Sylvamo Releases Third Quarter Earnings

MEMPHIS, Tenn.--( BUSINESS WIRE)--Sylvamo (NYSE: SLVM), the world’s paper company, is releasing third quarter 2025 earnings. The company will host an audio webcast at 10 a.m. EST at investors.sylvamo.com.

Message from Chairman and Chief Executive Officer

“Our team delivered 7% sales volume growth quarter-over-quarter and improved operational performance in the third quarter. We also returned substantial cash to shareowners in the quarter, which included $42 million in share repurchases and $18 million in dividends,” said Jean-Michel Ribiéras. “I am proud of how our teams executed and overcame some regional challenges by focusing on commercial and operational excellence as well as implementing strategic initiatives to reduce costs and strengthen our competitive position.”

Financial Highlights – Third Quarter

Commercial and Operational Highlights – Third Quarter vs. Second Quarter

Fourth Quarter Outlook

*See “Non-GAAP Financial Measures” for definitions of non-GAAP financial measures. Reconciliations are included in the financial schedules below.

Management Summary

We delivered stronger uncoated freesheet volumes in the third quarter, up 7% quarter-over-quarter. Our teams executed well, resulting in improved commercial and operational performance. We returned substantial cash to shareowners through $42 million in share repurchases and $18 million in dividends, totaling $60 million in the quarter. Year to date through October, we have returned $82 million through share repurchases and $73 million through dividends for a total of $155 million in cash returns to shareowners.

In September, our board of directors authorized a new $150 million share repurchase program—our third since 2022—underscoring our commitment to disciplined capital allocation and long-term value creation. We will continue to evaluate opportunities to repurchase shares at attractive prices, especially when we feel our valuation is well below our intrinsic value. This is why, in the third quarter, we repurchased $42 million worth of shares at an average price of $44.74. Our board also declared a fourth quarter dividend of $0.45 per share, which we paid Oct. 17.

-- Industry Conditions

Looking at our regional industry conditions, North America and Brazil are solid, while Europe and other Latin American countries are challenged.

-- Continuous Improvement

As we navigate through cyclical industry conditions and headwinds, we are focused on the things we can control. We are driving commercial and operational excellence as well as implementing strategic initiatives across all our regions. These efforts should improve margins, reduce costs and strengthen our competitive position.

-- Riverdale Supply Agreement

In August, International Paper (NYSE: IP) announced plans to convert its uncoated freesheet paper machine at its Riverdale mill to produce containerboard by the third quarter of 2026. In October, we announced that a supply agreement with International Paper will continue until May 2026. We expect the Riverdale mill to supply 260,000 short tons of cutsize uncoated freesheet in 2025 and approximately 100,000 short tons in 2026.

As a result of the supply agreement ending, we will optimize our product, segment and customer mix as well as leverage our European mills to supply the U.S. and Mexico. We will build inventory over time to help bridge the gap until our Eastover investments are complete and we have the additional 60,000 short tons of incremental capacity, which is expected to ramp up in the fourth quarter of 2026.

-- Brazil Forestlands

Owning forestlands in Brazil is a unique strength that differentiates Sylvamo. These assets provide a competitive advantage that goes beyond operational benefits. Direct control over wood fiber ensures supply security, reduces exposure to market volatility and supports long-term cost management.

Our forestlands represent a significant part of our intrinsic value, which we believe is not fully reflected in our current market valuation. We recently had an appraisal completed on our forestlands, which are now valued at nearly 5 billion reais. Forestlands are tangible and appreciating resources that are a cornerstone of our strategy, delivering cost advantages and a source of intrinsic value for our shareholders.

-- Sylvamo Strategy

Our strategy is to be singularly focused on uncoated freesheet, the largest and most resilient segment in the graphic paper space. We are investing to strengthen our competitive advantages to generate earnings and cash flows. We view these investments as high-return and low-risk as we stay in our core product line and reinforce our position as the supplier of choice for our customers. We will leverage our strengths to drive high returns on invested capital.

Earnings Webcast

The company will host an audio webcast at 10 a.m. EST at investors.sylvamo.com.

Those who want to participate should call 800-715-9871 (U.S.) or +1-646-307-1963 (international) and use access code 4562356.

Replays are available at investors.sylvamo.com for one year and by phone for one week. To listen by phone, call 800-770-2030 (U.S.) or +1-609-800-9909 (international) and use access code 4562356.

About Sylvamo

Sylvamo Corporation (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2024 were $3.8 billion. For more information, please visit Sylvamo.com.

Select Financial Measures

(In millions)

Third

Quarter

2025

Second

Quarter

2025

Third

Quarter

2024

Net Sales

846

794

965

Net Income

Business Segment Operating Profit

150

Adjusted Operating Earnings

102

Adjusted EBITDA

151

193

Cash Provided By Operating Activities

163

Free Cash Flow

)

119

Segment Information

Sylvamo uses business segment operating profit to measure the earnings performance of its businesses and is calculated as set forth in footnote (g) under the "Sales and Earnings by Business Segment" table (page 8). Third quarter 2025 net sales by business segment and operating profit by business segment compared with the second quarter of 2025 and the third quarter of 2024 are as follows:

Business Segment Results

(In millions)

Third

Quarter

2025

Second

Quarter

2025

Third

Quarter

2024

Net Sales by Business Segment

Europe

184

181

194

Latin America

228

207

247

North America

450

419

532

Inter-segment Sales

(16

)

(13

)

Net Sales

846

794

965

Operating Profit by Business Segment

Europe

(21

)

(38

)

Latin America

North America

Business Segment Operating Profit (Loss)

150

Operating profits in the third quarter of 2025:

Europe - $(21) million compared with $(38) million in the second quarter of 2025. Losses were lower due to lower planned maintenance outages, higher volumes and lower operating costs which more than offset lower price and mix and higher unabsorbed costs due to higher economic downtime.

Latin America - $35 million compared with $2 million in the second quarter of 2025. Earnings were higher due to lower planned maintenance outages, lower operating costs, higher volumes and higher price and mix which were slightly offset by higher input costs.

North America - $84 million compared with $66 million in the second quarter of 2025. Earnings were higher due to lower planned maintenance outages and higher volumes which more than offset lower price and mix and higher operating costs.

Effective Tax Rate

The reported effective tax rate for the third quarter of 2025 was 35%, compared to 25% for the second quarter of 2025. The higher rate for the third quarter was due to the mix of earnings in our regions.

Excluding net special items, the effective tax rate for the third quarter of 2025 was 35%, compared with 28% for the second quarter of 2025.

The effective tax rate excluding net special items is a non-GAAP financial measure and is calculated by adjusting the income tax provision and rate to exclude the tax effect at the applicable statutory rate of net special items. Management believes that this presentation provides useful information to investors by providing a more meaningful comparison of the income tax rate between past and present periods.

Effects of Net Special Items

Net special items in the third quarter of 2025 amounted to a net after-tax charge of $1 million ($0.03 per diluted share), compared with a net after-tax charge of $0 million ($0.00 per diluted share) in the second quarter of 2025.

Non-GAAP Financial Measures

Adjusted Operating Earnings (non-GAAP) are net income (GAAP), net of tax and net special items. Management uses this measure to focus on ongoing operations and believes it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. The Company believes that using this information, along with net income, provides for a more complete analysis of the results of operations. Net income is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.

Adjusted EBITDA (non-GAAP) is net income (GAAP), net of tax, plus the sum of income taxes, net interest expense (income), depreciation, amortization and cost of timber harvested, stock-based compensation, and, when applicable for the periods reported, net special items. Management uses this measure in managing the operating performance of our business and believes that Adjusted EBITDA and Adjusted EBITDA Margin provide investors and analysts meaningful insights into our operating performance and Adjusted EBITDA is a relevant metric for the third-party debt. The Company believes that using this information, along with net income, provides for a more complete analysis of the results of its operations. Net income is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.

Free Cash Flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operating activities. Management utilizes this measure in connection with managing our business and believes that Free Cash Flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet and service debt, and return cash to shareowners. It should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures. Free Cash Flow also enables investors to perform meaningful comparisons between past and present periods.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the information under the headings "Fourth Quarter 2025 Outlook" and "Management Summary." Any or all forward-looking statements may turn out to be incorrect, and our actual actions and results could differ materially from what they express or imply, because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. These risks, uncertainties, and other factors include those disclosed in the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2024, filed with the U.S. Securities and Exchange Commission (SEC) and in our subsequent filings with the SEC, available on our website, Sylvamo.com. These forward-looking statements reflect our current expectations, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

SYLVAMO CORPORATION

Consolidated Statement of Operations

Preliminary and Unaudited

(In millions, except per share amounts)

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

NET SALES

846

965

794

2,461

2,803

COSTS AND EXPENSES

Cost of products sold (exclusive of depreciation, amortization and cost of timber harvested shown separately below)

624

700

640

(h)

1,926

(b)

2,100

(g)

Selling and administrative expenses

(a)

(d)

213

(a)

230

(d)

Depreciation, amortization and cost of timber harvested

(e)

134

115

(e)

Taxes other than payroll and income taxes

Interest (income) expense, net

(f)

(i)

(c)

(f)

INCOME BEFORE INCOME TAXES

132

141

305

Income tax provision

NET INCOME

221

EARNINGS PER SHARE

Basic

1.43

2.32

0.37

2.45

5.37

Diluted

1.41

2.27

0.37

2.42

5.26

Average Shares of Common Stock Outstanding - Diluted

The accompanying notes are an integral part of this consolidated statement of operations.

(a)

Includes a pre-tax loss of $1 million ($1 million after taxes) for certain severance costs related to our salaried workforce for the three and nine months ended September 30, 2025, a pre-tax loss of $1 million ($1 million after taxes) related to the termination of the Georgetown mill offtake agreement for the nine months ended September 30, 2025 and a pre-tax loss of $1 million ($0 million after tax) related to environmental reserves in Brazil for the nine months ended September 30, 2025.

(b)

Includes a pre-tax gain of $1 million ($1 million after taxes) for the nine months ended September 30, 2025, to adjust the recognition of a foreign value-added tax refund in Brazil.

(c)

Includes a pretax charge of $1 million ($1 million after tax) of interest expense related to tax settlements for nine months ended September 30, 2025.

(d)

Includes pre-tax loss of $2 million ($1 million after taxes) for legal fees related to the Brazil Tax Dispute for the three and nine months ended September 30, 2024. Also includes pre-tax loss of $1 million ($1 million after taxes) and $2 million ($2 million after taxes) for certain severance costs related to our salaried workforce for the three and nine months ended September 30, 2024, respectively. Finally, includes pre-tax loss of $2 million ($1 million after taxes) for the nine months ended September 30, 2024, for integration costs related to the Nymölla acquisition.

(e)

Includes pre-tax loss of $1 million ($1 million after taxes) for the three and nine months ended September 30, 2024, related to forest fires in Brazil.

(f)

Includes pre-tax loss of $5 million ($4 million after taxes) for the three and nine months ended September 30, 2024, related to debt extinguishment costs.

(g)

Includes pre-tax gain of $1 million ($1 million after taxes) for the nine months ended September 30, 2024, to adjust the recognition of a foreign value-added tax refund in Brazil. Also includes pre-tax loss of $1 million ($1 million after taxes) for the nine months ended September 30, 2024, for other charges.

(h)

Includes a pre-tax gain of $1 million ($1 million after taxes) to adjust the recognition of a foreign value-added tax refund in Brazil.

(i)

Includes a pretax charge of $1 million ($1 million after tax) of interest expense related to tax settlements.

SYLVAMO CORPORATION

Reconciliation of Net Income to Adjusted Operating Earnings

Preliminary and Unaudited

(In millions, except per share amounts)

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Net Income

221

Add back: Net special items expense (income)

—

Adjusted Operating Earnings

102

101

230

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Diluted Earnings Per Common Share as Reported

1.41

2.27

0.37

2.42

5.26

Add back: Net special items expense (income)

0.03

0.17

—

0.05

0.22

Adjusted Operating Earnings Per Share

1.44

2.44

0.37

2.47

5.48

SYLVAMO CORPORATION

Sales and Earnings by Business Segment

Preliminary and Unaudited

(In millions)

Net Sales by Business Segment

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Europe

184

194

181

555

607

Latin America

228

247

207

634

708

North America

450

532

419

1,307

1,515

Inter-segment Sales

(16

)

(13

)

(35

)

(27

)

Net Sales

846

965

794

2,461

2,803

Operating Profit by Business Segment

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Europe

(21

)

(38

)

(83

)

Latin America

100

North America

192

237

Business Segment Operating Profit (Loss)

150

172

344

Income Before Income Taxes

132

141

305

Interest expense (income), net

(c)

(e)

(b)

(c)

Net special items expense (income)

(a)

(d)

—

(f)

(a)

(d)

Business Segment Operating Profit (g)

150

172

344

(a)

Includes a pre-tax loss of $1 million ($1 million after taxes) for certain severance costs related to our salaried workforce for the three and nine months ended September 30, 2025. Also includes a pre-tax gain of $1 million ($1 million after taxes) to adjust the recognition of a foreign value-added tax refund in Brazil, a pre-tax loss of $1 million ($1 million after tax) related to the termination of the Georgetown mill offtake agreement and a pre-tax loss of $1 million ($0 million after tax) related to environmental reserves in Brazil, all for the nine months ended September 30, 2025.

(b)

Includes a pretax charge of $1 million ($1 million after tax) of interest expense related to tax settlements for the nine months ended September 30, 2025.

(c)

Includes pre-tax loss of $5 million ($4 million after taxes) for the three and nine months ended September 30, 2024, related to debt extinguishment costs.

(d)

Includes pre-tax loss of $2 million ($1 million after taxes) for legal fees related to the Brazil Tax Dispute for the three and nine months ended September 30, 2024 and a pre-tax loss of $1 million ($1 million after taxes) for the three and nine months ended September 30, 2024, related to forest fires in Brazil. Also includes pre-tax loss of $1 million ($1 million after taxes) and $2 million ($2 million after taxes) for certain severance costs related to our salaried workforce for the three and nine months ended September 30, 2024, respectively. Finally, includes pre-tax loss of $2 million ($1 million after taxes) for integration costs related to the Nymölla acquisition, a pre-tax gain of $1 million ($1 million after taxes) to adjust the recognition of a foreign value-added tax refund in Brazil and a pre-tax loss of $1 million ($1 million after taxes) for other charges, all for the nine months ended September 30, 2024.

(e)

Includes a pretax charge of $1 million ($1 million after tax) of interest expense related to tax settlements.

(f)

Includes a pre-tax gain of $1 million ($1 million after taxes) to adjust the recognition of a foreign value-added tax refund in Brazil.

(g)

As set forth in the chart above, business segment operating profit is defined as income before income taxes, but excluding net interest expense (income) and net special items. Business segment operating profit is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments.

Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin

Preliminary and Unaudited

(In millions)

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Net Income

221

Adjustments:

Income tax provision

Interest expense (income), net

Depreciation, amortization and cost of timber harvested

134

115

Stock-based compensation

Net special items expense (income)

—

Adjusted EBITDA

151

193

323

475

Net Sales

846

965

794

2,461

2,803

Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin by Business Segment

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Adjusted EBITDA

Europe

(11

)

(30

)

(56

)

Latin America

134

158

North America

101

113

245

284

Total Business Segment Adjusted EBITDA

151

193

323

475

Net Sales (excluding inter-segment sales eliminations)

Europe

184

194

181

555

607

Latin America

228

247

207

634

708

North America

450

532

419

1,307

1,515

Total Business Segment Net Sales

862

973

807

2,496

2,830

Adjusted EBITDA Margin

Europe

(17

(10

Latin America

North America

SYLVAMO CORPORATION

Consolidated Balance Sheet

Preliminary

(In millions)

September 30, 2025

December 31, 2024

(unaudited)

ASSETS

Current Assets

Cash and temporary investments

205

Accounts and notes receivable, net

393

429

Contract assets

Inventories

434

361

Other current assets

Total Current Assets

990

1,063

Plants, Properties and Equipment, net

1,045

944

Forestlands

378

319

Goodwill

128

111

Right of Use Assets

Deferred Charges and Other Assets

109

TOTAL ASSETS

2,703

2,604

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable

383

375

Notes payable and current maturities of long-term debt

Accrued payroll and benefits

Other current liabilities

183

206

Total Current Liabilities

653

682

Long-Term Debt

778

782

Deferred Income Taxes

148

152

Other Liabilities

147

141

Equity

Common stock $1.00 par value, 200.0 shares authorized, 45.6 shares and 44.9 shares issued and 39.4 shares and 40.6 shares outstanding at September 30, 2025 and December 31, 2024, respectively

Paid-in capital

Retained earnings

2,499

2,455

Accumulated other comprehensive loss

(1,326

)

(1,490

)

1,307

1,081

Less: Common stock held in treasury, at cost, 6.1 shares and 4.3 shares at September 30, 2025 and December 31, 2024, respectively

(330

)

(234

)

Total Equity

977

847

TOTAL LIABILITIES AND EQUITY

2,703

2,604

SYLVAMO CORPORATION

Consolidated Statement of Cash Flows

Preliminary and Unaudited

(In millions)

Nine Months Ended

September 30,

2025

2024

OPERATING ACTIVITIES

Net income

221

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation, amortization, and cost of timber harvested

134

115

Deferred income tax provision (benefit), net

(10

)

Stock-based compensation

Changes in operating assets and liabilities and other:

Accounts and notes receivable

(28

)

Inventories

(34

)

(21

)

Accounts payable and accrued liabilities

(63

)

Other

(38

)

(11

)

CASH PROVIDED BY OPERATING ACTIVITIES

174

305

INVESTMENT ACTIVITIES

Invested in capital projects

(168

)

(157

)

CASH USED FOR INVESTMENT ACTIVITIES

(168

)

(157

)

FINANCING ACTIVITIES

Dividends paid

(55

)

(43

)

Issuance of debt

250

Reduction of debt

(65

)

(285

)

Repurchases of common stock

(82

)

(30

)

Other

)

CASH USED FOR FINANCING ACTIVITIES

(128

)

(114

)

Effect of Exchange Rate Changes on Cash

)

Change in Cash, Temporary Investments and Restricted Cash

(111

)

Cash, Temporary Investments and Restricted Cash

Beginning of the period

205

280

End of the period

308

SYLVAMO CORPORATION

Reconciliation of Cash Provided by Operations to Free Cash Flow

Preliminary and Unaudited

(In millions)

Three Months Ended

September 30,

Three Months Ended

June 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Cash Provided By Operating Activities

163

174

305

Adjustments:

Cash invested in capital projects

(54

)

(44

)

(66

)

(168

)

(157

)

Free Cash Flow

119

)

148

SYLVAMO CORPORATION

Reconciliation of Net Income to Adjusted EBITDA - Fourth Quarter 2025 Outlook

Estimates

(In millions)

Three Months Ended

December 31,

2025

Net Income

$39 - $49

Adjustments:

Income tax provision

16 - 21

Interest expense (income), net

Depreciation, amortization and cost of timber harvested

Stock-based compensation

Adjusted EBITDA

$115 - $130

The non-GAAP financial measures presented in this release have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this release may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as Sylvamo.

Management believes certain non-U.S. GAAP financial measures, when used in conjunction with information presented in accordance with U.S. GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company’s financial condition and results of operations. Management also uses these non-U.S. GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.