Good morning. Thank you for standing by. Welcome to Sylvamo's Q1 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, you will have an opportunity to ask questions. To ask a question, please press 1 then 0 on your telephone keypad. To withdraw your question, please press 1 then 0 again. As a reminder, your conference is being recorded. I would now like to turn the call over to Hans Bjorkman, Vice President, Investor Relations. Sir, the floor is yours.
Thanks, Greg. Good morning, and thank you for joining our call today. 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 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-U.S. GAAP financial information. Reconciliations of those figures to U.S. GAAP financial measures are available in the appendix. Our website also contains copies of the Q1 earnings press release, as well as today's presentation. With that, I'll turn the call over to you, Jean-Michel.
Thanks, Hans. Good morning, and thank you for joining our call. I'll begin my comments on Slide 4. Our Q1 results were strong and in line with our expectation. Adjusted operating earnings per share were $2.51, and we achieved $208 million in adjusted EBITDA with a 22% margin. We maintain a strong financial position with net debt at 1.1 times adjusted EBITDA. Price and mix, as well as input transportation costs, were favorable to our outlook. Our volume reflected continued inventory destocking and a worse-than-expected seasonal demand slowdown in Latin America. Our recently acquired Nymölla mill posted a strong quarter. The ramp-up of cost saving from the recent pulp mill modernization are on schedule. We are also pleased with our progress on other operational and commercial synergies.
We returned $21 million in dividends and share repurchases to share owners in the Q1. I am now on Slide 5. We remain committed to operating as a sustainable corporation that creates profit for share owners while protecting the environment and improving the lives of those with whom we interact. With that in mind, since the spin-off, we've been pursuing the formal approval of our 2030 goals for greenhouse gas emissions. We are pleased to announce that we received formal approval of our 2030 emission reduction goals from the Science Based Targets initiative. SBTI acknowledge that our commitment to reduce our absolute Scope 1, 2, and 3 emissions by about 28% is consistent with a well below 2-degree scenario. As the slide shows, our own goal is even more ambitious.
We're committed to a 35% reduction in total greenhouse gas emissions relative to our 2019 baseline. Slide 6 highlights our key performance metrics for the Q1. We achieved sales of $959 million, up 3% versus the Q4. We generated adjusted EBITDA of $208 million at more than 20% versus the Q4. As expected, free cash flow was lower than the Q4, reflecting an increase in mill inventories in preparation for our 2nd-quarter plant maintenance outages and the payment of annual incentive compensation. We posted adjusted operating earnings of $2.51 per share, an 87% increase over last year Q1. These strong performances demonstrate our ability to continue to deliver on our investment thesis. Now, John will discuss our Q1 performance in more detail. John?
Thank you, Jean-Michel. Good morning, everyone, and thank you for joining our call. Let's turn to Slide 7 to review our Q1 adjusted EBITDA bridge. As Jean-Michel mentioned, we posted a solid quarter, generating $208 million in EBITDA, up $38 million versus the Q4 and in line with our guidance. Our EBITDA margin was strong also at 22%, 400 basis points better than the Q4. Price and mix decreased by $8 million, driven by lower market pulp prices in all regions, which accounted for the majority of the decrease. In Europe, we reduced our paper prices as we rolled back Saillat's energy surcharge announced in the Q4. Paper price and mix were stable in the Americas. Volume decreased by $34 million.
In addition to the normal seasonal slowdown in Latin America, orders for the Brazilian government textbook program were delayed beyond the Q1. Volumes in Europe and North America continued to be impacted by channel inventory corrections, particularly in the commercial printing segment. Operations and costs improved by $18 million, primarily due to lower accruals for the annual incentive compensation and favorable foreign exchange in Brazil. The ops and cost improvements occurred despite taking about 60,000 tons of lack of order downtime in response to our customers' inventory adjustments. About half of the lack of order downtime was taken in Europe and the other half in North America. We did not conduct any planned maintenance outages in the Q1, which resulted in $31 million favorable variance. Input and transportation costs improved by $14 million, reflecting favorable energy and distribution cost trends.
Lastly, our Nymölla mill added $17 million of adjusted EBITDA and is performing very well since we closed on the acquisition at the beginning of the year. Let's move to Slide 8 and talk about the uncoated freesheet industry conditions. In the Q1, significant inventory destocking continued in all regions, resulting in lower shipments in Europe and North America. We expect inventory corrections to continue in the Q2 and be completed in the Q3. With respect to demand, the Q1 is always the seasonally weakest quarter in Latin America. Demand was also adversely impacted by delay of the annual Brazilian government textbook program. This was a material shift since the education segment accounts for about one-third of Brazil uncoated freesheet demand. These orders have started in the Q2.
The cut-size segment, which accounts for about 40% of the uncoated freesheet market in North America, has been the most resilient segment of uncoated freesheet over the last few quarters as demand has increased with more workers returning to the office. The cut-size segment didn't see an increase in inventories in North America, there was no need to destock. As we expected, uncoated freesheet imports receded to more normal levels after peaking last October. We anticipate Q2 imports to return to normal levels, driven by the adequate domestic supply and the reopening of the Chinese economy. In the Q1, two competitors announced permanent uncoated freesheet capacity shutdowns. In North America, 240,000 tons in North Carolina was shut down. In Europe, a machine in Austria will be shut down as well.
We expect these capacity reductions to favorably impact operating rates. In North America, we have already secured more than 60,000 incremental tons on an annual basis. Let's go to Slide 9 to look at imports into Europe and North America. Driven by domestic supply shortages in the first half of 2022 and lower Chinese demand due to the COVID lockdown, Indonesian exports were diverted from China into our regions and increased steadily until peaking in October of 2022. As we mentioned last quarter, we expected that imports had already peaked and would return to more normal levels. As you can see from the chart, imports have dropped by about half in Europe and two-thirds in North America and are back to normal levels. Moving to Slide 10. Let's discuss our Q2 outlook.
We expect to deliver an adjusted EBITDA of $115 million-$125 million, which reflects a $59 million increase in planned maintenance outage expense this quarter. We project price and mix of decrease by $45 million-$50 million, reflecting the realization of prior price decreases for pulp in all regions and paper in Europe, as well as less favorable product mix. Keep in mind that pulp accounts for 10% of our sales on average 100,000 tons per quarter. We expect volume to improve by $10 million-$15 million, reflecting seasonally stronger volume in Latin America. We project operations and cost to increase by $10 million-$15 million due to unabsorbed fixed costs as we continue to match supply to our customers' needs.
We expect input and transportation costs to improve by $15 million-$20 million, largely on favorable trends in costs for natural gas, chemicals, and transportation. Our adjusted operating earnings should be about $0.90-$1.10 per share, including about $1 per share of higher planned outage expense. Slide 11 shows our planned maintenance outage schedule for the quarter, with two-thirds of the total annual cost scheduled for the Q2. During this quarter, we'll conduct outages in all three regions. After this quarter, the remaining planned outage expenses will largely occur in the Q4. I'm on Slide 12, which shows again our capital allocation framework and how we think about allocating cash to drive shareowner value.
As we maintain our much stronger financial position with about $1 billion of gross debt, we are putting a greater emphasis on returning cash to shareowners and reinvesting in our business to grow our earnings and generate cash. We remain a cash flow story. We leverage our strengths to drive high return on invested capital and generate free cash flow. We use that cash to increase shareowner value by maintaining a strong financial position, returning more cash to shareowners, and reinvesting in our business. Let's flip to Slide 13 and review what we have done to enable us to increase the limits on cash returns to shareowners. In March, we repurchased $360 million of our outstanding notes in order to eliminate the covenant that limited cash returns to $90 million per year.
We replaced these notes with a new $300 million Term Loan A and short-term debt. This also allowed us to reduce our interest expense on $300 million of debt from 7% to 6%, and we locked this rate in by executing 5-year interest rate swaps. The last step to increasing the limits on cash returns is to address the credit agreement covenant that restricts annual cash returns to $90 million. When we approach that limit later this year, we expect to deposit $60 million into an escrow account and maintain $225 million in liquidity. These actions will enable us to return more than $90 million. Returning more cash to our shareowners remains a priority. I'll wrap up my comments on Slide 14. We are also reinvesting in our assets to strengthen our business.
This year, we plan to invest $175 million-$190 million of nondiscretionary capital. We are committed to ensuring safe operations and compliance with all laws and regulations. We need to ensure reliable operations to remain the supplier of choice to our customers. In order to remain an investment of choice, we need to maintain our low-cost positions and ensure availability of low-cost fiber in Brazil. We also expect to invest $35 million-$45 million in cost reduction and strategic capital at our flagship mills to improve our low-cost position and ensure the long-term competitiveness of these mills. This slide shows two examples of attractive cost reduction projects. One in Eastover to reduce chemical consumption and one at Luís Antônio to increase energy efficiency. Both projects are forecasted to generate internal rate of returns over 20%. With that, Jean-Michel, I'll turn it back to you.
Thanks, John. I'm now on Slide 15. We have revised our full-year outlook. We now project adjusted EBITDA of $720 million-$770 million and free cash flow of $250 million-$280 million. These new projections reflect the impact of previously announced pulp price decreases, our updated views on second half pulp and paper pricing and volume, and favorable input and transportation costs. Sylvamo remains a cash flow story. Our revised outlook indicates continued strong free cash flow of about $6-$7 per share, which will allow us to return more cash to shareowners. Slide 16, please. We remain confident in our ability to create shareowner value and remain committed to our investment thesis. We will continue to leverage our strengths to drive high return on invested capital and generate cash. We will use that cash to maximize shareowner value.
Our three-pronged strategy of commercial excellence, operational excellence, and financial discipline will enable us to continue creating long-term value for shareowners. We're grateful for our talented and engaged colleagues and their dedication to working safely, delivering on customer commitment, and creating value for our shareowners. We're also grateful for our customers. Without their continued support and partnership, we could not succeed. With that, I'll turn the call back to Hans.
Thanks, Jean-Michel, and thank you, John. Okay, Greg, we're now ready to take questions.
Okay. Ladies and gentlemen, if you'd like to ask a question, please press one then zero on your telephone keypad. To withdraw your question, please press one then zero again. We do ask that you limit yourself to 1 question and 1 follow-up question. 1 moment, please, for your first question. Your first question comes from the line of George Staphos from Bank of America. Please go ahead.
Congratulations on the progress. Thanks for all the details. My 2 questions, one's gonna be on the value return and then also just on the outlook. In terms of the value return and the $60 million in escrow and the $225 million in liquidity, John, did you say you will do that or you can do that? I just wanna make sure that we're clear on, you know, expectations over the course of the year, whether, you know, what your intention is there. On the pricing, you know, impact in your outlook, you were very explicit in saying that you had reflected in your 2Q guidance the effect of pulp pricing across all regions. Paper in Europe, there was no explicit mention of pricing elsewhere in other regions. You said that you have incorporated your views on paper pricing in the second half. Recognizing that pricing discussion is obviously very challenging at times on an open mic conversation, what do you want us to take away about your paper pricing expectations, the timing of which well, across all the regions? Thanks, guys.
Hey, George, good morning, and thanks for your question. In terms of the value question you had. Our top priority we had going into this year was to increase cash returns to our shareowners. We turned $90 million last year, and we intend to substantially increase that this year. To be able to do that, we do have to address the bank covenants now that we've gotten rid of or, let's say, we've eliminated the bond. As we approach $90 million, the intent would be to put $60 million into an escrow so that we can return more going forward. Okay? I think the second question was around pricing. Let me give you some color around the outlook.
As we talk about and look at our Q1 pricing, we did roll back energy surcharge in Europe, and that was really just associated with this Saillat mill volume because we, of course, we didn't have the Nymölla mill last October. We did increase prices in Brazil in the Q1. Prices in the Americas, the price mix, was constant. It was flat going in. Our outlook, the $720 million-$770 million, that we revised our outlook does incorporate what, you know, we've seen already and would expect in terms of both pulp prices and paper prices across the region. Yeah, that's all I can really say about that.
Yeah. Hi, George. Thanks for joining the call.
Thank you.
What I would just add, without getting on projections is, your question was towards Americas and, North America, like Latam. We have not seen any price decrease. You know, our prices are flat.
Okay. I will turn it over and come back. Thank you.
Thank you.
Thank you.
If there are any additional questions, please press one then zero. Once again, if you have a question, please press one then zero. We'll go back to the line of George Staphos. Please go ahead.
Hey, guys. Related to that question, can you remind us how much of your volume is impacted by the pricing that we might see in the published indices, again, specifically within North America, and then related, you know, across the other regions if there is volume, and if so, roughly how much is tied to indices? The second question for this turn, you know, you did, from our vantage point, a bit better than expected in overall blended realizations in Europe. Yet, for what it's worth, and it's our model, it's not your model, results were a little bit off on our forecasts in Europe. Were there some operating costs that clipped you there? Similarly, North America, you operated very well from what we can see. Any call-outs there beyond what you've already shared in the waterfall?
Just one thing on indexes. We have no prices linked to index. We're not like market pulp big guys. Our pulp customers are mostly small, medium regional customers, no index, and our paper price have no index relation. That doesn't impact us. The second question was on European cost. I think there was two things. One is we had some unabsorbed fixed cost because we took, as we mentioned, some economical downtime in Europe, so that impacting our cost, that was probably some of the cost about it. John, anything else? I think that was the main reason.
The only other thing we had is we had a couple reliability issues.
Yeah
At the Nymölla mill. Nothing really major, but that did impact us.
Thank you. I'll turn it over.
Your next question comes from the line of Paul Quinn from RBC Capital Markets. Please go ahead.
Yeah, thanks very much. Morning, guys. Just on the 60,000 tons block order downtime, what's your level of confidence that this destocking is gonna end at the end of Q2 here, and that, you know, your back half of the year should be full on?
Good morning, Paul. Actually, we believe that destocking will not end in the Q2. It'll continue into the Q3, both in North America and in Europe. This is what we're seeing from our customers. However, we're really confident that it will be completed by the end of the Q3. We are seeing and expect, you know, the second half of our outlook is stronger than the first half because we do expect increased volumes across all our regions. One is, driven by the destocking is gonna work its way through by the Q3. In North America, we picked up, you know, additional tons from the mill that shut down in North Carolina, which is 60,000 tons. In Brazil, it's seasonally always stronger in the second half. On top of that, this book, the government book issue, was a significant issue. It's not unusual for when there's a change in government for them not to release the school book publishing contract. They were a little late on that, but actually, we started seeing orders in the Q2, but we'll have to see the bulk of that in the Q3, which will make our Brazilian shipments stronger, be even seasonally stronger than we've seen in the past.
Okay. Then just maybe as a follow-up to that, how do you determine between destocking and sort of secular decline in uncoated freesheet?
Yeah. Hi Paul. Thanks for joining the call. It's always a key question. The way I would mention it is, it's difficult to separate it. We do attribute from our customers and what we see on the end use information that helped us. What we can say is, coming from our customers, most of them are still talking about some destocking going on, but clearly less than it was in Q1. From the end use, probably the only thing we have is the commercial printing. Commercial printing, I would say especially also the marketing budget of big companies with the uncertainty of the economy, have a tendency to be reduced on advertising, and that reduction on advertising budget is impacting direct mail. From the end use segment, the only trend we can see is the direct mail. The rest of it, we're not seeing something significant.
We're mostly seeing destocking.
Yeah. Paul, let me add to that.
Yeah.
I think there is... Because sometimes in the reported industry statistics can be confusing when you look at how significant demand declined that was reported in the Q4. One thing to understand, like when the Pulp and Paper Products Council, for example, the calculation of demand, it is apparent demand. What they use to calculate that is domestic shipments minus exports plus imports. In both North America and also in Europe, imports can have a significant impact on this apparent demand. Because imports increased significantly in the Q4, demand was somewhat inflated in terms of reported numbers. The exports receded in the first half, the demand decline numbers looked pretty severe. If you look at the 6 months, the last 6 months, essentially, averages to...
You get in North America, for example, demand was down 3% for uncoated freesheet. That's how we're kind of looking at it. One of it is you got to look at kind of through the noise. We have seen, we believe, some demand decline is driven from the economy, the slowing of the economy. Particularly, we see it in envelopes, and we've seen that in lower spending on direct mail. For example, as I talked about cut size being resilient, if you look at the past six months, cut size is actually up 2%, and that's because more people are returning back to the offices. I hope that adds a little bit more color to the demand situation.
Yeah. No, that's a great point. Thanks very much, John. Maybe I'll just squeak in a bonus question here. Just the maintenance variant, really kind of sort of by surprise, you know, sort of big Q2 and Q4 spend. Do you anticipate that sort of same sort of pattern in 2024 as well?
There are two things into that, and we try to allocate when we give our numbers. Maintenance outages are due to regulatory obligations and sometimes to timing with the weather. In some mills, you don't want to do it when you're close to a risk of hurricane season or strong cold season when you are in Ticonderoga, New York. You have also Saillat, which is maybe a little bit troubling because we are not on a 12-month outage rotation at Saillat. We're on an 18-month, sorry. Eighteen-months rotation, which mean you have 2 years with about $20 million negative impact, and you've got 1 year with 0 in maintenance. Last year, we had 0. This year, we have an annual outage, which is $20 million, and we do it according to regulatory. We usually always have strong seasons, which are second and Q4 when you look at the history of outage, as I mentioned, due to regulatory and weather.
All right. Thanks very much. Best of luck.
Thank you.
Thank you, Paul.
Your next question comes from the line of Jonathon Luft from Eagle Capital Partners. Please go ahead.
Hey, guys. Thanks for taking my question. I was hoping you could flesh out a little bit, the capacity closures and what you're seeing and how you were able to, take some of that share. Was it competitively built? Was it something that, the customers came to you? That's my first question.
Yeah. Jonathon, thanks for your question, and thanks for joining the call. You know, we were, well, we are working with actually existing customers, for a lot of these orders in terms of, moving some of that business that they had, they had sourced with the mill that was closing, back to us. We wanted to be, we want to be selective. We want to make sure that we've got, attractive business. Our sales teams, targeted those particular businesses that were attractive to us.
Great. The closure in Europe, that you mentioned, did that happen yet or is that to come? Is there a similar opportunity to take some volume there?
It, the short answer is no, it has not happened yet. They have yet to announce exactly when the timing of that shutdown.
Okay.
We would expect that, like anything, if there's opportunity there to pick up business, yes, Jonathon, we would target that.
Thanks. Just my last question, just on the guidance. In looking at Slide 15, when talking about the second half, you talk about favorable input and transportation costs, and I was hoping you could flesh that out. Are those related to items that might have annual contracts? Is it, you know, something that maybe, you know, will benefit you going into 2024? Or is it really, you know, spot contracts that you're seeing lower? Just what's going on there?
Well, Jonathon, it's really kind of a mix. Most of it is driven by spot prices in terms of, you know, like fuel, like fuel surcharges for our freight. We're seeing it also in terms of energy as you see gas coming down. That'll move, you know, maybe with somewhat of a lag sometimes. In fact, what we really haven't seen yet is chemical costs going down, but we expect that in the future to go down because that also is driven by the energy markets. That's a little bit delayed, but we expect to see that in the second half. Yes, all those costs for the most part will carry on into hopefully into the next year. Now having said all that, cost is still extremely high compared to where they were a couple of years ago. Also that's supportive of pricing.
Okay. Thank you very much. I'll turn it over.
Next, we'll go back to the line of George Staphos. Please go ahead.
Hi, guys. A couple of questions here. First of all, having owned Nymölla for a couple of months now, you know, what are your learnings with it? You said you had some reliability issues. You said it wasn't significant, but, what was behind that as well? kind of what's, what you've learned with Nymölla? What was the reliability? You know, kind of what's the horizon opportunity there? That'd be sort of the multipart, question 1. just as we think about, you know, again, destock and consumption and the like, are you seeing better trends or worse trends depending on whether we're talking about retail versus commercial print versus distribution? My sense is probably your, your big box retail customers are doing okay in terms of demand because you said cut-size, there's not really any destocking to go through.
If you could give us some additional... One, affirm that or correct that, but two, give us some color there. Last, I took three here. You know, the coated paper markets have been perhaps even more challenged based on the operating metrics. Are you seeing any effect? Obviously, it really wouldn't hit you that much in cut-size, but are you seeing any effect of that coated paper in your commercial print markets and uncoated freesheet, or is there something that you've embedded in your second half guidance for that potential risk or... If not, why not? Thank you, guys.
I'll take the first one, and then maybe we'll tag team. Jean-Michel will take the second question, maybe your third question too. Let me just say from a Nymölla perspective, we've been very pleased with the performance of that mill. Very happy with the asset, with the people that we have. This issue that I talked about in terms of the reliability is not atypical. I mean, we have that in our other mills that will crop up over time. This just happened to be impact our energy consumption and increased our costs. That issue is behind us. The mill is performing very well. You know, we said in our, in our presentation that the pulp mill upgrades that were completed prior to the acquisition, we're seeing those benefits now that the ramp-up curve is actually going better than expected. All in all, we're very pleased with the performance of the Nymölla mill and really believe that's just gonna be a great, a great asset, great business for us in Europe.
Yeah. Concerning destocking, as you mentioned it, you're correct. We're seeing it much more in the commercial printing, which impact merchants, than we're seeing it on the retail and cut-size. Cut-size has been more resilient, as John mentioned it. We're seeing differences. By the way, we're seeing some of our customers which are telling us it is going much better. They've done the biggest destocking they needed to. That's why we plan to continue to have some in Q2, maybe less than Q1, and think by Q3 it would be gone. Effect in coated paper, it's very, very small. We sometimes see it on some of our high-end products from Nymölla and Saillat, but it is not significant to us.
Thanks, Jean-Michel. Thanks, John. Good luck in the quarter.
Thank you.
Thank you.
Thank you.
Once again, if you have a question, please press one then zero. You have a question from the line of David Steinhardt from Contrarian Capital. Please go ahead.
Hey guys, can you talk about the new additional directors that came on through the cooperation agreement with Atlas? How they have impacted the board? How they might have been helpful so far? Any thoughts that you might have about the company as you approach your important two-year anniversary?
Thanks for the question, and thanks for joining the call. First of all, let me tell you it's a good experience. As we expected, we have 2 experienced persons. In our April board meeting, we will come with 2 new directors. The timing was perfect since April is when we conduct our strategic reviews with the board. All the sessions were productive. I'll bring our new director to speed. As I mentioned, they bring unique experience and talented, and they are aligned with our objective of creating value for shareholders. I would say, all in all, a good experience. Nothing special.
Got it. Any thoughts around, you know, that you might have about the business as you approach your two-year anniversary?
I'm not sure I understand the question. I'm sorry. If anything, I would just say, Sylvamo is doing well. I mean, we expect again a year of 760, $720 million, sorry, to $770 million. A strong free cash flow. 2 great years. 2022 was a good year, and expect another good year in 2023.
Yeah. I'll just add to that, David. I mean, we really believe that the uncoated freesheet markets that we operate in provide attractive conditions that allow us to leverage our competitive advantages to generate high returns on invested capital. We believe we can generate first quartile total shareholder returns. You know, we feel very positive about that, even in light, you know, of maybe some challenging economic clouds that are rolling in. We believe that we will continue to generate, you know, high returns on invested capital. We were generating over 25% returns on invested capital today, and we believe that there's more to be done, and we can increase our earnings and our cash flow going forward.
Thank you.
Next, we'll go back to the line of George Staphos. Please go ahead.
Hi guys. I lied. One last question for you. The, you know, working capital was a touch more negative than we were looking for, and one of the things that we saw was payables were down. I'm just guessing that, you know, as you've been trying to work working capital down, you also haven't needed as much in the way of chemicals and other inputs that would go into production. Just wanted to ascertain if that was it, and if there's anything else other than, you know, obviously the destocking in that working capital line. You know, what was in the accounts payable and working capital? Now I'll turn it over and have a good quarter. Thank you.
Thank you, George. Thanks for your question. Yeah, we. You know, our free cash flow in the Q1 was as expected. The key things that we're driving that, as you rightly said, is that payables were down. One of that was the incentive plans that we paid. Yeah. That was a big contributor to that. The other thing was the increase in inventories that drew our working capital. That was in preparation, getting prepared for this significant outage quarter that we had right now. That was the key factors that drove the working capital change in the Q1.
Okay. nothing beyond that in terms of payables then. I appreciate it, guys. Thank you.
All right. Thank you. Thank you for your question.
At this time, there are no further questions. I'd now like to turn the call back to Hans Bjorkman for any closing comments.
Thanks, Greg. Before I wrap up the call, Jean-Michel, any closing thoughts?
Thanks, Hans. First of all, thanks everybody for joining our call. I think it's important to say this year we remain confident in our ability to generate very strong EBITDA, between $720 million-$770 million. Free cash flow of $250 million-$280 million. Just to put it in perspective, that represent an adjusted EBITDA of more than 18%, and a return on invested capital above 25%. We're expecting good numbers, and that will allow us to achieve one of our main goal, which is to return more than $90 million to shareholders. We'll do that via dividend and share repurchases in 2023, and that remains one of our priority. With that, thank you for joining the call.
Thanks for joining the call. We appreciate your interest in Sylvamo, and we look forward to continued conversations in the coming weeks and the months ahead. Thank you very much. Have a great day.
Once again, we would like to thank you for participating in Sylvamo's Q1 2023 Earnings Call. You may now disconnect.