Sylvamo outlines $115M–$130M Q4 adjusted EBITDA target as Riverdale supply ends and leadership transitions

Earnings Call Insights: Sylvamo Corporation (SLVM) Q3 2025

MANAGEMENT VIEW

* Jean-Michel Ribiéras, Chairman & CEO, highlighted, “Our uncoated freesheet sales volume increased quarter-over-quarter by 7%. Our teams also executed well, resulting in improved operational performance. We returned $60 million in cash to shareowners by distributing $18 million in third quarter dividend and repurchasing $42 million in shares. Our Board also approved a new $150 million share repurchase authorization in the quarter.”
* Ribiéras reported, “We earned adjusted EBITDA of $151 million with a margin of 18%. Free cash flow was $33 million and we generated adjusted operating earnings of $1.44 per share.”
* Donald Devlin, Chief Financial Officer, stated, “The $151 million of adjusted EBITDA was in line with our outlook of $145 million to $165 million. Price and mix was unfavorable by $14 million, primarily driven by paper and pulp prices in Europe. Volume increased by $14 million, mainly driven by stronger seasonality in Latin America and North America. Operations and other costs were favorable by $5 million, driven by improved operational performance. Planned maintenance outage costs improved by $66 million as we had no planned outages at our mills.”
* Devlin also announced, “Our forest lands represent a significant part of our intrinsic value... We recently had an appraisal completed on our forest lands, which are now valued at almost BRL 5 billion.”
* John Sims, Senior VP & COO, explained, “We are continuously working to improve our business. We are driving operational excellence and strategic initiatives across all our regions. These efforts should improve margins, reduce costs and strengthen our competitive position.” Sims added, “We are investing in our flagship mill in Eastover, South Carolina to improve our competitive advantages by lowering costs, enhancing efficiency and increasing capacity by 60,000 tons.”
* Sims disclosed, “In the third quarter, we repurchased $42 million worth of shares at an average price of $44.74, exhausting the remaining amount of our share repurchase authorization. In September, the Board also approved a new $150 million share repurchase authorization.”
* Sims addressed Board changes: “At the direction of Atlas Holdings, Karl Meyers and Mark Wilde resigned from the Board effective November 5. With these resignations, the restrictions on Atlas and the cooperation agreement will terminate.”
* A leadership transition was confirmed: Sims is to become CEO on January 1 as Ribiéras retires.

OUTLOOK

* Devlin projected, “We expect to deliver fourth quarter adjusted EBITDA of $115 million to $130 million. We project price and mix to be unfavorable by $20 million to $25 million, primarily due to paper prices in Europe and mix across the regions. We expect volume to be favorable by $15 million to $20 million, largely due to Latin America and North America. Other operations and other costs are projected to be unfavorable by $5 million to $10 million, primarily due to seasonally higher costs, and we expect input and transportation costs to be stable. Planned maintenance outages will be unfavorable by $18 million as we have 1 outage in North America planned in the quarter.”
* The company shared, “Riverdale should supply us with approximately 260,000 tons in 2025 and we expect to receive around 100,000 tons in 2026.”

FINANCIAL RESULTS

* Sylvamo reported adjusted EBITDA of $151 million with a margin of 18%. Adjusted operating earnings reached $1.44 per share, and free cash flow was $33 million.
* The company distributed $18 million in dividends and repurchased $42 million in shares in Q3. Year-to-date share repurchases total $82 million.
* No planned maintenance outages during the quarter led to a $66 million improvement in outage costs.
* The Board approved a new $150 million share repurchase authorization.

Q&A

* Daniel Harriman, Sidoti & Company: “Regarding North America, you highlighted stable demand even with imports running higher earlier than the year... I'm wondering if you think we can expect that normalization to translate into potentially a more stable or improved pricing environment as we move into 2026.” John Sims responded, “Yes, we're expecting and we are already seeing and we heard from our customers that the inventory is being working down -- worked down from the import surge... Imports have actually started to decrease... and then also, you have the closure of the Chillicothe mill... so that the operating rate should improve and strengthen going into next year.”
* Matthew McKellar, RBC Capital Markets: “How far along are we in that process of inventories being consumed? Are they approaching normal levels today? Is that something you'd expect by year-end? Or will that process continue into '26?” John Sims replied, “No, I would say that we're approaching normal levels right now. That's how we're seeing it currently.”
* McKellar: “A couple of quick ones on Riverdale, and how you're preparing for the end of that supply agreement... at the time that the cancellation of that supply agreement was announced, I think you said the impact to 2026 EBITDA would be about $30 million at current margins. Is that still a good estimate...?” Donald Devlin answered, “I think in the previous call, we estimated the impact to Riverdale to be about $30 million. And that's the same. That hasn't changed for 2026.”

SENTIMENT ANALYSIS

* Analysts focused on inventory normalization, pricing environment, supply chain adjustments, and the end of the Riverdale agreement, with a neutral to slightly positive tone as they sought clarity on stabilization and transition plans.
* Management maintained a confident and steady tone in both prepared remarks and Q&A. Ribiéras commented, “As I've said many times before, I'm confident in the future for Sylvamo and motivated by the opportunities that lie ahead.” Sims and Devlin responded constructively and provided direct answers, maintaining confidence regarding operational actions and transition.
* Compared to the previous quarter, management’s tone was consistent, emphasizing operational improvement but with added attention to transition and supply agreements. Analysts’ questioning shifted more toward inventory normalization and transition planning, indicating marginally improved sentiment.

QUARTER-OVER-QUARTER COMPARISON

* The company’s Q3 adjusted EBITDA rose to $151 million from $82 million in Q2, with margin improving from 10% to 18%.
* Q2 was marked by significant planned maintenance outages and negative free cash flow, while Q3 saw improved operational performance, no outages, and positive free cash flow.
* Share repurchases increased to $42 million in Q3 from $20 million in Q2. The Board authorized a new $150 million share repurchase program in Q3.
* Guidance for Q4 shifted from the prior quarter’s Q3 outlook, now expecting lower adjusted EBITDA due to price/mix headwinds and a planned maintenance outage.
* Strategic focus in both quarters remained on uncoated freesheet paper, but Q3 included new details on the end of the Riverdale supply and Board/leadership changes.
* Analysts’ focus moved from operational disruptions and trade flows in Q2 to normalization of inventories and supply transition in Q3.

RISKS AND CONCERNS

* The company cited “very challenging” market conditions in Europe, with ongoing pressure on pulp and uncoated freesheet prices.
* In Latin America, demand outside Brazil is down, particularly in Argentina and Mexico, resulting in continued pricing pressure.
* North America faces uncertainty from U.S. tariffs and the closure of the Chillicothe mill.
* The upcoming end of the Riverdale supply agreement requires inventory build-up and reliance on European mills until Eastover’s expanded capacity ramps up in late 2026.
* Board resignations and the end of the Atlas Holdings cooperation agreement were noted, but management declined further comment.

FINAL TAKEAWAY

Sylvamo navigated Q3 2025 with improved operational performance, a strong focus on capital returns, and preparations for significant supply and leadership transitions. The company is targeting Q4 adjusted EBITDA of $115 million to $130 million amid ongoing market pressures in Europe and Latin America, while managing the phase-out of its Riverdale supply agreement and building toward expanded capacity at Eastover. With a new $150 million share repurchase authorization and a clear strategy for bridging supply and maintaining competitive advantage, management remains confident about Sylvamo’s ability to deliver value and adapt to evolving market dynamics.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/slvm/earnings/transcripts]

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