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Arctic Paper: Highway to diversification - ABG

• Niche paper player turning into a diversified pulp & paper group
• Paper prices pointing down - more capacity cuts needed
• Fair value range SEK 35-80 per share

Becoming a balanced pulp & paper player
Arctic Paper is primarily a fine paper producer that is on its way to diversifying its cash flows into packaging and power, by investing PLN ~1.5bn over an almost decade-long period. As a majority owner of Rottneros, Arctic Paper also has synergistic exposure to pulp revenues. The company's long-term strategy is to reduce the volatility of its earnings by diversifying into the margin-accretive packaging and power segments.
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