Smurfit Kappa chief's salary drops 5pc to €2.2m
Smurfit Kappa chief executive Gary McGann's pay package dipped 5pc to €2.2m last year, as earnings at Europe's largest cardboard box maker slid by more than a fifth.
However, the stock staged a 242pc rally over the course of 2009 as the group restructured its €3bn-plus debt mountain -- putting paid to concerns it would breach banking covenants.
Finance director Ian Curley's remuneration fell to €1.2m from €1.3m for the previous year, while Tony Smurfit Jr, group chief operations officer, saw his pay package slip to almost €1.4m from €1.5m.
The group reported in February that its earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 21pc last year to €741m, as reduced demand and lower pricing was somewhat offset by cost-cutting and operating-efficiency drives.
It reiterated in its annual report that it "expects to deliver meaningful overall EBITDA growth in 2010".
The consensus call among analysts is for the group's EBITDA to jump 12pc this year to almost €830m.
On the demand side, Smurfit Kappa said that return to positive sales volume growth in the last two months of 2009 has continued, with the group continuing to see improving order books.
The group has also continued to recover higher fibre input costs, helped as major European players in the industry have been disciplined in building up inventory levels.
But it warned: "The sustainability of the expected recovery is dependent on continuing supply-side discipline in the European market, bearing in mind the start-up of a new containerboard machine in the second quarter of 2010."
A vertically-integrated group, Smurfit Kappa's system of mills and plans produce containerboard, which in turn is converted into corrugated boxes, the group's end product.
The group was referring to rival Progroup, which fired up a huge 650,000 tonne containerboard machine in Germany last month. Output from the plant is expected to be ramped over the course of the current quarter.
Smurfit Kappa aims to take out €90m of costs this year. This led it to recently hike the amount of annual savings it aims to take out of the business over three years to €300m, from €250m.
The annual report also showed that the deficit on group defined benefit pensions widened to €653m last year from €517m at the end of 2008.