25 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Apr 26, 2019
Slide 1: Q1 2019 Presentation, April 26, 2019
April 26, 2019
Slide 2: Presenter: CEO
eee) Larsson, CEO li
Slide 3: Prices coming down from peak levels
Prices coming down from peak levels • Higher vs Q1 2018, lower vs Q4 2018 Sales growth of 15% vs Q1 2018 • Price/mix 5%, volumes 5%, currency 5% EBITDA up 33% vs Q1 2018 + Higher prices and positive currency effects + Higher pulp volumes + Restructuring Wood France (SEK +90m) - Higher prices for woo
Slide 4: EBITDA development
EBITDA (SEKm) Industrial ROCE 1) EBITDA development (SEKm) 1,560 17% 33% 1,549 1,494 1,560 1,175 1,034 33% 30% 31% EBITDA margin Net debt/EBITDA 27% 31% 1.6x 22% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Note: 1) ROCE for the industrial segments; Wood, Pulp and Paper. ROCE calculated as LTM. 4
Slide 5: Forest: higher prices, increased wood sourcing
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 27% 9% Higher prices 1,651 331 23.4% 304 1,298 20.0% Increased wood sourcing to meet higher pulpwood demand Sales up 27% + Increased volumes to the expanded pulp mill + Higher prices Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Price development – Pulp
Slide 6: Wood: SCA Wood France merged with Groupe ISB
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 12% 73% SCA Wood France merged with Groupe ISB 297 17.7% 1,678 1,503 Stable delivery volumes 11.4% 172 Lower prices vs Q4 Sales up 12% + Increased volumes Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 + Higher prices and positive currency effects Price
Slide 7: Östrand pulp mill ramp-up
Average daily NBSK production (tonnes) Full capacity Full NBSK capacity of 900kt/year 2,500 12 months 18 months ramp-up ramp-up Ramp-up period of 12-18 months 2,000 • 2020 first full year with full Actual 1,500 capacity Production/deliveries on track 1) 1,000 • Q3 ’18 - 147kt / 105kt • Q4 ‘18 - 160k
Slide 8: Pulp: lower prices vs Q4, increasing volumes
Net sales (SEKm) EBITDA (SEKm) EBITDA margin 93% 97% Lower prices vs Q4 1,134 31.0% 351 30.2% Increasing volumes due to the ramp-up of the expanded pulp-mill 589 178 Sales up 93% + Increased volumes + Higher prices and positive currency effects Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 EBITDA
Slide 9: Paper: increased prices for Publication Paper
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -1% 5% Increased prices for Publication Paper 2,383 586 616 26.0% 2,366 24.6% Lower prices for Kraftliner vs Q4 Sales down 1% - Lower volumes + Higher prices and positive currency effects Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 EBITDA up 5% Price
Slide 10: Wind power: new target of 11 TWh
Initiate new wind projects New target Develop after market offering 11 TWh Target of 5.0 TWh by 2020 will be exceeded 2021 • 6.7 TWh secured by 2021 6.7 TWh New long-term target of 11.0 TWh 2020 5.0 TWh EBIT target of SEK ~100m (6.7 TWh) Q1 2019 2.7 TWh 10
Slide 11: SCA's forests bind CO2 and replace fossil products
SCA’s forests bind CO2 and Replaces 2 Higher growth enables more substitution – 5 replace fossil based products Mt CO2 renewable alternatives replace fossil based products SCA’s renewable Non-renewable Binds 1 products products net Growing forests bind CO2 – 4 active forest management Bioenergy Foss
Slide 12: Financials
Toby a
Slide 13: Income statement, Q1 2019
Quarter SEKm Q1 2019 Q1 2018 Change Net sales 5,076 4,400 15% EBITDA 1,560 1,175 33% EBITDA margin 30.7% 26.7% 4.0 p.p. EBIT 1,168 889 31% EBIT margin 23.0% 20.2% 2.8 p.p. Financial items -30 1 Profit before tax 1,138 890 28% Tax -230 -191 Profit for the period 908 699 30% Earnings per share, SEK 1.
Slide 14: Net sales and EBITDA by segment
Forest Wood Pulp Paper 2,383 2,426 2,413 2,421 2,366 2,220 Net sales (SEKm) 2,096 2,072 1,846 1,712 1,678 1,651 1,637 1,567 1,558 1,540 1,503 1,455 1,426 1,298 1,287 1,261 1,210 1,162 1,134 1,049 743 672 644 589 585 485 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 Q3 Q4
Slide 15: Net sales bridge Q1 2018 to Q1 2019
Higher pulp volumes Positive for all segments SEK 5% 5,076m 5% SEK 5% 4,400m Positive EUR and USD + 15% Net sales Price/Mix Volume Currency Net sales Q1 2018 Q1 2019 15
Slide 16: EBITDA bridge Q1 2018 to Q1 2019
Higher costs for wood raw material EUR and USD positive Higher prices for all segments SEK SEK SEK SEK SEK +46m 1,560m SEK +95m -173m SEK +118m +248m +51m SEK 1,175m Restructuring SCA Wood France Higher pulp volumes Improved energy balance in expanded pulp mill + 33% EBITDA margin EBITDA margin 26.7
Slide 17: Cash flow, Q1 2019
Quarter SEKm Q1 2019 Q1 2018 EBITDA 1,560 1,175 Revaluation of biological assets and other non cash flow items -246 -253 Operating cash surplus 1,314 922 Change in working capital -353 -159 Current capital expenditures -168 -76 Other operating cash flow -167 -96 Operating cash flow 626 591 Strategic
Slide 18: Net debt development
SEK SEK SEK +1,211m +15m 9,150m SEK +1,229m SEK SEK 7,020m -626m SEK SEK +143m +158m Net debt / EBITDA Net debt / EBITDA 1.3x 1.6x Net debt Operating Strategic capex Acquisitions Dividend Leasing effect Other Net debt Q4 2018 cash flow (IFRS 16) Q1 2019 18
Slide 19: Capital employed and net debt
SEKm Mar 31, 2019 Dec 31, 2018 Forest assets according to IAS 41 1) 32,298 32,065 Deferred tax relating to Forest assets -6,653 -6,605 Forest assets, net of deferred tax 25,645 25,460 Working capital 3,955 3,735 Working capital/Net sales 2) 18% 18% Other capital employed 18,174 16,887 Total capital
Slide 20: Summary: prices coming down from peak levels
Prices coming down from peak levels Sales growth of 15% vs Q1 2018 EBITDA up 33% vs Q1 2018 Increasing pulp volumes from Östrand ramp-up SCA Wood France merged with Groupe ISB Acquisition of 10,000 ha forest land in Latvia (post Q1) 20
Slide 21: SCA Frontier
Slide 22: Appendix
Appendix QSSCA
Slide 23: Net sales and EBITDA by segment, 2014-2018
Forest Wood Pulp Paper Net sales (SEKm) 9,643 9,626 8,226 8,548 8,434 7,744 6,618 6,794 5,808 5,994 5,187 5,108 4,978 5,070 5,455 5,114 5,315 5,441 3,411 2,518 2,760 2,492 2,542 2,866 2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM
Slide 24: Q&A
Slide 25: 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