Magnera (MAGN) investor relations material

Executive summary

• Net sales for the quarter were $796 million, with adjusted EBITDA of $90 million and free cash flow of $73 million, reflecting stable performance amid macroeconomic and weather-related challenges.

• $36 million in debt repayments were made, enabled by strong free cash flow and a focus on operational excellence.

• Winter storms caused temporary shutdowns at North American plants, but no significant damage occurred and most setbacks are expected to be recouped in the second half.

• The war in the Middle East and global macroeconomic uncertainty increased raw material and supply chain costs, impacting operational expenses.

• Strategic investments in sustainability and efficiency projects continue, with new initiatives at Gernsbach, Lydney, and Dombühl facilities.

Financial highlights

• Net sales declined 3% year-over-year to $796 million, with operating income rising to $17 million from $4 million in the prior year quarter.

• Adjusted EBITDA was $90 million, up 1% year-over-year, as internal gains were offset by external headwinds.

• Free cash flow for the quarter was $73 million, with a trailing 12-month adjusted free cash flow yield exceeding 40%.

• Net loss for the quarter was $18 million, or $(0.50) per share, improved from a $41 million loss, or $(1.15) per share, in the prior year.

• Americas revenue declined to $437 million, Rest of World revenue was $359 million; Rest of World adjusted EBITDA increased 19% to $32 million, while Americas adjusted EBITDA declined 9% to $58 million.

Outlook and guidance

• Full-year adjusted EBITDA guidance remains $380–$410 million, with free cash flow of $90–$110 million and cash from operations projected at $170–$190 million.

• Management reaffirmed guidance, expecting headwinds in Q3 due to inflation and supply chain volatility, with recovery anticipated in Q4.

• Capex outlook is 2–3% of sales in the near term, with no near-term debt maturities.

• Focus remains on deleveraging to a leverage target of approximately 3.0x.