Arctic Paper S.a. · GPW:ATC
Arctic Paper — Q2 2023 Earnings Presentation
31 slides from Arctic Paper's earnings presentation, 2023
Slide 1: Financial Results Q2 2023
FINANCIAL RESULTS Q2 2023
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 Katarzyna Wojtkowiak / CFO Arctic Paper Summary Q2 2023 Paper Packaging Financials Pulp Power Focus 3 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 4: Summary Q2 2023
SUMMARY Q2 2023 Arctic Paper Group Q2 2023 vs. Q2 2022 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 836.2 1 296.3 68.9 330.1 99.5 218.3 30.3% 26.9% (Q2 2023) (Q2 2022) (Q2 2023) (Q2 2022) (Q2 2023) (Q2 2022) (Q2 2023) (Q2 2022) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pulp sa
Slide 5: Summary H1 2023
SUMMARY H1 2023 Arctic Paper Group H1 2023 vs. H1 2022 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 1 868.5 2 407.0 254.5 535.8 144.7 236.2 30.3% 26.9% (H1 2023) (H1 2022) (H1 2023) (H1 2022) (H1 2023) (H1 2022) (H1 2023) (H1 2022) Paper/Pulp EBITDA Net debt/EBITDA* Paper sales Pul
Slide 6: Paper
PAPER 6 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 7: Market Data: Fine paper average market prices
GRAPHIC FINE PAPER PRICES – GERMAN MARKET MARKET DATA Fine paper average market prices 1400 1300 1200 JUN 2023 COMPARED TO MAR 2023 1100 UWF average price change - 3,6% 1000 CWF average price change - 5,3% 900 800 700 JUN 2023 COMPARED TO JUN 2022 600 UWF average price change + 0,4% CWF average pric
Slide 8: Operating Data
OPERATING DATA Average Q2 2023 use of production capacity: 55% PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS 16% LESS THAN IN Q1 2023 45% LESS THAN IN Q2 2022 92% 99% 99% 90% 85% 69% 71% 55% Q2 2023 total sales volume: 97k tons 14% LESS THAN IN Q1 2023 41% LESS THAN IN Q2 2022 8 Q2 2023 arcticpaper.com
Slide 9: Operating Data: Paper sales revenue
PAPER SALES REVENUE (PLN mn) OPERATING DATA 949 949 770 689 527 567 567 507 Total revenue Q2 2023 (PLN 567mn) 404 DECREASED BY 40% COMPARED TO Q2 2022 Average price Q2 2023 (PLN 5.85k) PAPER SALES REVENUE PER TONNE (PLN k)* INCREASED BY 2% COMPARED TO AVERAGE IN Q2 2022 6,57 5,74 5,85 4,11 3,53 3,54
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 10 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 11: Products: Geographical split of sales
PRODUCTS Geographical split of sales Outside Europe 2% Germany Poland UK & IE Austria & CE France Baltics Rest of Europe 20% 17% 11% 11% 9% 5% 11% The Nordics Benelux 9% 5% 11 Q2 2023 arcticpaper.com 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 Merchants Predominantly indirect customers, who use our Direct customers who purchase, stock and distribute products, i.e., Deutsche Bank, K
Slide 13: Pulp
PULP 13 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 14: Market Data: European pulp prices
PULP PIX INDEXES EUROPE MARKET DATA 1 498 Pulp – European pulp prices 1 430 1 429 1 340 1 342 1 370 1 300 1 260 1 380 1 380 1 240 1 308 1 280 1 030 1 177 AVERAGE PRICE Q2 2023 COMPARED TO Q2 2022 1 140 1 140 879 1 099 859 840 NBSK (long fiber): 5% lower 958 BHKP (short fiber): 12% lower 865 680 680
Slide 15: Operating Data: Pulp production and deliveries
PULP PRODUCTION (1,000 TONNE) OPERATING DATA Pulp production & deliveries 110 109 111 111 103 103 95 92 91 96 90 93 93 87 Q2 2023 total production: 93k tons 4% HIGHER THAN IN Q1 2023 16% LOWER THAN IN Q2 2022 PULP DELIVERIES (1,000 TONNE) Q2 2023 total deliveries: 83k tons 107 107 112 103 106 100 10
Slide 16: Operating Data: Pulp revenue and prices
PULP SALES REVENUE (SEK mn) OPERATING DATA Revenue and prices 784 730 681 784 681 593 598 490 Total revenue Q2 2023 (SEK 681mn) DECREASED BY 13% COMPARED TO Q2 2022 PULP SALES REVENUE PER TONNE (SEK) Average price in Q2 2023 (SEK 8.2k per tonne) INCREASED BY 11% COMPARED TO Q2 2022 7 404 8 439 8 215
Slide 17: Pulp – Replacement Material for Plastic
PULP – REPLACEMENT MATERIAL FOR PLASTIC Pulp Sales (Rottneros) by application 2022 Fiber Other Tissue cement 3% paper 2% 4% Printing and writing Board paper and packaging 10% 32% Special applications 14% Electrotechnical Filters applications 20% 15% 16 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 18: Pulp: Geographical split of sales
PULP Geographical split of sales The Nordics Asia Germany Italy North Rest of Europe 32% 22% 15% 13% America 9% 8% 18 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 19: Packaging
PACKAGING 19 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 20: Development: Packaging paper sales
PACKAGING PAPER SALES DEVELOPMENT (t) DEVELOPMENT 20 000 PACKAGING PAPERS: 16 000 Munken Kraft Uncoated packaging paper 12 000 G-Flexmatt 8 000 Coated packaging paper 4 000 0 2018 2019 2020 2021 2022 last 12 months 20 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 21: Power
POWER 21 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 22: Arctic Paper Group Power Segment
ARCTIC PAPER GROUP POWER SEGMENT KOSTRZYN • Contract for building solar park 16 MW in Kostrzyn has been signed, installation will be in operation end of Q2 2024 • Solar installation of 1,2 MW will be installed on the roof in Kostrzyn. Installation will be in operation end of Q1 2024 GRYCKSBO • Expan
Slide 23: Financials
FINANCIALS 23 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 24: EBITDA Evolution 2016 – 2023 (PLN mn)
EBITDA EVOLUTION 2016 – 2023 (PLN mn) Effective hedging of both segments – to stabilize financial results 1 000 900 Q2 2023 EBITDA PLN 68.9mn 800 PLN 117mn LOWER THAN Q1 2023 700 PLN 261mn LOWER THAN Q2 2022 600 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023* Paper Segment Pulp Segmen
Slide 25: Quarterly EBITDA Evolution 2013 – 2023 (PLN mn)
QUARTERLY EBITDA EVOLUTION 2013 – 2023 (PLN mn) 350 300 250 200 150 100 50 0 EBITDA PULP & PAPER SEGMENT 25 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 26: Net Debt/EBITDA 2019 – 2023
NET DEBT/EBITDA 2019 – 2023 1,06 0,82 0,83 0,70 0,70 0,66 0,57 0,57 0,48 0,49 0,36 0,33 -0,02 -0,22 -0,19 -0,28 -0,27 26 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 27: Net Profit per Share
NET PROFIT PER SHARE 9,11 6,38 1,60 1,84 0,18 1,19 * rolling 12 months net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares. 27 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 28: Focus
FOCUS 28 Q2 2023 arcticpaper.com arcticpapergroup.com
Slide 29: Outlook and strategic focus
• In an environment of inflation and recession in Europe, recovery of graphical, packaging and pulp markets may take time • Focus on long term strategic initiatives to diversify towards green energy and packaging • Several projects in the renewable energy are on-going • The joint venture investment
Slide 30: 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 31: 4P for Future Arctic
4P FOR FUTURE ARCTIC Paper Packaging Pulp Power 31 Q2 2023 arcticpaper.com arcticpapergroup.com