- **North America Turnaround**: 70% corrugated plants profitable vs 50% last year, $100M CRB-to-SBS business shift, and $810M EBITDA (17.2% margin).
- **Europe Resilience**: 14.8% margin with mills at mid-90s utilization, despite 500K+ tons of containerboard overcapacity.
- **Latin America Growth**: Colombia +8%, Chile +15%, Peru +25%, Brazil volumes neutral post-legacy contract exit.
- **2026 Capital Plan**: $2.4-2.5B CapEx for cost takeout, efficiency, and growth, with 50%+ IRR on Covington energy project.
- **Synergy Progress**: $400M run-rate savings on track, with commercial improvements driving margin expansion.

**【CEO Summary Section】**
- Delivered Q3 2025 adjusted EBITDA of $1.3 billion (16.3% margin), in line with guidance, despite challenging market conditions.
- North America: Adjusted EBITDA of $810 million (17.2% margin), driven by margin improvement and value-over-volume strategy. 70% of corrugated operations now profitable, up from 50% last year.
- Europe: Resilient performance with 14.8% margin, despite overcapacity. Mills running at mid-90s utilization rate.
- Latin America: Strong growth in Colombia (+8%), Chile (+15%), and Peru (+25%). Brazilian operations optimized with legacy contracts phased out.
- Global initiatives: Closed 9 facilities globally, rationalized 500,000 tons of containerboard capacity, and transferred $100 million of CRB business to SBS/CKU grades.
- Capital allocation: 2026 CapEx target of $2.4-2.5 billion, focused on cost takeout, efficiency, and growth.

**【CFO Financial Commentary】**
- North America: Net sales $4.7 billion, corrugated volumes down 8.7% (2/3 due to value-over-volume). Consumer packaging shipments down 5.8%.
- Europe: Adjusted EBITDA $419 million (14.8% margin), corrugated volumes flat. SBS price competitiveness driving $100 million business shift from CRB.
- Latin America: Adjusted EBITDA $116 million (21% margin), Brazil volumes neutral after legacy contract exit.
- Free cash flow: $579 million (Q3), guided to $4.9-5.1 billion full year EBITDA (down from prior $5.0-5.2 billion range).
- Synergy program: On track for $400 million run-rate savings by end-2025.

**【Q&A Highlights】**
- **Cost Takeout in Europe**: Running system at mid-90s capacity, no material incremental downtime expected. Focus on wage inflation mitigation and asset trimming.
- **Demand Trends**: North America saw no October uptick; Europe demand weak but improving in Iberian Peninsula and Brazil.
- **SBS vs CRB Shift**: SBS brightness, lower caliper, and printability driving $100 million business transfer. CUK freezer strength also a factor.
- **Inventory Management**: Working capital at 16% of sales (target 8-9%), improving through grade rationalization and supply chain optimization.
- **Energy Projects**: Covington mill coal-to-natural gas conversion with 50%+ IRR. Colombia biomass boiler coming online 2026.
- **2026 Outlook**: Economic downtime in Q4 to optimize system. Guidance reflects 2025 market down 3-4%, 50% from company-driven volume exit.

Smurfit Westrock Plc (SW) Q3 2025 Earnings Call Transcript

Revenue

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SW

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