Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — Non-Deal Roadshow (June 2019)
24 slides from Billerud Ab's roadshow presentation, Jun 14, 2019
Slide 1: WHAT IF packaging could make a difference?
WHAT IF packaging could make a difference? June 14, 2019 Roadshow with SEB, New York
Slide 2: BillerudKorsnäs at a glance
BillerudKorsnäs at a glance Net sales 2018 23.7 Operating profit* 2018 3 Divisions Billion SEK 2.0 57% Billion SEK 8 Production units Board Share of net sales** EBITDA margin* 2018 Beetham 39% Frövi Paper Employees Share of net sales** 15% Rockhammar 4 500 Gruvön Gävle Jakobstad 4% Karlsborg Solutio
Slide 3: Material that creates clear customer value
Material that creates clear customer value Net sales by market segment Medical & Hygiene 6% Fluting Liner Consumer & Cartonboard Luxury 15% Food & Beverages 54% Industrial Kraft paper Sack paper 25% Liquid packaging board
Slide 4: Megatrends driving growth
Megatrends driving growth Demographics and urbanisation Greater awareness of sustainability Digitalisation Globalisation
Slide 5: We have invested for future growth
We have invested for future growth 2012 2013-2017 2018 2019 Jakobstad Tervasaari UPM acquisition: Production capacity increases: PM10 Skärblacka: KM7 Gruvön: Production capacity: ~300 ktonnes Frövi/Rockhammar: ~95 ktonnes Production capacity: ~90 ktonnes Production capacity: ~550,000 tonnes Skärblac
Slide 6: Unlocking the potential
Unlocking the potential SECURE IMPROVE ACCELERATE Successful ramp-up of KM7 A safe company is a well-run company Innovate for growth Competitive wood supply Stabilise production Capture new solutions sales
Slide 7: The most modern board machine
The most modern board machine 350 m SEK 7,6 bn 17 000 tonnes Machine length Project cost Machine weight 8 000 > 600 km 550 000 tonnes Concrete piles Cable length Production capacity
Slide 8: Positioned to capture customer demand
Positioned to capture customer demand Liquid packaging board Liner KM7 Gruvön Cartonboard Cup stock
Slide 9: Ramp-up proceeding according to plan
Ramp-up proceeding according to plan Stock on wire FY 2019 ~240 ktonnes FY 2020 ~390 ktonnes June – Commercial liner Oct – Certification material Ramp-up impact on EBITDA SEK 500m Ramp-up impact on EBITDA SEK 200m EBITDA neutral FY 2021 Ramp-up cont. Apr 2019 2019 2020 2021
Slide 10: Competitive wood supply
Competitive wood supply Agreement to acquire Bergvik Skog Öst in November 2018 The acquisition completed 31 May 2019 The intention to find suitable investors for a significant part of the forest land This process is ongoing and interest is high
Slide 11: A safe company is a well-run company
A safe company is a well-run company Unacceptable number of injuries Lost time injury frequency rate, LTIFR* All accidents are preventable ~9 Cultural change is needed – never walk by 7,2 Focus on structure, engagement and predictability 3,1 1,2 1,5 Average Swedish Best in class Outcome 2018 KM7 pro
Slide 12: Production stability is the key focus
Production stability is the key focus Production Excellence Programme (PEX) OEE* target setting process target to improve OEE* with 4 percentage points by 2020 Programme drives improvements across all mills Stretched mill specific targets defined and committed Focus on loss eradication and track pro
Slide 13: Innovation through partnership
Innovation through partnership Research platforms Flagship projects Strength Paper bottle Barrier Paper battery Formability Liquid packaging board of the future New concepts
Slide 14: Expansion in the value chain
Expansion in the value chain Growth through customized packaging solutions for global brand owners New solutions Formable paper Solutions that challenge plastic Brand new solutions Investing in the future solutions Award-winning packaging solutions
Slide 15: Key highlights Q1 2019
Key highlights Q1 2019 Good demand and strong sales performance in all divisions Double-digit top-line growth 10% Increased sales prices and positive currency effects NET SALES GROWTH Y/Y Largely unchanged sales volumes Solid result despite high fibre costs Total cost of fibre continued to increase
Slide 16: Q1: Double-digit top-line growth
Q1: Double-digit top-line growth Net sales up 10% compared with Q1 2018 Net sales, SEKm Increased sales prices 6 504 Positive currency effects 5 897 Sales volumes largely unchanged Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019
Slide 17: Q1: Solid result despite higher fibre costs
Q1: Solid result despite higher fibre costs
Slide 18: Balance sheet affected by heavy investments
Balance sheet affected by heavy investments Total net debt SEK 9 822 million (6 056) at Net debt / EBITDA 31 March 2019 2,9 2,7 Clear focus on regaining positive cash flow 2,4 Target: <2.5x 2,2 and deleveraging Net debt expected to peak in Q2 2019 1,5 1,6 1,4 1,4 1,2 Net debt/EBITDA expected to be i
Slide 19: Long-term financial targets and outcome
Long-term financial targets and outcome Area FY target FY 2018 Q1 2019 Net sales growth 3-4% 6% 10% ✔ EBITDA margin* >17% 15% 16% ROCE* >13% 9% 9% Net debt/EBITDA* <2.5 2.68 2.90 Dividend policy 50% 59% ✔ *Adjusted for items affecting comparability
Slide 20: Summary and outlook
Summary and outlook Well positioned to capture growing customer demand and to expand in the value-chain Agenda that focuses on securing, improving and accelerating Ramp-up of KM7 is proceeding according to plan Process of finding suitable investors for Bergvik Öst is ongoing Q2 OUTLOOK Continued goo
Slide 21: Next Generation investment programme
Next Generation investment programme
Slide 22: The majority of our investment program is completed
The majority of our investment program is completed PM10: ~1 300 SEK million Capex, SEK million Started and undergoing ramp-up 6 000 5 100 KM7: ~7 600 SEK million 5 000 Civil and construction completed Start-up March-April 4 000 3 000 2 900 2 000 1 000 0 2015 2016 2017 2018 2019 2020 2021 2022 Base
Slide 23: We are committed to a stable ramp-up of KM7
We are committed to a stable ramp-up of KM7 Liner will be the major product during the Ramp-up base case KM7, ktonnes start-up phase 600 EBITDA positive FY Increasing LBP production in pace with 2021 market growth 500 Flexibility to produce premium products to 400 meet change in product demand 300 2
Slide 24: New organisation and management team in place
New organisation and management team in place CEO Petra Einarsson Innovation CTO Magnus Wikström Ulf Eliasson CFO HR Ivar Vatne Paulina Ekvall Legal Communication Andreas Mattsson Christopher Casselblad Division Division Division Paper Board Solutions Helene Biström Mikael Andersson Anders Lundin