Global Packaging Group Reports Increased Profits in Difficult Year
Smurfit Kappa delivered another strong performance in 2021. This was all the more pleasing as the year was characterized by unprecedented cost inflation. Full-year EBITDA was €1,702 million, up 13% compared to 2020, with an EBITDA margin of 16.8%.
This performance demonstrates the strength of the integrated model, the quality of our business, our operational efficiency and growing geographical and product diversity. In recent years, the Group has made significant investments enabling us to meet our customers’ need for resilience, guaranteeing them security of supply and access to the most innovative and sustainable packaging solutions.
According to Tony Smurfit, CEO of SKG: “A key differentiator for SKG has always been our people and in a world where supply constraints are severe, I am extremely proud of how our 48,000 employees have responded to their ensuring that our customers’ needs were met and, in fact, continue to be met as we begin 2022.
“Driven by a number of long-term secular trends, we are seeing 8% growth in corrugated. This growth is a clear indication that paper-based, renewable, recyclable and biodegradable packaging is the choice of our customers and the end consumer over less sustainable alternatives.
“As noted above, 2021 has been characterized by significant and unprecedented cost inflation. These costs, including energy, recovered fibers and other raw material categories, remain at high levels. We expect to continue to recover these costs, with margin improvement, as we progress through 2022.
“Our European and American businesses performed very well during the year. Our European business recorded an EBITDA of €1,302 million with an EBITDA margin of 16.6% while our Americas business recorded an EBITDA of €441 million with an EBITDA margin of 19.5 %.
“Key to Smurfit Kappa’s performance over the past few years has been to invest both organically and through acquisitions to meet growing customer demand for innovative and environmentally friendly packaging solutions. the environment. In 2021, we approved 82 new converting machines and seven new corrugators in our operations across Europe and the Americas. We also approved significant investments in our paper system to increase efficiency and capacity and meet our ambitious sustainability goals.
“At the beginning of October, we finalized the acquisition of a recycled corrugated board plant in Italy with a capacity of 600,000 tonnes. This acquisition brings additional security of supply to our customers. In our Americas region, we continued our geographic expansion through acquisitions in Mexico and Peru. Our continued, customer-led investment in industry-leading asset conversions, along with our Verzuolo plant, will maintain a clear competitive advantage for Smurfit Kappa.
“In September, we launched our Green Finance Framework, under which we issued our first two-tranche green bonds, comprising €500 million of 8-year bonds with a coupon of 0.5% and €500 million euros of 12-year bonds with a coupon of 1%. Sustainability has always been at the heart of our operations and is now integrated into our capital structure.
“In December, the Group received approval from SBTi for our emissions targets. These goals are not only in line with the Paris Agreement, but also industry leading and a further sign of SKG’s leadership in sustainability. This leadership extends not just to the products we make and how we make them, but also to the work we do in the communities in which we operate.”
SKG sees significant opportunities across its geographic footprint and is investing to build a platform for sustainable growth to meet customer demand. The board recommends a 10% increase in the final dividend to 96.1 cents per share.
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Smurfit Kappa Group