* Net sales increased by 11% during the fourth quarter and by 7% for
the full year
* Underlying EBIT* improved by 33% during the fourth quarter and
by 9% for the full year
* Underlying business improvement mainly driven by sustained
turnaround in the Americas, further supported by lower cost structure
achieved in Europe
* First phase of restructuring completed at year-end according to
plan, second phase on track
* Further investments in strategic growth markets were initiated
during the year
* In 2006, the underlying EBIT is expected to show moderate improvement
the full year
* Underlying EBIT* improved by 33% during the fourth quarter and
by 9% for the full year
* Underlying business improvement mainly driven by sustained
turnaround in the Americas, further supported by lower cost structure
achieved in Europe
* First phase of restructuring completed at year-end according to
plan, second phase on track
* Further investments in strategic growth markets were initiated
during the year
* In 2006, the underlying EBIT is expected to show moderate improvement
| Key figures | ||||||
| Q4 | Q4 | |||||
| EUR million | 2005 | 2004 | Change, % | 2005 | 2004 | Change, % |
| Net sales | 564 | 506 | 11 | 2 244 | 2 092 | 7 |
| EBIT - underlying* | 35 | 26 | 33 | 160 | 147 | 9 |
| EBIT margin % | 6,2 | 5,2 | 7,1 | 7 | ||
| EBIT - reported | 25 | -20 | - | 58 | 101 | -43 |
| EPS - reported | 0,12 | -0,26 | - | 0,07 | 0,52 | -87 |
In the fourth quarter, net sales increased by 11% to EUR 564 million. For the full year, net sales increased by 7% to EUR 2,244 million, with growth accelerating towards the end of the year. Sales were positively impacted by price/mix changes (+4%), volume growth (+2%) and currency translations (+1%). Sales growth was robust in the Americas (+16%) and Asia-Oceania-Africa (+10%), while growth in Europe remained moderate (+2%).
In the fourth quarter, the underlying EBIT before corporate items increased by 65% to EUR 33 million, corresponding to an EBIT margin of 5.8% (3.9%). For the full year, the underlying EBIT before corporate items increased
by 17% to EUR 142 million, corresponding to an EBIT margin of 6.3% (5.8%). The improvement was mainly driven by the sustained turnaround in the Americas, and further supported by a lower cost structure achieved in Europe.
by 17% to EUR 142 million, corresponding to an EBIT margin of 6.3% (5.8%). The improvement was mainly driven by the sustained turnaround in the Americas, and further supported by a lower cost structure achieved in Europe.
During the fourth quarter raw material prices remained at high levels. In 2005, raw material prices continued to increase strongly compared to the average level in 2004. Furthermore, volatility was present throughout the year.
The ongoing restructuring program was announced in two phases, at the end of 2004 and mid-year 2005. At year-end, all activities of the first phase had been completed according to plan. The larger second phase of restructuring is proceeding on track. During the fourth quarter, closure of the rigid packaging sites in Skelmersdale (UK) and Bayswater (Australia) were completed. In addition, the program was extended in Europe to include the downsizing of the rigid packaging site in Portadown (UK), with the remaining operations becoming a satellite of the unit in Gosport (UK).
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* The underlying EBIT excludes a restructuring charge of EUR 10 million in Q4 2005. In 2005, restructuring charges amounted to EUR 70 million and the goodwill impairment charge was EUR 33 million. A restructuring charge of EUR 46 million was recorded in Q4 2004.
* The underlying EBIT excludes a restructuring charge of EUR 10 million in Q4 2005. In 2005, restructuring charges amounted to EUR 70 million and the goodwill impairment charge was EUR 33 million. A restructuring charge of EUR 46 million was recorded in Q4 2004.
Outlook for 2006
In 2006, the underlying EBIT is expected to show a moderate improvement over 2005, despite decreasing unallocated corporate income in the second half of the year. 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.
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
The first quarter results 2006 will be published on April 27, 2006.
Invitation to join Huhtamaki's 2005 results presentation on February 8, 2006
At 11:00 Helsinki 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 Helsinki / 14:00 London / 09:00 New York time a conference call for investors and analysts will start with a presentation by CEO Heikki Takanen and CFO Sakari Ahdekivi, followed by a question and answer session. The dial-in number for participants is +44 20 7162 0025 and the reference code is Huhtamaki.
All materials can be found at www.huhtamaki.com
Please click the below link to read the full length report in PDF format.
