In 2006, market demand for Huhtamaki’s consumer
packaging remained stable in the mature markets and continued robust in
the emerging markets, which represented approximately 17% of Group net
sales.
The underlying EBIT* was largely in line with expectations, excluding
weaker than anticipated profitability within the Rigid businesses in
Europe and Oceania. In the Americas net sales were sustained on a good
level, while profitability improved significantly. The strong growth in
net sales in the Flexibles and Films businesses and in the emerging
markets as a whole had a positive result.
The implementation of change programs continued in 2006. Towards the
end of the year the emphasis shifted to developing attractive growth
platforms and accelerating profitable growth.
Business review by region
Net sales were EUR 2,275.6 million (+2% compared to year 2005). Sales
were positively impacted by volume growth (+2%) with minor effect from
price/mix changes and currency translations. The geographical
distribution of sales was the following: Europe 52%, Americas 31% and
Asia-Oceania-Africa 17%.
Raw material prices remained on a high level in 2006. The prices showed
a clear increase compared to the average level of the previous year and
peaked in October. Energy costs also increased from the previous year’s
level.
Financial review
In 2006 the underlying EBIT before corporate items decreased by 3% to
EUR 138.1 million (EUR 142.2 million), corresponding to an EBIT margin
of 6.1% (6.4%). This reflects weak development in certain Rigid units
in Europe and Oceania partly compensated for by improved profitability
in the Americas and sustained growth in the Flexibles and Films
businesses, as well as in the emerging markets.
Corporate net for the year was slightly higher at EUR 19.5 million (EUR
18.0 million). Hence the underlying group EBIT remained flat at EUR
157.6 million (EUR 160.2 million), corresponding to an EBIT margin of
6.9% (7.2%). The reported EBIT of EUR 145.5 million includes
restructuring charges of EUR 12.1 million. The previous year’s reported
EBIT of EUR 57.7 million included restructuring charges of EUR 69.8
million and goodwill impairment charges of EUR 32.7 million.
Net financial items for the year were EUR 36.8 million, virtually
unchanged from the previous year’s EUR 36.9 million. The reported
result for the period was EUR 96.6 million (EUR 9.4 million). The
reported EPS was 94 cents (7 cents).
The average number of outstanding shares used in the EPS calculation
was 99,169,003 (98,501,625) excluding 5,061,089 (unchanged) company’s
own shares.
On a rolling 12-month basis, the return on investment (ROI) was 9.4%
(4.0%) and return on equity (ROE) was 11.7% (1.3%).
*The underlying EBIT excludes restructuring and goodwill
impairment charges.
