"Our plan includes the proposed spin-off of our Printing Papers business into the world's premier global paper company": Mark S. Sutton

One of the world's leading producers of renewable, fiber-based packaging, pulp and paper, International Paper is planning to spin-off its printing paper business into the world's premier paper company.

 

"We are excited about the path we are charting to accelerate value creation. In December of 2020, we announced plans to position International Paper as a highly advantaged corrugated packaging company. We are building on the strength of our packaging business and taking meaningful actions to drive sustainable, profitable growth and accelerate value creation for our customers and shareowners," said by Mr. Mark S. Sutton, Chairman of the Board and Chief Executive Officer at International Paper in its annual performance summary report for the year 2020.

 

Mr. Sutton stated firmly in the report that our plan includes the proposed spin-off of our Printing Papers business into the world’s premier global paper company. And with a more focused portfolio, International Paper will take meaningful actions to accelerate profitable growth and reduce our cost structure to deliver $350 - $400 million in incremental earnings growth by the end of 2023. 

 

We have significant catalysts to accelerate our performance including:

- Streamlining and simplifying our organization to support a corrugated packaging and absorbent fibers company with a more focused geographic footprint 

- Redesigning processes to increase efficiency and reduce costs in maintenance and reliability, distribution, logistics and sourcing 

- Identifying opportunities to optimize our manufacturing and converting assets to reduce costs and be more capital efficient 

 

Mr. Mark says, that our performance in 2020 and our outlook reinforce our confidence in the strength of International Paper and our ability to drive improvement through operational, commercial and investment excellence. I am proud of our team and our results. We remain committed to strengthening our company for all our stakeholders in the short-term and the long-term, as we pursue our Vision to be among the most successful, sustainable and responsible companies in the world. 

 

In the last three years, International Paper (IP) contributed nearly $70 million to our signature causes in our communities in addition to funds contributed by our generous employees. Addressing critical community needs remained a significant focus in 2020, and IP was proud to donate two million corrugated boxes to local food banks and agencies to support their efforts to deliver essential food and supplies to those in need.

 

 

In 2020, we continued to demonstrate the strength and resilience of our employees, our diverse customer base and our world-class manufacturing and supply chain capabilities. Adapting to our customers’ rapidly changing needs was critical to successfully navigating demand surges in parts of our corrugated packaging and cellulose fibers businesses, as well as unprecedented demand declines in printing papers resulting from the pandemic’s impact on businesses and schools. 

 

We also managed costs extremely well across our three businesses and took prudent and early actions to reinforce cash generation and enhance our financial strength in the face of economic uncertainty. 

 

Through the combination of these actions, we delivered: 

- $3.1 billion in adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) 

- Outstanding free cash flow of $2.3 billion, bringing our five-year average free cash flow to $2.0 billion 

- The 11th consecutive year of value-creating returns

We continued to make choices consistent with our capital allocation framework: 

- We repaid $1.7 billion of debt to further strengthen our balance sheet. 

- Our pension gap improved by $500 million in 2020, resulting in a healthy 95% funding level. 

- We paid $800 million in dividends to our shareowners in 2020, bringing our five-year total to $5.2 billion returned through dividends and share repurchases. This represents just over 50% of our free cash flow in that five-year period. 

- We continued to invest in our North American and EMEA corrugated packaging businesses to enhance our capabilities, serve customers and grow earnings. 

 

2020 was a year of relentless challenges – through it all, we demonstrated that we can navigate all types of economic conditions, operate safely and produce solid results.