WestRock Reports Fiscal 1Q 2022 Results

WestRock Company announced results for its fiscal first quarter ended December 31, 2021.

Net sales were $4.952 billion, an increase of $551 million or 12.5% year-over-year. Paper segment sales increased $262 million, Corrugated Packaging segment sales increased $201 million, Consumer Packaging segment sales increased $76 million and Distribution segment sales increased $21 million.

Net income increased $30 million to $182.3 million, or 19.9%, year-over-year primarily due to higher pricing and lower interest expense that was partially offset by net cost inflation, lower ag-gregate volumes, increased maintenance outages and other items.

Adjusted EBITDA increased $11 million to $680.3 million, or 1.6%, year-over-year as strength in the Paper segment more than offset decreases in the Corrugated Packaging, Distribution and Consumer Packaging segments. Additionally, non-allocated expenses declined by $4 million.

“I am pleased with our strong performance during the first quarter of fiscal 2022, in which our teams delivered record first quarter sales and double-digit EPS growth while navigating the contin-ued and unpredictable macroeconomic landscape. We also delivered solid margin performance in the face of continued supply chain disruption, higher inflation and increased absenteeism associated with COVID-19,” said WestRock CEO David B. Sewell.

“As we look to fiscal 2022, we are continuing to execute our transformation program, which in-cluded reorganizing our operating businesses to better align with our strategy to deliver profitable growth and to increase transparency into our performance. In addition, we continue to hire key tal-ent, including new chief financial officer, Alex Pease, and new chief supply chain officer, Peter Anderson, who both bring deep experience and fresh perspective to these critical roles.”

Net cash provided by operating activities was $253 million in the first quarter of fiscal 2022 com-pared to $719 million in the prior year quarter primarily due to higher working capital usage com-pared to the prior year period. The working capital usage was higher year-over-year primarily due to actions taken in the prior year to preserve cash due to the high uncertainty during the COVID-19 pandemic.

Total debt was $8.2 billion at Dec. 31, 2021, $8 billion excluding $188 million of unamor-tized fair market value step-up of debt acquired in mergers and acquisitions, and $7.8 billion after further excluding cash and cash equivalents of $291 million.