Smurfit WestRock plc(SW) - 2025 Q2 - Quarterly Results

Financial Highlights 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] - On July 2, Fitch upgraded the company's long-term issuer rating to BBB+ with a stable outlook[11] Management Commentary 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 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] - 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] Regional Performance 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] Business Outlook & Dividend 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] - 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] Consolidated Financial Statements 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) 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 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 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 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 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] Reconciliation of Adjusted EBITDA 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 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 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] - Smurfit Westrock is described as a leading global provider of paper-based packaging solutions, with approximately 100,000 employees across 40 countries[19]