WestRock Company announced results for its fiscal Q1 ended December 31, 2023. Net sales were $4.6 billion, compared to $ 4,923.1 billion in the three months ended December 31, 2022. The decline in net sales compared to the Q1 of fiscal 2023 was driven primarily by a $205 million, or 18.3%, decrease in Global Paper segment sales and a $156 million, or 12.8%, decrease in Consumer Packaging sales. These reductions include the impact of prior year mill and interior partition divestitures. These items were partially offset by an $83 million, or 3.5%, increase in Corrugated Packaging segment sales. The increase in Corrugated Packaging segment sales in the current year quarter includes a full quarter of operations of the Company’s former joint venture in Mexico that were acquired in December 2022.
Net income declined in the Q1 of fiscal 2024 compared to the prior year quarter primarily due to lower selling price/mix, the impact of increased economic downtime and prior year mill closures, lower volumes excluding the Mexico Acquisition and higher restructuring and other costs, net. These costs were partially offset by increased cost savings and the additional two months of contribution from the Mexico acquisition.
Consolidated Adjusted EBITDA decreased by $81 million to $571 million, or 12.5%, compared to the Q1 of fiscal 2023, primarily due to lower Global Paper and Consumer Packaging segment Adjusted EBITDA, as well as higher corporate non-allocated expenses.
“During the quarter, we grew external containerboard shipments, while we felt the impact of lower paperboard market demand,” said David B. Sewell, CEO. “We continue to expect significantly improved demand in the second half of our fiscal year.
“We are continuing to deliver on, and we expect to significantly exceed, our cost savings targets. Our transformation initiatives have strengthened our portfolio, are increasing vertical integration and created significant operational efficiencies. With our broad portfolio of packaging solutions and self-help initiatives, we are well positioned to capitalize on the opportunities ahead.”
WestRock is a leader in sustainable fiber-based paper and packaging solutions.
