Stora Enso Interim Review Q2 2012
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Stora Enso Interim Review Q2 2012

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Stora Enso interim review Q2 2012

Stora Enso interim review Q2 2012
presentation published July 20, 2012

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Stora Enso Interim Review Q2 2012 Stora Enso Interim Review Q2 2012 Presentation Transcript

  • Financial Results Q2 2012CEO Jouko Karvinen20 July 2012
  • It should be noted that certain statements herein which are not historical facts. including. withoutlimitation those regarding expectations for market growth and developments; expectations for growthand profitability; and statements preceded by “believes”. “expects”. “anticipates”. “foresees”. or similarexpressions. are forward-looking statements within the meaning of the United States Private SecuritiesLitigation Reform Act of 1995. Since these statements are based on current plans. estimates andprojections. they involve risks and uncertainties which may cause actual results to materially differ fromthose expressed in such forward-looking statements. Such factors include. but are not limited to: (1)operating factors such as continued success of manufacturing activities and the achievement ofefficiencies therein. continued success of product development. acceptance of new products or servicesby the Group’s targeted customers. success of the existing and future collaboration arrangements.changes in business strategy or development plans or targets. changes in the degree of protectioncreated by the Group’s patents and other intellectual property rights. the availability of capital onacceptable terms; (2) industry conditions. such as strength of product demand. intensity of competition.prevailing and future global market prices for the Group’s products and the pricing pressures thereto.price fluctuations in raw materials. financial condition of the customers and the competitors of theGroup. the potential introduction of competing products and technologies by competitors; and (3)general economic conditions. such as rates of economic growth in the Group’s principal geographicmarkets or fluctuations in exchange and interest rates. Financial results Q2 2012 20 July 2012 2
  • Cash flow and liquidity improved• Operational EBIT EUR 141 million• Cash flow from operations EUR 246 million• Strong liquidity at EUR 1 240 million Financial results Q2 2012 20 July 2012 3
  • Operational EBIT on the similar level as Q1 2012 asanticipated Financial results Q2 2012 20 July 2012 4
  • Strategic investments to transform the Group Financial results Q2 2012 20 July 2012 5
  • 35% personnel increase in growth markets2007 –H1 2012 Financial results Q2 2012 20 July 2012 6
  • Montes del Plata Pulp Mill• Montes del Plata pulp mill 1.3 million tonnes annually• Approximately 60% of the construction work completed• Mill expected to start-up approximately mid-year 2013 Financial results Q2 2012 20 July 2012 7
  • Timing of Strategic Projects Guangxi, China Pulp and Board mill, start-up Q4 2014 Montes del Plata, Ostroleka, Uruguay Poland Pulp mill, start-up Container mid-year 2013 Skoghall, board Sweden machine start- Investment up start-up end Q1 2013 Q4 2012 Financial results Q2 2012 20 July 2012 8
  • Summary financials Q2 2012 Change % Change %EUR million Q2/2012 Q1/2012 Q2/2011 Q2 12/Q2 11 Q2 12/Q1 12Sales 2 720.4 2 673.3 2 817.1 -3.4 1.8Operational EBITDA 248.1 262.1 357.6 -30.6 -5.3Operational EBIT 141.2 147.4 239.1 -40.9 -4.2Profit before tax. excl. NRI 31.8 101.0 177.6 -82.1 -68.5Profit before tax 85.9 89.9 145.9 -41.1 -4.4EPS excl. NRI (EUR) 0.02 0.10 0.21 -90.5 -80.0EPS (basic). EUR 0.09 0.09 0.17 -47.1 -Operational ROCE. % 6.5 6.8 10.9 -40.4 -4.4Cash flow from operations 245.6 223.7 207.2 18.5 9.8Cash flow after investingactivities 74.5 111.4 110.8 -32.8 -33.1Debt/equity 0.54 0.46 0.41 31.7 17.4 Financial results Q2 2012 20 July 2012 9
  • Net Financial Items Change % Change %EUR million Q2/2012 Q1/2012 Q2/2011 Q212/Q211 Q212/Q112Net interest expense -42.0 -37.7 -28.3 -48.4 -11.4Foreign exchange gains and losses -18.2 8.0 -0.7 n/m n/mOther financial items. of which -6.6 -4.3 -5.6 -17.9 -53.5 PIK notes 2.5 2.0 1.9 Fair valuation of interest rate derivatives* -14.3 -3.3 -3.3 Fair valuation of long-term debt -0.3 -0.5 0.4 NewPage lease provision 9.5 13.6 - Other items -4.0 -16.1 -4.6Total net financial items -66.8 -34.0 -34.6 -93.1 -96.5 *Not hedge accounted interest rate derivatives. Financial results Q2 2012 20 July 2012 10
  • Operational EBIT by segments Change % Change %EUR million Q2/2012 Q1/2012 Q2/2011 Q212/Q211 Q212/Q112Printing and Reading 41.7 67.3 72.2 -42.2 -38.0 % of sales 3.5 5.5 5.8 -39.7 -36.4Biomaterials 14.7 7.2 31.2 -52.9 104.2 % of sales 6.0 3.0 11.6 -48.3 100.0Building and Living 11.5 9.8 35.2 -67.3 17.3 % of sales 2.6 2.6 7.6 -65.8 0.0Renewable Packaging 72.5 61.7 93.9 -22.8 17.5 % of sales 8.8 7.9 11.3 -22.1 11.4Other 0.8 1.4 6.6 -87.9 -42.9 % of sales 0.1 0.2 0.9 -88.9 -50.0 Financial results Q2 2012 20 July 2012 11
  • Western European paper* demand 2006 – 2012/MaySeasonally adjusted * Paper: News, UMO, UMI, SC, CM, WFC & WFU Source: EuroGraph & PPPC Financial results Q2 2012 20 July 2012 12
  • Corrugated packaging growth - Eastern Europe andAsia CAGR 4.4% CAGR CAGR CAGR 1.0% 4.1% 0.5% Western Eastern Europe Europe North America CAGR CAGR 2,7 % 4.3% Asia2010-2020Million tonnes South Middle East & America Africa Source: Pöyry and Stora Enso Financial results Q2 2012 20 July 2012 13
  • Liquid dairy products significant driver for ConsumerBoard growth – Asia 7% (CAGR 2010-2020) Consumption estimate for Liquid Dairy Products 10% 9,0% 9% 8% Total Global LDP 7% average growth rate: 6% CAGR 2010 - 2012 2.4% 5% 4% 3,2% 2,8% 3% 2,1% 2% 1,5%1,2% 1% -0,1% -0,4%-0,3% -1% -2% -3% -2,8% -4% -5% Volume 57.4 33.7 25.9 22.6 12.8 11 7.7 6.7 5.6 5.1 2012 Bil Litres Source: Tetra Pak Dairy Index 2009 Financial results Q2 2012 20 July 2012 14
  • Guidance for Q3 2012• Sales in Q3 2012 roughly similar level than Q2 2012• Operational EBIT close to the similar level or somewhat higher than in Q2 2012 Financial results Q2 2012 20 July 2012 15
  • Summary• European paper and wood products markets continue to weaken• Additional cost reductions and temporary production curtailments planned in H2 2012• Strategic investments progressing to transform the Group Financial results Q2 2012 20 July 2012 16
  • Financial results Q2 2012 20 July 2012 17
  • Operational EBIT by segments Change %EUR million Q2/2012 Q1/2012 Q212/Q112Printing and Reading 41.7 67.3 -38.0Biomaterials 14.7 7.2 104.2Building and Living 11.5 9.8 17.3Renewable Packaging 72.5 61.7 17.5Other 0.8 1.4 -42.9Group 141.2 147.4 -4.2 Financial results Q2 2012 20 July 2012 18
  • Printing and Reading and Renewable Packagingcreated the cash flow in Q2 2012 Financial results Q2 2012 20 July 2012 19
  • Transforming the CompanyQ1-Q2 2012 Financial results Q2 2012 20 July 2012 20
  • Curtailments increased year-on-year% of capacity Financial results Q2 2012 20 July 2012 21
  • Working capital improvedQ2 2010 – Q2 2012 *Operative working capital = trade receivables + inventories – trade payables Financial results Q2 2012 20 July 2012 22
  • Transaction risk and hedgesas at 30 June 2012 EUR million USD GBP SEK Estimated annual net operating cash flow exposure 1 200 600 -920 Transaction hedges as at 30 June 2012 -600 -270 450 Hedging percentage as at 30 June 2012 for the next 12 months 50% 45% 49% Additional USD and GBP hedges for 13-16 months increase the hedging percentages by 4 % and 7 % respectively. Operational EBIT: Currency strengthening of + 10% EUR million USD 120 SEK -92 GBP 60 The sensitivity is based on estimated next 12 months net operating cash flow. The calculation does not take into account currency hedges. and assumes no changes occur other than a single currency exchange rate movement. Weakening would have the opposite impact. Financial results Q2 2012 20 July 2012 23
  • Softwood pulp pricesStora Enso’s market pulp is softwood Source: FOEX Financial results Q2 2012 20 July 2012 24
  • Pulp wood and saw log pricesWood prices in Finland Source: METLA Financial results Q2 2012 20 July 2012 25
  • RCP prices German RCP price development. free delivered Source: Verband Deutscher Papierfabriken/Stora Enso Financial results Q2 2012 20 July 2012 26
  • Capital expenditure and depreciationQ1 2008 – Q2 2012 Financial results Q2 2012 20 July 2012 27
  • Debt/equity ratio2009 – Q2 2012 Financial results Q2 2012 20 July 2012 28
  • Net Debt /Operational EBITDA Financial results Q2 2012 20 July 2012 29
  • Energy balance* Q2 2012 Total energy self sufficiency 59% Self sufficiency 46% Self sufficiency 63% Impact** on operating profit from EUR million p.a. 10% change in: Electricity market price ~11 Fossil fuel price ~17 *) Pulp. paper and board mills. Europe and overseas **) Remaining impact on non-hedged volume Financial results Q2 2012 20 July 2012 31
  • Stora Enso Electricity procurement* Q2 2012 *) Pulp. paper and board mills. Europe and overseas Financial results Q2 2012 20 July 2012 32