2015 in brief

A successful year with strong financial and operational performance

Increase in sales and record-high profit margin

AR Packaging’s net sales in 2015 rose 27% to 514 MEUR (404), an increase mainly attributable to the acquired business of the European operations of MeadWestvaco Corporation, which has been included in the financial statements since 1 May. During the May-December period, the acquisition contributed sales of 106 MEUR. EBITDA amounted to 62,5 MEUR, up 47% compared with 2014. The EBITDA margin for 2015 rose to 12.2%, compared with 10.5% for 2014. This is the highest margin in the Group’s history.

Completion of the acquisition from MeadWestvaco Corporation

AR Packaging completed the acquisition of the European tobacco, chocolate and general packaging operations of MeadWestvaco Corporation (MWV). The acquisition was consolidated as from 1 May 2015. The acquired operation includes three plants in Graz, Austria, Krakow, Poland, and Moscow, Russia, and certain additional carton business and related machinery in Svitavy, Czech Republic. AR Packaging now operates the acquired business under the A&R Carton brand. The acquisition elevated AR Packaging to a top three position in the European folding carton market, with total Group net sales of approximately 560 MEUR pro forma.

AR Packaging issues a subsequent bond

In March, AR Packaging successfully placed a 35 MEUR subsequent bond under the terms and conditions of its outstanding 80 MEUR 3m EURIBOR + 5.75% bonds 2013/2017. Together with existing cash and a 15 MEUR junior unsecured loan, the proceeds from the subsequent issue fully financed the acquisition of the European folding carton operations of MeadWestvaco Corporation.

AR Packaging wins three prizes at ECMA Awards

As the first company ever to do so, AR Packaging won three awards with three different packaging solutions in three categories. The award-winning solutions were selected from more than 100 entries in ten categories. In the Sustainability category, AR Packaging won the award for its Fazer Alku new mill product. This packaging is a completely new solution for its product segment and offers a decisive advance in sustainability by eliminating the inner plastic bag and achieving a high carton board ratio ideal for recycling. In the Confectionery category, AR Packaging took home the prize for its Kägi Classic Minis – a chocolate packaging with an unusual shape and eye-catching look that ensures the product will attract considerable attention. Finally, in the Non-food category, AR Packaging won the award for a packaging with a sophisticated look, matt and glossy varnish, embossing, and an intelligent opening and reclosing mechanism.

Investments in plants and machinery in Poland, Austria and Sweden

AR Packaging decided to invest 3 MEUR in the acquired plants in Krakow and Graz, following the completed acquisition of the European packaging operations of MeadWestvaco Corporation. AR Packaging will expand the plant in Krakow, Poland, and invest in upgrading the machinery equipment at the plant in Graz, Austria. In addition, AR Packaging decided to invest 5 MEUR in new processes, plant upgrades and production equipment, including a new flexo press at its Flextrus plant in Lund, Sweden, which will occur at the beginning of 2016.

NET SALES AND EBITDA MARGIN
EBITDA AND EBITA

KEY FIGURES 2015 AND 2014

 KEUR 2015 2014
Net sales 513 517 404 330
EBITDA* 62 509 42 495
EBITDA margin % 12.2% 10.5%
Operating profit (EBIT I)* 44 740 27 388
Operating margin % 8.7% 6.8%
Net profit 19 984 15 596
Earnings per share, EUR 2.00 1.56
Equity ratio % 27.5% 28.4%
Return on equity in % 22.1% 21.1%
Return on capital employed in % 18.9% 13.6%
Net debt 106 261 87 271
Net debt/EBITDA 1.7 2.1
Gearing ratio % 104.9% 110%

* Non recurring items excluded

NET SALES BY GEOGRAPHIC MARKET 2015