Huhtamaki roadshow presentation. Investor Relations Q1 2009

Transcription

1 Huhtamaki roadshow presentation Investor Relations 2009

2 Huhtamaki in brief A leading manufacturer of consumer and specialty packaging with head office in Espoo, Finland Net sales EUR 2.3 billion in 65 manufacturing units and several sales offices in 35 countries worldwide Approximately 14,000 employees Share listed on the NASDAQ OMX Helsinki Ltd on the Nordic Mid Cap list under the Materials sector Market capitalization EUR 540 million at the end of March

3 Sales by segment and location Sales by reporting segment, Sales by geographical location*, Rigid Consumer Goods Plastics Flexibles Global Other countries United States Italy Foodservice Europe-Asia- Oceania Films Global France Poland Finland Rough Molded Fiber Global North America Brazil India Great Britain Australia Germany * Net sales from external customers based on the selling entity s location 3

4 Products Flexibles Global Films Global North America Rough Molded Fiber Global Foodservice Europe-Asia-Oceania Rigid Consumer Goods Plastics* Food and pet food packaging Non-food consumer packaging Technical applications Chinet Disposable tableware Frozen dessert packaging Egg and fruit packaging Protective packaging Packaging including hot and cold beverage cups, food containers, lids Disposable tableware Packaging for: Dairy Fresh food Ice cream BioWare Edible fats * Under strategic review 4

5 Customers Flexibles Global Films Global North America Rough Molded Fiber Global Foodservice Europe-Asia-Oceania Rigid Consumer Goods Plastics* Food and pet food manufacturers, hygiene & health care industry Label-, graphic arts-, adhesive tapes-, hygiene & health care, building & construction and automotive industries Retail, foodservice operators, fast food restaurants and food manufacturers Fresh product manufacturers Foodservice operators, fast food restaurants and retail Food and other consumer goods manufacturers * Under strategic review 5

6 Raw materials Flexibles Global Films Global North America Rough Molded Fiber Global Foodservice Europe-Asia-Oceania Rigid Consumer Goods Plastics* Films, alufoil, polymers, paper Polymers, biopolymers, paper Post-industrial recycled fiber, cartonboard, paper, polymers Post-industrial recycled paper, postconsumer recycled paper Cartonboard, paper, post-industrial recycled paper, biopolymers and polymers Cartonboard, paper, polymers and biopolymers Other, 14% Recycled paper, 4% Alufoil, 4% Polymers, 35% Utilities, 11% Films, 14% Carton board and other paper, 18% Total annual spend approximately EUR 1 billion in * Under strategic review 6

7 Corporate responsibility Signatory of the ICC Business Charter for Sustainable Development. International Chamber of Commerce Share included in the Kempen/SNS Smaller Europe SRI Index since Huhtamaki was the first to launch a complete range of compostable tableware in Europe. The BioWare family was launched in

8 Shareholders Largest registered shareholders, March 31, 2009 Shareholder distribution by sector 1. The Finnish Cultural Foundation 15.3% 2. Huhtamäki Oyj 4.8% 3. Society of Swedish Literature in Finland 4.5% 4. Ilmarinen Mutual Pension Insurance Company 2.7% 5. Varma Mutual Pension Insurance Company 2.2% 6. The Association for the Finnish Cultural Foundation 2.0% 7. OP-Delta Fund 1.9% 8. Odin Norden 1.8% 9. The State Pension Fund 1.1% 10. Odin Förvaltning As 1.0% Ten largest shareholders 37.3% Others 62.7% Total 100% Foreign ownership incl. nominee registered shares 23.0% Other 0.1% Financial & insurance companies 9.4% Public-sector organizations 10.0% Private companies 10.4% Non-profit organizations 27.7% Households 19.4% 22,186 registered shareholders at the end of March 2009; total number of outstanding shares 105,487,550 8

9 Strategic direction Huhtamäki Oyj focuses on packaging operations where it has a competitive advantage, good market positions and which create value for the company and its customers. Huhtamaki has a good position in smooth and rough molded fiber products, release films, flexible packaging, foodservice paper cups and other products based on paper forming technology. In these operations Huhtamaki has strong know-how, technology platforms and business concepts that allow continued competitive advantage. 9

10 Rigid Consumer Goods Plastics operations under strategic review Fragmented competition Some thermoforming suppliers globally other rigid plastic suppliers Primarily oil based raw material base has challenged margins Operations, for the most part, have not met criteria for financial performance Business has interesting parts that could attract buyers 10

11 Financial frame Huhtamaki s main financial targets: Return on investment (ROI) at 15% Average dividend payout ratio of 40% Balance sheet structure maintained; long-term gearing target of around 100% is close to the optimal cost of capital Targeted capital expenditure with priority on strongholds Strong free cash flow generation Gearing = net debt to equity 11

12 Business review 12

13 Group highlights 2009 EUR million Net sales EBIT excl. non-recurring charges EBIT margin % EBIT EPS Free cash flow ROI % (12m roll.) , Sales dampened by economic downturn and customer cautiousness Earnings improved due to successful cost containment, better operational control as well as price and mix management Significant headcount reduction of approximately 900 employees and elimination of loss-making units Free cash flow continued strong, debt reduced further ROI reflects significant non-recurring charges in 13

14 Flexibles Global 2009 EUR million 2009 Net sales EBIT *16.9 EBIT margin % *3.4 Operating cash flow In Europe weak demand in certain market segments such as pet food packaging and tube laminate Sales in Asia-Oceania at previous year s level Improved profitability reflects lower costs and better operational control achieved especially in smaller units Discontinuation of operations in Malvern, USA, finalized by end H * Excluding non-recurring charges EUR 17.9 million 14

15 Films Global 2009 EUR million 2009 Net sales EBIT EBIT margin % Operating cash flow Weak demand of industrial applications, consumer related products more resilient to economic downturn Profitability at previous year s level thanks to cost reduction efforts and better operational control Release paper business sold, gradual transfer to buyer by end 2010 Social plan discussion concerning approximately 100 permanent employees 15

16 North America 2009 EUR million 2009 Net sales EBIT *38.6 EBIT margin % *7.2 Operating cash flow Sales in constant currencies at previous year s level Growth in Retail, Frozen desserts, Foodservice distribution and Mexico Other market segments weak, partially as a result of product portfolio optimization Clear improvement in profitability reflects strong market positions, better mix, lower costs and favorable currency translation impact Rigid plastics site in Phoenix, USA, closed by end H * Excluding non-recurring charges EUR 5.2 million 16

17 Rough Molded Fiber Global 2009 EUR million 2009 Net sales EBIT *12.1 EBIT margin % *5.7 Operating cash flow Sales growth achieved in constant currencies and excluding ancillary operations** Good demand for egg packaging ahead of Easter, favorable performance in South America and Africa Profitability stable reflecting lower costs offset by adverse currency impact and volume shortfall in ancillary operations * Excluding non-recurring charges EUR 3.7 million ** Machine & waste paper trade businesses 17

18 Foodservice Europe-Asia-Oceania 2009 EUR million 2009 Net sales EBIT *12.9 EBIT margin % *2.6 Operating cash flow Net sales declined mainly due to adverse currency translation impact Sales growth slowed down in Eastern Europe Sales in Asia below previous year s level, while growing in Oceania Stable profitability reflect lower costs, better operational control in Asia and price and mix management offset by adverse currency impact Site in Balakong, Malaysia, closed by end Q3 2009, impacts approx. 70 employees; most of manufacturing moved to Guangzhou, China * Excluding non-recurring charges EUR 14.5 million 18

19 Rigid Consumer Goods Plastics 2009 EUR million 2009 Net sales EBIT *0.8 EBIT margin % *0.2 Operating cash flow Sales declined in most markets Clear improvement in profitability reflects better operational control, lower costs and the elimination of loss-making UK business Strategic review of the operations is ongoing * Excluding non-recurring charges EUR million 19

20 Financial review 20

21 Income statement 2009 EUR million 2009 Net sales ,260.0 EBITDA % 11.2% 7.9% 7.6% EBIT *-74.5 % 6.9% 3.6% -3.3% Net financial items Income on assoc. co s Result before taxes * Taxes Result for the period * EPS Minority interest All figures at actual currency rates, * includes non-recurring charges EUR million 21

22 Volume development by segment 2009 Flexibles Global Films Global North America % -23.2% -2.2% 1.9% -3.9% -0.8% Rough Molded Fiber Global Foodservice EAO & Rigid Consumer Goods Plastics* Group total -2.3% -7.9% -6.9% -0.4% -0.3% -0.3% Volume development of food & personal care related packaging products approx. -5% in 2009 * Comparable volume information from available only on consolidated level 22

23 Polymer based raw material prices Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb Mar-09 PS PP PE Including polystyrene (PS), polypropylene (PP), polyethylene (PE); source: ICIS, Huhtamaki 23

24 Balance sheet March 31, 2009 EUR million March 2009 December March Balance sheet total 1, , ,160.4 Operating working capital Net debt Equity + minority Gearing ROI % (12m roll.)* ROE % (12m roll.)* All figures at actual currency rates, * Includes non-recurring charges 24

25 Cash flow 2009 EUR million 2009 Result for the period* Adjustments* Change in working capital* Net financial items* Taxes* CASH FLOWS FROM OPERATING ACT Capital expenditure* Proceeds from selling fixed and other assets* Change in deposits CASH FLOWS FROM INVESTING Change in loans Dividends paid Hybrid bond CASH FLOWS FROM FINANCING Change in liquid assets FREE CASH FLOW* All figures at actual currency rates 25

26 Net debt development EUR million Q2 08 Q3 08 Q All figures at actual currency rates 26

27 Liquidity and refinancing Debt maturity structure as of March 31, 2009 EUR million < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5-7 years 7-12 years Private placements, bonds & other l/t loans Bank loans (drawn) Commercial Paper issuance Available committed loan facilities Aiming to maintain sufficient liquidity reserves as well as diversified debt maturity structure and funding sources Short-term funding backed up by committed facilities Net debt to EBITDA key financing restriction 27

28 Interest rate risk Interest rate risk management aims to reduce fluctuation of the interest charge by adjusting debt interest periods in the main borrowing currencies Net debt, MEUR Average interest fixing period, Currency as of March 31, 2009 years EUR USD AUD PLN GBP Other Total Average cost of debt was 5.2% as of March 2009 (5.7% in March ) A 1%-point increase / decrease in market interest rates would increase / decrease net interest expenses over the following 12 months with approximately EUR 3 million 28

29 Short term use of cash priorities Payment of dividends Debt reduction Possible divestment proceeds also applied to debt reduction Net debt to EBITDA development NET DEBT/EBITDA TARGET CORRIDOR 2.0 /08 Q2/08 Q3/08 Q4/08 /09 Short-term 29

30 Outlook 30

31 Outlook Full year sales outlook remains uncertain and pressure on margins is expected to increase during the course of the year Capital expenditure in 2009 is expected to be below EUR 100 million Short-term risks and uncertainties: Volatile raw material and energy prices as well as movements in currency translations are considered to be relevant short-term business risks and uncertainties in the Group s operations Material changes in general economic conditions or in the financial markets could have an adverse effect on the implementation of the Group s strategy and on its business performance and earnings 31

32 Key focus areas in the short-term Price and mix management Supply chain initiatives Control over costs and capital spending Continue capitalization of earlier made investments Industrial operations improvement Cash generation and net debt reduction Progress with strategic review and actions 32

33 Scheduled events July 23 Interim report January 1 June 30, 2009 October 22 Interim report January 1 September 30, 2009 Updates on the schedule: Investors» Calendar 33

34 Thank you for your attention! Investors