Metsä Board. Investor presentation January December 2018

Transcription

1 Metsä Board January December 2018

2 Contents Metsä Board in brief 3 Operating environment and demand drivers 15 Main contributors in Metsä Board s profitability 23 Results: January September Balance sheet and financing 39 Sustainability and product safety 43 Sustainability guides our R&D work 55 Owners and management 66 Contact information 70 2

3 Investment highlights of Metsä Board We are pure-play paperboard company focused on premium fresh fibre paperboards Global trends, e.g. sustainability and urbanization drive the demand for ecological and lightweight packaging We have a strong market position and good control of wood raw material and self-sufficiency in pulp Market pulp 18 % White kraftlainer 27 % Sales split by product FY 2017: EUR 1,849m Folding boxboard 55 % Americas 23 % Sales split by market area APAC 7 % FY 2017: EUR 1,849m EMEA 70 % 3 Our total paperboard capacity is 2m tonnes/year of which 1/3 are white kraftliners and 2/3 folding boxboard

4 Our light, pure and safe paperboards have various end-uses Folding boxboards Packaging solutions for consumer goods Food service boards Solutions for food service White kraftliners Retail-ready tray and point-of-sale solutions

5 and we have a broad customer base BRAND OWNERS CONVERTERS MERCHANTS CORRUGATED BOX MANUFACTURERS FOLDING BOXBOARD WHITE KRAFTLINERS 5

6 Our fresh fibre paperboards offer solutions for global trends Globalisation & urbanisation We offer recyclable products that are ideal for the circular economy Sustainability We use only renewable fresh fibres from sustainably managed northern forests Food safety We have good control of raw materials, which guarantees purity and safety in food contact uses E-commerce Our paperboards offer a strong promotion and branding experience

7 We have a leading position in Europe Folding boxboard in Europe Total capacity 3.8m tonnes Others #5 #4 #3 Metsä Board #1 White kraftliner in Europe Total capacity 2.1m tonnes 35% 32% #4 #2 #5 Others #3 #2 Metsä Board #1 Our regional sales split: 70% EMEA 23% Americas 7% APAC In APAC we focus on highquality FBB segment We are the largest European importer of FBB to US We are #1 in coated white kraftliners globally 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 104,000 Finnish forest owners METSÄ FOREST METSÄ FIBRE METSÄ WOOD METSÄ BOARD METSÄ TISSUE Wood supply and forest services Pulp and sawn timber Wood products Paperboard Tissue and cooking papers METSÄ BOARD OWNS 24.9% 8 Through Metsä Fibre s ownership Metsä Board s annual net pulp balance is 550,000 tonnes long in 2018

9 Our production is close to our main raw material Total paperboard capacity: Folding boxboard (FBB): 1.33m t/a White kraftliner (WKL): 690,000 t/a Our net balance in pulp in 2018, including the 24.9% ownership in Metsä Fibre, is 550,000 t/a Kemi 420,000 t/a WKL 620,000 t/a Pulp* Äänekoski 240,000 t/a FBB 1.3 million t/a Pulp* Husum, SWE 400,000 t/a FBB 270,000 t/a WKL 730,000 t/a Pulp Simpele 290,000 t/a FBB Kaskinen 370,000 t/a BCTMP Joutseno 330,000 t/a BCTMP 690,000 t/a Pulp Kyro 190,000 t/a FBB Wood sourced from Finland, Sweden, Baltics and Russia. Tako 210,000 t/a FBB 9 *Metsä Fibre mill

10 Our focused strategy has increased shareholder value Enterprise value, EUR million Dividend, EUR and payout ratio, % 0,25 0,20 0,15 0,10 0,05 CAGR in dividend +30% in % 80% 60% 40% 20% /18 0, % Market capitalization, EUR million Dividend, EUR Dividend/EPS, % Net debt, EUR million 10

11 Our financial targets aim for profitable growth and a strong balance sheet Annual growth in total paperboard deliveries, % Comparable ROCE, % Net debt / comparable EBITDA Target is to exceed relevant market growth, 3%/a 10% 13% 12% 15% 6% Target >12% 9,1 11,3 8,1 11,2 14,1 1,8 1,2 2,0 1,2 Target <2.5 1, LTM LTM / Dividend policy We aim to distribute at least 50% of our result for the financial period in annual dividends

12 1,000 tonnes We have been growing at a CAGR of 12% well above average market growth Metsä Board s annual paperboard deliveries Annual global demand growth for folding boxboard and white kraftliner is estimated to be 3% LTM White kraftliner Folding boxboard Source: Metsä Board s own research 12

13 EUR million driven by capacity increases Capital expenditure and depreciation NEXT STEPS Focus on profitability To keep ROCE above 12% and To generate the highest possible shareholder value E Maintenance capex Growth capex Depreciation The best returns can be achieved from medium-sized investments to increase the capacity of our current production lines In medium term, this means moderate growth and a strong focus on profitability 13 Growth capex: Debottlenecking in Simpele, Äänekoski and Kyro mills: total 150,000 t/a of FBB New folding boxboard production line in Husum: 400,000 t/a of FBB and linerboard production line conversion: 270,000 t/a of WKL 2017 New extrusion coating line in Husum: 100,000 t/a PE coating capacity

14 Our cash flow generation is back on track after the heavy investment years of Free cash flow in EUR million and % of EBITDA Our free cash flow has improved due to Improved profitability Decreased capex Good working capital discipline Capital allocation in the near future Dividend: supported by strong performance Capital structure: deleveraging continues to levels below 1.0x CAPEX: return-based allocation (ROCE above 12%) EUR million % LTM FCF, EUR million FCF/EBITDA,% Comparable EBITDA (LTM) EUR 341 million

15 Operating environment and demand drivers

16 Paperboard is the packaging material of the future Growing by 3% per year USD bn The total packaging market is USD 850 billion Average annual growth rate of paperboard packaging 16 Metal Plastic Glass 7% 13% 34% 36% USD 300 bn 10% Other fibrebased Board and Paper % per year F Source: Smithers Pira

17 We have good growth opportunities in premium paperboards FSB 36% FSB FBB Other fresh fibre grades Recycled grades Americas EMEA FBB APAC 28% CWKL WKL White testliner 77% FSB FBB Other fresh fibre grades Recycled grades 41% CWKL WKL White testliner Cartonboard White linerboard Cartonboard White linerboard Cartonboard White linerboard 38% Other fresh fibre grades Recycled grades WKL White testliner Annual global demand growth for FBB, FSB and WKL is estimated to be 3% Total annual demand: 10 million tonnes 3 million tonnes 10 million tonnes 5 million tonnes 22 million tonnes 3 million tonnes 17 FSB = food service board, FBB = folding boxboard, SBS = other fresh fibre grades, CUK, WLC = recycled grades WKL = uncoated white kraftliner, CWKL=coated white kraftliner Source: Metsä Board research based on several sources, e.g. CEPI Cartonboard and Containerboard, RISI

18 We sell globally, but have a regional approach The Americas is the biggest growth area AMERICAS SHARE OF TOTAL PAPERBOARD DELIVERIES IN 1 9/ % EMEA SHARE OF TOTAL PAPERBOARD DELIVERIES IN 1 9/ % APAC SHARE OF TOTAL PAPERBOARD DELIVERIES IN 1 9/2018 7% Demand drivers: Strong consumer confidence in the US, private consumption recovering in Latin America Emerging environmental considerations Trend for lightweight packaging but limited local capacity in FBB Demand drivers: Stronger consumer confidence Acceleration in environmental commitments and regulations Stricter food safety requirements Demand drivers: Growing upper and middle classes, and increased purchasing power More brand-aware consumers Continued shift to modern retail and mobile commerce 18

19 Rapidly growing concern about non-renewable packaging materials is increasing demand for fresh fibre paperboards

20 Sustainability is on everybody s agenda Growing consumer awareness: Origin and transparency of materials, renewability, resource efficiency and recylability Brand owners are committed to reducing their carbon footprints: Lighter packaging reduces CO 2 emissions across the value chain We want low-carbon to become the new normal, so we re taking action to reduce GHG emissions throughout our value chain. 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 Unilever website 20

21 Food safety is growing its importance Health and safety aspects are strongly emerging in food packaging Purity and safety have become critical factors, also for consumers Growing worry about e.g. fluorochemicals or mineral oil migration from recycled packaging into foodstuffs set stricter demands on packaging materials Packaging s strength and durability are non-negotiables to reduce food waste 21

22 Branding and personalisation are growing their importance in E-commerce Increasing quality demands drive the demand of white kraftliners Functionality, durability and consumer experience are the key words Personalisation of boxes is supported by advanced technology in digital printing The value of E-commerce is expected to grow by 20% per year on average and its share of the retail trade is estimated to grow from 10% to 18% in Sources: emarketer, Smithers Pira

23 Main contributors in Metsä Board s profitability

24 Our top priority is to secure a continuously healthy price level Strong demand and limited supply in fresh fibre paperboards have led to increased price levels Our latest price increase announcements: FBB: Europe EUR 80/t, valid 11/2018, Americas USD 50/t, valid 9/2018 WKL: Europe EUR 50/t, valid 10/2018 Market prices have increased in Europe since 2017 /tonne Folding boxboard White-top kraftliner 24

25 Market pulp price is positively contributing to our result Pulp prices (PIX) in Europe have risen by one third in compared to last year In 2018, Metsä Board s net pulp balance is roughly 550,000 tonnes long, including our share in Metsä Fibre Estimated net balance for 2019 is approximately 600,000 tonnes long 24.9% of Metsä Fibre s net result (post-tax) is consolidated in Metsä Board s EBITDA USD USD Source: Foex Indexes Ltd 25

26 We see cost inflation slowing down in the near future Cost component Near-term outlook Metsä Board s cost split in 2017 total EUR1.6 billion* Wood Logistics Prices in Finland and Sweden are expected to remain stable. In the Baltics, the price level will depend on the demand in export markets (e.g. Sweden) In line with general cost inflation Other fixed 15 % Wood 26 % Chemicals In line with or below general cost inflation Personnel 14 % Energy Personnel Other fixed Stabilisation following the oil and electricity price hikes in 2018 Approximately +2% y-on-y, mainly based on collective agreements In line with or below general cost inflation Other variables 3 % Energy 12 % Chemicals, pigments and fillers 14 % Logistics 16 % 26 * incl. the share of Metsä Fibre s costs

27 We estimate that profit improvement from Husum is slightly higher than our previous estimates Estimated profitability improvement in 2019 vs Original estimate in 2019 vs. 2016: EUR 100 million Achieved in 2018 vs. 2016: EUR 90 million New estimate in 2019 vs. 2016: EUR million 27 Our estimate is based on Changed market environment since 2017 Positive from market pulp prices and SEK/EUR Negative from wood costs and USD/EUR Estimated potential in 2019 through paperboard pricing of EUR million Gradual improvement potential also after 2019 Initial estimate communicated in 2017

28 Our main profit components and sensitivities Component Change Impact on EBIT Folding boxboard White kraftliners Price +/- 10% > EUR 100 million Price +/- 10% > EUR 50 million FX USD/EUR +/- 10% EUR 65 million SEK/EUR +/- 10% EUR 40 million Annual FX net transaction exposure is approximately EUR1.1 bn, of which 55% USD, 36% SEK and 7% GBP Pulp Pix price of SW/HW per tonne +/- 10% EUR 25 million Wood Price per m 3 in Finnish mills Price per m 3 in Husum +/-10% EUR 30 million* +/-10% EUR 20 million Metsä Board is sourcing approximately 5.6 million m 3 wood in 2018, of which 35% from Sweden, 35% Finland, 20% Baltics and 10% Russia. Including the 24.9% share from Metsä Fibre, the total sourcing is 10.7 million m 3 28 * incl. ownership in Metsä Fibre

29 January September 2018 Interim Report

30 Key financials Q3/18 Q2/18 Change Q3/18 vs. Q2/18 1 9/18 1 9/17 Change 1 9/18 vs 1 9/17 Sales EUR, m % % 1,849 EBITDA* EUR, m % % 289 Operating result* EUR, m % % 194 FY 2017 % of sales % Result before taxes* EUR, m % % 157 Earnings per share EUR % % 0.42 ROCE* % Capex EUR, m % % 65 Cash flow from operations EUR, m % % 236 Net debt, at end of period EUR, m % % 358 *comparable /2018

31 Performance in Q Our profitability improved due to higher paperboard prices and strong pulp market Our paperboard delivery volumes were down on record-high levels in Q2 Wood costs remained high but steady We had planned maintenance shutdowns at Kemi integrated mill and partly at Husum integrated mill 31

32 1,000 tonnes Our total paperboard delivery volumes decreased in Q3 from the high levels of H White kraftliner Q Q Q Q Q Q Q Q Q Q Q /2017 1,375k tonnes Folding boxboard +2% /2018 1,405k tonnes Annual global demand growth for folding boxboard and white kraftliners is estimated to be 3% Source: Metsä Board s own research /2016 1,568k tonnes +15% 1 12/2017 1,802k tonnes

33 Year-to-date 2018 delivery volumes grew by 2% compared to last year Folding boxboard YTD 2018 (1 9/17) tonnes White kraftliner YTD 2018 (1 9/17) tonnes Americas 192k (179) APAC 92k (88) 10% 21% 69% EMEA 637k (601) Americas 134k (145) 28% 72% EMEA 344k (350) 33 Total FBB deliveries 922k tonnes (868) Total WKL deliveries 481k (506)

34 EUR million EUR million Our margins improved due to higher prices Sales EUR million Comparable operating result EUR million and % of sales ,2 % 9,2 % 10,5 % 12,0 % 14,0 % 11,4 % 13,4 % 16% 12% % Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 4% 0% 1 9/2017: EUR 1,397 million 1 9/2018: EUR 1,486 million 1 9/2017: EUR 139 million 1 9/2018: EUR 192 million /2017: EUR 1,849 million 1 12/2017: EUR 194 million (10.5% of sales)

35 ROCE is above its target level of 12% 12 month rolling ROCE was 14.1% 16% 14% 12% Target: 12% 10% 8% 6% 4% 2% 35 0% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Comparable ROCE-%, Quarterly

36 FX: Headwind from USD in Q3 FX impacted Q3 result negatively: EUR -4 million compared to Q2, mainly caused by USD/EUR YTD 2018 impact EUR -47 million compared to corresponding period last year Stronger USD and weaker SEK against EUR will support results from Q4 onwards Annual transaction exposure total EUR 1.1 billion 8 % 2 % USD 54 % SEK FX sensitivities excluding hedges 10% strengthening of foreign currency vs. EUR will have an impact on Metsä Board s EBIT of Currency USD, $ Next 12 months EUR +63 million 36 % GBP SEK EUR -41 million Other currencies GBP, EUR +9 million 36

37 EUR million EUR million Our cash flow generation is back on track after the heavy investment years of Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/ Cash flow from operations, quarterly Cash flow from operations, rolling 12 months Free cash flow, quarterly Free cash flow, rolling 12 months 37 Free cash flow = Cash flow from operations - investments

38 Near-term outlook Market prices are expected to be stable or rise slightly Pulp market is expected to remain strong FX will have a positive impact on Q4 result Metsä Board s paperboard delivery volumes in Q4 will remain flat or decline slightly compared to Q3 due to seasonality Cost inflation has slowed down, no significant changes to production costs expected Net impact of energy costs and sale of emission rights will have a positive impact in Q4 compared to Q3 Part of Husum shutdown took place at start of October Comparable operating result in Q is expected to improve compared to the Q

39 Balance sheet and financing

40 EUR million We have a strong financial position leverage at 1.0x ,1 2,1 2,0 1,9 2,0 1,7 Net debt / EBITDA target level: <2.5 3,0 2,5 2, ,2 1,1 1,2 1,0 1,5 1, /2016 9/ /2016 3/2017 6/2017 9/ /2017 3/2018 6/2018 9/2018 0,5 0,0 40 Net debt, EUR million Net debt to comparable EBITDA (12 months)

41 We have a balanced debt portfolio Maturity profile of interest-bearing debt, total EUR 469 million 30 September 2018 EUR million Metsä Board s credit ratings Rating agency Standard & Poor s Moody s Rating and outlook BBBstable Ba1 positive Latest update 02/ / Notes annual coupon is 2.75% Bonds Loans from financial institutions Pension loans Other loans In addition company has undrawn credit facility EUR 150 million, maturing in 03/

42 Net financial costs January September 2018 EUR million % 50 5,0 40 4,2 4,5 3,8 30 4,0 3,3 3,3 3,3 3,5 20 3,0 Net financial costs (including foreign exchange differences) in 1 9/2018 were EUR 18 million (1 9/17: EUR 29 million) Average interest rate at the end of review period was 3.3% ,5 2,0 Net financial costs, EUR million Average interest rate at the end of period, % 42

43 Sustainability and food safety

44 Fresh fibre paperboards offer solutions to major challenges Replacing fossilbased 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

45 Finland the largest forest cover in Europe The area of Finland 100+ MILLION M 3 Annual growth of Finnish forests is over 100 million m 3 more than ever Forests grow more than they are used, annual harvesting 71 million m 3 (2017) 5% 10% 10% Cities, villages and roads Fields and agricultural use Lakes and rivers Four seedlings are planted for each harvested tree 75% Forest Over 20% of the Finnish export comes from forest-based products 45

46 Wood is the main raw material for Metsä Board Metsä Board sources its wood mainly from Finland and Sweden (75 %) All wood used is 100% traceable and comes from sustainably managed forest sources ensuring the biodiversity and recreational use of forests 80% of wood sourced is certified (remaining 20 % from controlled forest sources) 46

47 Metsä Board has decreased its water use by 17% since 2010 Metsä Board uses only surface water in its processes Water is been recirculated in processes several times 99% of the water used is returned back to the close-by waterways after thorough purification

48 Metsä Board Tako is located in the middle of the city Tako mill follows very tight environmental and noise permits The most efficient mill in water use of all Metsä Board s mills Efficiently planned logistics chain City of Tampere The most populous inland city of the Nordic countries Over inhabitants

49 Lighter packaging reduces CO 2 emissions across the value chain Our fossil CO 2 emissions per product tonne have reduced by almost 50% since 2009 Less energy, water and raw material consumed Less waste generated Less transport weight

50 50 Our energy efficiency has improved by over 10% during % of primary energy we use is fossil free After OL3 1) starts up, we will be nearly self-sufficient in electricity in Finland Including the electricity used in Husum mill, self-sufficiency will be nearly 80% Metsä Board s shareholding in PVO 2) is 3.2% Fair value as per 30 September 2018 was EUR 270 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 46% share of purchased energy, 8% is from Metsä Fibre Nuclear power 28 % Purchased electricity 46 % Primary energy used in 2017 (total 12.0 TWh) Gas 8 % Others 12 % Electricity sourced in 2017 (total 2.4 TWh) Outsourced generation 3 % 3) Wood-based 52 % Own generation 22 % Through PVO shareholding 29 %

51 We are committed to high performance on sustainability RAW MATERIALS AND SUPPLY CHAIN Share of certified wood: TARGET >80% PERFORMANCE % Ensure sustainability of the main logistics flows: TARGET 100% PERFORMANCE % RESOURCE EFFICIENCY AND ENVIRONMENTAL IMPACTS Fossil CO 2 emissions per product tonne : TARGET -30% PERFORMANCE % Energy efficiency improvement : TARGET 12% PERFORMANCE % Process water use per product tonne : TARGET -17% PERFORMANCE % STAKEHOLDERS AND SOCIAL IMPACTS Coverage of Code of Conduct training: TARGET 100% PERFORMANCE % Lost-time accidents frequency annually (LTA1: 6.4): TARGET -10% Sickness absenteeism: TARGET <3% PERFORMANCE % PERFORMANCE % External recognitions and commitments in sustainability: 51 A rating of AAA in the MSCI ESG Ratings assessment in June Metsä Board was awarded Prime status in Oekom corporate responsibility rating in May 2018 Leader in Sustainalytics assessment in May 2018.

52 Increased regulation to ensure product safety EU Commission Announced plans to regulate printed food contact materials (FCMs) on EU level 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 52

53 Metsä Board has good control over raw materials from forests to pulp and board production This ensures a uniquely safe and unbroken product chain

54 Packaging should not harm food Metsä Board s fresh fibre paperboards do not change the taste, smell, colour or composition of the food....and barriers protect the board from foods like beverages Food packaging made from recycled fibres includes mineral oil migration risk.... and food needs to be protected from board 54

55 Packaging made from recycled material Recycled fibre packaging is suitable for many goods We promote circular economy providing vital material to the recycling loop Recycling would end in few months without fresh fibre inflow In food packaging mineral oil migration pose a health hazard in recycled fibre Global restrictions in the use of recycled fibres in direct food contact

56 Sustainability guides our R&D work

57 Our key product development focus areas LIGHTWEIGHTING Improved BCTMP Microfibrillated cellulose (MFC) Strength additives BARRIER BOARDS Dispersion barriers Bio-based raw materials 57

58 We achieve high bending stiffness from a strong outer layers and a thick and light inner layer Top coating Bleached chemical pulp High yield pulp (BCTMP) or groundwood pulp Bleached chemical pulp 58

59 PROMOTION Brightness The role of packaging is to promote the brand and protect the product in a cost-effective way Solid bleached board (SBB) Metsä Board s folding boxboard Folding boxboard (FBB) Coated unbleached kraft (CUK) 59 White lined chipboard (WLC) PROTECTION Stiffness

60 High-yield pulp makes the difference between folding boxboard and other grades Light weight better yield and sustainability High strength and bending stiffness secure protection High brightness and smoothness excellent printability Consistent quality improved production efficiency

61 and leave more trees standing SBS (100% chemical pulp) 5 m 3 of wood per tonne of pulp = Metsä Board FBB (up to 70% BCTMP, 30% chemical pulp ) = 3.4 m 3 of wood per tonne of pulp

62 Lighter-weight paperboards: Better with Less The weights equal to a print job of sheets on a standard size printing press SBB Solid bleached board Average FBB Folding boxboard Metsä Board lightweight paperboard WLC White lined chipboard 62

63 Metsä Board has launched an innovative eco-barrier paperboard Made from bio-based, recyclable and biodegradable fresh fibres Developed especially for food service use with short food contact time and when light grease resistance is sufficient We constantly develop other barrier solutions, and investigate the utilization of dispersion and biobased coatings, and their commercial potential 63

64 Barriers preserve packed products and the package Barriers reducing waste have a huge positive total effect on environment Barriers are inbuild in many competing materials e.g. plastics, metals but those have other issues Often needed are water, moisture and grease barriers and they are in the focus of Metsä Board s development Light, O 2, H 2 O Influence from environment Light, O 2, H 2 O, Aromas/Odor Packed product Monomers, additives, oxidation products CO 2, H 2 O, N 2, Aromas/Flavor Barriers protect product and/or packaging H 2 O, Fats, CO 2, Acids, Alcohols, Aromas Packaging material 64

65 RENEWABLE Getting familiar with terminology: Barrier boards types BIODEGRADABLE Biobased, biodegradable coating, i.e. starch, PLA etc. Bioplastic coating, i.e. green PE Oil-based, biodegradable coating Latex based dispersion coating PE extrusion coating NON-RENEWABLE NON-BIODEGRADABLE 65

66 Owners and management

67 Market cap and ownership distribution Metsä Board shares (METSB, METSA) are listed on Nasdaq Helsinki Market cap and foreign owners 30 September 2018 Ownership distribution 30 September 2018 EUR million % % 17 % 41 % Metsäliitto Cooperative Domestic institutional investors Domestic private investors /2018 Market cap, EUR million 0 19 % Foreign owners Share of foreign owners, % 67

68 Metsä Board Corporate Management Team 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: 51,500 Ari Kiviranta SVP, Development Member of CMT since 2014 MG employee since 1993 Share ownership: 40,000 Harri Pihlajaniemi SVP, Production Member of CMT since 2017 MG employee in and since 2017 Share ownership: no ownership Susanna Tainio SVP, HR Member of CMT since 2015 MG employee since 2011 Share ownership: 31, Share ownerships are B-shares. MG = Metsä Group

69 Metsä Board is part of Metsä Group (Metsäliitto Cooperative) METSÄLIITTO COOPERATIVE Owned by 104,000 Finnish forest owners METSÄ FOREST Wood Supply and Forest Services METSÄ TISSUE Tissue and cooking papers METSÄ WOOD Wood Products METSÄ BOARD Paperboard METSÄ FIBRE Pulp and Sawn Timber Sales 2017: EUR 1.6 billion Personnel: 850 Sales 2017: EUR 1.0 billion Personnel: 2,800 Sales 2017: EUR 0.5 billion Personnel: 1,400 Sales 2017: EUR 1.8 billion Personnel: 2,350 Sales 2017: EUR 1.9 billion Personnel: 1,200 Metsäliitto Cooperative holding 100% Metsäliitto Cooperative holding 42% of shares, 61% of votes Metsäliitto Cooperative holding 50.1%, Itochu Corporation 25.0% Metsä Board 24.9% 69 Metsä Board is listed on the Nasdaq Helsinki

70 Contact information Katri Sundström Vice President, Investor relations Tel Metsä Board Corporation P.O. Box Metsä, Finland 70

71 Disclaimer 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 made. By their nature, forward-looking statements are subject to assumptions, risks and uncertainties. Although we 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 or commitment or decision to invest in Metsä Board securities whatsoever. Potential investors are instructed to acquaint 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. 71

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