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, expected to complete in 12-15 months, each with distinct leadership and strategies.

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

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

• Transformation initiatives and 80/20 strategy driving significant cost reductions, operational improvements, and customer satisfaction gains.

Financial highlights

• 2025 net sales: $23.63B (enterprise), North America $15.2B, EMEA $8.5B; adjusted EBITDA: $2.98B (enterprise), $2.3B (NA), $800M (EMEA).

• 2025 adjusted EBITDA margin: 12.6% (enterprise), 15.7% (NA), 9.3% (EMEA); North America achieved 37% YoY adjusted EBITDA growth.

• Loss from continuing operations in 2025 was $2.84B, including $2.47B goodwill impairment, $958M accelerated depreciation, and $630M restructuring charges.

• Free cash flow for 2025 was negative $159M, with capital expenditures totaling $1.86B.

• Fourth quarter 2025 net sales were $6.01B, with a loss from continuing operations of $2.36B.

Outlook and guidance

• 2026 guidance: net sales $24.1B–$24.9B, adjusted EBITDA $3.5B–$3.7B, free cash flow $300M–$500M.

• Q1 2026 adjusted EBITDA guidance: $740M–$760M (including corporate), North America $534M, EMEA in line with Q4.

• 2026 North America EBITDA growth driven by $100M commercial and $500M cost benefits, offset by $200M non-recurring transformation costs and $200M inflation.

• 2026 EMEA EBITDA growth driven by $200M commercial and $200M cost-out benefits, offset by $100M inflation.

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