Mayr-Melnhof Karton (MMK) H2 2023 earnings summary

Executive summary

• 2023 earnings fell sharply from the prior-year record as weak demand, lower prices and extensive downtime weighed on Board & Paper; Packaging delivered higher profit and margins.

• The profit and cash protection plan supported cash generation and lower net debt, while modernization advanced competitiveness at three cartonboard mills.

Financial highlights

• Sales fell 11.1% to €4,164.4m; adjusted EBITDA declined 41.5% to €450.2m, with a 10.8% margin versus 16.4%.

• Adjusted operating profit fell 59.2% to €229.2m; operating profit was €197.6m versus €510.4m.

• Profit before tax was €136.7m; net profit was €89.1m versus €345.3m, and EPS was €4.36 versus €17.19.

• Operating cash flow rose to €786.2m from €299.7m; free cash flow was €369.8m versus negative €19.7m.

• 4Q 2023 sales were €967.9m and adjusted EBITDA €91.5m; net loss was €2.1m and EPS was negative €0.14.

Outlook and guidance

• Board & Paper volume trends were positive in early 2024, but margin pressure persisted; market recovery is expected to be slow.

• Weak European conditions, restrained consumer spending, oversupply and low capacity utilisation are expected to weigh on results.

• Profit and cash protection measures, targeted structural adjustments and price increases to pass on recent production-cost increases will continue.

• 2024 CAPEX is expected at ~€300m, including carryovers, focused on selected competitiveness projects.