EQS-News: Mayr-Melnhof Karton AG / Key word(s): Half Year Results
Mayr-Melnhof Karton AG: MM reports half-year results for 2022

11.08.2022 / 08:01 CET/CEST
The issuer is solely responsible for the content of this announcement.

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• Strong demand for sustainable, fiber-based packaging
• Growth strategy and improvement of operational efficiency on track
• Development in the 2^nd half-year hard to predict due to instabilities
of supply chains and necessary adjustment measures

Group Key indicators - IFRS

Consolidated, in millions of EUR 1^st HY/2022 1^st HY/2021 +/-
Sales 2,218.5 1,289.6 +72.0 %
EBITDA 375.8 155.5 +141.7 %
Operating Profit 285.0 92.1 +209.3 %
Operating margin (in %) 12.8 % 7.1 % +570 bp
Profit before tax 270.2 82.9 +225.7 %
Profit for the period 205.8 62.2 +231.0 %
Earnings per share (in EUR) 10.24 3.07  

Peter Oswald, MM CEO, comments: „Demand for our products is strong, as
consumers prefer natural, recyclable packaging made from renewable,
fiber-based raw materials. Our strategy of focused organic growth and
value enhancing acquisitions combined with a strong grip on improvement of
productivity is starting to pay off. In the 1^st half-year organic growth
of Packaging was close to 5 %, just limited by capacity restrictions, as
our customers value our increased focus on innovation and sustainability
as well as supply security due to our backward integration with
cartonboard. The acquisition of Essentra Packaging, expected to be closed
in the 4^th quarter, will take MM to a global leadership position in
secondary pharmaceutical packaging and position us for more organic growth
and resilience throughout the business.

As already indicated, MM has delivered a good 1^st half-year based on an
exceptionally strong performance in the 2^nd quarter. The enormous cost
inflation was mitigated by price adjustments, cost control and a step-up
in operational efficiencies. On top, our half-year income statement has
been particularly influenced by the inclusion of the cartonboard and paper
mills MM Kwidzyn and MM Kotkamills, which were acquired a year ago. At the
same time, we significantly increased capex in order to reduce energy
consumption, raise quality and increase output. We are convinced there is
much we can improve through the enhanced focus on digitalization,
sustainability and innovation.

As the continuous supply of our customers has top priority, we have
undertaken several measures to mitigate a possible gas rationing, which
would affect all cartonboard and paper mills except MM Kwidzyn: We have
started to build up safety stocks for recycled fiber-based cartonboard,
rented gas storage facilities in Austria, and are investing in alternative
oil firing in Finland.

The second half-year will be impacted by planned capex-related downtime,
necessary adjustment measures and supply chain disruptions, at an extent
which seems quite unpredictable at this point in time.”

INCOME STATEMENT

The income statement as of the 1^st half-year 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 increased by EUR 928.9 million to EUR
2,218.5 million (1^st half of 2021: EUR 1,289.6 million). This growth
results mainly from the previous year’s acquisitions as well as the
passing on of cost increases through higher prices.

At EUR 285.0 million, operating profit was EUR 192.9 million above the
previous year’s value (1^st half of 2021: EUR 92.1 million). The
significant rise primarily results from the division MM Board & Paper. In
the previous year, one-off expenses from adjustment and restructuring
measures amounting to EUR 26.1 million were recognized in the Packaging
division. The Group's operating margin thus reached 12.8 % (1^st half of
2021: 7.1 %).

Financial income amounted to EUR 2.3 million (1^st half of 2021: EUR 1.0
million). The increase of financial expenses from EUR -10.3 million to EUR
-15.6 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.

At EUR 270.2 million, profit before tax was also above the previous year’s
level (1^st half of 2021: EUR 82.9 million). Income tax expense amounted
to EUR 64.4 million (1^st half of 2021: EUR 20.7 million), resulting in an
effective Group tax rate of 23.8 % (1^st half of 2021: 25.0 %).

Profit for the period rose by EUR 143.6 million to EUR 205.8 million (1^st
half of 2021: EUR 62.2 million).

DEVELOPMENT IN THE 2^ND QUARTER

In the course of very good demand as well as increased prices to
compensate for the ongoing strong cost inflation, consolidated sales of
EUR 1,158.1 million were above the value of the 1^st quarter of 2022 (EUR
1,060.4 million). The increase compared to the previous year’s level (2Q
2021: EUR 648.3 million) results primarily from the inclusion of MM
Kotkamills and MM Kwidzyn as well as necessary price adjustments.

The Group's operating profit rose to EUR 173.9 million after EUR 111.1
million in the 1^st quarter of 2022 and EUR 30.9 million in the 2^nd
quarter of the previous year. The latter was mainly characterized by
one-off effects in the amount of EUR 26.1 million from restructuring
measures in the packaging division as well as the strong burden from the
enormous increase in input costs in the cartonboard sector. The operating
margin was thus at 15.0 % (1Q 2022: 10.5 %; 2Q 2021: 4.8 %). Profit for
the period increased to EUR 126.3 million (1Q 2022: EUR 79.5 million; 2Q
2021: EUR 18.3 million).

Capacities of the MM Board & Paper division at 99 % were again almost
fully utilized in the 2^nd quarter (1Q 2022: 99 %; 2Q 2021: 99 %). The
operating margin amounted to 18.1 % and was thus above the values of both
the previous quarter and the previous year (1Q 2022: 10.7 %; 2Q 2021: 4.6
%).

The 2^nd quarter in the packaging division was mainly characterized by
implemented cost passes, volume increases and the first-time inclusion of
Eson Pac. The operating margin amounted to 8.4 % (1Q 2022: 9.0 %; 2Q 2021:
4.5 %).

OUTLOOK

We expect sustained solid demand for natural, renewable and recyclable
cartonboard packaging. Any ongoing cost inflation will be mitigated by
timely price adjustments in both divisions.

The 2^nd half-year will be particularly impacted by planned capex-related
downtime (rebuilt at Neuss board mill in Germany, and at Kotkamills in
Finland for Absorbex), necessary adjustment measures and supply chain
disruptions, at an extent which seems currently quite unpredictable.
Ensuring business continuity and sustainable supply of our customers will
stay top priority. We will follow up on this through flexible procurement
and logistics management, continuous investment activity (EUR 250-300
million each in 2022 and 2023), and the safeguarding of profitability.
Regarding our Russia-exposure in packaging we continue to review all
options.

Our strategy to grow organically and inorganically in environmentally
friendly, innovative fiber-based packaging products is paying off. The
acquisition of Essentra Packaging, to be closed in the 4^th quarter, as
well as progress in operational efficiency, sustainability, and innovation
are expected to feed both, more growth and resilience throughout the
business.

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Please find the detailed Press Release and the Half-Year Financial Report
2022 as well as the CEO video statement and the details for today’s CEO
Conference Call 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: https://www.mm.group

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11.08.2022 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: 1417819

 
End of News EQS News Service

1417819  11.08.2022 CET/CEST