International Paper's Q2 2025: Navigating Contradictions in Mill Reliability, Market Outlooks, and Strategic Investments

Mill reliability and strategic investments, 80/20 strategic thinking and capacity realignment, North America market outlook, and European market outlook are the key contradictions discussed in International Paper Company's latest 2025Q2 earnings call.



Transformation Progress and Market Performance:
- International Paper's second quarter revenue met expectations, with confidence in closing the market share gap in North America this year.
- The market share gap in North America peaked in Q4 2024 but is expected to close by Q4 2025, driven by known commercial wins.
- The company is holding its 2025 EBITDA guidance, supported by commercial and cost improvement efforts gaining traction.

Mill Reliability and Cost Management:
- The mill system in North America left approximately $150 million in profit on the table year-to-date due to reliability issues.
- International Paper is focused on improving mill reliability, with initiatives including the redeployment of capital from non-strategic assets to strategic ones.
- The company plans to accelerate investments in strategic assets to optimize performance and enhance profitability.

Commercial Growth and Market Recovery:
- International Paper has made progress in customer service and quality, with on-time delivery improving from 92% in Q4 to 97% in Q2.
- The company is focusing on strategic customer wins, particularly with large global accounts, to drive market share gains.
- Confirmed strategic wins are expected to ramp up in the second half of the year, contributing to the closing of the market share gap.

European Market Challenges and Recovery:
- In EMEA, box shipments slowed by 1% sequentially in Q2 due to macroeconomic volatility, but showed signs of recovery in June and July.
- International Paper is holding its 2025 EMEA market share despite the weak market, anticipating a moderate increase in demand by the fourth quarter.
- The company is focused on cost optimization and strategic customer growth in EMEA, with plans to streamline operations and eliminate layers in the reorganization.