Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Q4 2009 Earnings Presentation
41 slides from Stora Enso Oyj Class A's earnings presentation, Feb 4, 2010
Slide 1: Financial results Q4 & full year 2009
Financial results Q4 & full year 2009 4 February 2010
Slide 2: Forward-looking statements disclaimer
It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or
Slide 3: Contents
Contents Overview Financial results Q4 2009 Future Markets Summary Financial results Q4 & full year 2009 4 February 2010 3
Slide 4: Overview
Overview Financial results Q4 2009
Slide 5: Clearly improved earnings and record cash flow on Q4
Clearly improved earnings and record cash flow on Q4 Early actions pay off • Clearly improved earnings on Q4 to EUR 138 million (EUR 28 million) year-on-year • Costs down by EUR 229 million • Record cash flow from operations EUR 496 million • Consumer Board back on stable earnings path • Newsprint s
Slide 6: Financial results Q4 2009
Financial results Q4 2009
Slide 7: Summary financials Q4 2009
Summary financials Q4 2009 % Change % Change EUR million IV/09 III/09 IV/08 Q409/Q408 Q409/Q309 Sales 2 399 2 231 2 603 -7.8 7.5 EBITDA, excl. NRI and FV 242 256 163 48.5 -5.5 Operating profit, excl. NRI and FV 138 132 28 n/m 4.5 Profit before tax, excl. NRI 123 106 -81 251.9 16.0 Earnings per share
Slide 8: EBIT excl NRI and fair valuation
EBIT excl NRI and fair valuation Q1 2008 – Q4 2009 EUR million % Financial results Q4 & full year 2009 4 February 2010 8
Slide 9: Operative Working Capital by Quarters
Operative Working Capital by Quarters 2007 – 2009 EUR million Continuing operations Operative Working Capital at the end of Q Working Capital/Sales ratio Financial results Q4 & full year 2009 4 February 2010 9
Slide 10: Operating cash flow
Operating cash flow Q1 2008 – Q4 2009 EUR million Cash flow from operations Cash flow after investing activities including restructuring pay-out Continuing operations Financial results Q4 & full year 2009 4 February 2010 10
Slide 11: Net Debt reduction
Net Debt reduction Q4 2008 – Q4 2009 EUR million FY 2009 net debt reduction EUR 530 million Financial results Q4 & full year 2009 4 February 2010 11
Slide 12: Strong liquidity continues
Strong liquidity continues • Cash and cash equivalents EUR 877 million at end of 2009 • Debt maturities in 2010 EUR 850 million and in 2011 EUR 560 million • Committed credit facility EUR 1.4 billion fully undrawn, no covenants • Potential EUR 600 million available as Finnish pension loans • Net deb
Slide 13: Future
Future
Slide 14: Feasibility study starts at Punta Pereira in Uruguay
Feasibility study starts at Punta Pereira in Uruguay • Possible future Uruguayan pulp mill • Punta Pereira due to: – economic, operational, social and environmental reasons • Final decision by the Board of Directors Financial results Q4 & full year 2009 4 February 2010 14
Slide 15: Punta Pereira
Stora Enso ENCE Arauco Other Punta Pereira
Slide 16: Expansion platforms
Expansion platforms Guangxi, China 93 000 land 63 000 ha Eucalyptus Veracel, Brazil (JV) 234 000 ha land 91 000 ha Eucalyptus Rio Grande do Sul, Brazil 45 000 ha land 21 000 ha Eucalyptus Uruguay (JV) 248 000 ha land 122 000 ha Eucalyptus, Pine
Slide 17: Breakdown by segment
Breakdown by segment Full year 2009 Sales, EUR 8 945 million Operating profit, EUR 321 million* *excluding non-recurring items and fair valuations Financial results Q4 & full year 2009 4 February 2010 17
Slide 18: Markets
Markets Financial results Q4 2009
Slide 19: Demand change – Western Europe
Demand change – Western Europe Publication paper, 3-month moving average (y-o-y) Newsprint SC paper Coated magazine paper % 15 10 5 0 -5 -10 -15 -20 -25 -30 Source: Cepiprint Financial results Q4 & full year 2009 4 February 2010 19
Slide 20: Demand change – Western Europe
Demand change – Western Europe Fine paper, 3-month moving average (y-o-y) Uncoated fine paper Coated fine paper % 5 0 -5 -10 -15 -20 Source: Cepifine Financial results Q4 & full year 2009 4 February 2010 20
Slide 21: Demand change – Western Europe
Demand change – Western Europe Consumer Board, 3-month moving average (y-o-y) Folding Boxboard White Lined Chipboard % 10 5 0 -5 -10 -15 -20 Source: CEPI Cartonboard Financial results Q4 & full year 2009 4 February 2010 21
Slide 22: Staying on the path
Staying on the path • Pricing quality • Temporary curtailments • Permanent capacity closures if necessary Financial results Q4 & full year 2009 4 February 2010 22
Slide 23: Summary
Summary Financial results Q4 2009
Slide 24: Summary
Summary • Strong: cash flow and balance sheet • Improving: cost base and speed • Growth: packaging and low-cost pulp Financial results Q4 & full year 2009 4 February 2010 24
Slide 25: STORAENSO
STORAENSO
Slide 26: Key annual figures
Key annual figures 2008 – 2009 % Change EUR million 2009 2008 2009/2008 Sales 8 945 11 029 -18.9 EBITDA, excl. NRI and FV 823 1 027 -19.9 Operating profit, excl. NRI and FV 321 388 -17.3 Profit before tax, excl. NRI 194 152 27.6 Earnings per share, excl. NRI (EUR) 0.19 0.18 5.6 ROCE, excl. NRI (%) 3
Slide 27: Change in operating profit excl. NRI & fair valuations
Change in operating profit excl. NRI & fair valuations Q4 2008 – Q4 2009 EUR million 150 Costs down by EUR +17 +138 229 million* +42 -30 +21 -1 100 +10 +25 +117 50 +28 -94 0 - 50 -25 +26 -19 +19 - 100 - 150 Q4 Sales Sales Sales Energy Logistics Fibre Chemicals Oth Person- Mainte- Depr. Other Assoc Q
Slide 28: Change in operating profit excl. NRI & fair valuations
Change in operating profit excl. NRI & fair valuations 1-12 2008 – 1-12 2009 EUR million 400 +388 -174 Costs down by EUR 767 million* +124 -3 +23 +321 -159 200 +56 +176 -524 0 +53 +73 +247 - 200 - 400 +55 -14 - 600 1-12 Sales Sales FX Sales Energy Logistics Fibre Chemicals Oth Person- Mainte- Depr.
Slide 29: Change in operating profit excl. NRI & fair valuations
Change in operating profit excl. NRI & fair valuations Q3 2009 – Q4 2009 EUR million +13 -8 200 -22 +9 +22 +6 -57 160 +2 +15 +33 +138 +132 120 -1 -6 80 40 0 Q3 Sales Sales FX Sales Energy Logistics Fibre Oth Personnel Mainte- Depr. Other Assoc Q4 2009 Price & Volume Variable & Oth FC nance 2009 Geog
Slide 30: Operating profit by business area
Operating profit by business area % Change % Change EUR million IV/09 III/09 VI/08 Q409/Q408 Q409/Q309 Newsprint 41 35 53 -22.6 17.1 % of sales 11.4 10.5 12.8 -10.9 8.6 Magazine Paper 4 31 20 -80.0 -87.1 % of sales 0.9 6.5 3.7 -75.7 -86.2 Fine Paper 22 20 -10 320.0 10.0 % of sales 4.5 4.5 -2.1 314.3
Slide 31: Composition of costs
Composition of costs 1-12/2008 – 1-12/2009 1-12/08 1-12/09 Variable costs 68% 64% Fibre 36% 32% Chemicals and Fillers 10% 10% Energy 9% 10% Production Service and Material 2% 3% Logistics & Commissions 10% 9% Fixed costs 27% 30% Personnel 15% 15% Other 12% 15% Depreciation 6% 6% Total costs 100% 100
Slide 32: Non-recurring items for Q4 2009
Non-recurring items for Q4 2009 NRI Segment EUR million Fixed asset impairment test Magazine Paper -26 Sunila provision release Magazine Paper 10 Magazine Paper Total -16 Impairment of PVO subsidiary shares Other -15 Market Court penalty Other -30 Uruguay negative goodwill recognition Other 19 Other
Slide 33: Capital expenditure and depreciation
Capital expenditure and depreciation Q1 2008 – Q4 2009 EUR million % Capex FY 2009 EUR 424 m Total operations Depreciation excluding Impairments of Goodwill and Fixed Assets Financial results Q4 & full year 2009 4 February 2010 33
Slide 34: Debt/Equity
Debt/Equity 2005 – 2009 Objective < 0.8 Total operations Financial results Q4 & full year 2009 4 February 2010 34
Slide 35: Net Financial Items
Net Financial Items % Change % Change EUR million IV/09 III/09 IV/08 Q409/Q408 Q409/Q309 Net interest expense -21.2 -24.7 -42.9 51% 14% Foreign exchange gains and losses 1.3 -19.4 -16.4 Na Na Other financial items, of which -4.8 -2.0 -2.1 -129% -140% PIK notes 1.4 1.4 6.4 Fair valuation of interest
Slide 36: Transaction risk and hedges
Transaction risk and hedges as at 31 December 2009 EUR million USD GBP SEK Estimated annual net operating cash flow exposure 750 500 -1 000 Transaction hedges as at 31 December 2009 -390 -240 620 Hedging percentage as at 31 December 2009 for the next 12 months 52% 48% 62% Operating Profit: Currency
Slide 37: Maturity profile
Maturity profile December 2009 €m Undrawn credit facility Bonds Other loans / liabilities EUR EUR 1.4 Bn 500m RCF 2012 EUR 390m 3.25% E+4.21% 2010 2016 EUR 750m USD 469 5.125% (750)m 2014 7.375% 2011 USD 507m 6.404% 2016 USD 300m 7.25% 2036 Financial results Q4 & full year 2009 4 February 2010 37
Slide 38: Energy balance 2010
Energy balance 2010 TWh/a Total energy self Self sufficiency 61% Impact** on operating sufficiency 58% profit from 10% change EUR million p.a. in: Self sufficiency 50% Electricity market price <5 Oil price ~13 **) Remaining impact on non-hedged volume Financial results Q4 & full year 2009 4 February
Slide 39: Stora Enso Electricity procurement
Stora Enso Electricity procurement Sales to market Open position Local tariff GWh/a Physical contracts with floating price 20 000 Financial contracts Physical contracts PVO production 18 000 Own production 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 -2 000 2009 2010 2011 2012 Financial res
Slide 40: Permanent pulp, paper and board capacity reductions
Permanent pulp, paper and board capacity reductions since 2006 Mill Date Grade Capacity reduction, t Corbehem PM 3 and PM 4 Jun 2006 LWC 250 000 Varkaus PM 1 End 2006 WFC 95 000 Berghuizer Mill Oct 2007 WFU 235 000 Reisholz Mill End 2007 SC 215 000 Summa Mill Jan 2008 Newsprint, uncoated mag, book p
Slide 41: Permanent sawn wood capacity reductions
Permanent sawn wood capacity reductions since 2006 Mill Date Capacity reduction, m3 Veitsiluoto Sawmill 2006 100 000 Honkalahti Sawmill 2006 90 000 Sauga Sawmill Jun 2007 130 000 Sollenau Sawmill 2007 110 000 Näpi Sawmill 2007-2008 100 000 Kotka Sawmill 2007-2008 70 000 Paikuse Sawmill End 2008 220