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Crown Van Gelder N.V. Velsen. Annual results 2005. Presentation 10 February 2006. Agenda 10 February 2006. Opening Highlights 2005 Key figures Production and sales volume CVG Paper machines and power plant rebuilt P&L, Balance Sheet, Cash Flow Investments IFRS
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Crown Van Gelder N.V. Velsen Annual results 2005 Presentation 10 February 2006
Agenda 10 February 2006 • Opening • Highlights 2005 • Key figures • Production and sales volume CVG • Paper machines and power plant rebuilt • P&L, Balance Sheet, Cash Flow • Investments • IFRS • Results and outlook European paper companies • Mission 2010 • Assumptions and outlook CVG for 2006 • Questions
Highlights 2005 • Net result EUR 8.1 million, down 3% on 2004 • Sales volume increase of 5% to 200,400 ton • Selling price down with 2.4% on 2004 • PM 1 / PM 2 and power plant successfully rebuilt • Dividend proposal of EUR 1 per share certificate (54% pay out) • Mission statement 2010
WF Uncoated order inflow total – 3 weeks average
Production and sales volume CVG Geographical spread of sales volume CVG 14% 12% Outside Europe Netherlands 4% Other Europe 15% France 15% Belgium/Luxembourg 23% 17% Germany United Kingdom
NBSK 2002 2003 2004 2005
BHKP 2002 2003 2004 2005
Consolidated profit & loss account (EUR x 1,000) (unaudited)
Consolidated Balance Sheet (before profit appropriation) (EUR x 1,000) (unaudited)
Consolidated Cash Flow Statement (EUR x 1,000) (unaudited)
StoraEnso results • Net profit of EUR -126 mln (2004: EUR 838 mln) • Non-recurring items EUR -451 mln (2004: EUR 370 mln) • Operating profit Fine Paper division EUR 62 mln (2004: EUR 55 mln) • Sales volume (3.6 mln ton) equals last year; stable selling prices • ROCE Fine Paper increased from 1.9% to 2.2% in 2005 • Operational loss of EUR 190 mln due to labour dispute
UPM-Kymmene results • Net result decreased from EUR 920 mln to EUR 261 mln in 2005 • Non-recurring items EUR -249 mln (2004: gain of EUR 205 mln) • Operating profit Fine and Speciality Papers division decreases from EUR 160 mln in 2004 to EUR 88 in 2005 • Sales volume (3 mln ton) equals 2004 • Selling prices -1% • ROCE from 6.1% in 2004 to 3.4% in 2005
M-Real results • Net result of EUR -81 mln (2004: EUR 45 mln) • Non-recurring items EUR 32 mln (2004: EUR – 33 mln) • Operating profit Office Paper division EUR -0.7 mln (2004: EUR 1.5 mln) • Sales volume up by 7.6% to 1,034 mln ton • Selling prices -3% • ROCE Office Paper -0.5% (2004: 1.3%)
Outlook • Jukka Härmalä (CEO StoraEnso): “In Europe a slight pick-up in advertising and direct marketing is expected to stimulate demand for advertising-driven papers …. The fine paper market is heading into a seasonally good first quarter and the demand outlook is favourable, which should support some price increases.” • UPM-Kymmene Board: “Demand for printing papers is forecast to be better than last year. Growth in demand will be stronger within emerging markets. Average paper prices are forecast to be higher. Raw materials and energy prices are forecast to rise faster than inflation. UPM is continuing cost cutting and studying a number of options to achieve a lasting improvement in profitability.”
Outlook • Hannu Antilla (CEO M-Real): “Demand for our main products will improve during the first quarter, and we are optimistic about price increases, particularly for uncoated fine paper. The price of coated magazine paper is also likely to rise somewhat. Because of the sharp rise in production costs, there is a considerable need for price increases in coated fine paper and paperboard products.”
ROCE Comparison CVG and Peer Group
CEPIFINE Conclusion: slow increase in utilisation rate Source: Cepifine
Mission 2010 Based upon a study of market developments and trend analyses we set 10 targets for CVG to be reached in 2010 1. Higher added value to existing and new customers 2. Production to 230,000 ton, industrial applications from 44% in 2005 to 50% 3. Focus on service: first-time-right, smaller runs, customer satisfaction +7 4. Exploiting benefits of independent company, short lines, decisive organisation 5. Extending customer base 6. ROCE of 11% over cycle, increase pay-out to 50-60% of net earnings 7. Sustainable organisation in energy and raw materials (50% with CoC) 8. Increase competence level of personnel 9. Health and Safety < 10 industrial accidents per 1,000 employees 10. Reducing sickness rate to < 4% per annum
Assumptions and outlook for 2006 • Assumptions • Sales and production volume up to 210,000 ton • Implement higher prices in commodities • Introduction of new products • Capital expenditure around EUR 8 mln • Increase of energy costs of around EUR 6 mln • Price of bleached pulp and USD/EUR exchange rate • Selling price development • Outlook • Forecast result CVG uncertain, but likely to be lower than in 2005
Meeting 10 February 2006 Questions