GICS Sector : Consumer Cyclical
Mayr-Melnhof Karton AG manufactures and sells cartonboard and folding cartons in Europe and internationally.It operates in two segments, MM Board & Paper and MM Packaging.The MM Board & Paper segment manufactures and markets various grades of cartonboard products, such as coated cartonboard produced from paper for recycling, as well as virgin fiber based cartonboard.
Mayr-Melnhof Karton AG reported mixed results for 2024, with revenues stabilizing at EUR 3.2 billion, slightly down compared to the previous year. Despite challenges in the market, the company managed to improve its EBITDA by 11% to EUR 420 million, driven by cost optimization initiatives. However, EBIT remained flat at EUR 310 million, reflecting margin pressures across key segments. The company’s ability to stabilize its financial performance amid a challenging environment highlights its operational resilience. Earnings per share (EPS) rose by 15% to EUR 3.80, supported by lower tax rates and share buybacks, though this figure still lags behind sector peers.
Publication Date: Mar -19
The company’s Fit-for-Future program, initiated in 2023, has started to deliver measurable savings, particularly in the Board and Paper division, where volumes increased by 17% despite margin compression. As noted by CEO Peter Oswald, the program focuses on sustainable cost reductions rather than aggressive cuts, emphasizing innovation and efficiency. The closure of a competitor’s mill in Spain is expected to alleviate pricing pressures in the coming quarters, potentially stabilizing the market. Additionally, the company has made progress in restructuring its Pharma and Healthcare Packaging division, though this segment remains under pressure due to ongoing cost challenges and market competition.
From a valuation perspective, the company’s trailing price-to-earnings (PE) ratio of 35.17 suggests that investors are pricing in expectations for future growth, though this figure is elevated compared to historical averages. The price-to-sales (PS) ratio of 0.42 indicates that the stock is trading below its peers, suggesting potential undervaluation. The dividend yield of 1.78% is modest, though the company’s commitment to a 20% dividend increase to EUR 1.80 per share signals its intent to return capital to shareholders. The free cash flow yield of 18.96% underscores the company’s strong cash generation capabilities, providing a buffer against market volatility.
In conclusion, Mayr-Melnhof Karton AG demonstrated resilience in 2024, navigating a challenging market environment through strategic initiatives and operational efficiency. While the road ahead is fraught with risks, the company’s focus on cost savings, market stabilization, and shareholder returns positions it to navigate near-term challenges and capitalize on long-term growth opportunities.
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Slightly higher growth is expected due to the increasing demand for sustainable packaging solutions and the segment's strong position in the market.
Higher growth is expected due to the increasing demand for premium packaging solutions and the segment's ability to innovate and adapt to changing consumer preferences.
Steady growth is expected due to the stable demand for pharmaceuticals and healthcare products, and the segment's focus on providing compliant packaging solutions.
As this segment represents eliminations, it is not expected to grow or contribute to the overall revenue.
A high-quality, multi-layered paperboard used for packaging of food, cosmetics, and pharmaceutical products
A sustainable, eco-friendly paperboard made from recycled fibers, used for packaging of food, cosmetics, and pharmaceutical products
A cost-effective, eco-friendly paperboard made from recycled fibers, used for packaging of food, cosmetics, and pharmaceutical products
A high-quality, solid paperboard used for packaging of premium food, cosmetics, and pharmaceutical products
A specialized paperboard used for packaging of fragile or heavy products, such as electronics and machinery
The threat of substitutes for Mayr-Melnhof Karton AG is moderate due to the availability of alternative packaging materials and the increasing trend of sustainable packaging.
The bargaining power of customers is high due to the concentration of major customers in the industry, giving them significant negotiating power over prices and terms.
The bargaining power of suppliers is low due to the availability of multiple suppliers and the company's significant purchasing power.
The threat of new entrants is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles.
The intensity of rivalry is high due to the competitive nature of the industry, with multiple players competing for market share.
| Value | |
|---|---|
| Debt Weight | 49.04% |
| Debt Cost | 4.45% |
| Equity Weight | 50.96% |
| Equity Cost | 6.73% |
| WACC | 5.62% |
| Leverage | 96.25% |
Value: 4.5
Growth: 5.1
Quality: 7.2
Yield: 7.5
Momentum: 3.0
Volatility: 8.3
1-Year Total Return ->
Value: 7.4
Growth: 5.3
Quality: 4.4
Yield: 3.8
Momentum: 4.0
Volatility: 7.7
1-Year Total Return ->
Value: 6.4
Growth: 4.9
Quality: 2.7
Yield: 10.0
Momentum: 5.5
Volatility: 2.0
1-Year Total Return ->
Value: 4.8
Growth: 3.3
Quality: 3.2
Yield: 8.8
Momentum: 1.0
Volatility: 7.7
1-Year Total Return ->
Value: 5.9
Growth: 5.3
Quality: 3.9
Yield: 6.2
Momentum: 0.0
Volatility: 3.7
1-Year Total Return ->
Value: 9.0
Growth: 1.1
Quality: 3.2
Yield: 5.6
Momentum: 0.0
Volatility: 3.3
1-Year Total Return ->