Smurfit Kappa reports e-commerce stimulated COVID-19 recovery, acquires Italian mill for €360M

28 Jul 2021 --- Smurfit Kappa’s half-year financial results for 2021 show an 11 percent rise in revenue compared to last year, along with an 8 percent hike in profit before income tax. The company also announced it has agreed to acquire Verzuolo, a containerboard business in Northern Italy, for €360 million (US$424 million). 

Tony Smurfit, group CEO, says the results are pleasing and show the company is recovering well from challenges raised throughout the past year, including COVID-19 disruptions.

“As a result of our past and current capital investments in our integrated business model, we have, for the most part, been able to fulfil our customers’ needs during this period of exceptionally strong demand. It has also been a period of significant input cost pressures that we have and will continue to recover through corrugated price increases.”The Verzuolo mill in the northwest of Italy.

The company’s EBITDA was €781 million (US$921 million) with an EBITDA margin of 16.7 percent. Growth in its corrugated segment was over 10 percent compared to 2020 and over 9 percent compared to 2019.

Verzuolo mill acquisition 
The Verzuolo mill is owned by the Burgo Group and situated close to the port of Savona in the northwest of Italy. The mill is a PM9 machine constructed in 2002 and converted into a 600,000 ton capacity recycled containerboard machine in 2019.

Smurfit Kappa says the acquisition comes amid efforts to bolster the company’s supply lines. 

The investment will be funded from the Group’s existing resources. It is expected that the acquisition will complete during the fourth quarter, subject to customary closing conditions, including regulatory approval.

“In addition to our announced acquisition in Italy, we were also delighted to complete the acquisition of two operations in our Americas region in Peru and Mexico. These two businesses further add to our geographic footprint, including a new market through Peru,” says Smurfit Kappa. 

“We are accelerating our investment plans to capitalize on the significant growth opportunities available to us. This growth is coming from the structural drivers of paper-based packaging, as the sustainable product of choice by consumers and customers alike, as well as the continued strong growth in e-commerce.”Smurfit Kappa is aiming for carbon neutrality before 2050.

Smurfit Kappa’s sustainability plans 
Last year, Smurfit Kappa ramped up its CO2 reduction targets significantly, aiming for a 55 percent drop in carbon emissions by 2030 and at least net-zero emissions by 2050. The Science Based Target initiative is currently validating the company’s targets in line with the UN Paris Agreement.

The new targets came following progress reported in Smurfit Kappa’s 13th annual Sustainable Development Report (SDR), which showed a 32.9 percent reduction in fossil CO2 emission intensity between 2005 and 2019.

This year, in its 14th SDR, the company reported 7 percent fossil CO2 emission cutbacks in 2020 compared to 2019, and a reduction in carbon emissions intensity by 37.3 percent compared to the 2005 baseline by the end of 2020.

Edited

By Louis Gore-Langton