Arctic Paper S.A. Q4, 2020 - preliminary results*: Good results and strengthened position in turbulent times

• Q4 sales revenue amounted to PLN 714,7mn (EUR¹ 160,8mn).
• EBITDA Q4 was PLN 25,1mn (EUR¹ 5,6mn) and the EBITDA marginal 3,5 percent
• FY 2020 sales revenue amounted to PLN 2847,5mn (EUR¹ 640,6mn).
• EBITDA FY 2020 was PLN 271,4mn (EUR¹ 61,6mn) and the EBITDA margin 9,5 percent
• Paper & Pulp – a resilient combination providing a balanced development over time.
• Strong consolidated result: net debt/EBITDA ratio reduced to 0,49 (0,57).
• Strengthened market position and recovery in paper production and sales during Q4.
• Increased investments in sustainable energy: hydro power, solar cells and biofuels.
• Management board suggests a dividend of PLN 0.30 per share.

*The entire audited report FY2020 will be published on March 16.

¹ Arctic Paper S.A. reports in PLN. In the English press release, the amounts above were converted to EUR at the average rates for the quarter respectively.

“To sum it all up: resilient paper business, record pulp production, new investments in sustainable energy, stable consolidated results and a solid financial position. Despite the turbulent times, Arctic Paper is stronger than in many years.”
Michal Jarczyński, CEO

2020 was a turbulent year which proves the value of combining paper and pulp; two segments with different cycles that together provide a balanced development. We are proud to say that we have succeeded in protecting both our people and the business against Covid-19. The year ended with a strong fourth quarter for the paper segment while the result for the pulp segment was weaker. Q4 consolidated sales amounted to PLN 714.7mn (739.7mn) with an EBITDA of PLN 25.1mn (34.9mn). For the full year, consolidated sales reached PLN 2847.5mn (3117.1mn) with an EBITDA of PLN 271.4mn (278.0mn) and a Group net debt/EBITDA of 0,49 (0,57).

Lower raw material costs continued to favour the paper segment during Q4 resulting in an EBITDA of PLN 50.9mn (31.1mn) while turnover declined slightly to PLN 507.4mn (532.0mn). For the full year 2020, the paper segment reached an EBITDA of 235.3mn (125.9mn) and an EBIT margin of 8,2 percent (3,3). The recovery for the paper segment continued during the fourth quarter, with paper sales volumes reaching 146 000 tonnes (150 000) and capacity usage 90 percent (96). In relative terms, we have strengthened our position on the European fine paper market with stable or growing sales of uncoated woodfree paper. Close relationships with customers and flexibility in production have paved the way for a leading position in certain categories such as book paper and design paper. The share of premium and speciality paper sales accounted for 29 percent (29) of total sales in terms of value at year-end thanks to our strong brands and comprehensive sales efforts.

Renewable and fossil-free energy is a key factor for sustainable paper production, and we are investing to increase our capacity. In 2020, Arctic Paper Munkedals received final permit for a solid fuel boiler that is similar to the one providing the Grycksbo mill with renewable energy. A pilot investment in solar cells is under way at Arctic Paper Kostrzyn. Early 2021, Arctic Paper Munkedals completed an investment of SEK 100mn to expand hydropower from 2 to 6 MW.

For the Group company Rottneros – the pulp segment – Q4 was characterized by lower earnings due to a weak dollar and a planned maintenance shut at the Vallvik mill. Sales for the fourth quarter amounted to SEK 490mn (547mn) and EBITDA to SEK -65mn (-5mn). For the full year 2020, pulp segment sales amounted to SEK 2093mn (2376mn) with an EBITDA of SEK 77mn (374mn) while production reached a new annual record of 412 600 tonnes (406 000). The financial position remains strong with available liquidity amounting to SEK 512mn (558mn).

To sum it all up: resilient paper business, record pulp production, new investments in sustainable energy, stable consolidated results and a solid financial position. Despite the turbulent times, Arctic Paper is stronger than in many years. We can rightfully be proud of our achievements, but we cannot lean back. We need to continue our work with focus on creating a more diverse product portfolio, growth in new areas and an even more sustainable and efficient production.

Michal Jarczyński, CEO of Arctic Paper S.A.

Further information provided by:

Michal Jarczynski, CEO, Arctic Paper S.A. 

Tel. (+46) (0)10 451 7005

E-mail: michal.jarczynski@arcticpaper.com 

Göran Eklund, CFO, Arctic Paper S.A.

Tel. (+46) (0)10 451 7054

E-mail: goran.eklund@arcticpaper.com

Arctic Paper S.A. is one of the leading producers of high-quality graphical fine paper in Europe and consists of three paper mills and four eco-friendly strong brands, Amber, Arctic, Munken and G. Most of the products are sold through the company’s sales offices in Europe. The Group is the main owner of the listed Swedish pulp producer Rottneros AB. Arctic Paper S.A. is listed on the Warsaw Stock Exchange and NASDAQ in Stockholm.
For more information visit, arcticpaper.com