Results for the first three quarters of 2015

The Group’s consolidated sales totaled EUR 1,617.8 million and were thus 3.0 % or EUR 46.8 million above the previous year’s figure (1-3Q 2014: EUR 1,571.0 million). This increase primarily results from higher business volumes in both divisions.

At EUR 154.6 million, operating profit was 13.3 % or EUR 18.1 million above the comparative value of the previous year (1-3Q 2014: EUR 136.5 million). Both divisions equally contributed to this. The Group’s operating margin thus rose from 8.7 % to 9.6 %.

With ongoing low interests, financial income of EUR 1.4 million (1-3Q 2014: EUR 1.1 million) was offset by financial expenses of EUR -4.7 million (1-3Q 2014: EUR -3.7 million).

Profit before tax increased by 11.6 % to EUR 146.8 million after EUR 131.5 million in the first three quarters of the previous year. Income tax expense totaled EUR 38.6 million (1-3Q 2014: EUR 34.0 million), resulting in an effective Group tax rate of 26.3 % (1-3Q 2014: 25.9 %).

Profit for the period thus went up by 11.0 % to EUR 108.2 million (1-3Q 2014: EUR 97.5 million).

Development in the third Quarter

Strong volume dynamics and high capacity utilization of the plants characterized development of both divisions in the third quarter of this year.

At 99 % (2Q 2015: 99 %; 3Q 2014: 99 %), capacities of the cartonboard division were almost fully utilized. Average prices for cartonboard were slightly above those of the previous year’s period. The operating margin of MM Karton amounted to 9.6 % following 8.5 % in the second quarter of 2015 and 7.8 % in the third quarter of 2014.

The operating margin of MM Packaging reached 10.5 % (2Q 2015: 7.9 %; 3Q 2014: 9.0 %).

The Group's operating profit totaled EUR 58.1 million (2Q 2015: EUR 45.7 million; 3Q 2014: EUR 47.8 million), thus an operating margin of 10.6 % was achieved (2Q 2015: 8.5 %; 3Q 2014: 8.9 %).

The profit for the period amounted to EUR 41.0 million (2Q 2015: EUR 31.7 million; 3Q 2014: EUR 36.5 million).

Outlook

Since the order intake from the cartonboard market is currently much more restrained, the order backlog of MM Karton has noticeably come down. Earnings performance is, however, expected to continue on a good level also in the fourth quarter of 2015 due to continuity at MM Packaging. So far, there is no sign of relief in prices for recovered paper, which significantly increased some months ago. 

Current business remains focused on improvements in cost efficiency and product optimization in order to develop new market potential and maintain profitability. The expansion course shall continue through organic growth as well as acquisitions in the core business, cartonboard and folding cartons.

Development on the European cartonboard market was characterized by a high degree of continuity in the first three quarters of 2015. At 99 % (1-3Q 2014: 98 %), capacities at MM Karton were almost fully utilized. At 88,000 tons, the average order backlog of the division was significantly above the value of the previous year’s period (1-3Q 2014: 57,000 tons).

Due to the robust market development, prices for recovered paper recorded a significant increase towards the middle of the year, stabilizing at a high level over the summer months. Accordingly, a price increase of cartonboard was implemented.

At 1,259,000 tons, cartonboard production of the first three quarters 2015 was 3.8 % above the comparative figure of the previous year, and tonnage sold, at 1,252,000 tons, was 2.8 % higher (1-3Q 2014: 1,213,000 tons; 1,218,000 tons). Around 84 % of this was sold in Europe and 16 % in markets outside of Europe (1-3Q 2014: 82 %; 18 %). Supported by numerous product optimizations, it was possible to maintain market shares and to seize new opportunities.

In line with volumes, sales increased by 2.5 % to EUR 787.4 million (1-3Q 2014: EUR 767.9 million). In contrast, operating profit improved by around 12.7 % to EUR 66.4 million (1-3Q 2014: EUR 58.9 million), primarily as a result of higher productivity and further cost reductions. The operating margin therefore climbed to 8.4 % (1-3Q 2014: 7.7 %).

Demand on the European folding carton market was overall solid in the first three quarters of 2015, but without any sign of an economic upturn. Due to sufficient production capacities available on the market, price competition remains with unabated intensity.

MM Packaging therefore focuses on cost leadership through highly efficient production at high-performance locations, convincing quality and comprehensive service along the entire value chain. Timely exploitation of new markets, close cooperation with strong customers and continuous optimization of the product range support the long-term growth course.

The systematic pursuit of this strategy enabled us to increase both sales and profit compared with the same period of the previous year. The overall high capacity utilization of the plants as well as productivity improvements in manufacturing contributed significantly to this.

Sales went up by 2.9 % to EUR 907.9 million (1-3Q 2014: EUR 882.0 million). 
At EUR 88.2 million, operating profit was 13.7 % above the value of the previous year (1-3Q 2014: EUR 77.6 million) as a result of improved cost efficiency. The operating margin thus amounted to 9.7 % (1-3Q 2014: 8.8 %).

Tonnage processed rose by 2.8 % from 530,000 tons to 545,000 tons and the sheet equivalent by 1.2 % to 1,532.4 million (1-3Q 2014: 1,514.2 million).

The detailed Interim Report for the first three quarters of 2015 is available on our website: www.mayr-melnhof.com  

Forthcoming results:

March 15, 2015 Annual Results for 2015