Summary

  • Smurfit Kappa is providers of paper-based packaging solutions. Smurfit Kappa is a FTSE 100 company with revenue of € 10.1 billion in 2021.
  • The company has 355 production, located in 23 countries in Europe and 13 countries in the Americas.
  • Smurfit Kappa sourced almost all of the raw materials from its own paper mills.

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Company Overview

Smurfit Kappa (LSE:SKG, OTC:SMFTF) is providers of paper-based packaging solutions. Smurfit Kappa is a FTSE 100 company with revenue of € 10.1 billion in 2021.1

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Recent Developments

Smurfit Kappa invests over 35 million euro in first Moroccan plant2

MAY 25, 2022; Smurfit Kappa, has announced the construction of a new packaging plant in Morocco, its first corrugated plant in the country. Located in Rabat and covering an area of 25,000 m2, it will enable Smurfit Kappa to supply innovative and sustainable packaging solutions quickly and efficiently to its local customer base.

Smurfit Kappa LithoPac increases capacity to meet the demand3

MAY 23, 2022; Smurfit Kappa announces € 7 million investment at Smurfit Kappa LithoPac plant in Nybro, Sweden. The investment includes both a new building and inline laminator and will significantly increase capacity and opportunities. It will also provide sustainability benefits due to the reduction in waste, material consumption and transport costs.

Smurfit Kappa acquires Atlas Packaging4

MAY 03, 2022; Smurfit Kappa UK Limited (SKUK), has announced the acquisition of Atlas Packaging. Atlas Packaging, based in Barnstaple, North Devon, is an independent corrugated packaging provider and has a strong market presence in the UK.

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Financial Highlights

Revenue for 2021 was €10,107 million, 18% up on 2020 on both a reported and an underlying basis. Revenue in Europe was up 18%, driven by volume growth and input cost recovery through progressive box price increases. On an underlying basis, revenue in Europe was up 17%. In the Americas, revenue was up 20% on the full year 2020, or 21% on an underlying basis.5

European revenue rose by €1,202 million to €7,847 million in 2021, with an underlying increase of €1,140 million and positive currency movements and hyperinflationary adjustments of €30 million, along with a net contribution of €32 million from acquisitions and disposals. The increase in underlying revenue of 17% reflected corrugated volume growth of approximately 8% and continued input cost recovery in corrugated pricing.

Revenue in the Americas increased by €375 million in 2021 to €2,260 million, with underlying growth of €394 million, equating to 21%, and a net impact of €26 million from acquisitions and disposals, partly offset by net negative currency and hyperinflationary movements of €45 million.

Gross revenue, comprising both intra-group and third-party revenue, for the Group in 2021 was €18,721 million compared to €13,994 million in 2020, representing a 34% increase.

EBITDA for 2021 was €1,702 million, an increase of 13% on 2020. The result reflects the Group’s ability to recover significant input cost pressure by way of progressive box price increases, strong box volumes.

The Group's profit before income tax amounted to €913 million in 2021, comprising the pre-exceptional profit of €944 million and an exceptional charge of €31 million. In 2020, the profit before income tax was €748 million, comprising the pre-exceptional profit of €779 million and a net exceptional charge of €31 million.

Income Tax Expense The income tax expense in 2021 was €234 million (comprising a current tax charge of €265 million and a deferred tax credit of €31 million) compared to €201 million (comprising a current tax charge of €176 million and a deferred tax charge of €25 million) in 2020.

Basic EPS amounted to 263.9 cent in 2021 compared to 227.9 cent in 2020. On a diluted basis, its EPS in 2021 amounted to 261.1 cent compared to 225.7 cent in 2020.

Free cash flow in 2021 was €455 million compared to €675 million in 2020, a decrease of €220 million. EBITDA growth of €192 million, combined with lower outflows for cash interest and the absence of an exceptional outflow of €18 million in 2021 were more than offset by higher outflows for capital expenditure, higher tax payments, a higher outflow for the change in employee benefits and other provisions and a negative swing from a working capital inflow in 2020 to an outflow in 2021.

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Business Overview

Smurfit Kappa sourced almost all of the raw materials from its own paper mills. The company has 355 production sites, located in 23 countries in Europe and 13 countries in the Americas including 241 Packaging conversion plants and 35 Paper mills.

  • 241 - Packaging conversion plants
  • 35 - Paper mills
  • 47 - Fibre Sourcing
  • 32 - Other production facilities

Paper

The company manufacture a wide range of papers mainly used for packaging purposes. The company's total global paper and board capacity is approximately 8.3 million tonnes per annum.

Packaging

The company design, manufacture and supply paper-based packaging. The company manufacture approximately 12.5 billion square metres of corrugated packaging.

Recycling

The company provide recycling solutions. The company reprocess over 7.4 million tonnes of recovered paper across the globe.

Forestry

The company own approximately 68,000 hectares of forest globally.

Research & Development Centres

The company has R&D Centres for paper, board and packaging.6

  • Packaging R&D Centre Hoogeveen, the Netherlands
  • Paper R&D Centre Piteå, Sweden
  • Product Safety Laboratory Facture, France
  • Bag-in-Box R&D Centre Epernay, France

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Company History

Smurfit Kappa was founded in 1934, making cardboard boxes and packaging boxes for the Irish market.7

Acquired by Jefferson Smurfit in 1938 and becoming one of Ireland’s leading manufacturers and listed on the Irish Stock Exchange in 1964.

To expand in n the United States it merging with the Chicago-based Stone Container Corporation in 1998.

In 2005 Jefferson Smurfit merged with Kappa Packaging  a Netherlands-based company, Europe’s largest manufacturer of corrugated and cardboard packaging, to form Smurfit Kappa.

In 2021 Smurfit Kappa completed the acquisition of Cartones del Pacifico, a leading paper-based packaging company in Peru.

The company employee over 48,000 employees in 355 production sites across 36 countries, and an annual turnover of €10.1 billion. The company's global headquarters is in Dublin, with regional headquarters in Amsterdam and Miami.

References

  1. ^ https://www.smurfitkappa.com/about/what-we-do
  2. ^ https://www.smurfitkappa.com/newsroom/2022/smurfit-kappa-invests-over-35-million-euro-in-first-moroccan-plant
  3. ^ https://www.smurfitkappa.com/newsroom/2022/smurfit-kappa-lithopac-increases-capacity-to-meet-the-demand
  4. ^ https://www.smurfitkappa.com/newsroom/2022/smurfit-kappa-acquires-atlas-packaging
  5. ^ https://www.smurfitkappa.com/investors/-/m/files/publications---global/financial-reports/smurfit_kappa_annual_report_2021.pdf
  6. ^ https://www.smurfitkappa.com/innovation/r-and-d-centres
  7. ^ https://www.smurfitkappa.com/about/our-history
Created by Asif Farooqui on 2022/07/25 07:57
     
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