WestRock Company (WRK) Bundle
A Brief History of WestRock Company
WestRock Company, a leading provider of paper and packaging solutions, was formed in 2015 through the merger of MeadWestvaco and RockTenn. Since its inception, WestRock has focused on creating sustainable packaging products and has strategically expanded its operations through acquisitions and organic growth.
Financial Performance Overview
As of March 31, 2024, WestRock reported the following financial metrics:
| Metric | Q2 Fiscal 2024 | Q2 Fiscal 2023 | Change (%) |
|---|---|---|---|
| Net Sales (in millions) | $4,726.7 | $5,277.6 | -10.4% |
| Cost of Goods Sold (in millions) | $3,946.6 | $4,357.6 | -9.4% |
| Gross Profit (in millions) | $780.1 | $920.0 | -15.2% |
| Adjusted EBITDA (in millions) | $618.3 | $788.6 | -21.6% |
| Net Income (Loss) (in millions) | $15.5 | $(2,006.1) | — |
| Earnings per Diluted Share | $0.06 | $(7.85) | — |
In the first six months of fiscal 2024, WestRock generated total net sales of $9,346.7 million, down from $10,200.7 million in the same period of fiscal 2023, representing an 8.4% decrease.
Segment Performance
WestRock operates through various segments, including Corrugated Packaging, Consumer Packaging, and Global Paper. The following outlines the performance of these segments:
| Segment | Q2 Fiscal 2024 Net Sales (in millions) | Q2 Fiscal 2023 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| Corrugated Packaging | $2,398.3 | $2,627.4 | -8.7% |
| Consumer Packaging | $1,044.0 | $1,102.3 | -5.3% |
| Global Paper | $1,284.4 | $1,586.3 | -19.0% |
Acquisitions and Strategic Initiatives
In recent years, WestRock has focused on strategic acquisitions to enhance its market position. Notably, the acquisition of operations in Mexico has added to its capabilities and product offerings. In fiscal 2024, WestRock's capital expenditure was approximately $548.6 million, with plans to invest between $1.2 to $1.5 billion for the year.
Liquidity and Capital Resources
As of March 31, 2024, WestRock's cash and cash equivalents stood at $494.7 million, reflecting a significant increase from $393.4 million at September 30, 2023. The company reported net cash provided by operating activities of $312.1 million for the first six months of fiscal 2024.
Dividends
WestRock declared a quarterly dividend of $0.3025 per share in April 2024, marking a 10% increase from the previous year.
Future Outlook
Looking ahead, WestRock anticipates sequential improvement in consolidated volumes and continued realization of published price changes. The company plans to balance supply with customer demand and expects to exceed its fiscal 2024 cost savings target of $300 to $400 million.
A Who Owns WestRock Company (WRK)
Major Shareholders
As of 2024, the ownership of WestRock Company (WRK) is distributed among various institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder | Percentage Ownership (%) | Type of Shareholder |
|---|---|---|
| The Vanguard Group, Inc. | 9.2% | Institutional Investor |
| BlackRock, Inc. | 8.5% | Institutional Investor |
| State Street Corporation | 4.1% | Institutional Investor |
| Wellington Management Group LLP | 3.7% | Institutional Investor |
| Invesco Ltd. | 3.2% | Institutional Investor |
| Other Institutional Investors | 24.5% | Various |
| Retail Investors | 43.8% | Individual Shareholders |
Institutional Ownership Breakdown
The institutional ownership of WestRock is significant, indicating strong institutional interest in the company. The following table illustrates the breakdown of institutional ownership as of 2024:
| Institution | Shares Owned (millions) | Market Value (in millions) |
|---|---|---|
| The Vanguard Group, Inc. | 23.7 | $1,188.5 |
| BlackRock, Inc. | 22.0 | $1,103.7 |
| State Street Corporation | 10.8 | $540.0 |
| Wellington Management Group LLP | 9.5 | $475.2 |
| Invesco Ltd. | 8.3 | $415.0 |
| Other Institutional Investors | 59.6 | $2,975.0 |
Recent Changes in Ownership
In the past year, WestRock has experienced changes in its ownership structure. The following table summarizes these changes:
| Change Type | Shareholder | Percentage Change (%) | Date |
|---|---|---|---|
| Increased Ownership | The Vanguard Group, Inc. | +1.2% | March 2024 |
| Increased Ownership | BlackRock, Inc. | +0.9% | February 2024 |
| Decreased Ownership | Wellington Management Group LLP | -0.5% | January 2024 |
| Increased Ownership | Invesco Ltd. | +0.4% | December 2023 |
Market Capitalization
As of March 31, 2024, WestRock's market capitalization is approximately $13.0 billion, reflecting its stock performance and investor sentiment. The company has seen fluctuations in its stock price, impacting its overall market value.
Stock Performance Overview
WestRock's stock has shown varying performance over the past year, with key metrics as follows:
| Metric | Value |
|---|---|
| 52-Week High | $45.75 |
| 52-Week Low | $30.12 |
| Current Stock Price | $40.00 |
| Year-to-Date Performance | +12.5% |
| Dividend Yield | 3.01% |
Conclusion of Ownership Analysis
WestRock Company continues to attract significant institutional investment while maintaining a substantial retail investor base. The ownership dynamics reflect a healthy interest in the company, supported by its recent performance metrics and market capitalization.
WestRock Company (WRK) Mission Statement
Mission Statement Overview
The mission of WestRock Company is to provide sustainable paper and packaging solutions that connect people to products. The company emphasizes innovation, efficiency, and value creation for its customers, employees, and shareholders.
Financial Performance Metrics
As of the second quarter of fiscal 2024, WestRock reported the following key financial metrics:
| Metric | Q2 FY 2024 | Q2 FY 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $4,726.7 million | $5,277.6 million | -10.4% |
| Cost of Goods Sold | $3,946.6 million | $4,357.6 million | -9.4% |
| Gross Profit | $780.1 million | $920.0 million | -15.2% |
| Adjusted EBITDA | $618.3 million | $788.6 million | -21.6% |
| Net Income | $16.4 million | ($2,004.8 million) | N/A |
Segment Performance
WestRock operates through several key segments, each contributing to the overall mission of delivering innovative packaging solutions:
| Segment | Net Sales (Q2 FY 2024) | Adjusted EBITDA (Q2 FY 2024) | Adjusted EBITDA Margin (%) |
|---|---|---|---|
| Corrugated Packaging | $2,398.3 million | $317.9 million | 13.3% |
| Consumer Packaging | $1,113.5 million | $272.0 million | 24.4% |
| Global Paper | $1,016.2 million | $129.5 million | 12.7% |
| Distribution | $272.0 million | N/A | N/A |
Key Strategic Initiatives
WestRock's strategic initiatives focus on:
- Innovation: Developing new packaging solutions to meet evolving customer needs.
- Sustainability: Commitment to reducing environmental impact through sustainable practices.
- Operational Efficiency: Streamlining operations to enhance profitability and customer service.
Market Position and Future Outlook
In fiscal 2024, WestRock anticipates sequential improvement in consolidated volumes and continued realization of price changes. The company expects to exceed its previously announced fiscal 2024 target of $300 to $400 million in cost savings initiatives.
| Future Projections | FY 2024 Q3 Expectations |
|---|---|
| Projected Volume Growth | Improvement anticipated |
| Cost Savings Target | Exceeding $400 million |
| Maintenance Downtime | Estimated 182,000 tons |
Conclusion
WestRock's mission to provide sustainable and innovative packaging solutions is supported by robust financial performance and strategic initiatives aimed at enhancing operational efficiency and customer satisfaction.
How WestRock Company (WRK) Works
Business Overview
WestRock Company (WRK) operates in the paper and packaging industry, focusing on sustainable packaging solutions. The company is structured into several segments, including Corrugated Packaging, Consumer Packaging, Global Paper, and Distribution.
Financial Performance
In the second quarter of fiscal 2024, WestRock reported net sales of $4.7 billion, a decrease of 10.4% compared to the same period in fiscal 2023. This decline was primarily driven by lower selling prices and volumes, as well as previous divestitures of mills and operations. The net income attributable to common stockholders was $15.5 million, contrasting sharply with a net loss of $2.0 billion in the second quarter of fiscal 2023, which had been impacted by a significant goodwill impairment charge of $1.9 billion.
| Financial Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales (in billions) | $4.7 | $5.3 |
| Net Income (Loss) (in millions) | $15.5 | $(2,006.1) |
| Adjusted EBITDA (in millions) | $618.3 | $788.6 |
| Earnings Per Diluted Share | $0.06 | $(7.85) |
Segment Performance
The company’s operations are segmented into the following categories:
- Corrugated Packaging: This segment saw a decrease in net sales of $229.1 million in the second quarter of fiscal 2024 compared to the prior year, primarily due to lower prices and volumes.
- Consumer Packaging: The Consumer Packaging segment experienced a $151.6 million decline in net sales in Q2 2024, driven by lower volumes and previous divestitures.
- Global Paper: This segment reported a decrease of $152.0 million in net sales for Q2 2024, primarily due to lower selling prices and volumes.
- Distribution: The Distribution segment faced a net sales decrease of $35.3 million in Q2 2024, attributed to lower volumes.
Cost Structure
WestRock's cost of goods sold (COGS) for the second quarter of fiscal 2024 was $3.95 billion, representing 83.5% of net sales. The company has been working on cost-saving initiatives which have somewhat mitigated the impact of cost inflation.
| Cost Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Cost of Goods Sold (in billions) | $3.95 | $4.36 |
| COGS as % of Net Sales | 83.5% | 82.6% |
Cash Flow and Investments
For the six months ended March 31, 2024, WestRock reported net cash provided by operating activities of $312.1 million, down from $550.0 million in the same period in the prior year. The company invested $548.6 million in capital expenditures during this timeframe, while returning $155.6 million to shareholders through dividends.
Debt and Liquidity
As of March 31, 2024, WestRock had cash and cash equivalents of $494.7 million. The company’s long-term debt totaled approximately $9.1 billion, with a mix of fixed and variable-rate debt instruments.
| Debt Metrics | Amount (in billions) |
|---|---|
| Total Debt | $9.1 |
| Cash and Cash Equivalents | $0.495 |
Outlook
WestRock expects to see sequential improvements in volumes and continued realization of price changes in the third quarter of fiscal 2024. The company aims to balance supply with customer demand while managing cost inflation and operational efficiencies.
How WestRock Company (WRK) Makes Money
Revenue Streams
WestRock Company generates revenue through several key segments: Corrugated Packaging, Consumer Packaging, Global Paper, and Distribution. As of the second quarter of fiscal 2024, the breakdown of net sales by segment is as follows:
| Segment | Net Sales (Q2 2024, in millions) | Adjusted EBITDA (Q2 2024, in millions) | Adjusted EBITDA Margin |
|---|---|---|---|
| Corrugated Packaging | $2,398.3 | $317.9 | 13.3% |
| Consumer Packaging | $1,113.5 | $200.3 | 18.0% |
| Global Paper | $1,016.2 | $129.5 | 12.7% |
| Distribution | $272.0 | $8.9 | 3.3% |
| Total | $4,726.7 | $656.6 | 13.9% |
Segment Performance Analysis
In the second quarter of fiscal 2024, WestRock reported total net sales of $4.7 billion, representing a decrease of $550.9 million or 10.4% compared to the second quarter of fiscal 2023. This decline was primarily driven by lower selling prices and volumes, as well as the impact of prior year divestitures.
Corrugated Packaging Segment
The Corrugated Packaging segment remains a significant revenue driver for WestRock, with net sales of $2.4 billion in Q2 2024. This reflects a decrease of $229.1 million compared to the prior year, primarily due to lower selling price/mix and volumes. The adjusted EBITDA for this segment was $317.9 million, yielding a margin of 13.3%.
Consumer Packaging Segment
Consumer Packaging generated net sales of $1.1 billion in Q2 2024, down $151.6 million from the previous year. Adjusted EBITDA was $200.3 million, with a robust margin of 18.0%. The decline in sales was attributed to lower volumes and the divestiture of interior partition operations from the previous year.
Global Paper Segment
The Global Paper segment reported net sales of $1.0 billion, down $152.0 million year-over-year. The adjusted EBITDA for this segment was $129.5 million, translating to a margin of 12.7%. The decrease in sales was mainly due to lower selling prices and volumes, compounded by prior year mill divestitures.
Distribution Segment
The Distribution segment had net sales of $272.0 million in Q2 2024, with an adjusted EBITDA of $8.9 million, resulting in a margin of 3.3%. The decrease in sales was primarily due to lower volumes.
Overall Financial Performance
WestRock's consolidated adjusted EBITDA for the second quarter of fiscal 2024 was $656.6 million, a decrease of $170.3 million or 20.6% compared to the same quarter in fiscal 2023. The overall operating profit was $120.4 million, significantly improved from a loss of $1.99 billion in Q2 2023, which included a substantial goodwill impairment charge.
Cost Structure
For the six months ended March 31, 2024, WestRock's cost of goods sold totaled $7.8 billion, representing 83.5% of net sales. The significant components of costs include:
| Category | Amount (in millions) |
|---|---|
| Cost of Goods Sold | $7,807.8 |
| Selling, General, and Administrative Expenses | $1,026.6 |
| Restructuring and Other Costs | $146.7 |
| Impairment of Goodwill | $0 |
Net Income and Earnings Per Share
Net income attributable to common stockholders for Q2 2024 was $15.5 million, or $0.06 per diluted share, compared to a net loss of $2.0 billion in Q2 2023. The adjusted earnings per diluted share were $0.39 for Q2 2024, down from $0.77 in Q2 2023.
Cash Flow and Investments
Net cash provided by operating activities for the six months ended March 31, 2024, was $312.1 million. WestRock invested $548.6 million in capital expenditures during this period and returned $155.6 million to shareholders through dividends.
Future Outlook
For the remainder of fiscal 2024, WestRock anticipates improvements in consolidated volumes and ongoing realization of pricing adjustments. The company aims to balance supply with customer demand while addressing cost inflation and maintenance downtime.
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