Why Financial Performance & Profitable Growth Matters
Financial and sustainability performance are mutually beneficial. Strong financial performance enables us to make investments in the sustainability efforts that we believe in—a pillar of The Greif Way. Similarly, our sustainability efforts contribute to sales, efficiency and cost improvements that generate additional value for our shareholders.
Business Value Created Since 2007
Through lowering our Medical Case Rate, creating a safer working environment and avoiding injury claims we are creating real business value.
The 2017 fiscal year marked our 140th year in business and we generated significant financial improvement over 2016. We increased operating profit by 20.7 percent versus Fiscal 2016 and generated in excess of $200 million in Free Cash Flow. We also returned roughly $99 million to our shareholders in dividends paid.
We believe our sustainability performance contributes to our financial success and is valued by our global customers. Our commitments to delivering a superior customer experience through product quality and service excellence has led to our improved Customer Satisfaction Index, Net Promoter and Corrective Action Rate scores, and our ability to attract and retain customers.
Our customers value product innovation and end-of-life solutions. We have partnered closely with them to bring new, innovative products that provide solutions to the business challenges they face to market, while reducing input costs. We are actively working to provide and improve viable steel, plastic and fibre drum reconditioning options that are desired by our customers.
Our sustainability activities also focus on reducing our operational footprint that result in business and environmental benefits. Our efforts to reduce energy and waste have direct cost savings implications, as do our efforts to maximize material and water efficiencies. Our compliance management system minimizes the risk of regulatory fines and complements our measures to address ethics and security risks, as well as threats to our business continuity. These efforts also build trust and confidence with our customers and translate into stronger strategic partnerships.
None of these efforts are possible without our employees. Investing in and valuing our people helps us create a working environment that people want to participate in every day, contributing to the safety, productivity and retention of our employees.
In 2018, Greif will further its commitment to generating shareholder value through margin management activities, fiscal discipline and a sharp focus on maximizing cash flow generation.
Savings from Gauge Improvement Program
Working with our suppliers to meet minimum specifications requirements resulted in significant savings in 2017.
Goals & Progress
Our 2018 financial goals include:
- Generating between $3.25 and $3.55 in Class A Earnings per Share before Special Items
- Delivering between $200 and $220 million in Free Cash Flow
Longer term, we are progressing towards our 2020 financial commitments, including:
- Increasing gross margin to greater than 21 percent of sales.
- Decreasing selling, general, and administrative expenses to 9.7 percent of sales.
- Delivering Free Cash Flow of between $230–270 million.