TIDMSKG
Smurfit Kappa Group plc ('SKG', 'Smurfit Kappa' or 'the Group')
today announced a trading update for the 9 months ending 30
September 2018.
First Nine Months Overview - Delivering continued and
significant year-on-year improvement
-- Group underlying1 revenue growth of over 7% year-on-year
-- Group pre-exceptional EBITDA growth of 27% year-on-year to EUR1,130
million
-- EBITDA margin at 16.9%, a 290 bps improvement over the same period in
2017
-- Net debt to EBITDA at 2.1x
-- Agreement to acquire high quality integrated packaging operations in
Serbia
-- Full-year outcome materially better than 2017
Performance ReviewSmurfit Kappa Group continues to deliver a
very strong performance. The Group has implemented commercial
initiatives and has experienced continued demand growth across most
markets. The outcome reflects corrugated price recovery
initiatives, the continued benefit of our capital investment
programmes and lower average recovered fibre costs, largely offset
by higher energy, labour, logistics and other raw material costs
together with a negative currency translation impact.
Regional SummaryEurope reported continued year-on-year EBITDA
margin expansion with corrugated demand in line with expectations.
The Group expects further corrugated price recovery through the
latter part of 2018.
The Group completed the EUR460 million acquisition of Reparenco
during the third quarter and the integration is progressing well.
We are also pleased to announce the agreement to acquire a high
quality integrated packaging operation in Serbia, continuing to
expand the Group's geographic footprint.
The Americas reported continued volume growth with further
margin expansion on a year-on-year basis. Our expectation is for
continued improved performance in the Americas.
As communicated in September, as a consequence of the loss of
control over Smurfit Kappa Carton de Venezuela, the Group has
deconsolidated its Venezuelan operations, resulting in a write down
of net assets of EUR66 million.
As required under International Accounting Standard 21, The
Effects of Changes in Foreign Exchange Rates, currency is recycled
on deconsolidation. This results in a non-cash exceptional charge
to the Consolidated Income Statement of EUR1.2 billion, with a
corresponding credit of EUR1.2 billion to the Consolidated
Statement of Comprehensive Income. This has no impact on the net
assets or total equity of the Group. It represents the transfer of
negative currency reserves, generated by previous devaluations of
the Bolivar Fuerte, from the foreign currency translation reserve
into the retained earnings reserve.
Tony Smurfit, Group CEO, commented:
"As we start the fourth quarter, we see continued demand growth
and further corrugated price recovery. Smurfit Kappa continues to
lead the industry, delivering innovative and value added packaging
solutions for our customers. In a world increasingly focused on the
environment, demand for sustainable packaging solutions will only
add to the existing strong secular drivers of corrugated use.
"In May of this year, we stated that we expect 2018 to be
materially better than 2017. SKG is on track to deliver a
materially better outcome in 2018 with our key performance measures
showing significant and continuing improvement."
About Smurfit Kappa
Smurfit Kappa, a FTSE 100 company, is one of the leading
providers of paper-based packaging solutions in the world, with
around 45,000 employees in approximately 350 production sites
across 33 countries and with revenue of EUR8.6 billion in 2017. We
are located in 21 countries in Europe, and 12 in the Americas. We
are the only large-scale pan-regional player in Latin America.
With our pro-active team, we relentlessly use our extensive
experience and expertise, supported by our scale, to open up
opportunities for our customers. We collaborate with
forward-thinking customers by sharing superior product knowledge,
market understanding and insights in packaging trends to ensure
business success in their markets. We have an unrivalled portfolio
of paper-packaging solutions, which is constantly updated with our
market-leading innovations. This is enhanced through the benefits
of our integration, with optimal paper design, logistics,
timeliness of service, and our packaging plants sourcing most of
their raw materials from our own paper mills.
Our products, which are 100% renewable and produced sustainably,
improve the environmental footprint of our customers.
smurfitkappa.com
Check out our microsite: openthefuture.infoFollow us on Twitter
at @smurfitkappa and on LinkedIn at 'Smurfit Kappa'.
Forward Looking Statements
Some statements in this announcement are forward-looking. They
represent expectations for the Group's business, and involve risks
and uncertainties. These forward-looking statements are based on
current expectations and projections about future events. The Group
believes that current expectations and assumptions with respect to
these forward-looking statements are reasonable. However, because
they involve known and unknown risks, uncertainties and other
factors, which are in some cases beyond the Group's control, actual
results or performance may differ materially from those expressed
or implied by such forward-looking statements.
Contacts
Garrett Quinn Melanie Farrell
Smurfit Kappa FTI Consulting
T: +353 1 202 71 80 T: +353 1 663 36 80
E: ir@smurfitkappa.com E: smurfitkappa@fticonsulting.com
1 Underlying in relation to financial measures excludes
acquisitions, disposals, currency and hyperinflation movements
where applicable
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This information is provided by Business Wire
(END) Dow Jones Newswires
October 31, 2018 03:00 ET (07:00 GMT)
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