Solid year in a gradually improved market
Q4 2024 in brief
- Net sales increased 2% to EUR 1,059 million (EUR 1,033 million)
- Comparable net sales growth at Group level was 3%
- Reported EBIT was EUR 95 million (EUR 146 million); adjusted EBIT was EUR 110 million (EUR 108 million)
- Reported EPS was EUR 0.61 (EUR 0.83); adjusted EPS was EUR 0.68 (EUR 0.68)
- The impact of currency movements on the Group's net sales was EUR -2 million and EUR -0 million on EBIT
Q1-Q4 2024 in brief
- Net sales decreased 1% to EUR 4,126 million (EUR 4,169 million)
- Comparable net sales growth at Group level was -0%
- Reported EBIT was EUR 372 million (EUR 381 million); adjusted EBIT was EUR 417 million (EUR 393 million)
- Reported EPS was EUR 2.14 (EUR 1.97); adjusted EPS was EUR 2.48 (EUR 2.32)
- The impact of currency movements on the Group's net sales was EUR -37 million and EUR -4 million on EBIT
- Capital expenditure was EUR 248 million (EUR 319 million)
- Free cash flow was EUR 216 million (EUR 321 million)
- The Board of Directors proposes a dividend of EUR 1.10 (1.05) per share
President and CEO’s review
For Huhtamaki, 2024 was a solid year, with improved safety performance and increased profitability. In the first half of the year, demand was muted in many markets. The second half saw gradual recovery, with variations across categories and regions. Demand for pre-packed food, especially egg packaging, increased, and flexible packaging saw gains in a volatile market. Food on-the-go volumes remained subdued, particularly for coffee chains, due to high prices caused by inflation. The North American foodservice market performed better than other regions. The ongoing Middle East conflict affected global brands in some Middle Eastern and Asian markets throughout the year.
In Q4, comparable net sales increased by 3%. Sales volumes growth was supported by customers’ promotional activities. We improved our profitability as the adjusted EBIT margin reached 10.4% and adjusted EBIT grew by 3% to EUR 110 million.
For the full year 2024, comparable net sales remained at the previous year’s level. Sales prices decreased due to a pass-through of lower raw material prices, while volumes increased slightly. Despite the muted topline development, our adjusted EBIT increased by 6% and the margin increased to 10.1%. Free cash flow reached 216 million, driven by higher profit and lower investments, still investing in growing the profitable core. On the other hand, free cash flow in the comparison period was supported by a material decrease in working capital.
Throughout the year, we made progress on the strategic priorities. Our main focus was on improving competitiveness. Here, our key initiatives were built around our program to achieve EUR 100 million in cost savings. The program contributed to our performance throughout the year, and achieved savings of appr. EUR 76 million. The actions we took early in the program supported achieving the planned savings at an accelerated pace. The cost savings were essential to compensate for cost inflation. We expect to achieve the EUR 100 million savings target and close the program ahead of schedule, and with lower costs than originally anticipated.
While focusing on competitiveness, we continued to invest in innovation. We introduced new paperboard solutions with reduced plastic coating and paperboard-based packaging for FMCG products like ice cream, replacing plastic. We also expanded production of recyclable flexible packaging. These innovations support our sustainability agenda. We also made progress in our sustainability performance, for example, by increasing our use of renewable energy. Sustainability remains a top priority moving forward.
We have also strengthened our balance sheet. At the end of the year, our net debt to adjusted EBITDA was at the lower end of our target range of 2-3x, allowing for organic and inorganic growth. Based on our positive financial development, the Board of Directors proposes a dividend of EUR 1.10 per share. If approved, this would mark the 16th consecutive year of dividend growth, highlighting the long-term success of our business. We have a strong foundation to reach our financial ambitions and continue to deliver on our strategic priorities.
I am excited to have taken on the position as President and CEO of Huhtamaki. I know the company well and have always appreciated its ability to innovate, develop and drive world class commercial and operational results. I am happy to see an improving trend in 2024 and am determined to drive performance improvement. This is made possible by the dedication of our committed teams. I want to thank our employees, customers, suppliers, and all other stakeholders for their collaboration and trust.
Ralf K. Wunderlich
President and CEO
Source: Huhtamäki
