Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (June 2022)
67 slides from Huhtamaki Oyj's roadshow presentation, June 2022
Slide 1: Becoming the first choice in sustainable packaging solutions
Becoming the first choice in sustainable packaging solutions Roadshow presentation May–June 2022
Slide 2: Our 100-year Nordic legacy provides a strong foundation
Our 100-year Nordic legacy provides a strong foundation on our road to becoming the first choice in sustainable packaging solutions globally 2 May 2, 2.5.2022 April 22,2022 2021 Q2 2022 IR Presentation Huhtamaki Presentation General to shareholders Presentation | Charles Héaulmé
Slide 3: We believe in protecting food, people and the planet
We believe in protecting food, people and the planet… … enabling wellbeing and convenience for people around the world
Slide 4: What our purpose means
What our purpose means • Packaging creates value by securing hygiene, food availability and food safety for consumers around the globe. • Packaging also plays an instrumental role in reducing We believe in protecting food, people food waste, which remains by far the biggest and the planet and enabli
Slide 5: Broadly serving food on-the-go and food on-the-shelf
Broadly serving food on-the-go and food on-the-shelf Food on-the-go Food on-the-shelf Markets Customers QSR Food Delivery FMCG Retail Products Convenience Food safety Food availability Food waste reduction Packaging technology Paperboard conversion Molded fiber Flexibles 5 May 2, 2022 Q2 2022 IR Pre
Slide 6: A strong local presence, delivering for our customers, globally
A strong local presence, delivering for our customers, globally (Figures for 2021) NET SALES €3.6B ADJUSTED EBIT MARGIN 8.8% OPERATING LOCATIONS 114 OPERATING COUNTRIES 38 EMPLOYEES 19,564 6 May 2, 2022 Q2 2022 IR Presentation
Slide 7: We operate through three business areas
We operate through three business areas Fiber and Foodservice North America Flexible Packaging Net sales per business Europe-Asia-Oceania area (2021) 34 manufacturing units and 18 manufacturing units and 27 manufacturing units and 33% 35% operations in 28 countries operations in 2 countries operatio
Slide 8: The future of food packaging is impacted by four transformative trends
The future of food packaging is impacted by four transformative trends • The next billion consumers will come from emerging markets • The future consumer will require packaging to be innovative, individual and sustainable • Digitalization will influence packaging and the way we do business • Sustain
Slide 9: Packaging brings real value to society
Packaging brings real value to society Hygiene Food safety Packaging promotes hygiene and Packaging keeps food safe from spoilage prevents spread of disease and preserves its original properties Food availability Food waste prevention Packaging enables food availability Globally, 1/3 of food is wast
Slide 10: Our 2030 Strategy
Our 2030 Strategy Protecting food, people and the planet Our ambition is to be the first choice in sustainable packaging solutions, enabling wellbeing and convenience for people around the world GROWING IMPROVING OUR DEVELOPING OUR BUSINESS COMPETITIVENESS OUR TALENT EMBEDDING SUSTAINABILITY IN EVER
Slide 11: We focus on our strategic priorities to drive growth
We focus on our strategic priorities to drive growth Competitiveness Talent Sustainability Digitalization • Achieve world-class processes and • Develop strategic capabilities • Focus innovation on sustainable • Improve operational performance operational performance packaging designed for circularit
Slide 12: First choice in sustainable food packaging
We are committed to high financial and sustainability ambitions Our ambition First choice in sustainable food packaging Comparable growth Adjusted EBIT margin Net debt/Adjusted EBITDA Dividend payout ratio 5+% 10+% 2-3 40-50% Carbon neutral 100% >80% 100% >90% 100% production of products designed re
Slide 13: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors May2022 Q2 13 2, 2022 IR Presentation
Slide 14: 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 15: Appendix: The role of packaging
Appendix: The role of packaging
Slide 16: The future of food packaging is impacted by four transformative trends
The future of food packaging is impacted by four transformative trends The next billion consumers will Future consumer will require Digitalization will influence Sustainability will drive come from emerging markets packaging to be innovative, packaging and the way we do innovation and collaboration
Slide 17: Comparing carbon footprints of single-use and multi-use systems
Comparing carbon footprints of single-use and multi-use systems END-OF-LIFE MANUFACTURING END-OF-LIFE MANUFACTURING -4,491 kg CO2 eq. 13,403 kg CO2 eq. 634 kg CO2 eq. 3,453 kg CO2 eq. Multi-use tableware systems generate over PLASTIC MULTI-USE PAPER-BASED TABLEWARE* 2.8 times higher CO2-e SINGLE-USE
Slide 18: Food is a major contributor to climate change
Food is a major contributor to climate change Global 1/3 of the food GHG emissions produced is lost or wasted approx. 25% 10% of global GHG emissions come from of global GHG emissions come from wasted food systems or lost food Source: CGIAR Research Program on Climate Change, Agriculture and Food Se
Slide 19: Packaging accounts for approx. 5% of food's CO2 footprint
Packaging accounts for approx. 5% of food’s CO2 footprint 80% 15% 5% Food production Transport and distribution Packaging 19 May 2, 2022 Q2 2022 IR Presentation
Slide 20: Only a small share of CO2 emissions of a latte on-the-go come from the cup
Only a small share of CO2 emissions of a latte on-the-go come from the cup, and these can be halved by increasing recycling Energy to make the latte 4% Cup & lid 9% Coffee production 14% CO2 of a latte Milk production 73% on the go The CO2 emissions of paper cups can be halved The fiber in our paper
Slide 21: Consumer awareness and efficient recycling infrastructure are required
In addition to recyclable packaging, consumer awareness and an efficient collection, sorting and recycling infrastructure are required to solve littering and waste challenges Recyclable Collection, sorting Consumer Less waste in the packaging and recycling behaviour environment infrastructure 21 May
Slide 22: Recycling rates vary – significant potential to utilize valuable materials
Recycling rates vary – significant potential to utilize valuable materials Plastic packaging Paper Glass Metal ~14% ~70% ~50-80% ~30-90% Recycled Recycled Recycled Recycled Source: Smithers Pira: Future Lifecycles of Packaging Recycling to 2023 22 May 2, 2022 Q2 2022 IR Presentation
Slide 23: Our strong innovation pipeline has delivered sustainable packaging solutions
Our strong innovation pipeline has delivered sustainable packaging solutions for our customers, including: Paperboard conversion Molded fiber Flexibles Push Tab® paper Push-tab blister lid® McDonald’s Home Delivery range Sundae cup and cold cup lid Paperboard Futuro egg Next Generation yogurt cup ca
Slide 24: Appendix: Segments and financials
Appendix: Segments and financials
Slide 25: Operating model: We are a converter
Operating model: We are a converter 25 May 2, 2022 Q2 2022 IR Presentation
Slide 26: Fiber and Foodservice Europe-Asia-Oceania
Fiber and Foodservice Europe-Asia-Oceania Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Recycled and other natural fibers are used to make fresh product packaging, such as egg, fruit, food and drink packaging, and foodservice paper and plastic disposable tableware, su
Slide 27: North America
North America Serves local markets with foodservice packaging, Chinet® disposable tableware as well as ice-cream containers and other consumer goods packaging products. Production in the United States and Mexico. NET SALES MARKET POSITION €1,160 mn ADJUSTED EBIT MARGIN 12.0% #1 globally operating EM
Slide 28: Flexible Packaging
Flexible Packaging Flexible packaging is used for a wide range of pre- packed consumer products including food, beverages, pet food, hygiene and health care products. Production in Europe, Middle East and Africa, Asia and South America. NET SALES MARKET POSITION €1,167 mn ADJUSTED EBIT MARGIN 6.8% #
Slide 29: Products, customers, sales split and competitors per segment
Products, customers, sales split and competitors per segment Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Fiber Packaging Foodservice E-A-O North America Flexible Packaging Our products Our customers Net sales Western Europe & UK Foodservice Europe split Europe Centr
Slide 30: Strategic focus areas for segments
Strategic focus areas for segments Fiber Packaging and Foodservice E-A-O have been integrated as of June 1, 2020 Fiber Packaging Foodservice E-A-O North America Flexible Packaging Egg and fruit protective packaging Global key accounts in QSR, Coffee and Retail, Foodservice, Consumer goods Strong dem
Slide 31: Segment key figures (1/2)
Fiber Packaging and Foodservice E-A-O have been integrated as on June 1, 2020 Segment key figures (1/2) • Improving customers access to combined fiber and paperboard technology • Leveraging organization synergies and growth opportunities (plastic substitution, food delivery) Foodservice Europe-Asia-
Slide 32: Segment key figures (2/2)
Segment key figures (2/2) North America Key figures (MEUR) 2014 2015 2016 2017 20181 2019 2020 2021 Long-term ambition Net sales 769.3 947.7 1,005.1 1,000.4 1,002.7 1,152.7 1,138.9 1,160.3 Comparable growth 6% 4% 6% 2% 5% 9% 1% 6% 3-5% Adjusted EBIT 38.4 88.2 107.6 104.1 73.0 111.4 136.6 139.1 Margi
Slide 33: Group financials 2011-2021
Group financials 2011-2021 2011 20122 20131 20141 2015 2016 2017 20182 2019 2020 2021 Net sales MEUR 2,043 2,321 2,161 2,236 2,726 2,865 2,989 3,104 3,399 3,302 3,575 Comparable growth3 5% 3% 3% 6% 4% 4% 3% 5% 6% -2% 7% Adjusted EBITDA4 MEUR 208 254 242 259 342 382 390 399 456 473 488 Margin4 10.2%
Slide 34: Comparable net sales growth by business segment
Comparable net sales growth by business segment Quarterly Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Foodservice E-A-O 4% 3% 4% 4% -4% -28% -1% -7% -2% 40% 2% 12% 18% North America 5% 13% 14% 6% 9% -5% 4% -2% -2% 9% 5% 11% 24% Flexible Packaging 5% 1% 4% 3% 2% 2% 1
Slide 35: Solid track record of growth investments
Solid track record of growth investments Paper and Huhtamaki plastic CAPEX M&A spend blueloop disposable packaging, 1,571 1,043 China & HK Pressed 2014–2021 Short-run Ireland Fresh ready- (EUR million) plates, US flexible meal trays, packaging, UK Eastern Europe Folding Labels, India Corrugated Bags
Slide 36: 23 acquisitions completed since 2011
23 acquisitions completed since 2011 Date (completed) Acquired company Country Acquiring segment Jan 2022 Huhtamaki Smith Anderson sp. z o.o (joint venture acquired fully) Poland Foodservice E-A-O Sep 2021 Elif Holding A.Ş. Turkey Flexible Packaging Jun 2021 Jiangsu Hihio-Art Packaging Co. Ltd China
Slide 37: Appendix: Shareholders and management
Appendix: Shareholders and management
Slide 38: Largest shareholders and split of shareholding
Largest shareholders and split of shareholding Shareholder Number of shares % of total shares Change Change % Split of shareholding 1. Finnish Cultural Foundation 11,314,840 10.50 % 0 0.00 % 2. Huhtamäki Oyj 3,395,709 3.15 % 0 0.00 % 3. Ilmarinen Mutual Pension Insurance Company 3,015,541 2.80 % 150
Slide 39: Foreign shareholding and distribution by geography
Foreign shareholding and distribution by geography Total number of shareholders and foreign shareholding Approximate shareholder distribution by geography (Ownership as a percentage of identified shareholders in September 2020) 55,000 54% 5% 1% 50,000 52% 4% 7% 45,000 50% 8% 40,000 48% 8% 56% 35,000
Slide 40: Global Executive Team
Global Executive Team Charles Héaulmé Marco Hilty Eric Le Lay Ann O’Hara Thomas Geust President and CEO President, Flexible Packaging President, Fiber and President, North America CFO Foodservice EAO Fredrik Davidsson Thomasine Kamerling Marina Madanat Sami Pauni Ingolf Thom EVP Digital and EVP Sust
Slide 41: Board of Directors
Board of Directors Pekka Ala-Pietilä Kerttu Tuomas Mercedes Alonso Doug Baillie William R. Chairman of the Vice-Chairman Barker Board HR AC HR HR HR Born 1957, Finnish citizen Born 1957, Finnish citizen Born 1966, Spanish and Swiss citizen Born 1955, U.K. citizen Born 1949, U.S. citizen Starting dat
Slide 42: Q1 2022: Strong start to the year
Q1 2022: Strong start to the year
Slide 43: Strong start to the year
Strong start to the year • Challenging environment – continued COVID-19 pandemic, high and broad-based inflation, challenges in raw material availability and disruption in global supply chains, the war in Ukraine • Strong net sales and adjusted EBIT growth – driven by positive impact of acquisitions
Slide 44: Our innovation recognized by sustainability awards
Our innovation recognized by sustainability awards McDonald’s Nescafe Garnier Sundae cup and lid Protect Proslim Men Shampoo Color Fully plant-based (100% renewable). The world’s first recyclable alu-foil free User-friendly two-sided flexible membrane Recyclable and compostable. Insulating instant c
Slide 45: Business performance
Business performance Huhtamaki
Slide 46: Q1 2022: Strong comparable net sales growth
Q1 2022: Strong comparable net sales growth Development of net sales in Q1 2022 Net sales increased 31% in Q1 2022 (EUR million) • Comparable net sales growth 19% 35 (19% in emerging markets) 63 • Volume growth in line with long-term 150 ambition 1,050 • 8% from acquisitions, mainly Elif 802 • 4% po
Slide 47: Continued recovery in foodservice, solid demand and pricing drive strong growth
Continued recovery in foodservice, solid demand for food on-the- shelf and pricing drive strong growth in the quarter Long-term Comparable growth Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 ambitions Foodservice E-A-O -2% 40% 2% 12% 18% 5-7% North America -2% 9% 5% 11% 24% 3-5% Flexible Packaging 0% 6% 7% 12% 18%
Slide 48: Strong EBIT growth
Strong EBIT growth MEUR Q1 22 Q1 21 Change Net sales 1,049.7 802.1 31% Adjusted EBIT1 97.5 77.0 27% Margin 9.3% 9.6% Adjusted EPS, EUR2 0.63 0.49 29% Capital expenditure 76.4 33.0 >100% • Strong net sales growth, both reported and comparable • Adjusted EBIT improved by growth in sales volumes, a fav
Slide 49: Business segment review
Business segment review Huhtamaki
Slide 50: Foodservice EAO: Continued recovery in demand
Foodservice EAO: Continued recovery in demand Key figures, MEUR Q1 22 Q1 21 Change Net sales and comparable growth (EUR million & %) Net sales 254.7 207.5 23% Comparable growth 18% -2% 255 245 254 236 207 2021 Adjusted EBIT1 25.6 17.6 45% Margin 10.0% 8.5% 2022 -2% 18% 40% 2% 12% Comp. Capital expen
Slide 51: North America: Strong growth and profitability
North America: Strong growth and profitability Key figures, MEUR Q1 22 Q1 21 Change Net sales and comparable growth (EUR million & %) Net sales 337.5 256.1 32% Comparable growth 24% -2% 337 297 315 293 Adjusted EBIT 1 38.8 31.2 25% 256 2021 Margin 11.5% 12.2% 2022 -2 % 24 % 9% 5% 11 % Comp. Capital
Slide 52: Flexible Packaging: Strong growth, supported by Elif acquisition
Flexible Packaging: Strong growth, supported by Elif acquisition and improved cost mitigation Key figures, MEUR Q1 22 Q1 21 Change Net sales and comparable growth (EUR million & %) Net sales 377.7 267.1 41% 378 Comparable growth 18% 0% 345 267 273 282 Adjusted EBIT1 29.4 21.7 35% 2021 Margin 7.8% 8.
Slide 53: Fiber Packaging: Growth impacted by softening in demand for egg packaging
Fiber Packaging: Growth impacted by expected softening in demand for egg packaging Key figures, MEUR Q1 22 Q1 21 Change Net sales and comparable growth (EUR million & %) Net sales 90.9 78.6 16% 91 91 Comparable growth 8% 4% 80 83 79 1 2021 Adjusted EBIT 7.5 9.5 -21% Margin 8.2% 12.1% 2022 4% 8% 1% 2
Slide 54: Financial review
Financial review Huhtamaki
Slide 55: Solid adjusted EBIT margin
Solid adjusted EBIT margin MEUR Q1 22 Q1 21 Change Net sales 1,049.7 802.1 31% Adjusted EBITDA1 146.6 117.7 24% • Sales growth supported by all segments, Elif acquisition Margin 1 14.0% 14.7% contributed positively Adjusted EBIT2 97.5 77.0 27% 2 • Input costs continued to Margin 9.3% 9.6% increase;
Slide 56: Positive currency impact in Q1 2022 driven by strong USD
Positive currency impact in Q1 2022 driven by strong USD Average Average Change in Change in Closing rates rate rate average closing Q1 21 Q1 22 rate Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 rate (YoY) (YoY) USD 1.21 1.12 7% 1.17 1.19 1.17 1.13 1.11 5% Foreign currency INR 87.95 84.42 4% 86.25 88.31 86.47 84.2
Slide 57: Net debt to adjusted EBITDA at a higher level after the Elif acquisition
Net debt to adjusted EBITDA at a higher level after the Elif acquisition Net debt, net debt/adj. EBITDA and gearing • Acquisition of Elif increased our Covenant level 3.75 leverage 3.1 • At the end of Q1 2022: 3.0 3.0 1,572 1,520 • Net debt/Adj. EBITDA at 3.0 1,404 Ambition • Gearing 0.92 1.9 1.9 2–
Slide 58: Loan maturities
Loan maturities Debt maturity structure March 31, 2022 (EUR million) 700 • MEUR 250 term loan facility agreed in early April. 2-year 600 agreement with a one-year 500 extension option at the discretion of the lenders 400 • Committed credit facilities at the 300 end of Q1 2022 • Average maturity 2.6
Slide 59: Free cash flow impacted by working capital and capital expenditure
Free cash flow impacted by working capital and capital expenditure Free cash flow bridge Cash flow impacted by: (EUR million) • Adjusted EBITDA increased significantly 145 115 • Large change in working capital mainly following increase in trade receivables and inventory 1 0 5 7 0 • Higher cash taxes
Slide 60: Stable financial position
Stable financial position MEUR Mar 2022 Mar 2021 • Total balance sheet impacted by Elif acquisition in Q3 2021 Total assets 4,810 3,745 • Operating working capital increased Operating working capital 812 571 by higher inventories Net debt 1,572 898 • Stable financial position remains Equity & non-co
Slide 61: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2015 2016 2017 2018 2019 2020 2021 Q1 22 ambition Organic growth 4% 4% 3% 5% 6% -2% 7% 19% 5+% Adjusted EBIT margin 8.7% 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 9.3% 10+% Net debt/Adj. EBITDA 1.6 1.8 1.8 2.3 2.0 1.8 3.1 3.0 2-3 Dividend payout ratio 40%
Slide 62: Looking forward
Looking forward Huhtamaki
Slide 63: Outlook 2022 (unchanged)
Outlook 2022 (unchanged) The Group’s trading conditions are expected to improve compared to 2021, 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 64: Short-term risks and uncertainties
Short-term risks and uncertainties Significant and broad-based inflation in input costs (including raw materials, labor, distribution and energy), availability of raw materials as well as movements in currency rates are considered to be relevant short-term business risks and uncertainties in the Gro
Slide 65: Financial calendar 2022
Financial calendar 2022 July 21, 2022 October 21, 2022 Half-yearly Report 2022 Q3 2022 Interim Report 65 May 2, 2022 Q2 2022 IR Presentation
Slide 66: 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 67: For further information, please contact us
For further information, please contact us: ir@huhtamaki.com www.huhtamaki.com/investors May2022 Q2 67 2, 2022 IR Presentation