Ahlstrom-Munksjö Q1/2020 Results Hans Sohlström, President and CEO Sakari Ahdekivi, Deputy CEO and CFO April 23, 2020
Agenda • Business review • Financials • Covid-19 response 2
22% improvement in comparable EBITDA in Q1/2020 Comparable EBITDA and margin* MEUR % • Record high comparable EBITDA and highest margin 12.8% 100 20 in 2 ½ years, all business areas improved 92 90 18 9.9% • Delivery volumes increased 5% in continuous 75 80 16 operations 70 14 • EUR 50m cost savings program completed ahead of 60 12 schedule, new cost savings initiated 50 10 40 8 • Rapid and coordinated response to the COVID-19 Pro forma pandemic 30 6 20 4 • Very strong demand for medical and life science end- 10 2 use products, expansion of face mask materials 0 0 production • Sale of the fine art paper business in Arches, France, *Years 2016-Q3/2017 Ahlstrom-Munksjö excluding resulted in a capital gain of EUR 31 million NASS and Caieiras 3
Increase in delivery volumes in Q1/2020 vs Q1/2019 Quarterly, 1,000 tons Sales volumes Share of net sales 500 Decor Filtration 450 Nonwovens 400 Parchment 350 Glass Fiber Tissue Technical 300 Deliveries increased Abrasive by 5% in Q1/2020 250 (continued operations) Liquid Technologies 200 Food Packaging Beverage & 150 Medical Casing 100 Tape Coated Specialties 50 Precision Coating Insulation Release Liners 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 4
Growth in volumes more than offset by lower selling prices, product mix and divestments MEUR Net sales Q1/20 vs Q1/19 1,000 Net sales impacted by: 900 ▪ Net sales - 5% 800 ▪ Deliveries + 5% 700 ▪ Selling prices - 5% Price Mix Divestments, Volume 600 ▪ Product mix - 3% other 500 ▪ Divestments, other -2% 400 300 Higher delivery volumes were more than offset by lower 200 average selling prices, partly relating to a less favorable product mix 100 0 Q1/2019 Q1/2020 5
22% increase in comparable EBITDA Comparable EBITDA Q1/2020 vs Q1/2019 EBITDA impacted by: MEUR ▪ Increased delivery volumes 100 Volume ▪ Limited COVID-19 impact 90 ▪ Lower variable costs 80 Difference Fixed costs, ▪ Costs savings measures 70 between selling FX, ▪ Lower selling prices 60 price and other variable costs ▪ 50 Less favorable mix 40 ▪ Manufacturing fixed costs increased 30 Record high comparable EBITDA and 20 highest margin in 2 ½ years 10 0 Q1/2019 Q1/2020 6
Streamlining of manufacturing fixed costs – a new profit improvement program • Expansion through a merger and acquisitions – Exceeded the promised synergy benefits • EUR 50m cost savings program completed ahead of schedule • The market environment has been challenging, impacted by volatile raw material prices, lower demand and intensified competition • Benchmarking of the plants shows improvement potential in fixed cost efficiency of manufacturing • A new longer-term profit improvement program – Annualized target in the range of EUR 20 million with gradual impact from end of 2020 onwards 7 7
Agenda • Business review • Financials • Covid-19 response 8
Comparable EBITDA improved in all business areas Filtration & Performance Solutions Advanced Solutions Industrial Solutions % MEUR % MEUR MEUR % 40 25 25 16 20 16 20 20 30 12 15 12 15 15 8 20 10 8 10 10 4 5 4 10 5 5 0 0 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 19 19 19 19 20 19 19 19 19 20 19 19 19 19 20 Food Packaging & MEUR Decor Solutions % MEUR % Technical Solutions 16 20 16 16 12 15 12 12 8 10 8 8 5 4 4 4 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 9 19 19 19 19 20 19 19 19 19 20
Seasonal increase in working capital, decrease in net debt supported by divestment Operating cash flow Net debt Net debt to Net debt, MEUR EBITDA MEUR 1100 4.0 140 Net debt EUR 854m 125 1000 3.5 120 900 3.0 800 Net debt to comparable 100 Higher 700 EBITDA 2.6* 2.5 seasonal 77 80 600 increase in 68 Gearing 2.0 63 working capital 500 at 72% 60 52 1.5 400 43 41 300 40 28 28 31 30 1.0 200 0.5 20 12 100 5 0 0.0 0 Q1/17 Q2 17 Q3/17 Q4/17 Q1/18 Q2/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q3/18 Q4/18 Classification of certain balance sheet items between interest-bearing and non-interest- bearing assets and liabilities were redefined in Q3/2019. Comparison figures from Q3/2018 have been restated accordingly 10 * The implementation of the IFRS 16 standard is excluded from debt covenant calculations
Strong liquidity - Maturity profile and debt structure Interest-bearing liabilities as of March 31, 2020 Maturity profile as of March 31, 2020 700 Debt by type 600 Bond 24% 500 400 Other bank loans 300 8% 200 Facilities 63% 100 Commercial Papers 5% 0 2020 2021 2022 2023 2024 Facilities Hybrid Bond Bond Undrawn revolving Credit facilitiy Bond Other bank loans Commercial Papers Facilities Commercial Paper Bank loans • Cash position EUR 247 million • • Weighted average interest rate 3.0% (excl. hybrid bond Available undrawn committed facilities EUR 211 million • Available undrawn uncommitted facilities EUR 317 million and lease liabilities) • • Net interest expense EUR 48 million in 2019 New EUR 50 million committed revolving credit facility for 12 months signed in April 2020 • 11
Capital generation and allocation Comparable EBITDA** Capital allocation MEUR MEUR 350 Pro forma 350 300 300 250 250 200 Depreciation** 200 Dividend 150 150 100 Capex 100 estimate 50 50 0 0 2015 2016 2017 2018 2019 LTM 2017* 2018* 2019 2020E *Pro forma Q1/20 ** Excluding PPA **Years 2015-2017 Ahlstrom- Munksjö excluding NASS and Caieiras 12
Breakdown of operating costs in 2019 Approximate impact on EBITDA Other fixed 8 % in million euros of a 10% increase in costs, indicative: Personnel 23 % Hardwood pulp -25 Fibers 32 % Softwood pulp -6 Tio2 -11 Chemicals -7 Energy -20 Other variable 10 % Other raw Energy 8% materials 19% 13
Pulp price development Europe North America China USD per ton USD per ton USD per ton 1500 1500 1000 1000 1300 1300 Softwood 1400 1400 Softwood 1200 1200 900 900 Softwood 1300 1300 1100 1100 1200 1200 800 800 1000 1000 1100 1100 700 700 Hardwood Hardwood 900 900 1000 1000 900 900 600 600 800 800 Hardwood 800 800 700 700 500 500 700 700 600 600 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 400 400 600 600 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 Dec-19 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 Europe North America China Price change, % Q1/Q1 Q1/Q4 Price change, % Q1/Q1 Q1/Q4 Price change, % Q1/Q1 Q1/Q4 Hardwood -28 -1 Hardwood -31 +0 Hardwood -32 -2 Softwood -19 +1 Softwood -18 +1 Softwood -28 +1 14 Source: RISI
Energy and titanium dioxide European forward power and gas prices Titanium dioxide EUR MWh EUR per ton 60 3000 50 2800 Power 2600 40 2400 2200 30 2000 20 1800 Gas 1600 10 1400 1200 0 1000 Change % Q1/Q1 Q1/Q4 Change % Q1/Q1 Q1/Q4 Power -15 -10 Tio2 -5 -3 Gas -27 -11 Source: ICIS Europe FD 15 Source: E&C consultants
Completed investments driving strategic progress Production ramp-up ongoing Efficiency Customer Profitable and agility value growth ✓ Abrasive backings, Arches Back of sandpaper ✓ ✓ EUR 14m Paper machine rebuild, Q1/18- ✓ Filtration, Turin Filtration material EUR 3m Capacity debottlenecking, H1/18- ✓ ✓ ✓ Filtration, Madisonville Filtration material Product offering , H2/18- EUR 23m ✓ ✓ Foodpack, Saint Severin Baking paper EUR 7m New line installation, Q3/18- ✓ ✓ NASS Fiber composite EUR 13m Coater expansion, Q3/17- release liners ✓ ✓ Pre-impregnated Decor, Dettingen EUR 5m decor paper Production line upgrade, Q1/19 Specialty pulp ✓ ✓ Insulation, Aspa EUR 4m Bailing line modernization, Q2/19- 16
Completed and announced investments driving strategic progress Efficiency Customer Profitable Production ramp-up ongoing and agility value growth EUR 23m ✓ Coated ✓ ✓ Coated Specialties, Jacarei specialty EUR 21m Coating line upgrade, Q3/19- paper ✓ ✓ Electrotechnical Insulation, Billingsfors paper EUR 23m Boiler and pulp line rebuild, Q3/19- ✓ ✓ Sterilization Medical, Pont Audemer wrap EUR 4m Converting line rebuild, Q4/19- Announced investment decisions Turin plant ✓ Filtration, Release Liner EUR 15m New co-generation in Turin plant, H2/20- ✓ ✓ Industrial filter Filtration, Turin, Malmedy, Ställdalen material Capacity expansion, H2/21- EUR 28m ✓ ✓ ✓ Coffee, tea, and Beverage & Casing, Chirnside casing material EUR 28m New production line, Q1/21 17
Agenda • Business review • Financials • Covid-19 response 18
Recommend
More recommend
