Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — FY2023 Earnings Presentation
27 slides from Huhtamaki Oyj's earnings presentation, Feb 8, 2024
Slide 1: Strong cash flow and margin improvement
Strong cash flow and margin improvement Results 2023 Charles Héaulmé, President and CEO Thomas Geust, CFO February 8, 2024 Results 2023
Slide 2: Strong cash flow and margin improvement
Strong cash flow and margin improvement • Market trends – After a challenging H1, impacted by inflation and destocking, demand continued to be affected during H2. Some improvements seen in North American towards the end of the year • Financial performance – Strong end to the year, supported by tempo
Slide 3: Business performance
Business performance 3 February 8, 2024 Results 2023
Slide 4: Q4 2023: Sales affected by currencies and volumes, still supported by pricing
Q4 2023: Sales affected by currencies and volumes, still supported by pricing Development of net sales in Q4 2023 Net sales decreased 6% in Q4 2023 (EUR million) • Comparable net sales decreased 3% (-5 % in emerging markets). Support -26 0 0 from pricing but softness in volumes -44 • -4% currency im
Slide 5: FY 2023: Divestment, currencies and volumes impacting net sales
FY 2023: Divestment, currencies and volumes impacting net sales Development of net sales in 2023 Net sales decreased 7% in 2023 (EUR million) • Comparable net sales decreased 2% -78 0 -79 (-4 % in emerging markets). Support -153 from pricing but softness in volumes • -2% from divestment 4,479 4,169
Slide 6: Higher pressure from softer demand and pricing on Flexible Packaging
Higher pressure from softer demand and pricing on Flexible Packaging Long-term Comparable net sales growth Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 2022 2023 ambitions Foodservice E-A-O 15% 11% 5% -3% -5% 18% 2% 4-5% North America 10% 2% 1% 1% 4% 14% 2% 5-6% Flexible Packaging 1% -5% -11% -11% -9% 14% -9% 6-7%
Slide 7: Strong adj. EBIT performance
Strong adj. EBIT performance MEUR Q4 23 Q4 22 Change 2023 2022 Change Net sales 1,032.9 1,103.6 -6% 4,168.9 4,479.0 -7% Adjusted EBIT1 107.5 93.3 15% 392.6 395.1 -1% Margin 10.4% 8.5% 9.4% 8.8% 2 Adjusted EPS, EUR 0.68 0.65 5% 2.32 2.49 -7% Capital expenditure 114.8 133.2 -14% 318.7 318.5 0% Signifi
Slide 8: Sustainability Dashboard – Good progress towards our 2030 targets
Sustainability Dashboard – Good progress towards our 2030 targets Targets displayed in the graphs are Huhtamaki group’s 2030 ambitions; GHG = greenhouse gas 8 February 8, 2024 Results 2023
Slide 9: Business segment review
Business segment review 9 February 8, 2024 Results 2023
Slide 10: Foodservice EAO: Margin improved significantly in Q4
Foodservice EAO: Margin improved significantly in Q4 Key figures, MEUR Q4 23 Q4 22 Change Net sales and comparable growth (EUR million & %) Net sales 250.2 266.7 -6% Comparable growth -5% 15% 289 300 255 256 271 260 267 250 Adjusted EBIT 1 25.0 24.2 3% 2022 Margin 10.0% 9.1% 2023 18% 11% 18% 5% 22%
Slide 11: North America: Significant profitability improvement in Q4, also supported by volume growth
North America: Significant profitability improvement in Q4, also supported by volume growth Key figures, MEUR Q4 23 Q4 22 Change Net sales and comparable growth (EUR million & %) Net sales 378.1 383.6 -1% Comparable growth 4% 10% 375 373 372 384 378 337 358 348 Adjusted EBIT 1 54.1 49.0 10% 2022 Mar
Slide 12: Flexible Packaging: Continued profitability recovery trend in Q4
Flexible Packaging: Continued profitability recovery trend in Q4 Key figures, MEUR Q4 23 Q4 22 Change Net sales and comparable growth (EUR million & %) Net sales 319.8 369.1 -13% 421 Comparable growth -9% 1% 378 391 369 349 328 344 320 Adjusted EBIT1 26.0 15.5 68% 2022 Margin 8.1% 4.2% 2023 18% -5%
Slide 13: Fiber Packaging: Flat volumes while the avian flu impact continued
Fiber Packaging: Flat volumes while the avian flu impact continued Key figures, MEUR Q4 23 Q4 22 Change Net sales and comparable growth (EUR million & %) Net sales 88.8 87.4 2% Comparable growth 2% 17% 95 91 87 86 89 87 89 1 81 2022 Adjusted EBIT 9.7 11.1 -13% Margin 10.9% 12.7% 2023 8% 17% 16% 7% 1
Slide 14: Financial review
Financial review 14 February 8, 2024 Results 2023
Slide 15: Strong adjusted and reported EBIT growth
Strong adjusted and reported EBIT growth Q4 2023: MEUR Q4 23 Q4 22 Change 2023 2022 Change • Strong adj. EBIT growth Net sales 1,032.9 1,103.6 -6% 4,168.9 4,479.0 -7% Adjusted EBITDA1 159.5 143.3 11% 590.1 596.9 -1% • Reported EBIT also supported by the 1 divestment of real estate in Thane, India Ma
Slide 16: Currency impact remained negative
Currency impact remained negative Average Average Change in Change in Closing rates rate rate average closing 2022 2023 rate Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 rate (YoY) USD 1.05 1.08 -3 % 1.06 1.09 1.09 1.05 1.11 -4% Foreign currency INR 82.70 89.31 -8 % 88.23 89.36 89.71 87.64 92.45 -5% translation im
Slide 17: Continued to deleverage balance sheet with strong cash flow
Continued to deleverage balance sheet with strong cash flow Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.2 Covenant level 3.75 • At the end of 2023: 3.0 3.0 • Cash and cash equivalents EUR 348 million (309) 2.5 2.5 2.5 Ambition 1,572 1,626 2.4 2.3 • Unused committed credit
Slide 18: Loan maturities
Loan maturities Debt maturity structure December 31, 2023 • Average maturity 2.9 years at the (EUR million) end of 2023 (3.2 at the end of 700 2022) 600 • EUR 300 million bond issued in 500 November 400 300 200 100 0 2024 2025 2026 2027 2028 Later Lease liabilities Available unused committed facilit
Slide 19: Strong free cash flow generation in 2023, despite continued growth investment
Strong free cash flow generation in 2023, despite continued growth investment Free cash flow bridge Cash flow driven by: (EUR million) • Significantly improved impact from 621 615 change in working capital • Higher net financial items and 321 cash taxes 144 62 • Proceeds from selling assets 8 11 inc
Slide 20: Improving financial position
Improving financial position MEUR Dec 2023 Dec 2022 • The financial position strengthened during the quarter Total assets 4,665 4,821 • Working capital decreased clearly Operating working capital 707 828 Net debt 1,288 1,471 Equity & non-controlling interest 1,925 1,922 Gearing 0.67 0.77 Adjusted RO
Slide 21: The Board of Directors' dividend proposal would mean the 15th consecutive year of dividend growth
The Board of Directors’ dividend proposal would mean the 15th consecutive year of dividend growth 2023* 2022 Change Adjusted EPS 2.32 2.49 -7% Dividend per 1.05 1.00 5% share 1.00 1.05 0.89 0.92 0.94 Payout ratio 45% 40% 0.80 0.84 0.73 0.60 0.66 0.56 0.57 0.44 0.46 0.34 0.38 Share price on 36.73 32.
Slide 22: Progress towards long-term financial ambitions
Progress towards long-term financial ambitions Long-term 2016 2017 2018 2019 2020 2021 2022 2023 ambition Comparable net sales growth 4% 3% 5% 6% -2% 7% 15% -2% 5-6% Adjusted EBIT margin 9.4% 9.0% 8.1% 8.6% 9.1% 8.8% 8.8% 9.4% 10-12% Adj. ROI 14.7% 13.6% 11.6% 12.3% 11.7% 11.3% 11.0% 11.2% 13-15% Ne
Slide 23: Looking forward
Looking forward 23 February 8, 2024 Results 2023
Slide 24: Outlook for 2024 and short-term risks and uncertainties
Outlook for 2024 and short-term risks and uncertainties Outlook for 2024 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, distribution
Slide 25: Reporting schedule in 2024
Reporting schedule in 2024 Week commencing April 25, 2024 July 25, 2024 October 24, 2024 February 26, 2024 Q1 2024 Interim Report, Half-yearly Report 2024 Q3 2024 Interim Report Annual Report 2023 Annual General Meeting 25 February 8, 2024 Results 2023
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 [email protected] www.huhtamaki.com/investors