Billerud Ab · OMXSTO:BILL
Billerud Ab — Q2 2020 Earnings Presentation
19 slides from Billerud Ab's earnings presentation, Jul 17, 2020
Slide 1: Resilient performance in uncertain times
Interim report January–June 2020 Q2 Resilient performance in uncertain times 2020 17th of July 2020 Lennart Holm, CEO, Ivar Vatne, CFO WHAT IF paper packaging is the solution?
Slide 2: Key highlights Q2 2020
Key highlights Q2 2020 Continued sales volume increase Relatively limited impact from Covid-19 KM7 ramp-up progress continues as planned Earnings continued to be affected by lower market prices On track to deliver our cost- and efficiency program 2
Slide 3: Q2 2020 key figures
Q2 2020 NET SALES ADJUSTED EBITDA* ROCE** SEK 6 156 m (6 293) SEK 774 m (539) 4% NET SALES Adj EBITDA NET DEBT/ GROWTH Y/Y MARGIN EBITDA* -2% 13% 2.4x * Adjusted for items impacting comparability 3 **Adjusted, Rolling 12 months
Slide 4: Covid-19 during Q2 2020
Covid-19 during Q2 2020 Relatively limited impact so far Covid-19 impact mostly notable within Division Paper & Division Solutions Mainly volume (demand) decline in certain channels (industry, food service) All H1 maintenance re-scheduled to H2 Slow-steam production in two production sites Crisis ma
Slide 5: Business status and outlook
Business status and outlook Sales split, % Food & Drink Medical & Hygiene Consumer & Luxury Industrial LPB (7.6bn*) 100% Cartonboard (1.5bn) 15% 85% Containerboard (3.6bn) 80% 10% 10% Kraft Paper (3.5bn) 35% 10% 15% 40% Sack Paper (2.9bn) 20% 15% 65% Managed Packaging (0.8bn) 100% Status Q2 Stable S
Slide 6: KM7 – 1 year anniversary
KM7 – 1 year anniversary 1 year since the start-up of KM7 Accelerated ramp-up progress with significant steps forward each quarter A number of “teething problems” to be fixed at maintenance shutdown (delayed until September) Original investment case assumptions revisited and updated; reaffirms poten
Slide 7: KM7 Q2 and 2020
KM7 Q2 and 2020 Annualized production rate at 300 – 350K tons Successful first production of Crownboard Prestige (sophisticated Cartonboard grade) during Q2 - ahead of plan Increasing focus on improved product mix in order to minimize low margin and downgraded products to improve contribution per to
Slide 8: Cost and efficiency program on track
Cost and efficiency program on track On track to deliver SEK 250 m of cost savings and efficiencies in 2020 Another sizable contribution in Q2’20 – 90 m SEK Work in progress to identify and initiate additional building-blocks to deliver SEK 600 m run-rate by Q4’21 8
Slide 9: Raw material costs in Q2
Raw material costs in Q2 Cost of Caustic Purchased Limited energy pulpwood soda price pulp pricing cost savings decreased decreased impact in Q2 due to decreased hedging Expected to Forward looking decrease further, trend for chemicals New supply but marginally in Q3 look to increase agreement in Pi
Slide 10: Key financial figures
Key financial figures Q2 Q2 Change Q1 Change SEK m 2020 2019 vs Q2-19 2020 vs Q1-20 Net sales 6 156 6 293 -2% 6 364 -3% Adjusted EBITDA 774 539 +44% 791 -2% Adjusted EBITDA margin 13% 9% 12% Adjusted operating profit 284 154 +84% 305 -7% Adjusted operating profit margin 5% 2% 5% Net profit 202 154 +
Slide 11: Volume/mix growth and benefit from currency rates offset by lower paper market prices
Volume/mix growth and benefit from currency rates offset by lower paper market prices Net sales, SEKm -2% -5% +3% -5% +2% +1%
Slide 12: Strong adjusted EBITDA, supported by improving cost structure and timing of maintenance stops
Strong adjusted EBITDA, supported by improving cost structure and timing of maintenance stops Adj EBITDA, SEKm +44% Adj EBITDA 9% 13% margin
Slide 13: Division Board
Division Board Share of net sales KEY FIGURES Q2 2020 59% Change vs SEKm Q2-20 Q2-19 Net sales 3 656 +6% of which liquid packaging board 2 077 +12% of which cartonboard 431 +16% of which fluting & liner 1 009 +5% Net operating expenses, other -3 054 – EBITDA 602 +51% EBITDA margin 16% +4% pts Net sa
Slide 14: Division Paper
Division Paper Share of net sales KEY FIGURES Q2 2020 30% Change vs SEKm Q2-20 Q2-19 Net sales 1 825 -14% of which sack paper 633 -20% of which kraft paper 861 -4% Net operating expenses, other -1 522 -19% EBITDA 303 +25% EBITDA, % 17% +6% pts Changed market conditions continue to impact Div Paper N
Slide 15: Division Solutions
Division Solutions Share of net sales KEY FIGURES Q2 2020 3% Change vs SEKm Q2-20 Q2-19 Net sales 190 -29% of which Managed Packaging 151 -34% of which other solutions 39 +3% Net operating expenses, other -187 -26% EBITDA 3 -70% EBITDA, % 2% -4% pts Net sales declined due to North American based bra
Slide 16: Strong balance sheet, below leverage target
Strong balance sheet, below leverage target 3,9 Target: <2.5x Net debt SEK 6.71bn at 30 June 2,9 Net debt / Adj EBITDA 2,4 2,7 2,4 ratio 2.4x – below target 2,2 2,2 2,3 1,8 1,9 Limited debt maturity over the coming 2 years CAPEX for 2020 estimated to SEK 1.3 bn Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3
Slide 17: Q2 Summary
Q2 Summary • Continued sales volume increase • Relatively limited impact from Covid-19 • KM7 ramp-up progress continues and potential when fully ramped-up reaffirmed • Earnings continued to be affected by lower market prices • On track to deliver our cost- and efficiency program 17
Slide 18: Q3 Outlook
Q3 Outlook Uncertainty related to Covid-19 remains Somewhat more challenging market conditions for most segments. Exceptions being products designated to Food & Beverages and Medical & Hygiene, where we expect a more stable situation Several planned maintenance stops Raw material costs expected to d
Slide 19: BILLERUDKORSNAS
BILLERUDKORSNAS