Smurfit Westrock (SW) 30 Oct 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Smurfit Westrock 2024 Q3 Results Webcast and Conference Call.

[Operator Instructions]

Please be advised that today's conference is being recorded.

to Group conference go VP, like Potts, to ahead. now Westrock Smurfit Investor would hand over the Ciaran I Relations. Please

Thank you, Sarah.

and uncertainties considered forward-looking statements release These statements management reminder, today's to statements. this the risks subject presentation and during be a by could comments may As call are made that in and earnings earnings are our release identified risks and These actual and expectations projections. factors SEC our results cause in the include and to not but filings. our in to, differ the materially from limited uncertainties

the to The no measures. investors.smurfitwestrock.com. at any undertakes comparable remarks the in company presentation, Today's the release to also to to obligation GAAP which financial revise non-GAAP are earnings forward-looking included are in today's certain available statements. measures most refer and Reconciliations appendix

accommodate today, and all questions to themselves who any clarifications we those participants the after ask on should require want make X that ask call. questions, you myself order what In Frank discussing to will we ourselves limit available during And Q&A. to are

will to CEO, Westrock. Tony hand over I Smurfit Smurfit, you now

and Ciaran, thank time afternoon, today. everyone, join you, for taking Thank morning the or you to us good good and

from billion reporting and release, we a margin I $X.XXX this have is XX.X%. the excellent which third first an reported will you it's fair As adjusted with period of EBITDA seen Westrock, Smurfit say for morning's think to quarter performance of

and that Smurfit these is companies we July demonstrate of strong which great on X a over think bringing combining Since have Westrock. continued for companies the a I building the together. ago, X X, made development foundation XXX little our success progress are in And results days we

going anticipate kind have knowledge and we were the Kappa be I across sustainable very deliver the When the the packaging time clear the leader could to the in across create Smurfit with enthusiasm of the apparent. combining create. value-adding that on packaging. as emphasize Westrock able fully progresses, the company and potential, we We combined industry, And have to were Westrock, of to most seen and innovative and will that this absolutely resolve I we want applications be I have on deliver the global to Smurfit industry. would and we we

be will an and across unparalleled of leverage able across broader to We geographic all diversity. knowledge and our product a reach applications

We customers. confident our very improved efficiency we drive felt that deliver excellence could operating and for

culture allocation creating phase shareholders we a all approach first Smurfit also for culture, we We XXX-plus legacy be we new for felt as fundamental is for Kappa, results in more next performance-driven, perform which to our in pillar success to teamwork and of orientated confidence for accountability success which a our with the Smurfit Westrock. value Kappa legacy days, the have of enter the capital in journey. Westrock. Smurfit foundation the Smurfit that would A After the tremendous had also we even deliver developed felt deep that could and is bring that we And desire a stakeholders. for

with I have legacy time what Across compelling. interesting is short is world, in see Smurfit the of and period What our we at It our positions. new level been a experience across identified of have nothing of so which after defendable the of industries, operational the such level knowledge is strong Westrock, Westrock. short to we and market have excellent impressed

adhered identify been we've able cost reduction. sure, sharper philosophy to We've where opportunities volume over growth be also to. many seen for a value customer be much a focus and will For to

customers immense a all their we of an unique and time and opportunity develop take the bespoke but chain costs knowledge as reduce to innovations, their Additionally, increase for much all systems pool help has designers, is packaging attain will larger customers. sales. to for supply product growth all This

of productivity combination, customer deliver the operating by footprint across means through businesses in retention. least, initiatives and the right-first-time through initiatives no and a higher but quality further efficiency renewed finally, will And spectrum and focus service on

So but date. that's we far? all we've what proud well, what good very have accomplished and done so of to I'm

The new and the aligned Smurfit leadership teams in forward Westrock the organization all for now are and around business. culture way across are place the

will have soon through legacy Kappa already put this a completed program. program XXX a further already managers XX legacy short Westrock Smurfit managers commence course. over We have INSEAD and the development XX

of As have system many generally facilities Westrock XX% We visits visited with asset all plant a see, of you across with occurred over note, multiple we we along regions. well-invested converting paper very like been already base. legacy have and the what there will many

on much introduced to commercial to And are This us we We've a and loss-making expensive whereby to sharper also not focus a good machines going course, is use products. anathema an for customers. business our of run not use identifying we've SG&A, external consultants XXX hard positions. the count. decisions in step-by-step some the step-by-step a eliminated reducing the whereby of efficiencies, basis, taking basis, recently, operational reducing on on head we're reduction and Again,

look to this to come. see back far how case, you've you organizations neither been can still. that In standing have you have legacy see Sometimes

as been combination. XX mills the paper operational improved This nearly and closed have corrugated Over X of who and divested. consumer last also as radically has facilities mills closed the well XX have footprint paper X months, have the

to to very of us development. with platform strong future. radically and lot the and have of different a resources a know have cost In based always significant a to be time, this operating savings of over at done of need closures, will efficiency allows we've still for developed as and this the we operations been upon a allocate combination in for We achieved. growth last look period a positioning. foundation these company But lot better but capital continued a result more And course, there market and size, has do, improved the

performance, up at who pass you the to now the you financial I'll wrap end. Ken, I'll over through and will take

Thank good Tony, everyone. and you, morning,

net Tony strong mentioned in and sales adjusted first and at XX% margin top, ever nearly is flow quarter billion, which from And EBITDA billion above As of free million. as $XXX EBITDA This is business. the of begin our $X.XXX a the journey. reporting adjusted cash with a results of this foundation almost $X.X combined our we

on prior the As and release you'll XX be Kappa combination earnings acquirer X, group. Westrock and around Smurfit in the with the GAAP. the the in as legacy U.S. Kappa to earnings, numbers the release include Slide reported numbers equates first reported the million EBITDA know will Furthermore, have seen numbers in accounting year already, Smurfit of legacy in here closing will any likely on the X $XX period, adjusted which was July legacy such, for days on the not

We little basis, a recreated company's that further take I'll quarter results have, however, few in in the a the and presentation, you a combined moments. third XXXX down non-GAAP on through

Turning now to in our the segments quarter. reported of X the performance

of As grades and market North both a the strong U.S., operations. to positions and am of American and reminder, America paper to quarter. leading Smurfit supply includes delighted corrugated across I in Canada a security network consumer converting of Mexico, packaging Westrock has report our North segment diverse our feed number a very

in also Smurfit our becoming the are gaining deeper customers business, potential commercial the who a This packaging the first having differentiated greater solutions, have Those approach record the be we the with our choice benefits And are supply aligning delivering journey a over far very familiar across mentioned, of delivering operations. growth long-standing legacy we years operational over proud of. initial of understanding a spent seeing improvements volume. of prioritizing the and followed partner deliver Tony of begun and Westrock, X months already, already we Westrock of have As is this the for conviction you the to of an track will even organization. this strategy chain as we value Kappa

quarter, the adjusted with sales gross margin EBITDA American delivered million North and of adjusted $XXX In very our XX.X%. a $X.X of of solid EBITDA operations billion

year-on-year energy a basis, to higher prices combined per higher non-GAAP Looking at performance of the as the improvement offset recovered cost costs, paper economic X-K distribution with and segment operational volumes September, saw and integration for on filed which such improvements. selling reduced margin than as increased due and other alongside by inflationary were and more the comparative and XXth significant wages we fiber, headwinds a downtime internal items both aided on by

on region, growth stable box prior was South in saw volumes compared to and -- were in same-day while region Western Atlantic Corrugated lower a in X.X% We basis. weaker volumes the the Midwest up North solid and the demand X% states. year, pricing

an X. containerboard our saw operations EMEA consumer Europe, U.S. Kappa's elements beverage Packaging corrugated position a With in existing North our converting year-on-year. demand facilities like at well and addition America X% performed and Much market Smurfit July to and our looking complement our operational Consumer consumer #X legacy packaging and and Finally, and operations. And growth of APAC limited overlap food now specialty European the of of post Canadian segment, division. with mainly

million the billion, adjusted box recovery of quarter, the $X.X they to of forward. price higher year-on-year, down we EBITDA and the expect XX.X%. box versus In margin see previous delivered business with and Corrugated although quarter, an were of adjusted continued prices EBITDA gross $XXX sales continued going

same-day X.X% predominantly basis. up offset higher year-on-year, were adjusted fiber basis or on absolute partly costs, to a The higher volumes recovered EBITDA margin corrugated higher volumes. due lower on X.X% lower Corrugated prices and was an by

American years. combined gross EBITDA looking and the broadly of $X.X of operated on EBITDA of segment and an with September the in in basis X-K, see the when And billion, is was excellent segment of an unchanged. this comparative Latin performance non-GAAP sales you XX%, remained over margin a year-on-year quarter, EBITDA third adjusted Our outcome for million we region can a $XXX for above very XX here, strong again, as adjusted at as the have per

The with as region demand in Argentina volumes. day saw lower and on prices a average X.X%, per box down lower in year drag segment volumes were particular being shipments box

costs saw operating with our performance lower operational these and on offsetting by margin However, cost movements focus generally efficiency. being we helped unrelenting the also

for segments the Slide prepared non-GAAP I X basis. to included sales don't mentioned earnings XX combined company's a as numbers the picture quarter. our here, on and this the for more days slide group third think I plus July, legacy of third the results propose in a on first X dwell As performance which the the of are gives for complete the Westrock earlier, shows reported quarter

of from of a margin over position over EBITDA XX%, X%, adjusted first strength. Smurfit company its the is adjusted Westrock's Westrock's beginning EBITDA With chapter margin of

will years, allocation be familiar XX the ahead. performance that our Slide have Smurfit who over out speaking maps followed journey about And capital the it. of with framework. Kappa Those

framework allocation capital returns flexible Our and core. at its focused will remain

As form the we the capital internal projects, success. with see what long-standing to allocated lowest to future central in capital of a will risk our be team experience industry, believe as that we

are of the vast the empowering opportunity through business. visited to bottom Tony to are operations, the We assessing capital unlock closer are and asset plant disciplined taking approach up operational customer. to legacy happy said And with needs as value very base local of who having improvements managers the earlier, and we a majority the the Westrock the significant

Having client company, billion the of be to will for needs total initial that the $X.X billion. year spent full the range some believe XXXX, $X.X assessing of the time in CapEx capital we

reminder, allocation capital pay subject legacy our dividend intends of strategy. in And the cornerstone another to line progressive a with board dividend Westrock as to Smurfit approvals, of policy is Kappa. a dividend Smurfit The

the $X.XXXX we of this payment dividend for different of streams the XXXX, remainder dividend for per As are and we a share. quarter paying cycles harmonize

disciplined undoubtedly In Westrock in we Kappa rooted leader to packaging. against M&A both those global transformative nature history Smurfit allocation. in plan benchmark a companies of Smurfit capital other best to by combination all The was in forms create illustrated enterprise to and multiples in Westrock, our between equivalent remain opportunities combining sustainable relation discipline, of and on

are strong we to investment-grade balance committed significant Smurfit of credit has Westrock rating. The maintaining strength and sheet at a flexibility,

levered and operations our the cycle. returns of ability of We of forms this ensures through and cash that shareholder size to and the significant of generate against that considered the inclusion the its flow, also Smurfit Xx are avenues simplest benchmarked underscores other to create can the strength value other all framework free return value Westrock long-term recreating flexibility and all shareholders agility for be And and Ultimately, than given believe our options. and at to all stakeholders. the framework is less

Tony for to I'll it concluding And pass some remarks. with that, back

Thank you, Ken.

is against a slide day, You an even I stakeholders. that neither better performance Kappa, Kappa was in a with But every the have be straight in and but an better over know a a is utmost go that we coverage note even deliver measures, long I have success of consistently great a time is I a we destination. and Smurfit built with journey not company front that that a a company, people delivering period this in proved wasn't great of have will a But Smurfit never evident point, the for saying through Westrock with legacy as and great line. on better confidence and product portfolio company. won't is our please you. This Rome all Smurfit

all we model. optimize to We'll our do. be in that customer-centric to continue We will continue operating

lands to which have Smurfit has be our level for return to that must back capital we'll plant must the in the inception and capital recognizing performance-led continue at all stakeholders. responsibility from business that stood capital return, where in all a invested local the provide XXs, paid We discipline, for culture continue its a and

our on continue the We leadership. that to ahead. ensuring innovation Layering our and success, is believe a central this in sustainability that and top is years both we now of element

same all than practices at of synergies, that more synergies, some which which million make point the owner/operator million, such, identified need again commercial the you're least call is And We higher the be as of our delivered. with I All for as at there and we that, $XXX introduced senior aware, are will course, potential as implement is considerably this would hard operating returns. significant $XXX Smurfit understand the This driven mentality combination. that improve efficiency we by have shareholders, the through managers and we Westrock.

also and skill, Westrock to initial at ambitions. is, the are billion, will earlier, our encouraged not experience And USD seeing we of benefits is we approach. of by I which approximately year expect the I'm encouraged this summit that deeply knowledge unleash. As level, said course, the exists local level of I'm Smurfit X.X in we this from this by while be

$X.X the returns. ahead, billion billion, year $X.X for will than lower in said, X our Ken expected As initial between and affecting our which we estimate invest somewhere year is without

opportunities capital advantage year, further new take As be through the assessing our thinking course update and we for our world progresses. the next across development run we Smurfit Westrock for will to as as of we'll our needs of the you we --

all significant company, understand those I to forward on delivering do you'll ahead short, in this medium very long hope that the we for look opportunities opportunities term. and we that have and

to that, open And operator, call. Ken, now from the on taking with anyone any we're myself questions and

Instructions] [Operator

Exane. from take Charlie this is now Muir-Sands line first We'll our BNP question, the Paribas from of

Just X, please.

quarter there long quarter. in in decimal conservatism Is mind that places Firstly, on bit given, maintenance rounding the such fair particular the reduction literally Or EBITDA in is or with is slight fourth in full North there taken assumption? no example? a a you've the as versus position bear suggests are it beyond year guidance, should there? what factors paper we in any just a America, in downtime Or the for of third

we've guidance NewCo. based with Charlie, this is gone is Yes. on the time first into December the --

downtime conservative. bit we But QX. also maintenance be some -- we have of this little have therefore, a there's we and that didn't a -- to downtime So downtime into quarter and obviously, for that built is $XX million tend additional small there

and than downtime QX. million in consumer there's that of commercial hit some mills maintenance downtime, in just more downtime both in also $XX is regular our an for So additional for

I of hit. and December we obviously, some month is funny hope. So always mean, then the a $XX degree million conservatism,

I think Charlie Ken. -- Charlie, it's

X at I you combined think still can over quarter for as versus look quite well, see the is in significant quarter year-on-year, basis. non-GAAP if you 'XX the X progression 'XX the

So as well. keep in mind that

for high-teens maintenance plan beyond managed considered midterm, guess the you could to sort on just that have anything on secondly, And pretax as spend. do. will return of to guys target year be Yes, and I CapEx historically, next the mid-

from budget low-hanging of because of business, Given less what you've there, or sort catch-up fruit more opportunity seen of needs maintenance? go to because is better perhaps more that sort into there's the the of Westrock

historical and lot to mean we first time, it's our and go that's the But the that I are sure I right we overnight go the businesses our to as go that and catch is that the that's the reduce a investment number rush time looking job, to next then develop on at not wouldn't we are mean, how reasonable on accordingly. is wouldn't as bringing to we'll we I taken what make be where for and deliver but communicate say see to for CapEx, Charlie, see costs, obviously, we But continue the and of an to think up. nonmaintenance listen, right to together X year. as that account we have and then have we and there to Kappa includes year think on together the of levels out I a need through that we approach thinking into change we for next through customer Smurfit customers the year a investments some and obviously, opportunities now. opportunity we year way OTIF plan and I capital

Kjellberg Stifel. from from is Lars This

first on days. XXX Congrats the

rapidly. you Just a seem on to quite couple synergies, executing be questions of

greater about made and can about those secondly, of Anything you you million should delivering can that next cadence share improvements course, how you've what you then that a And So operational $XXX the that deliver to. finding identified? -- spoken of of incremental you've again, we today share that with in similar think comment us meaningful number and pace that. and and terms or could than incremental commercial the

here. Ken it's Lars,

the the what described Tony On -- synergies. his script, is in hard

still you you I so getting on million all September end $XXX of some if would those. like, next year rate track through year, that And will we in as have that you as the we outlined trapped think number. run got 'XX, we're of are into have the go by on you've that full

of So longer, integrating imagine, and in you the not some market. can and tons take the displacing terms system particularly as optimizing

describes is we Tony the when back synergies on of So in much hard what much the July. we're have closed track we with in very would said what terms in as deal line very

frame we quality probably of improvements around point wrapped to bucket, because On it an execute the to expect the commercial number expect that's simply terms lot probably up XX-month of more all that 'XX. to how improvements rest else, contracts take during see probably get in in when time other and OTIF Tony's if a like, going everything around else. and to like of everything get we that's to linking and you back and and service through We slightly off the longer. 'XX of and and some about X-year roll operational It's opportunity are that would and

But in which terms of will extra in fairly quickly. some through taking and around areas simple 'XX, wins, out consultants it's cost come like

goal. XX frame XX a but max. a hard So longer months, it's the XX, slightly it's long-term probably synergies, the than time at It's still not

support level level operational contracts I we're is and head you've business. obviously, devolve to Lars, there your very overall good as are that ones. plant responsibility empowering P&L P&L people just streamlining run and to business is not And that to and to you on understand look an back that much at think, that necessarily got the is when responsibility find to the not to you view it, their their office

in while to business and and then unwind. and you them course, extensive -- a able situation for and to mean, to get are our the where unwind not of a machinery it's do I customers you're either where return, good invest a have Of business. yourself don't take company get then no But grow running we'll you obviously, continue in as to I hate hate we the -- they some a because businesses

view the that strong add in help And very our all a work run have to the business, as them bring powerful I our applications know, and to into you think we customers give the and to their not what customers them the with have tools we years. reduce we Then how margins, so very their you customers costs, it And when over necessarily but reduce to reduce want can and organization it's you. you to costs. help that a

over just how And we've happen think a people doesn't success. I I opportunity straight legacy an see overnight giving it. Westrock we're Westrock that not the over I Kappa, huge proven of years It some away. empowerment time, when it's that But Smurfit met to or here. in So do the in legacy sorry, we've Smurfit the we've feel comfortable with really -- legacy got

if I follow-up, may. One

improvement. Does to least potentially CapEx You number? money? term spoke business toured obviously, alluded we have you has the lower to anything lower bit near in we're identify to What of XXXX. it somewhat XX% an to with just there's mills as a that is at more those need found Or where CapEx surprised requirements, going to time you, do that have more spend you ongoing been that that you

less a more we are a well Kappa, a mean, programs Kappa are assets like bit in spending Well, even not And Smurfit spending legacy Kappa closed through Smurfit There all with we in the we we we've a bit And of we've tend in more. legacy done. because are things need I And -- to we year when in France. perfect. very this deal to. legacy invested just and Westrock that are mill obviously, in are Smurfit bit our

things are with well very or the is base people. that's the happy do asset been very But the and good in So consumer are the across of of assets with Most always business. seen the maintained I've world. be good we've that excellent, that what there will to very plants

how be box of so some pinch corrugated the around they on it think we frankly, and work. But are second some the are about truly myself -- there excellent, mills to in those need -- some think, I of the -- years, there have many are sometimes good third forward. in are bit X, are mills as plants the XX, that corrugated that as but quartile side, won't plenty are and that -- a I sometimes mills And are, the see and of XX% opportunity or go we are, to quartile, XX in there I the first improve mill the

So time, the I Mexico, think we've more got product a around future. we at integrate little And movement hope we the place, our in businesses lot of us strong do mill the it system, as to of gives for which small moment own out. of as sold is relatively in a bit a

is Hajde Wells Fargo. line Gabe This from of from the

a on I movements give I we would question, us if and like cadence Ken, expected. Smurfit what you bit and on kind if Tony I'm sense? legacy to have modeling, based expect below or maybe we little the continue of already And have information of can to kind realize just our question have was that. the a transpired It what that based model, curious that had guess, looks of makes you price I that internal appreciate

Yes.

and I Europe. our in it's so an market the market not year, bit our the has of at if in a I promised our -- business. you -- largest through think system, it's German mean all to -- improve basically, It's but anchor European it hasn't. mean, I look

a slightly its were relation this say that we disappointing to haven't able say, where to exploit if had expected. have advantages there suppose good it's that have because disappointing, would in not I volume slightly, been -- very hasn't we we we the So Germany year strategic how to it's I'd system

So park. be have don't it's other if German expectations and European strong a we've of we're bit, because would okay operations going think liked And down places haven't But you. bit in Gabe better ball have like performances of little the a out that little hit overall, done businesses we've Most and to the you a be to our where Spain some said fallen Europe. the that's I very really in to where had Germany. we in businesses. I suppose surprise to not Eastern And is our

while and we in we and the would brought expected the slightly When Cup comparisons is, expected ball are have And staying I Obviously, that we would spending. not good sat consumer which were April, getting It's would last and we're those massive year, we European tougher to with have more. line versus comparisons here improvement. you, some talking suppose, have Olympics thing. forward still

think X.X% same-day on We're Germany, about account not up not basis. but great a France. on that's same-day I In X%, particularly about up the we're year-on-year, weak a X% overall, basis. Europe, taking into in

were anticipated pickup didn't happen. it's a we the see supposed at big demand have lower But consumer of let's get year, we hopefully that and to sort just So next that events see here were April would year, we of rates we'll let's interest help not either. the out when sitting back in if based to the It's of spending. awful start upon

say, the sitting it's the relation and fair improvement also X-odd think Gabe, to I add just we are year-on-year, corrugated comps where to is percent I bit remaining there, strong, on, I think sequentially, while saw of too. down QX probably a to Tony, suppose, in over volumes pricing QX,

not So could and doom better. be all gloom, slightly it it's

data the in think America I hasn't mean, I been North listen, either. No, great

think and about we predict tough would directionally for $XXX as parts million, own and kind coming to that of frame I'm calendar of we're that synergies, to then what gave would is point Any assumptions that up make million Trying we this with. thinking other you moving quarter double appreciate If going our half $XXX be would about well. 'XX, is to the and 'XX for to second try already should I EBITDA combined us for be us XXXX helpful directionally number. what of we us in were you December Okay. and you Maybe up you layer some can told to all. volumes? to CapEx then a be

that definitely giving Ken. one I'm over to

X no, I XXXX, on X don't is see sequentially myself X visually the take I produced kind if you budget to the no, on first our it. your look take a the thing it, to Board. as suppose round, travel Gabe, said Tony is and X taken what direction X we QX X I and through and X and you you see say we can of suppose, I yet, last see improvement think haven't indeed combined, haven't in think 'XX because for' and you But off I in we year. and

think don't point budget have haven't mark to and we thought on yet. the the they and don't -- your haven't 'XX kind is But finalized And can they anyway. But can I off said, finished where we think starting your process that for do -- it clarifications is. I as Ciaran put either. of Frank So

And I wouldn't disagree.

So agreeing. we are

is question, our take line Citi. next now We Anthony of the from Pettinari this from

you different wondering consumer businesses. Looking maybe guess, broadly, little you your the performance it's could at business I I impressions and contrast of than was the corrugated North could talk a exposure if business? more the talk consumer that the a of bit Smurfit Tony, of about America, about And and the given

of the obviously in United the have also were just Westrock is which businesses. we -- Well, but consumer Europe Okay. rest the in and not actually States, had world, businesses, where

very people. very equipment, my good of consumer impression overall so business good business, run, is the well And good a

to different we and and and complementary improve they're which And businesses. expect health areas, are back. through very investment continue X responsibility beauty, into those businesses, both it We've putting and into now our through to food, segmented into beverage, plant-level to

mill Still been little And overall, issue do, -- But an for systems deal as short are to be parts market stronger side of to strategically those nothing in certain good. and need the lots the that. to to good are I figure out with we'd areas. marketplace, Obviously, businesses. have consumer, and how with of impressed we the bit very like consumer I SBS certain there's say, in with a

than graphic smaller basically has which main they're machines competition, boxboard folding there and is the competition, packaging. ourselves Our main but

those capital less in way And we're mills, be while to going way obviously but smaller invested significantly mills.

out I we earlier, need figure question There's to forward. that the term, to out. pretty figure the X said but those a corrugated the think, as those we with I'm X shape happy what's we or for to need mark we So mills. go of With just regard all I business, long have the as

basically, in bringing progress. focus to stuff. is internationally, normal That's what progress seen you to even work the system mill on that are certain change right system, or outstanding. corrugated especially box Brazilian the in -- But United the in And work just States very the that's of then need But of from But regions our certain started and Anthony, that's good go -- now, when certain mill in And we good. I've Europe haven't yet. plants. we we areas it's in have side, Mexican the the innovation into or

that. leading take right the in That's little time to mentioned the get that person I we systems and make have the of going to as a script, my -- bit sure right, get system,

coming customers the So a opportunity able all it's we're our be knowledge States. going little that packaging it's there corrugated it's better But to big before and to of to be our bit and for have packaging for we a in United get the of into to our customers, huge have transfer system. to worldwide going time

where maybe does in mean carton Okay. years? year And over choppier. out? take period or process bit that value a some to little months your think focus And That's sort or customers that could very How the guess I a the contracts of a I with churn potentially X business some to anticipate on to long volumes business is X the that the volume, referenced kind maybe helpful. maybe extent a you and approach you or I turning then or over. that be box

business, No, you it's have with salespeople not -- you slightly don't it's Anthony, -- salespeople. have have if bad business, if business can't you who a then replace bad basically, better good

will with be the believe so. don't the -- XX% I lose we only, there's because market replaced better business or of we know, still all obviously, So we we're could over that time. or will business -- will poor lose that

chunk our better overnight, to better this something factory is within doing straight might typically brown the it decades. the is So good just way have been mean but let's if is for a come sell. give that long we we better. that's there I doesn't way you hurt something for year, able a business. This be we there's box. you're a happen business by we to give it's will than it customers out say, to lose when business boxes there's go different. And don't sell but as value And for, offering systems XX% we bad -- -- a of the rather a have we to that our and producing salespeople the of plenty you year, big that tools back And this as --

of Matthew from This RBC Markets. McKellar is Capital line the from

you've to here about looks your retaining improvements. winning and on what here? service And focus you more think talked quality can and in improvement business a you service talked items particular, through execution maybe give quality, I and bit but what color like You around are and

to the Matt, at obviously, I got be you you our to basically, depends to is -- have XXX at A measure expect the our end plants But there. under systems of European time around XX%. of plants a And you to At have the to defects. of have customer and parts believe of same we depends the not the delivering have, boxes PPM mix. are And less time, depends a planning full close you've defects. for XXX%. a million have have. set per lot parts gold OTIF the your equipment all got up in day, all mean, we PPM, per than And lot we an in in in million that And business on that. on on on lot standard a XXX

You've it get certainly we to XXX -- need on overnight, but that's have to the where got to, PPM. happen doesn't

Ken. maybe And one for just

you QX reductions you in these reduction terms of through the noted of are recent to will headcount a the that savings able further whether cost capture of benefit share 'XX. full you'll In as in timing, or flow whether result are there

in little Matt, bleed most we very reduction that the in headcount 'XX. in 'XX into would 'XX, of over be It sense. trapped

still be And Matt. done the synergy lot to of But program. reengineering is a that's part there of

Mann from Bank next our take America. We'll This question. of from is Patrick

follow-up of question. think bit I it's a a

a to mean, the good on How which with listening over over mentioned this should Just bad saying value few out? can I business times. you I approach, business Tony, replace we volume time. you've about we playing think was

but practically or help it base over improving success with the margins, a So takes time least of kind restructuring? have gets or that smaller profitable through I divestments as closures improving at time? over implemented Or partly should mean over just you about or us same but we time? end how commercial hold business through it think does up that business more

Patrick, there rationalize I you've a in that's doing. mean, Westrock thank you. some if that you the facilities can you number clearly, those that area, facilities. same bit It's was legacy little a a said. lot have everything of of something And of

than and offering rather is what can really about price. for value than just -- So just about that's you him for is part something for other it and brown selling customer recognizing you're a box, that the of it. a But also, offer

have customer there and ability in offer more pain, been their all is just the understand ethos some sustainability customers customer different hundreds all things all requirements. has And of as it's And are customers, to for in some and that are something so own our customers has the each of different in the agenda, of individual know machine big their pain whole Smurfit line the the thousands efficiencies. the has each and to some And we in customer deliver is for Kappa love. we customer's always not are what logistics,

that. many, the as how to and TLC built customer. many require That's we is more That's our help the that business we That's Kappa businesses efficiently. small -- around Europe many what practically I It's come by small in say, on. acknowledged products we where there's manufacturers place, in as leader what And from. that's what do we every their package -- Smurfit

-- the that can Latin And America. do won't Europe forward. good progress. the good million that's that's time not get And can in yet, we and would in see as we're in reason you why $XXX-plus making see United that there's of no we already We expect the rest there to that we and in progress States we're making or in extra move

from Partners. Seaport question. the next of This Weintraub our is Mark line take from We'll Research

Europe America, on you don't next capacity I Europe North to And market, of So as a there looks sitting different I do. worried. when is happening, nearly coming like there's get in but year. we as that's when know it tend a in But fair know bit well

to to the that hoping should So how was we in about get on be next Europe at be coming I on is least thinking perspective new year? on capacity some paper, supposed

to downtime. they independent find maker. it and as capacity sell it have to a capacity, take kind is new lumpy. the the extent, But Europe in has moment, people the well of at the U.S. you to pretty to Mark, that announced of It's structure they There's new it to, some home. an to week, Yes. have tends in And be same paper bankruptcy last don't saw if

out actually well recently. business, being the who very sold saw and you've not year, we the -- groups some recently last seen being independents there of group honestly, that And large sold doing amount with a are in large

where is than took So had that downtime you to. they speaking, when say, a people soft, can no during because new the readily XXXX going capacity frankly go. of market to there or is what got which is happened And answer lot to 'XX downtime, other the

in capacity capacity. it. a market Europe people won't that's for who coming And Mark existing have there by the is be on -- new they And owned of most just

price they that's if taking strategy. the price not a in down good and the So other only take they're down, their business,

introduced of Middle a to out export lot there'll or Asia speaking, be which is, are suspect the or being of I generally and So as these East it the of other downtime rest some areas. capacities world,

X full Mark, the other starting that is have remember with to thing lists, think I rose-colored those running machines up on and they for year. the a just view at tend Jan

that way they're in the the to really on never tons -- on come listed those it So tends sheets.

others always in new new been in coming been in I've on I It's nearly had always now suffering mean, nonintegrated strategy, continue which to see you Europe. been to and Europe. for we've been years, stuff think and business other will XX I don't there's has or the absorbed they capacity down, the and either capacity if mills we have shut have. integrated and continue suffer

board? And board, then recycle in correct? Is not I folding North mentioned had that reference boxboard in coated coated assume. smaller just recycle a America. you That's to machines That's SBS,

And recycle, there coated are some yes. niche That's orientated, very that are Mark.

any in So integrated doesn't that and us cause areas fully they're problem. that long-term they're -- are particular really not

something that But It's just the have is going have to they some do be over that's existing almost the at. the analyze price quality. of do couple have capital that to those look no we'll continue Do And the to next quality in because going they they we'll not forward. have to marketplace businesses. there's really so. have years have So we or invested in the

is Barclays. line Gaurav from This question. next our of take the Jain We'll from

So a questions cash of debt. flow is couple One from and net on me. free

first what combined net time had, we and cash higher flow this is slightly than balance we sheet and a have lower. is debt is the free number the the So

some a swing in quarter is will free we be QX, happening what much better quarterly So cash there flow than had.

number So question that one. my was

just you're upon -- board, But U.S. U.S. about seeing some term the near about separately. side. touched European have have containerboard been you peers talk the concerns, especially secondly, you of consumer European containerboard, because in your board could And sounding container on what

I think it's pricing, Gaurav. around probably

had think broadly or America. It's gone North the just come so. XXX the by ton. pricing up I But what seen in price in month XX I we've mean, last European up a flat about is

a concern. for So not cause necessarily

price. a lower result wastepaper of as Yes,

back the recovered of fiber Yes, dropping also. on prices

we probably that's see it. I where think So

probably the bit of one, a I there's a On effect. first think seasonal

I drops, have as also, fiber think recovered creditors. less you

outflow box sequentially also But thought. than bigger have small creditor we So were might up. prices it's a

slightly get that, in a you investment capital. So is adverse the of which effect more working

that probably reduction I get through you at materially debt basis debt probably bit than too, of and because terms of net probably higher higher fair think at of drove in not kind cost net of like X.Xx, But we are. higher. that, think headcount the slightly combined did slightly level, a where I and a you're things it's work the number

nothing box back year But prices generally, cash there. tends good some sit falling items those in result shape. price be as half around a fundamental versus in there's around creditors moving probably are be more But parts probably of inventory generative. And to the and the of the big investment slightly probably X of increases creditor in to capital but working tends sides, where

So that, parts. only moving the beyond they're really

line next Ng question. of We'll Philip the from This from the take Jefferies.

some whether CapEx $X.X the billion provided. it's years? reasonable Now your capital Is few mill the The put areas that you've a $X.X framework what are framework to next things? on for of or that you to had look some at you've where side assets, of want time billion to work, to box the level

that is And very over demand then something in kind lastly, in strategic stand something out? a you're it's isn't your but term, the it, you if in a the that oversupplied. supply footprint, assets better medium to that plan long sure know you fit tackle any SBS market call spot, look I is making sure Is at when that of term?

sit the We figure SBS replacement into imports we a need it versus with analyzing how into does has Philip, on out FBB of just SBS We're has yes, is and very to of the it that. we're I out business. I product a months -- which SBS good where side, that marketplace, X mean business. the the need been still very deal mean, there we And figure now. to been

has that, are you've imported it that's -- some attached replacing the the which Obviously, got port product seen to issues strikes.

uncertainty imports can seen You've have. that the of some those

the I are X So have where But sure sits. XXX% that mills. we're yet SBS that not good would say actually we mills big

out and efficient figure very So to mills. we they're need

integrated, can be figure very like it we'd grade. So with somewhat we got we've that I to integrated, good that point stand moment, at out to more say starting is to... it's a something but With do It not it's ready where think to decision -- over on staying look regard us. I is, with All to have we'll the time. a we're make But for SBS. don't I

put Where the money. we

quality mean Where that able our work to with give going we to the sure make businesses the service require put and that are our I they money. is some on to customers us do make and to converting different.

necessarily to not a So we've got in the some corrugated on do, way. work the side more But side. consumer on not but massive

forward. maybe as facilities, upgrade we of some And some some rationalizations earlier, to said continue corrugators. smaller just need of we look obviously, our It's as our to I

that's probably of have the things the the other maintenance that standard. winders, that we'll pretty of be concentrating in efforts we normal are capital, mills So than where to electrical sort our the do some

that just want lot than jump don't And cohesive into because know whether we've to X.X would then X.X to a see going higher more going develop say it's in can but than now, higher more or and in of forward, rather got sit the it that. opportunities -- we to a in in year. I as do we it's going we to we yet than a going right be are our way that to plan, first

initiated what wins. We of we call a have program quick

get. kind just that. at we're as But time returns lot that's looking then of worse, look obviously, we'll so there, can wins see And authorized some And -- where have really we we payback, the million So we some paybacks more last very quick $XXX -- just sorry, week this than anything -- less the quick that got at has like quick we payback for week need those engineer the get thing but that at. opportunities which a X-year correctly. to Board

on then And comment you $XXX XX I see to XX front, that, next could that another and was by months. the million impressed earlier your really commercial unlock it, potentially call the

ability really aligned. do kind being of of question the KPIs terms kind the So you the people, of having in is, my decentralized, the empowering Smurfit to have do things

Like to a they're box Your containerboard side in commercial biggest on significant taking the side, how much on competitor the they're the U.S. approach the more on rigorous things. It us of helpful. expecting it like side, would disruption sounds XX be might to perspective, some that XX next give it, months? be you are choppy, call that less the process, but manage going

and back the plant I down think Philip. responsibility then down ultimately level it's happening, level into regional delivering already taken divisional drilling ultimately the already to and We've empowering already We're then our operations. into level. the

or region or service sales Now in we plant level market their central central, for with a or they plants, X can that be are administration X a plants selling. but X particular say, central local let's purchasing in manage

that we're adjustment, done So but responsible to already -- people that. P&L. mean every okay, enthusiasm there's we've now our sense I to palpable say, going to already in of That a we're organization for you can doesn't that be that tell is able person for our make

seen that our staff of is have. some said, business work. implemented. paper that as that taken have speaking And no that for as know particular a we I plant already the And that rigorously we've are first mean decent mean, there a team plan a manager, through. manager, as central out you've we since model And to we've of days of our regional And price, And return. we return. XXXX, is be get starting. that's local getting long excuse they for to already continue. that's responsibility, done in time as the to lives. back I That's to the and plant at I have -- what we're had or having can a going market for all price we started what of they're there And that's what not work, that's pushing days decent XXX XXX that the a

to in on you fairly years the few or kind this thoughts smooth? disruption the of transition next Any as

managers Westrock profit environment. companies some, of be the -- always many companies that interesting carton, already will to of of all kind were about is thing Southern XX Rock to you but don't there group I mean that go old And responsible in Listen, past. were the Philip, the Container, the you they folding if envisage in I were the go operating

this wanted liked. them, of knew they back a what going and for what and to they they what so lot is And

not rocket many for science them. it's So of

it For say will some to them, But wouldn't be adjust will disruptive. we I forward. as different, of it and have massively move be would

So tie I have up. think, to we operator,

to end at and thank of continued about so We're year look to this your afternoon. the lot progress So I'm quite lot morning joining of exciting a we excited Smurfit and for us an but ahead the lot done, guys, future. us. forward do, everybody, appreciate Really time, the the to more future this a very Westrock. again A you much sure. and do, reporting for

day. thanks joining, the good for and So have a rest of

concludes Thank and may now today's you This you participating, call. you. Thank disconnect. conference for