Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (September 2021)
61 slides from Huhtamaki Oyj's roadshow presentation, September 2021
Slide 1: Becoming the first choice in sustainable packaging solutions
Becoming the first choice in sustainable packaging solutions Roadshow presentation July–September 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 technology Paperboard conversion Molded fiber Flexibles 2 July–September 2021 Roadsh
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 35 EMPLOYEES 18,227 3 July–September 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: Our strategy builds on transformative trends impacting the future of packaging
Our strategy builds on transformative trends impacting the future of packaging • 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 • Sus
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 IMPROVING OUR DEVELOPING OUR BUSINESS COMPETITIVENESS OUR TALENT EMBEDDING SUSTAINABILITY IN EVER
Slide 8: We focus on our strategic priorities to drive growth
We focus on our strategic priorities to drive growth Competitiveness Talent Sustainability Digitalization • Achieve world-class processes and • Develop strategic capabilities • Focus innovation on sustainable • Improve operational performance operational performance packaging designed for circularit
Slide 9: First choice in sustainable packaging solutions
We have high financial and sustainability ambitions Our ambition First choice in sustainable 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 renewable
Slide 10: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors July–September Roadshow 10 presentation 2021 | Huhtamaki
Slide 11: 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 12: Appendix: The role of packaging
Appendix: The role of packaging
Slide 13: 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 14: 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 15: 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 16: 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 16 July–September 2021 Roadshow presentation | Huhtamaki
Slide 17: 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 18: Recyclable packaging, consumer awareness and efficient collection 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 18 Jul
Slide 19: 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 19 July–September 2021 Roadshow presentation | Huhtamak
Slide 20: 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 21: Appendix: Segments and financials
Appendix: Segments and financials
Slide 22: Operating model: We are a converter
Operating model: We are a converter Key inputs Our activities Key outputs Key impacts Raw materials Advanced manufacturing Safe, convenient and fit-for-purpose Environment - Paperboard - Cup forming consumer packaging - Replacing non-renewable materials - Plastic resins - Folded carton production -
Slide 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: Group financials 2010-2020
Group financials 2010-2020 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 31: 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 Q1 21 Q2 21 Foodservice E-A-O 3% 2% 4% 6% 5% 5% 5% 3% 4% 3% 4% 4% -4% -28% -1% -7% -2% 40% North America 2% 1% 2% 2% 5% 2% 2% 11% 5% 13% 14% 6% 9%
Slide 32: 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 33: 21 acquisitions completed since 2011
21 acquisitions completed since 2011 Date (completed) Acquired company Country Acquiring segment Jun 2021 Jiangsu Hihio-Art Packaging Co. Ltd China Foodservice E-A-O Mar 2020 Laminor S.A. Brazil Flexible Packaging Jan 2020 Mohan Mutha Polytech Private Limited India Flexible Packaging Dec 2019 Everes
Slide 34: Appendix: Shareholders and management
Appendix: Shareholders and management
Slide 35: 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. Huhtamäki Oyj 3,395,709 3.15% 0 0.00% 3. Ilmarinen Mutual Pension Insurance Company 2,525,000 2.34% -140,000
Slide 36: 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) 45,000 54% 5% 1% 52% 4% 40,000 7% 50% 8% 35,000 48% 8% 56% 30,000 46% 44
Slide 37: Global Executive Team
Global Executive Team Charles Héaulmé Marco Hilty1 Eric Le Lay Ann O’Hara Thomas Geust President and CEO President, Flexible Packaging President, Foodservice EAO President, North America CFO and Fiber Packaging Thomasine Kamerling Marina Madanat Sami Pauni Teija Sarajärvi2 Antti Valtokari EVP Sustai
Slide 38: 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 39: Q2 2021 results
Q2 2021 results: Strong comparable net sales growth with improved profitability
Slide 40: Q2 2021: Significant growth compared to the COVID-19 pandemic trough
Q2 2021: Significant growth compared to the COVID-19 pandemic trough Development of net sales in Q2 2021 Net sales increased 10% in Q2 2021 (EUR million) • Comparable net sales growth 14% 1 (20% in emerging markets) -35 115 • 4% negative currency impact 877 797 Q2 2020 Organic Acquisitions Currency
Slide 41: H1 2021: Solid sales growth despite significant currency headwind
H1 2021: Solid sales growth despite significant currency headwind Development of net sales in Q2 2021 Net sales increased 10% in Q2 2021 (EUR million) • Comparable net sales growth 14% 1 (20% in emerging markets) -35 115 • 4% negative currency impact 877 797 Q2 2020 Organic Acquisitions Currency Q2
Slide 42: Gradual recovery for food on-the-go, slow progress in Flexible Packaging
Gradual recovery for food on-the-go, slow progress in Flexible Packaging Long-term Comparable growth Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 2020 ambitions Foodservice E-A-O -4% -28% -1% -7% -2% -10% 5-7% North America 9% -5% 4% -2% -2% 1% 3-5% Flexible Packaging 2% 2% 1% 0% 0% 1% 6-8% Fiber Packaging 9% 10%
Slide 43: Improved adjusted EBIT margin despite inflation of input costs
Improved adjusted EBIT margin despite inflation of input costs MEUR Q2 21 Q2 20 Change H1 21 H1 20 Change Net sales 877.1 797.1 10% 1,679.0 1,641.7 2% 1 Adjusted EBIT 79.9 70.1 14% 156.8 143.7 9% Margin 9.1% 8.8% 9.3% 8.8% Adjusted EPS, EUR2 0.53 0.44 21% 1.02 0.90 13% Capital expenditure 51.8 40.3
Slide 44: Positive progress in the execution of our sustainability initiatives
Positive progress in the execution of our sustainability initiatives leads to improvement in our GSI 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 tim
Slide 45: Q2 2021 results: Business segment review
Q2 2021 results: Business segment review
Slide 46: Foodservice EAO: Gradual recovery in demand continued
Foodservice EAO: Gradual recovery in demand continued Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 235.8 167.2 41% 236 231 Comparable growth 40% -28% 218 207 213 1 19.9 6.2 >100% 167 2020 Adjusted EBIT Margin 8.4% 3.7% 2021 -4% -2% -28% 40% -1% -7%
Slide 47: North America: Recovery in foodservice and growth in retail tableware continued
North America: Recovery in foodservice and growth in retail tableware continued Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 295.2 296.1 -0% Comparable growth 9% -5% 286 296 295 283 256 274 Adjusted EBIT 1 38.2 37.9 1% 2020 Margin 13.0% 12.8% 2021
Slide 48: Flexible Packaging: Solid overall demand, headwind from raw material prices
Flexible Packaging: Solid overall demand, headwind from raw material prices Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 270.7 263.1 3% 271 267 263 271 266 Comparable growth 6% 2% 251 Adjusted EBIT 1 16.6 19.1 -13% 2020 Margin 6.1% 7.3% 2021 22% %
Slide 49: Fiber Packaging: Continued solid performance
Fiber Packaging: Continued solid performance Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 80.4 75.7 6% Comparable growth 1% 10% 80 85 75 79 76 72 Adjusted EBIT 1 8.3 8.5 -2% 2020 Margin 10.3% 11.2% 2021 9% 4% 10% 1% 7% 8% Comp. Capital expenditure
Slide 50: Q2 2021 results: Financials review
Q2 2021 results: Financials review
Slide 51: Higher sales and operational improvements driving improved earnings
Higher sales and operational improvements driving improved earnings MEUR Q2 21 Q2 20 Change H1 21 H1 20 Change • Sales growth supported by all Net sales 877.1 797.1 10% 1,679.0 1,641.7 2% segments and partly offset by currency headwind Adjusted EBITDA 1 121.1 112.1 8% 238.8 229.1 4% Margin 1 13.8% 1
Slide 52: Net debt to adjusted EBITDA decreased compared to Q2/2020
Net debt to adjusted EBITDA decreased compared to Q2/2020 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 1.9 Covenant level 3.75 • At the end of Q2 2021: • Cash and cash equivalents EUR 213 million Ambition 2.1 • Unused committed credit facilities 2.0 1.9 1.9 1.9 2–3 available
Slide 53: Loan maturities
Loan maturities Debt maturity structure June 30, 2021 • Average maturity 3.1 years at the (EUR million) end of Q2 2021 (3.1 at the end of Q2 2020) 700 600 • Unused committed credit facilities 500 of EUR 324 million maturing in 400 2022 300 200 100 0 2021 2022 2023 2024 2025 Later Lease liabilities C
Slide 54: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 H1 2021 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% 6% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 9.3% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 1.9 2-3 Dividend payout ratio 47
Slide 55: Q2 2021 results: Looking forward
Q2 2021 results: Looking forward
Slide 56: Outlook 2021
Outlook 2021 (unchanged) 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
Slide 57: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic may create disturbances in the Group’s trading conditions and its operating environment, as well as in demand for the Group’s products. Volatile raw material, distribution and energy prices as well as movements in currency rates are considered
Slide 58: Strong comparable net sales growth with improved profitability
Strong comparable net sales growth with improved profitability • Net sales and profitability above pre-pandemic levels − The gradual recovery in demand for food on- the-go products has continued − Strong demand for retail tableware and fiber packaging continued − Significant inflationary cost enviro
Slide 59: Financial calendar 2021
Financial calendar 2021 October 21, 2021 Q3 2021 Interim Report 59 July–September 2021 Roadshow presentation | Huhtamaki
Slide 60: 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 61: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors