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Q2 January June 2017 INTERIM REPORT JANUARY JUNE 2017 2017-07-18 - PowerPoint PPT Presentation

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Q2 January June 2017 INTERIM REPORT JANUARY JUNE 2017 2017-07-18 Per Lindberg, CEO and President, and Susanne Lithander, CFO 1 Q2 2017 RESULTS AT A GLANCE NET SALES 3 % PACKAGING PAPER OTHER 5 600 Kraft paper Sack paper GROWTH 9%

  1. Q2 January – June 2017 INTERIM REPORT JANUARY – JUNE 2017 2017-07-18 Per Lindberg, CEO and President, and Susanne Lithander, CFO 1

  2. Q2 2017 RESULTS AT A GLANCE NET SALES 3 % PACKAGING PAPER OTHER 5 600 Kraft paper Sack paper GROWTH 9% Market pulp SEK million 38% SHARE OF SALES 37% EBITDA CONSUMER BOARD 16% 15 % Liquid packaging board CORRUGATED SOLUTIONS 863 Cartonboard Fluting MARGIN Liner SEK million Managed Packaging 2

  3. Q2 2017 KEY HIGHLIGHTS Continued high demand across all business areas Stable production volumes EBITDA affected by one-off and extra costs of SEK 55 million and maintenance shutdown costs of SEK 230 million Strong operating cash flow Favourable outlook on both short and long term 3

  4. FINANCIAL DEVELOPMENT 4

  5. NET SALES SEK MILLION 6000 +3% 5800 5600 5636 5600 5489 5478 5468 5400 5439 5393 5357 5200 5213 5000 4800 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 5

  6. EBITDA SEK MILLION 1600 0% 1400 1384 1200 1000 1037 1017 923 897 800 863 859 693 600 671 400 200 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 6

  7. OPERATING CASH FLOW SEK MILLION 1000 696 631 619 500 541 360 323 314 155 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -294 -500 2015 2016 2017 7

  8. RETURN ON CAPITAL EMPLOYED ADJUSTED, ROLLING 12 MONTHS (%) 16 Target: >13% 14 14 13 13 13 13 13 13 12 12 8 4 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 8

  9. LEVERAGE NET DEBT/EBITDA (X) 3.00 2.50 Target: <2.5x 2.00 1.92 1.50 1.35 1.32 1.30 1.27 1.24 1.24 1.19 1.00 1.08 0.50 0.00 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 9

  10. BUSINESS AREAS 10

  11. PACKAGING PAPER BUSINESS AREA KRAFT AND SACK PAPER FOR CUSTOMERS WITH TOUGH DEMANDS Packaging for flour, sugar, carrier bags, medical KRAFT PAPER SACK PAPER packaging, building materials, chemicals and more #1 #2 Growth driven by population growth in emerging GLOBALLY GLOBALLY markets, ageing population, increasing environmental awareness and more SELECTIVE GROWTH Asset transformation for increased profitability 2-4% Development of new business models CAGR Expansion to growing markets 11

  12. PACKAGING PAPER BUSINESS AREA Q2 DEVELOPMENT 2 151 Continued strong performance Net sales +3% vs Q2-16 NET SALES SEK MILLION Improved FX and increased local prices 312 EBITDA +17% vs Q2-16 Good sales mix, increased local prices and favourable FX EBITDA SEK MILLION Improved market for all kraft and sack papers 15 % Q3 sales expected to be on par with Q2 Kraft and sack paper markets expected to remain EBITDA MARGIN stable with potential to increase prices in local currency 12

  13. CONSUMER BOARD BUSINESS AREA LIQUID PACKAGING BOARD AND CARTONBOARD WITH UNIQUE PROPERTIES Packaging for milk, juice, preserved foods, beauty LIQUID LIQUID PACKAGING BOARD PACKAGING BOARD and healthcare products, confectionary and more – AMBIENT PACKAGES – ALL PACKAGE TYPES #1 #2 Growth driven by high urbanization rate, change in consumer behavior and more GLOBALLY GLOBALLY VOLUME GROWTH Attractive market providing growth opportunities 4-5% Investments for volume growth CAGR Innovation with customers and brand owners 13

  14. CONSUMER BOARD BUSINESS AREA Q2 DEVELOPMENT 2 099 Continued volume growth Net sales +4% vs Q2-16 NET SALES SEK MILLION EBITDA +4% vs Q2-16 498 Increased sales volumes Continued growth in all parts EBITDA SEK MILLION Expected continued firm order situation for liquid 24 % packaging board with normal season varieties and further improved order situation for cartonboard EBITDA MARGIN 14

  15. CORRUGATED SOLUTIONS BUSINESS AREA FLUTING AND LINER ADD VALUE Packaging for fruit and vegetables, white goods and electronics, exclusive drinks and more COATED WHITE PURE WHITE NSSC FLUTING TOP LINER LINER Supply chain solutions and packaging #1 #2 #2 optimisations for brand owners EUROPE EUROPE EUROPE Growth driven by increasing e-commerce and fresh food consumption, package differentiation and changing supply chains VALUE GROWTH Strong product portfolio setting market standard 2-4% Integrating new business model CAGR Increasing sales to brand owners 15

  16. CORRUGATED SOLUTIONS BUSINESS AREA Q2 DEVELOPMENT 902 Net sales +8% vs Q2-16 Improved local prices and FX NET SALES SEK MILLION EBITDA +25% vs Q2-16 163 Lower maintenance cost Negative impact from digester breakdown Strong order books and increased prices in Europe EBITDA SEK MILLION 18 % Expected continued strong demand for fluting and liner with potential for local price increases Managed Packaging is forecasted to continue EBITDA MARGIN delivering consistently strong sales growth 16

  17. OUTLOOK 17

  18. OUTLOOK Demand and order situation are expected to be strong in the third quarter with normal seasonal variances for all business areas. The Packaging Paper and Corrugated Solutions business areas see opportunities for local price increases in the next quarter. Longer transportation of wood is expected to have a 3% negative effect on wood costs in Q3 compared with Q2. The situation at the Port of Gothenburg could have an impact on the Group’s delivery capacity and costs during Q3. Costs for planned maintenance shutdowns in the third quarter are estimated at SEK 215 million. 18

  19. SKÄRBLACKA AND GRUVÖN WELL UNDER WAY IMPROVING EFFICIENCY AND SECURING GROWTH A Yankee cylinder of 160 tons on the move from Tervasaari to Skärblacka Investing in MG integrated to New board machine in Gruvön, pulp production in Skärblacka, Sweden with capacity of Sweden; approx. 550 000 t/a; SEK 1,3 billion investment . SEK 5,7 billion investment. 19

  20. UNDERSTANDING SOLUTION SALES CONCEPT DEFINITIONS Packaging Solutions Systems Solutions Ready-to-use packaging solutions Product solutions including both materials and machine (and machine service) BillerudKorsnäs sells ready-made packaging Products using BillerudKorsnäs material May use BillerudKorsnäs material Examples:  Axello ZAP Examples:  Managed Packaging  Formable Solutions  Sack Sales 20

  21. CAPITAL MARKETS DAY ON 15-16 NOVEMBER 2017 Capital Markets Day in Stockholm on 15 November 2017 and in London on 16 November 2017. More info will be published on www.billerudkorsnas.com 21

  22. Q&A WE CHALLENGE CONVENTIONAL PACKAGING FOR A SUSTAINABLE FUTURE

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