Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Handelsbanken's Nordic Mid/Small Cap Seminar 2020
35 slides from Huhtamaki Oyj's conference presentation, Jun 4, 2020
Slide 1: Becoming the first choice in sustainable food packaging
Becoming the first choice in sustainable food packaging Thomas Geust CFO Handelsbanken’s Nordic Mid/Small Cap Seminar 2020 June 4, 2020
Slide 2: 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 Foodservice packaging Molded fiber packaging Flexible packaging 2 June 4, 2020 Hande
Slide 3: Huhtamaki operates on a global scale
Huhtamaki operates on a global scale Figures for 2019 NET SALES €3.4B ADJUSTED EBIT MARGIN 8.6% MANUFACTURING UNITS 81 OPERATING COUNTRIES 35 EMPLOYEES 18,598 3 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Seminar 2020 | Thomas Geust, CFO
Slide 4: We operate through 3 business segments
We operate through 3 business segments North America Fiber and Foodservice Flexible Packaging Net sales per segment (Europe-Asia-Oceania) (2019) 18 manufacturing units in 33 manufacturing units in 29 manufacturing units in 36% 34% 2 countries 28 countries 16 countries 4,200 employees 6,800 employees
Slide 5: Understanding the value of packaging within the broader sustainability context
Understanding the value of packaging within the broader sustainability context Hygiene Food safety Packaging promotes hygiene and prevents spread of Packaging keeps food safe from spoilage and disease preserves its original properties Food availability Food waste prevention Packaging enables food av
Slide 6: 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% 8% of global GHG emissions come from of global GHG emissions come from wasted food systems of lost food Source: CGIAR Research Program on Climate Change, Agriculture and Food Sec
Slide 7: 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 7 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Seminar 2020 | Thomas Geust, CFO
Slide 8: 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 9: Recyclable packaging, consumer awareness and efficient collection infrastructure 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 9 June
Slide 10: 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 10 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Se
Slide 11: 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 – Future consumer will require packaging to be innovative, individual and sustainable – Digitalization will influence packaging and the way we do business – Sustainabil
Slide 12: Our strategic priorities
Our strategic priorities We are for shaping the sustainable future of everyday life to offer wellbeing, convenience and responsible lifestyle to billions of people everywhere OUR AMBITION and FOUR STRATEGIG PRIORITIES Our ambition is to be the first choice in sustainable food packaging GROWTH COMPET
Slide 13: We have high financial and sustainability ambitions
We have 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 renewable or r
Slide 14: Q1 2020 results
Q1 2020 results: Solid net sales growth and profitability in an increasingly uncertain environment
Slide 15: Food on-the-shelf packaging continued to grow while the crisis started affecting food on-the-go
Food on-the-shelf packaging continued to grow while the ongoing crisis started affecting food on-the-go Comparable growth Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 2019 Long-term ambitions Foodservice E-A-O 4% 3% 4% 4% -4% 4% 5-7% North America 5% 13% 14% 6% 9% 9% 3-5% Flexible Packaging 5% 1% 4% 3% 2% 3% 6-8%
Slide 16: Increase in adjusted EBIT higher than sales growth
Increase in adjusted EBIT higher than sales growth MEUR Q1 20 Q1 19 Change FY 2019 Net sales 844.6 802.1 5% 3,399.0 Adjusted EBIT1 73.6 67.8 9% 293.1 Margin 8.7% 8.5% 8.6% Adjusted EPS, EUR2 0.46 0.44 5% 1.88 Capital expenditure 39.4 39.7 -1% 203.9 Q1 20 highlights • Earnings increase driven by more
Slide 17: Food on-the-shelf packaging continues to grow whilst COVID-19 started affecting food on-the-go
Food on-the-shelf packaging continues to grow whilst COVID-19 started affecting food on-the-go packaging Net sales (MEUR) Net sales (MEUR) Foodservice EAO North America 218 286 • Solid underlying sales growth globally • Continued strong growth and earnings Comparable growth Comparable growth • COVID
Slide 18: COVID-19 update
COVID-19 update (as given at Q1 2020 results)
Slide 19: We play an essential role in the food supply chain
We play an essential role in the food supply chain As a global leader in food on-the go and food on-the-shelf packaging, we play a crucial role and are an integral part in the supply chain, to make food safe, convenient and available to everyone in the world. Our customers are essential in ensuring
Slide 20: Our diversified portfolio provides resilience during the ongoing crisis
Our diversified portfolio provides resilience during the ongoing crisis Food on-the-go Food on-the-shelf (Foodservice packaging) (Flexible and Fiber packaging) Foodservice sales are temporarily affected by closures of Demand for Flexible packaging and Fiber packaging resilient quick-service restaura
Slide 21: Phased approach from initial crisis shock to managing the new normal
Phased approach from initial crisis shock to managing the “new normal” Phase 1 Phase 2 Phase 3 Initial shock Managing the crisis Planning Ahead • Daily crisis management at global • Manage cash daily and tightly • Define the opportunities that will and unit level unfold from the crisis, using our •
Slide 22: Making a difference where it matters most
Making a difference where it matters most Global donation to the Red Cross Local product donations Launch of protective face shields 22 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Seminar 2020 | Thomas Geust, CFO
Slide 23: Our commitment to our priorities: protect people, food, planet
These unprecedented times remind us of our beliefs and reinforce our commitment to our priorities: protect people, protect food, protect the planet 23 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Seminar 2020 | Thomas Geust, CFO
Slide 24: Q1 2020 results: Financials review
Q1 2020 results: Financials review
Slide 25: Increased net sales driving returns
Increased net sales driving returns MEUR Q1 20 Q1 19 Change 2019 Highlights Net sales 844.6 802.1 5% 3,399.0 • Solid growth and positive currency Adjusted EBITDA1 117.0 107.0 9% 456.3 translation Margin1 13.9% 13.3% 13.4% • Earnings increase driven by raw materials Adjusted EBIT2 73.6 67.8 9% 293.1
Slide 26: Net debt remained unchanged compared to Q1 2019
Net debt remained unchanged compared to Q1 2019 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.1 Covenant level1 3.5 • At the end of Q1 2020: • Cash and cash equivalents EUR 313 million 2.4 2.4 Ambition • Unused committed credit 2.1 2.1 2.0 2–3 facilities available EUR 175 98
Slide 27: Loan maturities
Loan maturities Debt maturity structure March 31, 2020 • Average maturity 3.2 years at (EUR million) the end of Q1 2020 (3.5 at the end of Q1 2019) 600 500 • Unused committed credit facilities of EUR 175 million 400 maturing in 2022 300 200 100 0 2020 2021 2022 2023 2024 Later Bonds and other loans
Slide 28: Stable financial position
Stable financial position MEUR Mar 2020 Mar 2019 • Higher total assets following growth Total assets 3,824 3,417 • Net debt unchanged, gearing improved Operating working capital 636 661 Net debt 980 980 • Improvement in adjusted ROI and adjusted ROE Equity & non-controlling interest 1,444 1,345 Gear
Slide 29: Progress towards long-term ambitions
Progress towards long-term ambitions Q1 Long-term 2014 2015 2016 2017 20181 2019 2020 ambition Organic growth 6% 4% 4% 3% 5% 6% 3% 5+% Adjusted EBIT margin 7.8% 8.7% 9.4% 9.0% 8.1% 8.6% 8.7% 10+% Net debt/Adj. EBITDA 1.0 1.6 1.8 1.8 2.3 2.0 2.1 2-3 Dividend payout ratio 47% 40% 40% 42% 50% 47%2 40-5
Slide 30: Q1 2020 results: Looking forward
Q1 2020 results: Looking forward
Slide 31: Short-term risks and uncertainties
Short-term risks and uncertainties The COVID-19 pandemic is a significant short-term risk 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 currency rate
Slide 32: For further information, please contact us
For further information, please contact us: [email protected] www.huhtamaki.com/investors
Slide 33: Financial calendar 2020
Financial calendar 2020 July 23 Half-yearly Report 2020 October 22 Q3 2020 Interim Report 33 June 4, 2020 Handelsbanken's Nordic Mid/Small Cap Seminar 2020 | Thomas Geust, CFO
Slide 34: 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 35: For further information, please contact us
For further information, please contact us: [email protected] www.huhtamaki.com/investors
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