REG-Smurfit Kappa Group PLC Trading Statement

Smurfit KappaAnnouncement

01/11/2023 07:00

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Trading Statement

 

Smurfit Kappa Group plc (‘SKG’, 'Smurfit Kappa' or ‘the Group’) today
announced a trading update for the 9 months to 30 September 2023.
 2023 First Nine Months | Key Financial Performance Measures                                                                                  
                                                                                                                                              
 €m                                         Q3         Q3                    Change                YTD                  YTD       Change      
                                            
2023      
2022                                       
2023                
2022                 
 Revenue                                    €2,696     €3,340                (19%)                 €8,533               €9,724    (12%)       
 EBITDA                                     €512       €593                  (14%)                 €1,625               €1,767    (8%)        
 EBITDA Margin                              19.0%      17.8%                                       19.0%                18.2%                 
 Operating Profit before Exceptional Items  €351       €419                  (16%)                 €1,129               €1,258    (10%)       
 Profit before Income Tax                   €281       €372                  (25%)                 €939                 €1,141    (18%)       
 Basic EPS (cent)                           77.7       111.5                 (30%)                 261.7                333.4     (22%)       
 Pre-exceptional Basic EPS (cent)           86.7       111.5                 (22%)                 283.9                333.4     (15%)       
 Free Cash Flow                             €214       €337                  (36%)                 €333                 €309      8%          
 Return on Capital Employed                                                                        18.0%                20.6%                 
                                                                                                                                              
 Net Debt                                                                                          €3,042               €3,028    1%          
 Net Debt to EBITDA (LTM)                                                                          1.4x                 1.4x                  
                                                                                                                                              


Key Points:


 * EBITDA of €1,625 million with an EBITDA margin of 19.0%

 * ROCE of 18.0% reflecting the ongoing benefit of capital plans and operating
excellence

 * Net Debt to EBITDA ratio of 1.4x

 * Announced transaction to combine Smurfit Kappa and WestRock, creating a global
leader in sustainable fibre‑based packaging

Tony Smurfit, Group CEO, commented:

“We are pleased to report an excellent performance for the first nine months
with EBITDA of €1,625 million, an EBITDA margin of 19.0%, a ROCE of 18.0%
and a net debt to EBITDA of 1.4x.

“These results continue to demonstrate the effectiveness of our multi-year
capital plans, our geographic footprint and the service and dedication of our
people. SKG provides its customers with innovative and sustainable products,
delivered and supported by the security of our integrated model.

“Box demand in the third quarter for the Group was approximately 2% behind
2022 levels versus a negative 7% and 5% in the first and second quarters
respectively. We expect this trend to continue, with Germany in particular
showing improved order books.

“On 12 September, Smurfit Kappa and WestRock announced an agreement to
combine to create Smurfit WestRock, a global leader in sustainable fibre-based
packaging. This combination represents a unique point in time, value creation
opportunity, for both companies. We are increasingly excited to create the
‘Go-To’ fibre-based packaging partner of choice for all stakeholders.

“Our consistent delivery, over many years, demonstrates the quality of our
business and the capital allocation decisions we have made. For the full year
2023 we expect to deliver EBITDA of approximately €2,050 million.”

About Smurfit Kappa

Smurfit Kappa, a FTSE 100 company, is one of the leading providers of
paper-based packaging solutions in the world, with more than 47,000 employees
in over 350 production sites across 36 countries and with revenue of €12.8
billion in 2022. We are located in 22 countries in Europe, 13 in the Americas
and one in Africa. We are the only large‑scale pan-regional player in Latin
America. Our products, which are 100% renewable and produced sustainably,
improve the environmental footprint of our customers.

With our proactive 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-based 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.

We have a proud tradition of supporting social, environmental and community
initiatives in the countries where we operate. Through these projects we
support the UN Sustainable Development Goals, focusing on where we believe we
have the greatest impact.

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Forward Looking Statements

This Announcement contains certain statements that are forward-looking.
Forward-looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations of the Group about future
events, and involve risks and uncertainties because they relate to events and
depend on circumstances that will occur in the future. Although the Group
believes that current expectations and assumptions with respect to these
forward-looking statements are reasonable, it can give no assurance that these
expectations will prove to be correct. There are a number of factors that
could cause actual results and developments to differ materially from those
expressed or implied by the forward-looking statements. Forward-looking
statements should therefore be construed in the light of such factors. You are
cautioned not to place undue reliance on any forward-looking statements, which
speak only as of the date made. Other than in accordance with legal or
regulatory obligations, the Group is not under any obligation, and expressly
disclaims any intention or obligation, to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
The forward-looking statements in this document do not constitute reports or
statements published in compliance with any of Regulations 6 to 8 of the
Transparency (Directive 2004/109/EC) Regulations 2007.
 Contacts                                                                                                                                                                                                      
 Ciarán Potts                                          Lorena Monsalves                                                        Melanie Farrell                                                                 
 
                                                     
                                                                       
                                                                               
 
Smurfit Kappa                                        
Smurfit Kappa                                                          
FTI Consulting                                                                 
 
                                                     
                                                                       
                                                                               
 
T: +353 1 202 71 27                                  
T: +353 1 202 70 00                                                    
T: +353 86 401 5250                                                            
 
                                                     
                                                                       
                                                                               
 
E: ir@smurfitkappa.com (mailto:ir@smurfitkappa.com)  
E: pressoffice@smurfitkappa.com (mailto:pressoffice@smurfitkappa.com)  
E: smurfitkappa@fticonsulting.com (mailto:smurfitkappa@fticonsulting.com)      
                                                                                                                               
                                                                               
                                                                                                                               
                                                                               
                                                                                                                               
                                                                               
                                                                                                                               
                                                                               
                                                                                                                                                                                                               


 



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