Ulf Larsson, CEO August 26, 2020
1 Intention to invest in 300kt CTMP at Ortviken 2 Intention to exit publication paper • Negotiations initiated for closure of all three paper machines 2
Invest in integrated value chain: • Increased Grow Pulp • Grow Kraftliner value from • Renewable energy new segment each tree • Reduce exposure to Publication Paper Increase forest holdings: Growing • Increase growth and harvesting level forest asset • Acquire forest land • Optimize nature conservation 3
Value Biorefinery optionality Acquisition of forest land Biofuel Östrand – further 2021 capacity increase Research and Exit publication development 2023 paper Pilot plant 2023 Additional 70k ha Grow CTMP pulp forest land in the Baltics 2022 Kraftliner expansion Joint venture with Opportunity to St1 signed 8.0 TWh wind further increase 2018 2019 2021/22 100 000 m 3 power on SCA land NBSK pulp biofuels Closure of all Östrand capacity at publication paper Östrand expansion machines 300kt CTMP at Ortviken and close CTMP Östrand New 725kt kraftliner machine at Obbola Wind power on SCA Increase share of land is expected to WT Kraftliner at increase to 8.0 TWh Munksund Decided or completed projects (or Exit) in 2022 Production started New long-term in June 2018 target of 11 TWh Financed by Potential projects operating cash flow Time 4
LWC volume 1 1,000 Exit structurally declining publication paper market • 900 Low and decreasing profitability – now cash flow negative 800 700 600 Invest in increased CTMP pulp production • Attractive CTMP offering 500 • Month / Rolling LTM Low CAPEX per tonne • 400 Leading cost position 300 200 100 CAGR Accelerated Creates opportunity for further NBSK expansion -5% 0 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 1 Deliveries from Western Europe (kt/month) 5
Overview Ortviken only remaining publication paper site in SCA Closure of all three paper machines expected within six months Subject to negotiations initiated with employee representatives Annual production capacity 775k tonnes • 500k tonnes LWC • 275k tonnes uncoated 6
Product Strength Absorption capacity Porosity Bulk properties properties Bending rigidity Wet strength Stiffness Opacity Lower production cost Same product Lower production cost Increased shape per given level of Higher absorption thickness with less at same stiffness stability Customer stiffness pulp value Certified wood raw material Unique competence in birch CTMP 8
Profitable growth End use segments Expanding product offering • Increase capacity from 100kt to 300kt Printing & Packaging Writing • High share of growth with existing customers Sales to structurally growing product segments Special 300 kt • Increased share of sales to tissue and packaging CTMP improves customer product properties at a • Tissue lower cost 9
Cost curve SW CTMP producers Investment rationale Low CAPEX per tonne • CAPEX SEK 1.45bn • CAPEX SEK 5k per tonne • Utilize existing modern TMP asset Scale up profitable business CTMP today CTMP tomorrow Östrand Ortviken • ~15% lower cash cost per tonne • Top quartile in cost position Source: Pöyry 10
Net sales (SEKbn) One-off closure costs, up to (SEKbn) -4.0 ~0.9 People affected Write-downs (SEKbn) ~800 ~1.1 of which ~750 Fixed assets ~350 Working capital 12
Investment ’20 - ’23 ( SEKbn) CTMP capacity (kt) EBITDA (SEKbn) Financial summary +1.45 bn + 200 kt + 0.3 bn Capex of SEK ~1.45bn Profitable growth 300 1.45 • +SEK 0.3bn EBITDA • Secure current business Expected start-up beginning 2023 • CTMP production to stop at Östrand when new line up and running • Costs for maintaining Ortviken site SEK ~20m per quarter 1 100 Creates opportunity for further NBSK expansion at Östrand Investment Base Investment Base Investment Note: Assuming CTMP trend price of 528 USD/t 13 1) To be reported in segment Other
+2-3% -5-10% +2-3% +2-3% Growing Forest asset Wood Publication Paper Pulp Kraftliner Harvesting own forest (k m 3 ) Capacity (m m 3 ) Capacity (kt) Capacity (kt) Capacity (kt) + 1,100 k m 3 + 200k m 3 - 1,810 kt + 880 kt + 340 kt 1,140 2,300 1,400 5,400 1,810 2,200 2,100 Further 200 potential 4,300 4,300 865 1,000 800 775 From 11 to 5 520 1,200 sawmills 0 2010 2020 2025 2010 2020 2025 2010 2020 2025 2010 2020 2025 2010 2020 2025 15 +[]% = Annual market growth / decline
NBSK CTMP • Produced by cooking wood chips in white liquor • Produced by grinding wood chips in a refiner • Gives pulp with long, strong fibers • Gives shorter, stiffer fibers that provide absorption capacity, bulk and stiffness to paper products • Possible to bleach to full brightness with no yellowing effect • Not possible to bleach to full brightness • Provides high strength and brightness to paper • Lower consumption of wood per ton pulp products • No energy surplus • Higher consumption of wood per ton pulp • Creates a energy surplus Raw material Pine and spruce (softwood) Both softwood and hardwood 100k tonnes today at Östrand (to be closed) SCA capacity 900k tonnes at Östrand 300k tonnes tomorrow at Ortviken 17
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 uncertainties.
Recommend
More recommend
