Graphic Packaging Holding Co (GPK, Financial) released its Q3 2023 financial results on October 31, 2023. The company reported a decrease in net sales and net income compared to the same period last year. However, adjusted EBITDA and adjusted earnings per diluted share saw an increase.
Financial Performance
Net Sales for Q3 2023 were $2,349 million, a decrease of 4% compared to Q3 2022. The decrease was driven by $223 million of unfavorable volume/mix, partially offset by $92 million of positive pricing and $29 million of foreign exchange impact. Net Income for Q3 2023 was $170 million, a decrease of 12% compared to the same period last year.
Adjusted EBITDA and Earnings per Share
Adjusted EBITDA for Q3 2023 was $482 million, an increase of 9% compared to Q3 2022. This was positively impacted by $92 million in pricing, $32 million in commodity input cost deflation, $19 million in favorable net performance, and $5 million of foreign exchange impact. This was partially offset by $64 million in unfavorable volume/mix and $43 million in labor, benefits and other inflation. Earnings per Diluted Share for Q3 2023 were $0.55, a decrease of 11% compared to the same period last year. However, Adjusted Earnings per Diluted Share were $0.74, an increase of 10% compared to Q3 2022.
Company's Commentary
Michael Doss, the Company’s President and CEO, commented on the results, stating,
Despite the continuing modest impact to packaging volume caused by inventory normalization and some fluctuations in consumer purchasing behavior, we delivered Adjusted EBITDA growth and margin expansion in the quarter."
Outlook for 2023
The company updated its 2023 guidance to reflect current expectations and the acquisition of Bell Incorporated, which closed during the third quarter. Net Sales are expected to be $9.5 billion to $9.6 billion. Adjusted EBITDA is expected to be $1.875 billion to $1.925 billion. Adjusted Cash Flow is expected to be $600 million to $700 million. Net Leverage Ratio at year-end is expected to be 2.6x to 2.7x Adjusted EBITDA. Adjusted Earnings per Diluted Share (Excluding Amortization of Purchased Intangibles) is expected to be $2.85 to $3.00.
Financial Tables
The company's financial statements, including the Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets, and Condensed Consolidated Statements of Cash Flows, provide detailed information about the company's financial performance. For instance, the Condensed Consolidated Statements of Operations show that the company's net sales decreased by 4% to $2,349 million in the third quarter of 2023, compared to $2,451 million in the prior year period. The Condensed Consolidated Balance Sheets reveal that the company's total assets increased to $10,905 million as of September 30, 2023, compared to $10,328 million as of December 31, 2022. The Condensed Consolidated Statements of Cash Flows indicate that the company's net cash provided by operating activities was $702 million for the nine months ended September 30, 2023.
Explore the complete 8-K earnings release (here) from Graphic Packaging Holding Co for further details.
