Investor presentation. March 2018

Transcription

1 Investor presentation March 218

2 Holmen Own and add value to the forest Stable cash-flow from renewable sources Harvests 3 Mm 3 in own forests 1.2 TWh hydro & windpower production Focused industrial operations Premium paperboard with organic growth potential Competitive paper assets Efficient wood product operations integrated with paper and board mills A sustainable business 2.8 million tonnes positive carbon foot print 2

3 Holmen Strong financial development SEKm Operating profit* % Profitability* Operating margin Return on capital employed *Excl items affecting comparability 3

4 Holmen Solid cash flow generation SEKm 3 Cash flow 2 1 Capital expenditure* Dividends paid Cashflow before capex and WC * Excl sale of the newsprint mill in Spain 4

5 Holmen s forest holdings Total land area Productive forest land Standing volume Annual harvest 1.3 million ha* 1. million ha** 12 million m 3 sob 3 million m 3 sub Harvest in % of growth 8% * 3.2 million acres ** 2.5 million acres 5

6 Forest cash-flow earnings Includes costs for replanting, silviculture & roads SEKm 1 Earnings before change in value of forests

7 Holmen Harvest will increase over time ' m 3 sub/year 4 5 Harvesting plan m 3 growing stock solid over bark/ha 18 Forest holdings % annually

8 Efficient industries critical to forest earnings 5% Construction material Chips 5% Pulp, paper & board 8

9 Holmen Value based on future harvesting income 18 bn book value Increase harvest by 2% to 25 Standing timber to increase 3% 2% price & cost inflation ' m 3 sub/year Harvesting plan 5,5% WACC (post-tax) SEK/m 3 sub 6 Price Real Nominal Price used in valuation (nominal) 9

10 Forest cash-flow yield ~4% on book value Book value increase ~2% per year due to growth & inflation SEKm 1 25 Operating profit % Cash-flow yield Change in value of forests 1

11 Renewable Energy Low cost emission free electricity generation Hydro Wind 1 1 GWh 13 GWh 11

12 Profitability impacted by lower prices SEKm 6 reduction in property tax to 22 SEKm 4 Operating profit % Return on capital employed

13 Price Paperboard Premium board for advanced applications Cosmetics Confectionary Tobacco Pharma Beverages Food Other 13

14 Holmen Competitive asset base Approaching 55 kton/year kton 55 Production Cost structure 525 Other costs Wood 5 Chemicals 475 Personnel 45 Energy 14

15 Holmen Organic growth potential Leverage on market leading brands Maintain quality leadership through product development Global premium niches targeted US & Asian service centres established Increased local presence 15

16 Return on capital ~15% Maintenance stops affected paperboards 217 earnings SEKm 1 Operating profit % Profitability EBITDA margin Return on capital employed 16

17 Paper Challenge the traditional paper choice Holmen XLNT Holmen UNIQ Holmen BOOK Holmen VIEW 17

18 Successful growth in difficult market Transition to magazine & book producer finalised kton 1 2 Holmen s magazine & book papers kton 18 Printing paper* from West Europe % * Newsprint, SC & LWC Source: PPPC, Holmen Paper 18

19 Offer customers cost savings Lighter paper reduces printing & distribution costs Product development Utilise advantages with virgin fibre Capex discipline 39% more print surface 19

20 Return on capital ~1% Paper SEKm 4 Operating profit* % Profitability* EBITDA margin Return on capital employed *Excl items affecting comparability 2

21 Wood products Large scale saw mills 21

22 Global commodity market Total of 29 million m Production Consumption 9 6 Source: The Swedish Forest Industries Federation 22

23 Focus on value added Take out cost in the production process Increase value added in finished products Utilise co-location advantages 23

24 Return on capital 9% SEKm 1 Operating profit* % Profitability* EBITDA margin Return on capital employed *Excl items affecting comparability 24

25 Holmen Solid financial position SEKm Operating profit* Capital employed Forest Paperboard Paper 1 Wood products 5 Renewable energy SEKm 3 Cash flow Times,5 Debt/equity ratio 2,4,3 1,2,1, CAPEX Dividend CF before capex and WC * Excl sale of the newsprint mill in Spain 25

26 Holmen Growing a sustainable future 2.8 million tonnes positive CO2 footprint Increase harvest & forest value by active forest management Leverage on premium position to grow paperboard Gain market share in paper by offering cost efficient alternatives Increase value added in wood products Manage hydro power with long term perspective 26

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