Greif, Inc.

Good day and thank you for standing by. Welcome to the great first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Leahy. Please go ahead.

Thanks, and good morning, everyone. Welcome to Greif's first fiscal quarter 2023 earnings conference call. This is Matt Leahy, Greif's Vice President of Corporate Development and Investor Relations, and I am 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. 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'll make forward-looking statements involving plans, expectations, and beliefs related to future events. Actual results could differ materially from those discussed. Additionally, we'll 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. Thanks, Matt, and good morning, everyone.

During our first quarter, 2023, Greif took several important steps towards advancing our Build to Last strategy. We completed the acquisition of LEED Container in mid-December, and are rapidly integrating this new growth business into life. We proudly announced our new 2030 science-aligned sustainability targets, a roadmap for achieving our goals around climate, waste reduction and circularity. We divested one of our higher cost CRB mills and today announced that we will be reinvesting that capital into another growth platform with a significant majority ownership in Centurion Container, our IPC reconditioning joint venture. We are increasing our ownership from approximately 9% to 80%, with a path to full ownership in the next few years. I am proud of the progress made so far in 2023, and I look forward to building on this new foundation in the year to come. Now, onto our first quarter results. Our global businesses clearly felt the impact of several headwinds in the first quarter. In our fourth quarter call, we cautioned against a weaker start to the 2023 year, specifically highlighting the volume softness we were seeing, as well as the steel price cost headwinds in GIP and their impact to first quarter margins. Actual volume trends in both businesses came in below our low original expectations, and the net impact was a challenging first quarter result relative to fiscal 2022, though it was the second best first quarter in GRIFE's 145-year history. Also noting, Q1 fiscal 2022 included full quarter EBITDA contribution from the FPS business, which was subsequently sold. While the demand environment remains uncertain, our teams acted swiftly on cost-out actions, working to match production with demand, rationalizing and optimizing our footprint, and tightly managing working capital. We will continue to aggressively manage costs during this period of volume softness, and yet will remain agile enough to respond and support our customers when demand improves. I'm proud of our team's ability to adapt to the changing demand environments and our commitment to taking actions to right-size our costs while still focusing on growth and disciplined execution of our Build to Last strategy. Please turn to slide four. On Tuesday, we signed an acquisition agreement to increase our ownership stake in Centurion Container to 80%. subject to customary closing conditions and regulatory clearances. As I mentioned a few months ago, regarding our acquisition strategy, our most attractive targets are close to our core business of industrial packaging, add diversification benefits in product offerings or end markets, and our margin are creative. We also want to grow with businesses that have a strong sustainability component. Centurion Container meets all those criteria. And I'm even more excited about the future of our partnership than I was when Greif made its initial investment almost three years ago in April of 2020. The Centurion Partnership helps accelerate our growth in resin-based products with a sustainable offering of both new and reconditioned IVCs. Since inception in 2020, The joint venture has grown EBITDA by nearly eightfold through both organic and inorganic top line growth and a scalable business model with strong margins and exceptional cash flow conversion. I'm excited about the continued growth potential of this business and I look forward to formally welcoming the Centurion colleagues as part of Rife after we conclude the transaction. Let's now turn back to our quarterly results on slide five, please. As mentioned earlier, in our fiscal first quarter, our global industrial packaging business experienced dual headwinds in decelerating demands and temporary margin compression from rapid steel price deflation. Steel, plastic, and IPC volumes were each down low double digits year over year on a global basis. The North American market was weakest, largely due to lower demands within the chemical and coating end markets. Our land time region remained solid, essentially flat against the strong Q1 2022 on continuous strong demand from the ag chem and food markets. EMEA and APAC volumes were weak through most of the quarter, but we saw some isolated sequential improvements in order patterns in February that gives us some hope that demand may be on a path to recovery in Q2. In the face of these challenges, I commend our global GIP team for their decisive actions taken in managing costs and maintaining our price discipline. Our expectation is that the combined impact of our team's actions along with normalization in steel prices should result in sequential margin improvements in gip next quarter please turn to slide six paper packaging's first quarter sales declined by approximately 50 million in the quarter due to lower mill and converting volumes throughout the quarter despite a year-on-year pricing tailwind first quarter volumes in our core choice sheet feeder system and human core system were down low double digits per day compared to the very strong Q1 2022. Cuban core volumes suffered from particularly slow demand in the paper, film, core, and protective core end markets. In the quarter, Greif took approximately 94,000 tons of economic downtime across our mill system with approximately 40,000 tons taken in container boards. 35,000 tons in URB and the rest in CRB. As in our GIP business, our PPS team is responding quickly to the changes in demand, taking actions on costs across the network with shifts and labor cost reductions, temporary furloughs, and advancing our footprint consolidation plans. In both businesses, teams remain laser-focused on working capital management, and we expect to capitalize on incremental opportunities to improve margins and cash flow in the coming quarters. I will now turn it over to our CFO, Larry Hilsheimer, on slide 7 to discuss our Q1 financial review as well as our 2022 guidance. Larry?