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Results for the first three quarters of 2018

  • Further profit increase
  • High capacity utilization
  • Significant growth in results at MM Karton
  • Higher costs weigh on margin at MM Packaging
  • Slowing demand dynamics
  • Growth course with acquisition of TANN Group continued

The Mayr-Melnhof Group was able to carry on the improved profitability level of the earlier part of the year with a good third quarter and hence to conclude after three quarters above the previous year. Both divisions reported ongoing high capacity utilization despite increasingly slowing market dynamics.

Supported by a profit increase in the cartonboard division, particularly due to better prices, the Group’s operating profit came in more than 8 % above the comparative period of the previous year. The packaging division continued to grow, however, a strong rise in input costs, especially for cartonboard, put considerable pressure on margins. Price increases aiming to pass on costs are difficult to impose, or only possible with delay. For the fourth quarter, maintaining the high level of profit remains a challenge.

In October, MM Packaging announced a significant growth step with the acquisition of the TANN Group. TANN prints on and finishes externally sourced fine paper to produce cigarette filter paper (tipping paper) and is the global market leader in this area technologically closely related to MM Packaging. The aim is to expand the value chain and strengthen the profitability of MM Packaging as well as to generate further growth. The acquisition is subject to the approval of the antitrust authorities. The transaction is expected to be closed at the beginning of 2019.

Group Key Indicators - IFRS

consolidated, in millions of EUR, IFRS



Sales1,763.11,749.1+0.8 %
Operating profit172.3158.9+8.4 %
Operating margin (in %)9.8 %9.1 % 
Profit before tax169.0151.9+11.3 %
Income tax expense(42.6)(38.6) 
Profit for the period126.4113.3+11.6 %
Net profit margin (in %)7.2 %6.5 % 
Earnings per share (in EUR)6.305.65 
Capital expenditures (CAPEX)77.9122.0 
Depreciation and amortization79.873.3 

1) as of December 31, 2017


In the first nine months of 2018, the consolidated sales of the Group totaled EUR 1,763.1 million and were thus slightly above the previous year’s value (1-3Q 2017: EUR 1,749.1 million). Both divisions contributed to this.

At EUR 172.3 million, operating profit was 8.4 % or EUR 13.4 million above the comparative value of the previous year (1-3Q 2017: EUR 158.9 million). A significant profit increase at the cartonboard division contrasted with a decrease at the packaging division. The Group's operating margin thus climbed to 9.8 % (1-3Q 2017: 9.1 %).

Financial income totaling EUR 1.0 million (1-3Q 2017: EUR 1.6 million) was offset by financial expenses of EUR -4.7 million (1-3Q 2017: EUR -4.5 million). “Other financial result − net”
amounted to EUR 0.4 million (1-3Q 2017: EUR -4.1 million) after a one-off expenditure due to an accumulated currency translation of EUR 2.3 million was reported in the previous year
following the deconsolidation of the Tunisian packaging companies.

Profit before tax at EUR 169.0 million was 11.3 % above the comparative figure of the previous year (1-3Q 2017: EUR 151.9 million). Income tax expense totaled EUR 42.6 million (1-3Q 2017: EUR 38.6 million), resulting in an effective Group tax rate of 25.2 % (1-3Q 2017: 25.4 %).

Profit for the period rose accordingly by 11.6 % to EUR 126.4 million (1-3Q 2017: EUR 113.3 million).


As a result of a well-stocked supply chain, demand in our markets and therefore also incoming orders are currently showing an increasingly slower pattern. Accordingly, competitive pressure has again intensified. On the fiber markets prices for mixed recovered paper grades have bottomed out. Furthermore, the price hike in pulp and mechanical pulp prices requires a price increase for virgin fiber-based board. Discipline in price and product policy as well as further rationalization are directed on securing the Group’s profit quality. Nevertheless, maintaining the high profit level of the previous quarters remains a challenge for the fourth quarter.


Development in the Divisions

MM Karton

in millions of EUR, IFRS



Sales1)799.9788.9+1.4 %
Operating profit79.954.6+46.3 %
Operating margin (in %)10.0 %6.9 % 
Tonnage sold (in thousands of tons)1,2601,266-0,5 %
Tonnage produced (in thousands of tons)1,271 1,269 +0.2 %

1) including interdivisional sales 

The positive momentum on the cartonboard markets up to the middle of this year is being increasingly followed by a normalization in the demand dynamics. Accordingly, the market
situation stays characterized by intense competition.

As a result of high capacity utilization, better prices, and a favorable product portfolio, MM Karton achieved a significant profit increase during the first three quarters compared to the previous year. The focus stayed consequently on a disciplined price policy while asserting market shares as well as on a growing proportion of new products with higher added value.

At 82,000 tons the average order backlog was at previous year’s level (1-3Q 2017: 82,000 tons). Both cartonboard production as well as sales, at 1,271,000 tons and 1,260,000 tons respectively, were close to the comparative figures of the previous year (1-3Q 2017: 1,269,000 tons and 1,266,000 tons respectively). With a sales share of approximately 82 % to Europe and 18 % to markets outside of Europe, slightly more was sold to European markets (1-3Q 2017: 80 % and 20 % respectively). At around 99 % (1-3Q 2017: 98 %), capacities were again almost fully utilized.

On the fiber markets the decline in prices for mixed recovered paper was followed by a slight increase from the middle of the year. In contrast, products based on virgin fibers were subject to a continuing strong upward trend in prices.

Sales increased price-related to EUR 799.9 million (1-3Q 2017: EUR 788.9 million). As a result, and also owing to lower direct costs, the operating profit at EUR 79.9 million was significantly above the comparative period (1-3Q 2017: EUR 54.6 million), thus leading to an operating margin of 10.0 % (1-3Q 2017: 6.9 %).

MM Packaging

in millions of EUR, IFRS1-3Q/20181-3Q/2017


Sales1)1,045.31,036.8+0.8 %
Operating profit92.4104.3-11.4 %  
Operating margin (in %)8.8 %10.1 % 
Tonnage processed (in thousands of tons)584569+2.6 %
Sheet equivalent (in millions)1,730.81,707.0+1.4 %

1) including interdivisional sales


Also on the European folding carton markets demand dynamics slowed from the beginning of the third quarter. Due to a well-stocked supply chain planning is now more restrained.
Therefore, and also owing to sufficient production capacities in the industry, the competitive situation is still characterized by high intensity.

Due to a good order backlog, the MM Packaging plants reported an overall high capacity utilization during the first three quarters. Through specialization in the requirements of
various consumer goods sectors and the broad geographical presence, MM Packaging was able to grow further in volume and sales.

However, margins came clearly under pressure owing to cartonboard price increases and further cost rises, especially for transport and logistics, since passing on costs through
higher selling prices is difficult to be realized or only possible with delay. With targeted costsaving programs and increased volumes it was nevertheless possible to cushion the impact
on the result. In the third quarter profitability benefited in particular from a higher value in the product mix.

Tonnage processed went up over the first three quarters of 2018 by 2.6 % from 569,000 tons to 584,000 tons, the sheet equivalent by 1.4 % to 1,730.8 million (1-3Q 2017: 1,707.0 million).

At EUR 1,045.3 million, sales were 0.8 % above the comparative value of the previous year (1-3Q 2017: EUR 1,036.8 million), mainly due to volumes. The decline in the operating profit by 11.4 % to EUR 92.4 million (1-3Q 2017: EUR 104.3 million) largely resulted from the sharp rise in direct costs. Accordingly, the operating margin was 8.8 % (1-3Q 2017: 10.1 %).

consolidated, in millions of EUR, IFRS

Sales584.5565.8598.8587.7592.1578.5   592.5
EBITDA74.876.181.382.183.9 84.5   85.7
EBITDA margin (in %)12.8 %13.4 %13.6 %14.0 %14.2 %14.6 %  14.5 %
Operating profit50.651.556.856.157.157.2  58.0 
Operating margin (in %)8.7 %9.1 %9.5 %9.5 %9.6 %9.9 %   9.8 %
Profit before tax49.247.854.953.655.656.2   57.2
Income tax expense(12.3)(12.8)(13.5)(11.9)(13.9)(14.2)  (14.5)
Profit for the period36.935.041.441.741.742.0   42.7
Net profit margin (in %)6.3 %6.2%6.9%7.1 %7.0 %7.3 %   7.2 %
Earnings per share (in EUR)1.841.742.   2.13


in millions of EUR, IFRS

Operating profit15.919.219.518.927.727.924.3
Operating margin (in %)6.1 %7.3 %7.4 %7.3 %10.3 %10.6 %   9.0 %
Tonnage sold (in thousands of tons)426418422409419418   423
Tonnage produced (in thousands of tons)421423425416416426   429

 1) including interdivisional sales


in millions of EUR, IFRS

Sales1)344.6330.0362.2355.9354.3342.1    348.9
Operating profit34.732.337.337.229.429.3      33.7
Operating margin (in %)10.1 %9.8 %10.3 %10.5 %8.3 %8.6 %  9.7 %
Tonnage processed (in thousands of tons)190185194198199196    189
Sheet equivalent (in millions) 569.8548.9588.3582.9587.0581.3   562.5

1) including interdivisional sales


Forthcoming results:
March 19, 2019 Financial results of 2018 



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