Good morning and thank you for standing by. Welcome to Sylvamo's Third Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, we will have an opportunity to ask questions [Operator Instructions] And as a reminder your conference is being recorded. I would now like to turn the conference over to Hans Bjorkman Vice President of Investor Relations. Sir the floor is yours.

Thanks Lorris. 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 3 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-US GAAP financial information. Reconciliations of those figures to US GAAP financial measures are available in the appendix. Our website also contains copies of the third quarter earnings press release as well as today's presentation. I would now like to turn the call over to Jean-Michel. Jean-Michel Ribiéras: Thanks, Hans. Good morning, and thank you for joining our call. I'll begin my comments on Slide 4. On October 1, we completed our first year as a public company. Our first year was one of significant achievements. As we build the world's paper company, we generated strong earnings per share and free cash flow, which we used to reduce debt, begin returning cash to shareowners and reinvest in our business. We agreed to acquire the Nymolla mill in Sweden and divested our Russian business. Then we repaid our Term Loan B. and achieve our gross debt target of $1 billion. We have also exited our transition services agreement. I'm proud of our teams and accomplishments over the last year. More importantly, I'm pleased that we are well positioned to navigate any macroeconomic headwinds and resulting industry challenges. Slide 5 highlights our third quarter results. Our three-point strategy of commercial excellence, operational excellence and financial discipline was the foundation of our success. On a quarter-over-quarter basis, we increased adjusted EBITDA by 14% to $216 million and we grew our margin by 160 basis points. We increased adjusted earnings per share by 24% to $2.51 per share. We generated $114 million in free cash flow and repaid $88 million of debt in the quarter. These results were above the high end of our guidance. Our continued strong performance reflects our talented teams, our iconic brands and our low-cost mills, all of which enable us to remain the supplier of choice for our customers. Slide 6 highlights our key performance metrics compared to the second quarter and to last year's third quarter. We increased net sales by 6% to $968 million. Our adjusted EBITDA of $216 million, represents a margin of 22.3%, the highest margins level we have achieved. We generated $114 million in free flow, which was an increase due to higher earnings, less capital spending and a reduction in working capital. These strong performances demonstrate our ability to continue to deliver on our investment thesis. Our teams performed well, creating value for all our stakeholders. Now John Sims will discuss our third quarter performance in more detail. John?

Thanks, Jean-Michel. Good morning, everyone. Let's turn to slide 7 please. As Jean-Michel said earlier, we earned $216 million in adjusted EBITDA in the third quarter. This is a 160 basis point improvement and was driven by $60 million in price and mix improvements, as realization of price increases exceeded our outlook and we continue to drive mix optimization. Volume increased slightly by $3 million with stronger shipments in Latin America and North America. Our order backlogs were strong in all regions in the quarter. We also had a slight increase in operations and costs, which increased by $3 million. We spent $14 million less on outages than in the second quarter, and we successfully conducted the planned maintenance outage at Mogi Guacu mill. Input and transportation costs increased by $46 million as costs for energy, fiber and chemicals continue to increase. Let's take a look at our regional results on slide 8. Each region continues to perform very well, demonstrating the strength and resilience of our talented teams, iconic brands and low-cost mills as well as favorable industry conditions. Each region benefited from utilizing price increases, which offset escalating costs and inflation. Our volumes remain strong in all regions and we continue to outperform the industry shipments. We operated well in all three regions. Input costs and transportation availability remained under pressure and we have seen some relief truck availability in North America, but obtaining adequate rail service continues to be a challenge. The appendix contains additional details on our regional performance. So, let's turn to slide 9. In the third quarter, uncoated freesheet industry fundamentals remain favorable across our regions. Demand in Latin America and North America continued to rebound from pandemic levels while demand in Western Europe declined by 2%, which in part was driven by the…

Thanks, Jean-Michel. I'm now on Slide 16. In the fourth quarter, we project price and mix to improve by $30 million to $35 million as we continue to realize prior price increases in all three regions. We expect volume to be flat to decreasing by $0 million to $5 million with seasonally weaker volume in Europe and North America. We project operations and costs to increase by $35 million to $40 million driven by seasonally higher costs in Europe and North America foreign exchange impacts in Brazil and an increase in incentive compensation accruals. We expect input and transportation costs to be flat to increase by $0 million to $5 million largely due to higher energy and input cost inflation. Maintenance outage expenses are projected to increase by $21 million as we conduct two planned maintenance outages. This will be our heaviest planned maintenance outage quarter of the year. All in, we expect to deliver fourth quarter adjusted EBITDA of $180 million to $190 million which would put us slightly below at the low-end of our full year guidance of $740 million to $780 million. This change is largely driven by the increase in foreign exchange impact on our Brazilian earnings and compensation accruals, which were not included in our previous guidance. We expect fourth quarter earnings per share of $2.05 to $2.25. And we expect free cash flow of more than $25 million for the quarter which increases our full year outlook to greater than $210 million. The appendix contains additional information on fourth quarter outlook. Also appendix Slide 37 shows that we have reduced our outlook for our 2022 capital expenses by $20 million to $155 million. We will be unable to complete certain projects in 2022 due to supply chain constraints and contractor delays. We project spending…

Thanks, Jean-Michel and thank you John. Okay. Lois, we're now ready to take any questions.

Thank you. [Operator Instructions] And we have a question from Ed Brucker from Barclays. Please go ahead.

Thanks for taking the call and congrats on this quarter. Just had a couple. First one is just on guidance. May be you could comment on the lower end of the original guidance, but the quarter was strong and it seems like in the fourth quarter might be stronger too. I was just wondering, if you're thinking a little conservatively given the environment right now? And I guess on top of that, how do you expect kind of -- given the uncertainty, how do you expect the go-forward outlook for your market credit facility?

Yes. This is John Sims. Yes. As we mentioned, our guidance put us on the lower end of our full year guidance, but that's really driven by FX impact we're seeing real strengthened, so that's kind of question where that ends up. But also it also reflects the fact that we've had to take an additional accrual on our incentive plan. Just to remind everybody on the call, we really target our incentive plans to match up with our -- the interest of our shareowners and is driven by EBITDA margins and free cash flow. And the increase in the incentive compensation is the fact that the strong cash flow that we're generating this year and I think that's a testament to the focus that we have on free cash flow. But in terms of being conservative, everything else essentially continues as we had thought in the fourth quarter, that meaning that the price increases that we've been able to realize from our prior price announcements have come in. Those are more than compensating in the input cost. And in fact, we're seeing input costs kind of flatten out across all the regions. So certainly at an elevated level and a high level, but we feel going in, it's hard to predict what 2023 is going to be, I mean given some of the uncertainties we have that everybody I think can read about. But one of the things we feel very good about is our exit rate and how well we're positioned we are from a balance sheet perspective being at $1 billion of debt and also from where we are from the margins earnings and order backlog and the strength that we have with our customers and our positions in all our markets.

Got it. It's helpful. Yes. I mean it's testament how well you've done with the balance sheet. I guess next question is about that, just if you are thinking about a potential leverage target through the cycle or if I guess a max leverage you'd be willing to take it out given your capital allocation priorities have shifted a bit given that you have paid down so much debt. Just want to get your thoughts on where leverage kind of fits in is in there?

Well, we said that the $1 billion target because we felt that that would allow us to continue to invest through the cycle in high-return projects into the business and it continue to improve our business and also, return cash back to our shareowners. Now, we'll continue to have to pay down some debt, because we have amortization requirements for the term loan that we do. So, in terms of your question is with the math that we go, I think we're comfortable in saving where we want to be is at that $1 billion or slightly less. And we think that's a very good position for us to be in and to be able to execute the rest of our strategy.

Okay. Thanks for the time.

Thank you. [Operator Instructions] And we'll move to the line of Ron [indiscernible]. Please go ahead.

Great. Thank you. Last year on your fourth quarter -- going into the fourth quarter you expected operations to hit $15 million, because of normal seasonality. So could I assume that -- I realize energy expenses are up from last year that all of your guided 35 to 40 more in the fourth quarter about half is normal seasonality and half is the incentive accrual?

Ron, this is John. Yes, the incentive you're right, but it's also the FX. So we add the FX with the incentive accrual and you're close to that 50% of that cost is driven by those two items.

Okay. So going to the next quarter whatever is the incentive accrual, let's assume are they roughly equal? Because whatever the incentive accrual ought to go back to some normal level I realize you were under looking earlier in the year. But the extra accrual are to go back. And I guess the FX we just hope to be flat. But roughly the incentive accrual would it be in the $10 million range?

Yes $10 million that's correct, and about $5 million or so for the FX.

And secondly you're going to be way under the leverage that you're looking at by the end of next year. I realize you have $150 million going out the door, but you're getting so much free cash. Is there a thought to renegotiating the terms on the agreement, or really what you're going to do is deploy it and see you can get more -- I'm going to pronounce this world?

Ron, I guess, we're looking at earlier -- we're looking through the options in terms of what we can do from the bond perspective to get more room on the restricted payment terms, but we're analyzing that right now. And let me just add another comment. The acquisition is not core to our strategy. We said that previously. We also said that we will opportunistically look at acquisitions that make strategic fit with us. And that certainly was the case in the Nymolla perspective. Jean-Michel Ribiéras : Maybe I can add a point is -- Jean-Michel here Ron. I know that we've reached our $1 billion debt target. And as John mentioned, Nymolla was probably very unique opportunities which is not core to our strategy. But what is core to our strategy is to returning cash to shareholders and it has become even a higher priority for capital allocation. So that's why we increased dividend. We more than doubled. And at current share price repurchasing share is very attractive. So maybe you might ask why we haven't done it before. As you might understand in the third quarter we have blacked out due to material nonpublic information. We had Russia, we had Nymolla, the third quarter earnings. So really we're back to this certain in cash to shareholders is really a high priority right now. That's why I would put in front of.

Can I follow-up one quick one on that. So the $90 million a year you haven't done any this year, could you sort of reach forward in the fourth quarter, because the $90 million starts again for 2023?

We've done $10 million in dividends out of the $90 million for this year. And then it started again $90 million, January 1st.

So you have lots of room to do it in the fourth quarter this year.

We do.

Okay. Thank you. Jean-Michel Ribiéras: You're welcome.

The next question is from Paul Quinn from RBC Capital Markets. Please go ahead.

Yeah, thanks very much. Good morning, guys. Just on the increased brands in Europe from 30% to 50%, what's the margin impact on that? And then what happens with the addition of the Sweden mill?

Well, we don't -- this is John. We don't want to give specifics on the margin difference between the brands. It is -- we do get -- there is a margin increase in the areas of premium as we drive it, but there's also other benefits as well. And mostly you can think about in terms of brands being more sticky with customers barriers to both imports and also to competition. And so there's also other values in terms of increasing our brands that we were able to realize across all the regions. Jean-Michel Ribiéras: And concerning Nymolla, they have also a strong brand, which is called Munsi Copy [ph]. So on the cut size side of the business, it's going to continue to be Sylvamo's strong brands approach.

And the other thing that Nymolla brings to us that we didn't really have with the Saillat mill is strong brands in their commercial printing and forms business. So that's actually an increase market segment for us an opportunity for us to really leverage that.

Okay. And then just maybe you could give us a little bit more color on this $40 million pulp mill upgrade at Nymolla, as well as when are you taking maintenance at Saillat?

So I'll answer your second question. Saillat is only 18 months. So we won't have any maintenance, but we want to have an annual outage this year. So it will be next year around April time frame I believe. And in terms of Nymolla, the mill modernization project this has been actually completed, mostly completed by store this year. So all the benefits will begin to accrue to us next year when we finally do take ownership of the mill. And what they've done is they've upgraded the back end of the mill specifically two areas is a new digest increasing the ability to produce softwood pulp. And -- so that will expand the capacity there, and also liquefaction [ph], which will reduce cost. So just -- the mill has a somewhat different hoping process than our other mills is a sulfide process of increasing softwood pulp consumption and production is a positive for that mill and that's what this mill upgrade does.

Okay. So just lastly does that upgrade affect the production capacity of the mill at 500,000 tons?

No. What it does increase is the pulping capacity. And so you have to buy less open market. It's not open market, its pulp weather, I'm sorry.

Okay. So second question is, how much are you buying that? How much is that purchasing on the open market right now? And how much was the all efficiency on the pulp side, pre and post pulp mill grade?

It is -- it buys -- it doesn't buy a lot of market pulp -- hardwood pulp for the product grade. And this upgrade now allows us to substitute that with software that we can source the fiber in the region.

All right. Thanks so much. Best of luck.

Thank you. The next question is from Adam Ritzer, Private Investor. Sir, please go ahead.

Hi. Thanks for taking my call. I just had one quick question. You guys gave kind of a pro forma debt number after the Russia sale of what $957 million, I think it is. How much cash are you going to have on a pro forma basis after the sale?

After the sale, I have to think -- maybe we ought to get back to you. We'll probably be in about $100 million range. Let us get back to you on that.

So what you had $390 million in proceeds from the sale and you paid down about $270 million of debt. So is that difference, add to the cash you had at the end of Q3? Is that the right way to look at it?

That's the right way to look at it.

Okay. I will talk about with you that later. Okay. That's what I want to ask. Thanks very much.

We're using cash to pay for the Nymölla mill.

Right. But that's not going to be till Q1 right?

Right. Yes the number I gave you, I was subtracting the paying for the Nymölla mill out of that cash, because that's -- we're expecting to hopefully close that early in the first quarter.

Right. Okay. Right. So you take that cash minus the $150 million assuming that plus whatever free cash should generate in Q4. Okay. Understood. Thanks very much.

Thank you. I will now turn the call back over to Hans Bjorkman for closing comments.

Thank you everyone for joining our call today. We appreciate your interest in Sylvamo and we look forward to continued conversations in the coming days, weeks and months ahead. Have a great rest of your day and a great week.

Once again, we would like to thank you for participating in Sylvamo's Third Quarter 2022 Earnings Call. You may now disconnect.