Dublin, Ireland 06 March 2018 -- The Board of Smurfit Kappa has carefully considered the Proposal and believes it is in the best interests of the Group's shareholders and other stakeholders to pursue its future as an independent company, operating as the European and Pan-American leader in paper-based packaging. Smurfit Kappa is a world leader in paper-based packaging with an established track record of consistently delivering strong and improving operating and financial performance.
Smurfit Kappa recently announced record EBITDA for 2017 of €1,240 million and a full year ROCE of 15% and the underlying positive trading conditions have continued into 2018. As part of its year end results, Smurfit Kappa announced an acceleration of its investment programme based on plans to improve its market position and strengthen its integrated model between 2018 and 2021.
The Proposal fails entirely to reflect the Group's strong growth prospects and attractive industry outlook.
Smurfit Kappa is Europe's largest producer of paper-based packaging. Europe contributed 75% of the Group's annual earnings and, according to the Global Corrugated Forecast prepared by NOA PRISM for the International Corrugated Case Association (ICCA), European demand is forecast to grow at a CAGR of between 1.7% and 2.3% up to 2021.
Factors contributing to strong, sustained European demand growth and the emergence of corrugated as a highly sustainable transport and merchandising medium include: the substitution of plastic with paper-based packaging; the significant growth in e-commerce; and growing demand from discount retailers for shelf ready packaging.
Demand in Latin America, again according to the ICCA report, is projected to grow at a CAGR between 3.3% and 4.6% between 2017 and 2021.
With its market leading positions across Europe and as the only major pan-regional producer in Latin America, Smurfit Kappa is uniquely positioned to capitalise upon projected industry growth.
With significant growth opportunities, both organic and through acquisition, the Group has previously announced a range of increased medium-term performance targets including:
an objective to invest an incremental €1.6 billion to capitalise internal and external growth
a medium-term, increased ROCE target of 17%;
a revised, lower target leverage range of 1.75-2.5x; and,
a continuation of an attractive and progressive dividend stream.
The Board, together with its advisers, has carefully evaluated the Proposal and believes it:
is fundamentally opportunistic and conditional;
in no way reflects the Group's true intrinsic business worth or its short, medium or long-term prospects;
would involve our shareholders receiving a high proportion of their consideration in the form of International Paper's shares;
significantly undervalues the Group's asset, franchise and replacement value; and is significantly below the valuations set by recent industry transactions.
Liam O'Mahony, Chairman of Smurfit Kappa said "The Board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic Proposal. It does not reflect the Group's true intrinsic business worth or its prospects. We delivered a record performance in 2017 and underlying trading momentum has continued into 2018. The Group has a proven management team which we believe will deliver significantly greater value for shareholders on a stand-alone basis.
The Board believes that it is in the best interests of all stakeholders for the Group to pursue its future as an independent company, headquartered in Ireland, operating as the European and Pan-American leader in paper-based packaging.
We strongly advise shareholders to take no action."
This announcement is made without the consent of International Paper.
There can be no certainty that any firm offer will be made, nor any certainty as to the terms on which any firm offer might be made by International Paper.
A family owned and operated corrugated packaging solutions company in Illinois is looking for an experienced Maintenance Technician to maintain production and quality by ensuring operation of machinery and mechanical equipment. Relocation and other perks are available to the right candidate who is committed to working third shift. If you are interested or would like more information, please contact Jim Thompson at: firstname.lastname@example.org Ph. 678-206-6010 Cell: 404-822-3412.
Are you an experienced Maintenance Mechanic and would like to work for a family owned and operated corrugated packaging solutions company that invests in the best equipment and technology? If you are interested or would like more information, please contact Jim Thompson at: email@example.com Ph. 678-206-6010 Cell: 404-822-3412.
A leading company in the corrugated solutions packaging business is looking for a experienced Electrician. The right candidate will possess the following skills: electrical; hydraulic; automatic drives (basic component machines 122 to 440 bolts). If you are interested or would like more information, please contact Jim Thompson at: firstname.lastname@example.org Ph. 678-206-6010 Cell: 404-822-3412.
* An expanding company is looking for a Corporate Industrial Electro-Mechanical Engineer near Allentown, PA. Relocation is available. Do you have a storied list of unique electrical and mechanical engineering skills you're ready to take to the next level? Do you envision yourself in a corporate-level leadership role that your experience finally merits? And do you relish any opportunity to troubleshoot and solve real-time problems, all while designing and installing new services and systems that will not only ensure safety, but also turn a potentially hazardous work environment into a continuously thriving one? If you are interested or would like more information, please contact Jim Thompson at: email@example.com Ph. 678-206-6010 Cell: 404-822-3412.
* An expanding company is looking for hands-on Electro Mechanical Maintenance Techs in Conyers, Georgia. Preference will be given to candidates with higher education and additional certificates or training. You must be able to work any shift. Pay is negotiable with excellent perks and benefits. Relocation assistance is available to the right candidate. If you are interested or would like more information, please contact Jim Thompson at: firstname.lastname@example.org Ph. 678-206-6010 Cell: 404-822-3412.
* Working as a Consultant? Looking for some additional challenges with a flexible scheduling? Have a background in Consistency Control? This may be just the opportunity you are looking for: A large multi-national automation company seeks an expert in paper mill consistency technology. This individual will facilitate application support and start-ups in the paper mill environment. In addition, the ability to provide troubleshooting and technical advice and support is strongly desired. The individual should have an understanding of rotary, blade, microwave and optical consistency and the application of these devices in the paper mill. The company sells and maintains a line of consistency transmitters, sample valves and sheet break detectors. These products are marketed in the US through a rep. network. Knowledge of sheet break detection technology is also desirable. Individual must be willing to travel to paper production facilities across the US. Travel & Living Expenses to be reimbursed along with an agreed upon daily per diem rate. For more information, please contact Jim Thompson at: email@example.com Ph. 678-206-6010 Cell: 404-822-3412.
Jim Thompson is back again...with a new book on a taboo subject: the personalities in the pulp & paper industry. Jim has written in the past on many subjects based on his four plus decades in the worldwide pulp and paper industry. This new book is packed full of information valuable to the senior member of the industry as well as the recent entrant. A must for every pulp and paper library.