25 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Oct 28, 2022
Slide 1: Q3 2022 Presentation, October 28, 2022
October 28, 2022
Slide 2: Ulf Larsson, CEO
Slide 3: 5th quarter in a row with 50% EBITDA margin
5th quarter in a row with 50% EBITDA margin Strong operating cash flow financing strategic investments Both Obbola and CTMP expansion projects on budget and ahead of time • New paper machine in Obbola running 24/7 Sales in line with Q3 2021 • Volume -6%, currency +5%, price/mix +1%, exit publication
Slide 4: EBITDA and EBITDA margin
EBITDA (SEKm) Industrial ROCE 1 EBITDA (SEKm) and EBITDA margin 2,484 44% -7% 3,121 2,806 2,684 2,608 2,484 2,260 EBITDA margin Net debt/EBITDA 59% 53% 52% 53% 1,377 1,359 50% 50% 0.8x 47% 1,032 33% 30% 24% Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1'22 Q2'22 Q3'22 1. LTM 4 Note: EBITDA excluding e
Slide 5: Forest: Stable wood supply, increasing wood prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +11% +21% Stable wood supply to industries 1,609 623 38.7% 1,455 35.5% 516 Increasing wood prices Sales up 11% + Higher prices EBITDA up 21% Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 + Higher revaluation of biological assets Price development – Pulp
Slide 6: Wood: Low global demand and reduced deliveries
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -35% -68% Low global demand and reduced deliveries 2,183 1 180 54.1% Sales down 35% 1,412 - Lower prices 27.1% 382 - Lower volumes EBITDA down 68% Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 - Lower prices - Lower volumes Price development – Solid Woo
Slide 7: Sanction of Russian and Belarus imports; high Scandinavian stock levels
Stock of sawn pine and spruce wood, Sweden and Finland (k m3) Price development sawn pine and spruce, Sweden (index) Normalized monthly level 340 5,000 290 4,000 240 Spruce 3,000 Pine 2,000 190 1,000 140 0 90 Production of sawn pine and spruce wood, Sweden and Finland (k m3) 3,500 Normalized monthly
Slide 8: Pulp: CTMP project at Ortviken on budget and ahead of time
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +25% +31% CTMP project at Ortviken on budget and 1,897 865 45.6% ahead of time 43.3% 1,522 659 Sales up 25% + Higher prices + Positive currency effects EBITDA up 31% Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 + Higher prices Price development – NBSK
Slide 9: NBSK pulp price and inventories
NBSK pulp price (USD/t) vs deliveries (Mt) Hardwood pulp inventories (days of supply) 14.5 1,600 80 14.0 1,400 70 1,200 60 13.5 50 Average 1,000 13.0 40 800 30 12.5 600 20 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Jan-18 Jan-17 Jan-19 Jan-20 Jan-21 Jan-22 Oct-19 Oct-21 Oct-17 Oct-18 Oct-20 Oct-22 Ju
Slide 10: Containerboard: Expansion project in Obbola on budget
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +28% +104% Expansion project in Obbola on budget and 1,694 733 43.3% ahead of time 1,326 27.1% Sales up 28% 360 + Higher prices EBITDA up 104% + Higher prices Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 - Higher wood raw material cost Price developmen
Slide 11: Record high kraftliner prices; box demand under pressure
Price (EUR/t) vs Kraftliner deliveries (Mt) European Box demand (index) 1,000 122 4.9 119 900 4.8 116 4.6 113 800 4.5 110 700 107 4.3 600 Unbleached kraftliner price Euwid (LHS) 4.2 104 Kraftliner deliveries Europe (RHS) 101 500 4.0 98 Kraftliner inventories (days of supply) 50 • Record high prices
Slide 12: New reporting segment from 1st of January 2023
New reporting segment from 1st of January 2023 SCA well positioned to capture growth in renewable energy • Transition towards fossil free Europe • Significant increase in demand for green electricity and renewable biofuels SCA is today a leading producer of renewable energy • 20% of Sweden’s wind po
Slide 13: Andreas Ewertz, CFO
Slide 14: Quarter: Q3 2022 financial summary
Quarter SEKm Q3 2022 Q3 2021 Change Net sales 5,007 5,077 -1% EBITDA 2,484 2,684 -7% EBITDA margin 49.6% 52.9% -3.3 p.p. EBIT 2,094 2,298 -9% EBIT margin 41.8% 45.3% -3.5 p.p. Profit for the period 1,666 1,821 -9% Earnings per share, SEK 2.35 2.49 14
Slide 15: Net sales and EBITDA by segment
Forest Wood Pulp Containerboard/Paper 1 Net sales (SEKm) 2,202 2,183 1,981 1,926 1,897 1,868 1,772 1,731 1,765 1,694 1,717 1,691 1,659 1,629 1,627 1,609 1,592 1,518 1,565 1,564 1,522 1,498 1,474 1,455 1,412 1,340 1,326 1,368 1,272 1,288 1,264 1,166 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 16: Net sales bridge Q3 2021 to Q3 2022
Higher prices in Pulp and Containerboard, lower in Wood Lower volumes Wood, Exit publication paper start up Obbola PM2 SEK SEK 5,077m +1% -6% -1% 5,007m +5% -1% Net sales Price/Mix Volume Currency Discontinuations Net sales Q3 2021 Q3 2022 16
Slide 17: EBITDA bridge Q3 2021 to Q3 2022
Higher prices in Pulp and Containerboard, Higher costs for wood Organizational build up lower in Wood raw material and CTMP and higher chemicals distribution costs 3,000 SEK 2,684m -1 -129 SEK -186 +190 -98 2,484m 2,500 +24 2,000 Lower volumes Wood, start up Obbola PM2 Lower energy costs 1,500 1,000
Slide 18: EBITDA bridge Jan-Sep 2021 to Jan-Sep 2022
Higher costs for wood Higher prices in all raw material and product areas chemicals Higher distribution costs 10,000 9,000 +2,518 -292 SEK -556 +348 -167 +59 8,213m 8,000 7,000 SEK 6,303m Lower energy 6,000 costs 5,000 4,000 3,000 EBITDA margin EBITDA margin + 30% 2,000 44.8% 51.6% 1,000 0 EBITDA Pr
Slide 19: Cash flow: Quarter and Jan-Sep
Quarter Jan - Sep SEKm Q3 2022 Q3 2021 2022 2021 EBITDA 2,484 2,684 8,213 6,303 Revaluation of biological assets and other non cash flow items -432 -457 -1,404 -1,139 Operating cash surplus 2,052 2,227 6,809 5,164 Change in working capital 269 61 -724 -630 Restructuring costs -5 -65 -38 -336 Current
Slide 20: Capital employed, net debt and equity
SEKm Sep 30, 2022 Dec 31, 2021 Forest assets 90,220 84,497 Working capital 3,548 2,823 Deferred tax relating to forest assets -17,942 -16,905 Other capital employed 21,770 20,392 Total capital employed 97,596 90,807 Net debt 8,281 7,752 Net debt/EBITDA 0.8x 0.9x Equity 89,315 83,055 Net debt/Equity
Slide 21: Pro forma EBITDA by segment with Renewable Energy
Forest Wood Pulp Containerboard Renewable Energy EBITDA EBITDA EBITDA EBITDA EBITDA Jan-Sep 2022 (SEKm) Jan-Sep 2022 (SEKm) Jan-Sep 2022 (SEKm) Jan-Sep 2022 (SEKm) Jan-Sep 2022 (SEKm) -61 -44 2,500 -65 2,500 -75 2,500 2,345 2,284 2,500 2,271 2,227 2,500 1,906 1,841 2,000 1,950 1,875 2,000 2,000 2,00
Slide 22: Summary
Summary Ulf Larsson, CEO WSCA
Slide 23: Strong project portfolio starting to contribute next year
Strong project portfolio starting to contribute during next year • Kraftliner expansion in Obbola • CTMP expansion at Ortviken • Bollsta sawmill • Biorefinery in Gothenburg High degree of self sufficiency in wood raw material, energy and logistics Well invested and structured asset base with competi
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