Greif (NYSE:GEF) reported fiscal third-quarter 2026 results that management said reflected structural cost reductions, improved commercial execution and resilient profitability despite geopolitical disruption and uneven industrial demand.
President and CEO Ole Rosgaard said adjusted EBITDA increased about 25% from a year earlier, while adjusted EBITDA margin expanded by more than 260 basis points. The company also reduced leverage to 1.1 times and reached its $90 million run-rate cost optimization milestone ahead of schedule.
Greif said it has focused on simplifying its organization, lowering its structural cost base, optimizing its manufacturing network and investing in growth opportunities. Rosgaard said the company remains committed to reaching $120 million in annualized cost optimization on a run-rate basis by the end of the next fiscal year.
Demand improved sequentially across segments
Management said the Middle East conflict continued to affect demand during the quarter, though demand improved sequentially across all four business segments.
- Polymer Solutions: Volumes rose 1.5%, led by intermediate bulk containers and large polymer containers. Small polymer volumes trailed a particularly strong prior-year comparison but remained among the company’s stronger product categories over the last two years.
- Metal Solutions: The segment improved sequentially, although broader industrial markets remained soft amid geopolitical uncertainty.
- Fiber Solutions: Performance improved from the second quarter. Excluding the prior-year closure of its Los Angeles mill, underlying converting demand was close to flat, supported by partitions and SuperCore products.
- Closures: Third-party demand increased by the mid-single digits and total volume rose by the high single digits as Greif won new business.
Rosgaard said the company has continued to target new customers and selected end markets, including flavor and fragrance and pharmaceutical markets. At the same time, he said fiber and steel operations remain pressured by chemical-market conditions and muted housing activity.
“While demand has improved globally, it is from a very low base,” Rosgaard said during the question-and-answer session, adding that Greif is emphasizing actions within its control rather than relying on a broad market recovery.
Margins and cash flow benefited from price-cost execution
Executive Vice President and CFO Larry Hilsheimer said sales were approximately in line with the prior year, while adjusted EBITDA growth was driven primarily by improved price-cost performance and structural cost optimization. Adjusted EBITDA margin also rose 110 basis points sequentially from the second quarter.
Adjusted earnings per share improved nearly 90% year over year, aided by higher EBITDA, lower interest costs and favorable quarterly taxes, according to Hilsheimer. Adjusted free cash flow was $58 million in the quarter.
Greif maintained higher-than-normal inventory levels during the quarter to support customer supply continuity amid Middle East-related volatility and supply-chain challenges. Hilsheimer said inventory carried a higher dollar cost because of increased raw-material indices, but the company expects inventory levels and costs to decline in the fourth quarter.
In Polymer Solutions, gross profit dollars and margin improved on volume, price-cost performance and structural savings. Hilsheimer said resin prices increased sharply during the third quarter, but the company’s teams raised prices rapidly in response. He said Greif does not expect a similar continued dramatic rise in resin prices, nor does it expect a decrease.
In Fiber Solutions, sales declined from the prior year because of the Los Angeles mill closure, while margins were affected by cost inflation. The April $60-per-ton uncoated recycled board price increase began flowing through the profit-and-loss statement, and management expects this to support fiber margins heading into the fourth quarter.
Greif also announced an additional $60-per-ton price increase in June, which it said has been fully implemented for its non-RISI customer base. Hilsheimer said the company believes RISI’s lack of recognition of the increase is inconsistent with what Greif sees as healthy customer demand and a higher year-over-year cost environment. The company’s mill operating rates were 96%, he added.
Outlook raised; capital returns expanded
Greif raised the low end of its fiscal 2026 adjusted EBITDA outlook, now projecting a range of $615 million to $635 million, compared with its prior low-end assumption of $610 million. The updated range represents expected year-over-year EBITDA growth of roughly 10% to 13%.
The company continues to expect approximately $20 million of Middle East-related effects, but said it has taken actions to offset at least a portion of that headwind. Greif forecast adjusted free cash flow conversion of about 50% and adjusted free cash flow of $305 million to $325 million for the year.
Management cited higher working capital and restructuring costs as changes from its previous guidance assumptions, partly offset by better cash taxes. Some effects from higher inventory costs in the third quarter are expected to persist through year-end.
Greif completed a $150 million share repurchase plan earlier in the year and raised its recurring dividend by 10.7%. The company also said it asked its board’s stock repurchase committee to approve an additional $150 million repurchase plan. Management expects leverage to remain below 2.0 times, with below 1.5 times viewed as more realistic in the near term.
Envaplast acquisition supports European polymer strategy
Greif also discussed its acquisition of Envaplast, a Spanish producer of small polymer containers. Management said the transaction gives Greif a foothold in Spain, where it previously had limited small-polymer operations, and expands its presence in agrochemical markets, which account for most of Envaplast’s business.
Hilsheimer said Envaplast met Greif’s acquisition criteria, including EBITDA margins above 18%, free cash flow conversion exceeding 50% and exposure to less-cyclical end markets. Rosgaard said Greif has a pipeline of similar bolt-on opportunities and expects to complete a number of comparable acquisitions annually, while avoiding transformative transactions.
About Greif (NYSE:GEF)
Greif, Inc is a global leader in industrial packaging products and services, with a history dating back to its founding in 1877. Headquartered in Cleveland, Ohio, the company has evolved from a regional barrel and drum manufacturer into a diversified packaging provider serving a wide range of end markets. Greif’s longstanding heritage in container solutions has positioned it as a trusted partner for customers seeking reliable, high-quality packaging options.
The company’s core business revolves around the design, manufacture and sale of industrial packaging products, including steel, plastic and fiber drums; intermediate bulk containers (IBCs); safety closures; rigid, flexible and reconditioned packaging; containerboard and protective packaging.
