• Loss after net financial items amounted to SEK ‑43 (0) million for the
fourth quarter of 2013.
• Loss after net financial items for the full year 2013 amounted to SEK -66
(6) million before impairment losses (write-downs) and one-off costs, which
amounted to SEK -92 (0) million. One-off costs basically comprise an
impairment loss of SEK 80 million in respect of plant at Utansjö. Operating
loss amounted to SEK -154 (6) million for the full year.
• Cash flow from operating activities amounted to SEK 2 (-8) million for the
fourth quarter of 2013 and SEK 62 (41) for the full year. Net borrowing
amounted to SEK 25 (52) million.
• The strong Swedish krona during the year had a negative impact on the
result.
• Carl-Johan Jonsson took office as the new CEO and President on 1 July 2013.
• The Board of Directors proposes that no dividend be declared for 2013.
CEO’s statement
In many ways 2013 was a year of change, review and fresh ideas for Rottneros.
We have been conducting extensive and necessary work with change since the
summer of 2013. Our objective is to strengthen our competitiveness and generate
the profitability that is ultimately decisive for the long-term survival of the
Group. In terms of results, 2013 represented a weak year in the history of
Rottneros. This was due to both foreign currency effects and lower production
than planned.
The entire fourth quarter was characterised by our ongoing work with change,
the aim of which is to generate increased profitability. The programme will be
implemented by January 2015. Change takes time, but we have already seen some
results. We are pleased to note good production levels at Vallvik Mill in both
November and December following the annual maintenance shutdown.
This work affects the whole Group and is both practical and strategic. For
production we are focusing on safety, clear routines and responsibility. A
strong safety culture and a safe work environment – putting our house in order
if you like – represent, like a positive and open attitude and clear
leadership, important framework conditions to enhance availability and
productivity. We place a strong emphasis on identifying, taking stock of and
analysing the risks associated with production and also providing the necessary
rules and regulations, but this also involves establishing the common outlook
required to succeed. In addition to changes in our way of working in
production, we will of course endeavour to optimise our sales, purchasing and
financial control in order to secure our long‑term profitability.
We have submitted our application for a permit to increase production at
Vallvik Mill. If the relevant public authorities grant their approval, we will
get a permit to produce 255,000 tonnes per year. We currently have a temporary
permit for 240,000 tonnes maximum per year. We see a need for limited
investments with a view to eliminating bottlenecks. We activated the groundwood
line at Rottneros Mill during the autumn and achieved good production levels.
In terms of the market, the last quarter was also characterised by a continued
increase in demand for NBSK pulp, and the market is currently strong with NBSK
prices continuing to rise. CTMP pulp also continued to develop in a strong and
positive way during the fourth quarter.
All of these changes – large and small – are time-consuming. I am convinced
that the work that we have now initiated, one step at a time, will give us the
availability, production and not least the culture that we need for long‑term
profitability.
Carl-Johan Jonsson
ACCOUNTING POLICIES
This Year-end Report has been prepared in accordance with IAS 34 ‘Interim
Financial Reporting’, which complies with Swedish law through the application
of the Swedish Financial Reporting Board’s Recommendation RFR 1 ‘Supplementary
Accounting Rules for Groups’ together with RFR 2 ‘Accounting for Legal
Entities’, in respect of the parent company.
The accounting policies, definitions of key ratios and calculation methods are
the same as those used in the last annual report.
FORTHCOMING FINANCIAL INFORMATION
25 April 2014 Interim Report (Jan-Mar 2014)
23 July 2014 Interim Report (Jan-Jun 2014)
24 October 2014 Interim Report (Jan-Sep 2014)
The Annual General Meeting for Rottneros AB will be held in Stockholm on Friday
25 April 2014.
The information in this Year-end Report is such that Rottneros is required to
disclose under Sweden’s Securities Market Act. The report was released for
publication on 24 January 2014 at 08.30.
This Year-end Report and additional information are available on
www.rottneros.com
Stockholm, 24 January 2014
Board of Directors, Rottneros AB
(For full report, see attached file)
ROTTNEROS IN BRIEF
Rottneros is a supplier of customised and high quality paper pulp with its
origins dating back to the 17th century.
Around 250 people are employed at Rottneros, which had a turnover of SEK 1.4
billion in 2013.
Rottneros produces market pulp; i.e. paper pulp sold on the open market in
contrast to pulp that is produced at mills with integrated paper production.
The Group has an annual production capacity of almost 400,000 tonnes of pulp at
its two mills in Rottneros and Vallvik.
Business concept
Rottneros’ business concept is to be an independent and flexible supplier of
high-quality, customised pulp. Rottneros adapts its product range to meet the
needs and high expectations of customers by continuously developing its
products and providing a high level of supplier reliability, technical support
and service.
Business model
Rottneros operates in the market for market pulp and is a global supplier of
bleached and unbleached long-fibre chemical pulp, together with mechanical CTMP
and groundwood pulp.
Pulp is produced at two Swedish pulp mills. Vallvik Mill produces two grades of
long-fibre sulphate pulp: fully bleached sulphate pulp (ECF – Elemental
Chlorine Free) and unbleached sulphate pulp (UKP – Unbleached Kraft Pulp).
Rottneros Mill manufactures CTMP and groundwood pulp, which are mechanical
grades of pulp.
Adding value
Rottneros adds value by focusing on segments where the Group has achieved, or
can achieve, a strong position in the market for market pulp. Rottneros is an
important supplier of, for example, pulp for electrical applications imposing
very high purity requirements, filters where air permeability is crucial, food
packaging where the most important factor is its stiffness, and pulp for thin
printing paper with high requirements for opacity.
An essential part of adding value is the effective and rational management of
the input goods required for pulp production. Rottneros primarily uses three
input goods:
• Timber, which accounts for approximately 39 per cent of our costs.
• Electricity, which accounts for approximately eight per cent of our costs.
• Chemicals, which account for approximately eight per cent of our costs.
In order to achieve security and stability, Rottneros is looking for long-term
relationships and contracts with the suppliers of these goods.
Operative objectives and strategies
Rottneros has a number of overall objectives for its operational activities,
which are intended to result in a competitive return for shareholders over a
business cycle by creating value and yielding dividends. In order to achieve
these objectives, the Group needs to create added value for its customers as
well as be an attractive employer and competitive producer.
One of our objectives is growth. Rottneros works according to two main
strategies to create a favourable environment for achieving this goal:
• Rottneros is looking for development opportunities to strengthen the
existing pulp operation through strategic alliances in Sweden and abroad.
The Group is also planning to further increase capacity at Vallvik Mill.
• Rottneros is preparing for a possible entry into related activities, where
the Group’s knowledge of pulp refining is utilised and represents a
precondition, and where there are clear synergy effects. One step in this
development is that the Group is running projects in cooperation with
industrial and financial partners aimed at leading to the production of
high-refined bio fuel at both mills.
Another objective is for Rottneros to gradually lay the foundation for less
volatile movements in the share price over the course of a business cycle by
focusing increasingly on more specialised grades of pulp.
Rottneros, a company that was originally established in the 17th century, is an
independent and flexible supplier of customised paper pulp of high quality.
Rottneros has been able to adapt in order to meet high customer expectations by
continually developing its products and maintaining high levels of delivery
reliability, technical support and service.
Rottneros has an annual total production capacity of almost 400,000 tonnes of
pulp at two mills in Sweden. Increasingly intensive product development in line
with the requirements of customers will result in profitability that is higher
and more stable throughout the business cycle.
