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Huhtamäki Oyj (0EQR)

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Thursday 25 April, 2019

Huhtamäki Oyj

Huhtamäki Oyj's Interim Report January 1-March 31, 2019: Solid comparable net sales growth and profitability

Huhtamäki Oyj's Interim Report January 1-March 31, 2019: Solid comparable net sales growth and profitability

HUHTAMÄKI OYJ INTERIM REPORT 25.4.2019 AT 8:00

Huhtamäki Oyj's Interim Report January 1-March 31, 2019: Solid comparable net sales growth and profitability

Q1 2019 in brief 

  • Net sales grew to EUR 802 million (EUR 725 million) 
  • Adjusted EBIT was EUR 68 million (EUR 61 million); reported EBIT EUR 68 million (EUR 61 million)
  • Adjusted EPS was EUR 0.44 (EUR 0.40); reported EPS EUR 0.44 (EUR 0.40)
  • Comparable net sales growth was 5% in total and 7% in emerging markets
  • Currency movements had a positive impact of EUR 19 million on the Group's net sales and EUR 1 million on EBIT
Key figures
EUR million Q1 2019 Q1 2018 Change FY 2018
Net sales 802.1 725.2 11% 3,103.6
Adjusted EBITDA1 107.0 95.6 12% 398.7
    Margin1 13.3% 13.2%   12.8%
EBITDA 106.8 95.6 12% 390.3
Adjusted EBIT2 67.8 60.6 12% 251.0
    Margin2 8.5% 8.4%   8.1%
EBIT 67.7 60.6 12% 225.5
Adjusted EPS3 0.44 0.40 10% 1.69
EPS, EUR 0.44 0.40 10% 1.49
Adjusted ROI2,4 11.5% 13.3%   11.6%
Adjusted ROE3,4 14.6% 16.7%   14.5%
ROI4 10.4% 13.1%   10.4%
ROE4 13.0% 16.3%   12.8%
Capital expenditure 39.7 33.3 19% 196.9
Free cash flow -18.3 -13.5 -35% 79.6

1 Excluding IAC of EUR -0.1 million in Q1 2019 (no IAC in Q1 2018) and EUR -8.4 million in FY 2018.
2 Excluding IAC of EUR -0.1 million in Q1 2019 (no IAC in Q1 2018) and EUR -25.5 million in FY 2018.
3 Excluding IAC of EUR -0.1 million in Q1 2019 (no IAC in Q1 2018) and IAC of EUR -20.6 million in FY 2018.
4 ROI and ROE for Q1 2018 have not been restated for IFRS 16 impact.

Unless otherwise stated, all comparisons in this report are compared to the corresponding period in 2018. Figures of return on investment (ROI), return on equity (ROE) and return on net assets (RONA) as well as net debt to EBITDA presented in this report are calculated on a 12-month rolling basis.

IFRS 16 Leases standard has been adopted as of January 1, 2019 using full retrospective transition method. The financial information for 2018 has been restated except for key figures ROI, ROE, RONA and net debt to EBITDA for periods Q1 2018, Q2 2018 and Q3 2018. For more information see the notes.

The figures in the tables are exact figures and consequently the sum of individual figures may deviate from the sum presented. Key figures have been calculated using exact figures. 

Jukka Moisio, CEO:

"Our first quarter net sales grew 11% to EUR 802 million. The Group's comparable net sales growth was 5% and in emerging markets 7%. Also, net sales to global key accounts developed well. Positive currency translation impact was 3%, mostly from the stronger US Dollar. The acquisitions completed in Q2 2018 brought the Group 3% growth and added EUR 25 million to the quarterly net sales.

Our EBIT grew by 12% to EUR 68 million. Good net sales growth combined with price and mix improvements and enhanced cost efficiency contributed to higher earnings. Foodservice Europe-Asia-Oceania, North America, and Flexible Packaging segments all increased their net sales and improved EBIT while Fiber Packaging EBIT declined mainly due to investments related to the ongoing Fresh innovation project.

We continued to make good progress on several innovation projects, most notably paper straws, fiber-based ready meal tray Fresh, and the recently launched Huhtamaki blueloop concept of recyclable flexible packaging. All of these are good examples of our solutions to pack and serve food safely and conveniently with less negative impact on the environment.

The year has started well with record net sales and EBIT for the first quarter. Significant organic growth investments made in the past couple of years are expected to deliver continued good growth. The most recent official facility opening was held early April in Egypt where the new flexible packaging plant is ramping up its production."

Financial review Q1 2019

The Group's net sales growth was strong during the quarter, with all segments contributing. Comparable net sales growth was solid at 5%, led by the Flexible Packaging and North America business segments. Growth in emerging markets was 7%. The Group's net sales grew to EUR 802 million (EUR 725 million). Foreign currency translation impact on the Group's net sales was EUR 19 million (EUR -59 million) compared to 2018 exchange rates. The majority of the positive impact came from the US Dollar. 

Net sales by business segment
EUR million Q1 2019 Q1 2018 Change Of Group in

Q1 2019
Foodservice Europe-Asia-Oceania 227.9 198.8 15% 28%
North America 255.7 226.8 13% 32%
Flexible Packaging 251.8 234.0 8% 31%
Fiber Packaging 71.5 69.7 3% 9%
Elimination of internal sales -4.9 -4.1    
Group802.1725.211% 
Comparable net sales growth by business segment 
  Q1 2019 Q4 2018 Q3 2018 Q2 2018
Foodservice Europe-Asia-Oceania 4% 3% 5% 5%
North America 5% 11% 2% 2%
Flexible Packaging 5% 4% 6% 11%
Fiber Packaging 4% 5% 4% 3%
Group5%6%4%6%

The Group's earnings improved significantly and profitability was on a solid level. Earnings improved significantly in the Flexible Packaging segment as a result of positive development in India, and in the North America segment following successful pricing actions. Earnings declined in the Fiber Packaging segment due to investments related to the commercialization of the Fresh ready meal tray. The Group's adjusted earnings before interests and taxes (EBIT) were EUR 68 million (EUR 61 million) and reported EBIT EUR 68 million (EUR 61 million). Foreign currency translation impact on the Group's earnings was EUR 1 million (EUR -4 million).

Adjusted EBIT by business segment
EUR million Q1 2019 Q1 2018 Change Of Group in

Q1 2019
Foodservice Europe-Asia-Oceania 20.1 19.5 3% 28%
North America 20.6 16.3 26% 29%
Flexible Packaging 23.0 17.6 31% 33%
Fiber Packaging 6.9 8.0 -15% 10%
Other activities 1 -2.7 -0.8    
Group 67.860.612% 

1 Excluding IAC of EUR -0.1 million in Q1 2019 (no IAC in Q1 2018).

Adjusted EBIT excludes EUR -0.1 million of items affecting comparability (IAC), which consist of acquisition related costs. 

Adjusted EBIT and IAC
EUR million Q1 2019 Q1 2018
Adjusted EBIT 67.8 60.6
Acquisition related costs -0.1 -
EBIT67.760.6

Net financial expenses were EUR 8 million (EUR 8 million). Tax expense was EUR 12 million (EUR 11 million). The corresponding tax rate was 21% (21%). Profit for the quarter was EUR 47 million (EUR 42 million). 

Adjusted and reported earnings per share (EPS) were EUR 0.44 (EUR 0.40). Adjusted EPS is calculated based on adjusted profit for the period, which excludes EUR -0.1 million of IAC and related taxes.

Adjusted EPS and IAC
EUR million Q1 2019 Q1 2018
Adjusted profit for the period attributable to equity holders of the parent company 45.5 41.2
IAC excluded from adjusted EBIT -0.1 -
Taxes related to IAC 0.0 -
Profit for the period attributable to equity holders of the parent company45.441.2

Significant events during the reporting period

On March 7, 2019 the European Commission announced that it has opened an investigation into Luxembourg tax practices, in particular Huhtamaki tax rulings from the years 2009, 2012 and 2013. The investigation is not targeted at Huhtamaki and Huhtamaki has not been approached by the European Commission.

Outlook for 2019

The Group's trading conditions are expected to remain relatively stable during 2019. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same level as in 2018 with the majority of the investments directed to business expansion. 

Annual General Meeting 2019

The Annual General Meeting of Shareholders will be held on Thursday, April 25, 2019 at 11.00 (EET) at Messukeskus Helsinki, Expo and Convention Centre, Messuaukio 1, Helsinki, Finland.

Financial reporting in 2019

In 2019, Huhtamaki will publish financial information as follows:

Half-yearly Report, January 1-June 30, 2019: July 19
Interim Report, January 1-September 30, 2019: October 23

This is a summary of Huhtamäki Oyj's Interim Report January 1 - March 31, 2019. The complete report is attached to this release and is also available at the company website at www.huhtamaki.com.

For further information, please contact: 

Thomas Geust, CFO, tel. +358 10 686 7880
Katariina Hietaranta, Head of IR and Financial Communications, tel. +358 10 686 7863

Huhtamaki is a global specialist in packaging for food and drink. With our network of 78 manufacturing units and additional 24 sales only offices in altogether 34 countries, we're well placed to support our customers' growth wherever they operate. Mastering three distinctive packaging technologies, approximately 17,700 employees develop and make packaging that helps great products reach more people, more easily. In 2018, our net sales totaled EUR 3.1 billion. The Group has its head office in Espoo, Finland and the parent company Huhtamäki Oyj is listed on Nasdaq Helsinki Ltd. Additional information is available at www.huhtamaki.com.





This announcement is distributed by West Corporation on behalf of West Corporation clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Huhtamäki Oyj via Globenewswire


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