INTERIM REPORT | JANUARY-MARCH 2012
Per Lindberg, CEO and President, and Susanne Lithander, CFO | 26 April, 2012
1
AGENDA
• Highlights
• Development by Business Area
• Financials
• Outlook
2
HIGHLIGHTS IN Q1 2012
• Increase in net sales and sales volumes vs. Q4 2011
• Operating profit of MSEK 142, 6% operating margin
• Non-recurring costs of MSEK 14
• Price cuts halted
‒ ~2% lower prices in local currency for packaging paper
‒ ~25 USD/tonne price increase for NBSK pulp in Europe
• Price increases announced for sack and kraft papers
• Lower wood costs
3
INCREASED SALES DUE TO HIGHER VOLUMES
+10%
2 000
1 500
1 000
2 086
2 291
Q4 -11
Q1 -12
500
0
Sales volume, ktonnes
Net sales, MSEK
2 500
NET SALES
400
350
300
250
200
150
100
50
0
SALES VOLUME
+14%
315
360
Q4 -11
Q1 -12
4
BUSINESS AREAS & SEGMENTS
PACKAGING &
SPECIALITY PAPER
Kraft & Sack Paper
PACKAGING BOARDS
S/C Fluting, Liner, Liquid Board
MARKET PULP
Nordic Bleached
Softwood Kraft Pulp
Note: Graph shows sales breakdown per business area for Q1 2012.
5
PACKAGING & SPECIALITY PAPER
Market situation in Q1 2012
• Improved order situation vs. Q4 2011
• Sack paper had higher order levels than normal while kraft
paper was at normal levels towards the end of Q1
• Price cuts halted
• 80 EUR/tonne in price increase announced from 1 June for
sack and kraft papers
6
PACKAGING & SPECIALITY PAPER
Financials – Q1 2012 vs. Q4 2011
160
• Operating profit up by MSEK 35
• Mainly due to higher sales volumes
and lower variable costs
Operating profit, MSEK
140
120
100
80
60
40
20
0
Net sales, MSEK
Operating profit, MSEK
Operating margin, %
Q1 -11
Q2 -11
Q3 -11
Q4 -11
Q1 -12
Q4 -11
Q1 -11
FY 2011
1,091
941
1,217
4,293
100
65
140
450
9
7
12
10
Q1 - 12
7
PACKAGING BOARDS
Market situation in Q1 2012
• Somewhat improved order situation
‒ Slightly lower levels than normal
• Price cuts halted
8
PACKAGING BOARDS
Financials – Q1 2012 vs. Q4 2011
• Lower prices were partly offset by
higher sales volumes and lower
costs
120
Operating profit, MSEK
• Operating profit down by MSEK 4
140
100
80
60
40
20
0
Q1 -11
Q2 -11
Q3 -11
Q4 -11
Q1 -12
Q4 -11
Q1 -11
FY 2011
Net sales, MSEK
663
644
728
2,772
Operating profit, MSEK
56
60
97
370
Operating margin, %
8
9
13
13
Q1 - 12
9
MARKET PULP
Market situation in Q1 2012
• Pulp market improved vs. Q4 2011
• Price increased to ~850 USD/tonne at end of Q1 2012 from
~825 USD/tonne at end of Q4 2011
• Price increase to 870 USD/tonne announced for April
10
MARKET PULP
Financials – Q1 2012 vs. Q4 2011
50
• Operating profit improved by MSEK 8
Operating profit, MSEK
• Higher sales volumes and lower fixed
costs compensated for lower prices
40
30
20
10
0
-10
Q1 -11
Q2 -11
Q3 -11
Q4 -11
Q1 -12
-20
-30
Q1 -12
Q4 -11
Q1 -11
FY 2011
Net sales, MSEK
436
416
436
1,752
Operating profit, MSEK
-16
-24
38
64
Operating margin, %
-4
-6
9
4
11
Q1 2012 IN SUM
• 10% increase in net sales due to higher sales volumes
(vs. Q4 2011)
• Operating profit of MSEK 142, 6% operating margin
• Non-recurring costs of MSEK 14
• Price cuts halted
• Price increases announced for sack and kraft papers
• Lower wood costs
• Closing of the deal with UPM-Kymmene anticipated to
take place in Q2 2012
12
FINANCIAL INFORMATION
13
QUARTERLY KEY FIGURES
Q1 -12
Q4 -11
Q1 -11
2,291
2,086
2,547
Operating profit, MSEK
142
75
332
Operating margin
6%
4%
13%
Profit/share, SEK
0.94
0.44
2.28
Net debt/equity ratio
-0.04
-0.05
0.05
360
315
369
Net sales, MSEK
Sales volume (ktonnes)
14
OPERATING PROFIT BRIDGE Q1 2012 vs. Q4 2011
160
+69
140
+41
0
Change in
fixed costs
Change in
depreciation
142
120
+37
MSEK
100
80
-56
75
60
-24
40
20
0
Operating
profit
Q4 2011
* Includes product mix.
Sales &
production
volumes*
Selling prices
Effects of
Change in
(in respective exchange rate variable costs
sales currency) fluctuations,
incl. hedging
Operating
profit
Q1 2012
15
CASH FLOW GENERATION FROM OPERATION
MSEK
Operating surplus, etc
Change in working capital, etc.
Net financial items, taxes, etc.
Cash flow from operating activities
Current net investments
Operating cash flow
1)
Minus equals increase in net debt
Q1 -12
Q4 -11
Q1 -11
298
238
481
22
48
-301
-202
-12
-181
118
274
-1
-155
-178
-82
-37
96
-83
16
WORKING CAPITAL KEY RATIOS
Overdue
WC as % of quarterly sales
70
6,0
70%
60
5,0
40
30
20
% of total receivables
DSO days
50
4,0
3,0
2,0
10
1,0
0
0,0
Working capital (excl. IAS)/quartely net turnover
Days sales outstanding
60%
50%
40%
30%
20%
10%
0%
17
MARKET PRICES AFFECTING RESULT
Wood price index
Electricity index (Sweden*)
280
160
240
140
200
120
160
100
120
80
2004 Q4 05
Q4 06
Q4 07
Q4 08
Source: Nordpool. *Price area Sweden
Q4 09
Q4 10
Q4 11
80
2004
Q4 05
Q4 06
Q4 07
Q4 08
Q4 09
Q4 10
Q4 11
Source: Billerud
18
MARKET PRICES AFFECTING RESULT
TCW index*
Market pulp (USD/t)
1 050
1 000
950
900
850
800
750
700
650
600
550
2004
Q4 05
Q4 06
Q4 07
Note: Average price for the quarter
Q4 08
Q4 09
Q4 10
Q4 11
118
115
112
109
106
103
100
97
94
2004 Q4 05
Q4 06
Q4 07
Q4 08
Q4 09
Q4 10
Q4 11
Source: Riksbanken *Total Competitiveness Weights Index
19
CURRENCY SITUATION
• Profit effect of net flow hedging MSEK 44 (99) for Q1 2012
• Market value of outstanding contracts not relating to trade
receivable was MSEK 38*
Hedge level 12 months forward:
EUR
50%
USD
49%
GBP
49%
Average hedged currency rates (share of net flow)
Q2 -12
Q3 -12
Q4 -12
Q1 -13
Total 12
months
9.19
9.16
9.10
8,99
9.15
(83%)
(65%)
(41%)
(14%)
(50%)
6.74
6.81
6.88
6.82
6.79
(84%)
(57%)
(38%)
(16%)
(49%)
10.58
10.68
10.74
10.71
10.65
(83%)
(62%)
(36%)
(16%)
(49%)
Note: Data in table and graph are as of 31 March 2012. *As of 31 March 2012.
20
OUTLOOK
21
OUTLOOK
• The market shows signs of an upturn during the second quarter.
• The order situation in the packaging paper segments improved in the
first quarter, compared to the previous one, and had at the beginning
of the second quarter on average returned to normal levels. It is
anticipated that the order situation will remain good in the next quarter.
• Price cuts in the packaging paper segments halted during the quarter.
• Price rises have during the quarter been announced in certain product
categories and a price increase of 8-10% for sack and kraft paper was
announced after the end of the quarter, to take effect on 1 June 2012.
22
OUTLOOK CONT.
• Acquisition-related non-recurring costs will be charged to results in the
quarter in which the acquisition of UPM-Kymmene’s packaging paper
business will be completed. These costs are estimated to an additional
approximately SEK 15 million. Added to this figure will be non-recurring
costs, already disclosed, estimated at approximately SEK 22 million to
separate off the business acquired. The costs will accrue over the three
remaining quarters of the year.
• Wood prices are anticipated to be lower in 2012 than in 2011.
23
Q&A
We believe in embracing what is important to our customers, our company,
our employees and the environment. By always giving back more than we take,
we are building a company for future generations.
24