2016-07-22 07:35:41 CEST
2016-07-22 07:35:41 CEST
REGULATED INFORMATION
Huhtamäki Oyj - Half Year financial report
Huhtamäki Oyj's Half-yearly Report January 1-June 30, 2016: Solid organic and acquisitive growth
HUHTAMÄKI OYJ HALF-YEARLY REPORT 22.7.2016 AT 8:35
Huhtamäki Oyj's Half-yearly Report January 1-June 30, 2016: Solid organic and
acquisitive growth
Q2 2016 in brief
* Net sales grew to EUR 742 million (EUR 714 million)
* Adjusted EBIT improved to EUR 77.8 million (EUR 69.7 million); EBIT EUR
77.6 million (EUR 51.2 million)
* Adjusted EPS improved to EUR 0.54 (EUR 0.52); EPS EUR 0.53 (EUR 0.33)
* Comparable net sales growth was 6% in total and 9% in emerging markets
* Currency movements had a negative impact of EUR -28 million on the Group's
net sales and EUR -3 million on EBIT
H1 2016 in brief
* Net sales grew to EUR 1,414 million (EUR 1,344 million)
* Adjusted EBIT improved to EUR 135.6 million (EUR 119.4 million); EBIT EUR
135.4 million (EUR 96.8 million)
* Adjusted EPS improved to EUR 0.94 (EUR 0.85); EPS EUR 0.93 (EUR 0.62)
* Comparable net sales growth was 6% in total and 8% in emerging markets
* Currency movements had a negative impact of EUR -39 million on the Group's
net sales and EUR -4 million on EBIT
* Free cash flow improved to EUR 38 million (EUR 11 million)
Key figures
EUR million Q2 2016 Q2 2015 Change H1 2016 H1 2015 Change FY 2015
Net sales 742.0 713.6 4% 1,414.3 1,343.7 5% 2,726.4
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Adjusted EBITDA(1) 105.9 96.2 10% 190.5 171.0 11% 342.0
Margin(1) 14.3% 13.5% 13.5% 12.7% 12.5%
EBITDA 105.7 77.7 36% 190.3 148.4 28% 319.4
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Adjusted EBIT(1) 77.8 69.7 12% 135.6 119.4 14% 237.5
Margin(1) 10.5% 9.8% 9.6% 8.9% 8.7%
EBIT 77.6 51.2 52% 135.4 96.8 40% 214.9
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Adjusted EPS, EUR(1) 0.54 0.52 4% 0.94 0.85 11% 1.65
EPS, EUR 0.53 0.33 61% 0.93 0.62 50% 1.43
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ROI(1) 14.9% 13.4% 14.7%
ROE(1) 18.3% 17.5% 18.1%
Capital expenditure 31.7 36.9 -14% 56.0 61.6 -9% 146.9
Free cash flow 12.0 30.4 -61% 37.6 11.0 242% 91.2
(1) Excluding IAC of EUR -0.2 million in Q2 2016 and in H1 2016, EUR -18.5
million in Q2 2015, EUR -22.6 million in H1 2015 and 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.
Impact of new ESMA guidelines
In accordance with the new guidelines on alternative performance measures issued
by the European Securities and Markets Authority (ESMA) Huhtamäki Oyj has
revised the terminology used in its financial reporting. The term "Items
affecting comparability (IAC)" replaces the term "Non-recurring items (NRI)".
IAC includes, but is not limited to, material restructuring costs, impairment
losses and reversals, gains and losses relating to business combinations and
disposals, gains and losses relating to sale of intangible and tangible assets,
as well as material fines and penalties imposed by authorities.
Alternative performance measures are derived from performance measures reported
in accordance to International Financial Reporting Standards (IFRS) by adding or
deducting the IAC and they are called Adjusted. Thus the term "Adjusted earnings
before interests, taxes, depreciation and amortization (Adjusted EBITDA)"
replaces the term "EBITDA excluding non-recurring items", the term "Adjusted
earnings before interests and taxes (Adjusted EBIT)" replaces the term "EBIT
excluding non-recurring items" and the term "Adjusted earnings per share
(Adjusted EPS)" replaces the term "EPS excluding non-recurring items".
Huhtamaki uses alternative performance measures to better reflect the
operational business performance and to enhance comparability between financial
periods. They are reported in addition to, but not substituting, the performance
measures reported in accordance with IFRS.
Jukka Moisio, CEO:
"Our business did well during the second quarter which is traditionally our high
season. The Group's comparable growth was 6%. Trading conditions were relatively
stable in mature markets of Western Europe and North America. In emerging
markets, the like-for-like growth of 9% was led by good development in India,
Eastern Europe and Southeast Asia, while conditions in certain markets of Africa
were more challenging. Sales development in China was marginally positive.
We continued to implement our strategy and targeted future growth through
organic investments and acquisitions. We finalized three acquisitions during the
first half of the year and the most recent one, Delta Print and Packaging,
facilitated our entry into the folding carton packaging business also in Europe.
Delta's product range is complementary to our European foodservice offering and
supports our customers' future growth ambitions.
Our profitability improvement in the second quarter was good and primarily
driven by continued solid development in the North America segment. Earnings
developed positively also in the Foodservice Europe-Asia-Oceania and Flexible
Packaging segments. During the quarter we decided to take additional actions in
the Foodservice Europe-Asia-Oceania segment to improve its competitiveness in
China and New Zealand. Our profitability was all-time high with Adjusted EPS at
EUR 0.54 and 12-month rolling EBIT at 9.1% and ROI at 14.9% in the second
quarter.
We have achieved good profitability improvement in the first half of 2016 and
will stay focused in addressing profitable growth opportunities in the future."
Financial review Q2 2016
The Group's comparable net sales growth was 6% during the quarter. Strong growth
in the North America and Foodservice Europe-Asia-Oceania business segments
continued. Comparable growth in emerging markets was 9%. Growth was strongest in
Eastern Europe and South Asia, led by good momentum both in Russia and in India.
Net sales development turned marginally positive in China. The Group's net sales
grew to EUR 742 million (EUR 714 million). Foreign currency translation impact
on the Group's net sales was EUR -28 million (EUR 67 million) compared to 2015
exchange rates. The majority of the negative currency impact was due to
weakening of major emerging market currencies, US dollar, and pound sterling
versus euro.
Net sales by business segment
EUR million Q2 2016 Q2 2015 Change Of Group in
Q2 2016
Foodservice Europe-Asia-Oceania 193.9 175.4 11% 26%
North America 265.7 252.5 5% 35%
Flexible Packaging 220.5 224.8 -2% 30%
Molded Fiber 66.2 66.2 0% 9%
Elimination of internal sales -4.3 -5.3
Group 742.0 713.6 4%
Comparable growth by business segment
Q2 2016 Q1 2016 Q4 2015 Q3 2015
Foodservice Europe-Asia-Oceania 7% 7% 8% 6%
North America 8% 10% 5% 7%
Flexible Packaging 2% 1% -1% 5%
Molded Fiber 5% 4% 6% 5%
Group 6% 6% 4% 6%
The Group's earnings grew driven by strong profitability improvement in the
North America business segment. Good development in the Foodservice Europe-Asia-
Oceania and Flexible Packaging business segments contributed to the earnings
growth, whereas Molded Fiber business segment's earnings declined. The Group's
Adjusted EBIT were EUR 77.8 million (EUR 69.7 million) and reported EBIT
EUR 77.6 million (EUR 51.2 million). Foreign currency translation impacted the
Group's profitability by EUR -3 million (EUR 6 million).
Adjusted EBIT by business segment
EUR million Q2 2016 Q2 2015 Change Of Group in
Q2 2016
Foodservice Europe-Asia-Oceania(1) 17.6 16.4 7% 21%
North America 37.2 26.2 42% 46%
Flexible Packaging 19.1 17.8 7% 23%
Molded Fiber 8.2 9.0 -9% 10%
Other activities(2) -4.3 0.3
Group 77.8 69.7 12%
(1) Excluding IACs of EUR -0.2 million in Q2 2016
(2)Excluding IACs of EUR -18.5 million in Q2 2015
IACs consist of restructuring costs of EUR -8.0 million and a gain relating to
business combination of EUR 7.8 million. The restructuring costs include costs
expected to incur from actions to improve the competitiveness of the foodservice
business in China and New Zealand and a provision to cover potential
environmental remediation actions at the 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 the second quarter
in the Foodservice Europe-Asia-Oceania business segment.
Adjusted EBIT and IACs
EUR million Q2 2016 Q2 2015
Adjusted EBIT 77.8 69.7
Restructuring costs -8.0
Gains and losses relating to business combinations and 7.8 -0.2
disposals
Fines and penalties imposed by authorities -18.3
EBIT 77.6 51.2
Net financial expenses decreased to EUR 8 million (EUR 9 million). Tax expense
increased to EUR 14 million (EUR 7 million).
Profit for the quarter was EUR 57 million (EUR 36 million). Adjusted EPS were
EUR 0.54 (EUR 0.52) and reported EPS EUR 0.53 (EUR 0.33).
Financial review H1 2016
The Group's comparable net sales growth was 6% during the reporting period.
Growth was strongest in the North America and Foodservice Europe-Asia-Oceania
business segments throughout the period. Comparable growth in emerging markets
was 8%. Growth was strongest in Eastern Europe and South Asia. Net sales
development was marginally positive in China. The Group's net sales grew to
EUR 1,414 million (EUR 1,344 million). Foreign currency translation impact on
the Group's net sales was EUR -39 million (EUR 120 million) compared to 2015
exchange rates. The majority of the negative currency impact came from the
weakening of emerging market currencies versus euro.
Net sales by business segment
EUR million H1 2016 H1 2015 Change Of Group in
H1 2016
Foodservice Europe-Asia-Oceania 352.8 329.3 7% 25%
North America 500.9 463.2 8% 35%
Flexible Packaging 438.2 430.8 2% 31%
Molded Fiber 131.7 131.4 0% 9%
Elimination of internal sales -9.3 -11.0
Group 1,414.3 1,343.7 5%
The Group's earnings grew. Solid earnings improvement in the North America
business segment was the main contributor to the earnings growth. Also the good
development in the Flexible Packaging and Foodservice Europe-Asia-Oceania
business segments supported earnings growth. The Group's Adjusted EBIT were
EUR 135.6 million (EUR 119.4 million) and reported EBIT EUR 135.4 million (EUR
96.8 million). Foreign currency translation impacted the Group's profitability
by EUR -4 million (EUR 10 million).
Adjusted EBIT by business segment
EUR million H1 2016 H1 2015 Change Of Group in
H1 2016
Foodservice Europe-Asia-Oceania(1) 29.6 28.3 5% 21%
North America 58.0 40.0 45% 41%
Flexible Packaging 38.0 34.8 9% 27%
Molded Fiber 16.4 17.6 -7% 11%
Other activities(2) -6.4 -1.3
Group 135.6 119.4 14%
(1) Excluding IACs of EUR -0.2 million in H1 2016
(2) Excluding IACs of EUR -22.6 million in H1 2015
IACs consist of restructuring costs of EUR -8.0 million and a gain relating to
business combination of EUR 7.8 million. The restructuring costs include costs
expected to incur from actions to improve the competitiveness of the foodservice
business in China and New Zealand and a provision to cover potential
environmental remediation actions at the 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 the second quarter
in the Foodservice Europe-Asia-Oceania business segment.
Adjusted EBIT and IACs
EUR million H1 2016 H1 2015
Adjusted EBIT 135.6 119.4
Restructuring costs -8.0
Gains and losses relating to business combinations and 7.8 -4.3
disposals
Fines and penalties imposed by authorities -18.3
EBIT 135.4 96.8
Net financial expenses decreased to EUR 13 million (EUR 18 million). Tax expense
increased and was EUR 23 million (EUR 13 million). The corresponding tax rate
was 19% (16%).
Profit for the period was EUR 99 million (EUR 66 million). Adjusted EPS were
EUR 0.94 (EUR 0.85) and reported EPS EUR 0.93 (EUR 0.62).
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.
Financial reporting in 2016
In 2016, Huhtamaki will publish financial information as follows:
Interim Report, January 1-September 30, 2016 October 26
This is a summary of Huhtamäki Oyj's Half-yearly Report January 1-June
30, 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 72 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 17,000 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.
[HUG#2029935]
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