25 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Jan 30, 2018
Slide 1: Year-end report presentation 2017
Year-end report presentation 2017 January 30, 2018
Slide 2: Ulf Larsson, CEO
Ulf Larsson, CEO
Slide 3: Summary Q4 2017
Summary Q4 2017 Strong market with increased prices Sales growth of 8% vs Q4 2016 • Price/mix +10%, volumes -1%, currency -1% EBITDA 1) up 31% vs Q4 2016, influenced by: • Higher prices • Lower operating costs • Negative currency effects – USD mainly • Planned extra cost due to Östrand project of SE
Slide 4: SCA's performance 2017
SCA’s performance 2017 EBITDA (SEKm) 1) Industrial ROCE 2) Proposed dividend (SEK) 3,761 10% / 13%* 1.50 (3,269) EBITDA margin 1) Net debt/EBITDA EPS (SEK) 22.6% 1.6x 2.67 (21.3%) Note: Figures in “(#)” refer to 2016. 1) Adjusted EBITDA and EBITDA margin. 2) Adjusted ROCE for the 4 industrial segmen
Slide 5: Strong and stable performance
Strong and stable performance Net sales (SEKm) EBITDA (SEKm) and EBITDA margin 1) 18 000 8% 4 000 5% -5% 16 000 3 683 3 741 3 761 16 664 3 500 16 152 15 412 15 373 14 000 3 269 3 000 12 000 2 500 10 000 2 000 8 000 25% 24% 23% 23% 1 500 21% 21% 6 000 8% 1 000 4 000 1 078 3 939 4 242 826 2 000 500 0
Slide 6: Forest Q4 2017 vs. Q4 2016
Forest Q4 2017 vs. Q4 2016 Net sales (SEKm) EBITDA (SEKm) 1) EBITDA margin 1) -1% 6% SCA’s region 26,1% 27,8% 1 296 1 287 338 358 • Balanced timber supply • Stable price development with minor increases 4.4m m3sub harvested from SCA’s forests during the year Preparations for Östrand start-up on sche
Slide 7: Wood Q4 2017 vs. Q4 2016
Wood Q4 2017 vs. Q4 2016 Net sales (SEKm) EBITDA (SEKm) 1) EBITDA margin 1) 5% 14% Strong market with continued price increases 1 426 12,9% 1 361 184 11,8% Low inventory levels 161 Sales up 5% • Higher prices EBITDA 1) up 14% Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 • Higher prices Price deve
Slide 8: Pulp Q4 2017 vs. Q4 2016
Pulp Q4 2017 vs. Q4 2016 Net sales (SEKm) EBITDA (SEKm) 1) EBITDA margin 1) 1% 46% Strong pulp market with price increases 149 668 672 22,2% Östrand project on plan 102 • Planned start-up in June 2018 15,3% • SEK 5.5bn invested up to Q4, out of SEK 7.8bn in total • Evaporation plant up and running f
Slide 9: Paper Q4 2017 vs. Q4 2016
Paper Q4 2017 vs. Q4 2016 Net sales (SEKm) EBITDA (SEKm) 1) EBITDA margin 1) 11% 74% Strong Kraftliner market with increasing prices 2 220 21,7% 1 998 481 All time high production in Obbola 13,8% 276 Investment in increased white-top capacity in Munksund Structural challenges for publication paper r
Slide 10: Toby Lawton, CFO
Toby Lawton, CFO
Slide 11: Income statement
Income statement Quarter Full year SEKm Q4 2017 Q4 2016 Change 2017 2016 Change Net sales 4,242 3,939 8% 16,664 15,373 8% EBITDA 1) 1,078 826 31% 3,761 3,269 15% EBITDA 1) margin 25.4% 21.0% 4.4 p.p. 22.6% 21.3% 1.3 p.p. EBIT 1) 786 539 46% 2,624 2,155 22% EBIT 1) margin 18.5% 13.7% 4.8 p.p. 15.7% 1
Slide 12: Proposed dividend
Proposed dividend Proposed dividend (SEK) Pay-out ratio EPS (SEK) 1.50 56% 2.67 12
Slide 13: Contribution by segment
Contribution by segment Forest Wood Pulp Paper Net sales (SEKm) 8 226 8 548 8 434 7 744 5 994 5 187 5 108 4 978 5 070 5 114 5 315 5 441 2 518 2 760 2 492 2 542 1 998 2 220 1 296 1 287 1 361 1 426 668 672 2014 2015 2016 2017 Q4 Q4 2014 2015 2016 2017 Q4 Q4 2014 2015 2016 2017 Q4 Q4 2014 2015 2016 201
Slide 14: Net sales Q4 2017 vs. Q4 2016
Net sales Q4 2017 vs. Q4 2016 Positive for Wood, Pulp and Kraftliner SEK 10% -1% -1% 4,242m SEK 3,939m + 8% Net sales Price/Mix Volume Currency Net sales Q4 2016 Q4 2017 14
Slide 15: EBITDA Q4 2017 vs. Q4 2016
EBITDA 1) Q4 2017 vs. Q4 2016 Higher prices for Wood, Pulp and Kraftliner SEK SEK SEK SEK SEK +64m -53m SEK +390m -11m +14m -152m SEK 1,078m Revaluation of electricity certificates Q4 2016 SEK Maintenance stops, Östrand 826m project related costs, additional corporate functions, one-off positive ite
Slide 16: Cash flow
Cash flow SEKm Q4 2017 Q4 2016 2017 2016 Operating cash surplus 978 713 3,145 2,584 Change in working capital 96 167 -143 374 Current capital expenditures -219 -272 -638 -959 Other operating cash flow -13 -38 -91 -82 Operating cash flow 842 570 2,273 1,917 Strategic capital expenditures -779 -775 -2
Slide 17: Östrand project costs 2018
Östrand project costs 2018 Project related costs • Project related costs of SEK 60m (150), of which SEK 10m (50) depreciation • Primarily during the first half of 2018 Maintenance stops • Production start-up is scheduled for June 2018, following an extended maintenance stop of about 45 days • Expect
Slide 18: Balance sheet
Balance sheet SEKm Dec 31, 2017 Dec 31, 2016 Forest assets according to IAS 41 1) 31,386 30,770 Deferred tax relating to Forest assets -6,905 -6,769 Forest assets, net of deferred tax 24,481 24,001 Working capital 2,861 2,740 Working capital/Net sales 2) 18% 18% Other capital employed 15,377 13,386
Slide 19: Summary Q4 2017
Summary Q4 2017 Strong market with increased prices Sales growth of 8% vs Q4 2016 EBITDA 1) up 31% vs Q4 2016 Östrand project progressing according to plan Cost control and stable production Profitable growth – investment in Munksund, delivering Östrand Note: 1) Adjusted EBITDA. 19
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix WSCA
Slide 22: Net sales 2017 vs. 2016
Net sales 2017 vs. 2016 Positive for Wood, Pulp Positive for Wood and Kraftliner, flat for and Kraftliner Publication paper, negative for Pulp SEK SEK 6% 3% -1% 16,664m 15,373m + 8% Net sales Price/Mix Volume Currency Net sales 2016 2017 22
Slide 23: EBITDA 2017 vs. 2016
EBITDA 1) 2017 vs. 2016 Higher prices for Wood, Pulp and Kraftliner SEK SEK SEK SEK SEK SEK +828m +54m -113m -19m -23m -235m SEK 3,761m SEK 3,269m Increased prices for OCC, latex, recycled fiber Maintenance stops, Östrand project related costs, additional corporate functions + 15% EBITDA margin EBIT
Slide 24: Contribution by segment and quarter
Contribution by segment and quarter Forest Wood Pulp Paper 2 220 Net sales (SEKm) 2 096 2 072 2 046 1 998 1 998 1 889 1 859 1 637 1 567 1 496 1 426 1 364 1 361 1 320 1 312 1 296 1 287 1 264 1 261 1 261 1 234 1 210 1 187 672 668 668 644 641 600 585 556 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 25: A leading industrial ecosystem, driven by the force of the forest
A leading industrial ecosystem, driven by the force of the forest 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 recen