01—Abstract
Summary
Summary of the 10-Q filed May 9, 2025. Cited figures are marked; the original filing is the authoritative source.
Smurfit Westrock plc reported net sales of $7,656 milliona for the three months ended March 31, 2025, up from $2,930 million a year earlier.
The filing attributes the increase primarily to the acquisition of WestRock, which contributed $4,736 millionb of net sales. Excluding the acquisition, net sales decreased by $10 million, reflecting a $175 million negative foreign currency impact and a $43 million negative volume impact, largely offset by a $209 million positive selling price mix. Net income attributable to common shareholders was $384 million, compared with $191 million, and Adjusted EBITDA rose to $1,252 million from $475 million.
The effective tax rate fell to 2.1% from 28.5%, driven by the resolution of $72 millionc of unrecognized tax benefits. Balance sheet and cash flow data show total debt, excluding debt issuance costs, of $14,281 million and cash of $797 million at March 31, 2025. Operating cash flow was $235 million, capital expenditures were $477 million, and dividends paid were $225 million.
The company reports $5,630 milliond of available liquidity. Management concluded that disclosure controls were not effective because of a previously reported material weakness in internal control over financial reporting, which remains under remediation. Subsequent to quarter-end, the company announced the permanent closure of its St. Paul, Minnesota CRB mill and the discontinuation of production at its Forney, Texas containerboard mill, plus consultations on two German converting facilities.
The filing expects approximately $287 million of pre-tax charges for these closures, including $188 million of non-cash impairments, mostly over the remainder of 2025 and into 2026. The Board also approved a quarterly dividend of $0.4308 per share.
02—Key points
Key Highlights
- Net sales were $7,656 million, up from $2,930 million, driven mainly by the WestRock acquisition ($4,736 million impact).
- Net income attributable to common shareholders was $384 million, versus $191 million a year earlier; diluted EPS was $0.73.
- Adjusted EBITDA was $1,252 million, versus $475 million; North America segment Adjusted EBITDA reached $785 million.
- Interest expense, net rose to $167 million from $25 million, reflecting debt assumed in the Combination and April 2024 senior notes.
- Operating cash flow was $235 million; capital expenditures were $477 million and dividends paid were $225 million.
- Total debt was $14,281 million (excluding issuance costs) and available liquidity was $5,630 million at March 31, 2025.
- Announced mill closures in St. Paul, Minnesota and Forney, Texas, with about $287 million of expected pre-tax charges, including $188 million of non-cash impairments; disclosure controls were concluded not effective due to a material weakness.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Smurfit Westrock kept $0.05.
- Revenue$7.66B100.0%
- Cost of revenue−$6.08B79.4%
- Gross profit$1.58B20.6%
- Operating costs−$1.02B13.4%
- Operating income$553.0M7.2%
- Interest, other & tax−$169.0M2.2%
- Net income$384.0M5.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 9, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $7.66B$2.93B | +161.3% |
| Cost of Revenue | $6.08B$2.22B | +173.8% |
| Gross Profit | $1.58B$710.00M | +122.1% |
| SG&A Expenses | $973.00M$380.00M | +156.1% |
| Operating Income | $553.00M$307.00M | +80.1% |
| Net Income | $384.00M$191.00M | +101.0% |
| EPS (Basic) | $0.74$0.74 | 0.0% |
| EPS (Diluted) | $0.73$0.73 | 0.0% |
| Shares Outstanding (Basic) | 521.00M259.00M | +101.2% |
| Shares Outstanding (Diluted) | 526.00M260.00M | +102.3% |
05—Questions
Frequently Asked Questions
How did the WestRock acquisition change the company's financial results?
The filing attributes most of the year-over-year increase to the WestRock acquisition, which added $4,736 million to net sales and $3,930 million to cost of goods sold. Net sales excluding the acquisition decreased by $10 million, as a $209 million favorable selling price mix was offset by a $175 million negative foreign currency impact and a $43 million negative volume impact.
What are the expected costs of the recently announced facility closures?
The company expects aggregate pre-tax cash charges of about $99 million ($42 million severance and $57 million other restructuring) and pre-tax non-cash impairment charges of about $188 million. Of the total, $226 million is expected in the second quarter of 2025 and $61 million over the rest of 2025 and into 2026. The closures are expected to reduce containerboard and CRB capacity by over 500,000 tons annualized.
Why was the effective tax rate so low this quarter?
The effective tax rate was 2.1%, compared with 28.5% a year earlier. The filing states it was primarily impacted by the tax benefit from resolving $72 million of unrecognized tax benefits due to the lapse of the statute of limitations, plus the release of $24 million of accrued interest and penalties.
What material weakness does the company disclose, and is it being addressed?
Management concluded disclosure controls were not effective due to a previously reported material weakness in internal control over financial reporting, tied to controls at the historical Smurfit Kappa business that were not subject to SOX Section 404 before the Combination. Remediation is underway, including new control policies, an automated approval workflow for manual journal entries, and general IT control enhancements, but the company cannot yet estimate when remediation will be complete.
What dividend did the company declare and what is its outstanding debt position?
On May 1, 2025, the Board approved a quarterly dividend of $0.4308 per ordinary share, payable June 18, 2025 to shareholders of record on May 16, 2025. At March 31, 2025, total debt excluding issuance costs was $14,281 million, including $1,300 million of current debt and $12,919 million of non-current debt due after one year.
06—Continue