"In the third quarter, we saw our packaging volumes turn positive, after Europe's return to growth in the second quarter." – Mike Doss, President and CEO, Graphic Packaging Holding Company.
Oct. 29, 2024 - Graphic Packaging Holding Company today reported third quarter 2024 results.
Net Income was $165 million, or $0.55 per share, based upon 302.6 million weighted average diluted shares. This compares to third quarter 2023 Net Income of $170 million, or $0.55 per share, based upon 309.2 million weighted average diluted shares.
The third quarter of 2024 was impacted by a net charge from special items and amortization of purchased intangibles of $29 million and the third quarter of 2023 was impacted by a net charge from special items and amortization of purchased intangibles of $59 million. When adjusting for special items and amortization of purchased intangibles, Adjusted Net Income for the third quarter of 2024 was $194 million, or $0.64 per diluted share. This compares to third quarter 2023 Adjusted Net Income of $229 million, or $0.74 per diluted share.
Michael Doss, the Company's President and CEO said, "In the third quarter, we saw our packaging volumes turn positive, after Europe's return to growth in the second quarter. Third quarter also saw the launch of new paperboard cup and container innovations for major Foodservice customers and the first-ever round Boardio™ paperboard canister for a leading collagen-protein brand. Our innovations are delivering real value for our customers and for consumers.
"Despite volume challenges brought on first by customer and retailer destocking and later by the pressure consumers are feeling from price inflation, we are delivering margin strength and consistency in line with the best global consumer packaging companies. That speaks to the value of the portfolio we have created, the success of our sustainable packaging innovations, and our team's commitment to outstanding execution. As volumes continue to improve and our Waco investment moves toward completion, cash generation will rise significantly, and we will deploy that cash to create substantial additional value for shareholders."
Net Sales decreased 6% or $133 million to $2,216 million in the third quarter of 2024, compared to $2,349 million in the prior year period. The decline was driven by a $109 million impact from the divestiture of the Augusta, GA bleached paperboard manufacturing facility and reduced open market sales participation, and a $35 million net decline in sales from packaging operations, where price declines were partially offset by volume growth. Other acquisitions and divestitures (excluding Augusta) had a $9 million favorable impact on sales in the quarter, while foreign exchange had a $2 million favorable impact.
EBITDA for the third quarter of 2024 was $417 million, $31 million lower than the third quarter of 2023. After adjusting both periods for business combinations and other special items, Adjusted EBITDA was $433 million in the third quarter of 2024 versus $482 million in the third quarter of 2023. The $49 million decline in Adjusted EBITDA was driven primarily by the divestiture of the Augusta, Georgia, bleached paperboard manufacturing facility and related bleached paperboard price and volume declines of $34 million, and by previously disclosed weather and power issues of $25 million. Excluding those items, the impact of lower sales and modest inflation were offset by Net Performance. Other acquisitions and divestitures (excluding Augusta) had a $3 million favorable impact on EBITDA in the quarter, while foreign exchange had a $5 million favorable impact. Adjusted EBITDA Margin including the impact of the divestiture and reduced open market paperboard participation was 19.5% versus 20.5% in the prior year quarter.
Total Debt decreased $178 million to $5,430 million, and Net Debt decreased $158 million to $5,304 million, compared to the prior year third quarter. The Company's third quarter 2024 Net Leverage Ratio was 3.1x compared to 3.0x in the prior year quarter.
Capital expenditures in the quarter were $313 million, versus $207 million in the third quarter of 2023, primarily reflecting an acceleration in the timing of equipment purchases for the Waco, Texas recycled paperboard manufacturing facility.
The Company returned approximately $291 million to stockholders during the first nine months of 2024 through dividends and share repurchase activity. Regular dividends of approximately $30 million were paid in the third quarter.
Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia, designs and produces consumer packaging made primarily from renewable or recycled materials. Graphic Packaging operates a global network of design and manufacturing facilities serving the world's most widely recognized brands in food, beverage, foodservice, household, and other consumer products.
SOURCE: Graphic Packaging Holding Company
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