January–June 2018 (1–6/2017)
• Sales were EUR 1,011.1 million (918.7).
• Comparable operating result was EUR 128.2 million (88.7), or 12.7% (9.7) of sales. Operating result was EUR 122.6 million (92.1).
• Comparable earnings per share were EUR 0.28 (0.19), and earnings per share were EUR 0.27 (0.19).
• Comparable return on capital employed was 15.1% (10.3).
April–June 2018 (1–3/2018)
• Sales were EUR 518.7 million (492.3).
• Comparable operating result was EUR 59.2 million (69.0), or 11.4% (14.0) of sales. Operating result was EUR 53.6 million (69.0).
• Comparable earnings per share were EUR 0.13 (0.15), and earnings per share were EUR 0.12 (0.15).
• Comparable return on capital employed was 13.9% (15.8).
Events April–June 2018
• Total delivery volumes of paperboard increased and reached an all-time high during the second quarter of the year: 489,000 tonnes.
• The operating result for April–June was burdened by several planned maintenance shutdowns at Metsä Board’s mills in Finland.
• Wood costs continued to increase due to wood purchased from the Baltic countries to Sweden in particular. In addition, the cost of road transport increased clearly in the United States.
• The strong pulp market supported profitability.
• Metsä Board reached the Gold level in a sustainability and social responsibility assessment carried out by EcoVadis.
Result Guidance for July–September 2018
Metsä Board’s comparable operating result in the third quarter of 2018 is expected to be roughly at the same level as in the second quarter of 2018.
Metsä Board’s CEO Mika Joukio:
“The second quarter of the year largely met our expectations. Total delivery volumes of paperboard increased in April–June from the previous quarter and were record high. The prices of paperboard also developed favourably. In folding boxboard, we achieved half of the price increases announced at the end of last year in Europe, on average. In kraftliners, our latest price increase was almost completely realised. Due to the increased delivery volumes and higher prices, our sales in the second quarter reached an all-time high during the time Metsä Board has been a pure-play paperboard company.
Our operating result in April–June was burdened by several planned maintenance shutdowns at our mills in Finland, with the exception of the Kemi integrated mill. Production costs increased due to wood imported from the Baltic countries to Sweden in particular. The effect of exchange rate fluctuations on the result for April–June was minor compared to the previous quarter.
The pulp market was strong, and the market price of long-fibre pulp continued to increase in Europe. The continued increase in the price level was also reflected in the result of Metsä Fibre, our associated company.
I expect the demand for ecological fresh fibre paperboard to remain at a good level in the near future. Consumers want increasingly environmentally friendly and sustainable packaging materials, and Metsä Board’s lightweight paperboards meet these needs in an excellent manner. Together with our customers, we develop more efficient packaging solutions and use the potential of fresh fibre paperboards in an innovative way. Sustainably produced, environmentally sound packaging also ensures a positive user experience for consumers.”
Financial Key Figures
| 2018 | 2018 | 2017 | 2017 | 2018 | 2017 | 2017 | |
| Q2 | Q1 | Q2 | Q1 | Q1–Q2 | Q1Q2 | Q1–Q4 | |
| Sales, EUR million | 518.7 | 492.3 | 474.2 | 444.5 | 1 011.1 | 918.7 | 1 848.6 |
| EBITDA, EUR million | 78.5 | 94.3 | 67.0 | 68.8 | 172.7 | 135.7 | 298.7 |
| comparable, EUR million | 84.1 | 94.3 | 67.5 | 68.8 | 178.4 | 136.2 | 289.1 |
| EBITDA, % of sales | 15.1 | 19.2 | 14.1 | 15.5 | 17.1 | 14.8 | 16.2 |
| comparable, % of sales | 16.2 | 19.2 | 14.2 | 15.5 | 17.6 | 14.8 | 15.6 |
| Operating result, EUR million | 53.6 | 69.0 | 46.9 | 45.2 | 122.6 | 92.1 | 207.1 |
| comparable, EUR million | 59.2 | 69.0 | 43.5 | 45.2 | 128.2 | 88.7 | 193.5 |
| Operating result, % of sales | 10.3 | 14.0 | 9.9 | 10.2 | 12.1 | 10.0 | 11.2 |
| comparable, % of sales | 11.4 | 14.0 | 9.2 | 10.2 | 12.7 | 9.7 | 10.5 |
| Result before taxes, EUR million | 47.8 | 61.0 | 40.3 | 39.9 | 108.8 | 80.2 | 170.8 |
| comparable, EUR million | 53.5 | 61.0 | 36.9 | 39.9 | 114.5 | 76.8 | 157.2 |
| Result for the period, EUR million | 41.8 | 53.9 | 35.0 | 34.2 | 95.7 | 69.1 | 150.5 |
| comparable, EUR million | 46.2 | 53.9 | 32.2 | 34.2 | 100.1 | 66.4 | 137.5 |
| Result per share, EUR | 0.12 | 0.15 | 0.09 | 0.10 | 0.27 | 0.19 | 0.42 |
| comparable, EUR | 0.13 | 0.15 | 0.09 | 0.10 | 0.28 | 0.19 | 0.39 |
| Return on equity, % | 14.4 | 18.7 | 13.2 | 13.1 | 16.3 | 12.9 | 13.6 |
| comparable, % | 15.9 | 18.7 | 12.2 | 13.1 | 17.0 | 12.4 | 12.4 |
| Return on capital employed, % | 12.6 | 15.8 | 11.1 | 10.6 | 14.4 | 10.7 | 11.9 |
| comparable, % | 13.9 | 15.8 | 10.3 | 10.6 | 15.1 | 10.3 | 11.2 |
| Equity ratio at the end of period, % | 55 | 50 | 51 | 47 | 55 | 51 | 53 |
| Net gearing ratio at the end of period, % | 33 | 29 | 45 | 44 | 33 | 45 | 31 |
| Interest-bearing net liabilities/comparable EBITDA | 1.2 | 1,1 | 2.0 | 1.9 | 1.2 | 2.0 | 1.2 |
| Shareholders’ equity per share at end of period, EUR | 3.32 | 3.21 | 3.06 | 2.90 | 3.32 | 3.06 | 3.28 |
| Interest-bearing net liabilities, EUR million | 388.1 | 334.7 | 495.2 | 457.8 | 388.1 | 495.2 | 358.4 |
| Gross investments, EUR million | 15.3 | 10.5 | 12.4 | 19.0 | 25.7 | 31.4 | 65.4 |
| Net cash flow from operating activities, EUR million | 36.3 | 30.2 | 37.1 | 25.6 | 66.6 | 62.7 | 236.3 |
| Personnel at the end of period | 2,578 | 2,402 | 2,581 | 2,450 | 2,578 | 2,581 | 2,351 |
Near-term Outlook
Growth in the demand for high-quality consumer packaging paperboard made from fresh fibre is expected to continue in market areas important for Metsä Board. The market prices of folding boxboard and white kraftliner in local currencies are expected to remain stable.
Metsä Board’s paperboard deliveries in July–September are expected to remain roughly at the same level as in the second quarter.
Metsä Board aims to further improve the average price of Husum’s folding boxboard by optimising the sales mix.
The annual maintenance shutdown at the Kemi integrated mill is set to take place in the third quarter, as is part of the annual maintenance shutdown at the Husum integrated mill.
The weakening of the US dollar against the euro, including the impact of hedges, will have a negative effect on the operating result in the third quarter. This negative effect will be partly offset by the weakening of the Swedish krona. Including the impact of hedges, the third quarter will be the weakest quarter of 2018 in terms of foreign currency effects.
Wood costs in the third quarter are expected to remain roughly at the same level as in the second quarter. The overall production costs in 2018 are expected to rise from the previous year.
METSÄ BOARD CORPORATION
Espoo, Finland, 2 August 2018
BOARD OF DIRECTORS