Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q1 2021 Earnings Presentation
27 slides from Huhtamaki Oyj's earnings presentation, Apr 22, 2021
Slide 1: Improved profitability with a gradual recovery in demand
Improved profitability with a gradual recovery in demand Interim Report Q1 2021 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Improved profitability with a gradual recovery in demand
Improved profitability with a gradual recovery in demand • The gradual recovery in demand for food on-the-go products has continued. Strong continued demand for fiber packaging and retail tableware • Significant tension in supply and price of raw materials – especially in polymers and recycled fiber
Slide 3: Business performance
Business performance Huhtamaki
Slide 4: Flat organic growth impacted by negative currency impact
Flat organic growth impacted by negative currency impact Development of net sales in Q1 2021 Net sales -5% in Q1 2021 (EUR million) • Comparable net sales flat -3 6 (4% in emerging markets) -46 • 1% growth from acquisitions 845 • 5% negative currency impact 802 Q1 2020 Organic Acquisitions Currency
Slide 5: Gradual recovery for food on-the-go, slow progress in Flexible Packaging
Gradual recovery for food on-the-go, slow progress in Flexible Packaging Long-term Comparable growth Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 2020 ambitions Foodservice E-A-O -4% -28% -1% -7% -2% -10% 5-7% North America 9% -5% 4% -2% -2% 1% 3-5% Flexible Packaging 2% 2% 1% 0% 0% 1% 6-8% Fiber Packaging 9% 10%
Slide 6: Strong adjusted EBIT adding to the progress made in previous quarters
Strong adjusted EBIT adding to the progress made in previous quarters MEUR Q1 21 Q1 20 Change 2020 Net sales 801.9 844.6 -5% 3,301.8 1 Adjusted EBIT 77.0 73.6 5% 302.1 Margin 9.6% 8.7% 9.1% Adjusted EPS, EUR2 0.49 0.46 7% 1.95 Capital expenditure 33.0 39.4 -16% 223.5 • Net sales decreased due to FX
Slide 7: Business segment review
Business segment review Huhtamaki
Slide 8: Foodservice EAO: Gradual recovery in demand
Foodservice EAO: Gradual recovery in demand Key figures, MEUR Q1 21 Q1 20 Change Net sales and comparable growth (EUR million and %) Net sales 207.4 217.6 -5% Comparable growth -2% -4 % 218 231 1 207 213 Adjusted EBIT 17.6 17.5 1% 167 2020 Margin 8.5% 8.0% 2021 Adjusted RONA 7.7% 10.9% -4% -2% -28%
Slide 9: Acquisition of Jiangsu Hihio-Art Packaging Co. Ltd in China
Acquisition of Jiangsu Hihio-Art Packaging Co. Ltd in China Jiangsu Hihio-Art Packaging Co. Ltd. Net sales (announced on April 21, 2021) Approximately EUR 20 million Employees • A leading manufacturer of paper bags, wraps and folding carton Approximately 200 packaging in China Debt free purchase pri
Slide 10: North America: Continued strong performance
North America: Continued strong performance Key figures, MEUR Q1 21 Q1 20 Change Net sales and comparable growth (EUR million and %) Net sales 256.0 286.2 -11% Comparable growth -2% 9% 286 296 Adjusted EBIT1 31.2 30.4 2% 256 283 274 2020 Margin 12.2% 10.6% 2021 Adjusted RONA 17.0% 14.0% 9% -2% -5% 4
Slide 11: Flexible Packaging: Slow progress in organic growth
Flexible Packaging: Slow progress in organic growth Key figures, MEUR Q1 21 Q1 20 Change Net sales and comparable growth (EUR million and %) Net sales 267.1 271.0 -1% Comparable growth 0% 2% 271 267 263 266 Adjusted EBIT1 21.7 20.9 4% 251 2020 Margin 8.1% 7.7% 2021 Adjusted RONA 10.1% 10.5% 2% 0% 2%
Slide 12: Fiber Packaging: Continued strong demand and performance
Fiber Packaging: Continued strong demand and performance Key figures, MEUR Q1 21 Q1 20 Change Net sales and comparable growth (EUR million and %) Net sales 78.6 74.5 5% Comparable growth 4% 9% 85 Adjusted EBIT1 9.5 8.2 15% 75 79 76 72 2020 Margin 12.1% 11.0% 2021 Adjusted RONA 16.1% 13.1% 9% 4% 10%
Slide 13: Financial review
Financial review Huhtamaki
Slide 14: Adjusted EBIT margin increased to 9.6%
Adjusted EBIT margin increased to 9.6% MEUR Q1 21 Q1 20 Change 2020 • Lower net sales due to negative Net sales 801.9 844.6 -5% 3,301.8 impact from COVID-19 on foodservice products Adjusted EBITDA1 117.8 117.0 1% 473.1 Margin 1 14.7% 13.9% 14.3% • Earnings improved following favorable sales mix and
Slide 15: Continued negative currency impact
Continued negative currency impact Average Average Change in Change in Closing rates rate rate average closing Q1 2020 Q1 2021 rate rate Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 (YoY) USD 1.10 1.21 -9% 1.10 1.13 1.17 1.23 1.17 -6% Foreign currency translation impact INR 79.80 87.95 -10% 83.50 85.19 86.28 89.88
Slide 16: Net debt to adjusted EBITDA decreased compared to Q1/2020
Net debt to adjusted EBITDA decreased compared to Q1/2020 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 1.9 Covenant level 3.75 • At the end of Q1 2021: • Cash and cash equivalents EUR 272 million Ambition • Unused committed credit facilities 2.1 2–3 available EUR 323 million
Slide 17: Loan maturities
Loan maturities Debt maturity structure March 31, 2021 • Average maturity 3.4 years at the (EUR million) end of Q1 2021 (3.2 at the end of Q1 2020) 700 600 • Unused committed credit facilities 500 of EUR 323 million maturing in 400 2022 300 • New syndicated multicurrency 200 revolving credit facilit
Slide 18: Positive free cash flow in a seasonally weak quarter
Positive free cash flow in a seasonally weak quarter Free cash flow bridge Cash flow driven by: (EUR million) • Higher EBITDA margin • In comparison period, Laminor 130 gain of ~20 MEUR is recognized 115 as non-cash in ‘Other’ • Working capital well managed • In comparison period, working 8 capital
Slide 19: Stable financial position
Stable financial position MEUR Mar 2021 Mar 2020 • Total assets lower mainly due to negative impact from currencies Total assets 3,746 3,824 • Net debt and gearing decreased Operating working capital 570 636 Net debt 898 980 -> Stable financial position Equity & non-controlling interest 1,456 1,444
Slide 20: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 Q1 2021 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% -0% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 9.6% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 1.9 2-3 Dividend payout ratio 4
Slide 21: Looking forward
Looking forward Huhtamaki
Slide 22: Outlook 2021
Outlook 2021 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 opportuniti
Slide 23: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic is a significant short-term risk potentially creating disturbance in the Group’s trading conditions and its operating environment, as well as in demand for the Group’s products. Volatile raw material and energy prices as well as movements in c
Slide 24: Gradual recovery with improved profitability
Gradual recovery with improved profitability • The gradual recovery in demand for food on-the-go products has continued • Strong continued demand for fiber packaging and retail tableware • Significant tension in supply and price of raw materials • Our transformation journey continues, with focus on
Slide 25: Financial calendar 2021
Financial calendar 2021 July 22, 2021 Half-yearly Report October 21, 2021 Q3 2021 Interim Report 25 April 22, 2021 Interim Report Q1 2021
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 April 22,Report Interim 27 2021 Q1 2021