Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (June 2021)
62 slides from Huhtamaki Oyj's roadshow presentation, June 2021
Slide 1: Becoming the first choice in sustainable packaging solutions
Becoming the first choice in sustainable packaging solutions Roadshow presentation April-June 2021
Slide 2: 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 2 April–June 2021 Roadshow p
Slide 3: Huhtamaki operates on a global scale
Huhtamaki operates on a global scale Figures for 2020 NET SALES €3.3B ADJUSTED EBIT MARGIN 9.1% MANUFACTURING UNITS 81 OPERATING COUNTRIES 35 EMPLOYEES 18,227 3 April–June 2021 Roadshow presentation | Huhtamaki
Slide 4: We operate through 3 business areas
We operate through 3 business areas Fiber and Foodservice North America Flexible Packaging Net sales per business Europe-Asia-Oceania area (2020) 34 manufacturing units and 18 manufacturing units and 29 manufacturing units and 32% 34% operations in 28 countries operations in 2 countries operations i
Slide 5: Understanding the value of packaging within the broader sustainability context
Understanding the value of packaging within the broader sustainability context Hygiene Food safety Packaging promotes hygiene and prevents spread of Packaging keeps food safe from spoilage and disease preserves its original properties Food availability Food waste prevention Packaging enables food av
Slide 6: Our strategy builds on transformative trends impacting the future of packaging
Our strategy builds on transformative trends impacting the future of packaging • The next billion consumers will come from emerging markets • Future consumer will require packaging to be innovative, individual and sustainable • Digitalization will influence packaging and the way we do business • Sus
Slide 7: 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 8: 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 9: First choice in sustainable packaging solutions
We have high financial and sustainability ambitions Our ambition First choice in sustainable packaging solutions 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 renewable
Slide 10: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors April–June presentation Roadshow 10 2021 | Huhtamaki
Slide 11: 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 12: Appendix: The role of packaging
Appendix: The role of packaging
Slide 13: 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 14: 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 -4,597 kg CO2 eq. 13,604 kg CO2 eq. 703 kg CO2 eq. 3,457 kg CO2 eq. Multi-use tableware systems generate over PLASTIC MULTI-USE PAPER-BASED TABLEWARE* 2.7 times higher CO2-e SINGLE-USE
Slide 15: 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% 8% of global GHG emissions come from of global GHG emissions come from wasted food systems of lost food Source: CGIAR Research Program on Climate Change, Agriculture and Food Sec
Slide 16: 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 16 April–June 2021 Roadshow presentation | Huhtamaki
Slide 17: Only a small share of CO2 emissions of a latte on-the-go 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 18: Consumer awareness and efficient collection, sorting and recycling infrastructure are 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 18 Apr
Slide 19: 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 19 April–June 2021 Roadshow presentation | Huhtamaki
Slide 20: 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 21: Appendix: Segments and financials
Appendix: Segments and financials
Slide 22: Operating model: We are a converter
Operating model: We are a converter Key inputs Our activities Key outputs Key impacts Raw materials Advanced manufacturing Safe, convenient and fit-for-purpose Environment - Paperboard - Cup forming consumer packaging - Replacing non-renewable materials - Plastic resins - Folded carton production -
Slide 23: 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 24: 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 €1,139 mn ADJUSTED EBIT MARGIN 12.0% #1 globally operating EM
Slide 25: 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 €1,051 mn ADJUSTED EBIT MARGIN 7.7% #
Slide 26: 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 ROW C
Slide 27: 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 28: 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 29: Segment key figures (2/2)
Segment key figures (2/2) North America Key figures (MEUR) 2013 2014 2015 2016 2017 20181 2019 2020 Long-term ambition Net sales 725.3 769.3 947.7 1,005.1 1,000.4 1,002.7 1,152.7 1,138.9 Comparable growth 5% 6% 4% 6% 2% 5% 9% 1% 3-5% Adjusted EBIT 38.4 38.4 88.2 107.6 104.1 73.0 111.4 136.6 Margin 5
Slide 30: Group financials 2010-2020
Group financials 2010-2020 2010 2011 20122 20131 20141 2015 2016 2017 20182 2019 2020 Net sales MEUR 1,952 2,043 2,321 2,161 2,236 2,726 2,865 2,989 3,104 3,399 3,302 Comparable growth3 3% 5% 3% 3% 6% 4% 4% 3% 5% 6% -2% Adjusted EBITDA4 MEUR 214 208 254 242 259 342 382 390 399 456 473 Margin4 11.0%
Slide 31: Comparable net sales growth by business segment
Comparable net sales growth by business segment Quarterly Q1 17 Q2 17 Q3 17 Q4 17 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 Foodservice E-A-O 3% 2% 4% 6% 5% 5% 5% 3% 4% 3% 4% 4% -4% -28% -1% -7% -2% North America 2% 1% 2% 2% 5% 2% 2% 11% 5% 13% 14% 6% 9% -5% 4% -2
Slide 32: Solid track record of growth investments
Solid track record of growth investments Paper and Huhtamaki CAPEX M&A spend plastic blueloop disposable 1,433 624 packaging, China & HK 2013–2020 Pressed Short-run Ireland Fresh ready- (EUR million) plates, US flexible meal trays, packaging, UK Eastern Europe Folding Labels, India Corrugated Bags &
Slide 33: 20 acquisitions completed since 2011
20 acquisitions completed since 2011 Date (completed) Acquired company Country Acquiring segment Q3 2021 (TBC) Jiangsu Hihio-Art Packaging Co. Ltd China Foodservice E-A-O Mar 2020 Laminor S.A. Brazil Flexible Packaging Jan 2020 Mohan Mutha Polytech Private Limited India Flexible Packaging Dec 2019 E
Slide 34: Appendix: Shareholders and management
Appendix: Shareholders and management
Slide 35: 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. Huhtamäki Oyj 3,395,709 3.15% -15,000 -0.44% 3. Ilmarinen Mutual Pension Insurance Company 2,690,000 2.50% 0
Slide 36: 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) 45,000 54% 5% 1% 52% 4% 40,000 7% 50% 8% 35,000 48% 8% 56% 30,000 46% 44
Slide 37: Global Executive Team
Global Executive Team Charles Héaulmé Ann O’Hara Eric Le Lay Thomas Geust Thomasine Kamerling President and CEO President, North America President, Foodservice EAO CFO EVP Sustainability and Fiber Packaging and Communications Arup Basu, President, Flexible Packaging, decided to leave Huhtamaki on Ma
Slide 38: 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 39: Q1 2021 results
Q1 2021 results: Improved profitability with a gradual recovery in demand
Slide 40: Q1 2021: Net sales negatively impacted by effects from COVID-19
Q1 2021: Net sales negatively impacted by effects from COVID-19 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 Cu
Slide 41: 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 42: 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 43: Q1 2021 results: Business segment review
Q1 2021 results: Business segment review
Slide 44: 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 45: 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 46: 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 47: 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 48: 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 49: Q1 2021 results: Financials review
Q1 2021 results: Financials review
Slide 50: 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 51: 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 52: 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 53: 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 54: The Board of Directors 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) 2020 2019 Change 65% Adjusted EPS 1.95 1.88 4% Dividend per share 0.92 0.89 3% 53% 50% 50% 47% 47% 47% 47% 47% Long-term ambition: Payout ratio 47% 47% Payout ratio 42% 42%
Slide 55: 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 56: Q1 2021 results: Looking forward
Q1 2021 results: Looking forward
Slide 57: 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 58: 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 59: 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 60: Financial calendar 2021
Financial calendar 2021 July 22, 2021 Half-yearly Report October 21, 2021 Q3 2021 Interim Report 60 April–June 2021 Roadshow presentation | Huhtamaki
Slide 61: 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 62: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors