In This Article:
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Revenue: Sales decreased by 1% in Q2 and 3% in the first semester.
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Adjusted EBIT Margin: Reached 10.2% in Q2 and 10% for the first semester, up from 8.8% a year ago.
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Profit Growth: Adjusted EBIT grew by 14% in Q2.
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CapEx: Reduced by 37% in the first semester, with expectations to be below EUR 300 million for the full year.
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Net Debt: EUR 1.255 billion, with a net debt to EBITDA ratio of 2 times.
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Free Cash Flow: Supported by lower capital expenditures and asset sales.
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Foodservice Europe-Asia-Oceania Sales: Decreased by 6% in Q2.
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North America Sales: Decreased by 2% in Q2, primarily due to pricing.
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Flexible Packaging Sales: Grew by 2% in Q2.
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Fiber Packaging Sales: Increased by 3% in Q2.
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Adjusted EPS: Improved in line with operational earnings.
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Currency Impact: Negative impact of EUR 6 million on top line in Q2.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Huhtamaki Oyj (STU:HUKI) reported a 14% growth in adjusted EBIT, with a margin increase to 10.2% in Q2 2024, indicating strong profitability improvements.
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The company's cost-saving initiatives, part of a EUR100 million program, are ahead of schedule, contributing significantly to profit expansion.
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North America remains a strong market for Huhtamaki Oyj (STU:HUKI), with a notable EBIT margin improvement from 12% to 14%, driven by favorable cost conditions and strategic investments.
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The flexible packaging segment is showing positive signs with volume growth and a slight margin increase, reflecting the success of strategic innovations.
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Sustainability efforts are progressing well, with significant improvements in renewable electricity usage and waste reduction, aligning with long-term environmental goals.
Negative Points
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Sales decreased by 1% in Q2 2024, with a 3% decline in the first semester, impacted by high inflation and geopolitical tensions affecting demand.
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The on-the-go foodservice category experienced a temporary decline due to consumer arbitration amid high inflation in the hospitality sector.
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The fiber packaging segment faced setbacks due to a fire in Australia and avian flu in South Africa, impacting growth potential.
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Pricing pressure remains a challenge, particularly in the flexible packaging segment, due to competitive market conditions.
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The geopolitical situation, including the Gaza conflict and Red Sea crisis, has negatively impacted logistics and international trade, affecting sales in certain regions.
Q & A Highlights
Q: Can you quantify the impact of the boycott of global brands in the Middle East on your top line, and when do you expect this impact to normalize? A: The boycott, particularly affecting the fiber foodservice segment, began to materialize at the end of Q4 last year. We expect the impact to normalize by Q1 2025. At the Group level, the impact is not material but is a low single-digit impact on the foodservice segment's overall volume. - Charles Heaulme, CEO