Per Lindberg, CEO and President, and Susanne Lithander, CFO
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Transcript of Per Lindberg, CEO and President, and Susanne Lithander, CFO
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Per Lindberg, CEO and President, and Susanne Lithander, CFO
Carnegie Small & Mid Cap Seminar | September 2014
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WE CHALLENGE CONVENTIONAL PACKAGING FOR A
SUSTAINABLE FUTURE
BILLERUDKORSNÄS IN FACTS & FIGURES
3
NET SALES (2013)
OPERATING PROFIT(2013)
BeethamFrövi/RockhammarGruvönGävleKarlsborgPietarsaariSkärblackaTervasaari
NUMBER OF EMPLOYEES CONTAINERBOARDShare of net sales
(2013)
CONSUMER BOARDShare of net sales
(2013)
PACKAGING PAPERShare of net sales
(2013)
BUSINESS AREAS
Billion SEK A STRONGER PLATFORMFOR GROWTH ANDPROFITABILITY
WITH A FOCUS ONCUSTOMER VALUE, INNOVATION ANDSUSTAINABILITY
CREATING NETWORKSWITH AN OPEN MIND
PRODUCTION UNITS(packaging paper, consumer board,
containerboard and pulp)
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1.1
4 300 16%
36%
37%
Billion SEK
20
BILLERUDKORSNÄS IN FACTS & FIGURES
4* Of the Group’s net sales 2013
Europe
74%*
Asia
14%*
Middle East
3%*Africa
5%*
South America
2%*
Others
2%*
CREATING A PLATFORM FOR THE FUTURE
5
6
A STRONG PLATFORM WITH INCREASED STABILITYTHE TWO ACQUISITIONS IN 2012 RESULTED IN SIGNIFICANTLY REDUCED MARKET PULP EXPOSURE AND LOWER RELATIVE CURRENCY EXPOSURE
FormerBillerud
BillerudKorsnäs FormerBillerud
BillerudKorsnäs0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
EB
ITD
A m
arg
in
Currency exposure Currency & pulp exposure
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FOCUSING ON PRIMARY FIBRE-BASED PACKAGING MATERIALS
High performance packaging materialsTarget customer segments requiring strong, light and/or pure packaging
Smarter solutionsFocus on value added to customers rather than price
75% of sales going to consumer sectorsFood & Beverages is largest market segment with ~60% of sales
Sustainable innovation is keyConsumers prefer paper over plastics*
*IPSOS, 2007.
OUR MARKETS ARE GROWING FASTER THAN THE AVERAGE PACKAGING MARKET
8Source: PIRA, The Future of Global Packaging - Market forecasts to 2016, Market value in USD, CAGR 2011-2016, LPB: Zetith & Warrick – Global aseptic packaging 2012CTB: Nomura, ICCA, Cartonboard: Pira – The future of Folding cartons 2011-2016, Brown sack paper: BillerudKorsnäs’ estimates.
GLOBAL MARKETBILLERUDKORSNÄS MARKETS
CAGR 3%
CAGR 3%
CAGR 5% CAGR 5%
Liquid packaging board
Cartonboard
Brown sack paper (premium grade)
Containerboard
Packaging
Paper and Board
CAGR 4%
CAGR 3%
OUR ROAD MAP TO SUSTAINABLE PROFITABLE GROWTHGROW IN LINE WITH THE MARKET
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Building a strong platform for
growth
Using innovation to drive
competitiveness
Accelerating growth through
strategic investments
15-20% organic
growth by 2018
ACHIEVING 15-20% ORGANIC GROWTH BY 2018
CONTAINERBOARD
CONSUMER BOARD
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Selective growthTarget growth in selected segments, balancing additional capacity
0-4% CAGR
PACKAGING PAPER
Volume growthIncrease volume in key markets
4-5% CAGR
Value growthIncrease margins on existing portfolio2-4% CAGR
BA market CAGR
BUSINESS MODEL
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A HOLISTIC APPROACH TO CUSTOMER NEEDS
WORLD-CLASS PACKAGING MATERIALSLEADING POSITIONS
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PACKAGING PAPER45*/55
CONSUMER BOARD100*
CONTAINERBOARD94*/6
Kraft paper Liquid Packaging Board Fluting
Sack paper Cartonboard Liner
* Share to Consumer segment** For High-Porosity Sack Paper
#1EUROPE
#2EUROPE and GLOBALLY**
LIQUID PACK. BOARD - ASEPTIC
#1EUROPE and GLOBALLY
LIQUID PACK. BOARD – ALL TYPES
#2EUROPE and GLOBALLY
NSSC FLUTING and PURE WHITE LINER
#1EUROPE
COATED WHITE TOP LINER
#2EUROPE
SOLUTION SERVICES
Comprehensive knowledge of the whole value chain
Strong technical knowledge of packaging designExpert assistance in the areas of packaging optimisation, print support and conversion support
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GLOBAL NETWORK
Packaging manufacturers Machine manufacturers Research institutes
More than 2 000 customers and packaging partners in more than 100 countries
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Packaging material
2–5% of the cost
Packaging material 50–85% of the cost
Packaging manufacturers
MOVING CLOSER TO THE END-CUSTOMER
Brand owners Consumers
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KEY HIGHLIGHTS Q2 2014 INTERIM REPORT NET SALES SEK 5 128 MILLION. ADJUSTED OPERATING PROFIT SEK 467 MILLION
Q2
13
Q1
14
Q2
14
Jan-J
un 13
Jan-J
un 14
0
2,000
4,000
6,000
8,000
10,000
12,000
5,005 5,410 5,128
10,18610,538
Net sales, SEKm
2%- 5%
Q2
13
Q1
14
Q2
14
Jan-J
un 13
Jan-J
un 14
0
200
400
600
800
1,000
1,200
324
555
467
762
1,022
Adj. op. profit, SEKm
44%
- 16%
34%
All 2013 comparable numbers include Bomhus Energi AB.
3%
17
KEY HIGHLIGHTS Q2 2014 INTERIM REPORT CASH FLOW SEK 433 MILLION. ROCE 8%, NET DEBT/EQUITY 0.79
Q2
13
Q2
14
Jan-J
un 13
Jan-J
un 14
0
150
300
450
600
750
900
104
433381
818
Op. cash flow, SEKm
Jan-Jun 13 Jan-Jun 140
2
4
6
8
10
6
8
ROCE, %
Jan-J
un 13
Q1
14
Jan-J
un 14
0.00
0.30
0.60
0.900.91
0.78 0.79
Net debt/equity
All 2013 comparable numbers include Bomhus Energi AB.
ON TRACK TO REACH SYNERGY TARGETS AHEAD OF PLANANNUAL PACE OF MSEK ~490 AS PER END OF Q2 2014
18*Synergies and savings realised in the quarter, compared to if the synergy and savings programme had not been initiated.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42013 2014
0
100
200
300
400
500
600
Quarterly synergies* Annual pace
MS
EK
Target
FOUR FINANCIAL TARGETS
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Operating margin > 10%*Return on Capital Employed > 13%*
Net debt/Equity ratio < 0.9
Dividend policy: 50% of net profit*
* Over a business cycle.
• Achieve ROCE >13%
• Restore margins• Pay down debt
OUR COMMITMENT TO LONG-TERM SHAREHOLDER VALUE
20
Sta
ted
div
iden
d p
oli
cy
Fulfilment Focus areas
Short-term
Long-term
• Achieve profitable growthMid-term
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OUTLOOK
Demand and order situation is expected to remain stable during the third quarter 2014 for all business areas
Average prices in local currency are anticipated to stay on current level for the third quarter 2014 for Packaging Paper and Consumer Board. Pressure on primary fibre based prices within business area Containerboard
Wood prices are expected to stay on current level for the second half of 2014
The target of approximately SEK 530 million in annual synergies and savings is unchanged, and is expected to be reached during 2014. Estimated non-recurring costs for realising the synergies increased to approximately SEK 225 million
Q&A
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