Good day, and thank you for standing by. Welcome to the Greif First Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Bill D’Onofrio, Vice President of Investor Relations and Corporate Development. Please go ahead. Bill D’Onofrio: Good morning, and thank you for joining Greif's Fiscal First Quarter 2026 Earnings Conference Call. Today, our CEO, Ole Rosgaard, will provide a strategy and market update, followed by our CFO, Larry Hilsheimer, with a review of our financial results. Please turn to Slide 2. In accordance with Regulation Fair Disclosure, please ask questions regarding topics you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. During today's call, we will make forward-looking statements involving plans, expectations and beliefs related to future events. Actual results could differ materially from those discussed. Additionally, we will be referencing certain non-GAAP financial measures and the reconciliation to the most directly comparable GAAP metrics that can be found in the appendix of today's presentation. I'll now turn the call over to Ole on Slide 3.

Thank you, Bill, and thank you all for joining us today. We entered 2026 from a position of strength despite a still muted industrial backdrop. Our Q1 performance demonstrates the progress we are making on 2 critical fronts, delivering solid financial results in the present while also making progress on our longer-term build-to-last strategy. During the quarter, volumes performed as anticipated, remaining in line with expectations due to continued softness in the industrial economy. Our EBITDA margin profile continues to improve meaningfully, up 260 basis points year-over-year, which is the result of decisive actions taken on our cost optimization. As a result, adjusted EBITDA increased 24% versus prior year, and our results came in as expected. Based on this performance, we are reaffirming our 2026 guidance. Following the portfolio rationalization we undertook in 2025, our leverage is now historically low, enabling significant capital flexibility to create shareholder value. In Q1, we completed $130 million of the $150 million share repurchase program we announced 3 months ago. Given our strong free cash flow projection for the year with a conversion ratio of 50%, we fully anticipate remaining well below a leverage of 2x. Our strong free cash flow generation and balance sheet strength allows us to fund value-creative organic growth, including growth CapEx in our existing operations and higher return end markets. As we drive growth externally, we are also accelerating internal transformation. Our run rate cost optimization is now at $65 million, which reflects primarily SG&A actions taken early in fiscal 2026, which will benefit EBITDA for the majority of the year as contemplated in our original guidance. As a reminder, our fiscal 2026 year-end run rate commitment is $80 million to $90 million. We are confident in the progress we are making, and we believe we are demonstrating our…

Thank you, Ole, and hello, everyone. Adjusted EBITDA for the quarter increased 24% and margins improved 260 basis points to 12.3%, reflecting improved price/cost and the significant benefit of structural cost optimization. While Q1 adjusted free cash flow was lower year-over-year, this is primarily due to the inclusion in the prior year of cash flow from recently divested businesses. Excluding that impact, the core cash engine and continuing operations improved year-over-year, supported by EBITDA growth, lower interest expense following deleveraging and reduced maintenance capital post our containerboard sale. As we discussed last quarter, Q1 is seasonally the lowest quarter for free cash flow, and we have full confidence in our full year low-end adjusted free cash flow guidance of $315 million and approximate 50% conversion expectation. Our earnings strength showed in our earnings per share results, up 140% year-over-year, driven by higher EBITDA, lower interest expense despite year-over-year increased tax expense. Please turn to Slide 6. In Customized Polymers, gross profit was down on approximately flat volumes due to primarily product mix despite cost optimization gains. Durable Metals gross profit was slightly up and improved year-over-year, primarily from structural cost optimization. Fiber sales were impacted by the demand softness we anticipated and discussed during our Q4 call. Margins, however, expanded year-over-year, driven by cost discipline and favorable year-over-year pricing and OCC costs. Innovative Closures sales is presented as total sales to properly reflect the margin profile as gross profit reflects profitability of both direct external sales and external sales sold through the metals or polymers businesses. Net sales does not include the external sales sold through the metals and polymers businesses. Total sales were roughly flat year-over-year, but gross profit was up due to strong mix and continued benefits from our cost optimization. Please turn to Slide 7. We are…

Thanks, Larry. As we look ahead, we remain grounded in the realities of a still cautious demand environment, but we're not standing still. We're executing on cost, on capital and on strategy. The work we've done to transform Greif is not cyclical. It's structural, and it shows how we perform, how we invest and how we allocate capital. My sincere thanks to our colleagues all around the world for driving this transformation with me. We remain focused on managing the presence while also building the next era of durable value creation for Greif. Thank you for your support. Operator, please open the lines for questions.

[Operator Instructions] And our first question will be coming from Gabe Hajde of Wells Fargo Securities LLC.

I wanted to ask, I mean, you guys have been operating sort of in this muted environment now for 3 years and have done a really good job of kind of hitting the low-end guidance and even moving it up a little bit. I'm curious, Larry, you kind of talked about some costs coming in a little bit better and that gives you confidence in the full year. But the volume performance here in fiscal Q1 was maybe a little bit even below what we were expecting. So was there anything, I guess, as the quarter progressed from an inventory management standpoint from your customers that jumps out at you? And then just being a little bit more back-end weighted, I'm curious if you can talk about trends in the fiscal Q2 such that it kind of implies a pretty good ramp into the back half of the year, on the volume side.

Yes. Thanks, Gabe. I mean I have to say that, I mean, demand conditions, they remain muted and in particular, across fiber and steel. And that's like reflecting the continued pressure in both in industrial and chemical end markets. In some of our end segments, you will see some seasonality in there, which will pick up -- mean that they'll pick up during the Q2. But importantly, the environment really is not changing. The last week, I visited about 8 customers in various parts of the world, and the message is really the same. Conditions are still muted. But importantly, that doesn't mean we're standing still, as you quite rightly pointed out. Our commercial teams are executing with intent, and we are really transforming our commercial team to hunters from farmers. We're deploying capital for organic growth. We're adding capacity in spots where we can see we can sell that capacity. So we are being extremely aggressive in the market in that respect.

Gabe, one thing to supplement what Ole said is we have seen volume trajectory in our small plastics start Q2 in a very positive way.

Okay. And then I guess on the OCC front, any insights there? I know you guys obviously have the recycling operations. It seems like expectations are still for pretty flat here in the first, call it, half of '26. Anything that you'd point out for us there?

I just agree with that. That's our feeling as well, Gabe.

Okay. And CapEx, you've called out a couple of growth projects. It sounds like it's mostly small format plastics. Any particular geography or area that you want to call out for us?

I mean it's sort of in various regions. We have -- in Europe, we are deploying additional capacity where we have like really, really good business cases on it. We have like in Africa, we're just in. We have like the whole mining sector in Southern Africa is -- I won't call it is exploding, but it's picking up significantly due to the run on precious metals. And a lot of the products we manufacture in that part of the world actually goes into mines. So regionally, when we add capacity in this respect, we get the ROIC on it almost immediately. We have added capacity in India. And last year, we did it in Singapore as well for specific customers where we end up with long-term contracts. So I'm confident that we will see that continue and the opportunity is certainly there.

Our next question will be coming from George Staphos of Bank of America Securities.

On the topic of volume, I was hoping you might be able to give us a bit more color in terms of what you're seeing with metal, recognizing, as you said, maybe things were a little bit weaker, but not terribly out of line. Where are you seeing some strength, if at all, within the end markets within metal where things perhaps weaker? And I remember, Larry and Ole, you had been expecting some pickup to be helpful in housing if it were to occur relative to these in your business overall. Any thoughts on what you're seeing out of your markets that are exposed to housing at this juncture?

I'll make a comment first and then Larry has done some research on housing, so he'll follow up on that. Obviously, for our metal, the biggest segment that the end segment is chemicals and chemicals, one of their large segments is housing. We have not seen any pickup there. And demand remains muted, as I said. And it's all -- when housing picks up and when we see an improvement there, we will see an improvement. The mining aspect I mentioned earlier, could be an important one because when you do mining, then you don't bring anything out of mine. So all the equipment you have in a mine needs a lot of loop all the time. And that's brought into mines in metal containers. And you leave those metal containers in the mines in [indiscernible] that come landfills, you don't bring it up. You can't bring polymer products in a mine because if it catches fire, then you have lots of fumes. But as I said, the metals, we're managing that for cash. So I'll let Larry comment on the housing side.

Yes, George, it's interesting. There have been a couple of headlines in the last couple of months of resale of existing homes picking up a bit. I think in like November better than 5%. It's nice to see the headline. It's interesting to get a little bit underneath it. I think we've shared before that existing home sales are at 1995 levels. What's more, I guess, I call it interesting. And I look at it as interesting because I think it truly is an upside because I do believe it will turn at some point. Existing home sales today are actually on a population-adjusted basis at the levels of 1982. 1982 had 16% mortgage rates, and we were in a recession. And so they are really decimated. And as we've said before, when people go to sell an existing home, they spend money to fix it up, do all this. The new person moves in cares out what everybody else fixed up, buys new appliances, paints, buys new furniture. So it really is a big driver for the chemicals industry and us, but it is not there yet. I guess the positive, I think of it is, it's become a real issue for the current administration. You can see Trump talking about not allowing corporate investment in housing. You also see some discussion of portable mortgages, which is an interesting concept that's been in the U.K. for quite some time. So there's a lot of focus on it, but it really gets down to what's the resale prices and what's the interest rates.

Okay. I appreciate that. Larry, 2 last ones, I'll turn it over and I'll ask them together. One, can you remind us where you think the price cost on fiber will sort of anniversary right now, things are good. Is that a second half issue? Or should you be running relatively positively throughout the year? And then margins in polymers were a little bit weaker than we were expecting. I know gross margin wasn't down as much. EBITDA was down a bit more than we were expecting. What was driving that? And what are the implications going forward?

Yes. I'll take the -- yes is the answer on the fiber question. It will be later part of the second half of the year that, that will annualize. On the polymer side, it really is just a mix issue. So we were down somewhat, and we expect this on our small polymers and our large plastic drums, which are better margin products in the IBCs and where volumes were up a bit and medium. So really it was just a mix issue, George, not anything on the cost or the price side.

But George, just to elaborate on that. So polymer gross profit margins, they were slightly lower year-over-year in Q1, primarily driven by the mix and manufacturing costs, as Larry pointed out. Volumes were also lower in small plastics and large plastics, and they are among our higher-margin polymer products. And overall, that reduced contribution from those products that had a short-term impact on margins. And then lastly -- manufacturing costs across our network were higher. We're actively addressing manufacturing costs, and we expect that to improve as the year progresses.

It seems like the EBITDA margin delta was worse than the gross margin delta. Anyway, I'll turn it over. If you have any thoughts on that, we take them otherwise, good luck in the quarter.

Yes. George, just back to the issue that we've talked about and why we moved to gross profit. It gets to be the allocation issue of overhead cost is what the driver on the EBITDA difference is.

And our next question will be coming from Mike Roxland of Truist Securities.

Just wanted to follow up quickly on volumes. Obviously, declined about 5% in 1Q. The EBITDA guide assumes flat, maybe slightly up volumes for the year. What gives you confidence that volumes are going to improve? And if volumes do remain weak, can you just talk -- when I say weak, maybe flat, down low single digits, what does that imply for your EBITDA guide for the year?

Yes. I'll hit the EBITDA guide for the year. I just repeat, we are extremely confident. It's why we go with the low-end guidance. We -- there's various elements that go into that. But on the volume side, we had expected Q1 to be low in some products, it was a little lower. As I said earlier, we're seeing the pickup in the small plastic volumes going down. And as Ole mentioned, and he'll add something here, too, but the -- we're very optimistic about our commercial team and the incentives that we put in place and the early things that we're seeing out of those efforts. But Ole?

Yes. First, the bridge was never built on Q1 year-over-year performance. It reflects how we expect volumes to progress or normalize across the year. And as we have established, Q1 came in softer than last year, but nothing we saw changes our full year view. And importantly, as our commercial teams, they remain extremely active. I mentioned we have done a lot of organizational changes in the company. We have transformed or are transforming our global commercial organization from farmers to hunters. We are changing or have been changing the incentive program for that. We are targeting CapEx where we see organic growth opportunities, and we do that in a very disciplined way where we are targeting short-term gains. And basically, we've already seen customer wins and share of wallet gains with existing customers, which again supports our confidence in volume progressing as the year unfolds.

That's very helpful. So basically, what it comes down to is volumes were weaker in 1Q, but given some of the commercial activities that you're seeing, you think those wins should creep up or should occur sometime in the back half that will allow you to achieve your volume guide for the year. Is that fair?

That's fair.

Perfect. Got it. And just one quick follow-up. With the -- just following up on George's question regarding the price cost spread in fiber. I thought that was going to be more of -- I thought you lapped that in fiscal 2Q. And if that's the case, I mean, what is the company doing to address that headwind as you lap that?

Yes. I mean you saw the $40 a ton in URB was last May rolled in, in June and July, and the OCC was through the last part of the year. So it's that second half of our year with more of it coming in the last quarter just because of the way some of the contractual pass-throughs work. That's all it is, Michael.

Got it. Okay. And then one last question. Just you mentioned, I think, last quarter, deploying a very unique proprietary form of barrier technology. You said you guys are the only ones that have that. Wondering if you could provide any more color around the technology, what it does, the competitive advantage it gives you? And have you received any orders on that? We are using that technology?

Yes. It's called the SIOC technology. We have received orders. We have -- the first machine is fully operational in France. We have 3 more machines in production that will be deployed during this year, and that will be followed by further machines. And so far, very good actually.

Yes. The financial impact for this year is not significant, Michael, but we are very, very optimistic about this technology and its impact, and we're ramping it up.

And our next question will be coming from Matt Roberts of Raymond James.

I'll start in fiber. I think you noted converting was down mid-single digits this quarter, which I believe is down from low single-digit decline seen last quarter. And on the operating rates, I believe you said last quarter was 90%, quarter before that 95% and now solid. So maybe where are operating rates trending now versus those prior 2 quarters? And does that support price that was previously taken? And in tubes and cores, you're understandably lapping some paperboard supply cuts that were in 2025. When do we lap those? When should we expect tube and cores and fiber more generally to return to growth?

Yes. So I mean, first of all, the URB mills, they took about, I think, about 14,000 tons of economic downtime in Q1, but that was all due to converting softness. And then converting saw similar MSD declines. And the largest driver is basically the paper industry, where we supply costs for SDS and CRB grades. We do expect fiber profitability to improve sequentially. There's a lot of activities in the pipeline.

That's helpful. And on the price cost, Larry, last quarter, you gave a bridge at the $30 million in price cost, I think $18 million of that was in the URB price and lower OCC. It sounds like there aren't any changes in expectations from OCC or URB price. But any other impacts or puts and takes from nonmaterials impacts, whether that be energy or freight?

No. I mean it's -- there's a lot of things going on. I mean, obviously, Matt, I mean, take like we're doing a really great job on our cost takeouts. I mean you've probably read about health care cost inflation across all industries in the U.S. So we're beating those inflation impacts and still delivering on what we have. But in terms of any differences relative to what we laid out in our Q4 guidance walk, there aren't any other than just getting down to, for example, we've now cut 10% of our headcount on the professional side. We're up to 220 headcount reductions. We continue to work that, and those are focused on our overall objective, but also overcoming inflationary challenges.

That's very helpful, Larry. And if I can get one last one in. Just on the repurchases. I think you said $130 million of the $150 million was exhausted during the quarter. Is that remaining $20 million, is that still outstanding utilized quarter-to-date? Or was it replaced by the $300 million? And on that $300 million, I know you committed now to that 2% annual buyback. Should we expect any more in 2026? Or is that more 2027, given you've already about doubled that target so far in '26?

Yes. I'll do the first part. So we've done $130 million, and we still have $20 million remaining. That will probably be concluded up to the summer here. The price of the B shares obviously helps that at the moment. So -- and then what happens next, I'll leave Larry to...

Yes. I mean -- so the $300 million is incremental to the $150 million, Matt. And yes, then our go-forward intention is to do roughly 2%. But we think our stock is a very good buy, and we could end up deciding to talk to our Board about more than that, but we're committed to the 2% level going forward and obviously, subject to our Board's approval.

[Operator Instructions] Our next question will be coming from Daniel Harriman of Sidoti & Company.

I wanted to follow up on the prior share repurchase question. And you guys have been very clear in recent calls and your focus to deploy capital where you see the highest returns. So with the $130 million purchase in the recent quarter, I'm just curious how should we think about the cadence of the $300 million authorization versus potential acquisitions as you guys look to reach some of your longer-term EBITDA and free cash flow targets?

Yes, Daniel, I mean we'll be flexing depending on what we see in terms of the markets and where our stock price is and what's going on in our M&A pipeline, which -- we continue to have a robust pipeline of tuck-in, small tuck-in deals, but our big focus is organic growth, but we're also active. So we'll just be reacting to where the market is and where we're at on capital deployment needs internal and external.

If I can just supplement that on deploying capital. Our focus is organic growth, no doubt about it. And as and when we see an M&A deal that can complement that and it's a tuck-in, then -- and it fits our criteria, then we will approach that in a disciplined way. But our sole or not our primary focus is organic growth.

I would now like to turn the conference back to Ole Rosgaard for closing remarks.

Thank you very much, and thank you again for your interest and for your time and for your questions today. Greif has entered fiscal 2026 with strong momentum. Our 24% increase in EBITDA dollars, expanding EBITDA margins and meaningful cost reductions demonstrate our ability to drive returns in a muted demand environment. We have also reduced leverage to 1.2x while reducing or returning approximately $130 million to shareholders through disciplined share repurchases as discussed. This performance underscores the strength of our portfolio, the effectiveness of our operating model and our ability to convert execution into results. Our strategy is working, and we are positioned to continue delivering durable earnings and cash flow improvements. Have a great rest of your day. Thank you.

This concludes today's program. Thank you for participating.