Huhtamäki Oyj’s Interim Report January 1–March 31, 2022: Strong start to the year

Q1 2022 in brief:
• Net sales increased 31% to EUR 1,050 million (EUR 802 million)
• Adjusted EBIT was EUR 98 million (EUR 77 million); reported EBIT was EUR 94 million (EUR 72 million)
• Adjusted EPS was EUR 0.63 (EUR 0.49); reported EPS was EUR 0.63 (EUR 0.45)
• Comparable net sales growth was 19% at Group level and 19% in emerging markets
• The impact of currency movements was EUR 35 million on the Group’s net sales and EUR 3 million on EBIT

Charles Héaulmé, President and CEO
“Huhtamaki had a strong start to the year, despite challenging market conditions. Overall, the demand was strong, in an operating environment affected by continued supply chain tensions and very high inflation across the board. The geopolitical development with the war in Ukraine and continued COVID-19 pandemic added complexity.

Net sales increased by 31% against the same period 2021, and by 19% in comparable terms. It was driven by both improved pricing and increased sales volumes. We have continued to mitigate impact of inflation, which is visible in all our major input costs, including raw materials, freight costs, energy and labor. The volume growth improved operational efficiency and actions to mitigate inflation had a positive impact on profitability, with the adjusted EBIT increasing by 27%, broadly in line with net sales. While we have been able to handle the impact of inflation, it continues to put pressure on the business performance.

The first quarter has been dominated by geopolitical tensions and the war in Ukraine. We condemn the war in the strongest possible terms and stopped all our investments to Russia immediately after the Russian invasion of Ukraine. We consider that the current evolution of the situation and the long-term outlook in Russia will prevent the realization of our growth strategy and ambitions in the country. As a consequence, we have decided to initiate the divestiture process of our operations in Russia. We will continue to prioritize investments that capture the significant growth opportunities in the rest of the world, in line with our global ambitions and 2030 Strategy.

As a result of focus on our 2030 strategy, we have taken several steps on our sustainability journey, with the intent to reach carbon-neutral production by 2030 while optimizing usage of resources, including energy, water, and waste. During the first quarter, we signed a Virtual Power Purchase Agreement in the United States, covering 30% of our local electricity usage. We also installed the first solar panel arrays at our factories in Guangzhou and Shanghai in China, covering an initial 10% of the two factories’ energy use. In addition, we continue investments into innovative, sustainable products and business expansion. For instance, we are stepping up production of advanced smooth molded fiber packaging in Alf, Germany, to provide plastic free packaging solutions.

Our strong performance highlights the resilience of our diversified portfolio and global presence. It also underlines the ability of our company to manage adverse conditions. I want to thank our entire team for their great work in demanding times and during my absence in the first quarter. I am confident that we will continue to successfully deliver on our long-term ambition.”
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