Smurfit Kappa packs up quarterly earnings growth of 25%

Tribute paid to retiring chairman Liam O’Mahony at group’s annual meeting

Smurfit chief financial officer Ken Bowles and chief executive Tony Smurfit at last year’s annual general meeting.

Smurfit chief financial officer Ken Bowles and chief executive Tony Smurfit at last year’s annual general meeting.

 

Packaging group Smurfit Kappa enjoyed growth of 25 per cent in earnings before interest, taxes, depreciation, and amortisation (EBITDA) during the first quarter of the year, it said in a trading update.

Smurfit Kappa, a FTSE 100 company, is one of the leading providers of paper-based packaging solutions in the world, with approximately 46,000 employees in more than 350 production sites across 35 countries and with revenue of €8.9 billion in 2018.

Its EBITDA rose to €424 million in the first three months, while revenue grew 7 per cent to €2.3 billion.

“Smurfit Kappa has delivered a very strong first quarter performance,” said outgoing chairman Liam O’Mahony at the company’s annual general meeting in Dublin. “The improved results reflects higher corrugated prices, demand growth, a relentless focus on cost efficiencies and the benefits of our capital programme.”

In Europe, first quarter organic corrugated volume growth was 2 per cent year-on-year, against a strong 2018 comparison, with corrugated pricing in line with expectations.

In the Americas, organic volume growth was 3 per cent year-on-year with “especially pleasing performances” in the company’s three largest countries: Colombia, Mexico and the US.

During the quarter, the group completed acquisitions in Bulgaria and Serbia, further expanding its geographic reach.

“The group continues to progress its industry-leading Better Planet Packaging initiative, working with brand owners, retailers and designers to develop the most sustainable, biodegradable and innovative packaging solutions for our customers,” it said.

Group confidence

Tony Smurfit, the group’s chief executive, welcomed the figures in the update and said he expected another year of progress.

“The group has had an excellent start to the year building on our established strengths of customer-focused innovation, our integrated operating model, and our ever expanding geographic reach,” he said.

“While there is invariably political and economic risk, we confidently expect to deliver another year of progress.”

Mr Smurfit paid tribute to Mr O’Mahony, a former chief executive of building materials giant CRH, for his decade as chairman of Smurfit Kappa, which he took up in the midst of the financial crisis.

Mr O’Mahony’s “steely resolve” had “helped steer Smurfit Kappa towards calmer seas”, Mr Smurfit said, while his stewardship of the company had encouraged “constructive debate” around the board table.

Irian Finan, who joined the board in 2012, has now succeeded Mr O’Mahony as chairman.