Final Results

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2013 Fourth Quarter Results

12 February 2014: Smurfit Kappa Group plc (‘SKG’ or the ‘Group’), one of the world’s largest integrated manufacturers of paper-based packaging products, with operations in Europe and the Americas, today announced results for the 3 months and 12 months ending 31 December 2013.

2013 Fourth Quarter & Full Year | Key Financial Performance Measures

                                 
€ m   FY 2013   FY 2012(1)   Change   Q4 2013   Q4 2012(1)   Change  

Q3 2013

  Change
               
Revenue €7,957 €7,335 8% €2,033 €1,824 11% €2,016 1%
 

EBITDA before Exceptional Items and Share-based Payment (2)

€1,107 €1,016 9% €291 €239 22% €303 (4%)
 
EBITDA Margin 13.9% 13.8% - 14.3% 13.1% - 15.0% -
 
Operating Profit before Exceptional Items €679 €612 11% €175 €129 35% €196 (11%)
 
Profit before Income Tax €294 €319 (8%) €62 €33 91% €104 (40%)
 
Basic EPS (cent) 82.2 106.9 (23%) 26.0 25.2 3% 24.0 8%
 
Pre-exceptional EPS (cent) 114.5 104.1 10% 40.0 34.0 18% 30.6 31%
 
Return on Capital Employed (3) 13.1% 12.0% - 12.6% -
 
Free Cash Flow (4) €365 €282 30% €103 €118 (12%) €190 (46%)
                                 
                                 
 
Net Debt €2,621 €2,792 (6%) €2,630 -
 
Net Debt to EBITDA (LTM)   2.4x   2.7x   -               2.5x   -

(1) Comparative figures reflect the restatement to employee benefits under the revision of IAS 19, as set out in Note 15.

(2) 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 34.

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

(4) Free cash flow is set out on page 10. The IFRS cash flow is set out on page 20.

Full Year 2013 Highlights

  • Significantly strengthened capital profile and materially reduced cash interest
  • Revenue growth in 2013 of 8% and 30% increase in free cash flow
  • Return on capital employed of 13.1%
  • Successful integration and growth of Smurfit Kappa Orange County
  • 2013 cost take-out target achieved with further €100 million for 2014
  • Final dividend per share increased by 50% from 20.50 cent to 30.75 cent

Performance Review & Outlook

Gary McGann, Smurfit Kappa Group CEO commented: “During 2013 the Group has completed its main financial restructuring activity moving from being a leveraged company to achieving a corporate credit profile. As a consequence, the profile of the Group has fundamentally changed and the progress made offers the company a wide range of strategic and financial options.

For 2013 the Group is pleased to announce a full year EBITDA performance of over €1.1 billion and a return on capital employed of over 13%. With a weaker though improving year-on-year performance in Europe, the Americas has been a strong source of earnings growth in 2013 and continues to provide the Group with geographic diversity and exposure to higher growth markets.

The Group’s European corrugated packaging operations showed good growth in 2013, with box volumes up 2% year-on-year and the Group is progressing with box price increases through the fourth quarter and into 2014. The good volume result was achieved despite low macroeconomic growth and reflects organic growth with our customers and specific market share wins.

SKG is clearly established as a committed partner to our customers, working in their industries and in many cases within their operations to define and meet their increasingly complex packaging needs. This is evidenced by the sizeable market share that SKG has with the major international branded companies.

Over the course of the year improved containerboard demand coupled with stable supply side conditions and a steady Old Corrugated Containers (‘OCC’) market supported a recovery in testliner prices, which has gone some way to addressing the relatively poor returns for the grade over the last number of years. However, in spite of increasing testliner pricing, margins have still not adequately recovered due to consistently higher input costs. Recent weakness in kraftliner pricing has abated and the strong recycled market should provide upward pricing pressure in the grade.

The operations in the Americas segment remain a very important part of the Group’s strategic goals. They performed well in 2013 with reported volume growth of over 2% year-on-year in spite of some economic difficulties. However, due to recent developments in Venezuela with regards to the possible exchange rate at which US dollars may be made available, the Group has updated its Principal Risks and Uncertainties disclosure on page 13.

SKG reports a full year 2013 net debt / EBITDA ratio of 2.37 times. The consistent progress on debt reduction has been made possible by the strong free cash flow generated through a robust operational performance and decisive capital allocation. Debt paydown and re-financing activities undertaken to date have resulted in a €120 million reduction in annualised cash interest since the IPO and boosts available free cash flow.

SKG will continue to progressively reward shareholders from earnings growth and interest savings resulting from the fundamental repositioning of the Group. In that context, the Board is recommending a final dividend of 30.75 cent for 2013, a 50% increase on last year, reflecting confidence in the business. It is the company’s intention to continue a progressive dividend policy within the context of the Group’s ongoing earnings profile.

SKG has a good pipeline of capital projects with very attractive returns. Utilising its strong free cash flow, SKG intends to invest in these projects, increasing its capital expenditure in a controlled manner to 120% of depreciation for a three year period. Once completed, these projects will deliver improved efficiencies, material earnings growth and are expected to deliver IRR’s of at least 20%

A priority focus of the Group is to seek to expand its operations in the high growth regions of the Americas and Eastern Europe through accretive acquisitions, together with innovation and differentiation initiatives already underway in our current business. While maintaining the strengthened capital structure and the strong cash flow dynamics, in the absence of sufficient accretive acquisitions, the company will return capital to the shareholders.

For 2014, based on the current macro-economic outlook, the Group expects to achieve continued earnings growth. This will be delivered in the context of the fundamental financial, strategic and differentiation initiatives commenced in 2013 and as the European packaging business progressively secures the recovery of input cost increases through higher box prices. Today, the Group is in a strong position to further optimise its integrated European operations and to increase its unique Americas exposure through the use of its strong balance sheet and its proven management thereby continuing to deliver earnings growth and improved returns to our shareholders.”

About Smurfit Kappa Group

SKG is a world leader in paper-based packaging with operations in Europe and the Americas. SKG operates in 21 countries in Europe and 11 in the Americas. With innovation, service and pro-activity towards customers as its primary focus, SKG is the European leader in paper-based packaging including, corrugated, containerboard, bag-in-box, solidboard, and solidboard packaging. It also has a key position in a number of other product/market segments, including graphicboard, MG paper and sack paper. SKG has a growing base in Eastern Europe, and it is the only large scale pan regional operator in Latin America.

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 Group

 

Tel: +353 1 202 71 80

E-mail: ir@smurfitkappa.com

 

FTI Consulting

 

 

Tel: +353 1 663 36 80

E-mail: smurfitkappa@fticonsulting.com

2013 Fourth Quarter & Full Year | Performance Overview

The Group has delivered 9% EBITDA growth year-on-year with a full year EBITDA of €1,107 million. The Americas made a considerable contribution to the material earnings growth including a strong performance from its Venezuelan operations and major progress in Smurfit Kappa Orange County (‘SKOC’) following its acquisition in 2012, with a weaker though improving year-on-year performance in Europe. The Group remains committed to its integrated model which has been proven to deliver consistently higher earnings whilst reducing volatility. The Group’s business offering involves increasing differentiation compared to its competitors in areas such as an optimised product portfolio, innovative packaging designs, security of supply, efficiency of distribution and full chain of custody control.

In the early part of 2013 SKG’s European corrugated pricing was under pressure following the downward trend in testliner prices in 2012. This was partially alleviated by the successful implementation of a €40 per tonne price increase in recycled containerboard in February 2013. Further price increases in August and November 2013 have provided the Group with a renewed platform and necessity to seek corrugated price recovery. Initial progress in price recovery was evidenced in the fourth quarter and is continuing into the first quarter 2014 with a total price recovery of 2% from the low point in 2013. The Group’s objective is to pass increased input costs through to box prices within the usual time lag.

European corrugated box volumes grew by 2% year-on-year and reflect steady underlying growth across the region combined with a number of new customer wins. The Group’s Eastern European operations continued to perform strongly, with a full year volume increase of 9% including a particularly strong result in Poland. Sheet feeding, which accounts for approximately 13% of the Group’s volumes, improved in the fourth quarter as rising input costs resulted in an increase in price levels to a point at which it was economically logical for SKG to re-commence production.

Over the course of 2013, the European testliner industry implemented three price increases with a net uplift of €85 per tonne. This was achieved as a result of solid fundamentals that have persisted into 2014, including some evidence of macro-economic growth, improving corrugated demand, consistently high OCC pricing and the absence of material additional capacity announcements.

The Group delivered a strong performance in its kraftliner operations in 2013 due to improved production levels and a 7% increase in prices. SKG is the number one European producer of kraftliner and maintains an approximate 500,000 tonne net long position in a European market which is structurally short of kraftliner. This provides security of supply to the Group’s packaging operations and exposure to typically higher margins through third party sales. It also provides a strategic hedge against any extreme volatility in raw material costs or availability. Recent weakness in the grade is abating with upside potential later in the year supported by the strong testliner market, and recovering end market demand.

The Americas segment performed well during the year with EBITDA of €357 million. Performances of the various countries within the region were generally positive, delivering average volume growth of 2% in spite of extensive bottom slicing in SKOC’s operations. The Group’s Mexican business reported flat year-on-year volumes on slower demand but successfully delivered a 6% price increase as a result of rising paper prices in the first half. The Group’s Colombian business is progressing well following a temporary slowdown during the year and SKOC has been successfully integrated, materially exceeding all expectations.

In spite of economic headwinds and challenging operating conditions, the Group’s Venezuelan business has continued to perform strongly year-on-year with a 3% underlying growth in volume, having adjusted for one-off issues in 2012. The Group’s Venezuelan business is the leading supplier of paper-based packaging in Venezuela and is an important part of the industrial infrastructure. Due to recent developments in relation to the exchange system which may impact the exchange rate at which US dollars are to be made available to its Venezuelan operations, the Group has updated its Principal Risks and Uncertainties on page 13.

In July 2013, the Group completed the re-financing of its €1.375 billion Senior Credit Facility at significantly reduced rates which had the effect of moving the entire Group’s capital structure to an unsecured basis, marking the completion of the transition of the Group from the leveraged to the corporate credit market. This was followed in November by the redemption of the Group’s €500 million 7.25% bonds which was funded by existing credit facilities and approximately €220 million of cash resources. As a result of these two transactions, the Group will have reduced its annualised cash interest costs by approximately €43 million, the full effects of which will be seen in 2014.

SKG delivered free cash flow of €365 million in 2013, up 30% year-on-year. This was driven by a robust operational performance, improving cash flow management and the additional earnings from SKOC. This higher free cash flow enabled debt paydown of €171 million and a reduction in net debt / EBITDA to just under 2.4 times at the year end. Reflecting the Group’s focus on maximising returns for shareholders, ROCE increased to 13.1% and the plan to deploy extra resources on growth focused capital expenditure will support a continuation in the trend of increasing return on capital employed.

2013 Fourth Quarter | Financial Performance

At €2,033 million, revenue in the fourth quarter of 2013 was 11% higher year-on-year. This reflected an underlying increase of €176 million when accounting for a €78 million boost from net acquisitions offset by negative net currency movements and hyperinflationary adjustments of €45 million.

Revenues in the fourth quarter improved marginally compared to quarter three. However, underlying revenue decreased slightly with higher sales in the Americas offset by somewhat lower sales in Europe.

EBITDA for the fourth quarter increased by 22% from €239 million in 2012 to €291 million in 2013. Allowing for net currency movements, hyperinflationary adjustments and the additional contribution from SKOC, the underlying year-on-year move was an increase of €36 million with higher earnings in the Americas and lower Group Centre costs, partly offset by marginally lower earnings in Europe. In 2012, the forced seven week closure of the Facture kraftliner mill in July delayed annual downtime to December. This is typically taken in the third quarter and negatively impacted the fourth quarter 2012 EBITDA by approximately €10 million.

Compared to the third quarter of 2013, EBITDA showed an underlying decrease of €15 million in the fourth quarter, the equivalent of a 5% reduction.

An exceptional charge of €2 million within operating profit in the fourth quarter relates mainly to the adjustment of the currency trading loss following the devaluation of the Venezuelan Bolivar, for hyperinflation and re-translation. Exceptional charges of €10 million in the fourth quarter of 2012 related primarily to SKOC acquisition costs of €6 million and restructuring costs of €3 million.

Pre-exceptional earnings per share increased year-on-year by 18% to 40.0 cent for the quarter to December 2013 (2012: 34.0 cent).

2013 Full Year | Financial Performance

Reported revenue for the full year rose by 8% from €7,335 million in 2012 to €7,957 million in 2013. Revenue in 2013 was boosted by €409 million from net acquisitions, primarily SKOC, but was reduced by net negative currency movements and hyperinflationary adjustments of €185 million. The underlying move was an increase of €398 million, with higher revenue in the Americas and, to a lesser extent, in Europe.

With the benefit of relatively strong growth in the fourth quarter, EBITDA for the full year increased by €91 million (the equivalent of 9%) from €1,016 million in 2012 to €1,107 million in 2013. Allowing for currency movements, hyperinflationary adjustments and a contribution of €60 million from net acquisitions (primarily SKOC), comparable EBITDA increased by €42 million with higher earnings in the Americas and lower Group Centre costs, partly offset by a shortfall in Europe.

Exceptional items charged within the operating profit in the year to December 2013 amounted to €36 million, approximately €15 million of which related to the temporary closure of the Townsend Hook machines in July. A further €18 million of exceptional items related to a currency trading loss as a result of the devaluation of the Venezuelan Bolivar in February 2013. This resulted in a higher cost to the Group’s Venezuelan operations of discharging their non-Bolivar denominated payables following the devaluation and its subsequent adjustment by €6 million for hyperinflation and re-translation at the year-end exchange rate. The remaining €3 million was in respect of SKOC reorganisation costs and the consolidation of the Group’s two operations in Juarez in Mexico.

Exceptional items charged within operating profit in 2012 amounted to a net gain of €18 million, comprising gains of €28 million and charges of €10 million. The exceptional gains were booked in the first quarter and comprised €10 million from the sale of land at the Group’s former Valladolid mill in Spain and €18 million relating to the disposal of a company in Slovakia.

Operating profit after exceptional items for the year was €643 million compared to €630 million for 2012, an increase of approximately 2% (11% before exceptional items).

The Group’s net pre-exceptional finance costs were €308 million in 2013, up €6 million compared to 2012 mainly due to hyperinflationary adjustments. Exceptional finance costs in the year to December 2013 amounted to €51 million and resulted from the early repayment during the year of the Senior Credit Facility and the €500 million 7.25% bonds due in 2017. Exceptional finance income amounted to €8 million which related entirely to the increased value in US dollar denominated intra-Group loans receivable, following the devaluation of the Venezuelan Bolivar in February. Exceptional finance costs of €12 million in 2012 were mainly due to the accelerated amortisation of issue costs relating to the debt paid down with the proceeds of the bond issues and also to the call premium payable on the early repayment of the 2015 bonds.

In 2013, the tax expense of €98 million is €30 million higher than in 2012 due to higher underlying tax charges in the Americas and the first year inclusion of SKOC.

Profit before income tax of €294 million compared to a profit before income tax of €319 million last year. The decrease was mainly due to higher finance costs in 2013, as a result of the refinancing activities during the year.

Pre-exceptional EPS of 114.5 cent for the full year 2013 was 10% higher than the 104.1 cent reported in 2012. This was driven by a higher pre-exceptional operating profit year-on-year slightly offset by a higher tax expense. Basic EPS was 82.2 cent for the full year 2013, compared to 106.9 cent for 2012.

2013 Fourth Quarter & Full Year | Free Cash Flow

The Group reported free cash flow of €365 million in 2013, an increase of 30% compared to €282 million reported in 2012. The increase reflects higher EBITDA year-on-year, a working capital inflow rather than an outflow and materially reduced cash interest, offset by higher capital expenditure.

Capital expenditure of €369 million for the full year 2013 equated to 98% of depreciation, in line with the Group’s guidance of 100% for the full year.

The Group’s reported working capital inflow of €74 million in the fourth quarter resulted in working capital of €536 million at December 2013. Over the course of 2013, a decrease in debtors and an increase in creditors were partly offset by an increase in stocks resulting in a net inflow of €28 million for the year. Reflecting the Group’s continued focus on working capital management the ratio of working capital to sales has improved year-on-year, moving from 8.5% (8.2% adjusting for SKOC) at December 2012 to 6.6% at the year end mainly due to improved debtor and inventory days.

The cash interest expense in 2013 of €197 million was 16% lower than in 2012, as a result of a reduction in gross debt and a change in its composition, whereby higher cost debt was re-financed at lower rates. Cash tax payments of €112 million included higher tax payments in the Americas, partly due to the first year inclusion of SKOC, offset by lower payments in Europe and the absence of material asset sales in 2013.

2013 Fourth Quarter & Full Year | Capital Structure

During 2013 the Group re-financed its €1.375 billion Senior Credit Facility on an unsecured basis marking the completion of the planned transition of its capital structure from one of a leveraged, high yield credit to that of a corporate profile. This was achieved through consistent debt paydown in excess of €780 million over six years facilitated by strong year-on-year operational performance and active financial management. As a result the Group’s flexible balance sheet is well positioned to support and drive SKG’s planned progressive capital allocation agenda in 2014 and beyond.

The Group successfully completed three re-financing transactions totalling approximately €2 billion over the course of 2013. In January 2013, the Group issued a €400 million seven year bond at a rate of 4.125%. This was followed in July by the €1.375 billion Senior Credit Facility re-financing which established a five year facility comprising a €750 million amortising term loan with a margin of 2.25% and a €625 million revolving credit facility with a margin of 2.00%, reduced from 3.75% and 3.25% respectively. Additionally, the Group put in place a five-year trade receivables securitisation programme of up to €175 million carrying a margin of 1.70%, which supplemented its existing programme of up to €250 million at a margin of 1.50% which matures in 2015. Finally, in November the Group completed the redemption of its €500 million 7.25% Senior Notes due 2017 utilising cash and existing credit facilities arranged as part of the SCF and trade receivables securitisation transactions.

Subsequent to the Group achieving a net debt to EBITDA below 2.5 times at the year end, the margins applicable to its Senior Credit Facility have reduced to 2% and 1.75% for the term loan and the revolving credit facility respectively, delivering further annualised interest cost savings of almost €3 million.

Following these transactions, the Group has reduced its average interest rate from 6.2% at December 2012 to 5.1% at December 2013 resulting in annualised cash interest savings of over €43 million, and the average debt maturity profile being maintained at approximately 5.2 years. The Group continues to preserve a strong liquidity position with cash on the balance sheet of €455 million and undrawn credit facilities of approximately €480 million at 31 December 2013.

The Group made further progress on its net debt over the course of the year with a €171 million reduction in debt resulting in a net debt of €2,621 million at 31 December 2013. Congruently, net debt to EBITDA has decreased substantially, moving from 2.7 times in 2012 to less than 2.4 times at the year end and reflected the Group’s resolve to use increased cash flow from operations to pay down debt in the absence of more accretive uses of the cash in 2013. The Group maintains its credit rating target of BB+ / Ba1.

Dividend Policy

The Group regards dividends as an important part of its investment proposition, whereby SKG can assure shareholders of certainty of value through the cycle. Following its reinstatement in 2012, the Group increased the absolute dividend by 37% in 2013 and committed to progressive reviews as earnings grew.

Following a strong year of earnings growth, the successful re-positioning of the Group’s capital structure, and confidence in its future earnings and cash flow, the Board is recommending a final dividend of 30.75 cent per share for 2013, a 50% increase on last year’s final dividend. It is proposed to pay the final dividend on 9 May 2014 to all ordinary shareholders on the share register at the close of business on 11 April 2014. The interim and final dividends are paid in October and May in each year in the approximate proportions of one third to two thirds respectively.

2013 Fourth Quarter & Full Year | Operating Efficiency

Cost take-out programme

The Group is pleased to announce the achievement of its 2013 cost take-out target with the delivery of €101 million of incremental cost take-out in the year. The Group views this programme as an essential tool in combating the industry’s inflating cost base and consistently applies improving technologies in combination with its industry leading technical expertise to improve process efficiencies and raw material usage.

Having successfully delivered cost savings of €597 million since the start of 2008, SKG has identified a further €100 million cost take-out opportunities for 2014. These will be achieved across the business segments and will continue to underpin the Group’s improving earnings.

2013 Fourth Quarter & Full Year | Performance Review

Europe

Fourth quarter revenue rose by €43 million year-on-year, with underlying growth of €50 million and €8 million from net acquisitions (mainly CRP in the UK) partly offset by negative currency movements. Fourth quarter EBITDA of €192 million in Europe was €7 million lower than €199 million reported in 2012, with €2 million of the decrease resulting from currency movements given a relatively stronger euro in 2013.

The Group’s European segment reported underlying revenue growth of €71 million for the full year 2013, primarily driven by good trading conditions for containerboard over the course of the year. Packaging margins experienced downward pressure due to the usual lag in the implementation of higher containerboard costs into box prices, resulting in a decrease in EBITDA margins from 14.2% to 12.9% in the year.

In volumes terms, the Group’s packaging operations performed reasonably well in the fourth quarter, accelerating to 2% growth year-on-year as a result of improving markets for both corrugated boxes and sheet feeding operations. For the full year, SKG’s corrugated box volume continued its strong performance with 2% growth. The Group’s Pan-European volumes continued to perform strongly with 4% growth in 2013.

Corrugated packaging prices were under substantial pressure in early 2013 following volatile paper prices throughout 2012. However, testliner price increases in the first quarter which underpinned the corrugated price and further increases of €45 per tonne have made it necessary for the Group to start raising prices in order to cover increased input costs. The Group saw evidence of progress in this initiative in the fourth quarter, and continues to expect to recover recent paper price increases into higher box prices subject to the usual time lag.

Throughout 2013, OCC pricing remained flat with average European prices remaining in a narrow band around €120 per tonne. Underpinning this stability was improving European demand for OCC as corrugated consumption increased and some incremental testliner capacity commenced production. This was complemented by steady global market activity from Chinese players despite the “Green Fence” initiative which ended in November. As the European recovered fibre market is expected to continue to tighten, SKG’s strong control over its own fibre needs will become increasingly important.

Supported by solid fundamentals, the recycled containerboard market achieved a net increase of €85 per tonne in pricing in 2013. This went some way to addressing the unsustainable margins which had prevailed in recent years. However, in spite of relatively high price levels, margins have not recovered to their previous peaks as a result of consistently higher input costs. With improving demand and a stable supply side outlook, the European recycled containerboard market is expected to remain strong throughout 2014.

The refurbished machine at Townsend Hook will commence output early 2015, and its 250,000 tonnes of lightweight paper will be introduced in an orderly manner into the market.

Overall, the Group’s kraftliner operations performed well during the year as a result of strong volumes and a 7% higher price when compared to the average over 2012. However, kraftliner pricing has been under pressure since September dropping approximately €45 per tonne over the period. The Group is confident that this negative trend in pricing has abated and that the strong testliner market and macroeconomic growth should support a recovery in the price of the grade.

Looking ahead, the Group’s European packaging operations will continue to benefit from corrugated price increases as it progresses with the recovery of higher input costs with the usual time lag.

The Americas

The Americas reported a strong performance in 2013 with revenue growth of €583 million and good volume growth year-on-year. For the full year, EBITDA of €357 million in the region accounted for 32% of the Group’s total earnings.

SKOC significantly out-performed earnings expectations for its first full year of operations as a result of the double benefit of higher linerboard and corrugated prices together with productivity improvements and other synergy benefits throughout the organisation. Having exited unprofitable business earlier in the year, as US demand improves SKOC expects to deliver good growth in 2014 as a result of key account wins and organic growth with its existing customers.

Despite weakening fundamentals in Argentina, the Group’s operations performed satisfactorily with a 7% increase in volumes which included the recovery of much of the lost volumes due to one-off issues in 2012. However, price increases of 4% did not match inflation over the period. The Group has actively managed its US dollar exposure as the currency has devalued during the year.

The recovery of the Colombian economy continues to gain traction and is experiencing strong GDP growth. The Group achieved 3% volume growth year-on-year although it experienced some pricing pressure throughout the year. This is expected to be recovered in 2014 following the announcement of pricing initiatives in January. The country’s effective cost take-out programme continues to provide tangible benefits and to deliver consistently strong EBITDA margins.

Following somewhat difficult market dynamics in 2013, the Mexican market is expected to improve its pace of growth in 2014 with GDP growth of 3% forecast for the year. During 2013 corrugated prices in the country were increased by 6% and further increases will be necessary in 2014 to recover rising input costs.

In spite of Venezuela continuing to experience significant inflationary pressures, and shortages of basic goods, the business performed well in 2013, due to its strong position in this market, and a lack of one-off issues which affected the corrugated operations in 2012.

The Americas is an important driver of geographic diversity and earnings growth for the Group, and SKG will continue to actively invest in driving the region’s performance through targeted capital expenditure and accretive M&A. Improved macroeconomic expectations for the remainder of the region should further support SKG’s drive to grow the business in 2014 and maximise returns for shareholders.

Summary Cash Flow

Summary cash flows(1) for the fourth quarter and twelve months are set out in the following table.

    Restated     Restated
3 months to 3 months to 12 months to 12 months to
31-Dec-13 31-Dec-12 31-Dec-13 31-Dec-12
    €m   €m   €m   €m
Pre-exceptional EBITDA 291 239 1,107 1,016
Exceptional items (2) (4) (27) (4)
Cash interest expense (39) (55) (197) (235)
Working capital change 74 79 28 (12)
Current provisions - (2) (6) (10)
Capital expenditure (151) (113) (369) (293)
Change in capital creditors 4 2 10 (35)
Tax paid (41) (31) (112) (113)
Sale of fixed assets 1 1 3 14
Other (34)   2   (72)   (46)
Free cash flow 103 118 365 282
 
Share issues 2 14 7 27
Purchase of own shares - - (15) (13)
Sale of businesses and investments - (1) - (1)
Purchase of investments (21) (177) (26) (184)
Dividends (25) (18) (76) (56)
Derivative termination payments (16) (2) (16) (3)
Early repayment of bonds (23)   (4)   (23)   (4)
Net cash inflow/(outflow) 20 (70) 216 48
 
Net debt/cash acquired/disposed (7) 1 (8) 2
Acquired Orange County debt - (85) - (85)
Deferred debt issue costs amortised (9) (12) (40) (26)
Currency translation adjustments 5   14   3   21
Decrease/(increase) in net debt 9   (152)   171   (40)

(1) The summary cash flow is prepared on a different basis to the Consolidated Statement of Cash Flows under IFRS. The principal difference is that the summary cash flow details movements in net debt while the IFRS cash flow details movements in cash and cash equivalents. In addition, the IFRS cash flow has different sub-headings to those used in the summary cash flow. A reconciliation of the free cash flow to cash generated from operations in the IFRS cash flow is set out below.

    12 months to   12 months to
31-Dec-13 31-Dec-12
        €m   €m
Free cash flow 365 282
 
Add back: Cash interest 197 235
Capital expenditure (net of change in capital creditors) 359 328
Tax payments 112 113
Financing activities 3 -
Less: Sale of fixed assets (3) (14)
Profit on sale of assets and businesses – non exceptional (5) (6)
Dividends received from associates (1) (2)
Receipt of capital grants (2) (1)
Non-cash financing activities (7)   (6)
Cash generated from operations 1,018   929

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 debt service and capital expenditure.

At 31 December 2013, Smurfit Kappa Treasury Funding Limited had outstanding US$292.3 million 7.50% senior debentures due 2025. The Group had outstanding €127.2 million and STG£64.9 million variable funding notes issued under the €250 million accounts receivable securitisation programme maturing in November 2015, 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, €500 million 7.75% senior notes due 2019, €400 million 4.125% senior notes due 2020 and €250 million senior floating rate notes due 2020. Smurfit Kappa Acquisitions and certain subsidiaries are also party to a senior credit facility. At 31 December 2013, the Group’s senior credit facility comprised term drawings of €700.9 million and US$64.4 million under the amortising Term A facility maturing in 2018. In addition, as at 31 December 2013, the facility included a €625 million revolving credit facility of which €125 million was drawn in revolver loans with a further €20.9 million drawn under various ancillary facilities and letters of credit.

The following table provides the range of interest rates as of 31 December 2013 for each of the drawings under the various senior credit facility term loans.

BORROWING ARRANGEMENT   CURRENCY   INTEREST RATE
 
Term A Facility EUR 2.420% - 2.544%
USD 2.418%
 
Revolving Credit Facility EUR 2.228%

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

On 24 July 2013, the Group successfully completed a new five-year unsecured €1,375 million refinancing of its senior credit facility comprising a €750 million term loan with a margin of 2.25% and a €625 million revolving credit facility with a margin of 2.00%. The term loan is repayable €125 million on 24 July 2016, €125 million 24 July 2017 with the balance of €500 million repayable on the maturity date. In connection with the refinancing, the collateral securing the obligations under the Group’s various outstanding senior notes and debentures was also released and the senior notes and debentures are therefore now unsecured. The new unsecured senior credit facility is supported by substantially the same guarantee arrangements as the old senior credit facility. The existing senior notes and debentures likewise continue to have substantially similar guarantee arrangements as supported those instruments prior to the refinancing.

In addition, on 3 July 2013, the Group put in place a new five-year trade receivables securitisation programme of up to €175 million utilising the Group’s receivables in Austria, Belgium, Italy and the Netherlands. The programme, which has been arranged by Rabobank and carries a margin of 1.70%, complements the Group’s existing €250 million securitisation programme.

On 4 November 2013, the Group completed the redemption of its €500 million 7.25% senior notes due 2017, utilising cash and existing credit facilities arranged as part of the senior credit facility and trade receivables securitisation transactions.

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 December 2013, the Group had fixed an average of 69% of its interest cost on borrowings over the following twelve months.

The Group’s fixed rate debt comprised mainly €500 million 7.75% senior notes due 2019, €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 and US$292.3 million 7.50% senior debentures due 2025. In addition the Group also had €859 million in interest rate swaps with maturity dates ranging from January 2014 to January 2021, €610 million of which mature during the course of 2014.

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 interest rates for these borrowings increase by one percent, the Group’s interest expense would increase, and income before taxes would decrease, by approximately €11 million over the following twelve months. Interest income on the Group’s cash balances would increase by approximately €5 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.

Principal Risks and Uncertainties

Risk assessment and evaluation is an integral part of the management process throughout the Group. Risks are identified, evaluated and appropriate risk management strategies are implemented at each level.

The key business risks are identified by the senior management team. The Board in conjunction with senior management identifies major business risks faced by the Group and determines the appropriate course of action to manage these risks.

The principal risks and uncertainties faced by the Group were outlined in its 2013 interim report and were updated in its 2013 third quarter interim management statement. These reports are available on its website www.smurfitkappa.com.

The principal risks and uncertainties remain substantially the same for the near term except for the following:

  • The Group is exposed to currency exchange rate fluctuations and in addition, to exchange controls in Venezuela and Argentina. In February 2013, the Venezuelan government announced the devaluation of its currency, the Bolivar Fuerte, (‘VEF’) from VEF 4.3 per US dollar to VEF 6.3 (‘Official rate’) per US dollar. The Group currently consolidates its Venezuelan operations (‘SKCV’) at the Official rate. Contrary to general market expectations, in January 2014 the Government announced that it would not be devaluing the Official rate but access to the Official rate would only be available to certain priority sectors. Those not in these priority sectors would access dollars through the Complimentary System of Foreign Currency Acquirement (‘Sicad’). The most recent Sicad rate is VEF 11.36 per US dollar and it is expected that this rate is likely to vary over time. The Group is awaiting clarification on whether it will be part of the priority sector, the non-priority sector or both sectors and is therefore assessing the most appropriate rate at which to consolidate its Venezuelan operations for 2014. Should the Group conclude that the Sicad rate is the most appropriate rate the effect would be to record a reduction in its net assets and cash balances during 2014. Based on the Group‘s balance sheet as at 31 December 2013, and using the most recent Sicad rate (VEF 11.36 per US dollar), the Group would record a reduction in its net assets of approximately €181 million in relation to these operations and a reduction in its cash balances of €76 million.
  • The Venezuelan government have also announced that companies can only seek price increases if they have clearance that their margins are within certain guidelines. There is a risk that if SKCV cannot implement price increases in a timely manner to cover the cost of its increasing raw material and labour costs as a result of inflation and the devaluing currency it would have an adverse effect on its results of operations. In this volatile environment the Group continues to closely monitor developments, assess evolving business risks and actively manage its investments.

Consolidated Income Statement – Twelve Months

    Restated*
12 months to 31-Dec-13 12 months to 31-Dec-12
Unaudited Unaudited
Pre-exceptional 2013   Exceptional 2013   Total 2013 Pre-exceptional 2012   Exceptional 2012   Total 2012
    €m   €m   €m   €m   €m   €m
Revenue 7,957 - 7,957 7,335 - 7,335
Cost of sales (5,649)   (9)   (5,658)   (5,240)   -   (5,240)
Gross profit 2,308 (9) 2,299 2,095 - 2,095
Distribution costs (619) - (619) (579) - (579)
Administrative expenses (1,012) - (1,012) (940) - (940)
Other operating income 2 - 2 36 28 64
Other operating expenses -   (27)   (27)   -   (10)   (10)
Operating profit 679 (36) 643 612 18 630
Finance costs (329) (51) (380) (316) (12) (328)
Finance income 21 8 29 14 - 14
Share of associates’ profit (after tax) 2   -   2   3   -   3
Profit before income tax 373   (79) 294 313   6 319
Income tax expense (98) (68)
Profit for the financial year 196 251
 
Attributable to:
Owners of the parent 188 240
Non-controlling interests 8 11
Profit for the financial year 196 251
 

Earnings per share

Basic earnings per share - cent

82.2

106.9

Diluted earnings per share - cent

80.8

104.2

* Details of the restatement are set out in Note 15

Consolidated Income Statement – Fourth Quarter

    Restated
3 months to 31-Dec-13 3 months to 31-Dec-12
Unaudited Unaudited
Pre-exceptional 2013   Exceptional 2013   Total 2013 Pre-exceptional 2012   Exceptional 2012   Total 2012
    €m   €m   €m   €m   €m   €m
Revenue 2,033 - 2,033 1,824 - 1,824
Cost of sales (1,453)   -   (1,453)   (1,320)   -   (1,320)
Gross profit 580 - 580 504 - 504
Distribution costs (151) - (151) (145) - (145)
Administrative expenses (255) - (255) (241) - (241)
Other operating income 1 - 1 11 - 11
Other operating expenses -   (2)   (2)   -   (10)   (10)
Operating profit 175 (2) 173 129 (10) 119
Finance costs (88) (29) (117) (77) (12) (89)
Finance income 5 1 6 2 - 2
Share of associates’ profit (after tax)

-

  -   -   1   -   1
Profit before income tax 92   (30) 62 55   (22) 33
Income tax expense (3) 28
Profit for the financial period 59 61
 
Attributable to:
Owners of the parent 59 58
Non-controlling interests - 3
Profit for the financial period 59 61
Earnings per share
Basic earnings per share - cent 26.0 25.2
Diluted earnings per share - cent 25.7 24.5

Consolidated Statement of Comprehensive Income – Twelve Months

    Restated*
12 months to 12 months to
31-Dec-13 31-Dec-12
Unaudited Unaudited
    €m   €m
 
Profit for the financial year 196   251
 
Other comprehensive income:
Items that may subsequently be reclassified to profit or loss
Foreign currency translation adjustments:
- Arising in the year (293) 56

- Recycled to Consolidated Income Statement on disposal of subsidiary

- (17)
 
Effective portion of changes in fair value of cash flow hedges:
- Movement out of reserve 17 24
- New fair value adjustments into reserve (4) (13)
- Movement in deferred tax (2) (2)
 
Net change in fair value of available-for-sale financial assets -   1
(282) 49
 
Items which will not be subsequently reclassified to profit or loss
Defined benefit pension plans:
- Actuarial loss (4) (96)
- Movement in deferred tax 2   16
(2) (80)
     
Total other comprehensive expense (284)   (31)
 
Total comprehensive (expense)/income for the financial year (88)   220
 
Attributable to:
Owners of the parent (61) 202
Non-controlling interests (27)   18
Total comprehensive (expense)/income for the financial year (88)   220

* Details of the restatement are set out in Note 15

Consolidated Statement of Comprehensive Income – Fourth Quarter

    Restated
3 months to 3 months to
31-Dec-13 31-Dec-12
Unaudited Unaudited
    €m   €m
 
Profit for the financial period 59   61
 
Other comprehensive income:
Items that may subsequently be reclassified to profit or loss
Foreign currency translation adjustments:
- Arising in the period (50) (35)
 
Effective portion of changes in fair value of cash flow hedges:
- Movement out of reserve 4 7
- New fair value adjustments into reserve (2) (7)
- Movement in deferred tax - (1)
 
Net change in fair value of available-for-sale financial assets -   1
(48) (35)
 
Items which will not be subsequently reclassified to profit or loss
Defined benefit pension plans:
- Actuarial gain 18 40
- Movement in deferred tax -   (6)
18 34
     
Total other comprehensive expense (30)   (1)
 
Total comprehensive income for the financial period 29   60
 
Attributable to:
Owners of the parent 32 60
Non-controlling interests (3)   -
Total comprehensive income for the financial period 29   60

Consolidated Balance Sheet

    Restated*
31-Dec-13 31-Dec-12
Unaudited Unaudited
    €m   €m
ASSETS
Non-current assets
Property, plant and equipment 3,022 3,104
Goodwill and intangible assets 2,326 2,346
Available-for-sale financial assets 27 33
Investment in associates 16 16
Biological assets 107 127
Trade and other receivables 5 4
Derivative financial instruments 1 1
Deferred income tax assets 203   193
5,707   5,824
Current assets
Inventories 712 733
Biological assets 10 6
Trade and other receivables 1,344 1,422
Derivative financial instruments 4 10
Restricted cash 8 15
Cash and cash equivalents 447   447
2,525   2,633
Total assets 8,232   8,457
 
EQUITY
Capital and reserves attributable to the owners of the parent
Equity share capital - -
Share premium 1,979 1,972
Other reserves 208 444
Retained earnings 121   (159)
Total equity attributable to the owners of the parent 2,308 2,257
Non-controlling interests 199   212
Total equity 2,507   2,469
 
LIABILITIES
Non-current liabilities
Borrowings 3,009 3,188
Employee benefits 713 738
Derivative financial instruments 59 65
Deferred income tax liabilities 214 235
Non-current income tax liabilities 17 15
Provisions for liabilities and charges 42 57
Capital grants 12 12
Other payables 9   10
4,075   4,320
Current liabilities
Borrowings 67 66
Trade and other payables 1,525 1,536
Current income tax liabilities 11 4
Derivative financial instruments 33 43
Provisions for liabilities and charges 14   19
1,650   1,668
Total liabilities 5,725   5,988
Total equity and liabilities 8,232   8,457

* Details of the restatement are set out in Note 15

Consolidated Statement of Changes in Equity

  Restated*
Attributable to the owners of the parent   Non-controlling

interests

  Total equity
Equity share capital   Share premium   Other reserves   Retained earnings   Total
    €m   €m   €m   €m   €m   €m   €m
Unaudited
At 1 January 2013 - 1,972 444 (159) 2,257 212 2,469
 
Profit for the financial year - - - 188 188 8 196
Other comprehensive income
Foreign currency translation adjustments - - (258) - (258) (35) (293)
Defined benefit pension plans - - - (2) (2) - (2)
Effective portion of changes in fair value of cash flow hedges -   -   11   -   11   -   11
Total comprehensive (expense)/income for the financial year -   -   (247)   186   (61)   (27)   (88)
 
Shares issued - 7 - - 7 - 7
Hyperinflation adjustment - - - 164 164 20 184
Dividends paid - - - (70) (70) (6) (76)
Share-based payment - - 26 - 26 - 26
Shares acquired by SKG Employee Trust -   -   (15)   -   (15)   -   (15)
At 31 December 2013 -   1,979   208   121   2,308   199   2,507
 
At 1 January 2012 - 1,945 391 (340) 1,996 191 2,187
 
Profit for the financial year - - - 240 240 11 251
Other comprehensive income
Foreign currency translation adjustments - - 30 - 30 9 39
Defined benefit pension plans - - - (78) (78) (2) (80)
Effective portion of changes in fair value of cash flow hedges - - 9 - 9 - 9
Net changes in fair value of available-for-sale financial assets -   -   1   -   1   -   1
Total comprehensive income for the financial year -   -   40   162   202   18   220
 
Shares issued - 27 - - 27 - 27
Hyperinflation adjustment - - - 69 69 9 78
Dividends paid - - - (50) (50) (6) (56)
Share-based payment - - 26 - 26 - 26
Shares acquired by SKG Employee Trust -   -   (13)   -   (13)   -   (13)
At 31 December 2012 -   1,972   444   (159)   2,257   212   2,469

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

* Details of the restatement are set out in Note 15

Consolidated Statement of Cash Flows

    Restated*
12 months to 12 months to
31-Dec-13 31-Dec-12
Unaudited Unaudited
    €m   €m
Cash flows from operating activities
Profit before income tax 294 319
 
Net finance costs 351 314
Depreciation charge 346 332
Impairment of assets 9 -
Amortisation of intangible assets 26 21
Amortisation of capital grants (2) (2)
Share-based payment expense 26 26
Profit on purchase/sale of assets and businesses (6) (30)
Share of associates’ profit (after tax) (2) (3)
Net movement in working capital 24 (19)
Change in biological assets 30 25
Change in employee benefits and other provisions (62) (58)
Other (16)   4
Cash generated from operations 1,018 929
Interest paid (267) (246)
Income taxes paid:
Irish corporation tax (net of tax refunds) paid (2) -
Overseas corporation tax (net of tax refunds) paid (110)   (113)
Net cash inflow from operating activities 639   570
 
Cash flows from investing activities
Interest received 5 7
Business disposals - (1)
Additions to property, plant and equipment and biological assets (349) (316)
Additions to intangible assets (9) (11)
Receipt of capital grants 2 1
Decrease/(increase) in restricted cash 6 (2)
Disposal of property, plant and equipment 8 20
Dividends received from associates 1 2
Purchase of subsidiaries and non-controlling interests (25) (179)
Deferred consideration paid (5)   (1)
Net cash outflow from investing activities (366)   (480)
 
Cash flows from financing activities
Proceeds from issue of new ordinary shares 7 27
Proceeds from bond issuance 400 688
Proceeds from other debt issuance 1,050 -
Purchase of own shares (15) (13)
Increase in interest-bearing borrowings 16 -
Payment of finance leases (6) (8)
Repayment of borrowings (1,577) (1,099)
Derivative termination payments (16) (3)
Deferred debt issue costs (28) (30)
Dividends paid to shareholders (70) (50)
Dividends paid to non-controlling interests (6)   (6)
Net cash outflow from financing activities (245)   (494)
Increase/(decrease) in cash and cash equivalents 28   (404)
 
Reconciliation of opening to closing cash and cash equivalents
Cash and cash equivalents at 1 January 423 825
Currency translation adjustment (27) 2
Increase/(decrease) in cash and cash equivalents 28   (404)
Cash and cash equivalents at 31 December 424   423

An analysis of the Net Movement in Working Capital is provided in Note 11.

* Details of the restatement are set out in Note 15

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 and graphicboard. 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, Ireland.

2. Basis of Preparation

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’) and adopted by the European Union (‘EU’); and, in accordance with Irish law.

The financial information in this report has been prepared in accordance with the Listing Rules of the Irish Stock Exchange and with Group accounting policies. Full details of the accounting policies adopted by the Group are contained in the consolidated financial statements included in the Group’s annual report for the year ended 31 December 2012 which is available on the Group’s website; www.smurfitkappa.com. The accounting policies and methods of computation and presentation adopted in the preparation of the Group financial information are consistent with those described and applied in the annual report for the year ended 31 December 2012 with the exception of the standards described below.

IAS 19 Revised

The IASB has issued a number of amendments to IAS 19, Employee Benefits, which became effective for the Group from 1 January 2013. The main effect on the Group financial statements stems from the removal of the concept of expected return on plan assets. Previously different rates were used for the expected return on plan assets, depending on their nature. Under IAS 19 as revised, the Group determines the net interest expense (or income) for the period by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability (or asset) at the beginning of the financial year. The calculation also takes into account movements in the defined benefit liability for contributions and benefits paid in the period. The difference between the actual return on plan assets and that calculated by using the discount rate is recognised in other comprehensive income. The amendments have been applied retrospectively in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The effects of the restatement of prior period financial information are detailed in Note 15.

Amendments to IAS 1

The amended IAS 1, Presentation of Financial Statements, requires the grouping of items of other comprehensive income that may be reclassified to profit or loss at a future point in time separately from those items which will never be reclassified. The revised standard, which has been adopted by the Group with effect from 1 January 2013, affects presentation only and does not impact the Group’s financial position or performance.

There are a number of other changes to IFRS issued and effective from 1 January 2013. They either do not have an effect on the consolidated financial statements or they are not currently relevant for the Group.

The financial information includes all adjustments that management considers necessary for a fair presentation of such financial information. All such adjustments are of a normal recurring nature. Some tables in the financial information may not add precisely due to rounding.

The financial information presented in this preliminary release does not constitute ‘full group accounts’ under Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations, 1992 of Ireland insofar as such group accounts would have to comply with all of the disclosure and other requirements of those Regulations. The preliminary release was approved by the Board of Directors. The annual report and accounts will be approved by the Board of Directors and reported on by the auditors in due course. The annual accounts reported on by the auditors will not contain quarterly information. Accordingly, the financial information is unaudited. Full Group accounts for the year ended 31 December 2012 received an unqualified audit report and have been filed with the Irish Registrar of Companies.

3. Segmental Analyses

The Group has determined reportable 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 in assessing performance, allocating resources and making strategic decisions. The Group has identified two reportable 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 operations of Smurfit Kappa Orange County (‘SKOC’). Inter-segment revenue is not material. No operating segments have been aggregated for disclosure purposes.

Segment disclosures are based on operating segments identified under IFRS 8. Segment profit is measured based on earnings before interest, tax, depreciation, amortisation, exceptional items and share-based payment expense (‘EBITDA before exceptional items’). Segment assets consist primarily of property, plant and equipment, biological assets, goodwill and intangible assets, inventories, trade and other receivables, deferred income tax assets and cash and cash equivalents. Group centre assets are comprised primarily of available-for-sale financial assets, derivative financial assets, deferred income tax assets, cash and cash equivalents and restricted cash.

    Restated
12 months to 31-Dec-13 12 months to 31-Dec-12
Europe   The Americas   Total Europe   The Americas   Total
    €m   €m   €m   €m   €m   €m
Revenue and Results
Revenue 5,967   1,990   7,957   5,928   1,407   7,335
 
EBITDA before exceptional items 772 357 1,129 840 211 1,051
Segment exceptional items (6)   (21)   (27)   24   (6)   18
EBITDA after exceptional items 766   336 1,102 864   205 1,069
 
Unallocated centre costs (22) (35)
Share-based payment expense (26) (26)
Depreciation and depletion (net) (376) (357)
Amortisation (26) (21)
Impairment of assets (9) -
Finance costs (380) (328)
Finance income 29 14
Share of associates’ profit (after tax) 2 3
Profit before income tax 294 319
Income tax expense (98) (68)
Profit for the financial year 196 251
 
Assets
Segment assets 6,089 1,856 7,945 6,099 1,961 8,060
Investments in associates 2   14 16 2   14 16
Group centre assets 271 381
Total assets 8,232 8,457

3. Segmental Analyses (continued)

    Restated
3 months to 31-Dec-13 3 months to 31-Dec-12
Europe   The Americas   Total Europe   The Americas   Total
    €m   €m   €m   €m   €m   €m
Revenue and Results
Revenue 1,492   541   2,033   1,449   375   1,824
 
EBITDA before exceptional items 192 98 290 199 52 251
Segment exceptional items -   (2)   (2)   (4)   (6)   (10)
EBITDA after exceptional items 192   96 288 195   46 241
 
Unallocated centre costs 1 (12)
Share-based payment expense (6) (6)
Depreciation and depletion (net) (101) (98)
Amortisation (9) (6)
Finance costs (117) (89)
Finance income 6 2
Share of associates’ profit (after tax) - 1
Profit before income tax 62 33
Income tax expense (3) 28
Profit for the financial period 59 61

4. Exceptional Items

  12 months to   12 months to
The following items are regarded as exceptional in nature: 31-Dec-13 31-Dec-12
    €m   €m
 
Gain on disposal of assets and operations - 27
Currency trading loss on Venezuelan Bolivar devaluation (18) -
Impairment loss on property, plant and equipment (9) -
Reorganisation and restructuring costs (9) (3)
Business acquisition costs -   (6)
Exceptional items included in operating profit (36)   18
 
Exceptional finance costs (51) (12)
Exceptional finance income 8   -
Exceptional items included in net finance costs (43)   (12)

Exceptional items charged within operating profit in 2013 amounted to €36 million, €15 million of which related to the temporary closure of the Townsend Hook mill in the UK (comprising an impairment charge of €9 million and reorganisation and restructuring costs of €6 million). A further €3 million of reorganisation costs related to the restructuring of SKOC and the consolidation of the Group’s two plants in Juarez, Mexico, into one plant. A currency trading loss of €18 million was recorded as a result of the devaluation of the Venezuelan Bolivar in February 2013, comprising €12 million booked in the first quarter and an adjustment of €6 million for hyperinflation and re-translation at the 31 December exchange rate. The original loss reflected the higher cost to the Venezuelan operations of discharging its non-Bolivar denominated net payables following the devaluation.

4. Exceptional Items (continued)

Exceptional finance costs in 2013 comprised a charge of €51 million, of which €22 million was in respect of the accelerated amortisation of debt issue costs relating to the senior credit facility and €29 million in respect of the €500 million 7.25% bonds due in 2017, following their early repayment. In the first quarter, a charge of €6 million was booked following the repayment of part of the senior credit facility from the proceeds of January’s €400 million bond issue, with the balance being booked in the third quarter as a result of the repayment of the remainder of the facility, following its refinancing. The €29 million booked in the fourth quarter related entirely to the repayment of the 2017 bonds in November and was comprised of the redemption premium of €19 million, the accelerated unwinding of the unamortised discount of €4 million and €6 million in respect of the accelerated amortisation of debt issue costs.

Exceptional finance income in 2013 amounted to €8 million and comprised a gain of €6 million in Venezuela on the value of US dollar denominated intra-group loans following the devaluation of the Bolivar and an additional €2 million due to its subsequent adjustment for hyperinflation and re-translation.

In 2012, the Group reported an exceptional gain of €27 million in relation to the disposal of assets and operations. This comprised €10 million in respect of the sale of land at SKG’s former Valladolid mill in Spain (operation closed in 2008), together with €18 million relating to the disposal of a company in Slovakia. This gain primarily related to the reclassification (under IFRS) of the cumulative translation differences from the Consolidated Statement of Comprehensive Income to the Consolidated Income Statement. These gains were partially offset by a €1 million post disposal adjustment in respect of the paper sack plants sold to Mondi in 2010.

The business acquisition costs for 2012 of €6 million related to SKG’s acquisition of SKOC. Reorganisation and restructuring costs of €3 million primarily related to additional costs in the recycled containerboard mill in Nanterre, France which was closed in 2011.

Exceptional finance costs of €12 million in 2012 related mainly to the accelerated amortisation of debt issue costs resulting from debt paid down with bond issue proceeds and to the call premium payable on the early repayment of the 2015 bonds.

5. Finance Cost and Income

    Restated
12 months to 12 months to
31-Dec-13 31-Dec-12
    €m   €m
Finance cost:
Interest payable on bank loans and overdrafts 67 119
Interest payable on finance leases and hire purchase contracts 1 1
Interest payable on other borrowings 147 139
Exceptional finance costs associated with debt restructuring 51 12
Unwinding discount element of provision 1 1
Impairment of financial investments 5 -
Foreign currency translation loss on debt 6 9
Fair value loss on derivatives not designated as hedges 8 -
Net interest cost on net pension liability 27 29
Net monetary loss - hyperinflation 67   18
Total finance cost 380   328
 
Finance income:
Other interest receivable (5) (7)
Foreign currency translation gain on debt (14) (4)
Exceptional foreign currency translation gain (8) -
Fair value gain on derivatives not designated as hedges (2)   (3)
Total finance income (29)   (14)
Net finance cost 351   314

6. Income Tax Expense

Income tax expense recognised in the Consolidated Income Statement

    Restated
12 months to 12 months to
31-Dec-13 31-Dec-12
    €m   €m
Current tax:
Europe 50 51
The Americas 72   34
122 85
Deferred tax (24)   (17)
Income tax expense 98   68
 
Current tax is analysed as follows:
Ireland 6 5
Foreign 116   80
122   85

Income tax recognised in the Consolidated Statement of Comprehensive Income

    Restated
12 months to 12 months to
31-Dec-13 31-Dec-12
    €m   €m
Arising on actuarial loss on defined benefit plans (2) (16)
Arising on qualifying derivative cash flow hedges 2   2
-   (14)

The tax expense is €30 million higher than 2012 largely due to increases in and changes to the geographical mix of earnings. The increase in the Americas arises primarily from a full year inclusion of SKOC which was acquired in November 2012 and from increased profitability in Venezuela. While the tax expense in Europe is comparable there are changes within the mix of earnings in the region. There have been lower asset sales and an increase in exceptional expenses which have contributed to lower taxable profits compared to 2012. The tax credit associated with exceptional items in 2013 is €5 million compared to an immaterial tax expense in 2012.

7. Employee Benefits – Defined Benefit Plans

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

    Restated
12 months to 12 months to
31-Dec-13 31-Dec-12
    €m   €m
 
Current service cost 53 33
Past service cost 3 1
Gain on curtailment - (12)
Gain on settlement (2) -
Recognition of net loss 1 2
Net interest cost on net pension liability 27   29
Defined benefit cost 82   53

Included in cost of sales, distribution costs and administrative expenses is a defined benefit cost of €55 million (2012: €24 million). Net interest cost on net pension liability of €27 million (2012: €29 million) is included in finance costs in the Consolidated Income Statement.

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

    Restated
31-Dec-13 31-Dec-12
    €m   €m
Present value of funded or partially funded obligations (1,851) (1,832)
Fair value of plan assets 1,625   1,598
Deficit in funded or partially funded plans (226) (234)
Present value of wholly unfunded obligations (487)   (504)
Net pension liability (713)   (738)

The employee benefits provision has decreased from €738 million at 31 December 2012 to €713 million at 31 December 2013.

8. Earnings Per Share

Basic

Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent by the weighted average number of ordinary shares in issue during the year.

    Restated
12 months to 12 months to
    31-Dec-13   31-Dec-12
Profit attributable to owners of the parent (€ million) 188 240
 
Weighted average number of ordinary shares in issue (million) 229 224
 
Basic earnings per share (cent) 82.2   106.9

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 management equity plans and matching shares issued under the Deferred Annual Bonus Plan.

    Restated
12 months to 12 months to
    31-Dec-13   31-Dec-12
Profit attributable to owners of the parent (€ million) 188 240
 
Weighted average number of ordinary shares in issue (million) 229 224
Potential dilutive ordinary shares assumed (million) 4   6
Diluted weighted average ordinary shares (million) 233   230
 
Diluted earnings per share (cent) 80.8   104.2

Pre-exceptional

    Restated
12 months to 12 months to
    31-Dec-13   31-Dec-12
Profit attributable to owners of the parent (€ million) 188 240
Exceptional items included in profit before income tax (Note 4) (€ million) 79 (6)
Income tax on exceptional items (€ million) (5)   -
Pre-exceptional profit attributable to owners of the parent (€ million) 262   234
 
Weighted average number of ordinary shares in issue (million) 229 224
 
Pre-exceptional basic earnings per share (cent) 114.5   104.1
 
Diluted weighted average ordinary shares (million) 233 230
 
Pre-exceptional diluted earnings per share (cent) 112.7   101.5

9. Dividends

During the year, the final dividend for 2012 of 20.5 cent per share was paid to the holders of ordinary shares. In October, an interim dividend for 2013 of 10.25 cent per share was paid to the holders of ordinary shares.

The Board is recommending a final dividend of 30.75 cent per share for 2013 subject to the approval of the shareholders at the AGM. It is proposed to pay the final dividend on 9 May 2014 to all ordinary shareholders on the share register at the close of business on 11 April 2014. The interim and final dividends are paid in October and May in each year in the approximate proportions of one third to two thirds respectively.

10. Property, Plant and Equipment

  Land and buildings   Plant and equipment   Total
    €m   €m   €m
Year ended 31 December 2013
Opening net book amount (restated) 1,125 1,979 3,104
Reclassifications 48 (55) (7)
Additions 8 330 338
Acquisitions - 7 7
Depreciation charge for the year (51) (295) (346)
Impairments (2) (7) (9)
Retirements and disposals (1) (2) (3)
Hyperinflation adjustment 41 43 84
Foreign currency translation adjustment (61)   (85)   (146)
At 31 December 2013 1,107   1,915   3,022
 
Year ended 31 December 2012
Opening net book amount 1,115 1,858 2,973
Reclassifications 10 (15) (5)
Additions 13 247 260
Acquisitions (restated) 7 140 147
Depreciation charge for the year (44) (288) (332)
Retirements and disposals (5) (2) (7)
Hyperinflation adjustment 17 19 36
Foreign currency translation adjustment 12   20   32
At 31 December 2012 (restated) 1,125   1,979   3,104

11. Net Movement in Working Capital

  12 months to   12 months to
31-Dec-13 31-Dec-12
    €m   €m
 
Change in inventories (23) 2
Change in trade and other receivables 5 (23)
Change in trade and other payables 42   2
Net movement in working capital 24   (19)

12. Analysis of Net Debt

  31-Dec-13   31-Dec-12
    €m   €m
Senior credit facility:
Revolving credit facility(1) – interest at relevant interbank rate + 3.25% - (7)
Tranche B term loan(2a) – interest at relevant interbank rate + 3.625% - 550
Tranche C term loan(2b) – interest at relevant interbank rate + 3.875% - 556
Unsecured senior credit facility:
Revolving credit facility(3) – interest at relevant interbank rate + 2%(8) 119 -
Facility A term loan(4) – interest at relevant interbank rate + 2.25%(8) 740 -
US$292.3 million 7.50% senior debentures due 2025 (including accrued interest) 213 222
Bank loans and overdrafts 67 65
Cash (455) (462)
2015 receivables securitisation variable funding notes 203 197
2018 receivables securitisation variable funding notes 173 -
€500 million 7.25% senior notes due 2017 (including accrued interest) (5) - 492
2018 senior notes (including accrued interest) (6) 414 423
€500 million 7.75% senior notes due 2019 (including accrued interest) 495 494
€400 million 4.125% senior notes due 2020 (including accrued interest) 401 -
€250 million senior floating rate notes due 2020 (including accrued interest)(7) 247   247
Net debt before finance leases 2,617 2,777
Finance leases 4   8
Net debt including leases 2,621 2,785
Balance of revolving credit facility reclassified to debtors -   7
Net debt after reclassification 2,621   2,792
(1)   Revolving credit facility of €525 million (available under the senior credit facility) due to be repaid in 2016.
This was repaid on 24 July 2013.
(2a) Tranche B term loan due to be repaid in 2016.
€193.9 million prepaid January - April 2013. The remaining loans were fully repaid on 24 July 2013 from the proceeds of the unsecured senior credit facility.
(2b) Tranche C term loan due to be repaid in 2017.
€197.1 million prepaid January - April 2013. The remaining loans were fully repaid on 24 July 2013 from the proceeds of the unsecured senior credit facility.
(3) Revolving credit facility ('RCF') of €625 million (available under the unsecured senior credit facility) due to be repaid in 2018.

 

(a) Revolver loans - €125 million (b) drawn under ancillary facilities and facilities supported by letters of credit - €0.3 million and (c) other operational facilities including letters of credit €20.6 million.

(4) Facility A term loan (‘Facility A’) due to be repaid in certain instalments from 2016 to 2018.
(5) €500 million 7.25% notes due 2017 were repaid in full in November 2013.
(6) €200 million 5.125% senior notes due 2018 and US$300 million 4.875% senior notes due 2018.
(7) Interest at EURIBOR + 3.5%.
(8) The margins applicable to the unsecured senior credit facility are determined as follows:
Net debt/EBITDA ratio   RCF   Facility A
 
Greater than 3.0 : 1 2.50% 2.75%
3.0 : 1 or less but more than 2.5 : 1 2.00% 2.25%
2.5 : 1 or less but more than 2.0 : 1 1.75% 2.00%
2.0 : 1 or less 1.50% 1.75%

13. Other Reserves

Other reserves included in the Consolidated Statement of Changes in Equity are comprised of the following:

  Reverse acquisition reserve   Cash flow

hedging reserve

  Foreign

currency

translation

reserve

  Share-

based

payment

reserve

  Own shares   Available-for-sale reserve  

 

Total

    €m   €m   €m   €m   €m   €m   €m
 
At 1 January 2013 575 (26) (198) 105 (13) 1 444
Other comprehensive income
Foreign currency translation adjustments - - (258) - - - (258)
Effective portion of changes in fair value of cash flow hedges -   11   -   -   -   -   11
Total other comprehensive income/(expense) -   11   (258)   -   -   -   (247)
 
Share-based payment - - - 26 - - 26
Shares acquired by SKG Employee Trust -   -   -   -   (15)   -   (15)
At 31 December 2013 575   (15)   (456)   131   (28)   1   208
 
At 1 January 2012 575 (35) (228) 79 - - 391
Other comprehensive income
Foreign currency translation adjustments - - 30 - - - 30
Effective portion of changes in fair value of cash flow hedges - 9 - - - - 9
Net change in fair value of available-for-sale financial assets -   -   -   -   -   1   1
Total other comprehensive income -   9   30   -   -   1   40
 
Share-based payment - - - 26 - - 26
Shares acquired by SKG Employee Trust -   -   -   -   (13)   -   (13)
At 31 December 2012 575   (26)   (198)   105   (13)   1   444

14. Venezuela

Hyperinflation

As discussed more fully in the 2012 annual report, Venezuela became hyperinflationary during 2009 when its cumulative inflation rate for the past three years exceeded 100%. As a result, the Group applied the hyperinflationary accounting requirements of IAS 29 – Financial Reporting in Hyperinflationary Economies to its Venezuelan operations at 31 December 2009 and for all subsequent accounting periods.

The index used to reflect current values is derived from a combination of Banco Central de Venezuela’s National Consumer Price Index from its initial publication in December 2007 and the Consumer Price Index for the metropolitan area of Caracas for earlier periods. The level of and movement in the price index at December 2013 and 2012 are as follows:

    31-Dec-13   31-Dec-12
Index at year end   498.1   318.9
Movement in year   56.2%   20.1%

As a result of the entries recorded in respect of hyperinflationary accounting under IFRS, the Consolidated Income Statement is impacted as follows: Revenue €81 million increase (2012: €27 million increase), pre-exceptional EBITDA €19 million increase (2012: €4 million decrease) and profit after taxation €91 million decrease (2012: €48 million decrease). In 2013, a net monetary loss of €67 million (2012: €18 million loss) was recorded in the Consolidated Income Statement. The impact on the Group’s net assets and its total equity is an increase of €104 million (2012: €33 million increase).

Devaluation

On 8 February 2013, the Venezuelan government announced the devaluation of its currency, the Bolivar Fuerte (‘VEF’) and the termination of the SITME transaction system. The official exchange rate was changed from VEF 4.3 per US dollar to VEF 6.3 per US dollar (‘Official rate’). As a result of the devaluation the Group recorded a reduction in net assets of approximately €142 million in relation to these operations and a reduction in the euro value of the Group’s cash balances of €28 million.

Exchange Rate Mechanisms

Contrary to general market expectations, in January 2014 the Government announced that it would not be devaluing the Official rate but access to the Official rate would only be available to certain priority sectors. Those not in these priority sectors would access dollars through the Complimentary System of Foreign Currency Acquirement (‘Sicad’). The most recent Sicad rate is VEF 11.36 per US dollar and it is expected that this rate is likely to vary over time. The Group is awaiting clarification on whether it will be part of the priority sector, the non-priority sector or both sectors and is therefore assessing the most appropriate rate at which to consolidate its Venezuelan operations for 2014. The Group currently consolidates its Venezuelan operations (‘SKCV’) at the Official rate. Should the Group conclude that the Sicad rate is the most appropriate rate the effect would be to record a reduction in its net assets and cash balances during 2014. Based on the Group‘s balance sheet as at 31 December 2013, and using the most recent Sicad rate (VEF 11.36 per US dollar), the Group would record a reduction in its net assets of approximately €181 million in relation to these operations and a reduction in its cash balances of €76 million.

Control

The nationalisation of foreign owned companies or assets by the Venezuelan government remains a risk. Market value compensation is either negotiated or arbitrated under applicable laws or treaties in these cases. However, the amount and timing of such compensation is necessarily uncertain.

The Group continues to control operations in Venezuela and, as a result, continues to consolidate all of the results and net assets of these operations at year end in accordance with the requirement of IAS 27.

In 2013, the Group’s operations in Venezuela represented approximately 7% (2012: 7%) of its total assets and 16% (2012: 18%) of its net assets. In addition, cumulative foreign translation losses arising on its net investment in these operations amounting to €353 million (2012: €198 million) are included in the foreign exchange translation reserve.

14. Venezuela (continued)

The Venezuelan government have also announced that companies can only seek price increases if they have clearance that their margins are within certain guidelines. There is a risk that if SKCV cannot implement price increases in a timely manner to cover the cost of its increasing raw material and labour costs as a result of inflation and the devaluing currency it would have an adverse effect on its results of operations. In this volatile environment the Group continues to closely monitor developments, assess evolving business risks and actively manage its investments.

15. Restatement of Prior Periods

IAS 19, Employee Benefits

The Group adopted IAS 19 (as revised) from 1 January 2013. In accordance with the previous version of IAS 19, the Consolidated Income Statement included an interest cost based on present value calculations of projected pension payments and finance income based on the expected rates of income generated by plan assets. Generally the rate of expected income on plan assets exceeded the discount rate used in calculating the interest cost. Under the revised standard the interest cost and expected return on plan assets have been replaced with a net interest amount and the rate of return on plan assets is calculated using the same discount rate as that used to determine the present value of plan liabilities. The difference between the lower rate of return on plan assets and the actual return on assets is recognised in other comprehensive income, largely offsetting the higher net interest cost in the income statement. There are other minor changes which the Group have allowed for but they do not have a material effect on the financial statements.

The revised standard has been applied retrospectively in accordance with the transitional provisions of the standard, resulting in the adjustment of prior year financial information. The effects of adoption on previously reported financial information are shown in the tables below.

IFRS 3, Business Combinations

As required under IFRS 3, Business Combinations, the Consolidated Balance Sheet at 31 December 2012 has been restated for final adjustments to the provisional fair values of the SKOC acquisition on 30 November 2012. The effects on previously reported financial information are shown in the tables below.

Impact on Financial Statements

  Previously reported   IAS 19 Adjustments   IFRS 3 Adjustments   Restated
    €m   €m   €m   €m
 
Consolidated Income Statement
 
For the year ended 31 December 2012
Cost of sales (5,238) (2) - (5,240)
Administrative expenses (938) (2) - (940)
Finance costs (399) 71 - (328)
Finance income 93 (79) - 14
Profit before income tax 331 (12) - 319
Income tax expense (71) 3 - (68)
Profit for the financial year 260 (9) - 251
 
Attributable to owners of the parent 249 (9) - 240
 
Basic earnings per share - cent 111.2 (4.3) - 106.9
Diluted earnings per share - cent   108.3   (4.1)   -   104.2
 

Consolidated Statement of Comprehensive Income

 
For the year ended 31 December 2012
Profit for the financial year 260 (9) - 251
Other comprehensive income
Defined benefit pension plans:
- Actuarial loss (108) 12 - (96)
- Movement in deferred tax   19   (3)   -   16
15. Restatement of Prior Periods (continued)
Previously reported IAS 19 Adjustments IFRS 3 Adjustments Restated
    €m   €m   €m   €m
 
Consolidated Balance Sheet
 
At 1 January 2012
Non-current assets
Deferred income tax assets 177 - - 177
Capital and reserves
Retained earnings (341) 1 - (340)
Non-current liabilities
Employee benefits 655 1 - 656
Provisions for liabilities and charges   55   (2)   -   53
 
At 31 December 2012
Non-current assets
Property, plant and equipment 3,076 - 28 3,104
Goodwill and intangible assets 2,336 - 10 2,346
Deferred income tax assets 191 - 2 193
Current assets
Inventories 745 - (12) 733
Capital and reserves
Retained earnings (160) 1 - (159)
Non-current liabilities
Employee benefits 737 1 - 738
Deferred income tax liabilities 211 - 24 235
Provisions for liabilities and charges 59 (2) - 57
Other payables 9 - 1 10
Current liabilities
Trade and other payables 1,534 - 2 1,536
Provisions for liabilities and charges   18   -   1   19
 
 
Consolidated Statement of Cash Flows
 
For the year ended 31 December 2012
Cash flows from operating activities
Profit before income tax 331 (12) - 319
 
Net finance costs 306 8 - 314
Change in employee benefits and other provisions   (62)   4   -   (58)

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

    Restated     Restated
3 months to 3 months to 12 months to 12 months to
31-Dec-13 31-Dec-12 31-Dec-13 31-Dec-12
    €m   €m   €m   €m
 
Profit for the financial period 59 61 196 251
Income tax expense 3 (28) 98 68
Loss/(gain) on disposal of assets and operations - 1 - (27)
Currency trading loss on Venezuelan Bolivar devaluation 2 - 18 -
Impairment loss on property, plant and equipment - - 9 -
Reorganisation and restructuring costs - 3 9 3
Business acquisition costs - 6 - 6
Share of associates’ profit (after tax) - (1) (2) (3)
Net finance costs 111 87 351 314
Share-based payment expense 6 6 26 26
Depreciation, depletion (net) and amortisation 110   104   402   378
EBITDA 291   239   1,107   1,016

Supplementary Historical Financial Information

  Restated        
€m   FY, 2012   Q1, 2013   Q2, 2013   Q3, 2013   Q4, 2013   FY, 2013
 
Group and third party revenue 11,896 3,080 3,285 3,319 3,346 13,030
Third party revenue 7,335 1,889 2,019 2,016 2,033 7,957
EBITDA 1,016 241 271 303 291 1,107
EBITDA margin 13.8% 12.7% 13.4% 15.0% 14.3% 13.9%
Operating profit 630 126 148 195 173 643
Profit before income tax 319 57 70 104 62 294
Free cash flow 282 (23) 95 190 103 365
Basic earnings per share - cent 106.9 14.4 17.7 24.0 26.0 82.2
Weighted average number of shares used in EPS calculation (million) 224 228 229 229 229 229
Net debt 2,792 2,871 2,817 2,630 2,621 2,621
Net debt to EBITDA (LTM) 2.75 2.84 2.74 2.50 2.37 2.37

Short Name: Smurfit Kappa GrpPLC
Category Code: FR
Sequence Number: 407545
Time of Receipt (offset from UTC): 20140211T182639+0000

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