ATLANTA (News release) -- Graphic Packaging Holding Company, a global leader in sustainable consumer packaging, reported fourth quarter and full-year 2024 results.

Net Income for fourth quarter 2024 was $138 million, or $0.46 per share, based upon 302.7 million weighted average diluted shares. This compares to fourth quarter 2023 Net Income of $196 million, or $0.64 per share, based upon 308.5 million weighted average diluted shares. The fourth quarter of 2024 was impacted by a net charge from special items and amortization of purchased intangibles of $41 million and the fourth quarter of 2023 was impacted by a net charge from special items and amortization of purchased intangibles of $34 million. When adjusting for special items and amortization of purchased intangibles, Adjusted Net Income for the fourth quarter of 2024 was $179 million, or $0.59 per diluted share. This compares to fourth quarter 2023 Adjusted Net Income of $230 million, or $0.75 per diluted share.

For the full year 2024, Net Income was $658 million, or $2.16 per share, based upon 305.1 million weighted average diluted shares. This compares to 2023 Net Income of $723 million, or $2.34 per share, based upon 309.1 million weighted average diluted shares. Full-year 2024 and 2023 were impacted by a net charge from special items and amortization of purchased intangibles of $101 million and $176 million respectively. When adjusting for special items and amortization of purchased intangibles, Adjusted Net Income for full-year 2024 was $759 million, or $2.49 per diluted share. This compares to full-year 2023 Adjusted Net Income of $899 million, or $2.91 per diluted share.

Michael Doss, the Company's President and CEO said, "In 2024, we demonstrated the value of the Graphic Packaging business model, generating a level of consistency and profitability in line with other leading consumer packaging companies. We delivered strong and steady margins and significant new consumer packaging innovations. Our strategic investments in capabilities, innovation, and competitive advantage have positioned the company for long-term value creation. In 2025, we will build on that success, driving competitive advantage in recycled paperboard across all of North America, and expanding our innovation capabilities into new markets and new product categories around the world.

"The past two years have presented unusual volume challenges for the industry and our customers. Customer destocking is largely over, but consumers are stretched and searching for value in their everyday purchases. Across grocery, convenience, e-commerce and mass retail, Graphic Packaging is responding to our customers' evolving needs by creating the more circular, more functional, and more convenient packaging that consumers prefer. As the last of our major asset investments comes to completion in 2025, capital spending will decline significantly, and we will deploy excess cash to create substantial value for our stockholders. Consistent with our capital allocation priorities, today we are announcing a 10% increase in the quarterly dividend, to $0.11 per common share, effective for the first quarter 2025."

Operating Results

Net Sales

Net Sales decreased 7% or $154 million to $2,095 million in the fourth quarter of 2024, compared to $2,249 million in the prior year period. The decline was driven primarily by a $103 million negative impact from the divestiture of the Augusta, GA bleached paperboard manufacturing facility and bleached paperboard price and volume declines, and a $22 million net decline in sales from packaging operations, where price declines were partially offset by volume growth. Other acquisitions and divestitures (excluding Augusta) had a $14 million unfavorable impact on sales in the quarter, while foreign exchange had a $15 million unfavorable impact.

Net Sales decreased 7% or $621 million to $8,807 million for the full year 2024, compared to $9,428 million in the prior year. The decline was driven by a $389 million negative impact from the divestiture of the Augusta, GA bleached paperboard manufacturing facility and bleached paperboard price and volume declines, and a $235 million net decline in sales from packaging operations, where price and volume declined. Other acquisitions and divestitures (excluding Augusta) had a $27 million favorable impact on sales for the full year 2024, while foreign exchange had a $24 million unfavorable impact.

EBITDA

EBITDA for the fourth quarter of 2024 was $376 million, $68 million lower than the fourth quarter of 2023. After adjusting both periods for business combinations and other special items, Adjusted EBITDA was $404 million in the fourth quarter of 2024 versus $457 million in the fourth quarter of 2023. The $53 million decline in Adjusted EBITDA was driven primarily by the divestiture of the Augusta, GA bleached paperboard manufacturing facility and bleached paperboard price and volume declines ($39 million), and a decision to accelerate equipment maintenance ($5 million). Excluding those items, the impact of lower sales and modest inflation were offset by Net Performance. Other acquisitions and divestitures (excluding Augusta) had a $3 million unfavorable impact on Adjusted EBITDA in the quarter, while foreign exchange had a $5 million unfavorable impact. Fourth quarter 2024 Adjusted EBITDA Margin was 19.3% versus 20.3% in the prior year quarter.

EBITDA for the full year 2024 was $1,677 million, $118 million lower than 2023. After adjusting both periods for business combinations and other special items, Adjusted EBITDA was $1,682 million for the full year 2024 versus $1,876 million for the full year 2023. The $194 million decline in Adjusted EBITDA was driven primarily by the divestiture of the Augusta, GA bleached paperboard manufacturing facility and bleached paperboard price and volume declines ($164 million), and by previously disclosed weather and power and equipment maintenance issues ($30 million). Excluding those items, the impact of lower sales and modest inflation were offset by Net Performance. Other acquisitions and divestitures (excluding Augusta) had a $10 million favorable impact on Adjusted EBITDA for the full year 2024, while foreign exchange had a $9 million unfavorable impact. Full-year 2024 Adjusted EBITDA Margin was 19.1% versus 19.9% for the full year 2023.

Other Results

Total Debt (Long-Term, Short-Term and Current Portion) decreased $221 million during the fourth quarter of 2024 to $5,209 million compared to the third quarter of 2024. Total Net Debt (Total Debt less Cash and Cash Equivalents) decreased $252 million during the fourth quarter of 2024 to $5,052 million compared to the third quarter of 2024. The Company's fourth quarter 2024 Net Leverage Ratio was 3.0x compared to 3.1x at the end of the third quarter 2024.

Capital expenditures for the fourth quarter 2024 were $310 million, versus $212 million in the fourth quarter of 2023, primarily reflecting further acceleration of project spending. For the full year 2024, capital expenditures were $1,203 million, compared to $804 million in 2023.

The Company returned approximately $322 million to stockholders during the twelve months of 2024 through dividends and share repurchase activity. Regular dividends of approximately $122 million were paid during 2024.

2025 Annual Guidance and Commentary

The Company currently expects 2025 Net Sales, Adjusted EBITDA, and Adjusted EPS, excluding foreign exchange impact, of $8.7 billion to $8.9 billion, $1.68 billion to $1.78 billion, and $2.53 to $2.78, respectively. At current forward rates, the company estimates current foreign exchange headwinds to Net Sales, Adjusted EBITDA, and Adjusted EPS, of approximately $120 million, $20 million, and $0.05, respectively. Including the current foreign exchange headwind, expected 2025 Net Sales, Adjusted EBITDA, and Adjusted EPS are $8.6 billion to $8.8 billion, $1.66 billion to $1.76 billion, and $2.48 to $2.73, respectively.

Capital spending is currently expected to be in the range of $700 million as the Company's Waco, Texas recycled paperboard investment moves toward completion.

Innovation Sales Growth, Net Performance, and Non-GAAP Reconciliations

We define Innovation Sales Growth as incremental sales of a product that delivers a significant change in materials used, package functionality, or design to a new or existing customer. We define Net Performance as the impact of cost and productivity initiatives, production efficiencies and/or disruptions, and other operating impacts. A tabular reconciliation of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted EPS, Adjusted Net Cash Provided by Operating Activities, Adjusted Cash Flow, Net Debt and Net Leverage is attached to this release.