Greif (GEF) Investor Update summary

Transaction overview and strategic rationale

• Announced agreement to divest the Containerboard business, including two mills, seven CorrChoice sheet feeder locations, and box plants, for $1.8 billion in cash to Packaging Corporation of America, with closing expected by fiscal year-end 2025, pending regulatory approvals.

• Proceeds will be used entirely for debt repayment, targeting a pro-forma leverage ratio below 2.0x, with further reduction anticipated from a planned timberland divestment.

• Divestiture aligns with a strategy to focus on higher-growth, higher-margin, and less cyclical markets such as food, beverage, pharma, and agrochemicals, while reducing exposure to low-growth sectors.

• Remaining portfolio will emphasize leadership in targeted product and geographic sectors, especially polymer-based solutions and URB business.

• Strategic rationale centers on sharpening the portfolio, enhancing capital utilization, and advancing growth priorities.

Financial implications and capital allocation

• Net proceeds after tax and fees expected to exceed $1.4 billion, with annual interest expense decreasing by $85 million and recurring maintenance CapEx by $25 million.

• Raised low-end 2025 guidance: Adjusted EBITDA now $725M (from $710M) and Adjusted Free Cash Flow $280M (from $245M), reflecting strong Q2 performance.

• 2027 financial targets reaffirmed: $1B+ Adjusted EBITDA and $500M Adjusted Free Cash Flow at 2.0–2.5x leverage.

• Balanced capital allocation framework: 20% to shareholder returns, 30% to dividends and share repurchases, and 50% to growth investments, with open authorization for share repurchases.

• Non-GAAP measures such as Adjusted EBITDA and Free Cash Flow are used for performance evaluation and investor comparison.

Growth targets and business optimization

• Reaffirmed commitment to $1 billion EBITDA and $500 million free cash flow by 2027, with a post-divestment starting EBITDA base of $542 million.

• Business optimization expected to deliver $100 million in savings, with ongoing efforts to streamline costs and margin expansion.

• Growth will be pursued through disciplined organic CapEx, strategic M&A, and reinvestment in high-ROIC opportunities within growth businesses.

• Focus on large and growing end markets, integration with existing portfolio, and accretive M&A opportunities.

• Commitment to an 18%+ Adjusted EBITDA margin and 50%+ Adjusted Free Cash Flow conversion over the long term.