In the first quarter, SW reported robust financial results, surpassing expectations with revenue of $7.66 billion, compared to the anticipated $6.93 billion. The company achieved a net income of $382 million and an Adjusted EBITDA of $1.252 billion, maintaining a 16.4% margin, aligning with their guidance.
The impressive performance was driven by solid outputs across all three business segments, particularly in North America. The company is on track with its synergy program, aiming to generate $400 million, with $350 million anticipated this year. To strengthen its market leadership and customer support, SW has built two advanced converting plants in Washington and Wisconsin and is finalizing a new Bag-in-Box facility in South Carolina.
Looking ahead, SW plans for increased economic downtime in the second quarter, potentially costing around $100 million, compared to Q1. Despite uncertainties in demand, the company projects a second-quarter Adjusted EBITDA of approximately $1.2 billion and a full-year forecast between $5.0 billion and $5.2 billion.
SW Key Business Developments
Release Date: February 12, 2025
- Adjusted EBITDA (Q4 2024): USD 1.166 billion
- Adjusted EBITDA Margin (Q4 2024): 15.5%
- Full Year Adjusted EBITDA (2024): USD 4.706 billion
- Net Sales (Q4 2024): Over USD 7.5 billion
- Adjusted Free Cash Flow (Q4 2024): Almost USD 260 million
- North America Sales (Q4 2024): USD 4.6 billion
- North America Adjusted EBITDA (Q4 2024): USD 710 million
- North America Adjusted EBITDA Margin (Q4 2024): 15.4%
- EMEA-APAC Sales (Q4 2024): USD 2.5 billion
- EMEA-APAC Adjusted EBITDA (Q4 2024): USD 371 million
- EMEA-APAC Adjusted EBITDA Margin (Q4 2024): 14.7%
- Latin America Sales (Q4 2024): USD 0.5 billion
- Latin America Adjusted EBITDA (Q4 2024): USD 121 million
- Latin America Adjusted EBITDA Margin (Q4 2024): Over 23%
- Capital Expenditure (2025 Estimate): EUR 2.2 billion to EUR 2.4 billion
- Dividend Per Share: USD 0.4308
- First Quarter 2025 Adjusted EBITDA Guidance: Approximately USD 1.25 billion
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Smurfit WestRock PLC (SW, Financial) reported a strong fourth quarter performance with an adjusted EBITDA of USD 1.166 billion and an adjusted EBITDA margin of 15.5%.
- The company delivered a combined adjusted EBITDA outcome of USD 4.706 billion for the full year 2024, consistent with their guidance.
- The merger of Smurfit Kappa and WestRock has created a global leader in sustainable packaging with over 500 converting facilities and 62 mills worldwide.
- The company has identified over $400 million in synergy opportunities, with confidence in meeting or exceeding this target by the end of the current year.
- Smurfit WestRock PLC (SW) has a strong balance sheet and is committed to maintaining a strong investment-grade credit rating, targeting a long-term leverage ratio of below 2 times through the cycle.
Negative Points
- The company has had to streamline operations, resulting in over 1,000 employees leaving the company.
- There are challenges in optimizing production and making difficult decisions to streamline assets, which can be disruptive in the short term.
- The company faces risks related to tariffs, particularly concerning its operations in Mexico and Canada, which could impact profitability.
- Energy prices in Europe are spiking, which could affect the company's cost structure if they continue to rise.
- The company is exposed to currency volatility, which can impact financial results, especially with the strong dollar affecting earnings translation.
