Weissenrieder Presentation - RISI · 620( 2) 285 5()(5(1&(6:h kdyh kdg ! ploov sodqwv lq rxu...

SOME OF OUR REFERENCES

We have had >600 mills/plants in our projects

BillerudKorsnäs

Domtar

Georgia Pacific

Graphic Packaging

International Paper

Klabin

MondiSappiSCA/EssitySonocoStora EnsoWestRock

What really creates a short payback?

Cash Flow

Time

Today

Mill X

Cash Flow

Time

Today

Capex

All data assumptions are “correct.”

Capexes

Cash Flow

Time

Today

Capex

1 2 3 ........................................................

10

20

15

40

5

15

25

35

10

2015

200

CapexProject

NPV (delta)

1

2

3

4

5

6

7

8

9

10

Total

All data assumptions are “correct.”

Now, what is interesting about this ‘correctly calculated’ number?

The 200 is not in any way connected to the value of the mill.

1 2 3 ........................................................

10

1 2 3 ........................................................

10

Cash Flow

Time

Today

B 200

A 200

1 3 ........................................................

10C

Mill B

CapexProject

NPV (delta)

1 20

2 15

3 40

4 5

5 15

6 25

7 35

8 10

9 20

10 15

Total 200

Mill C

CapexProject

NPV (delta)

1 20

2 15

3 40

4 5

5 15

6 25

7 35

8 10

9 20

10 15

Total 200200

2

In reality, these three mills will not havethe same capex plan NPV of 200.

............................................

........91 3 ................................................

........1 2 3

100

200

1 2 3 ........................................................

10

Cash Flow

Time

Today

B 200

A 200

1 2C

1b 2b 10b

Mill B

CapexProject

NPV (delta)

1 20

2 15

3 40

4 5

5 15

6 25

7 35

8 10

9 20

10 15

Total 200

Mill C

CapexProject

NPV (delta)

1 20

2 15

3 40

4 5

5 15

6 25

7 35

8 10

9 20

10 15

Total 200400

10

3 ........................................................3b 10

COMPANIES TYPICALLY SPEND ~75% OF THEIR RESOURCES IN B-MILLS.

POOR ECONOMY,SHRINKING CAPEX BUDGET

WHERE ARE FASTER PAYBACKS FOUND?

POOR ECONOMY,SHRINKING CAPEX BUDGET

WHERE ARE FASTER PAYBACKS FOUND?

“The creativedestruction” funnel

Today40 yrs ago1994

Real price fall

Increasing costs, relative price

Today40 yrs ago1994

Real price fall

Increasing costs, relative price

Today40 yrs ago

Today40 yrs ago

75%

75%

Today40 yrs ago

Today Future40 yrs ago

Base

Debottle-neck 1

…

Close mill B

…

Capabil. line 12

Capabil. line 14

…

New line in mill D

…

Close mill A

Debottle-neck 2

Strategic Alternative n

…

Strategic Alternative 1

Strategic Alternative 2

Strategic Alternative 3

Strategic Alternative 4

Strategic Alternative 5

Strategic Alternative 6

Strategic Alternative 7

Strategic Alternative 8

Strategic Alternative 9

CF Maximizingalternative

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