Mets Board Corporation Investor presentation JanuaryDecember 2019 - - PowerPoint PPT Presentation
Mets Board Corporation Investor presentation JanuaryDecember 2019 Contents This is Mets Board 3 FY 2019 Results, debt and financing 33 Planned investments .. 14
January–December 2019
This is Metsä Board ………………………… 3 FY 2019 Results, debt and financing …… 33 Planned investments ……………………….. 14 Sustainability ………………………………. 50 Profitability drivers ………………………….. 19 R&D ………………………………………… 61 Operating environment …………………….. 26 Owners, management, contacts ……….... 73
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Folding boxboard 56% White kraftlainer 25% Market pulp 13% Other 5%
FY 2019: EUR 1,932m
EMEA 71% Americas 21% APAC 8%
FY 2019: EUR 1,932m
Sales split by product Sales split by region Year 2019: Sales EUR 1.9bn, comparable operating result EUR 184m, ROCE 10.4%, Capex EUR 99m, Personnel 2,400 Total paperboard capacity
2Mt/a
Net pulp balance*
+600,000t/a
STRONG MARKET POSITION
#1 in folding boxboard and white kraftliner in Europe #1 in coated white kraftliner globally Largest European importer of folding boxboard to US
MAIN CUSTOMERS
Brand-owners, converters, merchants and manufactures of corrugated products TOP10 customers: ~25% of sales Largest customer: <5% of sales
production units in Finland and Sweden
METSÄ BOARD IS PART OF METSÄ GROUP
Metsä Board owns 24.9% of its associated company Metsä Fibre Metsäliitto Cooperative, owned by 103,000 Finnish forest owners, holds 46% of Metsä Board’s shares and 66% of votes
*Including Metsä Board’s ownership in Metsä Fibre
Total paperboard capacity 2Mt, of which 2/3 folding boxboard and 1/3 white kraftliners Folding boxboards and food service boards
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White kraftliners, coated and uncoated
Food and Food service Other consumer goods (e.g. pharma, cosmetics) Graphical end-uses
Folding boxboard end-uses*
Shelf-ready and Point-of-sale (food, beverages, cosmetics) Other consumer goods (e.g. electronics) E-commerce
White kraftliner end-uses*
*) all data is indicative and based on Metsä Board’s own estimates
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URBANISATION DIGITALISATION CLIMATE CHANGE GLOBALISATION POPULATION GROWTH
M E G A T R E N D S :
FOCUS
We are the leader in sustainability, focusing on premium fresh fibre products for consumer and retail packaging. The high performance
high-quality Nordic pulps.
GROWTH
We grow globally together with our existing and new customers by offering sustainable, safe and high- performing products. Our growth is based on skilled people, industry leading products and new innovative packaging solutions.
PROFITABILITY
Our profitability is based on the efficiency of our operations and prioritisation of businesses that benefit from the high performance of our products and services.
S T R A T E G Y
Packaging solutions that respect nature
M I S S I O N V A L U E S Responsible profitability Reliability Cooperation Renewal
Preferred supplier of innovative and sustainable fibre-based packaging solutions, creating value for customers globally
V I S I O N
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Folding boxboard in Europe
Total capacity 3.9m tonnes
White kraftliner in Europe
Total capacity 2.2m tonnes
Metsä Board #1
#2 #3 #4 #5 Others
Metsä Board #1
#2 #3 #4 #5 Others
white kraftliners globally
FBB to US
quality FBB segment
paperboard deliveries (2019):
FBB = Folding boxboard WKL = White kraftliner
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Husum, SWE
400,000 t/a FBB 250,000 t/a WKL 730,000 t/a Pulp
Kemi
425,000 t/a WKL 610,000 t/a Pulp*
Kaskinen
370,000 t/a BCTMP
Kyro
190,000 t/a FBB
Äänekoski
260,000 t/a FBB 1.3 million t/a Pulp*
Simpele
290,000 t/a FBB
Joutseno
330,000 t/a BCTMP 690,000 t/a Pulp*
Tako
210,000 t/a FBB
Wood sourced from Finland, Sweden, Baltics and Russia.
*Metsä Fibre mill
Our net balance in pulp in 2019, including the 24.9% ownership in Metsä Fibre, is 600,000 t/a Total paperboard capacity: Folding boxboard (FBB): 1,350,000 t/a White kraftliner (WKL): 675,000 t/a
Wood products Paperboard METSÄ TISSUE METSÄ FOREST Wood supply and forest services METSÄ FIBRE Pulp and sawn timber METSÄ WOOD METSÄ BOARD Tissue and greaseproof papers Group’s parent company, owned by 103,000 Finnish forest owners METSÄLIITTO COOPERATIVE METSÄ GROUP
METSÄ BOARD OWNS 24.9%
Through Metsä Fibre’s ownership Metsä Board’s annual net pulp balance is 600,000 tonnes long
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100% 100% 100% 50.1% 46%
Metsäliitto’s ownership:
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763 801 865 988 1144 1215 1207 373 444 539 580 658 615 584 500 1 000 1 500 2 000 500 1 000 1 500 2 000 2013 2014 2015 2016 2017 2018 2019
White kraftliner deliveries Folding boxboard deliveries Total paperboard capacity
Metsä Board’s annual paperboard deliveries and current capacity, 1,000 tonnes
* During 2013-2017 the demand growth for FBB and WKL was ~3%/year
1,000 tonnes
Total paperboard capacity 2 million tonnes
Main growth and development investments in 2014–2020E:
2020E Husum pulp mill renewal 2019 Husum pulp mill renewal, new sheeting line in Äänekoski 2018 New baling line in Kaskinen BCTMP mill: 30,000 new BCTMP capacity 2017 New extrusion coating line in Husum: 100,000 t/a PE coating capacity 2015–16 New folding boxboard production line in Husum: 400,000 t/a of FBB and linerboard production line conversion: 250,000 t/a of WKL
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50 100 150 200 250 2014 2015 2016 2017 2018 2019 2020E
Capex for growth and development Maintenance capex Depreciation
Capital expenditure and depreciation
EUR million
NOTE! Estimated investments in 2020 are provisional and dependent
process related to the Husum pulp mill renewal
Comparable ROCE: Target at least 12%
8.1 11.2 14.4 10.4 2016 2017 2018 2019 2.0 1.2 1.0 1.1 2016 2017 2018 2019
Net debt/comparable EBITDA: Maximum level 2.5x
> 12% < 2.5x
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76 50 51 59 2016 2017 2018 2019
Dividend policy: Payout ratio at least 50% of net result
> 50%
Enterprise value, EUR million
500 1000 1500 2000 2500 3000 2012 2013 2014 2015 2016 2017 2018 2019 Net debt Market capitalization
Dividend, EUR and payout ratio, %
0% 25% 50% 75% 100% 0,00 0,05 0,10 0,15 0,20 0,25 0,30 2012 2013 2014 2015 2016 2017 2018 2019 Dividend, EUR Dividend/EPS, %
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Year 2019 is the Board’s proposal to AGM Year 2018 and 2019 total distributions consist
– EUR 85 million dividend will be paid in April (Dependent on AGM’s decision on March) – CAPEX: Estimated EUR 200-210 million, including EUR 50-60 million annual maintenance capex and EUR 130-140 million capex to Husum pulp mill renewal (dependent on the timing of environmental permit granted by Swedish authorities)
– Phase 1: Total investment value EUR 320 million, divided over 3 years in 2019-2022 – Financing mainly through incremental debt – cost estimated at ~1% p.a. or EUR 2 million/year – Dividend policy unchanged
20 40 60 80
50 100 150 200 2014 2015 2016 2017 2018 2019 FCF, EUR million FCF/EBITDA,%
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EUR million %
Free cash flow in EUR million and % of EBITDA
Comparable EBITDA, EUR 279 million
FCF=Cash flow from operations after investments
Renewal of MetsäBoard Husumpulp mill New bioproduct mill and a sawmill line by MetsäFibre
Metsä Board: Husum, SWE Renewal of the pulp mill
EUR 320 million (first phase)
Metsä Fibre: Kemi, FIN New bioproduct mill
EUR ~1.5 billion
Metsä Fibre: Rauma, FIN New pine sawmill line
EUR ~200 million
The aim is to further improve the competitiveness of pulp and energy production and move towards fossil-free mills
2019 2020 2021 2022
Company expects to make the final investment decision* New recovery boiler and turbine expected to be in operation Pre- engineering phase launched Company applies amendment to environmental permit
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The renewal consists of two phases
Ø Create a solid foundation to increase paperboard capacity in the Husum integrate in the future Ø Secure cost efficient pulp and energy production Ø Enable the company to reach its ambitious target of fossil-free mills by 2030
Second phase, in 2020s: New fibre line. To be implemented after the first phase is fully completed First phase, 2019–2021E: New recovery boiler and turbine
First investments made
* After the environmental permit is granted
Investment value
divided over 2019–2022
– In 2019 investments were EUR 21 million
Estimated impacts of the first phase
– Reduced duration and extended intervals between planned shutdowns → Increased pulp and paperboard production
EBITDA improvement and EUR 5 million lower capex
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*) Annual increase in electricity production about 330 GWh,
resulting in cost savings at 2019 electricity prices of approximately EUR 12 million
New bioproduct mill* in Kemi, Finland
several other bioproducts
– environmental permit application filed in September 2019
New sawmill line in Rauma, Finland
line in the world
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*) would replace the existing pulp mill in Kemi, with
annual capacity of 630,000 tonnes of chemical pulp
Component Unit Change Impact on EBIT Folding boxboard Price +/- 10% > EUR 100 million White kraftliners Price +/- 10% ~ EUR 50 million FX USD/EUR +/- 10% EUR 63 million SEK/EUR +/- 10% EUR 39 million Pulp PIX price of SW/HW per tonne +/- 10% EUR 30 million Wood Cost, delivered to Finnish mills +/-10% EUR 30 million* Cost, delivered to Husum +/-10% EUR 20 million
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In 2019, Metsä Board sourced 8.2* million m3 wood, of which 50% from Finland; 26% from Sweden; 13% from Baltics, Germany and Poland; and 11% from Russia.
USD 57 % SEK 34 % GBP 7 % Others 2 % Annual FX transaction exposure total EUR 1.1 billion
* Includes the wood used in the pulp purchased from Metsä Fibre
Cost inflation accelerated in 2018 and costs remained at a high level in 2019
Prices of raw materials remained high in 2019. Wood costs were at a higher level than the year before, but declined slightly towards the end of the year. Total costs in 2019 were EUR 1.70 billion (2018: EUR 1.69 billion).
Wood 28% Logistics 16% Chemicals 16% Energy 14% Personnel 12% Other fixed 14%
2019 Results 21
Metsä Board’s cost split in 2019
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
Folding boxboard White-top kraftliner
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EUR/ tonne Sources: Fastmarkets RISI & Fastmarkets FOEX EUR/ tonne
350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250 350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Fast Markets Foex
USD or EUR USD or EUR
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Long-fibre, USD
Long-fibre, EUR
Short-fibre, EUR Short-fibre, USD
Pulpwood roadside prices in Finland, EUR/m3 Pulpwood roadside prices in Sweden*, SEK/m3
Sources: Luke (Natural Resources Institute Finland) and Skogsstyrelsen (The Swedish Forest Agency)
20 22 24 26 28 30 32 34 36 38 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Spruce Birch Pine 150 170 190 210 230 250 270 290 310 330 350 370 390 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Spruce Birch Pine
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EUR/USD
25
EUR/SEK
1,08 1,1 1,12 1,14 1,16 1,18 1,2 1,22 1,24 1,26
29.12.2017 29.1.2018 28.2.2018 31.3.2018 30.4.2018 31.5.2018 30.6.2018 31.7.2018 31.8.2018 30.9.2018 31.10.2018 30.11.2018 31.12.2018 31.1.2019 28.2.2019 31.3.2019 30.4.2019 31.5.2019 30.6.2019 31.7.2019 31.8.2019 30.9.2019 31.10.2019 30.11.2019 31.12.2019
9,6 9,8 10 10,2 10,4 10,6 10,8 11
29.12.2017 29.1.2018 28.2.2018 31.3.2018 30.4.2018 31.5.2018 30.6.2018 31.7.2018 31.8.2018 30.9.2018 31.10.2018 30.11.2018 31.12.2018 31.1.2019 28.2.2019 31.3.2019 30.4.2019 31.5.2019 30.6.2019 31.7.2019 31.8.2019 30.9.2019 31.10.2019 30.11.2019 31.12.2019
The size of total packaging market is USD 920 billion
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Average annual growth rate of paperboard packaging 33 % 12 % 36 % 13 % 6 %
Paperboard
Other fibre-based Plastic Metal Glass 50 100 150 200 250 300 350 400 2014 2015 2016 2017 2018 2019 2024f +3% per year 2019–2024
Source: Smithers Information Ltd
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10000 20000 30000 40000 50000 60000 70000 80000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 1000 metric tonnes Asia 2.4%/a
Containerboard growth forecast Cartonboard growth forecast
Source: RISI Paper Packaging Forecasts
25 50 75 100 125 150 175 200 225 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Million metric tonnes
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Cartonboard White linerboard Cartonboard White linerboard Cartonboard White linerboard Total annual demand: 10 million tonnes 3 million tonnes 10 million tonnes 5 million tonnes 22 million tonnes 3 million tonnes
Americas EMEA APAC
FSB FBB Other fresh fibre grades Recycled grades CWKL WKL White testliner FSB FBB Other fresh fibre grades Recycled grades CWKL WKL White testliner FSB FBB Other fresh fibre grades Recycled grades WKL White testliner
FSB = food service board, FBB = folding boxboard, SBS & CUK = other fresh fibre grades, WLC = recycled grades WKL = uncoated white kraftliner, CWKL=coated white kraftliner
28% 77% 41% 38% 36% Source: Metsä Board research based on several sources, e.g. CEPI Cartonboard and Containerboard, RISI
Total containerboard market 170Mt Linerboards 102Mt
White linerboard 11Mt
White kraftliner 4Mt White coated kraftliner 1Mt White uncoated kraftliner 3Mt White testliner 7Mt
Brown linerboard 91 Mt
Brown kraftliner 24Mt Brown testliner 67Mt
Fluting 68Mt
Fresh fibre fluting 8Mt Recycled fluting 60Mt
Global annual demand in containerboards totals 170 million tonnes
Source: Metsä Board’s own estimate based on several sources
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AMERICAS 24% EMEA 70% APAC 6%
FOCUS ON HIGH-QUALITY SEGMENT
increased purchasing power support demand for packaging
cartonboard
high-quality segment STRONG MARKET POSITION IN EUROPE
WKL
awarness and tightened regulations support demand for sustainable packaging materials
paper into lower quality containerboard production
Share of Metsä Board’s total paperboard deliveries in 2019:
GROWTH POTENTIAL IN NORTH-AMERICA
lightweight FBB and coated WKL
SBS/FSB and changing import volumes from China
key words
– Increasing branding of the packaging – Trend towards shipping the product in its own container – Personalisation of boxes, supported by advancing technology in digital printing
17% per year on average, increasing its share of the retail trade from 12% to 22% in 2018–2023
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Sources: eMarketer, Smithers Information Ltd
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Q4/19 Q4/18 Change Q4/19
FY 2019 FY 2018 Change 2019
Sales
EUR, m
478 458 4% 1,932 1,944
EBITDA*
EUR, m
59 81
279 344
Operating result*
EUR, m
39 60
184 252
% of sales*
%
8.2 13.1 9.5 13.0 Metsä Fibre’s share of operating result*
EUR, m
1 32
43 124
Earnings per share
EUR
0.05 0.14
0.41 0.57
ROCE*
%
8.9 13.7 10.4 14.4 Capex (own assets)
EUR, m
54 34 59% 95 70 33% Cash flow from operations
EUR, m
90 30 195% 201 151 33% IB Net debt, at end of period
EUR, m
308 335
308 335
*comparable
due to seasonality, prices remained stable
decline
and lower production costs
the Husum pulp mill
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COMPARABLE OPERATING RESULT
EUR million OPERATING CASH FLOW
EUR million PAPERBOARD DELIVERIES
tonnes TOTAL INVESTMENTS
EUR million
265 304 299 276 297 328 297 293 302 299 305 300 163 173 170 152 171 161 149 134 138 146 161 140
100 200 300 400 500
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
White kraftliner Folding boxboard
1,000 tonnes
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1,000 tonnes FY 2018: 1,830,000 tonnes FY 2019: 1,791,000 tonnes
+3%
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EMEA 860,000 (844k) Americas 242,000 (252k) APAC 105,000 (119k)
FBB deliveries in 2019 (2018)
total 1,207,000 tonnes (1,215k)
71%
EMEA 385,000 (438k) Americas 190,000 (173k) APAC 9,000 (4k)
WKL deliveries in 2019 (2018)
total 584,000 tonnes (615k)
EMEA
up during the summer. Slightly improved price levels year-on-year AMERICAS
improved price levels. Stable market situation in WKL with increased delivery volumes APAC
20% 9% 66% 33% FBB = Folding boxboard WKL = White kraftliner
69 62 59 41 64 43 60 39 60 120 180 240 300 2018 2019
Sales
EUR million 492 487 519 477 475 489 458 478 400 800 1200 1600 2000 2018 2019
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Comparable operating result
EUR million and % of sales
EUR million EUR million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
FY 2018: EUR 252 million 13.0% FY 2019: EUR 184 million 9.5% FY 2018: EUR 1,944 million FY 2019: EUR 1,932 million
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Positive: + less annual maintenance + lower production costs + sale of emission rights Negative:
Positive: + higher prices in FBB and WKL + FX Negative:
Comparable operating result
(Q3 2019: EUR 42.5 million) Comparable operating result
(FY 2018: EUR 251.9 million)
4% 6% 8% 10% 12% 14% 16% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19
Comparable return on capital employed, % Quarterly Rolling 12m Target
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Target level > 12%
R12m 10.4% Q4/19: 8.9%
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Pulp price (PIX) development in Europe and China
16%, while Chinese prices dropped by 28%*. Some stabilisation especially for Chinese prices towards the end of the year
driven by the resurgence of paper and paperboard
Europe, the trend remains rather weak
declined from the peak levels in the summer 2019
Long-fibre pulp, Europe Long-fibre pulp, China (net)
Source: Fastmarkets Foex USD/tonne USD/tonne
200 400 600 800 1 000 1 200 1 400 200 400 600 800 1 000 1 200 1 400 2013 2014 2015 2016 2017 2018 2019
*) calculated from the difference between the average yearly prices
68 106 30 36 54 30 36 31 44 90 59 79 20 23 43
29 13 26 37
50 100 150 200 250
50 100 150 200 250 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Cash flow from operations, quarterly Free cash flow, quarterly Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months
EUR million
42
Free cash flow = cash flow from operations − total investments
EUR million
43
impact on operating result of approximately EUR 20 million, affecting mainly Q1 2020
be roughly at the same level as in Q4 2019
prices are not expected to decline
during Q1 2020
might increase wood costs
Metsä Board’s comparable operating result for the first quarter of 2020 is expected to weaken compared to the fourth quarter of 2019 due to strikes at mills in Finland.
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358 335 388 344 335 297 380 352 308
1.2 1.1 1.2 1.0 1.0 0.9 1.2 1.2 1.1
0,0 0,5 1,0 1,5 2,0 2,5 3,0 100 200 300 400 500 600 12/2017 3/2018 6/2018 9/2018 12/2018 3/2019 6/2019 9/2019 12/2019 Net debt, EUR million Net debt to comparable EBITDA (last 12 months)
46
Net debt / EBITDA target level: <2.5 EUR million
50 100 150 200 250 2020 2021-2024 2025 2027
Bonds Loans from financial institutions Pension loans Finance lease liabilities
47
Long-term interest-bearing debt maturity profile as per 31 December 2019
EUR million
consisting of a five-year term loan of EUR 150 million and a five- year RCF of EUR 200 million to replace the drawn loan of EUR 50 millionand undrawn RCF of EUR 150 million
(31 Dec 2018: EUR 447 million)
Rating agency Rating and
Last update S&P Global BBB- stable 02/2018 Upgrade from BB+ Moody‘s Investor Services Baa3 stable 01/2019 Upgrade from Ba1 Metsä Board’s both credit ratings are investment grade
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32 31 36 22 15
3.8 3.3 3.3 3.3 2.5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 10 20 30 40 2015 2016 2017 2018 2019 Net financial costs, EUR million Average interest rate at the end of period, % EUR million %
exchange differences, in 2019 were EUR 15.4 million (FY 2018: 22.3)
review period was 2.5% and the average maturity of long-term loans was 6.4 years
payments after the new financial arrangements on 30 September 2019
by EUR 2 million with the Husum pulp mill renewal
249 149 24 23
Bonds Loans from financial institutions Pension loans Finance leases and other loans
24 134 200 190
Cash and cash equivalents RCF, unraised Pension loans, unraised
Interest-bearing debt
EUR 445 million
Available liquidity
EUR 524 million Average maturity of long-term loans on 31 December 2019 was 6.4 years.
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Origin and transparency of materials, renewability, resource efficiency and recylability
reducing their carbon footprints: Lighter packaging reduces CO2 emissions across the value chain
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“Our comprehensive approach to reducing our environmental impact means looking at all aspects of our business, how they intersect and how we can integrate new solutions to create meaningful and sustained change.” – Starbucks website “We want low-carbon to become the new normal, so we’re taking action to reduce GHG emissions throughout our value chain.” – Unilever website
willingness to pay more for it
value for the paperboard cartons
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A detailed consumer study with cherry tomatoes was carried out in Finland by Sense N Insight, Luke (Natural Resources Institute Finland) and Metsä Board
Replacing fossil- based materials, i.e. plastics The solution: renewable and biodegradable wood fibre Increased waste generation due to urbanisation The solution: Paperboard is recyclable – and widely recycled Reducing carbon footprint The solution: renewable energy, efficient energy and water usage in production Ensuring food safety The solution: pure and safe fresh fibres in food packaging Fresh fibre paperboards offer solutions to major challenges
Less energy, water and raw material consumed Less transport weight Less waste generated
from Finland and Sweden (76 %)
comes from sustainably managed forest sources ensuring the biodiversity and recreational use of forests
(remaining 24 % from controlled forest sources)
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MILLION M3
Annual growth of Finnish forests is
Forests grow more than they are used, annual harvesting 78 million m3 (2018) Four seedlings are planted for each harvested tree Over 20% of the Finnish export comes from forest-based products
The area of Finland
Cities, villages and roads Fields and agricultural use Lakes and rivers Forest
10% 10% 75% 5%
surface water in its processes
in processes several times
back to the close-by waterways after thorough purification
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Own generation 20 % Purchased through PVO shareholding 32 % Purchased electricity 48 %
Electricity sourced in 2019 (total 2.4 TWh)
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Renewable, mainly wood- based side streams 49 % Nuclear power 34 % Fossil-based 17 %
Primary energy used in 2019
(total 11.7 TWh)
2009–2019
Finland
− Self-sufficiency includes own generation and electricity purchased through PVO holding or from Metsä Fibre − After the first phase of Husum pulp renewal, self-sufficiency in electricity increases from 40% to over 80% at Husum integrate
− Fair value as per 31 December 2018 was EUR 266 million
1) Olkiluoto Nuclear Power Plant 2) Pohjolan Voima Oyj is a non-listed public limited liability company.
It supplies electricity and heat for its shareholders at cost price
3) Out of 48% share of purchased energy, 14% is from Metsä Fibre and 34% includes other purchased energy
3)
Certified wood fibre
At Metsä Group level: Increasing the amount of carbon stored in forests and products
management of young stands
products (t) Safeguarding biodiversity
decayed wood Fossil free mills
100%, 0 tCO2 (Scope 1)
Fossil-free purchased energy
100%, 0 tCO2 (Scope 2)
Resource efficient production
100%
ton (m3/t) -30% vs. 2018
improvement >10% vs. 2018
CLIMATE AND ENVIRONMENT SUSTAINABLE CHOICES WELL-BEING FOREST
Responsible corporate culture
barometer to be developed, coverage of Code of Conduct e-training 97% Accident-free work environment
Fossil free raw materials
materials 100%
Sustainable supply chain
Supplier Code of Conduct: 95%, compliance analysis conducted 82%, coverage
questionnaire 58%
materials 100%
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In ISS ESG Corporate Rating (previously oekom research Corporate Rating) Metsä Board has a Prime status. Metsä Board scored the Gold level in EcoVadis’ CSR ranking in 2019, and is included in the top 1% of companies assessed in the corrugated paper and paperboard industry. Metsä Board has been on the CDP Climate A List since 2016. In addition, Metsä Board scored A- in the CDP Water and Forest Programmes and in the Supplier Engagement Rating in 2019. Metsä Board as a part of Metsä Group is committed to the UN Global Compact corporate responsibility initiative and its principles in the areas of human rights, labour, environment and anti-corruption. Metsä Board also supports the UN’s Sustainable Development Goals, the SDGs. Metsä Board’s GHG emissions’ reduction targets are approved by the Science Based Targets initiative. In 2019, Metsä Board received a rating of AAA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment. In December 2019 , Metsä Board received an overall ESG Risk Rating score of 17.6 and is considered by Sustainalytics to be at low risk of experiencing material financial impacts from ESG factors.
Link to MSCI Terms and Conditions
Metsä Board’s ESG performance was rated “Advanced” in Vigeo Eiris ESG assessment in July 2019.
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Further lightweighting of paperboards
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Developing new barrier boards
PROMOTION
Brightness
PROTECTION
Stiffness
Folding boxboard (FBB) White lined chipboard (WLC)
Metsä Board’s folding boxboard
Coated unbleached kraft (CUK)
Solid bleached board (SBB)
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Three-layer structure of Folding Boxboard
Light weight
→ better yield and sustainability
High strength and bending stiffness
→ secure protection
High brightness and smoothness
→ excellent printability
Consistent quality
→ improved production efficiency
SBS (100% chemical pulp) Metsä Board FBB (up to 70% BCTMP, 30% chemical pulp )
5 m3 of wood per tonne of pulp 3.4 m3 of wood per tonne of pulp
Metsä Board lightweight paperboard Average FBB – Folding boxboard SBB – Solid bleached board WLC – White lined chipboard
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The weights equal to a print job of 30 000 sheets on a standard size printing press
In 2019, we announced of our new, improved FBB portfolio, that answers to increasing demands for sustainability, product safety and brand promotion
– Further opportunities for lightweighting – Enhanced visual properties – Industry-leading quality consistency – Improved supply security and availability
Enabled by our improved high-yield BCTMP and full R&D focus
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Metsä Board has developed a new plastic-free eco-barrier paperboard for food and food service purposes Medium barrier for grease and moisture Can be recycled in paper or paperboard streams
END-USES: Food service, fresh, dry and frozen food and
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ü Plastic-free ü Easily recyclable ü Protective with medium barrier for grease and moisture ü Safe for direct food contact – no fluorochemicals or
ü Brightest OBA-free board on the market, with excellent printability on both sides
HIGH
WVTR < 15 g/m²/d
PE barrier boards
MEDIUM
15 ≤ WVTR < 100
MetsäBoard Prime FBB EB
MODERATE
100 ≤ WVTR < 250
NONE
WVTR > 250 g/m²/d
Paperboards without barrier
MetsäBoard Prime FBB EB1
NONE
< 10 min
MODERATE
10 min ≤ OGR < 6 h
MEDIUM
6 h ≤ OGR < 72 h
HIGH
OGR > 72 h
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Oil and grease resistance (flat sample) Moisture resistance
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NON-BIOBASED BIODEGRADABLE BIOBASED NON-BIODEGRADABLE PLA (polylactide): often based on corn starch PVA (polyvinyl alcohol) PBS (polybutylene succinate) Green PE: made from biomaterials PE: made from fossil raw materials, used in extrusion coating
Examples of materials used in coating
Note! Biobased material = Renewable material ≠ Compostable ≈ Biodegradable
Excellence Centre, to be operational in 2020
– Combines packaging design and R&D excellence under the same roof – Enables to organise packaging design workshops and innovation days together with customers and partners
collaboration with Metsä Spring, Metsä Group’s innovation company
Metsä Group’s business operations, products and innovation activities
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Market cap and foreign owners
31 December 2019
Ownership distribution
31 December 2019
Metsä Board’s A- and B-shares are listed on Nasdaq Helsinki
5 10 15 20 25 500 1 000 1 500 2 000 2 500 3 000
12/2015 12/2016 12/2017 12/2018 12/2019
Market cap, EUR million Share of foreign owners, % Metsäliitto Cooperative 46% Domestic institutional investors 19% Domestic private investors 20% Foreign
15%
EUR million
74
%
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Mika Joukio
CEO Chairman of CMT since 2014 MG employee since 1990 Share ownership: 297,700
Jussi Noponen
CFO Member of CMT since 2016 MG employee since 2000 Share ownership: 73,000
Sari Pajari
SVP, Marketing and Sales Member of CMT since 2011 MG employee since 2007 Share ownership: 66,075
Ari Kiviranta
SVP, Development Member of CMT since 2014 MG employee since 1993 Share ownership: 45,000
Harri Pihlajaniemi
SVP, Production Member of CMT since 2017 MG employee in 2001-2004 and since 2017 Share ownership: no ownership
Camilla Wikström
SVP, HR Member of CMT since 2019 MG employee since 2001 Share ownership: 17,807 Share ownerships are B-shares. MG = Metsä Group
Katri Sundström Vice President, Investor relations Tel +358 10 462 0101 katri.sundstrom@metsagroup.com Metsä Board Corporation P.O. Box 20 02020 Metsä, Finland www.metsaboard.com
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This presentation includes forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “will,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or any similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are
believe that the expectations reflected in these forward-looking statements are reasonable, actual results may differ, even materially, from those expressed or implied by these forward-looking statements. We urge presentation participants not to place undue reliance on such statements. The information and views contained in this presentation are provided as at the date of this presentation and are subject to change without notice. Metsä Board does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Viewers should understand that this presentation does not constitute, and should not be construed as, an offer to buy or subscribe for Metsä Board’s securities anywhere in the world or an inducement to enter into any investment activity relating to the same. No part of this presentation should form the basis of, or be relied on in connection with, any contract
themselves with Metsä Board’s annual accounts, interim reports and stock exchange releases as well as other information published by Metsä Board to form a comprehensive picture of the company and its securities. Metsä Board publishes inside information according to Market Abuse Regulation (MAR) and rules of the Nasdaq Helsinki.
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