Jukka Moisio, CEO, says, "Our year started well, and we achieved 3% comparable net sales growth with all business segments growing organically. Growth was driven by Foodservice Europe-Asia-Oceania segment, where organic growth was boosted by acquisitions completed in 2016. In addition, the Flexible Packaging segment returned to positive growth. The Group's comparable growth in emerging markets was reduced to 2% as consumer demand in India was impacted by the demonetization action executed by the government in Q4 2016. Without the Indian impact emerging market growth would have been approx. 6-7%.
"2017 is a year of major investments for Huhtamaki. Our ongoing investments in new manufacturing units in the U.S., Egypt, and Ukraine are progressing. During the quarter we already started manufacturing in two new flexible packaging units in Northeast India and are currently ramping up the plant extension in Guangzhou, China. These significant growth investments help us address attractive opportunities in food and drink packaging and serve our customers better."
Financial review Q1 2017
The Group's comparable net sales growth was 3% during the quarter with all business segments having a positive contribution to growth. The Group's comparable growth in emerging markets was 2%. Growth was strong in Eastern Europe and Southeast Asia, but negative in India, South America and China. In China the Foodservice Europe-Asia-Oceania business segment exited non-core product categories as announced in 2016. The Group's net sales grew to EUR 739 million (EUR 672 million). The impact from foreign currency translation on net sales turned positive and was EUR 20 million (EUR -11 million) compared to 2016 exchange rates. Main positive impact came from the strengthening of the US dollar versus euro, while the impact from the weakening pound sterling was negative.
Outlook for 2017
The Group's trading conditions are expected to remain relatively stable during 2017. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same level as in 2016 with the majority of the investments directed to business expansion.