MM Group had strong results in 2022
Peter Oswald, MM CEO, comments: “The MM Group grew significantly in terms of profit and sales, both organically and through acquisitions, in a macroeconomically and geopolitically challenging environment in the financial year 2022. Demand for our natural, recyclable packaging products made of renewable raw materials was dynamic for most of the year and customers appreciate our investments in competitive sites, innovation and sustainability. The energy and raw material crisis confronted MM with particular challenges, which were overall successfully managed. Sales price adjustments compensated for the severe rise in energy and raw material costs. In addition, we succeeded in ensuring continuous supply to our customers despite unstable supply chains.
The acquisitions of Essentra Packaging and Eson Pac, completed in 2022, position MM as a global player in secondary pharma packaging and contribute to more resilience and growth throughout our business. Together with the two acquisitions of the previous year in the Board & Paper division, MM Kwidzyn and MM Kotkamills, they are part of the transformation of MM to increase value and growth abilities of the MM Group through acquisitions and operational optimization.
Despite an increasing market weakness in cartonboard and paper from the end of the 3rd quarter onwards, due to the well-stocked supply chain and thus considerable market-related machine downtime in this area, the MM Group recorded a strong overall increase in profit in 2022. The growth in operating profit from EUR 269.6 million to EUR 510.3 million mainly results from the division MM Board & Paper due to improved operations as well as the full-year inclusion of the previous year’s acquisitions. In contrast, the operating profit of MM Packaging decreased due to one-off expenses despite a favorable organic growth of approximately 5 %.
The Group’s consolidated sales reached EUR 4,682.1 million, which is 52.5 % or EUR 1,612.4 million above the previous year’s figure (2021: EUR 3,069.7 million). On the one hand, this rise resulted from the previous year’s acquisitions in the MM Board & Paper division as well as the company purchases of MM Packaging in the reporting year and, on the other hand from passing on costs through higher prices. At EUR 510.3 million, an operating profit of EUR 240.7 million above the previous year (2021: EUR 269.6 million) was achieved. The significant rise is attributable to the division MM Board & Paper.”
Geopolitical and macroeconomic uncertainties continue to determine our operating environment. While some input prices are still declining, the destocking process has also progressed since the beginning of the year as in the last months of the previous year. In the MM Board & Paper division, market-related machine downtimes are necessary in the 1st quarter. As announced, in the first three quarters there will also be longer machine downtimes because of major investments at the Frohnleiten, Neuss and Kolicevo cartonboard mills.
Prices are predominantly decreasing. Therefore, as expected, a significant decline in volume and results is foreseeable in the Board & Paper division in the current year. In the division MM Packaging, demand has weakened slightly in the first two months, but shows resilience. Structural adjustment and cost optimization measures will be further pursued.
Irrespective of the transition year in the MM Board & Paper division, our business model with a focus on sustainable packaging for everyday consumer goods remains resilient and attractive in the long term. The balance sheet of MM and ongoing cash generation are solid. Our investment activity will remain evelated in 2023 in order to further strengthen the competitiveness and growth capacity of the MM Group. Especially in the course of the modernization of three cartonboard machines as well as value-enhancing, technological innovations in the area of pharmaceutical and beauty packaging, we expect a capex volume of more than EUR 400 million this year.