Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — SEB Nordic Seminar 2015
35 slides from Billerud Ab's conference presentation, January 2015
Slide 1: SEB Nordic Seminar | January 2015
WE PACKAGING FOR A SEB Nordic Seminar | January 2015 Susanne Lithander, CFO and Karin Slättborn Ass. IR Manager 1
Slide 2: Primary fibre-based packaging materials
PRIMARY FIBRE-BASED PACKAGING MATERIALS High performance packaging materials Target customer segments requiring strong, light and/or pure packaging Smarter solutions Focus on value added to customers rather than price 75% of sales going to consumer sectors Food & Beverages is largest market segment
Slide 3: BillerudKorsnäs in figures
BILLERUDKORSNÄS IN FIGURES NET SALES 2013 20 CONTAINER Q1-Q3 2014 BOARD 15,7 16% PACKAGING PAPER 74% 14% Billion SEK 37% 3% OPERATING PROFIT CONSUMER BOARD 5% 2013 36% 2% 1.1 OTHER 11% Q1-Q3 2014 1.4 SHARE OF SALES SHARE OF SALES Billion SEK Beetham Frövi/Rockhammar 4 300 NUMBER OF EMPLOYEES 8 PRODU
Slide 4: Mega trends in our favor
MEGA TRENDS IN OUR FAVOR DEMOGRAPHIC SHIFTS AND A CHANGING WORLD MAP SUSTAINABILITY CONNECTING SEVERAL SUBTRENDS CONSUMER BEHAVIOUR IS CHANGING 4
Slide 5: The packaging market in our favor
THE PACKAGING MARKET IN OUR FAVOR Global packaging market USD bn 1 200 CAGR (13-18e: 4,1 %) 1 000 800 600 400 200 0 2008 2009 2010 2011 2012 2013 2018e 5 Source: Smithers Pira 2013
Slide 6: We look beyond traditional markets
WE LOOK BEYOND TRADITIONAL MARKETS SMARTER PACKAGING SOLUTIONS 6
Slide 7: We have realized a successful integration
WE HAVE REALIZED A SUCCESSFUL INTEGRATION 2006 2009 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 7
Slide 8: BillerudKorsnäs - a strong platform for growth
BILLERUDKORSNÄS - A STRONG PLATFORM FOR GROWTH BUSINESS CONSUMER AREAS SALES 3 SHARE 75% STRONG 2 60% AND STABLE PLATFORM FOR PULP RELATIVE = GROWTH 530 MSEK MARKET 300 CURRENCY 65% in yearly synergy savings. EXPOSURE 150 EXPOSURE 30% Targets reached way Kton share of sales ahead of plan. 150 30% 30
Slide 9: Our business model
BILLERUDKORSNAS OUR BUSINESS MODEL TRADITIONAL COMPETITION Souyno® AAS SERVICE?
Slide 10: Our business model in the value chain
OUR BUSINESS MODEL IN THE VALUE CHAIN GLOBAL NETWORK SOLUTION SERVICES MATERIALS OUR PRODUCTION OUR CUSTOMERS UNITS 10
Slide 11: Our strategic stepstones
e eee) wy “ BILLERUDKORSNAS OUR STRATEGIC STEPSTONES WE CHALLENGE CONVENTIONAL PACKAGING FOR A SUSTAINABLE FUTURE PROFITABLE GROWTH POSITION INNOVATION SUSTAINABILITY EFFICIENCY Expand geographically Increase industry lead. Drive throughout Improve continuously. and in value chain. value chain. 8 33
Slide 12: We have an ambitious growth agenda
WE HAVE AN AMBITIOUS GROWTH AGENDA GOAL 2018 TURNOVER: ~24 BSEK ORGANIC GROWTH: 15 – 20 %* 12 * Base year 2013
Slide 13: We are investing
WE ARE INVESTING SUPPORTING OUR GROWTH AMBITIONS BOARD MACHINE (FRÖVI) To be largest of its kind in the world 450 kton 550 kton 2017 FLUTING MACHINE (GRUVÖN) To strengthen leading position + 40 kton 2016 SACK PAPER MACHINE (SKÄRBLACKA) To increase volume and improve quality + 20 kton 2016 ENVIRONM
Slide 14: Our four strategic pillars
OUR FOUR STRATEGIC PILLARS HOW TO ACHIEVE OUR GROWTH AMBITIONS POSITION INNOVATION SUSTAINABILITY EFFICIENCY Expand geographically Increase Drive throughout Improve and in value chain. industry lead. value chain. continuously. INVESTMENTS GREENER MATERIAL TECHNOLOGY + OPERATIONAL BUSINESS MODEL INNO
Slide 15: Three business areas
THREE BUSINESS AREAS PACKAGING PAPER CONSUMER BOARD CONTAINERBOARD Kraft paper Liquid packaging board Fluting Sack paper Carton board Liner Cup stock NET SALES 7 900 7 327 3 095 MSEK EBIT MSEK 609 758 394 SALES VOLUME 1 155 1 000 520 KTON 15 Numbers for 2013 Q4 – 2014 Q3
Slide 16: Achieving 15-20% organic growth by 2018
ACHIEVING 15-20%* ORGANIC GROWTH BY 2018 BA market CAGR PACKAGING PAPER SELECTIVE GROWTH Target growth in selected 0 - 4% CAGR segments, balancing additional capacity CONSUMER BOARD VOLUME GROWTH 4 - 5% CAGR Increase volume in key markets CONTAINERBOARD VALUE GROWTH 2 - 4% CAGR Increase margins on e
Slide 17: Financial targets and target fulfillment
FINANCIAL TARGETS AND TARGET FULFILLMENT AFTER THIRD QUARTER 2014 OPERATING RETURN ON CAPITAL MARGIN > 10%* EMPLOYED > 13%* 10% 9% NET DEBT/EQUITY RATIO < 0.9 DIVIDEND POLICY: ✔ 50% OF NET PROFIT* 0.73 69% FOR 2013 17 * Over a business cycle
Slide 18: Summary
SUMMARY Global trends (sustainability, demographic shifts, digitalization and changed consumer behavior) imply major growth opportunities We have a strong and stable platform on a growing market Synergy targets are reached ahead of plan Major investments have been done and will continue Our four pil
Slide 19: Q&A
BILLERUDKORSNAS Q&A
Slide 20: pil eo
pil eo BILLERUDKORSNAS
Slide 21: Appendix
BILLERUDKORSNAS APPENDIX 21
Slide 22: The packaging materials company
THE PACKAGING MATERIALS COMPANY Stora Enso Holmen BillerudKorsnäs UPM Mondi Packaging Pulp Publication & Writing 22
Slide 23: Synergy targets are reached way ahead of plan
SYNERGY TARGETS ARE REACHED WAY AHEAD OF PLAN THE INITIAL PLAN WAS TO REACH TARGETS BY 2015 MSEK 23
Slide 24: Increased stability by significantly reduced market pulp and relative currency exposure
INCREASED STABILITY BY SIGNIFICANTLY REDUCED MARKET PULP AND RELATIVE CURRENCY EXPOSURE 20% 18% 16% 14% EBITDA margin 12% 10% 8% 6% 4% 2% 0% Former Billerud BillerudKorsnäs Former Billerud BillerudKorsnäs CURRENCY EXPOSURE CURRENCY & PULP EXPOSURE 24
Slide 25: Key highlights Q3 2014 interim report
KEY HIGHLIGHTS Q3 2014 INTERIM REPORT NET SALES 5 191 MSEK ADJUSTED OPERATING PROFIT +40% YOY MSEK NET SALES MSEK ADJ. OP PROFIT 18 000 5% 1 800 16 000 15 729 1 600 14 934 40% 1 540 14 000 1 400 12 000 1 200 10 000 1 000 1 099 8 000 800 9% 54% 6 000 1% 600 11% 5 191 518 4 000 4 748 5 128 400 467 337
Slide 26: Key highlights Q3 2014 interim report
KEY HIGHLIGHTS Q3 2014 INTERIM REPORT CASH FLOW 494 MSEK. ROCE 9%. NET DEBT/EQUITY 0.73 MSEK OP. CASH FLOW % ROCE NET DEBT/EQUITY 1 400 10 0,90 1 200 1 312 0,87 9 8 0,79 1 000 0,73 0,60 6 800 6 600 4 0,30 400 494 381 2 200 0 0 0,00 0 Jan-Sep Jan-Sep Jan-Sep Q2 14 Jan-Sep 13 14 13 14 26 All 2013 comp
Slide 27: Stated dividend policy
OUR COMMITMENT TO LONG-TERM SHAREHOLDER VALUE FULFILMENT FOCUS AREAS STATED DIVIDEND POLICY Restore margins SHORT-TERM Pay down debt MID-TERM Achieve profitable growth LONG-TERM Achieve ROCE >13% 27
Slide 28: Cash-flow generative business
CASH-FLOW GENERATIVE BUSINESS CASH-FLOW FROM OPERATING ACTIVITIES 2 500 2 000 1 500 MSEK 1 000 500 0 2011 2012 2013 28 Note: FY 2011 and 2012 figures are proforma.
Slide 29: Supporting the dividend…
SUPPORTING THE DIVIDEND… DIVIDEND POLICY TO PAY 50% OF NET PROFIT OVER A BUSINESS CYCLE 80% 70% Dividend payout ratio 60% 50% Target 40% 30% 20% 10% 0% 2009 2010 2011 2012 2013 5 year average 29
Slide 30: FX exposure
FX EXPOSURE FX EXPOSURE, FX RATES, REVALUATIONS FX Exposure (in MSEK) BK uses Swedish Riksbank’s FIXING rate (Month End) 7 000 During month Sales, AP, AR etc: End of month rate previous month 5 000 AP and AR: revalued to at end of month using End of 3 000 month rate. − Revaluation of AR booked in ”C
Slide 31: Maturity profile Sep 2014
Debt maturity profile (SEKm) Funding Syndicated credit facilities Maturity profile Sep 2014 SEK 5,500m RCF maturing June, 2019 6 000 200 Bilateral credit agreements SEK 800m term loan facility maturing June, 2015 5 000 Two SEK 600m term loan facilities with separate lenders maturing June , 2017 4 00
Slide 32: BillerudKorsnäs capex 2008-2014
BILLERUDKORSNÄS CAPEX 2008-20141 CAPEX DEPRECIATION/AMORTISATION OF PPE SEKm SEKm 2 000 2 000 Guided SEK1,550m 1 500 1 500 1 000 1 000 500 500 0 2008 2009 2010 2011 2012 2013 2014 0 Billerud Korsnäs 2008 2009 2010 2011 2012 2013 2014 BillerudKorsnäs Skärblacka investment CAPEX varies, but in line wi
Slide 33: Cost structure
COST STRUCTURE No significant forest assets Wood raw materials, 34% Purchases made from handful Personnel, 16% of major suppliers Freight to customers, 10% Bergvik Skog, Holmen, Chemicals, 9% Mellanskog, Stora Enso and Depreciation, 7% Sveaskog Energy , 6% Large amount of private land Purchased serv
Slide 34: Ownership structure
OWNERSHIP STRUCTURE Shareholder Number of shares Percent of votes FRAPAG Beteiligungsholding AG 31 300 000 15.1 AMF Insurance & Funds 17 879 190 8.6 Swedbank Robur funds 12 581 643 6.1 Nordea funds 11 156 327 5.4 Fourth Swedish National Pension Fund 8 392 368 4.1 Lannebo Funds 8 252 855 4.0 Alecta 7
Slide 35: pil eo
pil eo BILLERUDKORSNAS