International Paper’s (IP) net sales reached US$4.58 billion in the fourth quarter of 2024, a drop of 0.5% compared to the same period last year. In the year to date, the company recorded sales of US$18.62 billion, representing a decrease of 1.6% compared to 2023.
The industrial packaging segment grew by 0.7% in the quarter, totaling US$3.87 billion in sales. However, year-to-date sales in this segment amounted to US$15.53 billion, a drop of 0.4% compared to the previous year.
“While we certainly don’t like the reality of the results in the fourth quarter, it is exactly what we had expected,” said CEO Andy Silvernail on the company’s Thursday earnings call. IP has focused on implementing the strategy reset plan Silvernail introduced last July, which puts an emphasis on customer service and reliability. Data for metrics like on-time delivery shows positive movement in customer service performance, he said, citing “an entire standard deviation” of improvement. “We still have to finish digging out of that hole. … But I like where we are relative to our plan,” he said.
DS SMITH ACQUISITION AND NEW INVESTMENTS
IP’s merger with britain’s DS Smith is expected to be completed after judicial approval in the UK. The European Commission approved the deal last week, subject to the divestment of five of IP’s box factories to mitigate competition concerns. “We’re committed to identifying suitable buyers who can offer a viable future for these teams,” said Silvernail.
The company also announced the acquisition of a bulk products plant in West Monroe, Louisiana, with the aim of expanding its line of specialty products. The deal is expected to close on the same date as the DS Smith transaction.
COST-CUTTING PLAN AND NEW PRODUCTION UNIT
IP is moving forward with the implementation of its 80/20 strategy, expanding the initiative to 22 box plants by 2025. According to Silvernail, the strategy’s pilot programs have shown productivity gains of more than 20%. In addition, the closure of five box plants and the pulp mill in Georgetown, South Carolina, is expected to reduce approximately US$110 million in annual costs.
The company also announced the construction of a new box plant in Waterloo, Iowa. The facility will be strategically positioned to serve customers in the protein sector and will have easy access to one of IP’s units. Construction is expected to begin this year, with operations scheduled for mid-2026. This is “by far the largest box plant investment we have ever made,” said Silvernail.
OUTLOOK FOR 2025
Despite the absence of detailed forecasts due to regulatory restrictions, Silvernail indicated that he expects a “transformational year” for IP. He projected a stabilizing trend in the first quarter, with the second half of the year being stronger than the first. “We need to exit this year substantially better than where we were last year,” he said. On March 25, during Investor Day, the company will release a strategic analysis and an update on the integration of DS Smith and the new plant in Waterloo.
