Graphic Packaging reported fourth-quarter and full-year 2025 results showing lower earnings in a challenging market environment, while reaffirming its focus on cash generation and operational discipline heading into 2026.
For the full year, net sales reached $8.6 billion, down from $8.8 billion in 2024. Net income declined to $444 million, compared with $658 million a year earlier. On an adjusted basis, excluding non-recurring items and amortization of acquired intangibles, net income totaled $539 million, versus $759 million in 2024.
Fourth-quarter performance under pressure
In the fourth quarter of 2025, net income fell to $71 million, or $0.24 per diluted share, from $138 million a year earlier. Adjusted net income reached $85 million, reflecting lower packaging prices and volumes, higher input costs, and deliberate production curtailments aimed at reducing inventories.
Quarterly net sales were essentially flat at $2.1 billion, as a modest decline in packaging operations was offset by favorable foreign exchange effects and $56 million in innovation-related sales.
Adjusted EBITDA for the quarter declined 19% to $311 million, with the adjusted EBITDA margin falling to 14.8%, compared with 19.3% in the prior-year period.
Full-year margins down amid strategic adjustments
For the full year, adjusted EBITDA decreased to $1.4 billion, down from $1.7 billion in 2024, with the adjusted margin narrowing to 16.2%. The decline reflected pricing and volume pressures, higher costs, and the impact of the 2024 divestment of the Augusta, Georgia bleached paperboard facility.
Total debt increased to $5.6 billion at year-end 2025, pushing the company’s net leverage ratio to 3.8x, up from 3.0x in 2024.
Waco project nearing completion
A key milestone in 2025 was the near-completion of the company’s new recycled paperboard manufacturing facility in Waco, Texas. Total projected spending for the greenfield project stands at approximately $1.67 billion, with $1.58 billion invested by the end of 2025. Capital expenditures for the year declined to $935 million, reflecting the winding down of this major investment cycle.
Despite the higher leverage, Graphic Packaging returned about $281 million to shareholders in 2025 through dividends and share repurchases.
Priority on cash flow in 2026
Looking ahead, the company expects 2026 net sales in the range of $8.4 billion to $8.6 billion and adjusted EBITDA between $1.05 billion and $1.25 billion. Adjusted free cash flow is projected at $700 million to $800 million, with capital spending expected to drop sharply to around $450 million.
Management emphasized that the anticipated decline in adjusted EBITDA reflects largely temporary or non-cash factors, including inventory reduction actions to strengthen cash generation, a non-cash normalization of incentive compensation, and short-term weather-related impacts early in the year.
“We are focused on operational excellence, improving our cost structure, and delivering substantial free cash flow to strengthen the balance sheet and return capital to shareholders,” said President and CEO Robbert Rietbroek, noting that the company has launched a comprehensive review of its organization, operations, and manufacturing footprint, along with a selective portfolio review.
With its largest investment project nearing completion, Graphic Packaging enters 2026 aiming to convert its expanded industrial base into stronger cash flow and more resilient financial performance.
Graphic Packaging is a global provider of fiber-based packaging solutions for food, beverage, healthcare, and consumer goods. The company designs and manufactures paperboard packaging systems focused on sustainability, operational efficiency, and product protection, serving customers in more than 30 countries.
Source: Graphic Packaging
