International Paper (IP) Q4 2025 earnings summary

Executive summary

• Announced plan to separate into two independent public companies focused on North America and EMEA packaging, following the integration of DS Smith assets, with completion expected in 12–15 months.

• DS Smith acquisition integrated, creating regional leaders with $15.2B (NA) and $8.5B (EMEA) 2025 net sales.

• Transformation initiatives and the 80/20 strategy are driving cost savings, margin expansion, and operational improvements.

• Significant progress on profitable growth strategy, with above-market growth in North America and cost actions in EMEA.

• Completed sale of Global Cellulose Fibers business for $1.5 billion, with a $1.07 billion impairment charge recorded.

Financial highlights

• Full-year 2025 net sales were $23.63 billion, with adjusted EBITDA of $2.98–$3.0 billion and free cash flow of $229 million.

• North America achieved 37% year-over-year adjusted EBITDA growth in 2025, with net sales of $15.2 billion and adjusted EBITDA of $2.3 billion.

• EMEA reported 2025 net sales of $8.5 billion and adjusted EBITDA of $784–$800 million, with early benefits from transformation actions.

• Loss from continuing operations was $2.84 billion in 2025, including $2.47 billion goodwill impairment, $0.96 billion accelerated depreciation, and $0.63 billion restructuring charges.

• 2026 enterprise guidance: net sales of $24.1–$24.9 billion, adjusted EBITDA of $3.5–$3.7 billion, and free cash flow of $300–$500 million.

Outlook and guidance

• 2026 adjusted EBITDA target set at $3.5–$3.7 billion for the full year and $740–$760 million for Q1.

• North America 2026 adjusted EBITDA target: $2.5–$2.6 billion; EMEA 2026 adjusted EBITDA: $1.0–$1.1 billion, with growth driven by commercial and cost-out benefits.

• 2027 enterprise EBITDA target: $5 billion, with North America contributing ~$3.5 billion and EMEA ~$1.5 billion.

• Transformation costs expected in 1H26, with step-change improvement in 2H26.

• Guidance assumes above-industry growth and ongoing cost-out initiatives, but does not reflect future price realization or full impact of recent winter storms.