31 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Apr 26, 2018
Slide 1: April 26, 2018
April 26, 2018
Slide 2: Ulf Larsson, CEO
Slide 3: Strong market with higher prices
Strong market with higher prices Sales growth of 11% vs Q1 2017 • Price/mix +13%, volumes -3%, currency 1% EBITDA up 47% vs Q1 2017 • Higher prices • Positive currency effects • Harsh winter conditions Östrand project progressing according to plan • Planned start-up in June 2018 • SEK 6.1bn invested
Slide 4: EBITDA, Industrial ROCE and EBITDA development
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,175 12% / 17%* 47% 1,175 1,049 1,078 797 724 EBITDA margin Net debt/EBITDA 25% 27% 25% 26.7% 1.8x 20% 17% Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Note: 1) ROCE for the industrial segments; Wood, Pulp and Paper (* Industrial ROCE adjusted for ca
Slide 5: Key projects and operational milestones
The world's fastest saw line in full production in Tunadal Start-up of a 1 million tonnes pulp mill in June 2018 Pilot facility for biofuel production in operations since Q2 2017 Wind power target of 5 TWh 2020 will be achieved Investment in increased production of White-top Kraftliner Environmental
Slide 6: New segment presidents
Jerry Larsson, President Wood Kristina Enander, President Pulp Jonas Mårtensson, President Forest April 1, 2018 November 1, 2018 April 1, 2018
Slide 7: Forest: stable wood supply despite harsh winter conditions
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -1% -6% Stable wood supply despite harsh winter conditions 1,312 1,298 325 24.8% 23.4% 304 Slight increase in prices, especially higher prices for imported wood Sales down 1% • Lower volumes • Minor price increases Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017
Slide 8: Wood: strong market with continued price increases
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 10% 19% Strong market with continued price increases 1,503 11.4% 1,364 172 10.6% Low inventory levels 145 Sales up 10% • Higher prices EBITDA up 19% Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 • Higher prices Price development – Solid Wood Products •
Slide 9: Pulp: strong pulp market with increased prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -8% 71% Strong pulp market with increased prices 641 589 178 30.2% Östrand project on plan • Planned start-up in June 2018 104 16.2% • SEK 6.1bn invested up to Q1, out of SEK 7.8bn in total Sales down 8% • Higher prices Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1
Slide 10: Östrand start-up in June according to plan
Start-up in June according to plan Sequential start-up mitigates risk • Wood handling unit – Q3 2017 • Control center – Q3 2017 • Evaporation plant – Q4 2017 • Water treatment – Q4 2017 • Drying and packaging – Q1 2018 7.8 SEKbn investment Extended stop initiated in April • Extension of recovery
Slide 11: Wood handling unit — Q3 2017
Wood handling unit — Q3 2017
Slide 12: Availability
Availability • December: 89.3% • January: 99.2% • February: 99.9% • March: 100% 12
Slide 13: Drying and packaging — Q1 2018
Drying and packaging — O1 2018
Slide 14: Fiber line — Q2 2018
—Q2 2018 iber line F
Slide 15: Recovery boiler — Q2 2018
Recovery boiler — Q2 2018
Slide 16: Paper: strong Kraftliner market with higher prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 16% 119% Strong Kraftliner market with higher prices 2,383 586 2,049 24.6% Improved market for publication paper 13.1% Sales up 16% 268 • Higher Kraftliner prices EBITDA up 119% Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 • Higher Kraftliner prices Pr
Slide 17: Toby Lawton, CFO
Toby Lawton, CFO
Slide 18: Quarter income statement
Quarter SEKm Q1 2018 Q1 2017 Change Net sales 4,400 3,972 11% EBITDA 1,175 797 47% EBITDA margin 26.7% 20.1% 6.6 p.p. EBIT 889 498 79% EBIT margin 20.2% 12.5% 7.7 p.p. Financial items 1 -36 Profit before tax 890 462 93% Tax -191 -99 Profit for the period 699 363 93% Earnings per share, SEK 1.00 0.52
Slide 19: Net sales and EBITDA by segment
Forest Wood Pulp Paper 2,383 2,220 Net sales (SEKm) 2,096 2,069 2,049 1,998 1,889 1,859 1,637 1,567 1,503 1,496 1,426 1,364 1,361 1,320 1,312 1,298 1,296 1,287 1,261 1,261 1,234 1,210 672 668 668 644 641 589 585 556 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 20: Net sales bridge Q1 2017 to Q1 2018
Negative for Pulp Positive for all segments and Kraftliner SEK 13% -3% 4,400m SEK 1% 3,972m EUR positive, USD negative + 11% Net sales Price/Mix Volume Currency Net sales Q1 2017 Q1 2018 20
Slide 21: EBITDA bridge Q1 2017 to Q1 2018
Higher prices for all segments. Focus on improving mix EUR positive, USD negative SEK SEK SEK +482m -25m SEK SEK -65m SEK +45m -63m SEK +4m 1,175m Higher costs for wood raw material and chemicals SEK 797m + 47% EBITDA margin EBITDA margin 20.1% 26.7% EBITDA Price/Mix Volume Raw material Energy Curre
Slide 22: Cash flow
SEKm Q1 2018 Q1 2017 EBITDA 1,175 797 Revaluation of biological assets and other non cash flow items -253 -223 Operating cash surplus 922 574 Change in working capital -159 -354 Current capital expenditures -76 -126 Other operating cash flow -96 -9 Operating cash flow 591 85 Strategic capital expend
Slide 23: Östrand ramp-up and competitiveness
Start-up in June according to plan Ramp-up period of 12-18 months • 2018 – volumes in-line with 2017 • 2020 – first full year at full capacity World-class competitiveness • Doubled NBSK capacity • Fixed cost reduction of SEK 350 per tonnes compared to pre project level 7.8 SEKbn • Improved energy ba
Slide 24: Project related costs, maintenance stops and ramp-up effects
One-off costs related to the finalization of the Pulp expansion project Project related costs (indirect) • Project related costs of SEK 60m (150), of which SEK 10m (50) depreciation EBITDA impact Q1 2018 2018e 2017 • Primarily during the first 9 months of 2018 Project related costs 16 50 100 Mainten
Slide 25: Capital employed and net debt
SEKm Mar 31, 2018 Dec 31, 2017 Forest assets according to IAS 41 1) 31,593 31,386 Deferred tax relating to Forest assets -6,950 -6,905 Forest assets, net of deferred tax 24,643 24,481 Working capital 3,025 2,861 Working capital/Net sales 2) 17% 18% Other capital employed 15,832 15,377 Total capital
Slide 26: Strong market with increased prices
Strong market with increased prices Sales growth of 11% vs Q1 2017 EBITDA up 47% vs Q1 2017 Östrand project progressing according to plan Stable wood supply despite harsh winter conditions Improved product and market mix 26
Slide 27: Q&A
Slide 28: Appendix
Appendix WSCA
Slide 29: Net sales and EBITDA
Net sales (SEKm) EBITDA (SEKm) and EBITDA margin 18,000 4,500 16,000 17,092 4,000 16,664 16,152 4,026 15,412 15,373 3,781 14,000 3,500 3,648 3,300 3,385 12,000 3,000 10,000 2,500 23% 24% 21% 22% 22% 8,000 2,000 6,000 1,500 4,000 1,000 2,000 500 0 0 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM 29
Slide 30: Net sales and EBITDA by segment, 2014-LTM
Forest Wood Pulp Paper Net sales (SEKm) 8,768 8,226 8,548 8,434 7,744 5,994 6,133 5,187 5,108 4,978 5,070 5,056 5,114 5,315 5,441 2,518 2,760 2,492 2,542 2,490 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM EBITDA (SEKm) and EBITDA margin 1) 1,797 35%
Slide 31: 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