One of Ireland’s first ever major multinationals, the Smurfit Kappa Group is still expanding globally under the stewardship of Gary McGann.
Gary McGann is group CEO of the Smurfit Kappa Group plc (SKG). SKG is one of the world’s leading paper-based packaging companies, with a turnover last year of over €7.5 billion and pre-tax profits of €299 million. SKG employs approximately 40,000 employees in over 350 plants worldwide.
SKG excellent recent results have been achieved despite difficult conditions and downward pressure on paper prices in Europe.
Gary McGann has been vital to this continued success since being made group CEO in 2002. He has presided over important transitional periods such as the company’s merger and subsequent IPO.
Educated through Irish at Coláiste Mhuire in Dublin, McGann graduated with a Bachelor of Arts from University College Dublin (UCD). He is a fellow of the Association of Chartered Accountants and also earned a Masters in Management Science Trinity College. McGann was appointed Smurfit Kappa Group CEO in November 2002. He was previously president and COO of the Smurfit Group since January 2000, having joined the company in 1998 as chief financial officer.
He had held a number of senior positions in both the private and public sectors over the previous 20 years, including chief executive of Gilbeys of Ireland and Aer Lingus Group plc. He is currently chairman of Aon Ireland and is a director of United Drug plc.
Headquartered in Dublin, Smurfit Kappa is a world leader in paper-based packaging and operates out of 30 countries across Europe and Latin America where it is the only pan-regional operator.
The company originates from the small box makers Jefferson Smurfit & Sons which was founded in 1934 and grew to become one of Ireland’s leading multinational companies.
In 2005, the Smurfit Kappa Group was created when the Jefferson Smurfit Group (JSG) merged with Dutch rival Kappa and returned to the market as Smurfit Kappa. The merger made Smurfit Kappa twice as big as its nearest competitor in Europe.
In 2007, the Smurfit Kappa Group was successfully listed on the Dublin and London Stock Exchanges. Since the IPO in 2007, the group’s net debt has reduced by approximately €630mn, materially improving its capital structure and financial flexibility.
SKG’s debt has fallen every quarter since the IPO according to the company. With the increasing focus on environmentally friendly business activity, SKG issued its second Sustainability Report in August 2009 underpinning the relative attractiveness of paper packaging over other forms of packaging.
Today, SKG is a world leader in paper-based packaging with operations in Europe and Latin America. SKG operates in 21 countries in Europe and is the European leader in containerboard, solid board and corrugated packaging and has a significant position in several other paper packaging market
SKG reported pre-tax profits of €299mn last year, almost treble the previous year’s €103mn profit. Total revenue for the group rose by 10% from 2010 to €7.36bn, while underlying earnings grew by 12% to just over €1bn. Earnings per share before exceptional items rose by 69% to €1.
In September, SKG announced a $340mn cash deal to buy US-based rival Orange County Container Group (OCCG) in an effort to deliver immediate earnings growth and to boost its presence in the Southern US and Mexico.
Smurfit says that OCCG is expected to generate $53mn of EBITDA in the 2012 financial year. Upon the announcement of the deal, McGann said that OCCG was a strong strategic fit with SKG’s existing businesses and is expected to deliver at least $14mn of synergies by the end of year two.
“SKG has a proven track record of identifying, acquiring and integrating businesses,” said McGann. “This transaction creates synergies for the group delivering value and earnings growth for our shareholders. The continued strength of our operating performance and consequent net debt reduction has increased the range of strategic and financial options for the group.”
Gary McGann was named Business & Finance ‘Business Person of the Year’ in 2008 and is a former President of IBEC.