Financial Results Q CEO Jouko Karvinen and CFO Markus Rauramo

Transcription

1 Financial Results Q CEO Jouko Karvinen and CFO Markus Rauramo 24 April 2012

2 It should be noted that certain statements herein which are not historical facts. including. without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by believes. expects. anticipates. foresees. or similar expressions. are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of Since these statements are based on current plans. estimates and projections. they involve risks and uncertainties which may cause actual results to materially differ from those 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 of efficiencies therein. continued success of product development. acceptance of new products or services by 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 protection created by the Group s patents and other intellectual property rights. the availability of capital on acceptable 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 the Group. 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 geographic markets or fluctuations in exchange and interest rates. 24 April

3 Earnings remained moderate as expected Operational EBIT EUR 147 million Strong cash flow EUR 224 million Liquidity EUR million 24 April

4 EUR million Operational EBIT in line with previous quarter 300 Operational EBIT Operational EBIT margin %, 4 Q avg 10,0 % ,0 % 8,0 % 7,0 % 6,0 % 5,0 % 4,0 % 3,0 % 0 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 2,0 % 24 April

5 Year-on-year earnings Lower prices in Printing & Reading and Biomaterials Lower volume in Renewable Packaging Strong cash flow and liquidity further improved Profit improvement actions continue China investment decision 24 April

6 INDEX (2007=100) Flexibility improvements continued Fixed Cost/Sales Q1/ April

7 INDEX (Q = 100) Still room to improve productivity Personnel cost/sales Q1/2007 Q1/2008 Q1/2009 Q1/2010 Q1/2011 Q1/ April

8 Printing and Reading and Renewable Packaging created the cash flow in Q MEUR 250 Cash flow from operations Cash flow after investing activities Printing and Reading Biomaterials Building and Living Renewable Packaging Other Total 24 April

9 Summary financials Q EUR million I/2012 IV/2011 I/2011 Change % Q1 12/Q1 11 Change % Q1 12/Q4 11 Sales % -0.3 % Operational EBITDA % 7.9 % Operational EBIT % 1.7 % Profit before tax. excl. NRI % % Profit before tax % % EPS excl. NRI (EUR) % 0.0 % Operational ROCE. % % 1.5 % Cash flow from operations % % Cash flow after investing activities % 50.9 % Debt/equity % -2.1 % 24 April

10 Business improved q-on-q, other lower Operational EBIT by segment EUR million I/2012 IV/2011 Change Q1 12/Q4 11 Printing and Reading Biomaterials Building and Living Renewable Packaging Other Group April

11 Rethink strategy Growth markets Renewable packaging Biomaterials Competitive paper 24 April

12 Focusing on high quality segments in China Unique position Chinese platform for growth A world leading position Technologies and specifications Committed customers Robust sustainability Unique integrate Established footprint Innovation Well prepared project to accelerete growth 24 April

13 24 April

14 Sales and operational EBIT forecast for Q Compared with Q Group sales slightly higher and operational EBIT approximately in the range of Q Maintenance stoppages in several European mills with main impact in Biomaterials Benefits of improving variable costs slowly apparent in the results 24 April

15 Summary Quarterly performance as expected Cost position and operational performance improvement need to continue Transformation accelerating: Montes del Plata pulp mill, and Chinese pulp and packaging board mill 24 April

16 24 April

17 Business improved q-on-q, other lower Operational EBIT by segments EUR million I/2012 IV/2011 I/2011 Change % Q112/Q111 Change % Q112/Q411 Printing and Reading % of sales Biomaterials % of sales Building and Living % of sales Renewable Packaging % of sales Other % of sales % 21.0% % 27.9 % % % % % % 63.3 % % 62.5 % % 88.1 % % 83.7 % % % % % 24 April

18 % of capacity Curtailments decreased sequentially % of capacity 30 Paper and Board Wood Products Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q April

19 EUR million Working capital decreased year-on-year Q Q ,0 % 26,0 % 24,0 % 22,0 % Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 Operative Working Capital at the end of Q Working Capital per Sales ratio *Operative working capital = trade receivables + inventories trade payables 20,0 % 18,0 % 16,0 % 14,0 % 12,0 % 10,0 % 24 April

20 Transaction risk and hedges as at 31 March 2012 EUR million USD GBP SEK Estimated annual net operating cash flow exposure Transaction hedges as at 31 March Hedging percentage as at 31 March 2012 for the next 12 months 50% 45% 43% USD and GBP have additional hedges for months which will increase the hedging percentage by 2% and 4% respectively. Operational EBIT: Currency strengthening of + 10% EUR million USD 116 SEK -90 GBP 62 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 occurs other than a single currency exchange rate movement. Weakening would have the opposite impact. 24 April

21 Net Financial Items EUR million I/2012 IV/2011 I/2011 Change % Q112/Q111 Change % Q112/Q411 Net interest expense Foreign exchange gains and losses n/m n/m Other financial items. of which PIK notes Fair valuation of interest rate derivates* Fair valuation of long-term debt NewPage lease provision Arktos writeoff Other items Total net financial items *Not hedge accounted interest rate derivatives. 24 April

22 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 USD/tonne Softwood pulp prices Stora Enso s market pulp is softwood Bleached softwood kraft pulp Bleached hardwood kraft pulp 450 Source: FOEX 24 April

23 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 Pulp wood and saw log prices Wood prices in Finland Pulpwood, Pine Sawlogs, Pine EUR/m Source: METLA 24 April

24 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 Wood prices in Sweden 600 Pulpwood Sawlogs SEK/m Pulpwood includes pine. spruce and birch. Sawlogs include pine and spruce. Source: SDC. Skogsstyrelsen 24 April

25 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 EUR/tonne RCP prices Mixed OCC De-inking German RCP price development. free delivered Source: Verband Deutscher Papierfabriken/Stora Enso 24 April

26 EUR million Capital expenditure and depreciation Q Q % 200 8% 150 6% 100 4% 50 2% 0 0% Capex Depreciation and impairment excl NRI Capex % of sales 24 April

27 Debt/equity 2009 Q ,8 0,7 0,6 0,5 0,51 0,47 0,46 0,4 0,39 0,3 0,2 0, Q April

28 Maturity profile 31 March 2012 m Bonds Other loans / liabilities Commercial paper EUR 413m 5.125% 2014 SEK 500m 3.5% 2015 SEK 1.4 bn S+3.7% 2015 SEK 2.4 bn 5.75% 2015 EUR 390m E+4.21% 2016 USD 507m 6.404% 2016 EUR 500m 5.5% USD 300m 7.25% Revolving Credit Facility 700 million matures in January 2015 and is fully undrawn April

29 Energy balance * Q Total energy self sufficiency 59% Self sufficiency 47% Self sufficiency 63% Electricity Fuels Internal External (hedged) External (non-hedged) Impact** on operating profit from 10% change in: Electricity market price ~9 Fossil fuel price ~17 EUR million p.a. *) Pulp. paper and board mills. Europe and overseas **) Remaining impact on non-hedged volume 24 April

30 Stora Enso Electricity procurement * Q [GWh/a] Sales to market Open position Local tariff Financial contracts Physical contracts PVO production Own production *) Pulp. paper and board mills. Europe and overseas 24 April