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Research Tree provides access to ongoing research coverage, media content and regulatory news on MAYR-MELNHOF KARTON AG. We currently have 7 research reports from 1 professional analysts.
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MAYR-MELNHOF KARTON AG
MAYR-MELNHOF KARTON AG
Tough markets weigh on the Q3 results
22 Nov 16
Mayr-Melnhof Karton’s (MMK) Q3 16 results were behind consensus estimates. Sales came in at €572m (+4.3% yoy; +1% qoq), mostly benefiting from last year’s Ileos acquisition (in the Packaging division). In the Karton division, despite high capacity utilisation (98%), pricing pressure resulted in sales falling (-3.5% yoy; -1.1% qoq) to €256m. The profitability impact was worse, with adjusted EBIT correcting (15% yoy; 11% qoq) to €49m. Here again, Karton sagged, with operating profit down (40% yoy; 19% qoq) to €15m – the top-line impact was aggravated by higher recovered paper prices. Although some cushion came from Packaging (EBIT of €34m; +4.6% yoy; -7.1% qoq), mostly driven by cost efficiencies and a favourable product mix. Net profit for the quarter was €35m (-14% yoy and qoq). Reported OCFs were slightly better (-5.4% yoy; +8.2% qoq) at €61m – as the quarter witnessed ‘NIL’ working capital investments, while capex was down (-15% yoy; -21% qoq) to €28m. The net debt position (already comforting) improved further to €10m (vs. €42m at end-Q2). Management has painted a bleak near-term outlook, with: 1/ Q4 expected to be similar to Q3 – as the year-end typically witnesses reduced business activity; 2/ raw material costs expected to remain high; and 3/ 2016 performance posing as a challenging benchmark for 2017, given today’s market environment.
Given the (growing) market uncertainties, the Q2 results were good
22 Aug 16
Despite the brewing economic uncertainty in Europe (and the UK), Mayr-Melnhof Karton (MMK) reported a healthy Q2 16 performance. Sales were up 5.7% yoy to €566m, though mostly driven by the acquisition-related higher volumes (+8.5%) in MM Packaging. Sequentially, sales were down 1.7% as overall packaging markets remained competitive. Still, the group managed to sustain its profit momentum, with adjusted EBIT coming in at €56m (+14%; +0.7% qoq). MM Packaging was a key contributor (adjusted EBIT of €37m (+38%; +4.9% qoq)), primarily benefiting from a good product mix. On the other hand, MM Karton suffered (adjusted EBIT of €19m (-15%; -6.4% qoq)) due to the continuation of weak order backlogs (50kt in H1 16 vs. 91kt in H1 15) and higher recovered paper prices. Net profit was up 29% (and 4.1% qoq) to €41m as further support emanated from materially lower net financial expenses. In addition to the profitability resilience, lower working capital requirements (€8m vs. €25m and €22m in Q2 15 and Q1 16, respectively) helped reported OCFs gallop (+70%; +34% qoq) to €56m. Net debt remained largely unchanged (at €42m) due to the dividend payment for FY15. Given a precarious macro situation and growing packaging competition across Europe, management continues to maintain a cautious outlook and anticipates the business environment will remain challenging in H2 16.
Q1 strong (as expected); cautious full-year outlook
20 May 16
Mayr-Melnhof Karton (MMK) embarked on another year on a firm note as it reported strong Q1 16 results. Sales were up 7.9% yoy to €576m, primarily due to the Ileos acquisition (completed in October 2015) – resulting in 13% higher sales in ‘MM Packaging’. While scheduled stoppages translated into lower utilisation (97% vs. 99% in Q1 15) and, hence, muted growth (1.7%) in ‘MM Karton’. Sequentially though, sales were up only 2.2%, reflecting a precarious global economic situation. Profitability performance was better with an adjusted EBIT of €55m (+8.7%; +22% qoq). While cost efficiencies continued, somewhat lower recovered paper (a key input) prices rendered further support. Similarly, net profit was up 11% (and 16% qoq) to €39m. While reported OCFs also increased 12% to €42m, net debt remained unchanged at €38m due to 19% higher capex (€40m) on account of the replacement of a power station at an Austrian cartonboard mill.
Impressive performance continues
23 Mar 16
Drawing curtains for the AV paper and packaging universe results season, Mayr-Melnhof Karton (MMK) reported strong Q4 and FY15 results – thereby maintaining its performance momentum over the years. The results were broadly in line with AV estimates and slightly ahead of the market expectations. Healthy top-line… Sales: Q4 – €564m (+9.2% yoy; +2.9% qoq); 2015 – €2.2bn (+4.5%) Healthy top-line growth has been a hallmark of MMK’s performance and 2015 was no exception to that trend. In fact, 2015 sales were the highest the group has achieved over the past decade, despite Europe continuing to be at the core of its operations. Apart from close to one-fifth of the annual sales growth coming from the Ileos acquisition, annual (and quarterly) volumes in both Karton and Packaging divisions were up 4.7% (11%) and 3.8% (7%), respectively. While capacity utilisation in Karton remained impressive (98% in 2015 vs. 97% in 2014), Packaging capitalised on technological production innovations to counter fierce market competition. …supported by continuation of cost efficiencies Adjusted EBIT – €45m (+3.7%; -22%); 2015 – €203m (+13%) Higher productivity and cost improvements across both divisions helped 2015 group margins to improve 70bp to 9.3%. Although increasing recovered paper prices (a key input – accounting for c.80% of MMK’s annual fibre consumption) are believed to have impacted the Q4 performance to some extent – with the effect being more visible on a sequential basis. With the operating benefits percolating down, full-year net profit came in at €142m (+8%). Visible balance sheet strength The reported OCFs were up 25% to €207m while capex was down 8.4% to €128m. With the completion of the Ileos acquisition, cash at end-2015 was down 20% yoy to €255m, while borrowings were up 10% to €293m. Yet overall leverage is well within control and more (opportunistic) acquisitions are being targeted for 2016, while organic expansion plans would continue unabated. After declaring an interim dividend of €1.6 per share, a final dividend of €1.2 per share was announced. As a result, full-year dividend was up 7.7% to €2.8 per share. The much-awaited “FOODBOARD” (a high quality coated cartonboard for food packaging) has been launched during Q1 16.
Productivity gains help sustain strong performance momentum
18 Nov 15
Even in the absence of material forex benefits (unlike the other AV paper companies), Mayr-Melnhof Karton (MMK) has continued to deliver a strong performance. Q3 sales came in at €548m (+1.9% yoy; +2.3% qoq) driven by healthy volumes (Karton: +1.5%; Packaging: +4.5%) and slightly higher carton prices. Although packaging prices continue to remain under pressure due to intensifying competition. The continuation of productivity gains in both the segments and optimal capacity utilisation (99%) in Karton resulted in adjusted EBIT improving further (+22%; +19% qoq) to €58m. Net profit came in at €41m (+12%; +29% qoq) as higher other financial expenses trimmed some of the operating gains. Reported OCFs galloped 75% (+95% qoq) to €65m as working capital efficiencies (use of only €6m vs. use of €21m and €25m in Q3 14 and Q2 15, respectively) added to the profitability gains. Consequently, net cash position has further strengthened from €8m at the end of Q2 15 to €36m at the end of Q3 15. However, with the completion of the Ileos acquisition (€85m paid in cash) and an interim dividend payment of €32m after the close of Q3, the group should eventually revert to a net debt position. Despite the slowing Karton segment order-book, management guides for earnings improvement to continue on the back of further efficiencies being targeted. Greater confidence in earnings delivery resulted in the group announcing its first interim dividend – in effect prepaying one half of its full-year dividend – in October 2015.
20 Feb 17
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The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
21 Feb 17
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N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.