Financial Data and Key Metrics Changes - In 2025, the company generated a 12% return on invested capital, with adjusted EBITDA of $448 million and a free cash flow of $44 million [8][9] - For Q4 2025, adjusted EBITDA was $125 million with a margin of 14%, and free cash flow was $38 million [10][11] - Adjusted operating earnings for the full year were $3.54 per share [9] Business Line Data and Key Metrics Changes - Uncoated freesheet sales volume increased by 9% quarter-over-quarter in Q4 2025 [9] - Price and mix were unfavorable by $21 million in Q4, primarily due to lower paper prices in Europe and some Brazilian export markets [11] Market Data and Key Metrics Changes - The European industry supply and demand environment remains challenging, but there are signs of improvement as pulp prices began to rebound in Q4 2025 [12] - In North America, industry operating rates are improving, with a significant decline in imports throughout the second half of 2025 [13] Company Strategy and Development Direction - The company aims to achieve world-class standards in safety, employee engagement, customer centricity, operational excellence, cost leadership, and sustainability [4][5] - The flagship growth strategy focuses on investing in low-risk, high-return projects to strengthen uncoated freesheet capabilities and grow earnings and cash flow [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 and 2026 will be low points in free cash flow generation due to cyclical industry downturns and ongoing investments [26] - The company expects to generate over $300 million in annual free cash flow and over 15% returns on invested capital as industry conditions improve [26][70] Other Important Information - The company has discontinued providing full-year Adjusted EBITDA and free cash flow guidance to focus on long-term value creation [7] - Capital spending is expected to be $245 million in 2026, primarily for investments at the Eastover Mill [15] Q&A Session Summary Question: Update on operations in Europe and margin improvement - Management highlighted successful investments at the Saillat Mill to improve product mix and emphasized the need for market price improvements for margin recovery [31][32] Question: Investor interest in capital allocation - Management noted that there has been strong support from investors regarding capital allocation priorities, reaffirming their commitment to maintaining a strong balance sheet and returning cash to shareholders [36][37] Question: Impact of Lenzing's production scale-up on costs - Management confirmed that Lenzing's project will not impact fiber costs at Nymölla [47] Question: Share repurchase pause reasoning - The decision to pause share repurchases was based on anticipated capital intensity and cash requirements for 2026 [53][56] Question: Clarification on negative impacts for 2026 - Management confirmed that the $10 million charge is in addition to the previously mentioned $85 million negative impact, totaling $95 million for one-time costs [61]

Financial Data and Key Metrics Changes - In 2025, the company generated a 12% return on invested capital, with adjusted EBITDA of $448 million and a free cash flow of $44 million [8][9] - For Q4 2025, adjusted EBITDA was $125 million with a margin of 14%, and free cash flow was $38 million [10][11] - The company maintained a strong financial position with a net debt to adjusted EBITDA ratio of 1.6 times [8] Business Line Data and Key Metrics Changes - Uncoated freesheet sales volume increased by 9% quarter-over-quarter in Q4 2025 [9] - Price and mix were unfavorable by $21 million in Q4, primarily due to lower paper prices in Europe and some Brazilian export markets [11] - Volume increased by $18 million, largely driven by Latin America and North America [11] Market Data and Key Metrics Changes - The European industry supply and demand environment remains challenging, but there are signs of improvement as pulp prices began to rebound in Q4 2025 [12] - In Latin America, demand is transitioning from the seasonally strong fourth quarter to the weaker first quarter, negatively impacting geographic mix [12] - North American industry operating rates are improving, with significant declines in imports throughout the second half of 2025 [14] Company Strategy and Development Direction - The company aims to achieve world-class standards in safety, employee engagement, customer centricity, operational excellence, cost leadership, and sustainability [4][5] - The focus remains on disciplined capital allocation and long-term value creation, with a commitment to attract high-quality, long-term shareholders [7][26] - The flagship growth strategy involves investing in low-risk, high-return projects to strengthen uncoated freesheet capabilities [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 and 2026 will be low points in free cash flow generation due to cyclical industry downturns and ongoing investments [25] - The company expects to generate over $300 million in annual free cash flow and over 15% returns on invested capital as industry conditions improve [26][72] - Management is focused on a Lean transformation to enhance customer-centricity and operational efficiency [49][71] Other Important Information - The company has discontinued providing full-year Adjusted EBITDA and free cash flow guidance to align external communications with long-term management goals [7] - Capital spending is expected to be $245 million in 2026, primarily for investments at the Eastover Mill [15] Q&A Session Summary Question: Update on operations in Europe and margin improvement - Management highlighted successful investments at the Saillat Mill to improve product mix and emphasized the need for market price improvements for margin recovery [30][32] Question: Investor discussions on capital allocation - Management noted that there has been strong support from investors regarding capital allocation priorities, reaffirming their commitment to maintaining a strong balance sheet and returning cash to shareholders [36][37] Question: Nymölla's long-term fit in the business - Management views Nymölla as a good fit due to its focus on uncoated freesheet and attractive product mix, despite current challenges [39][40] Question: Impact of Lenzing's production scale-up on fiber costs - Management confirmed that Lenzing's project will not impact fiber costs at Neenah [47] Question: Share repurchase pause rationale - Management explained that the decision to pause share repurchases was based on anticipated capital intensity and cash flow requirements for 2026 [53][56]

Fourth Quarter and Full Year 2025 Earnings February 12, 2026 © 2026 Sylvamo Corporation. All rights reserved. 1 Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements. Forward-looking statements forecast or state expectations concerning future events. These statements often can be identified by the fact that they do not relate strictly to historical or current facts. They typically use words such as "antic ...