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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.

Sustainability Information

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.

PLNm 2023 2024e 2025e
Sales 3549 3566 3719
Sales growth (%) -27,5 0,5 4,3
EBITDA 475 449 473
EBITDA margin (%) 13,4 12,6 12,7
EBIT adj. 357 315 335
EBIT adj. margin (%) 10,1 8,8 9
Pretax profit 341 297 321
EPS 3,57 3,03 3,16
EPS growth (%) -60,8 -15 4,1
EPS adj. 3,57 3,03 3,16
DPS 1,07 0,91 0,95
EV/EBITDA (x) 3,3 3,4 3
EV/EBIT adj. (x) 4,4 4,8 4,2
P/E (x) 6,3 7,4 7,1
P/E adj. (x) 6,3 7,4 7,1
EV/sales (x) 0,44 0,42 0,38
FCF yield (%) 21 9,4 14
Le. adj. FCF yld. (%) 20,3 8,6 13,2
Dividend yield (%) 4,8 4,1 4,2
Net IB debt/EBITDA (x) -0,8 -1 -1,3
Le. adj. ND/EBITDA (x) -0,7 -0,9 -1,2
PLNm 2023 2024e 2025e
Sales 3549 3566 3719
COGS -2811 -2846 -2960
Gross profit 738 720 759
Other operating items -263 -271 -287
EBITDA 475 449 473
Depreciation and amortisation -118 -134 -137
of which leasing depreciation 0 0 0
EBITA 357 315 335
EO Items 0 0 0
Impairment and PPA amortisation 0 0 0
EBIT 357 315 335
Net financial items -16 -18 -14
Pretax profit 341 297 321
Tax -69 -57 -62
Net profit 272 240 259
Minority interest -25 -30 -40
Net profit discontinued 0 0 0
Net profit to shareholders 247 210 219
EPS 3,57 3,03 3,16
EPS adj. 3,57 3,03 3,16
Total extraordinary items after tax 0 0 0
Leasing payments -10 -12 -13
Tax rate (%) 20,1 19,3 19,4
Gross margin (%) 20,8 20,2 20,4
EBITDA margin (%) 13,4 12,6 12,7
EBITA margin (%) 10,1 8,8 9
EBIT margin (%) 10,1 8,8 9
Pre-tax margin (%) 9,6 8,3 8,6
Net margin (%) 7,7 6,7 7
Sales growth (%) -27,5 0,5 4,3
EBITDA growth (%) -51,2 -5,5 5,2
EBITA growth (%) -57,7 -11,6 6,4
EBIT growth (%) -57,7 -11,6 6,4
Net profit growth (%) -64,1 -11,9 7,9
EPS growth (%) -60,8 -15 4,1
Profitability N/A N/A N/A
ROE (%) 16,3 13,9 13,3
ROE adj. (%) 16,3 13,9 13,3
ROCE (%) 17,7 15,9 15,7
ROCE adj. (%) 17,7 15,9 15,7
ROIC (%) 18,9 17,7 18,1
ROIC adj. (%) 18,9 17,7 18,1
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 475 449 473
EBITDA adj. margin (%) 13,4 12,6 12,7
EBITDA lease adj. 465 437 460
EBITDA lease adj. margin (%) 13,1 12,2 12,4
EBITA adj. 357 315 335
EBITA adj. margin (%) 10,1 8,8 9
EBIT adj. 357 315 335
EBIT adj. margin (%) 10,1 8,8 9
Pretax profit Adj. 341 297 321
Net profit Adj. 272 240 259
Net profit to shareholders adj. 247 210 219
Net adj. margin (%) 7,7 6,7 7
PLNm 2023 2024e 2025e
EBITDA 475 449 473
Goodwill 8 8 8
Net financial items -16 -18 -14
Other intangible assets 62 62 62
Paid tax -87 -57 -62
Tangible fixed assets 1168 1244 1272
Non-cash items 144 -18 -14
Right-of-use asset 0 0 0
Cash flow before change in WC 516 355 382
Total other fixed assets 54 54 54
Change in working capital -45 0 0
Fixed assets 1292 1369 1396
Operating cash flow 471 355 382
Inventories 445 470 519
Capex tangible fixed assets -147 -210 -165
Receivables 415 467 493
Capex intangible fixed assets 0 0 0
Other current assets 70 71 73
Acquisitions and Disposals 0 0 0
Cash and liquid assets 500 564 708
Free cash flow 324 145 217
Total assets 2723 2939 3189
Dividend paid -187 -74 -63
Shareholders equity 1443 1567 1710
Share issues and buybacks 0 0 0
Minority 358 374 403
Leasing liability amortisation -10 -12 -13
Total equity 1802 1941 2113
Other non-cash items -111 4 3
Long-term debt 104 104 104
Pension debt 0 0 0
Convertible debt 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 176 176 176
Short-term debt 49 49 49
Accounts payable 448 508 576
Other current liabilities 145 162 172
Total liabilities and equity 2723 2939 3189
Net IB debt -402 -465 -609
Net IB debt excl. pension debt -402 -465 -609
Net IB debt excl. leasing -402 -465 -609
Capital employed 1954 2094 2266
Capital invested 1400 1476 1504
Working capital 337 337 337
Market cap. diluted (m) 1549 1549 1549
Net IB debt adj. -348 -411 -555
Market value of minority 358 374 403
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity N/A N/A N/A
EV 1559 1512 1397
Total assets turnover (%) 118,7 125,9 121,4
Working capital/sales (%) 13,7 9,5 9,1
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) -22,3 -24 -28,8
Net debt / market cap (%) -25,9 -30 -39,3
Equity ratio (%) 66,2 66 66,3
Net IB debt adj. / equity (%) -19,3 -21,2 -26,3
Current ratio 2,23 2,19 2,25
EBITDA/net interest 29,4 24,9 33,6
Net IB debt/EBITDA (x) -0,8 -1 -1,3
Net IB debt/EBITDA lease adj. (x) -0,7 -0,9 -1,2
Interest coverage 11,9 13 16,6
PLNm 2023 2024e 2025e
Shares outstanding adj. 69 69 69
Diluted shares adj. 69 69 69
EPS 3,57 3,03 3,16
Dividend per share 1,07 0,91 0,95
EPS adj. 3,57 3,03 3,16
BVPS 20,83 22,61 24,67
BVPS adj. 19,82 21,6 23,67
Net IB debt/share -5,02 -5,93 -8,01
Share price 61 61 61
Market cap. (m) 1549 1549 1549
P/E (x) 6,3 7,4 7,1
EV/sales (x) 0,44 0,42 0,38
EV/EBITDA (x) 3,3 3,4 3
EV/EBITA (x) 4,4 4,8 4,2
EV/EBIT (x) 4,4 4,8 4,2
Dividend yield (%) 4,8 4,1 4,2
FCF yield (%) 21 9,4 14
Le. adj. FCF yld. (%) 20,3 8,6 13,2
P/BVPS (x) 1,07 0,99 0,91
P/BVPS adj. (x) 1,08 0,99 0,91
P/E adj. (x) 6,3 7,4 7,1
EV/EBITDA adj. (x) 3,3 3,4 3
EV/EBITA adj. (x) 4,4 4,8 4,2
EV/EBIT adj. (x) 4,4 4,8 4,2
EV/CE (x) 0,8 0,7 0,6
Investment ratios N/A N/A N/A
Capex/sales (%) 4,1 5,9 4,4
Capex/depreciation 1,2 1,6 1,2
Capex tangibles / tangible fixed assets 12,6 16,9 13
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 10,12 10,75 10,78

Equity research

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Media

Arctic Paper - Fireside chat with President & CEO Michal Jarczyński
Arctic Paper - Company presentation with Michal Jarczynski, President & CEO & Fabian Langenskiöld, EVP Sales & Marketing

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Thomas Onstad 68.1 % 68.1 % 31 Dec 2022
Norges Bank 1.3 % 1.3 % 31 Dec 2023
Dimensional Fund Advisors 0.3 % 0.3 % 30 Apr 2024
Handelsbanken Fonder 0.2 % 0.2 % 30 Apr 2024
SEB Fonder 0.2 % 0.2 % 30 Apr 2024
Acadian Asset Management 0.1 % 0.1 % 30 Apr 2024
Kärnavfallsfonden 0.0 % 0.0 % 30 Sep 2023
Skandia Fonder 0.0 % 0.0 % 30 Apr 2024
New York State and Local Retirement System (NYSLRS) 0.0 % 0.0 % 31 Mar 2023
Voya Investment Management 0.0 % 0.0 % 31 Mar 2024
Source: Holdings by Modular Finance AB