Solid profitability improvement, Q1 2015 in brief:
– Net sales were EUR 630 million (EUR 514 million)
– EBIT excluding non-recurring items (NRI) was EUR 50 million (EUR 38 million)
– EPS excluding NRI was EUR 0.33 (EUR 0.25)
– Comparable net sales growth was 5% in total and 6% in emerging markets
– Currency movements had a positive impact of EUR 53 million on the Group’s net sales
– Acquisition of Positive Packaging, a flexible packaging company operating in India, United Arab Emirates and Africa, was closed at the end of January and the business was consolidated into the Flexible Packaging business segment as of February 1, 2015.
Jukka Moisio, CEO of Huhtamäki Oyj:
“We had a good start to the year. All our business segments achieved organic growth and improved profitability. Our comparable net sales growth during the quarter was 5%. Net sales and earnings in North America and Flexible Packaging developed strongly. It is rewarding to see that the actions taken by our team in North America are bearing fruit. We are pleased with our net sales development in Europe, which was positive across business segments. On the other hand, growth in emerging markets at 6% did not entirely meet our expectations. The weakness was primarily due to China, whereas our businesses in Southeast Asia, Russia and South America continued to grow. The acquisition of Positive Packaging was finalized at the end of January and it contributed to net sales growth for two months. The integration is still in early stages, but we’re happy to report positive earnings from the business already for the first two months.
We sharpened our strategy and launched a renewed brand identity at the end of 2014. It’s been delightful to note that the new Huhtamaki has been well received amongst our customers, employees, investors and other stakeholder groups. We’ll continue to implement our new strategy and aim to achieve net sales and profitability growth.”
Financial review Q1 2015
The Group’s comparable net sales growth was 5% during the quarter. All business segments contributed to the net sales growth. Growth was strongest in the North America business segment. Comparable growth in emerging markets was 6%. The growth in emerging markets was driven by continued good development especially in Russia, Southeast Asia and South America, whereas negative net sales development in China continued. The Group’s net sales grew to EUR 630 million (EUR 514 million). In addition to organic growth, there was a significant positive impact on net sales from the Positive Packaging acquisition as well as the foreign currency translation, which was EUR 53 million compared to the 2014 exchange rates. The majority of the currency impact came from the strengthening of the US dollar versus euro.
Outlook for 2015
The Group’s trading conditions are expected to remain relatively stable during 2015. The good financial position and ability to generate a positive cash flow will enable the Group to continue to address profitable growth opportunities. Capital expenditure is expected to be at the same level as in 2014. Majority of the investments are expected to be directed to enhance growth in the emerging markets.
In the picture: Jukka Moisio, CEO of Huhtamäki Oyj.