Ad-hoc | 31 August 2000 08:42

Ad hoc-Service: Mayr-Melnhof Karton AG 1st HY

Ad hoc-announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— 1ST HALF YEAR 2000 – US GAAP SUBSTANTIAL RISE IN SALES AND EARNINGS * Operating profit +44 %, Pre-tax profit +51% Net income +59 %, Sales +21% * Strong upswing in demand leads to full utilization of capacities in both Divisions * Massive rise in raw materials costs compensated by increased productivity and higher prices * Positive outlook for 2000 Beginning with the first half-year 2000, Group reporting will exclusively be in accordance with US GAAP. In order to accommodate an efficient transition, US GAAP accounts for 1999 have also been published and are available at the Company’s headquarters and the Group’s website http://www.mayr- melnhof.com. GROUP KEY INDICATORS – US GAAP Consolidated, in EUR millions 1-6/2000 1-6/1999 1) +/- Sales 527.0 434.3 +21.3% Operating profit 55.5 38.5 +44.2% Operating margin 10.5% 8.9% Pre-tax profit 52.7 34.9 +51.0% Net income 33.0 20.7 +59.4% in % of sales 6.3% 4.8% Earnings per share (in EUR) 2.75 1.73 1) pro forma Due to a strengthened economic climate in Western Europe and the recovery in Eastern European and overseas markets, the Mayr-Melnhof Group registered excellent demand for cartonboard and folding cartons, along with a full utilization of capacities during the first half-year 2000. Site optimizations and investments in the latest technology led to the expected increase in productivity and quality, further strengthening Mayr-Melnhof’s leading position in the two divisions. Due to the increased level of productivity throughout our Group and the consequent application of the necessary price increases, it was possible to compensate the rapid increase in raw materials prices and to achieve very satisfying results for the first half-year 2000. Due to a large increase in volume and higher prices, consolidated sales amounted to EUR 527 million, exceeding the first half-year 1999 by 21.3%. The operating result totaled EUR 55.5 million. This represents an increase of 44.2% compared to the previous year and led to an operating margin of 10.5% (first half of 1999: 8.9%). Income before income taxes and minorities increased by 51%, reaching EUR 52.7 million. The Group’s tax rate was approximately 36% (first half of 1999: 40%). In summary, the Mayr-Melnhof Group achieved a net income of EUR 33 million. This represents an increase of 59.4%. At 12.6% and 18.5%, both return on equity and return on capital employed exceeded the 1999 figures of 9.9% and 15.2% respectively. Capital investments amounted to EUR 31.3 million (first half of 1999: EUR 38.5 million). The largest investment was the rebuilding of board machine III at the Kolicevo mill. With an equity ratio of 45.9% (1999: 46.4%) and net debt to equity totaling 12.1% (1999: 13.8%), the financing of the Group remains to be structured on a solid basis. DIVISIONS CARTONBOARD in EUR millions, US GAAP 1-6/2000 1-6/1999 +/- Sales 347.7 285.2 +21.9% Operating profit 41.6 29.2 +42.5% Operating margin 12.0% 10.2% Tonnage produced (in 000’s of tons) 648 583 +11.1% PACKAGING in EUR millions, US GAAP 1-6/2000 1-6/1999 +/- Sales 226.2 181.9 +24.4% Operating profit 13.9 9.3 +49.5% Operating margin 6.1% 5.1% Tonnage converted (in 000’s of tons) 162 132 +22.7% POSITIVE OUTLOOK FOR 2000 Due to the favorable order situation, capacities of both Divisions could also be fully utilized throughout the summer months. At the end of August, the Cartonboard Division’s order backlog amounted to 125,000 tons, still considered to be a very high level. On this basis, full utilization of capacities can also be expected for the 3rd quarter. Due to the European-wide implementation of the price increase since July 1, as well as the favorable utilization of capacities, it should also be possible to compensate the consistently high raw materials prices in the 3rd quarter. Following the extraordinarily strong demand during the first half-year, we expect more cautious planning primarily from customers in non-European markets during the second half. In line with the sustained positive economic climate in Western and Eastern Europe, the Packaging Division is also well-positioned to attain a very good utilization of capacities during the second half-year. The cartonboard price increase which became effective July 1, could be passed on in understanding with the customers. Due to the high utilization of capacities, the timely fulfillment of customer supply remains the most important issue during the coming months. For further information please contact: Stephan Werba, Investor Relations, Mayr-Melnhof Karton AG, Brahmsplatz 6, A-1041 Vienna Tel.: (+43/1) 50136, Fax: (+43/1) 50136-1195 E-Mail: investor.relations@mm-karton.com, Website: http://www.mayr-melnhof.com End of Message