Q1 2016 Results
Smurfit Kappa Group plc today announced results for the 3 months ending 31 March 2016.
First Quarter Key Points
- Group corrugated packaging growth including acquisitions of 5% with solid underlying volume growth
- Growth of 6% in pre-exceptional EBITDA with improved margin at 14%
- Continued strong ROCE at 15.3%
- Successful completion of two major upgrades of paper machines in the Netherlands and Spain
- Announcement of €40 per tonne price increase in European brown kraftliner effective 15 June 2016
- Confirmation of upgrade to Sterling Premium UK listing with retention of euro denominated Irish listing
Performance Review and Outlook
Tony Smurfit, Smurfit Kappa CEO, commented: “Solid year-on-year earnings progression in the first quarter of 2016 with 6% EBITDA growth was driven by an improved operating performance and the positive impact of acquisitions completed in 2015. Our well invested, geographically diversified and vertically integrated operations will continue to provide us with a resilient platform to drive earnings and free cash flows.
“We continue to see good levels of demand for packaging across almost all of the markets in which we operate. During the quarter, currencies had a distorting effect which on a like-for-like basis had a negative translation effect of almost €10 million on EBITDA. In addition, the rebuilds of our Roermond and Sanguesa mills adversely impacted profitability in the quarter. However, both projects will enhance our European system’s cost position and commercial offering.
“Following the completion of over €380 million of acquisitions in 2015, the Group’s focus is on the successful integration of these businesses through 2016 with the capacity for further bolt-on acquisitions. Our capital investment programme of over €450 million per annum supports our objective to deliver higher quality packaging and merchandising solutions to our global customers, while continually driving operational efficiencies through our integrated system.
“Assuming broad industry conditions prevail, we expect good earnings growth in 2016.”
Stock Exchange Listing Arrangements
Following the commencement of Sterling trading on the London Stock Exchange on 1 March, the Group was formally confirmed by the UK Listing Authority as a Premium listed company on 25 April 2016. On the same date the Group’s Irish listing was switched to a secondary listing, but its participation in all of its existing euro indices were maintained.
On 28 April the FTSE Nationality Advisory Committee confirmed SKG’s allocation to the UK classification for the purposes of the UK Index Series. Inclusion in the UK Index Series of the FTSE Indices is now conditional on SKG meeting the 20 business day liquidity tests contained in the FTSE Ground Rules in the period prior to 1 June 2016.
Capital Markets Day
The Group will hold a Capital Markets Day in the London Stock Exchange on the morning of 3 June 2016. The event will provide attendees with an overview of the Group alongside a review of current key business initiatives and operational drivers. The event will also be attended by other key members of SKG’s executive and operational management teams across Europe and the Americas.