• Stock exchange release

Interim Report January 1-September 30, 2010: Continued earnings per share growth

STOCK EXCHANGE RELEASE HUHTAMÄKI OYJ 21.10.2010 AT 8:30

 

- Improved net sales due to favorable currency effect and volume growth
- Continued earnings per share (EPS) growth
- Solid cash flow and declining net debt
- Agreement to sell the majority of European Rigid Consumer Goods Plastics operations
- Full year 2010 EPS expected to be higher than in 2009 before non-recurring charges (EUR 0.74)

 

Key figures

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Continuing operations
Net sales	1,470.0	1,399.2	499.8	459.9
EBIT*	106.6	98.5	33.4	34.4
EBIT margin %	7.3	7.0	6.7	7.5
EPS	0.70	0.52	0.23	0.19
Including discontinued operations
EPS	0.77	0.65	0.26	0.23
ROI % (12m roll.)	10.1	-2.5	-	-

*Q1-Q3 2009 EBIT includes EUR 3.8 million non-recurring charges

 

Overview
Group net sales increased compared to the corresponding period in 2009 as a result of a favorable currency translation effect and improved volumes. Volume development was positive especially in the Flexible Packaging and Films segments. In the reporting period all business segments were affected by increasing raw material prices.

 

Operating earnings improved in the reporting period compared to corresponding period in 2009. Third quarter operating earnings were slightly lower compared to the corresponding period in 2009, mainly due to continued softness in North American markets. Earnings per share (EPS) improved to EUR 0.77 (EUR 0.65), already exceeding the full year 2009 level. EPS from continuing operations was EUR 0.70 (EUR 0.52).

 

Cash flow generation strengthened further in the third quarter and Group free cash flow in the reporting period was EUR 76 million (EUR 167 million). Gearing reduced to 0.43 (0.58).

 

The ongoing strategic review of the Rigid Consumer Goods Plastics operations progressed during the third quarter as the majority of the European Rigid Consumer Goods Plastics operations was agreed to be sold.  The operations to be sold include manufacturing units in Finland, France, Poland and Turkey, as well as sales units in Germany and Lithuania. The strategic review of the rigid plastics business in Italy, currently reported under other activities, will continue.

 

 

Business review by segment, continuing operations
The sales distribution by segment was following: Flexible Packaging 26% (25%), Films 8% (8%), North America 28% (29%), Molded Fiber 12% (12%), Foodservice Europe-Asia-Oceania 23% (23%) and Other activities 3% (3%).

 

Flexible Packaging
Flexibles are used for consumer packaging of a wide range including food, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Asia, Oceania and South America.

 

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Net sales	390.5	354.1	133.3	114.8
EBIT	24.7	21.2	7.7	7.6
EBIT margin %	6.3	6.0	5.8	6.6
RONA % (12m roll.)	10.0	1.4	-	-

 

The segment's net sales and volumes continued to develop positively during the reporting period compared to the corresponding period in 2009. Sales growth accelerated during the third quarter as the business in Asia continued its strong performance and the European business returned to solid growth path.

 

Despite increasing raw material costs during the third quarter, especially in Asia, the segment's earnings grew in the reporting period.

 

Films
Films are mainly used for technical applications in the label, adhesive tape, hygiene and health care industries, as well as building and construction, automotive, packaging and graphic arts industries. The segment serves global markets from production units in Europe and North America.

 

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Net sales	127.3	121.6	44.0	41.3
EBIT*	9.3	-1.4	3.0	1.5
EBIT margin %	7.3	-1.2	6.8	3.6
RONA % (12m roll.)	6.7	-1.0	-	-

*Q1-Q3 2009 EBIT includes EUR 3.8 million non-recurring charges

 

Good momentum continued in the segment and sales increased during the reporting period compared to the corresponding period in 2009.

 

Due to volume growth and lower cost base resulting from 2009 restructuring activities, earnings continued to develop positively confirming return to healthy margins.

 

North America
The North America segment serves local markets with Chinet® disposable tableware products, ice-cream containers as well as other consumer goods and foodservice products. The segment has production in North America and Mexico.

 

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Net sales	407.8	411.5	136.4	129.3
EBIT	37.4	52.6	10.1	14.5
EBIT margin %	9.2	12.8	7.4	11.2
RONA % (12m roll.)	10.6	14.3	-	-

 

Continued soft market conditions lowered sales and earnings during the reporting period compared to the corresponding period in 2009. Sales continued to develop positively within the Foodservice division, but were weak in the Retail and Consumer Goods divisions.

 

Earnings comparisons to prior year continued to be negatively affected by high raw material costs. Raw material costs were unusually low in 2009. Third quarter earnings were further affected by lower volumes and increased discounting within the Retail division.

 

Molded Fiber
Recycled molded fiber is used to make fresh product packaging, such as egg and fruit packaging. The segment has production in Europe, Oceania, Africa and South America.

 

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Net sales	171.9	151.6	57.2	52.0
EBIT	15.7	12.8	5.4	4.7
EBIT margin %	9.1	8.4	9.4	9.0
RONA % (12m roll.)	12.0	6.8	-	-

 

Steady development continued in the segment and net sales increased during the reporting period compared to the corresponding period in 2009.

 

Growth in earnings was mainly based on good price and product mix management.

 

Foodservice Europe-Asia-Oceania
Foodservice paper and plastic disposable tableware, such as cups, is supplied to foodservice operators and fast food restaurants. The segment has production in Europe, Middle-East, Asia and Oceania.

 

EUR million	Q1-Q3 2010	Q1-Q3 2009	Q3 2010	Q3 2009
Net sales	352.6	341.5	121.5	116.2
EBIT	20.4	15.6	8.7	6.8
EBIT margin %	5.8	4.6	7.2	5.9
RONA % (12m roll.)	9.1	0.2	-	-

 

Soft market conditions continued and volume development remained negative during the reporting period compared to the corresponding period in 2009.

 

Earnings continued at an improving trend, driven by good cost containment in operations.

 

Relocation of the foodservice manufacturing unit in Poland was completed during the third quarter. The new state-of-the-art unit is located in Czeladz, south of Poland.

 

 

Discontinued operations
Rigid Consumer Goods Plastics operations have been under strategic review since autumn 2008.

 

During the third quarter the majority of the European Rigid Consumer Goods Plastics operations were agreed to be sold to Island Lux S.à r.l. & Partners S.C.A., an affiliate of Sun European Partners, LLP, part of Sun Capital Partners, Inc., a U.S. based private investment firm. The operations to be sold include rigid consumer goods packaging manufacturing in Hämeenlinna, Finland; Auneau, France; Siemianowice, Poland; and Istanbul, Turkey, as well as sales units in Germany and Lithuania. The units to be sold serve multinational and local customers with primarily dairy, edible fats, ready meal and ice cream packaging.

 

The annual net sales of the operations to be sold are approximately EUR 160 million and it currently employs some 1,100 people. The agreed value for the transaction is EUR 52 million. Closing of the transaction is subject to approval by competition authorities.

 

Rigid Consumer Goods Plastics units in South America and Australia were sold in 2009. The strategic review of the rigid plastics business in Italy will continue.

 

The units agreed to be sold in the third quarter are classified as assets held for sale. The unit in Italy is reported under other activities. In this report the result for the assets held for sale is presented as a separate line item under "discontinued operations". Quarterly results for 2009 and 2010 have been restated accordingly. Results of units sold during 2009 are also included in the "discontinued operations" for respective quarters.

 

The result for the reporting period from discontinued operations was EUR 7 million (EUR 13 million) and in the third quarter EUR 4 million (EUR 4 million). Sales developed positively especially in the third quarter and cost control actions mitigated the impact of higher raw material costs. The 2010 figures for the reporting period include a non-recurring charge of EUR 2 million related to the strategic review of the discontinued operations.

 

Assets and liabilities under the assets held for sale are reported separately from continuing operations in the statement of financial position.

 

 

Financial review
The Group EBIT in the reporting period from continuing operations was EUR 107 million (EUR 99 million, including EUR 4 million non-recurring charges), corresponding to an EBIT margin of 7.3% (7.0%). In the third quarter, the Group EBIT from continuing operations was EUR 33 million (EUR 34 million), corresponding to an EBIT margin of 6.7% (7.5%).

 

The net financial items for the reporting period were EUR -12 million (EUR -21 million) and for the third quarter EUR -3 million (EUR -6 million). Tax expense for the reporting period was EUR 16 million (EUR 18 million) and for the third quarter EUR 5 million (EUR 7 million). Corresponding tax rate for the reporting period was 16% (20%).

 

The result for the reporting period from continuing operations was EUR 79 million (EUR 60 million) and EPS from continuing operations were EUR 0.70 (EUR 0.52). Correspondingly in the third quarter these were EUR 26 million (EUR 22 million) and EUR 0.23 (EUR 0.19). The average number of outstanding shares used in the EPS calculations was 101,167,399 (100,426,461) excluding 4,826,089 (5,061,089) of the Company's own shares.

 

The result for the reporting period including discontinued operations was EUR 87 million (EUR 74 million) and the EPS were EUR 0.77 (EUR 0.65). Correspondingly in the third quarter these were EUR 29 million (EUR 27 million) and EUR 0.26 (EUR 0.23). The 2010 figures for the reporting period include a non-recurring charge of EUR 2 million related to the strategic review of the discontinued operations.

 

 

Statement of financial position and cash flow
Free cash flow in the reporting period was EUR 76 million (EUR 167 million) and for the third quarter it was EUR 32 million (EUR 65 million). Capital expenditure was EUR 48 million (EUR 32 million), correspondingly in the third quarter it was EUR 23 million (EUR 14 million).

 

Net debt was EUR 345 million (EUR 424 million) at the end of September 2010. This corresponds to a gearing ratio of 0.43 (0.58).

 

Total assets on the balance sheet were EUR 1,850 million (EUR 1,837 million).

 

 

Personnel
The Group had 12,839 (13,346) employees at the end of September 2010.

 

 

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 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.

 

 

Outlook for 2010
General economic and market conditions for the rest of 2010 remain uncertain. However, based on the good result for the reporting period, it is expected that the full year 2010 EPS will be higher than in 2009 before non-recurring charges (EUR 0.74). The Group is in a good financial position to address growth opportunities in stronghold segments when they arise. Capital expenditure is expected to be higher than in 2009 but below EUR 100 million.

 

 

Financial reporting in 2011
The results 2010 will be published on February 11, 2011. Additionally, the following interim reports will be published during the course of the year: January 1 - March 31, 2011 on April 20, January 1 - June 30, 2011 on July 21 and January 1 - September 30, 2011 on October 20. Huhtamäki Oyj's Annual General Meeting is planned to be held on April 20, 2011.

 

 

Espoo, October 20, 2010
Huhtamäki Oyj
Board of Directors

 

 

For further information, please contact:
Mr. Jukka Moisio, CEO, tel. +358-10-686 7801
Mr. Timo Salonen, CFO, tel. +358-10-686 7880
Mrs. Kaisa Marttinen, Investor Relations Manager, tel. +358-10-686 7815
Mrs. Katariina Hietaranta, Head of Group Communications, tel. +358-10-686 7863

 

A news conference for analysts and media will be held at 11:00 Finnish time at the head office, address Keilaranta 10, Espoo, Finland. CEO Jukka Moisio and CFO Timo Salonen will present the results, after which a buffet lunch is served. A conference call for analysts and investors will start at 14:00 Finnish / 12:00 UK / 07:00 New York time with a management presentation, followed by a question and answer session. To participate, please dial one of the following numbers 5-10 minutes prior to the call start:
- Number for participants from Finland: 0800 112 363
- Number for participants outside of Finland: +44 (0) 1452 555 566
- Conference ID: 15646706

 

All results materials will be available at www.huhtamaki.com. The results presentation slides will be online approximately at 11:00 Finnish time. The conference call can be followed real-time from the website and a replay of the call in the form of an audio webcast will be available during the same evening.

 

Huhtamäki Oyj
January 1 - September 30, 2010

 

Group income statement (IFRS)
Unaudited

 

	Q1-Q3	Q1-Q3	Q3	Q3	Q1-Q4
EUR million	2010	2009	2010	2009	2009
Continuing operations
Net sales	1,470.0	1,399.2	499.8	459.9	1,831.8
Cost of goods sold	-1,226.7	-1,160.5	-421.6	-380.6	-1,530.0
Gross profit	243.3	238.7	78.2	79.3	301.8
Other operating income	16.0	11.3	5.6	4.2	15.0
Sales and marketing	-54.2	-53.0	-17.5	-17.0	-70.0
Research and development	-12.1	-10.5	-4.4	-3.9	-14.7
Administration costs	-80.2	-82.8	-26.6	-27.0	-111.3
Other operating expenses	-6.2	-5.2	-1.9	-1.2	-8.9
	-136.7	-140.2	-44.8	-44.9	-189.9
Earnings before interest and
taxes	106.6	98.5	33.4	34.4	111.9
Financial income	3.6	20.3	1.2	6.3	24.1
Financial expenses	-15.2	-41.5	-4.6	-12.0	-49.9
Income of associated companies	0.5	0.5	0.2	0.2	0.6
Result before taxes	95.5	77.8	30.2	28.9	86.7
Income taxes	-16.3	-17.5	-4.7	-6.6	-19.4
Result for the period from
continuing operations	79.2	60.3	25.5	22.3	67.3
Discontinued operations
Result from operations	9.3	13.3	3.8	4.2	6.2
Impairment loss recognised on
the remeasurement to fair value
less cost to sell	-2.0	-	-	-	-
Result for the period from
discontinued operations	7.3	13.3	3.8	4.2	6.2
Result for the period	86.5	73.6	29.3	26.5	73.5
Attributable to:
Equity holders of the parent
company
Result for the period from
continuing operations	76.7	58.3	24.7	21.7	64.9
Result for the period from
discontinued operations	7.3	13.3	3.8	4.2	6.2
Result for the period
attributable to owners of parent	84.0	71.6	28.5	25.9	71.1
Non-controlling interest
Result for the period from
continuing operations	2.5	2.0	0.8	0.6	2.4
Result for the period from
discontinued operations	-	-	-	-	-
Result for the period
attributable to non-controlling
interest	2.5	2.0	0.8	0.6	2.4
EUR
EPS result for the period from
continuing operations	0.76	0.58	0.25	0.21	0.65
EPS attributable to hybrid bond
investors	0.06	0.06	0.02	0.02	0.08
EPS continuing operations	0.70	0.52	0.23	0.19	0.57
EPS result for the period from
discontinued operations	0.07	0.13	0.03	0.04	0.06
EPS attributable to equity holders
of the parent company	0.77	0.65	0.26	0.23	0.63
EPS result for the period	0.83	0.71	0.28	0.25	0.71
Diluted:
EPS result for the period from
continuing operations	0.76	0.58	0.25	0.21	0.65
EPS attributable to hybrid bond
investors	0.06	0.06	0.02	0.02	0.08
EPS continuing operations	0.70	0.52	0.23	0.19	0.57
EPS result for the period from
discontinued operations	0.07	0.13	0.03	0.04	0.06
EPS attributable to equity holders
of the parent company	0.77	0.65	0.26	0.23	0.63
EPS result for the period	0.83	0.71	0.28	0.25	0.71

 

Group statement of comprehensive income (IFRS)

 

	Q1-Q3	Q1-Q3	Q3	Q3	Q1-Q4
EUR million	2010	2009	2010	2009	2009
Result for the period	86.5	73.6	29.3	26.5	73.5
Other comprehensive income:
Translation differences	26.4	-1.3	-33.0	-5.1	0.7
Fair value and other reserves	-0.7	-1.4	1.2	-0.1	1.2
Income tax related to components
of other comprehensive
income	0.1	0.3	-0.3	0.2	-0.5
Other comprehensive income,
net of tax	25.8	-2.4	-32.1	-5.0	1.4
Total comprehensive income	112.3	71.2	-2.8	21.5	74.9
Attributable to:
Equity holders of the parent
company	109.8	69.1	-3.6	20.9	72.3
Non-controlling interest	2.5	2.1	0.8	0.6	2.6

 

Group statement of financial position (IFRS)
Unaudited

 

	Sep 30	Dec 31	Sep 30
EUR million	2010	2009	2009
ASSETS
Non-current assets
Goodwill	399.0	394.8	393.6
Other intangible assets	28.6	32.7	31.4
Tangible assets	588.3	604.2	634.0
Investments in
associated companies	3.0	2.5	2.3
Available for sale investments	1.1	1.9	1.9
Interest bearing receivables	1.0	11.0	1.7
Deferred tax assets	13.1	16.5	15.2
Employee benefit assets	60.7	57.9	58.2
Other non-current assets	4.2	3.0	3.1
	1,099.0	1,124.5	1,141.4
Current assets
Inventory	250.8	236.1	257.9
Interest bearing receivables	33.3	19.4	18.2
Current tax assets	3.9	9.1	8.7
Trade and other
current receivables	326.6	305.5	337.5
Cash and cash equivalents	56.0	64.0	73.4
	670.6	634.1	695.7
Assets classified as held for sale	80.0	-	-
Total assets	1,849.6	1,758.6	1,837.1
EQUITY AND LIABILITIES
Share capital	360.6	360.6	358.7
Premium fund	106.8	106.8	104.7
Treasury shares	-44.4	-46.5	-46.5
Translation differencies	-106.9	-130.0	-131.9
Fair value and other reserves	-5.0	-4.3	-6.0
Retained earnings	393.5	354.8	359.8
Amounts recognized in other
comprehensive income and accumulated
in equity relating to non-current assets held
for sale	3.4	-	-
Total equity attributable to equity holders of
the parent company	708.0	641.4	638.8
Non-controlling interest	23.3	20.2	19.0
Hybrid bond	75.0	75.0	75.0
Total equity	806.3	736.6	732.8
Non-current liabilities
Interest bearing liabilities	244.0	294.3	384.0
Deferred tax liabilities	49.9	42.5	41.2
Employee benefit liabilities	101.6	102.8	100.8
Provisions	50.6	55.9	57.5
Other non-current liabilities	5.2	5.4	4.9
	451.3	500.9	588.4
Current liabilities
Interest bearing liabilities
- Current portion of long term loans	71.5	67.3	26.3
- Short term loans	120.0	101.1	107.0
Provisions	2.1	6.0	8.6
Current tax liabilities	9.8	10.9	6.8
Trade and other current liabilities	349.4	335.8	367.2
	552.8	521.1	515.9
Liabilities directly associated with assets classified as
held for sale	39.2	-	-
Total liabilities	1,043.3	1,022.0	1,104.3
Total equity and liabilities	1,849.6	1,758.6	1,837.1
	Sep 30	Dec 31	Sep 30
	2010	2009	2009
Net debt	345.2	368.3	424.0
Net debt to equity (gearing)	0.43	0.50	0.58

 

Statement of changes in equity
Unaudited

 

			Attributable						Non-	Hyb-	T
			to						cont-	rid	ot
			equity						rol-	bo-	al
			holders						ling	nd	eq
			of								ui
			the								ty
			parent
			company
	Sha-	Sha-	Trea-	Trans-	Fair	Re-	D	To-	in-
	re	re	su	la	val	tai	is	tal	te
	cap	issue	ry	tion	ue	ned	c		rest
	it	pre-	sha	diff.	and	ear	o
	al	mium	res		ot	nin	nt
					her	gs	inue
					re		d
					ser		ope
					ves		ra
							ti
EUR million							ons
Balance
at
Dec 31,
2008	358.7	104.7	-46.5	-130.5	-5.0	327.5	-	608.9	18.4	75.0	702.3
Di-
vi-
dend						-34.1		-34.1			-34.1
Sha-
re-
based
pay-
men-
ts						2.2		2.2			2.2
Stock
op-
tions
exer-
cised					0.1			0.1			0.1
Inter
rest
on
Hybrid
Bo-
nd						-6.7		-6.7			-6.7
Total
comp-
re-
hensive
income
for
the
ye-
ar				-1.4	-1.1	71.6		69.1	2.1		71.2
Other
chan-
ges						-0.7		-0.7	-1.5		-2.2
Balance
at
Sep 30,
2009	358.7	104.7	-46.5	-131.9	-6.0	359.8	-	638.8	19.0	75.0	732.8
Balance
at
Dec 31	360.6	106.8	-46.5	-130.0	-4.3	354.8	-	641.4	20.2	75.0	736.6
,2009
Di-
vi-						-38.5		-38.5			-38.5
dend
Share-
based
pay-
men-
ts			2.1			-0.6		1.5			1.5
Inte-
rest
on
Hybrid
Bo-
nd						-6.6		-6.6			-6.6
Total
compre
hensive
income for the
ye-
ar				26.4	-0.6	84.0		109.8	2.5		112.3
Dis
con
ti
nued
ope-
ra-
tions				-3.3	-0.1		3.4	-			-
Ot
her
chan
ges						0.4		0.4	0.6		1.0
Balance
at
Sep 30,
2010	360.6	106.8	-44.4	-106.9	-5.0	393.5	3.4	708.0	23.3	75.0	806.3

 

Group cash flow statement (IFRS)
Unaudited

 

	Q1-Q3	Q1-Q3	Q3	Q3	Q1-Q4
EUR million	2010	2009	2010	2009	2009
Result for the period*	86.5	73.6	29.3	26.5	73.5
Adjustments*	78.6	103.6	27.0	35.5	134.2
- Depreciation, amortization
and impairment*	60.6	65.7	20.0	16.8	88.6
- Gain on equity of
minorities*	-0.5	-0.5	-0.2	-0.2	-0.6
- Gain/loss from disposal of
assets*	-3.0	0.4	-0.3	-0.3	5.7
- Financial expense/-
income*	11.6	21.1	3.4	5.6	25.8
- Income tax expense*	16.5	18.4	4.8	6.6	20.4
- Other adjustments,
operational*	-6.6	-1.5	-0.7	7.0	-5.7
Change in inventory*	-21.2	36.6	2.9	4.2	58.3
Change in non-interest
bearing receivables*	-2.2	15.2	37.1	12.1	50.4
Change in non-interest
bearing payables*	-11.9	-6.0	-32.7	10.5	-28.3
Dividends received*	0.3	0.3	0.2	0.2	0.5
Interest received*	3.1	1.5	1.0	0.5	2.2
Interest paid*	-11.0	-18.4	-5.7	-8.4	-21.0
Other financial expense
and income*	-1.2	-3.6	-2.0	-1.0	-2.3
Taxes paid*	-3.7	-7.3	-2.9	-1.7	-12.5
Net cash flows from
operating activities	117.3	195.5	54.2	78.4	255.0
Capital expenditure*	-47.7	-31.7	-23.4	-14.0	-52.9
Proceeds from selling fixed
assets*	6.6	3.5	1.1	0.5	5.9
Divested subsidiaries	-	36.6	-	1.3	69.0
Proceeds from long-term
deposits	12.4	0.8	0.2	0.4	1.3
Payment of long-term
deposits	-1.4	-2.5	-0.1	-1.8	-11.4
Proceeds from short-term
deposits	4.6	2.8	1.4	0.4	13.7
Payment of short-term
deposits	-16.6	-17.6	-1.4	-5.6	-29.2
Net cash flows from
investing	-42.1	-8.1	-22.2	-18.8	-3.6
Proceeds from long-term
borrowings	182.5	573.1	60.0	219.6	599.3
Repayment of long-term
borrowings	-234.7	-668.2	-98.1	-302.8	-785.2
Proceeds from short-term
borrowings	858.4	224.1	442.3	100.6	333.8
Repayment of short-term
borrowings	-853.8	-275.2	-460.0	-85.5	-363.3
Dividends paid	-38.4	-34.1	-	-	-34.1
Hybrid bond interest	-	-	-	-	-7.9
Proceeds from stock
options exercised	-	0.1	-	0.1	4.1
Net cash flows from
financing	-86.0	-180.2	-55.8	-68.0	-253.3
Change in liquid assets	-8.0	5.6	-34.2	-11.4	-3.8
Cash flow based	-10.8	7.2	-23.8	-8.4	-1.9
Translation difference	2.8	-1.6	-10.4	-3.0	-1.9
Liquid assets period start	64.0	67.8	90.2	84.8	67.8
Liquid assets period end	56.0	73.4	56.0	73.4	64.0
Free cash flow (including
figures marked with *)	76.2	167.3	31.9	64.9	208.0

 

NOTES FOR THE INTERIM REPORT
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. Except for accounting policy changes listed below, the same accounting policies have been applied in the interim financial statements as in annual financial statements for 2009.

 

Changes in accounting principles
The Group has adopted the following IFRS standards and interpretations considered applicable to Huhtamaki, with effect from January 1, 2010:

 

- Revised IFRS 3 Business Combination.
- Amended IAS 27 Consolidated and Separate Financial Statements.
- Amended IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items.
- IFRIC 17 Distribution of Non-cash Assets to Owners.
- IFRIC 18 Transfers of Assets from Customers.
- Improvements to IFRSs (April 2009).
- IFRS 2 Share-based Payment: Group Cash-settled Share-based Payment Transactions.
- Amendment IAS 32 Financial Instruments: Presentation - Classification of Rights Issues.

 

These newly adopted standards have not had impact on the reported results.

 

Segments
Segment information is presented according to the IFRS standards. Items below EBIT - financial items and taxes - are not allocated to the segments.

 

Net sales

 

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	132.9	129.9	126.4	389.2	109.5	114.0	118.2	119.7	461.4
- Intersegment net
sales	0.4	0.5	0.4	1.3	0.7	0.8	0.8	0.6	2.9
Films	42.9	41.0	40.0	123.9	32.1	40.4	38.3	40.0	150.8
- Intersegment net
sales	1.1	1.1	1.2	3.4	0.7	0.9	0.8	1.2	3.6
North America	135.5	156.9	112.8	405.2	116.5	128.3	152.1	128.1	525.0
- Intersegment net
sales	0.9	0.9	0.8	2.6	0.7	1.0	1.0	1.0	3.7
Molded Fiber	57.1	59.2	55.4	171.7	56.6	51.6	51.0	48.3	207.5
- Intersegment net
sales	0.1	0.0	0.1	0.2	-0.6	0.4	0.3	0.0	0.1
Foodservice Europe-
Asia-Oceania	116.6	119.9	100.7	337.2	103.8	111.2	117.8	97.1	429.9
- Intersegment net
sales	4.9	5.2	5.3	15.4	4.3	5.0	3.0	7.4	19.7
Other activities	14.8	15.4	12.6	42.8	14.1	14.4	15.3	13.4	57.2
- Intersegment net
sales	0.8	1.0	0.7	2.5	0.6	0.8	0.9	0.7	3.0
Elimination of
intersegment net sales	-8.2	-8.7	-8.5	-25.4	-6.4	-8.9	-6.8	-10.9	-33.0
Total continuing
operations	499.8	522.3	447.9	1,470.0	432.6	459.9	492.7	446.6	1,831.8
Discontinued operations
Rigid consumer goods
plastics units held for
sale	40.3	40.2	37.1	117.6	43.6	47.2	55.1	60.0	205.9
- Intersegment net
sales	3.5	3.5	2.8	9.8	3.7	4.1	5.0	3.6	16.4
Elimination of
intersegment net sales	-3.5	-3.5	-2.8	-9.8	-3.7	-4.1	-5.0	-3.6	-16.4
Total discontinued
operations	40.3	40.2	37.1	117.6	43.6	47.2	55.1	60.0	205.9

 

EBIT

 

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	7.7	7.1	9.9	24.7	7.2	7.6	4.8	8.8	28.4
Films 1)	3.0	3.8	2.5	9.3	-1.3	1.5	-3.4	0.5	-2.7
North America	10.1	18.9	8.4	37.4	2.9	14.5	23.6	14.5	55.5
Molded Fiber	5.4	5.7	4.6	15.7	4.8	4.7	4.3	3.8	17.6
Foodservice Europe-
Asia-Oceania	8.7	8.2	3.5	20.4	0.7	6.8	6.4	2.4	16.3
Other activities	-1.5	0.6	0.0	-0.9	-0.7	-0.9	-1.1	-0.5	-3.2
Total continuing
operations (1	33.4	44.3	28.9	106.6	13.6	34.2	34.6	29.5	111.9
Discontinued operations
Rigid consumer goods
plastics units held for
sale (2	3.9	1.7	1.9	7.5	-7.1	4.4	4.4	5.5	7.2

 

1) Q2 and Q1-Q4 2009 includes non-recuring charges MEUR 3.8.
2) Q2 and H1 2010 includes non-recuring charges MEUR 2.0, Q4 and Q1-Q4 2009 includes non-recuring charges MEUR 10.1.

 

EBITDA

 

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	12.7	12.1	14.6	39.4	12.6	12.1	9.3	13.3	47.3
Films (1	4.5	5.3	3.9	13.7	0.3	3.0	-2.0	2.1	3.4
North America	14.9	23.8	12.9	51.6	7.7	20.4	29.4	19.8	77.3
Molded Fiber	8.5	8.7	7.6	24.8	8.6	7.5	7.0	6.5	29.6
Foodservice Europe-
Asia-Oceania	13.8	13.3	8.2	35.3	6.7	11.9	11.0	7.2	36.8
Other activities	-1.0	1.0	0.5	0.5	-0.2	-0.5	-0.6	-0.1	-1.4
Total continuing
operations (1	53.4	64.2	47.7	165.3	35.7	54.4	54.1	48.8	193.0
Discontinued operations
Rigid consumer goods
plastics units held for
sale (2	3.9	2.6	2.9	9.4	-5.5	5.9	6.6	7.7	14.7

 

1) Q2 and Q1-Q4 2009 includes non-recuring charges MEUR 3.8.
2) Q2 and H1 2010 includes non-recuring charges MEUR 2.0, Q4 and Q1-Q4 2009 includes non-recuring charges MEUR 10.1.

 

Depreciation and amortization

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	5.0	5.0	4.7	14.7	5.4	4.5	4.5	4.5	18.9
Films	1.5	1.5	1.4	4.4	1.6	1.5	1.4	1.6	6.1
North America	4.8	4.9	4.5	14.2	4.8	5.9	5.8	5.3	21.8
Molded Fiber	3.1	3.0	3.0	9.1	3.8	2.8	2.7	2.7	12.0
Foodservice Europe-
Asia-Oceania	5.1	5.1	4.7	14.9	6.0	5.1	4.6	4.8	20.5
Other activities	0.5	0.4	0.5	1.4	0.5	0.4	0.5	0.4	1.8
Total continuing
operations	20.0	19.9	18.8	58.7	22.1	20.2	19.5	19.3	81.1
Discontinued operations
Rigid consumer goods
plastics units held for sale	0.0	0.9	1.0	1.9	1.6	1.5	2.2	2.2	7.5

Net assets allocated to the segments (3

 

	Q3	Q2	Q1	Q4	Q3	Q2	Q1
EUR million	2010	2010	2010	2009	2009	2009	2009
Continuing operations
Flexible Packaging	325.6	328.6	320.4	305.5	311.5	325.8	342.2
Films	120.4	125.0	119.3	111.0	117.5	125.2	135.8
North America	376.0	411.2	385.1	364.8	365.8	370.8	393.9
Molded Fiber	172.1	176.0	174.2	166.0	167.1	169.9	170.4
Foodservice Europe-
Asia-Oceania	227.7	237.3	228.2	225.7	236.8	246.6	241.7
Discontinued operations
Rigid consumer goods
plastics units held for
sale	44.7	42.5	47.3	41.2	72.9	71.8	104.6

 

3) Following statement of financial position items are included in net assets: intangible and tangible assets, other non-current assets, inventories, trade and other current receivables (excluding accrued interest income), other non-current liabilities and trade and other current liabilities (excluding accrued interest expense).

 

Capital expenditure

 

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	3.6	1.5	2.2	7.3	3.3	2.3	3.2	2.1	10.9
Films	2.3	1.1	0.4	3.8	0.4	0.2	0.3	0.2	1.1
North America	7.1	5.6	2.9	15.6	6.5	6.5	2.8	1.0	16.8
Molded Fiber	4.9	0.8	1.2	6.9	3.7	0.7	0.8	1.6	6.8
Foodservice Europe-
Asia-Oceania	4.4	3.5	3.0	10.9	5.1	2.7	1.4	2.3	11.5
Other activities	0.2	1.0	0.2	1.4	0.7	0.4	0.4	0.1	1.6
Total continuing
operations	22.5	13.5	9.9	45.9	19.7	12.8	8.9	7.3	48.7
Discontinued operations
Rigid consumer goods
plastics units held for
sale	0.9	0.6	0.3	1.8	1.5	1.2	0.8	0.7	4.2

 

RONA, % (12m roll.)

 

	Q3	Q2	Q1	Q4	Q3	Q2	Q1
	2010	2010	2010	2009	2009	2009	2009
Continuing operations
Flexible Packaging	10.0%	10.0%	9.3%	8.8%	1.4%	0.3%	0.4%
Films	6.7%	5.5%	-0.6%	-2.2%	-1.0%	0.7%	5.7%
North America	10.6%	11.7%	13.3%	14.8%	14.3%	13.0%	10.7%
Molded Fiber	12.0%	11.6%	10.9%	10.5%	6.8%	6.1%	5.3%
Foodservice Europe-
Asia-Oceania	9.1%	8.3%	7.4%	6.9%	0.2%	-0.2%	-0.6%
Discontinued operations
Rigid consumer goods
plastics units held for
sale	0.9%	1.9%	6.2%	9.6%	-114.3%	-82.3%	-66.7%

 

Operating Cash Flow

 

	Q3	Q2	Q1	Q1-Q3	Q4	Q3	Q2	Q1	Q1-Q4
EUR million	2010	2010	2010	2010	2009	2009	2009	2009	2009
Continuing operations
Flexible Packaging	3.4	7.7	1.2	12.3	21.1	17.3	23.4	20.0	81.8
Films	5.2	-0.2	-4.8	0.2	5.0	8.4	8.2	1.9	23.5
North America	9.0	18.4	12.6	40.0	8.9	9.6	22.9	14.5	55.9
Molded Fiber	6.0	7.3	2.3	15.6	6.1	4.3	8.6	-0.6	18.4
Foodservice Europe-
Asia-Oceania	11.5	5.2	-0.3	16.4	9.6	18.3	7.1	-2.1	32.9
Discontinued operations
Rigid consumer goods
plastics units held for
sale	2.7	0.2	4.8	7.7	3.7	5.8	9.2	0.6	19.3

 

Reportable segments net sales and EBIT forms Groups' total net sales and EBIT, so no reconciliations to corresponding amounts are presented.

 

Other information

 

	Q1-Q3	Q1-Q3	Q1-Q4
EUR million	2010	2009	2009
Equity per share (EUR)	6.99	6.36	6.35
ROE, %  (12m roll.)	11.3	-9.6	10.1
ROI, % (12m roll.)	10.1	-2.5	9.6
Personnel	12,839	13,346	12,900
Result before taxes (12m roll.)	104.9	-67.3	93.9
Depreciation	56.0	60.5	82.6
Amortization of other
intangible assets	4.6	4.4	5.9

 

Share capital and shareholders

 

At the end of September 2010, the Company's registered share capital was EUR 360,615,288.00 (358,657,670.00) corresponding to a total number of outstanding shares of 106,063,320 (105,487,550) including 4,826,089 (5,061,089) Company's own shares. The Company's own shares had the total accountable par value of EUR 16,408,702.60, representing 4.6% of the total number of shares and voting rights. The amount of outstanding shares net of Company's own shares was 101,237,231 (100,426,461).

 

There were 26,104 (22,444) registered shareholders at the end of the reporting period. Foreign ownership including nominee registered shares accounted for 25.5% (27.4%).

 

Share developments

 

The Company´s share is quoted on the NASDAQ OMX Helsinki Ltd on the Nordic Mid Cap list under the Materials sector.

 

At the end of September 2010, the Company's market capitalization was EUR 999.1 million (EUR 917.7 million) and EUR 953.7 million (EUR 873.7 million) excluding Company's own shares.
With a closing price of EUR 9.42 (EUR 8.70) the share price decreased by 3% (increased 98%) from the beginning of the year, while the OMX Helsinki Cap PI Index increased by 16% (31%) and the OMX Helsinki Materials PI Index increased by 32% (15%). During the reporting period the volume weighted average price for the Company's share was EUR 8.61 (EUR 6.75). The highest price paid was EUR 10.19 on January 11, 2010 and the lowest price paid was EUR 7.30 on July 1, 2010.

 

During the reporting period the cumulative value of the Company's share turnover was EUR 585.2 million (EUR 389.9 million). The trading volume of 68.0 million (58.2 million) shares equaled an average daily turnover of EUR 3.1 million (EUR 2.1 million) or, correspondingly 359,968 (309,502) shares.

 

In total, turnover of the Company's 2006 A and B option rights was EUR 236,843.99 corresponding to a trading volume of 217,644 shares.

 

Contingent liabilities

 

	Sep 30	Dec 31	Sep 30
	2010	2009	2009
EUR million
Mortgages	14.5	14.5	14.5
Guarantee obligations	-	2.5	2.4
Lease payments	52.4	54.0	51.5
Capital expenditure commitments	30.5	10.2	22.3

 

Nominal values of derivative instruments

 

	Sep 30	Dec 31	Sep 30
	2010	2009	2009
EUR million
Currency forwards, transaction
risk hedges	52	25	26
Currency forwards, translation risk
hedges	46	29	28
Currency swaps, financing hedges	123	123	142
Currency options	-	3	2
Interest rate swaps	150	167	158
Electricity forwards	1	1	4

 

   The following EUR rates have been applied to GBP, INR, AUD and USD

 

		Q1-Q3/10	Q1-Q3/09
Income statement, average:	GBP 1 =	1.166	1.128
	INR 1 =	0.017	0.015
	AUD 1 =	0.682	0.548
	USD 1 =	0.760	0.733
		Q3/10	Q3/09
Statement of financial position, month end:	GBP 1 =	1.163	1.100
	INR 1 =	0.016	0.014
	AUD 1 =	0.711	0.603
	USD 1 =	0.733	0.683

 

Definitions for key indicators

 

EPS result for the period = Result for the period - non-controlling interest / Average number of shares outstanding

 

EPS result for the period (diluted) = Diluted result for the period - non-controlling interest / Average fully diluted number of shares outstanding

 

EPS attributable to hybrid bond investors = Hybrid bond interest / Average number of shares outstanding

 

EPS attributable to hybrid bond investors (diluted) = Hybrid bond interest / Average fully diluted number of shares outstanding

 

EPS attributable to equity holders of the parent company = Result for the period - non-controlling interest - hybrid bond interest / Average number of shares outstanding

 

EPS attributable to equity holders of the parent company (diluted) = Diluted result for the period - non-controlling interest - hybrid bond interest / Average fully diluted number of shares outstanding

 

Net debt to equity (gearing) = Interest bearing net debt / Equity + non-controlling interest + hybrid bond

 

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 expenditures + disposals +/- change in inventories, trade receivables and trade payables

 

Shareholders' equity per share = Total equity attributable to equity holders of parent company / Issue-adjusted number of shares at period end

 

Return on equity (ROE) = 100 x (Result for the period ) (12 m roll.) / Equity + non-controlling interest + hybrid bond (average)

 

Return on investment (ROI) = 100 x (Result before taxes + interest expenses + net other financial expenses) (12 m roll.) / Statement of financial position total - Interest-free liabilities (average)

get_app Huhtamäki Oyj Interim Report January 1 - September 30, 2010