Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q3 2023 Earnings Presentation
25 slides from Huhtamaki Oyj's earnings presentation, Oct 20, 2023
Slide 1: Good operational profitability in a challenging market
Good operational profitability in a challenging market Interim report January-September 2023 Charles Héaulmé, President and CEO Thomas Geust, CFO
Slide 2: Q3 2023: Good operational profitability in a challenging market
Q3 2023: Good operational profitability in a challenging market Market trends − The market environment improved slightly during Q3 compared to H1 − Inflation pressure continues to impact consumption Financial performance − Comparable sales -4%, reflecting soft volumes and lower support from pricing
Slide 3: Business performance
Business performance Huhtamaki
Slide 4: Q3 2023: Comparable net sales decreased due to softness in volumes and lower support from pricing
Q3 2023: Comparable net sales decreased due to softness in volumes and lower support from pricing Development of net sales in Q3 2023 Net sales decreased 12% in Q3 2023 (EUR million) • Comparable net sales decreased 4% (-7 % in emerging markets). Support -48 0 -24 from pricing but softness in volume
Slide 5: Q1-Q3 2023: Comparable net sales slightly below the previous year's level
Q1-Q3 2023: Comparable net sales slightly below the previous year’s level Development of net sales in Q1-Q3 2023 Net sales decreased 7% in Q1-Q3 2023 (EUR million) • Comparable net sales decreased 1% -51 0 -79 (-3 % in emerging markets). Support -108 from pricing but softness in volumes 3,375 • -2%
Slide 6: Lower support from pricing visible in net sales
Lower support from pricing visible in net sales Q1- Q1- Long-term Comparable growth Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q3 23 ambitions Foodservice E-A-O 22% 15% 11% 5% -3% 20% 4% 4-5% North America 10% 10% 2% 1% 1% 16% 1% 5-6% Flexible Packaging 20% 1% -5% -11% -11% 19% -9% 6-7% Fiber Packaging 19%
Slide 7: Adj. EBIT margin reached 9.7% in Q3 2023
Adj. EBIT margin reached 9.7% in Q3 2023 MEUR Q3 23 Q3 22 Change Q1-Q3 23 Q1-Q3 22 Change Net sales 1,037.2 1,178.4 -12% 3,136.0 3,375.4 -7% 1 Adjusted EBIT 100.3 101.5 -1% 285.1 301.7 -6% Margin 9.7% 8.6% 9.1% 8.9% Adjusted EPS, EUR2 0.57 0.59 -2% 1.64 1.84 -11% Capital expenditure 69.7 57.4 21% 20
Slide 8: Business segment review
Business segment review Huhtamaki
Slide 9: Foodservice EAO: Softer comparable net sales growth
Foodservice EAO: Softer comparable net sales growth Key figures, MEUR Q3 23 Q3 22 Change Net sales and comparable growth (EUR million & %) Net sales 259.9 300.5 -14% Comparable growth -3% 22% 289 300 255 256 271 260 267 Adjusted EBIT 1 26.7 30.6 -13% 2022 Margin 10.3% 10.2% 2023 18 % 11 % 18 % 5% 22
Slide 10: North America: Continued solid performance
North America: Continued solid performance Key figures, MEUR Q3 23 Q3 22 Change Net sales and comparable growth (EUR million & %) Net sales 348.4 372.4 -6% Comparable growth 1% 10% 375 373 372 384 337 358 348 Adjusted EBIT1 45.9 41.8 10% 2022 Margin 13.2% 11.2% 2023 24 % 2% 14 % 1% 10 % 1% 10 % Comp
Slide 11: Flexible Packaging: Performance improving from H1 2023
Flexible Packaging: Performance improving from H1 2023 Key figures, MEUR Q3 23 Q3 22 Change Net sales and comparable growth (EUR million & %) Net sales 344.2 420.6 -18% 421 Comparable growth -11% 20% 378 391 369 349 328 344 Adjusted EBIT1 24.7 26.3 -6% 2022 Margin 7.2% 6.2% 2023 18 % -5 % 19 % -11 %
Slide 12: Fiber Packaging: Net sales growth continued with a strong margin
Fiber Packaging: Net sales growth continued with a strong margin Key figures, MEUR Q3 23 Q3 22 Change Net sales and comparable growth (EUR million & %) Net sales 81.4 89.3 -9% Comparable growth 4% 19% 95 91 87 86 89 87 1 81 2022 Adjusted EBIT 10.2 8.5 19% Margin 12.5% 9.6% 2023 8% 17 % 16 % 7% 19 %
Slide 13: Financial review
Financial review Huhtamaki
Slide 14: Earnings impacted by lower net sales
Earnings impacted by lower net sales Reported tax rate high: MEUR Q3 23 Q3 22 Change Q1-Q3 23 Q1-Q3 22 Change • Effective YTD rate ~30%, in adjusted terms Net sales 1,037.2 1,178.4 -12% 3,136.0 3,375.4 -7% below 24% Adjusted EBITDA1 149.0 153.2 -3% 430.6 453.6 -5% • The reported tax rate increased m
Slide 15: Currency impact clearly negative
Currency impact clearly negative Average Average Change in Change in Closing rates rate rate average closing Q1-Q3 22 Q1-Q3 23 rate Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 rate (YoY) USD 1.07 1.08 -2 % 0.97 1.06 1.09 1.09 1.05 -9% Foreign currency INR 82.36 89.24 -8 % 79.31 88.23 89.36 89.71 87.64 -10% transl
Slide 16: Net debt to adjusted EBITDA decreased
Net debt to adjusted EBITDA decreased Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.3 Covenant level 3.75 • At the end of Q3 2023: 3.0 3.0 • Cash and cash equivalents EUR 333 million 2.5 2.5 2.5 Ambition 1,572 1,626 2.4 2.3 • Unused committed credit facilities 1,483 1,471 1,
Slide 17: Loan maturities
Loan maturities Debt maturity structure September 30, 2023 • Average maturity 2.4 years at the (EUR million) end of Q3 2023 (3.2 at the end of Q3 2022) 700 600 • Signed a EUR 125 million 500 sustainability-linked term loan 400 facility in May 300 200 100 0 2023 2024 2025 2026 2027 Later Lease liabil
Slide 18: Strong free cash flow supported by working capital improvement
Strong free cash flow supported by working capital improvement Free cash flow bridge Cash flow driven by: (EUR million) • Decrease in reported EBITDA, 484 burdened by IAC’s and 416 divestment of Russia • Significantly improved impact 193 from change in working capital 75 • Higher net financial items
Slide 19: Financial position improved
Financial position improved MEUR Sep 2023 Sep 2022 • Operating working capital decreased thanks to lower inventories Total assets 4,829 5,338 • Financial position improved, driven Operating working capital 788 970 by strong cash flow Net debt 1,332 1,483 Equity & non-controlling interest 1,945 2,028
Slide 20: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2016 2017 2018 2019 2020 2021 2022 Q1-Q3 23 ambition Organic growth 4% 3% 5% 6% -2% 7% 15% -1% 5-6% Adjusted EBIT margin 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 8.8% 9.1% 10-12% Adj. ROI 14.7% 13.6% 11.6% 12.3% 11.7% 11.3% 11.0% 10.6% 13-15% Net debt/Ad
Slide 21: Looking forward
Looking forward Huhtamaki
Slide 22: Outlook for 2023 and short-term risks and uncertainties
Outlook for 2023 and short-term risks and uncertainties Outlook for 2023 (unchanged) Short-term risks and uncertainties The Group’s trading conditions are expected to Significant and broad-based inflation (including raw remain relatively stable, despite the continued materials, labor, distribution a
Slide 23: Reporting schedule in 2024
Reporting schedule in 2024 February 8, 2024 April 25, 2024 July 25, 2024 October 24, 2024 Results 2023 Q1 2024 Interim Report, Half-yearly Report 2024 Q3 2024 Interim Report Annual General Meeting Week commencing February 26, 2024 Annual Report 2023 23 October 20, 2023 Interim Report Q3 2023
Slide 24: 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 25: For further information, please contact us:
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors 25 October 20, 2023 Interim Report Q3 2023