WestRock(WRK) - 2022 Q4 - Annual Report

Sales Performance - Sales of corrugated packaging products accounted for 42.9% of net sales in fiscal 2022[19] - Sales of consumer packaging products accounted for 23.2% of net sales in fiscal 2022[21] - Sales of global paper products accounted for 27.9% of net sales in fiscal 2022[22] - Sales in the Distribution segment accounted for 6.6% of net sales in fiscal 2022[24] - In fiscal 2022, non-U.S. operations accounted for 18.3% of net sales, consistent with 2021, and slightly up from 17.5% in 2020[89] Sustainability and Environmental Compliance - Approximately 65% of fiber sourcing is from virgin fiber and 35% from recycled fiber[27] - The company estimates approximately $36 million in capital expenditures for environmental compliance in fiscal 2023[45] - The company is one of the largest recyclers in the paper industry, emphasizing sustainability[48] - More than 95% of the company's fiber-based manufacturing facilities are certified to SFI®, PEFC®, and FSC® standards[49] - The company aims to reduce Scope 1 and Scope 2 GHG emissions per ton of production by 20% from a 2015 baseline by 2025, having achieved a 15% reduction as of September 30, 2021[53] - A science-based target (SBT) has been set to reduce absolute Scope 1 and 2 GHG emissions by 27.5% by 2030 from a 2019 baseline[54] - The company plans to invest over $160 million through 2030 to achieve its SBT[55] - Approximately 7 million tons of paper and packaging were diverted from landfills through recycling operations in fiscal 2022[50] Employee and Workforce Diversity - As of September 30, 2022, the company employed approximately 50,500 people, with 78% located in the U.S. and Canada[69] - 22% of the global workforce is comprised of women, and 35% of the U.S. workforce consists of people of color[75] - The company has established cross-functional groups to develop and implement its sustainability strategy[52] - The company has over 8,500 online courses available for employee development, focusing on technical and operational skills[84] - In fiscal 2022, the company expanded relationships with historically black colleges and universities and established a multi-year scholarship program[85] - The total rewards program includes competitive compensation and comprehensive benefits to support employee growth and well-being[86] - The company aims to create a 100% safe work environment, with a focus on reducing life-changing events through targeted safety programs[40] - Approximately 55% of hourly employees in the U.S. and Canada are covered by collective bargaining agreements, with 32% of those agreements expiring within one year[69] - The company has a master agreement ratified by the United Steelworkers Union covering approximately 8,800 employees across 62 U.S. operating locations[71] - The company has implemented a multi-year plan to enhance workforce diversity and inclusion, impacting approximately 100 senior leaders in fiscal 2022[76] - Annual pay equity analyses are conducted in the U.S., Great Britain, and France to address pay disparities among different races, genders, and ages[79] - In fiscal 2022, 62% of hourly and 81% of salaried workforce participated in workshops focused on unconscious bias[77] Operational Challenges - Energy costs increased significantly in fiscal 2022 compared to fiscal 2021[29] - Higher freight costs and distribution delays were experienced in both fiscal 2022 and 2021[31] - The company is exposed to risks related to international sales and operations, including macroeconomic uncertainties and supply chain disruptions[93] - The company competes in a highly competitive global marketplace, with no single company dominating its industry segments[35] - Forward-looking statements indicate potential risks related to supply chain disruptions, economic conditions, and competition, impacting future performance[93] - The company is currently engaged in a labor dispute at its Mahrt mill, but has implemented a contingency plan to continue operations[70] Safety and Performance Metrics - In fiscal 2022, the company reported year-over-year improvements in safety metrics, although lost workdays and recordable incident rates slightly increased[80]