Smurfit Westrock (SW) came out with quarterly earnings of $0.45 per share, missing the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $1,213 million with an adjusted EBITDA margin of 15.3% for the second quarter, showing mid-single-digit growth compared to the previous year [7][18] - Net sales exceeded $7,900 million, with adjusted free cash flow of $387 million, marking a significant improvement from the combined performance of the previous year [18][19] - Fitch upgraded the company's long-term debt rating to BBB+ with a stable outlook, reflecting confidence in the business's quality and long-term prospects [9][24] Business Line Data and Key Metrics Changes - North American operations generated net sales of $4,800 million with adjusted EBITDA of $752 million and an adjusted EBITDA margin of 15.8%, showing significant margin improvement due to higher selling prices and synergy benefits [19][20] - EMEA and APAC segments reported net sales of $2,800 million with adjusted EBITDA of $372 million and an adjusted EBITDA margin of 13.4%, despite a challenging market environment [21] - Latin American operations achieved net sales of $505 million with an adjusted EBITDA of $123 million and an adjusted EBITDA margin of over 23%, indicating strong demand growth in certain countries [22] Market Data and Key Metrics Changes - In North America, box volumes decreased by 4.5% year-over-year, while third-party paper sales were down 2% [20] - EMEA operations faced headwinds from energy costs and labor, with corrugated box volumes remaining flat [21][72] - Latin America showed a nascent improvement in demand, particularly in Argentina, Colombia, and Chile, despite a 1.9% decline in corrugated box volumes [22] Company Strategy and Development Direction - The company aims to optimize its operations by eliminating non-strategic assets and has announced the permanent closure of 600,000 tonnes of capacity [11][15] - A synergy program is on track to deliver $400 million in full-year run-rate synergies by 2025, with additional opportunities identified [25] - The company emphasizes a culture of empowerment and operational excellence, focusing on customer service and profitability [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the North American business's recovery and sees significant opportunities for improvement in corrugated operations [27][39] - The European market is expected to face challenges, but management believes they are close to a low point, with potential for pricing improvements in the second half of the year [39][41] - Latin America is viewed as a high-growth potential region, with management committed to driving long-term success [22][28] Other Important Information - The company has invested approximately $1 billion in its system, with a focus on both paper and converting assets [15] - A quarterly dividend of $0.04 per share has been declared, reflecting confidence in the company's cash-generating ability [23] Q&A Session Summary Question: Can you provide details on the loss-making contracts in North America? - Management indicated that about 40% of plants have moved from loss to profit, with a systematic process in place to address unprofitable contracts [34][39] Question: What is the outlook for Europe given the pricing weakness? - Management believes that current pricing levels are unsustainable for many players, indicating potential for further closures in the market [41][42] Question: How is the company addressing consumer confidence and demand? - Management noted that while volumes in North America were down, they expect a seasonal pickup in demand in the latter half of the year [56][77] Question: What are the assumptions for the second half of the year regarding volumes? - Management anticipates flat volumes for the second half compared to the first half, with no significant deterioration expected [95] Question: Can you elaborate on the synergy program and its impact? - The synergy program is on track to deliver $400 million in run-rate synergies, with management confident in achieving this target [25][106]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $1,213 million with an adjusted EBITDA margin of 15.3% for the second quarter [5][15] - Net sales exceeded $7,900 million, showing mid-single-digit growth in adjusted EBITDA compared to the same period last year [15][16] - Strong adjusted free cash flow of $387 million was noted, reflecting improved financial performance [15] Business Line Data and Key Metrics Changes - North America segment achieved net sales of $4,800 million with adjusted EBITDA of $752 million and an adjusted EBITDA margin of 15.8%, showing significant margin improvement due to higher selling prices and operational efficiencies [16][18] - EMEA and APAC segment reported net sales of $2,800 million with adjusted EBITDA of $372 million and an adjusted EBITDA margin of 13.4%, despite a challenging market [19] - Latin America segment delivered net sales of $505 million with an outstanding adjusted EBITDA margin of over 23%, indicating strong demand growth in certain countries [20] Market Data and Key Metrics Changes - North American box volumes decreased by 4.5% on a same-day basis, aligning with the company's value-over-volume strategy [18] - EMEA and APAC faced headwinds from energy and labor costs, with flat corrugated box volumes on a same-day basis [19] - Latin America showed a nascent improvement in demand, particularly in Argentina, Colombia, and Chile, despite a 1.9% decline in box volumes [20] Company Strategy and Development Direction - The company is focused on optimizing its operations and has identified at least $400 million in synergies from the integration of Smurfit Kappa and WestRock [7][23] - A disciplined investment approach is being maintained, with $1 billion already invested in system improvements [12] - The company aims to be the go-to innovative sustainable packaging partner, emphasizing value, quality, and service [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the North American business, noting significant improvements and a strong operational focus [25] - The European market is expected to recover, with management believing they are close to a low point despite current pricing challenges [25][39] - Latin America is viewed as a high-growth potential region, with ongoing pricing initiatives to offset negative currency impacts [20][26] Other Important Information - Fitch upgraded the company's long-term debt rating to BBB+ with a stable outlook, reflecting confidence in its business quality and long-term prospects [6][22] - The company declared a quarterly dividend of $0.04 per share, demonstrating confidence in its cash-generative ability [21] Q&A Session Summary Question: Details on loss-making contracts in North America - Management indicated that approximately 40% of plants have moved from loss to profit, with ongoing efforts to improve profitability [32][34] Question: Current status of loss-making contracts - About 60% of loss-making contracts remain, with expectations that many will transition to profitability over the next year [37][38] Question: Impact of tariffs and consumer confidence - Management noted that tariffs have been largely absorbed by consumers, with no significant changes expected in import/export flows [49][51] Question: Future demand expectations - Management anticipates a seasonal pickup in demand but is not baking in significant improvements for the second half of the year [72][73] Question: Clarification on volume assumptions - The company expects flat volumes in the second half compared to the first half, with no significant deterioration anticipated [90]

Financial Performance - Smurfit Westrock reported Net Sales of $7.940 billion[27] - Adjusted EBITDA reached $1.213 billion[9, 27] - Adjusted EBITDA Margin was 15.3%[9, 27] - Adjusted Free Cash Flow amounted to $387 million[27] Segment Performance - North America's Net Sales totaled $4.8 billion with an Adjusted EBITDA of $752 million and an Adjusted EBITDA Margin of 15.8%[29] - EMEA & APAC achieved Net Sales of $2.8 billion with an Adjusted EBITDA of $372 million and an Adjusted EBITDA Margin of 13.4%[29] - LATAM's Net Sales were $0.5 billion with an Adjusted EBITDA of $123 million and an outstanding Adjusted EBITDA Margin of 23.7%[29] Capital Allocation and Investments - Capital expenditure for 2025 is projected to be between $2.2 billion and $2.4 billion[30, 45] - Approximately $1 billion was spent across the system, including over $450 million invested in the paper system and over $450 million in the packaging business[23] Synergies and Outlook - The company anticipates a $400 million contribution to Adjusted EBITDA from synergies, with full run rate exiting 2025[37] - Approximately $350 million is expected to be captured in Adjusted EBITDA in 2025, with about $180 million already achieved in H1 2025[37] - Q3 2025 Adjusted EBITDA is guided to be approximately $1.3 billion, and FY 2025 Adjusted EBITDA is expected to be between $5.0 billion and $5.2 billion[37, 45]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a net loss in Q2 2025 primarily due to restructuring costs, despite strong growth in net sales and adjusted EBITDA, alongside a declared dividend and credit rating upgrade Q2 2025 Key Financial Metrics (in millions) | | 2025 | 2024 | | :--- | :--- | :--- | | **Net Sales** | $7,940 | $2,969 | | **Net (Loss) Income** | $(26) | $132 | | **Net (Loss) Income Margin** | (0.3%) | 4.4% | | **Adjusted EBITDA** | $1,213 | $480 | | **Adjusted EBITDA Margin** | 15.3% | 16.2% | | **Net Cash Provided by Operating Activities** | $829 | $340 | | **Adjusted Free Cash Flow** | $387 | $189 | - A **quarterly dividend** of **$0.4308 per ordinary share** was declared[11](index=11&type=chunk) - On July 2, Fitch upgraded the company's **long-term issuer rating** to **BBB+ with a stable outlook**[11](index=11&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Tony Smurfit highlighted strong Q2 performance driven by North American and Latin American operations, attributing the net loss to restructuring costs, and provided positive guidance for future performance [Overall Performance](index=1&type=section&id=Overall%20Performance) Q2 performance aligned with Adjusted EBITDA guidance, with the reported net loss directly resulting from significant restructuring costs - The **Q2 performance** was **strong** and in line with **Adjusted EBITDA guidance**, driven by **improvements** in **North America** and **Latin America**, while being somewhat offset by **resilient performance** in **EMEA and APAC**[3](index=3&type=chunk) - A **Net Loss** of **$26 million** was recorded for the quarter, primarily due to **$280 million** in **costs** associated with previously announced closures and other **restructuring actions**[4](index=4&type=chunk) [Regional Performance](index=1&type=section&id=Regional%20Performance) North America showed significant improvement, EMEA and APAC delivered resilient performance, and Latin America continued its strong performance, contributing to overall Adjusted EBITDA Q2 2025 Adjusted EBITDA by Region (in millions) | Region | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | | **North America** | $752 | 15.8% | | **EMEA and APAC** | $372 | 13.4% | | **Latin America** | $123 | 23.7% | - Management sees **extensive opportunities** across all regions, including continued **improvement** in **North America**, leveraging **strong market positions** in **EMEA and APAC**, and pursuing growth in **Latin America**[8](index=8&type=chunk) [Business Outlook & Dividend](index=3&type=section&id=Business%20Outlook%20%26%20Dividend) The company projects strong Q3 Adjusted EBITDA and maintains its full-year guidance, with the Board approving a quarterly dividend - The company projects **Q3 Adjusted EBITDA** to be approximately **$1.3 billion** and maintains its **full-year Adjusted EBITDA estimate** between **$5.0 billion** and **$5.2 billion**[12](index=12&type=chunk) - The Board approved a **quarterly dividend** of **$0.4308 per ordinary share**, payable on September 18, 2025, to shareholders of record on August 15, 2025[12](index=12&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail a Q2 2025 net loss driven by restructuring costs, growth in total assets, and strong net cash from operating activities [Statements of Operations (Income Statement)](index=6&type=section&id=Statements%20of%20Operations%20%28Income%20Statement%29) Q2 2025 recorded net sales of $7,940 million but a net loss of $26 million, primarily driven by $280 million in impairment and restructuring costs Q2 2025 vs Q2 2024 Statement of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net sales** | $7,940 | $2,969 | | **Gross profit** | $1,515 | $693 | | **Impairment and restructuring costs** | $(280) | $0 | | **Operating profit** | $251 | $244 | | **Net (loss) income** | $(26) | $132 | | **Diluted (loss) earnings per share** | $(0.05) | $0.51 | [Segment Information](index=7&type=section&id=Segment%20Information) North America was the largest contributor to net sales and Adjusted EBITDA, while LATAM achieved the highest Adjusted EBITDA margin, reflecting varied regional performance Q2 2025 Financials by Segment (in millions) | Segment | Net Sales (aggregate) | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | :--- | | **North America** | $4,755 | $752 | 15.8% | | **Europe, MEA and APAC** | $2,778 | $372 | 13.4% | | **LATAM** | $518 | $123 | 23.7% | | **Total** | **$8,051** | **$1,247** | | [Balance Sheets](index=8&type=section&id=Balance%20Sheets) As of June 30, 2025, total assets increased to $45.7 billion, accompanied by growth in total liabilities and shareholders' equity from year-end 2024 Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $10,979 | $10,055 | | **Total assets** | $45,746 | $43,759 | | **Total current liabilities** | $7,591 | $7,333 | | **Non-current debt** | $13,329 | $12,542 | | **Total liabilities** | $27,422 | $26,372 | | **Total shareholders' equity** | $18,297 | $17,360 | [Statements of Cash Flows](index=9&type=section&id=Statements%20of%20Cash%20Flows) Q2 2025 saw strong net cash provided by operating activities of $829 million, significantly increasing from the prior year, leading to positive cash flow before financing activities after capital expenditures Q2 Cash Flow Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $829 | $340 | | **Capital expenditures** | $(522) | $(177) | | **Net cash used for investing activities** | $(520) | $(203) | | **Net cash (used for) provided by financing activities** | $(355) | $2,382 | | **(Decrease) increase in cash** | $(19) | $2,514 | [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines and reconciles key non-GAAP metrics like Adjusted EBITDA and Adjusted Free Cash Flow, adjusted for non-recurring items to provide a clearer view of operational performance - Management uses **non-GAAP measures** like **Adjusted EBITDA**, **Adjusted EBITDA Margin**, and **Adjusted Free Cash Flow** to make financial, operating, and planning decisions and to evaluate company performance[28](index=28&type=chunk) [Reconciliation of Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $1,213 million, reconciled from a net loss by adding back depreciation, impairment, restructuring costs, and net interest expense Reconciliation of Net (Loss) Income to Adjusted EBITDA for Q2 2025 (in millions) | Description | Amount | | :--- | :--- | | **Net (loss) income** | **$(26)** | | Income tax expense | $84 | | Depreciation, depletion and amortization | $613 | | Impairment and restructuring costs | $280 | | Transaction and integration-related expenses | $21 | | Interest expense, net | $182 | | Other adjustments | $59 | | **Adjusted EBITDA** | **$1,213** | [Reconciliation of Adjusted Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Free%20Cash%20Flow) Adjusted Free Cash Flow for Q2 2025 was $387 million, calculated from net cash from operating activities by adjusting for capital expenditures and specific cash costs Reconciliation to Adjusted Free Cash Flow for Q2 2025 (in millions) | Description | Amount | | :--- | :--- | | **Net cash provided by operating activities** | **$829** | | Capital expenditures | $(522) | | **Free Cash Flow** | **$307** | | Transaction and integration costs | $21 | | Restructuring costs | $68 | | Tax on above items | $(9) | | **Adjusted Free Cash Flow** | **$387** | [Other Information](index=4&type=section&id=Other%20Information) This section includes standard legal disclaimers regarding forward-looking statements and describes Smurfit Westrock as a leading global provider of paper-based packaging solutions - The report includes a '**Forward-Looking Statements**' section detailing numerous **risks and uncertainties** that could cause actual results to differ from expectations, including **economic conditions**, **integration risks**, and **competitive pressures**[17](index=17&type=chunk) - **Smurfit Westrock** is described as a leading global provider of **paper-based packaging solutions**, with approximately **100,000 employees** across **40 countries**[19](index=19&type=chunk)

Core Insights - Smurfit Westrock PLC (SW) is set to report its second-quarter 2025 results on July 30, 2025, before market open [1] - The company was formed by the merger of Smurfit Kappa and WestRock on July 5, 2024, and began reporting combined results from Q3 2024 [1] Financial Estimates - The Zacks Consensus Estimate for SW's Q2 2025 revenues is $7.92 billion, reflecting a 3.5% growth from Q1 2025 [2] - The earnings per share (EPS) estimate is 57 cents, indicating a decline from 73 cents in the previous quarter [2] - The consensus for earnings has increased by 9.5% over the past 60 days [2] Segment Performance - The Europe, MEA, and APAC segment is projected to generate revenues of $2.83 billion in Q2 2025, up from $2.58 billion in Q1 2025 [5] - The North America segment's revenue estimate is $4.62 billion, down from $4.67 billion in Q1 2025, with an adjusted EBITDA estimate of $753 million, a decrease from $785 million [6] - The LATAM segment's revenue estimate is $497 million, down from $513 million, while adjusted EBITDA is expected to rise to $124 million from $115 million [7] Market Dynamics - Demand for corrugated packaging and containerboard remains stable, driven by essential items like food and beverages, as well as e-commerce growth [4] - Increased costs for recovered fiber, labor, and distribution, particularly in Europe, are anticipated to pressure margins [4] - The company expects an adjusted EBITDA of $1.2 billion for Q2 2025 [4] Stock Performance - Smurfit Westrock's shares have increased by 3.8% over the past year, compared to the industry's growth of 28.8% [9]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Smurfit Westrock despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Smurfit Westrock is expected to report quarterly earnings of $0.57 per share, reflecting a year-over-year decrease of 17.4% [3]. - Revenue projections stand at $7.98 billion, indicating a significant increase of 168.8% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.32% over the past 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Smurfit Westrock is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.24%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with positive readings being more reliable [9][10]. - Smurfit Westrock currently holds a Zacks Rank of 3, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Smurfit Westrock exceeded earnings expectations with a surprise of +12.31%, having reported earnings of $0.73 against an expectation of $0.65 [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Conclusion - Smurfit Westrock does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when evaluating the stock ahead of the earnings release [17].

Group 1 - Sodexo is a global leader in sustainable food and valued experiences, founded in 1966 in Marseille by Pierre Bellon [2] - The company operates in two main sectors: Food and Facilities Management Services, aiming to improve quality of life and contribute to social and environmental progress [2] - As of June 30, 2025, Sodexo's market capitalization was €7.7 billion [7] Group 2 - For the first semester of 2025, Sodexo traded 412,920 shares for €26,508,699 and sold 353,779 shares for €22,872,331 [1] - As of December 31, 2024, the liquidity account had bought 359,601 shares for €28,862,832 and sold 363,244 shares for €29,334,581 [1] - The company had 423,000 employees as of August 31, 2024, and served 80 million consumers daily [7]

Company Overview - Sodexo, founded in 1966 in Marseille by Pierre Bellon, is a global leader in sustainable food and valued experiences across various life moments [3] - The company operates with a dual focus on improving the quality of life for employees and consumers while contributing to economic, social, and environmental progress [3] - Sodexo is recognized for its independence, family shareholding, and responsible business model, and is included in several indices such as CAC Next 20 and FTSE 4 Good [3] Key Financial Figures - For fiscal 2024, Sodexo reported consolidated revenues of 23.8 billion euros [6] - As of August 31, 2024, the company employed 423,000 individuals, making it the largest private employer based in France [6] - Sodexo operates in 45 countries and serves approximately 80 million consumers daily [6] - The market capitalization of Sodexo was 7.7 billion euros as of June 30, 2025 [6] Voting Rights Information - All shares of Sodexo have the same voting rights, except for treasury shares which do not have voting rights and registered shares held for more than four years, which have double voting rights [1] - The theoretical voting rights include shares with single or double voting rights, accounting for treasury shares that are temporarily deprived of voting rights [2]

Core Insights - Sodexo reported consolidated revenues of 6.1 billion euros for Q3 Fiscal 2025, reflecting a year-on-year increase of 0.8%, with organic revenue growth of 3.0% [5][16] - The company expects Fiscal 2025 organic revenue growth to be at the lower end of the guidance range, between 3% and 4% [4][12] - The CEO emphasized the importance of disciplined execution and strengthening client relationships to achieve sustainable growth [2] Revenue Breakdown - **North America**: Revenues reached 2.9 billion euros, with organic growth of 1.2%. This growth was driven by pricing momentum and new business, despite contract exits impacting overall performance [5][17] - **Europe**: Revenues totaled 2.2 billion euros, showing an organic growth of 3.3%, supported by strong performance in Healthcare & Seniors and Sodexo Live! [5][23] - **Rest of the World**: Revenues amounted to 1.1 billion euros, with organic growth of 7.5%, primarily driven by strong performance in India, Brazil, and Australia [5][26] Financial Position and Activities - Sodexo successfully issued U.S. dollar notes totaling $1.1 billion to fund the repurchase of existing senior notes [5] - The company completed the acquisition of Agap'pro, enhancing its procurement capabilities in the hospitality sector [5] - Sodexo received an A- score from CDP for climate change disclosure, indicating strong leadership in environmental responsibility [5] Currency Impact - The company experienced a negative currency impact of 2.1% in Q3, mainly due to the depreciation of the U.S. dollar and several Latin American currencies [5][32] Outlook - The company anticipates landing towards the lower end of the range for both organic growth and underlying operating margin for Fiscal 2025 [7]