Smurfit Kappa Group announced results for the 3 months ending 31 March 2016.
First Quarter Key points
– Group corrugated packaging growth including acquisitions of 5% with solid underlying volume growth
– Growth of 6% in pre-exceptional EBITDA with improved margin at 14%
– Continued strong ROCE at 15.3%
– Successful completion of two major upgrades of paper machines in the Netherlands and Spain
– Announcement of €40 per tonne price increase in European brown kraftliner effective 15 June 2016
– Confirmation of upgrade to Sterling Premium UK listing with retention of euro denominated Irish listing
Performance Review and Outlook
Tony Smurfit, Smurfit Kappa CEO, commented: “Solid year-on-year earnings progression in the first quarter of 2016 with 6% EBITDA growth was driven by an improved operating performance and the positive impact of acquisitions completed in 2015. Our well invested, geographically diversified and vertically integrated operations will continue to provide us with a resilient platform to drive earnings and free cash flows.
“We continue to see good levels of demand for packaging across almost all of the markets in which we operate. During the quarter, currencies had a distorting effect which on a like-for-like basis had a negative translation effect of almost €10 million on EBITDA. In addition, the rebuilds of our Roermond and Sanguesa mills adversely impacted profitability in the quarter. However, both projects will enhance our European system’s cost position and commercial offering.
“Following the completion of over €380 million of acquisitions in 2015, the Group’s focus is on the successful integration of these businesses through 2016 with the capacity for further bolt-on acquisitions. Our capital investment programme of over €450 million per annum supports our objective to deliver higher quality packaging and merchandising solutions to our global customers, while continually driving operational efficiencies through our integrated system.
“Assuming broad industry conditions prevail, we expect good earnings growth in 2016.”