Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — FY2008 Earnings Presentation
30 slides from Stora Enso Oyj Class A's earnings presentation, Feb 5, 2009
Slide 1: Financial results Q4 and full year 2008
Financial results Q4 and full year 2008 Jouko Karvinen, CEO Markus Rauramo, CFO 5 February 2009
Slide 2: Forward-looking statements disclaimer
It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or
Slide 3: Contents
Contents • Overview • Q4 and full year 2008 results • Market outlook • Summary Financial results for Q4 and full year 2008 5 February 2009 3
Slide 4: Overview
Overview • Overview • Q4 and full year 2008 results • Market outlook • Summary Financial results for Q4 and full year 2008 5 February 2009 4
Slide 5: Overview of Q4 2008 results
Overview of Q4 2008 results • Aggressive production curtailments resulted in: − minimised inventories − substantial working capital reduction − poor earnings • Cash flow remained strong • Capital expenditure was further reduced • Positioned for price increases in some grades in early 2009 Financial
Slide 6: Q4 and full year 2008 results
Q4 and full year 2008 results • Overview • Q4 and full year 2008 results • Market outlook • Summary Financial results for Q4 and full year 2008 5 February 2009 6
Slide 7: Summary financials Q4 2008
Summary financials Q4 2008 Continuing operations % Change % Change EUR million III/08 IV/07 IV/08 Q408/Q407 Q408/Q308 Sales 2 723 2 981 2 603 -12.7 -4.4 EBITDA, excl. NRI and FV 302 307 163 -46.9 -46.0 Operating profit, excl. NRI and FV 126 144 28 -80.6 -77.8 Profit before tax, excl. NRI 118 284 -81
Slide 8: Change in operating profit excl. NRI & Fair Valuations Q4/07 – Q4/08
Change in operating profit excl. NRI & Fair Valuations Q4/07 – Q4/08, including closed units EUR million 200 +41 -28 -130 150 +144 100 50 -63 +28 +9 +2 +60 +5 0 excluding non-recurring items -14 +2 - 50 - 100 Q407 Sales Sales FX Sales Energy Fibre Other Fixed Depr. Assoc Other Q408 Price Volume Vari
Slide 9: Key annual figures
Key annual figures 2006–2008 EUR million 2006 2007 2008 Sales 11 460 11 849 11 029 EBITDA, excl. NRI and FV 1 628 1 570 1 027 Operating profit, excl. NRI and FV 839 861 388 Profit before tax, excl. NRI 674 970 152 Earnings per share, excl. NRI (EUR) 0.68 0.94 0.18 Cash earnings per share, excl. NRI
Slide 10: Operating cash flow
Operating cash flow Continuing operations EUR million 600 500 400 300 200 100 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08* Q2/08 Q3/08 Q4/08 -100 -200 -300 Cash flow from operations Cash flow after investing activities * Including a one-time change in timing of pa
Slide 11: Maturity profile 31 December 2008
Maturity profile 31 December 2008 EUR million EUR 1.4 Bn 1800 RCF 2012 Undrawn 1600 SEK 3.6 Bn 1400 3.875% 2009 EUR 500m 1200 USD 469 USD 507m 3.25% EUR 517m (750)m 6.404% 2010 5.125% USD 300m 7.375% 2016 1000 2014 7.25% 2011 Exchange 2036 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 12: Liquidity
Liquidity • Cash and cash equivalents as at end of Q4 2008 EUR 370 million • Only EUR 100 million of commercial paper outstanding • Debt maturities in 2009 EUR 570 million • Committed credit facility EUR 1.4 billion fully undrawn • Potential EUR 600 million available as Finnish pension commitment lo
Slide 13: Market outlook
Market outlook • Overview • Q4 and full year 2008 results • Market outlook • Summary Financial results for Q4 and full year 2008 5 February 2009 13
Slide 14: Price and demand forecasts 2009 – Europe
Price and demand forecasts 2009 – Europe (change % year-on-year) Demand Price RISI (Forecast Nov 08) RISI (Forecast Jan 09) RISI (Forecast Nov 08) RISI (Forecast Jan 09) Office Paper (cutsize) 0% 9% Cartonboard -1% 7% -2% 5% Coated Magazine Office Paper Coated Fine Cartonboard 3% Newsprint -3% SC Ma
Slide 15: Summary
Summary • Overview • Q4 and full year 2008 results • Market outlook • Summary Financial results for Q4 and full year 2008 5 February 2009 15
Slide 16: Preparing for a tough year ahead
Preparing for a tough year ahead Action Impact 1. Divestment of North American Balance sheet strengthened operations and Papyrus 2. Reduce short term debt Liquidity improved 3. Remove Russian wood dependency 1 January 2009 zero impact of duties if chosen 1. Annual cost improvement of EUR 140–160 mil
Slide 17: Ready for 2009
Ready for 2009 • Production curtailments continue; inventories kept in check • CAPEX budget reduced to EUR 500 million • Unit cost inflation before own actions forecast at zero for full year • Large-scale temporary lay-offs in Finland and further cost reduction measures being implemented • Pricing a
Slide 18: www.storaenso.com
www.storaenso.com Financial results for Q4 and full year 2008 5 February 2009 18
Slide 19: Appendix
Appendix Financial results for Q4 and full year 2008 5 February 2009 19
Slide 20: Operating profit by business area
Operating profit by business area % Change % Change EUR million III/08 IV/07 IV/08 Q408/Q407 Q408/Q308 Newsprint 34 48 53 10.4 55.9 % of sales 8.3 11.0 12.8 16.4 52.6 Magazine Paper 27 16 20 25.0 -25.9 % of sales 5.0 2.7 3.7 35.4 -25.8 Fine Paper 33 36 -10 -127.8 -130.3 % of sales 6.1 6.8 -2.1 -130.
Slide 21: Composition of costs
Composition of costs 2007–2008 6.6 % Impact on margin 2007 2008 % -unit Sales -6.5 Variable costs 64 % 67 % -0.6 Fibre 25 % 28 % -1.8 Chemicals and Fillers 9% 10 % -0.6 Energy 8% 10 % -1.4 Production Service and Material 12 % 9% 2.9 Logistics & Commissions 10 % 10 % 0.3 Fixed costs 28 % 27 % 1.7 Per
Slide 22: Capital expenditure and depreciation
Capital expenditure and depreciation 2005 – 2008 EUR million 1400 14 1200 12 1000 10 800 8 600 6 400 4 200 2 0 0 2005 2006 2007 2008 Capex Depreciation Capex % of sales Total Operations Depreciation excluding Impairments of Goodwill and Fixed Assets Financial results for Q4 and full year 2008 5 Febr
Slide 23: Debt/Equity – Total operations
Debt/Equity – Total operations 2004 – 2008 Objective < 0.8 0,8 0.8 0.70 0,7 0.7 0,6 0.6 0.56 0.54 0,5 0.5 0.40 0.39 0,4 0.4 0.3 0,3 0.2 0,2 0,1 0.1 0 2004 2005 2006 2007 2008 Financial results for Q4 and full year 2008 5 February 2009 23
Slide 24: Change in EPS Q4/07 – Q4/08
Change in EPS Q4/07 – Q4/08, including closed units EUR million 0.30 +0.28 -0.24 0.25 0.20 0.15 0.10 +0.04 -0.03 +0.04 -0.11 0.05 excluding non-recurring items 0.00 -0.05 -0.06 +0.05 +0.01 -0.02 -0.10 -0.08 -0.15 Q407 Fair vals* Q407 excl Sales Sales FX Sales Energy Fixed Assoc Financing Q408 Fair v
Slide 25: Change in EPS Q3/08 – Q4/08
Change in EPS Q3/08 – Q4/08, including closed units EUR million 0.15 +0.14 -0.09 0.10 +0.05 -0.01 0.05 -0.02 -0.08 excluding non-recurring items 0.00 -0.05 -0.02 -0.01 +0.02 -0.04 +0.03 -0.10 -0.08 -0.15 Q308 Fair vals* Q308 Sales Sales FX Sales Energy Fibre Assoc Financing Other Q408 excl Price Vol
Slide 26: Net Financial Items – Continuing Operations
Net Financial Items – Continuing Operations % Change % Change EUR million III/08 IV/07 IV/08 Q408/Q407 Q408/Q308 Net interest expense -40.1 -39.2 -42.9 -9% -7% Foreign exchange gains and losses 5.6 -5.4 -16.4 Na Na Other financial items, of which 11.5 0.9 -2.1 Na Na Capital gains, listed shares 0.0
Slide 27: Transaction risk and hedges
Transaction risk and hedges – Continuing Operations as at 31 December 2008 EUR million EUR USD GBP SEK JPY Other Total Sales during 2008 6 360 1 570 690 1 160 250 1 000 11 030 Costs during 2008 -6 300 -670 -110 -2 110 0 -1 150 -10 340 Net Operating Cash Flow 60 900 580 -950 250 -150 690 Transaction
Slide 28: Inventory levels per business area
Inventory levels Per Business Area (including raw materials, finished goods and other inventories) % Change % Change EUR million End Q4 08 End Q3 08 End Q4 07 Q4 08/Q3 08 Q4 08/Q4 07 Newsprint & Book Paper 124.7 150.4 157.0 -17.1 -20.6 Magazine Paper 203.9 269.0 252.8 -24.2 -19.4 Fine Paper 296.8 30
Slide 29: Energy balance 2009
Energy balance 2009 Excluding Summa, Norrsundet, Kemijärvi and Baienfurt TWh/a Self sufficiency 72% 40 Impact on operating profit EUR million p.a. Total energy self from 10% change in: 30 sufficiency 64% Electricity market price <5 Self sufficiency 47%* 20 Oil price ~15 10 0 Electricity Fuels Intern
Slide 30: Capacity reductions in 2008
Capacity reductions in 2008 Mill Date Grade Capacity reduction, t Summa Mill Jan 2008 Newsprint, un-coated mag, book paper 415 000 Anjala Mill PM1 Nov 2008 Book paper 120 000 Baienfurt Mill End 2008 FBB 190 000 Kabel Mill PM 3 End 2008 Coated magazine 140 000 Paikuse Sawmill End 2008 Sawn goods 170