Sylvamo Corporation (NYSE:SLVM) Q2 2023 Earnings Conference Call August 9, 2023 10:00 AM ET

Company Participants

Hans Bjorkman - VP, IR

Jean-Michel Ribieras - Chairman and CEO

John Sims - SVP and CFO

Conference Call Participants

George Staphos - Bank of America

Paul Quinn - RBC Capital Markets

Operator

Good morning, and thank you for standing by. Welcome to Sylvamo's Second Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, your conference is being recorded.

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

Hans Bjorkman

Thanks, Leah. Good morning, and thank you for joining our call today. Our speakers this morning are Jean-Michel Ribieras, Chairman and Chief Executive Officer; and John Sims, Senior Vice President and Chief Financial Officer.

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- U.S. GAAP financial information.

Reconciliations of those figures to U.S. GAAP financial measures are available in the appendix. Our website also contains copies of the second quarter 2023 earnings press release as well as today's presentation.

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

Jean-Michel Ribieras

Thanks, Hans, good morning Thank you for joining our call.

Let's turn to Slide 4, please. In the second quarter, we generated adjusted operating earnings of $1.14 per share and we achieved $124 million in adjusted EBITDA, both at the high end of our guidance range. We generated $33 million of free cash flow and returned $41 million in cash to shareholders via dividends and share repurchases in the second quarter.

Price mix operation and input and transportation costs were all favorable to the outlook we provided in our first quarter call. Our second-quarter volume was short of our expectations, reflecting continued channel inventory correction and weaker than projected demand. John will discuss the industry demand in more detail.

Slide 5 compares our second quarter key financial metrics versus prior periods, in the second quarter, we had $124 million in adjusted EBITDA after $58 million in planned maintenance outages' expenses. Operating teams match our production to our customer demand while executing two third of our total planned maintenance outages for 2023.

I'm proud of our teams at completing these outages safely and efficiently. If we normalized planned maintenance outages' expense, our second-quarter adjusted EBITDA margin would have been 17%.