Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (December 2017)
46 slides from Huhtamaki Oyj's roadshow presentation, December 2017
Slide 1: Roadshow presentation October-December 2017
Roadshow presentation October-December 2017
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 EBIT margin Our ambition €3.0bn 9.0% The preferred global Comparable growth ROI food packaging brand 3% 13.9% Employees Manufacturing sites Our purpose 17,600 78 Helping great products Operations in reach more people, 34 countries
Slide 3: We're well positioned to deliver on our ambitions
We’re well positioned to deliver on our ambitions Who we are: Who we serve: What we offer: Main materials we use: FOODSERVICE #1 packaging company Paperboard operating globally FIBER PACKAGING #1 company globally Recycled fibers FLEXIBLE PACKAGING Plastic & other #1 company in emerging materials mar
Slide 4: 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 2016 9% 25% 31% 35% Foodservice Europe-Asia- Flexible Packaging Fiber Packagingj Oceania and North America kdfgjkl dhgdfhg – 41 plants on – 2
Slide 5: 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 6: 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 7: Flexible Packaging: Strengthening our position
Flexible Packaging: Strengthening our position Flexible packaging is used for a wide range of consumer products including food, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Middle East, Asia and South America. Our products Our competi
Slide 8: 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 M€ Long
Slide 9: Q3 2017: Continued comparable growth
Q3 2017: Continued comparable growth
Slide 10: Improved comparable growth
Improved comparable growth Net sales growth split in Q3 17 4 -21 – 4% comparable growth 30 732 – 5% in emerging markets 719 – 1% from acquisitions – Negative currency translation impact of M€ -21 (app. -3%) – India negative in the quarter, but returned to growth in September M€ Q3 16 Comparable Acqu
Slide 11: All-in-all 5% topline growth
All-in-all 5% topline growth 16 53 40 2,243 Net sales growth split in 2,134 Q1-Q3 17 – 3% comparable growth – 2% in emerging markets – 2% from acquisitions – Positive currency translation impact of M€ 16 (app. 1%) – YTD India net sales -7% M€ Q1-Q3 16 Comparable Acquisitions, Translation impact Q1-Q
Slide 12: Comparable growth
Comparable growth Q3 17 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 2016 Long-term ambitions Foodservice EAO 4% 2% 3% 3% 5% 7% 7% 5% 5-7% North America 2% 1% 2% 5% 2% 8% 10% 6% 2-5% Flexible Packaging 7% -2% 3% -3% -3% 2% 1% -1% 6-8% Fiber Packaging 5% 8% 4% 6% 6% 5% 4% 5% 5-7% Group 4% 1% 3% 3% 2% 6% 6% 4%
Slide 13: Profitability at a good level
Profitability at a good level M€ Q3 17 Q3 16 Change Q1-Q3 17 Q1-Q3 16 Change Q3 17 Highlights Net sales 732.0 719.2 2% 2,243.3 2,133.5 5% – Earnings at a good level Adjusted EBITDA1 94.0 96.1 -2% 294.4 286.6 3% – Quarterly results behind Margin 12.8% 13.4% 13.1% 13.4% prior year Adjusted EBIT1 64.3
Slide 14: Foreign currency impact clearly negative in the quarter
Foreign currency impact clearly negative in the quarter Closing rates Average rate Average rate Foreign currency Q1-Q3 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q1-Q3 17 translation impact USD 1.12 1.12 1.05 1.07 1.14 1.18 1.11 INR 74.91 75.03 71.09 69.69 73.71 77.11 72.56 Q3 17: GBP 0.80 0.86 0.85 0.86 0.88
Slide 15: Plastic resin prices trending upwards
Plastic resin prices trending upwards 140 – Prices for plastic resins were volatile during Q3, but 120 higher vs. prior year – North America cost spikes 100 due to hurricanes – Prices for paperboard were relatively stable 80 – Recycled fiber on high level 60 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/17
Slide 16: Stable debt position
Stable debt position Covenant level 3.5 – Net debt/EBITDA stable at 1.9 AMBITION 2.0 2-3 – At the end of Q3 17 1.9 1.9 1.8 1.8 – Cash and cash equivalents 1.7 M€ 90 1.6 – Unused committed credit facilities available M€ 320 – Funds available for acquisitions approx. M€ 400-500 0.68 0.66 0.64 0.61 0.5
Slide 17: Debt maturity further extended with new Bond issuance
Debt maturity further extended with new Bond issuance Debt maturity structure 800 700 – Extension of debt maturity 600 – M€ 150 Schuldschein issued 500 in April 400 – M€ 150 bond (7-year) issued in early October at 300 1.625% coupon 200 – Average maturity after debt 100 extension 4.8 years (3.8*) M€
Slide 18: Free cash flow burdened by high capex
Free cash flow burdened by high capex 294 286 – Capex significantly above prior year level due to growth investments: 79 – LTM capex M€ 248 of which the 2 2 2 5 North America segment M€ M€ 137 (55%) -1 -17 -18 -57 -38 -38 – Other major investment areas -94 -95 China, India and Poland -144 – High rec
Slide 19: Solid financial position
Solid financial position M€ Sep 2017 Dec 2016 Sep 2016 Total assets 2,912 2,875 2,725 – As a result of active investment agenda Operating working capital 534 515 533 → Higher asset base with rolling 12 month capex at M€ 248 Net debt 741 675 681 → Higher net debt despite higher EBITDA Equity & non-co
Slide 20: Progress towards our long-term ambitions
Progress towards our long-term ambitions YTD Long-term FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3 2017 ambition Organic growth 3% 3% 6% 4% 4% 3% 5+% EBITDA margin 10.9% 11.2% 11.6% 12.5% 13.3% 13.1% 14+% EBIT margin 7.0% 7.4% 7.8% 8.7% 9.4% 9.0% 10+% ROI 12.6% 12.1% 12.6% 14.7% 14.7% 13.9% 15+% ROE
Slide 21: Outlook 2017
Outlook 2017 The Group’s trading conditions are expected to remain relatively stable during 2017. 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 22: Q3 2017 by business segment
Q3 2017 by business segm: Huhtamaki
Slide 23: Foodservice Europe-Asia-Oceania: Solid profitability
Foodservice Europe-Asia-Oceania: Solid profitability 2016 Net sales M€ 741 YTD 2017 M€ 601 EBIT margin 8.5%1 8.7% 8 – Healthy volume development in paper cups 6 – Good development in Eastern Europe continued 4 – Negative impact of weak pound sterling on the UK business 2 159 194 195 193 193 205 203
Slide 24: North America: Profitability affected by higher costs
North America: Profitability affected by higher costs 2016 Net sales M€ 1,005 YTD 2017 M€ 757 EBIT margin 10.7% 9.9% 12 – Capacity constraints in key categories continued 10 – Initial ramp-up in the Arizona plant begun, also 8 affecting operating cash flow and costs 6 4 – Strong growth in private la
Slide 25: Flexible Packaging: Return to growth
Flexible Packaging: Return to growth 2016 Net sales M€ 869 YTD 2017 M€ 686 EBIT margin 8.5% 7.4% 8 – Comparable net sales growth 7% 6 – India -3% in the quarter, however good 4 growth in September 2 – Good growth in Middle East, Southeast Asia 0 and Europe -2 214 218 221 217 232 224 230 -4 – Margins
Slide 26: Fiber Packaging: Sales growth – weaker mix
Fiber Packaging: Sales growth – weaker mix 2016 Net sales M€ 268 YTD 2017 M€ 213 EBIT margin 12.9% 10.7% 10 – Sales in Western Europe impacted by 8 pesticide scandal 6 – Shift to lower priced packaging 4 – Lack of eggs on the market 2 – South Africa suffering from avian influenza 66 66 67 69 72 72 6
Slide 27: Growing into a preferred global food packaging brand – next steps
Growing into a preferred global food packaging brand – next steps
Slide 28: 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 29: … 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 30: We target long-term growth both organically and via acquisitions
We target long-term growth both organically and via acquisitions 3-5 year growth ambition 5+% + 5+% 10+% € 5+bn p.a. if major Comparable Acquisitive acquisition growth growth ambition ambition € 4+bn with capex and add-on acquisitions Net sales Comparable growth 2010 2011 2012 2013 2014 2015 2016* 3
Slide 31: Growth and operational efficiency drive profitability improvement
Growth and operational efficiency drive profitability improvement – Summary of our new 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 grow
Slide 32: We have built a unique global footprint…
We have built a unique global footprint… Manufacturing units 2010 New manufacturing units 2011-2014 32 Roadshow presentation October-December 2017 New manufacturing units 2015-2016 Sales only Head office
Slide 33: 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’ loremipsum capabilities loremipsum lives easier loremipsum - Follow global
Slide 34: Helping great products reach more people, more easily
Helping great products reach more people, more easily
Slide 35: Appendices
Appendices
Slide 36: Group financials 2009-2016
Group financials 2009-2016 2016 2015 2014 (1 2013 (1 2012 (2 2011 2010 2009 Net sales M€ 2,865 2,726 2,236 2,161 2,321 2,043 1,952 1,832 Comparable growth (3 % 4 4 6 3 3 5 3 -5 Adjusted EBITDA (4 M€ 382 342 259 242 254 208 214 193 Margin (4 % 13.3 12.5 11.6 11.2 10.9 10.2 11.0 10.5 Adjusted EBIT (4
Slide 37: Year to date profitability on previous year's level despite headwinds during the quarter
Year to date profitability on previous year’s level despite headwinds during the quarter M€ Q3 17 Q3 16 Change Q1-Q3 17 Q1-Q3 16 Change Q3 17 Highlights Net sales 732.0 719.2 2% 2,243.3 2,133.5 5% – Volume growth Adjusted EBITDA1 94.0 96.1 -2% 294.4 286.6 3% – Headwinds in Q3 Margin 12.8% 13.4% 13.1
Slide 38: Quarterly comparable growth by business segment since 2015
Quarterly comparable growth by business segment since 2015 Long-term Q3 17 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15 FY 16 FY 15 FY 14 ambition Foodservice E-A-O 4% 2% 3% 3% 5% 7% 7% 8% 6% 2% 3% 5% 4% 4% 5-7% North America 2% 1% 2% 5% 2% 8% 10% 5% 7% -2% 7% 6% 4% 6% 2-5% Flexible P
Slide 39: Growth case
Growth case Huhtamaki invests M$100 in expansion to the US west coast – A world class manufacturing and distribution unit is being set up in Goodyear, Arizona, close to Phoenix – Serves southwest and west coast foodservice packaging and retail tableware markets with full range of foodservice packagi
Slide 40: Growth case
Growth case Focus on growth in foodservice packaging in China… Integration of foodservice packaging Acquisition of IP’s foodservice packaging manufacturing operations in Southern China manufacturing operations in China – Consolidation of the foodservice packaging – Two manufacturing units located in
Slide 41: Growth case
Growth case … improves our geographic coverage – Strong, modern operations in Southern China – Entry into the greater Shanghai area – Strengthened capability in Northern China – Total population covered by our operations > 1 bn – Areas of highest disposable income Manufacturing unit Acquired manufac
Slide 42: 13 acquisitions completed since 2011
13 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 43: Ownership
Ownership Shareholder distribution by sector September 30, 2017 – 32,198 registered shareholders at the end of September 2017 6% – 54% of shares in domestic ownership 10% – 16% of shares controlled by non-profit 46% 6% organizations – Finnish Cultural Foundation a 16% major owner since 1943, current
Slide 44: Financial calendar 2018
Financial calendar 2018 February 14 Week 8 Results 2017 Annual Accounts 2017 & Directors’ Report April 25 July 20 October 25 Q1 18 Interim Report Half-yearly Report Q3 18 Interim Report AGM 2018 44 Roadshow presentation October-December 2017
Slide 45: 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 46: For further information, please contact us:
For further information, please contact us: www.huhtamaki.com » Investors ir@huhtamaki.com