Smurfit WestRock reported strong Q2 results with $1.14B EBITDA, but lowered full-year guidance due to a $300M freight headwind from Middle East conflict and domestic logistics shortages. Management highlighted the tightest paper markets in decades, fully booked mills, and plans to push through price increases to recover costs, setting a strong platform for 2027. Q2 adjusted EBITDA of $1.14B, margin 14.2%.
Smurfit WestRock reported strong Q2 results with $1.14B EBITDA, but lowered full-year guidance due to a $300M freight headwind from Middle East conflict and domestic logistics shortages. Management highlighted the tightest paper markets in decades, fully booked mills, and plans to push through price increases to recover costs, setting a strong platform for 2027. Q2 adjusted EBITDA of $1.14B, margin 14.2%.
Smurfit WestRock reported strong Q2 results with $1.14B EBITDA, but lowered full-year guidance due to a $300M freight headwind from Middle East conflict and domestic logistics shortages. Management highlighted the tightest paper markets in decades, fully booked mills, and plans…
Q2 adjusted EBITDA of $1.14B, margin 14.2%.
Management expressed strong confidence in the business's operational progress, market conditions, and ability to recover costs through pricing initiatives despite near-term headwinds.
Guidance tone
North American corrugated volumes expected positive in Q3 or Q4. Management expressed strong confidence in the business's operational progress, market conditions, and ability to recover costs through pricing initiatives despite near-term headwinds.
Management reiterated a disciplined, returns-focused capital expenditure program with average annual capex of approximately $2.5 billion and no project of scale in any one year. They expect to spend between $2.4 billion and $2.5 billion in total capex this year, focused on improving the asset base, increasing efficiency, and supporting growth in attractive markets.
Management expressed strong confidence in the business's operational progress, market conditions, and ability to recover costs through pricing initiatives despite near-term headwinds.
“That's a function not only of the price of diesel, but it's also a function of availability of transportation. And that is creating some issues for delivery on time and things like that.”
“We've turned it from being heavily loss-making to small EBITDA positive, somewhere in the 3% to 4% range, depending on the month.”
“We are in very much catch-up mode in our system as we look through the remainder of this year and even into the first part of the next year on all brown paper grades.”
“If you said what's the number of loss makers that we have that we're still worried about, it's probably around 20, of which for sure we're going to solve 10 of them.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Units | FY2026 | $4.9B–$5.1B | $5B | LOWERED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | Units | FY2026 Q2 | $1.1B–$1.2B | $1.14B | Met / beat |
Freight costs are a $300M headwind, driven by Middle East conflict and domestic transport shortages, causing logistics delays and delivery disruptions. — Persistent freight inflation and capacity constraints suggest continued pricing power for logistics providers and potential cost pass-through pressures for manufacturers.
Yeah, and I think if I could just add one point, Anthony, to your important question is that logistics is playing a hell of a role at the moment. You know, there are some, especially in the North American market, there are, you know, very significant ACOS. I mean, we're expecting costs to be 300 million more than we would have anticipated three months ago in North America and Europe. And That's a function not only of the price of diesel, but it's also a function of availability of transportation. And that is creating some issues for delivery on time and things like that. So for sure, logistics is an issue, not only on the cost side, but also on the availability side. And that's something that does create some disruption. But as I say, we're managing through it. with some cost, which obviously none of us like. There's $300 million that we didn't expect, but at the end of the day, it is what it is, and it's the reason why we need further pricing initiatives in our marketplace because we need to recover these and to earn a decent return for our stakeholders.
Box plant profitability has swung from heavily loss-making to small EBITDA positive (3-4% margins), showing rapid operational turnaround progress. — This indicates the box industry's pricing dynamics are improving enough to support already-announced and future containerboard price hikes, bolstering the entire sector's margin trajectory.
Yeah, you're entirely right. We're around 3%, somewhere between. On a static basis without paper incoming in, we've turned it from being heavily loss-making to small EBITDA positive, somewhere in the 3% to 4% range, depending on the month. But that obviously will change as we move forward. So yeah, you're about right.
Smurfit WestRock is completely sold out across all brown paper grades and export orders are late, requiring catch-up into next year.
Smurfit WestRock has trimmed its list of 'loss-making' box plants from 40+ down to around 20, with plans to fix 10 of them.
… and we're heading towards second and we'll get to second and then we'll be safe on second and then we'll move on to third and then fourth in the next couple of years. I think it's amazing to me to see the considerable progress we've made in many of our facilities. I think we're down to, you know, again, it's a little bit It's a little bit difficult to say how many loss makers we are because of the movements in paper prices. But if you said what's the number of loss makers that we have that we're still worried about, it's probably around 20, of which for sure we're going to solve 10 of them. And then the other five, we'll just have to see how they do over the next period of time, depending on the market, depending on the mix. So we've come down from 40 plus, how many? Maybe 80. and many more. We're really doing well, but then getting to break even is one thing and then going from break even to 8% or 9% is another. It's a journey, and as I say, somewhere between first and second, but I'm really happy with the teams and how they're embracing the new culture and the leadership But, you know, it's not perfect everywhere, obviously. And, you know, we continue to bring in new people. …