Metsä Board Corporation Half-Year Financial Report 1 January – 30 June 2019, 1
August 2019
January–June 2019 (1–6/2018)
• Sales were EUR 964.2 million (1,011.1).
• Comparable operating result was EUR 102.8 million (128.2), or 10.7% (12.7%) of
sales. Operating result was EUR 118.3 million (122.6).
• Comparable earnings per share were EUR 0.23 (0.28), and earnings per share
were EUR 0.27 (0.27).
• Comparable return on capital employed was 11.7% (15.1%).
April–June 2019 (1–3/2019)
• Sales were EUR 477.1 million (487.1).
• Comparable operating result was EUR 41.0 million (61.8), or 8.6% (12.7%) of
sales. Operating result was EUR 46.4 million (71.9).
• Comparable earnings per share were EUR 0.09 (0.14), and earnings per share
were EUR 0.10 (0.17).
• Comparable return on capital employed was 9.7% (14.4%).
Events in April–June 2019
• Deliveries of paperboard increased slightly from the previous quarter.
• The prices of folding boxboard were stable. Changes in the sales mix had a
negative effect on the average price of white kraftliner.
• The global decline in pulp prices had a clear negative impact on the result.
• Several annual maintenance shutdowns took place at Metsä Board’s mills in
Finland during the second quarter, while there were no annual maintenance
shutdowns at Metsä Board’s mills during the first quarter.
• Metsä Board renewed its folding boxboard portfolio and announced that it would
establish an excellence centre focusing on paperboard and packaging innovations
in Äänekoski.
• Metsä Board launched pre-engineering phase for an investment to renew the
Husum pulp mill in Sweden in phases. The size of the first-phase investment
would be approximately EUR 300 million.
• Metsä Board’s associated company Metsä Fibre launched pre-engineering phases
for the construction of a new bioproduct mill in Kemi, Finland, and for the
construction of a new pine sawmill in Rauma, Finland. If these investments are
implemented, their total size would be around EUR 1.7 billion.
• Camilla Wikström, M.Sc. (Eng.), was appointed Metsä Board’s SVP, Human
Resources and a member of the Corporate Management Team as of 1 June 2019.
Events after the review period
Metsä Board announced its sustainability targets for 2030. One of the company’s
targets is to use only fossil-free energy at its own mills and in terms of
purchased energy by 2030. More information about new sustainability targets is
available at www.metsaboard.com/sustainability.
Result guidance for July–September 2019
Metsä Board’s comparable operating result for the third quarter of 2019 is
expected to weaken compared with the second quarter of 2019.
Metsä Board’s CEO Mika Joukio:
“Our comparable operating result in April–June was EUR 41 million, which was
weaker than in the first quarter, as expected. The result was burdened by the
continued weakening of the pulp market and several planned annual maintenance
shutdowns at our mills in Finland. Metsä Board’s total paperboard deliveries
increased slightly. The demand and price levels for folding boxboard remained
stable. In the Americas, we have achieved good results by optimising sales mix,
and the average price of our folding boxboard has improved significantly in this
region within a year. The weaker linerboard market, particularly in Europe, has
slightly affected the average price of our white kraftliner sales in comparison
with last year.
Our comparable operating result in January–June was EUR 103 million. Our
operating result was supported by the favourable price development of
paperboards, particularly folding boxboard, as well as a favourable foreign
exchange effect. However, our profitability was burdened by lower delivery
volumes, higher production costs and by the decline in pulp prices that started
in China in autumn 2018 and later spread into Europe. Our profitability will
continue to be burdened by lower pulp prices, at least during the coming months.
In April, we announced that we will launch a pre-engineering phase for a
significant investment to gradually renew the Husum pulp mill in Sweden. The
renewal would improve the cost-efficiency and reliability of production of the
Husum integrated mill, as well as increase electricity generation based on
renewable sources of energy. In addition, it would create favourable conditions
for the long-term development of the paperboard capacity of the Husum integrated
mill. We are now waiting for the Swedish authorities’ decision on continuing our
current environmental permit for the production of up to 750,000 tonnes of pulp
annually. We expect to make the final investment decision in the fourth quarter
of this year, at the earliest.
After the review period, we announced our new, ambitious sustainability targets
for 2030. We will continue our work towards a low-carbon society, and we aim for
completely fossil-free production, together with Metsä Group by 2030. We will
also continue our work to develop plastic-free barrier solutions for food
service use in particular.
Early into the second half of the year, there is still uncertainty concerning
the operating environment, particularly in terms of pulp and linerboards.
However, the market situation for folding boxboard is favourable, according to
many our customers as well. In addition, we have received a great deal of
positive feedback from our customers on our recently renewed and improved
folding boxboard portfolio.
Finally, I would like to take this opportunity to thank our employees, customers
and other stakeholders for the first half of 2019.”
Financial key figures
2019 2019 2018 2018 2018 2018
2019
Q2 Q1 Q2 Q1 Q1–Q2 Q1–Q2 Q1–Q4
Sales, EUR 477.1 487.1 518.7 492.3 964.2 1,011.1 1,944,1
million
EBITDA, EUR 73.6 99.3 78.5 94.3 172.9 172.7 338.2
million
comparable, 68.1 89.3 84.1 94.3 157.5 178.4 343.8
EUR million
EBITDA, % of 15.4 20.4 15.1 19.2 17.9 17.1 17.4
sales
comparable, % 14.3 18.3 16.2 19.2 16.3 17.6 17.7
of sales
Operating 46.4 71.9 53.6 69.0 118.3 122.6 246.3
result, EUR
million
comparable, 41.0 61.8 59.2 69.0 102.8 128.2 251.9
EUR million
Operating 9.7 14.8 10.3 14.0 12.3 12.1 12.7
result, % of
sales
comparable, % 8.6 12.7 11.4 14.0 10.7 12.7 13.0
of sales
Result before 41.9 67.9 47.8 61.0 109.8 108.8 224.2
taxes, EUR
million
comparable, 36.4 57.9 53.5 61.0 94.3 114.5 229.7
EUR million
Result for the 36.3 59.6 41.8 53.9 95.9 95.7 203.4
period, EUR
million
comparable, 31.9 50.2 46.2 53.9 82.2 100.1 207.8
EUR million
Earnings per 0.10 0.17 0.12 0.15 0.27 0.27 0.57
share, EUR
comparable, 0.09 0.14 0.13 0.15 0.23 0.28 0.58
EUR
Return on 11.4 18.4 14.4 18.7 14.7 16.3 16.3
equity, %
comparable, % 10.0 15.5 15.9 18.7 12.6 17.0 16.7
Return on 10.9 16.7 12.6 15.8 13.4 14.4 14.0
capital
employed,
%
comparable, % 9.7 14.4 13.9 15.8 11.7 15.1 14.4
Equity ratio 57 56 55 50 57 55 58
at the end of
period, %
Net gearing 30 23 33 29 30 33 25
ratio at the
end
of period, %
Interest 1.2 0.9 1.2 1.1 1.2 1.2 1.0
-bearing net
liabilities/com
parable
EBITDA
Shareholder’s 3.60 3.57 3.32 3.21 3.60 3.32 3.72
equity per
share at the
end of period,
EUR
Interest 380.2 296.6 388.1 334.7 380.2 388.1 334.6
-bearing net
liabilities,
EUR million
Gross 17.9 6.4 15.3 10.5 24.3 25.7 70.3
investments,
EUR
million
Net cash flow 30.7 36.4 36.3 30.2 67.1 66.6 150.9
from
operations,
EUR million
Personnel at 2,591 2,382 2,578 2,402 2,591 2,578 2,352
the end of
period
Near-term outlook
Metsä Board’s paperboard deliveries in the third quarter are expected to be
roughly at the same level as in the second quarter of the year.
The prices of folding boxboard are expected to remain stable. The market
situation for linerboards is more uncertain which may have an impact on the
average prices of Metsä Board’s kraftliner in the third quarter.
The development of the global pulp market remains uncertain over the short term.
However, the production curtailments announced by some pulp producers, as well
as annual maintenance shutdowns scheduled for the third quarter, will balance
the ratio between demand and supply. Producers’ global stock levels continue to
be high. The decrease in long-fibre pulp prices has stopped in China. In Europe,
market prices decreased throughout the first half of the year, which will have a
negative effect on the result of the second half of the year.
Annual maintenance shutdowns are scheduled for the third quarter at the Kemi
integrated mill and Metsä Fibre’s pulp mill in Rauma. The annual maintenance
shutdown at the Husum integrated mill will begin at the end of September and end
at the beginning of October, meaning that its negative impact on the result will
be divided between the third and fourth quarters.
Production costs are expected to remain stable.
Changes in exchange rates, including the impact of hedges, during the third
quarter will have a neutral effect compared with the second quarter and a
clearly positive effect compared with the corresponding period in the previous
year.
METSÄ BOARD CORPORATION
Espoo, Finland, 1 August 2019
BOARD OF DIRECTORS
Further information:
Jussi Noponen, CFO tel. +358 10 465 4913
Katri Sundström, VP, Investor Relations, tel. +358 10 462 0101
Further information will be available as of 1 p.m. on 1 August 2019.
A conference call held for investors and analysts in English will begin at 3
p.m. Conference call participants are requested to dial in and register a few
minutes earlier on the following numbers: Finland +358 9 7479 0361 Sweden +46 8
5033 6574 United Kingdom +44 330 336 9105 United States +1 323-794-2093
The conference ID is 5218128.
Metsä Board
www.metsaboard.com
Metsä Board is a leading European producer of premium fresh fibre paperboards
including folding boxboards, food service boards and white kraftliners. Our
lightweight paperboards are developed to provide better, safer and more
sustainable solutions for consumer goods as well as retail-ready and food
service applications. We work together with our customers on a global scale to
innovate solutions for better consumer experiences with less environmental
impact. The pure fresh fibres Metsä Board uses are a renewable resource,
traceable to origin in sustainably managed northern forests.
The global sales network of Metsä Board supports customers worldwide, including
brand owners, retailers, converters and merchants. In 2018, the company’s sales
totalled EUR 1.9 billion, and it has approximately 2,400 employees. Metsä Board,
part of Metsä Group, is listed on the Nasdaq Helsinki.
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