Metsä Board Investor presentation 1 3/ May 2017

Transcription

1 Metsä Board 1 3/ May 2017

2 Contents Investment highlights 3 Strategy and financial targets 12 Operating environment and market position 20 Growth in the paperboard business 29 Result for January March Balance sheet and financing 51 Capex and Husum investment programme 59 Production, capacities and sourcing 64 Sustainability 71 Shares and owners 77 Appendix 80 Contact information 87 2

3 Investment highlights

4 Metsä Board in brief Market leader in folding boxboard in Europe and global market leader in coated white fresh fibre linerboard Strong fibre know-how and self-sufficiency in pulp Sales in 2016 EUR 1.7 billion and comparable operating result EUR 137 million Appr. 2,500 employees in 23 countries Global sales to over 100 countries and eight production units in Finland and Sweden 15% 25% 17 % Sales split in % 50% Sales split by region in % Folding boxboard Linerboards Market pulp Others EMEA Americas APAC 4 75 %

5 Various end-uses from high-quality paperboards Folding boxboards, white fresh fibre linerboards and fully bleached linerboards Consumer goods Food service Retail-ready 5

6 Metsä Board s folding boxboard has a three-layer structure 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. 6

7 Metsä Board s paperboards have many competitive advantages Lightweighting Metsä Board s folding boxboard can be even 30% lighter than competing grades (eg. SBS, WLC) Purity and safety Important especially in food packaging Sustainability Fresh fibres are recyclable and renewable raw material. Metsä Board s wood raw material is 100% traceable to sustainably managed northern forests Quality Metsä Board s paperboards are premium-quality 7

8 Metsä Board has a wide customer base Brand owner sales represents roughly 50% in folding boxboard, corrugated box manufacturers is the biggest customer segment in white linerboards BRAND OWNERS CONVERTERS CORRUGATED BOX MANUFACTURERS MERCHANTS FOLDING BOXBOARD WHITE LINERBOARDS fresh forest fibre-based 8

9 Strong profitability development over time 2016 was negatively impacted by Husum s new FBB machine ramp-up Comparable ROCE-% Comparable EBIT-% % ,8 Target over 12% from ,1 6,4 11,3 8,1 % ,6 5,2 6,8 9,0 8,

10 Strong improvement in productivity over time Personnel Production capacity (tonnes) / employee at current mills Capacity tn / employee Productivity (capacity) Personnel average E

11 High threshold for new producers to enter high-quality paperboard segment High investment costs Limited availability of high yield pulp (e.g. BCTMP) Global brand owners and corrugated box manufacturers not willing to change paperboard suppliers easily in the high-quality segments High speed packaging lines very quality sensitive Requirements for uniform brand look and feel globally Sustainability and product safety aspects Skilled people and organizations a crucial success factor 11

12 Strategy and financial targets

13 Metsä Board s vision is to be the preferred supplier of premium paperboards creating value for customers globally Strategic cornerstones Focus Growth Profitability Values Responsible profitability Reliability Cooperation Renewal 13

14 Focus Focus on premium fresh fibre paperboards for consumer and retail packaging This means to us: We focus on serving customers whose quality expectations require our high quality, light and strong packaging materials Our paperboards are produced from fresh fibres Our products are used for packages at the store and from the store to the consumer 14

15 Profitability 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: Our superior cost efficiency will be achieved by further developing productivity and efficiency of our mills, operations and people We will continue to drive down purchasing costs in all areas Our self-sufficiency in high-quality pulps together with unique paperboard making expertise helps us to improve our market position further and maintain healthy price levels 15

16 Growth 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: We grow in end-uses where our product is best suited to protecting our customers products and promoting their brands and businesses Our customer base is global, including brand owner, private label, converter and merchant customers By selecting businesses that benefit from our paperboards we can generate value for our customers and grow profitably with them 16

17 Financial targets Return on capital employed (ROCE) a minimum of 12% from 2017 onwards Net gearing a maximum of 70% Comparable ROCE, % 11, Net gearing, % 6,4 9,1 8, ,

18 Main priorities and actions to achieve financial targets Grow the paperboard businesses profitably globally Ensure successful sales of new capacity Secure good price levels Keep best in class product quality and improve supply chain Develop new products for existing and new end uses Continue productivity improvements and cost savings 18

19 Dividend and EPS Metsä Board s dividend payout target is at least 1/3 of EPS Dividend for 2016: EUR 0.19 per share Totalling EUR 68 million Corresponds to 76 per cent of EPS 0,50 0,40 0,30 0,20 0,10 0,00 EPS and DPS, EUR Earnings per share Dividend per share 19

20 Operating environment and market position

21 Demand is based on global trends Globalisation Technology Sustainability Consumption Increasing role of retail and harmonisation of global brands Growing importance of logistics Consolidation of carton converters New innovations utilising wood fibre and other biomaterials Continuous development of production technologies Digitisation and automatisation change business dynamics Greater significance of resource efficiency drives circular economy and life-cycle thinking Increasing regulation brings additional obligations Social responsibility through value chain Growing consumption and consumers increasing quality needs globally Stronger demand for sustainable packaging Digital services change purchasing behavior

22 The global paperboard packaging market is about USD 260 billion The total packaging market is USD 840 billion Average annual growth rate of paperboard packaging USD bn % p.a. Paperboard packaging USD 260 bn Other wood fibre based packaging Non-fibre based packaging Roughly half is made of fresh fibres Source: Smithers Pira

23 Global cartonboard *) market is 36 Mt/a of which folding boxboard market is about 9 Mt/a North America 6 Mt/a EMEA 8 Mt/a Avg. growth rate for folding boxboard is 3 4%/a Folding boxboard Other fresh fibre grades (e.g. SBS, CUK) Recycled grades Lat.Am. 2 Mt/a APAC 20 Mt/a 23 *) Excluding liquid packaging board, cup & plate stock, liner and uncoated recycled board. Source: Metsä Board estimates

24 Global food service board market is 3.5 Mt/a* ) Avg. growth rate for food service board is 3 5%/a EMEA 0.9 Mt/a Cups Plates Americas 1.6 Mt/a APAC 1.0 Mt/a Cartons 24 *) Base board (e.g. SBB or FBB) only, excl. other laminate materials such as aluminium and PE. Source: Metsä Board estimates

25 Global white linerboard market is 10.5 Mt/a Global coated white-top kraftliner market is 1 Mt/a, of which Metsä Board s share is roughly 40% 40% Fully bleached liner White top kraftliner White recycled liner Americas 3 Mt/a EMEA 4.5 Mt /a APAC 3 Mt/a Global containerboard market is 155 Mt/a, of which White linerboards 7% Brown kraftliner 17% Brown testliner 37% 25 Fluting 39% Source: Metsä Board estimates

26 Metsä Board has a strong position in Europe Largest Folding Boxboard Producers in Europe Total capacity: 3.6M tonnes Largest White Fresh Fibre Linerboard Producers in Europe Total capacity: 2.2M tonnes Metsä Board 37% Metsä Board 31% Stora Enso 21% Smurfit Kappa 23% Kotkamills Oy 11% Mondi 13% Mayr-Melnhof 9% BillerudKorsnäs 11% International Paper 7% SCA 8% Others 15% Others 14% Sources: Company information, Pöyry Management Consulting Oy Q2/2017

27 Market price development in folding boxboard and white-top kraftliner in Europe EUR/ tn Folding boxboard White top kraftliner 27 Sources: Pöyry Management Consulting & FOEX Indexes Ltd

28 Pulp price development (PIX) EUR Softwood, USD USD Softwood, EUR Hardwood, EUR Hardwood, USD '10 '11 '12 '13 '14 '15 '16 ' Source: Foex Indexes Ltd

29 Growth in the paperboard business

30 Metsä Board s transformation work is completed Focus on premium fresh fibre paperboards for consumer and retail packaging Market growth Paperboard company 2006: New strategy : Numerous divestments, closures and restructuring measures 2016: Completion of the transformation Paper company ROCE % 2017: The leading fresh fibre paperboard company in Europe 30

31 Metsä Board s growth exceeds clearly the average market growth Metsä Board s annual paperboard deliveries, 1,000 tonnes target 31 Fresh fibre linerboard Folding boxboard

32 Most important growth area is Americas 300 Actual and targeted deliveries to Americas ,000 tonnes target Folding boxboard Fresh fibre linerboard 32

33 Targeted sales and sales split for new paperboard volume from Husum mill A total of 400,000 tonnes of new FBB capacity Incremental capacity in linerboard *) 1,000 tonnes Deliveries in 2015 Folding boxboard to Americas Food service board globally Linerboard to Europe and Americas Targeted deliveries in *) Until July 2016 the paperboard machine (BM2) produced simultaneously fine paper reels.

34 Regional goals and operating models GROWTH FROM THE AMERICAS IN THE COMING YEARS AMERICAS SHARE OF SALES IN % MAINTAIN THE STRONG MARKET POSITION IN EUROPE EMEA SHARE OF SALES IN % FOCUS ON PREMIUM PAPERBOARD SEGMENTS IN THE ASIA-PACIFIC REGION APAC SHARE OF SALES IN % In 2016 the y-o-y growth was: +14% in Americas, +10% in EMEA, +24% in APAC

35 REGIONAL GOALS AND OPERATING MODEL: Maintaining a strong market position in Europe The goal is to remain Europe s biggest producer of folding boxboard and white fresh fibre linerboards The biggest growth drivers are Strong and long-term customer relationships Innovative high-performance product portfolio to replace other packaging materials Top-class customer service concept In EMEA, Metsä Board s paperboard delivery volumes grew by 10% in 2016 compared to 2015 EMEA Share of sales Metsä Board uses only fresh fibres from sustainably managed northern forests. 75% 35

36 36 REGIONAL GOALS AND OPERATING MODEL: Growth in the Americas in the coming years The most rapid growth is sought in the Americas, where most of Husum s new capacity in folding boxboard is targeted The biggest growth drivers are Limited local supply in folding boxboard Due to strong consolidation, converters without own paperboard production are looking for alternatives In folding cartons their share is 40 50% Strong demand in food service board Growing environmental awareness In Americas, Metsä Board s paperboard delivery volumes grew by 14% in 2016 compared to 2015 Americas Share of sales Paperboard offers a sustainable option for plastics such as styrofoam in food service applications. 17%

37 REGIONAL GOALS AND OPERATING MODEL: Focus on premium segments in the Asia-Pacific region Metsä Board aims at moderate growth, primarily in cooperation with brand owners Responsible consumer goods companies promote good packaging Consistent quality Traceable raw materials Responsible production Due to the local overcapacity in Asia, the timing is not good for aggressive growth In APAC, Metsä Board s paperboard delivery volumes grew by 24% in 2016 compared to 2015 APAC Share of sales Global consumer 8% goods companies are not willing to change paperboard suppliers easily in the high-quality segments. 37

38 Result for January March 2017

39 Q in summary Good demand for high-quality paperboards continued Stable or rising market price levels Metsä Board s paperboard and market pulp deliveries grew from the previous quarter All Finnish mills performed well, good momentum in linerboard business No major maintenance shutdowns during the first quarter Husum still had a negative impact on profitability 39

40 Key financials Q1/17 Q4/16 Change Q1/17 vs. Q4/16 Q1/16 Change Q1/17 vs. Q1/ Sales EUR million % % 1,720 EBITDA, comparable EUR million % % 231 Operating result, comparable EUR million % % 138 % of sales % Result before taxes, comparable EUR million % % 107 Earnings per share EUR 0,10 0, % % 0.26 ROCE, comparable % Capex EUR million % 54-65% 162 Cash flow from operations EUR million % IB Net debt, at the end of period EUR million % %

41 Total paperboard deliveries grew All-time high monthly level in March 2017 Folding boxboard Fresh fibre linerboard 420 1,000 tonnes Growth in paperboard deliveries: +10% Q1/17 vs. Q4/16 +16% Q1/17 vs. Q1/16 +12% FY16 vs. FY Q Q Q Q Q Q Q Q Q Q Q FY 2015: 1.4 mill. tonnes FY 2016: 1.6 mill. tonnes

42 Sales increased and profitability improved Sales, EUR million Comparable operating result, EUR million and % EUR million EUR million ,2 % 9,0 % 11,0 % 7,6 % 8,0 % 8,5 % 7,7 % 7,8 % 10,1 % 12% 10% 8% 6% % Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 2% 0% FY 2015: EUR 2,008 million FY 2016: EUR 1,720 million FY 2015: EUR 180 million FY 2016: EUR 137 million 42

43 Impact on Q operating result vs. Q and Q Operating result, EUR million Q vs. Q EBIT-% 7.8 EBIT-% 10.2 Q Q Operating result, EUR million Q vs. Q EBIT-% 8.0 EBIT-% 10.2 Q Q Growing delivery volumes in paperboard and market pulp, no major maintenance shutdowns, increased price levels in coated WTKL in the US and in market pulp - Sales mix in Husum s FBB and product mix in Husum s white linerboards, increased latex price + Positive development in Finnish mills, discontinued paper operations, positive impact from FX rates after hedges - Increased latex price WTKL = white-top kraftliner FBB = folding boxboard

44 Higher profitability improved ROCE-% 18% 16% 14% 12% Target >12% from 2017 onwards 10% 8% 6% 4% 2% 0% 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 44 Comparable ROCE, %

45 Cash flows clearly positive Q cash flow from operations impacted by changes in working capital, advance payments of employment pension contributions, and dividend from Metsä Fibre EUR million Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 45 Cash flow from operations, quarterly Cash flow from operations, rolling 12 months Free cash flow, quarterly Free cash flow, rolling 12 months

46 Balance sheet remained stable Net gearing, % 32% 44% 42% 54% Financial target in net gearing is a maximum of 70% 49% 44% 44% 0,6 0,5 0,4 0, Interest-bearing net debt / comparable EBITDA 1, ,5 2,1 2, , , , /16 6/16 9/16 12/16 3/ /16 6/16 9/16 12/16 3/17 0 Interest-bearing net debt, EUR million Net gearing, % Interest-bearing net debt, EUR million Interest-bearing net debt / EBITDA (rolling 12-month) 46

47 High potential to improve profitability in Husum Rising capacity utilisation rate in the FBB production line (now 70%) will decrease production costs per tonne produced FBB production line fully utilised by the end of 2018 Total FBB deliveries to Americas will increase PE-coated paperboards generate sales in a new customer segment The volumes of coated linerboards will grow 47

48 Near-term outlook Good demand for fresh fibre paperboards, pulp market expected to remain healthy Price levels in FBB are expected to be stable, several linerboard producers have announced price increases Metsä Board s paperboard delivery volumes are expected to increase Several maintenance shutdowns at the Finnish mills in Q2, rising latex price increasing production costs 48

49 Profit guidance Metsä Board's comparable operating result for the second quarter of 2017 is expected to remain roughly on the same level as in the first quarter of

50 Summary Good overall performance in the first quarter of 2017 High potential to improve profitability in Husum Extrusion coating line in Husum offers improved availability and competitive products, especially in the food service segment In 2017, focus is on sales of the new paperboard capacity 50

51 Balance sheet and financing

52 Strong balance sheet 50% 40% 30% 20% 10% 0% Equity ratio, % 41% 39% 46% 48% 47% / % 70% 60% 50% 40% 30% 20% 10% 0% Net gearing, % 70% 51% 44% 44% 32% / Net debt, EUR million and Net debt / Comparable EBITDA 2,9 1,8 1,2 2, /2017 Net debt, EUR million 1, Net debt/ebitda (rolling 12 months) 52

53 Debt structure and liquidity 31 March 2017 Interest-bearing debt, total EUR 660 million Available liquidity, total EUR 401 million Bonds Loans from financial institutions Pension loans Finance leases and other loans Cash and cash equivalents Revolving credit facility Unraised pension loans Other short-term loans Average maturity of long-term loans on 31 March 2017 was 2.2 years.

54 Maturity schedule in long-term IB debt EUR million Long-term interest-bearing debt (total EUR 469 million) and committed undrawn credit facilities 31 March >2021 Long-term interest bearing liabilities Committed undrawn credit facilities 54

55 Debt programmes 31 March 2017 Metsä Board s significant debt securities issued and outstanding at 31 March 2017 Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate* ), % Maturity EUR 225 million bond Issue Syndicated credit facility EUR 51 million bilateral loans EUR 24 million finance leases EUR 230 million pension loans * ) 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 31 March 2017 is 3.3%. Metsä Board s principal long-term liquidity reserves at 31 March 2017 Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate* ), % Maturity Revolving credit facility Pension loan facilities Short-term funding programmes Metsä Group internal short-term limit months Metsä Group Treasury funding programmes EUR 150 million domestic CP programme months 55

56 Steadily decreasing net financial costs EUR million % ,6 4,2 3,8 3,3 3, /2017 4,8 4,6 4,4 4,2 4,0 3,8 3,6 3,4 3,2 3,0 Net financials in Q1 were EUR -5 million (Q4/16: EUR -10 million) Net exchange gains and losses amounted to EUR 0 million (EUR -4 million) Net financial costs, EUR million Average interest rate at the end of period, % 56

57 FX exposure and sensitivities Impact of FX rate changes after hedges in Q1 2017: flat in Q1/17 vs. Q4/16, EUR 5 million positive in Q vs. Q Hedging policy from 1 January 2017 onwards 100% of balance sheet position 50% of annual net FX flows Annual transaction exposure EUR 1.2 billion 34 % 6 % 2 % USD 58 % SEK GBP Other currencies FX sensitivities before hedges 10% strengthening of foreign currency vs. EUR will have an impact on Metsä Board s EBIT of Currency USD, $ Swedish krona GBP, Next 12 months EUR +70 million EUR -40 million EUR +7 million 57

58 Metsä Board 's credit rating BB+ Ba1 BB Ba2 BB- Ba3 Standard & Poor s Moody s Positive Stable B+ B1 B B2 B- B3 CCC+ Caa1 CCC Caa

59 Capex and Husum investment programme

60 Clearly lower capex in 2017 EUR million Investments in January March were EUR 19 million (Q1/16: EUR 54 million) Estimated capex in 2017 is EUR million E Maintenance capex Growth capex Depreciation 60 Main growth in capexes in : Husum investment programme, extrusion coating line and equity investment in Metsä Fibre s bioproduct mill

61 Husum investment programme Launched at the end of 2014 Two paper machines were shut down in 2015 One paper machine converted to produce linerboard (BM2) New folding boxboard machine (BM1) started up on February 2016 Enhancements to the pulp mill and the mill site s own port Folding boxboard production Linerboard production 61 Capacity approximately 400,000 t/a Deliveries mainly to Americas and food service globally Capacity approximately 270,000 t/a Deliveries to Europe and Americas Capacity changes 2014 vs. 2016: Paperboard capacity +670,000 tn/a Paper capacity -600,000 tn/a

62 New state-of-the-art extrusion coating line started up at Husum EUR 38 million investment, capacity of 100,000 t/a PE-coated *) paperboard is an alternative to plastics Targeted for food packaging and food service applications In 2016, Metsä Board introduced PE-coated paperboards Supports growth in a new customer segment 62 Metsä Board continues development work on other innovative barrier solutions including the use of biobased materials *) PE=polyethylene, the most common barrier material used against moisture and grease

63 Metsä Board s associated company Metsä Fibre builds a bioproduct mill Net capacity increase at the site is approximately 800,000 t/a Total capacity is 1.3 million t/a Investment cost roughly EUR 1.2 billion and start up in Q Capital invested by Metsä Board in Q was EUR 24.9 million No other financial commitments in the project Metsä Board s holding in Metsä Fibre remains at 24.9% Metsä Board s pulp balance from 2018 onwards is 500, ,000 t/a long Result contribution is driven by the market price of softwood chemical pulp Reserve to grow paperboard business further in the future while maintaining self-sufficiency in pulp 63

64 Production, capacities and sourcing

65 Production locations Paperboard mills Husum (FBB and linerboard) Kemi (linerboard) Kyro (FBB) Tako (FBB) Simpele (FBB) Äänekoski (FBB) Pulp mills Husum (chemical pulp) Joutseno (BCTMP) Kaskinen (BCTMP) Husum Kemi Äänekoski Kaskinen Simpele Tako Joutseno Kyro 65

66 Paperboard capacity Town Country Machines Folding boxboard White fresh fibre linerboard Total Tampere (Tako) Finland Kyröskoski (Kyro) Finland Äänekoski Finland Simpele Finland Kemi Finland Husum Sweden Total 8 1, ,000 66

67 Pulp capacity Metsä Board pulp mills Country Chemical pulp BCTMP Total Husum Sweden Joutseno Finland Kaskinen Finland Total ,390 Metsä Fibre pulp mills Country Chemical pulp BCTMP Total Äänekoski Finland Kemi Finland Rauma Finland Joutseno Finland Total 2,480 2,480 67

68 Deliveries by region in 2016 Folding boxboard 11% Fresh fibre linerboard 1% 16% 32% 60% 48% 25% 7% 68 Western Europe Eastern Europe Americas Asia and Pacific

69 Sourcing 2016 Electricity sourcing (total 2,438 GWh) Primary energy used (total 12.0 TWh) Wood sourcing by country (total 4.6 million cubic metres) Purchased energy 45% Outsourced generation 3% Own generation 20% Hydro 4% Gas 7% Peat Coal 2% Oil 2% 2% Russia 13% Baltic countries 18 % Sweden 38% Through PVO shareholding 32% Nuclear power 22% Woodbased 60% Finland 31% 69

70 Cost structure in 2016 Fixed costs Other fixed 15% Delivery costs 16% Personnel 14% Other variables 3% Wood 26% Energy 12% Chemicals, pigments and fillers 14% Variable costs 70

71 Sustainability

72 The circular economy of a durable and safe package Pure paperboard helps to store the packaged product safely. Fresh fibre is a pure and safe, renewable raw material. Our paperboards are recyclable and biodegradable, or they can be used for energy production. Durable paperboard protects the packaged product effectively. We only use carefully selected and safe raw materials in our products. We follow good manufacturing principles (GMP). All of our products meet the requirements of relevant international legislation. 72

73 Metsä Board uses water efficiently Rain waters the forest Metsä Board has decreased its CO 2 emissions by 45% since 2009 and the use of water by 14% since % of water used in the production process is returned back to the waterways Also lakes and seas are a source of recreation Forests are a source of recreation Metsä Board s board production is mostly integrated in pulp production Waste waters are always carefully cleaned before returned back to the waterways Light weight boards are resource efficient both for us as well as for our customers Bark is utilised as a bio-energy source Metsä Board only uses surface water in its production Metsä Board s paperboards can be recycled, depending upon local recycling services

74 Metsä Board s sustainability targets WOOD THE SHARE OF CERTIFIED WOOD >80% PERFORMANCE % BIOENERGY SHARE OF TOTAL PURCHASED ENERGY 51% WELL-BEING SICKNESS ABSENTEEISM <3% PERFORMANCE % CLIMATE FOSSIL CO 2 EMISSIONS PER PRODUCT TONNE % PERFORMANCE % LOGISTICS ENSURE THE SUSTAINAINABILITY OF MAIN LOGISTIC FLOWS PERFORMANCE % SAFETY AT WORK -10% LOST-TIME ACCIDENTS FREQUENCY ANNUALLY PERFORMANCE % ENERGY ENERGY EFFICIENCY IMPROVEMENT PERFORMANCE % RESOURCE EFFICIENCY 12% -17% PROCESS WATER USE PER PRODUCT TONNE PERFORMANCE % 74

75 Metsä Board scored again high in CDP in 2016 CDP Water A List For the second year in a row Metsä Board was globally the only forest company chosen to the A List CDP Climate A List Only 9% of the companies were chosen on the list CDP Forest programme Leadership status CDP Supply chain programme Metsä Board participates together with its customers L Oréal nominated Metsä Board to its best performer as packaging material supplier in

76 Increased regulation to ensure product safety EU Commission In December 2016, 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 (exceptions for example eggs) No regulation of mineral oil but concentration limits of certain polyaromatic hydrocarbons micrograms/kg food has been set Draft German mineral oil regulation 4th ordinance draft is expected to be published soon The earlier drafts were focusing on mineral oil migration from recycled fibre based paperboards to food. The new draft is not expected to change in this respect 76

77 Shares and owners

78 Market cap and ownership distribution Market cap and foreign owners 31 March 2017 Ownership distribution 31 March 2017 EUR million % / % 15 % Metsäliitto Cooperative 25 % 42 % *) Domestic institutional investors Domestic private investors Foreign owners Market cap, EUR million Share of foreign owners, % *) Metsäliitto Cooperative has 61% of voting rights 78

79 Ownership structure on 31 March 2017 Shares, % (total no. of shares 355,512,746) Votes, % (total no. of votes 1,037,530,115) 2 % 3 % 6 % Metsäliitto Cooperative Foreign owners* Households 2 % 1 % 4 % 6 % Metsäliitto Cooperative Public sector organisations Households 13 % 42 % Public sector organisations 11 % Foreign owners* 18 % 16 % Finance and insurance companies Non-profit organisations 15 % 61 % Non-profit organisations Finance and insurance companies Other companies * incl. nominee registered Other companies 79 Metsä Board has two series of shares: 35,895,651 A-shares and 319,617,095 B-shares. A-share entitles to 20 votes and B-share entitle to 1 vote at a General Meeting. Source: Euroland

80 Appendix

81 Corporate Management Team Mika Joukio CEO Chairman in CMT since 2014 Share ownership 261,884 Jussi Noponen CFO Member in CMT since 2016 Share ownership: 50,000 Ari Kiviranta SVP, Production and Technology Member in CMT since 2014 Share ownership: 16,236 Sari Pajari SVP, Business Development Member in CMT since 2011 Share ownership: 45,740 Seppo Puotinen SVP, Marketing and Sales Member in CMT since 2005 Share ownership 107,000 Susanna Tainio SVP, HR Member in CMT since 2015 Share ownership 20, Share ownerships are B-shares

82 METSÄ GROUP Sales EUR 4.7 billion Personnel 9,300 METSÄLIITTO COOPERATIVE Group s parent company Owned by 104,000 Finnish forest owners METSÄ FOREST METSÄ TISSUE METSÄ WOOD METSÄ BOARD METSÄ FIBRE Wood Supply and Forest Services Tissue and cooking papers Wood Products Paperboard Pulp and Sawn Timber Sales: EUR 1.5 billion Personnel: 860 Sales: EUR 1.0 billion Personnel: 2,700 Sales: EUR 0.5 billion Personnel: 1,520 Sales: EUR 1.7 billion Personnel: 2,500 Sales: EUR 1.6 billion Personnel: 1,230 Metsäliitto Cooperative holding 100% Metsäliitto Cooperative holding 100% Metsäliitto Cooperative holding 100% Metsäliitto Cooperative holding 42%, 61% of votes Metsäliitto Cooperative holding 50.2%, Metsä Board 24.9%, Itochu Corporation 24.9% 82

83 True success story 2005 Structural change starts Paper production over 80% of sales -> Decision to exit paper business 2006 Strategic review launched Restructuring and focused investment programme initiated, focus on paperboard Streamlining and focused investments Paper capacity reduction from about 5 million to 0.8 million annual tonnes Major divestments incl. Graphic Papers and Map Merchants Paperboard capacity increases 2013 Strategic review completed Clear focus on paperboard Paper production 25% of sales 2015 Strong market position in main products Europe s leading producer of folding boxboard The world s leading manufacturer of coated white fresh fibre linerboards 2016 Final exits from non-core businesses Fine paper production at Husum mill and wallpaper base production at Kyro mill ended Paperboard capacity 2 million t/a 83

84 M&A activity Acquisitions Biberist Paper Mill Simpele Mill UK Paper Modo Paper Zanders Kemiart Liners (53 %) Chemicals Business Divestments 84 Botnia Wood Corrugated Packaging MD Papier Albbruck Metsä Tissue Savon Sellu Forestia PSM 8% in Botnia 9% in Botnia Carton plants Map New Thames Graphic Papers B2 shares in PVO MB Uruguay Part of Reflex Hallein mill Rest of Reflex 0.5% in PVO Alizay mill Lielahti real estate 7.3 % in Metsä Fibre Gohrsmühle mill

85 Significant Divestments EUR 3.7 billion in assets divested since 2001 Year Divestiture Enterprise Value, EUR million 2015 Gohrsmühle mill in Germany neg Lielahti real-estate Alizay property and other estates % stake in Metsä Fibre % stake in PVO Hallein Metsä-Botnia s Uruguayan operations 300* 2008 Graphic Papers ,000 shares in PVO New Thames mill 82** 2007 Map Merchant Group Folding carton plants Botnia (9%) Botnia (8%) Savon Sellu Forestia (95%) Metsä Tissue Papierfabrik Albbruck MD Papier Noviant (19%) 41 3, * Cash portion **Incl. pension liabilities

86 Sales and EBIT-% development ,6 6,8 9,0 8,0 9,0 7,0 % ,2 5, ,8 1,1 2,4 3,6 3,0 1,0 1, ,1 6, ,0 5,0 7,0 Sales, EUR million EBIT % 86

87 Contact information Katri Sundström Vice President, Investor relations Tel

88