Smurfit Westrock Plc Q1 FY2026 earnings call

• First quarter performance was solid, essentially in line with plan, with adjusted EBITDA of $1076 million and margin of 14%, impacted by $65M weather events. • Progress internally with people, operating model, and capital plans; externally providing broadest offering and tools. • Medium-term plan aims to deliver 7% CAGR in adjusted EBITDA and over 300 basis points margin expansion by 2030, aiming for $7B adjusted EBITDA and 19% group margin. • North America: Improved demand, price increases announced, over 600 new corrugated customers in quarter, progress to owner-operator model. • EMEA and APAC: Solid quarter with strong innovation platform, outperforming peers, hosting sustainability and innovation event, optimizing system with closures in UK and Netherlands. • Latin America: Strong performance, key pan-regional player, acquisition in Ecuador beneficial.

North America: Adjusted EBITDA was $597 million with an adjusted EBITDA margin of 13.3%. Impacted by weather issues of approximately $55 million (primarily in February) and downtime costing $74 million, half of which was unplanned. EMEA and APAC: Delivered adjusted EBITDA of $421 million and an adjusted EBITDA margin of 15.2%. Latin American business: Adjusted EBITDA of 109 million with an adjusted EBITDA margin of over 20%. Completed a corrugated box plant acquisition in Ecuador in the quarter.

• Expect adjusted EBITDA for Q2 to be between 1.1 and 1.2 billion. • Reaffirm previous expectation of adjusted EBITDA outcome for full year 2026 between 5 and 5.3 billion.

• Weather events impacting results. • Energy price rises expected in following quarters. • Market demand volatility.

Q: Regarding half of the unplanned downtime in North America in the quarter and implications for mill system and demand weakness.

A: Unplanned downtime in February was due to specific mill issues, not to reoccur, and globally strong demand with all paper grades in sold-out position.

Q: On new customers in North America and margin impact.

A: Comfortable with new customers coming in, with April new customer volume 30% up on March, but still washing through uneconomic business.

Q: On hedging for gas in Europe and ability to drive earnings growth.

A: About 50% hedged for next one or two quarters, and seeing price increases feeding through in second half.

Q: On UK mill closure in EMEA and impact.

A: Mill was high-cost and had wrong width, supply arranged, decision made after considering investment.

Q: On drivers of improved demand in North America despite consumer stretch.

A: Combination of seasonality, security of supply, new customer wins, and people culture.

Q: On internal levers to offset higher costs.

A: Active cost-taker program, including projects on energy consumption, headcount reduction, and budget process to offset inflation.

Q: On price hike flow-through in North America and consumer business performance.

A: First $50 price hike to be fully implemented by July 1, consumer business has different substrates with SBS sold out, CUK solid, CRB needing work.

Q: On business recovery trajectory in North America.

A: Direction of travel is strong with quality people, but still work in progress to reach margins of 8 - 12%.

Q: On cost bridge for the year, including freight, labor, etc.

A: Freight a headwind, labor less of a headwind, energy a big driver, downtime lower quarter on quarter offsetting some costs.

Q: On North American box system progression.

A: Continued work in progress with loss-making plants, aiming to get through cycle in single digits.