Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q2 2023 Earnings Presentation
27 slides from Huhtamaki Oyj's earnings presentation, Jul 20, 2023
Slide 1: Stable performance in a challenging market
Stable performance in a challenging market Half-yearly Report 2023 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Q2 2023: Stable performance in a challenging market
Q2 2023: Stable performance in a challenging market Market trends − The market environment remained muted, impacted by continued inflation pressure on consumption − Of all categories, inflation was highest in food products. Consumption decline was visible particularly in Home and Personal care produ
Slide 3: We continue to address competitiveness and focus on profitable growth initiatives
We continue to address competitiveness and focus on profitable growth initiatives Actions to address competitiveness Several projects coming online in 2023 • Actively addressing productivity, with a focus on: • Retail tableware capacity in North America • Machine utilization • Fiber lids expansion i
Slide 4: Business performance
Business performance Huhtamaki
Slide 5: Q2 2023: Comparable net sales decreased due to softness in volumes
Q2 2023: Comparable net sales decreased due to softness in volumes Development of net sales in Q2 2023 Net sales decreased 8% in Q2 2023 (EUR million) • Comparable net sales growth -2% -25 0 -32 (-2 % in emerging markets). Support -38 by pricing but weighed on by volumes 1,147 • -3% from divestment
Slide 6: H1 2023: Flat comparable net sales
H1 2023: Flat comparable net sales Development of net sales in H1 2023 Net sales decreased 4% in H1 2023 (EUR million) • Comparable net sales growth 0% -4 0 (-1 % in emerging markets). Support -56 -39 by pricing but weighed on by volumes • -3% from divestment 2,197 2,099 • -2% currency impact H1 202
Slide 7: Comparable growth in most segments
Comparable growth in most segments Long-term Comparable growth Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 H1 22 H1 23 ambitions Foodservice E-A-O 18% 22% 15% 11% 5% 18% 8% 4-5% North America 14% 10% 10% 2% 1% 19% 1% 5-6% Flexible Packaging 19% 20% 1% -5% -11% 19% -8% 6-7% Fiber Packaging 16% 19% 17% 17% 7% 12% 1
Slide 8: Adjusted EBIT decreased
Adjusted EBIT decreased MEUR Q2 23 Q2 22 Change H1 23 H1 22 Change Net sales 1,051.7 1,147.3 -8% 2,098.8 2,197.0 -4% 1 Adjusted EBIT 92.7 102.7 -10% 184.8 200.3 -8% Margin 8.8% 9.0% 8.8% 9.1% Adjusted EPS, EUR2 0.55 0.63 -12% 1.06 1.26 -15% Capital expenditure 69.0 51.5 34% 134.2 127.9 5% Q2 comment
Slide 9: Continued progress towards our sustainability targets
Continued progress towards our sustainability targets Our performance has been externally recognized Climate Company score management (B) 67 Targets displayed in the graphs are Huhtamaki group’s 2030 ambitions; GHG = greenhouse gas 9 July 20, 2023 Half-yearly Report 2023
Slide 10: Business segment review
Business segment review Huhtamaki
Slide 11: Foodservice EAO: Softer comparable net sales growth
Foodservice EAO: Softer comparable net sales growth Key figures, MEUR Q2 23 Q2 22 Change Net sales and comparable growth (EUR million & %) Net sales 270.9 288.8 -6% Comparable growth 5% 18% 289 300 255 256 271 267 Adjusted EBIT 1 25.0 25.3 -1% 2022 Margin 9.2% 8.7% 2023 18 % 11 % 18 % 5% 22 % 15 % C
Slide 12: North America: Continued solid performance
North America: Continued solid performance Key figures, MEUR Q2 23 Q2 22 Change Net sales and comparable growth (EUR million & %) Net sales 373.2 374.8 -0% Comparable growth 1% 14% 375 373 372 384 337 358 Adjusted EBIT1 45.4 41.9 8% 2022 Margin 12.2% 11.2% 2023 24 % 2% 14 % 1% 10 % 10 % Comp. Capita
Slide 13: Flexible Packaging: Challenging quarter due to continued low demand
Flexible Packaging: Challenging quarter due to continued low demand Key figures, MEUR Q2 23 Q2 22 Change Net sales and comparable growth (EUR million & %) Net sales 327.9 390.7 -16% 421 Comparable growth -11% 19% 378 391 369 349 328 Adjusted EBIT1 16.0 26.9 -41% 2022 Margin 4.9% 6.9% 2023 18 % -5 %
Slide 14: Fiber Packaging: Net sales growth continued, but at a slower pace
Fiber Packaging: Net sales growth continued, but at a slower pace Key figures, MEUR Q2 23 Q2 22 Change Net sales and comparable growth (EUR million & %) Net sales 86.1 95.4 -10% Comparable growth 7% 16% 95 91 87 86 89 87 Adjusted EBIT 1 9.3 12.8 -27% 2022 Margin 10.8% 13.4% 2023 8% 17 % 16 % 7% 19 %
Slide 15: Financial review
Financial review Huhtamaki
Slide 16: Earnings impacted by lower net sales
Earnings impacted by lower net sales MEUR Q2 commentary: Q2 23 Q2 22 Change H1 23 H1 22 Change Net sales 1,051.7 1,147.3 -8% 2,098.8 2,197.0 -4% • Adjusted EBIT decreased Adjusted EBITDA1 141.2 153.8 -8% 281.7 300.4 -6% mainly due to lower sales volumes and the divestment of Margin 1 13.4% 13.4% 13.
Slide 17: Currency impact turned negative
Currency impact turned negative Average Average Change in Change in Closing rates rate rate average closing H1 22 H1 23 rate Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 rate (YoY) USD 1.09 1.08 1% 1.05 0.97 1.06 1.09 1.09 -4% Foreign currency INR 83.34 88.87 -7 % 83.04 79.31 88.23 89.36 89.71 -8% translation impa
Slide 18: Net debt to adjusted EBITDA increased slightly
Net debt to adjusted EBITDA increased slightly Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.5 Covenant level 3.75 • At the end of Q2 2023: 3.0 3.0 • Cash and cash equivalents EUR 334 million 2.5 2.5 2.5 1,626 2.4 Ambition • Unused committed credit facilities 1,572 1,483 1,4
Slide 19: Loan maturities
Loan maturities Debt maturity structure June 30, 2023 • Average maturity 2.5 years at the (EUR million) end of Q2 2023 (3.5 at the end of Q2 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 liabilities
Slide 20: Free cash flow increased significantly
Free cash flow increased significantly Free cash flow bridge Cash flow driven by: (EUR million) • Decrease in reported EBITDA, burdened by IAC’s and 270 294 divestment of Russia • Significantly improved impact 71 from change in working capital 11 1 1 3 8 • Higher net financial items, cash -37 -14 -4
Slide 21: Stable financial position
Stable financial position MEUR Jun 2023 Jun 2022 • Operating working capital decreased thanks to lower inventories Total assets 4,773 5,195 • Stable financial position remains Operating working capital 842 904 Net debt 1,453 1,626 Equity & non-controlling interest 1,838 1,807 Gearing 0.79 0.90 Adjus
Slide 22: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2016 2017 2018 2019 2020 2021 2022 H1 23 ambition Organic growth 4% 3% 5% 6% -2% 7% 15% 0% 5-6% Adjusted EBIT margin 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 8.8% 8.8% 10-12% Adj. ROI 14.7% 13.6% 11.6% 12.3% 11.7% 11.3% 11.0% 10.4% 13-15% Net debt/Adj. E
Slide 23: Looking forward
Looking forward Huhtamaki
Slide 24: 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 25: Upcoming events in 2023
Upcoming events in 2023 October 20, 2023 Q3 2023 Interim Report 25 July 20, 2023 Half-yearly Report 2023
Slide 26: 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 27: For further information, please contact us:
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors 27 July 20, 2023 Half-yearly Report 2023