March 2018
B3NCH
B3NCH – Financial Benchmarking of Forest Products PeersOverview & selected financial benchmarking
For full version pricing & subscriptions please contact [email protected]
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This document contains information that is confidential and proprietary to StepChange Consulting and is distributed only to the designated recipients. This information is provided with the explicit understanding of the recipient that it will be held confidential and will not be disclosed, duplicated or used, in whole or in part, for any purpose other than evaluation of this document. Distribution, quotations and duplications –even in the form of extracts – for third parties is only permitted upon prior written consent of StepChange Consulting.
This document is for informational purposes only and is based solely on publicly available data from various sources. The performance and results presented are historical and past performance is not an indicator of future results. Data has been verified under plausibility aspects. However, StepChange Consulting will not warrant or guarantee that the information is accurate and there might be errors or omissions in the material. Nothing in this document shall be perceived as a recommendation, to acquire or dispose of any investment, to provide advisory services or to engage in any other transaction. StepChange Consulting accepts no liability for any decisions made, any financial losses incurred, or any direct or indirect damage which may result from an investment, an action or any other decision taken based on the information published in this document.
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For more information please contact us
Following financial results are available for six peer groups KPIs
Financial KPIs available in the Benchmarking document
Name of the KPI Availability
Peer group comparison1): EBIT % Full version only
Peer group comparison1): EBITDA % ✓
Peer group comparison1): Working capital % Full version only
Peer group comparison1): Net profit % Full version only
Peer group comparison1): ROCE % Full version only
Peer group summary ✓
Financial performance comparison table Full version only
EBITDA % average vs. Revenue growth % ✓
Company-wide EBITDA as % of turnover ✓
Company-wide EBIT as % of turnover Full version only
EBIT % by region2) Full version only
Segment EBIT % ✓
Segment EBIT % avg. vs. Revenue growth % Full version only
Net profit as % of turnover Full version onlyFull version pricing & subscriptions see next page
1) Comparison slides containing all peer groups2) Not available for Tissue, Flexibles and Merchants peer groups
Name of the KPI Availability
Working capital as % of turnover Full version only
Working capital % development by region2) Full version only
Cash conversion cycle (CCC) Full version only
DIO, DPO & DSO Full version only
ROCE % applying EBIT Full version only
OCF % vs. FCF (excl. M&A) % Full version only
Operating cash flow as % of turnover Full version only
Net investment ratio % of non-current assets3) Full version only
Debt ratio (total liabilities / total assets) Full version only
Net debt to EBITDA ratio3) Full version only
Enterprise value / EBITDA Full version only
Turnover vs. Turnover / employee3) Full version only
3) Not available yet for Merchants peer groups
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
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Methodology
Peer groups:
Peer groups are clusters of companies operating in the same industry segment according to the company’s portfolio of products to show whichcompanies are competing in a certain segment. In case a specific segment plays a substantial role in the company’s portfolio, the company isallocated to the peer group with its consolidated financial results which may be including results from other segments as well in case thecompany operates in multiple segments as segment-only information is only available for some metrics. All company information shown isbased on publicly available information.
Company segments:
Companies are sometimes active in multiple segments. In order to make a distinction between the results of the different operations,StepChange analyses the data for every segment. As an example for a company in the Packaging peer group, StepChange analyses the fullcompany results and also financial results of the Packaging segment only. For segment reporting, Revenue and EBIT are considered as othermetrics are not uniformly available based on public data.
Companies shown grayed out:
Grayed out numbers are used to display companies who are active in a segment because they are relevant competitors but whose results arehighly impacted by other operating segments.
Details shown in footnotes:
Footnotes are designed to explain the reporting period per companies shown, weighted average calculations, exclusions, abbreviations andnon-recurring items and events affecting results. Footnotes are numbered and can be found at the end of each peer group. StepChange isusing a common definition for metrics across all companies in order to make them comparable for all companies, therefore StepChangeadjusted figures may deviate from official company publications.
Financial benchmarking of six peer groups
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-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2012 2013 2014 2015 2016 2017 2018 2019
-2%
0%
2%
4%
6%
8%
10%
2012 2013 2014 2015 2016 2017 2018 2019
-4%
-2%
0%
2%
4%
6%
8%
2012 2013 2014 2015 2016 2017 2018 2019
Most macro economic indicators show a positive economic trend.
Interest rates seem to have bottomed.
ChinaEuropean Union Brazil Japan United States
Gross domestic product (% change) Inflation – average consumer prices (% change)
Volume of exports of goods (% change) Short-term interest rates
Source: IMF Source: IMF
Source: IMF Source: OECD
United StatesChinaBrazil JapanEuropean Union
JapanChina United StatesBrazilEuro Area
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2012 2013 2014 2015 2016 2017 2018 2019
United StatesBrazil China JapanEuro Area
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Historical development of StepChange B3nch Index (SBI) vs. S&P 500 (10/2012 – 2/2018)
The StepChange B3nch Pulp, Paper & Packaging Index (SBI)
outperformed the S&P. On par due to recent adjustments.
Source: StepChange analysis based on historical data for 64 companies from Google Finance, Morningstar
The B3nch Index includes the market capitalization of 64 stock listed pulp, paper & packaging
companies. The SBI outperformed the S&P 500 and doubled in value since October 2012.
90
100
110
120
130
140
150
160
170
180
190
200
01/1507/1304/1301/13 07/1504/14 04/1510/1407/1401/1410/13 10/1607/1604/1601/1610/1510/12 01/1810/1707/1704/1701/17
SBI
%
S&P 500
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Market capitalization development of stock listed pulp, paper and packaging companies
in € and % (10/2012 – 2/2018)
Industry market capitalization shows a significant growth over five
years. Pulp outperforms. Graphics and packaging with ROI growth.
Source: StepChange analysis based on historical data for 64 companies from Google Finance, Morningstar
Average growth of market capitalization is driven by packaging (CAGR of 14%), flexibles (CAGR
of 15%) and pulp (20%) since October 2012
200
150
300
100
50
0
01/18
250
01/1701/1601/1401/13 01/15
Bn €
CAGR 16%CAGR 13%
TissueStepChange B3nch Index (SBI) FlexiblesPulpPackaging MerchantsGraphics
07/13 07/1607/14 07/1501/14 01/15 01/1801/1701/16
100
200
225
175
150
125
50
250
75
07/1701/13
%
5 years 4 monthsCAGR
15%
20%
17%
14%
12%
9%
-11%
274
5 years 4 months 1 year
SBI
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Development of market capitalization (in €) Development of market capitalization (in %)
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Pulp peer group with biggest increase compared to 2016.
Graphic paper, packaging and merchant peer groups declining.
EBITDA % by peer group 2016-20171) Peer Overview
Pulp and tissue peer groups leading in terms of EBITDA with
further improved results in 2017
1,6%
12,8%
18,2%17,1%
15,1%13,5%
0,5%
13,4%
20,0%
17,7%
15,0%13,3%
Graphic Paper PulpTissuePackaging MerchantsFlexible Packaging
2016 2017
1) 2017 results are based on FY-2017 data or H1-2017 extrapolations, for more details, please see detailed peer group results
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Additional peer group comparisons available in the full version: Peer groups
EBIT% by peer group
EBITDA% by peer group
ROCE% by peer group
Working capital% by peer group
Net profit% by peer group
Investment ratio% by peer group
Net debt% by peer group
Overview of additional information available
For more information please contact us
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
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Summary
Declining revenues for most companies
Low net profit results for graphics (4,4%), despite improvements vs. 2017. Most companies with net profit decline, 8 companies with multi-year negative growth
Negative EBIT of North American peers
Despite unchanged average EBITDA of graphics segment in 2017, no above average results from North American peers, two above average in Asia
Overall working capital unchanged on high level. Working capital levels of North American peers 6,0pp above their European competitors – both regions significantly below Asian working capital levels.
EBITDA of companies in the graphics segment remained stable compared to 2016 results
Asian graphics companies with stronger EBIT than other regions. Top 3 segment companies located in Asia and Europe with above average results for 2017:
APP: Indah Kiat (16%) – above average results since 2013
Chenming (20%) – improving results in the past 5 years
Navigator (24%) – stable results vs. 2016
Debt ratio in the peer group stable compared to 2016. European peers managing debt ratio: Arctic Paper, Sappi, Stora Enso, UPM and Holmen steadily decreasing debt ratio since 2013
Graphic paper highlights Graphic paper lowlights
Summary: Graphic paper peer group
European companies with stronger results than rest of peer group. Asian peers with mixed
results. North American peers with unimproved results.
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2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
-16% 22%12% 20%-4% 6%-6%-8% 10%2% 18%4%-2%-18% 0% 8%
4 year EBITDA average [%]
Daio PaperBallarpur
Burgo
Glatfelter
Sappi
Mitsubishi Paper
Hokuetsu Paper
Chenming
International Paper
Norske Skogindustrier
APP: Tjiwi Kimia
Catalyst Paper
APP: Indah Kiat
UPM
Resolute Forest Products
The Navigator Company
Domtar
Stora Enso
Mondi Group
Lecta
Holmen
Verso Paper
4 year Revenue CAGR [%]
Arctic Paper
Oji Paper
Nippon Paper
Navigator with strongest EBITDA development closely followed by Chenming, APP Indah Kiat
and Mondi Group. Verso with high revenue growth due to acquisition of Newpage.
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 7) Graphic Paper
Results of companies active in graphics vary. Majority of companies
with positive developments. Results depend on business focus.
21)
Note: Results of International Paper, Mondi Group and Oji Paper highly influenced by segments other than graphic paper
Data as of February 16th, 2018: Full Year 2017 results available for Holmen, Sappi, Stora Enso, UPM, Domtar, Glatfelter, International Paper, Resolute Forest Products. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
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-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Navigator is leading the peer group for Europe, despite slightly declining results. International
Paper leads in North America and Chenming in Asia.
Company-wide EBITDA (incl. special items) as % of turnover 2013-20171) Graphic Paper
Companies in graphic paper remained on a similar level in 2017
compared to 2016. Europe with the strongest results.
W. Avg. 2016: 13,7%W. Avg. 2017: 13,5%1)
3) 3)
Europe North America Asia
11) 12) 13)16) 18)3) 3) 3)
Note: Results of International Paper, Mondi Group and Oji Paper highly influenced by segments other than graphic paper
23)22)
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Data as of February 16th, 2018: Full Year 2017 results available for Holmen, Sappi, Stora Enso, UPM, Domtar, Glatfelter, International Paper, Resolute Forest Products. All other data based on extrapolated H1-2017 results.
15)
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-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Segment trends vary across companies and are similar to the results on a company level:
Mondi, Navigator leading peer group in Europe, Chenming, APP: Indah Kiat in Asia.
Segment-only EBIT % of graphic paper segments (incl. special items)1) 2) Segment only
Graphic Papers only: High differences in segment EBIT.
W. Avg. 2016: 6,4% W. Avg. 2017: 6,4%
Graphic Paper segment: International Paper: Printing paper (2013-2015) & Printing Paper & Global Cellulose Fibers (2016-2017); Domtar: Pulp & Paper; Holmen: Holmen Paper; Mondi: Uncoated Fine Paper; Norske: Newsprint & MagazinePaper (2013) & Publication Paper Europe & Publication Paper Australasia (2014-2017); UPM: UPM Paper Asia & UPM Paper ENA (2013-2014) & UPM Specialty Papers & UPM Paper ENA (2015-2017); Stora Enso: Printing & Reading(2013-2014) & Paper (2015-2017); Resolute Forest Products: Newsprint & Specialty Paper; Glatfelter: Specialty Papers; Hokuetsu Paper: Paper and Pulp Business; Lecta: CWF & Specialties; Oji Paper: Printing & Communications Media
1)
4) 4)
12) 13) 14)23)22)26) 24)
Europe North America Asia
-33%
Data as of February 16th, 2018: Full Year 2017 results available for Holmen, Sappi, Stora Enso, UPM, Domtar, Glatfelter, International Paper, Resolute Forest Products. All other data based on extrapolated H1-2017 results.
15)
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Additional content in the full version: Graphic Paper
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
EBIT % by region
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Working capital % development by region
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Net investment ratio % of non-current assets
Overview of additional information available
Debt ratio (total liabilities / total assets)
Net debt to EBITDA ratio
Enterprise value / EBITDA
Turnover vs. Turnover / employee
For more information please contact us
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
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Summary
Overall cash flows down, operating cash flows of North American peers down by 15%, EBIT ~ 1/3 lower than of European companies
North American companies with weaker results:
EBIT: Cascades (4%), IP (7%), KapStone (6%) and WestRock (6%)
IP with highest debt ratio among peers at 81%
WestRock and Cascades with lowest ROCE and ROA at 4% and 3% both
Asian and African companies with below average results
Segment EBIT: Oji (4%), Rengo (2%), Mpact (5%)
ROCE: Oji (3%), Rengo (2%), Nampak (5%)
ROA: Oji (3%), Rengo (2%), Mpact & Nampak (4% both)
Average packaging segment EBIT increased in 2017 by 9% (0,8pp) in the peer group but the majority of companies with declining results
Working capital levels in packaging stable in 2017 at 10,9% but with high variations: DS Smith and Europac with negative WC, APP above 60% WC
Outperforming companies are:
Asia: Lee & Man with EBITDA of 31%, EBIT of 27%, and ROCE of 21%
Latin America: Klabin with EBITDA of 32%, EBIT of 18%, OCF of 21% and FCF of 11%
North American peers PCA outperforms in 2017 with a segment EBIT of 18%, a company EBITDA of 21% and a net profit at 10%
Long-term EBITDA growth by Mondi, PCA, Nine Dragons
Packaging highlights Packaging lowlights
Summary: Packaging peer group
Overall strong EBIT and EBITDA performances, with exceptions. Europe outperforms.
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Klabin with highest average EBITDA over four years. KapStone and WestRock lead in terms of
revenue growth due to M&A activity. Metsä and Stora declining due to structural changes.
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 7) Packaging
Over the last four years, company-wide EBITDA has been above 8%
for all packaging peers. Almost all companies show growth.
23%2% 3% 5% 11% 13%6% 7% 19%
18%
34%
22%
32%
20%
16%
14%
9%
10%
8%
4% 21%1% 10% 22%20%14%12%8%
12%
-2%-4% -1%-3% 0%
DS Smith
BillerudKorsnäsMondi Group
Stora Enso
Smurfit Kappa
Europac SCG Packaging WestRock
International PaperKapStone
Graphic Packaging
FajarPaper
4 years Revenue growth [CAGR]
4 years EBITDA average [%]
Metsä Board
APP: Indah Kiat
Klabin
Mpact
Sonoco
Lee & Man
Pack. Corp. of America
Nine Dragons Paper
Oji Paper
Cascades
Nampak
Celulose Irani
Mayr-Melnhof
Rengo
Data as of February 16th, 2018: Full Year 2017 results available for BillerudKorsnäs, Metsä Board, SCA, Smurfit Kappa, Stora Enso, Graphic Packaging, International Paper, KapStone, Pack. Corp. of America, Sonoco, WestRock, Klabin, Nine Dragons Paper, Nampak. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
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0%
5%
10%
15%
20%
25%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Lat. America
Klabin and Lee & Man outperform in 2017. Varying overall picture in the packaging peer group:
some companies with significant improvements, while others struggling to increase EBITDA.
Company-wide EBITDA (incl. special items) as % of turnover 2013-20171) Packaging
Company-wide EBITDA remained stable in 2017. Mondi is leading in
Europe, PCA in N. America, Lee & Man in Asia, Klabin in L. America.
W. Avg. 2016: 15,1%W. Avg. 2017: 15,0%
33%34% 32%
1)Europe North America Asia
34%32%
31%
Africa
3) 3)
16)18)21) 22) 23) 24) 25) 26)27)
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Data as of February 16th, 2018: Full Year 2017 results available for BillerudKorsnäs, Metsä Board, SCA, Smurfit Kappa, Stora Enso, Graphic Packaging, International Paper, KapStone, Pack. Corp. of America, Sonoco, WestRock, Klabin, Nine Dragons Paper, Nampak. All other data based on extrapolated H1-2017 results.
31)
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-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Asia
Increased peer group average mainly driven by PCA & Nine Dragons
Segment-only EBIT % of packaging segments (incl. special items)1) 2) Segment only
Majority of peers with decreasing segment EBIT in 2017. SCA, PCA,
Lee & Man & Nine Dragons with improved results.
W. Avg. 2016: 9,8% W. Avg. 2017: 10,7%
Packaging segment: Cascades: Packaging Products; Celulose Irani: Corrugated Cardboard Packaging & Packaging Paper; Greif Packaging: Paper Packaging & Services; International Paper: Industrial Packaging; KapStone: Paper andPackaging; Lee & Man: All except Tissue; Metsä Board: Paperboard; Mondi: All except Uncoated Fine Paper, South Africa and formerly Newsprint; Mpact: Paper; Nampak: Paper; Oji Paper: Household and Industrial Materials; Pack.Corp. of America: Packaging; Rengo: All except Flexibles; Reynolds Group: Evergreen; Sonoco: Paper and Industrial Converted Products; Stora Enso: Packaging Solutions & Consumer Board
Lat. AmericaEurope North America
Africa AUS
1)24%
24%34%26%24%
4) 4)
10) 11)25) 17)22) 24)
Data as of February 16th, 2018: Full Year 2017 results available for BillerudKorsnäs, Metsä Board, SCA, Smurfit Kappa, Stora Enso, Graphic Packaging, International Paper, KapStone, Pack. Corp. of America, Sonoco, WestRock, Klabin, Nine Dragons Paper, Nampak. All other data based on extrapolated H1-2017 results.
15) 20)31)
-4% -5%
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Debt ratio (total liabilities / total assets)
Net debt to EBITDA ratio
Enterprise value / EBITDA
Turnover vs. Turnover / employee
Additional content in the full version: Packaging
Overview of additional information available
For more information please contact us
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
EBIT % by region
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Working capital % development by region
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Net investment ratio % of non-current assets
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
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Summary
Working capital levels of the tissue peer group increased by 20% but tissue still remains the peer group with the lowest WC levels. Many companies with above peer group average working capital i.e.:
Hengan (WC 22%)
CMPC (WC 24%)
Orchids (WC 11%)
Average debt ratio slightly declined in 2017 compared to 2016. The debt ratio of the tissue peer group is overall higher than for packaging and graphics.
Orchids Paper EBITDA decreased from average to well below average (EBITDA of 5%) in 2017
Net profits of the peer group improved by 36% (from avg. 7,6% in 2016 to 10,3% in 2017) driven by:
Cascades (Net profit of 23%)
Unicharm (Net profit of 9%)
Essity (Net profit of 8%)
2017 EBITDA of tissue companies similar to 2016:
Hengan International continues leading the peer group for five years in a row (EBITDA of 31%)
Kimberly-Clark with a strong position (EBITDA 22%)
P&G Hygiene is leading the North American peer group in segment EBIT with continued results of >20%
Tissue highlights Tissue lowlights
Summary: Tissue peer group
Overall, tissue peer group shows revenue growth and solid profitability. Debt levels remain
high.
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Orchids Paper with highest revenue growth followed by Essity. Hengan International with the
strongest EBITDA development.
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 6) Tissue
All companies in the tissue peer group with multi-year positive
revenue growth and positive EBITDA averages.
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
2,0% 4,5% 12,0%11,5%5,5%4,0%2,5% 3,0% 6,0%5,0%0,5%0,0% 1,0% 1,5% 3,5%
CMPC
4 year Revenue CAGR [%]
Orchids Paper
Kruger Products
Hengan International
Cascades
Kimberly-Clark
Sofidel
Unicharm
Clearwater Paper
4 year EBITDA average [%]
EssityMetsä Group
Note: Results of Metsä Group highly influenced by segments other than tissue
Data as of February 16th, 2018: Full Year 2017 results available for Essity, Metsä Group, Clearwater Paper, Kimberly-Clark. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
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0%
5%
10%
15%
20%
25%
30%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Hengan International with significant improvements, and Kimberly-Clark continues to lead the
peer group. Essity with best EBITDA over five year period.
Company-wide EBITDA (incl. special items) as % of turnover 2013-20171) Tissue
EBITDA of companies in the tissue segment improved slightly by
0,5pp (3%) compared to the previous year
W. Avg. 2016: 17,4%W. Avg. 2017: 17,9%1)
3) 3)
Asia
14)10) 3) 13)20)
Europe North America AsiaLat.
America
21) 22)
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Note: Results of Metsä Group highly influenced by segments other than tissue
Data as of February 16th, 2018: Full Year 2017 results available for Essity, Metsä Group, Clearwater Paper, Kimberly-Clark. All other data based on extrapolated H1-2017 results.
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-5%
0%
5%
10%
15%
20%
25%
30%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
P&G Hygiene continues to lead the North American peers in terms of segment EBIT with results
of over 20%. Hengan improved further. Essity strongest in Europe with EBIT > 10%.
Segment-only EBIT % of tissue segments (incl. special items)1) 2) Segment only
EBIT of the tissue segment only: Slight improvement in 2017 vs.
2016. Hengan and P&G Hygiene outperform.
W. Avg. 2016: 15,6% W. Avg. 2017: 16,3%
Tissue segment: Metsä Group: Tissue and Cooking Papers; Cascades: Tissue Papers; Clearwater Paper: Consumer products; CMPC: Tissue; P&G Hygiene: Baby, Feminine & Family care
4) 4)
1)
14) 13)
Europe North America AsiaLat.
America
17)21) 22)
Data as of February 16th, 2018: Full Year 2017 results available for Essity, Metsä Group, Clearwater Paper, Kimberly-Clark. All other data based on extrapolated H1-2017 results.
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Enterprise value / EBITDA
Turnover vs. Turnover / employee
Additional content in the full version: Tissue
Overview of additional information available
For more information please contact us
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Net investment ratio % of non-current assets
Debt ratio (total liabilities / total assets)
Net debt to EBITDA ratio
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
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Summary
Net profit down by 10% in 2017
ROCE peer group average on a low level despite improvements in 2017
All North American peers are below peer group average in terms of EBITDA
In Europe all players are below the group average of 18,5%, except Altri and Ence
On average, working capital levels decreased by 5% in 2017 compared to the previous year, however:
Highest working capital levels compared to the other peer groups
Latin American peers with highest WC levels, despite slight improvements vs. 2016
Overall peer group EBIT up by 21% and EBITDA up by 10% in comparison to 2016
Latin American peers outperform. Highest multi-year revenue growth and strong EBITDA
Fibria (41%)
Suzano (42%)
Average ROCE increased by 25% in 2017. Regional leaders:
Europe: Altri (14%)
North America: Canfor Pulp (17%)
Latin America: Suzano (13%)
All peers with positive operating cash flows
Net debt to EBITDA ratio decreasing
Pulp highlights Pulp lowlights
Summary: Pulp peer group
Significant differences between companies exist. Return on capital employed improved but still
on a low level compared to other peer groups.
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Latin American peers with positive revenue growth. Tembec, Stora, UPM and Ence with
negative revenue growth. Fibria growth impacted by sales agreement with Klabin.
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 6) Pulp
Company-wide EBITDA of companies active in pulp sector with
varying results. Fibria with highest EBITDA, Eldorado outperforms.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12%
4 year EBITDA average [%]
Domtar
Canfor Pulp
Eldorado
Weyerhaeuser
UPM
Mercer International
CMPC
Stora Enso
Rottneros
Metsä GroupEnce
Oji Paper
APP: Indah Kiat
Altri
Fibria
Arauco
Tembec
Södra
Suzano
4 year Revenue CAGR [%]
10)
Note: Results of Stora Enso, UPM and Oji Paper highly influenced by segments other than pulp
Data as of February 16th, 2018: Full Year 2017 results available for Metsä Group, Rottneros, Stora Enso, UPM, Domtar, Mercer International, Fibria, Suzano. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
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-2%
8%
18%
28%
38%
48%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
In Europe, Altri with strongest performance, and Ence with biggest improvements. In North
America, all peers are below average in 2017, except for Mercer.
Company-wide EBITDA (incl. special items) as % of turnover 2013-20171) Pulp
Continued strong EBITDA results in pulp segment driven by
outperformance of Latin American companies
W. Avg. 2016: 18,2%W. Avg. 2017: 20,0%1)
3) 3)
Lat. AmericaEurope North America
Asia
10)17)31)3)22)25) 3) 3)19) 20)24)28)26) 27) 30)32) 33)
B3NCH
Note: Results of Stora Enso, UPM and Oji Paper highly influenced by segments other than pulp
Data as of February 16th, 2018: Full Year 2017 results available for Metsä Group, Rottneros, Stora Enso, UPM, Domtar, Mercer International, Fibria, Suzano. All other data based on extrapolated H1-2017 results.
34Copyright © 2018 StepChange Consulting - Driving Change to Deliver Results. All Rights Reserved. 34
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
European pulp peers with solid performance: Improvements for Ence, Metsä Group, Södra,
Stora Enso and UPM. Suzano best performer in pulp segment.
Segment-only EBIT % of pulp segments (incl. special items)1) 2) Segment only
EBIT of the pulp segment only: Results increased by 3,1pp (29%) vs.
the previous year. Varying results across companies.
W. Avg. 2016: 10,8% W. Avg. 2017: 13,9%
Pulp segment: Ence: Pulp and Forestry, Metsä Group: Pulp and Sawn Timber Industry, Södra: Södra Cell, Stora Enso: Biomaterials, UPM: Biorefining, Eldorado: Cellulose, Canfor Pulp: Pulp, Catalyst Paper: Pulp, Tembec: Paper Pulp + Specialty Cellulose Pulp, Weyerhaeuser: Cellulose fibers, Arauco: Pulp CMPC: Pulp, Suzano: Pulp, Oji Paper: Forest resources and environmental marketing
1)
4) 4)
44% 41%
-24% -11%
13)
Lat. AmericaEurope North America
Asia
18)19) 20)21)31)26) 27) 28) 29) 30)32) 33)
42%
-6%
Data as of February 16th, 2018: Full Year 2017 results available for Metsä Group, Rottneros, Stora Enso, UPM, Domtar, Mercer International, Fibria, Suzano. All other data based on extrapolated H1-2017 results.
37)
B3NCH
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Debt ratio (total liabilities / total assets)
Net debt to EBITDA ratio
Enterprise value / EBITDA
Turnover vs. Turnover / employee
Additional content in the full version: Pulp
Overview of additional information available
For more information please contact us
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
EBIT % by region
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Working capital % development by region
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Net investment ratio % of non-current assets
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
37Copyright © 2018 StepChange Consulting - Driving Change to Deliver Results. All Rights Reserved. 37
Flexibles
Net profit average for peer group 4,1%
Segment-only EBIT declined by13%. Outperformers Amcor and Sealed Air both at 13%
Working capital of flexibles peer group unchanged. However, steep working capital increase of:
Nampak (8% in 2016 to 11% in 2017)
Huhtamaki (12% in 2016 to 14% in 2017)
Coveris (9% in 2016 to 12% in 2017)
Operating cash flow declined by 26% compared to 2016, North American most significant declines
Debt ratios very high in the peer group with increasing results in 2017, three players above 90%: Amcor (90%), Coveris (97%) and Sealed Air (97%)
Stable development of company-wide EBIT for flexible packaging
Most companies achieved an average multi-year EBITDA above 10% and positive revenue growth
The average ROCE of flexibles peer group increased in 2017 by 8% compared to 2016
Company-wide EBIT improved - driven by other business areas
Flexible packaging highlights Flexible packaging lowlights
Summary: Flexible packaging peer group
Overall results of the flexible packaging peer group remain stable
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Mondi and Nampak lead the peer group in terms of multi-year EBITDA. Huhtamaki with highest
4 year revenue growth from 2013 to 2017. Sealed Air and Nampak with declining revenues.
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 6) Flexibles
Majority of companies in the flexibles peer group with steady growth
and an average multi-year EBITDA above 10%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
-10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Rengo
Nampak
Amcor
Coveris
Mondi Group
Sealed AirConstantia Flexibles
BemisHuhtamaki
4 year EBITDA average [%]
4 year Revenue growth [CAGR]
15)
Note: Results of Mondi Group highly influenced by segments other than flexible packaging
Data as of February 16th, 2018: Full Year 2017 results available for Amcor, Huhtamaki, Sealed Air, Nampak. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
B3NCH
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0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Amcor ConstantiaFlexibles
Huhtamaki Mondi Group Bemis Coveris Sealed Air Rengo Nampak
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Company-wide EBITDA of Huhtamaki, Bemis, Coveris and Sealed Air declined after increasing
for 3 years. Amcor above peer group average again after low results in 2016.
Company-wide EBITDA (incl. special items) as % of turnover 2013-20171) Flexibles
The weighted EBITDA average across the flexibles peer group
increased slightly to 13,4% in 2017
W. Avg. 2016: 12,8%W. Avg. 2017: 13,4%1)
3) 3)
Europe North America Asia
Africa
3)10) 11) 15)
B3NCH
Note: Results of Mondi Group highly influenced by segments other than flexible packaging
Data as of February 16th, 2018: Full Year 2017 results available for Amcor, Huhtamaki, Sealed Air, Nampak. All other data based on extrapolated H1-2017 results.
18)
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-2%
0%
2%
4%
6%
8%
10%
12%
14%
Amcor ConstantiaFlexibles
Huhtamaki Mondi Group Bemis Coveris Sealed Air Rengo Nampak
2013 2014 2015 2016 2017 2016 weighted average 2017 weighted average
Most companies with declining segment EBIT. Amcor, Mondi Group and Coveris with steadily
increasing results over the last years.
Segment-only EBIT % of flexible packaging segments (incl. spec. items)1) 2) Segment only
The average segment-only EBIT of companies in flexible packaging
decreased by 1,2pp (13%). Amcor and Sealed Air outperform.
W. Avg. 2016: 9.2% W. Avg. 2017: 8.0%1)
Flexible packaging segment: Amcor: Flexibles, Coveris: Flexibles, Huhtamaki: Flexible Packaging, Mondi Group: Consumer Packaging
Europe North America Asia
Africa
11)14)
-5%
Data as of February 16th, 2018: Full Year 2017 results available for Amcor, Huhtamaki, Sealed Air, Nampak. All other data based on extrapolated H1-2017 results.
B3NCH
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Enterprise value / EBITDA
Turnover vs. Turnover / employee
Additional content in the full version: Flexibles
Overview of additional information available
For more information please contact us
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Net investment ratio % of non-current assets
Debt ratio (total liabilities / total assets)
Net debt to EBITDA ratio
For full version pricing & subscriptions please contact [email protected]
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Contents
Industry Financials
Peer group comparison
Graphic Paper peer group
Packaging Paper peer group
Tissue peer group
Pulp peer group
Flexible Packaging peer group
Merchants peer group
43Copyright © 2018 StepChange Consulting - Driving Change to Deliver Results. All Rights Reserved. 43
Summary
Weighted average EBITDA for the peer group dropped from 1,6% in 2016 to 0,5% in H1-2017 with Veritiv having a large impact
Veritiv with negative results in H1-2017
Net profit of merchant peer group turned negative in H1-2017 (-0,3%) due to Veritiv.
Spicers with highest working capital in the peer group
European merchants remain above average
Lecta leading the peer group for segment-only results
Antalis and Optigroup with lowest working capital
Inapa is leading the peer group for both OCF and FCF, all companies with positive OCF and FCF, except for Spicers
Average debt ratio stable compared to 2016 with Optigroup/Papyrus steadily decreasing debt ratio
Merchants highlights Merchants lowlights
Summary: Merchant peer group
Merchant peer group facing difficulties to turn net profit positive
B3NCH
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Spicers’s EBITDA and CAGR negative due to discontinued operations starting in 2014
EBITDA average [%] vs. Revenue CAGR [%] 2013-20171) 7) Merchants
All companies with multi-year positive EBITDA average, except
Spicers
-2%
-1%
0%
1%
2%
3%
4%
-0,5%-2,0%-3,5%-41,5% 0,0%-41,0% -1,0%-1,5%-2,5%-3,0%
4 year EBITDA average [%]
4 year Revenue CAGR [%]
Inapa
Spicers
Optigroup/Papyrus
Veritiv
11)
12)
Data as of February 16th, 2018: Full Year 2017 results available for Spicers. All other data based on extrapolated H1-2017 results.
The size of the bubble refers to turnover
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Additional content in the full version: Merchants
Overview of additional information available
For more information please contact us
Peer group financial performance comparison table
Company-wide EBIT as % of turnover
Segment EBIT % avg. vs. Revenue growth %
Net profit as % of turnover
Working capital as % of turnover
Cash conversion cycle (CCC)
DIO, DPO & DSO
ROCE % applying EBIT incl. non-recurring items
OCF average % vs. FCF (excl. M&A) average %
Operating cash flow as % of turnover
Debt ratio (total liabilities / total assets)
Enterprise value / EBITDA
For full version pricing & subscriptions please contact [email protected]
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About StepChange Consulting
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support to top tier organizations in the industry from strategy
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