Summary of first quarter results (against the same period in 2005)
* Net sales increased to EUR 566 million (+10%) driven by
volume growth
* Underlying group EBIT* EUR 41 million (EUR 33 million)
included a capital gain of EUR 3 million from the sale of the
Mexican molded fiber unit
* Performance in Americas in particular was strong, while still weak in selected European Rigid Consumer Goods units
* Change program is progressing according to schedule
* Board has confirmed the company's long term financial targets
volume growth
* Underlying group EBIT* EUR 41 million (EUR 33 million)
included a capital gain of EUR 3 million from the sale of the
Mexican molded fiber unit
* Performance in Americas in particular was strong, while still weak in selected European Rigid Consumer Goods units
* Change program is progressing according to schedule
* Board has confirmed the company's long term financial targets
| Key figures | Q1 | Q1 | Change, | |
| EUR million | 2006 | 2005 | % | 2005 |
| Net sales | 566 | 513 | 10 | 2 244 |
| EBIT - underlying* | 41 | 33 | 22 | 160 |
| EBIT margin % | 7,2 | 6,5 | - | 7,1 |
| EBIT - reported | 37 | 33 | 11 | 58 |
| EPS - reported | 0,24 | 0.20 | 20 | 0,07 |
| Free cash flow | -1 | 10 | - | 66 |
* The underlying EBIT includes a capital gain of EUR 3 million, but excludes restructuring charges of EUR 4 million in Q1 2006. No restructuring charges were recorded in Q1 2005. In 2005, restructuring charges amounted to EUR 70 million and the goodwill impairment charges were EUR 33 million.
In the first quarter, net sales increased by 10% to EUR 566 million. Sales were positively impacted by volume growth (+7%), currency translations (+3%) and price/mix changes (+1%), partly offset by the negative impact from ancillary operations (-1%). Sales growth was visible across the board: especially in the Americas (+23%), Asia-Oceania-Africa (+11%), and more moderately also in Europe (+4%).
In the first quarter, the underlying EBIT before corporate items increased by 24% to EUR 34 million (EUR 27 million), corresponding to an EBIT margin of 6.0% (5.3%). The improvement reflects the sustained recovery in the Americas, boosted further by a capital gain of EUR 3 million recorded from the sale of the Mexican molded fiber unit. At EUR 7 million, corporate net in the quarter was slightly higher than the EUR 6 million recorded in the same period last year. Hence, the underlying group EBIT increased by 22% to EUR 41 million (EUR 33 million), corresponding to an EBIT margin of 7.2% (6.5%). The reported EBIT of EUR 37 million includes restructuring charges of EUR 4 million.
Outlook for 2006
For the full year, the underlying EBIT is expected to show a
moderate improvement over 2005, despite decreasing unallocated corporate income in the second half of the year as well as the impact from divested units. The improvement will be based on cost savings, as well as profitable growth in selected markets. Volatile polymer-based raw material prices may put pressure on margins. The reported result will include most of the remaining EUR 10 million of charges related to the previously announced restructuring programs. Capital expenditure will be temporarily elevated to EUR 150 million
primarily driven by the announced expansion projects. This combined with restructuring related cash outflows will impact on free cash flow. Emphasis on performance management and capacity investments for growth will continue. Execution of the change program remains essential while maintaining positive business momentum.
moderate improvement over 2005, despite decreasing unallocated corporate income in the second half of the year as well as the impact from divested units. The improvement will be based on cost savings, as well as profitable growth in selected markets. Volatile polymer-based raw material prices may put pressure on margins. The reported result will include most of the remaining EUR 10 million of charges related to the previously announced restructuring programs. Capital expenditure will be temporarily elevated to EUR 150 million
primarily driven by the announced expansion projects. This combined with restructuring related cash outflows will impact on free cash flow. Emphasis on performance management and capacity investments for growth will continue. Execution of the change program remains essential while maintaining positive business momentum.
Long term financial targets
The Board has confirmed the company's updated long term financial targets. The company will concentrate on strengthening its position as a leading global consumer and specialty packaging supplier. The objective is for the company's earnings before interest and taxes (EBIT) margin to reach 9%. The return on investment (ROI) is targeted at 15%. The long term gearing target is around 100%. The
dividend policy will remain unchanged, the target being an average dividend payout ratio of 40% of the profit for the period, nevertheless taking into consideration the company's financial performance, as well as its investment and development needs.
dividend policy will remain unchanged, the target being an average dividend payout ratio of 40% of the profit for the period, nevertheless taking into consideration the company's financial performance, as well as its investment and development needs.
This report is unaudited and has been prepared in accordance with IAS 34 Interim Financial Reporting. Tables on financial statements including the income statement, balance sheet, cash flow and changes in shareholders' equity are enclosed with this report.
For further information, please contact:
Mr. Heikki Takanen, CEO, tel. +358-9-6868 8301
Mr. Sakari Ahdekivi, CFO, tel. +358-9-6868 8501
Ms. Kia Aejmelaeus, Investor Relations Manager, tel. +358-9-6868 8519 or mobile +358-40-765 4616
Ms. Taina Erkkilä, Group Vice President Communications,
tel. +358-9-6868 8376 or mobile +358-50-577 4059
Mr. Heikki Takanen, CEO, tel. +358-9-6868 8301
Mr. Sakari Ahdekivi, CFO, tel. +358-9-6868 8501
Ms. Kia Aejmelaeus, Investor Relations Manager, tel. +358-9-6868 8519 or mobile +358-40-765 4616
Ms. Taina Erkkilä, Group Vice President Communications,
tel. +358-9-6868 8376 or mobile +358-50-577 4059
The Q2 2006 interim report will be published on July 21, 2006.
HUHTAMÄKI OYJ
Group Communications
Group Communications
Invitation to join Huhtamaki's Interim Report, January 1 - March 31, 2006 results presentation
At 11:00 Finnish time a conference for investors, analysts and media will be held at our head office, address Länsituulentie 7, Espoo. CEO Heikki Takanen and CFO Sakari Ahdekivi will present the results, after which a buffet lunch is served.
At 16:00 Finnish / 14:00 London / 09:00 New York time a conference call for investors and analysts will start with a management presentation, followed by a question and answer session. The dial-in number for participants is +44 20 7162 0025 and the reference code is Huhtamaki. Afterwards you can also listen to a replay of the conference call in the form of an audio webcast.
All materials will be available at our website www.huhtamaki.com.
Please click the below link to see the full length Interim Report.
