EQS-News: Mayr-Melnhof Karten AG / Key word(s): Annual results Mayr-Melnhof Karten AG: MM publishes consolidated results for 2023 March 12, 2024 / 07:58 CET/CEST The issuer/publisher is responsible for the content of the announcement. ═════════════════════════════════════════ ═════════ ════════════════════════ Earnings as expected below previous year’s record level • Sharp decline in demand as well as significant market and investment-related standstills at MM Board & Paper depress earnings • Pleasing earnings performance at MM Packaging • Most extensive modernization program implemented to increase the competitiveness of MM Board & Paper • Successful integration of last year’s acquisitions in the resilient pharmaceutical packaging sector • Profit & Cash Protection Plan proves itself • Dividend proposal of EUR 1.50 follows long-standing distribution policy • Positive volume trend for MM Board & Paper at the beginning of 2024, but continued pressure on margin Key figures of the MM Group – IFRS Consolidated in EUR million 2023 2022 +/- Sales revenue 4,164.4 4,682.1 -11.1% Adjusted EBITDA 450.2 769 ,0 -41.5% Adjusted operating result 229.2 562.4 -59.2% Operating margin (in %) 5.5% 12.0% -651 bp Earnings before taxes 136.7 467.0 -70, 7% net profit 89.1 345.3 -74.2% earnings per share (in EUR) 4.36 17.19 Cash flow from operating activities 786.2 299.7 +162.3% Free cash flow 369.8 ( 19.7) +1,975.1% Peter Oswald, MM CEO: “In 2023, after the record result in the previous year, the MM Group faced significantly reduced demand in the paper and cardboard industry as well as increasing price pressure. In addition to the destocking in the supply chain, inflation-related changes in consumer behavior, which led to lower consumption of everyday goods, as well as the overall economic slowdown in our main European markets were key reasons. The difficult general conditions were reflected in particular in the weak earnings and volume development of the MM Board & Paper division. In addition to significant market-related machine downtimes, there were also significant investment-related shutdowns in the course of implementing the most extensive modernization program to date in three large cardboard mills. In contrast, the MM Packaging division recorded a solid performance overall despite a heterogeneous packaging market. In addition, last year’s acquisitions in the resilient pharmaceutical packaging sector were successfully integrated with earnings development above plan. The decline in the adjusted operating result to EUR 229.2 million after EUR 562.4 million in 2022 resulted primarily from the MM Board & Paper division due to volume and price reasons, while MM Packaging recorded a significant increase in both earnings and margin recorded. Given the expectation of a slow recovery in demand, MM has focused on volume hedging and gains with reasonable margins. The Profit & Cash Protection Plan, which was launched in mid-2023 and which, in addition to cost reductions in all areas, provides for a significant reduction in working capital and a reduction in capex cash-outs, already made a significant contribution to reducing net debt to 1,261.9 million in the reporting year . EUR (December 31, 2022: EUR 1,481.5 million). In accordance with the earnings development and long-term dividend policy, which provides for the distribution of one third of the earnings, the 30th Annual General Meeting on April 24, 2024 will receive a dividend of EUR 1.50 per share (2022: EUR 4.20) for the financial year 2023 proposed.” EARNINGS STATEMENT At EUR 4,164.4 million, the group’s consolidated sales revenue was 11.1% or EUR 517.7 million below the previous year’s value (2022: EUR 4,682.1 million). A decline in the MM Board & Paper division, which was primarily due to volumes and prices, was offset by an increase due to acquisitions in the MM Packaging division. The decline in adjusted operating profit to EUR 229.2 million after EUR 562.4 million in 2022 resulted primarily from the MM Board & Paper division due to volume and price reasons, while MM Packaging recorded a significant increase. The Group’s operating margin was therefore 5.5% (2022: 12.0%) and the return on capital employed was 6.5% (2022: 17.9%). Adjusted EBITDA was EUR 450.2 million (2022: EUR 769.0 million), resulting in an EBITDA margin of 10.8% (2022: 16.4%). Financial income increased to EUR 8.7 million (2022: EUR 4.3 million). The increase in financial expenses from EUR -32.1 million to EUR -58.3 million resulted in particular from the increase in interest rates for variable-interest loans as well as further financing for acquisitions and organic growth projects. The “Other financial result – net” changed to EUR -11.4 million (2022: EUR -15.5 million), primarily due to foreign currency effects. Earnings before taxes were EUR 136.7 million after EUR 467.0 million in the previous year. Income taxes amounted to EUR 47.6 million (2022: EUR 121.7 million), resulting in an effective group tax rate of 34.8% (2022: 26.1%). The annual profit amounted to EUR 89.1 million (2022: EUR 345.3 million). DEVELOPMENT OF THE 4TH QUARTER With a slight increase in volumes in the MM Board & Paper division, which was offset by a decline in the MM Packaging division, the 4th quarter was characterized by a heterogeneous picture. However, as in previous quarters, the pressure on prices and margins continued. At EUR 967.9 million, consolidated sales revenue was below the same period in the previous year due to volume and price reasons (4th quarter of 2022: EUR 1,231.7 million). The group’s adjusted operating result fell to EUR 38.8 million, particularly due to price factors (4th quarter of 2022: EUR 109.1 million). The operating margin was 4.0% (4th quarter of 2022: 8.9%). Earnings before taxes amounted to EUR 17.8 million (4th quarter of 2022: EUR 50.2 million), the profit for the period was -2.1 million EUR (4th quarter of 2022: EUR 30.0 million) . MM Board & Paper recorded an adjusted operating result of EUR -24.2 million after EUR 87.4 million in the fourth quarter of the previous year, primarily as a result of lower average prices. The operating margin was -5.4% (Q4 2022: 14.1%). At EUR 63.0 million, MM Packaging’s adjusted operating result was above the previous year’s quarter, primarily due to acquisitions (4th quarter of 2022: EUR 21.7 million). The operating margin was 11.2% (Q4 2022: 3.3%). OUTLOOK In the highly competitive European cardboard and paper sector, MM Board & Paper is currently seeing a positive volume trend, but at the same time the pressure on margins continues. Although the destocking in the supply chain has largely been completed, we expect only a slow market recovery due to the weak economic situation in Europe and continued subdued consumer spending. In view of the difficult general conditions on the non-European export markets, continued oversupply and subdued capacity utilization in Europe can be expected. The pressure to increase competitiveness is constantly increasing. This also applies to MM Packaging, although this area has higher overall resilience due to its broad positioning. Against this background, our Profit & Cash Protection program will be consistently pursued in 2024 and supplemented by targeted structural adjustment measures. Recent increases in manufacturing costs should be passed on through corresponding price adjustments. The investment volume of around EUR 300 million expected for 2024, which includes overflows from the previous year, will focus on selective projects to increase competitive strength. With more sustainable and innovative packaging solutions as well as the asset base that has been significantly optimized in recent years and solid financing, MM is very well positioned to successfully master the ongoing challenging market situation. —————————– The press release and a video statement from the board are available on the Internet at: (1) www.mm.group available. The 2023 annual report will be available from April 3, 2024. Next date: April 23, 2024 Results for the 1st quarter of 2024 For further information, please contact: Mag. Stephan Sweerts-Sporck, Investor Relations, Mayr-Melnhof Karten AG, Brahmsplatz 6, A-1040 Vienna, Tel.: + 43 1 501 36-91180, email: investor.relations@mm.group, Website: https://www.mm.group
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═════════════════════════════════════════ ═════════ ════════════════════════ Language: German Company: Mayr-Melnhof Karten AG Brahmsplatz 6 1040 Vienna Austria Telephone: 0043 1 501 36 91180 Fax: 0043 1 501 36 91391 Email: investor.relations@mm.group
Internet: www.mm.group
ISIN: AT0000938204 WKN: 93820 Indices: ATX Stock exchanges: open market in Berlin, Frankfurt (Basic Board), Munich, Stuttgart, Tradegate Exchange; Vienna Stock Exchange (official trading) EQS News ID: 1855715 End of the announcement EQS News Service 1855715 03/12/2024 CET/CEST References Visible links 1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=1df6f449ee687d6c4be63c3d8437541d&application_id=1855715&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news