Mayr-Melnhof Karton (MMK) Q3 2024 earnings summary

Executive summary

• Q3 and Q1-3 2024 sales declined 4.0% year-over-year to €3,068.8 million, mainly due to lower selling prices despite higher volumes in Board & Paper; Food & Premium Packaging delivered strong margins above 10% driven by productivity gains and innovation.

• Adjusted EBITDA fell 17.6% to €295.7 million, with margin down to 9.6% from 11.2% year-over-year.

• Annual maintenance downtime in Board & Paper division negatively impacted Q3 results by €25 million.

• Cost savings and targeted price increases are expected to support results in 2025, with most benefits from profit and cash protection programs materializing then.

• Strategic transformation included acquisitions in Finland and Poland, divestments, and major investments to enhance competitiveness.

Financial highlights

• Adjusted operating profit declined 33.7% to €126.3 million; margin fell to 4.1% from 6.0%.

• Earnings per share dropped 43.6% to €2.54; net profit margin at 1.7% vs. 2.9% prior year.

• Free cash flow turned negative at €-18.8 million, compared to €8.8 million in Q1-3 2023.

• Capital expenditures for Q1-3 2024 were €191.3 million, with full-year expectations at €250 million, well below previous guidance.

• Financial expenses increased due to higher variable-interest financing rates.

Outlook and guidance

• Subdued market dynamics and weak consumer demand are expected to persist into 2025, with business performance anticipated to remain consistent with recent quarters.

• Board & Paper division is expected to return to slightly positive results in Q4 2024 after maintenance impact.

• Majority of cost savings from profit and cash protection programs are expected to materialize in 2025, with some impact already visible in H2 2024.

• Higher pricing is being implemented to offset elevated fiber and personnel costs.

• Capital expenditures projected at around €250 million for 2024.