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Holmen's Year-End Report 2014

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Holmen's Year-End Report 2014 Holmen’s year-end report 2014 Quarter Full year SEKm 4-14 3-14 4-13 2014 2013 Net turnover 4 011 3 956 3 938 15 994 16 231 Operating profit excl. items affecting comparability 472 522 338 1 734 1 209 Operating profit 22 522 338 1 284 1 069 Profit after tax -4 385 230 907 711 Earnings per share, SEK -0.1 4.6 2.7 10.8 8.5 Return on equity, % 0.0 7.4 4.5 4.3 3.4 Cash flow before investing activities 414 738 444 2 176 2 011 Debt/equity ratio 0.28 0.29 0.29 0.28 0.29 . Operating profit, excluding items affecting comparability, for 2014 was SEK 1 734 million (2013: 1 209). The improvement in profit is due to higher prices for printing paper and sawn timber, a weaker Swedish krona and reduced production costs for paperboard. Operating profit for the fourth quarter, excluding items affecting comparability, amounted to SEK 472 million, which was SEK 50 million lower than in the third quarter owing mainly to seasonally higher staff and energy costs. Operating profit for 2014 after items affecting comparability amounted to SEK 1 284 million (1 069). In the fourth quarter, an impairment of SEK 450 million was recorded for Braviken Sawmill, which is reported as an item affecting comparability. Profit after tax amounted to SEK 907 million (711), which corresponds to earnings per share of SEK 10.8 (8.5). Excluding items affecting comparability, profit after tax amounted to SEK 1 258 million (820) and earnings per share was SEK 15.0 (9.8). The Board proposes a dividend of SEK 10 (9) per share. SEKm Holmen % SEKm Holmen % excl. items affecting comparability excl. items affecting comparability 6 000 15 750 15 4 000 10 500 10 2 000 5 250 5 0 0 0 0 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 Net sales Operating margin Operating profit Return on capital employed 1 Year-end report 2014 Holmen Paper Quarter Full year SEKm 4-14 3-14 4-13 2014 2013 Net sales 1 548 1 637 1 674 6 247 7 148 Operating costs -1 351 -1 445 -1 559 -5 522 -6 720 EBITDA 197 192 115 725 429 Depreciation and amortisation according to plan -147 -147 -185 -584 -738 Operating profit excl. items affecting comp. 51 45 -70 141 -309 Items affecting comparability* - - - - -140 Operating profit 51 45 -70 141 -449 Investments 93 47 -42 331 85 Operating capital 4 666 4 707 4 810 4 666 4 810 EBITDA margin, %** 13 12 7 12 6 Operating margin, %** 3 3 -4 2 -4 Production, '000 tonnes 343 320 354 1 325 1 545 Deliveries, '000 tonnes 322 341 363 1 305 1 574 * Items affecting comparability refers to an impairment loss and restructuring costs of SEKm -140 in Q1 2013 ** Excluding items affecting comparability Demand for printing paper in Europe decreased by 5 Compared with the third quarter, profit increased by per cent during January–November 2014 compared SEK 6 million to SEK 51 million. Production was to the same period last year. Price negotiations for good, but staff and energy costs increased 2015 are expected to result in lower prices. seasonally. Operating profit in the third quarter was negatively affected by maintenance shutdowns. Holmen Paper’s deliveries amounted to 1 305 000 tonnes in 2014, which was approximately 15 per In the first quarter of 2015, one of the newsprint cent lower than last year as a result of the closure of machines at Braviken Paper Mill will be rebuilt to two paper machines in autumn 2013. The strategic enable further growth in magazine paper. The product segments MF Magazine and book paper rebuilding will result in a production shutdown of accounted for just over half of deliveries. approximately 3 weeks. In the spring, the mill will switch over fully to virgin fibre-based production and Holmen Paper’s operating profit for 2014 was SEK the last recovered paper production line will be 141 million (-309), excluding items affecting closed. Costs and production losses associated with comparability. The improvement in profit is due to these measures are estimated to have a negative slightly higher selling prices, a weaker Swedish impact of approximately SEK 70 million on operating krona and reduced costs. Depreciation has profit for the first quarter. decreased following the implementation of closures. SEKm Holmen Paper % SEKm Holmen Paper excl. items affecting comparability excl. items affecting comparability 3 000 30 300 2 000 20 150 1 000 10 0 0 0 -150 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 Net sales EBITDA margin Operating profit EBITDA 2 Year-end report 2014 Iggesund Paperboard Quarter Full year SEKm 4-14 3-14 4-13 2014 2013 Net sales 1 320 1 310 1 141 5 113 4 618 Operating costs -968 -924 -889 -3 951 -3 740 EBITDA 352 387 252 1 161 878 Depreciation and amortisation according to plan -123 -124 -116 -487 -445 Operating profit 229 263 136 674 433 Investments 37 37 149 288 660 Operating capital 6 790 6 820 6 863 6 790 6 863 EBITDA margin, % 27 30 22 23 19 Operating margin, % 17 20 12 13 9 Return on operating capital, % 13 15 8 10 7 Production, paperboard, '000 tonnes 127 133 115 500 478 Deliveries, paperboard, '000 tonnes 122 125 112 493 469 The market for SBB and FBB was stable during the Compared with the third quarter, operating profit quarter. Deliveries to Europe from European decreased by SEK 34 million to SEK 229 million. producers were unchanged in 2014 compared to Production remained good, but costs increased 2013. seasonally. Iggesund Paperboard’s deliveries for 2014 A major maintenance shutdown will take place at the amounted to 493 000 tonnes, which was 24 000 mill in Workington in the first quarter of 2015. The tonnes higher than in 2013. shutdown is expected to have a negative effect of SEK 50 million as a result of production losses and Operating profit for 2014 was SEK 674 million (433). increased costs. The improvement in profit is mainly due to reduced production costs, but also higher deliveries and a In December a decision was taken to invest SEK weaker Swedish krona. 530 million to increase paperboard production at Workington by 20 000 tonnes and pulp production at Iggesund Mill by 50 000 tonnes. These investments, to be carried out in 2015–2016, will also improve product quality and production stability. SEKm Iggesund Paperboard % SEKm Iggesund Paperboard % 2 000 20 300 20 1 500 15 225 15 1 000 10 150 10 500 5 75 5 0 0 0 0 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 Net sales Operating margin Operating profit Return on operating capital 3 Year-end report 2014 Holmen Timber Quarter Full year SEKm 4-14 3-14 4-13 2014 2013 Net sales 315 313 322 1 352 1 175 Operating costs -293 -265 -297 -1 192 -1 131 EBITDA 23 48 25 160 45 Depreciation and amortisation according to plan -31 -31 -30 -123 -119 Operating profit excl. items affecting comp. -8 16 -5 37 -75 Items affecting comparability* -450 - - -450 - Operating profit -458 16 -5 -413 -75 Investments 32 8 7 55 21 Operating capital 901 1 323 1 361 901 1 361 EBITDA margin, %** 7 15 8 12 4 Operating margin, %** -3 5 -1 3 -6 3 Production, '000 m 186 172 203 742 710 3 Deliveries, '000 m 169 165 186 725 686 * Items affecting comparability refers to an impairment loss of SEKm -450 in Q4 2014 ** Excluding items affecting comparability The market for sawn timber deteriorated in the Compared with the third quarter, operating profit autumn as a result of increased supply. Selling decreased by SEK 24 million to SEK –8 million, prices decreased in the fourth quarter. excluding items affecting comparability. The decrease in operating profit is due to lower selling Holmen Timber increased productivity at both prices, higher raw material costs and seasonally sawmills and delivered 725 000 cubic metres in higher staff costs. 2014, which was 6 per cent higher than in 2013. Production at Braviken Sawmill runs well, but Operating profit for 2014 was SEK 37 million (-75), profitability is weak owing to high raw material prices excluding items affecting comparability. The in Southern Sweden. In the fourth quarter, an improvement in profit is due to higher selling prices, impairment of SEK 450 million was recorded on the a weaker Swedish krona and increased deliveries. sawmill’s non-current assets, which reduced The improvement was partly offset by higher raw operating profit. material prices in Southern Sweden. SEKm Holmen Timber % SEKm Holmen Timber excl. items affecting comparability excl. items affecting comparability 400 20 100 200 10 50 0 0 0 -200 -10 -50 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 IV/ 12 I/13 II/13 III/13 IV/ 13 I/14 II/14 III/14 IV/ 14 Net sales EBITDA margin Operating profit EBITDA 4 Year-end report 2014 Holmen Skog Quarter Full year SEKm 4-14 3-14 4-13 2014 2013 Net sales 1 461 1 250 1 376 5 641 5 694 of which from own forests 343 311 353 1 314 1 403 Operating costs -1 299 -1 158 -1 189 -5 077 -5 000 Depreciation and amortisation according to plan -9 -7 -9 -29 -34 Earnings from operations 153 86 178 535 660 Change in value of forests 27 114 71 282 264 Operating profit 180 200 249 817 924 Investments 13 47 31 86 54 Operating capital 17 340 17 148 16 813 17 340 16 813 Return on operating capital, % 4 5 6 5 6 3 Harvesting company forests, '000 m 849 788 882 3 297 3 465 Demand for timber in Sweden was high in the fourth Compared with the third quarter, earnings from quarter, while demand for pulpwood was normal.
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