Smurfit Westrock (NYSE: SW) Q1 2026 earnings drop as costs surge
Filing Impact
Filing Sentiment
Form Type
10-Q
Smurfit Westrock delivered modestly higher net sales but sharply lower profit for the three months ended March 31, 2026. Net sales edged up to $7,712 million from $7,656 million, mainly from a positive foreign currency impact that offset weaker volumes.
Net income attributable to common shareholders fell to $65 million from $384 million, and diluted EPS declined to $0.12 from $0.73. Management cites higher cost of goods sold driven by economic downtime, $70 million of accelerated depreciation tied to machine closures, adverse weather impacts of $65 million and higher freight costs, partly offset by lower volumes. Adjusted EBITDA declined to $1,076 million from $1,252 million.
Operating cash flow decreased to $204 million from $235 million, while the company stepped up capital expenditures to $624 million. Total debt rose to $14,255 million, but available liquidity remained sizable at $5,337 million, including $674 million of cash. The board approved a quarterly dividend of $0.4523 per share, payable in June 2026.
Positive
- None.
Negative
- None.
Insights
Higher costs and heavy capex drove a sharp earnings drop despite flat sales.
Smurfit Westrock showed stable demand but weaker profitability. Net sales were broadly flat at $7,712 million, yet net income dropped to $65 million as cost of goods sold rose by $365 million, squeezing margins and cutting EPS to $0.12.
Key cost drivers were economic downtime, adverse weather and freight, plus $70 million of accelerated depreciation from machine closures and higher impairment and restructuring charges. Adjusted EBITDA declined to $1,076 million, indicating pressure on underlying earnings even after excluding one‑off items.
Cash generation softened, with operating cash flow at $204 million while capital expenditures reached $624 million, funded partly by higher debt, which increased to $14,255 million. However, liquidity of $5,337 million and a maintained quarterly dividend of $0.4523 per share suggest the company still has financial flexibility heading into the rest of 2026.
Key Figures
Net sales: $7,712 million
Net income attributable to common shareholders: $65 million
Diluted EPS: $0.12 per share
+5 more
8 metrics
Net sales
$7,712 million
Three months ended March 31, 2026
Net income attributable to common shareholders
$65 million
Three months ended March 31, 2026
Diluted EPS
$0.12 per share
Three months ended March 31, 2026
Adjusted EBITDA
$1,076 million
Three months ended March 31, 2026
Net cash from operating activities
$204 million
Three months ended March 31, 2026
Capital expenditures
$624 million
Three months ended March 31, 2026
Total debt
$14,255 million
As of March 31, 2026
Available liquidity
$5,337 million
Cash plus undrawn committed facilities at March 31, 2026
Key Terms
Adjusted EBITDA, economic downtime, receivables securitization facilities, accounts receivable monetization agreements, +2 more
6 terms
Adjusted EBITDA financial
"Segment profitability is measured based on Adjusted EBITDA, defined as income before income taxes..."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
economic downtime financial
"We were also impacted by lower volumes, economic downtime, adverse weather and higher freight costs."
receivables securitization facilities financial
"We have three trade receivables securitization programs."
accounts receivable monetization agreements financial
"The following table presents a summary of the accounts receivable monetization agreements..."
supplier finance programs financial
"Smurfit Westrock uses a variety of working capital management strategies including supply chain financing (“SCF”) programs..."
Variable Interest Entities financial
"For the details of the structure, purpose, legal terms and conclusions as to the primary beneficiary of these Variable Interest Entities (“VIEs”)..."
A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended March 31, 2026
OR
For the transition period from to
Commission File Number: 001-42161
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
N/A | ||
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 24, 2026, the registrant had 524,464,078 ordinary shares, nominal value $0.001 per share, issued and outstanding.
2
TABLE OF CONTENTS
Page | ||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 3 | |
PART I | FINANCIAL INFORMATION | 5 |
Item 1. | Financial Statements | 5 |
Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and March 31, 2025 | 5 | |
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and March 31, 2025 | 6 | |
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | 7 | |
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and March 31, 2025 | 8 | |
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2026 and March 31, 2025 | 9 | |
Notes to Condensed Consolidated Financial Statements | 11 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 36 |
Item 4. | Controls and Procedures | 36 |
PART II | OTHER INFORMATION | 37 |
Item 1. | Legal Proceedings | 37 |
Item 1A. | Risk Factors | 37 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 37 |
Item 3. | Defaults Upon Senior Securities | 37 |
Item 4. | Mine Safety Disclosures | 37 |
Item 5. | Other Information | 37 |
Item 6. | Exhibits | 38 |
Signatures | 39 |
3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes certain “forward-looking statements” (including within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) 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 (re-registered as
Smurfit Kappa Limited) (“Smurfit Kappa”) and WestRock Company (“WestRock”) (the “Combination”) (including, but not limited
to, synergies, as well as our scale, geographic reach and product portfolio), our medium-term plan, demand outlook, operating
environment and the impact of announced closures and additional economic downtime, and any other statements regarding Smurfit
Westrock’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 Smurfit
Westrock, 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” 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 plans, estimates or expectations include: our ability to deliver on our medium-term
plan; changes in demand environment; our ability to deliver on our closure plan and associated efforts; our future cash payments
associated with these initiatives; potential future cost savings associated with such initiatives; the amount of charges and the timing of
such charges or actions described herein; potential future impairment charges; accuracy of assumptions associated with the charges;
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; geo-economic fragmentation
and protectionism such as tariffs, trade wars or similar governmental actions affecting the flows of goods, services or currency
(including the implementation of tariffs by the U.S. federal government and reciprocal tariffs and other protectionist or retaliatory
measures governments in Europe, Asia, and other countries have taken or may take in response); the impact of prolonged or recurring
U.S. federal government shutdowns and any resulting volatility in the capital markets or interruptions in the Company’s access to
capital; the impact of public health crises, such as pandemics 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 or other weather-event,
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; 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 the Sarbanes Oxley Act of 2002, as amended, 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, geopolitical
uncertainty, and conditions that may result from legislative, regulatory, trade and policy changes associated with the current or
subsequent Irish, U.S. or U.K. administrations; legal proceedings instituted against the Company; actions by third parties, including
4
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 U.S. corporation or be subject to certain unfavorable U.S. 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, including
the Company’s most recent Annual Report on Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on
Form 10-Q.
The Company’s forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q or as of the date they are
made. 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 U.K. Listing Rules, the Disclosure Guidance and Transparency Rules, the U.K. 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.
5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Smurfit Westrock plc
Condensed Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
Three months ended March 31, | |||
2026 | 2025 | ||
Net sales | $ | $ | |
Cost of goods sold | ( | ( | |
Gross profit | |||
Selling, general and administrative expenses | ( | ( | |
Impairment and restructuring costs | ( | ( | |
Transaction and integration-related expenses associated with the Combination | ( | ||
Operating profit | |||
Interest expense, net | ( | ( | |
Pension and other postretirement non-service income, net | |||
Other expense, net | ( | ( | |
Income before income taxes | |||
Income tax expense | ( | ( | |
Net income | |||
Net loss attributable to noncontrolling interests | |||
Net income attributable to common shareholders | $ | $ | |
Basic earnings per share attributable to common shareholders | $ | $ | |
Diluted earnings per share attributable to common shareholders | $ | $ | |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements. | |||
6
Smurfit Westrock plc
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(in millions)
Three months ended March 31, | |||
2026 | 2025 | ||
Net income | $ | $ | |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation (loss) gain | ( | ||
Defined benefit pension and other postretirement benefit plans | ( | ||
Net gain on cash flow hedges | |||
Other comprehensive (loss) income, net of tax | ( | ||
Comprehensive income | |||
Comprehensive loss attributable to noncontrolling interests | |||
Comprehensive income attributable to common shareholders | $ | $ | |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements. | |||
7
Smurfit Westrock plc
Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except share and per share data)
March 31, 2026 | December 31, 2025 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents (amounts related to consolidated variable interest entities of $ $ | $ | $ | |
Accounts receivable, net (amounts related to consolidated variable interest entities of $ $ | |||
Inventories | |||
Other current assets | |||
Total current assets | |||
Property, plant and equipment, net | |||
Goodwill | |||
Intangibles, net | |||
Prepaid pension asset | |||
Other non-current assets (amounts related to consolidated variable interest entities of $ $ | |||
Total assets | $ | $ | |
Liabilities and Equity | |||
Current liabilities: | |||
Accounts payable | $ | $ | |
Accrued expenses | |||
Accrued compensation and benefits | |||
Current portion of debt | |||
Other current liabilities | |||
Total current liabilities | |||
Non-current debt due after one year (amounts related to consolidated variable interest entities of $ | |||
Deferred tax liabilities | |||
Pension liabilities and other postretirement benefits, net of current portion | |||
Other non-current liabilities (amounts related to consolidated variable interest entities of $ and $ | |||
Total liabilities | |||
Commitments and Contingencies (Note 13) | |||
Equity: | |||
Preferred stock, $ | |||
Common stock, $ shares outstanding at March 31, 2026 and December 31, 2025, respectively | |||
Treasury stock, at cost; 2025, respectively | ( | ( | |
Capital in excess of par value | |||
Accumulated other comprehensive loss | ( | ( | |
Retained earnings | |||
Total shareholders’ equity | |||
Noncontrolling interests | |||
Total equity | |||
Total liabilities and equity | $ | $ |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
8
Smurfit Westrock plc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)
Three months ended March 31, | |||
2026 | 2025 | ||
Operating activities: | |||
Net income | $ | $ | |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | |||
Impairment of assets | |||
Cash surrender value increase in excess of premiums paid | ( | ( | |
Share-based compensation expense | |||
Deferred income tax benefit | ( | ( | |
Pension and other postretirement funding more than cost | ( | ( | |
Other | ( | ||
Change in operating assets and liabilities, net of acquisitions and divestitures: | |||
Accounts receivable | ( | ( | |
Inventories | ( | ||
Other assets | ( | ( | |
Accounts payable | ( | ( | |
Income taxes | ( | ( | |
Accrued liabilities and other | ( | ( | |
Net cash provided by operating activities | |||
Investing activities: | |||
Capital expenditures | ( | ( | |
Cash paid for purchase of businesses, net of cash acquired | ( | ( | |
Proceeds from corporate owned life insurance | |||
Proceeds from sale of property, plant and equipment | |||
Other | |||
Net cash used for investing activities | ( | ( | |
Financing activities: | |||
Additions to debt | |||
Repayments of debt | ( | ( | |
Debt issuance costs | ( | ( | |
Changes in commercial paper, net | |||
Other debt additions (repayments), net | ( | ||
Repayments of finance lease liabilities | ( | ( | |
Proceeds from re-issuance of shares from treasury stock | |||
Tax paid in connection with shares withheld from employees | ( | ( | |
Cash dividends paid to shareholders | ( | ( | |
Other | |||
Net cash provided by financing activities | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ||
Decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at beginning of period | |||
Cash and cash equivalents at end of period | $ | $ | |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
9
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
Shares of Common Stock | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | Noncontrolling Interest | Total | |
Balance at December 31, 2025 | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income | — | — | — | — | — | ( | |||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | ( | — | ( |
Share-based compensation | — | — | — | — | — | — | |||
Shares distributed by Smurfit Kappa Employee Trust, net of tax paid in connection with shares withheld from employees | — | — | ( | ( | — | ( | — | ( | |
Re-issuance of shares by Smurfit Kappa Employee Trust | — | — | — | — | — | ||||
Issuance of common stock net of tax paid in connection with shares withheld from employees | — | — | ( | — | ( | — | ( | ||
Cancellation of shares held in treasury stock by Smurfit Kappa Employee Trust | — | — | — | ( | — | — | |||
Dividends declared ($ | — | — | — | ( | — | ( | — | ( | |
Balance at March 31, 2026 | $ | $ | $( | $ | $( | $ | $ | $ |
(1) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
10
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
Shares of Common Stock | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | Noncontrolling Interest | Total | |
Balance at December 31, 2024 | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income | — | — | — | — | — | ( | |||
Other comprehensive income, net of tax | — | — | — | — | — | — | |||
Share-based compensation | — | — | — | — | — | — | |||
Shares distributed by Smurfit Kappa Employee Trust | — | — | ( | — | — | — | |||
Issuance of common stock net of tax paid in connection with shares withheld from employees | — | — | ( | — | ( | — | ( | ||
Cancellation of shares held in treasury stock by Smurfit Kappa Employee Trust | — | — | — | ( | — | — | |||
Dividends declared ($ | — | — | — | ( | — | ( | — | ( | |
Balance at March 31, 2025 | $ | $ | $( | $ | $( | $ | $ | $ |
(1) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
11
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Unless the context otherwise requires, or unless indicated otherwise, “we”, “us”, “our”, “Smurfit Westrock” and “the Company” refer
to the business of Smurfit Westrock plc, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.
Smurfit Westrock plc is a company limited by shares that is incorporated in Ireland. We are a multinational provider of sustainable
fiber-based paper and packaging solutions. We partner with our customers to provide differentiated, sustainable paper and packaging
solutions that enhance our customers’ prospects of success in their markets. Our team members support customers around the world
from our operating and business locations in North America, South America, Europe, Asia, Africa, and Australia.
We derived the Condensed Consolidated Balance Sheet at December 31, 2025 from the audited consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Consolidated Financial
Statements”). In the opinion of management, all normal recurring adjustments necessary for a fair statement of the Condensed
Consolidated Financial Statements have been included for the interim periods reported.
The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting
principles generally accepted in the U.S. for interim financial information and with Article 10 of Regulation S-X of the Securities and
Exchange Commission. Accordingly, they omit certain notes and other information from the 2025 Consolidated Financial Statements.
Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the 2025 Consolidated Financial
Statements. The results for the three months ended March 31, 2026 are not necessarily indicative of results that may be expected for
the full year.
The preparation of the Condensed Consolidated Financial Statements requires management to make certain estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements, disclosures
about gain contingencies and contingent liabilities and the reported amounts of revenues and expenses, including income taxes during
the reporting period.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
There have been no changes to the Company’s significant accounting policies as described in “Note 1. Description of Business and
Summary of Significant Accounting Policies” of the 2025 Consolidated Financial Statements.
During the three months ended March 31, 2026 there were no newly issued or newly applicable accounting pronouncements adopted
that had, or are expected to have, a material impact on the Condensed Consolidated Financial Statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). This ASU requires new financial
statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03
will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.
Adoption is either with a prospective method or a retrospective method of transition. Early adoption is permitted. The Company is
currently evaluating the impact of this standard on its disclosures in the consolidated financial statements.
12
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
We report our financial results of operations in the following three
i.North America, which includes operations in the U.S., Canada and Mexico.
ii.Europe, the Middle East and Africa (“MEA”) and Asia-Pacific (“APAC”).
iii.Latin America (“LATAM”), which includes operations in Central America and the Caribbean, Argentina, Brazil, Chile, Colombia,
Ecuador and Peru.
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 income, net, share-based
compensation expense, other expense, net, impairment and restructuring costs, 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.
regularly provided to the Company’s chief operating decision maker (“CODM”).
Three months ended March 31, 2026 | North America | Europe, MEA and APAC | LATAM | Total | |||
Net sales (unaffiliated customers) | $ | $ | $ | $ | |||
Add net sales (intersegment) | |||||||
Net sales (aggregate) | |||||||
Less segment expenses: | |||||||
Segment cost of goods sold | ( | ( | ( | ||||
Segment selling, general and administrative expenses | ( | ( | ( | ||||
( | ( | ( | ( | ||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||
Unallocated corporate costs | ( | ||||||
Depreciation, depletion and amortization | ( | ||||||
Impairment and restructuring costs | ( | ||||||
Interest expense, net | ( | ||||||
Pension and other postretirement non-service income, net | |||||||
Share-based compensation expense | ( | ||||||
Other expense, net | ( | ||||||
Other adjustments | ( | ||||||
Income before income taxes | $ |
Other adjustments in the table above include losses at closed facilities of $13 million.
13
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Three months ended March 31, 2025 | North America | Europe, MEA and APAC | LATAM | Total | |||
Net sales (unaffiliated customers) | $ | $ | $ | $ | |||
Add net sales (intersegment) | |||||||
Net sales (aggregate) | |||||||
Less segment expenses: | |||||||
Segment cost of goods sold | ( | ( | ( | ||||
Segment selling, general and administrative expenses | ( | ( | ( | ||||
( | ( | ( | ( | ||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||
Unallocated corporate costs | ( | ||||||
Depreciation, depletion and amortization | ( | ||||||
Impairment and restructuring costs | ( | ||||||
Transaction and integration-related expenses associated with the Combination | ( | ||||||
Interest expense, net | ( | ||||||
Pension and other postretirement non-service income, net | |||||||
Share-based compensation expense | ( | ||||||
Other expense, net | ( | ||||||
Other adjustments | ( | ||||||
Income before income taxes | $ |
Other adjustments in the table above include losses at closed facilities of $2 million.
Three months ended March 31, | |||
2026 | 2025 | ||
Capital expenditures: | |||
North America | $ | $ | |
Europe, MEA and APAC | |||
LATAM | |||
Total per reportable segments | |||
Corporate | |||
Total capital expenditures | $ | $ | |
14
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Disaggregated Revenue
months ended March 31, 2026 and 2025. Net sales are attributed to segments based on the location of production.
Three months ended March 31, 2026 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Three months ended March 31, 2025 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Packaging revenue is derived mainly from the sale of corrugated and consumer packaging products. The remainder of packaging
revenue is composed of bag-in-box, packaging solutions and other paper-based packaging products.
Revenue Contract Balances
Contract assets relate to the manufacture of certain products that have no alternative use to us, with right to payment for performance
completed to date on these products, including a reasonable profit. Contract assets are reduced when the customer takes title to the
goods and assumes the risks and rewards for the goods. Contract liabilities represent obligations to transfer goods or services to a
customer for which we have received consideration and are reduced once control of the goods is transferred to the customer.
On the Condensed Consolidated Balance Sheets, contract assets reported within “Other current assets” were $167 million and
$170 million at March 31, 2026 and December 31, 2025, respectively, and contract liabilities reported within “Other current
liabilities” were $15 million and $6 million at March 31, 2026 and December 31, 2025, respectively.
March 31, | December 31, | ||
2026 | 2025 | ||
Gross accounts receivable | $ | $ | |
Less: Allowances | ( | ( | |
Accounts receivable | $ | $ |
Allowances include the reserves for allowance for estimated credit impairment losses, returns, early settlement discounts and rebates
(where netting requirements are met).
15
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
March 31, | December 31, | ||
2026 | 2025 | ||
Finished goods | $ | $ | |
Work-in-progress | |||
Raw materials | |||
Consumables and spare parts | |||
Inventories | $ | $ |
March 31, | December 31, | ||
2026 | 2025 | ||
Land and buildings | $ | $ | |
Plant and equipment | |||
Construction-in-progress | |||
Finance lease right-of-use assets | |||
Property, plant and equipment at cost, excluding forestlands | |||
Less: Accumulated depreciation and impairment | ( | ( | |
Property, plant and equipment, net, excluding forestlands | |||
Forestlands, net of depletion | |||
Property, plant and equipment, net | $ | $ |
Depreciation and depletion expense for the three months ended March 31, 2026 and 2025 was $690 million and $569 million,
respectively. This is recognized within “Cost of goods sold” and “Selling, general and administrative expenses” in the Condensed
Consolidated Statements of Operations. Depreciation and depletion expense for the three months ended March 31, 2026 includes
$70 million of accelerated depreciation related to machine closures (Three months ended March 31, 2025: $— million).
Non-cash additions to property, plant and equipment included within accounts payable were $314 million and $518 million at
March 31, 2026 and December 31, 2025, respectively.
Three months ended March 31, | |||
2026 | 2025 | ||
Interest expense | $( | $( | |
Interest income | |||
Interest expense, net | $( | $( | |
Total cash paid for interest, net of interest received was $134 million and $133 million for the three months ended March 31, 2026 and
2025, respectively. Of this, capitalized interest paid was $2 million and $7 million for the three months ended March 31, 2026 and
2025, respectively.
16
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
2 in the fair value hierarchy) were as follows:
March 31, 2026 | December 31, 2025 | ||||||
Book Value | Fair Value | Book Value | Fair Value | ||||
Debt with fixed interest rates | $ | $ | $ | $ | |||
The fair value of the Company's debt with fixed interest rates is based on quoted market prices. With the exception of debt with fixed
interest rates, the carrying amounts of all other debt instruments approximate their fair values. The variable nature and repricing dates
of the receivables securitization facilities and the revolving credit facility result in carrying values approximating their fair values.
Both the revolving credit facility and the receivables securitization facilities are classified as Level 2 in the fair value hierarchy.
Accounts Receivable Monetization Agreements
2026 and March 31, 2025:
Three months ended March 31, | |||
2026 | 2025 | ||
Receivable from financial institutions at January 1 | $ | $ | |
Receivables sold to the financial institutions and derecognized | ( | ( | |
Receivables collected by financial institutions | |||
Cash payments to financial institutions | ( | ( | |
Receivable from financial institutions at March 31 | $ | $ | |
Receivables sold under these accounts receivable monetization agreements as of the respective balance sheet dates were approximately
$596 million and $659 million at March 31, 2026 and December 31, 2025, respectively.
Cash proceeds or payments related to the receivables sold are included in “Net cash provided by operating activities” in the Condensed
Consolidated Statements of Cash Flows in the “Accounts receivable” line item. The expense related to the sale of receivables was
$8 million for the three months ended March 31, 2026 (March 31, 2025: $10 million). The expense recorded may vary depending on
current rates and levels of receivables sold and is recorded in “Other expense, net” in the Condensed Consolidated Statements of
Operations. Although the sales are made without recourse, we maintain continuing involvement with the receivables sold as we
provide collections services related to the transferred assets. The associated servicing liability is not material given the high credit
17
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
March 31, | December 31, | ||
2026 | 2025 | ||
$ | $ | $ | |
$ | |||
$ | |||
$ | |||
€ | |||
€ | |||
€ | |||
$ | |||
$ | |||
$ | |||
€ | |||
$ | |||
$ | |||
€ | |||
$ | |||
€ | |||
$ | |||
$ | |||
$ | |||
€ | |||
$ | |||
$ | |||
$ | |||
Commercial paper | |||
Vendor financing and commercial card programs | |||
Farm credit facility | |||
Other bank loans | |||
Finance lease obligations | |||
Total debt, excluding fair value adjustments, bond discounts and debt issuance costs | |||
Unamortized fair value adjustments, bond discounts and debt issuance costs | ( | ( | |
Total debt | |||
Less: Current portion of debt | ( | ( | |
Non-current debt due after one year | $ | $ |
For the terms attached to the senior notes, the revolving credit facility, the term loans and the commercial paper programs, refer to the
narrative included in “Note 15. Debt” of the 2025 Consolidated Financial Statements. The carrying amount of borrowings which are
designated as net investment hedges, as outlined therein, has not changed materially and no ineffectiveness was recognized in the
period.
At March 31, 2026, all of our debt was unsecured with the exception of our receivables securitization facilities and finance lease
obligations.
There were no new issuances or redemptions during the period in relation to the senior notes.
18
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Receivables Securitization Facilities
We have three trade receivables securitization programs. For the size, terms and maturities attached to these programs, refer to the
narrative included in “Note 15. Debt” of the 2025 Consolidated Financial Statements.
As of March 31, 2026, the gross amount of receivables collateralizing the euro denominated trade receivables programs was
€728 million (December 31, 2025: €749 million). At March 31, 2026, maximum available borrowings, when excluding amounts
drawn under these programs, were $13 million (December 31, 2025: $13 million).
As of March 31, 2026, the gross amount of receivables collateralizing the U.S. dollar denominated trade receivables program was
$1,032 million (December 31, 2025: $1,043 million). At March 31, 2026, maximum available borrowings, when excluding amounts
drawn under these programs, were $150 million (December 31, 2025: $47 million).
The effective tax rate for the three months ended March 31, 2026 was 25.0 %. The effective tax rate was primarily impacted by (i) the
tax benefit associated with the release of $8 million of unrecognized tax benefits, (ii) along with the increase of $6 million of accrued
interest and penalties associated with the unrecognized tax benefits, (iii) tax benefit associated with a non-recurring adjustment to
certain deferred tax assets of $11 million (iv) losses during the period that have not been recognized due to uncertainty regarding their
future realization, and (v) certain non-deductible expenses and other non-recurring items.
The effective tax rate for the three months ended March 31, 2025 was 2.1 %. The effective tax rate was primarily impacted by the tax
benefit associated with the resolution of $72 million of unrecognized tax benefits (due to the lapse of the statute of limitations), along
with the release of $24 million of accrued interest and penalties associated with the unrecognized tax benefits. The effective tax rate
was further impacted by the geographical mix of where earnings are generated and certain non-deductible expenses.
During the three months ended March 31, 2026 and March 31, 2025, cash paid for income taxes, net of refunds, was $105 million and
$107 million, respectively.
19
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
following:
Defined Benefit Pension Plans | |||||||
U.S. Plans | Non-U.S. Plans | ||||||
Three months ended March 31, | |||||||
2026 | 2025 | 2026 | 2025 | ||||
Service cost | $ | $ | $ | $ | |||
Interest cost | |||||||
Expected return on assets | ( | ( | ( | ( | |||
Amortization of: | |||||||
Net actuarial loss | |||||||
Prior service credit | ( | ||||||
Net periodic benefit (income) cost | $( | $( | $ | $ | |||
Service cost is included within “Cost of goods sold” and “Selling, general and administrative expenses” while all other components
are recorded within “Pension and other postretirement non-service income, net”.
Pension Plan Contributions and Benefit Payments
There were no changes in the period in connection to the funding standards and funding requirements for our qualified and approved
pension plans.
The contributions paid and expected to be paid during the current fiscal year are not significantly different from the amounts as
disclosed in “Note 19. Retirement Plans and Deferred Compensation Arrangements” of the 2025 Consolidated Financial Statements.
Deferred Compensation Arrangements
We have financial assets related to supplemental retirement savings plans (“Supplemental Plans”) that are carried at cash surrender
value. These Supplemental Plans are non-qualified deferred compensation plans where participants’ accounts are credited with
investment gains and losses in accordance with their investment election or elections. The investment alternatives under the
Supplemental Plans are generally similar to investment alternatives available under 401(k) plans. Assets and liabilities held in respect
of these Supplemental Plans were carried at $204 million and $158 million, respectively, as of March 31, 2026 (December 31, 2025:
20
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Three months ended March 31, | |||
2026 | 2025 | ||
Numerator: | |||
Net income attributable to common shareholders | $ | $ | |
Denominator: | |||
Basic weighted average shares outstanding | |||
Effect of dilutive share options | |||
Diluted weighted average shares outstanding | |||
Basic earnings per share attributable to common shareholders | $ | $ | |
Diluted earnings per share attributable to common shareholders | $ | $ | |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. These comprise restricted stock units, performance stock units and performance
shares issued under the Company’s long-term incentive plans.
For the three months ended March 31, 2026, and 2025, respectively, there were no
compensation awards excluded from the diluted earnings per share computation because the effect would have been antidilutive.
Brazil Tax Liability
Our subsidiary, WestRock, is challenging claims by the Brazil Federal Revenue Department that we underpaid taxes as a result of
amortization of goodwill generated by the 2002 merger of two of its Brazilian subsidiaries. The matter has proceeded through the
Brazil Administrative Council of Tax Appeals (“CARF”) principally in two proceedings, covering tax years 2003 to 2008 and 2009 to
2012. WestRock was assessed additional taxes, penalties, and interest in both CARF proceedings. In the proceeding for the tax years
2003 to 2008, WestRock was also assessed penalties and interest for fraud, but WestRock won the fraud claim in the proceeding for
the tax years 2009 to 2012. WestRock subsequently filed two lawsuits in Brazilian federal courts seeking annulment of the adverse
CARF decisions. In February 2025, the federal court adjudicating the WestRock challenge to CARF's decision against WestRock for
the 2003 and 2008 period issued a ruling in favor of WestRock nullifying the financial assessments in that case. The decision of the
federal court was appealed by the tax authorities.
We assert that we have no liability in these matters. The total amount in dispute in the two cases before CARF and in the annulment
actions relating to the claimed tax deficiency was R$800 million ($153 million) as of March 31, 2026, including various penalties and
interest. Resolution of the tax positions could have a material adverse effect on our cash flows and results of operations or materially
benefit our results of operations in future periods depending upon their ultimate resolution.
21
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Asbestos-Related Litigation
We have been named as a defendant in asbestos-related personal injury litigation, primarily in relation to the historical operations of
certain companies acquired by the Company. To date, the costs resulting from the litigation, including settlement costs, have not been
significant. We accrue for the estimated value of pending claims and litigation costs using historical claims information, as well as the
estimated value of future claims based on our historical claims experience. As of March 31, 2026, there were approximately 770 such
lawsuits. We believe that we have substantial insurance coverage, subject to applicable deductibles and policy limits, with respect to
asbestos claims. We also believe we have valid defenses to these asbestos-related personal injury claims and intend to continue to
contest these matters vigorously. Should the Company’s litigation profile change substantially, or if there are adverse developments in
applicable law, it is possible that the Company could incur significantly more costs resolving these cases. We record asbestos-related
insurance recoveries that are deemed probable. In assessing the probability of insurance recovery, we make judgments concerning
insurance coverage that we believe are reasonable and consistent with our historical dealings and our knowledge of any pertinent
solvency issues surrounding the insurers. The Company currently does not expect the resolution of pending asbestos litigation and
proceedings to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. As of
March 31, 2026, the Company had estimated liabilities in respect of these matters of $83 million and estimated insurance recoveries of
$51 million.
Environmental Contingencies
The Company is subject to a variety of environmental laws and regulations.
The Company has recorded aggregate accruals of $67 million and $67 million on an undiscounted basis at March 31, 2026 and
December 31, 2025, respectively. The accruals primarily relate to environmental matters, including cleanup, investigation and
remediation obligations arising in connection with some of our current or former facilities, as well as third-party owned sites.
Liabilities recorded for environmental contingencies are estimates of the probable costs based upon available information and these
estimates may change. However, the Company does not believe that its potential environmental obligations will have a material
adverse effect upon its liquidity, results of operations, or financial condition.
Italian Competition Authority Investigation
In August 2019, the Italian Competition Authority (the “AGCM”) notified approximately 30 companies, of which Smurfit Kappa
Italia, a subsidiary of Smurfit Westrock, was one, that an investigation had found the companies to have engaged in anti-competitive
practices, in relation to which the AGCM levied a fine of approximately $138 million on Smurfit Kappa Italia, which was paid in
2021.
In October 2019, Smurfit Kappa Italia appealed the AGCM’s decision to the First Administrative Court of Appeal (TAR Lazio),
however Smurfit Kappa Italia was later notified that this appeal had been unsuccessful. In September 2021, Smurfit Kappa Italia filed
a further appeal to the Council of State which published its ruling in February 2023. While some grounds of appeal were dismissed,
the Council of State upheld Smurfit Kappa Italia’s arguments regarding the quantification of the fine. As a result, the AGCM was
directed to recalculate Smurfit Kappa Italia’s fine. On March 7, 2024, the AGCM notified Smurfit Kappa Italia that its fine had been
reduced by approximately $18 million and reimbursed the Company for this amount in 2024. Smurfit Kappa Italia appealed the
amount of this reduction and on April 22, 2026, the Council of State directed the AGCM to further reduce the fine by approximately
$16 million, plus interest.
Separate to these proceedings regarding the fine, in May 2023, Smurfit Kappa Italia filed an application with the Council of State for
revocation of the February 2023 ruling to the extent that it failed to consider certain pleas that had been raised by Smurfit Kappa Italia
on appeal. That application was rejected in July 2025.
22
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
After publication of the AGCM’s August 2019 decision, a number of purchasers of corrugated sheets and boxes initiated litigation
proceedings against Smurfit Kappa companies, alleging that they were harmed by the alleged anti-competitive practices and seeking
damages. In addition, other parties have threatened litigation against Smurfit Westrock seeking damages (either specified or
unspecified). The Company believes it has significant defenses to the damages claims and intends to vigorously defend the current and
any future litigation.
International Arbitration Against Venezuela
Smurfit Kappa, which is now a subsidiary of Smurfit Westrock, announced in 2018 that due to the Government of Venezuela’s
measures, Smurfit Kappa no longer exercised control over the business of Smurfit Kappa Carton de Venezuela. Smurfit Kappa’s
Venezuelan operations were therefore deconsolidated in the third quarter of 2018. Later that year, Smurfit Kappa’s wholly owned
subsidiary, Smurfit Holdings BV, filed an international arbitration claim against the Bolivarian Republic of Venezuela before the
World Bank’s International Center for Settlement of Investment Disputes (“ICSID”) seeking compensation for Venezuela’s unlawful
seizure of its Venezuelan business as well as for other arbitrary, inconsistent and disproportionate State measures that destroyed the
value of its investments in Venezuela. Following the exchange of written submissions, an oral hearing was held in September 2022 in
Paris.
On August 28, 2024, upon the completion of its deliberations, the arbitral tribunal issued an award granting Smurfit Holdings BV,
then a wholly owned subsidiary of Smurfit Westrock, compensation in excess of $469 million, plus legal costs of $5 million, plus
interest from May 31, 2024, until the date of payment (the “Award”). In September 2024, Smurfit Holdings BV initiated proceedings
against the Bolivarian Republic of Venezuela to enforce the Award. In December 2024, the Bolivarian Republic of Venezuela applied
to ICSID to annul the Award. An Annulment Committee has been formed by ICSID to decide on this application and an oral hearing
took place at the end of March 2026. Based on typical timelines, a decision on annulment is estimated to be issued within nine to
twelve months of the hearing.
U.S. Antitrust Violations Class Action
On July 29, 2025, Smurfit Westrock plc, Smurfit Kappa North America LLC, WestRock CP, LLC and seven other industry
participants were named as defendants in a class action lawsuit filed in the U.S. District Court for the Northern District of Illinois
alleging violations of U.S. antitrust laws. The lawsuit alleges violations of Sections 1 and 3 of the Sherman Act, asserting that the
defendants conspired to fix, raise and maintain supracompetitive prices for containerboard sheets, linerboard sheets, and finished
packaging products made from containerboard and/or linerboard in the United States. The complaint seeks damages, including treble
damages under the Clayton Act, pre- and post-judgment interest, injunctive relief and litigation expenses and attorneys’ fees. The
Company believes that it has substantial defenses and intends to vigorously defend against the lawsuit. While the Company is
currently unable to determine the ultimate outcome of this matter or estimate the range of potential loss due to the early stage of this
proceeding, it is possible that an adverse outcome could have a material impact on its financial condition, results of operations, or cash
flows. On October 17, 2025, the plaintiff voluntarily dismissed Smurfit Westrock plc from the lawsuit without prejudice to seek to
rejoin it at a later date. The Company’s subsidiaries Smurfit Kappa North America LLC and WestRock CP, LLC remain defendants in
the lawsuit. On January 20, 2026, the Company completed briefing the court on its motion to dismiss the complaint, which was filed
on October 20, 2025. The Company expects the court to rule on the motion to dismiss in 2026.
Other Litigation
We are a defendant in a number of other lawsuits and claims arising out of the conduct of our business. While the ultimate results of
such suits or other proceedings against us cannot be predicted as of the date of this Quarterly Report on Form 10-Q, we believe the
resolution of these other matters will not have a material adverse effect on our results of operations, financial condition or cash flows.
The outstanding payment obligations to financial institutions under supplier finance programs were $371 million and $361 million as
of March 31, 2026 and December 31, 2025, respectively.
23
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Trade Receivables Securitization Arrangements
The Company is a party to arrangements involving securitization of its trade receivables. The carrying values of the restricted asset
and limited recourse liability as of March 31, 2026 ($838 million and $367 million, respectively) and as of December 31, 2025
($874 million and $374 million, respectively) approximate their fair values due to the short-term nature of the securitized assets and
the floating rates of the liabilities.
Timber Note Receivable Securitization Arrangement
The Company is also a party to an arrangement involving securitization of its note receivable. The carrying values of the restricted
asset and non-recourse liability as of March 31, 2026 ($392 million and $335 million, respectively) and as of December 31, 2025
($391 million and $335 million, respectively) approximate their fair values due to their floating rates. The fair values of the restricted
assets and non-recourse liabilities are classified as level 2 within the fair value hierarchy.
For the details of the structure, purpose, legal terms and conclusions as to the primary beneficiary of these Variable Interest Entities
(“VIEs”), refer to “Note 22. Variable Interest Entities” of the 2025 Consolidated Financial Statements.
the following table:
March 31, | December 31, | ||
2026 | 2025 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ | $ | |
Accounts receivable | |||
Inventories | |||
Other current assets | |||
Non-current assets: | |||
Property, plant and equipment, net | |||
Other non-current assets | |||
Total assets | $ | $ | |
Liabilities | |||
Current liabilities: | |||
Accounts payable | $ | $ | |
Current portion of debt | |||
Other current liabilities | |||
Non-current liabilities: | |||
Non-current debt due after one year | |||
Other non-current liabilities | |||
Total liabilities | $ | $ |
24
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
March 31, 2026 and 2025:
Foreign Currency Translation | Cash Flow Hedges | Defined Benefit Pension and Other Postretirement Benefit Plans | Other Adjustments(1) | Total (2) | |
Balance at December 31, 2024 | $ | $ | $ | $( | $ |
Other comprehensive (income) loss | ( | ( | ( | ||
Balance at March 31, 2025 | $ | $ | $ | $( | $ |
Balance at December 31, 2025 | $ | $ | $ | $( | $ |
Other comprehensive loss (income) | ( | ( | |||
Balance at March 31, 2026 | $ | $ | $ | $( | $ |
(1) This relates to a reverse acquisition reserve which arose on the creation of a new parent of the Company prior to the United Kingdom and Ireland listings.
(2) All amounts are net of tax and noncontrolling interest.
March 31, 2026, and 2025, is as follows:
Three months ended March 31, | |||||||
2026 | 2025 | ||||||
Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | ||
Foreign currency translation (loss) gain | $( | $ | $( | $ | $ | $ | |
Defined benefit pension and other postretirement benefit plans: | |||||||
Amortization and settlement recognition of net actuarial loss | ( | ||||||
Amortization of prior service credit | ( | ( | |||||
Foreign currency gain (loss) - pensions | ( | ( | |||||
Changes in fair value of cash flow hedges | |||||||
Consolidated other comprehensive (loss) income | ( | ( | ( | ||||
Other comprehensive loss (income) attributable to noncontrolling interests | |||||||
Other comprehensive (loss) income attributable to common shareholders | $( | $( | $( | $ | $ | $ | |
Dividend Approval
On April 30, 2026, the Company announced that its Board of Directors approved a quarterly dividend of $0.4523 per share on its
ordinary shares. The quarterly dividend of $0.4523 is payable on June 10, 2026 to shareholders of record at the close of business on
May 15, 2026.
25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in
conjunction with Smurfit Westrock’s Unaudited Condensed Consolidated Financial Statements and their related notes included
elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and their related notes for the
year ended December 31, 2025, as well as the information under the heading “Management’s Discussion and Analysis of the
Financial Condition and Results of Operations” that were disclosed in the Form 10-K for the year ended December 31, 2025, as filed
with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2026 (the “2025 Form 10-K”). This discussion
contains forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could differ materially
from the results discussed below. More information regarding these risks and uncertainties and other important factors that could
cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in
Part I, Item 1A. in the 2025 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. Please
also refer to the section above entitled “Cautionary Note Regarding Forward-Looking Statements” for additional information.
Unless the context otherwise requires, or unless indicated otherwise, “we”, “us”, “our”, “Smurfit Westrock” and “the Company”
refer to the business of Smurfit Westrock plc, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.
OVERVIEW
Smurfit Westrock is one of the world's largest integrated manufacturers of paper-based packaging products in terms of volumes and
sales, with operations in North America, South America, Europe, Asia, Africa, and Australia. Smurfit Westrock partners with its
customers to provide differentiated, sustainable paper and packaging solutions that enhance its customers’ prospects of success in their
markets. For additional information, see “Part I, Item 1. Business” included in the Company’s Annual Report on Form 10-K.
EXECUTIVE SUMMARY
Smurfit Westrock’s net sales increased by $56 million, to $7,712 million in the three months ended March 31, 2026, from
$7,656 million in the three months ended March 31, 2025. This increase was primarily due to a net positive foreign currency impact
that was largely offset by a negative volume impact.
Net income attributable to common shareholders decreased by $319 million. The decrease in the three months ended March 31, 2026
was primarily due to higher cost of goods sold, including accelerated depreciation for machine closures. We were also impacted by
lower volumes, economic downtime, adverse weather and higher freight costs. In the three months ended March 31, 2026, we
incurred higher impairment and restructuring costs, and lower transaction and integration-related expenses associated with the
Combination.
Net cash provided by operating activities decreased by $31 million, to $204 million in the three months ended March 31, 2026, from
$235 million in the three months ended March 31, 2025, primarily due to a $188 million decrease in net income adjusted for non-cash
items, primarily including depreciation, depletion and amortization, impairment of assets, cash surrender value increase in excess of
premiums paid, share-based compensation expense, deferred income tax benefit, and pension and other postretirement funding more
than cost. Changes in operating assets and liabilities were a benefit of $157 million compared to the prior year period. During the three
months ended March 31, 2026, Smurfit Westrock invested $624 million in capital expenditures. The Company’s net cash inflow from
changes in debt was $517 million, and it paid $237 million of cash dividends to shareholders. See the section entitled “Liquidity and
Capital Resources” below for additional information.
Refer to “Results of Operations” and “Segment Information” for a detailed review of Smurfit Westrock’s performance.
26
SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS
Smurfit Westrock’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Company’s
control. Smurfit Westrock’s net sales are primarily derived from the sale of containerboard, corrugated containers, paperboard,
consumer packaging, and other paper-based packaging products. As such, Smurfit Westrock’s net sales during any period are largely
influenced by volumes, prices and costs of the corrugated containers and consumer packaging products that Smurfit Westrock sells
during that period.
Volumes
In general, demand for corrugated containers and consumer packaging is closely correlated with overall economic growth and activity.
It also directionally correlates with levels of industrial production and is impacted by the trends affecting the choice of medium (paper,
plastic, glass, metal, or wood) used in the packaging of these products. As a result, demand is driven by the need for: (i) packaging
products for consumer and industrial goods, (ii) higher value-added corrugated products used for point-of-sale displays and consumer
and shelf-ready packaging, and (iii) packaging of pharmaceutical products and the growth of related industries. Normal patterns of
demand growth can be disrupted by other macroeconomic trends, including inflation, pandemics (such as the COVID-19 pandemic
and related lockdowns), and global economic factors such as a recession and geopolitical developments (including tariffs or other
trade restrictions), among others.
Consumer patterns also play a significant role in demand for corrugated packaging and consumer packaging. In recent years, shifting
consumer behaviors have accelerated, particularly with the rise of e-commerce and increased awareness of unsustainable packaging
solutions. These trends have, to date, been beneficial for paper-based packaging, which is typically made from renewable, recyclable
materials. Changing demographics can also influence demand trends in the pharmaceutical industry, a major user of consumer
packaging.
Our volumes may also be impacted in certain periods by scheduled or unscheduled maintenance, particularly in our mill system, as
well as economic downtime as we match our supply with customer demand.
Prices and Costs
Prices of corrugated containers and consumer packaging are primarily a function of the cyclical nature of Smurfit Westrock’s industry,
capacity and competition in the markets it operates in, prevailing raw material prices, and other operating costs, such as energy,
chemicals, and transportation, overlaying supply and demand balances.
As paper costs generally represent a large portion of the cash cost of production for corrugated containers or consumer packaging,
containerboard price movements tend to impact the prices of corrugated containers, and paperboard price movements tend to impact
the prices of consumer packaging. In turn, the cost of paper is influenced by movements in the price of its major raw materials—wood
or recycled paper—along with other supply and demand factors. Smurfit Westrock’s production processes are energy-intensive,
making production costs also sensitive to the price of energy (primarily gas and electricity), which have historically been volatile.
Other key cost drivers include employee benefit expenses, largely determined by workforce size, and shipping and handling costs,
which are generally affected by fuel prices and overall labor inflation.
While many of Smurfit Westrock’s customer contracts include price adjustment clauses that allow cost increases to be passed on to
customers, these clauses may not in all cases be effective to offset rising costs. Additionally, for corrugated and consumer packaging
products, even when Smurfit Westrock is able to implement price increases, there is typically a three- to six-month lag between raw
material price hikes and the realization of higher pricing from customers.
Foreign Currency Effects
Smurfit Westrock operates in multiple countries across North America, South America, Europe, Asia, Africa, and Australia. As a
result, currency fluctuations can have both direct and indirect impacts on its financial statements, which are presented in U.S. dollars.
Refer to “Results of Operations” and “Segment Information” for information on the impact of foreign currency.
27
RESULTS OF OPERATIONS
The following table summarizes Smurfit Westrock’s consolidated results for the periods presented ($ in millions):
Three months ended March 31, | ||||
2026 | 2025 | |||
Net sales | $7,712 | $7,656 | ||
Cost of goods sold | (6,444) | (6,079) | ||
Gross profit | 1,268 | 1,577 | ||
Selling, general and administrative expenses | (961) | (973) | ||
Impairment and restructuring costs | (54) | (15) | ||
Transaction and integration-related expenses associated with the Combination | — | (36) | ||
Operating profit | 253 | 553 | ||
Interest expense, net | (166) | (167) | ||
Pension and other postretirement non-service income, net | 8 | 9 | ||
Other expense, net | (11) | (5) | ||
Income before income taxes | 84 | 390 | ||
Income tax expense | (21) | (8) | ||
Net income | 63 | 382 | ||
Net loss attributable to noncontrolling interests | 2 | 2 | ||
Net income attributable to common shareholders | $65 | $384 | ||
Results of operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025
Net Sales
Net sales increased by $56 million, to $7,712 million in the three months ended March 31, 2026, from $7,656 million in the three
months ended March 31, 2025. This increase was primarily due to a $316 million net positive foreign currency impact that was largely
offset by a $256 million impact of lower volumes.
See “Segment Information” below for more detail on Smurfit Westrock’s segment results.
Cost of Goods Sold
Cost of goods sold increased by $365 million, to $6,444 million in the three months ended March 31, 2026, from $6,079 million in the
three months ended March 31, 2025. The increase in cost of goods sold was primarily due to a $277 million net negative foreign
currency impact, $74 million of economic downtime, $70 million of accelerated depreciation costs for machine closures, a $65 million
impact of adverse weather and $48 million of higher freight costs, partially offset by the impact of lower volumes of $208 million.
Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses decreased by $12 million, to $961 million in the three months ended March 31, 2026, from $973 million in the three
months ended March 31, 2025. The decrease in SG&A expenses was primarily due to lower employee compensation.
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Impairment and Restructuring Costs
Impairment and restructuring costs increased by $39 million, to $54 million in the three months ended March 31, 2026, from
$15 million in the three months ended March 31, 2025. In the three months ended March 31, 2026, impairment and restructuring costs
consisted of $35 million of impairment charges and $19 million of restructuring costs. In the three months ended March 31, 2025,
impairment and restructuring costs consisted of $15 million of restructuring costs. The costs were primarily associated with
previously announced facility and machine closures, including asset impairments, severance and other costs.
Transaction and Integration-related Expenses Associated with the Combination
The Company incurred transaction and integration-related expenses associated with the Combination of $— million and $36 million in
the three months ended March 31, 2026 and 2025, respectively. In the three months ended March 31, 2025, transaction and
integration-related expenses consisted of transaction-related expenses of $2 million and $34 million of integration-related expenses
associated with the Combination.
Pension and Other Postretirement Non-Service Income, Net
Pension and other postretirement non-service income, net decreased by $1 million, to income of $8 million in the three months ended
March 31, 2026, from income of $9 million in the three months ended March 31, 2025.
See “Note 11. Retirement Plans and Deferred Compensation Arrangements” of the Condensed Consolidated Financial Statements for
additional information.
Interest Expense, Net
Interest expense, net decreased by $1 million to $166 million in the three months ended March 31, 2026, from $167 million in the
three months ended March 31, 2025.
See “Note 7. Interest” of the Condensed Consolidated Financial Statements for additional information.
Other Expense, Net
Other expense, net increased by $6 million to expense of $11 million in the three months ended March 31, 2026, from expense of
$5 million in the three months ended March 31, 2025.
Income Tax Expense
Income tax expense was $21 million in the three months ended March 31, 2026, compared to an income tax expense of $8 million in
the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026, was 25.0%, while the
effective tax rate for the three months ended March 31, 2025, was 2.1%.
See “Note 10. Income Taxes” of the Condensed Consolidated Financial Statements for the primary factors impacting our effective tax
rates.
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SEGMENT INFORMATION
Smurfit Westrock has identified its three operating segments based on how the CODM makes key operating decisions, allocates
resources and assesses performance of the Company’s business. These operating segments are as follows: (i) North America, which
includes operations in the U.S., Canada and Mexico, (ii) Europe, MEA and APAC and (iii) LATAM, which includes operations in
Central America and the Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru. No operating segments have been
aggregated for disclosure purposes.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, but
exclude certain central costs such as corporate costs, including executive costs, and costs of Smurfit Westrock’s legal, company
secretarial, pension administration, tax, treasury and controlling functions and other administrative costs. Segment profitability is
measured based on Adjusted EBITDA, defined as income before income taxes, unallocated corporate costs, depreciation, depletion
and amortization, interest expense, net, pension and other postretirement non-service income, net, share-based compensation expense,
other expense, net, impairment and restructuring costs, transaction and integration-related expenses associated with the Combination
and other specific items that management believes are not indicative of the ongoing operating results of the business.
The following table contains selected financial information for Smurfit Westrock’s segments for the periods presented ($ in millions):
Three months ended March 31, | ||||
2026 | 2025 | |||
Net sales (aggregate):(1) | ||||
North America | $4,502 | $4,669 | ||
Europe, MEA and APAC | 2,771 | 2,582 | ||
LATAM | 540 | 513 | ||
Segment Adjusted EBITDA: | ||||
North America | $597 | $785 | ||
Europe, MEA and APAC | 421 | 389 | ||
LATAM | 109 | 115 | ||
(1) Net sales before intersegment eliminations
The three months ended March 31, 2026, compared to the three months ended March 31, 2025
North America Segment
Net Sales
Net sales before intersegment eliminations for the North America segment decreased by $167 million, to $4,502 million in the three
months ended March 31, 2026, from $4,669 million in the three months ended March 31, 2025. This decrease was primarily due to
lower volumes of $259 million that was partially offset by a net positive foreign currency impact of $51 million and a $41 million
impact from a higher selling price mix.
Adjusted EBITDA
Adjusted EBITDA for the North America segment decreased by $188 million, to $597 million in the three months ended March 31,
2026, from $785 million in the three months ended March 31, 2025. This decrease was primarily due to higher costs of $176 million
and the impact of lower volumes of $48 million that were partially offset by a higher selling price mix of $41 million. Higher costs of
$176 million were primarily due to economic downtime of $74 million, a $55 million impact of adverse weather, $38 million of higher
freight costs and $32 million of higher net energy costs primarily due to lower energy credits than in the prior year period.
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Europe, MEA and APAC Segment
Net Sales
Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $189 million, to $2,771 million in
the three months ended March 31, 2026, from $2,582 million in the three months ended March 31, 2025. This increase was primarily
due to a net positive foreign currency impact of $238 million primarily due to the strengthening of the U.S. dollar against the euro,
partially offset by a lower selling price mix of $49 million.
Adjusted EBITDA
Adjusted EBITDA for the Europe, MEA and APAC segment increased by $32 million, to $421 million in the three months ended
March 31, 2026, from $389 million in the three months ended March 31, 2025. The increase was primarily due to lower costs of $40
million and a net positive foreign currency impact of $44 million that were partly offset by a lower selling price mix impact of $49
million. The $40 million of lower costs was primarily due to $28 million of lower energy costs.
LATAM Segment
Net Sales
Net sales before intersegment eliminations for the LATAM segment increased by $27 million, to $540 million in the three months
ended March 31, 2026, from $513 million in the three months ended March 31, 2025. This increase was primarily due to a net positive
foreign currency impact.
Adjusted EBITDA
Adjusted EBITDA for the LATAM segment decreased by $6 million, to $109 million in the three months ended March 31, 2026, from
$115 million in the three months ended March 31, 2025. This decrease was primarily due to higher costs of $10 million due to higher
raw material and energy costs.
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Smurfit Westrock’s primary sources of liquidity are the cash flows generated from its operations, its commercial paper program and
committed credit lines. The uncommitted commercial paper program is supported by the $4,500 million revolving loan facility with a
separate swingline sub-facility which allows for same-day drawing in U.S. dollar. The revolving credit facility had an original term of
five years, with two one-year extension options. In June 2025, the first extension was exercised, extending the maturity date to June
28, 2030. The amount of commercial paper outstanding does not reduce available capacity under the revolving loan facility. The
primary uses of this liquidity are to fund Smurfit Westrock’s day-to-day operations, capital expenditures, debt service, dividends and
other investment activity, including acquisitions.
As of March 31, 2026, Smurfit Westrock held cash and cash equivalents of $674 million, of which $156 million were held in euro,
$197 million were held in U.S. dollars and $321 million were held in other currencies. At March 31, 2026, the Company had $4,663
million in undrawn committed facilities available under the revolving loan facility and receivables securitization facilities. The
weighted average period until maturity of undrawn committed facilities was 4.1 years as of March 31, 2026. Combined with cash and
cash equivalents of $674 million, the Company had $5,337 million of available liquidity.
As of March 31, 2026, Smurfit Westrock had $14,255 million of total debt. As of March 31, 2026, the carrying amount of current debt
was $980 million. In the three months ended March 31, 2026, total debt increased by $482 million. Excluding changes in carrying
value, such as translation adjustments and amortization moves, borrowings increased by $517 million. See “Note 9. Debt” of the
Condensed Consolidated Financial Statements for additional debt-related information.
31
The Company believes that the cash flows generated from its operations, cash on hand, its commercial paper program, available
borrowings under its committed credit lines and available capital through access to capital markets will be adequate to meet the
Company's liquidity and capital requirements, including payments of any declared dividends, for the next 12 months and for the
foreseeable future.
Smurfit Westrock uses a variety of working capital management strategies including supply chain financing (“SCF”) programs,
vendor financing and commercial card programs, monetization facilities where we sell short-term receivables to a group of third-party
financial institutions and receivables securitization facilities. The programs are described below.
The Company engages in certain customer-based SCF programs to accelerate the receipt of payment for outstanding accounts
receivables from certain customers. Certain costs of these programs are borne by the customer or the Company. Receivables
transferred under these customer-based SCF programs generally meet the requirements to be accounted for as sales in accordance with
guidance under “Transfers and Servicing” (“ASC 860”), resulting in derecognition of such receivables from the Company’s
Condensed Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs may vary from period to
period, and were 6% of the Company’s accounts receivable balance at March 31, 2026. In addition, Smurfit Westrock has
monetization facilities that sell to third-party financial institutions all of the short-term receivables generated from certain customer
trade accounts. See “Note 8. Fair Value Measurement” of the Condensed Consolidated Financial Statements for a discussion of the
Company’s monetization facilities.
Smurfit Westrock’s working capital management strategy includes working with its suppliers to revisit terms and conditions, including
the extension of payment terms. The Company’s current payment terms with the majority of its suppliers generally range from payable
upon receipt to 120 days and vary for items such as the availability of cash discounts. The Company does not believe its payment
terms will be shortened significantly in the near future and does not expect its net cash provided by operating activities to be
significantly impacted by additional extensions of payment terms. Certain financial institutions offer voluntary SCF programs that
enable the Company’s suppliers, at their sole discretion, to sell their receivables from Smurfit Westrock to the financial institutions on
a non-recourse basis at a rate that leverages the Company’s credit rating and thus might be more beneficial to the Company’s
suppliers. Smurfit Westrock and its suppliers agree on commercial terms for the goods and services procured, including prices,
quantities and payment terms, regardless of whether the supplier elects to participate in SCF programs. The suppliers sell Smurfit
Westrock goods or services and issue the associated invoices based on the agreed-upon contractual terms. The due dates of the
invoices are not extended due to the supplier’s participation in SCF programs. Smurfit Westrock suppliers, at their sole discretion if
they choose to participate in a SCF program, determine which invoices, if any, they want to sell to the financial institutions. No
guarantees are provided by the Company under SCF programs, and it has no economic interest in a supplier’s decision to participate in
the SCF program. Therefore, amounts due to the Company’s suppliers that elect to participate in SCF programs are included in the
“Accounts payable” line item in the Company’s Condensed Consolidated Balance Sheets and the activity is reflected in “Net cash
provided by operating activities” in the Company’s Condensed Consolidated Statements of Cash Flows. Based on correspondence
with the financial institutions that are involved with Smurfit Westrock’s two primary SCF programs, while the amount suppliers elect
to sell to the financial institutions varies from period to period, the amount generally averages approximately 10-14% of the
Company’s accounts payable balance. The outstanding payment obligations to financial institutions under these programs were
$371 million as of March 31, 2026.
Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment
expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the
Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise
been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows
for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note 9.
Debt” and “Note 15. Variable Interest Entities” of the Condensed Consolidated Financial Statements for a discussion of the
receivables securitization facilities and the amount outstanding under the Company’s vendor financing and commercial card programs.
32
Cash Flow Activity
The following table contains selected financial information from Smurfit Westrock’s Condensed Consolidated Statements of Cash
Flows for the periods presented ($ in millions):
Three months ended March 31, | |||
2026 | 2025 | ||
Net cash provided by operating activities | $204 | $235 | |
Net cash used for investing activities | $(627) | $(476) | |
Net cash provided by financing activities | $209 | $151 | |
Net cash provided by operating activities decreased by $31 million to $204 million in the three months ended March 31, 2026 from
$235 million in the three months ended March 31, 2025, primarily due to a $188 million decrease in net income adjusted for non-cash
items, primarily including depreciation, depletion and amortization, impairment of assets, cash surrender value increase in excess of
premiums paid, share-based compensation expense, deferred income tax benefit, and pension and other postretirement funding more
than cost. Changes in operating assets and liabilities were a benefit of $157 million compared to the prior year period. The decrease in
the cash outflows from changes in operating assets and liabilities was inclusive of cash payments to financial institutions of
$63 million in connection with the Company’s accounts receivable monetization agreements in the three months ended March 31,
2026, compared to cash payments of $39 million in the prior year period. See “Note 8. Fair Value Measurement” of the Condensed
Consolidated Financial Statements for additional information.
Net cash used for investing activities of $627 million in the three months ended March 31, 2026 consisted primarily of capital
expenditures of $624 million and cash paid for purchase of businesses, net of cash acquired of $18 million that were partially offset by
proceeds from sale of property, plant and equipment of $9 million. Net cash used for investing activities of $476 million in the three
months ended March 31, 2025 consisted primarily of capital expenditures of $477 million.
Net cash provided by financing activities of $209 million in the three months ended March 31, 2026 consisted primarily of cash
inflows from a net increase in debt of $517 million and proceeds from re-issuance of shares from treasury stock of $14 million that
were partially offset by outflows from cash dividends paid to shareholders of $237 million and tax paid in connection with shares
withheld from employees of $83 million. Net cash provided by financing activities of $151 million in the three months ended
March 31, 2025 consisted of cash inflows from a net increase in debt of $444 million, partially offset by cash outflows from dividends
paid to shareholders of $225 million and tax paid in connection with shares withheld from employees of $64 million.
Contractual Obligations and Commitments
Smurfit Westrock is a party to enforceable and legally binding contractual obligations involving commitments to make payments to
third parties. These obligations impact Smurfit Westrock’s short-term and long-term liquidity and capital resource needs. Certain
contractual obligations are reflected on Smurfit Westrock’s Condensed Consolidated Balance Sheets as of March 31, 2026, while
others are considered future obligations. Smurfit Westrock’s contractual obligations primarily consist of items such as long-term debt,
including current portion, lease obligations, purchase obligations and other obligations.
There have been no material changes to the contractual obligations and commitments disclosed in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of the Form 10-K for the fiscal year ended December 31, 2025.
Off-Balance Sheet Arrangements
As of March 31, 2026, Smurfit Westrock did not have any off-balance sheet arrangements.
33
NON-GAAP FINANCIAL MEASURE
Definitions
Non-GAAP Financial Measure
Smurfit Westrock reports its financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
However, management believes “Adjusted EBITDA”, a non-GAAP financial measure as discussed below, provides Smurfit
Westrock’s Board of Directors, investors, potential investors, securities analysts and others with additional meaningful financial
information that should be considered when assessing its ongoing performance relative to other periods because it adjusts out non-
recurring items that management believes are not indicative of the ongoing results of the business. Smurfit Westrock management also
uses this non-GAAP financial measure in making financial, operating and planning decisions, and in evaluating company
performance. Non-GAAP financial measures are not intended to be considered in isolation of or as a substitute for, or superior to,
financial information prepared and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative
for, the GAAP results. The non-GAAP financial measure Smurfit Westrock presents may differ from similarly captioned measures
presented by other companies.
Adjusted EBITDA
Smurfit Westrock uses the non-GAAP financial measure “Adjusted EBITDA” to evaluate its overall performance. The composition of
Adjusted EBITDA is not addressed or prescribed by GAAP. Smurfit Westrock defines Adjusted EBITDA as net income before
income tax expense, depreciation, depletion and amortization, interest expense, net, pension and other postretirement non-service
income, net, share-based compensation expense, other expense, net, impairment and restructuring costs, 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.
Management believes that the most directly comparable GAAP measure to Adjusted EBITDA is “Net income”.
Set forth below is a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net income, the most directly comparable
GAAP measure, for the periods presented ($ in millions).
Three months ended March 31, | ||||
2026 | 2025 | |||
Net income | $63 | $382 | ||
Income tax expense | 21 | 8 | ||
Depreciation, depletion and amortization | 728 | 603 | ||
Impairment and restructuring costs | 54 | 15 | ||
Transaction and integration-related expenses associated with the Combination | — | 36 | ||
Interest expense, net | 166 | 167 | ||
Pension and other postretirement non-service income, net | (8) | (9) | ||
Share-based compensation expense | 28 | 43 | ||
Other expense, net | 11 | 5 | ||
Other adjustments | 13 | 2 | ||
Adjusted EBITDA | $1,076 | $1,252 | ||
See “Note 2. Segment Information” of the Condensed Consolidated Financial Statements for additional information regarding “Other
adjustments” in the table above.
34
GUARANTOR SUMMARIZED FINANCIAL INFORMATION
On April 3, 2024, Smurfit Kappa Treasury Unlimited Company (“SKT”) completed a private offering of $750 million aggregate
principal amount of 5.200% senior green notes due 2030, $1,000 million aggregate principal amount of 5.438% senior green notes due
2034 and $1,000 million aggregate principal amount of 5.777% senior green notes due 2054, which we refer to as the “Original SKT
Notes”, and on November 26, 2024, Smurfit Westrock Financing Designated Activity Company (“SWF” and together with SKT, the
“Issuers”) completed a private offering of $850 million aggregate principal amount of 5.418% senior green notes due 2035, which we
refer to as the “Original SWF Notes” (and, together with the Original SKT Notes, the “Original Notes”). As part of those offerings, the
Issuers and the Guarantors (as hereinafter defined) of the Original Notes entered into registration rights agreements with the initial
purchasers thereof in which we agreed to use commercially reasonable efforts to complete exchange offers for such Original Notes in
compliance with applicable securities laws. In connection with the registration rights agreements, on May 23, 2025, following an
exchange offer process, certain holders of the Original Notes, exchanged their notes for newly issued registered notes (the “New
Notes”). The New Notes are substantially identical to the Original Notes, except that the New Notes are registered under the United
States Securities Act of 1933, as amended, and will not have any transfer restrictions, registration rights or additional interest
provisions. On November 21, 2025, SWF issued $800 million aggregate principal amount of 5.185% senior green notes due 2036, and
on November 24, 2025 SKT issued €500 million aggregate principal amount of 3.489% senior green notes due 2031. These notes have
been registered under the U.S. Securities Act of 1933, as amended.
The Guarantees
The Original Notes, the New Notes and the November 2025 Notes are subject to any limitations under applicable law, fully and
unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of Smurfit Westrock plc and the following
wholly-owned subsidiaries of Smurfit Westrock plc (the “Subsidiary Guarantors”): Smurfit Kappa Group Limited, Smurfit Kappa
Investments Limited, Smurfit Kappa Acquisitions Unlimited Company, Smurfit Kappa Treasury Funding Designated Activity
Company, Smurfit International B.V., Smurfit WestRock US Holdings Corporation, WestRock Company, WRKCo Inc., WestRock
MWV, LLC and WestRock RKT, LLC. In addition, SWF fully and unconditionally guarantees SKT’s obligations under the Original
Notes, the New Notes and the November 2025 Notes, and SKT fully and unconditionally guarantees SWF’s obligations under the
Original Notes, the New Notes and the November 2025 Notes. SKT and SWF are both wholly-owned subsidiaries of Smurfit
Westrock plc. Smurfit Westrock plc and the Subsidiary Guarantors are collectively referred to herein as the “Guarantors”, and the
Issuers and the Guarantors are collectively referred to herein as the “Obligor Group”.
Operations are conducted almost entirely through Smurfit Westrock plc’s subsidiaries other than the Issuers and the Subsidiary
Guarantors. Accordingly, the Obligor Group’s cash flow and ability to service its debt are dependent upon the earnings of Smurfit
Westrock plc’s other non-obligor subsidiaries (the “Non-Obligor Subsidiaries”) and the distribution of those earnings to the Obligor
Group, whether by dividends, loans or otherwise. Holders of the New Notes and November 2025 Notes have a direct claim only
against the Obligor Group.
Basis of Preparation of the Summarized Financial Information
The tables below present summarized financial information provided in conformity with Rule 13-01 of the SEC’s Regulation S-X. The
summarized financial information of the Obligor Group is presented on a combined basis, excluding intercompany balances and
transactions between entities in the Obligor Group. The Obligor Group’s investment balances in Non-Obligor Subsidiaries have been
excluded. The Obligor Group’s amounts due from, amounts due to, and transactions with Non-Obligor Subsidiaries have been
presented separately. The summarized financial information below should be read in conjunction with the Company’s Condensed
Consolidated Financial Statements contained herein, as the summarized financial information may not necessarily be indicative of the
results of operations or financial position had the subsidiaries operated as independent entities ($ in millions).
35
SUMMARIZED STATEMENT OF OPERATIONS | Three months ended March 31, |
2026 | |
Net sales to unrelated parties | $355 |
Net sales to Non-Obligor Subsidiaries | 305 |
Gross profit | 151 |
Interest expense, net with unrelated parties | (152) |
Interest expense, net with Non-Obligor Subsidiaries | (79) |
Net income and net income attributable to the Obligor Group | 527 |
SUMMARIZED BALANCE SHEETS | March 31, | December 31, | |
2026 | 2025 | ||
ASSETS | |||
Current amounts due from Non-Obligor Subsidiaries | $4,631 | $4,571 | |
Other current assets | 955 | 1,207 | |
Total current assets | $5,586 | $5,778 | |
Non-current amounts due from Non-Obligor Subsidiaries | $3,330 | $3,355 | |
Other non-current assets | 932 | 918 | |
Total non-current assets | $4,262 | $4,273 | |
LIABILITIES | |||
Current amounts due to Non-Obligor Subsidiaries | $8,305 | $9,130 | |
Other current liabilities | 1,039 | 482 | |
Total current liabilities | $9,344 | $9,612 | |
Non-current amounts due to Non-Obligor Subsidiaries | $7,380 | $7,447 | |
Other non-current liabilities | 11,682 | 11,823 | |
Total non-current liabilities | $19,062 | $19,270 |
36
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes during the three months ended March 31, 2026 to Smurfit Westrock’s critical accounting policies
and estimates as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2025.
NEW ACCOUNTING STANDARDS
See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Condensed Consolidated Financial
Statements for a full description of recent accounting pronouncements, including the respective expected dates of adoption and
expected effects on Smurfit Westrock’s results of operations and financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Smurfit Westrock’s exposure to market risk as identified in Smurfit Westrock’s Annual
Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
Smurfit Westrock’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly
Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures are
designed by the Company to provide reasonable assurance that it records, processes, summarizes and reports in a timely manner the
information it must disclose in reports that it files with or submits to the SEC. Anthony Smurfit, President & Group Chief Executive
Officer, and Ken Bowles, Executive Vice President & Group Chief Financial Officer, reviewed and participated in management’s
evaluation of the disclosure controls and procedures.
Based on this evaluation, Anthony Smurfit, President & Group Chief Executive Officer, and Ken Bowles, Executive Vice President &
Group Chief Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, Smurfit
Westrock’s disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There has been no change in Smurfit Westrock’s internal control over financial reporting (as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that has materially affected, or is reasonably
likely to materially affect, Smurfit Westrock’s internal control over financial reporting.
37
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information called for by this item is incorporated herein by reference to “Note 13. Commitments and Contingencies” of the
Condensed Consolidated Financial Statements (included in Part I, Item 1).
Item 1A. Risk Factors
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A,
“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially adversely affect
our business, financial condition, results of operations (including revenues and profitability) and/or ordinary share price. There have
been no material changes in our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information relating to our repurchase of ordinary shares during the three months ended March 31, 2026:
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs | |||
January 1, 2026 – January 31, 2026 | — | $— | — | — | |||
February 1, 2026 – February 28, 2026 | 21,252 | 51.42 | — | — | |||
March 1, 2026 – March 31, 2026 | — | — | — | — | |||
Total | 21,252 | — |
(1) During the three months ended March 31, 2026, 21,252 ordinary shares that would otherwise have been issued to current or former employees who were beneficiaries
of the SKG Employee Trust in connection with the vesting and settlement of equity awards granted under the legacy Smurfit Kappa 2018 Deferred Bonus Plan were
surrendered to the Company on behalf of such employees. This was done as part of net share settlement to cover applicable taxes, fees and/or duties paid by the
Company or its applicable subsidiary as a consequence of vesting and settlement of such equity awards. The fair market value of ordinary shares that were
surrendered by the SKG Employee Trust to the Company for no consideration was equal to the value of applicable taxes, fees and/or duties paid by the Company in
respect of such taxes, fees and/or duties. These ordinary shares have been subsequently cancelled.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Trading Plan(s)
In the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act)
defined in Item 408 of Regulation S-K).
38
Item 6. Exhibits
Exhibit Number | Description of Exhibit | ||
3.1 | Amended Constitution of Smurfit Westrock plc (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
22 | List of Guarantor Subsidiaries and Issuers of Guaranteed Securities (incorporated by reference to Exhibit 22 of the Company’s Annual Report on Form 10-K filed on February 27, 2026). | ||
31.1† | Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2† | Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32†* | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.** | ||
101.SCH | Inline XBRL Taxonomy Extension Schema.** | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase.** | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Document.** | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase.** | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase.** | ||
104 | Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
†Filed or furnished herewith
*The certification furnished in Exhibit 32 hereto is deemed to accompany this Quarterly Report on Form 10-Q and will not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the
Registrant specifically incorporates it by reference. Such certification will not be deemed to be incorporated by reference into
any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Registrant specifically incorporates it by reference.
**Submitted electronically herewith.
39
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
Smurfit Westrock plc | ||
Dated: May 1, 2026 | /s/ Anthony Smurfit | |
Name: | Anthony Smurfit | |
Title: | President & Group Chief Executive Officer | |
(Principal Executive Officer) | ||
Smurfit Westrock plc | ||
Dated: May 1, 2026 | /s/ Ken Bowles | |
Name: | Ken Bowles | |
Title: | Executive Vice President & Group Chief Financial Officer | |
(Principal Financial Officer) | ||
FAQ
How did Smurfit Westrock (SW) perform financially in Q1 2026?
Smurfit Westrock’s Q1 2026 net sales were $7,712 million, slightly above $7,656 million a year earlier. However, net income attributable to common shareholders fell to $65 million from $384 million as higher costs, downtime and weather impacts pressured margins and profitability.
Why did Smurfit Westrock’s Q1 2026 earnings decline versus 2025?
Earnings declined mainly because cost of goods sold increased by $365 million to $6,444 million. Drivers included $74 million of economic downtime, $70 million of accelerated depreciation on machine closures, $65 million from adverse weather and $48 million of higher freight costs, offset partly by lower volumes.
What was Smurfit Westrock’s Q1 2026 EPS and Adjusted EBITDA?
In Q1 2026, basic and diluted earnings per share were $0.12, down from $0.74 and $0.73 respectively in 2025. Adjusted EBITDA, which excludes items like restructuring and integration costs, declined to $1,076 million from $1,252 million, reflecting weaker underlying profitability.
How strong is Smurfit Westrock’s liquidity and debt position after Q1 2026?
At March 31, 2026, Smurfit Westrock had $674 million of cash and total available liquidity of $5,337 million, including undrawn committed facilities. Total debt was $14,255 million, with $980 million current, indicating a leveraged but well-funded capital structure supported by significant unused credit capacity.
What capital spending and cash flow did Smurfit Westrock report for Q1 2026?
The company generated $204 million of net cash from operating activities in Q1 2026, down from $235 million a year earlier. It invested $624 million in capital expenditures and used financing inflows, including higher debt, to support spending while also paying $237 million in cash dividends to shareholders.
Did Smurfit Westrock declare a dividend following its Q1 2026 results?
Yes. On April 30, 2026, the board approved a quarterly dividend of $0.4523 per ordinary share. The dividend is payable on June 10, 2026 to shareholders of record as of May 15, 2026, continuing the company’s pattern of regular cash returns to shareholders.