Net income was $110m, Adjusted Net Income was $210m, with net income reflecting $344m in restructuring costs and a $239m gain from the sale of the Company’s operations. Credit: JHVEPhoto via Shutterstock.

Westrock Company, a provider of sustainable paper and packaging solutions, has disclosed its financial performance for the fiscal fourth quarter (Q4) and full year ending 30 September 2023.

The company reported net sales of $5.0bn, with a net income of $110m. Adjusted Net Income stood at $210m. The earnings per diluted share (EPS) were $0.43 and the Adjusted EPS was $0.81.

The consolidated Adjusted EBITDA reached $736m, showcasing a 13.0% increase in the Corrugated Packaging segment compared to the same period last fiscal year.

However, economic downtime and a rise in non-cash pension costs impacted results negatively by $64m and $40m, respectively, compared to Q4 of fiscal 2022.

Despite these challenges, WestRock announced a 10% dividend increase in October 2023.

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Full year 2023 highlights

For the entire fiscal year, WestRock reported net sales of $20.3bn. The net loss was $1.6bn, with an Adjusted Net Income of $778m.

The fiscal year results included a $1.9bn pre-tax, non-cash goodwill impairment and $859m in pre-tax restructuring and other costs, net. The consolidated Adjusted EBITDA for the full year was $3.0bn.

WestRock surpassed cost savings expectations, achieving more than $450m in run-rate savings by the end of fiscal 2023. The company invested $1.1bn in capital expenditures and returned $281m to stockholders in dividend payments.

CEO’s perspective and future outlook

WestRock CEO David B Sewell expressed pride in the company’s performance, emphasising the team’s commitment to customers and the successful execution of transformation actions.

Looking ahead to fiscal 2024, Sewell highlighted the company’s dedication to unlocking additional cost savings and driving profitable growth.

Consolidated financial results

In the fourth quarter, WestRock’s net sales declined by 7.7% to $4.99bn compared to the same period last fiscal year.

The decrease was primarily driven by a 29.2% reduction in Global Paper segment sales, partially offset by a 5.8% increase in Corrugated Packaging segment sales. Net income for Q4 2023 was $109.8m, a 68.1% decrease from Q4 2022.

Higher restructuring costs, lower selling price/mix and increased economic downtime contributed to the decline in net income. The consolidated Adjusted EBITDA decreased by $183.7m, or 20.0%, compared to Q4 2022.

The company disclosed restructuring costs of $344m, with a gain of $239m on the sale of the interior partitions converting operations and Chattanooga mill.

Segment results

Corrugated packaging segment:

  • Segment sales increased by 5.8% to $2.52bn.
  • Adjusted EBITDA reached $433.8m, with a margin of 17.2%.

Consumer packaging segment:

  • Segment sales decreased by 7.2% to $1.21bn.
  • Adjusted EBITDA was $203.8m, with a margin of 16.8%.

Global paper segment:

  • Segment sales decreased by 29.2% to $1.01bn.
  • Adjusted EBITDA was $133.6m, with a margin of 13.2%.

Distribution segment:

  • Segment sales decreased by 16.0% to $314.1m.
  • Adjusted EBITDA was $10.9m, with a margin of 3.5%.

The decline in segment results was primarily due to lower volumes and lower selling price/mix. WestRock says it remains optimistic about its strategic growth plans and cost-saving initiatives for the upcoming fiscal year.