30 July 2014
Smurfit Kappa Group plc (“SKG” or the “Group”) today announced results for the 3 months and 6 months ending 30 June 2014.
Pre-exceptional EPS growth of 46% year-on-year with EBITDA margin expansion to 14.3% for the first six months
Robust capital structure with annualised cash interest reduced to €135 million
Strong free cash flows supporting the delivery of previously announced capital allocation decisions
Interim dividend increased by 50% to 15.375 cent reflecting confidence in future performance
Recycled and kraftliner containerboard price increases announced
Performance Review and Outlook
Gary McGann, Smurfit Kappa Group CEO, commented:
“In the second quarter the Group has delivered EPS of €0.34, a strong EBITDA result of €295 million and continued EBITDA margin expansion. This has been achieved in spite of weaker than expected European containerboard pricing. The results reflect the resilience of SKG’s earnings profile underpinned by its integrated model together with the benefit of its geographic diversity. The Group’s return on capital employed of 14.3% validates the continued judicious approach to accretive capital investments and the continuous delivery on its cost take-out targets.
“As a result of continued demand growth, a fundamentally stable containerboard supply outlook and consistently high recovered fibre costs, SKG has announced containerboard price increases from 1 August in recycled containerboard and from 1 September in kraftliner. These initiatives will provide support to corrugated pricing, providing scope for further corrugated price recovery into 2015.
“The Group’s operations in the Americas are performing well with volume growth expected to improve through the second half of the year.
“The Group’s particular sales approach to international customers in both Europe and the Americas is continuing to make an impact in these markets with customers increasingly seeking a global and environmentally accredited partner for their packaging solutions.
“The Group is pleased to confirm a 50% increase in the interim dividend to 15.375 cent, reflecting confidence in its future performance.
“The continued delivery of strong free cash flows in the first half underpins SKG’s capacity to drive its medium term capital allocation initiatives through the cycle. With earnings growth expected in 2014, alongside considerable cash interest reductions year-on-year, the Group is increasingly well placed to deploy capital to enhance returns for shareholders.”
SKG - Q2 2014 Press Release - 30 July 2014