Smurfit WestRock Ltd
SW 10-Q Quarter ended Sept. 30, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
For the quarterly period ended
September 30, 2025
OR
For the transition period from to
Commission File Number:
001-42161
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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N/A
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(Address of principal executive offices)
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(Zip Code)
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
☒
As of October 31, 2025, the registrant
had
522,186,327
ordinary
shares, nominal value $0.001 per share, issued and outstanding.
2
TABLE OF CONTENTS
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Page
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EXPLANATORY NOTE
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Item 4. Controls and Procedures
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PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
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Item 1A. Risk Factors
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3. Defaults Upon Senior Securities
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Item 4. Mine Safety Disclosures
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Item 5. Other Information
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Item 6. Exhibits
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Signatures
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3
EXPLANATORY NOTE
On April 26, 2024, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement
on Form S-4 (file number 333-278185), as amended (as supplemented by the prospectus filed with the SEC on April 26, 2024, the
“Registration Statement”), of Smurfit WestRock Limited, formerly known as Cepheidway Limited and re-registered as an Irish public
limited company and renamed Smurfit Westrock plc (the “Company” or “Smurfit Westrock”), to register ordinary shares of $0.001
each in the capital of Smurfit Westrock (the “Smurfit Westrock Shares”) to be issued to the holders of shares of common stock of
WestRock Company (“WestRock”), pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction
Agreement”), among Smurfit Westrock, Smurfit Kappa Group plc (“Smurfit Kappa”), WestRock and Sun Merger Sub, LLC (“Merger
Sub”) pursuant to which (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement under the Companies Act
2014 of Ireland (as amended) and (ii) Merger Sub merged with and into WestRock, (the “Merger” and, together with the Smurfit
Kappa Share Exchange, the “Combination”). The Combination closed on July 5, 2024. A detailed description of the terms of the
Combination is included in the Registration Statement. Upon the completion of the Combination on July 5, 2024, Smurfit Kappa and
WestRock each became wholly owned subsidiaries of Smurfit Westrock with Smurfit Kappa shareholders owning approximately
50.3% and WestRock shareholders owning approximately 49.7%. Prior to the closing of the Combination, Smurfit Westrock had no
operations other than activities related to its formation and the Combination. Smurfit Kappa was determined to be the accounting
acquirer in the Combination; therefore, the historical Consolidated Financial Statements of Smurfit Kappa for periods prior to the
Combination are presented as the historical financial statements of the Company. Unless otherwise indicated or the context otherwise
requires, references in this Quarterly Report on Form 10-Q to “Smurfit Westrock,” the “Company,” “our Company,” “we,” “our,” and
“us,” and the like terms, refer to the business and operations of Smurfit Kappa and its wholly-owned subsidiaries, which prior to July
5, 2024, did not include WestRock, when referring to the periods prior to the closing of the Combination, and refer to the combined
company (Smurfit Westrock, including, among others, its subsidiaries Smurfit Kappa and WestRock) when referring to the periods
after the Combination.
This Quarterly Report on Form 10-Q is being filed with respect to the interim quarterly period ended
September 30, 2025
.
Accordingly, the disclosures herein, including the financial statements and related Management’s Discussion and Analysis, describe
the business, financial condition, results of operations, liquidity and capital resources of Smurfit Westrock following the Combination,
except as expressly provided herein. For periods prior to the Combination, the disclosures herein reflect the financials of Smurfit
Kappa, except as expressly provided herein.
4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes certain “forward-looking statements” (including within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
regarding, among other things, the plans, strategies, outcomes, outlooks and prospects, both business and financial, of Smurfit
Westrock, the expected benefits of the completed Combination of Smurfit Kappa and WestRock Company (including, but not limited
to, synergies as well as our scale, geographic reach and product portfolio, or impact of announced closures), and any other statements
regarding Smurfit Westrock’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows,
or future events or performance. Forward-looking and other statements in this Quarterly Report on Form 10-Q may also address the
Company’s corporate responsibility progress, plans, and initiatives (including environmental matters), and the inclusion of such
statements is not an indication that these contents are necessarily material to investors or required to be disclosed in our filings with
the SEC. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject
to change in the future.
Statements that are not historical facts, including statements about the beliefs and expectations of the management of Smurfit
Westrock, are forward-looking statements. Words such as “may”, “will”, “could”, “should”, “would”, “anticipate”, “intend”,
“estimate”, “project”, “plan”, “believe”, “expect”, “target”, “prospects”, “potential”, “commit”, “forecasts”, “aims”, “considered”,
“likely”, “estimate” and variations of these words and similar future or conditional expressions are intended to identify forward-
looking statements but are not the exclusive means of identifying such statements. While the Company believes these expectations,
assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and
unknown risks and uncertainties, many of which are beyond the control of the Company. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur.
Important factors that could cause actual results to differ materially from plans, estimates or expectations include: ongoing weakness
and/ or changes in demand environment; the impact of economic downtime; our ability to deliver on our closure plan and associated
efforts; our future cash payments associated with these initiatives; potential future cost savings associated with such initiatives; the
amount of charges and the timing of such charges or actions described herein; potential future impairment charges; accuracy of
assumptions associated with the charges; economic, competitive and market conditions generally, including macroeconomic
uncertainty, customer inventory rebalancing, the impact of inflation and increases in energy, raw materials, shipping, labor and capital
equipment costs; geo-economic fragmentation and protectionism such as tariffs, trade wars or similar governmental actions affecting
the flows of goods, services or currency (including the implementation of tariffs by the U.S. federal government and reciprocal tariffs
and other protectionist or retaliatory measures governments in Europe, Asia, and other countries have taken or may take in response);
the impact of prolonged or recurring U.S. federal government shutdowns and any resulting volatility in the capital markets or
interruptions in the Company’s access to capital; the impact of public health crises, such as pandemics and epidemics and any related
company or governmental policies and actions to protect the health and safety of individuals or governmental policies or actions to
maintain the functioning of national or global economies and markets; reduced supply of raw materials, energy and transportation,
including from supply chain disruptions and labor shortages; developments related to pricing cycles and volumes; intense competition;
the ability of the Company to successfully recover from a disaster or other business continuity problem due to a hurricane, flood,
earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or
man-made events, including the ability to function remotely during long-term disruptions; the Company’s ability to respond to
changing customer preferences and to protect intellectual property; the amount and timing of the Company’s capital expenditures;
risks related to international sales and operations; failures in the Company’s quality control measures and systems resulting in faulty or
contaminated products; cybersecurity risks, including threats to the confidentiality, integrity and availability of data in the Company’s
systems; works stoppages and other labor disputes; the Company’s ability to establish and maintain effective internal controls over
financial reporting in accordance with Sarbanes Oxley Act of 2002, as amended, and remediate any weaknesses in controls and
processes; the Company’s ability to retain or hire key personnel; risks related to sustainability matters, including climate change and
scarce resources, as well as the Company’s ability to comply with changing environmental laws and regulations; the Company’s
ability to successfully implement strategic transformation initiatives; results and impacts of acquisitions by the Company; the
Company’s significant levels of indebtedness; the impact of the Combination on the Company’s credit ratings; the potential
impairment of assets and goodwill; the availability of sufficient cash to distribute dividends to the Company’s shareholders in line
with current expectations; the scope, costs, timing and impact of any restructuring of operations and corporate and tax structure;
evolving legal, regulatory and tax regimes; changes in economic, financial, political and regulatory conditions in Ireland, the United
Kingdom, the United States and elsewhere, and other factors that contribute to uncertainty and volatility, natural and man-made
5
disasters, civil unrest, geopolitical uncertainty, and conditions that may result from legislative, regulatory, trade and policy changes
associated with the current or subsequent Irish, U.S. or UK administrations; loss contingencies or legal proceedings instituted,
threatened, future or pending against the Company, including with respect to antitrust related matters; actions by third parties,
including government agencies; the Company’s ability to promptly and effectively integrate Smurfit Kappa’s and WestRock’s
businesses; the Company’s ability to achieve the synergies and value creation contemplated by the Combination; the Company’s
ability to meet expectations regarding the accounting and tax treatments of the Combination, including the risk that the Internal
Revenue Service may assert that the Company should be treated as a U.S. corporation or be subject to certain unfavorable U.S. federal
income tax rules under Section 7874 of the Internal Revenue Code of 1986, as amended, as a result of the Combination; other factors
such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other
factors such as changes in the political, social and regulatory framework in which the Company’s group operates or in economic or
technological trends or conditions, and other risks set forth under the heading “Risk Factors” in Part I, Item 1A. in the Company’s
Annual Report on
Form 10-K for the year ended December 31, 2024,
and as may be updated in this and other subsequent Quarterly
Reports on Form 10-Q.
The Company’s forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q or as of the date they are
made. Neither the Company nor any of its associates or directors, officers or advisers provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any such forward-looking statements will actually occur. You are
cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules, the Disclosure Guidance and Transparency Rules, the UK Market Abuse
Regulation and other applicable regulations), the Company is under no obligation, and the Company expressly disclaims any intention
or obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or
otherwise.
6
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF
SMURFIT WESTROCK PLC
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Page
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Condensed Consolidated Balance Sheets as of
September 30, 2025
and
December 31, 2024
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Condensed Consolidated Statements of Operations for the three and
nine months ended
September 30, 2025
and
September 30, 2024
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Condensed Consolidated Statements of
Comprehensive Income (Loss)
for the three and
nine months ended
September 30, 2025
and
September 30, 2024
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Condensed Consolidated Statements of Cash Flows for the
nine months ended
September 30, 2025
and
September 30,
2024
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Condensed Consolidated Statements of Changes in Equity for the three and
nine months ended
September 30, 2025
and
September 30, 2024
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Notes to Condensed Consolidated Financial Statements
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7
Smurfit Westrock plc
Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except share data)
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September 30,
2025
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December 31,
2024
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||
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Assets
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|||
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Current assets:
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|||
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Cash and cash equivalents (amounts related to consolidated variable interest entities of
$
$
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$
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$
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Accounts receivable, net (amounts related to consolidated variable interest entities of
$
$
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Inventories
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Other current assets
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Total current assets
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Property, plant and equipment, net
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Goodwill
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Intangibles, net
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Prepaid pension asset
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Other non-current assets (amounts related to consolidated variable interest entities of
$
$
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Total assets
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$
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$
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Liabilities and Equity
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|||
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Current liabilities:
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|||
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Accounts payable
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$
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$
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Accrued compensation and benefits
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Current portion of debt
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Other current liabilities
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Total current liabilities
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Non-current debt due after one year (amounts related to consolidated variable interest entities of
$
million
and
$
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Deferred tax liabilities
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Pension liabilities and other postretirement benefits, net of current portion
|
|
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Other non-current liabilities (amounts related to consolidated variable interest entities of
$
and
$
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Total liabilities
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Commitments and Contingencies (Note 16)
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Equity:
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|||
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Preferred stock;
$
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Common stock;
$
shares outstanding at
September 30, 2025
and
December 31, 2024
, respectively
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|
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Deferred shares;
€
September 30, 2025
and
December 31, 2024
, respectively
|
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Treasury stock; at cost;
December 31, 2024
, respectively
|
(
|
(
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Capital in excess of par value
|
|
|
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Accumulated other comprehensive loss
|
(
|
(
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Retained earnings
|
|
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Total shareholders’ equity
|
|
|
|
|
Noncontrolling interests
|
|
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Total equity
|
|
|
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Total liabilities and equity
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$
|
$
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
8
Smurfit Westrock plc
Condensed Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
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Net sales
|
$
|
$
|
$
|
$
|
|||
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Cost of goods sold
|
(
|
(
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(
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(
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|||
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Gross profit
|
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|||
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Selling, general and administrative expenses
|
(
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(
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(
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(
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|||
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Impairment and restructuring costs
|
(
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(
|
(
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(
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|||
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Transaction and integration-related expenses associated with
the Combination
|
(
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(
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(
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(
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|||
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Operating profit
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|||
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Pension and other postretirement non-service income
(expense), net
|
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(
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|||
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Interest expense, net
|
(
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(
|
(
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(
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|||
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Other expense, net
|
(
|
(
|
(
|
(
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|||
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Income (loss) before income taxes
|
|
(
|
|
|
|||
|
Income tax expense
|
(
|
(
|
(
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(
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|||
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Net income (loss)
|
|
(
|
|
|
|||
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Net loss attributable to noncontrolling interests
|
|
|
|
|
|||
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Net income (loss) attributable to common shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
Basic earnings (loss) per share attributable to common
shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
Diluted earnings (loss) per share attributable to common
shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
|
|||||||
9
Smurfit Westrock plc
Condensed Consolidated Statements of
Comprehensive Income (Loss)
(Unaudited)
(in millions)
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
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Net income (loss)
|
$
|
$
(
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$
|
$
|
|||
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Other comprehensive income (loss), net of tax:
|
|||||||
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Foreign currency translation gain (loss)
|
|
|
|
(
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|||
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Defined benefit pension and other postretirement benefit
plans adjustments
|
|
(
|
(
|
|
|||
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Net gain (loss) on cash flow hedges
|
|
|
(
|
|
|||
|
Other comprehensive income (loss), net of tax
|
|
|
|
(
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|||
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Comprehensive income (loss)
|
|
(
|
|
|
|||
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Comprehensive loss attributable to noncontrolling interests
|
|
|
|
|
|||
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Comprehensive income (loss) attributable to common
shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
|
|||||||
10
Smurfit Westrock plc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)
|
Nine months ended September 30,
|
|||
|
2025
|
2024
|
||
|
Operating activities:
|
|||
|
Net income
|
$
|
$
|
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|||
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Depreciation, depletion and amortization
|
|
|
|
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Impairment charges
|
|
|
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|
Cash surrender value increase in excess of premiums paid
|
(
|
(
|
|
|
Share-based compensation expense
|
|
|
|
|
Deferred income tax benefit
|
(
|
(
|
|
|
Pension and other postretirement funding more than cost
|
(
|
(
|
|
|
Other
|
|
|
|
|
Change in operating assets and liabilities, net of acquisitions and divestitures:
|
|||
|
Accounts receivable
|
(
|
(
|
|
|
Inventories
|
(
|
|
|
|
Other assets
|
(
|
(
|
|
|
Accounts payable
|
(
|
(
|
|
|
Income taxes
|
|
|
|
|
Accrued liabilities and other
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
Investing activities:
|
|||
|
Capital expenditures
|
(
|
(
|
|
|
Cash paid for purchase of businesses, net of cash acquired
|
(
|
(
|
|
|
Proceeds from corporate owned life insurance
|
|
|
|
|
Proceeds from sale of property, plant and equipment
|
|
|
|
|
Other
|
|
|
|
|
Net cash used for investing activities
|
(
|
(
|
|
|
Financing activities:
|
|||
|
Additions to debt
|
|
|
|
|
Repayments of debt
|
(
|
(
|
|
|
Debt issuance costs
|
(
|
(
|
|
|
Changes in commercial paper, net
|
(
|
(
|
|
|
Other debt (repayments) additions, net
|
(
|
|
|
|
Repayments of finance lease liabilities
|
(
|
(
|
|
|
Tax paid in connection with shares withheld from employees
|
(
|
(
|
|
|
Purchases of treasury stock
|
|
(
|
|
|
Cash dividends paid to shareholders
|
(
|
(
|
|
|
Other
|
|
(
|
|
|
Net cash (used for) provided by financing activities
|
(
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(
|
|
|
Decrease in cash and cash equivalents
|
(
|
(
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
Cash and cash equivalents at end of period
|
$
|
$
|
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
11
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
The following table presents a summary of the changes in equity for the
three months ended
September 30, 2025
:
|
Shares of
Common Stock
|
Common Stock
|
Capital in
Excess of Par
Value
|
Treasury Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Shareholders'
Equity
|
Noncontrolling
Interest ("NCI")
|
Total
|
|
|
Balance at June 30, 2025
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
|
Net income (loss)
|
—
|
—
|
—
|
—
|
|
—
|
|
(
|
|
|
Other comprehensive income, net of tax
|
—
|
—
|
—
|
—
|
—
|
|
|
—
|
|
|
Share-based compensation
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Issuance of common stock net of tax paid in
connection with shares withheld from employees
|
—
|
—
|
|
—
|
(
|
—
|
|
—
|
|
|
Dividends declared (
$
|
—
|
—
|
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Balance at September 30, 2025
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
(1)
Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The following table presents a summary of the changes in equity for the
three months ended
September 30, 2024
:
|
Shares of
Common Stock
|
Common Stock
|
Capital in
Excess of Par
Value
|
Treasury Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Shareholders'
Equity
|
Noncontrolling
Interest
|
Total
|
|
|
Balance at
June 30, 2024
(1)
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
|
Net loss
|
—
|
—
|
—
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Other comprehensive income, net of tax
|
—
|
—
|
—
|
—
|
—
|
|
|
—
|
|
|
Share-based compensation
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Shares of Smurfit Westrock common stock issued
to WestRock shareholders and NCI assumed as a
result of the Merger
|
|
|
|
—
|
—
|
—
|
|
|
|
|
Converted WestRock restricted stock units and
stock options attributable to pre-Combination
services
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Issuance of common stock net of tax paid in
connection with shares withheld from employees
|
|
—
|
—
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Dividends declared (
$
|
—
|
—
|
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Balance at September 30, 2024
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
(1)
Pursuant to the
Transaction Agreemen
t, on July 5, 2024 each issued ordinary share, par value
€
0.001
per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for
one ordinary share, par value
$
0.001
per share, of Smurfit Westrock (a “Smurfit Westrock Share”). The exchange of shares is reflected retroactively to the earliest period
presented.
(2)
Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
12
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
The following table presents a summary of the changes in equity for the
nine months ended
September 30, 2025
:
|
Shares of
Common Stock
|
Common Stock
|
Capital in
Excess of Par
Value
|
Treasury Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Shareholders'
Equity
|
Noncontrolling
Interest
|
Total
|
|
|
Balance at
December 31, 2024
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
|
Net income (loss)
|
—
|
—
|
—
|
—
|
|
—
|
|
(
|
|
|
Other comprehensive income, net of tax
|
—
|
—
|
—
|
—
|
—
|
|
|
—
|
|
|
Share-based compensation
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Shares distributed by Smurfit Kappa Employee
Trust
|
—
|
—
|
(
|
|
—
|
—
|
|
—
|
|
|
Issuance of common stock net of tax paid in
connection with shares withheld from employees
|
|
—
|
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Cancellation of deferred shares by Smurfit Kappa
Employee Trust
|
—
|
—
|
—
|
|
(
|
—
|
|
—
|
|
|
Dividends declared ($
|
—
|
—
|
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Balance at September 30, 2025
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
(1)
Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
13
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
The following table presents a summary of the changes in equity for the
nine months ended
September 30, 2024
:
|
Shares of
Common Stock
|
Common Stock
|
Capital in
Excess of Par
Value
|
Treasury Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Shareholders'
Equity
|
Noncontrolling
Interest
|
Total
|
|
|
Balance at
December 31, 2023
(1)
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
|
Net income
|
—
|
—
|
—
|
—
|
|
—
|
|
—
|
|
|
Other comprehensive loss, net of tax
|
—
|
—
|
—
|
—
|
—
|
(
|
(
|
—
|
(
|
|
Share-based compensation
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Shares distributed by Smurfit Kappa Employee
Trust
|
—
|
—
|
(
|
|
—
|
—
|
|
—
|
|
|
Purchases of treasury stock
|
—
|
—
|
—
|
(
|
—
|
—
|
(
|
—
|
(
|
|
Shares of Smurfit Westrock common stock issued
to WestRock shareholders and NCI assumed as a
result of the Merger
|
|
|
|
—
|
—
|
—
|
|
|
|
|
Converted WestRock restricted stock units and
stock options attributable to pre-Combination
services
|
—
|
—
|
|
—
|
—
|
—
|
|
—
|
|
|
Issuance of common stock net of tax paid in
connection with shares withheld from employees
|
|
—
|
—
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Dividends declared (
$
|
—
|
—
|
|
—
|
(
|
—
|
(
|
—
|
(
|
|
Balance at September 30, 2024
|
|
$
|
$
|
$
(
|
$
|
$
(
|
$
|
$
|
$
|
(1)
Pursuant to the Transaction Agreement, on July 5, 2024 each issued ordinary share, par value
€
0.001
per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for
one ordinary share, par value
$
0.001
per share, of Smurfit Westrock (a “Smurfit Westrock Share”). The exchange of shares is reflected retroactively to the earliest period
presented.
(2)
Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
14
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Unless the context otherwise requires, or unless indicated otherwise, “we”, “us”, “our”, “Smurfit Westrock” and “the
Company
” refer
to the business of
Smurfit Westrock plc
, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.
Smurfit Westrock plc
is a company limited by shares that is incorporated in Ireland.
We are a multinational provider of sustainable
fiber-based paper and packaging solutions. We partner with our customers to provide differentiated, sustainable paper and packaging
solutions that enhance our customers’ prospects of success in their markets. Our team members support customers around the world
from our operating and business locations in North America, South America, Europe, Asia, Africa, and Australia.
We derived the Condensed Consolidated Balance Sheet at
December 31, 2024
from the audited consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2024
(the “2024 Consolidated Financial
Statements”). In the opinion of management, all normal recurring adjustments necessary for a fair statement of the
Condensed
Consolidated Financial Statements have been included for the interim periods reported.
The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting
principles generally accepted in the U.S. (“GAAP”) for interim financial information and with Article 10 of Regulation S-X of the
Securities and Exchange Commission (“SEC”). Accordingly, they omit certain notes and other information from the 2024
Consolidated Financial Statements. Therefore, these
Condensed
Consolidated Financial Statements should be read in conjunction with
the 2024 Consolidated Financial Statements. The results for the three and
nine months ended
September 30, 2025
are not necessarily
indicative of results that may be expected for the full year.
The preparation of the
Condensed
Consolidated Financial Statements in conformity with U.S. GAAP requires management to make
certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
Condensed
Consolidated
Financial Statements, disclosures about gain contingencies and contingent liabilities and the reported amounts of revenues and
expenses, including income taxes during the reporting period.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
There have been no changes to the Company’s significant accounting policies as described in “Note 1. Description of Business and
Summary of Significant Accounting Policies” of the 2024 Consolidated Financial Statements, other than as noted below.
15
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
When we close a facility, if necessary, we recognize a write-down to reduce the carrying value of related property, plant and
equipment and lease right-of-use (“ROU”) assets to their fair value and record charges for severance and other employee-related costs.
For termination costs associated with employees covered by a written or substantive plan, a liability is recorded when it is probable
that employees will be entitled to benefits and the amount can be reasonably estimated. For termination costs associated with
employees not covered by a written and broadly communicated policy covering involuntary termination benefits (severance plan), a
liability is recorded for costs to terminate employees (one-time termination benefits) when the termination plan has been approved and
committed
to by management, the employees to be terminated have been identified, the termination plan benefit terms are
communicated, the employees identified in the plan have been notified and actions required to complete the plan indicate that it is
unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The timing and amount of an accrual is
dependent upon the type of benefits granted, the timing of communication and other provisions that may be provided in the benefit
plan.
If property, plant and equipment become impaired as a result of the Company’s restructuring efforts, these assets are written down to
their fair value less costs to sell, as the Company commits to dispose of them, and they are no longer in use. Depreciation is
accelerated on property, plant and equipment for the period of time the asset continues to be used until the asset ceases to be used.
For facility closures, we also generally expect to record costs for equipment and inventory relocation, facility carrying costs and costs
to terminate a lease or contract before the end of its term.
Identifying and calculating the cost to exit operations requires certain assumptions to be made, the most significant of which are
anticipated future liabilities, including severance costs, contractual obligations, and the adjustments of property, plant and equipment
and lease ROU assets to their fair value. Our estimates are reasonable, considering our knowledge of the industry we operate in,
During the
nine months ended
September 30, 2025
, there were no newly issued or newly applicable accounting pronouncements
adopted that had, or are expected to have, a material impact on the Condensed Consolidated Financial Statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This
ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate
reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the
Company
’s annual reporting
periods beginning after December 15, 2024.
Adoption is either with a prospective method or a retrospective method of transition.
Early adoption is permitted. The Company has evaluated the impact of this ASU and will include new disclosures using the
prospective method of transition in the consolidated financial statements included in the Company’s Annual Report on Form 10-K for
the year ended
December 31, 2025
.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). This ASU requires new financial
statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03
will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.
Adoption is either with a prospective method or a retrospective method of transition. Early adoption is permitted. The
Company
is
currently evaluating the impact of this standard on its disclosures in the consolidated financial statements.
16
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Transaction agreement with WestRock Company
Pursuant to the Transaction Agreement, the Combination closed on July 5, 2024. The aggregate merger consideration was
$
13,461
million
.
Unaudited Pro Forma Combined Financial Information
months ended
September 30, 2024
, as if the
Merger
had occurred on January 1, 2023.
|
Three months ended
|
Nine months ended
|
||
|
September 30, 2024
|
September 30, 2024
|
||
|
Net sales
|
$
|
$
|
|
|
Net income attributable to common shareholders
|
|
|
The unaudited pro forma combined financial information also reflects pro forma adjustments for the following material nonrecurring
expenses directly attributable to the Merger, each reflected in 2023, as if the Merger had occurred on January 1, 2023:
i.
$
238
million
and
$
351
million
of transaction-related costs recorded during the three and
nine months ended
September 30, 2024
respectively, of both Smurfit Kappa and WestRock, including retention-related bonuses; and
ii.
amortization of the fair value adjustment to acquired inventories of
$
227
million
recorded during the three and
nine months ended
September 30, 2024.
For more details related to the transaction with WestRock, refer to “Note
2. Acquisitions
” of the 2024 Consolidated Financial
Statements.
We report our financial results of operations in the following
three
reportable segments:
i.
North America, which includes operations in the U.S., Canada and Mexico.
ii.
Europe, the Middle East and Africa (“MEA”) and Asia-Pacific (“APAC”).
iii.
Latin America (“LATAM”), which includes operations in Central America and the Caribbean, Argentina, Brazil, Chile, Colombia,
Ecuador and Peru.
Segment profitability is measured based on Adjusted EBITDA,
defined as
income (loss) before income taxes
,
unallocated corporate
costs
,
depreciation, depletion and amortization
,
interest expense, net
,
pension and other postretirement non-service income (expense),
net
,
share-based compensation expense
,
other expense, net
,
impairment and restructuring costs
,
transaction and integration-related
expenses associated with the Combination
,
amortization of fair value step up on inventory
a
nd other specific items that management
believes are not indicative of the ongoing operating results of the business.
17
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Three months ended September 30, 2025
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
|||
|
Net sales (unaffiliated customers)
|
$
|
$
|
$
|
$
|
|||
|
Add net sales (intersegment)
|
|
|
|
|
|||
|
Net sales (aggregate)
|
|
|
|
|
|||
|
Less segment expenses:
|
|||||||
|
Segment cost of goods sold
|
(
|
(
|
(
|
||||
|
Segment selling, general and administrative expenses
|
(
|
(
|
(
|
||||
|
(
|
(
|
(
|
(
|
||||
|
Segment Adjusted EBITDA
|
$
|
$
|
$
|
$
|
|||
|
Unallocated corporate costs
|
(
|
||||||
|
Depreciation, depletion and amortization
|
(
|
||||||
|
Impairment and restructuring costs
|
(
|
||||||
|
Transaction and integration-related expenses associated with
the Combination
|
(
|
||||||
|
Interest expense, net
|
(
|
||||||
|
Pension and other postretirement non-service income, net
|
|
||||||
|
Share-based compensation expense
|
(
|
||||||
|
Other expense, net
|
(
|
||||||
|
Other adjustments
|
(
|
||||||
|
Income before income taxes
|
$
|
Other adjustments in the table above
include losses at closed facilities of
$
2
million
.
|
Three months ended September 30, 2024
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
|||
|
Net sales (unaffiliated customers)
|
$
|
$
|
$
|
$
|
|||
|
Add net sales (intersegment)
|
|
|
|
|
|||
|
Net sales (aggregate)
|
|
|
|
|
|||
|
Less segment expenses:
|
|||||||
|
Segment cost of goods sold
|
(
|
(
|
(
|
||||
|
Segment selling, general and administrative expenses
|
(
|
(
|
(
|
||||
|
(
|
(
|
(
|
(
|
||||
|
Segment Adjusted EBITDA
|
$
|
$
|
$
|
$
|
|||
|
Unallocated corporate costs
|
(
|
||||||
|
Depreciation, depletion and amortization
|
(
|
||||||
|
Impairment and restructuring costs
|
(
|
||||||
|
Transaction and integration-related expenses associated with
the Combination
|
(
|
||||||
|
Amortization of fair value step up on inventory
|
(
|
||||||
|
Interest expense, net
|
(
|
||||||
|
Pension and other postretirement non-service income, net
|
|
||||||
|
Share-based compensation expense
|
(
|
||||||
|
Other expense, net
|
(
|
||||||
|
Other adjustments
|
(
|
||||||
|
Loss before income taxes
|
$
(
|
Other adjustments in the table above
include losses at closed facilities of
$
8
million
.
18
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Nine months ended September 30, 2025
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
|||
|
Net sales (unaffiliated customers)
|
$
|
$
|
$
|
$
|
|||
|
Add net sales (intersegment)
|
|
|
|
|
|||
|
Net sales (aggregate)
|
|
|
|
|
|||
|
Less segment expenses:
|
|||||||
|
Segment cost of goods sold
|
(
|
(
|
(
|
||||
|
Segment selling, general and administrative expenses
|
(
|
(
|
(
|
||||
|
(
|
(
|
(
|
(
|
||||
|
Segment Adjusted EBITDA
|
$
|
$
|
$
|
$
|
|||
|
Unallocated corporate costs
|
(
|
||||||
|
Depreciation, depletion and amortization
|
(
|
||||||
|
Impairment and restructuring costs
|
(
|
||||||
|
Transaction and integration-related expenses associated with
the Combination
|
(
|
||||||
|
Interest expense, net
|
(
|
||||||
|
Pension and other postretirement non-service income, net
|
|
||||||
|
Share-based compensation expense
|
(
|
||||||
|
Other expense, net
|
(
|
||||||
|
Other adjustments
|
(
|
||||||
|
Income before income taxes
|
$
|
Other adjustments in the table above include losses at closed facilities of
$
16
million
.
19
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Nine months ended September 30, 2024
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
|||
|
Net sales (unaffiliated customers)
|
$
|
$
|
$
|
$
|
|||
|
Add net sales (intersegment)
|
|
|
|
|
|||
|
Net sales (aggregate)
|
|
|
|
|
|||
|
Less segment expenses:
|
|||||||
|
Segment cost of goods sold
|
(
|
(
|
(
|
||||
|
Segment selling, general and administrative expenses
|
(
|
(
|
(
|
||||
|
(
|
(
|
(
|
(
|
||||
|
Segment Adjusted EBITDA
|
$
|
$
|
$
|
$
|
|||
|
Unallocated corporate costs
|
(
|
||||||
|
Depreciation, depletion and amortization
|
(
|
||||||
|
Impairment and restructuring costs
|
(
|
||||||
|
Transaction and integration-related expenses associated with
the Combination
|
(
|
||||||
|
Amortization of fair value step up on inventory
|
(
|
||||||
|
Interest expense, net
|
(
|
||||||
|
Pension and other postretirement non-service expense, net
|
(
|
||||||
|
Share-based compensation expense
|
(
|
||||||
|
Other expense, net
|
(
|
||||||
|
Other adjustments
|
|
||||||
|
Income before income taxes
|
$
|
Other adjustments in the table above include a reimbursement of a fine from the Italian Competition Authority of
$
18
million
, that was
partially offset by losses at closed facilities of
$
8
million
.
|
Nine months ended September 30,
|
|||
|
2025
|
2024
|
||
|
Capital expenditures:
|
|||
|
North America
|
$
|
$
|
|
|
Europe, MEA and APAC
|
|
|
|
|
LATAM
|
|
|
|
|
Total reportable segments
|
|
|
|
|
Corporate
|
|
|
|
|
Total capital expenditures
|
$
|
$
|
|
20
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Total assets by segment were:
|
September 30,
|
December 31,
|
||
|
2025
|
2024
|
||
|
Assets:
|
|||
|
North America
|
$
|
$
|
|
|
Europe, MEA and APAC
|
|
|
|
|
LATAM
|
|
|
|
|
Total reportable segments
|
|
|
|
|
Corporate
(1)
|
|
|
|
|
Total assets
|
$
|
$
|
(1)
Corporate assets are composed primarily of Property, plant and equipment, net, Deferred tax assets, Recoverable or refundable
Disaggregated
Revenue
nine months ended
September 30, 2025
and
2024
.
Net sales
are
attributed to segments based on the location of production.
|
Three months ended September 30, 2025
|
|||||||
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
||||
|
Revenue by product:
|
|||||||
|
Paper
|
$
|
$
|
$
|
$
|
|||
|
Packaging
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
|
Three months ended September 30, 2024
|
|||||||
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
||||
|
Revenue by product:
|
|||||||
|
Paper
|
$
|
$
|
$
|
$
|
|||
|
Packaging
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
|
Nine months ended September 30, 2025
|
|||||||
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
||||
|
Revenue by product:
|
|||||||
|
Paper
|
$
|
$
|
$
|
$
|
|||
|
Packaging
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
21
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Nine months ended September 30, 2024
|
|||||||
|
North America
|
Europe, MEA
and APAC
|
LATAM
|
Total
|
||||
|
Revenue by product:
|
|||||||
|
Paper
|
$
|
$
|
$
|
$
|
|||
|
Packaging
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
Packaging
revenue
is
derived mainly from the sale
of corrugated and consumer packaging products. The remainder of packaging
revenue
is composed of bag-in-box, packaging solutions and other paper-based packaging products.
Contract assets relate to the manufacture of certain products that have no alternative use to us, with right to payment for performance
completed to date on these products, including a reasonable profit. Contract assets are reduced when the customer takes title to the
goods and assumes the risks and rewards for the goods. Contract liabilities represent obligations to transfer goods or services to a
customer for which we have received consideration and are reduced once control of the goods is transferred to the
customer
.
On the Condensed Consolidated Balance Sheets, contract assets reported within “Other current assets” wer
e
$
178
million
and
$
197
million
at
September 30, 2025
and
December 31,
2024
, respectively, and contract liabilities reported within “Other current
liabilities” were
$
5
million
and
$
5
million
at
September 30, 2025
and
December 31,
2024
, respectively.
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Impairment charges
|
$
|
$
|
$
|
$
|
|||
|
Restructuring costs
|
|
|
|
|
|||
|
Impairment and restructuring costs
|
$
|
$
|
$
|
$
|
|||
Impairment Charges
The components of impairment charges are as follows:
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Impairment of property, plant and equipment
|
$
|
$
|
$
|
$
|
|||
|
Impairment of other assets
|
|
|
|
|
|||
|
Total impairment charges
|
$
|
$
|
$
|
$
|
|||
These impairment charges are recognized in the Condensed Consolidated Statements of Operations caption “Impairment and
restructuring costs”
.
22
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
September 30, 2025
and
2024
is as follows:
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
North America
|
$
|
$
|
$
|
$
|
|||
|
Europe, MEA and APAC
|
|
|
|
|
|||
|
LATAM
|
|
|
|
|
|||
|
Total impairment charges recognized for property, plant
and equipment
|
$
|
$
|
$
|
$
|
|||
Of the total impairment charges,
$
1
million
and
$
177
million
for the three and
nine months ended
September 30, 2025
, respectively,
were triggered by the announcement on April 30, 2025, whereby the Company announced it would permanently close the Company’s
coated recycled board mill in St. Paul, Minnesota, U.S. and discontinue production at its containerboard mill in Forney, Texas, U.S.
(the “Mill Closures”). We stopped production at these
two
U.S. mills in June 2025 and May 2025, respectively. Additionally, the
Company announced it had initiated consultations with local works councils in Germany with a view to permanently closing
two
converting facilities there (together with the Mill Closures, the “April 2025 Announced Closures”). In the third quarter of 2025, we
reached agreements with the local work councils in Germany and are in the process of closing those
two
converting facilities.
Following our decision to permanently close the above facilities, the Company assessed the recoverability of the associated long-lived
assets being property, plant and equipment in accordance with ASC 360, “Property, Plant, and Equipment”. The fair value of the
property, plant and equipment assets was determined based on their estimated selling price in an orderly transaction between market
participants at the measurement date. As a result of this assessment,
$
1
million
and
$
160
million
for the three and
nine months ended
September 30, 2025
, respectively, was recognized for impairment charges of the property, plant and equipment of the facilities
affected by the April 2025 announcement. The remainder of the impairment charges recognized related to spare parts included in
inventories in these facilities.
Restructuring Costs
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
North America
|
$
|
$
|
$
|
$
|
|||
|
Europe, MEA and APAC
|
|
|
|
|
|||
|
LATAM
|
|
|
|
|
|||
|
Total restructuring costs
|
$
|
$
|
$
|
$
|
|||
The table below sets forth restructuring costs by type incurred:
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Severance charges
|
$
|
$
|
$
|
$
|
|||
|
Other costs
|
|
|
|
|
|||
|
Total restructuring costs
|
$
|
$
|
$
|
$
|
|||
Of the total restructuring costs,
$
6
million
and
$
60
million
for the three and
nine months ended
September 30, 2025
relates to the April
2025 Announced Closures.
23
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
current liabilities
"
in the Company's Condensed Consolidated Balance Sheets:
|
Severance charges
|
Other costs
|
Total
|
|||
|
Balance at December 31, 2024
|
$
|
$
|
$
|
||
|
Charges for the period
|
|
|
|
||
|
Payments
|
(
|
(
|
(
|
||
|
Balance at September 30, 2025
|
$
|
$
|
$
|
The majority of these charges will be paid within 12 months of the reporting date. The Company expects to recognize future additional
charges of
$
39
million
associated with the April 2025 Announced Closures through 2026.
The remaining restructuring costs and related restructuring accruals relate to individual restructuring actions which are individually
and cumulatively immaterial.
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Transaction-related expenses associated with the
Combination
|
$
|
$
(
|
$
|
$
(
|
|||
|
Integration-related expenses associated with the
Combination
|
(
|
(
|
(
|
(
|
|||
|
Total transaction and integration-related expenses
associated with the Combination
|
$
(
|
$
(
|
$
(
|
$
(
|
|||
Transaction-related Expenses Associated with the Combination
Transaction-related expenses associated with the Combination comprise of banking and financing related expenses as well as legal and
other professional services which are directly attributable to the Combination and retention payments that are contractually committed
to and associated with the successful completion of the Combination.
Integration-related Expenses Associated with the Combination
We incur integration expenses post-acquisition that reflect work performed to facilitate merger and acquisition integration and
primarily consist of professional services and personnel and related expenses, such as work associated with information systems.
We
consider transaction and integration expenses to be corporate expenses regardless of the segment or segments involved in the
transaction.
24
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
September 30,
|
December 31,
|
||
|
2025
|
2024
|
||
|
Gross accounts receivable
|
$
|
$
|
|
|
Less: Allowances
|
(
|
(
|
|
|
Accounts receivable, net
|
$
|
$
|
Allowances include the reserves for allowance for estimated credit impairment losses, returns, early settlement discounts and rebates
|
September 30,
|
December 31,
|
||
|
2025
|
2024
|
||
|
Finished goods
|
$
|
$
|
|
|
Work-in-progress
|
|
|
|
|
Raw materials
|
|
|
|
|
Consumables and spare parts
|
|
|
|
|
Inventories
|
$
|
$
|
|
September 30,
|
December 31,
|
||
|
2025
|
2024
|
||
|
Land and buildings
|
$
|
$
|
|
|
Plant and equipment
|
|
|
|
|
Construction-in-progress
|
|
|
|
|
Finance lease right-of-use assets
|
|
|
|
|
Property, plant and equipment at cost, excluding forestlands
|
|
|
|
|
Less: Accumulated depreciation and impairment
|
(
|
(
|
|
|
Property, plant and equipment, net, excluding forestlands
|
|
|
|
|
Forestlands, net of depletion
|
|
|
|
|
Property, plant and equipment, net
|
$
|
$
|
Depreciation and depletion expense for the
three months ended
September 30, 2025
and
2024
was
$
620
million
and
$
517
million
,
respectively, and for the
nine months ended
September 30, 2025
and
2024
,
was
$
1,764
million
and
$
802
million
, respectively.
This
is
recognized within “
Cost of goods sold” and “Selling, general and administrative expenses” in the Condensed Consolidated
Statements
of Operations
.
Non-cash additions to property, plant and equipment included within accounts payable were
$
306
million
and
$
384
million
at
September 30, 2025
and December 31,
2024
, respectively.
Refer to “Note
5. Impairment and Restructuring Costs
” for details of the impairment charges recognized for property, plant and
equipment.
25
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Interest expense
|
$
(
|
$
(
|
$
(
|
$
(
|
|||
|
Interest income
|
|
|
|
|
|||
|
Interest expense, net
|
$
(
|
$
(
|
$
(
|
$
(
|
|||
Total cash paid for interest, net of interest received was
$
496
million
and
$
236
million
for the
nine months ended
September 30, 2025
and
2024
, respectively. Of this, capitalized interest paid wa
s
$
20
million
and
$
11
million
for the
nine months ended
September 30,
2 in the fair value hierarchy) were as follows:
|
September 30, 2025
|
December 31, 2024
|
||||||
|
Book Value
|
Fair Value
|
Book Value
|
Fair Value
|
||||
|
Debt with fixed interest rates
|
$
|
$
|
$
|
$
|
|||
The fair value of the Company's debt with fixed interest rates is based on quoted market prices. With the exception of debt with fixed
interest rates, the carrying amounts of all other debt instruments approximate their fair values. The variable nature and repricing dates
of the receivables securitization facilities and the revolving credit facility result in their carrying values approximating their fair
values. Both the revolving credit facility and the receivables securitization facilities are classified as Level 2 in the fair value
hierarchy.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
summarizes the fair value of these instruments, which are measured at fair value on a recurring basis, by level, within the fair value
hierarchy:
|
Level 1
|
Level 2
|
||||||
|
September 30,
|
December 31,
|
September 30,
|
December 31,
|
||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Assets
|
|||||||
|
Other Investments:
|
|||||||
|
Listed
|
$
|
$
|
$
|
$
|
|||
|
Unlisted
|
|
|
|
|
|||
|
Derivatives in cash flow hedging relationships
|
|
|
|
|
|||
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|||
|
Assets measured at fair value
|
$
|
$
|
$
|
$
|
|||
|
|
|||||||
|
Liabilities
|
|||||||
|
Derivatives in cash flow hedging relationships
|
$
|
$
|
$
|
$
|
|||
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|||
|
Liabilities measured at fair value
|
$
|
$
|
$
|
$
|
|||
26
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
There were no assets or liabilities, which are measured at fair value on a recurring basis, classified as Level 3 in the fair value
hierarchy for the periods presented.
We have not changed the valuation techniques for measuring the fair value of any financial assets or liabilities during the current year.
See “Note
13. Fair Value Measurement
” of the
2024 Consolidated Financial Statements
for more information.
Assets and Liabilities Measured and Recorded at Fair Value on a Non-recurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities
at fair value on a non-recurring basis. This includes assets acquired and liabilities assumed as a result of business combinations or non-
monetary exchanges, situations where events or changes in circumstances indicate the carrying value may not be recoverable
(including restructuring efforts), or when they are deemed to be other than temporarily impaired. These assets include property, plant
and equipment, goodwill and other intangible assets, assets and disposal groups held for sale and other non-current assets. The fair
values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may
include quoted market prices, observable price for similar assets, market comparables, and discounted cash flow projections. These
non-recurring fair value measurements are considered to be Level 3 in the fair value hierarchy.
Accounts Receivable Monetization Agreements
2025
and
September 30, 2024
:
|
Nine months ended September 30,
|
|||
|
2025
|
2024
|
||
|
Receivable from financial institutions at January 1
|
$
|
$
|
|
|
Receivables sold to the financial institutions and derecognized
|
(
|
(
|
|
|
Receivables collected by financial institutions
|
|
|
|
|
Cash (payments to) proceeds from financial institutions
|
(
|
|
|
|
Receivable from financial institutions at September 30
|
$
|
$
|
|
On September 12, 2025, we amended
the accounts receivable monetization agreement
with Coöperatieve Rabobank U.A., New York
Branch, to extend the maturity date by
one year
to September 15, 2026.
The activity for the
nine months ended
September 30, 2024
is for the period following the Combination.
Receivables sold under these
accounts receivable monetization agreements as of the respective balance sheet dates were approximately
$
678
million
and
$
725
million
at
September 30, 2025
and
December 31, 2024
, respectively.
Cash proceeds or payments related to the receivables sold are included in “Net cash provided by operating activities” in the Condensed
Consolidated Statements of Cash Flows in the “Accounts receivable” line item. The expense related to the sale of receivables was
$
9
million
and
$
29
million
for the three and
nine months ended
September 30, 2025
, respectively. The expense related to the sale of
receivables was
$
12
million
for the
three and
nine months ended
September 30, 2024
, for the post-Combination period. The expense
recorded may vary depending on current rates and levels of receivables sold and is recorded in “
Other expense, net
” in the Condensed
Consolidated
Statements of Operations
. Although the sales are made without recourse, we maintain continuing involvement with the
receivables sold as we provide collections services related to the transferred assets. The associated servicing liability is not material
27
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
|
September 30,
|
December 31,
|
|
|
2025
|
2024
|
||
|
$
|
$
|
$
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
€
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
€
|
|
|
|
|
€
|
|
|
|
|
€
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
€
|
|
|
|
|
€
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
€
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
Commercial paper
|
|
|
|
|
Vendor financing and commercial card programs
|
|
|
|
|
Term loan facilities
|
|
|
|
|
Bank loans
|
|
|
|
|
Finance lease obligations
|
|
|
|
|
Bank overdrafts
|
|
|
|
|
Total debt, excluding debt issuance costs
|
|
|
|
|
Debt issuance costs
|
(
|
(
|
|
|
Total debt
|
|
|
|
|
Less: Current portion of debt
|
(
|
(
|
|
|
Non-current debt due after one year
|
$
|
$
|
For the terms attached to the senior notes, the revolving credit facility, the term loans and the commercial paper programs, refer to the
narrative included in “Note
14. Debt
” of the 2024 Consolidated Financial Statements. The carrying amount of borrowings which are
designated as net investment hedges, as outlined therein, has not changed materially and no ineffectiveness was recognized in the
period.
The revolving credit facility had an original term of
five years
, with
two
one
-year
extension options. In June 2025, the Group
exercised the first extension option, extending the maturity date to June 28, 2030.
At
September 30, 2025
, all of our debt was unsecured with the exception of our receivables securitization facilities and finance lease
obligations.
28
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Senior Notes Issued and Redeemed
There were no new issuances or redemptions during the period in relation to the senior notes.
On April 3, 2025, the Company and certain of its direct and indirect wholly owned subsidiaries (the “Obligor Group”) filed with the
SEC a registration statement on Form S-4, with respect to concurrent offers to exchange up to
$
2,750
million
principal amount of
unregistered senior unsecured notes previously issued by Smurfit Kappa Treasury Unlimited Company on April 3, 2024 and
guaranteed by other members of the Obligor Group (
see “Note 2. Acquisitions” of the 2024 Consolidated Financial Statements
) and
up to
$
850
million
principal amount of unregistered senior unsecured notes previously issued by Smurfit Westrock Financing
Designated Activity Company on November 26, 2024 and guaranteed by the other members of the Obligor Group (collectively, the
“Original Notes”), in each case for registered notes of equal principal amount issued by the same obligors with the same interest and
maturity dates and coupons and guaranteed by the same members of the Obligor Group (the “New Notes”). The Form S-4 became
effective on April 23, 2025 and the exchange offers commenced on that same date. The terms of the New Notes are identical in all
material respects to the Original Notes except that the New Notes do not have any transfer restrictions, registration rights or additional
interest provisions. The exchange offers expired at 5:00 p.m. New York City time, on May 21, 2025 (the “Expiration Date”) and
resulted in approximately
$
3,588
million
aggregate principal amount of the Original Notes (
99.66
%
of the original principal amount)
being validly tendered and not validly withdrawn, for exchange for the New Notes. The Obligor Group accepted all of the Original
Notes which were validly tendered and not validly withdrawn as of the Expiration Date and has issued a like principal amount of New
Notes in exchange for such Original Notes. No new proceeds were received by the Obligor Group in connection with the exchange
offer
.
Receivables Securitization Facilities
We have
three
trade receivables securitization programs.
For the size, terms and maturities attached to these programs, refer to the
narrative included in “Note
14. Debt
” of the 2024 Consolidated Financial Statements.
As of
September 30, 2025
, the gross amount of receivables contractually available to collateralize the
€
100
million
2029 trade
receivables securitization program was
€
322
million
(
December 31, 2024
:
€
318
million
). As of
September 30, 2025
, the facility was
fully utilized
(
December 31, 2024
:
undrawn available borrowings under this facility were
$
104
million
).
As of
September 30, 2025
, the gross amount of receivables contractually available to collateralize the
€
230
million
2029 trade
receivables securitization program
was
€
431
million
(
December 31, 2024
:
€
421
million
). As of
September 30, 2025
,
undrawn
available borrowings were
$
94
million
(
December 31, 2024
:
$
234
million
).
As of
September 30, 2025
, the gross amount of receivables contractually available to collateralize the maximum available borrowings
of the
$
700
million
2027 program was
$
1,129
million
(
December 31, 2024
:
$
1,077
million
). As of
September 30, 2025
,
maximum
available borrowings
were
$
695
million
(
December 31, 2024
:
$
676
million
)
. As of
September 30, 2025
, undrawn available
borrowings under this facility were
$
145
million
(
December 31, 2024
:
$
241
million
)
.
29
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
The effective tax rate for the three and
nine months ended
September 30, 2025
was
27.1
%
and
23.3
%
,
respectively. For the three
months ended
September 30, 2025
, the effective tax rate was primarily impacted by (i) tax expense associated with an increase in
unrecognized tax benefits (offset by certain indirect tax benefits) of
$
26
million
, (ii) tax benefit associated with the resolution of
$
7
million
of unrecognized tax benefits (due to the settlement of a tax authority examination), along with the release of
$
13
million
of
accrued interest and other impacts associated with the uncertain tax benefits, (iii) tax benefit associated with a non-recurring
adjustment to certain deferred tax assets of
$
25
million
(iv) losses during the period that have not been recognized due to uncertainty
regarding their future realization, and (v) certain non-deductible expenses and other non-recurring items.
For the
nine months ended
September 30, 2025
, the effective tax rate was primarily impacted by (i) tax expense associated with an
increase in unrecognized tax benefits (offset by certain indirect tax benefits) of
$
40
million
, (ii) tax benefit associated with the
resolution of
$
7
million
of unrecognized tax benefits (due to the settlement of a tax authority examination), along with the release of
$
13
million
of accrued interest and other impacts associated with the uncertain tax benefits, (iii) the tax benefit associated with the
resolution of
$
72
million
of unrecognized tax benefits (due to the lapse of the statute of limitations), along with the release of
$
24
million
of accrued interest and penalties associated with the unrecognized tax benefits, (iv) tax benefit associated with a non-
recurring adjustment to certain deferred tax assets of
$
25
million
, (v) losses during the period that have not been recognized due to
uncertainty regarding their future realization, (vi) the geographical mix of where earnings are generated, and (vii) certain non-
deductible expenses and other non-recurring items.
The effective tax rate for the three and
nine months ended
September 30, 2024
was
(
28.2
)%
and
48.7
%
, respectively.
The effective tax
rates were impacted by (i) the geographical mix of income in jurisdictions subject to tax at different tax rates, (ii) the tax effects of
transaction expenses associated with the Combination, which were generally not deductible for tax, partially offset by (iii) non-
recurring income not subject to tax, (iv) a reduction in tax on unremitted foreign earnings, and (v) other non-recurring items.
During the
nine months ended
September 30, 2025
and
September 30, 2024
, cash paid for income taxes, net of refunds, was
$
314
million
and
$
229
million
, respectively.
On July 4, 2025, U.S. tax legislation was enacted that included a broad range of tax reform provisions affecting businesses, including
extending and modifying certain existing international and domestic provisions. The financial statement impacts were considered in
the third quarter, with no discrete period tax impacts of the change in tax law arising. Impacts from the legislation are either not
applicable or immaterial to the financial statements. Certain changes may impact current or future cash tax obligations, but are not
anticipated to impact the total tax expense.
following:
|
Defined Benefit Pension Plans
|
Defined Benefit Pension Plans
|
||||||||||||||
|
U.S. Plans
|
Non-U.S. Plans
|
U.S. Plans
|
Non-U.S. Plans
|
||||||||||||
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
2025
|
2024
|
2025
|
2024
|
||||||||
|
Service cost
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||
|
Interest cost
|
|
|
|
|
|
|
|
|
|||||||
|
Expected return on assets
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||||
|
Amortization of:
|
|||||||||||||||
|
Net actuarial loss
|
|
|
|
|
|
|
|
|
|||||||
|
Prior service credit
|
|
|
|
(
|
|
|
(
|
(
|
|||||||
|
Settlement loss
|
|
|
|
|
|
|
|
|
|||||||
|
Net periodic benefit
(income) cost
|
$
(
|
$
(
|
$
|
$
|
$
(
|
$
(
|
$
|
$
|
|||||||
30
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Other Postretirement Benefit Plans
|
Other Postretirement Benefit Plans
|
||||||
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Service cost
|
$
|
$
|
$
|
$
|
|||
|
Interest cost
|
|
|
|
|
|||
|
Amortization of:
|
|||||||
|
Net actuarial loss
|
(
|
|
(
|
|
|||
|
Net periodic benefit cost
|
$
|
$
|
$
|
$
|
|||
Service cost is included within “Cost of goods sold” and “Selling, general and administrative expenses” while all other components
are recorded within “
Pension and other postretirement non-service income (expense), net
”.
Pension Plan Contributions and Benefit Payments
There were no changes in connection to the funding standards and funding requirements for our qualified and approved pension plans.
The contributions paid and expected to be paid during the current fiscal year are not significantly different from the amounts as
disclosed in “Note
18. Retirement Plans
” of the 2024 Consolidated Financial Statements.
Multiemployer Plans
We participate in several multiemployer pension plans (“MEPPs”) that provide retirement benefits to certain union employees in
accordance with various collective bargaining agreements and we have participated in other MEPPs in the past.
The multiemployer
plan expense was immaterial for the three and
nine months ended
September 30, 2025
and
September 30, 2024
. In the normal course
of business, we evaluate our potential exposure to MEPPs, including potential withdrawal liabilities.
At
September 30, 2025
, we had recorded withdrawal liabilities of
$
127
million
(
December 31, 2024
:
$
131
million
).
Deferred Compensation Arrangements
We have financial assets related to supplemental retirement savings plans (“Supplemental Plans”) that are carried at cash surrender
value. These Supplemental Plans are nonqualified deferred compensation plans where participants’ accounts are credited with
investment gains and losses in accordance with their investment election or elections. The investment alternatives under the
Supplemental Plans are generally similar to investment alternatives available under 401(k) plans. Assets and liabilities held in respect
of these Supplemental Plans were carried at
$
196
million
and
$
155
million
, respectively, as of
September 30, 2025
(
December 31,
31
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Numerator:
|
|||||||
|
Net income (loss) attributable to common shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
Denominator:
|
|||||||
|
Basic weighted average shares outstanding
|
|
|
|
|
|||
|
Effect of dilutive share options
|
|
|
|
|
|||
|
Diluted weighted average shares outstanding
|
|
|
|
|
|||
|
Basic earnings (loss) per share attributable to common
shareholders
|
$
|
$
(
|
$
|
$
|
|||
|
Diluted earnings (loss) per share attributable to common
shareholders
|
$
|
$
(
|
$
|
$
|
|||
Diluted
earnings
per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. These comprise restricted stock units, performance stock units and performance
shares issued under the Company’s long-term incentive
plans
.
the effect would have been antidilutive:
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Performance stock units
|
|
|
|
|
|||
|
Restricted stock units
|
|
|
|
|
|||
|
Total antidilutive shares
|
|
|
|
|
|||
Brazil Tax Liability
Our subsidiary, WestRock, is challenging claims by the Brazil Federal Revenue Department that we underpaid taxes as a result of
amortization of goodwill generated by the 2002 merger of
two
of its Brazilian subsidiaries. The matter has proceeded through the
Brazil Administrative Council of Tax Appeals (“CARF”) principally in
two
proceedings, covering tax years 2003 to 2008 and 2009 to
2012. WestRock was assessed additional taxes, penalties, and interest in both CARF proceedings. In the proceeding for the tax years
2003 to 2008, WestRock was also assessed penalties and interest for fraud, but WestRock won the fraud claim in the proceeding for
the tax years 2009 to 2012. WestRock subsequently filed
two
lawsuits in Brazilian federal courts seeking annulment of the adverse
CARF decisions. In February 2025, the federal court adjudicating the WestRock challenge to CARF's decision against WestRock for
the 2003 and 2008 period issued a ruling in favor of WestRock nullifying the financial assessments in that case. The decision of the
federal court was appealed by the tax authorities.
32
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
We assert that we have no liability in these matters. The total amount in dispute in the
two
cases before CARF and in the annulment
actions relating to the claimed tax deficiency was
R$
780
million
(
$
146
million
) as of
September 30, 2025
, including various penalties
and
interest. Resolution of the tax positions could have a material adverse effect on our cash flows and results of operations or
materially benefit our results of operations in future periods depending upon their ultimate resolution.
Asbestos-Related Litigation
We have been named as a defendant in asbestos-related personal injury litigation, primarily in relation to the historical operations of
certain companies acquired by the
Company
. To date, the costs resulting from the litigation, including settlement costs, have not been
significant. We accrue for the estimated value of pending claims and litigation costs using historical claims information, as well as the
estimated value of future claims based on our historical claims experience. As of
September 30, 2025
, there were approximately
715
such lawsuits. We believe that we have substantial insurance coverage, subject to applicable deductibles and policy limits, with respect
to asbestos claims. We also believe we have valid defenses to these asbestos-related personal injury claims and intend to continue to
contest these matters vigorously. Should the
Company
’s litigation profile change substantially, or if there are adverse developments in
applicable law, it is possible that the
Company
could incur significantly more costs resolving these cases. We record asbestos-related
insurance recoveries that are deemed probable. In assessing the probability of insurance recovery, we make judgments concerning
insurance coverage that we believe are reasonable and consistent with our historical dealings and our knowledge of any pertinent
solvency issues surrounding the insurers. The
Company
currently does not expect the resolution of pending asbestos litigation and
proceedings to have a material adverse effect on the
Company
’s results of operations, financial condition or cash flows. As of
September 30, 2025
, the
Company
had estimated liabilities in respect of these matters of
$
81
million
and estimated insurance
recoveries of
$
50
million
.
Italian Competition Authority Investigation
In August 2019, the Italian Competition Authority (the “AGCM”) notified approximately
30
companies, of which Smurfit Kappa
Italia, a subsidiary of Smurfit Westrock, was one, that an investigation had found the companies to have engaged in anti-competitive
practices, in relation to which the AGCM levied a fine of approximately
$
138
million
on Smurfit Kappa Italia, which was paid in
2021.
In October 2019, Smurfit Kappa Italia appealed the AGCM’s decision to the First Administrative Court of Appeal (TAR Lazio),
however Smurfit Kappa Italia was later notified that this appeal had been unsuccessful. In September 2021, Smurfit Kappa Italia filed
a further appeal to the Council of State which published its ruling in February 2023. While some grounds of appeal were dismissed,
the Council of State upheld Smurfit Kappa Italia’s arguments regarding the quantification of the fine. As a result, the AGCM was
directed to recalculate Smurfit Kappa Italia’s fine. On March 7, 2024, the AGCM notified Smurfit Kappa Italia that its fine had been
reduced by approximately
$
18
million
. Smurfit Kappa Italia has appealed the amount of this reduction and a decision on that appeal is
expected in the second quarter of
2026
.
Separate to these proceedings regarding the fine, in May 2023, Smurfit Kappa Italia filed an application with the Council of State for
revocation of the February 2023 ruling to the extent that it failed to consider certain pleas that had been raised by Smurfit Kappa Italia
on appeal. That application was rejected in July 2025.
After publication of the AGCM’s August 2019 decision, a number of purchasers of corrugated sheets and boxes initiated litigation
proceedings against Smurfit Kappa companies, alleging that they were harmed by the alleged anti-competitive practices and seeking
damages. In addition, other parties have threatened litigation against Smurfit Westrock seeking damages (either specified or
unspecified). The Company believes it has significant defenses to the damages claims and intends to vigorously defend the current and
any future litigation.
33
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
International Arbitration Against Venezuela
Smurfit Kappa, which is now a subsidiary of Smurfit Westrock, announced in 2018 that due to the Government of Venezuela’s
measures, Smurfit Kappa no longer exercised control over the business of Smurfit Kappa Carton de Venezuela. Smurfit Kappa’s
Venezuelan operations were therefore deconsolidated in the third quarter of 2018. Later that year, Smurfit Kappa’s wholly owned
subsidiary, Smurfit Holdings BV, filed an international arbitration claim against the Bolivarian Republic of Venezuela before the
World Bank’s International Center for Settlement of Investment Disputes (“ICSID”) seeking compensation for Venezuela’s unlawful
seizure of its Venezuelan business as well as for other arbitrary, inconsistent and disproportionate State measures that destroyed the
value of its investments in Venezuela. Following the exchange of written submissions, an oral hearing was held in September 2022 in
Paris.
On August 28, 2024, upon the completion of its deliberations, the arbitral tribunal issued an award granting Smurfit Holdings BV,
then a wholly owned subsidiary of Smurfit Westrock, compensation in excess of
$
469
million
, plus legal costs of
$
5
million
, plus
interest from May 31, 2024, until the date of payment (the “Award”). In September 2024, Smurfit Holdings BV initiated proceedings
against the Bolivarian Republic of Venezuela to enforce the Award. In December 2024, the Bolivarian Republic of Venezuela applied
to ICSID to annul the Award. An Annulment Committee has since been formed by ICSID to decide on this application.
U.S. Antitrust Violations Class Action
On July 29, 2025, Smurfit Westrock plc, Smurfit Kappa North America LLC, WestRock CP, LLC and
seven
other industry
participants were named as defendants in a class action lawsuit filed in the U.S. District Court for the Northern District of Illinois
alleging violations of U.S. antitrust laws. The lawsuit alleges violations of Sections 1 and 3 of the Sherman Act, asserting that the
defendants conspired to fix, raise and maintain supracompetitive prices for containerboard sheets, linerboard sheets, and finished
packaging products made from containerboard and/or linerboard in the United States. The complaint seeks damages, including treble
damages under the Clayton Act, pre- and post-judgment interest, injunctive relief and litigation expenses and attorneys’ fees. The
Company believes that it has substantial defenses and intends to vigorously defend against the lawsuit. While the Company is
currently unable to determine the ultimate outcome of this matter or estimate the range of potential loss due to the early stage of this
proceeding, it is possible that an adverse outcome could have a material impact on its financial condition, results of operations, or cash
flows
. On October 17, 2025, the plaintiff voluntarily dismissed Smurfit Westrock plc from the lawsuit without prejudice to seek to
rejoin it at a later date. The Company’s subsidiaries Smurfit Kappa North America LLC and WestRock CP, LLC remain defendants in
the lawsuit.
Other Litigation
We are a defendant in a number of other lawsuits and claims arising out of the conduct of our business. While the ultimate results of
such suits or other proceedings against us cannot be predicted as of the date of this Quarterly Report on Form 10-Q, we believe the
resolution of these other matters will not have a material adverse effect on our results of operations, financial condition or cash flows.
The outstanding payment obligations to financial institutions under supplier finance programs were
$
367
million
and
$
450
million
as
of
September 30, 2025
and
December 31, 2024
, respectively.
Trade Receivables Securitization Arrangements
The
Company
is a party to arrangements involving securitization of its trade receivables.
The carrying values of the restricted asset
and limited recourse liability as of
September 30, 2025
(
$
881
million
and
$
294
million
,
respectively) and as of
December 31, 2024
(
$
765
million
and
$
5
million
,
respectively) approximate their fair values due to the short-term nature of the securitized assets and the
floating rates of the liabilities.
34
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Timber Note Receivable Securitization Arrangement
The
Company
is
also
a party to an arrangement involving securitization of its note receivable.
The carrying values of the restricted
asset and non-recourse liability as of
September 30, 2025
(
$
390
million
and
$
334
million
,
respectively) and as of
December 31, 2024
(
$
387
million
and
$
333
million
, respectively) approximate their fair values due to their floating rates. The fair values of the restricted
assets and non-recourse liabilities are classified as level 2 within the fair value hierarchy.
Green Power Solutions
The vehicle held unrestricted cash of
$
2
million
as of
September 30, 2025
and
December 31, 2024
.
For the details of the structure, purpose, legal terms and conclusions as to the primary beneficiary of these Variable Interest Entities
(“VIEs”), refer to “Note
22. Variable Interest Entities
” of the 2024 Consolidated Financial Statements.
the following table:
|
September 30,
|
December 31,
|
||
|
2025
|
2024
|
||
|
Assets
|
|||
|
Current assets:
|
|||
|
Cash and cash equivalents
|
$
|
$
|
|
|
Accounts receivable
|
|
|
|
|
Other current assets
|
|
|
|
|
Non-current assets:
|
|||
|
Property, plant and equipment, net
|
|
|
|
|
Other non-current assets
|
|
|
|
|
Total assets
|
$
|
$
|
|
|
Liabilities
|
|||
|
Current liabilities:
|
|||
|
Accounts payable
|
$
|
$
|
|
|
Current portion of debt
|
|
|
|
|
Other current liabilities
|
|
|
|
|
Non-current liabilities:
|
|||
|
Non-current debt due after one year
|
|
|
|
|
Other non-current liabilities
|
|
|
|
|
Total liabilities
|
$
|
$
|
35
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
September 30, 2025
and
2024
:
|
Foreign Currency
Translation
|
Cash Flow
Hedges
|
Defined Benefit
Pension and Other
Postretirement
Benefit Plans
|
Other Reserves
(1)
|
Total
(2)
|
|
|
Balance at June 30, 2024
|
$
|
$
|
$
|
$
(
|
$
|
|
Other comprehensive (income) loss
|
(
|
|
|
|
(
|
|
Balance at September 30, 2024
|
$
|
$
|
$
|
$
(
|
$
|
|
Balance at June 30, 2025
|
$
|
$
|
$
|
$
(
|
$
|
|
Other comprehensive income
|
(
|
(
|
(
|
|
(
|
|
Balance at September 30, 2025
|
$
|
$
|
$
|
$
(
|
$
|
(1)
This relates to a reverse acquisition reserve which arose on the creation of a new parent of the Company prior to the United
Kingdom and Ireland listings.
(2)
All amounts are net of tax and noncontrolling interest.
The tables below summarize the changes in accumulated other comprehensive loss by component for the
nine months ended
September 30, 2025
and
2024
:
|
Foreign Currency
Translation
|
Cash Flow
Hedges
|
Defined Benefit
Pension and Other
Postretirement
Benefit Plans
|
Other Reserves
(1)
|
Total
(2)
|
|
|
Balance at December 31, 2023
|
$
|
$
|
$
|
$
(
|
$
|
|
Other comprehensive loss (income)
|
|
(
|
(
|
|
|
|
Balance at September 30, 2024
|
$
|
$
|
$
|
$
(
|
$
|
|
Balance at December 31, 2024
|
$
|
$
|
$
|
$
(
|
$
|
|
Other comprehensive (income) loss
|
(
|
|
|
|
(
|
|
Balance at September 30, 2025
|
$
|
$
|
$
|
$
(
|
$
|
(1)
This relates to a reverse acquisition reserve which arose on the creation of a new parent of the
Company
prior to the United
Kingdom and Ireland listings.
(2)
All amounts are net of tax and noncontrolling interest.
36
Smurfit Westrock plc
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
September 30, 2025
, and
2024
, is as follows:
|
Three months ended September 30,
|
|||||||
|
2025
|
2024
|
||||||
|
Pre-Tax
|
Tax
|
Net of
Tax
|
Pre-Tax
|
Tax
|
Net of
Tax
|
||
|
Foreign currency translation gain
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
Defined benefit pension and other postretirement benefit plans:
|
|||||||
|
Amortization and settlement recognition of net actuarial loss
|
|
(
|
|
|
(
|
|
|
|
Amortization of prior service credit
|
|
|
|
(
|
|
(
|
|
|
Foreign currency gain (loss) - pensions
|
|
|
|
(
|
|
(
|
|
|
Changes in fair value of cash flow hedges
|
|
|
|
|
|
|
|
|
Consolidated other comprehensive income
|
|
(
|
|
|
(
|
|
|
|
Other comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
Other comprehensive income attributable to common shareholders
|
$
|
$
(
|
$
|
$
|
$
(
|
$
|
|
A summary of the components of other comprehensive
income (loss)
, including noncontrolling interest, for the
nine months ended
September 30, 2025
, and
2024
, is as follows:
|
Nine months ended September 30,
|
|||||||
|
2025
|
2024
|
||||||
|
Pre-Tax
|
Tax
|
Net of
Tax
|
Pre-Tax
|
Tax
|
Net of
Tax
|
||
|
Foreign currency translation gain (loss)
|
$
|
$
|
$
|
$
(
|
$
|
$
(
|
|
|
Defined benefit pension and other postretirement benefit plans:
|
|||||||
|
Net actuarial loss arising during period
|
(
|
|
(
|
(
|
|
(
|
|
|
Amortization and settlement recognition of net actuarial loss
|
|
(
|
|
|
(
|
|
|
|
Prior service cost arising during period
|
(
|
|
(
|
|
|
|
|
|
Amortization of prior service credit
|
(
|
|
(
|
(
|
|
(
|
|
|
Foreign currency loss - pensions
|
(
|
|
(
|
(
|
|
(
|
|
|
Changes in fair value of cash flow hedges
|
(
|
|
(
|
|
|
|
|
|
Consolidated other comprehensive income (loss)
|
|
|
|
(
|
(
|
(
|
|
|
Other comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) attributable to common shareholders
|
$
|
$
|
$
|
$
(
|
$
(
|
$
(
|
|
Dividend Approval
On October 29, 2025, the Company announced that its
Board
of Directors approved a quarterly dividend of
$
0.4308
per share on its
ordinary shares. The quarterly dividend of
$
0.4308
per ordinary share is payable December 18, 2025 to shareholders of record at the
close of business on November 14, 2025.
37
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in
conjunction with Smurfit Westrock’s Unaudited Condensed Consolidated Financial Statements and their related notes included
elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and their related notes for the
year ended December 31, 2024, as well as the information under the heading “Management’s Discussion and Analysis of the
Financial Condition and Results of Operations” that were disclosed in the Form 10-K for the year ended December 31, 2024, as filed
with the U.S. Securities and Exchange Commission (the “SEC”) on March 7, 2025 (the “2024 Form 10-K”). This discussion contains
forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could differ materially from the
results discussed below. More information regarding these risks and uncertainties and other important factors that could cause actual
results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item
1A. in the 2024 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. Please also refer to
the section above entitled “Cautionary Note Regarding Forward-Looking Statements” for additional information.
Smurfit Kappa was determined to be the accounting acquirer in the Combination; therefore, the historical consolidated financial
statements of Smurfit Kappa for periods prior to the Combination were also considered to be the historical financial statements of the
Company. Unless otherwise specified or the context otherwise requires, all references to the “Company” and “Smurfit Kappa” refer
to Smurfit Kappa Group plc and its subsidiaries and their operations when referring to periods prior to the closing of the
Combination, and references to the “Company” and “Smurfit Westrock” refer to the combined company, Smurfit Westrock and its
subsidiaries, including, among others, Smurfit Kappa and WestRock, when referring to periods after the Combination.
OVERVIEW
Smurfit Westrock is one of the world's largest integrated manufacturers of paper-based packaging products in terms of volumes and
sales, with operations in North America, South America, Europe, Asia, Africa, and Australia. Smurfit Westrock partners with its
customers to provide differentiated, sustainable paper and packaging solutions that enhance its customers’ prospects of success in their
markets. For additional information, see “Part I, Item 1. Business” included in the Company’s Annual Report on Form 10-K.
Transaction Agreement and Combination with WestRock
The Combination closed on July 5, 2024.
The consolidated financial statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the
financial statements of Smurfit Kappa and therefore, the historical consolidated financial information for periods prior to the
Combination, including the comparatives presented, reflect the pre-Combination carrying values of Smurfit Kappa except for the
retrospective adjustment to reflect the Company’s legal share capital as the successor after giving effect to the Smurfit Kappa Share
Exchange.
See “Note
2. Acquisitions
” of the
2024 Consolidated Financial Statements
for additional information related to the accounting for the
Combination.
38
Recent Developments
Capacity Reduction and Facility Closures
On April 30, 2025, we filed an 8-K that announced our plan to permanently close our coated recycled paperboard (“CRB”) mill in St.
Paul, Minnesota, U.S. and discontinue production at our containerboard mill in Forney, Texas, U.S. The Company also initiated
consultations with local works councils in Germany with a view to permanently closing two converting facilities there. We stopped
production at these two U.S. mills in June 2025 and May 2025, respectively. The mill closures reduced our capacity by over 500,000
tons. In the third quarter of 2025, we reached agreements with the local works councils in Germany and are in the process of closing
those two converting facilities. The mill closures and two converting facility closures are not expected to have a significant impact on
our net sales as we aim to match our supply with customer demand. See “Note
5. Impairment and Restructuring Costs
” of the
Condensed
Consolidated Financial Statements for additional information. Excluding associated impairment and restructuring costs,
the elimination of corresponding fixed costs is anticipated to increase overall profitability.
EXECUTIVE SUMMARY
Smurfit Westrock’s net sales
increased
by
$332 million
, to
$8,003 million
in the three
months ended
September 30, 2025
, from
$7,671 million
in the three
months ended
September 30, 2024
. The three months ended
September 30, 2025
included an extra five
days compared to the prior year period since the Combination closed on July 5, 2024. Net sales
increased
by
$10,029 million
, to
$23,599 million
in the
nine months ended
September 30, 2025
, from
$13,570 million
in the
nine months ended
September 30, 2024
.
As described in “Results of Operations” below, the increase
in
both periods was primarily due to the acquisition of WestRock which
contributed approximately
$270 million
in the three months ended
September 30, 2025
and
$9,845 million
in the
nine months ended
September 30, 2025
.
Net income (loss) attributable to common shareholders
increased
by
$396 million
, due to an
income
of
$246 million
in the three
months ended
September 30, 2025
, compared to a
loss
of
$150 million
in the three
months ended
September 30, 2024
.
Net income
(loss) attributable to common shareholders
increased
by
$429 million
, to
income
of
$602 million
in the
nine months ended
September 30, 2025
, compared to
income
of
$173 million
in the
nine months ended
September 30, 2024
. The
increase
in both the
three
and
nine months ended
September 30, 2025
was primarily due to the Combination. In the three and
nine months ended
September 30, 2025
, we incurred higher impairment and restructuring costs. In the three
and
nine months ended
September 30, 2024
we incurred higher transaction and integration-related expenses associated with the Combination and
$227 million
for the amortization
of the fair value step up on inventory recognized on WestRock’s inventory. In addition, the positive impact of the acquired operations
was partially offset by higher interest expense post Combination.
See “Note
5. Impairment and Restructuring Costs
” and “Note
6.
Transaction and Integration-related Expenses Associated with the Combination
” of the
Condensed
Consolidated Financial Statements
for additional information.
Net cash provided by operating activities
increased
by
$1,495 million
, to
$2,197 million
in the
nine months ended
September 30,
2025
, from
$702 million
in the
nine months ended
September 30, 2024
, primarily due to a
$1,525 million
increase in net income
adjusted for non-cash items, primarily including depreciation, depletion and amortization, impairment charges, cash surrender value
increase in excess of premiums paid, share-based compensation expense,
deferred income tax benefit
, and pension and other
postretirement funding more than cost. The increase in net income adjusted for non-cash items was partially offset by the
$30 million
increase
in the cash outflows from changes in operating assets and liabilities. During the
nine months ended
September 30, 2025
,
Smurfit Westrock invested
$1,609 million
in capital expenditures. The Company’s net cash
inflow
from changes in debt was
$74 million
, and it paid
$675 million
of cash dividends to shareholders. See the section entitled “Liquidity and Capital Resources”
below for additional information.
Refer to “Results of Operations” for a detailed review of Smurfit Westrock’s performance.
39
SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS
Smurfit Westrock’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Company’s
control. Smurfit Westrock’s net sales are primarily derived from the sale of containerboard, corrugated containers, paperboard,
consumer packaging, and other paper-based packaging products. As such, Smurfit Westrock’s net sales during any period are largely
influenced by volumes, prices and costs of the corrugated containers and consumer packaging products that Smurfit Westrock sells
during that period.
Volumes
In general, demand for corrugated containers and consumer packaging is closely correlated with overall economic growth and activity.
It also directionally correlates with levels of industrial production and is impacted by the trends affecting the choice of medium (paper,
plastic, glass, metal, or wood) used in the packaging of these products. As a result, demand is driven by the need for: (i) packaging
products for consumer and industrial goods, (ii) higher value-added corrugated products used for point-of-sale displays and consumer
and shelf-ready packaging, and (iii) packaging of pharmaceutical products and the growth of related industries. Normal patterns of
demand growth can be disrupted by other macroeconomic trends, including inflation, pandemics (such as the COVID-19 pandemic
and related lockdowns), and global economic and geopolitical developments (including tariffs or other trade restrictions), among
others. For instance, current U.S. tariff policies have introduced uncertainty and may negatively impact demand from the Company’s
customers and overall volumes.
Consumer patterns also play a significant role in demand for corrugated packaging and consumer packaging. In recent years, shifting
consumer behaviors have accelerated, particularly with the rise of e-commerce and increased awareness of unsustainable packaging
solutions. These trends have, to date, been beneficial for paper-based packaging, which is typically made from renewable, recyclable
materials. Changing demographics can also influence demand trends in the pharmaceutical industry, a major user of consumer
packaging.
Prices and Costs
Prices of corrugated containers and consumer packaging are primarily a function of the cyclical nature of Smurfit Westrock’s industry,
capacity and competition in the markets it operates in, prevailing raw material prices, and other operating costs, such as energy,
chemicals, and transportation, overlaying supply and demand balances.
As paper costs generally represent a large portion of the cash cost of production for corrugated containers or consumer packaging,
containerboard price movements tend to impact the prices of corrugated containers. In turn, the cost of paper is influenced by
movements in the price of its major raw materials—wood or recycled paper—along with other supply and demand factors. Smurfit
Westrock’s production processes are energy-intensive, making production costs also sensitive to the price of energy (primarily gas and
electricity), which have historically been volatile. Other key cost drivers include employee benefit expenses, largely determined by
workforce size, and shipping and handling costs, which are generally affected by fuel prices and overall labor inflation.
While many of Smurfit Westrock’s customer contracts include price adjustment clauses that allow cost increases to be passed on to
customers, these clauses may not in all cases be effective to offset rising costs. Additionally, for corrugated and consumer packaging
products, even when Smurfit Westrock is able to implement price increases, there is typically a three- to six-month lag between raw
material price hikes and the realization of higher pricing from customers.
Foreign Currency Effects
Smurfit Westrock operates in multiple countries across North America, South America, Europe, Asia, Africa, and Australia. As a
result, currency fluctuations can have both direct and indirect impacts on its financial statements, which are presented in U.S. dollars.
40
RESULTS OF OPERATIONS
The following table summarizes Smurfit Westrock’s consolidated results for the periods presented ($ in millions):
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Net sales
|
$
8,003
|
$
7,671
|
$
23,599
|
$
13,570
|
|||
|
Cost of goods sold
|
(6,434)
|
(6,321)
|
(18,938)
|
(10,817)
|
|||
|
Gross profit
|
1,569
|
1,350
|
4,661
|
2,753
|
|||
|
Selling, general and administrative expenses
|
(963)
|
(1,007)
|
(2,899)
|
(1,776)
|
|||
|
Impairment and restructuring costs
|
(65)
|
(21)
|
(360)
|
(21)
|
|||
|
Transaction and integration-related expenses associated with
the Combination
|
(15)
|
(267)
|
(72)
|
(350)
|
|||
|
Operating profit
|
526
|
55
|
1,330
|
606
|
|||
|
Pension and other postretirement non-service income
(expense), net
|
8
|
8
|
24
|
(31)
|
|||
|
Interest expense, net
|
(177)
|
(167)
|
(526)
|
(225)
|
|||
|
Other expense, net
|
(21)
|
(13)
|
(44)
|
(13)
|
|||
|
Income (loss) before income taxes
|
336
|
(117)
|
784
|
337
|
|||
|
Income tax expense
|
(91)
|
(33)
|
(183)
|
(164)
|
|||
|
Net income (loss)
|
245
|
(150)
|
601
|
173
|
|||
|
Net loss attributable to noncontrolling interests
|
1
|
—
|
1
|
—
|
|||
|
Net income (loss) attributable to common shareholders
|
$
246
|
$
(150)
|
$
602
|
$
173
|
|||
Results of operations for the three and
nine months ended
September 30, 2025
, compared to the three and
nine months ended
September 30, 2024
Net Sales
Net sales
increased
by
$332 million
, to
$8,003 million
in the three
months ended
September 30, 2025
, from
$7,671 million
in the three
months ended
September 30, 2024
. This
increase
included an extra five days compared to the prior year period since the Combination
closed on July 5, 2024, or approximately
$270 million
.
Excluding the impact of the WestRock acquisition for the extra five days, net
sales increased by $62
million primarily resulting from a positive impact of $216 million due to a higher selling price mix and a $196
million net positive foreign currency impact, partly offset by a negative volume impact of $350 million.
Net sales
increased
by
$10,029 million
, to
$23,599 million
in the
nine months ended
September 30, 2025
, from
$13,570 million
in the
nine months ended
September 30, 2024
. This
increase
was primarily due to the impact of
$9,845 million
related to the acquisition of
WestRock. Excluding the impact of this acquisition, net sales increased by $184 million primarily resulting from a $450 million
positive impact due to a higher selling price mix and a $143 million net positive foreign currency impact, partly offset by a negative
volume impact of $408 million.
See “
Segment Information
” below for more detail on Smurfit Westrock’s segment results.
Cost of Goods Sold
Cost of goods sold
increased
by
$113 million
, to
$6,434 million
in the three
months ended
September 30, 2025
, from
$6,321 million
in
the three
months ended
September 30, 2024
. This
increase
included an extra five days compared to the prior year period since the
Combination closed on July 5, 2024, or approximately $229 million.
Excluding the impact of the acquisition of WestRock for the
extra five days
, cost of goods sold decreased by $116 million primarily due to an expense of $227 million included in the three
months
ended
September 30, 2024
for the amortization of the fair value step up on inventory recognized on WestRock’s inventory acquired.
41
Cost of goods sold
increased
by
$8,121 million
, to
$18,938 million
in the
nine months ended
September 30, 2025
, from
$10,817 million
in the
nine months ended
September 30, 2024
. The
increase
in cost of goods sold was primarily due to the impact of
the acquisition of WestRock of $8,240 million. Excluding the impact of this acquisition, cost of goods sold decreased $119 million
primarily due to an expense of $227 million for the amortization of the fair value step up on inventory recognized on WestRock’s
inventory acquired in the
nine months ended
September 30, 2024
.
Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses
decreased
by
$44 million
, to
$963 million
in the three
months ended
September 30, 2025
, from
$1,007 million
in the
three
months ended
September 30, 2024
. This decrease included an extra five days compared to the prior year period since the
Combination closed on July 5, 2024, or approximately $30 million.
Excluding the impact of the WestRock acquisition for the extra
five days
, the
decrease
in SG&A expenses was primarily due to a lower share-based payment expense of $88 million in the three
months ended
September 30, 2025
.
SG&A expenses
increased
by
$1,123 million
, to
$2,899 million
in the
nine months ended
September 30, 2025
, from
$1,776 million
in
the
nine months ended
September 30, 2024
. The
increase
in SG&A expenses was primarily due to additional SG&A expenses of
$1,126 million related to the acquisition of WestRock.
Impairment and Restructuring Costs
Impairment and restructuring costs
increased
by
$44 million
, to
$65 million
in the
three months ended
September 30, 2025
, from
$21 million
in the
three months ended
September 30, 2024
. In the three months ended
September 30, 2025
, impairment and
restructuring costs consisted of
$58 million
of impairment charges and
$7 million
of restructuring costs. In the three months ended
September 30, 2024
, impairment and restructuring costs consisted of
$2 million
of impairment charges and
$19 million
of
restructuring costs.
Impairment and restructuring costs
increased
by
$339 million
, to
$360 million
in the
nine months ended
September 30, 2025
, from
$21 million
in the
nine months ended
September 30, 2024
. In the nine months ended September 30, 2025, impairment and
restructuring costs consisted of
$242 million
of impairment charges and
$118 million
of restructuring costs. In the
nine months ended
September 30, 2024
, impairment and restructuring costs consisted of
$2 million
of impairment charges and
$19 million
of
restructuring costs. The
increase
in impairment and restructuring costs was primarily due to our
announced plan to permanently close
our CRB mill in St. Paul, Minnesota, U.S., discontinue production at our containerboard mill in Forney, Texas, U.S., and costs
associated with two converting facilities in Germany that are in the process of closing. We stopped production at these two U.S. mills
in June 2025 and May 2025, respectively.
See “Note
5. Impairment and Restructuring Costs
” of the
Condensed
Consolidated Financial Statements for additional information.
Transaction and Integration-related Expenses Associated with the Combination
The Company incurred transaction and integration-related expenses associated with the Combination of
$15 million
and
$267 million
in the three
months ended
September 30, 2025
and
2024
, respectively. In the three
months ended
September 30, 2025
, transaction and
integration-related expenses consisted primarily of
$17 million
of integration-related expenses associated with the Combination. In the
three
months ended
September 30, 2024
, transaction and integration-related expenses consisted of
$128 million
of transaction-related
expenses and
$139 million
of integration-related expenses
associated with the Combination.
The Company incurred transaction and integration-related expenses associated with the Combination of
$72 million
and
$350 million
in the
nine months ended
September 30, 2025
and
2024
, respectively. In the
nine months ended
September 30, 2025
,
transaction and
integration-related expenses consisted primarily of i
ntegration-related expenses associated with the Combination of
$74 million
. In the
nine months ended
September 30, 2024
,
transaction and integration-related expenses consisted of t
ransaction-related expenses of
$211 million
and
$139 million
of integration-related expenses associated with the Combination
.
42
Transaction-related costs associated with the Combination were comprised of banking and financing related costs as well as legal and
other professional services which were directly attributable to the Combination and retention payments that were contractually
committed to and associated with the successful completion of the Combination.
We incur integration expenses post-acquisition that
reflect work performed to facilitate merger and acquisition integration and primarily consist of professional services and personnel and
related expenses, such as work associated with information systems.
See “Note
6. Transaction and Integration-related Expenses Associated with the Combination
” of the
Condensed
Consolidated
Financial Statements for additional information.
Pension and Other Postretirement Non-Service Income (Expense), Net
Pension and other postretirement non-service income (expense), net
was flat year on year with
income
of
$8 million
in the three
months ended
September 30, 2025
and
income
of
$8 million
in the three
months ended
September 30, 2024
. This was primarily due to
a
$1 million
increase
in the expected return on assets primarily due to acquired pension assets in connection with the Combination,
fully offset by an
increase
in interest costs of
$1 million
primarily due to acquired pension liabilities in connection with the
Combination.
Pension and other postretirement non-service income (expense), net
decreased
by
$55 million
, to
income
of
$24 million
in the
nine
months ended
September 30, 2025
, from
expense
of
$31 million
in the
nine months ended
September 30, 2024
. This
decrease
was
primarily due to a
$164 million
increase
in the expected return on assets primarily due to acquired pension assets in connection with
the Combination and a
decrease
in net settlement loss of
$19 million
, partially offset by an
increase
in interest costs of
$133 million
primarily due to acquired pension liabilities in connection with the Combination.
Interest Expense, Net
Interest expense, net
increased
by
$10 million
to
$177 million
in the three
months ended
September 30, 2025
, from
$167 million
in the
three
months ended
September 30, 2024
. This
increase
was primarily due to additional interest expense in 2025 due to our November
2024 debt refinancing and the inclusion of an additional five days of interest expense, net compared to the prior year period as the
Combination closed on July 5, 2024
.
Interest expense, net
increased
by
$301 million
to
$526 million
in the
nine months ended
September 30, 2025
, from
$225 million
in
the
nine months ended
September 30, 2024
. The
increase
was primarily the result of interest on debt assumed and debt issued in
connection with the Combination.
See “Note
2. Acquisitions
” and “Note
14. Debt
” of the
2024 Consolidated Financial Statements
for additional information on the debt
assumed and debt issued in connection with the Combination.
Other (Expense) Income, Net
Other expense, net
increased
by
$8 million
to
expense
of
$21 million
in the three
months ended
September 30, 2025
, from
expense
of
$13 million
in the three
months ended
September 30, 2024
primarily due to a
$7 million
net negative impact from foreign currency
translation of monetary assets and liabilities and a $4 million decrease in income from equity method investments, which were
partially offset by a
$3
million decrease in the expense recorded in connection with the sale of receivables under an accounts
receivable monetization program acquired as a result of the Combination.
Other expense, net
increased
by
$31 million
to
expense
of
$44 million
in the
nine months ended
September 30, 2025
, from
expense
of
$13 million
in the
nine months ended
September 30, 2024
primarily due to an $
17
million increase in the expense recorded in
connection with the sale of receivables under an accounts receivable monetization program acquired as a result of the Combination
and a $12 million net negative impact from foreign currency translation of monetary assets and liabilities.
43
Income Tax Expense
Income tax expense was
$91 million
in the three months ended
September 30, 2025
, compared to an income tax expense of
$33 million
in the three months ended
September 30, 2024
. The effective tax rate for the three months ended
September 30, 2025
, was
27.1%
, while the effective tax rate for the three months ended
September 30, 2024
, was
(28.2)%
.
Income tax expense was
$183 million
in the
nine months ended
September 30, 2025
, compared to an income tax expense of
$164 million
in the
nine months ended
September 30, 2024
. The effective tax rate for the
nine months ended
September 30, 2025
, was
23.3%
, while the effective tax rate for the
nine months ended
September 30, 2024
, was
48.7%
.
See “Note
13. Income Taxes
” of the
Condensed
Consolidated Financial Statements for the primary factors impacting our effective tax
rates.
On July 4, 2025, U.S. tax legislation was enacted that included a broad range of tax reform provisions affecting businesses, including
extending and modifying certain existing international and domestic provisions. The financial statement impacts were considered in
the third quarter, with no discrete period tax impacts of the change in tax law arising. Impacts from the legislation are either not
applicable or immaterial to the financial statements. Certain changes may impact current or future cash tax obligations, but are not
anticipated to impact the total tax expense.
SEGMENT INFORMATION
Smurfit Westrock has identified
three
operating segments based on how the CODM makes key operating decisions, allocates resources
and assesses the performance of the Company’s business. These operating segments are as follows: (i) North America, which includes
operations in the U.S., Canada and Mexico, (ii) Europe, MEA and APAC and (iii) LATAM, which includes operations in Central
America and the Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru. No operating segments have been aggregated for
disclosure purposes.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, but
exclude certain central costs such as corporate costs, including executive costs, and costs of Smurfit Westrock’s legal, company
secretarial, pension administration, tax, treasury and controlling functions and other administrative costs.
Segment profitability is
measured based on Adjusted EBITDA, defined as
income (loss) before income taxes
,
unallocated corporate costs
,
depreciation,
depletion and amortization
,
interest expense, net
,
pension and other postretirement non-service income (expense), net
,
share-based
compensation expense
,
other expense, net
,
impairment and restructuring costs
,
transaction and integration-related expenses associated
with the Combination
,
amortization of fair value step up on inventory
a
nd other specific items that management believes are not
indicative of the ongoing operating results of the business.
The following table contains selected financial information for Smurfit Westrock’s segments for the periods presented
($ in millions):
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Net sales (aggregate):
(1)
|
|||||||
|
North America
|
$
4,721
|
$
4,649
|
$
14,145
|
$
5,499
|
|||
|
Europe, MEA and APAC
|
2,831
|
2,651
|
8,191
|
7,056
|
|||
|
LATAM
|
545
|
506
|
1,576
|
1,187
|
|||
|
Segment Adjusted EBITDA:
|
|||||||
|
North America
|
$
810
|
$
780
|
$
2,347
|
$
900
|
|||
|
Europe, MEA and APAC
|
419
|
411
|
1,180
|
1,158
|
|||
|
LATAM
|
116
|
116
|
354
|
257
|
|||
(1)
Net sales before intersegment eliminations
44
The three and
nine months ended
September 30, 2025
, compared to the three and
nine months ended
September 30, 2024
North America Segment
Net Sales
Net sales before intersegment eliminations for the North America segment
increased
by
$72 million
, to
$4,721 million
in the three
months ended
September 30, 2025
, from
$4,649 million
in the three
months ended
September 30, 2024
. This
increase
was primarily
due to the inclusion of an extra five days compared to the prior year period since the Combination closed on July 5, 2024, or
approximately $247 million, and a $181 million impact of a higher sales price mix, partly offset by $358 million due to lower
volumes
.
Net sales before intersegment eliminations for the North America segment
increased
by
$8,646 million
, to
$14,145 million
in the
nine
months ended
September 30, 2025
, from
$5,499 million
in the
nine months ended
September 30, 2024
. This
increase
was primarily
due to the positive impact of $8,877 million from the acquisition of WestRock. Excluding the impact of this acquisition, net sales
before intersegment eliminations decreased by $231 million primarily due t
o a $392 million im
pact of lower volumes and a net
negative foreign currency impact of $71 million, partly offse
t by a $235 million i
mpact from a higher sales price mix.
Adjusted EBITDA
Adjusted EBITDA for the North America segment
increased
by
$30 million
, to
$810 million
in the
three months ended
September 30,
2025
, from
$780 million
in the three
months ended
September 30, 2024
. This
increase
included an extra five days compared to the
prior year period since the Combination closed on July 5, 2024, or approximately $38 million. Excluding the impact of the WestRock
acquisition for the extra five days, Adjusted EBITDA decreased by $8 million due to lower volumes of $85 million,
higher costs of
$104 million
, partly offset by a higher sales price mix of $181 million.
Adjusted EBITDA for the North America segment
increased
by
$1,447 million
, to
$2,347 million
in the
nine months ended
September 30, 2025
, from
$900 million
in the
nine months ended
September 30, 2024
. This
increase
was primarily due to the positive
impact of $1,446 million from the acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA was
essentially flat year on year with a higher sales price mix of $235 million fully offset by higher costs of $151 million, lower volumes
of $75 million and net negative foreign currency impact of $9 million.
Europe, MEA and APAC Segment
Net Sales
Net sales before intersegment eliminations for the Europe, MEA and APAC segment
increased
by
$180 million
, to
$2,831 million
in
the
three months ended
September 30, 2025
, from
$2,651 million
in the three
months ended
September 30, 2024
. This
increase
included approximately $23 million for the extra five days in the quarter compared to the prior year period since the Combination
closed on July 5, 2024. Excluding the impact of the WestRock acquisition for the extra five days, net sales before intersegment
eliminations increased by $157 million. This
increase
was p
rimarily due to the net positive foreign currency impact of $197 million
due to the strengthening of the euro against the U.S. dollar, partly offset by lower volumes of $37 million.
Net sales before intersegment eliminations for the Europe, MEA and APAC segment
increased
by
$1,135 million
, to
$8,191 million
in
the
nine months ended
September 30, 2025
, from
$7,056 million
in the
nine months ended
September 30, 2024
. This
increase
was
primarily due to the impact of $808 million which related to the acquisition of WestRock. Excluding the impact of this acquisition, net
sales before intersegment eliminations increased by $327 million primarily due to a net positive foreign currency impact of $236
million primarily due to the strengthening of the euro against the U.S. dollar, a higher selling price mix of $147 million, partly offset
by a negative volume impact of $70 million.
45
Adjusted EBITDA
Adjusted EBITDA for the Europe, MEA and APAC segment
increased
by
$8 million
, to
$419 million
in the
three months ended
September 30, 2025
, from
$411 million
in the
three months ended
September 30, 2024
.
The increase was primarily due to a
$25
million net positive foreign currency impact, partly offset by lower volumes of $12 million.
Adjusted EBITDA for the Europe, MEA and APAC segment
increased
by
$22 million
, to
$1,180 million
in the
nine months ended
September 30, 2025
, from
$1,158 million
in the
nine months ended
September 30, 2024
. There was an $84 million positive impact
from the acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA decreased by $62 million primarily due
to higher costs of $225 million, partly offset by a higher selling price mix impact of $147 million.
LATAM Segment
Net Sales
Net sales before intersegment eliminations for the LATAM segment
increased
by
$39 million
, to
$545 million
in the three months
ended
September 30, 2025
, from
$506 million
in the three months ended
September 30, 2024
. This
increase
was primarily du
e to the
inclusion of an extra five days compared to the prior year period since the Combination closed on July 5, 2024, or approximately $12
million.
Excluding the impact of the WestRock acquisition for the extra five days, net sales before intersegment eliminations increased
by $27 million primarily due to a
higher sales price mix of $39 million, partly offset by lower volumes of $4 million.
Net sales before intersegment eliminations for the LATAM segment
increased
by
$389 million
, to
$1,576 million
in the
nine months
ended
September 30, 2025
, from
$1,187 million
in the
nine months ended
September 30, 2024
. This
increase
was primarily due to the
positive impact of $375 million from the acquisition of WestRock.
Adjusted EBITDA
Adjusted EBITDA for the LATAM segment was
$116 million
in the three months ended
September 30, 2025
and
$116 million
in the
three months ended
September 30, 2024
.
The results were primarily impacted by a higher sales price mix of $39 million that was more
than offset by higher costs of $45 million.
Adjusted EBITDA for the LATAM segment
increased
by
$97 million
, to
$354 million
in the
nine months ended
September 30, 2025
,
from
$257 million
in the
nine months ended
September 30, 2024
. This
increase
was primarily due to the positive impact of $117
million from the acquisition of WestRock. Excluding this acquisition, Adjusted EBITDA decreased by $20 million primarily due to
higher costs of $84 million, partly offset by a higher selling price mix of $65 million.
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Smurfit Westrock’s primary sources of liquidity are the cash flows generated from its operations, its commercial paper program, and
committed credit lines. The uncommitted commercial paper program is supported by the
$4,500 million
revolving loan facility with a
separate swingline sub-facility which allows for same-day drawing in U.S. dollar. The revolving credit facility had an original term of
five years, with two one-year extension options. In June 2025, the Group exercised the first extension option, extending the maturity
date to June 28, 2030. The amount of commercial paper outstanding does not reduce available capacity under the revolving loan
facility. The primary uses of this liquidity are to fund Smurfit Westrock’s day-to-day operations, capital expenditures, debt service,
dividends and other investment activity, including acquisitions.
As of
September 30, 2025
, Smurfit Westrock held cash and cash equivalents of
$851 million
, of which $234 million were held in euro,
$309 million were held in U.S. dollars and $308 million were held in other currencies. At
September 30, 2025
, the Company had
$
4,73
9 million in undrawn committed facilities available under the revolving loan facility and receivables securitization facilities. The
weighted average period until maturity of undrawn committed facilities was 4.6 years as of
September 30, 2025
. Combined with cash
and cash equivalents of
$851 million
, the Company had $
5,590
million of available liquidity.
46
As of
September 30, 2025
, Smurfit Westrock had
$14,171 million
of debt, excluding debt issuance costs. As of
September 30, 2025
,
the carrying amount of current debt was
$798 million
. In the
nine months ended
September 30, 2025
, total debt
increased
by
$516 million
,
$74 million
of which was due to a net
increase
in borrowings and the remainder was primarily due to translation
adjustments.
The carrying amount of the Company’s debt includes a fair value adjustment related to debt assumed through mergers
and acquisitions. At
September 30, 2025
, the unamortized fair value market adjustment was
$39 million
. Included within the carrying
value of Smurfit Westrock’s borrowings as of
September 30, 2025
are deferred debt issuance costs of
$60 million
, of which
$8 million
is current, all of which will be recognized in interest expense in Smurfit Westrock’s Condensed Consolidated Statements of
Operations using the effective interest rate method over the remaining life of the borrowings.
See “Note
12. Debt
”
of the
Condensed
Consolidated Financial Statements
for a discussion of the Company’s additional debt-related information.
The Company believes that the cash flows generated from its operations, cash on hand, its commercial paper program, available
borrowings under its committed credit lines and available capital through access to capital markets will be adequate to meet the
Company's liquidity and capital requirements, including payments of any declared dividends, for the next 12 months and for the
foreseeable future.
Smurfit Westrock uses a variety of working capital management strategies including supply chain financing (“SCF”) programs,
vendor financing and commercial card programs, monetization facilities where we sell short-term receivables to a group of third-party
financial institutions, and receivables securitization facilities. The programs are described below.
The Company engages in certain customer-based SCF programs to accelerate the receipt of payment for outstanding accounts
receivables from certain customers. Certain costs of these programs are borne by the customer or the Company. Receivables
transferred under these customer-based SCF programs generally meet the requirements to be accounted for as sales in accordance with
guidance under “Transfers and Servicing” (“ASC 860”), resulting in derecognition of such receivables from the Company’s
Condensed Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs generally averages
approximately 5% of the Company’s accounts receivable balance. In addition, Smurfit Westrock has monetization facilities that sell to
third-party financial institutions all of the short-term receivables generated from certain customer trade accounts. See “Note
11. Fair
Value Measurement
” of the
Condensed
Consolidated Financial Statements for a discussion of the Company’s monetization facilities.
Smurfit Westrock’s working capital management strategy includes working with its suppliers to revisit terms and conditions, including
the extension of payment terms. The Company’s current payment terms with the majority of its suppliers generally range from payable
upon receipt to 120 days and vary for items such as the availability of cash discounts. The Company does not believe its payment
terms will be shortened significantly in the near future, and does not expect its net cash provided by operating activities to be
significantly impacted by additional extensions of payment terms. Certain financial institutions offer voluntary SCF programs that
enable the Company’s suppliers, at their sole discretion, to sell their receivables from Smurfit Westrock to the financial institutions on
a non-recourse basis at a rate that leverages the Company’s credit rating and thus might be more beneficial to the Company’s
suppliers. Smurfit Westrock and its suppliers agree on commercial terms for the goods and services procured, including prices,
quantities and payment terms, regardless of whether the supplier elects to participate in SCF programs. The suppliers sell Smurfit
Westrock goods or services and issue the associated invoices based on the agreed-upon contractual terms. The due dates of the
invoices are not extended due to the supplier’s participation in SCF programs. Smurfit Westrock suppliers, at their sole discretion if
they choose to participate in a SCF program, determine which invoices, if any, they want to sell to the financial institutions. No
guarantees are provided by the Company under SCF programs, and it has no economic interest in a supplier’s decision to participate in
the SCF program. Therefore, amounts due to the Company’s suppliers that elect to participate in SCF programs are included in the
“Accounts payable” line item in the Company’s Condensed Consolidated Balance Sheets and the activity is reflected in “Net cash
provided by operating activities” in the Company’s Condensed Consolidated Statements of Cash Flows. Based on correspondence
with the financial institutions that are involved with Smurfit Westrock’s two primary SCF programs, while the amount suppliers elect
to sell to the financial institutions varies from period to period, the amount generally averages approximately
11
-
14%
of the
Company’s accounts payable balance. The outstanding payment obligations to financial institutions under these programs were
$367 million
as of
September 30, 2025
.
47
Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment
expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the
Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise
been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows
for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note
12.
Debt
” and “Note
18. Variable Interest Entities
” of the
Condensed
Consolidated Financial Statements for a discussion of the
receivables securitization facilities and the amount outstanding under the Company’s vendor financing and commercial card programs.
Cash Flow Activity
The following table contains selected financial information from Smurfit Westrock’s Condensed Consolidated Statements of Cash
Flows for the periods presented ($ in millions):
|
Nine months ended September 30,
|
|||
|
2025
|
2024
|
||
|
Net cash provided by operating activities
|
$
2,197
|
$
702
|
|
|
Net cash used for investing activities
|
$
(1,564)
|
$
(1,595)
|
|
|
Net cash (used for) provided by financing activities
|
$
(674)
|
$
869
|
|
Net cash
provided by
operating activities
increased
by
$1,495 million
to
$2,197 million
in the
nine months ended
September 30, 2025
from
$702 million
in the
nine months ended
September 30, 2024
, primarily due to a
$1,525 million
increase in net income adjusted for
non-cash items, primarily including depreciation, depletion and amortization, impairment charges, cash surrender value increase in
excess of premiums paid, share-based compensation expense,
deferred income tax benefit
, and
pension and other postretirement
funding more than cost.
The increase in net income adjusted for non-cash items was partially offset by the
$30 million
increase
in the
cash outflows from changes in operating assets and liabilities. The increase in the cash outflows from changes in operating assets and
liabilities was inclusive of
cash payments
to financial institutions of
$47 million
in connection with the Company’s accounts
receivable monetization agreements in the
nine months ended
September 30, 2025
, compared to
cash proceeds
of
$49 million
in the
prior year period. See “Note
11. Fair Value Measurement
” of the
Condensed
Consolidated Financial Statements for additional
information.
Net cash
used for
investing activities of
$1,564 million
in the
nine months ended
September 30, 2025
consisted primarily of capital
expenditures of
$1,609 million
. Net cash
used for
investing activities of
$1,595 million
in the
nine months ended
September 30, 2024
consisted primarily of capital expenditures of
$897 million
and
$716 million
of cash paid for purchase of businesses, net of cash
acquired.
Net cash
used for
financing activities of
$674 million
in the
nine months ended
September 30, 2025
consisted primarily of cash
outflows from cash dividends paid to shareholders of
$675 million
, tax paid in connection with shares withheld from employees of
$68 million
and debt issuance costs of
$8 million
, partially offset by
a net
increase
in debt of
$74 million
. Net cash
provided by
financing activities of
$869 million
in the
nine months ended
September 30, 2024
consisted of cash inflows from a net
increase
in debt
of
$1,455 million
, partially offset by cash outflows from dividends paid to shareholders of
$493 million
,
debt issuance costs of
$44 million
,
purchases of treasury stock of
$27 million
, and tax paid in connection with shares withheld from employees of
$21 million
.
Contractual Obligations and Commitments
Smurfit Westrock is a party to enforceable and legally binding contractual obligations involving commitments to make payments to
third parties. These obligations impact Smurfit Westrock’s short-term and long-term liquidity and capital resource needs. Certain
contractual obligations are reflected on Smurfit Westrock’s Condensed Consolidated Balance Sheets as of
September 30, 2025
, while
others are considered future obligations. Smurfit Westrock’s contractual obligations primarily consist of items such as long-term debt,
including current portion, lease obligations, purchase obligations and other obligations.
There have been no material changes to the contractual obligations and commitments disclosed in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of the Form 10-K for the fiscal year ended December 31, 2024.
48
Off-Balance Sheet Arrangements
As of
September 30, 2025
, Smurfit
Westrock
did not have any off-balance sheet arrangements.
NON-GAAP FINANCIAL MEASURE
Definitions
Non-GAAP Financial Measure
Smurfit Westrock reports its financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
However, management believes “Adjusted EBITDA”, a non-GAAP financial measure discussed below, provides Smurfit Westrock’s
Board of Directors, investors, potential investors, securities analysts and others with additional meaningful financial information that
should be considered when assessing its ongoing performance
relative to other periods because it adjusts out non-recurring items that
management believes are not indicative of the ongoing results of the business
. Smurfit Westrock management also uses this non-
GAAP financial measure in making financial, operating and planning decisions, and in evaluating company performance. Non-GAAP
financial measures are not intended to be considered in isolation of or as a substitute for, or superior to, financial information prepared
and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative for, the GAAP results. The
non-GAAP financial measure Smurfit Westrock presents may differ from similarly captioned measures presented by other companies.
Adjusted EBITDA
Smurfit Westrock uses the non-GAAP financial measure “Adjusted EBITDA” to evaluate its overall performance. The composition of
Adjusted EBITDA is not addressed or prescribed by GAAP. Smurfit Westrock defines
Adjusted EBITDA as
net income (loss)
before
income tax expense,
depreciation, depletion and amortization
,
interest expense, net
,
pension and other postretirement non-service
income (expense), net
,
share-based compensation expense
,
other expense, net
,
impairment and restructuring costs
,
transaction and
integration-related expenses associated with the Combination
,
amortization of fair value step up on inventory
a
nd other specific items
that management believes are not indicative of the ongoing operating results of the business.
Management believes that the most directly comparable GAAP measure to Adjusted EBITDA is “
Net income (loss)
”.
Set forth below is a reconciliation of the non-GAAP financial measure Adjusted EBITDA to
Net income (loss)
, the most directly
comparable GAAP measure, for the periods presented ($ in millions).
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
Net income (loss)
|
$
245
|
$
(150)
|
$
601
|
$
173
|
|||
|
Income tax expense
|
91
|
33
|
183
|
164
|
|||
|
Depreciation, depletion and amortization
|
659
|
564
|
1,875
|
872
|
|||
|
Impairment and restructuring costs
|
65
|
21
|
360
|
21
|
|||
|
Transaction and integration-related expenses associated with
the Combination
|
15
|
267
|
72
|
350
|
|||
|
Amortization of fair value step up on inventory
|
—
|
227
|
—
|
227
|
|||
|
Interest expense, net
|
177
|
167
|
526
|
225
|
|||
|
Pension and other postretirement non-service (income)
expense, net
|
(8)
|
(8)
|
(24)
|
31
|
|||
|
Share-based compensation expense
|
35
|
123
|
114
|
154
|
|||
|
Other expense, net
|
21
|
13
|
44
|
13
|
|||
|
Other adjustments
|
2
|
8
|
16
|
(10)
|
|||
|
Adjusted EBITDA
|
$
1,302
|
$
1,265
|
$
3,767
|
$
2,220
|
|||
See “Note
3. Segment Information
”
of the
Condensed
Consolidated Financial Statements for additional information regarding “Other
adjustments” in the table above.
49
GUARANTOR SUMMARIZED FINANCIAL INFORMATION
On April 3, 2024, Smurfit Kappa Treasury Unlimited Company (“SKT”) completed a private offering of
$750 million
aggregate
principal amount of 5.200% Senior Notes due 2030,
$1,000 million
aggregate principal amount of 5.438% Senior Notes due 2034 and
$1,000 million
aggregate principal amount of 5.777% Senior Notes due 2054, which we refer to as the “Original SKT Notes”, and on
November 26, 2024, Smurfit Westrock Financing Designated Activity Company (“SWF” and together with SKT, the “Issuers”)
completed a private offering of
$850 million
aggregate principal amount of 5.418% Senior Notes due 2035, which we refer to as the
“Original SWF Notes” (and, together with the Original SKT Notes, the “Original Notes”). As part of those offerings, the Issuers and
the Guarantors (as hereinafter defined) of the Original Notes entered into registration rights agreements with the initial purchasers
thereof in which we agreed to use commercially reasonable efforts to complete exchange offers for such Original Notes in compliance
with applicable securities laws. In connection with the registration rights agreements, on May 23, 2025, following an exchange offer
process, certain holders of the Original Notes, exchanged their notes for newly issued registered notes (the “New Notes”). The New
Notes are substantially identical to the Original Notes, except that the New Notes are registered under the United States Securities Act
of 1933, as amended, and will not have any transfer restrictions, registration rights or additional interest provisions.
The Guarantees
The Original Notes and the New Notes are subject to any limitations under applicable law, fully and unconditionally guaranteed,
jointly and severally, on a senior unsecured basis by each of Smurfit Westrock plc and the following wholly-owned subsidiaries of
Smurfit Westrock plc (the “Subsidiary Guarantors”): Smurfit Kappa Group plc, Smurfit Kappa Investments Limited, Smurfit Kappa
Acquisitions Unlimited Company, Smurfit Kappa Treasury Funding Designated Activity Company, Smurfit International B.V.,
Smurfit WestRock US Holdings Corporation, WestRock Company, WRKCo Inc., WestRock MWV, LLC and WestRock RKT, LLC.
In addition, SWF fully and unconditionally guarantees SKT’s obligations under the Original Notes and the New Notes, and SKT fully
and unconditionally guarantees SWF’s obligations under the Original Notes and the New Notes. SKT and SWF are both wholly-
owned subsidiaries of Smurfit Westrock plc. Smurfit Westrock plc and the Subsidiary Guarantors are collectively referred to herein as
the “Guarantors”, and the Issuers and the Guarantors are collectively referred to herein as the “Obligor Group”.
Operations are conducted almost entirely through Smurfit Westrock plc’s subsidiaries other than the Issuers and the Subsidiary
Guarantors. Accordingly, the Obligor Group’s cash flow and ability to service its debt, including the New Notes, are dependent upon
the earnings of Smurfit Westrock plc’s other non-obligor subsidiaries (the “Non-Obligor Subsidiaries”) and the distribution of those
earnings to the Obligor Group, whether by dividends, loans or otherwise. Holders of the New Notes have a direct claim only against
the Obligor Group.
Basis of Preparation of the Summarized Financial Information
The tables below present summarized financial information provided in conformity with Rule 13-01 of the SEC’s Regulation S-X. The
summarized financial information of the Obligor Group is presented on a combined basis, excluding intercompany balances and
transactions between entities in the Obligor Group. The Obligor Group’s investment balances in Non-Obligor Subsidiaries have been
excluded. The Obligor Group’s amounts due from, amounts due to, and transactions with Non-Obligor Subsidiaries have been
presented separately. The summarized financial information below should be read in conjunction with the Company’s Condensed
Consolidated Financial Statements contained herein, as the summarized financial information may not necessarily be indicative of the
results of operations or financial position had the subsidiaries operated as independent entities ($ in millions).
50
|
SUMMARIZED STATEMENT OF OPERATIONS
|
Nine months ended
September 30,
|
|
2025
|
|
|
Net sales to unrelated parties
|
$
1,100
|
|
Net sales to Non-Obligor Subsidiaries
|
909
|
|
Gross profit
|
697
|
|
Interest expense, net with unrelated parties
|
(464)
|
|
Interest expense, net with Non-Obligor Subsidiaries
|
(253)
|
|
Net income and net income attributable to the Obligor Group
|
291
|
|
SUMMARIZED BALANCE SHEETS
|
September 30,
|
December 31,
|
|
|
2025
|
2024
|
||
|
ASSETS
|
|||
|
Current amounts due from Non-Obligor Subsidiaries
|
$
5,617
|
$
4,925
|
|
|
Other current assets
|
920
|
1,049
|
|
|
Total current assets
|
$
6,537
|
$
5,974
|
|
|
Non-current amounts due from Non-Obligor Subsidiaries
|
$
2,938
|
$
2,848
|
|
|
Other non-current assets
|
384
|
370
|
|
|
Total non-current assets
|
$
3,322
|
$
3,218
|
|
|
LIABILITIES
|
|||
|
Current amounts due to Non-Obligor Subsidiaries
|
$
8,320
|
$
9,681
|
|
|
Other current liabilities
|
999
|
1,122
|
|
|
Total current liabilities
|
$
9,319
|
$
10,803
|
|
|
Non-current amounts due to Non-Obligor Subsidiaries
|
$
6,467
|
$
6,604
|
|
|
Other non-current liabilities
|
11,683
|
9,644
|
|
|
Total non-current liabilities
|
$
18,150
|
$
16,248
|
51
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes during the
nine months ended
September 30, 2025
to Smurfit Westrock’s critical accounting
policies and estimates as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2024.
NEW ACCOUNTING STANDARDS
See “Note
1. Description of Business and Summary of Significant Accounting Policies
” of the
Condensed
Consolidated Financial
Statements
for a full description of recent accounting pronouncements, including the respective expected dates of adoption and
expected effects on Smurfit
Westrock
’s results of operations and financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Smurfit Westrock’s exposure to market risk as identified in Smurfit Westrock’s Annual
Report on Form 10-K for the year ended December 31, 2024.
Item 4. Controls and Procedures
Smurfit Westrock’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly
Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures are
designed by the Company to ensure that it records, processes, summarizes and reports in a timely manner the information it must
disclose in reports that it files with or submits to the SEC.
Anthony Smurfit
,
President & Group Chief Executive Officer
, and
Ken
Bowles
,
Executive Vice President & Group Chief Financial Officer
, reviewed and participated in management’s evaluation of the
disclosure controls and procedures.
Based on this evaluation,
Anthony Smurfit
,
President & Group Chief Executive Officer
, and
Ken Bowles
,
Executive Vice President &
Group Chief Financial Officer
concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, Smurfit
Westrock’s disclosure controls and procedures were not effective as a result of the material weakness in our internal control over
financial reporting described below.
Previously Reported Material Weakness in Internal Control over Financial Reporting
A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting such that there
is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a
timely basis.
As discussed elsewhere in this Quarterly Report on Form 10-Q, on July 5, 2024, we completed the Combination between Smurfit
Kappa and WestRock. Prior to the Combination, Smurfit Kappa, as a public limited company incorporated in Ireland and listed on the
London Stock Exchange and on the Euronext Dublin Market, was not subject to Section 404 of the Sarbanes Oxley Act of 2002
(“SOX”), while WestRock, as a U.S. publicly traded company incorporated in Delaware and listed on the New York Stock Exchange,
was subject to Section 404 of SOX. Upon the completion of the Combination, Smurfit Kappa and WestRock became wholly-owned
subsidiaries of Smurfit Westrock.
As a result of the Combination, Smurfit Westrock’s management is in the process of integrating Smurfit Kappa and WestRock’s
legacy internal control frameworks. In connection with Smurfit Westrock’s assessment of its internal control over financial reporting
for the purposes of complying with Section 302 of SOX, we previously identified and reported a material weakness relating to the
company’s selection and development of control activities intended to mitigate the risks to achieving its objectives. This relates to
certain processes and controls principally at historical Smurfit Kappa that were not subject to the requirements of Section 404 of SOX
prior to the Combination.
52
This material weakness resulted in:
•
A lack of formalization of an existing control process for documenting evidence of management review and performance of
control procedures, including the level of precision in the execution of controls and procedures to ascertain completeness and
accuracy of information produced by the Company.
•
Existing controls related to the preparation and review of manual journal entries not designed to adequately mitigate the
associated risks.
•
The need to augment General IT Controls, specifically as they pertain to (i) logical access controls to ensure appropriate
segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to
appropriate Company personnel and (ii) program change management controls to ensure that information technology
program and data changes affecting financial IT applications and underlying accounting records are identified, tested,
authorized and implemented appropriately.
Notwithstanding the identified material weakness, management believes that the
Condensed
Consolidated Financial Statements and
related financial information included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial
position, results of operations and cash flows as of and for the periods presented.
Remediation Plan
The process of designing, implementing and testing remediation measures is underway in respect of this material weakness and to
improve our internal control over financial reporting. These remediation measures include a number of ongoing actions which have
been prioritized in a material weakness remediation strategy that aligns to the most impactful controls:
•
designing and implementing policies and guidance related to the operation of controls – this has been largely implemented
with testing planned and ongoing to validate the operating effectiveness;
•
developing appropriate controls over the review of manual journal entries – automated approval workflows for manual
journal entries have now been implemented at relevant material locations, as has an additional risk-based interim manual
control. Testing to validate the effectiveness of these controls is planned and ongoing; and
•
enhancing and expanding across the organization the general IT processes and controls – this has been largely implemented
with testing planned and ongoing to validate the operating effectiveness.
In addition, control operators continue to participate in SOX training and live support sessions, with a specific focus on the priority
areas documented in the material weakness remediation strategy.
The implementation of our remediation measures is underway, and requires validation and testing of the design and operating
effectiveness of internal controls over a sustained period. Until testing is completed, we cannot ensure that the measures taken by us to
date, and actions that we may take in the future, will be sufficient to remediate these deficiencies or that they will prevent or avoid
potential future deficiencies.
Changes in Internal Control over Financial Reporting
Other than the changes that may continue to result from the integration following the Combination and remediation actions described
above, there has been no change in Smurfit Westrock’s internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended
September 30, 2025
that has materially affected, or is
reasonably likely to materially affect, Smurfit Westrock’s internal control over financial reporting.
53
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information called for by this item is incorporated herein by reference to “Note
16. Commitments and Contingencies
” of the
Condensed
Consolidated Financial Statements (included in Part I, Item 1).
Item 1A. Risk Factors
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A,
“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially adversely affect
our business, financial condition, results of operations (including revenues and profitability) and/or ordinary share price. There have
been no material changes in our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information relating to our repurchase of ordinary shares during the three months ended
September 30,
2025
:
|
Period
|
Total Number of
Shares Purchased
(1)
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced
Programs
|
Approximate
Dollar Value of
Shares that May Yet
Be Purchased
Under the Programs
|
|||
|
July 1, 2025 – July 31, 2025
|
822
|
$
43.00
|
—
|
—
|
|||
|
August 1, 2025 – August 31, 2025
|
—
|
—
|
—
|
—
|
|||
|
September 1, 2025 – September 30, 2025
|
—
|
—
|
—
|
—
|
|||
|
Total
|
822
|
—
|
(1)
During the three months ended
September 30, 2025
, 822 ordinary shares that would otherwise have been issued to current or former
employees who were beneficiaries of the SKG Employee Trust in connection with the vesting and settlement of equity awards
granted under the legacy Smurfit Kappa 2018 Deferred Bonus Plan were surrendered to the Company on behalf of such employees.
This was done as part of net share settlement to cover applicable taxes, fees and/or duties paid by the Company or its applicable
subsidiary as a consequence of vesting and settlement of such equity awards. The fair market value of ordinary shares that were
surrendered by the SKG Employee Trust to the Company for no consideration was equal to the value of applicable taxes, fees and/or
duties paid by the Company in respect of such taxes, fees and/or duties. These ordinary shares have been subsequently cancelled.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Trading Plan(s)
In the three months ended
September 30, 2025
, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act)
defined in Item 408 of Regulation S-K).
54
Item 6. Exhibits
|
Exhibit
Number
|
Description of Exhibit
|
||
|
3.1
|
|||
|
10.1†+
|
|||
|
22
|
|||
|
31.1†
|
|||
|
31.2†
|
|||
|
32†*
|
|||
|
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.**
|
||
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema.**
|
||
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase.**
|
||
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Document.**
|
||
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase.**
|
||
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase.**
|
||
|
104
|
Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document.
|
†
Filed or furnished herewith
*
The certification furnished in Exhibit 32 hereto is deemed to accompany this Quarterly Report on Form 10-Q and will not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the
Registrant specifically incorporates it by reference. Such certification will not be deemed to be incorporated by reference into
any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Registrant specifically incorporates it by reference.
**
Submitted electronically
herewith.
+
Certain identified information has been excluded from this exhibit because it is not material and is of the type that the Company
treats as private or confidential.
55
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
|
Smurfit Westrock plc
|
||
|
Dated:
November 7, 2025
|
/s/ Anthony Smurfit
|
|
|
Name:
|
Anthony Smurfit
|
|
|
Title:
|
President & Group Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
||
|
Smurfit Westrock plc
|
||
|
Dated:
November 7, 2025
|
/s/ Ken Bowles
|
|
|
Name:
|
Ken Bowles
|
|
|
Title:
|
Executive Vice President & Group Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
||
TABLE OF CONTENTS
Part I. Financial InformationItem 1. Financial StatementsItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 2. Management S Discussion and AnalysisItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II - Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits