Smurfit Westrock Reports 2Q 2024 Financial Results

Smurfit Westrock plc announced the financial results for the second quarter ended June 30, 2024 of Smurfit Kappa Group plc. Due to the timing of the completion of the combination of Smurfit Kappa Group plc and WestRock Company, results for the combined company of Smurfit Westrock will be reported from the third quarter 2024.

Smurfit Kappa’s net sales decreased by $107 million, or 3%, to $2,969 million in the second quarter of 2024 from $3,076 million in the second quarter of 2023. This decrease was primarily driven by lower average box pricing in our European business year-on-year.

The decrease was partially offset by an increase in group corrugated volumes of 3.1% (1.1% on a shipments per day basis), a $28 million net positive foreign currency impact and a $4 million positive impact from acquisitions.

Net income decreased by $135 million, to $132 million in the second quarter, from $267 million in the same period of last year. This decrease was primarily due to a decrease in net sales and additional transaction-related expenses of $60 million associated with the Smurfit Westrock combination, which were partially offset by a $12 million decrease in costs of goods sold driven by lower raw material and energy costs year-on-year.

Adjusted EBITDA for the Group was $480 million, with an adjusted EBITDA margin of 16.2% in the second quarter of 2024, compared to adjusted EBITDA of $556 million, with an adjusted EBITDA margin of 18.1% in the second quarter of 2023.

“I am pleased to report a strong set of results, and continued delivery of quality and service for our customers,” said Tony Smurfit, president and CEO. “This has been driven by our performance-led culture, together with the continuing benefits of our prior year capital allocation decisions. These results were also achieved against a backdrop of significantly higher recovered fiber costs and lower corrugated box prices. We expect these increased costs will be recovered through increased box pricing with the customary time lag.

“Smurfit Kappa’s corrugated volume growth was 3.1% in the second quarter with 3.5% growth in Europe and 1.5% in the Americas year-on-year,” Smurfit added. “On a shipments per day basis, volume growth was 1.1% for the Group, with growth of 1.4% and 0.1% in Europe and the Americas respectively. Demand in Southern and Eastern Europe remained robust while German demand remained soft. In the Americas, demand was generally good, with the exception of Argentina.

“After the quarter end, on July 5, we completed our transaction with WestRock,” he concluded. “On July 8, Smurfit Westrock listed on the NYSE and was included in the S&P 500. While we don’t underestimate the amount of hard work ahead of us, there is tremendous energy and enthusiasm to ensure a successful future for Smurfit Westrock. I believe that with the quality of our people and the strength of our market positions, we are creating something truly unique. Smurfit Westrock will be the ‘Go-To’ sustainable packaging company with the right product, in the right space at the right time.”

Total borrowings amounted to $6,432 million at June 30, 2024, compared to $3,747 million at December 31, 2023. Net debt was $3,107 million at the end of June 2024, resulting in a net leverage ratio of 1.6x compared to 1.3x at the end of December 2023.