Billerud AB · OMXSTO:BILL
Billerud AB — Q2 2006 Earnings Presentation
26 slides from Billerud AB's earnings presentation, 2006
Slide 1: BILLERUD
BILLERUD
Slide 2: Second Quarter Report January-June 2006
Second Quarter Report JANUARY - JUNE 2006 Per Lindberg, CEO Bertil Carlsén, CFO
Slide 3: Quarterly update & news
Quarterly update & news Highlights Development by Business area Ongoing projects Financials Outlook
Slide 4: Key figures
FINANCIALS Key figures - Q2 vs. Q1 2006 Q2 2006 Q1 2006 vs. Q1 - 2006 Deliveries (‘000 tonnes) 345 342 +1 Net sales, MSEK 1,839 1785 +3% Operating profit, MSEK 107 64 +67% Operating margin 6% 4% +2 Profit/share, SEK 1,18 0,63 +87% Debt/Equity ratio 1,14 0,96 +0,18
Slide 5: Q2 2006
Q2 2006 Continued improved market situation Price increases implemented Two out of three steam turbines for electricity generation came into operation Production problems in Gruvön due to disruptions in external electricity supply New product for fruit and vegetable segment
Slide 6: Packaging & Speciality Paper, Packaging Boards, Market Pulp
Packaging & Speciality Paper MG, MF & Sack Paper Packaging Boards S/C Fluting, Liner, Liquid Board Market Pulp Nordic Bleached Softwood Kraft Pulp
Slide 7: Packaging & Speciality Paper market situation
MARKET SITUATION Packaging & Speciality Paper Q2 Good orderbook Improved supply and demand balance in brown sack paper Price increases announced for brown sack paper and MG Unsatisfactory earnings in Beetham due to high energy prices
Slide 8: Packaging & Speciality Paper Financials
PACKAGING & SPECIALITY PAPER Financials EBIT Deliveries -1% vs. Q1-06, 150 -1% vs. Q2 2005 125 100 75 50 25 0 Q2 Q3 Q4 Q1 Q2 2005 2006 Q2, 2006 Q1, 2006 Q2, 2005 2005 Net sales, MSEK 905 946 943 3751 Operating profit, MSEK 58 60 83 411 Operating margin 6 6 9 11
Slide 9: Packaging Boards market situation
MARKET SITUATION Packaging Boards Q2 Strong orderbook for S/C fluting, stable situation for white liner Improved supply and demand balance (S/C fluting) Price increase announced from from June/July for S/C fluting
Slide 10: The new Billerud Flute
PACKAGING BOARDS The new Billerud Flute® The new Billerud Flute® targets market for fruit and vegetables Shows an increase in performance by no less than 20% Makes it possible to reduce the consumption of raw material without compromising the performance of the box
Slide 11: Packaging Boards Financials
PACKAGING BOARDS Financials EBIT Deliveries +1% vs. Q1-06, 60 +2 vs. Q2 2005 35 10 -15 -40 Q2 Q3 Q4 Q1 Q2 2005 2006 Q2, 2006 Q1, 2006 Q2, 2005 2005 Net sales, MSEK 533 543 517 2 058 Operating profit, MSEK 9 40 32 81 Operating margin 2 7 6 4
Slide 12: Market Pulp market situation
MARKET SITUATION Market Pulp Q2 Good demand situation Price increase from USD 630 in March to USD 690 end of June Further price increases expected during the rest of 2006
Slide 13: Market Pulp Financials
MARKET PULP Financials EBIT Deliveries +5% vs. Q1-06, 30 +9% vs. Q2 2005 20 10 0 -10 -20 -30 Q2 Q3 Q4 Q1 Q2 2005 2006 Q2, 2006 Q1, 2006 Q2, 2005 2005 Net sales, MSEK 345 309 310 1 197 Operating profit, MSEK -5 -15 -4 -12 Operating margin -1 -5 -1 -1
Slide 14: Billerud 2007 cost reduction programme
COST REDUCTION PROGRAMME Billerud 2007 Cost savings MSEK 250, of which ⅓ 2006 One-time cost MSEK 400 charged in 2005 Cash-out up to June 2006, MSEK 175 Program develops according to plan
Slide 15: Energy investment programme
ENERGY INVESTMENT PROGRAMME Energy Cost savings MSEK 250, higher depreciations MSEK 50 Effect 2006 MSEK 100 Turbines at Skärblacka and Gruvön up and running since end of Q2, Karlsborg running from October Program develops according to plan
Slide 16: Financials
Financials
Slide 17: Key figures Q2 vs. Q1 2006
FINANCIALS Key figures - Q2 vs. Q1 2006 Q2 2006 Q1 2006 vs. Q1 - 2006 Deliveries (‘000 tonnes) 345 342 +1 Net sales, MSEK 1,839 1785 +3% Operating profit, MSEK 107 64 +67% Operating margin 6% 4% +2 Profit/share, SEK 1,18 0,63 +87% Debt/Equity ratio 1,14 0,96 +0,18
Slide 18: Key figures Jan-June 2006 vs. Jan-June 2005
FINANCIALS Key figures - Jan-June 2006 vs. Jan-June 2005 Jan-June Jan-June vs. Jan-June 2006 2005 2005 Deliveries (‘000 tonnes) 687 685 +/-0 Net sales, MSEK 3,624 3,443 +5% Operating profit, MSEK 171 86 +100% Operating margin 5% 2% +3 Profit/share, SEK 1,81 0,72 +151% Debt/Equity ratio 1,14 0,76 +0,
Slide 19: Reasons for EBIT development
FINANCIALS Reasons for EBIT development - Jan-June 2006 vs. Jan-June 2005 Deliveries and prod. volumes, incl. product mix + 26 Sales prices (in local currencies) + 60 Increased variable costs - 115 Decreased fixed costs + 44 Increase in depreciations - 20 Effect of exchange rates, including hedging
Slide 20: Cost structure
COST DEVELOPMENT Cost structure - % of total costs 2005 Wood fibre 29 Staff 21 Freight 13 Chemicals 8 Other materials 5 Energy 6 Depreciation 6 Purchased services 3 Other 9 Total 100
Slide 21: Market prices affecting result
COST DEVELOPMENT Market prices affecting result Electricity index (Sweden*) Wood price index 180 115 160 110 140 105 120 100 100 95 80 90 2004 Q1 Q2 Q3 Q4 Q1 Q2 2004 Q1 Q2 Q3 Q4 Q1 2005 2006 2005 2006 Source: Nordpool. *Price area Sweden Source: Billerud Market Pulp (USD/t) TCW index Q1 2006 USD 620
Slide 22: Currency situation and hedging
FINANCIALS Currency situation and hedging Currency situation Hedging policy Revenues mainly in Constant hedgings, EUR (2/3) and USD approx 50% of 12 months (1/3) future net flow Main cost items in SEK If ROCE > 20%, increased to 15 months future net flow
Slide 23: Currency situation
FINANCIALS Currency situation Hedged net flows, 57% (of 12 months net flows) Average Positive profit effect of net flow hedging hedged Current Change MSEK 56 for Q2 2006 currency rates Q2/Q1 rates 9.38 9.25 -0,6% EUR 57% 7.33 7.27 -4,9% USD 52% 50% 13.38 13.53 -0,9% GBP 0% 20% 40% 60% 80% 100%
Slide 24: Cash Flow
FINANCIALS Cash Flow MSEK Q2 2006 Q1 2006 2005 Operating surplus etc 227 171 622 Cash effect of Billerud 2007 -62 -46 -67 Working capital change -188 126 -44 Finance net, taxes -6 -36 -98 Cash flow from operating activities -29 +215 413 Capex, excl. energy investments -62 -115 -399 Capex (energy inv
Slide 25: Outlook
Outlook Market situation expected to stay favorable – further price increases expected Continued high cost level for energy and wood Cost reduction programmes develops according to plan Additional internal power generation coming on stream during the second half of 2006
Slide 26: Second Quarter Report - Q&A
Second Quarter Report JANUARY - JUNE 2006 Q&A Per Lindberg, CEO Bertil Carlsén, CFO