Like many other websites, we use cookies and store cookies on your computer. These cookies are used to improve our website and provide more personalised services to you, both on the website and through other media. For further information, please see our Cookie Policy.

It appears you have an outdated browser. To improve your viewing experience, please download an updated browser (IE8+, Firefox, Google Chrome or Apple Safari).

Q3 Results 2013

​6 November 2013

Smurfit Kappa Group plc (‘SKG’ or the ‘Group’) today announced results for the 3 months and 9 months ending 30 September 2013.

Highlights

  • Revenue growth of 10% year-on-year in the third quarter
  • EBITDA of €303 million up 9% year-on-year
  • Year to date free cash flow of €262 million and net debt to EBITDA of 2.5x at 30 September 2013
  • Acquisition of UK speciality business ‘CRP’ in October 2013 highlights increased commitment to innovation and excellence in high end packaging
  • Redemption of €500 million 7.25% Senior Notes effective 4 November will further reduce cash interest cost by €30 million per annum improving earnings by 11 cent per share
  • Reflecting good European market conditions, €30 per tonne price increase announced for recycled grades from 1 November
 

Performance Review and Outlook 

Gary McGann, Smurfit Kappa Group CEO, commented: “The Group is pleased to report EBITDA of €303 million in the quarter. The Americas has been a strong contributor to the EBITDA performance in the third quarter. While Europe’s performance has been somewhat weaker, it is showing sequential improvement with initial indications of pricing recovery. The Americas provides us with important geographic diversity of earnings and exposure to higher growth markets in the region.

Packaging volume growth has remained solid throughout the year, and European box volumes continue to grow ahead of the general market. Our volume performance reflects continuing gains in business areas where we work as a partner to our customers across their markets: rationalising their supply chains, removing costs and consistently developing innovative packaging that is both efficient for transport and an effective retail medium at the point of sale.

The Group’s European containerboard operations are experiencing solid demand for both recycled and kraftliner grades which is underpinning recent price increases. Reflecting good market conditions, the Group announced a recycled containerboard price increase of €30 per tonne for implementation from 1 November. The benefit from recent paper increases is only achieved in SKG’s integrated system when the price increases are pushed through to the box prices with the usual time lag.

In addition to the successful acquisition of the UK business CRP in October, the Group has delivered material progress on a number of financial initiatives in the quarter. Following the refinancing of our €1.375 billion Senior Credit Facility in July, we recently completed the redemption of our €500 million 7.25% Senior Notes due 2017. This redemption was funded from a combination of cash and existing credit facilities. These two transactions have significantly enhanced the Group’s credit profile and reduce cash interest costs by over €43 million per annum.

The Group’s objective is to sustain top line growth through economic pricing, accretive acquisitions and effective capital investment. SKG will also maintain its focus on delivering cost efficiencies through the system. Operating performance and on-going capital management have driven a net debt reduction of €187 million for the third quarter with a net debt to EBITDA ratio of 2.50x. SKG is on track to deliver the expected level of EBITDA growth in 2013. The strength of our capital structure today together with our expectation of materially improved free cash flow continues to expand the available range of options to deliver and to drive value from 2014.” 

​Forward Looking Statements

Some statements in this announcement are forward-looking. They represent expectations for the Group’s business, and involve risks and uncertainties. These forward-looking statements are based on current expectations and projections about future events.

The Group believes that current expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Group’s control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.