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Annual Review 2015Papyrus Holding AB

An

nual Review

2015 Pap

yrus Hold

ing A

B

CONTENTS

The year in review 1

This is Papyrus 2

Interview with CEO 4

Goals and strategies 6

Papyrus markets 10

Graphical and business paper 15

Papyrus Supplies 19

Mission and core values 27

Papyrus employees 28

Sustainability 32

Five-year summary 36

Financial performance 37

Consolidated income statement 39

Consolidated balance sheet 40

Consolidated cash flow statement 42

Risk analysis 44

Corporate Governance 46

Papyrus Group Management 48

Board of Directors 49

The Papyrus Story 50

Contact 52

Papyrus is currently represented in 20 countries across Europe, employs 1,900 people and supports more than 65,000 customers.

20PAPYRUS IS REPRESENTED

IN 20 COUNTRIES ACROSS EUROPE

Papyrus Annual Review 2015 1

FUTURE-ORIENTED BUSINESS MODEL Papyrus has further developed its flexible, streamlined and customer-oriented business model that features a unique combination of value-adding services – all of which are supported by a efficient logistical set-up and a shared Group IT platform.

ROBUST FINANCIAL POSITION During the 2009–2015 period, average working capital as a percentage of sales decreased significantly and net debt was reduced from EUR 466 million to EUR 5 million as a result of strong cash flow and a more efficient business model. This enhances the attractiveness of Papyrus to customers and suppliers, and ensures the long-term development of the company.

SUPPLIES DIRECT - A NATIONWIDE CHAIN OF CASH & CARRIES Between 2011 and 2014 Papyrus Supplies acquired four cleaning companies in Sweden. In 2015, the four companies were renamed to Supplies Direct in order to form a nationwide chain of cash & carries for cleaning services.

PAPYRUS REINFORCES ITS POSITION IN CZECH REPUBLIC In November 2015, Papyrus finalised the acquisition of OSPAP, thus making Papyrus the leading paper merchant in the Czech Republic.

MAJOR COMPETITOR LAUNCHED A WIDESPREAD RETREAT FROM EUROPE One of Papyrus major competitors, PaperlinX, launched a wide-spread withdrawal from Europe following several loss-making years and insolvency proceedings.

Office paper, 22

Sales by product area, %

Graphical paper, 50

Cleaning, hygiene and packaging, 12

Paper specialities, 17

900

600

500

1,800

1,200

1,500

200

300

0

300

Net sales, EUR million

Sales per employee, EUR thousand

900

Net sales and sales per employee

EUR million

2,100

EUR thousands

700

800

400

600

2011 2013 20142012 2015

3.1%WORKING CAPITAL AS PERCENTAGE OF SALES

The year in review

The year in review

Key figures

EUR thousands 2015 2014 2013

Net sales 1,541,797 1,566,794 1,604,344

EBITDA excluding restructuring and divestments 48,351 57,013 50,014

EBITDA excluding restructuring and divestments, % 3.1 3.6 3.1

EBIT 34,012 36,988 22,984

Cash flow from operating activities 34,435 86,407 68,641

Number of employees at year-end 1,897 1,877 2,007

Deliveries, 1,000 tonnes 1,533 1,570 1,544

We are positioned for continued stable development regardless of market developments. This is due to a more flexible organisation with a higher proportion of variable costs and attractive offers.Peter Sandberg, CEO

2 Papyrus Annual Review 2015

This is Papyrus

Papyrus operates in two separate areas of business, Graphical and Business paper, accounting for 88 percent of sales, and Papyrus Supplies, representing 12 per-cent of sales.

Graphical and Business paper business areaPapyrus is a leading supplier of paper to the European graphical industry and a major distributor of office paper across Europe. The business area offers a broad range of coated and uncoated papers for the printing industry together with graph-ical board, substrates for digital printing machines and a comprehensive range of paper specialities with a corresponding range of matching envelopes. Papyrus is also a leading provider of office paper, covering all printout requirements and copying needs.

In 2015, Papyrus delivered 1.5 million tonnes of paper, ranking the company

A leading European merchant Papyrus is a leading European merchant in paper, facility management supplies and industrial packaging, with net sales of EUR 1,542 million in 2015 and some 1,900 employees. Papyrus supports more than 65,000 customers in 20 countries across Europe by providing products and services that enhance efficiency and contribute to a more successful business.

number two in Europe and number one in Continental Europe in terms of market position.

Papyrus Supplies business areaThe Papyrus Supplies business fulfils the increasing need for efficient supply chain management among more than 16,000 customers in the private sector and in the manufacturing and service industries in the Nordic countries. Papyrus Supplies offers an impressive assortment of clean-ing, hygiene and industrial packaging products delivered when and where they are needed.

Papyrus Supplies is the market leader in industrial packaging and facility manage-ment supplies in the Nordic countries with the capacity to serve international cus-tomers across borders in a consistent and well-coordinated manner.

THIS IS PAPYRUS

Comprehensive product rangeThe Papyrus product range is carefully selected. The company gathers an exten-sive collection of products from leading manufacturers and makes these products available from a single source. Customers benefit from a high level of reliability as well as time and cost savings thanks to leading services, efficient outsourcing solutions and high-precision deliveries from Papyrus.

Committed to quality and sustainabilityPapyrus offers the products and service level that best meet the customers’ needs in terms of function, quality and sustaina-bility considerations. The product range is constantly adjusted to ensure the best buying options for customers. In addition, Papyrus has strict environmental policies and criteria for selecting suppliers and products.

Industry

Denmark

Finland

Norway

Sweden

Belgium

France

Luxembourg

Netherlands

Denmark

Norway

Sweden

Estonia

Finland

Latvia

Lithuania

Czech Rep

Hungary

Italy

Poland

Romania

Slovakia

Austria

Germany

Switzerland

Graphical and Business paper Papyrus Supplies

Public Sector & Service

Western Cluster

Central Cluster

Industrial Packaging

Facility Supplies

Denmark

Finland

Latvia

Norway

Sweden

Switzerland

Denmark

Estonia

Finland

Latvia

Norway

Sweden

Croatia

Czech Rep

Hungary

Italy

Lithuania

Poland

Romania

Slovakia

Slovenia

Austria

Germany

Belgium

France

Luxembourg

Netherlands

Switzerland

Graphical and Business paper Papyrus Suppliers

Business Paper

Specialities Paper

Graphical Paper

Marketing & Supply Finance & IT

Sales Supply Chain


Management board

Central Cluster

Austria

Germany

Western Cluster

Belgium

France

Luxembourg

The Netherlands

Switzerland

Nordic and South Eastern Cluster

Denmark

Estonia

Finland

Latvia

Norway

Sweden

Croatia

Czech Rep.

Hungary

Italy

Lithuania

Poland

Romania

Slovakia

Slovenia

Graphical and Business paper

Human Resources Logistics


Steering Board

Papyrus SuppliesManagement Team

Denmark

Finland

Norway

Sweden

Denmark

Finland

Norway

Sweden

Papyrus Supplies

Industry Public Sector and Service

Marketing and Supply Finance

Nordic Cluster

South Eastern Cluster

A RELIABLE PARTNER FOR 65,000 CUSTOMERS

Papyrus operates in two separate business areas to ensure time and cost savings for customers, and the reliability on which their businesses depend.

Graphical and Business paper deals with specialist distribution of paper to the graphical industry.

Papyrus Supplies serves corpora-tions and public institutions with facility management supplies and industrial packaging products.


This is Papyrus

Key figures

EUR thousands 2015 2014 2013 2012 2011

Net sales 1,541,797 1,566,794 1,604,344 1,726,463 1,887,304

EBITDA excluding restructuring and divestments 48,351 57,013 50,014 48,246 48,434

EBITDA excluding restructuring and divestments, % 3.1 3.6 3.1 2.8 2.6

EBIT 34,012 36,988 22,984 21,241 16,893

Cash flow from operating activities 34,435 86,407 68,641 49,925 50,448

Average number of employees 1,863 1,925 2,113 2,372 2,591

Sales per employee 828 814 759 728 728

Deliveries, 1,000 tonnes 1,533 1,570 1,544 1,632 1,770

Capital structure

EUR thousands 2015 2014 2013 2012 2011

Balance sheet total 643,546 627,051 659,943 722,797 805,951

Equity 207,654 182,610 182,214 180,963 35,447

Net debt 5,969 28,084 144,240 202,439 392,924

Equity/asset ratio, % 32.3 29.1 27.6 25.0 4.4

To build and maintain the trust of customers, shareholders, employees and the general public, Papyrus maintains a one-company approach. This means that it operates according to the same values, code of conduct, sound business ethics and policies in all markets where the company is present.

Efficient logistics across EuropeLogistics is a core competency that ena-bles Papyrus to keep its promises to cus-tomers and ensure just-in-time deliveries. Papyrus has developed a fine-tuned dis-tribution network consisting of leading systems for logistics management, ware-housing and delivery. Papyrus can ensure the same service levels and product port-folio wherever customers are located thanks to 40 warehouses and cross-dock platforms strategically located across Europe. These systems are designed to work together in harmony with every order to ensure total control throughout the logistics flow.

Simplifying for customers through e-servicePapyrus e-Shop offers a 24/7/365 e-shop in 15 countries on a shared platform, provid-ing market coverage that represents more than 95 percent of sales. This ensures easy ordering and purchasing, as well as easy access to product information, stock levels, statistics, reports and docu-mentation of business transactions. In 2015, 27 percent of all orders were placed via an electronic channel.

With the Papyrus toolbox for Elec-tronic Data Interchange (EDI) and system-to-system solutions, the sys-tems of partner customers can be integrated with the Papyrus SAP IT platform to automatically transfer purchase orders, order acknowl-edgements, invoices and payments. Papyrus also offers integrated e-commerce solutions for many of the leading calculation software tools available to the printer community.

Strong financial position – ensuring long-term capabilityPapyrus has strengthened its financial position in recent years, ensuring its long-term capability to implement its strategies and reach its overall objectives.

Sourcing and procure-ment from leading manufacturers

Cost and time-saving solutions for customers

Fine-meshed service- oriented European distribution network

One-stop shop, application expertise and in-depth industry knowledge

Strategically located warehouses across Europe

The Papyrus value chain – saving costs and time for customers

LEADING POSITIONS IN BOTH BUSINESS AREAS

• Papyrus holds the number two position in Europe overall and the number one position in Continen-tal Europe in the graphical and office paper business.

• Papyrus Supplies is the market leader in the Nordic region in everyday products for cleaning, hygiene and industrial packaging.


Interview with CEO

What were the most important events in 2015?Most importantly, we continued to develop our offering and to provide our customers with increased value, fully in line with the long-term strategy we have pursued since 2011. This has contributed to increased trust from our customers. We have a good financial position, which means that we can be more confident going forward. This year’s acquisition of the Czech company OSPAP, which strengthened our position in Eastern Europe, is an example of this.

We can once again look back on a year where we did not simply parry a challeng-ing market, but rather helped to develop it through innovative solutions and deeper relationships with our customers and other business partners. This is something all of our employees should be proud of.

How would you describe Papyrus Group’s position?We are well on our way to becoming the industry leader, which is creating substan-tial value for our customers. An example of this is our e-commerce solutions, where we launched a new modernised e-shop this year. Our e-commerce continued to increase and accounted for close to 30 percent of all placed orders. We are con-vinced that the share of recurring business attributable to e-commerce will grow as a result of customer demand, freeing up time for more complex sales tasks for our sales force. We have also developed a system-to-system concept, which is help-ing to make our customers more efficient when it comes to simplified administra-tion, order procedures and inventory management. In this way, we are deepen-ing our cooperation with our customers, in line with our partner strategy. These efforts are producing good results in terms of customer satisfaction, which is continu-ing to rise according to this year’s survey.

Well positioned for the future

Despite continued harsh market conditions, Papyrus Group achieved higher customer satisfaction and strong cash flows, and further strengthened its financial position in 2015. Altogether, this created a solid platform for taking the next step towards becoming the industry leader.

Our development of the organisation is a central part of our efforts to stay ahead of the competition. We are working deter-minedly to develop our employees’ key competences and we regularly conduct leadership training for all managers.

Efficient logistics are another key area. In 2015, Papyrus Supplies established a new Scandinavian logistics centre in Sweden in order to achieve an efficient level of service and a more agile set-up. This contributed to temporary restructuring costs in 2015, but in the long term this strategy is expected to lead to increased flexibility, reduced risk and a greater focus on our core business.

On an overall level, our efforts have produced positive results, given the chal-lenging market. Today we are considera-bly more customer oriented and effective than just a few years ago. This is reflected in our stable cash flow, increased sales per employee and the fact that we are show healthy profitability despite the weak paper market.

You are basically debt-free. What difference does this make?Yes, we became more or less debt-free in 2015, which is an important milestone for us, and we did so in a truly harsh market climate. One should also keep in mind that during the same period we com-pleted a total transformation of the com-pany. I would go so far as to say that we have made one of the largest leaps – if not the largest – in the history of the company during the past five years.

The result of this transformation is a Group that is in good shape and finan-cially stable. This means that we are more resistant to continued market challenges and that we can focus entirely on taking proactive steps to become an even better partner to our customers and suppliers going forward. It also means that we have the platform to support Papyrus future development agenda.

What about the paper business?European paper consumption once again declined, but not with the same force as a few years ago. The decline was 2 percent for woodfree papers, which account for the greatest volume.

We should also remember that we have a well-balanced geographical coverage, which has been an advantage for us. North of the Alps, we are either the mar-ket leader or number two in most mar-kets. These are markets that have fared relatively well in recent years compared with the countries of southern Europe.

Demand for graphic paper and office paper is still declining in our markets. This downturn is primarily attributable to three interacting forces: the use of substitutes such as digital communication, weak GDP development and transfer of print jobs to low-cost countries. However, we believe this decline will level off in the not too distant future.

For paper specialties, an important area where we have significant scope to develop, we established a central ware-house in Germany. This warehouse will serve several markets and offer better accessibility and increased efficiency.

We also focused on increasing the share of Papyrus brands in our range. In fact, our own product brands account for the vast majority of our paper sales.

So paper volumes will stabilise?Yes, that is what we see ahead. The fall in paper demand will be less steep com-pared with what we have seen in the past years. The underlying reason for this is quite simple, actually: paper is unbeatable as a communication vehicle in many areas. For example, studies have shown that stu-dents who read texts in print score signifi-cantly better on reading comprehension tests than students who read the texts digitally. It simply boils down to the ques-tion of whether we want to learn more by

INTERVIEW WITH CEO, PETER SANDBERG


Interview with CEO

using paper, or less by using digital equip-ment. For me the answer is simple.

In many ways, print is the ideal market-ing medium: it is versatile and creative, and communicates messages in a persua-sive way. It is tactile and offers a ‘real world’ experience, which brings trust and increased engagement between consumer and brands. Print drives traffic and can be an effective means of bringing consumers to a physical or online store. Brand owners realise that combining print with other media is a highly effective force for any campaign or brand.

It’s not that I think we will see a signifi-cant volume shift from digital media to printed media, not in the years ahead and not even in the long run as there is a place for digital media with all of its advantages when it comes to mobility and speed. But I am convinced that the decline in paper volumes will level off and that we will therefore see greater stability in terms of volume.

What about the competition in the paper business?Many players have experienced difficulties in the harsh market environment we have seen in the past years. An example of this was PaperlinX, which is one of our major competitors. During 2015, they launched a widespread withdrawal from Europe fol-lowing several loss-making years and a number of insolvency proceedings. This opened up opportunities in the Nether-lands and Belgium for us, with organic growth in both countries.

In contrast, Papyrus is financially strong. We are effective in our business and have an attractive offering, which allows us to

be proactive in our efforts to grow profita-bly in the long term. This year’s strategic acquisition of the Czech company OSPAP is an example of this.

Is Papyrus Supplies developing according to plan?Yes, the business is performing very well. We have a system in place to grow organi-cally and through acquisitions from our already leading position in the Nordic region. We are unique when it comes to providing seamless service across the Nordic region, which is a strength we intend to utilise further.

In recent years, we have focused on allowing the organisation to concentrate on its business by optimising its offering, logistics and service levels according to the requirements of this specific business – which differ from those in the paper busi-ness in many critical areas. As an example, we established a new warehouse in Swe-den in 2015. During the year, we also launched a cash-and-carry concept in Swe-den’s top three regions that goes by the name Supplies Direct, with great success.

Going forward, we will put more emphasis on further developing the prod-uct range and continue to consolidate our leading position in the Nordic countries, in order to continue to grow profitably.

What will be the main challenges for the company going forward?We will continue to focus on areas with potential. We should remember that there are pockets of substantial profitable growth in the paper business and not at least in the segment for packaging and facility supplies. Our job is to find these

pockets and capitalise on the opportuni-ties within them, by continuously sharp-ening our offering to our customers as well as fine-tuning our operations. We also need to continue to address the prevailing market situation in the paper business. However, our track record so far indicates that we have come a long way when it comes to taking on these challenges.

What will be the focus in 2016?We are positioned for continued stable development regardless of market devel-opments. This is due to a more flexible organisation with a higher proportion of variable costs and attractive offers, which will allow us to manage future changes in the market with low risk and increased efficiency.

Thanks to the development of Papyrus over the past years, we now can take a more forward-looking approach in order to create even more value for our customers.

Peter Sandberg, President and CEO

… we have made one of the largest leaps – if not the largest – in the history of the company during the past five years. The result of this transfor-mation is a Group that is in good shape and financially stable.


Goals and strategies

The solid and proven strategic platform of Papyrus enables the company to help cus-tomers realise new opportunities in an increasingly competitive environment. Customers can rely on a stable, yet dynamic and innovative Pan-European company that has the capabilities and commitment to support their day-to-day activities and their business as a whole.

A clear vision Papyrus has a distinct vision: to be Europe’s leading paper, facility manage-ment supplies and industrial packaging merchant.

Strategic direction Papyrus is focused on the development of leading positions in major European markets – leveraging the scale and syn-ergy opportunities between markets – in areas such as sourcing and supplier rela-

Committed to remaining at the forefrontPapyrus is a major player in Europe and is continuing to improve its business system and develop high-value services. With a long history in all of the markets in which it operates, Papyrus has gained invaluable experience and understanding of what it means to be a modern service company. In many ways, Papyrus strategy is a response to customer demands in relation to supply chain cost efficiency, access to expertise and reliable availability of products.

tions, logistics, IT systems, administration and sales. The company’s size and market presence provide the necessary platform to achieve its overall goal.

The objective of Papyrus is to add value for stakeholders by continuously improv-ing the business system and transforming this into profitability. This objective will be achieved by:

GOALS AND STRATEGIES

• Customer focus – To deliver outstanding service wherever the company operates, providing solutions that make customers of Papyrus more competitive.

• Lean business system – Creating higher efficiency for customers and Papyrus through deployment of a lean business system and infrastructure combined with efficient coordination of interna-tional sourcing.

Long-term financial goals

GoalOutcome

2015Outcome

2014Outcome

2013Outcome

2012Outcome

2011

EBITDA, excl. restructuring and divestments/Sales, % >5% 3.1 3.6 3.1 2.8 2.6

Cash conversion rate* >100% 71 137 134 103 104

* Cash conversion rate defined as Cash flow from operating activities/EBITDA excl. restructuring.

The overall goal of Papyrus is to generate profitable growth based on high efficiency and strong customer relationships.


Goals and strategies

• Expansion and growth – Expanding the business in attractive markets and value-added segments.

• True profitability and financial perfor-mance – Improving the business system and transforming it into long-term value creation.

Customer focusPapyrus continues to improve its commit-ment to customers. Understanding cus-tomer needs, keeping promises and “going the extra mile” are fundamental in this respect. Papyrus aims to provide the best services and availability of products from leading suppliers. Outstanding competence in products, logistics and customer opera-tions are key factors in the development of solutions that help customers become more successful. Papyrus will be the pre-ferred choice of customers by providing better service, support, reliability and solu-tions that address their challenges.

Lean business systemPapyrus operates in a highly competitive market where paper consumption is in decline due to structural drivers. As a con-sequence, the Group must seize all oppor-tunities to streamline and maintain a lean and cost-efficient business system. By focusing on activities that add value, and through standardised processes that can be replicated throughout the organisa-tion, Papyrus aims to establish a competi-tive, agile and flexible European platform.

In simple terms, the system must ensure efficient cost-to-serve for commodity products and, without adding unneces-sary complexity, growth in value-added segments.

Papyrus strives to achieve the industry’s most cost-effective system to source, sup-ply and sell commodities, thereby unlock-ing substantial value. Supply chain excel-lence is a key element of this ambition, which includes optimal infrastructure, supplier cooperation and integrated planning.

Pan-European harmonisation of the assortment, an attractive range of own brands, streamlined cross-border logistics and comprehensive e-service solutions will also enable a leaner business system and optimised customer offering.

Expansion and growthPapyrus is dedicated to strengthening its position in attractive markets and expand-ing sales in value-added segments and growth markets. By focusing on expansion and aiming to achieve leading positions in markets in which Papyrus competes, the company has built a leading position in major European countries and segments.

Over the past number of years, growth activities at Papyrus have focused on fur-ther advancing the position of Papyrus Supplies as the leading Facility Manage-ment and Cleaning and Packaging whole-saler in the Nordic region.

True profitability and financial performanceThe overall goal of Papyrus is to generate profitable growth and leading profitability after capital charges through high pro-ductivity, investments in value-added sales, effective capital management, busi-ness development and strong customer relationships.

GROWTH THROUGH ACQUISITIONS 2004–2015

• OSPAP a.s., Czech Republic, 2015 (Graphical and Business paper)

• Städshopen i Stockholm AB, Sweden, 2014 (Papyrus Supplies)

• INPA AB, Sweden, 2013 (Papyrus Supplies)

• Siisti-Piste Oy, Finland, 2012 (Papyrus Supplies)

• Arto Emballage AS, Norway, 2012 (Papyrus Supplies)

• XL Graphics, Belgium, 2011 (Graphical and Business paper)

• Städgrossimporten AB, Sweden, 2011 (Papyrus Supplies)

• Städcentralen AB, Sweden, 2011 (Papyrus Supplies)

• Papeteries de France, France, 2005 (Graphical and Business paper)

• Schneidersöhne Group, 11 countries, the largest markets being Germany and Switzerland, 2005 (Graphical and Business paper)

• Scaldia, Netherlands, 2004 (Graphical and Business paper)

Vinjett


Natural Evolution Recy Frost 145 g/m2


NATURAL EVOLUTIONNatural Evolution is a range of woodfree, white to ivory-coloured, finest papers with a high bulk, great stiffness and high opacity for a tactile sensation. Natural Evolution is available in a matt and soft surface, and also as a partly recycled paper (30 percent FSC®-certified recycled fibres) with a natural matt and smooth surface. All papers in the range have both paper sides treated with a special matt coating that allows a high ink holdout for brilliant images with great detail and contrast.

Natural Evolution is part of Specials®, Papyrus assortment brand for carefully selected creative papers from leading Euro-pean manufacturers of finest papers.

Applications: Brochures, tags, folders, invitation and greeting cards, covers.

Vinjett


Natural Evolution Recy Frost 145 g/m2



Papyrus markets

The challenging economic climate in recent years has accelerated the speed at which new technologies are penetrating more traditional media channels as com-panies look for different ways to optimise their budgets. However, financially strong paper merchants that can continue to improve their own operation have the potential to grow with profitability – even in a structurally declining market such as the prevailing one.

European paper consumption back in declineOf all of the graphic grades, woodfree paper grades are the most popular in commercial print and office paper applica-tions. In 2015, more than 12 million tonnes of woodfree papers were con-sumed in Europe. After a surprisingly strong performance in 2014 for uncoated woodfree (UWF) papers, with a 1.0-per-cent increase in demand, European UWF consumption fell back into decline in 2015. According to statistics released by EURO-GRAPH*, demand for UWF paper declined by 1.2 percent. Coated woodfree (CWF) papers also faired relatively well in 2014, with a contraction in demand of only 1.4 percent. In 2015, consumption of CWF papers decreased by 2.1 percent, driven by lower circulation and advertising

Fine paper

Papyrus is a leading supplier of commercial printing paper to the graphical industry and a major distributor of office paper across Europe. The market for printed media has been facing a decline since its peak in 2007 due to the rise of new technologies, changes in media consumption and the economic situation in Europe. Against this background, Papyrus is adopting a focused and cost- competitive approach, resulting in long-term benefits for both Papyrus and its customers.

THE EUROPEAN MARKET FOR

revenues in magazines. Overall deliveries of woodfree papers to Europe declined by 1.6 percent in 2015.

During the year, the under pressure paper merchant PaperlinX, one of Papyrus major competitors, launched a wide-spread withdrawal from Europe following several loss-making years and a number of insolvency proceedings.

Climbing market prices for woodfree papers in 2015Operating rates for UWF papers in 2015 increased as a result of higher exports and a reduction in installed capacity. Similar to uncoated paper, operating rates for coated paper have been increasing stead-ily since 2013. Supported by the improved operating rates, paper prices for UWF paper ended up some 5 percent above the level of December 2014,with prices for office paper increasing more than for sheets. Market prices for CWF paper started to climb slowly during the second half of the year. However, the upward movement did not cover the reductions seen early in the year and compared with the end of 2014, CWF prices declined some 1 percent. Even if the supply and demand balance has improved, the issue of European overcapacity caused by falling demand has not been resolved.

Statistics of total woodfree paper shipments to Europe by EURO-GRAPH members

Tons, millions 2015 2014 2013 2012 2011

Coated woodfree papers (CWF) 5.3 5.4 5.5 5.9 6.1

Uncoated woodfree papers (UWF) 6.2 6.3 6.2 6.4 6.6

Total woodfree papers 11.5 11.7 11.7 12.2 12.7

* EURO-GRAPH is the European Association of Graphic Paper Producers and members are manufacturers of newsprint, magazine and fine paper grades in Europe

2015 MARKET DEVELOPMENTS IN BRIEF

• European demand for coated wood-free paper (CWF) declined by 2.1 percent, while uncoated woodfree paper (UWF) declined by 1.2 percent*

• The decline in woodfree paper ship-ments in 2015 was less severe than capacity adjustments and mill clo-sures, leading to consistently improv-ing operating rates

• Supported by improved operating rates and increased exports, the price of woodfree papers started to climb in 2015

• PaperlinX, one Papyrus major competitors, launched a widespread retreat from Europe following the collapse of the majority of its operations


Papyrus markets

Papyrus Supplies focuses on two major market segments: the facility manage-ment supplies segment and the industrial packaging segment. The packaging and facility supplies distribution market is frag-mented and highly competitive, with both regional and local competitors. Most com-petitors offer a wide range of products at prices comparable to those offered by Papyrus Supplies. However, few have ser-vice capabilities comparable to those of Papyrus Supplies. As markets are becom-ing more global, size matters and consoli-dation is expected to continue as a result of the pressure on prices and volumes and the need for economies of scale.

Facility management supplies segmentThe facility management supplies seg-ment consists of the sale and distribution of products essential for maintaining large facilities, such as hygiene paper, commer-cial cleaning chemicals, bags and sacks, skin care products, sanitary maintenance supplies, office paper and logistical ser-vices. The downstream markets driving growth in the facility management indus-try include janitorial and building services, education and healthcare. Increased enrolment in education and an aging population have led to increased demand for janitorial supplies in institutional environments.

FM supplies and packaging products

The Nordic business-to-business market for facility management supplies and industrial packaging consists of multiple product categories and niches. The demand for efficient supply solutions and outsourcing services from merchants yields long-term profitable growth opportunities. The distribution market is fragmented, leading to future opportunities for consolidation, thereby exploiting untapped efficiency potential.

THE NORDIC MARKET FOR

In this fragmented market, Papyrus Supplies competes with a large number of local and regional distributors as well as purchasing group affiliates. Papyrus Sup-plies holds a strong market position, con-ducting business with leading facility management companies and constituting the only merchant who can provide a truly pan-Nordic offering to its customers. The strong position in the segment also provides opportunities for cross-selling its products to packaging customers and lev-eraging its Nordic footprint to serve large customers. The segment normally shows steady levels of demand throughout a business cycle.

Industrial packaging segmentThe industrial packaging segment includes the design, sourcing, sale and distribution of customised packaging solu-tions and the sale and distribution of standard corrugated boxes, stretch film, tape and packaging equipment. The mer-chant-served share of the packaging mar-ket is low, thus providing market partici-pants able to bring high levels of value and service the opportunity to increase their share. The volume growth rate for the segment is estimated to be flat in the Nordic countries in 2015. Papyrus Supplies is one of the leading suppliers to the seg-ment and gained its market share thanks to its strong packaging supply concept and efficient logistical solutions.

2015 MARKET DEVELOPMENTS IN BRIEF

• Demand for corrugated boxes remained flat in Western Europe

• Consumption of tissue in Western Europe grew by 0.6 percent

• Rising demand for efficient total-cost solutions with a high level of service among major customers

• Purchasing decisions move upwards in large, complex organisations as indirect spending and total cost cal-culations become more important


Facts about Papyrus markets

Business Area Graphical and Business paper Papyrus Supplies

Market Fine paper Facility management supplies and industrial packaging products

Customers Commercial printers, Digital print shops, Board converters, Publishers, Screen & Sign printers, Packaging printers, Visual Comunication and LFP printers, In-plant print facilities, Resellers/Retail-ers, Industry, Service sector, Public sector

Public sector, Facility Management companies, Contract cleaners, Private healthcare, Manufac-turing industry, Transportation industry, Auto-motive industry, Wholesale traders, Resellers/Retailers

Products Coated Woodfree Paper (CWF sheets and reels)

Uncoated Woodfree Paper (UWF sheets and reels)

Coated wood-containing paper (CME sheets and reels)

Office paper

Recycled paper

Coloured paper

Wide format digital print

Signage and visual communication (Viscom) products

Graphical and packaging boards

Creative specialities incl. envelopes

Carbonless, self-adhesive sheets and synthetic substrates

Book paper

Facilities maintenance equipment and machines

Commercial cleaning chemicals

Bags and sacks

Towels, tissues, wipers and dispensers

Gloves and protection

Catering and food service items

Healthcare

Office paper

Custom and standard corrugated boxes

Stretchfilms and cushioning

Tape, wrap and strapping supplies

Packaging equipment

Wooden pallets

Competitors Antalis, Europapier, Igepa, Inapa, Niche paper manufacturers, Office Supplies Retailers (OSR), OEM

Antalis, Boxon, Maske, MultiLine, NorEngros, Nyblomgruppen, OneMed, Pamark, Procurator, Staples, Wittusen & Jensen

Papyrus geographical presence

20 countries across Europe Nordic countries – Denmark, Finland, Norway and Sweden

Market characteristics Mature market that has experienced decline in recent years due to the economic downturn and changing media consumption patterns.

Operational effectiveness combined with innovative and customer-oriented solutions from a focused portfolio of value-creating services and products yields competitive advantages and growth opportunities.

Market opportunity due to increasing customer demand for an efficient supply chain.

Business remains fragmented with many local and regional merchants.

Offers advantages for companies that can consolidate the business through efficient logis-tical solutions, effective procurement and econ-omies of scale with a customer-oriented approach.

Outlook The market is expected to continue to decline as a result of changing paper consumption patterns.

Growth opportunities within selected paper spe-ciality segments.

Opportunities for merchants that can deliver focused portfolios detailing easy-to-use solutions that lead to greater efficiency for their customers.

Financially strong paper merchants that can con-tinue to improve their operations have the poten-tial to grow profitably despite a market in decline.

The market is expected to continue to evolve and offer profitable growth for companies that can offer efficient and cost-saving supply solu-tions to customers.

Consolidation is expected to continue as a result of the pressure on prices and volumes and the need for economies of scale. The anticipated market consolidation offers opportunities for market leaders.

Papyrus markets

Papyrus Annual Review 2015 13 Papyrus Annual Review 2015 13

Papyrus markets

Vinjett


Graphical and business paper


Papyrus is a leading supplier to the print-ing industry and an ambassador of the role of paper in communication. The com-pany’s core offering comprises the sale and distribution of an extensive range of high-quality printing, writing and copying paper to commercial printers, publishers, direct mail firms and the digital printing industry, as well as retailers, resellers, copy centres, in-plant print facilities, public authorities and other paper-intensive businesses.

Papyrus also offers a broad range of spe-ciality papers, including a matching range of envelopes. In addition, Papyrus is a major European distributor of office paper and provides customers with a complete range of products covering all printout requirements and copying needs.

Papyrus supports its customers, enabling them to add value to their businesses through a dynamic, pan-European opera-tion providing graphical and office paper, technical know-how and services.

A focused and cost-competitive approachIn order to increase cost competitiveness Papyrus is continuously re-evaluating

A leading supplier in Europe With more than 50,000 customers and annual sales of EUR 1,359 million in 2015, Papyrus is a leading supplier of paper to the graphical industry and a major distributor of office paper in Europe.

working methods and business models. As a result of improved margin manage-ment and tightened credit policies, together with a more targeted market approach, Papyrus has moved away from unprofitable business and market seg-ments. The focused market approach, combined with a comparatively strong level of profitability and a stable financial position, yields several long-term benefits. It enables the company to continue to lev-erage economies of scale and invest in value-adding services for the benefit of customers. This creates higher creditabil-ity and attractiveness among suppliers, which also works in favour of Papyrus.

A broad range of value-adding productsPapyrus is gradually expanding its product range to include corrugated boxes, stretch film, hygiene paper and professional cleaning items for graphical and office paper customers. This offers value for cus-tomers, since they can rely on a compre-hensive range of products from one single source and can take full advantage of an efficient operational structure.

GRAPHICAL AND BUSINESS PAPER


A RANGE OF OWN HIGH-QUALITY BRANDS

Papyrus offers its own paper brands, which are among the best products in their categories and can be used for any graphical application.

Major Papyrus paper brands include Multi™, Luxo®, TripleStar®,Plano®, Sky®, DigiGold®, Balance®, Specials®, Rainbow®, Focus®, Opti®.

Considerable savings through Paper Management® Paper Management® is a service concept that is mainly offered to large printing houses due to the need to reach a certain scale in order to gain real benefits. The Paper Management® concept enables large printing houses to make considera-ble savings. Thanks to optimised pro-cesses, simplified administration and a streamlined, standardised product range, consumption of printing paper is reduced by up to 5 percent and costs are lowered.

Graphical paper


Coated Woodfree papers (CWF)

Uncoated Wood- free papers (UWF)

Coated Wood- Containing papers (CME)

Coloured papers

Recycled papers

Paper specialities Business paper

Creative specialities

Text and cover

Premium offset

Substrates for digital print

Coloured papers

Envelopes

Graphical and packaging board

Self-adhesives

Synthetic substrates

Carbonless

Book papers

Cards

Drawing papers

Uncoated office papers

Coated office papers

Coloured office papers

Recycled office paper


PAPYRUS E-SHOP MODERNISED AND LAUNCHED ACROSS EUROPE

In 2015, Papyrus launched the next generation of its Papyrus e-Shop across Europe. The new e-shop pro-vides customers with a state-of-the-art e-shop experience. Thanks to these modernised e-business capabili-ties, including both the e-shop and the system-to-system solution for printers, Papyrus is well equipped to respond to the growing demand for efficient purchasing procedures and simplified administration.

This means that customers can minimise the need for their own warehouse space while reducing costs for personnel and premises, and capital that is tied up in stock can be used to leverage other busi-ness opportunities.

Inspiring the creative communityBrand owners, marketing professionals and graphic designers always look for inspiring and expressive solutions to enhance the impact of communication. In order to meet this demand, Papyrus offers professional paper consultancy services to advertising agencies and marketing departments so they can select the opti-mal paper for their print projects accord-ing to the principle “a special creation deserves a special paper”. It was on this basis that the Papyrus Specials® brand was born. It consists of a carefully selected range of exclusive text and cover papers from the leading producers of finest papers in Europe.

Top tier Papyrus-branded products Papyrus-branded paper products are among the best in their categories. They are carefully chosen for their exceptional and stable properties, and are continu-

ously tested and evaluated. These quality products are available in a wide range of surface finishes, shades, textures, sub-stances and sheet sizes. With Papyrus-branded products, customers also get the highest level of product availability. In 2015, the share of Papyrus own brands continued to develop positively, support-ing the Pan-European harmonisation of the range and streamlined cross-border logistics.

Customer satisfaction continues to increasePapyrus conducts customer surveys on a regular basis in order to provide input for long term strategic decisions and actions. In the short term, they offer insight into the hands-on improvements that can be made to daily processes. The surveys also enable bench marking between companies and facilitate the sharing of best practice. In 2015, the comparable overall customer satisfaction rating for the Group increased from 85 to 86 percent.

Papyrus reinforces its position in Czech RepublicExpanding and reinforcing sales in attrac-tive markets and value-added segments is


Papyrus supports its customers, enabling them to add value to their businesses through a dynamic, pan-European operation providing graphical and office paper, technical know-how and services.

part of Papyrus strategy. In November 2015, Papyrus finalised the acquisition of OSPAP, thus making it the leading paper merchant in the Czech Republic. The core offering of OSPAP is graphical paper, but the company is also a leader in the areas of packaging products and visual commu-nication. The acquisition provides an excellent platform for further expansion of the business in the region.


Graphical and Business paper – an overview

Product areas Graphical paper Business paper

Key customer groups Commercial printers

Digital print shops

Publishers

Screen & Sign printers

Packaging printers

Visual Communication and LFP printers

Board converters

In-plant print facilities

Advertising agencies

Industry

Service companies

Public sector

Resellers

Retailers

Small/Home offices (SoHo)

In-plant print facilities

Key products Coated Woodfree Paper(CWF sheets and reels)

Uncoated Woodfree Paper (UWF sheets and reels)

Coated wood-containing paper (CME sheets and reels)

Coloured paper

Recycled paper

Creative specialities and Text & Cover

Premium offset

Substrates for digital print

Envelopes

Graphical and packaging boards

Carbonless, self-adhesive sheets and synthetic substrates

Book paper

Cards

Drawing papers

Uncoated office paper

Coated office paper

Coloured office paper

Recycled office paper

Share of Papyrus total net sales, %

66 22

Key competitors Antalis

Europapier

Igepa

Inapa

Niche paper manufacturers

Antalis

Europapier

Igepa

Inapa

Office Supplies Retail (OSR)

OEM

Papyrus position and competitive advantages within the product area

Leading market position in Continental Europe

Efficient logistical solutions and supporting services

High product availability of an attractive and wide range of products

Papyrus own brands available in 20 countries

Strong supplier portfolio

Environmental responsibility

Paper consultancy and training seminars

Technical support

Papyrus e-Shop and system-to-system e-commerce capabilities

Market leader in Western Continental Europe

Supporting services

Retail concepts

Papyrus own brands available in 20 countries

Environmental responsibility

Papyrus e-Shop and system-to-system e-commerce capabilities



Papyrus Supplies

Papyrus Supplies

In the Nordic countries, Papyrus Supplies accounts for more than 50 percent of the total sales of Papyrus Group, and the busi-ness area has full geographic coverage in this region. In recent years, Papyrus com-pleted six strategic acquisitions to further enhance its offering and is one of few companies with a Pan-Nordic offering.

Business in briefPapyrus Supplies supports the manufac-turing industry, service companies and the public sector by supplying items ranging from cleaning materials, hygiene paper and catering products to industrial pack-aging and copy paper.

There is a growing demand among cus-tomers for improved operational cost effi-ciency, streamlined administration and development of efficient sourcing pro-cesses as a result of tighter budgets and a

Market leader in the Nordic countries Papyrus Supplies is one of the largest suppliers of cleaning, hygiene and industrial packaging products in the Nordic countries. With annual sales of EUR 183 million in 2015 and some 240 dedicated employees, Papyrus Supplies supports more than 16,000 customers in the region.

need to focus on core business. This is where Papyrus Supplies can contribute through its services and products. Conse-quently, Papyrus has been expanding Papyrus Supplies in Sweden, Denmark, Norway and Finland over the past number of years, with the aim of facilitating fur-ther growth and development in selected markets.

Supported by the geographical reach of the Group’s paper business, the Papyrus Supplies business area is attracting major international customers looking for cross-border solutions and also has a growing business outside the Nordic countries.

A well-balanced mix of services and productsTo support customers in the manufactur-ing industry, Papyrus Supplies provides products and services including design,

PAPYRUS SUPPLIES

Industry

Papyrus Supplies

Manufacturing

Automotive

Transportation

Wholesale traders

Service companies Public sector

National and regional governments

Public authorities

Municipalities

Recycling and sanitation

Public healthcare

Facility Manage-ment companies

Contract cleaners

Major service sectors

Private healthcare

Industry

Papyrus Supplies

Manufacturing industry

Automotive

Warehouse and transport

Pharmaceutical

Furniture

Process industry

Service companies Public sector

National and regional governments

Recycling and sanitation

Public healthcare

Offices

Facility Manage-ment companies

Contract cleaners

Private healthcare


WE LOVE MONDAYS!

The business concept of Papyrus Supplies is designed to support customers’ everyday operations, enabling them to focus on their core business. To achieve this, Papyrus Supplies offers a broad range of distribution services and products from one single source – saving time, reducing costs and ensuring smooth day-to-day opera-tions for small, medium-sized and large companies. The working week begins on a Monday and the con-cept “We love Mondays” aims to support the message that Papyrus Supplies makes customers’ work-days easier.

IT STARTED IN THE 1980s

The story of Papyrus Supplies started back in the 1980s. The jour-ney from a group of small wholesal-ers in the paper industry to becom-ing the company it is today reflects the corporate culture of Papyrus, fostering various forms of entrepre-neurship and expertise.

A new business area grew over time, eventually becoming a lead-ing wholesaler in the Nordic region of packaging products, hygiene articles and cleaning products.

The business area has been known as Papyrus Supplies since March 2011 to provide a clearer identity and better reflect the focus of the business in the market. In 2013, a new page was written in the history of Papyrus Supplies when the company became a sepa-rate legal entity, creating the right foundations to keep developing the businesses based on current market opportunities. The journey contin-ues and in 2015 the acquired cash & carry specialists were renamed to Supplies Direct and a nationwide chain of cash & caries for cleaning services was formed in Sweden.

Papyrus Supplies

sourcing, sale and distribution of custom-ised packaging and packaging equipment and the sale and distribution of custom and standard corrugated boxes. Solutions for these customers are usually tailored in terms of product selection, e-business support, workflow and logistics, providing customers with the tools to run a more efficient packing operation and save time, cost, capital tie-up and space.

The facility management supplies prod-uct range for the Service Companies and Public Sector segments consists of profes-sional cleaning systems, floorcare items, tissue and dispensers, skin care products and a wide range of catering products. The range also includes all products that would typically be found on a cleaning trolley, such as commercial cleaning chemicals, wipers, soap, trash bags and disposable gloves. With a full service plat-form and consultative approach, Papyrus Supplies is serving both major national accounts and regional customers as well as customers in the public sector.

E-business providing greater efficiencyE-service is an integrated part of the busi-ness. In fact, 60 percent of all orders in 2015 were e-orders, which is a clear con-firmation of the value of the e-business capabilities of Papyrus Supplies. Since its beginnings back in 1985 as the first e-business company in the industry, Papyrus has been raising the standard of its e-solutions. The company’s offering includes localised e-shops, customised portals and advanced Electronic Data Interchange (EDI) solutions, thereby help-ing customers to reduce costs in their pur-chasing processes and minimise the cost per transaction. During the year, Papyrus Supplies launched a new website with a state-of-the art e-shop experience that supports customer interaction in a more relevant way.

Papyrus segments and offeringsPapyrus Supplies focuses on two major market segments: the segment of facility management supplies and the industrial packaging segment. Papyrus Supplies offers value-adding solutions to service companies, the public sector and indus-trial companies within these segments.

Offering to service companiesFacility Management companies and con-tract cleaners account for the majority of demand in this customer segment. There

is a growing trend toward consolidation in this customer segment, which is one of the most growth-oriented areas for Papyrus Supplies.

While the sales offering is based on competence and a high level of service, the efficient logistical solutions of Papyrus Supplies also plays a key role. Large Facil-ity Management companies handle thou-sands of contracts on a daily basis, which often leads to complex supply chains for cleaning materials. Working with Papyrus Supplies enables these companies to focus on their core business. Waste in terms of cost and time is minimised thanks to prod-ucts specifically adapted to customers’ cleaning methods – and even specifically tailored to each cleaning object. As an example, administration costs can be cut to a minimum using predefined delivery plans available through customised e-por-tals. Papyrus Supplies has a well-function-ing concept that is highly valued by many leading Facility Management companies and an ability to conduct large-scale con-tract mobilisations when needed.

The cash & carry service is a core area in efforts to further strengthen the busi-ness area’s unique position among Facility Management companies and contract cleaners. Through a series of strategic acquisitions carried out in recent years, Papyrus Supplies has laid the foundation for a value-creating cash & carry concept. Cash & carry services will not only enhance the growth potential of Papyrus Supplies among small and medium-sized contract cleaners, they will also serve as valuable support for larger Facility Management companies with more complex customer structures and distribution needs.

By combining the strength of the core offering from Papyrus Supplies – with time and cost-saving solutions supported by e-commerce capabilities, rapid contract mobilisation and key account manage-ment with the certified cleaning compe-tence and training offered by the incorpo-rated cash & carry centres – bigger contract cleaners and Facility Manage-ment companies can truly benefit from an industry unique concept.

Offering to public sector organisationsKey customers in the public sector are public authorities, municipalities, county councils, the sanitation industry and pri-vate geriatric care, all of which are show-ing long-term stable growth in demand. The position of Papyrus Supplies varies in each market depending on the conditions

in each country. In Sweden, Papyrus Sup-plies is one of the leading companies, with considerable sales of hygiene paper, bags and sacks, cleaning products and office paper.

Municipalities work extensively with their environmental objectives and its translation into local environmental plans and policies. Papyrus Supplies selection of “green” bags and sacks made from bio-based polyethylene is a response to the increasing need for environmentally friendly alternatives. The switching of approximately 1,9 million fossil based plastics bags to bio-based bags by the Halland Region in Sweden serves as a good example of how the product range is constantly developed to attract new business.

Offering to industrial companiesPapyrus Supplies offers highly competitive and customised concepts to large indus-trial corporations, whereby all or parts of the purchasing service can be outsourced to Papyrus Supplies. By standardising and introducing innovative packaging solu-


Papyrus Supplies

Between 2011 and 2014, Papyrus Supplies acquired four cash & carry specialists situated in Sweden’s top three regions in terms of size and pace of growth: Stockholm, Gothenburg and Malmö. Through these acquisitions, Papyrus Supplies further strength-ened its distribution concept in the three major cities by adding cash & carry services to the pallet. In 2015, the four companies were renamed to Supplies Direct in order to form a nationwide chain of cash & carries for cleaning services. A coherent brand

identity will allow the cash & carry companies to communicate how their customers can access products, cleaning expertise, field support and training courses more effectively.

In recent years, Papyrus Supplies has expanded its reach in the Nordic region through acquisitions in Norway and Finland. This has resulted in Papyrus Supplies being one of a small number of companies with the capacity to serve international customers across borders in a consistent and well-coordinated manner.

To extend the offering to the Nordic manufacturing industry segment, Papyrus acquired the Norwegian packaging supplier Arto Emballasje AS at the beginning of 2012. Arto Emballasje AS was founded in 1982 and specialises in industrial packaging and offers an extensive range of high-quality products. The company

is situated in Oslo and is well known for its strong presence in the region.

The Finnish company Siisti-Piste Oy was acquired later in the same year. The company, which serves the public sector, clean-ing companies and businesses by offering direct deliveries and cash & carry services, has a strong local presence in southern Finland. Today, the company is fully integrated and operates under the name Papyrus Supplies in Finland. Through the acqui-sition, Papyrus Supplies has achieved the number one position in the Finnish market segment for cleaning and hygiene supplies.

Supplies Direct – a nationwide chain of cash & carries for cleaning services

ONE OF A SELECT FEW OFFERING PAN-NORDIC SERVICES


Papyrus Supplies

tions, Papyrus Supplies creates optimised purchasing procedures that lead to a higher level of cost efficiency. The flow of packaging materials to different produc-tion units is efficiently handled thanks to a customised e-portal used as a basis. The result is a supply concept that cuts costs on a daily basis in areas such as the auto-motive industry. In addition, Papyrus Supplies has expanded its support to large international customers by deliver-ing packaging material across Europe.

Industrial customers are primarily large and medium-sized companies active in the manufacturing, transportation, ware-housing and automotive industries. To meet customer needs, bespoke solutions are often necessary.

The segment is competitive and perfor-mance is directly linked to the trend in industrial production. Despite the sensitiv-

ity to changes in the global economy, the packaging segment is rewarding for com-panies such as Papyrus Supplies. The share of the packaging market shared by distrib-utors is low, which means that a market participant able to offer high levels of value and service, along with access to many manufacturers, has the opportunity to increase its share. Papyrus works along-side industry customers to identify key areas where extra value can be created in order to support objectives and provide customers with the means to run a more efficient packing operation.


In recent years, Papyrus Supplies has expanded its reach in the Nordic region.

50%PAPYRUS SUPPLIES

ACCOUNTS FOR MORE THAN 50 PERCENT OF TOTAL

PAPYRUS GROUP SALES IN THE NORDIC COUNTRIES

Papyrus Supplies

Papyrus Supplies – an overview

Customer group Industry Service companies Public sector

Customer facts Customers in the manufactur-ing, automotive, wholesale traders and transportation industries are primarily large and medium-sized companies located in the Nordic countries. Papyrus Supplies serves more than 2,900 companies – making it the market leader in the “Industry” segment.

Facility Management compa-nies and contract cleaners account for the majority of demand in this customer segment, which also includes financial service companies and other major service sectors.

The key customers in the Public sector are public authorities, municipalities, national and regional governments and pub-lic health care – all of which are demonstrating long-term stable growth in demand.

Key products Custom and standard corrugated boxes

Mailers

Stretch films

Wrap and strapping supplies

Tape and sealing

Cushioning

Wooden pallets

Bags and plastics

Packaging equipment

Towels, tissues, wipers and

dispensers



Disinfectants

Mops and cloths

Bags and sacks




dispensers

Skin care products

Office paper



Disinfectants

Mops and cloths

Bags and sacks




dispensers

Skin care products

Office paper

Key competitors Antalis

Boxon

Maske

NorEngros

Nyblomsgruppen

Wittusen & Jensen

MultiLine

NorEngros

Nyblomsgruppen

Pamark

Procurator

Staples

MultiLine

NorEngros

OneMed

Pamark

Procurator

Staples

Papyrus competitive advantages in the customer area

Optimised product range

Packaging expertise

Leading logistics and

outsourcing solutions

European warehouse and distribution infrastructure

e-Shop and S2S e-commerce capabilities

Key Account Management

Certified cleaning competence

Unique supply concept for contract cleaners and Facility Management companies

Full coverage in the Nordic countries

Rapid and large-scale contract mobilisations


Private label programme

Key Account Management

Unique tender capability

Product know-how and consultancy

Environmentally responsible logistic solutions



Gmund 925 Light Silver 145 g/m2


GMUND 925Gmund 925 is a woodfree, coloured paper speciality, with a brushed, irides-cent surface for a metallic shimmering appearance. The shiny appearance of the surface is achieved by the addition of pure silver particles. Gmund 925 is mass-dyed and available in different silver shades. The range is completed with an assortment of matching envelopes.

Gmund 925 is part of Specials®, Papyrus assortment brand for carefully selected creative papers from leading European manufacturers of finest papers. Applications: Brochures, tags, folders, invitation and greeting cards, covers.

VinjettGmund 925 Light Silver 145 g/m2



Mission and core values

A partner to rely onReliability is the overall brand promise at Papyrus and thus the company’s single most important commitment to its customers. The company’s mission is to deliver value to its customers by providing efficient and reliable solutions for the supply of paper, facility management supplies and packaging products. Papyrus achieves this by offering an attractive product assortment, value-added services and superior logistics solutions.

MISSION AND CORE VALUES

THE CORE VALUES OF PAPYRUS

The core values of Papyrus form the basis of its operations, the manner in which employees interact with customers and each other, and the selection of strategies the company employs to fulfil its mission.

TRUSTWORTHYProving reliability by delivering on promises. Customers should trust Papyrus and feel confident every time they do business with the company.

FRIENDLYHaving respect for individuals, promoting cooperation and giving credit for achievements. This friendly approach is built on a positive attitude, an open mind, a smile and a can-do attitude.

PROFESSIONALA commitment to continuous improvements, generating financial results, being cost-conscious and following through on plans and decisions. Demonstrating a mind for business and the ability to go from one-offs to repeat business.

RESPONSIVEAn eagerness to listen and respond quickly, based on a commit-ment to serve customers in the best way possible. Identifying needs and recommending solutions.

INSPIRINGContinuously innovating the offering to lead developments in the industry and encourage customers and colleagues to try new solutions and technologies.


Papyrus employees

Papyrus has some 1,900 employees from a wide variety of professions. Their assign-ments range from purchasing to customer service, and they are supported by an effective IT and supply chain system. All of this takes place in an international arena, as Papyrus is represented in 20 countries across Europe.

Together, the employees serve more than 65,000 customers each year. Effec-tive cooperation between the different entities is required to successfully carry

A structured approach to people developmentPapyrus wants to be an attractive employer that offers a nurturing environment in which employees enjoy working together to create success in business. Development is a top priority at an individual and organisational level and improves the company’s ability to recruit, foster and retain the required competence. This has a positive influence on Papyrus ability to create long-term value for its customers and strengthens its position as the profitable market leader.

PAPYRUS EMPLOYEES

out this task. At the same time, the experi-ence gained by serving thousands of cus-tomers leads to the accumulation of com-petitive strength.

Competence as a key to successAs the business expands internationally, there is a growing need to have the right individuals and expertise. Papyrus there-fore strives to ensure that the company can recruit and retain the right people. Succession planning is systematically

carried out to ensure that the company has the right competencies.

An important component in creating successful leadership is offering employees competence development in their particu-lar areas. Papyrus places great emphasis on creating a workplace that encourages further development and independent pursuit of initiatives, while clearly staking out the goals and paths to be followed to achieve them.


Career opportunities are systematically created at Papyrus, enabling employees to test other positions in the Group. This results in a more dynamic organisation and good opportunities for individual development, which clearly represents a benefit for Papyrus and its customers.

Leaders play an important rolePapyrus continuously evaluates the need for structural support in the area of human resources. Leaders at Papyrus play an important role in the success of the company.

With the leadership@papyrus initiative launched in 2014, the company is target-ing all of its leaders. The training pro-gramme, which spans over two years, aims to inspire good leadership practices, thus also supporting the transformation of Papyrus in terms of its line of business. The programme covers important topics such as communication, empowerment, goal-based leadership and individual development. It also offers an opportunity for leaders to network, learn practical tools and share best practice.

In spring 2015, Papyrus successfully finalised the first round of the Papyrus Leadership Programme Top. The pro-gramme, which spans over nine months, aims to develop the next generation of top leaders by networking and fostering business skills in cooperation with an external learning partner. The leadership training programme will continue with new candidates in 2016.

In 2015, the Group launched the Papy-rus Development Programme (PDP), where a selected number of specialists will be given the opportunity to further develop their skills in areas such as project management, sales transformation, finan-cial acumen and personal development. The ambition of the PDP is to continue to develop, engage and further energise high-performing experts who can influ-ence organisational performance. A sec-ond round started at the end of 2015 and the initiative is continuing in 2016.

Papyrus employees

Papyrus places great emphasis on creating a workplace that encourages further development and independent pursuit of initiatives, while clearly staking out the goals and paths to be followed to achieve them.

Empowering the people of PapyrusProviding people with the right skills and instilling the right attitude are essential aspects of achieving business objectives. The appraisal discussion is one of many important tools to promote the desired development on an individual level and for the team as a whole. Papyrus deploys a Group-wide appraisal discussion process called the Papyrus Performance Manage-ment Process (PPMp). It is based on inter-nal and external best practices that sup-port the creation of a winning structure by enabling employees to achieve their full potential and recognising their achievements. An intranet-based Employee Performance Portal (EPP) has been established to track development, simplify documentation and facilitate the PPMp dialogue. The process, along with its accompanying tools, is implemented in all parts of the organisation. More than 97 per-cent of employees completed an appraisal discussion with their manager in 2015.

Online training – a new way of learningThe Papyrus organisation is characterised by the desire to learn while carrying out everyday tasks. The company believes that it is important to identify the key lessons learned in different teams and to share these with other parts of the business. To expand the learning journey and offer input from multiple sources, Papyrus offers a Learning Management System (LMS) available on demand 24/7. The LMS is integrated with the existing Employee Performance Portal (EPP) and hosts e-learning courses. The purpose of the LMS is to serve as a critical tool to help close the gap in terms of behavioural and technical competencies among individual employees, in line with the appraisal dis-cussion and the associated development plans and guidance on how to improve performance. During the course of 2015, new online training modules were deployed covering topics such as products, competition law, managers as communicators and the value of print.

Well-informed organisation Papyrus has also invested resources in improving internal communication across the Group, and during 2015 an employee magazine called Papyrus INFO was launched. The magazine shares best prac-tice and success stories across the Group and provides useful insights from the industry. To support the publication, an e-learning on the topic “value in print” was developed to inspire and enable employees to act as ambassadors for Papyrus, the industry and its products. Over 85 percent or close to 1,000 of the invited participants have successfully completed the e-learning.

Strength through diversityPapyrus requires diversity in terms of fac-tors such as age, gender, language and background, as variation contributes to new ideas, smarter ways of working and a higher level of flexibility when it comes to adapting to new needs and demands from customers.

Papyrus emphasises the issue of gender equality so that both current and future managers at Papyrus can work towards a more even gender distribution by achieving a better balance in the recruit-ment process.

The share of female employees in the Group was 33 percent in 2015.

97%MORE THAN 97 PERCENT

OF EMPLOYEES COMPLETED AN APPRAISAL

DISCUSSION IN 2015


Papyrus employees

We are a team-oriented companyVOICES FROM THE ORGANISATION

My job as Group Marketing Coordinator involves coordinating all product related marketing initiatives for the Papyrus paper brands. This means having daily contact with my marketing colleagues across Europe and being in constant contact with external partners, such as agencies and printers. What I enjoy most about my job at Papyrus is that no two days are the same. Each day is different and brings new chal-lenges. I also enjoy the opportunities to be involved in cross-functional projects and to team up with other departments across the Papyrus Group.

I joined Papyrus as a student of the Baden-Wuerttemberg Cooperative State University (DHBW) back in 2007, where I

You don’t have to worry about getting stuck in your comfort zone.

benefitted from the perfect combination of theory and practice. I have always had the opportunity from the very beginning to develop myself through both career moves and structural development pro-grams such as the Sales Drive Academy and Papyrus Development Program. After my studies I joined the German operation as a marketing assistant, and after a few years I got the opportunity to work on a European level by joining the Group Mar-keting & Supply team where I have held different positions. Working at Papyrus you are faced with new challenges and opportunities – you don’t have to worry about getting stuck in your comfort zone.

ASTRID BECKER Group M&S, Marketing Coordinator

A sound work environmentPapyrus aim is to create a physically, mentally and socially sound and reward-ing workplace for all employees. This is important as the work environment is a strategic issue for Papyrus.

Preventive measures are taken to elimi-nate the risk of occupational injury and work-related ill health. In 2015, the num-ber of hours lost due to accidents at the

workplace declined by 4 percentage points to 8.1 hours per one million work-ing hours. Continuous training is con-ducted to prevent accidents at the work-place. Total sickness absence at Papyrus was 4.0 percent compared with 3.6 per-cent in the preceding year.

An occupational health and safety report is compiled twice a year and pre-sented to the Senior Executive Team for

review and a decision on operational improvements. Countries experiencing above-average levels of sickness absence or workplace accidents compared with country benchmarks are requested to pre-pare actions plans to address the underly-ing reasons for the unfavourable figures.

I would describe the Papyrus culture as open and friendly. You can contact any-one in the organisation for support and advice regardless of their position. We are a team-orientated company and eager to support each other in order to make the company as successful as it can be. We are keen to find solutions that suit every-one and are open to improvements and new ideas. Success and good perfor-mance are acknowledged by rewards and encouragement from management and your colleagues.


Papyrus employees

As Head of Transport Planning, I lead a team of three dispatchers and some 20 truck drivers. My dispatch team is responsible for the daily route planning of the shipments to customers and, together with the truck drivers, we ensure that the goods arrive on time while minimising the environmental impact. I am pleased with what we accomplish in our department and the way our drivers provide outstanding service to our customers on a daily basis.

I really value the day-to-day business being so diverse and inter-esting as it gives me an opportunity to grow and develop. I also like the team spirit, which is noticeable in all departments, and the way we interact with each other. No matter what position you are work-ing in, we always treat each other respectfully, openly and person-ally. Add to that a transparent and supportive management style, and you have what I think characterises the strong Papyrus culture. I have always felt valued at Papyrus and I am proud to be part of this company.

KILIAN RAMSEIER Head of Transport Planning in Papyrus Switzerland

PETR HAVLICEK Sales Director, Czech Republic

My job as Sales Director is to provide the right founda-tions for my sales team to meet customers’ requirements and expectations, and to do good business for Papyrus. Much of this is a question of leading, motivating and engaging the sales staff, while continuously improving our ability to create the right conditions to offer products and services. As a team, we have daily contact with our customers and our goal is always to develop a strong partnership with our clients.

We have a great team in the Czech Republic and cus-tomers who visit us frequently comment on the team spirit in our organisation. People work across depart-ments in a cooperative way and always in a result-ori-ented manner. What I especially like about Papyrus is the open atmosphere and the trust that management puts in the staff. Also the way the company combines structured workflows and processes with room for creativity within defined limits. The company supports employees who show extra effort, and anyone wanting to take on new responsibilities can do so. If you are motivated by new business possibilities and want to grow professionally, you could hardly find a better employer. I especially like the open

atmosphere and the trust that management puts in the staff.

We always treat each other respectfully.


Papyrus customers continue to require cost-effective services that meet their end-users’ needs. When defining their procure-ment policies and make purchasing deci-sions, they also take into consideration the sustainability performance of suppliers and their supply chains. This is an aspect Papy-rus takes seriously and views positively.

Papyrus prioritises increasing sustaina-bility in the value chain, of which the company is a part, and strives to report sustainability performance transparently in line with recognised and credible sys-tems, so that customers and other stake-

A fundamental part of the businessResponsibility and good corporate citizenship are fundamental to the sustainability of Papyrus business and its ability to create long-term value for stakeholders. With regard to sustainability, Papyrus takes a systematic approach at every stage of its operations, from purchasing to sales and delivery.

holders are clear about what the company wants to accomplish.

Papyrus sustainability agendaPapyrus uses sustainability as an umbrella term to describe responsible business operations that encompass economic, environmental and social responsibility. By meeting the expectations of customers and stakeholders, Papyrus shall be known for its responsibility in the field of sustain-ability. Based on a materiality analysis, which is an assessment of the most signifi-cant sustainability issues for the company

SUSTAINABILITY

Sustainability

and its stakeholders, Papyrus has identi-fied five sustainability ambition areas.• Customers – Promoting sustainable

products and services• People – Having engaged employees in

safe workplaces• Sourcing – Safeguarding sustainability

in the supplier chain • Operation – Securing a more environ-

mentally friendly operation• Business conduct – Doing business with

high ethical standards


Sustainability

Customers – Promoting products and servicesPapyrus is represented in 20 European countries and supports more than 65,000 customers. The aim is to offer the products and services that customers require in terms of function, quality and sustainability-related considerations. In its on going dia-logue with customers, Papyrus provides transparent and objective information about the company’s offering to help cus-tomers make well-informed purchase deci-sions in all areas, including those con-nected to sustainability.

Care for the environment has increas-ingly become a very important product feature in many industries, not least in paper manufacturing and paper mer-chanting. Over the years, a number of cer-tificates and labels have been created to represent different aspects of environmen-tally and socially responsible manufactur-ing. The environmental labels used in the paper industry are trustworthy and offer clear guidance. Papyrus recognises that established standards contribute signifi-cantly to protecting the environment and the sustainable use of our natural resources. Registered Papyrus e-shop customers can on-line take advantage of product infor-mation and environmental labelling of products, as well as access to detailed environmental purchasing statistics.

People – Having engaged employees in safe workplacesThe work environment is a strategic issue for Papyrus. The aim is to create a physi-cally, mentally and socially sound and rewarding workplace for all employees. Preventive measures are taken to eliminate the risk of occupational injury and work-related ill health. Continuous training is conducted to prevent accidents at the workplace. Discrimination or harassment of any employee is neither permitted nor tolerated, and diversity is recognised as a strength.

As a company, Papyrus aims to be a responsible member of the communities in which it operates through focused part-nerships at local and national levels. All of the Group’s employees are encouraged to participate in local community work and raise funds for local charities of their choice. Where appropriate, Papyrus sup-ports charitable organisations by donating obsolete stock free of charge.

Sourcing – Safeguarding sustain-ability in the supplier chainPapyrus is committed to offering its cus-tomers socially and environmentally sound products. Environmental performance and

social responsibility thus represent key fac-tors for Papyrus in the selection of prod-ucts and suppliers. Accordingly, Papyrus never engages in spot buying of paper from unaudited suppliers or unknown origins. For potential suppliers, the com-pany has strict intake procedures in which environmental performance and social responsibility are part of the assessment.

Business partners and suppliers are required to share the principles expressed in Papyrus Code of Conduct. Papyrus is committed to the ten principles of the UN Global Compact, whose universally accepted principles highlight respect for human and labour rights, environmental responsibility and anti-corruption and also form the basis of Papyrus Code of Conduct.

In 2003, Papyrus was the first European merchant to receive FSC certification. Today, all Papyrus companies have chain-of-custody certification, which enables the Group to guarantee the origin of the raw material of the paper product. By the end of 2014, the integration of all Papyrus companies into a single, shared FSC and PEFC multi-site was finalised.

FSC/PEFC-certified companies are obliged to meet the requirements relating to health, labour and safety issues accord-ing to the ILO Declaration on Fundamen-tal Principles and Rights at Work, 1998. FSC/PEFC goes beyond our direct suppli-ers as the audits and assessments con-ducted by the Forest Stewardship Council include the complete upstream supply chain.

Close to 100 percent of purchased paper volumes are sourced from paper manufacturers and paper mills that are FSC/PEFC-certified.

Operation – Securing a more environmentally friendly operationPapyrus environmental ambitions cover all aspects of the product lifecycle, including manufacturers, suppliers and customers. Through continuous improvements, Papyrus strives to minimise and prevent a negative impact on the environment. Papyrus complies with national legislation requirements that set the minimum stand-ard for the company’s environmental per-formance and conduct. In fact, Papyrus strives to go beyond legislative require-ments, supporting a proactive and pre-cautionary approach to environmental challenges.

Initiatives are continuously taken to reduce the environmental impact of Papyrus activities. For example, the Group’s vehicle fleet in Sweden has been running on biodiesel fuel for more than ten years. Papyrus recycles and reuses whatever it can – the reuse of pallets is just one example of this approach. Papy-rus transport and logistical operations in Switzerland and the Netherlands are car-bon neutral, as verified by independent CO2 audits that adhere to greenhouse gas protocol rules. Measures to reduce emis-sions are implemented on an annual basis and the remaining emissions are offset.

Health and safety metrics 2015 2014 2013 2012 2011

Gender distribution, female/male, % 33/67 33/67 34/66 32/68 32/68

Accidents at workplace* 12.7 17.1 17.6 21.9 20.0

Hours lost due to accidents* 8.1 12.1 13.0 13.8 13.6

Total sickness absence, % 4.0 3.6 3.8 4.2 4.4

* Accidents/Hours lost per one million working hours

Papyrus only accepts trustworthy labels and it is important that the company clarifies the individual meaning of the established label schemes in a transparent way. Papyrus respects the validity of ISO 14001 and EMAS for audited environmen-tal management systems, FSC and PEFC for chain of custody, and Nordic Swan, EU Ecolabel and Blauer Engel as life cycle labels.

Responsible wood supply Holistic product logos

FR/011/002

NO

RDIC ECOLABEL


The Global Forest & Trade Network (GFTN) is the WWF’s initiative to eliminate illegal logging and drive improvements in forest management while transforming the global marketplace into a force for sav-ing the world’s valuable and threatened forests. First established in 1991, it is the world’s longest-running and largest forest and trade programme of its kind – provid-ing assistance to hundreds of companies in many countries. Papyrus Deutschland GmbH is the only European paper mer-chant to be a member of the GFTN, and thus fulfils the strict conditions governing responsible sourcing of paper.

By promoting products and applica-tions based on fibres from sustainable sources as well as recycling paper, Papyrus contributes to an environmentally respon-sible way of using wood resources. The regeneration of forest exceeds the logging rate, meaning that sustainably managed forests can be the best weapon to fight

global warming, since trees bind carbon dioxide through photosynthesis. Papyrus is aware of its important role in the pro-motion of products from certified forest management, as wood from renewable forest management has a neutral CO2 bal-ance, making it a unique ecological raw material.

Business conduct – Doing business with high ethical standardsPapyrus is committed to fair and ethical business practices. The company’s Code of Ethics, together with other Group poli-cies, form the basis of sustainability activi-ties at Papyrus that are aimed at building and maintaining a relationship of trust with customers, shareholders, employees, suppliers and the general public.

Group policies alongside the company’s core values support the enforcement of fair and ethical conduct in the company’s day-to-day business and set the standard

• Suppliers are expected to comply with legal requirements in all coun-tries where they operate

• Suppliers are expected to operate in compliance with established environ-mental management systems (e.g. EMAS or ISO 14001)

• Preference is given to products that are produced using reduced energy consumption and lower CO2 emissions

• Suppliers are encouraged to develop and use environmentally friendly technologies

• Sale of paper products from credibly certified fibre (e.g. FSC and PEFC) is supported

• Products originating from illegal log-ging and uncertain sources are never accepted

• Papyrus is committed to the use of certified products, recycled products or products with recycled content

Sustainability

of conduct required from management and employees to ensure that the business is managed in the most ethical manner. Papyrus performs an annual Corporate Governance Certification Process to ensure that the Papyrus Group Policies are up-to-date and subject to an annual review.

SUSTAINABILITY IN THE SUPPLIER CHAIN

CODE OF ETHICSThe Papyrus Code of Ethics contains all of the company’s major policies and principles that define the Group-wide approach to important topics.

Business Practice Policy Brings together the key elements for maintaining ethi-cal business practices and responsible management of important topics such as corruption, bribery, fraud, anti-money laundering and competition law

Communications Policy and Guidelines

Defines the company’s communication principles. A communication characterized by creditability, trans-parency, responsibility, proactively and open dialogue

Competition Law Compliance Program

Sets out the approach to free and fair competition at Papyrus

Environmental Policy Forms the principals for the company’s environmental work

Occupational Health and Safety Policy

Defines the principals for activities related to workplace health and safety

64%PAPYRUS SHARE OF STOCK

SALES OF FSC AND PEFC-CERTIFIED

PRODUCTS IN 2015


Sustainability

European paper manufacturers comply with strict environmental standards, continuously enhancing the equilibrium between environmental responsibility and energy consumption. The industry also assumes responsibility for purchas-ing raw materials. In addition, ISO envi-ronmental certification is established practice. All parties involved in the pro-duction and supply of paper work con-tinuously to improve the situation fur-ther. While a lack of consensus may remain on certain issues, all involved agree that production strategies must reflect the responsibilities of the sector if the paper industry is to continue to flourish.

The European paper industry is a leading recycler. In 2013, 72 percent of paper consumed in Europe was recy-cled. This is a remarkable achievement, considering current paper consumption is at the same level as 1998 but the amount recycled is 1.5 times higher. Furthermore, wood fibres can be reused up to seven times. (source: CEPI).

Today, European paper mills source 56 percent of their primary energy through eco-friendly, almost carbon neutral biomass. The paper sector is the largest industrial producer of bioenergy, generating 20 percent of biomass-based

STRICT ENVIRONMENTAL STANDARDS IN THE EUROPEAN PAPER INDUSTRY

energy in Europe (source: CEPI). This is extremely important for Papyrus, which is why the use of biomass features prom-inently in the company’s environmental policy. Since 1990, CO2 emissions when producing 1 tonne of paper have been reduced by 45 percent (source: CEPI). However, carbon emissions are only one of many factors when considering the environmental compatibility of paper. Accordingly, Papyrus also actively pro-motes the use of raw materials from responsibly managed forests as an important vehicle in the prevention of further climate change.

THE WHOLE PAPYRUS GROUP IS FSC-CERTIFIED

In 2003, Papyrus was the first European merchant to receive FSC certification. Today, all Papyrus companies have chain-of-custody certification, which enables the Group to guarantee the origin of the raw material of the paper product. By the end of 2014, the inte-gration of all Papyrus companies into a single, shared FSC and PEFC multi-site was finalised.

FSC stands for the Forest Stewardship Council and PEFC for the Programme for the Endorsement of the Forest Certifica-tion schemes. In Europe, 32 percent of total paper, tissue and board is sold with a chain-of-custody certificate (source: CEPI, 2013). The Papyrus share of FSC and PEFC-certified products represented 64 percent of Papyrus total paper sales volume from stock in 2015.


Three-year summary

Five-year summaryAs the graphs below show, 2015 was a another year with improved efficiency, stable cash flow and further reduction of net debt. The performance in recent years provides the company with a good base for the years ahead as it follows its strategic roadmap.

1,200 1.0

1,800 4.0

1,400 2.0

1,600

01,000


EBITDA, % (excl. restructuring and divestments)

5.0

Net sales and EBITDA %

EUR million

2,000

%

3.0

2011 2013 20142012 2015

10

30

40

0

Operating profit

EUR million

20

2011 2013 20142012 2015

25

50

0

Operating cash flow

EUR million

100

75

2011 2013 20142012 2015

80

0

Cash conversion rate

%

160

100

140

120

40

20

60

2011 2013 20142012 20150

Net debt

EUR million

400

200

300

100

2011 2013 20142012 2015

Net sales were in line with the general market trend of competitive market condi-tions and changes in media consumption patterns.

Operating profit fell by 8 percent from EUR 37.0 million to EUR 34.0 million. The reduc-tion in operating profit was mainly due to change in volumes and lower margins.

The company’s efforts on delivering effi-ciency and productivity gains has resulted in further improvements in sales per employee.

The strong internal focus on cash flow resulted in increased capital efficiency and stable cash flow generation.

Cash conversion rate is defined as cash flow from operating activities divided by EBITDA excl. restructuring costs and divestments. The cash conversion rate target is >100%.

Continued reduction of net debt in 2015, which creates a solid financial platform and enhanced flexibility for the years ahead.

900

600

500

1,800

1,200

1,500

200

300

0

300


Sales per employee, EUR thousand

900

Net sales and sales per employee

EUR million

2,100

EUR thousands

700

800

400

600

2011 2013 20142012 2015


Financial Performance

Robust financial position At 31 December 2015, cash and cash equivalents totalled EUR 127.2 million, while unutilised credits amounted to EUR 58.0 million. Accordingly, total available cash and cash equivalents and undrawn credit facilities amounted to EUR 185.2 million. At year-end 2015, consolidated equity amounted to EUR 207.7 million.

The positive development in the finan-cial performance is the result of the com-pany’s continuous improvement efforts in accordance with the established strategy. The stable financial situation provides a solid position for the years ahead.

Investments Total non-current assets declined by EUR 7.5 million, mainly due to planned amorti-sations/depreciations and low invest-ments, but also a property in Germany being reclassified as assets held for sale. Total investments during the year amounted to EUR 8.3 million, of which shares in subsidiaries accounted for EUR 4.7 million. Depreciation of existing non-current assets amounted to EUR 5.8 mil-lion and amortisation of intangible assets, including impairment, amounted to EUR 4.8 million, together totalling EUR 11.1 million.

Sales in 2015 totalled EUR 1,541.8 million, which was EUR 25.0 million, or 2 percent, lower than in 2014. This was attributable to a 1-percent decrease in volumes and a 1 percent reduction in average prices due to competitive market conditions. Exchange rate movements had a limited impact on Papyrus sales and costs during the year.

Financial results Operating profit for Papyrus fell by 8 per-cent to EUR 34.0 million from EUR 37.0 million. EBITDA, excluding restructuring costs and divestments, decreased 15 per-cent from EUR 57.0 million to EUR 48.4 million. The reduction in profit was mainly due to changes in volume, but also to weaker gross margins that were largely offset by lower costs. The strong price competition and harsh market conditions led to a lower gross margin that declined from 14.8 percent to 14.7 percent in 2015.

The Group’s modernisation programme continued to posetively impact costs dur-ing 2015. The cost trend was positive, with a decrease of EUR 35.4 million.

During the year, additional operations were acquired in the Czech Republic via the acquisition of OSPAP a.s., thus making Papyrus the leading paper merchant in Czechia. The company had previously been part of the PaperlinX Group, whose European operations filed for bankruptcy during the year. The events linked to the previous competitor PaperlinX have also opened up new market opportunities for Papyrus, with a significant number of new customers, particularly in the Netherlands, having a positive impact on net profit for the year.

At year-end 2015, the number of employees was 1,897, up from 1,877 in the preceding year. The acquisition of OSPAP a.s. conducted in 2015 contributed to an increase of 94 people in the number of employees, adjusted for this, a reduction of 74 in the total number of employees.

Net financial items amounted to an expense of EUR 7.9 million in 2015, com-

Robust financials and a future oriented business model2015 was a year of continued challenging market condition for printed media, which affected sales and earnings. At the same time, it was a year when Papyrus further strengthen the financial position and increased its productivity, as a result of systematic enhancements based on the established strategy.

FINANCIAL PERFORMANCE

pared with EUR 19.6 million in 2014. This improvement was mainly due to foreign exchange effects on financial items, but also lower net debt and low interest rates.The result before tax totalled EUR 26.2 million compared with EUR 17.5 million in 2014, and the net result for the year was EUR 21.6 million compared with EUR 9.4 million in the preceding year.

Stable cash flowCash flow from operating activities before investments totalled EUR 36.1 million compared with EUR 86.4 million in the preceding year. The strong internal focus on cash flow and, in particular, the reduc-tion in working capital remains unchanged. It has not been possible, however, to achieve the same level of positive effects on cash flow seen in 2013 and 2014. The total reduction in operating capital was EUR 3.0 million. The positive impact in 2015 was mainly derived from a decrease in trade receivables and an increase in trade payables. Net cash from investing activities amounted to a negative EUR 8.3 million and mainly comprised the acquisi-tion of OSPAP a.s. in the Graphical and Business paper business. The cash flow generated was used to amortise loans totalling EUR 13.9 million. The net increase in cash and cash equivalents amounted to EUR 12.3 million compared with EUR 49.4 million in 2014.

The strong internal focus on cash flow and, in particular, the reduction in working capital remains unchanged.

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Consolidated income statement

Year ending December 31

EUR thousand 2015 2014 2013 2012 2011

Net sales 1,541,797 1,566,794 1,604,344 1,726,463 1,887,304

Other operating income 15,589 28,983 21,895 18,940 16,225

Materials and services –1,254,787 –1,276,734 1,304,461 –1,406,188 –1,552,633

Freight and commissions –54,727 –59,736 –54,544 –55,311 –57,038

Personnel expenses –127,468 –129,876 –139,624 –147,006 –152,531

Other operating expenses –75,794 –80,717 –91,090 –101,525 –108,082

Depreciation, amortisation and impairment –10,598 –11,726 –13,536 –14,132 –16,352

Operating profit 34,012 36,988 22,984 21,241 16,893

Financial income 3,799 219 326 940 2,231

Financial expense –11,728 –19,842 –18,707 –26,360 –33,705

Share of profit of investments 159 157 253 — —

Result before tax 26,242 17,522 4,856 –4,179 –14,581

Income tax –4,606 –8,151 –3,321 –1,931 4,878

Result of the year 21,636 9,371 1,535 –6,110 –9,703

Extract from the Consolidated Financial StatementsThis financial information has been extracted from the audited financial statements, which have been prepared in accordance with IFRS.

Consolidated income statement


Consolidated balance sheet


EUR thousand 2015 2014 2013 2012 2011

Non-current assets

Goodwill 65,940 65,321 66,482 67,744 56,426

Other intangible assets 61,829 65,221 77,668 79,160 82,071

Property, plant and equipment 55,234 59,926 99,354 109,272 129,051

183,003 190,468 243,504 256,176 267,548

Other non-current assets

Investments in associates 1,498 1,443 1,389 1,182 1,182

Deferred tax assets 15,909 23,205 25,605 28,692 25,964

Other non-current receivables 3,510 3,084 2,180 2,290 1,786

Interest-bearing non-current receivables — — — — 2,000

20,917 27,732 29,174 32,164 30,932

Current assets

Inventories 83,947 72,941 78,971 103,135 115,317

Trade receivables 189,923 191,968 204,341 232,065 262,901

Current tax receivables 3,742 2,179 3,244 3,645 4,364

Other current receivables 32,320 26,816 35,071 34,682 64,291

Interest-bearing current receivables — — 13 2,067 1,055

Cash and cash equivalents 127,220 114,947 65,625 58,863 55,543

437,152 408,851 387,265 434,457 503,471

Assets classified as held for sale 2,474 — — — 4,000

— — — 4,000

Total assets 643,546 627,051 659,943 722,797 805,951


Consolidated statement of financial position, assets


Consolidated balance sheet


EUR thousand 2015 2014 2013 2012 2011

Equity 207,654 182,610 182,214 180,963 35,447

Non-current liabilities

Post-employment benefit provisions 37,370 37,713 24,729 25,380 19,521

Other provisions 1,412 1,770 2,490 2,007 4,413

Other non-current liabilities 3,020 3,103 3,004 2,506 1,958

Deferred tax liabilities 20,086 24,637 28,515 31,266 32,797

Non-current financial liabilities 2,695 2,617 1,392 7,520 15,430

Shareholder loan — — — — 141,335

Vendor loan note 59,469 55,840 53,800 82,368 74,205

Other non-current interest-bearing borrowings 66,543 79,805 145,843 166,036 214,919

190,595 205,485 259,773 317,083 504,578

Current liabilities

Trade payables 187,800 179,802 165,084 162,836 201,558

Current interest-bearing borrowings 4,599 878 1,376 5,084 4,711

Derivative liabilities — — 1,203 2,361 923

Other current liabilities 51,760 54,321 49,340 52,087 56,583

Income tax liabilities 1,138 3,955 953 2,383 2,151

245,297 238,956 217,956 224,751 265,926

Total equity and liabilities 643,546 627,051 659,943 722,797 805,951


Consolidated statement of financial position, equity and liabilities


Consolidated cash flow statement

Consolidated cash flow statement


EUR thousand 2015 2014 2013 2012 2011

Cash flow from operating activities

Result before tax 26,242 17,522 4,856 –4,179 –14,581

Non-cash flow items included in result before tax 12,035 26,189 22,630 29,143 38,363

Income taxes paid/received –6,797 –2,849 –4,002 –3,202 –7,718

Net cash from operating activities before changes in working capital

31,480 40,862 23,484 21,762 16,064

Changes in working capital

Change in trade and other current receivables 5,035 19,268 30,315 62,177 12,440

Change in inventories –4,192 5,699 24,384 13,743 3,653

Change in trade payables and other current liabilities 2,112 20,578 –9,542 –47,757 18,291

Change in working capital 2,955 45,545 45,157 28,163 34,384

Net cash generated from operating activities 34,435 86,407 68,641 49,925 50,448

Cash flow from investing activities

Acquisition –9,123 –2,759 –8,420 –20,877 –16,767

Sale of subsidiary, net of cash — — 474 — —

Proceeds from sale of property, plant and equipment 860 29,111 3,125 24,765 5,298

Net cash from investing activities –8,263 26,352 –4,821 3,888 –11,469

Cash flow from financing activities

Issue of shares/convertibles — 100 909 153,610 2,105

Increase in borrowings — 1,000 350 13,661 78,254

Net change in check account –50 196 –629 — —

Repayment of borrowings –13,851 –64,681 –57,742 –217,891 –170,430

Paid bank fee — — — — –3,858

Net cash from financing activities –13,901 –63,385 –57,112 –50,620 –93,929

Net change in cash and cash equivalents 12,271 49,374 6,708 3,193 –54,950

Cash and cash equivalents, beginning of the year 114,947 65,625 58,863 55,543 110,493

Translation difference on cash and cash equivalents 2 –52 54 127 —

Cash and cash equivalents, end of the year 127,220 114,947 65,625 58,863 55,543



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Risk analysis

Reducing risk exposurePapyrus is exposed to a series of risks that may affect the Group’s future profitability and performance. They are divided into three areas, covering financial, market and business-related risks. Papyrus conducts systematic mapping and analysis of identified risks and reviews its strategy to minimise the likelihood and impact of each of the risks.

RISK ANALYSIS

Market risksMarket risks refer primarily to risks associated with the external environment and the market, or in other words risks that the Board of Directors and management only have a limited opportunity to influence in the short term, but must nevertheless address in long-term planning for the business.

Risk factors Description

Macroeconomic trend

General macroeconomics and the specific performance of the economy in markets where Papyrus operates may impact the company’s performance and earnings. The fact that Papyrus operates in many countries across Europe, and is thus diversi-fied, is in itself a factor that mitigates risk. Papyrus continuously monitors the macroeconomic trend to enable timely strate-gic and operational adjustments.

Imbalances between supply and demand of paper

As a leading paper wholesaler, overall demand and supply is influenced by aspects such as installed paper production capacities, the demand trend in emerging markets and paper producers’ export opportunities to markets outside Europe. The demand situa-tion also depends on regulatory issues affecting world trade and the impact of exchange rate fluctuations on the competitiveness of various markets. Papyrus, with its systematic procure-ment approach, continuously monitors developments in supply and demand and adjusts its sourcing strategies accordingly to secure availability and optimal buying options for customers.

Structural changes

Structural changes in the supply chain create opportunities and risks in the form of mergers among merchants, suppliers and customers and in terms of suppliers’ alteration of channel strategies. Papyrus analyses the developments and its position in each market, and adjusts its strategic and operational directions accordingly.

Changed paper consumption pattern

Paper merchanting is the core business of Papyrus, with the major part of the Group’s sales related to paper, and – as such – Papyrus is positioned in the supply chain between paper producers and paper consumers, which includes printers, the public sector, advertisers, media companies and book publishers. Media consumers’ behavioural patterns are changing, which is affecting paper consumption. Papyrus is aware of this development and is adjusting its strategic directions accordingly.

Financial risksThe Group is exposed to various types of financial risks through its activities. Financial risks refer to fluctuations in the Group’s result and cash flow due to changes in exchange rates, interest rates, and refinancing and credit risks. The overall objective of the finance function is to provide cost-effective financing and to minimise adverse effects on the Group’s result due to market fluctuations.


Liquidity risk Liquidity risk (also called funding risk) is the risk that funding cannot be obtained at all, or only at significantly higher costs. Group Finance manages risks related to overall financing of Papyrus in accordance with the funding and liquidity policy. Treasury management is carried out centrally by the holding company and the liquidity forecast is regularly updated to mitigate potential deviations.

Interest rate risk

At Papyrus, the interest rate risk is defined as the negative impact on earnings resulting from changes in interest rates. Papyrus monitors the sensitivity to interest rate changes, and the interest rate risk policy is designed to reduce the impact of interest rate changes on earnings. Derivative contracts are used for hedging the risk when appropriate.

Credit risk Credit risk can be viewed from two main perspectives, credit risk in financial activities (counterparty risks associated with receivables from banks and other counterparties) and credit risk in trade receivables (the risk of not receiving payments for trade receivables from customers). Papyrus manages customer credit risks through a Group-wide credit insurance pro-gramme. In addition, Papyrus works with strict processes for credit control and monitors its credit risks on an ongoing basis.

Currency risk As a consequence of its international activities, Papyrus is exposed to changes in foreign exchange rates. This exposure derives from sales and purchases in foreign currencies and from holdings of foreign net assets in currencies other than the reporting currency of Papyrus, which is EUR. The risk arising from currency exposure and exchange rate fluctuations is estimated to be limited, since the bulk of business is conducted in local currency with no transaction exposure.

Counterparty risks

Counterparty risk is the risk Papyrus faces in transacting with financial counterparts. For financial contracts, risk is minimised by making agreements only with leading financial institutions and companies with high credit ratings.


Risk analysis


Fluctuation in product prices

This relates to the capacity of Papyrus to pass on changes in purchase prices and operating costs to customers via selling prices or fees it charges for services. Papyrus works to continuously improve its sales processes to support more precise pricing of products and services, which includes regulated delegation and price-setting tools.

Ability to handle price pressure

This relates to the ability to balance margins on products sold and net contribution from services with increased transport costs for delivery services. Papyrus works to continuously improve its sales processes to support more precise pricing of prod-ucts and services, which includes regulated delegation and price-setting tools.

Ability to retain customers

Papyrus serves a large customer base, which is broadly distributed in geographical terms, and provides quality products, supply solutions and services. Each year, Papyrus conducts customer surveys to gain an understanding of its position and to initiate activities to improve the interaction with customers and maintain an attractive offering.

Financial reporting

The key risks related to financial reporting are mitigated by the accounting manual and other Papyrus Group Policies related to financial reporting. Papyrus employs a budgeting, reporting and forecasting schedule, and makes a distinction between financial reports for external and internal use. External reporting consists of the published annual report prepared in accord-ance with International Financial Reporting Standards (IFRS) and audited by external auditors. Business Review Meetings are carried out on a monthly basis with executives for each cluster in order to monitor performance. This provides a reasonable degree of assurance that the financial reporting does not contain any errors of material importance.

IT system dependency

For Papyrus, it is important to maintain a high quality and robust IT system for storing and processing financial reporting and accounting records, and information related to warehousing and delivery service. Standardisation of business applica-tions, IT infrastructure and IT processes is an important cornerstone of IT risk management. Although the capacity of the company’s IT system has proven to be reliable, it is not possible to guarantee full identification and timely redressing of every single issue. Papyrus continuously tests and develops the capacity and reliability of its IT systems.

Disruption and property damage

Damage to the facilities in which we operate, as a result of factors such as fire, may have a negative impact both through direct property damage and business interruption, both of which would make it harder to fulfil the Group’s obligations to customers. Continuous efforts are being made to monitor and reduce the Group’s risk in this area through scheduled inspections and preventative security measures. The Group also has full insurance cover against business interruption, such as property damage.

Antitrust risks Free and fair competition is a cornerstone of the market economy, which Papyrus fully supports, and competition laws have been de-signed to protect this situation. Papyrus is entirely committed to complying with all applicable competition laws. To address this risk, Papyrus has a Competition Law Compliance Programme in place, which explains the basic principles of competition law and is designed as a tool to support all Group employees. The objective of the Compliance Programme is to create awareness and ensure adherence to competition law. It should be noted that the Compliance Programme is a work in progress and Legal Services will continuously ensure that it is up-to-date and reflects develop-ments in competition law.

Compliance with laws and regulations

Papyrus is committed to fair and ethical conduct and expects its management and employees to adhere to the corporate policies of Papyrus in their work. The country management of each of the Papyrus entities is responsible for monitoring and enforcing the company’s policies as well as ensuring the compliance of operations with national laws and local legal requirements. Any violation of these polices, principles or guidelines will be closely examined and any necessary action will be taken.

Papyrus Corporate Governance Certification ProcessPapyrus performs an annual Corporate Governance Certification Process to ensure that the Papyrus Group’s Policies are up-to-date and subject to an annual review. Senior managers are to review and confirm their understanding of, and responsibility for, Group Policies by:

• Signing and submitting confirmation of compliance, including descriptions of any infractions or breaches of the poli-cies known as of that date.

• Taking appropriate and necessary steps to ensure that the organisation reporting to them is aware of applicable policies and is notified if any changes are made to them.

• Ensuring appropriate integration of Group Policies into local rules, guidelines and processes.• Ensuring adherence to Group Policies and local rules, guidelines and processes into which they have been integrated.

Business risksBusiness risks refer principally to the overall risks relating to the day-to-day management and operation of the company.


Corporate Governance

Board of DirectorsThe Board supervises the operation and management of Papyrus, and approves significant matters related to business strategy, investments, organisation and finance. The Board appoints and deter-mines the remuneration of the CEO.

The Board has long and extensive expe-rience of wholesaling, finance, marketing, capital markets and large international corporations. Currently, the Board consists of seven ordinary members and two dep-uty members.

The Board’s work is supported through its committees: the Remuneration Com-mittee and the Audit Committee.

Board CommitteesRemuneration CommitteeThe Board has a Remuneration Committee that is responsible for recommending, evaluating and approving compensation for executives, and making recommenda-tions to the Board relating to general compensation issues.

Audit CommitteeThe Board has an Audit Committee to support the Board in maintaining the integrity of the company’s financial reporting and the Board control functions. It regularly reviews the internal control system, the management and reporting of financial risks and the audit process. It makes recommendations regarding the appointment of external auditors.

Chief Executive Officer (CEO)The CEO participates in all Board meet-ings and is in charge of the strategic development agenda and day-to-day management of the company in accord-ance with the instructions issued by the Board. It is the duty of the CEO to ensure that the company’s accounting methods comply with legislation and that financial

Securing alignment and accountabilityThe corporate governance of Papyrus refers to how the Group is governed, directed and managed. It is conducted by the Board of Directors and the relevant governance bodies. The aim is to ensure alignment and efficient implementation of key strategies as well as to support responsible and transparent management of the company by balancing individual and community goals in addition to economic and social goals. In so doing, the Group is building long-term confidence among stakeholders, which is an essential factor for future success.

CORPORATE GOVERNANCE

matters are handled in a reliable manner. In addition, the CEO supervises decisions regarding key personnel and other impor-tant operational matters.

The CEO is directly in charge of the following functions:• Business areas• Finance & IT (Accounting & Controlling,

Treasury, Risk Management, Taxes, Internal Audit, Corporate Finance, IT)

• Supply Chain• Marketing & Supply• Human Resources• Legal Services• Business Development• Corporate Communications

Group management and structurePapyrus operates in two separate business areas, which enables management to have the necessary focus to drive the Group’s strategic agenda, consistently improve cost efficiency of the operating model and maintain an attractive offering to each customer segment.• Graphical and Business paper, dealing

with specialist distribution of paper to the graphic industry

• Papyrus Supplies, serving corporations and public institutions with cleaning, hygiene and packaging products.

The business areas continuously share ideas and best practices in all respects. Cross-border and cross-functional know-ledge transfer represent key enablers in terms of realising Group synergies and development in sales, logistics, adminis-tration, IT and sustainability.

Graphical and Business paper The decision-making body with responsi-bility for managing the graphical and office paper business comprises the CEO and the Management Board of Graphical

and Business paper. The Management Board meets approximately once a month or as required. Board members include the CEO, the CFO, the General Counsel and the heads of the Business Clusters. Day-to-day operational responsibility rests with the management of the subsidiaries and their operational teams, supported by staff and service functions.

Papyrus Supplies The decision-making body with responsi-bility for managing the cleaning, hygiene and packaging business consists of the CEO and the Board of Papyrus Supplies. The members of the Board include the CEO, the CFO, the chairman of Papyrus Board of Directors, the General Counsel and the head of Papyrus Supplies.

The day-to-day operational responsibil-ity rests with the management of Papyrus Supplies. The Supplies Management Team is chaired by the head of Papyrus Supplies and the members include the managers of the two business units – Public Sector & Service and Industry – and representatives from Finance & Controlling, Business Development, Assortment & Purchasing, Human Resources and Logistics. The Sup-plies Management Team meets approxi-mately once a month or as required.

Senior Executive TeamThe Senior Executive Team (SET) is formed to provide the company with a top man-agement forum for planning operations, sharing information and aligning business targets. Papyrus SET meetings are chaired by the CEO and the members are appointed by the CEO. The team com-prises Management Board members, the head of Papyrus Supplies, other key indi-viduals representing the largest operations and key functional managers. SET meets on a quarterly basis.


Corporate Governance

PAPYRUS ORGANISATION


Sales Supply Chain

Management board

Central Cluster Western Cluster


Nordic Cluster South Eastern Cluster

Austria

Germany

Belgium

France

Luxembourg

Netherlands

Switzerland

Denmark

Norway

Sweden

Estonia

Finland

Latvia

Romania

Slovakia

Lithuania

Czech Rep.

Hungary

Italy

Poland

Human Resources Logistics


Papyrus Supplies Board

Papyrus SuppliesManagement Team

Papyrus Supplies

Assortment & Purchasing

Finance & Controlling

Denmark

Finland

Norway

Sweden

Denmark

Finland

Norway

Sweden

Industry Public Sector & Service

Business Development

Papyrus is organised into two business areas: Graphical and Business paper for specialist distribution of paper to the graphical indus-try, and Papyrus Supplies that supports the manufacturing industry, service companies and the public sector by providing cleaning, hygiene and packaging products.

MEMBERS OF PAPYRUS SENIOR EXECUTIVE TEAM• Peter Sandberg, President and CEO

• Gunilla Andersson, CFO

• Sören Gaardboe, SVP Nordic, Benelux and France

• Stefan Syrén, SVP Marketing & Supply and Central Cluster

• Dan Andersson, SVP Papyrus Supplies

• Mattias Hallendorff, General Counsel

• Christian Carlsson, SVP Human Resources

• Torbjörn Stockman, VP Business Devel-opment and Sales

The governance model enables the man-agement in each area to have the necessary focus to drive forward the Group’s strategic agenda, consistently improve the operating model’s cost efficiency and maintain an attractive offering to each customer segment.

The business areas and functional units continuously share ideas and best practices in all respects. Cross-border and cross-func-tional knowledge transfer represent key ena-blers in terms of realising Group synergies and development in sales, the supply chain, administration and IT.

• Allan Persson, VP Marketing & Supply

• Björn Gidlund, VP IT & CIO

• Sorin Buga, VP South Eastern Cluster

• Stefan Peter, Managing Director Papyrus Germany

• Peter Meier, Managing Director Papyrus Switzerland

• Olivier Langlois, Managing Director Papyrus France, Papyrus Belgium and Papyrus Netherlands


Papyrus Group Management

Papyrus Group Management

SÖREN GAARDBOESenior Vice President, Nordic Cluster and Benelux France• Born 1964 • LL.M. from Copenhagen

University and M.Sc. in Finance and Economics from Copenhagen University

• Joined Papyrus in 2006 • Previous positions: Managing

Director of Papyrus Denmark, Managing Director of various ISS subsidiaries

Group Management function• Member of Graphical and Busi-

ness paper’s Management Board. Geographical responsibility: Nordic Cluster, Benelux and France

• Member of Papyrus Senior Executive Team

STEFAN SYRÉNSenior Vice President, Marketing & Supply and Central Cluster• Born 1966 • M.Sc. in Chemical Engineering

from Chalmers University of Technology

• Joined Papyrus in 1999• Previous positions: General

Manager Consumables Papyrus, Customer Marketing Manager, Procter & Gamble

Group Management function• Member of Graphical and Busi-

ness paper’s Management Board. Geographical responsibility: Austria , Germany and Switzerland

• Member of Papyrus Senior Executive Team

MATTIAS HALLENDORFF General Counsel • Born 1969 • LL.M. from Gothenburg Univer-

sity and J.D. from the University of Minnesota

• Joined Papyrus in 2008 • Previous positions: Dorsey &

Whitney LLP

Group Management functions• Member of Graphical and Busi-

ness paper Management Board• Member of Papyrus Supplies

Board• Member of Papyrus Senior

Executive Team

PETER SANDBERGPresident and CEO• Born 1967 • M.Sc. in Business Administration

from Umeå University • Joined Papyrus in 2008• Previous positions: President and

CEO of Korsnäs AB, Executive Vice President at M-real, Chairman of the Board of INNVENTIA, Member of the Board of the Swedish Forest Industries Federation and CEPIFINE

Group Management function• Chairman of Graphical and Busi-

ness paper Management Board. Geographical responsibility: South Eastern Cluster

• Chairman of Papyrus Supplies Board

• Chairman of Papyrus Senior E xecutive Team

GUNILLA ANDERSSONCFO• Born 1965• Bachelor of Economics from

Gothenburg University• Joined Papyrus in 2012• Previous positions: CFO of TA Hydronics,

CFO of Tour & Andersson AB

Group Management function• Member of Graphical and Business

paper Management Board• Member of Papyrus Supplies Board• Member of Papyrus Senior

E xecutive Team

DAN ANDERSSONSenior Vice President, Papyrus Supplies • Born 1968• Bachelor of Economics from

Rice University• Joined Papyrus in 1999• Previous positions: Managing

Director of Papyrus Hungary, Graphical Sales Director at Papyrus Sweden

Group Management function• Member of Papyrus Supplies’

Board• Member of Papyrus Supplies

Management Team• Member of Papyrus Senior

Executive Team


Board of Directors

Board of Directors

CHRISTOPH SANDER

Board Chairman since 2013 and Board member since 2011• Education: MA in Economics from

Cambridge University and MBA from Harvard Business School

• At present: Independent non-executive Director of PHS Group Investments Lim-ited, Independent Advisor. Board appointments: Papyrus, United Authors Publishing Ltd

• Background: Member of the Board of ISS A/S, Member of the Board of Bunzl Plc, CEO and Managing Director Europe & Australasia, Managing Director Harpur Group, Boston Consulting Group, London

CHRISTIAN BERNER

Board member since 2012• Education: Economics diploma from the

U niversity of Hamburg• At present: Entrepreneur. Board appoint-

ments: German Logistics Association (BVL), Apetito AG, LR Health & Beauty GmbH, 4 Flow AG, Foris AG, Klöpfer & Königer GmbH, Bruhn Spedition GmbH, Rebopharm GmbH

• Background: CEO of Lekkerland Group, CEO of Kühne & Nagel Germany

CLAES EKSTRÖM

Board member since 2008 and Board Chairman 2008–2013• Education: M.Sc. in Mechanical

Engineering from Chalmers University of Technology, Bachelor of Economics and Law studies at the University of Gothenburg

• At present: Partner at Altor Equity Part-ners. Board appointments: Swedfund (chairman), Northstar, Papyrus, Orchid Orthopedic Solutions, Norsk Gjenvinning in addition to several other non-profit commitments: Mentor (drug prevention), The Karolinska Institute, The Stella Foun-dation, World’s Children’s Prize

• Background: Senior Director at McKinsey & Co

ULF GUNDEMARK

Board member since 2008• Education: M.Sc. in Electrical Engineering

from Chalmers University of Technology• At present: Management Consultant.

Board appointments: Constructor Group, AQ Group, Lantmännen, Scandinavian Standard, Nordic Water Proofing, Solar Group, Papyrus

• Background: CEO of Elektroskandia/ Hagemeyer Nordics, Global Manager at IBM, Business Area Manager at ABB

LUC HENDRIKS

Board member since 2013 and deputy Board member 2012–2013 • Education: M.Sc. in Mechanical

E ngineering from the University of Technology in Eindhoven

• At present: Operating Partner at West Park Management Services Germany Board appointments: Papyrus, Europart

• Background: Executive Director at Brambles, various positions at GE

MATS LINDSTRAND

Board member since 2008• Education: MBA Columbia Business

School in New York City and M.Sc. at the Royal Institute of Technology in Stockholm

• At present: Founder and chairmen of FRISQ AB and BioMass Capital AB. Board appointments: Sensec AB, Sirva Inc., Papyrus, EA Gruppen AB, Munksjö AB

• Background: Senior Director, McKinsey & Company, Engineer at Det Norske Veritas

BENGT MAUNSBACH

Board member since 2013 and deputy Board member 2008–2013• Education: M.Sc. in Economics and

Business Administration from the Stockholm School of Economics

• At present: Partner at Altor Equity Part-ners. Board appointments: P apyrus, Ålö, Haarslev

• Background: Manager at The Boston Consulting Group

SEBASTIAN LAPINSKYDeputy Board member since 2016• Education: MA in Economics from

Cambridge University• At present: Investment Advisory Profes-

sional at Triton Advisers (Sweden) AB. Board appointments: Papyrus

• Background: Oaktree Capital Manage-ment

NIKO MOKKILA

Deputy Board member since 2013• Education: M.Sc. in Mechanical

E ngineering from Helsinki University of T echnology and M.Sc. in Economics from Helsinki School of Economics

• At present: Director at Altor Equity Partners

• Background: Merrill Lynch

The Board’s focus is on supporting the Excecutive Team in the strategic development towards becom-ing the leading merchant of the future. This is done in a constructive and open manner.CHRISTOPH SANDERBoard Chairman

OWNERS OF PAPYRUS

Papyrus is 51-percent owned by Altor (Altor Fund II) and 49-percent owned by Triton (Triton II Fund). Altor is a family of private equity funds focused on investing in and developing medium-sized com panies anchored in the Nordic region.

The Triton funds invest in and support the positive development of medium-sized businesses headquartered in Northern Europe, with a focus on companies in Austria, Denmark, Finland, Germany, Italy, Norway, Spain, Sweden and Switzerland. Within this European region, Triton focuses on businesses in the Industrial, Business Services, and Consumer/Health sectors.


The Papyrus story

It all began back in 1895The history of Papyrus began back in 1895 with the acquisition of a paper mill located in Mölndal on the Swedish west coast. Since then, the company has grown to become a leading European merchant in paper, facility supplies and industrial packaging.

THE PAPYRUS STORY

THE STORY BEHIND THE NAME

Papyrus is the etymological root of the word “paper”, meant to evoke associations with ancient Egypt – a culture widely recognised as the cradle of western civilisation. The Papyrus reed itself was the raw material for the first paper as we know it in the western hemi-sphere. Papyrus also triggers asso-ciations with the tradition of think-ing, writing, printing and sharing thoughts and ideas across times and distances.

The first paper mill in Mölndal, just out-side Gothenburg in the west of Sweden, was established in 1653. Production was gradually industrialised and towards the end of the 19th century, Mölndal could boast the most technically advanced paper mill in Sweden.

The Swedish Wallenberg dynasty bought the mill in 1895 and made it famous under the name Papyrus. In con-nection with the merger of Stora and Enso in 1998, the Papyrus brand was chosen as the name for the European merchant operation.

The old mill in Mölndal has now been closed for many years and today, Papyrus is recognised as a leading European mer-chant offering customers efficient supply solutions of paper, cleaning, hygiene and packaging products.

Becoming a pan-European organisationThe history of Papyrus clearly illustrates the development of the industry during the 20th century – a transition from a small-

scale business in a fragmented market to consolidation and pan-European opera-tions. This development gained momen-tum in the 1980s – partly because new EU rules paved the way for the shift and partly due to the markets in Eastern Europe open-ing up. Papyrus had simply reached a point in history where the concept of a domestic market no longer made sense.

Papyrus was not always a large com-pany; it was formed by an array of mer-chant operations that were significant in their home markets, but were too small to make any impact on a European scale.

Many success stories over the years Today, Papyrus is a proud company with many success stories, competencies and a clear commitment to providing customers with first-class service. Papyrus respects and understands its customers’ business needs and offers support whenever and wherever the company can. This is a com-mitment shared throughout the organisa-tion and across Europe.


The Papyrus story

2015 Papyrus acquires OSPAP and becomes the leading paper merchant in Czech Republic

2014 Papyrus Supplies acquires Städshopen, a retailer in the professional cleaning field based in Stockholm, Sweden.

2013 Papyrus Supplies acquires INPA, a cash & carry company in Malmö, Sweden.

2012 Papyrus acquires Arto Emballasje AS in Norway and Siisti-Piste Oy in Finland, which become part of the Papyrus Supplies business area.

2011 Papyrus Supplies is established as a standalone business area, supporting the manufacturing industry, service companies and the public sector by providing cleaning, hygiene and packaging products.

2010 Schneidersöhne in Germany and Sihl+Eika in Switzerland are renamed Papyrus, and the entire Group now operates under the Papyrus brand in all markets.

2009 Papeteries de France and Scaldia operate under the Papyrus brand.

2008 Altor Fund II acquires Papyrus from Stora Enso. Later the same year, Triton II Fund is invited to share ownership with Altor.

2007 Papyrus acquires the remaining 20 percent of Sihl+Eika.

2005 Papyrus acquires Schneidersöhne as well as Papeteries de France. The company is now Europe’s second largest merchant organisation.

2004 Papyrus acquires Scaldia Papier, strengthening its position in the Netherlands.

2002 Stora Enso sells the paper mill in Mölndal to Klippan AB. Papyrus is established as the name for Stora Enso’s merchants across Europe

2001 Schneidersöhne initiates operations in Italy following the found-ing of Schneider Papier Italia.

2000 Papyrus acquires Carl Emil in Norway and Paperi-Dahlberg in Finland, thereby becoming the leading paper merchant in the Nordic countries.

1999 Papyrus becomes the name for Stora Enso’s merchant division and all 13 companies in the division change their names to Papyrus.

1998 STORA and Enso announce their merger and the paper mill in Mölndal changes its name to Stora Enso Mölndal. Schneidersöhne acquires 80 percent of Sihl+Eika. Sihl+Eika acquires Giger Papier.

1997 Launch of the Schneidersöhne internet portal.

1996 STORA Merchants becomes an independent division for all merchant companies owned by the STORA group.

1987 The Papyrus mill in Mölndal is acquired by STORA, which becomes the sole owner of the previously jointly owned merchant organisation.

1985 Pappersgruppen, owned by the Papyrus paper mill in Mölndal, becomes the first European merchant to launch an e-commerce system.

1984 Merger of the two Swiss paper companies Sihl and Eika.

1982 The Papyrus paper mill in Mölndal and STORA become joint owners of the European sales and merchant organisation.

1966 The Papyrus paper mill in Mölndal acquires shares in several smaller Swedish paper merchants, selling two lines of products – fine paper and consumables. Ten years later, these merchants formed Pappersgruppen.

1957 The Papyrus paper mill in Mölndal sets out on its journey to establish a sales and merchant organisation in Europe.

1902 G.Schneider & Söhne is founded in Ettlingen in southern Germany.

1895 Marcus Wallenberg begins to expand operations at a Mölndal mill he has acquired and makes the mill famous under the name Papyrus.

2012

2015

2010 2005

2004 1999

1985

1984

1957 1895


Contact

Contact

Head OfficePapyrus ABP.O. Box 1004SE-431 26 MölndalSwedenPhone: +46 1051 70 000

GRAPHICAL AND BUSINESS PAPER

AustriaPapyrus Deutschland GmbH & Co. KGNiederlassung München Hürderstraße 5DE-85551 Kirchheim – Heimstetten GermanyPhone: +49 89 61565-0

BelgiumPapyrus Belgium Papier nv/saInternationalelaan 55 b 33BE-1070 BrusselsBelgiumPhone: +32 2 529 85 11

Czech RepublicPapyrus Bohemia s. r. o.K Hrušovu 292/4 CZ-102 23 Praha 10 Czech RepublicPhone: +420 272 114 540

DenmarkPapyrus A/SOldenburg Allé 1DK-2630 TaastrupDenmarkPhone: +45 7022 3838

EstoniaPapyrus ASSõpruse pst 145EE-13417 TallinnEstoniaPhone: +372 6 788 670

FinlandPapyrus Finland OyKoivuvaarankuja 2FI-01640 VantaaFinlandPhone: +358 2077 49 49

FranceGroupe Papyrus France S.A.S.Les Diamants – Bat B41 rue DelizyFR-93500 PantinFrancePhone: +33 1 49 42 36 00

GermanyPapyrus Deutschland GmbH & Co. KGGehrnstraße 7-11DE-76275 EttlingenGermanyPhone: +49 7243 73 0

HungaryPapyrus Hungária Zrt.Könyves Kálmán körút 11/c.HU-1097 BudapestHungaryPhone: +361 452 98 00

ItalyPapyrus S.r.l.Via P. Vassanelli, 32 IT-37012 Bussolengo – VR ItalyPhone: +39 045 8630811

LatviaPapyrus SIADzelzavas iela 120s-13LV-1021 RigaLatviaPhone: +371 67 31 30 22

LithuaniaUAB Papyrus Lietuva R. Kalantos St. 59LT-52304 KaunasLithuaniaPhone: +370 37 400 330

NetherlandsPapyrus Groep Nederland bv P.O. Box 62NL-6500 AB NijmegenNetherlandsPhone: +31 88 65 65 222

NorwayPapyrus Norge ASP.O. Box 114 TveitaNO-0617 OsloNorwayPhone: +47 22 90 45 00

PolandPapyrus Sp. z o.o.Ul. Wołoska 5PL-02-675 WarszawaPolandPhone: +48 22 449 02 00

RomaniaPapyrus Romania SRLBdul. Timisoara Nr. 90RO-061334 BucharestRomaniaPhone: +40 372 462 400

SlovakiaPapyrus Bohemia s. r. o.Prague GateTürkova 2319/5bCZ-149 00 Praha 4Czech RepublicPhone: +420 272 114 540

SwedenPapyrus Sverige ABP.O. Box 1004SE-431 26 MölndalSwedenPhone: +46 1051 70000

SwitzerlandPapyrus Schweiz AGZürcherstrasse 68CH-8800 ThalwilSwitzerlandPhone: +41 58 580 58 00

PAPYRUS SUPPLIES

DenmarkPapyrus Supplies A/SOldenburg Allé 1DK-2630 TaastrupDenmarkPhone: +45 7022 3838

NorwayPapyrus SuppliesGneisveien 30NO-2020 SkedsmokorsetNorwayPhone: +47 6400 2400

SwedenPapyrus Supplies ABP.O. Box 1004SE-431 26 MölndalSwedenPhone: +46 1051 70000

FinlandPapyrus Supplies OyKonalantie 47BFI-00390 HelsinkiFinlandPhone: + 358 400 241 452

Production: SolbergCover: MultiArt Silk 300 g/m2Insert: MultiArt Matt 150 g/m2Print: GöteborgstryckerietPress: Komori Lithrone LS840PScreen: FMInks: Toyo Ink Flash Dry mediumPrinting plates: Fuji BrilliaExposure: Screen PTR-8900 ZBlankets: Böttcher BT4800Varnish: Novaset 7401/40Ink Sequence: KCMY

© Papyrus AB, 2016. All rights reserved.

Supporting you

At Papyrus, our mission is bigger than just ensuring a convenient supply of the right products. As a service company, we cre-ate solutions that help companies and their employees to become more success-ful – even at an individual level.

We develop time-saving services that make your day-to-day work easier, offer-ing the smartest e-service in the market and the logistical skills that always ensure availability and delivery precision. We make sure that you have easy access to support and expertise whenever you need it.

Contact your local Papyrus office to find out how we can support you, your people and your business.

Head OfficePapyrus ABP.O. Box 1004SE-431 26 MölndalSwedenPhone: +46 1051 70 000Fax: +46 31 706 09 87

www.papyrus.com

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