CEO Ilkka Hämälä's presentation about Metsä Group's Q3 2022 result

1. 27 October 2022
Metsä Group
Interim report Q1–Q3/2022
Ilkka Hämälä, President and CEO
28.4.2022 1

2. • Sales EUR 5,239 million (1–9/2021: EUR 4,457 million)
• Operating result* EUR 966 million (694)
• Operating result* 18.4% of sales (15.6)
• Return on capital employed* 20.0% (16.4)
• The sales and operating result improved mainly due to higher
sales prices of pulp
• Exchange rate fluctuations had a positive effect of approximately
EUR 96 million
2
Record high result for Metsä Group
Metsä Group – Q1–Q3/2022
*Comparable

3. • Investments progressed in exceptional circumstances and under the
influence of strong cost inflation. The plans were adapted to the
situation
• The new pine sawmill in Rauma and the renewed tissue paper
machine in Mänttä started continuous production
• Metsä Board started pre-engineering for a new folding boxboard mill
in Kaskinen, Finland. The annual capacity would be 800,000 tonnes
• The results of the ethics barometer measuring the responsibility of
the corporate culture, improved compared to the previous survey
3
Events during the third quarter
Metsä Group Q3/2022

4. 4
1,438
1,372 1,374
1,290 1,253
1,200
1,245
1,357
1,400
1,542 1,515
1,560 1,594
1,822 1,823
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Q1/2019 Q2 Q3 Q4 Q1/2020 Q2 Q3 Q4 Q1/2021 Q2 Q3 Q4 Q1/2022 Q2 Q3
Sales remained high in Q3/2022
EUR million
Metsä Group Q1–Q3/2022

5. 5
180
128
110
76
62
96
115
94
174
242
278
220
244
330
391
0
50
100
150
200
250
300
350
400
Q1/2019 Q2 Q3 Q4 Q1/2020 Q2 Q3 Q4 Q1/2021 Q2 Q3 Q4 Q1/2022 Q2 Q3
EUR million
Comparable operating result record high in Q3/2022
Metsä Group Q1–Q3/2022

6. 6
Change in comparable operating result
EUR million
Comparable operating result 1–9/2021 694
Sales prices 805
Sales volumes​ -66
Exchange rates (after hedging)​ 96
Change in wood raw material unit costs ​ -96
Change in raw material, energy and other variable costs unit costs​ -453
Employee costs​ -35
Maintenance and other fixed costs​ -50
Change in inventories (including volume and valuation)​ 51
Depreciation and other​ 19
Comparable operating result 1–9/2022 966
Metsä Group Q1–Q3/2022

7. 7
Items affecting comparability
EUR million 1–9/2022
OPERATING RESULT (IFRS) 986
Items affecting comparability:​
Divestment of the holding in Finsilva Oyj ​ -79
Items related to the discontinuation of business operations in Russia​ 81
Sale of the share capital of Oy Hangö Stevedoring Ab​ -19
Sale of a land area not related to Metsä Board’s business operations​ -7
Impairment recognised in the assets of the Kyrö sawmill 6
Valuation gains related to the sale of Board's and Tissue's share holdings​ -3
Items related to to the adjustment measures concerning Kemi Shipping Oy 1
Items total -21
COMPARABLE OPERATING RESULT​ 966
Metsä Group Q1–Q3/2022

8. 17.1
11.0
7.0
16.4
20.0
0
2
4
6
8
10
12
14
16
18
20
22
1-9/2018 1-9/2019 1-9/2020 1-9/2021 1-9/2022
8
Comparable ROCE
Metsä Group Q1–Q3/2022
%
Target > 12%

9. 9
Equity ratio
53.1
56.2 57.2
61.6 60.2
0
10
20
30
40
50
60
70
2018 2019 2020 2021 9/2022
%
Metsä Group Q1–Q3/2022

10. 10
Interest-bearing net liabilities
Metsä Group Q1–Q3/2022
463
374
168
-185
82
-200
0
200
400
600
800
2018 2019 2020 2021 9/2022
EUR million

11. 11
Capital expenditure
274 260
401
994
1,084
0
250
500
750
1000
1250
1500
1750
2018 2019 2020 2021 1-9/2022
Full-year
estimate
EUR million
Includes investments in leased fixed assets​
Metsä Group Q1–Q3/2022

12. 12
Personnel
Metsä Group Q1–Q3/2022
9,310 9,265 9,213
9,533 9,463
0
3 000
6 000
9 000
12 000
2018 2019 2020 2021 9/2022

13. • Metsä Group delivered 25.4 million m3 of wood
in Q1–Q3/2022 (26.8 Q1–Q3/2021)
• The wood market situation in the Baltics continued to
be tight after Russian wood was excluded from market
• Russian wood was replaced with Finnish and Swedish
wood. Purchases in the Baltics declined due to high
wood prices
• Wood trade has been slower than in previous year but
was clearly more active in Q3/2022 than in Q3/2021
• The prices of pulpwood and logs were higher than
in the previous year
• Customer feedback from forest owners has been at
record level throughout the year
13
Wood sourcing proceeded according to plans and
wood trade picked up after the summer
Metsä Forest – Wood Supply and Forest Services
Sales and comparable operating result
EUR million
431
471
449
469
517 507 497 503
517 520 521
3.4
3.9
6.2
8.9
8.4
6.7
11.3
10.0
5.6
3.3
5.2
0
3
6
9
12
15
18
0
100
200
300
400
500
600
Q1/20 Q2 Q3 Q4 Q1/21 Q2 Q3 Q4 Q1/22 Q2 Q3
Sales Operating result

14. • The sales and result of the Wood Products Industry
improved due to strong demand
• The sales prices of all products rose significantly
• Increased raw material, energy and logistics prices
affected profitability negatively
• The availability of birch logs was weakened by the
end of wood deliveries from Russia
• An environmental permit application for the Kerto®
LVL mill in Äänekoski was submitted
14
Strong demand for wood products
Metsä Wood – Wood Products Industry
87
104
122
117
141
156
142 141
170
175
160
-3.3
1.3
6.6
4.7
7.0 6.8
5.4
-0.7
9.1
11.6
14.8
-4
0
4
8
12
16
20
24
-30
0
30
60
90
120
150
180
Q1/20 Q2 Q3 Q4 Q1/21 Q2 Q3 Q4 Q1/22 Q2 Q3
Sales Operating result
Sales and comparable operating result
EUR million

15. • Demand for and prices of pulp remained high.
Profitability was supported by the strengthening of
the US dollar
• After a period of strong performance, the demand
for and prices of sawn timber started decreasing
• Maintenance shutdowns of several sawmills and
Kemi pulp mill were implemented in the Q3
• The workforce at Kemi bioproduct mill site is at its
largest during the autumn of 2022
• The new sawmill in Rauma was started up, and
sawmill operations in Kyrö ended during Q3
Pulp and Sawn Timber Industry further improved
the excellent result
Metsä Fibre – Pulp and Sawn Timber Industry
412 428
459
528
561
652
693
722
673
808
834
-21.3
16.0 17.1
-8.0
72.1
168.0
225.9
182.3
155.4
232.5
291.0
-40
0
40
80
120
160
200
240
280
320
360
-100
0
100
200
300
400
500
600
700
800
900
Q1/20 Q2 Q3 Q4 Q1/21 Q2 Q3 Q4 Q1/22 Q2 Q3
Sales Operating result
Sales and comparable operating result
EUR million
15

16. • Good demand for folding boxboard and kraftliner
continued
• The result improved especially due to higher prices of
paperboards and market pulp
• Cost inflation was strong in chemicals, logistics and
energy
• The recovery boiler and turbine investment at the
Husum mill will be completed by the end of 2022
• Metsä Board’s investments in Kemi and Husum are
progressing as planned
• The pre-engineering for an 800,000-tonne annual
capacity folding boxboard mill in Kaskinen was started
16
Paperboard industry achieved an excellent result again
Metsä Board – Paperboard Industry
472 473 471 473
494
556
516 518
582
651 647
33.8
60.5 62.5 64.5
88.8
102.5 104.0
91.3
121.5
145.9 153.0
0
25
50
75
100
125
150
175
200
225
0
100
200
300
400
500
600
700
Q1/20 Q2 Q3 Q4 Q1/21 Q2 Q3 Q4 Q1/22 Q2 Q3
Sales Operating result
Sales and comparable operating result
EUR million

17. • Sales volumes continued to increase in Q3/2022
particularly in tissue paper products for professional use
• Tissue paper business was burdened by the increase in
energy costs, which could not be fully offset with
product pricing
• Temporary production shutdowns took place in Q3 in
Germany and Slovakia due to high energy prices
• The renewed tissue paper machine of the Mänttä mill
began continuous production in September
• The environmental permit of the renewal of the Mariestad
mill is expected at the end of 2022
17
Heavy cost inflation burdens the result of Tissue
and Greaseproof Papers
Metsä Tissue – Tissue and Greaseproof Papers
Sales and comparable operating result
EUR million
293
224
237
258
224 224
239
259 255
281
317
40,5
23,6 22,7
27,1
16,4
0,7
-3,7
-23,2
-18
-9,7 -4,6
-30
-15
0
15
30
45
60
75
90
105
-100
-50
0
50
100
150
200
250
300
350
Q1/20 Q2 Q3 Q4 Q1/21 Q2 Q3 Q4 Q1/22 Q2 Q3
Sales Operating result

18. • The Russia’s war in Ukraine creates uncertainties on the world
economy and cause cost inflation
• The construction activity is decreasing in Europe affecting the
demand for Kerto LVL and plywood
• The demand for softwood pulp is expected to be stable. Uncertainty
is caused by the slowing Chinese economic growth and the impact
of the European energy crisis on paper and paperboard production
• The low demand for sawn timber is expected to continue
• Demand for paperboards is expected to remain stable. The
weakening of economic growth and consumers’ purchasing power
create uncertainty
• Tissue paper business environment is unstable. The costs are high,
and energy costs are expected to rise in the winter. The availability
of raw materials remains challenging
Market outlook
Summary

19. Near-term result outlook
Summary
Metsä Group’s comparable operating result is in
October–December 2022 expected to weaken
from July–September 2022

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