Munksjö Oyj's Interim Report for January-September 2015: Price increases not yet covering the full effect of higher raw material prices
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Munksjö Oyj's Interim Report for January-September 2015: Price increases not yet covering the full effect of higher raw material prices

Munksjö Oyj's Interim Report for January-September 2015: Price increases not yet covering the full effect of higher raw material prices
Helsinki, Finland, 2015-11-03 07:30 CET (GLOBE NEWSWIRE) --
MUNKSJÖ OYJ, INTERIM REPORT, 3 NOVEMBER 2015 AT 7:30 AM CET

Munksjö Oyj's Interim Report for January-September 2015: Price increases not
yet covering the full effect of higher raw material prices


Highlights of the third quarter 2015

- Net sales were EUR 269.3 (275.9) million.

- Adjusted EBITDA was EUR 20.0 (23.2) million and the adjusted EBITDA margin
was 7.4% (8.4%).

- Operating result adjusted for non-recurring items was EUR 6.8 (9.5) million.
Non-recurring items amounted to EUR -4.9 (-0.3) million.

- Operating result was EUR 1.9 (9.2) million and net result EUR 3.2 (-3.4)
million.

- Earnings per share (EPS) were EUR 0.07 (-0.07).

- Operating cash flow was EUR 9.8 (16.2) million.

- In September Munksjö announced a plan to further adjust its cost structure in
Business Area Release Liners.


Highlights of January-September 2015

- Net sales were EUR 840.7 (856.3) million.

- Adjusted EBITDA was EUR 71.5 (76.6) million and the adjusted EBITDA margin
was 8.5% (8.9%).

- Operating result adjusted for non-recurring items was EUR 31.5 (36.6)
million. Non-recurring items amounted to EUR -7.3 (-1.9) million.

- Operating result was EUR 24.2 (34.7) million and net result EUR 15.6 (5.0)
million.

- Earnings per share (EPS) were EUR 0.30 (0.09).

- Operating cash flow was EUR 11.0 (24.5) million.

KEY FIGURES (MEUR) Jul-Sep Jan-Sep Jan-Dec
2015 2014 2015 2014 2014
Net sales 269.3 275.9 840.7 856.3 1,137.3
EBITDA (adj.*) 20.0 23.2 71.5 76.6 105.0
EBITDA margin, % (adj.*) 7.4 8.4 8.5 8.9 9.2
EBITDA 15.1 22.9 64.2 74.7 99.4
EBITDA margin, % 5.6 8.3 7.6 8.7 8.7
Operating result (adj.*) 6.8 9.5 31.5 36.6 51.0
Operating margin, % (adj.*) 2.5 3.4 3.7 4.3 4.5
Operating result 1.9 9.2 24.2 34.7 45.4
Operating margin, % 0.7 3.3 2.9 4.1 4.0
Net result 3.2 -3.4 15.6 5.0 7.7
Earnings per share (EPS), EUR 0.07 -0.07 0.30 0.09 0.14
Interest-bearing net debt 264.1 240.8 264.1 240.8 225.6

* Adjusted for non-recurring items

Unless otherwise indicated, the figures in parentheses refer to the figures for
the equivalent period in 2014. This interim report is unaudited. It is
published in Swedish, Finnish and English. In case of any discrepancies between
the three versions, the Swedish text shall prevail.


Comment from Munksjö's President and CEO, Jan Åström

"During the first nine months of 2015, our operating environment has been
challenging with increased short fibre pulp prices and mostly flat market
development in many of our specialty paper segments.

The profitability development during the first nine months of 2015 has been
unsatisfactory. A higher raw material cost level, negatively impacting EBITDA
with EUR 21 million, was only partially compensated for by a positive impact of
EUR 12 million as a result of increased sales prices. The gradually implemented
sales price increases are expected to have full effect at the beginning of the
fourth quarter.

There has also been a rapid negative macro-economic development in Brazil,
affecting Business Area Release Liners, leading to a decline in the demand of
our paper grades of up to 20 per cent. The combined effect of the increase in
the price of short fibre pulp and the effect of the decline in the demand had
a significant negative effect on the profitability of the paper business unit
in Brazil in the third quarter.

In Business Area Graphics and Packaging, we have within the uncoated paper
business succeeded with the implementation of the profitability improvement
plan and have reached improved gross margins. For the coated paper business we
have for some time been facing increased competitive pressure, as new
competitors have entered the market, and the possibilities to raise prices have
been limited, even if the price of short fibre pulp has substantially
increased. We have, as a result of our re-financing in September 2014 and a
more favourable currency development for financial items, significantly
increased our net result and earnings per share. We continue the efforts and
actions to achieve our profitability target, an EBITDA margin of 12 per cent at
the end of 2016.

In September we announced a restructuring program at the mill in Italy, which
is part of Business Area Release Liners, and we will continue to adjust our
cost structure in order to increase our margins."


Outlook

The demand outlook of specialty paper products for the fourth quarter of 2015
is stable and is expected to reflect the seasonal pattern, with the exception
of the paper business in Brazil, which is affected by the continued weakened
macro-economic environment.

The price increases announced in the second quarter of 2015 for business areas
Decor and Release Liners have been gradually implemented and the full effect is
expected at the beginning of the fourth quarter.

The seasonal shutdowns at the end of 2015 are expected to be carried out to
about the same extent as in 2014, with the exception of Business Area Graphics
and Packaging and the paper business unit in Brazil of Business Area Release
Liners, where the shutdowns are prolonged in order to reduce inventory levels.
The reduction of inventory levels is expected to reduce the financial result
and improve the cash flow. The cash flow from operations is expected to reflect
the seasonal pattern and hence be strongest in the fourth quarter of 2015.

The cash flow effect from capital expenditure for fixed assets for 2015 is
expected to amount to slightly above two thirds of the depreciation level, and
amount to EUR 35-40 million.


The Munksjö Group

Jul-Sep Jan-Sep Jan-Dec
MEUR 2015 2014 2015 2014 2014

Net sales 269.3 275.9 840.7 856.3 1,137.3
EBITDA (adj.*) 20.0 23.2 71.5 76.6 105.0
EBITDA margin, % (adj.*) 7.4 8.4 8.5 8.9 9.2
EBITDA 15.1 22.9 64.2 74.7 99.4
EBITDA margin, % 5.6 8.3 7.6 8.7 8.7
Operating result (adj.*) 6.8 9.5 31.5 36.6 51.0
Operating margin, % (adj.*) 2.5 3.4 3.7 4.3 4.5
Operating result 1.9 9.2 24.2 34.7 45.4
Operating margin, % 0.7 3.3 2.9 4.1 4.0
Net result 3.2 -3.4 15.6 5.0 7.7
Capital expenditure 10.9 16.4 30.9 30.5 35.1
Employees, FTE 2,808 2,766 2,782 2,767 2,765

* Adjusted for non-recurring items


Third quarter 2015

Net sales were EUR 269.3 (275.9) million.

EBITDA adjusted for non-recurring items decreased to EUR 20.0 (23.2) million
and the adjusted EBITDA margin was 7.4% (8.4%). Currency hedge losses of EUR
1.1 (1.1) million were recorded in segment Other in the quarter.

The operating result adjusted for non-recurring items was EUR 6.8 (9.5)
million. Non-recurring items amounted to EUR -4.9 (-0.3) million and were
related to the restructuring plan at the production facility located in Mathi,
close to Turin in Italy, other efforts to adjust the cost structure and other
reorganization activities.

The operating result was EUR 1.9 (9.2) million and net result EUR 3.2 (-3.4)
million.


January-September 2015

Net sales were EUR 840.7 (856.3) million.

EBITDA adjusted for non-recurring items decreased to EUR 71.5 (76.6) million
and the adjusted EBITDA margin was 8.5% (8.9%). A higher raw material cost
level resulted in a decrease of EBITDA of EUR 21 million. The negative result
effect was only partially compensated for by a positive effect of EUR 12
million euro as a result of increased sales prices, driven by implemented price
increases, a different product mix and a more favourable currency development.

Currency hedge losses of EUR 4.7 (1.7) million were recorded in segment Other
in the reporting period.

The operating result adjusted for non-recurring items was EUR 31.5 (36.6)
million. Non-recurring items amounted to EUR -7.3 (-1.9) million and were
related to the restructuring plan at the production facility located in Italy,
which is part of Business Area Release Liners, other efforts to adjust the cost
structure, other reorganization activities and environmental provisions.

The operating result was EUR 24.2 (34.7) million and net result EUR 15.6 (5.0)
million. Earnings per share increased to EUR 0.30 (0.09).

The currency hedge loss was more than compensated for by exchange gains on
financial assets and liabilities of EUR 8.2 (2.0) million recorded in net
financial items.


Webcast and conference call

A combined news conference, conference call and live webcast for investors,
analysts and media will be arranged on the publishing day 3 November 2015 at
10:00 a.m. CEST (11:00 a.m. EET, 9:00 a.m. UK time) at restaurant Savoy,
room Kabinetti 2 (Eteläesplanadi 14, 7th floor, Helsinki). The report will be
presented by President and CEO Jan Åström. The event will be held in English.

The conference call and live webcast can be followed on the Internet and an
on-demand version of the webcast will be available on the same webpage later
the same day. To join the conference call, participants are requested to dial
one of the numbers below 5-10 minutes prior to the start of the event.


Webcast and conference call information

Finnish callers: +358 (0)9 2313 9201
Swedish callers: +46 (0)8 5052 0110
US callers: +1 334 323 6201
UK callers: +44 (0)20 7162 0077

Conference ID: 955417

Link to the webcast (also available on www.munksjo.com/investors)


For further information, please contact

Jan Åström, President and CEO, Tel. +46 10 250 1001
Pia Aaltonen-Forsell, CFO, Tel. +46 10 250 1029

 

 

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Munksjö is a world-leading manufacturer of advanced paper products developed
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This is what "Made by Munksjö" stands for. Given Munksjö's global presence and
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