Borregaard ASA · OSL:BRG
Borregaard ASA — Q4 2021 Earnings Presentation
32 slides from Borregaard ASA's earnings presentation, Feb 3, 2022
Slide 1: 4th Quarter 2021
4th Quarter 2021 Sarpsborg, 3 February 2022
Slide 2: Agenda
Agenda Per A Sørlie, President & CEO Highlights Proposed dividend Business segments Outlook Per Bjarne Lyngstad, CFO Financial performance 2
Slide 3: Highlights – 4th quarter 2021
Highlights – 4th quarter 2021 EBITDA1 NOK 263 million (NOK 263 million) Favourable product mix in BioSolutions Lower deliveries in BioMaterials and Fine Chemicals High energy spot prices Below normal production levels at the Sarpsborg site Strong cash flow 3 1) Alternative performance me
Slide 4: Highlights – full year 2021
Highlights – full year 2021 All-time high EBITDA1 1,372 mNOK (1,132 mNOK) Price increases and favourable product mix in BioSolutions High deliveries and improved product mix, but lower sales prices for BioMaterials Weaker product mix and increased raw material costs in Fine Chemicals High
Slide 5: Dividend proposal for 2021
Dividend proposal for 2021 Borregaard’s dividend policy To pay regular and progressive dividends reflecting expected long-term earnings and cash flows Dividend targeted between 30% and 50% of net profit Dividend proposal by the Board of Directors Ordinary dividend of NOK 2.75 per share 40% o
Slide 6: BioSolutions markets – Q4
BioSolutions markets – Q4 NOK per mtds ‘000 mtds 2020 Average gross sales price1 Sales volume1 11 000 150 2021 10 000 9 244 125 115 106 100 99 96 9 000 100 90 92 84 7 838 7 709 7 761 8 000 7 431 75 6 885 6 701 6 756 7 000 50 6 000 25 5 000 0 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1 Q2 Q3 Q
Slide 7: BioSolutions markets – full year
BioSolutions markets – full year NOK per mtds ‘000 mtds Specialities Average gross sales price1 Sales volume1 Industrial 10 000 Construction 500 450 468 470 9 000 416 8 106 83 86 86 366 400 8 000 88 6 951 300 89 7 000 157 170 175 6 166 150 6 000 5 618 5 654 200 146 5 000 100 210 212 209 178 131 4 00
Slide 8: BioMaterials markets – Q4
BioMaterials markets – Q4 NOK per mt ‘000 mt 2020 Average gross sales price1 47,5 Sales volume 14 000 50 2021 42,4 40,2 40,3 40,0 13 000 12 579 40 33,9 34,2 34,3 11 780 12 000 11 382 30 11 128 10 972 10 911 10 641 10 754 11 000 20 10 000 10 9 000 0 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1
Slide 9: BioMaterials markets – full year
BioMaterials markets – full year NOK per mt ‘000 mtds Average gross sales price1 Sales volume1 13 000 77% 79% 200 72% 73% 80% 11 678 62% 12 000 150 60% 10 665 10 807 11 000 10 589 100 40% 10 337 150,7 150,1 153,1 148,4 164,4 10 000 50 20% 9 000 0 0% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Slide 10: Fine Chemicals markets – Q4 & full year
Fine Chemicals markets – Q4 & full year mNOK 2020 mNOK Sales revenues – quarter 2021 Sales revenues – full year 200 600 538 175 485 154 153 500 150 130 131 400 127 128 400 365 369 125 112 100 88 300 75 200 50 100 25 0 0 Q1 Q2 Q3 Q4 2017 2018 2019 2020 2021 Sales revenues include fine chemical interm
Slide 11: Climate change and the environment – targets and rating
Climate change and the environment – targets and rating Science Based Targets for GHG emissions approved by SBTi¹ in 2019 Borregaard has in 2021 committed to and applied for more ambitious targets in line with the 1.5oC goal Targeted reductions in GHG emissions (Scope 1 and 2): 46% absolute redu
Slide 12: Outlook
Outlook BioSolutions Total sales volume is expected to be largely in line with 2021 volume Positive market development for several biopolymer applications expected to continue, improving product mix and average price in sales currency Biovanillin market expected to remain positive and the new
Slide 13: Financial performance Q4-21
Financial performance Q4-21
Slide 14: Borregaard key figures – Q4
Borregaard key figures – Q4 mNOK Operating revenues 2020 mNOK EBITDA1 2020 % EBITDA margin1 2020 40 1 750 2021 2021 2021 27,5 27,4 400 416 30 21,3 391 1 500 350 19,7 1 511 361 20 26,6 1 446 1 429 1 419 1 250 300 1 372 1 358 21,1 1 338 17,6 18,2 1 260 302 10 1 000 250 266 263 263 NOK0 242 750 200 8 E
Slide 15: Borregaard key figures – full year
Borregaard key figures – full year mNOK Operating revenues mNOK EBITDA1 & EBITDA margin1 % % ROCE1 & EPS NOK 6 000 24 12 22,8 23,6 25 1 500 19,1 5 805 21,2 5 000 19,9 20 10 5 328 18,9 16,1 5 063 1 372 4 785 1 250 20 4 618 4 000 16 8 12,7 1 132 1 000 1 055 15 11,4 1 007 3 000 12 10,5 6,95 6 903 750 1
Slide 16: BioSolutions key figures – Q4
BioSolutions key figures – Q4 mNOK 2020 Operating revenues 1 000 2021 800 • Revenues 27% above Q4-202 934 885 838 819 • 812 600 797 Favourable product mix and price increases 733 733 400 • Lower sales volume due to reduced raw material base 200 • Full year growth 13% 0 Q1 Q2 Q3 Q4 mNOK 2020 2021 250
Slide 17: BioMaterials key figures – Q4
BioMaterials key figures – Q4 mNOK 2020 Operating revenues 2021 500 523 • Revenues decreased by 12% vs Q4-20 482 400 468 458 454 417 405 403 300 • Lower deliveries 200 100 • Full year growth 8% 0 Q1 Q2 Q3 Q4 mNOK 2020 2021 100 102 • Lower deliveries, but improved product mix 101 80 91 91 EBITDA1 • B
Slide 18: Fine Chemicals key figures – Q4
Fine Chemicals key figures – Q4 mNOK 2020 Operating revenues 2021 150 155 153 125 • Revenues decreased by 25% vs Q4-20 132 131 131 128 100 114 75 • Lower deliveries 90 50 25 • Full year decrease 10% 0 Q1 Q2 Q3 Q4 mNOK 2020 2021 • Lower deliveries, weaker product mix and increased raw 70 60 material
Slide 19: Currency impact
Currency impact 2020 mNOK Hedging effects2 on EBITDA1 2021 Borregaard’s currency basket3 20 6 110 0 104,9 105 -20 -4 -15 -16 99,9 -40 100 -60 -44 -51 97,8 94,2 -62 95 97,3 92,2 92,5 -80 90,7 -100 -84 90 Q1 Q2 Q3 Q4 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Net FX EBITDA1 impact ≈5 mNOK vs Q4
Slide 20: Cash flow, investments and NIBD
Cash flow, investments and NIBD Increase mNOK Cash flow from operating activities mNOK Investments mNOK NIBD1 change 300 Decrease 500 458 262 1 500 416 250 28 378 219 1 400 400 356 72 191 200 263 87 300 38 1 300 239 150 125 163 1477 200 95 1 200 1417 100 32 262 190 153 36 174 100 1 100 50 93 59 56 0
Slide 21: Investment forecast 2022-2023
Investment forecast 2022-2023 Replacement investments mNOK Investment forecast1 Targeted at depreciation level 800 Investments expected above target for 2022 and 2023, mainly 701 due to commitments to reduce emissions to air (CO2) and 700 575 575 effluents to water (COD) 600 +/-75 +/-100 Expansi
Slide 22: Questions?
Questions? For questions, please contact Borregaard’s Investor Relations by phone or email See: https://www.borregaard.com/Investor-Relations 22
Slide 23: Appendix
Appendix
Slide 24: Borregaard – key figures
Borregaard – key figures Amounts in NOK million Q4-21 Q4-20 Change YTD-21 YTD-20 Change Operating revenues 1 446 1 338 8% 5 805 5 328 9% EBITDA 1 263 263 0% 1 372 1 132 21 % Depreciation property, plant and equipment -106 -110 -416 -443 Amortisation intangible assets -1 -2 -4 -5 Other income and exp
Slide 25: Operating revenues and EBITDA per segment
Operating revenues and EBITDA1 per segment Amounts in NOK million Amounts in NOK million 1 Operating revenues Q4-21 Q4-20 Change EBITDA Q4-21 Q4-20 Change Borregaard 1 446 1 338 8% Borregaard 263 263 0% BioSolutions 934 733 27 % BioSolutions 214 137 56 % BioMaterials 405 458 -12 % BioMaterials 27 80
Slide 26: Cash flow
Cash flow Amounts in NOK million Q4-21 Q4-20 YTD-21 YTD-20 Amounts in NOK million Profit before taxes 132 119 873 496 Amortisation, depreciation and impairment charges 107 113 420 449 Change in net working capital, etc 174 200 256 -21 Dividend/share of profit from JV & associates 6 -12 6 51 Taxes pa
Slide 27: Balance sheet
Balance sheet Amounts in NOK million 31.12.2021 30.09.2021 31.12.2020 Assets: Intangible assets 89 90 86 Property, plant and equipment 4 191 4 052 3 973 Right-of-use assets 351 358 381 Other assets 339 277 380 Investment in joint venture and associate company 173 147 38 Non-current assets 5 143 4 92
Slide 28: Net financial items & net interest-bearing debt
Net financial items & net interest-bearing debt1 Amounts in NOK million Net financial items Q4-21 Q4-20 YTD-21 YTD-20 Net interest expenses -13 -17 -59 -76 Currency gain/loss -7 6 -8 7 Share of profit/-loss from an associate -2 0 -2 0 Other financial items, net -2 -1 -10 -3 Net financial items -24 -
Slide 29: Currency hedging strategy
Currency hedging strategy Purpose is to delay effects of currency fluctuations and secure competitiveness Hedging based on expected EBITDA1 impact2 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 above
Slide 30: Credit facilities, solidity and debt
Credit facilities, solidity and debt Long-term credit facilities Debt and undrawn facilities • 1,500 mNOK revolving credit facilities, maturity 2024 and 2026, 31.12.2021 margin linked to sustainability targets 3 500 3 250 • 400 mNOK 5-year bond issue, maturity 2023 3 000 • 40 mEUR 10-year loan, matu
Slide 31: Alternative performance measures
Alternative performance measures In the discussion of the reported operating results, financial position and cash flows, Borregaard refers to certain measures which are not defined by generally accepted accounting principles (GAAP) such as IFRS. Borregaard management makes regular use of these Alter
Slide 32: 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 does n