Graphic Packaging Holding Company

Net sales were $2.2 billion, down 1% year over year. Adjusted EBITDA was $247 million, down $89 million from the prior-year quarter, and adjusted EPS was $0.14; adjusted EBITDA margin was 11.3%, up 50 basis points sequentially. Adjusted cash flow was $138 million, up $55 million year over year. For full year 2026, management now expects adjusted EBITDA at the low end of the $1.05 billion to $1.25 billion range, adjusted cash flow of $600 million to $700 million, adjusted EPS of $0.65 to $0.90, capex below $450 million, interest expense of about $275 million, and net leverage of about 4.6x at year-end. Third-quarter adjusted EBITDA is guided to $280 million to $300 million.

Robbert Rietbroek said the quarter showed disciplined execution and the resilience of the business model despite a challenged consumer backdrop. He emphasized strengths in the company’s diversified portfolio, customer relationships, and packaging innovation, while noting that the company is sharpening its strategy around the highest-growth and highest-return markets. His tone was constructive and confident, centered on cost discipline, footprint optimization, customer service, and a “strategic reset” aimed at long-term value creation.

Chuck Lischer said Q2 EBITDA was pressured mainly by $60 million of commodity input and operating cost inflation, which was $10 million more than expected, along with $35 million of price/volume/mix pressure. He highlighted about $25 million of savings from cost reduction and productivity actions and $6 million of lower mill maintenance outage expenses, helping EBITDA margin reach 11.3%. He also noted $100 million of net debt reduction in the quarter, ending at $5.5 billion of net debt and 4.7x leverage, and reiterated that the full-year tax rate should be about 25%.

Analysts focused on URB ramp potential, inflation assumptions, pricing actions, inventory timing, leverage covenant room, and the second-half bridge. Management said Waco already has first URB orders in the “couple of thousand tons,” sees a longer-term opportunity of 100,000 tons or more, and expects only a modest amount of URB sales in 2026. On inflation, Chuck said they now expect costs to stay elevated in the second half, and on the leverage covenant he clarified that the amendment keeps the covenant at 5x until the end of Q2 2027, with natural headroom because the printed ratio is usually 25 to 30 bps higher than covenant leverage.