Graphic Packaging CEO: ‘External environment remains challenged near term’

In his first earnings call since joining the company, Graphic Packaging President and CEO Robbert Rietbroek portrayed a challenging market that, while is expected to improve, will likely create headwinds in the early months of 2026.

The Atlanta-based packaging company reported fourth-quarter and full-year 2025 earnings Feb. 3, posting decreases in net sales, income and earnings before interest, taxes, depreciation and amortization (EBITDA).

While the company’s fourth-quarter net sales essentially were flat, its fourth-quarter net income was $71 million, down from $138 million in the same period last year, and its EBITDA decreased 19 percent to $305 million compared with $376 million in the fourth quarter of 2024.

Graphic Packaging’s net sales for the full year were $8.6 billion compared with $8.8 billion last year, net income was $444 million compared with $658 million while EBITDA decreased 20 percent to $1.3 billion compared with $1.7 billion.

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“The external environment remains challenged near term,” Rietbroek said during an earnings call Feb. 3.

“Overcapacity in commodity bleached paperboard markets is putting pressure on finished packaging and demand trends for consumer staples remain uneven as a result of affordability and macroeconomic uncertainty. While we expect these trends to improve, we also acknowledge that consumer purchasing patterns and the dynamics between brands and private label are evolving. We are not simply waiting for markets to recover. We are focused on what we can control and where our resources have the best opportunities to create lasting value.”

Rietbroek also noted that the fourth quarter brought higher-than-expected inventory levels thanks to a combination of soft market demand and inventory building ahead of the startup of the company’s coated recycled paperboard mill in Waco, Texas, which required higher costs to complete than originally planned.

The company expects the total capital cost of the Waco project to total $1.67 billion.

“We need to significantly reduce inventory and ensure that every spending decision brings an appropriate return,” Rietbroek said.

“While the Waco facility is large, its net impact on market capacity is quite small after we closed two of our older higher-cost facilities and other producers closed capacity. Its impact on our cost of production, however, is substantial and creates durable long-term competitive advantage. While the market has been weak, a return to more normal consumer demand should put us in a strong position to restore volume growth and help ensure that we can leverage our production cost advantage to drive the best possible returns from our world-class Waco and Kalamazoo [Michigan] assets.”

Looking ahead, Rietbroek is prioritizing optimizing Graphic Packaging’s cost structure to better align with the current operating environment while protecting operational capabilities and market positions.

The company expects to reduce capital spending to about $450 million in 2026, with Rietbroek saying Graphic Packaging is raising the bar for new capital spending project approvals. It also plans to work toward reducing its inventory balance to 15 percent to 16 percent compared with an elevated 20 percent at the end of 2025.

“My priority here is to accelerate the speed of commercialization and ensure that our resources are focused on the most promising opportunities,” Rietbroek said. “With a broad portfolio that spans every grocery aisle, both with brands and private label as well as foodservice, prioritizing where we put our resources is essential to driving real value creation. We aim to be the first choice for our customers and believe that with our innovation, product quality and exceptional customer service, we have the right to win in a more normalized macro environment”

The entire Graphic Packaging fourth-quarter and full-year 2025 financial results can be found here.