Exhibit 99.2
Westrock Q1 fy22 resultsFebruary 3, 2022
Forward Looking Statements:This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to the statements on the slides entitled “Deliberate Actions for Margin Expansion and Growth”, “Capital Allocation”, “Q2 FY22 Guidance”, “Proven Track Record of Growth”, “Adjusted Free Cash Flow”, “Additional Guidance” and “Key Commodity Annual Consumption Volumes” that give guidance or estimates for future periods, as well as statements regarding, among other things, (i) that new segments will provide greater transparency around our margin structure both today and as we transform into the company of tomorrow; (ii) that the Company will invest in our business through high-return, organic projects; (iii) that the Company will opportunistically and aggressively repurchase shares; (iv) that the Company will maintain its target leverage ratio; (v) that the Corrugated Packaging Adjusted EBITDA FY22 margin is expected at or above last year; (vi) that beauty, personal care, and spirits demand recovering as economy reopens, (vii) that we expect FY22 to be 7th consecutive year of Adjusted Free Cash Flow greater than $1 billion; (viii) that the Company continues to expect strong cash flows in FY22; (ix) that the Company is positioned for continued sales, earnings and free cash flow growth; and (x) that pricing flow through is expected to outpace inflation for FY22Forward-looking statements are based on our current expectations, beliefs, plans or forecasts and are typically identified by words or phrases such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” and other words, terms and phrases of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. WestRock cautions readers that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. WestRock’s businesses are subject to a number of risks that would affect any such forward-looking statements, including, among others, developments related to the COVID-19 pandemic, including the severity, magnitude and duration of the pandemic, negative global economic conditions arising from the pandemic, impacts of governments’ responses to the pandemic on our operations and the operations of our customers, impacts of the pandemic on commercial activity, our customers and consumer preferences and demand, supply chain disruptions, and disruptions in the credit or financial markets; decreases in demand for their products; increases in energy, raw materials, shipping and capital equipment costs; reduced supply of raw materials; adverse legal, reputational and financial effects on us resulting from last year’s ransomware incident or additional cyber incidents; fluctuations in selling prices and volumes; intense competition; the potential loss of certain customers; the scope, costs, timing and impact of any restructuring of our operations and corporate and tax structure; the occurrence of a natural disaster, such as hurricanes or other unanticipated problems, such as labor difficulties, equipment failure or unscheduled maintenance and repair; risks associated with completing our strategic capital projects on the anticipated timelines and realizing our anticipated EBITDA improvements; benefits that we expect to realize from actions that we are taking and plan to take in response to COVID-19; and adverse changes in general market and industry conditions. Such risks and other factors that may impact management’s assumptions are more particularly described in our filings with the Securities and Exchange Commission, including in Item 1A under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2021. The information contained herein speaks as of the date hereof and WestRock does not have or undertake any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures:We report our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our GAAP results. The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies.We may from time to time be in possession of certain information regarding the Company that applicable law would not require us to disclose to the public in the ordinary course of business, but would require us to disclose if we were engaged in the purchase or sale of our securities. This presentation shall not be considered to be part of any solicitation of an offer to buy or sell the Company’s securities. This presentation also may not include all of the information regarding the Company that you may need to make an investment decision regarding the Company’s securities. Any investment decision should be made on the basis of the total mix of information regarding the Company that is publicly available as of the date of the investment decision. Forward Looking Statements; Non-GAAP Financial Measures 2
Sales and earnings growth in Q1 FY22Net sales of $5.0 billion, up 12.5% year-over-yearConsolidated Adjusted EBITDA(1) of $680 million, up 1.6% year-over-yearConsolidated Adjusted EBITDA margin(1) of 13.7%, down 150 basis points year-over-yearAdjusted EPS(1) of $0.65 per share, up 6.6% year-over-yearGenerated $84 million of Adjusted Free Cash Flow(1)Packaging sales(2) increased 10% and Papers sales increase 24% year-over-year driven by successful implementation of price increases and solid demandCost inflation and supply chain disruptions negatively impacted earningsWithin target leverage ratio(1) and repurchased $100 million of stock 3 Q1 FY22 key highlights Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the AppendixCorrugated Packaging segment sales (excluding white top trade sales) and Consumer Packaging segment salesAdjusted EBITDA margin (excluding white top trade sales)Consolidated Adjusted EBITDA margins. Strong earnings growth in dynamic environment Consolidated Adjusted EBITDA(1) ($ in millions) Q1 fy22 margin Vs. q4 fy21 Vs. q1 fy21 Corrugated Packaging(3) 13.5% -370bps -460bps Consumer Packaging 14.9% -220bps -160bps Global Paper 17.2% -380bps +330bps Distribution 2.0% -470bps -340bps WestRock(4) 13.7% -350bps -150bps Consolidated Adjusted EBITDA Margins(1)
4 Revised segment Reporting Corrugated packaging integrated corrugated containers and other corrugated products Consumer packaging integrated consumer packaging products such as folding cartons and interior partitions Global paper containerboard and paperboard to external customers distribution distribution of packaging products New segments will provide greater transparency around our margin structureboth today and as we transform into the company of tomorrow Reporting with new segments
5 Our path forward transformation agendaDesigned to improve our overall roic GROWTH Margin improvement DisciplinedUse of Capital Improving operational effectiveness Investing in our business Focusing on productivity + efficiency
ABI MEXICO | GRUPO MODELOFOR A CIRCULAR FUTURE 6 CanCollar® Eco packaging enabled by WestRock’s CanCollar® Fortuna automation technology, eliminating over 100 tons of plastic waste. © 2021 WESTROCK COMPANY . ALL RIGHTS RESERVED. Designed for mid- and high-speed can lines, FortunaTM is the fastest automation option on the market, enabling CanCollar® speeds up to 600 packs per minute! CanCollar® Fortuna Machine CanCollar® eco
Deliberate actions for Margin expansion and growth Leverage the WestRock Enterprise Operational Productivity and Simplification One Supply Chain Commercial Excellence Process standardizationShared servicesConsolidation & spend optimization Reliability- planned and unplanned downtimeHidden factoryDigital/Automation 7
Capital AllocationFY22e free cash flow of >$1.3 Billion Recent Deployment of CapitalRepurchased 2.1 million shares totaling $100 million in Q1 FY22Announced Longview box plant investmentNear Term Capital Deployment PrioritiesInvest in our business through high-return, organic projectsOpportunistically and aggressively repurchase sharesMaintain target leverage ratioCompleted First Phase of Strategic ReviewMore details around strategic review at Investor Day M&A ONGOING CAPITAL INVESTMENT$900M to $1B invested per year SHARE REPURCHASESOpportunistic when share price trades below intrinsic value DIVIDENDSustainable and growing dividend DEBT AND LEVERAGEMaintain leverage target ratio(2) of 2.25 to 2.5X STRATEGIC CAPITAL INVESTMENTSImprove competitive position and supports organic growth in attractive end markets $818 million in Capital Investments over last 12 months(1)FY22 CAPEX Guidance of $900 million to $1 billion Raised dividend 25% since February including October announced increase Paid down $1.3 billion of adjusted net debt in FY21(2)Net leverage of 2.40 times(2) Up to $500 million of stock repurchase over the next several months Completed Florence and Tres Barras projectsAnnounced new corrugated box plant in Longview Washington TTM as of December 31, 2021Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix. 8 CAPITALALLOCATION Foundation Built on:Strong Cash Flow Generation Core Principles Flexibility Bolt-on focus aligned to strategyReturns above Cost of Capital by Year 3
9 Our path forward transformation agendaDesigned to improve our overall roic GROWTH Margin improvement DisciplinedUse of Capital Improving operational effectiveness Investing in our business Focusing on productivity + efficiency
10 ONE WESTROCK Alex PeaseChief Financial Officer
11 Net sales up 12.5% in the quarterPricing realization exceeded cost inflationHigher inflation led by recycled fiber, energy, virgin fiber and freight costsRepurchased $100 million in stock in Q1 FY22Leverage remains within targeted levelsLargest scheduled maintenance quarter in company’s history; partially drove year-over-year margin compressionFree Cash Flow primarily impacted by reversal of one-time COVID related benefits Non-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Q1 Fy22 WestRock Results Q1 Year-over-year Highlights Consolidated Adjusted EBITDA ($ in Millions)(1) FIRST QUARTER SECOND QUARTER $ in millions, EXCEPT PER SHARE ITEMS FY22 FY21 Net Sales $4,952 $4,402 Consolidated Adjusted EBITDA(1) $680 $670 % Margin(1) 13.7% 15.2% Capital Expenditures $173 $171 Adjusted Free Cash Flow(1) $84 $562 Adjusted Earnings Per Diluted Share(1) $0.65 $0.61 +$10
12 Segment sales up 11.5% in the quarter driven by strong price/mixVolumes impacted by lower shipments year-over-year due to supply chain and labor challengesHigher inflation led by freight, energy, chemical and labor costsProductivity negatively impacted by COVID-related absenteeism, supply chain constraints and highest level of scheduled maintenance in the Company’s historyFY22 Adjusted EBITDA margin(2) expected at or above last year Excludes white top trade salesNon-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Q1 Fy22 corrugated packaging Results Q1 Year-over-year Highlights Adjusted EBITDA ($ in Millions)(2) FIRST QUARTER SECOND QUARTER $ in millions, EXCEPT PER SHARE ITEMS FY22 FY21 Segment Sales(1) $2,144 $1,923 Adjusted EBITDA(2) $289 $348 % Margin(1) (2) 13.5% 18.1% -$59
Q1 Year-over-year Highlights 13 Segment sales up 7.2% in the quarter driven by strong price mix and slightly higher volumesHigher inflation led by freight, energy, chemical and labor costsCPG sales remain solidBeverage and hard seltzer sales decelerated; Out-of-stock challenges remainBeauty, personal care, and spirits demand recovering as economy reopens Non-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Q1 Fy22 consumer packaging Results Adjusted EBITDA ($ in Millions)(1) FIRST QUARTER SECOND QUARTER $ in millions, EXCEPT PER SHARE ITEMS FY22 FY21 Segment Sales $1,139 $1,063 Adjusted EBITDA(1) $169 $175 % Margin(1) 14.9% 16.5% -$6
Q1 Year-over-year Highlights 14 Segment sales up 24.0% in the quarterPricing realization exceeded cost inflationStrong performance in key strategic markets including kraft paper and other specialty gradesMarket demand growingFlexibility enables us to navigate supply/demand dynamics Non-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Q1 Fy22 global paper Results Adjusted EBITDA ($ in Millions)(1) FIRST QUARTER SECOND QUARTER $ in millions, EXCEPT PER SHARE ITEMS FY22 FY21 Segment Sales $1,353 $1,091 Adjusted EBITDA(1) $232 $152 % Margin(1) 17.2% 13.9% +$80
Q1 Year-over-year Highlights 15 Segment sales up 6% in the quarterDemand remains strong, outpacing supply Profitability impacted by our suppliers’ continued headwinds and one-time non-recurring cost issuesMultiple initiatives underway focused on productivity and commercial excellence Non-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Q1 Fy22 distribution Results Adjusted EBITDA ($ in Millions)(1) FIRST QUARTER SECOND QUARTER $ in millions, EXCEPT PER SHARE ITEMS FY22 FY21 Segment Sales $325 $304 Adjusted EBITDA(1) $7 $16 % Margin(1) 2.0% 5.4% -$9
16 Q1 FY22 Free Cash Flow Q1 Adjusted Free Cash Flow of $84 million(1)Year-Over-Year comparison was negatively impacted by:Payment of short-term incentive compensation in cash vs. stockShort-term compensation higher following strong FY21401K match returned to cash payments in FY22First payment of the deferred payroll tax associated with the CARES ActExpect FY22 to be 7th consecutive year of Adjusted Free Cash Flow greater than $1 billion (1) Continue to Expect Strong Cash Flows In FY22 Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix.
17 Q2 fy22 guidance Q2 FY22Consolidated adjusted EBITDA(1) Q2 FY22Adjusted EPS(1) Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix. $780 - $830 MILLION $0.94 - $1.08Per Share Q2 FY22 Sequential Guidance Details Flow through of previously published price increases across containerboard, kraft paper, SBS, CNK, CRB and URB; price realization greater than inflationRoughly flat costs quarter over quarter as improvements in energy and OCC offset by higher freight, wage and other expensesApproximately 128K tons of maintenance downtime; still at elevated maintenance levels
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Appendix 19
20 Proven track record of growth ($ in Billions except EPS) FY16 FY21 CAGR FY22E Net Sales(1) $14.2 $18.7 6% $20.0 to $21.0 Consolidated Adjusted EBITDA(2) $2.3 $3.0 6% $3.3 to $3.7 Consolidated Adjusted EBITDA Margin(1)(2) 16% 16% 16.5% to 17.5% Adjusted EPS(2) $2.52 $3.39 6% $4.00 to $5.10 Adjusted Free Cash Flow(2) $1.0 $1.5 8% >$1.3 Net Leverage Ratio(2) 2.2x 2.38x Within Targeted Range Positioned for continued sales, earnings and free cash flow growth Broadest portfolio of paper and packaging solutionsAttractive marginsConsistent cash flowStrong balance sheet As reported: Including recycling sales in FY16.Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix Resilient business model
Consolidated Adjusted EBITDA(1) ($ in millions) Q1 year over year BRIDGES 21 Non-GAAP Financial Measure. See Non-GAAP Financial Measures and Reconciliations in the Appendix. Corrugated packaging Consumer packaging distribution Global paper
22 Pricing and mix management outpacing inflation Year-over-Year Q1 FY22 price/mix realization of $600 million year/year; $80 million in excess of inflationPublished price increases since Q4 FY20(1):+$160/ton North America Containerboard+$250/ton CNK +$300/ton SBS folding carton grades+$300/ton SBS plate and cup stock grades+$270/ton CRBGuidance reflects flow through of published price increases in kraft paper; higher export containerboard pricesKey inflation drivers include fiber, freight, energy, and chemicals Year-over-year price/mix and inflation highlights Pricing flow through expected to outpace inflation for FY22 As of October 15, 2021
23 Adjusted Free Cash Flow FY22 Adjusted Free Cash Flow expected to be >$1.3 billion(1)FY22 expected to be 7th straight year with Adjusted Free Cash Flow above $1 billion(1)Strong balance sheet with leverage within target of 2.25x to 2.50x Strong Free Cash Flow Adjusted Free Cash Flow(1)($ in Billions) Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix.
24 Additional guidance FY22 Guidance Q2 FY22 Full Year Depreciation & Amortization Approx. $365 million Approx. $1.48 billion Net Interest Expense and Interest Income Approx. $85 million Approx. $350 million Effective Adjusted Book Tax Rate(1) 23% - 25% Approx. 25% Adjusted Cash Tax Rate(1) Approx. 25% Share Count Approx. 267 million Approx. 270 million Mill Downtime Schedule (tons in thousands) Q1 Q2 Q3 Q4 Full Year FY22 Maintenance 192 128 58 12 390 FY21 Maintenance 105 65 119 12 301 FY20 Maintenance 146 105 21 102 374 maintenance FY22 GUIDANCE Non-GAAP Financial Measure. See Non-GAAP Financial Measures in the Appendix
25 Key Commodity Annual Consumption Volumes Commodity Category Volume Recycled Fiber (tons millions) 5.6 Wood (tons millions) 36 Natural Gas (MMBTU) 91 Electricity (kwh billions) 6.1 Polyethylene (lbs millions) 37 Caustic Soda (tons thousands) 245 Starch (lbs millions) 600 Approx. FY22 Annual Consumption Volumes Sensitivity Analysis Category Increase in Spot Price Approx. Annual EPS Impact Recycled Fiber (tons millions) +$10.00 / ton ($0.16) Natural Gas (MMBTU) +$0.25 / MMBTU ($0.06) FX Translation Impact +10% USD Appreciation ($0.07) Key Commodity Annual Consumption Volumes
ADJUSTED EARNINGS PER DILUTED SHAREWe use the non-GAAP financial measure “adjusted earnings per diluted share,” also referred to as “adjusted earnings per share” or “Adjusted EPS”, because we believe this measure provides our board of directors, investors, potential investors, securities analysts and others with useful information to evaluate our performance since it excludes restructuring and other costs and other specific items that we believe are not indicative of our ongoing operating results. Our management and board of directors use this information to evaluate our performance relative to other periods. We believe the most directly comparable GAAP measure is Earnings per diluted share.ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOWWe use the non-GAAP financial measures “adjusted operating cash flow” and “adjusted free cash flow” because we believe these measures provide our board of directors, investors, potential investors, securities analysts and others with useful information to evaluate our performance relative to other periods because they exclude certain cash restructuring and other costs, net of tax that we believe are not indicative of our ongoing operating results. We believe adjusted free cash flow provides greater comparability across periods by excluding capital expenditures. We believe the most directly comparable GAAP measure is net cash provided by operating activities. Consolidated Adjusted EBITDA AND Consolidated Adjusted EBITDA MARGINSWe use the non-GAAP financial measures “Consolidated Adjusted EBITDA” and “Consolidated Adjusted EBITDA margins”, along with other factors, to evaluate our performance against our peers. We believe that board of directors, investors, potential investors, securities analysts and others use these measures to evaluate our performance relative to our peers. Management believes that the most directly comparable GAAP measure to “Consolidated Adjusted EBITDA” (formerly referred to as Adjusted Segment EBITDA) is “Net income attributable to common stockholders”. It can also be derived by adding together each segment’s “Adjusted EBITDA” plus “Non-allocated expenses”. “Consolidated Adjusted EBITDA Margins” is calculated as “Consolidated Adjusted EBITDA” divided by Net Sales.LEVERAGE RATIO, NET LEVERAGE RATIO, TOTAL FUNDED DEBT AND ADJUSTED TOTAL FUNDED DEBTWe use the non-GAAP financial measures “leverage ratio” and “net leverage ratio” as measurements of our operating performance and to compare to our publicly disclosed target leverage ratio. We believe our board of directors, investors, potential investors, securities analysts and others use each measure to evaluate our available borrowing capacity – in the case of “net leverage ratio”, adjusted for cash and cash equivalents. We define leverage ratio as our Total Funded Debt divided by our Credit Agreement EBITDA, each of which term is defined in our credit agreement, dated July 1, 2015. Borrowing capacity under our credit agreement depends on, in addition to other measures, the Credit Agreement Debt/EBITDA ratio or the leverage ratio. As of December 31, 2021, our leverage ratio was 2.50 times. While the leverage ratio under our credit agreement determines the credit spread on our debt, we are not subject to a leverage ratio cap. Our credit agreement is subject to a Debt to Capitalization and Consolidated Interest Coverage Ratio, as defined therein. We define “Adjusted Total Funded Debt” as our Total Funded Debt less cash and cash equivalents. Net Leverage Ratio is the product of Adjusted Total Funded Debt divided by our Credit Agreement EBITDA. As of December 31, 2021, our net leverage ratio was 2.40 times. ADJUSTED NET DEBTWe believe “adjusted net debt” provides WestRock’s board of directors, investors, potential investors, securities analysts and others with useful information to evaluate WestRock’s repayment of debt relative to other periods because it includes or excludes certain items management believes are not comparable from period to period. We believe adjusted net debt provides greater comparability across periods by adjusting for cash and cash equivalents, as well as fair value of debt step-up included in Total Debt that is not subject to debt repayment. WestRock believes that the most directly comparable GAAP measure is “Total Debt” which is derived from the current portion of debt and long-term debt due after one year. Forward-looking GuidanceWe are not providing a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, merger and acquisition-related expenses, restructuring expenses, asset impairments, litigation settlements, changes to contingent consideration and certain other gains or losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. In addition, we have not quantified future amounts to develop our leverage ratio target but have stated our commitment to an investment grade credit profile in order to generally maintain the target. This target does not reflect Company guidance. Non-GAAP Financial Measures 26
27 The as reported results for Pre-Tax, Tax, Net of Tax and EPS are equivalent to the line items “Income before income taxes", "Income tax expense“, "Consolidated net income“ and “Earnings per diluted share”, respectively, as reported on the statements of income. Adjusted Net Income and Adjusted Earnings Per Diluted Share Reconciliation
28 The as reported results for Pre-Tax, Tax, Net of Tax and EPS are equivalent to the line items “Income before income taxes", "Income tax expense“, "Consolidated net income“ and “Earnings per diluted share”, respectively, as reported on the statements of income. Adjusted Net Income and Adjusted Earnings Per Diluted Share Reconciliation
29 The as reported results for Pre-Tax, Tax, Net of Tax and EPS are equivalent to the line items “Income before income taxes", "Income tax expense“, "Consolidated net income“ and “Earnings per diluted share”, respectively, as reported on the statements of income. Adjusted Net Income and Adjusted Earnings Per Diluted Share Reconciliation
30 The as reported results for Pre-Tax, Tax, Net of Tax and EPS are equivalent to the line items “Income from continuing operations before income taxes", "Income tax expense“, “Income from continuing operations“ and “Diluted earnings per share from continuing operations”, respectively, as reported on the statements of operations.Impacted by non-deductible goodwill Adjusted Net Income and Adjusted Earnings Per Diluted Share Reconciliation
31 Reconciliation of Net Income to Consolidated Adjusted EBITDA Schedule adds back expense or subtracts income for certain financial statement and segment footnote items to compute Consolidated Adjusted EBITDA.
32 Reconciliation of Net Income to Consolidated Adjusted EBITDA Schedule adds back expense or subtracts income for certain financial statement and segment footnote items to compute Consolidated Adjusted EBITDA.
33 Adjusted operating cash flow and adjusted free cash flow reconciliation
34 TTM Credit Agreement EBITDA Total Debt, Funded Debt and Leverage Ratio Additional Permitted Charges primarily include restructuring and other costs, and certain non-cash and other items as allowed under the credit agreement TTM Credit Agreement EBITDA
35 Adjusted Net Debt
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