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Smurfit Kappa GrpPLC (SKG)

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Friday 06 May, 2016

Smurfit Kappa GrpPLC

1st Quarter Results

1st Quarter Results

Smurfit Kappa Group PLC

6 May 2016: Smurfit Kappa Group plc (‘SKG’ or ‘the Group’) today announced results for the 3 months ending 31 March 2016.

2016 First Quarter | Key Financial Performance Measures

         
€m Q1 2016 Q1 2015 Change Q4 2015 Change
Revenue €2,001 €1,962 2% €2,089 (4%)

EBITDA before Exceptional Items and Share-
based Payment(1)

€281 €266 6% €326 (14%)
EBITDA margin 14.0% 13.5% 15.6%
Operating Profit before Exceptional Items €179 €166 8% €229 (22%)
Profit before Income Tax €128 €98 31% €191 (33%)
Basic EPS (cent) 38.8 30.9 26% 52.9 (27%)
Pre-exceptional Basic EPS (cent) 38.8 44.2 (12%) 59.3 (35%)
Return on Capital Employed (2) 15.3% 15.3% 14.8%
Free Cash Flow (3)   €7   €25   (72%)   €152   (96%)
                     
Net Debt €3,029 €2,930 3% €3,048 (1%)
Net Debt to EBITDA (LTM)   2.5x   2.5x       2.6x    
 

1) EBITDA before exceptional items and share-based payment expense is denoted by EBITDA throughout the remainder
of the management commentary for ease of reference. A reconciliation of profit for the period to EBITDA before exceptional items and
share-based payment expense is set out on page 27.

2) LTM pre-exceptional operating profit plus share of associates’ profit/average capital employed.

3) Free cash flow is set out on page 9. The IFRS cash flow is set out on page 16.

 

First Quarter Key Points

  • Group corrugated packaging growth including acquisitions of 5% with solid underlying volume growth
  • Growth of 6% in pre-exceptional EBITDA with improved margin at 14%
  • Continued strong ROCE at 15.3%
  • Successful completion of two major upgrades of paper machines in the Netherlands and Spain
  • Announcement of €40 per tonne price increase in European brown kraftliner effective 15 June 2016
  • Confirmation of upgrade to Sterling Premium UK listing with retention of euro denominated Irish listing

Performance Review and Outlook

Tony Smurfit, Smurfit Kappa CEO, commented: “Solid year-on-year earnings progression in the first quarter of 2016 with 6% EBITDA growth was driven by an improved operating performance and the positive impact of acquisitions completed in 2015. Our well invested, geographically diversified and vertically integrated operations will continue to provide us with a resilient platform to drive earnings and free cash flows.

“We continue to see good levels of demand for packaging across almost all of the markets in which we operate. During the quarter, currencies had a distorting effect which on a like-for-like basis had a negative translation effect of almost €10 million on EBITDA. In addition, the rebuilds of our Roermond and Sanguesa mills adversely impacted profitability in the quarter. However, both projects will enhance our European system’s cost position and commercial offering.

“Following the completion of over €380 million of acquisitions in 2015, the Group’s focus is on the successful integration of these businesses through 2016 with the capacity for further bolt-on acquisitions. Our capital investment programme of over €450 million per annum supports our objective to deliver higher quality packaging and merchandising solutions to our global customers, while continually driving operational efficiencies through our integrated system.

“Assuming broad industry conditions prevail, we expect good earnings growth in 2016.”

Stock Exchange Listing Arrangements

Following the commencement of Sterling trading on the London Stock Exchange on 1 March, the Group was formally confirmed by the UK Listing Authority as a Premium listed company on 25 April 2016. On the same date the Group’s Irish listing was switched to a secondary listing, but its participation in all of its existing euro indices were maintained.

On 28 April the FTSE Nationality Advisory Committee confirmed SKG’s allocation to the UK classification for the purposes of the UK Index Series. Inclusion in the UK Index Series of the FTSE Indices is now conditional on SKG meeting the 20 business day liquidity tests contained in the FTSE Ground Rules in the period prior to 1 June 2016.

Capital Markets Day

The Group will hold a Capital Markets Day in the London Stock Exchange on the morning of 3 June 2016. The event will provide attendees with an overview of the Group alongside a review of current key business initiatives and operational drivers. The event will also be attended by other key members of SKG’s executive and operational management teams across Europe and the Americas.

About Smurfit Kappa

Smurfit Kappa is one of the leading providers of paper-based packaging solutions in the world, with around 45,000 employees in over 370 production sites across 34 countries and with revenue of €8.1 billion in 2015. We are located in 21 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

Seamus Murphy

Smurfit Kappa

T: +353 1 202 71 80

E: [email protected]

 

 

FTI Consulting

 

T: +353 1 663 36 80

E: [email protected]

2016 First Quarter | Performance Overview

In the quarter, the Group delivered a 6% increase in EBITDA and an 8% increase in pre-exceptional operating profit year-on-year. The Group also reported ROCE of 15.3% and its third consecutive first quarter of positive free cash flow reflecting its consistent focus on capital management and the benefit of incremental earnings from its programme of capital investment.

In Europe, the Group’s corrugated packaging operations reported a solid quarter with a 2% year-on-year increase in underlying box volumes when adjusted for days, and sequentially flat corrugated pricing in local currency terms. Good demand growth and increased pricing for Old Corrugated Containers (‘OCC’) is expected to provide a support to containerboard and corrugated pricing for the remainder of the year.

In the first quarter of 2016, OCC prices were 13% higher year-on-year reflecting robust levels of global demand. Chinese imports of OCC remain a solid underpin to demand with a 6% year-on-year increase in January following a year in which the country grew their OCC imports by 7%. However, incremental European demand will be the more important driver of increasing tightness in the grade in coming years, particularly in markets already short of fibre such as Germany and the Netherlands.

In recycled containerboard, the market has remained relatively stable through the first quarter despite higher inventory levels year-on-year, which are now returning to more balanced levels. The Group is the largest producer of recycled containerboard in Europe with approximately three million tonnes of production per annum, but remains a net buyer of approximately 700,000 tonnes per annum for its market facing corrugated operations. Through a series of completed and on-going capital investment projects, SKG’s focus is to ensure its containerboard network remains the most efficient, lowest cost system in Europe.

Following a period of supply driven pricing pressure in the year to April, the Group announced a €40 per tonne price increase for its European brown kraftliner grades effective 15 June 2016. Market demand for the grade remains strong and this is expected to support the price increase through the seasonally tighter summer months. SKG’s 1.6 million tonnes of kraftliner production per annum is a distinct competitive advantage for the Group in providing corrugated customers with a complete product offering, while maintaining a net long position of 500,000 tonnes per annum in the grade.

In the Americas, the Group’s operations delivered a strong result in the first quarter with corrugated volume growth of 26% and a recovery in EBITDA margin to 17%. Adjusting for acquisitions and Venezuela, volume growth in the first quarter was over 3% year-on-year. Within this, Mexico has maintained its strong growth rate from the fourth quarter, with corrugated shipments 6% higher year-on-year in the first quarter. The US business is showing structural improvement and the integration of multiple acquisitions is progressing well. Other markets such as Colombia and Argentina are performing well in volume and EBITDA margin terms, while the Group’s new operations in Brazil are outperforming the market with 4% volume growth year-on-year.

The delivery of a positive free cash flow result despite a working capital outflow and substantially increased capital expenditure illustrates the significantly strengthened position of the Group today. The Group’s leverage, at 2.5 times net debt to EBITDA is expected to continue to reduce as EBITDA from acquisitions incrementally contribute over the course of the year and the Group continues to generate strong free cash flows.

2016 First Quarter | Financial Performance

Revenue in the first quarter of €2,001 million was 2% up on the €1,962 reported in 2015. However, with the contribution from net acquisitions more than offset by negative currency movements in the quarter, the underlying increase was over 3%.

EBITDA increased by 6% in the first quarter, from €266 million in 2015 to €281 million in 2016, with an underlying move of 6% as the negative impact of currencies was offset by the positive impact of net acquisitions. During the quarter, the Group’s EBITDA was also impacted by approximately €5 million as a result of two major mill projects, the rebuild of a 260,000 tonne machine in Roermond, the Netherlands and the conversion of a 65,000 tonne virgin machine in Sanguesa, Spain to Machine Glazed (‘MG’) paper. These projects were completed by the end of March.

There were no exceptional items in the first quarter of 2016. However, exceptional items charged within operating profit in the first quarter of 2015 amounted to €39 million. The charge represented the further impairment of the solidboard operations held for sale of €6 million reported within cost of sales, and €33 million, reported within other operating expenses, relating to the higher cost to the Venezuelan operations of discharging their non-Bolivar denominated payables following the adoption of the Simadi rate in March 2015.

Basic EPS for the first quarter at 38.8 cent was 26% higher than the 30.9 cent earned in the same period of 2015. On a pre-exceptional basis, EPS for the first quarter was 12% lower year-on-year at 38.8 cent compared to 44.2 cent in 2015.

2016 First Quarter | Free Cash Flow

In the first quarter of 2016, the Group reported a free cash inflow of €7 million, compared to an inflow of €25 million in the first quarter of 2015. Although the Group reported higher EBITDA year-on-year, the decrease was primarily a result of an €81 million increase in outflows for working capital and capital expenditure. Exceptional items of €33 million in 2015, predominantly associated with the Venezuelan exchange rate change, did not reoccur.

Capital expenditure of €107 million in the first quarter of 2016 equated to 111% of depreciation, compared to 82% (€73 million) in the first quarter of 2015. On a full year basis capital expenditure is expected to be broadly in line with 2015 levels.

The working capital outflow in the quarter was €98 million, compared to €51 million in 2015. At the end of March, working capital amounted to €628 million and represented 7.9% of sales, compared to 6.6% at the end of December and 7.1% at March 2015. Working capital levels remain an important priority for the Group and have been substantially reduced in recent years through consistent monitoring and review.

Cash interest at €36 million in the quarter was €6 million higher than the same period of 2015. This increase is due to the cost of financing our Brazilian acquisitions in December 2015, part of which was funded in local currency where interest rates are relatively high. On a full year basis, cash interest is expected to increase by approximately €19 million to €142 million.

Tax payments in the first quarter of €28 million were €9 million lower than the same period of 2015. This was primarily due to the timing of payments and some country specific reductions. The cash tax payments continue to reflect the ongoing benefit of historic tax losses and tax credits in Europe.

2016 First Quarter | Capital Structure

In recent years the Group’s capital structure has been transformed from that of a secured high yield company to an unsecured strong cross over credit. This was achieved as a result of the Group’s consistent capacity to generate quality earnings and strong free cash flows together with active management of its debt portfolio. The strength of the Group’s capital base together with consistent delivery of strong free cash flows provides a solid and cost effective support to the Group’s growth agenda over the medium term.

At 31 March 2016 the Group’s average interest rate was 4.1%, slightly higher year-on-year as a result of the introduction of local currency Brazilian debt associated with the acquisitions of INPA and Paema in December 2015. The Group’s diversified funding base and long dated maturity profile (4.4 years) provide a stable funding outlook. In terms of liquidity, the Group held cash on balance sheet of €361 million at the end of the quarter which was further supplemented by undrawn credit facilities of approximately €612 million.

2016 First Quarter | Operating Efficiency

Commercial Offering and Innovation

As part of its ongoing differentiation initiative, Smurfit Kappa has continued to advance its communication and reputation among new audiences across multiple channels. The Group recently embarked on a number of targeted marketing campaigns showcasing the company’s industry-leading sustainability credentials and building awareness of its unique ShelfSmart process, particularly within the fast moving consumer goods (‘FMCG’) sector. The Group’s marketing and communications activity has developed on a number of fronts, resulting in a strong brand presence highlighting expertise, and some firsts in the area of marketing. This has been underpinned by ongoing recognition of the company’s innovation, expertise and leadership by customers and trade groups.

Smurfit Kappa has continued to gain recognition for its innovative packaging design and collaboration with valued customers with a number of industry awards in the first quarter. At the European Flexographic Industry Association (‘EFIA’) Awards, Smurfit Kappa won 13 times, more than any other entrant, for its best in class print capabilities. The Group’s innovative designs also won ‘Best Transport Packaging Solution’ at the NL Packaging Awards 2016, and received two further awards at the Art of Packaging Awards in Poland. Most importantly, Smurfit Kappa’s customers have recognised the Group for its collaborative approach. In the first quarter, the Group was awarded ‘Continuous Improvement Supplier of the Year 2015’ by Philips Lighting, and the award for ‘Outstanding Service’ by Nestlé UK and Ireland.

Combining its unique range of expertise in design, mechanisation, performance-packaging and brand impact using ShelfSmart, Smurfit Kappa has recently launched the next generation Mandrel Packaging Machine, which provides customers with the most effective and optimised packaging machine solution to date. Smurfit Kappa supplies approximately 200 machines per year to the Group’s customers and has built up an installed base of approximately 8,000 machines within its customer network. The Group offers a wide portfolio of end of line packaging machines, such as tray erectors, case erectors, wrap around machines and custom-built packing lines and strongly believes packaging and machinery must work seamlessly together to maximise efficiency and deliver the lowest total packing cost.

Sustainability

The Group will publish its ninth Sustainable Development Report in June 2016, which will give a comprehensive review of how the Group relentlessly seeks to positively impact each of its stakeholders. In addition to its continuous work in implementing environmentally sustainable work practices and circular economies, the Group continues to invest in the local communities in which we have the privilege to operate.

Cost Take-out Programme

In recognition of the requirement to continuously drive cost efficiencies to offset inflationary pressures, the Group has had a formal cost take-out programme in place each year since 2008. The programme has consistently provided a solid support to maintaining operating efficiency despite steady increases in both direct and indirect costs.

The Group announced a cost take-out target of €75 million for the full year 2016 and expects to deliver on this commitment with €15 million achieved in the first quarter.

Enhanced Capital Expenditure Programme

The Group is in the third and final year of its three-year programme of ‘Quick Win’ capital expenditure, with an estimated cash outflow of €73 million in relation to these projects expected to completion. As previously guided, EBITDA benefits are expected to lag expenditure with a €25 million EBITDA uplift in 2016 and a further €33 million benefit in 2017 to complete the €75 million of incremental EBITDA derived from the programme. As part of its full year 2015 results the Group confirmed €17 million of the Group’s 2015 EBITDA was associated with the programme to date.

2016 First Quarter | Regional Performance Reviews

Europe

The Group’s European operations delivered a improved performance year-on-year with an EBITDA margin of 13.7% compared to 13.1% in 2015. Despite some pressure from adverse movements in containerboard pricing in the first quarter, the business is well positioned into the remainder of the year with an improved operating outlook, good demand levels and stable end market corrugated prices.

Overall corrugated packaging volumes, adjusted for days and acquisitions showed year-on-year progress, with a 1% increase on the same period of 2015. Within this box volumes increased by 2% while the more commodity corrugated sheet volumes declined by 4%. Pricing for corrugated sheets came under pressure during the quarter, prompting the Group to relinquish some volume in its focus on price over volume across its markets. Box volumes continue to make up approximately 88% of the Group’s European volumes.

Following a recycled containerboard price increase in the summer of 2015, the Group expected to raise its European corrugated prices by up to 2% by the end of March 2016. Having achieved a price increase of over 1% in the fourth quarter of 2015, further increases were implemented in some of our major countries. However, the average price has remained sequentially flat in the first quarter of 2016 when adjusted for the impact of currency, as a result of some weaker pricing in peripheral markets. Good demand through the supply chain and a more stable market backdrop following Easter is expected to provide support to corrugated prices at this level.

Prices for European OCC rose steadily through the first half of 2015, and have been sustained at this higher level as a result of strong domestic and export demand. As a result, in the first quarter higher OCC costs were a headwind for the Group due to an incremental year-on-year cost of €15 per tonne on SKG’s more than four million tonne per annum European consumption. However, over the longer term higher OCC prices are viewed as a structural support for testliner prices.

The Group’s European recycled containerboard system is the largest in Europe with an annual production of approximately three million tonnes. In the first quarter, the Group slightly increased its production despite the rebuild of its 260,000 tonne Roermond machine and the conversion of its 65,000 tonne Sanguesa machine to MG paper. This was primarily achieved by the improving performance of the Group’s Townsend Hook machine in the UK. Nonetheless the Group remains approximately 700,000 tonnes short of recycled which it buys on the market.

While the European kraftliner market has experienced some price pressure to April, continued good levels of demand and tightening market conditions are expected to support a price increase in the grade over the summer months. The Group has announced a €40 per tonne price increase effective 15 June 2016 which, when implemented, will have a positive impact on the Group’s 500,000 tonne net long position.

The Americas

The Americas segment delivered a good EBITDA performance, up almost 21% year-on-year despite significant currency headwinds. This result was underpinned by a number of acquisitions in 2015 and good operational performances across the region. With EBITDA margins in the region at 17% in the first quarter and organic volumes up over 3% year-on-year excluding Venezuela, the business is well positioned to drive continued earnings growth. As the largest pan-regional supplier, the Group has begun to leverage its scale in the region with its multinational customers through its new Pan American Sales operation, which grew by almost 4% in the quarter when compared to the same period in 2015.

Following a strong second half of 2015, the Mexican economy has continued to grow well in the first quarter of 2016 supporting a 6% increase in the Group’s corrugated packaging volumes year-on-year. This was particularly strong in the more domestically focused southern and central operations. Although currency headwinds did impact earnings in the first quarter, the Peso strengthened through April indicating a more favourable outcome for the full year 2016. The Group’s 100,000 tonne recycled containerboard project in Mexico City remains on track with a start-up expected in February 2017.

The Group’s renamed Smurfit Kappa North American business delivered a solid underlying performance while integrating three corrugated packaging businesses acquired in the quarter. Although reference containerboard prices decreased somewhat in the period, the Group’s continued focus on quality, service and cost containment has limited the effect on profitability. The region remains a key growth market for the Group.

In Colombia, SKG’s volumes grew by 2% in the quarter. Similar to the Mexican market, the currency backdrop in the country was volatile through the first quarter but appears to have stabilised into April. The EBITDA margin in the country has been supported at a stable level by the continued implementation of higher corrugated prices to offset currency movements, along with the consistent application of effective cost take-out measures. The Group’s integration of the CYBSA business in Central America, which was acquired in May 2015, is going to plan, and the Group’s restructured Dominican Republic business is performing well.

As expected, the political transition and subsequent currency depreciation in Argentina has improved the business environment in the country. The Group’s business is growing in the country with a 2% increase in volumes and price increases to offset currency and inflationary pressures. This positive business progression, coupled with continued cost base optimisation has facilitated an improvement in EBITDA margin in the quarter. The initial steps to integrate the Group’s Brazilian business, acquired at the end of December 2015, are going to plan. While the market is expected to remain difficult through 2016, the Group’s business grew well ahead of the market with an almost 4% increase in volumes in the quarter.

In Venezuela, the economic environment has worsened considerably in the quarter with a reported 8% contraction in GDP. In 2015, the Group adopted the Simadi rate of exchange, subsequently replaced by the DICOM rate as of 10 March 2016, thereby reducing Venezuela EBITDA to between 1% and 2% of the Group. Going forward, the Group remains committed to its operations and its people in the country and the business continues to be run to the highest operating standards.

The Group has operated in the Americas since the mid 1980’s, developing an experienced local management team and a well invested asset base. This business today provides the Group with valuable diversification of its end market exposure, with access to higher growth and higher margin markets. While the developing markets tend to be more volatile environments than Europe or the US, the breadth of the Group’s business in the region and the increasing internationalisation of its customer base provides a resilient base from which the Group has proven itself capable of driving superior returns over the longer term.

Summary Cash Flow

Summary cash flows(1) for the first quarter are set out in the following table.

         
3 months to 3 months to
31-Mar-16 31-Mar-15
          €m   €m
EBITDA 281 266
Exceptional items - (33)
Cash interest expense (36) (30)
Working capital change (98) (51)
Current provisions (4) (5)
Capital expenditure (107) (73)
Change in capital creditors 8 1
Tax paid (28) (37)
Sale of fixed assets - 1
Other (9)   (14)
Free cash flow 7 25
 
Share issues - 1
Purchase of own shares (net) (10) (15)
Purchase of businesses and investments (31)   -
Net cash (outflow)/inflow (34) 11
 
Deferred debt issue costs amortised (2) (4)
Currency translation adjustments 55   (178)
Decrease/(increase) in net debt 19   (171)

(1) The summary cash flow is prepared on a different basis to the Condensed Consolidated Statement of Cash Flows under IFRS
(‘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 below. 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.

 
              3 months to     3 months to
31-Mar-16 31-Mar-15
                  €m     €m
Free cash flow 7 25
 
Add back: Cash interest 36 30
Capital expenditure (net of change in capital creditors) 99 72
Tax payments 28 37
 
Less: Sale of fixed assets - (1)
Profit on sale of assets and businesses – non exceptional (2) -
Receipt of capital grants (in ‘Other’ per summary cash flow) (2) -
Non-cash financing activities (1)     (3)
Cash generated from operations 165     160
 

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 31 March 2016, Smurfit Kappa Treasury Funding Limited had outstanding US$292.3 million 7.50% senior debentures due 2025. The Group had outstanding €161.4 million and STG£58.9 million variable funding notes issued under the €240 million accounts receivable securitisation programme maturing in June 2019, together with €175 million variable funding notes issued under the €175 million accounts receivable securitisation programme maturing in April 2018.

Smurfit Kappa Acquisitions had outstanding €200 million 5.125% senior notes due 2018, US$300 million 4.875% senior notes due 2018, €400 million 4.125% senior notes due 2020, €250 million senior floating rate notes due 2020, €500 million 3.25% senior notes due 2021 and €250 million 2.75% senior notes due 2025. Smurfit Kappa Acquisitions and certain subsidiaries are also party to a senior credit facility. At 31 March 2016, the Group’s senior credit facility comprised term drawings of €572.6 million, US$55.2 million and STG£100 million under the amortising Term A facility maturing in 2020. In addition, as at 31 March 2016, the facility included a €625 million revolving credit facility of which €6 million was drawn in revolver loans, with a further €7 million in operational facilities including letters of credit drawn under various ancillary facilities.

The following table provides the range of interest rates at 31 March 2016 for each of the drawings under the various senior credit facility loans.

Borrowing arrangement

   

Currency

   

Interest Rate

 
Term A Facility EUR

1.270% - 1.468%

USD

2.033%

GBP 2.108%
Revolving Credit Facility EUR 1.049%

Borrowings under the revolving credit facility are available to fund the Group's working capital requirements, capital expenditures and other general corporate purposes.

Following acquisitions of over €380 million in 2015, including the Brazilian acquisitions in December, the Group increased the Term Loan under its Senior Credit Facility by €250 million, from €500 million to €750 million on 5 February 2016. The terms applicable to the increase, including margin, amortisation profile and maturity date are the same as the existing Term A loan. The proceeds were substantially applied to reduce the drawings under the revolving credit facility, thereby further improving the Group’s liquidity.

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 31 March 2016, the Group had fixed an average of 66% of its interest cost on borrowings over the following twelve months.

The Group’s fixed rate debt comprised €200 million 5.125% senior notes due 2018, US$300 million 4.875% senior notes due 2018 (US$50 million swapped to floating), €400 million 4.125% senior notes due 2020, €500 million 3.25% senior notes due 2021, €250 million 2.75% senior notes due 2025 and US$292.3 million 7.50% senior debentures due 2025. In addition the Group had €349 million in interest rate swaps with maturity dates ranging from October 2018 to January 2021.

Market Risk and Risk Management Policies (continued)

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 increase by one percent, the Group’s interest expense would increase, and income before taxes would decrease, by approximately €13 million over the following twelve months. Interest income on the Group’s cash balances would increase by approximately €4 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.

Condensed Consolidated Income Statement – First Quarter

   
3 months to 31-Mar-16 3 months to 31-Mar-15
Unaudited Unaudited

Pre-
exceptional
2016

 

Exceptional
2016

 

Total
2016

Pre-
exceptional
2015

 

Exceptional
2015

 

Total
2015

    €m   €m   €m   €m   €m   €m
Revenue 2,001 - 2,001 1,962 - 1,962
Cost of sales (1,411)   -   (1,411)   (1,381)   (6)   (1,387)
Gross profit 590 - 590 581 (6) 575
Distribution costs (154) - (154) (159) - (159)
Administrative expenses (258) - (258) (256) - (256)
Other operating income 1 - 1 - - -
Other operating expenses -   -   -   -   (33)   (33)
Operating profit 179 - 179 166 (39) 127
Finance costs (61) - (61) (52) (2) (54)
Finance income 10   -   10   15   10   25
Profit before income tax 128   - 128 129   (31) 98
Income tax expense (38) (29)
Profit for the financial period 90 69
 
Attributable to:
Owners of the parent 90 71
Non-controlling interests - (2)
Profit for the financial period 90 69
 

Earnings per share

Basic earnings per share - cent

38.8

30.9

Diluted earnings per share - cent

38.4

30.4

 

Condensed Consolidated Statement of Comprehensive Income – First Quarter

       
3 months to
31-Mar-16
Unaudited
€m
3 months to
31-Mar-15
Unaudited
€m
 
Profit for the financial period 90     69
 
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss
Foreign currency translation adjustments: (64) (342)
- Arising in the period
 
Effective portion of changes in fair value of cash flow hedges:
- Movement out of reserve 2 4
- New fair value adjustments into reserve (2) 3
 
Net change in fair value of available-for-sale financial assets -     1
(64) (334)
 
Items which will not be subsequently reclassified to profit or loss
Defined benefit pension plans:
- Actuarial loss (57) (32)
- Movement in deferred tax 7     4
(50) (28)
       
Total other comprehensive expense (114)     (362)
 
Total comprehensive expense for the financial period (24)     (293)
 
Attributable to:
Owners of the parent (20) (252)
Non-controlling interests (4)     (41)
Total comprehensive expense for the financial period (24)     (293)
 

Condensed Consolidated Balance Sheet

         
31-Mar-16 31-Mar-15 31-Dec-15
Unaudited Unaudited Audited
        €m   €m   €m
ASSETS
Non-current assets
Property, plant and equipment 3,085 2,910 3,103
Goodwill and intangible assets 2,484 2,343 2,508
Available-for-sale financial assets 21 21 21
Investment in associates 17 18 17
Biological assets 95 97 98
Trade and other receivables 36 14 34
Derivative financial instruments 23 48 34
Deferred income tax assets 188   238   200
5,949   5,689   6,015
Current assets
Inventories 732 682 735
Biological assets 8 8 8
Trade and other receivables 1,527 1,501 1,451
Derivative financial instruments 12 5 28
Restricted cash 8 8 5
Cash and cash equivalents 353   282   270
2,640 2,486 2,497
Assets classified as held for sale -   94   -
2,640   2,580   2,497
Total assets 8,589   8,269   8,512
 
EQUITY
Capital and reserves attributable to the owners of the parent
Equity share capital - - -
Share premium 1,983 1,982 1,983
Other reserves (490) (329) (425)
Retained earnings 668   318   619
Total equity attributable to the owners of the parent 2,161 1,971 2,177
Non-controlling interests 149   157   151
Total equity 2,310   2,128   2,328
 
LIABILITIES
Non-current liabilities
Borrowings 3,300 3,149 3,238
Employee benefits 856 912 818
Derivative financial instruments 18 18 15
Deferred income tax liabilities 152 139 179
Non-current income tax liabilities 27 18 25
Provisions for liabilities and charges 56 47 52
Capital grants 14 12 13
Other payables 11   6   13
4,434   4,301   4,353
Current liabilities
Borrowings 90 71 85
Trade and other payables 1,667 1,638 1,672
Current income tax liabilities 48 18 30
Derivative financial instruments 11 13 10
Provisions for liabilities and charges 29   53   34
1,845 1,793 1,831
Liabilities associated with assets classified as held for sale -   47   -
1,845   1,840   1,831
Total liabilities 6,279   6,141   6,184
Total equity and liabilities 8,589   8,269   8,512
 

Condensed Consolidated Statement of Changes in Equity

       
Attributable to owners of the parent

Equity
share
capital
€m

 

Share
premium
€m

 

Other
reserves
€m

 

Retained
earnings
€m

 

Total
€m

 

Non-
controlling

interests

€m

 

Total
equity
€m

Unaudited        
At 1 January 2016 - 1,983 (425) 619 2,177 151 2,328
 
Profit for the financial period - - - 90 90 - 90
Other comprehensive income

Foreign currency translation
adjustments

- - (60) - (60) (4) (64)
Defined benefit pension plans -   -   -   (50)   (50)   -   (50)

Total comprehensive
(expense)/income for the
financial period

-   -   (60)   40   (20)   (4)   (24)
 
Hyperinflation adjustment - - - 9 9 2 11
Share-based payment - - 5 - 5 - 5

Shares acquired by SKG Employee
Trust

-   -   (10)   -   (10)   -   (10)
At 31 March 2016 -   1,983   (490)   668   2,161   149   2,310
 
Unaudited
At 1 January 2015 - 1,981 (30) 271 2,222 197 2,419
 
Profit for the financial period - - - 71 71 (2) 69
Other comprehensive income

Foreign currency translation
adjustments

- - (303) - (303) (39) (342)
Defined benefit pension plans - - - (28) (28) - (28)

Effective portion of changes in fair
value of cash flow hedges

- - 7 - 7 - 7

Net changes in fair value of
available-for-sale financial assets

-   -   1   -   1   -   1

Total comprehensive
(expense)/income for the
financial period

-   -   (295)   43   (252)   (41)   (293)
 
Shares issued - 1 - - 1 - 1
Hyperinflation adjustment - - - 4 4 1 5
Share-based payment - - 11 - 11 - 11

Shares acquired by SKG Employee
Trust

-   -   (15)   -   (15)   -   (15)
At 31 March 2015 -   1,982   (329)   318   1,971   157   2,128
 

An analysis of the movements in Other reserves is provided in Note 13.

Condensed Consolidated Statement of Cash Flows

       
3 months to
31-Mar-16
Unaudited
€m
3 months to
31-Mar-15
Unaudited
€m
Cash flows from operating activities
Profit before income tax 128 98
 
Net finance costs 51 29
Depreciation charge 87 79
Impairment of assets - 6
Amortisation of intangible assets 8 8
Amortisation of capital grants (1) -
Equity settled share-based payment expense 5 11
Profit on sale of assets and businesses (2) -
Net movement in working capital (99) (54)
Change in biological assets 2 2
Change in employee benefits and other provisions (15) (21)
Other 1     2
Cash generated from operations 165 160
Interest paid (37) (34)
Income taxes paid:
Overseas corporation tax (net of tax refunds) paid (28)     (37)
Net cash inflow from operating activities 100     89
 
Cash flows from investing activities
Interest received 1 1
Additions to property, plant and equipment and biological assets (97) (70)
Additions to intangible assets (2) (2)
Receipt of capital grants 2 -
Increase in restricted cash (3) (1)
Disposal of property, plant and equipment 2 2
Purchase of subsidiaries and non-controlling interests (30) -
Deferred consideration paid (1)     -
Net cash outflow from investing activities (128)     (70)
 
Cash flows from financing activities
Proceeds from issue of new ordinary shares - 1
Proceeds from bond issue - 250
Proceeds from other debt issues 250 -
Purchase of own shares (net) (10) (15)
Increase in other interest-bearing borrowings 10 -
Payment of finance leases (1) (1)
Repayment of borrowings (170) (253)
Deferred debt issue costs paid (1)     (6)
Net cash inflow/(outflow) from financing activities 78     (24)
Increase/(decrease) in cash and cash equivalents 50     (5)
 
Reconciliation of opening to closing cash and cash equivalents
Cash and cash equivalents at 1 January 263 361
Currency translation adjustment 25 (96)
Increase/(decrease) in cash and cash equivalents 50     (5)
Cash and cash equivalents at 31 March 338     260
 

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 tax resident in Ireland. The address of its registered office is Beech Hill, Clonskeagh, Dublin 4, D04 N2R2, Ireland.

2. Basis of Preparation and Accounting Policies

The consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards (‘IFRS’) issued by the International Accounting Standards Board (‘IASB’) as adopted by the European Union (‘EU’); and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. The financial information presented in this report has not been prepared in accordance with International Accounting Standard 34 – ‘Interim Financial Reporting’ (‘IAS 34’).

The financial information presented in this report has been prepared in accordance with the Group’s accounting policies. Full details of the accounting policies adopted by the Group are contained in the financial statements included in the Group’s annual report for the year ended 31 December 2015 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 2015. There are no new IFRS standards effective from 1 January 2016 which have a material effect on the condensed consolidated interim financial information included in this report.

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. Certain tables in this interim statement may not add precisely due to rounding.

The condensed consolidated interim financial statements presented do not constitute full statutory accounts. Full statutory accounts for the year ended 31 December 2015 will be filed with the Irish Registrar of Companies in due course. The audit report on those statutory accounts was unqualified.

3. Segmental 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 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 earnings before interest, tax, depreciation, amortisation, exceptional items and share-based payment expense (‘EBITDA before exceptional items’).

         
3 months to 31-Mar-16 3 months to 31-Mar-15
       

Europe
€m

 

The
Americas

€m

 

Total
€m

   

Europe
€m

 

The
Americas

€m

  Total
€m
Revenue and results        
Revenue 1,520   481   2,001     1,545   417   1,962
 
EBITDA before exceptional items 209 82 291 202 68 270
Segment exceptional items -   -   -   -   (33)   (33)
EBITDA after exceptional items 209   82 291 202   35 237
 
Unallocated centre costs (10) (4)
Share-based payment expense (5) (11)
Depreciation and depletion (net) (89) (81)
Amortisation (8) (8)
Impairment of assets - (6)
Finance costs (61) (54)
Finance income 10 25
Profit before income tax 128 98
Income tax expense (38) (29)
Profit for the financial period 90 69
 

4. Exceptional Items

       
The following items are regarded as exceptional in nature: 3 months to
31-Mar-16
€m
3 months to
31-Mar-15
€m
 
Impairment of assets - 6
Currency trading loss on change in Venezuelan translation rate -     33
Exceptional items included in operating profit -     39
 
Exceptional finance costs - 2
Exceptional finance income -     (10)
Exceptional items included in net finance costs -     (8)
 

There were no exceptional items in the first quarter of 2016.

Exceptional items charged within operating profit in the first quarter of 2015 amounted to €39 million of which €6 million related to an impairment of plant and equipment in the solidboard operations held for sale. The remaining charge of €33 million related to losses on the translation of non-Bolivar denominated payables following the Group's decision to translate its Venezuelan operations at the Simadi rate. The translation loss reflected the higher cost to its Venezuelan operations of discharging these payables.

Exceptional finance costs of €2 million in the first quarter of 2015 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 February's €250 million bond issue.

Exceptional finance income in the first quarter of 2015 comprised a gain of €10 million in Venezuela on the retranslation of the US dollar denominated intra-group loans at the Simadi rate.

5. Finance Costs and Income

       
      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
Finance costs:
Interest payable on bank loans and overdrafts 12 9
Interest payable on other borrowings 27 24
Exceptional finance costs associated with debt restructuring - 2
Foreign currency translation loss on debt 7 11
Fair value loss on derivatives not designated as hedges 6 1
Net interest cost on net pension liability 6 5
Net monetary loss - hyperinflation 3     2
Total finance costs 61     54
 
Finance income:
Other interest receivable (1) (1)
Foreign currency translation gain on debt (8) (2)
Exceptional foreign currency translation gain - (10)
Fair value gain on derivatives not designated as hedges (1)     (12)
Total finance income (10)     (25)
Net finance costs 51     29
 

6. Income Tax Expense

Income tax expense recognised in the Condensed Consolidated Income Statement

       
      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
Current tax:
Europe 28 13
The Americas 18     15
46 28
Deferred tax (8)     1
Income tax expense 38     29
 
Current tax is analysed as follows:
Ireland 3 (3)
Foreign 43     31
46     28
 

Income tax recognised in the Condensed Consolidated Statement of Comprehensive Income

      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
Arising on actuarial loss on defined benefit plans     (7)     (4)

The tax expense in 2016 is €9 million higher than in the comparable period due to increased taxable earnings. The income tax expense is higher by €8 million in Europe and €1 million in the Americas. The €9 million movement in deferred tax primarily arises in Europe from the reversal of timing differences.

There is no income tax expense or credit associated with exceptional items in 2016 and 2015.

7. Employee Benefits – Defined Benefit Plans

The table below sets out the components of the defined benefit cost for the period:

       
      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
 
Current service cost 10 12
Gain on settlement (2) (2)
Net interest cost on net pension liability 6     5
Defined benefit cost 14     15
 

Included in cost of sales, distribution costs and administrative expenses is a defined benefit cost of €8 million (2015: €10 million). Net interest cost on net pension liability of €6 million (2015: €5 million) is included in finance costs in the Condensed Consolidated Income Statement.

The amounts recognised in the Condensed Consolidated Balance Sheet were as follows:

       
      31-Mar-16
€m
    31-Dec-15
€m
Present value of funded or partially funded obligations (2,219) (2,195)
Fair value of plan assets 1,895     1,884
Deficit in funded or partially funded plans (324) (311)
Present value of wholly unfunded obligations (532)     (507)
Net pension liability (856)     (818)
 

The employee benefits provision has increased from €818 million at 31 December 2015 to €856 million at 31 March 2016, mainly as a result of lower eurozone and Sterling corporate bond yields which decreased the discount rates in the eurozone and Sterling area.

.

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.

       
      3 months to
31-Mar-16
    3 months to
31-Mar-15
Profit attributable to owners of the parent (€ million) 90 71
 
Weighted average number of ordinary shares in issue (million) 234 230
 
Basic earnings per share (cent) 38.8     30.9
 

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 which comprise convertible shares issued under the 2007 Share Incentive Plan and deferred shares held in trust under the Deferred Annual Bonus Plan.

       
      3 months to
31-Mar-16
    3 months to
31-Mar-15
Profit attributable to owners of the parent (€ million) 90 71
 
Weighted average number of ordinary shares in issue (million) 234 230
Potential dilutive ordinary shares assumed (million) 2     4
Diluted weighted average ordinary shares (million) 236     234
 
Diluted earnings per share (cent) 38.4     30.4
 

Pre-exceptional

       
      3 months to
31-Mar-16
    3 months to
31-Mar-15
Profit attributable to owners of the parent (€ million) 90 71
Exceptional items included in profit (Note 4) (€ million) -     31
Pre-exceptional profit attributable to owners of the parent (€ million) 90     102
 
Weighted average number of ordinary shares in issue (million) 234 230
 
Pre-exceptional basic earnings per share (cent) 38.8     44.2
 
Diluted weighted average ordinary shares (million) 236 234
 
Pre-exceptional diluted earnings per share (cent) 38.4     43.5
 

9. Dividends

The Board has recommended a final dividend of 48 cent per share for 2015 payable on 13 May 2016 subject to the approval of the shareholders at the AGM.

10. Property, Plant and Equipment

           
     

Land and
buildings
€m

   

Plant and
equipment
€m

    Total
€m
Three months ended 31 March 2016
Opening net book amount 988 2,115 3,103
Reclassifications 8 (8) -
Additions - 102 102
Acquisitions - 20 20
Depreciation charge (11) (76) (87)
Hyperinflation adjustment 2 2 4
Foreign currency translation adjustment (16)     (41)     (57)
At 31 March 2016 971     2,114     3,085
 

Year ended 31 December 2015

Opening net book amount

1,079

1,954

3,033

Reclassifications

19

(21)

(2)

Additions

7

421

428

Acquisitions

46

116

162

Depreciation charge

(47)

(291)

(338)

Retirements and disposals

(18)

(2)

(20)

Hyperinflation adjustment

17

13

30

Foreign currency translation adjustment

(115)

   

(75)

   

(190)

At 31 December 2015

988

   

2,115

   

3,103

 

11. Net Movement in Working Capital

       
      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
 
Change in inventories (10) (26)
Change in trade and other receivables (98) (123)
Change in trade and other payables 9     95
Net movement in working capital (99)     (54)
 

12. Analysis of Net Debt

      31-Mar-16
€m
    31-Dec-15
€m
Senior credit facility:        
Revolving credit facility(1) – interest at relevant interbank rate + 1.35%(5) - 149
Facility A term loan(2) – interest at relevant interbank rate + 1.60%(5) 741 494
U US$292.3 million 7.50% senior debentures due 2025 (including accrued interest) 263 270
Bank loans and overdrafts 117 124
Cash (361) (275)
2018 receivables securitisation variable funding notes 174 174
2019 receivables securitisation variable funding notes 234 232
2018 senior notes (including accrued interest)(3) 460 477
€400 million 4.125% senior notes due 2020 (including accrued interest) 399 403
€250 million senior floating rate notes due 2020 (including accrued interest)(4) 249 249
€500 million 3.25% senior notes due 2021 (including accrued interest) 499 495
€250 million 2.75% senior notes due 2025 (including accrued interest) 247     248
Net debt before finance leases 3,022 3,040
Finance leases 7     8
Net debt including leases 3,029     3,048
 
(1)  

Revolving credit facility ('RCF') of €625 million (available under the senior credit facility) to be repaid in 2020
(a) Revolver loans - €6 million, (b) drawn under ancillary facilities and facilities supported by letters of credit – nil
and (c) other operational facilities including letters of credit - €7 million.

 

 

(2)

Facility A term loan (‘Facility A’) due to be repaid in certain instalments from 2018 to 2020. In February 2016,
the Group increased Facility A by €250 million. The proceeds were substantially applied to reduce the Group’s
drawings under the RCF.

 
(3) €200 million 5.125% senior notes due 2018 and US$300 million 4.875% senior notes due 2018.
 
(4) Interest at EURIBOR + 3.5%.
 
(5) The margins applicable under the senior credit facility are determined as follows:
Net debt/EBITDA ratio     RCF     Facility A
 
Greater than 3.00 : 1 1.85% 2.10%
3.00 : 1 or less but more than 2.50 : 1 1.35% 1.60%
2.50 : 1 or less but more than 2.00 : 1 1.10% 1.35%
2.00 : 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:

               
     

Reverse
acquisition
reserve
€m

 

Cash
flow

hedging
reserve
€m

 

Foreign

currency

translation

reserve

€m

 

Share-

based

payment

reserve

€m

 

Own
shares
€m

 

Available
-for-sale
reserve
€m

 

 

Total

€m

 
At 1 January 2016 575 (22) (1,109) 168 (38) 1 (425)

Other comprehensive
income

Foreign currency
translation adjustments

-   -   (60)   -   -   -   (60)

Total other
comprehensive expense

-   -   (60)   -   -   -   (60)
 
Share-based payment - - - 5 - - 5

Shares acquired by SKG
Employee Trust

- - - - (10) - (10)

Shares distributed by SKG
Employee Trust

-   -   -   (14)   14   -   -
At 31 March 2016 575   (22)   (1,169)   159   (34)   1   (490)
 
At 1 January 2015 575 (33) (689) 156 (40) 1 (30)

Other comprehensive
income

Foreign currency
translation adjustments

- - (303) - - - (303)

Effective portion of
changes in fair value of
cash flow hedges

- 7 - - - - 7

Net change in fair value of
available-for-sale financial
assets

-   -   -   -   -   1   1

Total other
comprehensive
income/(expense)

-   7   (303)   -   -   1   (295)
 
Share-based payment - - - 11 - - 11

Shares acquired by SKG
Employee Trust

- - - - (15) - (15)

Shares distributed by SKG
Employee Trust

-   -   -   (13)   13   -   -
At 31 March 2015 575   (26)   (992)   154   (42)   2   (329)
 

Supplementary Financial Information

EBITDA before exceptional items and share-based payment expense is denoted by EBITDA in the following schedules for ease of reference.

       
Reconciliation of Profit to EBITDA
      3 months to
31-Mar-16
€m
    3 months to
31-Mar-15
€m
 
Profit for the financial period 90 69
Income tax expense 38 29
Exceptional items charged in operating profit - 39
Net finance costs (after exceptional items) 51 29
Share-based payment expense 5 11
Depreciation, depletion (net) and amortisation 97     89
EBITDA 281     266
 
Supplementary Historical Financial Information
             
€m     Q1, 2015   Q2, 2015   Q3, 2015   Q4, 2015   FY, 2015   Q1, 2016
 
Group and third party revenue 3,235 3,305 3,347 3,422 13,309 3,264
Third party revenue 1,962 2,034 2,024 2,089 8,109 2,001
EBITDA 266 285 305 326 1,182 281
EBITDA margin 13.5% 14.0% 15.0% 15.6% 14.6% 14.0%
Operating profit 127 176 195 214 711 179
Profit before income tax 98 145 165 191 599 128
Free cash flow 25 49 162 152 388 7
Basic earnings per share - cent 30.9 42.3 46.4 52.9 172.6 38.8

Weighted average number of shares
used in EPS calculation (million)

230 231 231 233 232 234
Net debt 2,930 3,100 2,953 3,048 3,048 3,029
Net debt to EBITDA (LTM) 2.53 2.70 2.57 2.58 2.58 2.53
 


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