At Euro 1,025.0 million, Mayr-Melnhof Group’s (MM) consolidated sales were below the previous year's figure (1Q 2023: Euro 1,122.1 million), primarily due to price-related declines in both divisions.
Q1 2024 Adjusted operating profit decreased by Euro 39.1 million from Euro 78.7 million to Euro 39.6 million. This decrease is primarily due to the recent increase in production costs in the Board & Paper division, which are to be offset by higher sales prices from the Q2 onwards. The Group’s adjusted operating margin was therefore 3.9 %.
Financial income amounted to Euro 6.6 million, compared to Euro 1.3 million in 1Q 2023. The increase in financial expenses from Euro -10.8 million to Euro -21.4 million resulted in particular from higher interest rates for variable-interest loans. “Other financial result - net” changed from Euro -3.1 million to Euro -6.8 million, mainly owing to currency translations.
Q1 2024 profit before tax thus totalled Euro 18.0 million after Euro 49.0 million in the previous year. Income tax expense amounted to Euro 7.1 million (1Q 2023: Euro 14.1 million), resulting in an effective Group tax rate of 39.6 % (1Q 2023: 28.7 %).
Thus, profit for the period decreased from Euro 34.9 million to Euro 10.9 million.
Peter Oswald, MM CEO, comments: “The MM Group recorded a decline in both Group sales and adjusted operating profit in the Q1 2024 compared to the previous year’s value, due to the earnings performance in the Board & Paper division. The destocking in the supply chain has been largely completed, leading to a significant recovery of volumes sold in Board & Paper. However, pressure on margins continued as expected, as price increases will only compensate for the recent rise in production costs from the Q2 onwards. In contrast, the Packaging division recorded a slight increase in results compared to the previous year, even though the margin was below the strong level of the Q3 and Q4 2023”.
Outlook
Despite significant volume increases compared to the previous year in the Board & Paper division, there are still hardly any signs of growth on the consumer goods end markets. Under these conditions, MM is focusing on margin-conscious market share gains and a consistent continuation of the profit & cash protection programme, which has been successfully implemented to date.
The upward trend in production costs is to be compensated by an ongoing improvement in sales prices. This development in particular will remain decisive for the profit situation in 2024.
MM is a global leader in consumer packaging. The Group provides packaging solutions for cartonboard and folding cartons with an attractive offer in kraft papers, uncoated fine papers, leaflets and labels.
