The group’s net sales grew to €786 million in the second quarter of 2018, with comparable net sales growth if 6% during the quarter, with all segments contributing. Net sales growth was strong in the Flexible Packaging and Foodservice Europe-Asia-Oceania business segments. Comparable growth in emerging markets was 10%. Strong growth in India, Eastern Europe, and Middle East and Africa continued. In 2Q 2018, Huhtamaki’s adjusted EBIT was €70.2 million and EBIT was €79.7 million.
“Our second quarter comparable net sales growth was good at 6%. In the emerging markets growth was 10%,” said CEO Jukka Moisio. “All segments contributed to positive development and Flexible Packaging and Foodservice Europe-Asia-Oceania segments reported highest growth. In reported sales, which includes the contribution from the three acquisitions made during the quarter (Ajanta Packaging, Tailored Packaging and Cup Print Unlimited), negative currency conversion reduced net sales by €48 million (6%) resulting in 2% growth.
“Our profitability remained solid despite a decline compared to 2017,” Moisio added. “Currency conversion weakened our EBIT by €4 million. Foodservice Europe-Asia-Oceania and Flexible Packaging segments improved their profitability while North America segment had negative margin development due to higher distribution costs and start-up costs of the newly-invested Goodyear, AZ, facility. While we are pleased with the growth we will take additional actions to improve profitability. Our net sales with global key accounts have progressed well with growth rates above our average growth. Organic investments and the three acquisitions made in the second quarter are expected to deliver continued strong net sales momentum in the coming quarters.”
Moisio noted that the Single Use Plastics (SUP) proposal was published by the European Commission at the end of May. This proposes to ban single use plastics cutlery, plates, stirrers and straws and introduce labelling requirements, to help reduce marine pollution.
“As the legislation stands, the products that are proposed to be banned make less than 2% of our Foodservice business in Europe and can for the most part be replaced with alternative paper-based products,” he observed. “As a converter with innovations capabilities in many packaging materials and with the growing interest in replacing plastic with alternative materials, we are well placed to continue to work with our customers and their consumers to respond to their demands. Already now, the majority of our products are fiber-based.”