Metsä Board and other IR... · 2012 2013 2014 2015 2016 Nordea Forest Seminar ... Metsä...

Nordea Forest Products and Paper Seminar, Helsinki

16.5.2017

Metsä BoardCEO Mika Joukio

Metsä Board – A leading European producer of

premium fresh fibre paperboards

• Market leader in folding boxboard in Europe

and global market leader in coated white

fresh fibre linerboard

• Customers are brand owners, converters,

corrugated box manufacturers and

merchants

• Employees in 23 countries and global sales

to over 100 countries

• Strong fibre know-how and self-sufficiency

in pulp

SalesEUR 1.7bn

2,500employees

EBIT EUR

137mill.

8%ROCE

8 production

sites

Paperboarddeliveries1.6 mill.tonnes

2Figures are from 2016

Nordea Forest Seminar

2017

Sales, M€

3

Comparable EBIT, M€and EBIT-%

1,7

20

2,1

08

2,0

19

2,0

08

2,0

08

0

500

1000

1500

2000

2012 2013 2014 2015 2016

137

74

104

137

180

3.5

5.2

6.8

9.0

8.0

0

2

4

6

8

10

0

40

80

120

160

2012 2013 2014 2015 2016

Steady sales and improved profitability Husum ramp-up impacted on 2016 profitability

Dividend,€ and dividend pay-out ratio, %

0.1

9

0.0

6

0.0

9

0.1

2

0.1

7

11%

47%

57%

44%

76%

0%

20%

40%

60%

80%

0

0.05

0.1

0.15

0.2

2012 2013 2014 2015 2016


2017

4

Metsä Board has a wide customer base Brand owner sales represents roughly 50% in folding boxboard,

corrugated box manufacturers is the biggest customer segment in white linerboards

FOLDING BOXBOARD WHITE LINERBOARDS

CONVERTERSCORRUGATED BOX

MANUFACTURERS

MERCHANTS

BRAND OWNERS


2017

5

Various end-uses from high-quality paperboardsFolding boxboards, white fresh fibre linerboards and fully bleached linerboards

Consumer goods Retail-readyFood service


2017

• Lightweighting

– Metsä Board’s folding boxboard can be even 30% lighter than

competing grades (eg. SBS, WLC)

• Purity and safety

– Important especially in food packaging

• Sustainability

– Fresh fibres are recyclable and renewable raw material. Metsä

Board’s wood raw material is 100% traceable to sustainably

managed northern forests

• Quality

– Metsä Board’s paperboards are premium-quality

6

Metsä Board’s paperboards have

many competitive advantages

Nordea Forest Seminar 2017

Metsä Board has a strong position in Europe

Largest Folding Boxboard Producers in EuropeTotal capacity: 3.6M tonnes

Largest White Fresh Fibre Linerboard Producers in EuropeTotal capacity: 2.2M tonnes

Sources: Company information, Pöyry Management Consulting Oy Q2/2017

15%

7%

9%

11%

21%

37%

0 300 600 900 1200 1500

Others

International Paper

Mayr-Melnhof

Kotkamills Oy

Stora Enso

Metsä Board

14%

8%

11%

13%

23%

31%

0 200 400 600 800

Others

SCA

BillerudKorsnäs

Mondi

Smurfit Kappa

Metsä Board

7Nordea Forest Seminar

2017

Operating environmentand growth drivers

9

Strong growth drivers

The demand for

premium-quality

paperboard made from

fresh fibre is growing

globally 3–4% p.a.

GLOBALISATION TECHNOLOGY

SUSTAINABILITY CONSUMPTION


10

Global cartonboard*) market is 36 Mt/a of which

folding boxboard market is about 9 Mt/a

Source: Metsä Board estimates

*) excluding liquid packaging board, cup & plate stock,

liner and uncoated recycled board.

APAC20 Mt/a

EMEA8 Mt/a

North

America6 Mt/a

Lat.Am.2 Mt/a

Folding boxboard

Other fresh fibre grades (e.g. SBS, CUK)

Recycled grades

Avg. growth rate for

folding boxboard is

3–4%/a


11

Global food service board market is 3.5 Mt/a*

*) Base board only, excl. other laminate

materials such as aluminium and PE.

Cups

Plates

Cartons

APAC1.0 Mt/a

EMEA0.9 Mt/a

Americas1.6 Mt/a

Avg. growth rate for food

service board is

3–5%/a

Source: Metsä Board estimatesNordea Forest Seminar 2017

12Source: Metsä Board estimates


2017

Americas3 Mt/a

EMEA4.5 Mt /a

APAC3 Mt/a

White top kraftliner

Fully bleached liner

White recycled liner

Global white linerboard market is 10.5 Mt/aGlobal coated white-top kraftliner market is 1 Mt/a,

of which Metsä Board’s share is roughly 40%

Global containerboard market is 155 Mt/a,

of which

• White linerboards 7%

• Brown kraftliner 17%

• Brown testliner 37%

• Fluting 39%

40%

Metsä Board’s growth exceeds clearly the average

market growth

13

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2012 2013 2014 2015 2016 2018 target

Fresh fibre linerboard Folding boxboard

Annual paperboard deliveries, 1,000 tonnes

Premium-quality paperboard made

from fresh fibres is replacing

• other packaging materials e.g.

plastics in food service

applications

• recycled paperboard in food

packaging (safety issues) or in

consumer packaging (higher

quality)


GROWTH

FROM THE

AMERICAS

IN THE COMING

YEARS

AMERICAS

SHARE OF SALES IN 2016

17 %MAINTAIN

THE STRONG

MARKET

POSITION IN

EUROPE

EMEA


75 %

FOCUS ON

PREMIUM

PAPERBOARD

SEGMENTS IN

THE

ASIA-PACIFIC

REGION

APAC


8 %

Metsä Board’s regional goals and operating models

In 2016 the y-o-y growth was: +14% in Americas, +10% in EMEA, +24% in APAC

Husum investment programmeand update

16

Husum investment programme

finalised the transformation

• Husum integrated facility

• Folding boxboard production line (400,000 t/a)

• Linerboard production line (270,000 t/a)

• Extrusion coating line (100,000 t/a, included in FBB

capacity)

• Own harbour minimise transport, improve efficiency

and sustainability of the supply chain

• Deliveries targeted to Americas, Europe and food

service applications globally



201717

New state-of-the-art extrusion

coating line started up at Husum

• Serving the global food service market

• PE-coated*) paperboard is an alternative to plastics in

cups, plates and other takeaway packaging and frozen

food packaging

• Supports growth in a new customer segment

• EUR 38 million investment with a capacity of 100,000 t/a

• Metsä Board continues development work on other

innovative barrier solutions including the use of bio-based

materials

*) PE=polyethylene, the most common barrier

material used against moisture and grease

• Rising capacity utilisation rate in the FBB production

line (now 70%) will decrease production costs per

tonne produced

• FBB production line fully utilised by the end of 2018

• Total paperboard deliveries to Americas will increase

• PE-coated paperboards generate sales in a new

customer segment

• The volumes of coated linerboards will grow


201718

Potential to improve

profitability in Husum

Q1 2017 Resultsand outlook

Total paperboard deliveries grewAll-time high monthly level in March 2017

210 203 204 213 224 224 227 250 266 245 265

120 111 130141 137 131 142

148148

143163

0

60

120

180

240

300

360

420

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Folding boxboard White fresh fibre linerboard

1,0

00

to

nn

es

Growth in total

paperboard deliveries:

+10% Q1/17 vs. Q4/16

+16% Q1/17 vs. Q1/16

+12% FY16 vs. FY15


2017

FY 2015:

1.4 mill. tonnes

FY 2016:

1.6 mill. tonnes

500

600

700

800

900

1000

1100

2010 2011 2012 2013 2014 2015 2016 2017

Folding boxboard White-top kraftliner

Market price development in folding boxboard

and white-top kraftliner in Europe

Sources: Pöyry Management Consulting & FOEX Indexes Ltd

EUR/ tn


2017

Sales increased and profitability improved

Sales, EUR million

526 522 498 462 436 423 440 422 4450

100

200

300

400

500

600

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

43 47 55 35 35 36 34 33 45

8.2 %

9.0 %

11.0 %

7.6 %8.0 %

8.5 %7.7 % 7.8 %

10.1 %

0%

2%

4%

6%

8%

10%

12%

0

10

20

30

40

50

60

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117


201722

Comparable operating result, EUR million and %

FY 2015:

EUR 2,008 million

FY 2016:

EUR 1,720 million

FY 2015:

EUR 180 million

FY 2016:

EUR 137 million

EU

R m

illio

n

EU

R m

illio

n

• Investments in January–

March were EUR 19 million

(Q1/16: EUR 54 million)

• Estimated capex in 2017

is EUR 65–70 million

Clearly lower capex in 2017

0

30

60

90

120

150

180

2010 2011 2012 2013 2014 2015 2016 2017E

Maintenance capex Growth capex Depreciation

EUR million


2017

Main growth in capexes in 2015−2016: Husum investment programme, extrusion coating line

and equity investment in Metsä Fibre’s bioproduct mill

Cash flows clearly positiveQ1 2017 cash flow from operations impacted by changes in working capital,

advanced payments of pension premiums and dividend from Metsä Fibre

33 56

93

66

-22 -22

6755 269 8 45 8

-76

-50

49 17 7

250

214

256 247

193

115

8978

126

188

119 118

70

-15

-73

-69

-60

23

-100

-50

0

50

100

150

200

250

300

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Cash flow from operations, quarterly Free cash flow, quarterly

Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months

EU

R m

illio

n


2017

Balance sheet remained stable

333 464 412 541 488 464 458

1.2

2.0

1.5

2.1 2.12.0

1.9

0

1

2

3

0

200

400

600

2015 2016 3/16 6/16 9/16 12/16 3/17

Interest-bearing net debt, EUR million

Interest-bearing net debt / EBITDA (rolling 12m)

Interest-bearing net debt /

comparable EBITDA

333 464 412 541 488 464 458

32%

44%42%

54%

49%

44% 44%

0

0.1

0.2

0.3

0.4

0.5

0.6

0

200

400

600

2015 2016 3/16 6/16 9/16 12/16 3/17

Interest-bearing net debt, EUR million

Net gearing, %

Net gearing, %


2017

Financial target in net gearing

is maximum of 70%


201726

Near-term outlook

• Good demand in fresh fibre paperboards, pulp

market expected to remain healthy

• Price levels are expected to be stable or rising

• Metsä Board’s paperboard delivery volumes

are expected to increase

• Several maintenance shutdowns in Finnish

mills in Q2, rising latex price increase the

production costs

Profit guidance:

Metsä Board's comparable operating result for

the second quarter of 2017 is expected to remain

roughly on the same level as in the first quarter of

2017.

• Transformation is over and Metsä Board is a

pure player in packaging

• Metsä Board’s paperboard respond well to

strict requirements of packaging materials

• Potential to improve profitability in Husum

• Extrusion coating line offers improved

availability and competitive products,

especially in the food and food service

segment

• 2017 focus is on sales of new

paperboard capacity


201727

Summary

Metsä Board’s

2017 Capital Markets Day1 June 2017 in Helsinki

More info: www.metsaboard.com/investors

Metsä Board’s



Metsä Board’s



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