Sylvamo Corp (SLVM) 2023 Q4 法說會逐字稿

Good morning, and thank you for standing by. Welcome to Sylvamo's fourth-quarter 2023 earnings call. (Operator Instructions) As a reminder, your conference is being recorded.

早安，感謝您的支持。歡迎參加 Sylvamo 的 2023 年第四季財報電話會議。（操作員說明）謹此提醒，您的會議正在錄製中。

I would now like to turn the call over to Hans Bjorkman, Vice President, Investor Relations. Sir, the floor is yours.

我現在想將電話轉給投資者關係副總裁漢斯·比約克曼 (Hans Bjorkman)。先生，地板是你的了。

Thanks, Greg. Good morning, and thank you for joining our fourth-quarter and full-year 2023 call today. Our speakers this morning are Jean-Michel Ribiéras, Chairman and Chief Executive Officer; and John Sims, Senior Vice President and Chief Financial Officer.

謝謝，格雷格。早安，感謝您今天參加我們的 2023 年第四季和全年電話會議。今天早上的演講者是董事長兼執行長 Jean-Michel Ribiéras；以及資深副總裁兼財務長約翰·西姆斯 (John Sims)。

Slides 2 and 3 contain important information including certain legal disclaimers. For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties. We will also present certain non-US GAAP financial information. Reconciliations of those figures to US GAAP financial measures are available in the appendix. Our website also contains copies of the earnings release as well as today's presentation.

投影片 2 和 3 包含重要訊息，包括某些法律免責聲明。例如，在本次電話會議中，我們將做出具有風險和不確定性的前瞻性陳述。我們也將提供某些非美國公認會計準則財務資訊。附錄中提供了這些數據與美國公認會計準則財務指標的對帳。我們的網站還包含收益發布以及今天的簡報的副本。

With that, I'll turn the call over to Jean-Michel.

這樣，我會將電話轉給讓-米歇爾。

Thanks, Hans. Good morning, and thank you for joining our call. Let's turn to slide 4, please. 2023, we created value for shareowners by managing what we could control as we executed our three-pronged strategy of commercial excellence, operational excellence, and financial discipline to strengthen our competitive advantages in our core uncoated freesheet market.

謝謝，漢斯。早安，感謝您加入我們的通話。請轉到投影片 4。 2023 年，我們透過管理我們可以控制的事情為股東創造價值，同時執行我們的三管齊下的策略：卓越商業、卓越營運和財務紀律，以加強我們在核心無塗層免費紙張市場的競爭優勢。

First, we allocated cash to improve our financial position by repaying $76 million in debt, achieving a net debt to adjusted EBITDA of 1.2 times. Second, we continued to deliver on our investment thesis. We earned $607 million adjusted EBITDA, generated $294 million in free cash flow, and returned $127 million in cash to shareowners.

首先，我們分配現金，透過償還 7,600 萬美元的債務來改善我們的財務狀況，實現淨債務與調整後 EBITDA 的 1.2 倍。其次，我們繼續實踐我們的投資理念。我們賺取了 6.07 億美元的調整後 EBITDA，產生了 2.94 億美元的自由現金流，並向股東返還了 1.27 億美元的現金。

Third, we reinvested to strengthen our low-cost assets. We invested $210 million and continued to accelerate investment in high-return capital projects. We also acquired the 500,000-ton Nymolla mill in Sweden for $167 million. This is a great asset with a talented team. The mill is performing, well and we are benefiting from the $40 million pulp mill modernization project that was completed just before the acquisition. In a tough market, the mill generated about $50 million in cash before any allocated overhead.

第三，我們進行再投資，強化低成本資產。投資2.1億美元，持續加快高回報資本項目投資。我們也以 1.67 億美元收購了瑞典 50 萬噸 Nymolla 工廠。這是一個擁有才華橫溢的團隊的寶貴資產。該工廠運作良好，我們受益於收購前剛完成的耗資 4,000 萬美元的紙漿廠現代化項目。在嚴峻的市場環境下，工廠在扣除任何分配的管理費用之前創造了約 5000 萬美元的現金。

Slide 5 highlights our 2023 full-year key financial metrics. Our adjusted EBITDA was $607 million, which was a 16% margin. Our $294 million of free cash flow was more than $7 per share. In 2023, our free cash flow was heavily weighted to the second half of the year. We generated almost 90% of free cash flow in the second half.

投影片 5 重點介紹了我們 2023 年全年的主要財務指標。我們調整後的 EBITDA 為 6.07 億美元，利潤率為 16%。我們 2.94 億美元的自由現金流超過每股 7 美元。2023年，我們的自由現金流嚴重偏向下半年。下半年我們產生了近 90% 的自由現金流。

You may recall that in '22, we generated about 75% of free cash flow in the second half of the year. Our adjusted operating earnings were $6.51 per share. We regard our '23 financial results as solid considering uncoated freesheet industry conditions that were more unfavorable than expected. As we enter 2024, we are confident in our ability to continue to create value well customers and shareowners.

您可能還記得，22 年下半年，我們大約產生了 75% 的自由現金流。調整後的營業利潤為每股 6.51 美元。考慮到非塗佈免費紙張產業狀況比預期更為不利，我們認為 23 年的財務表現是穩健的。進入 2024 年，我們對繼續為客戶和股東創造價值的能力充滿信心。

Slide 6 shows our fourth-quarter key financial metrics. Adjusted EBITDA was $117 million with a margin of 12%. We generated $104 million in free cash flow as we continue to optimize our working capital. Our adjusted operating earnings were $1.16 per share. This strong performance even during challenging industry conditions demonstrates our agility and ability to adapt. I'm proud of how our teams collaborated to meet our customer needs and maximize cash.

投影片 6 顯示了我們第四季的關鍵財務指標。調整後 EBITDA 為 1.17 億美元，利潤率為 12%。隨著我們不斷優化營運資本，我們產生了 1.04 億美元的自由現金流。調整後的營業利潤為每股 1.16 美元。即使在充滿挑戰的行業條件下，這種強勁的表現也證明了我們的敏捷性和適應能力。我為我們的團隊如何合作滿足客戶需求並最大化現金感到自豪。

Now John will review our fourth-quarter performance in more detail. John?

現在約翰將更詳細地回顧我們第四季的業績。約翰？

Thank you, Jean-Michel. Good morning, everyone, and thanks for joining our call. Slide 7 shows our fourth-quarter earnings (inaudible). Our $117 million of adjusted EBITDA was higher than our outlook of $90 million to $110 million. Let's discuss the changes versus the third quarter.

謝謝你，讓-米歇爾。大家早安，感謝您加入我們的通話。投影片 7 顯示了我們第四季的收益（聽不清楚）。我們 1.17 億美元的調整後 EBITDA 高於我們 9,000 萬至 1.1 億美元的預期。讓我們討論一下與第三季相比的變化。

Price and mix decreased by $25 million, largely due to earlier paper price decreases in all regions as well as unfavorable mix in Latin America and North America. Paper prices was stable in the fourth quarter in all regions. Volume improved by $20 million due to seasonally stronger volume in Latin America and positive trends in both Europe and Latin and North America.

價格和產品組合下降了 2500 萬美元，主要是由於所有地區早期的紙張價格下降以及拉丁美洲和北美的不利組合。第四季各地區紙價維持穩定。由於拉丁美洲銷售季節性強勁以及歐洲、拉丁美洲和北美的積極趨勢，銷量增加了 2000 萬美元。

Operations and other costs increased by $12 million, primarily due to higher seasonal operating costs in Europe and North America, as well as unexpected reliability issue with a third-party energy provider at our Saillat mill, which had a $5 million impact. This issue has been resolved, and we're working to recover the full amount.

營運和其他成本增加了 1,200 萬美元，主要是由於歐洲和北美的季節性營運成本增加，以及我們 Sailat 工廠第三方能源供應商出現意外的可靠性問題，造成了 500 萬美元的影響。此問題已解決，我們正在努力收回全部金額。

These negative impacts were partially offset by lower economic downtime cost versus the third quarter. Planned maintenance outage costs increased by $25 million with planned outages in all three regions. Input and transportation costs improved by $1 million, driven primarily by favorable chemical costs more than offsetting seasonally higher energy costs.

這些負面影響被較第三季較低的經濟停機成本部分抵消。由於所有三個地區均計劃停電，因此計劃維護停電成本增加了 2500 萬美元。投入和運輸成本減少了 100 萬美元，這主要是由於有利的化學品成本抵消了季節性上漲的能源成本。

Let's move to slide 8. Current industry conditions are showing signs of improvement. In Europe and North America, we continue to see improving order books as well as lower import levels. In Latin America, we expect seasonally weaker demand in the first quarter. Keep in mind, in Latin America, historically, demand is sequentially stronger at each calendar quarter. We also expect improving demand for facility in exports to other Latin America and offshore markets.

讓我們轉到幻燈片 8。目前行業狀況出現改善跡象。在歐洲和北美，我們繼續看到訂單量的增加以及進口水準的下降。在拉丁美洲，我們預計第一季需求將出現季節性疲軟。請記住，從歷史上看，在拉丁美洲，每個日曆季度的需求都依次強勁。我們也預計向其他拉丁美洲和離岸市場出口的設施需求將會增加。

Let's go to slide 9. We expect to deliver first-quarter adjusted EBITDA of $105 million to $125 million. We project price and mix to decrease slightly, about $5 million to $10 million. In the fourth quarter, we communicated pulp and paper price increases to our European and Latin American customers effective in January. We do, however, expect some price and mix erosion in North America, and as usual, in the first quarter, we expected unfavorable seasonal mix impact in Latin America.

讓我們看投影片 9。我們預計第一季調整後 EBITDA 為 1.05 億至 1.25 億美元。我們預計價格和產品組合將略有下降，約 500 萬至 1,000 萬美元。在第四季度，我們向歐洲和拉丁美洲客戶傳達了紙漿和紙張價格上漲的消息，自一月份起生效。然而，我們確實預期北美的價格和產品組合會受到一些侵蝕，並且與往常一樣，在第一季度，我們預計拉丁美洲將受到不利的季節性組合影響。

We expect volume to decrease by $10 million to $15 million, reflecting seasonally weaker industry demand quarter in Latin America. Operations and other costs are projected to improve by $20 million to $25 million, primarily reflecting lower economic downtime. We expect input and transportation costs to increase by $5 million to $10 million due to increased transportation costs, mostly in North America and higher fiber costs in Latin America. Planned maintenance outages are projected decreased by $3 million.

我們預計銷售量將減少 1,000 萬美元至 1,500 萬美元，反映出拉丁美洲產業需求季度的季節性疲軟。營運和其他成本預計將減少 2,000 萬至 2,500 萬美元，主要反映了經濟停機時間的減少。我們預計投入和運輸成本將增加 500 萬至 1,000 萬美元，原因是運輸成本增加（主要是在北美）以及拉丁美洲光纖成本的上漲。計畫內的維護停電預計將減少 300 萬美元。

Moving forward, we will continue to provide quarterly earnings guidance and selected annual financial metrics as shown on slide 17 in the appendix. On the advice of our high-conviction and long-term shareowners, we'll no longer provide full-year guidance for earnings or free cash flow. They have encouraged us to discontinue annual guidance and to continue our focus on growing long-term shareowner value.

展望未來，我們將繼續提供季度獲利指引和選定的年度財務指標，如附錄第 17 張投影片所示。根據我們堅定的長期股東的建議，我們將不再提供全年獲利或自由現金流指引。他們鼓勵我們停止年度指導，並繼續專注於增加長期股東價值。

But let's go to slide 10. We continue to reinvest to strengthen our low-cost asset, and we'll find high-return projects to increase our earnings and cash flow. Our 2024 capital spending outlook includes $125 million to $130 million of maintenance and regulatory spending as low as $30 million to $35 million for high-return projects. Our Brazilian forest lands are significantly -- our significant competitive advantages. These eucalyptus plantations provide a material cost advantage relative to most other global competitors.

讓我們看投影片 10。我們繼續進行再投資以加強我們的低成本資產，我們將找到高回報項目來增加我們的收益和現金流。我們對 2024 年資本支出的展望包括 1.25 億至 1.3 億美元的維護和監管支出，低至 3,000 萬至 3,500 萬美元的高回報項目。我們的巴西林地是我們顯著的競爭優勢。相對於大多數其他全球競爭對手，這些桉樹種植園具有材料成本優勢。

In 2023, we invested $34 million, and this year, we'll invest $35 million of forest land to increase our self-sufficiency and reduce our wood costs. We are also investing $20 million this year, $12 million in 2025 for a three-year third-party wood supply agreement to ensure adequate supply in 2024 through 2026.

2023 年，我們投資了 3,400 萬美元，今年我們將投資 3,500 萬美元林地，以提高自給自足並降低木材成本。我們今年還將投資 2,000 萬美元，到 2025 年投資 1,200 萬美元，用於簽訂為期三年的第三方木材供應協議，以確保 2024 年至 2026 年的充足供應。

Let's look at slide 11 for additional detail on our Brazilian forest land. We source the majority of our wood in Brazil from our owned and managed wood and supplement that with open market purchases. Most of our wood needs comes from our forest land, from strategic long-term partnerships. Our owned and managed wood have the capacity to produce or provide another 80% to 90% of our total wood needs from forest land close to our mill.

讓我們看看幻燈片 11，以了解有關巴西林地的更多詳細資訊。我們在巴西採購的大部分木材來自我們擁有和管理的木材，並透過公開市場採購進行補充。我們的大部分木材需求來自我們的林地，來自戰略性長期合作夥伴關係。我們擁有和管理的木材有能力從工廠附近的林地生產或提供我們木材總需求的另外 80% 至 90%。

However, several years of reduced planning, combined with natural causes, largely droughts and fires, force us to harvest trees early. These factors increase the amount of market wood required to meet our needs. We are currently purchasing about 25% of our wood from the open market, and this wood cost two to three times our owned wood. The increase in reforestation capital and a three-year wood supply agreement will enable us to return to about 85% owned and managed wood by 2027.

然而，幾年來規劃的減少，再加上自然原因（主要是乾旱和火災），迫使我們提前採伐樹木。這些因素增加了滿足我們需求所需的市場木材量。目前，我們大約 25% 的木材是從公開市場購買的，這些木材的價格是我們自有木材的兩到三倍。重新造林資本的增加和為期三年的木材供應協議將使我們能夠在 2027 年之前恢復約 85% 擁有和管理的木材。

Let's move to slide 12. In addition to providing global competitive advantages, our Brazilian forest lands have significantly increased their value. In the fourth quarter, we commissioned a third party to appraise our forest land. In December, they valued it at about $1 billion at the current exchange rate.

讓我們轉到投影片 12。除了提供全球競爭優勢外，我們的巴西林地的價值也顯著增加。第四季度，我們委託第三方對我們的林地進行了評估。12 月，他們以當前匯率估值約為 10 億美元。

The updated valuation reflects an increase of about $600 million from our 2021 appraisal done by the same firm. Increasing demand for land wood in Brazil has driven this increase in valuation. Our forest lands are not only towards the global competitive advantage, but also an enduring repository of shareowner value.

更新後的估值比我們同一家公司在 2021 年進行的評估增加了約 6 億美元。巴西對陸地木材的需求不斷增長推動了估值的上漲。我們的林地不僅具有全球競爭優勢，也是股東價值的持久儲存庫。

Jean-Michel, I'll now turn it back over to you.

讓-米歇爾，我現在把它交還給你。

Thank, John. I'm on slide 13. We are a cash flow story. We have generated substantial cash over the past two years, and importantly, returned $90 million in cash to shareowners in '22 and $127 million in 2023. Last year, we also deposited $60 million in escrow, which allowed us to return more than the $90 million limit in our credit agreement. Returning cash to shareowners remains a key component of our capital allocation strategy. In 2024, we expect to return at least 40% of free cash flow to shareowners.

謝謝，約翰。我在投影片 13 上。我們是一個現金流故事。過去兩年，我們創造了大量現金，重要的是，我們在 22 年向股東返還了 9,000 萬美元現金，在 2023 年向股東返還了 1.27 億美元現金。去年，我們還存入了 6,000 萬美元的託管資金，這使我們能夠返還超過信貸協議中 9,000 萬美元的限額。向股東返還現金仍然是我們資本配置策略的關鍵組成部分。到 2024 年，我們預計將至少 40% 的自由現金流返還給股東。

Slide 14, please. We are confident in our ability to continue to create long-term shareowner value by executing our strategy and delivering on our investment thesis. We believe in the promise of paper for education, communication, and entertainment, and we intend to increase our competitive advantages in the market we serve.

請幻燈片 14。我們對透過執行我們的策略和實現我們的投資理念繼續創造長期股東價值的能力充滿信心。我們相信紙張在教育、通訊和娛樂方面的前景，並且我們打算增強我們在所服務的市場中的競爭優勢。

We are a low-cost global producer with strong supply position, iconic brands, and talented teams. We'll leverage our strengths to drive high returns on invested capital and generate free cash flow. We'll use that cash to increase shareowner value by maintaining a strong financial position, returning cash to shareowners, and reinvesting in our business. We are confident in our future and motivated by the opportunities that lie ahead.

我們是一家低成本的全球生產商，擁有強大的供應地位、標誌性品牌和才華橫溢的團隊。我們將利用我們的優勢來推動投資資本的高回報並產生自由現金流。我們將利用這些現金，透過保持強勁的財務狀況、向股東返還現金以及對我們的業務進行再投資來增加股東價值。我們對未來充滿信心，並受到前方機會的激勵。

With that, I'll turn the call back to Hans.

說完，我會把電話轉回給漢斯。

Thanks, Jean-Michel, and thank you, John. Okay, Greg, we're ready to take questions.

謝謝讓·米歇爾，謝謝約翰。好的，格雷格，我們準備好回答問題了。

(Operator Instructions) George Staphos, Bank of America.

（操作員指令）George Staphos，美國銀行。

Hi, everyone. Good morning. Can you hear me okay?

大家好。早安.你聽得到我說話嗎？

Yeah, we can. Morning, George.

是的，我們可以。早上好，喬治。

How are you? Thanks for the details. I'll ask my two question and get back in queue. First of all, I know you're not giving guidance past the first quarter, but how repeatable are the trends and what you're doing in operations and other costs?

你好嗎？感謝您提供詳細資訊。我會問我的兩個問題並返回隊列。首先，我知道您不會在第一季之後提供指導，但是趨勢的可重複性如何以及您在營運和其他成本方面所做的事情？

They seem to have been a source -- even with some offsets that you talked to, seem to be a source of positive variance in the fourth quarter for you. It's certainly a positive bridge item in the first quarter. How much longer can that go and how much is the cost reduction program driving that? That's question number one.

他們似乎是一個來源——即使你談到了一些抵消，似乎也是你第四季度積極差異的來源。這無疑是第一季的一個積極的橋樑項目。這種情況還能持續多久？成本削減計畫對這種情況的推動作用有多大？這是第一個問題。

Question number two, to my recollection of the first time in a while that you've talked about the timberland values in Brazil. Given our experience over the years covering the Latin American producers, that connection to timberland is a source of competitive advantage, a source of process improvement. Are you suggesting that, over time, this would be something you could disconnect from the portfolio? Or do you see this as a reason why you should be able to maintain your position grow profitably and either way not being under -- it's being underappreciated within the market. How should we think about what you're trying to say on timberlands here? Thank you.

第二個問題，我記得你有一段時間第一次談論巴西的林地價值。鑑於我們多年來涵蓋拉丁美洲生產商的經驗，與林地的聯繫是競爭優勢的源泉，是流程改進的來源。您是否建議，隨著時間的推移，您可以將其從投資組合中分離出來？或者你是否認為這是你應該能夠保持你的頭寸盈利增長的一個原因，並且無論如何都不會被低估——它在市場上被低估了。我們該如何思考你想在這裡對林地說的話？謝謝。

George, I will start by your second question, and John will take the first one. So we thought our timberland is key to our competitiveness, and it's really a key advantage. The reason why we updated appraisal there is we think it was undervalued, and that's the only reason. We continue to invest in it, and I think this is a base of exactly, as you mentioned, of long-term competitiveness, which we count on. Our fiber is key in our paper advantage. John --

喬治，我將從你的第二個問題開始，約翰將回答第一個問題。因此，我們認為我們的林地是我們競爭力的關鍵，而且它確實是關鍵優勢。我們更新評估的原因是我們認為它被低估了，這是唯一的原因。我們繼續對此進行投資，我認為正如您所提到的，這正是我們所依賴的長期競爭力的基礎。我們的纖維是我們造紙優勢的關鍵。約翰--

Yes, George, I will take your -- your second question comes to the ops variance and how much runway we have there going forward. So what we talked about -- I think it's important to note is that our order books have improved across all regions sit here today. In fact, we're running full in both Europe and Lat-Am and with significantly less economic downtime in North America. And that has driven a lot of the operational room because of order downtime, and we're absorbing more of the fixed costs that we had in the first half or last year.

是的，喬治，我會回答你的第二個問題，涉及操作差異以及我們未來有多少跑道。所以我們所討論的 - 我認為值得注意的是，我們今天在所有地區的訂單都有所改善。事實上，我們在歐洲和拉丁美洲都在全力運轉，而北美的經濟停工時間則大大減少。由於訂單停機，這導致了很大的營運空間，我們正在吸收上半年或去年的更多固定成本。

Second thing is that we are continuing to start to get the benefit of some of this high return cost reduction capital that we started to invest in (inaudible), but we really didn't start ramping that up until next year. And I think third, we talked about our -- we call it Project Horizon. That's our cost reduction program with both operations, supply chain, and S&A. And we started seeing some benefit of that a little bit in the first -- we expect to see a little bit in the first quarter, but really that's going to really start ramping up through the balance of the year.

第二件事是，我們正在繼續開始從我們開始投資的一些高回報成本降低資本中獲益（聽不清楚），但我們直到明年才開始加強。我認為第三，我們討論了我們的——我們稱之為地平線計畫。這是我們針對營運、供應鏈和銷售與管理的成本削減計劃。我們在第一季就開始看到一些好處——我們預計在第一季會看到一些好處，但實際上，這將在今年餘下的時間裡真正開始增加。

Hey, John, forgive me, just a point of clarification. You said on the reduction in unabsorbed costs, if I heard you correctly, you're going to see more of that this year or more -- I just want to make sure I heard the cadence on that correct because the phone cut out.

嘿，約翰，請原諒我，只是澄清一點。你說關於未吸收成本的減少，如果我沒聽錯的話，今年或更長時間你會看到更多這樣的情況——我只是想確保我聽到的節奏是正確的，因為電話斷了。

Yes. So if you look at -- even in the fourth quarter, you'll see in the appendix we took about 90,000 tons left lack of order downtime in the fourth quarter.

是的。因此，如果你看一下——即使是在第四季度，你也會在附錄中看到，我們在第四季度拿下了大約 9 萬噸訂單，沒有停工。

Got it.

知道了。

And what I said was in the first quarter, that is somewhat what's driving the operations outlook that we gave because we're running more full right now in the first quarter than we were.

我所說的是第一季度，這在某種程度上推動了我們給出的營運前景，因為我們現在第一季的營運比以前更充分。

Okay. Thank you. I've got that. I'll be back.

好的。謝謝。我已經知道了。我會回來的。

(Operator Instructions) Harman Dhatt, RBC.

（操作員說明）Harman Dhatt，RBC。

Hi, good morning. Thanks for taking my question. This is Harman filling in for Matt McKellar. I guess one quick question I had was just around -- and apologies if this was mentioned in the first question, I had some technical difficulties. But with the high return projects that the company looking out in ['24], are you able to share any incremental details on what sort of things you're pursuing and how that could shake out in terms of increased margins or even potentially supporting more cost reductions as you've outlined with Project Horizon?

早安.感謝您提出我的問題。這是哈曼（Harman）接替馬特·麥凱勒（Matt McKellar）。我想我遇到了一個簡單的問題 - 如果在第一個問題中提到這一點，我很抱歉，我遇到了一些技術困難。但是，對於公司在 ['24] 中尋找的高回報項目，您是否能夠分享任何關於您正在追求的事物類型的增量細節，以及如何在增加利潤甚至可能支持更多方面實現這一目標？正如您在Project Horizo​​n 中所概述的那樣，可以降低成本？

Yes, Harman, and thanks for joining the call. Also, pass our congratulations over to Matthew. I understand his wife having a baby is exciting. I'll give you an example of what we have. So this also talks about really the agility, I think, we have as a company because we're singly focused on uncoated freesheet. But there was a large mill that was shut down and South Carolina in Charleston, and it was a large consumer of wood chips.

是的，哈曼，感謝您加入通話。另外，請向馬修表示祝賀。我知道他的妻子生孩子是令人興奮的。我將舉一個我們擁有的例子。因此，我認為，這也真正談到了我們作為一家公司所擁有的敏捷性，因為我們只專注於無塗層免費紙張。但南卡羅來納州查爾斯頓有一家大型工廠被關閉，它是木片的大量消費者。

One of the significant cost reduction projects we'll be investing in this year is increasing our capacity to handle chips in our mill at Eastover so that we can take advantage of the increased supply now that's come about because of that mill's closure. And so those are some of the type of projects we have done.

我們今年將投資的重大成本削減項目之一是提高伊斯托弗工廠處理木片的能力，以便我們可以利用因該工廠關閉而增加的供應。這些是我們已經完成的一些項目類型。

In fact, just recently, we completed a chemical recovery project in Eastover. That has --- also, we've already started seeing results of pretty significant returns in terms of cost reduction that we started experiencing here even in January. Typically, these projects that we have -- we have targeted almost $30 million of high return projects, these returns are well over 20% returns, even much higher than that.

事實上，就在最近，我們在伊斯特弗完成了一個化學品回收計畫。而且，我們已經開始看到在成本降低方面取得了相當顯著的回報，我們從一月就開始經歷這種情況。通常，我們的這些項目——我們的目標是近 3000 萬美元的高回報項目，這些回報遠遠超過 20%，甚至遠高於這個數字。

Awesome. No, that's great. That's helpful color. And I suppose, just I guess, more broadly, with the Red Sea crisis, would you be seeing additional European product show up in North America given the increased cost of reaching Asian markets from Europe? I guess our last check with RISI said that North American outbound shipping costs have been somewhat flat, but inbound are up. So we were just hoping to get some more perspective on there.

驚人的。不，那太好了。這是有用的顏色。我想，更廣泛地說，隨著紅海危機，考慮到從歐洲進入亞洲市場的成本增加，您會看到更多的歐洲產品出現在北美嗎？我想我們上次與 RISI 的核實顯示，北美出境運輸成本有些持平，但入境運輸成本有所上升。所以我們只是希望能獲得更多的視角。

Yeah, Harman. It's hard to tell them what the implications could be in terms of the Red Sea crisis. What we are seeing right now, Europe is decreased imports. It's some of the transit times coming from Asia. It's almost increased about four weeks, we understand, for imports from Asia to get into the Europe. So that could have an impact of that actually decreased imports in Europe, which then means that more domestic supply has to be stay onshore to service that need.

是的，哈曼。很難告訴他們紅海危機可能會產生什麼影響。我們現在看到，歐洲的進口正在減少。這是來自亞洲的一些轉運時間。據我們了解，從亞洲進口到歐洲的時間幾乎增加了大約四個星期。因此，這可能會影響歐洲進口的實際減少，這意味著更多的國內供應必須留在陸上以滿足這一需求。

But I would say right now, it's hard to tell what the impact of the Red Sea is going to be. It's certainly increasing freight costs. So all exporters are seeing increased freight costs as well as lead time.

但我現在想說的是，很難判斷紅海會產生什麼影響。這無疑會增加運費。因此，所有出口商都發現貨運成本和交貨時間都在增加。

And concerning what you were asking about Europe export overseas, we export very little from Europe to overseas. Our production in Europe mostly remain in Europe, and we have a very few going to Middle East Africa. So it's really not impacting us so far significantly.

關於您詢問的有關歐洲向海外出口的問題，我們從歐洲向海外的出口很少。我們在歐洲的生產大部分都留在歐洲，很少去中東非洲。所以到目前為止，它確實沒有對我們產生重大影響。

Got you. No, that's helpful. And yeah, thanks again. I'll come back.

明白你了。不，這很有幫助。是的，再次感謝。我會回來的。

George Staphos, Bank of America.

喬治‧斯塔福斯，美國銀行。

Yeah, thank you very much. Just on that point that was raised just before, all right, I know you aren't really quantifying it, but is the impact from Asia, if there is a positive on reduced imports into Europe, more on converted products or more on cut-size and graphic papers overall, that in turn, is leading to better demand for you and/or your customers?

是的，非常感謝。就在之前提出的這一點上，好吧，我知道你並沒有真正量化它，但來自亞洲的影響是否對歐洲進口減少、更多轉換產品或更多削減有積極影響？總體尺寸和圖形紙張，這反過來又會為您和/或您的客戶帶來更好的需求？

Mostly, I would say, George, that cut size, this was the easier to export. So mostly you see from Asia are cut size, and they're all -- and the offset business because of the various sizes that you have to have, it's much more difficult for any exporter, for that matter, not just to Asian exporters (technical difficulty).

大多數情況下，喬治，我會說，縮小尺寸，這樣更容易出口。因此，您從亞洲看到的大多數都是裁切尺寸，而且它們都是- 並且由於您必須擁有各種尺寸，所以對於任何出口商來說，這對任何出口商來說都要困難得多，而不僅僅是對亞洲出口商（技術難度）。

Okay. And John and Jean-Michel my next question, and I'll come back in queue again, related point, so to the extent that we've seen pulp prices continuing to rise in Europe, recognizing Asia, we're starting to see them fade a bit. Has that cost curve -- or let me say it differently, has the cost curve shifted sufficiently, where that's also beginning to have an impact on supply within Europe, i.e., the curve shifted some of your non-integrated peers or having some difficulty producing or really that's not really having much of an effect at this juncture from what you can see?

好的。約翰和讓-米歇爾是我的下一個問題，我將再次回到隊列，相關點，因此就我們看到歐洲紙漿價格持續上漲而言，認識到亞洲，我們開始看到它們褪色一點。成本曲線是否——或者讓我換句話說，成本曲線是否充分移動，這也開始對歐洲內部的供應產生影響，即曲線移動了一些非一體化同行或生產遇到一些困難或從你所看到的情況來看，目前這並沒有產生太大的影響？

I think, George, it's a good question. I think it's impacting. From the trough, the pulp prices in euro have gone up EUR160 from last year trough to today. So it is for sure impacting the non-integrated players in Europe. And that's maybe one of the reasons why we're seeing operating rates back up high in Europe and having a very strong demand. It might impact it. We also know the inventory correction in Europe is behind us, and the industry inventory are quite low, actually, right now in paper. So multiple factors, but pulp price has an impact.

我認為，喬治，這是一個很好的問題。我認為這是有影響的。從谷底來看，以歐元計價的紙漿價格較去年谷底至今上漲了 160 歐元。因此，這肯定會影響歐洲的非一體化參與者。這也許就是我們看到歐洲開工率回升且需求非常強勁的原因之一。可能會影響它。我們也知道歐洲的庫存調整已經過去，實際上，目前紙面產業庫存相當低。因素很多，但紙漿價格有影響。

Yeah. Jean-Michel, ultimately, look, I realize it's our job, not yours, but to the extent that you have a view on this, is there a view in terms of how much now is in the red in terms of industry production relative to the cost curve, and if you don't have a view, that's fine. I just thought I'd ask if you had any share.

是的。讓-米歇爾，最終，我意識到這是我們的工作，而不是你的，但就你對此有看法而言，是否有關於現在工業生產相對於成本曲線，如果你沒有視野，那也沒關係。我只是想問你是否有分享。

I don't, but I would -- I don't have the number precisely. So all I can make is maybe a guess, a very high-level guess, and it might be about 10%.

我不知道，但我會——我沒有確切的數字。所以我能做的可能只是一個猜測，一個非常高水準的猜測，可能是 10% 左右。

Okay. Thank you very much. I'll turn it over.

好的。非常感謝。我會把它翻過來。

(Operator Instructions) George Staphos.

（操作員說明）喬治·斯塔福斯。

Hi, guys. To the extent that there's been some pricing reductions in North America as memory serves, at least in terms of published indices, how much of that, if you can quantify, recognizing you're not tied to receipt in your contracts per se, but how much of that is baked into your guidance if anything, at all for the first quarter? And to the extent that you could size it broadly, how much would be something we need to make sure we model for over the rest of the year, recognizing you're not guiding on 2Q to 4Q?

嗨，大家好。據我所知，北美地區的價格有所下降，至少在公佈的指數方面是這樣，如果你能量化的話，其中有多少是下降的，認識到你與合約本身的收據無關，但如何其中大部分已納入您對第一季的指導（如果有的話）？如果您可以廣泛地確定其規模，那麼在認識到您沒有對第二季度到第四季度進行指導的情況下，我們需要多少資金才能確保我們在今年剩餘時間內進行建模？

So George, I cannot give you an exact price, but I can give you a trend. We saw the same RISI reports you did. As you mention it, we do not report to our pricing to RISI. I will say on a trend, RISI might have the direction correct. But we have seen in the past and in absolute value, we see differently. So in our outlook, mostly from third quarter, actually, we expect slight erosion in North America, not a huge one, a slight one. And at the same time, we expect because of two -- of price increases announced to our customers in Europe and in Brazil and LatAm, we expect price increase on the other regions.

喬治，我不能給你一個確切的價格，但我可以給你一個趨勢。我們看到了與您相同的 RISI 報告。正如您所提到的，我們不會向 RISI 報告我們的定價。我想說的是，就趨勢而言，RISI 的方向可能是正確的。但我們在過去和絕對價值上看到了不同的看法。因此，在我們的展望中，實際上，主要是從第三季開始，我們預期北美會出現輕微的侵蝕，不是很大，而是輕微的。同時，我們預計由於向歐洲、巴西和拉丁美洲的客戶宣布的兩個價格上漲，我們預計其他地區的價格也會上漲。

Okay. And then back to Europe, and I'll turn it over. The performance for the quarter was somewhat below our expectations now. That's neither here nor there. That's our forecast versus your actual. But was performance in Europe as you had expected in terms of that loss? And what -- if we -- again, you're not guiding for the full year, but should we expect that, ultimately, Europe should be breakeven or better for this year? And what are the bigger bridge items two to get you there, if in fact that's your assumption? Thank you.

好的。然後回到歐洲，我會把它翻過來。本季的表現略低於我們的預期。那既不在這裡也不在那裡。這是我們的預測與您的實際情況。但就損失而言，歐洲的表現是否符合您的預期？如果我們再次強調，您沒有提供全年指導，但我們是否應該預期歐洲今年最終會實現損益平衡或更好？如果這確實是您的假設，那麼幫助您實現這一目標的兩個更大的橋樑專案是什麼？謝謝。

Yeah. So '23, as you know, in Europe was difficult. It was a trough in terms of demand. The prices of pulp, which affect a lot of our Saillat mill went down. We had an annual outage in Saillat, which costed us $20 million. We had an annual outage in the fourth quarter in Nymolla. We had an issue with the turbine we mentioned in the Saillat mill, which is over now which costed us $5 million, and it was really the trough of the cycle in terms of prices.

是的。所以，如你所知，23 年在歐洲很困難。就需求而言，這是一個低谷。影響我們許多 Sailat 工廠的紙漿價格下降了。Sailat 每年都會發生一次停電，造成了 2000 萬美元的損失。我們在尼莫拉的第四季度發生了年度停電。我們在 Sailat 工廠提到的渦輪機出現了問題，現在已經結束，花費了 500 萬美元，就價格而言，這確實是周期的低谷。

So we clearly see '24 rebounding significantly and hope to very soon be talking about positive earnings for Europe. So we're quite positive about Europe. It's more cyclical than any other businesses. So sometimes it's a bit frustrating. But on average, we really believe Europe will be good. Nymolla is performing very well. Saillat is performing well; order book, as I mentioned, is good, and we've seen price increasing. So Europe is rebounding significantly. It's a tailwind for '24.

因此，我們清楚地看到 24 年將出現顯著反彈，並希望很快就能談論歐洲的積極盈利。所以我們對歐洲非常樂觀。它比任何其他業務都更具週期性。所以有時候會有點沮喪。但平均而言，我們確實相信歐洲會很好。尼莫拉的表現非常出色。Sailat 表現良好；正如我所提到的，訂單量很好，而且我們看到價格正在上漲。因此，歐洲正在顯著反彈。這是24年的順風車。

Thank you. Go ahead, John.

謝謝。繼續吧，約翰。

Yeah, George. Just to add onto that, you say that it was a trough, but it was a significant. You think about in terms of demand decline that we had in Europe, it was even worse in COVID. We will forget how much volume and shipments were down and also pulp prices. Saillat is -- one-third of its capacity is pulp to a certain extent more exposed to the cyclical pulp prices than our other mills.

是的，喬治。補充一點，你說這是一個低谷，但它是一個重要的。你想想歐洲的需求下降，新冠疫情期間情況更糟。我們會忘記數量​​和發貨量以及紙漿價格下降了多少。Sailat 的產能有三分之一是紙漿，在某種程度上比我們的其他工廠更容易受到週期性紙漿價格的影響。

But as Jean-Michel said, and we said earlier, we're currently running full right now in Europe, and so that's a very positive. We also have prices going up both the paper and pulp. So the reason I think that's helped us with pulp prices going up already almost $160 per ton versus trough would indicate that Europe would be better. Thank you.

但正如讓-米歇爾所說，以及我們之前所說的，我們目前在歐洲正在全力運轉，所以這是一個非常積極的結果。我們的紙張和紙漿的價格也上漲了。因此，我認為這有助於我們使紙漿價格相對於谷底每噸上漲近 160 美元，這表明歐洲會更好。謝謝。

Thank you, John.

謝謝你，約翰。

Harman Dhatt, RBC.

哈曼達特，加拿大皇家銀行。

Hi, thanks. I just had a couple of quick follow ups on the cost reduction plan, and apologies if it was mentioned earlier, I had some technical difficulties at the start of the Q&A. But just had a quick clarifier, that $15 million reduction in overhead expenses, is that factored into your $110 million target? Or is this on top of it? And I suppose, secondly, will there be an update to the prior inflation assumption? I believe it was around $50 million with Q3 results.

你好謝謝。我只是對成本削減計劃進行了一些快速跟進，如果之前提到過，我深表歉意，在問答開始時我遇到了一些技術困難。但我想快速澄清一下，管理費用減少了 1500 萬美元，這是否已計入您 1.1 億美元的目標？還是這是在它之上？其次，我想，先前的通膨假設是否會更新？我相信第三季的業績約為 5,000 萬美元。

Yeah, Harman. The $50 million that we reported for the fourth quarter is additive or was not included in the $110 million target we talked about when we pointed the third quarter. And we have the inflation number that we provided, you're correct. It was $50 million, and that won't be updated. We're still -- that's still a good number.

是的，哈曼。我們報告的第四季的 5000 萬美元是附加的，或者沒有包含在我們在指出第三季時談到的 1.1 億美元目標中。我們有提供的通膨數據，你是對的。這是 5000 萬美元，而且不會更新。我們仍然——這仍然是一個很好的數字。

Got you. Yeah, that's all from my end. Thank you.

明白你了。是的，這就是我的全部。謝謝。

George Staphos.

喬治·斯塔福斯。

Hi, guys, last one for me. You're not the only company in South America that's talked about having to go farther from its own mills for wood and do a bit more third-party wood. And although the company in particular I'm thinking of is more packaging grade production, but is there a broader issue that's been affecting the producers? Has it been just the droughts or has there been something else that's gone on either in terms of maybe over harvesting or underinvesting that, not just for Sylvamo, you've seen elsewhere. Just some quick thoughts there, and I'll turn it over.

嗨，夥計們，我的最後一篇。你們並不是南美洲唯一一家談到必須遠離自己的木材工廠並生產更多第三方木材的公司。儘管我特別想到的公司更多的是包裝級生產，但是否存在影響生產商的更廣泛的問題？只是乾旱，還是有其他事情發生，要么是過度收割，要么是投資不足，這不僅僅是西爾瓦莫，你在其他地方也看到過。只是一些簡單的想法，我會把它翻過來。

I think you saw some of our competitors talked about the same thing we did on some plantations about six to seven years ago, where whose plantation have suffered under the seven-year cycle of drought, natural causes that has impacted all Brazilians forestry plantation. So we're not the only one -- this is not the case anymore, but it's been two years.

我想你看到我們的一些競爭對手談論了大約六到七年前我們在一些種植園所做的同樣的事情，這些種植園遭受了七年周期的干旱，自然原因影響了所有巴西人的林業種植園。所以我們不是唯一的一個——情況不再是這樣了，但已經兩年了。

And we also specifically more significantly from our past companies. We reduced some of our investments in the forestry during those years, which we are -- it's a six-, seven-year cycle. So we're seeing the impact of that now, which is why we've had to go a more outside market than we usually do. And we wanted to solidify the need of wood because there is a strong demand of wood in in Brazil right now. So the demand is clearly strong.

我們也特別從我們過去的公司中得到了更明顯的體現。那些年我們減少了對林業的一些投資，這是一個六、七年的周期。所以我們現在看到了它的影響，這就是為什麼我們必須比平常更深入的外部市場。我們希望鞏固對木材的需求，因為巴西目前對木材的需求強勁。所以需求顯然很強烈。

So the demand plus the natural causes, which have reduced the productivity of plantation is an impact we're feeling, and our strategic investment in the very valuable forest plant we have -- will make up for that.

因此，需求加上自然原因降低了種植園的生產力，這是我們感受到的影響，而我們對我們擁有的非常有價值的森林植物的策略性投資將彌補這一影響。

I mean we're starting to see a little bit of an uptick in South America overall in box shipments. Obviously, that's a bit more softwood, but to the extent that we see a bit of a rebound there, does that put your wood position maybe make it a bit more precarious and mean that next quarter or quarter down the road, you're talking about further inflation that you're contending with? Or are you as much as you -- you're relatively well set for the rest of the year?

我的意思是，我們開始看到南美洲的整體箱子出貨量有所上升。顯然，這有點軟木，但就我們看到的一點反彈而言，這是否會讓你的木材位置變得更加不穩定，並意味著下一個季度或下一個季度，你正在談論關於您正在應對的進一步通貨膨脹？或者說，你是否已經為今年剩下的時間做好了相對充足的準備？

With the investments we've made, we feel like we're well set.

透過我們所做的投資，我們覺得我們已經準備好了。

Okay. Thank you, Jean-Michel. Good luck in the quarter. Thank you, John.

好的。謝謝你，讓-米歇爾。祝本季好運。謝謝你，約翰。

Thank you.

謝謝。

And at this time, there are no further questions I'd now like to turn the call back to Hans Bjorkman for any closing comments.

目前，沒有其他問題了，我現在想將電話轉回漢斯·比約克曼以徵求結束意見。

Thanks, Greg. Before we wrap up the call, Jean-Michel, any closing comments?

謝謝，格雷格。在我們結束通話之前，Jean-Michel，您有什麼結束語嗎？

Yeah, just the thank you first of all, for joining the call, we are a cash flow story. In '23, we generated $294 million in free cash flow and returned $127 million to shareholders. We allocate capital to increase shareowner value. We used cash to maintain a strong balance sheet, return cash to shareowners, and we invest to strengthen our business. And we are confident in our ability to generate strong earnings and free cash flow through the cycle. We are confident for 2024.

是的，首先感謝您加入電話會議，我們是一個現金流故事。23 年，我們產生了 2.94 億美元的自由現金流，並向股東返還了 1.27 億美元。我們分配資本以增加股東價值。我們使用現金來維持強勁的資產負債表，向股東返還現金，並進行投資以加強我們的業務。我們對在整個週期中產生強勁收益和自由現金流的能力充滿信心。我們對 2024 年充滿信心。

Thank you, Jean-Michel, and thanks, everyone, for joining us today. We appreciate your interest in Sylvamo, and we look forward to continued conversations in the coming weeks and months ahead. Thank you so much.

謝謝讓-米歇爾，也謝謝大家今天加入我們。我們感謝您對西爾瓦莫的興趣，我們期待在未來幾週和幾個月內繼續進行對話。太感謝了。

Once again, we would like to thank you for participating in Sylvamo's fourth-quarter 2023 earnings call. You may now disconnect.

我們再次感謝您參加 Sylvamo 的 2023 年第四季財報電話會議。您現在可以斷開連線。