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1. Company Snapshot

1.a. Company Description

Smurfit Kappa Group plc, together with its subsidiaries, manufactures, distributes, and sells paper-based packaging products.It operates through two segments, Europe and the Americas.The company offers consumer, retail, industrial, e-commerce, heavy-duty corrugated, and hexacomb packaging products; composite cardboard tubes, bags, and sacks; and bag-in-box, a single-use packaging system that comprises films, accessories, bags, taps, and boxes.


It also provides point of sale displays; automated packing lines; various types of containerboards, such as Kraftliners, testliners, and containerboard flutings; and corrugated sheet boards, solid board sheets, folding carton sheet boards, sack Kraft papers, MG Kraft papers, preprint products, agro-papers, technical papers, BanaBag, and Catcher Board MB12.In addition, the company offers recycling solutions to cardboard and paper products.It primarily serves food, beverage, and household consumables sectors.Smurfit Kappa Group plc was founded in 1934 and is headquartered in Dublin, Ireland.

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1.b. Last Insights on SK3

Smurfit Kappa Group Plc's 15.0% performance over the past 3 months can be attributed to strong Q1 FY24 results, driven by a 2.7 billion euro revenue and 18.0% EBITDA margin. The company's solid demand for corrugated packaging, containerboard, and food and beverage consumer packaging, as well as industrial packaging, contributed to its growth. Additionally, the upgrade to a Zacks Rank #1 (Strong Buy) and the announcement of a dividend of $1.29 per share likely boosted investor confidence, leading to the stock's upward trend.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Bullish Smurfit Westrock Insiders Loaded Up On €2.19m Of Stock

Jul -12

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Smurfit Kappa taps ABB for modernisation project at Mexican mill

Jul -09

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Smurfit Kappa announces merger deal with Westrock to take effect

Jul -08

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Endeavour Mining to Replace Smurfit Kappa in FTSE 100 Index

Jul -03

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Stocks Are Defecting to New York. Buy This S&P 500 Shoo-In and Antidote to Nvidia.

Jun -28

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International Paper (IP) Moves Closer to Acquiring DS Smith

Jun -26

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S&P to include Smurfit WestRock in indices, sending Smurfit shares higher - BBG

Jun -19

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WestRock's (WRK) Merger With Smurfit Kappa Gets Shareholders Nod

Jun -14

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Europe

Expected Growth: 3.0%

Smurfit Kappa Group Plc's 3.0% growth in Europe is driven by increasing demand for sustainable packaging, e-commerce growth, and acquisitions. The company's focus on innovative packaging solutions, cost savings initiatives, and strategic expansion into high-growth markets also contribute to its growth.

Americas

Expected Growth: 3.0%

Smurfit Kappa's 3.0% growth in Americas driven by increasing e-commerce demand, rising packaging needs in the food and beverage sector, and strategic acquisitions in the region. Additionally, the company's focus on sustainability and innovative packaging solutions resonates with environmentally conscious consumers, further boosting growth.

7. Detailed Products

Corrugated Packaging

Customized corrugated packaging solutions for protecting and transporting goods

Bag-in-Box

Flexible packaging solutions for wine, olive oil, and other liquids

Paper-Based Packaging

Sustainable paper-based packaging solutions for food, beverage, and consumer goods

Specialty Packaging

Customized packaging solutions for high-value or sensitive products

Supply Chain Services

End-to-end supply chain management and logistics services

Packaging Machinery

Machinery and equipment for packaging and processing

8. Smurfit Kappa Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Smurfit Kappa Group Plc is medium due to the presence of alternative packaging solutions, but the company's focus on sustainable and innovative packaging reduces the threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong relationships with its customers and its ability to provide customized packaging solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on raw materials, but the company's diversified supplier base and long-term contracts mitigate the risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the packaging industry, including the need for significant capital investment and regulatory compliance.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the packaging industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.25%
Debt Cost 6.61%
Equity Weight 59.75%
Equity Cost 8.63%
WACC 7.81%
Leverage 67.36%

11. Quality Control: Smurfit Kappa Group Plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Vidrala

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Value: 5.7

Growth: 7.4

Quality: 7.0

Yield: 3.8

Momentum: 3.0

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Viscofan

A-Score: 5.9/10

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Growth: 5.1

Quality: 7.2

Yield: 7.5

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A-Score: 5.9/10

Value: 6.5

Growth: 5.3

Quality: 3.8

Yield: 8.8

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Volatility: 7.0

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Huhtamaki

A-Score: 5.4/10

Value: 6.4

Growth: 4.9

Quality: 5.4

Yield: 5.6

Momentum: 1.0

Volatility: 9.3

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Amcor

A-Score: 4.8/10

Value: 4.8

Growth: 3.3

Quality: 3.2

Yield: 8.8

Momentum: 1.0

Volatility: 7.7

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Smurfit Kappa

A-Score: 3.3/10

Value: 3.3

Growth: 3.7

Quality: 3.0

Yield: 2.5

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

41.44$

Current Price

41.44$

Potential

-0.00%

Expected Cash-Flows