27 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Oct 30, 2020
Slide 1: Interim Report, October 30, 2020
heal ise a Peale Interim Report
Slide 2: Ulf Larsson, CEO
Slide 3: Exit publication paper, grow pulp, sales declined 13%
Exit publication paper • Sequential closing of publication paper Q1 2021 Grow pulp • Invest in increased CTMP pulp production located at Ortviken Sales declined 13% vs Q3 2019 • Price/mix -4%, volume -10%, currency 1% EBITDA1 down 24% vs Q3 2019 - Impact of decision to exit publication paper - Unpla
Slide 4: EBITDA, Industrial ROCE and EBITDA development
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,032 4% 1,549 1,494 1,560 -24% 1,340 1,364 1,055 1,030 1,032 33% 1,001 30% 31% EBITDA margin Net debt/EBITDA 27% 26% 24% 24% 24% 2.0x 21% 21% Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Note: Excluding effect of one-off i
Slide 5: Forest: stable wood supply to industries
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -20% +33% Stable wood supply to industries 1,865 515 34.3% 1,500 Sales down 20% 388 20.8% - Lower volumes to Ortviken and Östrand - Lower pulpwood price EBITDA up 33% Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 + Higher harvesting from own forest + Hi
Slide 6: Wood: high demand, increasing prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +3% +7% High demand, leading to increasing prices 1,545 1,592 192 11.6% 12.1% 180 Sales up 3% + Better sales from building and supply solutions EBITDA up 7% + Better margins on building and supply solutions Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020
Slide 7: Pulp: unplanned production stop in July
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -13% -49% Unplanned production stop in July impacted 1,129 268 23.8% volumes and costs, good production after restart 986 Sales down 13% 13.9% 137 - Lower prices - Volume loss due to unplanned production stop EBITDA down 49% Q3 2019 Q3 2020 Q3 2019 Q3 202
Slide 8: Limited pulp supply due to maintenance downtime
Softwood pulp price (USD/t) vs deliveries (Mt) Hardwood pulp inventories (days of supply) 1,400 25.0 80 1,200 24.5 70 1,000 60 24.0 800 Average 23.5 50 600 23.0 40 400 NBSK PIX Price Europe 200 22.5 30 Global Softwood Kraft deliveries (RHS) 0 22.0 20 Softwood pulp inventories (days of supply) 50 Lim
Slide 9: Paper: low publication paper demand
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -24% -58% Low publication paper demand 2,380 577 24.2% Low capacity utilization, impacted by exit decision 1,817 13.2% Sales down 24% 240 - Lower kraftliner and publication paper prices - Lower publication paper volumes Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3
Slide 10: Kraftliner recovery after large demand drop in Q2
Price (EUR/t) vs Kraftliner deliveries (Mt) European Box demand (index) 850 110 800 5.5 108 750 5.4 106 700 104 650 5.3 102 600 Unbleached kraftliner price Euwid (LHS) 5.2 550 Kraftliner deliveries Europe (RHS) 100 500 5.1 98 Kraftliner inventories (days of supply) Recovery after large demand drop i
Slide 11: Profitable growth strategy
Exit publication paper Profitable growth strategy • Sequential closing of the three paper machines during Q1 2021 Investment in increased pulp production • 300,000 tonnes CTMP at Ortviken Invest in integrated value chain: Increased • Grow Pulp • Low CAPEX and cash cost per tonne • Grow Kraftliner
Slide 12: Growing forests bind CO2, SCA's climate benefits
2 Replaces Higher growth enables more substitution – 1 renewable alternatives replace fossil Binds 6.0 based products net Growing forests bind CO2 – Mt CO2 5.4 active forest management SCA’s renewable Non-renewable Mt CO2 increases growth products products Fertilization Bioenergy Fossil fuels Contor
Slide 13: Toby Lawton, CFO
Slide 14: One-off items related to exit of publication paper
Quarter Jan-Sept Effects of one-off items related to exit publication paper in Q3: SEKm Q3 2020 Q3 20201) 2020 20201) Net sales 4,338 4,338 13,818 13,818 Reported in segment Other EBITDA -88 1,032 1,943 3,063 Impact on EBITDA of SEK -1,120m EBITDA margin -2.0% 23.8% 14.1% 22.2% • Provision for restr
Slide 15: Quarter results, SEKm Q3 2020
Quarter SEKm Q3 2020 Q3 2019 Change Net sales 4,338 4,975 -13% EBITDA 1,032 1,364 -24% EBITDA margin 23.8% 27.4% -3.6 p.p. EBIT 624 955 -35% EBIT margin 14.4% 19.2% -4.8 p.p. Financial items -28 -26 Profit before tax 596 929 -36% Tax -121 -172 Profit for the period 475 757 -37% Earnings per share, S
Slide 16: Net sales and EBITDA by segment
Forest Wood Pulp Paper 2,421 2,366 2,375 2,380 2,242 Net sales (SEKm) 2,108 1,876 1,817 1,865 1,833 1,770 1,746 1,727 1,694 1,678 1,651 1,592 1,558 1,545 1,540 1,500 1,494 1,436 1,376 1,214 1,188 1,134 1,129 1,091 1,049 986 900 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 17: Net sales bridge Q3 2019 to Q3 2020
Negative for all segments Lower paper volumes SEK 4,975m -4% -10% SEK 1% 0% 4,338m - 13% Net sales Price/Mix Volume Currency Acquisitions/ Net sales Q3 2019 divestments Q3 2020 17
Slide 18: EBITDA bridge Q3 2019 to Q3 2020
Lower prices for Unplanned production all segments Lower costs for stop at Östrand and wood raw Rotterdam sale in 2019 SEK Lower paper materials 1,364m -291 volumes +275 -84 +45 -167 SEK -110 1,032m - 24% EBITDA margin EBITDA margin 27.4% 23.8% EBITDA Price/Mix Volume Raw material Energy Currency Ot
Slide 19: Cash flow, quarter and Jan-Sept
Quarter Jan-sept SEKm Q3 2020 Q3 2019 2020 2019 EBITDA 1,032 1,364 3,063 4,264 Revaluation of biological assets and other non cash flow items -322 -312 -895 -614 Operating cash surplus 710 1,052 2,168 3,650 Change in working capital 821 325 523 -326 Current capital expenditures -413 -246 -926 -762 O
Slide 20: Net debt development
SEK SEK 9,396m -1,118m SEK SEK SEK SEK Lease 811 +314m 0m +58m -356m SEK 8,294m 792 Lease Strong focus on Revaluation of pension Kraftliner expansion assets and Other cost control Net debt / EBITDA Net debt / EBITDA1 2.1x 2.0x Net debt Operating Strategic capex Acquisitions Paid tax Other Net debt Q
Slide 21: Capital employed and key balance sheet items
SEKm Sept 31, 2020 Dec 31, 2019 Forest assets 71,537 69,682 Working capital 2,852 3,748 Working capital/Net sales 1 20% 20% Deferred tax relating to forest assets -14,366 -13,977 Other capital employed 17,241 17,654 Total capital employed 77,264 77,107 Net debt 8,294 8,597 Net debt/EBITDA 2,3 2.0x 1
Slide 22: Summary, Ulf Larsson, CEO
Summary Ulf Larsson, CEO WSCA
Slide 23: Summary: exit publication paper, grow pulp
Exit publication paper • Sequential closing of publication paper Q1 2021 Grow pulp • Invest in increased CTMP pulp production located at Ortviken Sales declined 13% vs Q3 2019 • Price/mix -4%, volume -10%, currency 1% EBITDA1 down 24% vs Q3 2019 - Impact of decision to exit publication paper - Unpla
Slide 24: emanate ~
emanate ~ Wa MT. eH
Slide 25: Appendix
Appendix SSCA
Slide 26: Net sales and EBITDA by segment 2014-2019 LTM
Forest Wood Pulp Paper Net sales (SEKm) 9,643 9,229 8,226 8,548 8,434 8,043 7,744 6,956 6,521 6,618 6,325 5,994 6,174 5,187 5,108 4,978 5,070 5,455 5,114 5,315 5,441 4,377 4,165 2,518 2,760 2,492 2,542 2,866 2014 2015 2016 2017 2018 2019 LTM 2014 2015 2016 2017 2018 2019 LTM 2014 2015 2016 2017 2018
Slide 27: Forward-looking statements
This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read SCA’s most recent annual report for a better understanding of these risks and unce