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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


  1. Metsä Board Corporation Investor presentation January–December 2019

  2. Contents 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 2

  3. Metsä Board in brief Sales split by product Year 2019: Sales EUR 1.9bn, comparable operating result EUR 184m, Other Market ROCE 10.4%, Capex EUR 99m, Personnel 2,400 5% pulp 13% Folding boxboard Total paperboard capacity FY 2019: 8 56% 2Mt/a EUR 1,932m White kraftlainer production units Net pulp balance* 25% in Finland and Sweden +600,000t/a *Including Metsä Board’s ownership in Metsä Fibre Sales split by region MAIN CUSTOMERS STRONG MARKET POSITION Brand-owners, converters, merchants #1 in folding boxboard and white kraftliner in Europe APAC 8% and manufactures of corrugated products #1 in coated white kraftliner globally Largest European importer of folding boxboard to US TOP10 customers: ~25% of sales Largest customer: <5% of sales EMEA Americas FY 2019: 71% 21% EUR 1,932m 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 3

  4. Our focus is on premium fresh fibre paperboards mainly used for consumer goods packaging Total paperboard capacity 2Mt, of which 2/3 folding boxboard and 1/3 white kraftliners Folding boxboards and food service boards White kraftliners, coated and uncoated Folding boxboard end-uses* White kraftliner end-uses* E-commerce Graphical end-uses Other Food and Food Shelf-ready and consumer Point-of-sale Other service goods (e.g. consumer (food, electronics) goods (e.g. beverages, pharma, cosmetics) cosmetics) *) all data is indicative and based on Metsä Board’s own estimates 4

  5. Metsä Board’s strategy M E G A T R E N D S : URBANISATION DIGITALISATION CLIMATE CHANGE GLOBALISATION POPULATION GROWTH d V A L U E S Responsible profitability Reliability Cooperation Renewal M I S S I O N V I S I O N Preferred supplier of innovative and Packaging solutions sustainable fibre-based packaging that respect nature solutions, creating value for customers globally S T R A T E G Y FOCUS GROWTH PROFITABILITY We are the leader in sustainability, focusing on premium fresh fibre We grow globally together with our existing Our profitability is based on the efficiency of our operations and products for consumer and retail packaging. The high performance and new customers by offering sustainable, safe and high- prioritisation of businesses that benefit from the high performance of our of our products is based on technical excellence and tailor made performing products. Our growth is based on skilled people, products and services. high-quality Nordic pulps. industry leading products and new innovative packaging solutions. 5

  6. We have a leading position in Europe in our main products White kraftliner Folding boxboard • Metsä Board is #1 in coated in Europe in Europe white kraftliners globally Total capacity 2.2m tonnes Total capacity 3.9m tonnes • We are #1 European importer of FBB to US Metsä Others Metsä Others • In APAC we focus on high- Board Board #5 quality FBB segment #1 #1 30 % 35 % • Regional sales split of #5 #4 paperboard deliveries (2019): • 70% EMEA #4 • 24% Americas #3 #3 #2 #2 • 6% APAC FBB = Folding boxboard WKL = White kraftliner 6

  7. Our production is close to our main raw material Our net balance in pulp in 2019, Total paperboard capacity : including the 24.9% ownership in Folding boxboard (FBB): 1,350,000 t/a Metsä Fibre, is 600,000 t/a White kraftliner (WKL): 675,000 t/a Wood sourced from Finland, Sweden, Äänekoski Kemi Baltics and Russia. 425,000 t/a WKL 260,000 t/a FBB 610,000 t/a Pulp * 1.3 million t/a Pulp* Husum, SWE Simpele 400,000 t/a FBB 290,000 t/a FBB 250,000 t/a WKL 730,000 t/a Pulp Joutseno Kaskinen 330,000 t/a BCTMP 370,000 t/a BCTMP 690,000 t/a Pulp* Kyro Tako 190,000 t/a FBB 210,000 t/a FBB * Metsä Fibre mill 7

  8. We have good control of wood raw materials, from forests to pulp and board production • High availability of Northern wood • Consistent quality of fibres that are tailor-made for the end products METSÄ GROUP METSÄLIITTO COOPERATIVE Group’s parent company, owned by 103,000 Finnish forest owners 100% 50.1% 46% 100% Metsäliitto’s ownership: 100% METSÄ METSÄ METSÄ METSÄ METSÄ FOREST FIBRE WOOD BOARD TISSUE Wood supply and Pulp and sawn Wood products Paperboard Tissue and forest services timber greaseproof papers METSÄ BOARD OWNS 24.9% Through Metsä Fibre’s ownership Metsä Board’s annual net pulp balance is 600,000 tonnes long 8

  9. Annual paperboard delivery volumes have remained stable during the recent years Metsä Board’s annual paperboard deliveries and current capacity, 1,000 tonnes Total paperboard capacity 2 million tonnes 2 000 2 000 615 1 500 1 500 584 658 580 1,000 tonnes 539 444 1 000 1 000 373 1215 1207 1144 500 500 988 865 801 763 0 0 2013 2014 2015 2016 2017 2018 2019 White kraftliner deliveries Folding boxboard deliveries Total paperboard capacity * During 2013-2017 the demand growth for FBB and WKL was ~3%/year 9

  10. Investments have been moderate during 2017–2019 Husum pulp mill renewal will increase capex in the coming years Capital expenditure and depreciation Main growth and development investments in 2014–2020E: 250 2020E Husum pulp mill renewal 200 EUR million 2019 Husum pulp mill renewal, 150 new sheeting line in Äänekoski 2018 New baling line in Kaskinen BCTMP mill: 100 30,000 new BCTMP capacity 50 2017 New extrusion coating line in Husum: 100,000 t/a PE coating capacity 0 2015–16 New folding boxboard production line in 2014 2015 2016 2017 2018 2019 2020E Husum: 400,000 t/a of FBB and linerboard production line conversion: 250,000 t/a of Capex for growth and development WKL NOTE! Estimated Maintenance capex investments in 2020 are Depreciation provisional and dependent on the environmental permit process related to the Husum pulp mill renewal 10

  11. Our long-term financial targets aim for profitability and a strong balance sheet Comparable ROCE: Net debt/comparable EBITDA: Dividend policy: Maximum level 2.5x Payout ratio at least 50% of net result Target at least 12% 76 < 2.5x 59 14.4 2.0 51 50 10.4 11.2 > 50% > 12% 1.2 8.1 1.1 1.0 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 11 11

  12. Our aim is to create the highest possible shareholder value Dividend, EUR and payout ratio, % Enterprise value, EUR million 3000 0,30 100% 0,25 2500 75% 0,20 2000 1500 0,15 50% 1000 0,10 25% 500 0,05 0 0,00 0% 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 Dividend, EUR Dividend/EPS, % Net debt Market capitalization Year 2019 is the Board’s proposal to AGM Year 2018 and 2019 total distributions consist of a dividend and other distribution of equity 12

  13. Capital allocation Free cash flow in EUR million and % of EBITDA • Capital allocation for 2020 EUR million % – EUR 85 million dividend will be paid in April 200 80 Comparable (Dependent on AGM’s decision on March) EBITDA, EUR 279 million – CAPEX: Estimated EUR 200-210 million, including 150 60 EUR 50-60 million annual maintenance capex and EUR 130-140 million capex to Husum pulp mill 100 40 renewal (dependent on the timing of environmental 50 20 permit granted by Swedish authorities) • Husum pulp mill renewal and estimated impacts 0 0 on capital allocation going forward -50 -20 – Phase 1: Total investment value EUR 320 million, divided over 3 years in 2019-2022 -100 -40 2014 2015 2016 2017 2018 2019 – Financing mainly through incremental debt – cost estimated at ~1% p.a. or EUR 2 million/year FCF, EUR million FCF/EBITDA,% – Dividend policy unchanged FCF=Cash flow from operations after investments 13

  14. Planned investments Renewal of MetsäBoard Husumpulp mill New bioproduct mill and a sawmill line by MetsäFibre

  15. Metsä Board and Metsä Fibre are planning three major investments with total value of EUR 2 billion The aim is to further improve the competitiveness of pulp and energy production and move towards fossil-free mills Metsä Board: Husum, SWE Metsä Fibre: Kemi, FIN Metsä Fibre: Rauma, FIN Renewal of the pulp mill New bioproduct mill New pine sawmill line EUR 320 million (first phase) EUR ~1.5 billion EUR ~200 million Metsä Board owns 24.9% of Metsä Fibre

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