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24.10.2024 07:30:00
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Huhtamäki Oyj’s Interim Report January 1-September 30, 2024: Solid profitability in a gradually improved market
HUHTAMÄKI OYJ STOCK EXCHANGE RELEASE 24.10.2024 AT 8:30 AM
Huhtamäki Oyj’s Interim Report January 1-September 30, 2024: Solid profitability in a gradually improved market
Q3 2024 in brief
- Net sales decreased 1% to EUR 1,026 million (EUR 1,037 million)
- Comparable net sales growth at Group level was -0%
- Reported EBIT was EUR 95 million (EUR 93 million); adjusted EBIT was EUR 102 million (EUR 100 million)
- Reported EPS was EUR 0.57 (EUR 0.42); adjusted EPS was EUR 0.63 (EUR 0.57)
- The impact of currency movements on the Group’s net sales was EUR -13 million and EUR -1 million on EBIT
Q1-Q3 2024 in brief
- Net sales decreased 2% to EUR 3,068 million (EUR 3,136 million)
- Comparable net sales growth at Group level was -1%
- Reported EBIT was EUR 277 million (EUR 235 million); adjusted EBIT was EUR 307 million (EUR 285 million)
- Reported EPS was EUR 1.53 (EUR 1.14); adjusted EPS was EUR 1.80 (EUR 1.64)
- The impact of currency movements on the Group’s net sales was EUR -35 million and EUR -4 million on EBIT
- Capital expenditure was EUR 134 million (EUR 204 million)
- Free cash flow was EUR 160 million (EUR 193 million)
Key figures
| EUR million | Q3 2024 | Q3 2023 | Change | Q1-Q3 2024 | Q1-Q3 2023 | Change | 2023 | |||||||
| Net sales | 1,026.2 | 1,037.2 | -1% | 3,067.6 | 3,136.0 | -2% | 4,168.9 | |||||||
| Comparable net sales growth | -0% | -4% | -1% | -1% | -2% | |||||||||
| Adjusted EBITDA1 | 153.1 | 149.0 | 3% | 458.5 | 430.6 | 6% | 590.1 | |||||||
| Margin1 | 14.9% | 14.4% | 14.9% | 13.7% | 14.2% | |||||||||
| EBITDA | 148.4 | 145.4 | 2% | 444.2 | 415.6 | 7% | 621.2 | |||||||
| Adjusted EBIT2 | 102.4 | 100.3 | 2% | 306.7 | 285.1 | 8% | 392.6 | |||||||
| Margin2 | 10.0% | 9.7% | 10.0% | 9.1% | 9.4% | |||||||||
| EBIT | 95.1 | 92.8 | 2% | 277.3 | 234.9 | 18% | 380.9 | |||||||
| Adjusted EPS, EUR3 | 0.63 | 0.57 | 9% | 1.80 | 1.64 | 10% | 2.32 | |||||||
| EPS, EUR | 0.57 | 0.42 | 33% | 1.53 | 1.14 | 34% | 1.97 | |||||||
| Adjusted ROI2 | 12.0% | 10.6% | 11.2% | |||||||||||
| Adjusted ROE3 | 13.7% | 12.9% | 13.2% | |||||||||||
| ROI | 12.3% | 8.8% | 10.9% | |||||||||||
| ROE | 13.6% | 9.6% | 11.8% | |||||||||||
| Capital expenditure | 49.4 | 69.7 | -29% | 134.1 | 203.9 | -34% | 318.7 | |||||||
| Free Cash Flow | 68.4 | 122.2 | -44% | 160.2 | 193.1 | -17% | 321.4 | |||||||
| 1 Excluding IAC of | -4.8 | -3.5 | -14.3 | -15.1 | 31.1 | |||||||||
| 2 Excluding IAC of | -7.3 | -7.5 | -29.4 | -50.2 | -11.7 | |||||||||
| 3 Excluding IAC of | -6.4 | -15.7 | -28.0 | -51.9 | -35.9 |
Unless otherwise stated, all comparisons in this report are compared to the corresponding period in 2023. 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.
IAC includes, but is not limited to, material restructuring costs and acquisition related costs (gains and losses on business combinations, professional and legal fees, material purchase price accounting adjustments for inventory, material purchase price amortization of intangible assets and changes in contingent considerations) as well as material impairment losses and reversals, gains and losses relating to sale of intangible and tangible assets, implementation costs concerning large projects with SaaS cloud computing technology, fines and penalties imposed by authorities and extraordinary taxes.
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.
Charles Héaulmé, President and CEO
Market conditions started to improve during the third quarter. While the situation improved compared to the first half of the year, the pace was moderate with differences between categories and geographies. Demand for pre-packed on-the-shelf food increased, particularly in egg packaging and in a volatile market, demand for flexible packaging continued to improve. Food-on-the-go volumes remained subdued, with consumers still feeling the impact of Inflation and elevated market prices. The foodservice market has progressed more positively in North America than in other regions. The on-going war in the Middle East continued to affect global brands in some markets in the Middle East and Asia.
Our comparable net sales remained at the previous year’s level in the third quarter and decreased by 1% during the first nine months of the year. During the third quarter, sales volumes increased while pricing pressure continued. Adjusted EBIT increased by 2% in the third quarter and 8% during the first nine months of the year with an improved adjusted EBIT margin reaching 10%. The profitability development was supported by our actions to improve efficiency. Free cash flow remained strong, reaching EUR 160 million at the end of the third quarter. While continuing to focus on future growth, the investments level was contained, enabling further reduction of net debt and resulting in a net debt to adjusted EBITDA ratio of 2.0.
During the quarter, North America continued to deliver profitable growth, maintaining a strong adjusted EBIT margin. Flexible Packaging profitability continued to improve. Foodservice E-A-O margins were negatively impacted by low demand. Fiber Packaging profitability was weighed on by a lag in pricing, as raw material costs increased.
We have continued to make progress on the three-year EUR 100 million efficiency program launched in 2023. All activities executed thus far have positively impacted our profit during 2024. We continue to ramp up our recent investments into profitable growth, particularly in the US with egg cartons production in Hammond, Indiana, and folded carton capacity expansion in Paris, Texas. In October, we started production of fiber lids in Northern Ireland, providing the foodservice sector with additional plastic substitution capacity.
In summary, we are pleased with our profitability improvement in the current market environment. We continue to drive our strategy by investing in our profitable core, rolling out our new innovative sustainable solutions and steadily improving our competitiveness.
Financial review Q3 2023
Net sales by business segment
| EUR million | Q3 2024 | Q3 2023 | Change |
| Foodservice Europe-Asia-Oceania | 246.9 | 259.9 | -5% |
| North America | 359.3 | 348.4 | 3% |
| Flexible Packaging | 333.9 | 344.2 | -3% |
| Fiber Packaging | 87.9 | 81.4 | 8% |
| Elimination of internal sales | -1.9 | 3.4 | |
| Group | 1,026.2 | 1,037.2 | -1% |
Comparable net sales growth by business segment
| Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | ||||
| Foodservice Europe-Asia-Oceania | -7% | -6% | -5% | -5% | -3% | |||
| North America | 3% | -2% | -3% | 4% | 1% | |||
| Flexible Packaging | -0% | 2% | -1% | -9% | -11% | |||
| Fiber Packaging | 8% | 3% | 1% | 2% | 4% | |||
| Group | -0% | -1% | -2% | -3% | -4% |
The Group’s net sales decreased by 1% to EUR 1,026 million (EUR 1,037 million) during the quarter and comparable net sales growth was -0%. Demand started to improve, despite the continued impact of inflation and boycotts of global brands in certain markets. Net sales were supported by a slight increase in sales volumes, whereas changes in currencies and pricing had a negative impact. Comparable sales growth in emerging markets was -4%. Foreign currency translation impact on the Group’s net sales was EUR -13 million (EUR -70 million) compared to 2023 exchange rates.
Adjusted EBIT by business segment
| Items affecting comparability | |||||
| EUR million | Q3 2024 | Q3 2023 | Change | Q3 2024 | Q3 2023 |
| Foodservice Europe-Asia-Oceania | 21.1 | 26.7 | -21% | -0.8 | -0.1 |
| North America | 49.7 | 45.9 | 8% | -2.5 | - |
| Flexible Packaging | 24.3 | 24.7 | -2% | -3.8 | -3.0 |
| Fiber Packaging | 8.1 | 10.2 | -20% | -0.2 | -4.4 |
| Other activities | -0.8 | -7.2 | -0.0 | -0.1 | |
| Group | 102.4 | 100.3 | 2% | -7.3 | -7.5 |
Adjusted EBIT margin by business segment
| Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | |
| Foodservice Europe-Asia-Oceania | 8.5% | 9.2% | 9.1% | 10.0% | 10.3% |
| North America | 13.8% | 14.3% | 13.9% | 14.3% | 13.2% |
| Flexible Packaging | 7.3% | 6.4% | 6.4% | 8.1% | 7.2% |
| Fiber Packaging | 9.2% | 12.9% | 10.1% | 10.9% | 12.5% |
| Group | 10.0% | 10.2% | 9.8% | 10.4% | 9.7% |
The Group’s adjusted EBIT increased to EUR 102 million (EUR 100 million) and reported EBIT was EUR 95 million (EUR 93 million) in the quarter. Adjusted EBIT increased supported by lower raw material and energy costs and the company’s actions to improve profitability. On the other hand, lower sales prices and the increase in labor costs had a negative impact on profitability. The Group’s adjusted EBIT margin increased and was 10.0% (9.7%). Foreign currency translation impact on the Group’s earnings was EUR -1 million (EUR -7 million).
Adjusted EBIT excludes EUR -7.3 million (EUR -7.5 million) of items affecting comparability (IAC), including costs of implementing operational efficiency measures.
Adjusted EBIT and IAC
| EUR million | Q3 2024 | Q3 2023 |
| Adjusted EBIT | 102.4 | 100.3 |
| Acquisition related costs | 0.0 | -0.1 |
| Restructuring gains and losses, including writedowns of related assets | -2.5 | -5.4 |
| PPA amortization | -2.2 | -2.2 |
| Settlement and legal fees of disputes | -0.6 | -0.1 |
| Prague site closure-related costs | - | 0.2 |
| Property damage incidents | -0.2 | - |
| Implementation costs concerning large projects with SaaS cloud computing technology | -1.8 | - |
| EBIT | 95.1 | 92.8 |
Net financial expenses were EUR 15 million (EUR 17 million) in the quarter. The decrease was due to the lower level of net debt. Tax expense was EUR 19 million (EUR 29 million). The decrease was due to the unusually high deferred tax charge related to functional currency remeasurements in Turkey in the comparison period. Profit for the quarter was EUR 61 million (EUR 47 million). Adjusted earnings per share (EPS) was EUR 0.63 (EUR 0.57) and reported EPS EUR 0.57 (EUR 0.42). Adjusted EPS is calculated based on adjusted profit for the period attributable to equity holders of parent company, which excludes EUR -6.4 million (EUR -15.7 million) of IAC.
Adjusted profit and IAC
| EUR million | Q3 2024 | Q3 2023 |
| Adjusted profit for the period attributable to equity holders of the parent company | 65.6 | 60.0 |
| IAC in EBIT | -7.3 | -7.5 |
| IAC in Financial items | -0.2 | 1.2 |
| IAC Tax | 0.9 | -9.4 |
| IAC attributable to non-controlling interest | 0.2 | - |
| Profit for the period attributable to equity holders of the parent company | 59.2 | 44.3 |
Financial review Q1-Q3 2024
Net sales by business segment
| EUR million | Q1-Q3 2024 | Q1-Q3 2023 | Change | ||
| Foodservice Europe-Asia-Oceania | 740.4 | 787.0 | -6% | ||
| North America | 1,073.6 | 1,079.8 | -1% | ||
| Flexible Packaging | 995.0 | 1,021.2 | -3% | ||
| Fiber Packaging | 264.7 | 254.3 | 4% | ||
| Elimination of internal sales | -6.1 | -6.2 | |||
| Group | 3,067.6 | 3,136.0 | -2% |
Comparable net sales growth by business segment
| Q1-Q3 2024 | Q1-Q3 2023 | Q1-Q3 2022 | ||
| Foodservice Europe-Asia-Oceania | -6% | 4% | 20% | |
| North America | -0% | 1% | 16% | |
| Flexible Packaging | 0% | -9% | 19% | |
| Fiber Packaging | 4% | 9% | 14% | |
| Group | -1% | -1% | 18% |
The Group’s net sales decreased by 2% to EUR 3,068 million (EUR 3,136 million) during the reporting period, and comparable net sales growth was -1%. Demand was muted by the impact of inflation and boycotts of global brands in certain markets, but demand improved during the third quarter. Net sales were weighed on by changes in currencies and lower pricing. Comparable sales growth in emerging markets was -3%. Foreign currency translation impact on the Group’s net sales was EUR -35 million (EUR -108 million) compared to 2023 exchange rates.
Adjusted EBIT by business segment
| Items affecting comparability | ||||||
| EUR million | Q1-Q3 2024 | Q1-Q3 2023 | Change | Q1-Q3 2024 | Q1-Q3 2023 | |
| Foodservice Europe-Asia-Oceania | 66.4 | 73.0 | -9% | -12.2 | -2.1 | |
| North America | 150.5 | 133.8 | 12% | -6.0 | -0.0 | |
| Flexible Packaging | 66.8 | 62.0 | 8% | -9.1 | -42.3 | |
| Fiber Packaging | 28.5 | 30.0 | -5% | -1.7 | -5.5 | |
| Other activities | -5.6 | -13.7 | -0.4 | -0.3 | ||
| Group | 306.7 | 285.1 | 8% | -29.4 | -50.2 | |
Adjusted EBIT margin by business segment
| Q1-Q3 2024 | Q1-Q3 2023 | Q1-Q3 2022 | |||
| Foodservice Europe-Asia-Oceania | 9.0% | 9.3% | 9.7% | ||
| North America | 14.0% | 12.4% | 11.3% | ||
| Flexible Packaging | 6.7% | 6.1% | 6.9% | ||
| Fiber Packaging | 10.8% | 11.8% | 10.5% | ||
| Group Total | 10.0% | 9.1% | 8.9% |
The Group’s adjusted EBIT increased to EUR 307 million (EUR 285 million) and reported EBIT was EUR 277 million (EUR 235 million). Adjusted EBIT increased by 8% supported by lower raw material and energy costs and the company’s actions to improve profitability. On the other hand, lower sales prices and the increase in labor costs had a negative impact on profitability. The Group’s adjusted EBIT margin increased and was 10.0% (9.1%). Foreign currency translation impact on the Group’s earnings was EUR -4 million (EUR -9 million).
Adjusted EBIT excludes EUR -29.4 million (EUR -50.2 million) of items affecting comparability (IAC), including costs of implementing operational efficiency measures and positive impacts from divestment of real estate in China and India.
Adjusted EBIT and IAC
| EUR million | Q1-Q3 2024 | Q1-Q3 2023 | |||
| Adjusted EBIT | 306.7 | 285.1 | |||
| Acquisition related costs | -1.1 | -0.4 | |||
| Restructuring gains and losses, including writedowns of related assets | -15.5 | -10.7 | |||
| PPA amortization | -6.6 | -6.6 | |||
| Settlement and legal fees of disputes | -0.7 | -0.2 | |||
| Prague site closure-related costs | - | -32.3 | |||
| Property damage incidents | -1.0 | - | |||
| Implementation costs concerning large projects with SaaS cloud computing technology | -4.5 | - | |||
| EBIT | 277.3 | 234.9 |
Net financial expenses were EUR 53 million (EUR 51 million). The increase was due to higher interest rates, while a decrease in net debt had a positive impact. Tax expense was EUR 58 million (EUR 57 million). The effective tax rate was 26% (31%). The lower effective tax rate was due to the unusually high deferred tax charge related to functional currency remeasurements in Turkey in the comparison period. Profit for the period was EUR 167 million (EUR 126 million). Adjusted earnings per share (EPS) were EUR 1.80 (EUR 1.64) and reported EPS EUR 1.53 (EUR 1.14). Adjusted EPS is calculated based on adjusted profit for the period attributable to equity holders of parent company, which excludes EUR -28.0 million (EUR -51.9 million) of IAC.
Adjusted profit and IAC
| EUR million | Q1-Q3 2024 | Q1-Q3 2023 | |
| Adjusted profit for the period attributable to equity holders of the parent company | 188.4 | 171.0 | |
| IAC in EBIT | -29.4 | -50.2 | |
| IAC in Financial items | -0.3 | 0.8 | |
| IAC Tax | 2.3 | -2.5 | |
| IAC attributable to non-controlling interest | -0.5 | - | |
| Profit for the period attributable to equity holders of the parent company | 160.4 | 119.1 |
Outlook for 2024 (unchanged)
The Group’s trading conditions are expected to improve compared to 2023. Volatility in the operating environment is expected to continue, while Huhtamaki's diversified product portfolio provides resilience. The company’s initiatives, which include the ongoing savings and efficiency program are expected to support the company’s performance. The Group’s good financial position enables addressing profitable growth opportunities.
Teleconference
Huhtamaki will arrange a combined audiocast and teleconference on today at 9:30 EEST. Huhtamaki’s President & CEO Charles Héaulmé and CFO Thomas Geust will present the results, followed by a Q&A session. The event will be held in English, and it can be followed in real-time.
A link to the audiocast is available at: https://huhtamaki.videosync.fi/q3-2024/.
A link to the teleconference is available at: https://palvelu.flik.fi/teleconference/?id=50048359.
Registration is required for the teleconference. After the registration you will be provided with phone numbers and a conference ID to access the conference.
An on-demand replay of the audiocast will be available shortly after the end of the call at www.huhtamaki.com/investors.
Huhtamaki’s financial reporting in 2025
In 2025, Huhtamaki will publish financial information as follows:
Results 2024 February 14
Interim Report, January 1 – March 31, 2025 April 24
Half-yearly Report, January 1 - June 30, 2025 July 24
Interim Report, January 1 - September 30, 2025 October 23
The Annual Report 2024 will be published on the week commencing March 10, 2025.
Huhtamäki Oyj’s Annual General Meeting (AGM) is planned to be held on Thursday, April 24, 2025. The Board of Directors will summon the AGM at a later date.
For further information, please contact:
Kristian Tammela, Vice President, Investor Relations, tel. +358 10 686 7058
About Huhtamaki
Huhtamaki is a leading global provider of sustainable packaging solutions for consumers around the world. Our innovative products protect on-the-go and on-the-shelf food and beverages, and personal care products, ensuring hygiene and safety, driving accessibility and affordability, and helping prevent food waste. We embed sustainability in everything we do. We are committed to achieving carbon neutral production and designing all our products to be recyclable, compostable or reusable by 2030. Our blueloopTM sustainable packaging solutions are world-leading and designed for circularity.
We are a participant in the UN Global Compact, Huhtamaki is rated ‘A’ on the MSCI ESG Ratings assessment and EcoVadis has awarded Huhtamaki with the Gold medal for performance in sustainability. To play our part in managing climate change, we have set science-based targets that have been approved and validated by the Science-Based Targets initiative.
With 100 years of history and a strong Nordic heritage we operate in 37 countries and 103 operating locations around the world. Our values Care Dare Deliver guide our decisions and help our team of around 18 000 employees make a difference where it matters. Our 2023 net sales totalled EUR 4.2 billion. Huhtamaki Group is headquartered in Espoo, Finland and our parent company, Huhtamäki Oyj, is listed on Nasdaq Helsinki Ltd. Find out more about how we are protecting food, people and the planet at www.huhtamaki.com.
Attachment
Nachrichten zu Huhtamäki Oyj (Huhtamaki, Huhtamaeki)
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23.10.24 |
Ausblick: Huhtamäki zieht Bilanz zum jüngsten Jahresviertel (finanzen.net) | |
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09.10.24 |
Erste Schätzungen: Huhtamäki verkündet Quartalsergebnis zum jüngsten Jahresviertel (finanzen.net) | |
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24.07.24 |
Ausblick: Huhtamäki legt Quartalsergebnis vor (finanzen.net) | |
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10.07.24 |
Erste Schätzungen: Huhtamäki stellt Quartalsergebnis zum abgelaufenen Jahresviertel vor (finanzen.net) |
Analysen zu Huhtamäki Oyj (Huhtamaki, Huhtamaeki)
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