SMURFIT KAPPA GROUP PLC &
Annual Report 2023
Contents | Who we are |
Overview | |
2 | Strategic Framework and |
4 | Financial Highlights 2023 |
What We Do | |
6 | Where We Operate |
8 | Our Sustainability Commitments |
10 | Our Innovative Solutions |
Strategic Report | |
18 | Chair's Statement |
22 | Group Chief Executive O cer's Statement |
26 | Our Business Model |
28 | Our Strategy |
30 | Key Performance Indicators |
34 | Risk Report |
40 | Finance Review |
48 | Stakeholders |
58 | Sustainability |
96 | People |
Governance
112 Board of Directors
116 Corporate Governance Statement
125 Audit Committee Report
129 Remuneration Report
151 Nomination Committee Report
154 Sustainability Committee Report
156 Directors' Report
159 Statement of Directors' Responsibilities
Financial Statements
162 Independent Auditor's Report
168 Consolidated Income Statement
169 Consolidated Statement
of Comprehensive Income
170 Consolidated Balance Sheet
171 Company Balance Sheet
172 Consolidated Statement
of Changes in Equity
173 Company Statement of Changes in Equity
174 Consolidated Statement of Cash Flows
175 Company Statement of Cash Flows
176 Notes to the Consolidated
Financial Statements
Supplementary Information
226 Alternative Performance Measures
232 Shareholder Information
Smurfit Kappa SK ' | ||
a S | 00 company is one | |
of the leading providers of | ||
paper | ased packaging | |
solutions in the world. | ||
e operate across 3 | ||
countries | ith approximately | |
000 employees in over | ||
3 0 production sites ith | ||
revenue of | 3 illion | |
in 2023 |
This report is also available online at www.smurfitkappa.com/investors/ reports-and-presentations
Overview | Strategic Report | Governance | Financial Statements | Supplementary Information |
Annual Report 2023 Smurfit Kappa | 01 |
Overview
Our strategic framework
Our Purpose
At Smurfit Kappa we are proud to create, protect and care.
Our Vision
To be a globally admired business, dynamically and sustainably delivering secure and superior returns for
all stakeholders.
Financial Highlights 2023
Delivered via
Our Strategy
Our objective is to develop long-term customer relationships by providing customers with innovative, sustainable packaging solutions that enhance the customers' prospects
of success in their end markets.
Our Strategic Priorities
arket | Partner | Operational |
Position | of Choice | Excellence |
Investment | Capital |
in People | Allocation |
Revenue | EBITDA* | EBITDA Margin* | |||||||||||||
€- 11,272 | €2,080 | 18.5 | |||||||||||||
(€ million) | (€ million) | (%) | |||||||||||||
12% | -12% | ||||||||||||||
2023 | €11,272 | 2023 | €2,080 | 2023 | 18.5 | ||||||||||
2022 | €12,815 | 2022 | €2,355 | 2022 | 18.4 | ||||||||||
Free Cash Flow* | Basic Earnings per Share | Pre-exceptional Basic Earnings per Share* | |||||||||||||
€628 | 293.5 | 348.7 | |||||||||||||
(€ million) | (cent) | (cent) | |||||||||||||
+15% | -20% | -21% | |||||||||||||
2023 | €628 | 2023 | 293.5 | 2023 | 348.7 | ||||||||||
2022 | €545 | 2022 | 365.3 | 2022 | 444.1 |
02 Smurfit KappaAnnual Report 2023
Overview | Strategic Report | Governance | Financial Statements | Supplementary Information |
Supported by
Sustainability Strategy
We are committed to being an impactful business, supporting a greener, bluer planet. This means doing the right thing for our people, our communities and the environment, through products and processes that make
a realdi erence for ourcustomersand across our entire value chain.
See pages 58 to 95 for more information
Supported by
People Strategy
We want to be recognised as a globally admired employer of choice. We believe our employees are at the centre of everything we do.
See pages 96 to 109 for more information
Underpinned by
Our Values
We have a strong and positive culture based on our values of:
Safety
Loyalty
Integrity
Respect
These values foster the guiding principles by which we operate:
Teamwork
Entrepreneurship
Inclusion, Diversity and Equality
Rewards and Recognition
Performance Driven Accountability
Net Debt to EBITDA* | Profit before Income Tax | Operating Profit before Exceptional Items | |||||||||||||||
1.4x | €- 1,055 | €1,403 | |||||||||||||||
(times) | (€ million) | (€ million) | |||||||||||||||
18% | -16% | ||||||||||||||||
2023 | 1.4x | 2023 | €1,055 | 2023 | €1,403 | ||||||||||||
2022 | 1.3x | 2022 | €1,293 | 2022 | €1,662 | ||||||||||||
Net Debt* | Return on Capital Employed* | ||||||||||||||||
(€ million) | (%) | ||||||||||||||||
5% | 17.1 | These financial Key Performance Indicators are | |||||||||||||||
not defined under International Financial Reporting | |||||||||||||||||
2,840- | |||||||||||||||||
2023 | €2,840 | 2023 | 17.1 | Standards. Further information in relation to these | |||||||||||||
Alternative Performance Measures is included | |||||||||||||||||
in the Supplementary Information section | |||||||||||||||||
2022 | €2,992 | 2022 | 21.8 | ||||||||||||||
on pages 226 to 231. | |||||||||||||||||
Annual Report 2023 Smurfit Kappa | 03 |
Overview
What we do
A packaging leader in a growth industry
We create innovative and sustainable paper-based packaging solutions for our customers, we protect products in transit and precious resources for future generations while caring for each other, the environment and the planet.
1 | 2 |
Forests
We own approximately 68k hectares
of forest globally, which are FSC® or PEFC certified, promotingeconomicgrowth, protection of biodiversity and ecosystems, and fostering of social equity.
Paper
We manufacture a wide range of papers mainly used for packaging purposes. Our total global paper and board capacity is approximately 8.4 million tonnes
per annum.
04 Smurfit KappaAnnual Report 2023
Overview | Strategic Report | Governance | Financial Statements | Supplementary Information |
3 | 4 |
Packaging
We design, manufacture and supply paper-based packaging to package, promote and protect our customers' products. We manufacture corrugated packaging and also produce solidboard, folding carton and Bag-in-Box.
Recycling
We provide recycling solutions to ensure our customers' corrugated packaging and paperisrecycledresponsibly,e ciently and reliably. Our recycling operations handle some 7.7 million tonnes of recovered paper, bringingvaluablefibresbackintothe paper-based packaging production loop.
Annual Report 2023 Smurfit Kappa | 05 |
Overview
Where we operate
Our global reach
We are one of the largest integrated manufacturers of paper-based packaging solutions in the world. We are located in 22 countries
in Europe, 13 in the Americas and one in Africa. In Europe, we are the leader by production volume in corrugated packaging and containerboard and in Latin America, we are the only large-scalepan-regional player.
Europe | We are the European leader in the production | ||||
Our operations in Europe | |||||
of corrugated packaging, containerboard | |||||
and Bag-in-Box. The Europe segment | |||||
includes mills and plants that primarily | |||||
produce containerboard that is converted | |||||
into corrugated containers. In addition, | |||||
we produce other types of paper, such as | |||||
solidboard, sack kra• paper, MG paper and | |||||
graphic paper; other paper-based packaging, | |||||
such as honeycomb, solidboard packaging and | |||||
folding cartons; and Bag-in-Box packaging. | |||||
Read more on pages 23 to 24 | |||||
2023 Gross Sales Volume | |||||
(million tonnes) | |||||
5 | 1 | ||||
10.7 | 2 | ||||
4 | 3 | ||||
1. | Kraftliner | 1.6 | |||
2. | Recycled containerboard | 3.8 | |||
3. Other paper and board | 0.7 | ||||
4. | Corrugated | 4.5 | |||
5. Other paper-based packaging | 0.1 | ||||
Revenue | |||||
€8.5 | |||||
(billion) | |||||
2022: €9.9 | |||||
2023 | €8.5 | ||||
2022 | €9.9 |
06 Smurfit KappaAnnual Report 2023
Overview | Strategic Report | Governance | Financial Statements | Supplementary Information |
Our Scale and Geographic Diversity
Our large manufacturing footprint provides | 242 | 68 | |
us with a clear point of di erentiation because | Converting plants | Forestry plantations (hectares) | |
the corrugated packaging market is a localised | k | ||
market and therefore converting plants need | |||
to be close to customers (within 300 kms). Our | |||
unique global footprint makes us well placed | 33 | ||
to reliably deliver on customer requirements. | 45 | 35 | |
Other production facilities | Fibre sourcing | Mills | |
The Americas | The Group's operations in the Americas | ||
Our Operations in the Americas | |||
comprise of a system of mills and plants | |||
that primarily produce containerboard | |||
that is converted into corrugated containers. | |||
Our operations in the Americas also include | |||
forestry; other types of paper, such as | |||
boxboard and sack paper; and paper-based | |||
packaging, such as folding cartons, | |||
honeycomb and paper sacks. | |||
Read more on page 24 | |||
2023 Gross Sales Volume | |||
(million tonnes) | |||
4 | 1 |
3.3
3 | 2 | ||
1. | Containerboard | 1.4 | |
2. | Other paper and board | 0.2 | |
3. | Corrugated | 1.5 | |
4. | Other paper-based packaging | 0.2 |
Revenue
€(billion)2.8
2022: €2.9
2023 | €2.8 |
2022 | €2.9 |
Annual Report 2023 Smurfit Kappa | 07 |
Overview
Our sustainability commitments
Globally, citizens are asking tougher questions and asking for more transparency, becoming a strong force in the drive for climate and societal change in recent years. The focus on how we treat our planet, how we create a more inclusive world for everyone and support equality across all communities has never been so high on people's agendas.
Our Better Planet 2050 ('BP2050') Commitments and Progress
Category
Target
Progress in 2023*
Link to sustainability strategy
Link to sustainable development goals ('SDGs')
See page 59 for more information
Climate Change
Net zero
our ambition is to have at least net zero emissions by 2050 with a 55% reduction in fossil fuel emissions intensity by 2030
43.7%
reduction in CO emissions since 2005
Forest
>95%
packaging solutions sold as Chain of Custodycertified tocustomers by 2025
95.5%
packaging solutions sold as Chain of Custodycertified in2023
Water
60%
reduction in Chemical Oxygen Demand intensity by 2025
1%
reduction of our water usage intensity annually
35.7%
reduction in Chemical Oxygen Demand since 2005
1.8%
reduction of our water usage in 2023
- For more details on our progress, please see our Sustainable Development Report 2023 which will be available on our website in March 2024.
08 Smurfit KappaAnnual Report 2023
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Smurfit Kappa Group plc published this content on 15 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 15:04:03 UTC.
