Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q1 2024 Earnings Presentation
25 slides from Huhtamaki Oyj's earnings presentation, Apr 25, 2024
Slide 1: Improved operational profitability
Improved operational profitability Interim Report Q1 2024 Charles Héaulmé, President and CEO Thomas Geust, CFO
Slide 2: Improved operational profitability
Improved operational profitability • Market trends – Demand trend improving from H2 2023 with variations by product category and geography – The Israel-Hamas war and Red Sea crisis impacted both the Foodservice E-A-O and Flexible Packaging segments • Financial performance – Comparable net sales -2%;
Slide 3: Efficiency program well underway and contributing to Q1 2024 profitability improvement
Efficiency program well underway and contributing to Q1 2024 profitability improvement Program targets MEUR 100 savings in 2024-26 Execution progressed as expected in Q1 2024 Sourcing • Efficiency program leading to savings of appr. EUR 100 • Initiatives in execution in all four areas, achieving in
Slide 4: Business performance
Business performance 4 April 25, 2024 Q1 2024
Slide 5: Q1 2024: Sales volumes stabilized, net sales weighed on by currencies and pricing
Q1 2024: Sales volumes stabilized, net sales weighed on by currencies and pricing Development of net sales in Q1 2024 Net sales decreased 4% in Q1 2024 (EUR million) • Comparable net sales decreased 2% -26 (-3 % in emerging markets). Flat 0 0 -17 volumes but decrease in sales prices • -2% currency i
Slide 6: Signs of demand improvement but with variations between segments
Signs of demand improvement but with variations between segments Long-term Comparable net sales growth Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 ambitions Foodservice E-A-O 11% 5% -3% -5% -5% 4-5% North America 2% 1% 1% 4% -3% 5-6% Flexible Packaging -5% -11% -11% -9% -1% 6-7% Fiber Packaging 17% 7% 4% 2% 1% 3-
Slide 7: Adjusted EBIT supported by actions to improve profitability
Adjusted EBIT supported by actions to improve profitability MEUR Q1 24 Q1 23 Change Net sales 1,003.9 1,047.1 -4% Adjusted EBIT1 98.8 92.1 7% Margin 9.8% 8.8% Adjusted EPS, EUR2 0.55 0.51 7% Capital expenditure 36.6 65.2 -44% Significant growth in adj. EBIT: • Adj. EBIT increased and margin improved
Slide 8: Business segment review
Business segment review 8 April 25, 2024 Q1 2024
Slide 9: Foodservice EAO: Increased margin despite geopolitical headwinds
Foodservice EAO: Increased margin despite geopolitical headwinds Key figures, MEUR Q1 24 Q1 23 Change Net sales and comparable growth (EUR million & %) Net sales 241.1 256.2 -6% 256 271 260 Comparable growth -5% 11% 241 250 Adjusted EBIT1 22.0 21.2 4% 2023 Margin 9.1% 8.3% 2024 11% -5% 5% -3% -5% Co
Slide 10: North America: Significant profitability improvement in Q1 with flat volumes
North America: Significant profitability improvement in Q1 with flat volumes Key figures, MEUR Q1 24 Q1 23 Change Net sales and comparable growth (EUR million & %) Net sales 344.1 358.1 -4% 358 373 378 Comparable growth -3% 2% 344 348 Adjusted EBIT 1 47.9 42.5 13% 2023 Margin 13.9% 11.9% 2024 2% -3%
Slide 11: Flexible Packaging: Continued profitability recovery with flat volumes
Flexible Packaging: Continued profitability recovery with flat volumes Key figures, MEUR Q1 24 Q1 23 Change Net sales and comparable growth (EUR million & %) Net sales 335.2 349.1 -4% Comparable growth -1% -5% 349 335 328 344 320 Adjusted EBIT 1 21.6 21.4 1% 2023 Margin 6.4% 6.1% 2024 -5% -1% -11% -
Slide 12: Fiber Packaging: Sales volumes turned positive
Fiber Packaging: Sales volumes turned positive Key figures, MEUR Q1 24 Q1 23 Change Net sales and comparable growth (EUR million & %) Net sales 85.0 86.9 -2% Comparable growth 1% 17% 87 85 86 89 81 Adjusted EBIT1 8.6 10.5 -18% 2023 Margin 10.1% 12.1% 2024 17% 1% 7% 4% 2% Comp. Capital expenditure 3.
Slide 13: Financial review
Financial review 13 April 25, 2024 Q1 2024
Slide 14: Adjusted EBIT growth continued with improved margins
Adjusted EBIT growth continued with improved margins Q1 2024: MEUR Q1 24 Q1 23 Change • Continued adj. EBIT growth and margin improvement Net sales 1,003.9 1,047.1 -4% Adjusted EBITDA 1 149.0 140.5 6% • Reported EBIT weighed on by IAC’s, particularly the China restructuring 1 and Malaysia site closu
Slide 15: Currency impact remained negative
Currency impact remained negative Average Average Change in Change in Closing rates rate rate average closing Q1 23 Q1 24 rate Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 rate (YoY) USD 1.07 1.09 -1 % 1.09 1.09 1.05 1.11 1.08 1% Foreign currency INR 88.25 90.18 -2 % 89.36 89.71 87.64 92.45 90.13 -1% translation i
Slide 16: Continued to deleverage balance sheet
Continued to deleverage balance sheet Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.1 Covenant level 3.75 • At the end of Q1 2024: • Cash and cash equivalents EUR 354 million (264) 2.4 2.5 Ambition • Unused committed credit facilities 2.3 2.2 1,426 1,453 2.1 2–3 available EU
Slide 17: Loan maturities
Loan maturities Debt maturity structure March 31, 2024 • Average maturity 2.6 years at the (EUR million) end of Q1 2024 (2.8 at the end of 700 Q1 2023) 600 500 400 300 200 100 0 2024 2025 2026 2027 2028 Later Lease liabilities Available unused committed facilities Drawn committed credit facilities C
Slide 18: Free cash flow decreased due to change in working capital
Free cash flow decreased due to change in working capital Free cash flow bridge Cash flow impacted by: (EUR million) 138 138 • Lower capex due to timing • Negative impact from other receivables and liabilities 38 43 10 5 2 0 -8 -9 -11 -12 -17 -37 -55 -65 Reported Change in Net financial Taxes Capita
Slide 19: Financial position continued to improve
Financial position continued to improve MEUR Mar 2024 Mar 2023 • The financial position strengthened during the quarter Total assets 4,768 4,787 • Most figures improving yoy Working capital 608 758 Net debt 1,249 1,426 Equity & non-controlling interest 2,000 1,927 Gearing 0.62 0.74 Adjusted ROI1 11.
Slide 20: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2017 2018 2019 2020 2021 2022 2023 Q1 24 ambition Comparable net sales growth 3% 5% 6% -2% 7% 15% -2% -2% 5-6% Adjusted EBIT margin 9.0% 8.1% 8.6% 9.1% 8.8% 8.8% 9.4% 9.8% 10-12% Adj. ROI 13.6% 11.6% 12.3% 11.7% 11.3% 11.0% 11.2% 11.5% 13-15%
Slide 21: Looking forward
Looking forward 21 April 25, 2024 Q1 2024
Slide 22: Outlook for 2024 and short-term risks and uncertainties
Outlook for 2024 and short-term risks and uncertainties Outlook for 2024 (unchanged) Short-term risks and uncertainties The Group’s trading conditions are expected to Decline in consumer demand, inflation in key cost improve compared to 2023. Volatility in the items (including raw materials, labor,
Slide 23: Reporting schedule in 2024
Reporting schedule in 2024 July 25, 2024 October 24, 2024 Half-yearly Report 2024 Q3 2024 Interim Report September 4, 2024 Site visit to Hammond (near Chicago) 23 April 25, 2024 Q1 2024
Slide 24: 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 25: Thank You
Thank You ir@huhtamaki.com www.huhtamaki.com/investors