Huhtamäki Oyj’s Interim Report January 1-September 30, 2017: Continued comparable growth

Q3 2017 in brief
• Net sales grew to EUR 732 million (EUR 719 million)
• EBIT was EUR 64.3 million (EUR 66.9 million)
• EPS was EUR 0.44 (EUR 0.46)
• Comparable net sales growth was 4% in total and 5% in emerging markets
• Currency movements had a negative impact of EUR 21 million on the Group’s net sales and EUR 2 million on EBIT

Q1-Q3 2017 in brief
• Net sales grew to EUR 2,243 million (EUR 2,134 million)
• Adjusted EBIT was EUR 202.7 million (EUR 202.5 million); EBIT EUR 202.7 million (EUR 202.3 million)
• Adjusted EPS was EUR 1.39 (EUR 1.39); EPS EUR 1.39 (EUR 1.39)
• Comparable net sales growth was 3% in total and 2% in emerging markets
• Currency movements had a positive impact of EUR 16 million on the Group’s net sales and EUR 2 million on EBIT
• Capital expenditure increased to EUR 144 million (EUR 95 million) and free cash flow reduced to EUR 5 million (EUR 79 million)

Jukka Moisio, CEO: “Our comparable net sales growth returned to 4% during the third quarter. In emerging markets comparable growth was 5% despite net sales still declining in India. At the end of the quarter our net sales in India started to grow again as the demand for flexible packaging began to recover from the impact of Goods and Services Tax (GST) implementation.

Our profitability remained at a solid level but was affected by higher costs especially in the North America segment. In addition to costs related to major on-going investments the segment’s distribution and resin costs were higher due to hurricane impact. The Foodservice Europe-Asia-Oceania segment’s profitability held up well despite adverse product mix and the impact of weaker pound sterling on our UK business. The Flexible Packaging segment’s net sales growth accelerated at the end of the quarter.

Three major quick-service restaurant customers recognized our North America segment with special awards for delivering outstanding service and design. This is a great credit to our North American foodservice team, reflecting our continued investment in our people and capabilities and gives us confidence our decision to invest in new capacity is well-timed. Setting up the new manufacturing unit in Goodyear, Arizona, is progressing as planned and we expect manufacturing activities to begin initial ramp-up in the fourth quarter. In China the acquisition of International Paper’s foodservice packaging operations was closed during the quarter and the integration activities have started. This together with the modernization of our South China manufacturing operations makes us well positioned to serve the Greater China market.

Towards the end of the year we are completing the major expansions in the US and China. At the same time our major market India has started to recover from implemented reforms. We have work to do but the foundation for future progress is good.”
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