05-11-2023, 09:39 AM
Graphic Packaging is a leading US provider of sustainable fiber-based packaging solutions for a wide variety of products to food, beverage, food service, and other consumer products companies.
Its revenue and earnings have more than doubled in the past 8 years, but this growth is largely driven by acquisitions. This was not only a debt-driven growth but also one that is at an unsustainable Reinvestment rate.
The company's Vision 2025 aims for productivity-driven margin improvement, but there is no track record of such improvements in the past.
There is no margin of safety for GPK unless there are at least 1% improvement per annum in GP margins, SGA margins, and return over the next 5 years.
![[Image: GPK.png]](https://i.postimg.cc/J0qGw68r/GPK.png)
Its revenue and earnings have more than doubled in the past 8 years, but this growth is largely driven by acquisitions. This was not only a debt-driven growth but also one that is at an unsustainable Reinvestment rate.
The company's Vision 2025 aims for productivity-driven margin improvement, but there is no track record of such improvements in the past.
There is no margin of safety for GPK unless there are at least 1% improvement per annum in GP margins, SGA margins, and return over the next 5 years.