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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.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
N+1 Singer - Waterman Group - Encouraging AGM statement in line with expectations
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.