EANS-News: Mayr-Melnhof Karton AG / Results for the 1st Half-Year 2021 CNE

8/19, 8:00 AM (Source: euro adhoc)
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Mid Year Results

Vienna -

* Transformational acquisitions of Kwidzyn and Kotkamills beginning of
  August executed
* Price increases lagging input cost inflation leave margins temporarily
  squeezed
* High orderbook in Cartonboard and Packaging
* Ongoing structural cost-adjustments

The MM Group continued to record high capacity utilization in both divisions in
the 2nd quarter of 2021 with good demand for cartonboard and cartonboard
packaging. 1st half-year sales of the MM Group were thus slightly above the
previous year's level. However, as expected, this was offset by a significant
weight on results owing to the ongoing massive cost inflation for raw materials,
energy and logistics. The time lag between the rapid cost increase and the
implemented price increases led to a major squeeze in operating profit in the
cartonboard business. By contrast, current business development in the packaging
division was more robust. However, as already announced, necessary restructuring
measures at a packaging site in Germany resulted in one-off expenses of
approximately EUR 26 million.

Our goal is to compensate the significant cost increase the best possible by a
further cartonboard price increase as of October. For the current 3rd quarter,
however, ongoing pressure on margins is to be expected due to the lag in passing
on of costs. In addition, the one-off effects from the initial consolidation of
the acquisitions and deconsolidation of the disposals will impact the 3rd
quarter results.

STRATEGIC UPDATE

Through the transformational acquisitions of the Kwidzyn mill in Poland, and
Kotkamills, Finland, we have structurally strengthened the Group's
competitiveness. Both mills offer us a growth platform for the next decade
through innovations, especially in the area of sustainability, a favorable cost
position and the strengthening of our leading position in European cartonboard.
In addition, we acquired two new core businesses "Kraft Papers" and "Uncoated
Fine Papers". In line with the expanded product portfolio, the division MM
Karton has been renamed MM Board & Paper. Part of the transformation was the
disposal of the smaller cartonboard mills Eerbeek, Netherlands, and Baiersbronn,
Germany.

Group Key indicators (IFRS, unaudited)

Consolidated, in millions of EUR 1st HY/2021 1st HY/2020 +/-
Sales                            1,289.6     1,266.5     +1.8 %
EBITDA                           155.5       211.7       -26.5 %
Operating Profit                 92.1        122.5       -24.8 %
Operating margin (in %)          7.1 %       9.7 %       -253 bp
Profit before tax                82.9        117.7       -29.5 %
Profit for the period            62.2        84.9        -26.7 %
Earnings per share (in EUR)      3.07        4.23


INCOME STATEMENT

The Group's consolidated sales increased slightly from EUR 1,266.5 million to
EUR 1,289.6 million.

At EUR 92.1 million, operating profit was 24.8 % or EUR 30.4 million lower than
in the previous year (1st half of 2020: EUR 122.5 million). This decline is
mainly due to the rapid increase in costs in the cartonboard business, which can
only be passed on with a time lag. At EUR 26.1 million, one-off expenses from
adjustment and restructuring measures were at a similar level as the one-off
effects in the 1st half of the previous year (1st half of 2020: EUR 29.5
million). The Group's operating margin was therefore at 7.1 % (1st half of 2020:
9.7 %).

Financial income of EUR 1.0 million (1st half of 2020: EUR 0.9 million) was
offset by financial expenses of EUR -10.3 million (1st half of 2020: EUR -3.8
million). The latter increased in particular due to the issuance of Schuldschein
loans and Namensschuldverschreibungen in the 1st quarter of 2021 to finance the
acquisitions and organic growth projects. "Other financial result - net"
amounted to EUR 0.1 million (1st half of 2020: EUR -1.9 million) mainly due to
changes in the foreign exchange result.

Profit before tax totaled EUR 82.9 million, compared to EUR 117.7 million in the
previous year. Income tax expense was at EUR 20.7 million (1st half of 2020: EUR
32.8 million), resulting in an effective Group tax rate of 25.0 % (1st half of
2020: 27.9 %).

Accordingly, profit for the period decreased from EUR 84.9 million to EUR 62.2
million.

DEVELOPMENT IN THE 2ND QUARTER

At EUR 648.3 million, consolidated sales were in line with the 1st quarter (EUR
641.3 million) and slightly above the previous year's level (2Q 2020: EUR 619.9
million).

Mainly due to the one-off expenses for restructuring measures in the packaging
division as well as the strong increase in input costs in the cartonboard sector
the Group's operating profit decreased to EUR 30.9 million after EUR 61.2
million in the 1st quarter of 2021 and EUR 57.9 million in the 2nd quarter of
the previous year. The operating margin was thus at 4.8 % (1Q 2021: 9.6%; 2Q
2020: 9.3 %). Profit for the period totaled EUR 18.3 million (1Q 2021: EUR 43.9
million; 2Q 2020: EUR 39.8 million).

Cartonboard capacities were again almost fully utilized in the 2nd quarter at 99
% (1Q 2021: 99 %; 2Q 2020: 99 %). The division's operating margin amounted to
4.6 % (1Q 2021: 7.3 %; 2Q 2020: 9.6 %).

The operating margin of the packaging division decreased to 4.5 % (1Q 2021: 10.4
%; 2Q 2020: 8.4 %) due to the one-off expenses.

OUTLOOK

Along with ongoing good demand on our sales markets, the strong cost inflation
on the procurement markets has been persisting also in the 3rd quarter. Thus,
the margins of MM remain under pressure despite improved selling prices.
Although recovered paper prices stayed stable at a peak level at the beginning
of the summer, it is unclear whether this will result in a cap. In contrast, the
strong price increase for many other input factors continues unabated. A further
cartonboard price increase from October onwards is intended to compensate for
the cost increase in the cartonboard sector the best possible. On the other
hand, higher cartonboard prices mean new cost weight for MM Packaging, which can
only be passed on with a time lag.

For the acquisitions of Kwidzyn and Kotkamills, the positive contribution from
the current result will be offset by one-off expenses this year due to the
capitalization of high order backlogs and inventory valuation in the course of
initial consolidation. As a result, the new mills' earnings will only be fully
reflected from 2022 onwards. On the other hand, the disposal of the Eerbeek and
Baiersbronn mills is expected to generate a deconsolidation gain of between EUR
45 - 55 million in the 3rd quarter, which will be partly offset by acquisition
costs including transaction taxes.

----

Please find the detailed Press Release and the Half-Year Financial Report 2021
as well as the CEO video statement and the details for today's CEO Conference
Call on our website: https://www.mm.group [https://www.mm.group].

Forthcoming results:
November 16, 2021 Results for the first three quarters of 2021

Further inquiry note:
For further information, please contact:
Stephan Sweerts-Sporck
Investor Relations
Mayr-Melnhof Karton AG
Brahmsplatz 6, A-1040 Vienna, Austria
Tel.: (+43/1) 50136 - 91180
e-mail: investor.relations@mm-karton.com

end of announcement                         euro adhoc
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issuer:       Mayr-Melnhof Karton AG
              Brahmsplatz 6
              A-1040 Wien
phone:        +43 1 50 136
FAX:          
mail:         investor.relations@mm-karton.at
WWW:          www.mayr-melnhof.com
ISIN:         AT0000938204
indexes:      ATX, ATX PRIME
stockmarkets: Wien
language:     English

EAX0010    2021-08-19/08:00

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