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Billerud Interim Report Q1 2012 presentation
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1
INTERIM REPORT | JANUARY-MARCH 2012
Per Lindberg, CEO and President, and Susanne Lithander, CFO | 26 April, 2012
2
AGENDA
• Highlights
• Development by Business Area
• Financials
• Outlook
3
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
4
INCREASED SALES DUE TO HIGHER VOLUMES
+10%
NET SALES
2 086 2 291
0
500
1 000
1 500
2 000
2 500
Q4 -11 Q1 -12
Net
sal
es, M
SEK
SALES VOLUME
315 360
050
100150200250300350400
Q4 -11 Q1 -12
Sale
s vo
lum
e, k
tonn
es
+14%
5
PACKAGING & SPECIALITY PAPER Kraft & Sack Paper
PACKAGING BOARDS S/C Fluting, Liner, Liquid Board
MARKET PULP Nordic Bleached Softwood Kraft Pulp
BUSINESS AREAS & SEGMENTS
Note: Graph shows sales breakdown per business area for Q1 2012.
6
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
7
PACKAGING & SPECIALITY PAPER Financials – Q1 2012 vs. Q4 2011
• Operating profit up by MSEK 35
• Mainly due to higher sales volumes and lower variable costs
0
20
40
60
80
100
120
140
160
Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 - 12
Ope
ratin
g pr
ofit,
MS
EK
Q1 -12 Q4 -11 Q1 -11 FY 2011
Net sales, MSEK 1,091 941 1,217 4,293
Operating profit, MSEK 100 65 140 450
Operating margin, % 9 7 12 10
8
PACKAGING BOARDS Market situation in Q1 2012
• Somewhat improved order situation ‒ Slightly lower levels than normal
• Price cuts halted
9
PACKAGING BOARDS Financials – Q1 2012 vs. Q4 2011
• Operating profit down by MSEK 4
• Lower prices were partly offset by higher sales volumes and lower costs
0
20
40
60
80
100
120
140
Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 - 12
Ope
ratin
g pr
ofit,
MS
EK
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
10
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
11
MARKET PULP Financials – Q1 2012 vs. Q4 2011
• Operating profit improved by MSEK 8
• Higher sales volumes and lower fixed costs compensated for lower prices
-30
-20
-10
0
10
20
30
40
50
Q1 -11 Q2 -11 Q3 -11 Q4 -11 Q1 -12
Ope
ratin
g pr
ofit,
MS
EK
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
12
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
13
FINANCIAL INFORMATION
14
QUARTERLY KEY FIGURES
Q1 -12 Q4 -11 Q1 -11
Net sales, MSEK 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
Sales volume (ktonnes) 360 315 369
15
OPERATING PROFIT BRIDGE Q1 2012 vs. Q4 2011
* Includes product mix.
75
142+69
-56
-24
+37
+41 0
0
20
40
60
80
100
120
140
160
Operatingprofit
Q4 2011
Sales &productionvolumes*
Selling prices(in respective
sales currency)
Effects ofexchange ratefluctuations,incl. hedging
Change invariable costs
Change infixed costs
Change indepreciation
Operatingprofit
Q1 2012
MS
EK
16
CASH FLOW GENERATION FROM OPERATION
1) Minus equals increase in net debt
MSEK Q1 -12
Q4 -11
Q1 -11
Operating surplus, etc 298 238 481
Change in working capital, etc. 22 48 -301
Net financial items, taxes, etc. -202 -12 -181
Cash flow from operating activities 118 274 -1
Current net investments -155 -178 -82
Operating cash flow -37 96 -83
17
WORKING CAPITAL KEY RATIOS
Overdue Days sales outstanding WC as % of quarterly sales
0
10
20
30
40
50
60
70
DSO
day
s
0,0
1,0
2,0
3,0
4,0
5,0
6,0%
of t
otal
rece
ivab
les
0%
10%
20%
30%
40%
50%
60%
70%
Wor
king
cap
ital (
excl
. IAS
)/qua
rtely
net
turn
over
18
80
100
120
140
160
2004 Q4 -05
Q4 -06
Q4 -07
Q4 -08
Q4 -09
Q4 -10
Q4 -11
80120160200240280
2004 Q4 -05
Q4 -06
Q4 -07
Q4 -08
Q4 -09
Q4 -10
Q4 -11
Electricity index (Sweden*) Wood price index
Source: Nordpool. *Price area Sweden Source: Billerud
MARKET PRICES AFFECTING RESULT
19
MARKET PRICES AFFECTING RESULT
550600650700750800850900950
1 0001 050
2004 Q4 -05
Q4 -06
Q4 -07
Q4 -08
Q4 -09
Q4 -10
Q4 -11
9497
100103106109112115118
2004 Q4 -05
Q4 -06
Q4 -07
Q4 -08
Q4 -09
Q4 -10
Q4 -11
Market pulp (USD/t) TCW index*
Note: Average price for the quarter Source: Riksbanken *Total Competitiveness Weights Index
20
CURRENCY SITUATION
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.
• 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:
49%
49%
50%
GBP
USD
EUR
21
OUTLOOK
22
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.
23
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.
24
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.