Arctic Paper S.a. · GPW:ATC
Arctic Paper — Q1 2022 Earnings Presentation
29 slides from Arctic Paper's earnings presentation, May 9, 2022
Slide 1: Financial Results Q1 2022
Q1 9/5/2022 FINANCIAL RESULTS Q1 2022
Slide 2: Disclaimer
DISCLAIMER Please read the information below carefully This presentation (the ‘Presentation’) the regulated market, in particular the appearance of unexpected facts or is no certainty that the estimates, was prepared by Arctic Paper SA (the regulated market operated by the Warsaw circumstances which
Slide 3: Agenda
AGENDA PRESENTERS: Michał Jarczyński / CEO Arctic Paper Göran Eklund / CFO Arctic Paper Summary Q1 2022 Paper Packaging Financial performance Pulp Power Focus 3 Q1 2022 arcticpapergroup.com
Slide 4: Summary Q1 2022
SUMMARY Q1 2022 Arctic Paper Group Q1 2022 vs. Q1 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 1 110.8 782.8 205.7 72.2 17.9 24.1 19.7% 8.1% (Q1 2022) (Q1 2021) (Q1 2022) (Q1 2021) (Q1 2022) (Q1 2021) (Q1 2022) (Q1 2021) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pulp sale
Slide 5: Paper Q1 2022
PAPER 5 Q1 2022 arcticpapergroup.com
Slide 6: Market Data: Fine Paper Prices, German Market
MARKET DATA GRAPHIC FINE PAPER PRICES – GERMAN MARKET Fine paper average market prices 1200 1100 MAR 2022 COMPARED TO DEC 2021 1000 UWF average price change +18% 900 CWF average price change +27% 800 MAR 2022 COMPARED TO MAR 2021 700 UWF average price change +34% 600 CWF average price change +47% 12
Slide 7: Operating Data: Paper Production and Sales Volume
OPERATING DATA PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS 96% 97% 94% 99% 99% 92% 100% 83% 80% Average Q1 2022 use of production capacity: 99% 60% SAME LEVEL AS IN Q4 2021 40% 5% HIGHER THAN IN Q1 2021 20% 19 19 19 19 20 20 20 20 21 21 21 21 22 1 2 3 4 1 2 3 4 1 2 3 4 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q1
Slide 8: Operating Data: Paper Sales Revenue
OPERATING DATA PAPER SALES REVENUE (PLN mn) 820 820 645 573 564 588 547 547 492 Total revenue Q1 2022 (PLN 820mn) INCREASED BY 50% COMPARED TO Q1 2021 19 19 19 19 20 20 20 20 21 21 21 21 22 21 22 1 2 3 4 1 2 3 4 1 2 3 4 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Average price Q1 2022 (PLN 4.93k) INCREASED
Slide 9: Products
PRODUCTS ADVANCED OFFSET PRODUCTION MOST COMPLETE MATT BIGGEST UNCOATED IN HEART OF EUROPE COATED PAPER ASSORTMENT DESIGN BRAND • Top 3 brands in revenue share • No 1 in European High Quality Bookpaper Sales • No 1 in European Design Paper Sales NOVEL PRODUCTS Arctic Paper develops its packaging lin
Slide 10: Products: Geographical Split of Sales
PRODUCTS GEOGRAPHICAL SPLIT OF SALES Outside Europe 3% Germany Poland UK & IE Austria & CE France Baltics Rest of Europe 21% 16% 12% 11% 9% 5% 9% The Nordics Benelux 10% 4% 10 Q1 2022 / PAPER arcticpapergroup.com
Slide 11: Client Structure
CLIENT STRUCTURE Market segments/products portfolio/target grups Printing Houses Clients who purchase the group’s paper products directly. Advertising Industry Wholesalers Predominantly indirect customers, who use our Direct customers who purchase, stock and distribute products, i.e., Deutsche Bank,
Slide 12: Pulp Q1 2022
PULP 12 Q1 2022 arcticpapergroup.com
Slide 13: Market Data: Pulp PIX Indexes Europe
MARKET DATA PULP PIX INDEXES EUROPE Pulp – European pulp prices 1 340 1 342 1 400 1 300 1 260 AVERAGE PRICE Q1 2022 COMPARED TO Q1 2021 1 106 1 200 1 001 1 030 1 177 1 140 1 140 NBSK (long fiber): 35% higher 855 859 879 1 099 1 000 820 840 840 BHKP (short fiber): 50% higher 975 900 800 865 751 680 6
Slide 14: Operating Data: Pulp Production and Deliveries
OPERATING DATA PULP PRODUCTION (1,000 TONNE) Pulp production & deliveries 108 109 110 109 100 100 103 103 103 103 98 95 92 91 Q1 2022 total production: 103k tons 13% HIGHER THAN IN Q4 2021 19 19 19 20 20 20 20 21 21 21 21 22 21 22 SAME LEVEL AS Q1 2021 2 3 4 1 2 3 4 1 2 3 4 1 1 1 Q Q Q Q Q Q Q Q Q Q
Slide 15: Operating Data: Pulp Revenue and Prices
OPERATING DATA PULP SALES REVENUE (SEK mn) 660 660 Revenue and prices 617 585 570 508 542 542 Total revenue Q1 2022 (SEK 660mn) INCREASED BY 22% COMPARED TO Q1 2021 19 19 19 20 20 20 20 21 21 21 21 22 21 22 2 3 4 1 2 3 4 1 2 3 4 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q PULP SALES REVENUE PER TONNE (SEK) Av
Slide 16: Packaging Q1 2022
PACKAGING 16 Q1 2022 arcticpapergroup.com
Slide 17: Development: Packaging Paper Sales
DEVELOPMENT PACKAGING PAPER SALES DEVELOPMENT (t) 20 000 PACKAGING PAPERS: 16 000 Munken Kraft Uncoated packaging paper 12 000 G-Flexmatt 8 000 New coated product G-Flexmatt launched on the market in Q2 2021 4 000 0 2018 2019 2020 2021 last 12 months 17 Q1 2022 / PACKAGING arcticpapergroup.com
Slide 18: Power Q1 2022
POWER 18 Q1 2022 arcticpapergroup.com
Slide 19: Power Generation
POWER GENERATION Hydroelectric power plant in Munkedal produced over 8 GWh of green energy in Q1 2022. Biomass power plant in Grycksbo produced over 6 GWh of green energy and 217,000 GJ of green heat in Q1 2022. Solar farm in Kostrzyn, which has been running since August last year produced in Q1 202
Slide 20: Biomass boiler project and PV farms
Biomass boiler project will be completed by end of Q2 PV farms owned by Arctic Paper Polska, Arctic Paper SA and EC Kostrzyn – as a next step to carbon-neutral sales & administration units 20 Q1 2022 / POWER arcticpapergroup.com
Slide 21: Financial Performance Q1 2022
FINANCIAL PERFORMANCE 21 Q1 2022 arcticpapergroup.com
Slide 22: EBITDA Evolution 2014–2022 (PLN mn)
EBITDA EVOLUTION 2014 – 2022 (PLN mn) Effective hedging of both segments – to stabilize financial results 500 450 Q1 2022 EBITDA PLN 205.7mn 400 PLN 136mn HIGHER THAN Q4 2021 350 PLN 133mn HIGHER THAN Q1 2021 300 250 200 150 100 50 0 2015 2016 2017 2018 2019 2020 2021 2022* Paper Segment Pulp Segmen
Slide 23: Net Debt/EBITDA 2018–2022
NET DEBT/EBITDA 2018 – 2022 1,37 1,28 1,22 1,20 1,08 1,06 0,82 0,83 0,70 0,70 0,66 0,57 0,57 0,48 0,49 0,40 0,33 18 18 18 18 19 19 19 19 20 20 20 20 21 21 21 21 22 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 23 Q1 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 24: Net Profit per Share
NET PROFIT PER SHARE 12 rolling months* 3,16 1,78 1,22 0,85 0,47 0,14 17 18 19 20 21 22 1 1 1 1 1 1 Q Q Q Q Q Q * rolling 12 months net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares. 24 Q1 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 25: Focus Q1 2022
FOCUS 25 Q1 2022 arcticpapergroup.com
Slide 26: Focus: Outlook and Priorities
• Strong demand, expected high production utilization • Energy costs pressure – high volatility on gas market • Logistics challenges related to the limited avaliability of trucks & ships and high freight costs • Biomass boiler project will be completed by end of Q2 • Plan to invest in new production
Slide 27: The Road Map: The Way Forward
THE ROAD MAP THE WAY FORWARD Milestones ahead POWER Phase three PACKAGING of wind Expansion & solar park POWER of packaging Phase two plants of wind & POWER solar park Phase one POWER PACKAGING of wind First solar Fiber base power park POWER project Packaging Expansion Production plant of hydropower
Slide 28: Sharing Our Story With You
SHARING OUR STORY WITH YOU Hedged against Increasing share Predictable capex volatility of Growth of renewable and aimed at continued profitability & high in packaging fossil-free energy improvements fluctuation of energy Owner Established position Stable Sustainable of brands valued on the market w
Slide 29: New Strategy: 4P for Future Arctic
New strategy 4P FOR FUTURE ARCTIC packaging power paper pulp 29 Q1 2022 / FOCUS arcticpapergroup.com