Mets Board Interim report January September 2016 Performance in - - PowerPoint PPT Presentation

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Mets Board Interim report January September 2016 Performance in - - PowerPoint PPT Presentation

Jan 09, 2023 98 likes •390 views

Mets Board Interim report January September 2016 Performance in Q3/2016 Healthy market situation in fresh fibre paperboards Growing delivery and production volumes Fine paper production ended in July and wallpaper base

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SLIDE 1

Metsä Board

Interim report January–September 2016

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SLIDE 2
  • Healthy market situation in fresh fibre

paperboards

  • Growing delivery and production volumes
  • Fine paper production ended in July and

wallpaper base production in September

  • Solid performance in Finnish mills, Husum

impacted profitability negatively

  • Cash flow from operations was clearly

positive

Performance in Q3/2016

2 Interim report 1-9/2016

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SLIDE 3

Paperboard deliveries grew due to the healthy demand

CAGR% in deliveries in 2011–2015 has been 9% / year

197 210 203 204 213 224 224 227 250 266 110 120 111 130 141 137 131 142 148 148 60 120 180 240 300 360 420 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Folding boxboard Fresh fibre linerboard

1,000 tonnes

Note! Figures do not include wallpaper deliveries

Change in paperboard deliveries:

+4% Q3/16 vs.Q2/16 +15% Q3/16 vs.Q3/15

3 Interim report 1-9/2016

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SLIDE 4

Sales increased, operating profit negatively impacted by Husum

Sales,

EUR million

Comparable operating result

EUR million

514 499 526 522 498 462 436 423 440 100 200 300 400 500 600 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 35 37 43 47 55 35 35 36 34 10 20 30 40 50 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16

____________ Q1-Q3/2015: 1,545 M€ ____________ Q1-Q3/2016: 1,299 M€ ____________ Q1-Q3/2015: 145 M€ ____________ Q1-Q3/2016: 105 M€

4 Interim report 1-9/2016

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SLIDE 5

Profitability development

Comparable ROCE, % Comparable operating profit of sales, %

6,4 9,1 11,3 13,0 8,3 8,5 8,0 2 4 6 8 10 12 14 2013 2014 2015 Q3/15 Q1/16 Q2/16 Q3/16 5,2 6,8 9,0 11,0 8,0 8,5 7,7 2 4 6 8 10 12 2013 2014 2015 Q3/15 Q1/16 Q2/16 Q3/16 Target over 12% from 2017

5 Interim report 1-9/2016

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SLIDE 6
  • Delays in deliveries in Q3 due to the

– Bottlenecks in the finishing area (Q2/2016) – Leak in the pulp mill’s recovery boiler (Jun-Jul/2016)

  • Efficiency improvement programme is progressing as

planned

  • Investment programme targets

– Full capacity of FBB machine is reached by end of 2016 – Annual EBIT improvement of €50 million from 2018

  • nwards
  • Healthy price level in order intake, but long lead time

will postpone positive profit impact

Ramp-up phase of folding boxboard machine in Husum is going forward

6

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SLIDE 7

200 400 600 800 1000 1200 1400

Production (packed net) 7 days rolling average Monthly/Quarterly average

Steadily increasing production volumes in Q3

Q1/2016 Q2/2016 Q3/2016

July August September

Daily production volumes in Husum’s new FBB machine, tonnes

tonnes

7 Interim report 1-9/2016

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SLIDE 8

60 65 70 75 80 85 90 95 100 105 EBIT breakeven at 75% capacity utilization Received orders €/t Invoicing €/t

Price level of current order intake in Husum FBB indicates EBIT breakeven with 75% capacity utilization

8

July August September October

Trendlines from weekly data: Indexed price development of received orders and invoicing of Husum’s FBB

Interim report 1-9/2016

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SLIDE 9
  • Total FX impact in Q3 2016 vs.Q2 2016 was slightly positive
  • Hedging duration of the main foreign currency flows is currently 5-6 months

FX exposure and sensitivities

58 % 32 % 6 %4 %

USD SEK GBP Other currencies

FX exposure by currency Annual gross amount EUR 1.1 billion Annual FX sensitivities to Group EBIT before hedges

10 % strengthening of foreign currency vs. EUR will have an impact on Metsä Board’s EBIT of Currency Next 12 months USD, $ EUR +60 million GBP, £ EUR +5 million Swedish krona EUR -30 million

9 Interim report 1-9/2016

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SLIDE 10

Decrease in working capital and smaller investments turned the cash flows clearly positive

51 74 33 56 93 66

  • 22
  • 22

67 46 56 9 8 45 8

  • 76
  • 50

49 157 198 250 214 256 247 193 115 89 110 155 188 119 118 70

  • 15
  • 73
  • 69
  • 100
  • 50

50 100 150 200 250 300 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Cash flow from operations, quarterly Free cash flow, quarterly Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months

EUR million

10 Interim report 1-9/2016

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SLIDE 11

Positive cash flow decreased net debt

597 427 333 344 412 541 488 2.9 1.8 1.2 1.2 1.5 2.1 2.1 1 2 3 4 200 400 600 2013 2014 2015 9/15 3/16 6/16 9/16

Interest-bearing net debt, EUR million Interest-bearing net debt / EBITDA (rolling 12m)

Interest-bearing net debt / EBITDA

597 427 333 344 412 541 488 70% 51% 32% 34% 42% 54% 49%

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

200 400 600 2013 2014 2015 9/15 3/16 6/16 9/16

Interest-bearing net debt, € million Net gearing-%

Net gearing, %

11 Interim report 1-9/2016

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SLIDE 12
  • Estimated total capex in 2016 was revised

from €135 to €165 million due to a cost

  • verrun in Husum investment programme

and changes in capex allocations between years of the extrusion coating line

  • In Jan–Sep 2016 total capex was €119

million

  • Main growth capexes in 2016 include

Husum investment programme, extrusion coating line and equity investment in Metsä Fibre’s bioproduct mill

Estimated total capex in 2016 has been revised to €165 million

30 60 90 120 150 180 2010 2011 2012 2013 2014 2015 2016E Capex Growth capex Depreciation € million

12 Interim report 1-9/2016

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SLIDE 13
  • Positive market situation in fresh fibre paperboard

– Stable or increasing market prices

  • Metsä Board’s paperboard delivery volumes expected

to remain stable

  • Healthy price level in the order intake of Husum’s new

FBB, but long lead time postpones the profit impact

  • Extended annual maintenance shutdown in Husum in

Q4 increases costs

  • Revised estimate for total investments in 2016 is

€165 million

Near-term outlook

13 Interim report 1-9/2016

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SLIDE 14

Metsä Board’s comparable

  • perating result in the fourth

quarter of 2016 is expected to remain roughly on the same level as in the third quarter of 2016.

Profit guidance for Q4/2016

14 Interim report 1-9/2016

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SLIDE 15
  • Q3 result was as expected:

– Delivery and production volumes increased – Husum still impacted the profitability – Cash flow from operations clearly positive

  • Fine paper production ended in July and

wallpaper base production in September

  • Stable profit development expected to

continue in Finnish mills

  • Profitability in Husum will improve
  • Long-term financial targets are unchanged

Summary

15 Interim report 1-9/2016

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SLIDE 16

Appendix

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SLIDE 17

Key financials

Q3/16 Q2/16

Change Q3/16

  • vs. Q2/16

1-9/16 1-9/15

Change 1-9/16

  • vs. 1-9/15

Sales

€ million

440 423 4% 1,299 1,545

  • 16%

EBITDA, comparable

€ million

59 61

  • 3%

178 224

  • 20%

% of sales

%

13.5 14.4 13.7 14.5 Operating result, comparable

€ million

34 36

  • 6%

105 145

  • 28%

% of sales

%

7.7 8.5 8.1 9.4 Result before taxes, comparable

€ million

27 27 84 120

  • 30%

Earnings per share

€

0.07 0.07 0.21 0.27

  • 22%

ROCE, comparable

%

8.0 8.5 8.3 12.1 Gross investments

€ million

16 48

  • 67%

119 117 2% Cash flow from operations

€ million

67

  • 22

23 181

  • 87%

17 Interim report 1-9/2016

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SLIDE 18

Comparable EBITDA

52 62 61 70 73 81 60 58 61 59

11% 12% 12% 13% 14% 16% 13% 13% 14% 14%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

20 40 60 80 100 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 EBITDA, EUR million EBITDA, %

18 Interim report 1-9/2016

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SLIDE 19

Long-term debt and financial costs

Net financial costs (€ million) and average interest rate (%) Maturity schedule in long-term IB debt

€ million

47 56 39 32 21

5,2% 4,6% 4,2% 3,8% 3,3%

2,5 3,0 3,5 4,0 4,5 5,0 5,5 10 20 30 40 50 60

2012 2013 2014 2015 Q1-3/2016 Net financial costs, € million Average interest rate at the end of period, %

17 155 34 256 173 100 65

50 100 150 200 250 300

2016 2017 2018 2019 2020 2021 >2022 Long-term interest bearing liabilities, € million Committed undrawn credit facilities, € million

19 Interim report 1-9/2016

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SLIDE 20

Debt structure and liquidity

30 September 2016 222 199 144 20 108

Bonds Loans from financial institutions Pension loans Finance leases and

  • ther loans

Other short-term loans

202 100 65

Cash and cash equivalents Revolving credit facility Unraised pension loans

Debt structure, total EUR 693 million Available liquidity, total EUR 367 million

Average maturity of long-term loans at 30 September in 2016 was 2.4 years.

20 Interim report 1-9/2016

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SLIDE 21

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1/2016

Metsä Board 's credit rating

Moody’s Standard & Poor’s

BB+ | Ba1

Stable Positive

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

21 Interim report 1-9/2016

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SLIDE 22

500 600 700 800 900 1000 1100 2009 2010 2011 2012 2013 2014 2015 2016

Taivekartonki Valkopintainen kraftlaineri

Market price development in folding boxboard and white-top kraftliner in Europe

Sources: Pöyry Management Consulting ja FOEX Indexes Ltd

EUR/ tn

Folding boxboard White-top kraftliner

22 Interim report 1-9/2016

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SLIDE 23

Pulp price development (PIX)

350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050

'10 '11 '12 '13 '14 '15 '16

350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050

Source: Foex Indexes Ltd

Softwood, USD

Softwood, EUR Hardwood, EUR

Hardwood, USD

USD EUR

23 Interim report 1-9/2016

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SLIDE 24

Market cap and foreign owners

30 September 2016

Ownership distribution

30 September 2016

Market cap and ownership distribution

4 8 12 16 20 24 500 1 000 1 500 2 000 2 500

2012 2013 2014 2015 9/2016

Market cap, EUR million Share of foreign owners, %

42 % 25 % 18 % 15 %

Metsäliitto Cooperative Domestic institutional investors Domestic private investors Foreign owners

EUR million *) Metsäliitto Cooperative has 62% of the voting rights

*) 24

%

Interim report 1-9/2016

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SLIDE 25

25

Metsä Board is a world leader for corporate action on climate change

  • Metsä Board was awarded a position on

the Climate A List by CDP

  • Only 9% of corporations participating to be

awarded on the list

  • In 2015 a position on the Water A List and a

leadership status in Forest programme

  • Investments in bioenergy, as well as energy and

material efficiency

  • Fossil CO2 emissions have decreased by 42%

since 2009

  • More than 80% of the fuels used are bio-based.

Interim report 1-9/2016

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  • Metsä Board’s fresh fibre paperboard was used

in three prize-winning paperboard packages, including

– the award of the Carton of the Year – the winners in Food and Beauty & Cosmetics categories

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Metsä Board’s high-quality paperboards well recognised in Pro Carton ECMA Awards

Interim report 1-9/2016

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SLIDE 27