REG-Smurfit Kappa Group PLC Trading Statement

Smurfit KappaAnnouncement

31/10/2018 07:00

      Trading Statement
    

    

      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 €1,130 
        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 Review
Smurfit 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 Summary
Europe 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 €460 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 €66 
      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 €1.2 billion, with a corresponding 
      credit of €1.2 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 €8.6 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.info
Follow 
      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
          
          

            Smurfit Kappa
          
          

            T: +353 1 202 71 80
          
          

            E: ir@smurfitkappa.com
          
          

             
          
        
        

           
        
        

           
        
        

           
        
        

          

            Melanie Farrell 
          
          

            FTI Consulting
          
          

            T: +353 1 663 36 80
          
          

            E: smurfitkappa@fticonsulting.com
          
        
      
      

        

        
        

           
        
        

           
        
        

           
        
        

        
      
    

      1 Underlying in relation to financial measures excludes 
      acquisitions, disposals, currency and hyperinflation movements where 
      applicable
    
View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005280/en/

      Smurfit Kappa Group PLC