Smurfit Westrock plc
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
SW$44.09-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001410578-24-001252
Item 2. Management’s Discussion and Analysis of Financial Condition and Result of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0002005951-24-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Result of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 25 previous paragraphs and 494 current paragraphs.
6 unchanged; 10 reworded; 448 added; 9 removed; 0 previous and 30 current paragraphs rearranged.
Tables are not compared: 0 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (448)
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS OF SMURFIT WESTROCK
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conjunction with Smurfit Westrock’s Condensed Consolidated Financial Statements andtheir related notes included above, our
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information under the heading “Management’s Discussion and Analysis of the Financial Condition and Results of Operations of
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Smurfit Kappa” that were disclosed in Smurfit Westrock plc’s (“Smurfit Westrock”) Registration Statement on Form S-4 (file number
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differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” below.
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Smurfit Kappa was determined to be the accounting acquirer in the Combination; therefore, the historical consolidated financial
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statements of Smurfit Kappa for periods prior to the Combination were also considered to be the historical financial statements of the
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Company. Unless otherwise specified or the context otherwise requires, all references to “the Company” and “Smurfit Kappa” refer
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to Smurfit Kappa Group plc and its subsidiaries and their operations when referring to periods prior to the closing of the
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Combination, and references to “the Company” and “Smurfit Westrock” refer to the combined company, Smurfit Westrock plc and its
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subsidiaries, including, among others, Smurfit Kappa and WestRock, when referring the periods after the Combination.
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uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to, the
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factors discussed below under the section entitled “Risk Factors” below and in subsequent filings with the SEC by the Company.
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Forward-looking and other statements in this document may also address the Company’s corporate responsibility progress, plans, and
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goals (including environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily
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material to investors or required to be disclosed in our filings with the Securities and Exchange Commission. In addition, historical,
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current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still
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developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
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The Company’s forward-looking statements speak only as of the date of this report or as of the date they are made. Neither the
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Smurfit Westrock is one of the world's largest integrated manufacturers of paper-based packaging products in terms of volumes and
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sales, with operations in North America, South America, Europe, Asia, Africa, and Australia. Smurfit Westrock partners with its
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customers to provide differentiated, sustainable paper and packaging solutions that enhance its customers’ prospects of success in their
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markets.
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On September 12, 2023, Smurfit Kappa, a public company incorporated in Dublin, Ireland, and WestRock, a public company
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incorporated in Delaware, United States, announced they had reached a definitive agreement on the terms of a proposed combination.
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As described elsewhere in this report, the Combination closed on July 5, 2024. Pursuant to the Transaction Agreement, on the Closing
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for an aggregate cash consideration of $1,291 million (the “Cash Consideration”) and issuance of 258,228,403 shares to WestRock
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shareholders.
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Given the non-operational nature of the Company prior to the Combination, the Smurfit Kappa Share Exchange is not considered a
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The consolidated financial statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the
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financial statements of Smurfit Kappa and therefore, the historical consolidated financial information for periods prior to the
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Combination including the comparatives presented, reflect the pre-Combination carrying values of Smurfit Kappa except for the
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retrospective adjustment to reflect the Company’s legal share capital as the successor after giving effect to the Smurfit Kappa Share
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Exchange.
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The Merger is recognized as a business combination under Accounting Standards Codification (“ASC”) 805, “Business
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Combinations” (“ASC 805”). Smurfit Kappa was determined to be the accounting acquirer of WestRock. Accordingly, as noted
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above, the financial statements reflected in these Condensed Consolidated Financial Statements and the discussions below include
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WestRock's financial position and results of operations for the period subsequent to the completion of the Combination on July 5,
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All results reported for the three and nine months ended September 30, 2024 do not include the financial results of WestRock
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Unless the context otherwise requires, Smurfit Westrock and “the Company” refer to the business of Smurfit Westrock and its wholly-owned subsidiaries, which prior to June 30, 2024, did not include Smurfit Kappa Group plc or WestRock Company when referring to the periods prior to the closing of the Combination, and refer to the combined company (Smurfit Westrock) when referring to the periods after the Combination.
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Important factors that could cause actual results to differ materially from such plans, estimates or expectations include: developments related to pricing cycles and volumes; economic, competitive and market conditions generally, including macroeconomic uncertainty, customer inventory rebalancing, the impact of inflation and increases in energy, raw materials, shipping, labor and capital equipment costs; reduced supply of raw materials, energy and transportation, including from supply chain disruptions and labor shortages; intense competition; risks related to international sales and operations; the Company’s ability to respond to changing customer preferences and to protect intellectual property; results and impacts of acquisitions by the Company; the amount and timing of the Company’s capital expenditures; evolving legal, regulatory and tax regimes; changes in economic, financial, political and regulatory conditions in Ireland, the United Kingdom, the United States and elsewhere, and other factors that contribute to uncertainty and volatility, natural and man-made disasters, civil unrest, pandemics (such as the COVID-19 pandemic), geopolitical uncertainty, and conditions that may result from legislative, regulatory, trade and policy changes associated with the current or subsequent Irish, US or UK administrations; the ability of the Company to successfully recover from a disaster or other business
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continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the COVID-19 pandemic; the impact of public health crises, such as pandemics (including the COVID-19 pandemic) and epidemics and any related company or governmental policies and actions to protect the health and safety of individuals or governmental policies or actions to maintain the functioning of national or global economies and markets; the potential impairment of assets and goodwill; the scope, costs, timing and impact of any restructuring of operations and corporate and tax structure; actions by third parties, including government agencies; the Company’s ability to achieve the synergies and value creation contemplated by the Combination; the availability of sufficient cash to distribute dividends to the Company’s shareholders in line with current expectations; the Company’s ability to promptly and effectively integrate Smurfit Kappa’s and WestRock’s businesses; the Company’s ability to successfully implement strategic transformation initiatives; the Company’s significant levels of indebtedness; the impact of the Combination on the Company’s credit ratings; legal proceedings instituted against the Company; the Company’s ability to retain or hire key personnel; the Company’s ability to meet expectations regarding the accounting and tax treatments of the Combination, including the risk that the Internal Revenue Service may assert that the Company should be treated as a US corporation or be subject to certain unfavorable US federal income tax rules under Section 7874 of the Internal Revenue Code of 1986, as amended, as a result of the Combination; other factors such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as changes in the political, social and regulatory framework in which the Company’s group operates or in economic or technological trends or conditions, and other risk factors included in the Company’s filings with the Securities and Exchange Commission.
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Smurfit Westrock (formerly known as Cepheidway Limited and Smurfit WestRock Limited) is a company limited by shares that was incorporated in Ireland on July 6, 2017. In December 2023, the Company changed its legal name from Cepheidway Limited to Smurfit WestRock Limited and then on June 18, 2024 it re-registered as an Irish public limited company and renamed Smurfit Westrock plc.
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On September 12, 2023, Smurfit Kappa and WestRock announced they had entered into the Transaction Agreement. On July 5, 2024, pursuant to the Transaction Agreement between Smurfit Kappa, WestRock, Smurfit Westrock and Merger Sub: (i) Smurfit Westrock acquired Smurfit Kappa via the Scheme under the Companies Act 2014 of Ireland (as amended) (the “Smurfit Kappa Share Exchange”), and (ii) Merger Sub merged with and into WestRock, with WestRock continuing as the surviving entity (the “Merger,” and together with the Smurfit Kappa Share Exchange, the “Combination”).
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Other than activities related to its formation and the anticipated combination with WestRock, the Company had no historical operations since inception and prior to the completion of the Combination. The Company did not generate revenue for the three months or six months ended June 30, 2024, or 2023, respectively. The Company generated a net loss of $12,300 for the three months and six months ended June 30, 2024, due to the incurrence of professional fees related to its re-registration as an Irish public limited company. The Company did not generate net income/(loss) for the three or six months ended June 30, 2023. Total comprehensive (loss)/income was $(12,498) and $0 for the three months ended June 30, 2024, and 2023 respectively and was $(12,501) and $2 for the six months ended June 30, 2024, and 2023 respectively, which related to its net loss and foreign currency translation (loss)/gain on cash holdings.
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The Company’s primary sources of liquidity to date have been capital contributions by its stockholders. As of June 30, 2024, the Company’s total assets, which consisted of cash and cash equivalents, were $26,762. The Company has not generated cash flows from operations, investing, or financing activities since inception other than for activities related to its formation and for the issuance of common stock. Smurfit Westrock did not have any liquidity and capital requirements or capital commitments prior to the close of the Combination. Subsequent to the completion of the Combination, management believes that the Company will be able to fund current and foreseeable liquidity needs with cash on hand and cash generated from operations.
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Critical Accounting Policies
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The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in conjunction with Smurfit Westrock’s Consolidated Financial Statements and their related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and their related notes for the fiscal year ended December 31, 2023 that were incorporated within the Registration Statement.* This discussion contains forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could differ materially from the results discussed below and elsewhere in this Quarterly Report on Form 10-Q. Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements.”*
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The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in
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On April 26, 2024, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form S-4 (file number 333-278185), as amended (as supplemented by the prospectus filed with the SEC on April 26, 2024, the “Registration Statement”), of Smurfit WestRock Limited, formerly known as Cepheidway Limited and re-registered as an Irish public limited company and renamed Smurfit Westrock plc (the “Company” or “Smurfit Westrock”), to register ordinary shares of $0.001 each in the capital of Smurfit Westrock (the “Smurfit Westrock Shares”) to be issued to the holders of shares of common stock of WestRock Company (“WestRock”), pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction Agreement”), among Smurfit Westrock, Smurfit Kappa Group plc (“Smurfit Kappa”), WestRock and Sun Merger Sub, LLC (“Merger Sub”) pursuant to which (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement under the Companies Act 2014 of Ireland (as amended) and (ii) Merger Sub merged with and into WestRock, (the “Merger” and, together with the Smurfit Kappa Share Exchange, the “Combination”). The Combination closed on July 5, 2024, subsequent to the fiscal quarter ended June 30, 2024 (the fiscal quarter to which this Quarterly Report on Form 10-Q relates).
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333-278185) which was declared effective on April 26, 2024 (as supplemented by the prospectus filed with the SEC on April 26, 2024,
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This Quarterly Report on Form 10-Q includes certain “forward-looking statements” (including within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) regarding, among other things, the plans, strategies, outcomes, and prospects, both business and financial, of Smurfit Westrock, the expected benefits of the completed Combination (including, but not limited to, synergies), and any other statements regarding the Company’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. Statements that are not historical facts, including statements about the beliefs and expectations of the management of the Company, are forward-looking statements. Words such as “may”, “will”, “could”, “should”, “would”, “anticipate”, “intend”, “estimate”, “project”, “plan”, “believe”, “expect”, “target”, “prospects”, “potential”, “commit”, “forecasts”, “aims”, “considered”, “likely”, “estimate” and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the control of the Company. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur. Actual results may differ materially from the current expectations of the Company depending upon a number of factors affecting its business, including risks associated with the integration and performance of the Company following the Combination.
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This Quarterly Report on Form 10-Q includes certain “forward-looking statements” (including within the meaning of Section 27A of
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Neither the Company nor any of its associates or directors, officers or advisers provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any such forward-looking statements will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules, the Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation and other applicable regulations), the Company is under no obligation, and the Company expressly disclaims any intention or obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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Company nor any of its associates or directors, officers or advisers provides any representation, assurance or guarantee that the
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Pursuant to the Transaction Agreement, each issued ordinary share, par value €0.001 per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for one ordinary share, par value $0.001 per share, of Smurfit Westrock (a “Smurfit Westrock Share”). On July 5, 2024, pursuant to a High Court-ordered transfer scheme of arrangement, the Company issued 261,094,836 ordinary shares to the former shareholders of Smurfit Kappa in exchange for shares in Smurfit Kappa. The Scheme is not a business combination under GAAP and does not give rise to any goodwill or change in accounting basis.
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Date each issued ordinary share, par value €0.001 per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for one
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Each share of common stock, par value $0.01 per share, of WestRock (the “WestRock Common Stock”), was converted into the right to receive one Smurfit Westrock Share and $5.00 in cash (the “Merger Consideration”) for an aggregate cash consideration of $1,291 million. On July 5, 2024, the Company issued 258,228,403 shares to the former shareholders of WestRock in exchange for the net assets of WestRock acquired through the Merger. Smurfit Kappa, not Smurfit Westrock, is the accounting acquirer of WestRock under GAAP.
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WestRock acquired through the Merger, each share of common stock, par value $0.01 per share, of WestRock (the “WestRock
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Upon completion of the Combination, Smurfit Kappa and WestRock each became wholly owned subsidiaries of Smurfit Westrock with Smurfit Kappa shareholders owning approximately 50.4% and WestRock shareholders owning approximately 49.6%. Prior to the closing of the Combination, Smurfit Westrock had no operations other than activities related to its formation and in anticipation of the combination with WestRock.
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Upon completion of the Combination, Smurfit Kappa and WestRock each became wholly owned subsidiaries of Smurfit Westrock
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Other than activities related to its formation and the combination with WestRock, the Company has not conducted any operations since its incorporation.
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closing of the Combination, Smurfit WestRock had no operations other than activities related to its formation and the Combination.
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As of June 30, 2024, Smurfit Westrock does not have any off-balance sheet arrangements.
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As of September 30, 2024, Smurfit Westrock did not have any off-balance sheet arrangements.
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The Company’s significant accounting policies are more fully described in “Note 1 Description of Business and Summary of Significant Accounting Policies” of the notes to the Consolidated Financial Statements of the Company included in the Registration Statement. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions. There have been no material changes during the six months ended June 30, 2024, to the Company’s significant accounting policies and estimates disclosed in the Registration Statement.
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policies are described in “Note 1. Description of Business and Summary of Significant Accounting Policies” in the Notes, and in the
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audited Consolidated Financial Statements and their related notes for the fiscal year ended December 31, 2023, and Smurfit Kappa’s
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audited Consolidated Financial Statements and their related notes for the fiscal year ended December 31, 2023, as well as the
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the “Registration Statement”). This discussion contains forward-looking statements that involve risks and uncertainties. Smurfit
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Westrock’s future results could differ materially from the results discussed below. Factors that could cause or contribute to such
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Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements" for additional information.
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the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) regarding, among other
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things, the plans, strategies, outcomes, and prospects, both business and financial, of Smurfit Westrock, the expected benefits of the
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completed Combination of Smurfit Kappa and WestRock Company (including, but not limited to, synergies), and any other statements
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regarding Smurfit Westrock’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows,
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or future events or performance. Statements that are not historical facts, including statements about the beliefs and expectations of the
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management of Smurfit Westrock, are forward-looking statements. Words such as “may”, “will”, “could”, “should”, “would”,
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“anticipate”, “intend”, “estimate”, “project”, “plan”, “believe”, “expect”, “target”, “prospects”, “potential”, “commit”, “forecasts”,
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“aims”, “considered”, “likely”, “estimate” and variations of these words and similar future or conditional expressions are intended to
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identify forward-looking statements but are not the exclusive means of identifying such statements. While the Company believes these
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expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve
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known and unknown risks and uncertainties, many of which are beyond the control of the Company. By their nature, forward-looking
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statements involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur.
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Actual results may differ materially from the current expectations of the Company depending upon a number of factors affecting its
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business, including risks associated with the integration and performance of the Company following the Combination. Risks,
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occurrence of the events expressed or implied in any such forward-looking statements will actually occur. You are cautioned not to
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place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including
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under the UK Listing Rules, the Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation and other applicable
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regulations), the Company is under no obligation, and the Company expressly disclaims any intention or obligation, to update or
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revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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ordinary share, par value $0.001 per share, of Smurfit Westrock (a “Smurfit Westrock Share”) and, in exchange for the net assets of
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Common Stock”), was converted into the right to receive one Smurfit Westrock Share and $5.00 in cash (the “Merger Consideration”)
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with Smurfit Kappa shareholders owning approximately 50.3% and WestRock shareholders owning approximately 49.7%. Prior to the
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business combination and does not give rise to any goodwill or adjustments to accounting basis.
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Notes of the 2023 Consolidated Financial Statements of Smurfit Kappa. There have been no material changes during the three months
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See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Notes to the Condensed Consolidated