International Paper at Baird Conference: Sustainable Shift Amid Challenges

On Tuesday, 11 November 2025, International Paper (NYSE:IP) presented at the Baird 55th Annual Global Industrial Conference, unveiling its strategic transformation into a 100% sustainable packaging business. While the company highlighted substantial growth in North America, it also acknowledged challenges in Europe due to market softness and geopolitical factors. CEO Andy Silvernail emphasized a commitment to customer focus and waste elimination, despite external pressures impacting both US and European markets.

Key Takeaways

• International Paper is transitioning to a fully sustainable packaging business following the sale of its cellulose fiber division.
• North American EBITDA increased by approximately 40%, driven by restructuring and reinvestment efforts.
• European operations face challenges from market overcapacity and geopolitical tensions.
• The company aims to achieve $3 billion in EBITDA this year, targeting $5 billion by 2027.
• External pressures such as tariffs and industrial recession impact market conditions.

Financial Results

• North American EBITDA rose from $1.7 billion to approximately $2.3 billion over the past year.
• The US market experienced a $250 million EBITDA headwind due to a downturn in market growth.
• International Paper is targeting $1.1 billion in cost reductions by 2027, with most savings expected in the US.
• The company anticipates generating $3 billion in EBITDA this year, slightly below previous forecasts due to revenue shortfalls.

Operational Updates

• International Paper has cut 3 million tons of capacity in North America, with significant reinvestment in remaining facilities.
• Corporate restructuring has reduced the Memphis center workforce from 2,700 to under 400 employees.
• European operations are undergoing restructuring, with several plant closures announced.
• The DS Smith acquisition in Europe presents integration challenges, with 60% of production consumed internally.

Future Outlook

• The divestiture of the global cellulose fiber business is expected to conclude soon.
• The US market is projected to remain flat next year, with slight growth anticipated.
• The European market is expected to grow by 1-2%, despite current challenges.

Q&A Highlights

• Tariffs have negatively impacted market conditions, particularly following key announcements.
• Packaging demand is closely tied to the housing market, which accounts for 10-20% of all packaging.
• The company has not provided guidance for 2026.
• Artificial intelligence is being used to enhance market intelligence and operational efficiency.

Readers interested in further details are encouraged to review the full transcript below.

Full transcript - Baird 55th Annual Global Industrial Conference:

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Thanks for joining us. Happy Veterans Day. Thanks for making it through all the logistics with the government shutdown, et cetera. My name is Gancho Punjabi. I’m the Packaging and Materials Equity Research Analyst. Over the next three days, we have 20 some-odd companies we’ll host through a fireside chat format, including some uncovered ones. That brings us to International Paper.

Pleasure.

International Paper, we have Andy Silvernail. Andy, I had the pleasure of hosting you last year at our conference. We also have the IR team, Michelle and Mandy as well. Thanks again for joining. I’m going to turn it over to Andy, and we’ll start with maybe an overview of International Paper. We’ll build a conversation. This is uncovered, so please send your questions to session2@rdwbeard.com. With that, Andy, welcome.

Andy Silvernail, CEO, International Paper: Good morning, everybody. It’s good to be here, and it’s always good to be back at Baird. Thank you for having me. I always reflect when I come back here. I think the first time I came here was 2000, no, sorry, it was 1994 or 1995. I’ve been coming a lot of years to the conference. I was an analyst back then, and I came a long time when I was CEO of IDEXX, and second time back with International Paper. It’s good to be back here. A little bit about International Paper. We always kind of laugh a little bit because as we think about our name, it actually is no longer really representative of who we are.

After the sale of our global cellulose fiber business, which should happen over the next few months to be executed, then we’ll be 100% a sustainable packaging business. We’ll be the largest sustainable packaging business in the world, about $24 billion in just packaging revenue. We are on a transformation journey. I started in May of last year. I had a perspective that, frankly, the markets had not really understood the core of the packaging business and the value of the packaging business. Today, we are about a 30% market share player in fiber-based packaging in North America and about a 20% player in fiber-based packaging in Europe. In both places, we are the largest player. In both places, in different ways, we are undergoing a very significant transformation.

That is one of moving from what I’ll call a production kind of focused, internally focused organization into a customer-driven organization where we are utilizing the methodology that I have really utilized throughout my career, which is operationalizing the 80/20 principle and actually lean principles also together as you really think about where is the point of impact for the customer, what drives value for the customer, and then really re-engineering your organization around those value flows. As we have launched this, we’ve moved very aggressively. In the United States, EBITDA is actually up about 40%. If you look at the trailing 12 months through the third quarter, EBITDA is up about 40% from about $1.7 billion to call it on a run rate about $2.3 billion, somewhere in that range. We have had a great run so far in North America.

At the same time, while facing huge headwinds in the marketplace, we came into this year with an expectation of market growth of somewhere north of a point of volume. The year is going to finish in the U.S. market probably down about 2. That three-point swing is worth somewhere north of $250 million of operating profit of EBITDA to our business. Even with that headwind, we have made that transformation. I would say there are really two things that are fundamental to that. The first one started before I joined the company. I’ll give Tom Hamic, who runs North America for us, a lot of credit, who had really the courage to aggressively reinvest back into our converting business.

On the front end of the business, he started that a little while before I came with a recognition that we had underinvested for a long period of time in the front end of the business. With that, a couple of things. First, massive changes in customer service. If you went back three years ago, even two years ago, we were probably in last place amongst the majors in terms of customer perception, how they viewed us in terms of our engagement with them. In a very short period of time, we have moved to a clear number one. That has been driven by attention to detail around on-time delivery, around quality, and very specifically around engagement with the customers. We dedicate teams to very specific customers. What comes out of that is innovation. That focus there.

The other part is really the investments back into the business, into the capability of converting. Because we had been a business that had grown up, for lack of a better term, in a production-focused world, we really thought of converting as a place where paper went versus that was the front end of the business, and that’s what the customer cared about. That change has been dramatic. Related to that also has been the really aggressive restructuring of the business. This is a business that had too much overcapacity, had capacity in the wrong places, was focused on the wrong markets, had underinvested in its business for a long period of time. I’ll give you a sense, just a couple of data points in North America that I think are really excellent proof points.

If you look at our spending in our mill system, so our spending in our mill system and our spending in our converting plants on a capital basis of the strategic assets we have kept. We have eliminated about, in total, 3 million tons of capacity we have taken out of the market, 3 million tons. We have shut over 10% of our converting capacity and reinvested back into that converting capacity. If you look at that investment, it is up 50% year on year into the strategic assets. In each mill and in each converting plant, the average mill and the average converting plant that we have decided to keep in our system is seeing a 50% increase in spending. That will continue for the next two years after this, that level of reinvestment back in the business.

We have seen the movement on the customer side, and the result of that is a turn in market share. We went from a business that has consistently given up market share over the last decade to a business that won market share last quarter. We have a very good line of sight for next quarter, this quarter that we are in, and through next year. We have seen that happen. The other part is we have radically restructured the cost base of the business. I talked about the 3 million tons of capacity that we have taken out. We have also exited non-strategic or poor return on capital businesses, both mills and on the front end of the business. We have completely decentralized our corporate entity in Memphis. When I joined, we had almost 2,700 people in Memphis who were what you would define as the center.

That number today is under 400. Not all those people left the company, but about 1,700 went back into the businesses, and the rest of them exited the business. While there are savings in that, that was not actually the goal. The goal was focus. If you were to ask me a singular thing, what do I care about? It is focus, relentless focus on the customer and getting a cost base right that allows us to reinvest back into that so we can win the business so then we can grow profitability. That is what has really happened in North America. Europe’s been a different story. We completed the acquisition of DS Smith. We finished that at the end of January. It has been painful. There is no other way to say it. Anything else would frankly be BS.

It’s been painful because the markets have been really tough. We knew the markets would be soft. We knew capacity was coming on. The underlying weakness in the European economy, the combination of tariffs and the war in Ukraine and real concerns in Europe around retirement has led to pretty aggressive savings rates increases. Demand has softened. With that demand, unlike what’s happened in North America, which has a much more solid supply-demand dynamic, in Europe that does not, we’ve seen pricing drop there also. The total is almost $300 million of year-over-year impact to profit in Europe. We are aggressively administering the same playbook. It comes in a little bit different flavor in Europe because of the structure in Europe. We are very aggressively restructuring Europe.

The things that I talked about in terms of the front end of the business in the United States, we’ve already announced a number of proposed changes. I use that language very carefully because you have to go through a consultation process. You have to go through good faith negotiations. You cannot show up and say, "I’ve got an answer, and here’s my number." It does not work like that in Europe. You have to go through the proper discussions. We are going through that. With that, we’ve already announced major changes in terms of, very similar, a decentralization and a deconstruction of a bunch of centralized structures and people and assets. We have already announced a number of closures. We are going to continue down that path in a very similar way. There has been a lot of activity.

It’s been a lot of ups and some downs along the way. We have enormous faith in the strategy that we have. I think if there’s a single message that I think is important for people to hear from us today, it is we believe in the strategy that we have. The ups and downs of what the markets have been, it’s not that I ignore them at all. I take serious messages around stock reactions. I think you’re a fool if you ignore the signals that are coming. That being said, when I think about the way to win in both of these businesses, and they’re very different in terms of market structures, how they sit in the world, how they compete, and we shouldn’t conflate them, right? We should not treat them exactly the same.

The playbooks are very similar in terms of eliminating waste, redeploying, focusing at the point of impact on customers, and then the return profiles that can come out of that. We are going to absolutely stick to our guns in terms of that strategy. Now we’re seeing it. It’s already paying huge dividends in North America. We have real faith that it will do the same in Europe.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. Session2@rdwbeard.com, or I’ll open it up to the floor at some point too. Thank you for that, Andy.

Andy Silvernail, CEO, International Paper: You bet.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: You joined. Obviously, a lot happened last year, right? When you joined, you had laid out an ambitious vision about the operating model, the 80/20 philosophy, and so on and so forth. You had DS Smith. You talked about investitures. You executed on some of those. Maybe we could disaggregate that. On the 80/20, how has that embedded the culture? How has that permeated?

Andy Silvernail, CEO, International Paper: It’s gone exceptionally well. I think the benefit of having done this for the last 15 years is I’ve seen the movie. A huge piece of this, right, is actually getting people, getting the organization to see the benefits of doing that. Anytime for any of you who have been through large-scale change, I kind of think of change as three pieces. It’s more of an exponential equation than anything. It comes down to focus first. It comes down to energy, which is really people and assets and investment. You have to catalyze. You absolutely have to catalyze that change. When you are engaged in 80/20, what 80/20 does is it’s incredible common sense about focusing on profit pools. That’s all it is. It’s focusing on what matters most and how to get at them. It is not commonly applied.

The reason that the tenets are not commonly applied, in my experience, is that they are hard. They are really hard. They force people to look at facts that you can no longer ignore. Those facts demand that you take action. You actually have to look at those facts and make a decision. You have to look at them and say, "Am I willing to keep a million tons of capacity that does not earn money, that has a $300 million capital call?

Am I willing to do that? When businesses do not look at things in that disaggregated fashion, it is very easy to make an argument, "Well, I have an export business, and I sell to the export business, and I need excess capacity." You create these stories in your mind about why you ought to do these things. When you get rid of those stories and you just look at economics and you go through a cycle, it does not earn its cost of capital. Why are we keeping it? Why are we going to spend $300 million when we can spend that money down the road at our Riverdale mill and build a lightweight paper machine that is going to earn a 20% return on capital when I am putting $300 million plus into something that is not going to return it? It forces you to really look honestly at things.

You have got to catalyze people to change. We have had a number of catalysts come our way, right? Whether it was people who had expressed some interest in potentially buying the company, the poor performance that had existed for a long period of time. There are lots of catalysts. You have got to get people to understand that it is in their best interest to win. You have got to start putting points on the board. I think in North America, those points have come on the board. I was just talking to an investor a moment ago who was out in our Atlanta complex last week, I think it was. We had a bunch of analysts and seen that just immense difference in Atlanta that has happened in just under a year.

Once you start getting that kind of momentum, people want to be part of it, right? They want to be part of that momentum. I am excited about that. I am excited to get that same momentum in Europe. The change is going well. Turnarounds are tough. Turnarounds are not for the meek, that is for sure. I feel very fortunate that I got the opportunity to do this at this stage of life where I have been a CEO for a dozen years beforehand. I am doing this for very different reasons than the first time around being CEO.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. Very good. The divestitures, just take us through what’s been happening in the company.

Andy Silvernail, CEO, International Paper: Yeah. So we’ve done a whole bunch of small divestitures that you guys don’t see, a whole bunch of assets that we have sold and exited, things that just frankly were not central to the focus of the organization. The biggest piece is the global cellulose fiber business, or GCF, as we call it. We’re in the final stages of that. It’s just we’re down to the basics of regulatory approval, right? Just getting the last little pieces of it. Our goal had been by the end of the year. I think we still have a shot at that. Unfortunately, we can’t make the regulators move too much faster. We can do the best we can. I feel confident we’ll get that done soon.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Any stranded costs and so on?

Andy Silvernail, CEO, International Paper: Yeah. There’s about $60 million of stranded cost. We talked about that. One of the problems, and I really appreciate having been a long time ago an equity analyst in your guys’ shoes, one of the issues when you go through something like this, a transformation, is it’s just muddy, right? As you’re following, looking at the data, it’s just messy. It’s like, "Okay, well, accelerated depreciation is how much? And what do real earnings look like? How does this?" We’re investing so aggressively back in the business. What are the real cash flows, sustainable cash flows of the business, all those things? As those things start to clear themselves up, one of those was around stranded cost. What it did was it made the GCF business look like it was super profitable in the third quarter.

It brought down the other pieces when it’s not $60 million of stranded cost. It’s covered in a TSA or transition services agreement that we’ll have in place. We’ll take it out of the organization. That’ll be done over the next year.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. DS Smith, obviously, you mentioned Europe, big cover. That’s true for most companies I cover.

Andy Silvernail, CEO, International Paper: Yeah.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: What about asset quality positioning? Where are you in terms of implementing 80/20 sort of in that asset base?

Andy Silvernail, CEO, International Paper: Asset quality front end on the boxplant side, what I would say is most of the boxplant system is actually in really good shape. It did not have the systemic underinvestment that the North American boxplant system did. That being said, it’s a little bit different. What I just said holds true when you’re around most of the metro areas. As you get into what I’ll call kind of singular assets that are in more distributed areas, that tends to be less true. It tends to be less true because the economics aren’t as attractive. That spiral of reinvestment, like is it positive or is it negative, you get some of that. You have a little bit of that. Generally, the boxplant assets have been well invested in. The mill system construct is very different than the North American mill construct.

About 60% of what we make for paper, we consume ourselves. We buy about 40% of our own paper. It is very different in the U.S. In the U.S., we are 100% integrated from a paper perspective. We have about 40% of the paper that we make going out into the open market into things that are not in the box business for us. The work that we are doing and the things that we are really looking at are integration rates, see-through return on capital, so kind of how you think across the entire system, and then strategic versus non-strategic assets. Again, the mill system is well invested in. Where we sit on the cost curve is not as advantageous as we are in the U.S.

In the U.S., you’d make the argument as a whole, we’re certainly in the top third, maybe even the top quartile in terms of performance positioning in the U.S. We’re more in the middle in Europe. A lot of that has to do with what I’ll call the non-strategic side of the mill system. The parts that are in the box system are more aligned. That’s where investment has got to go to drive down in terms of a total cost position.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. You said 10% cut in North American converting capacity, right?

Andy Silvernail, CEO, International Paper: We took out, I should say, we took out 10% of the, we have taken out a little bit more than 10% of the boxplants. We actually have not cut capacity, which is the interesting part, because we have improved overall capacity capability throughout the rest of the system.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Optimization. What have you done in Europe?

Andy Silvernail, CEO, International Paper: So far, we have announced a number of things in the U.K. and a number of other countries to go through the process. We have not been specific about numbers like that because we really can’t be at this stage.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. If we switch to the operating conditions by region, what changed in North America this year relative to your boxplant?

Andy Silvernail, CEO, International Paper: Yeah. You always want to avoid getting yourself in trouble in these things. But frankly, when the whole tariff discussion started, you just saw an absolute tick down in the market. So when the first noise of it started before Liberation Day was announced, we saw it in our numbers. We saw a tick down. And then after Liberation Day, you saw another major tick down. The correlation between the two is undeniable. I think that’s just reality. If you look at the major packaged goods companies and you look at their volume, it looks exactly like what’s happened there. I think a part of it is pressure on the average consumer, right?

As we see the stock market boom and we see all the kind of headline numbers, I think we all know that the reality is the average consumer, even the average plus consumer, is not faring very well right now. You’re seeing them trade down. You’re seeing there was a great article in the Journal last week or two weeks ago around consumers and how they’re stretching out their use of goods. While we do not send our goods across borders, the things that go across borders that are packed in the US or are packed in Europe that are crossing over, that velocity has come down, as we all know, pretty dramatically. I am hopeful that a bunch of the structural issues that are holding the markets down, but we can’t bank on that.

Because if you look in the U.S. and you say, "We got a really good news story in the U.S. with a bunch of headwinds that are actually enormous." You think about that. You think about the trade and tariffs. You think about where housing is. Housing accounts for somewhere between 10% and 20% of all packaging. It flows through that portion of it. You think about what has happened with housing. You think about the impact of trade and tariffs. If you look at my old world from IDEXX, the industrial world, which has really been in an industrial recession here for a while, right? You are just starting to see positive comps in terms of year-over-year orders in that world.

Those three things, while they’ve been painful, actually make me really excited about what’s going to happen in the U.S. because I see all of those as tailwinds as we move forward at some point. When they happen, I don’t know. I think they’re all interrelated. It gives me a very positive outlook in the U.S. In Europe, I think we have to face the fact that it’s just going to be longer. It just is. The things that you’re dealing with are things that you absolutely have no control over and the markets can influence. Whether you’re dealing with trade and tariffs, don’t know. The war in Ukraine, God, someone tell me, I have no idea. Those are things that are hard to get your head around.

With the structural overcapacity in Europe, as those things have come into play, that’s what we’re dealing with. The good news in Europe, if you want to say, "Hey, where is the good news?" Our positioning is excellent, right? Our competitive positioning is excellent, number one, which I think is great. Our ability to take cost out, it takes longer and it’s more expensive in Europe, but you still love the ROI. It’s not 100% ROI like you have in the U.S., but it’s still a 50% ROI. I think all of us would take a 50% ROI any day. You have to go through it. It just takes time. I feel really good about how those things play out in terms of the positioning of Europe.

The other part is, look, the bottom quartile in Europe in terms of cost position, they are under cash cost at this stage, right? You are now seeing people who are radically cutting capital, doing shift shutdowns, all the things to delay actually closing things. You are seeing all those things happen. I am not naive enough to believe that there are going to be mass closures in Europe. I do not believe that. There are too many forces, family-owned, state sponsorship, you name it, that will hold on longer than anybody wants it to. I think we should face that reality. Frankly, anyone who is waiting for the market in the U.S. or in Europe to bail you out, I just think that is a mistake. I think you have to control what you can control.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: You haven’t given 2026 guidance yet, right?

Andy Silvernail, CEO, International Paper: No.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: You can change that if you’d like.

Andy Silvernail, CEO, International Paper: Right. Yeah.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: You did talk about a $600 million sort of EBITDA improvement. Can you just expand on that?

Andy Silvernail, CEO, International Paper: Yeah. Let me walk through it. What we did was obviously we talked about finishing this year and we talked about 2027. We really debated whether or not we wanted to talk specifically about 2026 guidance. We decided to not go all the way with it for a couple of reasons. One of the biggest ones is there are a number of things that we know are going to change between now and when we have fourth quarter announcements, and the fourth quarter earnings. We thought, "Boy, it’s kind of there’s no sense in doing that. Let’s be sensible about that." What we did was we talked about what we know is in the bag, so to speak, that has been executed and is rolling over into next year. That’s about $600 million worth of benefits in total.

That kind of gets you to about $3.6 billion. Now you’re going to have inflation. You’re going to have kind of $200 million-$300 million of inflation. Your starting point, call your starting point $3.3 billion. We believe that we can get to $5 billion by 2027. What we’ve talked about is what’s that bridge? How do you think about that bridge? I talked about $300 million of inflation. You’re going to have another $300 million in the following year, so call that in the neighborhood of $600 million of inflation. Where do you find the rest of it? Where does that all come from? You’ve got a little over, you got about $1.1 billion of cost out that we’ve targeted from here through to impact through 2027.

That’s probably 60-40, 65-35 U.S. versus Europe in terms of that cost coming out. That’s structural cost and it’s productivity. It’s really a mix of those two things. We have an assumption that the U.S. will get to what we believe is updated mid-cycle pricing, which is, call it, somewhere between $20 and $40 a ton. So call that, just pick a middle, call it $300 million. And another couple hundred million in pricing in Europe, which is way down on its historical basis. Call it plus or minus about $500 million or maybe slightly more in terms of pricing. You’ve got about another $500 million that comes out of just organic growth. If I think about organic growth in the U.S., we think the U.S. market next year is soft. We think that’s a flattish market in terms of volume.

We think we will grow a couple points above that. We think Europe is probably one to two. I think that is a pretty good number. Those two things combined, you kind of compound that over a couple of years, that is worth about $500,000,000 and then about a little over $1,000,000,000 in cost out.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. The targets that you changed as per your three key slide deck on 2027, that was just the GCF divestiture or?

Andy Silvernail, CEO, International Paper: No, no. When you really looked at 2027 and you look at the market forces, we have lost, as I talked about it in the pieces, but in total, it is about $500,000,000, actually it is north of $500,000,000 of profit impact this year, right? We had guided $3.1 billion-$3.6 billion for the packaging business itself in terms of EBITDA back in March. We are going to come in roughly around $3 billion, we believe we gave that as we talked about the fourth quarter with a $500,000,000 headwind of the market difference. The reality is you are not going to make that up, right? We had guided $5.5 billion-$6 billion in 2027. We talked about $5 billion because it is going to take time to make up that loss from this year.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. All right. In terms of the earnings profile, obviously last year about $0.13 or so, just reading off consensus numbers. This year about $0.58. And then next year the street has a nice little uptick. I assume that’s cost related, right?

Andy Silvernail, CEO, International Paper: Yeah. It is everything I just walked you through.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Yeah. Okay. All right. In terms of the stock price, obviously it’s been a tough year for the stock. I hosted you last year. I brought up the point that there’s been about 50% drawdowns in your stock and it’s almost back to that level versus the peak of last year. What is the perfect operating environment for IP?

Andy Silvernail, CEO, International Paper: Perfect operating environment. You know, a relatively that kind of classic Goldilocks benign operating environment is a place where that works really well for us. In that kind of 1-1.5% US volume growth, Europe is going to be a little bit better because they’re much further ahead on materials conversion moving from plastics to fibers. That trend is going to continue and accelerate in Europe. That will probably be a little bit better over time. That’s a great environment. In an environment like that, you’re able to get volume growth. It’s not so hot that the market gets out of control, right? You’re able to drive productivity as you reinvest back into the business.

In that kind of environment, this is a business that can grow, call it a point or a point and a half on the basis, win a little bit of market share. Historically, this is a business that’s done a great job of passing through inflation, done a terrific job of doing that. If you can drive a point of productivity, that turns into, if you just kind of think about that math, that turns into high single-digit EBITDA growth over time. The ability to really drive return on capital through that, that’s a great environment to be in.

Gancho Punjabi, Packaging and Materials Equity Research Analyst, Baird: Okay. Perfect. In the last minute or so, we’re asking all our companies about artificial intelligence and implementation. I get the irony about packaging and materials analysts asking that question, but anything you’d like to share on that?

Andy Silvernail, CEO, International Paper: Yeah. It’s actually fantastic. Look, I think of it a lot like when I was talking about being an analyst, right? That was the internet boom. And I graduated from business school as everything was kind of hot as hell. Then it blew up over two years. Everyone said it was going to change the world. They were right. It just took longer than they thought. I think the difference here is the practical application is happening way faster than people thought two or three years ago. Whether you see it in market intelligence, in pricing, in variation reduction in machinery, supply chain analytics, service and support, I mean, literally, there is not a place that it isn’t showing up in one way or another.

I think the key that nobody has proven yet is just how much real productivity is going to show up on the bottom line. I’m a believer that it will be real. I don’t think it’s going to be 10% and 20% and numbers like that. I think what it’s going to allow you to do is get back on a track of a point or two of productivity every year. I mean, if you go back and you really think about a huge value creation, it’s your ability to grow above market a little bit and your ability to drive a little bit of net productivity, that.

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