International Paper Co. Jefferies Global Industrials Conference 2026

Yeah. Well, thank you. Thank you, Phil, for having us. And thank you all for all being here, and I think this is the third time we've been back since I'm CEO of IP.

That's right. Which goes fast.

Special. Thank you. I think this is a great conference.

I would start off with a few things. One, just kind of talking about, just a little bit about the macro, which we all are bathed in every single day, but more importantly, the goal of where we are headed, and very much so, kind of what we are doing to control our own destiny in this kind of crazy world. Obviously the world that we are living in, this sitting, I think of as a few things. One is relative to the forces of trade tariffs and conflict on both the demand side and inflation side. We all know those challenges that are out there, and they are undeniable. At the same time, what it does is it sets a context for how you can compete.

That to me is really the most important thing, is whatever given period of time when the macro gets distorted for whatever reason. Throughout my career, the way I have dealt with that is you grab onto those things that you can absolutely control, and how do you drive value, and how do you drive competitive advantage, and how do you drive a better position over time relative to that? We do not know what is going to happen relative to the business. Obviously, in our world, as we kind of see that lower-end consumer struggling, that is an issue relative to overall packaging demand. Then on the inflationary side, energy obviously is the biggest piece. We are most exposed in Europe when it comes to that. We produce 70% of our own energy in the U.S., although we do have exposure to diesel.

Obviously with diesel where it is, the number is about $95 million per dollar a gallon of diesel, if you kind of think about that in terms of the impact. So the inflationary pressures are there. Obviously, pricing has moved to deal with the vast majority of that. But what we have seen in the last 18 months or so is really a balancing of inflation being covered by price. So the incremental margin that you would like to see from that has really been pushed into 2027, as our efforts to drive down our cost structure, which have been incredibly aggressive, have offset an awful lot of that. We all have obviously seen over the last couple of years, pretty substantial incremental margin improvement on a dollar basis and on a rate basis.

We expect to see that as we move into the third and the fourth quarter, and very much so into next year. Really grabbing onto those controllables. The first around that is really just the absolute cost structure. I think many of you who know International Paper well, the last two years, we have taken out an enormous number of latent assets, of unproductive assets. We have taken those closures out. We have been reinvested very aggressively back into our mill and our converting systems to drive productivity, and we are certainly seeing the gains in that. We will continue to do that. Our belief is that winning just really comes down to three interconnected parts. The first one is having that best cost position. So driving that best cost position, which does not mean a low price position. It absolutely does not mean that.

What it means is our ability to invest at any time in the cycle. Any time to drive investment back into the business, to continue to lower that cost position, and frankly, to reinvest back into the front end of the business, what we call the customer experience. How they experience us in terms of reliability, quality, service, innovation. As you see what customers care about, those things are not only table stakes, they really drive the willingness to pay and switching costs. A huge investment has gone back into the business around that, and we've seen very substantial moves in terms of where we stand in customer satisfaction rankings. We've moved very nicely as we've done that in North America.

On the relative market share side, it's important for us to build density in the markets that we deeply care about, and those are local markets by MSA per se, and in terms of the overall network strategy on converting and in our mill systems in North America. Very happy with the progress there that we're driving in the face of that tough macro. In Europe, this is really all about two things right now. The first one is the restructuring that's happening in Europe. You've seen the information. We're going to close upwards of 40 facilities in total, and about 4,000 people will exit the organization here since the start of that. Which is a very aggressive restructuring in Europe, and I think absolutely necessary.

While anyone who's been through that knows that those things don't go without their bumps, it's gone very well. We're getting the costs out of the system that we need to. That will be very important for the long-term value creation of that company that we're going to spin out here over the next handful of months. We're excited about that spin. That is on track. Really, in terms of the normal milestones and pathways to that process, they're moving along very well. We will certainly be within that 12 to 15-month timeframe that we talked about in the past. No real major updates around that, except the process is moving forward, and you'll see that with Tim and Anton are here, the future CEO and CFO. They're here presenting at the conference to socialize that even more. They're here doing that. Hopefully, that gives some confidence that this process is moving forward as we had hoped.

The last thing I'd leave you with before I turn it to Phil is what we'll become. The goal is to become, for International Paper, to be the largest scaled, most present player in the North American market for packaging, for paper-based packaging. That's a great place to be. We like that business. The noise that has been around the business in terms of restructuring, in terms of asset sales, that will come to a close where we'll start really driving the business on a normalized basis around those three pillars of strategy, driving that cost position via productivity, reinvesting back into the front end of the business around organic growth, and really around building relative market share in those markets that we care about. We're excited to get there.

It's been a long journey and a fast journey, and we're very proud of what we've done. With that, Phil, I'll turn it to you.