High inflation and lower sales volumes negatively impacted the Finnish coffee cup and packaging giant in 2023, with second quarter sales falling 8% year-on-year
Huhtamäki expects market volatility to continue in the second half of 2023 | Photo credit: Huhtamäki
Huhtamäki has reported ‘muted’ demand in its second quarter, with high inflation denting revenue and profit margins.
The Espoo-based single-use cup and packaging giant reported an 8% fall in sales during the three months ended 30 June 2023 to €1bn ($1.2bn), while adjusted EBIT decreased 10% year-on-year to €93m ($104m).
Net sales were negatively impacted by declining sales volumes and currency fluctuation during the period.
Huhtamäki’s divestment of its Russian operations also hampered profit margins. The packaging company sold its business in Russia for €151m ($151m) in September 2022 following the invasion of Ukraine earlier in the year.
Huhtamäki’s 2023 net sales year-to-date fell 4% to €2.1bn ($2.3bn), compared to €2.2bn ($2.4bn) in the first six months of 2022.
“The market environment remained muted in the second quarter of 2023, as inflation affected consumption across categories and geographies. Destocking also continued to impact volumes during the second quarter, although at a lower level than during the first quarter,” said Charles Héaulmé, President and CEO, Huhtamäki.
Huhtamäki expects market volatility to continue in the second half of 2023 but forecasts stable trading across its third and fourth quarters.
The Finnish coffee cup and packaging giant added that its full-year outlook remains unchanged but did not disclose sales forecasts. However, Huhtamäki did state it would continue to invest in innovation across the next six months as part of its updated 2030 profitable growth strategy.
Héaulmé said Huhtamäki will introduce additional commercial production capacity in the second half of 2023, including a deal to manufacture home-compostable coffee capsules for Nespresso.
In November 2022, Huhtamäki and coffee pod giant Nespresso said the paper-based coffee capsule will be piloted in France and Switzerland this year ahead of roll-out to several other European markets in 2024.