Huhtamäki Oyj’s Interim Report January 1–September 30, 2020: Strong profitability improvement

Q3 2020 in brief
• Net sales decreased 1% to EUR 847 million (EUR 855 million)
• Adjusted EBIT was EUR 86 million (EUR 72 million); reported EBIT was EUR 65 million (EUR 68 million)
• Adjusted EPS was EUR 0.56 (EUR 0.45); reported EPS was EUR 0.43 (EUR 0.41)
• Comparable net sales growth was 2% at Group level and -2% in emerging markets
• The impact of currency movements was EUR -38 million on the Group’s net sales and EUR -4 million on EBIT

Q1-Q3 2020 in brief
• Net sales decreased 1% to EUR 2,489 million (EUR 2,524 million)
• Adjusted EBIT was EUR 229 million (EUR 218 million); reported EBIT was EUR 217 million (EUR 213 million)
• Adjusted EPS was EUR 1.46 (EUR 1.40) reported EPS was EUR 1.40 (EUR 1.36)
• Comparable net sales growth was -1% at Group level and -6% in emerging markets
• The impact of currency movements was EUR -37 million on the Group’s net sales and EUR -3 million on EBIT

Charles Héaulmé, President and CEO
“The COVID-19 pandemic continued to dominate the news flow and everyday life in the third quarter of 2020. We remained focused on safeguarding the health and safety of our employees and business continuity throughout the organization. Whilst parts of our business, particularly foodservice, were still substantially impacted, we have seen a limited recovery during the third quarter. Demand for food on-the-go products has gradually improved, but it is still lower than in 2019. The significant gap in consumption in restaurant services is partly compensated by the fast-increasing trend in food delivery. On the other hand, demand for food on-the-shelf products has remained strong throughout the crisis. In North America, the increased in-home consumption continued to support retail tableware and consumer goods sales. Growth in the Fiber Packaging segment continued to be driven by high demand for eggs and continued substitution of plastics. In the Flexible Packaging segment, the supply chain disruptions suffered in India and UAE during the second quarter eased during the third quarter, although we did not see fully the recovery to a normal level of logistics and consumption.

Our resilient and diversified portfolio continued delivering solid performance in the third quarter, with a comparable net sales growth of 2%. On Group level, comparable net sales from the beginning of the year declined -1% compared to 2019. The adjusted EBIT margin in the third quarter increased to 10.1%, improving 1.6 percentage-points compared to the same period last year. Year to date it increased from 8.7% in 2019 to 9.2%. The improvement in profitability reflects favorable mix impact and our continued focus on costs and efficiency.

During the quarter, the Board of Directors decided to pay a dividend of EUR 0.89 per share for the fiscal year 2019. The dividend has increased every year since 2009, in line with Huhtamaki’s growth trajectory.

In March, we had introduced our 2030 strategy and laid out high ambitions for this decade. We are focused on delivering growth, improving competitiveness, developing talent, and embedding sustainability in everything we do. I am pleased to see that our work towards these ambitions is proceeding positively, albeit with some challenges and potential delays related to the current crisis. Our determination to strengthen and embed sustainability across products and operations has already yielded results. This is also visible in our stakeholders’ evaluation of Huhtamaki as a company with a strong commitment to sustainability.”
details at: https://www.huhtamaki.com/en/media/media/stock-exchange-release/2020/huhtamaki-oyjs-interim-report-january1september30-2020-strong-profitability-improvement/

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