Borregaard ASA · OSL:BRG
Borregaard ASA — Q2 2022 Earnings Presentation
25 slides from Borregaard ASA's earnings presentation, Jul 15, 2022
Slide 1: 2nd Quarter 2022
2nd Quarter 2022 Oslo, 15 July 2022
Slide 2: Agenda
Agenda Per A Sørlie, President & CEO Highlights Business segments Outlook Per Bjarne Lyngstad, CFO Financial performance 2
Slide 3: Highlights – 2nd quarter 2022
Highlights – 2nd quarter 2022 All-time high EBITDA1 NOK 445 million (NOK 416 million) Increased sales prices and strong product mix in BioSolutions Higher sales prices but lower deliveries in BioMaterials and Fine Chemicals Higher energy, raw material and freight costs Positive net currenc
Slide 4: BioSolutions markets – Q2
BioSolutions markets – Q2 NOK per mtds ‘000 mtds 2021 Average gross sales price1 Sales volume 12 000 125 2022 100 11 000 10 150 100 90 90 92 9 780 81 84 10 000 9 244 75 9 000 7 838 7 709 7 761 50 8 000 7 000 25 6 000 0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q1 Q2 Q3 Q4 Sales price and sales volume incl
Slide 5: BioMaterials markets – Q2
BioMaterials markets – Q2 NOK per mt ‘000 mt 2021 Average gross sales price1 47,5 Sales volume 15 000 50 2022 42,4 40,2 14 000 13 656 39,4 40 36,6 34,3 13 000 12 595 30 12 000 10 754 10 972 10 911 20 11 000 10 641 10 000 10 9 000 0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q1 Q2 Q3 Q4 Sales price and sale
Slide 6: Fine Chemicals markets – Q2
Fine Chemicals markets – Q2 mNOK 2021 Sales revenues – quarter 2022 200 175 154 150 141 131 118 112 125 100 88 75 50 25 0 Q1 Q2 Q3 Q4 Sales revenues include fine chemical intermediates and bioethanol Favourable product mix for fine chemical intermediates Higher prices for bioethanol Lower deliveries
Slide 7: Outlook
Outlook BioSolutions The positive market development expected to continue in H2, additional price increases implemented from 1 July Total sales volume expected to be slightly below the 2021 volume The new biovanillin capacity will continue to be gradually phased into the market The market ba
Slide 8: Financial performance Q2-22
Financial performance Q2-22
Slide 9: Borregaard key figures – Q2
Borregaard key figures – Q2 mNOK Operating revenues 2021 mNOK EBITDA1 2021 % EBITDA margin1 2021 40 1 750 2022 450 2022 2022 27,5 30 24,8 1 744 445 1 500 400 416 1 615 18,2 400 27,4 391 350 1 511 20 25,5 1 446 1 429 1 419 1 250 21,3 300 10 302 1 000 250 NOK0 263 750 200 8 EPS cumulative Q1 Q2 Q3 Q4
Slide 10: BioSolutions key figures – Q2
BioSolutions key figures – Q2 mNOK 2021 Operating revenues 2022 1 000 1 098 800 • Revenues 24% above Q2-21 948 934 885 838 812 600 • Higher sales prices and a strong product mix 400 200 • 10% lower sales volume 0 Q1 Q2 Q3 Q4 mNOK 2021 300 2022 305 250 • Increased sales prices and a strong product mi
Slide 11: BioMaterials key figures – Q2
BioMaterials key figures – Q2 mNOK 2021 Operating revenues 600 2022 500 • Revenues increased by 12% vs Q2-21 540 532 523 400 482 468 300 Higher sales prices for speciality cellulose 405 • 200 100 • Lower deliveries 0 Q1 Q2 Q3 Q4 mNOK 2021 100 2022 102 80 • Higher sales prices 97 91 91 EBITDA1 60 • L
Slide 12: Fine Chemicals key figures – Q2
Fine Chemicals key figures – Q2 mNOK 2021 Operating revenues 150 2022 155 125 143 132 100 • Revenues decreased by 23% vs Q2-21 119 114 75 90 50 • Lower deliveries 25 0 Q1 Q2 Q3 Q4 mNOK 2021 50 2022 • Fine chemical intermediates, favourable product mix and high 49 49 40 production volume, but increas
Slide 13: Currency impact
Currency impact 2021 mNOK Hedging effects2 on EBITDA1 2022 Borregaard’s currency basket3 20 106 105,2 10 104 10 6 102,0 102 100,9 0 99,8 99,9 100 -4 -3 98,3 -10 98 -20 -15 -16 96 Q1 Q2 Q3 Q4 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Net FX EBITDA1 impact ≈60 mNOK vs Q2-21 Includes change in hedging ef
Slide 14: Cash flow, investments and NIBD
Cash flow, investments and NIBD Increase mNOK Cash flow from operating activities mNOK Investments mNOK NIBD1 change 300 Decrease 500 458 2 200 262 378 250 158 29 400 356 219 2 000 72 85 300 200 1 800 182 150 1 600 499 200 125 163 2105 100 32 87 81 1 400 100 190 81 16 24 445 1535 0 50 93 1 200 221 5
Slide 15: Questions?
Questions? Per A Sørlie, President & CEO Per Bjarne Lyngstad, CFO 15
Slide 16: Appendix
Appendix
Slide 17: Borregaard – key figures
Borregaard – key figures Amounts in NOK million Q2-22 Q2 -21 Change YTD-22 YTD-21 Change Operating rev enues 1 7 44 1 5 11 15 % 3 359 2 930 15 % 1 EBITDA 4 45 4 16 7% 845 718 18 % Depreciation property, plant and equipment -110 -101 -218 -207 Amortisation intangible assets -1 -1 -2 -2 1 Other income
Slide 18: Operating revenues and EBITDA per segment
Operating revenues and EBITDA1 per segment Amounts in NOK million Amounts in NOK million 1 Operating revenues Q2-22 Q2-21 Change EBITDA Q2-22 Q2-21 Change Borregaard 1 744 1 511 15 % Borregaard 445 416 7% BioSolutions 1098 885 24 % BioSolutions 305 272 12 % BioMaterials 540 482 12 % BioMaterials 91
Slide 19: Cash flow
Cash flow Amounts in NOK million Amounts in NOK million Q2-22 Q2-21 YTD-22 YTD-21 FY- 20 21 Profit before taxes 322 296 599 472 873 Amortisation, depreciation and impairment charges 111 102 220 209 420 Change in net working capital, etc -221 69 -602 74 256 Dividend/share of profit from JV & associat
Slide 20: Balance sheet
Balance sheet Amounts in NOK million 30.0 6.2022 3 1.03 .2022 31 .12 .202 1 Assets: Intangible assets 86 86 89 Property, plant and equipment 4 273 4 180 4 191 Right-of-use assets 345 351 351 Other assets 237 393 339 Investments in joint venture/associate company 144 174 173 N on-current assets 5 085
Slide 21: Net financial items & net interest-bearing debt
Net financial items & net interest-bearing debt1 Amounts in NOK million Net financial items Q2-22 Q2-21 YTD-22 YTD-2 1 Net interest expenses -16 -15 -29 -31 Currency gain/loss -7 0 -6 1 Share of profit/-loss from an associate 0 0 -1 0 Other financial items, net -1 -3 -2 -7 Net financial items -24 -1
Slide 22: Currency hedging strategy
Currency hedging strategy Purpose is to delay effects of currency fluctuations and secure competitiveness Hedging based on expected EBITDA1 impact2 Base hedge: 75%/50% on a rolling basis for 6/9 months for major currencies Extended hedge: 75%/50% of the next 24/36 months if USD and EUR are above
Slide 23: Credit facilities, solidity and debt
Credit facilities, solidity and debt Long-term credit facilities Debt and undrawn facilities • 1,500 mNOK revolving credit facilities, maturity 2024 and 2026, 30.6.2022 margin linked to sustainability targets 4 000 • 400 mNOK 5-year bond issue, maturity 2023 3 600 • 40 mEUR 10-year loan, maturity 20
Slide 24: Alternative performance measures
Alternative performance measures In the discussion of the reported operating results, financial position and cash flows, Borregaard refers to certain measures which are not defined by generally accepted accounting principles (GAAP) such as IFRS. Borregaard management makes regular use of these Alter
Slide 25: Important notice
Important notice This presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation does n