Mets Group Interim report Q3/2018 Ilkka Hml President and CEO 8 - - PowerPoint PPT Presentation

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mets group interim report q3 2018
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Mets Group Interim report Q3/2018 Ilkka Hml President and CEO 8 - - PowerPoint PPT Presentation

Nov 13, 2022 395 likes •633 views

Mets Group Interim report Q3/2018 Ilkka Hml President and CEO 8 November 2018 Mets Group Q3 Excellent financial result Sales EUR 4,290 million (19/2017: EUR 3,712 million) Operating result* EUR 641 million (EUR 381

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SLIDE 1

Metsä Group Interim report Q3/2018

Ilkka Hämälä President and CEO

8 November 2018

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SLIDE 2
  • Sales EUR 4,290 million (1–9/2017: EUR 3,712 million)
  • Operating result* EUR 641 million (EUR 381 million)
  • Operating result of sales* 14.9% (10.3%)
  • Return on capital employed* 17.1 % (11.2%)
  • Sales increased due to greater delivery volumes and higher

pulp and paperboard prices

  • The result improved thanks to increase in pulp prices and

positive development of the paperboard business

  • Exchange rate fluctuations had a negative effect of

approximately EUR 120 million on the operating result compared to January–September of the previous year

8.11.2018 Metsä Group 2

Excellent financial result

Metsä Group – Q3 *comparable

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SLIDE 3
  • The market prices of long-fibre and short-fibre pulp continued

to increase

  • Production at Metsä Wood’s birch plywood mill in Pärnu began
  • Bioproduct mill reached full production capacity in August
  • Metsäliitto Cooperative made an early repayment of its EUR

56 million loan to the European Investment Bank

  • Investments in tissue and cooking papers progressed

according to plan

  • Juha Mäntylä was appointed COO of Metsäliitto Cooperative

and Esa Kaikkonen CEO of Metsä Tissue Corporation

  • After review period, it was decided to build a demo plant to

manufacture new kind of pulp-based textile fibre at Äänekoski

8.11.2018 3

Events in the third quarter

Metsä Group – Q3

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SLIDE 4

8.11.2018 Metsä Group 4

1,254 1,265 1,204 1,248 1,255 1,330 1,255 1,205 1,156 1,184 1,143 1,175 1,216 1,235 1,260 1,328 1,4281,477 1,386

400 800 1 200 1 600

Sales quarterly

Metsä Group – Q3

EUR million

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SLIDE 5

8.11.2018 Metsä Group 5

105 92 104 117 129 137 149 123 109 120 103 107 128 119 134 185 208 210 223 50 100 150 200 250

Q1/14 Q2 Q3 Q4 Q1/15 Q2 Q3 Q4 Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3

Metsä Group – Q3

EUR million

Comparable operating result

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SLIDE 6

Change in comparable operating result

8.11.2018 Metsä Group 6

Metsä Group – Q3

EUR million Comparable operating result 1–9/2017 381 Sales prices 462 Sales volumes 90 Exchange rates

  • 121

Raw materials and energy

  • 111

Employee costs

  • 22

Maintenance and other fixed costs

  • 8

Depreciation

  • 33

Others 4 Comparable operating result 1–9/2018 641

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SLIDE 7

Items affecting comparability

8.11.2018 Metsä Group 7

Metsä Group – Q3

EUR million 1–9/2018 Operating result (IFRS) 635.4 Items affecting comparability: Metsä Board / Efficiency improvement programme at Husum mill

  • 4.1

Metsä Board /Teollisuuden Voima divesting Meri-Pori coal-fired power plant

  • 1.7

Metsä Board / other +0.2 Items total

  • 5.6

Comparable operating result 641.0

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SLIDE 8

8.11.2018 Metsä Group 8

Comparable ROCE

Metsä Group – Q3

11.1 14.2 10.5 11.2 17.1 5 10 15 20 1–9/2014 1–9/2015 1–9/2016 1–9/2017 1–9/2018

%

Target >10%

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SLIDE 9

8.11.2018 Metsä Group 9

Equity ratio

Metsä Group – Q3

37.9 43.2 43.9 45.0 52.7 10 20 30 40 50 60 12/2014 12/2015 12/2016 12/2017 9/2018

%

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SLIDE 10

8.11.2018 Metsä Group 10

Interest-bearing net liabilities

Metsä Group – Q3

938 610 1,033 993 622 300 600 900 1 200 1 500 12/2014 12/2015 12/2016 12/2017 9/2018

EUR million

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SLIDE 11

8.11.2018 Metsä Group 11

Capital expenditure

Metsä Group – Q3

143 492 758 608 159 200 400 600 800 1–12/2014 1–12/2015 1–12/2016 1–12/2017 1–9/2018

EUR million Full year estimate

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SLIDE 12

8.11.2018 Metsä Group 12

Personnel

Metsä Group – Q3

10,410 9,599 9,300 9,126 9,348 3 000 6 000 9 000 12 000 12/2014 12/2015 12/2016 12/2017 9/2018

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SLIDE 13

Wood supply in line with the targets

  • Wood was harvested according to targets, and

deliveries to customers were smooth

  • Due to good harvesting and transport

conditions, the stocks of wood were at normal levels

  • Metsä Forest delivered a total of 27.2 million

cubic metres (23.7) of wood

  • 35% of the wood was bought digitally. In the

sale of forest management services, the figure was 41%

  • At the beginning of June 2018 an advance

financing service for digital wood trade was introduced

8.11.2018 Metsä Group 13

Sales and comparable operating result

  • Milj. euroa

Metsä Forest – Wood Supply and Forest Services

401 378 356 399 433 397 376 429 490 496 471

7.8 6.5 7.7 8.9 8.5 4.4 5.9 5.4 8.7 5.8 8.9

3 6 9 12 15 18 100 200 300 400 500 600

Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 Q1/18 Q2 Q3

Sales Operating result

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SLIDE 14

Wood products demand good except in the UK

  • Sales of engineered wood products remained

unchanged, but the sales of the UK business declined clearly

  • Demand for engineered wood products in the main

markets remained strong, in particular the order book levels of spruce plywood were higher than last year

  • Cost inflation, a decline in the profitability of the UK

business and the costs of new mills had a negative effect on the result. Production-related challenges were reflected in delivery volumes and result

  • Production at Metsä Wood’s birch plywood mill in

Pärnu began officially at the end of August

8.11.2018 Metsä Group 14

Sales and comparable operating result

EUR million Metsä Wood – Wood Products Industry

121 130 115 115 120 122 110 108 109 119 106

8.2 13.2 9.0 8.3 10.7 8.4 7.6 6.9 6.2 5.5 2.8

3 6 9 12 15 30 60 90 120 150

Sales Operating result

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SLIDE 15

Demand for pulp remained strong and prices at a good level

  • Increase in sales prices and increased pulp delivery

volumes as a result of the bioproduct mill improved sales and operating result for January–September

  • Market price of long-fibre and short-fibre pulp

increased by 34% and 33%, respectively, in January–September compared to corresponding period last year

  • Delivery volumes of sawn timber decreased 11%

and market prices increased by 11% in January– September

  • Bioproduct mill in Äänekoski reached its full

production capacity in August

  • Prefeasibility study on renewal of Kemi pulp mill

progressed as planned

8.11.2018 Metsä Group 15

Sales and comparable operating result

EUR million Metsä Fibre – Pulp and Sawn Timber

409 423 389 416 422 427 475 552 601 629 609

61 53 46 54 55 71 68 126 145 165 187

40 80 120 160 200 240 280 100 200 300 400 500 600 700

Sales Operating result

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SLIDE 16

8.11.2018 Metsä Group 16

Price of pulp (PIX) 2010–Q3/2018

Metsä Fibre – Pulp and Sawn Timber

400 600 800 1000 1200 1400 400 600 800 1000 1200 1400 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17 ´18 Hardwood/EUR Pulpwood/EUR Hardwood/USD Pulpwood/USD

USD EUR

Source: Foex

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SLIDE 17

Good development also in paperboard prices and volumes

  • The sales and comparable operating result improved

due to the higher prices and delivery volumes of paperboard and pulp

  • Metsä Fibre’s increased pulp production and delivery

volumes had a clearly positive effect on result

  • The operating result also improved due to mills’ im-

proved cost-efficiencies and better sales mix

  • Planned maintenance shutdowns took place at the

Kemi and Husum mills during the third quarter

  • The result was burdened by exceptional weather

conditions, higher road transport costs in the United States and cost inflation

  • Exchange rate fluctuations including hedges had a

negative effect of EUR 47 million on the operating result compared to1–9/2017

8.11.2018 Metsä Group 17

Sales and comparable operating result

EUR million Metsä Board – Paperboard Industry

436 423 440 422 445 474 479 451 492 519 475

35 36 34 33 45 44 50 54 69 59 64

20 40 60 80 100 120 100 200 300 400 500 600

Sales Operating result

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SLIDE 18

8.11.2018 Metsä Group 18

600 700 800 900 1000 1100 1200 2011 2012 2013 2014 2015 2016 2017 2018

Folding boxboard White-top kraftliner

Sources: RISI, Inc. & FOEX Indexes Ltd

Prices of folding boxboard and white-top kraftliner in Europe 2011–Q3/2018

EUR/tonne

Metsä Board – Paperboard Industry

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SLIDE 19

Tissue and Cooking Papers’ production is being developed

  • Metsä Tissue’s sales growth was primarily due to

increased sales volumes

  • The operating result was weakened by the higher

pulp price and weakening of the Norwegian krone, Swedish krona and UK pound

  • A new consumer products converting line is being

built at the Žilina mill in Slovakia

  • A new away-from-home converting line is under

construction at the Raubach mill in Germany

  • The modernisation of the baking paper machine in

Düren, Germany, continues

  • Esa Kaikkonen was appointed CEO of Metsä

Tissue in September

8.11.2018 Metsä Group 19

Sales and comparable operating result

EUR million Metsä Tissue – Tissue and Cooking Papers

246 249 247 249 252 251 250 261 259 256 254

13.5 31.2 15.8 20.6 17.6 16.3 16.8 23.3 12.3 11.5 6.4

5 10 15 20 25 30 50 100 150 200 250 300

Sales Operating result

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SLIDE 20
  • Demand for wood focuses on regeneration and thinning felling that

can be harvested in the summer and for energy wood primarily on crown wood

  • Demand for wood products is expected to remain good, which

improves order book levels, particularly for plywood products. The construction market is supporting demand for Kerto LVL. In the UK, the uncertainty caused by the Brexit negotiations will be reflected in the demand outlook, particularly in the distributor segment

  • Pulp and sawn timber markets are expected to remain stable in the

last quarter of the year

  • Growth in demand for paperboard is expected to continue and the

market prices in local currencies are expected to remain mainly stable or to rise slightly. Delivery volumes in the fourth quarter are expected to remain stable or decline slightly seasonally

  • The demand in the tissue and cooking paper markets is expected

to continue stable in all market areas

8.11.2018 Metsä Group 20

Summary

Outlook

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SLIDE 21
  • Metsä Group’s comparable operating

result is in the last quarter of 2018 expected to be roughly at the same level as in the third quarter of 2018.

8.11.2018 Metsä Group 21

Near-term outlook

Summary

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SLIDE 22