WestRock positioned for ‘significant earnings growth’ as market recovery continues

In its first quarter 2024 earnings report, Atlanta-based paper and packaging company WestRock delivered what it says are “strong results” despite earnings being down compared with last year, adding that it continues to make “significant” progress on its cost-savings initiatives.

WestRock’s first quarter net sales were $4.73 billion, down from $5.28 billion in the first quarter of 2023, while its consolidated adjusted earnings before interest, taxes, depreciation and amortization were $618 million in the first quarter of 2024 compared with $789 million in the same period last year.

However, the company reports that its containerboard system exited the quarter running full, with only 32,000 tons of containerboard economic downtime taken during the period—primarily early on. WestRock also achieved a reported $160 million in cost savings and expects to exceed its previously announced target for the year of $300 million to $400 million.

“I’m proud of our team’s continued focus and execution as we delivered strong results and made significant progress on our cost-savings initiatives,” WestRock CEO David B. Sewell says in a statement accompanying the earnings report. “We have already exceeded the midpoint of our targeted cost savings for fiscal [year] 2024 and we expect further savings through the remainder of the year and beyond.”

In its consumer packaging segment, WestRock’s first quarter sales were $1.1 billion compared with $1.3 billion in the first quarter of last year, and adjusted EBITDA for the segment was $200 million compared with $219 million in 2023.

The segment did see a 4.8 percent increase in net organic sales volume sequentially, and WestRock expects improving demand trends in the second half of this year.

In its global paper segment, first quarter sales were $1.02 billion compared with $1.2 billion in the same period last year, while adjusted EBITDA in the most recently ended quarter came in at $130 million compared with $187 million in 2023.

WestRock’s containerboard shipments increased 28 percent year over year, however, driven by what the company says has been strength in exports. Its paperboard volumes also are up 15 percent quarter over quarter, and the company expects that trend to continue.

“Our efforts are better positioning us to compete in the market and making us a more efficient company,” Sewell says. “Together with our scale and innovative, sustainable packaging solutions, WestRock is well-positioned to capture share and drive long-term earnings growth.”

The company did not provide an update on the status of its merger with Smurfit Kappa, but in its own quarterly update this week, the Irish paper company said it anticipates the deal to be completed by early July.

WestRock’s full first quarter 2024 earnings presentation can be found here.