Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — Q4 2017 Earnings Presentation
25 slides from Billerud Ab's earnings presentation, Jan 29, 2018
Slide 1: Year-End Report January-December 2017
YEAR-END REPORT JANUARY-DECEMBER 2017 2018-01-29 Petra Einarsson, CEO, Susanne Lithander, CFO
Slide 2: Stable Results
STABLE RESULTS Area Target Outcome 2017 Financial targets fulfilled Strong demand offset by Growth 3-4% 3% ✔ production disruptions Record high production levels EBITDA >17% 17% ✔ Increased focus on 1 operational excellence ROCE >13% 13% ✔ Net debt/EBITDA <2.5 1,53 ✔ Dividend policy 50% 54% ✔ 1. Adj
Slide 3: Record High Production Levels
RECORD HIGH PRODUCTION LEVELS TOTAL INCREASE 2013-2017: 230 000 TONNES ANNUAL PRODUCTION RECORDS 2017 IN GÄVLE, FRÖVI & SKÄRBLACKA KTON 4 000 CAGR 2% 3 500 3 000 2 687 2 720 2 830 2 834 2 604 2 500 2 000 1 500 1 000 500 0 2013 2014 2015 2016 2017 Excluding Tervasaari 3
Slide 4: Increased Focus on Operational Excellence
INCREASED FOCUS ON OPERATIONAL EXCELLENCE Production Stability Increase stability in pulp- & paper/board production with support of Company Specialists Product Quality A systematic, customer centric product quality improvement process under implementation Occupational Health & Safety Implementation
Slide 5: Q4 2017 Results at a Glance
Q4 2017 RESULTS AT A GLANCE NET SALES 2% OTHER PACKAGING PAPER Kraft paper 5 565 GROWTH 8% Sack paper Market pulp SEK million 39% SHARE 35% OF SALES EBITDA CONSUMER BOARD 18% 17% Liquid packaging board CORRUGATED SOLUTIONS 923 MARGIN Cartonboard Fluting Liner SEK million Managed Packaging 5
Slide 6: Q4 2017 Key Highlights
Q4 2017 KEY HIGHLIGHTS Continued high demand across all business areas Negative effect on sales volumes from production disruptions Higher EBITDA driven by increased prices and lower costs Adjusted EBIT margin 11% Favourable outlook on both short and long term 6
Slide 7: Financial Development
7 FINANCIAL DEVELOPMENT
Slide 8: Net Sales
NET SALES SEK MILLION 6000 +2% 5800 5600 5636 5600 5544 5565 5468 5400 5439 5393 5357 5200 5213 5000 4800 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 8
Slide 9: EBITDA
EBITDA SEK MILLION 1600 1400 Adjusted +6% 1200 1000 1037 1051 1017 923 923 950 898 800 859 863 671 693 600 400 200 0 Q4 Q1 Q2 Q3 Q4 Q4 Adj Q1 Q2 Q3 Q4 Q4 Adj 2015 2016 2017 9
Slide 10: Operating Cash Flow
OPERATING CASH FLOW SEK MILLION 1000 696 631 619 500 360 314 155 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -202 -294 -500 -761 -1000 2015 2016 2017 10
Slide 11: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED ADJUSTED, ROLLING 12 MONTHS (%) 16 Target: >13% 14 13 13 13 13 13 13 13 13 12 8 4 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 11
Slide 12: Leverage
LEVERAGE NET DEBT/EBITDA (X) 3,00 2,50 Target: <2.5x 2,00 1,50 1,53 1,41 1,32 1,35 1,24 1,24 1,27 1,19 1,00 1,08 0,50 0,00 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 12
Slide 13: Business Areas
13 BUSINESS AREAS
Slide 14: Packaging Paper Business Area
PACKAGING PAPER BUSINESS AREA KRAFT AND SACK PAPER FOR CUSTOMERS WITH TOUGH DEMANDS Packaging for flour, sugar, carrier bags, medical KRAFT PAPER SACK PAPER packaging, building materials, chemicals and more #1 #2 Growth driven by population growth in emerging GLOBALLY GLOBALLY markets, ageing popula
Slide 15: Packaging Paper Business Area
PACKAGING PAPER BUSINESS AREA Q4 DEVELOPMENT Net sales + 4 % vs Q4-16 Increased prices in local currency somewhat offset by effects from production disruptions 2 147 NET SALES SEK MILLION EBITDA -5 % vs Q4-16 Lower production volumes and negative currency effects Prices on pulp and paper continues t
Slide 16: Consumer Board Business Area
CONSUMER BOARD BUSINESS AREA LIQUID PACKAGING BOARD AND CARTONBOARD WITH UNIQUE PROPERTIES LIQUID LIQUID Packaging for milk, juice, preserved foods, beauty PACKAGING BOARD – AMBIENT PACKAGES PACKAGING BOARD – ALL PACKAGE TYPES and healthcare products, confectionary and more #1 #2 Growth driven by hi
Slide 17: Consumer Board Business Area
CONSUMER BOARD BUSINESS AREA Q4 DEVELOPMENT Net sales -2% vs Q4-16 Difficulties with production availability 1 943 NET SALES SEK MILLION EBITDA +8% vs Q4-16 High costs in Q4-16 – rebuild and startup of Rockhammar Volume growth in line with overall financial targets YoY 363 Record high sales volumes
Slide 18: Corrugated Solutions Business Area
CORRUGATED SOLUTIONS BUSINESS AREA FLUTING AND LINER ADD VALUE Packaging for fruit and vegetables, white goods and electronics, exclusive drinks and more COATED WHITE PURE WHITE NSSC FLUTING TOP LINER LINER Supply chain solutions and packaging #1 #2 #2 optimisations for brand owners EUROPE EUROPE EU
Slide 19: Corrugated Solutions Business Area
CORRUGATED SOLUTIONS BUSINESS AREA Q4 DEVELOPMENT Net sales +2% vs Q4-16 Improved prices in local currency and increased sales volumes within Managed Packaging 1 011 NET SALES SEK MILLION EBITDA -12% vs Q4-16 Production disruptions and establishment costs related to expansion within Managed Packagin
Slide 20: Progress in Investment
PROGRESS IN INVESTMENT
Slide 21: Skärblacka and Gruvön Progressing
SKÄRBLACKA AND GRUVÖN PROGRESSING IMPROVING EFFICIENCY AND SECURING GROWTH Karlsborg 1 Investing in MG integrated to pulp production in Skärblacka, Sweden; Pietarsaari SEK 1.3 billion investment. Tervasaari 2 New board machine in Gruvön, Sweden Gävle with capacity of approx. 550 000 t/a; 2 Frövi Roc
Slide 22: Outlook
OUTLOOK
Slide 23: Short-Term Outlook
SHORT-TERM OUTLOOK Demand and order situation are expected to be strong with normal seasonal variances for all business areas The negative impact from weather related challenges on raw material flows is expected to be SEK 80-100 million in the first quarter 23
Slide 24: 2018 Outlook
2018 OUTLOOK Demand of wood will increase Overall capacity will remain on 2017 level Increased volume for Consumer Board Reduced volumes for Corrugated Solutions and Packaging Paper due to impact from Gruvön investment Net exposure to pulp market ~150 ktonnes in 2018 One-off costs impact from invest
Slide 25: BillerudKorsnäs
BILLERUDKORSNAS