Borregaard Asa · OSL:BRG
Borregaard Asa — Q3 2015 Earnings Presentation
25 slides from Borregaard Asa's earnings presentation, Oct 21, 2015
Slide 1: 3rd quarter 2015
3rd quarter 2015 Oslo, 21 October 2015
Slide 2: Agenda
Agenda Per A Sørlie, President & CEO • Highlights • Business areas • Outlook Per Bjarne Lyngstad, CFO • Financial performance 2
Slide 3: Highlights – 3rd quarter 2015
Highlights – 3rd quarter 2015 • EBITA 160 mNOK (165 mNOK) • Positive FX impact in all business areas • Lower sales volume and weaker product mix for Performance Chemicals • Positive volume development in Fine Chemicals 3
Slide 4: Performance Chemicals – Q3 market development
Performance Chemicals – Q3 market development NOK per mtds Gross average sales price 1) ‘000 mtds Sales volume 1) 2014 6 000 125 2015 117 113 5 500 100 109 108 107 100 99 5 000 75 4 500 50 4 000 25 3 500 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 0 4 522 4 385 4 528 4 740 5 744 5 393 5 424 Q1 Q2 Q3 Q
Slide 5: Acquisition of lignin business in the USA
Performance Chemicals Acquisition of lignin business in the USA • Agreement signed with Flambeau Rivers Paper LLC for the acquisition of their lignin business – Acquisition of lignin business based at Flambeau’s Park Falls operations in Wisconsin, USA – Long-term lignin raw material supply agreement
Slide 6: Specialty Cellulose – Q3 market development
Specialty Cellulose – Q3 market development NOK pr mt Gross average sales price 1) ‘000 mt Sales volume 2014 10 500 50 2015 10 000 40 41,7 39,6 39,1 9 500 38,4 37,8 37,6 34,3 30 9 000 8 500 20 8 000 10 7 500 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 0 9 065 8 711 9 187 9 660 9 337 8 894 9 881 Q1 Q2
Slide 7: Ingredients & Fine Chemicals – Q3 market development
Ingredients & Fine Chemicals – Q3 market development mNOK Ingredients – sales revenues 2014 mNOK Fine Chemicals – sales revenues 2014 100 2015 80 2015 92 80 84 84 83 60 82 81 79 60 56 55 60 47 40 46 42 40 40 20 20 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ingredients Fine Chemicals • Market conditions remain chal
Slide 8: Outlook
Outlook • Performance Chemicals – Both total and high-value sales volume expected to be in line with Q3-15 – Forecasts are uncertain due to low market visibility – Impact of weaker demand and increased competition in construction partly offset by reallocation to other regions and applications • Spec
Slide 9: Financial Performance Q3-15
FINANCIAL PERFORMANCE Q3- Q3-15 9
Slide 10: Borregaard – Q3 key figures
Borregaard – Q3 key figures mNOK Operating revenues mNOK EBITA EBITA margin in % 2014 % 2015 1 200 175 20 16,5 165 15 13,1 160 150 1 069 1 000 10,4 1 054 15,0 1 007 1 003 993 992 10 12,4 951 125 10,0 9,7 131 130 800 5 100 0 105 99 600 Q1 Q2 Q3 Q4 Earnings per share (EPS) 92 75 Cumulative NOK 4 400 5
Slide 11: Performance Chemicals – Q3 key figures
Performance Chemicals – Q3 key figures 600 mNOK 2014 2015 500 515 503 488 Operating • Top line +4% vs Q3-14 472 revenues 467 400 442 441 300 200 • 12% lower sales volume 100 • Positive FX impact 0 Q1 Q2 Q3 Q4 mNOK 150 2014 2015 125 127 • Positive FX effects and higher prices 117 100 111 111 104 EBIT
Slide 12: Specialty Cellulose – Q3 key figures
Specialty Cellulose – Q3 key figures 500 mNOK 2014 2015 400 Operating revenues 389 384 379 365 358 300 • Top line +1% vs Q3-14 338 336 200 100 • Positive FX impact, lower prices and weaker product mix 0 Q1 Q2 Q3 Q4 mNOK 100 2014 2015 75 • Reduced sales prices and weaker product mix • Highly speciali
Slide 13: Other Businesses – Q3 key figures
Other Businesses – Q3 key figures 250 mNOK 2014 2015 Operating revenues 200 199 183 178 176 • Top line +26% vs Q3-14 175 150 171 158 100 • Increased sales in Fine Chemicals • Positive FX contribution 50 0 Q1 Q2 Q3 Q4 10 2014 2015 mNOK 0 • Ingredients: Ingredients Impact of lower production more than
Slide 14: Currency impact
Currency impact mNOK Hedging effects on EBITA 2) 2014 Borregaard’s currency basket 1) 20 130 2015 125 2 0 120 -17 -3 115 -20 -33 110 -40 -54 105 -55 100 -70 -60 95 90 -80 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q1 Q2 Q3 Q4 97,6 96,1 99,2 107,0 116,9 116,0 123,2 • Net FX EBITA impact approx. 70 mNO
Slide 15: Cash flow, capex and NIBD
Cash flow, capex and NIBD mNOK Cash flow operations 1) mNOK Capex mNOK NIBD development 300 175 850 250 150 800 26 750 200 125 18 16 225 17 700 150 100 263 825 71 37 650 232 100 188 199 75 26 600 716 31 125 15 50 50 22 550 69 0 25 48 56 500 -25 31 -50 0 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q3'14 Q4'14 Q1'1
Slide 16: Q&A
Q&A • Per A Sørlie, President & CEO • Per Bjarne Lyngstad, CFO 16
Slide 17: Appendix
17 APPENDIX Borregaard
Slide 18: Borregaard – Key figures
Borregaard – Key figures Amounts in NOK million Q3-2015 Q3-2014 Change YTD-2015 YTD-2014 Change Operating revenues 1 069 1 003 7% 3 130 2 988 5% EBITDA (adjusted) 225 225 0% 590 573 3% EBITA (adjusted) 160 165 -3 % 396 394 1% Amortisation intangibles 0 0 0 0 Other income and expenses 0 0 0 0 EBIT 16
Slide 19: Operating revenues and EBITA per segment
Operating revenues and EBITA per segment Amounts in NOK million Amounts in NOK million Operating revenues Q3-2015 Q3-2014 Change Operating profit - EBITA Q3-2015 Q3-2014 Change Borregaard 1069 1003 7% Borregaard 160 165 -3 % Performance Chemicals 488 467 4% Performance Chemicals 111 117 -5 % Special
Slide 20: Cash flow
Cash flow Amounts in NOK million Q3-2015 Q3-2014 YTD-2015 YTD-2014 FY-2014 Amounts in NOK million Profit before taxes 151 153 376 371 430 Amortisation, depreciation and impairment charges 65 60 194 179 244 Change in net working capital, etc -26 7 -228 -77 59 Dividend (share of profit) from JV 16 21
Slide 21: Balance sheet
Balance sheet Amounts in NOK million 30.09.2015 30.06.2014 31.12.2014 Assets: Intangible assets 89 75 77 Property, plant and equipment 2 039 2 037 2 004 Other assets 80 88 76 Investments in joint venture 103 125 106 Non-current assets 2 311 2 325 2 263 Inventories 600 613 610 Receivables 866 860 707
Slide 22: Net financial items & net interest-bearing debt
Net financial items & net interest-bearing debt Amounts in NOK million Net financial items Q3-2015 Q3-2014 YTD-2015 YTD-2014 Net interest expenses -4 -8 -17 -23 Currency gain/loss -4 -4 -1 1 Other financial items, net -1 0 -2 -1 Net financial items -9 -12 -20 -23 Amounts in NOK million Net interest-
Slide 23: Currency hedging strategy
Currency hedging strategy Purpose is to delay effects of currency fluctuations and secure competitiveness • Hedging based on expected EBITA impact1) – Base hedge - 75%/50% on a rolling basis for 6/9 months for major currencies – Extended hedge - 75%/50% of the next 24/36 months if USD and EUR are ab
Slide 24: Debt, credit facilities and solidity
Debt, credit facilities and solidity • Debt and overdraft facilities Debt and undrawn facilities 30.09.2015 – Long-term credit facilities 2 750 • 1,500 mNOK 5-year revolving credit facilities, maturity 2019 2 500 • 400 mNOK 5-year bond issue, 2 250 maturity 2019 2 000 • 40 mEUR 10-year loan, maturit
Slide 25: Important notice
Important notice • This presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. • This presentation do