Arctic Paper S.a. · GPW:ATC
Arctic Paper — Q4 2022 Earnings Presentation
32 slides from Arctic Paper's earnings presentation, Feb 21, 2023
Slide 1: Financial Results Preliminary Q4 2022
Q4 21/02/2022 FINANCIAL RESULTS PRELIMINARY Q4 2022
Slide 2: Disclaimer
DISCLAIMER Please read the information below carefully This presentation (the ‘Presentation’) the regulated market, in particular the appearance of unexpected facts or is no certainty that the estimates, was prepared by Arctic Paper SA (the regulated market operated by the W arsaw circumstances whic
Slide 3: Agenda
PRESENTERS: AGENDA Michał Jarczyński / CEO Arctic Paper Göran Eklund / CFO Arctic Paper Summary preliminary Q4 2022 Paper Packaging Financial performance Pulp Power Focus 3 Q4 2022 arcticpapergroup.com
Slide 4: Summary Preliminary Q4 2022
SUMMARY PRELIMINARY Q4 2022 Arctic Paper Group Q4 2022 vs. Q4 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 1 085.1 953.5 140.0 69.2 126.0 133.0 34.4% 14.7% (Q4 2022) (Q4 2021) (Q4 2022) (Q4 2021) (Q4 2022) (Q4 2021) (Q4 2022) (Q4 2021) Paper/Pulp EBITDA Net debt/EBITDA* Paper
Slide 5: Summary Preliminary YTD Dec 2022
SUMMARY PRELIMINARY YTD DEC 2022 Arctic Paper Group YTD DEC 2022 vs. YTD DEC 2021 Net sales EBITDA Operating CF ROCE* (PLN mn) (PLN mn) (PLN mn) 4 894.3 3 412.6 974.0 327.8 607.4 238.2 34.4% 14.7% (YTD DEC (YTD DEC (YTD DEC (YTD DEC (YTD DEC (YTD DEC (YTD DEC (YTD DEC 2022) 2021) 2022) 2021) 2022) 2
Slide 6: Paper Q4 2022
PAPER 6 Q4 2022 arcticpapergroup.com
Slide 7: Market Data: Fine Paper Prices
GRAPHIC FINE PAPER PRICES – GERMAN MARKET MARKET DATA Fine paper average market prices 1400 1300 1200 DEC 2022 COMPARED TO SEP 2022 1100 UWF average price change +0,1% 1000 CWF average price change +0,0% 900 800 DEC 2022 COMPARED TO DEC 2021 700 UWF average price change +37% 600 CWF average price ch
Slide 8: Operating Data: Capacity and Paper Sales Volume
PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS OPERATING DATA 96% 92% 99% 99% 90% 85% 69% Average Q4 2022 use of production capacity: 85% 11% LESS THAN IN Q3 2022 14% LESS THAN IN Q4 2021 Q4 2022 total sales volume: 117k tons PAPER SALES VOLUME 31% LESS THAN IN Q3 2022 30% LESS THAN IN Q4 2021 171 161 1
Slide 9: Operating Data: Paper Sales Revenue
PAPER SALES REVENUE (PLN mn) OPERATING DATA 949 770 770 689 689 532 507 527 Total revenue Q4 2022 (PLN 770mn) 404 INCREASED BY 12% COMPARED TO Q4 2021 Average price Q4 2022 (PLN 6.57k) INCREASED BY 60% COMPARED TO AVERAGE IN Q4 2021 PAPER SALES REVENUE PER TONNE (PLN k)* 6,57 5,74 4,11 3,54 3,53 3,5
Slide 10: Products
PRODUCTS ADVANCED OFFSET MOST COMPLETE MATT BIGGEST UNCOATED PRODUCTION COATED PAPER ASSORTMENT DESIGN BRAND IN HEART OF EUROPE • Top 3 brands in revenue share • No 1 in European High Quality Bookpaper Sales • No 1 in European Design Paper Sales NOVEL PRODUCTS Arctic Paper develops its packaging lin
Slide 11: Geographical Split of Sales
PRODUCTS GEOGRAPHICAL SPLIT OF SALES Outside Europe 2% Germany Poland UK & IE Austria & CE France Baltics Rest of Europe 20% 17% 11% 11% 9% 5% 11% The Nordics Benelux 9% 5% 11 Q4 2022 / PAPER arcticpapergroup.com
Slide 12: Client Structure
CLIENT STRUCTURE Market segments/products portfolio/target groups Printing Houses Clients who purchase the Group’s paper products directly. Advertising Industry Wholesalers Predominantly indirect customers, who use our Direct customers who purchase, stock and distribute products, i.e., Deutsche Bank
Slide 13: Pulp Q4 2022
PULP 13 Q4 2022 arcticpapergroup.com
Slide 14: Market Data: Pulp PIX Indexes Europe
PULP PIX INDEXES EUROPE MARKET DATA 1 498 Pulp – European pulp prices 1 430 1 429 1 340 1 342 1 300 1 260 1 380 1 380 1 308 AVERAGE PRICE Q4 2022 COMPARED TO Q4 2021 1 030 1 177 1 140 1 140 1 099 NBSK (long fiber): 12% higher 859 879 820 840 840 BHKP (short fiber): 21% higher 865 680 680 680 680 680
Slide 15: Operating Data: Pulp Production and Deliveries
PULP PRODUCTION (1,000 TONNE) OPERATING DATA Pulp production & deliveries 109 110 109 111 103 103 98 95 96 92 91 91 87 87 Q4 2022 total production: 87k tons 9% LOWER THAN IN Q3 2022 4% LOWER THAN IN Q4 2021 PULP DELIVERIES (1,000 TONNE) Q4 2022 total deliveries: 87k tons 9% LOWER THAN IN Q3 2022 110
Slide 16: Operating Data: Pulp Revenue and Prices
PULP SALES REVENUE (SEK mn) OPERATING DATA Revenue and prices 784 730 730 593 598 598 510 490 Total revenue Q4 2022 (SEK 730mn) INCREASED BY 22% COMPARED TO Q4 2021 PULP SALES REVENUE PER TONNE (SEK) Average price in Q4 2022 (SEK 8.4k per tonne) INCREASED BY 35% COMPARED TO Q4 2021 8 439 7 404 6 259
Slide 17: Pulp – Replacement Material for Plastic
PULP – REPLACEMENT MATERIAL FOR PLASTIC Pulp Sales (Rottneros) by application 2022 Fiber Other Tissue cement 3% paper 2% 4% Printing and writing paper Board 10% and packaging 32% Special applications 14% Electrotechnical applications Filters 15% 20% 17 Q4 2022 / PULP arcticpapergroup.com
Slide 18: Pulp Geographical Split of Sales
PULP GEOGRAPHICAL SPLIT OF SALES The Nordics Asia Germany Italy North Rest of Europe 32% 22% 15% 13% America 9% 8% 18 Q4 2022 / PULP arcticpapergroup.com
Slide 19: Packaging Q4 2022
PACKAGING 19 Q4 2022 arcticpapergroup.com
Slide 20: Packaging Paper Sales Development
PACKAGING PAPER SALES DEVELOPMENT (t) DEVELOPMENT 20 000 PACKAGING PAPERS: 16 000 Munken Kraft Uncoated packaging paper 12 000 G-Flexmatt 8 000 New coated product G-Flexmatt launched on the market in Q2 2021 4 000 0 2018 2019 2020 2021 2022 20 Q4 2022 / PACKAGING arcticpapergroup.com
Slide 21: Power Q4 2022
POWER 21 Q4 2022 arcticpapergroup.com
Slide 22: Power Generation
POWER GENERATION Hydroelectric power plant in Munkedal produced over 17 GWh of green energy in 2022. Biomass power plant in Grycksbo produced over 15 GWh of green energy and 200 GWh of green heat in 2022. Solar farm in Kostrzyn and Grycksbo produced in 2022 1.4 GWh of green energy. 22 Q4 2022 / POWE
Slide 23: New Multifuel Boiler and PV Farms
The new flexible multifuel boiler in Munkedal went into operation in September. New PV farms instalations in our mills in Grycksbo and Munkedal. 23 Q4 2022 / POWER arcticpapergroup.com
Slide 24: Financial Performance Q4 2022
FINANCIAL PERFORMANCE 24 Q4 2022 arcticpapergroup.com
Slide 25: EBITDA Evolution 2015–2022
EBITDA EVOLUTION 2015 – 2022 (PLN mn) Effective hedging of both segments – to stabilize financial results 1 000 900 Q4 2022 EBITDA PLN 140.0mn 800 PLN 158mn LOWER THAN Q3 2022 700 PLN 71mn HIGHER THAN Q4 2021 600 500 400 300 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022 Paper Segment Pulp Segmen
Slide 26: Net Debt/EBITDA 2018–2022
NET DEBT/EBITDA 2018 – 2022 1,28 1,20 1,06 0,82 0,83 0,70 0,70 0,66 0,57 0,57 0,48 0,49 0,36 0,33 -0,02 -0,22 -0,28 26 Q4 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 27: Net Profit per Share
NET PROFIT PER SHARE* 9,11 1,60 1,84 0,18 1,19 * net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares. 27 Q4 2022 / FINANCIAL PERFORMACNE arcticpapergroup.com
Slide 28: Focus Q4 2022
FOCUS 28 Q4 2022 arcticpapergroup.com
Slide 29: Outlook and Dividend Recommendation
• Uncertain macroeconomic environment, demand can be severely affected by cost inflation, high energy prices and general market conditions • Focus on margins over volumes to maintain profitability • The energy projects are running according to plan. Several solar energy projects in Poland and Sweden
Slide 30: The Road Map
THE WAY FORWARD THE ROAD MAP Milestones ahead POWER Phase three PACKAGING of wind Expansion & solar park POWER of packaging Phase two plants of wind & POWER solar park Phase one POWER PACKAGING of wind First solar Fiber base power park POWER project Packaging Expansion Production plant of hydropower
Slide 31: Sharing Our Story With You
SHARING OUR STORY WITH YOU Hedged against Increasing share Predictable capex volatility of Growth of renewable and aimed at continued profitability & high in packaging fossil-free energy improvements fluctuation of energy Owner Established position Stable Sustainable of brands valued on the market w
Slide 32: New Strategy: 4P for Future Arctic
New strategy 4P FOR FUTURE ARCTIC packaging power paper pulp 32 Q4 2022 / FOCUS arcticpapergroup.com