our commercial team to hunters from farmers. We're deploying capital for organic growth. We're adding capacity in spots where we can see we can sell that capacity. So we are being extremely aggressive in the market in that respect.

Gabe, one thing to supplement what Ole said is we have seen volume trajectory in our small plastics start Q2 in a very positive way.

Okay. And then I guess on the OCC front, any insights there? I know you guys obviously have the recycling operations. It seems like expectations are still for pretty flat here in the first, call it, half of '26. Anything that you'd point out for us there?

I just agree with that. That's our feeling as well, Gabe.

Okay. And CapEx, you've called out a couple of growth projects. It sounds like it's mostly small format plastics. Any particular geography or area that you want to call out for us?

We are expanding our capacity in various regions. In Europe, we're deploying additional capacity where we have strong business cases. In Africa, the mining sector in Southern Africa is picking up significantly due to the demand for precious metals. Many of the products we manufacture in that region are used in mining, so when we increase capacity there, we see a quick return on invested capital. We've also added capacity in India and last year expanded in Singapore for specific customers with long-term contracts. I'm confident that this trend will continue, and the opportunities are clearly present.

Our next question will be coming from George Staphos of Bank of America Securities.

On the topic of volume, I was hoping you might be able to give us a bit more color in terms of what you're seeing with metal, recognizing, as you said, maybe things were a little bit weaker, but not terribly out of line. Where are you seeing some strength, if at all, within the end markets within metal where things perhaps weaker? And I remember, Larry and Ole, you had been expecting some pickup to be helpful in housing if it were to occur relative to these in your business overall. Any thoughts on what you're seeing out of your markets that are exposed to housing at this juncture?

I'll make a comment first and then Larry has done some research on housing, so he'll follow up on that. Obviously, for our metal, the biggest segment that the end segment is chemicals and chemicals; one of their large segments is housing. We have not seen any pickup there. Demand remains muted, as I said. When housing picks up and when we see an improvement there, we will see an improvement. The mining aspect I mentioned earlier could be an important one because when you do mining, then you don't bring anything out of the mine. So all the equipment you have in a mine needs a lot of loop all the time. This is brought into mines in metal containers. And you leave those metal containers in the mines in situations that come landfills; you don’t bring them up. You can’t bring polymer products in a mine because if it catches fire, then you have lots of fumes. But as I said, the metals, we’re managing that for cash. So I'll let Larry comment on the housing side.

Yes, George, it's interesting. There have been a couple of headlines in the last couple of months of resale of existing homes picking up a bit. I think in like November better than 5%. It's nice to see the headline. It's interesting to get a little bit underneath it. I think we've shared before that existing home sales are at 1995 levels. What's more, I guess I call it interesting. And I look at it as interesting because I think it truly is an upside because I do believe it will turn at some point. Existing home sales today are actually on a population-adjusted basis at the levels of 1982. 1982 had 16% mortgage rates, and we were in a recession. So they are really decimated. As we've said before, when people go to sell an existing home, they spend money to fix it up, do all this. The new person moves in, cares out what everybody else fixed up, buys new appliances, paints, buys new furniture. So it really is a big driver for the chemicals industry and us, but it is not there yet. I guess the positive, I think of it as, it's become a real issue for the current administration. You can see Trump talking about not allowing corporate investment in housing. You also see some discussion of portable mortgages, which is an interesting concept that's been in the U.K. for quite some time. So there's a lot of focus on it, but it really gets down to what's the resale prices and what's the interest rates.

Okay. I appreciate that. Larry, two last ones, I'll turn it over and I'll ask them together. One, can you remind us where you think the price cost on fiber will sort of anniversary right now, things are good. Is that a second half issue? Or should you be running relatively positively throughout the year? And then margins in polymers were a little bit weaker than we were expecting. I know gross margin wasn't down as much. EBITDA was down a bit more than we were expecting. What was driving that? And what are the implications going forward?

Yes, the answer to your question about fiber is yes. It will start to annualize in the latter part of the second half of the year. Regarding polymers, it is mainly a mix issue. We saw a slight decline, particularly in our smaller polymers and larger plastic drums, which typically have better margins, while volumes were somewhat up in the medium category. So, it was primarily a mix issue, not related to costs or pricing.

But George, just to elaborate on that. So polymer gross profit margins were slightly lower year-over-year in Q1, primarily driven by the mix and manufacturing costs, as Larry pointed out. Volumes were also lower in small plastics and large plastics, and they are among our higher-margin polymer products. Overall, that reduced contribution from those products had a short-term impact on margins. Lastly, manufacturing costs across our network were higher. We're actively addressing manufacturing costs, and we expect that to improve as the year progresses.

It seems like the EBITDA margin delta was worse than the gross margin delta. Anyway, I'll turn it over. If you have any thoughts on that, we take them otherwise, good luck in the quarter.

Yes. George, just back to the issue that we've talked about and why we moved to gross profit. It gets to be the allocation issue of overhead cost is what the driver on the EBITDA difference is.

And our next question will be coming from Mike Roxland of Truist Securities.

I wanted to ask about the volumes. They dropped about 5% in the first quarter. The EBITDA forecast suggests that volumes will remain flat or perhaps increase slightly over the year. What gives you confidence in the potential for volume improvement? Additionally, if volumes continue to be weak, meaning flat or declining slightly, what impact would that have on your EBITDA forecast for the year?

Yes. I'll hit the EBITDA guide for the year. I just repeat, we are extremely confident. It's why we go with the low-end guidance. There's various elements that go into that. But on the volume side, we had expected Q1 to be low in some products. It was a little lower. As I said earlier, we're seeing the pickup in the small plastic volumes going down. As Ole mentioned, and he'll add something here too, but we're very optimistic about our commercial team and the incentives that we put in place and the early things that we're seeing out of those efforts.

Yes. First, the bridge was never built on Q1 year-over-year performance. It reflects how we expect volumes to progress or normalize across the year. We've established that Q1 came in softer than last year, but nothing we saw changes our full-year view. Importantly, as our commercial teams, they remain extremely active. I mentioned we have done a lot of organizational changes in the company. We have transformed or are transforming our global commercial organization from farmers to hunters. We are changing or have been changing the incentive program for that. We are targeting CapEx where we see organic growth opportunities, and we do that in a very disciplined way where we are targeting short-term gains. We've already seen customer wins and share of wallet gains with existing customers, which again supports our confidence in volume progressing as the year unfolds.

That's very helpful. So basically, what it comes down to is volumes were weaker in 1Q, but given some of the commercial activities that you're seeing, you think those wins should creep up or should occur sometime in the back half that will allow you to achieve your volume guide for the year. Is that fair?

That's fair.

Perfect. Got it. And just one quick follow-up. Following up on George's question about the price cost spread in fiber, I thought that would have already been addressed in fiscal 2Q. If that's the case, what is the company doing to tackle that headwind as you move past it?

Yes. I mean, you saw the $40 a ton in URB was last May rolled in, in June and July, and the OCC was through the last part of the year. So it's that second half of our year with more of it coming in the last quarter just because of the way some of the contractual pass-throughs work. That's all it is, Michael.

Got it. Okay. And then one last question. Just you mentioned, I think, last quarter, deploying a very unique proprietary form of barrier technology. You said you guys are the only ones that have that. Wondering if you could provide any more color around the technology, what it does, the competitive advantage it gives you? And have you received any orders on that? We are using that technology?

Yes. It's called the SIOC technology. We have received orders. The first machine is fully operational in France. We have three more machines in production that will be deployed during this year, and that will be followed by further machines. So far, very good actually.

Yes. The financial impact for this year is not significant, Michael, but we are very optimistic about this technology and its impact, and we're ramping it up.

And our next question will be coming from Matt Roberts of Raymond James.

I'll start in fiber. I think you noted converting was down mid-single digits this quarter, which I believe is down from low single-digit decline seen last quarter. And on the operating rates, I believe you said last quarter was 90%, quarter before that 95% and now solid. So maybe where are operating rates trending now versus those prior two quarters? And does that support price that was previously taken? And in tubes and cores, you're understandably lapping some paperboard supply cuts that were in 2025. When do we lap those? When should we expect tube and cores and fiber more generally to return to growth?

Yes. So I mean, first of all, URB mills took about, I think, about 14,000 tons of economic downtime in Q1, but that was all due to converting softness. Converting saw similar mid-single digit declines. The largest driver is basically the paper industry, where we supply costs for SDS and CRB grades. We do expect fiber profitability to improve sequentially. There's a lot of activities in the pipeline.

That's helpful. And on the price cost, Larry, last quarter, you gave a bridge at the $30 million in price cost, I think $18 million of that was in the URB price and lower OCC. It sounds like there aren't any changes in expectations from OCC or URB price. But any other impacts or puts and takes from non-materials impacts, whether that be energy or freight?

No. I mean, there's a lot of things going on. I mean, obviously, Matt, I mean, take like we're doing a really great job on our cost takeouts. I mean, you've probably read about healthcare cost inflation across all industries in the U.S. So we're beating those inflation impacts and still delivering on what we have. But in terms of any differences relative to what we laid out in our Q4 guidance walk, there aren't any other than just getting down to, for example, we've now cut 10% of our headcount on the professional side. We're up to 220 headcount reductions. We continue to work that, and those are focused on our overall objective, but also overcoming inflationary challenges.

That's very helpful, Larry. And if I can get one last one in. Just on the repurchases. I think you said $130 million of the $150 million was exhausted during the quarter. Is that remaining $20 million, is that still outstanding utilized quarter-to-date? Or was it replaced by the $300 million? And on that $300 million, I know you committed now to that 2% annual buyback. Should we expect any more in 2026? Or is that more 2027, given you've already about doubled that target so far in '26?

Yes. I'll do the first part. So we've done $130 million, and we still have $20 million remaining. That will probably be concluded up to the summer here. The price of the B shares obviously helps that at the moment. And then what happens next, I'll leave Larry to...

Yes. I mean, the $300 million is incremental to the $150 million, Matt. And yes, then our go-forward intention is to do roughly 2%. But we think our stock is a very good buy, and we could end up deciding to talk to our Board about more than that, but we're committed to the 2% level going forward and obviously, subject to our Board's approval.

Our next question will be coming from Daniel Harriman of Sidoti & Company.

I wanted to follow up on the prior share repurchase question. You guys have been very clear in recent calls on your focus to deploy capital where you see the highest returns. So with the $130 million purchase in the recent quarter, I'm just curious how should we think about the cadence of the $300 million authorization versus potential acquisitions as you guys look to reach some of your longer-term EBITDA and free cash flow targets?

Yes, we will adjust our approach based on market conditions, our stock price, and developments in our M&A pipeline. We still have a strong pipeline of smaller deals, but our main priority is organic growth while remaining active in other areas. Our strategy will depend on the current market and our internal and external capital deployment needs.

Our primary focus is on organic growth. When we identify an M&A deal that aligns with our criteria and is a tuck-in, we will pursue it in a disciplined manner.

I would now like to turn the conference back to Ole Rosgaard for closing remarks.

Thank you very much, and thank you again for your interest and for your time and for your questions today. Greif has entered fiscal 2026 with strong momentum. Our 24% increase in EBITDA dollars, expanding EBITDA margins and meaningful cost reductions demonstrate our ability to drive returns in a muted demand environment. We have also reduced leverage to 1.2x while returning approximately $130 million to shareholders through disciplined share repurchases as discussed. This performance underscores the strength of our portfolio, the effectiveness of our operating model, and our ability to convert execution into results. Our strategy is working, and we are positioned to continue delivering durable earnings and cash flow improvements. Have a great rest of your day. Thank you.

This concludes today's program. Thank you for participating.