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Smurfit Kappa Sees Revenues Rise 5% In 2016

Published on Feb 8 2017 10:22 AM in Packaging And Design tagged: Trending Posts / Trending Post / Smurfit Kappa

Smurfit Kappa Sees Revenues Rise 5% In 2016

Smurfit Kappa has today (8 February) published its financial results for the 12 months ending 31 December 2016. The packaging specialist has reported that its full year 2016 revenues are up 5% on a constant currency basis, with a 2016 EBITDA of €1,236 million, a new record for the group.

The group has also reported continued good cash generation with free cash flow of €303 million, and has been admitted to the FTSE 100 index as of 19 December, 2016.

The positive results have led the company to recommend a 20% increase in its final dividend, to 57.6% per share.

Commenting on the announcement, Tony Smurfit, Group CEO, said, “In 2016 SKG delivered continued earnings growth with EBITDA of €1,236 million and an EBITDA margin of 15.1%, driven by solid volume growth across our markets, resilient box pricing and the Group’s investment in high return capital projects.

“These strong results against most performance metrics were delivered despite the significant headwinds experienced by the Group in higher raw material input costs and adverse currency impacts. This once again highlights the strength of the Group’s integrated business model, our geographically diverse portfolio of businesses and our performance based culture.”

“In 2016 we have invested approximately €500 million in our business, building a platform to deliver continued performance and growth. Effective capital spend will enhance operating efficiency, optimise our asset base and continuously improve our market positioning across Europe and the Americas enabling us to deliver added value to our customers. In 2017 we will continue to realise the benefits of our average annual capital spend of more than €450 million over the last three years.

Smurfit also announced that the group issued a 7 year, €500 million bond in January 2017, “enabling the Group to extend the maturity profile of our debt to 4.3 years and secure, at 2.375%, our lowest ever coupon for the Group.

“We are excited about the significant number of internal opportunities that exist within SKG which will continue to drive business improvement as we deliver 15% ROCE through the cycle. The Group is also well positioned to make acquisitions that deliver long term value.

“SKG has an unrivalled market offering which helps our customers succeed in their chosen markets. This is underpinned by our unique differentiation tools, market insights and innovation infrastructure, supported by our ongoing capital expenditure programmes and our leading sustainable business practices across our operations.”

Smurfit concluded by speaking optimistically of the year ahead, stating that from a demand perspective, “the year has started well across most areas of our business.”

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