Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Q2 2024 Earnings Presentation
27 slides from Huhtamaki Oyj's earnings presentation, Jul 25, 2024
Slide 1: Continued improvement in operational profitability
Continued improvement in operational profitability Half-yearly report 2024 Charles Héaulmé President and CEO Thomas Geust CFO
Slide 2: Q2 2024: Continued improvement in operational profitability
Q2 2024: Continued improvement in operational profitability Market trends − Some signs of increasing demand, with differences between geographies and categories. Improvement in on-the-shelf categories (food and everyday necessities), while on-the-go categories (hospitality and restaurants) softer −
Slide 3: Efficiency program well underway and contributing to Q2 2024 profitability improvement
Efficiency program well underway and contributing to Q2 2024 profitability improvement Program targets MEUR 100 savings in 2024-26 Execution progressed as expected in Q2 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 July 25, 2024 Half-yearly report 2024
Slide 5: Q2 2024: Comparable net sales slightly impacted by soft volumes
Q2 2024: Comparable net sales slightly impacted by soft volumes Development of net sales in Q2 2024 Net sales decreased 1% in Q2 2024 (EUR million) • Comparable net sales growth -1% -8 0 0 -6 (-2 % in emerging markets). Volumes and pricing close to the previous year’s level 1,052 1,038 • 0% from acq
Slide 6: H1 2024: Pricing weighing on comparable net sales development
H1 2024: Pricing weighing on comparable net sales development Development of net sales in H1 2024 Net sales decreased 3% in H1 2024 (EUR million) • Comparable net sales growth -2% -35 0 0 -23 (-3 % in emerging markets). Volumes close to the previous year’s level, pricing impact slightly negative 2,0
Slide 7: Comparable net sales trend improving
Comparable net sales trend improving Long-term Comparable net sales growth Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 H1 23 H1 24 ambitions Foodservice E-A-O 5% -3% -5% -5% -6% 8% -6% 4-5% North America 1% 1% 4% -3% -2% 1% -2% 5-6% Flexible Packaging -11% -11% -9% -1% 2% -8% 1% 6-7% Fiber Packaging 7% 4% 2% 1% 3
Slide 8: Adjusted EBIT increased
Adjusted EBIT increased MEUR Q2 24 Q2 23 Change H1 24 H1 23 Change Net sales 1,037.5 1,051.7 -1% 2,041.4 2,098.8 -3% Adjusted EBIT1 105.5 92.7 14% 204.3 184.8 11% Margin 10.2% 8.8% 10.0% 8.8% Adjusted EPS, EUR2 0.63 0.55 14% 1.17 1.06 10% Capital expenditure 48.1 69.0 -30% 84.7 134.2 -37% Q2 comment
Slide 9: Our sustainability performance continues to progress in line with our targets
Our sustainability performance continues to progress in line with our targets Targets displayed in the graphs are Huhtamaki group’s 2030 ambitions; GHG = greenhouse gas 9 July 25, 2024 Half-yearly report 2024
Slide 10: Business segment review
Business segment review 10 July 25, 2024 Half-yearly report 2024
Slide 11: Foodservice EAO: Market softness weighing on performance
Foodservice EAO: Market softness weighing on performance Key figures, MEUR Q2 24 Q2 23 Change Net sales and comparable growth (EUR million & %) Net sales 252.3 270.9 -7% 256 271 260 Comparable growth -6% 5% 241 252 250 Adjusted EBIT1 23.2 25.0 -7% 2023 Margin 9.2% 9.2% 2024 11% -5% 5% -6% -3% -5% Co
Slide 12: North America: Continued solid performance in a flat market
North America: Continued solid performance in a flat market Key figures, MEUR Q2 24 Q2 23 Change Net sales and comparable growth (EUR million & %) Net sales 370.2 373.2 -1% 358 373 370 378 Comparable growth -2% 1% 344 348 Adjusted EBIT1 53.0 45.4 17% 2023 Margin 14.3% 12.2% 2024 2% -3% 1% -2% 1% 4%
Slide 13: Flexible Packaging: Volume growth supporting profitability improvement
Flexible Packaging: Volume growth supporting profitability improvement Key figures, MEUR Q2 24 Q2 23 Change Net sales and comparable growth (EUR million & %) Net sales 325.9 327.9 -1% Comparable growth 2% -11% 349 335 328 344 326 320 Adjusted EBIT1 20.9 16.0 31% 2023 Margin 6.4% 4.9% 2024 -5% -1% -1
Slide 14: Fiber Packaging: Solid net sales growth and profitability
Fiber Packaging: Solid net sales growth and profitability Key figures, MEUR Q2 24 Q2 23 Change Net sales and comparable growth (EUR million & %) Net sales 91.7 86.1 7% 87 92 89 Comparable growth 3% 7% 85 86 81 Adjusted EBIT1 11.9 9.3 27% 2023 Margin 12.9% 10.8% 2024 17% 1% 7% 3% 4% 2% Comp. Capital
Slide 15: Financial review
Financial review 15 July 25, 2024 Half-yearly report 2024
Slide 16: Improved margins driving earnings
Improved margins driving earnings MEUR Q2 24 Q2 23 Change H1 24 H1 23 Change Net sales 1,037.5 1,051.7 -1% 2,041.4 2,098.8 -3% Q2 commentary: 1 Adjusted EBITDA 156.4 141.2 11% 305.4 281.7 8% 1 15.1% 13.4% 15.0% 13.4% • Higher EBIT driven by actions Margin to improve cost efficiency Adjusted EBIT 2 1
Slide 17: Currency impact remained negative but moderating
Currency impact remained negative but moderating Average Average Change in Change in Closing rates rate rate average closing H1 23 H1 24 rate Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 rate (YoY) (YoY) USD 1.08 1.08 0% 1.09 1.05 1.11 1.08 1.07 2% Foreign currency INR 88.87 90.01 -1 % 89.71 87.64 92.45 90.13 89.2
Slide 18: Net debt to adjusted EBITDA continued to decrease
Net debt to adjusted EBITDA continued to decrease Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.0 Covenant level 3.75 • At the end of Q2 2024: • Cash and cash equivalents EUR 300 million 2.4 2.5 Ambition 2.3 • Unused committed credit facilities 2.2 1,426 1,453 2.1 2.0 2–3 av
Slide 19: Loan maturities
Loan maturities Debt maturity structure June 30, 2024 (EUR million) 700 600 • Average maturity 2.4 years at the 500 end of Q2 2024 (2.5 at the end of 400 Q2 2023) 300 200 100 0 2024 2025 2026 2027 2028 Later Lease liabilities Available unused committed facilities Drawn committed credit facilities Co
Slide 20: Free cash flow increased
Free cash flow increased Free cash flow bridge (EUR million) 296 270 Cash flow driven by: • Higher reported EBITDA 92 71 • Negative impact from change in 11 29 1 3 working capital • Lower capex -18 -37 -39 -37 -55 -43 -85 -134 Reported Change in Net financial Taxes Capital Proceeds Other cash Free c
Slide 21: Financial position improving
Financial position improving MEUR Jun 2024 Jun 2023 • Working capital down yoy, Total assets 4,767 4,773 but increased vs year-end 2023 due to higher inventories Working capital 593 727 • Net debt and gearing Net debt 1,255 1,453 decreased Equity & non-controlling interest 1,976 1,838 • Adjusted ROI
Slide 22: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2017 2018 2019 2020 2021 2022 2023 H1 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% 10.0% 10-12% Adj. ROI 13.6% 11.6% 12.3% 11.7% 11.3% 11.0% 11.2% 11.9% 13-15%
Slide 23: Looking forward
Looking forward 23 July 25, 2024 Half-yearly report 2024
Slide 24: 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 25: Upcoming events in 2024
Upcoming events in 2024 September 4, October 24, 2024 2024 Site visit to Q3 2024 Hammond Interim Report (near Chicago) 25 July 25, 2024 Half-yearly report 2024
Slide 26: 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 27: Thank You
Thank You ir@huhtamaki.com inX o Huhtamaki