Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — FY2020 Earnings Presentation
32 slides from Huhtamaki Oyj's earnings presentation, Feb 11, 2021
Slide 1: Solid performance despite COVID-19 pandemic
Solid performance despite COVID-19 pandemic Results 2020 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Continued solid performance despite COVID-19 pandemic
Continued solid performance despite COVID-19 pandemic – Solid full year sales performance, continued profit improvement and strong cash flow, enabling continued investments into levers for growth – Gradual recovery in short-term demand has continued, however volatility remains especially for foodser
Slide 3: Our operating environment
Our operating environment Huhtamaki
Slide 4: 2020 has been a year of external disruption and internal transformation
2020 has been a year of external disruption and internal transformation EXTERNAL DISRUPTION INTERNAL TRANSFORMATION - Macroeconomy impacted by COVID-19 crisis - 2030 growth strategy finalized and rolled-out and continued geopolitical tensions with enhanced focus on sustainability, digitalization, in
Slide 5: Essential status and health and safety safeguards ensured business continuity to serve our customers
Essential status and health and safety safeguards ensured business continuity to serve our customers – During 2020, temporary close-down of operations in 14 out of 81 units, with only 3 units closed for more than 3 weeks – Operations have been closed during 1% of the time – We have constantly worked
Slide 6: Business performance
Business performance Huhtamaki
Slide 7: Q4 2020: Net sales negatively impacted by effects from COVID-19
Q4 2020: Net sales negatively impacted by effects from COVID-19 Development of net sales in Q4 2020 Net sales -7% in Q4 2020 (EUR million) – Comparable net sales -2% 11 (-7% in emerging markets) -22 -52 – 1% from acquisitions 875 – 6% negative currency impact 813 Q4 2019 Organic Acquisitions Currenc
Slide 8: 2020: Food on-the-shelf packaging continued to grow, whilst food on-the-go was affected by the pandemic
2020: Food on-the-shelf packaging continued to grow, whilst food on-the-go was affected by the pandemic Development of net sales in 2020 Net sales -3% in 2020 (EUR million) – Comparable net sales -2% -61 52 (-6% in emerging markets) -89 – 2% from acquisitions 3,399 – 3% negative currency impact 3,30
Slide 9: The global pandemic resulted in a minor decrease in 2020 net sales
The global pandemic resulted in a minor decrease in 2020 net sales Long-term Comparable growth Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 2019 2020 ambitions Foodservice E-A-O 4% -4% -28% -1% -7% 4% -10% 5-7% North America 6% 9% -5% 4% -2% 9% 1% 3-5% Flexible Packaging 3% 2% 2% 1% 0% 3% 1% 6-8% Fiber Packaging 8
Slide 10: Improved adjusted EBIT margin by 0.5 p.p.
Improved adjusted EBIT margin by 0.5 p.p. MEUR Q4 20 Q4 19 Change 2020 2019 Change Net sales 812.8 874.6 -7% 3,301.8 3,399.0 -3% 1 Adjusted EBIT 72.8 74.7 -2% 302.1 293.1 3% Margin 9.0% 8.5% 9.1% 8.6% Adjusted EPS, EUR2 0.48 0.48 1% 1.95 1.88 4% Capital expenditure 103.2 71.0 45% 223.5 203.9 10% – N
Slide 11: Embedding sustainability across our operations and setting clear ambitions
Embedding sustainability across our operations and setting clear ambitions 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 Lost time incident ambition Lost d
Slide 12: Business segment review
Business segment review Huhtamaki
Slide 13: Foodservice EAO: Transformation initiated to secure competitiveness and to adapt to future trends
Foodservice EAO: Transformation initiated to secure competitiveness and to adapt to future trends Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 213.5 245.3 -13% Comparable growth -7% 4% 241 242 231 245 228 218 213 Adjusted EBIT 1 15.5 20.9 -26% 2019
Slide 14: North America: Strong performance throughout the year
North America: Strong performance throughout the year Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 274.0 303.6 -10% 306 296 304 Comparable growth -2% 6% 286 287 283 274 256 1 32.2 33.1 -3% 2019 Adjusted EBIT 2020 Margin 11.8% 10.9% 5% 9% 13% -5% 14
Slide 15: Flexible Packaging: Performance held back by COVID-19
Flexible Packaging: Performance held back by COVID-19 Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 250.8 255.1 -2% 271 263 261 266 255 Comparable growth 0% 3% 252 249 251 1 17.9 18.8 -5% 2019 Adjusted EBIT 2020 Margin 7.2% 7.4% 5% 2% 1% 2% 4% 1% 3%
Slide 16: Fiber Packaging: Strong performance throughout the year
Fiber Packaging: Strong performance throughout the year Key figures, MEUR Q4 20 Q4 19 Change Net sales and comparable growth (EUR million & %) Net sales 85.4 76.1 12% Comparable growth 8% 8% 85 75 78 76 76 72 68 72 1 12.7 7.5 70% 2019 Adjusted EBIT 2020 Margin 14.8% 9.8% 4% 9% 7% 10% 7% 7% 8% 8% Com
Slide 17: Financial review
Financial review Huhtamaki
Slide 18: Higher adjusted EBIT margin with lower sales
Higher adjusted EBIT margin with lower sales MEUR Q4 20 Q4 19 Change 2020 2019 Change – The increase in earnings in Net sales 812.8 874.6 -7% 3,301.8 3,399.0 -3% 2020 was supported by the North America and Fiber Adjusted EBITDA 1 116.8 117.3 0% 473.1 456.3 4% Packaging segments Margin 1 14.4% 13.4%
Slide 19: Impact from currencies turned negative during 2020
Impact from currencies turned negative during 2020 Average Average Change in Change in Closing rates rate rate average closing 2019 2020 rate rate Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 (YoY) USD 1.12 1.14 -2% 1.12 1.10 1.13 1.17 1.23 -10% Foreign currency translation impact INR 78.85 84.54 -7% 79.81 83.50 8
Slide 20: Net debt decreased compared to Q4 2019 and Q3 2020
Net debt decreased compared to Q4 2019 and Q3 2020 Net debt, net debt/adj. EBITDA and gearing – Net debt/Adj. EBITDA at 1.8 Covenant level1 3.5 – At the end of Q4 2020: – Cash and cash equivalents EUR 315 million 2.4 2.4 Ambition – Unused committed credit 2.1 2.1 2–3 facilities available EUR 310 mil
Slide 21: Loan maturities
Loan maturities Debt maturity structure December 31, 2020 – Average maturity 2.7 years at the (EUR million) end of Q4 2020 (3.4 at the end of Q4 2019) 600 500 – Unused committed credit facilities of EUR 310 million maturing in 400 2022 300 – New syndicated multicurrency 200 revolving credit facility
Slide 22: Strong free cash flow enabled growth investments
Strong free cash flow enabled growth investments Free cash flow bridge Cash flow driven by: (EUR million) – Higher EBITDA despite impact from COVID-19 465 449 – Laminor gain of ~20 MEUR is recognized as non-cash in ‘Other’ 207 226 – Working capital well managed 40 45 within the crisis context 2 3 –
Slide 23: Stable financial position
Stable financial position MEUR Dec 2020 Dec 2019 – Total assets lower mainly due to negative impact from currencies Total assets 3,596 3,611 – Net debt decreased and gearing at Operating working capital 514 585 last year’s level Net debt 867 904 -> Stable financial position Equity & non-controlling
Slide 24: 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 25: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 1.8 2-3 Dividend payout ratio 47% 40% 40% 42% 50% 47
Slide 26: Looking forward
Looking forward Huhtamaki
Slide 27: 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 28: 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 29: Continued solid performance despite COVID-19 pandemic
Continued solid performance despite COVID-19 pandemic – Solid full year sales performance, continued profit improvement and strong cash flow, enabling continued investments into levers for growth – Gradual recovery in short-term demand has continued, however volatility remains especially for foodser
Slide 30: Financial calendar
Financial calendar Week commencing April 22, 2021 March 1, 2021 Q1 2021 Interim Report & Annual Accounts Annual General Meeting July 22, 2021 October 21, 2021 Half-yearly Report Q3 2021 Interim Report 30 February 11, 2021 Results 2020
Slide 31: 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 32: For further information, please contact us:
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors