EQS-News: Mayr-Melnhof Karton AG / Key word(s): Annual Results
Mayr-Melnhof Karton AG: MM reports Annual Results 2023
12.03.2024 / 07:58 CET/CEST
The issuer is solely responsible for the content of this announcement.
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Earnings as expected below previous year’s record level
• Sharp decline in demand and significant market- and capex-related
downtime at MM Board & Paper weigh on results
• Strong profit performance at MM Packaging
• Comprehensive modernisation programme to increase competitiveness of
MM Board & Paper implemented
• Successful integration of last year’s acquisitions in the resilient
area of pharmaceutical packaging
• Profit & cash protection plan proves effective
• Dividend of EUR 1.50 proposed in line with long-standing dividend
policy
• Positive volume trend for MM Board & Paper at beginning of 2024,
however pressure on margins is continuing
Group Key indicators – IFRS
Consolidated, in millions of EUR 2023 2022 +/-
Sales 4,164.4 4,682.1 -11.1 %
Adjusted EBITDA 450.2 769.0 -41.5 %
Adjusted operating profit 229.2 562.4 -59.2 %
Operating margin (in %) 5.5 % 12.0 % -651 bp
Profit before tax 136.7 467.0 -70.7 %
Profit for the year 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, comments: “After the record result of the previous
year, the MM Group faced a significantly lower demand in the paper and
cartonboard industry as well as increasing price pressure in 2023. In
addition to destocking in the supply chain, inflation-related changes in
consumer behaviour which led to lower consumption of everyday goods and
the overall economic slowdown in our European main markets were the main
causes.
The difficult general conditions were reflected in particular in the weak
result and volume development in the division MM Board & Paper. In
addition to significant market-related machine downtimes, there was also
considerable capex-related downtime as part of the implementation of the
so far most extensive modernisation programme at three large cartonboard
mills.
In contrast, the division MM Packaging recorded an overall solid
performance despite a heterogeneous packaging market. Furthermore, last
year’s acquisitions in the resilient area of pharmaceutical packaging were
successfully integrated with a result development above plan.
The decline in adjusted operating profit to EUR 229.2 million after EUR
562.4 million in 2022 primarily resulted volume- and price-related from
the division MM Board & Paper, while MM Packaging recorded a significant
increase in both profit and margin.
With demand expected to recover only slowly, MM has focussed on
safeguarding and gaining volumes at reasonable margins. The profit & cash
protection plan launched in mid-2023, which provides for a significant
reduction in working capital and a reduction in capex cash-outs in
addition to cost reductions in all areas, has already made a significant
contribution to reducing net debt to EUR 1,261.9 million in the reporting
year (December 31, 2022: EUR 1,481.5 million).
In line with the profit development and long-term dividend policy, which
provides for the distribution of one third of profit, a dividend of EUR
1.50 per share (2022: EUR 4.20) for the financial year 2023 will be
proposed to the 30th Annual Shareholders’ Meeting on April 24, 2024.”
INCOME STATEMENT
At EUR 4,164.4 million, the Group’s consolidated sales were 11.1 % or EUR
517.7 million below the previous year’s figure (2022: EUR 4,682.1
million). A volume- and price-related decline in the division MM Board &
Paper, was offset by an acquisition-related increase in the division MM
Packaging.
The decrease in adjusted operating profit to EUR 229.2 million after EUR
562.4 million in 2022 was primarily volume- and price-related from the
division MM Board & Paper, 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 amounted to EUR 450.2 million (2022: EUR 769.0 million), resulting
in an EBITDA margin of 10.8 % (2022: 16.4 %).
Financial income went up 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 rise in interest rates for
variable-interest loans and further financing of the accomplished
acquisitions and organic growth projects. “Other financial result – net”
changed to EUR -11.4 million (2022: EUR -15.5 million), in particular
owing to currency translation.
Profit before tax was EUR 136.7 million compared to EUR 467.0 million in
the previous year. Income tax expense amounted to EUR 47.6 million (2022:
EUR 121.7 million), resulting in an effective Group tax rate of 34.8 %
(2022: 26.1 %).
Profit for the year totalled EUR 89.1 million (2022: EUR 345.3 million).
DEVELOPMENT IN THE 4^TH QUARTER
With a slight volume growth in the division MM Board & Paper, which was
offset by a decline in the MM Packaging division, the 4^th quarter was
characterised by a heterogeneous picture. As in the previous quarters,
however, the pressure on prices and margins continued. Consolidated sales
of EUR 967.9 million were volume- and price-related below last year’s
period (4^th quarter 2022: EUR 1,231.7 million).
The Group’s adjusted operating profit decreased mainly price-related to
EUR 38.8 million (4^th quarter 2022: EUR 109.1 million). The operating
margin was 4.0 % (4^th quarter 2022: 8.9 %). Profit before tax amounted to
EUR 17.8 million (4^th quarter 2022: EUR 50.2 million), profit for the
period to EUR -2.1 million (4^th quarter 2022: EUR 30.0 million).
MM Board & Paper recorded an adjusted operating profit of EUR -24.2
million after EUR 87.4 million in the 4^th quarter of the previous year,
mainly as a result of lower average prices. The operating margin was -5.4
% (4^th quarter 2022: 14.1 %).
The adjusted operating profit of MM Packaging at EUR 63.0 million was
above the previous year’s quarter (4^th quarter 2022: EUR 21.7 million),
particularly acquisition-related. The operating margin amounted to 11.2 %
(4^th quarter 2022: 3.3 %).
OUTLOOK
In the highly competitive European cartonboard and paper sector, MM Board
& Paper is currently experiencing a positive volume trend, however, at the
same time pressure on margins is continuing. Although 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
restrained consumer spending. At the same time, due to difficult general
conditions on non-European export markets continued oversupply and
dampened capacity utilisation in Europe are expected to remain.
The pressure to increase competitiveness is therefore constantly
increasing. This also applies to MM Packaging, although this sector is
overall more resilient due to its broad positioning. Against this
backdrop, our profit & cash protection programme will be consistently
continued in 2024 and supplemented by targeted structural adjustment
measures. Recent increases in production costs will be passed on through
corresponding price adjustments.
The capex volume of around EUR 300 million expected for 2024, which
includes carry-overs from the previous year, will be focussed on selected
projects to improve competitiveness.
With more sustainable and innovative packaging solutions as well as the
significantly optimised asset base in recent years and solid financing, MM
is very well positioned to successfully manage the persistently
challenging market situation.
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The press release and a video statement from the Management Board are
available on the internet under (1) www.mm.group.
The Annual Report 2023 will be available as of April 3, 2024.
Forthcoming Results:
April 23, 2024 Results for the 1^st quarter of 2024
For further information, please contact:
Stephan Sweerts-Sporck, Investor Relations, Mayr-Melnhof Karton AG,
Brahmsplatz 6, A-1040 Vienna, Tel.: +43 1 501 36-91180,
E-Mail: investor.relations@mm.group, Website: https://www.mm.group
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12.03.2024 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com
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Language: English
Company: Mayr-Melnhof Karton AG
Brahmsplatz 6
1040 Wien
Austria
Phone: 0043 1 501 36 91180
Fax: 0043 1 501 36 91391
E-mail: investor.relations@mm.group
Internet: www.mm.group
ISIN: AT0000938204
WKN: 93820
Indices: ATX
Listed: Regulated Unofficial Market in Berlin, Frankfurt (Basic
Board), Munich, Stuttgart, Tradegate Exchange; Vienna Stock
Exchange (Official Market)
EQS News ID: 1855715
End of News EQS News Service
1855715 12.03.2024 CET/CEST
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