[PPT] - Investor Presentation 4Q 2012 28.2. 2013 Mets Board Mets Group PowerPoint Presentation

SLIDE 1

Metsä Group

Metsä Board

Investor Presentation 4Q 2012

28.2. 2013

SLIDE 2

Metsä Group

Metsä Board

2

Content

Investment highlights and update 3 Investment Highlights 4 Strategy 20 Financial Targets 22 2012 Results & Outlook 33 Price Development 35 Dividend 38 Investments Funding and debt information 41 Divestments 42 Funding and Debt 50 Credit Facilities 51 Rating History General presentation 52 General Info 59 Business Portfolio 67 Operations 73 Deliveries 75 Sourcing 83 Owners 85 Market Positions

SLIDE 3

Metsä Group

Metsä Board

Investment Highlights

‒ Strong growing core in high-quality paperboards

‒ European market leader in folding boxboard and global market leader in coated white top kraftliner ‒ Increased capacity in the most profitable part of the company, folding boxboard ‒ Good further growth potential in paperboard

‒ Profitability of the paperboard production top class in its field ‒ Significant net debt reduction in recent years ‒ Material productivity improvement in recent years ‒ Measures to eliminate last paper business losses implemented ‒ Remaining paper and pulp units top class in their fields

3

SLIDE 4

Metsä Group

Metsä Board

Strategy

SLIDE 5

Metsä Group

Metsä Board

Consistent Strategic Direction

5

‒ Cartonboard is our core business

‒ Growth through maximising capacity of existing mills ‒ Good growth in Europe and lot of potential outside Europe

‒ Smaller but healthier paper business

‒ Heavy re-engineering and successful divestments

‒ Extensive fibre know-how and pulp self-sufficiency ‒ Continuous development towards Super Productivity

SLIDE 6

Metsä Group

Metsä Board

Strategic Transformation from a Paper Company to a Paperboard Company Has Been Successful

‒ Severely negative EBIT was turned clearly positive in 2010 ‒ Profitability reached the level of main competitors in 2010 ‒ The year 2011 was disappointing

‒ Weakening of the market situation in 2H ‒ Negative impacts of the measures to eliminate paper business losses

‒ Results increased steadily in 2012 and in total improved from 2011

59

150

173 74

200
100

100 200 2009 2010 2011 2012 EBIT, excl. non-rec. items

m€ 6

SLIDE 7

Metsä Group

Metsä Board

Metsä Board Is in Good Speed towards Super Productivity

Year end 7

300 600 900 1 200 1 500 1 800 2006 2007 2008 2009 2010 2011 2012 2013E

tonnes/a/person

Capacity per employee in Metsä Board’s board, paper and pulp mills

SLIDE 8

Metsä Group

Metsä Board

Packaging Material Business Is One of the Biggest Businesses in the World

Wood fibre based materials 36 % Others 64 %

‒ Demand for Good packaging is heavily increasing ‒ Good packaging is

‒ Ecological ‒ Safe ‒ Efficient marketing and communication tool ‒ Economical

Wood fibre the best raw material for Good packaging

Sources: Pira & Metsä Board

Global packaging market (~€530 Billion)

8

SLIDE 9

Metsä Group

Metsä Board

Our Focus is on Good Packaging – Fresh Forest Fibre Cartonboard Business

‒ Fresh forest fibre paperboard the most environmentally sound packaging material ‒ Wood fibre based products replace non-renewable materials like plastic and aluminium ‒ In the food segment fresh forest fibre paperboard replaces also recycled fibre based packaging materials

9

SLIDE 10

Metsä Group

Metsä Board

Up to 30% Lighter than Competitors’ Products

Metsä Board’s Success is Based on Ecological Cartonboard that Is up to 30% Lighter than Competitors

10

Metsä Board’s folding boxboard Typical folding boxboard (FBB) Solid bleached Board (SBS) White lined chipboard (WLC)

Six million cartons for biscuits = 19 000 m2 of board

Metsä Board’s New Generation Light-Weight Cartonboards Meet Growing Demand from Consumer Goods Brand Owners Very Well

Metsä Board’s innovative folding boxboards are up to 30% lighter than competitors’ products

SLIDE 11

Metsä Group

Metsä Board

Successful Strategy in Paperboard Business

‒ Focus on lightweight fresh forest fibre products and the brand owner customer segment ‒ Securing healthy price level as the market leader ‒ Productivity improved 50% from 2006 by increasing production and reducing heavily fixed costs ‒ Strategy has been successful

‒ European market share increased by more than 5%-points ‒ Prices increased by over 20% ‒ Profitability improved to best in class level EBIT, excl. non-recurring items, % of sales

11

SLIDE 12

Metsä Group

Metsä Board

Good Potential to Increase Paperboard Capacity with Smart Investments

‒ FBB capacity increased from 785 000 to 935 000 t/a

‒ New capacity fully available from early 2013

‒ Dedication of the kraftliner business to coated grades has been a great success

‒ Kemi mill’s target is to increase capacity from 375 000 to 400 000 t/a without capex

‒ Good potential to further increase current FBB machines’ capacity with Smart Investments New capacity is needed in high-quality FBB and kraftliner segments to fulfil customers’ growing demand

12

SLIDE 13

Metsä Group

Metsä Board

Metsä Board’s Lightweight Folding Boxboard Has Excellent Growth Potential Globally

‒ Global cartonboard demand growth 3-4 %/a ‒ Excellent way for consumer goods companies to improve sustainability is to replace traditional packages with Metsä Board’s safe and ecological FBB ‒ Metsä Board is further strengthening its market position in Europe, North America and Asia ‒ Threshold for new producers to enter high performance FBB segment is very high

Share of ecological FBB of total cartonboard market still low in all continents

Europe 34% North America 4% Asia 22%

13

SLIDE 14

Metsä Group

Metsä Board

High Threshold for New Producers to Enter High Performance FBB Segment

‒ High quality fresh forest fibres are a must

‒ Very difficult for newcomers to establish efficient wood sourcing and processing operations ‒ Most today’s big forest companies have developed their operations for over 100 years

‒ Excellent fibre know-how combined with own state of art chemical, mechanical and BCTMP pulping capacity vital competitive factors

‒ Only a few companies in addition to Metsä Board have full fibre control

‒ Huge multi-product board-making lines not suitable for production of high performance FBB

‒ No room for huge machines in the niche market. Swing machines’ challenge is productivity and quality consistency ‒ Skilled people and long board-making tradition needed to meet high product quality requirements

‒ Main customers are leading consumer goods companies. To be recognized by them as a reliable high performance FBB supplier takes decades

14

SLIDE 15

Metsä Group

Metsä Board

Metsä Board’s Future Was Secured by Massive Re-Engineering

f the Paper Operations

‒ In 2006, the successful strategic review of the company’s paper business was started. Our paper capacity then was about 5 million t/a ‒ Closures of 2 million tonnes annual capacity ‒ Divestments worth over 2 b€ incl.

‒ Graphic Papers business for Sappi ‒ Map Merchants for Sequana ‒ New Thames for DS Smith

‒ Material productivity improvement of the remaining paper units

15

SLIDE 16

Metsä Group

Metsä Board

Material Closures Implemented in Recent Years

Completed closures in 2007

‒ Sittingbourne: coated fine paper 210 ktons/a ‒ Gohrsmühle PM6 and PM7: coated fine paper 100 ktons/a ‒ Wifsta: uncoated fine paper 175 ktons/a ‒ Tako BM2: folding boxboard 70 ktons/a

Closures in 2008

‒ Kangas PM2: coated magazine paper 100 ktons/a ‒ Lielahti: BCTMP 105 ktons/a ‒ New Thames: uncoated fine paper (divestment, grade conversion) 230 ktons/a

Closures in 2009

‒ Hallein paper mill: coated fine paper 310 ktons/a ‒ Gohrsmühle: standard coated fine paper (conversion to uncoated fine paper) 250 ktons/a

Closures in 2010

‒ Two machines in Reflex: Speciality paper 80 ktons/a ‒ Alizay pulp mill: Chemical pulp 310 ktons/a ‒ Simpele paper mill: Speciality paper 50 ktons/a

Closures in 2011

‒ Äänekoski paper mill Coated fine paper 190 ktons/a

Closures in 2012

‒ Gohrsmühle’s unprofitable operations: Uncoated fine paper and Speciality paper 190 ktons/a ‒ Alizay paper mill: Uncoated fine paper 310 ktons/a Total paper capacity 2 205 ktons/a Total board capacity 70 ktons/a Total pulp (incl. BCTMP) capacity 415 ktons/a

16

SLIDE 17

Metsä Group

Metsä Board

Measures to Eliminate the Last Losses of Our Paper and Pulp Operations Have Been Successful

Alizay mill closed, assets divested
Gohrsmühle mill’s loss-making operations discontinued
Profitable Chromolux business continues
Cost structure optimized
Restructuring of coated paper business completed
Äänekoski paper mill closed and the reel paper production moved to Husum
Exit from Reflex and Hallein mills completed
Positive annual operating result impact of the above measures is 110 m€ vs. 2011
Mostly in 2012 and fully from 2013

17

SLIDE 18

Metsä Group

Metsä Board

Cash Flow from Husum and Kaskinen Will Be Maximized

Husum and Kaskinen are the largest units in their fields in Europe
Husum’s paper and pulp capacity maximized to about 1.6 million

t/a with no material extra capex

Kaskinen high yield pulp (BCTMP) sales volumes increased and

allocated to European long-term contractual customers

Kaskinen mill is a good reserve for Metsä Board to grow its

paperboard business in the future

18

SLIDE 19

Metsä Group

Metsä Board

Metsä Board’s Strategy Has Proven Its Success

‒ Metsä Board’s focuses on growing paperboard businesses and has clearly reduced its exposure in declining paper businesses ‒ Profitable growth continues in FBB ‒ Cash flow from paper and pulp business will be maximized ‒ Good potential for further productivity improvement As a paperboard focused company we are in good position to reach a top class profitability of our field in Europe

70 80 90 100 110 120 130 2 7 2 8 2 9 2 1 2 1 1 2 1 2

Delivery volumes in Europe

Index (2007=100)

Cartonboards Graphic papers 80 90 100 110 120 130 2007 2008 2009 2010 2011 2012

Prices in Europe

Index (2007=100)

Folding boxboard Coated magazine paper Uncoated fine paper Sources: Cepi, PPPC, Foex, Pöyry Management Consulting 19

SLIDE 20

Metsä Group

Metsä Board

Financial Targets

SLIDE 21

Metsä Group

Metsä Board

Financial T argets

‒ ROCE target set at a minimum of 10% on average over the business cycle ‒ Net gearing not to exceed 100%

Minimum ROCE 10%* Maximum net gearing 100%

* Excluding non-recurring items

184% 119% 137% 82% 95% 126% 99% 90% 84% 83% 106% 72% 83% 145%

99 00 01 02 03 04 05 06 07 08 09 10 11 12

Maximum level of 100% 13,5% 6,2% 2,1% 1,6% 0,5% 0,9% 2,8%

0,5%
5,6%

7,6% 3,4% 4,8% 10,2% 7,6%

99 00 01 02 03 04 05 06 07 08 09 10 11 12

Minimum target of 10%

21

SLIDE 22

Metsä Group

Metsä Board

2012 Results and Outlook

SLIDE 23

Metsä Group

Metsä Board

Key Events in 2012 (1/3)

‒ Paperboard market situation normalized in the spring ‒ Substitution from recycled fibre paperboard to fresh forest fibre paperboard due to health concerns and cost reasons continued ‒ Metsä Board’s FBB market share in Europe continued to increase ‒ Programme to increase annual FBB capacity by 150 000 tonnes was finalised. FBB sheeting capacity was also clearly increased ‒ New coated linerboards from Kemi mill were launched successfully to the market ‒ Commissioning of Kyro biopower plant

23

SLIDE 24

Metsä Group

Metsä Board

‒ Elimination of the 110 m€ losses from paper and pulp businesses completed as planned

‒ Closure of Alizay mill and divestment of the assets in January 2013 for 22 m€ ‒ Discontinuation of Gohrsmühle mill’s unprofitable operations ‒ Divestment of Reflex mill’s remaining operations ‒ Transfer of Äänekoski reel paper production to Husum

‒ Re-engineering of Husum mill’s production structure enables increase

f annual pulp production to 750 000 tonnes and paper production to
ver 800 000 tonnes

‒ New environmental permit received in late 2012

24

Key Events in 2012 in (2/3)

SLIDE 25

Metsä Group

Metsä Board

‒ Change of the company’s business name from M-real to Metsä Board ‒ Divestment of 7.3 per cent shareholding in Metsä Fibre Oy and 0.5 per cent shareholding in Pohjolan Voima Oy for 202 m€ ‒ Agreement on 600 m€ refinancing was signed ‒ Net debt reduced from 783 m€ to 625 m€

25

Key Events in 2012 in (3/3)

SLIDE 26

Metsä Group

Metsä Board

Key Figures –Annual Comparison

30 25 50 75 100 2011 2012

281

176

300
150

150 300 2011 2012

9,9

12,3

10
5

5 10 15 2011 2012

2485 2108 1000 2000 3000 2011 2012 59 74 40 80 120 2011 2012

Sales Operating result, excl. non-

rec. items

Result before taxes, excl. non-rec. items

m€ m€ m€

214

220

300
150

150 300 2011 2012

Operating result

m€

Result before taxes

m€

ROCE

%

Board of Directors is proposing to the AGM a dividend of 0.06 € per share for the financial year 2012

26

SLIDE 27

Metsä Group

Metsä Board

39 43 54 37 43 6

22

5 19 32 25 25

75
50
25

25 50 75 I II III IV I II III IV I II III IV 602 676 662 665 685 660 545 532 524 616 509 522 250 500 750 1000 I II III IV I II III IV I II III IV 15 16 10 12 33 20 24

11
33

28 17

9
50
25

25 50 I II III IV I II III IV I II III IV

Sales, m€ Operating result excl. non-rec. Items, m€ Result before taxes excl. non-rec. Items, m€

4Q 2012 Result Was on Previous Quarter Level

2011 2010 2012

27

SLIDE 28

Metsä Group

Metsä Board

28 28

Material Positive Non-Recurring Items Booked in 2012

m€ in EBIT Sale of 7.3 %-point holding in Metsä Fibre +85 Sale of 0.5 %-point holding in Pohjolan Voima +59 Reversal of impairments and reductions of cost provisions related to Alizay mill +11 Reduction of cost provisions related to Gohrsmühle mill +6 Cleaning expenses of a land area in Tampere in Finland

8

Other net non-recurring items

7

Total +146

SLIDE 29

Metsä Group

Metsä Board

‒ Higher linerboard prices improved profitability from 3Q 2012 ‒ Slightly lower average FBB price due to sales mix and seasonally lower total paperboard deliveries had negative result impacts in 4Q 2012 ‒ FBB order inflows are expected to gradually strengthen during 1Q 2013 and deliveries are forecast to somewhat increase from 4Q 2012 ‒ Annual FBB contract negotiations completed as planned

‒ Volumes increased from 2012, no material price changes

‒ Linerboard demand continues very strong and deliveries are expected to increase slightly in 1Q 2013. Price increase was successful in 4Q 2102

29

EBIT, excl. non-recurring items Sales

Performance of Paperboard Remained Stable in 4Q 2012

m€ m€

279 289 274 281 50 100 150 200 250 300 350 I II III IV 28 26 23 28 10 20 30 40 I II III IV

2012 2012

SLIDE 30

Metsä Group

Metsä Board

Paper and Pulp at Break-Even in 4Q 2012

‒ Lower paper delivery volumes and prices as well as decreased average pulp price weakened result in 4Q 2012 ‒ Result was improved by higher market pulp delivery volume ‒ Uncoated fine paper deliveries expected to somewhat increase in 1Q 2013. No material price changes in sight ‒ Coated paper deliveries and prices are expected to decrease slightly in 1Q 2013 ‒ Market pulp deliveries are forecast to be at previous quarter level. Market price of long fibre pulp is in USD forecast to increase in 1Q 2013

30

EBIT, excl non-recurring items

m€

Sales

210 245 229 223 50 100 150 200 250 300 I II III IV

2012 2012

12

5 2

15
10
5

5 10 I II III IV

SLIDE 31

Metsä Group

Metsä Board

Short-Term Profitability Outlook

31

‒ Metsä Board’s operating result for the first quarter of 2013, excluding non-recurring items, is expected to improve slightly from the fourth quarter of 2012

SLIDE 32

Metsä Group

Metsä Board

32

Key Focus Areas in 2013

1. Fully benefit the potential of the expanded folding boxboard capacity 2. Develop even more ecological paperboards and expand the current product range 3. Improve profitability and cash flow of the current paper mills

Husum, Kyro Paper and Gohrsmühle

4. Increase the amount of contractual market pulp customers 5. New measures towards Super Productivity and best in class supply chain

SLIDE 33

Metsä Group

Metsä Board

EUR / tn

Folding Boxboard Market Price in Europe 2004 – 2012

33

Source: Pöyry Management Consulting

800 900 1000 1100 2004 2005 2006 2007 2008 2009 2010 2011 2012

SLIDE 34

Metsä Group

Metsä Board

EUR / tn

Paper and Pulp Market Price in Europe 1998 – 2012

Coated fine paper (100 g) Uncoated fine paper (B-copy, 80 g) Softwood pulp NBSK Coated magazine paper LWC (60g)

Source: Foex, Reuters

EUR/USD EUR/USD

400 500 600 700 800 900 1000 1100 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0,8 0,9 1 1,1 1,2 1,3 1,4 1,5 1,6 1,7

34

SLIDE 35

Metsä Group

Metsä Board

Dividend

SLIDE 36

Metsä Group

Metsä Board

Dividend Policy

Future dividends will take into account the need to achieve and maintain sufficient financial flexibility
The Company remains committed to an attractive and competitive dividend
Metsä Board's dividend policy is stable and rewarding to shareholders, and aims at paying a dividend of at

least 1/3 of the Company's EPS on average over the business cycle, nonetheless taking into account the Company's net gearing target

36

SLIDE 37

Metsä Group

Metsä Board

0,50 1,09 1,13 1,85 0,46 0,30

0,79
1,58
1,09
0,83

0,53 0,26 0,37 0,38 0,51 0,51 0,51 0,25 0,00 0,00 0,00 0,09

0,59
1,21
0,25
0,43

0,23 0,00 0,06 0,06 0,06 0,14 0,12 0,12

3,0% 0,0% 0,0% 0,0% 4,3% 0,0% 1,3% 1,4% 2,1% 2,8% 3,3% 4,1% 5,6% 5,5% 6,9% 8,6% 7,2%

2
1,5
1
0,5

0,5 1 1,5 2 2,5 3 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* € per share

8 %
6 %
4 %
2 %

0 % 2 % 4 % 6 % 8 % 10 % 12 % Dividend yield, % Earnings per share Dividend per share Dividend yield

* Board’s dividend proposal to the AGM Dividend yield calculated from annual average B-share volume weighted price

Dividend Yield

37

SLIDE 38

Metsä Group

Metsä Board

Investments

SLIDE 39

Metsä Group

Metsä Board

1 000
500

500 1 000 1 500 2 000 2 500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 M illion € Disposals Acquisitions Capital expenditure on fixed assets

Capital Investments about 60 m€ in 2013

*Indicative level for 2013

39

SLIDE 40

Metsä Group

Metsä Board

Funding and Debt Information

40

SLIDE 41

Metsä Group

Metsä Board

Significant Divestments

EUR 3.6 billion in assets divested since 2001

2004 Metsä Tissue 570 2002 Papierfabrik Albbruck 235 2001 MD Papier 300 2001 Noviant (19%) 41 3,645

Year Divestiture Enterprise Value

m€

2005 Savon Sellu 20 2005 Forestia (95%) 163 2005 Botnia (8%) 164 2007 Botnia (9%) 240 2007 Folding carton plants 60 2007 Map Merchant Group 382 2008 New Thames mill 82** 2008 100 000 B2 shares in PVO 80 2008 Graphic Papers 750

* Cash portion **Incl. pension liabilities

2009 Metsä-Botnia’s Uruguayn operations 300* 2011 Hallein 34

41

2012 0.5 % stake in PVO 64 2012 7.3 % stake in Metsä Fibre 138 2013 Alizay property and other assets 22

SLIDE 42

Metsä Group

Metsä Board

Financial Situation Improved in 2012

‒ Net debt 625 m€ ‒ Net gearing 72%, equity ratio 33.6% at year end ‒ ONWC decreased by 35 m€ in 2012 and 4 m€ in 4Q vs. 3Q ‒ Metsä Board’s cash about 185 m€ at year end ‒ Average interest rate reduced to 4.6%

Net Debt, m€

625 3693 2403 500 1000 1500 2000 2500 3000 3500 4000 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2

42

783

SLIDE 43

Metsä Group

Metsä Board

Agreement on Metsä Board’s Refinancing Signed in May 2012

‒ 600 m€ term loan and revolving credit facility agreement with a syndicate of five banks and certain Finnish institutional investors ‒ This agreement will be utilized to refinance the 500 m€ eurobond maturing in April 2013 ‒ Facilities include a 100 m€ RCF available immediately and 500 m€ term loans available from late March 2013

‒ Maturity of RCF is three years ‒ 150 m€ of term loans matures at end June 2014 and 350 m€ at end March 2016

‒ The average financing cost of the facilities calculated for the entire loan period is 6.5 %

43

SLIDE 44

Metsä Group

Metsä Board

Loans and Interest Rate

At the end of 2012 ‒ Average maturity of long term loans 1,1 years ‒ Average interest rate of loans (including derivatives) 4,6 % ‒ Interest rate maturity of loans (including derivatives) 9,9 months ‒ Of the loans about 72 per cent was subject to variable interest rates and 28 per cent to fixed interest rates

44

SLIDE 45

Metsä Group

Metsä Board

Total 810 m€ 31.12.2012

Long-T erm Interest Bearing Liabilities

66 % 7 % 3 % 2 % 22 % Bonds Pension premium loans Loans from financial institutions Finance leases Other interest bearing liabilities

45

SLIDE 46

Metsä Group

Metsä Board

Total 300 m€ 31.12.2012

50

The following table sets forth the significant debt securities issued and outstanding of Metsä Board as at Dec. 31, 2012: Average Long-term borrowings Total amount Outstanding I nterest Rate (1) Maturity USD 350 million Private Note Issue USD 350 USD 121 10,0 % 2014 EUR 500 million Bond Issue EUR 500 EUR 500 6,3 % 2013 Global Medium-Term Note Program EUR 1 500 EUR 0 – – EUR 66 million bilateral loans EUR 66 EUR 66 6,5 % 2013-2015 EUR 27 million finance leases EUR 27 EUR 27 2,3 % 2013–2020 EUR 230 million pension loans EUR 230 EUR 181 4,8 % 2013–2020 Short-term funding programmes EUR 350 million domestic CP-program EUR 350 EUR 0 – – EUR 150 milj. Belgian CP-program EUR 150 EUR 0 – – Average interest rate of all Metsä Board Group interest bearing liabilities including interest rate derivatives per 31.12.2012 is 4,6 %. The following table sets forth Metsä Board´s principal long-term liquidity reserves as at December 31, 2012: Average Liquidity reserves Total amount Outstanding I nterest Rate (1) Maturity (EUR in millions) Revolving Credit Facility 2012 EUR 100 EUR 0 – 2015 Bridge Financing Faciility 2012 EUR 150 EUR 0 – 2014 Term Loan Facility 2012 EUR 350 EUR 0 – 2016 Pension loan facilities EUR 230 EUR 181 4,8 %

(1) The average interest rates take into account outstanding interest rate swaps and amortised arrangement fees.

(currency in millions)

SLIDE 51

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

51

SLIDE 52

Metsä Group

Metsä Board

General Presentation

SLIDE 53

Metsä Group

Metsä Board

Metsä Board in Brief

‒ Annual sales about 2.2 b€ ‒ Leading European paperboard company ‒ Major uncoated fine and printing paper and market pulp supplier ‒ Valuable holdings in Metsä Fibre and Pohjolan Voima ‒ Global sales and customer service network in 70 countries and nine production units in Finland, Sweden and Germany ‒ Listed on the NASDAQ OMX Helsinki Ltd and a part of Metsä Group,

ne of the largest forest industry groups in Europe

53

Paperboard 57% Paper 26% Market Pulp 17%

Sales breakdown 4Q 2012

SLIDE 54

Metsä Group

Metsä Board

Offering for Consumer Packaging, Communications and Advertising

‒ Cartonboards and white-top kraftliners for packaging beautycare, healthcare, cigarettes, food, consumer durables etc. ‒ Graphic boards e.g. for book covers, postcards, greeting cards, CD or DVD covers ‒ Office papers from high-volume copying and printing to high-quality color presentations ‒ Speciality papers for advertising and corporate materials, creative designs, labeling and for wallcovering industry

54

SLIDE 55

Metsä Group

Metsä Board

Customers

Office product resellers Publishers Brand owners Printers and converters Advertising and design agencies Office paper users Paper merchants

55

SLIDE 56

Metsä Group

Metsä Board

17 % 32 % 12 % 9 % 12 % 6 % 9 % 3 % Paper Pulp Paperboard Packaging Tissue Mechanical Forest Products Merchanting Chemicals

53 % 32 % 15 %

Focus on Core Businesses

1995 Sales €2.3 billion 2012 Sales €2.1 billion 8 Businesses 3 Businesses

56

SLIDE 57

Metsä Group

Metsä Board Acquisitions Divestments

Biberist Paper Mill Simpele Mill UK Paper Modo Paper Zanders Chemicals Business Botnia Wood Corrugated Packaging MD Papier Metsä Tissue Albbruck

Metsä Board Restructuring Story

Savon Sellu Forestia Kemiart Liners (53 %) 8% in Botnia PSM 9% in Botnia Carton plants

Map

100 000 B2 shares in PVO New Thames MB Uruguay Graphic Papers Part of Reflex Hallein mill

1997 2000 1998 1999 2001 2002 2003 2004 2005 2006 2007 2009 2008 2010 2011

57

Rest of Reflex 0.5% in PVO

2012

7.3 % in Metsä Fibre

SLIDE 58

Metsä Group

Metsä Board

Annual Sales Development

2108 2485 2605 2432 3236 4440 5624 5241 5460 6044 6564 6923 5898 3319 3014 2313 4044 1000 2000 3000 4000 5000 6000 7000 8000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

EUR, million

58

SLIDE 59

Metsä Group

Metsä Board

Business Portfolio

59

SLIDE 60

Metsä Group

Metsä Board

Business Portfolio

Paperboard Paper and Pulp

60

SLIDE 61

Metsä Group

Metsä Board

61

Main Businesses of Paperboard Business Area

‒ European market leader and global quality leader in folding boxboard (FBB)

‒ Mainly for consumer packaging ‒ Strong demand growth ‒ Annual sales about 800 m€ ‒ Good profitability

‒ Global market and quality leader in white top kraftliner

‒ For heavier consumer goods and high quality transport boxes ‒ Strong demand growth ‒ Annual sales about 300 m€ ‒ Good profitability

SLIDE 62

Metsä Group

Metsä Board

62

‒ Husum mill is the largest fine paper and pulp integrate in Europe

‒ Major producer of uncoated fine paper and coated papers ‒ One of the largest pulp mills in Europe with 750 000 t/a capacity ‒ Annual sales about 650 m€ ‒ Good cash flow generator

‒ Kaskinen is one of the most modern high yield pulp (BCTMP) plants in the world

‒ Start up in 2005 ‒ Capacity 300 000 t/a ‒ Annual sales about 100 m€ ‒ Improving cash flow

Main Businesses of Paper and Pulp Business Area

SLIDE 63

Metsä Group

Metsä Board

Paperboard business area

‒ Fibre-based high value-added packaging solutions for global brand owners in beautycare, healthcare, cigarette, food and consumer electronics industries as well as for graphical end-uses ‒ Relatively high earnings stability ‒ High segment consolidation ‒ Competitive folding boxboard mills with end use specified production

Capacity Share (%) 8 % 9 % 12 % 24 % 35 % 0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 % Careo IP Mayr-Melnhoff Stora Enso Metsä Board

No. 1 Folding Boxboard Producer in Europe

Source: Pöyry Management Consulting Oy 63

SLIDE 64

Metsä Group

Metsä Board

Paper and Pulp Business Area

Capacity Share (%)

4 % 8 % 10 % 12 % 12 % 14 % 0 % 5 % 10 % 15 % Metsä Board International Paper UPM-Kymmene Mondi Stora Enso Portucel

No. 6 Uncoated Fine Paper Producer in Europe
High quality uncoated fine papers for printing and photocopying as well as for forms, envelopes, manuals and

communication purposes. Additionally, chemical pulp and BCTMP for external customers

Diversified customer base, e.g. merchants, retail chains, office equipment manufacturers and corporations
Leading European office paper brands like DataCopy and SAVE!

Source: Pöyry Management Consulting Oy

64

SLIDE 65

Metsä Group

Metsä Board

Business Area Performance – Comparison to Previous Quarter

Sales, m€ 4Q 2012 3Q 2012

65

289 223 279 210

50 100 150 200 250 300 350 Paperboard Paper and Pulp

28 2 28

‐10 10 20 30 40 Paperboard Paper and Pulp

Operating result, excluding non-recurring items, m€

SLIDE 66

Metsä Group

Metsä Board

Business Area Performance – Comparison to Previous Year

Sales, m€ 2012 2011

66

1294 1132 1123 907

300 600 900 1200 1500 Paperboard Paper and Pulp

114 ‐39 105 ‐6

‐50 50 100 150 Paperboard Paper and Pulp

Operating result, excluding non-recurring items, m€

SLIDE 67

Metsä Group

Metsä Board

Operations

SLIDE 68

Metsä Group

Metsä Board

200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 Paper Board Pulp and BCTMP

1000 tons/a

Production Capacity

68

SLIDE 69

Metsä Group

Metsä Board

Production Locations

Paperboard:

Simpele
Äänekoski
Kyro
Tako
Kemi
Gohrsmühle
Joutseno

Paper and Pulp:

Husum
Kaskinen

Husum Gohrsmühle Äänekoski Simpele Joutseno Kemi Tako Kyro Kaskinen

69

SLIDE 70

Metsä Group

Metsä Board

Board and Paper Capacity by Grade

(1000 t/a)

70

Production Capacities (1000 t) BOARD MI LLS Board Mill Country Machines Folding Boxboard Liner Total Tampere Finland 2 205 205 Kyröskoski Finland 1 190 190 Äänekoski Finland 1 240 240 Simpele Finland 1 300 300 Kemi Finland 1 375 375 Total 6 935 375 1310 PAPER MI LLS Paper Mill Country Machines Coated Coated Uncoated Magazine Fine Fine Specialty Paper Paper Paper Paper Total Kyröskoski Finland 1 105 105 Bergisch Gladbach Germany 2 50 50 Husum Sweden 3 370 440 810 Total 6 370 440 155 965

SLIDE 71

Metsä Group

Metsä Board

Pulp Capacity

(1000 t/a)

71

PULP MI LLS Pulp Mill Country Chemical Pulp BCTMP Total Husum Sweden 750 750 Joutseno Finland 280 280 Kaskinen Finland 300 300 Total 750 580 1330 METSÄ FI BRE * Mill Country Chemical Pulp Total Äänekoski Finland 500 500 Kemi Finland 590 590 Rauma Finland 630 630 Joutseno Finland 650 650 Total 2370 2370 * Metsä Board's share is 24.9% of the capacity

SLIDE 72

Metsä Group

Metsä Board

Personnel Development

3279 4070 4538 4903 6546 9508 14125 15154 16490 21070 22237 17351 20372 5000 10000 15000 20000 25000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

72

SLIDE 73

Metsä Group

Metsä Board

Deliveries

SLIDE 74

Metsä Group

Metsä Board

Uncoated fine paper Cartonboard

Annual Deliveries*

25 % 5 % 18 % 52 % Western- Europe Eastern- Europe Americas Asia & Pacific

10 % 78 % 10 % 2 %

* Indicative numbers

74

SLIDE 75

Metsä Group

Metsä Board

Metsä Board

Owners

83

SLIDE 84

Metsä Group

Metsä Board

Ownership Structure 31.12.2012

Shares Votes

Source: Euroland

84

SLIDE 85

Metsä Group

Metsä Board

Market Position

SLIDE 86

Metsä Group

Metsä Board

100 200 300 400 500 600 700 800 900 1000 Others Holmen Careo IP Mayr-Melnhof Stora Enso Metsä Board

Folding Boxboard Capacities in Europe

BIG-5 = 84% of total

Capacity: tons/year (thousand) 35% 24% 12% 9% 8% 7% 5%

Source: Pöyry Management Consulting Oy

86

SLIDE 87

Metsä Group

Metsä Board

500 1000 1500 2000 2500 3000 3500 Others Guipuzcoana de Zicuñaga Arctic Paper Metsä Board International Paper UPM Mondi Stora Enso Portucel

Uncoated Fine Paper Capacities in Europe

BIG-5 = 56% of total

14% 12% 12% 10% 8% 4% 3% 3% 29% Capacity: tons/year (thousand)

Source: Pöyry Management Consulting Oy

87

SLIDE 88

Metsä Group

Metsä Board

Thank You!

www.metsaboard.com Juha Laine

Headof IR +358 10 4654335 juha.laine@metsagroup.com