Huhtamäki Oyj’s Results January 1-December 31, 2023: Strong cash
flow and margin improvement
HUHTAMÄKI OYJ FINANCIAL STATEMENT RELEASE 8.2.2024 AT 8:30
Huhtamäki Oyj’s Results January 1-December 31,
2023: Strong cash flow and margin
improvement
Q4 2023 in brief
- Net sales decreased 6% to EUR 1,033 million (EUR 1,104
million)
- Adjusted EBIT was EUR 108 million (EUR 93 million); reported
EBIT was EUR 146 million (EUR 78 million)
- Adjusted EPS was EUR 0.68 (EUR 0.65); reported EPS was EUR 0.83
(EUR 0.54)
- Comparable net sales growth at Group level was -3% and -5% in
emerging markets
- The impact of currency movements on the Group's net sales was
EUR -44 million and EUR -5 million on EBIT
Q1-Q4 2023 in brief
- Net sales decreased 7% to EUR 4,169 million (EUR 4,479
million)
- Adjusted EBIT was EUR 393 million (EUR 395 million); reported
EBIT was EUR 381 million (EUR 405 million)
- Adjusted EPS was EUR 2.32 (EUR 2.49); reported EPS was EUR 1.97
(EUR 2.65)
- Comparable net sales growth at Group level was -2% and -4% in
emerging markets
- The impact of currency movements on the Group's net sales was
EUR -153 million and EUR -15 million on EBIT
- Capital expenditure was EUR 319 million (EUR 318 million)
- Free cash flow was EUR 321 million (EUR 11 million)
- The Board of Directors proposes a dividend of EUR 1.05 (1.00)
per share
Key figures
EUR million |
Q4 2023 |
Q4 2022 |
Change |
2023 |
2022 |
Change |
Net sales |
1,032.9 |
1,103.6 |
-6% |
4,168.9 |
4,479.0 |
-7% |
Comparable net sales growth |
-3% |
9% |
|
-2% |
15% |
|
Adjusted EBITDA1 |
159.5 |
143.3 |
11% |
590.1 |
596.9 |
-1% |
Margin1 |
15.4% |
13.0% |
|
14.2% |
13.3% |
|
EBITDA |
205.7 |
130.5 |
58% |
621.2 |
614.9 |
1% |
Adjusted EBIT2 |
107.5 |
93.3 |
15% |
392.6 |
395.1 |
-1% |
Margin2 |
10.4% |
8.5% |
|
9.4% |
8.8% |
|
EBIT |
146.0 |
78.1 |
87% |
380.9 |
405.3 |
-6% |
Adjusted EPS, EUR3 |
0.68 |
0.65 |
5% |
2.32 |
2.49 |
-7% |
EPS, EUR |
0.83 |
0.54 |
55% |
1.97 |
2.65 |
-25% |
Adjusted ROI2 |
|
|
|
11.2% |
11.0% |
|
Adjusted ROE3 |
|
|
|
13.2% |
14.9% |
|
ROI |
|
|
|
10.9% |
11.4% |
|
ROE |
|
|
|
11.8% |
15.7% |
|
Capital expenditure |
114.8 |
133.2 |
-14% |
318.7 |
318.5 |
0% |
Free Cash Flow |
128.4 |
71.3 |
80% |
321.4 |
11.1 |
>100% |
1 Excluding IAC of |
46.2 |
-12.7 |
|
31.1 |
18.0 |
|
2 Excluding IAC of |
38.5 |
-15.3 |
|
-11.7 |
10.2 |
|
3 Excluding IAC of |
16.0 |
-11.6 |
|
-35.9 |
16.0 |
|
Unless otherwise stated, all comparisons in this report are
compared to the corresponding period in 2022. 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.
President and CEO’s review
We are pleased with the many achievements during the year and
energized by the plans going forward. In line with the previous
years, we have proven our ability to deliver results in a volatile
market environment, thanks to our diverse portfolio and the agility
of our organization. Our investments for growth started to yield
benefits, and we have made progress towards our profitability
ambition by driving initiatives to improve our competitiveness.
We launched our updated 2030 growth strategy in 2023, which
translated in higher financial ambitions. We focus on three
priorities: scaling up our profitable core businesses; developing
and deploying proprietary innovative sustainable packaging
solutions; and driving world-class competitiveness. Our long-term
financial ambition is to deliver 5-6% annual net sales growth,
reaching a 10-12% adjusted EBIT margin with an adjusted return on
investment of 13-15%. To best drive the execution of our strategy,
we continue investing in talent and strategic capabilities.
In 2023, we delivered a solid performance despite the lower
consumption across categories and geographies, driven by the impact
of inflation. Destocking in the value chain had a negative impact
on sales volumes during the first half of 2023, particularly in
export markets in the Flexible Packaging segment. During the second
half of the year, consumer demand started to slightly improve.
Our performance was strong in the latter part of the year, with
a significant increase in adjusted EBIT in the fourth quarter of
2023. This was achieved despite a 3% decrease in comparable net
sales, due to lower sales volumes. Cash flow remained strong,
supported by a release of working capital. At the same time, we
have continued to invest for growth and innovation, in line with
our strategy.
Our full year 2023 comparable net sales decreased by 2% and
adjusted EBIT by 1%. Our adjusted EBIT margin was strong at 9.4%
despite lower sales volumes, the divestment of our operations in
Russia in September 2022 and currency translation. Free cash flow
reached EUR 321 million, mainly from a decrease in working capital.
This represents a significant improvement compared to last year.
With the improvement in cash flow, we were able to decrease our net
debt and thereby improve our net debt to adjusted EBITDA ratio from
2.5 to 2.2.
In 2023, we brought new capacity to commercial production,
including among others tableware in North America, and egg
packaging in North America and South Africa. We also announced the
expansion of our North America Foodservice capacity in Paris,
Texas, to capture the growing demand for folding carton packaging.
We also increased our capacity for fiber lids in Europe.
Additionally, we launched the production of Nespresso’s home
compostable paper-based coffee capsules. These projects illustrate
our strategy to scale up our profitable core businesses and
innovate for sustainable packaging solutions.
We took several steps during 2023 towards optimizing our
manufacturing footprint and strongly improving productivity
globally. These include consolidation of manufacturing capacity in
Europe and India to larger units. In November we announced a
program to accelerate the implementation of our strategy to
materially support our profitability ambitions. All cost levers
will be addressed including potential restructuring to a more
optimal manufacturing footprint, reducing input costs at an
accelerated pace, and improving productivity globally. The
efficiency improvements are expected to lead to savings of
approximately EUR 100 million over the next three years.
Innovation continues to be high on our agenda, as we seek to
both improve our sustainability performance and deliver new
solutions to our customers. Our goal is to design all our products
to be recyclable, compostable, or reusable. In 2023, we made a
significant leap towards this target, as we launched new
sustainable solutions in mono-material flexible packaging, which
are designed for recycling. We also continued to deploy fiber and
paper-based solutions, converting Foodservice and FMCG applications
to more sustainable alternatives. We are currently rolling out
these solutions globally.
The execution of our strategy proceeded well in 2023. With the
actions taken, we are well placed to capitalize on the
opportunities in the transforming packaging market. With demand
returning to growth in the foreseeable future, and with the support
from our capacity expansions, innovation and improving operational
performance, I believe we are well prepared to deliver on our
financial ambitions.
I would like to thank our customers and suppliers for their
trust and collaboration throughout the year. Importantly I would
like to thank our entire team for their great work and continued
commitment to deliver value to all our stakeholders.
Charles Héaulmé President and CEO
Financial review Q4
2023
Net sales by business segment
|
|
|
|
EUR million |
Q4 2023 |
Q4 2022 |
Change |
Foodservice Europe-Asia-Oceania |
250.2 |
266.7 |
-6% |
North America |
378.1 |
383.6 |
-1% |
Flexible Packaging |
319.8 |
369.1 |
-13% |
Fiber Packaging |
88.8 |
87.4 |
2% |
Elimination of internal sales |
-4.1 |
-3.2 |
|
Group |
1,032.9 |
1,103.6 |
-6% |
Comparable net sales growth by business
segment
|
Q4 2023 |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Foodservice Europe-Asia-Oceania |
-5% |
-3% |
5% |
11% |
15% |
North America |
4% |
1% |
1% |
2% |
10% |
Flexible Packaging |
-9% |
-11% |
-11% |
-5% |
1% |
Fiber Packaging |
2% |
4% |
7% |
17% |
17% |
Group |
-3% |
-4% |
-2% |
2% |
9% |
The Group’s net sales decreased 6% to EUR 1,033 million (EUR
1,104 million) during the quarter and comparable net sales growth
was -3%. Demand continued to be muted by the impact of inflation,
but showed signs of improvement in certain categories and
geographies, particularly in North America. Net sales were weighed
on by a decrease in sales volumes and changes in currencies,
whereas pricing had a positive impact. Comparable sales growth in
emerging markets was -5%. Foreign currency translation impact on
the Group’s net sales was EUR -44 million (EUR 46 million) compared
to 2022 exchange rates.
Adjusted EBIT by business segment
|
|
|
|
Items affecting comparability |
EUR million |
Q4 2023 |
Q4 2022 |
Change |
Q4 2023 |
Q4 2022 |
Foodservice Europe-Asia-Oceania |
25.0 |
24.2 |
3% |
-7.8 |
-4.9 |
North America |
54.1 |
49.0 |
10% |
- |
-5.6 |
Flexible Packaging |
26.0 |
15.5 |
68% |
48.2 |
-6.0 |
Fiber Packaging |
9.7 |
11.1 |
-13% |
-0.7 |
1.7 |
Other activities |
-7.2 |
-6.5 |
|
-1.1 |
-0.4 |
Group |
107.5 |
93.3 |
15% |
38.5 |
-15.3 |
Adjusted EBIT margin by business segment
|
Q4 2023 |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Foodservice Europe-Asia-Oceania |
10.0% |
10.3% |
9.2% |
8.3% |
9.1% |
North America |
14.3% |
13.2% |
12.2% |
11.9% |
12.8% |
Flexible Packaging |
8.1% |
7.2% |
4.9% |
6.1% |
4.2% |
Fiber Packaging |
10.9% |
12.5% |
10.8% |
12.1% |
12.7% |
Group |
10.4% |
9.7% |
8.8% |
8.8% |
8.5% |
The Group’s adjusted EBIT increased to EUR 108 million (EUR 93
million) and reported EBIT was EUR 146 million (EUR 78 million) in
the quarter. Adjusted EBIT increased supported by lower raw
material costs and the company’s actions to improve profitability,
whereas a decrease in sales volumes had a negative impact. The
Group’s adjusted EBIT margin increased and was 10.4% (8.5%).
Foreign currency translation impact on the Group’s earnings was EUR
-5 million (EUR 5 million).
Adjusted EBIT excludes EUR 38.5 million (EUR -15.3 million) of
items affecting comparability (IAC). The main changes in IAC’s
relate to the divestments of real estate in Thane, India and
Prague, Czech Republic, as a result of the manufacturing footprint
optimization actions.
Adjusted EBIT and IAC
EUR million |
Q4 2023 |
Q4 2022 |
Adjusted EBIT |
107.5 |
93.3 |
Acquisition related costs |
-0.1 |
-1.5 |
Restructuring gains and losses, including writedowns of related
assets |
28.0 |
-7.5 |
PPA amortization |
-2.2 |
-3.1 |
Settlement and legal fees of disputes |
0.0 |
-1.5 |
Prague site closure-related costs |
13.5 |
- |
Property damage incidents |
-0.1 |
-0.1 |
Implementation costs concerning large projects with SaaS cloud
computing technology |
-0.6 |
- |
Divestment of subsidiaries |
- |
7.0 |
Environmental case |
- |
-8.4 |
EBIT |
146.0 |
78.1 |
Net financial expenses were EUR 18 million (EUR 16 million) in
the quarter. Tax expense was EUR 29 million (EUR 3 million). Tax
expense in the comparison period was lower due to a one-off fixed
asset revaluation in Turkey, decreasing deferred tax liability.
Profit for the quarter was EUR 99 million (EUR 59 million).
Adjusted earnings per share (EPS) was EUR 0.68 (EUR 0.65) and
reported EPS EUR 0.83 (EUR 0.54). Adjusted EPS is calculated based
on adjusted profit for the period, which excludes EUR 16.0 million
(EUR -11.6 million) of IAC.
Adjusted profit and IAC
EUR million |
Q4 2023 |
Q4 2022 |
Adjusted profit for the period attributable to equity holders of
the parent company |
71.2 |
68.0 |
IAC in EBIT |
38.5 |
-15.3 |
IAC in Financial items |
-0.9 |
0.2 |
Taxes relating to IAC |
-13.0 |
3.4 |
Profit for the period attributable to equity holders of the
parent company |
-8.6 |
- |
Financial review 2023
Net sales by business segment
EUR million |
2023 |
2022 |
Change |
Foodservice Europe-Asia-Oceania |
1,037.2 |
1,110.7 |
-7% |
North America |
1,457.9 |
1,468.3 |
-1% |
Flexible Packaging |
1,341.0 |
1,558.2 |
-14% |
Fiber Packaging |
343.1 |
363.0 |
-5% |
Elimination of internal sales |
-10.3 |
-21.1 |
|
Group |
4,168.9 |
4,479.0 |
-7% |
Comparable net sales growth by business segment
|
2023 |
2022 |
2021 |
Foodservice Europe-Asia-Oceania |
2% |
18% |
11% |
North America |
2% |
14% |
6% |
Flexible Packaging |
-9% |
14% |
7% |
Fiber Packaging |
7% |
15% |
2% |
Group |
-2% |
15% |
7% |
The Group’s net sales decreased 7% to EUR 4,169 million (EUR
4,479 million) during the reporting period, and comparable net
sales growth was -2%. Overall, demand was muted by the impact of
inflation. Net sales were weighed on by a decrease in sales volumes
and changes in currencies, whereas pricing had a positive impact.
The divestment of the operations in Russia in 2022 had a negative
impact. Comparable sales growth in emerging markets was -4%.
Foreign currency translation impact on the Group’s net sales was
EUR -153 million (EUR 234 million) compared to 2022 exchange
rates.
Adjusted EBIT by business segment
|
|
|
|
Items affecting comparability |
EUR million |
2023 |
2022 |
Change |
2023 |
2022 |
Foodservice Europe-Asia-Oceania |
98.0 |
105.7 |
-7% |
-9.9 |
16.0 |
North America |
187.9 |
171.6 |
9% |
-0.0 |
-5.6 |
Flexible Packaging |
88.0 |
98.1 |
-10% |
5.8 |
-15.9 |
Fiber Packaging |
39.6 |
40.0 |
-1% |
-6.2 |
18.1 |
Other activities |
-20.9 |
-20.3 |
|
-1.4 |
-2.4 |
Group |
392.6 |
395.1 |
-1% |
-11.7 |
10.2 |
Adjusted EBIT margin by business segment
|
2023 |
2022 |
2021 |
Foodservice Europe-Asia-Oceania |
9.4% |
9.5% |
8.3% |
North America |
12.9% |
11.7% |
12.0% |
Flexible Packaging |
6.6% |
6.3% |
6.8% |
Fiber Packaging |
11.6% |
11.0% |
10.9% |
Group Total |
9.4% |
8.8% |
8.8% |
The Group’s adjusted EBIT decreased to EUR 393 million (EUR 395
million) and reported EBIT was EUR 381 million (EUR 405 million).
Adjusted EBIT decreased only by 1% despite the lower sales volumes,
divestment of operations in Russia and the negative foreign
currency impact. It was supported by lower raw material costs and
the company’s actions to improve profitability. The Group’s
adjusted EBIT margin increased and was 9.4% (8.8%). Foreign
currency translation impact on the Group’s earnings was EUR -15
million (EUR 22 million).
Adjusted EBIT excludes EUR -11.7 million (EUR 10.2 million) of
items affecting comparability (IAC). The main changes in IACs
relate to the sale of real estate in Thane, India and the planned
closure of the Flexible Packaging production facility in Prague,
Czech Republic.
Adjusted EBIT and IAC
EUR million |
2023 |
2022 |
Adjusted EBIT |
392.6 |
395.1 |
Acquisition related costs |
-0.5 |
-2.2 |
Restructuring gains and losses, including writedowns of related
assets |
17.3 |
-9.9 |
PPA amortization |
-8.9 |
-8.2 |
Settlement and legal fees of disputes |
-0.2 |
-4.5 |
Prague site closure-related costs |
-18.8 |
- |
Property damage incidents |
-0.1 |
-1.1 |
Implementation costs concerning large projects with SaaS cloud
computing technology |
-0.6 |
- |
Divestment of subsidiaries |
- |
44.5 |
Environmental case |
- |
-8.4 |
EBIT |
380.9 |
405.3 |
Net financial expenses were EUR 69 million (EUR 53 million). The
increase was due to higher interest rates and other financing
costs. Tax expense was EUR 87 million (EUR 67 million). The
effective tax rate was 28% (19%). The increase was due to an impact
from the business in Turkey, which has the US dollar as a
functional currency. As taxes are calculated in the significantly
devalued Turkish lira, the current tax charge as well as deferred
tax liabilities increased significantly. The functional currency
remeasurements related impact to deferred tax liabilities (mainly
Turkey) are a non-cash item and are treated as IAC. Additionally,
the tax rate was impacted by a non-deductible goodwill impairment
related to the planned closure of the Flexible Packaging site in
Prague, Czech Republic. Profit for the period was EUR 225 million
(EUR 285 million). Adjusted earnings per share (EPS) were EUR 2.32
(EUR 2.49) and reported EPS EUR 1.97 (EUR 2.65). Adjusted EPS is
calculated based on adjusted profit for the period, which excludes
EUR -35.9 million (EUR 16.0 million) of IAC.
Adjusted profit and IAC
EUR million |
2023 |
2022 |
Adjusted profit for the period attributable to equity holders of
the parent company |
242.3 |
260.2 |
IAC in EBIT |
-11.7 |
10.2 |
IAC in Financial items |
-0.1 |
0.0 |
Taxes relating to IAC |
-15.5 |
5.8 |
Profit for the period attributable to equity holders of the
parent company |
-8.6 |
- |
Outlook for 2024
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.
Dividend proposal
On December 31, 2023 Huhtamäki Oyj’s distributable funds were
EUR 836 million (EUR 908 million). The Board of Directors will
propose to the Annual General Meeting that a dividend of EUR 1.05
(EUR 1.00) per share be paid.
Annual General Meeting 2024
The Annual General Meeting of Shareholders (AGM) will be held on
Thursday, April 25, 2024 at 11:00 (EEST) at Scandic Marina Congress
Center, Katajanokanlaituri 6, Helsinki, Finland.
Teleconference
Huhtamaki will arrange a combined audiocast and teleconference
on February 8, 2024, at 9:30 EET. Huhtamaki’s CEO &
President Charles Héaulmé and CFO Thomas
Geust will present the results. The event will be followed by
a question-and-answer 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/2023-q4
A link to the teleconference is available
at: https://palvelu.flik.fi/teleconference/?id=10012436.
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
Financial reporting in 2024
In 2024, Huhtamaki will publish financial information as
follows:
Interim Report, January 1 - March 31, 2024
April 25 Half-yearly Report, January 1 - June 30, 2024
July
25 Interim Report, January 1 - September 30, 2024
October 24
The Annual Report 2023 will be published on the week commencing
February 26, 2024.
This is a summary of Huhtamäki Oyj's Results January 1–December
31, 2023. 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:
Kristian Tammela, Vice President, Investor Relations,
tel. +358 10 686 7058
HUHTAMÄKI OYJ Corporate Communications
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 116 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.
Huhtamaki Oyj (TG:HUKI)
過去 株価チャート
から 5 2024 まで 6 2024
Huhtamaki Oyj (TG:HUKI)
過去 株価チャート
から 6 2023 まで 6 2024