Debt Investor Presentation 4Q 2014 5.2. 2015 Mets Board Mets - - PowerPoint PPT Presentation

Metsä Group

Metsä Board

Debt Investor Presentation 4Q 2014

5.2. 2015

Metsä Group

Metsä Board

Net Debt Reduced to EUR 427 Million Thanks to Strong Cash Flow

‒ Cash flow from operations EUR 83 million in 4Q and EUR 210 million in 2014 (EUR 127 million in 2013) ‒ Gross debt EUR 684 million and net debt EUR 427 million at end 2014 ( EUR 597 million at end 2013) ‒ Net gearing 51 % (70 %), equity ratio 39 % (41 %) and average interest rate 4,0 % (4,8 %) at the end of 2014 ‒ Net debt to EBITDA dropped to below 2 ‒ Strong liquidity position ‒ Moody’s raised Metsä Board’s credit rating to B1 in 4Q 2014

2

Net Debt / EBITDA Net Debt

1,8 2,7 1 2 3 4 5

2010 2011 2012 2013 2014

EUR million

427 827 250 500 750 1000

2010 2011 2012 2013 2014

Metsä Group

Metsä Board

Loans and Interest Rate

At the end of 2014 ‒ Average maturity of long term loans 3,5 years ‒ Average interest rate of loans (including derivatives) 4,0 % ‒ Interest rate maturity of loans (including derivatives) 27 months ‒ Of the loans about 23 per cent was subject to variable interest rates and 77 per cent to fixed interest rates

3

Metsä Group

Metsä Board

Diversified Funding Sources

4

Long-Term Interest Bearing Liabilities 31.12. 2014

33 % 8 % 3 % 29 % 27 % Bonds Pension premium loans Loans from financial institutions Finance leases Other interest bearing liabilities

Total 681 m€

Metsä Group

Metsä Board

Interest Bearing Net Liabilities 31.12. 2014

‒ Long-term 681 ‒ Short-term 4 Total interest bearing liabilities 684 ‒ Liquidity and interest bearing receivables 257 Interest bearing net liabilities 427

5

m€

Metsä Group

Metsä Board

Well Balanced Maturity Schedule

100 37 83 181 254 25 1 100 46 50 100 150 200 250 300 2015 2016 2017 2018 2019 2020 2021 >2021 Long-term interest bearing liabilities Committed undrawn credit facilities

m€

6

Long-term Interest Bearing Liabilities and Committed Undrawn Credit Facilities 31.12.2014

Metsä Group

Metsä Board

Balance Sheet Ratios

7

777 827 783 625 597 427 17,7 2,7 4,4 3,4 2,9 1,8 100 200 300 400 500 600 700 800 900 2009 2010 2011 2012 2013 2014 2 4 6 8 10 12 14 16 18 20

Net Debt and Net Debt/EBITDA* Net Gearing

51 84 83 106 72 70

20 40 60 80 100 120 2009 2010 2011 2012 2013 2014

Net debt, EUR million Net debt/EBITDA *Excluding non-recurring items %

Target max. 70 %

Metsä Group

Metsä Board

39,2 33,3 32,4 38,7 40,7 41,0 39,8 39,8 5 10 15 20 25 30 35 40 45

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

51 57 65 69 70 75 74 69 10 20 30 40 50 60 70 80

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Quarterly Balance Sheet Ratios

Equity Ratio Net gearing

% %

8

Metsä Group

Metsä Board

Debt Programs 31.12.2014

9

The following table sets forth the significant debt securities issued and outstanding of Metsä Board as at Dec. 31, 2014 Average Long-term borrowings Total amount Outstanding Interest Rate *) Maturity EUR 225 million Bond Issue 2014 EUR 225 EUR 225 4,5 % 2019 Syndicated credit facility 2014 EUR 250 EUR 150 4,0 % 2018 EUR 105 million bilateral loans EUR 105 EUR 105 3,5 % 2015-2017 EUR 23 million finance leases EUR 23 EUR 23 2,2 % 2015-2020 EUR 229 million pension loans EUR 229 EUR 184 3,8 % 2015–2020 *) The average interest rate take into account outstanding interest rate swaps and amortised arrangement fees. Average interest rate of all Metsä Board interest bearing liabilities including interest rate derivatives per 31.12.2014 is 4,0 %. The following table sets forth Metsä Board´s principal long-term liquidity reserves as at December 31, 2014: Average Liquidity reserves Total amount Outstanding Interest Rate *) Maturity (EUR in millions) Revolving Credit Facility 2014 EUR 100 EUR 0 – 2018 Pension loan facilities EUR 229 EUR 184 3,8 %

• Short-term funding programmes

Metsä Group internal short-term limit EUR 150 EUR 0 – 0-12 months Metsä Group Treasury funding programmes: EUR 150 million domestic CP-program EUR 150 EUR 0 – 0-12 months (currency in millions)

Metsä Group

Metsä Board

Ratings’ History

2000 S&P: Short term ratings lowered to A3, Long term ratings placed to credit watch negative Moody’s: Long and short term ratings

• utlook changed from stable to negative

2001 S&P: Long term ratings lowered to BBB-, stable outlook Moody’s: Long and short term ratings lowered to Baa3/P3, negative outlook 2003 S&P: Downgrade to BB+, stable outlook Moody’s: Downgrade to Ba1, negative

• utlook

2004 S&P: Outlook changed from stable to negative, ratings affirmed Moody’s: Downgrade to Ba2, stable outlook 2005 S&P: Downgrade to BB, stable outlook Moody’s: Outlook changed from stable to negative, ratings affirmed 2006 S&P: Downgrade to BB-, negative outlook Moody’s: Downgrade to Ba3, negative outlook Moody’s: Downgrade to B2, negative outlook S&P: Downgrade to B+, negative outlook 2007 Moody’s: Downgrade to B3, negative outlook S&P: Downgrade to B, negative outlook S&P: Downgrade to B-, stable outlook 2008 S&P: Outlook to negative 2009 S&P: Downgrade to CCC+, negative outlook Moody’s: Downgrade to Caa1, outlook negative 2010 S&P: Outlook to stable Moody’s: Outlook to stable S&P: Upgrade to B-, stable outlook Moody’s: Upgrade to B3, outlook to positive 2011 S&P: Outlook to positive S&P: Outlook to stable Moody’s: Outlook to stable 2012 Moody’s: Outlook to positive 2013 S&P: Outlook to positive Moody’s: Upgrade to B2, outlook stable S&P: Upgrade to B, outlook stable Moody’s: Outlook to positive 2014 S&P: Outlook to positive Moody’s: Upgrade to B1, outlook positive

10

Metsä Group

Metsä Board

Positive Rating Development

11

Moody’s

Standard & Poor’s

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BB+ | Ba1 BB | Ba2 BB- | Ba3 B+ | B1 B | B2 B- | B3 CCC+ | Caa1 CCC | Caa2

Positive Positive

Metsä Group

Metsä Board

Thank You!

www.metsaboard.com Juha Laine

Head of IR +358 10 4654335 juha.laine@metsagroup.com