Investor
Relations
Interim Report Q3 2014
Solid net sales growth
Roadshow presentation
Oct 23, 2014
Comparable net sales growth 6% in Q3 2014
MEUR
-6
9% comparable
growth in emerging
markets led by
Eastern Europe
and South Asia
32
613
587
Q3 2013
Q3 2014
Organic growth
Acquisitions,
divestments &
other
Q3 2014
No currency
translation impact
on net sales during
the quarter
Group highlights Q3 2014
EUR million
Q3 2014
Q3 2013 Change
FY 2013
Net sales
613.2
586.5
5%
2,342.2
EBITDA*
67.8
64.2
6%
256.4
11.1%
10.9%
EBIT**
44.9
42.3
EBIT margin**
7.3%
7.2%
EPS**, EUR
0.29
0.31
ROI**
12.3%
12.1%
12.1%
ROE**
16.0%
15.0%
15.8%
Capital expenditure
31.6
26.1
21%
121.0
Free cash flow
14.7
31.9
-54%
56.0
EBITDA margin*
10.9%
6%
166.7
7.1%
-6%
1.21
Strongest growth in Molded Fiber, Films and Flexible Packaging segments
Best EBIT improvements in Foodservice Europe-Asia-Oceania and Films
segments
North America segments earnings development did not meet our expectations
Q3 2014
* Excluding NRI of MEUR -3.5 in Q3 2013 and MEUR -23.8 in FY 2013.
* Excluding NRI of MEUR -5.2 in Q3 2013 and MEUR -30.6 in FY 2013. ROI and ROE 12 month rolling figures.
Comparable growth by business segment*
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
FY
2013
Foodservice E-A-O
4%
5%
3%
3%
3%
1%
-1%
2%
North America
4%
10%
3%
6%
7%
3%
3%
5%
Flexible Packaging
6%
4%
7%
9%
6%
3%
-1%
4%
Molded Fiber
9%
10%
10%
10%
6%
5%
4%
6%
Films
9%
10%
9%
2%
3%
-7%
-1%
-1%
Group total
6%
7%
5%
6%
5%
2%
1%
3%
For five consecutive quarters
- 5+% organic growth on Group level
- All business segments growing organically
Strong momentum in Molded Fiber and Films continued
Flexible Packaging growth in emerging markets accelerated
Q3 2014
* Net sales growth in constant currencies, excluding acquisitions and divestments.
Business review by segment
Q3 2014
Foodservice Europe-Asia-Oceania
Net sales:
FY 2013
Q1-Q3 2014
MEUR 629.1
MEUR 464.8
Key figures:
MEUR
Q3 2014
Q3 2013
Change
16.0
11.5
39.1%
%
6
EBIT*
167.4
162.7
160.0
160.1
EBIT margin*
10.0%
7.2%
RONA*
17.6%
13.3%
Capital expenditure
8.0
4.0
100.0%
Operating cash flow
18.5
22.6
-18.1%
152.1
149.6
142.0
-2
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net sales, MEUR
Comparable growth, %
Net sales growth led by double-wall hot cups and Eastern Europe
Significant earnings improvement
- Favorable product and geographic mix
- Good cost control across the segment
- Positive impact from structural changes: BCP (UK) acquired and Italy
divested in Q4 2013 and Interpac (NZ) acquired in the end of August 2014
Q3 2014
* Excluding NRI of MEUR -2.7 in Q3 2013.
North America
Net sales:
FY 2013
Q1-Q3 2014
MEUR 725.3
MEUR 563.7
Key figures:
MEUR
Q3 2014
Q3 2013
Change
7.8
10.6
-26.4%
EBIT margin
4.1%
5.8%
RONA
6.7%
9.1%
Capital expenditure
5.7
15.8
-63.9%
Operating cash flow
14.0
9.9
41.4%
%
12
208.3
197.0
EBIT
191.2
182.7
10
181.0
164.6
164.2
0
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net sales, MEUR
Comparable growth, %
Growth in retail tableware and foodservice packaging, decline in frozen
desserts
Raw material and distribution cost escalation impacted margins
Actions to improve profitability under execution and mid-term profitability
ambitions unchanged
Q3 2014
Flexible Packaging
Net sales:
FY 2013
Q1-Q3 2014
MEUR 585.8
MEUR 458.2
Key figures:
MEUR
Q3 2014
Q3 2013
Change
10.8
10.7
0.9%
7.0%
7.4%
13.0%
13.2%
%
10
155.3
152.9
150.8
149.1
152.1
EBIT
8
6
145.2
138.6
EBIT margin
RONA
Capital expenditure
6.7
2.4
179.2%
Operating cash flow
9.9
5.2
90.4%
-2
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net sales, MEUR
Comparable growth, %
Strong growth in Asia led by personal care and food and beverage
packaging
Earnings development not satisfactory due to fierce competition and
increasing raw material prices in emerging markets
Acquisition of Positive Packaging signed in July closing subject to
competition authorities approval
Q3 2014
Molded Fiber
Net sales:
FY 2013
Q1-Q3 2014
MEUR 236.3
MEUR 183.8
Key figures:
MEUR
Q3 2014
Q3 2013
Change
7.4
6.3
17.5%
EBIT margin
12.2%
11.2%
RONA
20.1%
16.7%
Capital expenditure
9.8
3.0
226.7%
Operating cash flow
4.8
1.0
380.0%
%
12
EBIT
60.6
60.3
59.0
61.5
61.8
10
60.5
8
56.4
0
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net sales, MEUR
Comparable growth, %
Strong growth momentum in Europe continued
Customers favoring molded fiber egg packaging over plastics
Solid operations combined to volume growth led to robust earnings
RONA at all-time high above 20%
Q3 2014
10
Films
Net sales:
FY 2013
Q1-Q3 2014
MEUR 186.5
MEUR 154.4
Key figures:
MEUR
Q3 2014
Q3 2013
Change
4.7
2.6
80.8%
EBIT margin
9.0%
5.4%
RONA
8.3%
4.7%
Capital expenditure
1.2
0.8
50.0%
Operating cash flow
-0.4
4.2
-109.5%
%
12
EBIT
48.6
51.7
47.1
47.9
50.4
52.3
8
4
42.9
0
-4
-8
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net sales, MEUR
Comparable growth, %
Good net sales growth in all markets
Earnings growth due to volumes, operational efficiency and increased
share of higher margin products in the portfolio
Q3 2014
* Excluding NRI of MEUR -2.5 in Q3 2013.
11
Increased M&A activity during the quarter
July 2014
Acquisition of Positive
Packaging in India and
UAE
(Flexible Packaging)
in progress
August 2014
Acquisition of Interpac in
New Zealand
(Foodservice E-A-O)
August 2014
Paper cup manufacturing
agreement with Suomen
Kerta in Finland
(Foodservice E-A-O)
Huhtamaki Group
Increased focus on food and drink packaging
Evaluation of future
options of the Films
segment
in progress
Q3 2014
Financial review
Q3 2014
13
Income statement
Q3 2014
Q3 2013
Q1-Q3
2014
Net sales
613.2
586.5
1,805.1
1,773.8
2,342.2
EBITDA*
67.8
64.2
208.1
195.8
256.4
EBIT**
44.9
42.3
140.6
128.7
166.7
Net financial items
-8.1
-7.0
-23.4
-21.1
-25.5
Profit before taxes**
36.8
35.3
117.2
107.6
141.2
Income tax expense
-5.8
-2.9
-18.7
-13.3
-12.9
Profit for the period**
31.0
32.4
98.5
94.3
128.3
EPS**, EUR
0.29
0.31
0.93
0.89
1.21
EUR million
Q1-Q3
2013
FY 2013
Net financial items higher due to bond issued in Q2 2013
YTD EPS +5%
Higher tax rate led to lower EPS during the quarter
Q3 2014
* Excluding NRI of MEUR -3.5 in Q3 2013, MEUR -6.7 in Q1-Q3 2013 and MEUR -23.8 in FY 2013.
** Excluding NRI of MEUR -5.2 in Q3 2013, MEUR -12.5 in Q1-Q3 2013 and MEUR -30.6 in FY 2013.
14
Foreing currency translation impact
Average exchange rates
Closing exchange rates
Sep 30
2014
Sep 30
2013
Change
USD
1.26
1.35
7%
-9%
INR
77.86
84.84
8%
0.85
4%
GBP
0.78
0.84
7%
8.36
8.11
-3%
CNY
7.73
8.26
7%
AUD
1.48
1.35
-10%
AUD
1.44
1.45
0%
THB
43.93
40.06
-10%
THB
40.80
42.26
3%
RUB
48.05
41.67
-15%
RUB
49.77
43.82
-14%
BRL
3.10
2.79
-11%
BRL
3.08
3.04
-1%
NZD
1.60
1.61
1%
NZD
1.62
1.63
1%
ZAR
14.54
12.45
-17%
ZAR
14.26
13.60
-5%
Q1-Q3
2014
Q1-Q3
2013
Change
USD
1.36
1.32
-3%
INR
82.30
75.62
GBP
0.81
CNY
Delayed impact on income
statement as average exchange
rates are used
Balance sheet inflated as closing
exchange rates are used
Foreign currency translation impact on net sales MEUR -58 and
on EBIT MEUR -4 in Q1-Q3 2014
Q3 2014
15
Raw material price development
140
Polymer prices
were stable during
Q1-Q3 2014
130
120
110
Some volatility in
emerging markets
mainly due to
demand and
exchange rates
100
90
80
Paperboard and
recycled fiber prices
continued to rise in
the US
70
60
50
PS
+1%
Q3 2014
PP
+2%
PE
-1% (Q3 2014 vs. Q3 2013)
16
Group statement of financial position
EUR million
Sep 2014
Dec 2013
Sep 2013
Total assets
2,282.2
2,142.1
2,156.6
Operating working capital
442.2
363.5
399.3
Net debt
471.2
404.6
420.9
Equity & non-controlling interest
885.0
804.8
801.1
0.53
0.50
0.53
ROI*
12.3%
12.1%
12.1%
ROE*
16.0%
15.8%
15.0%
Gearing
Currency fluctuations caused major changes in balance sheet
Operating working capital remained on a high level: Q3 improvements
masked by currency fluctuations
Q3 2014
* Excluding NRI of MEUR -12.5 in Sep 2013 and MEUR -30.6 in Dec 2013.
17
Net debt development
1.8
1.8
1.7
1.8
1.7
1.6
1.6
460
472
471
Cash and cash
equivalents*
MEUR 191
433
421
Unused committed
credit facilities*
MEUR 320
418
405
0.51
0.58
0.58
0.53
0.50
0.50
0.53
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net debt
Q3 2014
Financial position
remains strong
Gearing
* End of Q3 2014
Net debt/EBITDA
Target corridor 2-3
Covenant level 3.5
Funds available for
acquisitions*
MEUR 400-500 before
Positive Packaging
acquisition
18
Cash flow
MEUR
208
196
Q1-Q3 2014
38
13
-38
-23
-17
-17
Change in
working capital
-13
-77
-80
Reported
EBITDA
Net financial
items
-17
Taxes
Q1-Q3 2013
11
-5
-82
Capital
expenditure
Proceeds from
selling assets
Other
Free cash flow
Strong net sales growth visible in increased inventories and accounts
receivables
- Operating working capital requires further discipline
Capex accelerated during the quarter due to increased activity in emerging
markets
Q3 2014
19
Well on track towards our medium-term
financial ambitions
FY 2013
YTD 2014
Mid-term
ambition
Organic growth
3%
6%
5+%
EBITDA margin
10.9%
11.5%
12+%
7.1%
7.8%
8+%
ROI
12.1%
12.3%
15%
ROE
15.8%
16.0%
15+%
50%
37%
40%
Net debt/EBITDA
1.6
1.8
2-3
Free cash flow, MEUR
56
11
100
47%
n/a
40-50%
EBIT margin
Capex/EBITDA
Dividend payout ratio
Q3 2014
Looking forward
Q3 2014
21
Outlook 2014 - unchanged
The Groups trading conditions are expected to remain
relatively stable during 2014.
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 2013. A significant part of the investments are expected
to be directed to enhance growth in the emerging markets.
Q3 2014
22
Scheduled events
Results 2014
February 12, 2015
Q3 2014
CMD 2015
planned for March 5, 2015
in Helsinki area
23
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.
In September 2012 Huhtamki Oyj received the European Commissions
statement of objections concerning alleged anticompetitive behavior during
years 2000-2008. Huhtamki Oyj has responded to the statement of
objections and is exercising its rights of defense in the process, which is
expected to take several months. The final outcome of the process is
uncertain.
Q3 2014
Appendices
IR
Q1 2014
25
Flexible
packaging
Foodservice disposables*
In total
Operations in
Share of
net sales**
Businesses
Huhtamaki businesses in brief
IR
Molded fiber
packaging
Films
57%
25%
10%
8%
North America
Europe
Asia
Oceania
Middle East
Africa
Europe
Asia
South America
Europe
Oceania
South America
Africa
Europe
North America
South America
Asia
EUR 2.3
14,362
30
61
billion in net
sales**
people
employed**
operating
countries
manufacturing
units
* Includes reporting segments North America and Foodservice Europe-Asia-Oceania
** FY 2013 figures
26
End-user segments important to us
Disposable tableware for QSR
and retail*
Hot and cold beverages
Ice cream
Eggs
Pharma
Petfood
Other
IR
* Excluding cups.
** Including flexible coffee packaging.
27
Growth opportunities at our target
markets
Developing and
emerging markets
Growth 5-6%
- 4 billion people
Developed markets
0-1%
- 1 billion people
-
Growth
Average purchase power
USD 35,000 /capita
-
How to grow? Market share
gains, category changes,
substitution and innovation
USD 8,000 /capita
-
Other countries
- Growth approx.
5%
- 2 billion people
-
Average purchase power
below
/capita
Stay alert
USD 2,500
IR
Average purchase power
How to grow? Basic GDP growth
and higher disposable income,
advances in modern retail and
away-from-home consumption
28
Emerging markets share of net sales
HUHTAMAKI AT
EMERGING MARKETS
Approx. 29 % of net sales to
emerging markets
45% of employees
46% of manufacturing units
7%
18%
2%
IR
2%
Emerging markets as defined in IMF World Economic Outlook 2014.
29
Long-term customer relationships
Top 5 customers*
Top 5 customers 20%
of net sales
Costco, Mars, McDonalds,
Nestl, Unilever
Top 10 customers 26%
Key customers average growth > Group average growth
Key customers aim to expand and target significant growth
Emerging markets with double-digit growth
Sustainable products (renewable raw materials, recyclable, light-weighted)
IR
* In alphabetical order.
30
Competitive advantages
Huhtamaki has resources and willingness to meet the key
customer expectations
Excellent emerging
market footprint
International and multi-cultural operations and culture
High standards in all markets
Recognized technological know-how
Financial health supports growth
momentum
Sustainable products and concepts
IR
31
Customer needs drive organic growth
Organic growth led by key customer needs
Geographical expansion
New product development
Accelerate further growth
Growth capex targets good organic top line development
Target velocity
Expected annual CAPEX
MEUR 125-150
1.8
Approximately MEUR 200
new net sales
Return on net operating assets excluding goodwill
Current
17%
IR
Minimum target for new capex on
the average
20%
32
Seek growth and stronger positions through
acquisitions
Follow key customers
Economic recovery and growth call for new products
Branded consumer companies at growth mode and bullish
Look to acquire businesses that make us stronger
Consolidation, market position and growth at developed markets
Growth at fast-growing and emerging markets
Firepower
New net sales*
New EBITDA*
MEUR
MEUR
MEUR
400-500
500-600
60-70
IR
* In average.
Net debt /
EBITDA*
2-3
33
Reporting segment Foodservice E-A-O:
Global footprint brings competitive advantage
Catering &
Distribution
QSR&B
Consumer
Goods
Vending
MEUR
LTM Q3 14
FY 2013
FY 2012
FY 2011
FY 2010
616.9
629.1
626.8
524.1
467.6
56.6
46.9
38.1
20.0
24.5
9.2%
7.5%
6.1%
3.8%
5.2%
17.6%
13.9%
11.6%
7.8%
10.6%
Net sales
EBIT*
EBIT margin*
RONA*
* Excluding NRI of MEUR 0.8 in FY 2011, MEUR -28.1 in FY 2013 and in LTM Q3 2014.
Competitive advantages
Global business and network local presence
Key customers
Frontrunner in innovative and sustainable solutions
Ability to meet needs of global key accounts
Expertise in paper and fiber conversion
People
Focus areas
Key competitors
Upside potential from product portfolio, customer and capacity
expansion
Seda, HK Cups, International Paper, local players
Sales by geography
Key facts
26% of Group sales
4,220 employees
17 manufacturing units
Investments in new products and plants especially at emerging
markets
Western Europe
Medium-term targets
Eastern Europe
Organic net sales growth: 4-6% (annual growth rate)
RoW
EBIT margin: 8-9%
RONA: ~15+%
IR
34
Reporting segment North America:
Leveraging global foodservice expertise to accelerate growth
Catering &
Distribution
QSR&B
Consumer
Goods
Retail
MEUR
LTM Q3 14
FY 2013
FY 2012
FY 2011
FY 2010
744.7
725.3
704.3
532.3
535.6
34.8
38.4
53.0
43.5
45.4
EBIT margin
4.7%
5.3%
7.5%
8.2%
8.5%
RONA
6.7%
8.0%
11.7%
11.2%
11.9%
Net sales
EBIT
Competitive advantages
Chinet brand
Molded fiber
Paperboard scale, technology and footprint
Key customers
Low weight plastic cup design
Uniquely global
Offering and expertise to build store brand
Focus areas
Key competitors
International Paper, Dart/Solo, Reynolds/Pactiv, Gen Pak,
AJM,Koch/Georgia Pacific, Aspen, Rock Tenn
Key facts
Sales by market channel
31% of Group sales
3,521 employees
17 manufacturing units
Portfolio transformation brings substantially increased opportunity
for growth in foodservice & retail
Reduced capex after completion of Batavia
EBIT and RONA margins returning to more normalized levels
QSR&B, C&D
Medium-term targets
Retail
Organic net sales growth: 4-6% (annual growth rate)
CG
EBIT margin: 7-8%
RONA: ~12%
IR
Note: QSR&B = Quick Service Restaurants & Beverages
35
Reporting segment Flexible Packaging:
A leader in technology and innovation
Food &
Beverages
Petfood
Tube
laminates
Personal
care &
household
Pharma/
medical
Labels
MEUR
LTM Q3 14
FY 2013
FY 2012
FY 2011
FY 2010
596.8
585.8
573.3
578.3
524.6
43.2
44.0
44.6
38.3
34.3
7.2%
7.5
7.8
6.6
6.5
13.0%
13.3
13.8
9.3
10.7
Net sales
EBIT*
EBIT margin*
RONA
* Excluding NRI of MEUR -7.8 in FY 2011.
Competitive advantages
Strong technical knowhow
Product portfolio depth and width
Key customers
High focus on NPD and continuous innovation
Global presence
Focus areas
Key competitors
Amcor, Constantia, Bemis, Dai Nippon, regional and local players
Key facts
Significant growth opportunities in emerging markets and select
categories
Focus on profitable growth supported by investments in additional
capacity
Sales by geography
Medium-term targets
25% of Group sales
4,106 employees
Europe
Organic net sales growth: 6-8% (annual growth rate)
12 manufacturing units
Asia
EBIT margin: 8-9%
Oceania
RONA: ~15+%
IR
36
Reporting segment Molded Fiber:
Global network and strong technological knowhow
Egg
packaging
Fruit &
vegetable
Other (cup carriers,
bottle dividers)
MEUR
LTM Q3 14
FY 2013
FY 2012
FY 2011
FY 2010
244.1
236.3
237.3
244.0
232.9
33.9
29.6
26.4
20.9
21.9
EBIT margin
13.9%
12.5%
11.1%
8.6%
9.4%
RONA
20.1%
18.2%
16.1%
12.0%
12.7%
Net sales
EBIT
Competitive advantages
In-house proprietary technology
In-house recycled paper sourcing
Key customers
Local presence global support
Packers
Motivated and capable team
Retailers
Focus areas
Key competitors
Growth driven by emerging markets and mix improvements
Hartmann, Pactiv, local players, plastics manufacturers
High overall equipment efficiency targeted
Sales by geography
Key facts
Medium-term targets
10% of Group sales
1,537 employees
11 manufacturing units
IR
Europe
RoW
Organic net sales growth: ~5% (annual growth rate)
EBIT margin: 12-14%
RONA: ~18%
37
Reporting segment Films:
Leading competencies and technical knowhow
Hygiene &
healthcare
Pressure
sensitive
Building &
construction
MEUR
LTM Q3 14
FY 2013
FY 2012
FY 2011
FY 2010
197.3
186.5
191.5
177.0
163.7
11.5
6.7
9.2
8.4
10.8
EBIT margin*
5.8%
3.6%
4.8%
4.7%
6.6%
RONA*
8.3%
4.6%
6.0%
6.2%
9.1%
Net sales
EBIT*
* Excluding NRI of MEUR -7.8 in FY 2011, MEUR -2.5 in FY 2013 and in LTM Q3 2014.
Competitive advantages
Unique global footprint
Strong technology knowhow in release films
Key customers
Broad product portfolio individualized solutions
High focus on innovations
Focus areas
Growth opportunities especially in emerging markets and hygiene &
healthcare
Key competitors
Mondi, Swanson, Siliconature, regional players
Focus on profitability and RONA improvement
Sales by geography
Key facts
8% of Group sales
924 employees
4 manufacturing units
IR
Europe
NA
RoW
Medium-term targets
Organic net sales: ~5% (annual growth rate)
EBIT margin: 7-9%
RONA: ~13%
38
Successful implementation of the quality
growth strategy
Eight acquisitions completed to date:
-
Prisma Pack, September 2011 (Films)
Paris Packaging, Inc., September 2011 (North America)
Ample Industries, Inc., November 2011 (North America)
Josco (Holdings) Limited, April 2012 (Foodservice E-A-O)
Winterfield, LLC, August 2012 (North America)
Webtech Labels Private Limited, November 2012 (Flexible Packaging)
BCP Fluted Packaging Ltd., November 2013 (Foodservice E-A-O)
Interpac Packaging Limited, August 2014 (Foodservice E-A-O)
In total MEUR 260 of annual net sales acquired for MEUR 177*
-
Positive Packaging, signed in July 2014 (Flexible Packaging)
After closing the Positive Packaging acquisition,
in total MEUR 480 of annual net sales acquired for MEUR 424*
IR
* As announced at the time of the acquisitions and including assumed debt.
Last updated: September 1, 2014
39
Acquisition of Positive Packaging*
Positive Packaging in brief
Deal rationale in brief
Net sales MEUR 220 (2014e)
Further enhances Huhtamakis
position in India
2,500 employees
7 manufacturing units in India
2 manufacturing units in UAE
Sales network across Africa
Expands the manufacturing
footprint into Middle East
More than doubles the sales in
Africa
Huhtamaki will become a leading flexible packaging
provider with an unmatched footprint in emerging markets
IR
* Signed in July 2014, closing subject to competition authorities' approval.
40
Acquisition of Positive Packaging*
Net sales MEUR 220 (2014e)
Historical growth rate 10-15%
Enterprice value (EV)
MEUR 247
EV/EBITDA 11-11.5
(8-9 after synergies)
Main synergies in manufacturing
footprint, production and operative
efficiencies expected synergies
approximately 3% of net sales
Serves similar clientele in several
countries with partly
complementary product range
The combined Huhtamaki Flexible Packaging business
targets to be at a runrate of EUR 1 billion by the end of 2015
IR
* Signed in July 2014, closing subject to competition authorities' approval.
41
Future growth of flexible packaging mostly
at emerging markets
Global consumer flexible packaging market* USD 76 billion (2013) USD 100 billion (2018e)
EMERGING MARKETS
DEVELOPED MARKETS
Share of
global
market
2013
Expected
5y CAGR
Share of
global
market
2018e
Share of
global
market
2013
Expected
5y
CAGR
Share of
global
market
2018e
India
5%
14%
7%
Western Europe
22%
1.3%
17%
Middle East & Africa
5%
13%
7%
North America
23%
2.6%
20%
China
10%
10%
13%
Japan/ Korea/ Taiwan/
Singapore
14%
1.5%
11%
Remaining South & SE
Asia
8%
12%
10%
Oceania
1%
1.5%
1%
Eastern Europe
4%
7%
5%
Central & South America
8%
7%
9%
40%
10.4%
51%
60%
2.0%
49%
Emerging markets
5 year growth (USD)
IR
20 bn
Developed markets
4 bn
* Does not include shopping bags or similar; flexibles materials applications in irrigation, construction or
similar; single unprinted film over wraps for cigarettes, daily fresh vegetables etc.
Source: Huhtamaki estimate
42
Combined emerging market footprint
Huhtamaki Flexible Packaging & Positive Packaging
#1 in Middle
East
#1 in India
#2 in Thailand
#3 in Vietnam
#2 in Africa
Combined net sales to emerging markets approx.
MEUR 500+ (2014e)
Population of 2 billion people in the target market
2 brand new plants: UAE starting 2014 and
Thailand in 2015
IR
43
Huhtamaki emerging markets position after
closing the Positive Packaging deal
6%
22%
6%
2%
After closing the Positive Packaging acquisition:
Approx. 36 % of net sales to emerging markets
54% of employees in emerging markets
53% of manufacturing units in emerging markets
IR
Emerging markets as defined in IMF World Economic Outlook 2014.
44
Group financials
2009-2013
2013
2012*
2011
2010
2009
MEUR
2,342
2,321
2,043
1,952
1,832
-5
MEUR
256
254
208
214
193
10.9
10.9
10.2
11.0
10.5
MEUR
167
164
128
134
112
7.1
7.0
6.2
6.9
6.1
EPS***
EUR
1.21
1.19
0.87
0.92
0.57
ROI***
12.1
12.6
9.8
12.0
9.6
ROE***
15.8
15.8
11.0
14.5
10.1
Capex
MEUR
121
94
82
86
53
Free cash flow
MEUR
56
103
65
113
208
0.50
0.50
0.49
0.32
0.50
1.6
1.6
1.9
1.2
1.7
0.57
0.56
0.46
0.44
0.38
Net sales
Comparable growth**
EBITDA***
EBITDA margin***
EBIT***
EBIT margin***
Gearing
Net debt to EBITDA***
Dividend per share
IR
EUR
* Restated figures
** Organic growth in constant currencies
*** Excluding NRI
NB: Continuing business in 2010 and 2009.
45
Items below EBIT in 2013
Net financial items
Average interest cost 3.3% in 2013
No major changes expected on financial
charges
Changes in currency split might
cause some fluctuations on total level
Cash and cash equivalents unusually
high at MEUR 241
Other 23%
RUB 5%
EUR 27%
Net debt
split by
currency
HKD 9%
USD 24%
GBP 12%
Taxes
Medium-term tax rate is expected to be within the range of 15-20%
IR
46
Debt maturity structure
As of September 30, 2014
MEUR
500
400
300
200
100
0
2014
2015
2017
2018
Drawn committed credit facilities
Available unused committed facilities
Bonds and other loans
Uncommitted loans from financial institutions
Commercial paper program
IR
2016
Later
47
Ownership
24,413 registered shareholders
at the end of September 2014
Shareholder distribution by sector
September 30, 2014
57% of shares in domestic
ownership
21% of shares controlled by
non-profit organizations
Finnish Cultural Foundation
a major owner since 1943,
current ownership 14%
Number of outstanding shares
107,760,385 including 4,206,064
of the Companys own shares
6%
7%
7%
43%
17%
20%
Foreign ownership incl. nominee registered shares
Non-profit organizations
Households
Private companies
Financial and insurance companies
Public-sector organizations
IR
48
What to expect going forward
Deliver organic growth
Identify and close acquisitions
Target new record EPS in 2014
Good free cash flow
Predictable dividend growth
Continued focus on costs and operational
excellence, e.g. Lean 6 Sigma
IR
49
Definitions for key indicators
EPS attributable to equity holders
of the parent company =
Profit for the period - non-controlling interest
Average number of shares outstanding
EPS attributable to equity holders
of the parent company (diluted) =
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 ) (12 m roll.)
Equity + non-controlling interest (average)
Return on investment (ROI) =
100 x (Profit before taxes + interest expenses + net other financial expenses) (12 m roll.)
Statement of financial position total - Interest-free liabilities (average)
IR
For further information,
please contact us:
www.huhtamaki.com Investors
[email protected]
Investor Relations
Kaisa Uurasmaa
Tel. +358 10 686 7815
[email protected]
