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- **Waco Facility Success**: Early production start and $80 million EBITDA contribution in 2026, with another $80 million in 2027. 
- **Margin Resilience**: Despite bleached paperboard pricing pressure, maintaining market share through lower-cost recycled paperboard. 
- **Innovation Growth**: $52 million in incremental sales from new products like paperboard punnets. 
- **Free Cash Flow Target**: $700-800 million in 2026, driven by reduced CapEx and inventory management. 
- **Debt Management**: Refinanced bonds to reduce costs, targeting 3.5-3.7x leverage. 


**【CEO Summary Section】**
- **Waco Facility Ramp-Up**: Launched production ahead of schedule, with full capacity expected in 12-18 months. The facility is projected to contribute $80 million in EBITDA in 2026 and another $80 million in 2027, driven by cost savings from closing older facilities (East Angus and Middletown). 
- **Competitive Pricing Pressure**: Unusual discounts on bleached paperboard are impacting margins, but management remains confident in maintaining market share through lower-cost recycled paperboard production. 
- **Innovation Growth**: New products like paperboard punnets are opening new markets, contributing $52 million in incremental sales in Q3. 
- **Free Cash Flow Outlook**: Targeting $700-800 million in 2026, enabled by reduced capital spending (5% of sales) and inventory reductions. 
- **Strategic Closures**: East Angus closure by year-end and Middletown closure in May 2025, reducing capacity by 475,000 tons but adding 550,000 tons at Waco, resulting in a net 75,000-ton increase. 

**【CFO Financial Commentary】**
- **Q3 2025 Results**: Sales of $2.2 billion, adjusted EBITDA of $383 million, and adjusted EPS of $0.58. 
- **Debt Management**: Secured a $400 million term loan to refinance bonds, reducing interest costs. Year-end leverage target of 3.5-3.7x net debt/EBITDA. 
- **Cost Control**: $30 million in inventory reductions year-to-date, with an additional $20 million expected in Q4. 
- **Share Repurchases**: $150 million used to buy back shares, reducing outstanding shares by 2.3% year-to-date. 

**【Q&A Highlights】**
- **Waco Contribution**: CEO confident in $80 million EBITDA in 2026, with $65-75 million in one-time start-up costs split between 2025 and 2026. 
- **Competitive Behavior**: Bleached paperboard competitors offering discounts below cost, but Graphic Packaging maintains margin advantage through lower-cost recycled paperboard. 
- **Foodservice Trends**: Weakness in fast casual dining, but QSR and grocery store packaging show resilience. 
- **Cash Flow Drivers**: Reduced CapEx, inventory management, and SG&A cost reductions will drive 2026 free cash flow. 
- **Leverage Reduction**: Plans to deleverage alongside share buybacks as free cash flow inflects in 2026. 


Graphic Packaging Holding Company(GPK)-20251104-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

GPK

GPK fundamentals

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