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Preliminary financial results Q4 2024
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Q4 2024 www.arcticpaper.com 2 DISCLAIMER Please read the information below carefully This presentation (the ‘Presentation’) was prepared by Arctic Paper SA (the ‘Company’) for information purposes only for use by investors, banks and the Company’s customers as well as market analysts, and under no circumstances may it be treated as a part of an invitation or offer to purchase securities, an invitation to make investments or conduct transactions regarding securities, an inducement to make purchase offers or a recommendation to conclude any transactions, in particular transactions regarding the Company's securities. The information contained in the Presentation was taken from publicly available sources which the Company believes to be reliable. However, the Company cannot guarantee its reliability or completeness, except for the information on the Company and its Group. The Company shall not be held liable for the consequences of decisions made on the basis of or in reliance on the information contained in this Presentation. The information contained in the Presentation has not been independently verified and may be subject to change at any time. The publication of the data contained in the Presentation by the Company does not constitute a breach of the provisions of the law which applies to companies whose shares are listed on the regulated market, in particular the regulated market operated by the Warsaw Stock Exchange in Poland and NASDAQ OMX Stockholm in Sweden. The information contained herein has been published by the Company in its current and periodic reports, or constitutes a supplement thereto which is not required to be published by the Company in order to comply with the Company’s reporting requirements as a listed company. Under no circumstances should information contained in this Presentation be construed as the explicit or implicit submission of a representation, or warranty of any type by the Company or by persons acting on its behalf. Furthermore, neither the Company nor any person acting on its behalf shall be held liable in any respect for any damage which may arise as a result of negligence or for any other cause as a result of the use of this Presentation or any information contained in it, or for damage which may otherwise arise in connection with information constituting a part of this Presentation. The Company is not obliged to publish updates and amendments to the information, data and representations contained in this Presentation as a result of a change of the Company’s strategy or intentions, or the appearance of unexpected facts or circumstances which affect such strategy or intentions of the Company, unless such an obligation arises from the provisions of law. This Presentation contains information on the paper industry. With the exception of information indicated as originating from a specified source, the market information referred to above has been prepared on the basis of data received from third parties who are named in this Presentation and contains estimates, assessments, corrections and opinions based on the Company's experience and knowledge of the sector in which it conducts business. Because the market information referred to above may have been partially prepared with the use of estimates, assessments, corrections and opinions, and has not been verified by independent entities, to a certain extent, this information is of a subjective nature, with the exception of the information which has been indicated as information originating from third parties from a specified source. It is presumed that estimates, assessments, corrections and opinions are based on reasonable grounds and that the market information which has been prepared duly reflects the situation of the industry on the markets on which the Company conducts business. However, there is no certainty that the estimates, assessments, corrections and opinions are the most appropriate basis for drawing conclusions on the market information or that market information taken from other sources may not differ significantly from the market information contained in this Presentation. The Company would like to point out to the readers of this Presentation that the only reliable source of data on Arctic Paper's financial results, forecasts and events, as well as the Company’s indicators, is the current and periodic reports submitted by the Company in compliance with reporting requirements under Polish and Swedish law. THIS PRESENTATION CONTAINS PRELIMINARY FINANCIAL RESULTS FOR Q4 2024.
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Q4 2024 www.arcticpaper.com 3 Agenda 1 2 Pulp Paper 4 5 Financial performance Energy 3 Packaging 6 Focus
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www.arcticpaper.com 4 Q4 2024 SUMMARY PRELIMINARY Q4 2024 Arctic Paper Group Q4 2024 vs. Q4 2023 Net sales (PLN mn) 810.8 (Q4 2024) 825.9 (Q4 2023) EBITDA (PLN mn) 38.8 (Q4 2024) 96.3 (Q4 2023) Net debt/EBITDA* -0.01x (EOP Q4 2024) - 0.73x (EOP Q4 2023) • last 12 months
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www.arcticpaper.com 5 Q4 2024 SUMMARY PRELIMINARY YTD DEC 2024 Arctic Paper Group YTD DEC 2024 vs. YTD DEC 2023 Net sales (PLN mn) 3 434.7 (YTD DEC 2024) 3 549.2 (YTD DEC 2023) EBITDA (PLN mn) 298.6 (YTD DEC 2024) 475.3 (YTD DEC 2023) Paper/Pulp EBITDA (PLN mn) 243/55 (YTD DEC 2024) 376/99 (YTD DEC 2023) Net debt/EBITDA* -0.01x (EOP DEC 2024) - 0.73x (EOP DEC 2023) * last 12 months
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Q4 2024 www.arcticpaper.com 6 PAPER
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Q4 2024 www.arcticpaper.com 7 MARKET DATA Fine paper average market prices DEC 2024 COMPARED TO SEP 2024 UWF average price change -1,2% CWF average price change -1,8% DEC 2024 COMPARED TO DEC 2023 UWF average price change -0,2% CWF average price change 2,2% Source: Arctic Paper based on RISI data. GRAPHIC FINE PAPER PRICES – GERMAN MARKET 600 700 800 900 1000 1100 1200 1300 1400 UWF 80 g Sheets UWF 80 g Reels CWF 90 g Sheets CWF 90 g Reels
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Q4 2024 www.arcticpaper.com 8 OPERATING DATA Average YTD 2024 use of production capacity: 75% 17% HIGHER THAN AVERAGE YTD 2023 Q4 2024 total sales volume: 116k tons 3% HIGHER THAN IN Q4 2023 PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS PAPER SALES VOLUME 113 116 168 166 165 168 117 113 97 108 113 144 114 112 116 99% 85% 71% 55% 66% 70% 86% 66% 70% 69%
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Q4 2024 www.arcticpaper.com 9 OPERATING DATA * price chart includes impact of fx fluctuations, product mix and market mix Total revenue Q4 2024 (PLN 576mn) INCREASED BY 3% COMPARED TO Q3 2024 Average price Q4 2024 (PLN 4.97k) DECREASED BY 1% COMPARED TO AVERAGE IN Q3 2024 PAPER SALES REVENUE (PLN mn) PAPER SALES REVENUE PER TONNE (PLN k)* 581 576 689 949 770 567 581 574 576 4,11 5,74 6,57 5,85 5,14 5,04 4,97
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Q4 2024 www.arcticpaper.com 10 PRODUCTS • Top 3 brands in revenue share • No 1 in European High Quality Bookpaper Sales • No 1 in European Design Paper Sales ADVANCED OFFSET PRODUCTION IN HEART OF EUROPE MOST COMPLETE MATT COATED PAPER ASSORTMENT BIGGEST UNCOATED DESIGN BRAND
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Q1 2023 www.arcticpaper.com 11 Germany 21% Poland 17% UK & IE 12% Austria & CE 10% France 9% Baltics 6% The Nordics 10% Benelux 4% Outside Europe 2% Rest of Europe 9% PRODUCTS Geographical split of sales www.arcticpaper.com Q4 2024
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Q4 2024 www.arcticpaper.com 12 CLIENT STRUCTURE Market segments/products portfolio/target grups BUYING CUSTOMERS Printing Houses Clients who purchase the Group’s paper products directly. Merchants Direct customers who purchase, stock and distribute the Group’s paper for resale to other users. Publishers Direct and indirect customers, who uses the Group’s paper products for use in their publication activities, i.e., Random House, Bonniers, Hachette, Holtzbrinck, etc. NON-BUYING CUSTOMERS Brand Owners Predominantly indirect customers, who use our products, i.e., Deutsche Bank, Karl Lagerfeld, Kenzo, L’Oreal, Louis Vuitton, Nike, Mercedes Benz, etc. Creatives Predominantly indirect customers but are of significant importance in requiring and recommending our products to end users.
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Q4 2024 www.arcticpaper.com 13 PULP
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Q4 2024 www.arcticpaper.com 14 MARKET DATA Pulp – European pulp prices AVERAGE PRICE Q4 2024 COMPARED TO Q4 2023 NBSK (long fiber): 28% higher BHKP (short fiber): 21% higher AVERAGE PRICE Q4 2024 COMPARED TO Q3 2024 NBSK (long fiber): 5% lower BHKP (short fiber): 20% lower PULP PIX INDEXES EUROPE (USD PER TONNE) Source: Arctic Paper based on Foex data 1 260 1 342 1 430 1 498 1 429 1 370 1 240 1 147 1 244 1 397 1 612 1 567 1 483 1 140 1 177 1 308 1 380 1 380 1 280 958 809 1 001 1 220 1 440 1 261 1 000
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Q4 2024 www.arcticpaper.com 15 OPERATING DATA Pulp production & deliveries PULP PRODUCTION (1,000 TONNE) PULP DELIVERIES (1,000 TONNE) 85 73 100 106 96 87 87 83 102 85 90 89 82 73 Q4 2024 total production: 75k tons 17% LOWER THAN IN Q3 2024 7% LOWER THAN IN Q4 2023 Q4 2024 total deliveries: 73k tons 11% LOWER THAN IN Q3 2024 14% LOWER THAN IN Q4 2023 80 75 103 111 96 87 90 93 89 80 84 91 91 75
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Q4 2024 www.arcticpaper.com 16 OPERATING DATA Revenue and prices Total revenue Q4 2024 (SEK 626mn) DECREASED BY 2% COMPARED TO Q4 2023 Average price in Q4 2024 (SEK 8.6k per tonne) INCREASED BY 14% COMPARED TO Q4 2023 PULP SALES REVENUE (SEK mn) PULP SALES REVENUE PER TONNE (SEK) 637 626 784 730 681 637 711 626 7 404 8 439 8 215 7 538 8 025 8 599
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Q4 2024 www.arcticpaper.com 17 Board and packaging 23% Printing and writing papers 1% Electrotechnical applications 22% Special applications 14% Tissue paper 11% Fiber cement 3% Filters 23% Other 3% PULP – REPLACEMENT MATERIAL FOR PLASTIC Pulp Sales (Rottneros) by application 2024
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Q4 2024 www.arcticpaper.com 18 PACKAGING
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Q4 2024 www.arcticpaper.com 19 PACKAGING PAPER SALES DEVELOPMENT (t) DEVELOPMENT Munken Kraft Uncoated packaging paper G-Flexmatt Coated packaging paper STABLE SALES OF PACKAGING PAPERS 0 4 000 8 000 12 000 16 000 20 000 2018 2019 2020 2021 2022 2023 2024
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Q4 2024 www.arcticpaper.com 20 POWER
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Q4 2024 www.arcticpaper.com 21 ENERGY SEGMENT Power plants: • CHP power plant (Poland) • PV (Poland, Sweden) • Thermal waste incineration (Sweden) • Hydroturbines (Sweden) • Biomass boilers (Sweden) Energy mix 70% 20% 10% green energy (bio & solar & hydro) natural gas RDF/waste incineration
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Q4 2024 www.arcticpaper.com 22 ENERGY SEGMENT - ONGOING PROJECTS • 9,6 MW PV (Poland) • Search for PV projects aquisition (Poland) • Modernisation of biomass boiler (Sweden) • Wood pellet production line (Sweden) • Energy storage systems (Sweden & Poland) Group will have over 30 MW of PV installed capacity by the summer of 2025
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Q4 2024 www.arcticpaper.com 23 FINANCIAL PERFORMANCE
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Q4 2024 www.arcticpaper.com 24 Q4 2024 EBITDA PLN 38.8mn 2024 EBITDA 300 PLN mn – above 2014-2021 level, despite low capacity utilisation EBITDA EVOLUTION 2017 – 2024 (PLN mn) Effective hedging of both segments – to stabilize financial results in medium & long term perspective 0 100 200 300 400 500 600 700 800 900 1 000 2017 2018 2019 2020 2021 2022 2023 2024 Paper Segment Pulp Segment
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Q4 2024 www.arcticpaper.com 25 * rolling 12 months NET DEBT/EBITDA 2020 – 2024 Strong financial position 0,49 0,70 0,57 0,66 0,36 0,33 -0,02 -0,22 -0,28 -0,27 -0,19 -0,59 -0,73 -0,77 -0,35 -0,08 -0,01
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Q4 2024 www.arcticpaper.com 26 CAPEX STRUCTURE BY SEGMENTS 2024 The path to execute 4P strategy 33% 31% 26% 9% paper pulp power packaging
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Q4 2024 www.arcticpaper.com 27 OUTLOOK FOR 2025 • Dividend proposal 0,70 PLN per share, it is 30% of net p rofit – in line with divided policy • Concerns about European economy growth • Expected stability in prices and availability of raw ma terials • Expectations of positive changes in the Green deal and r eduction of bureaucratic barriers • Headwinds from the US • Capex back to normal level - focus on completing started pro jects related to 4P • Focus on maintaining a strong balance and cash flow
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Q4 2024 www.arcticpaper.com 28 SHARING OUR STORY WITH YOU HEDGED AGAINST VOLATILITY OF PROFITABILITY & HIGH FLUCTUATION OF ENERGY GROWTH IN PACKAGING INCREASING SHARE OF RENEWABLE AND FOSSIL-FREE ENERGY PREDICTABLE CAPEX AIMED AT CONTINUED IMPROVEMENTS OWNER OF BRANDS VALUED BY CUSTOMERS ESTABLISHED POSITION ON THE MARKET WITH A HIGH ENTRY BARRIER STABLE OWNERSHIP STRUCTURE SUSTAINABLE PRODUCTION PROCESSES
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Q4 2024 www.arcticpaper.com 29 4P For Future Arctic Paper Packaging Pulp Power