After a soft H1 21, Mayr-Melnhof reported promising Q3 results. Besides the benefit of the closure of two strategic acquisitions, the firm also effectively capitalised on promising market fundamentals. Cost escalation was a pertinent challenge, but some good progress has been made with respect to (planned) price hikes. While (further) near-term cost and integration challenges can’t be ruled out, MMK remains an attractive pure-play (European) packaging market proxy.
Companies: Mayr-Melnhof Karton (MMK:VIE)Mayr-Melnhof Karton AG (MMK:WBO)
Yet again, Mayr-Melnhof reported soft quarterly results. Despite supportive top-line trends in both divisions, profitability pressure aggravated – due to higher costs and some one-off charges. While the near term is guided to remain tricky, the firm nevertheless remains well-positioned to leverage market opportunities. With the recent growth investments and considering management’s track record in delivering consistently healthy results, MMK is on the right track to realise further business grow
While business fundamentals (reflecting in top-line resilience) remain intact, Mayr-Melnhof’s Q1 results were restrained by cost headwinds. The cost challenges are expected to persist, but healthy sales growth – reinforced by management’s outlook and to be further catalysed by the closure of acquired assets – should support material earnings expansion. Overall, MMK remains well positioned to leverage the strong packaging market fundamentals.
MMK has done a good job in achieving solid results, thereby (again) overcoming various market challenges. Moreover, considering the brewing market opportunities, management has been spot on in pursuing growth investments. This should gradually result in further growth in cash flow and, hence, dividend terms, besides triggering share price appreciation. Overall, MMK remains in a sweet spot to leverage promising (sustainable) packaging market fundamentals.
Unlike H1, Mayr-Melnhof’s Q3 operating performance moderated. Moreover, cost savings / optimisation programmes resulted in various one-off expenses being recognised. But the overall performance wasn’t bad at all. Division-wise, Packaging remained resilient, while Karton was impacted by (one-off) lower capacity utilisation and a normalising order intake.
Management has maintained its cautious 2020 outlook. However, considering the robust packaging market fundamentals, and MMK’s ability to sustai
Companies: Mayr-Melnhof Karton AG
Despite the pandemic, Mayr-Melnhof Karton (MMK) reported resilient Q2 / H1 results. While there was some top-line slowdown (in Q2), operating profitability held-up quite well. Management expects a weaker 2020 vs. 2019, but we strongly believe that the group’s product offerings should continue to witness healthy demand – also due to favourable structural changes in the markets. Moreover, management’s effective cost management – with a strong track record – should render further support.
Defying all odds, Mayr-Melnhof Karton reported strong Q1 20 results. Other than COVID-19-driven panic buying resulting in healthy volumes across divisions, cost tailwinds further supported the performance (in the Karton division). Overall, the group remains an attractive proxy to capitalise on the packaging market’s long-term fundamentals and, hence, we reiterate our stock recommendation.
Unlike peers, Mayr-Melnhof Karton ended 2019 with good sales and profitability growth. As a result, the dividend was increased c.13%. While management targets further improvements in 2020, the COVID-19-induced global macro jitters could be a challenge for the newly-appointed CEO. Although, given MMK’s high-potential product offerings, past cost optimisation track record and absence of paper and pulp divisions (unlike peers), it may do relatively well.
Even though the market conditions remain challenging, Mayr-Melnhof Karton achieved strong Q3 19 results. Varying improvements materialised in both divisions. While we don’t expect the market headwinds to retreat anytime soon, the group should remain a beneficiary of the still high untapped potential of (European) packaging markets.
Mayr-Melnhof Karton’s good run continues. After recovering in Q1 19, the group posted impressive Q2 19 results – a commendable achievement, given the prevalent market headwinds. Both divisions contributed in varying degrees. While market difficulties are likely to sustain in the near term, management’s strategy to focus on value and efficiencies – effective previously as well – should continue to deliver favourable results. MMK remains a preferred asset-light sector bet, especially given the abs
MMK embarked 2019 on a good note, especially after a challenging Q4 18. Both divisions witnessed varying operating improvements. While management guided for markets to remain unpredictable and competitive, its sustained focus on business optimisation should render the much-needed cushion. Moreover, a strong balance sheet gives ample headroom to consider attractively-priced growth opportunities, whenever they (like TANN) come to the fore.
While Q4 18 was impacted by severe destocking, the continuation of intense competition and higher costs, the full-year results were still pretty good. The net cash position was restored and dividends were increased yet again. Interestingly, the Q4 18 demand difficulties have already started retreating in Q1 19. Also, with the materialisation of targeted price hikes, cost efficiencies and addition/acquisition of value-added products, MMK’s margins are likely to improve over time.
Despite somewhat slowing demand dynamics, Mayr-Melnhof reported stable Q3 results. While the group continues to exercise strong control over its operations, the recent acquisition of TANN group should support its margins from 2019 onwards. Overall, MMK remains a beneficiary of packaging market tailwinds and is insulated from the risk of conventional paper market difficulties being reinstated.
Despite competition and cost headwinds, Mayr-Melnhof has done well to achieve consistent results. While Karton (in recent months) has been compensating for the weakness in Packaging, there are no major worries in either of the businesses. In fact, the ongoing packaging industry consolidation should result in the much-needed re-rating of packagers.
In 2017, Mayr-Melnhof Karton (MMK) hit a lifetime-high of c.€132 per share. This was primarily driven by its resilient operating performance, despite an unwavered focus on Europe – which has struggled for a prolonged period. Not only did the group succeed in achieving reasonable top-line growth (2.1% yoy during 9M 17), the segment-level profitability dent was minimal (-0.8% during 9M 17) – in spite of brewing competitive and input-cost pressures. A key supporting factor was the continuation of c
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