“WestRock had a very good second quarter, with solid operating results highlighted by the significant margin improvement in our Consumer Packaging segment,” said Steve Voorhees, CEO of WestRock. “We delivered strong financial performance and made progress on the achievement of our synergy and performance improvement goals by realizing $350 million in annual run-rate savings as of the end of the second quarter. Our performance this quarter further demonstrates the success of our differentiated strategy that is creating value for our customers and stockholders. We continue to expect to generate between $950 million to $1 billion in free cash flow during fiscal 2016.”
On July 1, 2015, Rock-Tenn Company and MeadWestvaco Corporation completed a strategic combination of their respective businesses. After completion of this transaction, RockTenn and MeadWestvaco became wholly-owned subsidiaries of WestRock. RockTenn was the accounting acquirer in the transaction. WestRock’s consolidated financial statements include the consolidated results of the new company, WestRock, for periods following the transaction.
The financial results below as well as those under the heading Segment Results illustrate the performance of WestRock for the quarter ended March 31, 2016, and the combined performance of RockTenn and MeadWestvaco (as described above) for the quarter ended March 31, 2015 (in millions).
Net sales declined $41 million compared to the combined prior year period. The decline was primarily attributable to the impact of $51 million of foreign currency, $31 million of lower Consumer Packaging net sales due to MeadWestvaco’s sale of its European tobacco converting business in April 2015 prior to the merger, and $33 million of lower Specialty Chemicals net sales, excluding foreign currency, which were partially offset by $16 million of higher Land and Development net sales.
In addition, approximately $134 million of net sales related to the recent acquisitions (SP Fiber, Cenveo and the Carolina brand) which were partially offset by $76 million in declines in volume, price and mix in Corrugated and Consumer Packaging.
Corrugated Packaging sales were $1,932.8 million, up $11.8 million over the combined perfomance in 2015. Consumer Packaging sales were $1,588.4 million, a decrease of $31 million from 2015. Specialty Chemicals segment sales were $203.9 million, a decline of $35.3 million from 2015.