Smurfit Westrock Reports Third Quarter 2024 Financial Results
Smurfit Westrock (NYSE: SW) reported its Q3 2024 financial results with net sales of $7.7 billion and a net loss of $150 million. The company achieved Adjusted EBITDA of $1,265 million with a 16.5% margin. The net loss was primarily attributed to transaction-related expenses and purchase accounting adjustments totaling approximately $500 million. The company expects 2024 Full Year Combined Adjusted EBITDA of approximately $4.7 billion. Operating cash flow was $320 million, with Adjusted Free Cash Flow of $118 million. The company maintained its quarterly dividend of $0.3025 per ordinary share.
Smurfit Westrock (NYSE: SW) ha riportato i risultati finanziari del terzo trimestre 2024, con vendite nette di 7,7 miliardi di dollari e una perdita netta di 150 milioni di dollari. L'azienda ha raggiunto un EBITDA rettificato di 1.265 milioni di dollari con un margine del 16,5%. La perdita netta è stata principalmente attribuita a spese relative a transazioni e adeguamenti contabili per acquisti per un totale di circa 500 milioni di dollari. L'azienda prevede un EBITDA rettificato combinato per l'intero anno 2024 di circa 4,7 miliardi di dollari. Il flusso di cassa operativo è stato di 320 milioni di dollari, con un flusso di cassa libero rettificato di 118 milioni di dollari. L'azienda ha mantenuto il suo dividendo trimestrale di 0,3025 dollari per azione ordinaria.
Smurfit Westrock (NYSE: SW) informó sus resultados financieros del tercer trimestre de 2024, con ventas netas de 7.700 millones de dólares y una pérdida neta de 150 millones de dólares. La compañía logró un EBITDA ajustado de 1.265 millones de dólares con un margen del 16,5%. La pérdida neta se atribuyó principalmente a gastos relacionados con transacciones y ajustes contables por compras que totalizan aproximadamente 500 millones de dólares. La compañía espera un EBITDA ajustado combinado de aproximadamente 4.700 millones de dólares para todo el año 2024. El flujo de efectivo operativo fue de 320 millones de dólares, con un flujo de caja libre ajustado de 118 millones de dólares. La compañía mantuvo su dividendo trimestral de 0,3025 dólares por acción ordinaria.
Smurfit Westrock (NYSE: SW)는 2024년 3분기 재무 결과를 발표하며, 순매출이 77억 달러에 달하고 순손실이 1억 5천만 달러에 이른다고 밝혔습니다. 회사는 조정된 EBITDA 12억 6천5백만 달러를 달성했으며, 마진은 16.5%입니다. 순손실은 주로 거래 관련 비용과 약 5억 달러에 달하는 구매 회계 조정에 기인했습니다. 회사는 2024년 전체 연도에 대한 조정된 EBITDA가 약 47억 달러가 될 것으로 예상하고 있습니다. 운영 현금 흐름은 3억 2천만 달러였으며, 조정된 자유 현금 흐름은 1억 1천8백만 달러였습니다. 회사는 보통주당 분기 배당금을 0.3025 달러로 유지했습니다.
Smurfit Westrock (NYSE: SW) a annoncé ses résultats financiers du troisième trimestre 2024, avec un chiffre d'affaires net de 7,7 milliards de dollars et une perte nette de 150 millions de dollars. L'entreprise a réalisé un EBITDA ajusté de 1,265 milliard de dollars avec une marge de 16,5 %. La perte nette a été principalement attribuée à des frais liés aux transactions et à des ajustements comptables d'achat totalisant environ 500 millions de dollars. L'entreprise prévoit un EBITDA ajusté combiné d'environ 4,7 milliards de dollars pour l'année 2024. Le flux de trésorerie opérationnel était de 320 millions de dollars, avec un flux de trésorerie libre ajusté de 118 millions de dollars. L'entreprise a maintenu son dividende trimestriel de 0,3025 dollar par action ordinaire.
Smurfit Westrock (NYSE: SW) hat seine Finanzergebnisse für das 3. Quartal 2024 bekannt gegeben, mit Umsatzerlösen von 7,7 Milliarden Dollar und einem Nettoverlust von 150 Millionen Dollar. Das Unternehmen erzielte ein bereinigtes EBITDA von 1,265 Milliarden Dollar bei einer Marge von 16,5%. Der Nettoverlust wurde hauptsächlich auf transaktionsbezogene Ausgaben und Anpassungen der Kaufbuchhaltung in Höhe von etwa 500 Millionen Dollar zurückgeführt. Das Unternehmen erwartet für 2024 ein kombiniertes bereinigtes EBITDA von etwa 4,7 Milliarden Dollar. Der operative Cashflow betrug 320 Millionen Dollar, während der bereinigte freie Cashflow 118 Millionen Dollar betrug. Das Unternehmen hielt seine vierteljährliche Dividende von 0,3025 Dollar pro Stammaktie aufrecht.
- Net sales increased significantly to $7.7 billion from $2.9 billion YoY
- Strong Adjusted EBITDA of $1.265 billion with 16.5% margin
- Positive guidance with expected Full Year Combined Adjusted EBITDA of $4.7 billion
- Synergy target of $400 million identified from operational improvements
- Net loss of $150 million compared to net income of $229 million in Q3 2023
- Net income margin declined to -2.0% from 7.8% YoY
- Interest expense increased by $128 million to $167 million
- Operating cash flow decreased by $58 million to $320 million YoY
Insights
The Q3 results reveal significant post-merger challenges and opportunities. The
Key concerns include increased interest expense (
The integration process shows both challenges and opportunities in operational efficiency. The focus on plant-level autonomy coupled with operational improvements suggests potential upside beyond the stated
Working capital management needs attention, as evidenced by the
Key points:
-
Net Sales of approx.
$7.7 billion -
Net Loss of
, with a Net Income Margin of negative$150 million 2.0% -
Adjusted EBITDA1 of
, with an Adjusted EBITDA Margin1 of$1,265 million 16.5% - Continuing focus on asset optimization
-
Previously announced quarterly dividend of
per ordinary share$0.30 25
Smurfit Westrock plc’s performance for the three months ended September 30, 2024 and September 30, 2023 (in millions, except margin percentages):
|
September 30, 20241 |
September 30, 20232 |
||
Net Sales |
$ |
7,671 |
$ |
2,915 |
Net (Loss) Income |
$ |
(150) |
$ |
229 |
Net Income Margin |
|
( |
|
|
Adjusted EBITDA1 |
$ |
1,265 |
$ |
525 |
Adjusted EBITDA Margin1 |
|
|
|
|
Net Cash provided by Operating Activities |
$ |
320 |
$ |
378 |
Adjusted Free Cash Flow1 |
$ |
118 |
$ |
214 |
Tony Smurfit, President and CEO, commented:
“I am pleased to report an excellent performance for the third quarter, the first for Smurfit Westrock. The Net Loss for the quarter of
“Our established track record of delivering value to our customers through service, quality and innovation is already beginning to yield results. Equally, we believe our focus on plant level autonomy, operational improvement and profitability will deliver in time, benefits at least equal to the stated synergy target of
“Our third quarter performance, combined with our deeper knowledge of the Combination and continuing asset optimization, clearly points to the opportunities ahead for Smurfit Westrock. We are at the start of our journey to build the ‘go-to’ sustainable packaging partner of choice, a global leader with an unrivalled scale, geographic reach and product portfolio. Having spent the last number of months visiting our plants, it is also clear that our people are excited and motivated to be a part of this journey.
“We expect 2024 Full Year Combined Adjusted EBITDA4 of approximately
__________________ |
1 Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow 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 All results reported for the three months ended September 30, 2024 do not include the financial results of legacy WestRock Company (“WestRock”) for the first five days of July due to the closing of the combination between Smurfit Kappa Group plc and WestRock Company on July 5, 2024. |
3 All results reported for the three months ended September 30, 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, which closed on July 5, 2024 (the “Combination”). |
4 2024 Full Year Combined 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). |
Third Quarter 2024 | Financial Performance
Smurfit Westrock’s net sales increased by
Net income decreased by
Adjusted EBITDA1 for the Company was
The Company’s interest expense, net increased by
Other expense, net increased to
Income tax expense decreased by
Net cash provided by operating activities decreased by
Including capital expenditure of
Adjusted EBITDA5 for our
Adjusted EBITDA5 for our
Adjusted EBITDA5 for our LATAM segment increased by
__________________ |
5 For the three months ended September 30, 2024, Adjusted EBITDA and Adjusted EBITDA Margin for the segments are our measures of segment profitability because they are used by our chief decision-maker (“CODM”) to make decisions regarding allocation of resources and to assess segment performance in accordance with Accounting Standards Codification 280. These financial measures comply with GAAP when used in that context. For the three months ended September 30, 2023, segment information reflects performance of legacy Smurfit Kappa Group plc. |
Earnings Call
Management will host an earnings conference call today at 7:30 AM ET / 11:30 AM 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. The webcast will be available at https://investors.smurfitwestrock.com/overview 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, synergies, 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
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.
Condensed Consolidated Statements of Operations
in $ millions, except share and per share data |
||||||||
|
|
Three months ended |
Nine months ended |
|||||
|
|
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
Net sales |
$ |
7,671 |
$ |
2,915 |
$ |
13,570 |
$ |
9,231 |
Cost of goods sold |
|
(6,321) |
|
(2,173) |
|
(10,817) |
|
(6,878) |
Gross profit |
|
1,350 |
|
742 |
|
2,753 |
|
2,353 |
Selling, general and administrative expenses |
|
(1,028) |
|
(371) |
|
(1,797) |
|
(1,144) |
Transaction and integration-related expenses associated with the Combination |
|
(267) |
|
(17) |
|
(350) |
|
(17) |
Operating profit |
|
55 |
|
354 |
|
606 |
|
1,192 |
Pension and other postretirement non-service benefit (expense), net |
|
8 |
|
(9) |
|
(31) |
|
(29) |
Interest expense, net |
|
(167) |
|
(39) |
|
(225) |
|
(109) |
Other expense, net |
|
(13) |
|
(4) |
|
(13) |
|
(19) |
(Loss) income before income taxes |
|
(117) |
|
302 |
|
337 |
|
1,035 |
Income tax expense |
|
(33) |
|
(73) |
|
(164) |
|
(258) |
Net (loss) income |
|
(150) |
|
229 |
|
173 |
|
777 |
Less: Net (loss) income attributable to noncontrolling interests |
|
- |
|
- |
|
- |
|
- |
Net (loss) income attributable to common stockholders |
$ |
(150) |
$ |
229 |
$ |
173 |
$ |
777 |
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share attributable to common stockholders |
$ |
(0.30) |
$ |
0.89 |
$ |
0.51 |
$ |
3.01 |
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share attributable to common stockholders |
$ |
(0.30) |
$ |
0.88 |
$ |
0.50 |
$ |
3.00 |
Segment Information
Following the completion of the Combination we reassessed our operating 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 President and Chief Executive Officer Anthony Smurfit and the Executive Vice President and Group Chief Financial Officer Ken Bowles. The CODM is responsible for assessing performance, allocating resources and making strategic decisions.
During the three months ended September 30, 2024, we identified three operating segments, which are also our reportable segments:
-
Europe , theMiddle East andAfrica (MEA), andAsia-Pacific (APAC). -
North America , which includes operations in theU.S. ,Canada andMexico . -
Latin America (“LATAM”), which includes operations inCentral America andCaribbean ,Argentina ,Brazil ,Chile ,Colombia ,Ecuador andPeru .
These changes reflect how we manage our business following the completion of the Combination. No operating segments have been aggregated for disclosure purposes. Prior period comparatives have been restated 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
In addition, the
The
The LATAM segment also comprises forestry; types of paper, such as boxboard and sack 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 that would also be available to unrelated third parties.
Segment profit is measured based on Adjusted EBITDA, defined as (loss) income before income taxes, unallocated corporate costs, depreciation, depletion and amortization, amortization of fair value step up on inventory, transaction and integration-related expenses associated with the Combination, interest expense, net, pension and other postretirement non-service benefit (expense), net, share-based compensation expense, other expense, net. restructuring costs, legislative or regulatory fines and reimbursements, losses at closed facilities and impairment of goodwill and other assets.
Segment Information (continued)
Financial information by segment is summarized below and in the schedules with this release.
|
in $ millions, except Adjusted EBITDA Margin and share and per share data |
|||||||
|
Three months ended |
Nine months ended |
||||||
|
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||
Net sales (aggregate) |
|
|
|
|
|
|
|
|
|
$ |
2,651 |
$ |
2,191 |
$ |
7,056 |
$ |
7,047 |
|
|
4,649 |
|
401 |
|
5,499 |
|
1,239 |
LATAM |
|
506 |
|
341 |
|
1,187 |
|
1,000 |
Total |
$ |
7,806 |
$ |
2,933 |
$ |
13,742 |
$ |
9,286 |
|
|
|
|
|
|
|
|
|
Less net sales (intersegment) |
|
|
|
|
|
|
|
|
|
$ |
5 |
$ |
3 |
$ |
13 |
$ |
9 |
|
|
118 |
|
- |
|
119 |
|
- |
LATAM |
|
12 |
|
15 |
|
40 |
|
46 |
Total |
$ |
135 |
$ |
18 |
$ |
172 |
$ |
55 |
|
|
|
|
|
|
|
|
|
Net sales (unaffiliated customers) |
|
|
|
|
|
|
|
|
|
$ |
2,646 |
$ |
2,188 |
$ |
7,043 |
$ |
7,038 |
|
|
4,531 |
|
401 |
|
5,380 |
|
1,239 |
LATAM |
|
494 |
|
326 |
|
1,147 |
|
954 |
Total |
$ |
7,671 |
$ |
2,915 |
$ |
13,570 |
$ |
9,231 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
$ |
411 |
$ |
411 |
$ |
1,158 |
$ |
1,330 |
|
|
780 |
|
66 |
|
900 |
|
209 |
LATAM |
|
116 |
|
74 |
|
257 |
|
217 |
Total |
$ |
1,307 |
$ |
551 |
$ |
2,315 |
$ |
1,756 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin Adjusted EBITDA/Net sales (aggregate) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LATAM |
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
in $ millions, except share and per share data |
|||
|
As of |
|||
|
September 30, 2024 |
December 31, 2023 |
||
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents, including restricted cash (amounts related to consolidated variable interest entities of |
$ |
951 |
$ |
1,000 |
Accounts receivable (amounts related to consolidated variable interest entities of |
|
4,613 |
|
1,806 |
Inventories |
|
3,585 |
|
1,203 |
Other current assets |
|
1,396 |
|
561 |
Total current assets |
|
10,545 |
|
4,570 |
Property plant and equipment, net |
|
23,206 |
|
5,791 |
Goodwill |
|
7,215 |
|
2,842 |
Intangibles, net |
|
1,094 |
|
218 |
Prepaid pension asset |
|
615 |
|
29 |
Other non-current assets (amounts related to consolidated variable interest entities of |
|
2,354 |
|
601 |
Total assets |
$ |
45,029 |
$ |
14,051 |
Liabilities and Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
3,357 |
$ |
1,728 |
Accrued expenses |
|
813 |
|
278 |
Accrued compensation and benefits |
|
954 |
|
438 |
Current portion of debt |
|
745 |
|
78 |
Other current liabilities |
|
1,257 |
|
484 |
Total current liabilities |
|
7,126 |
|
3,006 |
Non-current debt due after one year (amounts related to consolidated variable interest entities of |
|
13,174 |
|
3,669 |
Deferred tax liabilities |
|
3,682 |
|
280 |
Pension liabilities and other postretirement benefits, net of current portion |
|
788 |
|
537 |
Other non-current liabilities (amounts related to consolidated variable interest entities of |
|
2,267 |
|
385 |
Total liabilities |
|
27,037 |
|
7,877 |
Equity: |
|
|
|
|
Preferred stock; |
|
- |
|
- |
Common stock; |
|
1 |
|
- |
Deferred shares, |
|
- |
|
- |
Treasury stock, at cost (2,037,589, and 1,907,129 common stock at September 30, 2024, and December 31, 2023, respectively) |
|
(93) |
|
(91) |
Capital in excess of par value |
|
15,890 |
|
3,575 |
Accumulated other comprehensive loss |
|
(1,011) |
|
(847) |
Retained earnings |
|
3,178 |
|
3,521 |
Total stockholders’ equity |
|
17,965 |
|
6,158 |
Noncontrolling interests |
|
27 |
|
16 |
Total equity |
|
17,992 |
|
6,174 |
Total liabilities and equity |
$ |
45,029 |
$ |
14,051 |
Condensed Consolidated Statements of Cash Flows
|
in $ millions, except share and per share data |
|||||||
|
Three months ended |
Nine months ended |
||||||
|
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||
Operating activities: |
|
|
|
|
|
|
|
|
Consolidated net (loss) income |
$ |
(150) |
$ |
229 |
$ |
173 |
$ |
777 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
564 |
|
147 |
|
872 |
|
430 |
Cash surrender value increase in excess of premiums paid |
|
(14) |
|
- |
|
(14) |
|
- |
Share-based compensation expense |
|
123 |
|
7 |
|
154 |
|
43 |
Deferred income tax benefit |
|
(89) |
|
8 |
|
(99) |
|
(4) |
Pension and other postretirement funding more than cost |
|
(26) |
|
(10) |
|
(30) |
|
(35) |
Other |
|
17 |
|
(8) |
|
16 |
|
(4) |
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities, net of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
(186) |
|
93 |
|
(422) |
|
63 |
Inventories |
|
140 |
|
29 |
|
120 |
|
161 |
Other assets |
|
74 |
|
34 |
|
(31) |
|
21 |
Accounts payable |
|
(214) |
|
(110) |
|
(226) |
|
(438) |
Income taxes |
|
(29) |
|
(55) |
|
34 |
|
(46) |
Accrued liabilities and other |
|
110 |
|
14 |
|
155 |
|
(20) |
Net cash provided by operating activities |
|
320 |
|
378 |
|
702 |
|
948 |
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(512) |
|
(202) |
|
(897) |
|
(661) |
Cash paid for purchase of businesses, net of cash acquired |
|
(688) |
|
(29) |
|
(716) |
|
(29) |
Proceeds from corporate owned life insurance |
|
2 |
|
- |
|
2 |
|
- |
Proceeds from sale of property, plant and equipment |
|
12 |
|
10 |
|
15 |
|
11 |
Other |
|
1 |
|
4 |
|
1 |
|
2 |
Net cash used for investing activities |
|
(1,185) |
|
(217) |
|
(1,595) |
|
(677) |
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Additions to debt |
|
315 |
|
8 |
|
3,127 |
|
77 |
Repayments of debt |
|
(1,607) |
|
(76) |
|
(1,640) |
|
(120) |
Revolving credit facilities repayments, net |
|
- |
|
- |
|
(4) |
|
(4) |
Changes in commercial paper, net |
|
(33) |
|
- |
|
(33) |
|
- |
Other debt additions, net |
|
17 |
|
- |
|
17 |
|
- |
Repayments of lease liabilities |
|
(11) |
|
- |
|
(12) |
|
(2) |
Debt issuance costs |
|
(15) |
|
- |
|
(44) |
|
- |
Tax paid in connection with shares withheld from employees |
|
(21) |
|
- |
|
(21) |
|
- |
Purchases of treasury stock |
|
- |
|
- |
|
(27) |
|
(30) |
Cash dividends paid to stockholders |
|
(158) |
|
- |
|
(493) |
|
(299) |
Other |
|
- |
|
- |
|
(1) |
|
- |
Net cash provided by (used for) financing activities |
$ |
(1,513) |
$ |
(68) |
$ |
869 |
$ |
(378) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
4 |
|
(32) |
|
(25) |
|
(5) |
(Decrease) increase in cash, cash equivalents and restricted cash |
$ |
(2,374) |
$ |
61 |
$ |
(49) |
$ |
(112) |
Cash, cash equivalents and restricted cash at beginning of period |
|
3,325 |
|
668 |
|
1,000 |
|
841 |
Cash, cash equivalents and restricted cash at end of period |
$ |
951 |
$ |
729 |
$ |
951 |
$ |
729 |
Non-GAAP Financial Measures and Reconciliations
Smurfit Westrock plc (“Smurfit Westrock”) reports its financial results in accordance with accounting principles generally accepted in
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 (loss) income before income taxes, depreciation, depletion and amortization, amortization of fair value step up on inventory, transaction and integration-related expenses associated with the Combination, interest expense, net, pension and other postretirement non-service (benefit) expense, net, share-based compensation expense, other expense, net, restructuring costs, legislative or regulatory fines and reimbursements, losses at closed facilities and impairment of goodwill and other assets. 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.
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 margin percentages |
|||||||
|
Three months ended |
Nine months ended |
||||||
|
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||
Net (loss) income |
$ |
(150) |
$ |
229 |
$ |
173 |
$ |
777 |
Income tax expense |
|
33 |
|
73 |
|
164 |
|
258 |
Depreciation, depletion and amortization |
|
564 |
|
147 |
|
872 |
|
430 |
Amortization of fair value step up on inventory |
|
227 |
|
- |
|
227 |
|
- |
Transaction and integration-related expenses associated with the Combination |
|
267 |
|
17 |
|
350 |
|
17 |
Interest expense, net |
|
167 |
|
39 |
|
225 |
|
109 |
Pension and other postretirement non-service (benefit) expense, net |
|
(8) |
|
9 |
|
31 |
|
29 |
Share-based compensation expense |
|
123 |
|
7 |
|
154 |
|
43 |
Other expense, net |
|
13 |
|
4 |
|
13 |
|
19 |
Other adjustments (1) |
|
29 |
|
- |
|
11 |
|
- |
Adjusted EBITDA |
$ |
1,265 |
$ |
525 |
$ |
2,220 |
$ |
1,682 |
|
|
|
|
|
|
|
|
|
Net Income Margin (Net Income/Net Sales) |
|
( |
|
|
|
|
|
|
Adjusted EBITDA Margin (Adjusted EBITDA/Net Sales) |
|
|
|
|
|
|
|
|
(1) Other adjustments for the three months ended September 30, 2024 include restructuring costs of
Other adjustments for the nine months ended September 30, 2024 include restructuring costs of |
Reconciliations to Most Comparable GAAP Measure (continued)
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 |
Nine months ended |
||||||
|
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||
Net cash provided by operating activities |
$ |
320 |
$ |
378 |
$ |
702 |
$ |
948 |
Adjustments: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(512) |
|
(202) |
|
(897) |
|
(661) |
Free Cash Flow |
$ |
(192) |
$ |
176 |
$ |
(195) |
$ |
287 |
Adjustments: |
|
|
|
|
|
|
|
|
Transaction and integration costs |
|
307 |
|
17 |
|
364 |
|
17 |
Bridge facility fees |
|
- |
|
8 |
|
- |
|
8 |
Restructuring costs |
|
45 |
|
13 |
|
45 |
|
13 |
Tax on above items |
|
(42) |
|
- |
|
(42) |
|
- |
Adjusted Free Cash Flow |
$ |
118 |
$ |
214 |
$ |
172 |
$ |
325 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030343869/en/
Ciarán Potts
Smurfit Westrock
T: +353 1 202 71 27
E: ir@smurfitwestrock.com
FTI Consulting
T: +353 1 765 0800
E: smurfitwestrock@fticonsulting.com
Source: Smurfit Westrock plc
FAQ
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