Papeles y Cartones de Europa : Jul 25, 2018 68% growth in Europac

1HY2018 PROFITS

68% GROWTH IN EUROPAC

NET PROFIT

• • In the first half of 2018, net profit stood at 54.5 million euros, while aggregate turnover was 640.6 million euros, 13.6% higher than a year ago

• • The consolidated and recurrent EBITDA figures rose by 41.9% and 67.9% on the first half of 2017, amounting to 102.3 and 105.6 million euros, respectively

• • The rise in paper prices and the downturn in the price of raw materials led to a consolidated EBITDA Margin of 21.3%, 4 percentage points higher than a year ago

• • Improvement in profitability with ROCE at 26.6%, ten percentage points higher than the figure recorded at the end of 201

• • At 30 June, Europac reduced its net debt to 104 million euros, which represents a Net Debt/EBITDA ratio of 0.6 compared with 1.1 posted at the close of 2017

Madrid, 25 July 2018.- The Board of Directors of the Europac Group has approved the accounts corresponding to the first half of 2018, registering a net profit of 54.5 million euros, 68.3% higher than in the same period of 2017. With growth in aggregate sales of more than 13%, the consolidated and recurrent EBITDA figures rose by 41.9% and 67.9%, amounting to 102.3 and 105.6 million euros, respectively.

Compared with the first six months of the previous year, the rise in the sale price of paper and the downturn in the purchase price of raw materials led to an increase in the consolidated EBITDA Margin of 4 percentage points, to stand at 21.3%. Meanwhile, ROCE reached 26.6%, ten percentage points higher than the figure recorded at the close of the 2017 financial year, while the consolidated EBIT was 78 million euros, 78.7% up on the figure achieved for the first half of 2017.

Europac Chairman, José Miguel Isidro, stated that "The buoyant results in the first half of the year are the result of the increase in the sale price of paper combined with a downturn in the price of raw materials, favourable market conditions that started to emerge in 2017, gradually improved each quarter and can now be considered stable".

Paper and Packaging Divisions

At the Paper Division, the strength of final demand of both recycled papers and kraftliner remained solid in the first half of the year, with finished product stocks levels similar to the first half of 2017. This circumstance has led to an average sale price rise of 140 euros per tonne of kraftliner paper and of 81 euros per tonne of recycled paper compared with the first half of last year.

As for raw materials, the restriction on exports to China have led to an increase in availability in Europe, with average stocks in the first half year that are 15% higher than in the first half of 2017 and an average price that is 39 euros per tonne lower than a year ago.

The Packaging Division registered a 2.6% increase in production output, whilst revenue increased by 8% to 219 million euros, although the continuous rises in paper prices are still

hampering business margins. Against this backdrop, projects are being developed to soften the impact of the rise in raw material prices and work continues towards passing on the increase in production costs to the market.

Debt reduction

Net debt, which continues to gradually decline, stood at 104 million euros at the close of the first half of the year, and represents a Net Debt/EBITDA ration of 0.6 compared with 1.1 posted at the close of 2017. It is also worthy of mention that as from the second half of 2018, Europac will benefit from better conditions of its syndicated loan signed in the month of July, which sees a reduced interest rate of 20 additional basis points.

Shareholder remuneration

Between the interim dividend paid out in February and the supplementary dividend paid out on 4 July, the company has distributed a total of 0.418 euros per share charged to 2017 profits. This amounts to a total of 38.9 million euros, or a payout of 50% and a 35% increase on the dividend paid out last year.

More information

Fernando Vidal Tel. [phone]