Slide 1: Interim Report January-March 2012
INTERIM REPORT | JANUARY-MARCH 2012 Per Lindberg, CEO and President, and Susanne Lithander, CFO | 26 April, 2012 1
Slide 2: Agenda
AGENDA • Highlights • Development by Business Area • Financials • Outlook 2
Slide 3: Highlights in Q1 2012
HIGHLIGHTS IN Q1 2012 • Increase in net sales and sales volumes vs. Q4 2011 • Operating profit of MSEK 142, 6% operating margin • Non-recurring costs of MSEK 14 • Price cuts halted ‒ ~2% lower prices in local currency for packaging paper ‒ ~25 USD/tonne price increase for NBSK pulp in Europe • Price
Slide 4: Increased sales due to higher volumes
INCREASED SALES DUE TO HIGHER VOLUMES NET SALES SALES VOLUME 2 500 400 Sales volume, ktonnes +10% 350 +14% Net sales, MSEK 2 000 300 1 500 250 2 086 2 291 200 315 360 1 000 150 500 100 50 0 0 Q4 -11 Q1 -12 Q4 -11 Q1 -12 4
Slide 5: Business Areas & Segments
BUSINESS AREAS & SEGMENTS PACKAGING & SPECIALITY PAPER PACKAGING BOARDS Kraft & Sack Paper S/C Fluting, Liner, Liquid Board MARKET PULP Nordic Bleached Softwood Kraft Pulp Note: Graph shows sales breakdown per business area for Q1 2012. 5
Slide 6: Packaging & Speciality Paper
PACKAGING & SPECIALITY PAPER Market situation in Q1 2012 • Improved order situation vs. Q4 2011 • Sack paper had higher order levels than normal while kraft paper was at normal levels towards the end of Q1 • Price cuts halted • 80 EUR/tonne in price increase announced from 1 June for sack and kraft
Slide 7: Packaging & Speciality Paper: Financials Q1 2012 vs. Q4 2011
PACKAGING & SPECIALITY PAPER Financials – Q1 2012 vs. Q4 2011 160 • Operating profit up by MSEK 35 140 Operating profit, MSEK 120 • Mainly due to higher sales volumes 100 and lower variable costs 80 60 40 20 0 Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q1 -12 Q4 -11 Q1 -11 FY 2011 Net sales, MSEK 1,091 941
Slide 8: Packaging Boards
PACKAGING BOARDS Market situation in Q1 2012 • Somewhat improved order situation ‒ Slightly lower levels than normal • Price cuts halted 8
Slide 9: Packaging Boards: Financials Q1 2012 vs. Q4 2011
PACKAGING BOARDS Financials – Q1 2012 vs. Q4 2011 140 • Operating profit down by MSEK 4 120 Operating profit, MSEK • Lower prices were partly offset by 100 higher sales volumes and lower 80 costs 60 40 20 0 Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q1 -12 Q4 -11 Q1 -11 FY 2011 Net sales, MSEK 663 644 728
Slide 10: Market Pulp
MARKET PULP Market situation in Q1 2012 • Pulp market improved vs. Q4 2011 • Price increased to ~850 USD/tonne at end of Q1 2012 from ~825 USD/tonne at end of Q4 2011 • Price increase to 870 USD/tonne announced for April 10
Slide 11: Market Pulp: Financials Q1 2012 vs. Q4 2011
MARKET PULP Financials – Q1 2012 vs. Q4 2011 50 • Operating profit improved by MSEK 8 40 Operating profit, MSEK • Higher sales volumes and lower fixed 30 costs compensated for lower prices 20 10 0 Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 -12 -10 -20 -30 Q1 -12 Q4 -11 Q1 -11 FY 2011 Net sales, MSEK 436 416 436
Slide 12: Q1 2012 in Sum
Q1 2012 IN SUM • 10% increase in net sales due to higher sales volumes (vs. Q4 2011) • Operating profit of MSEK 142, 6% operating margin • Non-recurring costs of MSEK 14 • Price cuts halted • Price increases announced for sack and kraft papers • Lower wood costs • Closing of the deal with UPM-Kymmen
Slide 13: Financial Information
BILLERUD FINANCIAL INFORMATION
Slide 14: Quarterly Key Figures
QUARTERLY KEY FIGURES Q1 -12 Q4 -11 Q1 -11 Net sales, MSEK 2,291 2,086 2,547 Operating profit, MSEK 142 75 332 Operating margin 6% 4% 13% Profit/share, SEK 0.94 0.44 2.28 Net debt/equity ratio -0.04 -0.05 0.05 Sales volume (ktonnes) 360 315 369 14
Slide 15: Operating Profit Bridge Q1 2012 vs. Q4 2011
OPERATING PROFIT BRIDGE Q1 2012 vs. Q4 2011 160 +69 +41 142 0 140 120 +37 100 MSEK 75 -56 80 60 -24 40 20 0 Operating Sales & Selling prices Effects of Change in Change in Change in Operating profit production (in respective exchange rate variable costs fixed costs depreciation profit Q4 2011 volume
Slide 16: Cash Flow Generation from Operation
CASH FLOW GENERATION FROM OPERATION MSEK Q1 -12 Q4 -11 Q1 -11 Operating surplus, etc 298 238 481 Change in working capital, etc. 22 48 -301 Net financial items, taxes, etc. -202 -12 -181 Cash flow from operating activities 118 274 -1 Current net investments -155 -178 -82 Operating cash flow -37 96 -
Slide 17: Working Capital Key Ratios
WORKING CAPITAL KEY RATIOS Days sales outstanding Overdue WC as % of quarterly sales 70 6,0 70% Working capital (excl. IAS)/quartely net turnover 60 60% 5,0 50 50% 4,0 % of total receivables DSO days 40 40% 3,0 30 30% 2,0 20 20% 10 1,0 10% 0 0,0 0% 17
Slide 18: Market Prices Affecting Result
MARKET PRICES AFFECTING RESULT Electricity index (Sweden*) Wood price index 280 160 240 140 200 120 160 120 100 80 80 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11 Source: Nordpool. *Price area Sweden Source: Billerud 18
Slide 19: Market Prices Affecting Result
MARKET PRICES AFFECTING RESULT Market pulp (USD/t) TCW index* 118 1 050 1 000 115 950 112 900 850 109 800 106 750 103 700 650 100 600 97 550 94 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11 Note: Average price for the quarte
Slide 20: Currency Situation
CURRENCY SITUATION • Profit effect of net flow hedging MSEK 44 (99) for Q1 2012 • Market value of outstanding contracts not relating to trade receivable was MSEK 38* Hedge level 12 months forward: Average hedged currency rates (share of net flow) Q2 -12 Q3 -12 Q4 -12 Q1 -13 Total 12 months EUR 50% 9
Slide 21: Outlook
OUTLOOK 21
Slide 22: Outlook
OUTLOOK • The market shows signs of an upturn during the second quarter. • The order situation in the packaging paper segments improved in the first quarter, compared to the previous one, and had at the beginning of the second quarter on average returned to normal levels. It is anticipated that the
Slide 23: Outlook cont.
OUTLOOK CONT. • Acquisition-related non-recurring costs will be charged to results in the quarter in which the acquisition of UPM-Kymmene’s packaging paper business will be completed. These costs are estimated to an additional approximately SEK 15 million. Added to this figure will be non-recurring
Slide 24: Q&A
Q&A We believe in embracing what is important to our customers, our company, our employees and the environment. By always giving back more than we take, we are building a company for future generations. 24