Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (June 2018)
46 slides from Huhtamaki Oyj's roadshow presentation, June 2018
Slide 1: Roadshow presentation April-June 2018
Roadshow presentation April-June 2018
Slide 2: We're the global specialist in packaging for food and drink
We’re the global specialist in packaging for food and drink Net sales EBIT margin Our ambition €3.0bn 9.0% The preferred global Comparable growth ROI food packaging brand 3% 13.6% Employees Manufacturing sites Our purpose 17,600 76 Helping great products Operations in reach more people, 34 countries
Slide 3: We're well positioned to deliver on our ambitions
We’re well positioned to deliver on our ambitions Who we are: Who we serve: What we offer: Main materials we use: FOODSERVICE #1 packaging company Paperboard operating globally FIBER PACKAGING #1 company globally Recycled fibers FLEXIBLE PACKAGING Plastic & other #1 company in emerging markets mater
Slide 4: Our three business areas are organized into four reporting segments
Our three business areas are organized into four reporting segments Foodservice Flexible Fiber Share of net sales packaging packaging packaging per segment in 2017 9% 27% 31% 33% Foodservice Europe-Asia- Flexible Packaging Fiber Packagingj Oceania and North America kdfgjkl dhgdfhg – 40 plants on – 2
Slide 5: Foodservice E-A-O: Geared for profitable growth
Foodservice E-A-O: Geared for profitable growth Foodservice paper and plastic disposable tableware, such as cups and lids, is supplied to foodservice operators, fast food restaurants and coffee shops. The segment has production in Europe, South Africa, Middle East, Asia and Oceania. Our products Our
Slide 6: North America: Continue on the growth path
North America: Continue on the growth path The North America segment serves local markets with foodservice packaging, Chinet® disposable tableware as well as ice-cream containers and other consumer goods packaging products. The segment has production in the United States and Mexico. Our products Our
Slide 7: Flexible Packaging: Strengthening our position
Flexible Packaging: Strengthening our position Flexible packaging is used for a wide range of consumer products including food, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Middle East, Asia and South America. Our products Our competi
Slide 8: Fiber Packaging: Focus on profitable growth to enhance our positions
Fiber Packaging: Focus on profitable growth to enhance our positions Recycled and other natural fibers are used to make fresh product packaging, such as egg, fruit, food and drink packaging. The segment has production in Europe, Oceania, Africa and South America. Our products Our competitive MEUR Lo
Slide 9: Q1 2018: Solid comparable growth, negative currency impact
Q1 2018: Solid comparable growth, negative currency impact
Slide 10: Good underlying organic growth in Q1
Good underlying organic growth in Q1 6 Net sales growth split in Q1 18 760 -59 39 – 5% comparable growth with all 739 business segments contributing 725 700 – 8% in emerging markets; Eastern Europe, India and MEA leading – 1% from acquisitions 640 – Negative currency translation impact of MEUR 59 (a
Slide 11: Solid comparable growth across business segments
Solid comparable growth across business segments Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 2017 Long-term ambitions Foodservice E-A-O 5% 6% 4% 2% 3% 4% 5-7% North America 5% 2% 2% 1% 2% 2% 2-5% Flexible Packaging 6% 9% 7% -2% 3% 4% 6-8% Fiber Packaging 5% 4% 5% 8% 4% 5% 5-7% Group 5% 5% 4% 1% 3% 3% 5+% – Flexib
Slide 12: Currency headwind impacted earnings negatively
Currency headwind impacted earnings negatively MEUR Q1 18 Q1 17 Change FY 2017 Q1 18 Highlights Net sales 725.2 739.4 -2% 2,988.7 – Currency impact on EBITDA 90.1 94.0 -4% 389.71 earnings EUR -4 million; in Margin 12.4% 12.7% 13.0%1 comparable currencies EBIT 60.0 62.8 -4% 267.71 earnings improved s
Slide 13: Significant negative currency impact
Significant negative currency impact Closing rates Average Foreign currency Average Q1 rate Q1 rate 2017 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 2018 translation impact USD 1.06 1.07 1.14 1.18 1.19 1.24 1.23 INR 71.35 69.69 73.71 77.11 76.47 80.80 79.10 Q1 18: GBP 0.86 0.86 0.88 0.88 0.89 0.88 0.88 MEUR -59 o
Slide 14: Inflationary pressures on raw materials
Inflationary pressures on raw materials 140 – Prices for plastic resins 130 increased across markets 120 – Prices for paperboard were 110 higher than previous year 100 – Prices of recycled fiber varied; low in Europe, high 90 in North America 80 70 60 PS PP PE +0.8% -0.4% -2.3% (end of Q1 18 vs. end
Slide 15: Debt position remained stable
Debt position remained stable Covenant level 3.5 AMBITION – Net debt/EBITDA stable at 1.8 2-3 – At the end of Q1 18 – Cash and cash equivalents MEUR 111 1.7 1.9 1.9 1.8 1.8 – Unused committed credit facilities available MEUR 311 – Funds available for acquisitions approx. MEUR 400-500 0.56 0.66 0.64
Slide 16: Loan maturities extended in the course of 2017
Loan maturities extended in the course of 2017 Debt maturity structure March 31, 2018 800 700 – Average maturity 4.4 years at the end of Q1 2018 (3.7 at 600 the end of Q1 2017) 500 400 300 200 100 MEUR0 2018 2019 2020 2021 2022 Later Finance lease liabilities Commercial paper program Uncommitted loa
Slide 17: Free cash flow reflecting seasonality
Free cash flow reflecting seasonality – Capex reflecting project timing – Working capital reflects Easter season in Q1; high MEUR 90 94 inventories and high receivables 0 0 0 -3 -4 -10 -6 -2 -9 -33 -18 -46 -47 -60 Reported Change in Net financial Taxes Capital Proceeds Other Free cash EBITDA working
Slide 18: Solid financial position
Solid financial position Mar Dec Mar MEUR 2018 2017 2017 Total assets 2,938 2,931 2,946 – Dividend of approx. MEUR 83 paid Operating working capital 562 512 533 early May Net debt 712 698 681 – Dividend of €0.80 per share Equity & non-controlling interest 1,220 1,208 1,222 → Payout ratio 42% Gearing
Slide 19: Progress towards long-term ambitions
Progress towards long-term ambitions FY FY FY FY FY Long-term 2013 2014 2015 2016 2017 Q1 2018 ambition Organic growth 3% 6% 4% 4% 3% 5% 5+% – Q1 performance EBITDA margin 11.2% 11.6% 12.5% 13.3% 13.0% 12.4% 14+% reflects low season EBIT margin 7.4% 7.8% 8.7% 9.4% 9.0% 8.3% 10+% and ramping up organ
Slide 20: Outlook 2018
Outlook 2018 The Group’s trading conditions are expected to remain relatively stable during 2018. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same
Slide 21: Q1 2018 by business segment
018 by business segment Huhtamaki
Slide 22: Foodservice Europe-Asia-Oceania: Significant earnings improvement
Foodservice Europe-Asia-Oceania: Significant earnings improvement Net sales MEUR 808 MEUR 199 EBIT margin1 8.7% 9.7% 8 2017 – Healthy volume development of core 6 paperboard product range, especially in Europe 4 – Good progress with global key accounts 2 193 205 203 207 199 – Earnings improved signi
Slide 23: North America: Back on growth track
North America: Back on growth track Net sales MEUR 1,000 MEUR 227 EBIT margin 10.4% 7.2% 6 2017 – Healthy volume growth led by retail business – Chinet® brand and private label tableware 4 developing well 2 – Growth helped by more capacity on stream 247 274 235 244 227 – Strong currency headwind 0 –
Slide 24: Flexible Packaging: Volume growth accelerating
Flexible Packaging: Volume growth accelerating Net sales MEUR 913 MEUR 234 EBIT margin 7.6% 7.5% 10 2017 – Solid volume growth across markets, driven 8 by India 6 4 – Strong currency headwind 2 – Net sales EUR -13 million 0 – Profitability EUR -1 million -2 232 224 230 227 234 – Earnings impacted by
Slide 25: Fiber Packaging: Profit improved
Fiber Packaging: Profit improved Net sales MEUR 285 MEUR 70 EBIT margin 9.9% 11.4% 10 2017 – Solid comparable net sales growth 8 – Strong development in Russia continued 6 – Good volume development in Brazil and 4 South Africa 2 – Low sales prices impacting North West 72 72 69 72 70 0 Europe Q1 17 Q
Slide 26: Building the best food packaging company in the world – next steps
Building the best food packaging company in the world – next steps
Slide 27: Megatrends support food packaging growth…
Megatrends support food packaging growth… Food packaging offers stable Innovations create more growth opportunities Food contact sustainable and easy-to-use over the cycle requirements create packaging a higher entry barrier Megatrends create opportunities for us More people Growing middle class Mor
Slide 28: … and our positions offer good opportunities
… and our positions offer good opportunities Focus on consumer Major brand food and drink owners with high growth packaging ambitions as customers Product portfolio Geographic and innovations expansion Our growth opportunities Mature markets Developing markets approx. GDP growth + 2% even GDP growth
Slide 29: World changes create opportunities
World changes create opportunities Global challenges: – Marine plastics – Waste handling and processing – Food safety Changing consumer habits: – Lifestyle & convenience – Home delivery
Slide 30: We target long-term growth both organically and via acquisitions
We target long-term growth both organically and via acquisitions 3-5 year growth ambition 5+% + 5+% 10+% € 5+bn p.a. if major Comparable Acquisitive acquisition growth growth ambition ambition € 4+bn with capex and add-on acquisitions Net sales Comparable growth 2010 2011 2012 2013 2014 2015 2016* 2
Slide 31: Growth and operational efficiency drive profitability improvement
Growth and operational efficiency drive profitability improvement – Summary of our long-term ambitions Comparable growth 5+% 10+% 15+% 40-50% EBIT ROI DPS margin 5+% Balancing both EBIT margin and asset velocity → To deliver steadily improving returns Acquisitive growth → To ensure cash for growth i
Slide 32: We have made major investments in growth in 2010-2017
We have made major investments in growth in 2010-2017 Short-run flexible Paper and plastic packaging, disposable packaging, Eastern Europe 2013-2017 China & HK Capex M€ 809 Folding carton, M&A spend Pressed UAE, Bags & Malaysia Europe M€2) 473 plates, US wraps, USA, Egypt, Corrugated Russia US, UK,
Slide 33: Our main footprint actions in 2017
Our main footprint actions in 2017 Decided to invest in MEUR 100 investment new unit in Finland in Arizona, US Acquired two new units in China Greenfield flexible One new, modern packaging unit in Egypt plant in South China Opened two new 33 Roadshow presentation April-June 2018 plants in India
Slide 34: Acquisition of Tailored Packaging – national distribution network in Australia
Acquisition of Tailored Packaging – access to a national network of distribution centers in Australia – Foodservice packaging distribution and wholesale group based in Sydney – Ability to efficiently service main states across the country and strong sourcing capability – Debt free purchase price (fo
Slide 35: Ajanta Packaging further strengthens our labeling business in India
Ajanta Packaging further strengthens our labeling business in India – Leader in Pressure Sensitive labels in India with two manufacturing units – Complementary to existing Huhtamaki business with similar customer base – Expansion of printing technologies to Dry-Offset and Flexo-Gravure Combination p
Slide 36: How we support our customers' growth
How we support our customers’ growth We invest to expand We’re a safe pair of We offer a wide We take innovation our network and to hands throughout product range to into next level improve our our network make our customers’ loremipsum capabilities loremipsum lives easier loremipsum - Follow global
Slide 37: Helping great products reach more people, more easily
Helping great products reach more people, more easily
Slide 38: Appendices
Appendices
Slide 39: Group financials 2009-2017
Group financials 2009-2017 2017 2016 2015 2014 (1 2013 (1 2012 (2 2011 2010 2009 Net sales MEUR 2,988.7 2,865 2,726 2,236 2,161 2,321 2,043 1,952 1,832 Comparable growth (3 % 3 4 4 6 3 3 5 3 -5 Adjusted EBITDA (4 MEUR 389.7 382 342 259 242 254 208 214 193 Margin (4 % 13.0 13.3 12.5 11.6 11.2 10.9 10
Slide 40: Profitability remained at good level in Q1 2018
Profitability remained at good level in Q1 2018 MEUR Q1 18 Q1 17 Change FY 2017 Q1 18 highlights Net sales 725.2 739.4 -2% 2988.7 – Good volume growth and EBITDA 90.1 94.0 -4% 389.71 significant currency headwind Margin 12.4% 12.7% 13.0%1 – MEUR -59 in topline EBIT 60.0 62.8 -4% 267.71 – MEUR -4 in
Slide 41: Quarterly comparable growth by business segment since 2016
Quarterly comparable growth by business segment since 2016 Long- term Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 FY 17 FY 16 FY 15 ambition Foodservice E-A-O 5% 6% 4% 2% 3% 3% 5% 7% 7% 4% 5% 4% 5-7% North America 5% 2% 2% 1% 2% 5% 2% 8% 10% 2% 6% 4% 2-5% Flexible Packaging 6% 9% 7% -2% 3%
Slide 42: 16 acquisitions completed since 2011
16 acquisitions completed since 2011 – Paris Packaging, Inc., US, September 2011 (North America) – Ample Industries, Inc., US, November 2011 (North America) – Josco (Holdings) Limited, China, April 2012 (Foodservice E-A-O) – Winterfield, LLC, US, August 2012 (North America) – Webtech Labels Private
Slide 43: Ownership
Ownership Shareholder distribution by sector March 31, 2018 – 30,271 registered shareholders at the end of March 2018 5% – 53% of shares in domestic ownership 10% – 16% of shares controlled by non-profit 6% 47% organizations – Finnish Cultural Foundation a 15% major owner since 1943, current ownersh
Slide 44: Financial calendar 2018
Financial calendar 2018 July 20 Half-yearly Report 2018 October 25 Q3 18 Interim Report 44 Roadshow presentation April-June 2018
Slide 45: 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 46: For further information, please contact us:
For further information, please contact us: www.huhtamaki.com » Investors ir@huhtamaki.com