2024 Earnings Outlook
Q: Do you expect EBITDA and free cash flow to be flat or down?
A: Tim Nicholls stated they are choosing not to give an earnings outlook for 2024 due to many moving pieces. They feel good about the year but are not quantifying earnings or cash flow at this time. They are focused on the first quarter outlook and may provide adjustments next quarter. "

Q1 Tailwind Annualization
Q: Can we annualize the $68 million Q1 tailwind for the full year?
A: Philip Ng asked if the $68 million tailwind in Q1 could be annualized. Mark Sutton and then Tom Hamic responded that annualizing it is fair. Tom expressed confidence that the improvement is solid and that they will maintain and expect to improve the margin structure in 2024. " "

Decoupling from Index Pricing
Q: Will decoupling from index pricing affect Q1 guidance?
A: Mark Sutton explained that their pricing mechanisms are between IP and customers, and they will not comment on specifics or future pricing forecasts. He noted that recent index publications are not reflective of their experience, and they are evaluating whether the index still works for them and their customers. "

Customer Contract Strategy
Q: How are you revising customer contracts to focus on value over volume?
A: Mark Sutton and Tom Hamic discussed a holistic strategy focusing on improving value to customers through reliability, quality, and on-time shipping. They aim to provide more value and charge fairly for it, adjusting contracts as needed. " "

Go-to-Market Incentives
Q: Have you changed incentives in your go-to-market strategy?
A: Tom Hamic stated they have changed sales compensation to align with their strategy, focusing on service, profitability, and capital effectiveness. The new compensation plan has made positions more attractive, and executing the strategy requires alignment across the business. "

Box Shipment Trends
Q: How did January box shipments fare, and what about inventories?
A: Despite the impact of a winter storm, they expect first-quarter demand to grow about 2% year-over-year. They have not seen broad restocking yet but believe destocking is over, feeling good about inventory levels in the market. "

Cost Savings Clarification
Q: How does the $400 million cost savings fit into prior initiatives?
A: Tim Nicholls explained that the $400 million includes major items like the go-to-market strategy and fixed cost savings from mill closures. They have other initiatives across the businesses, making it more than $400 million. "

Pricing Negotiations Progress
Q: Where are you in pricing negotiations with customers?
A: Tom Hamic indicated they have renegotiated over a quarter, possibly more than a third, of contracts. There is ongoing work to reach a fair value equation with customers, especially local ones. "

NBSK Mill's Role
Q: Is the NBSK mill core to IP's long-term strategy?
A: Clay Ellis said the NBSK mill is strategic, providing value and serving a strong customer base. It complements their fluff pulp business, despite not being core to fluff, and they appreciate the bundled value it offers. "

CEO Succession Timeline
Q: What is the timeline for finding a new CEO?
A: Mark Sutton stated that the Board is working deliberately on the succession process announced in September. They are making progress but have no specific timeline to report yet. "

Need for More Sales Staff
Q: Do you need more salespeople for the new strategy?
A: Tom Hamic acknowledged they need a significant number of new salespeople and are making progress. The new compensation plan has made positions more attractive, aiding recruitment efforts. "

Portfolio Rightsizing Opportunities
Q: Are there opportunities to rightsize the portfolio if demand doesn't materialize?
A: Clay Ellis suggested they still have some exposure to commodity paper-grade pulp but expect to reach an optimized mix exiting 2024 into 2025. They have options if fluff pulp doesn't grow but believe in the growth of absorbent hygiene products. "

First Quarter Freeze Impact
Q: Will the Q1 freeze affect second-quarter costs?
A: Tim Nicholls believes the impact is limited to Q1, and they do not expect lingering effects into the second quarter. "

Investments to Improve Position
Q: Have you made investments to improve market position?
A: Mark Sutton explained they are investing in physical plant equipment and upgrading old equipment to address regional market needs. They hadn't made all physical investments in the past but feel good about their ability to address the market now. "

Local vs. National Accounts Focus
Q: Will you focus more on local or national accounts?
A: Tom Hamic stated they expect to grow higher-margin local customers while keeping and growing national customers. They aim for balance and will evaluate the profit equation in making decisions, leading to some rebalancing. "