Slide 1: FY2010 Financial Review
FY2010 Financial Review May 24, 2011 Nippon Paper Group, Inc.
Slide 2: Contents
Contents 1. FY2010 Financial Highlights 2. Impact of the 3.11 Earthquake (the Great East Japan Earthquake) 3. Financial Results 4. Earnings Forecast 5. Appendix 2
Slide 3: 1. FY2010 Financial Highlights
1. FY2010 Financial Highlights Achieved operating income forecast despite the impact of the Great East Japan Earthquake (¥billion) FY10 vs. forecasts <Net Sales> 1,099.8 -20.2 <Operating Income> 35.6 +0.6 <Net Income> -24.2 -39.2 • Steady cost reduction contributed to operating income • Recorded a ¥
Slide 4: 2. Impact of the 3.11 Earthquake - Our actions
2. Impact of the 3.11 Earthquake - Our actions 2011 Mar.11 Great East Japan Earthquake -Ishinomaki, Iwanuma, and Nakoso mills completely halted operation Mar.12 Established Disaster Response Office -to collect damage information and confirm employees safety Mar.17 Established Disaster Recovery Offic
Slide 5: 2. Impact of the 3.11 Earthquake (2)
2. Impact of the 3.11 Earthquake (2) ❏ Employees 10 lives lost / 4 Unknown ❏ Facilities Operations halted at 3 key paper mills in Tohoku Region - 2 mills other than Ishinomaki (hit by tsunami) have already resumed. Mill Main products Situation Recovery work underway Ishinomaki Printing - Major paper
Slide 6: 2. Impact of the 3.11 Earthquake (3)
2. Impact of the 3.11 Earthquake (3) ❏ Breakdown of the loss on seismic disaster (¥billion) Loss on disposal of inventories 11.6 Repair cost of fixed assets 45.3 Fixed costs during the temporary shutdown period of operations 2.5 Others 3.4 Total 62.8 6
Slide 7: 3. Financial results - Outline
3. Financial results - Outline FY09 FY10 Change (¥billion) <Net Sales> 1,095.2 1,099.8 4.6 <Operating Income> 43.1 35.6 -7.5 <Ordinary Income> 37.5 31.6 -5.9 <Net Income> 30.1 -24.2 -54.3 7
Slide 8: 3. Financial results - Variance analysis for operating income
3. Financial results - Variance analysis for operating income Achieved the forecast but decreased ¥7.5 billion yoy (¥billion) -7.5 43.1 Sales Cost Reduction, (Volume & price) etc. 35.6 -20.0 +12.7 Raw material Others & fuel prices -8.3 +8.1 FY09 FY10 8
Slide 9: 3. Financial results - Segment information
3. Financial results - Segment information Segments other than pulp and paper enjoyed steady performance (\ billion) (Upside:Sales) Change (Downside:Operating income) 1Q 2Q 3Q 4Q FY10 yoy 222.8 223.6 225.0 208.3 879.7 -0.6 Pulp and Paper 6.5 5.0 5.4 6.3 23.2 -12.6 Paper-related 22.7 24.0 22.5 25.1 9
Slide 10: 3. Financial results - Sales volume by product
3. Financial results - Sales volume by product Domestic paper sales decreased 2.3% yoy change thousand tons FY10 yoy Newsprint 1,186 -2.6% Printing & Business communication paper 2,704 -2.4% Packaging paper and others 375 -0.6% Domestic sales (paper) 4,265 -2.3% Export (paper) 427 7.7% Container boa
Slide 11: 3. Financial results - Balance sheet
3. Financial results - Balance sheet Mar.31, Mar.31, ¥billion Change 2010 2011 Total Assets 1,500.2 1,560.6 60.3 - Cash and time deposits 24.3 104.8 80.6 - Inventories 153.5 141.4 -12.1 Liabilities 1,040.3 1,151.8 111.6 - Interest bearing liabilities 762.9 832.3 69.4 (incl. lease obligations) Net As
Slide 12: 3. Financial results - Cash flow statement
3. Financial results - Cash flow statement Reserved short-term liquidity ¥billion 1Q 2Q 3Q 4Q FY10 FY09 Operating activities 36.1 9.4 5.7 64.2 115.5 117.0 Investing activities -59.3 -9.3 -6.7 -18.2 -93.5 -70.9 Free cash flows -23.1 0.1 -1.0 46.0 22.0 46.0 Financing activities 21.0 -6.2 9.0 35.3 59.1
Slide 13: 4. Earnings forecast
4. Earnings forecast ❏ Due to increased uncertainty brought by the Great East Japan Earthquake in domestic economy and market conditions surrounding Nippon Paper Group, we at this moment reserve earnings forecasts for the fiscal year ending March 31, 2012. ❏ We will release the projection as soon as
Slide 14: Appendix
Appendix
Slide 15: Appendix - Major input price trends
Appendix - Major input price trends \ Wastepaper Woodchip/Pulp Crude Oil(Dubai) Coal Source: Paper Recycling Promotion Center, Pulp&Paper Week, Crude oil= Platts, Coal=Global Coal Index
Slide 16: Appendix - Domestic shipment
Appendix - Domestic shipment Paper & paperboard / FY10 change (1,000 tons) yoy Newsprint 326.4 -2.8% Printing & Business communication paper 853.4 -1.6% Coated 482.6 -1.3% Uncoated & Specialty printing 226.1 -3.3% Business communication 144.7 -0.1% Other papers (Packaging paper, sanitary paper, and
Slide 17: Appendix - Domestic shipment trends (yoy)
Appendix – Domestic shipment trends (yoy) Paperboard Printing paper & Business communication paper Source: Japan Paper Association
Slide 18: Appendix - Domestic market price trends
Appendix - Domestic market price trends (Apr.’08 = 1 Source: Bank of Japan”Corporate Goods Price Index”
Slide 19: Appendix - Key figures and indices
Appendix - Key figures and indices FY08 FY09 FY10 ROE -5.4% 7.0% -5.6% Operating margin on sales 1.7% 3.9% 3.2% Ordinary margin on sales 1.5% 3.4% 2.9% D/E (times) x1.9 x1.6 x1.8 Capital investment (\ billion) 64.9 35.6 46.6 Depreciation (\ billion) 83.3 81.9 78.6 Interest-bearing debt (\ billion) 7
Slide 20: Disclaimer
Disclaimer Any statements in this presentation document, other than those of historical fact, are forward-looking statements about the future performance of Nippon Paper Group,Inc. and its group companies. These statements are based on management’s assumptions and beliefs in light of information cur