Still challenging, but price hikes help

Still waiting for a relief

Q3 slightly above, Q4 likely flat/slightly better

Stora acquires a Finnish sawmill company

Q3 muted, but Q4 should be better

Q3e: Clean paper EBIT of PLN ~27m. Paper prices up, but demand growth is abating. Fair value range of SEK 40-80.

Challenges continue

Miss on paper - higher costs and soft demand

Paper improves, but pulp costs weigh

Q2e: Clean EBIT of ~PLN 38m. Paper is recovering: better demand, more supply cuts, higher prices. Fair value range of SEK 40-80 per share.

Leading indicators

OECD: The indicator points up from a low level. US: The indicator points up (housing starts, monetary policy, interest rates, real FX). EU: The indicator points up from a low level (bond yields, stock market). Japan: The indicator is neutral (monetary policy, housing starts).

Paper EBITDA in line

Paper EBITDA PLN 109m, in line vs ABGSCe PLN 108m. Group EBITDA miss driven by Rottneros. Paper markets still weak, but demand better

Arctic Paper - FY23 focused on margin management

Arctic Paper’s FY23 results highlight the resilience of its business model in a year of cyclical weakness. Management successfully focused on margins, which were broadly protected through the implementation of cost containment measures and adjusting capacity to match demand. The FY23 EBITDA margin stood at 13%, substantially higher than the historical average of 10%. The cash flow and balance sheet remained strong with net cash of PLN348m, an increase from the FY22 level (PLN276m).

Arctic Paper - Resilient FY23 masked by record comparator

FY23 was a year with numerous obstacles for the European paper and pulp industry, including lower demand due to an economic downturn and customer destocking. Nevertheless, Arctic Paper’s performance was resilient, with an EBITDA margin of 13%, substantially higher than the long-run historical average, although this is somewhat masked by a record comparator year. The strength of the balance sheet was maintained with net cash of PLN348m, which should bolster the company’s capex programme, focused ...

Arctic Paper - 4P strategy set to mitigate sector headwinds

Arctic Paper is a leading European producer of graphical fine paper, bio-based packaging solutions, high-quality wood pulp, and energy, with a growing renewables portfolio. The company is undergoing a comprehensive transformation process, proactively repositioning its model from largely a niche and agile pulp and paper company to a more diversified business by adding Packaging and Power divisions, as part of its four pillar (4P) strategy for 2030.

Update on Arctic Paper S.A.

Arctic Paper is a leading European producer of paper and pulp. The company is expanding into the production of recyclable packaging and renewable energy.

Arctic Paper - Advancing into new revenue streams

Arctic Paper continues to grapple with the ongoing market challenges that have affected 2023 thus far, with lower demand, heightened input costs and price volatility across most of its segments. Despite this, the company has maintained a robust balance sheet with record Q323 net cash of PLN307m, enabling its continued investment and growth within sustainable energy solutions, a new revenue stream. Q323 margins were broadly protected through the implementation of cost containment measures and adj...

Arctic Paper - Strategy on track despite cyclical weakness

Arctic Paper’s H123 results reflect dampened demand, with customer destocking, alongside sequential price declines seen across the entirety of the European paper and pulp market. Deliveries of its products were substantially below estimated end-use demand, and global commodity prices, such as for pulp and energy, fell from historical highs to cyclical lows in the six-month period. Despite a weaker H123 versus a record strong comparator, Arctic has maintained a robust balance sheet enabling it to...

Arctic Paper - Resilient in a challenging market

Arctic Paper has continued to face the challenging market trends that affected Q422, with lower demand, higher input costs and higher prices across most of its segments in Q123. Management continued to proactively respond to the conditions and EBITDA was only 10% down on Q122 while sequentially much improved from Q422, up 32%. With customers naturally hesitant to lock in a higher pricing environment given the macroeconomic shocks and geopolitical uncertainty, demand now appears unlikely to bounc...

Arctic Paper S.A. - Investment Summary - 22 September 2022

Arctic Paper is one of the largest paper producers in Europe.

Arctic Paper - Packaging and power extension strategy

Arctic Paper, one of the leading producers of high-quality graphical paper in Europe, recently unveiled its new 4P strategy for 2022 to 2030. The strategy will reposition Arctic into four key pillars, building on its paper and pulp core businesses to invest and develop in packaging and power. This should enable Arctic to enhance its focus on sustainable solutions (eg reducing plastic waste), and to build its renewable energy business. The strategic investments will move the company up the value ...

Arctic Paper - Packaging and power extension strategy

Arctic Paper, one of the leading producers of high-quality graphical paper in Europe, recently unveiled its new 4P strategy for 2022 to 2030. The strategy will reposition Arctic into four key pillars, building on its paper and pulp core businesses to invest and develop in packaging and power. This should enable Arctic to enhance its focus on sustainable solutions (eg reducing plastic waste), and to build its renewable energy business. The strategic investments will move the company up the value ...