Arctic Paper S.a. · GPW:ATC
Arctic Paper — Q3 2022 Earnings Presentation
32 slides from Arctic Paper's earnings presentation, Nov 9, 2022
Slide 1: Financial Results Q3 2022
Q3 9/11/2022 FINANCIAL RESULTS Q3 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 W arsaw circumstances whic
Slide 3: Agenda
PRESENTERS: AGENDA Michał Jarczyński / CEO Arctic Paper Göran Eklund / CFO Arctic Paper Summary Q3 2022 Paper Packaging Financial performance Pulp Power Focus 3 Q3 2022 arcticpapergroup.com
Slide 4: Summary Q3 2022
SUMMARY Q3 2022 Arctic Paper Group Q3 2022 vs. Q3 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 1 402.1 889.7 298.2 102.1 245.1 50.6 29.1% 10.3% (Q3 2022) (Q3 2021) (Q3 2022) (Q3 2021) (Q3 2022) (Q3 2021) (Q3 2022) (Q3 2021) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pulp s
Slide 5: Summary YTD Sep 2022
SUMMARY YTD SEP 2022 Arctic Paper Group YTD SEP 2022 vs. YTD SEP 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 3 809.2 2 459.0 834.0 258.5 481.4 105.3 29.1% 10.3% (YTD SEP (YTD SEP (YTD SEP (YTD SEP (YTD SEP (YTD SEP (YTD SEP (YTD SEP 2022) 2021) 2022) 2021) 2022) 2021) 2022) 2
Slide 6: Paper Q3 2022
PAPER 6 Q3 2022 arcticpapergroup.com
Slide 7: Market Data: Fine Paper Prices, German Market
GRAPHIC FINE PAPER PRICES – GERMAN MARKET MARKET DATA Fine paper average market prices 1400 1300 1200 SEP 2022 COMPARED TO JUN 2022 1100 UWF average price change +6% 1000 CWF average price change +6% 900 800 SEP 2022 COMPARED TO SEP 2021 700 UWF average price change +47% 600 CWF average price change
Slide 8: Operating Data: Production Capacity and Paper Sales Volume
PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS OPERATING DATA 96% 92% 99% 99% 90% 96% 69% Average Q3 2022 use of production capacity: 96% 4% LESS THAN IN Q2 2022 3% LESS THAN IN Q3 2021 Q3 2022 total sales volume: 168k tons PAPER SALES VOLUME 2% HIGHER THAN IN Q2 2022 1% LESS THAN IN Q3 2021 171 169 169
Slide 9: Operating Data: Paper Sales Revenue
PAPER SALES REVENUE (PLN mn) OPERATING DATA 1 042 1 042 820 645 645 564 588 547 492 Total revenue Q3 2022 (PLN 1 042mn) INCREASED BY 62% COMPARED TO Q3 2021 Average price Q3 2022 (PLN 6.19k) INCREASED BY 63% COMPARED TO AVERAGE IN Q3 2021 PAPER SALES REVENUE PER TONNE (PLN k)* 6,19 4,93 3,62 3,81 3,
Slide 10: Products
PRODUCTS ADVANCED OFFSET MOST COMPLETE MATT BIGGEST UNCOATED PRODUCTION COATED PAPER ASSORTMENT DESIGN BRAND IN HEART OF EUROPE • 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 11: 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% 11 Q3 2022 / PAPER arcticpapergroup.com
Slide 12: Client Structure
CLIENT STRUCTURE Market segments/products portfolio/target groups 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 13: Innovations
INNOVATIONS New „barrier paper” Amber Care ™ Packaging paper with applied barriers, e.g. greaseproof, Amber CareTM special paper with antibacterial and waterproof, high temperature resistant, moisture resistant antiviral properties New „nano fiber paper” Graphic paper with nano fibres to increase op
Slide 14: Pulp Q3 2022
PULP 14 Q3 2022 arcticpapergroup.com
Slide 15: Market Data: European Pulp Prices
PULP PIX INDEXES EUROPE MARKET DATA 1 498 Pulp – European pulp prices 1 430 1 342 1 340 1 300 1 260 1 380 1 308 AVERAGE PRICE Q3 2022 COMPARED TO Q3 2021 1 030 1 177 1 140 1 099 1 140 NBSK (long fiber): 11% higher 855 859 879 820 840 840 BHKP (short fiber): 20% higher 865 751 680 680 680 680 680 AVE
Slide 16: Operating Data: Pulp Production and Deliveries
PULP PRODUCTION (1,000 TONNE) OPERATING DATA Pulp production & deliveries 109 110 109 111 100 103 103 98 95 96 96 92 91 92 Q3 2022 total production: 96k tons 13% LOWER THAN IN Q2 2022 4% HIGHER THAN IN Q3 2021 PULP DELIVERIES (1,000 TONNE) Q3 2022 total deliveries: 96k tons 10% LOWER THAN IN Q2 2022
Slide 17: Operating Data: Pulp Sales Revenue
PULP SALES REVENUE (SEK mn) OPERATING DATA 806 Revenue and prices 806 660 585 542 570 570 508 Total revenue Q3 2022 (SEK 806mn) INCREASED BY 41% COMPARED TO Q3 2021 PULP SALES REVENUE PER TONNE (SEK) Average price in Q3 2022 (SEK 7.8k per tonne) INCREASED BY 26% COMPARED TO Q3 2021 7 750 6 162 6 597
Slide 18: Pulp – Replacement Material for Plastic
PULP – REPLACEMENT MATERIAL FOR PLASTIC Pulp Sales (Rottneros) by application 2021 Tissue paper 7% Board and packaging Special applications 26% 14% Electrotechnical applications 15% Filters 21% Printing and writing 17% 18 Q3 2022 / PULP arcticpapergroup.com
Slide 19: Packaging Q3 2022
PACKAGING 19 Q3 2022 arcticpapergroup.com
Slide 20: Packaging Paper Sales Development
PACKAGING PAPER SALES DEVELOPMENT (t) DEVELOPMENT 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 20 Q3 2022 / PACKAGING arcticpapergroup.com
Slide 21: Power Q3 2022
POWER 21 Q3 2022 arcticpapergroup.com
Slide 22: Power Generation
POWER GENERATION Hydroelectric power plant in Munkedal produced over 9 GWh of green energy in YTD SEP 2022. Biomass power plant in Grycksbo produced over 14 GWh of green energy and 582,000 GJ of green heat in YTD SEP 2022. Solar farm in Kostrzyn and new installed farm in Grycksbo produced in YTD SEP
Slide 23: New multifuel boiler in Munkedal and PV farms
The new flexible multifuel boiler in Munkedal went into operation in September. New PV farms instalations in our mills in Grycksbo and Munkedal. 23 Q3 2022 / POWER arcticpapergroup.com
Slide 24: Financial Performance Q3 2022
FINANCIAL PERFORMANCE 24 Q3 2022 arcticpapergroup.com
Slide 25: EBITDA Evolution 2015 – 2022
EBITDA EVOLUTION 2015 – 2022 (PLN mn) Effective hedging of both segments – to stabilize financial results 1 000 900 Q3 2022 EBITDA PLN 298.2mn 800 PLN 32mn LOWER THAN Q2 2022 700 PLN 196mn HIGHER THAN Q3 2021 600 500 400 300 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022* Paper Segment Pulp Segme
Slide 26: Net Debt/EBITDA 2018 – 2022
NET DEBT/EBITDA 2018 – 2022 1,22 1,28 1,20 1,06 0,82 0,83 0,70 0,70 0,57 0,57 0,66 0,48 0,49 0,40 0,33 -0,02 -0,22 26 Q3 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 27: Net Profit per Share
NET PROFIT PER SHARE 12 rolling months* 8,68 1,74 1,23 0,56 0,53 * rolling 12 months net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares. 27 Q3 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 28: Focus Q3 2022
FOCUS 28 Q3 2022 arcticpapergroup.com
Slide 29: Uncertain macroeconomic environment and energy prices
• Uncertain macroeconomic environment, demand can be severely affected by cost inflation and high energy prices • The Group’s stable position on the energy market is prerequisite for the strong results • Remaining high volatility on gas market, very high costs for raw materials and transport • The n
Slide 30: The Road Map: Milestones Ahead
THE WAY FORWARD THE ROAD MAP 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 31: 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 32: New Strategy: 4P for Future Arctic
New strategy 4P FOR FUTURE ARCTIC packaging power paper pulp 32 Q3 2022 / FOCUS arcticpapergroup.com