AGM Statement

AGM Statement

Smurfit Kappa Group PLC

AGM Statement

SKG.I SKG.L

Dublin, 4 May, 2012 | Smurfit Kappa Group plc (‘SKG’ or the ‘Group’) one of the world’s largest integrated manufacturers of paper-based packaging products with operations in Europe and Latin America, held its Annual General Meeting (‘AGM’) in Dublin today. At the AGM, the Group’s Chairman, Liam O’Mahony, made the following remarks on the Group’s performance and prospects:

“2011 marked the second best year ever in the Group’s comparatively recent history. Significant progress was reported against almost every financial and operating measure. Your Group delivered earnings growth of 12% to just over €1 billion; substantial EPS growth; and an increase in EBITDA margin and Return on Capital Employed.

Significantly, continued operating excellence generated €394 million of free cash flow which was applied towards further net debt reduction. 2011 year end net debt of €2.75 billion and a net debt to EBITDA ratio of 2.7 times, betters the objective set, and represents ongoing progress towards our stated financial objective of debt pay down.

From our debut as a public company in March 2007, in each and every year since then, the operating environment has been variously described as ‘tough’ or ‘challenging’. Against that background the Smurfit Kappa team has successfully navigated a prolonged period of economic recession. We have continued to invest in our business, have reduced debt by over €800 million since 2007 and in 2011 delivered a financial performance only surpassed by 2007. The operating and financial disciplines for which we are known and which sustained us will remain a key focus of the Group.

On behalf of the Board, I would like to recognise the contribution and excellence of the SKG team right across the Group in delivering significant progress against all performance measures. Your Group is better placed today, than at any other point in its recent history, to both withstand any threats and capitalise on any opportunities presented by current market conditions.

Turning now to our Q1 2012 results (which were announced this morning) and to the immediate outlook. We were pleased to report essentially stable revenue and a relatively strong EBITDA outcome of €246 million. Our reported net debt to EBITDA ratio of 2.7 times is consistent with our stated objective of maintaining this ratio below 3 times through the industry cycle. Continuing cost inflation and a more positive supply environment support continued price recovery. For 2012, and subject always to macro economic volatility and normal business risk, we expect to deliver an EBITDA outcome broadly similar to that achieved in 2011. The expected outcome is ahead of current market expectations.

Reflecting this progress and these prospects, the Board is pleased to recommend a final dividend of 15 cent per share for 2011 payable on 11 May, 2012. The Board’s intention is that the interim and final dividends will be paid in October and May in each year in the approximate proportions of one third and two thirds. The Board believes that SKG now has the capital structure and cash flow characteristics to sustain a progressive dividend stream.

2011 was a period of significant progress for your Group. 2012 has started well. Our operating and financial disciplines that have served us well will continue to drive our approach to business. Continued performance and progress will expand the range of strategic and financial options to create shareholder value.”

About Smurfit Kappa Group

Smurfit Kappa Group is a world leader in paper-based packaging with operations in Europe and Latin America. Smurfit Kappa Group operates in 21 countries in Europe and is the European leader in containerboard, solidboard, corrugated and solidboard packaging and has a key position in several other packaging and paper segments. Smurfit Kappa Group also has a growing base in Eastern Europe and operates in 9 countries in Latin America where it is the only pan-regional operator.

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	Â	Â	Â	Â	Â
Bertrand Paulet						FTI Consulting
Smurfit Kappa Group
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