Smurfit Kappa Group Plc (LON: SKG) have reported strong yearly growth in a trading update provided on Wednesday.

The Dublin based packaging firm said it delivered a “strong performance” in the year-to-date.

For the nine months, ending on September 30th revenue was up 3% to€ 6.85 billion and earnings before interest, tax, depreciation and amortisation 11% higher at €1.26 billion.

The FTSE100 (INDEXFTSE: UKX) listed firm also reported that Ebitda margin increased 140 basis points to 18.3%.

Key metrics have been at, or ahead of, stated targets, said Smurfit. This performance “continues to demonstrate the strength and resilience of the group’s business model”, the company said.

This comes at a good period for Smurfit Kappa, as they seem to have captured a packaging market which is increasingly moving towards eco-trends.

Competitors such as Mondi Plc (LON: MNDI) and International Paper Co (NYSE: IP) will have to respond quickly in these gains that Smurfit Kappa have made.

“While there have been, and continue to be, obvious macro-economic and political challenges, SKG’s very strong performance against this backdrop shows, once again, the quality of our business and the benefits of our geographic diversity,” said Chief Executive Tony Smurfit.

“Consumers are increasingly demanding sustainable packaging solutions and with our unique applications, knowledge and expertise in paper-based packaging we are ideally positioned to take advantage of this mega trend,” he noted.

The change to sustainable packaging will set an example to all firms in the industry, as the rise of eco products continues to be a priority on firms’ agendas.

Notably, American operations also grew approximately 2% with continued EBITDA and EBITDA margin improvement year-on-year.

Steve Miley, a senior market analyst at www.asktraders.com, said: “What’s not to like? Key metrics for Smurfit Kappa were in line with or ahead of stated targets. Whilst the firm isn’t immune to macroeconomic headwinds, the paper packaging firm is finding itself in a increasingly advantageous position.

David O’Brien, equity analyst at Goodbody commented: “Smurfit Kappa reports solid results in Q3 against a backdrop of industry headwinds and well documented macro-economic and political challenges which are impacting other industry players more sharply.

O’Brien concluded “The factors driving Smurfit Kappa’s positive performance are twofold: its integrated business model and continuous drive to innovate set it apart from its peer group. The business is a leader in innovation which enables it to harness key trends including the rise of e-commerce and increasing consumer demand for sustainable packaging solutions. Corrugated demand appears to have picked up in October with the UK noting an up-tick.”

Currently, shares of Smurfit Kappa Group Plc are trading at 2,558p per share. 30/10/19 11:25BST.

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