Fourth Quarter and Full Year Results 2016
Smurfit Kappa Group today announced results for the 3 months and 12 months ending 31 December 2016.
Full Year Key Points
Full year 2016 revenues on a constant currency basis up 5%
2016 EBITDA of €1,236 million, a new record for the Group
Improved ROCE at 15.4%
Continued good cash generation with free cash flow of €303 million
Admission to FTSE 100 index effective 19 December 2016
7 year bond issuance of €500 million at 2.375% in January 2017
Final dividend increased by 20% to 57.6 cent per share
Performance Review and Outlook
Tony Smurfit, Group CEO, commented:
“In 2016 SKG delivered continued earnings growth with EBITDA of €1,236 million and an EBITDA margin of 15.1%, driven by solid volume growth across our markets, resilient box pricing and the Group’s investment in high return capital projects.
“These strong results against most performance metrics were delivered despite the significant headwinds experienced by the Group in higher raw material input costs and adverse currency impacts. This once again highlights the strength of the Group’s integrated business model, our geographically diverse portfolio of businesses and our performance based culture.
“In 2016 we have invested approximately €500 million in our business, building a platform to deliver continued performance and growth. Effective capital spend will enhance operating efficiency, optimise our asset base and continuously improve our market positioning across Europe and the Americas enabling us to deliver added value to our customers. In 2017 we will continue to realise the benefits of our average annual capital spend of more than €450 million over the last three years.
“In December 2016, the Group was pleased to be admitted to the FTSE 100 index, one of the world's leading equity markets indices. Admission to the FTSE 100 is consistent with our vision of being a globally recognised and respected business delivering both secure and superior returns for all stakeholders.
“In January 2017 we issued a 7 year, €500 million bond enabling the Group to extend the maturity profile of our debt to 4.3 years and secure, at 2.375%, our lowest ever coupon for the Group.
“We are excited about the significant number of internal opportunities that exist within SKG which will continue to drive business improvement as we deliver 15% ROCE through the cycle. The Group is also well positioned to make acquisitions that deliver long term value.
“SKG has an unrivalled market offering which helps our customers succeed in their chosen markets. This is underpinned by our unique differentiation tools, market insights and innovation infrastructure, supported by our ongoing capital expenditure programmes and our leading sustainable business practices across our operations.
“From a demand perspective, the year has started well across most areas of our business and, while recently announced paper price increases should translate with the customary time lag into higher box prices, we look forward to 2017 and beyond.
“Reflecting the distinct strengths and capabilities of our business, the Board is recommending a 20% increase in the final dividend to 57.6 cent per share.”