Richard Bourke

Richard Bourke questioned the projected 2030 EBITDA margins, specifically why North America is targeted at 20% while Europe is only 16%, asking if there are structural differences or if Europe is at a different point in the cycle.

Answer

CEO Anthony P. J. Smurfit acknowledged Europe's historical lag due to embedded costs but expressed confidence in exceeding 16%, citing past performance (up to 19%) and current asset quality. EVP and Group CFO Ken Bowles added that Europe offers better capital efficiency, with higher ROCE and free cash flow generation. CEO of EMEA and APAC Saverio Mayer reiterated 16% as an ambitious but achievable target, with potential for higher margins as market conditions improve, especially given Europe's economic recovery potential.

Richard Bourke asked about the structural differences or cycle points that explain why the North American EBITDA margin is projected at 20% by 2030, while Europe is only 16%.

Answer

CEO Anthony P. J. Smurfit acknowledged the question, noting Europe has historically lagged North America by a few points due to embedded costs, but has achieved 19% margins in the past and expects to exceed 16%. CFO Ken Bowles added that Europe offers better return on capital employed and free cash flow generation per dollar of capital, contributing to a strong balance sheet. Saverio Mayer (CEO of EMEA and APAC) reiterated that 16% is an ambitious target, but they expect to surpass it as market conditions improve, especially with potential rebuilding in Europe.