Third Quarter & First Nine Months Key Points
- Third quarter Group revenue growth on a constant currency basis of 6%, with volume growth of 3%
- Third quarter EBITDA growth of 6% year-on-year with a margin of 15.7% and sequential EPS growth
- Increased ROCE of 16.1%
- Third quarter free cash flow of €164 million supporting further deleveraging to 2.4 times
- Increased quality of asset base delivering higher returns
- On track to deliver record full year EBITDA
Performance Review and Outlook
Tony Smurfit, Group CEO, commented: "We are pleased to deliver good earnings growth for the quarter and the year to date. SKG continues to meet and exceed its ROCE target and has delivered improved EBITDA margins. This strong result reflects the high quality of our globally diversified operating platform, performance led culture, and the strength of our people and assets.
"In the third quarter, the Group delivered a strong 6% increase in revenue on a constant currency basis. The reported EBITDA for the quarter increased 6% year-on-year to €323 million. This performance was delivered against a backdrop of significantly higher than expected recovered fibre input costs and adverse currency movements.
"The Group's global corrugated packaging volumes grew by 5% in the year to date and 3% during the quarter. SKG continues to prioritise our value and differentiation proposition to our global customers, driving disciplined growth. In Europe, corrugated box volumes are 2% greater than 2015. Our Americas business continues to progress with improved performance across most operations, offset by negative currency impacts in the quarter. The Americas provides the Group with valuable diversification of its end market exposure, with access to higher growth and higher margin markets.
"Today, the Group is well positioned and invested in all its chosen markets. The strength of our cash flow will enable us to continue to invest to support profitable growth while sustaining an attractive dividend stream for our shareholders. We continue to invest to further improve the quality of our asset base, and we will make acquisitions where we identify compelling long term value for our shareholders while continuing to maintain our balance sheet strength.
"Based on current operating conditions, the Group will deliver continued earnings growth and record EBITDA for 2016 in line with market expectations."
Source: Smurfit Kappa