International Paper Company Q4 FY2025 earnings call

• Announced plan to separate EMEA packaging business into a standalone company to accelerate value creation. - Core strategy 8020 focuses on simplify, segment, resource, and grow, guiding resource allocation. - Achieved $710 million of cost-out actions by 2025, including footprint optimization and organizational streamlining. - North America made progress in cost improvement, delivering ~$510 million of run rate cost benefits in 2025. - EMEA moving forward with transformation, applying commercial and structural cost levers and expecting benefits to accelerate through 2026.

North America: Full-year 2025 net sales exceeded $15 billion with approximately $2.3 billion of adjusted EBITDA. EMEA packaging business: Full-year 2025 net sales were approximately $8.5 billion with adjusted EBITDA of around $800 million. North America achieved ~37% year-over-year adjusted EBITDA growth in 2025, with volume growth outpacing the underlying market by 3-4 percentage points in Q4. EMEA actioned 20 site closures impacting ~1,400 roles and had 7 sites and 700 roles in work council discussions, expecting run rate cost savings over $160 million.

• Enterprise net sales projected 24.1-24.9 billion in 2026, adjusted EBITDA 3.5-3.7 billion, free cash flow 300-500 million. - North America 2026 EBITDA growth driven by ~$100 million commercial benefits and ~$500 million cost benefits, offset by ~$200 million nonrecurring transformation costs. - EMEA 2026 adjusted EBITDA growth driven by ~$200 million commercial benefits and ~$200 million cost-out benefits, offset by ~$100 million inflation impact. - First quarter 2026 North America outlook: ~$534 million adjusted EBITDA, with ~20-25 million impact from winter storm yet to be fully assessed. First quarter EMEA outlook: EBITDA roughly in line with fourth quarter, with price and volume tailwinds of ~$33 million offset by higher ops and costs of ~$42 million.

• Potential impact of unforeseen events like weather-related disruptions on financial results. - Market volatility and challenges in executing cost optimization and commercial strategies in EMEA, including uncertainties around price realization and market growth. - Impact of ongoing workforce reductions and facility closures on employee morale and operational continuity.

Q: About free cash flow guidance and dividend policy A: Andrew K. Silvernail mentioned a price letter was sent, current guidance doesn't include price realization, and the dividend policy is maintained through 2026 with review post-spin Q: Clarification on corporate costs relative to segment numbers A: Lance T. Loeffler stated total company guidance includes corporate, and spin won't meaningfully change corporate costs Q: About volume performance and confidence in achieving 2026 targets A: Andrew K. Silvernail discussed good market share wins, disciplined pricing, and progress in cost optimization and commercial momentum contributing to confidence in achieving targets