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INTERIM REPORT JANUARY-MARCH 2018
2018-04-20 Petra Einarsson, CEO, Susanne Lithander, CFO
KEY HIGHLIGHTS
2
Stable production
Strong results - adjusted EBITDA margin 19%
High demand - net sales up 5%
Investments progressing according to plan
Positive market outlook in both the short and long term
2,276NET SALES SEK MILLION
467EBITDA SEK MILLION
21%EBITDA MARGIN
Net sales + 6% vs Q1-17Increased prices
Improved product mix
Lower production volumes
EBITDA + 19% vs Q1-17Wood and pulp prices continues to
increase
Market expected to remain solid Potential to increase prices
Successful relaunch for D-sack
STRONG DEMANDPACKAGING PAPER Q1 DEVELOPMENT
3
2,164NET SALES SEK MILLION
473EBITDA SEK MILLION
22%EBITDA MARGIN
Net sales +2% vs Q1-17Stable production
Improved product mix
EBITDA +8% vs Q1-17Cost inflation
Market expected to remain solid
Tetra Recart challenges other
packaging materials
STABLE PRODUCTIONCONSUMER BOARD Q1 DEVELOPMENT
4
953NET SALES SEK MILLION
210EBITDA SEK MILLION
22%EBITDA MARGIN
Net sales +2% vs Q1-17Increased prices
Improved product mix
Lower production volumes
EBITDA +11% vs Q1-17Lower fixed costs
Market expected to remain solidPotential to increase prices
The world’s strongest fluting
SOLID RESULTCORRUGATED SOLUTIONS Q1 DEVELOPMENT
5
6
New capacity to capture growth
Streamlined product portfolio
More focused production units
Reduced risks and volatility
STRONG POTENTIAL IN NEXT GENERATION
FibreForm
Sack
Liquid board
MF-paper
MG-kraft
Liquid board
Coated and
White Top
Light weight White
GRUVÖN PROGRESSING ACCORDING TO PLAN
7
Start up
2020 2021
EBITDA positive
Q4
2016
Q1
2019
Project start
Certification material and
simpler filler material
~300 ktonnes
commercial paper
Keeping time frame
Reinforced organisationProgramme management office Machine ready
Mill ready
Product ready
Business ready
Construction
2023
Fully ramped up
~550 ktonnes
WORLD-LEADING MG CENTRE IN SKÄRBLACKA
8
Tervasaari
Skärblacka
Production start
in Skärblacka
Q4
2018
Q4
2019
Machine is fully
ramped up
Q2
2016Q1
2018
Close down in Tervasarri
and move to Skärblacka ~40 ktonnes ~90 ktonnes
Project on track
The Tervarsaari machine is under
start-up in Skärblacka (PM10)
The machine is expected to produce
~40 ktonnes this year
When fully ramped late 2019 PM10
will produce ~90 ktonnes MG paper*
Positive contribution
to results
*Machine Glazed – high-gloss paper
FOCUS ON OPERATIONAL EXCELLENCE
9
Safety culture programme
A customer-centric quality
process
Production stability roadmaps
Occupational Health & Safety
Product Quality
Production Stability
FINANCIAL TARGETS
Area FY target Outcome Q1 2018
Growth
EBITDA
ROCE
Net debt/EBITDA
3-4%
18%>17%
13%>13%
1.55<2.5
✔
✔
✔
✔5%
10
HIGHER SALES PRICES DRIVE EBITDA
11
200
400
600
800
1000
1200
1400
EBITDA Q12017
Cost/volume Sales prices Currency Woodshortage
Fibre Chemicals EBITDA Q12018
1 065
923
INCREASED NET SALES
12
Continued strong demand in all
business areas
Increased sales prices
Stable production
Negative effect from shortage of
wood
Positive currency effects
5 6365 897
2000
3000
4000
5000
6000
7000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Net sales, SEKm
120
125
130
135
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
TCW index
Source: Riksbanken – Total Competitiveness Weight Index
NEGATIVE EFFECTS FROM COST INCREASES
13
Demand-driven price increase
for wood
Pulp prices at all-time high
levels
Increased chemical prices
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 jan-18
Caustic Soda, EUR/dmt
80
100
120
140
160
180
2005 2008 2011 2014 2017
Wood Cost Index
Source: BillerudKorsnäs – Total consumption hard and soft wood
Source: IHS
STRONG UNDERLYING CASH FLOW
14
Solid cash flow from operations
to handle investments
ROCE in line with target despite
increased capital employed
Net debt increased to
MSEK 6,056 (4,165)
High interest from debt investors
Bergvik Öst deal expected to be
finalised end of 2018
261
806
0
400
800
1200
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1,2 1,3 1,31,1 1,2
1,4 1,41,5 1,6
0
0,5
1
1,5
2
2,5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Target: <2.5x
Net debt/EBITDA
Cash flow from operations, SEKm
2018 OUTLOOK
Demand and order situation are expected to be strong with normal
seasonal variations for all business areas
Demand-driven cost increases expected to continue
The financial impact on Q2 2018 from wood shortage is estimated
to MSEK 50-75
Overall capacity will remain at 2017 levelIncreased volume for Consumer Board
Reduced volumes for Corrugated Solutions and Packaging Paper due to impact
from Gruvön investment
One-off impact on EBIT from investment project will be SEK ~210 millionSEK 75 million due to longer stop in Gruvön
SEK 75 million due to education, extra personnel etc.
Increased depreciation SEK 60 million
15
SUMMARY
16
Stable production
Strong results - adjusted EBITDA margin 19%
High demand - net sales up 5%
Investments progressing according to plan
Positive market outlook in both the short and long term
SAVE THE DATE
17
Capital Markets Day: Stockholm – Monday 17 September
Capital Markets Briefing: London – Tuesday 18 September
More info will be posted on www.billerudkorsnas.com
Disclaimer statementThis presentation may contain forward-looking statements. Such statements are based on our current expectations and BillerudKorsnäs do not
give any assurances that such statements will materialise. Because these forward-looking statements involve both known and unknown risks
and uncertainties, the outcome could differ materially from the information set out in the forward-looking statements. These risks and
uncertainties include, but are not limited to, those that are described in BillerudKorsnäs most recent annual report, which is available at
www.billerudkorsnas.com. The forward-looking statements included in this presentation speak only as of the date of the presentation and are
subject to change without notice. BillerudKorsnäs undertakes no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, other than as required by law.
