Huhtamäki Oyj's Interim Report January 1 - March 31, 2017: Net sales grew and earnings improved


Huhtamäki Oyj's Interim Report January 1 - March 31, 2017: Net sales grew and earnings improved

Q1 2017 in brief

  • Net sales grew to EUR 739 million (EUR 672 million)
  • EBIT improved to EUR 63 million (EUR 58 million)
  • EPS improved to EUR 0.43 (EUR 0.40)
  • Comparable net sales growth was 3% in total and 2% in emerging markets
  • Currency movements had a positive impact of EUR 20 million on the Group's net sales and EUR 2 million on EBIT

Key figures

EUR million Q1 2017 Q1 2016 Change FY 2016
Net sales 739.4 672.3 10% 2,865.0
EBITDA1 94.0 84.6 11% 381.8
  Margin1 12.7% 12.6%   13.3%
EBIT1 62.8 57.8 9% 267.9
  Margin1 8.5% 8.6%   9.4%
EPS1, EUR 0.43 0.40 8% 1.83
ROI1 14.6% 14.8%   14.7%
ROE1 17.4% 18.3%   17.7%
Capital expenditure 47.0 24.3 93% 199.1
Free cash flow -8.8 25.6 -134% 100.3

1 FY 2016 excluding IAC of EUR -1.7 million; Reported EBITDA for FY 2016 EUR 380.1 million, EBIT EUR 266.2 million and EPS EUR 1.81.

Unless otherwise stated, all comparisons in this report are compared to the corresponding period in 2016. Figures of return on investment (ROI), return on equity (ROE) and return on net assets (RONA) presented in this report are calculated on a 12-month rolling basis.

As announced on April 24, 2017, Huhtamaki has changed the name of its Molded Fiber business segment to Fiber Packaging. The new name is taken into use as of April 27, 2017 and is used in this report.

In this report, Huhtamaki uses alternative performance measures in accordance with the guidelines issued by the European Securities and Markets Authority (ESMA). Alternative performance measures are derived from performance measures reported in accordance to International Financial Reporting Standards (IFRS) by adding or deducting the Items affecting comparability (IAC) and they are called Adjusted. Alternative performance measures are used to better reflect the operational business performance and to enhance comparability between financial periods. They are reported in addition to, but not substituting, the performance measures reported in accordance with IFRS.

Jukka Moisio, CEO:

"Our year started well and we achieved 3% comparable net sales growth with all business segments growing organically. Growth was driven by Foodservice Europe-Asia-Oceania segment, where organic growth was boosted by acquisitions completed in 2016. In addition, the Flexible Packaging segment returned to positive growth. The Group's comparable growth in emerging markets was reduced to 2% as consumer demand in India was impacted by the demonetization action executed by the government in Q4 2016. Without the Indian impact emerging market growth would have been approx. 6-7%. 

Our EBITDA, EBIT and EPS improved with margins at the previous year's levels. Foodservice Europe-Asia-Oceania segment accounted for the strongest profitability improvement with good volume growth, high-yielding acquisitions, and successful restructuring actions in China and New Zealand. Free cash flow was negative due to high capital expenditure and seasonal inventory buildup. Our ROI and ROE remained at good levels.

2017 is a year of major investments for Huhtamaki. Our ongoing investments in new manufacturing units in the U.S., Egypt, and Ukraine are progressing. During the quarter we already started manufacturing in two new flexible packaging units in Northeast India and are currently ramping up the plant extension in Guangzhou, China. These significant growth investments help us address attractive opportunities in food and drink packaging and serve our customers better."

Financial review Q1 2017

The Group's comparable net sales growth was 3% during the quarter with all business segments having a positive contribution to growth. The Group's comparable growth in emerging markets was 2%. Growth was strong in Eastern Europe and Southeast Asia, but negative in India, South America and China. In China the Foodservice Europe-Asia-Oceania business segment exited non-core product categories as announced in 2016. The Group's net sales grew to EUR 739 million (EUR 672 million). The impact from foreign currency translation on net sales turned positive and was EUR 20 million (EUR -11 million) compared to 2016 exchange rates. Main positive impact came from the strengthening of the US dollar versus euro, while the impact from the weakening pound sterling was negative.

Net sales by business segment

EUR million Q1 2017 Q1 2016 Change Of Group in
Q1 2017
Foodservice Europe-Asia-Oceania 192.5 158.9 21% 26%
North America 247.3 235.2 5% 33%
Flexible Packaging 232.3 217.7 7% 31%
Fiber Packaging 72.3 65.5 10% 10%
Elimination of internal sales -5.0 -5.0    
Group 739.4 672.3 10%  

Comparable growth by business segment

  Q1 2017 Q4 2016 Q3 2016 Q2 2016
Foodservice Europe-Asia-Oceania 3% 3% 5% 7%
North America 2% 5% 2% 8%
Flexible Packaging 3% -3% -3% 2%
Fiber Packaging 4% 6% 6% 5%
Group 3% 3% 2% 6%

The Group's earnings grew. Main drivers for earnings growth were the robust profitability improvement of the Foodservice Europe-Asia-Oceania business segment as well as continued good progress in the North America business segment. Earnings of the Flexible Packaging business segment remained on the previous year's level, while earnings of the Fiber Packaging business segment declined. The Group's earnings before interest and taxes (EBIT) were EUR 63 million (EUR 58 million). Positive foreign currency translation impact on Group's EBIT was EUR 2 million (EUR -1 million).

EBIT by business segment

EUR million Q1 2017 Q1 2016 Change Of Group in
Q1 2016
Foodservice Europe-Asia-Oceania 15.4 12.0 28% 24%
North America 22.5 20.8 8% 35%
Flexible Packaging 18.9 18.9 0% 30%
Fiber Packaging 7.3 8.2 -11% 11%
Other activities -1.3 -2.1    
Group 62.8 57.8 9%  

Net financial expenses were EUR 5 million (EUR 6 million). Tax expense was EUR 13 million (EUR 9 million). The corresponding tax rate was 22% (18%).

Profit for the quarter was EUR 45 million (EUR 43 million). Earnings per share (EPS) were EUR 0.43 (EUR 0.40).

Outlook for 2017

The Group's trading conditions are expected to remain relatively stable during 2017. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same level as in 2016 with the majority of the investments directed to business expansion.

Annual General Meeting 2017

The Annual General Meeting of Shareholders will be held on Thursday, April 27, 2017 at 11.00 (EET) at Messukeskus Helsinki, Expo and Convention Centre, Messuaukio 1, 00520 Helsinki, Finland.

Financial reporting in 2017

In 2017, Huhtamaki will publish financial information as follows:

Half-yearly Report, January 1-June 30, 2017                          July 21
Interim Report, January 1-September 30, 2017                      October 26

This is a summary of Huhtamäki Oyj's Interim Report January 1 - March 31, 2017. The complete report is attached to this release and is also available at the company website at

For further information, please contact: 
Jukka Moisio, CEO, tel. +358 10 686 7801
Thomas Geust, CFO, tel. +358 10 686 7880

Group Communications

Huhtamaki is a global specialist in packaging for food and drink. With our network of 76 manufacturing units and additional 24 sales only offices in altogether 34 countries, we're well placed to support our customers' growth wherever they operate. Mastering three distinctive packaging technologies, approximately 17,300 employees develop and make packaging that helps great products reach more people, more easily. In 2016 our net sales totaled EUR 2.9 billion. The Group has its head office in Espoo, Finland and the parent company Huhtamäki Oyj is listed on Nasdaq Helsinki Ltd. Additional information is available at

get_app Huhtamaki Q1 2017 Interim Report