Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — FY2022 Earnings Presentation
30 slides from Huhtamaki Oyj's earnings presentation, Feb 9, 2023
Slide 1: Strong performance in a volatile environment
Strong performance in a volatile environment Results 2022 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Strong performance in a volatile environment
Strong performance in a volatile environment • Volatility continues – Variations in input cost development. Softening demand in many categories and geographies • Financial performance – Continued strong performance with 9% comparable sales growth in Q4 and 15% in 2022. Strong growth in adj. EBIT; Q4
Slide 3: Investing in next-generation innovation
Investing in next-generation innovation • Development of paper-based coffee capsules − Based on our proprietary high-precision technology • Other launches in 2022 − ICON - recyclable paper ice-cream packaging in North America − bluelooptm PaperLid − Push Tab® blister lid − OmniLock™ ultra paper fle
Slide 4: Evolving EU Packaging & Packaging Waste Regulation
Evolving EU Packaging & Packaging Waste Regulation, as proposed, will have positive and negative impacts Objective and content of PPWR proposal Regulation not a done deal • Mixed business implications • Legislative process lengthy and complex − Requirement for recyclability at-scale − Ongoing scruti
Slide 5: Business performance
Business performance Huhtamaki
Slide 6: Q4 2022: Continued strong organic growth
Q4 2022: Continued strong organic growth Development of net sales in Q4 2022 Net sales increased 10% in Q4 2022 (EUR million) • Comparable net sales growth 9% (6 % in emerging markets), driven by 0 -28 46 87 pricing • -3% from divestment 1,104 999 • 5% positive currency impact Q4 2021 Organic Acquis
Slide 7: FY 2022: Solid growth throughout the year
FY 2022: Solid growth throughout the year Development of net sales in 2022 Net sales increased 25% during 2022 (EUR million) • Comparable net sales growth 15% 187 -37 234 (16 % in emerging markets), driven by 520 pricing 4,479 • 5% mainly from Elif acquisition 3,575 • -1% from divestment • 6% positi
Slide 8: Growth remained strong in most segments
Growth remained strong in most segments Long-term Comparable growth Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 2021 2022 ambitions Foodservice E-A-O 12% 18% 18% 22% 15% 11% 18% 5-7% North America 11% 24% 14% 10% 10% 6% 14% 3-5% Flexible Packaging 12% 18% 19% 20% 1% 7% 14% 6-8% Fiber Packaging 2% 8% 16% 19% 17% 2
Slide 9: Improved adjusted EBIT despite inflation
Improved adjusted EBIT despite inflation MEUR Q4 22 Q4 21 Change 2022 2021 Change Net sales 1,103.6 999.5 10% 4,479.0 3,574.9 25% Adjusted EBIT1 93.3 82.2 14% 395.1 315.3 25% Margin 8.5% 8.2% 8.8% 8.8% Adjusted EPS, EUR2 0.65 0.54 20% 2.49 2.07 20% Capital expenditure 133.2 112.2 19% 318.5 259.4 23%
Slide 10: Sustainability Dashboard
Sustainability Dashboard – Good overall progress in line with our trajectory to reach our 2030 commitments Renewable or recycled materials Renewable electricity Non-hazardous waste recycled Health and safety (% of total materials) (% of total electricity consumed) (% of total non-haz. waste) 2030 Lo
Slide 11: Business segment review
Business segment review Huhtamaki
Slide 12: Foodservice EAO: Strong sales growth continued
Foodservice EAO: Strong sales growth continued Key figures, MEUR Q4 22 Q4 21 Change Net sales and comparable growth (EUR million & %) Net sales 266.7 254.0 5% Comparable growth 15% 12% 289 300 255 254 267 236 245 Adjusted EBIT 1 24.2 19.5 24% 207 2021 Margin 9.1% 7.7% 2022 -2 % 18 % 40 % 18 % 2% 22
Slide 13: North America: Growth continued, margin remained strong
North America: Growth continued, margin remained strong Key figures, MEUR Q4 22 Q4 21 Change Net sales and comparable growth (EUR million & %) Net sales 383.6 314.7 22% Comparable growth 10% 11% 375 372 384 337 315 Adjusted EBIT1 49.0 33.9 45% 295 294 2021 256 Margin 12.8% 10.8% 2022 -2 % 24 % 9% 14
Slide 14: Flexible Packaging: Challenging market conditions and one-off item impacting Q4 profitability
Flexible Packaging: Challenging market conditions and one-off item impacting Q4 profitability Key figures, MEUR Q4 22 Q4 21 Change Net sales and comparable growth (EUR million & %) Net sales 369.1 344.8 7% 421 Comparable growth 1% 12% 378 391 369 345 Adjusted EBIT1 15.5 24.5 -37% 267 271 284 2021 Ma
Slide 15: Fiber Packaging: Strong growth and profitability
Fiber Packaging: Strong growth and profitability Key figures, MEUR Q4 22 Q4 21 Change Net sales and comparable growth (EUR million & %) Net sales 87.4 91.5 -4% Comparable growth 17% 2% 95 91 89 91 87 1 79 80 83 2021 Adjusted EBIT 11.1 10.7 4% Margin 12.7% 11.7% 2022 4% 8% 1% 16% 2% 19% 2% 17% Comp.
Slide 16: Financial review
Financial review Huhtamaki
Slide 17: Higher sales are driving improved earnings
Higher sales are driving improved earnings MEUR Q4 22 Q4 21 Change 2022 2021 Change • Q4 earnings improved following increased net sales, continued focus Net sales 1,103.6 999.5 10% 4,479.0 3,574.9 25% on operational efficiency, weighed 1 Adjusted EBITDA 143.3 130.3 10% 596.9 488.4 22% on by the Rus
Slide 18: Continued positive currency impact
Continued positive currency impact Average Average Change in Change in Closing rates rate rate average closing 2021 2022 rate Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 rate (YoY) USD 1.18 1.05 11 % 1.13 1.11 1.05 0.97 1.06 6% Foreign currency INR 87.50 82.70 5% 84.26 84.38 83.04 79.31 88.23 -5% translation impa
Slide 19: Net debt to adjusted EBITDA unchanged from Q3
Net debt to adjusted EBITDA unchanged from Q3 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.5 Covenant level 3.75 • At the end of Q4 2022: 3.1 • Cash and cash equivalents 3.0 3.0 3.0 EUR 309 million 2.5 Ambition 1,626 2.5 • Unused committed credit facilities 1,572 1,404 1,52
Slide 20: Loan maturities
Loan maturities Debt maturity structure December 31, 2022 • Average maturity 3.2 years at the (EUR million) end of Q4 2022 (2.6 at the end of Q4 2021) 700 600 • 63% of gross debt with fixed rates, 500 37% in floating 400 • Increased interest rate 300 200 100 0 2023 2024 2025 2026 2027 Later Lease li
Slide 21: Free cash flow impacted by working capital and capital expenditure
Free cash flow impacted by working capital and capital expenditure Free cash flow bridge Strong free cash flow in Q4 2022 (EUR million) of EUR 71 million 615 Full-year cash flow impacted by: 470 • Strong growth in EBITDA • Significant change in working capital mainly following increase 8 11 0 11 in
Slide 22: Stable financial position
Stable financial position MEUR Dec 2022 Dec 2021 • Assets mainly impacted by: • Divestment of Russia Total assets 4,821 4,542 • Currency impact Operating working capital 828 684 • Capex and operating working capital Net debt 1,471 1,520 • Operating working capital increased year on year due to highe
Slide 23: 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) 2022* 2021 Change 65% Adjusted EPS 2.49 2.07 20% Dividend per share 1.00 0.94 6% 53% 50% 50% Long-term ambition: 47% 47% 47% 47% 47% Payout ratio 45% Payout ratio 40% 45% 4
Slide 24: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2015 2016 2017 2018 2019 2020 2021 2022 ambition Organic growth 4% 4% 3% 5% 6% -2% 7% 15% 5+% Adjusted EBIT margin 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 8.8% 10+% Net debt/Adj. EBITDA 1.6 1.8 1.8 2.3 2.0 1.8 3.1 2.5 2-3 Dividend payout ratio 40%
Slide 25: Looking forward
Looking forward Huhtamaki
Slide 26: Outlook 2023
Outlook 2023 The Group’s trading conditions are expected to remain relatively stable, despite the continued volatility in the operating environment. Huhtamaki's diversified product portfolio provides resilience and the Group’s good financial position enables addressing profitable long-term growth op
Slide 27: Short-term risks and uncertainties
Short-term risks and uncertainties Significant and broad-based inflation (including raw materials, labor, distribution and energy), decline in consumer demand, availability of raw materials as well as movements in currency rates are considered to be relevant short-term business risks and uncertainti
Slide 28: Capital Markets Day to be arranged on March 28
Capital Markets Day to be arranged on March 28 March 28, 2023 April 27, 2023 July 20, 2023 October 20, 2023 Capital Markets Day 2023 Q1 2023 Interim Report Half-yearly Report 2023 Q3 2023 Interim Report in Espoo, Finland Annual General Meeting March 1, 2023 Annual Report 2022 28 February 9, 2023 Res
Slide 29: 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 30: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors 30 February 9, 2023 Results 2022