Increased e-commerce spend has helped boost packaging firm Smurfit Kappa in the first quarter of its financial year, with the group seeing underlying revenue growth of 6% to €2.27 billion for the period.
In what Tony Smurfit described as a "remarkable" quarter for the business, EBITDA stood at €386 million, while EBITDA margin was 17.0%.
Smurfit Kappa said that corrugated volume growth was up 7% in the quarter in both Europe and the Americas, which demonstrated the group's exposure to high-growth markets such as e-commerce and sustainable packaging.
Additional Costs
It noted that while container board prices have increased in the first quarter and also at the start of the second quarter, the group is 'progressively recovering these input costs through our corrugated box system'.
Along with cost pressures, Smurfit Kappa said that it is experiencing some supply disruption when it comes to packaging paper, although it said that its integrated business model is helping to maintain continuity of supply.
Commenting on the quarterly performance, Smurfit said, "We had strong corrugated volume growth in practically every area and all markets in which we operate. With unprecedented industry wide shortages of supply and input cost pressures, paper prices have moved up sharply. We are recovering these input costs in line with our expectations.
"Against this backdrop, I am very proud of our team who have continued to deliver in these exceptional times, ensuring security of supply to our customers while also continuing to support them through our approach to innovation and our sustainable packaging products."
2021 Forecast
Looking ahead, the group said that it plans to accelerate its capital investment plan with a number of 'high return projects', while it is also seeking to bolster its integrated model and improve its sustainability footprint.
“Our strong first quarter performance has set the foundation for accelerated revenue and earnings growth as we move through 2021," Smurfit said. "This performance and these prospects reflect the strength and quality of Smurfit Kappa.”
© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Packaging news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
