- Metsä Group's sales were EUR 1,253 million in Q1/2020, down from EUR 1,438 million in Q1/2019, with the operating result at EUR 62 million compared to EUR 180 million. Lower pulp prices and strikes in Finland weakened the result. - Events in Q1/2020 included investment decisions for a new sawmill in Rauma and progress on the environmental assessment for the Kemi bioproduct mill. - The coronavirus pandemic increased demand for tissue papers and paperboard but reduced demand for wood products in some markets. Pulp market development was modestly positive.

2. Metsä Group
Interim report Q1/2020
Ilkka Hämälä
President and CEO
29 April 2020

3. • The safety of Metsä Group’s employees, preventing any further
spread of the pandemic as part of society and ensuring business
continuity are of primary importance
• The restrictions and recommendations issued by the authorities
concerning the pandemic are monitored continuously. The most
important is maintaining a physical distance
• Different functions have drawn up precautionary measures in
advance, so that they will be able to ensure the personnel’s safety
and business continuity
• Resource situation has remained normal throughout the pandemic
• Production and deliveries have run normally, with the exception of
Metsä Wood’s units in the UK and partially the Metsä Svir sawmill
and wood supply operations in Russia
29.4.2020 Metsä Group3
Impacts of the
coronavirus pandemic
Metsä Group – The coronavirus pandemic

4. • Sales EUR 1,253 million (Q1/2019: EUR 1,438 million)
• Operating result* EUR 62 million (EUR 180 million)
• Operating result* 5% of sales (12.5%)
• Return on capital employed* 4.9% (13.8%)
• Operating result was weakened mainly by lower pulp prices
and the strikes in Finland which impacted all Metsä Group’s
business areas
• Exchange rate fluctuations had a positive effect on the result
• The coronavirus pandemic increased demand for tissue papers
and paperboard. The development of the pulp market was
modestly positive
29.4.2020 Metsä Group4
Metsä Group’s result lower
than a year ago
Metsä Group – Q1 2020
*Comparable

5. • Average long-fibre pulp price was stable and short-fibre pulp
price decreased slightly from Q4/2019. The prices were clearly
lower than in Q1/2019
• The strikes had a roughly EUR 50 million negative result impact,
of which EUR 45 million concerned Q1/2020
• Paperboard deliveries were on a higher level than in Q1/2019
• Investment decision of the EUR 200 million sawmill in Rauma
was made
• The environmental impact assessment of the Kemi bioproduct
mill was concluded
• The permission to begin the construction of Husum’s new
recovery boiler was received
• EUR 10 million investment in a new tissue paper line at Raubach
29.4.20205
Events during the first quarter
Metsä Group – Q1 2020
Metsä Group

6. 29.4.2020 Metsä Group6
1,156 1,184
1,143 1,175
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
0
200
400
600
800
1,000
1,200
1,400
1,600
Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales quarterly
EUR million
Metsä Group – Q1 2020

7. 29.4.2020 Metsä Group7
109
120
103 107
128
119
134
185
208 210
223
208
180
128
110
76
62
0
50
100
150
200
250
Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Metsä Group – Q1 2020
EUR million
Comparable operating result, quarterly

8. Change in comparable operating result
Metsä Group8
Metsä Group – Q1 2020
EUR million
Comparable operating result Q1/2019 180
Sales prices -92
Sales volumes -30
Exchange rates 17
Wood raw material -2
Raw materials, energy and other variable costs 5
Employee costs 8
Maintenance and other fixed costs -1
Change in inventory -14
Depreciation and other -9
Comparable operating result Q1/2020 62
29.4.2020

9. Items affecting comparability
Metsä Group9
Metsä Group – Q1 2020
EUR million Q1/2020
OPERATING RESULT (IFRS) 61.1
Items affecting comparability:
Metsä Tissue / Items related to the sales of napkin business 1.3
Items affecting comparability, total 1.3
COMPARABLE OPERATING RESULT 62.4
29.4.2020

10. 29.4.2020 Metsä Group10
Comparable ROCE
Metsä Group – Q1 2020
10.6
12.5
16.6
13.8
4.9
0
4
8
12
16
20
Q1/2016 Q1/2017 Q1/2018 Q1/2019 Q1/2020
%
Target > 12%

11. 29.4.2020 Metsä Group11
Equity ratio
Metsä Group – Q1 2020
43.9 45.0
53.1
56.2 56.2
0
10
20
30
40
50
60
2016 2017 2018 2019 3/2020
%

12. 29.4.2020 Metsä Group12
Interest-bearing net liabilities
Metsä Group – Q1 2020
1,033 993
463
374
449
0
300
600
900
1,200
1,500
2016 2017 2018 2019 3/2020
EUR million

13. 29.4.2020 Metsä Group13
Capital expenditure
Metsä Group – Q1 2020
EUR million
762
631
274 260
62
0
200
400
600
800
1000
2016 2017 2018 2019 Q1/2020
Full year
estimate
Includes investments in leased fixed assets.

14. 29.4.2020 Metsä Group14
Personnel
Metsä Group – Q1 2020
9,300 9,126 9,310 9,265 9,154
0
3,000
6,000
9,000
12,000
2016 2017 2018 2019 03/2020

15. Wood delivery volumes decreased from last year
• The prices of logs and pulpwood were stable
• Due to the warm and wet winter, harvesting and
transport conditions were challenging
• Wood harvesting and deliveries were carried out
according to plan with the exception of the
temporary halt due to the strikes
• A total of 7.9 million m3 of wood was delivered (9.4)
• 80% advance funding for regeneration fellings
between February and April
• 55% of wood acquired from private forest owners
was purchased digitally. In the sales of forest
management services, the figure was 57%
29.4.2020 Metsä Group15
Sales and comparable operating result
EUR million
Metsä Forest – Wood Supply and Forest Services
490 496
471
526 526
508
474 465
431
8.7
5.8
8.9 8.9
11.3
5.6
5.0
5.6
3.4
0
3
6
9
12
15
18
0
100
200
300
400
500
600
Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales Operating result

16. The delivery volumes and profitability of wood products
industry declined due to the strikes in Finland
• The delivery volumes of engineered wood products
declined in all product categories
• Sales prices of spruce plywood and Kerto LVL
remained on the previous year’s level, whereas the
prices of birch plywood declined
• The profitability of the UK business improved from
the comparison period but the demand in the UK
declined due to the coronavirus pandemic
• Production at Metsä Wood’s UK units has been at a
standstill since 24 March due to the coronavirus
pandemic
29.4.2020 Metsä Group16
Sales and comparable operating result
EUR million
Metsä Wood – Wood Products Industry
109
119
106 108 111 119 111
93
87
6.2
5.5
2.8
2.2 1.8
3.3 3.1
-1.1
-3.3
-5
0
5
10
15
-40
0
40
80
120
Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales Operating result

17. Modestly positive development in the pulp market
in recent weeks
• Result was weakened compared to Q1/2019 by
the lower pulp prices and the strikes in Finland
• Delivery volumes of pulp and sawn timber declined
clearly
• Exchange rate development had a positive impact
• Demand for softwood pulp has grown compared to
Q1/2019 and the prices have recovered slightly.
Demand for tissue papers has increased and for
printing papers declined during the pandemic
• Metsä Fibre made the decision to build the EUR
200 million sawmill in Rauma
• The pre-engineering of Kemi bioproduct mill is
proceeding as planned. Readiness to make
investment decision in the autumn of 2020
29.4.2020 Metsä Group17
Sales and comparable operating result
EUR million
Metsä Fibre – Pulp and Sawn Timber Industry
601
629 609 630 623
556 567
490
412144.9
164.9
187.0
172.0
122.4
83.1
33.0
9.9
-21.3
-50
0
50
100
150
200
250
-150
0
150
300
450
600
750
Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales Operating result

18. 29.4.2020 Metsä Group18
Price of pulp (PIX) in Europe and China
Metsä Fibre – Pulp and Sawn Timber Industry
400
600
800
1000
1200
1400
400
600
800
1000
1200
1400
´12 ´13 ´14 ´15 ´16 ´17 ´18 ´19 ´20
Hardwood/EUR Softwood/EUR Hardwood/USD
Softwood/USD Softwood/China/USD
USD EUR
Source: Fast Markets Foex

19. Paperboard business at a good level
• Paperboard delivery volumes increased in Q1/2020
compared to Q1/2019 despite of the strike
• Coronavirus pandemic has increased the demand
for paperboard
• The price of folding boxboard in Europe was
unchanged and the price of white kraftliner slightly
lower than a year ago
• The result was weakened by the lower prices of
market pulp and the strike in Finland
• Production costs declined due to lower of wood and
energy prices
• Investments in the modernisation of Husum pulp
mill in Q1/2020 were EUR 24 million
29.4.2020 Metsä Group19
Sales and comparable operating result
EUR million
Metsä Board – Paperboard Industry
492
519
475 458
487 477 489 478 472
69.0
59.2
64.0
60.0 61.8
41.0 42.5
39.1
33.8
0
20
40
60
80
100
120
0
100
200
300
400
500
600
Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales Operating result

20. 29.4.2020 Metsä Group20
600
700
800
900
1000
1100
1200
2012 2013 2014 2015 2016 2017 2018 2019 2020
Folding boxboard White-top kraftliner Sources: Fastmarkets RISI & Fastmarkets FOEX
Prices of folding boxboard and white-top kraftliner
in Europe 2011–Q1/2020
EUR/tonne
Metsä Board – Paperboard Industry

21. Excellent result in tissue and greaseproof papers
• Demand and sales increased substantially as a
result of the coronavirus pandemic
• The result improved mainly by increased demand,
implemented efficiency measures and lower raw
material costs
• The strike affected production volumes in Finland
• Metsä Tissue invested EUR 10 million in a new
tissue paper production line for professional use at
its Raubach mill
• Metsä Tissue finalized the divestment of its napkin
business to keeeper Groupille in February 2020
29.4.2020 Metsä Group21
Sales and comparable operating result
EUR million
Metsä Tissue – Tissue and Greaseproof Papers
259 256 254
270 267 266 263 264
293
12.3 11.5
6.4 6.1
10.5
13.5
22.8
26.6
40.5
0
10
20
30
40
50
60
0
50
100
150
200
250
300
Q1/18 Q2 Q3 Q4 Q1/19 Q2 Q3 Q4 Q1/20
Sales Operating result

22. • The declined sawn timber demand due to the coronavirus
pandemic will reduce harvesting in the Baltic Sea region
• The order books for wood products are at a higher level than last
year. The coronavirus pandemic will have a weakening impact
• Metsä Group’s sawn timber demand is expected to remain at the
current level
• High demand for tissue papers, the weaker availability of recycled
paper and other producers’ production curtailments keep supply
and demand of pulp in balance
• Paperboard deliveries in the Q2/2020 are expected to be roughly at
the same level as in the Q1/2020. The prices are forecast to remain
stable
• Strong growth in for tissue paper demand is expected to level off in
the near future
29.4.2020 Metsä Group22
Summary
Market outlook

23. Metsä Group’s comparable operating
result is in Q2 2020 expected to
improve from Q1 2020
29.4.2020 Metsä Group23
Near-term result outlook
Summary

24. • The total value of the agreements is approximately EUR
500 million and their degree of Finnish content 70 per cent
• Equipment to Rauma sawmill will be delivered by Veisto
Oy, Nordautomation Oy, Heinolan sahakoneet Oy,
C.Gunnarssons Verkstads AB and Renholmen AB
• A preliminary agreement on the delivery of the key
technology and automation for all of the main production
lines of the Kemi bioproduct mill has been signed with
Valmet
These investments create well-being on many levels in
Finland
29.4.2020 Metsä Group24
Event after the period
Main equipment purchases for
Rauma and Kemi agreed