Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — H1 2020 Earnings Presentation
29 slides from Huhtamaki Oyj's earnings presentation, Jul 23, 2020
Slide 1: Good resilience in the face of the COVID-19 crisis
Good resilience in the face of the COVID-19 crisis Half-yearly Report 2020 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Our operating environment
Our operating environment Huhtamaki
Slide 3: Visible and tangible recovery
Visible and tangible recovery – Consistent increase in order-in-take since April – Food on-the-go most impacted by the restrictions, order-in-take end June still lower than 2019 with variations across geographies Consumption shifts will drive innovation and new models – Shift to working from home, c
Slide 4: The fundamental trends underlying our strategy remain true
The fundamental trends underlying our strategy remain true – the next billion consumers – the consumer of the future – digitalisation – sustainability Our Strategy is the right strategy – Ambition: first choice in sustainable food packaging – Strategic priorities: – accelerate Growth – improve Compe
Slide 5: Celebrating our 100-year legacy by donating up to 3 MEUR
Celebrating our 100-year legacy by donating up to 3 MEUR to initiatives addressing global sustainability challenges Caring immediately Acting today Educating for tomorrow Innovating for the future 0.5 MEUR to boost COVID- 0.6 MEUR to set a cleaning 0.9 MEUR to provide 1 MEUR to surface and 19 emerge
Slide 6: Business performance
Business performance Huhtamaki
Slide 7: Q2 2020: Sales impacted by the COVID-19 related restrictions
Q2 2020: Sales impacted by the COVID-19 related restrictions Development of net sales in Q2 2020 Net sales growth -8% in Q2 2020 (EUR million) – Comparable net sales growth -8% (-12% in emerging markets) -76 14 -8 – 2% from acquisitions 867 – 1% negative currency impact 797 Q2 2019 Organic Acquisiti
Slide 8: H1 2020: Strong sales in Q1 offset the drop in sales in Q2
H1 2020: Strong sales in Q1 offset the drop in sales in Q2 Development of net sales in H1 2020 Net sales growth -2% in H1 2020 (EUR million) – Comparable net sales growth -3% 2 (-8% in emerging markets) -54 25 – 2% from acquisitions 1,669 – Insignificant currency impact 1,642 H1 2019 Organic Acquisi
Slide 9: Food on-the-shelf packaging continued to grow, food on-the-go significantly impacted
Food on-the-shelf packaging continued to grow, food on-the-go significantly impacted Comparable growth Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 H1 19 H1 20 Long-term ambitions Foodservice E-A-O 3% 4% 4% -4% -28% 4% -17% 5-7% North America 13% 14% 6% 9% -5% 9% 1% 3-5% Flexible Packaging 1% 4% 3% 2% 2% 3% 2% 6-8
Slide 10: Solid adjusted EBIT margin despite COVID-19 crisis
Solid adjusted EBIT margin despite COVID-19 crisis MEUR Q2 20 Q2 19 Change H1 20 H1 19 Change Net sales 797.1 867.3 -8% 1,641.7 1,669.4 -2% Adjusted EBIT1 70.1 78.3 -10% 143.7 146.1 -2% Margin 8.8% 9.0% 8.8% 8.8% Adjusted EPS, EUR2 0.44 0.51 -14% 0.90 0.95 -5% Capital expenditure 40.3 38.6 4% 79.7 7
Slide 11: Business segment review
Business segment review Huhtamaki
Slide 12: Foodservice EAO: COVID-19 drives decrease in sales and earnings
Foodservice EAO: COVID-19 drives decrease in sales and earnings Key figures, MEUR Q2 20 Q2 19 Change Net sales and comparable growth (EUR million & %) Net sales 167.2 241.0 -31% Comparable growth -28% 3% 241 242 245 228 218 Adjusted EBIT1 6.2 22.0 -72% 2019 167 2020 Margin 3.7% 9.1% 4% -4% 3% -28% 4
Slide 13: North America: Strong performance during Q2 and H1
North America: Strong performance during Q2 and H1 Key figures, MEUR Q2 20 Q2 19 Change Net sales and comparable growth (EUR million & %) Net sales 296.1 306.4 -3% Comparable growth -5% 13% 306 296 287 304 286 256 Adjusted EBIT1 37.9 32.4 17% 2019 2020 Margin 12.8% 10.6% 5% 9% 13% -5% 14% 6% Comp. C
Slide 14: Flexible Packaging: Performance impacted by disruptions in the supply chain
Flexible Packaging: Performance impacted by disruptions in the supply chain Key figures, MEUR Q2 20 Q2 19 Change Net sales and comparable growth (EUR million & %) Net sales 263.1 248.7 6% 271 263 261 255 Comparable growth 2% 1% 252 249 Adjusted EBIT1 19.1 20.1 -5% 2019 2020 Margin 7.3% 8.1% 5% 2% 1%
Slide 15: Fiber Packaging: Significant growth in sales and solid profitability
Fiber Packaging: Significant growth in sales and solid profitability Key figures, MEUR Q2 20 Q2 19 Change Net sales and comparable growth (EUR million & %) Net sales 75.7 77.5 -2% Comparable growth 10% 7% 78 72 75 76 76 68 2019 Adjusted EBIT1 8.5 7.6 12% 2020 Margin 11.2% 9.8% 4% 9% 7% 10% 7% 8% Com
Slide 16: Financial review
Financial review Huhtamaki
Slide 17: Solid EBIT margin whilst EPS affected by financial items and tax rate
Solid EBIT margin whilst EPS affected by financial items and tax rate MEUR Q2 20 Q2 19 Change H1 20 H1 19 Change – Net financial items increased Net sales 797.1 867.3 -8% 1,641.7 1,669.4 -2% following internal funding arrangements and Adjusted EBITDA1 112.1 118.6 -5% 229.1 225.5 2% precautionary mea
Slide 18: No significant impact from currencies
No significant impact from currencies Average Closing rates Average Change in rate rate average H1 2019 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 H1 2020 rate USD 1.13 1.14 1.09 1.12 1.10 1.13 1.10 3% Foreign currency INR 79.13 78.57 77.07 79.81 83.50 85.19 81.63 -3% translation impact GBP 0.87 0.89 0.89 0.85 0
Slide 19: Net debt decreased compared to Q2 2019 and Q1 2020
Net debt decreased compared to Q2 2019 and Q1 2020 Net debt, net debt/adj. EBITDA and gearing – Net debt/Adj. EBITDA at 2.0 Covenant level1 3.5 – At the end of Q2 2020: – Cash and cash equivalents EUR 234 million 2.4 2.4 Ambition – Unused committed credit 2.1 2.1 2.0 2.0 2–3 facilities available EUR
Slide 20: Loan maturities
Loan maturities Debt maturity structure June 30, 2020 – Average maturity 3.1 years at the (EUR million) end of Q2 2020 (3.2 Q2 2019) 600 – Unused committed credit facilities 500 of EUR 303 million maturing in 2022 400 300 – EUR 150 million Schuldschein in 3 and 5 year maturities signed on 200 June 2
Slide 21: Higher free cash flow
Higher free cash flow Free cash flow bridge Cash flow driven by: (EUR million) – Higher EBITDA despite impact from COVID 243 – Laminor gain of ~20 MEUR is 225 recognized as non-cash in ‘Other’ – Positive impact from working capital following active 46 34 receivables collection 1 2 -10 -10 -11 -19 -6
Slide 22: Stable financial position
Stable financial position MEUR Jun 2020 Jun 2019 – Higher total assets following growth Total assets 3,672 3,413 – Net debt decreased and gearing improved Operating working capital 617 662 Net debt 908 1,019 – Improvement in adjusted ROI, decrease in adjusted ROE Equity & non-controlling interest 1,
Slide 23: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions H1 Long-term 2014 2015 2016 2017 20181 2019 2020 ambition Organic growth 6% 4% 4% 3% 5% 6% -3% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 8.8% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 2.0 2-3 Dividend payout ratio 47% 40% 40% 42% 50
Slide 24: Looking forward
Looking forward Huhtamaki
Slide 25: Outlook 2020
Outlook 2020 Disturbance from the COVID-19 pandemic on Huhtamaki's operating environment is expected to continue. The demand especially for food on-the-go packaging may be significantly negatively impacted whilst demand for food on-the-shelf packaging and convenience tableware may be positively impa
Slide 26: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic including a potential second wave of the pandemic is a significant short-term risk potentially creating disturbance in the Group’s trading conditions and its operating environment, as well as in demand for the Group’s products. Volatile raw ma
Slide 27: Financial calendar 2020
Financial calendar 2020 October 22 Q3 2020 Interim Report November 10 Segment update and site visit in Hämeenlinna, Finland More information will follow. Event subject to restrictions following COVID-19. 27 July 23, 2020 Half-yearly Report 2020
Slide 28: Disclaimer
Disclaimer Information presented herein contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or Huhtamäki Oyj’s or its affiliates’ (“Huhtamaki”) future financial performance, including, but not limited to, strategic plans, potential growth, expe
Slide 29: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors