CEO's review

Half-yearly Report 2022

We continued delivering a strong performance in the second quarter of 2022, despite volatile market conditions. We faced strong headwinds created by supply chain constraints, challenges with raw material availability and geopolitical turmoil.

Net sales increased by 31% in the second quarter. In comparable terms, growth reached 17%, driven by pricing actions. In most markets, demand developed favorably and has returned to pre-pandemic levels, however with some exceptions, particularly in China. Tensions on raw material availability limited our capacity to further grow volumes according to the demand, most notably in North America. We continued to mitigate the significant inflation which impacted all our major input costs, including raw materials, freight costs, energy and labor. We protected our profitability through operational efficiency improvements and pricing actions, with the adjusted EBIT increasing by 29%. Cash flow remained impacted by increased working capital and capital expenditure.

We continued our organic investment into sustainable product innovation and business expansion. For example, we announced the expansion of our molded fiber product manufacturing unit in Hammond, Indiana, US. This investment in fiber technology supports market demand for more sustainable solutions in North America, such as egg cartons and
cup carriers. The planned USD 100 million investment will start ramping up towards the end of 2023.

To secure our long-term financing, we launched a sustainability-linked EUR 500 million bond. It also underlines our commitment to embed sustainability in everything we do.

We initiated in April a divestiture process of our operations in Russia, for which the process is ongoing. We maintain our operations during this transitional period, to meet our contractual and regulatory obligations and to safeguard our employees and customers.

We are pleased by our strong and consistent performance during the first half of the year. Our ability to handle adverse and volatile conditions emphasizes the agility of our team, the efficiency of our global footprint and the resilience of our diverse portfolio. While uncertainty remains high in the global economy, we continue to execute on our long-term growth strategy.

Charles Héaulmé
President and CEO

July 2022

Results 2021 add_circle_outline

The year 2021 was marked by a challenging business environment. This was linked to the continued COVID-19 pandemic, with appearance of new variants, and the significant disruption of the value chain. Throughout 2021 we continued to focus on the health, safety and wellbeing of our employees and to ensure business continuity under these exceptional circumstances.

During the year, we saw a gradual improvement in consumption, as vaccination deployment sped up and restrictions were eased across most geographies. This was visible in our foodservice packaging business globally, particularly in Europe and US. Solid growth continued in categories which were supported by in-home consumption, such as flexible packaging and retail tableware. The pandemic-driven supply chain disruptions throughout the year led to scarcity, particularly in raw materials, that resulted in an extraordinary inflation in input costs, and started to impact our operations. Freight, energy and labor inflation also increased significantly in the second half of 2021.

We delivered a solid performance in the face of this challenging operational environment. This reflects the resilience of our diversified portfolio and the ability of our company to manage adverse conditions. Huhtamaki delivered a solid fourth quarter in sales and profitability, with comparable net sales growth of 12%. For the full year 2021, our net sales amounted to EUR 3.6 billion with comparable net sales growth of 7%. In 2021, our profitability was constantly challenged by extraordinary input cost levels, however our adjusted EBIT improved 4%, reflecting our operational performance and ability to manage the impact of inflation. Negative cashflow was mainly impacted by increased working capital following market recovery and inflationary impact in raw materials as well as higher cash taxes.

Our long-term focus is on creating value by delivering growth, improving competitiveness, developing talent, embedding sustainability in everything we do and digitalizing our core operations. In 2021, we continued to implement these strategic priorities, making very good progress. Huhtamaki’s climate targets were approved and validated by the globally recognized Science Based Targets initiative (SBTi). We also received recognition of our commitment to our ESG agenda by improved ratings in three key ESG Ratings: EcoVadis, CDP and S&P Global Corporate Sustainability Assessment (part of DJSI). In 2021 we also saw the launch of several of our new transformative sustainable packaging solutions. We recently launched Push Tab® paper, an industry-first sustainable renewable paper-based blister solution for the global healthcare industry. We also announced the next generation of tube laminates for use in both the cosmetics and food sectors in partnership with LyondellBasell, Plastuni Lisses and Groupe Rocher. Earlier in the year, we launched our award-winning Future Smart fiber lids, replacing plastic lids. These new fiber lids made of renewable material are recyclable and compostable.

In line with these successful innovations in sustainable solutions, we increased our investments for deployment and capacity expansion, enabling profitable growth in technologies where Huhtamaki has developed a competitive advantage. We also announced investments in a new state-of-the-art foodservice manufacturing unit in Malaysia and in a new fiber packaging manufacturing site in South Africa.

In September, we completed the acquisition of Elif, a major supplier of sustainable flexible packaging for global FMCG brand owners, operating out of Turkey and Egypt. The acquisition of Elif expands our technology capabilities and product range. It also strengthens our position as a leading flexible packaging company in emerging markets. In addition, during the year we acquired Hihio-Art Packaging, a leading manufacturer of paper bags, wrapping paper and folding carton packaging in China.

In 2021, Huhtamaki made demonstrable progress on its strategic priorities. This was only possible because of our high-performing teams, whom we thank for the continued dedication, entrepreneurship and focus on delivery. We are also thankful for the support and recognition our customers, suppliers and other stakeholders have shown us throughout the year.


Charles Héaulmé, President and CEO

Thomas Geust, Interim Deputy CEO

February 2022

Interim Report Q3 2021 add_circle_outline

Huhtamaki delivered a solid third quarter in the face of a challenging environment, demonstrating the resilience of our diversified product portfolio. Demand for our products improved during the quarter, supported by the continued recovery of on-the-go consumption. We continued to focus on mitigating the inflationary environment, managing the availability of raw materials and addressing the continued impact of COVID-19.

During the third quarter of 2021, our net sales increased by 6% with a comparable sales growth of 4%. All our business segments contributed to our solid growth, particularly visible in emerging markets. At the Group level, comparable net sales growth from the beginning of the year was 6% compared to the previous year, with a double-digit growth in Foodservice Europe-Asia-Oceania with Q3 segment sales returning to pre-pandemic levels. While the adjusted EBIT margin in the third quarter decreased driven by input costs, the year-to-date margin was 9.1%, reflecting our operational performance and ability to manage inflation impact.

We have continued to execute on our strategic priorities, and I am pleased to see how we are making progress on our sustainability, innovation and competitiveness initiatives. During the quarter Huhtamaki’s climate targets were approved and validated by the globally recognized Science Based Targets initiative (SBTi). In July we launched Push Tab® paper, an industry-first sustainable renewable paper-based blister solution for the global healthcare industry. We also launched next generation tube laminates with renewable content for use in cosmetics and food sectors.

During the third quarter we completed the acquisition of Elif, a major supplier of sustainable flexible packaging to global FMCG brand owners, operating out of Turkey and Egypt. The acquisition of Elif expands our technology capabilities and product range. It also strengthens our position as a leading flexible packaging company in emerging markets. Together with all our employees, I warmly welcome our new Elif colleagues to the Huhtamaki family.

Charles Héaulmé

President and CEO

October 2021

Half-yearly Report 2021 add_circle_outline

“We are pleased to deliver further net sales growth, beyond pre-COVID pandemic levels, and improved profitability while continuing to face a very challenging cost environment. Overall demand has supported growth. The global progress of vaccinations and removal of social mobility restrictions has benefited food on-the-go which has continued to gradually recover. However, the global food packaging market remains volatile with significant challenges in many countries still heavily impacted by the pandemic. This volatility is also evident in the supply chain with significant inflation in the prices of raw materials, especially polymers and recycled fiber.

Altogether our second quarter results were strong although with mixed performance across the different regions and businesses. Net sales increased 10%, amounting to EUR 877 million, reflecting the improved demand for foodservice packaging. Comparable net sales growth was 14%. This strong growth should be contextualized versus a depressed comparable period in 2020. Net sales for the first half of 2021 increased 2%, and 6% in comparable terms. The adjusted EBIT margin improved 0.3 p.p. to 9.1% in the second quarter and reached 9.3% in the first half of 2021. This was supported by a continued focus on operational efficiency and pricing actions to mitigate input cost inflation.

Huhtamaki’s robust performance supports investments for long-term sustainable growth. We continue to leverage our strong balance sheet to execute on our growth strategy. In May, we announced an investment in a new fiber packaging factory in South Africa. Our most recent acquisition, the asset purchase of the Chinese Jiangsu Hihio-Art Packaging, was completed in June. These strategic initiatives, together with investments announced in new manufacturing facilities in both Malaysia and Russia, strengthen our global manufacturing footprint and provide us with great opportunities to better serve both existing and new customers. We have also recently launched new products which further help plastic substitution in targeted markets. Our sustained innovation, our continued focus on operational efficiencies, with the support of our resilient business model, strong balance sheet and skilled employee base give me confidence that we face a bright perspective in terms of sustainable profitable growth.”

Charles Héaulmé
President and CEO

July 2021

Interim Report Q1 2021 add_circle_outline

The COVID-19 pandemic continued to affect the global food packaging market and the uncertainty around the pandemic remains visible in most markets. Huhtamaki’s business has remained resilient with solid demand for food on-the-shelf products, however food on-to-go has continued to be burdened by restrictions and lockdowns. The ongoing vaccination roll-out and easing of some of the restrictions has led to visible improvement.

In this context, the first quarter of 2021 was satisfactory for Huhtamaki. Despite the uncertainty in the global economy, demand for foodservice, though still below normal, has continued to gradually recover. Our net sales amounted to EUR 802 million for the quarter, with comparable net sales growth flat versus last year. The adjusted EBIT margin increased by 0.9 p.p. to 9.6% in the first quarter, particularly driven by favorable sales mix and continued focus on operational efficiency. Movement in currencies had a negative impact on net sales during the quarter. Our balance sheet position remained strong supporting our growth strategy.

We remain focused on the execution of our 2030 Strategy. Throughout the crisis Huhtamaki has been preparing for the new post-pandemic normal, including the implementation of actions to improve our competitiveness as well as investments for expansion and innovation in sustainable products and solutions. We recently launched our award-winning Future Smart fiber lids, replacing plastic lids. These new fiber lids made of renewable material are recyclable and compostable. We are also accelerating our focus on digitalization as an enabler and connector of our strategic priorities. Digitalization will create value in our internal operations and external value chain – including driving the necessary efficiency in circularity systems.

Charles Héaulmé

President and CEO

April 2021