Q2 2026 Graphic Packaging Holding Co Earnings Call Transcript
Key Points
- Adjusted EBITDA landed at the top of the guidance range with margins expanding sequentially to 11.3%, reflecting stronger cost discipline and operational improvements.
- Adjusted cash flow showed strong improvement, increasing $55 million year-over-year to $138 million in the second quarter.
- The company is on track to deliver approximately $85 million in cost savings for 2026, up from the previous expectation of $60 million.
- Pricing actions are expected to favorably impact 2026 full-year sales and EBITDA by approximately $60 million, with an annual run rate of $145 million.
- The company is expanding into the uncoated recycled paperboard (URB) market, leveraging its Waco facility with no incremental capital required, opening new growth opportunities.
- Incremental input cost inflation for the full year is now estimated at approximately $150 million, up significantly from the prior estimate of $55 million.
- Full-year adjusted EBITDA guidance has been revised to the low end of the range ($1.05 billion to $1.25 billion) due to higher-than-expected and prolonged inflation.
- Adjusted cash flow guidance for 2026 has been lowered to $600 million to $700 million, partly due to inventory optimization being pushed into 2027.
- Net leverage remains high at 4.7 times, with the company expecting to end the year at approximately 4.6 times, close to its covenant levels.
- The household and food service segments remain soft, with consumers delaying discretionary purchases and shifting to meals at home, offsetting strength in other areas.
Greetings.
Welcome to the Graphic Packaging Holding Company's second quarter 2026 conference call a listen.
A question-and-answer session will follow the formal presentation.
If anyone should require operator assistance during the conference, please press 0 on your telephone keypad.
Please note this conference is being recorded.
I will now turn the conference over to your host, Melanie Skegis, Vice President, Investor Relations.
You may begin.
Good morning.
Thank you for joining Graphic packaging second quarter 2026 earnings results conference call.
Today's presentation will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1,995.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections.
These risks and uncertainties include, but are not limited to
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