Huhtamäki Oyj’s Interim Report January 1–March 31, 2020: Solid net sales growth and profitability in an increasingly uncertain environment


Huhtamäki Oyj’s Interim Report January 1–March 31, 2020: Solid net sales growth and profitability in an increasingly uncertain environment

Q1 2020 in brief

  • Net sales increased 5% to EUR 845 million (EUR 802 million)
  • Adjusted EBIT was EUR 74 million (EUR 68 million); reported EBIT was EUR 83 million (EUR 68 million)
  • Adjusted EPS was EUR 0.46 (EUR 0.44); reported EPS was EUR 0.53 (EUR 0.44)
  • Comparable net sales growth was 3% at Group level and -3% in emerging markets
  • Currency movements had a positive impact of EUR 10 million on the Group’s net sales and EUR 1 million on EBIT

Key figures

EUR millionQ1 2020Q1 2019Change2019
Net sales844.6802.15%3,399.0
Comparable net sales growth3%5% 6%
Adjusted EBITDA1117.0107.09%456.3
 Margin113.9%13.3% 13.4%
Adjusted EBIT273.667.89%293.1
 Margin28.7%8.5% 8.6%
Adjusted EPS30.460.445%1.88
EPS, EUR0.530.4421%1.82
Adjusted ROI212.1%11.5% 12.3%
Adjusted ROE315.0%14.6% 15.2%
ROI12.1%10.4% 11.9%
ROE15.1%13.0% 14.8%
Capital expenditure39.439.7-1%203.9
Free cash flow-24.5-18.3 225.8

1 Excluding IAC of EUR 13.1 million in Q1 2020 (EUR -0.1 million) and EUR -7.6 million in 2019.
2 Excluding IAC of EUR 8.9 million in Q1 2020 (EUR -0.1 million) and EUR -7.6 million in 2019.
3 Excluding IAC of EUR 6.9 million in Q1 2020 (EUR -0.1 million) and EUR -5.9 million in 2019.

Unless otherwise stated, all comparisons in this report are compared to the corresponding period in 2019. Figures of return on investment (ROI), return on equity (ROE) and return on net assets (RONA) as well as net debt to EBITDA presented in this report are calculated on a 12-month rolling basis.

The figures in the tables are exact figures and consequently the sum of individual figures may deviate from the sum presented. Key figures have been calculated using exact figures.

Charles Héaulmé, President and CEO

“During the first quarter of 2020, our net sales increased by 5% with a comparable sales growth of 3% and improved profitability. This represents solid performance in a quarter that was marked by contrast – while good demand for food packaging continued, the outbreak of COVID-19 quickly transformed the overall business context. The lockdown in China and consequent drop in demand was followed in March by further impact in the rest of the world as the COVID-19 crisis proceeded to spread globally. This change was visible in our Foodservice segment, while demand in our other segments increased.

The safety and health of our employees and stakeholders remain our number one focus and priority during the COVID-19 pandemic. We are following the guidelines from governments and international and local health authorities and have taken actions to safeguard the continuity of our business. We have also taken all relevant measures to secure our cash position and reprioritize our costs and investments.

Despite serious turbulence in parts of our business, I am confident that together with our customers and other stakeholders we will successfully navigate through this crisis and come out of it even stronger than before. We have a diversified portfolio and a healthy balance sheet, and we are carrying on in our planned investments and efficiency activities, which are vital to our future success.

To maintain our growth trajectory and anticipate key transformative trends, we have renewed our long-term strategy for 2030. We will continue on our path as a growth company, and will further focus on competitiveness, talent, and sustainability. We are taking a leading role in addressing the global challenges of circularity and climate change within the food packaging industry. We will embed sustainability in everything we do – and for this reason, we have set high ambitions for the future.

I would like to extend a “Thank you!” to all Huhtamaki employees for demonstrating their commitment to our values during these unforeseen and unprecedented times. I am impressed by the agility of our organization to adapt and collaborate so well under these new work conditions. This has enabled us, for example, to use machines made idle by the crisis and launch, in record time, a new product line of certified Personal Protective Equipment (PPE) devoted to healthcare workers. I am convinced that the spirit and the engagement will help us get through this challenging period.”

Financial review Q1 2020

Net sales by business segment

EUR millionQ1 2020Q1 2019Change
Foodservice Europe-Asia-Oceania217.6227.9-5%
North America286.2255.712%
Flexible Packaging271.0251.88%
Fiber Packaging74.571.54%
Elimination of internal sales-4.6-4.9 

Comparable net sales growth by business segment

 Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019
Foodservice Europe-Asia-Oceania-4%4%4%3%4%
North America9%6%14%13%5%
Flexible Packaging2%3%4%1%5%
Fiber Packaging9%8%7%7%4%

The Group’s comparable net sales growth was moderate during the quarter. Growth was strong in the North America and Fiber Packaging segments and moderate in the Flexible Packaging segment. Net sales declined in the Foodservice Europe-Asia-Oceania segment due to the impact of COVID-19. The Group’s comparable net sales growth was 3% and growth in emerging markets was -3%. The Group’s net sales increased 5% to EUR 845 million (EUR 802 million). Foreign currency translation impact on the Group’s net sales was EUR 10 million (EUR 19 million) compared to 2019 exchange rates. The majority of the positive impact came from the US Dollar.

Adjusted EBIT by business segment

     Items affecting comparability
EUR millionQ1 2020Q1 2019Change Q1 2020Q1 2019
Foodservice Europe-Asia-Oceania17.520.1-13% -1.6-
North America30.420.648% -3.4-
Flexible Packaging20.923.0-9% -4.7-
Fiber Packaging8.26.920% -0.7-
Other activities-3.4-2.7  19.3-0.1
Group 73.667.89% 8.9-0.1

Adjusted EBIT margin by business segment

 Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019
Foodservice Europe-Asia-Oceania8.0%8.5%9.4%9.1%8.8%
North America10.6%10.9%8.8%10.6%8.0%
Flexible Packaging7.7%7.4%7.9%8.1%9.1%
Fiber Packaging11.0%9.8%10.4%9.8%9.6%

The Group’s adjusted EBIT grew and profitability was solid. Earnings growth was driven by a more favorable raw material environment and higher capacity utilization apart from the Foodservice Europe-Asia-Oceania segment. Earnings grew significantly in the North America segment as a result of higher sales volumes and following price increases implemented during previous quarters. The Group’s adjusted EBIT was EUR 74 million (EUR 68 million) and reported EBIT EUR 83 million (EUR 68 million). Foreign currency translation impact on the Group’s earnings was EUR 1 million (EUR 1 million).

Adjusted EBIT excludes EUR 8.9 million (EUR -0.1 million) of items affecting comparability (IAC).

Adjusted EBIT and IAC

EUR millionQ1 2020Q1 2019
Adjusted EBIT73.667.8
Acquisition related costs-0.2-0.1
Restructuring costs including write-downs of related assets-11.1-
One-time gain from acquisition of Laminor20.2-

Net financial expenses were EUR 9 million (EUR 8 million). Tax expense was EUR 16 million (EUR 12 million). The corresponding tax rate was 23% (21%). Profit for the quarter was EUR 57 million (EUR 47 million). Adjusted earnings per share (EPS) were EUR 0.46 (EUR 0.44) and reported EPS EUR 0.53 (EUR 0.44). Adjusted EPS is calculated based on adjusted profit for the period, which excludes EUR 8.9 million (EUR -0.1 million) of IAC.

Adjusted EPS and IAC

EUR millionQ1 2020Q1 2019
Adjusted profit for the period attributable to equity holders of the parent company47.945.5
IAC excluded from adjusted EBIT8.9-0.1
Taxes related to IAC-2.00.0
Profit for the period attributable to equity holders of the parent company54.945.4

Acquisitions and divestments

On September 30, 2019, Huhtamaki announced that it has agreed to acquire the assets and operations of Mohan Mutha Polytech Private Limited (MMPPL), a privately-owned flexible packaging manufacturer located in Sri City, Andhra Pradesh, India. The acquisition allows Huhtamaki to speed up its growth in India by improving its capability to serve the customers in South India. MMPPL has approximately 160 employees and its net sales in 2018 were approximately EUR 9 million. The debt-free purchase price was approximately EUR 10 million. The acquisition was completed on January 10, 2020 and the business has since been reported as part of the Flexible Packaging business segment.

On December 23, 2019, Huhtamaki announced that it has agreed to acquire full ownership of its joint venture company Laminor S.A. in Brazil. Laminor is specialized in high-quality tube laminates, particularly for oral care applications, and was set up in 2002 as a 50/50 joint venture together with Bemis Company, which is now part of Amcor. The acquisition enables Huhtamaki to expand its tube laminate business, an important part of the Group’s flexible packaging offering. Laminor has approximately 130 employees and its net sales in 2018 were approximately EUR 25 million. The additional shares were acquired at a price of approximately EUR 30 million and the acquisition was completed on March 31, 2020. The business has been consolidated as a subsidiary in the Group’s financial reporting and it has been reported as part of the Flexible Packaging business segment as of April 1, 2020. As a result of the transaction a gain from the difference between remeasured interest according to the purchase price and previously held equity interest of approximately EUR 20 million was recognized in the income statement as item affecting comparability in Q1/2020 financial results.

Significant events during the reporting period

On March 23, 2020, Huhtamaki announced that it has renewed its long-term 2030 strategy in order to maintain its growth trajectory and meet future transformative trends. Going forward, Huhtamaki will focus on growth, competitiveness, talent and sustainability. The company’s ambition is to become the first choice in sustainable food packaging. Following the strategy renewal, Huhtamaki outlined its long-term financial ambitions and introduced new 2030 sustainability ambitions. The strategy emphasizes strong core values: Care, Dare, Deliver. In line with its renewed strategy, the company has decided to integrate its Foodservice Europe-Asia-Oceania and Fiber Packaging business segments. The segments will continue to be reported separately, at least for the remainder of the financial year 2020. Eric Le Lay will continue as President for the combined Fiber and Foodservice EAO (Europe-Asia-Oceania) segment. This change will become effective as of June 1, 2020.

On March 26, 2020, Huhtamaki announced that it has decided to withdraw its outlook for 2020 (published on February 13, 2020) due to the unprecedented and accelerated situation caused by the COVID-19 and its impact on the Group’s trading conditions. Huhtamaki will provide a new outlook when impacts of the changing business environment on its trading conditions in 2020 can be assessed in a reliable manner. On the same date Huhtamaki also announced that the Board of Directors changes its proposal for use of the profit shown on the balance sheet and proposes that no dividend payment would be decided by the Annual General Meeting. Instead, the Board of Directors proposes to the Annual General Meeting that the Annual General Meeting would authorize the Board of Directors to decide at a later stage and in its discretion on a dividend payment in one or several installments of a total maximum of EUR 0.89 per share. The authorization would be valid until the Annual General Meeting 2021, however, no longer than until June 30, 2021. The Company will publish the possible decisions on dividend payment separately, and simultaneously confirm the dividend record and payment dates.

Annual General Meeting 2020

The Annual General Meeting of Shareholders will be held on Wednesday, April 29, 2020 at 11.00 (EET) at Messukeskus Helsinki, Expo and Convention Centre, Messuaukio 1, Helsinki, Finland.

Financial reporting in 2020

In 2020, Huhtamaki will publish financial information as follows:

Half-yearly Report, January 1–June 30, 2020                        July 23
Interim Report, January 1–September 30, 2020                    October 22

This is a summary of Huhtamäki Oyj's Interim Report January 1 - March 31, 2020. The complete report is attached to this release and is also available at the company website at

For further information, please contact:
Calle Loikkanen, Head of Investor Relations and Financial Communications, tel. +358 10 686 7125

Global Communications

Huhtamaki is a key global player in sustainable food-on-the-go and food-on-the shelf packaging solutions. Our innovative products help billions of consumers around the world make responsible lifestyle choices every day. Today, packaging plays a significant role in food safety and convenience. We are committed to making packaging more circular and we embed sustainability in everything we do. We are focused on achieving carbon neutral production and having all our products designed to be recyclable, compostable or reusable by 2030.

With 100 years of history and a strong Nordic heritage we operate in 35 countries and 81 sites around the world. Our 19,000 employees are working to deliver smart next generation packaging. Our 2019 net sales totaled EUR 3.4 billion. Huhtamaki Group has its head office in Espoo, Finland and the parent company Huhtamäki Oyj is listed on Nasdaq Helsinki Ltd. Find out more about our Sustainability Action Plan and our ambition at


get_app Huhtamaki Interim Report Q1 2020