Helsinki, Finland, 2016-07-27 11:20 CEST (GLOBE NEWSWIRE) -- MUNKSJÖ OYJ, HALF YEAR FINANCIAL REPORT, 27 JULY 2016 AT 11:20 AM CEST
Very strong quarterly performance in sales, profitability and cash flow
Highlights of the second quarter 2016
- Net sales were EUR 302.9 (291.2) million.
- Adjusted EBITDA was EUR 40.1 (25.0) million and the adjusted EBITDA margin was 13.2% (8.6%). Items affecting comparability (IAC) amounted to EUR 0.0 (-2.4) million.
- Operating result was EUR 26.7 (9.1) million and net result EUR 16.9 (2.7) million.
- Earnings per share (EPS) were EUR 0.33 (0.05).
- Operating cash flow was EUR 36.8 (5.8) million.
- In June the Board of Directors approved a long-term share value based incentive programme for senior executives and other key personnel.
Highlights of January-June 2016
- Net sales were EUR 590.9 (571.4) million.
- Adjusted EBITDA was EUR 71.1 (51.5) million and the adjusted EBITDA margin was 12.0% (9.0%). Items affecting comparability (IAC) amounted to EUR 0.0 (-2.4) million.
- Operating result was EUR 43.0 (22.3) million and net result EUR 23.2 (12.4) million.
- Earnings per share (EPS) were EUR 0.45 (0.24).
- Operating cash flow was EUR 40.4 (1.2) million.
| KEY FIGURES | Apr-Jun | Jan-Jun | Jan-Dec | ||||
| MEUR | 2016 | 2015 | Change, % | 2016 | 2015 | Change, % | 2015 |
| Net sales | 302.9 | 291.2 | 4% | 590.9 | 571.4 | 3% | 1,130.7 |
| EBITDA (adj.*) | 40.1 | 25.0 | 60% | 71.1 | 51.5 | 38% | 93.6 |
| EBITDA margin, % (adj.*) | 13.2 | 8.6 | 12.0 | 9.0 | 8.3 | ||
| EBITDA | 40.1 | 22.6 | 77% | 71.1 | 49.1 | 45% | 86.3 |
| EBITDA margin, % | 13.2 | 7.8 | 12.0 | 8.6 | 7.6 | ||
| Operating result (adj.*) | 26.7 | 11.5 | 132% | 43.0 | 24.7 | 74% | 40.0 |
| Operating margin, % (adj.*) | 8.8 | 3.9 | 7.3 | 4.3 | 3.5 | ||
| Operating result | 26.7 | 9.1 | 193% | 43.0 | 22.3 | 93% | 32.7 |
| Operating margin, % | 8.8 | 3.1 | 7.3 | 3.9 | 2.9 | ||
| Net result | 16.9 | 2.7 | n.m. | 23.2 | 12.4 | 87% | 22.8 |
| Earnings per share (EPS), EUR | 0.33 | 0.05 | n.m. | 0.45 | 0.24 | 91% | 0.44 |
| Interest-bearing net debt | 222.6 | 260.8 | -15% | 222.6 | 260.8 | -15% | 227.4 |
* Adjusted for items affecting comparability (IAC) A change marked as n.m. indicates that the percentage change is not meaningful
Unless otherwise indicated, the figures in parentheses refer to the figures for the equivalent period in 2015. This financial report is unaudited. It is published in Swedish, Finnish and English. In case of any discrepancies between the three versions, the Swedish text shall prevail.
Comment from Munksjö’s President and CEO, Jan Åström
“Our performance continued to improve during the second quarter and we delivered the strongest result since the current Munksjö Group was formed in 2013. I am happy to see that we through our own actions and by focusing on value added solutions for our customers have been able to deliver on our plan with clear results.
Based on a good first quarter and a strong second quarter, our total delivery volumes increased by four per cent during the first six months, when excluding the specialty pulp business. All of our four business areas showed volume growth, which was also positively reflected in their results. The annual maintenance shut down in 2016 at the pulp production facility in Sweden will be made in the third quarter instead of the second quarter. This change gave a positive effect on our total volumes, net sales and the result compared to last year.
We showed strong progress in profitability development and cash flow during the first six months. The total profitability improvement amounted to EUR 20 million, of which approximately half was due to own actions related to the plan to reach the profitability target of an EBITDA margin of 12 percent at the end of 2016. The rest was mainly related to favourable cost conditions.
I am pleased to announce that as a step to further contribute to responsible forest management, we joined the Forest Stewardship Council (FSC®) in the second quarter. Renewable wood fibre is the basis for all our products and therefore we proactively promote responsible forest management.”
Outlook
The demand outlook for the last six months of 2016 for Munksjö’s specialty paper products is expected to remain stable compared with the current good level and to reflect the seasonal pattern.
The annual maintenance and vacation shutdowns in the third quarter, as well as the shutdowns at the end of 2016, are expected to follow the seasonal pattern and to be carried out to about the same extent as in 2015. The next maintenance shut down at the pulp production facility in Aspa in Sweden will be carried out in September 2016 and will therefore affect the financial result of the third quarter.
The EBITDA margin in 2016 is expected to improve compared with 2015 driven by the on-going profitability improvement plan.
The cash flow effect of capital expenditure for fixed assets for 2016 is expected to be EUR 35-40 million.
Plan to reach profitability target at the end of 2016
Munksjö’s profitability target is to reach an EBITDA margin of 12 per cent at the end of 2016. The drivers for the profitability improvement include continued operational efficiency, profitable growth, product and service quality leadership and utilising the position as a market and innovation leader. Within operational efficiency, the majority of the planned actions include measures to adjust our cost structure.
Of the realised actions in the financial result in January-June 2016, the majority were related to operational efficiency. Further information on the actions related to the profitability improvement plan and their effect on the financial result can be found under the heading Munksjö Group.
The EBITDA targets per business area are; 15-16 per cent for Decor, 12-13 per cent for Release Liners, 15-16 per cent for Industrial Applications and 9-10 per cent for Graphics and Packaging.
Events after the end of the reporting period
- Gustav Adlercreutz, General Counsel and member of the Management Team, will retire in February 2017 and will be succeeded by Andreas Elving.
The Munksjö Group
| Apr-Jun | Jan-Jun | Jan-Dec | |||||
| MEUR | 2016 | 2015 | Change, % | 2016 | 2015 | Change, % | 2015 |
| Net sales | 302.9 | 291.2 | 4% | 590.9 | 571.4 | 3% | 1,130.7 |
| EBITDA (adj.*) | 40.1 | 25.0 | 60% | 71.1 | 51.5 | 38% | 93.6 |
| EBITDA margin, % (adj.*) | 13.2 | 8.6 | 12.0 | 9.0 | 8.3 | ||
| EBITDA | 40.1 | 22.6 | 77% | 71.1 | 49.1 | 45% | 86.3 |
| EBITDA margin, % | 13.2 | 7.8 | 12.0 | 8.6 | 7.6 | ||
| Operating result (adj.*) | 26.7 | 11.5 | 132% | 43.0 | 24.7 | 74% | 40.0 |
| Operating margin, % (adj.*) | 8.8 | 3.9 | 7.3 | 4.3 | 3.5 | ||
| Operating result | 26.7 | 9.1 | 193% | 43.0 | 22.3 | 93% | 32.7 |
| Operating margin, % | 8.8 | 3.1 | 7.3 | 3.9 | 2.9 | ||
| Net result | 16.9 | 2.7 | n.m. | 23.2 | 12.4 | 87% | 22.8 |
| Capital expenditure | 8.0 | 11.1 | -28% | 17.9 | 20.0 | -11% | 39.8 |
| Employees, FTE | 2,752 | 2,785 | -1% | 2,742 | 2,768 | -1% | 2,774 |
* Adjusted for items affecting comparability (IAC)
Second quarter 2016
- Total group delivery volumes increased and were higher than in the corresponding period last year in all four business areas. The delivery volumes for specialty pulp in the corresponding period last year were affected by the maintenance stop at the pulp production facility.
- Net sales increased to EUR 302.9 (291.2) million, as higher volumes more than compensated for the lower average price.
- EBITDA adjusted for IAC increased to EUR 40.1 (25.0) million and the adjusted EBITDA margin was 13.2% (8.6%). The positive result effect of higher volumes and lower variable costs, driven mainly by operational efficiency related actions, more than compensated for the negative result effect of the lower average price.
- IAC amounted to EUR 0.0 (-2.4) million.
- The operating result was EUR 26.7 (9.1) million and net result EUR 16.9 (2.7) million.
- In the reporting period, the currency hedging result impacting operating profit amounted to EUR 0.1 (-1.3) million. Exchange losses on financial assets and liabilities were EUR 0.5 (1.3) million and are reported in financial items.
January-June 2016
- Total group delivery volumes increased in all four business areas. The delivery volume development was particularly strong in Release Liners and Graphics and Packaging. The delivery volumes for specialty pulp in the corresponding period last year were affected by the maintenance stop at the pulp production facility.
- Net sales increased to EUR 590.9 (571.4) million, as higher volumes more than compensated for the lower average price, mainly driven by the lower sales price for long fibre specialty pulp.
- EBITDA adjusted for IAC increased to EUR 71.1 (51.5) million and the adjusted EBITDA margin was 12.0% (9.0%). Higher delivery volumes had a positive effect of EUR 10 million. This was offset by EUR 8 million as an effect of the lower average price. Lower variable costs, driven mainly by operational efficiency related actions, the lower energy price and lower raw material prices had a positive result effect of EUR 23 million. Higher fixed costs had a negative result effect of EUR 5 million, mainly as a result of accruals for incentive plans and increased manning related to higher production volumes.
- Out of the total profitability improvement, amounting to EUR 20 million, approximately half was related to actions related to the plan to reach the profitability target.
- IAC amounted to EUR 0.0 (-2.4) million.
- The operating result was EUR 43.0 (22.3) million and net result EUR 23.2 (12.4) million.
- In the reporting period, the currency hedging result impacting operating profit amounted to EUR -0.0 (-3.6) million. Exchange losses on financial assets and liabilities were EUR 3.0 (profit of 4.1) million and are reported in financial items.
Webcast and conference call
A combined news conference, conference call and live webcast will be arranged on the publishing day 27 July 2016 at 2:00 p.m. CEST (3:00 p.m. EEST, 12:00 p.m. GMT) at Munksjö’s headquarters in Stockholm (WTC, Klarabergsviadukten 70, Elevator D, 5th floor). The report will be presented by President and CEO Jan Åström. The event will be held in English.
The conference call and live webcast can be followed on the Internet and an on-demand version of the webcast will be available on the same webpage later the same day. To join the conference call, participants are requested to dial one of the numbers below 5-10 minutes prior to the start of the event.
Webcast and conference call information
Finnish callers: +358 (0)9 2310 1618 Swedish callers: +46 (0)8 5065 3934 US callers: +1 646 254 3368 UK callers: +44 (0)20 3364 5728
Conference ID: 3858429
Link to the webcast: http://qsb.webcast.fi/m/munksjo/munksjo_2016_0727_q2
For further information, please contact
Jan Åström, President and CEO, tel. +46 10 250 1001 Pia Aaltonen-Forsell, CFO, tel. +46 10 250 1029
Made by Munksjö - Intelligent paper technology
Munksjö is a world-leading manufacturer of advanced paper products developed with intelligent paper technology. Munksjö offers customer-specific innovative design and functionality in areas ranging from flooring, kitchens and furnishings to release papers, consumer-friendly packaging and energy transmission. The transition to a sustainable society is a natural driving force for Munksjö's growth as the products can replace non-renewable materials. This is what "Made by Munksjö" stands for. Given Munksjö's global presence and way of integrating with the customers, the company forms a worldwide service organisation with approximately 2,900 employees and 15 facilities located in France, Sweden, Germany, Italy, Spain, Brazil and China. Munksjö's share is listed on Nasdaq in Helsinki and Stockholm. Read more at www.munksjo.com.
