Slides
Page 1
Stable performance in a volatile environment Interim Report Q1 2025 Ralf K. Wunderlich President and CEO Thomas Geust CFO
Page 2
Q1 2025 Stable performance in a volatile environment 2 April 24, 2025 Q1 2025 • Market trends - Uncertainty increased again during Q1 • Financial performance stable and at the previous year’s level • Program to improve efficiency proceeding well; total savings EUR 87m and costs EUR 25m by the end of Q1 • We have taken actions in our three focus areas
Page 3
Overall, the situation is evolving and it’s early to draw conclusions. We are well positioned to manage the situation • Our business is mostly local for local, neutral direct impact expected • Actively monitoring and adapting according to the development in the market, and working closely with our customers and suppliers Closely managing the tariff situation 3 April 24, 2025 Q1 2025
Page 4
Our 2030 Profitable Growth Strategy 4 April 24, 2025 Q1 2025 Develop blueloop sustainable innovation in partnership with our customers Scale up profitable core businesses Operational excellence With a focus on: • Organic growth • Inorganic growth • Reduced capex, still above depreciation • Investments to best-yielding projects • Split of Fiber Foodservice EAO • Procurement organization • Plans to empower business segments Profitable growth supported by all levers1 Disciplined capital allocation2 Accountabilityand speed of execution3
Page 5
32 Actions taken in our focus areas 5 April 24, 2025 Q1 2025 Profitable growth supported by all levers Disciplined capital allocation Accountabilityand speed of execution Organic growth • Focused approach to enable our customers to grow • Build customer relationships • Accountability to segments, focused investments to support growth Inorganic growth through bolt-on’s: • Accelerate financially sound projects • In segments with strong team • Products and technologies we know well • Management teams that fit our culture • Clear synergy opportunities Capex moderated but still above depreciation allowing for growth Investments to best-yielding projects • Supporting profitable growth • Improved internal prioritization of projects • Capex: • Roughly equal levels of maintenance, efficiency and growth • Small share to other, such as safety and regulatory requirements (“license to operate”) Empower segments with clear accountability to drive speed of execution • Improved accountability to drive growth • Functions aligned towards segments • Group functions act as center of expertise: govern, coordinate and support value creation Planned actions: • Split of Fiber Foodservice E-A-O • Procurement organization • Empowering business segments • Sustainability and communications • Strategy and Business Development • Human Resources • Local IT support 1
Page 6
Acquisition of Zellwin Farms 6 Attractive transaction supporting Huhtamaki’s strategy and growth ambitions • Privately-owned manufacturer of molded fiber egg flats and cartons • One factory in Florida, US • EV USD 18 million • Net sales (2024) USD ~20 million • Value and margin accretive transaction from year 1 • Provides the North America segment with increased capacity in a growing market April 24, 2025 Q1 2025
Page 7
Business performance 7 April 24, 2025 Q1 2025 01
Page 8
MEUR Q1 25 Q1 24 Change Net sales 1,001.6 1,003.9 0 % Adjusted EBIT1 98.5 98.8 0 % Margin 9.8% 9.8% Adjusted EPS, EUR2 0.59 0.55 7 % Capital expenditure 30.1 36.6 -18 % 8 April 24, 2025 Q1 2025 • Net sales at the previous year’s level: • Comparable growth: -2% • Support from changes in currencies: 1% • Adj. EBIT and margin at the previous year’s level • Adj. EPS increased, supported by lower financing costs Adj. EPS increased despite flat adj. EBIT 1) Excluding IAC of EUR -4.7 million in Q1 2025 (EUR -21.2 million). 2) Excluding IAC of EUR -4.6 million in Q1 2025 (EUR -20.9 million).
Page 9
1) Excluding IAC of EUR -0.4 million in Q1 2025 (EUR -16.3 million). Net sales (EUR million) 241 252 247 249234 Q1 Q2 Q3 Q4 2024 2025 9 April 24, 2025 Q1 2025 • Demand softened during the quarter • Net sales decreased due to lower sales volumes and pricing. Net sales decreased in most markets, particularly in the Middle-East and Africa • Raw material input cost remained close to previous year’s levels • Adjusted EBIT decreased due to lower sales volumes and pricing. At the same time, actions to improve profitability and lower input costs had a positive impact Foodservice Packaging: Soft demand weighed on performance Key figures, MEUR Q1 25 Q1 24 Change Net sales 234.2 241.1 -3% Comparable growth -4% -5% Adjusted EBIT1 19.8 22.0 -10% Margin 8.5% 9.1% Adjusted RONA 9.9% 10.8% Capital expenditure 4.7 5.4 -13% Operating cash flow 1 7.8 29.5 -74%
Page 10
1) Excluding IAC of EUR -1.9 million in Q1 2025 (EUR -1.0 million). Net sales (EUR million) 10 April 24, 2025 Q1 2025 • Demand softened but with differences between categories • Net sales flat, comparable net sales -3%. Both sales volumes and sales prices decreased. Sales decreased in retail tableware, impacted by timing as sales was partially pulled from January to December, and a seasonally late Easter. Net sales remained at previous years’ level in foodservice and consumer goods • Raw material input cost remained at previous year’s level • Adjusted EBIT decreased due to lower sales volumes and prices, as well as higher labor and transportation costs. Additionally, there was a negative mix impact due to the decrease in sales of retail tableware North America: Timing of sales impacted performance 344 370 359 386346 Q1 Q2 Q3 Q4 2024 2025 Key figures, MEUR Q1 25 Q1 24 Change Net sales 345.6 344.1 0% Comparable growth -3% -3% Adjusted EBIT1 40.5 47.9 -15% Margin 11.7% 13.9% Adjusted RONA 18.5% 19.6% Capital expenditure 12.3 14.6 -16% Operating cash flow 1 -7.7 73.0 <-100%
Page 11
1) Excluding IAC of EUR -2.8 million in Q1 2025 (EUR -2.4 million). Net sales (EUR million) 335 326 334 327329 Q1 Q2 Q3 Q4 2024 2025 • Overall demand for flexible packaging weakened, but with significant variations by market • Net sales decreased due to lower sales volumes, while better mix had a positive impact. Net sales increased in Western Europe, but decreased in most other markets • Raw material input cost remained at previous year’s level, however with an increasein aluminum foil • Adjusted EBIT increased, supported by product mix and actions to improve profitability 11 April 24, 2025 Q1 2025 Flexible Packaging: Focus on margin improvement yielded results Key figures, MEUR Q1 25 Q1 24 Change Net sales 328.7 335.2 -2% Comparable growth -2% -1% Adjusted EBIT1 26.6 21.6 23% Margin 8.1% 6.4% Adjusted RONA 7.5% 6.6% Capital expenditure 5.7 12.6 -55% Operating cash flow 1 5.7 -0.1 >100 %
Page 12
1) Excluding IAC of EUR 0.5 million in Q1 2025 (EUR -1.2 million). Net sales (EUR million) 85 92 88 9996 Q1 Q2 Q3 Q4 2024 2025 12 April 24, 2025 Q1 2025 • Overall demand for fiber-based egg and fruit packaging improved, but softened for food-on-the-go products • Net sales driven by increased sales volumes and price pass-through. Net sales increased in most markets • Prices of recycled fiber increased • Adjusted EBIT increased, driven by higher net sales. The impact on profitability from increased costs for raw materials and distribution was offset by pricing actions Fiber Packaging: Strong performance continued Key figures, MEUR Q1 25 Q1 24 Change Net sales 95.8 85.0 13% Comparable growth 10% 1% Adjusted EBIT1 12.3 8.6 43% Margin 12.8% 10.1% Adjusted RONA 15.9% 14.6% Capital expenditure 7.4 3.5 >100% Operating cash flow 1 0.9 -5.3 >100 %
Page 13
Financial review 13 April 24, 2025 Q1 2025 02
Page 14
4) Excluding IAC of EUR -0.1 million in Q1 2025 (EUR 0.8 million). 5) Excluding IAC of EUR -4.6 million in Q1 2025 (EUR -21.0 million). 6) Excluding IAC of EUR -4.6 million in Q1 2025 (EUR -20.9 million). 1) Excluding IAC of EUR -2.1 million in Q1 2025 (EUR -11.3 million). 2) Excluding IAC of EUR -4.7 million in Q1 2025 (EUR -21.2 million). 3) Excluding IAC of EUR 0.2 million in Q1 2025 (EUR -0.5 million). EPS driven by lower financing costs 14 April 24, 2025 Q1 2025 Q1 commentary: • Net sales and adj. EBIT at the previous year’s level • Financing costs decreased • High level in comparison period, partly due to FX • Lower average rate on debt • Adj. EPS increased, supported by lower financing costs MEUR Q1 25 Q1 24 Change Net sales 1,001.6 1,003.9 0 % Adjusted EBITDA1 152.0 149.0 2 % Margin 1 15.2% 14.8% Adjusted EBIT2 98.5 98.8 0 % Margin 2 9.8% 9.8% EBIT 93.7 77.6 21 % Adjusted Net financial items3 -14.4 -20.8 31 % Adjusted profit before taxes 84.1 78.0 8 % Adjusted income tax expense4 -20.5 -18.5 -11 % Adjusted profit for the period5 63.6 59.5 7 % Adjusted EPS, EUR6 0.59 0.55 7 %
Page 15
Foreign currency translation impact Q1 2025 (EUR million) Net sales EBIT +11 +1 Currency impact turned positive 15 April 24, 2025 Q1 2025 Please note: Income statement is valued on average rate, balance sheet on closing rate. Average rate Average rate Q1 24 Q1 25 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 USD 1.09 1.05 3 % 1.08 1.07 1.12 1.04 1.08 0% INR 90.18 91.12 -1 % 90.13 89.24 93.38 89.27 92.35 -2% GBP 0.86 0.84 2 % 0.86 0.85 0.83 0.83 0.83 3% CNY 7.81 7.65 2 % 7.82 7.77 7.82 7.62 7.84 -0% AUD 1.65 1.68 -2 % 1.66 1.61 1.62 1.68 1.71 -3% THB 38.71 35.70 8 % 39.38 39.39 36.14 35.64 36.66 7% BRL 5.38 6.16 -15 % 5.40 5.89 6.07 6.48 6.23 -15% NZD 1.77 1.85 -5 % 1.80 1.75 1.76 1.85 1.88 -4% ZAR 20.50 19.45 5 % 20.47 19.66 19.11 19.57 19.61 4% TRY 33.60 38.16 -14 % 34.90 35.17 38.13 36.89 41.04 -18% EGP 38.50 53.15 -38 % 51.13 51.41 53.99 52.91 54.75 -7% Change in average rate Closing rates Change in closing rate (YoY) (YoY)
Page 16
Net debt to adjusted EBITDA stable at 2.0 16 April 24, 2025 Q1 2025 Net debt, net debt/adj. EBITDA and gearing • Net debt/Adj. EBITDA at 2.0 • At the end of Q1 2025: • Cash and cash equivalents EUR 277 million • Unused committed credit facilities available EUR 404 million • Net debt EUR 1,252 million Ambition 2–3 Covenant level 3.75 1,249 1,255 1,220 1,216 1,252 2.1 2.0 2.0 2.0 2.0 0.62 0.64 0.62 0.57 0.59 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Net debt, M€ Gearing Net debt/Adj. EBITDA
Page 17
0 100 200 300 400 500 600 2025 2026 2027 2028 2029 Later Lease liabilities Available unused committed facilities Drawn committed credit facilities Commercial paper program Other loans from financial institutions Bonds Loan maturities 17 April 24, 2025 Q1 2025 Debt maturity structure March 31, 2025 (EUR million) • Average maturity 2.9 years at the end of Q1 2025 (2.6 at the end of Q1 2024)
Page 18
150 -138 -4 -2 -30 0 2 -22 138 -55 -8 -11 -37 10 0 38 Reported EBITDA Change in working capital Net financial items Taxes Capital expenditure Proceeds from selling assets Other cash flow adjustments Free cash flow Q1 2025 Q1 2024 Cash flow decreased due to an increase in working capital 18 April 24, 2025 Q1 2025 Free cash flow bridge (EUR million) Change in working capital the main negative factor, due to: • Increase in inventory • Decrease in payables Support from: • Higher reported EBITDA • Lower capex
Page 19
Financial position continued to improve 19 April 24, 2025 Q1 2025 1) Excluding IAC. • Working capital increased • Net debt flat, gearing decreased somewhat • Adjusted ROI improved MEUR Mar 2025 Mar 2024 Total assets 4,838 4,768 Working capital 669 608 Net debt 1,252 1,249 Equity & non-controlling interest 2,110 2,000 Gearing 0.59 0.62 Adjusted ROI1 12.0% 11.5% Adjusted ROE1 13.3% 13.3%
Page 20
2018 2019 2020 2021 2022 2023 2024 Q1 25 Long-term ambition Comparable net sales growth 5% 6% -2% 7% 15% -2% 0% -2% 5-6% Adjusted EBIT margin 8.1% 8.6% 9.1% 8.8% 8.8% 9.4% 10.1% 9.8% 10-12% Adj. ROI 11.6% 12.3% 11.7% 11.3% 11.0% 11.2% 12.1% 12.0% 13-15% Net debt/Adj. EBITDA 2.3 2.0 1.8 3.1 2.5 2.2 2.0 2.0 2-3 Dividend payout ratio 50% 47% 47% 45% 40% 45% 44%* 40-50% 20 April 24, 2025 Q1 2025 FY 2018 figures restated for IFRS 16 impact *BoD proposal Progress towards long-term financial ambitions
Page 21
Looking forward 21 April 24, 2025 Q1 2025 03
Page 22
Outlook for 2025 and short-term risks and uncertainties 22 April 24, 2025 Q1 2025 The Group’s trading conditions are expected to remain relatively stable during 2025. The good financial position will enable the Group to address profitable growth opportunities. Decline in consumer demand, inflation in key cost items (including raw materials, labor, distribution and energy), availability of raw materials, movements in currency rates and trade tariffs are considered to be relevant short-term business risks and uncertainties in the Group's operations. Economic and financial market conditions, as well as a potential geopolitical escalation and natural disasters can also have an adverse effect on the implementation of the Group's strategy and on its business performance and earnings. Outlook for 2025 Short-term risks and uncertainties
Page 23
July 24, 2025 Half-yearly Report October 23, 2025 Q3 Interim Report Upcoming events 23 April 24, 2025 Q1 2025
Page 24
Disclaimer 24 April 24, 2025 Q1 2025 Information presented herein contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or Huhtamäki Oyj’s or its affiliates’ (“Huhtamaki”) future financial performance, including, but not limited to, strategic plans, potential growth, expected capital expenditure, ability to generate cash flows, liquidity and cost savings that involve known and unknown risks, uncertainties and other factors that may cause Huhtamaki’s actual results, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such risks and uncertainties include, but are not limited to: (1) general economic conditions such as movements in currency rates, volatile raw material and energy prices and political uncertainties; (2) industry conditions such as demand for Huhtamaki’s products, pricing pressures and competitive situation; and (3) Huhtamaki’s own operating and other conditions such as the success of manufacturing activities and the achievement of efficiencies therein as well as the success of pending and future acquisitions and restructurings and product innovations. Future results may vary from the results expressed in, or implied by, forward-looking statements, possibly to a material degree. All forward-looking statements made in this presentation are based on information currently available to the management and Huhtamaki assumes no obligation to update or revise any forward-looking statements. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in any investment activity.
Page 25
Thank you. Contact us at ir@huhtamaki.com