Sylvamo Releases First Quarter 2022 Results

Message from the Chairman and Chief Executive Officer
“We generated strong earnings and free cash flow,” said Jean-Michel Ribiéras. “We expect we will continue that trend and achieve pre-pandemic earnings levels, even excluding our Russian business. We have the right team to continue to service our customers and navigate input cost inflation and supply chain hurdles.”

First-Quarter Highlights
*Net income of $26 million ($0.59 per diluted share) compared with $62 million ($1.41 per diluted share) in the fourth quarter of 2021; first quarter 2022 net income includes the impact of a $68 million ($57 million, net of tax) impairment charge for our Russian operations as we evaluate options to exit the business
*Adjusted operating earnings1 (non-GAAP) of $87 million ($1.97 per diluted share) compared with $75 million ($1.71 per diluted share) in the fourth quarter of 2021
*Adjusted EBITDA2 (non-GAAP) of $187 million (19.1% margin) compared with $170 million (17.5% margin) in the fourth quarter of 2021
*Free cash flow3 (non-GAAP) of $73 million compared with $162 million in the fourth quarter of 2021
*All reported results for the first quarter of 2022 include our Russia operations

Management Summary
We continue to execute our three-prong strategy of commercial excellence, operational excellence and financial discipline. This approach generated a 19.1% adjusted EBITDA margin in the first quarter of 2022.

Global demand continues to strengthen in most regions as schools and offices reopen. As a result, our volumes remain strong, running at full capacity in all three regions. We also continue to realize the benefit of prior price increases, which allowed price and mix to outpace input cost increases.

Our facilities operated well in a challenging supply chain environment, navigating input cost inflation and supply chain hurdles. Most importantly, we continue taking care of each other and our customers.

This strategy generated $73 million in free cash flow, enabling us to pay down $33 million in debt and increase our cash position by $49 million.

We believe Sylvamo will continue creating value as we work to achieve our vision of being the employer, supplier and investment of choice. We are currently on a path to generate between $725 million and $775 million in adjusted EBITDA and $160 million and $180 million in free cash flow this year, excluding Russia for the full year.

Our path forward in Russia is driven by our primary value to always do the right things in the right ways for the right reasons. We have made the decision to exit Russia. We will do so in an orderly manner and are conducting a process to sell our Russian business. We are working to reach an agreement and plan to complete this process promptly, including obtaining approval from our board, as well as the required government approvals to execute a transaction.

We would not be in this position without our team members who continue overcoming challenges while remaining focused on serving customers and taking care of themselves and their teammates. We appreciate them for everything they do each day.
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