Mayr-Melnhof Karton (MMK) H2 2024 earnings summary

Executive summary

• 2024 was challenging with weak demand and intense competition, but operational improvements and efficiency programs supported solid packaging performance and profit protection.

• Achieved a 35% reduction in absolute CO2 emissions and increased training and development, highlighting sustainability progress.

• Operates three divisions: Board & Paper, Food & Premium Packaging, and Pharma & Healthcare Packaging.

• Board & Paper faced margin pressure from lower prices and higher costs, while Food & Premium Packaging achieved market-leading returns and some volume growth.

• A 20% dividend increase to EUR 1.80 per share is proposed, reflecting EPS growth.

Financial highlights

• 2024 sales were EUR 4,079.6 million, down 2.0% year-over-year; adjusted EBITDA was EUR 418.5 million, down 7.0%.

• Adjusted operating profit dropped 17.1% to EUR 190.0 million; net profit rose 24.1% to EUR 110.5 million due to lower tax expense.

• Earnings per share increased 24.1% to EUR 5.41; free cash flow declined 18.3% to EUR 302.2 million.

• CapEx in 2024 was EUR 220.9 million, with a planned increase to EUR 300 million in 2025.

• Net debt reduced to EUR 1,078.7 million; equity ratio improved to 43.8%.

Outlook and guidance

• 2025 outlook is cautious: market demand expected to remain weak, with flat order intake in packaging and a slight increase in board and paper.

• CapEx expected at EUR 300 million in 2025, focusing on competitiveness, energy efficiency, and cost reduction.

• Proceeds from the TANN Group sale (expected H1 2025) to be used for debt reduction.

• Continued rollout of the "Fit-for-Future" efficiency program and sustainability initiatives.

• Long-term carton board demand growth expected at 1-2% annually, with limited export market growth due to Asian competition.