WestRock Reports Strong Finish to Fiscal 2017

WestRock Company (WestRock) (NYSE:WRK), a leading provider of differentiated paper and packaging solutions, today announced results for its fiscal fourth quarter and fiscal year ended September 30, 2017.

Fourth Quarter 2017 Highlights
•  Earned $0.76 per diluted share and $0.87 of adjusted earnings per diluted share. Our effective tax rate was 20.7%, and our adjusted tax rate was 28.4%
•  Generated net cash provided by operating activities of $494 million and adjusted free cash flow of $271 million
•  Achieved $80 million in year-over-year productivity and a run rate of $840 million of synergy and performance improvements since the merger

Full Year 2017 and Other Highlights
•  Earned $2.77 per diluted share and $2.62 of adjusted earnings per diluted share
•  Generated net cash provided by operating activities of $1.90 billion and adjusted free cash flow of $1.22 billion
•  Achieved $361 million of productivity year-over-year
•  Continued our portfolio transformation by:
•  Completing five acquisitions, including the acquisition of Multi Packaging Solutions International Limited (“MPS”). These acquisitions:
º  Advanced our strategy to provide differentiated, high value-added solutions to our customers and expanded our presence in attractive end markets
º  Created opportunities for meaningful synergies and performance improvements, and
º  Increased our vertical integration levels
• Selling the Home, Health and Beauty business (“HH&B”) in April 2017. This sale resulted in a pre-tax gain of $193 million and generated net after-tax proceeds of approximately $1 billion
•  Executed our disciplined capital allocation strategy:
•  Invested $779 million in capital expenditures
•  Deployed $2.7 billion to strategic M&A opportunities
•  Received $1.0 billion from the sale of HH&B
•  Paid $403 million in dividends
•  Returned $93 million to stockholders in stock repurchases
•  Recently announced a 7.5% increase in our annual dividend

Steve Voorhees, chief executive officer of WestRock, said, “I am pleased with the success the WestRock team achieved in fiscal 2017, with strong productivity and growth in cash flow. While we experienced a challenging cost environment, our team met the challenge and delivered on our objectives across the board, increasing value for customers, employees and stockholders. We are well positioned for a successful fiscal 2018.”

The $449 million increase in net sales was primarily attributable to $235 million of increased Corrugated Packaging segment sales and $245 million of increased Consumer Packaging segment sales. The increased Consumer Packaging segment sales were primarily due to the contribution from the MPS acquisition, and were partially offset by factors that included the absence of net sales from HH&B in the current year quarter due to the sale of HH&B. In addition, Land and Development segment sales declined $25 million.

The $18 million increase in segment income was primarily due to $37 million of increased Corrugated Packaging segment income. This increase was partially offset by $15 million of decreased Consumer Packaging segment income and $4 million of decreased Land and Development segment income. Within the Consumer Packaging segment, the sale of HH&B and the expensing of the MPS acquisition inventory step-up reduced segment income by $9 million and $12 million, respectively. The impact of hurricanes in the fourth quarter of fiscal 2017 reduced segment income by an estimated $15 million in the Corrugated Packaging segment and $12 million in the Consumer Packaging segment.

Additional information about the changes in segment sales and segment income is included in the segment discussions below.

Non-allocated expenses were $13 million lower than in the prior year quarter primarily due to lower stock-based compensation costs in the fourth quarter of fiscal 2017 and a loss on an equity investment in the prior year quarter.
more detail at:  http://ir.westrock.com/press-releases/press-release-details/2017/WestRock-Reports-Strong-Finish-to-Fiscal-2017/default.aspx

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