Core Insights - International Paper's CEO Andy Silvernail will present at the Baird 2025 Global Industrial Conference on November 11, 2025, at 9:30 a.m. ET, followed by a Q&A session [1] - Interested parties can access the webcast on the company's website, with a replay available approximately three hours after the presentation [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 [3] - 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 [3] - A quarterly dividend of $0.4625 per share has been declared for the period from October 1, 2025, to December [4] - The company will release its third-quarter earnings on October 30, 2025, before the opening of the New York Stock Exchange [5]

Core Viewpoint - Smurfit Westrock Plc is facing significant challenges, including a decline in stock performance and a net loss in its latest earnings report, despite showing resilience in net sales and adjusted EBITDA growth [3][5][6]. Company Overview - Smurfit Westrock Plc is headquartered in Dublin, Ireland, and is a global provider of sustainable paper-based packaging solutions, manufacturing various products including containerboard and consumer packaging [1]. - The company has a market capitalization of approximately $22.6 billion, serving customers in over 40 countries across multiple sectors such as food, beverage, retail, e-commerce, and industrial [2]. Stock Performance - The stock has decreased more than 25.8% from its 52-week high of $56.99 in November 2024, while the S&P 500 Index has gained 8.4% during the same period [3]. - Over the past 52 weeks, Smurfit Westrock's stock has declined 11.6%, and year-to-date, it is down 21.5%, contrasting with the broader index's 15.4% increase in the past year [4]. Earnings Report - In the latest earnings report on July 30, the company reported a net loss of $26 million for Q2 2025, compared to a net profit of $132 million in the same quarter last year, largely due to $280 million in restructuring costs [5]. - Despite the loss, net sales reached $7.9 billion, a year-over-year increase of 167.4%, and adjusted EBITDA was $1.21 billion, up 152.7% year over year [6]. Future Outlook - Management expects adjusted EBITDA of approximately $1.3 billion for the next quarter and has maintained its full-year forecast between $5 billion and $5.2 billion, assuming stable market conditions [7]. - The company anticipates long-term support from increasing packaging needs driven by the growth of e-commerce and steady demand in food, beverage, and healthcare markets [7].

Group Performance Summary - The Grigeo Group AB achieved a consolidated sales turnover of EUR 116.7 million over the first six months of 2025, an increase of EUR 12.4 million compared to the same period in 2024, representing a 12% growth [1][4] - The Group reported a profit before taxes of EUR 9.7 million, which is EUR 2.3 million less than the same period in 2024, indicating a 19% decline [2][4] - EBITDA for the Group decreased by EUR 0.9 million to EUR 15.8 million, reflecting a 5% decrease compared to the first half of 2024 [2][4] Management Commentary - The CEO, T. Jozonis, expressed satisfaction with the stability and growth in sales, despite challenges such as a slowed economy and fluctuating raw material prices [3] - The Group is focused on strengthening its market positions in the Baltic States, Scandinavia, and Western Europe, with over EUR 106 million invested in the hygiene paper segment [3]

Q2 2025 Financial Performance - Sales increased organically by 2% year-over-year, driven by volume improvements in SAS and favorable currency effects[5, 6] - Adjusted EBITDA increased by 1% compared to the prior year period[5, 6] - Cash from operating activities was $57.6 million, and free cash flow was $48.9 million, up 25% and 33% respectively[6] - GAAP net loss was $9.5 million, with a GAAP EPS of $(0.18)[5, 6] - Adjusted EPS was $0.33, slightly down from $0.34 in the prior year[5] Segment Results - FAM sales decreased by 1% year-over-year, with adjusted EBITDA down by 4%[11] - SAS organic sales increased by 5% year-over-year, but adjusted EBITDA decreased by 2%[11, 12] Forward Outlook and Strategic Initiatives - Expect Q3 adjusted EBITDA to increase 5-10% year-over-year, with favorable cash flow generation[6] - Target $15 million - $20 million in additional cost reductions in 2025[14] - Target $40 million in capital expenditures for 2025, a reduction from $55 million in 2024[14] - Target $20 million - $30 million in inventory reduction by year-end 2025[14]

Core Insights - International Paper reported Q2 2025 results, highlighting the impact of the DS Smith acquisition, with GAAP revenue reaching $6.8 billion, exceeding analyst expectations [1][2] - Non-GAAP EPS of $0.20 fell short of the $0.39 estimate, reflecting challenges from higher costs and integration expenses [1][2] - Net earnings (GAAP) dropped to $75 million from $498 million in Q2 2024, indicating an 84.9% decline [1][2] Financial Performance - Revenue (GAAP) increased by 44.7% year-over-year, from $4.7 billion in Q2 2024 to $6.8 billion in Q2 2025 [2] - Non-GAAP EPS decreased by 63.6% from $0.55 in Q2 2024 to $0.20 in Q2 2025 [2] - Free cash flow (non-GAAP) fell by 67.7% from $167 million in Q2 2024 to $54 million in Q2 2025 [2] Operational Highlights - The integration of DS Smith is now reflected in the North America and EMEA Packaging Solutions segments, with North America segment profit rising to $277 million [5] - EMEA sales reached $2.3 billion, but the segment reported a $1 million operating loss due to integration costs and subdued demand [5] - Global Cellulose Fibers segment sales declined to $628 million, resulting in a $4 million loss, attributed to downtime and higher operating expenses [6] Strategic Focus - The company is concentrating on transforming core operations through the DS Smith acquisition and a strategic 80/20 approach to enhance efficiency and reduce costs [4] - Future success hinges on effective integration of DS Smith, achieving cost savings, and leading in sustainable packaging innovations [4] Shareholder and Debt Information - Shareholders received $488 million in dividends during the first half of 2025, while long-term debt increased to $9.7 billion as of June 30, 2025 [9] - The acquisition expanded the employee base to 65,000, reflecting the scale of the transaction [9] Future Outlook - Management is optimistic about Q3, anticipating increased global revenue and earnings as integration progresses [11] - Caution is advised regarding potential softness in European markets that may limit the benefits of price increases [11] - The company aims to improve full-year EBITDA and achieve synergy and cost-out targets, with a focus on margin recovery and cost efficiencies [12]

Financial Performance - Sales for Q2 2025 reached $6767 million, compared to $5901 million in Q1 2025 and $4734 million in Q2 2024[27] - Adjusted EBITDA for Q2 2025 was $733 million, down from $769 million in Q1 2025 but up from $561 million in Q2 2024[27] - Adjusted Operating EPS decreased from $023 in Q1 2025 to $020 in Q2 2025[27] - Free Cash Flow improved significantly from $(618) million in Q1 2025 to $54 million in Q2 2025[27] Packaging Solutions North America (PS NA) - PS NA Sales increased to $3860 million in Q2 2025 from $3702 million in Q1 2025 and $3628 million in Q2 2024[34] - PS NA Adjusted EBITDA was $515 million in Q2 2025, compared to $554 million in Q1 2025 and $465 million in Q2 2024[35] - IP U S Box shipments decreased by 50% YoY/day[37] Packaging Solutions EMEA (PS EMEA) - PS EMEA Sales significantly increased to $2291 million in Q2 2025, including DS Smith results, compared to $1550 million in Q1 2025 and $328 million in Q2 2024[40] - PS EMEA Adjusted EBIT was $(1) million in Q2 2025, down from $46 million in Q1 2025 and $10 million in Q2 2024[40] - PS EMEA Adjusted EBITDA was $194 million in Q2 2025, up from $153 million in Q1 2025 and $26 million in Q2 2024[40] Global Cellulose Fibers (GCF) - GCF Sales decreased to $628 million in Q2 2025 from $643 million in Q1 2025 and $717 million in Q2 2024[45] - GCF Adjusted EBITDA decreased to $45 million in Q2 2025 from $68 million in Q1 2025 and $90 million in Q2 2024[46] - GCF Adjusted EBITDA Margin decreased to 72% in Q2 2025 from 106% in Q1 2025 and 126% in Q2 2024[47] Strategic Initiatives - Commercial Excellence actions are expected to yield ~$650 million YTD, targeting $11 billion by 2027[16] - Cost Out actions are expected to yield ~$550 million YTD, targeting $19 billion by 2027[20]

Core Insights - Smurfit Westrock reported a revenue of $7.94 billion for the quarter ended June 2025, reflecting a significant increase of 167.4% year-over-year [1] - The company's EPS was $0.45, down from $0.69 in the same quarter last year, indicating a decline in profitability [1] - The reported revenue slightly exceeded the Zacks Consensus Estimate of $7.92 billion, resulting in a revenue surprise of +0.22% [1] - However, the EPS fell short of the consensus estimate of $0.57, leading to an EPS surprise of -21.05% [1] Performance Metrics - Smurfit Westrock's stock has returned +5.1% over the past month, outperforming the Zacks S&P 500 composite, which increased by +3.4% [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Geographic Revenue Breakdown - Revenue from Europe, MEA, and APAC was reported at $2.78 billion, slightly below the estimated $2.83 billion [4] - Revenue from LATAM reached $518 million, exceeding the estimated $496.83 million [4] - North America generated $4.76 billion in revenue, surpassing the estimated $4.62 billion [4]

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 second quarter net income of $242 million or $2.67 per share, an increase from $199 million or $2.20 per share in 2024 [4] - Excluding special items, net income was $224 million or $2.48 per share compared to $199 million or $2.20 per share in 2024, reflecting a $0.28 per share increase driven by higher prices and lower fiber costs [4][5] - Second quarter net sales were $2.2 billion in 2025, up from $2.1 billion in 2024 [4] - Total company EBITDA for the second quarter, excluding special items, was $451 million in 2025 compared to $400 million in 2024 [4] Business Line Data and Key Metrics Changes - In the Packaging segment, EBITDA excluding special items was $453 million with sales of $2 billion, resulting in a margin of 22.6%, compared to last year's EBITDA of $400 million and sales of $1.9 billion with a margin of 21% [5][6] - The Paper segment reported EBITDA excluding special items of $30 million with sales of $146 million, yielding a margin of 20.8%, compared to $31 million and $150 million in sales in 2024 [12] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.95 per share above 2024, with export containerboard prices up $0.03 per share versus last year's second quarter [8] - Export containerboard sales were lower, with a production of 85,000 fewer tons than in 2024 [6] Company Strategy and Development Direction - The company announced an agreement to acquire the Greif containerboard business, which is expected to provide a strong growth platform for both containerboard and corrugated products [7][10] - The acquisition is anticipated to be completed by the end of the third quarter, subject to regulatory approval [7] Management's Comments on Operating Environment and Future Outlook - Management noted that while corrugated customers remained cautious, there was steady improvement in bookings and shipments as July progressed [15] - The company expects higher corrugated shipments and containerboard production in the third quarter, despite lower export containerboard sales due to the global trade environment [15][16] - Management expressed optimism about potential upside if global trade issues and tariffs are resolved [70] Other Important Information - Cash provided by operations was $300 million in the quarter, with free cash flow of $130 million [13] - The company has a quarter-end cash balance, including marketable securities, of $956 million, with liquidity of approximately $1.3 billion [14] Q&A Session Summary Question: Can you talk about bookings and billings to start the new quarter? - Bookings are trending at 2% over Q2 2024, with a good start compared to last year's strong performance [23] Question: What was behind the better performance in operations? - The company operated at approximately 99% uptime performance, executing efficiently despite some downtime due to demand [25] Question: Can you clarify the impact of export sales on revenue and EBITDA? - The increase in revenue and EBITDA per ton is primarily due to price increases rather than mix changes [29] Question: What is the outlook for e-commerce growth? - Customers in the e-commerce sector are still growing mid-single digits, with more growth expected in the second half of the year [79] Question: How will the Greif acquisition impact recycled mix and customer sets? - The recycled mix is expected to increase from around 20% to approximately 30% post-acquisition, providing better opportunities in the market [86] Question: What is the expected marginal cost of the new debt from the Greif acquisition? - The company is modeling about a 5.5% interest rate on the new debt, resulting in around $100 million incremental interest [100]

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].