Metsä Board. Interim Report 1 9/2017 Presentation material

Transcription

1 Metsä Board Interim Report 1 9/217 Presentation material

2 January September 217: Increasing sales and improved operating result EUR million Sales EUR million Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q : EUR 1,299 million +8% : EUR 1,397 million EUR million Comparable operating result EUR million and % , % 8,5 % 7,7 % 7,8 % 1,2 % 9,2 % 1,5 % Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q : EUR 15 million +33% : EUR 139 million 12% 1% 8% 6% 4% 2% % 2

3 Strong growth in paperboard deliveries 5 +17% Q1-Q3 217 Q1-Q , tonnes White fresh fibre linerboard Folding boxboard Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 FY 215: 1,44 tonnes FY 216: 1,569 tonnes Q1-Q3 217: 1,375 tonnes (Q1-Q3/16: 1,181) 3

4 Q3 217 in summary (vs. Q2 217) Higher production volumes Increased average price of folding boxboard Paperboard deliveries roughly at the level of Q2 Cash flow from operations strong due to improved result and good working capital performance Stable or rising market price levels in local currencies Metsä Board announced price increases in Europe in folding boxboard and white linerboard Metsä Fibre s new bioproduct mill started as planned in August 4

5 FX exposure and sensitivities FX rate changes including hedges had a small positive impact in Q3/17 vs. Q2/17 The positive impact from hedging will start to dilute towards the end of the year Annual sensitivities have changed due to the changes in FX rates Annual transaction exposure EUR 1.1 billion 34 % 6 % 2 % USD 58 % SEK GBP FX sensitivities excluding hedges 1% strengthening of foreign currency vs. EUR will have an impact on Metsä Board s EBIT of Currency USD, $ SEK Next 12 months EUR +64 million EUR -38 million Other currencies GBP, EUR +7 million 5 Hedging policy: 1% of balance sheet position and 5% of annual net FX flows

6 Return on capital employed, % 18% 16% 14% 12% Target >12% 1% 8% Q3/17: 11.5% 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 Q3/17 Comparable ROCE, % 6

7 Update on Husum s folding boxboard Capacity utilisation rate in July September 217 was 76% FY 217 estimate is slightly below 75% Target is to have capacity in full use by the end of 218 Annual maintenance shutdown in October Improved average price of folding boxboard Production costs per tonne are still higher than at the Finnish mills Metsä Board s FBB/FSB deliveries to Americas in 1 9/217 up by 65% compared to 1 9/216 Potential to improve profitability in Husum by EUR 1 million is intact 7

8 Cash flows clearly positive Strong cash flow in Q3 due to improved result and good working capital performance EUR million Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Cash flow from operations, quarterly Free cash flow, quarterly Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months Free cash flow = Net cash flow from operating activities + Investments in intangible and tangible assets + Acquisition of associate company shares + Acquisition of other shares 8

9 Stable balance sheet 6 4 Net gearing, % 32% 44% 49% 44% 44% 45% 39%,6,5,4,3 6 4 Interest-bearing net debt / comparable EBITDA 1,2 2, 2,1 2, 1,9 3, Financial target: <2.5x 2, 2, 1,7 2,2 2 1,, /16 12/16 3/17 6/17 9/ /16 12/16 3/17 6/17 9/17, Interest-bearing net debt, EUR million Net gearing, % Interest-bearing net debt, EUR million Interest-bearing net debt / EBITDA (rolling 12-month) 9

10 Debt maturity lengthened due to new 1-year bond Total interest-bearing debt on 3 September was EUR 651 million In September, Metsä Board issued new 1-year EUR 25 million bond with 2.75% annual coupon. At the same time, the company made a tender offer for the old EUR 225 million bond due in 219 (EUR 158m tendered) In August, Moody s upgraded Metsä Board s credit rating from Ba2 to Ba1 Metsä Board s credit ratings Rating agency Standard & Poor s Rating and outlook Last update BB+ (positive) 2/217 Moody s Ba1 (stable) 8/217 Upgrade from Ba2 25 Interest-bearing debt maturity profile EUR million Bonds Loans from financial institutions Pension loans Other loans

11 Metsä Board s growth clearly exceeds average market growth Metsä Board s annual paperboard deliveries 1, tonnes LTM* 218 target Fresh fibre linerboard Folding boxboard Annual global demand growth for folding boxboard and white kraftliners is estimated to be 3 4% Source: RISI, CEPI, Pöyry and trade statistics among others 11 *last twelve months

12 Metsä Board was again rated among the world s best performing companies by CDP Postitions on the CDP Climate A and Water A Lists Leadership status in CDP Forest programme 12 CDP is a non-profit organization providing a global system to measure, disclose, manage and share vital environmental information.

13 Metsä Fibre s new bioproduct mill in Äänekoski has started Start-up as scheduled, costs in budget and production above the ramp-up curve Total investment EUR 1.2 billion Annual pulp capacity 1.3 million tonnes Metsä Board invested EUR 24.9 million Metsä Board s annual pulp balance grows by 2, tonnes* * According to Metsä Board s 24.9% ownership of Metsä Fibre

14 Near-term outlook Metsä Board s Q4 paperboard delivery volumes are expected to decline due to seasonality Pulp market is expected to remain in balance. Metsä Fibre s new bioproduct mill is expected to have positive impact on Metsä Board s Q4 result Annual maintenance shutdown in Husum mill will have negative impact on profitability Positive hedging impact from USD will dilute towards the year-end Impacts from price increases expected to be visible mainly from Q1 218 onwards 14

15 Profit guidance Mainly due to the maintenance shutdown at the Husum integrated mill, Metsä Board s comparable operating result in the fourth quarter of 217 is expected to weaken slightly from the third quarter of

16 Summary Solid performance in Q3 Good demand for high-quality paperboards, with stable or rising price levels Near-term focus on improving average price of Husum s folding boxboard and increasing sales to Americas Metsä Board expects to have its current paperboard capacity in full use by the end of

17 Appendix

18 Key financials Q3/17 Q2/17 Change Q3/17 vs. Q2/17 1-9/17 1-9/16 Change 1-9/17 vs. 1-9/16 Sales EUR, m % 1,397 1,299 +8% 1,72 EBITDA* EUR, m % % 231 Operating result* EUR, m % % 138 % of sales % Result before taxes* EUR, m % % 17 Earnings per share EUR % %.25 ROCE* % Capex EUR, m % % 162 Cash flow from operations EUR, m % over 1% 77 IB Net debt, at end of period EUR, m % % 464 *comparable

19 Comparable operating result Q3/17 vs Q2/17: +16% and 1-9/17 vs. 1-9/16: +33% Q3 217 vs. Q vs EBIT-% EBIT-% 1.5 Q2 217 Q EBIT-% EBIT-% Inreased average price of FBB, higher production volumes in paperboard and pulp, lower maintenance costs, impact from FX rates including hedges + Positive development in linerboard and market pulp operations, discontinued paper business, impact from FX rates including hedges - Start-up of Metsä Fibre s new bioproduct mill - Increased latex price 19 WTKL = white-top kraftliner FBB = folding boxboard

20 Clearly lower capex in 217 EUR million Investments in January September were EUR 39 million (1 9/16: EUR 119 million) Estimated capex in 217 is EUR 65 7 million E Maintenance capex Growth capex Depreciation 2 Main growth in capex in : Husum investment programme, extrusion coating line and equity investment in Metsä Fibre s bioproduct mill

21 Financial targets and actuals Comparable ROCE, % Net debt / Comparable EBITDA, % Annual growth in total paperboard deliveries, % Target is to exceed relevant market growth* 6,4 9,1 11,3 Target: >12% 1,6 8,1 2,9 1,8 1,2 Target: <2.5 2, 1,7 7% 1% 13% 12% 17% / / /17 Global fresh fibre paperboard demand growth 3-4%/a Dividend policy: Metsä Board aims to distribute at least 5% of its result for the financial period in annual dividends to its shareholders 21

22 Debt structure and liquidity 3 September 217 Interest-bearing debt, total EUR 651 million Available liquidity, total EUR 412 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 *) Of which EUR 248 million due in 227 and EUR 67 million due in Average maturity of long-term loans on 3 September 217 was 5.4 years.

23 Increased financial costs due to the financing arrangements in September EUR million % 6 5, 5 4,6 4,5 4 4,2 3 3,8 4, 2 3,3 3,5 1 3, , /217 Net financial costs, EUR million Average interest rate at the end of period, % Net financials in 1-9/217 were EUR -29 million (1-9/16: EUR -21 million) In September, Metsä Board issued new 1-year EUR 25 million bond due 227 Q3 financial expenses include EUR 11 million of costs related to the early repurchase of the bond maturing in

24 Market cap and ownership distribution Metsä Board shares (METSB, METSA) are listed on Nasdaq Helsinki Market cap and foreign owners 3 September 217 Ownership distribution 3 September 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 24

25 Market price development in folding boxboard and white-top kraftliner in Europe EUR/tn Folding boxboard White-top kraftliner 25 Sources: RISI, Inc. & FOEX Indexes Ltd

26 Pulp price development (PIX) EUR Softwood, USD Hardwood, USD Softwood, EUR Hardwood, EUR '1 '11 '12 '13 '14 '15 '16 '17 USD Source: Foex Indexes Ltd

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