Graphic Packaging Holding Co.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 4 August 2026: press release. Guidance figures: 2 lowered, 2 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Adjusted EBITDA fell 26 percent: Adjusted EBITDA was $247 million, against $336 million a year earlier. Reported EBITDA was $240 million, down 26 percent from $323 million. Source
• Adjusted EPS of $0.14: Adjusted Net Income was $41 million, or $0.14 per diluted share, against $128 million, or $0.42, in second quarter 2025. Source
• Inflation was largest drag on EBITDA: Commodity input and operating cost inflation reduced Adjusted EBITDA by $60 million, the largest item in the $89 million decline. Lower price accounted for $27 million. Source
• Margin up 50 basis points sequentially: Adjusted EBITDA margin was 11.3 percent in second quarter 2026, against 15.3 percent a year earlier. Management said margin rose 50 basis points from the first quarter. Source
• Savings offset part of inflation: Management expects full-year 2026 inflation of $150 million, against approximately $85 million of in-year savings from structural cost actions. Source
• Net leverage rose to 4.7x: Net Debt was $5,483 million. The Net Leverage Ratio was 4.7x, against 3.8x at year-end 2025. Source
• Lebanon, Tennessee closure planned: Management announced plans to close the Lebanon, Tennessee facility and consolidate its volumes across fewer facilities. No date is given. Source
• Quarter EBITDA at top of range: The CEO said Adjusted EBITDA was at the top of the guidance range despite inflation above expectations. Source

“We continued to execute against our near-term strategic priorities and delivered solid second quarter performance, with Adjusted EBITDA at the top of our guidance range despite greater than anticipated inflation”

Robbert Rietbroek, President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: Adjusted EPS guidance range lowered to $0.65 to $0.90 from $0.75 to $1.15, reflecting higher interest expense. Source
• Guidance lowered: Adjusted Cash Flow guidance moved to $600 million to $700 million from $700 million to $800 million. Source
• Guidance kept: Net Sales range of $8.4 billion to $8.6 billion kept; management now expects the high end of the range. Source
• Guidance kept: Adjusted EBITDA range of $1.05 billion to $1.25 billion kept; management now expects the low end of the range. Source
• New guidance: Management gave a figure for in-year savings from structural cost actions, approximately $85 million. Source
• New: Croatia facility divestiture completed; the May release described the divestiture as pending. Source
• New: Plan announced to close the Lebanon, Tennessee facility and consolidate volumes into fewer facilities. Source
• New: Employees notified of intention to evaluate the potential closure of the Winsford, UK site. Source
• New: Additional productivity, cost reduction and pricing initiatives implemented in response to incremental inflation. Source

Second quarter results and drivers

• Net sales slightly lower year on year: Net Sales were $2,188 million, against $2,204 million a year earlier, a decline of 1 percent. Source
• Net income and EPS declined: Net Income was $24 million, or $0.08 per diluted share, against $104 million, or $0.34, a year earlier. Non-recurring and special items plus amortization totaled $17 million. Source
• Adjusted EBITDA fell 26 percent: Adjusted EBITDA was $247 million, against $336 million a year earlier. Reported EBITDA was $240 million, down 26 percent from $323 million. Source
• Adjusted EPS of $0.14: Adjusted Net Income was $41 million, or $0.14 per diluted share, against $128 million, or $0.42, in second quarter 2025. Source

Costs, inflation and margin

• Inflation was largest drag on EBITDA: Commodity input and operating cost inflation reduced Adjusted EBITDA by $60 million, the largest item in the $89 million decline. Lower price accounted for $27 million. Source
• Net Performance added $9 million: Net Performance, which covers cost and productivity initiatives and production efficiencies, was positive $9 million and partly offset the decline. Source
• Margin up 50 basis points sequentially: Adjusted EBITDA margin was 11.3 percent in second quarter 2026, against 15.3 percent a year earlier. Management said margin rose 50 basis points from the first quarter. Source
• Savings offset part of inflation: Management expects full-year 2026 inflation of $150 million, against approximately $85 million of in-year savings from structural cost actions. Source

“Our business demonstrated resilience, with both sales and volumes increasing in the first half of 2026 compared with the same period in 2025.”

Robbert Rietbroek, President and Chief Executive Officer

Price, volume and innovation

• Price and volume bridge for quarter: Price was down $27 million and volume/mix was down $2 million, against a $13 million favorable foreign exchange and other impact. Source
• Innovation sales added $40 million: Innovation Sales Growth in the quarter was $40 million. The company defines it as incremental sales of products with a significant change in materials, functionality or design. Source
• First-half sales and volumes rose: Management said both sales and volumes increased in the first half of 2026 compared with the same period in 2025. Source

Debt, leverage and cash flow

• Total debt below first-quarter level: Total debt was $5,688 million at June 30, against $5,772 million in the first quarter and $5,592 million at year-end 2025. Source
• Net leverage rose to 4.7x: Net Debt was $5,483 million. The Net Leverage Ratio was 4.7x, against 3.8x at year-end 2025. Source
• Higher interest expense cited: Management linked the lower Adjusted EPS range to higher interest expense; interest expense, net was $68 million in the quarter, against $53 million. Source
• Six-month Adjusted Cash Flow negative: Adjusted Cash Flow for the first six months was negative $45 million, against negative $359 million a year earlier, after capital spending of $223 million. Source

“The combination of these recent actions and our disciplined execution against strategic priorities positions us to drive continued sequential profitability and margin improvement in the second half of 2026 and provides positive momentum into next year.”

Robbert Rietbroek, President and Chief Executive Officer

Capital spending and shareholder returns

• Quarterly capital spending reduced: Capital expenditures were $83 million in the quarter, against $228 million in the same quarter last year. Source
• Dividends paid through six months: The company returned approximately $65 million to stockholders through regular dividends in the first six months of 2026. Source
• No buybacks, debt retired instead: The cash flow statement shows no common stock repurchase in the first six months of 2026, against $110 million a year earlier; $400 million of long-term debt was retired. Source

Footprint and cost actions

• Croatia divestiture completed: The company completed the divestiture of its Croatia facility, which the May release had described as pending. Source
• Lebanon, Tennessee closure planned: Management announced plans to close the Lebanon, Tennessee facility and consolidate its volumes across fewer facilities. No date is given. Source
• Winsford, UK site under evaluation: Employees were notified of management's intention to evaluate the potential closure of the Winsford, UK site. Source

Management view and second-half plan

• Quarter EBITDA at top of range: The CEO said Adjusted EBITDA was at the top of the guidance range despite inflation above expectations. Source
• Added actions respond to inflation: The CEO said the company implemented additional productivity, cost reduction and pricing initiatives in response to incremental inflation. Source
• Second-half margin gains expected: The CEO said recent actions and disciplined execution position the company for sequential profitability and margin improvement in the second half of 2026. Source

Coming up, as management said on 4 August 2026

• Second-half margin improvement expected: Management said recent actions and execution position the company for sequential profitability and margin gains in the second half of 2026. Source

Figures management reported

Risks management discussed

• External: Management said inflation is expected to place Adjusted EBITDA at the low end of guidance, due to the heightened inflationary environment. Source
• Financial: The Adjusted EPS range was lowered to reflect higher interest expense, which the company identified as a driver of the change. Source
• Financial: Net leverage was 4.7x at June 30, 2026, up from 3.8x at year-end 2025. Source
• Demand: Price fell $27 million in the quarter and volume/mix fell $2 million, which the company cited as drivers of the Net Sales decline. Source
• External: Volume/mix fell $8 million and foreign exchange was an unfavorable $3 million impact on Adjusted EBITDA in the quarter. Source

Earlier plans management reported on

• On track: Management said it is on track to achieve full-year 2026 Net Sales at the high end of the guidance range. Source
• Not stated: The May release reaffirmed a 2026 Adjusted Cash Flow range of $700 million to $800 million; the August release now gives $600 million to $700 million.
• Not stated: The May release described delivery of the $60 million cost reduction commitment; the August release does not restate its status.

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.