Graphic Packaging reports sales growth in Q2

Graphic Packaging Holding Co., an Atlanta-based packaging producer, has reported its 2022 second-quarter financial results, noting a 3 percent increase in net organic sales due to what the company says is a "global demand for sustainably supported, innovative consumer packaging solutions."

The company reports net sales were $2,358 million compared with $1,737 in the second quarter of 2021 and net income was $66 million compared with $38 million in the same period last year.

"Our growing pipeline of innovative, fiber-based consumer packaging solutions is meeting demand for more sustainable packaging and driving organic growth in our business," Graphic Packaging President and CEO Michael Doss says, noting the 3-percent growth in net organic sales matches the company's first quarter growth rate and exceeds its targeted range.

"This growth is indicative of the ongoing transition of our customers to more recyclable and circular fiber-based packaging solutions," he adds. "Our integrated business model and global scale have been essential to procuring raw materials in today's challenging supply chain environment and ensuring supply to our customers."

Doss says Graphic Packaging is on track to deliver its Vision 2025 goals by meeting or exceeding this year's milestones. Vision 2025 goals include reducing greenhouse gas emissions, nonrenewable energy use and mill water effluent, improving recyclability, global facilities being compliant with a certification standard, waste diversion and increasing industry recovery of paper and paperboard in the U.S.

"We continue to execute multiple pricing and productivity initiatives focused on improving profit margins and capturing returns on strategic investments," Doss says. "As committed, we are utilizing cash flow to reduce debt and continue to expect year-end leverage to be in the 3.0 to 3.5x range."

Operating results

Net sales. The company's net sales increased 36 percent to $2,358 million in the second quarter of 2022 compared with $1,737 million in the same period last year, driven by $278 million of pricing and $379 million of improved volume/mix related to organic growth from conversions to fiber-based packaging solutions and acquisitions.

EBITDA. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2022 were $294 million compared with $214 million in the same period last year. Adjusted EBITDA was $396 million compared with $248 million last year, and when comparing with the the second quarter of 2021, adjusted EBITDA in 202 was positively impacted by $278 million of price, $81 million of volume/mix and $16 million in net productivity. Adjusted EBITDA also was negatively impacted by $185 million of commodity input cost inflation, $25 million of other inflation and $17 million of unfavorable foreign exchange.