International Paper Company (NYSE:IP) Q1 2018 Earnings Conference Call Transcript
Apr 26, 2018 • 10:00 am ET
(Operator Instructions) Chris Manuel, Wells Fargo.
Wanted to touch on -- as I look across the main business here, it looks like one of the things that is, isn't there any longer is kind of the volume and the price per ton outlook that you used to provide in the back. Perhaps could you give us some color as to where you are in realization, some of the price in the containerboard and then the cellulosic fiber business, what's -- and if perhaps you can remind us, what yet you have announced out there yet, particularly on the pulp side, there seemingly is a new announcement every day there, but what IP's announced and how we might see that flow through over the balance of the year.
Chris, this is Mark. Thanks for the question. I'll just make an overall statement about the pricing movement across the businesses as you mentioned. As we've said, I think, on the last call, we expect and we're seeing what we would say is a normal realization pattern, both in the Industrial Packaging business and in the cellulose fibers business. But with some particulars, I'll ask Glen to try to cover a couple of the particulars that you asked.
Yes, Chris, Glen here. The way I would think about that is basically, what we shared back in January was 10% plus EBITDA growth and what we shared there, relative to pricing and volume was primarily the carryover of price increases that were implemented in 2017. You're absolutely correct, and as Mark said, we have had further announcements and we are implementing current prices. What we see there is those increases change our view, make it more confident in the 10% plus and we will see them rollout as scheduled through the remainder of the year as upside to our views. For example, the March 1 containerboard increase on boxes is a tailwind to the previous stated 10% plus.
Just a reminder on what I said about normal realization, in that box price example that Glenn just referenced, it's normal for us across segments and the mix of customers that we have to see two to three quarters of implementation until we get the full realization, and we expect that to be what plays out in this particularly increase.
This is incremental. That's where I was going with this as to what you got there. Second question I had, Mark, and I appreciate you don't want a lot of questions about Smurfit on the call, but could you just perhaps give us a sense of the decision tree that you worked through with respect to timing? I mean, obviously, this isn't a bid that has a shelf life forever, but kind of decision tree as to when you have them, until you have to make a decision and then get back to run -- what you're doing on a regular day-to-day basis about the overhang.
I appreciate the question, and as I mentioned at the start