Huhtamäki Oyj’s Interim Report January 1–March 31, 2023: Stable development in a challenging market

Q1 2023 in brief
• Net sales stable at EUR 1,047 million (EUR 1,050 million)
• Adjusted EBIT was EUR 92 million (EUR 98 million); reported EBIT was EUR 87 million (EUR 94 million)
• Adjusted EPS was EUR 0.51 (EUR 0.63); reported EPS was EUR 0.47 (EUR 0.63)
• Comparable net sales growth was 2% at Group level and 0% in emerging markets
• The impact of currency movements was EUR -0 million on the Group’s net sales and EUR 1 million on EBIT

Charles Héaulmé, President and CEO
“The first quarter of 2023 developed in line with the trend seen in the latter part of 2022, with continued inflation affecting consumption across categories and geographies. Order levels were also impacted by destocking in the value chain and the return of normal seasonality, which has impacted the timing of demand.

Our business performance in the first quarter remained consistent with previous quarters, delivering solid revenue and profit. Despite continued pressure on volumes, our comparable net sales increased by 2% compared to Q1 2022, driven by the Fiber Packaging and Foodservice Europe-Asia-Oceania segments, which performed well. The North America segment faced a return to normal seasonality and delivered strong profit growth. The Flexible Packaging segment continued to face a decrease in demand, particularly impacted by inflation in emerging markets. The Group’s adjusted EBIT at EUR 92 million, decreased against prior year, due to lower sales and the divestment of operations in Russia. Free cash flow improved significantly, reaching EUR 43 million, driven by an improvement in working capital. In line with our 2030 strategy, we have continued to invest for growth and innovation. As the market environment is challenging, we are focused on protecting our profitability and ensuring cash flow. Therefore, we have accelerated the implementation of operational efficiency measures.

In March, we published our updated 2030 growth strategy and long-term financial ambitions at our Capital Markets Day. The global packaging industry is undergoing a substantial transformation, as a result of changing consumer expectations. This is driving a greater focus on sustainable alternatives and innovative functionalities. This will require technology driven innovations and with our portfolio and technology base, provides significant profitable growth opportunities for us. To capitalize on this momentum, our strategy focuses on four areas: scaling up our profitable core businesses, developing our blueloop™ sustainable innovation platform in partnership with customers, driving world-class operational performance across our global footprint and investing in strategic capabilities to successfully drive our global transformation journey.

I want to thank our people for their passionate commitment to deliver on our growth strategy and reach our 2030 North Star to be the first choice in sustainable packaging solutions. Our focus on technology-driven innovation and ability to operate at scale differentiates and positions us well to leverage the growth opportunities in packaging for food and everyday necessities everywhere.”
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