Breakdown by instrument and maturity profile add_circle_outline

As of September 30, 2018

NB: click on the legends below the chart to adjust the data shown.

Debt instruments issued by Huhtamaki add_circle_outline

Revolving Credit Facility EUR 400 million

On January 9, 2015 Huhtamäki Oyj signed a EUR 400 million syndicated revolving credit facility loan agreement for the period of five (5) years.

Huhtamaki announced on December 23, 2016 that it has signed a confirmation to extend the maturity of a EUR 400 million syndicated revolving credit facility loan agreement for a further period of one year in accordance with the extension option of the loan agreement. The new termination date is January 9, 2022.

The Mandated Lead Arrangers and Book Runners of the credit facility are BNP Paribas, Citigroup Global Markets Limited, Commerzbank Aktiengesellschaft, DBS Bank Ltd, ING Belgium NV/SA, J.P. Morgan Limited, Landesbank Hessen Thüringen Girozentrale, Skandinaviska Enskilda Banken AB (publ), Nordea Bank Finland Plc, Pohjola Bank plc and Standard Chartered Bank.

Bond EUR 150 million

On October 4, 2017 Huhtamäki Oyj issued a EUR 150 million fixed rate unsecured bond. The bond matures in seven (7) years and pays a coupon of 1.625 percent.

The prospectus relating to the listing of the bond on Nasdaq Helsinki Ltd can be accessed through the link below.

Listing prospectus of the Bond

Schuldschein EUR 117 million and USD 35 million

On April 25, 2017 Huhtamäki Oyj signed a freely transferable loan agreement (Schuldschein) of EUR 117 million and USD 35 million (approx. EUR 33 million). The loan is targeted to institutional investors. It includes several floating and fixed rate tranches with maturities of 5, 7 and 10 years.

Schuldschein EUR 150 million

On March 22, 2016 Huhtamäki Oyj signed a EUR 150 million freely transferable loan agreement (Schuldschein). The loan is targeted to institutional investors. It is divided into two floating rate and two fixed rate tranches with maturities of 5 and 7 years.

Bond EUR 200 million

On May 14, 2013 Huhtamäki Oyj issued a EUR 200 million 3.375 percent unsecured bond due May 14, 2020 of which an aggregate nominal amount of EUR 135,008,000 of Notes were accepted for purchase and cancellation on October 3, 2017. All Notes that were not purchased remained outstanding.

The prospectus relating to the listing of the bond on Nasdaq Helsinki Ltd can be accessed through the link below.

Listing prospectus of the Bond

Managing financial risks add_circle_outline

The objective of financial risk management is to ensure that the Group has access to sufficient funding in the most cost efficient way and to minimize the impact on the Group from adverse movements in the financial markets. As defined in the Group Treasury Policy, management of financial risks is guided and controlled by a Finance Committee, led by the CFO. The Finance Committee reviews risk reports on the Group's interest bearing balance sheet items, commercial flows, derivatives and foreign exchange exposures and approves required measures on a monthly basis.

The Group Treasury Department at the Espoo headquarters is responsible for the Group's funding and risk management and serves the business units in daily financing, foreign exchange transactions and cash management co-ordination.

Currency risk

The Group is exposed to exchange rate risk through cross-border trade within the Group, exports and imports, funding of foreign subsidiaries and currency denominated equities.

Transaction risk: The largest transaction exposures derive from capital flows, imports, exports and royalty receivables. The objective of currency transaction risk management is to protect the Group from negative exchange rate movements. Business units are responsible for actively managing their currency risks related to future commercial cash flows, in accordance with policies and limits defined by the business unit and approved by the Finance Committee. As a rule, commercial receivables and payables recorded on the balance sheet are always fully hedged, as well as 25% of probable flows over a minimum 12-month horizon. Eligible hedging instruments are currency forwards and in authorized subsidiaries also currency options. Business units' counterpart in hedging transactions is mainly Huhtamäki Oyj.

Translation risk: As a main rule individual subsidiaries do not carry translation risk as they are financed in local currencies. As an exception, the Finance Committee has approved the use of foreign currency borrowing in countries with high local interest rates. The main translation exposures derive from equities and permanent loans, which in substance form a part of the net investment in the US, India and UK subsidiaries. The Group hedges its translation risks selectively by using foreign currency loans and derivatives. Equity hedging decisions are made by the Finance Committee, who in its decision-making considers the hedge's estimated impact on the Group's key indicators, long-term cash flows and hedging cost.

Interest rate risk

The interest bearing debt exposes the Group to interest rate risk, namely re-pricing- and price risk caused by interest rate movements. Management of interest rate risk is centralized to the Group Treasury.

The Group's policy is to maintain in the main currency debt portfolios a duration that matches a benchmark duration range based on the Group's estimated cash flow, selected balance sheet ratios and also the shape of the yield curve. The objective of interest rate risk management is to reduce the fluctuation of the interest charge, enabling a more stable net income.

The Group manages interest rate risk by selection of debt interest periods and by using derivatives such as futures, forward rate agreements, interest rate swaps and options.

Liquidity and re-financing risk

The Group maintains sufficient liquidity reserves at all times by efficient cash management structures such as cash pools, concentration accounts and overdraft financing facilities.

To mitigate the re-financing risk, the Group diversifies funding sources as well as the maturity structure of loans and debt facilities. The Group utilizes a Finnish commercial paper program and uncommitted credit facilities with relationship banks for short-term financing purposes. Undrawn committed long term debt facilities are sufficient to ensure adequate financing resources in all foreseeable circumstances.

Credit risk

The Group is exposed to credit risk from its commercial receivables and receivables from financial institutions based on short-term investment of liquid funds as well as derivatives transactions.

The business units are responsible for the management of commercial credit risk in accordance with policies defined by the business units and approved by the Finance Committee. A Group policy sets out certain minimum requirements as to credit quality, sales terms and collection. The commercial credit risk is considered low for the group as a whole as the receivable portfolio is diversified and historical credit loss frequency is low.

Liquid funds are from time to time invested in short-term bank deposits at relationship banks with a solid credit rating, in government bonds, treasury bills or in commercial papers issued by corporate borrowers with an investment grade rating. Credit risk stemming from receivables from financial institutions, including derivative transaction settlements, is considered small and is managed centrally by the Group Treasury Department and in accordance with limits set by the Finance Committee.

Capital management

The Group's objective is to maintain an efficient capital structure. Consequently, the Group aims to maintain in the long term the net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio in a range between 2- 3. Net debt is defined as interest bearing liabilities less interest bearing receivables, cash and cash equivalents.

The Group is subject to a restriction on its net debt to EBITDA ratio through a clause in a key financing agreement. This restriction is not seen hindering the Group's ability to carry out its business or its strategy.

Changes in the capital structure are resulting from capital investments in the business and cash returns to shareholders, which are funded by the stable cash flow.