analyst presentation swiecie - mondi group...0 500 1.000 1.500 2.000 2.500 3.000 3.500 delivered...
TRANSCRIPT
PAGE 1
AGENDA
Poland
Company History
Management team
Mill overview
Products
Key financials
Post acquisition highlights
Competitive Advantages MPP Swiecie
Site visit briefing
PAGE 2
POLAND
Area: 312,685 km2
Population: 38.5 million
Main industries: coal, textile, chemical, machinery, iron and steel sectors
Forest land: 28% Germany
Poland
Slovakia
CzechRepublic
Ukraine
Belarus
Lithuania
Świecie
Bydgoszcz
Poznań
Cracow
Warsaw
Mondi Packaging Paper Świecie S.A.
PAGE 3
MACROECONOMIC INDICATORS – POLAND
7,100
3.8
2.2
11.2
6.62007
6,700
3.9
1.3
13.8
6.12006
8,0557,6005,3275,0135,4805,480GDP/Capita (in EUR)
2.82.82.23.60.71.9Inflation (avg in %)4.4
19.6
3.92003
3.9
19.9
1.42002
5.25.33.65.3Real GDP (change in %)
3.73.74.04.5PLN/EUR (avg)
8.49.717.719.0Unemployment rate (in %)
2009200820052004
Direct foreign investment in EUR m
15,061
8,2809,983
4,383 4,313
2007 2008 20102009 20110.0
5.0
10.0
15.0
20.0
25.0
2002 2003 2004 2005 2006 2007 2008 20090 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
GDP/Capita in EUR Real GDP (change in %)Unemployment Rate in % Inflation (avg) in %
PAGE 4
40 YEAR HISTORY
1961
2007
62 63 64 65 66 67 68 69 1970 72 73 74 75 76 77 78 7971 1980 81 82 83 84 85 86 87 88 89 1990 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 0761
1967
DissolvingPulp Plant
1972
KraftPulpPlant
1976
NSCCPlant
1991
Transformationinto Joined Stock
Company
1992
Restruct-uring
1997
PrivatisationMondi 60%
1970 – 1976Start-up of 5 PMs
1997 – 2003New strategy
implementation
ZCiPCeluloza
PAGE 5
Jan Żukowski
Development andInvestment Director
(55 years of age)
Tomasz Katewicz
Production Director(42 years of age)
Adam Mrzygłód
Financial Director(34 years of age)
Florian Stockert
Sales Director(48 years of age)
OVERVIEW - MANAGEMENT TEAM
CEO(41 years of age)
Maciej Kunda
PAGE 6
2xcontinuous digesters
Kraft pulp373.000 TO
Semichemical pulp plant
NSSC pulp106.000 TO
Recovered paperpreparation plantOCC - 293.000 to;
Mix - 45.000 to
Powerplant
Evaporation plant Causticizing plant
Recovery boiler
Chemical recovery department
Wood handling system
Pine Birch
Operation certified ISO 9001, ISO 14001, OHSAS 18001 and FSC
118.000 to134.000 to 200.000 to 194.000 to174.000 to
4.4 mTestliner
5.3 mSackpaper
Light weightKraftliner
4.4 m Kraftliner
150 – 330 g/m2
5.3 m Light weight
Kraftliner90 – 140 g/m2
4.4 mSc fluting
PM 3PM 1 PM 2 PM 5PM 4
OVERVIEW - STRUCTURE OF THE MIL
PAGE 7
Higher gsm
• Fruits • Vegetables • Meat • Flowers • Heavy duty packaging • Chemicals
• Cement • Premixes • Feed
P&G, Pizza Hut,Kimberly & Clark
• Merchant • Chemicals• Beverages• Furnitures
IKEA, P&G, Kimberley & Clark
Henkel, Pizza Hut,Nestle, Tesco, Carrefour
Lafarge, Bayer
Sack Paper
10%
S.C. Fluting 21%
Testliner16%
Kraftliner53%
• Fruits, vegetables, meat • Heavy duty packaging • Chemicals• ElectronicsLower gsm• Cosmetics, medicines• Internet salesPizza boxes• Industrial • Coating
MARKET SEGMENTATION BY END-USE APPLICATION
PAGE 8
FINANCIAL INDICATORS MPP SWIECIE
Sales (PLN B) / ROCE1
1.301.191.26
0
5
10
15
20
25
30
35
ROCE1
(%)
2004 2005 2006
0.63
2006 HY
0.69
2007 HY0,0
0,5
Sales(PLN B)
Profitability (HY 2007)
PLN 220 M
31.9 %
CapitalEmployed PLN 1 032 M
33.0%
184 M
29.6%
956 M
27.5%
19.6
7.7
7.9
20.1
2007 2006
ROCE1
EBITDA
EBITDAMargin
% change
26.5 20.5 33.2 27.5 33.0
1 Half year ROCE is calculated as underlying profit H1 2007 times 2 divided by average capital employed as of June 30 and December 31
PAGE 10
POST ACQUISITION HIGHLIGHTS -TRANSFORMATION OF THE COMPANY
CelulozaŚwiecie
MPPŚwiecie
CapacityUtilization
Value CreationHigh Performance
Performance
Time
Goal
Past
Goal
Now
Process Change
Operational, Financial, HR, Sales,Quality, Environmental,
Safety
PAGE 11
POST ACQUISITION HIGHLIGHTS –MAJOR CAPITAL PROJECTS 1998-2006
Market Development Focus
Promises kept - delivered more
ProactiveInvestmentStrategy
Early action against foreseen trends, developments and changes in business environment (markets, customer needs, changes in operational environment).
2001 Paper Machine #5 Rebuild
2003 Paper Machine #3 Rebuild
2007 Paper Machine #1 Rebuild
Project Targets / Achievements
Focus: Increase of production of lightweight kraftliner grades
Effective production of high quality LW KLB
Production increase +50,000 t / +90,000 t
Focus: Ability to produce 2-layer medium and lightweight recycled containerboard quality
Effective production of 2 layer TL and WBFL
Quality targets 100% met
Focus: Increase of production of lightweight kraftliner grades
Effective production of high quality 2 layer LW KLB
Capacity increase from 130,000 to 180,000 t
PAGE 12
POST ACQUISITION HIGHLIGHTS –MAJOR CAPITAL PROJECTS 1998-2006
Early Action against foreseen changes in operational environment
Promises kept - delivered more
ProactiveInvestmentStrategy
Early action against foreseen trends, developments and changes in business environment (markets, customer needs, changes in operational environment).
2001 New Woodyard
Project Targets / Achievements
Focus: Improvement of wood pulp quality; reduction of wood losses
Wood losses reduction by 70%
High quality of chips and pulp produced
2004 CFB Biofuel BoilerFocus: Energy cost savings / green energy generation
Effective green energy production based on biofuel
Reduction of coal usage by 130,000 tpatogether with substantial reduction of emission
PAGE 13
POST ACQUISITION HIGHLIGHTS –TOTAL PM PRODUCTION 1970 – 2007
824797
760737
690
631603
538
488446435428416
381
316318341
391386380384379362346318
295333
282299307
259251223
171136
81
33
1971 1972 1973 1974 1975 1976 1977 1997 1998 1999 2000 2001 2002 2003 2004 2005 20061987 1988 1989 1990 1991 1992 1993 1994 1995 19961970 1978 1979 1980 1981
+85%
1983 1984 1985 19861982
Mondistart to be majority
shareholder
Production nearly doubled during last 10 years: 1.000 tons
PAGE 14
POST ACQUISITION HIGHLIGHTS –PRODUCTIVITY INCREASE
38 41 49 41 3821-23
13 22 30
506348
799569
628 2421
1,986
1,473 1,3791,176 1,131
1,054 969 913
2,703
3,124
132
652
459
191
409
587
722
823
902
273
0
500
1000
1500
2000
2500
3000
3500
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-30
70
170
270
370
470
570
670
770
870
970
Productivity increase by 770 tons per capita, compared to 1997
Increase due to bigger production
Increase due to headcount reduction
Employees, average
Total productivity
Employees, average Total productivity in tons
PAGE 15
POST ACQUISITION HIGHLIGHTS –PROGRESS IN SAFETY
Number of Accidents 1997-2006(including sub contractors)
Development of Lost Time InjuryFrequency Rate (LTIFR) 1997 - 2006
* Excluding contractors
1123
43*
1997
37*
1998
31*
1999
18*
2000
21*
2001
9*
2002 2003 2004 2005 2006
1,50 1,50
1,82
1,35 1,43
0,57
0,20 0,14 0,07 0,07
0,0
0,5
1,0
1,5
2,0
2,5
3,0
20042000199919981997 20062005
LTIFR
2001 2002 2003
2006 MondiSafety Award
for Best in ClassLarge Unit
ZerO Tolerance Target ZerOO T T O
PAGE 16
COMPETITIVE ADVANTAGE OF MPPŚWIECIE
Competitive Advantage of MPP Świecie driven by
Clear cost advantage in energy and labor cost
Cost advantage in transportation to European markets
Capability of most effective fibre mix (wood and recovered fibre)
Swiecie is a world class mill in terms of productivity
Swiecie has an excellent track record with all big capex: they were flawlessly executed within time and within budget increasing Company Value
Organization culture managed by objectives, employees creativity
Excellent Technical service
Innovative products
PAGE 17
COST COMPETITIVNESS OF UNBLEACHED KRAFTLINER
0
50
100
150
200
250
300
350
400
450
500
0 500 1.000 1.500 2.000 2.500 3.000 3.500
Delivered coststo Frankfurt
Swiecie PM5
1 Including European supply and imports2 Depreciations + ROCE 10%Source: Pöyry Forest Industry Consulting
Cumulative capacity, k tons p.a.
€/tons Cost level 2006/III
Swiecie PM2
Swiecie PM1