roadshow presentation november-december 2015...roadshow presentation november-december 2015 * pro...
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Roadshow presentation November-December 2015
Huhtamaki at a glance
– We’re the global specialist in packaging for food and drink
– Helping great products reach more people, more easily
– Our ambition is to be the preferred global food packaging brand
– Our three business areas are Foodservice packaging, Flexible packaging and Molded fiber packaging
– We're listed as Huhtamäki Oyj on NASDAQ OMX Helsinki Ltd.
69 manufacturing
sites*
6%
comparable growth
8%
EBIT margin
13%
ROI €2.4bn net sales*
16,000 employees*
Roadshow presentation November-December 2015
* Pro forma 2014 including Positive Packaging, which was acquired on January 30, 2015. Other figures as reported in Results 2014.
2
Helping great products reach more people, more easily
3
globally operating foodservice packaging company
1
#
in flexible packaging in fast-growing emerging markets
1 # in molded fiber packaging globally
1 #
Roadshow presentation November-December 2015
Our three business areas are organized into four reporting segments
Foodservice Europe-Asia-Oceania and North America
– 37 plants on 5 continents
– 8,200 employees
– €1.4bn net sales
Flexible Packaging* kdfgjkl
– 21 plants on 3 continents
– 6,800 employees
– €840mn net sales pro forma
27%
34%
28%
11%
Share of net sales per segment in 2014
Foodservice Europe-Asia-Oceania
North America
Flexible Packaging
Molded Fiber
Molded Fiber jhgfkjfdhgdfhg
– 11 plants on 4 continents
– 1,600 employees
– €247mn net sales
Foodservice packaging
Flexible packaging
Molded fiber packaging
4
* Including Positive Packaging which was acquired on January 30, 2015.
Roadshow presentation November-December 2015
Growing into the preferred global food packaging brand
Roadshow presentation November-December 2015
Building on our strong positions in emerging markets
Megatrends supporting growth of food and drink
packaging
Using our strong foundation for future
profitable growth
- Long and successful experience in emerging markets
- Clear focus on food and drink packaging
- Growing together with our customers
- Established predictability - Continuous performance improvement - Demonstrated capability to generate
cash flow - Experienced people globally and locally
The preferred global food packaging
brand
5
Building on our strong positions in emerging markets
2%
7%
22% 7%
Huhtamaki has strong presence in the fast-growing emerging markets…
Roadshow presentation November-December 2015
Huhtamaki at emerging markets*
Approx. 38% of net sales 56% of employees
55% of manufacturing units
... but also in North America
34%
* After the closing of Positive Packaging acquisition and the sale of the Films segment. Emerging markets as defined in IMF World Economic Outlook April 2014.
7
… and we aim to extend our global footprint even further…
1960s 1990s 2015 -
Our packaging business was fully established in Finland in the 1960’s, with Polarpak leading the European paper cup market.
Today we operate all over the world. We’re well placed to support our customers wherever they see the next opportunity.
Roadshow presentation November-December 2015
1970s
We started to expand our presence and technical capabilities outside of Finland. First to Germany and UK…
… later on to Singapore, Saudi-Arabia, Oceania, Spain and Sweden.
1980s
In the 1990’s, we expanded heavily in Western Europe and in the US. Also, first emerging market operations were established as we entered Russia, India, Thailand, Mexico, South Africa and Brazil…
2000
… followed by Egypt and Vietnam in 2000.
8
Megatrends supporting food and drink packaging
Roadshow presentation November-December 2015 10
Megatrends supporting food and drink packaging - Global population from 7bn today → 8bn by 2030
- 35% in China and India
- People with middle class purchasing power from 2bn today → 4.9bn by 2030
- 80% in developing countries, which will account nearly 60% of global GDP
- People living in the cities about 50% today → 60% by 2030
Countries with population of 100+ million Country
Population in 2015
Population in 2030
1. China 1,368mn 1,407mn
2. India 1,267mn 1,610mn
3. US 320mn 362mn
4. Indonesia 255mn 291mn
5. Brazil 204mn 227mn
6. Pakistan 189mn 262mn
7. Nigeria 184mn 275mn
8. Bangladesh 158mn 194mn
9. Russia 146mn 132mn
10. Japan 127mn 117mn
11. Mexico 121mn 143mn
12. Philippines 101mn 135mn
13. Vietnam 91mn 105mn
14. Ethiopia 90mn 142mn
15. Egypt 88mn 113mn
Roadshow presentation November-December 2015
#1
#6
#5
#10
11
Source: UN Population Fund
Roadshow presentation November-December 2015 12
How packaging trends develop in emerging markets?
1. Growth of modern retail and pre-packed food go hand in hand - Need for flexible packaging
- Scalability in sizes starting from single-use - Cost and distribution efficiency
- Need for molded fiber packaging - Low-cost protective packaging from recycled materials
2. Food-to-go grows with average disposable income - Need for foodservice packaging
More sustainable packaging helps our customers to meet their sustainability goals
– The main environmental function of packaging is to protect food product from getting spoiled
– To reduce resource usage and food waste
– To lower health risks
– To improve economic efficiency
– This is more and more important as more people live further away from the places where food is being produced
– We innovate and renew packaging by
– Taking weight out from the packaging products
– Introducing new, renewable materials
– Making recyclability easier
– We continuously work to reduce waste and air emissions, and energy use in all manufacturing units
Roadshow presentation November-December 2015 13
Using our strong foundation for future profitable growth
Packaging trends and our geographical footprint work in our favour
Roadshow presentation November-December 2015
0-2% in developed
markets
5+% in emerging
markets
Global GDP growth
+ +2 %-points higher
than GDP growth
Packaging market growth
→
Huhtamaki growth opportunities
- Focus on food and drink packaging - Product portfolio and innovations - Major brand owners as customers - Geographic expansion by
- Following customers - Gaining new customers - Acquisitions
The share of our net sales from fast-growing emerging markets
has increased to 38%
Approx.
2x GDP growth
Even
+ →
15
– Organic growth is led by our key customers, the global brand owners (30% of net sales)
– Geographical expansion
– New product development
– Capex outlays support organic top line development
– Return on net operating assets excluding goodwill
Customers drive our organic growth and investments...
Roadshow presentation November-December 2015
Target velocity
1.8 → Approx. MEUR 220+ new net sales
Current
18%
Minimum target for new capex on the average
20%
Estimated annual CAPEX
MEUR 130-160
Accelerate further growth
16
... but we also plan to grow through acquisitions
Roadshow presentation November-December 2015
– Expanding together with our key customers
– Into new geographies
– Growth calls for new and complementary products
– We want to acquire businesses that make us stronger
– 9 acquisitions in 2011-2015 – strong track record of successful integration
– In total, MEUR 480 new net sales acquired for MEUR 463
MEUR
300-400 MEUR
400-500 MEUR
50-60
2-3
New EBITDA* New net sales* Firepower Net debt / EBITDA*
17
* In average
Implementing our growth strategy in 2015 and beyond
Roadshow presentation November-December 2015
Focus on food and drink packaging
Grow with our customers
Innovations
Good financial record – aiming higher
- We will expand organically and through acquisitions
- We grow together with our global and local customers – in the US, in Europe and in fast-growing emerging markets
- New and redesigned products will contribute 25% of our revenue
- We aim to build on our strong performance and deliver stable shareholder returns
The preferred global food packaging
brand
18
Q3 2015 in brief
MEUR
Net sales growth picked up in Q3 2015…
20
563
692 33
56
40
Q3 14 Comparablegrowth
Acquisitions,divestments &
other
Translationimpact
Q3 15
Net sales growth in Q3 2015
– 6% comparable growth for the Group
– 7% in emerging markets
– 10% from acquisitions
Comparable net sales growth is growth in constant currencies, excluding acquisitions and divestments.
Roadshow presentation November-December 2015
23%
MEUR
… and was on a healthy level in Q1-Q3 2015
21
1,655
2,036 65
153
160
Q1-Q3 14 Comparablegrowth
Acquisitions,divestments &
other
Translationimpact
Q1-Q3 15
Net sales growth Q1-Q3 2015
– 4% comparable growth for the Group
– 6% in emerging markets
– 9% from acquisitions
Comparable net sales growth is growth in constant currencies, excluding acquisitions and divestments.
Roadshow presentation November-December 2015
23%
Comparable growth accelerated in Q3 2015
– Comparable growth 6% in Q3 2015 and 4% in Q1-Q3 2015
– Growth was relatively even between business segments, but varied between geographies
– Our globally diversified position brought stability
Roadshow presentation November-December 2015 22
Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 FY 2014
Foodservice E-A-O 6% 2% 3% 2% 4% 5% 3% 4%
North America 7% -2% 7% 5% 4% 10% 3% 6%
Flexible Packaging 5% 4% 5% 12% 6% 4% 7% 7%
Molded Fiber 5% 5% 5% 7% 9% 10% 10% 9%
Group total 6% 1% 5% 6% 5% 7% 5% 6%
Broad-based improvement continued
EUR million Q3 15 Q3 14 Change Q1-Q3 15 Q1-Q3 14 Change
Net sales 692.2 562.7 23% 2,035.9 1,655.2 23%
EBITDA* 88.6 61.2 45% 259.6 191.4 36%
EBITDA margin* 12.8% 10.9% 12.8% 11.6%
EBIT* 62.4 40.2 55% 181.8 129.6 40%
EBIT margin* 9.0% 7.1% 8.9% 7.8%
Net financial items -9.6 -7.3 32% -27.1 -21.3 27%
Profit before taxes* 52.8 32.9 60% 154.7 108.3 43%
Income tax expense -8.4 -5.8 45% -20.9 -18.7 12%
Profit for the period* 44.4 27.1 64% 133.8 89.6 49%
EPS, EUR* 0.43 0.26 65% 1.27 0.85 49%
ROI** 14.2% 12.3%
ROE** 18.4% 16.0%
Capital expenditure 34.8 31.6 10% 96.4 77.2 25%
Free cash flow 27.2 14.7 85% 38.2 10.5 264%
23
– Significant profitability improvement led by North America continued
– Accelerated profit improvement down to the bottom line
– Higher net debt due to Positive Packaging acquisition led to higher net financial expenses
– Tax expenses increased hand-in-hand with improved profitability
– Strong ROI and ROE development
– Free cash flow continued to strengthen
* Excluding NRI of MEUR -22.6 in Q1-Q3 2015. ** Excluding NRI of MEUR -23.9 in Q1-Q3 2015.
Roadshow presentation November-December 2015
Positive foreign currency translation impact slowed down during the quarter
Average rate
FY 14
Closing rate
Q4 14
Closing rate
Q1 15
Closing rate
Q2 15
Closing rate
Q3 15
Average rate
Q1-Q3 15
USD 1.33 1.21 1.08 1.12 1.12 1.11
INR 81.07 76.72 67.27 71.19 73.48 70.81
GBP 0.81 0.78 0.73 0.71 0.74 0.73
CNY 8.19 7.54 6.67 6.94 7.12 6.96
AUD 1.47 1.48 1.42 1.46 1.59 1.46
THB 43.16 39.91 35.02 37.80 40.71 37.58
RUB 51.03 72.34 62.44 62.35 73.24 66.55
BRL 3.12 3.22 3.50 3.47 4.48 3.52
NZD 1.60 1.55 1.44 1.65 1.76 1.57
ZAR 14.41 14.04 13.13 13.64 15.50 13.68
Roadshow presentation November-December 2015 24
Please note: Income statement is valued on average rate, balance sheet on closing rate.
Foreign currency translation impact
- Q3 2015: MEUR 40 on net sales MEUR 3 on EBIT
- Q1-Q3 2015: MEUR 160 on net sales MEUR 13 on EBIT
Plastic resin prices in a rollercoaster during the year, other raw materials stable
– Polymer price volatility continued and prices declined sharply during the quarter
– Paperboard and waste paper prices continued to be relatively stable
25
-17% -25% -19% (end of Q3 15 vs. end of Q3 14)
Roadshow presentation November-December 2015
50
60
70
80
90
100
110
120
130
140
PS PP PE
Net debt stable during the year
Roadshow presentation November-December 2015 26
418 472 471
288
591 630
604
0.50 0.58 0.53
0.32
0.60 0.68 0.64
1.6
1.8 1.8
1.0
2.1 2.1
1.8
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
Net debt Gearing Net debt/EBITDA
- Target corridor 2-3 - Covenant level 3.5
– Net debt/EBITDA is on Q3 2014 level
– At the end of September 2015
– Cash and cash equivalents MEUR 81
– Unused committed credit facilities available MEUR 311
– Funds available for acquisitions approx. MEUR 300-400
Improved cash flow generation
237
-60 -24 -15
-96
0
-4
38
191
-80
-23 -17
-77
13 4 11
ReportedEBITDA
Change inworking capital
Net financialitems
Taxes Capitalexpenditure
Proceeds fromselling assets
Other Free cash flow
Q1-Q3 15
Q1-Q3 14
Roadshow presentation November-December 2015 27
MEUR
– Efficient management of operating working capital more than compensated for the increased capital expenditure
– Free cash flow includes the payment of EUR 15.6 million fine
Stable financial position
EUR million Sep 15 Dec 14 Sep 14
Total assets 2,485.3 2,298.0 2,282.2
Operating working capital 475.4 363.6 442.2
Net debt 604.4 288.0 471.2
Equity & non-controlling interest 950.7 892.8 885.0
Gearing 0.64 0.32 0.53
ROI* 14.2% 12.6% 12.3%
ROE* 18.4% 16.1% 16.0%
28
* Excluding NRI of MEUR -23.9 in Q1-Q3 2015 and EUR 5.1 in FY 2014.
Roadshow presentation November-December 2015
Q3 2015 by business segment
14
2.0
16
2.7
16
0.1
15
5.6
15
3.9
17
5.4
16
9.5
0
2
4
6
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
Net sales, MEUR Comparable growth, %
Foodservice Europe-Asia-Oceania: Good net sales growth
– Net sales growth led by Western and Eastern Europe
– Russia in particular
– Good development in paper vending cups and paper containers
– Earnings declined
– Net sales decline in China
– Operational inefficiencies in the UK from ramping-up new capacity
– Inventory revaluations due to raw material price and currency fluctuations especially in Russia
Roadshow presentation November-December 2015 30
MEUR Q3 15 Q3 14 Change
EBIT 13.8 16.0 -14%
EBIT margin 8.1% 10.0%
RONA 15.2% 17.6%
Capital expenditure 12.1 8.0 51%
Operating cash flow 10.0 18.5 -46%
Key figures
2014 Net sales MEUR 620.4 EBIT margin 9.3%
YTD 2015 MEUR 498.8 8.4%
16
4.2
20
8.3
19
1.2
20
5.7
21
0.7
25
2.5
24
0.3
-2
0
2
4
6
8
10
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
Net sales, MEUR Comparable growth, %
North America: Excellent profitability
– Good net sales growth in all main categories
– Excellent profitability
– Favorable product mix
– Earlier margin normalization actions bearing fruit
– Lower distribution and energy costs
– High manufacturing output
– Cash flow improvement continued
Roadshow presentation November-December 2015 31
MEUR Q3 15 Q3 14 Change
EBIT 25.0 7.8 221%
EBIT margin 10.4% 4.1%
RONA 12.0% 6.7%
Capital expenditure 11.2 5.7 96%
Operating cash flow 31.7 14.0 126%
Key figures
2014 Net sales MEUR 769.3 EBIT margin 5.0%
YTD 2015 MEUR 703.5 9.2%
15
0.8
15
2.1
15
5.3
15
9.8
20
6.0
22
4.8
22
3.6
0
2
4
6
8
10
12
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
Net sales, MEUR Comparable growth, %
Flexible Packaging: Solid net sales development
– Good net sales growth in Europe and Southeast Asia continued, India subdued
– Positive Packaging net sales for Q3 2015 were MEUR 56 and earnings positive
– Earning supported by
– Favorable product mix
– Volume growth
– Good cost containment especially in India
– Positive contribution from Positive Packaging
– Olli Koponen EVP for the segment as of October 22, 2015
Roadshow presentation November-December 2015 32
MEUR Q3 15 Q3 14 Change
EBIT 15.7 10.8 45%
EBIT margin 7.0% 7.0%
RONA 12.4% 13.0%
Capital expenditure 5.2 6.7 -22%
Operating cash flow 9.5 9.9 -4%
Key figures
2014 Net sales MEUR 618.0 EBIT margin 7.4%
YTD 2015 MEUR 654.4 7.7%
61
.5
61
.8
60
.5
63
.2
65
.2
66
.2
62
.4
0
2
4
6
8
10
12
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
Net sales, MEUR Comparable growth, %
Molded Fiber: Solid growth
– Growth continued to be strongest in South America, Eastern Europe and Africa
– Egg demand in Europe subdued during the warm summer months
– Earnings supported by continued net sales growth, new capacity and good operational efficiency
– Petr Domin interim EVP for the segment as of October 22, 2015
Roadshow presentation November-December 2015 33
MEUR Q3 15 Q3 14 Change
EBIT 7.9 7.4 7%
EBIT margin 12.7% 12.2%
RONA 19.1% 20.1%
Capital expenditure 6.3 9.8 -36%
Operating cash flow 4.0 4.8 -17%
Key figures
2014 Net sales MEUR 247.0 EBIT margin 14.2%
YTD 2015 MEUR 193.8 13.2%
Looking forward
FY 2012 FY 2013 FY 2014 YTD Q3 15 Mid-term ambition
Organic growth 3% 3% 6% 4% 5-7%
EBITDA margin 10.9% 11.2% 11.6% 12.8% 13+%
EBIT margin 7.0% 7.4% 7.8% 8.9% 9+%
ROI 12.6% 12.1% 12.6% 14.2% 15%
ROE 15.8% 15.8% 16.1% 18.4% 16+%
Capex/EBITDA 37% 50% 49% 37% 40%
Net debt/EBITDA 1.6 1.6 1.0 1.8 2-3
Free cash flow, MEUR 103 56 65 38 100
Dividend payout ratio 47% 47% 47% n/a 40-50%
On track towards our mid-term ambitions
Roadshow presentation November-December 2015 35
Outlook 2015 – unchanged
– The Group’s trading conditions are expected to remain relatively stable during 2015.
– The good financial position and ability to generate a positive cash flow will enable the Group to continue to address profitable growth opportunities.
– Capital expenditure is expected to be at the same level as in 2014. Majority of the investments are expected to be directed to enhance growth in the emerging markets.
36 Roadshow presentation November-December 2015
Helping great products reach more people, more easily
Our business segments in brief
Foodservice E-A-O: Expanding our footprint and product portfolio
Roadshow presentation November-December 2015 39
Foodservice paper and plastic disposable tableware, such as cups and lids, is supplied to foodservice operators, fast food restaurants and coffee shops. The segment has production in Europe, South Africa, Middle East, Asia and Oceania.
Our products
Our customers Market position Key competitors Seda, HK Cups, International Paper and local players
Our competitive advantages - Unique footprint - Thorough knowledge of key
conversion technologies - Innovations - Operating efficiency and up-to-
date manufacturing capacity - Relations with key customers
Focus areas
#1 globally operating foodservice packaging company
- Footprint expansion - Product portfolio expansion - Market consolidation to create
customer value
MEUR Mid-term ambition
LTM Q3 2015 2014 2013 2012 2011
Net sales 654.4 620.4 629.1 626.8 524.1
Comparable growth 5-7% 3%* 4% 2% -1% 0%
EBIT** 55.1 57.4 46.9 38.1 20.0
EBIT margin** 9-11% 8.4% 9.3% 7.5% 6.1% 3.8%
RONA** 18+% 15.2% 17.6% 13.9% 11.6% 7.8%
Capex 43.8 33.6 16.8 21.1 20.9
Operating cash flow 27.0 41.9 55.9 39.7 10.7
* Q1-Q3 2015 ** Excluding NRI of MEUR -28.1 in FY 2013 and MEUR 0.8 in FY 2011.
Net sales by geography
Western Europe
Eastern Europe
ROW
North America: Focus on growth and margin improvement
Roadshow presentation November-December 2015 40
Our products
Our customers Market position Key competitors International Paper, Dart/Solo, Gen Pak, Reynolds/Pactiv, AJM, Koch/ Georgia Pacific, Aspen, Rock Tenn
Our competitive advantages - Global in foodservice packaging - Leading shaped paperboard
converter - Recent investments in up-to-
date capacity - Chinet® brand and molded
fiber competence - Ice-cream systems offering
Net sales by market channel in 2014
Foodservice
Retail
Consumer goods
The North America segment serves local markets with Chinet® disposable tableware products, foodservice packaging products, as well as ice-cream containers and other consumer goods packaging products. The segment has production in the United States and Mexico.
#1 globally operating foodservice packaging company
* Q1-Q3 2015
Focus areas - Margin management by
pricing, cost management and operational efficiency
- Leverage the paperboard packaging capacity now in place
- Grow Chinet® thru product line extensions
MEUR Mid-term ambition
LTM Q3 2015 2014 2013 2012 2011
Net sales 909.1 769.3 725.3 704.3 532.3
Comparable growth 4-6% 4%* 6% 5% 5% -4%
EBIT 73.6 38.4 38.4 53.0 43.5
EBIT margin 7-9% 8.1% 5.0% 5.3% 7.5% 8.2%
RONA ~12% 12.0% 7.2% 8.0% 11.7% 11.2%
Capex 43.8 36.7 66.7 31.5 24.0
Operating cash flow 56.8 18.7 -15.0 28.7 43.5
Flexible Packaging: Building on our focus on emerging markets
Roadshow presentation November-December 2015 41
Our products
Our customers Market position Key competitors Amcor, Constantia, Bemis, Dai Nippon, regional and local players
Our competitive advantages - Unmatched footprint in
emerging markets - Innovation track record - Strong reputation - Blue-chip customers - Reliable & responsible partner - Technical expertise
Flexible packaging is used for a wide range of consumer products including food, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Middle East, Asia and South America.
#1 flexible packaging company in emerging markets
* Q1-Q3 2015 ** Excluding NRI of MEUR -7.8 in FY 2011.
Focus areas - Outperform the market with
improved go-to-market capability - Operational and sourcing
excellence to improve profitability - Integration of Positive Packaging - Disciplined investment strategy
MEUR Mid-term ambition
LTM Q3 2015 2014 2013 2012 2011
Net sales 814.2 618.0 585.8 573.3 578.3
Comparable growth 8-10% 5%* 7% 4% 2% 4%
EBIT** 62.9 45.5 44.0 44.6 38.3
EBIT margin** 8-9% 7.7% 7.4% 7.5% 7.8% 6.6%
RONA** 15-18% 12.4% 13.6% 13.3% 13.8% 9.3%
Capex 30.6 24.7 15.6 19.8 18.6
Operating cash flow 57.8 27.8 34.8 41.4 39.7
Sales by geography
Europe
Asia
Molded Fiber: Innovation and emerging markets driving growth
Roadshow presentation November-December 2015 42
Our products
Our customers Market position Key competitors Hartmann, Pactiv, local players, plastics manufacturers
Our competitive advantages - Local service strengthened by
global knowledge - New product development - Own recycled paper trading - Own machine development - Passionate people
Recycled molded fiber is used to make fresh product packaging, such as egg and fruit packaging. The segment has production in Europe, Oceania, Africa and South America.
#1 in molded fiber globally
* Q1-Q3 2015
Focus areas - Investment and NPD projects - Introduction of innovations as game
changers - Development of alternative fibers
and energy - Implementation of cost out projects - Knowledge sharing and succession
readiness
MEUR Mid-term ambition
LTM Q3 2015 2014 2013 2012 2011
Net sales 257.0 247.0 236.3 237.3 244.0
Comparable growth 5-7% 5%* 9% 6% 4% 3%
EBIT 35.5 35.0 29.6 26.4 20.9
EBIT margin 13-15% 13.8% 14.2% 12.5% 11.1% 8.6%
RONA 20+% 19.1% 20.4% 18.2% 16.1% 12.0%
Capex 25.8 27.3 18.9 14.8 11.2
Operating cash flow 18.6 17.5 21.0 25.6 18.5
Sales by geography
Europe
ROW
Financial review
Group financials 2009-2014
*2014 *2013 **2012 2011 2010 2009
Net sales MEUR 2,236 2,161 2,321 2,043 1,952 1,832
Comparable growth*** % 6 3 3 5 3 -5
EBITDA**** MEUR 259 242 254 208 214 193
EBITDA margin**** % 11.6 11.2 10.9 10.2 11.0 10.5
EBIT**** MEUR 175 160 164 128 134 112
EBIT margin**** % 7.8 7.4 7.0 6.2 6.9 6.1
EPS**** EUR 1.24 1.17 1.19 0.87 0.92 0.57
ROI**** % 12.6 12.1 12.6 9.8 12.0 9.6
ROE**** % 16.1 15.8 15.8 11.0 14.5 10.1
Capex MEUR 127 121 94 82 86 53
Free cash flow MEUR 65 56 103 65 113 208
Gearing 0.32 0.50 0.50 0.49 0.32 0.50
Net debt to EBITDA**** 1.0 1.6 1.6 1.9 1.2 1.7
Dividend per share EUR 0.60 0.57 0.56 0.46 0.44 0.38
44
* Continuing operations ** Restated figures *** Organic growth in constant currencies **** Excluding NRI
Roadshow presentation November-December 2015
We’ve successfully implemented our quality growth strategy with ten acquisitions completed since 2011
– Paris Packaging, Inc., US, September 2011 (North America)
– Ample Industries, Inc., US, November 2011 (North America)
– Josco (Holdings) Limited, China, April 2012 (Foodservice E-A-O)
– Winterfield, LLC, US, August 2012 (North America)
– Webtech Labels Private Limited, India, November 2012 (Flexible Packaging)
– BCP Fluted Packaging Ltd., UK, November 2013 (Foodservice E-A-O)
– Interpac Packaging Ltd., New Zealand, August 2014 (Foodservice E-A-O)
– Positive Packaging, India, January 2015 (Flexible Packaging)
– Butterworth Paper Cups, Malaysia, March 2015 (Foodservice E-A-O)
– Pure-Stat Technologies, Inc., US, July 2015 (North America)
In total approx. MEUR 490 of annual net sales acquired for MEUR 477* More details per acquisition are available on our website www.huhtamaki.com/investors/financial-information/acquisitions-and-divestments
45 Roadshow presentation November-December 2015
Debt maturity structure extended
Roadshow presentation November-December 2015 46
Debt maturity structure September 30, 2015
– EUR 400 million syndicated revolving credit facility was refinanced in January 2015 for a 5 year period
→ Significant maturity extension
– MEUR 311 of unused committed credit facilities available at the end of September 2015
0
200
400
600
2015 2016 2017 2018 2019 Later
Finance lease liabilities Commercial paper program
Uncommitted loans from financial institutions Bonds and other loans
Available unused committed facilities Drawn committed credit facilities
Ownership
– 24,621 registered shareholders at the end of September 2015
– 51% of shares in domestic ownership – 18% of shares controlled by non-profit
organizations – Finnish Cultural Foundation a
major owner since 1943, current ownership 12%
– Number of outstanding shares 107,760,385 including 4,063,906 of the Company’s own shares
Roadshow presentation November-December 2015 47
IR
49%
18%
16%
6%
5% 6%
Foreign ownership incl. nominee registered shares
Non-profit organizations
Households
Private companies
Financial and insurance companies
Public-sector organizations
Shareholder distribution by sector September 30, 2015
The Board of Directors aims at predictable and growing dividends
0.38
0.44 0.46
0.56 0.57 0.60
67%
48% 53%
47% 47% 47%
2009 2010 2011 2012 2013 2014
DPS, EUR Payout ratio, %
– Free cash flow before dividends MEUR 65 in 2014
– EPS from continuing and discontinued operations EUR 1.28 (excl. NRI)
– Board proposes a 5% increase in dividend
→ Payout ratio 47%
→ Dividend yield* 3%
– Dividend +58% since 2009
– Dividend CAGR for 2009-2014 is about 10%
Dividend payout ratio 40-50%
* Calculated with 2014 closing price of EUR 21.84.
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Financial calendar 2016 February 11 Results 2015 Week 8 Annual Accounts 2015 April 21 Interim Report Q1 2016 July 22 Interim Report Q2 2016 October 26 Interim Report Q3 2016
Definitions for key indicators
50 Roadshow presentation November-December 2015
Earnings per share (EPS) from profit for the period from continuing operations = Profit for the period from continuing operations – non-controlling interest Average number of shares outstanding
Earnings per share (EPS) from profit for the period from discontinued operations =
Profit for the period from discontinued operations - non-controlling interest Average number of shares outstanding
Earnings per share (EPS) attributable to equity holders of the parent company = Profit for the period – non-controlling interest Average number of shares outstanding
Diluted earnings per share (EPS) from profit for the period from continuing operations = Diluted profit for the period from continuing operations – non-controlling interest Average fully diluted number of shares outstanding
Diluted earnings per share (EPS) from profit for the period from discontinued operations = Diluted profit for the period from discontinued operations - non-controlling interest Average fully diluted number of shares outstanding
Earnings per share attributable to equity holders of the parent company (diluted EPS) = Diluted profit for the period – non-controlling interest Average fully diluted number of shares outstanding
Net debt to equity (gearing) = Interest-bearing net debt Equity + non-controlling interest
Return on net assets (RONA) = 100 x Earnings before interest and taxes (12 m roll.) Net assets (12 m roll.)
Operating cash flow = Ebit + depreciation and amortization (including impairment) - capital expenditure + disposals +/- change in inventories, trade receivables and trade payables
Shareholders' equity per share = Total equity attributable to equity holders of the parent company Issue-adjusted number of shares at period end
Return on equity (ROE) = 100 x Profit for the period Equity + non-controlling interest (average)
Return on investment (ROI) = 100 x (Profit before taxes + interest expenses + net other financial expenses) Statement of financial position total - Interest-free liabilities (average)
Short-term risks and uncertainties
Volatile raw material and energy prices as well as movements in currency rates are considered to be relevant short-term business risks and uncertainties in the Group's operations. General political, economic and financial market conditions can also have an adverse effect on the implementation of the Group's strategy and on its business performance and earnings.
51 Roadshow presentation November-December 2015
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, expected capital expenditure, ability to generate cash flows, liquidity and cost savings that involve known and unknown risks, uncertainties and other factors that may cause Huhtamaki’s actual results, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such risks and uncertainties include, but are not limited to: (1) general economic conditions such as movements in currency rates, volatile raw material and energy prices and political uncertainties; (2) industry conditions such as demand for Huhtamaki’s products, pricing pressures and competitive situation; and (3) Huhtamaki’s own operating and other conditions such as the success of manufacturing activities and the achievement of efficiencies therein as well as the success of pending and future acquisitions and restructurings and product innovations. Future results may vary from the results expressed in, or implied by, forward-looking statements, possibly to a material degree. All forward-looking statements made in this presentation are based on information currently available to the management and Huhtamaki assumes no obligation to update or revise any forward-looking statements. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in any investment activity.
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For further information, please contact us: www.huhtamaki.com » Investors [email protected] Investor Relations Kaisa Uurasmaa Tel. +358 10 686 7815 [email protected]