Smurfit Kappa First Nine Months 2020 Trading Update

Smurfit Kappa has announced a trading update for the 9 months to 30 September 2020.

Smurfit Kappa says it has delivered a strong set of results for the first nine months with an EBITDA of €1,125m and an EBITDA margin of 17.8%. The third quarter EBITDA of €390m was impressive, both from an operational and financial perspective, demonstrating the strength and resilience of the Group.

The company says the results reflect the continuing benefits of its capital allocation decisions, ability to effectively manage cost base, its geographic reach and the recovery in demand in both European and Americas businesses.

Smurfit Kappa says its business is strongly weighted towards FMCG customers where they are well positioned to enhance growth from the accelerating trends in e-commerce, innovative packaging and increased consumer demand for sustainable packaging. During the year, the company said it has adapted to new ways of working, both remotely and within its operations. They will use these new ways of working to look for opportunities to further increase operating efficiency and effectiveness across the system. They are currently developing a programme which is designed to ensure they retain the benefits in the years ahead. The company expects to announce the costs and associated benefits of this programme with the year-end results in February.

Smurfit Kappa praised its 46,000 employees, that by their actions have helped ensure the company has continued to deliver for customers, their critical supply chains and the local communities. To recognise the peoples’ response to the pandemic, SKG will be awarding all permanent employees with a recognition reward in the fourth quarter. In addition, while not material, they have taken the decision to repay any specific government support schemes related to the COVID-19 pandemic.

Tony Smurfit, Group CEO, commented, “I am pleased to report that the quality of our business and the strength of our people has produced an excellent performance in both the third quarter and the year-to-date. While some uncertainty still exists around the evolution of the effects of COVID-19 in the weeks ahead, absent a dramatic change to working practices, the Group expects to deliver EBITDA in the range of €1,460m to €1,480m for the full year 2020.

“We are increasingly excited by our future prospects and the structural growth drivers of our business including e-commerce and sustainable packaging as well as our innovative ability to capitalise on these opportunities. Reflecting the Board’s confidence in SKG’s performance and prospects, it is recommending a second interim dividend of 27.9 cent per share. This second interim dividend, following the payment of an interim dividend in September, ensures the Group is aligned with the dividend payment cycles of previous years. It is proposed to pay this dividend on 11 December 2020 to all ordinary shareholders on the share register at the close of business on 20 November 2020.”

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