18 slides from Svenska Cellulosa Ab Sca Class A's investor presentation, Aug 26, 2020
Slide 1: Ulf Larsson, CEO, August 26, 2020
Ulf Larsson, CEO August 26, 2020
Slide 2: Intention to invest in CTMP and exit publication paper
1 Intention to invest in 300kt CTMP at Ortviken 2 Intention to exit publication paper • Negotiations initiated for closure of all three paper machines 2
Slide 3: Increased value from each tree; growing forest asset
Invest in integrated value chain: Increased • Grow Pulp value from • Grow Kraftliner each tree • Renewable energy new segment • Reduce exposure to Publication Paper Increase forest holdings: Growing forest asset • Increase growth and harvesting level • Acquire forest land • Optimize nature conse
Slide 4: Value creation roadmap and projects over time
Value Biorefinery optionality Acquisition of forest land Biofuel Östrand – further 2021 capacity increase Research and 2023 Exit publication development paper Pilot plant 2023 Grow CTMP pulp Additional 70k ha forest land in the 2022 Baltics Kraftliner expansion Joint ventur
Slide 5: Exit structurally declining publication paper market
LWC volume1 1,000 Exit structurally declining publication paper market • Low and decreasing profitability – now cash flow negative 900 800 700 Invest in increased CTMP pulp production 600 • Attractive CTMP offering 500 • Low CAPEX per tonne Month / Rolling LTM • Leading cost position 400 300 200
Slide 6: Overview: Ortviken publication paper closure
Overview Ortviken only remaining publication paper site in SCA Closure of all three paper machines expected within six months Subject to negotiations initiated with employee representatives Annual production capacity 775k tonnes • 500k tonnes LWC • 275k tonnes uncoated 6
Slide 7: CTMP Investment
CTMIP Investment Kristina Enander WSCA
Slide 8: Product properties and customer value
Product properties Strength Absorption capacity Porosity Bulk properties Bending rigidity Wet strength Stiffness Opacity Lower production cost Same product Lower production cost Increased shape per given level of Higher absorption thickness with less Customer at same stiffn
Slide 9: Profitable growth: end use segments
Profitable growth End use segments Expanding product offering • Increase capacity from 100kt to 300kt Printing & Packaging Writing • High share of growth with existing customers Sales to structurally growing product segments Special • Increased share of sales to tissue and packaging 300kt • CTMP imp
Slide 10: Investment rationale: low CAPEX per tonne
Investment rationale Cost curve SW CTMP producers Low CAPEX per tonne • CAPEX SEK 1.45bn • CAPEX SEK 5k per tonne • Utilize existing modern TMP asset Scale up profitable business CTMP today CTMP tomorrow Östrand • ~15% lower cash cost per tonne Ortviken • Top quartile in cost position Source: Pöyry
Slide 11: Financial Summary
Financial Summary WSCA
Slide 12: Closure effects: net sales, one-off costs, write-downs
Net sales (SEKbn) One-off closure costs, up to (SEKbn) -4.0 ~0.9 People affected Write-downs (SEKbn) ~800 ~1.1 of which Fixed assets ~750 Working capital ~350 12
Slide 13: Investment 2020-2023 and financial summary
Investment ’20-’23 (SEKbn) CTMP capacity (kt) EBITDA (SEKbn) Financial summary +1.45bn +200kt +0.3bn Capex of SEK ~1.45bn 1.45 300 Profitable growth • +SEK 0.3bn EBITDA • Secure current business Expected start-up beginning 2023 • CTMP production to stop at Östrand when new line up and running • Cost
Slide 14: Summary
Summary Ulf Larsson WSCA
Slide 15: Growing forest asset and capacity changes
+2-3% -5-10% +2-3% +2-3% Growing Forest asset Wood Publication Paper Pulp Kraftliner Harvesting own forest (k m3) Capacity (m m3) Capacity (kt) Capacity (kt) Capacity (kt) +1,100k m3 +200k m3 -1,810kt +880kt +340kt 1,400 1,140 5,400 2,200 2,300 1,810 2,100 Further 200 potential 4,300 4,300 865 1,000
Slide 16: Appendix
Appendix WSCA
Slide 17: NBSK vs CTMP
NBSK CTMP • Produced by cooking wood chips in white liquor • Produced by grinding wood chips in a refiner • Gives pulp with long, strong fibers • Gives shorter, stiffer fibers that provide absorption capacity, bulk and stiffness to paper products • Possible to bleach to full brightness with no yello
Slide 18: 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