SKG First Half 2019 Results
Smurfit Kappa Group plc today announced results for the 6 months ending 30 June 2019.
First Half Key Points
- Revenue growth of over 4%
- EBITDA of €847 million, up 17%, with a margin of 18.3%
- ROCE of 18.7%
- €190 million of acquisitions in Bulgaria, Colombia and Serbia
- Interim dividend increased by 10% to 27.9 cent per share
Performance Review and Outlook
Tony Smurfit, Group CEO, commented:
“I am pleased to report, for the first half of 2019, another set of excellent results. Revenue grew by 4% with EBITDA increasing to €847 million, up 17% on the prior year. The continued execution of our Medium-Term Plan together with our resilient business model allows us to continue to progress and deliver consistently excellent performance.
“During the first six months, our European business continued to perform strongly, delivering an increased EBITDA margin of 19.3%, up from 17.3% in the same period in 2018. Box volumes grew by approximately 2% on an organic basis, or 4% when including acquisitions.
“The Americas region continued to perform well, delivering an increased EBITDA margin of 17.1% up from 15.2% in the first half of 2018. Volumes grew by 3% in the first half. The region had especially strong performances in our larger markets of Colombia, Mexico and the US.
“We continue to work with our existing customer base, and indeed our new customers, in solving their many business challenges. This includes finding alternatives to less sustainable packaging, helping drive increased sales using paper-based packaging as a merchandising medium, and reducing complexity and costs in their supply chain by leveraging our unique SMART applications.
“In May, the Group hosted over 350 customers from across the globe at its biennial innovation event in the Netherlands. The event highlighted both the sustainability challenges we all face and how Smurfit Kappa’s expertise is part of the solution. We expect our Better Planet Packaging initiative to be a source of future incremental demand.
“During the first half, the Group continued to expand and strengthen its geographic footprint with acquisitions in Bulgaria, Colombia and Serbia and we are excited about the opportunities these additions present.
“The Group understands that the Italian Competition Authority will shortly release the outcome of its work in relation to approximately 50 market participants in Italy, including one of the Group’s Italian subsidiaries. We await the outcome of its work and will update accordingly.
“In February 2018, we outlined our four year Medium-Term Plan. We have completed a number of projects across our corrugated and containerboard business since its announcement. With the acquisition of Reparenco in July 2018, we accelerated a central part of the plan linked to our integrated model and secured our paper supply for future growth opportunities. Our plan remains flexible and agile and is the foundation for our current and future performance. The qualities of Smurfit Kappa continue to be evident, not alone in terms of our performance but in our world class containerboard system, leadership in sustainable packaging, customer-focused innovation and disciplined, returns focused, capital allocation.
“While macro-economic and political risks remain, SKG continues to be highly confident of another year of progress and delivery.
“Reflecting this and the future prospects of the business the Board is recommending a 10% increase in the interim dividend to 27.9 cent per share.”