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Billerud Interim Report Jan-Jun 2012. Analyst and pressconference at 11:00 CET. Webcast link on www.billerud.com

Billerud Interim Report Jan-Jun 2012. Analyst and pressconference at 11:00 CET. Webcast link on www.billerud.com

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  • 1. INTERIM REPORT | JANUARY-JUNE 2012Per Lindberg, CEO and President, and Susanne Lithander, CFO | 19 July, 2012 1
  • 2. AGENDA • Highlights • Development by Business Area • Financials • Outlook 2
  • 3. HIGHLIGHTS IN Q2 2012 • Increase in net sales and sales volumes vs. Q1 2012 • Operating profit of MSEK 161, 7% operating margin • Increase in EBIT for all business areas vs. Q1 2012 • Non-recurring costs of MSEK 38 • Stable order books at normal levels for packaging paper • Stable prices in local currency for the Group vs. Q1 2012 • Acquired Finnish operation included as from 1 June 2012 • Combination with Korsnäs announced 3
  • 4. INCREASED OPERATING PROFIT FOR ALLBUSINESS AREASMSEK 250 NET SALES SALES VOLUME 212 200 +10% +51% +14% 140 150 135 100 100 50 67 56 0 10 -16 Q1 -12 Q2 -12 -50 MP PB PSP 4
  • 5. ADJUSTED OPERATING PROFITMSEK 250 199 200 38 156 150 14 100 161 142 50 0 Q1 -12 Q2 -12 Operating profit Non-recurring costs 5
  • 6. THREE BUSINESS AREAS BECOMES TWO IN Q3Packaging & Packaging Boards Market PulpSpeciality Paper X 6
  • 7. PACKAGING & SPECIALITY PAPERMarket situation in Q2 2012 • Stable order situation for kraft paper and somewhat weaker order situation for sack paper at the end of Q2 vs. Q1 2012 • Normal order levels • Stable prices in local currency with a certain improvement towards end of Q2 • Implementation of price increase continues 7
  • 8. PACKAGING & SPECIALITY PAPERFinancials – Q2 2012 vs. Q1 2012 160 • Operating profit up by MSEK 35 140 Operating profit, MSEK 120 • Higher sales volumes as a result of 100 the acquisition and lower variable 80 costs 60 40 20 0 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q2 -12 Q2 -12 Q1 -12 Q2 -11 FY 2011 Net sales, MSEK 1,277 1,091 1,079 4,293 Operating profit, MSEK 135 100 102 450 Operating margin, % 11 9 9 10 8
  • 9. PACKAGING BOARDSMarket situation in Q2 2012 • Somewhat improved order situation • Normal order levels for most products • Lower average prices in local currency vs. Q1 2012 due to a changed customer and geographical mix • Implementation of price announcement for Billerud’s fluting was made more difficult due to falling prices for recycled fibre-based fluting 9
  • 10. PACKAGING BOARDSFinancials – Q2 2012 vs. Q1 2011 140 • Operating profit up by MSEK 11 120 Operating profit, MSEK • Higher sales volumes and lower 100 variable costs compensated for lower 80 average prices and higher fixed 60 costs 40 20 0 Q2 -11 Q3 -11 Q4 -11 Q1 - 12 Q2 -12 Q2 -12 Q1 -12 Q2 -11 FY 2011 Net sales, MSEK 674 663 704 2,772 Operating profit, MSEK 67 56 94 370 Operating margin, % 10 8 13 13 10
  • 11. MARKET PULPMarket situation in Q2 2012 • Unchanged balance between supply and demand • Producers’ pulp stocks relatively stable • Price decreased to ~830 USD/tonne at end of Q2 2012 from ~850 USD/tonne at end of Q1 2012 11
  • 12. MARKET PULPFinancials – Q2 2012 vs. Q1 2012 40 • Operating profit up by MSEK 26 30 Operating profit, MSEK • Improved average prices in local 20 currency, an improved currency 10 situation and lower variable costs 0 Q2 -11 Q3 -11 Q4 -11 Q1 -12 Q2 -12 -10 -20 -30 Q2 -12 Q1 -12 Q2 -11 FY 2011 Net sales, MSEK 391 436 435 1,752 Operating profit, MSEK 10 -16 20 64 Operating margin, % 3 -4 5 4 12
  • 13. BILLERUDKORSNÄS- A WORLD CLASS PACKAGING MATERIALS COMPANYCombining two leading …into a new entity …with the aim to create:Swedish packaging under very strongmaterials companies… brand names… ● Strengthened offering of primary fibre- based packaging materials ● Complete and well balanced product portfolio ● Leading positions within cartonboard, containerboard and packaging paper ● Knowledge base to enhance innovation and smarter solutions ● Strong positions in Food & Beverage, Consumer Goods and Industrial ● Annual synergies of MSEK ~300 identified ● Attractive shareholder returns 13
  • 14. Q2 2012 IN SUM • Increase in net sales and sales volumes, partly due to acquisition • Increase in EBIT for all business areas vs. Q1 2012 • Non-recurring costs of MSEK 38 • Stable order books at normal levels for packaging paper • Stable prices in local currency for the Group vs. Q1 2012 • Acquired Finnish operation included as from 1 June 2012 • Combination of Korsnäs announced 14
  • 15. FINANCIAL INFORMATION 15
  • 16. QUARTERLY KEY FIGURES Q2 -12 Q1 -12 Q2 -11Net sales, MSEK 2,440 2,291 2,383Operating profit, MSEK 161 142 275Operating margin 7% 6% 12%Profit/share, SEK 1.14 0.94 1.88Net debt/equity ratio 0.23 -0.04 0.06Sales volume (ktonnes) 374 360 335 16
  • 17. OPERATING PROFIT BRIDGE Q2 2012 vs. Q1 2012 300 +46 250 +17 +57 200 -4 161MSEK 150 -94 -3 142 100 50 0 Operating Sales & Selling prices Effects of Change in Change in Change in Operating profit production (in respective exchange rate variable costs fixed costs depreciation profit Q1 2012 volumes* sales currency) fluctuations, Q2 2012 incl. hedging* Includes product mix. 17
  • 18. JANUARY-JUNE KEY FIGURES Jan-Jun 2012 Jan-Jun 2011 vs. 2011Net sales, MSEK 4,731 4,930 -4%Operating profit, MSEK 303 607 -50%Operating margin 6% 12% -6 p.p.Profit/share, SEK 2.08 4.16 -50%Net debt/equity ratio 0.23 0.06 -0.17Sales volume (ktonnes) 734 704 +4% 18
  • 19. OPERATING PROFIT BRIDGE JAN-JUN 2012 vs. JAN-JUN 2012 800 700 +61 607 600 500MSEK 400 +105 +1 303 300 -365 -59 -47 200 100 0 Operating Sales & Selling prices Effects of Change in Change in Change in Operating profit production (in respective exchange rate variable costs fixed costs depreciation profit Jan-Jun 2011 volumes* sales currency) fluctuations, Jan-Jun 2012 incl. hedging* Includes product mix. 19
  • 20. CASH FLOW GENERATION FROM OPERATIONMSEK Jan-Jun Jan-Jun Q2 -12 Q1 -12 Q2 -11 2012 2011Operating surplus, etc 316 298 421 614 902Change in working capital, etc. -54 22 57 -32 -244Net financial items, taxes, etc. -50 -202 -10 -252 -191Cash flow from operating 212 118 468 330 467activitiesCurrent net investments -1,145 -155 -129 -1,300 -211Operating cash flow -933 -37 339 -970 256 20
  • 21. MARKET PRICES AFFECTING RESULTElectricity index (Sweden*) Wood price index280 160240 140200 120160120 100 80 80 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11Source: Nordpool. *Price area Sweden Source: Billerud 21
  • 22. MARKET PRICES AFFECTING RESULTMarket pulp (USD/t) TCW index* 118 1 050 1 000 115 950 112 900 850 109 800 106 750 103 700 650 100 600 97 550 94 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 2004 Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - Q4 - 05 06 07 08 09 10 11 05 06 07 08 09 10 11Note: Average price for the quarter Source: Riksbanken *Total Competitiveness Weights Index 22
  • 23. CURRENCY SITUATION • Profit effect of net flow hedging MSEK -5 (52) for Q2 2012 and MSEK 38 (151) for Jan-Jun 2012 • Market value of outstanding contracts not relating to trade receivable was MSEK 24* Average hedged currency rates (share of net flow) Hedge level 12 months forward: Q3 -12 Q4 -12 Q1 -13 Q2 -13 Total 12 months EUR 44% 9.11 9.06 9.02 9.04 9.07 (79%) (53%) (32%) (12%) (44%) 6.85 6.90 6.95 7.07 6.90 USD 47% (79%) (58%) (37%) (12%) (47%) 10.82 10.92 10.87 11.10 10.88 GBP 51% (89%) (62%) (35%) (16%) (51%)Note: Data in table and graph are as of 30 June 2012. *As of 30 June 2012. 23
  • 24. OUTLOOK 24
  • 25. OUTLOOK • At the beginning of the third quarter 2012, the order situation in the packaging paper segments was on average normal and is anticipated to remain stable over the next quarter • It is expected that price rises in sack and kraft paper, announced in the second quarter 2012, will show through in the second half of 2012 • Non-recurring transaction costs pertaining to the combination with Korsnäs are thought likely to total approximately SEK 50 million, the major part of which is expected to be charged to the quarter in which the combination will take place. Added to these costs, financing and integration costs of a non-recurring kind will be incurred after the transaction is completed • Wood prices are anticipated to be lower in 2012 than in 2011 25
  • 26. 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. 26