- Turnover -3.8% y/y & EBITDA -15.7% y/y
(+23% q/q): Higher volumes in
all segments (Paper 4%; Pulp 34%; Tissue 10%). Lower production costs not enough
to offset lower pulp and paper prices. However, EBITDA margin +442bps q/q to
21.8%.
- Strong UWF order book in Q1 (2nd
highest for Q1) as COVID
impact only visible from Mid- March onwards: 2019
ended with very low stock levels in the distribution chain. This reversed in Q1
as industry experienced strong growth in orders. Navigators sales increased by 4%
y/y with sales outside of Europe >10%, and with the premium segment 53% of
total. Their Q1 orders were >50 days (very strong); however, at the end of
March, they began to receive cancellation and postponement of orders. They
ended March with order book > 40 days – 45% higher than peers.
- They
expect significant drop in UWF demand in Q2, with 2020 demand -15%: They expect a gradual recovery until the end
of 2020. Sales volumes have been in line with their projections initially made
in March. UWF sale volumes declined by 22% in April (Jan-April: -2% YTD). They
expect office paper demand to be boosted with the reopening of schools,
universities and return of employees working from home and the resurgence of
the service sector. Demand for folio paper and reels is dependent on the
revival of the publishing and advertising sectors.
- Pulp sales +34% y/y (-16% q/q): Global demand +13% YTD in February but fell
in March. Supply side saw various unplanned shutdowns and reductions in output
(Asian producers and European labour strikes in Finland). They expect HW
capacity to remain stable during 2020 and H1 21e, until the start-up of new capacity
in Chile.
- Plans to cut fixed costs have been stepped
up: Production costs improved across most categories, key drivers included external
fibre costs (prices and less volumes), wood (less volumes) and lower chemicals
(pricing and less used for bleaching). Fixed costs benefitted from lower
payrolls and maintenance (postponement of shuts).
- Q2 to be the most difficult quarter for UWF
sales, and May probably the worst; however, they have seen some positive signs
in orders emerging recently and expect a slight improvement starting in June. Q2 will be very
challenging and marked by great uncertainty, with a recovery dependent on the rhythm
of reduction in lockdown measures. Unprecedented drop in orders at the end of March
forced them to partially and temporarily suspend paper production from 22 April
for 30 days. Downtime was extended until the end of June.
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