ISE:SK3

Stock Analysis Report

Smurfit Kappa Group

Executive Summary

Smurfit Kappa Group plc, together with its subsidiaries, manufactures, distributes, and sells paper-based packaging products.

Snowflake

Fundamentals

Second-rate dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Smurfit Kappa Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.2%

SK3

1.5%

IE Packaging

3.9%

IE Market


1 Year Return

-0.5%

SK3

3.7%

IE Packaging

2.4%

IE Market

Return vs Industry: SK3 underperformed the Irish Packaging industry which returned 3.7% over the past year.

Return vs Market: SK3 underperformed the Irish Market which returned 2.4% over the past year.


Shareholder returns

SK3IndustryMarket
7 Day4.2%1.5%3.9%
30 Day-4.8%-2.0%2.6%
90 Day-2.1%0.1%-0.2%
1 Year3.3%-0.5%7.1%3.7%4.6%2.4%
3 Year58.9%44.2%22.6%10.0%20.1%14.3%
5 Year113.7%83.8%100.3%66.4%82.1%66.8%

Price Volatility Vs. Market

How volatile is Smurfit Kappa Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Smurfit Kappa Group undervalued compared to its fair value and its price relative to the market?

22.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SK3 (€28.4) is trading below our estimate of fair value (€36.69)

Significantly Undervalued: SK3 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SK3 is unprofitable, so we can't compare its PE Ratio to the Packaging industry average.

PE vs Market: SK3 is unprofitable, so we can't compare its PE Ratio to the Irish market.


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate SK3's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SK3 is overvalued based on its PB Ratio (2.3x) compared to the XE Packaging industry average (1.6x).


Next Steps

Future Growth

How is Smurfit Kappa Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

34.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SK3 is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: SK3 is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: SK3 is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: SK3's revenue (2.1% per year) is forecast to grow slower than the Irish market (4.2% per year).

High Growth Revenue: SK3's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SK3's Return on Equity is forecast to be low in 3 years time (17.7%).


Next Steps

Past Performance

How has Smurfit Kappa Group performed over the past 5 years?

-30.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SK3 is unprofitable, and losses have increased over the past 5 years at a rate of -30.7% per year.

Accelerating Growth: Unable to compare SK3's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SK3 is unprofitable, making it difficult to compare its past year earnings growth to the Packaging industry (4%).


Return on Equity

High ROE: SK3 has a negative Return on Equity (-20.54%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: SK3 is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: SK3 is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Smurfit Kappa Group's financial position?


Financial Position Analysis

Short Term Liabilities: SK3's short term assets (€3.0B) exceeds its short term liabilities (€2.5B)

Long Term Liabilities: SK3's short term assets (3.0B) do not cover its long term liabilities (4.6B)


Debt to Equity History and Analysis

Debt Level: SK3's debt to equity ratio (125.3%) is considered high

Reducing Debt: SK3's debt to equity ratio has reduced from 148.9% to 125.3% over the past 5 years.

Debt Coverage: SK3's debt is well covered by operating cash flow (30.9%).

Interest Coverage: SK3 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: SK3 has a high level of physical assets or inventory.

Debt Coverage by Assets: SK3's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Smurfit Kappa Group's current dividend yield, its reliability and sustainability?

3.44%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%2.4%markettop25%4.0%industryaverage3.1%forecastin3Years3.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SK3's dividend (3.44%) is higher than the bottom 25% of dividend payers in the Irish market (2.37%).

High Dividend: SK3's dividend (3.44%) is low compared to the top 25% of dividend payers in the Irish market (4.05%).

Stable Dividend: SK3's dividend payments have been volatile in the past 10 years.

Growing Dividend: SK3's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: SK3 is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: SK3's dividends in 3 years are forecast to be well covered by earnings (40% payout ratio).


Next Steps

Management

What is the CEO of Smurfit Kappa Group's salary, the management and board of directors tenure and is there insider trading?

4.9yrs

Average management tenure


CEO

Tony J. Smurfit (56yo)

4.1yrs

Tenure

€2,167,000

Compensation

Mr. Anthony Paul J. Smurfit, also known as Tony, has been Group Chief Executive Officer of Smurfit Kappa Group plc since September 1, 2015. Mr. Smurfit served as the Chief Operating Officer of Smurfit Kapp ...


CEO Compensation Analysis

Compensation vs. Market: Tony's total compensation ($USD2.39M) is about average for companies of similar size in the Irish market ($USD2.25M).

Compensation vs Earnings: Tony's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

4.9yrs

Average Tenure

57yo

Average Age

Experienced Management: SK3's management team is considered experienced (4.9 years average tenure).


Board Age and Tenure

4.2yrs

Average Tenure

63.5yo

Average Age

Experienced Board: SK3's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€248,57617 Dec 18
W. I. O'Mahony
EntityIndividual
Shares10,000
Max Price€24.86
Buy€200,34010 Dec 18
Irial Finan
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares9,000
Max Price€22.26

Ownership Breakdown


Management Team

  • Tony J. Smurfit (56yo)

    Group CEO & Director

    • Tenure: 4.1yrs
    • Compensation: €2.17m
  • Paul Regan (56yo)

    Group Treasurer

    • Tenure: 24.8yrs
  • Michael O'Riordan (62yo)

    Group Company Secretary

    • Tenure: 19.8yrs
  • Brian Marshall (62yo)

    Group General Counsel

    • Tenure: 20.8yrs
  • R. Juan Guillermo Castañeda (58yo)

    Chief Executive Officer of the Americas

    • Tenure: 5.8yrs
  • Ken Bowles (48yo)

    Group CFO & Director

    • Tenure: 2.8yrs
    • Compensation: €1.17m
  • Laurent Sellier

    Chief Operations Officer of Paper Europe

    • Tenure: 4yrs
  • Steven Stoffer (61yo)

    Group Vice President Development

    • Tenure: 14.8yrs
  • Sharon Whitehead (45yo)

    Group Vice President Human Resources

    • Tenure: 0.8yrs
  • Ruth Cosgrove

    Group Director of Communications

    • Tenure: 0.8yrs

Board Members

  • Frits Beurskens (72yo)

    Non-Executive Director

    • Tenure: 13.8yrs
    • Compensation: €135.00k
  • Christel Bories (55yo)

    Independent Non-Executive Director

    • Tenure: 6.9yrs
    • Compensation: €90.00k
  • Jim Lawrence (67yo)

    Independent Non-Executive Director

    • Tenure: 4yrs
    • Compensation: €90.00k
  • Tony J. Smurfit (56yo)

    Group CEO & Director

    • Tenure: 4.1yrs
    • Compensation: €2.17m
  • Irial Finan (62yo)

    Independent Chairman

    • Tenure: 0.4yrs
    • Compensation: €130.00k
  • John Moloney (65yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: €90.00k
  • Gonzalo Restrepo López (68yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: €90.00k
  • Carol Fairweather (58yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: €117.00k
  • Roberto Newell García (71yo)

    Senior Independent Director

    • Tenure: 2.4yrs
    • Compensation: €130.00k
  • Ken Bowles (48yo)

    Group CFO & Director

    • Tenure: 2.8yrs
    • Compensation: €1.17m

Company Information

Smurfit Kappa Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smurfit Kappa Group plc
  • Ticker: SK3
  • Exchange: ISE
  • Founded: 1934
  • Industry: Paper Packaging
  • Sector: Materials
  • Market Cap: €6.724b
  • Shares outstanding: 236.77m
  • Website: https://www.smurfitkappa.com

Number of Employees


Location

  • Smurfit Kappa Group plc
  • Beech Hill
  • Clonskeagh
  • Dublin
  • Co. Dublin
  • 4
  • Ireland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SK3ISE (Irish Stock Exchange)YesNew Ordinary SharesIEEURMar 2007
SKGLSE (London Stock Exchange)YesNew Ordinary SharesGBGBPMar 2007
SK3DB (Deutsche Boerse AG)YesNew Ordinary SharesDEEURMar 2007
SMFT.FOTCPK (Pink Sheets LLC)YesNew Ordinary SharesUSUSDMar 2007
SK3IBATS-CHIXE (BATS 'Chi-X Europe')YesNew Ordinary SharesGBEURMar 2007
SKGLBATS-CHIXE (BATS 'Chi-X Europe')YesNew Ordinary SharesGBGBPMar 2007
SMFK.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDApr 2012

Biography

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 c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 20:52
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.