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Metsä Board
Results 2013

1
Metsä Board
Key Events in 2013
‒ Profitability improved from previous year
‒ Folding boxboard and white top kraftliner deliveries incr...
Result, Excluding Non-Recurring Items, Improved from Previous Year
Operating result, excl. nonrec. items

Sales
3000

m€

...
Operating Result in 4Q 2013 Improved as Expected Despite
Seasonally Lower Deliveries
Sales, m€

Operating result excl. non...
Paperboard’s 4Q Results Roughly at Previous Quarter Level
Sales

m€
350

‒ Result was weakened mainly by the seasonally de...
Paper and Pulp’s Results Improved Mainly Due to Normalized
Production at Husum
Sales

m€

‒ Production at Husum normalized...
Good Financial Situation Continues
‒ Gross debt EUR 701 million, cash and interest bearing
receivables EUR 104 million and...
Short-Term Profitability Outlook
‒ Metsä Board’s operating result, excluding non-recurring
items, is in the first quarter ...
New Management Structure Took Effect on 1 January 2014
‒ Metsä Board operates from 2014 onwards through two business areas...
Emphasis of North American Markets To be Increased in
Metsä Board’s Folding Boxboard Business
‒ Cartonboard consumption in...
Development of New Products Proceeding Well at Husum
‒ Production of light weight uncoated kraftliner started in April 201...
Key Focus Areas in 2014
1.Increase folding boxboard sales further based on the light weight concept
- Fully benefit the cu...
Appendix

Metsä Board
Folding Boxboard Market Price in Europe
2004 – 2013
EUR / tonne

1100

1000

900

800
2004

2005

2006

2007

2008

2009

...
Paper and Pulp Market Price in Europe
1998 – 2013
EUR / tonne

EUR/USD
1,7

1100

1,6

1000

1,5

900

1,4

800

1,3

700
...
Balance Sheet Ratios
%

Equity Ratio

%

40,7

45

120

38,7

103

40
31,1 31,2
35

Net gearing

33,2 33,3

32,4

100

27,...
Business Area Performance – Comparison to Previous Quarter*
Sales, m€

Operating result, excluding non-recurring items, m€...
Business Area Performance – Comparison to Previous Year*
Sales, m€

Operating result, excluding non-recurring items, m€

1...
Ownership Structure 31.12.2013
Shares

Votes

19
Metsä Board

Source: Euroland
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Results 2013 of Metsä Board, presentation

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Metsä Board results 2013 presentation: "The operating result of the last quarter of 2013 excluding non-recurring items improved from the previous quarter, as expected."

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Results 2013 of Metsä Board, presentation

  1. 1. Metsä Board Results 2013 1 Metsä Board
  2. 2. Key Events in 2013 ‒ Profitability improved from previous year ‒ Folding boxboard and white top kraftliner deliveries increased clearly and folding boxboard prices were increased in late 2013 ‒ Sustainability and printing properties of Metsä Board’s folding boxboards were further improved by renewed products launched in spring ‒ Exposure to paper business was further reduced by starting successfully kraftliner production at Husum mill ‒ Metsä Board’s management structure was renewed at year end to accelerate growth ‒ Net debt reduced to 597 m€ and credit ratings improved 2 Metsä Board
  3. 3. Result, Excluding Non-Recurring Items, Improved from Previous Year Operating result, excl. nonrec. items Sales 3000 m€ 120 300 m€ m€ 200 80 2000 Operating result 104 2108 1000 2019 40 221 100 74 104 0 0 0 2012 % 100 9 Result before taxes 300 m€ 75 6 2013 2013 Result before taxes, excl. non-rec. items ROCE, excl. nonrec. items 12 2012 2012 2013 m€ 50 3 200 100 6,4 25 4,8 0 2012 2013 28 174 49 58 0 0 2012 2013 2012 2013 Board of Directors is proposing to the AGM a dividend of 0.09€ per share for the financial year 2013 3 Metsä Board
  4. 4. Operating Result in 4Q 2013 Improved as Expected Despite Seasonally Lower Deliveries Sales, m€ Operating result excl. non-rec. items, m€ 60 800 40 600 43 20 400 200 685 660 616 32 20 6 -21 0 -40 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Result before taxes excl. non-rec. items, m€ 50 25 0 17 16 -11 30 26 19 29 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 -20 28 24 6 0 524 545 522 532 509 535 503 502 479 25 10 -9 9 4 19 9 18 -33 -25 -50 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 4 Metsä Board
  5. 5. Paperboard’s 4Q Results Roughly at Previous Quarter Level Sales m€ 350 ‒ Result was weakened mainly by the seasonally decreased delivery volumes 300 281 274 289 279 293 289 289 269 250 ‒ Average prices were stable in 4Q 2013 200 150 ‒ Folding boxboard and white top kraftliner deliveries are expected to increase in 1Q 2014 100 50 0 ‒ FBB contract prices are somewhat higher in 2014 vs. 2013. Also volumes increased in 2014 annual contracts 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 EBIT, excl. non-recurring items m€ 40 32 ‒ No material white top kraftliner price changes in sight 30 28 27 24 27 25 24 22 20 10 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 5 Metsä Board
  6. 6. Paper and Pulp’s Results Improved Mainly Due to Normalized Production at Husum Sales m€ ‒ Production at Husum normalized after extensive shutdown in 3Q 2013 ‒ Kraftliner deliveries from Husum increased as planned 300 245 250 229 223 210 216 198 199 189 200 150 ‒ WFU delivery volumes increased but average prices weakened from 3Q 2013 100 50 ‒ Coated paper and market pulp delivery volumes decreased somewhat and prices were stable 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 EBIT, excl non-recurring items m€ 10 ‒ Kraftliner deliveries will increase and paper and market pulp deliveries are expected be stable in 1Q 2014 ‒ No material paper price changes in sight. Average price for Metsä Board’s market pulp deliveries expected to remain stable in 1Q 2014 8 5 5 4 2 0 0 -2 -5 -2 -10 -15 -12 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 6 Metsä Board
  7. 7. Good Financial Situation Continues ‒ Gross debt EUR 701 million, cash and interest bearing receivables EUR 104 million and net debt EUR 597 million ‒ EUR 100 million RCF fully available Net Debt, m€ 4000 3693 3500 3000 ‒ Net gearing 70%, equity ratio 40.7% and average interest rate 4.8% at the end of 2013 2403 2500 2000 7 Metsä Board 597 500 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 0 2002 ‒ Lielahti property divestment worth EUR 26 million expected to materialize by end 1Q 2014 1000 2001 ‒ S&P upgraded Metsä Board’s credit rating from B to B+, Moody’s changed their B2 outlook to positive 1500 2000 ‒ EUR 150 million term loan was prepaid and EUR 75 million pension loan and a EUR 50 million bank loan were drawn
  8. 8. Short-Term Profitability Outlook ‒ Metsä Board’s operating result, excluding non-recurring items, is in the first quarter of 2014 expected to improve slightly from the last quarter of 2013 8 Metsä Board
  9. 9. New Management Structure Took Effect on 1 January 2014 ‒ Metsä Board operates from 2014 onwards through two business areas: ‒ Cartonboard (Kyro, Simpele, Tako, Äänekoski, Joutseno and Gohrsmühle) ‒ Linerboard and Paper (Husum, Kemi and Kaskinen) ‒ Reason for the renewed structure is acceleration of growth ‒ About 60% of the result impact of Metsä Fibre ownership is expected to be booked in the Linerboard and Paper and the rest in the Cartonboard business area ‒ Reporting from 1Q 2014 onwards is based on the new business area structure ‒ Historical segment numbers announced in February 2014 9 Metsä Board
  10. 10. Emphasis of North American Markets To be Increased in Metsä Board’s Folding Boxboard Business ‒ Cartonboard consumption in North America is focused on traditional heavy grades ‒ Yield advantage for customers by changing to Metsä Board’s folding boxboards even over 30 per cent ‒ Sustainability and safety increasingly important also for North American brand owners ‒ North American cartonboard market is 8 million tonnes/a ‒ Metsä Board aims at being a significant sustainable alternative for North American brand owners ‒ Short term target is to double FBB volumes from 35 000 tonnes ‒ Metsä Board already has a leading position in North American high quality white top kraftliner market 10 Metsä Board Share of ecological FBB of total cartonboard market Europe 34% North America 4% Asia 22%
  11. 11. Development of New Products Proceeding Well at Husum ‒ Production of light weight uncoated kraftliner started in April 2013 ‒ Deliveries in 2013 about 20 000 tonnes ‒ Run rate currently over 60 000 tonnes/a ‒ Production of newly developed light weight coated kraftliner was started in early 2014 ‒ Europe’s largest state of art off line coating line ‒ Updated coated paper contract with Sappi frees up coating capacity ‒ Total kraftliner production target in 2014 increased to over 100 000 tonnes ‒ Husum’s kraftliner capacity is close to 300 000 tonnes/a without any investments ‒ Husum offers great opportunities for Metsä Board to grow further in the paperboard business 11 Metsä Board
  12. 12. Key Focus Areas in 2014 1.Increase folding boxboard sales further based on the light weight concept - Fully benefit the current folding boxboard capacity - Prepare for the next capacity increase 2. Clear increase of kraftliner sales - Full utilization of Husum’s kraftliner production potential - Further increase of Kemi mill’s production output 3. Secure good folding boxboard and kraftliner price levels 4. Develop and launch new folding boxboard and kraftliner products 5. Maximize cash flows from decreasing paper businesses 6. Continuous improvements to achieve Super Productivity and Best-in-Class supply chain 12 Metsä Board
  13. 13. Appendix Metsä Board
  14. 14. Folding Boxboard Market Price in Europe 2004 – 2013 EUR / tonne 1100 1000 900 800 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Pöyry Management Consulting 14 Metsä Board
  15. 15. Paper and Pulp Market Price in Europe 1998 – 2013 EUR / tonne EUR/USD 1,7 1100 1,6 1000 1,5 900 1,4 800 1,3 700 1,2 1,1 600 1 500 0,9 400 2000 0,8 2001 2002 2003 2004 Coated magazine paper LWC (60g) Softwood pulp NBSK 2005 2006 2007 2008 2009 2010 Uncoated fine paper (B-copy, 80 g) Coated fine paper (100 g) 15 Metsä Board 2011 2012 2013 EUR/USD Source: Foex, Reuters
  16. 16. Balance Sheet Ratios % Equity Ratio % 40,7 45 120 38,7 103 40 31,1 31,2 35 Net gearing 33,2 33,3 32,4 100 27,9 30 73 80 70 73 74 75 70 69 25 60 20 15 40 10 20 5 0 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13* 4Q13 1Q12 *Divestment of 51 % in Metsä Group Treasury improved equity ratio by about 5 percentage points 16 Metsä Board 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
  17. 17. Business Area Performance – Comparison to Previous Quarter* Sales, m€ Operating result, excluding non-recurring items, m€ 40 350 300 289 269 30 250 24 199 200 189 22 20 150 10 100 50 8 0 Paperboard 0 Paperboard Paper and Pulp ‐2 Paper and Pulp ‐10 3Q 2013 17 Metsä Board 4Q 2013 *Metsä Board BA structure changes from 1Q 2014 reporting onwards
  18. 18. Business Area Performance – Comparison to Previous Year* Sales, m€ Operating result, excluding non-recurring items, m€ 150 1500 1200 120 1123 1140 907 900 108 103 90 802 60 600 30 300 8 0 0 Paperboard Paperboard Paper and Pulp ‐6 Paper and Pulp ‐30 2012 18 Metsä Board 2013 *Metsä Board BA structure changes from 1Q 2014 reporting onwards
  19. 19. Ownership Structure 31.12.2013 Shares Votes 19 Metsä Board Source: Euroland

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