Financial Performance of the Global Forest and Paper Industry

Transcription

1 Financial Performance of the Global Forest and Paper Industry Global Forest, Paper and Packaging Practice PwC Fred Bouchard Managing Director, Deals Montreal May 11, 2011

2 Key Industry Metrics Latest Prior year Year over year Ten-year Ten-year Available 3 May Change High 1 Low 1 Lumber Composite, Western SPF US $/mfbm % Lumber SPF, #2&Btr, US $/mfbm % OSB North Central, 7/16" basis, US $/msf % Pulp NBSK, US $/t % Paper Newsprint, US $/t % From May 2001 to May Monthly Average 3. Price at May 6, 2011, Random Lengths Sources: Random Lengths, Pulp & Paper Weekly, FOEX 2

3 Canadian forest products exports (Sales in CAD $ million) 35,000 30,000 25,000 20,000 15,000 10,000 5, % drop in exports to United States United States Europe China Source: Ressources Naturelles Canada 3

4 US housing starts and lumber price: historical correlation US housing starts Lumber price US$/Mfbm s Source: US Census Bureau 4

5 Supply and demand forecast: Canadian softwood lumber production In billion board feet 13 billion feet In 2010, overproduction represented $2 billion 4.2 billion feet Production capacity Total demand e 2011f 2012f 2013f 2014f Source: RISI, North American Lumber forecast, April

6 Wood Fibre Resources: Global Overview PricewaterhouseCoopers Source: UN FAO, PwC LLP

7 PwC 2010 Global Top 100: ROCE by Region -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Global Emerging Asia -2.4% South Africa & Australia Latin & South America Europe US Japan -3.0% Canada -1.7% British Columbia -2.9% Atlantic & Eastern Canada 4.8% 2.3% 5.2% 5.2% 2.8% 4.4% 4.4% 4.5% 1.6% 5.8% 4.7% 2.2% 1.4% 3.8% 4.6% 3.4% Source: PwC 7

8 PwC 2010 Global Top 100 Return on Capital Employed (%) 16% 14% 12% 10% Average Cost of Capital 8% - 12% 8% 6% 4.8% (projected 4% 2% Source: PwC 8

9 Sector deals: Global total deal values and deal numbers!"#$%&'()'*+,-.'!//'0&-.12' (4'7"89:';&-%'+8';&-%'<'9=-8#&> ? 344A 344B 344C 344D 34(4!"#$%&'($%&)$%*(&+,-./ :23; :63< +:891 :<37 +<91 :238 +=: < +=2:91 2:3< +=8:91!"#$%&'($%&0*>/(? ::4 : :5; +=691 8<; +8:91 86; += A)(?$B(&)$%*(&+/$C('&"0&'($%C& 28:38 +4<91 2:53; +=891 +8: =: ; += : Source: PwC Forest, paper and packaging deals: Branching Out 2010 Annual Review

10 Sector deals: Forestland, converting/distributing deal values slightly up on 2010; continued falls in other sectors!"#$%&'()'*&+,-%'.&/0'1/0$&',%&2.3'45*67289'(::;<(:=: Key statistic: US$12.7bn in 2010: (down 32% YoY) $7.8bn Pulp & paper Forestland/forestry Converting & distribution Wood products Aracruz Celulose SA deal Georgia Pacific deal!"#$%&'()*+(,"$&-./(010&$(123(01%415625(3&17-8(9$12%:625("#.(;(<=>=(122#17($&?6&* Source: PwC Forest, paper and packaging deals: Branching Out 2010 Annual Review

11 Regional focus: Europe moves to top of the table, emerging markets remain strong!"#$%&'()'*+,$&'-.+%&'/0'+,,'1&+,-'23'4/56"5&56 Key points: % 11% 18% 3% 5% 9% 22% 5% 19% 36% Europe (incl. Russia) North America Asia Pacific Central & Latin America Europe: largest share (36%) of worldwide deal value for the first time since data series began (2003) and the only continent with US $1bn plus deals North America: revived after a virtual collapse in deal numbers rose 47% Latin America: share falls, but remains higher than in years prior to % 55% 25% Other (Africa, Middle East) Asia Pacific: deal numbers and value dipped year-on-year in 2010 but the value share of all deals increased to 25%; the highest level in our data series!"#$%&'()*+(,"$&-./(010&$(123(01%415625(3&17-8(9$12%:625("#.(;(<=>=(122#17($&?6&* Source: PwC Forest, paper and packaging deals: Branching Out 2010 Annual Review

12 Regional focus: North America Top North America M&A Deals 2011 Month Deal Value Target Acquirer announced (US$m) Target Nationality Acquirer Nationality January 3,500 Smurfit-Stone United States RockTenn United States April 1,263 TimberWest Forest Corp. Canada March 361 Andhra Pradesh Paper Mills Limited (75% Stake) April 143 MagIndustries Corp. (TSX:MAA) Canada BC Investment Mangement Corp.; Public Sector Pension Investment Board Canada India International Paper Company United States Evergreen Industries Holding Group Co., Ltd. February 89 PECO Pallet, Inc. United States The Pritzker Group United States China March N/A Northern Pulp Nova Scotia Corporation; Northern Timber Nova Scotia Corporation Canada Paper Excellence Canada Holdings Corp. Canada February N/A Norampac Avot Vallee Sas Canada OpenGate Capital United States Source: Mergermarket, Capital IQ 12

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14 Thank You PwC