Key message: Strong print despite box volumes in the red. Strong performance from Southern Europe, while North America and Northern Europe remain challenging. An already bullish FY 23E outlook was upgraded.
Key message: Cotton and polyester in the red, while VSF and DP are stable. Spot DP is $948/t. VSF inventory days tick up slightly (now at 27.0) and the average op. rate is stable at 69%. VSF theoretical profit remains in the red at -USD 173/t.
Key message: Relief for pulp prices in Europe, while Graphic Paper prices remain stable. Containerboard prices continue to edge down.
Key message: Cotton in the green (3 weeks in a row) and is trading at a 2% premium to VSF. VSF is stable, while polyester is further in the red. Spot DP down 1% to USD 948/t. VSF inventory days continue to tighten (now at 25.0) and the average op. rate improves further to 69%. VSF theoretical profit remain in the red but continues to improve (-USD 185/t). Lenzing and Grasim recent trading updates point to continued margin pressure for VSF producers until demand improves – “this could take a few quarters”.
Key message: Strong Q4 expected, with record quarterly EBITDA print of USD 439mn (+203% y/y & 18% q/q) and EPS of USD 0.47/share. We expect net debt/EBITDA to decline to 0.9x (net debt: USD 1,184mn).
Key message: Graphic Paper prices further in the green in October, while pulp and containerboard were mostly stable. OCC was down 33% m/m. October saw share prices claw back losses from the previous month, led by Sylvamo (+42%) and Sappi (+29%).
Key message: Corrugated box volumes in the red (similar to Mondi and DS Smith) on the back of slower demand and a high base in 2022. This is likely to persist into Q4, with further box price increases unlikely as costs are moderating. European containerboard stocks “are not too bad” and margins are currently strong given lower OCC and energy costs.
Key message: Cotton in the red (again) and is trading at a 2% discount to VSF. VSF tracks cotton and spot DP down 2% to USD 1,000/t. VSF inventory days stable at 27.0, while the average op. rate improves further to 68%. VSF theoretical profit deeper in the red at -USD 278/t, likely to cause further VSF and DP price pressure.
Key message: Record high EBITDA and record low gearing. Sack kraft order book is “okay and holding up, but length is reducing”. They are starting to see signs of a more gradual change towards normalized market conditions with sentiment changing towards being less favourable in Europe; and stability in North America.
Key message: Transformation continues for Norske Skog to become a leading European independent producer of recycled containerboard. Gearing low, with net debt/EBITDA of 0.4x. Valuation remains undemanding.