Earnings as expected below previous year’s record level
- Sharp decline in demand and significant market- and capex-related downtime at MM Board & Paper weigh on results
- Strong profit performance at MM Packaging
- Comprehensive modernisation programme to increase competitiveness of MM Board & Paper implemented
- Successful integration of last year’s acquisitions in the resilient area of pharmaceutical packaging
- Profit & cash protection plan proves effective
- Dividend of EUR 1.50 proposed in line with long-standing dividend policy
- Positive volume trend for MM Board & Paper at beginning of 2024, however pressure on margins is continuing
Peter Oswald, MM CEO, comments: “After the record result of the previous year, the MM Group faced a significantly lower demand in the paper and cartonboard industry as well as increasing price pressure in 2023. In addition to destocking in the supply chain, inflation-related changes in consumer behaviour which led to lower consumption of everyday goods and the overall economic slowdown in our European main markets were the main causes.
The difficult general conditions were reflected in particular in the weak result and volume development in the division MM Board & Paper. In addition to significant market-related machine downtimes, there was also considerable capex-related downtime as part of the implementation of the so far most extensive modernisation programme at three large cartonboard mills.
In contrast, the division MM Packaging recorded an overall solid performance despite a heterogeneous packaging market. Furthermore, last year's acquisitions in the resilient area of pharmaceutical packaging were successfully integrated with a result development above plan.
The decline in adjusted operating profit to EUR 229.2 million after EUR 562.4 million in 2022 pri-marily resulted volume- and price-related from the division MM Board & Paper, while MM Packaging recorded a significant increase in both profit and margin.
With demand expected to recover only slowly, MM has focussed on safeguarding and gaining volumes at reasonable margins. The profit & cash protection plan launched in mid-2023, which provides for a significant reduction in working capital and a reduction in capex cash-outs in addition to cost reductions in all areas, has already made a significant contribution to reducing net debt to EUR 1,261.9 million in the reporting year (December 31, 2022: EUR 1,481.5 million).
In line with the profit development and long-term dividend policy, which provides for the distribution of one third of profit, a dividend of EUR 1.50 per share (2022: EUR 4.20) for the financial year 2023 will be proposed to the 30th Annual Shareholders’ Meeting on April 24, 2024.”
Source: MM Group
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