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Smurfit Westrock 8-K Report, Financial Results (Jul 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 30, 2024
Period End
July 30, 2024
Security
SW
In the record · 2024–202610-K210-Q98-K28

SW filed 2 annual reports (10-K), 9 quarterly reports (10-Q) and 28 current reports (8-K) between 2024 and 2026.

  1. Impairment8-K · Apr ’25Apr ’25
  2. Leadership change8-K · Feb ’26Feb ’26

01—Abstract

Summary

Summary of the 8-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Smurfit Westrock plc filed a Form 8-K on July 30, 2024 to furnish its second quarter 2024 earnings presentation (Exhibit 99.1) ahead of a conference call on that date.

The results cover the three months ended June 30, 2024. Per the presentation, these results include Smurfit Kappa but not WestRock Company, because the combination closed after the quarter ended. For Q2 2024, the presentation shows net sales of approximately $3 billiona, net income of $132 million (versus $267 million in Q2 2023), and Adjusted EBITDA of $480 million (versus $556 million), with an Adjusted EBITDA margin of 16.2% (versus 18.1%).

Adjusted Free Cash Flow was $186 millionb (versus $83 million), and the Net Leverage Ratio was 1.6x at June 30, 2024, up from 1.3x at December 31, 2023. Net debt rose to $3,107 million from $2,747 million, and cash and cash equivalents were $3,325 million at June 30, 2024, compared with $1,000 million at December 31, 2023. Transaction-related expenses associated with the Combination were $60 million in the quarter.

The presentation also includes unaudited combined information for Smurfit Kappa and WestRock for the six months ended June 30, 2024: net sales of $15.4 billionc, Adjusted EBITDA of $2.24 billion, an Adjusted EBITDA margin of 14.5%, and a Net Leverage Ratio of 2.5x. The company states this combined information is not prepared under Article 11 of Regulation S-X or on a consolidated U.S. GAAP basis, and that the final purchase accounting is not complete, so it may differ materially from future figures.

02—Key points

Key Highlights

  1. Q2 2024 net sales were approximately $3 billion, with Adjusted EBITDA of $480 million and an Adjusted EBITDA margin of 16.2%, compared with $556 million and 18.1% in Q2 2023.
  2. Q2 2024 net income was $132 million, down from $267 million in Q2 2023; the net income margin was 4.4%, compared with 8.7% a year earlier.
  3. Adjusted Free Cash Flow was $186 million in Q2 2024, versus $83 million in Q2 2023, after capital expenditures of $177 million in the quarter.
  4. The Net Leverage Ratio increased to 1.6x at June 30, 2024, from 1.3x at December 31, 2023, with net debt of $3,107 million and cash of $3,325 million.
  5. Transaction-related expenses associated with the Combination were $60 million in Q2 2024, compared with none in Q2 2023.
  6. Unaudited combined H1 2024 figures for Smurfit Kappa and WestRock show net sales of $15.4 billion, Adjusted EBITDA of $2.24 billion, and a Net Leverage Ratio of 2.5x, which the company says may differ materially from final accounting.
  7. The presentation highlights areas of focus post-close, including paper and fiber integration and procurement opportunities, and a capital allocation framework that includes a progressive dividend policy.

03—Questions

Frequently Asked Questions

  1. Why are the Q2 2024 results not directly comparable to a full combined company?

    The presentation states that, because the combination of Smurfit Kappa and WestRock was completed after the quarter ended, the Q2 2024 results include Smurfit Kappa but do not include WestRock Company. The combined six-month figures are presented separately as unaudited, non-GAAP information.

  2. How did profitability change in Q2 2024 compared with Q2 2023?

    Net income was $132 million versus $267 million, and Adjusted EBITDA was $480 million versus $556 million. The Adjusted EBITDA margin was 16.2% compared with 18.1%, and the net income margin was 4.4% compared with 8.7%.

  3. How has the company's leverage and liquidity changed?

    The Net Leverage Ratio rose to 1.6x at June 30, 2024 from 1.3x at December 31, 2023. Net debt increased to $3,107 million from $2,747 million, while cash and cash equivalents rose to $3,325 million from $1,000 million. Adjusted Free Cash Flow was $186 million in Q2 2024.

  4. What are the company's stated capital allocation priorities?

    The presentation lists capital expenditure, dividends, balance sheet strength, and other shareholder returns as components of capital allocation. It describes a disciplined, returns-based approach, a progressive dividend policy as a key component, a strong investment-grade credit rating as a goal, and value-accretive M&A.

  5. Are the combined six-month 2024 figures audited or prepared under GAAP?

    No. The presentation states that the combined information for Smurfit Kappa and WestRock for the six months ended June 30, 2024 is the unaudited sum of each company's individual amounts. It is not prepared in compliance with Article 11 of Regulation S-X or on a consolidated U.S. GAAP basis, and the final acquisition accounting is not complete, so it may differ materially.

04—Continue

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