27 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Apr 24, 2020
Slide 1: April 24, 2020
April 24, 2020
Slide 2: Ulf Larsson, CEO
ow Ulf Larsson,
Slide 3: Coronavirus pandemic; sales and EBITDA vs Q1 2019
Coronavirus pandemic • Health and safety highest priority • Limited effect in Q1, significant uncertainty going forward • Higher demand for pulp to tissue and hygiene products, and for packaging paper to e-commerce and essential products • Lower demand for solid wood products and publication paper S
Slide 4: EBITDA, Industrial ROCE and EBITDA development
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,030 9% 1,549 1,494 1,560 -34% 1,340 1,364 1,175 1,034 1,055 1,030 33% 30% 31% EBITDA margin Net debt/EBITDA 27% 27% 26% 24% 21% 1.9x 22% 21% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Note: 1) ROCE for the industrial se
Slide 5: Forest: declining prices, stable wood supply, sales up 11%
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 11% 37% Declining prices 452 24.6% 1,833 1,651 20.0% Stable wood supply to industries 331 Sales up 11% + Increased pulp and kraftliner volumes - Lower prices Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 EBITDA up 37% Price development – Pulpwood and Sa
Slide 6: Wood: stable consumption, low prices, sales down
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -14% -68% Stable consumption, but low prices due to over 1,678 297 17.7% supply in continental Europe 1,436 Sales down 14% 6.6% - Lower prices 95 - Deconsolidation in Wood France following merger with Groupe ISB Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1
Slide 7: Higher pulp demand
Softwood pulp price (USD/t) vs deliveries (Mt) Increased Hardwood pulp inventories (days of supply) demand Normalized 1,400 24.6 80 inventories 1,200 24.2 70 1,000 23.8 60 800 23.4 Average 50 600 23.0 40 400 NBSK PIX Price Europe (LHS) 22.6 200 Global Softwood Kraft deliveries (RHS) 22.2 30 0 21.8 2
Slide 8: Pulp: sales up 5%, EBITDA down 47%
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 5% -47% Sales up 5% 1,188 31.0% + Increased volumes to expanded pulp mill 1,134 351 - Lower prices 186 15.6% EBITDA down 47% - Lower prices + Increased volumes to expanded pulp mill Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 + Positive currency effec
Slide 9: Higher kraftliner demand
Price (EUR/t) vs Kraftliner deliveries (Mt) European box demand (index) Strong annual 850 run rate 5.5 108 Stable increase in 800 end demand 106 750 5.4 700 104 5.3 650 102 600 Unbleached kraftliner price Euwid (LHS) 5.2 100 550 Kraftliner deliveries Europe (RHS) 500 5.1 98 Kraftliner inventories (d
Slide 10: Paper: sales down 5%, EBITDA down 38%
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -5% -38% Sales down 5% 616 2,366 2,242 26.0% - Lower kraftliner and publication paper prices + Higher kraftliner volumes 379 16.9% EBITDA down 38% - Lower kraftliner and publication paper prices + Higher kraftliner volumes Q1 2019 Q1 2020 Q1 2019 Q1 2020
Slide 11: New forest survey conducted in 2019
Gross forest growth Sweden Harvesting plan New forest survey conducted in 2019 (m m3fo / year) (m m3sub / year) +1 +1.1 Annual growth 1 m m3fo higher than expected 5.4 10.5 • Gross growth of 10.5 (9.5) m m3fo per year 9.5 • Net growth of 4.0 (3.0) m m3fo per year 4.3 New harvesting plan calculated b
Slide 12: Coronavirus: impact and mitigating actions by segment
SCA supplies raw No disruptions in production or distribution in Q1 material to tissue and • Forest – no effect in Q1 hygiene products • Wood – limited effect in Q1, significant uncertainty going forward • Pulp – increased demand in Q1 • Paper – higher demand for kraftliner, significantly lower for
Slide 13: Toby Lawton, CFO
Slide 14: Quarter SEKm Q1 2020
Quarter SEKm Q1 2020 Q1 2019 Change Net sales 4,793 5,076 -6% EBITDA 1,030 1,560 -34% EBITDA margin 21.5% 30.7% -9.2 p.p. EBIT 628 1,168 -46% EBIT margin 13.1% 23.0% -9.9 p.p. Financial items -24 -30 Profit before tax 604 1,138 -47% Tax -121 -230 Profit for the period 483 908 -47% Earnings per share
Slide 15: Net sales and EBITDA by segment, quarterly
Forest Wood Pulp Paper 2,426 2,413 2,421 2,366 2,375 2,380 2,242 Net sales (SEKm) 2,108 1,865 1,846 1,833 1,746 1,727 1,712 1,694 1,678 1,651 1,558 1,545 1,540 1,455 1,436 1,376 1,214 1,188 1,162 1,134 1,129 1,049 900 743 485 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 16: Net sales bridge Q1 2019 to Q1 2020
Deconsolidation in Wood Negative for all Expanded pulp mill and France following merger segments higher Kraftliner volumes with Groupe ISB SEK 5,076m -16% SEK 11% 2% -3% 4,793m - 6% Net sales Price/Mix Volume Currency Acquisitions/ Net sales Q1 2019 divestments Q1 2020 16
Slide 17: EBITDA bridge Q1 2019 to Q1 2020
Lower prices for all segments SEK Restructuring SCA Wood 1,560m -912 France (positive one-off item EUR and of SEK 90m in Q1 2019) Lower costs for USD positive wood and other Expanded pulp mill and raw materials higher Kraftliner volumes +140 -96 SEK 1,030m +174 -3 +167 - 34% EBITDA margin EBITDA mar
Slide 18: Cash flow, Quarter SEKm Q1 2020
Quarter SEKm Q1 2020 Q1 2019 EBITDA 1,030 1,560 Revaluation of biological assets and other non cash flow items -340 -246 Operating cash surplus 690 1,314 Change in working capital -146 -353 Current capital expenditures -175 -168 Other operating cash flow -28 -167 Operating cash flow 341 626 Acquisit
Slide 19: Net debt development
SEK SEK SEK SEK SEK SEK SEK +600m 9,087m 8,597m -341m +189m 0m +42m 835 Lease Lease 854 Kraftliner and pulp Revaluation of pension expansion assets and Other Net debt / EBITDA Net debt / EBITDA 1.6x 1.9x Net debt Operating Strategic capex Acquisitions Paid tax Other Net debt Q4 2019 cash flow Q1 202
Slide 20: Debt and financing overview (Mar 31, 2020)
Debt overview (Mar 31, 2020) Financing overview (Mar 31,2020) Maturity, years Total Debt (SEKbn) Limit 0-1 1-2 2- utilized 8.0 Syndicated credit facilities (RCF) 5.0 - Bond loans within MTN program 8.0 1.0 1.1 2.1 Commercial paper (CP) 5.0 2.9 2.9 5.0 5.0 1 Other loans 4.0 4.0 4.0 Total Group 3.9 1.
Slide 21: Capital employed and balance sheet
SEKm Mar 31, 2020 Dec 31, 2019 Forest assets 70,097 69,682 Working capital 3,470 3,748 Working capital/Net sales 1) 20% 20% Deferred tax relating to forest assets -14,107 -13,977 Other capital employed 17,878 17,654 Total capital employed 77,338 77,107 Net debt 9,087 8,597 Net debt/EBITDA 2) 1.9x 1.
Slide 22: Summary
Summary Ulf Larsson, CEO WSCA
Slide 23: Summary: pandemic, sales, EBITDA, forest growth
Coronavirus pandemic Sales declined 6% vs Q1 2019 EBITDA down 34% vs Q1 2019 Higher forest growth enables increased annual harvesting 23
Slide 24: Q&A
Slide 25: Appendix
Slide 26: Net sales and EBITDA by segment, 2014-2019 and LTM
Forest Wood Pulp Paper Net sales (SEKm) 9,643 9,229 9,105 8,226 8,548 8,434 7,744 6,956 7,138 6,618 6,325 5,994 6,084 5,187 5,108 4,978 5,070 5,455 5,114 5,315 5,441 4,377 4,431 2,518 2,760 2,492 2,542 2,866 2014 2015 2016 2017 2018 2019 LTM 2014 2015 2016 2017 2018 2019 LTM 2014 2015 2016 2017 2018
Slide 27: Forward-looking statements
This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read SCA’s most recent annual report for a better understanding of these risks and unce