Greif, Inc.

Good morning and welcome to Greif's third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. If you would like to ask a question, you'll need to press star followed by the number one on your telephone keypad. If anyone should require assistance during the conference, please press star then zero. I would now like to turn the conference over to Matt Leahy, Vice President of Corporate Development and Investor Relations. Please go ahead.

Thanks, and good morning, everyone. Welcome to Greif's third quarter fiscal 2022 earnings conference call. This is Matt Leahy, Greif's Vice President of Corporate Development and Investor Relations, and I'm joined by Ole Rosgaard, Greif's President and Chief Executive Officer, and Larry Hilsheimer, Greif's Chief Financial Officer. We will take questions at the end of today's call. And in accordance with regulation fair disclosure, please ask questions regarding issues you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. Please limit yourself to one question and one follow-up before returning to the queue. Please turn to slide two. As a reminder, 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 reconciliation to the most directly comparable GAAP metrics can be found in the appendix of today's presentation. And now, I'll turn the presentation over to Ole on slide three. Ole Sperlinger Thanks, Matt, and good morning, everyone.

Following on our formal introduction of the Build to Last strategy at our June investor day, We are very pleased to present our third quarter results. We delivered both earnings and EBITDA growth against the historically strong Q3 21 comp, and during a time of economic uncertainty, record inflation, continued supply chain pressures, and the ongoing pandemic. We delivered third quarter adjusted EBITDA of 251 million and adjusted EPS of $2.35 million. But perhaps most impressively, we delivered a record single quarter adjusted free cash flow of 175.8 million. These results are indicative of the Build to Last strategy's powerful value creation when executed effectively by our exemplary global drive team. Our company has also achieved a milestone by ending the quarter below our target leverage ratio range. opening up significant opportunities to accelerate our capital allocation priorities and deploy capital to drive shareholder value and grow our business. Our confidence in the drive team's ability to produce continuous strong results had led us to raise our expected fiscal 2022 guidance, as Larry will discuss later. Please turn to slide four to begin discussion of our detailed results. Global industrial packaging delivered an excellent third quarter. We continue to see solid demand across our global present-based portfolio, with plastic drums down low single digits and IPCs up 10% per day versus a strong prior year comp. Global steel drum volume fell by mid-single digits per day versus the prior year on late quarter weakness in EMEA and APAC, driven by customer challenges around raw material availability, supply chain and labor disruptions, and inventory rebalancing, which impacted order patterns. Our North American end markets remain stable, and our LATAM business continues to outperform with strong volumes across the ag chem, citrus, and lubricant end markets. As a reminder, our GIP business benefits from a portfolio effect of mixed geographic product and end market exposures discussed at Investor Day. Adjusted EBITDA decreased year-over-year by approximately 29%. We are proud of our team's ability to largely offset multiple headwinds when viewed against the historically high performance of third quarter 2021. In addition to the absence of a 10 million contribution from FPS that benefited the previous year as well as a higher year-on-year incentive accruals, the team has also been excellent at taking steps to offset the previously discussed 100 million one-time full-year 2021 benefits related to last year's historic run up in steel prices. Much of the impact of that tailwind occurred during the second half last year. Our teams also faced the continued headwinds of non-raw material inflation, but were diligent in passing along costs ahead of the inflationary curve. Our global GIP team has exemplified relentless execution and discipline during these challenging times. Please turn to slide five. Paper packaging's third quarter sales rose by 131 million versus the prior year due to steady and solid volumes in all paperboard grades and higher average selling prices. Adjusted EBITDA rose by 42 million versus the prior year due to higher selling prices, partially offset by higher raw materials, notably at 10 million headwinds related to higher OCC costs, higher incentives, and the continued and substantial headwinds of transportation, labor, and energy inflation. Third quarter volumes in our core choice sheet feeder system were down 3.5% per day compared to the historically strong Q321. in line with industry box demand, but remain 10% above pre-pandemic levels. Third quarter Cuban core volumes were down 2.4% per day versus the prior year due to softness, mainly in film and textile end markets, being partially offset with strength in our other key end markets, as well as our growing adhesive business. As some may know, we had a fire in one of our production lines at our Riverville mill towards the end of July. Most importantly, we are happy to report that all of our colleagues are safe and unharmed from the event. Thanks to the dedicated efforts of those colleagues, the fire resulted in only 20 days downtime at one of our two lines at the mill. The team did an excellent job of bringing the line back to operation in a short timeline. The time focused on that incident led us to determine we should defer our planned 13 days of maintenance downtime into next year. As a result of that shift, the fire will result in a loss of net seven days of production during the fourth quarter, equivalent to approximately 9,000 tons. That is factored into our fourth quarter guidance. I will now turn it over to our CFO, Larry Gilsheimer, on page six.