Sylvamo Corporation (NYSE:SLVM) Q1 2024 Earnings Conference Call May 10, 2024 10:00 AM ET

Company Participants

Hans Bjorkman - VP, IR
Jean-Michel Ribiéras - Chairman and CEO
John Sims - SVP and CFO

Conference Call Participants

George Staphos - Bank of America
Matthew McKellar - RBC Capital Markets

Operator

Good morning. Thank you for standing by. Welcome to Sylvamo's First Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] As a reminder, your conference is being recorded.

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

Hans Bjorkman

Thanks Liya. Good morning, and thank you for joining our First Quarter 2024 Earnings Call. Our speakers this morning are Jean-Michel Ribiéras, 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-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. With that, I'll turn the call over to Jean-Michel.

Jean-Michel Ribiéras

Thanks, Hans. Good morning, and thank you for joining our call. Let's turn to Slide 4, please. As anticipated we experienced improving uncoated freesheet and pulp condition in the first quarter, which resulted in improved order book. Our mill system remain near full capacity and our earnings reflect much less economic downtime. We are making good progress with Project Horizon, our program to streamline overhead manufacturing and supply chain costs. We are on track to meet our year-end run rate target of $110 million in savings.

We also continue to return substantial cash to shareholders. We distributed $12 million via the first quarter dividend. And as of today, we’ve repurchased 20 million in shares this year. Let's move to the next slide.

Slide 5 shows our key financial metrics. We generated adjusted EBITDA of $118 million with a margin of 13%. As expected free cash flow was lower than the fourth quarter due to the timing of year-end payments and non-repeat of the fourth quarter inventory reduction benefit and the payment of annual incentive compensation in the first quarter. Keep in mind that our free cash flow is heavily weighted in the second half.