Huhtamäki Oyj’s Half-yearly Report January 1-June 30, 2017: Net sales grew and profitability was at a good level

Q2 2017 in brief
•Net sales grew to EUR 772 million (EUR 742 million)
•Adjusted EBIT was EUR 75.6 million (EUR 77.8 million); EBIT EUR 75.6 million (EUR 77.6 million)
•Adjusted EPS was EUR 0.52 (EUR 0.54); EPS EUR 0.52 (EUR 0.53)
•Comparable net sales growth was 1% in total and -1% in emerging markets; Soft growth was due to significant net sales decline in India, where the Goods and Services Tax (GST) reform had a temporary adverse impact on demand
•Currency movements had a positive impact of EUR 17 million on the Group’s net sales and EUR 2 million on EBIT

H1 2017 in brief
•Net sales grew to EUR 1,511 million (EUR 1,414 million)
•Adjusted EBIT was EUR 138.4 million (EUR 135.6 million); EBIT EUR 138.4 million (EUR 135.4 million)
•Adjusted EPS was EUR 0.95 (EUR 0.94); EPS EUR 0.95 (EUR 0.93)
•Comparable net sales growth was 2% in total and 1% in emerging markets
•Currency movements had a positive impact of EUR 36 million on the Group’s net sales and EUR 4 million on EBIT
•Capital expenditure increased to EUR 95 million (EUR 56 million) and free cash flow weakened to EUR -12 million (EUR 38 million)

Jukka Moisio, CEO: “Our second quarter comparable net sales growth was 1%. In Europe our business grew well, driven by healthy demand. Quarterly growth in North America was modest due to capacity constraints, which we are addressing with on-going investments. The Flexible Packaging segment’s net sales development was negative due to significant net sales decline in India, where the GST reform weakened demand temporarily. The Group’s comparable growth in emerging markets was negative 1%, and without the Indian impact it would have been approx. 5%.

Our profitability was good and we had the second best quarter in the company history although we did not break the record achieved in Q2 2016. Profitability improved in the Foodservice Europe-Asia-Oceania segment and remained at the previous year level in the Fiber Packaging segment. The North America segment’s earnings were good, even if not reaching the high of the second quarter in 2016. The Flexible Packaging segment’s earnings were impacted by net sales decline in India.

In 2017, we pursue our growth strategy by building new capabilities to serve our customers better in 2018 and beyond. Our project in building a new manufacturing unit in Goodyear, Arizona, the U.S., is proceeding as planned. We will start to ramp up manufacturing of a full range of paper packaging products to the southwest and west coast markets towards the end of 2017. In addition, we expand in China by investing in our foodservice packaging operations in South China, and by acquiring two foodservice packaging units in Shanghai and Tianjin from International Paper. Despite temporary headwinds, particularly in India, we see good growth opportunities in food and drink packaging.”

Financial review Q2 2017:  The Group’s comparable net sales growth was 1% during the quarter. Strong growth in the Fiber Packaging business segment continued, and positive development in the Foodservice Europe-Asia-Oceania and North America business segments supported the Group’s comparable growth. The Flexible Packaging business segment’s net sales development was negative due to significant net sales decline in India, where the GST reform temporarily weakened demand for flexible packaging. This drew the Group’s comparable growth in emerging markets down to -1%. Growth was solid in Eastern Europe, and at a good level also in Southeast Asia. The Group’s net sales grew to EUR 772 million (EUR 742 million). Foreign currency translation impact on the Group’s net sales was EUR 17 million (EUR -28 million) compared to 2016 exchange rates. Majority of the positive impact came from the US dollar and Indian rupee, while the impact from pound sterling and certain emerging market currencies was negative.

Financial review H1 2017: The Group’s comparable net sales growth was 2% during the first half of the year with a positive contribution from all business segments. Comparable growth in emerging markets was 1%. Growth was strongest in Eastern Europe and Southeast Asia, while net sales declined significantly in India. The Group’s net sales grew to EUR 1,511 million (EUR 1,414 million). Foreign currency translation impact on the Group’s net sales was EUR 36 million (EUR -39 million) compared to 2016 exchange rates. The majority of the positive impact came from the US dollar, Russian ruble and Indian rupee, while the impact from pound sterling and certain emerging market currencies was negative.
more detail at: http://www.huhtamaki.com/-/huhtamaki-oyj-s-half-yearly-report-january-1-june-30-2017-net-sales-grew-and-profitability-was-at-a-good-level

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