Slide 1: Year-end report presentation 2023
Year-end report presentation 2023 Henrik Sjölund, CEO Anders Jernhall, CFO January 31st, 2024
Slide 2: Maintenance stop and soft markets burden Q4
Group Maintenance stop and soft markets burden Q4 SEKm 600 from forest & energy Operating profit* Operating profit* SEKm SEKm 8 000 2 500 7 000 2 000 6 000 5 000 1 500 4 000 7 262 1 000 2 101 1 921 3 000 1 617 1 622 1 737 4 755 1 185 1 138 1 166 2 000 4 061 500 714 2 476 2 345 2 479 1 000 0 0 Q4-21
Slide 3: Proposes dividend of SEK 8.5 + 3.0
Group Proposes dividend of SEK 8.5 + 3.0 SEK 1.8 bn The share SEK 40 35 30 25 20 35.0 15 8.0 23.0 10 20.2 4.0 3.0 3.5 13.9 12.2 5 9.9 10.8 6.75 7.25 7.5 8.0 8.5 6.5 3.5 0 17 18 19 20 21 22 23 Earnings* Dividend Extra dividend 3 *Excl. items affecting comparability.
Slide 4: Net debt below SEK 2 bn at YE 2023
Group Net debt below SEK 2 bn at YE 2023 Distributed SEK 3.7 bn via dividends & share-buy back in 2023 Capital employed SEKm Cash flow 8 000 7 000 6 000 5 000 4 000 3 000 % Debt/equity ratio 2 000 25 20 1 000 15 0 10 18 19 20 21 22 23 5 Dividend Buy-back of own shares 0 Capital expenditure* Acquisit
Slide 5: Forest
Forest 1.3 million ha total land area 1.0 million ha productive forest land
Slide 6: Scarcity of pulpwood & timber in the Nordics
Forest Scarcity of pulpwood & timber in the Nordics Wood cost at mill gate Index (Holmen average) 190 180 1 Mm3 170 160 0.2 Mm3 150 140 130 3 Mm3 120 7 Mm3 110 100 90 2 Mm3 80 70 2 Mm3 60 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Saw logs Pulpwood 6
Slide 7: Still good mark-up on wood for pulp
Forest Still good mark-up on wood for pulp Normal relationship between sawn wood & net log cost Sales price sawn wood less Sales price pulp less Index Index net log cost per m3 sawn wood wood cost per tonne of pulp 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 7
Slide 8: Wood prices have risen more than inflation
8 200 300 400 500 600 700 Forest 2001 SEK/m 3sub 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Nominal price 2015 2016 2017 2018 2019 2020 2021 2022 2023 200 300 400 500 600 700 2001 SEK/m 3sub 2002 2003 2004 2005 2006 Real price increase ~1.5% p.a. last 20 years 2007 2008 2009 20
Slide 9: Price increases translating into higher profits
Forest Price increases translating into higher profits No forest property sales in 2023 SEKm SEKm 600 1 600 1 400 500 1 200 400 1 000 300 800 1 495 1 523 513 1 367 1 401 600 1 185 1 172 200 402 390 397 384 349 346 351 305 400 100 200 0 0 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 18 19 20
Slide 10: Forest value +8% to SEK 56 bn
Forest Forest value +8% to SEK 56 bn Based on last 3 years transactions Holmen's forest value SEKbn 60 50 40 30 20 10 0 Dec 31 2019 Dec 31 2020 Dec 31 2021 Dec 31 2022 Dec 31 2023 Northern Sweden Central Sweden Southern Sweden 10 Holmen forest holdings
Slide 11: 2023 statistics is above our 3 year average
Forest 2023 statistics is above our 3 year average SEK/m3 600 500 400 300 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 1 year transactions 3 years transactions 11
Slide 12: Real yield on transactions stable last 15 years
Forest Real yield on transactions stable last 15 years Increasing wood prices give support to higher transaction prices % 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Real yield forest transactions Nominal yield 10 year gover
Slide 13: Renewable Energy
Renewable Energy 1.8 TWh per year
Slide 14: Permits for 40% growth in renewables
Renewable Energy Permits for 40% growth in renewables Blisterliden & Stormyrberget for investment decision 2024 & 2025 14
Slide 15: Supporting build-out of new green industry
Renewable Energy Supporting build-out of new green industry TWh per year Planned electricity consumption from new green industry in northern Sweden 90 80 70 60 50 40 30 20 10 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 15
Slide 16: Weather & low production pushed up nordic power prices in Q4
Renewable Energy Weather & low production pushed up nordic power prices in Q4 Energy prices EUR/MWh 250 200 150 100 50 0 2019 2020 2021 2022 2023 South Sweden (SE3) North Sweden (SE2) Germany 16 Source: Macrobond
Slide 17: High hydro production at good prices
Renewable Energy High hydro production at good prices SEKm % SEKm % 500 125 1 250 30 400 100 1 000 20 300 75 750 463 200 50 500 1 006 10 282 697 100 214 213 25 250 168 162 135 336 347 112 68 181 215 0 0 0 0 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 18 19 20 21 22 23 Operating profit* Ret
Slide 18: Hydro flexibility pays off
Renewable Energy Hydro flexibility pays off Support services, timing SEK/MWh and Gurantees of Origin 600 500 400 300 200 100 0 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 18
Slide 19: Wood Products
Wood Products 1.5 million m3 per year
Slide 20: Wooden frames gain market share
Wood Products Wooden frames gain market share Sweden Sweden % 100 90 Public 80 buildings Multi Family 70 buildings 60 79 88 50 Commercial 40 30 20 10 21 12 Industry & 0 storage Share 2018 Share 2022 Wood Concrete & steel 20 Source: Prognoscentret
Slide 21: Weak construction cycle lead to price erosion
Wood Products Weak construction cycle lead to price erosion Index 330 280 230 180 130 80 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Export price 'World Price' (FX-basket) Export price Sawn softwood (SEK) 21 Source: Swedish Forest Industries
Slide 22: Price erosion impacting Q4
Wood Products Price erosion impacting Q4 Investment downtime SEKm 30 SEKm % SEKm % 600 60 2 000 100 500 50 1 500 75 400 40 1 000 50 300 598 30 529 1 668 200 20 1 237 350 500 25 100 177 10 246 62 185 6 23 0 0 55 19 0 0 -67 -89 -100 -10 -500 -25 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 18
Slide 23: Board & Paper
Board & Paper 1 500 000 tonnes per year
Slide 24: Merging our process industry into one BA
Merging our process industry into one BA Consumer board, transport packaging, books & magazines • Organising into four well-defined BAs – Forestry, hydro- & wind power, woodworking and process industry • Gather competence & expertice • Improve efficiency & competitiveness
Slide 25: Slow consumer board market in Q4
Paperboard Slow consumer board market in Q4 Prices hold up fairly well European SBB and FBB demand Prices kton Index 3 500 160 140 3 250 120 100 3 000 80 2 750 60 40 2 500 20 2 250 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 FBB Pulp NBSK* *A
Slide 26: Paper prices still under pressure
Paper Paper prices still under pressure Low utilisation rates give poor fixed cost absorbation Printing paper demand WE Prices kton Index 16 000 200 180 14 000 160 12 000 140 10 000 120 100 8 000 80 6 000 60 4 000 40 20 2 000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 13 14 15 16 17 18 19
Slide 27: Weak board market impact profitability
Paperboard Weak board market impact profitability SEKm 180 from maintenance stop SEKm % SEKm % 500 50 1 200 25 400 40 1 000 20 300 30 800 200 400 15 281 274 299 256 100 111 20 600 152 1 081 10 0 -49 10 400 812 -169 689 673 -100 435 5 0 200 -200 192 -300 -10 0 0 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2
Slide 28: Paper profits still at a high level
Paper Paper profits still at a high level Good deliveries but prices eroding & energy costs increased SEKm % SEKm % 1 000 50 3 500 175 3 000 150 800 40 2 500 125 600 30 2 000 100 400 832 836 20 767 716 659 613 1 500 75 2 714 429 2 538 200 399 10 1 000 50 0 0 500 25 -9 329 509 73 70 -200 -10 0 0 Q4-2
Slide 29: Growing a sustainable future
Growing a sustainable future
Slide 30: Growing forests with increased biodiversity
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 2023 1970 1980 1990 2000 2010 2023 Sweden Europe Global average 30 Source: Holmen
Slide 31: 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 1.6 7.5 Million tonnes Carbon sequestration CO2e + 4.6 Storage and substitution from Million Million tonnes tonnes CO2e wood products (3.1), paperboard CO2e in 2023
Slide 32: holmen.com
HOLMEN holmen.com