Packaging manufacturer Huhtamaki delivered a small fourth-quarter outperformance versus analyst expectations and recorded exceptionally strong free cash flow, according to a Jefferies research note published Friday.
Group sales in the quarter were down 2% compared with the prior year, moderating from a 1% decline recorded in the third quarter of 2025 and contrasting with 3% growth in the fourth quarter of 2024. The company reported volume growth in the North America and Fiber segments.
Operating profit for the period, measured as EBIT, reached €103 million, up from €100 million in the third quarter and 3% ahead of the consensus estimate of €100 million. Reported earnings per share were €0.65, compared with analyst expectations of €0.60. Free cash flow for the quarter was strong, at €311 million.
Performance varied across operating divisions. The North America business, which accounts for roughly 39% of group EBIT, produced €43.7 million in EBIT, beating consensus by 7%. Sales in the region were flat as positive volume trends offset a negative price/mix effect.
The Foodservice division, representing about 22% of group EBIT, reported EBIT of €22 million, in line with expectations. However, sales in that segment fell 7%, driven by lower volumes in Western Europe and the UK.
Flexible Packaging, contributing around 27% of group EBIT, outperformed estimates by 12%, delivering €31 million in EBIT, benefiting from lower energy and transport costs. The Fiber segment, about 12% of group EBIT, contributed €15 million versus a €13 million consensus.
Looking ahead, Huhtamaki's guidance for 2026 describes trading conditions as expected to remain relatively stable. The company has rolled out a new operating model that gives each segment full profit-and-loss responsibility. With leverage below 2x net debt to EBITDA, management notes there is capacity for potential acquisitions.
Jefferies retained its Hold rating on Huhtamaki and kept a €34 price target, which the firm says implies about 8% upside. The research note highlighted that the stock trades at 13 times projected 2026 price-to-earnings, below its 10-year average of 15 times, and that a recovery in volumes would be needed to support a valuation re-rating.
The quarter combined a modest operational beat with notable cash generation, while segment results underscored uneven demand dynamics across regions and end markets.