Holmen Ab Class A · OMXSTO:HOLM_A
Holmen Ab Class A — Q2 2023 Earnings Presentation
31 slides from Holmen Ab Class A's earnings presentation, Aug 16, 2023
Slide 1: Interim report presentation January-June 2023
Interim report presentation January-June 2023 Henrik Sjölund, CEO Anders Jernhall, CFO August 17th, 2023
Slide 2: Strong result despite soft market conditions
Group Strong result despite soft market conditions Renewable energy & forest accounts for half of the result Operating profit* Operating profit* SEKm SEKm 8 000 2 500 7 000 2 000 6 000 5 000 1 500 4 000 7 262 1 000 2 101 1 921 6 418 3 000 1 617 1 622 1 737 1 129 1 185 1 138 2 000 4 061 500 898 2 476
Slide 3: 2.6 bn dividend and 1.0 bn share-buyback in Q2
Group 2.6 bn dividend and 1.0 bn share-buyback in Q2 Net debt of 2.6 bn Capital employed SEKm Cash flow 8 000 7 000 6 000 5 000 4 000 3 000 % Debt/equity ratio 2 000 25 20 1 000 15 0 10 18 19 20 21 22 M12** 5 Dividend Capital expenditure* 0 Acquisitions Buy-back of own shares 18 19 20 21 22 Q2-23 Ca
Slide 4: Forest
Forest 1.3 million ha total land area 1.0 million ha productive forest land
Slide 5: Scarcity of pulpwood & timber in the Nordics
Forest Scarcity of pulpwood & timber in the Nordics Purchase price Index (Holmen average) 170 160 1 Mm3 150 140 0.2 Mm3 130 120 3 Mm3 1.5-2 110 Mm3 7 Mm3 100 90 2 Mm3 80 70 2 Mm3 60 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Saw logs Pulpwood 5
Slide 6: Prices 30% higher than long term trend
Forest Prices 30% higher than long term trend Price SEK/m 3sub 700 600 500 400 300 200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q2-23 6
Slide 7: Price increases translating into higher profits
Forest Price increases translating into higher profits No forest property sales in 2023 SEKm SEKm 600 1 600 1 400 500 1 200 400 1 000 300 800 1 495 1 490 513 1 367 1 401 600 1 185 1 172 200 402 390 349 346 351 296 323 305 400 100 200 0 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 18 19 20
Slide 8: Paperboard
Paperboard 550 000 tonnes per year
Slide 9: Weak demand but stable prices
Paperboard Weak demand but stable prices European SBB and FBB demand Prices kton Index 3 500 250 3 250 200 3 000 150 2 750 100 2 500 50 2 250 M12* 0 2014 2016 2018 2019 2020 2021 2015 2017 2022 2014 2015 2016 2017 2018 2019 2021 2022 2023 2020 FBB Pulp *Q3-22 – Q2-23. 9 Source: RISI, FOEX and CEPI
Slide 10: Grow our board business step-by-step
Paperboard Grow our board business step-by-step Backed by strong market, wood & energy position 10
Slide 11: Maintenance stop & no power gains in Q2
Paperboard Maintenance stop & no power gains in Q2 Negative impact from soft market conditions SEKm % SEKm % 500 50 1 200 25 400 40 1 000 20 300 30 800 15 200 400 20 600 1 081 281 274 299 10 256 100 10 400 812 802 152 689 673 112 44 5 0 0 200 435 -49 -100 -10 0 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22
Slide 12: Paper
Paper 1 million tonnes per year
Slide 13: Low utilisation rates put pressure on prices
Paper Low utilsation rates put pressure on prices Paper prices Printing paper demand WE EUR/ton kton 1 200 16 000 14 000 1 000 12 000 10 000 800 8 000 600 6 000 4 000 400 2 000 200 0 13 14 15 16 17 18 19 20 21 22 M12* Uncoated magazine Coated magazine Newsprint Uncoated magazine & book Coated magazi
Slide 14: Fibre & energy availability key to competitiveness
Paper Fibre & energy availability key to competitiveness Low utilisation gives poor fixed cost absorbation Recycled fibre prices Uncoated publication paper capacity (WE) EUR/ton 350 Germany 300 Sweden Norway 250 Finland 200 Belgium UK 150 Switzerland 100 France 50 Netherlands Spain thousands 0 tons
Slide 15: Profit remains at elevated levels
Paper Profit remains at elevated levels SEKm % SEKm % 1 000 50 3 500 175 3 000 150 800 40 2 500 125 600 30 2 000 100 400 832 836 20 767 716 659 1 500 3 043 75 2 714 200 399 10 1 000 50 16 100 0 0 500 25 -9 329 509 73 70 -200 -10 0 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 18 19 20 21 2
Slide 16: Wood Products
Wood Products 1.5 million m3 per year
Slide 17: Wood product prices stabilised at good level
Wood Products Wood product prices stabilised at good level Price of wood tracks concrete over time Index 400 350 300 250 200 150 100 50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Wood Products Concrete for construction Steel 17 Source: Macrobond and Swedish Forest Ind
Slide 18: Buildings accounts for 38% of global emissions
Wood Products Buildings accounts for 38% of global emissions EU implementing policies to force concrete to become green Global energy-related CO2 emissions (2020) Other 6% Transport Building 23% 38% Sector 8.7 Gt 23% 10% Other Industry Other Construction Industry 18 Source: GABC 2021 Report
Slide 19: Wood availability a concern in many regions
Wood Products Wood availability a concern in many regions World's largest exporter of sawn timber Million m 3 2021 35 30 25 20 15 10 5 0 Russia Canada Sweden Germany Finland Austria Belarus Chile The Czech Latvia Republic 19 Source: FAO
Slide 20: Good selling prices offset by high log cost
Wood Products Good selling prices offset by high log cost SEKm % MSEK % 600 60 2 000 100 500 50 1 500 75 400 40 300 582 598 30 518 529 1 000 50 200 20 1 668 350 100 10 1 237 177 500 25 23 55 0 0 -67 62 246 185 187 -100 -10 0 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 18 19 20 21 22 M12*
Slide 21: Renewable Energy
Renewable Energy 1.8 TWh per year
Slide 22: Energy still a scarce resource in Europe
Renewable Energy Energy still a scarce resource in Europe Energy prices EUR/MWh 600 500 400 300 200 100 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 South Sweden (SE3) North Sweden (SE2) Germany Gas power 22 Source: Macrobond
Slide 23: The world has been fossil fueled
Renewable Energy The world has been fossil fueled Fossil energy has quadrupled last 50 years Global energy consumption by source TWh 180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0 Oil Coal Gas Nuclear Renewables Source: Our World in Data
Slide 24: Massive build-out of green electricity needed
Renewable Energy Massive build-out of green electricity needed European energy consumption Other Electricity Fossil energy 24 Source: Our World in Data
Slide 25: Permit for 14 wind turbines in Blisterliden
Renewable Energy Permit for 14 wind turbines in Blisterliden Preparing for investment decision 2024 25
Slide 26: Low wind & hydro in Q2
Renewable Energy Low wind & hydro in Q2 Market prices in northern Sweden averaged ~500 SEK/MWh SEKm % SEKm % 500 125 1 250 30 400 100 1 000 20 300 75 750 463 1 093 200 50 500 1 006 10 282 100 214 25 250 168 162 135 336 347 112 181 215 66 62 0 0 0 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-
Slide 27: Hydro flexibility pays off
Renewable Energy Hydro flexibility pays off Support services, timing SEK/MWh and Gurantees of Origin 600 500 400 300 200 100 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 27
Slide 28: Growing a sustainable future
Growing a sustainable future
Slide 29: Growing forests with increased biodiversity
Growing forests with increased biodiversity m 3 growing stock Forest holdings Development of biodiversity solid over bark/ha 140 100 120 95 100 90 80 85 60 80 40 20 75 0 70 1948 1955 1965 1975 1988 1993 2000 2010 2020 2022 1970 1980 1990 2000 2010 2022 Sweden Europe Global average 29 Source: Holmen
Slide 30: We grow houses
We grow houses Leftovers are converted into renewable packaging and paper We harvest the energy that blows and runs through our forests 1.3 Carbon sequestration 7.2 Million tonnes CO2e + 4.7 Storage and substitution from Million Million tonnes tonnes CO2e wood products (3.1), paperboard CO2e in 2022
Slide 31: holmen.com
HOLMEN holmen.com