Slide 1: Interim report presentation January-March 2023
Interim report presentation January-March 2023 Henrik Sjölund, CEO Anders Jernhall, CFO April 28th, 2023
Slide 2: Another strong quarter
Group Another strong quarter 28% operating margin Operating profit* Operating profit* SEKm SEKm 2 500 8 000 7 000 2 000 6 000 5 000 1 500 4 000 7 262 7 381 1 000 2 101 1 921 3 000 1 737 1 617 1 622 2 000 4 061 500 1 129 1 185 849 898 2 476 2 345 2 479 1 000 0 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3
Slide 3: SEK 1.8bn free cash flow in Q1
Group SEK 1.8bn free cash flow in Q1 Essentially debt free at end of quarter Capital employed SEKm Cash flow 8 000 7 000 6 000 5 000 4 000 3 000 2 000 % Debt/equity ratio 25 1 000 20 15 0 10 18 19 20 21 22 M12** 5 Dividend Capital expenditure* Acquisitions Buy-back of own shares 0 Cashflow before ca
Slide 4: Forest
Forest 1.3 million ha total land area 1.0 million ha productive forest land
Slide 5: Growing forests with increased biodiversity
Forest Growing forests with increased biodiversity m 3 growing stock Forest holdings Development of biodiversity solid over bark/ha 140 100 120 95 100 90 80 85 60 80 40 20 75 0 70 1948 1955 1965 1975 1988 1993 2000 2010 2020 2022 1970 1980 1990 2000 2010 2022 Sweden Europe Global average 5 Source: H
Slide 6: Competition for pulpwood intensifying
Forest Competition for pulpwood intensifying Solid demand for timber Purchase price Index (Holmen average) 160 150 1 Mm3 140 0.2 Mm3 130 120 110 3 Mm3 1.5-2 Mm3 7 Mm3 100 90 80 2 Mm3 70 2 Mm3 60 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Saw logs Pulpwood 6
Slide 7: Prices 30% higher than long term trend
Forest Prices 30% higher than long term trend Price SEK/m3sub 700 600 500 400 300 200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1-23 7
Slide 8: 15% higher forest earnings vs Q1 2022
Forest 15% higher forest earnings vs Q1 2022 SEKm SEKm 600 1 600 1 400 500 1 200 400 1 000 300 800 1 495 1 448 513 1 367 1 401 600 1 185 1 172 200 402 364 349 346 351 296 323 305 400 100 200 0 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 18 19 20 21 22 M12** Operating profit Operating pro
Slide 9: Paperboard
Paperboard 550 000 tonnes per year
Slide 10: Slowing demand but stable prices
Paperboard Slowing demand but stable prices European SBB and FBB demand Prices kton Index 3 500 250 3 250 200 3 000 150 2 750 100 2 500 50 2 250 M12* 0 2014 2016 2017 2018 2019 2020 2021 2015 2022 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 FBB Pulp *Q2-22 – Q1-23. 10 Source: RISI, FOEX and CE
Slide 11: Grow our board business step-by-step
Paperboard Grow our board business step-by-step Backed by strong market, wood & energy position 11
Slide 12: Price increases in line with cost inflation
Paperboard Price increases in line with cost inflation Benefitting from electricity sales SEKm % SEKm % 500 50 1 200 25 1 000 400 40 20 800 300 30 15 600 1 081 1 124 200 400 20 10 400 812 281 299 689 673 256 274 236 100 10 435 5 152 200 112 44 0 0 0 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22
Slide 13: Paper
Paper 1 million tonnes per year
Slide 14: Pressure on prices
Paper Pressure on prices Paper prices Printing paper demand WE EUR/ton kton 1200 16 000 14 000 1000 12 000 800 10 000 8 000 600 6 000 4 000 400 2 000 200 0 13 14 15 16 17 18 19 20 21 22 M12* Uncoated magazine Coated magazine Newsprint Uncoated magazine & book Coated magazine Newsprint *March 2022 -
Slide 15: Challenging raw material situation
Paper Challenging raw material situation Recycled fibre prices Uncoated publication paper capacity (WE) EUR/ton 350 Germany Sweden 300 Norway 250 Finland Austria 200 Belgium 150 UK Switzerland 100 France 50 Netherlands Spain thousands tons 0 18 19 20 21 22 23 0 500 1 000 1 500 2 000 2 500 3 000 Old
Slide 16: Investing to develop Braviken mill further
Paper Investing to develop Braviken mill further Improving book position and growing fluting business 16
Slide 17: Strong pricing and low electricity bill
Paper Strong pricing and low electricity bill SEKm % SEKm % 1 000 50 3 500 175 3 000 150 800 40 2 500 125 600 30 2 000 100 400 832 836 20 767 716 1 500 3 151 75 2 714 200 399 10 1 000 50 16 100 0 0 500 25 -37 -9 329 509 73 70 -200 -10 0 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 18 19 2
Slide 18: Wood Products
Wood Products 1.5 million m3 per year
Slide 19: Wood product prices stabilising
Wood Products Wood product prices stabilising Export price index Sweden US futures price Index (1 month lag) Index (1 month forward) 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 Source: Swedish Forest Indu
Slide 20: Buildings accounts for 38% of global emissions
Wood Products Buildings accounts for 38% of global emissions Concrete & steel are energy intensive & large emitters Global energy-related CO2 emissions (2020) Other 6% Transport Building 23% 38% Sector 8.7 Gt 23% 10% Other Industry Other Construction Industry 20 Source: GABC 2021 Report
Slide 21: Wood an alternative to concrete & steel
Wood Products Wood an alternative to concrete & steel Price of wood & steel tracks concrete over time EU28 construction materials* Index consumed in 2020 (million tonnes) 400 Copper Aluminium 350 Flat Glass 300 Gypsum 250 Timber 200 Steel Limestone 150 Cement 100 Structural clay 50 2009 2010 2011 20
Slide 22: Prices stabilising at historically high levels
Wood Products Prices stabilising at historically high levels Lumber costs 20% higher than before the boom SEKm % MSEK % 600 60 2 000 100 500 50 1 500 75 400 40 300 582 598 30 518 529 1 000 50 200 20 1 668 350 100 218 10 1 237 177 500 25 23 731 0 0 -67 62 246 185 -100 -10 0 0 Q1-21 Q2-21 Q3-21 Q4-21
Slide 23: Renewable Energy
Renewable Energy 1.8 TWh per year
Slide 24: Energy still a scarce resource in Europe
Renewable Energy Energy still a scarce resource in Europe Energy prices EUR/MWh 600 500 400 300 200 100 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 South Sweden (SE3) North Sweden (SE2) Germany Gas power 24 Source: Macrobond
Slide 25: Another strong quarter
Renewable Energy Another strong quarter Market prices in northern Sweden averaged 600 SEK/MWh SEKm % SEKm % 500 125 1 250 30 400 100 1 000 20 300 75 750 463 1 120 200 50 500 1 006 10 282 100 214 25 250 168 162 336 347 107 112 66 181 215 62 0 0 0 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-2
Slide 26: Hydro flexibility pays off
Renewable Energy Hydro flexibility pays off Revenue* SEK/MWh 600 500 400 300 200 100 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 26 *Support services, timing and guarantees of origin.
Slide 27: We grow houses
We grow houses Leftovers are converted into renewable packaging and paper We harvest the energy that blows and runs through our forests 1.3 Carbon sequestration 7.2 Million tonnes CO2e + 4.7 Storage and substitution from Million Million tonnes tonnes CO2e wood products (3.1), paperboard CO2e in 2022
Slide 28: Growing a sustainable future
Growing a sustainable future
Slide 29: holmen.com
HOLMEN holmen.com