International Paper (IP) Bank of America 2026 Global Agriculture and Materials Conference summary

Strategic transformation and restructuring

• Shifted focus to become an exclusively packaging business, exiting non-core operations and eliminating $700 million in costs.

• Aggressively invested in modernization, with North American capital spending per mill up 50% in 2025–2027 versus prior years.

• Created two independent regional powerhouses in North America and EMEA, each to operate separately for greater focus and capital alignment.

• EMEA is undergoing significant cost reduction, targeting $250–$300 million in savings and impacting 4,000 jobs across 30 facilities before a planned spin-off.

• U.S. operations are further along in transformation, focusing on productivity, modernization, and capacity optimization.

Financial outlook and capital allocation

• EMEA will receive a $40 million investment pre-spin, with 60% allocated to severance and the remainder to modernization and facility closures.

• Dividend policy is under review to ensure alignment with future cash flows and capital needs of each spun business.

• North America is expected to maintain a competitive dividend, with flexibility for reinvestment and potential buybacks or acquisitions.

• Clear capital allocation model and performance metrics will be communicated at the time of the spin.

Market conditions and pricing strategy

• North America guided to $530 million Q1 EBITDA and $2.5–$2.6 billion for the year; EMEA guided to $220 million Q1 EBITDA and ~$1 billion for the year.

• January was strong in the U.S. due to inventory correction, but normalization is expected; storms caused a $40–$50 million natural gas impact.

• North American market growth expected at 0–1% for the year, with company performance likely a few points above market.

• Announced a $70/ton price increase effective March 1, with 70% of customers contractually tied to price changes; expects successful pass-through despite recent index volatility.

• 80% of the market is integrated, reducing volatility; focus is on disciplined price realization for the variable 30% of business.