investor presentation 1q 2013 - metsä board · investor presentation 1q 2013 7.5. 2013. metsä...

Metsä GroupMetsä Board

Investor Presentation 1Q 2013

7.5. 2013

Metsä GroupMetsä Board2

Content

Investment highlights and update3 Investment Highlights4 Strategy19 Financial Targets21 1Q 2013 Results & Outlook28 Price Development30 Dividend33 Investments

Funding and debt information36 Divestments37 Funding and Debt45 Credit Facilities46 Rating History

General presentation47 General Info54 Business Portfolio62 Operations68 Deliveries70 Sourcing78 Owners80 Market Positions


Investment Highlights

‒ Strong growing core in high-quality paperboards‒ European market leader in folding boxboard and global market leader in coated white top kraftliner‒ Increased capacity in the most profitable part of the company, folding boxboard‒ Good further growth potential in paperboard

‒ Profitability of the paperboard production top class in its field

‒ Significant net debt reduction in recent years

‒ Material productivity improvement in recent years

‒ Measures to eliminate last paper business losses implemented

‒ Remaining paper and pulp units top class in their fields

3


Strategy


Consistent Strategic Direction

5

‒ Paperboard is Metsä Board’s core business‒ Good growth potential

‒ Growth through maximising capacity of existing mills

‒ Smaller but healthier paper business‒ Heavy re-engineering and successful divestments

‒ Extensive fibre know-how and pulp self-sufficiency

‒ Continuous development towards Super Productivity


Metsä Board is Heavily Focused on Paperboard. Paper Business Accounts Only About a Quarter of Total Sales

6

Sales distribution 4Q 2012

Paperboard 57%Paper 26%

Market pulp 17%

Sales distribution 2006

Paper 56%

Paperboard 18%Paper merchanting 26%


Packaging Material Business Is One of the Biggest Businesses in the World

Wood fibre based

materials36 %

Others64 %

‒ Demand for Good packaging is heavily increasing

‒ Good packaging is ‒ Ecological ‒ Safe‒ Efficient marketing and communication tool‒ Economical

Wood fibre the best raw material for Good packaging

Sources: Pira & Metsä Board

Global packaging market (~€530 Billion)

7


The Strategy of Metsä Board’s Paperboard Business Has Been Very Successful

‒ Focusing on lightweight fresh forest fibre paperboards and

the brand owner customer segment

‒ Reaching the European market leadership

‒ Securing healthy price level as the market leader

‒ Productivity improved nearly 60% since 2006

EBIT, excl. non-recurring items, % of sales

8

Metsä Board FBB and Linerboard


Metsä Board’s Main Product, Lightweight and Pure FBB, Is an Excellent Result of Successful Product Development

‒ Folding boxboard is a multilayered packaging material made of fresh forest fibre

‒ Pure and safe folding boxboard is an excellent material also for the most demanding end uses

‒ Metsä Board’s folding boxboards are up to 30 per cent lighter than other paperboards

‒ Very significant factor for environment and cost competitiveness

‒ Metsä Board’s production machinery has been renewed and capacity increased by some 20 per cent

Top know-how of paper, mechanical, energy and chemicalengineering are combined in the production of high-quality foldingboxboards

9


Metsä Board’s Lightweight Folding Boxboard has Excellent Growth Potential Globally

‒ Global cartonboard demand growth 3-4 %/a

‒ Excellent way for consumer goods companies to

improve sustainability with Metsä Board’s ecological FBB

‒ Metsä Board is further strengthening its market position

globally

‒ Metsä Board has good potential to further increase its

current FBB machines’ capacity with Smart Investments

‒ Threshold for new producers to enter high performance

FBB segment is very high

Share of ecological FBB of total cartonboard market still low in all continents

Europe 34%North America 4%

Asia 22%

10


Growth of the Folding Boxboard Business Proceeding According to Expectations

‒ FBB delivery volumes in 1Q 2013 12% higher than a year ago

‒ Efficiencies of the FBB machines have developed according to plans‒ There is still room for improvement at all mills

‒ Current products are further improved‒ Further reduction in weight and improvement of product and service portfolio

‒ New products and end use areas are actively developed

‒ Europe remains our main market but new business is actively pursued also in North America and Asia

‒ Metsä Board is able to increase its FBB capacity further with moderate investments, if market situation so requires

11

2100 22002510

0

1000

2000

3000

2010 2012 1-3 2013

Metsä Board FBB machines’ daily production

Tons+20%


High Threshold for New Producers to Enter High Performance FBB Segment

‒ High quality fresh forest fibres are a must ‒ Very difficult for newcomers to establish efficient wood sourcing and processing operations‒ Most today’s big forest companies have developed their operations for over 100 years

‒ Excellent fibre know-how combined with own state of art chemical, mechanical and BCTMP pulping capacity vital competitive factors

‒ Only a few companies in addition to Metsä Board have full fibre control

‒ Huge multi-product board-making lines not suitable for production of high performance FBB‒ No room for huge machines in the niche market. Swing machines’ challenge is productivity and quality consistency‒ Skilled people and long board-making tradition needed to meet high product quality requirements

‒ Main customers are leading consumer goods companies. To be recognized by them as a reliable high performance FBB supplier takes decades

12


Metsä Board is the World’s Leading Producer of High-Quality Coated White Top Kraftliners

‒ Fresh forest fibre linerboards are used in high-quality corrugated boxes increasingly also in consumer packaging end uses

‒ Metsä Board has strong long time presence both in Europe and North America

‒ Demand is increasing 3-4 % globally. Main growth drivers are sustainability, safety and top class quality

‒ The coating section of the Kemi linerboard mill was upgraded in 2011 and the production will focus mainly on coated grades

‒ The profitability of the Kemi linerboard mill has been improved to a very good leveland its capacity is in full use

13

Metsä Board’s white-top kraftliner deliveries

EMEA 62%

Americas 37%

Asia-Pacific 1%


Metsä Board Is Increasing Capacity to Grow Its Linerboard Business

‒ Production of light-weight fully bleached uncoated linerboards has been started at Husum mill‒ Linerboard was produced at Husum until early 2000s

‒ Husum’s new products replace partially the mill’s unprofitable paper production and complement Metsä Board’s linerboard portfolio in an excellent way

14

‒ Kemi mill is further dedicated to coated grades and part of the uncoated volumes are transferred to Husum

‒ Intensive actions ongoing to sell increasing volumes of Husum linerboards to Metsä Board’s existing and new white top kraftliner customers


Metsä Board’s Future Was Secured by Massive Re-Engineering of the Paper Operations

‒ In 2006, the successful strategic review of the company’s paper

business was started. Our paper capacity then was about 5 million t/a

‒ Closures of 2 million tonnes annual capacity

‒ Divestments worth over 2 b€ incl.‒ Graphic Papers business for Sappi

‒ Map Merchants for Sequana

‒ New Thames for DS Smith

‒ Material productivity improvement of the remaining paper units

15


Material Closures Implemented in Recent Years

Completed closures in 2007‒ Sittingbourne: coated fine paper 210 ktons/a‒ Gohrsmühle PM6 and PM7: coated fine paper 100 ktons/a‒ Wifsta: uncoated fine paper 175 ktons/a‒ Tako BM2: folding boxboard 70 ktons/a

Closures in 2008‒ Kangas PM2: coated magazine paper 100 ktons/a ‒ Lielahti: BCTMP 105 ktons/a ‒ New Thames: uncoated fine paper (divestment, grade conversion) 230 ktons/a

Closures in 2009‒ Hallein paper mill: coated fine paper 310 ktons/a ‒ Gohrsmühle: standard coated fine paper (conversion to uncoated fine paper) 250 ktons/a

Closures in 2010‒ Two machines in Reflex: Speciality paper 80 ktons/a‒ Alizay pulp mill: Chemical pulp 310 ktons/a‒ Simpele paper mill: Speciality paper 50 ktons/a

Closures in 2011‒ Äänekoski paper mill Coated fine paper 190 ktons/a

Closures in 2012‒ Gohrsmühle’s unprofitable operations: Uncoated fine paper and Speciality paper 190 ktons/a‒ Alizay paper mill: Uncoated fine paper 310 ktons/a

Total paper capacity 2 205 ktons/a Total board capacity 70 ktons/a Total pulp (incl. BCTMP) capacity 415 ktons/a

16


New Measures Taken to Improve Husum’s Profitability

- Husum is the largest unit in its field in Europe with top class productivity - Increase of pulp production to 750,000 tonnes and paper production to over 800,000 tonnes

17

- New measures to improve profitability are needed due to the difficult situation of the European paper market

- New cost savings programme implemented

- New, more profitable products are being developed in addition to current products

- Possibilities to participate the European paper industry consolidation are still being surveyed


Metsä Board’s Strategy Has Proven Its Success

‒ Metsä Board’s focuses on growing paperboard businesses and has clearly reduced its exposure in declining paper businesses

‒ Profitable growth continues in FBB and linerboard

‒ Cash flow from paper and pulp business will be maximized

‒ Good potential for further productivity improvement

As a paperboard focused company we are in good position to reach a top class profitability of our field in Europe

70

80

90

100

110

120

130

2007

2008

2009

2010

2011

2012

Delivery volumes in EuropeIndex (2007=100)

Cartonboards

Graphic papers

80

90

100

110

120

130

2007 2008 2009 2010 2011 2012

Prices in Europe

Index (2007=100)

Folding boxboard

Coated magazine paper

Uncoated fine paper

Sources: Cepi, PPPC, Foex, Pöyry Management Consulting

18


Financial Targets


Financial Targets

‒ ROCE target set at a minimum of 10% on average over the business cycle

‒ Net gearing not to exceed 100%

Minimum ROCE 10%* Maximum net gearing 100%

* Excluding non-recurring items

184%

119%137%

82%95%

126%99%90%84%83%

106%

72%69%83%

145%

99 00 01 02 03 04 05 06 07 08 09 10 11 121Q

13

Maximum level of 100%

13,5%

6,2%

2,1%1,6%0,5%0,9%2,8%

-0,5%

-5,6%

7,6%

3,4%4,8%6,8%

10,2%7,6%

99 00 01 02 03 04 05 06 07 08 09 10 11 121Q

13

Minimum target of 10%

20


1Q 2013 Results and Outlook


Key Events in 1Q 2013

‒ Folding boxboard market situation improved from previous quarter

‒ Production of the upgraded FBB machines increased as planned

‒ White top kraftliner market continued very strong and Metsä Board announced a price increase

‒ Paper delivery volumes increased from previous quarter but prices declined. Metsä Board announced a WFU price increase

‒ Pulp demand continued strong and prices increased

‒ Metsä Board divested the property and production assets of its Alizay mill site in France to Conceil Général l’Eure for EUR 22 million

22


625 24

436

32

-21

20 30

-40

-20

0

20

40

60

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

685 660 616 524 545 522 509532 535

0

200

400

600

800

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

28 16-11

-33

17 10 9-9

4

-50

-25

0

25

50

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

Sales, m€ Operating result excl. non-rec. items, m€

Result before taxes excl. non-rec. items, m€

Operating Result Improved Further in 1Q 2013

23

Result before taxes, excl. non-recurring items would have been 12 m€ in 1Q 2013 without the interest costs from early repayment of USD 121 million private placement, otherwise booked during the next 12 months


‒ Higher FBB and white top kraftliner delivery volumes improved profitability from 4Q 2012

‒ FBB deliveries are expected to somewhat increase in 2Q 2013 and the linerboard deliveries to remain at the very strong level

‒ FBB price increase announcement during 2Q 2013 under consideration

‒ Metsä Board has announced a white top kraftliner price increase of about 50 €/ton in all main markets

‒ Planned maintenance shutdowns have some negative result impact in 2Q 2013 vs. 1Q 2013

24

EBIT, excl. non-recurring items

Sales

Paperboard’s Results Improved in 1Q 2013

m€

m€293

279289274281

0

50

100

150

200

250

300

350

1Q12 2Q12 3Q12 4Q12 1Q13

32

2724

2827

0

10

20

30

40

1Q12 2Q12 3Q12 4Q12 1Q13


No Major Changes in Paper and Pulp’s Performance in 1Q 2013

‒ Lower paper prices weakened result from 4Q 2012

‒ Result was improved by seasonally higher paper delivery volume

‒ Both uncoated fine paper and coated paper deliveries expected to somewhat decrease in 2Q 2013

‒ Paper prices are exceptionally low. Metsä Board attempts currently to increase WFU prices. No improvement in coated paper pricing in sight

‒ Market pulp deliveries are forecast to be at previous quarter level. Pulp price increase is expected to continue

‒ Production of new light-weight uncoated linerboards has been started at Husum

25

EBIT, excl non-recurring items

m€

m€

Sales

217245 229 223

210

0

50

100

150

200

250

300

1Q12 2Q12 3Q12 4Q12 1Q13

-2

-12

52

0

-15

-10

-5

0

5

10

1Q12 2Q12 3Q12 4Q12 1Q13


Short-Term Profitability Outlook

26

‒ Metsä Board’s operating result, excluding non-recurring

items, is in the second quarter of 2013 expected to be

roughly in line with the first quarter of 2013


Key Focus Areas in 2013

1. Fully benefit the potential of the expanded folding boxboard capacity

2. Develop even more ecological paperboards and expand the current product range

3. Improve profitability and cash flow of the current paper mills- Husum, Kyro Paper and Gohrsmühle

4. Increase the amount of contractual market pulp customers

5. New measures towards Super Productivity and best in class supply chain


EUR / tn

Folding Boxboard Market Price in Europe2004 – 1Q 2013

28

Source: Pöyry Management Consulting

800

900

1000

1100

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


EUR / tn

Paper and Pulp Market Price in Europe1998 – 1Q 2013

Coated fine paper (100 g)Uncoated fine paper (B-copy, 80 g)

Softwood pulp NBSKCoated magazine paper LWC (60g)

Source: Foex, Reuters

EUR/USD

EUR/USD

400

500

600

700

800

900

1000

1100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130,8

0,9

1

1,1

1,2

1,3

1,4

1,5

1,6

1,7

29


Dividend


Dividend Policy

- Future dividends will take into account the need to achieve and maintain sufficient financial flexibility

- The Company remains committed to an attractive and competitive dividend

- Metsä Board's dividend policy is stable and rewarding to shareholders, and aims at paying a dividend of at least 1/3 of the Company's EPS on average over the business cycle, nonetheless taking into account the Company's net gearing target

31


0,50

1,09 1,13

1,85

0,460,30

-0,79

-1,58

-1,09

-0,83

0,530,26 0,37 0,38

0,51 0,51 0,510,25 0,00 0,00 0,000,09

-0,59

-1,21

-0,25-0,430,23 0,00 0,060,060,06

0,14 0,12 0,12

3,0%

0,0%0,0%0,0%

4,3%

0,0%1,3%1,4%

2,1%2,8%3,3%

4,1%

5,6% 5,5%6,9%

8,6%

7,2%

-2

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

€ pe

r sha

re

-8 %

-6 %

-4 %

-2 %

0 %

2 %

4 %

6 %

8 %

10 %

12 %

Div

iden

d yi

eld,

%

Earnings per share Dividend per share Dividend yield

Dividend yield calculated from annual average B-share volume weighted price

Dividend Yield

32


Investments


-1 000

-500

0

500

1 000

1 500

2 000

2 500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mill

ion

€

Disposals

Acquisitions

Capital expenditure onfixed assets

Capital Investments about 60 m€ in 2013

*Indicative level for 2013

34


Funding and Debt Information

35


Significant Divestments- EUR 3.6 billion in assets divested since 2001

2004 Metsä Tissue 5702002 Papierfabrik Albbruck 2352001 MD Papier 3002001 Noviant (19%) 41

3,645

Year Divestiture Enterprise Value

m€

2005 Savon Sellu 202005 Forestia (95%) 163

2005 Botnia (8%) 1642007 Botnia (9%) 2402007 Folding carton plants 602007 Map Merchant Group 3822008 New Thames mill 82**2008 100 000 B2 shares in PVO 802008 Graphic Papers 750

* Cash portion**Incl. pension liabilities

2009 Metsä-Botnia’s Uruguayn operations 300*2011 Hallein 34

36

2012 0.5 % stake in PVO 642012 7.3 % stake in Metsä Fibre 1382013 Alizay property and other assets 22


Financial Situation Improved Further in 1Q 2013

‒ Net debt 578 m€

‒ Net gearing 69%, equity ratio 33.3%

‒ Remaining USD 121 million private placement was prepaid in March which increased the financing costs in 1Q

‒ Metsä Fibre dividend 25 m€ was received in March

‒ Metsä Board’s cash about 140 m€ at end 1Q

‒ Average interest rate reduced to 4.1%

‒ After the reporting period in April the 500 m€ term loans were drawn and the remaining 450 m€ of the 500 m€ bond was repaid

Net Debt, m€

578

3693

2403

0

500

1000

1500

2000

2500

3000

3500

4000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

1Q13

37


Agreement on Metsä Board’s Refinancing Signed in May 2012

‒ 600 m€ term loan and revolving credit facility agreement with a syndicate of five banks and certain Finnish institutional investors

‒ This agreement was utilized to refinance the 500 m€ eurobondmatured in April 2013

‒ Facilities include a 100 m€ RCF available immediately and 500 m€term loans available from late March 2013

‒ Maturity of RCF is three years ‒ 150 m€ of term loans matures at end June 2014 and 350 m€ at end March 2016

‒ The average financing cost of the facilities calculated for the entire loan period is 6.5 %

38


Loans and Interest Rate

At the end of 1Q 2013

‒ Average maturity of long term loans 0,8 years

‒ Average interest rate of loans (including derivatives) 4,1 %

‒ Interest rate maturity of loans (including derivatives) 12,3 months

‒ Of the loans about 75 per cent was subject to variable interest rates and 25 per cent to

fixed interest rates

39


Total 712 m€ 31.3.2013

Long-Term Interest Bearing Liabilities

63 %

8 %4 %

0 %

25 %

BondsPension premium loansLoans from financial institutionsFinance leasesOther interest bearing liabilities

40


Total 313 m€ 31.3.2013

Short-Term Interest Bearing Liabilities

1 %

99 %

Metsä GroupShort-term bank loans and other

41


Interest Bearing Net Liabilities 31.3.2013

‒ Long-term 712

‒ Short-term 313

Total interest bearing liabilities 1 025

‒ Liquidity and other interest bearing receivables 447

Interest bearing net liabilities 578

42

m€


Long-term Interest Bearing Liabilities and CommittedUndrawn Credit Facilities 31.3.2013

500

2972

22 21 21 20 28

150

100

350

20

0

100

200

300

400

500

600

2013 2014 2015 2016 2017 2018 2019 >2 019

Long-term interest bearing liabilitiesCommitted undrawn credit facilities

m€

43

After the reporting period in April the 500 m€ term loans were drawn and the remaining 450 m€ of the 500 m€ bond was repaid


Liquidity

Committed credit facilitiesLiquid fundsm€

0

100

200

300

400

500

600

1Q12 2Q12 3Q12 4Q12 1Q12

44


Debt Programs

45

The following table sets forth the significant debt securities issued and outstanding of Metsä Board as at March 31, 2013

Average

Long-term borrowings Total amount Outstanding Interest Rate (1) Maturity

USD 350 million Private Note Issue USD 350 USD 0 – –EUR 500 million Bond Issue EUR 500 EUR 500 6,3 % 2013Global Medium-Term Note Program EUR 1 500 EUR 0 – –EUR 66 million bilateral loans EUR 54 EUR 54 6,3 % 2013-2015EUR 27 million finance leases EUR 26 EUR 26 2,2 % 2013–2020EUR 230 million pension loans EUR 230 EUR 181 4,8 % 2013–2020

Short-term funding programmes

EUR 350 million domestic CP-program EUR 350 EUR 0 – –EUR 150 milj. Belgian CP-program EUR 150 EUR 0 – –

Average interest rate of all Metsä Board Group interest bearing liabilities including interest rate derivatives per 31.3.2013 is 4,1 %.

The following table sets forth Metsä Board´s principal long-term liquidity reserves as at March 31, 2013:

Average Liquidity reserves Total amount Outstanding Interest Rate (1) Maturity

(EUR in millions)Revolving Credit Facility 2012 EUR 100 EUR 0 – 2015Bridge Financing Faciility 2012 EUR 150 EUR 0 – 2014Term Loan Facility 2012 EUR 350 EUR 0 – 2016Pension loan facilities EUR 230 EUR 181 4,8 % -

(1) The average interest rates take into account outstanding interest rate swaps and amortised arrangement fees.

(currency in millions) After the reporting period in April the 500 m€ term loans were drawn and the remaining 450 m€ of the 500 m€ bond was repaid


Ratings’ History

2000S&P: Short term ratings lowered to A3, Long term ratings placed to credit watch negativeMoody’s: Long and short term ratings outlook changed from stable to negative

2001S&P: Long term ratings lowered to BBB-,stable outlookMoody’s: Long and short term ratings lowered to Baa3/P3, negative outlook

2003S&P: Downgrade to BB+, stable outlookMoody’s: Downgrade to Ba1, negative outlook

2004S&P: Outlook changed from stable to negative, ratings affirmedMoody’s: Downgrade to Ba2, stable outlook

2005S&P: Downgrade to BB, stable outlookMoody’s: Outlook changed from stable to negative, ratings affirmed

2006S&P: Downgrade to BB-, negative outlookMoody’s: Downgrade to Ba3, negative outlookMoody’s: Downgrade to B2, negative outlookS&P: Downgrade to B+, negative outlook

2007Moody’s: Downgrade to B3, negative outlookS&P: Downgrade to B, negative outlookS&P: Downgrade to B-, stable outlook

2008S&P: Outlook to negative

2009S&P: Downgrade to CCC+, negative outlook Moody’s: Downgrade to Caa1, outlook negative

2010S&P: Outlook to stableMoody’s: Outlook to stableS&P: Upgrade to B-, stable outlookMoody’s: Upgrade to B3, outlook to positive

2011S&P: Outlook to positiveS&P: Outlook to stableMoody’s: Outlook to stable

2012Moody’s: Outlook to positive

2013S&P: Outlook to positive

46


General Presentation


Metsä Board in Brief

‒ Annual sales about 2.2 b€

‒ Leading European paperboard company

‒ Major uncoated fine and printing paper and market pulp supplier

‒ Valuable holdings in Metsä Fibre and Pohjolan Voima

‒ Global sales and customer service network in 70 countries and nine production units in Finland, Sweden and Germany

‒ Listed on the NASDAQ OMX Helsinki Ltd and a part of Metsä Group, one of the largest forest industry groups in Europe

48


Offering for Consumer Packaging, Communications and Advertising

‒ Cartonboards and white-top kraftliners for packaging beautycare, healthcare, cigarettes, food, consumer durables etc.

‒ Graphic boards e.g. for book covers, postcards, greeting cards, CD or DVD covers

‒ Office papers from high-volume copying and printing to high-quality color presentations

‒ Speciality papers for advertising and corporate materials, creative designs, labeling and for wallcoveringindustry

49


Customers

Office product resellers

Publishers

Brand owners

Printers and converters

Advertising and design agencies

Office paper users

Paper merchants

50


17 %

32 %

12 %

9 %

12 %

6 %

9 %3 %

Paper PulpPaperboard PackagingTissue Mechanical Forest ProductsMerchanting Chemicals

53 %

32 %

15 %

Focus on Core Businesses

1995 Sales€2.3 billion

2012 Sales€2.1 billion

8 Businesses 3 Businesses

51


Acquisitions

Divestments

Biberist Paper Mill

Simpele Mill UK Paper

Modo Paper

Zanders

ChemicalsBusiness

Botnia Wood

CorrugatedPackaging

MD Papier Metsä Tissue

Albbruck

Metsä Board Restructuring Story

SavonSellu

Forestia

Kemiart Liners (53 %)

8% in Botnia

PSM

9% in Botnia

Cartonplants

Map

100 000 B2 shares

in PVO

New Thames MB

Uruguay

Graphic Papers

Part of Reflex

Halleinmill

1997 20001998 1999 2001 2002 2003 2004 2005 2006 2007 20092008 2010 2011

52

Rest of Reflex

0.5% in PVO

2012

7.3 % in Metsä Fibre


Annual Sales Development

210824852605

2432

3236

4440

56245241

54606044

65646923

5898

33193014

2313

4044

0

1000

2000

3000

4000

5000

6000

7000

8000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

EUR, million

53


Business Portfolio

54


Business Portfolio

Paperboard Paper and Pulp

55


Main Businesses of Paperboard Business Area

‒ European market leader and global quality leader in folding boxboard (FBB)‒ Mainly for consumer packaging‒ Strong demand growth‒ Annual sales over 800 m€‒ Good profitability

‒ Global market and quality leader in white top kraftliner‒ For heavier consumer goods and high quality transport boxes‒ Strong demand growth ‒ Annual sales about 300 m€‒ Good profitability


‒ Husum mill is the largest fine paper and pulp integrate in Europe‒ Major producer of uncoated fine paper and coated papers‒ Also linerboard production started‒ One of the largest pulp mills in Europe with 750 000 t/a capacity‒ Annual sales about 650 m€‒ Good cash flow generator

‒ Kaskinen is one of the most modern high yield pulp (BCTMP) plants in the world

‒ Start up in 2005‒ Capacity 300 000 t/a‒ Annual sales about 100 m€‒ Improving cash flow

Main Businesses of Paper and Pulp Business Area


Paperboard business area

‒ Fibre-based high value-added packaging solutions for global brand owners in beautycare, healthcare, cigarette, food and consumer electronics industries as well as for graphical end-uses

‒ Relatively high earnings stability

‒ High segment consolidation

‒ Competitive folding boxboard mills with end use specified production

Capacity Share (%)

8 %

9 %

12 %

24 %

35 %

0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

Careo

IP

Mayr-Melnhoff

Stora Enso

Metsä Board

No. 1 Folding Boxboard Producer in Europe

Source: Pöyry Management Consulting Oy58


Paper and Pulp Business Area

Capacity Share (%)

4 %

8 %

10 %

12 %

12 %

14 %

0 % 5 % 10 % 15 %

Metsä Board

International Paper

UPM-Kymmene

Mondi

Stora Enso

Portucel

No. 6 Uncoated Fine Paper Producer in Europe

- High quality uncoated fine papers for printing and photocopying as well as for forms, envelopes, manuals and communication purposes. Additionally, chemical pulp and BCTMP for external customers

- Diversified customer base, e.g. merchants, retail chains, office equipment manufacturers and corporations

- Leading European office paper brands like DataCopy and SAVE!

Source: Pöyry Management Consulting Oy59


Business Area Performance – Comparison to Previous Quarter

Sales, m€

1Q 20134Q 2012

60

279

210

293

217

0

50

100

150

200

250

300

350


28

0

32

‐2

‐10

0

10

20

30

40


Operating result, excluding non-recurring items, m€


Business Area Performance – Comparison to Previous Year

Sales, m€

1Q 20131Q 2012

61

281

245

293

217

0

50

100

150

200

250

300

350


27

‐12

32

‐2

‐20

‐10

0

10

20

30

40

50


Operating result, excluding non-recurring items, m€


Operations


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Paper Board Pulp and BCTMP

1000 tons/a

Production Capacity

63


Production Locations

Paperboard:• Simpele• Äänekoski• Kyro• Tako • Kemi• Gohrsmühle• Joutseno

Paper and Pulp: • Husum• Kaskinen

Husum

Gohrsmühle

ÄänekoskiSimpele

Joutseno

Kemi

TakoKyro

Kaskinen

64


Board and Paper Capacity by Grade(1000 t/a)

65

Production Capacities (1000 t)

BOARD MILLS

Board Mill Country Machines FoldingBoxboard Liner Total

Tampere Finland 2 205 205Kyröskoski Finland 1 190 190Äänekoski Finland 1 240 240Simpele Finland 1 300 300Kemi Finland 1 375 375

Total 6 935 375 1310

PAPER MILLS

Paper Mill Country Machines Coated Coated UncoatedMagazine Fine Fine Specialty

Paper Paper Paper Paper Total

Kyröskoski Finland 1 105 105Bergisch Gladbach Germany 2 50 50Husum Sweden 3 370 440 810

Total 6 370 0 440 155 965


Pulp Capacity

(1000 t/a)

66

PULP MILLS

Pulp Mill Country ChemicalPulp BCTMP Total

Husum Sweden 750 750Joutseno Finland 280 280Kaskinen Finland 300 300

Total 750 580 1330

METSÄ FIBRE *

Mill Country ChemicalPulp Total

Äänekoski Finland 500 500Kemi Finland 590 590Rauma Finland 630 630Joutseno Finland 650 650

Total 2370 2370

* Metsä Board's share is 24.9% of the capacity


Personnel Development

32393279407045384903

6546

9508

1412515154

16490

2107022237

17351

20372

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13

67


Deliveries


Uncoated fine paperCartonboard

Annual Deliveries*

25 %

5 %

18 %

52 %

Western- Europe Eastern- Europe Americas Asia & Pacific

10 %

78 %

10 %2 %

* Indicative numbers69


Sourcing


Personnel 16 %

Other fixed18 %

Delivery costs14 %

Wood21 %

Chemicals, pigments and

fillers15 %

Other variables

3 % Energy13 %

Cost Structure 2012* (total annual costs in industrial operations ~ EUR 1,6 Billion)

Fixed costs

Variable costs

* Percentage of annual costs in industrial operations

71


Electricity Sourcing 2012 (total 2 742 GWh)

Through PVO shareholding

30 %

Outsourced generation

2 %

Own generation23 %

Purchased energy45 %

72


Fuels Used 2012 (total 12,6 TWh)

Wood-based56 %

Nuclear power23 %

Natural gas8 %

Oil3 % Peat

1 %Coal4 %

Hydro5 %

73


Wood Sourcing by Country in 2012

1 000 m3

Sweden 2102

Finland 1193

Baltic countries 1075

Russia 433

Norway 3

Total 4806

74


Development of Softwood PulpwoodCost at Mill, Wood for Chemical Pulping

1980 – 2Q 2012

Source: Pöyry Management Consulting Oy

75

EUR/m³sob


Development of Softwood PulpwoodCost at Mill, Wood for Mechanical Pulping

1980 – 2Q 2012


76

EUR/m³sob


Development of Hardwood PulpwoodCost at Mill, Wood for Chemical Pulping

1980 – 2Q 2012

Source: PöyrySource: Pöyry Management Consulting Oy

77

EUR/m³sob


Owners

78


Ownership Structure 31.3.2013Shares Votes

Source: Euroland79


Market Position


0 100 200 300 400 500 600 700 800 900 1000

Others

Holmen

Careo

IP

Mayr-Melnhof

Stora Enso

Metsä Board

Folding Boxboard Capacities in Europe BIG-5 = 84% of total

Capacity: tons/year (thousand)

35%

24%

12%

9%

8%

7%

5%


81


0 500 1000 1500 2000 2500 3000 3500

Others

Guipuzcoana de Zicuñaga

Arctic Paper

Metsä Board

International Paper

UPM

Mondi

Stora Enso

Portucel

Uncoated Fine Paper Capacities in EuropeBIG-5 = 56% of total

14%

12%

12%

10%

8%

4%

3%

3%

29%

Capacity: tons/year (thousand)


82


Thank You!www.metsaboard.com

Juha LaineHead of IR

+358 10 [email protected]

investor presentation 1q 2013 - metsä board · investor presentation 1q 2013 7.5. 2013. metsä...

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