TIDMSKG
1 August: Smurfit Kappa Group plc ('SKG' or 'the Group') today
announced results for the 6 months ending 30 June 2018.
2018 First Half | Key Financial Performance Measures
EURm H1 H1 Change
2018 2017
Revenue EUR4,428 EUR4,233 5%
EBITDA(1) EUR724 EUR569 27%
EBITDA Margin(1) 16.4% 13.4%
Operating Profit before Exceptional Items EUR529 EUR358 48%
Profit before Income Tax EUR416 EUR245 70%
Basic EPS (cent) 124.5 74.3 68%
Pre-exceptional Basic EPS (cent)(1) 140.7 75.0 88%
Return on Capital Employed(1) 18.1% 14.7%
Free Cash Flow(1) EUR148 EUR46 220%
Net Debt(1) EUR2,871 EUR2,985
Net Debt to EBITDA (LTM)(1) 2.1x 2.5x
(1) Additional information in relation to these Alternative Performance Measures ('APMs') is set out in Supplementary FinancialInformation on page 34.
First Half Key Points
-- Significant improvement against all key performance measures
-- Underlying1 revenue growth of 8%
-- EBITDA increase of 27% to EUR724 million and EBITDA margin of 16.4%
-- ROCE of 18.1%
-- Strong Free Cash Flow of EUR148 million and Net Debt to EBITDA of 2.1x
-- Completion of Reparenco acquisition for EUR460 million on 2 July
accelerating the Medium Term Plan
-- 7.5 year bond issuance of EUR600 million in June 2018
-- Interim dividend increased by 10% to 25.4 cent per share
Performance Review and Outlook
Tony Smurfit, Group CEO, commented:
"SKG is pleased to deliver significant improvement against our
key performance measures. With an increase in EBITDA of over 27% to
EUR724 million and an EBITDA margin of 16.4% our first half
performance reflects the quality of our assets, geographic reach
and market positions. SKG's integrated business model and a
performance-led culture continue to drive demonstrably superior
returns.
"The performance during the first half is a measure of the
tremendous efforts of our people and our continued success in
developing innovative packaging solutions for our
customers._______________1 Underlying in relation to financial
measures throughout this report excludes acquisitions, disposals,
currency and hyperinflation movements where applicable.
"Europe reported a record EBITDA margin of 17.3% for the first
half, with corrugated volume growth of 3%. Market demand remains
strong and the Group has continued to recover corrugated pricing in
line with expectations.
"The Americas reported a year-on-year improvement in EBITDA
margin to 15.2% for the first half as the recovery of input costs
continues. Demand is strengthening with improving corrugated
growth. Our 2017 mill investments in Mexico and Colombia continue
to ramp-up and deliver incremental tonnage for integration. We see
the Americas as a region for growth with ongoing opportunities to
expand our geographic reach.
"The Group communicated its Medium Term Plan in February of this
year. The plan outlined the positive medium-term growth drivers of
corrugated demand such as e-commerce, discount retailers, increased
supply chain complexity and the substitution of plastic and other
non-renewable substrates. SKG is uniquely positioned to capitalise
on these secular drivers with our industry leading business
applications delivering scientifically backed solutions to our
customers, whether this is in reducing their costs, driving sales
growth or reducing their business risk.
"I am particularly pleased with the acquisition of Reparenco
financed by our successful bond issuance in June. This acquisition
represents a compelling strategic fit for SKG and delivers a
significant and early step in our Medium Term Plan, securing our
current and expected European containerboard needs in a highly cost
effective manner.
"With significant growth opportunities, both organic and through
acquisition, we have announced increased medium-term performance
targets including: an objective to invest an incremental EUR1.6
billion above base capex to capitalise on internal and external
growth opportunities; an increased medium-term ROCE target of 17%
and a lower target leverage range of 1.75x to 2.5x net debt to
EBITDA.
"Our first half performance represents an early yet significant
step towards the delivery of these targets.
"As we start the second half, business conditions remain strong.
We are excited about our prospects and we continue to expect our
2018 EBITDA to be materially better than 2017. Reflecting the
Board's confidence in the Group's performance and prospects the
interim dividend is increased by 10% to 25.4 cent per share."
About Smurfit Kappa
Smurfit Kappa, a FTSE 100 company, is one of the leading
providers of paper-based packaging solutions in the world, with
around 46,000 employees in approximately 370 production sites
across 35 countries and with revenue of EUR8.6 billion in 2017. We
are located in 22 countries in Europe, and 13 in the Americas. We
are the only large-scale pan-regional player in Latin America.
With our pro-active team, we relentlessly use our extensive
experience and expertise, supported by our scale, to open up
opportunities for our customers. We collaborate with forward
thinking customers by sharing superior product knowledge, market
understanding and insights in packaging trends to ensure business
success in their markets. We have an unrivalled portfolio of
paper-packaging solutions, which is constantly updated with our
market-leading innovations. This is enhanced through the benefits
of our integration, with optimal paper design, logistics,
timeliness of service, and our packaging plants sourcing most of
their raw materials from our own paper mills.
smurfitkappa.com
Check out our microsite: openthefuture.info
Follow us on Twitter at @smurfitkappa and on LinkedIn at
'Smurfit Kappa'.
Forward Looking Statements
Some statements in this announcement are forward-looking. They
represent expectations for the Group's business, and involve risks
and uncertainties. These forward-looking statements are based on
current expectations and projections about future events. The Group
believes that current expectations and assumptions with respect to
these forward-looking statements are reasonable. However, because
they involve known and unknown risks, uncertainties and other
factors, which are in some cases beyond the Group's control, actual
results or performance may differ materially from those expressed
or implied by such forward-looking statements.
Contacts
Garrett Quinn Melanie Farrell or Mark Kenny
Smurfit Kappa FTI Consulting
T: +353 1 202 71 80 T: +353 1 756 08 00
E: ir@smurfitkappa.com E: smurfitkappa@fticonsulting.com
2018 First Half | Performance Overview
The Group reported EBITDA for the first half of EUR724 million,
EUR155 million or 27% up on the same period last year. EBITDA in
Europe was EUR148 million higher, while the Americas was EUR11
million higher. The underlying move in EBITDA was an increase of
32%, reflecting higher earnings in both regions offset in part by
higher centre costs.
The reported Group EBITDA margin of 16.4% for the first half of
2018 was up on the 13.4% in the first half of 2017 with higher
margins in both Europe and the Americas. The improved margins
reflect the strength of our integrated model, the benefits of our
capital spend programme, the benefits of ongoing corrugated price
recovery and lower recovered fibre costs.
The Group results were positively impacted by lower recovered
fibre costs of EUR73 million in the first half of 2018 reflecting
the reduction in prices from near record highs in 2017. Current
expectations are for recovered fibre prices to trend upwards in the
longer term but the shorter term price outlook remains uncertain.
While we had a tailwind from lower recovered fibre costs the
Group's first half results were negatively impacted by higher costs
in areas such as labour, distribution, wood and other raw
materials.
In Europe, for the first half, EBITDA increased by 34% to EUR587
million. The benefits of prior years' capital investments, input
cost recovery, together with volume growth were fundamental in
achieving this result. Reported corrugated volume growth for the
first half of 2018 was 3% year-on-year with the benefits of
acquisitions and organic growth being offset in part by some volume
loss as a result of price recovery initiatives.
Pricing for both recycled containerboard and kraftliner was
stable in the second quarter after increases in both grades in the
first quarter of 2018. Industry inventory levels of recycled
containerboard remained below critical levels in June highlighting
the tight market situation, notwithstanding some recent capacity
additions.
The Group completed the acquisition of Reparenco in the
Netherlands on 2 July accelerating a central element of the Medium
Term Plan. The acquisition will further strengthen our integrated
model and we are targeting in excess of EUR30 million of synergy
benefits across transport, paper integration and operational
improvements.
In the Americas, EBITDA increased 8% to EUR157 million in the
first half from EUR146 million in the first half of 2017. Although
export pricing for kraftliner from the US into Latin America
stabilised in the second quarter, it is up significantly for the
first half year-on-year with third party benchmarks reporting a 30%
increase in a region where we are short approximately 300,000
tonnes. The Group continues to recover these input cost pressures
as we move through 2018. The region is also seeing the benefit of
the investments made in our new paper machine in Los Reyes in
Mexico as well as the expansion of the Papelsa mill in
Colombia.
The Group reported a free cash flow of EUR148 million in the
first half of 2018 compared to EUR46 million in the first half of
2017, an increase of 220%. In June 2018, SKG issued a EUR600
million bond at a rate of 2.875% and the average maturity profile
of the Group's debt now stands at 4.2 years with an average
interest rate of 3.3%. Net debt to EBITDA was 2.1x at the end of
June. The Group remains well positioned within its Ba1/BB+/BB+
credit rating.
2018 First Half | Financial Performance
Revenue for the first half was EUR4,428 million, up 5% on the
same period last year. On an underlying basis the increase was 8%.
Revenue in Europe was up 7% or EUR233 million, driven predominantly
by underlying revenue growth with a small contribution from
acquisitions. Revenue in the Americas was down 3% or EUR38 million
reflecting the negative impact of currency in the first half, on an
underlying basis revenues were up 9%.
EBITDA for the first half was up 27% to EUR724 million with
growth of 34% in Europe and 8% in the Americas. On an underlying
basis, Group EBITDA was up 32% in the first half.
Operating profit before exceptional items in the first half of
2018 at EUR529 million was 48% higher than the EUR358 million for
the same period in 2017.
Exceptional items charged within operating profit in the first
half of 2018 amounted to EUR31 million and comprised costs relating
to the defence from the unsolicited approach by International Paper
and a loss on the disposal of our Baden operations in Germany.
There were no exceptional items charged within operating profit in
the first half of 2017.
Pre-exceptional net finance costs at EUR77 million were EUR34
million lower than in 2017, primarily as a result of a decrease of
EUR28 million in non-cash costs, with a positive swing of EUR26
million from a small currency translation loss on non-hedged debt
in 2017 to a gain of EUR22 million in 2018.
Pre-exceptional cash interest at EUR75 million was EUR5 million
lower than in 2017.
Exceptional finance costs charged in the six months to June 2018
amounted to EUR6 million, including EUR4 million in respect of the
fee payable to the bondholders to secure their consent to the
Group's move from quarterly to semi-annual reporting and EUR2
million representing the interest cost on the early termination of
certain US dollar/euro swaps. The swaps were terminated following
the paydown of the US dollar element of the 2018 bonds.
The exceptional finance cost of EUR2 million in 2017 represented
the accelerated write-off of the issue costs associated with that
part of the Senior Credit Facility paid down with the proceeds of
the EUR500 million bond issue.
With the combination of the EUR171 million increase in
pre-exceptional operating profit, the EUR34 million decrease in
pre-exceptional net finance costs and EUR1 million from our share
of the earnings of associates, the pre-exceptional profit before
income tax of EUR453 million was EUR206 million higher than in
2017.
After exceptional items, the profit before tax was EUR416
million compared to EUR245 million in 2017.
The income tax expense (current and deferred) at EUR121 million
in the six months to June 2018 compared to EUR69 million in 2017.
The increase of EUR52 million in the expense largely reflects moves
in profitability.
Basic EPS for the first half was 124.5 cent, 68% higher than the
74.3 cent earned in the same period of 2017. Pre-exceptional basic
EPS was 140.7 cent for the first half (2017: 75.0 cent), an
increase of 88% year-on-year.
2018 First Half | Free Cash Flow
Free cash flow in the first half was EUR148 million compared to
EUR46 million in the first half of 2017, an increase of EUR102
million. The EBITDA growth of EUR155 million was partly offset by
higher outflows for working capital and tax.
The working capital outflow in 2018 was EUR149 million compared
to EUR125 million in 2017. The outflow in 2018 was the combination
of an increase primarily in debtors but also in stocks, partly
offset by an increase in creditors. These increases reflect the
combination of volume growth, higher corrugated pricing but, in
contrast to 2017, lower OCC costs. Working capital amounted to
EUR784 million at June 2018, representing 8.7% of annualised
revenue compared to 8.3% at June 2017 and 7.3% at December
2017.
Capital expenditure amounted to EUR205 million in the first half
of 2018 and equated to 111% of depreciation, compared to 88% in the
first half of 2017.
Cash interest of EUR81 million in the first half of 2018
included the exceptional finance costs of EUR6 million. Excluding
these amounts, our cash interest amounted to EUR75 million in 2018
compared to EUR80 million in 2017. The year-on-year decrease
reflects both a lower level of net debt and lower average rates,
partly as a result of the paydown in mid-June of the relatively
higher cost 2018 senior notes.
Tax payments in the first half of EUR89 million were EUR12
million higher than in 2017 reflecting the timing of payments and
the impact on cash tax of having fully utilised historic tax losses
in certain countries.
2018 First Half | Capital Structure
Net debt was EUR2,871 million at the end of June, resulting in a
net debt to EBITDA ratio of 2.1x compared to 2.3x at the end of
December 2017 and 2.5x at the end of June 2017. The Group's balance
sheet continues to provide considerable financial strategic
flexibility, subject to the stated leverage range of 1.75x to 2.5x
through the cycle and SKG's Ba1/BB+/BB+ credit rating.
At 30 June 2018, the Group's average interest rate was 3.3%
compared to 4.1% at 31 December 2017. The Group's diversified
funding base and long dated maturity profile of 4.2 years provide a
stable funding outlook. In terms of liquidity, the Group held cash
balances of EUR1,066 million at the end of June. These balances
include the net proceeds from our EUR600 million 2.875% bond issue,
part of which were used on 2 July to complete the EUR460 million
Reparenco acquisition. In addition at 30 June 2018 Group liquidity
was further supplemented by available commitments under its
revolving credit facility of approximately EUR614 million.
Dividends
The Board will increase the 2018 interim dividend by 10% to 25.4
cent per share. It is proposed to pay the interim dividend on 26
October 2018 to shareholders registered at the close of business on
28 September 2018.
2018 First Half | Operating efficiency
Commercial Offering and Innovation
The Group was recognised with 39 awards for design, print and
sustainability across our operations in the first half of 2018.
These awards were spread across Colombia, France, Ireland, the
Netherlands, Poland, Russia, and the United Kingdom.
During the first half, the Group continued to expand its network
of global experience centres with the opening in March of the
Experience Centre in Mexico City. During the first half the Group's
first dedicated agricultural experience centre was opened in
Alicante, Spain bringing the total number of experience centres to
24. The expansion of our global experience centre network continues
to provide centres of excellence across the globe where customers
can avail of SKG's unique scientifically backed business
applications which deliver tangible benefits for our customers.
The Group recorded its highest ever sales of machine systems in
the first half with increased sales across all machine systems
territories. The increase in sales was both from new customers and
repeat customers highlighting the customer satisfaction with our
existing customer base as we work with them to reduce their cost of
doing business, automating parts of their process and ultimately
reducing their labour costs.
Sustainability
In May of this year the Group published its 2017 Sustainable
Development Report. The report updated our stakeholders on the five
strategic areas of focus for sustainability for us; Forest, Water,
Waste, Climate Change and People.
The Group had set an ambitious target to reduce the relative
total fossil CO2 emissions in its mill system by 25% by 2020. That
target was met three years early with the Group achieving a 26%
reduction in 2017. The 2017 Sustainable Development Report
announced several other key achievements including reaching two
other targets in 2017. The first was a reduction in the chemical
oxygen demand in its water, also reached three years early, and the
second was in the area of health and safety with a 9% reduction
year-on-year in lost time accident frequency rate over the five
year period of 2013-2017, exceeding the targeted decrease of 5%
year-on-year for the same period. Smurfit Kappa continues to
provide Chain of Custody certified deliveries to packaging
customers across Europe and the Americas improving from 86% in 2016
to 88% in 2017, approaching the target level of 90%
certification.
Other highlights include Smurfit Kappa's ranking in the top 1%
of the EcoVadis Sustainability ratings and its listing on the
FTSE4Good, Euronext Vigeo Europe 120, Ethibel and STOXX Global ESG
Leaders investor rating systems. The full 2017 Sustainability
Report is available in full at smurfitkappa.com
Medium Term Plan
To the end of June 2018 the Group has ordered or approved over
EUR325 million of new internal investments as part of the Medium
Term Plan communicated in February of this year. In addition to the
internal investments the Group completed the acquisition of
Reparenco on 2 July for a consideration of EUR460 million,
delivering an early and significant step in our plan. Both the
Reparenco acquisition and our internal investments show early and
significant progress in our Medium Term Plan.
2018 First Half | Regional Performance Review
Europe
The European segment delivered a 34% increase in EBITDA to
EUR587 million for the first half of 2018. This record result for
the segment reflects the benefits of our capital programme, ongoing
input cost recovery and positive operating conditions in most
markets. Lower recovered fibre costs positively impacted the
European result by EUR64 million. EBITDA margin for the first half
was a record 17.3% versus 13.9% in 2017.
During the first half of 2018 capital expenditure of EUR13
million was approved for investment in our mill system to comply
with European Union "best available techniques reference documents"
or BREF. These investments form part of our base capital
expenditure outlined in our Medium Term Plan and further raise the
barriers to entry into the kraft paper and kraftliner industry.
Corrugated volumes grew by 3% in the first half positively
impacted by underlying growth and the contribution from
acquisitions with some offset due to pricing initiatives.
Input cost recovery in corrugated pricing continued to progress
in the first half with further progress expected in the second half
of 2018.
In the first half of 2018, the price of recovered fibre in our
European business was down 24% year-on-year. Downward pressure on
recovered fibre pricing ceased in the second quarter. The Group
continues to anticipate a long-term upward trend in recovered fibre
pricing.
During the first half the region experienced higher costs in
areas such as labour, distribution, wood and other raw
materials.
Kraftliner has remained in tight supply through the first half
of 2018 with the Group implementing a price increase in February.
The Group carried out significant maintenance on its French
kraftliner mill at Facture during the month of March resulting in a
reduction in output of 40,000 tonnes with a negative year-on-year
EBITDA impact of EUR9 million in the first half.
Industry inventory levels of recycled containerboard remained
below critical levels in June highlighting the tight market
situation, notwithstanding some recent capacity additions.
The Americas
The Americas segment delivered an 8% increase in EBITDA to
EUR157 million in the first half of 2018. The EBITDA margin in the
Americas increased in the first half to 15.2% from 13.6% in the
first half of 2017 reflecting the benefits of our input cost
recovery initiatives and our capital spend programme.
Containerboard prices from the US into Latin America continued
to increase in the first half where our system is short
approximately 300,000 tonnes of kraftliner; this requires continued
input cost recovery as we progress through 2018.
Corrugated volumes in the first half showed continued
strengthening with an improved growth rate of 3% in the second
quarter.
In Colombia, corrugated volumes were up 6% for the first half.
The country is set to benefit from continued input cost recovery
and the ramp up of the Papelsa Mill expansion which started up in
late 2017 and at full run-rate will deliver an additional 40,000
tonnes of recycled containerboard for integration.
In Mexico, corrugated volumes were flat year-on-year for the
first half but showed good momentum in the second quarter at 3% up
year-on-year. We expect both margins to improve and volumes to
recover as we progress through 2018 with the region also
benefitting from the ramp-up of the Los Reyes machine which started
mid-2017 and will deliver an additional 100,000 tonnes of recycled
containerboard for integration at full run-rate.
In the US, our margins and profitability improved year-on-year
in the first half as price increases progressed and our Texas Mill
continues to perform well. Corrugated volumes in the first half
were lower due to some restructuring projects in our operations in
California.
Our Argentinean business continued the recovery seen at the end
of 2017 with strong double digit volume growth. In Brazil, a
nation-wide transport strike negatively impacted the first half
result by over EUR3 million. However, the business has shown signs
of recovering in July.
In Venezuela, our corrugated shipments were down 18% in the
first half of 2018 compared to the same period in 2017. However,
the Group's operations continue to perform in extremely difficult
circumstances and we continue to export paper to other SKG
operations in the region. The macro situation remains uncertain and
we continue to monitor events as they unfold. The business
represented less than 1% of Group EBITDA in the first half of 2018
(2017: 2%) while net assets in Venezuela decreased to EUR57 million
as at 30 June 2018 (31 December 2017: EUR128 million).
Summary Cash Flow
Summary cash flows(1)for the six months
are set out in the following table.
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
EBITDA 724 569
Exceptional items (17) -
Cash interest expense (81) (80)
Working capital change (149) (125)
Current provisions (3) (3)
Capital expenditure (205) (177)
Change in capital creditors (26) (50)
Tax paid (89) (77)
Sale of fixed assets - 3
Other (6) (14)
Free cash flow 148 46
Share issues - 1
Purchase of own shares (net) (10) (11)
Sale of businesses and investments (11) 5
Purchase of businesses and investments (16) (10)
Dividends (155) (138)
Derivative termination receipts/(payments) 17 (1)
Net cash outflow (27) (108)
Deferred debt issue costs amortised (5) (7)
Currency translation adjustment (34) 71
Increase in net debt (66) (44)
(1) The summary cash flow is prepared on a different basis to
the Condensed Consolidated Statement of Cash Flows under IFRS
('IFRS cash flow') and as such the reconciling items between EBITDA
and decrease/(increase) in net debt may differ to amounts presented
in the IFRS cash flow. The principal differences are as
follows:
(a) The summary cash flow details movements in net debt. The
IFRS cash flow details movements in cash and cash equivalents.
(b) Free cash flow reconciles to cash generated from operations
in the IFRS cash flow as shown in the table on the next page. The
main adjustments are in respect of cash interest, capital
expenditure, tax payments and the sale of fixed assets and
businesses.
(c) The IFRS cash flow has different sub-headings to those used
in the summary cash flow.
-- Current provisions in the summary cash flow are included within change
in employee benefits and other provisions in the IFRS cash
flow.
-- The total of capital expenditure and change in capital creditors in
the summary cash flow includes additions to intangible assets
which is
shown separately in the IFRS cash flow. It also includes
capitalised
leased assets which are excluded from additions to property,
plant and
equipment and biological assets in the IFRS cash flow.
-- Other in the summary cash flow includes changes in employee benefits
and other provisions (excluding current provisions),
amortisation of
capital grants, receipt of capital grants and dividends received
from
associates which are shown separately in the IFRS cash flow.
Reconciliation of Free Cash Flow to Cash Generated from
Operations
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Free cash 148 46
flow
Add Cash interest 81 80
back:
Capital expenditure (net of change in capital creditors) 231 227
Tax payments 89 77
Less: Sale of fixed assets - (3)
Profit on sale of assets and businesses - non-exceptional (1) (6)
Receipt of capital grants (in 'Other' in summary cash flow) (1) -
Non-cash financing activities (3) (1)
Cash generated from 544 420
operations
Capital Resources
The Group's primary sources of liquidity are cash flow from
operations and borrowings under the revolving credit facility. The
Group's primary uses of cash are for funding day to day operations,
capital expenditure, debt service, dividends and other investment
activity including acquisitions.
At 30 June 2018, Smurfit Kappa Treasury Funding Limited had
outstanding US$292.3 million 7.50% senior debentures due 2025. The
Group had outstanding EUR156.6 million and STGGBP64.9 million
variable funding notes issued under the EUR230 million accounts
receivable securitisation programme maturing in June 2023, together
with EUR175 million variable funding notes issued under the EUR175
million accounts receivable securitisation programme maturing in
February 2022.
Smurfit Kappa Acquisitions had outstanding EUR400 million 4.125%
senior notes due 2020, EUR250 million senior floating rate notes
due 2020, EUR500 million 3.25% senior notes due 2021, EUR500
million 2.375% senior notes due 2024, EUR250 million 2.75% senior
notes due 2025 and EUR600 million 2.875% senior notes due 2026.
Smurfit Kappa Acquisitions and certain subsidiaries are also party
to a senior credit facility. At 30 June 2018, the Group's senior
credit facility comprised term drawings of EUR252.3 million,
US$57.4 million and STGGBP94.6 million under the amortising Term A
facility maturing in 2020. In addition, at 30 June 2018, the
facility included an EUR845 million revolving credit facility of
which EUR226 million was drawn in revolver loans, with a further
EUR5 million in operational facilities including letters of credit
drawn under various ancillary facilities.
The following table provides the range of interest rates at 30
June 2018 for each of the drawings under the various senior credit
facility loans.
Borrowing Arrangement Currency Interest Rate
Term A Facility EUR 0.979% - 1.027%
USD 3.444%
GBP 1.851%
Revolving Credit Facility EUR 0.729 - 0.730%
Borrowings under the revolving credit facility are available to
fund the Group's working capital requirements, capital expenditures
and other general corporate purposes.
In March 2018, the Group repaid EUR82 million of amortising Term
A facility borrowings under the terms of the senior credit
facility.
Capital Resources (continued)
In June 2018, the Group amended its EUR240 million receivables
securitisation programme, which utilises the Group's receivables in
France, Germany and the United Kingdom, reducing the facility to
EUR230 million, extending the maturity from 2019 to 2023 and
reducing the variable funding notes margin from 1.4% to 1.2%.
In June 2018, the Group completed the redemption of its EUR200
million 5.125% senior notes due 2018 and US$300 million 4.875%
senior notes due 2018. The Group funded the redemption by drawing
on its revolving credit and securitisation facilities.
In June 2018, the Group issued EUR600 million of 7.5 year euro
denominated senior notes at a coupon of 2.875%. The net proceeds of
the offering were used in July 2018 to fund the Reparenco
acquisition and reduce borrowings under the revolving credit
facility.
Market Risk and Risk Management Policies
The Group is exposed to the impact of interest rate changes and
foreign currency fluctuations due to its investing and funding
activities and its operations in different foreign currencies.
Interest rate risk exposure is managed by achieving an appropriate
balance of fixed and variable rate funding. As at 30 June 2018, the
Group had fixed an average of 75% of its interest cost on
borrowings over the following twelve months.
The Group's fixed rate debt comprised EUR400 million 4.125%
senior notes due 2020, EUR500 million 3.25% senior notes due 2021,
EUR500 million 2.375% senior notes due 2024, EUR250 million 2.75%
senior notes due 2025, US$292.3 million 7.50% senior debentures due
2025 and EUR600 million 2.875% senior notes due 2026. In addition
the Group had EUR349 million in interest rate swaps with maturity
dates ranging from October 2018 to January 2021.
The Group's earnings are affected by changes in short-term
interest rates as a result of its floating rate borrowings. If
LIBOR/EURIBOR interest rates for these borrowings increased by one
percent, the Group's interest expense would increase, and income
before taxes would decrease, by approximately EUR11 million over
the following twelve months. Interest income on the Group's cash
balances would increase by approximately EUR5 million assuming a
one percent increase in interest rates earned on such balances over
the following twelve months.
The Group uses foreign currency borrowings, currency swaps,
options and forward contracts in the management of its foreign
currency exposures.
Principal Risks and Uncertainties
Risk assessment and evaluation is an integral part of the
management process throughout the Group. Risks are identified,
evaluated and appropriate risk management strategies are
implemented at each level.
The Board in conjunction with senior management identifies major
business risks faced by the Group and determines the appropriate
course of action to manage these risks.
The principal risks and uncertainties faced by the Group were
outlined in our 2017 annual report on pages 36-41. The annual
report is available on our website smurfitkappa.com. The principal
risks and uncertainties for the remaining six months of the
financial year are summarised below.
-- If the current economic climate were to deteriorate, for example
following Brexit or changes in world trade agreements, and
result in
an economic slowdown which was sustained over any significant
length
of time, or the sovereign debt crisis (including its impact on
the
euro) were to re-emerge or exacerbate as a result of Brexit or
changes
in world trade agreements, it could adversely affect the
Group's
financial position and results of the operations.
-- The cyclical nature of the packaging industry could result in
overcapacity and consequently threaten the Group's pricing
structure.
-- If operations at any of the Group's facilities (in particular its key
mills) were interrupted for any significant length of time it
could
adversely affect the Group's financial position and results
of
operations.
-- Price fluctuations in raw materials and energy costs could adversely
affect the Group's manufacturing costs.
-- The Group is exposed to currency exchange rate fluctuations.
-- The Group may not be able to attract and retain suitably qualified
employees as required for its business.
-- Failure to maintain good health and safety practices may have an
adverse effect on our business.
-- The Group is subject to a growing number of environmental laws and
regulations, and the cost of compliance or the failure to comply
with
current and future laws and regulations may negatively affect
the
Group's business.
-- The Group is subject to anti-trust and similar legislation in the
jurisdictions in which it operates.
-- The Group, similar to other large global companies, is susceptible to
cyber-attacks with the threat to the confidentiality, integrity
and
availability of data in its systems.
-- The Group is exposed to potential risks in relation to the
unprecedented and difficult political situation in
Venezuela.
The Board regularly monitors all of the above risks and
appropriate actions are taken to mitigate those risks or address
their potential adverse consequences.
Condensed Consolidated Income Statement - Six Months
6 months to 6 months to 30-Jun-17
30-Jun-18
Unaudited Unaudited
Pre-exceptional2018 Exceptional2018 Total2018 Pre-exceptional2017 Exceptional2017 Total2017
EURm EURm EURm EURm EURm EURm
Revenue 4,428 - 4,428 4,233 - 4,233
Cost of sales (2,984) - (2,984) (3,011) - (3,011)
Gross profit 1,444 - 1,444 1,222 - 1,222
Distribution (351) - (351) (332) - (332)
costs
Administrative (564) - (564) (532) - (532)
expenses
Other operating - (31) (31) - - -
expenses
Operating 529 (31) 498 358 - 358
profit
Finance costs (115) (6) (121) (129) (2) (131)
Finance income 38 - 38 18 - 18
Share 1 - 1 - - -
of associates'
profit (after
tax)
Profit before 453 (37) 416 247 (2) 245
income tax
Income tax (121) (69)
expense
Profit for the 295 176
financial
period
Attributable
to:
Owners of the 294 175
parent
Non-controlling 1 1
interests
Profit for the 295 176
financial
period
Earnings per
share
Basic earnings 124.5 74.3
per
share - cent
Diluted 123.8 73.9
earnings
per share
- cent
Condensed Consolidated Statement of Comprehensive Income - Six
Months
6 months to 6 months to
30-Jun-18 30-Jun-17
Unaudited Unaudited
EURm EURm
Profit for the financial period 295 176
Other comprehensive income:
Items that may be subsequently
reclassified to profit or loss
Foreign currency translation adjustments:
- Arising in the period (178) (129)
Effective portion of changes in fair
value of cash flow hedges:
- Movement out of reserve 7 3
- New fair value adjustments into reserve (16) (1)
Changes in fair value of cost of hedging:
- Movement out of reserve (1) -
- New fair value adjustments into reserve 2 -
(186) (127)
Items which will not be subsequently
reclassified to profit or loss
Defined benefit pension plans:
- Actuarial (loss)/gain (35) 15
- Movement in deferred tax 6 (2)
(29) 13
Total other comprehensive expense (215) (114)
Total comprehensive income 80 62
for the financial period
Attributable to:
Owners of the parent 88 83
Non-controlling interests (8) (21)
Total comprehensive income 80 62
for the financial period
Condensed Consolidated Balance Sheet
30-Jun-18 30-Jun-17 31-Dec-17
Unaudited Unaudited Audited
EURm EURm EURm
ASSETS
Non-current assets
Property, plant and equipment 3,159 3,191 3,242
Goodwill and intangible assets 2,382 2,426 2,427
Other investments 21 21 21
Investment in associates 14 16 13
Biological assets 118 97 110
Trade and other receivables 35 23 27
Derivative financial instruments 9 20 3
Deferred income tax assets 128 191 200
5,866 5,985 6,043
Current assets
Inventories 819 768 838
Biological assets 12 11 11
Trade and other receivables 1,789 1,622 1,558
Derivative financial instruments 10 8 16
Restricted cash 15 8 9
Cash and cash equivalents 1,051 451 530
3,696 2,868 2,962
Total assets 9,562 8,853 9,005
EQUITY
Capital and reserves attributable
to owners of the parent
Equity share capital - - -
Share premium 1,984 1,984 1,984
Other reserves (855) (615) (678)
Retained earnings 1,352 974 1,202
Total equity attributable 2,481 2,343 2,508
to owners of the parent
Non-controlling interests 147 145 151
Total equity 2,628 2,488 2,659
LIABILITIES
Non-current liabilities
Borrowings 3,749 3,243 2,671
Employee benefits 841 845 848
Derivative financial instruments 26 19 26
Deferred income tax liabilities 81 141 148
Non-current income tax liabilities 39 31 33
Provisions for liabilities and charges 52 61 62
Capital grants 17 13 19
Other payables 15 13 17
4,820 4,366 3,824
Current liabilities
Borrowings 188 201 673
Trade and other payables 1,859 1,718 1,779
Current income tax liabilities 31 37 37
Derivative financial instruments 19 19 10
Provisions for liabilities and charges 17 24 23
2,114 1,999 2,522
Total liabilities 6,934 6,365 6,346
Total equity and liabilities 9,562 8,853 9,005
CondensedConsolidated Statement of Changes in Equity
Attributable to owners of the parent
Equitysharecapital Sharepremium Otherreserves Retainedearnings Total Non-controllinginterests Totalequity
EURm EURm EURm EURm EURm EURm EURm
Unaudited
At 1 January 2018 - 1,984 (678) 1,202 2,508 151 2,659
Profit for the financial - - - 294 294 1 295
period
Other comprehensive
income
Foreign - - (169) - (169) (9) (178)
currency
translationadjustments
Defined benefit - - - (29) (29) - (29)
pension plans
Effective portion - - (9) - (9) - (9)
of changes in
fairvalue of cash
flow hedges
Changes in fair value - - 1 - 1 - 1
of cost ofhedging
Total - - (177) 265 88 (8) 80
comprehensive(expense)/income
for thefinancial period
Purchase - - - (5) (5) (3) (8)
of
non-controllinginterests
Hyperinflation - - - 43 43 9 52
adjustment
Dividends paid - - - (153) (153) (2) (155)
Share-based payment - - 10 - 10 - 10
Net Shares acquired by - - (10) - (10) - (10)
SKGEmployee Trust
At 30 June 2018 - 1,984 (855) 1,352 2,481 147 2,628
Unaudited
At 1 January 2017 - 1,983 (507) 853 2,329 174 2,503
Profit for the financial - - - 175 175 1 176
period
Other comprehensive
income
Foreign - - (107) - (107) (22) (129)
currency
translationadjustments
Defined benefit - - - 13 13 - 13
pension plans
Effective portion - - 2 - 2 - 2
of changes in
fairvalue of cash
flow hedges
Total - - (105) 188 83 (21) 62
comprehensive(expense)/income
for thefinancial period
Shares issued - 1 - - 1 - 1
Purchase - - - - - (15) (15)
of
non-controllinginterests
Hyperinflation - - - 69 69 9 78
adjustment
Dividends paid - - - (136) (136) (2) (138)
Share-based payment - - 8 - 8 - 8
Net Shares acquired by - - (11) - (11) - (11)
SKGEmployee Trust
At 30 June 2017 - 1,984 (615) 974 2,343 145 2,488
An analysis of the movements in Other reserves is provided in
Note 13.
Condensed Consolidated Statement of Cash Flows
6 months to 6 months to
30-Jun-18 30-Jun-17
Unaudited Unaudited
EURm EURm
Cash flows from operating activities
Profit before income tax 416 245
Net finance costs 83 113
Depreciation charge 177 177
Amortisation of intangible assets 18 21
Amortisation of capital grants (1) (1)
Equity settled share-based payment expense 10 8
Loss/(profit) on sale/purchase 13 (6)
of assets and businesses
Share of associates' profit (after tax) (1) -
Net movement in working capital (152) (125)
Change in biological assets (10) 5
Change in employee benefits (27) (28)
and other provisions
Other (primarily hyperinflation adjustments) 18 11
Cash generated from operations 544 420
Interest paid (100) (81)
Income taxes paid:
Irish corporation tax paid (7) (6)
Overseas corporation tax (net (82) (71)
of tax refunds) paid
Net cash inflow from operating activities 355 262
Cash flows from investing activities
Interest received 2 1
Business disposals (11) 4
Additions to property, plant and (219) (222)
equipment and biological assets
Additions to intangible assets (12) (5)
Receipt of capital grants 1 -
Increase in restricted cash (6) (1)
Disposal of property, plant and equipment 1 9
Disposal of associates - 1
Purchase of subsidiaries - (2)
Deferred consideration paid - (1)
Net cash outflow from investing activities (244) (216)
Cash flows from financing activities
Proceeds from issue of new ordinary shares - 1
Proceeds from bond issue 600 500
Purchase of own shares (net) (10) (11)
Purchase of non-controlling interests (16) (7)
Increase in other interest-bearing borrowings 533 4
Repayment of finance leases (2) (1)
Repayment of borrowings (526) (366)
Derivative termination receipts/(payments) 17 (1)
Deferred debt issue costs paid (6) (9)
Dividends paid to shareholders (153) (136)
Dividends paid to non-controlling interests (2) (2)
Net cash inflow/(outflow) from 435 (28)
financing activities
Increase in cash and cash equivalents 546 18
Reconciliation of opening to closing
cash and cash equivalents
Cash and cash equivalents at 1 January 503 402
Currency translation adjustment (20) 8
Increase in cash and cash equivalents 546 18
Cash and cash equivalents at 30 June 1,029 428
An analysis of the Net movement in working capital is provided
in Note 11.
Notes to the Condensed Consolidated Interim Financial
Statements
1.General Information
Smurfit Kappa Group plc ('SKG plc' or 'the Company') and its
subsidiaries (together 'SKG' or 'the Group') manufacture,
distribute and sell containerboard, corrugated containers and other
paper-based packaging products such as solidboard, graphicboard and
bag-in-box. The Company is a public limited company whose shares
are publicly traded. It is incorporated and domiciled in Ireland.
The address of its registered office is Beech Hill, Clonskeagh,
Dublin 4, D04 N2R2, Ireland.
2.Basis of Preparation and Accounting Policies
Basis of preparation
The condensed consolidated interim financial statements included
in this report have been prepared in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007, the related
Transparency Rules of the Central Bank of Ireland and with
International Accounting Standard 34, Interim Financial Reporting
('IAS 34') as adopted by the European Union. The balance sheet as
at 30 June 2017 has been included in this report; this information
is supplementary and not required by IAS 34. This report should be
read in conjunction with the consolidated financial statements for
the year ended 31 December 2017 included in the Group's 2017 annual
report which is available on the Group's website;
smurfitkappa.com.
The accounting policies and methods of computation and
presentation adopted in the preparation of the condensed
consolidated interim financial statements are consistent with those
described and applied in the annual report for the financial year
ended 31 December 2017 with the exception of IFRS 9, Financial
Instruments and IFRS 15, Revenue from Contracts with Customers
which are described below. A number of other changes to IFRS became
effective in 2018, however they did not have a material effect on
the condensed consolidated interim financial information included
in this report.
In preparing these condensed consolidated interim financial
statements management is required to make judgements, estimates and
assumptions that affect the reported amounts of revenue, expenses,
assets and liabilities. At June 2018, due to the extreme long-term
lack of exchangeability of currency in Venezuela, management
assessed the appropriate exchange rate to use to consolidate its
Venezuelan operations. Consequently the Group has estimated an
exchange rate (synthetic exchange rate) which it has used to
translate its Venezuelan operations. Further information is
contained in Note 16 Venezuela.
The condensed consolidated interim financial statements include
all adjustments that management considers necessary for a fair
presentation of such financial information. All such adjustments
are of a normal recurring nature.
New and amended standards and interpretations effective during
2018
Financial instruments
IFRS 9, Financial instruments, is the standard which replaces
IAS 39, Financial Instruments: Recognition and Measurement. The
Standard addresses the classification, measurement and
derecognition of financial assets and liabilities, introduces new
rules for hedge accounting and a new impairment model for financial
assets. The Group has adopted IFRS 9 from 1 January 2018, with the
practical expedients permitted under the standard. Comparatives for
2017 have not been restated.
The impact of adopting IFRS 9 on our consolidated financial
statements was not material for the Group and there was no
adjustment to retained earnings on application at 1 January
2018.
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification and measurement of financial liabilities.
However, it eliminates the previous IAS 39 categories for financial
assets of held-to-maturity, loans and receivables and
available-for-sale. Under IFRS 9, on initial recognition, a
financial asset is classified as measured at amortised cost or fair
value through other comprehensive income (FVOCI), or fair value
through profit or loss (FVPL). The classification is based on the
business model for managing the financial assets and the
contractual terms of the cash flows.
2.Basis of Preparation and Accounting Policies (continued)
The financial assets held by the Group include equity
instruments which were previously classified as available-for-sale.
Under IFRS 9, the Group will continue to measure all equity
instruments at FVOCI. However, gains or losses realised on the sale
of financial assets at FVOCI will no longer be transferred to
profit or loss on sale, but instead will be reclassified within
equity from the FVOCI reserve to retained earnings. EUR1 million
was reclassified from the available-for-sale reserve to the FVOCI
reserve on 1 January 2018.
IFRS 9 requires that when a financial liability measured at
amortised cost is modified without being derecognised, a gain or
loss should be recognised in the income statement. This change in
accounting policy did not have a material impact on the Group's
financial results.
The Group has elected to adopt the new general hedge accounting
model in IFRS 9. The new hedge accounting rules align the
accounting for hedging instruments more closely with the Group's
risk management practices and provides greater scope to apply hedge
accounting. The Group's hedge documentation has been reworked in
line with the new standard and all current hedge relationships
qualify as continuing hedges upon the adoption of IFRS 9. Under
IFRS 9 when designating a foreign exchange derivative contract as a
hedging instrument, the currency basis spread can be excluded and
accounted for separately through other comprehensive income as a
cost of hedging, being recognised in the income statement at the
same time as the hedged item affects profit or loss. Accounting for
foreign currency basis spreads as a cost of hedging has been
applied prospectively, without restating comparatives. Costs of
hedging pertaining to our foreign currency derivatives at the date
of transition of EUR2 million were reclassified to the cost of
hedging reserve on 1 January 2018.
IFRS 9 has introduced a new impairment model which requires the
recognition of impairment provisions based on expected credit
losses rather than only incurred credit losses as is the case under
IAS 39. It applies to financial assets classified at amortised
cost, debt instruments measured at FVOCI, contract assets under
IFRS 15, Revenue from Contracts with Customers, lease receivables,
loan commitments and certain financial guarantee contracts. For
trade receivables, the Group applies the IFRS 9 simplified approach
to measure expected credit losses which uses a lifetime expected
loss allowance. The change in impairment methodology as a result of
implementing IFRS 9 did not have a material impact on the Group's
financial results.
Revenue recognition
IFRS 15, Revenue from Contracts with Customers, replaces IAS 18,
Revenue and IAS 11, Construction Contracts and related
interpretations. IFRS 15 establishes a five-step model for
reporting the nature, amount, timing and uncertainty of revenue and
cash flows arising from contracts with customers. IFRS 15 specifies
how and when revenue should be recognised as well as requiring
enhanced disclosures. The core principle of the standard requires
an entity to recognise revenue to depict the transfer of goods or
services to customers in an amount that reflects the consideration
that it expects to be entitled to in exchange for transferring
those goods or services to the customer. Revenue is recognised when
an identified performance obligation has been met and the customer
can direct the use of and obtain substantially all the remaining
benefits from a good or service as a result of obtaining control of
that good or service. The Group has adopted IFRS 15 from 1 January
2018, using the modified retrospective approach and has not
restated comparatives for 2017.
The Group used the five-step model to develop an impact
assessment framework to assess the impact of IFRS 15 on the Group's
revenue transactions. The results of our IFRS 15 assessment
framework and contract reviews indicated that the impact of
applying IFRS 15 on our consolidated financial statements was not
material for the Group and there was no adjustment to retained
earnings on application of the new rules at 1 January 2018.
The adoption of IFRS 15 has had no material impact on the
principles applied by the Group for reporting the nature, amount
and timing of revenue recognition. Contracts with customers can be
readily identified throughout the Group and include a single
performance obligation to sell containerboard, corrugated
containers and other paper-based packaging products. Revenue is
recognised when control of the goods are transferred to the
customer, which for the Group is at a point in time when delivery
to the customer has taken place according to the terms of sale.
2.Basis of Preparation and Accounting Policies (continued)
New and amended standards and interpretations issued but not yet
effective or early adopted
Leases
IFRS 16, Leases issued in January 2016 by the IASB replaces IAS
17, Leases and related interpretations. IFRS 16 sets out the
principles for the recognition, measurement, presentation and
disclosure of leases for both the lessee and the lessor. For
lessees, IFRS 16 eliminates the classification of leases as either
operating leases or finance leases and introduces a single lessee
accounting model whereby all leases are accounted for as finance
leases, with some exemptions for short-term and low-value leases.
It also includes an election which permits a lessee not to separate
non-lease components (e.g. maintenance) from lease components and
instead capitalise both the lease cost and associated non-lease
cost. The lessee will recognise a right-of-use asset representing
its right to use the underlying asset and a lease liability
representing its obligation to make lease payments. For lessors,
IFRS 16 substantially carried forward the accounting requirement in
IAS 17. IFRS 16 is effective for annual periods beginning on or
after 1 January 2019, and the Group will apply IFRS 16 from its
effective date.
The standard will primarily affect the accounting for the
Group's operating leases. The application of IFRS 16 will result in
the recognition of additional assets and liabilities in the
consolidated balance sheet and in the consolidated income statement
it will replace the straight-line operating lease expense with a
depreciation charge for the right-of-use asset and an interest
expense on the lease liabilities.
The Group has completed an initial assessment of the potential
impact of IFRS 16 on its consolidated financial statements. The
Group will adopt the new standard by applying the modified
retrospective approach and will avail of the recognition exemption
for short-term and low-value leases. The Group's non-cancellable
operating lease commitments on an undiscounted basis at 31 December
2017 are detailed in Note 30 to the consolidated financial
statements of the Group's 2017 annual report and provides an
indication of the scale of leases held by the Group. The actual
impact of applying IFRS 16 on the consolidated financial statements
will depend on future economic conditions, including the discount
rate at 1 January 2019, the composition of the Group's lease
portfolio at that date, the expected lease term, including renewal
options and the extent to which the Group chooses to use practical
expedients.
The Group is continuing to assess the impact of applying IFRS
16.
Going concern
The Group is a highly integrated manufacturer of paper-based
packaging products with leading market positions, quality assets
and broad geographic reach. The financial position of the Group,
its cash generation, capital resources and liquidity continue to
provide a stable financing platform. Having assessed the principal
risks facing the Group, the Directors believe that the Group is
well placed to manage these risks successfully and have a
reasonable expectation that the Company, and the Group as a whole,
have adequate resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the condensed consolidated interim
financial statements.
Statutory accounts and audit opinion
The Group's auditors have not audited or reviewed the condensed
consolidated interim financial statements contained in this
report.
The condensed consolidated interim financial statements
presented do not constitute full statutory accounts. Full statutory
accounts for the year ended 31 December 2017 will be filed with the
Irish Registrar of Companies in due course. The audit report on
those statutory accounts was unqualified.
3.Segment and Revenue Analyses
The Group has determined operating segments based on the manner
in which reports are reviewed by the chief operating decision maker
('CODM'). The CODM is determined to be the executive management
team responsible for assessing performance, allocating resources
and making strategic decisions. The Group has identified two
operating segments: 1) Europe and 2) The Americas. The Group has
determined that a disaggregation of revenue using existing segments
is appropriate for its circumstances.
The Europe segment is highly integrated. It includes a system of
mills and plants that primarily produces a full line of
containerboard that is converted into corrugated containers. The
Americas segment comprises all forestry, paper, corrugated and
folding carton activities in a number of Latin American countries
and the United States. Inter-segment revenue is not material. No
operating segments have been aggregated for disclosure
purposes.
Segment profit is measured based on EBITDA(1)
6 months to 30-Jun-18 6 months to 30-Jun-17
Europe TheAmericas Total Europe TheAmericas Total
EURm EURm EURm EURm EURm EURm
Revenue and
results
Revenue 3,397 1,031 4,428 3,164 1,069 4,233
EBITDA before 587 157 744 439 146 585
exceptional
items
Segment (14) - (14) - - -
exceptional
items
EBITDA after 573 157 730 439 146 585
exceptional
items
Unallocated (20) (16)
centre
costs
Share-based (10) (8)
payment
expense
Depreciation (167) (182)
and
depletion (net)
Amortisation (18) (21)
Exceptional (17) -
items
Finance costs (121) (131)
Finance income 38 18
Share 1 -
of associates'
profit (after
tax)
Profit before 416 245
income tax
Income tax (121) (69)
expense
Profit for the 295 176
financial
period
(1) EBITDA is defined within Alternative Performance Measures
set out in Supplementary Financial Information.
4.Exceptional Items
6 months to 6 months to
The following items are regarded 30-Jun-18 30-Jun-17
as exceptional in nature:
EURm EURm
International Paper defence costs 17 -
Loss on the disposal of Baden operations 14 -
Exceptional items included in operating profit 31 -
Exceptional finance costs 6 2
Exceptional items included in net finance costs 6 2
Total exceptional items 37 2
Exceptional items charged within operating profit in the six
months to June 2018 amounted to EUR31 million. This comprised the
cost of countering the unsolicited approach from International
Paper and the loss on the disposal of the Baden operations in
Germany.
Exceptional finance costs charged in the six months to June 2018
amounted to EUR6 million, including EUR4 million in respect of the
fee payable to the bondholders to secure their consent to the
Group's move from quarterly to semi-annual reporting and EUR2
million representing interest cost on the early termination of
certain US dollar/euro swaps. The swaps were terminated following
the paydown of the US dollar element of the 2018 bonds.
Exceptional finance costs of EUR2 million in 2017 represented
the accelerated amortisation of the issue costs relating to the
debt within our senior credit facility which was paid down with the
proceeds of January's EUR500 million bond issue.
5.Finance Costs and Income
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Finance costs:
Interest payable on bank loans and overdrafts 25 28
Interest payable on other borrowings 57 59
Exceptional finance costs associated - 2
with debt restructuring
Exceptional consent fee - reporting waiver 4 -
Exceptional interest on early termination 2 -
of cross currency swaps
Foreign currency translation loss on debt 11 20
Net interest cost on net pension liability 11 11
Net monetary loss - hyperinflation 11 11
Total finance costs 121 131
Finance income:
Other interest receivable (2) (1)
Foreign currency translation gain on debt (33) (10)
Fair value gain on derivatives (3) (7)
not designated as hedges
Total finance income (38) (18)
Net finance costs 83 113
6.Income Tax Expense
Income tax expense recognised in the Condensed Consolidated
Income Statement
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Current tax:
Europe 62 71
The Americas 35 29
97 100
Deferred tax 24 (31)
Income tax expense 121 69
Current tax is analysed as follows:
Ireland 9 8
Foreign 88 92
97 100
Income tax recognised in the Condensed Consolidated Statement of
Comprehensive Income
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Arising on defined benefit pension plans (6) 2
The income tax expense in 2018 is EUR52 million higher than in
the comparable period in 2017, primarily due to higher
earnings.
There is a current tax charge of EUR97 million in 2018 compared
to a current tax charge of EUR100 million in 2017. In Europe the
current tax expense is EUR9 million lower and in the Americas the
current tax expense is EUR6 million higher. This reflects the tax
effects of higher profitability, offset by other timing items.
The movement in deferred tax from a deferred tax credit of EUR31
million in 2017 to a deferred tax charge of EUR24 million in 2018
includes the effects of the recognition of deferred tax liabilities
on timing differences and non-recurring prior year deferred tax
credits, as well as the use and recognition of tax losses and
credits.
There is a EUR1 million net tax charge included in the income
tax expense in respect of exceptional items in 2018.
7.Employee Benefits - Defined Benefit Plans
The table below sets out the components of the defined benefit
cost for the period:
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Current service cost 15 13
Past service cost (2) -
Net interest cost on net pension liability 8 10
Defined benefit cost 21 23
Included in cost of sales, distribution costs and administrative
expenses is a defined benefit cost of EUR13 million (2017: EUR13
million). Net interest cost on net pension liability of EUR8
million (2017: EUR10 million) is included in finance costs in the
Condensed Consolidated Income Statement.
The amounts recognised in the Condensed Consolidated Balance
Sheet were as follows:
30-Jun-18 31-Dec-17
EURm EURm
Present value of funded or partially (2,269) (2,282)
funded obligations
Fair value of plan assets 1,923 1,953
Deficit in funded or partially funded plans (346) (329)
Present value of wholly unfunded obligations (494) (517)
Amounts not recognised as assets (1) (2)
due to asset ceiling
Net pension liability (841) (848)
8.Earnings per Share
Basic
Basic earnings per share is calculated by dividing the profit
attributable to owners of the parent by the weighted average number
of ordinary shares in issue during the period less own shares.
6 months to 6 months to
30-Jun-18 30-Jun-17
Profit attributable to owners 294 175
of the parent (EUR million)
Weighted average number of ordinary 236 235
shares in issue (million)
Basic earnings per share (cent) 124.5 74.3
Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. These
comprise convertible shares issued under the Share Incentive Plan,
which were based on performance and the passage of time, and
deferred shares held in trust issued under the Deferred Annual
Bonus Plan, which are based on the passage of time.
6 months to 6 months to
30-Jun-18 30-Jun-17
Profit attributable to owners 294 175
of the parent (EUR million)
Weighted average number of ordinary 236 235
shares in issue (million)
Potential dilutive ordinary 1 2
shares assumed (million)
Diluted weighted average ordinary 237 237
shares (million)
Diluted earnings per share (cent) 123.8 73.9
Pre-exceptional 6 months to 6 months to
30-Jun-18 30-Jun-17
Profit attributable to owners 294 175
of the parent (EUR million)
Exceptional items included in profit before 37 2
income tax (Note 4) (EUR million)
Income tax on exceptional items (EUR million) 1 -
Pre-exceptional profit attributable to 332 177
owners of the parent (EUR million)
Weighted average number of ordinary 236 235
shares in issue (million)
Pre-exceptional basic earnings 140.7 75.0
per share (cent)
Diluted weighted average ordinary 237 237
shares (million)
Pre-exceptional diluted earnings 140.0 74.5
per share (cent)
9.Dividends
During the period, the final dividend for 2017 of 64.5 cent per
share was paid to the holders of ordinary shares. The Board has
decided to pay an interim dividend of 25.4 cent per share for 2018
and it is proposed to pay this dividend on 26 October 2018 to all
ordinary shareholders on the share register at the close of
business on
28 September 2018.
10.Property, Plant and Equipment
Land andbuildings Plant andequipment Total
EURm EURm EURm
Six months ended
30 June 2018
Opening net book amount 1,023 2,219 3,242
Reclassifications 25 (29) (4)
Additions - 188 188
Acquisitions 1 - 1
Depreciation charge (23) (154) (177)
Retirements and (12) (7) (19)
disposals
Hyperinflation 14 12 26
adjustment
Foreign currency (51) (47) (98)
translation
adjustment
At 30 June 2018 977 2,182 3,159
Year ended 31 December
2017
Opening net book amount 1,004 2,257 3,261
Reclassifications 56 (57) (1)
Additions 1 401 402
Acquisitions 23 15 38
Depreciation charge (49) (311) (360)
Impairments - (11) (11)
Retirements and (3) (1) (4)
disposals
Hyperinflation 42 34 76
adjustment
Foreign currency (51) (108) (159)
translation
adjustment
At 31 December 2017 1,023 2,219 3,242
11.Net Movement in Working Capital
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Change in inventories (39) (27)
Change in trade and other receivables (264) (181)
Change in trade and other payables 151 83
Net movement in working capital (152) (125)
12.Analysis of Net Debt
30-Jun-18 31-Dec-17
EURm EURm
Senior credit facility:
Revolving credit facility(1)- interest 223 2
at relevant interbank rate + 1.1%(7)
Facility A term loan(2)- interest at 407 485
relevant interbank rate + 1.35%(7)
US$292.3 million 7.50% senior debentures 252 245
due 2025 (including accrued interest)
Bank loans and overdrafts 151 154
Cash (1,066) (539)
2022 receivables securitisation variable funding 174 4
notes (including accrued interest)
2023 receivables securitisation 228 88
variable funding notes(3)
2018 senior notes (including accrued interest)(4) - 455
EUR400 million 4.125% senior notes due 405 405
2020 (including accrued interest)
EUR250 million senior floating rate notes due 250 250
2020 (including accrued interest)(5)
EUR500 million 3.25% senior notes due 498 497
2021 (including accrued interest)
EUR500 million 2.375% senior notes due 498 498
2024 (including accrued interest)
EUR250 million 2.75% senior notes due 250 249
2025 (including accrued interest)
EUR600 million 2.875% senior notes due 2025 591 -
(including accrued interest)(6)
Net debt before finance leases 2,861 2,793
Finance leases 10 12
Net debt including leases 2,871 2,805
(1) Revolving credit facility ('RCF') of EUR845 million (available under the senior credit facility) to be repaid in 2020.
(a) Revolver loans - EUR226 million
(b) Drawn under ancillary facilities and facilities supported by letters of credit - nil
(c) Other operational facilities including letters of credit - EUR5 million
(2) Facility A term loan ('Facility A') due to berepaid in certain instalments from 2018 to 2020. In March 2018, the Group repaidEUR82 million of drawings under the term loan facility.
(3) In June 2018, the EUR240 million receivables securitisation programme was amended and restated, reducing the facility toEUR230 million, extending the maturity to 2023 and reducing the variable funding notes margin from 1.4% to 1.2%. The amendmentand restatement of the programme did not result in a material modification gain or loss.
(4) EUR200 million 5.125% senior notes due 2018 and US$300 million 4.875% senior notes due 2018 redeemed in full in June 2018.
(5) Interest at EURIBOR + 3.5%.
(6) On 28 June 2018 the Group issued EUR600 million of 7.5 year euro denominated senior notes at a coupon of 2.875%. The netproceeds of the offering were used in July 2018 to fund the Reparenco acquisition and reduce borrowings under the revolvingcredit facility.
(7) Following a reduction in leverage in December 2017, the margins on the RCF and Facility A reduced by 0.25%, to 1.10% and1.35% respectively, effective February 2018.
The margins applicable under the senior credit facility are determined as follows:
Net debt/EBITDA ratio RCF Facility A
Greater than 3.0 : 1 1.85% 2.10%
3.0 : 1 or less but more than 2.5 : 1 1.35% 1.60%
2.5 : 1 or less but more than 2.0 : 1 1.10% 1.35%
2.0 : 1 or less 0.85% 1.10%
13.Other Reserves
Other reserves included in the Condensed Consolidated Statement
of Changes in Equity are comprised of the following:
Reverseacquisitionreserve Cash flowhedgingreserve Cost ofhedgingreserve Foreigncurrencytranslationreserve Share-basedpaymentreserve Ownshares Available-for-salereserve FVOCIreserve
Total
EURm EURm EURm EURm EURm EURm EURm EURm EURm
At 31 December 2017 575 (17) - (1,382) 176 (31) 1 - (678)
Adjustment - (2) 2 - - - (1) 1 -
on initialapplication
of IFRS 9(net of tax)
At 1 January 2018 575 (19) 2 (1,382) 176 (31) - 1 (678)
Other comprehensiveincome
Foreign currencytranslation - - - (169) - - - - (169)
adjustments
Effective portion - (9) - - - - - - (9)
ofchanges in
fair value ofcash
flow hedges
Changes in fair value - - 1 - - - - - 1
ofcost of hedging
Total - (9) 1 (169) - - - - (177)
othercomprehensive(expense)/income
Share-based payment - - - - 10 - - - 10
Net shares acquired bySKG - - - - - (10) - - (10)
Employee Trust
Shares distributed bySKG - - - - (12) 12 - - -
Employee Trust
At 30 June 2018 575 (28) 3 (1,551) 174 (29) - 1 (855)
At 1 January 2017 575 (22) - (1,193) 165 (33) 1 - (507)
Other comprehensiveincome
Foreign currencytranslation - - - (107) - - - - (107)
adjustments
Effective portion - 2 - - - - - - 2
ofchanges in
fair value ofcash
flow hedges
Total - 2 - (107) - - - - (105)
othercomprehensiveincome/(expense)
Share-based payment - - - - 8 - - - 8
Net shares acquired bySKG - - - - - (11) - - (11)
Employee Trust
Shares distributed bySKG - - - - (10) 10 - - -
Employee Trust
At 30 June 2017 575 (20) - (1,300) 163 (34) 1 - (615)
14.Fair Value Hierarchy
The following table presents the Group's financial assets and
liabilities that are measured at fair value at 30 June 2018:
Level 1 Level 2 Level 3 Total
EURm EURm EURm EURm
Other investments:
Listed 1 - - 1
Unlisted - 8 12 20
Derivative financial instruments:
Assets at FVPL - 8 - 8
Derivatives used for hedging - 11 - 11
Derivative financial instruments:
Liabilities at FVPL - (5) - (5)
Derivatives used for hedging - (40) - (40)
1 (18) 12 (5)
The following table presents the Group's financial assets and
liabilities that are measured at fair value at 31 December
2017:
Level 1 Level 2 Level 3 Total
EURm EURm EURm EURm
Available-for-sale financial assets:
Listed 1 - - 1
Unlisted - 8 12 20
Derivative financial instruments:
Assets at FVPL - 5 - 5
Derivatives used for hedging - 14 - 14
Derivative financial instruments:
Liabilities at FVPL - (2) - (2)
Derivatives used for hedging - (34) - (34)
1 (9) 12 4
The fair value of the derivative financial instruments has been
measured in accordance with level 2 of the fair value hierarchy.
All are plain derivative instruments, valued with reference to
observable foreign exchange rates, interest rates or broker
prices.
The fair value of listed investments is determined by reference
to their bid price at the reporting date. Unlisted investments are
valued using recognised valuation techniques for the underlying
security including discounted cash flows and similar unlisted
equity valuation models.
There have been no transfers between level 1 and level 2 during
the period.
There were no material changes in the level 3 instruments for
the period.
15.Fair Value
The following table sets out the fair value of the Group's
principal financial assets and liabilities. The determination of
these fair values is based on the descriptions set out within Note
2 to the consolidated financial statements of the Group's 2017
annual report.
30-Jun-18 31-Dec-17
Carrying value Fair value Carrying value Fair value
EURm EURm EURm EURm
Trade and 1,669 1,669 1,474 1,474
other
receivables(1)
Other 21 21 21 21
investments(2)
Cash 1,051 1,051 530 530
and
cash
equivalents(3)
Derivative 19 19 19 19
assets(4)
Restricted 15 15 9 9
cash
2,775 2,775 2,053 2,053
Trade and 1,450 1,450 1,432 1,432
other
payables(1)
Senior credit 630 630 487 487
facility(5)
2022 174 174 4 4
receivables
securitisation(3)
2023 228 228 88 88
receivables
securitisation(3)
Bank 151 151 154 154
overdrafts(3)
2025 252 302 245 298
debentures(6)
2018 notes(6) - - 455 464
2020 fixed 405 431 405 438
rate
notes(6)
2020 floating 250 263 250 270
rate
notes(6)
2021 fixed 498 533 497 541
rate
notes(6)
2024 fixed 498 507 498 526
rate
notes(6)
2025 fixed 250 255 249 266
rate
notes(6)
2026 fixed 591 589 - -
rate
notes(6)
5,377 5,513 4,764 4,968
Finance leases 10 10 12 12
5,387 5,523 4,776 4,980
Derivative 45 45 36 36
liabilities(4)
5,432 5,568 4,812 5,016
Total net (2,657) (2,793) (2,759) (2,963)
position
(1) The fair value of trade and other receivables and
payables is estimated as the present value
of future cash flows, discounted atthe market
rate of interest at the reporting date.
(2) The fair value of listed investments
is determined by reference to their
bid price at the reporting date. Unlisted
investments arevalued using
recognised valuation techniques for
the underlying security including
discounted cash flows and similar unlistedequity
valuation models.
(3) The carrying amount reported in the Condensed
Consolidated Balance Sheet
is estimated to approximate to fair
value becauseof the short-term
maturity of these instruments and, in the
case of the receivables securitisation,
the variable nature of thefacility and repricing dates.
(4) The fair value of forward foreign currency
and energy contracts is based on their
listed market price if available. If a
listedmarket price is not available,
then fair value is estimated by discounting
the difference between the contractual
forward priceand the current forward
price for the residual maturity
of the contract using a risk-free interest
rate (based on governmentbonds).
The fair value of interest rate swaps
is based on discounting estimated
future cash flows based on the terms andmaturity
of each contract and using
market interest rates for a similar
instrument at the measurement date.
(5) The fair value (level 2) of the senior credit facility
is based on the present value of its estimated
future cash flows discounted atan appropriate market
discount rate at the balance sheet date.
(6) Fair value (level 2) is based on broker
prices at the balance sheet date.
16.Venezuela
Hyperinflation
As discussed more fully in the 2017 annual report, Venezuela
became hyperinflationary during 2009 when its cumulative inflation
rate for the past three years exceeded 100%. As a result, the Group
applied the hyperinflationary accounting requirements of IAS 29 -
Financial Reporting in Hyperinflationary Economies to its
Venezuelan operations at 31 December 2009 and for all subsequent
accounting periods.
In 2018 and 2017, management engaged an independent expert to
determine an estimate of the annual inflation rate. The estimated
level of inflation to June 2018 is 2,213% (2017: 301%).
As a result of the entries recorded in respect of
hyperinflationary accounting under IFRS, the Condensed Consolidated
Income Statement is impacted as follows: Revenue EUR1 million
decrease (2017: EUR25 million decrease), EBITDA EUR20 million
decrease (2017: EUR22 million decrease) and profit after taxation
EUR26 million decrease (2017: EUR27 million decrease). In 2018, a
net monetary loss of EUR11 million (2017: EUR11 million net
monetary loss) was recorded in the Condensed Consolidated Income
Statement. The impact on our net assets and our total equity is an
increase of EUR98 million (2017: EUR127 million increase).
Exchange Control
In 2017, the Government continued to operate the DIPRO and DICOM
exchange mechanisms. In January 2018, the Government implemented a
reformed exchange rate system for the country. The DIPRO rate was
eliminated and the Government mandated that all future foreign
exchange transactions be conducted at a renewed DICOM rate. The
first auction under the new system was held on 1 February 2018 and
the DICOM rate moved to VEF 25,000 per US dollar. Subsequent to
this, the economic and political crisis in Venezuela worsened, with
a substantial increase in inflation rates. However, in the second
quarter of 2018, the renewed DICOM rate has not increased in line
with inflation, and therefore is not representative of the rate at
which the Group extracts economic benefit from its Venezuelan
operations.
These currency exchange controls in Venezuela restrict our
ability to convert amounts generated by our Venezuelan operations
into US dollars, for instance for the payment of dividends.
At June 2018, in the absence of official rates that are
representative of the economic environment in Venezuela, the Group
assessed the need to estimate an exchange rate (synthetic exchange
rate) which tracks inflation in Venezuela and reflects the rate at
which the Group extracts economic benefit from its Venezuelan
operations. In calculating a synthetic rate, the Group used DICOM
at 31 March 2018 as a starting point, when it was more aligned with
inflation, and restated it using the estimated second quarter
inflation rate.
The exchange rate calculated under the described methodology at
30 June 2018 was 233,815 VEF/USD. The DICOM rate was 115,000
VEF/USD at that date. On this basis, the financial statements of
the Group's operations in Venezuela were translated at 30 June 2018
using a synthetic rate of VEF 233,815 per US dollar and the closing
euro/US dollar rate of 1 euro = US$1.1658.
Control
The nationalisation of foreign owned companies or assets by the
Venezuelan government remains a risk. Market value compensation is
either negotiated or arbitrated under applicable laws or treaties
in these cases. However, the amount and timing of such compensation
is necessarily uncertain.
The Group continues to control operations in Venezuela and, as a
result, continues to consolidate all of the results and net assets
of these operations at the period end in accordance with the
requirements of IFRS 10, Consolidated Financial Statements.
In 2018, the Group's operations in Venezuela represented
approximately 0.6% (2017: 1.6%) of its EBITDA, 1.2% (2017: 1.4%) of
its total assets and 2.3% (2017: 3.3%) of its net assets.
Cumulative foreign translation losses arising on its net investment
in these operations amounting to EUR1,230 million (2017: EUR1,072
million) are included in the foreign currency translation
reserve.
17.Related Party Transactions
Details of related party transactions in respect of the year
ended 31 December 2017 are contained in Note 31 to the consolidated
financial statements of the Group's 2017 annual report. The Group
continued to enter into transactions in the normal course of
business with its associates and other related parties during the
period. There were no transactions with related parties in the
first half of 2018 or changes to transactions with related parties
disclosed in the 2017 consolidated financial statements that had a
material effect on the financial position or the performance of the
Group.
18.Events after the Balance Sheet Date
On 2 July 2018, the Group completed the acquisition of
Reparenco, a privately owned paper and recycling business, for an
enterprise value of EUR460 million. This acquisition will increase
Smurfit Kappa's integration of containerboard and recycling
operations into the Group in response to growing demand in
particular from the eCommerce sector. The Group has not yet
completed an initial purchase price allocation due to the timing of
the closure of this transaction.
Three-year cumulative inflation in Argentina using the wholesale
price index has now exceeded 100% indicating that Argentina is a
hyper-inflationary economy for accounting purposes and should be
considered as such from 1 July 2018. The Group will apply IAS 29 to
the results of our Argentinian operations from this date.
19.Board Approval
This interim report was approved by the Board of Directors on 31
July 2018.
20.Distribution of the Interim Report
This 2018 interim report is available on the Group's website
smurfitkappa.com.
Responsibility Statement in Respect of the Six Months Ended 30
June 2018
The Directors, whose names and functions are listed on pages 68
to 70 in the Group's 2017 annual report, are responsible for
preparing this interim management report and the condensed
consolidated interim financial statements in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007, the related
Transparency Rules of the Central Bank of Ireland and with IAS 34,
Interim Financial Reporting as adopted by the European Union.
The Directors confirm that, to the best of their knowledge:
-- the condensed consolidated interim financial statements for the half
year ended 30 June 2018 have been prepared in accordance with
the
international accounting standard applicable to interim
financial
reporting, IAS 34, adopted pursuant to the procedure provided
for
under Article 6 of the Regulation (EC) No. 1606/2002 of the
European
Parliament and of the Council of 19 July 2002;
-- the interim management report includes a fair review of the important
events that have occurred during the first six months of the
financial
year, and their impact on the condensed consolidated interim
financial
statements for the half year ended 30 June 2018, and a
description of
the principal risks and uncertainties for the remaining six
months;
-- the interim management report includes a fair review of related party
transactions that have occurred during the first six months of
the
current financial year and that have materially affected the
financial
position or the performance of the Group during that period, and
any
changes in the related party transactions described in the last
annual
report that could have a material effect on the financial
position or
performance of the Group in the first six months of the
current
financial year.
Signed on behalf of the Board
A. Smurfit, Director and Chief Executive OfficerK. Bowles,
Director and Chief Financial Officer
31 July 2018.
Supplementary Financial Information
Alternative Performance Measures
Certain financial measures set out in this report are not
defined under International Financial Reporting Standards ('IFRS').
An explanation for the use of these Alternative Performance
Measures ('APMs') is set out within Financial Key Performance
Indicators on pages 46-49 of the Group's 2017 annual report. The
key APMs of the Group are set out below.
APM Description
EBITDA Earnings before exceptional items,
share-based paymentexpense,
share of associates' profit
(after tax), net
financecosts, income tax expense,
depreciation and depletion
(net)and intangible assets amortisation.
EBITDA Margin % EBITDA
___________ x 100
Revenue
Pre-exceptional Basic EPS (cent) Profit attributable to
owners of the parent,
adjustedfor exceptional items
included in profit before incometax and
income tax on exceptional items
_____________________________________________
x 100
Weighted average number of
ordinary shares in issue
Return on Capital Employed % Last twelve months ('LTM')
pre-exceptional
operatingprofit
plus share of associates'
profit (after tax)
_____________________________________________x
100
Average capital employed (where capital
employedis the average of
total equity and net debt at thebeginning
and end of the LTM)
Free Cash Flow Free cash flow is the result
of the cash inflows
and outflowsfrom our operating
activities,
and is before those arising
fromacquisition
and disposal activities.
Free cash flow (APM) and a reconciliation
of free cash flow tocash
generated from operations (IFRS
measure) are includedin
the interim management report.
The IFRS cash flow isincluded
in the condensed consolidated
interim financialstatements.
Net Debt Net debt is comprised of
borrowings net of cash
and cashequivalents and restricted cash.
Net Debt to EBITDA (LTM) times Net debt
_____________
EBITDA (LTM)
Reconciliation of Profit to EBITDA
6 months to 6 months to
30-Jun-18 30-Jun-17
EURm EURm
Profit for the financial period 295 176
Income tax expense 121 69
Exceptional items charged in operating profit 31 -
Share of associates' profit (after tax) (1) -
Net finance costs (after exceptional items) 83 113
Share-based payment expense 10 8
Depreciation, depletion (net) and amortisation 185 203
EBITDA 724 569
Return on Capital Employed H1 2018 H1 2017
EURm EURm
Pre-exceptional operating profit plus share 991 799
of associates' profit(after tax) (LTM)
Total equity - current period end 2,628 2,488
Net debt - current period end 2,871 2,985
Capital employed - current period end 5,499 5,473
Total equity - prior period end 2,488 2,252
Net debt - prior period end 2,985 3,121
Capital employed - prior period end 5,473 5,373
Average capital employed 5,486 5,423
Return on capital employed 18.1% 14.7%
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(END) Dow Jones Newswires
August 01, 2018 02:00 ET (06:00 GMT)
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