Greif Reports Fourth Quarter and Fiscal 2021 Results

DELAWARE, Ohio, Dec. 8, 2021 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B), a world leader in industrial packaging products and services, today announced fourth quarter and fiscal 2021 results.

Fourth Quarter Results Include (all results compared to the fourth quarter 2020 unless otherwise noted)⁽¹⁾:

• Net income of $104.5 million or $1.74 per diluted Class A share compared to net income of $44.4 million or $0.74 per diluted Class A share. Net income, excluding the impact of adjustments⁽²⁾, of $115.4 million or $1.93 per diluted Class A share compared to net income, excluding the impact of adjustments, of $46.4 million or $0.78 per diluted Class A share. Adjusted EBITDA⁽³⁾ increased by $56.8 million to $211.3 million.
• Net cash provided by operating activities decreased by $63.1 million to $137.3 million. Adjusted free cash flow⁽⁴⁾ decreased by $79.1 million to $94.8 million primarily as a result of inflationary raw material costs.
• Total debt decreased by $261.4 million to $2,225.6 million. Net debt⁽⁵⁾ decreased by $280.1 million to $2,101.0 million and decreased by $66.8 million sequentially from the third quarter of 2021. The Company's leverage ratio⁽⁶⁾ decreased to 2.49x compared to 3.66x, within our targeted leverage ratio range of 2.0x - 2.5x.

Fiscal Year Results Include (all results compared to the fiscal year 2020 unless otherwise noted):

• Net income of $390.7 million or $6.54 per diluted Class A share compared to net income of $108.8 million or $1.83 per diluted Class A share. Net income, excluding the impact of adjustments, of $334.5 million or $5.60 per diluted Class A share compared to net income, excluding the impact of adjustments, of $190.9 million or $3.22 per diluted Class A share. Adjusted EBITDA increased by $121.6 million to $764.2 million.
• Net cash provided by operating activities decreased by $58.7 million to $396.0 million. Adjusted free cash flow decreased by $72.1 million to $274.1 million.
• The Company paid $105.8 million in cash dividends to stockholders in fiscal 2021.

Announcement:

• Named to Newsweek's Most Loved Workplaces list for 2021, ranking number 59 among the top 100 companies recognized for colleague happiness and satisfaction at work.

Pete Watson, Greif's President and Chief Executive Officer, commented:

"The global Greif team delivered exceptional results in fiscal 2021 and overcame significant external challenges to deliver record net sales and profits for the full fiscal year," said Pete Watson, Greif's President and Chief Executive Officer. "In addition, we advanced our financial priorities, increasing our dividend and reaching our targeted leverage ratio range, while making notable progress on our ESG journey. Looking ahead, we remain well positioned to provide differentiated packaging solutions that generate value for our customers and shareholders."

Customer Service

The Company's consolidated CSI⁽⁷⁾ score was 93.1 during the fourth quarter 2021 and was 93.2 on a trailing four quarter basis. Our long term objective is for each business segment to achieve a CSI score of 95.0 or greater.

CSI for the Global Industrial Packaging and Paper Packaging & Services segment were both approximately flat to the prior year quarter at 94.2 and 91.8, respectively.

In addition we completed our eleventh NPS⁽⁸⁾ survey and achieved a score of 60.0 which represents a 7.0 point decline from our wave ten results.  Detailed analysis of customer comments from wave eleven indicate the decline was largely due to poor communication about late customer deliveries caused by factors beyond our control within the supply chain.  The Company is currently taking focused actions to enhance communications to better assist customers with order delivery planning.

Segment Results (all results compared to the fourth quarter of 2020 unless otherwise noted)

Net sales are impacted mainly by the volume of primary products⁽⁹⁾ sold, selling prices, product mix and the impact of changes in foreign currencies against the U.S. Dollar. The table below shows the percentage impact of each of these items on net sales for our primary products for the fourth quarter of 2021 as compared to the prior year quarter for the business segments with manufacturing operations.

Global Industrial Packaging

Net sales increased by $299.3 million to $951.6 million. Net sales excluding foreign currency translation increased by $292.0 million due primarily due to higher volumes and higher average sale prices.

Gross profit increased by $53.5 million to $184.3 million. The change in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material, manufacturing and transportation costs.

Operating profit increased by $38.9 million to $97.8 million. Adjusted EBITDA increased by $47.3 million to $121.4 million primarily due to the same factors that impacted gross profit.

Paper Packaging & Services

Net sales increased by $119.4 million to $621.7 million primarily due to higher volumes and higher published containerboard and boxboard prices.

Gross profit increased by $11.0 million to $109.8 million. The change in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material, manufacturing and transportation costs.

Operating profit increased by $11.2 million to $41.9 million. Adjusted EBITDA increased by $10.3 million to $87.7 million primarily due to  the same factors that impacted gross profit.

Land Management

Net sales decreased by $1.8 million to $4.9 million due primarily to reduced timber available for sale as a result of acreage sold in the second quarter.

Operating profit decreased by $0.4 million to $1.8 million. Adjusted EBITDA decreased by $0.8 million to $2.2 million.

Tax Summary

During the fourth quarter, the Company recorded an income tax rate of 10.7 percent and a tax rate excluding the impact of adjustments of 11.3 percent. As previously disclosed, the application of FIN 18 often causes fluctuations in our quarterly effective tax rates. For the full year, the Company recorded an income tax rate of 14.5 percent and a tax rate excluding the impact of adjustments of 18.1 percent. 

Dividend Summary

On December 7, 2021, the Board of Directors declared quarterly cash dividends of $0.46 per share of Class A Common Stock and $0.68 per share of Class B Common Stock. Dividends are payable on January 1, 2022, to stockholders of record at the close of business on December 17, 2021.

Company Outlook

Note: Fiscal 2022 Class A earnings per share guidance on a GAAP basis is not provided in this release due to the potential for one or more of the following, the timing and magnitude of which we are unable to reliably forecast: gains or losses on the disposal of businesses, timberland or properties, plants and equipment, net; non-cash asset impairment charges due to unanticipated changes in the business; restructuring-related activities; non-cash pension settlement (income) charges; or acquisition and integration related costs, and the income tax effects of these items and other income tax-related events. No reconciliation of the fiscal 2022 Class A earnings per share before adjustments guidance, a non-GAAP financial measure which excludes restructuring charges, acquisition and integration related costs, non-cash asset impairment charges, non-cash pension settlement charges, (gain) loss on the disposal of properties, plants, equipment and businesses, net and timberland gains, net, is included in this release because, due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible, we are unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.  A reconciliation of 2022 adjusted free cash flow guidance to forecasted net cash provided by operating activities, the most directly comparable GAAP financial measure, is included in this release.

Conference Call

The Company will host a conference call to discuss the fourth quarter of 2021 results on December 9, 2021, at 8:30 a.m. Eastern Time (ET). Participants may access the call using the following online registration link: https://conferencingportals.com/event/BDwosPDa. Registrants will receive a confirmation email containing dial in details and a unique conference call code for entry. Phone lines will open at 8:00 a.m. ET on December 9, 2021. A digital replay of the conference call will be available two hours following the call on the company's web site at http://investor.greif.com. To access the recording, guests can call (800) 770-2030 or (647) 362-9199 and use conference ID 32605.

About Greif

Greif is a global leader in industrial packaging products and services and is pursuing its vision: in industrial packaging, be the best performing customer service company in the world. The Company produces steel, plastic and fibre drums, intermediate bulk containers, reconditioned containers, flexible products, containerboard, uncoated recycled paperboard, coated recycled paperboard, tubes and cores and a diverse mix of specialty products. The Company also manufactures packaging accessories and provides filling, packaging and other services for a wide range of industries. In addition, Greif manages timber properties in the southeastern United States. The Company is strategically positioned in 40 countries to serve global as well as regional customers. Additional information is on the Company's website at www.greif.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "may," "will," "expect," "intend," "estimate," "anticipate," "aspiration," "objective," "project," "believe," "continue," "on track" or "target" or the negative thereof and similar expressions, among others, identify forward-looking statements. All forward-looking statements are based on assumptions, expectations and other information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause the Company's actual results to differ materially from those forecasted, projected or anticipated, whether expressed or implied. The most significant of these risks and uncertainties are described in Part I of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The Company undertakes no obligation to update or revise any forward-looking statements.

Although the Company believes that the expectations reflected in forward-looking statements have a reasonable basis, the Company can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially from those forecasted, projected or anticipated, whether expressed in or implied by the statements. Such risks and uncertainties that might cause a difference include, but are not limited to, the following: (i) historically, our business has been sensitive to changes in general economic or business conditions, (ii) our global operations subject us to political risks, instability and currency exchange that could adversely affect our results of operations, (iii) the COVID-19 pandemic could have a material adverse effect on our business, financial condition, results of operations and cash flows, (iv) the current and future challenging global economy and disruption and volatility of the financial and credit markets may adversely affect our business, (v) the continuing consolidation of our customer base and suppliers may intensify pricing pressure, (vi) we operate in highly competitive industries, (vii) our business is sensitive to changes in industry demands and customer preferences, (viii) raw material, energy and transportation price fluctuations and shortages may adversely impact our manufacturing operations and costs, (ix) the frequency and volume of our timber and timberland sales will impact our financial performance, (x) we may not successfully implement our business strategies, including achieving our growth objectives, (xi) we may encounter difficulties or liabilities arising from acquisitions or divestitures, (xii) we may incur additional restructuring costs and there is no guarantee that our efforts to reduce costs will be successful, (xiii) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xiv) certain of the agreements that govern our joint ventures provide our partners with put or call options, (xv) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xvi) our business may be adversely impacted by work stoppages and other labor relations matters, (xvii) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage and general insurance premium and deductible increases, (xiii) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xix) a security breach of customer, employee, supplier or Company information and data privacy risks and costs of compliance with new regulations may have a material adverse effect on our business, financial condition, results of operations and cash flows, (xx) changes in U.S. generally accepted accounting principles (GAAP) and SEC rules and regulations concerning the maintenance of effective internal controls could materially impact our reported financial results, (xxi) we could be subject to changes to our tax rates, the adoption of new U.S. or foreign tax legislation or exposure to additional tax liabilities, (xxii) full realization of our deferred tax assets may be affected by a number of factors, (xxiii) our level of indebtedness could adversely affect our liquidity, limit our flexibility in responding to business opportunities, and increase our vulnerability to adverse changes in economic and industry conditions, (xxiv) we have a significant amount of goodwill and long-lived assets which, if impaired in the future, would adversely impact our results of operations, (xxv) our pension and postretirement plans are underfunded and will require future cash contributions and our required future cash contributions could be higher than we expect, each of which could have a material adverse effect on our financial condition and liquidity, (xxvi) legislation/regulation related to environmental and health and safety matters and corporate social responsibility could negatively impact our operations and financial performance, (xxvii) product liability claims and other legal proceedings could adversely affect our operations and financial performance, (xxiii) we may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, agents or business partners violate, or are alleged to have violated, anti-bribery, competition or other laws, (xxix) changing climate, global climate change regulations and greenhouse gas effects may adversely affect our operations and financial performance, (xxx) we may be unable to achieve out greenhouse gas emission reduction targets by 2030.  The risks described above are not all-inclusive, and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. For a detailed discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those forecasted, projected or anticipated, see "Risk Factors" in Part I, Item 1A of our most recently filed Form 10-K and our other filings with the Securities and Exchange Commission. All forward-looking statements made in this news release are expressly qualified in their entirety by reference to such risk factors. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Matt Eichmann
740-549-6067
[email protected]

SOURCE Greif, Inc.