Flexible Packaging Suresh Gupta Executive Vice President, Flexible Packaging
Market presence and footprint MEUR 581 net sales in LTM Q3/2013 4,142 people employed 6 sales offices 8 operating countries 12 manufacturing units Europe Asia RoW Sales by location Sales office Manufacturing unit Manufacturing and sales unit locations 2
60% of net sales to emerging markets when taking exports into account 3 Western Europe Eastern Europe North America 2% 36% 13% Asia 35% Africa & Middle East 8% South America Oceania 4% 2%
Product portfolio and key customers % NS Key customers Markets and products Food & beverages Petfood Tube laminate Personal care & household Labels Pharma / medical 50% 15% 14% 8% 7% 5% 4
Key achievements since CMD 2011 5 15 RONA target ~14% Acquisition of majority stake in WebTech Labels 10 EBIT target 7-8% Driving organic growth and profitability in core products Closure of the site in New Zealand 5 0 2011 2012 LTM Q3/13 EBIT margin, % RONA, % Focused actions on business excellence globally Organization structured and realigned with new focus on cost structure and customer strategy Global commitment and actions to drive organic growth through new business development Note: Targets for 2013 as presented at CMD 2011.
Almost all nations with 100+ million population are developing countries RUSSIA US MEXICO EGYPT PAKISTAN INDIA CHINA JAPAN BANGLADESH VIETNAM NIGERIA ETHIOPIA PHILIPPINES BRAZIL INDONESIA 6 2012-2020: global population expected to grow by 750 million 94% of this growth in developing countries 2012-2020: global consumer expenditure to grow by USD 23 trillion 74% of this growth is in developing countries
7 Today majority of the global consumer flexible packaging market is in developed countries Global consumer flexible packaging market*: USD 76 billion (2013 projected) Share by region % % Eastern Europe 4.5 Western Europe 21.6 Central & South America 8.0 North America 23.6 China 10.3 Japan/ Korea/ Taiwan/ Singapore 13.9 India 4.9 Oceania 0.8 Middle East & Africa 4.9 Remaining South / SE Asia 7.5 Emerging markets 40% Developed markets 60% * Does not include shopping bags or similar; flexibles materials applications in irrigation, construction or similar; single unprinted film over wraps for cigarettes, daily fresh vegetables etc. Source: Huhtamaki estimate
8 however, future growth mostly at emerging markets Global consumer flexible packaging market: expected 5 year CAGR CAGR by region % % Eastern Europe 7.0 Western Europe 1.3 Central & South America 7.0 North America 2.6 China 10.0 Japan/ Korea/ Taiwan/ Singapore 1.5 India 14.0 Oceania 1.5 Middle East & Africa 13.0 Remaining South / SE Asia 12.0 Emerging markets 10.4% Developed markets 2.0% Source: Huhtamaki estimate
9 therefore, emerging market presence essential in capturing growth Global consumer flexible packaging market: USD 100 billion (2018 projected) Share by region % % Eastern Europe 4.8 Western Europe 17.5 Central & South America 8.5 North America 20.3 China 12.6 Japan/ Korea/ Taiwan/ Singapore 11.3 India 7.1 Oceania 0.7 Middle East & Africa 6.8 Remaining South / SE Asia 10.0 Emerging markets total 50% Developed markets total 50% 5 year growth in USD 20 bn 5 year growth in USD 4.3 bn Source: Huhtamaki estimate
Competitive advantages 10 Strong technical knowhow Key competitors: Global presence Product portfolio - depth & width Amcor Constantia Bemis Dai Nippon Regional players High focus on NPD and continuous innovation Local players
What to expect in 2014 11 Increase presence at growing markets: India, South East Asia, Africa, Eastern Europe Focus on new business development Prioritize resources on select categories: Labels, pharma, pouches, tube laminate, retort Drive global sourcing initiatives Improve utilization of Asian base for exports
Focus on new business development New products & new customers* 12 Current Medium-term Net sales increase MEUR 70 15% 21% NBD 15% of net sales NBD 21% of net sales * New products and new customers which became commercial maximum two years earlier to year of reporting.
Prioritize resources on select categories 13 Labels Pharma Specialized pouches Tube laminate Retort
Medium-term strategic actions 14 Drive profitable organic growth Acquire growth Margin enhancement from increased focus on business excellence Speed up best practice sharing in innovation
Summary 15 Global presence with strong base in Asia Significant growth opportunity in emerging markets and select categories Well positioned to capture growth