Smurfit Westrock CEO says Q3 characterized by ‘challenging months’

The outlook for the paper and packaging industry has been relatively bleak much of this year, and last week, in an earnings call to discuss third quarter financials, Smurfit Westrock CEO Tony Smurfit revealed the packaging giant’s plans for additional closures and economic downtime in response to market uncertainty.

The Dublin-based paper packaging company, with North American headquarters in Atlanta, released its third quarter 2025 financial results Oct. 29, and while the CEO said Smurfit Westrock was able “to come through the numbers we predicted and planned,” he also said the quarter was characterized by some challenging months.

Quarterly net sales were $8 billion, net income was $245 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.3 billion—all increases compared with the third quarter last year.

RELATED: Smurfit Westrock to close 4 facilities, 650 workers affected

“Since our combination, our North American business has shown great improvement over the course of the last 16 months on both the commercial and operational front, that's reflected by an improved adjusted EBITDA margin of 17.2 percent for the quarter,” Smurfit said on the earnings call.

However, that has not left Smurfit Westrock immune from the closures and footprint optimization seen across the industry this year.

The CEO said the company has taken action to remove uneconomic volume within its portfolio and continues to “right-size” the business by shuttering inefficient or loss-making operations.

During the call, Smurfit announced the closure of a corrugated packaging facility in City of Industry, California—a move that will impact 141 employees—along with the eight previously announced closures across the business.

The company has announced about 500,000 tons of capacity closures, impacting more than 4,500 employees, in both containerboard and consumer board grades and since the merger of Smurfit Kappa and WestRock last year.

“We continue to make excellent progress across our North American system,” Smurfit said. “For example, in corrugated, our loss-making units have declined by almost 50 percent in a one-year period with today, over 70 percent of our corrugated operations solidly profitable, and we expect significantly more progress to occur as we replace and swap out uneconomical volume.”

In North America, the company says its box volumes were 7.5 percent lower on an absolute basis and 8.7 percent lower on a same-day basis, while third-party paper sales were 1 percent lower and consumer packaging shipments were down nearly 6 percent.

Because of the “challenging backdrop” of the last year, Chief Financial Officer Ken Bowles expects Smurfit Westrock to take additional economic downtime in the fourth quarter, the majority of which will be in North America.

“The year to date has been characterized by a challenging demand backdrop, and as a result, we expect to take additional economic downtime in the fourth quarter to optimize our system,” Bowles said. “If you recall, we set out our guidance for the year in April, and given the impact from the above, we are now marginally adjusting that guidance range to where we now expect to deliver full year adjusted EBITDA of between $4.9 billion to $5.1 billion.”

Smurfit also discussed the paper pricing landscape and said the situation is uneconomic for at least 75 percent of the business.

“I think that we're lucky that we're very integrated,” he said. “We've got our own customer. Our paper mills have our own customer, which is ourselves, and we're able to run basically full, but for most of the others, demand is relatively weak. Unless you're in the top quartile, you're not making any cash at this moment in time, and I would say you've seen that from the results of a number of players in the marketplace.

“Inevitably, that will change. The question is, is it first quarter? Is it second quarter? Is it third quarter? And how much hurt will be in the market before then?”