INTERIM REPORT JANUARY-MARCH 2016
AR Packaging continued its solid performance in the first quarter of 2016. Net sales grew by 48% and operating profit excluding non-recurring items increased to 14.6 MEUR with an operating margin of 9.9%. This is the highest level in a first quarter in the Group's history. The performance is a result of our strengthened market position as well as our continued focus on improving efficiency throughout our operations. The EBITDA margin increased to 13.1% (11.3%) before non-recurring items. The Group also delivered a stable cash flow following healthy improvement in profitability.
The increase in net sales and operating profit is mainly linked to our acquisition of the European operations of MeadWestvaco Corporation (MWV) as from 1 May, 2015. The acquired business continues to complement the Group in an excellent manner. Furthermore we had a very good development in the Branded Products division both in Europe and Russia. On a rolling 12 months basis we now have a sales level of around 560 MEUR.
The new EU directive regarding the tobacco market will come into effect in May, 2016 and we expect sales to the European tobacco market to be affected. For AR Packaging this may have some negative impact on margins but can also create new business.
The demand for complex high-quality packaging solutions is increasing in line with stricter regulations, increased focus on sustainability and a competitive consumer market for our customers. Our strategy to expand in high value-add segments where the Group has a competitive edge and to develop new and innovative packaging solutions in partnership with our customers, is therefore well in line with market demand.
In general we have a positive view for the rest of 2016. However, sales for the coming quarters are expected to be softer compared to the very good outcome of this first quarter.
Harald Schulz, CEO
Additional information is provided by:
Harald Schulz, President and CEO, +49 6192 406 100
Niclas Nyström, CFO, +46 40 661 56 64
For further information, see our website: www.ar-packaging.com
ÅR Packaging Group AB (publ)
221 00 Lund, Sweden
Telephone: +46 46 287 33 00
Registration no: 556702-3006