INTERIM REPORT | JANUARY-SEPTEMBER 2011 THE NATURAL PART IN SMARTER PACKAGINGPer Lindberg, CEO and President, and Susanne ...
AGENDA • Highlights • Development by Business Area • Financials • Outlook                                  2
HIGHLIGHTS IN Q3 2011 • Strong earnings     ‒ Operating profit of MSEK 296, margin 13% • Very strong cash flow     ‒ Cash ...
THE NATURAL PART IN SMARTER PACKAGING • Pentawards Best of the Show     ‒ Billerud’s design agency NINE received the world...
STRONG RESULTS FROM BUSINESS AREASBillerud group                                    Business areas             300        ...
BUSINESS AREAS & SEGMENTSPACKAGING &SPECIALITY PAPER                                                               PACKAGI...
PACKAGING & SPECIALITY PAPERMarket situation in Q3 2011  • Order situation for sack and kraft paper continued to    weaken...
PACKAGING & SPECIALITY PAPERFinancials – Q3 2011 vs. Q2 2011                                                              ...
PACKAGING BOARDSMarket situation in Q3 2011  • Order situation weakened to some extent      ‒ Growing uncertainty about de...
PACKAGING BOARDSFinancials – Q3 2011 vs. Q2 2011                                                                140  • Ope...
MARKET PULPMarket situation in Q3 2011  • Weakened pulp market vs. Q2 2011  • Producers’ pulp stocks increased  • Demand r...
MARKET PULPFinancials – Q3 2011 vs. Q2 2011                                                                100  • Operatin...
Q3 2011 IN SUM • Strong earnings     ‒ Operating profit of MSEK 296, margin 13%     ‒ MSEK +76 in higher operating profit ...
FINANCIAL INFORMATION                        14
QUARTERLY KEY FIGURES                         Q3 2011   Q2 2011   Q3 2010Net sales, MSEK           2,327     2,383     2,2...
OPERATING PROFIT BRIDGE Q3 2011 vs. Q2 2011       350                                                                     ...
JANUARY-SEPTEMBER KEY FIGURES                         Jan-Sep 2011 Jan-Sep 2010   vs. 2010Net sales, MSEK             7,25...
WELL ABOVE TARGET FOR OPERATING MARGIN                                          14%Operating margin, rolling 12 months (%)...
09                                                                    DSO days        0                                   ...
STRONG CASH FLOW GENERATION FROM OPERATION      MSEK                                             Q3 2011   Q2 2011   Q3 20...
MARKET PRICES AFFECTING RESULTElectricity index (Sweden*)                              Wood price index280                ...
MARKET PRICES AFFECTING RESULTMarket pulp (USD/t)                                                 TCW index*1,050         ...
CURRENCY SITUATION    • Profit effect of net flow hedging MSEK -5 (119) for Q3 2011 and      MSEK 146 (265) for Jan-Sep 20...
OUTLOOK          24
OUTLOOK FOR FY 2011 • Market development at the start of the fourth quarter was   marked by some uncertainty about demand....
Q&A      26
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Billerud Interim Report Q3 2011 presentation

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Billerud Interim Report Q 3 2011

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Billerud Interim Report Q3 2011 presentation

  1. 1. INTERIM REPORT | JANUARY-SEPTEMBER 2011 THE NATURAL PART IN SMARTER PACKAGINGPer Lindberg, CEO and President, and Susanne Lithander, CFO | 28 October, 2011 1
  2. 2. AGENDA • Highlights • Development by Business Area • Financials • Outlook 2
  3. 3. HIGHLIGHTS IN Q3 2011 • Strong earnings ‒ Operating profit of MSEK 296, margin 13% • Very strong cash flow ‒ Cash flow from operating activities of MSK 531 • Significant increase in earnings for packaging paper • Net cash position • Growing uncertainty about packaging paper demand ‒ Weakened order situation ‒ Stable local prices for packaging paper 3
  4. 4. THE NATURAL PART IN SMARTER PACKAGING • Pentawards Best of the Show ‒ Billerud’s design agency NINE received the world’s finest design award • Design Challenge 2011 ‒ Billerud FibreForm® was rewarded at the largest Nordic packaging fair 4
  5. 5. STRONG RESULTS FROM BUSINESS AREASBillerud group Business areas 300 296 300 292 275 +8% +35% 250 250 216 +40% 200 +35% 200EBIT, MSEK EBIT, MSEK 150 150 100 100 +27% 50 50 +50% 0 0 Apr-Jun 11 Jul-Sep 11 Apr-Jun 11 Jul-Sep 11 Packaging & Speciality Paper Currency hedging, other, etc Packaging Boards Business areas Market Pulp 5
  6. 6. BUSINESS AREAS & SEGMENTSPACKAGING &SPECIALITY PAPER PACKAGING BOARDSKraft & Sack Paper S/C Fluting, Liner, Liquid Board MARKET PULP Nordic Bleached Softwood Kraft PulpNote: Graph shows sales breakdown per business area for July-September 2011. 6
  7. 7. PACKAGING & SPECIALITY PAPERMarket situation in Q3 2011 • Order situation for sack and kraft paper continued to weaken gradually ‒ Seasonality and reduction of stock levels were main reasons • Market-related production shutdowns implemented to restore market balance ‒ Mainly related to sack paper • Stable prices in local currency vs. Q2 2011 • Increased price pressure during the quarter 7
  8. 8. PACKAGING & SPECIALITY PAPERFinancials – Q3 2011 vs. Q2 2011 160 • Operating profit up MSEK 41 140 Operating profit, MSEK 120 • Improved currency situation and 100 lower costs 80 60 • Lower sales volume had a negative 40 impact on operating profit 20 0 Q3 Q4 Q1 Q2 Q3 2010 2011 Q3 2011 Q2 2011 Q3 2010 FY 2010 Net sales, MSEK 1,056 1,079 1,085 4,166 Operating profit, MSEK 143 102 106 417 Operating margin, % 148 9 10 10 8
  9. 9. PACKAGING BOARDSMarket situation in Q3 2011 • Order situation weakened to some extent ‒ Growing uncertainty about demand compared with Q2 2011 • Stable prices in local currency vs. Q2 2011 • Increased price pressure towards the end of Q3 2011 ‒ Related to lower prices for recycled fibre-based grades 9
  10. 10. PACKAGING BOARDSFinancials – Q3 2011 vs. Q2 2011 140 • Operating profit up MSEK 25 120 Operating profit, MSEK • Improved currency situation and 100 lower fixed costs 80 60 40 20 0 Q3 Q4 Q1 Q2 Q3 2010 2011 Q3 2011 Q2 2011 Q3 2010 FY 2010 Net sales, MSEK 696 704 649 2,428 Operating profit, MSEK 119 94 107 271 Operating margin, % 17 13 16 11 10
  11. 11. MARKET PULPMarket situation in Q3 2011 • Weakened pulp market vs. Q2 2011 • Producers’ pulp stocks increased • Demand relatively good vs. Q2 2011 • Price in Europe fell to ~950 USD/tonne at end of Q3 2011 from ~1,025 USD/tonne at end of Q2 2011 11
  12. 12. MARKET PULPFinancials – Q3 2011 vs. Q2 2011 100 • Operating profit up MSEK 10 90 Operating profit, MSEK 80 • Higher sales volume and an 70 60 improved currency situation 50 compensated for less favourable 40 prices in local currency 30 20 10 0 Q3 Q4 Q1 Q2 Q3 2010 2011 Q3 2011 Q2 2011 Q3 2010 FY 2010 Net sales, MSEK 465 435 452 1,731 Operating profit, MSEK 30 20 92 276 Operating margin, % 6 5 20 16 12
  13. 13. Q3 2011 IN SUM • Strong earnings ‒ Operating profit of MSEK 296, margin 13% ‒ MSEK +76 in higher operating profit from business areas • Very strong cash flow • Growing uncertainty about packaging paper demand • Billerud received two of the most recognised packaging awards 13
  14. 14. FINANCIAL INFORMATION 14
  15. 15. QUARTERLY KEY FIGURES Q3 2011 Q2 2011 Q3 2010Net sales, MSEK 2,327 2,383 2,251Operating profit, MSEK 296 275 276Operating margin 13% 12% 12%Profit/share, SEK 2.03 1.88 1.84Net debt/equity ratio -0.03 0.06 0.12Sales volume (ktonnes) 335 335 332 15
  16. 16. OPERATING PROFIT BRIDGE Q3 2011 vs. Q2 2011 350 +57 296 300 275 -9 250 +26 -22 +4 200 -35MSEK 150 100 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 Q2 2011 volumes* sales fluctuations, Q3 2011 currency) incl. hedging* Includes product mix. 16
  17. 17. JANUARY-SEPTEMBER KEY FIGURES Jan-Sep 2011 Jan-Sep 2010 vs. 2010Net sales, MSEK 7,257 6,549 +11%Operating profit, MSEK 903 711 +27%Operating margin 12% 11% +1p.p.Profit/share, SEK 6.19 4.66 +33%Net debt/equity ratio -0.03 0.12 +0.15Sales volume (ktonnes) 1,039 984 +6% 17
  18. 18. WELL ABOVE TARGET FOR OPERATING MARGIN 14%Operating margin, rolling 12 months (%) 12% Financial 10% target 8% 6% 4% 2% 0% FY 06 FY 07 FY 08 FY 09 FY 10 -2% 18
  19. 19. 09 DSO days 0 0 10 20 30 40 50 60 70 09 13 0 1 09 43 0 0 09 73 1 1 10 03 0 1 10 13 0 1 10 43 0 0 10 73 1 1 11 03 0 1 11 13 0 1 11 43 07 0 30 Days sales outstanding % of total receivables 09 01 0.0 1.0 2.0 3.0 4.0 5.0 6.0 09 31 05 09 31 Overdue 09 10 30 01 10 31 05 10 31 09 11 30 01 11 31 05 WORKING CAPITAL KEY RATIOS 11 31 09 30 Working capital (excl. IAS)/quartely net turnover 0% 10% 20% 30% 40% 50% 60% 70% 09 09 09 09 10 10 10 10 11 11 11 03 06 09 12 03 06 09 12 03 06 0919 WC as % of quarterly sales
  20. 20. STRONG CASH FLOW GENERATION FROM OPERATION MSEK Q3 2011 Q2 2011 Q3 2010 Operating surplus, etc 464 421 417 Change in working capital, etc. 83 57 67 Net financial items, taxes, etc. -16 -10 -20 Cash flow from operating activities 531 468 464 Current net investments -121 -129 -113 Operating cash flow 410 339 351 Dividend - -361 - Other items, not affecting cash flow -2 -1 1 Change in net debt 1) 408 -23 3521) Minus equals increase in net debt 20
  21. 21. MARKET PRICES AFFECTING RESULTElectricity index (Sweden*) Wood price index280 160240 140200 120160120 100 80 80 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2005 2006 2007 2007 2008 2009 2010 2010 2011 2005 2006 2007 2007 2008 2009 2010 2010 2011Source: Nordpool. *Price area Sweden Source: Billerud 21
  22. 22. MARKET PRICES AFFECTING RESULTMarket pulp (USD/t) TCW index*1,050 1181,000 115 950 900 112 850 109 800 106 750 103 700 650 100 600 97 550 94 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2004 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2005 2006 2007 2007 2008 2009 2010 2010 2011 2005 2006 2007 2007 2008 2009 2010 2010 2011Note: Average price for the quarter Source: Riksbanken *Total Competitiveness Weights Index 22
  23. 23. CURRENCY SITUATION • Profit effect of net flow hedging MSEK -5 (119) for Q3 2011 and MSEK 146 (265) for Jan-Sep 2011 • Market value of outstanding contracts not relating to account receivables was MSEK -24* Average hedged currency rates (share of net flow) Hedge level 12 months forward: Oct-Dec Jan-Mar Apr-Jun Jul-Sep Total 12 2011 2012 2012 2012 months EUR 47% 9.27 9.38 9.21 9.24 9.30 (84%) (64%) (27%) (14%) (47%) 6.59 6.57 6.57 6.68 6.59 USD 47% (80%) (60%) (29%) (16%) (47%) 10.61 10.60 10.49 10.63 10.59 GBP 48% (87%) (55%) (34%) (13%) (48%)Note: Data in table and graph are as of 30 September 2011. *As of 30 September 2011. 23
  24. 24. OUTLOOK 24
  25. 25. OUTLOOK FOR FY 2011 • Market development at the start of the fourth quarter was marked by some uncertainty about demand. Customers have continued to reduce their packaging paper stock levels, which is having a negative impact on orders. Underlying demand, however, is estimated to be relatively stable in most segments • The start of the fourth quarter has been characterised by continued price pressure • Billerud continues its efforts to increase the proportion of sales of packaging paper solutions, i.e. material combined with services in order to create conditions for a relatively more stable development 25
  26. 26. Q&A 26

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