Value creation

Last updated: May 27, 2020

As a publicly listed company, Huhtamaki is committed to earning profit for its shareholders. Huhtamaki has several financial long-term ambitions. The most important of these are our growth ambition of 5+% comparable growth and our profitability ambition of 10+% Adjusted EBIT margin. In addition, our ambition is to have Net debt/Adjusted EBITDA of 2–3 and pay 40–50% of our profit as dividend to our shareholders.

Huhtamaki’s economic responsibility in 2019

In 2019, the economic value generated by the Group was EUR 1,209 million (EUR 1,062 million) of which EUR 861 million (EUR 788 million) was distributed to stakeholders and EUR 348 million (EUR 274 million) retained in the Group for operational development and further growth. The Group achieved 6% organic and 2% acquisitive growth. Adjusted EBIT margin, excluding items affecting comparability (IAC) of EUR -7.6 million, was 8.6%. Dividends paid to shareholders correspond to a 50% payout ratio (of 2018 profit)

Huhtamaki as a tax payer

Huhtamaki is committed to paying all taxes and complying with other related obligations according to local laws and regulations. Moreover, the Huhtamaki values, the requirements of our Code of Conduct and the Code of Conduct for Huhtamaki Suppliers transcend national boundaries and complement the framework for our business operations. Huhtamaki’s Public Tax Strategy is available on our website.

One of our operating principles is to ensure the predictability and optimization of taxation. In addition to ensuring that taxes are paid correctly in all locations, we also seek to ensure that we do not pay excess taxes and that we capitalize on tax deductions enabled by local tax regulations. The Group’s tax expenses in 2019 increased to EUR 58 million (EUR 37 million) and paid taxes amounted to EUR 39 million (EUR 38 million). The corresponding tax rate was 23% (19%).

In intercompany business transactions, we comply with the OECD guidelines on transfer pricing. Intersegment net sales were EUR 20 million (EUR 16 million), less than 1% of the Group’s net sales. Our business decisions are made keeping our strategy, financial ambitions and commercial environment in mind whilst at the same time aiming to serve our customers better. While taxation is one factor to be considered, it is not a dominant factor.

Direct economic value generated and distributed

MEUR 2019 2018
Customers Net sales 3,399 3,104
Suppliers Purchases* 2,190 2,042
Economic value generated* 1,209 1,062
Personnel Personnel expenses 686 637
Shareholders Dividends 88 83
Debt investors Net financial expenses* 29 31
Public sector Taxes* 58 37
Economic value distributed* 861 788
Economic value retainded in the Group* 348 274

*2018 figures restated due to adoptation of IFRS 16 Leases standard.

Business model