International Paper Q4 2025 International Paper Co Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 International Paper Co Earnings Call
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Speaker #1: After the speaker's remarks, you will have It is now my pleasure to turn the call Investment in the business to accelerate organic growth, drive productivity, and support disciplined bolt-on acquisitions.
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Due to time restraints, we ask that you limit it to 1. Question in 1 question. Only press 1 to withdraw, your question. Press 1. Again, if it is now my pleasure to turn the call over to Mandy Gillan, senior director of investor relations. Ma'am. The floor is yours.
Good morning and good afternoon, and thank you for joining International papers. Fourth quarter, 2025 earnings call, our speakers. This morning are Andy, Silvernail, chairman and chief executive officer. Lance Loeffler, senior vice, president, and Chief Financial Officer, and Tim Nichols, Executive Vice President, and president of Dia Smith.
There is important information at the beginning of our presentation, including certain legal disclaimers. For example, during the call, we will make forward-looking statements that are subject to risks and uncertainties.
These and other factors that could cause or contribute to actual results. Differing materially from such forward-looking statements can be found in our press releases and reports filed with the US Securities and Exchange Commission.
We will also present certain non-us, gaap financial information, a Reconciliation of those figures to US. Gaap Financial measures is available on our website.
Our website also contains copies of the fourth quarter earnings press release and today's presentation slides
Beginning on slide 3 before we jump into the presentation. I want to provide Clarity on what will be discussed on the call today.
We will Begin by walking through the separation announcement for the Emma packaging business.
Then we will discuss our 2025 full year and fourth quarter results.
Followed by our outlook for packaging Solutions, North America and packaging Solutions and Mia.
We will close out the call with Q&A.
So now, let me turn the call over to Andy Silvernail. Who will start on slide 4?
Thanks, Mandy, good morning. Good afternoon everybody, and thank you for joining us to discuss the next steps in our transformation Journey.
Today, I'm excited to announce our plan to create 2 publicly traded. Scaled Regional packaging solution leaders in North America and Amia
I recognize that this action understandably is a surprise to most of you, but during this call, I'll walk you through. Why this is the right step to accelerate value creation for both businesses.
My objective today is to answer a few critical questions. What? Why? And why now?
We look forward to helping you understand how this Swift decisive action is a continuation of our 8020 Focus strategy and accelerate toward our Ambitions and supports our ultimate objective. Which as always is to maximize long-term value, for our shareholders, but first, turn in slide 5.
I want to Anchor you in our core strategy and how we operationalize it to our 8020 performance system.
While our portfolio is changing. The core strategic principles in the operating model are not.
80/20 is the driver for our transformation, the lens. We use to determine where to play and how to win and to guide us on how we operate each day.
The 4 elements of 80/20 are simplified segment resource and grow, and they ensure that resources are focused on the highest value areas across geographies customers and products.
The 8020 methodology is also how we drive sustainable value creation through our virtuous cycle. As we build an advantage cost position and a high relative Supply position all delivered for world-class customer experience.
I'm now on slide 6.
The acquisition of DS Smith, strengthened our regional footprint and positions both businesses in North American Amia to advance our virtuous cycle.
Through the application of 8020. We have made significant progress on building a cost decision, executing 710 million of cost out actions through 2025, on a full run rate basis, which includes Synergy benefits, that'll be realized in 2026 and 2027
This was achieved through actions such as optimizing our footprint in North America, streamlining and reducing structural organizational layers in Amia and exiting lower margin segments.
The combination also Advanced our competitive positioning our voice of the customer surveys show that we have achieved the highest customer satisfaction among direct competitors in North America, and leading scorers on customer experience, relative to the other top players in Amia.
The improved positioning and bolstered operational capabilities will provide an ongoing benefits for each independent region going forward.
7.
So why separate and why now,
The combination of Ip and DS Smith enabled, important steps forward in terms of cost and relative Supply positions.
And enabled Superior customer experience as demonstrated by a high and increasing in region. Net promoter scores.
Since the combination, our teams have made tremendous, progress, rapidly integrating the businesses within each region and implementing our E20 road map.
I'm proud of how our teams have embraced The Challenge and because of these efforts, it has become clear. That each business is at a positive inflection point.
By acting. Now, we can more fully enable the full potential of each business.
Taking this action will allow both businesses to accelerate progress. Toward maximizing long-term profitable growth to Greater speed agility and differentiation as well as enhanced focus on the different regions and targeted investment approaches.
Creating an independent companies will further enable the businesses to win in distinctive competitive markets through focused leadership Taylor commercial, strategies independent, balance sheets and flexible Capital allocation aligned to attractive, but different in region opportunities.
The separation will also give each business, the ability to customize their messaging for regional customers, without diluting the message for Global audience, which is a very small portion of the customer opportunity.
I'm now on slide 8.
Overall we are playing in the 2 most attractive, Global profit pools with significant and increasing demand. After the combination of Ip and DS Smith, the regional integration of the Legacy positions of both businesses, each of the regional businesses is better equipped to compete and win in their respective geographies.
However, there are key structural differences in the competitive and Commercial Landscapes, that will require tailored commercial and capital allocation strategies going forward.
North America is more integrated and resilient in terms of Supply positions and buyers has a high degree of Supply integration and steady demand growth.
Am Mia has more localized Dynamics at the country level and relatively higher demand growth.
Customers in a Mia value, different product, and supplier traits as well with greater emphasis on sustainability.
Consequently, it's important that each business unit, tailor it strategy to best meet the distinct customer expectations in their markets.
Creating 2 separate businesses will enable each region to accelerate its path to long-term profitable growth.
I'm now on slide 9.
I want to address what is changing and what is not?
As we discussed our 8020 methodology starts with simplify which we have been working toward over the past year de-emphasizing or exiting select businesses markets and functions and then redirecting our resources to a sharper focus and higher value.
The action. We are discussing today is the next step in the 8020 performance system.
Segmenting the business to further optimize resource allocation and enable long-term profitable growth.
While these actions separates the businesses from 1 ENT to 2 discrete highly focused companies.
Both businesses will continue to emphasize the powerful operating discipline of 8020 and our 3, strategic pillars.
Our 8020 approach with a clear focus on cost optimization and operating efficiency strategy, execution, and customer centricity will remain core to both businesses.
The independent scale businesses will benefit from True alignment to the characteristics of their distinct customers and regions.
Local leadership and optimized capitalization strategies without Regional trade-offs.
Most importantly.
Both companies will continue to be customer-driven organizations, focus on delivering exceptional customer service, with attention to detail around on-time delivery quality and engagement.
Turning to slide 10. Let me provide an overview of what the post-separation International Paper will look like IP will be deleting scale. Sustainable. Packaging, Solutions provider in North America. Relentlessly focused on customers with an advantage cost position and leading Innovation capabilities.
The business will be comprised of the current packaging Solutions. North America including both Legacy, IP and DSM Smith assets.
As you can see from the ProForm results on the slide, the business that will become Standalone IP had full year 2025 net sales of more than 15 billion dollars and approximately 2.3 billion dollars of adjusted Eva that is poised to accelerate rapidly over the next 24 months.
The sharper Regional, Focus will enable IP to further accelerate value creation for our shareholders. We have already made significant progress, executing our transformation strategy, and expect the benefits to flow through adjusted Eva over the coming year.
We'll provide more detail about that in the earnings portion of the presentation.
Acceleration of our transformation to result in expanded. Margins growing. Free cash flow, which will support discipline investments in organic and inorganic growth opportunities.
We have a robust plan in place to continue delivering our strategic Ambitions, which you can see on slide 11.
This is a continuation of our 8020 approach in our virtuous cycle.
We will continue to assess our Mill and plant footprint and transform day-to-day operations, deliver differentiated customer service and develop and deploy local commercial strategies.
These actions will enable strategic reinvestment in the business to accelerate organic growth. Try productivity and support discipline bolt-on acquisitions.
This will all be supported by a strong investment, grade balance sheet, and a capital structure that supports an attractive dividend.
Our ultimate goal will continue to be to provide customers with the best possible solutions and creating value for our shareholders, as a preeminent packing company in North America.
I'll now turn the call over to Tim to talk about the post-separation of Mia, packaging business.
Thanks Andy. I'm on. Slide 12.
I'm excited to talk to you about the post-separation emea, packaging business, which will continue to be a leading provider of innovative, sustainable, packaging, Solutions, across Europe.
The new independent company will be defined by a strong customer relationships, high, performance operations, and best-in-class innovative solutions that help our customers meet their sustainability goals.
the business will be comprised of IP's current packaging Solutions, EMA business, including the combination of Legacy DS, Smith and ipss,
As you can see from the performer results on the slide, the business will become the Standalone. EMA business had full year 2025, net sales of approximately 8.5 billion dollars
And approximately 800 million dollars of adjusted, EA.
Over the past year, we have created and began to implement an 8020 roadmap based on the proven 8020 performance system.
This will all be supported by a strong investment-grade balance sheet and capital structure that supports an attractive dividend. Our ultimate goal will continue to be providing customers with the best possible solutions and creating value for our shareholders, as the preeminent packaging company in North America.
I'll now turn the call over to Tim to talk about the post-separation of MíA, packaging business.
We are still at an early stage of the transformation to optimize our footprint, structurally reduce cost and extend our Innovation leadership. But we expect to begin seeing the benefits of these actions in 2026.
Thanks Andy. I'm on, slide 12. I'm excited to talk to you about the post-operation mea packaging business, which will continue to be a leading provider of innovative, sustainable, packaging Solutions, across Europe.
The separation will enable us to accelerate. This progress enhancing the new company's ability to make both organic and inorganic investments into our business to further improve our cost position and enhance customer experience and relative Supply position.
The new independent company will be defined by its strong customer relationships, high-performance operations, and best-in-class innovative solutions that help our customers meet their sustainability goals.
You can see the priorities for the Post separation EMA, packaging business on site 13.
the business will be comprised of IP's current packaging Solutions, EMA business, including the combination of Legacy DS, Smith and ipss,
A key area of focus is to continue using our 8020 approach to complete the integration of Legacy Acquisitions made by Daya Smith. Prior to the combination with IP Transforming Our footprint and aligning resources to drive value.
As you can see from the performer results on the slide, the business will become the standalone. EMA business had full-year 2025 net sales of approximately $8.5 billion.
An approximately 800 million dollars of adjusted. EA.
We will remain laser focused on our customer Centric mindset, rigorously aligning, our resources and Investments with the needs of our key customers.
Over the past year, we have created and begun to implement an 80/20 roadmap based on the proven 80/20 Performance System.
As we execute our strategy and 8020 road map, we'll be focused on delivering organic growth. And structural cost reductions in order to expand margins and drive, strong cash flow and returns.
We expect the post. Separation EMA, packaging, business to have a strong investment grade balance sheet and a dividend policy that is supported by strong operational profit.
And high return organic and inorganic Investments.
Our goal is to meet our customers needs with the best possible, packaging Solutions, and to create value for our shareholders, by delivering operating performance at the top of our peer group.
Our transformation will continue in 2026. And we believe that by the time, the separation is complete.
We will be making significant progress against our financial targets.
And toward more definitive Market leadership in sustainable packaging Solutions.
I'll now turn the call over to Lance, who will go over the details of the transaction.
Thanks Tim.
Moving to slide 14. Let me walk you through some of the specifics of the separation.
First, we expect the transaction to be structured as a spin-off of the Amia, packaging business, to shareholders,
With International Paper retaining a meaningful ownership, stake in the new company.
Second, whether the transaction will be tax-free to us, shareholders will depend on the ultimate terms of the transaction, the percentage of ownership retained and other factors.
Third. We expect the separation to be completed within the next 12, to 15 months.
Subject to satisfaction of certain customary conditions and Regulatory approvals.
With plans, for the company to be listed on, both the London and New York stock exchanges.
Andy, Tom hammock, and I will continue in our respective roles at International Paper.
Following the separation. Tim will serve as the CEO of the publicly traded emia packaging business.
As many of you know, Tim previously served as CFO of international paper, and has been leading the Amia packaging business during the past year.
Overseeing amias 8020, implementation and strategic transformation. The International Paper board has confidence that he is the right person to continue leading the Mia's transformation.
Also, David Robbie is expected to be appointed as chairman of the board.
David has a wealth of experience having served on the former DF Smith board as senior independent director until joining the International Paper board in 2025
in order to position the Amia packaging business. For Success. Following the separation, we plan to invest approximately 400 million dollars in Amia throughout the course of 2026, to fund the ongoing transformation of the business and 80/20 implementation
As mentioned earlier, we intend to create strong investment grade balance sheets for both businesses and we'll continue to provide updates and additional information on our progress as a details of the separation, materialize.
I'll now turn the call over to Andy to discuss our full year results and fourth quarter performance. Andy shifting now to a full year and quarterly earnings update on page 15
In North America, we made significant progress on implementing our 8020 plan. And executing our strategy, this year achieving approximately 37% year-over-year adjusted Eva dog growth in 2025.
And we expect our volume growth to outpace the underlying Market by 3 to 4, percentage points in the fourth quarter, which is well, ahead of where we thought we'd be earlier last year.
Throughout the year, we continue to advance our cost Improvement strategy, delivering approximately 510 million of run rate cost benefits.
The ongoing transformation, resulted in approximately 110 million dollars related to put product optimization in 2025, and we expect to have similar amounts in 2026. We'll share more detail in these Dynamics for North America in a moment.
Andy Silvernail: Performance. Andy. Shifting now to a full-year and quarterly earnings update on page 15. In North America, we made significant progress on implementing our 80/20 plan and executing our strategy this year, achieving approximately 37% year-over-year adjusted EBITDA growth in 2025. We expect our volume growth to outpace the underlying market by 3 to 4 percentage points in Q4, which is well ahead of where we thought we'd be earlier last year. Throughout the year, we continued to advance our cost improvement strategy, delivering approximately $510 million of run rate cost benefits. The ongoing transformation resulted in approximately $110 million related to footprint optimization in 2025, and we expect to have similar amounts in 2026. We'll share more detail on these dynamics for North America in a moment. In EMEA, we're moving decisively on our transformation of the packaging business.
Lance Loeffler: Performance. Andy.
In Amia, we're moving decisively on a transformation of the packaging business.
Andy Silvernail: Shifting now to a full-year and quarterly earnings update on page 15. In North America, we made significant progress on implementing our 80/20 plan and executing our strategy this year, achieving approximately 37% year-over-year adjusted EBITDA growth in 2025. We expect our volume growth to outpace the underlying market by 3 to 4 percentage points in Q4, which is well ahead of where we thought we'd be earlier last year. Throughout the year, we continued to advance our cost improvement strategy, delivering approximately $510 million of run rate cost benefits. The ongoing transformation resulted in approximately $110 million related to footprint optimization in 2025, and we expect to have similar amounts in 2026. We'll share more detail on these dynamics for North America in a moment. In EMEA, we're moving decisively on our transformation of the packaging business.
We have actions 20 site closures impacting approximately 1400. Rolls with another 7 sites and 700 rolls in work Council discussions.
We have a clear road map for applying our commercial and structural cost levers and expect to see the benefits of our cost and Commercial actions accelerate through 2026.
Turning to our Enterprises for full year 2025, which reflect the steadfast commitment of the entire IP team to execute our transformation plan continue to deliver best-in-class, customer experience, and create value for shareholders.
Throughout the year, we continue to advance our cost Improvement strategy, delivering approximately 510 million of run rate cost benefits.
we continue to drive strong growth from integration and 80/20, in the year of significant transformation,
The ongoing transformation, resulted in approximately 110 million dollars related to footprint, optimization in 2025 and we expect to have similar amounts in 2026. We'll share more detail in these Dynamics for North America in a moment.
Andy Silvernail: We have actioned 20 site closures impacting approximately 1,400 roles, with another 7 sites and 700 roles in work council discussions. We have a clear roadmap for applying our commercial and structural cost levers and expect to see the benefits of our cost and commercial actions accelerate through 2026. Turning to our enterprise results for full-year 2025, which reflect the steadfast commitment of the entire IP team to execute our transformation plan, continue to deliver best-in-class customer experience, and create value for shareholders. We continue to drive strong growth from integration and 80/20 in a year of significant transformation. We expanded Adjusted EBITDA margin by 230 basis points. Our Adjusted EBIT and EPS were impacted by $958 million of accelerated depreciation by our footprint optimization and higher levels of depreciation and amortization related to the DS Smith acquisition.
We have actioned 20 site closures impacting approximately 1,400 roles, with another 7 sites and 700 roles in work council discussions. We have a clear roadmap for applying our commercial and structural cost levers and expect to see the benefits of our cost and commercial actions accelerate through 2026. Turning to our enterprise results for full-year 2025, which reflect the steadfast commitment of the entire IP team to execute our transformation plan, continue to deliver best-in-class customer experience, and create value for shareholders. We continue to drive strong growth from integration and 80/20 in a year of significant transformation. We expanded Adjusted EBITDA margin by 230 basis points. Our Adjusted EBIT and EPS were impacted by $958 million of accelerated depreciation by our footprint optimization and higher levels of depreciation and amortization related to the DS Smith acquisition.
We expanded adjusted ebit margin by 230 basis points. Our adjusted ebit, and EPS were impacted by 958 million of accelerated depreciation by our footprint, optimization and higher levels of depreciation and related to the DSM Smith acquisition.
In Amia, we're moving decisively on a transformation of the packaging business.
We have actioned 20 site closures impacting approximately 1,400 roles, with another 7 sites and 700 roles under works council discussions.
As anticipated, our investment in the transformation, resulted in negative, free cash flow of 159 million. As a reminder, I would note that the Enterprise earnings numbers have been restated to exclude GCF and we are pleased that we closed the transaction at the end of last week.
We have a clear roadmap for applying our commercial and structural cost levers, and expect to see the benefits of our cost and commercial actions accelerate through 2026.
Now, I'll turn it over to Lance to take you through the drivers of North America performance, including what drove the year-over-year improvements, and what to expect in 2026.
Thanks Andy.
I'm on slide 17. I'd like to begin by reiterating the progress and momentum. We built in North America.
Turning to our Enterprises for full year 2025, which reflect the steadfast commitment of the entire IP team to execute our transformation plan, continue to deliver best-in-class customer experience, and create value for shareholders.
We continue to drive strong growth from integration and 80/20 in a year of significant transformation.
Our teams delivered meaningful Improvement across the business and a challenging environment and the results reinforce our strategy is working.
Andy Silvernail: As anticipated, our investment in the transformation resulted in negative free cash flow of $159 million. As a reminder, I would note that the enterprise earnings numbers have been restated to exclude GCF, and we are pleased that we closed the transaction at the end of last week. Now, I'll turn it over to Lance to take you through the drivers of North America performance, including what drove the year-over-year improvements and what to expect in 2026.
As anticipated, our investment in the transformation resulted in negative free cash flow of $159 million. As a reminder, I would note that the enterprise earnings numbers have been restated to exclude GCF, and we are pleased that we closed the transaction at the end of last week. Now, I'll turn it over to Lance to take you through the drivers of North America performance, including what drove the year-over-year improvements and what to expect in 2026.
Notably we have gained commercial momentum through focused service, and reliability efforts, increasing on-time delivery percentage to the upper 90s, which is allowed us to win, the trust of both new and existing customers.
We expanded adjusted, EBA margin by 230 basis points. Our adjusted ebit and EPS were impacted by 958 million of accelerated depreciation by our footprint, optimization and higher levels of depreciation and amiz related to the DSM Smith acquisition.
Also our investments in our commercial team, adding new sales reps and upskilling. The existing team has supported customer Excellence across our national and local accounts.
As anticipated, our investment in the transformation resulted in negative free cash flow of $159 million. As a reminder, I would note that the Enterprise earnings numbers have been restated to exclude GCF, and we are pleased that we closed the transaction at the end of last week.
Evidence by above Market volume growth in the second half of 2025, as well as strong price realization.
Lance Loeffler: Thanks, Andy. I'm on slide 17. I'd like to begin by reiterating the progress and momentum we've built in North America. Our teams delivered meaningful improvement across the business in a challenging environment, and the results reinforce our strategy is working. Notably, we have gained commercial momentum through focused service and reliability efforts, increasing on-time delivery percentage to the upper 90s%, which has allowed us to win the trust of both new and existing customers. Also, our investments in our commercial team, adding new sales reps and upskilling the existing team, have supported customer excellence across our national and local accounts, evidenced by our above-market volume growth in the second half of 2025, as well as strong price realization. We continue to optimize our box footprint while rolling out our Lighthouse model to shift decision-making and strategy closer to our customers.
Lance Loeffler: Thanks, Andy. I'm on slide 17. I'd like to begin by reiterating the progress and momentum we've built in North America. Our teams delivered meaningful improvement across the business in a challenging environment, and the results reinforce our strategy is working. Notably, we have gained commercial momentum through focused service and reliability efforts, increasing on-time delivery percentage to the upper 90s%, which has allowed us to win the trust of both new and existing customers. Also, our investments in our commercial team, adding new sales reps and upskilling the existing team, have supported customer excellence across our national and local accounts, evidenced by our above-market volume growth in the second half of 2025, as well as strong price realization. We continue to optimize our box footprint while rolling out our Lighthouse model to shift decision-making and strategy closer to our customers.
Now, I'll turn it over to Lance to take you through the drivers of North America performance, including what drove the year-over-year improvements, and what to expect in 2026.
Thanks Andy.
We continue to optimize our box footprint while rolling out our Lighthouse model to shift decision making and strategy closer to our customers.
I'm on slide 17. I'd like to begin by reiterating the progress and momentum we built in North America.
We've now installed this in 85% of our box, plant system, our Mill, Investments are paying off, and we're beginning to see reliability improvements as we've expanded, our Lighthouse learnings to all our Mills this year,
Our teams delivered meaningful Improvement across the business and a challenging environment and the results reinforce our strategy is working.
Year-over-year, EBA Dawn Improvement and 340 basis point margin expansion, gives us confidence in our roadmap and our ability to achieve results in North America.
Notably we have gained commercial momentum through focused service, and reliability efforts, increasing on-time delivery percentage to the upper 90s, which is allowed us to win, the trust of both new and existing customers.
Moving to slide 18.
As a reminder, we are using adjusted ibida for our bridges is a better comparative metric during the company's transformation.
Also our investments in our commercial team, adding new sales reps and upskilling. The existing team has supported customer Excellence across our national and local accounts.
Now, let me walk you through the sequential variance for the fourth quarter.
Evidence by above Market volume growth in the second half of 2025, as well as strong price realization.
Volume was 87, million unfavorable largely in line with our expectations.
Lance Loeffler: We've now installed this in 85% of our box plant system. Our mill investments are paying off, and we're beginning to see reliability improvements as we've expanded our Lighthouse learnings to all our mills this year. The combination of our 37% year-over-year EBITDA improvement and 340 basis point margin expansion gives us confidence in our roadmap and our ability to achieve results in North America. Moving to slide 18. As a reminder, we are using Adjusted EBITDA for our bridges as a better comparative metric during the company's transformation. Now, let me walk you through the sequential variance for the fourth quarter.
We've now installed this in 85% of our box plant system. Our mill investments are paying off, and we're beginning to see reliability improvements as we've expanded our Lighthouse learnings to all our mills this year. The combination of our 37% year-over-year EBITDA improvement and 340 basis point margin expansion gives us confidence in our roadmap and our ability to achieve results in North America. Moving to slide 18. As a reminder, we are using Adjusted EBITDA for our bridges as a better comparative metric during the company's transformation. Now, let me walk you through the sequential variance for the fourth quarter.
due to an almost 60 million dollar impact, as a result of exiting, the non-strategic, export business,
We continue to optimize our box footprint while rolling out our Lighthouse model to shift decision making and strategy closer to our customers.
As well as the impact of 3 fewer, shipping days in the quarter.
Which was partially offset by continued momentum and onboarding our strategic customer wins.
we've now installed, this in 85% of our Vox plant system, our Mill, Investments are paying off, and we're beginning to see, reliability improvements as we've expanded, our Lighthouse learnings to all our Mills this year,
Operations and costs were $3 million favorable.
The combination of our 37% year-over-year EBITDA improvement and 340 basis point margin expansion gives us confidence in our roadmap and our ability to achieve results in North America.
The cost out benefit from the mill. Closures was offset by timing of spending across the business, including transitory costs as we optimize our Network in line with our new footprint, as well as higher seasonal labor costs.
Moving to slide 18.
As a reminder, we are using adjusted ibida for our bridges is a better comparative metric during the company's transformation.
Maintenance and outages were 41 million unfavorable as we continue to invest in the reliability and quality of our Mill system.
Lance Loeffler: Volume was $87 million unfavorable, largely in line with our expectations due to an almost $60 million impact as a result of exiting the non-strategic export business, as well as the impact of three fewer shipping days in the quarter, which was partially offset by continued momentum and onboarding our strategic customer wins. Operations and costs were $3 million favorable. The cost-out benefit from the mill closures was offset by timing of spending across the business, including transitory costs as we optimize our network in line with our new footprint, as well as higher seasonal labor costs. Maintenance and outages were $41 million unfavorable as we continue to invest in the reliability and quality of our mill system.
Volume was $87 million unfavorable, largely in line with our expectations due to an almost $60 million impact as a result of exiting the non-strategic export business, as well as the impact of three fewer shipping days in the quarter, which was partially offset by continued momentum and onboarding our strategic customer wins. Operations and costs were $3 million favorable. The cost-out benefit from the mill closures was offset by timing of spending across the business, including transitory costs as we optimize our network in line with our new footprint, as well as higher seasonal labor costs. Maintenance and outages were $41 million unfavorable as we continue to invest in the reliability and quality of our mill system.
Now, let me walk you through the sequential variance for the fourth quarter.
Volume was 87, million unfavorable largely in line with our expectations.
And input costs were 24 million favorable for the quarter primarily due to minimizing the impact from the natural gas curtailment at our Valiant Mill. Early in the quarter which has now been resolved.
due to an almost $60 million impact, as a result of exiting the non-strategic export business,
All of this leads to an adjusted, Eva to offer, North America, 560 million for the fourth quarter of 2025.
As well as the impact of three fewer shipping dates in the quarter.
Which was partially offset by continued momentum and onboarding our strategic customer wins.
Operations and costs were $3 million favorable.
Turning to slide 19 and looking ahead to 2026. Our Eva dog growth will be primarily driven by approximately a hundred million dollars of commercial benefits as well as 500 million dollars of cost benefits.
The cost-out benefit from the mill closures was offset by timing of spending across the business, including transitory costs as we optimize our network in line with our new footprint, as well as higher seasonal labor costs.
Key drivers to this include strategic customer wins in the commercial front as well as cost out benefits across footprint optimization, productivity supply chain, sourcing and overhead.
Lance Loeffler: Input costs were $24 million favorable for the quarter, primarily due to minimizing the impact from the natural gas curtailment at our Valliant mill early in the quarter, which has now been resolved. All of this leads to an Adjusted EBITDA for North America of $560 million for the fourth quarter of 2025. Turning to slide 19 and looking ahead to 2026, our EBITDA growth will be primarily driven by approximately $100 million of commercial benefits, as well as $500 million of cost benefits. Key drivers to this include strategic customer wins in the commercial front, as well as cost-out benefits across footprint optimization, productivity, supply chain, sourcing, and overhead. Those benefits will be offset by approximately $200 million of non-recurring transformation costs related to our ongoing investments in reliability and capacity, primarily driven by the Riverdale mill conversion in the first half of 2026.
Input costs were $24 million favorable for the quarter, primarily due to minimizing the impact from the natural gas curtailment at our Valliant mill early in the quarter, which has now been resolved. All of this leads to an Adjusted EBITDA for North America of $560 million for the fourth quarter of 2025. Turning to slide 19 and looking ahead to 2026, our EBITDA growth will be primarily driven by approximately $100 million of commercial benefits, as well as $500 million of cost benefits. Key drivers to this include strategic customer wins in the commercial front, as well as cost-out benefits across footprint optimization, productivity, supply chain, sourcing, and overhead. Those benefits will be offset by approximately $200 million of non-recurring transformation costs related to our ongoing investments in reliability and capacity, primarily driven by the Riverdale mill conversion in the first half of 2026.
Maintenance and outages were 41 million unfavorable as we continue to invest in the reliability and quality of our Mill system.
Those benefits will be offset by approximately 200 million dollars of non-recurring transformation costs related to our ongoing investments in reliability and capacity.
Primarily driven by the Riverdale mil conversion in the first half of 2026.
Able for the quarter primarily due to minimizing the impact from the national gas curtailment at our Valiant Mill. Early in the quarter, which has now been resolved.
These Investments are critical to support our profitable growth Ambitions and bolster our lightweight capabilities to meet customer demand.
All of this leads to an adjusted EBIT, to offer, North America, $560 million for the fourth quarter of 2025.
This year we also expect inflation to rise by approximately 200 million dollars while we continue to optimize our sourcing and procurement to minimize the impacts.
Turning to slide 19 and looking ahead to 2026. Our EBA dog growth will be primarily driven by a hundred million dollars of commercial benefits as well as 500 million dollars of cost benefits.
The takeaway here is that we remain confident in our trajectory to deliver on our 2026 targets of 2.5 to 2.6 billion dollars with the assumption, that the industry growth is flat to up 1% and we outperform the industry by approximately 2%.
Key drivers to this include strategic customer wins in the commercial front as well as cost out benefits across footprint optimization, productivity supply chain, sourcing and overhead.
Our 2026 Target does not include the impact of any future pricing realization as we do not forecast price until it publishes.
Those benefits will be offset by approximately $200 million of non-recurring transformation costs related to our ongoing investments in reliability and capacity.
Lance Loeffler: These investments are critical to support our profitable growth ambitions and bolster our lightweight capabilities to meet customer demand. This year, we also expect inflation to rise by approximately $200 million while we continue to optimize our sourcing and procurement to minimize the impacts. The takeaway here is that we remain confident in our trajectory to deliver on our 2026 targets of $2.5 to 2.6 billion, with the assumption that the industry growth is flat to up 1%, and we outperform the industry by approximately 2%. Our 2026 target does not include the impact of any future pricing realization, as we do not forecast price until it publishes. However, we would expect to see an incremental Adjusted EBITDA impact of approximately $90 million for every $10 per ton price move on an annualized basis.
These investments are critical to support our profitable growth ambitions and bolster our lightweight capabilities to meet customer demand. This year, we also expect inflation to rise by approximately $200 million while we continue to optimize our sourcing and procurement to minimize the impacts. The takeaway here is that we remain confident in our trajectory to deliver on our 2026 targets of $2.5 to 2.6 billion, with the assumption that the industry growth is flat to up 1%, and we outperform the industry by approximately 2%. Our 2026 target does not include the impact of any future pricing realization, as we do not forecast price until it publishes. However, we would expect to see an incremental Adjusted EBITDA impact of approximately $90 million for every $10 per ton price move on an annualized basis.
Primarily driven by the Riverdale mill conversion in the first half of 2026.
However, we would expect to see an incremental adjusted evaa impact of approximately 90 million dollars for every $10 per ton price move on an annualized basis.
Now, moving to slide 20.
These investments are critical to support our profitable growth ambitions and bolster our lightweight capabilities to meet customer demand.
We wanted to provide additional visibility into how we anticipate this year playing out with our planned transformation Investments.
This year we also expect inflation to rise by approximately 200 million while we continue to optimize our sourcing and procurement to minimize the impacts.
there are a few factors driving, the shape of 2026 that we wanted to be very clear about
In the first half of the year, we expect to see typical seasonality and 1 fewer shipping day.
However, the main driver of our anticipated year-over-year decline comes from our planned Investments and reliability, capacity and capabilities.
The takeaway here is that we remain confident in our trajectory to deliver on our 2026 targets of 2.5 to 2.6 billion dollars with the assumption, that the industry growth is flat to up 1% and we outperform the industry by approximately 2%.
This manifests itself in higher maintenance outages, and costs related to our Riverdale mil conversion.
Our 2026 Target does not include the impact of any future pricing realization as we do not forecast price until it publishes.
Altogether. These represent a proximately 165 million of non-recurring timing impacts that will unwind in the second half.
Lance Loeffler: Now, moving to slide 20, we wanted to provide additional visibility into how we anticipate this year playing out with our planned transformation investments. There are a few factors driving the shape of 2026 that we wanted to be very clear about. In the first half of the year, we expect to see typical seasonality and one fewer shipping day. However, the main driver of our anticipated year-over-year decline comes from our planned investments in reliability, capacity, and capabilities. This manifests itself in higher maintenance outages and costs related to our Riverdale mill conversion. Altogether, these represent approximately $165 million of non-recurring timing impacts that will unwind in the second half. Normalized for these one-time impacts, we remain on a strong growth trajectory with approximately 10% first-half year-over-year EBITDA growth.
Now, moving to slide 20, we wanted to provide additional visibility into how we anticipate this year playing out with our planned transformation investments. There are a few factors driving the shape of 2026 that we wanted to be very clear about. In the first half of the year, we expect to see typical seasonality and one fewer shipping day. However, the main driver of our anticipated year-over-year decline comes from our planned investments in reliability, capacity, and capabilities. This manifests itself in higher maintenance outages and costs related to our Riverdale mill conversion. Altogether, these represent approximately $165 million of non-recurring timing impacts that will unwind in the second half. Normalized for these one-time impacts, we remain on a strong growth trajectory with approximately 10% first-half year-over-year EBITDA growth.
However, we would expect to see an incremental adjusted evaa impact of approximately 90 million dollars for every $10 per ton price move on an annualized basis.
Normalized for these 1-time impacts. We remain on a strong growth trajectory with approximately 10% first half year-over-year Evita growth.
Now, moving to slide 20.
We wanted to provide additional visibility into how we anticipate this year playing out with our planned transformation Investments.
In the second half. We expect our performance, to materially accelerate driven largely, by non- repeating items from the first half and realizing the additional momentum from our 2025 transformation activities.
there are a few factors driving, the shape of 2026 that we wanted to be very clear about
To add some more color on the sequential jump.
In the first half of the year, we expect to see typical seasonality and 1 fewer shipping day.
Approximately 200 million dollars will come from returning to a normalized outage schedule.
Approximately 80 million dollars associated with Riverdale, non-repetition and margin benefits.
However, the main driver of our anticipated year-over-year decline comes from our planned Investments and reliability, capacity and capabilities.
75 million benefit from second half, volume seasonality.
This manifests itself in higher maintenance outages, and costs related to our Riverdale mil conversion.
The remaining $200 million. In our plan will be achieved through commercial, and operational productivity actions as a part of our 8020 transformation.
Altogether. These represent approximately 165 million of non-recurring timing impacts that will unwind in the second half.
Lance Loeffler: In the second half, we expect our performance to materially accelerate, driven largely by non-repeating items from the first half and realizing the additional momentum from our 2025 transformation activities. To add some more color on the sequential jump, approximately $200 million will come from returning to a normalized outage schedule, approximately $80 million associated with Riverdale non-repeating items and margin benefits, and a $75 million benefit from second-half volume seasonality. The remaining $200 million in our plan will be achieved through commercial and operational productivity actions as a part of our 80/20 transformation. The main drivers here are from continued footprint optimization, mill and box productivity improvements from rolling out the Lighthouse model, as well as supply chain efficiencies, procurement initiatives, and the winding down of ongoing mill costs. Our team remains laser-focused on executing against this plan, and we have high confidence in our ability to deliver.
In the second half, we expect our performance to materially accelerate, driven largely by non-repeating items from the first half and realizing the additional momentum from our 2025 transformation activities. To add some more color on the sequential jump, approximately $200 million will come from returning to a normalized outage schedule, approximately $80 million associated with Riverdale non-repeating items and margin benefits, and a $75 million benefit from second-half volume seasonality. The remaining $200 million in our plan will be achieved through commercial and operational productivity actions as a part of our 80/20 transformation. The main drivers here are from continued footprint optimization, mill and box productivity improvements from rolling out the Lighthouse model, as well as supply chain efficiencies, procurement initiatives, and the winding down of ongoing mill costs. Our team remains laser-focused on executing against this plan, and we have high confidence in our ability to deliver.
Normalize for these 1-time impacts, we remain on a strong growth trajectory with a proximately 10%, first half year-over-year Evita growth.
The main drivers here are from continued footprint optimization mil and box productivity improvements from rolling out the lighthouse model as well as supply chain efficiencies procurement initiatives and the winding down of ongoing Mill costs.
Our team remains laser focused on the executing against this plan and we have high confidence in our ability to deliver.
In the second half. We expect our performance, to materially accelerate driven largely, by non- repeating items from the first half and realizing the additional momentum from our 2025 transformation activities.
To add some more color on the sequential jump.
Moving to the first quarter, packaging Solutions, North America outlook on slide 21.
Approximately $200 million will come from returning to a normalized outage schedule.
Price and mix are expected to improve by 51 million, primarily due to seasonal mix Improvement, following a heavy e-commerce, fourth quarter.
Approximately 80 million dollars associated with Riverdale, non- repeating items and margin benefits.
As well as favorable mix related to our smaller but more strategic, export customers.
And a 75 million benefit from second half volume seasonality.
We Believe volume to be unfavorable by 68 million.
The remaining $200 million. In our plan will be achieved through commercial, and operational productivity actions as a part of our 8020 transformation.
The sequential seasonal, decrease as well as the exit of non-strategic markets. More than offset, the increase volume from our strategic wins and 1 additional shipping day.
All in our first quarter 2026 outlook for North America is approximately 534 million of adjusted Ava.
The main drivers here from continued footprint optimization mil and box productivity improvements from rolling out the lighthouse model as well as supply chain efficiencies procurement initiatives and the winding down of ongoing Mill costs.
1 more note, before we move on.
Our team remains laser focused on the executing against this plan and we have high confidence in our ability to deliver.
Lance Loeffler: Moving to the Q1 Packaging Solutions North America outlook on slide 21. Price and mix are expected to improve by $51 million, primarily due to seasonal mix improvement following a heavy e-commerce fourth quarter, as well as favorable mix related to our smaller but more strategic export customers. We believe volume to be unfavorable by $68 million. The sequential seasonal decrease, as well as the exit of non-strategic markets, more than offset the increased volume from our strategic wins and one additional shipping day. All in, our Q1 2026 outlook for North America is approximately $534 million of Adjusted EBITDA. One more note before we move on. The Q1 outlook I just shared does not include any impact from the winter storm that moved across the United States Southeast this past week.
Moving to the Q1 Packaging Solutions North America outlook on slide 21. Price and mix are expected to improve by $51 million, primarily due to seasonal mix improvement following a heavy e-commerce fourth quarter, as well as favorable mix related to our smaller but more strategic export customers. We believe volume to be unfavorable by $68 million. The sequential seasonal decrease, as well as the exit of non-strategic markets, more than offset the increased volume from our strategic wins and one additional shipping day. All in, our Q1 2026 outlook for North America is approximately $534 million of Adjusted EBITDA. One more note before we move on. The Q1 outlook I just shared does not include any impact from the winter storm that moved across the United States Southeast this past week.
The first quarter Outlook. I just shared does not include any impact from the winter storm. That moved across the United States Southeast this past week.
Moving to the first quarter, packaging Solutions, North America outlook on slide 21.
We are currently assessing the impact, and at this point we're estimating that the total impact could be in the range of 20 to 25 million for the first quarter.
Price and mix are expected to improve by 51 million, primarily due to seasonal mix Improvement, following a heavy e-commerce, fourth quarter.
That wraps up our review of North America, performance and Outlook. And with that, let's move on to Amia.
As well as favorable mix related to our smaller but more strategic export customers.
We believe volume to be unfavorable by $68 million.
Turning to packaging Solutions of Mia on slide 22. We delivered a solid fourth quarter with sequential Eva dog. Growth of 19 million
The sequential seasonal, decrease as well as the exit of non-strategic markets. More than offset, the increase volume from our strategic wins and 1 additional shipping day.
The Improvement was primarily driven by favorable pricing on key inputs, including fiber and natural gas along with benefits for some of our early 80/20 cost actions.
Of adjusted Ava.
From a demand standpoint, the market remains soft, but broadly stable with continued pressure on board pricing.
1 more note, before we move on.
Lance Loeffler: We are currently assessing the impact, and at this point, we're estimating that the total impact could be in the range of $20 to $25 million for Q1. That wraps up our review of North America performance and outlook. With that, let's move on to EMEA. Turning to Packaging Solutions EMEA on slide 22, we delivered a solid Q4 with sequential EBITDA growth of $19 million. The improvement was primarily driven by favorable pricing on key inputs, including fiber and natural gas, along with benefits for some of our early 80/20 cost actions. From a demand standpoint, the market remained soft but broadly stable with continued pressure on board pricing. Overall, while we are still in the early stage of our transformation in EMEA, we are starting to see the benefits of our strategy materialize and are very confident of the path ahead.
We are currently assessing the impact, and at this point, we're estimating that the total impact could be in the range of $20 to $25 million for Q1. That wraps up our review of North America performance and outlook. With that, let's move on to EMEA. Turning to Packaging Solutions EMEA on slide 22, we delivered a solid Q4 with sequential EBITDA growth of $19 million. The improvement was primarily driven by favorable pricing on key inputs, including fiber and natural gas, along with benefits for some of our early 80/20 cost actions. From a demand standpoint, the market remained soft but broadly stable with continued pressure on board pricing. Overall, while we are still in the early stage of our transformation in EMEA, we are starting to see the benefits of our strategy materialize and are very confident of the path ahead.
The first quarter outlook I just shared does not include any impact from the winter storm that moved across the United States Southeast this past week.
Overall while we are still in the early stage of our transformation in Amia, we are starting to see the benefits of our strategy materialize and are very confident of the path ahead.
We are currently assessing the impact, and at this point, we're estimating that the total impact could be in the range of $20 to $25 million for the first quarter.
That wraps up our review of North America, performance and Outlook. And with that, let's move on to Ama.
Now on slide, 23 and looking at a full year 2026. Our adjusted Eva dog growth and EMA will be driven by millions of commercial benefits. Primarily driven by above industry growth with continued momentum of flow through already captured from 2025 growth with our strategic customers.
Turning to packaging Solutions of meow on slide 22, we delivered a solid fourth quarter with sequential Eva dog. Growth of 19 million
In addition, we expect approximately 200 million dollars of cost out benefits.
The Improvement was primarily driven by favorable pricing on key inputs, including fiber and natural gas along with benefits for some of our early 80/20 cost actions.
Primarily driven by footprint and headcount optimization, as well as cost improvements across procurement distribution, and our middle and box systems.
From a demand standpoint, the market remains soft, but broadly stable with continued pressure on board pricing.
We expect these benefits to be offset by approximately a hundred million dollars of inflation impact.
Lance Loeffler: Now on slide 23, and looking at a full-year 2026, our Adjusted EBITDA growth in EMEA will be driven by $200 million of commercial benefits, primarily driven by above-industry growth with continued momentum of flow-through already captured from 2025 growth with our strategic customers. In addition, we expect approximately $200 million of cost-out benefits, primarily driven by footprint and headcount optimization, as well as cost improvements across procurement, distribution, and our mill and box systems. We expect these benefits to be offset by approximately $100 million of inflation impact. Overall, we continue to build momentum on our transformation and will continue to act decisively to optimize our footprint and operations while strategically investing in reliability and quality to best serve our EMEA customer base.
Now on slide 23, and looking at a full-year 2026, our Adjusted EBITDA growth in EMEA will be driven by $200 million of commercial benefits, primarily driven by above-industry growth with continued momentum of flow-through already captured from 2025 growth with our strategic customers. In addition, we expect approximately $200 million of cost-out benefits, primarily driven by footprint and headcount optimization, as well as cost improvements across procurement, distribution, and our mill and box systems. We expect these benefits to be offset by approximately $100 million of inflation impact. Overall, we continue to build momentum on our transformation and will continue to act decisively to optimize our footprint and operations while strategically investing in reliability and quality to best serve our EMEA customer base.
Overall while we are still in the early stage of our transformation in Amia, we are starting to see the benefits of our strategy materialized and are very confident of the path ahead.
Overall we continue to build momentum on our transformation and will continue to act decisively to optimize our footprint and operations while strategically investing in reliability and quality to best serve our Mia customer base.
Moving aside 24. I want to take a moment to share an additional detail on recent actions. We've taken to improve our cost position and focus resources on the most attractive markets.
In 2025, we action closures across 20 sites.
Now on slide 23, and looking at a full year 2026. Our adjusted EVA dog growth in EMIA will be driven by $200 million of commercial benefits, primarily driven by above-industry growth with continued momentum of flow-through already captured from 2025 growth with our strategic customers.
Reducing headcount, by more than 1400 positions.
In addition, we expect approximately $200 million of cost-out benefits.
While we are engaged in ongoing consultation on an additional 7 sites and more than 700 rolls.
We expect this to deliver run rate cost Savings of more than 160 million.
Primarily driven by footprint and headcount optimization, as well as cost improvements across procurement, distribution, and our mill and box systems.
At the same time, it's important to recognize these actions affect people and their families.
We expect these benefits to be offset by approximately 100 million dollars of inflation impact.
We do not make these decisions lightly and I want to thank the employees of these facilities and offices for their professionalism dedication and contributions to the company.
Lance Loeffler: Moving to slide 24, I want to take a moment to share an additional detail on recent actions we've taken to improve our cost position and focus resources on the most attractive markets. In 2025, we actioned closures across 20 sites, reducing headcount by more than 1,400 positions, while we are engaged in ongoing consultation on our additional 7 sites and more than 700 roles. We expect this to deliver run rate cost savings of more than $160 million. At the same time, it's important to recognize these actions affect people and their families. We do not make these decisions lightly, and I want to thank the employees across these facilities and offices for their professionalism, dedication, and contributions to the company. Turning to slide 25 and our outlook for the first quarter, we expect EBITDA to be roughly in line with the fourth quarter.
Moving to slide 24, I want to take a moment to share an additional detail on recent actions we've taken to improve our cost position and focus resources on the most attractive markets. In 2025, we actioned closures across 20 sites, reducing headcount by more than 1,400 positions, while we are engaged in ongoing consultation on our additional 7 sites and more than 700 roles. We expect this to deliver run rate cost savings of more than $160 million. At the same time, it's important to recognize these actions affect people and their families. We do not make these decisions lightly, and I want to thank the employees across these facilities and offices for their professionalism, dedication, and contributions to the company. Turning to slide 25 and our outlook for the first quarter, we expect EBITDA to be roughly in line with the fourth quarter.
Overall we continue to build momentum on our transformation and will continue to act decisively to optimize our footprint and operations while strategically investing in reliability and quality to best serve our Mia customer base.
Turning to slide 25 and our outlook for the first quarter. We expect even Evita to be roughly in line with the fourth quarter.
Moving the slide 24. I want to take a moment to share an additional detail on recent actions. We've taken to improve our cost position and focus resources on the most attractive markets.
We anticipate price and volume Tailwind of approximately 33 million driven by favorable mix and continued benefits from our strategic wins in 2025.
In 2025, we action closures across 20 sites.
Reducing headcount by more than 1,400 positions.
While we are engaged in ongoing consultation on an additional 7 sites and more than 700 roles.
Half of the year as well as costs related to accounting policy changes.
We expect this to deliver run-rate cost savings of more than $160 million.
At the same time, it's important to recognize these actions affect people and their families.
We continue to build momentum with our strategic actions while managing through ongoing Market volatility and focusing on those things that we can control as we execute our plan.
Now, let me turn it back over to Andy, who will close it out with some key takeaways from today.
Andy.
We do not make these decisions lightly and I want to thank the employees of these facilities and offices for their professionalism dedication and contributions to the company.
Thank you, Lance turning to slide 26 and our full year 2026 targets.
Lance Loeffler: We anticipate price and volume tailwinds of approximately $33 million, driven by favorable mix and continued benefits from our strategic wins in 2025. Ops and costs are higher by $42 million, primarily driven by the timing of energy subsidies typically received in the second half of the year, as well as costs related to accounting policy changes. We continue to build momentum with our strategic actions while managing through ongoing market volatility and focusing on those things that we can control as we execute our plan. Now, let me turn it back over to Andy, who will close it out with some key takeaways from today. Andy? Thank you, Lance. Turning to slide 26 and our full-year 2026 targets. We are confident in our trajectory, our plan for the coming year, and our ability to execute against our targets for 2026.
We anticipate price and volume tailwinds of approximately $33 million, driven by favorable mix and continued benefits from our strategic wins in 2025. Ops and costs are higher by $42 million, primarily driven by the timing of energy subsidies typically received in the second half of the year, as well as costs related to accounting policy changes. We continue to build momentum with our strategic actions while managing through ongoing market volatility and focusing on those things that we can control as we execute our plan. Now, let me turn it back over to Andy, who will close it out with some key takeaways from today. Andy?
We are confident our trajectory, our plan for the coming year, and our ability to execute against our targets for 2026.
Turning to slide 25 and our outlook for the first quarter. We expect even Evita to be roughly in line with the fourth quarter.
We anticipate a price and volume tailwind of approximately $33 million, driven by favorable mix and continued benefits from our strategic wins in 2025.
We're projecting Enterprise. Net sales of 24.1 to 24.9 billion with adjusted Eva of 3.5 to 3.7 billion and free cash flow of 300 to 500 million.
Ops and costs are higher by 42 million primarily driven by the timing of energy subsidies typically received in the second half of the year, as well as costs related to accounting policy changes.
We continue to build momentum with our strategic actions while managing through ongoing Market volatility and focusing on those things that we can control as we execute our plan.
As for the first quarter, including corporate regarding to 740 to 760 million of adjusted ebit. Dot importantly, as Lance mentioned earlier, our guidance does not include the impact of price actions. The enhanced positioning and greater efficiency that we've realized through our strategic actions. In 8020 implementation have us well positioned for 2026 and we expect that we will begin to see that flow through in the coming year.
Andy Silvernail: Thank you, Lance. Turning to slide 26 and our full-year 2026 targets. We are confident in our trajectory, our plan for the coming year, and our ability to execute against our targets for 2026.
Now, let me turn it back over to Andy, who will close it out with some key takeaways from today.
Andy.
Thank you, Lance. Turning to slide 26 and our full-year 2026 targets.
Lance Loeffler: We're projecting enterprise net sales of $24.1 to $24.9 billion, with Adjusted EBITDA of $3.5 to $3.7 billion, and free cash flow of $300 to $500 million. As for Q1, including corporate, we're guiding to $740 to $760 million of Adjusted EBITDA. Importantly, as Lance mentioned earlier, our guidance does not include the impact of price actions. The enhanced positioning and greater efficiency that we've realized through our strategic actions and 80/20 implementation have us well-positioned for 2026, and we expect that we will begin to see that flow-through in the coming year. As we discussed today, we are taking swift and decisive action to create long-term value for our shareholders. The combination of IP and DS Smith created two regional powerhouses that are leading providers of sustainable packaging solutions with significant scale and strong customer relationships.
We're projecting enterprise net sales of $24.1 to $24.9 billion, with Adjusted EBITDA of $3.5 to $3.7 billion, and free cash flow of $300 to $500 million. As for Q1, including corporate, we're guiding to $740 to $760 million of Adjusted EBITDA. Importantly, as Lance mentioned earlier, our guidance does not include the impact of price actions. The enhanced positioning and greater efficiency that we've realized through our strategic actions and 80/20 implementation have us well-positioned for 2026, and we expect that we will begin to see that flow-through in the coming year. As we discussed today, we are taking swift and decisive action to create long-term value for our shareholders. The combination of IP and DS Smith created two regional powerhouses that are leading providers of sustainable packaging solutions with significant scale and strong customer relationships.
As we discussed today we are taking Swift and decisive action to create long-term value for our shareholders, the combination of Ip and DSM Smith. Created 2 Regional powerhouses that are leading providers of sustainable packaging Solutions with significant scale and strong customer relationships.
We are confident our trajectory, our plan for the coming year, and our ability to execute against our targets for 2026.
Our 8020 actions over the past year, have reduced complexity in each region and the next step to continue. The transformation is to segment the businesses so they can realize their full potential.
We're projecting Enterprise net sales of $24.1 to $24.9 billion, with adjusted EVA of $3.5 to $3.7 billion, and free cash flow of $300 to $500 million.
as for the first quarter, including corporate regarding to 740 to 760 million of adjusted ebit Dot
Separating the businesses will provide each of the ability to best align capital and resources to distinct Regional opportunities Market environments and customer needs.
Each business will have the necessary ingredients, including strong investment grade balance, sheets to execute at 8020 plan, and the virtual strategic cycle, and the most effective way possible.
Importantly, as Lance mentioned earlier, our guidance does not include the impact of price actions. The enhanced positioning and greater efficiency that we've realized through our strategic actions in 80/20 implementation have as well positioned us for 2026, and we expect that we will begin to see that flow through in the coming year.
We believe this is the most certain path to deliver our 2027 Target of 5 billion of ibida and enables each business to achieve best-in-class performance and best-in-class, valuation. As we create long-term value for our shareholders.
At this time, let's open up the line to questions.
Thank you.
To ask a question, simply.
Lance Loeffler: Our 80/20 actions over the past year have reduced complexity in each region, and the next step to continue the transformation is to segment the businesses so they can realize their full potential. Separating the businesses will provide each with the ability to best align capital and resources to distinct regional opportunities, market environments, and customer needs. Each business will have the necessary ingredients, including strong investment-grade balance sheets, to execute its 80/20 plan and the virtuous strategic cycle in the most effective way possible. We believe this is the most certain path to deliver our 2027 target of $5 billion of EBITDA and enables each business to achieve best-in-class performance and best-in-class valuation as we create long-term value for our shareholders. At this time, let's open up the line to questions. Thank you. If you would like to ask a question, simply press star one on your telephone keypad.
Our 80/20 actions over the past year have reduced complexity in each region, and the next step to continue the transformation is to segment the businesses so they can realize their full potential. Separating the businesses will provide each with the ability to best align capital and resources to distinct regional opportunities, market environments, and customer needs. Each business will have the necessary ingredients, including strong investment-grade balance sheets, to execute its 80/20 plan and the virtuous strategic cycle in the most effective way possible. We believe this is the most certain path to deliver our 2027 target of $5 billion of EBITDA and enables each business to achieve best-in-class performance and best-in-class valuation as we create long-term value for our shareholders. At this time, let's open up the line to questions.
Regional powerhouses that are leading providers of sustainable packaging and solutions, with significant scale and strong customer relationships.
Our 80/20 actions over the past year have reduced complexity in each region, and the next step to continue the transformation is to segment the businesses so they can realize their full potential.
Press star 1 on your telephone keypad to withdraw your question, press star 1 again, as a reminder to ask a question, press star 1 to withdraw your question, press star 1 again, we will now pause a moment to compile the Q&A roster and we do ask that you limit yourself to 1 question.
Separating the businesses will provide each of them the ability to best align capital and resources to distinct regional opportunities, market environments, and customer needs.
Our first question is going to come from the line of George Staples with Bank of America. Please go ahead.
Hi everyone. Good morning. Thanks for the details. Um, my question.
Each business will have the necessary ingredients, including strong investment-grade balance sheets, to execute the 8020 plan and the Virtuous Strategic Cycle in the most effective way possible.
In your free cash flow, guidance of 300 to 500 million dollars. Can you give us some of the other important assumptions that are in there? I don't believe prices in there, but if you could confirm that related,
We believe this is the most certain path to deliver our 2027 target of $5 billion of EBITDA and enables each business to achieve best-in-class performance and best-in-class valuation as we create long-term value for our shareholders.
Operator: Thank you. If you would like to ask a question, simply press star one on your telephone keypad. To withdraw your question, press star one again. As a reminder, to ask a question, press star one. To withdraw your question, press star one again. We will now pause a moment to compile the Q&A roster, and we do ask that you limit yourself to one question. Our first question is going to come from the line of George Staphos with Bank of America. Please go ahead.
Is, are you out with a price letter to customers?
At this time, let's open up the line to questions.
Thank you.
You would like to ask a question.
and then more most importantly, in terms of the question, if you want to just take this
Lance Loeffler: To withdraw your question, press star one again. As a reminder, to ask a question, press star one. To withdraw your question, press star one again. We will now pause a moment to compile the Q&A roster, and we do ask that you limit yourself to one question. Our first question is going to come from the line of George Staphos with Bank of America. Please go ahead. Everyone, good morning. Thanks for the details. My question: in your free cash flow guidance of $300 to $500 million, can you give us some of the other important assumptions that are in there? I don't believe price is in there, but if you could confirm that. Related, are you out with a price letter to customers? And then, most importantly, in terms of the question, if you want to just take this, $300 to $500 million doesn't cover your dividend.
300500 million dollars doesn't cover your dividend Andy with the spin. Might you consider reviewing the dividend policy over time? Thank you.
Thank you, are good morning. Um so first,
Press star 1 on your telephone keypad to withdraw your question, press star 1 again, as a reminder to ask a question, press star 1 to withdraw your question, press star 1 again, we will now pause a moment to compile the Q&A roster and we do ask that you limit yourself to 1 question.
George Staphos: Everyone, good morning. Thanks for the details. My question: in your free cash flow guidance of $300 to $500 million, can you give us some of the other important assumptions that are in there? I don't believe price is in there, but if you could confirm that. Related, are you out with a price letter to customers? And then, most importantly, in terms of the question, if you want to just take this, $300 to $500 million doesn't cover your dividend. Andy, with the spin, might you consider reviewing the dividend policy over time? Thank you.
Our first question is going to come from the line of George Staples with Bank of America. Please go ahead.
Hi everyone. Good morning. Thanks for the details. Um, my question.
Yes, we are out with a price letter, um, we have done that, uh, um, earlier this week. Um, and, uh, so that will play itself out in the normal course of business. As you noted know there there is no, uh, inclusion of price in the numbers that we have provided today into the guidance that we have provided to any incremental price to uh, to come through.
In your free cash flow, guidance of 300 to 500 million dollars. Can you give us some of the other important assumptions that are in there? I don't believe prices in there. But if you could confirm that related is, are you out with a price letter to customers?
And as as Lance said in there, each ten dollars of price at 6 is worth about $90 million um of price realization uh, into the market. So so that I think that covers that question there. Lance can cover any other topics you want to talk on about other elements of free cash flow. Um,
Lance Loeffler: Andy, with the spin, might you consider reviewing the dividend policy over time? Thank you. Thanks, George. And good morning. So first, yes, we are out with a price letter. We have done that earlier this week, and so that will play itself out in the normal course of business. As you noted, no, there is no inclusion of price in the numbers that we have provided today into the guidance that we have provided today, meaning incremental price to come through. And as Lance said in there, each $10 of price that sticks is worth about $90 million of price realization into the market. So I think that covers that question there. Lance can cover any other topics you want to talk on about other elements of free cash flow. What was the second part of the question, George? Just dividend.
Andy Silvernail: Thanks, George. And good morning. So first, yes, we are out with a price letter. We have done that earlier this week, and so that will play itself out in the normal course of business. As you noted, no, there is no inclusion of price in the numbers that we have provided today into the guidance that we have provided today, meaning incremental price to come through. And as Lance said in there, each $10 of price that sticks is worth about $90 million of price realization into the market. So I think that covers that question there. Lance can cover any other topics you want to talk on about other elements of free cash flow. What was the second part of the question, George?
And then more most importantly, in terms of the question, if you want to just take this 30500 million dollars doesn't cover your dividend Andy with the spin. Might you consider reviewing the dividend policy over time? Thank you.
In conjunction with with shareholders to, you know, make sure we get to the right place on a on a dividend post spin. Uh, and we'll evaluate that throughout the year in conversation with the shareholders.
Thank you so much.
You bet.
Thank you. Good morning. Um, so first, uh, yes, we are out with a price letter, um, we have done that, uh, um, earlier this week. Um, and, uh, so that will play itself out in the normal course of business. As you noted know there there is no, uh, inclusion of price in the numbers that we have provided today into the guidance that we have, provided to any incremental price to, uh, to come through and as, as Lance said in there, each ten dollars of price at 6 is worth about $90 million, um, uh a price realization, uh, into the market. So so that I think that covers that question there. Yep. Lance can cover. Any other topics you want to talk on about other elements of free cash flow. Um,
Lance Loeffler: Just dividend.
Lance Loeffler: Dividend $1 billion and the free cash flow $300 to 500 million. Might the spin be an opportunity to review the policy, and how do you feel about it? Thank you. Yeah, sure. So we've said all along that covering the dividend was about $3.6 to 3.7 billion of EBITDA is the break-even. Obviously, in 2026, we have substantial restructuring costs that are going in, and some one-time costs that don't fit into the restructuring line. So you've got a combination of those things. We are maintaining our dividend policy as it is through 2026. And of course, through any process like this, you're going to review that work in conjunction with shareholders to make sure we get to the right place on a dividend post-spin. And we'll evaluate that throughout the year in conversation with shareholders. Thank you so much. You bet.
George Staphos: Dividend $1 billion and the free cash flow $300 to 500 million. Might the spin be an opportunity to review the policy, and how do you feel about it? Thank you.
And our next question is going to come from the line of Mark, Winrow with Seaport research Partners. Please go ahead.
Andy Silvernail: Yeah, sure. So we've said all along that covering the dividend was about $3.6 to 3.7 billion of EBITDA is the break-even. Obviously, in 2026, we have substantial restructuring costs that are going in, and some one-time costs that don't fit into the restructuring line. So you've got a combination of those things. We are maintaining our dividend policy as it is through 2026. And of course, through any process like this, you're going to review that work in conjunction with shareholders to make sure we get to the right place on a dividend post-spin. And we'll evaluate that throughout the year in conversation with shareholders.
Thank you first couple, real straight good, good morning. A few really straightforward. Question 1 is, um,
So, um, some of the slides, it says, like at the segment level, it doesn't exclude that, it excluding corporate. And then on the final slide it, it doesn't sort of say anything about that. So just 1 clarification. How, how should we be thinking about corporate?
Relative to the the various numbers you're putting out there, the 3.5 3.7 billion. Is that included those
Yeah, so the the guy that Andy gave on a total company basis, 740 to 760 includes the impact of corporate.
George Staphos: Thank you so much.
Andy Silvernail: You bet.
Uh, uh, what was the second part of the question, George the dividend, a billion and the free cash flow. 300 500 might, the spin be an opportunity to review the policy and how do you feel about it? Thank you. Yeah, sure. So uh, you know, we've said all along that the the, the covering the dividend was about 3.6 to 3.7 billion. Dollars of IBA is, is the break even obviously in 2026? We have substantial restructuring costs. Uh, that are going in and some 1-time costs that don't fit into the restructuring line. So you've got a combination of of, of those things. Um, we are maintaining our dividend policy as it is through 2026. And of course, you know, through any process like this, you're going to review that uh working in conjunction with with shareholders to, you know, make sure we get to the right place on a on a dividend post spin. Uh, and we'll evaluate that throughout the year in conversation with the shareholders.
Thank you so much.
Lance Loeffler: And our next question is going to come from the line of Mark Weintraub with Seaport Research Partners. Please go ahead. Thank you. First couple of real straight good morning. A few really straightforward questions. One is, so on some of the slides, it says at the segment level, it doesn't exclude that it's excluding corporate. And then on the final slide, it doesn't sort of say anything about that. So just one clarification. How should we be thinking about corporate relative to the various numbers you're putting out there, the $3.5 to 3.7 billion? Is that included or not included? Yeah. So the guide that Andy gave, on a total company basis $740 to 760 million, includes the impact of corporate. So if you take what we gave you on the region slides, and the difference between that should cover the corporate line item. Yep.
Operator: And our next question is going to come from the line of Mark Weintraub with Seaport Research Partners. Please go ahead.
You bet.
So if you take what we gave you on the region slides and the difference between that should should cover the corporate line item. Yeah. Same thing for the for the year, mark.
Okay. And and, and it
Mark Weintraub: Thank you. First couple of real straight good morning. A few really straightforward questions. One is, so on some of the slides, it says at the segment level, it doesn't exclude that it's excluding corporate. And then on the final slide, it doesn't sort of say anything about that. So just one clarification. How should we be thinking about corporate relative to the various numbers you're putting out there, the $3.5 to 3.7 billion? Is that included or not included?
And our next question is going to come from the line of Mark, Winrow with Seaport research Partners. Please go ahead.
With the spin, is there any meaningful change to what you expect corporate costs would go to?
Thank you first couple of real straight. Good, good morning. A few really straightforward. Question 1 is um,
Well, they would they would go to their independent regions but in terms of being an overall increase know, they would they would not be
So, um, some of the slides, it says, like at the segment level, it doesn't exclude that, it excluding corporate. And then on the final slide, it, it doesn't sort of say anything about that. So just 1 clarification, H. How should we be thinking about corporate?
Lance Loeffler: Yeah. So the guide that Andy gave, on a total company basis $740 to 760 million, includes the impact of corporate. So if you take what we gave you on the region slides, and the difference between that should cover the corporate line item.
Relative to the various numbers you're putting out there—the $3.5, $3.7 billion—is that included?
Yeah, so the number that Andy gave, on a total company basis, $740 to $760, includes the impact of corporate.
Andy Silvernail: Yep. Same thing for the year, Mark.
Lance Loeffler: Same thing for the year, Mark. Okay. And with the spin, is there any meaningful change to what you expect corporate costs would go to? Well, they would go to their independent regions, but in terms of being an overall increase, no. They would not be. Okay. Very good. And then second, any particular reason why, and maybe this is normal course, but why 12 to 15 months to complete this process? It seems like a long time to me, but maybe I'm just wrong. Yeah. I'll touch on that. You get the mechanics, frankly, of accounting, right? It's a heavy lift from an accounting perspective. What we don't have here is kind of large legal entity issues or things like that. And obviously, we're going to move to do it as quickly as possible, Mark.
Mark Weintraub: Okay. And with the spin, is there any meaningful change to what you expect corporate costs would go to?
So, if you take what we gave you on the region slides, and the difference between that should cover the corporate line item. Yeah. Same thing for the year, Mark.
Okay. And and, and it
Andy Silvernail: Well, they would go to their independent regions, but in terms of being an overall increase, no. They would not be.
With the spin, is there any meaningful change to what you expect corporate costs would go to?
Mark Weintraub: Okay. Very good. And then second, any particular reason why, and maybe this is normal course, but why 12 to 15 months to complete this process? It seems like a long time to me, but maybe I'm just wrong.
We go to their independent regions, but in terms of being an overall increase, no, they would not be.
Okay, very good. And then second any quick reason, why? And, and maybe this is normal course, um, normal course. But why 12 to 15 months to, to complete this process? It seems like a long time to me, but maybe I'm, I'm just wrong. Yeah, I I I'll touch on that, you know, there's, you got the mechanics frankly of accounting, right? There's just, it's a, it's a heavy lift from an accounting perspective. Uh, what we don't have here is, is kind of, um, you know, large legal entity issues or things like that. Um, and obviously, we're going to move to do it as quickly as possible Mark. Um, but, uh, the, the best guidance that we've been given and, and the precedent. So usually somewhere in that 12, to 15 month, time frame, Lance, anything you'd add to that. Yeah, no. I I would say, I would Echo Andy's comments. I think, you know, this is this is a little different than if if you look back at the SLO exercise, we went through several years ago that had a lot more operational tethering that we had to, to unwind, uh, to get that to where it needed to be. This is, this is largely an accounting.
exercise that we're going to start off, uh, you know,
Andy Silvernail: Yeah. I'll touch on that. You get the mechanics, frankly, of accounting, right? It's a heavy lift from an accounting perspective. What we don't have here is kind of large legal entity issues or things like that. And obviously, we're going to move to do it as quickly as possible, Mark. But the best guidance that we've been given and the precedent is usually somewhere in that 12- to 15-month timeframe. Lance, anything you'd add to that?
Okay. Very good. And then second any second reason, why. And and maybe this is normal course, um, normal course. But why 12 to 15 months to to complete this process? It seems like a long time to me but maybe I'm I'm just wrong. Yeah, I, I
Today, uh, in in, in real haste to to try to get this thing done uh by the end of the year, but right now, we're contemplating 12 to 15 months.
Lance Loeffler: But the best guidance that we've been given and the precedent is usually somewhere in that 12- to 15-month timeframe. Lance, anything you'd add to that? Yeah. No, I would say I would echo Andy's comments. I think this is a little different than if you look back at the Sylvamo exercise we went through several years ago that had a lot more operational tethering that we had to unwind to get that to where it needed to be. This is largely an accounting exercise that we're going to start off today in real haste to try to get this thing done by the end of the year. But right now, we're contemplating 12 to 15 months.
Lance Loeffler: Yeah. No, I would say I would echo Andy's comments. I think this is a little different than if you look back at the Sylvamo exercise we went through several years ago that had a lot more operational tethering that we had to unwind to get that to where it needed to be. This is largely an accounting exercise that we're going to start off today in real haste to try to get this thing done by the end of the year. But right now, we're contemplating 12 to 15 months.
And and 1 last 1 and hopefully not an unfair 1. But, um, so you you've got this big step up in the second half, um, of next year, particularly in, in North America. And, and you, you lay it out, very clearly. Uh, it does include that, you know, a, a big cost takeout, uh, acceleration at 200 million. And if, if we look back, you had a great first quarter relative to to expectations Etc. And then, the last 3 quarters though, you you fall in shy, um, on opiates and costs. And so, maybe talk a little bit about why you have a lot of confidence that, you know, you get back on track and, and you can deliver a really big number second, half of, uh, 2026.
Touch on that, you know, there's, you got the mechanics frankly of accounting, right? There's just, it's a, it's a heavy lift from an accounting perspective. Uh, what we don't have here is, is kind of, um, you know, large legal entity issues or things like that. Um, and obviously, we're going to move to do it as quickly as possible Mark, um, but, uh, the best guidance that we've been given and, and the precedents it usually somewhere in that 12, to 15 month, time frame, Lance, anything you'd add to that. Yeah, no. I I would say, I would Echo Andy's comments. I think, you know, this is this is a little different than if if you look back at the SLO exercise, we went through several years ago that had a lot more operational tethering that we had to, to unwind, uh, to get that to where it needed to be. This is, this is largely an accounting exercise that we're going to start off, uh, you know,
Lance Loeffler: And one last one, and hopefully not an unfair one, but so you've got this big step up in the second half of next year, particularly in North America, and you lay it out very clearly. It does include a big cost takeout acceleration at $200 million. And if we look back, you had a great first quarter relative to expectations, etc. And then the last three quarters, though, you fall in shy on ops and costs. And so maybe talk a little bit about why you have a lot of confidence that you get back on track and you can deliver a really big number second half of 2026. Yeah. A few things in there, Mark. So first and foremost, the vast majority of what we're talking about are things that have been actioned, and the tail here are the cost of finalizing that.
Mark Weintraub: And one last one, and hopefully not an unfair one, but so you've got this big step up in the second half of next year, particularly in North America, and you lay it out very clearly. It does include a big cost takeout acceleration at $200 million. And if we look back, you had a great first quarter relative to expectations, etc. And then the last three quarters, though, you fall in shy on ops and costs. And so maybe talk a little bit about why you have a lot of confidence that you get back on track and you can deliver a really big number second half of 2026.
Today, uh, in in, in real haste to to try to get this thing done uh by the end of the year, but right now, we're contemplating 12 to 15 months.
Yeah, a few things in there mark. So so first and foremost that that the vast majority of what we're talking about, are things that have been actioned and the tail here are are the cost of of finalizing that. So as an example closures and the the the lingering cost of finalizing those closures, those Tales start to fall off as we get through this year. Um that's a big 1 second. Um we've got more actions. They're they're not the large scale, actions that we've seen so far but we're starting to get much more into the nitty-gritty around. Things like supply chain and procurement. Um, distribution, um, rolling out the lighthouse models, um, through
Route. The, the mill system.
Andy Silvernail: Yeah. A few things in there, Mark. So first and foremost, the vast majority of what we're talking about are things that have been actioned, and the tail here are the cost of finalizing that. So as an example, closures and the lingering cost of finalizing those closures, those tails start to fall off as we get through this year. That's a big one. Second, we've got more actions. They're not the large-scale actions that we've seen so far, but we're starting to get much more into the nitty-gritty around things like supply chain and procurement, distribution, rolling out the Lighthouse models throughout the mill system, and the productivity investments that we're ramping up going into that. And so there's a lot of intensity that happened last year and certainly throughout this year that's going to continue to drive those.
And, and 1 last 1 and hopefully not an unfair 1. But, um, so you you've got this big step up in the second half, um, of next year, particularly in, in North America. And, and you, you lay it out, very clearly. Uh, it does include that, you know, a, a big cost takeout, uh, acceleration at 200 million. And if, if we look back, you had a great first quarter well to to expectations Etc. And then, the last 3 quarters though, you you fall in shy, um, on option costs and so maybe talk a little bit about why you have a lot of confidence that, you know, you get back on track and, and you can deliver a really big number second, half of, uh, 2026.
Lance Loeffler: So as an example, closures and the lingering cost of finalizing those closures, those tails start to fall off as we get through this year. That's a big one. Second, we've got more actions. They're not the large-scale actions that we've seen so far, but we're starting to get much more into the nitty-gritty around things like supply chain and procurement, distribution, rolling out the Lighthouse models throughout the mill system, and the productivity investments that we're ramping up going into that. And so there's a lot of intensity that happened last year and certainly throughout this year that's going to continue to drive those. So those benefits start to accumulate more and more as time goes on through there.
Um and the productivity Investments that were ramping up uh going into that. And so there's a lot of intensity that happened last year and certainly throughout this year, um, that's going to continue to drive those. So those benefits start to accumulate more and more as time goes on, um, you know, through there. So, um, you know, the key to it is, it's it's literally the, the costs have got to be counted, you know, down to the penny in terms of of facilities, uh, impact the people which is always unfortunate. Um, but uh, but a tough reality and a transformation
Yeah, a few things in there mark. So so first and foremost that the the vast majority of what we're talking about, are things that have been actioned and the tail here are are the cost of of finalizing that. So as an example closures and the the the lingering cost of finalizing those closures th those Tails start to fall off as we get through this year. Um that's a big 1.
Second um we've got more actions. They're they're not the large scale actions that we've seen so far but we're starting to get much more into the nitty-gritty around. Things like supply chain and procurement. Um, distribution. Um, rolling out the lighthouse models, um, throughout the the mill system.
There's a, there's a lot of moving Parts. There's no doubt about it, but uh, but we are executing quite well.
Thanks so much.
Thank you, Mark.
So those benefits start to accumulate more and more as time goes on through there. So the key to it is it's literally the costs have got to be counted down to the penny in terms of facilities, impact to people, which is always unfortunate, but a tough reality and a transformation. And that's the level of granularity we're operating at. And that's both in North America. And then you saw for the first time today that we were able to, now that we've gotten past a bunch of the consultation periods, to lay out the granularity in Europe. And you can see the magnitude of what we're doing in Europe that we will accelerate throughout the year. So this is extremely granular. Look, I'm also realistic. There's a lot of moving parts. There's no doubt about it, but we are executing quite well.
Lance Loeffler: So the key to it is it's literally the costs have got to be counted down to the penny in terms of facilities, impact to people, which is always unfortunate, but a tough reality and a transformation. And that's the level of granularity we're operating at. And that's both in North America. And then you saw for the first time today that we were able to, now that we've gotten past a bunch of the consultation periods, to lay out the granularity in Europe. And you can see the magnitude of what we're doing in Europe that we will accelerate throughout the year. So this is extremely granular. Look, I'm also realistic. There's a lot of moving parts. There's no doubt about it, but we are executing quite well. Thanks so much. Thank you, Mark. Your next question comes from the line of Charlie Muir-Sands with BNP Paribas.
Your next question comes from the line of Charlie mirror stands with BMP paraba please go ahead.
Hey, Charlie.
um, just
Um, and the productivity investments that we're ramping up, uh, going into that, and so there's a lot of intensity that happened last year and certainly throughout this year. Um, that's going to continue to drive those, so those benefits start to accumulate more and more as time goes on, um, you know, through there. So, um, you know, the key to it is it's—it's literally the costs have got to be counted, you know, down to the penny in terms of, of facilities, uh, impact, the people, which is always unfortunate. Um, but, but a tough reality and a transformation.
Half of the year in North America. Um seems like it will be around the industry yet.
And also um I think you do suggested to something similar in the area 1 that you could share around, like the local proformer volume performance is achieved in that region. Yeah.
Mark Weintraub: Thanks so much.
Um, and that's the level of granularity we're operating at, and that's both in North America. And then you saw for the first time today that we were able to, now that we've gotten past a bunch of the consultation periods, to lay out the granularity in Europe. And you can see the magnitude of what we're doing in Europe, um, that we will accelerate throughout the year. So, uh, um, so this is extremely granular. Um, you know, look, I'm also realistic. There's a lot of moving parts, there's no doubt about it, but uh, but we are executing quite well.
Andy Silvernail: Thank you, Mark.
Operator: Your next question comes from the line of Charlie Muir-Sands with BNP Paribas. Please go ahead.
Thanks much.
Thank you, Mark.
It's Charlie. I apologize. You're, you're, you were pretty muffled on that call. So, I'm going to do my best where I think I heard the question which is really around the the volume wins and the quality of profitability around, those volume wins if I understand it, right?
Lance Loeffler: Please go ahead. Yeah. Thanks very much, guys. Good morning. Hey, Charlie. Hey. Just firstly, if I could just ask on volumes, you alluded to your belief that you're getting share in the second half of the year in North America. It seems likely, albeit we haven't seen the industry data yet. Just talk about the relative profitability you're seeing on those new wins versus the old business you lost. And also, I think you sort of suggested there's something similar in the EMEA. I wonder if you could share any kind of like-for-like or sort of pro forma volume performance you've achieved in that region. Yeah. Charlie, I apologize.
Charlie Muir-Sands: Yeah. Thanks very much, guys. Good morning.
Your next question comes from the line of Charlie. Mere Sands with BMP paraba, please go ahead.
Andy Silvernail: Hey, Charlie.
Charlie Muir-Sands: Hey. Just firstly, if I could just ask on volumes, you alluded to your belief that you're getting share in the second half of the year in North America. It seems likely, albeit we haven't seen the industry data yet. Just talk about the relative profitability you're seeing on those new wins versus the old business you lost. And also, I think you sort of suggested there's something similar in the EMEA. I wonder if you could share any kind of like-for-like or sort of pro forma volume performance you've achieved in that region.
Yeah, thanks very much guys. Good morning.
Hey, Charlie.
Um yes, so um they're they're very good as you recall, you know, back a couple of years ago, we really started to to reset our discipline of around assuring that we were pricing to Market and and we've obviously kept that discipline.
Hey, um, just firstly. If I could just ask them on volume to your lead to your belief.
Andy Silvernail: Yeah. Charlie, I apologize. You were pretty muffled on that call, so I'm going to do my best where I think I heard the question, which is really around the volume wins and the quality of profitability around those volume wins, if I understood it right. Yes. So they're very good. As you recall, back a couple of years ago, we really started to reset our discipline around assuring that we were pricing to market, and we've obviously kept that discipline. If you look at the volume wins we've had in North America, they have been absolutely at those quality levels that we've been talking about. So I feel really good about the business that we're winning and coming on. Again, we won substantial market share here in North America in the back half of the year. We were 3 or 4 points above market.
Lance Loeffler: You were pretty muffled on that call, so I'm going to do my best where I think I heard the question, which is really around the volume wins and the quality of profitability around those volume wins, if I understood it right. Yes. So they're very good. As you recall, back a couple of years ago, we really started to reset our discipline around assuring that we were pricing to market, and we've obviously kept that discipline. If you look at the volume wins we've had in North America, they have been absolutely at those quality levels that we've been talking about. So I feel really good about the business that we're winning and coming on. Again, we won substantial market share here in North America in the back half of the year. We were 3 or 4 points above market.
Second half of the year in North America um seems like it will be around in the industry data yet. You just talk about the relative profitability of the old the business you lost and also um I think you do suggested or something similar in the mea 1 proforma volume performance is achieved in that region. Yeah Charlie I apologize. You're you're you were pretty muffled on that call. So I'm going to do my best where I think I heard the question which is really around the the volume wins and the quality of profitability around those volume wins if I understand it, right?
And if you look at the volume wins we've had in North America. Um, uh, they have been absolutely at those quality levels that we've been talking about. Um, and so I feel really good about the the business that we're winning and coming on, you know, again, you know, we won substantial market share here in North America, um, in the back half of the year, you know, we were, we were 3 or 4 Points above Market. We'll find out where the market actually settled, um, you know, later on here. But but we feel very confident given that the other results that we've seen, um, that we have won quality market share, and you can see the expanding margins at the same time. Uh, and Europe. Right? The, the the the the market has been softer in Europe, um, and just like in the US you have to play with the market is, um,
We've obviously kept that discipline.
Lance Loeffler: We'll find out where the market actually settled later on here, but we feel very confident given the other results that we've seen that we have won quality market share, and you can see the expanding margins at the same time. In Europe, right, the market has been softer in Europe. Just like in the US, you have to play where the market is. We have been really disciplined about making sure that we are bringing our value to the market and we're not chasing bad business. That's very important in a softer market, and we have not been doing that. Again, you can count it by meters, or you can count it by tons. We can see where those wins have come in and then how they'll be layered into the year. So we feel good about the wins that we have.
We'll find out where the market actually settled later on here, but we feel very confident given the other results that we've seen that we have won quality market share, and you can see the expanding margins at the same time. In Europe, right, the market has been softer in Europe. Just like in the US, you have to play where the market is. We have been really disciplined about making sure that we are bringing our value to the market and we're not chasing bad business. That's very important in a softer market, and we have not been doing that. Again, you can count it by meters, or you can count it by tons. We can see where those wins have come in and then how they'll be layered into the year. So we feel good about the wins that we have.
We have been really disciplined about making sure that we're, we are bringing our value to the market and we're not chasing Bad Business. Uh, that's very important in a software market and we have not been doing that. Um, and, uh, and, and again, you can count it by, uh, by by, by, by meters, or you can count it by tons. We can see where those wins have a have come in, and then how they'll be layered into into the year. So, we feel good about the wins that we have. We feel good about the commercial momentum in both regions. Uh, particularly in North America where we've won, um, substantial market share. Uh, and our work is to keep that momentum continuing
Your next question comes from the line of Phil ING with Jeffrey's please. Go ahead.
And if you look at the volume wins we've had in North America. Um, uh, they have been absolutely at those quality levels that we've been talking about. Um, and so I feel really good about the business that we're winning and coming on, you know, again, you know, we won substantial market share here in North America, um, in the back half of the year. You know, we were, we were 3 or 4 Points above Market. We'll find out where the market actually settled, um, you know, later on here. But, but we feel very confident in giving the, the other results that we've seen, um, that we have won quality market share, and you can see the expanding margins at the same time. Uh, and Europe. Right? The, the, the, the the market has been softer in Europe, um, and just like, in the US, you have to play with the market is, um, we have been really disciplined about making sure that we're, we are bringing our value to the market and we're not chasing Bad Business. Uh, that's very important in a software market and we have not been doing that. Um, and, uh, and, and again, you can count it by, uh, by by, by, by meters, or you can count it by
Lance Loeffler: We feel good about the commercial momentum in both regions, particularly in North America, where we've won substantial market share, and our work is to keep that momentum continuing. Your next question comes from the line of Phil Ng with Jefferies. Please go ahead. Hey, guys. Thanks for all the great call. Thanks for all the great call. A lot to unpack. I guess kind of kick things off, the 2026 guidance. Lance, last quarter, you guys gave us a nice slide deck calling out $600 million of self-help and commercial efforts. Certainly, it feels like there's some movement, but the guide itself, does it account for any incremental cost actions that has yet to be announced? Or is that kind of accounted for? Second, I think on the commercial front, certainly better in North America and Europe.
We feel good about the commercial momentum in both regions, particularly in North America, where we've won substantial market share, and our work is to keep that momentum continuing.
Operator: Your next question comes from the line of Phil Ng with Jefferies. Please go ahead.
By tons. We can see where those wins have have come in and then how they'll be layered into into the year. So, we feel good about the wins that we have. We feel good about the commercial momentum in both regions. Uh, particularly in North America where we've won, um, substantial market share. Uh, and our work is to keep that momentum continuing
Hey guys. Uh, thanks for all the great stuff. Thanks for all the great car lots unpack. Um, I guess kind of kick things off uh the 2026 guidance. Um, Lance last quarter, you guys gave us a nice slide deck, calling out, 600 million of South pulp and Commercial efforts. Uh, certainly, there's feels like there's some movement, but you know, the guy itself does it account for any incremental cost actions that has yet to be announced? So, or was that kind of accounted for, uh, second? I I think on the commercial front, certainly better in North America and Europe, and they correct me if I'm wrong. Lance, uh, the North American piece accounts for the exports, we kind of co-mingled it. So where are you seeing some? Some of the Winds on the commercial side, whether it's North America in Europe. I mean, Europe, I'm particularly curious. Just give I thought the commercial side of things were quite good, uh, but it was more on the cost out. So, help us kind of tease through, uh, some of those, uh, Dynamics.
Phil Ng: Hey, guys. Thanks for all the great call. Thanks for all the great call. A lot to unpack. I guess kind of kick things off, the 2026 guidance. Lance, last quarter, you guys gave us a nice slide deck calling out $600 million of self-help and commercial efforts. Certainly, it feels like there's some movement, but the guide itself, does it account for any incremental cost actions that has yet to be announced? Or is that kind of accounted for? Second, I think on the commercial front, certainly better in North America and Europe.
Your next question comes from the line of Phil Ing with Jeffries. Please go ahead.
Yeah, so I'll start with the, I'll start with the cost out side. Yeah, so what we described, I think, uh, infamously it was like slide 15 on the, on the deck on the third quarter, call where we talk about, uh, a lot of the, the momentum that we had in carrying over things that had already been announced in 2025 and what that impact would be. And I think that was the million dollars that you were characterizing. We are going to continue to optimize in North America around
Lance Loeffler: Correct me if I'm wrong, Lance, the North America piece accounts for the exports. You kind of commingled it. So where are you seeing some of the wins on the commercial side, whether it's North America in Europe? I mean, Europe, I'm particularly curious. I thought the commercial side of things were quite good, but it was more on the cost out. So help us kind of tease through some of those dynamics. Yeah. So I'll start with the cost out. Yeah. So what we described, I think infamously was slide 15 on the deck on the Q3 call, where we talk about a lot of the momentum that we had in carrying over things that had already been announced in 2025 and what that impact would be. I think that was the $500 million that you were characterizing.
Correct me if I'm wrong, Lance, the North America piece accounts for the exports. You kind of commingled it. So where are you seeing some of the wins on the commercial side, whether it's North America in Europe? I mean, Europe, I'm particularly curious. I thought the commercial side of things were quite good, but it was more on the cost out. So help us kind of tease through some of those dynamics.
Around our 8020 transformation. So it's a incremental $200 million of of costs benefit. That should be a to us as we continue to to execute that plan as we
To, to 20 into second half of 26, and ended 2027.
Lance Loeffler: Yeah. So I'll start with the cost out. Yeah. So what we described, I think infamously was slide 15 on the deck on the Q3 call, where we talk about a lot of the momentum that we had in carrying over things that had already been announced in 2025 and what that impact would be. I think that was the $500 million that you were characterizing. We are going to continue to optimize in North America around our 80/20 transformation. So it's an incremental $200 million of cost benefit that should be accruing to us as we continue to execute that plan as we look to the second half of 2026 and into 2027.
Hey guys, uh, thanks for all the great. Thanks for all the great car a lot to unpack. Um, I guess kind of kick things off uh the 2026 guidance. Um, Lance last quarter, you guys gave us a nice Flight Deck, calling out, 600 million of Southpaw and Commercial efforts. Uh, certainly there's feels like there's some movement, but you know, the guy itself does it account for any incremental cost actions that has yet to be announced? So, or was that kind of accounted for, uh, second? I I think on the commercial front, certainly better in North America and Europe, and they correct me if I'm wrong. Lance, uh, the North American piece accounts for the exports, we kind of co-mingled it. So where are you seeing some? Some of the Winds on the commercial side, whether it's North America in Europe. I mean, Europe, I'm particularly curious. Just give I thought the commercial side of things were quite good, uh, but it was more on the cost out. So, help us kind of tease through, uh, some of those, uh, Dynamics.
Lance Loeffler: We are going to continue to optimize in North America around our 80/20 transformation. So it's an incremental $200 million of cost benefit that should be accruing to us as we continue to execute that plan as we look to the second half of 2026 and into 2027. On the commercial side, we're really pleased with the amount of progress that we've made about we're ahead of schedule, I think, as Andy mentioned, in terms of North America and our exit this year in Q4. We thought we'd be at market. We're clearly ahead of that. And we're excited about onboarding some very important customers that allow us to achieve those metrics. And we're excited about the wins that we've got in Europe. We expect to outperform. We believe the market next year will be up 1.7%, I believe, next year, or excuse me, in 2026.
Yeah, so I'll start with the, I'll start with the cost out side. Yeah, so what we described, I think, uh, infamously it was like slide 15 on the, on the deck on the third quarter, call where we talk about, uh, a lot of the, the momentum that we had in carrying over things that had already been announced in 2025 and what that impact would be. I think that was the 500 million dollars that you were characterizing. We are going to continue to optimize in North America.
Excited about the wins that we've got in Europe. Um, you know, we expect to outperform. Um, you know, we believe the market next year will be up, 1.7%, I believe, next year, and or excuse me in 2026, and we believe will outperform by about 50 basis points ahead of that. So, we're excited about the momentum that we've got in that market, as well.
On the commercial side, we're really pleased with the amount of progress that we've made about we're ahead of schedule, I think, as Andy mentioned, in terms of North America and our exit this year in Q4. We thought we'd be at market. We're clearly ahead of that. And we're excited about onboarding some very important customers that allow us to achieve those metrics. And we're excited about the wins that we've got in Europe. We expect to outperform. We believe the market next year will be up 1.7%, I believe, next year, or excuse me, in 2026. We believe we'll outperform by about 50 basis points ahead of that. So we're excited about the momentum that we've got in that market as well.
Around our 8020 transformation. So it's a incremental, $200 million of of cost benefit. That should be aing to us as we continue to to execute that plan. As we look to to 20 into second half of 26 and ended 2027.
Got it. So just so if I heard you correctly, Lance the upside on the costs out, the 200 million that's incremental cost actions, you haven't taken and in the back out of 26 that you still need to execute. Um, yeah, we'll be executing. Yeah. So Phil, those will be those are that is that amount and those actions are stuff that was not announced or actioned in 2025, that we will continue in terms of our momentum into 2026.
Okay. And, and the other piece I wanted to tease out, uh, for us for you, Andy, um, Mark, kind of tease it out and ready, uh, last year, a nice beat in the first first quarter in the back, uh, due to the Q4 was a little uneven. Um,
Lance Loeffler: We believe we'll outperform by about 50 basis points ahead of that. So we're excited about the momentum that we've got in that market as well. Got it. So just so if I heard you correctly, Lance, the upside on the cost out, the $200 million, that's incremental cost actions you haven't taken in the back half of 2026 that you still need to execute. Yeah. We'll be executing. Yeah. So Phil, those are that amount and those actions are stuff that was not announced or actioned in 2025 that we will continue in terms of our momentum into 2026. Okay. The other piece I want to tease out, perhaps for you, Andy, Mark kind of teased it out already. Last year, a nice beat in the Q1, in the Q2 to Q4 was a little uneven.
Phil Ng: Got it. So just so if I heard you correctly, Lance, the upside on the cost out, the $200 million, that's incremental cost actions you haven't taken in the back half of 2026 that you still need to execute.
Um, on the commercial side, we're really pleased with the amount of progress that we've made about, you know, we're, we're ahead of schedule. I think, as Annie mentioned, um, in terms of North America and our exit this year in the fourth quarter, and we thought we'd be at Market, we're clearly ahead of that. Uh, and we're excited about onboarding. Um, some very important customers that allow us to, to achieve those to achieve those metrics. And, uh, we're excited about the wins that we've got in Europe. Um, you know, we expect to outperform. Um, you know, we believe the market next year will be up, 1.7%, I believe, next year, and, or excuse me in 2026. And we believe, we will outperform by about 50 basis points ahead of that. So, we're excited about the momentum that we've got in that market, as well.
Just going to get give us some comfort that the framework you've laid out accounts for any hiccups along the way just because it's it's a choppy environment. So like how you kind of laid out the framework, where is this conservative, or are you baking? Like a lot of stuff's kind of has to kind of stick The Landing, just because you got a lot of moving pieces here.
Lance Loeffler: Yeah. We'll be executing. Yeah. So Phil, those are that amount and those actions are stuff that was not announced or actioned in 2025 that we will continue in terms of our momentum into 2026.
Phil Ng: Okay. The other piece I want to tease out, perhaps for you, Andy, Mark kind of teased it out already. Last year, a nice beat in the Q1, in the Q2 to Q4 was a little uneven. Just want to give us some comfort that the framework you've laid out accounts for any hiccups along the way, just because it's a choppy environment. So how you kind of laid out the framework, is this conservative, or are you baking a lot of stuff that kind of has to kind of stick to landing just because you got a lot of moving pieces here?
Got it. So just so that if I heard you correctly lands the upside on the costs out, the 200 million that's incremental cost actions, you haven't taken and in the back half of 26 that you still need to execute. Um, yeah, we'll be executing. Yeah. So Phil, those will be, those are that amount and those actions are stuff that was not announced or actioned in 2025, that we will continue in terms of our momentum in the 2026.
Okay. And and the other piece I want to tease out, uh, for us for you, Andy, um, Mark, kind of tease it out already, uh, last year, a nice beat in the first first quarter in the back. Uh,
Lance Loeffler: Just want to give us some comfort that the framework you've laid out accounts for any hiccups along the way, just because it's a choppy environment. So how you kind of laid out the framework, is this conservative, or are you baking a lot of stuff that kind of has to kind of stick to landing just because you got a lot of moving pieces here? Yeah. I think the range that we've given provides a pretty decent margin in there in terms of the $740 to 760 in the quarter and the $35 to 37 in the year. In terms of kind of, I would just call them good guys, bad guys, how do you think about that over the year? On the good guy side, the year has started strong, and I will certainly say that January was strong.
Andy Silvernail: Yeah. I think the range that we've given provides a pretty decent margin in there in terms of the $740 to 760 in the quarter and the $35 to 37 in the year. In terms of kind of, I would just call them good guys, bad guys, how do you think about that over the year? On the good guy side, the year has started strong, and I will certainly say that January was strong.
Due to the Q4 was a little uneven um just going to get give us some comfort that the framework you've laid out accounts for any hiccups along the way just because it's it's a choppy environment. So like how you kind of laid out the framework, where is this conservative or you baking like a lot of stuff, kind of had to kind of stick The Landing, just because you got a lot of moving pieces here.
Yeah, I I think the range that we've given provides a pretty decent margin in there in terms of the 740 to 760 in the quarter and the 35 to 37 in the year. Um, you know, in terms of kind of, I was just calling, you know, good guys. Bad guys. You know, how do you think about that over the year? Uh, you know, on the on the the good guys side? Um, the uh, the year has started strong. Um, and I will certainly say that January was strong. Obviously the ice storm that's going to be on the bad guys side, um, to see kind of what that impact is going to be, um, you know, it's a super thumb thumbnail sketch of 20 to 25 million. It's just hard to to know, right? You, you could, you could make that up. Um, but, uh, but certainly, you know, Mill, shutdowns and certainly some of the areas that were hit hard in terms of box, the box, I will come back. F, you know, fast. But you got some Mill impact. Um, that, we'll, we'll see how that plays out. But that's a, that's a pretty modest bad guy. Um, that's out there. Uh, again, you know, the the the January has has started strong
Strong strong. We've seen that in our daily numbers. Um, we would expect that to even off throughout the year. And again, we said, we thought the North American Market would be flat to up 1. And we'll take a couple of points of, uh, um
Lance Loeffler: Obviously, the ice storm, that's going to be on the bad guy side to see kind of what that impact is going to be. It's a super thumbnail sketch of $20 to 25 million. It's just hard to know, right? You could make that up, but certainly, mill shutdowns and certainly some of the areas that were hit hard in terms of the box side will come back fast, but you've got some mill impact that we'll see how that plays out. But that's a pretty modest bad guy that's out there. Again, the January has started strong. We've seen that in our daily numbers. We would expect that to even off throughout the year. Again, we said we thought the North American market would be flat to up 1, and we'll take a couple of points of market share in there.
Obviously, the ice storm, that's going to be on the bad guy side to see kind of what that impact is going to be. It's a super thumbnail sketch of $20 to 25 million. It's just hard to know, right? You could make that up, but certainly, mill shutdowns and certainly some of the areas that were hit hard in terms of the box side will come back fast, but you've got some mill impact that we'll see how that plays out. But that's a pretty modest bad guy that's out there. Again, the January has started strong. We've seen that in our daily numbers. We would expect that to even off throughout the year. Again, we said we thought the North American market would be flat to up 1, and we'll take a couple of points of market share in there.
Of market share in there. Um, in in terms of other good guys, right? We have we don't have anything in here for price, um, you know, and and we don't normally do that. We don't normally guide that and so we've kept to that practice. Um, but depending upon, uh, what happens with pricing, that's a pretty substantial. Um, good guy, that's not in any of our numbers here. Um, you know, the, the real, you know, big bad guy is, is potentially out there. We don't know, is what we faced last year was, was the global economy and, uh, um, you know, again right now things have started. Well, but, you know, that's, that's hard to predict throughout there. So I feel good about where we are. I I think that they're giving the pricing is more upside than downside, um, you know, in terms of of opportunity. And so, we feel like we played it down the middle.
Provides a pretty decent margin in there, in terms of the 740 to 760 in the quarter and the 35 to 37 in the year. Um, you know, in terms of kind of, I was just calling, you know, good guys. Bad guys. You know, how do you think about that over the year? You know, on the on the the good guys side? Um, the uh, the year has started strong. Um, and I will certainly say that January was strong. Obviously the ice storm that's going to be on the bad guys side, um, to see kind of what that impact is going to be, um, you know, it's a super thumb thumbnail sketch of 20 to 25 million. It's just hard to to know, right? You, you could, you could make that up. Um, but, uh, but certainly, you know, Mill, shutdowns and certainly some of the areas that were hit hard in terms of box the box, I will come back back, you know, fast. But you got some Mill impact. Um, that we'll, we'll see how that plays out. But that's a, that's a pretty modest bad guy. Um, that's out there. Uh, again, you know, the the the January has has started strong. We've seen that in our
Got the color. Andy. Thank you so much.
You bet. Thank you.
Our next question.
Daily numbers, um, would expect that to even off throughout the year. And again, we said we thought the North American market would be flat to up 1. And we'll take a couple of points of, uh, um,
Lance Loeffler: In terms of other good guys, right, we don't have anything in here for price. We don't normally do that. We don't normally guide that, and so we've kept to that practice. But depending upon what happens with pricing, that's a pretty substantial good guy that's not in any of our numbers here. The real big bad guy is potentially out there. We don't know. What we faced last year was the global economy. Again, right now, things have started well, but that's hard to predict throughout there. So I feel good about where we are. I think that there, given the pricing, there's more upside than downside in terms of opportunity. So we feel like we've played it down the middle. Okay. Appreciate the color, Andy. Thank you so much. You bet. Thank you.
In terms of other good guys, right, we don't have anything in here for price. We don't normally do that. We don't normally guide that, and so we've kept to that practice. But depending upon what happens with pricing, that's a pretty substantial good guy that's not in any of our numbers here. The real big bad guy is potentially out there. We don't know. What we faced last year was the global economy. Again, right now, things have started well, but that's hard to predict throughout there. So I feel good about where we are. I think that there, given the pricing, there's more upside than downside in terms of opportunity. So we feel like we've played it down the middle.
Comes from the line of Mike roxland with truist security. Please go ahead.
Yeah, thank you, Andy. Lance, Mandy and team, uh, for taking my questions.
um,
some calls from North America appear to be more sticky. Um, it's like middle of the liability, Etc. I mean, your volume is up for 2%, in 42, better than you. Expected, get ibadan missed. So wondering if you can speak to cost in North America, which ones are more problematic. Stickier how you intend to tackle them, and what the cost structure in North America part of your Calculus in terms of deciding to spin out Europe. I want to
Phil Ng: Okay. Appreciate the color, Andy. Thank you so much.
Of market share in there. Um, in in terms of other good guys, right? We have we don't have anything in here for price, um, you know, and and we don't normally do that. We don't normally guide that and so we've kept to that practice. Um, but depending upon, uh, what happens with pricing, that's a pretty substantial. Um, good guy, that's not in any of our numbers here. Um, you know, the real, you know, big bad guy is, is potentially out there. We don't know, is what we faced last year was, was the global economy and, uh, um, you know, again right now things have started well, but, you know, that's, that's hard to predict throughout there. So I feel good about where we are. I I think that they're giving the pricing is more upside than downside, um, you know, in terms of of opportunity. And so, we feel like we played it down the middle.
Andy Silvernail: You bet. Thank you.
Well, I'm trying to get as if you have to deal with a contractor that's a little bit more challenging than you expected. It's harder to tackle that plus having a European arm as well. So um any any call you can provide would be helpful. Thank you.
Appreciate the color, Eddie. Thank you so much.
Lance Loeffler: Our next question comes from the line of Mike Roxland with Truist Securities. Please go ahead. Yeah. Thank you, Andy, Lance, Mandy, and team for taking my questions. Some costs in North America appear to be more sticky, like mill reliability, etc. I mean, your volumes up were 2% in Q4, better than you expected, yet EBITDA missed. So I'm wondering if you can speak to costs in North America, which ones are more problematic, stickier, how you intend to tackle them. And was the cost structure in North America part of your calculus in terms of deciding to spin out Europe? And what I'm trying to get at is if you have to deal with a cost structure that's a little bit more challenging than you expected, it's harder to tackle that plus having a European arm as well. So any color you can provide would be helpful.
Operator: Our next question comes from the line of Mike Roxland with Truist Securities. Please go ahead.
You bet. Thank you.
Mike Roxland: Yeah. Thank you, Andy, Lance, Mandy, and team for taking my questions. Some costs in North America appear to be more sticky, like mill reliability, etc. I mean, your volumes up were 2% in Q4, better than you expected, yet EBITDA missed. So I'm wondering if you can speak to costs in North America, which ones are more problematic, stickier, how you intend to tackle them. And was the cost structure in North America part of your calculus in terms of deciding to spin out Europe? And what I'm trying to get at is if you have to deal with a cost structure that's a little bit more challenging than you expected, it's harder to tackle that plus having a European arm as well. So any color you can provide would be helpful.
Our next question comes from the line of Mike roxland with truist Securities. Please go ahead.
Yeah, thank you, Andy. Lance, Mandy and team, uh, for taking my questions.
um,
Some calls from North America appear to be more sticky—um, it's like mill reliability, etc. I mean, your volume is up 2% in Q4, better than you expected, get EBITDA missed. So, I'm wondering if you can speak to cost in North America, which ones are more problematic, stickier, how you intend to tackle them, and was the cost structure in North America part of your calculus in terms of deciding to spin out yours? I want—
Lance Loeffler: Thank you. Yeah. So on the cost side, look, I'm really happy with what we've done. We've taken out over $700 million in total costs when you look at the execution on that. So I'm very happy with the progress that we've made on that. The things that are harder to get at, there's really two, right? One is the speed at which you take things down and all of those costs go away, right? So as you close a mill, there tend to be lingering costs during the shutdown and ultimately into the final closure and then potentially the sale or disposal of the property. Those tend to linger a little bit.
Andy Silvernail: Thank you. Yeah. So on the cost side, look, I'm really happy with what we've done. We've taken out over $700 million in total costs when you look at the execution on that. So I'm very happy with the progress that we've made on that. The things that are harder to get at, there's really two, right? One is the speed at which you take things down and all of those costs go away, right? So as you close a mill, there tend to be lingering costs during the shutdown and ultimately into the final closure and then potentially the sale or disposal of the property. Those tend to linger a little bit.
I'm trying to get if you have to deal with the Constructor, that's a little bit more challenging than you expected. It's harder to tackle that plus having a European arm as well. So, um, any call you can provide would be helpful. Thank you.
Lance Loeffler: Then on the reliability front, it's as we have described, which is you've got to get in there and you've got to make the investments consistently over a period of time to drive the reliability and not have things pop up that can be very expensive in any given period. As you know, a singular mill struggling can be a $100 million hit in a year easily if a mill is really struggling. So we are aggressively investing back into our mill system in North America. And that's if you look at the expanded CapEx, if you look at the one-time accelerated transformation costs, even the Lighthouse rollout, those are all things that we are doing to drive that reliability. It's absolutely showing up for the customers. They're feeling that positive reliability, and it's showing up in their customer satisfaction numbers.
Then on the reliability front, it's as we have described, which is you've got to get in there and you've got to make the investments consistently over a period of time to drive the reliability and not have things pop up that can be very expensive in any given period. As you know, a singular mill struggling can be a $100 million hit in a year easily if a mill is really struggling. So we are aggressively investing back into our mill system in North America. And that's if you look at the expanded CapEx, if you look at the one-time accelerated transformation costs, even the Lighthouse rollout, those are all things that we are doing to drive that reliability. It's absolutely showing up for the customers. They're feeling that positive reliability, and it's showing up in their customer satisfaction numbers.
Reliability front. It. It's it's as we have described which is um, you've got to get in there and you've got to make the Investments consistently over a period of time to drive the reliability and not have, um, things pop up? That can be very expensive in any given period. I mean, you know, you know, a singular Mill struggling, um, can be a hundred million dollar hit in a year easily, um, if if a mill is really struggling and so, uh, we are putting um aggressively investing back into our Mill system, um, in North America. And that's if you look at the expanded capex, if you look at the, the the the 1 time, uh, accelerated transformation costs, uh, even the lighthouse roll out. Those are all things that that we are doing, uh, to drive that reliability. It's absolutely showing up for the customers of their feeling that positive reliability and it's showing up in their customer satisfaction numbers. Um, it's showing up in our cost numbers but it is that's a slugfest and you and you got to stick with it. And the team is doing an excellent job on the European side.
Yeah, so, so on the, on the cost side. Look, I I I'm I'm really happy with what we've done. We've taken out, you know, over 700 million dollars in in total costs. When you look at the the execution on that. So I'm very happy with the progress that we've made on that the things that are harder to get at there's really 2. Right? 1 is the speed at which um you take things down and all of those costs go away, right? So as you as you as you as you close the mill uh there tend to be lingering costs during the shutdown and ultimately into the final closure and then potentially the uh, the sale or disposal of of the property. Those tend to linger a little bit. Um and then on the reliability front, it it's it's as we have described which is you've got to get in there and you've got to make the Investments consistently over a period of time to drive the reliability and not have, um, things pop up. That can be very expensive in any given period and as you know you know a singular Mill struggling um can be a hundred million dollar hit in a year.
You know, look um, you know, you know what, what Tim and team are doing in, Europe is pretty exceptional. Um they are tackling structural costs in a way. That's very unusual in the European Marketplace and you can see from the magnitude of what was on that 1 slide that we're getting after it and so we're getting after it fast and we'll continue to do that throughout 2026.
Got it. Just 1 quick follow up. I mean, so it sounds like, you know, with the fact that Europe, but the the costs are, um,
The harder to get at and taking a little bit longer. So, with that part of what was packed into your, what what was that, what you consider in terms of the spin, was that a huge factor in terms of your consideration for spinning Europe? Because, right, when I get back to your question,
Lance Loeffler: It's showing up in our cost numbers, but it is. That's a slugfest, and you got to stick with it, and the team is doing an excellent job. On the European side, look, what Tim and team are doing in Europe is pretty exceptional. They are tackling structural costs in a way that's very unusual in the European marketplace. And you can see from the magnitude of what was on that one slide that we're getting after it. And so we're getting after it fast, and we'll continue to do that throughout 2026. Got it. And just one quick follow-up. I mean, so it sounds like with respect to Europe, the costs are harder to get at and taking a little bit longer. So was that part of what was factored into – was that what you considered in terms of the spin?
It's showing up in our cost numbers, but it is. That's a slugfest, and you got to stick with it, and the team is doing an excellent job. On the European side, look, what Tim and team are doing in Europe is pretty exceptional. They are tackling structural costs in a way that's very unusual in the European marketplace. And you can see from the magnitude of what was on that one slide that we're getting after it. And so we're getting after it fast, and we'll continue to do that throughout 2026.
Easily, um, if if a mill is really struggling and so, uh, we are putting um aggressively investing back into our Mill system, um, in North America. And that's if you look at the expanded capex, if you look at the, the the, the 1-time, uh, accelerated transformation costs, uh, even the lighthouse rollout, those are all things that that we are doing, uh, to drive that reliability. It's absolutely showing up for the customers, they're feeling that positive reliability and it's showing up in their customer satisfaction numbers. Um, it showing up in our cost numbers but it is that's a slugfest and you and you got to stick with it. And the team is doing an excellent job on the European side.
Mike Roxland: Got it. And just one quick follow-up. I mean, so it sounds like with respect to Europe, the costs are harder to get at and taking a little bit longer. So was that part of what was factored into – was that what you considered in terms of the spin? Was that a huge factor in terms of your consideration for spinning Europe? Because when I get back to your investment.
You know, look, um, you know, you know what Tim and team are doing in Europe is pretty exceptional. Um, they are tackling structural costs in a way that's very unusual in the European marketplace, and you can see from the magnitude of what was on that one slide that we're getting after it, and so we're getting after it fast, and we'll continue to do that throughout 2026.
1 quick follow up. I mean so it sounds like you know with the fact that Europe the costs are um
No, no, not not, not not at all. I the the real driver for for this decision is the fact that the value is really in the regions when you when you get right down to it. And you and you look at where value is created the the, the acquisition and the combination. What it did was it created 2 Regional powerhouses? Um, that really have very very very little overlap. I'm talking almost zero overlap in terms of how those businesses their structured in the market, how those businesses go to market with customers and how you execute all the way from inputs fiber supply, all the way through the market. They're really distinctive markets. Um, and so, you know, using 8020 as the as the lens and as the mindset, you want to simplify right, you want to take the complexity out
Lance Loeffler: Was that a huge factor in terms of your consideration for spinning Europe? Because when I get back to your investment. No, no, not at all. The real driver for this decision is the fact that the value is really in the regions. When you get right down to it and you look at where value is created, the acquisition and the combination, what it did was it created two regional powerhouses that really have very, very, very little overlap. I'm talking almost zero overlap in terms of how those businesses are structured in the market, how those businesses go to market with customers, and how you execute all the way from inputs, fiber supply, all the way through the market. They're really distinctive markets. And so using 80/20 as the lens and as the mindset, you want to simplify, right? You want to take the complexity out.
Andy Silvernail: No, no, not at all. The real driver for this decision is the fact that the value is really in the regions. When you get right down to it and you look at where value is created, the acquisition and the combination, what it did was it created two regional powerhouses that really have very, very, very little overlap. I'm talking almost zero overlap in terms of how those businesses are structured in the market, how those businesses go to market with customers, and how you execute all the way from inputs, fiber supply, all the way through the market. They're really distinctive markets. And so using 80/20 as the lens and as the mindset, you want to simplify, right? You want to take the complexity out.
The harder to get at and taking a little bit longer. So, was that part of what was factored into your, what what was that? What you considered in terms of the spin? Was that a huge factor in terms of your consideration for spinning Europe? Because when I get back to your question,
You want to focus on where the value is, in the discrete markets and then you want to get capital and people aligned and focused, uh, to those best opportunities. And that's really the driver there that the exciting opportunity in Europe is even with the headwinds that the business had all of last year, um, with a combination of, of the war in Ukraine and trade tensions, in the softness, in the market,
Lance Loeffler: You want to focus on where the value is in the discrete markets, and then you want to get capital and people aligned and focused to those best opportunities. And that's really the driver there. The exciting opportunity in Europe is even with the headwinds that the business had all of last year with a combination of the war in Ukraine and trade tensions and the softness in the market, the business performed well relative to the marketplace and is getting after the changes in a way that's really distinctive to that marketplace. And this business coming out as a standalone business is going to have a great balance sheet. It's going to have great positioning in the market, top of its class in terms of customer satisfaction, and the ability to direct and align people and capital to that unique mission. And that's really what this is all about.
You want to focus on where the value is in the discrete markets, and then you want to get capital and people aligned and focused to those best opportunities. And that's really the driver there. The exciting opportunity in Europe is even with the headwinds that the business had all of last year with a combination of the war in Ukraine and trade tensions and the softness in the market, the business performed well relative to the marketplace and is getting after the changes in a way that's really distinctive to that marketplace. And this business coming out as a standalone business is going to have a great balance sheet. It's going to have great positioning in the market, top of its class in terms of customer satisfaction, and the ability to direct and align people and capital to that unique mission. And that's really what this is all about.
No, no, not not. Not, not, not at all. I the the real driver for this decision is the fact that the value is really in the regions. When you when you get right down to it. And you and you look at where value is created the the, the acquisition and the combination. What it did was it created 2 Regional powerhouses? Um, that really have very very, very little overlap. I'm talking almost zero overlap in terms of how those businesses their structured in the market, how those businesses go to market with customers and how you execute all the way from inputs fiber supply, all the way through the market. They're really distinctive markets. Um, and so, you know, using 8020 as the as the lens and as the mindset, you want to simplify right, you want to take the complexity out
Market. Um, is the the business performed well relative to the marketplace um, and is getting after the changes in a way that's really distinctive to that Marketplace. Um, and this business coming out as a standalone, business is going to have a great balance sheet, um, it's going to have great positioning in the market, you know, top of its class in terms of of customer satisfaction. Uh, and the ability to direct and align people and capital to that unique Mission, and that's really what this is all about. So I'm I'm super excited for what team in the Tim and the team have lined up um, and as an independent company, um, I believe it's going to thrive, um, having that focus and that, uh, that that aligned Capital allocation and the same thing in the US um, and and this really allows us for each to realize its unique Mission and and really Drive incredible value.
Got it. Thank you very much.
You want to focus on where the value is, in the discrete markets and then you want to get capital and people aligned and focused, uh, to those best opportunities. And that's really the driver there that the exciting opportunity in Europe is even with the headwinds that the business had all of last year, um, with a combination of, of the war in Ukraine and trade tensions in the softness, in the market. Um,
Your next question comes from the line of enolla sha with UPS. Please go ahead.
Good morning. Hi. Good morning.
Good morning. Um, I just wanted to a quick clarification so clearly the price increase is not built in to commercial initiatives in North America. I get that reading loud and clear but in Amia the commercial initiative bucket is now 200 million in contribution. I think in Q3, it was a 100 million
Lance Loeffler: So I'm super excited for what Tim and the team have lined up. And as an independent company, I believe it's going to thrive having that focus and that aligned capital allocation. And the same thing in the US. And this really allows us for each to realize its unique mission and really drive incredible value. Got it. Thank you very much. Your next question comes from the line of Anojja Shah with UBS. Please go ahead. Good morning, Anojja. Hi, good morning. Good morning. I just wanted a quick clarification. So clearly, the price increase is not built into commercial initiatives in North America. I get that. Read you loud and clear. But in EMEA, the commercial initiatives bucket is now $200 million in contribution. I think in Q3, it was $100 million. So what happened there?
So I'm super excited for what Tim and the team have lined up. And as an independent company, I believe it's going to thrive having that focus and that aligned capital allocation. And the same thing in the US. And this really allows us for each to realize its unique mission and really drive incredible value.
So what happened there? And can you confirm that a price goes down in Europe? That whether that's already in that bucket or not?
Mike Roxland: Got it. Thank you very much.
Operator: Your next question comes from the line of Anojja Shah with UBS. Please go ahead.
Is the the business performed well relative to the marketplace um, and is getting after the changes in a way, that's really distinctive to that Marketplace. Um, and this business coming out as a standalone, business is going to have a great balance sheet, um, it's going to have great positioning in the market, you know, top of its class in terms of of customer satisfaction. Uh, and the ability to direct and align people and capital to that unique Mission and that's really what this is all about. So I'm I'm super excited for what team and the Tim and the team have lined up um, and as an independent company, um, I believe it's going to thrive, um, having that focus and that, uh, that that aligned Capital allocation and the same thing in the US um, and and this really allows us for each to realize its unique Mission and and really Drive incredible value.
Got it. Thank you very much.
Your next question comes from the line of enolla sha with UPS.
Andy Silvernail: Good morning, Anojja.
Anojja Shah: Hi, good morning.
Please go ahead.
Andy Silvernail: Good morning.
Anojja Shah: I just wanted a quick clarification. So clearly, the price increase is not built into commercial initiatives in North America. I get that. Read you loud and clear. But in EMEA, the commercial initiatives bucket is now $200 million in contribution. I think in Q3, it was $100 million. So what happened there?
Good morning. Hi. Good morning.
Lance Loeffler: And can you confirm that if price goes down in Europe, whether that's already in that bucket or not? Yeah. So specific to so yes, you're correct on North America first. There is nothing in there in terms of price. In EMEA, same thing. It's only things that have been executed, and we have line of sight to. So you have the underlying assumption of market growth in there, which, as Lance said, was 1.7%. And then you got a half a point, which are wins that we know that we have today. And so we do not have incremental price that has not been that has not settled into the market built into there. So there's no price.
And can you confirm that if price goes down in Europe, whether that's already in that bucket or not?
Good morning. Um I just wanted to a quick clarification so clearly the price increase is not built in to commercial initiatives in North America. I get that reading a lot and clear but in Amia the commercial initiative bucket is now 200 million in contribution. I think in Q3, it was a 100 million
Andy Silvernail: Yeah. So specific to so yes, you're correct on North America first. There is nothing in there in terms of price. In EMEA, same thing. It's only things that have been executed, and we have line of sight to. So you have the underlying assumption of market growth in there, which, as Lance said, was 1.7%. And then you got a half a point, which are wins that we know that we have today. And so we do not have incremental price that has not been that has not settled into the market built into there. So there's no price.
So what happened there? And can you confirm that a price goes down in Europe? That whether that's already in that bucket or not?
There. So there's there's no price. Now, that being said, as I mentioned in my remarks, uh, just as there's a, a seventy dollar pricing increase, uh, in North America, that's been, um, uh, um, put out into the marketplace by us to our customers in Europe. There have been a, a lot of of, uh, there's been a lot of activity, and there's about a hundred Euro paper price, increase that's gone out in most markets. Um, and uh, what we don't know is is whether, you know, kind of what's going to stick, it's a more Dynamic Market. Um, in the US on an annualized basis, if you got every penny of that, that's a little over 600 million dollars, about 630 million and in Europe, if you got every penny of that, it would be about 300 million um incrementally from from what we're talking about today, but in neither case do we have those built into the numbers?
Perfect. That's very helpful. I'll turn it over. Thank you.
You bet.
Lance Loeffler: Now, that being said, as I mentioned in my remarks, just as there's a $70 price increase in North America that's been put out into the marketplace by us to our customers, in Europe, there have been a lot of activity, and there's about a EUR 100 paper price increase that's gone out in most markets. And what we don't know is whether kind of what's going to stick. It's a more dynamic market. In the US, on an annualized basis, if you got every penny of that, that's a little over $600 million, about $630 million. And in Europe, if you got every penny of that, it would be about EUR 300 million incrementally from what we're talking about today. But in neither case do we have those built into the numbers. Perfect. That's very helpful. I'll turn it over. Thank you. You bet.
Now, that being said, as I mentioned in my remarks, just as there's a $70 price increase in North America that's been put out into the marketplace by us to our customers, in Europe, there have been a lot of activity, and there's about a EUR 100 paper price increase that's gone out in most markets. And what we don't know is whether kind of what's going to stick. It's a more dynamic market. In the US, on an annualized basis, if you got every penny of that, that's a little over $600 million, about $630 million. And in Europe, if you got every penny of that, it would be about EUR 300 million incrementally from what we're talking about today. But in neither case do we have those built into the numbers.
Your next question comes from the line of debt left Winkleman, with JP Morgan, please go ahead.
Yes. So so specific to to so so yes. You're correct on North America First. There is nothing in there in terms of price. Um, in Amia same thing, it's only things that have been executed and we have line of sight too. So you have the underlying Assumption of market growth, uh, in there which is Lance said was was, uh, 1.7%. And then you got a half a point, which are winds, that we know that we have today and so, um, we we do not have incremental price that has not been, that is not settled into the market, um, built into there, so, there's, there's no price. Now, that being said, as I mentioned in my remarks, uh, just as there's a, a seventy dollar pricing increase, uh, in North America, that's been, um, uh, um, put out into the marketplace by us to our customers in Europe. There have been a, a lot of of, uh, there's been a lot of activity, and there's about a hundred Euro paper price, increase that's gone out in most markets. Um, and uh, what we don't know is is
Morning guys. Um, just if I can ask 2, uh, maybe the first 1, um, regarding your commercial improvements year on year in that, you've got it for now. It looks like about 100 million in North America. If I go back to third quarter, it was sitting at about 300 um based on your bridge that you gave just wondering if anything has changed and why the delta
Yeah, I don't, I don't know. I have to go back and look nothing rings a bell. I mean, I think nothing has really changed. Other than the, the relationship that we've described. I think. I think that extra 100 million is incremental to where we were in the third quarter.
Anojja Shah: Perfect. That's very helpful. I'll turn it over. Thank you.
Um,
It's whether, you know, kind of what's going to stick. It's a more dynamic market. Um, in the US, on an annualized basis, if you got every penny of that, that's a little over a million dollars—about $630 million—and in Europe, if you got every penny of that, it would be about $300 million incrementally from what we're talking about today. But in neither case do we have...
Have those built into the numbers?
Andy Silvernail: You bet.
Lance Loeffler: Your next question comes from the line of Detlef Winckelmann with J.P. Morgan. Please go ahead. Morning, guys. Just if I can ask two, maybe the first one regarding your commercial improvements year-over-year that you've guided for now, it looks like about $100 million in North America. If I go back to Q3, it was sitting at about $300 million based on your bridge that you gave. Just wondering if anything has changed and why the delta? Yeah. I don't know. I had to go back and look. Nothing rings a bell. I mean, I think nothing has really changed other than the relationship that we've described. I think that extra $100 million is incremental to where we were in Q3.
Operator: Your next question comes from the line of Detlef Winckelmann with J.P. Morgan. Please go ahead.
Perfect. That's very helpful. I was trying to remember, thank you. You bet.
Detlef Winckelmann: Morning, guys. Just if I can ask two, maybe the first one regarding your commercial improvements year-over-year that you've guided for now, it looks like about $100 million in North America. If I go back to Q3, it was sitting at about $300 million based on your bridge that you gave. Just wondering if anything has changed and why the delta?
Your next question comes from the line of Debt Left Winkleman with J.P. Morgan. Please go ahead.
but you know, we do have some commercial trade-offs that we've talked a lot about in North America about leaving the export business in the closure around. Savannah. Yeah, that that might be part of what you're looking at. There is is that that that 100 million? If, if we're talking about North America, right? That is netted against the, the, the trade-offs, with the, the export business that we have exited.
Lance Loeffler: Yeah. I don't know. I had to go back and look. Nothing rings a bell. I mean, I think nothing has really changed other than the relationship that we've described. I think that extra $100 million is incremental to where we were in Q3.
if anything is changing why the delta
Lance Loeffler: But we do have some commercial trade-offs that we've talked a lot about in North America about leaving the export business and the closure around Savannah. Yeah. That might be part of what you're looking at there is that $100 million, if we're talking about North America, right, that is netted against the trade-offs with the export business that we have exited. Did we answer your question, Detlef? I want to make sure we have. Yeah. Yeah, I think so. It was kind of a net zero right from the beginning, now it's a net $100 million, if I read correctly. I understand. And if I can ask one more follow-up, I mean, right in the beginning on your investor day, you were very helpful in giving an EMEA and a North America split all the way to 2027.
But we do have some commercial trade-offs that we've talked a lot about in North America about leaving the export business and the closure around Savannah.
yeah, I don't, I don't know. I have to go back and look nothing rings a bell. I mean, I think nothing has really changed. Other than the, the relationship that we've described. I think. I think that extra 100 million is incremental to where we were in the third quarter.
Um,
Andy Silvernail: Yeah. That might be part of what you're looking at there is that $100 million, if we're talking about North America, right, that is netted against the trade-offs with the export business that we have exited. Did we answer your question, Detlef? I want to make sure we have.
Do we answer your question that I want to make sure we? Yeah yeah yeah I think so. It was kind of a net zero right in the beginning not in net to 100 million. If I if I read correctly understand and if I can ask 1 more follow up, I mean right in the beginning, on your investor day, you were very helpful in giving a, an Amia a North America split all the way to 2027. Now I know, you know pathways through the year. You said demand is a bit worse, pricing came down a bit from your initial expectations. Um so I think you were talking about. Maybe you're coming down a bit from that initial guide of what at 1.8 to 2 billion. Um, I'm wondering, you know, given the context of your 5 billion guide now what what Europe plays a part of in that, if you can share any color. Yeah. We, we haven't broken out specifically, but generally you're talking about kind of 3 5 in North America and 1.
5 in in Europe.
Okay, perfect. Thanks very much.
But, you know, we do have some commercial trade-offs that we've talked a lot about in North America about leaving the export business and the closure around Savannah. Yeah, that that might be part of what you're looking at. There is, is that, that that 100 million if we're talking about North America, right? That is netted against the, the, the trade-offs, with the, the export business that we have exited.
Detlef Winckelmann: Yeah. Yeah, I think so. It was kind of a net zero right from the beginning, now it's a net $100 million, if I read correctly. I understand. And if I can ask one more follow-up, I mean, right in the beginning on your investor day, you were very helpful in giving an EMEA and a North America split all the way to 2027.
Our last question today is going to come from the line of Matthew McKellar with RBC Capital markets. Please go ahead.
Lance Loeffler: Now, I know partway through the year, you said demand was a bit worse. Pricing came down a bit from your initial expectations. So I think you were talking about maybe Europe coming down a bit from that initial guide of, quote, $1.82 billion. I'm wondering, given the context of your $5 billion guide now, what Europe plays a part of in that, if you can share? Any color would be good. Yeah. We haven't broken out specifically, but generally, you're talking about kind of $3.5 billion in North America and $1.5 billion in Europe. Okay. Perfect. Thanks very much. Our last question today is going to come from the line of Matthew McKellar with RBC Capital Markets. Please go ahead. Good morning. Thanks for taking my question.
Now, I know partway through the year, you said demand was a bit worse. Pricing came down a bit from your initial expectations. So I think you were talking about maybe Europe coming down a bit from that initial guide of, quote, $1.82 billion. I'm wondering, given the context of your $5 billion guide now, what Europe plays a part of in that, if you can share? Any color would be good.
Good morning. Thanks for taking my question. Uh just following up on questions from Charlie and Phil and apologies. I missed it. But is it 2% outperformance versus the North American industry? You expect in 26 based solely on those customer wins you've seen so far mostly in the back half of 25 or have you seen further wind and share games as the year progresses as part of that outperformance assumption? And I guess with that, could there be upside to that number as the year progresses given you know the improved service quality and customer experience metrics. You've highlighted by
Andy Silvernail: Yeah. We haven't broken out specifically, but generally, you're talking about kind of $3.5 billion in North America and $1.5 billion in Europe.
yeah, so so so those are that's a great question that those are um, basic
Do we what's your question that I want to make sure we yeah yeah yeah yeah I think so. It was kind of a net zero right in the beginning gnats in that 100 million. If I if I read it correctly understand and if I can ask 1 more follow up, I mean right in the beginning, on your investor day, you were very helpful in giving a an Amia and a North America split all the way to 2027. Now, I know, you know, pathways through the year. You said demand is a bit worse, pricing came down a bit from your initial expectations. Um so I think you were talking about. Maybe you're coming down a bit from that initial guide of what at 1.8 to 2 billion. Um, I'm wondering, you know, given the context of your 5 billion guide now what what Europe plays a part of in that, if you can share any color would be great? Yeah. Yeah. We we haven't broken out specifically but generally you're talking.
Detlef Winckelmann: Okay. Perfect. Thanks very much.
About kind of 3.5 in North America and 1.5 in Europe.
Operator: Our last question today is going to come from the line of Matthew McKellar with RBC Capital Markets. Please go ahead.
Okay, perfect. Thanks very much.
Matthew McKellar: Good morning. Thanks for taking my question.
Our last question today is going to come from the line of Matthew McKellar with RBC Capital Markets. Please go ahead.
Lance Loeffler: Just following up on questions from Charlie and Phil, and apologies if I missed it, but is the 2% outperformance versus the North America industry you expect in 2026 based solely on those customer wins you've seen so far, mostly in the back half of 2025? Or have you assumed further wins and share gains as the year progresses as part of that outperformance assumption? And I guess with that, could there be upside to that number as the year progresses given the improved service quality and customer experience metrics you've highlighted? Thanks. Yeah. So that's a great question. Those are based on what we have line of sight to today, so business that we have won. So we don't need major incremental wins in this year to move the needle.
Just following up on questions from Charlie and Phil, and apologies if I missed it, but is the 2% outperformance versus the North America industry you expect in 2026 based solely on those customer wins you've seen so far, mostly in the back half of 2025? Or have you assumed further wins and share gains as the year progresses as part of that outperformance assumption? And I guess with that, could there be upside to that number as the year progresses given the improved service quality and customer experience metrics you've highlighted? Thanks.
Line of sight to today. So business that we have 1. Um, so we don't need major incremental wins, um, in, uh, in this year, um, to move the Needle and to be fair, right? The, the, the, what will move a needle in a short period are going to be local winds, right? The the national business tends to be more on a contract cycle. Um, and, uh, and so, you know, we know what we want in 2025. This is now showing up in 2026. That's what we're communicating here. Uh, and then you'll have the, the local piece of business, which is much more day-to-day much less contractual in there. So if we were to win incremental business,
Um, uh, um, you know, throughout the year obviously, that that that would be an upside.
Thanks very much. I'll turn it back.
Great, thanks.
Andy Silvernail: Yeah. So that's a great question. Those are based on what we have line of sight to today, so business that we have won. So we don't need major incremental wins in this year to move the needle.
Good morning. Thanks for taking my question. Uh, just following up on questions from Charlie and Phil and apologies. I missed it. But is the 2% outperformance versus the North American industry? Expect in 26 based solely on those customers. You've seen so far mostly in the back half of 25, or if you assume further wind and share gains zero Progressive as part of that outperforming consumption. And I guess with that, could there be upside of that number as the year progresses. Given, you know, improved service quality and customer experience metrics. You highlighted thanks.
Thank you. I'll now turn the call over to Andy silver now for closing comments.
Lance Loeffler: And to be fair, right, what will move a needle in a short period are going to be local wins, right? The national business tends to be more on a contract cycle. And so we know what we won in 2025. That's now showing up in 2026. That's what we're communicating here. And then you'll have the local piece of business, which is much more day-to-day, much less contractual in there. So if we were to win incremental business throughout the year, obviously, that would be an upside. Thanks very much. I'll turn it back. Great. Thank you. I'll now turn the call over to Andy Silvernail for closing comments. Well, thank you very much. I appreciate everybody joining us today. This is an important and a very exciting day for International Paper.
And to be fair, right, what will move a needle in a short period are going to be local wins, right? The national business tends to be more on a contract cycle. And so we know what we won in 2025. That's now showing up in 2026. That's what we're communicating here. And then you'll have the local piece of business, which is much more day-to-day, much less contractual in there. So if we were to win incremental business throughout the year, obviously, that would be an upside.
Yeah, so so those are, this is a great question. Those are, um, based on what we have line of sight to today, so business that we have 1. Um, so we don't need major incremental wins, um, in, uh, in this year, um, to move the Needle and to be fair, right? The, the, the, what will move a needle in a short period are going to be local winds, right? The the national business tends to be more on a contract cycle. Um, and, uh, and so, you know, we know what we want in 2025. This is now showing up in 2026. That's what we're communicating here. Uh, and then you'll have the, the local piece of business, which is much more day-to-day much less contractual in there. So,
Matthew McKellar: Thanks very much. I'll turn it back.
So if we were to win incremental business, um uh um, you know, throughout the year obviously, that that that would be an upside.
Andy Silvernail: Great.
Operator: Thank you. I'll now turn the call over to Andy Silvernail for closing comments.
Thanks very much. I'll turn it back.
Great, thanks.
Andy Silvernail: Well, thank you very much. I appreciate everybody joining us today. This is an important and a very exciting day for International Paper.
Thank you. I'll now turn the call over to Andy Silvernail for closing comments.
Lance Loeffler: The decision to split into two public companies to build two powerhouses that we have put together from the legacy pieces of International Paper and the legacy pieces of DS Smith now have two regions that are number one in their regions, have an exciting strategy in terms of cost position, how we're working with customers, how we're building our relative share position, and ultimately, the financial upside that we see here. All of the hard work that's been put in, the focus on 80/20, making really tough choices around assets and reinvesting back into the business aggressively to drive the customer service experience that we're seeing today, winning share, aggressively taking cost out, and maximizing return on invested capital.
The decision to split into two public companies to build two powerhouses that we have put together from the legacy pieces of International Paper and the legacy pieces of DS Smith now have two regions that are number one in their regions, have an exciting strategy in terms of cost position, how we're working with customers, how we're building our relative share position, and ultimately, the financial upside that we see here. All of the hard work that's been put in, the focus on 80/20, making really tough choices around assets and reinvesting back into the business aggressively to drive the customer service experience that we're seeing today, winning share, aggressively taking cost out, and maximizing return on invested capital.
Uh from the Legacy pieces of international paper and the Legacy pieces of Dia Smith. Now have 2 regions that are that are number 1 in their regions. Um, have an exciting strategy in terms of cost position how we're working with customers, how we're building, our relative share position, and ultimately the financial upside that we see here, all of the hard work that's been put in, um, the focus on 8020 making really tough choices around assets and reinvesting back into the business aggressively, uh, to drive the customer service experience that we're seeing today winning share uh aggressively taking cost, cost out and maximizing return on invested Capital. When I look at that, I see 2 businesses, um, that will stand on their own with great balance sheets with the ability to invest in their future with the ability to make Dynamic Capital, allocation decisions, to maximize value for shareholders. I'm very excited about that future. And I, I applaud the team for all the incredible work that they've done. I thank our shareholders, uh, for, uh,
For your interest in the business and what this can become. And I'm incredibly excited about the future again. The the year has started strong, uh we've seen a nice pickup in business here. Um and uh and we're excited for the year to come and uh in the years to come. So thank you very much, take care.
Once again, we'd like to thank you for participating in international papers. Fourth quarter 2026 earnings call. You may now disconnect
Lance Loeffler: When I look at that, I see two businesses that will stand on their own with great balance sheets, with the ability to invest in their future, with the ability to make dynamic capital allocation decisions to maximize value for shareholders. I'm very excited about that future. I applaud the team for all the incredible work that they've done. I thank our shareholders for your interest in the business and what this can become. I'm incredibly excited about the future. Again, the year has started strong. We've seen a nice pickup in business here, and we're excited for the year to come and the years to come. So thank you very much. Take care. Once again, we'd like to thank you for participating in International Paper's Q4 2026 earnings call. You may now disconnect.
When I look at that, I see two businesses that will stand on their own with great balance sheets, with the ability to invest in their future, with the ability to make dynamic capital allocation decisions to maximize value for shareholders. I'm very excited about that future. I applaud the team for all the incredible work that they've done. I thank our shareholders for your interest in the business and what this can become. I'm incredibly excited about the future. Again, the year has started strong. We've seen a nice pickup in business here, and we're excited for the year to come and the years to come. So thank you very much. Take care.
Well, thank you very much. I appreciate everybody joining us today. This is an important and a very exciting day. For International Paper, the decision uh to split into 2, public companies, to build 2 power houses that we have put together uh from the Legacy pieces of international paper and the Legacy pieces of Dia Smith. Now have 2 regions that are that are number 1 in their regions. Um, have been exciting strategy in terms of cost position. How we're working with customers, how we're building, our relative share position, and ultimately the financial upside that we see here, all of the hard work that's been put in, um, the focus on 8020 making really tough decisions around assets and reinvesting back into the business aggressively uh to drive the customer service experience that we're seeing today winning share uh aggressively taking cost, cost out and maximizing return on invested Capital. When I look at that, I see 2 businesses, um, that will stand on their own with great balance sheets, with the ability to invest in their future.
Operator: Once again, we'd like to thank you for participating in International Paper's Q4 2026 earnings call. You may now disconnect.
With the ability to make Dynamic Capital, allocation decisions, to maximize value for shareholders. I'm very excited about that future. And I, I applaud the team for all the incredible work that they've done. I thank our shareholders, uh, for uh, for your interest in the business and what this can become. And I'm incredibly excited about the future again. The the year has started strong, uh we've seen a nice pickup in business here. Um and uh and we're excited for the year to come and uh in the years to come. So thank you very much, take care.