Financial Data and Key Metrics Changes - The company reported that sales, operational cash generation, and EBITDA were in line with expectations for the quarter [10] - Net debt remained stable at $13 billion, with net leverage increasing to 3.1 times due to a reduction in last twelve months EBITDA to $4.2 billion [28] Business Line Data and Key Metrics Changes - The paper and packaging business in Brazil saw stronger sales volumes and lower costs compared to Q1, with EBITDA growth year-over-year [12] - U.S. operations experienced a 3% price increase quarter-over-quarter driven by product mix and better commercial location, although EBITDA was negatively impacted by lower volumes and higher costs due to maintenance [13][12] Market Data and Key Metrics Changes - In Brazil, print and write demand rose 6% year-over-year, while uncoated wood-free paper demand remained stable in North America and Latin America but declined 10% in Europe [14] - The U.S. market for boxboard demand was stable, with a 1% increase in demand for SBS boards [15] Company Strategy and Development Direction - The company is focusing on competitiveness and cost reduction, with expectations of lower cash costs in the upcoming quarters [10] - A deal with Eldorado is expected to provide an internal return of around 20%, allowing for increased production at the Ribba's mill without significant investment [7][8] Management's Comments on Operating Environment and Future Outlook - Management highlighted a positive outlook for cash cost trends and emphasized the importance of maintaining competitiveness in a challenging market environment [10][76] - The company is preparing for various scenarios in the global market and aims to improve operational efficiency [85] Other Important Information - The company is not currently planning significant new investments but is focused on executing existing projects and deleveraging [10][86] - The company has built inventories in the U.S. to mitigate the impact of 50% import duties imposed by the U.S. government [17] Q&A Session Questions and Answers Question: What are the changing dynamics in the pulp scenario? - Management noted high order intake levels in China and a supportive environment for price increases due to restocking movements and production recovery [32][34] Question: What is the internal rate of return for the deal with Eldorado? - The expected internal rate of return is around 20%, driven by optimized harvesting and reduced operational costs [40][42] Question: What is the expected CapEx trend for 2026? - The company anticipates a declining trend in CapEx, although specific numbers will be disclosed later [84] Question: How are negotiations regarding the 10% tariff going? - The company successfully negotiated that customers will bear the 10% tariff, ensuring that Suzano will not absorb this cost [95] Question: What is the status of the Kimberly Clark acquisition? - Dedicated teams have been established to plan the carve-out of the new joint venture, with the project progressing as planned [96]

Summary of the Conference Call on the Pulp & Paper Industry Industry Overview - The China pulp market is currently in a fragile equilibrium, with good pulp sales recently but negative macro sentiment affecting trading and growth uncertainties [1][2] - Paper production has decreased by 2% year-to-date, while pulp supply is growing rapidly, leading buyers to perceive no risk of deficit for restocking [1][2] Key Points - **Market Sentiment**: Confidence levels among buyers and sellers are low, limiting significant price movements in the short term. Industry participants are holding onto unclear and potentially unsustainable reasons to support pricing [2][3] - **Price Trends**: Pulp prices are expected to remain relatively flat until the end of summer, but a potential cyclical rebound could occur towards year-end as low prices impact producers' balance sheets [3][19] - **Production and Inventory**: - Pulp inventories at Chinese ports decreased by 2% month-over-month to 2.1 million tons, still 14% above the 5-year historical average [19] - Paper output in China increased by 4% month-over-month and 5% year-over-year in July, with utilization rates remaining flat at 59% [21] Pricing Data - China FOEX hardwood imported pulp prices decreased by $3 per ton to $495 per ton, while domestic resale prices ranged from $488 to $492 per ton [10] - Softwood imported FOEX prices also decreased by $3 per ton to $687 per ton, with domestic resale prices ranging from RMB -27 to 1 per ton [10] Margins and Production Costs - Paper margins in China were flat to down in July, primarily due to a slight decline in paper prices across all grades, despite lower pulp prices partially offsetting this decline [13] - The cash cost curve in China remains deflationary, allowing production to remain resilient at low prices [1] European Market Insights - European containerboard prices were broadly flat in July, with Kraftliner prices up by 2% and Testliner down by 3% [25] - European graphic paper prices decreased, with coated and uncoated woodfree prices down by 2% and 3% month-over-month, respectively [28] Company-Specific Insights - UPM's management indicated a negative outlook for pulp, citing macro uncertainties and declining orders, leading to planned shutdowns of certain mills [34] - SCA's management noted a challenging market for European containerboard, with negative price movements due to oversupply and tariff discussions [35] - Altri's management highlighted that hardwood pulp prices are close to marginal costs and may stabilize soon, with European prices expected to follow China's trend with a delay [35] Latin America Market Data - In Brazil, corrugated box shipments decreased by 2% year-over-year and 6% month-over-month in June, with year-to-date shipments at 2.0 million tons, reflecting a 1% year-over-year decline [36] Investment Ratings - Various pulp and paper companies in Latin America have been rated with target prices and upside potential, with Suzano SA rated as a "Buy" with a target price of $65.00, reflecting a 24.6% upside [38] Conclusion - The pulp and paper industry is facing a complex landscape characterized by fragile market conditions, fluctuating prices, and varying production outputs. Investors should remain cautious and monitor macroeconomic factors that could influence market dynamics.

July 30, 2025 Paper | Packaging | Solutions 2025 Second Quarter Results Smurfit Westrock Q2 | 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, the expected ben ...

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]

Group 1 - Packaging Corp. reported $2.17 billion in revenue for the quarter ended June 2025, a year-over-year increase of 4.6% [1] - The EPS for the same period was $2.48, compared to $2.20 a year ago, indicating a positive growth [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.16 billion, resulting in a surprise of +0.49% [1] Group 2 - Key metrics indicate that Packaging Corp. shares have returned +8.4% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - Segment Sales for Packaging reached $2.01 billion, surpassing the estimated $1.98 billion, reflecting a +5.1% change year-over-year [4] - Segment Sales for Corporate and Other amounted to $19.6 million, exceeding the estimated $18.72 million, with a +16% change compared to the previous year [4] - Segment Sales for Paper were $145.8 million, below the estimated $151.03 million, showing a -2.9% change year-over-year [4] Group 4 - Segment operating income for Packaging was $321.7 million, higher than the estimated $301.92 million [4] - Segment operating loss for Corporate and Other was $-36.8 million, worse than the estimated $-33.18 million [4] - Segment operating income for Paper was $25.8 million, below the estimated $37.99 million [4]

Summary of China Basic Materials Monitor - July 2025 Industry Overview - The report focuses on the **China Basic Materials** industry, highlighting the current state of demand and supply dynamics as of July 2025. Key Points Demand Trends - **End-user orderbooks** showed a mild month-over-month (MoM) increase but remained at low levels, indicating weak overall demand [1] - **Infrastructure construction** has weakened significantly, with a noticeable deceleration in new project starts due to ongoing funding constraints and stringent payment requirements [1] - **Metal demand** has softened, with signs of inventory buildup in the supply chain, influenced by seasonal softness and a sequential correction in domestic solar demand [1] - Current Chinese demand is reported to be **7-11% lower year-over-year (YoY)** for cement and construction steel, and **1-10% lower** for copper, flat steel, and aluminum [1] Supply Dynamics - The determination on supply adjustments remains mixed, with: - **Steel production cuts** beginning but with heterogeneous targets discussed [1] - Local government commitments on capacity elimination in cement being absent [1] - Marginal coal miners showing reluctance to cut production amid poor pricing [1] - Surprises in the oversupplied lithium market due to mining license approval inspections [1] - Recent weeks have seen improvements in margins/pricing for steel, coal, and lithium, while cement, aluminum, and copper prices have weakened [1] Producer Feedback - A proprietary survey indicated that **31% of respondents** in downstream sectors and **30%** in basic materials reported a MoM pickup in July, while **25%** and **24%** indicated a lower MoM trend, respectively [2] Additional Insights - The report emphasizes the **importance of funding** in infrastructure projects, which is currently constrained, affecting new project initiations [1] - The **mixed signals** in supply adjustments suggest a complex market environment where producers are navigating between demand pressures and pricing strategies [1] Conclusion - The China Basic Materials industry is experiencing a challenging environment characterized by weakening demand, mixed supply responses, and significant pressures on pricing and margins across various materials. The insights from producer feedback and high-frequency data provide a nuanced understanding of the current market dynamics, indicating potential risks and opportunities for investors in this sector.

Investment Rating - The report maintains a positive outlook on cement, copper, and incrementally positive on steel and aluminium, while holding a negative view on coal and lithium [1][9]. Core Insights - Earnings estimates for China commodities have been refreshed, reflecting mark-to-market price changes for 1H25, with target price changes ranging from -13% to +12% [1][9]. - The report highlights a positive outlook for hog pricing/margin in 2H25E due to improved supply discipline [1][9]. Summary by Sector Steel - Earnings forecasts for Baosteel and Angang have been revised up by 1-4% for 2025E, while the loss-making forecast for Maanshan has been cut by 11% [10]. - Maintain Buy on Baosteel with a new target price of Rmb8.8/sh [10]. Coal - The thermal coal market is expected to remain balanced in 2025E, with a decline in demand driven by renewable energy expansion [11]. - Earnings forecasts for Shenhua, Chinacoal, and Yankuang have been cut by 2-11% for 2025E and 10-27% for 2026-27E [12]. Cement - Unit gross profit forecasts for cement have been revised down by Rmb2-6/t for 2025E, but a positive view is maintained for 2H25E due to supply discipline [13]. - Earnings estimates for CNBM, WCC, BBMG-H/A, Conch-H/A, and CRBMT have been cut by 6% to 18% for 2025E [14]. Aluminum - Earnings estimates for Hongqiao have been revised up by 5-27% for 2025-27E, reflecting higher industry spread forecasts [17]. - Maintain Neutral on Hongqiao with a target price of HK$12.5/sh [17]. Copper - The benchmark copper price forecast has been revised to an average of US$4.20/lb in 2025E and US$4.61/lb in 2026E [18]. - Earnings estimates for CMOC-H/A, JXC-H/A, and MMG have been cut by 1-18% for 2025-26E [18]. Lithium - Earnings estimates for Ganfeng, Tianqi, and Yongxing have been cut by 3-4% for 2025E due to lower lithium prices [20]. - Yongxing's 2027E earnings have been cut by 37% based on flat lithium price forecasts [20]. Paper - Earnings forecasts for ND Paper have been revised up by 3-4%, while Sunpaper's earnings have been cut by 3% [22].

Investment Rating - The report provides a "Buy" rating for several companies in the basic materials sector, including Angang-H, Baosteel, Conch-A, and Zijin-A, indicating a positive outlook for these stocks with potential upside ranging from 22% to 51% [10]. Core Insights - The feedback from producers as of mid-May suggests that end-user order books were flat month-over-month (MoM), which is softer than past seasonal trends. Infrastructure recovery has paused, reflected in weak cement shipments and a lack of funding for new projects [1][2]. - Current Chinese demand for cement and construction steel is reported to be 12-14% lower year-over-year (YoY), while demand for copper has increased by 9% YoY. The demand for flat steel and aluminum is 1-3% lower YoY [1]. - The report highlights that while the supply chain is partially replacing US-bound shipments with production from other countries, the reduction in Chinese metal demand is less severe than initially feared [1]. Summary by Sections Downstream Demand Snapshots - The downstream order book trend was mostly stable MoM in May, with 25% of respondents indicating a pickup in the downstream sectors and 31% indicating a lower trend [2][3]. Steel Production - Steel production cuts are in preparation, and rush orders for exports are re-emerging. The report suggests that steel-making raw materials could potentially drop to sub US$80-90 per ton if production cuts are implemented [9]. Cement Market - The cement market has experienced a sudden deterioration, with current demand showing significant declines [9]. Aluminium and Copper - The report notes a disruption in Guinea bauxite supply affecting alumina, while copper demand remains more resilient than expected [9]. Coal Market - The coal market is characterized by very weak demand and pricing, indicating challenges for companies in this sector [9]. Lithium Market - The lithium market is facing a rising surplus, which may impact pricing and demand dynamics [9]. Paper Packaging - Improving shipment trends are noted in the paper packaging sector, driven by upcoming online shopping festivals and lower US-China tariffs [9].

Investment Rating - The report provides a mixed investment rating for various companies in the basic materials sector, with specific recommendations such as "Buy" for companies like Angang-H and Conch-H, while others like Maanshan-A and Chinacoal-H are rated as "Sell" [10]. Core Insights - The overall sentiment in the basic materials sector is that current demand is less concerning than previously anticipated, with a notable deceleration in local government special refinancing bond issuance impacting infrastructure recovery [1]. - Current Chinese demand for cement and construction steel is reported to be 12-14% lower year-on-year, while copper demand has increased by 9% [1]. - The downstream order book trend has remained mostly stable month-on-month, with 31% of respondents indicating a lower trend in May for basic materials [2][3]. Summary by Sections Downstream Demand Snapshots - Infrastructure recovery has paused due to a lack of funding for new projects, leading to weak cement shipments [1]. - The demand for construction materials is showing signs of weakness, particularly in cement and construction steel, while copper demand remains resilient [1]. Steel Production - Steel production cuts are in preparation, with a potential reduction in prices if these cuts are implemented [1]. - The report notes that rush orders following the reduction of US-China tariffs were limited, primarily driven by Southeast Asia [1]. Commodity Prices - The pricing for steel and cement has remained stable, while prices for aluminum and copper have improved, contrasting with the softening of coal and lithium prices [1]. Specific Company Insights - Angang-H is rated as "Buy" with a target price of CNY 2.40, indicating a potential upside of 45% [10]. - Conch-H is also rated as "Buy" with a target price of CNY 29.00, reflecting a 37% upside potential [10]. - Companies like Maanshan-A and Chinacoal-H are facing downward pressure, rated as "Sell" with target prices significantly lower than current prices [10].

Group 1: Suzano (SUZ) - Suzano is a producer of eucalyptus pulp and paper, holding a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 7.8% over the last 60 days [1] - The company has a PEG ratio of 0.08 compared to the industry average of 0.32, and possesses a Growth Score of A [1] Group 2: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, also holding a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 34.8% over the last 60 days [2] - The company has a PEG ratio of 0.96 compared to the industry average of 1.49, and possesses a Growth Score of A [2] Group 3: The ODP Corporation (ODP) - The ODP Corporation provides business services, products, and digital workplace technology solutions, also holding a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 9% over the last 60 days [3] - The company has a PEG ratio of 0.44 compared to the industry average of 3.48, and possesses a Growth Score of B [3]