Second Quarter 2024 Earnings August 9, 2024 1 © 2024 Sylvamo Corporation. All rights reserved. The World's Paper Company Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements. Forward-looking statements forecast or state expectations concerning future events. These statements often can be identified by the fact that they do not relate strictly to historical or current facts. They typically use words such ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2024 was $164 million with a margin of 18% [6] - Free cash flow generation was $62 million, and adjusted operating earnings were $1.98 per share [4][6] - A 50% increase in quarterly dividend from $0.30 to $0.45 per share was announced [4] Business Line Data and Key Metrics Changes - Uncoated free sheet conditions improved, with industry demand in Europe up 14% and North America up 3%, while Latin America decreased by 1% [5] - Price and mix improved by $26 million due to pulp and paper price increases and better mix in Latin America [6] Market Data and Key Metrics Changes - North America saw a 3% increase in demand, while Europe experienced a 14% increase; Latin America remained flat due to issues in Argentina [5][17] - Industry operating rates improved in North America, with a competitor closing a machine in Germany, reducing European supply by about 5% [5] Company Strategy and Development Direction - The company focuses on uncoated free sheets and aims to create long-term value through talented teams and low-cost mills [8] - Capital allocation strategy includes maintaining a strong financial position, reinvesting in the business, and returning cash to shareholders [8][9] Management's Comments on Operating Environment and Future Outlook - Management expects third quarter adjusted EBITDA to be between $170 million and $185 million, with volume improvements driven by Latin America and North America [7] - The company is confident in its future and motivated by opportunities, with a commitment to return at least 40% of free cash flow to shareholders [11] Other Important Information - The company is making progress on Project Horizon, aiming for $110 million in savings by year-end [7] - A refinancing of long-term debt was announced to extend the maturity profile [9] Q&A Session Summary Question: Wood costs and market structure changes in Europe - Management noted that wood costs in Brazil are increasing due to past underinvestment in forestry, while European wood costs are stable [14][15] Question: Demand trends and visibility by region - Demand is expected to be positive for the full year, with North America projected to grow by 5% and Europe by 7% [17] Question: Fiber costs in Latin America - Increased fiber costs in Brazil are expected to continue, with self-sufficiency currently at 70% [20] Question: Dividend increase rationale - The decision to raise the dividend by 50% was based on confidence in future earnings and cash flow growth [26][27] Question: Economic downtime in pulp production - Economic downtime was due to balancing capacity with customer demand, with no issues in pulp demand [32][34] Question: Customer demands and market positioning - Customers are increasingly focused on sustainability in Europe, service in the US, and brand development in Brazil [41]

Financial Performance - Net income for Q2 2024 was $83 million ($1.98 per diluted share), up from $43 million ($1.02 per diluted share) in Q1 2024[73]. - Net sales increased to $933 million in Q2 2024 from $905 million in Q1 2024, with adjusted EBITDA rising to $164 million and an adjusted EBITDA margin of 18%[73][92]. - Adjusted EBITDA for the first half of 2024 was $282 million, down from $332 million in the same period of 2023[92]. - Cash provided by operating activities for the six months ended June 30, 2024, was $142 million, an increase from $140 million for the same period in 2023[97]. - Free Cash Flow for the six months ended June 30, 2024, was $29 million, compared to $35 million for the same period in 2023[94]. - The company generated strong operating cash flow, indicating confidence in meeting short-term liquidity needs[95]. Segment Performance - Business segment operating profit for North America increased by $32 million year-over-year in Q2 2024, driven by higher volumes and lower costs[89]. - Latin America segment reported a decrease in operating profit by $11 million in Q2 2024, primarily due to lower sales prices and unfavorable product mix[86]. - Europe segment's operating profit increased by $19 million year-over-year in Q2 2024, attributed to lower outage costs and input costs[83]. Cash Flow and Expenditures - Free cash flow improved to $62 million in Q2 2024 compared to $(33) million in Q1 2024[73]. - Cash used for working capital components decreased to $72 million for the six months ended June 30, 2024, from $94 million in the same period of 2023[98]. - Total capital expenditures for the six months ended June 30, 2024, were approximately $113 million, or 6.1% of net sales[102]. - The company expects to spend approximately $175 to $190 million annually on maintenance, regulatory, and reforestation capital expenditures for the next several years[102]. - Cash used for financing activities for the six months ended June 30, 2024, included $25 million in dividends and $30 million in share repurchases[100]. - Cash used for investing activities decreased primarily due to the prior year's purchase of the Nymölla mill[99]. - The company plans to spend approximately $30 million to $35 million on high-return projects in 2024[102]. Future Outlook - The company expects slightly unfavorable price and mix in Q3 2024, but volume is anticipated to improve, particularly in Latin America and North America[75]. - Planned maintenance outage costs are expected to improve significantly in Q3 2024, with no major planned outages scheduled[75]. - The company has completed almost 75% of its planned maintenance outages for the year after the first half[74]. Accounting Policies - The company has not made any changes to its critical accounting policies during the first six months of 2024[105].

Financial Performance - Net income for Q2 2024 was $83 million ($1.98 per diluted share), compared to $43 million ($1.02 per diluted share) in Q1 2024[2]. - Adjusted EBITDA increased to $164 million (18% margin) in Q2 2024, up from $118 million (13% margin) in Q1 2024[2]. - Free cash flow improved to $62 million in Q2 2024, compared to a negative $33 million in Q1 2024[2]. - Net sales for Q2 2024 were $933 million, an increase from $905 million in Q1 2024[8]. - Net income for the three months ended June 30, 2024, was $83 million, compared to $49 million for the same period in 2023, representing a 69.4% increase[21]. - Adjusted EBITDA for the three months ended June 30, 2024, was $164 million, up from $124 million in the same period last year, reflecting a 32.3% increase[29]. - Net sales for the three months ended June 30, 2024, totaled $933 million, compared to $919 million for the same period in 2023, indicating a 1.5% growth[23]. - The adjusted EBITDA margin for the three months ended June 30, 2024, was 17.6%, compared to 13.5% in the same period last year, showing an improvement of 4.1 percentage points[29]. - Operating profit by business segment for Q2 2024 was $122 million, up from $72 million in Q1 2024[9]. - Operating profit for North America in the three months ended June 30, 2024, was $77 million, compared to $45 million in the same period last year, a 71.1% increase[24]. - Net income for the six months ended June 30, 2024, was $126 million, down from $146 million for the same period in 2023, reflecting a decrease of 13.7%[34]. - Free cash flow for the six months ended June 30, 2024, was $29 million, compared to $35 million in 2023, indicating a decrease of 17.1%[36]. Future Projections - The company expects adjusted EBITDA for Q3 2024 to be between $170 million and $185 million, with volume projected to increase by $10 million to $15 million[1]. - Adjusted EBITDA for the three months ending September 30, 2024, is estimated to be between $170 million and $185 million[37]. Shareholder Returns - A 50% dividend increase was declared for Q3 2024, raising the dividend from $0.30 to $0.45 per share[5]. - The company repurchased $30 million of its shares this year, with $120 million remaining on its $150 million share repurchase authorization[5]. Cost Management - Project Horizon aims for run rate savings of $110 million by the end of 2024 through structural cost reductions[6]. Tax and Expenses - The effective tax rate for Q2 2024 was 27%, unchanged from the previous quarter[11]. - Interest expense for the three months ended June 30, 2024, was $9 million, down from $12 million in the same period last year[29]. - The company incurred a pre-tax loss of $2 million for integration costs related to the Nymölla acquisition during the three months ended March 31, 2024[19]. - The company reported a pre-tax gain of $1 million for a foreign value-added tax refund in Brazil for the three months ended June 30, 2024[25]. Asset and Liability Management - Total assets decreased from $2,872 million on December 31, 2023, to $2,691 million on June 30, 2024, representing a decline of approximately 6.3%[32]. - Cash and temporary investments decreased from $220 million to $145 million, a reduction of 34.1%[32]. - Total current liabilities decreased from $695 million to $654 million, a decline of approximately 5.9%[32]. - Long-term debt decreased from $931 million to $894 million, a reduction of 4.0%[32]. - Total equity decreased from $901 million to $830 million, a decline of approximately 7.9%[32]. - Retained earnings increased from $2,222 million to $2,317 million, an increase of 4.3%[32].

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Bel ...

Have you been paying attention to shares of Sylvamo Corporation (SLVM) ? Shares have been on the move with the stock up 2.4% over the past month. The stock hit a new 52-week high of $73.84 in the previous session. Sylvamo Corporation has gained 45.8% since the start of the year compared to the -1.1% move for the Zacks Basic Materials sector and the 10.3% return for the Zacks Paper and Related Products industry. What's Driving the Outperformance? The stock has a great record of positive earnings surprises, a ...

With net interest expense now nearly cut in half from the period right after the spin-off, management will be more and more comfortable diverting free cash flow elsewhere. Most recent earnings and guidance The first item that stood out to me from the Q1 24 eamings presentation was a negative quarter free cash flow versus highly positive Q4 2023 and the guidance for maintenance CAPEX. As free cash flow in simplistic terms is cash from operations less CAPEX, higher CAPEX when it is maintenance rather than gro ...

From a technical perspective, Sylvamo Corporation (SLVM) is looking like an interesting pick, as it just reached a key level of support. SLVM recently overtook the 20-day moving average, and this suggests a short-term bullish trend. The 20-day simple moving average is a popular investing tool. Traders like this SMA because it offers a look back at a stock's price over a shorter period and helps smooth out price fluctuations. The 20-day can also show more trend reversal signals than longer-term moving averag ...

Pgiam/iStock via Getty Images Investment Summary Following my last publication on Sylvamo (NYSE:SLVM), the stock has lifted 45% into the green and surpassed my previous valuation target of $55/share. Winding back the clock, in Q3 FY 2023, we advocated for the materials (alongside the industrial sector) as the most attractive S&P 500 sector on a price/value basis. It had 10% projected earnings growth with just 2% of the Index's weighting, making it the most attractive under this composite (Figure 1). Figure ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Whi ...