Norske Skog Asa · OSL:NSKOG
Norske Skog Asa — Q1 2022 Earnings Presentation
19 slides from Norske Skog Asa's earnings presentation, Apr 28, 2022
Slide 1: Q1 2022 presentation
Q1 2022 presentation 28 April 2022 Website LinkedIn Quartr
Slide 2: Sustainable and innovative industry
Sustainable and innovative industry 2
Slide 3: Bruck industrial site (following strategic projects)
Bruck industrial site (following strategic projects) Sustainable and innovative industry driving the green shift Sustainable Support local feedstock community 265 000 tonnes LWC magazine paper Recyclable Green Waste products energy utilisation 210 000 tonnes recycled containerboard 160 000 tonnes re
Slide 4: First quarter in brief
First quarter in brief Energy and raw material prices remain volatile Further price increases required and implemented to address unprecedented market conditions EBITDA of NOK 610m in the quarter EBITDA improvement from previous quarter with margins normalising towards the >10% area Impacted by gain
Slide 5: EBITDA improvement in the quarter
EBITDA improvement in the quarter Revenue EBITDA EBITDA bridge Q4 2021 to Q1 2022 NOKm (and deliveries volume) NOKm (margin in %) NOKm LTM1 EBITDA of 3,590 NOK ~1.2bn 610 Partially Includes capital impacted by LTI gain from sale of 3,092 programme Nature’s Flame -335 2,642 527 2,346 422 2,234 -108 1
Slide 6: Challenging energy and raw material markets
Challenging energy and raw material markets Energy (electricity & gas) prices Germany Recovered paper (RCP & OCC) prices Germany Spruce pulpwood prices Norway EUR per MWh EUR per tonne EUR per cubic metre 300 200 400 350 250 160 300 200 250 120 150 200 80 150 100 100 40 50 50 0 0 0 2017 2018 2019 20
Slide 7: Strong liquidity position
Strong liquidity position Cash and cash equivalents Cash earnings1 NOKm NOKm Returning to profitability Net debt of NOK 924m 1,676 1,622 233 Net debt / LTM2 reported EBITDA: 0.8x 1,489 173 1,324 134 Total available liquidity of EUR ~470m 1,163 Cash of NOK 1,676m (EUR ~175m) 2021 CO2 comp. of NOK ~29
Slide 8: Optimising publication paper cash flows and operations
Optimising publication paper cash flows and operations Publication paper capacity Four sites in Europe, one in Australia In total, 11 producing paper machines 1 350k tonnes newsprint Convert 125k tonnes in Q3 2022 (one machine) Convert 235k tonnes in Q2 2023 (one machine) 400k tonnes LWC magazine 36
Slide 9: Segment financials Q1 2022
Segment financials Q1 2022 EBITDA Europe EBITDA Australasia Segment financials NOKm NOKm NOKm 441 Europe Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 395 Operating rate, % 88% 85% 96% 96% 94% Deliveries, thousand tonnes 382 403 433 427 407 Total operating income 1,635 1,714 2,183 2,648 2,968 EBITDA 106 14 113 395
Slide 10: Publication paper price increases necessary to address unprecedented raw material and energy prices
Publication paper price increases necessary to address unprecedented raw material and energy prices Newsprint and magazine paper prices Germany Western European operating rate and demand (including net exports) EUR per tonne Million tonnes 1,200 20 92% 92% 90% 86% 1,000 15 74% 800 600 10 400 5 200 0
Slide 11: Entering the growing market for recycled containerboard
Entering the growing market for recycled containerboard Packaging paper capacity 760k tonnes recycled containerboard In the market from Q1 2023 Targets Operating rate of ~95% from 2025-26 EBITDA margin of +20% PCompetitive steam supply PCentrally located with low transport costs PEstablished raw mat
Slide 12: Switching to containerboard is attractive across the board
Switching to containerboard is attractive across the board Higher capacity Better margins Growing market Thousand tonnes EBITDA margin Industry CAGR (2019-2021) +2x +2x +20% 5% 760 Production capacity doubles by switching from newsprint to containerboard Price per tonne for newsprint and containerbo
Slide 13: Containerboard market remains tight driven by e-commerce and sustainability focus
Containerboard market remains tight driven by e-commerce and sustainability focus Recycled containerboard prices Germany Western European operating rate and demand (including net exports) EUR per tonne Million tonnes 1,000 30 96% 95% 95% 93% 93% 25 800 20 600 15 400 10 200 5 0 0 2017 2018 2019 2020
Slide 14: Reduce energy purchases and improve green energy mix
Reduce energy purchases and improve green energy mix Waste-to-energy Operating at 75% and in commissioning with Valmet until reaching 100% RDF1 gate fees less associated costs to contribute NOK ~100m annual EBITDA Reduces gas consumption by ~0.7 TWh and increases electricity by ~0.2 TWh 14 1) RDF =
Slide 15: Green energy production and energy efficient operations enable annual surplus of CO2 allowances
Green energy production and energy efficient operations enable annual surplus of CO2 allowances Continue to reduce fossil CO2 emissions from production European Union Allowance (EUA) price development Kg fossil CO2 direct and indirect (scope 1 EUR / allowance and 2) emissions per tonne produced Targ
Slide 16: Continued commercialisation and scale-up of CEBINA and CEBICO
Continued commercialisation and scale-up of CEBINA and CEBICO CEBINA Pilot of 100-500 tonnes capacity Proven with regular commercial sales Expanding production capacity Awarded Grønn Plattform grant of NOK ~60m to support further development CEBICO Pilot of +300 tonnes capacity Innovation Norway gra
Slide 17: Enabling the circular economy
Enabling the circular economy End-products recycled Waste utilised Green energy focused 74% 99% of water 98% 84% intake returned recycled1 after treatment utilised green Developing climate solutions Participating in Borg CO2 industry cluster to develop CCUS2 technologies with ambition to capture ~63
Slide 18: Outlook
Outlook Publication paper market expected to be tight as demand remains healthy and capacity closes Waste-to-energy facility to reduce energy purchases and improve green energy mix at Bruck Converting two machines from newsprint production to recycled containerboard production Continued development
Slide 19: Norske Skog ASA contact details and forward-looking statements
Norske Skog ASA Postal address: P.O. Box 294 Skøyen, 0213 Oslo, Norway Visitors: Sjølyst Plass 2, 0278 Oslo, Norway Phone: +47 22 51 20 20 Email: info@norskeskog.com Email: ir@norskeskog.com This presentation contains statements regarding the future in connection with Norske Skog’s growth initiative