- Significant increase in sales and results following acquisition
- Integration of Tann-Group meets expectations
- MM Karton with strong performance
- Muted demand increases pressure on prices
- Keeping up quality of results - goal and challenge at the same time

The Mayr-Melnhof Group was able to maintain well its position as a whole in the first half-year of 2019 in an environment marked by increasingly muted demand and growing competitive intensity. After six months, key profit figures of the MM Group are significantly above those of the previous year due to continued profit growth in the second quarter.
This development is affected, on the one hand, by the initial consolidation of the Tann-Group in the MM Packaging division and, on the other hand, by a strong performance of MM Karton as a result of solid volumes and prices.

Restrained demand and increasing pressure on prices still characterize the current market situation. Continuing the high level of profitability of the second quarter is therefore a challenge for the third quarter of this year.


Group Key indicators (IFRS, unaudited)

Consolidated, in millions of EUR      1st HY/2019                1st HY/2018                  +/-
Sales                                                     1,275.5                         1,170.6                 +9.0 %
Operating Profit                                        124.0                            114.3                 +8.5 %
Operating margin (in %)                               9.7%                             9.8 % 
Profit before tax                                        122.6                            111.8                  +9.7 %
Profit for the period                                     92.3                              83.7                +10.3 %
Earnings per share (in EUR)                        4.59                              4.17


The consolidated sales of the Group rose by 9.0 %, or EUR 104.9 million, to EUR 1,275.5 million  (1st half of 2018: EUR 1,170.6 million), with growth resulting primarily from the packaging division following the acquisition. EBITDA increased by 14.5 % to EUR 191.6 million (1st half of 2018: EUR 167.4 million).

At EUR 124.0 million, the operating profit was 8.5 %, or EUR 9.7 million, above the previous year's value (1st half of 2018: EUR 114.3 million). One-off acquisition effects from the initial consolidation of the Tann-Group totaling EUR -4.8 million were reported due to recognition of order backlog and inventory measurement. The operating margin was at 9.7 % (1st half of 2018: 9.8 %).

Financial income of EUR 0.7 million (1st half of 2018: EUR 0.6 million) was offset by financial expenses of EUR -4.0 million (1st half of 2018: EUR -3.0 million). "Other financial result - net" rose to EUR 1.9 million (1st half of 2018: EUR -0.1 million), in particular as a result of foreign currency gains.

Profit before tax increased accordingly by 9.7 % to EUR 122.6 million (1st half of 2018: EUR 111.8 million). Income tax expense amounted to EUR 30.3 million (1st half of 2018: EUR 28.1 million).    The effective Group tax rate at 24.7 % was slightly below the previous year's level (1st half of 2018: 25.1 %).

The profit for the period accordingly rose by 10.3 % to EUR 92.3 million (1st half of 2018: EUR 83.7 million).

Please refer to the notes to the half-year financial report for details about consolidation of the acquisition.
 

DEVELOPMENT IN THE SECOND QUARTER

In the second quarter of 2019, both sales and operating profit were above the previous year's level owing to the acquisition as well as to an improvement in the current business of the cartonboard division. A profit increase was also achieved compared to the first quarter of the present year despite slightly lower sales.

With a capacity utilization of 98 % (1Q 2019: 98 %; 2Q 2018: 99 %), stable average prices and optimized costs, the cartonboard division reached a favourable operating margin of 11.2 % (1Q 2019: 10.1 %; 2Q 2018: 10.6 %).

In the packaging division the initial inclusion of the Tann-Group influenced the development of key indicators again in the second quarter. The operating margin was 9.4 % (1Q 2019: 7.4 %; 2Q 2018: 8.6 %).

Consolidated sales of the Group were at EUR 632.6 million (1Q 2019: EUR 642.9 million; 2Q 2018: EUR 578.5 million).

The Group's operating profit reached EUR 66.8 million, after EUR 57.2 million in the first quarter of 2019 and EUR 57.2 million in the second quarter of the previous year. The Group's operating margin rose accordingly to 10.6 % (1Q 2019: 8.9 %; 2Q 2018: 9.9 %).

The profit for the period increased to EUR 48.6 million (1Q 2019: EUR 43.7 million; 2Q 2018: EUR 42.0 million).

OUTLOOK

Muted demand, short-term planning of customers and increasing pressure on prices continue to characterize the market environment. Nevertheless, the goal stays on maintaining the Group's quality of results the best possible through intensified market penetration as well as a consequent price policy and programs aimed at increasing cost efficiency. The investment activity is unabated geared towards this with a focus on the use of state-of-the-art technology and optimizations within the product portfolio. Special attention will be paid to the continuation of the long-term growth course. Maintaining the strong profitability of the second quarter is a challenge for the third quarter.

 

Please find the detailed Press Release and the Half-Year Financial Report 2019 as well as the CEO video presentation and the details for today's CEO Conference Call on our website: www.mayr-melnhof.com.

Forthcoming results:
November 14, 2019  Results for the first three quarters of 2019

For further information, please contact:                                                                                        Stephan Sweerts-Sporck
Investor Relations
Mayr-Melnhof Karton AG
Brahmsplatz 6
A-1040 Vienna
Tel.: +43 1 501 36-91180
Fax: +43 1 501 36-191195
E-Mail: investor.relations@mm-karton.com
Website: http://www.mayr-melnhof.com