Borregaard

Annual Report • Jul 17, 2018

Income Statement Borregaard Group Q2 2018
Amounts in NOK million	2018	1.4-30.6 2017	1.1-30.6 2018	2017	1.1-31.12 2017
Operating revenues	1 199	1 256	2 416	2 392	4 618
Operating expenses	-960	-938	-1 925	-1 800	-3 563
EBITDA adj.	239	318	491	592	1 055
Depreciation property, plant and equipment	-75	-75	-150	-149	-306
EBITA adj.	164	243	341	443	749
Amortisation intangible assets	-1	-1	-2	-2	-4
Other income and expenses	0	0	0	0	-9
Operating profit	163	242	339	441	736
Financial items, net	-4	-1	-11	-5	-21
Profit before taxes	159	241	328	436	715
Income tax expence	-36	-60	-73	-108	-157
Profit for the period	123	181	255	328	558
Profit attributable to non-controlling interests	-9	0	-14	-1	-8
Profit attributable to owners of the parent	132	181	269	329	566
Earnings per share (NOK)	1,32	1,81	2,69	3,29	5,66
EBITDA adj. margin	19,9 %	25,3 %	20,3 %	24,7 %	22,8 %
EBITA adj. margin	13,7 %	19,3 %	14,1 %	18,5 %	16,2 %

Interim condensed statement of financial position Borregaard Group
	30.6.	31.3.	31.12.
Amounts in NOK million	2018	2018	2017
Assets:
Intangible assets	103	105	111
Property, plant and equipment	3 345	3 197	3 126
Other assets	89	123	93
Investments in joint venture	102	118	118
Non-current assets	3 639	3 543	3 448
Inventories	784	718	734
Receivables	1 004	1 059	971
Cash and cash deposits	90	92	180
Current assets	1 878	1 869	1 885
Total assets	5 517	5 412	5 333
Equity and debt:
Group equity	2 978	3 091	2 889
Non-controlling interests	137	128	107
Equity	3 115	3 219	2 996
Provisions and other liabilities	250	282	277
Interest-bearing liabilities	1 011	757	743
Non-current liabilities	1 261	1 039	1 020
Interest-bearing liabilities	273	279	283
Other current liabilities	868	875	1 034
Current liabilities	1 141	1 154	1 317
Equity and liabilities	5 517	5 412	5 333
Equity ratio (%):	56,5 %	59,5 %	56,2 %

Interim condensed cash flow statement Borregaard Group Q2 2018
		1.4-30.6	1.1-30.6		1.1-31.12
Amounts in NOK million	2018	2017	2018	2017	2017
Profit before taxes	159	241	328	436	715
Amortisation, depreciation and impairment charges	76	76	152	151	316
Change in net working capital, etc	7	-117	-135	-273	-92
Dividend (share of profit) from JV	3	-1	3	-3	11
Taxes paid	-66	-41	-138	-71	-170
Cash flow from operating activities	179	158	210	240	780
Investments property, plant and equipment and intangible assets *	-187	-215	-364	-374	-968
Other capital transactions	5	5	9	7	10
Cash flow from Investing activities	-182	-210	-355	-367	-958
Dividends	-199	-349	-199	-349	-349
Proceeds from exercise of options/shares to employees	4	0	21	11	11
Buy-back of shares	-8	0	-30	-29	-29
Gain/(loss) on hedges for net investments in subsidiaries	-27	-11	13	-2	8
Net paid to/from shareholders	-230	-360	-195	-369	-359
Proceeds from interest-bearing liabilities	969	258	1 202	263	668
Repayment of interest-bearing liabilities	-731	-2	-933	-29	-258
Change in interest-bearing receivables/other liabilities	-4	15	-11	38	46
Change in net interest-bearing liablities	234	271	258	272	456
Cash flow from financing activities	4	-89	63	-97	97
Change in cash and cash equivalents	1	-141	-82	-224	-81
Cash and cash equivalents at beginning of period	92	182	180	265	265
Change in cash and cash equivalents	1	-141	-82	-224	-81
Currency effects cash and cash equivalents	-3	2	-8	2	-4
Cash and cash equivalents at the end of the period	90	43	90	43	180
* Investment by category:
Replacement investments	51	46	83	124	344
Expansion investments	136	169	281	250	624

Quarterly segment information Borregaard Group

1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard 3 939 4 164 1 113 1 167 1 102 1110 4 492 1 136 1 256 1 089 1 137 4 618 1 217 1 199 2 416 Performance Chemicals 1 822 2 008 550 584 515 512 2 161 550 582 523 521 2 176 555 571 1 126 Speciality Cellulose 1 459 1 436 383 385 416 406 1 590 412 468 383 435 1 698 434 427 861 Other Businesses 682 755 190 206 179 201 776 183 213 197 190 783 239 212 451 Eliminations - 24 - 35 - 10 - 8 - 8 - 9 - 35 -9 -7 -14 -9 -39 -11 -11 -22 EBITDA adj. 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard 730 758 236 269 283 233 1 021 274 318 272 191 1 055 252 239 491 Performance Chemicals 410 474 146 147 141 115 549 141 151 111 90 493 128 115 243 Speciality Cellulose 248 193 76 91 105 72 344 112 127 114 89 442 89 92 181 Other Businesses 72 91 14 31 37 46 128 21 40 47 12 120 35 32 67 Depreciations and write downs 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard - 244 - 261 - 65 - 69 - 67 - 73 - 274 -74 -75 -75 -82 -306 -75 -75 -150 Performance Chemicals - 22 - 27 - 8 - 7 - 9 - 8 - 32 -9 -10 -11 -14 -44 -13 -13 -26 Speciality Cellulose - 85 - 89 - 23 - 23 - 23 - 25 - 94 -23 -24 -23 -22 -92 -25 -25 -50 Other Businesses - 137 - 145 - 34 - 39 - 35 - 40 - 148 -42 -41 -41 -46 -170 -37 -37 -74 EBITA adj. 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard 486 497 171 200 216 160 747 200 243 197 109 749 177 164 341 Performance Chemicals 388 447 138 140 132 107 517 132 141 100 76 449 115 102 217 Speciality Cellulose 163 104 53 68 82 47 250 89 103 91 67 350 64 67 131 Other Businesses - 65 - 54 - 20 - 8 2 6 - 20 -21 -1 6 -34 -50 -2 -5 -7 Amortisation 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard 0 - 1 - 1 - 1 - 1 - 1 - 4 -1 -1 -1 -1 -4 -1 -1 -2 Performance Chemicals 0 - 1 - 1 - 1 - 1 - 1 - 4 -1 -1 -1 -1 -4 -1 -1 -2 Speciality Cellulose 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Businesses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other income and expenses 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard -30 37 0 13 0 0 13 0 0 0 -9 -9 0 0 0 Performance Chemicals 0 -9 0 0 0 0 0 0 0 0 -9 -9 0 0 0 Speciality Cellulose 0 46 0 73 0 0 73 0 0 0 0 0 0 0 0 Other Businesses - 30 0 0 - 60 0 0 - 60 0 0 0 0 0 0 0 0 Operating profit (EBIT) 1.1-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.7-30.9 1.10-31.12 1.1-31.12 1.1-31.3 1.4-30.6 1.1-30.6 Amounts in NOK million 2014 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Borregaard 456 533 170 212 215 159 756 199 242 196 99 736 176 163 339 Performance Chemicals 388 437 137 139 131 106 513 131 140 99 66 436 114 101 215 Speciality Cellulose 163 150 53 141 82 47 323 89 103 91 67 350 64 67 131 Other Businesses - 95 - 54 - 20 - 68 2 6 - 80 -21 -1 6 -34 -50 -2 -5 -7	Operating revenues

Quarterly segment information Borregaard Group

Hedging effects & currency exposure
	1.1-31.12	1.1-31.12	1.1-31.3	1.4-30.6		1.7-30.9 1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.7-30.9	1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.1-30.6
Amounts in NOK million	2014	2015	2016	2016	2016	2016	2016	2017	2017	2017	2017	2017	2018	2018	2018
Borregaard - EBITA hedging gains & losses	-51	-241	-43	-24	-24	-24	-115	-22	-35	-5	-10	-72	3	-6	-3
Performance Chemicals	-12	-76	-12	-7	-7	-6	-32	-6	-12	0	0	-18	2	0	2
Speciality Cellulose	-32	-129	-22	-11	-13	-13	-59	-10	-17	-3	-6	-36	2	-2	0
Other Businesses	- 7	-36	-9	-6	-4	-5	-24	-6	-6	-2	-4	-18	-1	-4	-5
Borregaard - USD EBITA currency exposure (approx)	250	214					208					206
Borregaard - EUR EBITA currency exposure (approx)	89	78					92					84
Sales revenues
	1.1-31.12	1.1-31.12	1.1-31.3	1.4-30.6		1.7-30.9 1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.7-30.9	1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.1-30.6
Amounts in NOK million	2014	2015	2016	2016	2016	2016	2016	2017	2017	2017	2017	2017	2018	2018	2018
Borregaard	3 848	4 075	1 082	1 145	1 076	1 088	4 391	1 110	1 225	1 071	1 116	4 522	1 195	1 179	2 374
Performance Chemicals	1 779	1 952	531	569	494	500	2 094	535	566	508	508	2 117	542	557	1 099
Cellulose	1 344	1 339	345	363	388	376	1 472	379	432	357	398	1 566	406	396	802
Bioethanol	112	90	32	21	29	28	110	30	28	26	37	121	28	31	59
Fine Chemicals	185	217	54	68	47	84	253	49	85	56	52	242	73	54	127
Ingredients	328	351	89	88	87	71	335	86	83	94	95	358	116	104	220
Other	100	126	31	36	31	29	127	31	31	30	26	118	30	37	67
Performance Chemicals
	1.1-31.12	1.1-31.12	1.1-31.3	1.4-30.6		1.7-30.9 1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.7-30.9	1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.1-30.6
	2014	2015	2016	2016	2016	2016	2016	2017	2017	2017	2017	2017	2018	2018	2018
Average gross sales price NOK per mtds	4 539	5 500	5 669	5 191	5 196	5 272	5 331	5 598	5 317	5 007	5 032	5 229	5 444	5 022	5 220
Volume (`000 mtds)	446	410	107	122	108	106	443	106	118	112	113	449	107	122	229
Specialities volume (`000 mtds)	78	76					79					82
Construction volume (`000 mtds)	238	213					214					210
Miscellaneous volume (`000 mtds)	130	121					150					157
Speciality Cellulose
	1.1-31.12	1.1-31.12	1.1-31.3	1.4-30.6		1.7-30.9 1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.7-30.9	1.10-31.12	1.1-31.12	1.1-31.3	1.4-30.6	1.1-30.6
	2014	2015	2016	2016	2016	2016	2016	2017	2017	2017	2017	2017	2018	2018	2018
Average gross sales price NOK per mt	9 144	9 546	10 150	9 912	9 830	10 068	9 986	10 555	10 889	10 524	10 315	10 575	10 105	10 179	10 142
Volume (`000 mt)	149,4	153,6	36,0	37,4	40,6	38,3	152,3	36,6	40,5	34,4	39,2	150,7	40,0	39,1	79,1
High specialised as % of total cellulose product sales volum	63 %	57 %					64 %					72 %