Graphic Packaging Reports Q4 & Full-Year 2025 Update on Paperboard Operations; Waco Ramp-Up Completed

Atlanta, February 3, 2026 – Graphic Packaging Holding Company provided an update on its paperboard manufacturing and integrated packaging operations as part of its fourth-quarter and full-year 2025 earnings announcement, highlighting the successful ramp-up of its new recycled paperboard facility in Waco, disciplined capital spending, and a strategic pivot toward free cash flow generation and deleveraging.

Paperboard Market Environment

• The company noted overcapacity in commodity bleached paperboard markets in North America and Europe, which has resulted in pricing pressure on finished packaging.

• Near-term demand has been impacted by consumer value-seeking behavior and temporary pricing dislocations, though long-term competitive positioning remains intact.

Operational Performance & Footprint

• Packaging volumes were down ~1% in Q4 2025 and flat for full-year 2025.

• Pricing declined approximately 1% in Q4 and full-year 2025, reflecting market conditions.

• The company continues to operate one of the largest and most integrated paperboard manufacturing footprints globally, supporting scale efficiencies and vertical integration.

Waco (Texas) & Kalamazoo (Michigan) Paperboard Mills

• Waco recycled paperboard facility:

  • Successfully commenced commercial production in October 2025

  • Ramp-up progressing well, with quality on par with Kalamazoo

  • Total capital cost expected at approximately $1.67 billion, including ~$80 million of capitalized interest

• Net recycled paperboard capacity increase is modest, following the 2025 closures of Middletown and East Angus mills, as well as other industry closures.

• Operational investments are substantially complete, enabling:

  • Capital spending to decline to 5% or less of sales going forward

  • Improved integration rates across recycled, bleached and unbleached paperboard systems

Capital Expenditure & Cash Flow Discipline

• 2025 capital spending totaled approximately $935 million, largely reflecting completion of the Waco project.

• 2026 capital spending guidance reduced sharply to ~$450 million, reflecting:

  • Completion of major paperboard investments

  • A more disciplined approach to new capex approvals

• The company expects Adjusted Free Cash Flow of $700–$800 million in 2026, driven by:

  • Lower capital spending

  • Inventory reduction (paperboard and finished goods)

  • Operational and SG&A cost reductions

Portfolio Optimization & Cost Actions

• Graphic Packaging has initiated a comprehensive review of its global manufacturing footprint, with focus on:

  • Optimizing paperboard and converting assets

  • Improving return on invested capital

  • Aligning capacity with market demand

• A dedicated Transformation Office has been established to drive:

  • Productivity improvements

  • Cost take-out initiatives

  • Manufacturing and organizational efficiency