International Paper Company · NYSE:IP
International Paper — Q1 2025 Earnings Presentation
38 slides from International Paper's earnings presentation, Apr 30, 2025
Slide 1: First Quarter 2025 Earnings
First Quarter 2025 Earnings April 30, 2025
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation that are not historical in nature may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forwa
Slide 3: Andy's Perspective – Year 1
Andy’s Perspective – Year 1 Transformation Underway Safety above all else Talented team with desire to win 80/20 performance system Focus on 80s customers Drive cost out Building execution muscle DS Smith integration Solid Momentum … Significant Opportunity First Quarter 2025 Earnings 4/30/2025 3
Slide 4: Our Strategy to Drive Sustainable Value Creation
Our Strategy to Drive Sustainable Value Creation ADVANTAGED ADVANTAGED COST COST POSITION POSITION Advantaged Cost Superior Customer High Relative Supply Position Experience Position (RSP) SUPERIOR ▪ Strengthens ▪ Investing in ▪ Builds advantaged CUSTOMER market position our customers capabilities a
Slide 5: On Track to Deliver Within 2025 Earnings Target Range
On Track to Deliver Within 2025 Earnings Target Range Despite Softer Market Demand Packaging Solutions Packaging Solutions Global Cellulose North America EMEA Fibers TOTAL IP Original Assumptions* Market Predict return to 1.0% - 1.5% Lower demand than Stable consumer 2025 Demand demand growth antici
Slide 6: Well Positioned to Navigate Macroeconomic Uncertainties
Well Positioned to Navigate Macroeconomic Uncertainties 2025 Original Plan 2025 Current View Downside Risk & Mitigation Softer industrial production driven by Economic recession US / Europe Solid US economy, Europe improving weaker consumer sentiment Tariffs / Trade Wars / Stagflation Includes no ad
Slide 7: Cost Out Actions
Cost Out Actions Targeting ~$0.6B Adj. EBITDA1 Run Rate Benefits Exiting 2025 Actions Taken More to Do ✓ Enterprise overhead reduction ~$120MM ❑ Accelerate 80/20 execution across NA and EMEA ✓ 7 box plants & 1 recycling plant closure ~$70MM ❑ Deliver $600MM - $700MM synergies (~25% RR by YE) ✓ Georg
Slide 8: Commercial Excellence
Commercial Excellence Targeting ~$0.6B Adj. EBITDA1 Run Rate Benefits Exiting 2025 Actions Taken More to Do ✓ Reduced NA gap to market by ~500 bps in 1Q ❑ Building a customer-centric culture in NA and leveraging DS Smith strengths ✓ Gained NA market position with local 80s customers ✓ Implementing p
Slide 9: Performance & Outlook
Performance & Outlook Packaging Solutions North America Packaging Solutions EMEA Our combined packaging business in North America Our combined packaging business in EMEA Going to market as DS Smith, an International Paper company Global Cellulose Fibers Our sustainable and innovative cellulose fiber
Slide 10: First Quarter 2025 Highlights
First Quarter 2025 Highlights Sales ($MM) Adj. EBIT1 ($MM) 1Q’25 Performance 4Q incl. • Higher sales and earnings driven by DS Smith $5,901 $4,619 $4,580 $147 $(233)MM $198 acquisition, sales price increases, cost out, and accel. D&A favorable nonrecurring items $6 • Seasonally lower volume in NA an
Slide 11: 1Q'25 vs 4Q'24 Adjusted Operating EPS
1Q’25 vs 4Q’24 Adjusted Operating EPS1 .04 .23 .17 (.02) Includes accelerated .05 .00 (.01) depreciation related to facility closures (.02) .02 .00 4Q'24 Price/Mix Volume Operations Maintenance Input Costs Corporate Depreciation & DS Smith 1Q'25 & Costs Outages & Other Items Amortization Acquistion
Slide 12: Packaging Solutions North America
Packaging Solutions North America First Quarter 2025 Sales ($MM) Adj. EBIT1 ($MM) $228 1Q incl. $3,702 $192 ~$(200)MM accel. D&A $142 $3,539 $3,486 1Q'24 4Q'24 1Q'25 1Q'24 4Q'24 1Q'25 Adj. EBITDA2 ($MM) Adj. EBITDA Margin2 $554 15.7% $389 $434 12.9% • Higher sales and adj. EBITDA 11.7% driven by DS
Slide 13: Packaging Solutions North America
EBIT1 ($MM) 4Q’24 $228 4Q’24 to 1Q’25 1Q’25 to 2Q’25 Packaging Solutions North America 1Q’25 $142 Outlook approx. 2Q’25O $309 approx. Price & Mix 44 25 Prior price index movement (+) 1Q: (8.1)% YoY/day; seasonally lower box volumes (-) Volume (7) 15 2Q: Seasonally higher box volumes (+) 1Q: Lower em
Slide 14: Packaging Solutions North America
Packaging Solutions North America 2025 Adj. EBITDA1 Outlook $2.3B - $2.5B Cost Commercial ~$1.35 • Red River Mill cost wind down ~$80MM • Mill & box system optimization ~$220MM ~$1.05B • Mill performance improvement • DS Smith synergy ramp up • Seasonally lower outages expected in 2H’25 • Input cost
Slide 15: Packaging Solutions EMEA
Packaging Solutions EMEA First Quarter 2025 Sales ($MM) Adj. EBIT1 ($MM) $1,550 $46 $24 $19 $348 $357 1Q'24 4Q'24 1Q'25 1Q'24 4Q'24 1Q'25 Adj. EBITDA2 ($MM) Adj. EBITDA Margin2 $153 11.5% • Higher sales and 9.8% 9.9% earnings from DS Smith acquisition and $16 MM of favorable $40 $35 nonrecurring ite
Slide 16: Packaging Solutions EMEA
EBIT1 ($MM) 4Q’24 $19 4Q’24 to 1Q’25 1Q’25 to 2Q’25 Packaging Solutions Outlook 1Q’25 $46 2Q’25O $73 approx. approx. EMEA Price & Mix (8) -- 1Q: Realization of prior price decreases Volume -- -- Stable 1Q: Benefit of one-time energy incentives; lower employee incentive comp. Ops & Costs 26 (15) and
Slide 17: Packaging Solutions EMEA
Packaging Solutions EMEA 2025 Adj. EBITDA1 Outlook $0.9B - $1.1B Cost Commercial ~$0.60B ~$70MM • 80/20 deployment / synergy ramp up ~$0.40B ~$130MM • Expect lower energy costs • DS Smith legacy only five months in 1H’25 • 80/20 deployment • 1Q’25 pub. ~$60 to $80 per ton flow through 1H'25 2H'25 •
Slide 18: Global Cellulose Fibers
Global Cellulose Fibers First Quarter 2025 Sales ($MM) EBIT1 ($MM) 4Q incl. $704 $(222)MM $17 accel. D&A $662 $643 $(47) $(250) 1Q'24 4Q'24 1Q'25 1Q'24 4Q'24 1Q'25 Adj. EBITDA2 ($MM) Adj. EBITDA Margin2 • Long-term adj. EBITDA improvement driven by transformational cost structure actions $68 10.6% •
Slide 19: Global Cellulose Fibers
EBIT1 ($MM) 1Q’25 to 2Q’25 Global Cellulose Fibers 4Q’24 $(250) 4Q’24 to 1Q’25 Outlook 1Q’25 $17 approx. 2Q’25O $(4) approx. 1Q: Favorable mix and energy credits (+) Price & Mix 28 10 2Q: Prior index movement (+) Volume -- -- Stable demand Ops & Costs 23 -- 1Q: Improved mill performance; lower emplo
Slide 20: Global Cellulose Fibers
Global Cellulose Fibers 2025 Adj. EBITDA1 Outlook $0.3B - $0.4B Cost Commercial ~$0.25B • Georgetown Mill cost wind down • Improved mill performance ~$110MM • Expect seasonally lower outages in 2H’25 ~$0.11B ~$30MM • Flow through of previously published (Jan. – Apr.) Fluff and NBSK price increases 1
Slide 21: Focused on Strategic Actions to Drive Sustainable Earnings Improvement
Focused on Strategic Actions to Drive Sustainable Earnings Improvement Targeted Adj. EBITDA1 Improvement for Packaging Solutions Businesses* Excludes GCF ’25 Target Adj. EBITDA of ~$0.36B Cost ~$3.8B Commercial ~$400MM ~$3.3B ~$200MM ~$600MM ~$2.8B ~$300MM DS Smith est. ‘24 Results US GAAP Basis Pac
Slide 22: Controlling Our Own Destiny
Controlling Our Own Destiny Taking Bold Steps to Accelerate Our Growth 1 2 3 4 Applying 80/20 Taking cost out by Overserving our Investing to build to drive strategy optimizing footprint 80s customers to advantages and and focus resources and maximizing achieve above- win in attractive productivity
Slide 23: Appendix & Footnotes
Appendix & Footnotes First Quarter 2025 Earnings 4/30/2025 23
Slide 24: Investor Relations
Investor Relations • Mark Nellessen +1-901-419-1731 mark.nellessen@ipaper.com • Michele Vargas +1-901-419-7287 michele.vargas@ipaper.com Media • Amy Simpson +1-901-419-4964 amy.simpson@ipaper.com First Quarter 2025 Earnings 4/30/2025 24
Slide 25: Unlocking Long-term Opportunity Through Targeted Investments
Unlocking Long-term Opportunity Through Targeted Investments 2025 Investments Enable Potential DRIVING PRODUCTIVITY, Sustained Future Cash Generation COST REDUCTION, AND Free Cash Flow1 ($B) PROFITABLE GROWTH $2.0 – $2.5 ▪ Continued implementation of 80/20 mill and box plant optimization from custom
Slide 26: Healthy Balance Sheet Enables Near-term Investment…
Healthy Balance Sheet Enables Near-term Investment… BALANCE SHEET HIGHLIGHTS Total Debt ($B) and Well-positioned for (As of 12/31/24) $12.0 Debt / Adj. EBITDA1 8.0 Future Growth $10.1 $10.1 Cash & Temporary Investments ~$1.2B ▪ Debt / Adj. EBITDA1 targeted 7.0 $10.0 range of ~2.5x - 2.8x Net Debt ~$
Slide 27: Update on DS Smith Acquisition
Update on DS Smith Acquisition Lower 2025 Expectations Compared to Proxy Expect to Achieve Greater Synergy* Assumptions Given Softer Market Environment Targets Through Clear Improvement Drivers ▪ Price decline in second half of 2024 $600M - $700M ▪ Lower volumes than anticipated due to lower industr
Slide 28: Capex
Select Financial Metrics 1 5-Year Average $1.8 $ Million 2023 2024 2025F Maintenance Outage Expense $593 $522 $564 Maintenance & Regulatory $815 $761 Capex Targeting Cost Reduction $85 $48 $1,800 - $1,900 Strategic $241 $112 Depreciation & Amortization2 $1,432 $1,300 $1,800 Net Interest Expense3 $23
Slide 29: Reconciliation 1Q'25 Adj. Operating Earnings to Adj. EBITDA
Reconciliation 1Q’25 Adj. Operating Earnings to Adj. EBITDA 1 5-Year Average $1.8 $ Million 1Q’25 Adjusted Operating Earnings 101 Depreciation & Amortization 571 Interest Expense, net 81 Income Tax Provision (Benefit) (31) Equity Method Investment - Loss 1 Income Taxes – non-operating pension and sp
Slide 30: 1Q25 vs 1Q24 Adjusted Operating EPS
1Q25 vs 1Q24 Adjusted Operating EPS1 .66 (.09) (.08) (.01) (.05) .00 (.59) .22 .23 .17 1Q'24 Price/Mix Volume Operations Maintenance Input Costs Corporate Depreciation & DS Smith 1Q'25 & Costs Outages & Other Items Amortization Acquisition First Quarter 2025 Earnings 4/30/2025 30
Slide 31: 1Q'24 to 1Q'25 EBIT Bridge
1Q’24 to 1Q’25 EBIT1 Bridge Packaging Solutions Packaging Solutions Global Cellulose $(MM) North America EMEA Fibers 1Q’24 $192 $24 $(47) Price & Mix $273 $6 $60 Volume $(44) $-- $(6) Ops & Costs $(53) $11 $5 Maintenance $(16) $-- $11 Outages Inputs & Freight $(7) $(8) $(9) Depreciation & $(210) $(9
Slide 32: Maintenance Outages Expenses
Maintenance Outages Expenses 2025 Forecast $ Million 1Q25A 2Q25F 3Q25F 4Q25F 2025F Packaging Solutions North America $93 $126 $99 $86 $404 Global Cellulose Fibers $46 $82 $7 $25 $160 Total Impact $139 $208 $106 $111 $564 * Excludes Packaging Solutions EMEA First Quarter 2025 Earnings 4/30/2025 32
Slide 33: 2025 Operating Earnings
2025 Operating Earnings Non- Equity Average Pre-Tax Tax controlling Net Income Earnings Shares Diluted EPS1 $MM $MM Interest $MM $MM MM $MM Net Earnings (Loss) 1Q25 $(135) $31 - $(1) $(105) 438 $(0.24) 3 Net Special Items 1Q25 $249 $(45) - - $204 438 $0.46 Non-Operating Pension Expense 1Q25 $3 $(1)
Slide 34: Global Input Costs 1Q25 vs 4Q24
Global Input Costs 1Q25 vs 4Q24 $(22)MM Unfavorable, $(0.01) per share By Business By Input Type 1 11 14 OCC 3 (1) OCC Wood Wood (6) Wood (43) (7) (9) (7) NA Packaging Global Fiber Energy Chemicals Freight Packaging Solutions Cellulose Solutions EMEA Fibers Energy Wood Chemicals Freight OCC North Am
Slide 35: Footnotes
Footnotes Slides 4, 5, & 6 1 Adjusted EBITDA is a non-GAAP financial measures presented as a supplemental measure of our performance and the most directly comparable GAAP measure for Adjusted EBITDA is earnings (loss) before income taxes and equity earnings. It is not presented in accordance with ac
Slide 36: Footnotes
Footnotes Slides 12, 15 & 18 1 Adjusted EBIT at a segment level is Business Segment Operating Profit for such segment defined as earnings (loss) before income taxes and equity earnings, but including the impact of less than wholly owned subsidiaries, and excluding interest expense, net, corporate ex
Slide 37: Footnotes
Footnotes Slide 25 1 Free cash flow is a non-GAAP financial measure, which equals cash provided by operations less cash invested in capital projects. A reconciliation of all presented historical non-GAAP measures to the most directly comparable GAAP financial measures is available on IP’s website at
Slide 38: Footnotes
Footnotes Slide 33 1 A non-GAAP reconciliation to GAAP EPS is available at https://www.internationalpaper.com/investors/financial-reports/quarterly-results. 2 Adjusted Operating Earnings, a non-GAAP financial measure, is net earnings under GAAP before net special items and non-operating pension expe
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