Graphic Packaging Holding Company has recently released its 10-Q report, providing an in-depth look into the company's financial performance. The company is a leading global producer of consumer goods packaging, offering a wide range of sustainable packaging solutions primarily made from renewable or recycled materials. Graphic Packaging serves various consumer markets and operates through three segments: Americas Paperboard Packaging, Europe Paperboard Packaging, and Paperboard Manufacturing.
In the first quarter of 2025, Graphic Packaging reported a decrease in net sales by $139 million or 6%, amounting to $2,120 million compared to $2,259 million in the same period in 2024. This decline was primarily attributed to the divestiture of its Augusta facility, reduced open market paperboard volumes and pricing of bleached paperboard, and unfavorable foreign currency exchange. However, the company reported innovation sales growth of $44 million driven by sales of sustainable consumer packaging solutions, while packaging sales remained relatively flat in food, foodservice, household, and health and beauty, with a decrease in beverage sales.
Income from Operations for the first quarter of 2025 decreased by $57 million or 21% to $221 million from $278 million in the same period in 2024. This decline was primarily due to the Augusta divestiture, bleached paperboard price and volume declines, lower packaging price, mix, and commodity inflation, as well as unfavorable foreign currency exchange. The company also reported a reduction in accelerated depreciation related to the closures of several packaging and paperboard facilities, impacting income from operations favorably.
The company realigned its financial reporting structure under two reportable segments, Americas Paperboard Packaging and International Paperboard Packaging. The Americas Paperboard Packaging segment reported a decrease in net sales due to lower pricing, packaging volume declines, and unfavorable foreign currency exchange, partially offset by innovation sales growth driven by conversions to sustainable consumer packaging solutions. The International Paperboard Packaging segment reported a slight decrease in net sales due to lower pricing and unfavorable foreign currency exchange, offset by innovation sales growth driven by conversions to sustainable consumer packaging solutions and higher volumes.
In terms of liquidity and cash flows, Graphic Packaging reported net cash used in operating activities for the first three months of 2025 totaling $174 million compared to $3 million of net cash provided by operating activities for the same period in 2024. The company attributed this decrease to lower income from operations and a higher use of cash to fund working capital in 2025 compared to 2024. Additionally, the company had capital spending of $313 million in the first quarter of 2025, with a significant portion being allocated for adding capacity and improving process capabilities.
Today the company's shares have moved -15.6% to a price of $21.37. For more information, read the company's full 10-Q submission here.
