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By the numbers: Q1 2025
Net sales: $7.66B
North America net sales: $4.67B
EMEA and APAC net sales: $2.58B
Net income: $382M
- Overview: Smurfit Westrock CEO Tony Smurfit described “strong” first-quarter 2025 performance during Thursday’s earnings call, highlighting “structural improvement” in North America following July’s combination of Smurfit Kappa and WestRock. Yet, he noted “the environment was somewhat challenging” for that region as well as Europe, Asia and Africa. Latin America “performed very well,” he said, and expansion efforts there will continue, especially in Brazil. Third-party paper sales were lower in Q1, but consumer packaging shipments increased 1% year over year, said CFO Ken Bowles.
- Closures: Hours before the earnings call, Smurfit Westrock announced it would close four facilities or production lines, which will impact a collective 650 employees in St. Paul, Minnesota; Forney, Texas; and two undisclosed sites in Germany. Wednesday’s announcement, combined with announcements to take down a machine in Mexico and another in the Netherlands, will result in removing 600,000 tons of capacity from Smurfit Westrock’s system. These closures support ongoing streamlining efforts, and the company will continue to optimize its system as necessary going forward, executives said.
- Additional impacts: Separately from the newly announced shutdowns, the company’s streamlining efforts since last July have resulted in 1,800 North American employees leaving, Smurfit said. Prior to the new closures, Smurfit Westrock anticipates incurring additional downtime across its system in Q2 that will cost about $100 million more than in Q1.
- New investments: Smurfit Westrock is investing in 25 more efficient converting machines, which will lower operating costs, with implementation scheduled to begin next year. In addition, “I have authorized us to implement close to 140 ‘quick-win projects,’ as we call them, that will deliver around $50 million of extra EBITDA in the North American region, and over 60 projects in the European and APAC region, which will deliver $20 million in 2026 and beyond,” Smurfit said.
- Other investments: The company’s earnings release noted the recent additions of two converting plants to better support customers, including the one that opened in Longview, Washington, in November 2023. The other is in Pleasant Prairie, Wisconsin, where the groundbreaking occurred last summer and construction is now complete, a spokesperson confirmed. Full operations are expected to begin there soon. The company also noted it’s completing a new bag-in-box facility in South Carolina.
- Tariffs: At the moment, the company is “definitely seeing a lot of nervousness out there with customers, but not yet any material issue” from tariffs, Smurfit said. That’s partially due to shifting some production among sites in Canada and the United States. “Because we did a lot of cross-border trade with customers, mainly in the consumer side, we have been adjusting our supply chains over the last three months,” he said. Modeling shows potential company costs of about $100 million, annualized, if all the tariffs are implemented as proposed. “We do need to see consumer confidence coming back, and I think that comes back to the whole question of tariffs and uncertainty,” Smurfit said.
- Outlook: Demand appeared to even out in the second half of April following weakness in March and early April, Smurfit said. Still, executives’ expectations are muted for the second half of 2025. “We’re not banking on a very strong recovery, we’re banking on some recovery,” Smurfit said. The company is on track to realize $400 million in post-merger synergies, about $350 million of which would occur in 2025. It projects $1.2 billion in adjusted earnings before interest, taxes, depreciation and amortization for Q2 and between $5 billion and $5.2 billion for the full year.
