29 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Jan 27, 2023
Slide 1: January 27, 2023
Presentation — sk ‘ % ew
Slide 2: Ulf Larsson, CEO
Slide 3: Growth in renewable energy – new segment 1st of Jan 2023
EBITDA (SEKm) and EBITDA margin Best result ever • Strong demand and high prices 12% • Good cost control and high degree of self sufficiency 10,194 • Strong operating cash flow financing strategic investments 9,109 Kraftliner expansion in Obbola, CTMP expansion at Ortviken and Bollsta grading mill u
Slide 4: Key figures 2022
EBITDA (SEKm) Industrial ROCE 1 Proposed dividend (SEK) 10,194 40% 2.50 Ordinary Extra (9,109) (33%) (2.25) (1.00) EBITDA margin Net debt/EBITDA EPS (SEK) 49% 1.0x 9.61 (48%) (0.9x) (8.46) Note: Figures in brackets refer to 2021. 4 1. ROCE for the industrial segments; Wood, Pulp and Paper.
Slide 5: EBITDA and EBITDA margin by quarter
EBITDA (SEKm) Industrial ROCE 1 EBITDA (SEKm) and EBITDA margin 1,981 24% -29% 3,121 2,806 2,684 2,608 2,484 2,260 1,981 EBITDA margin Net debt/EBITDA 59% 53% 52% 53% 1,377 1,359 50% 41% 1.0x 47% 41% 33% 30% Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1'22 Q2'22 Q3'22 Q4'22 1. LTM 5 Note: EBITDA excluding e
Slide 6: Forest: stable wood supply to industries
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +19% -15% Stable wood supply to industries 1,757 926 62.8% 1,474 790 Increasing wood prices 45.0% Sales up 19% + Higher prices EBITDA down 15% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 - Lower revaluation of biological assets Price development – Pul
Slide 7: Wood: low global demand
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -24% -85% Low global demand – SCA has maintained 1,868 850 normal deliveries 45.5% 1,422 Sales down 24% - Lower prices 129 9.1% + Higher volumes EBITDA down 85% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 - Lower prices Price development – Solid Wood
Slide 8: Sawn wood stocks, production and prices
Stock of sawn pine and spruce wood, Sweden and Finland (k m3) Price development sawn pine and spruce, Sweden (index) 6,000 Normalized monthly level 340 5,000 290 4,000 240 Spruce 3,000 2,000 190 Pine 1,000 140 0 90 Jan-18 Jan-19 Jan-16 Jan-17 Jan-20 Jan-21 Jan-22 Jul-18 Jul-16 Jul-17 Jul-19 Jul-20 J
Slide 9: Pulp: higher prices
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +33% +36% Higher prices 1,822 616 33.0% 33.8% Sales up 33% 1,368 452 + Higher prices + Positive currency effects EBITDA up 36% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 + Higher prices + Positive currency effects Price development – NBSK Pulp - Plan
Slide 10: NBSK pulp price and inventories
NBSK pulp price (USD/t) vs deliveries (Mt) Hardwood pulp inventories (days of supply) 14.5 1600 80 1400 70 14.0 60 1200 13.5 50 Average 1000 40 13.0 800 30 12.5 600 20 Apr-18 Jan-18 Jan-20 Apr-17 Apr-19 Apr-20 Apr-21 Apr-22 Jan-17 Jan-19 Jan-21 Jan-22 Oct-19 Oct-21 Oct-17 Oct-18 Oct-20 Oct-22 Jul-21
Slide 11: Containerboard: start up of new paper machine in Obbola
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +7% -13% Start up of new paper machine in Obbola in Q4 44.1% 1,518 1,626 669 2022, one quarter ahead of schedule 581 35.7% Sales up 7% + Higher prices - Lower delivery volumes EBITDA down 13% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 - Lower product
Slide 12: Kraftliner price, deliveries and box demand
Price (EUR/t) vs Kraftliner deliveries (Mt) European Box demand (index) 1,000 4.9 122 4.8 119 900 116 4.6 800 113 4.5 110 700 4.3 107 600 Unbleached kraftliner price Euwid (LHS) 4.2 104 Kraftliner deliveries Europe (RHS) 101 500 4.0 98 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Jan-18 Jan-19 Jan-20 Jan-21 J
Slide 13: Andreas Ewertz, CFO
Slide 14: Forest land values
Forest land values – average in areas where SCA owns forest land (SEK/m 3) 500 450 400 350 Ludvig & CO 300 3-year weighted average – 250 Svefa used for valuation of forest 200 assets 150 Price (SEK/m3) 2019 2020 2021 2022 100 3-year weighted average 276 291 324 366 50 Price change - 5% 11% 13% 0 201
Slide 15: Higher transaction prices for forest assets in Northern Sweden
Market price Standing volume Forest asset Higher transaction prices for forest assets in (SEK/m3fo) (m m 3 fo) (SEK bn) Northern Sweden +42 +6 +13 366 SEK/m3fo at Dec 31 2022 366 257 261 267 97.9 252 • Average three year transaction price in SCAs region 324 84.5 291 276 74.9 Standing volume increase
Slide 16: Income statement summary
Quarter Full year SEKm Q4 2022 Q4 2021 Change 2022 2021 Change Net sales 4,873 4,763 2% 20,794 18,822 10% EBITDA 1,981 2,806 -29% 10,194 9,109 12% EBITDA margin 40.6% 58.9% -18.3 p.p. 49.0% 48.4% 0.6 p.p. EBIT 1,590 2,408 -34% 8,642 7,634 13% EBIT margin 32.6% 50.6% -18.0 p.p. 41.6% 40.6% 1.0 p.p. F
Slide 17: Proposed dividend and EPS
3.50 1.00 Proposed dividend (SEK) 3.00 +0.25 2.50 Ordinary Extra 2.50 +0.25 +0.25 2.25 2.50 +0.25 (2.25) (1.00) 2.00 2.00 1.75 1.50 1.50 EPS (SEK) 1.00 9.61 0.50 (8.46) 0.00 2017 2018 2019 2020 2021 2022 17
Slide 18: Net sales bridge 2021 to 2022
Higher prices in Pulp Weaker market Wood Exit publication and Containerboard, and start up paper in 2021 lower in Wood Containerboard SEK +12% -3% +4% SEK -3% 20,794m 20 ,0 00 18,822m 15 ,0 00 +10% 10 ,0 00 5,00 0 0 Net sales Price/Mix Volume Currency Discontinuation Net sales 2021 2022 18
Slide 19: EBITDA bridge 2021 to 2022
Higher prices in Pulp and Containerboard, Higher costs for wood raw lower in Wood Higher distribution costs material and chemicals 12,000 +2,304 -341 -981 +559 -436 SEK -20 10,194m 10,000 SEK 9,109m Weaker market Wood and start up 8,000 Containerboard 6,000 4,000 EBITDA margin EBITDA margin +12% 48.
Slide 20: Net sales and EBITDA by segment
Forest Wood Pulp Containerboard/Paper 1 Net sales (SEKm) 9,643 9,229 8,434 7,916 6,956 7,080 6,753 7,209 6,823 6,486 6,148 6,686 6,618 6,325 6,296 5,994 5,743 5,070 5,455 5,456 4,377 4,431 2,542 2,866 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018
Slide 21: Net sales bridge Q4 2021 to Q4 2022
Lower prices Wood, higher prices in Pulp and Containerboard SEK SEK 4,763m -5% +7% +1% 4,873m Higher in Wood and Pulp, lower in Containerboard +2% Net sales Price/Mix Volume Currency Net sales Q4 2021 Q4 2022 21
Slide 22: EBITDA bridge Q4 2021 to Q4 2022
Higher prices in Pulp and Containerboard, lower in Wood Higher costs for wood raw material and chemicals Higher distribution costs SEK 3,000 and organizational build 2,806m -328 up CTMP -20 -403 2,500 +216 -218 SEK -72 1,981m 2,000 Higher in Wood and Pulp, lower in Containerboard Lower energy produc
Slide 23: Cash flow
Quarter Full Year SEKm Q4 2022 Q4 2021 2022 2021 EBITDA 1,981 2,806 10,194 9,109 Revaluation of biological assets and other non cash flow items -459 -744 -1,863 -1,883 Operating cash surplus 1,522 2,062 8,331 7,226 Change in working capital -604 324 -1,328 -306 Restructuring costs -2 -58 -40 -394 Cu
Slide 24: Capital employed, net debt and equity
SEKm Dec 30, 2022 Dec 31, 2021 Forest assets 97,882 84,497 Working capital 4,138 2,823 Deferred tax relating to forest assets -19,468 -16,905 Other capital employed 23,795 20,392 Total capital employed 106,347 90,807 Net debt 9,989 7,752 Net debt/EBITDA 1.0x 0.9x Equity 96,358 83,055 Net debt/Equity
Slide 25: Pro forma EBITDA with Renewable Energy segment
Forest Wood Pulp Containerboard Renewable Energy EBITDA EBITDA EBITDA EBITDA EBITDA Full year 2022 (SEKm) Full year 2022 (SEKm) Full year 2022 (SEKm) Full year 2022 (SEKm) Full year 2022 (SEKm) -94 -134 -78 -60 3,000 3,000 2,961 2,883 3,000 2,852 2,792 3,000 2,696 2,602 3,000 2,500 2,500 2,500 2,500
Slide 26: Summary
Summary Ulf Larsson, CEO WSCA
Slide 27: Growth in renewable energy – new segment 1st of Jan 2023
EBITDA (SEKm) and EBITDA margin Best result ever • Strong demand and high prices 12% • Good cost control and high degree of self sufficiency 10,194 • Strong operating cash flow financing strategic investments 9,109 Kraftliner expansion in Obbola, CTMP expansion at Ortviken and Bollsta grading mill u
Slide 28: Q&A
Slide 29: are subject to certain risks and uncertainties that could negatively affect our business. Please
This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read SCA’s most recent annual report for a better understanding of these risks and unce