Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — H1 2021 Earnings Presentation
29 slides from Huhtamaki Oyj's earnings presentation, Jul 22, 2021
Slide 1: Strong comparable net sales growth with improved profitability
Strong comparable net sales growth with improved profitability Half-yearly Report 2021 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Strong comparable net sales growth with improved profitability
Strong comparable net sales growth with improved profitability • Net sales and profitability above pre-pandemic levels − The gradual recovery in demand for food on- the-go products has continued − Strong demand for retail tableware and fiber packaging continued − Significant inflationary cost enviro
Slide 3: Examples of new products supporting plastic substitution
Examples of new products supporting plastic substitution Future Smart Duo fiber lids Smilepack Futuro Future Smart Duo fiber lids are made from an Smilepack, 100% plastic free egg cartons, are Futuro, the first 100% plastic free egg carton for optimal mixture of wood and bagasse fibers. Huhtamaki’s
Slide 4: Business performance
Business performance Huhtamaki
Slide 5: Q2 2021: Significant growth compared to the COVID-19 pandemic trough
Q2 2021: Significant growth compared to the COVID-19 pandemic trough Development of net sales in Q2 2021 Net sales increased 10% in Q2 2021 (EUR million) • Comparable net sales growth 14% 1 (20% in emerging markets) -35 115 • 4% negative currency impact 877 797 Q2 2020 Organic Acquisitions Currency
Slide 6: H1 2021: Solid sales growth despite significant currency headwind
H1 2021: Solid sales growth despite significant currency headwind Development of net sales in H1 2021 Net sales increased 2% in H1 2021 (EUR million) • Comparable net sales growth 6% 7 112 -81 (13% in emerging markets) • 5% negative currency impact 1,642 1,679 H1 2020 Organic Acquisitions Currency H
Slide 7: Continued gradual recovery of demand for food on-the-go
Continued gradual recovery of demand for food on-the-go Long-term Comparable growth Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 H1 20 H1 21 ambitions Foodservice E-A-O -28% -1% -7% -2% 40% -17% 17% 5-7% North America -5% 4% -2% -2% 9% 1% 4% 3-5% Flexible Packaging 2% 1% 0% 0% 6% 2% 3% 6-8% Fiber Packaging 10% 7%
Slide 8: Improved adjusted EBIT margin despite inflation of input costs
Improved adjusted EBIT margin despite inflation of input costs MEUR Q2 21 Q2 20 Change H1 21 H1 20 Change Net sales 877.1 797.1 10% 1,679.0 1,641.7 2% 1 Adjusted EBIT 79.9 70.1 14% 156.8 143.7 9% Margin 9.1% 8.8% 9.3% 8.8% Adjusted EPS, EUR2 0.53 0.44 21% 1.02 0.90 13% Capital expenditure 51.8 40.3
Slide 9: Positive progress in the execution of our sustainability initiatives leads to improvement in our GSI
Positive progress in the execution of our sustainability initiatives leads to improvement in our GSI 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 tim
Slide 10: Business segment review
Business segment review Huhtamaki
Slide 11: Foodservice EAO: Gradual recovery in demand continued
Foodservice EAO: Gradual recovery in demand continued Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 235.8 167.2 41% 236 231 Comparable growth 40% -28% 218 207 213 1 19.9 6.2 >100% 167 2020 Adjusted EBIT Margin 8.4% 3.7% 2021 -4% -2% -28% 40% -1% -7%
Slide 12: North America: Recovery in foodservice and growth in retail tableware continued
North America: Recovery in foodservice and growth in retail tableware continued Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 295.2 296.1 -0% Comparable growth 9% -5% 286 296 295 283 256 274 Adjusted EBIT 1 38.2 37.9 1% 2020 Margin 13.0% 12.8% 2021
Slide 13: Flexible Packaging: Solid overall demand, headwind from raw material prices
Flexible Packaging: Solid overall demand, headwind from raw material prices Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 270.7 263.1 3% 271 267 263 271 266 Comparable growth 6% 2% 251 Adjusted EBIT 1 16.6 19.1 -13% 2020 Margin 6.1% 7.3% 2021 22% %
Slide 14: Fiber Packaging: Continued solid performance
Fiber Packaging: Continued solid performance Key figures, MEUR Q2 21 Q2 20 Change Net sales and comparable growth (EUR million & %) Net sales 80.4 75.7 6% Comparable growth 1% 10% 80 85 75 79 76 72 Adjusted EBIT 1 8.3 8.5 -2% 2020 Margin 10.3% 11.2% 2021 9% 4% 10% 1% 7% 8% Comp. Capital expenditure
Slide 15: Financial review
Financial review Huhtamaki
Slide 16: Higher sales and operational improvements driving improved earnings
Higher sales and operational improvements driving improved earnings MEUR Q2 21 Q2 20 Change H1 21 H1 20 Change • Sales growth supported by all Net sales 877.1 797.1 10% 1,679.0 1,641.7 2% segments and partly offset by currency headwind Adjusted EBITDA 1 121.1 112.1 8% 238.8 229.1 4% Margin 1 13.8% 1
Slide 17: Continued negative currency impact
Continued negative currency impact Average Average Change in Change in Closing rates rate rate average closing H1 20 H1 21 rate Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 rate USD 1.10 1.21 -9% 1.13 1.17 1.23 1.17 1.19 -5% Foreign currency INR 81.63 88.45 -8% 85.19 86.28 89.88 86.25 88.30 -4% translation impact
Slide 18: Net debt to adjusted EBITDA decreased compared to Q2/2020
Net debt to adjusted EBITDA decreased compared to Q2/2020 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 1.9 Covenant level 3.75 • At the end of Q2 2021: • Cash and cash equivalents EUR 213 million Ambition 2.1 • Unused committed credit facilities 2.0 1.9 1.9 1.9 2–3 available
Slide 19: Loan maturities
Loan maturities Debt maturity structure June 30, 2021 • Average maturity 3.1 years at the (EUR million) end of Q2 2021 (3.1 at the end of Q2 2020) 700 600 • Unused committed credit facilities 500 of EUR 324 million maturing in 400 2022 300 200 100 0 2021 2022 2023 2024 2025 Later Lease liabilities C
Slide 20: Free cash flow below last year's level
Free cash flow below last year’s level Free cash flow bridge Cash flow driven by: (EUR million) • Higher adjusted EBITDA • In comparison period, Laminor 229 243 gain of ~20 MEUR is recognized as non-cash in ‘Other’ • Working capital well managed 37 46 1 1 • Higher taxes and capex -10 -10 -11 -7 -21
Slide 21: Stable financial position
Stable financial position MEUR Jun 2021 Jun 2020 • Higher total assets following growth Total assets 3,775 3,672 • Net debt and gearing increased Operating working capital 580 617 • Lower equity Net debt 933 908 • Negative impact from FX translation differences Equity & non-controlling interest 1,41
Slide 22: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2014 2015 2016 2017 2018 2019 2020 H1 2021 ambition Organic growth 6% 4% 4% 3% 5% 6% -2% 6% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 9.3% 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 47
Slide 23: Looking forward
Looking forward Huhtamaki
Slide 24: Outlook 2021
Outlook 2021 (unchanged) 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
Slide 25: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic may create disturbances in the Group’s trading conditions and its operating environment, as well as in demand for the Group’s products. Volatile raw material, distribution and energy prices as well as movements in currency rates are considered
Slide 26: Strong comparable net sales growth with improved profitability
Strong comparable net sales growth with improved profitability • Net sales and profitability above pre-pandemic levels − The gradual recovery in demand for food on- the-go products has continued − Strong demand for retail tableware and fiber packaging continued − Significant inflationary cost enviro
Slide 27: Financial calendar 2021
Financial calendar 2021 October 21, 2021 Q3 2021 Interim Report 27 July 22, 2021 Half-yearly Report 2021
Slide 28: 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 29: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors July 22, 2021 Half-yearly 29 Report 2021