Mets Board Investor presentation 1 6/2018 2 August 2018 Contents - - PowerPoint PPT Presentation
Mets Board Investor presentation 1 6/2018 2 August 2018 Contents This is Mets Board 3 Strategy and financial targets 14 Operating environment and market position 21 Growth in the paperboard business 32 2018 Half-Year Financial
2 August 2018
Investor presentation 1–6/2018 2
This is Metsä Board 3 Strategy and financial targets 14 Operating environment and market position 21 Growth in the paperboard business 32 2018 Half-Year Financial Report 38 Credit update 51 Production, capacities and sourcing 57 Product development focus areas 65 Sustainability 71 Appendix 77 Contact information 83
fibre paperboards
– #1 in folding boxboard and white kraftliners in Europe – #1 in coated white kraftliners globally
sustainability – are driving the demand for ecological packacing
Investor presentation 1–6/2018 4
Folding boxboard 55% White kraftliners 26% Market pulp 19%
Sales split in H1 2018
EMEA 72 % Americas 19 % APAC 9 %
Sales split by region in H1 2018
Global sales to over
countries
production units in Finland and Sweden
Enterprise value, € million
500 1000 1500 2000 2500 3000 3500 4000
2010 2011 2012 2013 2014 2015 2016 2017 6/18
Market capitalization, EUR million Net debt, EUR million
Dividend, € and payout ratio, %
0% 15% 30% 45% 60% 75% 90% 0,00 0,04 0,08 0,12 0,16 0,20 0,24 2012 2013 2014 2015 2016 2017 Dividend, EUR Dividend/EPS, %
5 Investor presentation 1–6/2018
EUR mill. EUR
6
500 1 000 1 500 2 000
2013 2014 2015 2016 2017 H1 2018 White kraftliner Folding boxboard
Metsä Board’s paperboard deliveries
1,000 tonnes
Investor presentation 1–6/2018
* Annual global demand growth for folding boxboard and white kraftliners is estimated to be 3–4% Source: Metsä Board´s own research
Folding boxboards
Packaging solutions for consumer goods
Food service boards
Solutions for food service
White kraftliners
Retail-ready tray and point-of-sale solutions
– Metsä Board’s folding boxboard can be up to 30% lighter compared to competing grades
– Fresh fibre paperboards do not include harmful substances which could be absorbed into foodstuff in food and food service packaging
– Major part of the energy the company uses is renewable and the wood used as raw material is fully traceable
– Only high-quality paperboards
Investor presentation 1–6/2018 8
products not willing to change paperboard suppliers easily in the high-quality segments
– High speed packaging lines very quality sensitive – Requirements for unified brand look and feel globally – Sustainability and product safety aspects
Investor presentation 1–6/2018 9
Metsä Board’s folding boxboards are produced from BCTMP or mechanical pulp, which is used in the middle layer (3) to make the board bulky and light. The two outer fibre layers (2 and 4) are made of chemical pulp, which maximizes the strength of the board. Coating layers (1) can be one or several and on top or both sides.
10
Investor presentation 1–6/2018
Roughly 50% of Metsä Board’s folding boxboard sales in Europe is negotiated directly with brand owners
11
BRAND OWNERS FOLDING BOXBOARD WHITE LINERBOARDS MERCHANTS CORRUGATED BOX MANUFACTURERS CONVERTERS
Investor presentation 1–6/2018
is at least 50 per cent of the result for the financial period
– EUR 0.21 per share – Totalling EUR 75 million – Corresponds to 50 per cent of EPS
0,00 0,10 0,20 0,30 0,40 0,50 2013 2014 2015 2016 2017
EPS and DPS, EUR
Earnings per share Dividend per share
Investor presentation 1–6/2018 12
13
120,000 tonnes
production lost in 2016
Restructuring:
Efficiency improvement programme FBB capacity utilisation rate >95% with normal sales price*
Investor presentation 1–6/2018
€25 million €5 million €70 million
* The sales price improvement in Euros is currently being delayed by the weakened US dollar
Values
Strategic cornerstones
Investor presentation 1–6/2018 15
Focus on premium fresh fibre paperboards for consumer and retail packaging This means to us:
expectations require our high quality, light and strong packaging materials
from the store to the consumer
Investor presentation 1–6/2018 16
Profitability is based on superior cost efficiency and healthy sales prices driven by high-quality pulps and unique technical know-how This means to us:
developing productivity and efficiency of our mills,
areas
unique paperboard making expertise helps us to improve
levels
Investor presentation 1–6/2018 17
Grow profitably together with brand owner, converter and merchant customers globally in businesses that benefit from our safe and sustainable paperboards This means to us:
protecting our customers’ products and promoting their brands and businesses
private label, converter and merchant customers
we can generate value for our customers and grow profitably with them
Investor presentation 1–6/2018 18
Comparable ROCE, %
9,1 11,3 8,1 11,2 15,1 2014 2015 2016 2017 H1/18 1,8 1,2 2,0 1,2 1,2 2014 2015 2016 2017 H1/18
Net debt / comparable EBITDA, %
10% 13% 12% 15% 6% 2014 2015 2016 2017 H1/18
Annual growth in total paperboard deliveries, %
Target is to exceed relevant market growth, 3-4%/a
Dividend policy: Metsä Board aims to distribute at least 50% of its result for the financial period in annual dividends to its shareholders
Target: >12% Target: <2.5
19 Investor presentation 1–6/2018 19
Investor presentation 1–6/2018 20
Investor presentation 1–6/2018 22
packaging
efficiency
value chain
Replacing fossil- based materials, i.e. plastics The solution: renewable and biodegradable wood fibre Increased waste generation due to urbanisation The solution: circular economy and bio-based packaging Reducing carbon footprint The solution: bio-based fuels, lower production emissions and lighter paperboards Consumer expectations on safer products – especially in food packaging The solution: pure and safe fresh fibres Fresh fibre paperboards offer solutions to major challenges
The total packaging market is USD 850 billion
Paperboard packaging Other wood fibre based packaging Non-fibre based packaging
Investor presentation 1–6/2018 24
Average annual growth rate of paperboard packaging USD 300 bn
USD bn
Source: Smithers Pira
50 100 150 200 250 300 350 400 2012 2013 2014 2015 2016 2017 2022F + 3% per year 2017-2022
Investor presentation 1–6/2018 25
Annual global demand growth for folding boxboard and white kraftliners is estimated to be 3–4%
5-YEAR GROWTH FORECAST EMEA Americas APAC
Folding boxboard (FBB) Food service board (FSB) Coated white kraftliner Uncoated white kraftliner Other fresh fibre paperboards (e.g. SBS, CUK) Recycled paperboards (e.g. WLC)
+2%/a or more +1 to +2%/a
Source: Metsä Board research Metsä Board’s focus area
Investor presentation 1–6/2018 26 Source: Metsä Board estimates
*Excluding liquid packaging board, cup & plate stock,
liner and uncoated recycled board.
APAC
20 Mt/a
EMEA
9 Mt/a
North America
7 Mt/a
Lat.Am.
2 Mt/a
Folding boxboard Other fresh fibre grades
(e.g. SBS, CUK)
Recycled grades
for folding boxboard is 3–4% per year
27
* Base board (e.g. SBB or FBB) only, excl. other
laminate materials such as aluminium and PE.
Cups Plates Cartons
APAC
1.0 Mt/a
EMEA
0.9 Mt/a
Americas
1.6 Mt/a
service board is 3–5%/a
Source: Metsä Board estimates Investor presentation 1–6/2018
28
Source: Metsä Board estimates
Americas
3 Mt/a
Global containerboard market is 160 Mt/a, of which
Americas
3 Mt/a
EMEA
5 Mt /a
APAC
3 Mt/a
White uncoated kraftliner White coated kraftliner White recycled liner
linerboard is 3–4%/a
Demand for white coated kraftliners is 1 million tonne
Investor presentation 1–6/2018
Largest Folding Boxboard Producers in Europe Total capacity: 3.8M tonnes
300 600 900 1200 1500
Others Competitor 4 Competitor 3 Competitor 2 Competitor 1 Metsä Board
200 400 600 800
Others Competitor 4 Competitor 3 Competitor 2 Competitor 1 Metsä Board
Investor presentation 1–6/2018 29
Largest White Fresh Fibre Linerboard Producers in Europe Total capacity: 2.1M tonnes
Source: Metsä Board estimates
500 600 700 800 900 1000 1100 1200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Folding Boxboard White-top kraftliner
Investor presentation 1–6/2018 30
EUR/ tn
Sources: RISI, Inc. & FOEX Indexes Ltd
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
350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250
Source: Foex Indexes Ltd
Softwood, USD Softwood, EUR Hardwood, EUR Hardwood, USD
USD EUR
Investor presentation 1–6/2018 31
From 2005 to 2017
tonnes
Merchants (2007)
Investor presentation 1–6/2018 33
Investor presentation 1–6/2018 34
50 100 150 200 250 300
2011 2012 2013 2014 2015 2016 2017 2018 target Folding boxboard White kraftliner
300 200
1,000 tonnes
Actual and targeted deliveries to Americas
35
GROWTH CONTINUES IN THE AMERICAS MAINTAIN THE STRONG MARKET POSITION IN EUROPE FOCUS ON PREMIUM PAPERBOARD SEGMENTS IN THE ASIA-PACIFIC REGION AMERICAS
SHARE OF TOTAL PAPERBOARD SALES IN H1 2018
23% EMEA
SHARE OF TOTAL PAPERBOARD SALES IN H1 2018
70% APAC
SHARE OF TOTAL PAPERBOARD SALES IN H1 2018
7%
Investor presentation 1–6/2018
36
GROWTH CONTINUES IN THE AMERICAS MAINTAIN THE STRONG MARKET POSITION IN EUROPE FOCUS ON PREMIUM PAPERBOARD SEGMENTS IN THE ASIA-PACIFIC REGION AMERICAS
SHARE OF SALES IN 2017
19% EMEA
SHARE OF SALES IN 2017
72% APAC
SHARE OF SALES IN 2017
9 %
Investor presentation 1–6/2018
EUROPE
based on long-standing customer accounts and a broad customer base
through a diverse selection of products and services focused
support demand for fresh fibre paperboards
37
GROWTH CONTINUES IN THE AMERICAS MAINTAIN THE STRONG MARKET POSITION IN EUROPE FOCUS ON PREMIUM PAPERBOARD SEGMENTS IN THE ASIA-PACIFIC REGION AMERICAS
SHARE OF SALES IN 2017
19% EMEA
SHARE OF SALES IN 2016
75 % APAC
SHARE OF SALES IN 2016
8 % AMERICAS
rapid growth in the demand for food service packaging made from fresh fibre paperboard
commerce increases demand for premium white kraftliner
Investor presentation 1–6/2018
record high levels – 489,000 tonnes
mills
Sweden and freight costs in US had a negative impact on operating result
Investor presentation 1–6/2018 39
227 250 266 245 265 304 299 276 297 328 142 148 148 143 163 173 170 152 171 161
100 200 300 400 500 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
White kraftliner Folding boxboard
1,000 tonnes
40 Investor presentation 1–6/2018
1-12 2016 1,568,000 tonnes 1-12 2017 1,802,000 tonnes
Annual global demand growth for folding boxboard and white kraftliners is estimated to be 3–4%
Source: Metsä Board’s
1-6 2017 906,000 tonnes 1-6 2018 957,000 tonnes
+6% +15%
Folding boxboard deliveries in H1/18 (H1/17) 1,000 tonnes
EMEA 433 (397) Americas 127 (112) APAC 64 (59) EMEA 237 (229) Americas 93 (98)
Investor presentation 1–6/2018 41
White kraftliner deliveries in H1/18 (H1/17) 1,000 tonnes
70% 20% 10% 72% 28%
Total FBB deliveries grew by 10% Total WKL deliveries decreased by 1%
Sales
EUR million
445 474 479 451 492 519
100 200 300 400 500
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
45 44 50 54 69 59
10,2 % 9,2 % 10,5 % 12,0 % 14,0 % 11,4 % 0% 4% 8% 12% 16% 20 40 60 80
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
Investor presentation 1–6/2018 42
Comparable operating result
EUR million and % of sales
EUR million EUR million
1-12 2017: € 1,849 million 1-6 2017: € 919 million 1-6 2018: € 1,011 million 1-12 2017: € 194 million 1-6 2017: € 89 million 1-6 2018: € 128 million
600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250 '10 '11 '12 '13 '14 '15 '16 '17 '18 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250
Softwood (NBSK) Hardwood (NBHK)
Source: Foex Indexes Ltd
USD
Investor presentation 1–6/2018 43
USD
Pulp price (PIX) development in Europe
500,000 tonnes long, including Metsä Fibre’s share
coming years
imports in China
Wood 26 % Logistics 16 % Chemicals, pigments and fillers 14 % Energy 12 % Other variables 3 % Personnel 14 % Other fixed 15 %
Investor presentation 1–6/2018 44
imported from Baltics to Sweden
estimated to be EUR 30 million higher in 2018 vs. 2017
2017 was 5.4 million m3
countries 17%, Russia 11% Metsä Board’s cost split in 2017 total €1.6 billion
– Q2 2018 vs. Q1 2018: Neutral – H1 2018 vs. H1 2017: €28 million negative
55 % 36 % 7 % 2 %
USD SEK GBP Other currencies
12 month transaction exposure EUR 1.1 billion FX sensitivities excluding hedges
10% strengthening of foreign currency vs. EUR will have an impact on Metsä Board’s EBIT of Currency Next 12 months USD, $ EUR +64 million SEK EUR -42 million GBP, £ EUR +8 million
45 Investor presentation 1–6/2018
0% 2% 4% 6% 8% 10% 12% 14% 16% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Comparable ROCE-%, Quarterly
Investor presentation 1–6/2018 46
Target >12%
Q2/18: 13.9%
67 55 26 37 68 106 30 36
49 17 7 25 59 79 20 23
50 100 150 200 250
50 100 150 200 250 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Cash flow from operations, quarterly Free cash flow, quarterly Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months
EUR million
47 Investor presentation 1–6/2018 Free cash flow = Cash flow from operations - investments
541 488 464 458 495 437 358 335 388 2,1 2,1 2,0 1,9 2,0 1,7 1,2 1,1 1,2
0,0 0,5 1,0 1,5 2,0 2,5 3,0 100 200 300 400 500 600 6/2016 9/2016 12/2016 3/2017 6/2017 9/2017 12/2017 3/2018 6/2018 Net debt, EUR million Net debt to comparable EBITDA
Investor presentation 1–6/2018 48
Net debt / EBITDA target level <2.5
EUR million
Investor presentation 1–6/2018 49
prices are expected to be stable
expected to stay at the same level as in Q2
– Kemi integrate in Q3 and Husum integrate in Q3–Q4
compared to 2017
Metsä Board’s comparable operating result in the third quarter of 2018 is expected to remain roughly at the same level as in the second quarter
Investor presentation 1–6/2018 50
308 64 79 11 21
Bonds Loans from financial institutions Pension loans Finance leases and
Other short-term loans
92 150 134
Cash and cash equivalents Revolving credit facility Unraised pension loans
Interest-bearing debt
EUR 483 million (31 March 2018: 617 M€)
Available liquidity
EUR 376 million (31 March 2018: 513 M€) Average maturity of long-term loans on 30 June 2018 was 5.8 years.
52 Investor presentation 1–6/2018
* Of which EUR 248 million due 2027
and EUR 60 million due 2019
*
50 100 150 200 250
2018 2019 2020 2021 2022–26 2027 Bonds Loans from financial institutions Pension loans Other loans
Investor presentation 1–6/2018 53
30 June 2018
Interest-bearing debt maturity profile 30 June 2018
EUR million
million (31.3.2018: EUR 617 million)
EUR 100 million of its existing loan and increased the size
Rating agency Rating and
Last update Standard & Poor‘s BBB- stable 02/2018 Upgrade from BB+ Moody‘s Ba1 positive 04/2018 Upgrade from stable outlook
Metsä Board’s credit ratings
Company has an undrawn revolving credit facility of EUR 150 million maturing in 2020
Investor presentation 1–6/2018 54
Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*), % Maturity EUR 250 million bond issued 2017 250 250 2.8 2027 EUR 225 million bond issued 2014 60 60 4.4 2019 Syndicated credit facility 2014 200 50 2.7 2020 EUR 14 million bilateral loans 14 14 0.7 2018–2022 EUR 9 million finance leases 9 9 4.0 2018–2024 EUR 213 million pension loans 213 79 4.5 2018–2020 Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*), % Maturity Revolving credit facility 2014 150
Pension loan facilities 213 79 4.5
Metsä Group internal short-term limit 150
Metsä Group Treasury funding programmes EUR 150 million domestic CP programme 150
Metsä Board’s significant debt securities issued and outstanding at 30 June 2018
*) The average interest rate take into account outstanding interest rate swaps and amortised arrangement fees. The average interest rate of all Metsä Board interest bearing net liabilities incl. interest rate derivatives per 30 June 2018 is 3,3%.
Metsä Board’s principal long-term liquidity reserves at 30 June 2018
Investor presentation 1–6/2018 55
39 32 31 36 14
4,2 3,8 3,3 3,3 3,3
2,0 2,5 3,0 3,5 4,0 4,5 5,0 10 20 30 40 50 2014 2015 2016 2017 Q2/2018
Net financial costs, EUR million Average interest rate at the end of period, % EUR million %
foreign exchange differences) in 1–6/2018 were EUR 14 million (1–6/17: EUR 12 million)
Investor presentation 1–6/2018 56
CCC+ / Caa1 B- / B3 B / B2 B+ / B1 BB- / Ba3 BB / Ba2 BBB- / Baa3 BB+ / Ba1 CCC+ / Caa1 B- / B3 B / B2 B+ / B1 BB- / Ba3 BB / Ba2 BBB- / Baa3 BB+ / Ba1
Investor presentation 1–6/2018 58
Äänekoski Simpele Joutseno Tako Kyro Kaskinen Husum Kemi
Integrated mills
400,000 t/a folding boxboard 270,000 t/a white linerboard 730,000 t/a chemical pulp
420,000 t/a white linerboard 620,000 t/a chemical pulp by Metsä Fibre
240,000 t/a folding boxboard 1,300,000 t/a chemical pulp by Metsä Fibre
330,000 t/a BCTMP 690,000 t/a chemical pulp by Metsä Fibre
Non-integrated mills
190,000 t/a folding boxboard
290,000 t/a folding boxboard
210,000 t/a folding boxboard
340,000 t/a BCTMP Taking into account Metsä Group‘s pulp production, Metsä Board‘s pulp balance in 2018 is over 500,000 t/a long
Raw material Logistics Raw material Extrusion Raw material Paperboard Raw material Pulp
59
Raw material Raw material Metsä Board‘s Husum integrated mill
Investor presentation 1–6/2018
Investor presentation 1–6/2018 60
1 000 1 200 1 400 1 600 1 800 2 000 2 200 1 000 1 300 1 600 1 900 2 200 2010 2011 2012 2013 2014 2015 2016 2017 2018E
Production capacity tn/employee Personnel at current mills Production capacity (tonnes) / employee at current mills
Personnel at current mills Production capacity tn / employee
Investor presentation 1–6/2018 61
Town Country Machines Folding boxboard White fresh fibre linerboard Total Tampere (Tako) Finland 2 210 210 Kyröskoski (Kyro) Finland 1 190 190 Äänekoski Finland 1 240 240 Simpele Finland 1 290 290 Kemi Finland 1 420 420 Husum Sweden 2 400 270 670 Total 8 1,330 690 2,020
Investor presentation 1–6/2018 62
Metsä Board pulp mills Country Chemical pulp BCTMP Total
Husum Sweden 730 730 Joutseno Finland 330 330 Kaskinen Finland 340 340 Total 730 670 1,400
Metsä Fibre pulp mills Country Chemical pulp BCTMP Total
Äänekoski Finland 1,300 1,300 Kemi Finland 620 620 Rauma Finland 650 650 Joutseno Finland 690 690 Total 3,260 3,260
30 60 90 120 150 180 2010 2011 2012 2013 2014 2015 2016 2017 2018E Maintenance capex Growth capex Depreciation
EUR million
63 Investor presentation 1–6/2018
Main growth in capex in 2015−2016: Husum investment programme, extrusion coating line and equity investment in Metsä Fibre’s bioproduct mill
Own generation 22% Through PVO shareholding 29% Purchased energy 46% Outsourced generation 3% Wood- based 52% Nuclear power 28% Gas 8% Coal 4% Peat 4% Oil 2% Wind + solar 0% Hydro 0% Sweden 40% Finland 32% Baltic countries 17 % Russia 12%
Electricity sourcing (total 2,440 GWh)
Investor presentation 1–6/2018 64
Primary energy used (total 12.0 TWh) Wood sourcing by country (total 5.4 million cubic metres)
Improved BCTMP Microfibrillated cellulose (MFC) Strength additives
Dispersion barriers Bio-based raw materials
PE extrusion coated products
Investor presentation 1–6/2018 66
Metsä Board lightweight paperboard Average FBB – Folding boxboard SBB – Solid bleached board WLC – White lined chipboard
Investor presentation 1–6/2018 67
The weights equal to a print job of 30 000 sheets on a standard size printing press
68
NON-RENEWABLE BIODEGRADABLE RENEWABLE NON-BIODEGRADABLE Metsä Board’s baseboard is biobased, bio- degradable and compostable. Biobased, biodegradable coating, i.e. starch, PLA etc. Oil-based, biodegradable coating Bioplastic coating, i.e. green PE Latex based dispersion coating PE extrusion coating
Investor presentation 1–6/2018
Biobased barrier Non biobased barrier
Outsourced PE extrusion coating Own PE extrusion coating Biobased barrier Biobased light barrier
2016 2017 2018
Investor presentation 1–6/2018 69
paperboard
food contact time and when light grease resistance is sufficient
solutions, and is investigating the utilization of dispersion and biobased coatings, and their commercial potential
Investor presentation 1–6/2018 70
Metsä Board was awarded “Prime” status in Oekom corporate responsibility rating in May 2018. Metsä Board scored the highest recognition level “Gold” in EcoVadis’ CSR ranking in 2018, and is included in the top 1% of suppliers assessed across all categories. Metsä Board is included in CDP’s Climate A list and Water A list as well as in Supplier Climate A list and Supplier Water A list. In addition, Metsä Board achieved the Leadership status (A-) in CDP Forest programme in 2017. 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 is committed to Science Based Targets to reduce its GHG emissions in line with the goal of the Paris Agreement. As a member of Pack2Go Europe Metsä Board is committed to the environmental, health and safety aspects within the on-the- go food and beverage packaging industry. Metsä Board received a rating of AAA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment in June 2018. Metsä Board has an overall ESG score of 86/100 and is considered a Leader in Sustainalytics’ assessment in May 2018.
Investor presentation 1–6/2018 72
Pure paperboard helps to store the packaged product safely.
Durable paperboard protects the packaged product effectively. Our paperboards are recyclable and biodegradable, or they can be used for energy production. We follow good manufacturing principles (GMP). All of our products meet the requirements of relevant international legislation. Fresh fibre is a pure and safe, renewable raw material. We only use carefully selected and safe raw materials in our products.
Investor presentation 1–6/2018
Rain waters the forest
Bark is utilised as a bio-energy source Metsä Board’s board production is mostly integrated in pulp production Waste waters are always carefully cleaned before returned back to the waterways Also lakes and seas are a source of recreation Light weight boards are resource efficient both for us as well as for
99% of water used in the production process is returned back to the waterways Metsä Board’s paperboards can be recycled, depending upon local recycling services Forests are a source of recreation
Metsä Board has decreased its CO2 emissions by 45% since 2009 and the use of water by 14% since 2010 Metsä Board only uses surface water in its production
LOGISTICS
ENSURE THE SUSTAINAINABILITY OF MAIN LOGISTIC FLOWS PERFORMANCE 2016−2017
100% In the end of 2017, all 481
logistics partners included in the sustainability survey fulfilled Metsä Group’s sustainability criteria.
SAFETY AT WORK
LOST-TIME ACCIDENTS FREQUENCY ANNUALLY PERFORMANCE 2017
ENERGY
ENERGY EFFICIENCY IMPROVEMENT 2009−2020 PERFORMANCE 2017 10.2%
12%
RESOURCE EFFICIENCY
PROCESS WATER USE PER PRODUCT TONNE 2010−2020 PERFORMANCE 2017 -17%
>80% WOOD
THE SHARE OF CERTIFIED WOOD PERFORMANCE 2017 80%
CLIMATE
FOSSIL CO2 EMISSIONS PER PRODUCT TONNE 2009−2020 PERFORMANCE 2017 -47%
<3% WELL-BEING
SICKNESS ABSENTEEISM PERFORMANCE 2017 3.9%
BIOENERGY SHARE OF TOTAL PURCHASED ENERGY 52%
75
EU Commission – Announced plans to regulate printed food contact materials (FCMs)
Food Contact Material legislation in Switzerland – Part of Swiss Food law – Recycled paper cannot be used as FCM, if direct contact with food products – Concentration limits of certain polyaromatic hydrocarbons micrograms/kg food has been set Draft German mineral oil regulation – 4th ordinance draft published in March 2017 – The draft focuses on mineral oil migration from recycled fibre based packaging materials to food
76
Investor presentation 1–6/2018
Market cap and foreign owners
30 June 2018
Ownership distribution
30 June 2018
5 10 15 20 25 500 1 000 1 500 2 000 2 500 3 000 3 500
2013 2014 2015 2016 2017 6/2018
Market cap, EUR million Share of foreign owners, %
41 % 19 % 17 % 23 %
Metsäliitto Cooperative Domestic institutional investors Domestic private investors Foreign owners
EUR million
* Metsäliitto Cooperative has 62% of voting rights
*
78
%
Investor presentation 1–6/2018
METSÄ TISSUE
Tissue and cooking papers
Sales:
EUR 1.0 billion
Personnel:
2,800
Metsäliitto Cooperative holding 100%
METSÄ WOOD
Wood Products
Sales:
EUR 0.5 billion
Personnel:
1,400
Metsäliitto Cooperative holding 100%
METSÄ FOREST
Wood Supply and Forest Services
Sales:
EUR 1.6 billion
Personnel:
850
Metsäliitto Cooperative holding 100%
Investor presentation 1–6/2018 79
METSÄ BOARD
Paperboard
Sales:
EUR 1.8 billion
Personnel:
2,350
Metsäliitto Cooperative holding 41.5%, 61.4% of votes
METSÄ FIBRE
Pulp and Sawn Timber
Sales:
EUR 1.9 billion
Personnel:
1,200
Metsäliitto Cooperative holding 50.1%, Itochu Corporation 25.0% Metsä Board 24.9%
EUR 5.0 billion |
Personnel 9,100
METSÄLIITTO COOPERATIVE | Group’s parent company
| Owned by 104,000 Finnish forest owners (consolidated)
Metsä Board is listed
Investor presentation 1–6/2018 80
Mika Joukio
CEO Chairman of CMT since 2014 MG employee since 1990 Share ownership: 250,000
Jussi Noponen
CFO Member of CMT since 2016 MG employee since 2000 Share ownership: 54,000
Sari Pajari
SVP, Marketing and Sales Member of CMT since 2011 MG employee since 2007 Share ownership: 50,000
Ari Kiviranta
SVP, Development Member of CMT since 2014 MG employee since 1993 Share ownership: 38,938
Harri Pihlajaniemi
SVP, Production Member of CMT since 2017 MG employee in 2001-2004 and since 2017 Share ownership: no ownership
Susanna Tainio
SVP, HR Member of CMT since 2015 MG employee since 2011 Share ownership: 31,358 Share ownerships are B-shares. MG = Metsä Group
Investor presentation 1–6/2018 81
100 000 B2 shares in PVO
Acquisitions Divestments
Biberist Paper Mill UK Paper Modo Paper Zanders Chemicals Business Botnia Wood Corrugated Packaging MD Papier Metsä Tissue Albbruck Savon Sellu Forestia Kemiart Liners (53 %) 8% in Botnia PSM 9% in Botnia Carton plants Map 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 Rest of Reflex 0.5% in PVO 2012 7.3 % in Metsä Fibre 2013 2014 Alizay mill Lielahti real estate 2015 Gohrsmühle mill Simpele Mill
Year Divestiture Enterprise Value, EUR million
2015 Gohrsmühle mill in Germany neg. 2014 Lielahti real-estate 32 2013 Alizay property and other estates 22 2012 7.3% stake in Metsä Fibre 138 2012 0.5% stake in PVO 64 2011 Hallein 34 2009 Metsä-Botnia’s Uruguayan operations 300* 2008 Graphic Papers 750 2008 100,000 shares in PVO 80 2008 New Thames mill 82** 2007 Map Merchant Group 382 2007 Folding carton plants 60 2007 Botnia (9%) 240 2005 Botnia (8%) 164 2005 Savon Sellu 20 2005 Forestia (95%) 163 2004 Metsä Tissue 570 2002 Papierfabrik Albbruck 235 2001 MD Papier 300 2001 Noviant (19%) 41 3,679 Investor presentation 1–6/2018 82
* Cash portion **Incl. pension liabilities
Vice President, Investor relations Tel +358 400 976 333 katri.sundstrom@metsagroup.com www.metsaboard.com
83
Investor presentation 1–6/2018