REG-Smurfit Kappa Group PLC Smurfit Kappa 2021 First Quarter Trading Update

Smurfit KappaAnnouncement

30/04/2021 07:00

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Smurfit Kappa 2021 First Quarter Trading Update

 

30 April: Smurfit Kappa Group plc (‘SKG’, 'Smurfit Kappa' or ‘the
Group’) today announced a trading update for the 3 months to 31 March 2021.

First Quarter Overview – a structurally improved business, delivering:


 * Underlying Revenue growth of 6% to €2,269 million

 * EBITDA of €386 million

 * EBITDA Margin of 17.0%

Tony Smurfit, Group CEO, commented:

“The first quarter was remarkable in many ways. We had strong corrugated
volume growth in practically every area and all markets in which we operate.
With unprecedented industry wide shortages of supply and input cost pressures,
paper prices have moved up sharply. We are recovering these input costs in
line with our expectations. Against this backdrop, I am very proud of our team
who have continued to deliver in these exceptional times, ensuring security of
supply to our customers while also continuing to support them through our
approach to innovation and our sustainable packaging products. Smurfit Kappa
has, over the last number of years, through continuous investment and
acquisitions, structurally improved the business for the benefit of all
stakeholders.

“I am also happy to report that both Moody’s and Standard & Poor’s
have recently upgraded our long-term issuer rating to Baa3 and BBB-
respectively, in addition to Fitch’s BBB- rating.

“Our strong first quarter performance has set the foundation for accelerated
revenue and earnings growth as we move through 2021. This performance and
these prospects reflect the strength and quality of Smurfit Kappa.”

Performance Overview

Corrugated volume growth in the first quarter was up approximately 7% in both
Europe and the Americas. This demonstrates SKG’s exposure to high-growth
markets, sectors and channels including innovative and sustainable packaging
solutions and e-commerce.

Containerboard prices have increased in the first quarter and again at the
start of the second quarter as a result of strong demand and higher recovered
fibre and other costs. SKG’s recovered fibre cost has increased by
approximately €90 million versus the first quarter of last year. We are
progressively recovering these input costs through our corrugated box system.

In addition to cost pressures, the industry is experiencing supply disruptions
and shortages of packaging papers globally. Against this market backdrop, our
integrated business model is again, proving a key differentiator with
continuity of supply to our customer base.

Our Better Planet Packaging initiative continues to drive significant interest
among our customer base with over 2,700 attendees joining our biennial
conference in March. The increased value and application of corrugated as the
most sustainable merchandising and transport medium is evermore apparent. This
will remain a strong driver of future growth as paper is renewable, recyclable
and biodegradable and the product of choice by consumers for a more
sustainable world.

We are accelerating our capital investment plans with many high return
projects that will enhance shareholder returns. These include the construction
of mega plants and the acquisition of many converting machines in order to
meet our customers’ demand growth and continue our cost optimisation
programmes. In addition, a number of paper investments are being deployed to
further strengthen our integrated model and improve our sustainability
footprint.

About Smurfit Kappa

Smurfit Kappa, a FTSE 100 company, is one of the leading providers of
paper-based packaging solutions in the world, with approximately 46,000
employees in over 350 production sites across 35 countries and with revenue of
€8.5 billion in 2020. We are located in 23 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.

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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.



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Smurfit Kappa Group PLC

Garrett Quinn 

Smurfit Kappa

T: +353 1 202 71 80

E: ir@smurfitkappa.com (mailto:ir@smurfitkappa.com)

Melanie Farrell 

FTI Consulting

T: +353 86 401 5250

E: smurfitkappa@fticonsulting.com (mailto:smurfitkappa@fticonsulting.com)


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