Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (March 2022)
70 slides from Huhtamaki Oyj's roadshow presentation, March 2022
Slide 1: Becoming the first choice in sustainable packaging solutions
Becoming the first choice in sustainable packaging solutions Roadshow presentation February–March 2022
Slide 2: Our 100-year Nordic legacy provides a strong foundation
Our 100-year Nordic legacy provides a strong foundation on our road to becoming the first choice in sustainable packaging solutions globally 2 March 4.3.2022 April 22, 4,2021 2022 Q1 2022 Corporate Huhtamaki Presentation General to shareholders Presentation | Charles Héaulmé
Slide 3: We believe in protecting food, people and the planet
We believe in protecting food, people and the planet… … enabling wellbeing and convenience for people around the world
Slide 4: What our purpose means
What our purpose means • Packaging creates value by securing hygiene, food availability and food safety for consumers around the globe. • Packaging also plays an instrumental role in reducing We believe in protecting food, people food waste, which remains by far the biggest and the planet and enabli
Slide 5: 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 5 March 4, 2022 Q1 2022 Corp
Slide 6: A strong local presence, delivering for our customers, globally
A strong local presence, delivering for our customers, globally (Figures for 2021) NET SALES €3.6B ADJUSTED EBIT MARGIN 8.8% OPERATING LOCATIONS 114 OPERATING COUNTRIES 38 EMPLOYEES 19,564 6 March 4, 2022 Q1 2022 Corporate Presentation
Slide 7: We operate through three business areas
We operate through three business areas Fiber and Foodservice North America Flexible Packaging Net sales per business Europe-Asia-Oceania area (2021) 34 manufacturing units and 18 manufacturing units and 27 manufacturing units and 33% 35% operations in 28 countries operations in 2 countries operatio
Slide 8: 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 • The future consumer will require packaging to be innovative, individual and sustainable • Digitalization will influence packaging and the way we do business • Sustain
Slide 9: Packaging brings real value to society
Packaging brings real value to society Hygiene Food safety Packaging promotes hygiene and Packaging keeps food safe from spoilage prevents spread of disease and preserves its original properties Food availability Food waste prevention Packaging enables food availability Globally, 1/3 of food is wast
Slide 10: 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 11: 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 12: First choice in sustainable food packaging
We are committed to high financial and sustainability ambitions Our ambition First choice in sustainable food packaging 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 re
Slide 13: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors March Q1 13 2022 4, Corporate 2022 Presentation
Slide 14: 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 15: Appendix: The role of packaging
Appendix: The role of packaging
Slide 16: 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 17: 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 -4,491 kg CO2 eq. 13,403 kg CO2 eq. 634 kg CO2 eq. 3,453 kg CO2 eq. Multi-use tableware systems generate over PLASTIC MULTI-USE PAPER-BASED TABLEWARE* 2.8 times higher CO2-e SINGLE-USE
Slide 18: 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% 10% of global GHG emissions come from of global GHG emissions come from wasted food systems or lost food Source: CGIAR Research Program on Climate Change, Agriculture and Food Se
Slide 19: 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 19 March 4, 2022 Q1 2022 Corporate Presentation
Slide 20: Only a small share of CO2 emissions of a latte 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 21: Consumer awareness and efficient collection, sorting and recycling 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 21 Mar
Slide 22: 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 22 March 4, 2022 Q1 2022 Corporate Presentation
Slide 23: 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 24: Appendix: Segments and financials
Appendix to be updated! Appendix: Segments and financials
Slide 25: Operating model: We are a converter
Operating model: We are a converter 25 March 4, 2022 Q1 2022 Corporate Presentation
Slide 26: 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 27: 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 €1,160 mn ADJUSTED EBIT MARGIN 12.0% #1 globally operating EM
Slide 28: 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 €1,167 mn ADJUSTED EBIT MARGIN 6.8% #
Slide 29: 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 Centr
Slide 30: 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 31: 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 32: Segment key figures (2/2)
Segment key figures (2/2) North America Key figures (MEUR) 2014 2015 2016 2017 20181 2019 2020 2021 Long-term ambition Net sales 769.3 947.7 1,005.1 1,000.4 1,002.7 1,152.7 1,138.9 1,160.3 Comparable growth 6% 4% 6% 2% 5% 9% 1% 6% 3-5% Adjusted EBIT 38.4 88.2 107.6 104.1 73.0 111.4 136.6 139.1 Margi
Slide 33: Group financials 2011-2021
Group financials 2011-2021 2011 20122 20131 20141 2015 2016 2017 20182 2019 2020 2021 Net sales MEUR 2,043 2,321 2,161 2,236 2,726 2,865 2,989 3,104 3,399 3,302 3,575 Comparable growth3 5% 3% 3% 6% 4% 4% 3% 5% 6% -2% 7% Adjusted EBITDA4 MEUR 208 254 242 259 342 382 390 399 456 473 488 Margin4 10.2%
Slide 34: Comparable net sales growth by business segment
Comparable net sales growth by business segment Quarterly 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 Q3 21 Q4 21 Foodservice E-A-O 5% 5% 5% 3% 4% 3% 4% 4% -4% -28% -1% -7% -2% 40% 2% 12% North America 5% 2% 2% 11% 5% 13% 14% 6% 9% -5% 4% -2% -2% 9% 5% 11% Fle
Slide 35: Solid track record of growth investments
Solid track record of growth investments Paper and Huhtamaki plastic CAPEX M&A spend blueloop disposable packaging, 1,571 1,043 China & HK Pressed 2014–2021 Short-run Ireland Fresh ready- (EUR million) plates, US flexible meal trays, packaging, UK Eastern Europe Folding Labels, India Corrugated Bags
Slide 36: 23 acquisitions completed since 2011
23 acquisitions completed since 2011 Date (completed) Acquired company Country Acquiring segment Jan 2022 Huhtamaki Smith Anderson sp. z o.o (joint venture acquired fully) Poland Foodservice E-A-O Sep 2021 Elif Holding A.Ş. Turkey Flexible Packaging Jun 2021 Jiangsu Hihio-Art Packaging Co. Ltd China
Slide 37: Appendix: Shareholders and management
Appendix: Shareholders and management
Slide 38: 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. Varma Mutual Pension Insurance Company 3,645,809 3.38 % 700,000 23.76 % 3. Huhtamäki Oyj 3,395,709 3.15 %
Slide 39: 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) 50,000 54% 5% 1% 52% 4% 45,000 7% 50% 40,000 8% 48% 35,000 56% 8% 46% 30
Slide 40: Global Executive Team
Global Executive Team Charles Héaulmé Marco Hilty Eric Le Lay Ann O’Hara Thomas Geust President and CEO President, Flexible Packaging President, Fiber and President, North America CFO Foodservice EAO Thomasine Kamerling Marina Madanat Sami Pauni Ingolf Thom Antti Valtokari EVP Sustainability EVP Str
Slide 41: 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 42: Results 2021
Results 2021: Strong net sales growth and solid profitability in a challenging market
Slide 43: Delivering on our transformation, in 2021's challenging environment
Delivering on our transformation, in 2021’s challenging environment • Strong growth – driven by positive impact of acquisitions, pricing actions and recovery of food service • Challenging environment - caused by supply chain disruption leading to extraordinary inflation • Innovation pipeline- launch
Slide 44: In 2021, our strong innovation pipeline delivered sustainable packaging solutions
In 2021, our strong innovation pipeline delivered sustainable packaging solutions for our customers McDonald's Sundae cup and cold cup lid Paperboard yogurt cup Push Tab® paper Fiber Foodservice EAO North America Flexible Packaging Next Generation ElifNatty & ElifProLite Home Delivery Range Smilepac
Slide 45: Business performance
Business performance Huhtamaki
Slide 46: Q4 2021: Strong comparable net sales growth
Q4 2021: Strong comparable net sales growth Development of net sales in Q4 2021 Net sales increased 23% in Q4 2021 (EUR million) • Comparable net sales growth 12% 24 (19% in emerging markets) 65 • 8% from acquisitions – including Elif 98 and Hihio-Art acquisitions 999 • 3% positive currency impact 8
Slide 47: FY 2021: Strong comparable net sales growth
FY 2021: Strong comparable net sales growth Development of net sales in 2021 Net sales increased 8% in 2021 (EUR million) • Comparable net sales growth 7% (13% in emerging markets) 77 -54 250 • 2% from acquisitions – including Elif and Hihio-Art acquisitions 3,575 3,302 • -2% negative currency impac
Slide 48: Growth driven by continued in-home consumption and foodservice recovery
Growth driven by continued in-home consumption supported by recovery in foodservice categories Long-term Comparable growth Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 2020 2021 ambitions Foodservice E-A-O -7% -2% 40% 2% 12% -10% 11% 5-7% North America -2% -2% 9% 5% 11% 1% 6% 3-5% Flexible Packaging -0% 0% 6% 7% 1
Slide 49: Growth in Q4 accelerated - boosted by acquisitions and pricing
Growth in Q4 accelerated - boosted by acquisitions and pricing to offset cost inflation MEUR Q4 21 Q4 20 Change 2021 2020 Change Net sales 999.5 812.8 23% 3,574.9 3,301.8 8% Adjusted EBIT1 82.2 72.8 13% 315.3 302.1 4% Margin 8.2% 9.0% 8.8% 9.1% Adjusted EPS, EUR2 0.54 0.48 13% 2.07 1.95 6% Capital e
Slide 50: Embedding sustainability in everything we do – 2021 Highlights
Embedding sustainability in everything we do – 2021 Highlights 2021 Full Year performance Other highlights • Good performance on ESG ratings; improvement on S&P Global CSA, Ecovadis, CDP’s water, climate and forest assessments • First European VPPA signed with 200GWh of new renewable electricity ann
Slide 51: Business segment review
Business segment review Huhtamaki
Slide 52: Foodservice EAO: Continued recovery throughout the year
Foodservice EAO: Continued recovery throughout the year Key figures, MEUR Q4 21 Q4 20 Change Net sales and comparable growth (EUR million & %) Net sales 254.0 213.5 19% Comparable growth 12% -7% Adjusted EBIT1 19.5 15.5 25% Margin 7.7% 7.3% Comp. Capital expenditure 40.5 31.6 28% growth 1 Operating
Slide 53: North America: Strong performance despite inflationary environment
North America: Strong performance despite increasingly inflationary environment Key figures, MEUR Q4 21 Q4 20 Change Net sales and comparable growth (EUR million & %) Net sales 314.7 274.0 15% Comparable growth 11% -2% Adjusted EBIT1 33.9 32.2 5% Margin 10.8% 11.8% Comp. Capital expenditure 36.2 35.
Slide 54: Flexible Packaging: Strong growth, supported by Elif acquisition
Flexible Packaging: Strong growth, supported by Elif acquisition – slight improvement in cost mitigation in Q4 Key figures, MEUR Q4 21 Q4 20 Change Net sales and comparable growth (EUR million & %) Net sales 344.8 250.8 38% Comparable growth 12% -0% Adjusted EBIT1 24.5 17.9 36% Margin 7.1% 7.2% Comp
Slide 55: Fiber Packaging: Growth impacted by softened demand in egg packaging
Fiber Packaging: Growth impacted by softened demand in egg packaging Key figures, MEUR Q4 21 Q4 20 Change Net sales and comparable growth (EUR million & %) Net sales 91.5 85.4 7% Comparable growth 2% 8% Adjusted EBIT1 10.7 12.7 -15% Margin 11.7% 14.8% Comp. Capital expenditure 22.2 22.5 -1% growth 1
Slide 56: Financial review
Financial review Huhtamaki
Slide 57: Solid adjusted EBIT margin
Solid adjusted EBIT margin MEUR Q4 21 Q4 20 Change 2021 2020 Change Net sales 999.5 812.8 23% 3,574.9 3,301.8 8% • Sales growth supported by all Adjusted EBITDA 1 130.3 116.8 12% 488.4 473.1 3% segments in Q4, Elif acquisition contributed positively Margin 1 13.0% 14.4% 13.7% 14.3% Adjusted EBIT2 82
Slide 58: Currency impact remained positive in Q4 2021
Currency impact remained positive in Q4 2021 Average Average Change in Change in Closing rates rate rate average closing 2020 2021 rate Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 rate (YoY) (YoY) USD 1.14 1.18 -4% 1.23 1.17 1.19 1.17 1.13 8% Foreign currency INR 84.54 87.50 -4% 89.88 86.25 88.31 86.47 84.26 6% t
Slide 59: Net debt to adjusted EBITDA increased following acquisition
Net debt to adjusted EBITDA increased following acquisition Net debt, net debt/adj. EBITDA and gearing • Acquisition of Elif impacting Covenant level 3.75 balance sheet: 3.1 • Net debt/Adj. EBITDA increased 3.0 1,520 to 3.1 at year-end 1,404 Ambition • Gearing 0.95 2.1 2.0 2–3 • Ratios presented exc
Slide 60: Loan maturities
Loan maturities Debt maturity structure December 31, 2021 (EUR million) • MEUR 400 syndicated revolving 700 credit facility extended in Dec. 600 2021 for an additional year 500 • To support the financing of Elif 400 Huhtamaki signed, in August 300 2021, a bridge financing facility of MUSD 500 200 •
Slide 61: Free cash flow impacted by working capital and higher cash taxes
Free cash flow impacted by working capital and higher cash taxes Free cash flow bridge Cash flow impacted by: (EUR million) • Adjusted EBITDA at previous year’s level 470 465 • In comparison period, Laminor gain of ~20 MEUR is recognized as non- cash in ‘Other’ 207 • Large change in working capital
Slide 62: Stable financial position, also post Elif acquisition
Stable financial position, also post Elif acquistion MEUR Dec 2021 Dec 2020 • Acquisition of Elif mainly impacting balance sheet at Dec 31, 2021 Total assets 4,542 3,596 • Assets increased Operating working capital 684 514 Net debt 1,520 867 • Net debt and gearing increased Equity & non-controlling
Slide 63: The Board 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) 2021* 2020 Change 65% Adjusted EPS 2.07 1.95 6% Dividend per share 0.94 0.92 2% 53% 50% 50% 47% 47% 47% 47% 47% Long-term ambition: Payout ratio 45% 47% 45% Payout ratio 42
Slide 64: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 2021 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% 7% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 3.1 2-3 Dividend payout ratio 47% 4
Slide 65: Looking forward
Looking forward Huhtamaki
Slide 66: Outlook 2022
Outlook 2022 The Group’s trading conditions are expected to improve compared to 2021, 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 67: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic may create further disturbances in the Group’s trading conditions and its operating environment, as well as in demand for the Group’s products. Availability and cost of raw material, distribution and energy as well as movements in currency rat
Slide 68: Financial calendar 2022
Financial calendar 2022 Week commencing April 27, 2022 February 28, 2022 Q1 2022 Interim Report, Annual Report 2021 Annual General Meeting July 21, 2022 October 21, 2022 Half-yearly Report 2022 Q3 2022 Interim Report 68 March 4, 2022 Q1 2022 Corporate Presentation
Slide 69: 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 70: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors March Q1 70 2022 4, Corporate 2022 Presentation