27 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Jan 30, 2019
Slide 1: January 30, 2019
January 30, 2019
Slide 2: Ulf Larsson, CEO
Slide 3: Stable demand in Europe and US, higher prices vs Q4 2017
Stable demand in Europe and US Higher prices vs Q4 2017 • Some price declines in Q4 vs Q3 Sales growth of 16% vs Q4 2017 • Price/mix +11%, volumes -1%, currency 6% EBITDA up 38% vs Q4 2017 • Higher prices • Positive currency effects • Higher prices for wood raw material • Maintenance stops Östrand r
Slide 4: EBITDA development and Industrial ROCE
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,494 16% 38% 1,549 1,494 1,175 1,078 1,034 33% 30% EBITDA margin Net debt/EBITDA 25% 27% 30% 1.3x 22% Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Note: 1) ROCE for the industrial segments; Wood, Pulp and Paper. ROCE calculated as LTM. 4
Slide 5: Full-year EBITDA, ROCE and proposed dividend
EBITDA (SEKm) Industrial ROCE 1) Proposed dividend (SEK) 5 252 16% 1.75 (3 648) (10%) (1.50) EBITDA margin Net debt/EBITDA EPS (SEK) 28% 1.3x 5.21 (22%) (1.6x) (2.67) Note: Figures in “(#)” refer to 2017. 1) ROCE for the industrial segments; Wood, Pulp and Paper. 5
Slide 6: Forest: higher prices, increased wood sourcing
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 20% 19% Higher prices 27.8% 27.7% 1,540 427 1,287 358 Increased wood sourcing to meet higher pulpwood demand Sales up 20% • Increased volumes to the expanded pulp mill • Higher prices Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 Price development – Pul
Slide 7: Wood: stable demand in Europe and US
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 9% 23% Stable demand in Europe and US 14.5% 1,558 226 12.9% • Softer in China and North Africa 1,426 184 Slightly lower prices in Q4 vs Q3 Sales up 9% • Higher prices Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 • Positive currency effects Price develo
Slide 8: Östrand NBSK production ramp-up
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 • 2020 first full year with full Actual 1,500 capacity On track 1,000 • Production – Q4, 160k tonnes (1) 500 0 Jun/18 Jan/19 Jun/19 Jan
Slide 9: Pulp: higher prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 56% 148% Higher prices 1,049 370 35.3% • Some price decline in end of Q4 2018 672 Production exceeds deliveries due to 22.2% inventory build-up 149 Sales up 56% • Higher prices Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 • Positive currency effects •
Slide 10: Paper: increased prices for Kraftliner and Publication paper
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 9% 11% Increased prices for both Kraftliner and 2,421 21.7% 22.2% Publication paper 2,220 536 481 • Some Kraftliner price decline in end of Q4 Extended maintenance stop in Obbola • Cost, production and electricity Sales up 9% Q4 2017 Q4 2018 Q4 2017 Q4 20
Slide 11: Toby Lawton, CFO
Toby Lawton, CF Oh f
Slide 12: Income statement, quarter and full year
Quarter Full year SEKm Q4 2018 Q4 2017 Change 2018 2017 Change Net sales 4,926 4,242 16% 18,755 16,664 13% EBITDA 1,494 1,078 38% 5,252 3,648 44% EBITDA margin 30.3% 25.4% 4.9 p.p. 28.0% 21.9% 6.1 p.p. EBIT 1,143 786 45% 4,002 2,511 59% EBIT margin 23.2% 18.5% 4.7 p.p. 21.3% 15.1% 6.2 p.p. Financial
Slide 13: Proposed dividend, pay-out ratio and EPS
17% Proposed dividend (SEK) Adjusted pay-out ratio 1) 1.75 1.75 40% 1.50 (1.50) (56%) EPS (SEK) Pay-out ratio 5.21 34% (2.67) (56%) 2017 2018 Note: 1) Pay-out ratio using EPS excluding the revaluation of deferred tax due to the reduction of the 13 corporate tax rate. A positive one-off item of SEK 5
Slide 14: Net sales and EBITDA by segment per quarter
Forest Wood Pulp Paper 2,383 2,426 2,413 2,421 2,220 Net sales (SEKm) 2,096 2,072 2,046 1,846 1,712 1,637 1,567 1,558 1,540 1,503 1,455 1,426 1,364 1,312 1,298 1,287 1,261 1,210 1,162 1,049 743 672 644 641 589 585 485 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 Q
Slide 15: Net sales bridge 2017 to 2018
Lower volumes for Positive for all segments Wood, Pulp and Paper SEK 13% -5% 5% 18,755m SEK 16,664m Positive EUR and USD + 13% Net sales Price/Mix Volume Currency Net sales 2017 2018 15
Slide 16: EBITDA bridge 2017 to 2018
Lower volumes for Higher prices Wood, Pulp and Paper for all segments EUR and USD positive SEK SEK SEK +2,246m -141m -603m SEK SEK SEK +368m -307m SEK +41m 5,252m SEK Higher wood raw material Higher electricity price. costs and higher direct costs Increased income from Östrand expansion stop 3,648m
Slide 17: Cash flow, quarter and full year
Quarter Full year SEKm Q4 2018 Q4 2017 2018 2017 EBITDA 1,494 1,078 5,252 3,648 Revaluation of biological assets and other non cash flow items 1) -183 -100 -749 -503 Operating cash surplus 1,311 978 4,503 3,145 Change in working capital -217 96 -843 -143 Current capital expenditures -472 -220 -1,002
Slide 18: Östrand: ramp-up and world-class competitiveness
Production began in June according to plan Ramp-up period of 12-18 months • 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 balance – from a net consumer of 0.1 TW
Slide 19: Östrand project related costs and maintenance stops
Project related costs (indirect) EBITDA impact Q1 18 Q2 18 Q3 18 Q4 18 2018 • Project related costs of SEK 77m (150), of which SEK 18m (50) depreciation Project related costs 16 15 13 15 59 Expansion and maintenance stops • Production began in June 2018, following an expansion stop Expansion/ 0 236
Slide 20: Capital employed, net debt and equity
SEKm Dec 31, 2018 Dec 31, 2017 Forest assets according to IAS 41 1) 32,065 31,386 Deferred tax relating to Forest assets -6,605 -6,905 Forest assets, net of deferred tax 25,460 24,481 Working capital 3,735 2,861 Working capital/Net sales 2) 18% 18% Other capital employed 16,887 15,377 Total capital
Slide 21: Estimated IFRS16 implications applied on 2018 financials
Estimated IFRS16 implications applied on 2018 financials Net debt ND/EBITDA EBITDA EBIT P&L effect +1,211 +200 +20 IFRS16 impact (SEKm) 8,231 1.5x EBITDA 200 5,452 4,002 4,022 5,252 Forest 70 1.3x 7,020 Wood 55 Pulp 20 Paper 50 Other 5 Depreciation -180 Forest -70 Wood -50 Pulp -15 Paper -40 Other -
Slide 22: Summary: stable demand, higher prices, EBITDA up 38%
Stable demand in Europe and US Higher prices vs Q4 2017 Sales growth of 16% vs Q4 2017 EBITDA up 38% vs Q4 2017 Östrand ramp-up progressing according to plan 22
Slide 23: SCA Frontier
Slide 24: Appendix
Appendix QSSCA
Slide 25: Net sales and EBITDA by segment, 2014-2018
Forest Wood Pulp Paper Net sales (SEKm) 9,643 8,226 8,548 8,434 7,744 6,618 5,994 5,187 5,108 5,070 5,455 5,114 5,315 5,441 4,978 2,518 2,760 2,492 2,542 2,866 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 EBITDA (SEKm) and EBITDA margin 1) 2,468
Slide 26: Slide 26
Slide 27: Forward-looking statements
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