Metsä Group reported financial results for the first quarter of 2021 that showed increases in sales, operating result, and return on capital employed compared to the same period in 2020. Sales were €1.4 billion, up 12% year-over-year, and the operating result was €174 million compared to €62 million in Q1 2020. Higher sales prices for pulp contributed significantly to the improved results. The company also announced several ongoing investment projects and capacity expansion plans across its business areas. For the near future, Metsä Group expects its comparable operating result to further improve from Q1 2021 levels.

1. 28 April 2021
Metsä Group
Interim report Q1/2021
Ilkka Hämälä, President and CEO

2. • Sales EUR 1,400 million (Q1/2020: EUR 1,253 million)
• Operating result* EUR 174 million (EUR 62 million)
• Operating result* 12.4% of sales (5.0)
• Return on capital employed* 12.6% (4.9)
• Sales and operating result increased mainly due to the
higher sales prices of pulp
• Result of the comparison period was weakened by the
strikes in Finland
• Exchange rate fluctuations had a negative result effect of
approximately EUR 20 million
Metsä Group's result improved
clearly
28 April 2021
Metsä Group – Q1/2021
*comparable

3. • Pulp prices continued to increase
• Paperboard delivery volumes were record high and demand
remained strong
• Metsä Group made an investment decision on the
EUR 1.6 billion Kemi bioproduct mill
• Metsä Board started pre-engineering to increase Husum mill’s
folding boxboard capacity by approximately 200,000 tonnes
• Metsä Board sold 30% of the Husum pulp mill to Norra Skog
• Metsä Group started renewing its ERP system
• Metsä Group launched the textile fibre brand Kuura
• The investment projects progressed as planned
Events during the first quarter
28 April 2021
Metsä Group – Q1/2021

4. 28 April 2021 4
1,216 1,235 1,260
1,328
1,428
1,477
1,386
1,419 1,438
1,372 1,374
1,290
1,253
1,200
1,245
1,357
1,400
0
200
400
600
800
1 000
1 200
1 400
1 600
Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Sales quarterly
EUR million
Metsä Group – Q1/2021

5. 28 April 2021 5
128
119
134
185
208 210
223
208
180
128
110
76
62
96
115
94
174
0
50
100
150
200
250
Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Metsä Group – Q1/2021
EUR million
Comparable operating result, quarterly

6. 28 April 2021 6
Change in comparable operating result
Metsä Group – Q1/2021
EUR million
Comparable operating result 1–3/2020 62
Sales prices 74
Sales volumes 13
Exchange rates (after hedging) -20
Change in wood raw material unit costs 14
Change in raw material, energy and other variable costs unit costs 18
Employee costs -21
Maintenance and other fixed costs 3
Change in inventories (including volume and valuation) 31
Depreciation and other 1
Comparable operating result 1–3/2021 174

7. 28 April 2021 7
Items affecting comparability
Metsä Group – Q1/2021
EUR million
Q1/2021
OPERATING RESULT (IFRS) 135.8
Items affecting comparability:
Items related to the impairments of the existing Kemi pulp mill 38.2
Items affecting comparability, total 38.2
COMPARABLE OPERATING RESULT 173.9

8. 28 April 2021 8
Comparable ROCE
Metsä Group – Q1/2021
12.5
16.6
13.8
4.9
12.6
0
4
8
12
16
20
Q1/2017 Q1/2018 Q1/2019 Q1/2020 Q1/2021
%
Target > 12%

9. 28 April 2021 9
Equity ratio
Metsä Group – Q1/2021
45.0
53.1
56.2 57.2 57.6
0
10
20
30
40
50
60
2017 2018 2019 2020 3/2021
%

10. 28 April 2021 10
Interest-bearing net liabilities
Metsä Group – Q1/2021
993
463
374
168
-68
-100
100
300
500
700
900
1 100
2017 2018 2019 2020 3/2021
EUR million

11. 28 April 2021 11
Capital expenditure
Metsä Group – Q1/2021
631
274
260
401
174
0
200
400
600
800
1000
1200
2017 2018 2019 2020 3/2021
EUR million
Includes investments in leased fixed assets.
Full-year
estimate

12. 28 April 2021 12
Personnel
Metsä Group – Q1/2021
9,126 9,310 9,265 9,213 9,412
0
3 000
6 000
9 000
12 000
2017 2018 2019 2020 3/2021

13. • Digital business continued to be popular during
the pandemic. Over half of the wood acquired
from private forest owners was purchased digitally
• Delivery volumes returned to the normal level. We
delivered a total of 9.6 million m3 of wood (7.9)
• Price of logs was on a clearly higher level than in
Q1/2020, the price of pulpwood rose slightly
• Harvesting and transportation conditions were
good in Finland. Frost heave complicated wood
supply in the Baltic countries towards the end of
the period
28 April 2021 13
Wood trade was clearly more active than in the
previous year
Metsä Forest – Wood Supply and Forest Services
Sales and comparable operating result
EUR million
526
508
474 465
431
471
449
469
517
11.3
5.6
5.0
5.6
3.4
3.9
6.2
8.9
8.4
0
3
6
9
12
15
18
0
100
200
300
400
500
600
Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Sales Operating result

14. • Delivery volumes of engineered wood products
increased across all product categories
• Sales prices of spruce plywood rose, and the
prices of Kerto LVL and birch plywood were on the
level of Q1/2020
• Delivery volumes of the UK business increased
clearly from the previous year
• The continuous running time of Kerto LVL mills
began successfully. 50 new employees were
recruited to support the renewal
• Total production volumes hit new record-high
levels at several mills in March
28 April 2021 14
Strong demand increased the sales and profitability
of engineered wood products
Metsä Wood – Wood Products Industry
111
119
111
93
87
104
122
117
141
1.8
3.3 3.1
-1.1
-3.3
1.3
6.6
4.7
7.0
-4
0
4
8
12
16
20
-30
0
30
60
90
120
150
Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Sales Operating result
Sales and comparable operating result
EUR million

15. • The sales volume of pulp was clearly higher than
in Q1/2020
• The rise in pulp prices in China continued strong.
The market prices in Europe began to increase in
Asia’s footsteps
• Pulp producers’ longer maintenance shutdowns,
production losses and weak availability of
containers have tightened the market situation
• Construction picked up that improved demand for
sawn timber in all markets, and prices increased
• Construction of the pine sawmill in Rauma and the
bioproduct mill in Kemi progressed as planned
28 April 2021 15
Market situation in pulp and sawn timber
improved clearly
Metsä Fibre – Pulp and Sawn Timber Industry
Sales and comparable operating result
EUR million
601
629 609
630 623
556 567
490
412 428
459
528
566
122.4
83.1
33.2
9.9
-21.3
16.0
17.1
-8.0
72.1
16,0 17,1
-8,0
72,1
-40
0
40
80
120
160
200
240
280
-100
0
100
200
300
400
500
600
700
Sales Operating result

16. Source: Fastmarkets Foex
USD / EUR
USD / EUR
16
Price of pulp (PIX) in Europe and China
Long-fibre pulp Europe, USD
Long-fibre pulp, Europe, EUR
Short-fibre pulp, Europe, EUR
Short-fibre pulp, Europe, USD
Long-fibre pulp China, USD
28 April 2021
400
500
600
700
800
900
1000
1100
1200
1300
400
500
600
700
800
900
1000
1100
1200
1300
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 20 21

17. • Profitability improved by record high paperboard
delivery volumes and increased prices of pulp
• Energy costs increased particularly due to the
higher price of electricity. Exchange rate fluctuations
had a negative result impact
• Metsä Board started pre-engineering to increase
Husum mill’s annual folding boxboard capacity by
200,000 tonnes
• Metsä Board sold a 30% share of Husum pulp mill
to Norra Skog
• Metsä Board started the development programme of
the Kemi paperboard mill to increase the annual
kraftliner capacity by 40,000 tonnes
28 April 2021 17
Metsä Board – Paperboard Industry
487 477 489 478 472 473 471 473
494
61.8
41.0 42.5
39.1
33.8
60.5 62.5 64.5
88.8
0
20
40
60
80
100
120
0
100
200
300
400
500
600
Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Sales Operating result
Sales and comparable operating result
EUR million
Strong result in paperboard business

18. 500
600
700
800
900
1000
1100
1200
500
600
700
800
900
1000
1100
1200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Folding boxboard
White-top kraftliner
Market prices of paperboard in Europe
EUR/tonne
Sources: Fastmarkets RISI & Fastmarkets FOEX
EUR/ tonne
28 April 2021 18
Metsä Board – Paperboard Industry

19. • Lower sales volumes and higher costs of raw
materials decreased the result. An exceptional peak
in demand took place during the comparison period
• Consumer demand normalized during Q1/2021.
Demand among professional customers declined
due to tighter restrictions on mobility particularly in
Central Europe
• Demand for greaseproof papers was stable
• Metsä Tissue modernises one of the tissue paper
machines at Mänttä mill
• Readiness to decide on the Mariestad investment
expected to be achieved in first half of 2022
28 April 2021 19
Restrictions due to the pandemic affected the demand
for tissue papers
Metsä Tissue – Tissue and Greaseproof Papers
267 266 263 264
293
224
237
258
224
10.5
13.5
22.8
26.6
40.5
23.6 22.7
27.1
16.4
0
10
20
30
40
50
60
0
50
100
150
200
250
300
Q1/19 Q2 Q3 Q4 Q1/20 Q2 Q3 Q4 Q1/21
Sales Operating result
Sales and comparable operating result
EUR million

20. • Demand is expected to remain good in engineered wood products
across all markets due to strong construction activity
• The demand for softwood pulp is expected to remain high in
relation to the supply
• The market for sawn timber is expected to remain strong in all
main markets, partly even exceeding supply
• Paperboard delivery volumes are expected to grow from Q1/2021.
The prices are expected to rise
• Demand for tissue papers is expected to increase once the
restrictions resulting from the pandemic can be eased. Demand
for greaseproof papers is expected to continue to grow
28 April 2021 20
Strong market outlook
Summary

21. Metsä Group’s comparable operating result
is in April–June 2021 expected to improve
from January–March 2021
28 April 2021 21
Near-term
result outlook
Summary

22. Arvonlisältään ml. kerrannaisvaikutukset suurimmat yritykset Suomessa
22
0 500 1000 1500 2000 2500 3000 3500
Bayer
ABB
Elisa
Stora Enso
Kesko
Neste
Nordea
OP
Metsä Group
UPM
Direct value added Multiplier effects
Forest industry has a strong impact on Finland’s
national economy
Source: Etla, 3/2021, data from the year 2019
EUR million
28 April 2021
The most significant companies in Finland in terms of value added including multiplier effects

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