TIDMSKG TIDMSKG
Smurfit Kappa Group plc ('SKG', 'Smurfit Kappa' or 'the Group')
today announced a trading update for the 3 months to 31 March 2020
and an update on the impact of COVID-19 on its business.
First Quarter Overview
-- Revenue of EUR2,194 million
-- EBITDA of EUR380 million
-- EBITDA margin of 17.3%
Performance Overview,
Tony Smurfit, Group CEO, commented:
"SKG is closely monitoring the development of the COVID-19
pandemic and its impact across our people, our operations and the
broader stakeholder base. Our immediate, primary focus is to
protect our employees and continue to meet our customers'
needs.
"During the quarter, all of our facilities were operational as a
result of our employees' dedication and commitment. The scale and
geographic reach of our operations has also ensured that our
extensive and diverse customer base has been able to deliver its
essential and critical supplies. We are an integral part of today's
vital supply-chains, whether it is ensuring that retailers remain
supplied with food and other basic goods or ensuring that critical
pharmaceutical and medical supplies and devices reach hospitals and
other health care facilities where they are needed to fight this
pandemic. Our unique position, with an integrated, secure system of
over 350 facilities and a global reach, is a significant strength.
Equally, our unique culture embraced by over 46,000 employees which
is supported by our core values of safety, loyalty, integrity and
respect, continues to give me great confidence for the future.
"In an obviously challenging operating environment I am very
proud of the dedication shown by all of my SKG colleagues in
delivering an EBITDA result of EUR380 million, with a Group margin
of 17.3%. Volumes in Europe increased by 3% or approximately 2% on
an organic basis, while demand in the Americas grew by 3.5%
year-on-year.
"During these uncertain times, we have a heightened focus on
cost reduction while maintaining our market-leading innovation and
sustainability offering. While the full extent and effects of the
macro and economic risks brought on by COVID-19 are unclear, SKG
remains very well positioned both financially and
operationally."
COVID-19 Priorities
Our People
Our priority is the welfare of our people, their families and
the communities in which we operate. Our values of safety, loyalty,
integrity and respect have never been more relevant for us as an
organisation and we see them being demonstrated by our colleagues
right across the business, at every level. We are working together
to protect each other, to help our communities by playing our part
in containing the COVID-19 virus where possible, to adapt our ways
of working and find the best ways to succeed against this pandemic.
Having learned from our colleagues in our Italian operations, we
have introduced several Group-wide measures to protect our
employees and supported this with frequent communications to help
them respond safely to the challenges posed by COVID-19.
Our Customers
All our facilities continue to operate, giving our customers
continued security of supply of our innovative, sustainable
packaging solutions. SKG has been deemed an 'Essential Business' in
generally all of the countries in which we operate and we are
uniquely positioned to continue to service our customers' needs
given our unrivalled operational footprint and broader
market-offering. SKG has a critical role in the fight against
COVID-19, as without our packaging many vital supply chains
including medical equipment, pharmaceutical, food and sanitation
products would not be delivered.
Our Financial Position
At the end of the first quarter of 2020, the Group had liquidity
of over EUR1.5 billion, average debt maturities of over 5 years, no
bond maturity until 2024, all of which is supported by the Group's
strong operational free-cash-flow.
Our Balance Sheet remains strong with leverage of 2.2x at the
end of the quarter. We are rigorously managing our working capital
and we currently estimate that capital expenditure for 2020 will
reduce from previous guidance of EUR615 million, to be in the range
of EUR500-550 million (EUR730 million in 2019).
Dividend
The Group's performance in the first quarter was strong and its
balance sheet, liquidity position and cash flow generation continue
to give the Board confidence in the prospects for our business and
its strategic direction. However, in light of the increased macro
uncertainty due to the COVID-19 pandemic, the Board believes it is
prudent to no longer recommend the previously proposed final
dividend of 80.9 cent per share and as a result to withdraw
Resolution 3 at the forthcoming AGM on 30 April 2020.
Beyond the current uncertainty that COVID-19 brings, the Board
remains committed to providing shareholders with an attractive and
progressive dividend stream. The Board will make an assessment of
the quantum and timing of a dividend later in the year when the
effects of the current COVID-19 pandemic are better understood.
Management call
The Group's management team will host a conference call for
analysts and institutional investors at 09.00 BST (04.00 EDT) on
this date. Dial in details for this call are:
Europe: + 44 333 300 0804
Ireland: + 353 1 431 1252
USA: + 1 631 913 1422
Passcode: 49891890#
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of Smurfit Kappa Group plc is Michael O'Riordan, Company
Secretary. The date and time of this announcement is the same as
the date and time that it has been communicated to the media, at
7am on 15 April 2020.
About Smurfit Kappa
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 over 350 production sites across
35 countries and with revenue of EUR9.0 billion in 2019. We are
located in 23 countries in Europe, and 12 in the Americas. We are
the only large-scale pan-regional player in Latin America.
With our pro-active team, we relentlessly use our extensive
experience and expertise, supported by our scale, to open up
opportunities for our customers. We collaborate with
forward-thinking customers by sharing superior product knowledge,
market understanding and insights in packaging trends to ensure
business success in their markets. We have an unrivalled portfolio
of paper-packaging solutions, which is constantly updated with our
market-leading innovations. This is enhanced through the benefits
of our integration, with optimal paper design, logistics,
timeliness of service, and our packaging plants sourcing most of
their raw materials from our own paper mills.
Our products, which are 100% renewable and produced sustainably,
improve the environmental footprint of our customers.
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smurfitkappa.com
Forward Looking Statements
This Announcement contains certain statements that are
forward-looking. Forward-looking statements are prospective in
nature and are not based on historical facts, but rather on current
expectations of the Group about future events, and involve risks
and uncertainties because they relate to events and depend on
circumstances that will occur in the future. Although the Group
believes that current expectations and assumptions with respect to
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to be correct. There
are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied
by the forward-looking statements. Forward-looking statements
should therefore be construed in the light of such factors. You are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date made. Other than in
accordance with legal or regulatory obligations, the Group is not
under any obligation, and expressly disclaims any intention or
obligation, to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
The forward-looking statements in this document do not constitute
reports or statements published in compliance with any of
Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007.
Contacts
Garrett Quinn Melanie Farrell
Smurfit Kappa FTI Consulting
T: +353 1 202 71 80 T: +353 1 765 08 00
E: ir@smurfitkappa.com E: smurfitkappa@fticonsulting.com
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200414006030/en/
CONTACT:
Smurfit Kappa Group PLC
SOURCE: Smurfit Kappa Group PLC
Copyright Business Wire 2020
(END) Dow Jones Newswires
April 15, 2020 02:00 ET (06:00 GMT)
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