INTERIM REPORTJANUARY-MARCH 2011Per Lindberg, President and CEOBertil Carlsén, CFO20 April, 2011                    1
AGENDA• Highlights• Development by Business Area• Financials• Outlook                           2
HIGHLIGHTS IN Q1 2011• Strong Q1 results  » Operating profit of MSEK 332, margin 13%  » Top line growth of 12% vs. Q4• Sal...
CONTINUED INCREASE IN NET SALES & EBIT                    Net sales                                             EBIT      ...
BUSINESS AREAS & SEGMENTSPACKAGING &                                 PACKAGING BOARDSSPECIALITY PAPER                     ...
PACKAGING & SPECIALITY PAPERMarket situation in Q1 2011• Continued very good order  situation for the season for sack  pap...
PACKAGING & SPECIALITY PAPERFinancials – Q1 2011 vs. Q4 2010                                                   160• Operat...
PACKAGING BOARDSMarket situation in Q1 2011• Continued stable order situation  throughout the quarter• Increased price lev...
PACKAGING BOARDSFinancials – Q1 2011 vs. Q4 2010                                                      140• Operating profi...
MARKET PULPMarket situation in Q1 2011• Pulp market balance remained  stable• Price level in Europe increased  during Q1  ...
MARKET PULPFinancials – Q1 2011 vs. Q4 2010                                                      120                      ...
Q1 IN SUM• Strong Q1 results    » Both in terms of margin and net sales      growth    » Sales volume record – 369 ktonnes...
FINANCIALS             13
QUARTERLY KEY FIGURES                                                       vs. Q4    vs. Q1                         Q1 20...
EBIT BRIDGE Q1 2011 vs. Q4 2010       450                                            +46       400                        ...
CONTINUED STRONG MARGIN TREND                                     14%                                     13%             ...
CASH FLOW     MSEK                                                 Q1 2011   Q1 2010     Operating surplus, etc           ...
DSO days     09       01                0                       10                               20                       ...
MARKET PRICES AFFECTING RESULT         Electricity index (Sweden*)                                                Wood pri...
CURRENCY EFFECT OF A STRONGER SEK         Average rate   Average rate    Spot rate      vs.         vs.           Q1 2011 ...
CURRENCY SITUATION• Profit effect of net flow hedging  MSEK 99 for Q1 2011 (117)                             Apr-Jun      ...
OUTLOOK          22
OUTLOOK FY 2011• The order situation remains good or  very good in most of Billerud’s  packaging paper areas. This provide...
Q&A      24
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Billerud Interim Report Q1 2011 presentation

  1. 1. INTERIM REPORTJANUARY-MARCH 2011Per Lindberg, President and CEOBertil Carlsén, CFO20 April, 2011 1
  2. 2. AGENDA• Highlights• Development by Business Area• Financials• Outlook 2
  3. 3. HIGHLIGHTS IN Q1 2011• Strong Q1 results » Operating profit of MSEK 332, margin 13% » Top line growth of 12% vs. Q4• Sales volume record – 369 ktonnes• Continued strong results for packaging paper » Strong order situation• Good results in Market Pulp » Pulp market balance remained stable 3
  4. 4. CONTINUED INCREASE IN NET SALES & EBIT Net sales EBIT 3 000 400 350 2 500 +2% +12% 300 2 000 250MSEK MSEK 1 500 200 2 547 332 326 2 279 150 1 000 100 500 50 0 0 Oct-Dec 2010 Jan-Mar 2011 4 Oct-Dec 2010 Jan-Mar 2011
  5. 5. BUSINESS AREAS & SEGMENTSPACKAGING & PACKAGING BOARDSSPECIALITY PAPER S/C Fluting, Liner, Liquid BoardKraft & Sack Paper MARKET PULP Nordic Bleached Softwood Kraft PulpNote: Graph shows sales breakdown perbusiness area for Jan-Mar 2011. 5
  6. 6. PACKAGING & SPECIALITY PAPERMarket situation in Q1 2011• Continued very good order situation for the season for sack paper and slightly below Q1 2010 Consumer level for kraft paper Building & construction• Increased price level in local currency for most products vs. Q4 Food• Additional price increases have been announced 6
  7. 7. PACKAGING & SPECIALITY PAPERFinancials – Q1 2011 vs. Q4 2010 160• Operating profit up by MSEK 9 140 120• +24% increase in sales volume EBIT, MSEK 100• Price improvements and higher 80 60 sales compensated for a stronger 40 SEK and higher variable costs 20 0 Q1 Q2 Q3 Q4 Q1 2010 2011 Q1 2011 Q4 2010 Q1 2010 FY 2010 Net sales, MSEK 1,217 1,020 1,052 4,166 Operating profit, MSEK 140 131 96 417 Operating margin, % 12 13 9 10 7
  8. 8. PACKAGING BOARDSMarket situation in Q1 2011• Continued stable order situation throughout the quarter• Increased price level in local currency for most products vs. Q4• Additional price increases have been announced 8
  9. 9. PACKAGING BOARDSFinancials – Q1 2011 vs. Q4 2010 140• Operating profit down by MSEK 25 120 100 EBIT, MSEK• +12% increase in sales volume 80 60• Price improvements and higher 40 20 sales compensated partly for a 0 stronger SEK and higher variable -20 Q1 Q2 Q3 Q4 Q1 costs 2010 2011 Q1 2011 Q4 2010 Q1 2010 FY 2010 Net sales, MSEK 728 648 613 2,428 Operating profit, MSEK 97 122 56 271 Operating margin, % 13 19 9 11 9
  10. 10. MARKET PULPMarket situation in Q1 2011• Pulp market balance remained stable• Price level in Europe increased during Q1 » 980 USD/ton end of Q1 vs. 950 USD/ton end of Q4• An additional price increase has been announced » 1 010 USD/ton as of April 1, 2011 10
  11. 11. MARKET PULPFinancials – Q1 2011 vs. Q4 2010 120 100• Operating profit down by MSEK 15 80 EBIT, MSEK 60• Stronger SEK and increased 40 variable costs 20 0 -20 -40 Q1 Q2 Q3 Q4 Q1 2010 2011 Q1 2011 Q4 2010 Q1 2010 FY 2010 Net sales, MSEK 436 450 384 1,731 Operating profit, MSEK 38 53 31 276 Operating margin, % 9 12 8 16 11
  12. 12. Q1 IN SUM• Strong Q1 results » Both in terms of margin and net sales growth » Sales volume record – 369 ktonnes• Continued strong results for packaging paper• Product and business development continues 12
  13. 13. FINANCIALS 13
  14. 14. QUARTERLY KEY FIGURES vs. Q4 vs. Q1 Q1 2011 Q4 2010 Q1 2010 2010 2010Sales volume (ktonnes) 369 323 343 +14% +8%Net sales, MSEK 2,547 2,279 2,190 +12% +16%Operating profit, MSEK 332 326 234 +2% +42%Operating margin 13% 14% 11% -1 p.p. +2 p.p.Profit/share, SEK 2.28 2.19 1.52 +4% +50%Net debt/equity ratio 0.05 0.03 0.24 -0.02 +0.19 14
  15. 15. EBIT BRIDGE Q1 2011 vs. Q4 2010 450 +46 400 +51 350 -75 +13 332 326 +49 300 -78 250MSEK 200 150 100 50 0 EBIT Sales & Selling prices Effects of Change in Change in Change in EBIT Q4 2010 production (in respective exchange rate variable costs fixed costs depreciation Q1 2011 volumes* sales fluctuations, currency) incl. hedging * Includes product mix. 15
  16. 16. CONTINUED STRONG MARGIN TREND 14% 13% 12%EBIT margin, rolling 12 months (%) 11% 10% Financial target 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% FY 06 FY 07 FY 08 FY 09 FY 10 -2% 16
  17. 17. CASH FLOW MSEK Q1 2011 Q1 2010 Operating surplus, etc 481 379 Change in working capital, etc. -301 -88 Net financial items, taxes, etc. -181 -30 Cash flow from operating activities -1 261 Current net investments -82 -50 Business combinations - - Operating cash flow -83 211 Dividend - - Other items, not affecting cash flow -6 -35 Change in net debt 1) -89 1761) Minus equals increase in net debt 17
  18. 18. DSO days 09 01 0 10 20 30 40 50 60 70 09 31 04 09 30 07 09 31 10 10 31 01 10 31 04 10 30 DSO 07 10 31 10 11 31 01 31 % of total receivables 09 01 0,0 1,0 2,0 3,0 4,0 5,0 6,0 09 31 04 09 30 07 09 31 10 10 31 01 10 3118 04 10 30 07 Overdue 10 31 10 11 31 01 31 WORKING CAPITAL KEY RATIOS Working capital (excl. IAS)/quartely net turnover 0% 10% 20% 30% 40% 50% 60% 70% 09 03 09 06 09 09 09 12 10 03 10 06 10 09 10 12 11 03 WC as % of quarterly sales
  19. 19. MARKET PRICES AFFECTING RESULT Electricity index (Sweden*) Wood price index 160 280 150 240 140 130 200 120 160 110 100 120 90 80 80 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2005 2006 2007 2007 2008 2009 2010 2010 2005 2006 2007 2007 2008 2009 2010 2010 Source: Nordpool. *Price area Sweden Source: Billerud Market Pulp (USD/t) TCW index1 000 118 950 115 900 112 850 109 800 106 750 103 700 650 100 600 97 550 94 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2005 2006 2007 2007 2008 2009 2010 2010 2005 2006 2007 2007 2008 2009 2010 2010 Note: Average price for the quarter Source: Riksbanken 19
  20. 20. CURRENCY EFFECT OF A STRONGER SEK Average rate Average rate Spot rate vs. vs. Q1 2011 Q4 2010 17 Apr 2011 Q4 2010 17 Apr 2011 EUR 8.87 9.22 8.96 -4% -1% USD 6.48 6.78 6.26 -4% +4% GBP 10.39 10.72 10.21 -3% +2%How do we manage?• Price increases• Hedging in the short-run• Customer and market mix to some extent 20
  21. 21. CURRENCY SITUATION• Profit effect of net flow hedging MSEK 99 for Q1 2011 (117) Apr-Jun Jul-Sep Oct-Dec Jan-Mar Total 12 2011 2011 2011 2012 months• Market value of outstanding Average Average Average Average Average contracts not relating to hedged hedged hedged hedged hedged accounts receivables was currency currency currency currency currency rates rates rates rates rates MSEK 132 (as of 31/3-11) (hedged net (hedged net (hedged net (hedged net (hedged net• Hedge level 12 months flows) flows) flows) flows) flows) forward: 9.23 9.19 9.41 9.48 9.31EUR 58% (85%) (51%) (49%) (47%) (58%) 7.12 7.50 6.82 6.60 7.14USD 50% (88%) (61%) (35%) (16%) (50%) 10.79 10.77 10.74 10.64 10.76GBP 51% (86%) (54%) (42%) (20%) (51%)Note: Data in table and graph are as of 31 March 2011 21
  22. 22. OUTLOOK 22
  23. 23. OUTLOOK FY 2011• The order situation remains good or very good in most of Billerud’s packaging paper areas. This provides conditions for a stable development within Billerud’s packaging paper and packaging paper solutions segments.• Price increases announced in the first quarter of 2011 are expected to have an impact in the coming quarters.• The effects of a stronger SEK will be largely compensated by currency hedges. 23
  24. 24. Q&A 24
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