Huhtamäki Oyj – Results announcement – 31 December 2016
Huhtamäki Oyj’s Results January 1–December 31, 2016 (extract)
Impact of new ESMA guidelines
In accordance with the new guidelines on alternative performance measures issued by the European Securities and Markets Authority (ESMA) Huhtamäki Oyj has revised the terminology used in its financial reporting. The term “Items affecting comparability (IAC)” replaces the term “Non-recurring items (NRI)”. IAC includes, but is not limited to, material restructuring costs, impairment losses and reversals, gains and losses relating to business combinations and disposals, gains and losses relating to sale of intangible and tangible assets, as well as material fines and penalties imposed by authorities.
Alternative performance measures are derived from performance measures reported in accordance to International Financial Reporting Standards (IFRS) by adding or deducting the IAC and they are called Adjusted. Thus the term “Adjusted earnings before interests, taxes, depreciation and amortization (Adjusted EBITDA)” replaces the term “EBITDA excluding non-recurring items”, the term “Adjusted earnings before interests and taxes (Adjusted EBIT)” replaces the term “EBIT excluding non-recurring items” and the term “Adjusted earnings per share (Adjusted EPS)” replaces the term “EPS excluding non-recurring items”.
Huhtamaki uses alternative performance measures to better reflect the operational business performance and to enhance comparability between financial periods. They are reported in addition to, but not substituting, the performance measures reported in accordance with IFRS.
Financial review FY 2016 (extract)
The Group’s profitability improved with all business segments contributing to earnings growth. Earnings growth was strongest in the North America business segment. Other activities had a negative impact of EUR 11 million (EUR -5 million) on the Group’s earnings. The change compared to previous year was primarily related to the Group’s long-term incentive plan and project-related costs. The Group’s Adjusted EBIT were EUR 268 million (EUR 238 million) and reported EBIT EUR 266 million (EUR 215 million). Foreign currency translation impact on the Group’s profitability was EUR -5 million (EUR 16 million).
Adjusted EBIT excludes EUR -1.7 million of IACs, which consist of restructuring costs of EUR 9.5 million and a gain of EUR 7.8 million relating to business combination. The restructuring costs are related to actions to improve the competitiveness of the foodservice business in China and New Zealand and a provision to cover potential environmental remediation actions at a former Huhtamaki manufacturing unit in Norway as announced on June 27, 2016. The gain relating to business combination derives from the increase of Huhtamaki’s ownership in Arabian Paper Products Company as announced on March 22, 2016. IACs were booked for Q2 2016 and Q4 2016 in the Foodservice Europe-Asia-Oceania business segment.
Net financial expenses decreased to EUR 27 million (EUR 34 million). Tax expense increased to EUR 48 million (EUR 29 million). The corresponding tax rate was 20% (16%).
Profit for the period was EUR 192 million (EUR 151 million). Adjusted EPS were EUR 1.83 (EUR 1.65) and reported EPS EUR 1.81 (EUR 1.42).
Notes for the results report (extract)
Other information (extract)