Metsä Board Corporation Stock exchange release Interim report 24 October 2024
at 12:00 noon EET
January-September 2024 (compared to Q1-Q3/2023)
· Sales were EUR 1,492.6 million (1,519.2).
· The comparable operating result was EUR 72.6 million (121.5), or 4.9% of
sales (8.0). Operating result was EUR 64.0 million (121.0).
· Comparable earnings per share were EUR 0.11 (0.26), and earnings per share
were EUR 0.09 (0.26).
· Comparable return on capital employed was 4.3 % (6.7).
· Net cash flow from operations was EUR -11.9 million (218.6).
July-September 2024 (compared to Q3/2023)
· Sales were EUR 499.0 million (479.0).
· The comparable operating result was EUR 41.9 million (5.5), or 8.4% (1.1) of
sales. Operating result was EUR 41.7 million (3.1).
· Comparable earnings per share were EUR 0.08 (0.02), and earnings per share
were EUR 0.08 (0.01).
· Comparable return on capital employed was 7.3% (1.3).
· Net cash flow from operations was EUR 4.6 million (76.6).
Events in July-September 2024
The delivery volumes of Metsä Board's fresh fibre paperboards increased slightly
from the previous quarter. Average prices remained stable.
In Europe, the pulp market situation remained stable. In China, pulp deliveries
decreased significantly. Metsä Board's associated company Metsä Fibre curtailed
softwood pulp production to match the demand situation.
Metsä Board's comparable operating result for July-September 2024 includes EUR
23 million in insurance compensation related to the gas explosion that occurred
in March at the evaporation plant of Metsä Fibre's bioproduct mill. The
compensation includes the impact of Metsä Fibre's share of the result. The
repair work caused by the gas explosion was completed on 20 June 2024, after
which the mill's production returned to its ramp-up curve. Negotiations with the
insurance consortium to com insurance compensation.
Metsä Board adopted Metsä Group's updated Green Finance Framework. The previous
framework was from 2019.
Events after review period
Laura Remes has been appointed SVP, Business Development and a member of the
Corporate Management Team. Remes will start in her role at a time to be
specified later, and will report to CEO Mika Joukio (Stock exchange release 4
October 2024).
Metsä Board renews its' dividend policy. The new dividend policy is: Metsä
Board's target is to distribute a dividend of at least half of the result for
the financial period over time, taking into account the company's future
investment and development needs. The previous dividend policy was: Metsä
Board's target is to distribute a dividend of at least 50% of the result for the
financial period. The new dividend policy supports Metsä Board's strategy to
grow in fibre-based packaging materials and renew its industrial operations
(Stock exchange release 24 October 2024).
Near-term outlook
The overall demand for consumer products is determined by the development of
consumers' purchasing power and their general purchasing behaviour. For the rest
of the year, demand for fresh fibre paperboards is expected to be affected by
the seasonal slowdown in December.
Metsä Board's paperboard delivery volumes are expected to decrease slightly in
October-December compared to the previous quarter (Q3/2024: 387,000 tonnes).
Sales prices in local currencies are expected to remain stable.
Total costs excluding pulp costs are estimated to increase. Increases are
expected especially in wood costs and fixed costs. There are less annual
maintenance shutdowns at the mills in October-December than in the previous
quarter.
Average sales prices of market pulp decreased in October. In the fourth quarter,
demand for market pulp is expected to remain stable in Europe and North America.
In China, demand has returned to normal after a very quiet third quarter. The
demand and price situation for sawn timber is expected to remain at the current
level.
In October-December 2024, exchange rate fluctuations, including the impact of
hedges, will have a slightly negative impact on the operating result compared to
July-September 2024 and a slightly negative impact compared to October-December
2023.
Regarding the gas explosion at Metsä Fibre's bioproduct mill, negotiations
continue with the insurance consortium to compensate the remaining estimated
financial losses. Metsä Board does not have an estimate of the timing or extent
of any future insurance compensation.
Result guidance October-December 2024
Metsä Board's comparable operating result in October-December 2024 is expected
to be weaker than in July-September 2024.
The result guidance does not take into account the insurance compensation from
the gas explosion at Metsä Fibre's bioproduct mill included in the comparable
operating result for July-September, nor possible future insurance compensation
for October-December. Metsä Board's comparable operating result for
July-September 2024 was EUR 42 million, including EUR 23 million in insurance
compensation.
Metsä Board's CEO Mika Joukio:
”In 2024, demand for fresh fibre paperboards has clearly improved from last
year's record-low level, although demand growth has been somewhat slower than
expected. At the beginning of the year, demand was boosted by restocking in the
value chain, which levelled out towards the end of the first half. In
July-September, the demand and price situation for paperboards was similar to
the previous quarter. Due to higher living costs, consumers' purchasing
behaviour remained relatively cautious, and consumption is more focused on
services than on products.
Metsä Board's first half was overshadowed by the political strikes in Finland
and the gas explosion at Metsä Fibre's Kemi bioproduct mill. These caused us
large production and sales losses and significant additional costs. We expect
the negative impact on the operating result to total EUR 65 million, including
the impact of Metsä Fibre's share of the result. The July-September result
includes EUR 23 million in insurance compensation related to the gas explosion
in Kemi. Negotiations with the insurance consortium are still ongoing.
In the third quarter, our paperboard deliveries increased by 14% year-on-year,
totalling 388,000 tonnes (Q3/2023: 340,000). In the review period, paperboard
deliveries amounted to 1,130,000 tonnes, which was 5% higher than in the
comparison period (Q1-Q3/2023: 1,073,000). Despite the increases, delivery
volumes still remained clearly below capacity levels.
In January-September, sales amounted to EUR 1,493 million, and the comparable
operating result was EUR 73 million (Q1-Q3/2023: 1,519; 121). Sales and the
comparable operating result were weakened by lower sales prices of folding
boxboard. Meanwhile, market pulp prices (PIX) have increased this year
especially in Europe, where improved activity of paper and paperboard producers,
especially in the first half of the year, supported pulp demand. In China,
demand has been much weaker, and our market pulp deliveries to China have been
low in recent months.
Production costs have been mainly decreasing in the review period, excluding
wood costs, which increased by 7% from the comparison period. Our wood supply is
handled by Metsä Group, which is Finland's largest buyer of wood. In Sweden, we
have a long-term wood supply agreement with Norra Skog, a minority owner of the
Husum pulp mill. The availability of wood is therefore well secured for us.
Our strategy is to grow in fibre-based packaging materials and renew our
industrial operations. Earlier this year, we launched the first phase of the
Simpele investment programme: the renewal of the mill's paperboard machine. We
are also planning other development investments to improve the competitiveness
of our current mills and products and to support our goal of entirely fossil
free production.
After the review period, we revised our dividend policy to better reflect our
future investment and development needs. Dividends are still an essential part
of our capital allocation, and our aim is to continue to pay dividends of at
least half of the result for the financial period over time.”
Key figures
2024 2023 2024 2023 2023
Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Sales, EUR million 499.0 479.0 1,492.6 1,519.2 1,941.9
EBITDA, EUR million 66.0 21.1 149.4 189.5 214.6
comparable, EUR million 66.3 23.5 150.4 189.9 216.0
EBITDA, % of sales 13.2 4.4 10.0 12.5 11.1
comparable, % of sales 13.3 4.9 10.1 12.5 11.1
Operating result, EUR million 41.7 3.1 64.0 121.0 120.8
comparable, EUR million 41.9 5.5 72.6 121.5 122.2
Operating result, % of sales 8.3 0.7 4.3 8.0 6.2
comparable, % of sales 8.4 1.1 4.9 8.0 6.3
Result before taxes, EUR million 39.5 4.3 57.1 119.5 120.9
comparable, EUR million 39.8 6.7 65.7 120.3 122.6
Result for the period, EUR million 32.2 2.8 41.9 100.8 101.6
comparable, EUR million 32.5 5.2 49.0 102.1 103.8
Earnings per share, EUR 0.08 0.01 0.09 0.26 0.27
comparable, EUR 0.08 0.02 0.11 0.26 0.27
Return on equity, % 6.7 0.5 2.8 6.3 4.7
comparable, % 6.7 1.0 3.3 6.4 4.8
Return on capital employed, % 7.3 0.9 3.9 6.7 5.0
comparable, % 7.3 1.3 4.3 6.7 5.1
Equity ratio at the end of the 65 68 65 68 67
period, %
Net gearing at the end of the 18 11 18 11 7
period, %
Interest-bearing net 2.0 0.7 2.0 0.7 0.7
liabilities/comparable EBITDA, 12
months rolling
Shareholders' equity per share at 5.04 5.25 5.04 5.25 5.35
the end of the period, EUR
Interest-bearing net liabilities at 347.7 219.6 347.7 219.6 144.0
the end of the period, EUR million
Total investment, EUR million 67.1 49.3 120.5 156.8 228.7
Net cash flow from operations, EUR 4.6 76.6 -11.9 218.6 342.8
million
Personnel at the end of the period 2,353 2,310 2,353 2,310 2,240
METSÄ BOARD CORPORATION
Further information:
Henri Sederholm, CFO, tel. +358 10 465 4913
Katri Sundström, VP, Investor Relations, tel. +358 10 462 0101
The Interim report and related presentation material are available on the
company's website at https://www.metsagroup.com/metsaboard/investors/.
A webcast and a conference call for analysts and investors in English will be
held on 24 October at 3:00 p.m. EET. CEO Mika Joukio and CFO Henri Sederholm
will present the results. The webcast and conference call can be followed online
on the company's website at https://metsaboard.videosync.fi/q3-2024.
Participation in the conference call requires registration through the following
link: https://palvelu.flik.fi/teleconference/?id=50047149. After registering,
the participant will be provided with a phone number, a User ID and a Conference
ID to access the conference. By participating in the conference call, the
participant agrees that personal information such as name and company name can
be collected.
The webcast presentation and conference call will be recorded and archived on
the company's website, where it can be viewed afterwards at:
https://www.metsagroup.com/metsaboard/investors/reports-and
-presentations/webcasts-and-conference-calls/.
Financial reporting in 2025
Financial Statements Bulletin for 2024: 6 February 2025
Interim Report for January-March 2025: 29 April 2025
Half-year financial report for January-July 2025: 31 July 2025
Interim Report for January-September 2025: 23 October 2025
The Annual Review 2024 will be published in the week beginning 17 February 2025
(week 8/2025)
Metsä Board's Annual General Meeting is planned to be held on 20 March 2025. The
Board of Directors will summon the meeting at a later date.
Metsä Board
metsagroup.com/metsaboard (http://www.metsagroup.com/metsaboard/)
Metsä Board is a producer of lightweight and high-quality folding boxboards,
food service boards and white kraftliners. The pure fresh fibres we use in our
products are a safe, renewable and recyclable resource, that can be traced back
to northern forests. We aim to have completely fossil free mills and raw
materials by the end of 2030. We promote a culture of diversity, equality and
inclusion.
Metsä Board is listed on the Nasdaq Helsinki. In 2023 our sales totalled EUR 1.9
billion, and we have around 2,300 employees. Metsä Board is part of Metsä Group,
whose parent company Metsäliitto Cooperative is owned by more than 90,000
Finnish forest owners. The sales of the whole Metsä Group were EUR 6.1 billion.
Follow Metsä Board: LinkedIn (https://www.linkedin.com/company/metsa
-board/) X (https://twitter.com/i/flow/login?redirect_after_login=%2FMetsaBoard
) Instagram (https://www.instagram.com/metsaboard/?hl=en)
YouTube (https://www.youtube.com/playlist?list=PLF6CD152EF0DA1E61)