Mayr-Melnhof Group Results for the First Half of 2020

In the second quarter of 2020, the Mayr-Melnhof Group also recorded an overall solid operating business performance under increasingly difficult macroeconomic conditions. Although the demand for our products, cardboard and cardboard packaging for everyday goods, shows a certain resilience, the inventory build-up at the beginning of the pandemic and the significant economic downturn in several markets towards the middle of the year had an increasingly dampening effect.

With stable sales, the operating result in the first half of 2020 was only slightly below the previous year, despite impairments. In the cartonboard division, favorable raw material and energy costs as well as a good maintenance of cartonboard prices contributed to the positive development. In contrast, the packaging division developed somewhat below the previous year’s level, also due to the product mix.

Against the background of the global economic downturn and increasing competitive intensity, the Mayr-Melnhof Group will increase the focus on optimizing structural costs and deepening market penetration through innovation and product portfolio changes. Investments aimed at this are to be intensified.

The annual result is expected to be further down on the previous year, as the intensified economic downturn and necessary adjustment measures could have negative effects on earnings.

At EUR 1,266.5 million, the consolidated sales of the Group almost reached the previous year’s level (1st half of 2019: EUR 1,275.5 million).

At EUR 122.5 million, the operating result was 1.2% or EUR 1.5 million below the previous year’s figure (1st half of 2019: EUR 124.0 million) and includes expenses from the termination agreement with the former CEO in the amount of EUR -8.6 million, which were booked in equal parts in the divisions. Depreciation and amortization increased from EUR 67.6 million to EUR 89.2 million, which includes market-related impairments in the long-term assets of both divisions in the amount of EUR 20.9 million.

In the first half of the previous year, one-off acquisition effects from the first-time consolidation of the Tann Group due to the activation of the order backlog and inventory valuation amounting to EUR -4.8 million were posted.

The Group’s operating margin remained unchanged at 9.7% (1st half of 2019: 9.7%).

The financial income of EUR 0.9 million (1st half of 2019: EUR 0.7 million) was offset by financial expenses of EUR -3.8 million (1st half of 2019: EUR -4.0 million). The “Other financial result – net” came to EUR -1.9 million (1st half of 2019: EUR 1.9 million), primarily due to changes in the foreign currency result.

As a result, earnings before taxes of EUR 117.7 million were 4.0% below the previous year’s figure (1st half of 2019: EUR 122.6 million). Income taxes amounted to EUR 32.8 million (1st half of 2019: EUR 30.3 million), resulting in an effective group tax rate of 27.9% (1st half of 2019: 24.7%). This increase is mainly due to the tax effects of the termination agreement and the impairments.

The profit for the period decreased accordingly by 8.0% to EUR 84.9 million (1st half of 2019: EUR 92.3 million).
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