Norsk Treforedlingsforum Norske Skog Tom Rogn, Vice President Investor Relations 24. november 2015

Transkript

1 Norsk Treforedlingsforum Norske Skog Tom Rogn, Vice President Investor Relations 24. november 2015

2 Prosessindustrien i Norge har møtt store utfordringer over en lengre periode - det krever kontinuerlig omstilling

3 Treforedlingsbransjens utfordringer i Norge Sterk norsk krone i lange perioder svekker inntektsgrunnlaget når >95% eksporteres Et nasjonalt kostnadsnivå tilpasset oljeøkonomien Råvarer og energi utgjør ca 70% av kostnadene og har de siste 10 årene økt vesentlig mer enn inntektene Transportkostnadene utgjør ca 25% av råvarekost og ca 20% av salgspris 3

4 Publikasjonspapir var et vekstmarked frem til 2007 Årlig vekst i etterspørsel snudde raskt fra +1-2% til -5-8% M tonnes 12 Trend demand growth = GDP growth % per år Elektronisk substitusjon Mindre lesing av aviser og blader Mindre annonsering Source: PPPC Overkapasitet medførte fallende priser 4 4

5 Description of situation in 2010 High leverage NOK 12 billion in net interest bearing debt Substantial deterioration of markets and results after 2008/2009 EBITDA from about NOK 2,0 to 1,2 billion Traditional industrial organization Big centralized staffs serving producing units Measures on cost and volume Global presence without synergies across the group Leadership focus and resource allocation to «new businesses» Inherited challenges: Legal structures Shareholder structures Governance structure The coat was substantially bigger than the man

6 Large acquisitions large problems 36 billion NOK used in 10 years Bruck 1998 Fletcher Challenge 2000 Parenco and Walsum 2001 Pan Asia bill NOK 21 bill NOK 10 bill NOK 4 bill NOK High leverage Complex and large organisation Total Market value of equity 2002 ~36 bill NOK ~30 bill NOK Some less profitable mills 6

7 The restructuring process A free choice? No consciousness about restructuring of Norske Skog The reality and current situation were the main force for changes More conscious attitude: maybe things had been different Advantage to wait (I) forced changes (II) existing mills and manning determined restructuring effects Necessity of survival: urgency and speed in processes Right people management? Right legal structure? Right analysis? 7

8 Substantial reduction in net interest bearing debt NOK mill Sale of assets amount to NOK 4 billion since 2010 More than 150 divestments of small or big assets since

9 Turnarounds takes time Real restructuring Closure non profitable units Change of operating model Sale of profitable units Simple cost cuts Manning reductions Sale of noncore business Brutal manning reductions 9

10 New operating model established for permanent change Simplifying a slow and expensive decision making processes Slim down of a large and bureaucratic head office Shift focus from volume to cash flow Define clear organisational roles and responsibilities Simplify legal structure Seek cheaper financing New business culture (cash flow, responsibility, decision making, consequence) 10

11 Fabrikker med høye kostnader forsvinner, fabrikker med lave kostnader vinner

12 European newsprint price again at cash cost level Cash cost pricing leads to supply side action as seen in 2010 As cash negative capacity is forced out of the market 12

13 Magazine prices in Europe are coming up LWC prices have increased this autumn with market balance and fine paper prices SC prices supported by US import duties and improved operating rate in Europe 13

14 Energi, oljederivater og fiber nesten 2/3 av kostnadene Energi og kjemikalier er viktige kostnadskomponenter for konsernet Lavere oljepris gir kostnadsfordeler 1/3 av energien er spoteksponert Kjemikaler i stor grad avledede oljeprodukter Kostnadskomponenter (%) 14

15 NOK depreciation increases reported debt Underlying net debt significantly reduced Current net debt at 2010 FX rates NOK 7 billion compared to NOK 8,4 billion reported Net debt and NOK depreciation to EUR and USD NOK mill Net debt NOK depreciation* *EUR and USD; 2010 =

16 NOK depreciation improves operations NOK depreciation makes Skogn and Saugbrugs more competitive Third machine at Skogn, which was out commercially in 3Q15, will restart in November A 1% NOK depreciation improves EBITDA by NOK 30 million per year

17 Magazine demand holding up World magazine demand decreasing half of newsprint. European magazine demand at structural trend European standard newsprint demand weaker than expected in 2015, improved newsprint demand flat. Fair market balance for newsprint overall due to capacity closures Domestic Australian demand down around 10% for newsprint (Oceania newsprint demand derived from variable trade data). Magazine demand is stable Demand YTD August PPPC / EURO-GRAPH * Including improved for Europe 17

18 Print is a sustainable business Digital ads face threats Apple s new ios9 operating system to allow users to block all ads through its Safari web-browser Digital shift gone too far, print more powerful than realized (WPP, Saatchi & Saatchi) Print is the revenue source More than 90% of all newspaper revenue come from the print edition Digital versions are to a large extent free and cross subsidised by print revenue Newspapers are dependent on print revenue Print is the ad channel* Paper ad retention 5 times higher than TV and 10 times higher than online 50% of high value goods (cars, domestic appliances) bought with reference to a paper ad *Australian survey 18

19 I USA sier 70% av kjedene at papir er kritisk for salg 19

20 Forlagene er økonomisk avhengig av papir Trykkpapir genererer mye reklameinntekter Søkemotorer kaprer en betydelig del av den elektronisk presenterte reklamen Reklameinntekter for aviser i USA (%) Newspaper Association of America 20

21 Papir er nest største reklamekanal etter TV Papirdistribuert reklame har en markedsandel på 22% Verdens totale reklamemarked er på rundt USD 500 milliarder Kilde: Zenith Optimedia 21

22 Veien fremover - marked

23 Today 100% Publication Paper Tomorrow 75% Publication Paper 25% Bioenergy Refinancing done in 2015 allows smart group investments 23

24 Growth opportunities beyond publication paper Biogas projects at mill sites, started at Saugbrugs Construction started and on schedule for yearend 2016 completion Wood pellets investments in New Zealand Construction started and on schedule for yearend 2016 completion Stand-alone concept acquired, expansion to the Tasman site to be considered Geothermal power plant at the Tasman site 22 MW power plant in operation since 2013 Unlike fossil fuels, biomass is renewable Tissue conversion at Bruck in Austria JV with partner Roto-cart formalized Project progressing in accordance with plan 24

25 Nature s Flame and tissue growth beyond paper Biogas project at Saugbrugs being considered replicated at our other mills Stand-alone pellets concept with large on site potential at Tasman Tissue project with limited market risk and capex spend through JV partner GOE annual run-rate contribution from growth projects 25

26 Prosessindustrien i Norge har en fremtid, gitt visjonære politikere

27 Omstillingen vil på sikt gi varige effekter Om produktene Våre produkter er resirkulerbare vi er den reelle fornybare industrien basert på fiber og energi. Intet produkt resirkuleres mer enn papir Ingen miljøgrunn til ikke å bruke papir fremfor digitalt Papir vil være en bærekraftig og effektiv kommunikasjonskanal også i morgen Om klima Bioøkonomien vil ikke være bærekraftig uten en slagkraftig treforedlingsindustri Ingen CO2 løsning uten en levende skog Norske Skogs bioenergisatsing avfall blir ressurs og gjennom gassproduksjon reduseres CO2 fotavtrykket 70% Om samfunnet Skogindustrien skaper verdier der olje- og fiskeressursene ikke er Skogindustrien skaper fremtidige og bærekraftige distriktsarbeidsplasser

28 Skogbasert industri har stort potensial Basert på fornybart, biobasert råstoff Råstoff som kan "brukes til alt" særlig i en lavkarbonøkonomi Kompetanse som konkurransefortrinn Men forutsetter Stabile og bedre rammebetingelser Aktiv skog- og transportpolitikk Investeringsvilje og kapitaltilgang Økt satsing på innovasjon og utvikling Treforedlingsindustrien er en del av løsningen!

29 Videreutvikling skjer på eksisterende anlegg Utviklingsområde Bio-Chemicals Bio-fuel/ Bio energy products Bio-gas from anaerobic effluent treatment PHA from activated sludge for bio plastic RCF/ DIP Research CTP TMP/ PGW Research CTP & PFI Micro fibrillated cellulose & nano-cellulose -CTP, PFI & FLPPR Fibre/ Polymer Composites Ansvarlig Golbey Tasman Skogn and Saugbrugs Boyer Golbey for CTP contract but with participants from relevant BU s in appropriate steering committee Co-ordinated by Innovation network with Saugbrugs, Golbey & Bruck in R&D steering committees Saugbrugs Boiler Ash Evaluation and potential applications Oriented Strand Board, Cross Laminated Timber, Strand Lumber Golbey MNI, Golbey, Albury respectively. 29

30 Dårlige rammebetingelser = høyere kostnader Regjering og Storting må kontinuerlig forenkle, effektivisere og harmonisere hele verdikjedens rammebetingelser

31 Spørsmål & Svar