WestRock Reports Fiscal 2021 Fourth Quarter Results: Record Net Sales of $5.1 Billion Up 14%
WestRock Company, a leading provider of differentiated, sustainable paper and packaging solutions, announced results for its fiscal fourth quarter and year ended September 30, 2021.
Notable items in the fourth quarter include:
-Record net sales of $5.1 billion increased 14% compared to $4.5 billion in the prior year quarter
-Net income of $324 million compared to a net loss of $1,156 million in the prior year quarter, which included a $1,314 million goodwill impairment net of tax
-Adjusted Segment EBITDA of $878 million increased 22% compared to $721 million in the prior year quarter
-Earned $1.20 per diluted share and $1.23 of Adjusted Earnings Per Diluted Share compared to a loss of $4.45 and adjusted earnings of $0.73, respectively, in the prior year quarter
Full Year 2021 Highlights
-Record net sales of $18.7 billion increased 7% compared to $17.6 billion in the prior year
-Net income of $838 million compared to a net loss of $691 million in the prior year
-Adjusted Segment EBITDA of $3.0 billion increased 7% compared to $2.8 billion in the prior year
-Earned $3.13 per diluted share and $3.39 of Adjusted Earnings Per Diluted Share compared to a loss of $2.67 and adjusted earnings of $2.75, respectively, in the prior year
-Generated net cash provided by operating activities of $2.28 billion and record Adjusted Free Cash Flow of $1.49 billion; ended the year with a net leverage ratio of 2.38x
“The WestRock team delivered strong results in fiscal 2021, with record net sales and strong cash flows for the full fiscal year,” said David B. Sewell, chief executive officer. “We executed on our capital allocation priorities, and I’m pleased to announce that we reached our target net leverage ratio in the quarter. In addition, we recently announced another increase to our dividend, which will result in a 25% increase since February. Looking forward, we believe we remain well positioned to successfully partner with our customers to meet their growing needs for sustainable, fiber-based packaging solutions.”
Consolidated Financial Results
WestRock’s performance for the three months ended September 30, 2021 and 2020 (in millions):
| Three Months Ended | ||||||||||||
| Sep. 30, 2021 | Sep. 30, 2020 | Change | ||||||||||
| Net sales |
$ |
5,090.5 |
|
$ |
4,471.5 |
|
$ |
619.0 |
|
|||
| Segment income |
$ |
526.4 |
|
$ |
373.3 |
|
$ |
153.1 |
|
|||
| Non-allocated expenses |
|
(3.8 |
) |
|
(16.6 |
) |
|
12.8 |
|
|||
| Depreciation |
|
269.4 |
|
|
258.9 |
|
|
10.5 |
|
|||
| Amortization |
|
95.7 |
|
|
106.7 |
|
|
(11.0 |
) |
|||
| Segment EBITDA |
|
887.7 |
|
|
722.3 |
|
|
165.4 |
|
|||
| Adjustments (1) |
|
(9.8 |
) |
|
(1.6 |
) |
|
(8.2 |
) |
|||
| Adjusted Segment EBITDA |
$ |
877.9 |
|
$ |
720.7 |
|
$ |
157.2 |
|
|||
| (1) See the Adjusted Net Income tables on page 11 for adjustments | ||||||||||||
Operating Highlights for the Three Months Ended September 30, 2021 compared to September 30, 2020
Net sales increased $619 million compared to the prior year quarter. Corrugated Packaging segment net sales increased $500 million and Consumer Packaging segment net sales increased $156 million. Segment income increased $153 million compared to the prior year quarter, with Corrugated Packaging segment income increasing $93 million and Consumer Packaging segment income increasing $60 million.
Additional information about the changes in segment net sales and income is included below.
Restructuring and Other Items
Restructuring and other items during the fourth quarter of fiscal 2021 was $12 million, primarily related to plant closure activities, including items such as impairment costs and certain lease terminations.
Net Cash Provided By Operating Activities and Other Financing and Investing Activities
Net cash provided by operating activities was $678 million in the fourth quarter of fiscal 2021 compared to $732 million in the prior year quarter. Total debt was $8.2 billion at September 30, 2021, or $8.0 billion excluding $192 million of unamortized fair market value step-up of debt acquired in mergers and acquisitions, and $7.7 billion after further excluding cash and cash equivalents of $291 million. During the fourth quarter of fiscal 2021, total debt declined by $479 million and Adjusted Net Debt declined by $215 million. The Company had approximately $3.7 billion of available liquidity under long-term committed credit facilities and cash and cash equivalents at September 30, 2021. During the fourth quarter of fiscal 2021, WestRock invested $310 million in capital expenditures, returned $122 million to stockholders through stock repurchases and paid $64 million in dividends to stockholders.
Segment Results
WestRock’s segment performance for the three months ended September 30, 2021 and 2020 (in millions):
Corrugated Packaging Segment
| Three Months Ended | ||||||||||||
| Sep. 30, 2021 | Sep. 30, 2020 | Change | ||||||||||
| Segment net sales |
$ |
3,398.7 |
|
$ |
2,898.4 |
|
$ |
500.3 |
|
|||
| Segment income |
$ |
374.8 |
|
$ |
281.9 |
|
$ |
92.9 |
|
|||
| Depreciation |
|
185.8 |
|
|
177.2 |
|
|
8.6 |
|
|||
| Amortization |
|
45.8 |
|
|
57.2 |
|
|
(11.4 |
) |
|||
| Segment EBITDA |
|
606.4 |
|
|
516.3 |
|
|
90.1 |
|
|||
| Adjustments (1) |
|
(0.1 |
) |
|
(2.9 |
) |
|
2.8 |
|
|||
| Adjusted Segment EBITDA |
$ |
606.3 |
|
$ |
513.4 |
|
$ |
92.9 |
|
|||
| (1) See the Adjusted Net Income tables on page 11 for adjustments | ||||||||||||
Operating Highlights for the Three Months Ended September 30, 2021 compared to September 30, 2020
Segment net sales increased $500 million, primarily due to higher selling price/mix, higher volumes and favorable impact of foreign currency. The Corrugated Packaging segment delivered a Segment EBITDA margin of 17.8% and a North American Adjusted Segment EBITDA margin of 19.0%.
Segment income increased $93 million, primarily due to the margin impact of higher selling price/mix and higher volumes that were partially offset by net cost inflation and other items.
Consumer Packaging Segment
| Three Months Ended | ||||||||||
| Sep. 30, 2021 | Sep. 30, 2020 | Change | ||||||||
| Segment net sales |
$ |
1,783.0 |
$ |
1,627.2 |
$ |
155.8 |
|
|||
| Segment income |
$ |
151.6 |
$ |
91.4 |
$ |
60.2 |
|
|||
| Depreciation |
|
81.9 |
|
80.3 |
|
1.6 |
|
|||
| Amortization |
|
49.9 |
|
49.5 |
|
0.4 |
|
|||
| Segment EBITDA |
|
283.4 |
|
221.2 |
|
62.2 |
|
|||
| Adjustments (1) |
|
0.5 |
|
1.3 |
|
(0.8 |
) |
|||
| Adjusted Segment EBITDA |
$ |
283.9 |
$ |
222.5 |
$ |
61.4 |
|
|||
| (1) See Adjusted Net Income tables on page 11 for adjustments | ||||||||||
Operating Highlights for the Three Months Ended September 30, 2021 compared to September 30, 2020
Segment net sales increased $156 million, primarily due to higher selling price/mix, higher volumes and favorable impact of foreign currency. The Consumer Packaging segment delivered Segment EBITDA and Adjusted Segment EBITDA margins of 15.9%.
Segment income increased $60 million, primarily due to the margin impact from higher selling price/mix, productivity improvements, lower economic downtime compared to the prior year period and higher volumes that were partially offset by net cost inflation and other items.
For the complete press release, click here.
About WestRock
WestRock (NYSE:WRK) partners with our customers to provide differentiated, sustainable paper and packaging solutions that help them win in the marketplace. WestRock’s team members support customers around the world from locations spanning North America, South America, Europe, Asia and Australia. Learn more at www.westrock.com.
Contact:
James Armstrong – Vice President Investor Relations – james.armstrong@westrock.com – (470) 328-6327
Source: WestRock Company
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