EQS-News: Mayr-Melnhof Karton AG: MM reports results for the first three quarters of 2023

EQS-News: Mayr-Melnhof Karton AG / Key word(s): Quarter Results
Mayr-Melnhof Karton AG: MM reports results for the first three quarters of
2023

07.11.2023 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.

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• 3Q operating profit above previous quarter but well below previous
year
• Solid performance at MM Packaging
• Market- and capex-related volume decline continued to weigh on results
of MM Board & Paper
• General conditions remain tight as a result of inflation-related
consumption restraint and the macroeconomic slowdown
• No immediate recovery in sight
• Initiated profit and cash protection program begins to take effect

Group Key indicators – IFRS

Consolidated, in millions of EUR 1-3Q/2023 1-3Q /2022 +/-
Sales 3,196.5 3,450.4 -7.4 %
EBITDA 328.0 591.2 -44.5 %
Operating profit 159.8 452.2 -64.7 %
Operating margin (in %) 5.0 % 13.1 % -810 bp
Profit before tax 118.9 416.8 -71.5 %
Profit for the period 91.2 315.2 -71.1 %
Earnings per share (in EUR) 4.50 15.67  

Peter Oswald, MM CEO, comments: “After the record year 2022, the MM Group
has been operating for several quarters in a market environment with
significantly reduced demand in the paper and board industry and
increasing price pressure. Although destocking in the supply chain seems
to be coming to an end in many places, restraint in consumer spending
continues due to inflation and as a result of the overall economic
slowdown in our main European markets.”

As expected, the difficult general conditions are also reflected in the
3^rd quarter, in particular in the weak volume and result development of
the division MM Board & Paper, which was again characterized by planned
capex-related downtime in addition to significant market-related downtime.
In contrast, the division MM Packaging recorded an overall solid
performance despite a heterogeneous packaging market as well as the
successful integration of last year’s acquisitions in the resilient area
of pharmaceutical packaging.

In view of the current market and result situation and the prospect of no
improvement in the short term, our focus is on safeguarding and gaining
volumes with reasonable margins. Our profit and cash protection program,
which in addition to cost reductions in all areas targets on a significant
reduction in working capital and capex cash outs, starts to take effect
and will be supplemented by selected structural adjustment measures.

“Due to our continuous efforts to expand our competitiveness and quality
leadership as well as the recent strategic investments in our plants and
sustainable, innovative packaging products, MM is very well positioned to
manage the current difficult market situation and to create long-term
added value for our customers and shareholders.”, underlines Oswald.

INCOME STATEMENT
At EUR 3,196.5 million, the Group’s consolidated sales were below the
previous year’s figure (1-3Q 2022: EUR 3,450.4 million). A primarily
volume-related decline in the division MM Board & Paper contrasted with an
acquisition- and price-related increase in the division MM Packaging.

Operating profit decreased by EUR 292.4 million from EUR 452.2 million to
EUR 159.8 million. This decline mainly results from extensive market- and
capex-related downtime at MM Board & Paper. The Group’s operating margin
was therefore at 5.0 % (1-3Q 2022: 13.1 %).

Financial income amounted to EUR 5.4 million (1-3Q 2022: EUR 3.1 million).
The increase in financial expenses from EUR -23.3 million to EUR -40.0
million is primarily due to higher interest expenses for
Schuldscheindarlehen and financing of the accomplished acquisitions and
organic growth projects. “Other financial result – net” changed from EUR
-15.2 million to EUR -6.3 million, in particular owing to currency
translation.

Profit before tax was EUR 118.9 million after EUR 416.8 million in the
previous year. Income tax expense amounted to EUR 27.7 million (1-3Q 2022:
EUR 101.6 million), resulting in an effective Group tax rate of 23.3 %
(1-3Q 2022: 24.4 %).

Thus, profit for the period decreased from EUR 315.2 million to EUR 91.2
million.

DEVELOPMENT IN THE 3^RD QUARTER
As expected, business development in the 3^rd quarter continued at a
similar level as in the previous quarter. Due to further market and
capex-related downtime in the division MM Board & Paper as well as
heterogeneous demand in the sales markets of MM Packaging and increasing
price pressure, consolidated sales amounted to EUR 1,015.1 million after
EUR 1,059.3 million in the 2^nd quarter of 2023 and EUR 1,231.9 million in
the 3^rd quarter of the previous year.

The Group’s operating profit of EUR 55.8 million was above the previous
quarter (2Q 2023: EUR 42.4 million) due to a strong profit contribution
from MM Packaging, but well below the previous year’s level (3Q 2022: EUR
167.2 million). The operating margin came in at 5.5 % (2Q 2023: 4.0 %; 3Q
2022: 13.6 %). Profit for the period amounted to EUR 27.9 million (2Q
2023: EUR 28.4 million; 3Q 2022: EUR 109.4 million).

The operating margin of the division MM Board & Paper was -3.0 % (2Q 2023:
-2.0 %; 3Q 2022: 15.6 %) mainly due to market-related reduced capacity
utilization as well as capex downtime at the Slovenian Kolicevo board
mill.

MM Packaging’s operating margin reached 11.4 % particularly as a result of
declining cartonboard prices (2Q 2023: 8.6 %; 3Q 2022: 9.2 %).

OUTLOOK
Weak demand in the cartonboard and paper sector continues in almost all
areas, as higher costs of living reduce general demand for consumer goods
and the overall economic market environment remains uncertain. There is
currently no sign of a market recovery, but the bottom seems to have been
reached and destocking in the supply chain largely completed. Against this
background and in view of sufficient capacities in the industry,
significant machine downtime will continue to be necessary – at least also
in the 4^th quarter – in order to adjust production to market demand. This
will primarily impact the division MM Board & Paper.

Under these tightened general conditions, MM is focusing on safeguarding
and gaining volume with reasonable margins. Our profit and cash protection
program, which in addition to cost reductions in all areas aims at a
significant reduction of working capital and capex cash-outs, will be
consistently pursued and implemented as well as supplemented by targeted
structural adjustment measures. Overall, the pressure to enhance
competitiveness is steadily increasing.

Our primary focus remains on recovering margins as quickly as possible and
reducing net debt. With sustainable and innovative packaging solutions, MM
is very well positioned to successfully manage the current difficult
market situation.

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Please find the detailed Press Release and the Report for the first three
quarters of 2023 as well as the CEO Audio-Q&A-Webcast on our website:
https://www.mm.group.

Forthcoming results:
March 12, 2024   Financial Results for 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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07.11.2023 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: 1766079

 
End of News EQS News Service

1766079  07.11.2023 CET/CEST

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