Half Year Financial Report 1 January–30 June 2017, 3 August 2017 at 12:00 noon
January–June 2017 (1–6/2016)
• Sales were EUR 918.7 million (858.5).
• Comparable operating result was EUR 88.7 million (70.8), or 9.7 per cent (8.2) of sales. Operating result was EUR 92.1 million (67.2).
• Comparable earnings per share were EUR 0.19 (0.14), and earnings per share were EUR 0.19 (0.13).
• Comparable return on capital employed was 10.3 per cent (8.4).
April–June 2017 (1–3/2017)
• Sales were EUR 474.2 million (444.5).
• Comparable operating result was EUR 43.5 million (45.2), or 9.2 per cent (10.2) of sales. Operating result was EUR 46.9 million (45.2).
• Comparable earnings per share were EUR 0.09 (0.10), and earnings per share were EUR 0.09 (0.10).
• Comparable return on capital employed was 10.3 per cent (10.6).
Events in April–June 2017
• Total paperboard deliveries grew by 11 per cent from the previous quarter. The average price of folding boxboard was burdened by the geographic sales mix of the Husum mill.
• The new extrusion coating line at Husum, Sweden, started up in April. The line serves the global food service markets, and its annual capacity is 100,000 tonnes.
• In May, Metsä Board renewed its key marketing messages, launched its new product and service portfolio, and harmonised the product names of paperboards.
• The company updated its long-term financial targets and decided on a new dividend policy, effective as of 1 June 2017.
• Metsä Board announced changes to its Corporate Management Team. As of 6 June 2017, Metsä Board’s Corporate Management Team consists of Mika Joukio (CEO), Jussi Noponen (CFO), Sari Pajari (SVP, Marketing and Sales), Harri Pihlajaniemi (SVP, Production, as of 6 September 2017 at the latest), Ari Kiviranta (SVP, Development) and Susanna Tainio (SVP, Human Resources).
Result guidance for July–September 2017
Metsä Board’s comparable operating result in the third quarter of 2017 is expected to improve slightly compared to the second quarter of 2017.
Metsä Board’s CEO Mika Joukio:
“Our paperboard deliveries were once again at a record high, and our market pulp operations developed positively in the second quarter of the year. We had several planned maintenance shutdowns in April–June at the Finnish mills, which we didn’t have during the first quarter. The market situation of fresh fibre linerboards was good, and the price level remained stable. The average price of our folding boxboard declined due to the geographic sales mix of the Husum mill. Global demand for high-quality fresh fibre paperboard is strong, particularly in the Americas, which is an important market area for us. I believe that North America’s share of our paperboard sales will grow clearly during the second half of the year.
At the beginning of June, we updated our long-term financial targets. One of these targets is to grow profitably, exceeding the market growth rate. In the first half of the year, Metsä Board’s paperboard deliveries grew by 18 per cent compared to the corresponding period last year. In addition to growth, we are focusing on improving profitability, more efficient use of capital, and growing shareholder value. We still have a lot of potential at Husum to improve the profitability of our paperboards by optimising the product and sales mix.
As part of our business development efforts, we renewed our key marketing messages, and unified our product and service portfolio. This strengthens Metsä Board’s market position as a company focused on premium paperboards. The ‘Better with Less’ concept reflects our desire to promote packaging solutions that create better consumer experiences with less environmental impact.”
FINANCIAL KEY FIGURES
| 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | 2016 | |
| Q2 | Q1 | Q2 | Q1 | Q1–Q2 | Q1–Q2 | Q1–Q4 | |
| Sales, EUR million | 474.2 | 444.5 | 422.9 | 435.6 | 918.7 | 858.5 | 1,720.3 |
| EBITDA, EUR million | 67.0 | 68.8 | 59.6 | 55.5 | 135.7 | 115.2 | 234.6 |
| comparable, EUR million | 67.5 | 68.8 | 60.7 | 57.8 | 136.2 | 118.6 | 231.1 |
| EBITDA, % of sales | 14.1 | 15.5 | 14.1 | 12.7 | 14.8 | 13.4 | 13.6 |
| comparable, % of sales | 14.2 | 15.5 | 14.4 | 13.3 | 14.8 | 13.8 | 13.4 |
| Operating result, EUR million | 46.9 | 45.2 | 34.5 | 32.7 | 92.1 | 67.2 | 132.3 |
| comparable, EUR million | 43.5 | 45.2 | 35.8 | 35.0 | 88.7 | 70.8 | 137.5 |
| Operating result, % of sales | 9.9 | 10.2 | 8.2 | 7.5 | 10.0 | 7.8 | 7.7 |
| comparable, % of sales | 9.2 | 10.2 | 8.5 | 8.0 | 9.7 | 8.2 | 8.0 |
| Result before taxes, EUR million | 40.3 | 39.9 | 25.5 | 27.7 | 80.2 | 53.3 | 101.6 |
| comparable, EUR million | 36.9 | 39.9 | 26.8 | 30.0 | 76.8 | 56.8 | 106.8 |
| Result for the period, EUR million | 35.0 | 34.2 | 23.2 | 23.9 | 69.1 | 47.1 | 90.4 |
| comparable, EUR million | 32.2 | 34.2 | 24.6 | 25.7 | 66.4 | 50.3 | 93.6 |
| Result per share, EUR | 0.09 | 0.10 | 0.06 | 0.07 | 0.19 | 0.13 | 0.25 |
| comparable, EUR | 0.09 | 0.10 | 0.07 | 0.07 | 0.19 | 0.14 | 0.26 |
| Return on equity, % | 13.2 | 13.1 | 9.4 | 9.5 | 12.9 | 9.3 | 8.7 |
| comparable, % | 12.2 | 13.1 | 9.9 | 10.2 | 12.4 | 9.9 | 9.0 |
| Return on capital employed, % | 11.1 | 10.6 | 8.2 | 7.8 | 10.7 | 8.0 | 7.8 |
| comparable, % | 10.3 | 10.6 | 8.5 | 8.3 | 10.3 | 8.4 | 8.1 |
| Equity ratio at end of period, % | 51 | 47 | 47 | 44 | 51 | 47 | 48 |
| Net gearing ratio at end of period, % | 45 | 44 | 54 | 42 | 45 | 54 | 44 |
| Interest-bearing net liabilities/EBITDA1) | 2.0 | 1.9 | 2.1 | 1.5 | 2.0 | 2.1 | 2.0 |
| Shareholders' equity per share at end of period, EUR | 3.06 | 2.90 | 2.81 | 2.77 | 3.06 | 2.81 | 2.96 |
| Interest-bearing net liabilities, EUR million | 495.2 | 457.8 | 541.4 | 412.3 | 495.2 | 541.4 | 463.8 |
| Gross investments, EUR million | 12.4 | 19.0 | 48.3 | 54.3 | 31.4 | 102.6 | 162.4 |
| Net cash flow from operating activities, EUR million | 37.1 | 25.6 | -22.2 | -22.3 | 62.7 | -44.5 | 77.0 |
| Personnel at the end of period | 2,581 | 2,450 | 2,762 | 2,573 | 2,581 | 2,762 | 2,466 |
Near-term outlook
Demand for high-quality consumer packaging paperboard made from fresh fibre is expected to continue to grow in market areas important for Metsä Board. The increases in capacity by European producers of folding boxboard have not had a negative effect on price development. Several producers of white fresh fibre linerboards have announced price increases in Europe and North America during the current year. Global demand and supply for long-fibre and short-fibre pulp is expected to remain stable.
Metsä Board’s paperboard deliveries grew strongly during the first half of the year. Delivery volumes in July–September are expected to remain roughly at the level of the second quarter. The company aims to improve the geographic sales mix of Husum’s folding boxboard and to increase the share of North American sales, in particular.
The shutdown of the Kemi integrated mill will take place in the third quarter of the year. The production costs of paperboards in July–September are expected to remain at the level of the previous quarter.
The start-up phase of Metsä Fibre’s new bioproduct mill is expected to have only a slight negative effect on Metsä Board’s result for July–September.
METSÄ BOARD CORPORATION
Espoo, Finland, 3 August 2017
BOARD OF DIRECTORS
Further information:
Jussi Noponen, CFO, tel. +358 10 465 4913
Katri Sundström, Hed of Investor Relations, tel. +358 400 976 333
More information will be available as of 1 p.m. on 3 August 2017. 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 0404
Sweden +46 8 5065 3942
United Kingdom +44 330 336 9411
United States +1 719-457-1036
The conference ID is 8596772.
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 2016, the company’s sales totalled EUR 1.7 billion, and it has approximately 2,500 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.
