First Quarter 2025 Earnings April 30, 2025 Forward-Looking Statements Certain statements in this presentation that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as "expects," "anticipates," "believes," "estimates," "could," "should," "can," "forecast," "intend," "look," "may," "will," "remain ...

MEMPHIS, Tenn. – April 30, 2025 – International Paper (NYSE: IP; LSE: IPC) (the "Company") today reported first quarter 2025 net earnings (loss) of $(105) million, or $(0.24) per diluted share, and adjusted operating earnings (non-GAAP) of $101 million, or $0.23 per diluted share. First quarter net sales were $5.9 billion in 2025 and $4.6 billion in 2024. First quarter net earnings includes a pre-tax charge of $271 million for accelerated depreciation and restructuring charges related to the previously anno ...

Core Insights - International Paper reported a net loss of $105 million, or $(0.24) per diluted share, for Q1 2025, compared to a net income of $56 million, or $0.16 per diluted share, in Q1 2024. Adjusted operating earnings were $101 million, or $0.23 per diluted share [1][4][20] - The increase in net sales to $5.9 billion in Q1 2025 from $4.6 billion in Q1 2024 was primarily driven by the acquisition of DS Smith, sales price increases, and cost reductions [1][3][5] - The company faced a pre-tax charge of $271 million related to accelerated depreciation and restructuring costs due to the closure of the Red River containerboard mill [2][11] Financial Performance - Q1 2025 net sales were $5,901 million, up from $4,619 million in Q1 2024, while net earnings (loss) were $(105) million compared to $56 million in Q1 2024 [5][20] - Adjusted operating earnings for Q1 2025 were $101 million, a significant increase from $(7) million in Q4 2024 and $61 million in Q1 2024 [5][27] - Free cash flow for Q1 2025 was $(618) million, a decline from $144 million in Q1 2024, primarily due to increased capital spending and transformation costs [11][32][33] Segment Performance - The Packaging Solutions North America segment reported net sales of $3,702 million in Q1 2025, up from $3,486 million in Q1 2024, but operating profit decreased to $142 million from $192 million [8][10] - The Packaging Solutions EMEA segment generated net sales of $1,550 million in Q1 2025, with an operating profit of $46 million, compared to $348 million in sales and $24 million in profit in Q1 2024 [8][9] - The Global Cellulose Fibers segment saw a slight improvement in operating profit to $17 million in Q1 2025 from a loss of $(250) million in Q4 2024, despite lower sales [10] Strategic Initiatives - The company is focusing on its 80/20 strategy to enhance performance by prioritizing valuable customers and aligning resources accordingly [3] - The acquisition of DS Smith is expected to strengthen the company's market position in North America and EMEA, although overall market demand has been softer than anticipated [3][6] - Management is taking actions within its control to drive commercial excellence and cost reductions amid an uncertain macroeconomic environment [3]

Core Viewpoint - International Paper Company is set to report its first-quarter 2025 results on April 30, following the acquisition of DS Smith, which is expected to significantly enhance its financial performance compared to the previous year [1][2]. Financial Performance Expectations - The Zacks Consensus Estimate for International Paper's first-quarter revenues is $6.61 billion, reflecting a 43.1% increase from the same quarter last year [3]. - Earnings estimates have decreased by 16.7% over the past 60 days to 35 cents per share, indicating a 106% year-over-year increase from 17 cents reported in the previous year [3]. - The company has a history of earnings surprises, beating estimates in three of the last four quarters with an average surprise of 41.5% [5]. Segment Performance Insights - EMEA Packaging volumes are projected to reach 2,452 thousand short tons in Q1 2025, a significant increase from 340 thousand tons in Q1 2024, with revenues expected at $2.44 billion [7]. - North American Packaging Solutions is anticipated to see year-over-year volume increases in various categories, with revenues estimated at $3.79 billion for the quarter [8][9]. - Overall, Industrial Packaging segment volumes are projected at 6,165 thousand short tons, indicating a 54.5% year-over-year rise, with revenues expected to be $6.2 billion, reflecting a 62.9% increase [10]. Operating Profit Projections - The Industrial Packaging segment's operating profit is expected to surge by 73% to $373 million, with North American Packaging Solutions projected at $285 million and EMEA Packaging at $87.7 million [11]. Global Cellulose Fibers Segment - The Global Cellulose Fibers segment is expected to report volumes of 622 thousand metric tons, a 14.7% year-over-year decline, with revenues estimated at $608 million, down 13.6% from the previous year [12]. Stock Performance - International Paper's stock has increased by 39.1% over the past year, outperforming the industry average growth of 23.6% [14].

Industry Overview - The Zacks Paper and Related Products industry is facing subdued demand due to lower consumer spending and a decline in graphic paper demand driven by digitalization [1][4] - However, increasing packaging requirements from e-commerce and steady demand from consumer-oriented markets like food, beverages, and healthcare are expected to support the industry [1][5] - Environmental awareness is enhancing the appeal of paper as a sustainable packaging alternative, acting as a significant growth driver [1] Major Trends - The transition to digital media has negatively impacted the graphic paper market, leading to a shift in production focus towards packaging and specialty paper [4] - Rising costs for transportation, chemicals, and fuel are pressing concerns, prompting companies to focus on pricing actions, cost reduction, and automation to enhance productivity [4] - Despite current challenges, the industry's exposure to consumer-focused markets ensures stable earnings growth, with global e-commerce revenues projected to reach $4.3 trillion by 2025 [5] M&A Activities - Increased demand for sustainable packaging is driving M&A activities in the industry, exemplified by the merger of Smurfit Kappa and WestRock to form Smurfit Westrock [6] - International Paper's acquisition of DS Smith aims to strengthen its corrugated packaging business and enhance sustainable packaging solutions [6][18] Industry Performance - The Zacks Paper and Related Products industry has outperformed the S&P 500 and the Basic Materials sector over the past year, with a gain of 14.2% compared to a 15.7% decline in the sector [10] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 8.49X, lower than the S&P 500's 12.88X and the Basic Materials sector's 7.01X [12] Company Highlights - Suzano inaugurated the world's largest single-line pulp mill, increasing its pulp production capacity by 24% to 13.5 million tons per year, leading to record sales of 12.3 million tons in 2024 [15][16] - The Zacks Consensus Estimate for Suzano's 2025 earnings has increased by 26% in the past 90 days, indicating a year-over-year growth of around 304% [16] - International Paper's acquisition of DS Smith is expected to yield $600-$700 million in pre-tax cash synergies by 2027, with projected net sales of $26-$28 billion and adjusted EBITDA of $5.5-$6 billion by 2027 [18]

Core Viewpoint - International Paper, a leader in sustainable packaging solutions, is set to release its first-quarter earnings on April 30, 2025, before the market opens [1]. Group 1: Earnings Release Information - The earnings release will be followed by a webcast discussing the earnings and current market conditions, starting at 10 a.m. ET [2]. - Interested parties can access the webcast through the company's website and a replay will be available approximately two hours after the call [2]. Group 2: Participation Details - Participants wishing to join the webcast via teleconference can dial specific numbers and should connect by 9:45 a.m. ET [3]. - An audio-only replay will be available for ninety days post-call, with specific dial-in instructions provided [3]. Group 3: Company Overview - International Paper is headquartered in Memphis, Tennessee, and operates in over 30 countries, employing more than 65,000 team members [4]. - The company reported net sales of $18.6 billion for 2024 and acquired DS Smith in 2025, enhancing its position in the North American and EMEA markets [4].

Group 1 - International Paper's shares increased over 6% following a positive investor day presentation and outlook despite weaker industrial activity impacting near-term results [1] - The company's stock performance reflects a broader trend of gaining investor confidence based on its strategic outlook [1] Group 2 - The article does not provide specific financial metrics or projections related to International Paper's future performance [1]

Core Viewpoint - International Paper Company (IP) aims for significant growth through strategic initiatives and updated financial targets for 2025 and 2027, focusing on operational optimization and market expansion [1][6]. Financial Targets for 2025 - The company targets revenues of approximately $27 billion in 2025, reflecting a 45% increase from $18.6 billion in 2024 [2]. - Adjusted total EBITDA is projected to be between $3.5 billion and $4.0 billion for 2025, compared to $1.99 billion in 2024 [4]. - Cash flow from operating activities is expected to range from $2 billion to $2.2 billion, with free cash flow anticipated between $0.1 billion and $0.3 billion [5]. Financial Projections for 2027 - For 2027, net sales are projected to be between $26 billion and $28 billion, indicating a compound annual growth rate (CAGR) of 13.2% from 2024 [6]. - Adjusted EBITDA is expected to be between $5.5 billion and $6 billion, suggesting a CAGR of 42.5% over the 2024-2027 period [7]. - Free cash flow guidance for 2027 is set at $2 billion to $2.5 billion, representing a CAGR of 43.8% compared to 2024 [8]. Market Position and Growth Drivers - International Paper is positioned to leverage strong market fundamentals in North America and EMEA, with a total addressable market (TAM) of approximately $50 billion and $40 billion, respectively [9]. - The company anticipates outperforming market growth due to trends such as the rise of e-commerce, demand for sustainable packaging, and the shift from plastic to paper-based solutions [10]. Synergies from DS Smith Acquisition - The expected pre-tax cash synergies from the DS Smith acquisition have been updated to a range of $600 million to $700 million, up from $514 million [12]. - The acquisition is expected to enhance customer value through improved offerings and greater geographic reach [13]. Stock Performance - International Paper's shares have increased by 42.8% over the past year, significantly outperforming the industry average growth of 8.8% [14].

Core Viewpoint - International Paper is hosting an Investor Day to discuss strategic plans, the DS Smith acquisition, and financial targets [1]. Group 1: Event Details - The Investor Day is taking place in New York City on March 25, 2025, at 9:00 AM ET [1]. - The event will feature presentations, panel discussions, and a Q&A session with CEO Andy Silvernail and other executive management [1]. Group 2: Company Overview - International Paper is a global leader in sustainable packaging solutions, headquartered in Memphis, Tennessee, with operations in over 30 countries [3]. - The company employs more than 65,000 team members and reported net sales of $18.6 billion for 2024 [3]. - In 2025, International Paper acquired DS Smith, enhancing its position in the North American and EMEA markets [3].

Group 1 - Tim Nicholls has been appointed as Executive Vice President and President of DS Smith, bringing over 30 years of industry experience, including previous roles as CFO of International Paper [1] - Nicholls has led the integration planning for the combination with DS Smith and has served as the interim leader of the combined business in EMEA since the transaction's closure [1] - Lance Loeffler will join International Paper as Senior Vice President and CFO, with over 25 years of experience in finance and business leadership roles [3] Group 2 - International Paper is a global leader in sustainable packaging solutions, headquartered in Memphis, Tennessee, with operations in over 30 countries and employing more than 65,000 team members [4] - The company reported net sales of $18.6 billion for 2024 and acquired DS Smith in 2025, enhancing its position in the North American and EMEA markets [4]