01—Abstract
Summary
Summary of the 8-K filed September 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Smurfit Westrock plc filed a Regulation FD disclosure furnishing supplemental, unaudited historical segment financial information on a combined basis.
The Combination of Smurfit Kappa Group plc and WestRock Company was completed on July 5, 2024, under a transaction agreement dated September 12, 2023. Smurfit Kappa acquired by Smurfit Westrock through a scheme of arrangement, and WestRock was acquired through a merger with Sun Merger Sub, LLC. Both became wholly owned subsidiaries of Smurfit Westrock.
Beginning with the third quarter of fiscal 2024, the company will report three segments: Smurfit Westrock Europe, MEA and APAC; Smurfit Westrock North America; and Smurfit Westrock Latin America. The combined figures are simple totals of the unaudited amounts for each legacy company. They are not prepared under Article 11 of Regulation S-X or on a consolidated U.S. GAAP basis, and the company states they may differ materially from final acquisition accounting and future reported results.
Adjusted EBITDA is the company's segment profitability measure under ASC 280. For the three months ended June 30, 2024, combined net sales were $7,777 milliona and combined Adjusted EBITDA was $1,145 million, compared with $8,197 million and $1,372 million for the three months ended June 30, 2023.
North America Adjusted EBITDA was $660 millionb versus $815 million a year earlier, and Europe, MEA and APAC Adjusted EBITDA was $402 million versus $486 million. Latin America Adjusted EBITDA rose to $129 million from $108 million.
02—Key points
Key Highlights
- The Combination of Smurfit Kappa and WestRock was completed on July 5, 2024, with both companies becoming wholly owned subsidiaries of Smurfit Westrock plc.
- Smurfit Westrock will report three segments starting with the third quarter of fiscal 2024: Europe, MEA and APAC; North America; and Latin America.
- Combined net sales were $7,777 million for the three months ended June 30, 2024, compared with $8,197 million for the three months ended June 30, 2023.
- Combined Adjusted EBITDA was $1,145 million for the three months ended June 30, 2024, compared with $1,372 million for the same quarter of 2023.
- North America Adjusted EBITDA was $660 million for the three months ended June 30, 2024, versus $815 million a year earlier, the largest year-over-year decline by segment in the table.
- Latin America Adjusted EBITDA increased to $129 million for the three months ended June 30, 2024, from $108 million for the same quarter of 2023.
- The exhibit figures are unaudited, are not prepared under Article 11 of Regulation S-X, and may differ materially from final acquisition accounting and future reported results.
03—Questions
Frequently Asked Questions
What transaction did this filing address?
The filing discusses the Combination, completed on July 5, 2024, in which Smurfit Westrock acquired Smurfit Kappa through a scheme of arrangement under Irish law and Sun Merger Sub, LLC merged with and into WestRock Company. Both companies became wholly owned subsidiaries of Smurfit Westrock plc.
How will Smurfit Westrock report its segments going forward?
Starting with the third quarter of fiscal 2024, the company will report three segments: Smurfit Westrock Europe, MEA and APAC; Smurfit Westrock North America; and Smurfit Westrock Latin America. The North America segment covers the United States, Mexico and Canada, and the Latin America segment covers all other countries in the Americas. Legacy WestRock business is included in these segments on a corresponding geographic basis.
What do the combined historical figures in Exhibit 99.1 represent?
They are the totals of unaudited amounts for Smurfit Kappa and WestRock for the periods shown, presented on the new segment structure. The filing states they are not prepared under Article 11 of Regulation S-X or on a consolidated U.S. GAAP basis, and that they may differ materially from final acquisition accounting and future reported results.
How did combined Adjusted EBITDA trend across the periods shown?
Combined Adjusted EBITDA was $1,405 million for the three months ended March 31, 2023, $1,372 million for June 30, 2023, $1,263 million for September 30, 2023, $1,019 million for December 31, 2023, $1,097 million for March 31, 2024 and $1,145 million for June 30, 2024. Adjusted EBITDA is defined in the filing as net income before taxes, interest expense, net, depreciation, depletion and amortization, and several other specified items.
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