Billerud Ab · OMXSTO:BILL
Billerud Ab — Q1 2020 Earnings Presentation
18 slides from Billerud Ab's earnings presentation, Apr 24, 2020
Slide 1: Record sales volumes and continued price pressure Q1
Interim report January–March 2020 Q1 Record sales volumes and continued price pressure 2020 24th of April 2020 Lennart Holm, CEO, Ivar Vatne, CFO WHAT IF paper packaging is the solution? 1
Slide 2: Key highlights Q1
Key highlights Q1 Stable production and solid demand Record sales volume, up by 9% compared to last year -2% NET SALES GROWTH Y/Y Limited financial effects of Covid-19 so far Earnings heavily impacted by continued lower market prices 12% EBITDA MARGIN* Ramp-up effects of KM7 of SEK 200 million Start
Slide 3: Covid-19 effects so far
Covid-19 effects so far No major disruptions and limited financial effects Situation monitored on a daily basis, crisis management in six work streams Additional cost savings measures have been initiated Division Solution sales affected in Q1 and will weaken further First half year planned maintenan
Slide 4: Market perspective and context
Market perspective and context Solid demand in Q1 Strong market conditions for liquid packaging board Stable market conditions for cartonboard and containerboard Market for sack and kraft paper stabilized at low price levels Expectations for Q2 High uncertainty of Covid-19 impact Stable market condi
Slide 5: Ramping up KM7 production
Ramping up KM7 production Coater start-up and certification of LPB initiated Solid volume output centered around uncoated liner, challenges around quality gradually overcome Continued uncertainty connected to the ramp-up and product mix Negative EBITDA impact for Q1 SEK 200 million Expected negative
Slide 6: Safe and stable production
Safe and stable production Excellent production and record volumes Quarterly sales volumes, ktonnes Actions to increase production stability 750 741 starting to show result Declining LTIFR trend over the past ten months 700 LTIFR for last twelve months decreased by 40% 650 600 2013 2014 2015 2016 20
Slide 7: Cost and efficiency program on track
Cost and efficiency program on track Positive impact in Q1’20 of SEK 50 million On track to deliver SEK 250 m of cost savings and efficiencies in 2020 Expect a bit back-heavy delivery during 2020 Work in progress to identify additional building-blocks to deliver SEK 600 million run-rate by Q4’21
Slide 8: Raw material costs
Raw material costs Cost of pulpwood decreased in Q1 Wood Cost Index (WCI*), rolling 12 months Expected to remain flat in Q2 but 170 uncertain (Covid-19) 160 Caustic soda price decreased in Q1 Forward looking trend for chemicals 150 uncertain (Covid-19) 140 Pulp pricing impact (purchased) 130 signifi
Slide 9: Key financial figures
Key financial figures Q1 Q1 Change Q4 Change SEK m 2020 2019 vs Q1-19 2019 vs Q4-19 Net sales 6 364 6 504 -2% 5 815 9% Adjusted EBITDA 791 1 035 -24% 618 28% Adjusted EBITDA margin 12% 16% 11% Adjusted operating profit 305 653 -53% 127 172% Adjusted operating profit margin 5% 10% 2% Net profit 164 4
Slide 10: Volume/mix growth and benefit from currency rates offset by lower market prices
Volume/mix growth and benefit from currency rates offset by lower market prices Net sales, SEKm 0% -2,5% -2% +5% -7% +2,5% 10
Slide 11: Adjusted EBITDA impacted by pricing and KM7 ramp-up, partly offset by lower fibre costs, volume and cost savings
Adjusted EBITDA impacted by pricing and KM7 ramp-up, partly offset by lower fibre costs, volume and cost savings Adj EBITDA, SEKm -4% Adj EBITDA 16% 16% 12% margin 11
Slide 12: Division Board
TITLE OF PRESENTATION 12 Division Board Share of net sales KEY FIGURES* Q1 2020 58% Change vs SEKm Q1-20 Q1-19 Net sales 3 712 +5% of which liquid packaging board 2 060 +4% of which cartonboard 399 +15% of which fluting & liner 1 017 +7% Net operating expenses, other -3 134 +10% EBITDA 578 -15% EBIT
Slide 13: Division Paper
TITLE OF PRESENTATION 13 Division Paper Share of net sales KEY FIGURES* Q1 2020 30% Change vs SEKm Q1-20 Q1-19 Net sales 1 880 -18% of which sack paper 633 -32% of which kraft paper 878 -6% Net operating expenses, other -1 617 -12% EBITDA 263 -43% EBITDA, % 14% -6% pts Another quarter with negative
Slide 14: Division Solutions
TITLE OF PRESENTATION 14 Division Solutions Share of net sales KEY FIGURES* Q1 2020 3% Change SEKm Q1-20 vs Q1-19 Net sales 205 0% of which Managed Packaging 147 -16% of which other solutions 58 +81% Net operating expenses, other -195 +1% EBITDA 10 -23% EBITDA, % 5% -1% pts Net sales decline by 3% L
Slide 15: Strong balance sheet and entering a phase with lower CAPEX levels
Strong balance sheet and entering a phase with lower CAPEX levels Net debt SEK 5 951 billion at 31 March Net debt / EBITDA ratio** 3,9 Net debt EBITDA ratio 2.3 – below target Limited debt maturity over the coming 2 years 2,9 2,7 2,4 2,3 Target: <2.5x CAPEX for 2020 guidance lowered by 2,2 2,2 SEK 2
Slide 16: Summary
Summary Sales volume growth and production excellence EBITDA impacted by continued lower prices and KM7 ramp-up impact Limited financial effects of Covid-19 so far, but increased uncertainty Strong financial position and precautionary measures taken 16
Slide 17: Q2 Outlook
Q2 Outlook Stable market conditions expected for products in Food & Bevereges and Medical & Hygiene Market conditions for Consumer & Luxury Goods could become more challenging Weaker market conditions expected for the Industrial segment Fibre costs expected to remain flat from Q1 Logistical challeng
Slide 18: WHAT IF oceans were full of plankton?
WHAT IF oceans were full of plankton? WHAT IF packaging could push new boundaries? Not plastics. 18