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Sylvamo Corporation Stock Price: Quote, Forecast, Splits & News (SLVM)

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Company Profile

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Sylvamo Corporation Price & Performance (SLVM)

Stock Performance

Updated Mar 21, 8:00 PM UTC

SLVM:NYSE

$65.36USD

0.68% · $0.45

After Hours

+2.29% · $1.50

Open

$65.12

High

$65.52

Low

$64.03

Market Cap

$2.65B

P/E Ratio

9.1

Volume

3.67M

Year High

$98.02

Year Low

$56.35

Dividend Yield

2.52%

News & Market Insights

Proficio Capital Partners Acquires Stake in Sylvamo
Mar 21, 2025
Proficio Capital Partners LLC has purchased a new stake in Sylvamo Co. during the fourth quarter, acquiring 16,278 shares valued at $1.29 million. This move follows increased activity by institutional investors in Sylvamo, as the company continues to attract attention with its dividend yield of 2.74% and steady financial metrics.1
Sylvamo CEO Reduces Stock Holdings
Mar 12, 2025
Jean-Michel Ribieras, Sylvamo’s CEO, sold 21,250 shares of the company’s stock under a pre-arranged trading plan, totaling $1.39 million. Despite this, he retains significant ownership and continues to lead a firm with strong financial health, including a 35% return on equity and a recent $145 million investment in operational upgrades.2
Sylvamo's Stock Faces Pressure Amid Strong ROE
Mar 20, 2025
Sylvamo’s stock has declined 16% this quarter despite a robust 36% return on equity. Analysts note the company’s ability to generate shareholder returns but express concerns over limited earnings growth. While dividends remain consistent, forecasts suggest potential challenges ahead, reflecting broader market trends and internal financial dynamics.3

What's Happening

Peers

Earnings

Report Date

Feb 12, 2025

Reported Revenue

970M

Avg 1d Change

7.3%

Report Period

Q4 2024

Reported EPS

1.94

Implied Move 1d

7.18%

Transcript

11m 2s

I'll start on Slide four. 2024, we generated 23% return on invested capital as we executed our strategy and strengthened our competitive advantages in our core and coated free sheet market. We improved our financial position by repaying $14,054,000,000 dollars in debt achieving a net debt to adjusted EBITDA of 0.9x. We earned $632,000,000 in adjusted EBITDA generated $248,000,000 in free cash flow and returned $130,000,000 in cash to shareholders. We reinvested $221,000,000 across our manufacturing network and our Brazil forest land strengthened our low cost position.

11m 54s

We are committed to being the investment of choice and believe we can generate significant shareholders returns in the future by executing our strategy. Slide five highlights our 2024 full year key financial metrics. Adjusted EBITDA was $632,000,000 with a 17% margin. Our $248,000,000 of free cash flow was more than $6 per share, Our adjusted operating earnings were $7.42 per share, which is 14% higher than 2023.

12m 33s

We now have three full years under our belt since becoming an independent And our financial results have established a solid track [indiscernible] And are indicative of our ability to navigate tough industry conditions challenging geopolitical events and other uncertainties that we may face. As we enter 2025, we are confident in our ability to continue to create value for customers and shareholders. Let's move to Slide six. We had very strong cash generation to finish the year. This allows to pay down additional debt reinvest in our business and return cash to shareholders. Our teams collaborated well with customers to manage through a successful transition, as a result of the Georgetown mill closure. I want to thank our employees for their hard work and execution as we navigated through the transition. I also want to thank our customers for the trust they place in us each and every day. We are committed to remain the supplier of choice and we'll work hard to earn and retain the business. Lastly, regarding Project Horizon, our cost reduction program to streamline manufacturing to biogen and overhead costs we exceeded our €110,000,000 year end run rate saving goals by £34,000,000 John will cover this in more detail in a few slides.

14m 11s

Let's move to the next slide.

14m 18s

Slide seven shows our fourth quarter key financial metrics. We earned adjusted EBITDA of 157,000,000 with a margin of 16%. Free cash flow generation was $100,000,000 as we generated adjusted operating earnings of 1.9 per share I'm proud of how our teams delivered impressive results while taking care of our customers.

14m 44s

More importantly, I'm proud of our team's commitment to putting people before paper to ensure everyone returns home safe at the end of each day.

14m 54s

We are focused on building a resilient safety culture by involving every team member in our efforts to proactively eliminate risk and create a safer environment for everyone. [indiscernible] [indiscernible] John will review our performance in more detail.

15m 14s

Thank you, John Massil, and good morning, everyone. Slide eight contains our fourth quarter earnings bridge versus the third The $157,000,000 of adjusted EBITDA was in line with our outlook of $150,000,000 to $165,000,000 Price and mix was unfavorable by $18,000,000 40% of this was driven by lower pulp and paper pricing in Europe, and about 30% was due to worse mix in North America. Volume increased by $6,000,000 driven by the seasonality in Latin America Operations and other costs were stable due to favorable FX and less economic downtime in North America. Which more than offset the planned ten year turbine generator maintenance event at our Easter mill that we highlighted on our last earnings call.

16m 5s

We also hit some one time event some planned like an insurance settlement and others like a LIFO adjustment. Planned maintenance outages cost four planned outage at the East River Mill in the quarter.

16m 21s

Input and transportation costs increased by $9,000,000 driven by transportation and seasonally higher energy prices. Moving to Slide nine. A core pillar of our strategy is a low cost producer.

16m 40s

Project Horizon our cost reduction program to streamline manufacturing supply chain and overhead costs is helping us to stay low cost. As Jean Michel mentioned earlier, before inflation, we exceeded our $110,000,000 year end run rate savings goal by $34,000,000 We beat our manufacturing savings targets by delivering results on over 180 initiatives across all three regions. These projects targeted chemical, energy and fixed cost reductions as well as improving fiber efficiency and productivity. We surpassed our supply chain savings targets by reducing approximately 20% of our distribution centers in North America optimizing seating, and rewinding outsourcing processes as well as other initiatives across our network. We executed all these initiatives while maintaining our focus on the customer experience. As we mentioned several quarters ago, we eliminated about 150 salary positions or 7% globally. These collective efforts are making us a leaner, stronger company. Let's move to Slide 10. Another important part of our strategy is to reinvest in high return projects to strengthen our competitive advantages and increase future earnings and cash flow.

18m 10s

Here are two examples at one of our flagship mills in Latin America a Luis Antonio mill. Where we are already seeing positive results. The first project increases our self generation of power at the mill by upgrading the turbine and gearbox one of our turbine generators. This was a $7,000,000 investment that started up in the third quarter of twenty twenty four and is showing approximately a 25 The second project reduces our production waste. By installing a new real transition system on one of our paper machines. This was a $1,000,000 investment that also started up in the third quarter of twenty and has a yielding approximately 40% internal rate return.

18m 58s

These are just a few of the many high return projects that we were assessing and implementing to make us more competitive in the future. Let's go to Slide 11 and look at our first quarter outlook. We expect to deliver first quarter adjusted EBITDA of $85,000,000 to $105,000,000 dollars We project price and mix to be unfavorable by $10,000,000 to $15,000,000 This is due to paper price decreases in Europe and in our Brazilian export regions. Plus seasonally unfavorable mix in Latin America.

19m 35s

These decreases are projected to be partially offset by realization on paper price increases communicated to customers in North America and We should see higher realization from these increases in the second quarter. We expect volume to be unfavorable at $20,000,000 to $25,000,000 due to seasonally weakest demand quarter in Latin America and lower North America volume from the Georgetownville exit. Operations and other costs are projected to be [indiscernible] to slightly up as our Project Horizon initiatives offset the non repeat favorable fourth quarter events. We expect input in transportation costs to increase by $5,000,000 to 10,000,000 primarily due to seasonally higher energy prices, and the longer than expected extreme cold weather across The United States, so far this quarter. Planned maintenance allergies are projected to increase by $15,000,000 We expect quarterly earnings to improve throughout the year as we benefit from seemingly stronger volume less maintenance outage expenses in the second half of the year, and realize the price increases we are currently implementing. You should note on appendix slide forty four and forty five that about 80% of our planned maintenance outages will be in the first half of this year.

21m 2s

Let's go to Slide 12.

21m 10s

Yes, just now to talk about overall industry conditions across our region. In Europe, we're seeing improved order book and industry supply was reduced by 7% after two uncoated free sheet machines closed last year.

21m 24s

Pulp and uncoated free sheet prices have also stabilized as we are entering the New Year. In Latin America, we expect seasonally weaker industry demand in the first quarter and expect demand to be sequentially stronger in each calendar quarter [indiscernible] every year, In Brazil, we are currently seeing strong demand for back to school orders and notebooks.

21m 50s

We previously communicated coded free sheet price increases to our customers in Brazil effective in January we are seeing uncoated free sheet pricing pressure for our Brazilian papers export to other Latin America and offshore markets. In North America, we are seeing slightly lower industry demand in line with our expectations. Domestic industry supply was reduced by 10% after a few machines closed in the second half of last year. We previously communicated uncoated free sheet price increases to our North American customers effective in January. Globally, pulp industry conditions appear to be stabilizing or anticipated to improve over the course of the year. I'll turn back over to Zon Michel, pick up on Slide 13.

22m 41s

Thanks, John.

22m 44s

We have generated substantial cash since our inception. And have allocated over 1,800,000,000.0 as you can see on this slide. Of 70% of this cash was used to repay debt and reinvest in our business. After starting out with over $1,500,000,000 in growth debt, we have reduced it by almost 50%. And have achieved a net debt adjusted EBITDA ratio of 0.9 by the end of twenty twenty four. Keeping a healthy financial position, is a cornerstone of our capital allocation framework. This allows us to invest in our business to strengthen our competitive advantages to the cycle and to increase future earnings and cash flow. As most of you already know, many people are investing to get out of uncoated rupees. We have reinvested over $600,000,000 in our business the last three years, in order to improve our competitive position. One of the main advantages we have as an independent company is that it allows us to invest in our future. In a way that we could not do before. Improving our financial police [indiscernible] [indiscernible] us to return almost $350,000,000 to shareholders to dividends and share repurchases. We will continue to look for opportunities to repurchase shares at attractive We have generated substantial cash over the past three years and plan to continue to do so moving forward. 2025, we are planning $220,000,000 to $240,000,000 in capital spending.

24m 36s

Our outlook includes approximately $125,000,000 in net and regular spending Our Brazil for Iceland are significant competitive advantage. These Egaloptois plantations provide a material cost advantage relative to most other global competitors. We plan to invest roughly $35,000,000 in our to increase our efficiency and reduce wood costs Additionally, we will complete the €30,000,000 three years wood supply agreement to ensure a decoupling wood supply from 24% to 26. As we have been saying for several quarters, we will continue to ramp up our high return projects strengthen our low cost asset to increase our earnings and cash flow. This year, we expect to invest $50,000,000 to $70,000,000 for high return projects. [indiscernible] Speaking of reinvesting in our low cost asset, we're excited to announce that we're investing in the future of what our flagship mills East Of The South Carolina We have three high return projects that will reduce cost while improving efficiency and mix of the most competitive uncoated free sheet mill in North America. First, we're investing to optimize one of our two paper machines. Second, we are increasing our next distinct cut size sheater with a brand new sheater.

26m 16s

These first two projects will require total investment of approximately 145,000,000 over the next three years. The spending will start this year with majority occurring in 2026. Once completed, this combined investment should have an internal rate of return of greater than 30%. This should create incremental adjusted EBITDA of more than $50,000,000 per year. Resulting in additional cash flow as well.

26m 49s

Third, we're partnering with an industry leader in wood yard operations. To modernize our wood yard and improve our efficiency. While avoiding about $75,000,000 in capital over the next five years. This is a very exciting moment for all of us.

27m 8s

I'll turn it to John to discuss these higher return projects in more detail.

27m 15s

Thank you, Jean Michelson. This is exciting I'm on Slide 16. The first of these high return projects at our flagship East River mill will be to optimize one of our two paper machines, modernizing it is the same world class level as our other paper machine at Eastover.

27m 32s

We plan to make investments starting at the head box continuing all the way down paper machine through the forming press and dryer section including modifications to the winder at the end of the machine. These enhancements will allow us to reduce costs improving our product mix across both paper machines, This deep bottlenecking should result in up to an incremental 60,000 tons of uncutted free sheet. The project has an investment of approximately $100,000,000 over the next three years with an expected start up in the fourth quarter of twenty twenty six. Let's turn to Slide 17. The second high return project will be to replace an existing seater with a state of the art cut size seater. This new and more efficient seeder will lower our seeding costs up to 15% reduce waste by maximizing paper machine trim while providing incremental cut size volume capability. This seater will allow us to reduce outsource seating while providing better reliability and additional flexibility to better service our customers.

28m 43s

This $45,000,000 project is expected to start up in the fourth quarter of twenty twenty six. Let's turn to Slide 18. And the third high return project at Eastover will be to improve our wood yard efficiency through innovative modernization. We are entering into a twenty year partnership with an external provider the Price Company, who is an industry leader in wood yard operations. They design, finance and operate the most efficient woodyards in the world. They will invest the capital to upgrade our woodyard, and they will also operate and maintain the wood yard at the Eastover mill. This will result in more efficient, reliable and cost effective wood processing operations. This project will greatly improve the overall reliability of our operations by replacing our aging wood yard equipment. As Jean Michel mentioned earlier, this project will enable us to avoid spending about $75,000,000 in capital over the next five years. The anticipated start up is in the first quarter of twenty twenty six.

29m 53s

These high return projects reinforce our commitment to reinvest to strengthen our low cost assets to increase earnings and cash flow. I'll now turn it back over to Zong Yoon. Thanks, John. I'm on Slide 19.

30m 9s

We strive to create long term shareholder value by executing our and delivering on our investment thesis. Since becoming an independent company, just over three years ago, we Yeah. The total shareholders return up almost 150% and over $2,000,000,000 in adjusted EBITDA generated over $900,000,000 in free cash flow reduced debt by almost $725,000,000 reinvested over $600,000,000 to strengthen our business and returned almost $350,000,000 in cash to shareholders. I'll conclude my comments on Slide 20.

30m 53s

I continue to be impressed with our we work to take care of our customer needs and remain the supplier of choice. We are reducing our cost structure and are reinvesting in our business through a great pipeline of high return capital projects. Which will enable us to grow our earnings and cash flow in the coming years. It's Brammer's creating shareholder value through strong cash generation and disciplined capital allocation. We believe in the promise of paper for education, communication and entertainment. And we intend to increase our competitive advantages in the regions we serve. We're confident in our future and motivated by the opportunities that lie ahead. With that, I'll turn the call back to Hans. Thanks, Jean Michel, and thank you, John. Okay, Audra, we're ready to take questions. And we'll take our first question from George Staphos at Bank of America.

32m 9s

Thanks so much, everyone. Good morning. Thanks for the details. My two questions and congratulations on the progress over the last few years. My two questions. First of all, Can you talk a little bit about What impact of pricing that might be in the process of being implemented, is in your guidance for the first quarter. If anything at all or is all of that pricing more or less locked and loaded from prior efforts. And then if I go to slide eight, I believe, and we look at volume you touched a little bit on it, but volume was a little bit weaker than what you've been looking for in the fourth quarter. Can you give us a bit more detail on what was going on there? You, guys.

33m 2s

Yes, George and thank you. To your first question, actually the so we have two price increases that we've announced to our customers we mentioned one in Brazil. Remember Brazil, so that's about 50% of our volume down in LatAm. And one in North America.

33m 19s

And we're in the process of implementing that in the first quarter. Because we are implementing, I can't give you a lot of details, but I can say that the realization because of the timing of those it's going to be more in the second quarter and very little in the first quarter than our outlook. The second question in terms of the volume, volume was lower than what we expected really across all the regions. Mostly in North America. [indiscernible] that's really the difference between our outlook and the actual results.

33m 52s

I guess, John, why was it a little bit weaker in North America than the other regions? If you had a view, I'm sorry, keep going.

34m 2s

George, we have a little bit lower in the commercial printing and envelope market. I think the cut size, the copy paper business was actually stronger than what we expected, but it was more so in the printing area.

34m 16s

Okay. That makes sense. We had in North America to be hi, Michel. Thanks for joining. Hi, Michel.

34m 25s

In North America, we had [indiscernible] November, I think we didn't anticipate it well enough all the holidays and the impact it had So we had as planned October and December months, but November was below.

34m 40s

Okay.

34m 41s

You. I'll go back to queue. We'll take our next question from Matthew McKehler at RBC Capital Markets.

34m 51s

Hi, good morning. Thanks for taking my questions. Like to start by asking about [indiscernible] it's U. S. Were to apply sustained 25% tariffs on goods from Canada and Mexico, and they in turn applied retaliatory tariffs on The U. S, How do you think your business would be affected? And what would be your response in that scenario?

35m 13s

So thanks for joining the call, first of all. This is still very difficult to assess. To be very honest.

35m 20s

I think the 25% on aluminum and steel would have some impact that we've anticipated potentially on some of the equipment we buy. Because the steel or aluminum might get more expensive in The U. S. In general. But that's not material for us. I would not be too worried about that. The rest with Canada, Mexico, if it was to happen, it's more a question of what is the retaliation we're going to get. I don't think it's going to impact us really at all if there is no retaliation. But as of now, if those tariffs were to put in place, we don't know what Canada or Mexico will do And that's the question, Marc, I don't have the answer.

36m 8s

Okay. Thanks for that color. Maybe shifting to Latin America, I think you mentioned seeing some positive trends in demand in Brazil.

36m 19s

Also like to ask about your expectations for demand through the textbook order this year. And maybe putting it all together, What that implies for how your volumes and mix kind of evolve through 2025 and maybe put differently, do you expect the seasonality we typically see LatAm to be exaggerated this year with a bigger ramp through the year than usual, driven by a more significant shift in mix, maybe especially given the price in Brazil are going up and you called out prices in the export channel as being under some pressure?

36m 49s

Yes, Matthew, I think one of the questions you asked is just around the textbooks and the school business. So I heard that correctly, yes, we're seeing improved order books demand for that down in Brazil. You got to remember in Brazil, last year demand was down So that does impact us from a negative mix less into Brazil, This year, we're seeing it up flat to slightly up and we expect as we said that that Brazil and also LATAM markets will sequentially increase throughout the year So that's going to be positive from a volume perspective, but also very positive from a mix perspective. And that will start to really materialize itself more as the year goes on second and third quarter.

37m 43s

Thanks. That's helpful. Turn it back.

37m 53s

We'll go next to Daniel Harriman at Sidoti.

37m 58s

Hey guys, good morning. Thanks for taking my question. Just a quick one here today for me. Can you help us a little bit with the cadence of your capital spending in 2025 within that range?

38m 9s

Of $220,000,000 to $240,000,000 should we expect more or less that CapEx to kind of follow the cadence that it did in 2024?

38m 20s

Yeah. Dan, are you talking about for joining Daniel. Are you talking about in terms of the timing of the is that what you mean by?

38m 28s

Yes, just how should we think about it being spread out throughout the year on a quarterly basis?

38m 34s

Yes. And I think the way to think about that is, more heavily weighted to the first half because you can see 80% of our outages are in that.

38m 44s

Now with the spending for pending that we'll do on the Eastover projects that we talked about that will occur throughout the year. Not really tied to the outages as we prepare for that implementation in 2026.

39m 2s

Okay.

39m 7s

This year particularly, it's probably one of the most extreme we've had in terms of timing of outages first half versus second half which is part of our earnings growth where we have a hockey stick You have 80% of our outage spending in the first half of the year versus 20% only in the second half. So that's a big component to take into consideration. Thanks so much, Graham. So Dan, we did we do look at the monthly spend, the projections that we have and as we forecast, it's really not much different than what we had last year in terms of the the monthly spend on capital. Okay.

39m 50s

That's helpful. Thank you. We'll move next to Dirk Staphos with Bank of America. Hi, guys. Thanks for taking the follow on. My next two can you talk a little bit about how the cost curve is shifting in Europe Certainly, pulp prices stabilize early. It looks like that in a few markets, but it was a declining situation second half. What did that mean for the cost curve and ultimately pricing and your market shares in the region The related question, what do you think the industry operating rate is in Europe right now? Thank you.

40m 35s

Yes, George, I think when we take a look at the cost curve, it's it has certainly moved up [indiscernible] the Russian invasion into Ukraine And that's really driven With that, has driven increased energy costs gas costs, as well as wood The wood cost we've seen go up across the region If you look at Dave pricing, that's what we looked at Europe uncutified free sheet pricing is stabilizing because about 20 or so, maybe even more a quarter of the The cost curve is is right now the pricing is below the cash cost. So right now, we got about 20%, 25% of the capacity that even with the pulp prices where they are today, which is cost that's above the current pricing. In Europe In terms of the operating rate, it has improved. Because of the the outages or because of that closures that occurred Yes. And so it's in the mid-80s right now.

41m 56s

Including the the 10% I think you said reduction from closures.

42m 1s

That's right.

42m 2s

Including that. And John, just a point of clarification, I'll turn it over.

42m 7s

So your view is a cost curve actually is up over the last quarter, two quarters in Europe or it's more or less stable and certainly up over the last several years because of Ukraine and the like?

42m 20s

It's a latter. I mean, with the decreasing pulp prices, you can say that maybe quarter sequentially quarter slightly down, but overall the cost curve is [indiscernible] increased, if you will, gotten higher cost [indiscernible] Thank you, John. I'll turn it over.

42m 42s

And we'll take a follow-up from Matthew McKellar at RBC.

42m 47s

Thanks very much. I'm just following up on an earlier response I think you mentioned you saw lower commercial printing in envelope volumes in North America in the quarter.

42m 57s

Maybe you're anticipating wanted to, I guess, get a little bit more color on that. Have you seen any kind of rebound in volumes maybe start Q1 or whether maybe you're expecting to see some more permanent kind of demand destruction maybe on the back of higher postal rates or any other [indiscernible] No, I think we don't see that as a systemic issue. Issue. We see that coming back and our projections are for North America that demand will be down about 3%. The historical trend that we have been seeing or we haven't been seeing really because of the inventory corrections that we've generally been seeing over the industry. So nothing different The norm Okay.

43m 50s

Thanks for that. And if I could just sneak one more in on the Eastover Woodyard operations. Of course, your partner will be laying out some capital and going to be avoiding spending your own capital. You also mentioned more efficient, reliable and cost operations I guess with this agreement, how should we think about the impact to operating costs at these for both in [indiscernible] how things progress over the the longer term, just specific to what you've announced with [indiscernible] [indiscernible] that a huge impact in cost. It's avoidance of capital spending, the first thing And then the yield and all of that we continue to put our wood, which is very competitive even more competitive once transformed at the mill. It's a small impact We'll take every penny. It counts everything in this industry. It's a small impact in the cost side.

44m 48s

Better reliability, flexibility and avoidance of capital. That's the way I will look at it.

44m 56s

Okay. Thanks for the help. Turn it back. And we'll go back to George Tafos at Bank of America.

45m 11s

Thanks guys. I wanted to piggyback off of of Matt's question. So what does your partner get from you in exchange for operating the Woodyard, if you can talk about the terms there? Second question, penciling it out free cash flow for the first quarter looks to be on our math kind of neutral to maybe up $20,000,000 I don't know if you called it out actually in the deck or the release. If you did, I apologize for missing it. But if you could sort of give us some thoughts there.

45m 41s

And then I'll turn it over and come back into queue.

45m 47s

Yes, I think to your first question, George, we're not going to really disclose the terms of the agreement other than what we said, it's a twenty year agreement. We are paying them to service the Woodyard. And the way Jean Michel talked about it, we're going to get some efficiencies on yield, but that's going to pay [indiscernible] The service fee that we're charging them, so the big benefit there is is really the capital avoidance because they will be investing installing the equipment and maintaining the equipment in the wood yard which will significantly modernize it.

46m 24s

So that's That's how that's going to work.

46m 29s

And on free cash flow?

46m 32s

All right. I'm sorry, you're going to have to repeat your question again. John, as I was penciling it out, and I don't know if you've actually mentioned in the deck or the release, if you did, I missed it. I'm kind of coming out with sort of flat to up $20,000,000 on free cash flow the first quarter could you give us some thoughts on that? Yes. I'm sorry, I didn't remember that question. But yes, we don't George, we don't give any guidance on On free cash flow, Just one thing I would say is like 24, I would expect a 25% with a seasonal stronger cash flow in the second half than first half. And remember in the first half, especially first quarter, we've got this allergies in Europe, which impact the cash We've got the annual incentive compensation and customer rebates. So we've got quite a one time seasonal cost in Q1 versus the rest of the quarters. [indiscernible] it's I won't get exact number, but it might be more pressure than you have in your numbers.

47m 40s

Yes, the first quarter is always more challenging terms of cash flow.

47m 46s

No worries for the year, it's just this timing. Understood.

47m 50s

Hey guys, maybe I'll throw my last two in here, if it's okay. Tax rate kicks up a little bit 28% to 29%, what's in that?

47m 59s

And could you give us my last question, what was the effect of the one timers in the quarter? That I know you'll be offsetting with Horizon the first quarter, but what was kind of that [indiscernible] the question on the taxes, we had a benefit last year. We bought some credits that we were able to use and so that lowered our tax So we're not going to have that repeat right now. We're going to be continuing to look at that, but that's not in our outlook. And the other thing is lower earnings in Europe And so that increases our our tax overall tax rate because we have less earnings in Europe Okay. And one timers?

48m 52s

From 4Q? One timers, yes. So specifically, we had $5,000,000 insurance payment that we got in the fourth quarter, LIFO was about $7,000,000 Okay. Thanks very much.

49m 12s

I'll now turn the call back over to Hans Bjorkman for closing comments.

49m 17s

All right. Thank you. Before we close-up, I'm going to let Jean Michel kind of wrap up call today.

49m 22s

Yes. So thank you everybody for joining. Exciting times and we're right in our strategy about investing in our high return projects One thing for 2025 is I don't intend to give you numbers on the annual earnings guidance, but with all the uncertainty of the macro and the geopolitical and be prudent, but on a high level color, if you look at 25% versus 24%, both in North America and Latin America, we plan a slightly better 25% than 24%. On adjusted EBITDA. For Europe, [indiscernible] $35,000,000 incremental maintenance outage we plan to be worth than 24,000,000 So I'm putting that with some salt, of course, because as you mention all tariffs and macro is very difficult to forecast And it's not an exact number, but it gives you a trend, which I hope helps you. As we mentioned, we expect our quarterly earnings to improve through the year due to three main factors. Seasonality, strong volume, realization of the price increase in North America and Brazil and less maintenance allergies In this second half of this year. So with that, I thank you for joining the call. And have a good day.

50m 57s

You may now disconnect.

Key Insights

SLVM achieved a 23% return on invested capital in 2024, repaid $14.05 billion in debt, and achieved a net debt to adjusted EBITDA ratio of 0.9x. Adjusted EBITDA was $632 million with a 17% margin, and $248 million in free cash flow was generated.
The company exceeded its Project Horizon cost reduction program goals, achieving €144 million in year-end run rate savings, surpassing the €110 million target. This included over 180 initiatives targeting cost reductions and efficiency improvements.
SLVM announced high-return projects at its Eastover mill, including a $100 million paper machine optimization and a $45 million cut-size sheeter replacement, both expected to start in Q4 2026. These projects are projected to generate over $50 million in incremental adjusted EBITDA annually.
For Q1 2025, SLVM expects adjusted EBITDA of $85 million to $105 million, with unfavorable price/mix impacts of $10 million to $15 million and volume impacts of $20 million to $25 million due to seasonality and the Georgetown mill exit. Quarterly earnings are expected to improve throughout the year.
The company plans $220 million to $240 million in capital spending for 2025, with a focus on high-return projects and efficiency improvements. Management anticipates slightly better adjusted EBITDA in North America and Latin America for 2025 compared to 2024, while Europe is expected to face challenges due to higher maintenance costs.

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Strong cash generation and reinvestment drive future growth.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$3B	$3.5B	$3.6B	$3.7B	$3.8B
Cost of Revenue	$2.1B	$2.3B	$2.6B	$2.8B	$2.8B
Gross Profit	$908M	$1.2B	$1B	$912M	$940M
Gross Profit %	30%	34%	28%	25%	25%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$3B

$3.5B

$3.6B

$3.7B

$3.8B

Cost of Revenue

$2.1B

$2.3B

$2.6B

$2.8B

Gross Profit

$908M

$1.2B

$1B

$912M

$940M

Gross Profit %

30%

34%

28%

25%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$170M	$331M	$336M	$253M	$302M
Dep. & Amort.	$154M	$143M	$125M	$143M	$159M
Def. Tax	-$49M	-$6M	-$7M	$0	$0
Stock Comp.	$15M	$14M	$20M	$23M	$23M
Chg. in WC	$69M	$67M	-$56M	$85M	$0

2020

2021

2022

2023

2024

Net Income

$170M

$331M

$336M

$253M

$302M

Dep. & Amort.

$154M

$143M

$125M

$143M

$159M

Def. Tax

-$49M

-$6M

-$7M

Stock Comp.

$15M

$14M

$20M

$23M

Chg. in WC

$69M

$67M

-$56M

$85M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$95M	$180M	$360M	$0	$205M
ST Investments	$0	$0	$360M	$0	$0
Cash & ST Inv.	$95M	$180M	$360M	$220M	$205M
Receivables	$621M	$428M	$480M	$455M	$429M
Inventory	$342M	$342M	$364M	$404M	$361M

2020

2021

2022

2023

2024

Cash

$95M

$180M

$360M

$205M

ST Investments

$360M

Cash & ST Inv.

$95M

$180M

$360M

$220M

$205M

Receivables

$621M

$428M

$480M

$455M

$429M

Inventory

$342M

$364M

$404M

$361M

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Income StatementIncome Statement
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Balance SheetBalance Sheet

Earnings

Report Date

Feb 12, 2025

Reported Revenue

970M

Avg 1d Change

7.3%

Report Period

Q4 2024

Reported EPS

1.94

Implied Move 1d

7.18%

Transcript

11m 2s

11m 54s

12m 33s

14m 11s

Let's move to the next slide.

14m 18s

14m 44s

More importantly, I'm proud of our team's commitment to putting people before paper to ensure everyone returns home safe at the end of each day.

14m 54s

15m 14s

16m 5s

16m 21s

Input and transportation costs increased by $9,000,000 driven by transportation and seasonally higher energy prices. Moving to Slide nine. A core pillar of our strategy is a low cost producer.

16m 40s

18m 10s

18m 58s

19m 35s

21m 2s

Let's go to Slide 12.

21m 10s

21m 24s

21m 50s

22m 41s

Thanks, John.

22m 44s

24m 36s

26m 16s

26m 49s

27m 8s

I'll turn it to John to discuss these higher return projects in more detail.

27m 15s

27m 32s

28m 43s

29m 53s

30m 9s

30m 53s

32m 9s

33m 2s

33m 19s

33m 52s

I guess, John, why was it a little bit weaker in North America than the other regions? If you had a view, I'm sorry, keep going.

34m 2s

34m 16s

Okay. That makes sense. We had in North America to be hi, Michel. Thanks for joining. Hi, Michel.

34m 25s

34m 40s

Okay.

34m 41s

You. I'll go back to queue. We'll take our next question from Matthew McKehler at RBC Capital Markets.

34m 51s

35m 13s

So thanks for joining the call, first of all. This is still very difficult to assess. To be very honest.

35m 20s

36m 8s

Okay. Thanks for that color. Maybe shifting to Latin America, I think you mentioned seeing some positive trends in demand in Brazil.

36m 19s

36m 49s

37m 43s

Thanks. That's helpful. Turn it back.

37m 53s

We'll go next to Daniel Harriman at Sidoti.

37m 58s

Hey guys, good morning. Thanks for taking my question. Just a quick one here today for me. Can you help us a little bit with the cadence of your capital spending in 2025 within that range?

38m 9s

Of $220,000,000 to $240,000,000 should we expect more or less that CapEx to kind of follow the cadence that it did in 2024?

38m 20s

Yeah. Dan, are you talking about for joining Daniel. Are you talking about in terms of the timing of the is that what you mean by?

38m 28s

Yes, just how should we think about it being spread out throughout the year on a quarterly basis?

38m 34s

Yes. And I think the way to think about that is, more heavily weighted to the first half because you can see 80% of our outages are in that.

38m 44s

39m 2s

Okay.

39m 7s

39m 50s

40m 35s

41m 56s

Including the the 10% I think you said reduction from closures.

42m 1s

That's right.

42m 2s

Including that. And John, just a point of clarification, I'll turn it over.

42m 7s

So your view is a cost curve actually is up over the last quarter, two quarters in Europe or it's more or less stable and certainly up over the last several years because of Ukraine and the like?

42m 20s

42m 42s

And we'll take a follow-up from Matthew McKellar at RBC.

42m 47s

Thanks very much. I'm just following up on an earlier response I think you mentioned you saw lower commercial printing in envelope volumes in North America in the quarter.

42m 57s

43m 50s

44m 48s

Better reliability, flexibility and avoidance of capital. That's the way I will look at it.

44m 56s

Okay. Thanks for the help. Turn it back. And we'll go back to George Tafos at Bank of America.

45m 11s

45m 41s

And then I'll turn it over and come back into queue.

45m 47s

46m 24s

So that's That's how that's going to work.

46m 29s

And on free cash flow?

46m 32s

47m 40s

Yes, the first quarter is always more challenging terms of cash flow.

47m 46s

No worries for the year, it's just this timing. Understood.

47m 50s

Hey guys, maybe I'll throw my last two in here, if it's okay. Tax rate kicks up a little bit 28% to 29%, what's in that?

47m 59s

48m 52s

From 4Q? One timers, yes. So specifically, we had $5,000,000 insurance payment that we got in the fourth quarter, LIFO was about $7,000,000 Okay. Thanks very much.

49m 12s

I'll now turn the call back over to Hans Bjorkman for closing comments.

49m 17s

All right. Thank you. Before we close-up, I'm going to let Jean Michel kind of wrap up call today.

49m 22s

50m 57s

You may now disconnect.

Key Insights

SLVM achieved a 23% return on invested capital in 2024, repaid $14.05 billion in debt, and achieved a net debt to adjusted EBITDA ratio of 0.9x. Adjusted EBITDA was $632 million with a 17% margin, and $248 million in free cash flow was generated.
The company exceeded its Project Horizon cost reduction program goals, achieving €144 million in year-end run rate savings, surpassing the €110 million target. This included over 180 initiatives targeting cost reductions and efficiency improvements.
SLVM announced high-return projects at its Eastover mill, including a $100 million paper machine optimization and a $45 million cut-size sheeter replacement, both expected to start in Q4 2026. These projects are projected to generate over $50 million in incremental adjusted EBITDA annually.
For Q1 2025, SLVM expects adjusted EBITDA of $85 million to $105 million, with unfavorable price/mix impacts of $10 million to $15 million and volume impacts of $20 million to $25 million due to seasonality and the Georgetown mill exit. Quarterly earnings are expected to improve throughout the year.
The company plans $220 million to $240 million in capital spending for 2025, with a focus on high-return projects and efficiency improvements. Management anticipates slightly better adjusted EBITDA in North America and Latin America for 2025 compared to 2024, while Europe is expected to face challenges due to higher maintenance costs.

Sylvamo Corporation Price & Performance (SLVM)

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