Huhtamäki Reports Solid Organic, Acquisitive Growth in 1H 2016

Huhtamäki Oyj reported its 2Q and 1H 2016 fiscal results.
 
The Group’s comparable net sales growth was 6% during the second quarter of 2016. Strong growth in the North America and Foodservice Europe-Asia-Oceania business segments continued. Comparable growth in emerging markets was 9%. Growth was strongest in Eastern Europe and South Asia, led by good momentum both in Russia and in India. Net sales development turned marginally positive in China.
 
The Group’s net sales grew to €742 million (€714 million). Foreign currency translation impact on the Group’s net sales was €-28 million compared to 2015 exchange rates. The majority of the negative currency impact was due to weakening of major emerging market currencies, US dollar and pound sterling versus euro.
 
The Group’s earnings grew driven by strong profitability improvement in the North America business segment. Good development in the Foodservice Europe-Asia-Oceania and Flexible Packaging business segments contributed to the earnings growth, whereas Molded Fiber business segment’s earnings declined. The Group’s Adjusted EBIT were €77.8 million (€69.7 million) and reported EBIT €77.6 million (€51.2 million). Foreign currency translation impacted the Group’s profitability by €-3 million (€6 million).
 
The Group’s comparable net sales growth was 6% during the the first half of 2016. Growth was strongest in the North America and Foodservice Europe-Asia-Oceania business segments throughout the period. Comparable growth in emerging markets was 8%. Growth was strongest in Eastern Europe and South Asia. Net sales development was marginally positive in China.
 
The Group’s net sales grew to €1,414 million (€1,344 million). Foreign currency translation impact on the Group’s net sales was €-39 million compared to 2015 exchange rates. The majority of the negative currency impact came from the weakening of emerging market currencies versus euro.
 
The Group’s earnings also grew. Solid earnings improvement in the North America business segment was the main contributor to the earnings growth. Also the good development in the Flexible Packaging and Foodservice Europe-Asia-Oceania business segments supported earnings growth. The Group’s Adjusted EBIT were €135.6 million (€119.4 million) and reported EBIT €135.4 million (€96.8 million). Foreign currency translation impacted the Group’s profitability by €-4 million.Profit for the period was €99 million (€66 million).
 
“Our business did well during the second quarter, which is traditionally our high season,” said CEO Jukka Moisio. “The Group’s comparable growth was 6%. Trading conditions were relatively stable in mature markets of Western Europe and North America. In emerging markets, the like-for-like growth of 9% was led by good development in India, Eastern Europe and Southeast Asia, while conditions in certain markets of Africa were more challenging. Sales development in China was marginally positive.
 
“We continued to implement our strategy and targeted future growth through organic investments and acquisitions. We finalized three acquisitions during the first half of the year and the most recent one, Delta Print and Packaging, facilitated our entry into the folding carton packaging business also in Europe,” Moisio added. “Delta’s product range is complementary to our European foodservice offering and supports our customers’ future growth ambitions.
 
“Our profitability improvement in the second quarter was good and primarily driven by continued solid development in the North America segment. Earnings developed positively also in the Foodservice Europe-Asia-Oceania and Flexible Packaging segments. During the quarter we decided to take additional actions in the Foodservice Europe-Asia-Oceania segment to improve its competitiveness in China and New Zealand. Our profitability was all-time high with Adjusted EPS at €0.54 and 12-month rolling EBIT at 9.1% and ROI at 14.9% in the second quarter,” Moisio concluded.