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Mayr-Melnhof Karton AG

EANS-News: Mayr-Melnhof Karton AG
Results for the first three quarters of 2021

  Corporate news transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is responsible for the content of this announcement.

Quarterly Report

Vienna -

* Strategic acquisitions Kwidzyn and Kotkamills closed in 3rd quarter
* Result impacted by one-off effects from transformation MM Board & Paper
* Lag in passing on massive input cost inflation weighs temporarily on margin
* Necessary price increases are implemented
* Ongoing high order backlog in both divisions
* Intensified capex program in efficiency and growth on track

The MM Group has structurally strengthened its competitiveness and created an
attractive platform for further growth in sustainable and innovative fiber-based
packaging solutions with the closing of the acquisitions of the cartonboard and
paper mills Kwidzyn in Poland and Kotkamills in Finland in the 3rd quarter of
2021. With the acquisitions in the virgin fiber sector, MM has not only
consolidated its position as the leading cartonboard and folding carton producer
in Europe, but also acquired two new core products, kraft papers and uncoated
fine papers. As part of the transformation, the two smaller cartonboard mills,
Baiersbronn and Eerbeek, were sold. Furthermore, production at a packaging site
in Germany was discontinued at the end of September for restructuring measures.
As expected, the income statement for the 3rd quarter therefore includes various
one-off effects.

In the current business of the first three quarters of 2021, sustained strong
demand for cartonboard packaging and papers and thus high capacity utilization
in both divisions was offset by an increase in raw material and energy costs,
unprecedented in its sharpness. The price increases implemented in the first
nine months have not yet been able to compensate the continuing rise in costs.
Therefore, where possible, a new cartonboard price increase was fixed for the
4th quarter and a further price step for all cartonboard grades was announced as
of the beginning of 2022.

The increase of 4.7 % in the Group's operating profit for the first three
quarters of 2021 mainly results from one-off effects in MM Board & Paper, while
MM Packaging recorded a rather robust ongoing development.

The objective for the coming months is to compensate for the continuing rise in
raw material and energy costs by further price adjustments and structural cost
reductions in order to catch up again in margins.

Group Key indicators (IFRS)

consolidated, in millions of EUR 1-3Q/2021 1-3Q/2020 +/-
Sales                            2,107.1   1,903.5   +10.7 %
EBITDA                           283.0     307.1     -7.8 %
Operating Profit                 177.2     169.3     +4.7 %
Operating margin (in %)          8.4 %     8.9 %     -48 bp
Profit before tax                162.4     160.6     +1.1 %
Profit for the period            128.4     116.3     +10.4 %
Earnings per share (in EUR)      6.37      5.78


The Group's consolidated sales increased basically acquisition-related by 10.7 %
or EUR 203.6 million to EUR 2,107.1 million (1-3Q 2020: EUR 1,903.5 million).

At EUR 177.2 million, the operating profit was 4.7 % above the previous year's
value (1-3Q 2020: EUR 169.3 million). The first three quarters include one-off
expenses in the amount of EUR 58.0 million: From the initial consolidation of
the mills Kwidzyn and Kotkamills EUR 31.9 million, which are mainly attributable
to ancillary acquisition costs including transaction taxes as well as
capitalization of order backlogs and the inventory valuation; and in the
division MM Packaging EUR 26.1 million restructuring costs. This is offset by
preliminary one-off income from the sale of the Eerbeek and Baiersbronn mills in
the amount of EUR 50.1 million. The Group's operating margin was therefore at
8.4 % (1-3Q 2020: 8.9 %).

Financial income totaled EUR 1.9 million (1-3Q 2020: EUR 1.0 million). The
increase in financial expenses from EUR -5.4 million to EUR -16.8 million
resulted primarily from the issuance of Schuldschein loans and
Namensschuldverschreibungen to finance the acquisitions and organic growth
projects. "Other financial result - net" changed from EUR -4.2 million to EUR
0.1 million, in particular owing to currency translation.

At EUR 162.4 million, profit before tax was slightly above the previous year (1-
3Q 2020: EUR 160.6 million). Income tax expense totaled EUR 34.0 million (1-3Q
2020: EUR 44.3 million), resulting in an effective Group tax rate of 20.9 % (1-
3Q 2020: 27.6 %). The reduction compared to the previous year is primarily due
to tax-free income from company disposals.

Accordingly, profit for the period increased from EUR 116.3 million to EUR 128.4

It should be noted that the purchase price allocation from the acquisitions had
not yet been completed as of the publication date of this report and that the
figures are therefore preliminary. Further consolidation details are planned for
subsequent reporting at year-end.


In addition to the structural changes at MM Board & Paper, the development in
the 3rd quarter of 2021 was characterized by strongly increasing input costs,
which could only be partially compensated by higher sales prices. At EUR 817.5
million, consolidated sales were acquisition-related above the figure of the
previous quarter (EUR 648.3 million) and the previous year's level (3Q 2020: EUR
637.0 million).

The Group's operating profit reached EUR 85.1 million after EUR 30.9 million in
the 2nd quarter of 2021 and EUR 46.8 million in the 3rd quarter of the previous
year. The preliminary income from the sale of the Eerbeek and Baiersbronn mills
in the amount of EUR 50.1 million was offset by one-off expenses from the
acquisition of the mills Kwidzyn and Kotkamills in the amount of EUR 31.9
million. The Group's operating margin was thus 10.4 % (2Q 2021: 4.8 %; 3Q 2020:
7.3 %). Profit for the period totaled EUR 66.2 million (2Q 2021: EUR 18.3
million; 3Q 2020: EUR 31.4 million).

Capacity utilization of the division MM Board & Paper at 95 % in the 3rd quarter
was lower than in the previous quarter (2Q 2021: 99 %; 3Q 2020: 95 %), mainly
owing to the planned annual maintenance shutdowns at Kwidzyn and Kotkamills. Due
to one-off income, the division's operating margin increased to 9.5 % (2Q 2021:
4.6 %; 3Q 2020: 3.5 %).

MM Packaging's operating margin of 10.4 % was in line with the figure for the
1st quarter of 2021 and thus also above the figure for the 2nd quarter of 2021
of 4.5 %, which was impacted by restructuring expenses, as well as the previous
year's level (3Q 2020: 9.3 %).


Demand and order situation continue to be in good shape for both divisions.
Nevertheless, in view of existing capacity limitations, sales volume can
currently only increase slightly. However, the expansions recently initiated in
several plants of MM Packaging will stepwise enable more business from the
beginning of next year. At MM Board & Paper, where the focus of investments is
on efficiency improvements and optimization of the product portfolio, the
expansive effects will only gradually take effect from 2023 onwards.

In view of the continuing cost inflation for raw materials and energy, the focus
remains on compensating this weight by increasing sales prices as soon as
possible and by structural cost reductions in order to catch up again in terms
of margins. After MM Board & Paper has fixed a new cartonboard price increase
for the 4th quarter, where possible, a further price increase for cartonboard
and paper has been announced for the beginning of 2022. In contrast, rising
cartonboard and paper prices mean new cost challenges for MM Packaging, which
can only be passed on with a time lag.

The operating performance of the newly acquired mills Kwidzyn and Kotkamills is
in line with expectations. Similar to the MM Board & Paper division as a whole,
profitability in the 4th quarter is primarily impacted by the extraordinary
energy price increases and delayed passing on through sales prices.


Please find the detailed Press Release and the Report for the first three
quarters of 2021 as well as the CEO Audio-Q&A-Webcast on our website: https://

Forthcoming results:
March 15, 2022 Financial Results for 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

end of announcement                         euro adhoc
issuer:       Mayr-Melnhof Karton AG
              Brahmsplatz 6
              A-1040 Wien
phone:        +43 1 50 136
ISIN:         AT0000938204
indexes:      ATX PRIME, ATX
stockmarkets: Wien
language:     English

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