Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (March 2020)
62 slides from Huhtamaki Oyj's roadshow presentation, March 2020
Slide 1: Roadshow presentation February-March 2020
Roadshow presentation February-March 2020
Slide 2: We're the global specialist in packaging for food and drink
We’re the global specialist in packaging for food and drink Net sales Adjusted Our vision € 3.4bn EBIT margin* 8.6% The first choice in food packaging Comparable growth Adjusted ROI* 6% 12.3% Employees Manufacturing sites Our purpose 18,600 81 Helping great products reach more people, Operations in
Slide 3: Our business is consumer food and drink packaging
Our business is consumer food and drink packaging Food-on-the-go Pre-packed food Convenience Short shelf life Food safety Long shelf life Food waste prevention Our packaging protects food and drink products, delivering them to consumers safely and in good condition, helping to reduce waste. 3 Roadsh
Slide 4: Operating model
Operating model Inputs Our activities Outputs Impacts Raw materials Conversion to food packaging Safe, convenient and fit-for-purpose Nature • Paperboard • Cup forming consumer packaging • Renewable and recyclable materials • Plastic resins • Recycled fiber 68% • Folded carton • Extrusion and lamina
Slide 5: We use different materials for different purposes, aiming for optimal packaging
We use different materials for different purposes, aiming for optimal packaging 2/3 of raw material we use is renewable Different plastics are used to achieve lightweight, fit-for- ‒ Virgin fiber is used due to purpose, long shelf life food contact regulation barrier structures 98% of used fiber is
Slide 6: Our three business areas are organized into four reporting segments
Our three business areas are organized into four reporting segments Foodservice Flexible Fiber Share of net sales packaging packaging packaging per segment in 2019 9% 28% 30% 34% Foodservice Europe-Asia- Flexible Packaging Fiber Packaging Oceania and North America – 40 plants on – 30 plants on – 11
Slide 7: Foodservice E-A-O: Geared for profitable growth
Foodservice E-A-O: Geared for profitable growth Foodservice paper and plastic disposable tableware, such as cups and lids, is supplied to foodservice operators, fast food restaurants and coffee shops. The segment has production in Europe, South Africa, Middle East, Asia and Oceania. Our products Our
Slide 8: North America: Continue on the growth path
North America: Continue on the growth path The North America segment serves local markets with foodservice packaging, Chinet® disposable tableware as well as ice-cream containers and other consumer goods packaging products. The segment has production in the United States and Mexico. Our products Our
Slide 9: Flexible Packaging: Strengthening our position in sustainability
Flexible Packaging: Strengthening our position in sustainability Flexible packaging is used for a wide range of pre-packed consumer products including food, beverages, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Middle East and Afric
Slide 10: Fiber Packaging: Focus on profitable growth to enhance our positions
Fiber Packaging: Focus on profitable growth to enhance our positions Recycled and other natural fibers are used to make fresh product packaging, such as egg, fruit, food and drink packaging. The segment has production in Europe, Oceania, Africa and South America. Our products Our competitive MEUR Lo
Slide 11: Becoming the first choice in food packaging – next steps
Becoming the first choice in food packaging – next steps
Slide 12: Megatrends support food packaging growth
Megatrends support food packaging growth… Food packaging offers stable Innovations create more growth opportunities Food contact sustainable and easy-to-use over the cycle requirements create packaging a higher entry barrier Megatrends create opportunities for us More people Growing middle class Mor
Slide 13: … and our positions offer good opportunities
… and our positions offer good opportunities Focus on consumer Major brand food and drink owners with high growth packaging ambitions as customers Product portfolio Geographic and innovations expansion Our growth opportunities Mature markets Developing markets approx. GDP growth + 2% even GDP growth
Slide 14: Growth and operational efficiency drive profitability improvement
Growth and operational efficiency drive profitability improvement – Summary of our long-term ambitions Comparable growth 5+% 10+% 15+% 40-50% EBIT ROI DPS margin 5+% Balancing both EBIT margin and asset velocity → To deliver steadily improving returns Acquisitive growth → To ensure cash for growth i
Slide 15: How we support our customers' growth
How we support our customers’ growth We invest to expand We’re a safe pair of We offer a wide We take innovation our network and to hands throughout product range to into next level improve our our network make our customers’ capabilities loremipsum lives easier - Game-changing - Follow global - Glo
Slide 16: Achieve our vision: The first choice in food packaging
Achieve our vision: The first choice in food packaging Grow AMBITION Build more Sustainability 10+% - Organic and - Continue organic - Ensure food safety innovative growth 5+% investments - Reduce food waste - Acquisitive growth 5+% - Continue disciplined - Fit-for-purpose material acquisitions choi
Slide 17: Q4 2019: Strong net sales growth and profitability improvement
Q4 2019: Strong net sales growth and profitability improvement
Slide 18: Solid comparable growth in Q4
Solid comparable growth in Q4 19 8% net sales growth in Q4 19 5 23 – 5% comparable net sales growth (6% in emerging markets) 34 – 1% from acquisitions – 3% positive currency impact 875 +8% 813 M€ Q4 2018 Organic Acquisitions Translation impact Q4 2019 18 Roadshow presentation February-March 2020 Com
Slide 19: Comparable growth in line with our long-term ambition in FY 2019
Comparable growth in line with our long-term ambition in FY 2019 10% net sales growth in 2019 90 – 6% comparable net sales growth 47 (7% in emerging markets) 158 – 2% from acquisitions – 3% positive currency impact 3,399 +10% 3,104 M€ 2018 Organic Acquisitions Translation impact 2019 19 Roadshow pre
Slide 20: All segments contributing to comparable net sales growth
All segments contributing to comparable net sales growth Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 2018 2019 Long-term ambitions Foodservice E-A-O 3% 4% 3% 4% 4% 4% 4% 5-7% North America 11% 5% 13% 14% 6% 5% 9% 2-5% Flexible Packaging 4% 5% 1% 4% 3% 7% 3% 6-8% Fiber Packaging 5% 4% 7% 7% 8% 4% 6% 5-7% Group 6%
Slide 21: Earnings increase outperforming sales growth
Earnings increase outperforming sales growth MEUR Q4 19 Q4 18 Change 2019 2018 Change Net sales 874.6 812.8 8% 3,399.0 3,103.6 10% Adjusted EBIT1 74.7 62.4 20% 293.1 251.0 17% Margin 8.5% 7.7% 8.6% 8.1% Adjusted EPS, EUR2 0.48 0.45 8% 1.88 1.69 11% Capital expenditure 71.0 70.4 1% 203.9 196.9 4% Q4
Slide 22: Business segment review
siness segment review Huhtamaki
Slide 23: Foodservice Europe-Asia-Oceania: Solid net sales growth and improved profitability
Foodservice Europe-Asia-Oceania: Solid net sales growth and improved profitability Key figures, MEUR Q4 19 Q4 18 Change Net sales (MEUR) and comparable growth (%) Net sales 245.3 231.6 6% Comparable net sales growth 4% 3% 245 228 241 230 242 232 Adjusted EBIT1 20.9 18.0 16% 221 199 2018 Margin1 8.5%
Slide 24: North America: Continued strong growth and earnings improvement
North America: Continued strong growth and earnings improvement Key figures, MEUR Q4 19 Q4 18 Change Net sales (MEUR) and comparable growth (%) Net sales 303.6 276.6 10% Comparable net sales growth 6% 11% 306 287 304 Adjusted EBIT1 33.1 19.4 71% 257 277 2018 256 242 Margin1 10.9% 7.0% 227 2019 Capit
Slide 25: Flexible Packaging: Moderate net sales growth and improvement in earnings
Flexible Packaging: Moderate net sales growth and improvement in earnings Key figures, MEUR Q4 19 Q4 18 Change Net sales (MEUR) and comparable growth (%) Net sales 255.1 235.5 8% Comparable net sales growth 3% 4% 252 249 261 255 234 240 242 236 Adjusted EBIT1 18.8 16.9 11% 2018 Margin1 7.4% 7.2% 201
Slide 26: Acquisition for full ownership in joint venture company in Brazil
Acquisition for full ownership in joint venture company in Brazil Announced on December 23, 2019 Recent completed acquisitions Laminor S.A. Announced on September 27, 2019 Joint venture Brazil 70% Everest Flexibles South Africa – Huhtamaki acquires full ownership of joint venture company Net sales L
Slide 27: Fiber Packaging: Strong net sales growth
Fiber Packaging: Strong net sales growth Key figures, MEUR Q4 19 Q4 18 Change Net sales (MEUR) and comparable growth (%) Net sales 76.1 72.9 4% Comparable net sales growth 8% 5% 78 73 76 Adjusted EBIT1 7.5 8.7 -14% 70 72 71 69 68 2018 Margin1 9.8% 12.0% 2019 Capital expenditure 13.7 13.6 1% 5% 4% 3%
Slide 28: Q4 2019 Financial review
Q4 2019 Financial review Huhtamaki
Slide 29: Increased net sales feeding through to EPS
Increased net sales feeding through to EPS Q4 19 Q4 18 Change 2019 2018 Change MEUR Highlights Net sales 874.6 812.8 8% 3,399.0 3,103.6 10% – Solid growth and positive currency Adjusted EBITDA1 117.3 101.9 15% 456.3 398.7 14% translation Margin1 13.4% 12.5% 13.4% 12.8% – Net sales growth, operationa
Slide 30: Continuing positive currency impact, mostly from USD
Continuing positive currency impact, mostly from USD Closing rates Change in Average rate Average rate average rate 2018 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 2019 (%) USD 1.18 1.15 1.12 1.14 1.09 1.12 1.12 5% INR 80.72 80.23 77.78 78.57 77.07 79.81 78.85 2% Foreign currency translation GBP 0.88 0.90 0.86 0
Slide 31: Net debt decreased mainly due to improved working capital
Net debt decreased mainly due to improved working capital Covenant level 3.5 2.4 AMBITION – Net debt/Adj. EBITDA at 2.0 2.4 2-3 2.3 2.1 – At the end of Q4 19 2.0 – Cash and cash equivalents 2.2 2.2 2.2 EUR 199 million – Unused committed credit 1.8 Net debt, M€ facilities available EUR 302 million Ne
Slide 32: Loan maturities
Loan maturities Debt maturity structure December 31, 2019 (EUR million) 600 – In 2019, Huhtamaki issued a 500 seven-year senior unsecured bond of EUR 175 million 400 – Average maturity 3.4 years at 300 the end of Q4 2019 (3.7 at the end of Q4 2018) 200 – Unused committed credit 100 facilities of EUR
Slide 33: Strong free cash flow improvement
Strong free cash flow improvement 449 Cash flow driven by: 390 – Higher EBITDA following net sales growth, pricing actions 226 and efficiency improvement measures 80 45 – Partly offset by one-time gain in 3 3 8 MEUR 2018 -69 -18 -17 -39 -38 -10 – Improvement in net working capital in Q4 19 -204 -197
Slide 34: Stable financial position
Stable financial position MEUR Dec 2018 Dec 2019 Total assets 3,240 3,611 – Higher assets and net debt decrease Operating working capital 598 585 following growth Net debt 928 904 Equity & non-controlling interest 1,267 1,437 – Gearing improved Gearing 0.73 0.63 Adjusted ROI1 11.6% 12.3% Adjusted RO
Slide 35: The Board of Directors aims at predictable and growing dividends
The Board of Directors aims at predictable and growing dividends Dividend per share (EUR) and payout ratio (% of adjusted EPS) 2019* 2018 Change 65% Adjusted EPS 1.88 1.69 11% Dividend 0.89 0.84 6% Payout ratio 47% 50% 53% 50% 50% 47% 47% 47% 47% Long-term ambition: Share price on Dec 31 41.38 27.07
Slide 36: Progress towards long-term ambitions
Progress towards long-term ambitions Long-term FY 2014 FY 2015 FY 2016 FY 2017 FY 20181 FY 2019 ambition Organic growth 6% 4% 4% 3% 5+% 6% 5+% Adjusted EBITDA margin 11.6% 12.5% 13.3% 13.0% 12.8% 13.4% 14+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 10+% Adjusted ROI 12.6% 14.7% 14.7% 13.6%
Slide 37: On sustainability of food packaging
On sustainability of food packaging
Slide 38: Major themes affecting the future of food packaging
Major themes affecting the future of food packaging 8.5bn people by 2030 38 megacities Climate change Littering & waste Resource scarcity 38 Roadshow presentation July-September 2019
Slide 39: Packaging enables our way of life
Packaging enables our way of life Thanks to packaging, Different materials Packaging reduces people can safely are needed for the overall consume food that is different purposes – greenhouse gas produced elsewhere, our aim is optimal emissions by reducing even on-the-go packaging, designed food wast
Slide 40: Food is a major contributor to climate change
Food is a major contributor to climate change Global 1/3 of the food GHG emissions produced is lost or wasted approx. 25% 8% of global GHG emissions come from of global GHG emissions come from food systems wasted of lost food 40 Roadshow presentation February-March 2020 Source: CGIAR Research Progra
Slide 41: Packaging accounts for approx. 5% of food's CO2 footprint
Packaging accounts for approx. 5% of food’s CO2 footprint 80% 15% 5% Food production Transport and distribution Packaging 41 Roadshow presentation February-March 2020
Slide 42: Only a small share of CO2 emissions of a latte on the go come from the cup
Only a small share of CO2 emissions of a latte on the go come from the cup, and these can be halved by increasing recycling Energy to make the latte 4% Cup & lid 9% Coffee production 14% Co2 of a latte Milk production 73% on the go The CO2 emissions of paper cups can be halved The fiber in our paper
Slide 43: 100% renewable FutureSmart product line further reduces CO2 emissions
100% renewable FutureSmart product line further reduces CO2 emissions 43 Roadshow presentation February-March 2020
Slide 44: Recyclable packaging, consumer awareness and efficient recycling infrastructure required
In addition to recyclable packaging, consumer awareness and an efficient collection, sorting and recycling infrastructure are required to solve littering and waste challenges Recyclable Collection, sorting Consumer Less waste in the packaging and recycling behaviour environment infrastructure 44 Roa
Slide 45: Recycling rates vary – significant potential to utilize valuable materials
Recycling rates vary – significant potential to utilize valuable materials Plastic packaging Paper Glass Metal ~14% ~70% ~50-80% ~30-90% *Recycled *Recycled *Recycled *Recycled 45 Roadshow presentation February-March 2020 *Source: Smithers Pira: Future Lifecycles of Packaging Recycling to 2023
Slide 46: Huhtamaki Fresh ready meal tray – a recyclable alternative to black plastic
Huhtamaki Fresh ready meal tray – a recyclable alternative to black plastic, made of renewable raw materials Micro-wave Cooler to and oven safe touch than plastic Natural look Renewable raw materials 46 Roadshow presentation February-March 2020
Slide 47: Huhtamaki paper straws – an eco-friendly solution for enjoying cold drinks
Huhtamaki paper straws – an eco-friendly solution for enjoying cold drinks High-quality alternative to plastic straws Recyclable Made from 100% PEFC certified paper 47 Roadshow presentation February-March 2020
Slide 48: Huhtamaki blueloop – flexible packaging designed for recycling
Huhtamaki blueloop – flexible packaging designed for recycling – Mono-material structures – Minimum 90% standard materials like PE, PP, or PET – Available already for several end applications ranging from candy and chocolates to dry foods and personal care products 48 Roadshow presentation February-
Slide 49: Looking forward
Looking forward Huhtamaki
Slide 50: Outlook 2020
Outlook 2020 The Group’s trading conditions are expected to remain relatively stable during 2020. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same
Slide 51: Financial calendar 2020
Financial calendar 2020 March 24, 2020 Week 10 April 29 Capital Markets Day Annual Accounts 2019 Q1 2019 Interim Report Helsinki, Finland Annual General Meeting More information at: huhtamaki.com/investors/investor- calendar-and-services/cmd2020/ July 23 October 22 Half-yearly Report 2020 Q3 2020 In
Slide 52: Helping great products reach more people, more easily
Helping great products reach more people, more easily
Slide 53: Appendices
Appendices
Slide 54: Group financials 2010-2019
Group financials 2010-2019 2019 2018(2 2017 2016 2015 2014(1 2013(1 2012(2 2011 2010 Net sales MEUR 3,399 3,104 2,989 2,865 2,726 2,236 2,161 2,321 2,043 1,952 Comparable net sales growth(3 % 6 5 3 4 4 6 3 3 5 3 Adjusted EBITDA(4 MEUR 456 399 390 382 342 259 242 254 208 214 Margin(4 % 13.4 12.8 13.0
Slide 55: Quarterly comparable net sales growth by business segment
Quarterly comparable net sales growth by business segment Long- term Q4 19 Q3 19 Q2 19 Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 FY 19 FY 18 FY 17 ambition Foodservice E-A-O 4% 4% 3% 4% 3% 5% 5% 5% 6% 4% 2% 3% 4% 4% 4% 5-7% North America 6% 14% 13% 5% 11% 2% 2% 5% 2% 2% 1% 2% 9% 5% 2% 2-
Slide 56: Solid track record of growth investments
Solid track record of growth investments Paper and Huhtamaki plastic blueloop CAPEX M&A spend disposable 1,210 584 packaging, China & HK 2013–2019 Pressed Short-run Ireland Fresh ready- (EUR million) plates, US flexible meal trays, packaging, UK Eastern Europe Folding Labels, India Corrugated Bags &
Slide 57: 19 acquisitions completed since 2011
19 acquisitions completed since 2011 – Paris Packaging, Inc., US, September 2011 (North America) – Ample Industries, Inc., US, November 2011 (North America) – Josco (Holdings) Limited, China, April 2012 (Foodservice E-A-O) – Winterfield, LLC, US, August 2012 (North America) – Webtech Labels Private
Slide 58: Ownership
Ownership – 31,354 registered shareholders at the Shareholder distribution by sector Approximate shareholder distribution end of February 2020 February 29, 2020 by geography 1% – 51% of shares in domestic ownership 6% – 16% of shares controlled by non-profit 7% 10% organizations 8% 49% 12% 51% – Fin
Slide 59: Largest shareholders on February 29, 2020
Largest shareholders on February 29, 2020 (based on data from Euroclear Finland Ltd.) Shareholder Number of shares % of total shares 1. Finnish Cultural Foundation 12,010,653 11.15% 2. Huhtamäki Oyj 3,410,709 3.17% 3. Varma Mutual Pension Insurance Company 3,283,809 3.05% 4. Ilmarinen Mutual Pension
Slide 60: Definitions for performance measures
Definitions for performance measures Performance measures according to IFRS Earnings per share (EPS) attributable to equity holders of the parent company = Profit for the period – non-controlling interest Average number of shares outstanding Diluted earnings per share (diluted EPS) attributable to e
Slide 61: 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 62: For further information, please contact us:
For further information, please contact us: www.huhtamaki.com » Investors ir@huhtamaki.com