Metsä Board. Half Year Report 1 6/2017 Presentation material

Transcription

1 Metsä Board Half Year Report 1 6/217 Presentation material

2 Q2 217 in summary Good demand for high-quality paperboards continued Stable or rising market price levels Metsä Board s paperboard deliveries up by 11% from Q1 217 The average price of folding boxboard was burdened by Husum s geographic sales mix Steady working capital despite the strong sales growth New extrusion coating line in Husum started up 2

3 All-time high in paperboard deliveries 5 Folding boxboard White fresh fibre linerboard 1, tonnes Growth in total paperboard deliveries: +11% Q2/17 vs. Q1/17 +18% H1/17 vs. H1/16 +12% FY16 vs. FY15 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q FY 215: 1.4m tonnes FY 216: 1.6m tonnes

4 Sales and operating result Sales EUR million Comparable operating result EUR million and % EUR million EUR million , % 8,5 % 7,7 % 7,8 % 1,2 % 9,2 % 12% 1% 8% 6% 4% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 2% % H1 216: EUR 859 million +7% H1 217: EUR 919 million H1 216: EUR 71 million +25% H1 217: EUR 89 million 4

5 Impacts on operating result Q2 217 vs. Q1 217 and H1 217 vs. H Comparable operating result, EUR million Q2 217 vs. Q EBIT-% 1.2 EBIT-% 9.2 Q1 217 Q Comparable operating result, EUR million H1 217 vs. H EBIT-% 8.2 EBIT-% 9.7 H1 216 H Growing delivery volumes in paperboard and positive development in market pulp - Geographic sales mix of Husum s FBB and product mix of Husum s white linerboards, maintenance at Finnish mills + Positive development at Finnish paperboard mills and in market pulp, positive impact from FX rates including hedges - Increased latex price 5 WTKL = white-top kraftliner FBB = folding boxboard

6 Return on capital employed, % 18% 16% 14% 12% Target >12% 1% 8% Q2/17: 1.3% 6% 4% 2% % Q1/13 Q2/13 Q3/13 Q4/13 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 Comparable ROCE, % 6

7 Cash flows clearly positive Working capital remained nearly unchanged despite the strong operational growth in Q EUR million Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 7 Cash flow from operations, quarterly Cash flow from operations, rolling 12 months Free cash flow, quarterly Free cash flow, rolling 12 months

8 Stable balance sheet 6 Net gearing, % 44% 54% 49% 44% 44% 45%,6,5 6 Interest-bearing net debt / comparable EBITDA 2, 2,1 2,1 2, 3, Financial target: <2.5x 2, 1,9 2, 4 32%,4,3 4 1,2 2,2 2 1,, /16 9/16 12/16 3/17 6/ /16 9/16 12/16 3/17 6/17, Interest-bearing net debt, EUR million Net gearing, % Interest-bearing net debt, EUR million Interest-bearing net debt / EBITDA (rolling 12-month) 8

9 Updated financial targets Financial target Change/update Target level Actual 216 Actual 215 Actual 214 Comparable ROCE Unchanged >12% 8.1% 11.3% 9.1% IB net debt / comparable EBITDA New target <2.5x 2.x 1.2x 1.8x Growth in paperboard deliveries Dividend payout New target New target level Annual growth in paperboard deliveries to exceed relevant market growth * 12% 13% 1% At least 5% of the result for the period 76% 44% 57% * Estimated average market growth globally in fresh fibre paperboards is 3 4%/a 9

10 Update on Husum s folding boxboard Capacity utilisation rate during H1 217 was 7% In June, both production and deliveries were over 85% of monthly capacity The target of having the capacity in full use by end of 218 is intact Production costs per tonne still higher compared to Finnish mills Geographic sales mix burdened the average price Deliveries of own PE-coated paperboards to customers have started 1

11 Potential to improve profitability of Husum At least EUR 1 million EBIT improvement from 216 to , tonnes 216 of pulp Efficiency >95% with 219 production lost in 216 Restructuring: improvement programme FBB capacity utilisation rate normal sales price + EUR 25 million + EUR 5 million + EUR >7 million 11

12 Metsä Board approach for challenges of today Better with Less Better consumer experiences with less environmental impact 12

13 Near-term outlook Price levels in FBB are expected to be stable, several linerboard producers have announced price increases. Pulp market expected to remain in balance Metsä Board s Q3 paperboard delivery volumes are expected to stay flat compared to Q2 Focus on improving the geographic sales mix of Husum s folding boxboard and to increase the share of North American sales, in particular Start-up phase of Metsä Fibre s new bioproduct mill is expected to have only a minor negative impact on Metsä Board s result 13

14 Profit guidance Metsä Board's comparable operating result for the third quarter of 217 is expected to improve slightly compared to the second quarter of

15 Summary Good demand in high-quality paperboards is continuing Metsä Board s paperboard delivery volumes grew strongly during H1 217 The target of having the current paperboard capacity in full use by the end of 218 is intact Renewed key messages and unified product portfolio support sales growth 15

16 Appendix

17 Key financials Q2/17 Q1/17 Change Q2/17 vs. Q1/17 H1/17 H1/16 Change H1/17 vs. H1/16 Sales EUR, m % % 1,72 EBITDA* EUR, m % % 231 Operating result* EUR, m % % 138 % of sales % Result before taxes* EUR, m % % 17 Earnings per share EUR.9.1-1% %.25 ROCE* % Capex EUR, m % % 162 Cash flow from operations EUR, m % IB Net debt, at end of period EUR, m % % 464 *comparable

18 Clearly lower capex in 217 EUR million Investments in January June were EUR 31 million (H1/16: EUR 13 million) Estimated capex in 217 is EUR 65 7 million E Maintenance capex Growth capex Depreciation 18 Main growth in capex in : Husum investment programme, extrusion coating line and equity investment in Metsä Fibre s bioproduct mill

19 FX exposure and sensitivities Impact of FX rate changes including hedges Q2 217 vs. Q1 217: EUR -1.5 million H1 217 vs. H1 216: EUR 11 million Annual transaction exposure EUR 1.1 billion 35 % 5 % 2 % USD 58 % SEK GBP Other currencies FX sensitivities excluding hedges 1% strengthening of foreign currency vs. EUR will have an impact on Metsä Board s EBIT of Currency USD, $ SEK GBP, Next 12 months EUR +7 million EUR -4 million EUR +7 million 19 Hedging policy: 1% of balance sheet position and 5% of annual net FX flows

20 Debt structure and liquidity 3 June 217 Interest-bearing debt, total EUR 64 million Available liquidity, total EUR 343 million Bonds Loans from financial institutions Pension loans Finance leases and other loans Other short-term loans Cash and cash equivalents Revolving credit facility Unraised pension loans 2 Average maturity of long-term loans on 3 June 217 was 2. years.

21 Long-term debt and financial costs Maturity schedule in long-term IB debt EUR million >222 Long-term interest bearing liabilities, EUR million Committed undrawn credit facilities, EUR million Net financial costs (EUR million) and average interest rate (%) 4,6 4,2 3,8 3,3 3, H1/217 Net financial costs, EUR million Average interest rate at the end of period, % 5, 4,5 4, 3,5 3, 21

22 Market price development in folding boxboard and white-top kraftliner in Europe EUR/t Folding boxboard White-top kraftliner 22 Sources: RISI, Inc. & FOEX Indexes Ltd

23 Pulp price development (PIX) EUR Softwood, USD USD Softwood, EUR Hardwood, EUR Hardwood, USD '1 '11 '12 '13 '14 '15 '16 ' Source: Foex Indexes Ltd

24 Steadily growing dividends Metsä Board s dividend payout target is at least 5% of the result for the financial period Dividend for 216: EUR.19 per share Totalling EUR 68 million EUR,5,4,3,2,1 Corresponds to 76% of EPS Earnings per share Dividend per share 24

25 Market cap and ownership distribution Market cap and foreign owners 3 June 217 Ownership distribution 3 June 217 EUR million 2 5 % / % 18 % Metsäliitto Cooperative 22 % 42 % Domestic institutional investors Domestic private investors * Foreign owners Market cap, EUR million Share of foreign owners, % * Metsäliitto Cooperative has 61% of voting rights 25 In Q2 217, a total of 8,969 Metsä Board A shares were converted to B shares. After the conversion, the amount of A-shares is 35,886,682 and the amount of B-shares 319,626,64.

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