Huhtamaki OYJ’s First half-yearly report 2024’s Executive Summary
Global Supermarket News – July 26, 2024 – Huhtamaki Oyj’s half-yearly report for the period of January 1 to June 30, 2024 has published. The company’s operational profitability continued to improve in spite of a slight decline in net sales. This outcome was largely driven by several strategic initiatives such as efficiency schemes and sustainable packaging solutions.
Key Financial Metrics of Huhtamaki OYJ’s half-yearly report 2024
| Financial Metric | Q2 2024 | Q2 2023 | First Half (H1) 2024 | First Half (H1) 2023 | Change -H1 (First Half) |
|---|---|---|---|---|---|
| Net Sales | EUR 1,038 million | EUR 1,052 million | EUR 2,041 million | EUR 2,099 million | -3% |
| Comparable Net Sales Growth | -1% | -1% | -2% | -2% | – |
| Adjusted EBIT | EUR 106 million | EUR 93 million | EUR 204 million | EUR 185 million | +11% |
| Reported EBIT | EUR 105 million | EUR 55 million | EUR 182 million | EUR 142 million | +28% |
| Adjusted EPS | EUR 0.63 | EUR 0.55 | EUR 1.17 | EUR 1.06 | +12% |
| Reported EPS | EUR 0.62 | EUR 0.24 | EUR 0.97 | EUR 0.72 | +35% |
| Free Cash Flow | EUR 54 million | EUR 28 million | EUR 92 million | EUR 71 million | +30% |
Huhtamaki OYJ’s CEO’s Review on First Half-Yearly Report 2024
According to Charles Héaulmé the President and CEO of Huhtamaki this year had a steady business environment in the first six months. A rise was seen in the demand for prepacked products but with significant differences between regions and categories being noted.Inflationary pressures as well as pricing challenges along value chains were still present however profitability was increased through efficiencies that are strategic management by Huhtamaki.
Segment Performance
Foodservice Europe-Asia-Oceania
- Net Sales: EUR 493.4 million (H1 2024), EUR 527.1 million (H1 2023) -6%
- Adjusted EBIT: EUR45.3million(H1 2024),EUR46.2million(H1 2023)-2%
- Impact: Lower sales volumes due to high inflation on food products, affecting demand, especially in quick service restaurants.
North America
- Net Sales: EUR714.3 million (H12024), EUR731.4 million (H12023) -2%
- Adjusted EBIT: EUR100.9million (H12024),EUR87.9million (H12023)+15%
- Impact: Consistent sales volumes with operational and overhead cost actions improving profitability.
Flexible Packaging
- Net Sales: EUR661.1 million (H12024),EUR677.Omillon(H12023)-2%
- Adjusted EBIT: EUR42.Smillion(Hl2024),EUR37Smillion(Hl2023)+14%
- Impact: Higher sales volumes in South-East Asia and Oceania, offset by unfavorable currency movements and lower pricing.
Fiber Packaging
- Net Sales: €176,7m(HI2024 €173,Omiilion€(HI 2023 +2%)
- Adjusted EBIT: €20+mmillion(HllO24) €19S.s(million€)(HI1023 +3%)
- Impact: Increased sales volumes and higher prices, mainly in Europe.
Sustainability Initiatives
Huhtamaki made significant advances towards its sustainability goals for the year 2030. The company achieved strong results in safety as indicated by its Global Sustainability and Safety Index(GSSI). Renewable energy targets were supported through electricity generation from a Virtual Power Purchase Agreement(VPPA)located in Spain which is owned by Huhtamaki. There was an improvement of four points in the Ecovadis score reflecting greater involvement with suppliers and reporting on environmental impacts by them.
Financial Feedback
- Capital Expenditure: 85 million Euros (H1 2024), 134 million Euros (H1 2023) – down by 37%.
- Net Debt: EUR 1,255 million (H1 2024), reflecting a gearing ratio of around 0.64.
- Free Cash Flow: EUR 92 million (H1 2024), led by increased profitability and reduced capital expenditure.
Significant Developments and Business Strategies
- Efficiency Programme: An ongoing efficiency programme of €100m was initiated in 2023 to focus on sourcing, waste elimination, labour productivity as well as manufacturing footprint optimization.
- Consolidation of Production Footprint: Closed factories and consolidated operations in China, Malaysia and UAE for better efficiency.
In Summary, Huhtamaki’s strong performance during half year of 2024 amidst tough trading conditions is a testament to its commitment towards sustainability and efficiency improvement. The company’s proactive efforts have resulted into higher profits and improved competitiveness which lays firm ground for future growths