Fourth Quarter and Full Year Results 2010
9 February 2011
SKG Q4 and Full Year Results 2010
Smurfit Kappa Group plc (“SKG” or the “Group”), one of the world’s largest integrated manufacturers of paper-based packaging products, with operations in Europe and Latin America, today announced results for the 3 months and 12 months ending 31 December 2010.
- EBITDA growth of 22% for full year 2010. Quarter four EBITDA margin of 14.7%
- Net debt to EBITDA ratio reduced from 4.1x to 3.4x in 2010
- Strong performance highlights the benefits of the integrated model and focus on operating efficiency
- Good demand and input cost pressure underpin continued pricing momentum in 2011
Performance Review & Outlook
Gary McGann, Smurfit Kappa Group CEO commented: “The Group is pleased to report a 22% growth in EBITDA for 2010 and a reduction of its net debt to EBITDA ratio to 3.4x. Further meaningful progress on de-leveraging is expected in 2011.
Despite continued input cost pressure in the fourth quarter, the Group’s improved earnings and EBITDA margin of 14.7% primarily reflect an ongoing focus on driving operating efficiency, better than expected demand in the period, and further progress on pricing recovery, both in Europe and in Latin America.
Current business conditions support continued price recovery with input costs rising and demand remaining strong. Industry inventory levels remain at a satisfactory level and the supply outlook is favourable. These factors, together with SKG’s ongoing cost control initiatives, should deliver further performance improvement and earnings growth in 2011.
In that context, the Group currently expects its free cash flow generation to be materially stronger in 2011, which should translate into significant debt paydown, and enhance the available range of strategic and financial options.”