2017-02-15 07:30:37 CET
2017-02-15 07:30:37 CET
REGULATED INFORMATION
Huhtamäki Oyj - Financial Statement Release
Huhtamäki Oyj's Results January 1 - December 31, 2016: Solid progress
HUHTAMÄKI OYJ FINANCIAL STATEMENT RELEASE 15.2.2017 AT 8.30
Huhtamäki Oyj's Results January 1 - December 31, 2016: Solid progress
Q4 2016 in brief
* Net sales grew to EUR 732 million (EUR 691 million)
* Adjusted EBIT improved to EUR 65 million (EUR 56 million); EBIT EUR 64
million (EUR 56 million)
* Adjusted EPS improved to EUR 0.44 (EUR 0.38); EPS EUR 0.42 (EUR 0.38)
* Comparable net sales growth was 3% in total and 5% in emerging markets
* Currency movements had a negative impact of EUR 2 million on the Group's net
sales
FY 2016 in brief
* Net sales grew to EUR 2,865 million (EUR 2,726 million)
* Adjusted EBIT improved to EUR 268 million (EUR 238 million); EBIT EUR 266
million (EUR 215 million)
* Adjusted EPS improved to EUR 1.83 (EUR 1.65); EPS EUR 1.81 (EUR 1.42)
* Comparable net sales growth was 4% in total and 7% in emerging markets
* Currency movements had a negative impact of EUR 51 million on the Group's
net sales and EUR 5 million on EBIT
* Free cash flow improved to EUR 100 million (EUR 91 million)
* The Board of Directors proposes a dividend of EUR 0.73 (0.66) per share
Key figures
EUR million Q4 2016 Q4 2015 Change FY 2016 FY 2015 Change
--------------------------------------------------------------------
Net sales 731.5 690.5 6% 2,865.0 2,726.4 5%
--------------------------------------------------------------------
Adjusted EBITDA (1) 95.2 82.4 16% 381.8 342.0 12%
--------------------------------------------------------------------
Margin (1) 13.0% 11.9% 13.3% 12.5%
--------------------------------------------------------------------
EBITDA 93.7 82.4 14% 380.1 319.4 19%
--------------------------------------------------------------------
Adjusted EBIT (1) 65.4 55.7 17% 267.9 237.5 13%
--------------------------------------------------------------------
Margin (1) 8.9% 8.1% 9.4% 8.7%
--------------------------------------------------------------------
EBIT 63.9 55.7 15% 266.2 214.9 24%
--------------------------------------------------------------------
Adjusted EPS (1), EUR 0.44 0.38 16% 1.83 1.65 11%
--------------------------------------------------------------------
EPS, EUR 0.42 0.38 11% 1.81 1.42 27%
--------------------------------------------------------------------
ROI (1) 14.7% 14.7%
--------------------------------------------------------------------
ROE (1) 17.7% 18.1%
--------------------------------------------------------------------
Capital expenditure 103.9 50.5 106% 199.1 146.9 36%
--------------------------------------------------------------------
Free cash flow 21.7 53.0 -59% 100.3 91.2 10%
(1) Excluding IAC of EUR -1.5 million in Q4 2016, EUR -1.7 million in FY 2016
and EUR -22.6 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. Figures of return on investment (ROI), return on
equity (ROE) and return on net assets (RONA) presented in this report are
calculated on a 12-month rolling basis.
Jukka Moisio, CEO:
"2016 was another record year for Huhtamaki. Our net sales and profitability
reached all-time-high levels and met the mid-term ambitions set in early 2015.
Our net sales were EUR 2.9 billion, Adjusted EBIT margin strengthened to 9.4%
from previous year's 8.7% and adjusted EPS grew by 11% to EUR 1.83. I would like
to thank all Huhtamaki team members for the achievements in 2016.
Our comparable growth was 4% overall and 7% in emerging markets during the year.
Development was good in North America, where our past investments delivered in a
growing market. Foodservice Europe-Asia-Oceania and Molded Fiber segments
progressed well throughout the year. Challenging trading conditions in many
African countries and the demonetization action executed in India in November
2016 burdened Flexible Packaging net sales.
During the year we made significant forward-looking growth investment decisions
that help our customers serve their markets better. The most significant of
those decisions was to build a manufacturing and distribution facility in
Goodyear, Arizona to service customers on the U.S. West Coast and southwest. In
addition we're investing in new facilities in Egypt and India, and expanding our
current site in China. Our 2016 capital expenditure was almost EUR 200 million,
52% of Adjusted EBITDA, which together with EUR 120 million spent on
acquisitions added the total growth spend to approx. EUR 320 million. In 2015
our growth spend was EUR 360 million.
Largest acquisition in 2016 was Delta Print and Packaging, based in Northern
Ireland and Poland, which extended our European product portfolio to folded
carton packaging. In addition, we increased our capabilities through
acquisitions in flexible packaging in Czech Republic and in foodservice
packaging in India and Saudi Arabia.
Our free cash flow improved to EUR 100 million meeting our mid-term ambition.
Our ROI and ROE remained on or close to the previous year levels despite our
forward-looking investment program and were 14.7% and 17.7% respectively.
Business environment in 2016 was mixed and volatility and uncertainty in the
markets has continued in early 2017. We remain optimistic on the business
opportunities in food and drink packaging and will advance our growth by
building new capacity on four continents in 2017. As we achieved our earlier
mid-term ambitions during the year, we launched new long-term ambitions at our
Capital Markets Day in November 2016. Growth remains at the core of our strategy
and we aim to work both on organic investments and acquisitions. In addition, we
aim to improve our profitability further and maintain our financial stability."
Financial review Q4 2016
The Group's comparable net sales growth was 3% during the quarter. Growth was
strongest in the North America and Molded Fiber business segments driven by
strong volume growth and supported by favorable seasonal demand. Foodservice
Europe-Asia-Oceania business segment also achieved good growth against a strong
fourth quarter in the previous year. Net sales of Flexible Packaging business
segment declined. The Group's comparable growth in emerging markets was 5%.
Growth was strong across markets in Eastern Europe, whereas local net sales
development in India was negative due to the demonetization effect, and
marginally positive in China. Export sales of flexible packaging to African
countries declined. The Group's net sales grew to EUR 732 million
(EUR 691 million). Foreign currency translation impact on the Group's net sales
was EUR -2 million (EUR 34 million) compared to 2015 exchange rates.
Net sales by business segment
EUR million Q4 2016 Q4 2015 Change Of Group in
Q4 2016
-------------------------------------------------------------------
Foodservice Europe-Asia-Oceania 193.0 168.7 14% 27%
-------------------------------------------------------------------
North America 259.8 244.2 6% 34%
-------------------------------------------------------------------
Flexible Packaging 213.9 214.5 0% 30%
-------------------------------------------------------------------
Molded Fiber 69.0 66.5 4% 9%
-------------------------------------------------------------------
Elimination of internal sales -4.2 -3.4
-------------------------------------------------------------------
Group 731.5 690.5 6%
Comparable growth by business segment
Q4 2016 Q3 2016 Q2 2016 Q1 2016
----------------------------------------------------------------
Foodservice Europe-Asia-Oceania 3% 5% 7% 7%
----------------------------------------------------------------
North America 5% 2% 8% 10%
----------------------------------------------------------------
Flexible Packaging -3% -3% 2% 1%
----------------------------------------------------------------
Molded Fiber 6% 6% 5% 4%
----------------------------------------------------------------
Group 3% 2% 6% 6%
The Group's earnings improved significantly driven by solid profitability
improvement in the Foodservice Europe-Asia-Oceania and Molded Fiber business
segments. Good progress in the North America business segment also contributed
to the earnings growth. As a result of negative net sales development the
Flexible Packaging segment's earnings declined slightly, but remained on a good
level. The Group's Adjusted EBIT were EUR 65 million (EUR 56 million) and
reported EBIT EUR 64 million (EUR 56 million).
Adjusted EBIT by business segment
EUR million Q4 2016 Q4 2015 Change Of Group in
Q4 2016
-----------------------------------------------------------------------
Foodservice Europe-Asia-Oceania (1) 15.3 10.3 49% 27%
-----------------------------------------------------------------------
North America 25.1 23.2 8% 35%
-----------------------------------------------------------------------
Flexible Packaging 17.6 18.3 -4% 26%
-----------------------------------------------------------------------
Molded Fiber 9.9 8.0 24% 12%
-----------------------------------------------------------------------
Other activities -2.5 -4.1
-----------------------------------------------------------------------
Group (1) 65.4 55.7 17%
(1) Excluding IACs of EUR -1.5 million in Q4 2016
Adjusted EBIT excludes EUR -1.5 million of IACs. They consist of additional
identified restructuring costs, which are expected to incur from actions to
improve the competitiveness of the foodservice business in China as announced on
June 27, 2016. IACs were booked for Q4 2016 in the Foodservice Europe-Asia-
Oceania business segment.
Adjusted EBIT and IACs
EUR million Q4 2016 Q4 2015
------------------------------------
Adjusted EBIT 65.4 55.7
------------------------------------
Restructuring costs -1.5
------------------------------------
EBIT 63.9 55.7
Net financial expenses were EUR 7 million (EUR 7 million). Tax expense was
EUR 13 million (EUR 8 million).
Profit for the quarter was EUR 44 million (EUR 40 million). Adjusted EPS were
EUR 0.44 (EUR 0.38) and reported EPS EUR 0.42 (EUR 0.38).
Financial review FY 2016
The Group's comparable net sales growth was 4% in 2016. Growth was strongest in
the North America business segment, which exceeded the EUR 1 billion annual net
sales milestone. Growth in the segment was particularly strong during the first
half of the year supported by the business gained in H2 2015. Growth was on a
good level also in the Foodservice Europe-Asia-Oceania and Molded Fiber business
segments throughout the year. The Flexible Packaging business segment's net
sales grew moderately during the first half, but declined in the second half due
to challenges in African and Indian markets. The Group's comparable growth in
emerging markets was 7%. Growth was strongest in Eastern Europe. Net sales grew
moderately in China. The Group's net sales grew to EUR 2,865 million
(EUR 2,726 million). Foreign currency translation impact on the Group's net
sales was EUR -51 million (EUR 194 million) compared to 2015 exchange rates. The
majority of the negative currency impact came from the weakening of emerging
market currencies and the pound sterling versus euro.
Net sales by business segment
EUR million FY 2016 FY 2015 Change Of Group in
FY 2016
-------------------------------------------------------------------
Foodservice Europe-Asia-Oceania 741.0 667.5 11% 25%
-------------------------------------------------------------------
North America 1,005.1 947.7 6% 35%
-------------------------------------------------------------------
Flexible Packaging 868.6 868.9 0% 31%
-------------------------------------------------------------------
Molded Fiber 267.8 260.3 3% 9%
-------------------------------------------------------------------
Elimination of internal sales -17.5 -18.0
-------------------------------------------------------------------
Group 2,865.0 2,726.4 5%
The Group's profitability improved with all business segments contributing to
earnings growth. Earnings growth was strongest in the North America business
segment. Other activities had a negative impact of EUR 11 million (EUR
-5 million) on the Group's earnings. The change compared to previous year was
primarily related to the Group's long-term incentive plan and project-related
costs. The Group's Adjusted EBIT were EUR 268 million (EUR 238 million) and
reported EBIT EUR 266 million (EUR 215 million). Foreign currency translation
impact on the Group's profitability was EUR -5 million (EUR 16 million).
Adjusted EBIT by business segment
EUR million FY 2016 FY 2015 Change Of Group in
FY 2016
-----------------------------------------------------------------------
Foodservice Europe-Asia-Oceania (1) 63.2 52.4 21% 23%
-----------------------------------------------------------------------
North America 107.6 88.2 22% 39%
-----------------------------------------------------------------------
Flexible Packaging 73.8 68.8 7% 26%
-----------------------------------------------------------------------
Molded Fiber 34.6 33.5 3% 12%
-----------------------------------------------------------------------
Other activities(2) -11.3 -5.4
-----------------------------------------------------------------------
Group (1, 2) 267.9 237.5 13%
(1) Excluding IACs of EUR -1.7 million in FY 2016
(2) Excluding IACs of EUR -22.6 million in FY 2015
Adjusted EBIT excludes EUR -1.7 million of IACs, which consist of restructuring
costs of EUR 9.5 million and a gain of EUR 7.8 million relating to business
combination. The restructuring costs are related to actions to improve the
competitiveness of the foodservice business in China and New Zealand and a
provision to cover potential environmental remediation actions at a former
Huhtamaki manufacturing unit in Norway as announced on June 27, 2016. The gain
relating to business combination derives from the increase of Huhtamaki's
ownership in Arabian Paper Products Company as announced on March 22, 2016. IACs
were booked for Q2 2016 and Q4 2016 in the Foodservice Europe-Asia-Oceania
business segment.
Adjusted EBIT and IACs
EUR million FY 2016 FY 2015
-------------------------------------------------------------------------------
Adjusted EBIT 267.9 237.5
-------------------------------------------------------------------------------
Restructuring costs -9.5
-------------------------------------------------------------------------------
Gains and losses relating to business combinations and 7.8 -4.3
disposals
-------------------------------------------------------------------------------
Fines and penalties imposed by authorities -18.3
-------------------------------------------------------------------------------
EBIT 266.2 214.9
Net financial expenses decreased to EUR 27 million (EUR 34 million). Tax expense
increased to EUR 48 million (EUR 29 million). The corresponding tax rate was
20% (16%).
Profit for the period was EUR 192 million (EUR 151 million). Adjusted EPS were
EUR 1.83 (EUR 1.65) and reported EPS EUR 1.81 (EUR 1.42).
Significant events during the reporting period
On March 22, 2016 Huhtamaki signed a EUR 150 million freely transferable loan
agreement (Schuldschein). The loan is targeted to institutional investors and is
divided into two floating rate and two fixed rate tranches with maturities of
5 and 7 years. Huhtamaki will use the funds for refinancing and general
corporate purposes of the Group.
On June 27, 2016 Huhtamaki announced actions to improve the competitiveness of
its foodservice business in Asia and Oceania. The foodservice packaging
manufacturing operations in South China will be consolidated into one efficient,
modernized unit. In addition, manufacturing will be focused on a defined core
foodservice packaging product range. The actions were expected to have an impact
on approx. 350 employees across functions. At the foodservice packaging unit in
Henderson, New Zealand, manufacturing operations were reorganized to improve
efficiency of the unit. The reorganization was expected to have an impact on
approx. 15 employees.
On September 16, 2016 Huhtamaki announced that it will invest in the expansion
and modernization of its manufacturing unit in Guangzhou, South China. The total
investment including site expansion, improvements in plant layout and new high-
speed machinery is expected to be approx. EUR 15 million. The investment
followed the earlier announced actions to improve the competitiveness of the
foodservice business in China and consolidate the South China manufacturing
operations. Majority of the investment takes place in the latter part of 2016
and early 2017, and the modernization is expected to be completed by the end of
2017. The Guangzhou manufacturing unit is part of the Foodservice Europe-Asia-
Oceania business segment.
On September 19, 2016 Huhtamaki announced that it will purchase a manufacturing
facility in Goodyear, Arizona, the U.S. to set up a new world class
manufacturing and distribution unit. The facility is set to service the
southwest and West Coast foodservice packaging and retail tableware markets. The
total investment including the site purchase and modifications, improvements in
infrastructure, and machinery investments and installations is expected to
exceed USD 100 million (approx. EUR 90 million). Majority of the investment
takes place in 2016-2017 and manufacturing is scheduled to begin in late 2017.
When fully operational, the unit is expected to employ approx. 300 employees and
it will become part of the North America business segment.
On October 25, 2016 Huhtamaki announced that it will set up three new
manufacturing units to boost growth in its Flexible Packaging business segment.
The largest of the new units will be located in the greater Cairo area in Egypt
and the other two in North East India. In addition, one label manufacturing unit
in the Mumbai area will be relocated and modernized. The new state of the art
manufacturing unit in Egypt will be owned and operated as a joint venture of
which Huhtamaki owns 75%. The total investment in Egypt is expected to be
approx. EUR 23 million with Huhtamaki share at approx. EUR 17 million. The
combined value of the mentioned three growth investments in India is expected to
be approx. EUR 9 million. Majority of the investments takes place in 2016-2017.
On December 23, 2016 Huhtamaki announced that it has signed a confirmation to
extend the maturity of its EUR 400 million syndicated revolving credit facility
loan agreement for a further period of one year in accordance with the extension
option of the loan agreement. The new termination date is January 9, 2022. The
credit facility will be used for general corporate purposes of the Group.
Outlook for 2017
The Group's trading conditions are expected to remain relatively stable during
2017. 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 2016 with
the majority of the investments directed to business expansion.
Dividend proposal
On December 31, 2016 Huhtamäki Oyj's non-restricted equity was EUR 664 million
(EUR 696 million). The Board of Directors will propose to the Annual General
Meeting that a dividend of EUR 0.73 (EUR 0.66) per share be paid.
Annual General Meeting 2017
The Annual General Meeting of Shareholders will be held on Thursday, April
27, 2017 at 11.00 (EET) at Messukeskus Helsinki, Expo and Convention Centre,
Messuaukio 1, 00520 Helsinki, Finland.
Financial reporting in 2017
In 2017, Huhtamaki will publish financial information as follows:
Interim Report, January 1 - March 31, 2017 April 27
Half-yearly Report, January 1 - June 30, 2017 July 21
Interim Report, January 1 - September 30, 2017 October 26
Annual Accounts 2016 will be published on week 8 on Huhtamaki's website at
www.huhtamaki.com.
This is a summary of Huhtamäki Oyj's Results January 1 - December 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 74 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 17,000 employees develop and make packaging that helps great
products reach more people, more easily. In 2016 our net sales totaled EUR 2.9
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.
[]
© 2024 Nasdaq, Inc. All Rights Reserved |