On July 30, 2024, Graphic Packaging Holding Co (GPK, Financial) released its 8-K filing detailing its second quarter 2024 financial results. Graphic Packaging Holding Co is a holding company that manufactures and sells a variety of paper-based consumer packaging products through its subsidiaries. The company's reportable segments include Paperboard Manufacturing, Americas Paperboard Packaging, and Europe Paperboard Packaging, with the majority of revenue generated from its Americas Paperboard Packaging segment.
Quarterly Financial Performance
Graphic Packaging Holding Co reported net sales of $2,237 million for Q2 2024, a 6% decrease from $2,392 million in Q2 2023. Net income for the quarter was $190 million, or $0.62 per diluted share, compared to $150 million, or $0.49 per diluted share, in the same period last year. Adjusted earnings per diluted share were $0.60, exceeding the analyst estimate of $0.51.
Adjusted EBITDA for the quarter was $402 million, down from $453 million in Q2 2023, with an adjusted EBITDA margin of 18.0%, compared to 18.9% in the prior year. The decline in adjusted EBITDA was primarily driven by the divestiture of the Augusta, GA bleached paperboard manufacturing facility and related price and volume declines.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $2,237 million | $2,392 million |
| Net Income | $190 million | $150 million |
| Adjusted EBITDA | $402 million | $453 million |
| Adjusted EBITDA Margin | 18.0% | 18.9% |
| Earnings per Diluted Share | $0.62 | $0.49 |
| Adjusted Earnings per Diluted Share | $0.60 | $0.66 |
Operational Highlights and Challenges
During the quarter, Graphic Packaging Holding Co generated $51 million in innovation sales growth and completed the divestiture of its Augusta, Georgia bleached paperboard manufacturing facility. The company also repurchased approximately 2.4% of its common shares outstanding. However, the decrease in net sales was influenced by the divestiture and reduced open market sales participation, alongside a net decline in sales from packaging operations.
Michael Doss, the Company’s President and CEO, commented, “Second quarter played out largely as expected, with continued strength in Foodservice and Beverage results, and strong execution driving solid Adjusted EBITDA. Consumers are responding to higher prices by shifting their purchasing patterns, and our portfolio, designed to move with the consumer, is doing just that.”
Balance Sheet and Cash Flow
Graphic Packaging Holding Co reported a decrease in total debt by $250 million to $5,285 million and net debt to $5,160 million compared to the prior year second quarter. The company's net leverage ratio improved to 2.9x from 3.0x in Q2 2023. Capital expenditures for the quarter were $249 million, reflecting an acceleration in equipment purchases for the Waco, Texas recycled paperboard manufacturing facility.
Annual Guidance and Future Outlook
The company reiterated its 2024 financial guidance, projecting adjusted EBITDA between $1.73 billion and $1.83 billion and adjusted earnings per diluted share between $2.65 and $2.85. The focus remains on delivering sustainable packaging solutions and driving innovation sales growth.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Graphic Packaging Holding Co for further details.
