Huhtamäki Oyj INTERIM report 21.4.2016 at 8.30
Huhtamäki Oyj's Interim Report January 1 - March 31, 2016: Good start to the year
Q1 2016 in brief
- Net sales grew to EUR 672 million (EUR 630 million)
- EBIT improved to EUR 58 million (EUR 50 million)
- EPS improved to EUR 0.40 (EUR 0.33 excluding NRI)
- Comparable net sales growth was 6% in total and 8% in emerging markets
- Currency movements had a negative impact of EUR -11 million on the Group's net sales and EUR -1 million on EBIT
- Free cash flow was solid at EUR 26 million (EUR -19 million)
Key figures
| EUR million | Q1 2016 | Q1 2015 | Change | FY 2015 |
| Net sales | 672.3 | 630.1 | 7% | 2,726.4 |
| EBITDA* | 84.6 | 74.8 | 13% | 342.0 |
| EBITDA margin* | 12.6% | 11.9% | | 12.5% |
| EBIT* | 57.8 | 49.7 | 16% | 237.5 |
| EBIT margin* | 8.6% | 7.9% | | 8.7% |
| EPS*, EUR | 0.40 | 0.33 | 21% | 1.65 |
| ROI** | 14.8% | 12.8% | | 14.7% |
| ROE** | 18.3% | 16.2% | | 18.1% |
| Capital expenditure | 24.3 | 24.7 | -2% | 146.9 |
| Free cash flow | 25.6 | -19.4 | 232% | 91.2 |
* Excluding NRI of EUR -4.1 million in Q1 2015 and EUR -22.6 million in FY 2015.
** Excluding NRI of EUR -23.9 million in FY 2015.
Unless otherwise stated, all figures presented in this report, including corresponding periods in 2015, cover continuing operations only. Continuing operations include the Foodservice Europe-Asia-Oceania, North America, Flexible Packaging and Molded Fiber business segments. Discontinued operations for 2015 include the Films business segment, which was sold at the end of December 2014. Unless otherwise stated, all comparisons in this report are compared to the corresponding period in 2015. ROI, ROE and RONA figures presented in this report are calculated on a 12-month rolling basis.
Jukka Moisio, CEO:
"We had a good start to the year. Comparable growth improved to 6% and trading conditions for our businesses were relatively stable across markets. Volume growth was solid in many markets, while prices for plastic resins continued on a low level moderating our comparable growth through lower selling prices, especially in the Flexible Packaging segment.
Our profitability improved driven by North America and Flexible Packaging segments. Higher profitability combined with efficient capital management helped us to improve both the return on investment (ROI) and return on equity (ROE). Free cash flow was clearly positive despite normalized organic growth investments and seasonal inventory build-up before the summer months.
In addition to organic growth investments we finalized two acquisitions during the quarter. Flexible Packaging segment completed a capability-enhancing acquisition in Eastern Europe and Foodservice Europe-Asia-Oceania segment increased its ownership in a joint-venture company in Middle East to 50%. Both acquisitions will be consolidated and fully benefit our performance from the second quarter onwards.
Looking at 2016, we remain optimistic on the long term growth opportunities in food packaging and will continue to invest in growth. At the same time, we'll keep our eyes on the ball and ensure continued prudent housekeeping and operations management."
Financial review Q1 2016
The Group's comparable net sales growth was 6% during the quarter. Growth was strongest in the North America and Foodservice Europe-Asia-Oceania business segments. Comparable growth in emerging markets was 8%. Growth was strongest in Eastern Europe and South Asia. Net sales development was flat in China. The Group's net sales grew to EUR 672 million (EUR 630 million). The impact from foreign currency translation on net sales turned negative and was EUR -11 million compared to 2015 exchange rates. Majority of the negative currency impact came from the weakening of emerging market currencies versus euro, whereas the impact of the US dollar versus euro continued to be positive.
Net sales by business segment
| EUR million | Q1 2016 | Q1 2015 | Change | Of Group in Q1 2016 |
| Foodservice Europe-Asia-Oceania | 158.9 | 153.9 | 3% | 23% |
| North America | 235.2 | 210.7 | 12% | 35% |
| Flexible Packaging | 217.7 | 206.0 | 6% | 32% |
| Molded Fiber | 65.5 | 65.2 | 1% | 10% |
| Elimination of internal sales | -5.0 | -5.7 | | |
| Group | 672.3 | 630.1 | 7% | |
Comparable growth by business segment
| | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 |
| Foodservice Europe-Asia-Oceania | 7% | 8% | 6% | 2% |
| North America | 10% | 5% | 7% | -2% |
| Flexible Packaging | 1% | -1% | 5% | 4% |
| Molded Fiber | 4% | 6% | 5% | 5% |
| Group | 6% | 4% | 6% | 1% |
The Group's earnings grew driven by strong earnings improvement in the North America business segment. Good development in Flexible Packaging business segment contributed to the earnings growth, whereas earnings of Foodservice Europe-Asia-Oceania business segment remained flat and earnings of Molded Fiber business segment declined. The Group's earnings before interest and taxes (EBIT) were EUR 58 million (EUR 50 million). Negative foreign currency translation impact on Group's EBIT was EUR -1 million.
EBIT by business segment
| EUR million | Q1 2016 | Q1 2015 | Change | Of Group in Q1 2016 |
| Foodservice Europe-Asia-Oceania | 12.0 | 11.9 | 1% | 20% |
| North America | 20.8 | 13.8 | 51% | 35% |
| Flexible Packaging | 18.9 | 17.0 | 11% | 31% |
| Molded Fiber | 8.2 | 8.6 | -5% | 14% |
| Other activities | -2.1 | -1.6 | | |
| Group | 57.8 | 49.7 | 16% | |
Other activities EBIT excluding NRI of EUR -4.1 million in Q1 2015.
Net financial expenses decreased to EUR 6 million (EUR 9 million). Tax expense was EUR 9 million (EUR 6 million). The corresponding tax rate was 18% (16%).
Profit for the quarter was EUR 43 million (EUR 31 million). Earnings per share (EPS) were EUR 0.40 (EUR 0.33 and EUR 0.29 including NRI).
Outlook for 2016
The Group's trading conditions are expected to remain relatively stable during 2016. 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 2015 with the majority of the investments directed to business expansion.
Annual General Meeting 2016
The Annual General Meeting of Shareholders will be held on Thursday, April 21, 2016 at 13.00 (EET) at Finlandia Hall, Mannerheimintie 13e, in Helsinki, Finland.
Financial reporting in 2016
In 2016, Huhtamaki will publish financial information as follows:
Interim Report, January 1-June 30, 2016 July 22
Interim Report, January 1-September 30, 2016 October 26
This is a summary of Huhtamäki Oyj's Interim Report January 1 - March 31, 2016. 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:
Jukka Moisio, CEO, tel. +358 10 686 7801
Thomas Geust, CFO, tel. +358 10 686 7880
HUHTAMÄKI OYJ
Group Communications
Huhtamaki is a global specialist in packaging for food and drink. With our network of 71 manufacturing units and 23 sales offices in 34 countries, we're well placed to support our customers' growth wherever they operate. Mastering three distinctive packaging technologies, approximately 16,000 employees develop and make packaging that helps great products reach more people, more easily. In 2015 our net sales totaled EUR 2.7 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 NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions 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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