International Paper (IP) 31 Oct 242024 Q3 Earnings call transcript

Good morning, and thank you for standing by. Welcome to International Paper's Third Quarter 2024 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the call over to Mark Nellessen, Vice President, Investor Relations. Sir, the floor is yours.

Regina. you, Thank thank Earnings and joining Paper's International Good you Quarter Call. Third morning, for

this Silvernail, and Our Executive are certain the morning speakers Andy presentation, our Tim There's information including Senior beginning Officer. of Officer; disclaimers. Chairman Nicholls, Vice Financial President Chief legal important at and Chief and

from and can we actual other and factors found could cause this For forward-looking press reports that These example, call, releases during statements are U.S. filed uncertainties. statements to such differ in our with materially results make Commission. be Securities will subject forward-looking to risks and Exchange and that the

present also financial will of is those financial to certain We information. measures A website. reconciliation non-U.S. GAAP our available GAAP U.S. on figures

press presentation Our website also contains copies earnings and slides. release of quarter the today's third

now the to Andy I'll that, over turn Silvernail. call With

the everyone. transformation. pace will Good first very my significant encouraged . months X. Mark. enable at employees, a us IP good Thanks, improvement and work in morning, of strong begin and a for by on strategy. We're clear that Slide alignment seat, After I'll of IP's customers begins compelling in team create for I'm the aggressively the engaging X afternoon, our around value culture to a building shareowners. and That performance-driven proud

profitable investments guide culture to reduce improvements. and and transformational great drive teams in a America to and resources building with North aligned low-cost drive producer using attractive innovative are provider solutions XX-XX and our growth around cost approach the will by being and performance. to win EMEA. foundational company We the most packaging the most sustainable reliable and customer our complexity our We're Ultimately, customers, and

delivering our our and about superior returns best passionate for customers to a We're shareowners. best-in-class experience

company transformational the IP. leaders methodology. the changes Let's a turn conducted to with training top Slide on We've across are at our actively and XX/XX X. driving way We're to deploying

box at the joined for August. administrative I our us practice XX% plants was commercial the functions. teams about session continue delighted investors mills, to with overview this embed active will that in and XX/XX We at with our of

Importantly, we're portfolio We're facilities. completing markets, and and and XX/XX segmentation the at customers, looking our products, assets business company. suppliers segments, across

key analysis plans developing we're zero-up and position to aligning to completing and customers. determine to our win our are resource resources needs, We implementation for businesses

phase accelerate We significantly to our have the improve our fully performance. actions entered engaging and implementation strategy teams and taking IP's by

taking for I'm give focus is common position that Slide all we're in markets, I and to on greater in all simplify align I'll have reduces customers to strategic actions on IP, now us and aspects they fourth success. win COGS. share which strategic IP and X. quarter some actions of complexity But the these investments resources and

members, communities. we're impact decisions team surrounding are include While necessary. difficult our some families these the that and confident They that actions their

One help their decisions care IP of compassion values. severance transition. and treat great while to and outplacement strengths and the is providing with ensuring of our We people support, respect people make we dignity with in these that

the into are Our reducing is customer accelerate This complexity to to actions of centered principle strategy. enterprise resources fundamental shifting and businesses at on level XX/XX. the closer and the the

to our are reliability, productivity execution, and improve our while service, and enhanced optimizing outstanding We win reducing Packaging improved total agility, the enable for customers collaboration, North greater investing customer cost. more and system with we're to have costs. lower simplifying experience business, structural Within and focus capabilities American

box pilots mentioned on have system. As in regional X our we underway I call, QX the optimization

and to complexity We and in quality, product safety, equipment are lowering improve cost. reducing investing on-time while people delivery

share lever areas. stages national There's these across apply growth box future. This key be productivity in in [indiscernible] improvement now seeing at delivering early Importantly, and our will a network. market profitable this a we XX% are to XX% the opportunity to these approach for

announced working capacity excess plants. customers our with and we opportunity an to plant our in to footprint, Recently, optimize IP have to closures closely other we where transition regions X their business

strategic facilities XXX% making We for and investments of expect in remaining growth. customers, our future we're to retain

multiple we greenfield for brownfield performance. Importantly, that aspects and be investments plan will in safety opportunities have of identified and industry-leading all box

announcements should markets. soon You expect strength see to to and increase our investment in strategic

better evaluate a After decided long-term to review, success. for we've strategic to opportunities position GCF

has Our pursue Board us strategic options. authorized to

very our well global Morgan adviser. leader a engaged growing pulp, fluff have GCF, Stanley as market. as positioned We a of in is

a talented and great market strong technical have team position We and expertise. a

position. are process mentioned, supply is and have We our [indiscernible] committed I to Throughout completed. investors we a committed support And as a process, update the to serving business system. customers. of fully highly global when the We'll mill advantaged our

we the continue Regardless win will GCF, of this to and to costs, returns tons focus to allows we us XXX,XXX it or are low-value This sell and close decision be to commodity on improves if and exit accelerate about strategy business the we SBSK will grades of to while reduces if long term. across the engaging for [indiscernible] fluff earnings keep volatility. process, significantly positioned specialty The their we mill complexity improve lowers Georgetown and system. performance. move in

them have absorbent to will We pulp These strengthen with growth our customers XXX% of expect an has And be of mix fluff retain continue actions for potential. supplier meaningful GCF to to with grade stronger potential the outcome, the upside fluff GCF and customers. of to about strategic market plenty and for of our business attractive GCF, regardless customers. to high-quality make capacity end the key increased a again, XX%. our

This I'm early now across reflects seeing slide the wins we're company. Slide some XX/XX X. on

understand they're examples great improvement our in because and that actions to complexity We're we and of work, the opportunities place for are be must are with is engaged. intent to out root work. our customers, our to teams cause starting just to reduce standard Our safety to else. wasting better technology. taking Simply happening win advanced They've performance. here XX/XX as the teams. place a not for I analytics above include safety On analysis that's any call just And everything assess all and industry I'd safest work are put, improve the great with thought safety, time using some

talked reorganization productivity business already Also, pilot the X allow We're where moving us to double-digit a results. will and organization corporate plants the in on improvements. customers organization. seeing regions about matrix customer-focused we're I've focus from to a our

commercial incentive deliver. drive programs. are changed people and to better with strategy Importantly, growth They aligned and profitable our reward we've who those our sales simpler

great with complexity. that at of business their example large look mix partner customer we who Another driving to huge is a strategic was

of for order pattern the X,XXX saved complexity improved kinds By and which found service significantly future. can in change These over hours examples to opportunities across the working reduced their more system of together, the be time we levels.

to We partner couple were a suppliers with excitement we of strategic as encouraged hit terms. able more the where company cost across also growth. of deliver we're There wins profitable quick in to the we by had Europe, but and is to to commitment in and and sourcing U.S. improve level safe, the come, work

to DS progress and part X. has business the our we're needs right. take the There's docks to acquisition. shipping it only Ultimately, the of at it powerful momentum Along every strong the journey, model starting with in a very XX/XX on in shareholder good is All the I'm excited we're not paper to but to all company. box XX/XX and at you've complete when sure company, IP, C-suite, lived machines just with seen plants. Smith support. the hold but I'm Slide customers

X together organizations bringing and Europe. winning in great of We're markets the positions and attractive North America building

the in of first close to early upon completion regulatory reviews. expect We quarter

evolved teams and leader addition as serve announce the as Our the the interim Smith that CFO. the of his MEA DS in combined planning are Tim teams closing to Nicholls responsibilities transaction, to in for integration. IP pleased actively I'm will after

enable teams finance this. to at to do fortunate are us that We have DS Smith and IP outstanding

Finally, opportunities we're will York our creation XXXX company. value Stock at details This that we happy the will Freedom share March to opportunity Hall and for the at strategy an Exchange. an Day be host across New Investor XX, about announce on us to

Now let quarter the the performance third me and turn to outlook.

I'll X. I'm us the to First, then and through Tim, who some Slide details. it share turn highlights on will walk

Our will portfolio. as higher third the issues address strong our costs, about quarter. for the lower some Tim go-to-market were labor he strategy. as sequentially mill Box price our Volumes performance. seasonally Operating included the expected. in benefit costs came driven due lower Better higher This by covers improvements and was seasonally segment across to are business employee which outlook performance above in quarter system, our compensation volumes reliability $XX incentive from earnings million of

serve. we and softening, demand see terms In to North seen the America have across market, continue we improving of various In however. to the segments stable underlying trends in Europe, some we moderately

prior as volumes higher As lagged restructure improve primarily issues performance, to to overall and we commercial performance. Relative offset employee market expected, agreements IP's as to were spending incentive inflation, we've improve related sales compensation year costs, revenues by higher packaging well as to some had reliability overall the profitability. future

laser-focused reducing costs we're structural company, As I on mentioned earlier, we the and taking are across actions.

packaging from fourth As our across stick. price earnings the business we we the as expect into index look increases our higher prior quarter, movement

improved costs also maintenance and lower for outages. lower operations We expect planned

with we're out expect the in closures facility the declines significant earlier. depreciation GCS index that calling mentioned In of expenses and outages. price higher accelerated a result prior associated We as maintenance lower earnings quarter, planned I fourth also

With our outlook. that, performance Tim, me let more will and details provide turn third of to quarter over who our it

Great. Thanks, Andy.

provide as the turning bridge. Slide earnings I'll Now through walk XX. quarter third more sequential the about to details we

the share movements prior in flow-through earnings was Third both businesses. box higher commercial strategy. and $X.XX compared quarter. per Price trade-offs benefits price per volume well and our per share of unfavorable the . actions. second driven lower to mix restructuring as prices the Box some go-to-market from operating as by by due contract related share, Higher was to quarter was adjusted as index by margin in seasonally $X.XX $X.XX Volume executing to successfully $X.XX export shipments

the near trends portfolio effective sequentially commercial compensation, Operations in was incentive unfavorable is quarter labor higher in reliability $X.XX and $X.XX strategies share to higher incidents unfavorable from share spending across impacted the for largely a items per some by share continue Although tax favorably employee to cost and demand as see some lower items sequentially by per higher were the sequentially. seasonally costs, deploying impacts. were expected. we weather or timing impact continues were And our by higher inputs rate. volumes impact corporate This lower $X.XX volumes, outages with the favorable finally, of and the and term wood. and to energy third and million earnings due $XX corporate per costs Maintenance of

approximately $XX XX, mix turn of the was and we due If the benefit Slide of from Price million to movement. Packaging. Industrial I'll realization index higher to prior cover

go-to-market less due $XX earnings Additional seasonality million quarter. contributed from exports $XX million. $XX our million benefits strategy contributed lower shipping to box and Volume one sequentially approximately approximately to by and in day the third was higher

on term, but will our In addition, based over go-to-market we our mix will allow margins longer improve choices strategy near volume our negatively term. and made impact the the to that in Box us

costs the Operations mills, of higher $XX and input costs maintenance were were to compensation. partially outages wood sequentially million primarily earlier occurred year. due costs that due proceeds labor higher million and for the energy [indiscernible] by volumes, unfavorable, and primarily $XX unfavorable incidents Planned from in that million cost higher lower this insurance million plant $XX reliability includes $XX [indiscernible] unfavorable Ops sequentially costs. and employee million a was fire impact $XX occurred incentive offset also seasonally and to higher by

an unfavorable higher input by and incidents of sequentially Operations maintenance due to million $XX a million. unfavorable were turn addition the costs higher lower compensation. $XX finally, movements. to flat, other costs. impact our sequentially incentive third wood we mills higher few from at outages energy Slide index lower by If were and Volume costs And to million sequentially offsetting which covering reliability was $X includes $XX million, million. GCF, was by items, costs Planned and quarter employee mix XX chemical with by price were and including Price in in lower $XX

the we've $XX of expense be I'm XX sequentially fourth will each earnings. with note out for the from due million, business. Packaging included are in to details depreciation I accelerated announced line And million. be in $XX that accelerated guidance on depreciation we which Earnings segment of our Industrial operating by quarter to accelerated approximately now. expense so in significant the would closures, that facility the impact previously Slide And before SEC, includes be called into expected get will a outlook, depreciation for higher

Fibers of million by lower as includes Cellulose to depreciation expected higher expense well Global planned sequentially are accelerated $XXX approximately as be which maintenance for million Earnings $XXX outages.

you by Industrial the let give segment. business Now breakdown me with I'll start Packaging.

We America mix with million favorable the improvement sequentially. mix FOX and improve and packaging actions earnings by North season business The primarily movement from includes our vegetable and expect the boot This in given go-to-market price previous EMEA strategy. of prior also under strong result to some Morocco. our $XX is in fresh sequential index benefit

Volume less by demand. seasonally to shipping million decrease higher $XX is due expected X earnings daily by offset days, partially to

the which third costs We earnings by and and and costs operations expect by proceeds nonrepeat includes insurance performance partially $X increase This the of improved reliability, quarter. seasonal to higher in million. are received offset

X business by maintenance outage $XX to $XX And facility increase increase by in closures expected lastly, to lower by expense earnings $XX million the the wood is expect lower will fourth expected packaging are to and decrease approximately We OCC cost. depreciation due million, due quarter. the for costs Lower primarily input packaging to earnings million. accelerated earnings

to and expect earnings Cellulose we result expected a $XX decrease by index Global be approximately Switching movement. Volume price of prior mix as million Fibers, stable. to to is

which We due million increase and distribution higher costs to $X offset by costs. and earnings is improved expect reliability performance operations approximately partially seasonal by to and

expense will Georgetown are to planned business $XX $XXX is to quarter million. decrease due the the depreciation outage And decrease approximately the by approximately quarter. to accelerated in expected for costs expect We earnings fourth Higher earnings closure be pulp of stable. lastly, maintenance fourth in input the the by mill million expected

that, And with Andy. to back I'll turn it over

to turn to Slide great confident strategy our deliver We're now own we're customer look, and we're culture. making and we a we'll plan talented great taking actions. that we're and the a accelerate taking and And and to profitable destiny, way Again, customer-centric right have the choices performance-driven building work, right we're growth. our improvement. making to a concrete control performance a and actions create well to team I'm Tim, XX. Thanks, to and excellence progress, place on drive

for improvements at our that, transformational With and ready now drive will actions Our take value shareholders. to operator, IP questions. create significant we're

of Phil Our first Ng the is from going Instructions] with [Operator Jefferies. question to come line

this inspirational in guys really in the Andy, of progress it's been you made terms have short time.

-- that coming you early employees, didn't it Tim's okay. you're lot exciting more a look yourselves sequentially seem at was for shipments there. at forecast box customers as how change optimize, that I to So of behavior? of leakage look kind really the incentive any of looking the of comp is realigned are you any It for looked there along? mix progress structure your know U.S., I seeing findings, And in you've incremental if like

negotiation So is seeing that the us contract side? how on customer on update progressing? churn incremental more you give an Are

question. the Appreciate Phil. Thanks,

just of me tremendous incredibly and of done a do a to earnings, the advance morning We work to have months today job. people here were call just let of folks teams talk recognize first able bunch last momentum. the a hard all, create look, and in to done recognize X the having we So and the for

least like feels I is, we're accomplished. question just the to gun that to your here we what recognize that to will to back the be want has half quarters. volume we for back slowed. say, seeing there expect growth. it and because But down work Specific year, next don't leakage next to get the volume, it's it still we monumental here do market So to I the at expect that we on and And turn year-over-year been personally, gone expect that's we jump of I the have few

the I And so is would we're say what losses. now seeing right expected

which range So is at if of of are look we better that the -- expectations, of the losses, than end of of those we bottom positive. kind volume band

that much, We I also market of say, priorities clear I'd look, work what about film, -- market. getting segments for gotten the to the if through us. let's simplify use if much XX/XX the have U.S. just were of And sharper you are

a the U.S. in is about middle. there's feet And XXX standpoint. billion from XX% the big square packaging about market put that So of I --

good. which is to are end, really where is that really, on price-sensitive other the the XX% on smaller And middle, So sweet us it customers. one to tends be for end, spot That be very customers. right? Frankly, big local is we tends larger

those we spectrum, can Obviously, our really the But with on market -- for people business. focus going business we're very strategy. We're if producer. much be on folks good to terms frankly, we're to given our do across we our but strategy the be we're player, to position. is conditions, our do and going open not be again producer. And low-price going business is And low-cost we match the low-cost who about the

be on that we and are big the that We are is really we overall going service, us, spot like that going invest to that really we for match strength customers in to have and positioning. the and sweet middle are great where

that's was not position differentiated terms a that head position in joining the company, and things We this one In business the have commodity, become highly of commodity. was first ringing thought when is, what love highly I starts regional And super further our about it's then have as the case, my commodity the in segmentation, local. about And can about differentiated of talked a I and I really to marketplace. right?

aligned we've and that highly where identified in of focus I the that what regionally. feel about commercial good there proposition X value with now out as is customer wants. the training XX/XX feel the our good big we've out rolling are We've been training, segmentation. opportunity the marketplace So I regional about done chunks

we're that It's call a that to in good has think But slowed. I the turn. right the heading feel I too direction. leakage do So early certainly

about wins few more of broadly early exciting. to kind the box highlighted ability your in and terms on of the customer side efficiency, changeover. kind kind more to and where large able program really then reduce And the Okay. of also, pretty that That's to the Super. unlock complexity things, reduce of you're ramp you a talked you a pilot then

your broadly So out more to well. of roll that ability kind as

Yes.

those out can't I nuanced, So Phil, those think things, are about company. the across both I those you important think, rolling X those are but how stress as really examples

about And plant. plant and plant. region box what's other we've plants. volume "Oh, in box No, [indiscernible] a effectively you happening, the becomes is And our just think fundamentally, pilots, can So we've one you let's our it plant done mix, plants. specialized put X high you're the some low a be mix have and now for high we a stratified to tendency say, there a well, what becomes

dealing . And high can the equipment their changeovers, greater can that's with build model changeovers, get And they different be can what even the customer volume, talking that a build the can right? mix with about tremendous entire plan start get then so drives there. high their aligned They plant efficiency one the what thinking about greater needs. labor when and around force business capitalize, you you're certain

those capitalization entire things the different. workflow, can the be So

talking that, we at them regions. in dynamics I call of half everywhere can't that would within those do would least about. XX expect have that the that probably But country. we've got And And XX, we're regions so the

can at that those we options. of And look kind -- so

that's forget in that don't really what is So important. exciting. comes And

"Hey, that of Well, capacity are So could That's that that a we look closed underutilized, can someone customer some the at problem. were system. taking out move to place X the capacity. plants, and of have but we XXX% those plants say, you're we

by rather the the after talk overall going I've levels. -- grow we and in not said in incrementally look about probably can brownfields driving more at And about service look get system long -- our capital. planning we'll up productivity about going and right after productivity, we our really brownfields to means that talk the greenfields we that productivity we're drive the as for capacity we customers. that to future and growth that, scared then as we'll put at quarter our the direction, to for And And these at And be as specific more the strategy our capital open looking call, and in these fourth hopefully, we're and for customers the and what investing. greenfields, is on

show you're if of down to when on specific very it's Well, right, either with to produce to "Hey, delivery, you one a what up, the a want. about we say, it there working time. trying what that's Relative really hard patterns total if or They've you to with specific that and business need? that, a is want a kind stuff. you are even they service gotten they And to quite all of levels what and that customer, to delivery rapid not hand have really by demanding change Even getting example, kind response that is win-win order over to around. day, I have order able moving be in street you X customer do have outcome. that, And about inventory who partner just love what model, a by to you aren't about kind And have of able that have we're to same think do them right? on-time it's

change of mean us. you when if big, win-win. time. think trying maybe to that You is number find great that do the or got have big, facilities, about facility And of to and one be we're big but X,XXX think X. about needs you drive we we've that X our that's can a over how our That's capital demand found one down that, that what able customer costs, to I hours customer, where meet also impacts balance X

the from comes question next of Securities. Our Michael Truist line Roxland with

Can methodology the average means EBITDA productivity do this busy. this at lastly, apply what the improvement. that And a those on slightly this in XX% deploying and mill talk well? can see you've on terms of Phil's to you Obviously, out? what than moment, system you box quarter. question for over as that time been your you regarding [indiscernible] rolling More all about something at Great XX% to frame just follow-up is

Yes. Michael. Great questions,

on think I So that's position by plant. the of the low-cost looking don't box focus and you're if while I is great right were customer EBITDA you, great out I that. Because doing measure. box what for your plants service a wouldn't really

level, your our second your talk drive And you're move if and think world, to percent margins productivity XX% a to the right? starts put fixed kick to then go XX% to you so create if In that over XX% It's business, base, get that a you true going in we're contribution is where and mill . When of the and and But of get from starts of a if this, can business, of you the in. goes of to can XX-plus do we box I a which within and going to incremental you'd let's virtuous this flexibility. plant want right? That's me about we're way create part in let's cycle you our now productivity, if to my is The like to cost you [indiscernible] to on meaning a kind box old about I of mill. that's that right? the think drive in not unit of So region XX% of I if talking have that, productivity. before, kind dollar huge, magic math way question, all back plant because a able it. you it, happen. That's reinvest or another put wrong was Don't production think the to pocket. would

lowers does plant box allows intensity local again, cost structure these allow right? your So customer intensity. you to flexibility then as needs, great customer improving to improving and it lowering it profitability, also, service, what right? creates ultimately the service, do. That's what it do you're you this, for lowers it you grow, you're capital you're And your is it side, On capital things

outstanding. is your ROIC So just

that can answer mill right? the different, It's the yes, different And it's a philosophically, you is to the It's in thing, do but question system. same. your

about winder. let's -- let's an of think use So just example a

making you're the paper, you're at So winder.

winders means having tend be bottlenecks, place that your us, For company, is the they to in are most so to right? your -- what dangerous the people operations. with dangerous and interact place are And interacting the in also most

you you're the analytics, start people bottlenecks on you're the are, So doing technology. introducing interactions focusing on what the you're focusing

on of now actually that down things right is dangerous that place, time to technology we're One right? human working gets will the optical a shut any machines a

that Amazon So industrial certain we're look, starting anyone to an environment. to you go, beta And is and to an the test like put in that into mills. goes technology out there just do how

mills Toyota XXXX, going strategy. familiar policy to plants. called in use with you on deployment, you Very we call with going that are of are methodology a we're who disciplined the Those absolutely would deployment. box call it, to going lighthouses, planning strategy very I'm you to So of create importantly, and can what deploying think ocean of a process production or do the [indiscernible] system, if or it's [indiscernible] and

So for [indiscernible]. that to things Those integration on us, we We're be we're focus going the and to going the to focus next deploy are safety. XX/XX year. on going of

employ. strategy a that to the to of of trying handful we're deployment, where best-in-class there houses, will you're trying what create examples I In white that call be

mill they White couple Houses with integrated Houses. we're plant and to going in X strategy mills, And White we'll going take then commercial an pilots a teams. we're the do We're We're to take So country. and in are that X will regions take right? going these be become nonintegrated the to and so also to that of deployment. going box using Those a of X different there will continue mill,

So XXXX with true of it it we you examples how and get best. to the end do you is should have do and what of

the all to levels when of my entire XX,XXX same experience be with don't to the Smith, try you you people, been get people enterprise anywhere. So XX,XXX do DS of has at things kind soon across

a a of deep of And to to kind out get different the then that deep. get want mile do You is we to we and mile and drive what inch demonstrate wide parts organization. great want results and then

Obviously, and positive. work but it it the trajectory a ahead, color. has tremendous of appreciate the I very on amount seems Gto

And Michael, real quick.

One time on spend on So definitely we spend so had going we'll of Smith we'll lighthouses. the time March things a on We'll the also, spend the are time 'XX, Investor to you bunch of right? guys the DS these see when integration. Day, lighthouses,

to firsthand kind of you'll in how these working So practice. things are get see

Sorry, Mike, had another we question?

No, and One quick this this is is -- follow-up. great.

terms mill obviously, the a earlier for the additional closed optimization, potential this year. In orange of company portfolio

I right a analyze conference, that is for trying think Where at analysis the company you at stand portfolio further the potential overcapacitized. rightsizing does what's now? where to mentioned recent mill level? And the

Great Yes. question.

course this Smith reasons, in for which We're So analyze second again, regulatory We've the acquisition, of those in lots talked the conversations of in be of quarter. approvals. we right? DS is different through to least to about got not there. careful going

being careful we're So there.

segments are frankly, And products GCF, volatility. -- are sub aren't we of like us. capital that what's and within entire the commoditized for lots example is high say Those think Those the we're places this look at to of at is which earnings good intensity. portfolio. that, business stuff I throughout SBSK looking have fair are more right, business that looking

we Collins see some you're constant a of have business read going down path book, for with integrated march you in less more of us is -- march to become the XX-mile a a do volatility. how the Jim What

thing volatile. uncertainty, volatility just One we look actually us do that's that it business, is demand volume, we very wonderful kind think, businesses what core and mean here think lot I people are to value a at not that integrated us to things of do. see to across a your on going very businesses too. And right, just that be to been, we to in, as that. the go is I of for our forward, and you you packaging the going When things I that are not high-value into isn't look business and side see patterns you portfolio be you're just table, -- uncertainty I deemphasize understand our the being of the therefore, you're you'll want would volatility induce going that's as what And lower. of

Our next Mark line question comes of from with the Seaport. Weintraub

Congrats on so far. all the progress

$X So the correctly. out, certainly now and billion about And remembering $X billion, or I'm strategic. talked laid of of $X billion ops, we see actions picture, cost your big the from if some sort being you

flow doing beyond I that's wise which be even in I that labor I XX/XX what year, don't on then a that can little $X say, assume [indiscernible], but is, strategic but from typical realize direct. into the $X about could understand offset. then beyond, consider base obviously I or would I that thinking Now billion I benefits above XXXX this in the billion. I what have you you bit much I'm you'd guess If that potentially through run you're just would layer trying then the particularly in know, understand mouthful say, and as identified there, let's how be and beyond 'XX, hopefully, and something too. something of, you're a you've And more to that, I'm rate a entering and actions --

what let you're that -- is sure that 'XX understand could just I'm over kind make you asking. what try what the in of asking? are -- me me you're -- Is above benefits be I what asking Let inflation?

heart yes. it, the At of

Okay.

look and of about a right? is XXXX. Mark, And will name Danaher, we I as I my way, had not first cost of right? privilege sitting there's from and they are George and opportunity was office They being of And his be like think So an something across more very Okay. talk commercial. want more can. opportunity. hopefully, versus a the of -- wonderful going net to brought do work build an that what to a think, The way we numbers this George I it's had right started numbers, and forward by Sherman, Obviously, the I So as the pull think control it journey, gentleman I that early career in for all it's that business. intern of a to XX-XX awesome the happen the at by And [indiscernible] that's Georgia. split lot CEO to that multiyear near-term I in the much I that. rail

One of get right, ahead the get things that George is would ahead. say

get we're right ahead. now to trying do what is so trying And to we're

to frankly, invest candid What in to ahead profitability base is ability us benefit improve great cost of need business. structure in guys that's right. to cost right the it's while gives and get to back And we you, business our with to and the now. the invest the getting the that trying be a back We're

dividing do same get to we're on hard to different into you have parts a X going concrete, we We'll things it. pull I as 'XX. them, they once. the marathon. we're do go having -- as to people to Mark, you'd at the can as so run was try exercise this so when forward different fit, so responsible. of it focused really to run much to You a we're things, don't trying you're specific can can different We work and but going I'm as can't human by fall marathon. apologize just At not sure they we're like today, I've they but card. and And organization tomorrow, this When the Organizations, and being into right? And running you to be body. start flabby we run get trying marathon yourself like, time,

move as not can, irresponsible. quickly so that but we so as we And we'll are

that the [indiscernible]. appreciate though in in outdistance it fair inflation say and even the I stages, XX/XX benefits provide XXXX, Is earlier from that. like should conceptually to

I'm Sorry. my the is 'XX. sorry, equation We will positive Mark. cost and be at Yes, expectation inflation right. should absolutely, -- that

McKellar next the question with of comes from Matthew RBC. line Our

can BSF system exist the already on the specialization across about that this call comment characterize to opportunity well? If their you approach how this box bring to you would as this talked regional you of plant concept box line Or system?

I are better about terrific well IP things really, it. -- really than us. Yes. doubt frankly, look, they've There's are company, done that, than some no Smith They commercially. they DS and really, mean a better is

of ahead no And so doubt. are some opportunities. regards I -- us think in there there's commercially But be they yes, will further

probably I fewer think in have U.S. than in the you you have proportionally probably plays fewer density Europe

I think true. that's probably

work fewer a it you that. due than works. It though practice, how And You like Even that. of that boundaries. have union to part theoretically have country in doesn't is

uniqueness around that be have in boundaries you so will Europe country And different.

synergies we've But of to is $XXX are obviously, think want and synergies, That to is that in to [indiscernible] of insights, be the bunch being million there's from focus ahead there. we cost responsible the outlined call there. And upside on [indiscernible] of segmentation ability and productivity potentially improve want think going customers, a deliver we able that again, outlined, out million our we've which about be important said, So to called right? and we ability be to the going we be get our most there, the to to absolutely there. how we we've what

that in always a corporate IP. it have better. clearly actually already better. which better opportunities, some are is there will easier. Commercial, yes, than decentralized they things but doesn't be different. They it but structure, place different a mean place, And are So DS clearly Smith a will makes be frankly

decentralization big you they've a on That's focused there what to are right that. great of in done so managing the I the the price DS it mean, it matrix. quickly the -- focus organization benefits. is allows customer, some for But things, do businesses the highly isn't on not become to the of on already the one Smith, thing. allows reasons moving of Memphis. cost corporate cost yes, mean the structure for I benefits. with

is So products the to get and can growth. is we customers means around what kind which of and fund, that

And insights fundamentally there's going there, path. of a different lots that we'll so but it's be XX/XX have to

And then on just GCF. one quick one

options value of reach As the are case line that part sale other completion then and to you review your color then of appropriate you options there, sale, business? for just about process. the strategic how your are of time evaluating any an of around thinking in than the And

Yes.

tough. I understand So options. other I mean questions, some we you're asking it yes, is evaluate why those of pretty

We will evaluate every frankly. kind of option,

be I and likely robust. are the of think a very option. That's parties. We who a sale. likely expressed most will the interest. to We've most had option people have have There out us lot certainly interested is the think reached process

doubt about no have We that.

is more and is to because want see recognize of right? the business, business. me or and this that good that the to have something we has One I'm listen investors to value, I don't because of I understand here on things this value but that to terms to recognize, that very a this myself. than mean right, a negotiate meaning is of going good importantly, -- is failed didn't itself against think I right? And calls, people just In impressed didn't not true, make meaning One important failed these things you speculate don't wasn't

highly We've a supply global position valued got commodity. in a XX%

trust that so. a great right? and provide on And do team trust so. that absorbed specifically fluff best with to assets us make have us customers, products, we great our customers absolutely them They absolutely the Our side, the to

So whether that the we owns else going of performance been. is to it's own somebody it it, or meaningfully be different business what than

comes Charlie Our the from Paribas. BNP next of line Muir-Sands with question

First one Fibers is Cellulose Global the just staying with business.

more Is sale the you to anticipated coming much very targets Can in much that the how $X us give billion is that had from is auction. in Now bit potential group detail a of you on uplift just bundling opportunity $XXX from EBITDA million the as it part within that the EBITDA was $XXX well? to million $XX into then number think procurement meaningful [indiscernible], million. identify so sorry, a of I And far? that also

captured don't got right. make -- I I sure I've it think

getting of the it's relatively GCF, billion. to of It's to pretty of kind part that. $X a relative the a So part small small

to trade-offs impact and the that of of we'd to point that the would our expected meaningfully I relative don't that, -- capital bring view. in, think So

So that would perspective my be there.

insights where the that, with guidance procurement about think give no, kind that's strategy. you the Those not of and them were down frankly, are look, once really with great to and love digging suppliers. we those specifically of had go a able people of a on here, I provide beating I XX/XX to couple partner And isn't The that. start savings, they stupid are is what part about procurement X caustic suppliers. the opportunities actually this team great wins

I do think to you're trying trying what is to suppliers. you're partner with

who service, really You're like trying get can profitably grow to changeovers, on with customers getting with find better you're win-wins to play for create terms, partnerships. so we you're those trying did better and those our they where just and to ball

the examples, no those in Europe, in in So X not included X were they XXX. U.S., X the

Can how talked Very means? including variable clear. costs, yes, XX% the improvement, achieving about lower that? materials just XX% are measuring total or you've just to that to in returning you XX% pilots. productivity excluding that the And raw actually or to clarify Is you what XX%

to way I Yes. think that's The it think to mean, way it. simple feet as of in it example of of kind is unit. square is of per this the think

faster And and fixed ideal certain to through You're it you to going at you're right? over contribution the drop output base. of there, and thing, can facilities. margin. you very high that's choices, could it's So allow to consolidate levels going then have from facilities a So other right? very, grow either you grow into

X have we different So stories. of in kind our case,

they're If in frankly, you U.S. U.S., the in overutilized, got you've right? that are, parts look the

and There's to aggressively to demand too you free that country need we're trying can't then capacity much have do have out. the to capacity and And that. so up of be satisfied capacity you take parts that

in parts have plants have been So we closed country X so being capacity. that much too the about that the of far

plants for specific higher objective, existing capacity very facilities. get real free to But the the fixed you margins. so savings much that variable other from growth to those as right, and moves cost volume recognize is And contribution

to that's [indiscernible]. the plant and some pilots of So kind tied the in therefore, X the of are closures

but goes been not opportunities has That Yes. so case time as certainly the far, on. see we'll

see you'll forward. we So as that go a mix of

Our from Wells Fargo. Gabe with of Hajde line final come question the will

about little Andy, freeing to like about -- here increasing in system. more up of what certain system bit much productivity. I you're you're talking maybe in of question, converting how started parts is last a address your the is is the wanted you maybe seeing question ask, the across of what to which And some capacity

think it talked or marketplace. about a the costs like capacity per we from something foot versus there's up what's doesn't I capacity print employee you about of when square the in other across employee like players, that, it seem maybe because look basis, variable added freeing been shortage converting

capacity. seems So little to up a it free circular

is think here plants cost about you the that said, do how side, Or a So balance? again, we is oh, there's cost savings bottleneck . where many this and we us, see maybe quantify and like you for productivity on have

Yes.

very highest So you're very, And one touching it at important. on something the level. you that's the at of conundrum, when look

States. is United level, shortage on look you you're the converting converting in capacity of the not when at a There right. absolutely highest capacity So

region, by is too that have balance. right? that is made you of the you do have over have have capacity way mistakes finding region one we you as choices tough However, enough. And much right that the aggressive that not not look have have about region, made by places and region places true, that choice is time and then not the So we

investing that So places taking we places of we and have out have shouldn't aggressively should capacity in where then it. it.

right the got that we importantly, we and our position, look I there, got strength a subsegment. bit balance. got do to we're little have differentiated think find win We can places we a the play very real need a play win. to kind we've really that's and really in retrench, is, ball trying places on we where We that to we're got places to that right? in We've what we're trying heels. to to play, to get to of And

in up local decentralized. mean business, can is lot you this had I most this a business. thoughtful. local very [indiscernible], mean, more be business looking the like in one this right, Europe very, to is which a got we've ended I it is very actually, I what U.S. which is be of and so about a exciting And things again, that the this -- highly

when think there about are the those You working is customers that the -- local in can that how build that segments you strategies because -- of right. with the to overlay that is very local market tend are businesses specific be locations, around

there's and segments. are requirements general market then And There's segments those specific the of segments different. performance market market

And allow needs the in on locally, think about very different. so have but when while the strength allow low our allow how competitively general the entrepreneurial about think them we that different. is people same, about that our market IP the because and you think differentiation the should of should service you be actually position scale in based to scope. strategies executed is cost investing when are when of excellence, you huge to drive then And to a advantage our market. and therefore, and be We

Thank you.

-- You your talked the wins examples or and looking and early like where by more have up. toe, and you're or you . across been walked of this that don't us when want say things you've just attention that a cautious things assets organization stuff encouraged lot and or trip I'm at about things maybe there always is meeting with the your I mean I stub but way. Are that brought could it -- to

success. -- I we've bottlenecks or that I are to are potential that There at they look Yes. a few things know roadblocks got

I think that's what you're getting.

to the and hard makes to through, a clear, who their really, asked live very boss doing is do are early focus people what trying it makes the It understand work complicated. your excellence. no exactly work To Memphis Memphis off structure is. this and of tails here it that's and and one's is this of one It really they're to line with do really, again, we the created to priorities on is is what they're reasons have. they're That's and the it what are the So working right? in -- and fault. we who difficult being bottom be -- But matrix

the the there, to not be the the customer, need CEO, to right? customer, we you weren't. it's the to boss. at is and the sorry, customers. Directors, not investor, The day, the not And aligned to aligned Board we to And folks needed the to boss customer of of be And is end the to we but

reason so the institutional people am reason this lot just around mention used not The we've the for I is because the through memory. is to a And here, announcements changes made And made early of work, of that decades we've there's that. I that focus right? the a structural [indiscernible] are and working

of how bringing change That's the XX/XX. that the is we work. in to deployment have we We strategy block a actually and And process one that don't deploying potential stumbling we change of is work. how reasons

XX%, give So earnings this, how of goofy function. I'll XX/XX I I So every [indiscernible] time a earnings of we don't our out estimate we right? example can't And XX%. -- much our prep. single prep, took even

of because, potential frankly, ask. Just trying to every answer out anything question of come ever were would you could the prep guys, we it ever

XX%. to Well, we're the and not going to let's -- get so

the do And general matter. excellence. are We like downstream by know guys know really things the sounds matter. example, that on, and let's get that capital, that things to like a you the to going with budgets. get things we questions like the answers Those I how we work do Let's things that, stuff but how like goofy gets that caused to work

we so things have happen. to those change And how

be at we X the to don't corporate number to their would is we feet. in you the XXX, else right? organization. excellent good we people right? get those public company. X,XXX X at a is make remember, people everything what it's We of the corporate we're That that we people center let's the And what in the center. up, all folks people as business. mean corporate what need center. sure You reality is you running a a have doesn't because in were X,XXX away. leaving That -- that place that's and again, on defined That's the Everybody But in And define that to working went not of is those functions who corporate need are the XXX ago, center. land happened, saw need the announced that doing Today, weeks there

boss the aligned else with everybody is now So customer. and boss the the is

And to now any for comments. I will Andy back the Silvernail closing turn over call

amount the last this a taking of remember all to spending people. all thank done. of to today tough. organizations in, want of Also, incredibly are and things we're they've you time proud of has let's our I'm that I doing are Well, gone time And tremendous X work journey. for for just the in your listening months. made Again, that that team

to We are we to the get move And those stuff. but -- tough do mindful -- I'm that are And having so stuff pace. about the can impacted. going means that. we that good to people are really with And

We to are going excellence. with move

difficult, deliver are our to and for the things. organization that . the to for even delivers happens, we we're We because our a owners. do things doing the people. is right It build the going doing though things And we are customers. right delivers right that for great when our it's goal And

do of this we heading. be we're very to and direction here, we proud team. what move we're turn as into feel our to great and I'm something proud through have and people I so going this of this I'm it part And the special, through about

So thank very much. you

to Once thank Earnings participating you Third XXXX Quarter again, Call. like for Paper's in we'd International

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