Metsä Board 1Q 2013 interim report

586 views

Published on

Metsä Board Interim report 1Q 2013: "Our operating result excluding non-recurring items improved in the first quarter of 2013, mainly due to increased delivery volumes. The market situation in paperboard is currently strong, and
delivery volumes are expected to be good in the second quarter as well. We will increase the prices of white-top kraftliner in all our main markets during the second quarter. Demand for pulp has also continued to be strong, and prices have continued to increase slightly"

Published in: Investor Relations, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
586
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Metsä Board 1Q 2013 interim report

  1. 1.             Metsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noonMetsä Board is Europe’s leading manufacturer of folding boxboard, the world’s leading manufacturer of coated white-top kraftliners anda significant supplier of paper, which offers customers high-quality cartonboard and papers for consumer and retail packaging as well asgraphics industry and office end uses. The company’s sales network serves brand owners, carton printers, manufacturers of corrugatedboards, printing houses, merchants and office suppliers. Metsä Board is part of Metsä Group and its shares are listed in NASDAQ OMXHelsinki. In 2012, the company’s sales totalled approximately EUR 2.1 billion. The company has approximately 3,300 employees.www.metsaboard.com  Metsä Board Corporation’s operating result excluding non-recurring items was EUR 30.2million in January–March 2013Result for January–March 2013 Sales were EUR 535.0 million (Q4/2012: 508.5). The operating result excluding non-recurring items was EUR 30.2 million (23.5). Theoperating result including non-recurring items was EUR 34.8 million (39.3). The result before taxes excluding non-recurring items was EUR 3.9 million (9.4). The resultbefore taxes including non-recurring items was EUR 8.5 million (25.2). Earnings per share excluding non-recurring items were EUR 0.01 (0.08) and including non-recurring items EUR 0.02 (0.11).Events in the first quarter of 2013 Folding boxboard order inflow strengthened and delivery volumes increased from theprevious quarter. Demand for white-top kraftliner continued to be very strong. Metsä Board announced awhite-top kraftliner price increase. The delivery volumes of uncoated fine paper and coated papers improved from theprevious quarter, but prices declined. Metsä Board announced an uncoated fine paper priceincrease in Europe. Demand for market pulp continued to be strong and prices increased slightly. In January, Metsä Board divested the Alizay mill site in France, including the equipmentand buildings, to Conseil Général de l’Eure, representing the French government, forEUR 22 million.“Our operating result excluding non-recurring items improved in the first quarter of 2013, mainlydue to increased delivery volumes. The market situation in paperboard is currently strong, anddelivery volumes are expected to be good in the second quarter as well. We will increase theprices of white-top kraftliner in all our main markets during the second quarter. Demand for pulphas also continued to be strong, and prices have continued to increase slightly.Production efficiency of our expanded folding boxboard capacity reached the targeted level at thebeginning of 2013. The capacity expansion was very important to our customers so that theavailability of high-quality paperboard could be ensured. In the folding boxboard business, Europe
  2. 2. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon2is our home market, but we are seeking new business in North America and Asia as well, wherewe are developing our operations in order to clearly increase delivery volumes in the future. Westill have good opportunities to grow the capacity of our existing paperboard machines throughmoderate investments in order to support our customers growth.No signs of improvement are visible in the European paper market. Cash flow of the Husum millhas been positive even in the difficult market situation. Nevertheless, Husum’s profitability must beimproved, and we have launched a new cost savings programme to reduce both fixed and variablecosts. We have worked hard in order to develop more profitable products at Husum, both inparallel with the existing ones and to replace them. The first concrete example of this is the light-weight uncoated linerboards, the production of which was launched in April. Our linerboardbusiness has developed very well, and the Kemi mill, which increasingly focuses on the coatedgrades, has been operating at full capacity for a long time. Husums new products enable profitablegrowth in the linerboard business, and they complement our product portfolio in an excellent way.”Mikko Helander, CEO
  3. 3. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon3Adoption of amended IAS19 standardMetsä Board has adopted retrospectively from the beginning of 2013 amended IAS19 EmployeeBenefits-standard. The major changes were as follows: all actuarial gains and losses areimmediately recognized in other comprehensive income and finance costs are calculated on a netfunding basis.Group’s equity decreased as of December 31, 2012 by EUR 10.6 million. Operating result for 2012increased by EUR 1.4 million and finance costs increased by EUR 3.2 million.The effects on the Balance sheet and Income statement are more specifically presented in theNotes (Note 1).Changed key figures are presented in the key figures table (Key figures, restate) as well as keyfigures according to old standard (Key figures, reported in 2012).KEY FIGURES, restate 2013 2012 2012 2012 2012 2012Q1 Q4 Q3 Q2 Q1 Q1-Q4Sales, EUR million 535.0 508.5 532.3 522.2 544.6 2,107.6EBITDA, EUR million 61.4 53.8 52.0 189.9 25.7 321.4excl. non-recurring items, EUR million 56.8 49.0 54.0 47.8 35.2 186.0EBITDA, % 11.5 10.6 9.8 36.4 4.7 15.3excl. non-recurring items, % 10.6 9.6 10.1 9.2 6.5 8.8Operating result, EUR million 34.8 39.3 23.4 162.0 -3.6 221.1excl. non-recurring items, EUR million 30.2 23.5 25.5 19.8 6.1 74.9EBIT, % 6.5 7.7 4.4 31.0 -0.7 10.5excl. non-recurring items, % 5.6 4.6 4.8 3.8 1.1 3.6Result before taxes, EUR million 8.5 25.2 7.8 159.4 -18.5 173.9excl. non-recurring items, EUR million 3.9 9.4 9.9 17.2 -8.8 27.7Result for the period, EUR million 8.0 38.2 7.9 140.6 -15.4 171.3excl. non-recurring items, EUR million 3.4 24.2 9.9 14.0 -5.7 42.4Result per share, EUR 0.02 0.11 0.03 0.43 -0.05 0.52excl. non-recurring items, EUR 0.01 0.08 0.03 0.04 -0.02 0.13Return on equity, % 3.8 18.1 3.9 72.8 -8.4 21.5excl. non-recurring items, % 1.6 11.5 4.8 7.3 -3.1 5.3Return on capital employed, % 7.7 8.7 5.4 36.0 -0.2 12.4excl. non-recurring items, % 6.8 5.5 5.8 6.0 1.9 4.8Equity ratio at end of period, % 33.3 33.2 31.2 31.1 27.9 33.2Gearing ratio at end of period, % 122 130 138 138 153 130Net gearing ratio at end of period, % 69 73 70 73 103 73Shareholders equity per share at end of period,EUR 2.54 2.59 2.51 2.46 2.22 2.59Interest-bearing net liabilities, EUR million 577.6 625.2 580.1 595.4 758.5 625.2Gross investments, EUR million 9.2 28.2 10.7 17.5 9.7 66.1Deliveries, 1 000 tonnesPaperboard 311 298 306 289 295 1,188Paper 186 162 169 165 185 681Personnel at the end of period 3,239 3,279 3,337 3,597 3,818 3,279Deliveries are not comparable due to restructuring.EBITDA = Earnings before interest, taxes, depreciation and impairment charges
  4. 4. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon4KEY FIGURES, reported in 2012 2012 2012 2012 2011 2012Q4 Q3 Q2 Q1 Q1-Q4Sales, EUR million 508.5 532.3 522.2 544.6 2,107.6EBITDA, EUR million 54.8 51.2 189.1 24.9 320.0excl. non-recurring items, EUR million 50.0 53.2 47.0 34.4 184.6EBITDA, % 10.8 9.6 36.2 4.6 15.2excl. non-recurring items, % 9.8 10.2 9.0 6.2 8.8Operating result, EUR million 40.4 22.6 161.2 -4.4 219.8excl. non-recurring items, EUR million 24.6 24.7 19.0 5.3 73.6EBIT, % 8.1 4.1 30.8 -0.7 10.4excl. non-recurring items, % 4.9 4.7 3.6 0.9 3.5Result before taxes, EUR million 27.0 7.8 159.4 -18.5 175.7excl. non-recurring items, EUR million 11.2 9.9 17.2 -8.8 29.5Result for the period, EUR million 39.9 7.9 140.6 -15.4 173.0excl. non-recurring items, EUR million 25.9 9.9 14.0 -5.7 44.1Result per share, EUR 0.13 0.02 0.43 -0.05 0.53excl. non-recurring items, EUR 0.08 0.02 0.05 -0.02 0.13Return on equity, % 18.8 3.9 72.9 -8.4 21.6excl. non-recurring items, % 12.2 4.8 7.3 -3.1 5.5Return on capital employed, % 8.9 5.2 35.9 -0.4 12.3excl. non-recurring items, % 5.7 5.7 5.8 1.7 4.7Equity ratio at end of period, % 33.6 31.1 31.0 27.8 33.6Gearing ratio at end of period, % 128 138 138 154 128Net gearing ratio at end of period, % 72 70 73 104 72Shareholders equity per share at end of period, EUR 2.62 2.51 2.46 2.21 2.62Interest-bearing net liabilities, EUR million 625.2 580.1 595.4 758.5 625.2Gross investments, EUR million 28.2 10.7 17.5 9.7 66.1Deliveries, 1 000 tonnesPaperboard 298 306 289 295 1,188Paper 162 169 165 185 681Personnel at the end of period 3,279 3,337 3,597 3,818 3,279
  5. 5. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon5Result for January–March compared to the previous quarterMetsä Boards sales were EUR 535.0 million (Q4/2012: 508.5). Comparable sales were up 5.2 percent. The operating result was EUR 34.8 million (39.3), and the operating result excluding non-recurring items was EUR 30.2 million (23.5).The non-recurring items in the January–March operating result were EUR +4.6 million net, of whichthe most significant was EUR 4.6 million in sales gains and cancelled provisions related to thedivestment of the Alizay mill in France.The non-recurring items in the previous quarter totalled EUR +15.8 million net.The operating result excluding non-recurring items improved slightly from the previous quarter.Delivery volumes of paperboards and papers increased, partly for seasonal reasons. No significantchanges took place in paperboard prices. The average prices of paper declined. The price of pulpincreased at the beginning of the year.The total delivery volume of the Paperboard business area in January–March was 311,000 tonnes(Q4/2012: 298,000). The total delivery volume of the paper businesses amounted to 186,000tonnes (162,000).Financial income and expenses in the period totalled EUR −26.3 million (−13.9). Financing costs inthe period under review were higher than in the previous period and were primarily due to theapproximately EUR 8 million additional interest caused by the prepayment of a USD privateplacement. Foreign exchange rate differences from trade receivables, trade payables, financialitems and the valuation of currency hedging were EUR −1.9 million (+1.1). Net interest and otherfinancial income and expenses amounted to EUR −24.4 million (−15.0). Other financial income andexpenses include EUR 1.2 million of valuation gains on interest rate hedges (a valuation gain of0.7).The result before taxes for the period under review was EUR 8.5 million (25.2). The result beforetaxes excluding non-recurring items totalled EUR 3.9 million (9.4). Income taxes amounted to EUR−0.5 million (+13.0). The reduction in the corporate tax rate in Sweden from 26.3 per cent to 22 percent in 2012 decreased the taxes for the comparison period by approximately EUR 9.7 million.Earnings per share were EUR 0.02 (0.11). Earnings per share excluding non-recurring items wereEUR 0.01 (0.08). The return on equity was 3.8 per cent (18.1), and 1.6 per cent (11.5) excludingnon-recurring items. The return on capital employed was 7.7 per cent (8.7); 6.8 per cent (5.5)excluding non-recurring items.
  6. 6. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon6Result for January–March compared to the corresponding period last yearMetsä Boards sales were EUR 535.0 million (Q1/2012: 544.6). Comparable sales were down 1.2per cent. Revenue decreased as a result of closing unprofitable paper operations andrestructurings. Sales excluding the impact of units and product groups closed or divested grew byapproximately 3 per cent.The operating result was EUR 34.8 million (−3.6), and the operating result excluding non-recurringitems was EUR 30.2 million (6.1).The non-recurring items of the operating result stood at EUR +4.6 million. In 2012, net non-recurring items recognised in the operating result stood at EUR −9.7 million.The operating result excluding non-recurring items compared to the corresponding period last yearwas improved by the considerable increase in the delivery volumes of folding boxboard and white-top kraftliner, reduced losses from units closed or restructured, as well as the increase in the pricesof short-fibre pulp and high yield pulp. By contrast, the operating result was weakened by, inparticular, the lower prices of coated papers as well as the stronger Swedish krona.In January–March, the total delivery volume of the Paperboard business area was 311,000 tonnes(295,000). The total delivery volume of the paper businesses amounted to 186,000 tonnes(185,000). The delivery volumes are not comparable due to the restructuring measures.Financial income and expenses totalled EUR −26.3 million (−15.2). Financing costs in the periodunder review were higher than in the corresponding period previous year and were primarily due tothe approximately EUR 8 million additional interest caused by the prepayment of a USD privateplacement. Foreign exchange rate differences from trade receivables, trade payables, financialitems and the valuation of currency hedging were EUR −1.9 million (2.0). Net interest and otherfinancial income and expenses amounted to EUR −24.4 million (−17.2). Pohjolan Voima Oy paid adividend of EUR 6 million in the comparison period. Other financial income and expenses includedEUR 1.2 million of valuation gains on interest rate hedges (a valuation gain of 0.5).The result before taxes for the period under review was EUR 8.5 million (−18.5). The result beforetaxes and excluding non-recurring items was EUR 3.9 million (−8.8). The impact of income taxeswas EUR −0.5 million (+3.1).Earnings per share were EUR 0.02 (−0.05). Earnings per share excluding non-recurring itemswere EUR 0.01 (−0.02). Return on equity was 3.8 per cent (−8.4), and 1.6 per cent (−3.1)excluding non-recurring items. The return on capital employed was 7.7 per cent (−0.2); 6.8 percent (+1.9) excluding non-recurring items.
  7. 7. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon7PersonnelThe number of personnel was 3,239 at the end of March (31 December 2012: 3,279), of whom1,538 (1,536) people worked in Finland. In January–March 2013, Metsä Board employed 3,220(3,552) people on average.InvestmentsGross investments in January–March totalled EUR 9.2 million (Q1/2012: 9,7).Structural changesIn January 2013, Metsä Board divested the Alizay mill site in France, including the equipment andbuildings, to Conseil Général de l’Eure, representing the French government, for EUR 22 million.The market situation in the paper industry is difficult, and new measures have been launched tosecure cash flow of the Husum mill. A new programme targeting annual cost savings of EUR 15million has been launched at the mill, and the aim is to find new, more profitable products both inparallel to and as replacements for existing products. The first example of these is the light-weightuncoated linerboards, the production of which was launched at Husum in April.Pending disputesIn November 2012, UPM-Kymmene Corporation initiated arbitration proceedings against MetsäBoard. The proceeding is a result of the transaction completed in May 2012, in which Metsä Boardsold 7.3 percentage points of its holding in Metsä Fibre Oy to the Japanese Itochu Corporation forEUR 138 million.In the arbitration proceedings, UPM is primarily claiming EUR 58.5 million in damages andsecondarily the reimbursement of an alleged unjustified benefit of EUR 58.5 million jointly fromMetsäliitto Cooperative and Metsä Board. The claims are based on an alleged breach of the co-sale clause under the Metsä Fibre shareholder agreement signed in 2009.Metsä Board denies UPM’s claim as unfounded in its entirety and is not making any provisionsbecause of it. The claim has no impact on the transaction with Itochu or cooperation between theparties, and is not associated with commercial agreements entered into with Itochu.The end result of the dispute initiated by UPM will be communicated later, after the ArbitrationCourt has issued its resolution on the matter.FinancingMetsä Board’s equity ratio at the end of March was 33.3 per cent (31 December 2012: 33.2) andgearing ratio was 122 per cent (2012: 130). The net gearing ratio was 69 per cent (2012: 73).The change in the fair value of investments available for sale during the period under review wasapproximately EUR −18.8 million, related primarily to the decline in the fair value of PohjolanVoima Oys shares due to the change in the market price of electricity.Net interest-bearing liabilities amounted to EUR 577.6 million at the end of March (625.2). Foreign-currency-denominated loans accounted for 1 per cent; 75 per cent were floating-rate, and the restwere fixed-rate. At the end of March, the average interest rate on loans was 4.1 per cent and theaverage maturity of long-term loans was 0.8 years. The interest rate maturity of loans was 12.3months at the end of March. During the period, the interest rate maturity varied between 10 and 14months.
  8. 8. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon8Cash flow from operations amounted to EUR 36.3 million (Q1–Q4/2012: 42.4). Working capitalincreased by EUR 0.6 million (a decrease of 17.9). In the cash flow statement, the net financialexpenses for the period include a dividend of EUR 24.9 million (33.4) paid by Metsä Fibre.At the end of the period under review, an average of 5.1 months of the net foreign currencyexposure was hedged. The degree of hedging varied between four and six months during theperiod. Non-euro-denominated shareholders equity was no longer hedged at the end of the reviewperiod.In March, Metsä Board prematurely paid off the remaining USD 121 million dollars of the USDprivate placement. In the first quarter, Metsä Finance had investments with a nominal value ofEUR 50 million in Metsä Board Corporations bond of EUR 500 million. After the period underreview, Metsä Board paid off the remaining portion of EUR 450 million of said bond on the duedate of 2 April 2013 and drew EUR 500 million of the syndicated credit agreement signed in 2012.Share pledges, real estate mortgages and a floating charge were used as collateral. The creditagreement includes financial covenants concerning the Groups financial performance and capitalstructure. Other covenants related to the loan are customary terms and conditions which concern,among other things, issuing collateral, major asset disposals, subsidiaries level of debt, materialchanges in the business operations, as well as changes in the statutory majority in shareholding.Metsä Board has considerable headrooms in relation to covenants set in the credit agreements.The EUR 100 million revolving credit facility included in the syndicated credit agreement iscompletely undrawn. EUR 150 million of the drawn loans will fall due on 30 June 2014, andEUR 350 million on 31 March 2016.Metsä Boards liquidity has remained strong. At the end of the period under review, availableliquidity was EUR 488 million, of which EUR 100 million consisted of revolving credit facility,EUR 48 million consisted of undrawn pension premium (TyEL) funds and EUR 340 million of liquidassets and investments. At the end of March, EUR 311 million of the liquid assets and investmentsare assets deposited by other Metsä Group businesses in Metsä Finance. In addition, Metsä Boardhad other interest-bearing receivables totalling EUR 107 million. Liquidity reserve of the Group iscomplemented by uncommitted domestic and foreign commercial paper programmes and creditfacilities amounting to EUR 525 million.SharesIn January–March, the highest price for Metsä Board’s A share on the NASDAQ OMX Helsinki Ltd.was EUR 2.49, the lowest was EUR 2.21, and the average price was EUR 2.36. At the end ofMarch, the price of the A share was EUR 2.25. At the end of 2012, the price of the A share wasEUR 2.21, while the average price in 2012 was EUR 2.34.In January–March, the highest price of Metsä Board’s B share was EUR 2.52, the lowest wasEUR 2.22, and the average price was EUR 2.37. At the end of March, the price of the B share wasEUR 2.30. At the end of 2012, the price of the B share was EUR 2.22, while the average price in2012 was EUR 2.00.The trading volume of the A share was EUR 0.5 million, or 1 per cent of the share capital. Thetrading volume of the B share was EUR 34 million, or 5 per cent of the share capital. The marketvalue of the A and B shares at the end of March totalled EUR 753 million.At the end of March, Metsäliitto Cooperative owned 40 per cent of the shares, and the voting rightsconferred by these shares was 61 per cent. International investors held 10 per cent of the shares.The company does not hold any treasury shares.On 1 February 2013, pursuant to Section 14 of the Articles of Association, the conversion of50,000 Metsä Board Corporation A shares into 50,000 B shares was entered into the TradeRegister. The total number of Metsä Boards shares is 328,165,612. The combined number of
  9. 9. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon9votes after the conversion carried out at the end of the period was 1,017,667,062. The number of Ashares was 36,289,550, which conferred 71 per cent of the companys votes, and the number of Bshares was 291,876,062, which conferred 29 per cent of the companys votes.After the review period on 19 April 2013, the conversion of 236,123 Metsä Board Corporation Ashares into 236,123 B shares was entered into the Trade Register. The combined number of votesafter the conversion was 1,013,180,725. After the conversion, the number of A shares is36,053,427, which confer 71 per cent of the companys votes, and the number of B shares is292,112,185, which confer 29 per cent of the companys votes.DividendThe Annual General Meeting on 26 March 2013 approved the companys financial statements forthe financial period 2012 and decided that a dividend of EUR 0.06 per share be distributed. Thedividend was paid to shareholders who were recorded in the companys shareholders’ register heldby Euroclear Finland Ltd on the record date for the dividend payment, 2 April 2013. The dividendpayment date was 10 April 2013.Board of Directors and AuditorsThe Annual General Meeting held on 26 March 2013 confirmed the number of members of theBoard of Directors as nine and re-elected the following individuals as members of the Board ofDirectors: Mikael Aminoff, M.Sc. (Forestry); Martti Asunta, metsäneuvos (Finnish honorary title);Kari Jordan, vuorineuvos (Finnish honorary title); Kirsi Komi, LL.M.; Kai Korhonen, M.Sc. (Eng);Liisa Leino, MA (Education); Juha Niemelä, vuorineuvos (Finnish honorary title); and Erkki Varis,M.Sc. (Eng). Veli Sundbäck, LL.M., was elected as a new Board member. The term of office of theBoard members expires at the end of the next Annual General Meeting.At its constitutive meeting, the Board of Directors elected Kari Jordan as its Chairman and MarttiAsunta as its Vice Chairman. The Board further resolved to organise the Board committees asfollows: the members of the Auditing Committee are Kirsi Komi, Kai Korhonen, Veli Sundbäck andErkki Varis, and the members of the Nomination and Compensation Committee are MikaelAminoff, Martti Asunta, Kari Jordan, Liisa Leino and Juha Niemelä.Authorised Public Accountants KPMG Oy Ab was elected as the companys auditor with APARaija-Leena Hankonen as the principal auditor. The term of office of the auditor expires at the endof the next Annual General Meeting. The Annual General Meeting resolved that the fee of theauditor be paid according to a reasonable invoice as approved by the company.Near-term outlookDelivery volumes of folding boxboard improved in the first quarter of 2013 and were at a goodlevel. The folding boxboard delivery volumes are estimated to continue to further improve slightly inthe second quarter of 2013. Metsä Board is considering to announce a folding boxboard priceincrease during the coming months.Demand for white-top kraftliner is expected to continue to be at very good level, and deliveryvolumes are estimated to be at the previous quarters level in the second quarter of 2013. MetsäBoard has announced a white-top kraftliner price increase of approximately EUR 50 per tonne in allmain markets.The delivery volumes of uncoated fine paper and coated papers are estimated to decline slightlyfrom the previous quarter due to seasonal reasons in the second quarter of 2013. Metsä Board hasannounced an uncoated fine paper price increase of approximately EUR 50 per tonne in Europe.The price of coated paper is estimated to remain unchanged at the low level in the near future.
  10. 10. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon10Delivery volumes of market pulp are estimated to be at the previous quarter’s level. The pulp priceincrease is expected to continue in the second quarter.Higher number of planned maintenance shutdowns has a slight negative result impact in thesecond quarter of 2013.Production costs in the second quarter of 2013 are expected to be approximately at the same levelas in the previous quarter.Metsä Board’s operating result, excluding non-recurring items, is in the second quarter of 2013expected to be roughly in line with the first quarter of 2013.Near-term business risksFurther slowing down of the global economy and the possible steepening of the downward trend inthe euro region may weaken the demand for pulp and paper products, in particular, and reduceprices.Because the forward-looking estimates and statements of these financial statements are based oncurrent plans and estimates, they contain risks and other uncertain factors that may cause theresults to differ from the statements concerning them. In the short term, Metsä Board’s result willbe particularly affected by the price of and demand for finished products, raw material costs, theprice of energy, and the exchange rate development of the euro in relation to the Swedish krona,US dollar and pound sterling. More information on longer-term risk factors can be found on pages31 and 32 of Metsä Board’s 2012 Annual Report.METSÄ BOARD CORPORATIONFurther information:Matti Mörsky, CFO, tel. +358 (0)10 465 4913Juha Laine, Vice President, Investor Relations and Communications, tel. +358 (0)10 465 4335More information will be available starting from 1 p.m. on 7 May 2013. A conference call held inEnglish for investors and analysts starts at 3 p.m. (EET). Conference call participants arerequested to dial in and register a few minutes prior to the start of the conference call on thefollowing numbers:Europe: +44 (0)20 7162 0025US: +1 334 323 6201The conference ID is 931452.
  11. 11. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon11BUSINESS AREAS AND MARKET TRENDSPaperboard business area2013 2012 2012 2012 2012 2012Paperboard Q1 Q4 Q3 Q2 Q1 Q1-Q4Sales, EUR million 293.3 279.2 289.1 273.6 280.7 1,122.6EBITDA, EUR million 43.9 47.0 40.7 35.9 40.6 164.2excl. non-recurring items 43.9 40.4 41.0 36.7 40.7 158.8Operating result, EUR million 32.3 34.0 28.6 23.3 26.9 112.8excl. non-recurring items 32.3 27.4 28.8 24.1 27.2 107.5excl. non-recurring items, % 11.0 9.8 10.0 8.8 9.7 9.6Return on capital employed, % 20.1 21.2 17.8 14.4 16.2 17.2excl. non-recurring items, % 20.1 17.1 18.0 14.9 16.3 16.4Deliveries, 1,000 tonnes 311 298 306 289 295 1,188Production, 1,000 tonnes 335 325 308 286 282 1,201Personnel at the end of period 1,715 1,722 1,806 2,028 2,002 1,722Delivery and production amounts are not completely comparable due to structural change.Result for January–March compared to the previous quarterOperating result excluding non-recurring items for the Paperboard business area improved fromthe previous quarter and was EUR 32.3 million (Q4/2012: 27.4). The result was improved by thehigher delivery volume, partly due to seasonal reasons. No significant changes took place inpaperboard prices.The result did not include non-recurring items. The result for the previous quarter included non-recurring items of EUR +6.6 million.The deliveries of European folding boxboard producers increased by approximately 6 per centcompared to the previous quarter. Folding boxboard deliveries of the Paperboard business areaincreased by 2 per cent.Result for January–March compared to the corresponding period last yearThe operating result excluding non-recurring items for Paperboard improved compared to thecorresponding period last year and totalled EUR 32.3 million (Q1/2012: 27.2). The result wasimproved by the considerable increase in the delivery volumes of folding boxboard and white-topkraftliner as well as reduced losses from units closed and restructured.The result did not include non-recurring items. The result for the corresponding period in theprevious year included non-recurring items of EUR -0.3 million.The deliveries of European folding boxboard producers increased by 8 per cent compared to thelevel of the corresponding period in the previous year. Folding boxboard deliveries of thePaperboard business area increased by 12 per cent.
  12. 12. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon12Paper and Pulp business area2013 2012 2012 2012 2012 2012Paper and Pulp Q3 Q4 Q3 Q2 Q1 Q1-Q3Sales, EUR million 216.5 209.5 223.3 228.9 245.2 907.0EBITDA, EUR million 16.7 8.6 14.7 18.6 -1.5 40.4excl. non-recurring items 12.1 11.4 16.8 18.6 1.7 48.5Operating result, EUR million 2.6 8.2 -0.3 4.6 -15.7 -3.3excl. non-recurring items -2.0 0.3 1.7 4.6 -12.4 -5.9excl. non-recurring items, % -0.9 0.1 0.8 2.0 -5.1 -0.7Return on capital employed, % 1.6 5.0 -0.2 3.0 -10.2 -0.5excl. non-recurring items, % -1.2 0.2 1.1 3.0 -8.1 -0.9Deliveries, Paper 1,000 tonnes 186 162 169 165 185 681Deliveries, Market Pulp 1,000 tonnes 171 184 192 210 218 804Production, Paper 1,000 tonnes 174 171 164 169 181 685Production, Metsä Board Pulp 1,000 tonnes 314 332 292 297 313 1,234Personnel at the end of period 956 982 989 986 1,253 982Delivery and production amounts are not completely comparable due to structural change.Result for January–March compared to the previous quarterThe operating result excluding non-recurring items for the Paper and Pulp business areaweakened slightly from the previous quarter and was EUR -2.0 million (Q4/2012: 0.3). The resultwas lowered by the weakened paper market situation in Europe, which led to lower prices. Bycontrast, delivery volumes increased partly due to seasonal factors. The average selling price ofpulp increased slightly.The result included non-recurring items of EUR +4.6 million net in sales gains and cancelled costprovisions related to the divestment of the Alizay mill in France. The result for the previous quarterincluded non-recurring items of EUR +8 million net.Total deliveries by the European uncoated fine paper producers were up 4 per cent. Paper andPulp’s delivery volume of uncoated fine paper increased by 16 per cent.Result for January–March compared to the corresponding period last yearThe operating result excluding non-recurring items for Paper and Pulp improved clearly comparedto the corresponding period last year and totalled EUR -2.0 million (Q1/2012: -12.4). The resultwas improved by the considerable reduction in the losses of the units closed and restructured aswell as increased prices of short-fibre pulp and high yield pulp. By contrast, the result wasweakened by, in particular, the lower prices of coated papers as well as the stronger Swedishkrona.The result includes a total of EUR +4.6 million in non-recurring items. The result for thecorresponding period last year included non-recurring items of a total of EUR -3.3 million.Total deliveries by European uncoated fine paper producers were down by 5 per cent compared tothe previous year. Paper and Pulp’s delivery volume of uncoated fine paper decreased by 11 percent.
  13. 13. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon13Sales and result by segment2013 2012 2012 2012 2012 2012EUR million Q1 Q4 Q3 Q2 Q1 Q1-Q4Paperboard 293.3 279.2 289.1 273.6 280.7 1,122.6Paper and Pulp 216.5 209.5 223.3 228.9 245.2 907.0Other operations 76.2 93.8 90.7 90.8 88.6 363.6Internal sales -50.9 -74.0 -70.9 -71.0 -70.0 -285.6Sales 535.0 508.5 532.2 522.3 544.6 2,107.6Paperboard 43.9 47.0 40.7 35.9 40.6 164.2Paper and Pulp 16.7 8.6 14.7 18.6 -1.5 40.4Other operations 0.8 -1.8 -3.5 135.5 -13.4 116.8EBITDA 61.4 53.8 52.0 189.9 25.7 321.4% of sales 11.5 10.6 9.8 36.4 4.7 15.3Paperboard 32.3 34.0 28.6 23.3 26.9 112.8Paper and Pulp 2.6 8.2 -0.3 4.6 -15.7 -3.3Other operations -0.1 -2.8 -4.8 134.0 -14.8 111.6Operating result 34.8 39.3 23.4 162.0 -3.6 221.1% of sales 6.5 7.7 4.4 31.0 -0.7 10.5Non-recurring items in operating resultPaperboard 0.0 6.6 -0.2 -0.8 -0.3 5.3Paper and Pulp 4.6 7.9 -2.0 0.0 -3.3 2.6Other operations 0.0 1.3 0.2 143.0 -6.1 138.3Group 4.6 15.8 -2.0 142.2 -9.7 146.2Paperboard 43.9 40.4 41.0 36.7 40.7 158.8Paper and Pulp 12.1 11.4 16.8 18.6 1.7 48.5Other operations 0.8 -2.8 -3.8 -7.5 -7.2 -21.3EBITDA, excl. non-recurring items 56.8 49.0 54.0 47.8 35.2 186.0% of sales 10.6 9.6 10.1 9.2 6.5 8.8Paperboard 32.3 27.4 28.8 24.1 27.2 107.5Paper and Pulp -2.0 0.3 1.7 4.6 -12.4 -5.9Other operations -0.2 -4.2 -5.0 -8.9 -8.7 -26.7Operating result,excl. non-recurring items 30.2 23.5 25.5 19.8 6.1 74.9% of sales 5.6 4.6 4.8 3.8 1.1 3.6Operating result, excl. non-recurring items, % of salesPaperboard 11.0 9.8 10.0 8.8 9.7 9.6Paper and Pulp -0.9 0.1 0.8 2.0 -5.1 -0.7Group 5.6 4.6 4.8 3.8 1.1 3.6
  14. 14. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon14Return on capital employed %Paperboard 20.1 21.2 17.8 14.4 16.2 17.2Paper and Pulp 1.6 5.0 -0.2 3.0 -10.2 -0.5Group 7.7 8.7 5.4 35.9 -0.2 12.4Capital employed, EUR millionPaperboard 650 639 647 638 656 639Paper and Pulp 641 654 643 613 616 654Unallocated and eliminations 573 674 685 679 599 674Group 1,864 1,966 1,975 1,930 1,871 1,966The capital employed for a segment includes its assets: goodwill, other intangible assets, tangible assets, biologicalassets, investments in associates, inventories, accounts receivables, prepayments and accrued income (excludinginterest and taxes), less the segments liabilities (accounts payable, advance payments, accruals and deferred income(excluding interest and taxes).Deliveries 2013 2012 2012 2012 2012 20121,000 tonnes Q1 Q4 Q3 Q2 Q1 Q1-Q4Paperboard 311 298 306 289 295 1,188Paper 186 162 169 165 185 681Market Pulp 171 184 192 210 218 804Production 2013 2012 2012 2012 2012 20121,000 tonnes Q1 Q4 Q3 Q2 Q1 Q1-Q4Paperboard 335 325 308 286 282 1,201Paper 174 171 164 169 181 685Metsä Fibre pulp 1)143 140 144 145 181 610Metsä Board pulp 314 332 292 297 313 1,234Delivery and production amounts are not completely comparable due to structural changes.1)Corresponds to Metsä Boards ownership share of 32.0% in Metsä Fibre until 30 April 2012 and starting 1May 2012 corresponds to Metsä Boards ownership share of 24.9% in Metsä Fibre.
  15. 15. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon15Calculation of key ratiosReturn on equity (%) =(Result before tax- direct taxes) per (Shareholders equity (average))Return on capital employed(%)=(Result before tax+ interest expenses, net exchange gains/losses and other financial expenses) per(Shareholders equity+ interest-bearing borrowings (average))Equity ratio (%) = (Shareholders equity) per (Total assets - advance payments received)Gearing ratio (%) =(Interest-bearing borrowings)per (Shareholders equity)Net gearing ratio (%) =(Interest-bearing borrowings- liquid funds- interest-bearing receivables)per (Shareholders equity)Earnings per share =(Profit attributable to shareholders of parent company)per (Adjusted number of shares (average))Shareholders´equity per share =(Equity attributable to shareholders of parent company)per (Adjusted number of shares at the end of period)
  16. 16. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon16FINANCIAL STATEMENTSUnaudited interim condensed consolidated statement of comprehensive incomeThree months endedYearendedMarch 31 December 31restate restateEUR million Note 2013 2012 2012Sales 2,6 535.0 544.6 2,107.6Change in stocks of finished goods andwork in progress -7.0 -21.5 -5.1Other operating income 2,6 11.7 12.4 194.4Material and services 6 -386.7 -391.5 -1,560.9Employee costs 1 -59.4 -65.5 -249.0Share of profits from associated companies 6 8.5 10.5 29.2Depreciation, amortization and impairment losses -26.7 -29.3 -100.3Other operating expenses -40.6 -63.3 -194.8Operating result 2 34.8 -3.6 221.1Share of profits from associated companies 0.0 0.3 0.0Net exchange gains and losses -1.9 2.0 5.0Other net financial items 1,2,6 -24.4 -17.2 -52.2Result before income tax 8.5 -18.5 173.9Income taxes 1,3 -0.5 3.1 -2.6Result for the period 8.0 -15.4 171.3
  17. 17. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon17 Other comprehensive incomeItems that will not be reclassified to profit or loss 1Actuarial gains/losses on defined pension plans -14.9Income tax relating to items that will not be reclassified 4.5Total 0.0 0.0 -10.4Items that may be reclassified to profit or lossCash flow hedges 3.8 3.5 3.2Available for sale financial assets 8 -18.8 5.4 -72.3Translation differences 7.5 2.1 10.1Share of profits from associated companies -1.0 1.4 -1.1Income tax relating to components of other comprehensive income 3.6 -2.2 17.0Total -4.9 10.2 -43.1Other comprehensive income, net of tax -4.9 10.2 -53.5Total comprehensive income for the period 3.1 -5.2 117.8Result for the period attributable toShareholders of parent company 8.0 -15.2 171.1Non-controlling interests 0.0 -0.2 0.2Total comprehensive income for the period attributable toShareholders of parent company 3.1 -5.0 117.6Non-controlling interests 0.0 -0.2 0.2Total 3.1 -5.2 117.8Earnings per share for result attributable to shareholders of parentcompany (EUR/share) 0.02 -0.05 0.52The accompanying notes are an integral part of these unaudited interim condensed financial statements.
  18. 18. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon18Unaudited condensed consolidated balance sheet As of March 31 As of As ofDecember 31 January 1restate restate restateEUR million Note 2013 2012 2012 2012ASSETSNon-current assetsGoodwill 12.7 12.7 12.7 12.7Other intangible assets 14.4 17.7 13.9 14.3Tangible assets 4 885.3 923.6 894.4 941.1Investments in associated companies 182.9 188.5 200.3 261.7Available for sale investments 8 250.9 282.9 269.6 341.3Other non-current financial assets 1,6,8 27.9 25.2 30.5 22.3Deferred tax receivables 9.3 5.6 9.2 3.51,383.4 1,456.2 1,430.6 1,596.9Current assetsInventories 302.7 300.4 303.3 334.7Accounts receivables and other receivables 6,8 503.3 490.8 398.2 444.2Cash and cash equivalents 340.3 268.1 428.5 305.01,146.3 1,059.3 1,130.0 1,083.9Assets classified as held for sale 4 0.2 115.5 20.6 6.8Total assets 2,529.9 2,631.0 2,581.2 2,687.6SHAREHOLDERS EQUITY AND LIABILITIESShareholders equityEquity attributableto shareholders of parent company 834.2 728.3 850.7 733.2Non-controlling interests 4.9 4.9 5.5 5.1Total equity 839.1 733.2 856.2 738.3Non-current liabilitiesDeferred tax liabilities 1 114.2 139.1 117.0 154.0Post-employment benefit obligations 1 87.8 75.5 88.2 78.4Provisions 5 19.6 35.2 20.2 31.5Borrowings 211.9 848.7 302.3 857.9Other liabilities 8 21.5 27.1 29.1 27.8455.0 1,125.6 556.8 1,149.6Current liabilitiesProvisions 5 32.9 110.0 45.2 139.5Current borrowings 6 813.3 274.6 807.7 278.8Accounts payable and other liabilities 6,8 389.6 373.1 315.3 381.41,235.8 757.7 1,168.2 799.7Liabilities classified asheld for sale 14.5Total liabilities 1,690.8 1,897.8 1,725.0 1,949.3Total shareholders equity and liabilities 2,529.9 2,631.0 2,581.2 2,687.6The accompanying notes are an integral part of these unaudited interim condensed financial statements.
  19. 19. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon19Unaudited consolidated statement of changes in shareholders equityEquity attributable to shareholders of parent companyEUR million NoteSharecapitalTrans-lationdiffer-encesFairvalueandotherreservesReserve forinvestedunrestrictedequityRetainedearnings TotalNon-control-linginter-ests TotalShareholdersequity,1 January 2012 557.9 25.4 227.7 284.8 -364.1 731.7 5.1 736.8Effect of IAS 19 1.5 1.5 1.5Shareholdersequity,1 January 2012,restate 557.9 25.4 227.7 284.8 -362.6 733.2 5.1 738.3Comprehensiveincome for theperiodResult for the period -15.2 -15.2 -0.2 -15.4Other comprehensiveincome net of tax total 2.8 7.4 0.0 10.2 0.0 10.2Comprehensiveincome total 2.8 7.4 -15.2 -5.0 -0.2 -5.2Related party transactionsDividends paid 0.0Shareholdersequity, 31 March2012 557.9 28.2 235.1 284.8 -377.8 728.3 4.9 733.2
  20. 20. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon20Equity attributable to shareholders of parent companyEUR million NoteSharecapitalTrans-lationdiffer-encesFairvalueandotherreservesReserve forinvestedunrestrictedequityRetainedearnings TotalNon-control-linginter-ests TotalShareholdersequity,1 January 2013 557.9 35.9 174.0 284.8 -191.3 861.3 5.5 866.8Effect of IAS 19 -10.6Shareholdersequity,1 January 2013,restate 557.9 35.9 174.0 284.8 -201.9 850.7 5.5 856.2Comprehensiveincome for theperiodResult for the period 8.0 8.0 0.0 8.0Other comprehensiveincome net of tax total 7.6 -12.5 -4.9 -4.9Comprehensiveincome total 7.6 -12.5 8.0 3.1 0.0 3.1Related party transactionsDividends paid -19.7 -19.7 -0.5 -20.2Shareholdersequity, 31 March2013 557.9 43.5 161.5 284.8 -213.6 834.2 4.9 839.1The accompanying notes are an integral part of these unaudited condensed financial statements.
  21. 21. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon21Unaudited condensed consolidated cash flow statementThree monthsended Year endedThree monthsendedMarch 31 December 31 December 312013 2012 2012 2012EUR million NoteResult for the period 8.0 -15.4 171.3 38.2Total adjustments 7 28.9 -0.7 -146.8 -12.0Change in working capital -0.6 23.2 17.9 -30.4Cash flow from operations 36.3 7.1 42.4 -4.2Net financial items 7 6.9 22.6 -42.1 -31.8Income taxes paid 1.0 -1.3 -1.8 4.4Net cash flow from operatingactivities 44.2 28.4 -1.5 -31.6Acquisition of other shares -5.4 -5.4Investments in intangible and tangibleassets -9.2 -9.7 -58.2 -20.3Disposals and other items 7 23.9 4.8 223.3 5.6Net cash flow from investingactivities 14.7 -4.9 159.7 -20.1Other changes in equity -0.2 -0.2Changes in non-current loans and inother financial items -146.6 -60.4 -34.6 64.7Dividends paid -0.5 0.0 0.0 0.0Net cash flow from financingactivities -147.1 -60.4 -34.8 64.5Changes in cash and cashequivalents -88.2 -36.9 123.4 12.8Cash and cash equivalents atbeginning of period 428.5 305.0 305.0 415.8Translation difference in cash andcash equivalents 0.0 0.0 0.1 -0.1Changes in cash and cashequivalents -88.2 -36.9 123.4 12.8Cash and cash equivalents at endof period 340.3 268.1 428.5 428.5The accompanying notes are an integral part of these unaudited condensed financial statements.
  22. 22. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon22NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTSNote 1 – Background and basis of preparationMetsä Board Corporation and its subsidiaries comprise a forest industry group whose main productareas are paperboards, office papers, speciality papers and pulp. Metsä Board Corporation, theparent company, is domiciled in Helsinki and the registered address of the company isRevontulenpuisto 2, 02100 Espoo, Finland. Metsä Board’s ultimate parent company is MetsäliittoCooperative.This unaudited interim report has been prepared in accordance with IAS 34, Interim FinancialReporting, and it should be read in conjunction with the 2012 IFRS financial statements. The sameaccounting policies have been applied as in the 2012 IFRS financial statements with the followingexception:Depreciation of machinery and equipment during the financial year has been specified furtherbetween the quarters where applicable in order to correspond with the allocation of the use of theeconomic benefit of the asset.The Group has adopted the following new standards, amendments to existing standards andinterpretations on 1 January 2013:Amendments to IAS 1 Presentation of Financial Statements (effective for financial years beginningon or after 1 July 2012): The major change is the requirement to group items of othercomprehensive income as to whether or not they will be reclassified subsequently to profit or losswhen specific conditions are met. The amendments only have an impact on the presentation ofGroup’s other comprehensive income.Amendment to IAS 19 Employee Benefits: The major changes are as follows: in future all actuarialgains and losses are immediately recognized in other comprehensive income, i.e. the corridorapproach is eliminated, and finance costs are calculated on a net funding basis. The comparativedata has been restated due to amendment.IFRS 13 Fair Value Measurement: IFRS 13 establishes a single source for all fair valuemeasurements and disclosure requirements for use across IFRSs. The new standard also providesa precise definition of fair value. IFRS 13 does not extend the use of fair value accounting, but itprovides guidance on how to measure fair value under IFRSs when fair value is required orpermitted. IFRS 13 will expand the disclosures to be provided for non-financial assets measured atfair value.Annual Improvements to IFRSs 2009-2011 (May 2012): The annual improvements processprovides a mechanism for minor and non-urgent amendments to IFRSs to be grouped togetherand issued in one package annually. The amendments cover in total five standards.Amendments to IFRS 7 Financial Instruments: Disclosures: The amendments clarify disclosurerequirements for financial assets and liabilities that are offset in the statement of financial positionor subject to master netting arrangements or similar agreements. The disclosures required bythose amendments are to be provided retrospectively.All amounts are presented in millions of euros, unless otherwise stated.This interim report was authorized for issue by the Board of Directors of Metsä Board on 7 May 2013.
  23. 23. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon23The impacts of amendment to IAS 19 Employee Benefits on the comparative data of balance sheetand the statement of comprehensive income presented in this interim report are as follows:Effect Old New of change inaccounting accounting accountingEUR million principle principle principleBalance sheet as of January 1, 2012Non-currentassetsOther non-current financial assets 12.6 11.9 -0.7Deferred tax receivables 3.6 3.5 -0.1Non-current liabilitiesDeferred tax liabilities 154.1 154.0 -0.1Post-employment benefitobligations 80.6 78.4 -2.2Total equity 736.8 738.3 1.5Effect Old New of change inaccounting accounting accountingEUR million principle principle principleBalance sheet as of December 31, 2012Non-currentassetsOther non-current financial assets 16.6 14.1 -2.5Deferred tax receivables 5.0 9.2 4.2Non-current liabilitiesDeferred tax liabilities 117.5 117.0 -0.5Post-employment benefitobligations 75.4 88.2 12.8Total equity 866.8 856.2 -10.6Income statement 2012 Employee costs 250.4 249.0 -1.4Other net financial items 49.0 52.2 3.2Income taxes 2.7 2.6 -0.1Other comprehensive income 2012 Items that will not be reclassified to profit orlossActuarial gains/losses on defined pensionplans -14.9 -14.9Income tax relating to items that will not bereclassified 4.5 4.5
  24. 24. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon24 Effect Old New of change inaccounting accounting accountingEUR million principle principle principleAs of March 31, 2012Non-currentassetsOther non-current financial assets 14.3 13.6 -0.7Deferred tax receivables 5.7 5.6 -0.1Non-current liabilitiesDeferred tax liabilities 139.2 139.1 -0.1Post-employment benefitobligations 77.7 75.5 -2.2Total equity 731.7 733.2 1.5Income statement January‐March 2012 Employee costs 66.3 65.5 -0.8Other net financial items 16.4 17.2 0.8Income taxes 3.1 3.1 0.0Other comprehensive income January‐March 2012 Items that will not be reclassified to profit orlossActuarial gains/losses on defined pensionplans 0.0 0.0Income tax relating to items that will not bereclassified 0.0 0.0Note 2 – Segment informationThe Corporate Management Team is the chief operational decision-maker, which monitors the businessoperations based on the operating segments. The company operates through two business areas that arealso the company’s reporting segments: Paperboard and Paper and Pulp.The Paperboard business area includes the Kemi, Kyro, Simpele, Tako and Äänekoski board mills,Kyro wallpaper base machine and Joutseno BCTMP mill located in Finland as well as theGohrsmühle mill in Germany. The Paper and Pulp business area includes Husum paper and pulpmill in Sweden, Alizay mill in France. Alizay mill was disposed in January 2013.The associated company result of Metsä Fibre has been allocated to business segments based ontheir respective pulp consumption and is reported in EBITDA. Approximately 80 per cent of theresult impact of Metsä Fibre ownership is included in the Paperboard business area and the rest inthe Paper and Pulp business area.The sales of the reporting segments are mainly generated by sales of board and paper, but the sales ofthe Paper and Pulp operating segment includes sales of pulp to external customers.
  25. 25. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon25The accounting principles for the segment information are equal to those of the Group and all inter-segment sales are based on market prices.Segment salesThree months ended March 31, Three months ended March 31,2013 2012EUR millionExternal Internal Total External Internal TotalPaperboard 293.3 0.0 293.3 280.7 0.0 280.7Paper and Pulp 216.5 0.0 216.5 245.2 0.0 245.2Other operations 25.2 51.0 76.2 18.7 69.9 88.6Elimination ofintersegment sales -51.0 -51.0 -69.9 -69.9Total sales 535.0 0.0 535.0 544.6 0.0 544.6Year ended December 31,2012EUR millionExternal Internal TotalPaperboard 1,122.5 0.1 1,122.6Paper and Pulp 907.0 0.0 907.0Other operations 78.1 285.5 363.6Elimination ofintersegment sales -285.6 -285.6Total sales 2,107.6 0.0 2,107.6
  26. 26. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon26Operating result by operating segmentsThree months ended Year endedMarch 31, December 31EUR million 2013 2012 2012Paperboard 32.3 26.9 112.8Paper and Pulp 2.6 -15.7 -3.3Other operations -0.1 -14.8 111.6Operating result total 34.8 -3.6 221.1Share of profit from associated companies 0.0 0.3 0.0Finance costs, net -26.3 -15.2 -47.2Income taxes -0.5 3.1 -2.6Result for the period 8.0 -15.4 171.3Operating result for the three months ended 31 March 2013 includes in the Paper and Pulpbusiness area EUR +4.6 million non-recurring items related to the disposal of Alizay mill site.  Assets by operating segmentsThree months ended Year endedEUR million March 31, December 312013 2012 2012Paperboard 942.7 933.0 919.8Paper and Pulp 794.4 848.6 803.5Other operations 386.1 536.0 446.4Elimination -56.5 -90.2 -93.3Unallocated 463.2 403.7 504.8Total 2,529.9 2,631.1 2,581.2Segment assets include goodwill, other intangible assets, tangible assets, investments inassociated companies, inventories, accounts receivables and prepayments and accrued income(excl. interest and income tax items).Note 3 – Income taxesTax expense in the interim condensed combined income statement is comprised of the current taxand deferred taxes. Income taxes for the three months ended 31 March 2013 and 2012 and for theyear ended 31 December 2012 are as follows: 
  27. 27. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon27Three months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Taxes for the current period 2.4 2.3 27.7Taxes for the prior periods 0.0 0.0 0.0Change in deferred taxes -1.9 -5.4 -25.1Total income taxes 0.5 -3.1 2.6Note 4 – Changes in property, plant and equipmentThe following shows the components of changes in property, plant and equipment for the threemonths ended 31 March 2013 and 2012 and for the year ended 31 December 2012:Three months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Carrying value at beginning of period 894.4 941.1 941.1Capital expenditure 8.3 9.5 61.0Decreases -0.1 -1.4 -2.3Asset classified as held for sale 0.0 0.0 -21.2Depreciation, amortization and impairment losses -25.9 -28.1 -96.3Translation difference 8.6 2.5 12.1Carrying value at end of period 885.3 923.6 894.4Old papermachine in Simpele mill in Finland, EUR 0.2 million, was classified in December 2012 asasset held for sale according to IFRS5, Non-current assets as held for sale and discontinuedoperations.Note 5 – ProvisionsThe following is a summary of changes Metsä Board’s provisions during the three months ended31 March 2013.Restructuring Environmental Other TotalEUR million obligations provisionsAt 1 January 2013 33.8 18.2 13.4 65.4Translation differences 0.1 0.0 0.2 0.3Increases 0.0 0.0 0.5 0.5Utilized during the year -10.3 -0.1 -0.8 -11.2Unused amounts reversed -1.0 -1.0 -0.4 -2.4At 31 March, 2013 22.6 17.1 12.9 52.5In Paper and Pulp there was a EUR 2.4 million reversal of provision related to disposal of Alizaymill site.  
  28. 28. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon28The non-current portion of provisions was some EUR 19.6 million and the current portion someEUR 32.9 million, total provisions being EUR 52.5 million. The non-current portion is estimated tobe paid by the end of the year 2014.Note 6 – Related party transactionsMetsä Board’s Board of Directors, the Corporate Management Team, Metsäliitto Cooperative andits subsidiaries and Metsä Board’s associated companies are considered related parties. MetsäBoard enters into a significant number of transactions with related parties for the purchases ofinventory, sale of goods, corporate services as well as financial transactions. Product and servicetransfers and interest between Metsä Board and the related parties have been made at arm’slength prices.Transactions between Metsä Board and related parties for the three months ended 31 March 2013and 2012 and for the year ended 31 December 2012 are as follows:Transactions and balances with parent and sister companiesThree months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Sales 18.4 14.9 60.9Other operating income 1.0 1.1 66.2Purchases 182.3 171.4 698.0Share of profit from associated companies 8.5 10.5 29.2Interest income 1.4 1.0 5.7Interest expenses 0.3 0.2 1.1Non-current receivables 3.8 4.7 3.8Current receivables 136.3 115.0 81.9Non-current liabilities 0.0 0.0 0.0Current liabilities 405.2 156.6 343.2Metsä Fibres net result is included within operating result line item "Share of profits fromassociated companies" and transactions with Metsä Fibre are included in transactions with sistercompanies.Metsä Fibre paid a dividend of EUR 24.9 million to Metsä Board during the three months ended 31March 2013.Transaction with joint venturesJoint ventures have been consolidated using line-by-line method proportionate to the Metsä BoardGroup´s holding. Metsä Board´s joint ventures are Äänevoima Oy (56.25%) and Ääneverkko Oy(56.25%). Group’s consolidated Income statement and Balance sheet included assets, liabilities,income and costs as follows:
  29. 29. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon29Three months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Sales 4.0 3.6 12.2Expenses 4.0 3.6 12.3Non-current assets 16.5 19.5 17.1Current assets 5.3 5.8 4.3Non-current liabilities 21.2 23.7 21.2Current liabilities 3.6 4.4 3.2Transactions with associated companiesThree months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Sales 0.0 0.0 0.1Purchases 1.7 1.5 6.4Non-current receivables 0.3 0.0 0.3Current receivables 0.1 0.0 0.4Current liabilities 3.9 3.1 2.1Note 7 – Notes to condensed consolidated cash flow statementAdjustments to the result for the periodThree months ended Year ended Three months endedMarch31 December 31 December 31EUR million 2013 2012 2012 2012Taxes 0.5 -3.1 2.6 -13.0Depreciation, amortization andimpairment charges 26.6 29.2 100.3 14.4Share of results from associatedcompanies -8.5 -10.8 -29.2 - 5.2Gains and losses on sale of fixed assets -2.4 -2.5 -158.4 -4.2Finance costs, net 2.3 15.2 47.2 13.9Provisions -13.6 -28.7 -109.3 -17.9Total 28.9 -0.7 -146.8 -12.0Net financial itemsNet financial items in consolidated cash flow statement for three months ended 31 March 2013include a dividend of EUR 24.9 million paid by Metsä Fibre. Financing costs in the period underreview were higher than in the corresponding period previous year and were primarily due to the
  30. 30. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon30approximately EUR 8 million additional interest caused by the repayment of a USD privateplacement.Disposals and other itemsThree months ended 31 March 2013 Disposals and other items, EUR 23.9 million, include EUR23.4 million disposals and EUR 0.5 other items. The most significant disposal was the sale ofproperty, plant and equipment in Alizay mill site in January, EUR 22.4 million.Note 8 - Financial instrumentsFinancial assets 31.03.2013EUR millionFair valuethroughprofit&lossAvailablefor salefinancialassetsLoansandotherreceivablesDerivativesat hedgeaccountingAmortisedcostTotalcarryingamountFairvalueAvailable for sale financialassets 250.9 250.9 250.9Other non-current financialassets 13.5 13.5 13.5Accounts receivables andother receivables 497.3 497.3 497.3Cash and cash equivalent 10.0 330.3 340.3 340.3Derivative financialinstruments 15.8 2.8 18.6 18.6Total financial assets 25.8 250.9 841.1 2.8 0.01,120.61,120.6Financial liabilities 31.03.2013EUR millionFair valuethroughprofit&lossDerivativesat hedgeaccountingAmortisedcostTotalcarryingamountFairvalueNon-current interest-bearing financialliabilities 211.9 211,9 221,0Other non-current financialliabilities 0.3 0,3 0,3Current interest-bearing financialliabilities 813.3 813,3 816,4Accounts payable and other financialliabilities 338.6 338.6 338.6Derivative financialinstruments 22.1 9.4 31.5 31.5Total financial liabilities 22.1 9.4 1,364.1 1,395.6 1,407.8
  31. 31. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon31Fair value hierarchy of financial assets and liabilities three months ended March 31 2013EUR million Level 1 Level 2 Level 3 TotalFinancial assets at fair valuethrough profit orloss, non-current 0.0Available for sale financialassets 0.3 250.6 250.9Financial assets at fair valuethrough profit orloss, current 10.0 10.0Derivative financial assets 18.6 18.6Financial liabilities at fair valuethrough profit orloss, current 0.0Derivative financial liabilities 0.6 30.9 31.5 Financial assets and liabilities measured at fair value based on Level 3Three months endedMarch 31EUR million 2013Opening balance    269,3Total gains and losses in profit or loss 0,0Total gains and losses in other comprehensiveincome -18,7Purchases 0,0Settlements 0,0Closing balance    250,6Financial assets and liabilities measured at fair value have been categorized according to IFRS 7Level 1 Fair value is based on quoted prices in active marketsLevel 2   Fair value is determined by using valuation techniques that use observable price information from marketLevel 3 Fair value are not based on observable market data, but companys own assumptionsThe valuation techniques are described in more detail in the Annual report.The greatest item at fair value not traded on an open market is the investment in Pohjolan Voimashares, reported under available-for-sale financial assets. The valuation techniques are describedin more detail in the Annual report. The WACC used on 31 March 2013 was 3.51 per centage. Theacquisition cost of shares in Pohjolan Voima Oy is EUR 33.4 million and the fair value EUR 246.3million.
  32. 32. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon32The carrying amount of available-for-sale financial assets would be estimated to be EUR 4.4million lower or EUR 4.8 million higher should the rate used for discounting the cash flows differ by10% from the rate estimated by the management. The carrying amount of available-for-salefinancial assets would be estimated to be EUR 43.5 million higher or EUR 43.6 million lowershould, if energy prices used for calculating the fair value differ by 10% from prices estimated bythe management.Derivatives 31.3.2013Nominal   Fairvalue Fair valueEUR million value      Assets Liabilities Total Fair Cash Equity Derivatives/hedgevalue flow accounting               hedges hedges hedges not appliedInterest forward agreementsInterest rate optionsInterest rate swaps 1,893,1 14,6 23,4 -8,8 -1,2 -7,6Interest rate derivatives total 1,893.1 14.6 23.4 -8.8 -1.2 -7.6Currency forwardagreements 1,227.4 4.3 2.0 2.3 2.9 -0.1 -0.5Currency option agreements 69.3 -0.3 -0.3 -0.3Currency swap agreements 46.9 0.7 -0.7 -0.7Currency derivatives total 1,343.6 4.0 2.7 1.3 2.9 -0.1 -1.5Electricity derivatives 113.5 5.4 -5.4 -0.6 -4.8Pulp derivativesOther commodity derivativesCommodity derivatives total 113.5 0.0 5.4 -5.4 -0.6 0.0 -4.8Derivatives total 3,350.2 18.6 31.5 -12.9 -1.2 -5.3 -0.1 -6.3
  33. 33. UnauditedMetsä Board Corporation Interim Report 1 January–31 March 2013 7 May 2013 at 12:00 noon33Note 9 – Commitments and contingenciesSecurities and guaranteesThe following shows securities and guarantees for the three months ended 31 March 2013 and2012 and for the year ended 31 December 2012:Securities and guaranteesThree months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Liabilities secured by pledges, realmortgages and Chattels mortgage 186.5 214.1 188.5Pledges granted 160.6 163.8 178.6Real estate mortgages 152.8 152.8 152.8Chattels mortgage 3.0 3.0 3.0Total pledges and mortgages 316.4 319.6 334.4As security for other own commitments 27.5 30.6 28.3On behalf of associated companies 0.2 0.0 0.1On behalf of others 3.2 1.6 3.2Total 347.3 351.8 366.0Securities and guarantees include pledges, real estate mortgages, chattels mortgage andguarantee liabilities. Metsä Board holds operating leases for certain vehicles and equipment.Leasing liabilities are part of the table above.Open derivative contractsThree months ended Year endedMarch 31 December 31EUR million 2013 2012 2012Interest rate derivatives 1,893.1 1,346.6 1,866,0Currency derivatives 1,343.6 1,669.1 1,310,1Other derivatives 113.5 124.1 79,3Total 3,350.2 3,139.8 3,255.4  The fair value of open derivative contracts calculated at market value at the end of the reviewperiod was EUR -12.9 million (EUR -19.0 million 31 December 2012 and EUR -33.0 million 31March 2012). 

×