Arctic Paper S.A. · GPW:ATC
Arctic Paper — Investor Presentation (October 2021)
34 slides from Arctic Paper's investor presentation, Oct 4, 2021
Slide 1: 4P strategy 2022-2030
4P strategy 2022-2030 Future strategy for growth and a diverse, carbon neutral and renewable group. All figures and projections for the future are illustrations of the new strategy or goals, not a forecast.
Slide 2: Disclaimer
Disclaimer Please read the information below carefully This presentation (the ‘Presentation’) was prepared by Arctic Paper S.A. (the ‘Company’) for The Company is not obliged to publish updates and amendments to the information, data and information purposes only for use by investors, banks and the
Slide 3: Contents
Contents 1. Arctic today 2. Artic tomorrow 3. 4P strategy • Power • Packaging • Paper • Pulp 4. The way forward 5. Summary
Slide 4: Arctic today
Arctic today Pulp Paper
Slide 5: Arctic Paper today: Revenue per segment
Arctic Paper today Revenue per segment 1% • Group focused on pulp and graphical paper production 30% • No 5 producer of graphical paper in Europe Pulp • No 1 producer of premium book & design paper in Europe Paper Packaging • Well positioned producer of high-yield market pulp in Europe Power 2% • Tw
Slide 6: Combination of paper & pulp
EBITDA (mPLN) Paper Segment Pulp Segment 300 Arctic Paper today 250 Combination of paper & pulp 200 150 • An effective business hedge over the years • Stable results despite business cycles 100 • Two segments based on natural & renewable material 50 0 2014 2015 2016 2017 2018 2019 2020 2021
Slide 7: Arctic tomorrow
Arctic tomorrow
Slide 8: Major trends pave the way for change
Arctic Group tomorrow Major trends pave the way for change • Decreasing market for graphical paper due to digitalisation • Booming e-commerce boost the demand for packaging • Shift from plastic to smart fiber-based packaging solutions • European energy prices are rising due to decarbonisation trend
Slide 9: Expanding business – value growth
Arctic Group tomorrow Expanding business – value growth 2020 2030 High level of production capacity usage Investment in new production assets Revenue diversification with Dependency on few markets strong synergies Limited potential to grow Increased focus on fast growing markets A more balanced deve
Slide 10: New strategy
New strategy The new 4P strategy is built on the ambition to grow using the synergies between the two existing pillars paper and pulp and new investments in packaging and energy to reach a sustainably higher profitability and resilience of the group.
Slide 11: A strategy built on four pillars with a strategic fit
New strategy A strategy built on four pillars with a strategic fit Pulp Paper Packaging Power
Slide 12: 4P – the new strategy 2022-2030
New strategy 4P – the new strategy 2022-2030 The European graphical markets are decreasing and new demands regarding sustainability are offering new market potentials, especially in packaging, green energy solutions and wood pulp. Arctic will stay as reliable producer of high quality, branded graphi
Slide 13: A strategy built on four pillars
New strategy A strategy built on four pillars Today’ structure 2025 structure 2030 structure Pillar by revenue by revenue by revenue Paper Leading position in subsegment books and design paper. Focus on stable nisches where premium products based on renewable material is valued. 67 % 57% 46% Three m
Slide 14: A strategy built on four pillars: goals 2025 and 2030
New strategy A strategy built on four pillars Pillar Goal 2025 Goal 2030 Paper 85/15% 80/20% Leading position in subsegment books and design paper. Focus on stable mix paper/pack mix paper/pack nisches where premium products based on renewable material is valued. Three mills – 700 kton 2030. Pulp Th
Slide 15: Power
Power It’s all about energy. The shift from fossil to non-fossil energy sources is one of the main tasks for this planet. We are taking measures to create this future. Behind our power pillar stands the clear vision to make this change possible. Hydropower, solar panels and other green energy in com
Slide 16: Power: The market
Electricity & CO2 prices Power PLN/MWh CO2 EUR/allowance 70 600 The market 60 500 50 400 • Ongoing decarbonization of Polish and European Power 40 generation sector 300 30 • Increasing costs of fossil energy due to growing carbon 200 20 emission allowances prices 100 10 • Rapid increase of electrici
Slide 17: We have competences in energy generation
Power We have competences in energy generation 2021 (LTM) 2022-2030 actions 2030 3 TWh 450 mPLN 4 TWh Annual energy volume Total capex Annual energy volume (generation and trading) 0,8 MW 30% (2022-2024) & 40 MW Solar sources 70% (2025-2030) Solar sources capex distribution over time 0 MW 60 MW Wind
Slide 18: Packaging
Packaging Packaging is needed to protect, prolong shelf life of products and promote goods. We feel a duty to create intelligent alternatives to plastic packaging, based on renewable resources to reduce microplastic particles in sea, soil and food. In 2019 we started the process to launch papers for
Slide 19: Packaging: The market
Packaging Current split of flexible packaging papers: By paper grade The market Greaseproof/- Next Gen kraft • Addressable European flexible market was 1,2 mln tons in resistant 2019 Coated one side • Flexible packaging paper market is expected to have a CAGR MF kraft of ca. 8% in 2020-2029 1,2m t o
Slide 20: We have experience to develop the packaging segment
Packaging We have experience to develop the packaging segment 2021 (LTM) 2022-2030 actions 2030 20 kt 200 m PLN 120 kt Packaging paper annual volume Total capex Packaging paper annual volume Packaging kraft paper 40% (2022-2024) & Packaging kraft paper, fiber based products, Development phase 60% (2
Slide 21: Paper
Paper Since hundreds of years paper is the base for communication. Today, Arctic Paper is a European producer of premium paper with strong brands and a leading position in the markets for high quality book and design paper. Paper will remain an important part of the business. Arctic Paper will conti
Slide 22: Paper: The market
Paper 2020 European demand 11,9m t The market Main trends in the graphical paper market in last years: CWF • General graphical market declined by 1-3% annualy with slight underperformance of Coated Woodfree market • Stable market size of high quality bookpaper UWF • Stable increase of design and spe
Slide 23: We will remain a leading player in premium paper
Graphical paper We will remain a leading player in premium paper 2021 (LTM) 2022-2030 actions 2030 3 540 mPLN 3 Paper mills Total capex Paper mills 650 kt 35% (2022-2024) & 580 kt (+120 kt packaging) Production volume 65% (2025-2030) Production volume Capex distribution over time 97 % paper (3 % pac
Slide 24: Pulp
Pulp As a material based on a renewable resource, wood pulp plays a key role in the circular economy. Through the ownership of 51 percent of the Swedish producer of long-fiber wood-pulp and high-yield pulp Rottneros, Arctic Paper is well positioned to grow in sustainable pulp production for paper, p
Slide 25: Pulp: The market
Pulp Market pulp from non-integrated producers (mln t) The market 80 70 • Sustainable product 60 • 2022-30 CAGR market growth expected at ca. 4,0% 50 • Key applications in packaging, paper, hygenics products and 40 attractive multiple niche aplications 30 • High entry barriers 20 • Demand driven by
Slide 26: Our expanding pulp business is a core activity
Pulp Our expanding pulp business is a core activity 2021 (LTM) 2022-2030 actions 2030 2 3% 2 Pulp mills annual growth Pulp mills 417 kt 500+ kt Production volume Production volume 30% Growth in packaging, tissue & technical Share in group revenue pulp segments 29% Share in group revenue
Slide 27: The way forward
The way forward
Slide 28: The road map
The way forward The road map Milestones ahead Power Phase three of wind & solar Packaging park Expansion of packaging Power plants Phase two of wind & solar Power park Phase one of wind power park Packaging Fiber base Power packaging Second phase production plant of solar park in Power Kostrzyn Star
Slide 29: Shifting towards a more balanced and profitable portfolio
The way forward Shifting towards a more balanced and profitable portfolio Revenue EBITDA Strategic Pulp investments Paper EBITDA margin 15-35 % Packaging Power Core business EBITDA margin 10-15 % 25% 68% 2021 2030 2021 2030
Slide 30: Capex: 40% investments in packaging and power
The way forward Capex: 40 % investments in packaging and power Funding: 40 % own equity, 60 % loans to optimise the balance structure Capex 2020-2030 Pulp Paper Capex 2022-2030 Packaging 12% Power 33% 30% 25% 2020-2021H1 2022-2024 2025-2027 2028-2030
Slide 31: Sustainability goals 2035
The way forward Sustainability goals 2035 100 % Combating climate change through products and solutions based on renewable materials and renewable energy, while replacing plastic Renewable business and fossil materials, is a natural part of Arctic Paper's new strategy. For paper and packaging, the g
Slide 32: A summary of the new strategy
The way forward A summary of the new strategy • Growth in fast-growing areas • Better margins and higher profitability CO2 neutral 2035 • A more resilient and well balanced group >4000 2030 EBITDA composition 2030 MPLN 17% 27% >3500 2020: 2847 MPLN MPLN 2025 29% 27% Revenues Pulp Paper Packaging Pow
Slide 33: 4P for future Arctic
New strategy 4P for future Arctic
Slide 34: Contact
Contact Poland Sweden Piotr Owdziej Göran Eklund IR contact CFO Mobile +48 697 612 913 Mobile +46 10 451 7054 Telephone +48 22 440 1 440 Telephone +46 10 451 7054 Email Piotr.owdziej@ccgroup.pl Email Goran.eklund@arcticpaper.com