By Business & Finance 
Pictured (L-R): Tony Smurfit, CEO; Liam O’Mahony, chairman; and Ken Bowles, CFO, Smurfit Kappa
Solid growth and year-on-year earnings progression in the first quarter were reported at Smurfit Kappa, heralding a strong performance for the company again this year.
Smurfit Kappa Group has reported solid results for Q1, with EBITDA of €281m. The Group also experienced growth of 6% with improved margin at 14%. EBITDA in the European operations was €209m, and box volumes were 2% higher year on year, in line with forecasts. Overall corrugated volumes were 1% higher with lower-margin sheet volumes down 4%. EBITDA in the Americas reached €82m and net debt at €3029m was lower than at year-end; another positive.
Tony Smurfit, Smurfit Kappa CEO, commented: “Solid year-on-year earnings progression in the first quarter of 2016 with 6% EBITDA growth was driven by an improved operating performance and the positive impact of acquisitions completed in 2015. Our well-invested, geographically diversified and vertically integrated operations will continue to provide us with a resilient platform to drive earnings and free cashflows.”
SKG also reported the successful completion of two major upgrades of paper machines in the Netherlands and Spain, and a €40 per tonne price increase in the European brown kraftliner effective from June 15th.
“We continue to see good levels of demand for packaging across almost all of the markets in which we operate,” Tony Smurfit said. “During the quarter, currencies had a distorting effect which on a like-for-like basis had a negative translation effect of almost €10m on EBITDA. In addition, the rebuilds of our Roermond and Sanguesa mills adversely impacted profitability in the quarter. However, both projects will enhance our European system’s cost position and commercial offering.”
TAKING STOCK
The CEO also said that following the completion of over €380m of acquisitions in 2015, the Group’s focus is on the successful integration of these businesses through 2016 with the capacity for further bolt-on acquisitions. “Our capital investment programme of over €450m per annum supports our objective to deliver higher-quality packaging and merchandising solutions to our global customers, while continually driving operational efficiencies through our integrated system.”
Following the commencement of sterling trading on the London Stock Exchange on March 1st, the Group was formally confirmed by the UK Listing Authority as a premium listed company on April 25th. On the same date the Group’s Irish listing was switched to a secondary listing, but its participation in all of its existing euro indices were maintained.
The Group held a Capital Markets Day in the London Stock Exchange on the morning of June 3rd with the aim of providing attendees with an overview
of the Group alongside a review of current key business initiatives and operational drivers.
The event was also attended by other key members of SKG’s executive and operational management teams across Europe and the Americas.
“Assuming broad industry conditions prevail, we expect good earnings growth in 2016, ” Tony Smurfit concluded.
About the CEO
Tony Smurfit was appointed Group chief executive of Smurfit Kappa in August 2015.
Previously, he worked in several roles within the group in Europe and the US since joining over 20 years ago. He served as chief operations officer between 2002 and 2015, and chief executive of Smurfit Europe between 1999 and 2002. He is also a non-executive director of C&C Group.
He then guided through a merger with Kappa Packaging in 2005, creating a worldwide packaging giant. Tony Smurfit played an instrumental role when the Group was floated on the Dublin and London Stock Exchanges in 2007.
