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Results q4 2015 press slides
Stora Enso reported financial results for Q4 and full year 2015. Key highlights included: - Operational EBIT improved 15.8% in Q4 and 13% for the full year due to higher pulp volumes from Montes del Plata and favorable foreign exchange rates. - Cash flow remained strong at EUR 412 million before investments and EUR 75 million after investments despite peak capital expenditures in 2015. - Net debt to operational EBITDA was reduced to 2.4 from 2.6 the prior year. - Annual EPS increased substantially to EUR 1.02 from EUR 0.13 in 2014, supported by a forest valuation gain. - The company proposed increasing
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Results q4 2015 press slides
- 1. Financial results for Q4and full year 2015 CEO Karl-Henrik Sundström CFO Seppo Parvi 4 February 2016 4 February 20161
- 2. Stora Enso inbrief • A leading provider of renewable solutions • Some 26 000 employees in 35 countries • Sales in 2015: EUR 10.0 billion • Operational EBIT EUR 915 million; 2nd year in a row with clear improvement • Shares listed on Nasdaq in Helsinki and Stockholm 2 26 000 35 Stora Enso Q4 and Full Year 2015 Results 4 February 2016
- 3. • Sales declinedmoderately, but increased excluding declining paper business, divestments and closure • Operational EBIT improved clearly due to Montes del Plata pulp volumes, favourable FX and lower variable costs • Cash flow continues strong − Before investments EUR 412 million − After investments EUR 75 million despite peaking investments • Net debt to operational EBITDA reduced to 2.4 (2.6) • Annual EPS 1.02 EUR (0.13 EUR) supported by Bergvik forest valuation gain 4 February 20163 Continued solid performance in Q4 Proposal to increase dividend to 0.33 EUR Stora Enso Q4 and Full Year 2015 Results
- 4. Quarterly sales upby 5.4% excluding paper and divested businesses 4 February 20164 2 552 10 2132 487 1 539 6 147 10 040 1 622 6 428 -2.5% 5.4% 4.6% -1.7% Reported group sales, EUR million Sales excluding paper, Corenso and Barcelona, EUR million Stora Enso Q4 and Full Year 2015 Results
- 5. 0 100 200 300 400 500 600 700 800 900 1000 Q414 Q415 20142015 Operational EBIT increased by 15.8% in Q4 y-o-y and by 13.0% in 2015 y-o-y 4 February 20165 EUR million 915 810 242 209 15.8% 13.0% Stora Enso Q4 and Full Year 2015 Results
- 6. 4 February 20166 ROCEreaching new levels *Excluding Montes del Plata until end of 2014 and excluding Beihai Mill project in Guangxi ROCE target of 13% *Excluding Montes del Plata until end of 2014 and excluding Beihai Mill project in Guangxi Stora Enso Q4 and Full Year 2015 Results
- 7. Transformation steps completed 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Montesdel Plata pulp mill - Performed at the nominal capacity level in June - Annual capacity of 1.3 Mt of which Stora Enso’s share 50% Murow sawmill - Started in Q2 2015 as planned. - Capacity increase to 140 000 m³/shift/year Sunila Biorefinery - Investment completed in Q1 2015 - First volumes of lignin are expected to be commercialised in early 2016 Virdia acquisition - Acquired in June 2014 - Extraction and separation technologies for conversion of cellulosic biomass into highly refined sugars and lignin Imatra de-bottlenecking - The investment at the Imatra mill in Finland in quality, cost- competitiveness and an increase in capacity was completed according to plan. Varkaus conversion - The conversion of the fine paper machine to kraftliner is proceeding and the production started in October 7 4 February 2016 Stora Enso Q4 and Full Year 2015 Results
- 8. • Non-core assetdivestments − Uetersen Mill Q1 2015 − Barcelona Mill Q4 2015 − Komárom Mill Q3 2015 − Arapoti Mill, closing expected in Q1 2016 • Closures − Corrugated packaging converting unit in Chennai, India 2015 − Pälkäne production unit Q2 2015 4 February 20168 Non-core asset divestments and closures in 2015 Stora Enso Q4 and Full Year 2015 Results
- 9. Transformation in progress– Beihai Mill expected to be operational during Q2 Division Investment Investment value To be completed Consumer Board Beihai consumer board mill EUR 800 million Q2 2016 Wood Products Varkaus wooden building elements EUR 43 million Q2 2016 Biomaterials Xylose demonstration and market development plant EUR 32 million Early 2017 4 February 20169 Stora Enso Q4 and Full Year 2015 Results
- 10. • Co-operation withNXP on intelligent packaging solutions announced in Q2 2015 − Customer project ongoing • Commercial phase for MFC announced in Q2 2015 − Customer deliveries started • Innovation Centre for packaging in Helsinki inaugurated in November • Innovation Centre for biomaterials in Stockholm inaugurated in December 4 February 201610 Innovation steps in 2015 Stora Enso Q4 and Full Year 2015 Results
- 11. Transformation journey continues Growthbusinesses with 64% of sales and 83% of operational EBIT 2006 Sales 64% 83% 30% 38% In 2006, all pulp used internally Q4/2015 Operational EBIT Q4/2015 Sales 2006 Operational EBIT 4 February 2016 Stora Enso Q4 and Full Year 2015 Results 11
- 12. Record high annualOperational EBITDA % Summary financials Q4 2015 and 2015 4 February 201612 EUR million Q4/15 Q4/14 Change % Change % 2015 2014 Change Q4/15- Q4/14 Q3/15 Q4/15- Q3/15 % 15/14 Sales 2 487 2 552 -2.5% 2 500 -0.5% 10 040 10 213 -1.7% Operational EBITDA 341 308 10.7% 353 -3.4% 1 352 1 269 6.5% Operational EBITDA margin 13.7% 12.1% 14.1% 13.5% 12.4% Operational EBIT 242 209 15.8% 246 -1.6% 915 810 13.0% Operational EBIT margin 9.7% 8.2% 9.8% 9.1% 7.9% Profit before tax excl. NRI 610 32 n/m 128 n/m 1 048 399 162.7% EPS excl. NRI, EUR 0.78 0.06 0.13 1.24 0.40 EPS (basic), EUR 0.53 -0.15 0.16 1.02 0.13 Operational ROCE 11.3% 9.7% 11.6% 10.6% 9.5% Operational ROCE excl. Beihai project 13.3% 13.1%* 13.1% 12.2% 12.7%* Cash Flow from Operations 412 442 -6.8% 484 -14.9% 1 556 1 139 36.6% Net debt/last 12 months’ operational EBITDA 2.4 2.6 2.5 2.4 2.6 *Excluding Beihai and Montes del Plata investments Stora Enso Q4 and Full Year 2015 Results
- 13. Divisional performance Q415 / Q4 14 Consumer Board • Sales +1.1% • Sales +6.5% excluding the divested Barcelona Mill • Operational EBIT EUR 53 million +20.5% driven by higher deliveries and FX • Operational ROOC 10.6% (10.0%) − Excluding Beihai Mill 24.0% (18.7%) • Beihai Mill operational during Q2 − Costs per quarter EUR 10–15 million during H1 Packaging Solutions • Sales -8.7% due to the Corenso divestment • Sales +5% excluding the divested Corenso − Mainly due to the ramp up of kraftliner production at Varkaus Mill • Operational EBIT excluding the impact of the divested Corenso decreased by EUR 4 million − Varkaus kraftliner start-up impact of EUR - 9 million − Prices higher for containerboard and corrugated boxes • Varkaus kraftliner production ramping-up − Quality good and customer qualification proceeding according to plan − Full production expected early 2017 4 February 201613 Stora Enso Q4 and Full Year 2015 Results
- 14. Divisional performance Q415 / Q4 14 Biomaterials • Sales increased by 19.1% − Higher volumes from Montes del Plata ramp- up and the positive foreign exchange impact • Operational EBIT up by 47 MEUR, 138.2% − Higher hardwood pulp prices, Montes del Plata volumes, positive FX impact and lower wood costs for the Nordic mills Wood Products • Sales declined 4.8% − Lower sawn good prices in local currencies, and lower sales volumes in traditional sawn goods, compensated by focusing on higher margin products • Operational EBIT +110% − Lower wood costs and positive foreign exchange impact. • Recent announcements: − EUR 16 million investment in pellet production and in a new boiler at Ala Sawmill in Sweden − Pellet production completed by Q2 2017 − New boiler completed by Q4 2016 − EUR 10 million investment in the renewal of the boiler at Honkalahti Sawmill in Finland − Boiler renewal completed by Q3 2017 4 February 201614 Stora Enso Q4 and Full Year 2015 Results
- 15. Paper • Sales -9.6% −Due to the disposal of Uetersen Mill and conversion of Varkaus Mill, lower sales prices in local currencies − Excluding divestments, closures and conversion, volumes remained flat • Operational EBITDA decreased to EUR 74 million − Lower sales prices, higher costs for chemical pulp decrease EBITDA − Favourable FX improved EBITDA • Weak cash flow − Cash payment of EUR 25 million related to renegotiated long-term supply agreement and restructuring payments. Seasonally high CAPEX. 4 February 201615 Divisional performance Q4 15 / Q4 14 Stora Enso Q4 and Full Year 2015 Results
- 16. EPS improved significantlyto 1.02 EUR from 2014 to 2015 • Positive impacts: − Improvement of operational result, 13% − Bergvik Skog fair valuations of approximately EUR 430 million on Q4 − Lower Net Financials and taxes • Negative impact: − Q4 non-recurring items with negative impact of approximately EUR 250 million 4 February 201616 -0,2 0 0,2 0,4 0,6 0,8 1 1,2 2010 2011 2012 2013 2014 2015 Earnings per share Earnings per share (basic) Stora Enso Q4 and Full Year 2015 Results
- 17. Forecast for capexin 2016 MEUR Forecast 2016 Capital expenditure 680–720 Depreciation 520–540 4 February 201617 The capital expenditure forecast includes approximately EUR 100 million for group’s biological assets and approximately EUR 160 million for the Beihai Mill in China. Stora Enso Q4 and Full Year 2015 Results
- 18. • Q1/2016 salesare estimated to be similar to the amount of EUR 2 487 million • Operational EBIT is expected to be in line with the EUR 242 million recorded in Q4/2015 • No major scheduled annual maintenance shutdowns during Q1/2016 4 February 201618 Guidance Stora Enso Q4 and Full Year 2015 Results
- 19. Dividend proposal • Dividendpolicy: − Strive to pay stable dividends linked to the long-term performance − One half of net profits over a business cycle • Dividend proposal of 0.33 EUR per share for 2015 totaling EUR 260 million 4 February 201619 Stora Enso Q4 and Full Year 2015 Results *Dividend proposal
- 20. • Solid performance,EBIT increase 15.8% y-o-y • Positive annual cash flow of EUR 599 million despite peaking investments in 2015 • CAPEX level going down from EUR 989 million in 2015 to EUR 680–720 million in 2016 • EPS improved significantly • Dividend increased to 0.33 • Board mill investment in Beihai moving ahead • Transformation towards a Renewable Materials Company continues 4 February 201620 Summary Stora Enso Q4 and Full Year 2015 Results
- 21.