REG-Smurfit Westrock plc Smurfit Westrock Reports Fourth Quarter and Full Year 2024 Results
12/02/2025 11:30
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Smurfit Westrock Reports Fourth Quarter and Full Year 2024 Results
Smurfit Westrock plc (NYSE: SW, LSE: SWR) today announced the financial
results for the fourth quarter and full year ended December 31, 2024.
Key points:
* Fourth quarter Net Sales of approx. $7.5 billion
* Fourth quarter Net Income of $146 million, with a Net Income Margin of 1.9%
* Fourth quarter Adjusted EBITDA(1) of $1,166 million, with an Adjusted EBITDA
Margin(1) of 15.5%
* Full year Net Income of $319 million(2)
* Full Year Combined Adjusted EBITDA(1) of $4.7 billion, in-line with guidance
* Previously announced quarterly dividend of $0.4308 per ordinary share, an
increase of 42%
Smurfit Westrock plc’s performance for the three months ended December 31,
2024 and December 31, 2023 (in millions, except margin percentages):
December 31, 2024 December 31 2023(3)
Net Sales $ 7,539 $ 2,862
Net Income $ 146 $ 50
Net Income Margin 1.9% 1.8%
Adjusted EBITDA(1) $ 1,166 $ 447
Adjusted EBITDA Margin(1) 15.5% 15.6%
Net Cash provided by Operating Activities $ 781 $ 611
Adjusted Free Cash Flow(1) $ 257 $ 391
Tony Smurfit, President and CEO, commented:
“I am pleased to report a strong fourth quarter performance with Net Income
of $146 million, Adjusted EBITDA(1) of $1,166 million and an Adjusted EBITDA
Margin(1) of 15.5%. For the full year, in line with our stated guidance, we
have delivered a Full Year Combined Adjusted EBITDA(1) of $4,706 million.
“While we are at the beginning of our journey, I am immensely proud of what
our teams have achieved in our first six months as Smurfit Westrock. The
operational and financial expertise that are hallmarks of this management team
are already being applied as we transform the combined business.
“Our synergy program of $400 million is on track and will be completed by
the end of this year. Moreover, there are significant operational and
commercial opportunities, at least equating to that synergy target.
“Smurfit Westrock with its unrivalled scale, geographic reach and product
portfolio has an unparalleled capacity to deliver innovative sustainable
packaging solutions. As a world leader in paper-based packaging, our unique
characteristics will enable us to deliver significant long-term value to our
extensive customer base.
“The year has started well and in the first quarter of 2025, assuming
current market conditions prevail, we anticipate delivering an Adjusted
EBITDA(4) of approximately $1.25 billion.
“Smurfit Westrock is creating a performance-led culture and a formidable
team. We are very confident about the future opportunities and prospects for
our business, in part reflected by our progressive dividend. For the current
year, subject as always to macro-economic and climate risks, we expect
continued and meaningful progress on our transformation journey.”
______________________________________
(1) Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow and Full
Year Combined Adjusted EBITDA are non-GAAP measures. See the “Non-GAAP
Financial Measures and Reconciliations” below for the discussion and
reconciliation of these measures to the most comparable GAAP measures.
(2) Smurfit Westrock plc’s results for the full year ended December 31, 2024
appear in the consolidated financials included below. For the January 1, 2024
– July 5, 2024 time period, these results reflect the historical financial
results of legacy Smurfit Kappa Group plc, which is considered the accounting
acquirer in the combination between Smurfit Kappa Group plc and WestRock
Company, which closed on July 5, 2024.
(3) All results reported for the three months ended December 31, 2023 reflect
the historical financial results of legacy Smurfit Kappa Group plc, which is
considered the accounting acquirer in the combination between Smurfit Kappa
Group plc and WestRock Company, which closed on July 5, 2024.
(4) Adjusted EBITDA is a non-GAAP financial measure. We have not reconciled
Adjusted EBITDA outlook to the most comparable GAAP outlook because it is not
possible to do so without unreasonable efforts due to the uncertainty and
potential variability of reconciling items, which are dependent on future
events and often outside of management’s control and which could be
significant. Because such items cannot be reasonably predicted with the level
of precision required, we are unable to provide an outlook for the comparable
GAAP measure (net income).
Earnings Call
Management will host an earnings conference call today at 7:30 AM ET / 12:30
PM GMT to discuss Smurfit Westrock’s financial results. The conference call
will be accessible through a live webcast. Interested investors and other
individuals can access the webcast, earnings release, and earnings
presentation via the Company’s website at www.smurfitwestrock.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.smurfitwestrock.com&esheet=54204435&newsitemid=20250212633063&lan=en-US&anchor=www.smurfitwestrock.com&index=1&md5=18c279d5ad8d5d11b97bf9b593bf415e)
. The webcast will be available at
https://investors.smurfitwestrock.com/overview
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Finvestors.smurfitwestrock.com%2Foverview&esheet=54204435&newsitemid=20250212633063&lan=en-US&anchor=https%3A%2F%2Finvestors.smurfitwestrock.com%2Foverview&index=2&md5=c74c787ee096e22b5ec9607e85ffdd16)
and a replay of the webcast will be available on the website shortly after the
call.
Forward Looking Statements
This press release 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
benefits of the completed combination of Smurfit Kappa Group plc and WestRock
Company (the “Combination”), including, but not limited to, synergy
program as well as our scale, geographic reach and product portfolio, and any
other statements regarding the Company's future expectations, beliefs, plans,
objectives, results of operations, financial condition and cash flows, or
future events, outlook or performance. Statements that are not historical
facts, including statements about the beliefs and expectations of the
management of the Company, are forward-looking statements. Words such as
“may”, “will”, “could”, “should”, “would”,
“anticipate”, “intend”, “estimate”, “project”, “plan”,
“believe”, “expect”, “target”, “prospects”, “potential”,
“commit”, “forecasts”, “aims”, “considered”, “likely”,
“estimate” and variations of these words and similar future or conditional
expressions are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements. While the Company believes
these expectations, assumptions, estimates and projections are reasonable,
such forward-looking statements are only predictions and involve known and
unknown risks and uncertainties, many of which are beyond the control of the
Company. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend upon future circumstances
that may or may not occur. Actual results may differ materially from the
current expectations of the Company depending upon a number of factors
affecting its business, including risks associated with the integration and
performance of the Company following the Combination. Important factors that
could cause actual results to differ materially from such plans, estimates or
expectations include: economic, competitive and market conditions generally,
including macroeconomic uncertainty, customer inventory rebalancing, the
impact of inflation and increases in energy, raw materials, shipping, labor
and capital equipment costs; the impact of public health crises, such as
pandemics (including the COVID-19 pandemic) and epidemics and any related
company or governmental policies and actions to protect the health and safety
of individuals or governmental policies or actions to maintain the functioning
of national or global economies and markets; reduced supply of raw materials,
energy and transportation, including from supply chain disruptions and labor
shortages; developments related to pricing cycles and volumes; intense
competition; the ability of the Company to successfully recover from a
disaster or other business continuity problem due to a hurricane, flood,
earthquake, terrorist attack, war, pandemic, security breach, cyber-attack,
power loss, telecommunications failure or other natural or man-made events,
including the ability to function remotely during long-term disruptions such
as the COVID-19 pandemic; the Company's ability to respond to changing
customer preferences and to protect intellectual property; the amount and
timing of the Company's capital expenditures; risks related to international
sales and operations; failures in the Company's quality control measures and
systems resulting in faulty or contaminated products; cybersecurity risks,
including threats to the confidentiality, integrity and availability of data
in the Company's systems; works stoppages and other labor disputes; the
Company’s ability to establish and maintain effective internal controls over
financial reporting in accordance with SOX, and remediate any weaknesses in
controls and processes; the Company's ability to retain or hire key personnel;
risks related to sustainability matters, including climate change and scarce
resources, as well as the Company's ability to comply with changing
environmental laws and regulations; the Company's ability to successfully
implement strategic transformation initiatives; results and impacts of
acquisitions by the Company; the Company's significant levels of indebtedness;
the impact of the Combination on the Company's credit ratings; the potential
impairment of assets and goodwill; the availability of sufficient cash to
distribute dividends to the Company's shareholders in line with current
expectations; the scope, costs, timing and impact of any restructuring of
operations and corporate and tax structure; evolving legal, regulatory and tax
regimes; changes in economic, financial, political and regulatory conditions
in Ireland, the United Kingdom, the United States and elsewhere, and other
factors that contribute to uncertainty and volatility, natural and man-made
disasters, civil unrest, pandemics (such as the COVID-19 pandemic),
geopolitical uncertainty, and conditions that may result from legislative,
regulatory, trade and policy changes associated with the current or subsequent
Irish, US or UK administrations; geo-economic fragmentation and protectionism
such as tariffs, trade wars or similar governmental actions affecting the
flows of goods, services or currency; legal proceedings instituted against the
Company; actions by third parties, including government agencies; the
Company's ability to promptly and effectively integrate Smurfit Kappa's and
WestRock's businesses; the Company's ability to achieve the synergies and
value creation contemplated by the Combination; the Company's ability to meet
expectations regarding the accounting and tax treatments of the Combination,
including the risk that the Internal Revenue Service may assert that the
Company should be treated as a US corporation or be subject to certain
unfavorable US federal income tax rules under Section 7874 of the Internal
Revenue Code of 1986, as amended, as a result of the Combination; other
factors such as future market conditions, currency fluctuations, the behavior
of other market participants, the actions of regulators and other factors such
as changes in the political, social and regulatory framework in which the
Company's group operates or in economic or technological trends or conditions,
and other risk factors included in the Company's filings with the Securities
and Exchange Commission. Neither the Company nor any of its associates or
directors, officers or advisers provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any such
forward-looking statements will actually occur. You are cautioned not to place
undue reliance on these forward-looking statements. Other than in accordance
with its legal or regulatory obligations (including under the UK Listing
Rules, the Disclosure Guidance and Transparency Rules, the UK Market Abuse
Regulation and other applicable regulations), the Company is under no
obligation, and the Company expressly disclaims any intention or obligation,
to update or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
About Smurfit Westrock
Smurfit Westrock is a leading provider of paper-based packaging solutions in
the world, with approximately 100,000 employees across 40 countries.
Consolidated Statements of Operations (Unaudited)
in $ millions, except per share data
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2024
2023
2024
2023
Net sales $ 7,539 $ 2,862 $ 21,109 $ 12,093
Cost of goods sold (6,097) (2,161) (16,914) (9,039)
Gross profit 1,442 701 4,195 3,054
Selling, general and administrative expenses (996) (459) (2,793) (1,604)
Transaction and integration-related expenses associated with the Combination (45) (61) (395) (78)
Operating profit 401 181 1,007 1,372
Pension and other postretirement non-service benefit (expense), net 7 (20) (24) (49)
Interest expense, net (173) (30) (398) (139)
Other expense, net (12) (27) (25) (46)
Income before income taxes 223 104 560 1,138
Income tax expense (77) (54) (241) (312)
Net income 146 50 319 826
Less: Net income attributable to noncontrolling interests - (1) - (1)
Net income attributable to common stockholders $ 146 $ 49 $ 319 $ 825
Basic earnings per share attributable to $ 0.28 $ 0.19 $ 0.83 $ 3.19
common stockholders
Diluted earnings per share attributable to $ 0.28 $ 0.19 $ 0.82 $ 3.17
common stockholders
Segment Information
Following the completion of the Combination, we reassessed our reportable
segments due to changes in our organizational structure and how our chief
operating decision maker (“CODM”) makes key operating decisions, allocates
resources and assesses the performance of our business. The CODM is determined
to be the executive management team, comprising the Group Chief Executive
Officer and Group Chief Financial Officer. The CODM is responsible for
assessing performance, allocating resources and making strategic decisions.
During the year ended December 31, 2024, we identified three operating
segments, which are also our reportable segments:
1. North America, which includes operations in the U.S., Canada and Mexico.
2. Europe, the Middle East and Africa (“MEA”), and Asia-Pacific (“APAC”).
3. Latin America (“LATAM”), which includes operations in Central America and
Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru.
These changes reflect how we manage our business effective during the third
quarter of 2024, following the completion of the Combination. Our operating
segments are consistent with our internal management structure and no
operating segments have been aggregated for disclosure purposes. Prior period
comparatives have been recast to reflect the change in segments.
In the identification of the operating and reportable segments, we considered
the level of integration of our different businesses as well as our objective
to develop long-term customer relationships by providing customers with
differentiated packaging solutions that enhance the customer’s prospects of
success in their end markets.
The North America, Europe, MEA and APAC, and LATAM segments are each highly
integrated within the segment and there are many interdependencies within
these operations. They each include a system of mills and plants that
primarily produce a full line of containerboard that is converted into
corrugated containers within each segment or is sold to third parties.
In addition, the North America segment also produces paperboard, kraft paper
and market pulp; other paper-based packaging, such as folding cartons,
inserts, labels and displays and also engages in the assembly of displays as
well as the distribution of packaging products.
The Europe, MEA and APAC segment also produces types of paper, such as solid
board, kraft paper, and graphic paper; and other paper-based packaging, such
as honeycomb, solid board packaging, folding cartons, inserts and labels; and
bag-in-box packaging (located in Europe, Argentina, Canada, Mexico and the
U.S.).
The LATAM segment also comprises forestry; other types of paper, such as
paperboard and kraft paper; and paper-based packaging, such as folding
cartons, honeycomb and paper sacks.
Inter-segment transfers or transactions are entered into under normal
commercial terms and conditions on an arms-length basis.
Segment profitability is measured based on Adjusted EBITDA, defined as income
before income taxes, unallocated corporate costs, depreciation, depletion and
amortization, interest expense, net, pension and other postretirement
non-service expense, net, share-based compensation expense, other (expense)
income, net, impairment of goodwill and other assets, amortization of fair
value step up on inventory, transaction and integration-related expenses
associated with the Combination and other specific items that management
believes are not indicative of the ongoing operating results of the business.
The CODM uses Adjusted EBITDA for each segment predominantly: to forecast and
assess the performance of the segments, individually and comparatively; to set
pricing strategies for the segments; and to make decisions about the
allocation of operating and capital resources to each segment strategically,
in the annual budget and in the quarterly forecasting process. The CODM
considers budget, or forecast, -to-actual variances on a quarterly and annual
basis for segment Adjusted EBITDA to inform these decisions.
Segment Information (continued)
Financial information by segment is summarized below.
in $ millions, except margins
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2024
2023
2024
2023
Net sales (aggregate)
North America $ 4,593 $ 384 $ 10,092 $ 1,624
Europe, MEA and APAC 2,521 2,147 9,577 9,193
LATAM 524 343 1,711 1,344
Total $ 7,638 $ 2,874 $ 21,380 $ 12,161
Less net sales (intersegment)
North America $ 72 $ - $ 191 $ 1
Europe, MEA and APAC 8 - 21 9
LATAM 19 12 59 58
Total $ 99 $ 12 $ 271 $ 68
Net sales (unaffiliated customers)
North America $ 4,521 $ 384 $ 9,901 $ 1,623
Europe, MEA and APAC 2,513 2,147 9,556 9,184
LATAM 505 331 1,652 1,286
Total $ 7,539 $ 2,862 $ 21,109 $ 12,093
Adjusted EBITDA
North America $ 710 $ 72 $ 1,610 $ 281
Europe, MEA and APAC 371 354 1,529 1,684
LATAM 121 57 378 274
Total $ 1,202 $ 483 $ 3,517 $ 2,239
Adjusted EBITDA Margin
Adjusted EBITDA/Net sales (aggregate)
North America 15.4% 18.7% 16.0% 17.3%
Europe, MEA and APAC 14.7% 16.5% 16.0% 18.3%
LATAM 23.1% 16.6% 22.1% 20.4%
Consolidated Balance Sheets (Unaudited)
in $ millions, except share data
December 31, December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents (amounts related to consolidated variable interest $ 855 $ 1,000
entities of $2 million and $3 million at December 31, 2024 and December 31,
2023, respectively)
Accounts receivable, net (amounts related to consolidated variable interest 4,117 1,806
entities of $767 million and $816 million at December 31, 2024 and December
31, 2023, respectively)
Inventories 3,550 1,203
Other current assets 1,533 561
Total current assets 10,055 4,570
Property, plant and equipment, net 22,675 5,791
Goodwill 6,822 2,842
Intangibles, net 1,117 218
Prepaid pension asset 635 29
Other non-current assets (amounts related to consolidated variable interest 2,455 601
entities of $389 million and $- million at December 31, 2024 and December 31,
2023, respectively)
Total assets $ 43,759 $ 14,051
Liabilities and Equity
Current liabilities:
Accounts payable $ 3,290 $ 1,728
Accrued expenses 715 278
Accrued compensation and benefits 882 438
Current portion of debt 1,053 78
Other current liabilities 1,393 484
Total current liabilities 7,333 3,006
Non-current debt due after one year 12,542 3,669
Deferred tax liabilities 3,600 280
Pension liabilities and other postretirement benefits, net of current portion 706 537
Other non-current liabilities (amounts related to consolidated variable 2,191 385
interest entities of $335 million and $- at December 31, 2024 and December 31,
2023, respectively)
Total liabilities 26,372 7,877
Equity:
Preferred stock; $0.001 par value; 500,000,000 and Nil shares authorized; - -
10,000 and Nil shares outstanding at December 31, 2024 and December 31, 2023,
respectively
Common stock; $0.001 par value; 9,500,000,000 and 9,910,931,085 shares 1 -
authorized; 520,444,261 and 260,354,342 shares outstanding at December 31,
2024 and December 31, 2023, respectively
Deferred shares, €1 par value; 25,000 shares and 25,000 shares authorized; - -
25,000 and 100 shares outstanding at December 31, 2024 and December 31, 2023,
respectively
Treasury stock, at cost (2,037,589, and 1,907,129 common stock at December 31, (93) (91)
2024, and December 31, 2023, respectively)
Capital in excess of par value 15,948 3,575
Accumulated other comprehensive loss (1,446) (847)
Retained earnings 2,950 3,521
Total stockholders’ equity 17,360 6,158
Noncontrolling interests 27 16
Total equity 17,387 6,174
Total liabilities and equity $ 43,759 $ 14,051
Consolidated Statements of Cash Flows (Unaudited)
in $ millions
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2024
2023
2024
2023
Operating activities:
Net income $ 146 $ 50 $ 319 $ 826
Adjustments to reconcile consolidated net income to net cash provided by
operating activities:
Depreciation, depletion and amortization 593 150 1,464 580
Impairment charges on assets other than goodwill 21 5 24 5
Cash surrender value increase in excess of premiums paid (3) - (17) -
Share-based compensation expense 52 23 206 66
Deferred income tax benefit (38) (24) (137) (28)
Pension and other postretirement funding more than cost (25) (4) (55) (39)
Other 14 (6) 28 (10)
Change in operating assets and liabilities, net of acquisitions and
divestitures:
Accounts receivable 278 182 (144) 245
Inventories (58) 59 62 220
Other assets 16 22 (31) 43
Accounts payable (47) 178 (273) (260)
Income taxes (39) (53) (5) (99)
Accrued liabilities and other (129) 29 42 10
Net cash provided by operating activities 781 611 1,483 1,559
Investing activities:
Capital expenditures (569) (268) (1,466) (929)
Cash paid for purchase of businesses, net of cash acquired (3) - (719) (29)
Proceeds from corporate owned life insurance 3 - 5 -
Proceeds from sale of property, plant and equipment 46 6 61 17
Deferred consideration paid - - (1) (4)
Other 4 8 6 14
Net cash used for investing activities (519) (254) (2,114) (931)
Financing activities:
Additions to debt 2,580 11 5,707 88
Repayments of debt (2,681) (16) (4,321) (136)
Debt issuance costs (19) - (63) -
Changes in commercial paper, net 34 - 1 -
Other debt (repayments) additions, net (11) - 2 (4)
Repayments of finance lease liabilities (10) (1) (22) (3)
Tax paid in connection with shares withheld from employees (5) - (26) -
Purchases of treasury stock - - (27) (30)
Cash dividends paid to stockholders (157) (92) (650) (391)
Other 7 (3) 6 (3)
Net cash (used for) provided by financing activities $ (262) $ (101) $ 607 $ (479)
Effect of exchange rate changes on cash and cash equivalents (96) 15 (121) 10
(Decrease) increase in cash and cash equivalents $ (96) $ 271 $ (145) $ 159
Cash and cash equivalents at beginning of period 951 729 1,000 841
Cash and cash equivalents at end of period $ 855 $ 1,000 $ 855 $ 1,000
Non-GAAP Financial Measures and Reconciliations
Smurfit Westrock plc (“Smurfit Westrock”) reports its financial results in
accordance with accounting principles generally accepted in the United States
("GAAP"). However, management believes certain non-GAAP financial measures
provide Smurfit Westrock’s board of directors, investors, potential
investors, securities analysts and others with additional meaningful financial
information that should be considered when assessing our ongoing performance.
Management also uses these non-GAAP financial measures in making financial,
operating and planning decisions, and in evaluating company performance.
Non-GAAP financial measures should be viewed in addition to, and not as an
alternative for, the GAAP results. The non‑GAAP financial measures we
present may differ from similarly captioned measures presented by other
companies. Smurfit Westrock uses the non-GAAP financial measures “Adjusted
EBITDA,” “Adjusted EBITDA Margin,” and “Adjusted Free Cash Flow.” We
discuss below details of the non-GAAP financial measures presented by us and
provide reconciliations of these non‑GAAP financial measures to the most
directly comparable financial measures calculated in accordance with GAAP.
Definitions
Smurfit Westrock uses the non-GAAP financial measures “Adjusted EBITDA”
and “Adjusted EBITDA Margin” to evaluate its overall performance. The
composition of Adjusted EBITDA is not addressed or prescribed by GAAP. Smurfit
Westrock defines Adjusted EBITDA as income before income taxes, unallocated
corporate costs, depreciation, depletion and amortization, interest expense,
net, pension and other postretirement non‑service (benefit) expense, net,
share-based compensation expense, other expense, net, impairment of goodwill
and other assets, amortization of fair value step up on inventory, transaction
and integration-related expenses associated with the Combination and other
specific items that management believes are not indicative of the ongoing
operating results of the business. Smurfit Westrock views Adjusted EBITDA as
an appropriate and useful measure used to compare financial performance
between periods. Adjusted EBITDA Margin is calculated as Adjusted EBITDA
divided by Net Sales.
Management believes Adjusted EBITDA and Adjusted EBITDA Margin measures
provide Smurfit Westrock’s management, board of directors, investors,
potential investors, securities analysts and others with useful information to
evaluate Smurfit Westrock’s performance because, in addition to income tax
expense, depreciation, depletion and amortization expense, interest expense,
net, pension and other postretirement non‑service (benefit) expense, net,
and share-based compensation expense, Adjusted EBITDA also excludes
restructuring costs, impairment of goodwill and other assets and other
specific items that management believes are not indicative of the operating
results of the business. Smurfit Westrock and its board of directors use this
information in making financial, operating and planning decisions and when
evaluating Smurfit Westrock’s performance relative to other periods.
Smurfit Westrock uses the non-GAAP financial measure “Adjusted Free Cash
Flow”. Smurfit Westrock defines Adjusted Free Cash Flow as net cash provided
by operating activities as adjusted for capital expenditures and to exclude
certain costs not reflective of underlying operations. Management utilizes
this measure in connection with managing Smurfit Westrock’s business and
believes that Adjusted Free Cash Flow is useful to investors as a liquidity
measure because it measures the amount of cash generated that is available,
after reinvesting in the business, to maintain a strong balance sheet, pay
dividends, repurchase stock, service debt and make investments for future
growth. It should not be inferred that the entire free cash flow amount is
available for discretionary expenditures. By adjusting for certain items that
are not indicative of Smurfit Westrock’s underlying operational performance,
Smurfit Westrock believes that Adjusted Free Cash Flow also enables investors
to perform meaningful comparisons between past and present periods.
Full Year Combined Adjusted EBITDA reflects unaudited financial information
for Smurfit Kappa and WestRock on a combined basis, from January 1, 2024. This
includes financial information for the six months ended June 30, 2024, as
described in the Supplemental Unaudited Historical Segment Financial
Information on a Combined Basis presented in our Current Report on Form 8-K
filed with the SEC on September 24, 2024, and financial information for the
first five days of July, due to the Combination closing on July 5, 2024. Such
information has not been prepared in compliance with Article 11 of Regulation
S-X, nor prepared on a consolidated basis under U.S. GAAP. Combined Adjusted
EBITDA Margin is calculated as Full Year Combined Adjusted EBITDA divided by
Combined Net Sales.
Reconciliations to Most Comparable GAAP Measure
Set forth below is a reconciliation of the non-GAAP financial measures
Adjusted EBITDA and Adjusted EBITDA Margin to Net income and Net Income
Margin, the most directly comparable GAAP measures, for the periods indicated.
in $ millions, except margins
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2024
2023
2024
2023
Net income $ 146 $ 50 $ 319 $ 826
Income tax expense 77 54 241 312
Depreciation, depletion and amortization 593 150 1,464 580
Amortization of fair value step up on inventory (3) - 224 -
Transaction and integration-related expenses associated with the Combination 45 61 395 78
Interest expense, net 173 30 398 139
Pension and other postretirement non-service (benefit) expense, net (7) 20 24 49
Share-based compensation expense 52 23 206 66
Other expense, net 12 27 25 46
Other adjustments ((1)) 78 32 90 32
Adjusted EBITDA $ 1,166 $ 447 $ 3,386 $ 2,128
Net Sales $ 7,539 $ 2,862 $ 21,109 $ 12,093
Net Income Margin 1.9% 1.8% 1.5% 6.8%
(Net Income/Net Sales)
Adjusted EBITDA Margin 15.5% 15.6% 16.0% 17.6%
(Adjusted EBITDA/Net Sales)
((1)) Other adjustments for the three months ended December 31, 2024, include
a non-recurring, non-cash currency translation adjustment in Argentina of $42
million, restructuring costs of $34 million and losses at closed facilities of
$2 million (three months ended December 31, 2023: $- million, $32 million and
$- million, respectively). Other adjustments for the twelve months ended
December 31, 2024, include restructuring costs of $56 million, a
non-recurring, non-cash currency translation adjustment in Argentina of $42
million and losses at closed facilities of $10 million partially offset by a
reimbursement of a fine from the Italian Competition Authority of $18 million
(twelve months ended December 31, 2023: $32 million, $- million, $‑ million
and $- million, respectively).
Reconciliations to Most Comparable GAAP Measure (continued)
Set forth below is a reconciliation of the non-GAAP financial measure Full
Year Combined Adjusted EBITDA to Net income, the most directly comparable GAAP
measure.
in $ millions, except margins
Twelve months ended
December 31,
2024
Net income as reported by Smurfit Westrock $ 319
Preacquisition net loss of WestRock (16)
Combined net income 303
Combined:
Income tax expense 258
Depreciation, depletion and amortization 2,270
Amortization of fair value step up on inventory 224
Transaction and integration-related expenses associated with the Combination 531
Interest expense, net 613
Pension and other postretirement non-service expense, net 28
Share-based compensation expense 231
Other expense, net 52
Other adjustments ((1)) 196
Combined Adjusted EBITDA $ 4,706
Combined Net Sales $ 30,904
Combined Net Income Margin 1.0%
(Combined Net Income/Combined Net Sales)
Combined Adjusted EBITDA Margin 15.2%
(Combined Adjusted EBITDA/Combined Net Sales)
((1)) Other adjustments for the twelve months ended December 31, 2024,
primarily include restructuring costs of $118 million, a non-recurring,
non-cash currency translation adjustment in Argentina of $42 million, business
transformation costs of $35 million, losses at closed facilities of $22
million partially offset by a reimbursement of a fine from the Italian
Competition Authority of $18 million.
Set forth below is a reconciliation of the non-GAAP financial measure Adjusted
Free Cash Flow to Net cash provided by operating activities, the most directly
comparable GAAP measure, for the periods indicated.
in $ millions
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2024
2023
2024
2023
Net cash provided by operating activities $ 781 $ 611 $ 1,483 $ 1,559
Capital expenditures (569) (268) (1,466) (929)
Free Cash Flow $ 212 $ 343 $ 17 $ 630
Adjustments:
Transaction and integration costs 80 49 443 66
Bridge facility fees - 2 - 10
Restructuring costs 18 3 64 16
Italian competition fine reduction (18) - (18) -
Tax on above items (35) (6) (77) (6)
Adjusted Free Cash Flow $ 257 $ 391 $ 429 $ 716
Ciarán Potts
Smurfit Westrock
T: +353 1 202 71 27
E: ir@smurfitwestrock.com (mailto:ir@smurfitwestrock.com)
FTI Consulting
T: +353 1 765 0800
E: smurfitwestrock@fticonsulting.com
(mailto:smurfitwestrock@fticonsulting.com)
View source version on businesswire.com:
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