Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (March 2021)
64 slides from Huhtamaki Oyj's roadshow presentation, March 2021
Slide 1: Becoming the first choice in sustainable packaging solutions
Becoming the first choice in sustainable packaging solutions Roadshow presentation February–March 2021
Slide 2: Broadly serving food on-the-go and food on-the-shelf
Broadly serving food on-the-go and food on-the-shelf Food on-the-go Food on-the-shelf Markets Customers QSR Food Delivery FMCG Retail Products Convenience Food safety Food availability Food waste reduction Packaging Foodservice packaging Molded fiber packaging Flexible packaging 2 February–March 202
Slide 3: Huhtamaki operates on a global scale
Huhtamaki operates on a global scale Figures for 2020 NET SALES €3.3B ADJUSTED EBIT MARGIN 9.1% MANUFACTURING UNITS 81 OPERATING COUNTRIES 36 EMPLOYEES 18,227 3 February–March 2021 Roadshow presentation | Huhtamaki
Slide 4: We operate through 3 business areas
We operate through 3 business areas Fiber and Foodservice North America Flexible Packaging Net sales per business Europe-Asia-Oceania area (2020) 34 manufacturing units and 18 manufacturing units and 29 manufacturing units and 32% 34% operations in 28 countries operations in 2 countries operations i
Slide 5: Understanding the value of packaging within the broader sustainability context
Understanding the value of packaging within the broader sustainability context Hygiene Food safety Packaging promotes hygiene and prevents spread of Packaging keeps food safe from spoilage and disease preserves its original properties Food availability Food waste prevention Packaging enables food av
Slide 6: The future of food packaging is impacted by four transformative trends
The future of food packaging is impacted by four transformative trends • The next billion consumers will come from emerging markets • Future consumer will require packaging to be innovative, individual and sustainable • Digitalization will influence packaging and the way we do business • Sustainabil
Slide 7: Our 2030 strategy
Our 2030 strategy Protecting food, people and the planet Our ambition is to be the first choice in sustainable packaging solutions, enabling wellbeing and convenience for people around the world GROWING DRIVING OUR DEVELOPING OUR BUSINESS COMPETITIVENESS OUR TALENT EMBEDDING SUSTAINABILITY IN EVERYT
Slide 8: We have high financial and sustainability ambitions
We have high financial and sustainability ambitions Our ambition First choice in sustainable food packaging solutions Comparable growth Adjusted EBIT margin Net debt/Adjusted EBITDA Dividend payout ratio 5+% 10+% 2-3 40-50% Carbon neutral 100% >80% 100% >90% 100% production of products designed rene
Slide 9: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors February–March Roadshow 9 presentation 2021 | Huhtamaki
Slide 10: 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 11: Appendix: The role of packaging
Appendix: The role of packaging
Slide 12: The future of food packaging is impacted by four transformative trends
The future of food packaging is impacted by four transformative trends The next billion consumers will Future consumer will require Digitalization will influence Sustainability will drive come from emerging markets packaging to be innovative, packaging and the way we do innovation and collaboration
Slide 13: Comparing carbon footprints of single-use and multi-use systems
Comparing carbon footprints of single-use and multi-use systems END-OF-LIFE MANUFACTURING END-OF-LIFE MANUFACTURING -4,597 kg CO2 eq. 13,604 kg CO2 eq. 703 kg CO2 eq. 3,457 kg CO2 eq. Multi-use tableware systems generate over PLASTIC MULTI-USE PAPER-BASED TABLEWARE* 2.7 times higher CO2-e SINGLE-USE
Slide 14: 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 wasted food systems of lost food Source: CGIAR Research Program on Climate Change, Agriculture and Food Sec
Slide 15: 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 15 February–March 2021 Roadshow presentation | Huhtamaki
Slide 16: 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 17: Consumer awareness and efficient collection, sorting and recycling infrastructure are 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 17 Feb
Slide 18: 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 Source: Smithers Pira: Future Lifecycles of Packaging Recycling to 2023 18 February–March 2021 Roadshow presentation | Huhtamak
Slide 19: Examples of recent innovations and product launches
Examples of recent innovations and product launches Micro- High- wave quality and oven alternative Huhtamaki Fresh ready safe to plastic meal tray – a recyclable Cooler to straws alternative to black plastic, touch than Huhtamaki paper straws made of renewable raw plastic materials – an eco-friendly
Slide 20: Appendix: Segments and financials
Appendix: Segments and financials
Slide 21: Operating model: We are a converter
Operating model: We are a converter 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 • Folded carton • Reducing food waste w
Slide 22: Fiber and Foodservice Europe-Asia-Oceania
Fiber and Foodservice Europe-Asia-Oceania Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Recycled and other natural fibers are used to make fresh product packaging, such as egg, fruit, food and drink packaging, and foodservice paper and plastic disposable tableware, su
Slide 23: North America
North America Serves local markets with foodservice packaging, Chinet® disposable tableware as well as ice-cream containers and other consumer goods packaging products. Production in the United States and Mexico. NET SALES MARKET POSITION €1,139 mn ADJUSTED EBIT MARGIN 12.0% #1 globally operating EM
Slide 24: Flexible Packaging
Flexible Packaging Flexible packaging is used for a wide range of pre- packed consumer products including food, beverages, pet food, hygiene and health care products. Production in Europe, Middle East and Africa, Asia and South America. NET SALES MARKET POSITION €1,051 mn ADJUSTED EBIT MARGIN 7.7% #
Slide 25: Products, customers, sales split and competitors per segment
Products, customers, sales split and competitors per segment Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Fiber Packaging Foodservice E-A-O North America Flexible Packaging Our products Our customers Net sales Western Europe & UK Foodservice Europe split Europe ROW C
Slide 26: Strategic focus areas for segments
Strategic focus areas for segments Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Fiber Packaging Foodservice E-A-O North America Flexible Packaging Egg and fruit protective packaging Global key accounts in QSR, Coffee and Retail, Foodservice, Consumer goods Strong dem
Slide 27: Segment key figures (1/2)
Fiber Packaging and Foodservice E-A-O have been integrated as on June 1, 2020 Segment key figures (1/2) • Improving customers access to combined fiber and paperboard technology • Leveraging organization synergies and growth opportunities (plastic substitution, food delivery) Foodservice Europe-Asia-
Slide 28: Segment key figures (2/2)
Segment key figures (2/2) North America Key figures (MEUR) 2013 2014 2015 2016 2017 20181 2019 2020 Long-term ambition Net sales 725.3 769.3 947.7 1,005.1 1,000.4 1,002.7 1,152.7 1,138.9 Comparable growth 5% 6% 4% 6% 2% 5% 9% 1% 3-5% Adjusted EBIT 38.4 38.4 88.2 107.6 104.1 73.0 111.4 136.6 Margin 5
Slide 29: Group financials 2010-2020
Group financials 2010-2019 2010 2011 20122 20131 20141 2015 2016 2017 20182 2019 2020 Net sales MEUR 1,952 2,043 2,321 2,161 2,236 2,726 2,865 2,989 3,104 3,399 3,302 Comparable growth3 3% 5% 3% 3% 6% 4% 4% 3% 5% 6% -2% Adjusted EBITDA4 MEUR 214 208 254 242 259 342 382 390 399 456 473 Margin4 11.0%
Slide 30: Comparable net sales growth by business segment
Comparable net sales growth by business segment Quarterly Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Foodservice E-A-O 3% 2% 4% 6% 5% 5% 5% 3% 4% 3% 4% 4% -4% -28% -1% -7% North America 2% 1% 2% 2% 5% 2% 2% 11% 5% 13% 14% 6% 9% -5% 4% -2% Flexible
Slide 31: Solid track record of growth investments
Solid track record of growth investments Paper and Huhtamaki CAPEX M&A spend plastic blueloop disposable 1,433 624 packaging, China & HK 2013–2020 Pressed Short-run Ireland Fresh ready- (EUR million) plates, US flexible meal trays, packaging, UK Eastern Europe Folding Labels, India Corrugated Bags &
Slide 32: 20 acquisitions completed since 2011
20 acquisitions completed since 2011 Date (completed) Acquired company Country Acquiring segment Mar 2020 Laminor S.A. Brazil Flexible Packaging Jan 2020 Mohan Mutha Polytech Private Limited India Flexible Packaging Dec 2019 Everest Flexibles Pty Ltd South Africa Flexible Packaging Jun 2018 Ajanta P
Slide 33: Appendix: Shareholders and management
Appendix: Shareholders and management
Slide 34: Largest shareholders and split of shareholding
Largest shareholders and split of shareholding Shareholder Number of shares % of total shares Change Change % Split of shareholding 1, Finnish Cultural Foundation 11 314 840 10,50% 0 0,00% 2, Ilmarinen Mutual Pension Insurance Company 2 795 000 2,59% -35 000 -1,24% 3, Varma Mutual Pension Insurance
Slide 35: Foreign shareholding and distribution by geography
Foreign shareholding and distribution by geography Total number of shareholders and foreign shareholding Approximate shareholder distribution by geography (Ownership as a percentage of identified shareholders in September 2020) 40 000 54% 38 000 5% 1% 52% 4% 36 000 7% 34 000 50% 8% 32 000 48% 30 000
Slide 36: Global Executive Team
Global Executive Team Charles Héaulmé Arup Basu Ann O’Hara Eric Le Lay Thomas Geust President and CEO President, Flexible Packaging President, North America President, Foodservice EAO CFO and Fiber Packaging Thomasine Kamerling Marina Madanat Sami Pauni Teija Sarajärvi Antti Valtokari EVP Sustainabi
Slide 37: Board of Directors
Board of Directors Pekka Ala-Pietilä Kerttu Tuomas Doug Baillie William R. Barker Chairman of the Board Vice-Chairman HR AC HR HR Born 1957, Finnish citizen Born 1957, Finnish citizen Born 1955, U.K. citizen Born 1949, U.S. citizen Starting date: April 24, 2012 Starting date: April 27, 2017 Starting
Slide 38: Our operating environment
Our operating environment (as given at Q4 2020 results)
Slide 39: 2020 has been a year of external disruption and internal transformation
2020 has been a year of external disruption and internal transformation EXTERNAL DISRUPTION INTERNAL TRANSFORMATION - Macroeconomy impacted by COVID-19 crisis - 2030 growth strategy finalized and rolled-out and continued geopolitical tensions with enhanced focus on sustainability, digitalization, in
Slide 40: Essential status and safeguards ensured business continuity
Essential status and health and safety safeguards ensured business continuity to serve our customers – During 2020, temporary close-down of operations in 14 out of 81 units, with only 3 units closed for more than 3 weeks – Operations have been closed during 1% of the time – We have constantly worked
Slide 41: Q4 2020 results
Q4 2020 results: Solid performance despite COVID- 19 pandemic
Slide 42: Q4 2020: Net sales negatively impacted by effects from COVID-19
Q4 2020: Net sales negatively impacted by effects from COVID-19 Development of net sales in Q4 2020 Net sales -7% in Q4 2020 (EUR million) – Comparable net sales -2% 11 (-7% in emerging markets) -22 -52 – 1% from acquisitions 875 – 6% negative currency impact 813 Q4 2019 Organic Acquisitions Currenc
Slide 43: 2020: Food on-the-shelf packaging continued to grow
2020: Food on-the-shelf packaging continued to grow, whilst food on-the-go was affected by the pandemic Development of net sales in 2020 Net sales -3% in 2020 (EUR million) – Comparable net sales -2% -61 52 (-6% in emerging markets) -89 – 2% from acquisitions 3,399 – 3% negative currency impact 3,30
Slide 44: The global pandemic resulted in a minor decrease in 2020 net sales
The global pandemic resulted in a minor decrease in 2020 net sales Long-term Comparable growth Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 2019 2020 ambitions Foodservice E-A-O 4% -4% -28% -1% -7% 4% -10% 5-7% North America 6% 9% -5% 4% -2% 9% 1% 3-5% Flexible Packaging 3% 2% 2% 1% 0% 3% 1% 6-8% Fiber Packaging 8
Slide 45: Improved adjusted EBIT margin by 0.5 p.p.
Improved adjusted EBIT margin by 0.5 p.p. MEUR Q4 20 Q4 19 Change 2020 2019 Change Net sales 812.8 874.6 -7% 3,301.8 3,399.0 -3% 1 Adjusted EBIT 72.8 74.7 -2% 302.1 293.1 3% Margin 9.0% 8.5% 9.1% 8.6% Adjusted EPS, EUR2 0.48 0.48 1% 1.95 1.88 4% Capital expenditure 103.2 71.0 45% 223.5 203.9 10% – N
Slide 46: Embedding sustainability across our operations and setting clear ambitions
Embedding sustainability across our operations and setting clear ambitions Renewable or recycled materials Renewable electricity Non-hazardous waste recycled Health and safety (% of total materials) (% of total electricity consumed) (% of total non-haz. waste) 2030 Lost time incident ambition Lost d
Slide 47: Q4 2020 results: Business segment review
Q4 2020 results: Business segment review
Slide 48: Foodservice EAO: Transformation initiated to secure competitiveness
Foodservice EAO: Transformation initiated to secure competitiveness and to adapt to future trends Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 213.5 245.3 -13% Comparable growth -7% 4% 241 242 231 245 228 218 213 Adjusted EBIT 1 15.5 20.9 -26% 2019
Slide 49: North America: Strong performance throughout the year
North America: Strong performance throughout the year Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 274.0 303.6 -10% 306 296 304 Comparable growth -2% 6% 286 287 283 274 256 1 32.2 33.1 -3% 2019 Adjusted EBIT 2020 Margin 11.8% 10.9% 5% 9% 13% -5% 14
Slide 50: Flexible Packaging: Performance held back by COVID-19
Flexible Packaging: Performance held back by COVID-19 Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 250.8 255.1 -2% 271 263 261 266 255 Comparable growth 0% 3% 252 249 251 1 17.9 18.8 -5% 2019 Adjusted EBIT 2020 Margin 7.2% 7.4% 5% 2% 1% 2% 4% 1% 3%
Slide 51: Fiber Packaging: Strong performance throughout the year
Fiber Packaging: Strong performance throughout the year Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 85.4 76.1 12% Comparable growth 8% 8% 85 75 78 76 76 72 68 72 1 12.7 7.5 70% 2019 Adjusted EBIT 2020 Margin 14.8% 9.8% 4% 9% 7% 10% 7% 7% 8% 8% Com
Slide 52: Q4 2020 results: Financials review
Q4 2020 results: Financials review
Slide 53: Higher adjusted EBIT margin with lower sales
Higher adjusted EBIT margin with lower sales MEUR Q4 20 Q4 19 Change 2020 2019 Change – The increase in earnings in Net sales 812.8 874.6 -7% 3,301.8 3,399.0 -3% 2020 was supported by the North America and Fiber Adjusted EBITDA 1 116.8 117.3 0% 473.1 456.3 4% Packaging segments Margin 1 14.4% 13.4%
Slide 54: Impact from currencies turned negative during 2020
Impact from currencies turned negative during 2020 Average Average Change in Change in Closing rates rate rate average closing 2019 2020 rate rate Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 (YoY) USD 1.12 1.14 -2% 1.12 1.10 1.13 1.17 1.23 -10% Foreign currency translation impact INR 78.85 84.54 -7% 79.81 83.50 8
Slide 55: Net debt decreased compared to Q4 2019 and Q3 2020
Net debt decreased compared to Q4 2019 and Q3 2020 Net debt, net debt/adj. EBITDA and gearing – Net debt/Adj. EBITDA at 1.8 Covenant level1 3.5 – At the end of Q4 2020: – Cash and cash equivalents EUR 315 million 2.4 2.4 Ambition – Unused committed credit 2.1 2.1 2–3 facilities available EUR 310 mil
Slide 56: Loan maturities
Loan maturities Debt maturity structure December 31, 2020 – Average maturity 2.7 years at the (EUR million) end of Q4 2020 (3.4 at the end of Q4 2019) 600 500 – Unused committed credit facilities of EUR 310 million maturing in 400 2022 300 – New syndicated multicurrency 200 revolving credit facility
Slide 57: The Board of Directors aims for predictable and growing dividends
The Board of Directors aims for predictable and growing dividends Dividend per share (EUR) and payout ratio (% of adjusted EPS) 2020* 2019 Change 65% Adjusted EPS 1.95 1.88 4% Dividend per share 0.92 0.89 3% 53% 50% 50% 47% 47% 47% 47% 47% Long-term ambition: Payout ratio 47% 47% Payout ratio 42% 42
Slide 58: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 2-3 Dividend payout ratio 47% 40% 40% 42% 50% 47
Slide 59: Q4 2020 results: Looking forward
Q4 2020 results: Looking forward
Slide 60: Outlook 2021
Outlook 2021 The Group’s trading conditions are expected to improve compared to 2020, however with continued volatility in the operating environment. Huhtamaki's diversified product portfolio provides resilience and the Group’s good financial position enables addressing profitable growth opportuniti
Slide 61: Continued solid performance despite COVID-19 pandemic
Continued solid performance despite COVID-19 pandemic – Solid full year sales performance, continued profit improvement and strong cash flow, enabling continued investments into levers for growth – Gradual recovery in short-term demand has continued, however volatility remains especially for foodser
Slide 62: Financial calendar
Financial calendar 2020 Week commencing April 22, 2021 March 1, 2021 Q1 2021 Interim Report & Annual Accounts Annual General Meeting July 22, 2021 October 21, 2021 Half-yearly Report Q3 2021 Interim Report 62 February–March 2021 Roadshow presentation | Huhtamaki
Slide 63: 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 64: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors