International Paper (IP) Baird 2026 Global Industrial Conference summary

Strategic direction and separation

• Separation from DS Smith is intended to let each business pursue distinct markets, balance sheets, investment priorities and talent allocation; completion expected within the original 12–15-month window, by 1Q 2027 at the latest.

• European and U.S. packaging differ in customer buying, product mix and energy exposure: Europe has more FMCG, lightweight and recycled packaging; the U.S. has more logistics-driven demand and virgin fiber.

• Global customer synergies proved weaker in operating practice: purchasing relationships are largely plant-to-plant, and global buying decisions are not typically integrated.

North American transformation

• North American packaging capacity has been reduced by ~20%; portfolio exits, major mill closures and box-plant consolidations are mostly complete, with excess and uneconomic assets removed.

• Capital spending has doubled over the past couple of years and is being redirected to fewer, stronger assets, including a new NORPAC mill, Waterloo opening, Mississippi investment and corrugator upgrades.

• Focus is shifting toward continuous improvement, productivity, customer innovation, service and quality; leadership said customer satisfaction has returned to No. 1 from last among major peers in 2022.

Market and financial outlook

• Management expects 2027 demand to remain sluggish with inflationary headwinds; operations are running tight through 4Q and expected to stay tight through 2027.

• For next year, planned incremental cost reductions are $250–$350 million; price carryover is estimated at $900 million–$1.1 billion, while total cost headwinds are expected at ~$600 million.

• EBITDA has increased 40% since 2024, attributed to cost reductions; pricing since CEO tenure began has largely offset inflation, with price only recently starting to catch up.

• Current-year free cash flow guidance was characterized as $100–$200 million, reflecting heavy reinvestment and working-capital catch-up; CapEx is expected at $1.25–$1.4 billion for the next couple of years, then ~7.5% of sales further out.