Graphic Packaging Holding Company Announces New Share Repurchase Plan Authorization

Rhea-AI Summary

Graphic Packaging (NYSE: GPK) has announced a new $1.5 billion share repurchase authorization, adding to its existing $365 million authorization from July 2023, bringing the total available to $1.865 billion. The company can execute repurchases through open market, private transactions, and Rule 10b5-1 plans.

CEO Michael Doss indicated that with Vision 2025's major investments nearing completion, capital spending will significantly decrease. The company also recently approved a 10% increase in quarterly dividend to $0.11 per share, paid on April 5, 2025. Management expects to return substantial cash to stockholders through growing dividends and opportunistic share repurchases in the coming years.

Positive

• New $1.5 billion share repurchase authorization, bringing total available to $1.865 billion
• 10% increase in quarterly dividend to $0.11 per share
• Expected significant decrease in capital spending needs
• Company projects strong cash generation exceeding needs over next several years

Negative

• None.

Insights

Corporate Finance Expert

Graphic Packaging shifts from capital investment to shareholder returns with $1.5B new buyback plan, signaling strong future cash flow generation.

Graphic Packaging's announcement of a $1.5 billion share repurchase authorization represents a significant shift in capital allocation strategy. When combined with the $365 million remaining from the previous authorization, the company now has a substantial $1.865 billion available for share repurchases.

This move signals a transition from the company's heavy investment phase toward a more shareholder-return focused approach. Management explicitly states that with the last major investment of Vision 2025 nearing completion, capital spending needs will decline significantly. This evolution follows a classic corporate lifecycle pattern where growth-focused capital expenditure gradually gives way to increased shareholder returns as a business matures.

The dual approach to shareholder returns is noteworthy - combining the large repurchase authorization with a 10% dividend increase to $0.11 per share. This balanced capital return strategy provides both immediate returns through dividends and potential long-term value through share count reduction.

The language around "opportunistic" share repurchases indicates a thoughtful approach to buybacks, with management planning to execute based on market conditions rather than committing to a rigid timetable. This flexibility should allow the company to maximize the value of each dollar spent on repurchases.

Most importantly, management's confidence in generating cash "well in excess" of needs suggests strong anticipated free cash flow in the coming years. As capital expenditures decline following the Vision 2025 investment cycle, the company appears well-positioned to deliver substantial returns to shareholders while maintaining operational excellence.

ATLANTA, May 1, 2025 /PRNewswire/ -- Graphic Packaging Holding Company (NYSE: GPK) ("Graphic Packaging", or "the Company"), a global leader in sustainable consumer packaging, today announced that its Board of Directors has approved a new $1.5 billion share repurchase authorization. This authorization is in addition to the July 27, 2023 share repurchase authorization under which $365 million remains available, bringing the aggregate available authorization as of April 30, 2025 to $1.865 billion.

The new authorization allows for the repurchase of shares from time to time through open market repurchases, privately negotiated transactions and Rule 10b5-1 plans in accordance with applicable securities laws. The timing of repurchases, if any, will depend on a range of factors including market conditions, the Company's financial condition, debt maturities, and cash flow.

Graphic Packaging President and CEO Michael Doss said "With the last major investment of Vision 2025 moving toward completion, the Company's capital spending needs will decline significantly. While we will always prioritize reinvestment to maintain and build on our leadership position in sustainable consumer packaging, we expect to generate cash well in excess of our needs over the next several years."

The Company's Board of Directors previously approved a ten percent increase in the quarterly dividend to $0.11 per share, paid on April 5, 2025 to common stockholders of record at the close of business on March 15, 2025.

"We measure every potential investment against the alternative of repurchasing our stock, and expect to return a substantial amount of available cash to stockholders in the months and years ahead through a growing dividend and opportunistic share repurchase activity" Mr. Doss added.

Investors: investor.relations@graphicpkg.com
Media: comms@graphicpkg.com 

Forward Looking Statements

Any statements of the Company's expectations in this press release, including, but not limited to the timing of the completion of the major investment in Waco, TX, future spending needs, and future cash generation, a growing dividend, and returning cash to stockholders, constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and its present expectations. These risks and uncertainties include, but are not limited to, inflation of and volatility in raw material and energy costs, changes in consumer buying habits and product preferences, competition with other paperboard manufacturers and product substitution, the Company's ability to implement its business strategies, including strategic acquisitions, productivity initiatives, cost reduction plans and integration activities, as well as the Company's debt level, currency movements and other risks of conducting business internationally, the impact of regulatory and litigation matters, including the continued availability of the Company's U.S. federal income tax attributes to offset U.S. federal income taxes and the timing related to the Company's future U.S. federal income tax payments. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made and the Company undertakes no obligation to update such statements, except as may be required by law. Additional information regarding these and other risks is contained in the Company's periodic filings with the Securities and Exchange Commission.

About Graphic Packaging Holding Company

Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia, designs and produces consumer packaging made primarily from renewable or recycled materials. An industry leader in innovation, the Company is committed to reducing the environmental footprint of consumer packaging. Graphic Packaging operates a global network of design and manufacturing facilities serving the world's most widely recognized brands in food, beverage, foodservice, household, and other consumer products. Learn more at www.graphicpkg.com.

 

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SOURCE Graphic Packaging Holding Company

FAQ

What is the size of GPK's new share repurchase authorization announced on May 1, 2025?

Graphic Packaging announced a new $1.5 billion share repurchase authorization, which combined with the remaining $365 million from previous authorization totals $1.865 billion available for repurchases.

How much did Graphic Packaging increase its dividend in 2025?

Graphic Packaging increased its quarterly dividend by 10% to $0.11 per share, paid on April 5, 2025.

What methods will GPK use for its share repurchase program?

GPK can execute share repurchases through open market repurchases, privately negotiated transactions, and Rule 10b5-1 plans in accordance with securities laws.

Why is Graphic Packaging expecting increased cash availability for shareholders?

With Vision 2025's major investments nearing completion, the company's capital spending needs will decline significantly, allowing for more cash return to shareholders through dividends and share repurchases.