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2016-10-26

Huhtamäki Oyj's Interim Report January 1-September 30, 2016: Profitability improvement continued

30, 2016: Profitability improvement continuedQ3 2016 in brief * Net sales grew to EUR 719 million (EUR 692 million)
* EBIT improved to EUR 67 million (EUR 62 million)
* EPS improved to EUR 0.46 (EUR 0.43)
* Comparable net sales growth was 2% in total and 7% in emerging markets
* Currency movements had a negative impact of EUR -10 million on the Group's
net sales and EUR -1 million on EBIT
* Revised capital expenditure outlook for 2016 (published on October 24):
Capital expenditure is expected to be higher than in 2015 with the majority
of the investments directed to business expansion.

Q1-Q3 2016 in brief * Net sales grew to EUR 2,134 million (EUR 2,036 million)
* Adjusted EBIT improved to EUR 202.5 million (EUR 181.8 million); EBIT EUR
202.3 million (EUR 159.2 million)
* Adjusted EPS improved to EUR 1.39 (EUR 1.27); EPS EUR 1.39 (EUR 1.05)
* Comparable net sales growth was 4% in total and 8% in emerging markets
* Currency movements had a negative impact of EUR -49 million on the Group's
net sales and EUR -5 million on EBIT
* Free cash flow improved to EUR 79 million (EUR 38 million)

Key figures------------------------------------------------------------------------------------------
| EUR million Q3 2016 Q3 2015 Change Q1-Q3 2016 Q1-Q3 2015 Change FY 2015 |
| Net sales 719.2 692.2 4% 2,133.5 2,035.9 5% 2,726.4 |
| Adjusted EBITDA1 96.1 88.6 8% 286.6 259.6 10% 342.0 |
| Margin1 13.4% 12.8% 13.4% 12.8% 12.5% |
| EBITDA 96.1 88.6 8% 286.4 237.0 21% 319.4 |
| Adjusted EBIT1 66.9 62.4 7% 202.5 181.8 11% 237.5 |
| Margin1 9.3% 9.0% 9.5% 8.9% 8.7% |
| EBIT 66.9 62.4 7% 202.3 159.2 27% 214.9 |
| Adjusted EPS1, EUR 0.46 0.43 7% 1.39 1.27 9% 1.65 |
| EPS, EUR 0.46 0.43 7% 1.39 1.05 32% 1.43 |
| ROI1 14.7% 14.2% 14.7% |
| ROE1 18.0% 18.4% 18.1% |
| Capital expenditure 39.2 34.8 13% 95.2 96.4 -1% 146.9 |
| Free cash flow 41.0 27.2 51% 78.6 38.2 106% 91.2 |
------------------------------------------------------------------------------------------
1
Excluding IAC of EUR -0.2 million in Q1-Q3 2016 and EUR -22.6 million in Q1-Q3
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.

Jukka Moisio, CEO:"During the third quarter, growth continued on a good level in the Foodservice
Europe-Asia-Oceania and Molded Fiber segments. Net sales development was soft
in the North America and Flexible Packaging segments, where we have initiated
actions to accelerate top line growth. The Group's comparable net sales
growth was 2% for the third quarter and 4% for the first 9 months. Emerging
market growth at 7% for the third quarter was at a good level.

Our margins and returns improved against previous year. We achieved a 12-month
rolling EBIT margin of 9.1% and ROI of 14.7% - both approximately at our
mid-term ambitions set in March 2015. Similarly, cash generation from
operations was strong meeting our mid-term expectations.

We announced several growth actions across our business segments during the
quarter. The largest one is the USD 100 million investment to build a new
manufacturing and distribution facility in Goodyear, Arizona. The unit is set
to improve our future competitiveness and capability in serving the
foodservice packaging and retail tableware customers in the west coast and
southwest of the United States. Flexible Packaging segment is in the process
of building three new plants in India and will also start to build a new
Greenfield facility in Egypt. Foodservice Europe-Asia-Oceania segment is
improving its profitability in China through portfolio optimization and
modernization and expansion of its plant in Guangzhou. Molded Fiber segment
inaugurated new lines in Russia and in Northern Ireland during the quarter.
Following the recently announced growth investments, mainly the one in the
U.S., we have updated our capital expenditure outlook for 2016.

We continue to see good long term growth opportunities in food packaging. With
our broad geographic footprint and our ambition to continue developing new
businesses and building new facilities, we are well placed to help our
customers grow and serve consumers in a competitive way."

Financial review Q3 2016The Group's comparable net sales growth was 2% during the quarter. Good growth
was achieved in the Foodservice Europe-Asia-Oceania and Molded Fiber business
segments. Growth was more modest in the North America business segment
against a strong third quarter in the previous year and high growth in the
second quarter in 2016. In the Flexible Packaging business segment net sales
declined. Comparable growth in emerging markets was 7% with big variation
between the markets. Strong growth in Eastern Europe and South Asia, led by
good momentum both in Russia and in India, continued. Net sales grew in
China, but declined in South America. Export sales of flexible packaging to
African countries declined. The Group's net sales grew to EUR 719 million
(EUR 692 million). Foreign currency translation impact on the Group's net
sales was EUR -10 million (EUR 40 million) compared to 2015 exchange rates
with vast majority of the impact originating from the weakening of the pound
sterling against euro.

Net sales by business segment--------------------------------------------------------------------------
| EUR million Q3 2016 Q3 2015 Change Of Group in |
| |
| Q3 2016 |
| Foodservice Europe-Asia-Oceania 195.2 169.5 15% 27% |
| North America 244.4 240.3 2% 34% |
| Flexible Packaging 216.5 223.6 -3% 30% |
| Molded Fiber 67.1 62.4 8% 9% |
| Elimination of internal sales -4.0 -3.6 |
| Group 719.2 692.2 4% |
--------------------------------------------------------------------------
Comparable growth by business segment-----------------------------------------------------------------------
| Q3 2016 Q2 2016 Q1 2016 Q4 2015 |
| Foodservice Europe-Asia-Oceania 5% 7% 7% 8% |
| North America 2% 8% 10% 5% |
| Flexible Packaging -3% 2% 1% -1% |
| Molded Fiber 6% 5% 4% 6% |
| Group 2% 6% 6% 4% |
-----------------------------------------------------------------------
The Group's earnings grew driven by solid profitability improvement in the
Foodservice Europe-Asia-Oceania and Flexible Packaging business segments.
Good progress in the Molded Fiber business segment also contributed to the
earnings growth, whereas in the North America business segment earnings
remained at the good level achieved in the strong third quarter of the
previous year. The Group's earnings before interests and taxes (EBIT) were
EUR 67 million (EUR 62 million). Foreign currency translation impact on the
Group's earnings was EUR -1 million (EUR 3 million).

EBIT by business segment--------------------------------------------------------------------------
| EUR million Q3 2016 Q3 2015 Change Of Group in |
| |
| Q3 2016 |
| Foodservice Europe-Asia-Oceania 18.3 13.8 33% 27% |
| North America 24.5 25.0 -2% 35% |
| Flexible Packaging 18.2 15.7 16% 26% |
| Molded Fiber 8.3 7.9 5% 12% |
| Other activities -2.4 0.0 |
| Group 66.9 62.4 7% |
--------------------------------------------------------------------------
Net financial expenses decreased to EUR 7 million (EUR 10 million). Tax
expense increased to EUR 12 million (EUR 8 million).

Profit for the quarter was EUR 48 million (EUR 44 million). Earnings per share
(EPS) were EUR 0.46 (EUR 0.43).

Financial review Q1-Q3 2016The Group's comparable net sales growth was 4% during the reporting period.
Growth was strong in the Foodservice Europe-Asia-Oceania and Molded Fiber
business segments throughout the period, whereas it was more uneven between
quarters in the North America and Flexible Packaging business segments.
Comparable growth in emerging markets was 8%. Growth was strongest in Eastern
Europe and South Asia. Net sales grew moderately in China. The Group's net
sales grew to EUR 2,134 million (EUR 2,036 million). Foreign currency
translation impact on the Group's net sales was EUR -49 million (EUR 160
million) compared to 2015 exchange rates. The majority of the negative
currency impact came from the weakening of the pound sterling and certain
emerging market currencies versus euro.

Net sales by business segment--------------------------------------------------------------------------------
| EUR million Q1-Q3 2016 Q1-Q3 2015 Change Of Group in |
| |
| Q1-Q3 2016 |
| Foodservice Europe-Asia-Oceania 548.0 498.8 10% 25% |
| North America 745.3 703.5 6% 35% |
| Flexible Packaging 654.7 654.4 0% 31% |
| Molded Fiber 198.8 193.8 3% 9% |
| Elimination of internal sales -13.3 -14.6 |
| Group 2,133.5 ...

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