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Arctic Paper

Arctic Paper

Arctic Paper is a paper production company focusing on high quality coated and uncoated paper products. The company currently consist of three paper mills and five brands: Amber, Arctic, Arctic Volume, Munken and G. With a majority ownership of the Rottneros AB Group, the company complements their product portfolio with pulp production. Arctic Paper's main clients are printing houses, publishers and wholesalers, serving industries such as advertising and design indirectly.

Key risks include: (i) cyclicality of both pulp and paper demand, (ii) Arctic Paper's net short position on pulp, pulpwood, energy and chemicals prices, (iii) a structural decline in paper demand, (iv) potential losses stemming from hedging against electricity and pulp prices and (v) production facility-related issues such as risk of injuries, machinery breakdown, fires and other accidents that can adversely impact the company's production capabilities.

2022 2023e 2024e
Sales 4894 3510 3525
Sales growth (%) 43,4 -28,3 0,4
EBITDA 974 329 352
EBITDA margin (%) 19,9 9,4 10
EBIT adj. 843 206 221
EBIT adj. margin (%) 17,2 5,9 6,3
Pretax profit 928 219 222
EPS 9,11 2,52 2,27
EPS growth (%) 396,2 -72,3 -9,9
EPS adj. 9,11 2,52 2,27
DPS 2,7 0,76 0,68
EV/EBITDA (x) 1,3 4 3,7
EV/EBIT adj. (x) 1,5 6,4 5,9
P/E (x) 1,7 6,2 6,9
P/E adj. (x) 1,7 6,2 6,9
EV/sales (x) 0,25 0,38 0,37
FCF yield (%) 41,9 6,1 9,4
Le. adj. FCF yld. (%) 41,2 5,3 8,7
Dividend yield (%) 17,3 4,9 4,4
Net IB debt/EBITDA (x) -0,5 -0,6 -0,7
Le. adj. ND/EBITDA (x) 0,3 0,4 0,4
2022 2023e 2024e
Sales 4894 3510 3525
COGS -3484 -2845 -2810
Gross profit 1411 665 715
Other operating items -437 -336 -363
EBITDA 974 329 352
Depreciation and amortisation -131 -123 -131
of which leasing depreciation 0 0 0
EBITA 843 206 221
EO Items 0 0 0
Impairment and PPA amortisation 0 0 0
EBIT 843 206 221
Net financial items 85 14 1
Pretax profit 928 219 222
Tax -171 -29 -43
Net profit 757 190 179
Minority interest -126 -15 -22
Net profit discontinued 0 0 0
Net profit to shareholders 631 175 157
EPS 9,11 2,52 2,27
EPS adj. 9,11 2,52 2,27
Total extraordinary items after tax 0 0 0
Leasing payments -7 -8 -8
Tax rate (%) 18,4 13,4 19,3
Gross margin (%) 28,8 18,9 20,3
EBITDA margin (%) 19,9 9,4 10
EBITA margin (%) 17,2 5,9 6,3
EBIT margin (%) 17,2 5,9 6,3
Pre-tax margin (%) 19 6,2 6,3
Net margin (%) 15,5 5,4 5,1
Sales growth (%) 43,4 -28,3 0,4
EBITDA growth (%) 197,2 -66,2 7,1
EBITA growth (%) 244,7 -75,6 7,7
EBIT growth (%) N/A -75,6 7,7
Net profit growth (%) 330,2 -74,9 -5,5
EPS growth (%) 396,2 -72,3 -9,9
Profitability N/A N/A N/A
ROE (%) 50,5 11,8 11,1
ROE adj. (%) 50,5 11,8 11,1
ROCE (%) 49,4 11 12,2
ROCE adj. (%) 49,4 11 12,2
ROIC (%) 47,3 11,3 11,3
ROIC adj. (%) 47,3 11,3 11,3
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 974 329 352
EBITDA adj. margin (%) 19,9 9,4 10
EBITDA lease adj. 967 321 345
EBITDA lease adj. margin (%) 19,8 9,1 9,8
EBITA adj. 843 206 221
EBITA adj. margin (%) 17,2 5,9 6,3
EBIT adj. 843 206 221
EBIT adj. margin (%) 17,2 5,9 6,3
Pretax profit Adj. 928 219 222
Net profit Adj. 757 190 179
Net profit to shareholders adj. 631 175 157
Net adj. margin (%) 15,5 5,4 5,1
2022 2023e 2024e
EBITDA 974 329 352
Goodwill 9 8 8
Net financial items 85 14 1
Other intangible assets 69 55 55
Paid tax -65 -53 -43
Tangible fixed assets 1127 1168 1248
Non-cash items -229 28 1
Right-of-use asset 0 0 0
Cash flow before change in WC 764 318 311
Total other fixed assets 167 110 110
Change in working capital -157 -45 0
Fixed assets 1372 1341 1420
Operating cash flow 607 272 311
Inventories 601 568 583
Capex tangible fixed assets -156 -207 -210
Receivables 503 355 383
Capex intangible fixed assets 0 0 0
Other current assets 296 123 125
Acquisitions and Disposals 0 0 0
Cash and liquid assets 482 253 166
Free cash flow 452 65 101
Total assets 3254 2639 2676
Dividend paid -28 -187 -52
Shareholders equity 1588 1375 1473
Share issues and buybacks 0 0 0
Minority 465 356 374
Leasing liability amortisation -7 -8 -8
Total equity 2052 1731 1846
Other non-cash items 83 -63 -5
Long-term debt 162 117 -6
Pension debt 0 0 0
Convertible debt 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 233 178 178
Short-term debt 43 51 51
Accounts payable 551 408 441
Other current liabilities 212 154 165
Total liabilities and equity 3254 2639 2676
Net IB debt -443 -195 -231
Net IB debt excl. pension debt -443 -195 -231
Net IB debt excl. leasing -443 -195 -231
Capital employed 2258 1899 1892
Capital invested 1609 1537 1616
Working capital 637 484 484
Market cap. diluted (m) 1079 1079 1079
Net IB debt adj. -307 -113 -149
Market value of minority 465 356 374
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity N/A N/A N/A
EV 1236 1322 1304
Total assets turnover (%) 173,4 119,1 132,6
Working capital/sales (%) 9,5 16 13,7
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) -21,6 -11,3 -12,5
Net debt / market cap (%) -41,1 -18,1 -21,4
Equity ratio (%) 63,1 65,6 69
Net IB debt adj. / equity (%) -15 -6,5 -8
Current ratio 2,33 2,12 1,91
EBITDA/net interest 11,5 24,3 352,7
Net IB debt/EBITDA (x) -0,5 -0,6 -0,7
Net IB debt/EBITDA lease adj. (x) -0,3 -0,4 -0,4
Interest coverage 114,5 24,6 26,9
2022 2023e 2024e
Shares outstanding adj. 69 69 69
Diluted shares adj. 69 69 69
EPS 9,11 2,52 2,27
Dividend per share 2,7 0,76 0,68
EPS adj. 9,11 2,52 2,27
BVPS 22,91 19,85 21,25
BVPS adj. 21,79 18,95 20,35
Net IB debt/share -4,44 -1,63 -2,14
Share price 41,65 41,65 41,65
Market cap. (m) 1079 1079 1079
P/E (x) 1,7 6,2 6,9
EV/sales (x) 0,25 0,38 0,37
EV/EBITDA (x) 1,3 4 3,7
EV/EBITA (x) 1,5 6,4 5,9
EV/EBIT (x) 1,5 6,4 5,9
Dividend yield (%) 17,3 4,9 4,4
FCF yield (%) 41,9 6,1 9,4
Le. adj. FCF yld. (%) 41,2 5,3 8,7
P/BVPS (x) 0,68 0,78 0,73
P/BVPS adj. (x) 0,68 0,79 0,74
P/E adj. (x) 1,7 6,2 6,9
EV/EBITDA adj. (x) 1,3 4 3,7
EV/EBITA adj. (x) 1,5 6,4 5,9
EV/EBIT adj. (x) 1,5 6,4 5,9
EV/CE (x) 0,5 0,7 0,7
Investment ratios N/A N/A N/A
Capex/sales (%) 3,2 5,9 6
Capex/depreciation 1,2 1,7 1,6
Capex tangibles / tangible fixed assets 13,8 17,7 16,8
Capex intangibles / definite intangibles N/A N/A N/A
Depreciation on intang / def. intang N/A N/A N/A
Depreciation on tangibles / tangibles 11,63 10,54 10,49

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Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Thomas Onstad 68.1 % 68.1 % 31 Dec 2022
Handelsbanken Fonder 0.2 % 0.2 % 31 Aug 2023
Dimensional Fund Advisors 0.2 % 0.2 % 31 Aug 2023
SEB Fonder 0.2 % 0.2 % 31 Aug 2023
Plain Capital Fonder 0.0 % 0.0 % 31 Aug 2023
Acadian Asset Management 0.0 % 0.0 % 30 Jun 2023
Kärnavfallsfonden 0.0 % 0.0 % 31 Mar 2023
RAM Active Investments SA 0.0 % 0.0 % 31 Mar 2023
Skandia Fonder 0.0 % 0.0 % 31 Aug 2023
Storebrand Fonder 0.0 % 0.0 % 31 Aug 2023
Source: Holdings by Modular Finance AB