Smurfit Kappa Full Year 2018 Results
February 20, 2019- Record performance across key measures
– Revenue growth of 4%, with an
underlying increase of over 7%
– EBITDA of €1,545 million, a 25% improvement. Group EBITDA margin of 17.3%
– Pre-exceptional basic EPS up 58%
– Strong free cash flow of €494 million, an increase of 61%
– ROCE of 19.3%
– Net debt to EBITDA ratio of 2.0x
- Significant acquisition activity with acquisitions in France, the Netherlands and Serbia
- Refinancing of senior credit facility and bond issuance of €1 billion
- Proposed final dividend increase of 12% to 72.2 cent per share
Performance Review and Outlook
Tony Smurfit, Group CEO, commented:
“Our 2018
performance demonstrates the Group’s transformation of recent years, which is
delivering progressively superior returns. This creates the platform for
success in 2019 and beyond. The Group delivered on or exceeded its key
measures. This reflects our market-leading positions, our innovation capability
and investment decisions. Above all else, it reflects an unrelenting focus on
delivering value to our
customer base, a performance-led culture and the quality of our people. EBITDA
of €1,545 million is materially better than 2017, representing a 25% increase,
with a corresponding EBITDA margin of 17.3%.
“Our European business performed very strongly in 2018 with underlying revenue
growth of 7%. This was driven by a combination of demand growth, input cost
recovery and the benefits of our investment programme.
“The Americas region had underlying revenue growth of 8% and our business
continued to improve as the year progressed with particularly strong
performances in our major markets of Mexico and Colombia. Across the region, we
have seen progress in input cost recovery, demand growth and, as with our
European business, the benefits of our investment plans.
“The Group has made
significant progress on its Medium-Term Plan since its announcement in February
2018, together with continued expansion of its geographic reach, including acquisitions
in France, the Netherlands and Serbia. These acquisitions are well positioned
in their respective markets and offer great opportunities for future growth,
adding three paper machines and four converting sites to the
Group’s operational footprint.
“The Group is proud to support and develop the many Corporate Social
Responsibility initiatives in the countries in which we operate. Such
initiatives are consistent with our long-term commitment to support and develop
programmes that benefit our communities, and form an integral part of our
corporate values. The year also marked a significant shift in consumer
awareness as to the benefits of renewable, recyclable and biodegradable
paper-based packaging as against less environmentally friendly materials. As
the leader in our field, we launched our ‘Better Planet Packaging’ initiative, which
will progressively promote our products and allow us to leverage our unique applications
to capitalise on this opportunity and help us deliver a more sustainable world.
“After almost 65 years of successfully operating in Venezuela, due to the
continuing actions and interference of the Government of Venezuela the Group
deconsolidated its Venezuelan operations in August 2018. The Group has
initiated international arbitration proceedings to protect the interests of its
stakeholders and seek compensation from the Government of Venezuela for its
unlawful actions.
“While we are always conscious of macro-economic risk, SKG is very well
positioned to capitalise on industry opportunities and to deliver consistently
excellent performance for all stakeholders. The current year has started
positively, and together with the continued development of sustainable
packaging, e-commerce and other demand drivers, SKG has an exciting future.
“Reflecting its confidence in the strength of and prospects for our business,
the Board is recommending a 12% increase in the final dividend to 72.2 cent per
share.”