President and CEO Kari Jordan's presentation on 8th of February 2018

2. Metsä Group
Result 2017
Kari Jordan
President & CEO
8 February 2018

3. • Sales EUR 5,040 million (2016: EUR 4,658 million)
• Operating result* EUR 566 million (EUR 439 million)
• Operating result of sales* 11.2% (9.4%)
• Return on capital employed* 12.3% (10.2%)
• Sales grew mainly due to increased delivery volumes and
higher sales price of pulp
• The operating result improved mainly thanks to the positive
development in the pulp and paperboard businesses
• Wood deliveries increased to 32 million cubic metres
8 February 20183
Strong performance for Metsä
Group in 2017
Metsä Group – Result 2017
*comparableMetsä Group

4. • In December, Metsä Group and Metsä Board raised their result
guidance for the fourth quarter due to the stronger-than-expected
pulp market
• Long-fibre pulp market price increased by 7% and short-fibre pulp
price by 8% compared to the previous quarter
• Paperboard sales prices increased. Deliveries were at a lower level
than in the previous quarter, due to the seasonality
• Difficult weather conditions affected wood harvesting
• The President of Finland inaugurated the Äänekoski bioproduct mill
• Metsä Wood decided to build a new Kerto® LVL line at Punkaharju mill
• Ilkka Hämälä was elected Chairman of the Finnish Forest Industries
Federation
8 February 20184
Metsä Group – Result 2017
Events in the fourth quarter of 2017
Metsä Group

5. 8 February 2018 Metsä Group5
Sales
Metsä Group – Result 2017
EUR million
4,939 4,970 5,016
4,658
5,040
0
1000
2000
3000
4000
5000
6000
2013 2014 2015 2016 2017

6. 8 February 20186
1,254 1,265
1,204
1,248 1,255
1,330
1,225 1,205
1,156 1,184
1,143
1,175
1,216 1,235 1,260
1,328
0
200
400
600
800
1 000
1 200
1 400
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Sales quarterly
Metsä Group – Result 2017
EUR million
Metsä Group

7. 8 February 2018 Metsä Group7
Comparable operating result
Metsä Group – Result 2017
EUR million
343
418
537
439
566
0
100
200
300
400
500
600
2013 2014 2015 2016 2017

8. 8 February 20188
Operating result
Metsä Group – Result 2017
105
92
104
117
129
137
149
123
109
120
103 107
128
119
134
185
70
160
103
84
118
154
142
128
107
119
107
110
131
122
143
184
0
20
40
60
80
100
120
140
160
180
200
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Comparable operating result Operating result (IFRS)
EUR million
Metsä Group

9. 8 February 20189
53
64 68 71
89
94
73
87
105
92
104
117
129
137
149
123
109
120
103 107
128
119
134
185
0
20
40
60
80
100
120
140
160
180
200
Q1/12
Q2
Q3
Q4
Q1/13
Q2
Q3
Q4
Q1/14
Q2
Q3
Q4
Q1/15
Q2
Q3
Q4
Q1/16
Q2
Q3
Q4
Q1/17
Q2
Q3
Q4
Comparable operating result
Metsä Group – Result 2017
EUR million
Metsä Group

10. Change in comparable operating result
8 February 201810
Metsä Group – Result 2017
EUR million
Comparable operating result 2016 439
Sales prices 76
Sales volumes 92
Exchange rates 15
Raw materials and energy -2
Depreciation -18
Change of inventories -27
Other -9 127
Comparable operating result 2017 566
Metsä Group

11. Items affecting comparability 2017
8 February 201811
Metsä Group – Result 2017
EUR million 2017
Operating result (IFRS) 581.0
Items affecting comparability:
Metsä Board / dissolved subsidiaries in England 10.2
Metsä Board / sale of Kyro’s paper machine, net 3.4
Metsä Wood / divestment of the project business 3.3
Metsä Wood / a dissolved subsidiary in England -1.4
Other -0.7
Items total +14.8
Comparable operating result 566.1
Metsä Group

12. 8 February 2018 Metsä Group12
Comparable ROCE
Metsä Group – Result 2017
9.1
11.4
13.6
10.2
12.3
0
2
4
6
8
10
12
14
16
2013 2014 2015 2016 2017
%
Target >10 %

13. 8 February 201813
Equity ratio
Metsä Group – Result 2017
37.9 37.9
43.2 43.9 45.0
0
5
10
15
20
25
30
35
40
45
50
2013 2014 2015 2016 2017
%
Metsä Group

14. 8 February 201814
Interest-bearing net liabilities
Metsä Group – Result 2017
1,510
938
610
1,033 993
0
200
400
600
800
1 000
1 200
1 400
1 600
2013 2014 2015 2016 2017
EUR million
Metsä Group

15. 8 February 201815
Capital expenditure
Metsä Group – Result 2017
214
143
492
758
608
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 2017
EUR million
Metsä Group

16. Income statement
8 February 201816
Metsä Group – Result 2017
EUR million 2017 2016 Change
Sales 5,040.0 4,657.9 382.1
Other operating income 60.3 70.5 -10.2
Operating expenses -4,269.7 -4,041.8 -227.9
Depreciation and impariment losses -249.7 -244.3 -5.4
Operating result 581.0 442.3 138.6
Comparable operating result 566.1 438.6 127.5
Share of results from associated companies and joint ventures 17.1 -1.1 18.2
Exchange gains and losses -3.3 -5.7 2.4
Other net financial items -88.5 -74.9 -13.6
Result before tax 506.2 360.6 145.6
Metsä Group

17. Key figures
8 February 201817
Metsä Group – Result 2017
2017 2016 Change
Return on capital employed, % 12.6 10.2 2.4
Comparable return on capital employed, % 12.3 10.2 2.1
Return on equity, % 14.5 11.2 3.2
Comparable return on equity, % 14.0 11.0 3.0
Equity ratio, % 45.0 43.9 1.1
Net gearing ratio, % 34 40 -6
Interest-bearing net liabilities, EUR million 993 1,033 -40
Capital expenditure, EUR million 608 758 -150
Personnel at end of period 9,126 9,300 -174
Metsä Group

18. Cash Flow Statement I
8 February 201818
Metsä Group – Result 2017
EUR million 2017 2016
Cash flow from operating activities
Result for the period 403.9 279.9
Adjustments to result for the period 405.7 350.5
Interest received 2.2 3.0
Interest paid -72.5 -54.2
Dividends received 2.3 1.6
Taxes -65.3 -115.5
Other financial items, net -22.3 8.6
Change in working capital 95.4 -126.2
Net cash flow from operating activities 749.4 347.8
Metsä Group

19. Cash Flow Statement II
8 February 201819
Metsä Group – Result 2017
EUR million 2017 2016
Net cash flow from operating activities 749.4 347.8
Purchase of shares -2.6 0.0
Acquired shares from non-controlling interests -27.7 0.0
Investments -607.7 -757.9
Sales of assets and others 30.8 67.9
Change in members’ capital and other capital 58.5 65.9
Interest on members’ capital and dividends paid -122.1 -120.2
Change in long-term loans and committed facilities 99.6 169.6
Change in cash and cash equivalents 178.2 -226.8
Cash and cash equivalents at beginning of the period 895.1 1,120.8
Translation differences and others -0.9 1.1
Change in cash and cash equivalents 178.2 -226.8
Cash and cash equivalents at end of the period 1,072.4 895.1
Metsä Group

20. 8 February 201820
Personnel
Metsä Group – Result 2017
10,736 10,410
9,599 9,300 9,126
0
2 000
4 000
6 000
8 000
10 000
12 000
2013 2014 2015 2016 2017
Metsä Group

21. Wood Supply and
Forest Services

22. Wood Supply and Forest Services
8 February 201822
Metsä Forest – Wood Supply and Forest Services
EUR million 2017 2016 Change
Sales 1,634.4 1,534.4 100.0
Other operating income 3.8 7.3 -3.5
Operating expenses -1,609.9 -1,507.4 -102.5
Depreciation and impairment losses -4.1 -3.4 -0.7
Operating result 24.3 30.9 -6.6
Items affecting comparability, total - -
Comparable operating result 24.3 30.9 -6.6
% of sales 1.5 2.0 -0.5
Metsä Group

23. Purchase volumes of wood increased as planned
• Supply of wood and the winter harvesting
conditions were good at the beginning of 2017
• Harvesting conditions got worse at the end of
the year, demanding special arrangements,
weakening the result and making the market
situation tougher in the entire Baltic sea area
• Volume of wood purchased was clearly higher
than in 2016. Metsä Forest delivered about 32
million cubic metres of wood (30.5)
• The sale of forest management services grew
by 20%
• The value of the wood trade in our digital
Metsäverkko service in two years totals more
than EUR 200 million
8 February 201823
Comparable operating result
EUR million
Metsä Forest – Wood Supply and Forest Services
8.7
6.9 7.0
6.3
7.8
6.5
7.7
8.9
8.5
4.4
5.9
5.4
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Metsä Group

24. Wood Products
Industry

25. Wood Products Industry
8 February 201825
Metsä Wood – Wood Products Industry
EUR million 2017 2016 Change
Sales 459.9 481.6 -21.7
Other operating income 6.8 12.2 -5.4
Operating expenses -419.4 -440.2 20.8
Depreciation and impairment losses -12.0 -13.6 1.6
Operating result 35.3 40.0 -4.7
Items affecting comparability, total -1.8 -1.3 -0.5
Comparable operating result, EUR million 33.5 38.7 -5.2
% of sales 7.3 8.0 -0.7
Metsä Group

26. Demand for engineered wood products was strong
• Sales of engineered wood products increased by
5% – particularly the delivery volumes of plywood
increased
• Demand for Kerto® LVL remained strong,
deliveries grew particularly in Australia. The Lohja
investment limited capacity temporarily
• The total sales was declined by the divestments of
the glulam and project businesses
• Profitability declined due to the uncertainty in the
UK market and the unfavourable exchange rate of
British pound
• Investments progressed well – a new Kerto line at
Lohja started up, a decision of a new Kerto line at
Punkaharju was made, and building of Pärnu
plywood mill and Äänekoski veneer line proceeded
8 February 201826
Comparable operating result
EUR million
Metsä Wood – Wood Products Industry
4.5
7.1
8.0
8.4 8.2
13.2
9.0
8.3
10.7
8.4
7.6
6.9
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Metsä Group

27. Pulp and Sawn Timber
Industry

28. Pulp and Sawn Timber Industry
8 February 201828
Metsä Fibre – Pulp and Sawn Timber Industry
EUR million 2017 2016 Change
Sales 1,875.7 1,636.0 239.7
Other operating income 22.6 25.8 -3.2
Operating expenses -1,492.2 -1,368.7 -123.5
Depreciation and impairment losses -86.5 -72.3 -14.2
Operating result 319.5 220.8 98.8
Items affecting comparability, total 0.1 -6.2 6.3
Comparable operating result, EUR million 319.7 214.6 105.1
% of sales 17.0 13.1 3.9
Metsä Group

29. 8 February 201829
Price of pulp (PIX) 2009–2017
Metsä Fibre – Pulp and Sawn Timber Industry
350
450
550
650
750
850
950
1050
350
450
550
650
750
850
950
1050
´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17
Hardwood/EUR Softwood/EUR Hardwood/USD Softwood/USD
USD EUR
Source: Foex
Metsä Group

30. Pulp market was strong in 2017
• Sales and operating result improved thanks to
increased deliveries and prices of pulp
• Market prices of softwood pulp rose by 10%
and of hardwood pulp by 18% compared to the
average prices of the previous year
• The pulp prices increased due to technical
problems among pulp producers and the import
restrictions on recycled fibre in China
• Demand for spruce and pine sawn timber was
good, and prices developed positively
• The bioproduct mill started up on schedule and
budget. The start-up phase has progressed
even better than expected
8 February 201830
Comparable operating result
EUR million
Metsä Fibre – Pulp and Sawn Timber Industry
82.0
95.6
83.4
79.7
61.2
53.2
46.4
53.7 54.5
70.8 68.4
125.9
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Metsä Group

31. Paperboard Industry

32. Paperboard Industry
8 February 201832
Metsä Board – Paperboard Industry
EUR million 2017 2016 Change
Sales 1,848.6 1,720.3 128.3
Other operating income 29.3 40.2 -10.9
Operating expenses -1,579.1 -1,525.9 -53.2
Depreciation and impairment losses -91.6 -102.3 10.7
Operating result 207.1 132.3 74.8
Items affecting comparability, total -13.6 5.2 -18.8
Comparable operating result, EUR million 193.5 137.5 56.0
% of sales 10.5 8.0 2.5
Metsä Group

33. 8 February 201833
600
700
800
900
1000
1100
1200
2011 2012 2013 2014 2015 2016 2017
Folding boxboard White-top kraftliner Source: RISI, Inc. & FOEX Indexes Ltd
Prices of folding boxboard and white-top kraftliner
in Europe 2011–2017
EUR/ tonne
Metsä Group
Metsä Board – Paperboard Industry

34. Year of strong growth in paperboard industry
• Year 2017 was Metsä Board’s first full year
as a pure paperboard company
• Deliveries of folding boxboard and white
kraftliners increased by 16% and 14%,
respectively
• Sales and the operating result improved
thanks to the increased delivery volumes of
paperboards and pulp, increased pulp prices
and the discontinuation of paper operations
• Prices of white kraftliners increased. Also
folding boxboard prices have been raised
• Exchange rate fluctuations including hedges
had a positive effect on the operating result
8 February 201834
Comparable operating result
EUR million
Metsä Board – Paperboard Industry
43.2
47.0
54.6
35.1 35.0 35.8
34.0 32.8
45.2
43.5
50.4
54.4
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Metsä Group

35. Tissue and
Cooking Papers

36. Tissue and Cooking Papers
8 February 201836
Metsä Tissue – Tissue and Cooking Papers
EUR million 2017 2016 Change
Sales 1,013.6 990.8 22.8
Other operating income 3.8 3.5 0.3
Operating expenses -905.4 -893.3 -12.1
Depreciation and impairment losses -38.5 -39.7 1.2
Operating result 73.5 61.3 12.2
Items affecting comparability, total 0.5 1.7 -1.3
Comparable operating result, EUR million 73.9 63.1 10.9
% of sales 7.3 6.4 0.9
Metsä Group

37. Higher sales volumes improved Metsä Tissue’s result
• Growth in sales and the operating result was
due to higher sales volumes
• In March, an investment to renew the deinking
plant at Mänttä, was launched. It will increase
production efficiency and prolong the life-cycle
of the plant
• An investment project was started to renew
the baking paper machine at the Düren mill. It
will increase production capacity
by 10,000 tonnes
• New converting lines for away-from-home
products in Germany and for consumer
products in Slovakia were decided to be built
8 February 201837
Comparable operating result
EUR million
Metsä Tissue – Tissue and Cooking Papers
15.8
7.6
13.2
18.6
13.5 13.2
15.8
20.6
17.6
16.3 16.8
23.3
0,0
5,0
10,0
15,0
20,0
25,0
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Metsä Group

38. Summary

39. Outlook for the business areas 1/2
Wood Supply and Forest Services
• Wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms
of energy wood, on crown wood
• Difficult weather conditions will have an effect on the wood supply in the entire Baltic Sea area. This
will increase the mill prices of wood at the beginning of the year
• Demand for forest management services is expected to remain good
Wood Products
• Demand for Kerto® LVL and plywood will remain good
• The UK market is marked by uncertainty due to the effects of Brexit
Pulp and Sawn Timber Industry
• Global demand for, and the prices of, pulp have continued to rise in January 2018, and there are no
signs of significant negative changes to the market in the near future
• Overall demand for sawn timber is expected to remain good in most markets
8 February 2018 Metsä Group39
Summary

40. Outlook for the business areas 2/2
Paperboard Industry
• Growth in the demand for high-quality consumer packaging paperboard made from fresh fibre is
expected to continue in market areas important for Metsä Board
• Metsä Board’s paperboard deliveries in January–March are expected to grow from the previous quarter.
The market prices of folding boxboard and white kraftliners are expected to rise as a result of the
announced price increases in 2017
Tissue and Cooking Papers
• In the tissue and cooking paper markets, demand is expected to remain stable in all market areas
• Demand for tissue paper is expected to increase particularly in eastern Central Europe, and demand for
cooking papers is expected to grow in Asia
• The weakening of the US dollar against the euro, including the impact of hedges, will have a negative
effect on Metsä Group’s operating result in at least the first half of the year
• Production costs in 2018 are expected to rise from the previous year
8 February 2018 Metsä Group40
Summary

41. • Metsä Group’s comparable
operating result is in the first
quarter of 2018 is expected to be
roughly at the same level as in the
fourth quarter of 2017
8 February 201841
Near-term outlook
Summary
Metsä Group