Price and volume momentum in Paper drive strong results
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).
- First quarter 2019 net earnings of
$1.27 per share; earnings before items1 of$1.44 per share - Paper prices
$30 per ton higher quarter-over-quarter - Paper shipments increased 2% quarter-over-quarter
Excluding items listed below, the Company had earnings before items1 of
ITEMS
Description | Segment | Line item | Amount | After tax
effect |
EPS impact
(per share) |
||||||
(in millions) | |||||||||||
First quarter 2019 | |||||||||||
● Margin improvement
plan |
Personal Care | Impairment of property, plant
and equipment |
$10 | $8 | $0.12 | ||||||
● Margin improvement
plan |
Personal Care | Closure and
restructuring costs |
$4 | $3 | $0.05 | ||||||
Fourth quarter 2018 | |||||||||||
● Margin improvement
plan |
Personal Care | Impairment of property, plant
and equipment |
$7 | $5 | $0.08 | ||||||
● Margin improvement
plan |
Personal Care | Closure and
restructuring costs |
$8 | $6 | $0.09 | ||||||
● U.S. Tax Reform | Corporate | Income tax expense | $5 | $5 | $0.08 | ||||||
First quarter 2018 | |||||||||||
● Litigation settlement | Corporate | Other operating loss, net | $2 | $2 | $0.03 | ||||||
● Gain on disposal
of property, plant and equipment |
Pulp and Paper | Other operating income, net | $1 | $1 | $0.02 |
QUARTERLY REVIEW
“We had a solid performance from Pulp and Paper despite a wood fiber shortage that negatively impacted costs and output,” said John D. Williams, President and Chief Executive Officer. “Price and volume momentum in paper continued in a favorable market environment, which led to strong productivity and a good cost performance. The pulp business was impacted by lower prices while higher internal pulp shipments due to wood fiber constraints negatively impacted our volumes. Nevertheless, we continued to improve and increase overall productivity and manage costs through saving initiatives.
Mr. Williams added, “In Personal Care, our margins improved driven by better productivity and operational efficiencies as our new customer ramp-up accelerates. We also successfully implemented price increases in both
Operating income was
Operating income before items1 was
(In millions of dollars) | 1Q 2019 | 4Q 2018 | ||||||||||
Sales | $ | 1,376 | $ | 1,390 | ||||||||
Operating income (loss) | ||||||||||||
Pulp and Paper segment | 144 | 148 | ||||||||||
Personal Care segment | (8 | ) | (12 | ) | ||||||||
Corporate | (21 | ) | (3 | ) | ||||||||
Total operating income | 115 | 133 | ||||||||||
Operating income before items1 | 129 | 148 | ||||||||||
Depreciation and amortization | 73 | 75 |
The decrease in operating income in the first quarter of 2019 was the result of higher selling, general and administrative expenses, higher raw material costs and lower volume in pulp. These factors were partially offset by higher average selling prices for paper, lower fixed and other costs and favorable exchange rates.
When compared to the fourth quarter of 2018, manufactured paper shipments were up 2% and pulp shipments decreased 12%. The shipments-to-production ratio for paper was 97% in the first quarter of 2019, compared to 95% in the fourth quarter of 2018. Paper inventories increased by 22,000 tons, and pulp inventories increased by 24,000 metric tons when compared to the fourth quarter of 2018.
LIQUIDITY AND CAPITAL
Cash flow from operating activities amounted to
OUTLOOK
Our paper shipments should benefit from higher demand from our customers following the industry capacity closures while our paper prices will further improve as we continue to implement our recently announced price increases. The second quarter will be adversely affected by seasonally higher maintenance activity in our Pulp and Paper business as we move into the annual shutdowns at some of our major facilities. Personal Care is expected to benefit from our margin improvement plan and the ramp-up of a new customer, partially offset by further raw material cost inflation.
EARNINGS CONFERENCE CALL
The Company will hold a conference call today at
The Company will release its second quarter 2019 earnings results on
1 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.
About
Forward-Looking Statements
Statements in this release about our plans, expectations and future performance, including the statements by Mr. Williams and those contained under “Outlook,” are “forward-looking statements.” Actual results may differ materially from those suggested by these statements for a number of reasons, including changes in customer demand and pricing, changes in manufacturing costs, future acquisitions and divestitures, including facility closings, and the other reasons identified under “Risk Factors” in our Form 10-K for 2018 as filed with the
Highlights
(In millions of dollars, unless otherwise noted)
Three months ended | Three months ended | |||||||
March 31, | March 31, | |||||||
2019 | 2018 | |||||||
(Unaudited) | ||||||||
$ | $ | |||||||
Selected Segment Information | ||||||||
Sales | ||||||||
Pulp and Paper | 1,147 | 1,100 | ||||||
Personal Care | 247 | 262 | ||||||
Total for reportable segments | 1,394 | 1,362 | ||||||
Intersegment sales | (18 | ) | (17 | ) | ||||
Consolidated sales | 1,376 | 1,345 | ||||||
Depreciation and amortization | ||||||||
Pulp and Paper | 57 | 61 | ||||||
Personal Care | 16 | 18 | ||||||
Total for reportable segments | 73 | 79 | ||||||
Impairment of property plant and equipment – Personal Care | 10 | — | ||||||
Consolidated depreciation and amortization and
impairment of property, plant and equipment |
83 | 79 | ||||||
Operating income (loss) | ||||||||
Pulp and Paper | 144 | 76 | ||||||
Personal Care | (8 | ) | 8 | |||||
Corporate | (21 | ) | (7 | ) | ||||
Consolidated operating income | 115 | 77 | ||||||
Interest expense, net | 13 | 16 | ||||||
Non-service components of net periodic benefit cost | (3 | ) | (4 | ) | ||||
Earnings before income taxes and equity loss | 105 | 65 | ||||||
Income tax expense | 24 | 11 | ||||||
Equity loss, net of taxes | 1 | — | ||||||
Net earnings | 80 | 54 | ||||||
Per common share (in dollars) | ||||||||
Net earnings | ||||||||
Basic | 1.27 | 0.86 | ||||||
Diluted | 1.27 | 0.86 | ||||||
Weighted average number of common
shares outstanding (millions) |
||||||||
Basic | 63.0 | 62.7 | ||||||
Diluted | 63.2 | 62.9 | ||||||
Cash flows from operating activities | 55 | 90 | ||||||
Additions to property, plant and equipment | 46 | 25 |
Consolidated Statements of Earnings
(In millions of dollars, unless otherwise noted)
Three months ended | Three months ended | |||||||
March 31, | March 31, | |||||||
2019 | 2018 | |||||||
(Unaudited) | ||||||||
$ | $ | |||||||
Sales | 1,376 | 1,345 | ||||||
Operating expenses | ||||||||
Cost of sales, excluding depreciation and amortization | 1,052 | 1,084 | ||||||
Depreciation and amortization | 73 | 79 | ||||||
Selling, general and administrative | 123 | 110 | ||||||
Impairment of property, plant and equipment | 10 | — | ||||||
Closure and restructuring costs | 4 | — | ||||||
Other operating income, net | (1 | ) | (5 | ) | ||||
1,261 | 1,268 | |||||||
Operating income | 115 | 77 | ||||||
Interest expense, net | 13 | 16 | ||||||
Non-service components of net periodic benefit cost | (3 | ) | (4 | ) | ||||
Earnings before income taxes and equity loss | 105 | 65 | ||||||
Income tax expense | 24 | 11 | ||||||
Equity loss, net of taxes | 1 | — | ||||||
Net earnings | 80 | 54 | ||||||
Per common share (in dollars) | ||||||||
Net earnings | ||||||||
Basic | 1.27 | 0.86 | ||||||
Diluted | 1.27 | 0.86 | ||||||
Weighted average number of common
shares outstanding (millions) |
||||||||
Basic | 63.0 | 62.7 | ||||||
Diluted | 63.2 | 62.9 |
Consolidated Balance Sheets at
(In millions of dollars)
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
(Unaudited) | ||||||||
$ | $ | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 94 | 111 | ||||||
Receivables, less allowances of $7 and $6 | 699 | 670 | ||||||
Inventories | 813 | 762 | ||||||
Prepaid expenses | 25 | 24 | ||||||
Income and other taxes receivable | 21 | 22 | ||||||
Total current assets | 1,652 | 1,589 | ||||||
Property, plant and equipment, net | 2,564 | 2,605 | ||||||
Operating lease right-of-use assets | 81 | — | ||||||
Intangible assets, net | 587 | 597 | ||||||
Other assets | 138 | 134 | ||||||
Total assets | 5,022 | 4,925 | ||||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities | ||||||||
Bank indebtedness | 3 | — | ||||||
Trade and other payables | 675 | 757 | ||||||
Income and other taxes payable | 49 | 25 | ||||||
Operating lease liabilities due within one year | 25 | — | ||||||
Long-term debt due within one year | 1 | 1 | ||||||
Total current liabilities | 753 | 783 | ||||||
Long-term debt | 853 | 853 | ||||||
Operating lease liabilities | 65 | — | ||||||
Deferred income taxes and other | 477 | 476 | ||||||
Other liabilities and deferred credits | 266 | 275 | ||||||
Shareholders’ equity | ||||||||
Common stock | 1 | 1 | ||||||
Additional paid-in capital | 1,982 | 1,981 | ||||||
Retained earnings | 1,075 | 1,023 | ||||||
Accumulated other comprehensive loss | (450 | ) | (467 | ) | ||||
Total shareholders’ equity | 2,608 | 2,538 | ||||||
Total liabilities and shareholders’ equity | 5,022 | 4,925 |
Consolidated Statements of Cash Flows
(In millions of dollars)
For the three months ended | ||||||||
March 31, 2019 | March 31, 2018 | |||||||
(Unaudited) | ||||||||
$ | $ | |||||||
Operating activities | ||||||||
Net earnings | 80 | 54 | ||||||
Adjustments to reconcile net earnings to cash flows from operating activities | ||||||||
Depreciation and amortization | 73 | 79 | ||||||
Deferred income taxes and tax uncertainties | (3 | ) | (3 | ) | ||||
Impairment of property, plant and equipment | 10 | — | ||||||
Net gains on disposals of property, plant and equipment | — | (1 | ) | |||||
Stock-based compensation expense | 2 | 3 | ||||||
Equity loss, net | 1 | — | ||||||
Other | — | (1 | ) | |||||
Changes in assets and liabilities | ||||||||
Receivables | (30 | ) | (2 | ) | ||||
Inventories | (49 | ) | (13 | ) | ||||
Prepaid expenses | — | (2 | ) | |||||
Trade and other payables | (69 | ) | (37 | ) | ||||
Income and other taxes | 26 | 16 | ||||||
Difference between employer pension and other post-retirement
contributions and pension and other post-retirement expense |
1 | — | ||||||
Other assets and other liabilities | 13 | (3 | ) | |||||
Cash flows from operating activities | 55 | 90 | ||||||
Investing activities | ||||||||
Additions to property, plant and equipment | (46 | ) | (25 | ) | ||||
Proceeds from disposals of property, plant and equipment | — | 1 | ||||||
Other | — | (4 | ) | |||||
Cash flows used for investing activities | (46 | ) | (28 | ) | ||||
Financing activities | ||||||||
Dividend payments | (27 | ) | (26 | ) | ||||
Net change in bank indebtedness | 3 | — | ||||||
Proceeds from receivables securitization facility | 20 | — | ||||||
Repayments of receivables securitization facility | (20 | ) | (25 | ) | ||||
Other | (1 | ) | — | |||||
Cash flows used for financing activities | (25 | ) | (51 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (16 | ) | 11 | |||||
Impact of foreign exchange on cash | (1 | ) | 2 | |||||
Cash and cash equivalents at beginning of period | 111 | 139 | ||||||
Cash and cash equivalents at end of period | 94 | 152 | ||||||
Supplemental cash flow information | ||||||||
Net cash payments for: | ||||||||
Interest | 16 | 19 | ||||||
Income taxes | 6 | 4 |
Quarterly Reconciliation of Non-GAAP Financial Measures
(In millions of dollars, unless otherwise noted)
The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Earnings before items”, “Earnings before items per diluted share”, “EBITDA”, “EBITDA margin”, “EBITDA before items”, “EBITDA margin before items”, “Free cash flow”, “Net debt” and “Net debt-to-total capitalization”. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates “Earnings before items” and “EBITDA before items” by excluding the after-tax (pre-tax) effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.
2019 | 2018 | |||||||||||||||||||||||||||
Q1 | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||||
Reconciliation of “Earnings before items” to Net earnings | ||||||||||||||||||||||||||||
Net earnings | ($) | 80 | 54 | 43 | 99 | 87 | 283 | |||||||||||||||||||||
(+) | Impairment of property, plant and equipment | ($) | 8 | — | — | — | 5 | 5 | ||||||||||||||||||||
(+) | Closure and restructuring costs | ($) | 3 | — | — | — | 6 | 6 | ||||||||||||||||||||
(+) | Litigation settlement | ($) | — | 2 | — | — | — | 2 | ||||||||||||||||||||
(-) | Net gains on disposals of property, plant and equipment | ($) | — | (1 | ) | (2 | ) | — | — | (3 | ) | |||||||||||||||||
(-) | U.S. Tax Reform | ($) | — | — | — | (7 | ) | 5 | (2 | ) | ||||||||||||||||||
(=) | Earnings before items | ($) | 91 | 55 | 41 | 92 | 103 | 291 | ||||||||||||||||||||
(/) | Weighted avg. number of common shares outstanding (diluted) | (millions) | 63.2 | 62.9 | 63.2 | 63.2 | 63.0 | 63.1 | ||||||||||||||||||||
(=) | Earnings before items per diluted share | ($) | 1.44 | 0.87 | 0.65 | 1.46 | 1.63 | 4.61 | ||||||||||||||||||||
Reconciliation of “EBITDA” and “EBITDA before items” to
Net earnings |
||||||||||||||||||||||||||||
Net earnings | ($) | 80 | 54 | 43 | 99 | 87 | 283 | |||||||||||||||||||||
(+) | Equity loss, net of taxes | ($) | 1 | — | — | 1 | 1 | 2 | ||||||||||||||||||||
(+) | Income tax expense | ($) | 24 | 11 | 8 | 3 | 35 | 57 | ||||||||||||||||||||
(+) | Interest expense, net | ($) | 13 | 16 | 16 | 15 | 15 | 62 | ||||||||||||||||||||
(+) | Depreciation and amortization | ($) | 73 | 79 | 79 | 75 | 75 | 308 | ||||||||||||||||||||
(+) | Impairment of property, plant and equipment | ($) | 10 | — | — | — | 7 | 7 | ||||||||||||||||||||
(-) | Net gains on disposals of property, plant and equipment | ($) | — | (1 | ) | (3 | ) | — | — | (4 | ) | |||||||||||||||||
(=) | EBITDA | ($) | 201 | 159 | 143 | 193 | 220 | 715 | ||||||||||||||||||||
(/) | Sales | ($) | 1,376 | 1,345 | 1,353 | 1,367 | 1,390 | 5,455 | ||||||||||||||||||||
(=) | EBITDA margin | (%) | 15 | % | 12 | % | 11 | % | 14 | % | 16 | % | 13 | % | ||||||||||||||
EBITDA | ($) | 201 | 159 | 143 | 193 | 220 | 715 | |||||||||||||||||||||
(+) | Closure and restructuring costs | ($) | 4 | — | — | — | 8 | 8 | ||||||||||||||||||||
(+) | Litigation settlement | ($) | — | 2 | — | — | — | 2 | ||||||||||||||||||||
(=) | EBITDA before items | ($) | 205 | 161 | 143 | 193 | 228 | 725 | ||||||||||||||||||||
(/) | Sales | ($) | 1,376 | 1,345 | 1,353 | 1,367 | 1,390 | 5,455 | ||||||||||||||||||||
(=) | EBITDA margin before items | (%) | 15 | % | 12 | % | 11 | % | 14 | % | 16 | % | 13 | % | ||||||||||||||
Reconciliation of “Free cash flow” to Cash flows from operating activities | ||||||||||||||||||||||||||||
Cash flows from operating activities | ($) | 55 | 90 | 177 | 70 | 217 | 554 | |||||||||||||||||||||
(-) | Additions to property, plant and equipment | ($) | (46 | ) | (25 | ) | (37 | ) | (49 | ) | (84 | ) | (195 | ) | ||||||||||||||
(=) | Free cash flow | ($) | 9 | 65 | 140 | 21 | 133 | 359 | ||||||||||||||||||||
“Net debt-to-total capitalization” computation | ||||||||||||||||||||||||||||
Bank indebtedness | ($) | 3 | — | 1 | — | — | ||||||||||||||||||||||
(+) | Long-term debt due within one year | ($) | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||||||
(+) | Long-term debt | ($) | 853 | 1,103 | 1,103 | 1,103 | 853 | |||||||||||||||||||||
(=) | Debt | ($) |
857 |
1,104 | 1,105 | 1,104 | 854 | |||||||||||||||||||||
(-) | Cash and cash equivalents | ($) | (94 | ) | (152 | ) | (264 | ) | (256 | ) | (111 | ) | ||||||||||||||||
(=) | Net debt | ($) |
763 |
952 | 841 | 848 | 743 | |||||||||||||||||||||
(+) | Shareholders’ equity | ($) | 2,608 | 2,493 | 2,458 | 2,553 | 2,538 | |||||||||||||||||||||
(=) | Total capitalization | ($) |
3,371 |
3,445 | 3,299 | 3,401 | 3,281 | |||||||||||||||||||||
Net debt | ($) |
763 |
952 | 841 | 848 | 743 | ||||||||||||||||||||||
(/) | Total capitalization | ($) |
3,371 |
3,445 | 3,299 | 3,401 | 3,281 | |||||||||||||||||||||
(=) | Net debt-to-total capitalization | (%) |
23 |
% | 28 | % | 25 | % | 25 | % | 23 | % |
“Earnings before items”, “Earnings before items per diluted share”, “EBITDA”, “EBITDA margin”, “EBITDA before items”, “EBITDA margin before items”, “Free cash flow”, “Net debt” and “Net debt-to-total capitalization” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Net earnings or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.
Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2019
(In millions of dollars, unless otherwise noted)
The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” by reportable segment. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates the segmented “Operating income (loss) before items” by excluding the pre-tax effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.
Pulp and Paper | Personal Care | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||
Q1’19 | Q2’19 | Q3’19 | Q4’19 | YTD | Q1’19 | Q2’19 | Q3’19 | Q4’19 | YTD | Q1’19 | Q2’19 | Q3’19 | Q4’19 | YTD | Q1’19 | Q2’19 | Q3’19 | Q4’19 | YTD | |||||||||||||||||||||||||
Reconciliation of Operating income (loss)
to “Operating income (loss) before items” |
||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | ($) | 144 | — | — | — | 144 | (8) | — | — | — | (8) | (21) | — | — | — | (21) | 115 | — | — | — | 115 | |||||||||||||||||||||||
(+) | Impairment of property, plant and equipment | ($) | — | — | — | — | — | 10 | — | — | — | 10 | — | — | — | — | — | 10 | — | — | — | 10 | ||||||||||||||||||||||
(+) | Closure and restructuring costs | ($) | — | — | — | — | — | 4 | — | — | — | 4 | — | — | — | — | — | 4 | — | — | — | 4 | ||||||||||||||||||||||
(=) | Operating income (loss) before items | ($) | 144 | — | — | — | 144 | 6 | — | — | — | 6 | (21) | — | — | — | (21) | 129 | — | — | — | 129 | ||||||||||||||||||||||
Reconciliation of “Operating income (loss)
before items” to “EBITDA before items” |
||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) before items | ($) | 144 | — | — | — | 144 | 6 | — | — | — | 6 | (21) | — | — | — | (21) | 129 | — | — | — | 129 | |||||||||||||||||||||||
(+) |
Non-service components of net periodic benefit |
($) | 3 | — | — | — | 3 | — | — | — | — | — | — | — | — | — | — | 3 | — | — | — | 3 | ||||||||||||||||||||||
(+) | Depreciation and amortization | ($) | 57 | — | — | — | 57 | 16 | — | — | — | 16 | — | — | — | — | — | 73 | — | — | — | 73 | ||||||||||||||||||||||
(=) | EBITDA before items | ($) | 204 | — | — | — | 204 | 22 | — | — | — | 22 | (21) | — | — | — | (21) | 205 | — | — | — | 205 | ||||||||||||||||||||||
(/) | Sales | ($) | 1,147 | — | — | — | 1,147 | 247 | — | — | — | 247 | — | — | — | — | — | 1,394 | — | — | — | 1,394 | ||||||||||||||||||||||
(=) | EBITDA margin before items | (%) | 18% | — | — | — | 18% | 9% | — | — | — | 9% | — | — | — | — | — | 15% | — | — | — | 15% |
“Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Operating income (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.
Quarterly Reconciliation of Non-GAAP Financial Measures – By Segment 2018
(In millions of dollars, unless otherwise noted)
The following table sets forth certain non-U.S. generally accepted accounting principles (“GAAP”) financial metrics identified in bold as “Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” by reportable segment. Management believes that the financial metrics are useful to understand our operating performance and benchmark with peers within the industry. The Company calculates the segmented “Operating income (loss) before items” by excluding the pre-tax effect of specified items. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.
Pulp and Paper |
Personal Care |
Corporate |
Total |
|||||||||||||||||||||||||||||||||||||||||
Q1’18 |
Q2’18 |
Q3’18 |
Q4’18 |
Year |
Q1’18 |
Q2’18 |
Q3’18 |
Q4’18 |
Year |
Q1’18 |
Q2’18 |
Q3’18 |
Q4’18 |
Year |
Q1’18 |
Q2’18 |
Q3’18 |
Q4’18 |
Year |
|||||||||||||||||||||||||
Reconciliation of Operating income (loss) to “Operating income (loss) before items”
|
||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) |
($) | 76 | 79 | 135 | 148 | 438 | 8 | 2 | (3) | (12) | (5) | (7) | (19) | (18) | (3) | (47) | 77 | 62 | 114 | 133 | 386 | |||||||||||||||||||||||
(+) |
Impairment of property, plant and equipment |
($) | — | — | — | — | — | — | — | — | 7 | 7 | — | — | — | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||
(-) |
Net gains on disposals of property, plant and equipment |
($) | (1) | (3) | — | — | (4) | — | — | — | — | — | — | — | — | — | — | (1) | (3) | — | — | (4) | ||||||||||||||||||||||
(+) |
Closure and restructuring costs |
($) | — | — | — | — | — | — | — | — | 8 | 8 | — | — | — | — | — | — | — | — | 8 | 8 | ||||||||||||||||||||||
(+) |
Litigation settlement |
($) | — | — | — | — | — | — | — | — | — | — | 2 | — | — | — | 2 | 2 | — | — | — | 2 | ||||||||||||||||||||||
(=) |
Operating income (loss) before items |
($) | 75 | 76 | 135 | 148 | 434 | 8 | 2 | (3) | 3 | 10 | (5) | (19) | (18) | (3) | (45) | 78 | 59 | 114 | 148 | 399 | ||||||||||||||||||||||
Reconciliation of “Operating income (loss) before items” to “EBITDA before items” |
||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) before items |
($) | 75 | 76 | 135 | 148 | 434 | 8 | 2 | (3) | 3 | 10 | (5) | (19) | (18) | (3) | (45) | 78 | 59 | 114 | 148 | 399 | |||||||||||||||||||||||
(+) |
Non-service components of net periodic benefit |
($) | 4 | 6 | 4 | 5 | 19 | — | — | — | — | — | — | (1) | — | — | (1) | 4 | 5 | 4 | 5 | 18 | ||||||||||||||||||||||
(+) |
Depreciation and amortization |
($) | 61 | 61 | 58 | 58 | 238 | 18 | 18 | 17 | 17 | 70 | — | — | — | — | — | 79 | 79 | 75 | 75 | 308 | ||||||||||||||||||||||
(=) |
EBITDA before items |
($) | 140 | 143 | 197 | 211 | 691 | 26 | 20 | 14 | 20 | 80 | (5) | (20) | (18) | (3) | (46) | 161 | 143 | 193 | 228 | 725 | ||||||||||||||||||||||
(/) |
Sales |
($) |
1,100 |
1,123 |
1,146 |
1,154 |
4,523 |
262 | 247 | 237 | 254 |
1,000 |
— | — | — | — | — |
1,362 |
1,370 |
1,383 |
1,408 |
5,523 |
||||||||||||||||||||||
(=) |
EBITDA margin before items |
(%) | 13% | 13% | 17% | 18% | 15% | 10% | 8% | 6% | 8% | 8% | — | — | — | — | — | 12% | 10% | 14% | 16% | 13% |
“Operating income (loss) before items”, “EBITDA before items” and “EBITDA margin before items” have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation or as a substitute for Operating income (loss) or any other earnings statement, cash flow statement or balance sheet financial information prepared in accordance with GAAP. It is important for readers to understand that certain items may be presented in different lines by different companies on their financial statements, thereby leading to different measures for different companies.
Supplemental Segmented Information
(In millions of dollars, unless otherwise noted)
2019 | 2018 | |||||||||||||||||||||||||
Q1 | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||
Pulp and Paper Segment | ||||||||||||||||||||||||||
Sales | ($) | 1,147 | 1,100 | 1,123 | 1,146 | 1,154 | 4,523 | |||||||||||||||||||
Operating income | ($) | 144 | 76 | 79 | 135 | 148 | 438 | |||||||||||||||||||
Depreciation and amortization | ($) | 57 | 61 | 61 | 58 | 58 | 238 | |||||||||||||||||||
Paper | ||||||||||||||||||||||||||
Paper Production | (‘000 ST) | 757 | 739 | 739 | 743 | 757 | 2,978 | |||||||||||||||||||
Paper Shipments – Manufactured | (‘000 ST) | 736 | 769 | 754 | 727 | 721 | 2,971 | |||||||||||||||||||
Communication Papers | (‘000 ST) | 615 | 640 | 615 | 596 | 595 | 2,446 | |||||||||||||||||||
Specialty and Packaging Papers | (‘000 ST) | 121 | 129 | 139 | 131 | 126 | 525 | |||||||||||||||||||
Paper Shipments – Sourced from 3rd parties | (‘000 ST) | 23 | 28 | 26 | 30 | 25 | 109 | |||||||||||||||||||
Paper Shipments – Total | (‘000 ST) | 759 | 797 | 780 | 757 | 746 | 3,080 | |||||||||||||||||||
Pulp | ||||||||||||||||||||||||||
Pulp Shipments(a) | (‘000 ADMT) | 349 | 374 | 377 | 390 | 395 | 1,536 | |||||||||||||||||||
Pulp Shipments mix(b): | ||||||||||||||||||||||||||
Hardwood Kraft Pulp | (%) | 2 | % | 4 | % | 3 | % | 3 | % | 3 | % | 4 | % | |||||||||||||
Softwood Kraft Pulp | (%) | 53 | % | 58 | % | 56 | % | 56 | % | 55 | % | 56 | % | |||||||||||||
Fluff Pulp | (%) | 45 | % | 38 | % | 41 | % | 41 | % | 42 | % | 40 | % | |||||||||||||
Personal Care Segment | ||||||||||||||||||||||||||
Sales | ($) | 247 | 262 | 247 | 237 | 254 | 1,000 | |||||||||||||||||||
Operating (loss) income | ($) | (8 | ) | 8 | 2 | (3 | ) | (12 | ) | (5 | ) | |||||||||||||||
Depreciation and amortization | ($) | 16 | 18 | 18 | 17 | 17 | 70 | |||||||||||||||||||
Impairment of property, plant and equipment | ($) | 10 | — | — | — | 7 | 7 | |||||||||||||||||||
Average Exchange Rates | $US / $CAN | 1.329 | 1.264 | 1.290 | 1.307 | 1.321 | 1.296 | |||||||||||||||||||
$CAN / $US | 0.752 | 0.791 | 0.775 | 0.765 | 0.757 | 0.772 | ||||||||||||||||||||
€ / $US | 1.136 | 1.229 | 1.192 | 1.163 | 1.141 | 1.181 |
(a) Figures represent Pulp Shipments to third parties.
(b) Percentages include Pulp Shipments to our Personal Care segment.
Note: the term “ST” refers to a short ton and the term “ADMT” refers to an air dry metric ton.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190501005498/en/
Source:
INVESTOR RELATIONS
Nicholas Estrela
Director
Investor Relations
Tel.: 514-848-5049
MEDIA RELATIONS
David Struhs
Vice-President
Corporate Services and Sustainability
Tel.: 803-802-8031