Smurfit Kappa Group plc (LON:SKG) has announced a trading update for the 9 months to 30 September 2020.
First Nine Months Overview
· Third quarter performance ahead of our expectations
· Revenue of €6,312 million for the nine months
· EBITDA of €1,125 million for the nine months
· EBITDA Margin of 17.8% for the nine months
· Second interim dividend at 27.9 cent per share
Performance Overview
Smurfit Kappa Group has delivered a strong set of results for the first nine months with an EBITDA of €1,125 million and an EBITDA margin of 17.8%. Our third quarter EBITDA of €390 million was particularly pleasing, both from an operational and financial perspective, demonstrating, once again, the strength and resilience of the Group.
Our results reflect the continuing benefits of our capital allocation decisions, our ability to effectively manage our cost base, our geographic reach and the recovery in demand in both our European and Americas businesses. The results also highlight the value our 65,000 customers place on our innovation, our expertise in managing supply chains and our sustainability credentials.
Our business today is strongly weighted towards FMCG customers where we are well positioned to enhance our growth from the accelerating trends in e-commerce, innovative packaging and increased consumer demand for sustainable packaging. During the year we have adapted to new ways of working, both remotely and within our operations. We will use these new ways of working to look for opportunities to further increase our operating efficiency and effectiveness across our system. We are currently developing a programme which is designed to ensure that we retain the benefits in the years ahead. We expect to announce the costs and associated benefits of this programme with the year-end results in February.
During this unprecedented time in all of our lives, the effort and dedication of our 46,000 employees has been remarkable in ensuring that Smurfit Kappa has continued to deliver for our customers, their critical supply chains and our communities. To recognise our peoples’ response to the pandemic, SKG will be awarding all permanent employees with a unique recognition reward in the fourth quarter. In addition, while not material, we have taken the decision to repay any specific government support schemes related to the COVID-19 pandemic.
Tony Smurfit, Smurfit Kappa 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 €1,460 million to €1,480 million 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.”
