Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q1 2023 Earnings Presentation
27 slides from Huhtamaki Oyj's earnings presentation, Apr 27, 2023
Slide 1: Stable development in a challenging market
Stable development in a challenging market Interim Report Q1 2023 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Q1 2023: Stable development in a challenging market
Q1 2023: Stable development in a challenging market • Market trends − In line with latter part of 2022, overall demand impacted by continued inflation pressure on consumption − More predictable supply chain, evidenced by destocking and return to seasonality • Financial performance − Comparable sales
Slide 3: Updated 2030 strategy launched at Capital Markets Day 2023
Updated 2030 strategy launched at Capital Markets Day 2023 • The current substantial transformation in Long-term financial ambitions packaging creates profitable growth opportunities for Huhtamaki Absolute EPS growth • Our 2030 Profitable Growth Strategy is built on 4 imperatives: − Scale our prof
Slide 4: Flexible Packaging: launching a ground-breaking solution setting new industry standards
Flexible Packaging: launching a ground-breaking solution setting new industry standards in Paper, PE and PP Retort RECYCLA B I LI T Y PROTECTION • Recycling of flexible packaging made possible, complex • Protection and shelf life – structures made simple – no compromise on protecting highest level o
Slide 5: Business performance
Business performance Huhtamaki
Slide 6: Q1 2023: Comparable sales growth despite demand headwinds
Q1 2023: Comparable sales growth despite demand headwinds Development of net sales in Q1 2023 Net sales unchanged in Q1 2023 (EUR million) • Comparable net sales growth 2% 0 21 -23 0 (0 % in emerging markets), driven by pricing 1,050 1,047 • -2% from divestment • 0% currency impact Q1 2022 Organic A
Slide 7: Foodservice E-A-O and Fiber Packaging driving growth
Foodservice E-A-O and Fiber Packaging driving growth Long-term Comparable growth Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 ambitions Foodservice E-A-O 18% 18% 22% 15% 11% 4-5% North America 24% 14% 10% 10% 2% 5-6% Flexible Packaging 18% 19% 20% 1% -5% 6-7% Fiber Packaging 8% 16% 19% 17% 17% 3-4% Group 19% 17% 1
Slide 8: Adjusted EBIT decreased
Adjusted EBIT decreased MEUR Q1 23 Q1 22 Change Net sales 1,047.1 1,049.7 -0% Adjusted EBIT1 92.1 97.5 -6% Margin 8.8% 9.3% Adjusted EPS, EUR2 0.51 0.63 -19% Capital expenditure 65.2 76.4 -15% Q1 commentary: • Adjusted EBIT decreased mainly due to lower sales volumes and the divestment of operations
Slide 9: Business segment review
Business segment review Huhtamaki
Slide 10: Foodservice EAO: Strong sales growth continued
Foodservice EAO: Strong sales growth continued Key figures, MEUR Q1 23 Q1 22 Change Net sales and comparable growth (EUR million & %) Net sales 256.2 254.7 1% Comparable growth 11% 18% 289 300 255 256 267 Adjusted EBIT 1 21.2 25.6 -17% 2022 Margin 8.3% 10.0% 2023 18% 11% 18% 22% 15% Comp. Capital ex
Slide 11: North America: Growth with improving margins
North America: Growth with improving margins Key figures, MEUR Q1 23 Q1 22 Change Net sales and comparable growth (EUR million & %) Net sales 358.1 337.5 6% Comparable growth 2% 24% 375 372 384 337 358 Adjusted EBIT1 42.5 38.8 9% 2022 Margin 11.9% 11.5% 2023 24% 2% 14% 10% 10% Comp. Capital expendit
Slide 12: Flexible Packaging: Challenging market conditions impacting sales and profitability
Flexible Packaging: Challenging market conditions impacting sales and profitability Key figures, MEUR Q1 23 Q1 22 Change Net sales and comparable growth (EUR million & %) Net sales 349.1 377.7 -8% 421 Comparable growth -5% 18% 378 391 369 349 Adjusted EBIT1 21.4 29.4 -27% 2022 Margin 6.1% 7.8% 2023
Slide 13: Fiber Packaging: Strong growth and profitability
Fiber Packaging: Strong growth and profitability Key figures, MEUR Q1 23 Q1 22 Change Net sales and comparable growth (EUR million & %) Net sales 86.9 90.9 -4% Comparable growth 17% 8% 95 91 87 89 87 Adjusted EBIT 1 10.5 7.5 40% 2022 Margin 12.1% 8.2% 2023 8% 17% 16% 19% 17% Comp. Capital expenditur
Slide 14: Financial review
Financial review Huhtamaki
Slide 15: Q1 2023 performance outweighed by Russia divestment and outperformance in Q1 2022
Q1 2023 performance outweighed by Russia divestment and outperformance in Q1 2022 MEUR Q1 23 Q1 22 Change • Sales impacted by soft demand, Net sales 1,047.1 1,049.7 -0% divestment of Russian operations and 1 support from pricing Adjusted EBITDA 140.5 146.6 -4% Margin 1 13.4% 14.0% • Adjusted EBIT de
Slide 16: No net currency impact in the quarter
No net currency impact in the quarter Average Average Change in Change in Closing rates rate rate average closing Q1 22 Q1 23 rate Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 rate (YoY) USD 1.12 1.07 4% 1.11 1.05 0.97 1.06 1.09 2% Foreign currency INR 84.42 88.25 -5 % 84.38 83.04 79.31 88.23 89.36 -6% translation
Slide 17: Net debt to adjusted EBITDA decreased from Q4
Net debt to adjusted EBITDA decreased from Q4 Net debt, net debt/adj. EBITDA and gearing Covenant level 3.75 • Net debt/Adj. EBITDA at 2.4 3.0 3.0 • At the end of Q1 2023: Ambition 2.5 2.5 2.4 • Cash and cash equivalents 1,572 1,626 1,483 1,471 2-3x EUR 264 million 1,426 • Unused committed credit fa
Slide 18: Loan maturities
Loan maturities Debt maturity structure March 31, 2023 • Average maturity 2.8 years at the (EUR million) end of Q1 2023 (2.6 at the end of Q1 2022) 700 600 • 62% of gross debt with fixed rates, 500 38% in floating 400 • Increased interest rate 300 200 100 0 2023 2024 2025 2026 2027 Later Lease liabi
Slide 19: Strong free cash flow supported by working capital
Strong free cash flow supported by working capital Free cash flow bridge Strong free cash flow in Q1 2023 (EUR million) Cash flow impacted by: 138 145 • Improvement in working capital compared to year-end key driver 43 • Somewhat lower capex due to 2 1 5 5 timing -9 -5 -12 -11 -17 -46 -65 -76 -104 R
Slide 20: Stable financial position
Stable financial position MEUR Mar 2023 Mar 2022 • Assets mainly impacted by divestment of business in Russia Total assets 4,787 4,810 • Operating working capital increased year Operating working capital 842 812 on year due to lower trade payables • Net debt below the previous year’s level, Net debt
Slide 21: Updated long-term financial ambitions
Updated long-term financial ambitions Long-term 2016 2017 2018 2019 2020 2021 2022 Q1 23 ambition Organic growth 4% 3% 5% 6% -2% 7% 15% 2% 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% 10.7% 13-15% Net debt/Adj. EBITDA 1.8
Slide 22: Looking forward
Looking forward Huhtamaki
Slide 23: Outlook 2023 (unchanged)
Outlook 2023 (unchanged) The Group’s trading conditions are expected to remain relatively stable, despite the continued volatility in the operating environment. Huhtamaki's diversified product portfolio provides resilience and the Group’s good financial position enables addressing profitable long-te
Slide 24: Short-term risks and uncertainties
Short-term risks and uncertainties Significant and broad-based inflation (including raw materials, labor, distribution and energy), decline in consumer demand, availability of raw materials as well as movements in currency rates are considered to be relevant short-term business risks and uncertainti
Slide 25: Upcoming events in 2023
Upcoming events in 2023 Apr 27, 2023 July 20, 2023 October 20, 2023 Annual General Meeting Half-yearly Report 2023 Q3 2023 Interim Report 25 April 27, 2023 Q1 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 April 27, 2023 Q1 2023