EQS-News: Mayr-Melnhof Karton AG: MM reports results for the first three quarters of 2022

EQS-News: Mayr-Melnhof Karton AG / Key word(s): Quarter Results
   Mayr-Melnhof Karton AG: MM reports results for the first three quarters of
   2022

   03.11.2022 / 08:00 CET/CEST
   The issuer is solely responsible for the content of this announcement.

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     • Solid performance also in the 3^rd quarter
     • Growth strategy for Packaging executed
     • Preserving profitability – priority in a slowing overall economy

   Group Key indicators - IFRS

   Consolidated, in millions of EUR 1-3Q/2022 1-3Q /2021      +/-
   Sales                              3,450.4    2,107.1  +63.7 %
   EBITDA                               591.2      283.0 +109.0 %
   Operating Profit                     452.2      177.2 +155.2 %
   Operating margin (in %)             13.1 %      8.4 %  +470 bp
   Profit before tax                    416.8      162.4 +156.7 %
   Profit for the period                315.2      128.4 +145.4 %
   Earnings per share (in EUR)          15.67       6.37         

   Peter Oswald, MM CEO, comments: "The MM Group recorded organic growth of
   nearly 6 % in Packaging in the first three quarters. This demonstrates
   that demand for our natural, recyclable products from renewable fibers
   stayed high and that customers esteem our investments in competitive
   sites, innovation and sustainability.

   The acquisition of Essentra Packaging, finalized at the beginning of
   October, marked a further milestone in the past two years transformation
   of MM concentrating on value enhancing acquisitions and focused organic
   growth combined with a strong emphasis on the improvement of productivity.
   This acquisition positions MM as a global player in secondary pharma
   packaging and contributes to more resilience and growth throughout our
   business.

   Performance in the 3^rd quarter remained strong, although behind the
   exceptional high level of the 2^nd quarter, which allowed for an important
   rise in results for the first three quarters of 2022 in a very challenging
   cost and operating environment.

   We continued to mitigate significant cost inflation through price
   adjustments, cost control and efficiency gains. Moreover, the inclusion of
   the cartonboard and paper mills MM Kwidzyn and MM Kotkamills, which we
   acquired at the beginning of August 2021, had a particular impact on the
   income statement. While Packaging registered an ongoing solid order
   intake, the order backlog of Board & Paper saw a significant reduction
   throughout the 3^rd quarter towards a pre-pandemic level due to the filled
   supply chain. This required selective temporary downtime aside the
   rebuilding work for the production of more Absorbex^® from MM Kotkamills.
   Despite recurring bottlenecks on our procurement markets, we managed to
   keep up a steady supply of our customers.

   For the 4^th quarter, we expect impacts from necessary adjustment measures
   and ongoing selective temporary downtime in the Board & Paper division.
   Although a recessionary scenario must be assumed for the economy as a
   whole, most of our business areas are expected to set forth a rather
   robust development despite further destocking in the supply chain
   filtering through. In the current rapidly changing environment
   safeguarding of profitability stays our top priority." 

   INCOME STATEMENT

   The income statement as of the first three quarters is particularly
   characterized by the inclusion of the cartonboard and paper mills MM
   Kwidzyn and MM Kotkamills, which were acquired at the beginning of August
   2021.

   The Group’s consolidated sales amounted to EUR 3,450.4 million and were
   EUR 1,343.3 million above the previous year’s value (1-3Q 2021: EUR
   2,107.1 million). This rise mainly results from the previous year’s
   acquisitions and passing on cost increases through higher prices.

   At EUR 452.2 million, an operating profit EUR 275.0 million above the
   previous year’s value was reached (1-3Q 2021: EUR 177.2 million). The
   significant rise primarily results from the division MM Board & Paper. The
   Group's operating margin thus rose to 13.1 % (1-3Q 2021: 8.4 %).

   Financial income totaled EUR 3.1 million (1-3Q 2021: EUR 1.9 million). The
   increase of financial expenses from EUR -16.8 million to EUR -23.3 million
   is in particular due to the issuance of Schuldschein loans and
   Namensschuldverschreibungen in the previous year to finance the
   acquisitions and organic growth projects. "Other financial result – net"
   changed from EUR 0.1 million to EUR -15.2 million, in particular owing to
   currency translation.

   Accordingly, profit before tax, at EUR 416.8 million, was EUR 254.4
   million above the previous year’s value (1-3Q 2021: EUR 162.4 million).
   Income tax expense amounted to EUR 101.6 million (1-3Q 2021: EUR 34.0
   million), resulting in an effective Group tax rate of 24.4 % (1-3Q 2021:
   20.9 %).

   Profit for the period rose by EUR 186.8 million to EUR 315.2 million after
   EUR 128.4 million in the first three quarters of the previous year.

   DEVELOPMENT IN THE 3^RD QUARTER

   In the course of continuous strong demand throughout most of the quarter
   and only selective necessary downtime at Board & Paper towards the end of
   the quarter as well as further price increases to compensate for the
   ongoing strong cost inflation consolidated sales of EUR 1,231.9 million
   were above the previous quarter’s value (EUR 1,158.1 million). The
   increase compared to the previous year’s level (3Q 2021: EUR 817.5
   million) results primarily from the inclusion of MM Kotkamills and MM
   Kwidzyn as well as necessary price adjustments.

   At EUR 167.2 million, the Group's operating profit was below the 2^nd
   quarter of 2022 (EUR 173.9 million) but above the value of the 3^rd
   quarter of the previous year (EUR 85.1 million). The latter was mainly
   characterized by the income from the sale of the Eerbeek and Baiersbronn
   mills in the amount of EUR 50.1 million and by one-off expenses from the
   acquisition of the mills Kwidzyn and Kotkamills in the amount of EUR 31.9
   million. The operating margin amounted to 13.6 % (2Q 2022: 15.0 %; 3Q
   2021: 10.4 %). Profit for the period reached EUR 109.4 million (2Q 2022:
   EUR 126.3 million; 3Q 2021: EUR 66.2 million).

   Capacity utilization of the division MM Board & Paper at 91 % in the 3^rd
   quarter was lower than in the previous quarter (2Q 2022: 99 %; 3Q 2021: 95
   %), mainly due to planned maintenance shutdowns and selective
   market-related downtime. The operating margin amounted to 15.6 % (2Q 2022:
   18.1 %; 3Q 2021: 9.5 %).

   The 3^rd quarter in the packaging division was mainly characterized by
   volume increases and implemented cost passes. In addition, one-off
   ancillary acquisition costs for the purchase of Essentra Packaging had to
   be recognized. The operating margin was at 9.2 % (2Q 2022: 8.4 %; 3Q 2021:
   10.4 %).

   OUTLOOK

   Against the backdrop of a looming recession, we expect selective downtime
   measures to continue, predominantly in Board & Paper due to further
   destocking. However, our end markets are resilient and non-cyclical since
   they are focusing on products of daily needs.

   In the current rapidly changing environment, we place top priority on
   preserving profitability while closely following up on necessary
   structural adjustment measures for more efficiency, sustainability and
   innovation. In the 4^th quarter a particular focus has been directed on
   the planned reorganization of production at the Slovenian MM Kolicevo mill
   to concentrate production from the small board machine 2 on the larger and
   advanced board machine 3 which is strengthened by significant current
   investments. For the acquisition of Essentra Packaging, the positive
   contribution from the current result is expected to be offset by one-off
   expenses from the initial consolidation.

   As already indicated, capex for the Group will be on a high level also in
   2023 in order to reduce energy consumption, raise quality and increase
   output. In Board & Paper all machine rebuilds, which are an integral part
   of the current major investment programs, at Frohnleiten in Austria, Neuss
   in Germany and Kolicevo in Slovenia are now scheduled for implementation
   during 2023. In Packaging top priority is the post merger integration of
   Essentra Packaging while major capex will focus on expansions for further
   specializations in Poland and France. Intended improvements, optimization
   of the product portfolio as well as expansive effects will gradually take
   effect from 2024 onwards. Looking forward, we aim to increase the share of
   renewable energies and to expand further in order to meet the growing
   demand for innovative, sustainable fiber-based packaging. Although 2023
   will most likely be a difficult year, we are well positioned to further
   develop our business.

   -----------------------------

   Please find the detailed Press Release and the Report for the first three
   quarters of 2022 as well as the CEO Audio-Q&A-Webcast on our website:
   https://www.mm.group. 

    

   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: [1]https://www.mm.group

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   03.11.2022 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; Vienna Stock Exchange (Official
                Market)
   EQS News ID: 1477671


    
   End of News EQS News Service


   1477671  03.11.2022 CET/CEST

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