Q4 2025 Earnings Call Transcript

Good morning, everyone, and thank you for joining us today for our fourth quarter and full year 2025 results. As a reminder, statements in today's press releases and presentations and the comments made by management during this call may be considered forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the earnings release and in our SEC filings as well as those discussed in our investor update presentation on our medium-term plan.

The company undertakes no obligation to revise any forward-looking statements. Today's remarks also refer to certain non-GAAP financial measures. Where applicable, reconciliations to the most comparable GAAP measures are included in today's earnings release and in the appendix to the accompanying presentation, which are available at investors.smurfitwestrock.com. In addition, today's remarks include statements about Smurfit Westrock's medium-term financial goals and capital allocation priorities.

These goals are aspirational and actual performance may differ, possibly materially, and no guarantees are made that these goals will be met. For additional information, please refer to our medium-term plan related presentation. Tony will now present an abridged version of our fourth quarter results, after which we will take some questions before moving on to the medium-term plan. You'll note the additional level of disclosure in the appendix to the fourth quarter results presentation facilitating that shorter discussion.

In the interest of time, I request those asking questions to restrict themselves to one. I'll now hand you over to Tony Smurfit, CEO of Smurfit Westrock.

Thank you, Ciaran, and good morning or good afternoon to everyone from a warming up New York City. Today, I'm joined by Ken Bowles, our Executive Vice President and Group CFO, along with Saverio Mayer, Laurent Sellier and Alvaro Henao, who run our regions as we'll be presenting, as you know, the medium-term plan later. Before I get into the quarter, you'll have seen our recent announcement on the closure of our SBS machine in La Tuque, Quebec, which is another step in our portfolio optimization. Decisions such as this, while always difficult, are always carefully considered and any further portfolio optimizations will be done in an equally considered manner.

In the context of what were difficult market conditions across many of our countries, I am very pleased with the performance we've delivered during the quarter and, of course, for the year. In the quarter, we reported USD 1.172 billion of adjusted EBITDA and an adjusted EBITDA of USD 4.939 billion for the year. This is, by far, the largest outturn by any packaging company in the world. And I'm incredibly proud of the performance of everyone in the company who has contributed towards this.

In addition, in our first full year of operation, we have focused on cash, generating USD 679 million of adjusted free cash flow for the quarter and over USD 1.5 billion for the year. I view this as a key metric of our success. Finally, while this is far away from the summit of our ambitions, our adjusted margin at 15.5% for the quarter and a similar number for the year provides a great launching pad for our future success. Looking now at the results by region for the quarter.

Our adjusted EBITDA in North America was down modestly year-on-year at $651 million and a margin of 14.7%. Conversely, our European margins expanded during the quarter to over 16% and an adjusted EBITDA of $438 million. And lastly, but by no means least, once again, we had a very strong performance in our Latin American region, with margins of over 24% and an adjusted EBITDA of over $130 million. With regard to volumes, you will see a sharp fall in our North American volume with stable volumes in Europe and a stronger growth in our Latin American region.

We'll talk to these figures in a few moments as I go through the regions. Turning now to the group and regional highlights. I am very proud of the medium-term plan that we have created and will be presenting to you very shortly. This has been the accumulation of a year-long effort that has been done bottom up.

While all of us here steered the direction of the plan every individual operating unit within the company has developed their ideas for the future and the outcomes of which you'll see shortly. During the first full year, the group continued to put its balance sheet on an ever more positive footing with successful refinancings and associated redemptions of bonds pushing the next maturity out to 2028 with an average interest rate of 4.64%. It is a fundamental philosophy of all of us in the group to have balance sheet strength. And you will see at year-end, we have reduced our leverage to 2.6x moving towards our target of 2x.

Reflecting the confidence we have, we continue to have a progressive dividend. And again, as was noted last week, we have increased our dividend by a further 5%. Smurfit Westrock as was the case in Smurfit Kappa continued to see the dividend as a key pillar of our capital allocation framework. This was evidenced quite clearly during the COVID years when others cut or delayed their dividend but we paid in full.

Turning now to the regions. Let me start with North America. When we arrived in the legacy WestRock organization and following our first 6 months, we identified there was business in our portfolio that was heavily loss-making for the company and for the individual operating units. Our fundamental philosophy, and that is why we have successfully stood the test of time is that every unit must be able to justify its own existence.

As such, we have shared uneconomic business, which will be replaced. To give you and me confidence, half of the 1.2 billion square meters we have lost has already been replaced and is in the process of being implemented in our system. And our prospects in what we call our pipeline significantly exceed the business that has been lost, both in terms of volume and quality. The short-term effect of the low volume loss is the need for us to take additional downtime in the mill system, which we've taken in Q4 amounting to a cost of about $85 million.

A hallmark of this company, our company, has always been working capital management and cash generation. So this action has been necessary to make sure we optimize our system. In the year gone by, we have significantly reduced the number of loss makers already within the organization. We have also optimized our footprint with some closures, which we will continue to proactively evaluate reflecting our recent announcement and other closures during 2025. We've already started implementing our investment programs, and most importantly, we've been putting in place the right people to take our North American business forward.

With regard to EMEA and APAC, we have a very, very good business in this region, and our margins reflect that. If you consider how the rest of the whole industry is performing and you see where we currently sit, I'm sure you'll recognize that our positioning in this area is indeed very strong. What is also very interesting is that our consumer business is adding a lot to our offering, to our strong customer base as we -- and we'll talk about this shortly, as we see nothing but opportunities to continue to progress this business alongside our strong corrugated business. Of course, in light of the current paper market situation, we are looking at our footprint with a continuing focus on portfolio optimization.

Our Latin American business remains incredibly strong with great margins and a seamless integration achieved between both legacy Smurfit Kappa and WestRock. I'll let Alvaro reflect on this in a few moments. As I stated at the outset, our full year -- our first full year of operation, integration and development at Smurfit Westrock has been truly outstanding, notwithstanding that the general economic environment has been as difficult as I have seen in my lifetime for such an extended period of time. Our significant achievements, which everyone in the company is proud of as it sits within our vision is that we have been recognized by Forbes, Fortune and Time Magazine as a leader and one of the world's great companies.

Our designers continue to meet and exceed our customers' needs and our operations continue to deliver superior performance in quality and service. And this is regularly recognized with over 230 awards received by customers and suppliers. Our consistent improvement in quality, productivity and utilization and on-time and full delivery for customers, is what is driving many of the recognitions and awards we have received. In closing out the year, we recognize that we have well overachieved our initial synergy target of $400 million.

And while this is -- much of this is masked by the general economic activity we see, we believe this sets us up to be a much more efficient and leaner organization into the future. And lastly, as I mentioned, our improved balance sheet of 2.6x levered has been recognized by Fitch with an upgrade to BBB+. Finally, turning to our outlook, notwithstanding that we've had significant weather events, both in Europe and, of course, here in the United States, and we're continuing to work through the impact of these, the year has begun with a generally better industry operating environment. Given our progress of developing new and high-quality business, the enthusiasm of our teams and our expectation for an improving economy in the second half of the year, we currently expect the first quarter adjusted EBITDA of between $1.1 billion and $1.2 billion with a full year 2026 adjusted EBITDA between USD 5 billion and USD 5.3 billion.

With the plan that we have in place to invest and grow our business, we remain extremely confident in the future of Smurfit Westrock as the go-to paper and packaging company for customers, for talented employees, for suppliers and, of course, for shareholders in the years ahead. In summary, full year 2025 has been about establishing a strong foundation for future performance and for future success. I thank you all for your attention. And now Ken and I will take any questions on the results before moving on to the medium-term plan.

Thank you.

Tony, in terms of the -- in terms of the outlook for this year, can you talk to the extent that pricing is already baked into your forecast or not? And then ultimately, recognizing you don't manage the business week by week, month by month, what is the expectation for volume progressions, especially within corrugated, but in box board over the course of the year?

No, we don't do it week by week, day by day, but Ken, I'll let you take the pricing piece. Our expectation, George, is that we saw a firming up of order books in the latter part of December. We felt that the first part of the fourth quarter was weak, and then that sort of improved as we went through the quarter. And we were seeing a decent order books across most of the businesses in which we operate and countries in which we operate as we progressed in January.

That has been somewhat interrupted a little bit by the weather and that will have an effect. We've seen the vast majority of the effects, but they're still -- we're still working through some of the logistics of that disruption as we're even in middle of February. It seems a little bit warmer now than it was, but it's still -- it's only last Saturday that it started to warm up a little bit. So we would see volumes in the latter half of the year, get back to more normalized levels.

And certainly, with regard to the stimulus that could be happening here in the United States, we think that, that could be a positive for the business here and in the rest of our businesses.

George, so the long and the short answer is no. So for the first quarter, clearly not because you wouldn't expect anything anyway. But for the year, no, we haven't baked in any aspect of it because our style, if you like, would be to wait until it's in before we can consider it. I think also you can focus on the price increases, there's outputs there in terms of other paper grades might happen there.

So the net-net is we feel comfortable with the 5 to 5.3 based on where everything is now without baking in anything else.

Philip?

Phil Ng from Jefferies. Tony, can you give us a little feel for where you are in the process of churning some of these lower loss-making contracts? And you talked about a robust pipeline where you can more than offset that. What does that actually mean? Have you secured contracts? And how does that kind of layer in, I guess, to the puts and takes of those dynamics?

Phil, that's a great question. I'm going to hand that over to the guy you want to hear from on that, the guy, the coal face, which is Laurent, but basically, I think I am really happy. Most of the bad stuff has gone. We've still got a couple of contracts that will phase out or we might keep or we might lose because we're under contract with really bad volumes there.

So -- but the price is so bad, I would expect we'll keep it, but at a much higher margin. But then I'll let you talk, Laurent, about the -- there's a mic there -- about how successful we've been. And I'm really, really happy with how we're doing.

So it's something that unravels over time as you can imagine. So the contract when we lose the volume, that tends to go pretty fast because we terminate the volumes and then you need to rebuild. What Tony referred to in terms of pipeline, is you can imagine layers of conversations, one very close to happening; other one, little bit less warm and others that are more like prospects. But the overall perspective and prospect is very encouraging.

And that's the reason why we've gone exactly this way. We had very underperforming contracts. We needed to stop them at some point and be ready to take on more volume and very good margin conditions over time.

The way I'd rephrase it is you're not going to make an omelet unless you break an egg. So therefore, we had to get rid of this stuff. So we have now machine capacity for our people to sell. And you've got a couple of hundred salespeople across the United States who have capacity to sell now.

And some of those will be incredibly successful at selling and some of them will be less successful. Those that are less successful won't be in the company longer term and we'll make sure that we are successful because we have capacity to sell and get paid for it. And that's -- when you lock yourself up, Phil, with really bad volume that you can't make any money on, then you're stuck. So we have to break that egg, so to speak.

Just a follow-up to that, Tony. In terms of the approach, I guess, going forward, how is the sales force prospecting these types of customers perhaps differently under your watch versus a year ago? And any more perspective on these contracts that are perceived to be good? Obviously, it's focused on profitability, but any more color in terms of, is it more commoditized versus non-commoditized business, regional versus national accounts?

Just give us a little more perspective on what makes a good customer?

A good customer is a customer you can bring value to and who you can solve their problems. And every customer has a different problem that you need to identify with and a good salesperson is finding those problems and identifying what -- how he can help solve our customers' problems. I mean, we'll talk about it in the medium-term plan, but our suite of tools, our suite of applications is second to none in the world. And so we're able to solve any customer's problem to make them -- help them in their own marketplaces.

And that's how we get to the point where we're not selling just a box, we're selling packaging solutions for them. It could be redesigned. It can be supply chain. It can be environmental.

It can be whatever they need, and it's up to us to make sure that our sales teams, both regionally and nationally are able to sell. And that's what we've been doing for decades in North America, in Latin America, and it's something that we're just good at, frankly, that -- and we'll bring -- make sure that, that kind of knowledge transfer, both from -- because there are some great things done here in North America. I mean, you want to see some of the designs that are done in our merchandising and display business where we have a great team that's innovating. So the mix of having everything together is incredibly powerful.

It doesn't mean to say that it's easy. We're not going to be successful every day with every customer. But over time, with just 20% of the market here, then we can -- we've got 80% to go for. And maybe some of that is lousy, and we don't want it, but a lot of it is pretty good, and we'll get it.

I think as well, Phil, and Tony has spoke -- we both have spoken about it across the year is that kind of key underpin of quality and service in terms of the customer. I think it's fair to say that in the last year or so OTIF and PPM and all those kind of metrics that are very much part of how we do business and it goes to what we bring to the customer and how we can bring value on time [indiscernible] and quality are kind of the key underpins to that. So to enable Laurent to have the conversations we have has to come back to quality and service. And I think that's been a step change in thinking how you equally approach the customer.

And the one thing we've changed in addition is the organization bringing the sales force much closer to the operating units. So that gives a lot of flexibility and also much more direct contact between the sales force and the potential customers, which I think is a great plus. It's still in the making, but that's happening at pace.

And just one final point before I move off , we also allow our salespeople to entertain our customers, make sure that they can buy them a drink, which was -- nothing was allowed to be done before. They just said just pure sell on price. And that's not what we do. We sell on making sure that we give our customers value for what they have, we can give them.

I'm Lewis Roxburgh from Goodbody. And just on that value over volume piece. Just wondered sort of how that piece will contribute. Do you think that will translate to pricing outperforming the benchmark or maybe cost takeout from rightsizing and efficiency?

Or in terms of volume, we've seen some deliberate drop off this year, just seeing how that -- how you see that sort of evolve? Do you think that will sort of close more towards, as you said, normalized levels of demand towards the end of this year?

Thanks, Lewis. We will certainly -- I mean, I think if you look at our performance in Europe, for example, we've gained market share because of our real laser-like focus on our ability to serve our customers with high quality, good design and value for the customer. So that's what we've done, and that's where we're gaining market share. If your question is, should we be lapping positively this time next year?

The answer is yes. I'll be very disappointed if we're not. And I -- as I've said and as Laurent has said, we've got a lot of irons in the fire with customers, and I would expect to land a lot of those. We have landed a lot, and I've been very, very happy with the momentum of our business.

I don't know if anyone wants to add anything?

Mark Weintraub at Seaport Research Partners. Thank you, first of all, for the bridges, which you provided kind of on the look back, that's super helpful. And so get a little, ask for a little more. So as we look at the 2026 outlook, pricing, you're not using that as sort of an ingredient on what you have is an improvement '26 over 2025. Presumably, inflation is going to be working against us as it always is.

Can you help us, is it -- are these synergies, cost takeouts, I'm assuming the first half of the year on volume is tough, so maybe you're going to be better year-over-year in the second half. Can you help us understand how we can get to better EBITDA in 2026 than 2025 with those drivers?

Yes. Mark, thank you. Yes, the bridges were -- we appreciate your patients on the bridges, but trust me, they cost us as much frustration as they did you in getting there. So it's a big organization to put together.

But thankfully, I think you've got everything you need. In terms of '26 and what's happening there, price and volume will be what it is. We've talked about that. I think if you think about the synergy program, there's still some synergies to come through in 2026 in that program, and that's probably in the range of $40 million to $50 million in reality.

In terms of -- energy is probably a net negative in the range of kind of $60 million to $70 million maybe. And then fiber generally is probably about $50 million of a tailwind. So I suppose we're at a place where generally at the start of the year, there's a lot of moving parts. But in terms of certainty pieces based on forward prices, fiber, energy and the synergy piece and probably the fixed pieces in terms of how they might trade out, price and volume will be what it is.

But I think it's also -- you talk about inflation, but remember, Laurent, Saverio, Alvaro have very active cost takeout programs that are designed just to offset inflation. So not part of the synergy program because we know that when you wake up on Jan 1, you're already behind in terms of wage inflation, for example, labor inflation. So you know you've got a job to do it before you start. And that's fundamentally built into the budget process and everything else.

So we tend to take cost takeout inflation as kind of one bucket at this point. So no, that's our job to kind of sort that out in terms of how we deal with that cost. The other moving parts are price volume for the market and those are kind of discrete items that I can give you now. But the range of 5 to 5.3 is probably designed to give a bit of flex and latitude in terms of how we see the moving parts of early February versus how the year might trade out.

I think you're probably correct. I think everybody kind of sees the second half as being progressively better than the first half based on -- and you'd get that anyway from the simple math. So I think that's probably what we're thinking the same way as you, second half is better than the first half. But moving parts, relatively set for some things, but lot to play for the rest.

Mark, just before you ask your second question, I just want to make a point that Smurfit -- old Smurfit was always about looking for the most optimized way to spend capital as quickly as possible to get the best return. And maybe to your point that you were making yesterday about quick wins...

A program that we've rolled out almost at the onset of coming together of the 2 companies, which has identified low-hanging fruits that might not necessarily be very significant amount, but you do send a message in the organization that if you guys have a good return come up and that will be fast tracked in the system. And that message goes around as you can imagine, pretty fast.

Great. And so actually just real quick follow-up is just to understand downtime kind of in the thought process because obviously, that was costly this year. Is that a big component of potential upside or now are we going to potentially have a lot more potential there in 2027 and beyond because you're still embedding in a fair bit of downtime for '26?

I think it's fair to say, to be seen, Mark. I mean, we clearly proactively manage down time. You would have seen that in the fourth quarter and our philosophy, and Tony spoke about it very directly there is the reality is you can ignore the reality of building stocks for no purpose and tying up working capital and external warehouses and the additional incremental cost that goes with that. So our preference would be to manage downtime as we see fit in the context of the external market.

I'm not going to predict downtime going forward yet. That's not where we are. But clearly, downtime is worthwhile when you just don't see the demand for the product on the outside, but you're building unnecessary stocks. You don't get a working capital inflow or you don't get a free cash flow results like we have, would have been proactive about the whole picture.

And I suppose that the risk sometimes is that you focus on one side of the equation in terms of the EBITDA side, but you have to be willing to take the brave step and say, no, no, actually, the real job here is to manage the inventory in the system and wait for demand to come back and then fill it. So downtime, quarter 1 is always a heavy quarter for maintenance downtime. So that would clearly be there. But beyond that, we'll wait and see how the demand environment picks up.

I think one of the big opportunities we have is to reduce stocks quite significantly. And we certainly didn't want to build them to then start to work on reducing them. So if you look at what Saverio is doing and we've done in Latin America under Alvaro and now what we're starting to do in North America under Laurent is to really grade optimize our system so that we don't have as many widths. I don't know how many widths have we come down from in Latin America.

We've come down from 18 widths down to 3, which creates a little bit more waste in your corrugated plants, but way less working capital needs. But you also have to adjust your working capital at the same time. So that might result in some downtime that we take. In the North America, we're only at the start.

The number of indents were very high. And so probably you're starting from a position of 200 different types of options and the objective for -- as the first plan is to bring it down to 40 and then bringing that further. The discipline there is also what matters and getting on board, and we've had incredible support from all sides in the business, understanding how this improves the overall in a very positive manner.

Anthony Pettinari from Citi. Tony, you talked about the consumer business adding a lot to the company. And I guess just with -- in that regard and with the La Tuque announcement, can you just talk a little bit more about kind of the current performance of the North American consumer business, maybe expectations for '26 that are embedded in your guide? And then just generally kind of the dynamic between the 3 grades that you produce, market conditions and what it is that you think that really adds to the company for consumer being there?

That's a very big question, Anthony. That will take a long time. Well, let me start by saying, we have an incredible consumer business here in the United States with, let's say, 80% of them at the very top of their market. And then the other 20% we still have to -- 20% we have to work with.

So we have a very, very strong footprint. We have very strong potential for profitability and cash generation. And so we think this is a very good business on the converting side with very good customers, and there is a very big lean to -- across our customer base where serving our customers with both consumer board and with corrugated is a very big positive for them. And that translates across the region.

So we just landed a large contract with a large drinks company, whereby we're going to be serving them on both sides, both continents and much more business now in our corrugated business than we had before because of our consumer relationship. And that's something that Saverio is leveraging off on heavily for the consumer business because we're a very big business in Europe, and our consumer business was very centered on very big accounts in Europe with the exception of the health and beauty, but the -- and so we have a lot of leverage that we are bringing forward to our consumer business to really very much improve those businesses in Europe.

And I think we're very happy that, that's a business and area of expansion for us. With regard to mills, that's a very big question. What I would say that -- I don't want to steal your thunder from later on, but we're grade agnostic. We have 3 grades that we produce.

I'm going to let Laurent do it because I'm going to steal his thunder for later on.

I can do it the second time later on. And this principle that Tony just referred to of being grade agnostic is really central. I mean, a lot of the grades can be interchange, and it's all going to be about visibility on the shelf, brightness. I mean, all sorts of different factors basically that you can play with.

And the strengths that we have is operating from a space where we can offer whatever the customer requires as opposed to trying to feed them with something that we would have in excess or in any form or shape driven. And that has created an outstanding response with our customers, addressing their needs and working with them to understand how best to fit their purpose. It's actually -- it goes beyond just within the realm of consumer packaging. And in some instances, we can also offer microflute, for instance, corrugated instead of consumers.

So this whole suite of options is really creating very high-quality conversations. And we're in a unique position in that standpoint.

Gabe, Wells Fargo. A couple of questions. Just on the downtime, can you remind us what it was for the full year and if you're willing to split it out between the corrugated and the consumer business, so a point of clarification there. But more importantly, you talked about $85 million of downtime.

And from your vantage point, what is the optimal asset utilization on the mill side? Like what do you think about? And if you distinguish between U.S. and Europe, that would be great. And then lastly, you talked about, I think, getting half of the 1.2 billion square meters back.

Give us a time frame on that? And then does that inform your decision on future asset optimization or those kind of mutually exclusive decisions?

That's a big one. The -- we are in the process of getting half that business back, and that will be probably all implemented, I would guess, Q1 or latest early part of Q2 of the business that we've lost. We've got half of it back. I would say that the other $1.2 billion that we have in our pipeline, I would expect about half of that to come back in this year and the rest will flow in through the start of next year.

But then that's going to be a moving thing. There'll be some come in, some come off, so -- and we're likely to lose some of this other business that's still under contract that's very badly priced. So there's always swings and roundabouts in business coming and going. With regard to downtime...

Gabe, so for the year, $220 million is the final accounts between being corrugated and consumer for segmented reasons and disclosure reasons. You were 85% in the fourth quarter. In terms of utilization rates, I'm looking at the 2 men who know better than me. But in Europe, 92% in the Bovis, probably where he'd like to be, mid-90s for North America is where he'd like to be generally.

And in Europe, clearly, that's easily achieved given the level of integration. So we always operate way [indiscernible] simply because we don't need to do anything else by less on the outside. Laurent is working actively towards the mid-90s for the system.

So we'll stop right there. If anybody wants to grab a quick coffee, we'll go straight into the medium-term plan. So you want to grab a coffee quickly or order or whatever. [Break]

So thank you all. If you could please take your seats again. We'll get started into the medium-term plan presentation.

Okay. So good morning again, and good afternoon to those of you looking from Europe. Thank you for your attention. As I mentioned a few minutes ago, I'm delighted to be joined by Ken Bowles, our Executive Vice President and Group CFO.

Ken is a man with vast experience. And together, we saw off an attack to our independence and successfully created one of the world's largest fiber-based packaging companies. Also in attendance is Laurent Sellier, who you just met, who is CEO of Smurfit Westrock North America, a man who's worked his way up during a 30-year career from Europe to Latin America and now to North America. Saverio Mayer, our CEO of EMEA and APAC, is actually in the business longer than I am.

Saverio's career began selling boxes and over a subsequent 40-year period, has held many senior management positions, including 10 years ago when he became CEO of Europe. And I think you'll all agree Europe's performance and indeed, its consistent outperformance during the period speaks to his talent and leadership. And again, last but by no means least, Alvaro Henao, our Latin American CEO. He's been with the company for over 35 years.

He's held many financial and operational roles before becoming CEO of our incredible Latin American business. As you'll have gathered from earlier on today, I'm extremely proud of this proven management team as they not only hold the values of the company close to their heart, but more importantly, they instill those values in both existing and new employees in Smurfit Westrock. They are the best reflection of our performance-led culture, which you'll hear about later today. Thank you, guys, for being with us.

We are a global leader, delivering value for customers, for employees, and we passionately believe in delivering value for our shareholders. The team presenting today are also very significant shareholders. The plan being presented to you has not been prepared, as I mentioned earlier, top-down by myself and Ken and this team sitting in the office. It presents opportunities identified by the teams with boots on the ground who see and want to grasp those opportunities.

That does not mean to say that we'll get everything right, of course, not, all the time. But given a normal market, a normal world, we believe we will execute this plan and deliver the numbers you see on this slide. A key opportunity is significant profit growth in North America as we change and sharpen our operational and commercial focus and introduce new ideas and further investment in this region. EMEA is expected to continue to deliver strong performance against peers, remaining at the top of the tree in innovation, sustainability and adjusted EBITDA margin.

In Latin America, our goal is to continue to deliver higher margins and significant growth. This region presents significant opportunity for superior growth, both organically and inorganically. The goal of our plan is to -- is an adjusted EBITDA growth to USD 7 billion by the end of 2030 with an adjusted EBITDA CAGR growth of 7% per annum and margin expansion of over 300 basis points. We expect to generate significant adjusted free cash flow of some $14 billion between 2026 and 2030 with an adjusted free cash flow CAGR of 17%.

As part of the plan, subject to the usual caveats, of course, is our Board's and our company's commitment to continue to return capital to shareholders. Assuming our assumptions and market conditions hold, we expect subject to appropriate Board approvals and discretion, dividends of approximately USD 5 billion during the period and to commence share buybacks from 2027 onwards. It is important to note that this plan does not include any pricing momentum. When I took over as CEO of Smurfit Kappa and now Smurfit Westrock, I set out a vision for this company.

It is to dynamically deliver and sustainably deliver secure, which means a strong balance sheet; superior, which means outperforming all or the vast majority of our competitors and returns, which aims to deliver long-term value, not at the expense of short-term value for our shareholders. I've always set out that I want Smurfit Westrock to be one of the great companies of the world because great companies attract great people who deliver great performance. Our values are at the core of everything that we do in Smurfit Westrock. First, we must ensure that all of our employees go home safely from their jobs.

One accident is too many and our mantra is no job is so important that it cannot be done safely. Loyalty is very important to us as we see it as mutual. We want loyal people who will bring their experience, their knowledge, their talent to the organization. We must have people with the utmost integrity, which we define as doing the right thing even when no one is looking.

And we ask for respect throughout the organization for anyone who interacts within the company because our values guide and meaningfully contribute to our performance. Smurfit Westrock is the leader in innovation and sustainable packaging. There is no one like us in the world. With USD 31 billion in sales, we have approximately 97,000 employees operating in 40 countries and our largest region being North America, representing 58% of our sales.

What does being the best -- the #1 global player mean? It means we are able to continuously adopt best practice, best transfer of information, best transfer of ideas, best transfer of people, best transfer of knowledge across our world in a seamless way. We can also transfer capital and capacity across regions to continually optimize our asset base and asset efficiency. We've been at this for a long time.

We are multicultural, whereas many other companies are not. This is a particular skill set of our company, and it's the culture we've always had during our existence. We operate in 40 countries and the #1 or #2 player in most of those. This strong position allows our customers to work with us easily in any country, supported by clear and constant communication.

Whether it's sharing best practice or decisions around capital allocation, we aim to make sure that the lines of communication are as short as possible, not layered with bureaucracy. This is just part of our DNA. Our geographic spread and our ability to serve across regions and countries is highly valued by customers who also operate globally. This team, our team, your team are passionate about what we do, and we have a long and proven track record of superior performance and delivery, which is why we have been around as long as we have been.

Our longevity is supported by our product range in both corrugated and consumer packaging. Fiber-based packaging is essential, is growing and is not only a transport medium, but is increasingly a merchandising medium. Fiber-based packaging is and remains the most renewable, the most recyclable, the most biodegradable and the most environmentally friendly sustainable packaging medium that exists today. Smurfit Westrock has an unrivaled geographically balanced and highly integrated packaging solutions business delivering value for customers.

Our product range of corrugated and containerboard business covers all areas of this packaging from heavy-duty boxes for chemicals to lightweight packaging for applications such as e-commerce. We also offer specialty printing from digital to litho lamination to preprint to give our customers the widest possible choice. And we're also one of the largest producers globally in the growing and dynamic Bag-in-Box market. Our consumer packaging operations offer our customers even more breadth and depth in fulfilling their packaging needs.

Our consumer business provides packaging in primarily food and beverage and health and beauty with bespoke machinery applications. This direct-to-end consumer business adds another strong leg for future performance and growth. Our fiber-based products are complementary and highly valued by our customers, fulfilling both their primary and secondary packaging needs. We bring innovation to life through leading edge technology and a global team of over 2,000 designers interlinked.

Every day, they create packaging that helps our customers win in their markets, optimize their supply chains, improve their sustainability credentials. It is global intelligence available delivered locally. Our innovation ecosystem is powered by our digital Inno tools used nearly 1,000 times a day, and we're only starting from Utah to Buenos Aires, from Shanghai to Warsaw, supported by a network of over 34 experience centers, which operate as our innovation hubs, if you will. These AI data-fueled applications win business and ensure we better implement solutions that are possible, profitable, desirable and better for the planet.

ShelfSmart AI is an advanced AI tool based on insights from over 400,000 shopper studies to instantly predict on-shelf impact of packaging design. SupplySmart Analyzer uses data from 160,000 supply chains to optimize packaging and logistics, reducing overpackaging and improving efficiency. Innobook with over 2,000 designers inputting share 9,000-plus creative solutions, giving every customer access to the creative power of over 2,000 designers across our world. And Paper to Box AI, a packaging and material design engine powered by machine learning algorithms has over 50 million data points, engineering fit-for-purpose boxes with the right materials and low environmental impact.

Innovation is ultimately about delivering better solutions and ensuring they are implemented fast and right first time to create real tangible results for our customers. Our unique Design2Market approach combines our AI-driven Inno tools with our globally connected innovation system to deliver market-ready solutions in weeks instead of months. This approach has proven to be massively successful with a near 50% success rate for new business. So what is our secret sauce, our winning formula in Smurfit Westrock?

It begins and ends with our culture, performance-led, customer-centric, which drives both accountability and returns. The first step is attracting, retaining and developing the right people. While you hear everyone say that people are the greatest asset, we clearly believe it, and we invest behind it. In order to make sure we have the talent, not only for today but for the future, our best-in-class development programs, such as our 10-year partnership, our Open Leadership Program with INSEAD where over 700 managers of senior leadership have participated, and they're all aimed at ensuring both our culture and our values are retained.

Our company, as I hope you gathered, is completely focused on innovation and quality. This leads to a consistent and relentless focus on creating value for customers through our knowledge base and applications. Our capital allocation framework is proven, disciplined, returns-focused with flexibility and agility built in. We invest to develop world-class assets in a step-by-step disciplined way, avoiding grandiose projects, all the time making sure that our shareholders are rewarded through a progressive dividend policy and maintaining strength and flexibility of our balance sheet.

And finally, in order to attract, retain and foster talent, we make sure that our long-term incentive programs are aligned with shareholders. Let me be clear, our global integrated platform is a competitive strength, delivering value for our customers and for our shareholders. I'll now hand you over to Laurent, who's going to explain to you how we're going to unlock the significant value from our North American business. Laurent?

Thanks, Tony, and good morning again, everyone. Without a doubt, the North American business, which I have the privilege to run, is the biggest value creation opportunity in our medium-term plan. The region has the scale to move the needle as well as the potential to unlock even more value for shareholders and customers. We're positioning this business to lead the industry, and I feel very excited about the future.

The North American region covers the U.S., Mexico and Canada, and we're already starting from a place of leadership, either #1 or #2 in all of our core segments. We're supported by just under 50,000 people across more than 300 locations in the region, which gives us unparalleled geographic presence. We generate $19 billion in revenue and $3 billion in adjusted EBITDA, representing roughly 60% of our company's earnings. We offer an unmatched and fully integrated product range from raw material to paper, to converting in both corrugated and consumer packaging as well as a series of specialty businesses such as machine system, merchandising and display that all contribute to an unrivaled end-to-end offering.

This allows us to serve a broad customer base. And no matter what the packaging challenges, we are best positioned to deliver a customer-centric fiber-based solution. Separately, given our position in both paperboard and containerboard, we can support our growth in LatAm and our European business. In our first full year, we acted decisively and effectively and have already made significant progress towards building a stronger foundation.

We completed a successful integration effort, exceeding our regional synergy target. We also decluttered the organization and reduced our headcount by more than 4,600 people since the combination. We introduced the owner-operator model, which promotes a performance-led culture that empowers local teams and gives them the space and tools to be successful. Each plant is now a profit center and intercompany transactions between paper and conversion are strictly at arm's length.

Commercially, we have focused on value creation. We've made intentional choices that reduce short-term volumes from loss-making accounts, allowing us to rebuild positions at better margins over time. We brought our commercial organization closer to the customers and the plants that serve them. We bolstered the already-strong innovation capabilities of the legacy companies.

There is a lot of potential here, which I will expand on in a minute. Since I arrived in North America 18 months ago, I had the opportunity to surround myself with a phenomenal new team of very experienced and determined people who deliver day in, day out, and we will continue to invest to make the team stronger and more impactful. Regarding operations, we've taken decisive actions to shut inefficient capacity, both in paper and in converting. In addition, we have significantly reduced the number of loss-making operations within the region despite a very challenging backdrop.

Finally, we invested over $1.2 billion last year in the business, which includes a number of high-return quick wins program with more to come. All these actions are both structural and deliberate. They've simplified how we operate, increased accountability and positioned us for long-term value creation. Despite the progress we've already made, North America still represents the largest opportunity region within our company, as I said.

Our strategic plan outlines a path to bring our $3 billion in adjusted EBITDA to $4.2 billion over the next 5 years, which represents around a 7% CAGR, ending the period at over 20% margin. This is a margin enrichment of 400 basis points, 200 of which come from base business investment and 200 coming from strategic actions. We believe that innovation is core to our value creation proposition as emphasized by Tony. The combination of our 3 regions offers a wealth of expertise, and we're determined to shamelessly leverage the European and Latin American knowledge as I am sure they're determined to leverage ours.

In particular, the suite of tools that Tony indicated in his presentation is a very powerful way to deliver customer value consistently, delivering growth by solving customers' challenges. Grade restructurings in paperboard and rebalancing our long position in the most exposed grades such as SBS is essential. Monday's announcement of the La Tuque PM4 shutdown is a perfect example. We're present in all grades, intend to remain in all grades, but making the system stronger.

I have already seen some significant wins within our SBS business. Strategic investments will cover both conversion, focusing on automation, capabilities and quality. And on paper, focusing on operational excellence, performance packaging and lightweighting, both of which will deliver substantial value. This, of course, is underpinned by significant investments in systems and AI tools that accelerate our progress and make it more sustainable.

Finally, we will continue to review our system to optimize our industrial footprint, which will allow us to optimize the cost base of the business. I mentioned customer value creation on the previous slides. One of the key enablers to succeed on that promise is our unique end-to-end fiber-based packaging offering, as I said. Our full suite of containerboard and paperboard grades allows us to be substrate agnostic.

In consumer packaging, for instance, we have successfully migrated some packaging from CRB to SBS, from CRB to CUK and so on, purely responding to customer needs. Similarly, in containerboard, the availability of virgin and recycled grades as well as the full range of white containerboard allows us to proactively solve problems with a customer-first mindset. We can also respond to customer requests to move from corrugated to consumer packaging or vice versa. Our range of capabilities allows us to be a one-stop shop, whether the customer is looking for primary packaging, secondary shelf-ready packaging or tertiary logistics packaging, a display solution to increase visibility at point of sale or all of the above, we can help.

We can also offer a full suite of options regarding print that allows for unrivaled product visibility, including a state-of-the-art e-commerce and packing experience if needed. And if our customers require machine systems to increase their packing efficiency and automation, we can do that, too. Finally, and once again, we strongly believe in innovation. By increasing profit for customers via top line growth, cost improvements or both, we expand the room for our own margins and gain the right to win.

Our innovation capabilities cover performance packaging, supply chain efficiency, plastic substitution, sustainability and on-shelf presence. In addition to our Dallas and Mexico City experience centers, we've recently opened a new one in Richmond next to our paper lab with more to come. These centers are key tools to creating value-centric conversations with our customers and bring to life what makes us unique. In conclusion, I am a strong believer that all these elements make for a winning formula and will create the most compelling proposition in the industry.

It will enable us to make our ambition a reality. We have a clear plan. Our progress is already visible, and our momentum is building. I will now hand over to Saverio Mayer, CEO of our EMEA and APAC region.

Saverio?

Well, thank you, Laurent. And once again, good morning, everybody. I'll now cover EMEA and Asia Pacific. So EMEA and Asia Pacific, we operate as an integrated platform, which is a key competitive advantage in these markets.

Our integration starts with the containerboard system covering both recycled and kraftliner, which feeds into our corrugated operation across the region. In parallel, we have now consumer packaging operations in Europe and Asia Pacific, serving a broad range of end markets with differentiated solution and allowing us to have a holistic approach on their packaging needs. In addition, we operate Bag-in-Box platform that is present both Europe and in the Americas, giving us scale, innovation capability and cross-regional leverage in this high-value segment. In 2025, the region generated approximately $11 billion of sales and $1.6 billion of adjusted EBITDA with around 36,000 employees across 27 countries and holds #1 position in corrugated, containerboard and Bag-in-Box with a proven track record of continued outperformance.

We believe this level of integration allows us to optimize the system end-to-end, protect and grow margins and respond quickly to customers and market dynamics. We have successfully integrated the consumer packaging business and harmonized in the owner-operator model with P&L ownership, developing cross-selling opportunities across corrugated and consumers where customers are valuing the combined approach between corrugated and consumer, while also delivering ahead of target on the synergy program. We are also recognized as a reference point for both our customers and the wider industry on sustainability, and we hold the highest number of innovation awards in the industry, this reinforcing our leadership position.

Over the last number of years, we have delivered on 2 previous strategic plans, which have helped create a structurally stronger player in the market. Even in a challenging environment, the region has grown volumes, gained market share and increased EBITDA by focusing on functional value and differentiation. Innovation has been a key enabler. Our inno tools are now used across all regions, supported by a network of 28 experienced centers and powered by a community of around 1,000 designers and innovators across our plants in EMEA alone.

Altogether, this supports our goal of adjusted EBITDA increasing from $1.6 billion in 2025 to around $2.1 billion by 2030 with margins expanding from 14.9% returning to over 16% as reached in the past, and this is based on conservative market assumptions and with upside as conditions improve. So this year, we are starting our new strategic plan for 2026, 2030. Our differentiation strategy, along with the integrated model have been key to driving our margin resilience and creating long-term value. Over the years, we have built a proven playbook that has positioned us for growth, and we will continue to adapt and develop our region into 2030 built around 3 pillars: to be the company of choice through disciplined capital allocation and continuous efficiency improvement in our core markets.

A key differentiator here is our proven business model, which allows us to deploy capital at a regional system level rather than at a single asset level. This means we can involve all relevant assets within a region to deliver on a given investment, a unique competitive advantage and one which has the ability to support strong growth with an attractive returns on capital, to be the supplier of choice to our customers by accelerating proven innovation, delivering sustainable, high-performance packaging and provide superior functional value through quality and service. And of course, to be the employer of choice to our people by strengthening engagement, inclusivity and well-being and by empowering strong local leadership across the organization.

To support this strategy, we are investing in highly targeted and disciplined way. We invest in new converting technology where we see clear opportunities to create value and strengthen our offer to customers. As an example, let me mention in Bag-in-Box, the greenfield investment in Anderson in the U.S. This is a business we know very well since we already operate 2 Bag-in-Box plants in North America, and it's part of a global platform.

We saw a clear opportunity to further develop the U.S. market and the investment builds directly on existing capabilities together with our U.S. colleagues. Through this disciplined approach, we aim to make investments that are well targeted and deliver attractive returns. In summary, EMEA and Asia Pacific provide a stable, high-quality earnings base for the group. The region has consistently delivered margin resilience, strong cash generation and disciplined growth and will play a key role in supporting the group's 2030 value creation targets.

Let me now hand over to my colleague, Alvaro Henao, CEO of Latin America.

Thanks, Saverio, and good morning to everyone. It's really a privilege to be here with you today and have the opportunity to give you a clear data-driven view of why Latin America is not only a strong contributor to Smurfit Westrock, but a region with extraordinary potential for long-term profitable growth. Actually, I firmly believe we are an absolute gem, not only because of our leadership position in the region in market share and footprint, but because we have great assets and because we have great local management that really knows the markets and the countries in which we operate. Let me begin with our competitive advantage.

We are the #1 corrugated supplier across the region with leading positions in Brazil, Colombia and Argentina. And in the region, we also offer the broadest portfolio of paper packaging and full solutions, which includes consumer packaging, sacks, forestry, recycling and both recycling and virgin-based papers, such as our lightweight and eucalyptus-based papers. We are in a region that has higher margins and many growth opportunities. This combination of regional reach, completely integrated process and a broad portfolio of paper-based solutions is unique to Smurfit Westrock and very difficult to replicate.

Hence, it is a source of sustainable competitive advantage. As I will explain later, we have a proven track record and what really makes us different and experienced management team, built upon a capacity to attract the best talent in each of the countries in which we operate. Since the combination of Smurfit Kappa and WestRock, we integrated approximately 100,000 tons of paper from North America into our Central America and Caribbean operations, basically converting the whole region into a completely integrated system. This gives us access to a secure supply of North American paper that will allow us to grow in the future in the region organically and inorganically.

From a management and sales point of view, the market now only sees Smurfit Westrock, not the legacy companies. Finally, we were able to take advantages of synergies across the Mill and Forestry divisions that we have in both Colombia and Brazil. But let me tell you, the real differentiator in the region now as Smurfit Westrock is that we are fully leveraging on the European corrugated tools that we just -- that was spoken about and practices that have really made us successful and helped us increase our margins. And also that we have a North American mill system that is there to support us.

It's really a winning formula for the region. We have an unrivaled footprint. We have the broadest portfolio in the region, offering paper-based packaging solutions such as corrugated, consumer packaging and sacks, which has allowed us to reach more than 4,500 customers from our 44 facilities in 10 countries, a really, really unrivaled footprint. Our current strength is built on a long track record of disciplined execution and the experience and knowledge of having been in the region for more than 80 years.

The example to our success in the last 10 years is we have doubled our adjusted EBITDA. We have expanded the adjusted EBITDA margins by more than 500 basis points, reaching 23% and we delivered steady growth with a 4% CAGR in corrugated. This performance reflects our ability to navigate the economic volatility and strengthens our cost position and invest with discipline. And it shows something that is crucial.

When we invest, we grow and when we grow, we deliver. Now let's look forward. We have a clear ambition, to grow our adjusted EBITDA with a CAGR of 11%, reaching $800 million by 2030 and increase margins to 28%. We will get there through 4 growth engines.

Organic growth and market share expansion. Latin America offers significant opportunities in segments like agribusiness, protein, beverages, consumer goods and export-driven industries, especially in markets where we are not yet leaders. Cost efficiency and operational discipline. We continue to strengthen our competitive cost structure through scale, automation and logistic optimization, additional capacity.

We have a well-defined CapEx road map aligned with high-growth geographies, particularly Brazil, the Andean region and Central America. We will invest in consolidating our corrugated and packaging leadership, and we will also invest and continue to lower our costs, further increasing our competitive advantages in the region. Accretive acquisitions. There are meaningful opportunities for strategic acquisitions that we believe can take our number above the adjusted $800 million mark.

We want to grow in places where we are one of the leaders, but there is room to increase our market share like Brazil and also target regions where we're still in the process of expanding our business like Central America, Ecuador and Chile. And reinforcing all of this is our value-added proposition, powered by 3 experience centers and more than 150 designers who co-create solutions with our customers from the early stages of product development. We are the only company in the region that can offer a pan-regional footprint if that is what our customers want or if they want local solutions, we have the knowledge and the capabilities to deliver them.

In short, we believe we have a clear plan to reach an adjusted EBITDA of $800 million with a margin close to 28%. And if we make some bolt acquisitions not included in these numbers, we will exceed that target. The combination of local market knowledge, experienced management, access to a global network of corrugated and paper tools and knowledge and secured paper availability coming from North America, we believe will allow us to further expand our position as the corrugated and packaging leader in the region. As I expressed before, when we invest, we grow and when we grow, we will deliver.

Now I will hand over to Ken, who will explain the financials.

Thank you, Alvaro. Good morning, everyone. I want to now talk to you about delivering the path to delivering shareholder value over the medium term and why we believe that this path is both credible and executable. What you'll see through the next few slides is not a change in philosophy, but a continuation and most importantly, an acceleration of a business model that has proven itself over many years now applied across a broader global platform.

I want to take a step back first, though, for a few minutes to look at the pre-combination performance of Smurfit Kappa and most importantly, our track record. It tells a very clear story, consistent delivery, consistent delivery. Consistent delivery in all market conditions, a period, not unlike today, you might think, with many challenges and macro hurdles, but also a period where we outlined a medium-term plan for the business and more than delivered on that plan. This kind of performance does not happen by accident.

It's the product of a proven operating model executed by the leadership team with a deep understanding of our industry and our markets. Over this period, we delivered an adjusted CAGR EBITDA of 6.5%, more than double the peer average. This outperformance isn't the result of any single initiative, but of a disciplined and agile capital allocation strategy, our unique owner-operator culture and a core philosophy of placing the customer at the center of everything we do. Alongside this, we expanded our adjusted EBITDA margin by over 450 basis points, again, significantly ahead of our industry peers.

What this demonstrates is not just growth, but consistent profitable growth through the cycle. Over these years, we believe we cemented our position as the most innovative and sustainable packaging company in the world, and this enabled us to deliver significant value for our customers, supported by integrated model, a relentless focus on quality and service and an unrivaled portfolio of value-added packaging solutions. And importantly, our strong financial and operational delivery translated into meaningful returns for our shareholders. Over this period, we returned $2.8 billion to our progressive dividend policy and all the while reducing our net leverage from 2.4x to 1.4x, reflecting our long-standing commitment to balanced, disciplined capital allocation.

With the integration of WestRock now complete, we have the platform, capabilities and leadership team in place to replicate and build on that track record going forward. That sound foundation underpins the medium-term plan we're presenting today. And turning now to the plan itself, which really captures the scale of the opportunity ahead of us and how we are positioning the business to deliver on that opportunity. We are setting out specific and actionable financial goals through 2030. These goals are grounded in a detailed bottom-up plan across all our operations.

As you can see, by 2030, we aim to deliver approximately $7 billion of adjusted EBITDA and a group adjusted EBITDA margin of approximately 19%. This goal reflects the strength of our global operations, the benefits of our performance-led culture and the earnings quality we're building and maintaining across each of our 3 regions, as mentioned by Laurent, Saverio and Alvaro. A key driver of that progress is a significant growth opportunity in North America, which is a significant lever for value creation in the Smurfit Westrock, but it is not the only one. With the operating model now firmly in place and the heavy lifting of integration complete, our teams are empowered, our assets are better aligned and the actions we've taken already delivering higher margins and higher cash conversion.

Over the next 5 years, we aim to generate approximately $14 billion of discretionary free cash flow, reflecting not only the earnings power of the business under conservative top line assumptions, but also the ongoing benefits of our relentless focus on cost control and operational excellence. This level of cash generation provides substantial flexibility to invest in the business, further strengthen the balance sheet and make significant capital returns to our shareholders. At the same time, we see a clear path to delivering a 700 basis point improvement in return on capital employed, driven by margin expansion, improved asset utilization, operating efficiency gains and the advantages of a fully globally integrated system.

Return on capital employed has long been a hallmark of our performance and culture and the medium-term opportunity here is significant. And all of this is underpinned by our disciplined capital allocation framework, which I'll outline in a few moments, a framework that is flexible, agile and returns focused at its core. We are focused on continuing to strike the right balance between investing in high-return projects and delivering significant capital returns to shareholders, supported by our continuing strong balance sheet. So let me spend a few moments on the assumptions behind that $7 billion adjusted EBITDA target.

Our 2030 targets are supported by a structurally stronger business as our operating model and strategic investments lift the group adjusted EBITDA margin from 16% to 19%. Our plan assumes benign market growth based on third-party sources and through-the-cycle pricing broadly in line with current levels, reflecting a disciplined and conservative approach to our outlook. I once again remind you, it does not include the impact of any recently announced paper price increases in North America. We've assumed market growth of 1.6% in North America, 1.7% in Europe and 2% in Latin America.

These market growth rates provide a solid foundation, but it's the actions we are taking within the business that truly drives a step change in our earnings. A key pillar of the plan is that we assume below mid-market paper pricing in Europe and no price increase in North America and paper. In other words, the margin expansion we are targeting is not dependent on a pricing cycle. It is grounded in the operational improvements, the commercial focus and asset optimization actions already underway.

As Laurent outlined, we are already successfully executing on our creating value for our customer strategy in North America, a strategy well established in the Smurfit Kappa business. By deepening our customer partnerships, leveraging our innovation offering and driving P&L responsibility at the mill and the box plants, we are enhancing our customer mix, improving quality and service and driving a more resilient earnings model across the group. And as we continue to execute our creating value for our customer strategy and with the alignment of management team's incentives of our strategy, our plan expects all regions to contribute to profitable growth, driving meaningful margin expansion from 16% to 19% by 2030. And while we are confident in the plan as presented, there is potential upside, particularly with respect to the assumptions on growth and pricing as well as choosing to accelerate investment if the right opportunities arise.

Our capital allocation framework continues to be one of the most important drivers of long-term value creation and a core element of how we run the business. Over the next 5 years, we expect to deploy $13 billion of total capital expenditure, including maintenance and growth CapEx, with an average annual CapEx spend of about $2.6 billion. This level of investment is fully aligned with our strategy, enabling growth and cost takeout, improving operating efficiency and strengthening our integrated system. Importantly, we expect this investment to contribute to a 7 percentage point improvement in the group return on capital employed to approximately 15%, reflecting the high return nature of the projects we are targeting.

As a team with deep industry experience, we continue to view internally deployed capital as the lowest risk and highest quality use of capital, an approach that remains central to the future success of our business. Alongside this, we expect to be able to allocate $10 billion towards, for example, capital returns to shareholders and accretive acquisitions. Dividends remain the cornerstone of our capital return strategy. And as part of this, we anticipate returning about $5 billion in dividends over the next 5 years, subject to the necessary Board approvals and the consideration of a number of economic and other factors.

And from 2027 onwards, we expect to have capacity to undertake share repurchases as to be determined by the Board, representing an additional avenue to which we can return value to shareholders and underlining our confidence in our strategy and the cash generation profile of the business. Our approach to M&A will always remain disciplined, focused now on accretive bolt-on opportunities that strengthen our geographic footprint and complement our product portfolio. Underpinning all of this is the balance sheet of significant strength and flexibility, one that supports investment, ensures resilience across cycles and provides the optionality needed to pursue value-enhancing opportunities.

Taken together, this framework strikes the right balance between investing for growth and delivering substantial value back to our shareholders. What this next slide highlights is the scale of the value creation opportunity ahead of us and the significant capital we expect to have available for shareholders as we move through 2026 and on to 2030. Over the 5-year period, the earnings power of this business has the potential to generate substantial adjusted EBITDA, which after funding maintenance investment tax and other commitments, leaves us with a significant pool of available capital. From that starting point, we aim to invest behind high-return growth and efficiency projects and fund a progressive, reliable dividend stream.

And after doing this, we expect to generate approximately $5 billion of surplus capital. That surplus is a powerful number. It gives us the ability to accelerate investment where we see attractive returns and to introduce buybacks as an additional avenue for value creation. In short, this waterfall speaks directly to the strategic and financial flexibility of Smurfit Westrock.

It shows a business capable of investing for growth, driving meaningful returns and still generating significant excess capital. Looking more closely at capital expenditure, and our approach will remain disciplined and consistent. And as mentioned, we expect to deploy $13 billion in cumulative CapEx across North America, EMEA and LatAm. Approximately $9 billion of this is expected to be allocated to maintenance CapEx with, as I mentioned previously, $4 billion invested in growth CapEx.

We focus on a high volume of small, high-return projects, which translate into a projected annual CapEx spend of approximately $2.4 billion to $2.8 billion over the plan. We have always believed in being flexible and agile when it comes to capital deployment. And as you will see from the footnote at the bottom of this page, the average CapEx project is less than $4 million. With no project larger than $200 million and important to reiterate, as Tony mentioned earlier on, there are no grandiose projects in here.

And as I have mentioned, we expect our organic investments in the business to generate a 700 basis point improvement in return on capital employed. Turning now to the balance sheet. A balance sheet of significant strength and financial flexibility will remain a key underpin to our capital allocation strategy. We ended 2025 with net leverage around 2.6x and net debt just below $13 billion, and we are firmly committed to maintaining a strong investment-grade credit profile.

Our long-term target remains net leverage below 2x, and we are pleased to receive a Fitch upgrade to BBB+ with stable outlook. And as we progress towards that leverage target, the strength of our balance sheet gives us both flexibility to return excess capital to shareholders and to invest in growth when opportunities arise. It's a foundation that ensures Smurfit Westrock can continue to deliver for all of our stakeholders. And finally for me, to wrap things up, this slide captures one of the most important elements of our value proposition, the significant and growing capital returns we expect to deliver to our shareholders.

As discussed earlier, we have a proven track record of delivering progressive dividends, and that remains a core part of our equity story. Over the 2026 to 2030 period, we expect to return approximately $5 billion through dividends alone, subject to necessary Board approvals and depending on a number of economic and other factors. From 2027 onwards, we see an opportunity for a strong free cash flow generation to provide capacity for share buybacks, supporting our confidence in Smurfit Westrock's long-term value and strategy. In summary, this is a plan built on discipline, operational excellence and growing capital returns.

And one we believe positions Smurfit WestRock to deliver sustained value for all shareholders. And with that, I'll pass it back to Tony for some concluding remarks.

Well, thank you, Ken. As a significant shareholder in Smurfit WestRock, what I and I hope you expect to see is a plan that is ambitious, yet deliverable and a plan that demonstrates a long-term future and a strong foundation to build on. This is what we have presented today. Our competitive strengths include our performance-led culture, owner-operator model with the customer being at the heart of what we are and our global integrated platform with short lines of communication continually networking.

We also value our leadership and experience. You'll have already heard from my colleagues, their teams are equally strong and motivated. As a consequence of our management development programs, the next generation of leaders will foster the same culture and values that exist today. Our product portfolio and global reach is unique and unparalleled and allows us to serve customers.

We offer innovation, customer centricity, solving their pain, delivering value and helping them win in their own marketplaces. And we do this against the backdrop of continual improvement in our operations through disciplined capital expenditure, emphasizing cash flow and ensuring that we're adequately rewarded for the capital that we have employed. For me, shareholder value and owner-operator mindset go hand-in-hand. It's just not philosophical.

It's the person who turns the lights off to reduce the costs. It's the salespeople who makes that call at 6:30 instead of going home and it's the manager who looks at the share price every day because he cares about it. In summary, Smurfit Westrock has been around for 90 years. Many other companies you'll know in our sector have fallen by the wayside, yet we're still here.

And we're here because we do as we say and we say as we do. Performance is and always will be the basis of our credibility. We have delivered. We have delivered on acquisitions.

We've delivered on our plans. We've delivered because we have a proven track operating model, and we've delivered because we're in a business that is a good business. It's a very resilient business. It's a business that the world needs.

It's a business that our customers need, and we've also delivered because we have an unrivaled geographic footprint. The coming together of Smurfit Kappa and WestRock has given us a product portfolio that is unmatched in scale and diversity, which we continue to build on through all the unique applications we've shown you today. This is a world-class management team with a proven track record. And our interest as shareholders are fully aligned with yours.

And finally, I want to leave you with this final thought. The plan is not the summit of our ambition. There are many other opportunities to be pursued. And as we did in our previous plans, we'll continually update our thinking.

I believe Smurfit Westrock is at the beginning of an incredible journey, an accelerated growth path, a journey that will take us to the decades ahead. We have the magic formula. We have the right culture. We have the right people, and we have the right products.

And I hope after today, you see the team, you have the right team to successfully drive this business forward in the years ahead. I thank you all for your attention, both here in the room and on the net, and we look forward to taking any questions from you about this, our ambitious but deliverable plan. Thank you.

George Staphos, BofA. One question, right? You got it.

Others have taken a license, George. So you might slip in a second one, if you want.

I'll try to get a part in there. No. So if we look at the progression to $7 billion, $4 billion North America, $2 billion in Europe, $1 billion roughly in South America, can you help us understand how important the evolution of consumer is relative to getting to that target across the segments? Why it seems like you see consumer being married to corrugated makes more sense than what we've seen perhaps past companies have had difficulty getting that effectiveness?

And frankly, you've had questions about that when you first put the business together. Why you think it makes sense now? And then the last one related Tell us why South America, even though it's the smallest, Alvaro, it's very profitable. Why are you not worried about all the paper that apparently is coming in from Asia, Klabin starting up PM28, how that fits all in?

I'll stop there.

So George, I look at things quite simply. I said, can we be a very good business in consumer? And the answer is yes. We have some really fantastic businesses within our consumer portfolio that are very unique, very difficult for any competitors to replicate.

And we have some very good mills in the consumer business. What we have to continue to do is improve and adapt over the coming months and years to make all of our system good because there's some still work to be done, and you'll know that our CRB bills are not necessarily the best in the world. But at the same time, they are good for purpose for us, and they're highly cash generating and they don't take a lot of capital. So we always have to continually modify our business and invest in the business to make them high-return businesses.

And I believe that the consumer business with its market positioning, together with our corrugated business gives us a strategic advantage to sell more, to offer our customers a diversified portfolio, as Laurent has said, and allows us to get better returns over a period of time -- over time. There's still work to do, but we have some really great businesses within that business. And it's a central plank for growth for us. I mean, frankly speaking, in many of the countries in Europe, for example, we can't really grow in corrugated that much because we're too big, but we can grow quite a bit in consumer if we find the right acquisition target that gives us value.

So I think it's a very good business, and I don't think we should be throwing away good businesses, and it integrates well with our system.

Tony, how much of EBITDA growth is in consumer to your point...

We don't segment that, George. But I don't think it's materially different to our corrugated businesses. We expect all improvement across all segments, and there might be a bit on one side versus the other, but probably there's a little bit more improvement to get in our corrugated business, a little bit, but it's not material.

Yes, probably the simplest way, George, I think that is broadly the kind of the profile stays the same true in terms of percentages and scale.

Alvaro, do you want to take the Latin American question?

Sure. On Latin America and the paper side, I think that one of the big advantages that we have is that now that we have access to the North American paper, we're basically isolated from a paper point of view because we are now -- we used to be short, very short when we were Smurfit Kappa. Now our system is completely integrated into North America. So that basically isolates us from any paper swings or scarcity of paper that the region every now and then has.

The other issue is that notwithstanding what you have said, the region still continues to be basically supplied by the U.S. We do see every now and then paper coming from different regions, lately from Europe. But when you look at the import numbers into the region, the region main supplier -- sorry, the main supplier of paper into the region is the U.S. So -- and then going into your comment about the growth of Klabin, yes, Klabin invests every now and then in cycles, they invest in their paper mills.

Let me say just in Brazil, we have a very nice operation, which is very low cost again. And the internal Brazilian market, whenever they do invest, is able to absorb the majority of those investments. So I mean, I don't foresee any material disruption into the overall paper supply balance and pricing in the region.

We go back -- forward to back. Phil?

Phil Ng from Jefferies. Laurent, I really appreciate you being here. You're actually a perfect person to ask this question because you came from Europe, you had the history of value selling in Europe. How is that transition in the U.S. just because I think a lot of the customers aren't as accustomed to having some of these solutions that you guys are offering.

So how is that journey? Are you talking to the same people in terms of negotiating? Is it procurement guys or marketing guys? Just kind of give us some context, the differences between North America and Europe and the margin difference perhaps on that value solution versus non-value solution?

So I think the impression that we're having altogether is that the timing to introduce that particular thinking process is really right and that the market somehow has been expecting out there us to move or other people to move. It just happens -- and the timing is really good. And the engagement that we have, whether it's -- as you rightly pointed, procurement, marketing or other people, they're asking what is going to be the next way to get to the optimal packaging cost in their case, but also function and delivery to their system. And the type of people that we're talking to and Tony and all of us have referred extensively to this concept of experience centers, they're not just buzzwords.

They're really places where you put the customer in a position to share with us their pain points, their aspirations, also the type of issues that they have to solve, and they really value in the U.S., and we've had great response both in Dallas, where we have a historical presence that goes before the coming together of the 2 companies, but now in Richmond and same in Mexico, there's been phenomenal response from very large customers of ours. We're really appreciating the type of engagement and the type of discussion. I think really that the timing is right for us to engage in those conversations.

And I think it's also feeding the pipeline conversation we're having earlier on.

Any color on the margin difference between the value stuff versus non-value?

So this is when I turn to Ken.

I would say, Phil, that the obviously, if you're giving solutions to customers and you're able to save them money, then you want to share in that benefit. And so typically, if you're doing something for your customer that's winning -- helping him, you tend to get some of that contribution back. So obviously, the more of these that we have, the better it is. But it's more as well that you get given more business.

So you're able to optimize your system better. And so it's a -- we're only starting this in the U.S. I mean, Laurent mentioned that we're about to open up the second -- we have a second and we're about to open up a third experience center in our Chicago region, just so that we can cover the U.S. because it's a big country. And our Head of Innovation here in the United States, who's a great guy we just hired in from, where was it, [indiscernible] somewhere like that.

He's only with us 9 months now. So it's -- we're really just at the beginning of this journey of value selling here in the U.S. And there's a whole iteration to go through of training of people. But what I've heard, and I haven't experienced myself directly, but what I've heard with the customers that go to the Dallas center, they're just blown away by the opportunities for them to save money.

And in that scenario, then everybody wins.

Lewis Roxburgh from Goodbody. Just on growth CapEx, it seems pretty broad-based across sort of businesses and regions, but just sort of highlight any sort of standout focus there. And then just a clarification, the $4 billion amounts to about $0.8 billion each year and you add that on to depreciation, it's about $3.3 billion. So is the delta there just sort of depreciation coming less?

No. The depreciation stream will probably stay a little bit more than $2.6 billion, Lewis, over the period. So remember as well as part of our DNA at the moment, post transaction, you've got an amortizing intangible that kind of trails off about $140 million a year. So as you're getting towards the 5 years, you're depreciating 5x $140 million coming out of the base and you're adding back in the new CapEx.

So broadly, you could consider D&A to be in that kind of $2.6 billion, $2.7 billion space across the life of the plan as well is probably the simplest way to think about it.

Lewis, on the capitals, I mean, one of the mantras we have in our company is adaptability. So we talk about this all the time. So Laurent or Alvaro or Saverio might say, this is our plan for next year in a machine and, I don't know, take it France. And then we find out there's a little bit less growth in France, there's a little bit more growth in Germany.

So we adapt. And so there's no -- as Ken said, there's no project bigger than $200 million, and that would typically be paper machine, press section, winder, something like that, that will be -- so there's no really big projects, but there's a lot of small projects. And then as Laurent said, the biggest opportunity we continue to see is obviously, as wages have gone up and salaries have increased due to inflation, there is -- and robotics is going to become a bigger thing. We see a lot of opportunity to invest in machines to take away continuing labor costs.

And so that's something that is very much top of mind. And as robotics continues to develop, that's something that we'll latch on to. But within this plan, there will always be some flex because we might say that project, we haven't seen the growth we expected to see in Brazil. So therefore, will it go to Colombia or we go from Colombia to Mexico, it just depends on the year.

But that's why I said in my opening or in my closing that we're always adaptable and we're always looking, and we continue to keep the strat plan on our -- it's hot on our plate every year. And when we look at our budgets, we'll be looking at how does that sit with regard to the strat plan, et cetera, et cetera.

On the margin improvement in North America, you talked about going from about 16% to 20%. And then you also include about half of it from base business, half of it from strategic action. So if I look at kind of the column to the right, and we see footprint optimization, obviously, strategic action. What else would be in the strategic action bucket?

Most of it would seem to sort of be running the business, the base business better. So maybe if you could help us understand what would be in what type of bucket.

Yes. I'll let Laurent elaborate a bit further, but think about the kind of the base piece, Mark, as kind of ongoing maintenance CapEx, which you will get a return for, but it's not really the driver of growth there. In terms of the extra 200 basis points, that is growth CapEx, where we see, back to Tony's point, where you can take cost out. where you see growth coming through, whether it's machines or customers or end markets and investing behind that. And indeed, that's part of where that the single biggest project is in there, too.

So in the own system. But Laurent, do you want to give more color on how you see the strategic piece?

Sure. So basically, what we call base is being a good custodian of your assets, basically making sure that things are in order, what needs to be replaced is replaced. But any time you do that, also looking at ways and manners to generate that little extra bit of capacity money...

Maybe Laurent talk about the latest mill project we just approved for Hopewell,was it? As an example...

Yes. You can do like refurbish, for instance, on a paper machine, your drive and because the drive is obsolete not maintained by the manufacturer or whatever, so you need to upgrade that. And in the process, you gain, I don't know, 3 meters per minute or 10 sheet per minute on the paper machine that just generates that. So it's being good custodian of assets.

Then when you look to strategic projects, you're more thinking in terms of pockets of growth either by segments or geography where you think that you can line up more capacity because there is a sales backing or sales opportunity there. And it's potentially redeveloping one particular part in a paper mill that will give you either different types of products or enhanced matching between the products and what the market desires. So anything that goes beyond the simple upkeep of the assets and usually with higher return profiles. So typically, we save 200 basis points on both and you have 2/3 on the maintenance piece and 1/3 on the strategic piece, yielding more or less the same result.

And just to clarify on that is how to interpret the margin improvement, not just the use of capital, the way you were describing?

That's right.

Okay. And then just as a quick follow-up. Tony, you've talked about in the past how there was a great opportunity in the converting assets in North America, the box businesses. Can you maybe kind of update us on how that's progressing and how big a part of the program achieving those types of goals and how you go about it?

It's a huge part of it. When we came into this, we had a lot of plants losing a lot of money. And as we've shed some business and adjusted the operating costs of the plants to reflect lower volume, but at the same time, opportunities that have come into the plant as well. You've seen our corrugated business move as a whole from significant loss maker to -- not significant, but somewhat profit-making now.

And as I said, we're only at the start of that because as we implement better volume, more valued volume for our customers across our piece and getting rid of bad business, frankly speaking, that you're paying people to run, you shouldn't be paying people to run bad business. So we are bringing in better business, and that will be -- I've said 8% to 12% margins in corrugated is our aspiration, and we will get there because we have the tools, we have the knowledge. So you go from negative a couple of hundred million to let's say, $1 billion, it's a material improvement in the business -- the underlying business.

I mean, the best example I can give you is Saverio will talk to you about a plant we have, which was basically 6 or 7 years ago, plus or minus breakeven in the country, and we had another competitor in that country. It's just 2 of us in that country. And our competitor is now closing down and we're making over $1.5 million a month in that country from nothing because we've invested and we brought our tools and we've done all the things that we have to do and our competitors just walked away. And so that's an even bigger opportunity for us.

So we're not going to be able to do that everywhere as quickly as we'd like to do it everywhere. But even in one facility we have in Chicago, which is a great well-equipped facility. When I went there the first time, [Mark], I didn't post about it because I was so ticked off about their performance. And then I went back a year later, and they're now making close to $1 million a month because they've changed some things, they've adjusted their costs.

They've changed some customers, and you have a really motivated management team now who is really -- but we have to do that in 100 plants. I mean it doesn't happen overnight. But that's -- I don't know if you want to comment.

No, I think it's exactly right. Tony talked about flexibility and so it can. And I think we're there saying there are certainly a number of box plants where there are evident issues about equipment. And there's a kind of mantra going around in the company.

You need a good corrugator and you need one solid piece of good converting equipment to match your business. And in some cases, we don't have that. So these are fairly obvious places, and it would be built in the plan. But then there's another number of plants that are not performing so well, and it's still unclear whether it's management or whether it's equipment.

And rather than rush and put an equipment that would be complicated if you grab new equipment on a bad team, I like you can really make a catastrophe there. So we're taking our time to assess. So they are the fairly obvious ones and the less obvious ones that we'll take the time over the plan to address one and the other.

Sorry, let's go back to front because -- sorry Gabe, just -- you get next. You can have 2 questions, just for that.

Richard Burke with Bloomberg Intelligence. Looking at your projections for 2030, I noticed that the North American EBITDA margin is 20% and Europe is only 16% being kind of more U.S.-centric focused for my career, I'm just trying to understand, is there structural differences that the margins won't get in Europe won't ever get to the U.S.? Or are we at a different point in the cycle? Or just kind of your thoughts behind that?

Yes, Richard, it's a very good question because we ask ourselves the same question. So thanks for that. I mean the reality is that Europe has always been a couple of points behind Europe, maybe for the embedded costs in Europe. But over time, we have improved ourselves and that number is far away from where we have been before.

I mean I think we've been up to 19% in Europe. And frankly speaking, we're putting together what the guys gave us having obviously been reviewed at length by ourselves. And I will be very disappointed in Saverio if he is only 16% margin. So...

Easy. Easy. I think -- sorry, I think Richard as well, if you flip that down to the balance sheet and capital allocation, you get much more bang for your book in terms of capital going into Europe versus North America from a cost perspective. So in defense of my good friend, Saverio, I'd say that his return on capital employed is probably mid-teens versus where Laurent is.

And that's been a sustaining factor for the strong balance sheet. The free cash flow generation has always been much better at Europe, equally working capital, where Saverio would hang out below 10% and Laurent slightly ahead. So it sort of goes back to the fundamental thesis, I think what we're speaking about, which is you take a business across 3 regions and you take the pooled capital and the pooled resource around free cash flow and you allocate and get the returns out, whether it's the returns from an EBITDA perspective and margin or the returns from a cash flow, balance sheet and shareholder return perspective, but it's pooled resources.

I think another interesting point, and Saverio has mentioned it in his presentation. He's been through 2 strategic processes. And in addition, that Smurfit and Kappa came together in 2005. So we've been spending the last 15 years, 20 years nearly -- 20 years, 21 years, I was never good at accounting and I was never good at accounting. We've been spending the last 21 years making Europe a great organization and investing in Europe and developing our asset base.

So we have a fabulous position with fabulous people, with fabulous assets. But 21 years ago, when you came to Smurfit and Kappa, you would have said they weren't such great assets. But now anybody who would look at our company in Europe would say, wow, these are fantastic businesses, fantastic assets, fantastic people and certainly should earn more than 16% EBITDA margins. I agree with you.

So Saverio, that's...

No, no. It's -- we've been there before. I mean we went to 18%, 19% and this is -- and as I said, this is not including any pricing or market condition that through the cycles, we'll be there again. And so we expect to -- that we can deliver back where we deliver.

Today, the 16% mark in Europe, it's an ambitious target. It's a good target, which doesn't mean, as we did in the past, we can not go above that. I mean as situation improves, conditions are improving in general. So we'll get there.

I think what's interesting is that Europe has been a bit of a funk since the Ukrainian war. I mean, obviously, if you take a view that, that's all going to end, then you could see a very big rebuilding in Europe. It's 380 -- how many million people in Europe...

It's 400 million.

400 million people. It's a very big economy, and we have #1 and #2 positions in most of the markets there, and we've got the best market position. So it's a really exciting place for us if there's any sort of economic growth. And as I say, we've got an incredible mill system, we've got an incredible paper system -- sorry, corrugated system, and we've got incredible specialty businesses there that are today earning 14%, 15% in a market where most of our competitors are earning next to nothing or very low single digits.

Gabe, sorry.

Gabe, Wells Fargo. Thank you, Tony. First, give credit where it's due. Initial report card, $4.9 billion of EBITDA, the guide was pretty consistent at least with our expectations, so putting points on the board.

When I try to dissect or translate the $1.2 billion in North America and I translate from, I guess, margin to dollars, the margin profile would suggest on the current business about $800 million of improvement. And then the most difficult thing to lock down or pin down has been the 1.6% growth in North America. So if I do the math on that, it suggests about $300 million, $350 million of contribution from market growth. A, is that about right?

And then b, would you identify that as the most risky piece of the North American ambition?

Listen, the market last year was not good. I mean we actually attribute about 3% to 4% of our negative 10% to the market. If you look at the FBA numbers, if you look at our 2 competitors that have reported, they've been 2 -- they're around negative 2%, all of them. And so if you look at that, then you'd sort of say, well, we've lost a little share because of the market -- the business we've given up.

So maybe the market -- and they've gained the share, so therefore, the market is 3%, 4% down. And it has specifically hit maybe a company like ours a little bit harder because a lot of the big branded goods, which is where we were selling a lot of have been hurt during the last year. I don't think that's going to continue, Gabe, to be honest. I think that sooner or later, there will be more promotions by a lot of companies.

There will be more competition by a lot of our competitors to -- sorry, not competitors, by our customers as they start to go into trying to sell more themselves. And that should actually be good for inflation in the United States and Ergo will be good for box demand in the U.S. So I do believe that this is still a very strong economy in the United States, and I do believe that it will get back to growth. And I do believe that -- and that's what we all believe.

And I think that we'll be a big beneficiary of that. So I do believe the numbers that [indiscernible] have put out of 1.5% are doable. And so I would then think that our numbers are going to be possible to make.

I think, Gabe, maybe to help you thinking slightly is broadly, when we think about 1% volume growth, that generally equates to somewhere around, call it, $60 million of EBITDA for the group. That's probably helpful for your thinking.

This is Nico Piccini with Truist Securities. I just wanted to dial in on rebalancing your long SBS position and if that's going to be derived more from converting like CRB business into SBS or if there's further opportunities like the La Tuque closure. And with the converted business, how sticky is that given prices will likely ultimately rebalance between SBS and CRB?

Laurent?

Probably a combination of all the things that you've suggested. I think the work we're doing -- first of all, SBS has undergone secular pressures. But equally, and I mentioned that in my presentation, we're seeing very interesting opportunities on that particular segment. The other thing is SBS, as we said, like this subset agnostic is something that we've really put in motion and is helping.

And potentially, ultimately, as we see fit and if required, then further consolidation in one form or the other, it doesn't necessarily have to be related to restructuring, but reducing the exposure on SBS can be part of the solution as well -- so -- and they're all being worked on at the moment. And whenever those projects come to fruition, then we would come back to you with all the information. But it's going to be essentially a combination of all the options that you've indicated.

I think the switching -- the stickiness is an important point. I think the customers that we've seen that are switching are switching for quality. yes, SBS price coming down is helpful for sure to make them switch. And if there was a massive jump in SBS pricing versus CRB, maybe they'll switch back. But what is fundamental is that the product ranges from CRB to SBS, it's a quality and visual issue. and it's not a price issue anymore because of the price of SBS.

Once they go there, will they switch back if the price of SBS goes zooming up or not, I can't say. But they are switching because it's a better product in many instances for the fridge or for the shelf, fridge for CUK because it's all craft based and shelf because it's brighter for SBS. So there is a quality issue. There's also a machine issue that the machines actually run better with regard to SBS or CUK rather than CRB.

That's not to say that CRB doesn't have a place. It has a very strong place, too. I mean we are I mean we're grade agnostic. We will work with our customers on exactly what they want, what their belief is if they want recycled board, we have it.

We're the #2 producer despite the fact that our mills are not necessarily more modern. We're the #2 producer in the United States of CRB with acceptable mills and good quality that our customers do not want to be locked into any single supplier. So it's a very positive position that we have. And as I say, we're grade agnostic and say, listen, you want this, this or even as Laurent said, which I think is really important to remember, very microflute corrugated, which is an important opportunity as well for them.

Okay. Well, I think we've had our time. I really appreciate you all making the effort to come and join us. It's been a privilege to be able to present this plan to you.

And we do really thank you for your effort of being here this morning, bright and breezy. And thankfully, we've warmed up New York for you to walk on. So thank you.