Graphic Packaging Reports Decrease in Net Sales and Income in Q1 2025

Graphic Packaging Holding Company reported its financial results for the first quarter of 2025, revealing a decrease in net sales and income compared to the same period in 2024. The company generated net sales of $2.12 billion, a decline of 6% from $2.26 billion in the prior year. This drop was primarily attributed to the divestiture of its Augusta, Georgia facility, reduced pricing and volumes in the open market for bleached paperboard, and unfavorable foreign currency exchange impacts. Despite these challenges, the company noted a $44 million increase in sales from its sustainable packaging innovations.

Income from operations also saw a significant decline, falling 21% to $221 million from $278 million year-over-year. The decrease was driven by the same factors affecting sales, including lower pricing and volume, commodity inflation, and foreign exchange losses. However, the company benefited from a reduction in accelerated depreciation related to the closure of several facilities, which provided some offset to the overall decline in profitability. Interest expense decreased to $51 million from $59 million, reflecting an increase in capitalized interest.

In terms of strategic developments, Graphic Packaging announced plans to permanently close its Middletown, Ohio recycled paperboard manufacturing facility by June 1, 2025, as part of its ongoing efforts to consolidate production and improve efficiency. The company also completed the sale of its Augusta facility in May 2024 for $711 million, which contributed to the current quarter's financial results. The company is actively investing in a new recycled paperboard manufacturing facility in Waco, Texas, which is expected to enhance its production capabilities.

Operationally, Graphic Packaging's restructuring efforts included the closure of multiple packaging facilities, with the aim of consolidating production into fewer, more efficient locations. The company reported a total of $18 million in exit costs associated with these restructuring activities during the first quarter. As of March 31, 2025, the company had a total employee headcount of approximately 30,000, reflecting its extensive operational footprint across over 100 locations in more than 20 countries.

Looking ahead, Graphic Packaging remains focused on its strategic initiatives to enhance market share and drive innovation in sustainable packaging solutions. The company anticipates that its ongoing investments and operational improvements will position it well to navigate market challenges, including inflationary pressures and fluctuating demand. The company expects to maintain sufficient liquidity to meet its operational needs and capital expenditures, supported by cash flows from sales and access to revolving credit facilities.