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Mayr-Melnhof Group – Annual Results 2020
The concentration of the business portfolio on cartonboard and cartonboard packaging for consumer staples allowed for a certain resilience

The Mayr-Melnhof Group was able to close the financial year 2020 with a solid volume and cash flow development despite challenging general conditions. The concentration of the business portfolio on cartonboard and cartonboard packaging for consumer staples allowed for a certain resilience.

While sales almost reached the previous year's level, profit figures were, as expected, below the previous year due to one-off effects, primarily from market- and structure-related adjustments.

In its current business, the cartonboard division benefited in particular from favorable raw material and energy costs. The packaging division showed a solid performance mainly due to the overall good volume development.

Growth through efficiency and innovation in sustainable cartonboard and fiber-based packaging solutions are the strategic focus of the MM Group. The recently concluded agreements on the acquisition of Kotkamills, Finland, and Kwidzyn, Poland, in the virgin fiber-based cartonboard sector and the intensified investment program 2021 – 2022 for sites with cost benefits are transformative milestones on this path, and offer an attractive potential.

Annual Results 2020
consolidated, in millions of EUR, IFRS

  • Sales – 2,528.4 (2019: 2,544.4 / -0.6 %)
  • EBITDA – 398.9 (389.6 / +2.4 %)
  • Operating profit – 231.4 (255.3 / -9.4 %)
  • Profit for the year – 162.2 (190.2 / -14.7 %)
  • Employees – 9,938 (10,014)

Consolidated sales of the Group reached EUR 2,528.4 million and were thus close to the previous year's level (2019: EUR 2,544.4 million). A volume-related increase in sales in the packaging division was offset by a price-related decline in the cartonboard division.

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Development in the 4th Quarter of 2020

In the fourth quarter of 2020, market dynamics in the cartonboard business traditionally slowed down, while demand in the folding carton business continued to be significantly higher than the previous year's level, in particular for fast moving consumer goods and e-commerce.

MM Karton recorded a capacity utilization of 96 % after 95 % in the fourth quarter of the previous year. The operating profit of the division amounted to EUR 18.3 million after EUR 23.1 million. Rising prices for paper for recycling under ongoing Covid measures as well as lower volumes and the increase of the one-off effect from the shut-down of Hirschwang Karton by EUR 2.5 million weighed on profit.

With a good volume development, the operating profit of MM Packaging of EUR 43.8 million was above the previous year's level (4th quarter 2019: EUR 36.6 million).

Overall, demand on the European cartonboard markets was characterized by robustness in 2020, despite a varied course. An increased order activity at the beginning of the pandemic was followed by a successive normalization towards the middle of the year and increasingly cautious planning by customers in the last quarter. Despite high price discipline, MM Karton succeeded in maintaining its market shares well through a selective sales policy. At around 100,000 tons, the average order backlog was above the comparative figure of the previous year (2019: 68,000 tons). As in the previous year, capacity utilization amounted to 97 %. Irrespective of the Corona situation, investments for further growth and quality were continued through the technological development of plants.

On the procurement markets, prices for mixed grades of paper for recycling recorded a volatile movement at a low level after a sharp increase due to collection holdups during the lockdown in spring. Since the fourth quarter, however, prices have been rising again significantly due to further lockdowns and good demand from the processing industries. By contrast, prices for virgin fiber-based products and energy were overall more stable and below the level of the previous year.

Similar to the cartonboard market, the European folding carton markets as a whole were marked by a high degree of continuity in 2020. After a record level of incoming orders at the beginning of the pandemic, MM Packaging recorded a development at a good level also in the further course of the year. Above all, business in the FMCG and e-commerce areas was characterized by strong capacity utilization and sales development compared to the previous year. This was, however, contrasted by a decline in some premium markets, such as duty-free and cosmetics.

Plant shut-downs as a result of the Corona situation were only brief at individual production sites. Cost-cutting programs, investments and necessary structural adjustments were systematically pursued and implemented. This includes in particular automation and digitalization projects to increase efficiency and quality in the plants.

Tonnage processed of cartonboard and paper increased by 7.9 % to 847,000 tons (2019: 785,000 tons), mainly due to changes in the product mix.
 

The Annual Report 2020 will be available as of April 7, 2021.

Источник: Mayr-Melnhof Group

22.03.2021

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