March 26, 2025 • 6 mins
International Paper Chairman & CEO Andrew Silvernail discusses the company's improvement plan taking shape and equity outlook. International Paper has outlined early steps to improve performance, including boosting Ebitda to $4 billion in the medium term from $2 billion over the past 12 months. Costs savings are expected to account for $1.2 billion of the boost, with the remaining $800 million from its new commercial strategy. This is on top of integrating the DS Smith acquisition, which is projected to close in January. Execution is a risk since the shift represents a complete change in mindset from running mills full out. Silvernail spoke with Bloomberg's Alix Steel and Paul Sweeney
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Andrew Still now joins us here. He's the CEO of
International Paper. IP is the ticker. Put it into your
Bloomberg terminally joints us here in our Bloomberg Interactive Studios.
The fact that you're in our studio makes me believe
that you had an investor day we did yesterday.
Speaker 1 (00:22):
Yeah, we had an investor d yesterday.
Speaker 2 (00:23):
What was the theme of the investor day today that
you had yesterday?
Speaker 3 (00:27):
Transformation? Okay, it's really about the transformation. I heard in
the opening talking about International Paper. Of course it's in
our name, and so people think Global Paper. And the
reality is is we're a packaging company now, so almost
one hundred percent sustainable packaging. With the acquisition of Dia
Smith North America and Europe, we're number one in both places,
and we're all focused on the customer and their packaging needs.
(00:48):
You mentioned Chewy before, great customer for us, and a
wonderful opportunity to build their branding to help them be successful.
That's what we're all about, is transforming into a packaging company.
Speaker 4 (00:58):
So something that definitely came up is value over volume.
You want to get the most out of what you're
doing rather than just the numbers. UPS is doing something
very similar and in the short term there's a lot
of angst and pain kind of around that before you
get to that volume after that value growth. Talk me
through the cycle.
Speaker 3 (01:13):
Yeah, So if you think about we were our own
worst enemy. So for years and years and years, we
would chase volume at the most inopportune time. And so
what we've effectively had to do is go back to
the marketplace and say we need to be paid for
the value.
Speaker 1 (01:26):
That we're bringing. And that's what we do. We come
into the marketplace.
Speaker 3 (01:29):
We're trying to help you get your goods to the
place you want them to be, whether it's fast moving
consumer goods or it's industrial goods.
Speaker 1 (01:35):
That's what we're trying to help.
Speaker 3 (01:36):
But we've got to make sure that we're taking care
of all of our constituents, and frankly, we weren't, and
so we've got to get that value proposition right. I
think we've made that switch over the last couple of years.
We're seeing that start to play out appropriately and we're
getting paid for the value that we bring.
Speaker 2 (01:50):
You're building a state of the art box plant in Waterloo, Iowa,
so talk about onshoreing. That's big time. Ten and sixty
million dollars. Talk to us about that investment. What are
you trying to do there?
Speaker 3 (02:01):
So, what a lot of people don't understand about the
packaging business, certainly the paper based packaging business is all
of the business has done within two hundred miles two
hundred mile radius of a plant. And because you can't
air as expensive as ship and so you've got to
be close.
Speaker 1 (02:15):
So we want to be close to our best customers.
That's protein Alley. So that area there's protein protein Alley.
Protein Alley.
Speaker 3 (02:22):
Really think of the beef and the chicken before and
so if you think about kind of kind of where
protein happens in the United States from if you think
of the South all the way through the Midwest through there.
We want to be close to our customers. We have
a great customer relationships. We need a modern facility. We're
going to have, I think it's going to be the
largest facility in the US that does paper based packaging.
(02:44):
And we want to make sure because we're shipping in
from other parts of the country now, service those customers
very ineffective, very inefficient.
Speaker 1 (02:51):
We want to be local. We want to be close.
Speaker 3 (02:53):
We want to drive customer service and innovation as close
to the customers we can.
Speaker 4 (02:57):
International is in your name, So what how are you
affected by potential tariffs? And everyone sort of every country
shift to nationalism and way that is energy nationalism, goods nationalism,
supply to nationalism. Where do you play and that has
affect you?
Speaker 1 (03:12):
Yeah, so we are.
Speaker 3 (03:13):
We're definitely international company, principally North America and Europe.
Speaker 1 (03:16):
We're about two thirds North America and a third Europe.
Speaker 3 (03:19):
We don't ship actually a lot across borders, believe it
or not, so that doesn't happen. So we're not being
impacted directly by tariffs with crossboarder trade, but we're impacted
by the economy, and so as tariffs impact the economy,
that will have an impact of us.
Speaker 1 (03:31):
So we're watching what's going on and we see it
in our numbers. We've seen the volatility in.
Speaker 3 (03:36):
The last month or so, so we're keeping a close
eye on that.
Speaker 1 (03:39):
But that's really how it impacts us.
Speaker 2 (03:41):
What are your customers saying about their outlook for the economy.
I would think that you would have a finger on
the pulse of that.
Speaker 1 (03:48):
Yeah, I think we do have a pretty good pulse.
I think there's uncertainty, if we're fair about that.
Speaker 3 (03:52):
The last month or two or so, there's been some
real uncertainty, and I think, well, nothing's really happened yet.
It's caused people to trench a little bit and ask, hey,
do I want to make that investment right now?
Speaker 1 (04:03):
Can I hold off on spending money right now? And
let's see.
Speaker 3 (04:06):
Look, my belief is these things wash out over time,
and we make investments for decades. We don't make investments
for quarters or even years. And so we're thinking about
investments for the long.
Speaker 4 (04:16):
Term in terms of say, hiring labor, how you're managing
the business. Is it a retrenchman time, is it expansion?
How would you define it for you guys?
Speaker 3 (04:26):
Actually, interestingly, it's a little bit of both, right, And
what I mean by that you have yeah, you can actually,
so when you think about that, you have certain parts
of your business that aren't as strong or aren't as healthy,
and you have other parts that are very healthy. So,
as an example, protein aaley very healthy for us. Let's
make investments in waterly on it. Let's move the the
let's move people, and let's live investment there things that
(04:47):
are weaker, things that are struggling or markets you're not
as strong in you have to retrench.
Speaker 1 (04:51):
So you have to do blakas are.
Speaker 3 (04:52):
Those well you've got you've got softness in parts of
the economy kind of broad base. You've got to be
concerned about things that are going to shrink over time
and things things like e commerce that are strong. Things
like protein and fresh vegetables, those are strong. You want
to move towards those things. And so you know, we
want to move our investment towards the parts of the
economy that we think are going to expand over time,
location and industry and really you know, grow on those strengths.
Speaker 2 (05:18):
So to the extent, if I think about your company,
I think about a GDP top line growth story, is
there anything different than that?
Speaker 1 (05:25):
I mean, that's it?
Speaker 2 (05:25):
And is it just so? Is your business really about
managing the cost of managing margin?
Speaker 1 (05:30):
No, it's not.
Speaker 3 (05:31):
Okay, Yes, you always have to manage your cost, right,
but the key thing is you want to align yourself
with where growth is. Okay, I think that's the biggest thing.
Bottom line though, is we're going to generally follow the economy.
So yesterday, in our in our investor day, we talked
about a volume growth that's kind of one to two
percent that follows, you know, underlying volume growth and pricing
power over time. It's also about one to two percent,
(05:51):
so we think we're three to four percent grower over
time the core market. And then that question is can
you align with better growing industries and can you win markets? Here?
Speaker 2 (05:59):
Andrew, thank you some for joiners. Really appreciate you taking
a few minutes of your time here today. Andrew Siblinaier,
he's the CEO of International Paper No surprise, the ticker
symbols ip loggity to Bloomberg Terminal. He joins us here
in our Bloomberg Interactive Broker studio. They had the investor
Day yesterday. The stocks up forty five percent over the
trailing twelve months, so it's had some pretty solid performance
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Andrew Still now joins us here. He's the CEO of
International Paper. IP is the ticker. Put it into your
Bloomberg terminally joints us here in our Bloomberg Interactive Studios.
The fact that you're in our studio makes me believe
that you had an investor day we did yesterday.
Speaker 1 (00:22):
Yeah, we had an investor d yesterday.
Speaker 2 (00:23):
What was the theme of the investor day today that
you had yesterday?
Speaker 3 (00:27):
Transformation? Okay, it's really about the transformation. I heard in
the opening talking about International Paper. Of course it's in
our name, and so people think Global Paper. And the
reality is is we're a packaging company now, so almost
one hundred percent sustainable packaging. With the acquisition of Dia
Smith North America and Europe, we're number one in both places,
and we're all focused on the customer and their packaging needs.
(00:48):
You mentioned Chewy before, great customer for us, and a
wonderful opportunity to build their branding to help them be successful.
That's what we're all about, is transforming into a packaging company.
Speaker 4 (00:58):
So something that definitely came up is value over volume.
You want to get the most out of what you're
doing rather than just the numbers. UPS is doing something
very similar and in the short term there's a lot
of angst and pain kind of around that before you
get to that volume after that value growth. Talk me
through the cycle.
Speaker 3 (01:13):
Yeah, So if you think about we were our own
worst enemy. So for years and years and years, we
would chase volume at the most inopportune time. And so
what we've effectively had to do is go back to
the marketplace and say we need to be paid for
the value.
Speaker 1 (01:26):
That we're bringing. And that's what we do. We come
into the marketplace.
Speaker 3 (01:29):
We're trying to help you get your goods to the
place you want them to be, whether it's fast moving
consumer goods or it's industrial goods.
Speaker 1 (01:35):
That's what we're trying to help.
Speaker 3 (01:36):
But we've got to make sure that we're taking care
of all of our constituents, and frankly, we weren't, and
so we've got to get that value proposition right. I
think we've made that switch over the last couple of years.
We're seeing that start to play out appropriately and we're
getting paid for the value that we bring.
Speaker 2 (01:50):
You're building a state of the art box plant in Waterloo, Iowa,
so talk about onshoreing. That's big time. Ten and sixty
million dollars. Talk to us about that investment. What are
you trying to do there?
Speaker 3 (02:01):
So, what a lot of people don't understand about the
packaging business, certainly the paper based packaging business is all
of the business has done within two hundred miles two
hundred mile radius of a plant. And because you can't
air as expensive as ship and so you've got to
be close.
Speaker 1 (02:15):
So we want to be close to our best customers.
That's protein Alley. So that area there's protein protein Alley.
Protein Alley.
Speaker 3 (02:22):
Really think of the beef and the chicken before and
so if you think about kind of kind of where
protein happens in the United States from if you think
of the South all the way through the Midwest through there.
We want to be close to our customers. We have
a great customer relationships. We need a modern facility. We're
going to have, I think it's going to be the
largest facility in the US that does paper based packaging.
(02:44):
And we want to make sure because we're shipping in
from other parts of the country now, service those customers
very ineffective, very inefficient.
Speaker 1 (02:51):
We want to be local. We want to be close.
Speaker 3 (02:53):
We want to drive customer service and innovation as close
to the customers we can.
Speaker 4 (02:57):
International is in your name, So what how are you
affected by potential tariffs? And everyone sort of every country
shift to nationalism and way that is energy nationalism, goods nationalism,
supply to nationalism. Where do you play and that has
affect you?
Speaker 1 (03:12):
Yeah, so we are.
Speaker 3 (03:13):
We're definitely international company, principally North America and Europe.
Speaker 1 (03:16):
We're about two thirds North America and a third Europe.
Speaker 3 (03:19):
We don't ship actually a lot across borders, believe it
or not, so that doesn't happen. So we're not being
impacted directly by tariffs with crossboarder trade, but we're impacted
by the economy, and so as tariffs impact the economy,
that will have an impact of us.
Speaker 1 (03:31):
So we're watching what's going on and we see it
in our numbers. We've seen the volatility in.
Speaker 3 (03:36):
The last month or so, so we're keeping a close
eye on that.
Speaker 1 (03:39):
But that's really how it impacts us.
Speaker 2 (03:41):
What are your customers saying about their outlook for the economy.
I would think that you would have a finger on
the pulse of that.
Speaker 1 (03:48):
Yeah, I think we do have a pretty good pulse.
I think there's uncertainty, if we're fair about that.
Speaker 3 (03:52):
The last month or two or so, there's been some
real uncertainty, and I think, well, nothing's really happened yet.
It's caused people to trench a little bit and ask, hey,
do I want to make that investment right now?
Speaker 1 (04:03):
Can I hold off on spending money right now? And
let's see.
Speaker 3 (04:06):
Look, my belief is these things wash out over time,
and we make investments for decades. We don't make investments
for quarters or even years. And so we're thinking about
investments for the long.
Speaker 4 (04:16):
Term in terms of say, hiring labor, how you're managing
the business. Is it a retrenchman time, is it expansion?
How would you define it for you guys?
Speaker 3 (04:26):
Actually, interestingly, it's a little bit of both, right, And
what I mean by that you have yeah, you can actually,
so when you think about that, you have certain parts
of your business that aren't as strong or aren't as healthy,
and you have other parts that are very healthy. So,
as an example, protein aaley very healthy for us. Let's
make investments in waterly on it. Let's move the the
let's move people, and let's live investment there things that
(04:47):
are weaker, things that are struggling or markets you're not
as strong in you have to retrench.
Speaker 1 (04:51):
So you have to do blakas are.
Speaker 3 (04:52):
Those well you've got you've got softness in parts of
the economy kind of broad base. You've got to be
concerned about things that are going to shrink over time
and things things like e commerce that are strong. Things
like protein and fresh vegetables, those are strong. You want
to move towards those things. And so you know, we
want to move our investment towards the parts of the
economy that we think are going to expand over time,
location and industry and really you know, grow on those strengths.
Speaker 2 (05:18):
So to the extent, if I think about your company,
I think about a GDP top line growth story, is
there anything different than that?
Speaker 1 (05:25):
I mean, that's it?
Speaker 2 (05:25):
And is it just so? Is your business really about
managing the cost of managing margin?
Speaker 1 (05:30):
No, it's not.
Speaker 3 (05:31):
Okay, Yes, you always have to manage your cost, right,
but the key thing is you want to align yourself
with where growth is. Okay, I think that's the biggest thing.
Bottom line though, is we're going to generally follow the economy.
So yesterday, in our in our investor day, we talked
about a volume growth that's kind of one to two
percent that follows, you know, underlying volume growth and pricing
power over time. It's also about one to two percent,
(05:51):
so we think we're three to four percent grower over
time the core market. And then that question is can
you align with better growing industries and can you win markets? Here?
Speaker 2 (05:59):
Andrew, thank you some for joiners. Really appreciate you taking
a few minutes of your time here today. Andrew Siblinaier,
he's the CEO of International Paper No surprise, the ticker
symbols ip loggity to Bloomberg Terminal. He joins us here
in our Bloomberg Interactive Broker studio. They had the investor
Day yesterday. The stocks up forty five percent over the
trailing twelve months, so it's had some pretty solid performance
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Intentionally Disturbing
Join me on this podcast as I navigate the murky waters of human behavior, current events, and personal anecdotes through in-depth interviews with incredible people—all served with a generous helping of sarcasm and satire. After years as a forensic and clinical psychologist, I offer a unique interview style and a low tolerance for bullshit, quickly steering conversations toward depth and darkness. I honor the seriousness while also appreciating wit. I’m your guide through the twisted labyrinth of the human psyche, armed with dark humor and biting wit.