25 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Oct 30, 2018
Slide 1: October 30, 2018
October 30, 2018
Slide 2: Ulf Larsson, CEO
W YAUUE a ‘Ulf Larsson, C EO WSCA
Slide 3: Stable market with higher prices
Stable market with higher prices Sales growth of 12% vs Q3 2017 • Price/mix +14%, volumes -9%, currency 7% EBITDA up 48% vs Q3 2017 • Higher prices • Positive currency effects • Higher prices for wood raw material Stable wood supply to industries Östrand ramp-up progressing according to plan 3
Slide 4: EBITDA, Industrial ROCE and EBITDA development
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,549 15% 48% 1,549 1,175 1,049 1,078 1,034 33% EBITDA margin Net debt/EBITDA 25% 27% 25% 33% 1.4x 22% Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Note: 1) ROCE for the industrial segments; Wood, Pulp and Paper. ROCE calculated as LTM. 4
Slide 5: Forest: Inventory build-up to meet Östrand's increasing pulpwood demand
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 15% -8% Stable wood supply to industries 1,455 25.1% 316 1,261 292 20.1% Continued price increases Inventory build-up to meet Östrand’s increasing pulpwood demand Sales up 15% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 • Increased volumes to the expa
Slide 6: Wood: Increased prices and low inventory levels
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 9% 48% Increased prices and low inventory levels 1,712 276 16.1% 1,567 Sales up 9% 11.9% 187 • Higher prices • Positive currency effects • Lower volumes due to low inventory levels Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 EBITDA up 48% • Higher pri
Slide 7: Östrand ramp-up: average daily NBSK production
Average daily NBSK production (tonnes) Full capacity 2,500 Full NBSK capacity of 900kt/year 12 months 18 months ramp-up ramp-up Ramp-up period of 12-18 months 2,000 Actual • 2018 volumes in-line with 2017 1,500 • 2020 first full year with full capacity 1,000 On track 500 • Production – Q3, 147k tonn
Slide 8: Pulp: Strong pulp market with higher prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 15% 73% Strong pulp market with higher prices 743 36.7% 644 273 Sales up 15% • Higher prices 24.5% 158 • Positive currency effects • Lower deliveries due to inventory build-up EBITDA up 73% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 • Higher prices •
Slide 9: Paper: Increased prices for both Kraftliner and Publication paper
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 15% 66% Increased prices for both Kraftliner and 2,413 728 30.2% Publication paper 2,096 20.9% Sales up 15% 439 • Higher prices • Positive currency effects EBITDA up 66% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 • Higher prices Price development – P
Slide 10: Toby Lawton, CFO
Slide 11: Quarter income statement
Quarter SEKm Q3 2018 Q3 2017 Change Net sales 4,759 4,231 12% EBITDA 1,549 1,049 48% EBITDA margin 32.5% 24.8% 7.7 p.p. EBIT 1,226 776 58% EBIT margin 25.8% 18.3% 7.5 p.p. Financial items -8 -11 Profit before tax 1,218 765 59% Tax -227 -138 Profit for the period 991 627 58% Earnings per share, SEK 1
Slide 12: Net sales and EBITDA by segment
Forest Wood Pulp Paper 2,383 2,426 2,413 2,220 Net sales (SEKm) 2,096 2,072 2,046 1,998 1,846 1,712 1,637 1,567 1,503 1,455 1,426 1,364 1,361 1,312 1,298 1,296 1,287 1,261 1,210 1,162 743 672 668 644 641 589 585 485 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 13: Net sales development Q3 2017 to Q3 2018
Lower volumes for Pulp, Positive for all segments Publication paper and Wood SEK 14% -9% 4,759m 7% SEK 4,231m Positive EUR and USD + 12% Net sales Price/Mix Volume Currency Net sales Q3 2017 Q3 2018 13
Slide 14: EBITDA bridge Q3 2017 to Q3 2018
Higher prices Higher costs for for all segments wood raw material EUR and USD positive SEK SEK +652m -70m SEK -241m SEK SEK SEK +56m 1,549m SEK +116m -13m Lower volumes for Pulp, Publication Sale of wind power project. SEK paper and Wood Lower costs for planned 1,049m Higher electricity price. maint
Slide 15: Cash flow
Quarter Jan-Sep SEKm Q3 2018 Q3 2017 2018 2017 EBITDA 1,549 1,049 3,758 2,570 Revaluation of biological assets and other non cash flow items 1) -195 -182 -541 -403 Operating cash surplus 1,329 867 3,192 2,167 Change in working capital -281 -280 -626 -239 Current capital expenditures -254 -129 -530 -
Slide 16: Östrand ramp-up and competitiveness
Production began in June according to plan Ramp-up period of 12-18 months • 2018 – volumes in-line with 2017 • 2020 – first full year at full capacity World-class competitiveness • Doubled NBSK capacity • Fixed cost reduction of SEK 350 per tonnes compared to pre project level • Improved energy bala
Slide 17: Project related costs (indirect) and ramp-up effects
Project related costs (indirect) EBITDA impact Q1 18 Q2 18 Q3 18 2018e 2017 • Project related costs of SEK 75m (150), of which SEK 20m (50) depreciation Project related costs 16 15 13 55 100 Expansion and maintenance stops • Production began in June 2018, following an expansion stop Expansion/ 0 236
Slide 18: Capital employed and net debt
SEKm Sep 30, 2018 Dec 31, 2017 Forest assets according to IAS 41 1) 31,901 31,386 Deferred tax relating to Forest assets -6,572 -6,905 Forest assets, net of deferred tax 25,329 24,481 Working capital 3,522 2,861 Working capital/Net sales 2) 17% 18% Other capital employed 16,446 15,377 Total capital
Slide 19: Stable market with higher prices
Stable market with higher prices Sales growth of 12% vs Q3 2017 EBITDA up 48% vs Q3 2017 Stable wood supply to industries Östrand ramp-up progressing according to plan 19
Slide 20: SCA Frontier
Slide 21: Appendix
Appendix WSCA
Slide 22: Net sales and EBITDA and EBITDA margin
Net sales (SEKm) EBITDA (SEKm) and EBITDA margin 5,000 18,000 18,071 4,836 4,500 16,000 16,664 16,152 15,412 15,373 4,000 14,000 3,500 3,781 3,648 12,000 3,385 3,000 3,300 27% 10,000 23% 2,500 22% 22% 21% 8,000 2,000 6,000 1,500 4,000 1,000 2,000 500 0 0 2014 2015 2016 2017 LTM 2014 2015 2016 2017 L
Slide 23: Net sales and EBITDA by segment, 2014-LTM
Forest Wood Pulp Paper Net sales (SEKm) 9,442 8,226 8,548 8,434 7,744 6,487 5,994 5,187 5,108 4,978 5,070 5,202 5,114 5,315 5,441 2,518 2,760 2,492 2,542 2,489 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM EBITDA (SEKm) and EBITDA margin 1) 2,413 35%
Slide 24: Q&A
Slide 25: are subject to certain risks and uncertainties that could negatively affect our business. Please
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 recent annual report for a better understanding of these risks and unce