JSG Funding plc: 2004 Fourth Quarter and Full Year Results
2/17/2005 7:01:00 AM

 

DUBLIN, Ireland, Feb 17, 2005 (BUSINESS WIRE) -- JSG Funding plc ('JSG Funding' or the 'Group') today announced results for the 3 months and year ended December 31, 2004.

          4Q '04 4Q '03 Change 4Q '04 3Q '04 Change Full   Full Change
                                                    Year   Year
                                                    2004   2003
          EUR m  EUR m       % EUR m  EUR m      %  EUR m  EUR m     %
----------------------------------------------------------------------
 
Net sales 1,193  1,174      2% 1,193  1,186     1% 4,805  4,746     1%
 
EBITDA(a)   160    151      6%   160    146    10%   606    627   (3%)
 
EBITDA
 Margin(a) 13.4%  12.8%         13.4%  12.3%        12.6%  13.2%
 
Free cash
 flow        22     35   (37%)    22     82  (73%)   187    178     5%
 
(a)Pre-exceptional EBITDA of
 subsidiaries only
----------------------------------------------------------------------
 
 

Fourth Quarter and Full Year Summary

2004 fourth quarter and full year results reflect continuing difficult market conditions in Europe offset by strong performances in our Latin America operations, aided by more buoyant market conditions there. However, fourth quarter results for Europe did reflect slight upward pricing momentum, particularly in kraftliner. Despite difficult market conditions and broadly unchanged net sales and EBITDA, JSG continues to generate positive free cash flow.

Net sales increased modestly in the fourth quarter and in the full year. EBITDA, before exceptional items, for the fourth quarter of 2004, at EUR 160 million was EUR 9 million higher than in the same period of 2003. This reflects improvements in our Latin American operations and Munksjo's specialty businesses and slightly improved kraftliner pricing in Europe. 2004 full year EBITDA, at EUR 606 million before exceptional items, compares to EUR 627 million in 2003. The decline, year-on-year, reflects an EUR 18 million gain on property sales in 2003. Excluding this gain in 2003, EBITDA is broadly unchanged year-on-year.

The positive impact on 2004 of net acquisitions in 2003, principally Smurfit-Stone's European packaging operations offset by the absence of Smurfit MBI in Canada, was reduced by the effect of the strong euro which negatively impacted the translation of our US dollar earnings from Latin America.

In line with our commitment to address non cash generating businesses we announced the closure of three of our European plants. These are our Cordoba recycled mill in Spain, and our Tamworth Corrugated and Witham Carton plants both in the UK. These plant closures together with other reorganisation actions account for the exceptional reorganisation and restructuring costs of EUR 31 million and EUR 39 million in the fourth quarter and full year respectively. Partly offsetting these costs are exceptional gains on sales of assets and businesses of EUR 7 million and EUR 22 million in the fourth quarter and full year respectively. The gains result mainly from the sale of surplus properties.

While the difficult market conditions in Europe impacted growth in net sales and EBITDA, JSG continues to generate sustainable free cash flow. 2004 free cash flow of EUR 187 million compares to EUR 178 million in 2003. Financing and investment outflows in 2004 amounted to a net EUR 5 million resulting in a net cash inflow of EUR 182 million compared to a deficit of EUR 31 million in 2003.

JSG's net borrowing (including capital leases) was EUR 2,913 million at December 2004 compared to EUR 3,101 million at December 2003.

    Corporate Activity
 
    Asset Sales
 

On December 22, 2004 JSG announced that it had signed a definitive agreement to sell its Munksjo specialty business to The EQT III Fund for approximately EUR 450 million. On December 14, 2004 SCA (Svenska Cellullosa Aktiebolaget) announced that it had agreed to buy the Munksjo Tissue business from JSG for approximately EUR 28 million. The cash generated from these sales will be used to reduce debt.

The Munksjo specialty assets being sold comprise pulp, decor paper, and specialty paper businesses and had sales from operations for 2004 of approximately EUR 480 million. The Munksjo Tissue assets being sold comprise two paper mills producing base paper for tissue and generated sales from operations of approximately EUR 50 million in 2004.

JSG retains the Munksjo containerboard and corrugated assets, located in Norway, Sweden and Poland, which comprise approximately 90,000 tonnes of containerboard and 150,000 tonnes of corrugated capacity.

New Offerings

On January 13, 2005 JSG Funding commenced a tender offer to purchase for cash all outstanding existing 15.5% subordinated notes. All of the euro 15.5% subordinated notes and 99.99% of the dollar 15.5% subordinated notes were tendered. The tender offer was completed on February 14, 2005. In January 2005, JSG Funding completed an offering of EUR 217.5 million and $200 million of 7.75% subordinated cash-pay notes due 2015. JSG Funding applied the proceeds from this offering to fund the purchase of the 15.5% subordinated notes tendered. This new issue lowers JSG Funding's overall cost of capital.

Concurrently with the completion of this offering of notes, JSG Holdings plc, the indirect parent of JSG Funding, completed an offering of EUR 325 million of 11.5% senior PIK notes due 2015, substantially all of the net proceeds of which will be loaned to JSG Packaging Limited, its parent, which, in turn, intends to pay the net proceeds to its shareholders by means of a share capital reduction under Irish law.

    Financial Review
 
    Fourth Quarter 2004: Year-on-year performance
 

Fourth quarter net sales of EUR 1,193 million increased 2% against EUR 1,174 million in the fourth quarter of 2003. Excluding the effect of closures and currency movements, sales increased EUR 34 million or 3% on the comparable period in 2003.

Fourth quarter EBITDA, before exceptional items, of EUR 160 million increased 6% against EUR 151 million in the fourth quarter of 2003. Excluding the effect of closures and currency movements, EBITDA, before exceptional items, increased EUR 11 million or 7% on the comparable period in 2003. EBITDA, before exceptional items, of EUR 160 million represents a margin of 13.4% on net sales against 12.8% in the fourth quarter of 2003. The increased margin in the fourth quarter principally reflects the very strong performance of our Latin American businesses in what has historically been a seasonally moderate last quarter.

Fourth Quarter 2004: Quarter-on-quarter performance

Fourth quarter net sales of EUR 1,193 million increased 1% against EUR 1,186 million in the third quarter of 2004. Excluding the effect of currency movements, sales increased EUR 13 million or 1% on the third quarter.

Fourth quarter EBITDA, before exceptional items, of EUR 160 million increased 10% against EUR 146 million in the third quarter of 2004. Excluding the effect of currency movements, EBITDA, before exceptional items, increased EUR 15 million or 10% on the third quarter. EBITDA, before exceptional items, of EUR 160 million represents a margin of 13.4% on net sales against 12.3% in the third quarter. The fourth quarter EBITDA benefits from the normal annual review and adjustment of accounting provisions.

Full year 2004: Year-on-year performance

2004 full year net sales of EUR 4,805 million increased EUR 59 million or 1% against EUR 4,746 million in 2003. Excluding the effect of acquisitions, disposals and currency movements, sales increased EUR 82 million or 2% on 2003 levels.

2004 EBITDA, before exceptional items, of EUR 606 million decreased 3% against EUR 627 million in 2003. Excluding the effect of acquisitions, disposals and currency movements, EBITDA, before exceptional items, decreased EUR 19 million or 3% on 2003 levels. EBITDA is broadly unchanged year-on-year; the decline year-on-year reflects an EUR 18 million gain on property sales in 2003. Excluding this gain in 2003, EBITDA before exceptional items, of EUR 606 million represents a margin of 12.6% on net sales against 13.2% in 2003. Adjusting 2003 for one-off gains, EBITDA represents a margin of 12.8% on net sales.

    Product Market Overview
 
    Europe
 

European market conditions remained challenging throughout 2004. In addition, despite volume growth in kraftliner, recycled containerboard and corrugated, the price environment remains difficult. The European recycled containerboard industry is experiencing significant capacity additions against a backdrop of modest demand growth which will continue to impact the industry's performance. The industry is also experiencing the shut down of some old, inefficient capacity. JSG continues to focus on reducing costs and further integrating containerboard and corrugated operations. An integrated system will support JSG's margins and protect the cash flow generation of the business in difficult market conditions.

Kraftliner performed better in volume terms and benefited from an improving global supply and demand balance. JSG's kraftliner volumes increased 2% in the fourth quarter and 6% year-on-year which reflects improving market conditions and soft comparisons in 2003. Kraftliner product pricing began to recover in 2004 and a EUR 50 per tonne price increase, announced for September 2004, was progressively implemented during the third and fourth quarters. Fourth quarter kraftliner prices were EUR 37 per tonne higher than those prevailing in 2003. However, average kraftliner prices for the full year were EUR 20 per tonne lower than in 2003.

2004 recycled containerboard volumes, excluding acquisitions, increased 3% on 2003. This 3% increase includes a 6% increase in volumes in France and 4% in the UK. These volume increases reflect an increased level of integration in France and improved third-party sales in the UK. Including acquisitions, volumes increased 12% year-on-year.

Waste-fiber prices, the primary input cost for recycled containerboard, remained broadly unchanged during the fourth quarter. 2004 average waste-fiber prices were EUR 10 per tonne lower than 2003 levels. The recycled containerboard price increase of EUR 50 per tonne, which was announced for October, was partially implemented during the fourth quarter. 2004 average fourth quarter recycled containerboard prices were EUR 7 per tonne higher than the comparable period in 2003. 2004 full year average prices were in-line with 2003 levels.Corrugated volumes were broadly in-line with 2003 levels in the fourth quarter. Excluding acquisitions, 2004 full year volumes increased 1% year-on-year. Including the effect of acquisitions, 2004 full year corrugated volumes increased 12% year-on-year. Competitive market conditions across Europe and unchanged waste-fiber and recycled containerboard prices resulted in static corrugated prices during the quarter.

Corrugated prices, in the fourth quarter, were in line with prices in the same period in 2003. Full year average corrugated prices declined 2% on 2003 levels.

Latin America

JSG's Latin American operations reported record results in 2004. Sales and EBITDA grew in double digits in 2004 in their reporting currency, the US dollar. Latin American containerboard and corrugated volumes both increased approximately 9% year-on-year. Average prices increased 1% and 5% on 2003 levels in containerboard and corrugated respectively.

Our Mexican operations continue to reflect improvements in domestic demand and export demand from the Maquiladora area. This improvement in demand, coupled with our early 2004 internal restructuring, resulted in a strong financial performance from our Mexican operations - particularly in the second half of 2004. Containerboard and corrugated volumes increased 8% and 4% on 2003 levels respectively. Product pricing also improved modestly year-on-year.

The Colombian economy continues to grow modestly. During 2004 the Colombian Peso strengthened against the dollar resulting in significant cost increases in dollar terms; however, volume and price improvements more than offset cost increases. Containerboard and corrugated volumes increased 2% and 8% on 2003 levels respectively.

The Venezuelan economy and currency remain relatively protected and continue to positively impact the results of our operations there. Demand and product pricing remain strong. However, the returns achieved in 2004 may not be sustainable in the longer term. 2004 containerboard and corrugated volumes increased 12% and 25% respectively year-on-year.

Argentina's strong volume growth continued in the fourth quarter. As a consequence, 2004 full year containerboard and corrugated volumes increased 10% and 14% on 2003 levels respectively. Prices in containerboard were broadly unchanged year-on-year, however, a modest increase in corrugated prices contributed to improved financial performance in 2004.

The development of our new corrugated facility in Santiago, Chile, is complete and sales began during the fourth quarter. Initial performance is in line with the Group's expectations.

Fourth Quarter 2004: Cash flows

Fourth quarter 2004 free cash flow of EUR 22 million compares to EUR 35 million in the comparable period in 2003. JSG's subsidiaries generated a pre-tax loss for the quarter of EUR 10 million, however, cash flow benefited from non-cash add backs and from the continued decrease of working capital levels.

Fourth quarter capital expenditure of EUR 65 million represented 108% of depreciation compared to 70% for the first nine months of 2004. This is a typical profile of fourth quarter capital expenditure, as in 2003, where JSG's expenditure level was lower in the first nine months with relatively higher expenditure in the fourth quarter. This resulted in full year expenditure to depreciation ratio of almost 80% - in line with our expectations.

JSG continues to make progress in reducing working capital levels and working capital decreased by EUR 11 million in the quarter. Working capital of EUR 362 million at December 2004 represented 7.6% of annualised net sales compared to 9.1% at December 2003.

JSG reported a cash flow surplus of EUR 19 million compared to EUR 28 million for the same period in 2003. The surplus for the quarter was partly offset, however, by the add-back of non-cash interest accrued.

Currency adjustments were positive during the quarter reflecting the strength of the euro, primarily against the US dollar. In total, net borrowing decreased by EUR 67 million from EUR 2,963 million (EUR 2,991 million including leases) at September 2004 to EUR 2,895 million (EUR 2,913 million including leases) at December 2004.

Full Year 2004: Cash flows

2004 full year free cash flow of EUR 187 million compares to EUR 178 million in 2003. JSG's 2004 free cash flow reflects lower tax payments year-on-year offset by reduced working capital inflow.

We continued to focus on generating cash flow from sales of surplus assets during 2004. Disposals for the year generated an inflow of EUR 34 million including EUR 29 million from the sale of unused property. Cash generation was partly offset in 'Other' by accelerated profit sharing payments to employees of EUR 13 million coupled with a lease bullet payment of EUR 10 million. Changed tax laws in France reduced the length of the deferral period and resulted in accelerating payments to employees in respect of deferred compensation.

Depreciation was higher in 2004, reflecting the acquisition of the former Smurfit-Stone European packaging operations during 2003 and the adjustments to fixed assets effected at the end of 2003 arising from the completion of the fair value exercise. Capital expenditure at EUR 206 million for 2004 represented 79% of depreciation compared to 82% in 2003. This is consistent with JSG's target to control capital expenditure at or close to the 80% level.

Tax payments, at EUR 37 million, were lower than in 2003, reflecting a Dutch tax refund and tax repayments in certain other European countries. These credits were partly offset by higher payments in Latin America as a result of the growth in regional profits. Under the Bosal judgement, JSG received approximately EUR 20 million from the Dutch authorities in 2004.

Financing and investment outflows were modest in 2004 and JSG reported a net cash inflow of approximately EUR 182 million for the year.

The EUR 182 million operating surplus was offset by the add-back of non-cash interest but positively impacted by a currency adjustment of EUR 40 million. As a result, net borrowing decreased by EUR 177 million year-on-year. Net borrowing amounted to EUR 2,895 million (EUR 2,913 million including leases) at December 2004 compared to EUR 3,073 million (EUR 3,101 million including leases) at December 2003.

Summary cash flows for the three months and twelve months to December 2004 and 2003 are set out in the following table:

                             3 Months   3 Months  12 Months 12 Months
                                to          to        to         to
                              Dec 31      Dec 31    Dec 31     Dec 31
                                2004        2003      2004       2003
                                EUR         EUR       EUR        EUR
                              Million     Million   Million    Million
 
----------------------------------------------------------------------
(Loss)/profit before tax -
 subsidiaries                    (10)        (21)       (3)         2
Exceptional items                 16          17         1         11
Depreciation and depletion        61          61       263        253
Goodwill amortization              7          11        38         45
Non cash interest expense         22          15        68         59
Working capital change            11          29        42         63
Capital expenditure              (65)        (81)     (206)      (207)
Change in capital creditors       14          14         7          -
Sale of fixed assets              11           4        34         12
Tax paid                         (17)         (8)      (37)       (59)
Dividends from associates          -           -         3          1
Other                            (28)         (6)      (23)        (2)
----------------------------------------------------------------------
Free cash flow                    22          35       187        178
 
Investments                       (1)         (2)       (6)      (181)
Sale of businesses and
 investments                       3           7         3         36
Dividends paid to minorities      (1)         (1)       (6)        (7)
Deferred debt issue costs         (3)          -        (6)        (8)
Transaction fees                  (1)         (3)       (3)       (21)
Transfer of cash from /(to)
 affiliates                        -          (8)       13        (28)
----------------------------------------------------------------------
Net cash inflow / (outflow)       19          28       182        (31)
Net cash acquired/disposed         -           1         -         56
SSCC inter-company debt
 repaid                            -           -         -        (97)
Non-cash interest accrued        (12)        (11)      (45)       (41)
Currency translation
 adjustments                      60          54        40        152
 
----------------------------------------------------------------------
Decrease in net borrowing     EUR  67     EUR  72  EUR  177    EUR  39
----------------------------------------------------------------------
 
 

Performance Review and Outlook

Gary McGann, Chief Executive Officer, commented, "We are pleased to report record financial results for our Latin American operations. These results have been delivered thanks to the breadth and depth of our management team and must be viewed in the context of the current exchange rate environment. The results vindicate our strategy of managing risk through geographic diversity.

In Europe, we continue to focus on improving performance against a backdrop of continuing economic weakness and significant additional containerboard capacity. Our strengthened team in Europe is managing each of the factors within our control and our continued focus on our customer driven, integrated packaging system, has served to deliver strong cash flow in 2004. Through cost and productivity improvements we also continue to make progress towards the objective of better operating margins at each point of the industry cycle.

During 2004 we made further progress towards maximizing the cash flow generation capability of our business. We will further reduce our cost of capital and improve our cash flow when all of the current corporate initiatives, including asset sales and the debt re-financing, are completed.

The outlook for 2005 continues to reflect ongoing difficult pricing markets in Europe counterbalanced by positive business conditions in Latin America."

Website access to reports

JSG Funding's annual report on Form 20-F, current reports on Form 6-K, the April 2003 registration statement on Form F-4 and all amendments to those reports are made available free of charge through the Registrant's website (www.smurfit-group.com) as soon as practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

JSG Funding plc

Summary Group Profit and Loss
 Account
                    3 Months to 3 Months to 12 Months to  12 Months to
                    Dec 31 2004 Dec 31 2003  Dec 31 2004   Dec 31 2003
                      EUR   000   EUR   000    EUR   000     EUR   000
----------------------------------------------------------------------
Turnover
   Continuing
    operations       1,071,896   1,054,257    4,293,540     4,159,166
   Discontinued
    operations         120,680     119,492      511,542       587,149
----------------------------------------------------------------------
                     1,192,576   1,173,749    4,805,082     4,746,315
Cost of sales          861,489     848,568    3,473,299     3,419,820
----------------------------------------------------------------------
Gross profit           331,087     325,181    1,331,783     1,326,495
Net operating
 expenses              235,513     242,962    1,010,564       982,345
Reorganization and
 restructuring
 costs                  30,750      26,496       39,430        35,006
----------------------------------------------------------------------
Operating profit
 subsidiaries
   Continuing
    operations          52,489      47,638      224,062       261,228
   Discontinued
    operations          12,335       8,085       57,727        47,916
----------------------------------------------------------------------
                        64,824      55,723      281,789       309,144
Share of
 associates'
 operating profit        3,571       2,624       12,611        12,155
----------------------------------------------------------------------
Total operating
 profit                 68,395      58,347      294,400       321,299
----------------------------------------------------------------------
 
   -------------------------------------------------------------------
Profit on sale of
 assets and
 operations              7,101           -       22,173         5,560
----------------------------------------------------------------------
 
Interest income          3,211       3,653        8,335        11,631
Interest expense       (80,785)    (76,509)    (299,338)     (309,368)
Share of
 associates' net
 interest                 (331)       (338)      (1,301)       (2,062)
----------------------------------------------------------------------
Total net interest     (77,905)    (73,194)    (292,304)     (299,799)
----------------------------------------------------------------------
 
   -------------------------------------------------------------------
Other financial
 expense                (4,008)     (4,063)     (15,718)      (15,266)
----------------------------------------------------------------------
 
(Loss) / profit
 before taxation        (6,417)    (18,910)       8,551        11,794
Taxation
   Group                (2,697)      7,654       24,375        59,287
   Share of
    associates             878       1,250        2,598         3,067
----------------------------------------------------------------------
                        (1,819)      8,904       26,973        62,354
----------------------------------------------------------------------
 
(Loss) after
 taxation               (4,598)    (27,814)     (18,422)      (50,560)
Equity minority
 interests               4,952       3,715       16,067        16,768
----------------------------------------------------------------------
Net loss           EUR  (9,550)       EUR  EUR  (34,489) EUR  (67,328)
                                   (31,529)
----------------------------------------------------------------------
 
 

Companies (Amendment) Act, 1986

The financial statements in this report do not comprise 'full group accounts' within the meaning of Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations, 1992 of Ireland insofar as such group accounts would have to comply with all of the disclosure and other requirements of those Regulations. Full group accounts for JSG Funding for the year ended December 31, 2003 have received an unqualified audit report and have been filed with the Irish Registrar of Companies.

JSG Funding plc

Segmental Analyses
 
Sales - third party
                    3 Months to  3 Months to 12 Months to 12 Months to
                    Dec 31 2004  Dec 31 2003  Dec 31 2004  Dec 31 2003
                      EUR   000    EUR   000    EUR   000    EUR   000
----------------------------------------------------------------------
 
Packaging              772,787      762,846    3,094,045    2,968,784
Specialties            237,012      236,962    1,008,477      991,874
----------------------------------------------------------------------
Europe               1,009,799      999,808    4,102,522    3,960,658
United States and
 Canada                      -            -            -      104,355
Latin America          182,777      173,941      702,560      681,302
----------------------------------------------------------------------
                          EUR          EUR          EUR          EUR
                      1,192,576    1,173,749    4,805,082    4,746,315
----------------------------------------------------------------------
 
Share of associates'
 third party sales  EUR  23,460  EUR  22,704  EUR  81,213  EUR  80,074
----------------------------------------------------------------------
 
Profit before
 taxation
                   3 Months to  3 Months to 12 Months to  12 Months to
                   Dec 31 2004  Dec 31 2003  Dec 31 2004   Dec 31 2003
                     EUR   000    EUR   000    EUR   000     EUR   000
----------------------------------------------------------------------
 
Packaging              51,784       53,916      155,562       213,918
Specialties            22,007       14,693       96,777        88,020
Associates              3,007        2,206       10,064         9,447
----------------------------------------------------------------------
Europe                 76,798       70,815      262,403       311,385
----------------------------------------------------------------------
 
Packaging                   -            -            -         7,775
----------------------------------------------------------------------
United States and
 Canada                     -            -            -         7,775
----------------------------------------------------------------------
 
Packaging              28,487       24,429      116,359        86,180
Associates                564          418        2,547           506
----------------------------------------------------------------------
Latin America          29,051       24,847      118,906        86,686
----------------------------------------------------------------------
 
Asia (Associates)           -            -            -         2,202
----------------------------------------------------------------------
 
Center costs           (3,538)      (3,231)     (25,272)      (22,461)
----------------------------------------------------------------------
 
Profit before
 goodwill
 amortization,
 interest, and
 exceptional items    102,311       92,431      356,037       385,587
Goodwill
 amortization          (7,174)     (11,651)     (37,925)      (44,548)
Group net interest    (77,574)     (72,856)    (291,003)     (297,737)
Share of
 associates' net
 interest                (331)        (338)      (1,301)       (2,062)
----------------------------------------------------------------------
 
Profit before
 exceptional items     17,232        7,586       25,808        41,240
 
Reorganization and
 restructuring
 costs                (30,750)     (26,496)     (39,430)      (35,006)
Profit on the sale
 of assets and
 operations             7,101            -       22,173         5,560
----------------------------------------------------------------------
(Loss) / profit   EUR  (6,417)EUR  (18,910)   EUR  8,551   EUR  11,794
 before taxation
----------------------------------------------------------------------
 
 

JSG Funding plc

Summary Group Balance Sheet
 
                                             Dec 31 2004   Dec 31 2003
                                               EUR   000     EUR   000
----------------------------------------------------------------------
Assets Employed
Fixed Assets
Intangible assets                             1,455,130     1,455,133
Tangible assets                               2,334,858     2,435,946
Financial assets                                 81,895        80,642
----------------------------------------------------------------------
                                              3,871,883     3,971,721
----------------------------------------------------------------------
 
Current Assets
Stocks                                          452,166       477,432
Debtors                                         925,048       911,443
Amounts due by affiliates                           395             -
Amounts due by affiliates after more than
 one year                                       270,552       277,264
Cash at bank and in hand                        248,033       179,067
----------------------------------------------------------------------
                                              1,896,194     1,845,206
Creditors (amounts falling due within one
 year)                                        1,169,672     1,178,457
----------------------------------------------------------------------
Net current assets                              726,522       666,749
----------------------------------------------------------------------
                                                   EUR           EUR
Total assets less current liabilities          4,598,405     4,638,470
----------------------------------------------------------------------
 
Financed by
Creditors (amounts falling due after more
 than one year)                               2,967,212     3,024,052
Government grants                                14,260        15,155
Provisions for liabilities and charges          221,403       234,952
Pension liabilities (net of deferred tax)       411,237       355,309
----------------------------------------------------------------------
                                              3,614,112     3,629,468
----------------------------------------------------------------------
 
Capital and Reserves
Called up share capital                              40            40
Other reserves                                  946,002       930,780
Profit and loss account                         (76,941)      (35,464)
----------------------------------------------------------------------
Group shareholders' funds (equity
 interests)                                     869,101       895,356
 
Minority interests (equity interests)           115,192       113,646
----------------------------------------------------------------------
                                                984,293     1,009,002
----------------------------------------------------------------------
                                                   EUR           EUR
                                               4,598,405     4,638,470
----------------------------------------------------------------------
 
 

JSG Funding plc

Statement of Total Recognized Gains and
 Losses
                                            12 Months to  12 Months to
                                             Dec 31 2004   Dec 31 2003
                                               EUR   000     EUR   000
----------------------------------------------------------------------
(Loss) / profit for the year
               - Group                          (38,433)      (71,927)
               - Associates                       3,944         4,599
----------------------------------------------------------------------
                                                (34,489)      (67,328)
----------------------------------------------------------------------
 
Translation adjustments on foreign currency
 net investments
               - Group                           15,222        58,982
----------------------------------------------------------------------
 
Actuarial (loss) / gain recognized in
 retirement benefits schemes                     (6,988)       25,603
----------------------------------------------------------------------
 
Total recognized gains and losses relating
 to the year
               - Group                          (30,199)       12,658
               - Associates                       3,944         4,599
----------------------------------------------------------------------
                                           EUR  (26,255)   EUR  17,257
----------------------------------------------------------------------
 
Reconciliation of Movements in
 Shareholders' Funds
                                      12 Months to        12 Months to
                                       Dec 31 2004         Dec 31 2003
                                         EUR   000           EUR   000
----------------------------------------------------------------------
 
At beginning of year                      895,356             878,099
(Loss) for the year                       (34,489)            (67,328)
Actuarial (loss) / gain recognized in
 retirement benefit schemes                (6,988)             25,603
Translation adjustments on foreign
 currency net investments                  15,222              58,982
----------------------------------------------------------------------
At end of year                        EUR  869,101        EUR  895,356
----------------------------------------------------------------------
 
Reconciliation of Net Loss to EBITDA, before Exceptional Items
 
                  3 months to  3 months to  12 months to  12 months to
                  Dec 31 2004  Dec 31 2003   Dec 31 2004   Dec 31 2003
                    EUR   000    EUR   000     EUR   000     EUR   000
----------------------------------------------------------------------
 
Net loss              (9,550)     (31,529)      (34,489)      (67,328)
Equity minority
 interests             4,952        3,715        16,067        16,768
Taxation              (1,819)       8,904        26,973        62,354
Share of
 associates'
 operating profit     (3,571)      (2,624)      (12,611)      (12,155)
Profit on sale of
 assets and
 operations           (7,101)           -       (22,173)       (5,560)
Reorganization
 and
 restructuring
 costs                30,750       26,496        39,430        35,006
Total net
 interest             77,905       73,194       292,304       299,799
Depreciation,
 depletion and
 amortization         68,141       72,612       300,540       298,014
----------------------------------------------------------------------
EBITDA before
 exceptional
 items           EUR  159,707 EUR  150,768  EUR  606,041  EUR  626,898
----------------------------------------------------------------------