Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q3 2021 Earnings Presentation
33 slides from Huhtamaki Oyj's earnings presentation, Oct 21, 2021
Slide 1: Solid performance despite a challenging cost environment
Solid performance despite a challenging cost environment Interim Report Q3 2021 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Solid performance despite a challenging cost environment
Solid performance despite a challenging cost environment • Solid growth, especially in emerging markets. Recovery in food on-the-go packaging accelerated • Significant inflationary cost environment impacted profitability, despite mitigation actions. Overall successful pass-through of raw material in
Slide 3: Business performance
Business performance Huhtamaki
Slide 4: Q3 2021: Solid comparable net sales growth
Q3 2021: Solid comparable net sales growth Development of net sales in Q3 2021 Net sales increased 6% in Q3 2021 (EUR million) • Comparable net sales growth 4% 6 3 (5% in emerging markets) 40 • 1% from acquisitions – Elif impact from Q4 onwards 896 847 • Slight positive currency impact Q3 2020 Organ
Slide 5: Q1-Q3 2021: Solid growth, especially in the emerging markets
Q1-Q3 2021: Solid growth, especially in the emerging markets Development of net sales in Q1-Q3 2021 Net sales increased 3% in Q1-Q3 2021 (EUR million) • Comparable net sales growth 6% 12 152 -78 (11% in emerging markets) • Positive impact from acquisitions – Elif impact from Q4 onwards 2,489 2,575 •
Slide 6: Continued growth in all segments
Continued growth in all segments Long-term Comparable growth Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q1-Q3 20 Q1-Q3 21 ambitions Foodservice E-A-O -1% -7% -2% 40% 2% -11% 11% 5-7% North America 4% -2% -2% 9% 5% 2% 4% 3-5% Flexible Packaging 1% -0% 0% 6% 7% 2% 4% 6-8% Fiber Packaging 7% 8% 4% 1% 2% 9% 2% 3-5%
Slide 7: Raw material cost impact visible in Q3
Raw material cost impact visible in Q3 MEUR Q3 21 Q3 20 Change Q1-Q3 21 Q1-Q3 20 Change Net sales 896.3 847.3 6% 2,575.3 2,489.0 3% 1 Adjusted EBIT 76.3 85.5 -11% 233.1 229.2 2% Margin 8.5% 10.1% 9.1% 9.2% Adjusted EPS, EUR2 0.51 0.56 -10% 1.53 1.46 4% Capital expenditure 62.3 40.6 54% 147.2 120.3 2
Slide 8: Business segment review
Business segment review Huhtamaki
Slide 9: Foodservice EAO: Continued recovery in demand
Foodservice EAO: Continued recovery in demand Key figures, MEUR Q3 21 Q3 20 Change Net sales and comparable growth (EUR million & %) Net sales 244.6 230.8 6% Comparable growth 2% -1% 236 245 218 231 207 213 Adjusted EBIT 1 20.7 21.7 -4% 2020 167 Margin 8.5% 9.4% 2021 -4% -2% -28% 40% -1% 2% -7% Comp
Slide 10: North America: Foodservice and retail tableware driving growth
North America: Foodservice and retail tableware driving growth Key figures, MEUR Q3 21 Q3 20 Change Net sales and comparable growth (EUR million & %) Net sales 294.3 282.6 4% Comparable growth 5% 4% 286 296 295 283 294 256 274 1 2020 Adjusted EBIT 35.8 36.0 -1% Margin 12.2% 12.7% 2021 9% -2% -5% 9%
Slide 11: Flexible Packaging: Solid growth, headwind from raw material prices
Flexible Packaging: Solid growth, headwind from raw material prices Key figures, MEUR Q3 21 Q3 20 Change Net sales and comparable growth (EUR million & %) Net sales 283.9 266.0 7% 271 271 284 Comparable growth 7% 1% 267 263 266 251 1 2020 Adjusted EBIT 17.0 22.7 -25% Margin 6.0% 8.5% 2021 2% 0% 2% 6
Slide 12: Fiber Packaging: Continued growth, higher raw material prices impacting earnings
Fiber Packaging: Continued growth, higher raw material prices impacting earnings Key figures, MEUR Q3 21 Q3 20 Change Net sales and comparable growth (EUR million & %) Net sales 83.3 72.2 15% 83 85 Comparable growth 2% 7% 79 76 80 75 72 1 2020 Adjusted EBIT 7.9 8.0 -1% Margin 9.5% 11.1% 2021 9% 4% 1
Slide 13: Elif acquisition
Elif acquisition Huhtamaki
Slide 14: Elif acquisition helps to reinforce leadership position in emerging markets
Elif acquisition helps to reinforce leadership position in emerging markets • A trusted long-term partner for major global consumer brand owners in Europe, Middle East and Africa • Manufactures consumer packaging for e.g. diapers & feminine care, detergents, tissue paper and wet wipes, food and pet
Slide 15: Combined portfolio offers a comprehensive range of solutions across food and non-food products
Combined portfolio offers a comprehensive range of solutions across food and non-food products Food & beverage Personal care Home care Pet care Industrial, retail & other • Dried food • Feminine care • Laundry detergents • Pet food • Retail & shopping Product • Confectionery • Baby & adult diapers •
Slide 16: The acquisition is in line with Huhtamaki's 2030 growth strategy sustainability ambitions
The acquisition is in line with Huhtamaki’s 2030 growth strategy sustainability ambitions Strengthening existing footprint Complimentary technologies Embedding sustainability and portfolio • Reinforces Huhtamaki’s position as a • Expands Huhtamaki’s technology • Elif has a similarly strong focus on
Slide 17: The acquisition of Elif makes strategic and financial sense for us
The acquisition of Elif makes strategic and financial sense for us Attractive multiples Net sales in 2020 Approx. EUR 163 million • Elif has grown since 2020 • Earnings’ accretive, with significantly higher profit than Huhtamaki Employees • Previous acquisitions broadly in the range of 8-10x EV/EBIT
Slide 18: Flexible Packaging is key to our 2030 growth strategy
Flexible Packaging is key to our 2030 growth strategy • Global flexible packaging market is estimated to grow at CAGR 6.1% until 2030 • Flexible packaging has great sustainability value − Makes food and products available everywhere − Light to transport − Ensures hygiene and food safety − Reduces th
Slide 19: Financial review
Financial review Huhtamaki
Slide 20: Earnings decreased due to increased input costs
Earnings decreased due to increased input costs MEUR Q3 21 Q3 20 Change Q1-Q3 21 Q1-Q3 20 Change • Sales growth supported by all Net sales 896.3 847.3 6% 2,575.3 2,489.0 3% segments in Q3 Adjusted EBITDA 1 119.2 127.2 -6% 358.0 356.3 0% • Input costs impacted earnings Margin 1 13.3% 15.0% 13.9% 14.3
Slide 21: Currency impact turned slightly positive in Q3 2021
Currency impact turned slightly positive in Q3 2021 Average Average Change in Change in Closing rates rate rate average closing Q1-Q3 20 Q1-Q3 21 rate Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 rate (YoY) USD 1.12 1.20 -7% 1.17 1.23 1.17 1.19 1.17 (YoY) 0% Foreign currency INR 83.39 88.09 -6% 86.28 89.88 86.25 8
Slide 22: 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 3.0 • Net debt/Adj. EBITDA increased to 3.0 1,404 Ambition • Gearing increased to 0.96 2.1 2.0 2–3 • Ratios presented excluding pro
Slide 23: Loan maturities
Loan maturities Debt maturity structure September 30, 2021 • To support the financing of the (EUR million) acquisition of Elif, Huhtamaki signed in August 2021 a bridge 700 financing facility of USD 500 million 600 500 • Committed credit facilities at the 400 end of Q3 2021 (including the bridge fin
Slide 24: Free cash flow below last year's level
Free cash flow below last year’s level Free cash flow bridge Cash flow driven by: (EUR million) • Adjusted EBITDA at previous 363 year’s level 337 • In comparison period, Laminor gain of ~20 MEUR is recognized as non-cash in ‘Other’ 150 • Large change in working capital 28 1 1 mainly following incre
Slide 25: Stable financial position also after acquisition of Elif
Stable financial position also after acquisition of Elif MEUR Sep 2021 Sep 2020 • Acquisition of Elif mainly impacting balance sheet in Q3 Total assets 4,418 3,685 • Higher total assets Operating working capital 690 590 Net debt 1,404 896 • Increased net debt and gearing Equity & non-controlling int
Slide 26: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 Q1-Q3 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% 9.1% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 3.0 2-3 Dividend payout ratio
Slide 27: Looking forward
Looking forward Huhtamaki
Slide 28: 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 29: 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 30: Solid performance despite a challenging cost environment
Solid performance despite a challenging cost environment • Solid growth, especially in emerging markets. Recovery in food on-the-go packaging accelerated • Significant inflationary cost environment impacted profitability, despite mitigation actions. Overall successful pass-through of raw material in
Slide 31: Financial calendar 2022
Financial calendar 2022 February 10, 2022 April 27, 2022 July 21, 2022 October 21, 2022 Results 2021 Q1 2022 Interim Report, Half-yearly Report 2022 Q3 2022 Interim Report Annual General Meeting Week commencing February 28, 2022 Annual Report 2021 31 October 21, 2021 Interim Report Q3 2021
Slide 32: 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 33: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors OctoberReport Interim 33 21, 2021 Q3 2021