EQS-News: Mayr-Melnhof Karton AG: MM reports half-year results for 2023
EQS-News: Mayr-Melnhof Karton AG / Key word(s): Half Year Results
Mayr-Melnhof Karton AG: MM reports half-year results for 2023
10.08.2023 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
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• Results below previous year as expected
• Growth in pharma packaging due to previous year’s acquisitions
• Inflation-related restraint in consumer spending weighs on end markets
• Strong decline in volumes at MM Board & Paper related to market demand
and capex
• No recovery in 3Q foreseeable
• Profit and cash protection program initiated
• Adaptation of investment program: Kwidzyn project start postponed to
2024
• Margin improvement – central aim of the initiated measures
Group Key indicators – IFRS
Consolidated, in millions of EUR 1^st HY/2023 1^st HY/2022 +/-
Sales 2,181.4 2,218.5 -1.7 %
EBITDA 214.3 375.8 -43.0 %
Operating profit 104.0 285.0 -63.5 %
Operating margin (in %) 4.8 % 12.8 % -808 bp
Profit before tax 77.2 270.2 -71.4 %
Profit for the period 63.3 205.8 -69.2 %
Earnings per share (in EUR) 3.12 10.24
Peter Oswald, MM CEO, comments: “The development of the MM Group in the
1^st half-year reflects the continuing weak demand in the cartonboard and
paper sector after the record year 2022. As already communicated in
mid-June, the significant decline in results is mainly attributable to the
weak volume development in the division MM Board & Paper. In contrast, the
division MM Packaging was able to record an overall positive performance
with the successful integration of last year’s acquisitions in the
resilient pharmaceutical packaging sector and factoring in one-off
restructuring costs.”
The historically unusual decline in volumes on the European cartonboard
market was higher than expected, mainly as a result of the restraint in
consumer spending due to inflation as well as reduction of high
inventories at customers. In addition, MM recorded considerable
capex-related downtime at the Frohnleiten and Neuss board mills in the
1^st half-year. Together with the annual maintenance downtime at the
Kwidzyn pulp mill, this led to a significant decline in volumes and
results in the MM Board & Paper division.
Due to the weak overall economy and sluggish private consumption, there
are currently no signs of an improvement in demand. As a result,
substantial machine downtime will again be necessary at Board & Paper in
the 3^rd quarter, aligning production with market demand. Taking this into
account, a recovery of results is not yet predictable. In response, a
profit and cash protection program has been initiated aiming at
comprehensive cost savings, optimizing working capital and reducing new
capital expenditures.
“Securing long-term value creation, resilience, and growth in sustainable
and innovative packaging for consumer goods is at the core of our business
model. Through strengthening our competitiveness and quality leadership
during our recent transformation as well as strategic investments in a
competitive asset base and product portfolio, the MM Group is very well
positioned to benefit from a promising long-term perspective.”, underlines
Oswald.
INCOME STATEMENT
The Group’s consolidated sales of EUR 2,181.4 million were slightly below
the previous year’s figure (1^st half of 2022: EUR 2,218.5 million). A
primarily volume-related decline in the division MM Board & Paper was
offset by an acquisition- and price-related increase in the division MM
Packaging.
Operating profit decreased by EUR 181.0 million from EUR 285.0 million to
EUR 104.0 million. This decline primarily results from extensive market-
and capex-related downtime at MM Board & Paper. The Group’s operating
margin was therefore at 4.8 % (1^st half of 2022: 12.8 %).
Financial income amounted to EUR 3.7 million (1^st half of 2022: EUR 2.3
million). The increase in financial expenses from EUR -15.6 million to EUR
-24.7 million is mainly due to higher interest expenses for
Schuldscheindarlehen and financing of accomplished acquisitions and
organic growth projects. “Other financial result – net” changed from EUR
-1.6 million to EUR -5.9 million, in particular owing to currency
translation.
At EUR 77.2 million, profit before tax was also lower than the previous
year’s figure (1^st half of 2022: EUR 270.2 million). Income tax expense
amounted to EUR 13.9 million after EUR 64.4 million in the 1^st half of
the previous year, resulting in an effective Group tax rate of 17.9 %
(1^st half of 2022: 23.8 %).
Profit for the period decreased from EUR 205.8 million to EUR 63.3
million.
DEVELOPMENT IN THE 2^ND QUARTER
Due to further market- and capex-related downtime in the division MM Board
& Paper as well as weaker demand in some sales markets of MM Packaging,
consolidated sales of EUR 1,059.3 million were below the 1^st quarter of
2023 (EUR 1,122.1 million) as well as the previous year’s level (2Q 2022:
EUR 1,158.1 million).
The Group’s operating profit decreased to EUR 42.4 million after EUR 61.6
million in the 1^st quarter of 2023 and EUR 173.9 million in the 2^nd
quarter of the previous year. In addition to the extended modernization
shutdown at the Neuss board mill, this was mainly attributable to the
annual maintenance downtime at the Kwidzyn pulp mill. The operating margin
came in at 4.0 % (1Q 2023: 5.5 %; 2Q 2022: 15.0 %). Profit for the period
amounted to EUR 28.4 million (1Q 2023: EUR 34.9 million; 2Q 2022: EUR
126.3 million).
In the 2^nd quarter, capacity utilization in the MM Board & Paper division
was lower than in the previous quarter and the previous year’s quarter.
Downtime-related the operating margin amounted to -2.0 % (1Q 2023: 5.3 %;
2Q 2022: 18.1 %).
MM Packaging achieved a solid operating margin of 8.6 % in the 2^nd
quarter (2Q 2022: 8.4 %), after the previous quarter’s figure (1Q 2023:
5.2 %) having been influenced by restructuring measures at a packaging
site in Germany.
OUTLOOK
Due to the weak overall economy and the continuing restraint in consumer
spending, no recovery in demand is expected in our end markets in the
coming months. While several input prices have fallen there has recently
been a slight increase in recovered paper prices. As in the past few
months, significant machine downtime will be necessary in the 3^rd quarter
to align production with market demand.
This particularly affects the MM Board & Paper division, where a
modernization downtime was planned for the 3^rd quarter in the Slovenian
board mill Kolicevo, however, with the timing yet to be determined due to
recent floods. At MM Packaging we continue to see reduced order activity
mainly in the food sector.
MM responses to this development with a profit and cash protection
program, which includes comprehensive cost savings, optimizing working
capital and reducing new capital expenditures. The focus is to swiftly
restore margins, reduce net debt and enhance our competitiveness. For the
3^rd quarter 2023, however, the profit situation is expected to remain
tight.
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Please find the detailed Press Release and the 2023 Half-Year Financial
Report as well as the CEO video statement and the details for today’s CEO
Conference Call on our website: https://www.mm.group.
Forthcoming results:
November 7, 2023 Results for the first three quarters of 2023
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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10.08.2023 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: 1699925
End of News EQS News Service
1699925 10.08.2023 CET/CEST
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