Slide 1: Interim Report January-June 2012
INTERIM REPORT | JANUARY-JUNE 2012 Per Lindberg, CEO and President, and Susanne Lithander, CFO | 19 July, 2012 1
Slide 2: Agenda
AGENDA • Highlights • Development by Business Area • Financials • Outlook 2
Slide 3: Highlights in Q2 2012
HIGHLIGHTS IN Q2 2012 • Increase in net sales and sales volumes vs. Q1 2012 • Operating profit of MSEK 161, 7% operating margin • Increase in EBIT for all business areas vs. Q1 2012 • Non-recurring costs of MSEK 38 • Stable order books at normal levels for packaging paper • Stable prices in local cu
Slide 4: Increased operating profit for all business areas
INCREASED OPERATING PROFIT FOR ALL BUSINESS AREAS MSEK 250 NET SALES SALES VOLUME 212 200 +10% +51% +14% 140 150 135 100 100 50 67 56 0 10 -16 Q1 -12 Q2 -12 -50 MP PB PSP 4
Slide 5: Adjusted operating profit
ADJUSTED OPERATING PROFIT MSEK 250 199 200 38 156 150 14 100 161 142 50 0 Q1 -12 Q2 -12 Operating profit Non-recurring costs 5
Slide 6: Three business areas becomes two in Q3
THREE BUSINESS AREAS BECOMES TWO IN Q3 Packaging & Packaging Boards Market Pulp Speciality Paper X 6
Slide 7: Packaging & Speciality Paper
PACKAGING & SPECIALITY PAPER Market situation in Q2 2012 • Stable order situation for kraft paper and somewhat weaker order situation for sack paper at the end of Q2 vs. Q1 2012 • Normal order levels • Stable prices in local currency with a certain improvement towards end of Q2 • Implementation of p
Slide 8: Packaging & Speciality Paper: Financials Q2 2012 vs. Q1 2012
PACKAGING & SPECIALITY PAPER Financials – Q2 2012 vs. Q1 2012 160 • Operating profit up by MSEK 35 140 Operating profit, MSEK 120 • Higher sales volumes as a result of 100 the acquisition and lower variable 80 costs 60 40 20 0 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q2 -12 Q2 -12 Q1 -12 Q2 -11 FY 2011 Net sale
Slide 9: Packaging Boards
PACKAGING BOARDS Market situation in Q2 2012 • Somewhat improved order situation • Normal order levels for most products • Lower average prices in local currency vs. Q1 2012 due to a changed customer and geographical mix • Implementation of price announcement for Billerud’s fluting was made more dif
Slide 10: Packaging Boards: Financials Q2 2012 vs. Q1 2012
PACKAGING BOARDS Financials – Q2 2012 vs. Q1 2011 140 • Operating profit up by MSEK 11 120 Operating profit, MSEK • Higher sales volumes and lower 100 variable costs compensated for lower 80 average prices and higher fixed 60 costs 40 20 0 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q2 -12 Q2 -12 Q1 -12 Q2 -11 FY
Slide 11: Market Pulp
MARKET PULP Market situation in Q2 2012 • Unchanged balance between supply and demand • Producers’ pulp stocks relatively stable • Price decreased to ~830 USD/tonne at end of Q2 2012 from ~850 USD/tonne at end of Q1 2012 11
Slide 12: Market Pulp: Financials Q2 2012 vs. Q1 2012
MARKET PULP Financials – Q2 2012 vs. Q1 2012 40 • Operating profit up by MSEK 26 30 Operating profit, MSEK • Improved average prices in local 20 currency, an improved currency 10 situation and lower variable costs 0 Q2 -11 Q3 -11 Q4 -11 Q1 -12 Q2 -12 -10 -20 -30 Q2 -12 Q1 -12 Q2 -11 FY 2011 Net sale
Slide 13: BillerudKorsnäs - A world class packaging materials company
BILLERUDKORSNÄS - A WORLD CLASS PACKAGING MATERIALS COMPANY Combining two leading …into a new entity …with the aim to create: Swedish packaging under very strong materials companies… brand names… ● Strengthened offering of primary fibre- based packaging materials ● Complete and well balanced product
Slide 14: Q2 2012 in sum
Q2 2012 IN SUM • Increase in net sales and sales volumes, partly due to acquisition • Increase in EBIT for all business areas vs. Q1 2012 • Non-recurring costs of MSEK 38 • Stable order books at normal levels for packaging paper • Stable prices in local currency for the Group vs. Q1 2012 • Acquired
Slide 15: Financial information
BILLERUD FINANCIAL INFORMATION
Slide 16: Quarterly key figures
QUARTERLY KEY FIGURES Q2 -12 Q1 -12 Q2 -11 Net sales, MSEK 2,440 2,291 2,383 Operating profit, MSEK 161 142 275 Operating margin 7% 6% 12% Profit/share, SEK 1.14 0.94 1.88 Net debt/equity ratio 0.23 -0.04 0.06 Sales volume (ktonnes) 374 360 335 16
Slide 17: Operating profit bridge Q2 2012 vs. Q1 2012
OPERATING PROFIT BRIDGE Q2 2012 vs. Q1 2012 300 +46 250 +17 +57 200 -4 161 MSEK 150 -94 -3 142 100 50 0 Operating Sales & Selling prices Effects of Change in Change in Change in Operating profit production (in respective exchange rate variable costs fixed costs depreciation profit Q1 2012 volumes* s
Slide 18: January-June key figures
JANUARY-JUNE KEY FIGURES Jan-Jun 2012 Jan-Jun 2011 vs. 2011 Net sales, MSEK 4,731 4,930 -4% Operating profit, MSEK 303 607 -50% Operating margin 6% 12% -6 p.p. Profit/share, SEK 2.08 4.16 -50% Net debt/equity ratio 0.23 0.06 -0.17 Sales volume (ktonnes) 734 704 +4% 18
Slide 19: Operating profit bridge Jan-Jun 2012 vs. Jan-Jun 2011
OPERATING PROFIT BRIDGE JAN-JUN 2012 vs. JAN-JUN 2012 800 700 +61 607 600 500 MSEK 400 +105 +1 303 300 -365 -59 -47 200 100 0 Operating Sales & Selling prices Effects of Change in Change in Change in Operating profit production (in respective exchange rate variable costs fixed costs depreciation pro
Slide 20: Cash flow generation from operation
CASH FLOW GENERATION FROM OPERATION MSEK Jan-Jun Jan-Jun Q2 -12 Q1 -12 Q2 -11 2012 2011 Operating surplus, etc 316 298 421 614 902 Change in working capital, etc. -54 22 57 -32 -244 Net financial items, taxes, etc. -50 -202 -10 -252 -191 Cash flow from operating 212 118 468 330 467 activities Curren
Slide 21: Market prices affecting result
MARKET PRICES AFFECTING RESULT Electricity index (Sweden*) Wood price index 280 160 240 140 200 120 160 120 100 80 80 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11 Source: Nordpool. *Price area Sweden Source: Billerud 21
Slide 22: Market prices affecting result
MARKET PRICES AFFECTING RESULT Market pulp (USD/t) TCW index* 118 1 050 1 000 115 950 112 900 850 109 800 106 750 103 700 650 100 600 97 550 94 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11 Note: Average price for the quarte
Slide 23: Currency situation
CURRENCY SITUATION • Profit effect of net flow hedging MSEK -5 (52) for Q2 2012 and MSEK 38 (151) for Jan-Jun 2012 • Market value of outstanding contracts not relating to trade receivable was MSEK 24* Average hedged currency rates (share of net flow) Hedge level 12 months forward: Q3 -12 Q4 -12 Q1 -
Slide 24: Outlook
BILLERUD OUTLOOK 24
Slide 25: Outlook
OUTLOOK • At the beginning of the third quarter 2012, the order situation in the packaging paper segments was on average normal and is anticipated to remain stable over the next quarter • It is expected that price rises in sack and kraft paper, announced in the second quarter 2012, will show through
Slide 26: Q&A
Q&A We believe in embracing what is important to our customers, our company, our employees and the environment. By always giving back more than we take, we are building a company for future generations. 26