The global packaging provider exceeded its $400 million synergy target following the 2024 merger and announced plans to close 600,000 tons of inefficient capacity. Management issued 2026 guidance forecasting annual Adjusted EBITDA growth as industry conditions stabilize.
Smurfit Westrock Plc (NYSE: SW) reported net income of $98 million for the fourth quarter of 2025, representing a net income margin of 1.3%. The company generated net sales of $7,580 million during the period and increased its quarterly dividend by 5% to $0.4523 per ordinary share. Performance for the full fiscal year was characterized by significant portfolio optimization and the realization of merger-related cost savings.
Key Developments
The company finalized the integration of Smurfit Kappa and WestRock, surpassing its committed synergy target of $400 million during 2025. To streamline operations, Smurfit Westrock closed approximately 600,000 tons of high-cost or inefficient production capacity and reduced its total headcount by more than 3,000 employees. These actions were part of a broader strategy to optimize the company’s global asset base and transition toward a value-based selling model.
Financial Performance
For the quarter ended December 31, 2025, Adjusted EBITDA reached $1,172 million with an Adjusted EBITDA margin of 15.5%. Net cash provided by operating activities for the quarter was $1,195 million, contributing to an adjusted free cash flow of $679 million. On a full-year basis, net sales rose to $31,179 million from $21,109 million in 2024, a year which only included partial results from the combined entity. Full-year net income was $699 million, and adjusted basic earnings per share for the year were $2.05, compared to $2.34 in the prior year.
Business Outlook and Strategy
Management issued guidance for the first quarter of 2026, expecting Adjusted EBITDA between $1.1 billion and $1.2 billion. For the full year 2026, the company targets Adjusted EBITDA in the range of $5.0 billion to $5.3 billion. The operational strategy focuses on a “Medium-Term Plan” aimed at accelerating growth through efficiency, innovation, and asset optimization. In North America, the company is prioritizing a better business mix in its corrugated business, while the consumer business is focused on addressing near-term capacity issues in solid bleached sulfate (SBS) production.
Sector and Macro Context
The 2025 results were achieved against a backdrop of difficult market conditions and significant weather events in North America and Europe. In the North American region, the company took additional downtime to manage working capital and balance its production system. Despite these challenges, management noted a generally improving industry operating environment. The EMEA, APAC, and LATAM regions maintained strong market positions, with Latin America specifically identified as a region of continued growth following the completion of several expansion projects.
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