Deutsche Bank Offers Three Company Priorities in Meeting with IP

 

According to a report this past week by Benzinga (Detriot, Mich., USA), Deutsche Bank hosted an investor meeting with International Paper (IP), Memphis, Tenn., senior leadership team members at its headquarters two weeks ago. The meeting focused on the strategic direction of the company, current fundamentals in the pulp, domestic containerboard, and box market, and opportunities for IP's consumer business.

Following are three key takeaways Deutsche Bank highlighted:

IP appears confident on Industrial Packing Fundamentals and is optimistic that demand will grow. "Our meetings with IP pointed to hundreds of millions of dollars in other inflationary costs incurred since the April 2013 price increase, as well as, margin loss on business that has been rebid over a three-year period without any attempts to increase prices," said Deutsche Bank.

 

IP remains focused on domestic containerboard and fluff pulp, but is also evaluating how some businesses fit within the company's portfolio. "This would include exposure where IP does not have an advantaged position. Using this criteria, it would appear that businesses such as (part of) Consumer Packaging and Brazil Industrial Packaging are under evaluation. We continue to think all options are on the table, including investing to make these businesses advantaged."

 

IP is also said to place a heavily emphasis on capital allocation strategies; paying down its debt remains a top priority. The company is expected to spend ~$1.5 billion in capital expenditures, including WY Fluff Pulp needs..