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By the numbers: Q4 and full-year 2025
Q4 net sales: $6B
Up from $3.9B in Q4 2024, prior to the DS Smith acquisition
2025 net sales: $23.6B
Up from $15.8B in 2024, prior to the DS Smith acquisition
Q4 net loss: $2.36B
Compared with a $88M net profit from continuing operations in Q4 2024, prior to the DS Smith acquisition
2025 net loss: $2.84B
Compared with a $725M net profit from continuing operations in 2024, prior to the DS Smith acquisition
- Results: International Paper advanced its cost improvement strategy in 2025 and delivered approximately $510 million of run-rate benefits, despite global economic headwinds, said CEO Andy Silvernail on an earnings call Thursday. Demand continued to be softer in the Europe, Middle East and Africa business than in North America, although there were challenges across the board.
- Company split: Executives spent much of the call discussing details of another Thursday morning announcement: IP plans to split into two independent, publicly traded companies based on geography. Almost exactly a year ago, Memphis, Tennessee-based IP finalized its acquisition of London-based DS Smith, and now it intends to spin off the Europe, Middle East and Africa business. “By acting now, we can more fully enable the full potential of each business,” Silvernail said. IP plans to invest approximately $400 million into EMEA this year to position it for success after the split, which is expected to be complete in 12 to 15 months.
- Optimization plan continues: Post-split, “both businesses will continue to emphasize the powerful operating discipline of 80/20,” Silvernail said, referencing the optimization plan he launched shortly after joining the company in May 2024. IP has implemented its “lighthouse model,” or regional hub strategy, in 85% of its box plant system, and it is “beginning to see reliability improvements as we've expanded our lighthouse learnings to all our mills this year,” said CFO Lance Loeffler. Executives launched 80/20 in Europe last year. Silvernail told analysts that European market conditions and the length of time to remove costs in EMEA did not play into the decision to spin off a new company.
- Additional closures: IP will continue to assess its mill and plant footprint. Since October 2024, IP has closed numerous facilities in North America and some in Europe, cutting more than 4,500 jobs. In 2025, IP closed 20 facilities in EMEA and cut 1,400 positions there, and now it’s eyeing seven additional closures and at least 700 job cuts in the region this year, Loeffler said. These upcoming actions are not at the scale of other recent cuts, and are related to getting “into the nitty gritty around things like supply chain and procurement,” Silvernail said. “The costs have got to be counted down to the penny.”
- One-time costs: Executives are still assessing impacts from last week’s winter storm, but they expect it to be a $20 million to $25 million hit to the first quarter. Separately, IP expects to incur about $80 million in non-repeating costs this year for converting its Riverdale mill in Alabama to produce containerboard instead of uncoated freesheet.
- Outlook: IP’s demand experienced a strong start to January, but executives anticipate that will taper off as the year progresses. The company expects $24.1 billion to $24.9 billion in sales across the combined business in 2016. Free cash flow is estimated to be $300 million to $500 million. “In the second half, we expect our performance to materially accelerate,” Loeffler said.
