Smurfit Kappa : Full Year 2019 Results

Key Points

• EBITDA of €1,650 million, up 7% with an increased margin of 18.2%
• Strong free cash flow of €547 million, an increase of 11% on 2018
• ROCE of 17.0%, in line with the Group's target
• Increased geographic reach with acquisitions in Bulgaria and Serbia
• Final dividend increased by 12% to 80.9 cent per share

Performance Review and Outlook

Tony Smurfit, Group CEO, commented:

'2019 represents another period of strong delivery and performance for SKG. EBITDA was €1,650 million, a 7% increase on 2018 with an increased EBITDA margin of 18.2%. Our vision is to be a globally admired company, dynamically delivering secure and superior returns for all stakeholders. Our recent performance shows progress towards the realisation of our vision.

'Across 35 countries, we continue to create market leading innovative solutions for over 65,000 customers, delivering sustainable and optimised paper-based packaging. The 2019 outcome also reflects our performance culture, which has, at its core, an unrelenting customer focus.

'During the year, we continued to strengthen our integrated model, following the acquisition of Reparenco in 2018, and our more recent acquisitions in France, Bulgaria and Serbia. These acquisitions significantly enhance our business and further expand our geographic reach. As with previous mergers and acquisitions, the new teams have integrated well and further strengthen the depth and quality of the Group.

'Our European business continued to perform strongly, delivering an EBITDA margin of 19.0%. Demand growth was ahead of the market and in line with our expectations for the year with particularly good performances in Iberia and Eastern Europe.

'The Americas region continued to perform well, delivering an increased EBITDA margin of 17.5% up from 15.7% in 2018. Our three main countries of Colombia, Mexico and the US had strong financial performances with demand in Colombia particularly strong.

'A central element of our continued success is the quality of our people. To ensure SKG attracts, retains and develops the best talent, we partner with leading global business schools such as INSEAD to develop global training programmes across our business. In the last three years alone, over 1,400 have participated in these programmes across the Group with many thousands more on local educational training programmes.

'Through our unique market offering, our ESG credentials, and a suite of industry leading applications that are impossible to replicate, SKG is increasingly well positioned to capitalise on the industry's long-term growth potential. Our product is renewable, recyclable and biodegradable and is the most effective transport and merchandising medium for our customers, while improving their environmental footprint. The consistency of our delivery strategically, operationally and financially, through our recent Medium-Term Plan, reflects both the quality of our people and our world-class asset base.

'From a demand perspective, the year has started well and, while macro and economic risks remain, we expect another year of strong free cash flow and consistent progress against our strategic objectives.

'Reflecting the Board's confidence in the unique strengths of SKG and its prospects, the Board is recommending a 12% increase in the final dividend to 80.9 cent per share.'

Download the FY 2019 Results Press Release

Download the FY 2019 Results Presentation

Forward Looking Statements

Some statements in this announcement are forward-looking. They represent expectations for the Group's business, and involve risks and uncertainties. These forward-looking statements are based on current expectations and projections about future events. The Group believes that current expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.