International Paper (IP) Jefferies Global Industrials Conference 2026 summary

Macro environment and strategic response

• Ongoing macro challenges include trade tariffs, inflation, and energy costs, especially in Europe, impacting demand and cost structures.

• Aggressive cost reduction and asset rationalization have been prioritized, with significant closures and reinvestment in productive assets.

• The company is focused on controlling what it can, such as cost structure, market share, and capital efficiency, to offset external volatility.

• Demand remains steady but soft, with Europe weaker than North America; muted demand is expected through 2027 barring major relief.

• Supply in North America is tight due to capacity reductions, supporting industry discipline and productivity.

Operational transformation and investments

• Over the past two years, substantial high-cost and unproductive assets have been closed, with aggressive reinvestment in mills and converting systems.

• Capital spending in North America has doubled, focusing on fewer, higher-return assets, driving productivity and cost advantages.

• Modernization is ongoing, with about 14-15% of box assets removed and significant upgrades across 80 facilities.

• The company expects CapEx to remain elevated for a few years before settling at a competitive ongoing rate.

• Productivity gains are already visible, with further improvements expected as investments layer in and variability from asset changes decreases.

European restructuring and spin-off

• Europe is undergoing aggressive restructuring, with around 40 facility closures and 4,000 job reductions since the start.

• The European business is on track for a spin-off within 12-15 months, with milestones progressing as planned.

• Execution in Europe focuses on asset optimization and cost structure, mirroring the U.S. approach.

• Energy volatility and consumer weakness remain key challenges in Europe, prompting even more aggressive cost actions.