Borregaard — Interim / Quarterly Report 2017

Jul 18, 2017

Income Statement Borregaard Group Q2 2017
		1.4-30.6	1.1-30.06		1.1-31.12
Amounts in NOK million	2017	2016	2017	2016	2016
Operating revenues	1 256	1 167	2 392	2 280	4 492
Operating expenses	-938	-898	-1 800	-1 775	-3 471
EBITDA adj.	318	269	592	505	1 021
Depreciation property, plant and equipment	-75	-69	-149	-134	-274
EBITA adj.	243	200	443	371	747
Amortisation intangible assets	-1	-1	-2	-2	-4
Other income and expenses	0	13	0	13	13
Operating profit	242	212	441	382	756
Financial items, net	-1	-5	-5	-14	-32
Profit before taxes	241	207	436	368	724
Income tax expence	-60	-53	-108	-94	-171
Profit for the period	181	154	328	274	553
Profit attributable to non-controlling interests	0	0	-1	-1	-2
Profit attributable to owners of the parent	181	154	329	275	555
Earnings per share (NOK)	1,81	1,54	3,29	2,75	5,55
EBITDA adj. margin EBITA adj. margin	25,3 % 19,3 %	23,1 % 17,1 %	24,7 % 18,5 %	22,1 % 16,3 %	22,7 % 16,6 %

Interim condensed statement of financial position Borregaard Group
	30.6.	31.3.	31.12.
Amounts in NOK million	2017	2017	2016
Assets:
Intangible assets	118	121	125
Property, plant and equipment	2 692	2 559	2 471
Other assets	97	86	115
Investments in joint venture	127	127	121
Non-current assets	3 034	2 893	2 832
Inventories	661	687	626
Receivables	1 066	949	948
Cash and cash deposits	75	182	265
Current assets	1 802	1 818	1 839
Total assets	4 836	4 711	4 671
Equity and debt:
Group equity	2 642	2 808	2 679
Non-controlling interests	81	59	34
Equity	2 723	2 867	2 713
Provisions and other liabilities	288	280	299
Interest-bearing liabilities	765	526	525
Non-current liabilities	1 053	806	824
Interest-bearing liabilities	106	41	61
Other current liabilities	954	997	1 073
Current liabilities	1 060	1 038	1 134
Equity and liabilities	4 836	4 711	4 671
Equity ratio (%):	56,3 %	60,9 %	58,1 %

Interim condensed cash flow statement Borregaard Group Q2 2017
		1.4-30.6	1.1-30.06		1.1-31.12
Amounts in NOK million	2017	2016	2017	2016	2016
Profit before taxes	241	207	436	368	724
Amortisation, depreciation and impairment charges	76	69	151	135	278
Change in net working capital, etc	-117	204	-273	-39	170
Dividend (share of profit) from JV	-1	-16	-3	-38	-1
Taxes paid	-41	-31	-71	-62	-90
Cash flow from operating activities	158	433	240	364	1 081
Investments property, plant and equipment and intangible assets *	-215	-142	-374	-213	-622
Other capital transactions	5	1	7	2	5
Cash flow from Investing activities	-210	-141	-367	-211	-617
Dividends	-349	-149	-349	-149	-149
Proceeds from exercise of options/shares to employees	0	2	11	3	7
Buy-back of shares	0	-9	-29	-9	-10
Gain/(loss) on hedges for net investments in subsidiaries	-11	18	-2	29	13
Net paid to/from shareholders	-360	-138	-369	-126	-139
Proceeds from interest-bearing liabilities	258	100	263	100	106
Repayment from interest-bearing liabilities	-2	-102	-29	-104	-309
Change in interest-bearing receivables/other liabilities	15	-6	38	-15	-23
Change in net interest-bearing liablities	271	-8	272	-19	-226
Cash flow from financing activities	-89	-146	-97	-145	-365
Change in cash and cash equivalents	-141	146	-224	8	99
Cash and cash equivalents at beginning of period	182	18	265	169	169
Change in cash and cash equivalents	-141	146	-224	8	99
Currency effects cash and cash equivalents	2	-1	2	-14	-3
Cash and cash equivalents at the end of the period	43	163	43	163	265
* Investment by category:
Replacement investments	46	95	124	129	358
Expansion investments	169	47	250	84	264

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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard 3 886 3 939 1 007 1 054 1 069 1034 4 164 1 113 1 167 1 102 1 110 4 492 1 136 1 256 2 392 Performance Chemicals 1 645 1 822 503 515 488 502 2 008 550 584 515 512 2 161 550 582 1 132 Speciality Cellulose 1 596 1 459 336 365 389 346 1 436 383 385 416 406 1 590 412 468 880 Other Businesses 664 682 176 183 199 197 755 190 206 179 201 776 183 213 396 Eliminations - 19 - 24 - 8 - 9 - 7 - 11 - 35 -10 -8 -8 -9 -35 -9 -7 -16 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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard 710 730 169 196 225 168 758 236 269 283 233 1 021 274 318 592 Performance Chemicals 314 410 117 134 117 106 474 146 147 141 115 549 141 151 292 Speciality Cellulose 326 248 30 39 79 45 193 76 91 105 72 344 112 127 239 Other Businesses 70 72 22 23 29 17 91 14 31 37 46 128 21 40 61 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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard - 221 - 244 - 64 - 65 - 65 - 67 - 261 -65 -69 -67 -73 -274 -74 -75 -149 Performance Chemicals - 18 - 22 - 6 - 7 - 6 - 8 - 27 -8 -7 -9 -8 -32 -9 -10 -19 Speciality Cellulose - 82 - 85 - 22 - 21 - 23 - 23 - 89 -23 -23 -23 -25 -94 -23 -24 -47 Other Businesses - 121 - 137 - 36 - 37 - 36 - 36 - 145 -34 -39 -35 -40 -148 -42 -41 -83 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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard 489 486 105 131 160 101 497 171 200 216 160 747 200 243 443 Performance Chemicals 296 388 111 127 111 98 447 138 140 132 107 517 132 141 273 Speciality Cellulose 244 163 8 18 56 22 104 53 68 82 47 250 89 103 192 Other Businesses - 51 - 65 - 14 - 14 - 7 - 19 - 54 -20 -8 2 6 -20 -21 -1 -22 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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard - 2 0 0 0 0 - 1 - 1 -1 -1 -1 -1 -4 -1 -1 -2 Performance Chemicals - 2 0 0 0 0 - 1 - 1 -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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard 14 -30 0 0 0 37 37 0 13 0 0 13 0 0 0 Performance Chemicals -9 0 0 0 0 -9 -9 0 0 0 0 0 0 0 0 Speciality Cellulose 0 0 0 0 0 46 46 0 73 0 0 73 0 0 0 Other Businesses 23 - 30 0 0 0 0 0 0 -60 0 0 -60 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 2013 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 Borregaard 501 456 105 131 160 137 533 170 212 215 159 756 199 242 441 Performance Chemicals 285 388 111 127 111 88 437 137 139 131 106 513 131 140 271 Speciality Cellulose 244 163 8 18 56 68 150 53 141 82 47 323 89 103 192 Other Businesses - 28 - 95 - 14 - 14 - 7 - 19 - 54 -20 -68 2 6 -80 -21 -1 -22	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	2013	2014	2015	2015	2015	2015	2015	2016	2016	2016	2016	2016	2017	2017	2017
Borregaard - EBITA hedging gains & losses	10	-51	-70	-54	-55	-62	-241	-43	-24	-24	-24	-115	-22	-35	-57
Performance Chemicals	4	-12	-22	-18	-17	-19	-76	-12	-7	-7	-6	-32	-6	-12	-18
Speciality Cellulose	3	-32	-40	-29	-28	-32	-129	-22	-11	-13	-13	-59	-10	-17	-27
Other Businesses	3	-7	-8	-7	-10	-11	-36	-9	-6	-4	-5	-24	-6	-6	-12
Borregaard - USD EBITA currency exposure (approx)	265	265					250					214
Borregaard - EUR EBITA currency exposure (approx)	105	96					89					78
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	2013	2014	2015	2015	2015	2015	2015	2016	2016	2016	2016	2016	2017	2017	2017
Borregaard	3 822	3 848	988	1 032	1 048	1 007	4 075	1 082	1 145	1 076	1 088	4 391	1 110	1 225	2 335
Performance Chemicals	1 612	1 779	492	499	474	487	1 952	531	569	494	500	2 094	535	566	1 101
Cellulose	1 483	1 344	312	343	365	319	1 339	345	363	388	376	1 472	379	432	811
Bioethanol	110	112	24	21	25	20	90	32	21	29	28	110	30	28	58
Fine Chemicals	193	185	46	55	60	56	217	54	68	47	84	253	49	85	134
Ingredients	323	328	83	82	92	94	351	89	88	87	71	335	86	83	169
Other	101	100	31	32	32	31	126	31	36	31	29	127	31	31	62
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
	2013	2014	2015	2015	2015	2015	2015	2016	2016	2016	2016	2016	2017	2017	2017
Average gross sales price NOK per mtds	3 953	4 539	5 744	5 393	5 424	5 459	5 500	5 669	5 191	5 196	5 272	5 331	5 598	5 317	5 450
Volume (`000 mtds)	462	446	99	108	100	103	410	107	122	108	106	443	106	118	224
Specialities % (share of total volum)	17 %	18 %					19 %					18 %
Contruction % (share of total volum)	56 %	53 %					52 %					48 %
Miscellaneous % (share of total volum)	27 %	29 %					29 %					34 %
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
	2013	2014	2015	2015	2015	2015	2015	2016	2016	2016	2016	2016	2017	2017	2017
Average gross sales price NOK per mt	9 343	9 144	9 337	8 894	9 881	10 176	9 546	10 150	9 912	9 830	10 068	9 986	10 555	10 889	10 730
Volume (`000 mt)	158,0	149,4	37,8	41,7	39,6	34,5	153,6	36,0	37,4	40,6	38,3	152,3	36,6	40,5	77,1
High specialised as % of total cellulose product sales volum	67 %	63 %					57 %					64 %