PresentationGeorge StaphosBofA Securities, Research Division Welcome back, everybody. I'm George Staphos with BofA on Paper and Packaging. Thrilled to have Ball Corporation back to our conference. Ball, again, was one of the very first companies we've had at a conference, we were back in the 1990s and honored that CEO, Ron Lewis; and CFO, Dan Rabbitt are here from the company. Ron became Chief Executive Officer of the company in 2025 after joining Ball in 2019. And Ron, prior to that, had an extensive caree ...

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Financial Data and Key Metrics Changes - The company reported an Adjusted EBITDA of $1.172 billion for the fourth quarter and $4.939 billion for the full year, marking the largest outturn by any packaging company globally [5] - Adjusted free cash flow for the quarter was $679 million, totaling over $1.5 billion for the year, highlighting a focus on cash generation [5] - The adjusted margin for the quarter was 15.5%, with a similar figure for the year, providing a strong foundation for future success [6] Business Line Data and Key Metrics Changes - North America reported an adjusted EBITDA of $651 million with a margin of 14.7%, showing a modest year-on-year decline [6] - European margins expanded to over 16% with an adjusted EBITDA of $438 million [6] - Latin America demonstrated strong performance with margins exceeding 24% and an adjusted EBITDA of over $130 million [6] Market Data and Key Metrics Changes - North American volumes saw a sharp decline, while European volumes remained stable, and Latin America experienced stronger growth [7] - The company has successfully reduced leverage to 2.6 times, moving towards a target of 2 times, reflecting improved balance sheet strength [8] Company Strategy and Development Direction - The company is focused on portfolio optimization, including the closure of the SBS machine in La Tuque, Quebec, as part of its strategic initiatives [4] - A medium-term plan has been developed with input from all operating units, aiming for significant profit growth in North America and continued strong performance in EMEA [7][79] - The goal is to achieve an adjusted EBITDA growth to $7 billion by the end of 2030, with a CAGR of 7% and margin expansion of over 300 basis points [79] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment but expressed confidence in the company's performance and future prospects [13] - The outlook for the first quarter of 2026 is an Adjusted EBITDA between $1.1 billion and $1.2 billion, with a full-year expectation of $5 billion to $5.3 billion [15] - The company anticipates a better industry operating environment in the latter half of the year, driven by new business development and improving economic conditions [15] Other Important Information - The company has been recognized by Forbes, Fortune, and Time Magazine as a leader in the industry, reflecting its strong performance and operational excellence [13] - A progressive dividend policy continues, with a 5% increase noted, emphasizing the importance of returning capital to shareholders [8] Q&A Session Summary Question: Can you talk about the pricing outlook and volume expectations for the year? - Management indicated that pricing has not been baked into forecasts, and they expect volumes to normalize in the latter half of the year, influenced by economic stimuli [17][20] Question: What is the status of lower loss-making contracts and the pipeline? - Management expressed satisfaction with the progress in phasing out underperforming contracts and indicated a robust pipeline for new business opportunities [22][25] Question: How will the company manage downtime and asset utilization? - The company reported $220 million in downtime for the year, with optimal asset utilization rates targeted at mid-90s% for North America and above 92% for Europe [69] Question: What are the expectations for the North American consumer business? - The North American consumer business is performing well, with strong potential for profitability and cash generation, supported by recent large contracts [56][58]

2025 Fourth Quarter and Full-Year Results February 11, 2026 Paper | Packaging | Solutions Smurfit Westrock Q4 | 2025 Results | 2 Forward Looking Statements The presentation includes certain "forward-looking statements" (including within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) regarding, among other things, the plans, strategies, outcomes, outlooks, and prospects, both business and financial, of Smurfit Westrock ...

Group 1 - Smurfit Westrock will permanently cease operations of a paper machine at its La Tuque mill in Quebec due to ongoing difficulties with scale and costs, producing 127,000 tons per annum of solid bleached sulfate (SBS) [1] - The company will also close its extrusion facility in Pointe-aux-Trembles, where material from the La Tuque machine is processed [1] - The closures are expected to result in the loss of approximately 30 jobs at La Tuque and 60 roles at Pointe-aux-Trembles, with support measures for affected staff [2] Group 2 - Smurfit Westrock North America CEO Laurent Sellier stated that the decision was necessary to align with market realities and strengthen the company's long-term position [3] - The company returned to profit in Q3 2025, reporting a net income of $245 million, a turnaround from a $150 million loss in the previous year [3] - Net sales for the quarter reached $8 billion, an increase from $7.67 billion in Q3 2024, although the full-year outlook was revised downward due to scheduled downtime [4]

Forward-Looking Statements CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Any statements of the Company's expectations in these slides, including, but not limited to, statements regarding full-year 2026 capital expenditures, free cash flow ("FCF") and Adj. Cash Flow, 2026 Net Sales, volumes, Adjusted EBITDA, Adjusted EPS, capital spending, interest expense, cash taxes, working capital and pension expense, effective tax rate, and depreciation and amortization, year-end 2026 Net Leverage, and post ...

Core Insights - International Paper Co is a leading global producer of renewable fiber-based packaging, pulp, and paper products, operating in over 24 countries and facing competition from companies like WestRock and Packaging Corporation of America [1] Company Developments - On January 30, 2026, CEO Silvernail Andrew K purchased 50,000 shares of the company's common stock at approximately $39.98 per share, indicating confidence in the company's future prospects [2] - AE Wealth Management LLC increased its stake in International Paper by 8.5% during the third quarter, now holding 332,310 shares valued at around $15.4 million, representing 0.06% of the company [3] - AlphaQuest LLC significantly increased its holdings by 63,400% in the second quarter, now owning 635 shares valued at $30,000, while Migdal Insurance and Financial Holdings Ltd. acquired a new stake valued at $33,000, indicating growing institutional interest [4] Stock Performance - International Paper's stock is currently priced at $40.32, reflecting a 3.38% increase, with fluctuations between $38.61 and $40.65 today, and a 52-week high of $58.11 and a low of $35.56 [5] - The company's market capitalization is approximately $21.29 billion, with a trading volume of 9.83 million shares on the NYSE [5]

Core Viewpoint - International Paper Company reported mixed earnings results and announced plans to split into two independent public companies, leading to a decline in stock price despite exceeding sales expectations [1][3]. Earnings Snapshot - The company reported a fourth-quarter loss of $0.08 per share, missing the analyst estimate of $0.24 per share - Sales reached $6.01 billion, surpassing the consensus estimate of $5.93 billion [1]. Company Split - International Paper plans to split into two independent, publicly traded companies: one focusing on North American operations and the other on EMEA Packaging business - The new International Paper will combine legacy IP and DS Smith assets, while the EMEA Packaging business will consist of DS Smith and IP assets in Europe, the Middle East, and Africa - This strategic move aims to enhance focus on North American operations with a targeted capital allocation strategy [3][4]. Future Outlook - CEO Andy Silvernail indicated that the company experienced a 37% year-over-year adjusted EBITDA improvement in North America and anticipates $3.5-$3.7 billion of adjusted EBITDA for the full year 2026 - The company expects to deliver $740-$760 million in adjusted EBITDA for the first quarter of 2026 - The ongoing transformation investments are expected to build momentum towards forming two scaled, independent regional packaging solutions leaders [2].

Financial Data and Key Metrics Changes - The company achieved approximately 37% year-over-year adjusted EBITDA growth in 2025, with adjusted EBITDA for North America at $560 million for the fourth quarter of 2025 [28][34] - Full year 2025 net sales for the standalone IP business exceeded $15 billion, with approximately $2.3 billion of adjusted EBITDA expected to accelerate rapidly over the next 24 months [17][21] - The company expanded adjusted EBITDA margin by 230 basis points in 2025, despite facing $958 million of accelerated depreciation due to footprint optimization and higher depreciation related to the DS Smith acquisition [29][30] Business Line Data and Key Metrics Changes - North America saw significant progress with a run rate cost benefit of approximately $510 million, including $110 million related to footprint optimization in 2025 [28][29] - EMEA's standalone business is projected to have full year 2025 net sales of approximately $8.5 billion and adjusted EBITDA of around $800 million, with ongoing transformation expected to yield benefits in 2026 [21][24] Market Data and Key Metrics Changes - North America is characterized by a high degree of supply integration and steady demand growth, while EMEA has more localized dynamics with relatively higher demand growth [12][13] - The market remains soft but broadly stable in EMEA, with continued pressure on board pricing [43] Company Strategy and Development Direction - The company plans to create two publicly traded, scaled, regional packaging solution leaders in North America and EMEA, aiming to maximize long-term value for shareholders [6][11] - The 80/20 performance system will continue to guide the company's operations, focusing on simplifying, segmenting, resourcing, and growing to drive sustainable value creation [8][15] - The separation will allow each business to tailor its strategies to meet distinct customer expectations and regional opportunities [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2026, projecting enterprise net sales of $24.1 billion to $24.9 billion and adjusted EBITDA of $3.5 billion to $3.7 billion [47] - The company anticipates that the separation will enhance each business's ability to make organic and inorganic investments, further improving cost positions and customer experiences [22][24] Other Important Information - The company plans to invest approximately $400 million in EMEA throughout 2026 to support ongoing transformation and 80/20 implementation [28] - The separation is expected to be completed within 12-15 months, with the transaction structured as a spin-off of the EMEA Packaging business to shareholders [26][27] Q&A Session Summary Question: Can you provide assumptions behind the Free Cash Flow guidance of $300 million-$500 million? - The company confirmed that price is not included in the guidance and has issued a price letter to customers [51][52] Question: Will the spin-off provide an opportunity to review the dividend policy? - The company will maintain its current dividend policy through 2026 and will evaluate it in conjunction with shareholders post-spin [56][57] Question: Why is the separation process expected to take 12-15 months? - The timeline is due to the accounting complexities involved, although the company aims to expedite the process [68][70] Question: How confident is the company in achieving the projected growth in the second half of 2026? - Management expressed confidence based on actions already taken and the expected accumulation of benefits from ongoing initiatives [74][76] Question: What is the relative profitability of new volume wins compared to lost business? - The company indicated that new volume wins have been at quality levels consistent with market pricing discipline, contributing to expanding margins [86][88]

Financial Data and Key Metrics Changes - The company achieved approximately 37% year-over-year adjusted EBITDA growth in 2025, with adjusted EBITDA margin expanding by 230 basis points [28][29] - Full year 2025 net sales for the North American business exceeded $15 billion, with adjusted EBITDA of approximately $2.3 billion [17] - The EMEA Packaging business reported full year 2025 net sales of approximately $8.5 billion and adjusted EBITDA of around $800 million [21] Business Line Data and Key Metrics Changes - North America experienced significant progress with a run rate cost benefit of approximately $510 million, including $110 million related to footprint optimization in 2025 [28][29] - EMEA implemented 20 site closures affecting about 1,400 roles, with ongoing discussions for an additional 7 sites impacting 700 roles, expected to deliver run rate cost savings of over $160 million [44][45] Market Data and Key Metrics Changes - North America is characterized by a high degree of supply integration and steady demand growth, while EMEA has more localized dynamics with relatively higher demand growth [12][13] - The company expects to outperform the industry growth in North America by approximately 2% in 2026, with the market anticipated to grow flat to up 1% [36][104] Company Strategy and Development Direction - The company plans to create two publicly traded, scaled regional packaging solution leaders in North America and EMEA, enhancing focus on distinct regional opportunities [6][11] - The 80/20 performance system will continue to guide the company's operations, focusing on simplifying, segmenting, resourcing, and growing to maximize long-term value for shareholders [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2026, projecting enterprise net sales of $24.1 billion to $24.9 billion and adjusted EBITDA of $3.5 billion to $3.7 billion [47] - The company anticipates that the separation will enable both businesses to accelerate progress toward maximizing long-term profitable growth through greater speed, agility, and differentiation [11][49] Other Important Information - The separation of the EMEA Packaging business is expected to be completed within the next 12-15 months, with plans for the company to be listed on both the London and New York Stock Exchanges [26] - The company plans to invest approximately $400 million in EMEA throughout 2026 to fund ongoing transformation and 80/20 implementation [28] Q&A Session Summary Question: Can you provide assumptions behind the Free Cash Flow guidance of $300 million-$500 million? - The company confirmed that price is not included in the guidance and has issued a price letter to customers [51][52] Question: Will the spin-off provide an opportunity to review the dividend policy? - Management stated that the current dividend policy will be maintained through 2026, with a review process in conjunction with shareholders post-spin [56][57] Question: Why is the separation process expected to take 12-15 months? - The company explained that the timeline is due to the accounting complexities involved, although they aim to expedite the process [68][70] Question: How confident is the company in achieving the projected second half performance in 2026? - Management expressed confidence based on actions already taken and the expected accumulation of benefits from ongoing initiatives [74][76] Question: Can you discuss the relative profitability of new volume wins versus lost business? - Management indicated that the new volume wins in North America are of high quality and have been achieved without chasing bad business, maintaining pricing discipline [86][88]