International Paper Company · NYSE:IP
International Paper — Q4 2024 Earnings Presentation
31 slides from International Paper's earnings presentation, Jan 30, 2025
Slide 1: Fourth Quarter & Full Year 2024 Earnings
Fourth Quarter & Full Year 2024 Earnings January 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 forw
Slide 3: IP and DS Smith combination to create global sustainable packaging leader
The combination of IP and DS Smith will create the global leader in sustainable packaging solutions, focused on the attractive and growing North American and EMEA regions. Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 3
Slide 4: Our Purpose
Our Purpose Together with our customers, we make the world safer and more MISSION productive one sustainable packaging solution at a time. VALUES Safety Ethics Excellence Through great teams working safely with an 80/20 mindset, we deliver profitable market STRATEGY share growth as the low-cost prod
Slide 5: Path to $4 Billion EBITDA excluding DS Smith and synergies
Path to $4 Billion EBITDA1 excluding DS Smith and synergies $4B Target* Cost Improvement $1.2B Actions Taken More to Do Cost ✓ Enterprise resource alignment ❑ Improve mill performance $120MM ❑ Mill and box system productivity and ✓ 5 box plant closures $40MM structural cost out ✓ Georgetown Mill clo
Slide 6: Pursuing Investments for Profitable Growth
Pursuing Investments for Profitable Growth * Rendering, not actual building design Waterloo, Iowa Box Plant Greenfield West Monroe, Louisiana Bulk Plant Acquisition ⚫ Strategic and growing market ⚫ Attractive market and growing segment ⚫ State-of-the-art sustainable packaging plant ⚫ Increasing capa
Slide 7: Performance & Outlook
Performance & Outlook Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 7
Slide 8: Full Year 2024 Highlights
Full Year 2024 Highlights 2023 2024 FY24 Performance • Earnings lower YoY on strategy reset Sales ($B) $18.9 $18.6 • Improved price on go-to-market execution 1 Adjusted EBIT ($B) $0.8* $0.7 and positive index moves 2 Adjusted Operating EPS $1.25* $1.13 • Lower volume from commercial contract 1 restr
Slide 9: Fourth Quarter 2024 Highlights
Fourth Quarter 2024 Highlights 4Q23 3Q24 4Q24 4Q24 Performance • EBITDA and margin in line sequentially Sales ($B) $4.6 $4.7 $4.6 1 • Higher sales prices across the portfolio Adjusted EBIT ($MM) $(154)* $233 $6 • Lower volume due to commercial contract 2 Adjusted Operating EPS $(0.51)* $0.44 $(0.02)
Slide 10: 4Q24 vs 3Q24 Adjusted Operating EPS
4Q24 vs 3Q24 Adjusted Operating EPS1 .12 (.08) .12 (.56) (.11) .44 .06 (.01) (.02) 3Q'24 Price/Mix Volume Operations Maintenance Input Costs Corporate Accelerated 4Q'24 & Costs Outages & Other Items Depreciation Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 10
Slide 11: Industrial Packaging 4Q24 vs 3Q24 Adjusted EBIT
Industrial Packaging 4Q24 vs 3Q24 Adjusted EBIT1 63 (24) 20 (9) 247 Prices increased in all channels: (22) 22 $39MM Index movement $8MM Exports 197 Volume impacted by two fewer shipping days and lower export shipments IP U.S. box shipments -11% YoY /day, impacted by contract restructuring $ Million
Slide 12: Global Cellulose Fibers 4Q24 vs 3Q24 Adjusted EBIT
Global Cellulose Fibers 4Q24 vs 3Q24 Adjusted EBIT1 40 (13) (8) (23) (28) (250) Lower price from index movement 4 (222) Ops & Costs impacted by mill reliability incidents and seasonally higher costs $ Million Accelerated depreciation expense related to Georgetown Mill closure in 4Q24 3Q'24 Price/Mix
Slide 13: First Quarter Earnings Outlook
First Quarter Earnings Outlook* Changes from 4Q24 Industrial Packaging Cellulose Fibers Price & Mix Export price and mix YTD (-) Prior index movement (-) Volume N.A. 2 more days (+) Stable Cost reduction initiatives (+) Improved performance (+) Ops & Costs Non-repeats (+) Wage inflation (-) Non-repe
Slide 14: Investor Day 2025
Investor Day 2025 Tuesday, March 25 Formal invitations and webcast registration details New York City to follow in coming weeks 14 Fourth Quarter & Full-Year 2024 Earnings 1/30/2025
Slide 15: Appendix & Footnotes
Appendix & Footnotes Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 15
Slide 16: Investor Relations and Media contacts
Investor Relations • José Maria Rodriguez Meis +1-901-419-1731 josemaria.rodriguezmeis@ipaper.com • Michele Vargas +1-901-419-7287 michele.vargas@ipaper.com Media • Amy Simpson +1-901-419-4964 amy.simpson@ipaper.com Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 16
Slide 17: Capital Allocation
Capital Allocation Maximizing Value Creation Highlights Investment Excellence Solid balance sheet ▪ Debt / EBITDA1 at 2.7x (Moody’s basis) ▪ Limited short & medium-term debt maturities ▪ Liquidity & cash = $3B Maximizing Return Qualified pension plan fully funded Cash to Value Shareowners Returned $
Slide 18: Select Financial Metrics: Capex
Select Financial Metrics 1 5-Year Average $1.8 $ Million 2023 2024 2025F Maintenance Outage Expense $593 $522 $555 Maintenance & Regulatory $815 $761 Capex Targeting Cost Reduction $85 $48 $1,200 Strategic $241 $112 Depreciation & Amortization2 $1,432 $1,300 $1,030 Net Interest Expense3 $234 $218 $2
Slide 19: 2024 vs 2023 Adjusted Operating EPS
2024 vs 2023 Adjusted Operating EPS1 2 .47 (.26) 1.8 1.6 (.84) 1.4 1.25 .42 1.13 1.2 1 .15 (.16) .10 0.8 0.6 0.4 0.2 0 2023 Price/Mix Volume Operations Maintenance Input Costs Corporate Accelerated 2024 & Costs Outages & Other Items Depreciation Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 19
Slide 20: 4Q24 vs 4Q23 Adjusted Operating EPS
4Q24 vs 4Q23 Adjusted Operating EPS1 .84 (.21) (.55) (.51) .46 (.02) (.05) (.09) .09 4Q'23 Price/Mix Volume Operations Maintenance Input Costs Corporate Accelerated 4Q'24 & Costs Outages & Other Items Depreciation Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 20
Slide 21: Industrial Packaging 4Q24 vs 4Q23 Adjusted EBIT
Industrial Packaging 4Q24 vs 4Q23 Adjusted EBIT1 304 (85) 336 247 (198) $ Million (32) (45) (33) 4Q'23 Price/Mix Volume Operations Maintenance Input Costs Accelerated 4Q'24 & Costs Outages Depreciation Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 21
Slide 22: Global Cellulose Fiber 4Q24 vs 4Q23 Adjusted EBIT
Global Cellulose Fiber 4Q24 vs 4Q23 Adjusted EBIT1 4Q'23 4Q'24 Operations Maintenance Accelerated Price/Mix Volume Input Costs & Costs Outages Depreciation $ Million (1) (4) (27) 25 (133) 37 (147) (250) Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 22
Slide 23: Geographic Business Segment Operating Results
Geographic Business Segment Operating Results Quarterly Business Segment Sales D&A 1 Operating Profit $ Million 4Q23 3Q24 4Q24 4Q24 4Q23 3Q24 4Q24 North America $3,528 $3,640 $3,539 $205 $(60)* $190 $228 EMEA $340 $322 $357 $16 $28 $7 $19 Global Cellulose Fibers Global Cellulose Fibers $656 $710 $66
Slide 24: Maintenance Outages Expenses 2024
Maintenance Outages Expenses 2024 $ Million 1Q24A 2Q24A 3Q24A 4Q24A 2024A Industrial Packaging $77 $80 $118 $96 $371 North America $77 $59 $118 $94 $348 Riverdale Papers - $18 - - $18 EMEA - $3 - $2 $5 Global Cellulose Fibers $57 $38 $14 $42 $151 North America $33 $38 $14 $42 $127 Georgetown Papers
Slide 25: Maintenance Outages Expenses 2025 Forecast
Maintenance Outages Expenses 2025 Forecast $ Million 1Q25F 2Q25F 3Q25F 4Q25F 2025F Industrial Packaging $90 $141 $60 $105 $396 North America $90 $114 $60 $104 $368 Riverdale Papers - $23 - - $23 EMEA - $4 - $1 $5 Global Cellulose Fibers $68 $59 $7 $25 $159 North America $68 $59 $7 $25 $159 Georgetow
Slide 26: 2024 Operating Earnings
2024 Operating Earnings Non- Equity Average Pre-Tax Tax controlling Net Income Earnings Shares Diluted EPS1 $MM $MM Interest $MM $MM MM $MM Net Earnings from Continuing Operations 1Q24 $85 $(27) - $(2) $56 349 $0.16 2Q24 $206 $293 - $(1) $498 353 $1.41 3Q24 $80 $71 - $(1) $150 353 $0.42 4Q24 $(224)
Slide 27: Sales Volume by Product
Sales Volume by Product (a) Preliminary and Unaudited Three Months Ended Three Months Ended Twelve Months Ended December 31, September 30, December 31, 2024 2023 2024 2024 2023 Industrial Packaging (In thousands of short tons) Corrugated Packaging (b) 2,132 2,325 2,192 8,811 9,428 Containerboard 715
Slide 28: North America Downtime
North America Downtime Containerboard Cellulose Fibers Thousand Tons Thousand Tons 622 532 421 130 105 458 143 137 243 138 36 132 231 45 26 68 12 179 142 55 61 11 113 102 106 102 132 36 35 12 36 75 57 25 24 14 Economic Maintenance Fourth Quarter & Full-Year 2024 Earnings 1/30/2025 28
Slide 29: Global Input Costs 4Q24 vs 3Q24
Global Input Costs 4Q24 vs 3Q24 $24MM Favorable, $0.06 per share By Business By Input Type U.S Average Cost 4Q24 vs 3Q24 20 Wood -% 1 OCC (12)% ▼ 16 OCC Natural Gas 21% ▲ 4 Electricity (6)% ▼ 6 Wood 1 4 Chemical Composite -% (2) (2) Industrial Global Cellulose Fibers Fiber Energy Chemicals Freight P
Slide 30: Footnotes
Footnotes Slide 5 1 The Company is unable to provide a reconciliation of this anticipated medium-term Adjusted EBITDA benefit, a forward-looking non-GAAP financial measure, on a fiscal year run rate basis associated with the actions described on this slide, as presented, without unreasonable efforts
Slide 31: Footnotes
Footnotes Slide 18 1 Before special items 2 Includes expense of $422 million for 2023 associated with mill closures and machine shutdown costs and $233 million for 2024 associated with mill closure and plant closures. 3 Excludes special items net interest income of $3 million and interest income of
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