Huhtamäki Oyj's Results January 1-December 31, 2017 A year of continued investment
HUHTAMÄKI OYJ FINANCIAL STATEMENT RELEASE 14.2.2018 AT 8:30
Huhtamäki Oyj's Results January 1-December 31, 2017: A year of continued investment
Q4 2017 in brief
Net sales grew to EUR 745 million (EUR 732 million)
Adjusted EBIT was EUR 65 million (EUR 65 million); EBIT EUR 62 million (EUR 64 million)
Adjusted EPS improved to EUR 0.51 (EUR 0.44); EPS EUR 0.47 (EUR 0.42)
Comparable net sales growth was 5% in total and 9% in emerging markets
Currency movements had a negative impact of EUR 35 million on the Group's net sales and EUR 3 million on EBIT
FY 2017 in brief
Net sales grew to EUR 2,989 million (EUR 2,865 million)
Adjusted EBIT was EUR 268 million (EUR 268 million); EBIT EUR 264 million (EUR 266 million)
A record adjusted EPS of EUR 1.90 (EUR 1.83); a record EPS of EUR 1.86 (EUR 1.81)
Comparable net sales growth was 3% in total and 4% in emerging markets
Currency movements had a negative impact of EUR 19 million on the Group's net sales and EUR 1 million on EBIT
Capital expenditure of EUR 215 million for future growth
Free cash flow was EUR 56 million (EUR 100 million)
The Board of Directors proposes a dividend of EUR 0.80 (0.73) per share
|EUR million||Q4 2017||Q4 2016||Change||FY 2017||FY 2016||Change|
|Adjusted EBITDA 1||95.3||95.2||0%||389.7||381.8||2%|
|Adjusted EBIT 1||65.0||65.4||-1%||267.7||267.9||-0%|
|Adjusted EPS 2, EUR||0.51||0.44||16%||1.90||1.83||4%|
|Free cash flow||50.3||21.7||132%||55.5||100.3||-45%|
1 Excluding IAC of EUR -3.4 million in Q4 2017 (EUR -1.5 million in Q4 2016) and EUR -3.4 million in FY 2017 (EUR -1.7 million in FY 2016).
2 Excluding IAC of EUR -4.8 million in Q4 2017 (EUR -1.5 million in Q4 2016) and EUR -4.8 million in FY 2017 (EUR -1.7 million in FY 2016).
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:
"Huhtamaki had a good year in 2017. Comparable growth was 3% and adjusted earnings per share improved by 4% to a record EUR 1.90. Despite the headwinds in India growth in emerging markets was 4% and accelerated to 9% during the fourth quarter. The whole Huhtamaki Team did well in 2017 and I want to thank everyone for their contribution.
Foodservice Europe-Asia-Oceania and North America segments enjoyed positive momentum with increased net sales and good profitability. Flexible Packaging segment had net sales and profitability headwinds in India but the segment started to trade better towards the year-end.
We implemented our forward-looking investment program and at EUR 215 million our capital expenditure was 55% of Adjusted EBITDA. The most significant organic growth action in 2017 was constructing a new world class facility in Goodyear, Arizona, to serve the U.S. West Coast and Southwest markets. Parallel to the Arizona facility development we built new and expanded existing foodservice capabilities in China, Poland, Spain and Russia. In the Flexible Packaging segment we completed two new facilities in Eastern India, began building a new plant in Egypt, and extended our current operations in Thailand and Vietnam.
Our firepower and appetite for value-adding acquisitions remains high and we are ready to execute acquisitions when both strategic and financial justifications are met. In 2017 we made an important strategic acquisition with the purchase of International Paper's foodservice packaging operations in China. The acquisition, together with the consolidation of operations both in South and North China, gives us a footprint of three well-located and efficient manufacturing units and provides an excellent position to support our customers in the growing foodservice market of Greater China.
Reflecting the forward-looking investment program our free cash flow was EUR 56 million and our ROI and ROE were 13.6% and 17.0% respectively.
The business environment in 2017 was generally positive and we look optimistically towards 2018. Megatrends support demand for food-to-go and prepacked food packaging, and we are well on our way in building the best global food packaging network. Our philosophy is to improve continuously and therefore we develop our people, operations, and business competence to make Huhtamaki a world class company. In 2018 our key deliverable is to leverage our investments into accelerated growth while delivering our profit targets."
Financial review Q4 2017
The Group's comparable net sales growth was 5% during the quarter. Growth was strongest in the Flexible Packaging and Foodservice Europe-Asia-Oceania business segments driven by strong volume growth. The Group's comparable growth in emerging markets was 9%. Growth was strong in Eastern Europe, Middle East and Africa. Net sales in India grew also. The Group's net sales grew to EUR 745 million (EUR 732 million). Foreign currency translation impact on the Group's net sales was EUR -35 million (EUR -2 million) compared to 2016 exchange rates.
Net sales by business segment
|EUR million||Q4 2017||Q4 2016||Change||
Of Group in
|Elimination of internal sales||-4.2||-4.2|