Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Q1 2009 Earnings Presentation
32 slides from Stora Enso Oyj Class A's earnings presentation, Apr 23, 2009
Slide 1: Financial results Q1 2009
Financial results Q1 2009 23 April 2009
Slide 2: Forward-looking statements
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
Slide 3: Contents
Contents Overview Q1 2009 financial results Market outlook Next steps Finland Summary 23 April 2009 Financial results Q1 2009 3
Slide 4: Overview
Overview Financial results Q1 2009
Slide 5: Overview of Q1 2009 results
Overview of Q1 2009 results year-on-year comparison • Cash flow from operations EUR 264 million – Strong working capital management • Operating profit decreased to EUR 3 million – Production down 23% – Sales volume down 22% – Fixed costs reduced by EUR 78 million = 4 margin points • Higher prices fo
Slide 6: Capacity utilisation
Capacity utilisation Q4 2008–Q1 2009 of total production capacity 100 % 15% 20% 13% 90 % 21% 30% 35% 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Paper and board Pulp Sawn goods Q4 2008 Q1 2009 Curtailments in Q4 2008 Curtailments in Q1 2009 23 April 2009 Financial results Q1 2009 6
Slide 7: Q1 2009 financial results
Q1 2009 financial results
Slide 8: Summary financials Q1 2009
Summary financials Q1 2009 Continuing operations % Change % Change EUR million I/09 IV/08 I/08 Q109/Q108 Q109/Q408 Sales 2 130 2 603 2 832 -24.8 -18.2 EBITDA, excl. NRI and FV 134 163 299 -55.2 -17.8 Operating profit, excl. NRI and FV 3 28 140 -97.9 -89.3 Profit before tax, excl. NRI -82 -81 83 -198
Slide 9: Change in operating profit excl. NRI & fair valuations
Change in operating profit excl. NRI & fair valuations Q1/08 – Q1/09, including closed units EUR million 200 -69 +30 150 +140 -233 100 50 +35 -2 -10 +3 0 +78 excluding non-recurring items - 50 +14 - 100 +66 -44 - 150 - 200 Q108 Sales Sales FX Sales Energy Fibre Other Fixed Depr. Assoc Other Q109 Pri
Slide 10: Capital expenditure and depreciation
Capital expenditure and depreciation Total Operations 400 14 EUR million Capex target 350 EUR 400 m 12 FY 2009 300 10 250 8 200 6 150 4 100 50 2 0 0 05Q1 05Q2 05Q3 05Q4 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 Capex Depreciation Capex % of sales Depreciation excluding Impairm
Slide 11: Operating cash flow
Operating cash flow Continuing operations EUR million Cash flow from operations Cash flow after investing activities including restructuring pay-out 600 500 400 300 200 100 0 -100 -200 05Q1 05Q2 05Q3 05Q4 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 23 April 2009 Financial result
Slide 12: Strong liquidity – cash exceeds 2009 debt maturities
Strong liquidity – cash exceeds 2009 debt maturities • Cash and cash equivalents EUR 490 million at end of Q1 2009 • Debt maturities in 2009 EUR 450 million • Committed credit facility EUR 1.4 billion fully undrawn, no covenants • Potential EUR 600 million available as Finnish pension loans • Budget
Slide 13: Market outlook
Market outlook Financial results Q1 2009
Slide 14: Demand forecasts 2009 – Europe
Demand forecasts 2009 – Europe (change % year-on-year) News- SC Coated Coated Uncoated print Mag. Mag. Fine Fine 0% -1 % -2 % RISI Forecast Nov 08 RISI Forecast Jan 09 -3 % RISI Forecast Mar 09 -4 % -5 % -6 % -7 % 23 April 2009 Financial results Q1 2009 14
Slide 15: Q2 2009 outlook
Q2 2009 outlook • More of the same as Q1 2009 • Forecast deflation excluding internal actions 4% for the full year 2009 – Mainly through reduced fibre cost 23 April 2009 Financial results Q1 2009 15
Slide 16: Next steps
Next steps Financial results Q1 2009
Slide 17: Make Stora Enso a leaner, faster and more focused company
Make Stora Enso a leaner, faster and more focused company • Build stronger businesses • Significantly reduce complexity in decision making • EUR 250 million annual cost reduction – Majority in 2009, rest in 2010 • The actions will affect up to 2 000 employees mainly through leaner management and adm
Slide 18: New Business Area organisation
New Business Area organisation New Business Area structure Merged BAs • Publication Paper Stora Enso - Newsprint and Book Paper - Magazine Paper Publication Packaging Wood • Packaging Fine Paper Products Paper - Consumer Board Mats Hannu - Industrial Packaging Juha Vanhainen Hannu Alalauri Nordlande
Slide 19: Reductions of sawn wood capacity
Reductions of sawn wood capacity • Plan to permanently reduce capacity 120 000 m3 – 50 people affected – Co-determination negotiations started at – Kitee, Varkaus, Puumerkki in Finland; and in Latvia • Plans to take long-term production curtailments during Q2 2009 – Świętajno sawmill in Poland – one
Slide 20: Stora Enso acquires remaining shares of Sunila Pulp Mill
Stora Enso acquires remaining shares of Sunila Pulp Mill • Transaction price EUR 6 million • Transaction expected to close by the end of Q2 2009, subject to approval by competition authorities • Easier to optimise total pulp production as the sole owner of the mill • Production at Sunila halted in 2
Slide 21: Finland
Finland Financial results Q1 2009
Slide 22: Comparative total production cost
Comparative total production cost Example of one Stora Enso product segment Curtail high cost Run lower cost Group-wide EUR/tonne Mill 1 Mill 2 Mill 3 Mill 4 Mill 5 Mill 6 Mill 7 Mill in Finland Mill in other country 23 April 2009 Financial results Q1 2009 22
Slide 23: Summary
Summary Financial results Q1 2009
Slide 24: Summary
Summary • Q2 outlook: more of the same – curtailments of higher cost assets – focus on cash flow and margin quality – control of capital spending and expenses • Reduce fixed costs by a further 2–3 margin points • Assume no recovery short term • We have the strength to ride out the storm 23 April 200
Slide 25: Stora Enso
STORAENSO
Slide 26: Operating profit by business area
Operating profit by business area % Change % Change EUR million I/09 IV/08 I/08 Q109/Q108 Q109/Q408 Newsprint 21 53 26 -19.2 -60.4 % of sales 6.8 12.8 6.7 1.1 -46.9 Magazine Paper 0 20 27 n/a n/a % of sales n/a 3.7 4.9 n/a n/a Fine Paper -6 -10 37 -116.2 40.0 % of sales -1.4 -2.1 6.8 -120.5 32.7 Con
Slide 27: Maturity profile
Maturity profile 31 March 2009 EUR million CP’s Bonds Other loans / liabilities Credit facility 1 800 SEK 3.6 Bn EUR 1.4 Bn 1 600 3.875% 2009 RCF 2012 Undrawn 1 400 EUR 500m 1 200 3.25% 2010 EUR 517m 5.125% USD 507m USD 469 6.404% 1 000 (750)m 2014 Exchange 2016 7.375% 2011 800 USD 300m 7.25% 600 20
Slide 28: Debt/Equity – Total operations
Debt/Equity – Total operations 2004–Q1 2009 0,8 0.8 Objective < 0.8 0.70 0,7 0.7 0.6 0,6 0.56 0.54 0.55 0,5 0.5 0.40 0.39 0,4 0.4 0.3 0,3 0.2 0,2 0.1 0,1 0 2004 2005 2006 2007 2008 09Q1 23 April 2009 Financial results Q1 2009 28
Slide 29: Change in EPS
Change in EPS Q1/08–Q1/09, including closed units EUR million 0.15 +0.03 -0.07 0.10 +0.08 0.05 -0.22 excluding non-recurring items 0.00 +0.03 -0.01 -0.02 -0.05 +0.08 -0.10 -0.08 -0.15 +0.06 -0.04 -0.20 -0.25 Q108 Sales Price Sales FX Sales Energy Fibre Fixed Costs Depr. Financing Fair Q109 Volume va
Slide 30: Net Financial Items – Continuing Operations
Net Financial Items – Continuing Operations % Change % Change EUR million I/09 IV/08 I/08 Q109/Q108 Q109/Q408 Net interest expense -32.0 -42.9 -41.3 23% 25% Foreign exchange gains and losses -23.6 -16.4 -8.7 - 171% - 44% Other financial items, of which 8.4 -2.1 8.1 4% Na PIK notes 5.6 6.4 4.1 Fair v
Slide 31: Transaction risk and hedges – Continuing Operations
Transaction risk and hedges – Continuing Operations as at 31 March 2009 EUR million USD GBP SEK JPY Estimated annual net operating cash flow exposure 550 500 -1 000 120 Transaction hedges as at 31 March 2009 375 300 -675 85 Hedging percentage as at 31 Mar. 2009 for the next 12 months 68% 60% 68% 71%
Slide 32: Capacity reductions in 2008
Capacity reductions in 2008 Mill Date Grade Capacity reduction, t Summa Mill Jan 2008 Newsprint, uncoated mag, book paper 415 000 Anjala Mill PM1 Feb 2008 Coated magazine paper 155 000 Baienfurt Mill End 2008 FBB 190 000 Kabel Mill PM 3 End 2008 Coated magazine 140 000 Paikuse Sawmill End 2008 Sawn