Mayr-Melnhof Karton AG — Earnings Release 1999

Feb 16, 2000

News Details

Ad-hoc | 16 February 2000 08:56

Ad hoc-Service: Mayr-Melnhof Karton AG Prel.R

Ad hoc-announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— PRELIMINARY CONSOLIDATED RESULTS FOR 1999 * Very good development of business in the 4th quarter of 1999 exceeds high expectations * Net income of EUR 61.2 million / ATS 842 million surpasses ambitious goal for the year 1999 Preliminary consolidated results for 1999: Consolidated figures 1999 1998 % Change Net sales in EUR millions 912.0 904.8 +0.8% in ATS millions 12,550 12,451 Net income in EUR millions 61.2 63.3 -3.3% incl. min.) in ATS millions 842 871 % of sales 6.7% 7.0% Cash earnings in EUR millions 127.3 128.7 -1.1% in ATS millions 1,751 1,771 % of sales 14.0% 14.2% In the 4th quarter of 1999, the Mayr-Melnhof Group achieved a significant increase in results compared to the previous quarter. This was primarily due to the full utilisation of capacities and improved productivity. On the strength of this favourable development, consolidated net income for 1999 is expected to reach EUR 61.2 million / ATS 842 million. This result exceeds the ambitious target for 1999 of EUR 58 million / ATS 800 million. (1998 net income totalled EUR 63.3 million / ATS 871 million and included exceptional income effects from the release of provisions and taxes.) Sales volume has grown in both of the divisions. However, Group net sales remained nearly unchanged at EUR 912.0 million / ATS 12,550 million (1998: EUR 904.8 million/ ATS 12,451 million) because of consolidation effects resulting from the disposal of the German recycling companies in 1998 and increased internal sales. Due to the healthy economic development in Western Europe and a continuous recovery of demand from overseas markets, total sales volume in the Cartonboard Division has risen by 100,000 tonnes, reaching 1.2 million tonnes in 1999. Of this amount, 83% (1998: 87%) was sold in Europe and the remaining 17% (1998: 13%) went to overseas markets. This increase in volume, combined with higher prices for cartonboard, compensated for the considerable rise in raw materials costs, most notably waste paper. Focusing investment on the optimisation of machinery (e.g. rebuilding of board machine III in the Frohnleiten mill) resulted in a distinct improvement in the productivity of the Cartonboard Division. Supported by friendly market conditions, cartonboard production rose by 8.0% and reached a level of 1.21 million tonnes. The development of business in the Packaging Division was characterised by sustained strong competition in Western Europe and a slow recovery in Eastern Europe. Despite the difficult environment, business with key Pan-European customers has grown significantly. This expansion resulted in a 17.3% increase in the volume converted, from 248,000 to 291,000 tonnes, as well as a satisfying utilisation of capacities. However, the improved results during the 2nd half-year of 1999 were strained due to the difficulty of passing on increased cartonboard prices. Throughout 1999, MM-Packaging focused investment on the concentration of key production locations with the objective of further cost reductions through the installation of large format printing machines and the application of the latest technology in the pre-print. Current Market Situation Since the beginning of 2000, the cartonboard market has been characterised by lively demand from Europe and overseas countries. At 100,000 tonnes, the order backlog of the Cartonboard Division has remained at a very high level. At the same time, the strong price increase for the most essential raw materials used in the production of cartonboard has continued. In accordance with this development, Mayr-Melnhof will raise cartonboard prices by approximately 10% for deliveries as of March 31, 2000. A challenge which lies ahead for MM-Packaging concerns the passing on of higher raw materials costs to its customers. The cost savings programmes will be continued. For further information please contact: Stephan Werba, Investor Relations Tel.: +43/ 1 50136 1180, Fax. +43/ 1 50136 1195; Mayr-Melnhof Karton AG, Brahmsplatz 6, A-1041 Vienna e-mail: investor.relations@mm-karton.com; Web Site: http://www.mayr-melnhof.co.at End of Message