Executive Summary

Q2 FY2024 net sales were $4.73B and Adjusted EPS was $0.39, with Consolidated Adjusted EBITDA of $618M and a 13.1% Adjusted EBITDA margin; results exceeded the company’s prior Q2 guidance ranges on EBITDA and EPS, aided by lower-than-expected economic downtime, favorable energy costs, and improving volumes in Global Paper .
Consumer Packaging margin expanded 70 bps YoY to 18.0%, while Corrugated Packaging and Global Paper margins compressed on lower price/mix and winter weather; March N.A. per-day box shipments improved 3.3% YoY, and external containerboard shipments rose 28% YoY, signaling demand recovery into H2 FY2024 .
WestRock achieved ~$370M cost savings YTD (vs. a $300–$400M FY24 target) and expects to significantly exceed this target, supported by footprint optimization and transformation initiatives .
Management did not host an earnings call and will not provide guidance beyond Q2 due to the proposed Smurfit Kappa combination, expected to close in early July 2024—this remains a key stock narrative catalyst and event path .

What Went Well and What Went Wrong

What Went Well

Cost savings momentum: ~$164M in Q2 and ~$370M YTD, with management “expect[ing] to significantly exceed previously announced fiscal 2024 target of $300 to $400 million” .
Consumer Packaging margin execution: Adjusted EBITDA margin increased 70 bps YoY to 18.0% on strong cost control; expanded 230 bps sequentially .
Volume recovery signs: March N.A. per-day box shipments up 3.3% YoY; external containerboard shipments up 28% YoY; paperboard volumes up 15% QoQ .
Quote: “We have already exceeded the midpoint of our targeted cost savings for fiscal 2024…WestRock is well positioned to capture share and drive long-term earnings growth.” – CEO David B. Sewell .

What Went Wrong

Price/mix pressure: Net sales declined 10.4% YoY, driven by published price declines and softer volumes across segments; Consolidated Adjusted EBITDA fell 21.6% YoY .
Margin compression in Corrugated and Global Paper from lower selling price/mix, winter weather and economic downtime; Corrugated EBITDA margin fell to 13.3% (ex-trade 13.7%); Global Paper to 12.7% .
Weaker cash generation in Q2: Net cash provided by operating activities dropped to $37M vs $284M in the prior-year quarter, largely on working capital usage .

Financial Results

Consolidated performance vs prior periods and company guidance

Metric	Q4 FY2023	Q1 FY2024	Q2 FY2024	Q2 FY2024 Guidance (from Q1)
Net Sales ($USD Billions)	$4.99	$4.62	$4.73	—
GAAP Diluted EPS ($)	$0.43	$(0.09)	$0.06	—
Adjusted EPS ($)	$0.81	$0.20	$0.39	$0.17–$0.31
Consolidated Adjusted EBITDA ($USD Millions)	$736	$571	$618	$550–$600
Adjusted EBITDA Margin (%)	14.8%	12.4%	13.1%	—

Notes:

Q2 actual Adjusted EPS and EBITDA exceeded guidance ranges provided on Feb 1 (Q1 release) , helped by lower economic downtime and favorable energy costs .
The company ceased providing guidance beyond Q2 due to the pending transaction with Smurfit Kappa .

Segment breakdown (Q2 FY2024 vs Q2 FY2023)

Segment	Sales ($USD Millions) Q2 FY2023	Sales ($USD Millions) Q2 FY2024	Adjusted EBITDA ($USD Millions) Q2 FY2023	Adjusted EBITDA ($USD Millions) Q2 FY2024	Adjusted EBITDA Margin (%) Q2 FY2023	Adjusted EBITDA Margin (%) Q2 FY2024
Corrugated Packaging	$2,627.4	$2,398.3	$407.5	$317.9	15.5%	13.3% (ex-trade 13.7%)
Consumer Packaging	$1,265.1	$1,113.5	$218.6	$200.3	17.3%	18.0%
Global Paper	$1,168.2	$1,016.2	$187.1	$129.5	16.0%	12.7%
Distribution	$307.3	$272.0	$9.3	$8.9	3.0%	3.3%

KPIs and cash metrics

KPI	Q1 FY2024	Q2 FY2024	Commentary
Cost savings achieved ($USD Millions)	>$200	$164 (Q2); ~$370 YTD	Expect to significantly exceed $300–$400M FY24 target
N.A. per-day box shipments (Mar YoY)	—	+3.3%	Sequential improvement within the quarter
External containerboard shipments YoY	+21.9%	+28%	Export strength; system exited quarter running full
Paperboard volumes QoQ	—	+15%	Anticipate continued improvement
Net cash from operating activities ($USD Millions)	$275	$37	Working capital usage impacted Q2
Capital Expenditures ($USD Millions)	$247	$301	Capex program continues
Dividends ($USD Millions)	$78	$78	Paid to shareholders
Total Debt ($USD Millions)	$8,698	$9,035.7	Adjusted Net Debt $8,393.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Actual	Change
Adjusted EPS ($)	Q2 FY2024	$0.17–$0.31	$0.39 (actual)	Raised vs guidance (beat)
Consolidated Adjusted EBITDA ($USD Millions)	Q2 FY2024	$550–$600	$618 (actual)	Raised vs guidance (beat)
Adjusted Effective Tax Rate (%)	Q2 FY2024	28%–30%	Lower adjusted ETR due to discrete items (no numeric)	Better-than-guided (qualitative)
Depreciation & Amortization ($USD Millions)	Q2 FY2024	~$373	$388.4 (actual)	Higher than guided
Net Interest Expense ($USD Millions)	Q2 FY2024	~$118	$100.8 (actual interest expense, net)	Lower than guided
Diluted Shares Outstanding (Millions)	Q2 FY2024	~259	259.3 (actual)	In line
Guidance for subsequent periods	H2 FY2024	Company to stop providing guidance post-Q2	Not providing guidance	Maintained “no guidance” stance

Earnings Call Themes & Trends

WestRock did not host an earnings call for Q2 due to the proposed Smurfit Kappa transaction (and similarly did not host calls in Q1 and Q4 FY2023) . The narrative below reflects prepared remarks and investor slides.

Topic	Previous Mentions (Q4 FY2023, Q1 FY2024)	Current Period (Q2 FY2024)	Trend
Cost savings/transformation	$350M FY23 savings; >$450M run-rate exiting FY23	$164M in Q2; ~$370M YTD; expect to significantly exceed $300–$400M target	Accelerating savings
Demand recovery (corrugated)	Destocking subsided; 3% sequential shipment increase in Q4	March per-day shipments +3.3% YoY; containerboard system running full	Sequential improvement
Global Paper exports	~50% sequential export growth in Q4	External containerboard shipments +28% YoY	Strong export momentum
Price/mix headwinds	Realization of published price declines (Q4/Q1)	Price declines still weighing on sales; some price increases executed	Persistent but moderating
Energy and input costs	Input cost deflation (OCC, energy) in Q4	Favorable energy costs aided beat; recycled fiber higher	Mixed tailwinds/headwinds
Tariffs/regulatory	Antidumping tariffs on kraft paper supportive (Q1)	Continued execution of price increases; regulatory submissions for transaction	Neutral-to-positive for kraft paper

Management Commentary

“I’m proud of our team’s continued focus and execution, as we delivered strong results and made significant progress on our cost savings initiatives…Together with our scale and innovative, sustainable packaging solutions, WestRock is well positioned to capture share and drive long-term earnings growth.” – David B. Sewell, CEO .
Transaction update: Preparations for the Smurfit Kappa business combination are underway, with expected closing in early July 2024; to avoid delays tied to regulatory submissions, WestRock did not provide guidance beyond Q2 .

Q&A Highlights

WestRock did not host a Q2 FY2024 earnings call due to the pending transaction; therefore, no Q&A was conducted .

Estimates Context

S&P Global consensus for WRK’s Q2 FY2024 EPS/revenue was unavailable via our data connection; therefore, comparisons to Wall Street consensus are not provided. Values retrieved from S&P Global.*
Company guidance from Q1 implied Q2 Adjusted EPS of $0.17–$0.31 and Adjusted EBITDA of $550–$600M; actuals were $0.39 and $618M, respectively, representing beats on both metrics .

Key Takeaways for Investors

Beat vs company guidance: Q2 Adjusted EPS ($0.39) and EBITDA ($618M) exceeded prior ranges on lower EDT and energy costs and better volumes, supporting near-term positive sentiment .
Cost savings are tracking ahead: ~$370M YTD and expected to exceed the $300–$400M FY24 target; this is a durable margin support lever into H2 FY2024 .
Demand signals improving: March per-day box shipments +3.3% YoY; external containerboard shipments +28% YoY; paperboard volumes +15% QoQ—constructive for sequential earnings trajectory .
Mixed margin picture: Consumer Packaging strength (18.0% margin) offset by price/mix and weather headwinds in Corrugated and Global Paper; watch for incremental price realization and input cost trends .
Cash dynamics: Q2 operating cash flow was weak ($37M) on working capital; monitor cash conversion and capex cadence alongside integration headlines .
Corporate event path: No guidance beyond Q2 and no calls ahead of the Smurfit Kappa closing (target early July); transaction milestones are likely primary stock catalysts .
Trading lens: Near term, positive skew from internal beats and cost savings; medium term, thesis rests on demand normalization, price discipline, and synergy/portfolio benefits post-combination .

Sources: WRK Q2 FY2024 8-K and exhibits ; WRK Q1 FY2024 8-K and exhibits ; WRK Q4 FY2023 8-K and exhibits .

WestRock Co (WRK)·Q2 2024 Earnings Summary