Norske Skog Asa · OSL:NSKOG
Norske Skog Asa — Q3 2022 Earnings Presentation
22 slides from Norske Skog Asa's earnings presentation, Oct 21, 2022
Slide 1: Q3 2022 presentation
Q3 2022 presentation 21 October 2022 Website LinkedIn Quartr
Slide 2: Sustainable and innovative industry
Sustainable and innovative industry 2
Slide 3: Third quarter in brief
Third quarter in brief Good quarter in turbulent operating environment EBITDA of NOK 508m, impacted by reduction in CO2 compensation, reduced volumes, and higher fixed costs per tonne Adjusted EBITDA of NOK ~580m when adjusting for impact of reduction in CO2 compensation for H1 2022 Energy and raw m
Slide 4: Good quarter despite unpredictable operating conditions and ongoing mill conversion
Good quarter despite unpredictable operating conditions and ongoing mill conversion Revenue EBITDA and operating EBIT EBITDA bridge Q2 2022 to Q3 2022 NOKm (and deliveries volume) EBITDA, NOKm (and margin) NOKm Conversion down time at Operating EBIT1, NOKm Bruck PM3 and challenging operating conditi
Slide 5: Continued good performance in both segments
Continued good performance in both segments EBITDA Europe EBITDA Australasia Segment financials NOKm NOKm NOKm Europe Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 910 Operating rate, % 96% 96% 94% 90% 83% Deliveries, thousand tonnes 433 427 407 407 347 Total operating income 2 183 2 648 2 968 3 469 3 131 EBITDA 11
Slide 6: Solid balance sheet and liquidity
Solid balance sheet and liquidity Cash and cash equivalents Cash earnings NOKm NOKm Net debt of NOK 970m LTM cash earnings1 of NOK ~1.4bn Net debt / LTM reported EBITDA of 0.4x 598 2 047 Repurchased EUR 7.8m of EUR 150m bond 1 728 425 1 676 Total available liquidity of EUR ~460m 1 489 Cash of NOK 2
Slide 7: 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, 10 publication paper machines 1 225k tonnes newsprint Golbey PM1 (235kt) closing for conversion end of Q4’22 400k tonnes LWC magazine 360k tonnes SC magazine Targets POp
Slide 8: Energy and raw material market volatility expected to remain through winter months
Energy and raw material market volatility expected to remain through winter months Energy prices Germany Recovered paper prices Germany Spruce pulpwood prices Norway EUR per MWh EUR per tonne NOK per solid cubic metre 500 280 400 450 240 350 400 300 350 200 250 300 160 250 200 120 200 150 150 80 100
Slide 9: Managing European energy exposure in the short and long term
Managing European energy exposure in the short and long term Approximate European energy exposure European production capacity TWh Million tonnes capacity Publication paper Conversion and ramp-up period Packaging paper Waste-to-energy boiler reducing gas with ~0.7 TWh and increasing electricity with
Slide 10: Nordic market conditions generally favourable versus European environment
Nordic market conditions generally favourable versus European environment Western European publication paper industry capacity Norske Skog Europe publication paper capacity Percentages exclude Bruck PM3 and Golbey PM1 Conversion to France containerboard Switzerland Bruck PM3 Finland 125k tonnes Skog
Slide 11: Tough operating conditions and announced closures expected to keep the publication paper market tight
Tough operating conditions and announced closures expected to keep the publication paper market tight Publication paper industry capacity closures in Western Europe Publication paper stock volumes Western Europe Thousand tonnes Number of delivery days covered by inventories Completed closures Announ
Slide 12: 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 publication paper operating rate and demand EUR per tonne Million tonnes (and Norske Skog operating rate) 1 400 20 93% 95% 89% 89% 91% 1 20
Slide 13: Boyer well equipped to remain a cornerstone of Tasmanian industry
Boyer well equipped to remain a cornerstone of Tasmanian industry Tasmania Australia’s renewable energy powerhouse 100% self-sufficiency in renewable electricity (hydro, wind) 2x increase (10.5 TWh) in renewable energy output by 2040 Sole Australasian publication paper mill P 2030 ambition to be glo
Slide 14: Entering the market for recycled containerboard in four months
Entering the market for recycled containerboard in four months 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
Slide 15: Green Valley Energie CHP plant will support Golbey cost competitiveness
Green Valley Energie CHP plant will support Golbey cost competitiveness Biomass energy Biomass energy JV2 between Pearl (80%), Veolia (10%) and Norske Skog (10%) The JV will sell electricity to the French Green Valley Energie grid and steam to Norske Skog until 2043 CHP1 biomass boiler ~0.7 TWh of c
Slide 16: Waste-to-energy facility reducing Bruck cash-cost
Waste-to-energy facility reducing Bruck cash-cost Waste-to-energy Under commissioning with Valmet Reduces gas consumption by ~0.7 TWh and increases electricity by <0.2 TWh Enables very competitive steam supply for drying of paper and containerboard 16
Slide 17: Containerboard market softening, but still attractive for low cash-cost producers
Containerboard market softening, but still attractive for low cash-cost producers Recycled containerboard prices Germany Western European recycled containerboard operating rate and demand EUR per tonne Million tonnes (and industry operating rate) 1 000 30 96% 95% 95% 94% 93% 93% 25 800 20 600 15 400
Slide 18: Proud to develop a top-notch upper secondary school in Halden
Proud to develop a top-notch upper secondary school in Halden Welcomed 450 students and teachers in August Former Saugbrugs paper storage facilities transformed to a modern high school Wide spectre of amenities for vocational education, including music studios, concert halls, and wood and mechanic w
Slide 19: 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 20: Enabling the circular economy
Enabling the circular economy End-products recycled Waste utilised Green energy focused Europe & Australasia Europe & Australasia Europe & Australasia 71% 99% of water 98% 84% intake returned recycled1 after treatment utilised green Developing climate solutions Participating in Borg CO2 industry clu
Slide 21: Outlook
Outlook Publication paper market expected to remain tight due to industry capacity closures Volatile energy and raw material markets continues to cause operational challenges Actively manage energy exposure through Q4 2022 and Q1 2023 Publication paper price increases for Q4 2022 implemented to addr
Slide 22: Norske Skog ASA contact details
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