Determination paying off
This week's excellent full-year results from paper and packaging group Smurfit Kappa represent a vindication for its driven chief executive Gary McGann.
Since the company returned to the Stock Exchange in 2007 the Smurfit Kappa share price has gyrated wildly. The shares made their debut at €16.50 in March 2007 and quickly climbed to almost €21 by mid-May of that year.
Then as the Smurfit Kappa reality -- a heavily indebted company operating in a highly cyclical industry with the global economy about to enter into recession -- dawned on investors, the share price tumbled back to earth with a bump.
By late October 2008 the share price had fallen to just €1.09, down almost 95pc on its peak price of just 17 months earlier. Anyone who had bought Smurfit Kappa shares during or in the immediate aftermath of the flotation had been well and truly stuffed.
Matters weren't helped when Smurfit was forced to suspend paying a dividend in 2009, leaving the shares out of bounds for many pension funds.
When the going gets tough the tough get going. In addition to scrapping its dividend Smurfit also raised €1bn from a bond issue and pushed out the repayment dates on its debts to 2012 and 2013.
Mr McGann closed three plants in mainland Europe and gave up his non-executive directorships, including the Dublin Airport Authority and the bank then known as Anglo Irish.
By hunkering down when it did, Smurfit Kappa was in a position to benefit when less efficient competitors shed capacity.
This quickly fed through to the company's bottom line. After recording operating (pre-interest) profits before exceptional items of just €267m in 2009, Smurfit boasted operating profits of €490m in 2010 and €624m in 2011.
At the same time Smurfit Kappa has finally begun to make serious inroads into its debt mountain, repaying €358m in 2011 to bring its net indebtedness down to €2.75bn, a full €800m less than when it was refloated on the Stock Exchange almost five years ago.
The market liked the better-than-expected full-year Smurfit results and at one stage marked the share price up by more than 10pc to €7.30. Still a long way off the post-flotation highs, but moving very much in the right direction.
So who is Gary McGann, the man who has presided over this dramatic transformation?
It would be hard to imagine a greater contrast to his predecessor Michael Smurfit, who built a small Irish paper mill into a global paper and packaging giant. Whereas Mr Smurfit is flamboyant Mr McGann's personal style is very low-key.
However, what both men share, which is probably one of the major reasons that persuaded Mr Smurfit to hire Mr McGann in the first place, is an enormous capacity for hard work.
Unlike Mr Smurfit, who inherited a paper mill from his father, Mr McGann comes from an extremely modest background. Not for him an elite, private rugby-playing school on Dublin's southside followed by a commerce degree at UCD and chartered accountancy.
He was born in 1950 in the West Dublin suburb of Palmerstown and was educated by the Christian Brothers at Colaiste Mhuire on Parnell Square.
While obviously talented he didn't go straight to university. Family circumstances -- his father, a well-known traditional musician, suffered from multiple sclerosis -- dictated that he get a paying job in the civil service instead.
So the young Mr McGann joined the Comptroller & Auditor General's office after leaving school in 1968.
He put his time with the C&AG to good use. Even today C&AG veterans recall Mr McGann's capacity for hard work with awe.
During his eight years in the civil service he studied for a BA at night and qualified as an accountant -- he later picked up a master's degree in management science also. Combining work and study in this way frequently meant putting in 12 or 14-hour days six or seven days a week.
In 1976 Mr McGann left for the private sector, joining telecommunications company Ericsson's Irish operation, becoming its financial controller the following year.
Then in 1988 came the breakthrough move in his career when he was headhunted by drinks firm Gilbeys, now part of Diageo, to be its finance director.
Three years later when he succeeded the legendary David Dand, the man who invented Baileys, as Gilbeys chief executive, it was clear that the boy from the wrong side of the tracks had arrived.
It was while he was at Gilbeys that Mr McGann first encountered Bernie Cahill, who in addition to being Aer Lingus chairman also headed up the Irish operation of Express Dairies, which was also owned by Gilbeys' parent company GrandMet.
In 1994 Mr Cahill, having already dispensed with the services of two chief executives, recruited Mr McGann as Aer Lingus boss.
During his four years in charge, with the help of a £175m (€222m) injection of equity from the State, he returned the airline to profit. However, by the end of his time at Aer Lingus there were reports of tension between himself and Mr Cahill, a notoriously hands-on chairman.
His time at Aer Lingus ended on a sour note. When in May 1998 he informed the Aer Lingus board that he had been appointed chief financial officer of Smurfit Kappa's predecessor company Jefferson Smurfit Group, he gave three months' notice in order to facilitate an orderly transition.
Instead the SIPTU trade union, with which he had frequently clashed during his time at the airline, argued that his position was "untenable" and that it was time for him to move on.
However, it was the intervention of then Public Enterprise Minister Mary O'Rourke in the affair that still rankles.
Instead of thanking Mr McGann for his service to Aer Lingus she went on RTE Radio and stated publicly that it would be best for Aer Lingus if he left quickly. Mr McGann didn't linger and cleared his desk the same day.
Even his many admirers concede that Mr McGann can be blunt to the point of brutality. Despite this he has successfully managed to work with strong, domineering characters such as Mr Cahill and Mr Dand during his career.
But by moving to Smurfit, Mr McGann got to work for Mr Smurfit, beside whom either Mr Cahill or Mr Dand would have been regarded as shrinking violets.
Predictions that the two men would quickly clash proved to be wide of the mark. Instead Mr Smurfit quickly set about grooming Mr McGann as his successor.
Mr McGann was promoted to president and chief operating officer in 1999 with a seat on the Smurfit board following in 2002.
Then in 2002 he succeeded Mr Smurfit as chief executive soon after the €3.4bn buyout of Jefferson Smurfit by US private equity outfit Madison Dearborn.
As chief executive Mr McGann masterminded the 2005 acquisition of Dutch paper and packaging company Kappa, after which the group was renamed Smurfit Kappa, and Smurfit Kappa's return to the Stock Exchange two years later.
Now, after a number of difficult years, Smurfit Kappa is firing on all cylinders once again. With the recession having forced many less efficient competitors out of the market, it has been able to raise prices and increase profits.
A decade after succeeding Michael Smurfit, Mr McGann has finally stamped Smurfit Kappa in his own image.