Svenska Cellulosa Ab Sca Class A · OMXSTO:SCA_A
Svenska Cellulosa Ab Sca Class A — Svenska Cellulosa Aktiebolaget SCA — Q3 2023 Earnings Presentation
26 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Oct 27, 2023
Slide 1: October 27, 2023
October 27, 2023
Slide 2: SCA
QSCA
Slide 3: Good profitability and strong operating cash flow despite lower prices
Good profitability and strong operating cash flow despite lower prices and higher wood raw material costs EBITDA margin on 33% Sales decreased 14% vs Q3 2022 • Price/mix -30%, volume 9%, currency 7% EBITDA decreased 43% vs Q3 2022 ‒ Lower prices + Higher delivery volumes + Positive currency effects
Slide 4: EBITDA, Industrial ROCE and EBITDA margin
EBITDA (SEKm) Industrial ROCE 1 EBITDA (SEKm) and EBITDA margin 1,417 12% 2,806 3,121 -43% 2,684 2,608 2,484 1,981 2,055 59% 1,700 EBITDA margin Net debt/EBITDA 53% 52% 53% 50% 1,417 43% 32.9% 1.4x 41% 37% 33% Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 1. LTM 4
Slide 5: Forest: Stable wood supply to industries, sales up 17%, EBITDA up 20%
Net sales (SEKm) EBITDA (SEKm) EBITDA margin +17% +20% Stable wood supply to industries 1,878 724 37.3% 38.5% 1,612 601 Sales up 17% + Higher prices EBITDA up 20% + Higher harvesting level own forest Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 + Higher prices Price development – Pulpwood and Saw
Slide 6: Wood: Sales down 12%, EBITDA down 54%
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -12% -54% Sales down 12% 1,412 351 24.9% 1,244 - Lower prices + Higher volumes 13.0% 161 EBITDA down 54% - Lower prices Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 Price development – Solid Wood Products 120 100 80 60 40 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3
Slide 7: Sawn wood stocks, prices and production in Sweden and Finland
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 3,000 Spruce 190 2,000 Pine 1,000 140 0 90 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jul-16 Jul-17 Jul-18 Jul-19 J
Slide 8: Pulp: Ramp up of new CTMP line according to plan
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -14% -80% Ramp up of new CTMP line according to plan 1,897 848 44.7% 1,636 Sales down 14% - Lower prices + Higher volumes 10.5% 173 + Positive currency effects Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 EBITDA down 80% - Lower prices Price developmen
Slide 9: NBSK pulp price, deliveries and inventories
NBSK pulp price (USD/t) vs deliveries (Mt) Hardwood pulp inventories (days of supply) 15.0 1,600 1,500 80 14.5 1,400 70 1,300 60 14.0 1,200 1,100 50 13.5 1,000 40 900 13.0 800 30 700 20 12.5 600 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Oct-17
Slide 10: Containerboard: Ramp up new paper machine Obbola according to plan
Net sales (SEKm) EBITDA (SEKm) EBITDA margin -18% -65% Ramp up new paper machine Obbola 1,694 719 42.4% according to plan 1,385 Sales down 18% 18.3% - Lower prices 253 + Higher volumes + Positive currency effects Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 EBITDA down 65% Price development – Kra
Slide 11: Kraftliner price, deliveries, box demand and inventories
Price (EUR/t) vs Kraftliner deliveries (Mt) European Box demand (index) 122 1,000 4.9 119 900 4.8 116 4.6 113 800 110 4.5 700 107 4.3 104 600 Unbleached kraftliner price Euwid (LHS) 4.2 101 Kraftliner deliveries Europe (RHS) 500 4.0 98 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jan-18 Apr-18 Apr-19 A
Slide 12: Renewable Energy: SCA grows in wind power
Sales (SEKm) EBITDA (SEKm) EBITDA margin +27% +89% SCA grows in wind power 411 155 37.9% 324 Sales up 27% 25.3% + Higher prices 82 EBITDA up 89% + Higher prices + Profitable growth Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 12 Note: Sales comprises net sales and other operating income.
Slide 13: Andreas Ewertz, CFO
- Nis ay | habia: PN aae rich _Abtreas Ewertz, CFO" @®SCA
Slide 14: Quarter income statement Q3 2023
Quarter SEKm Q3 2023 Q3 2022 Change Net sales 4,302 5,007 -14% EBITDA 1,417 2,484 -43% EBITDA margin 32.9% 49.6% -16.7 p.p. Depreciation and impairment -504 -390 29% EBIT 913 2,094 -56% EBIT margin 21.2% 41.8% -20.6 p.p. Financial items -111 3 Profit before tax 802 2,097 -62% Tax -139 -431 Profit fo
Slide 15: Net sales and EBITDA by segment
Forest Wood Pulp Containerboard Renewable Energy Net Sales (SEKm) 1,931 1,945 1,878 1,897 1,822 1,881 1,760 1,760 1,694 1,626 1,612 1,636 1,573 1,412 1,422 1,432 1,385 1,297 1,353 1,244 470 514 411 324 402 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 '22 '22 '23 '23 '23
Slide 16: Net sales bridge Q3 2022 to Q3 2023
Lower prices Wood, Containerboard and Pulp Higher delivery volumes from SEK commissioned strategic projects 5,007m -30% SEK +7% 4,302m SEK 9% SEK +352m -1,514m SEK +457m -14% Net sales Price/Mix Volume Currency Net sales Q3 2022 Q3 2023 16
Slide 17: EBITDA bridge Q3 2022 to Q3 2023
Lower prices Wood, Containerboard and Pulp 3,000 SEK 2,484m -1,611 2,500 2,000 Higher delivery volumes from commissioned High degree of self sufficiency in strategic projects energy and wood raw material SEK 1,500 +208 1,417m +199 +152 -51 +36 1,000 EBITDA margin EBITDA margin - 43% 500 49.6% 32.9%
Slide 18: Cash flow
Quarter Jan - Sep SEKm Q3 2023 Q3 2022 2023 2022 EBITDA 1,417 2,484 5,172 8,213 Revaluation of biological assets and other non cash flow items -516 -432 -1,465 -1,404 Operating cash surplus 901 2,052 3,707 6,809 Change in working capital 700 269 551 -724 Current capital expenditures -436 -398 -1,065
Slide 19: Capital employed, net debt and equity
SEKm Sep 30, 2023 Dec 31, 2022 Forest assets 99,208 97,882 Working capital 3,587 4,138 Deferred tax relating to forest assets -19,630 -19,468 Other capital employed 24,171 23,795 Total capital employed 107,336 106,347 Net debt 10,119 9,989 Net debt/EBITDA 1.4x 1.0x Equity 97,217 96,358 Net debt/Equi
Slide 20: Summary
Summary Ulf Larsson, CEO WSCA
Slide 21: Value creation: decided and ongoing projects, organic growth
Value 2 Decided and ongoing projects 3 Organic growth Growing forest assets Renewable fuels Further potential Containerboard & Pulp Grow Wood Wind power Increased forest ownership in Baltics Biofuel Bio refinery and Nordic Countries Acquire forest land Profitable growth in exis
Slide 22: Three different business models to create maximum value in wind power
Working with three different business models to create maximum value Wind electricity producer Project development Land lease • Own project development • SCA leases out land areas Value • High degree of self on SCA land well-suited for electricity creation sufficiency in electricity ‒ For sale or ow
Slide 23: Wind power investment of SEK 1.7 bn, 100% self sufficiency in electricity
2,500 2,500 Wind lease Wind power investment of SEK 1.7 bn Series 1 2,000 2,000 Fasikan Series 2 100% degree of self sufficiency in electricity 1,637 1,582 Skogberget Series 3 • Production capacity of 333 GWh/year fully located on 1,500 1,500 Series Wind 1 lease SCA land ~100% Expected start up begi
Slide 24: Good profitability and strong operating cash flow despite lower prices
Good profitability and strong operating cash flow despite lower prices and higher wood raw material costs EBITDA margin on 33% Sales decreased 14% vs Q3 2022 • Price/mix -30%, volume 9%, currency 7% EBITDA decreased 43% vs Q3 2022 ‒ Lower prices + Higher delivery volumes + Positive currency effects
Slide 25: Q&A
Slide 26: Forward-looking statements
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
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