Arctic Paper S.a. · GPW:ATC
Arctic Paper — Q2 2022 Earnings Presentation
30 slides from Arctic Paper's earnings presentation, Aug 10, 2022
Slide 1: Financial Results Q2 2022
Q2 10/8/2022 FINANCIAL RESULTS Q2 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 Q2 2022 Paper Packaging Financial performance Pulp Power Focus 3 Q2 2022 arcticpapergroup.com
Slide 4: Summary H1 2022
SUMMARY H1 2022 Arctic Paper Group H1 2022 vs. H1 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 2 407.0 1 569.4 535.8 156.4 236.2 54.7 25.7% 9.5% (H1 2022) (H1 2021) (H1 2022) (H1 2021) (H1 2022) (H1 2021) (H1 2022) (H1 2021) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pulp
Slide 5: Summary Q2 2022
SUMMARY Q2 2022 Arctic Paper Group Q2 2022 vs. Q2 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 1 296.3 786.6 330.1 84.2 218.3 30.6 25.7% 9.5% (Q2 2022) (Q2 2021) (Q2 2022) (Q2 2021) (Q2 2022) (Q2 2021) (Q2 2022) (Q2 2021) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pulp sal
Slide 6: Paper Q2 2022
PAPER 6 Q2 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 1300 1200 JUN 2022 COMPARED TO MAR 2022 1100 1000 UWF average price change +10% CWF average price change +14% 900 800 JUN 2022 COMPARED TO JUN 2021 700 UWF average price change +43% 600 CWF average price change +6
Slide 8: Operating Data: Production Capacity and Paper Sales Volume
PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS OPERATING DATA 96% 92% 99% 99% 92% 90% 69% Average Q2 2022 use of production capacity: 99% SAME LEVEL AS IN Q1 2022 7% HIGHER THAN IN Q2 2021 Q2 2022 total production volume: 169k tons PAPER SALES VOLUME 2% HIGHER THAN IN Q1 2022 18% HIGHER THAN IN Q2 2021
Slide 9: Operating Data: Paper Sales Revenue
PAPER SALES REVENUE (PLN mn) OPERATING DATA 949 949 689 538 532 507 527 527 Total revenue Q2 2022 (PLN 949mn) 404 INCREASED BY 80% COMPARED TO Q2 2021 Average price Q2 2022 (PLN 5.74k) INCREASED BY 62% COMPARED TO AVERAGE IN Q2 2021 PAPER SALES REVENUE PER TONNE (PLN k)* 5,74 4,11 3,67 3,54 3,53 3,4
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 Q2 2022 / PAPER arcticpapergroup.com
Slide 12: Client Structure
CLIENT STRUCTURE Market segments/products portfolio/target grups 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: Pulp Q2 2022
PULP 13 Q2 2022 arcticpapergroup.com
Slide 14: Market Data: European Pulp Prices
PULP PIX INDEXES EUROPE MARKET DATA Pulp – European pulp prices 1 430 1 340 1 260 1 342 1 300 1 308 AVERAGE PRICE Q2 2022 COMPARED TO Q2 2021 1 001 1 030 1 140 1 177 1 099 1 140 NBSK (long fiber): 15% higher 855 859 879 820 840 840 BHKP (short fiber): 23% higher 900 865 751 680 680 680 680 680 AVERA
Slide 15: Operating Data: Pulp Production and Deliveries
PULP PRODUCTION (1,000 TONNE) OPERATING DATA Pulp production & deliveries 109 110 111 109 111 100 100 103 109 103 98 95 92 91 Q2 2022 total production: 111k tons 7% HIGHER THAN IN Q1 2022 1% HIGHER THAN IN Q2 2021 PULP DELIVERIES (1,000 TONNE) Q2 2022 total deliveries: 106k tons 6% HIGHER THAN IN Q1
Slide 16: Operating Data: Pulp Revenue and Prices
PULP SALES REVENUE (SEK mn) OPERATING DATA Revenue and prices 784 784 593 598 593 546 510 490 Total revenue Q2 2022 (SEK 784mn) INCREASED BY 32% COMPARED TO Q2 2021 PULP SALES REVENUE PER TONNE (SEK) Average price in Q2 2022 (SEK 7.4k per tonne) 7 396 INCREASED BY 29% COMPARED TO Q2 2021 5 757 6 259
Slide 17: Packaging Q2 2022
PACKAGING 17 Q2 2022 arcticpapergroup.com
Slide 18: 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 18 Q2 2022 / PACKAGING arcticpapergroup.com
Slide 19: Power Q2 2022
POWER 19 Q2 2022 arcticpapergroup.com
Slide 20: Power Generation
POWER GENERATION Hydroelectric power plant in Munkedal produced over 9 GWh of green energy in H1 2022. Biomass power plant in Grycksbo produced over 10 GWh of green energy and 412,000 GJ of green heat in H1 2022. Solar farm in Kostrzyn, which has been running since August last year produced in H1 20
Slide 21: Biomass boiler in Munkedal and PV farms
The biomass boiler in Munkedal will be put into operation during the summer of 2022 PV farms owned by Arctic Paper Group – as a next step to carbon-neutral sales & administration units 21 Q2 2022 / POWER arcticpapergroup.com
Slide 22: Financial Performance Q2 2022
FINANCIAL PERFORMANCE 22 Q2 2022 arcticpapergroup.com
Slide 23: EBITDA Evolution 2014 – 2022 (PLN mn)
EBITDA EVOLUTION 2014 – 2022 (PLN mn) Effective hedging of both segments – to stabilize financial results 800 700 Q2 2022 EBITDA PLN 330.1mn 600 PLN 124mn HIGHER THAN Q1 2022 PLN 246mn HIGHER THAN Q2 2021 500 400 300 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022* Paper Segment Pulp Segment * rol
Slide 24: Net Debt/EBITDA 2018 – 2022
NET DEBT/EBITDA 2018 – 2022 1,37 1,28 1,22 1,20 1,06 0,82 0,83 0,70 0,70 0,66 0,57 0,57 0,48 0,49 0,40 0,33 -0,02 24 Q2 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 25: Net Profit per Share
NET PROFIT PER SHARE 12 rolling months* 6,01 1,48 1,34 0,88 0,47 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. 25 Q2 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 26: Focus Q2 2022
FOCUS 26 Q2 2022 arcticpapergroup.com
Slide 27: Outlook and Focus Areas
• Strong demand, expected high production utilization • Energy costs pressure – high volatility on gas market • Logistics challenges related to the limited avaliability of trucks & ships and high freight costs • Capex for Q2 2022 was PLN 35mn (PLN 29mn) • Dividend policy for the Group has been appro
Slide 28: 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 29: 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 30: New Strategy: 4P for Future Arctic
New strategy 4P FOR FUTURE ARCTIC packaging power paper pulp 30 Q2 2022 / FOCUS arcticpapergroup.com