10 February 2016
SKG Fourth Quarter and Full Year Results 2015
Smurfit Kappa Group today announced results for the 3 months and 12 months ending 31 December 2015.
Fourth Quarter and Full Year Key Points
Full year Group packaging volume growth of 6% with underlying growth of 3% excluding acquisitions
Full year pre-exceptional EPS growth of 21% year-on-year and fourth quarter EBITDA margin of 15.6%
ROCE of 15.1% and Net Debt / EBITDA at 2.4 times after adjusting for acquisitions in Brazil in December
Free cash flow at €388 million supporting strong financial position and strategic flexibility
Successful delivery on 2015 cost take-out target of €75 million with new target of €75 million in 2016
Completion of over €380 million of acquisitions in 2015
Final dividend increased by 20% to 48 cent per share
Performance Review and Outlook
Tony Smurfit, Smurfit Kappa CEO, commented: “We are pleased to report a strong 2015 outcome delivering significant improvement across all key financial and operating metrics. We will continue to drive our performance by focusing on marketing and innovation initiatives for our customers, cost efficiency and financial discipline. Our objective is to continue to deliver on our target of 15% ROCE through the cycle.
“We invested over €380 million in acquisitions in 2015 to strengthen and diversify our geographic reach and drive earnings. During the year we invested €450 million to optimise the asset quality in our system and our investments in high return capital investment projects are now also delivering incremental EBITDA growth. We are continually enhancing the breadth and depth of our service offering for customers, while consistently lowering operating costs through our supply chain.
“Our strong financial profile is reflected in our Net Debt to EBITDA ratio of 2.4 times at the end of 2015, after adjusting for the Brazilian acquisitions in December. We remain firmly committed to maintaining our Ba1 / BB+ credit rating.
"The Board’s confidence in the strength of the business is reflected in a proposed 20% increase in the final dividend to 48 cent per share. Combined with an interim dividend of 20 cent per share paid in October 2015, this will bring the total dividend to 68 cent, a 23% increase year-on-year. Our dividend is a core component of our commitment to driving value for shareholders.
“Having established a strong platform for growth over the past few years, we expect to deliver good earnings growth in 2016. While this will, to some extent, be influenced by the broader macro-economic environment, we are confident our current investment initiatives, our geographic diversity, our integrated business model and our strong free cash flow generation positions us well for 2016 and beyond.”