Metsä Group Financial Statements Bulletin 2012, Stock Exchange Release 7 February 2013 at noon
Full year result for 2012
– Sales amounted to EUR 5,001 million (1–12/2011: EUR 5,346 million).
– Operating result excluding non-recurring items was EUR 252 million (314). Operating result including non-recurring items was EUR 237 million (29).
– Result before taxes excluding non-recurring items was EUR 149 million (195). Including non-recurring items, the result before taxes was EUR 134 million (-98).
– Cash flow from operations amounted to EUR 440 million (552)
Result for October–December 2012
– Sales amounted to EUR 1,228 million (10–12/2011: 1,223).
– Operating result excluding non-recurring items was EUR 71 million (3). Operating result including non-recurring items was EUR 77 million (-200).
– Result before taxes and excluding non-recurring items was EUR 43 million (-21). Result before taxes including non-recurring items was EUR 49 million (-228).
Events during the fourth quarter of 2012
– The biopower plant owned by Pohjolan Voima and Leppäkosken Sähkö at Metsä Board’s Kyro mill was inaugurated.
– The bioenergy heating plant next to Metsä Wood’s Kerto mill in Lohja was completed at the end of the year.
– Metsäliitto Cooperative issued a EUR 175 million euro bond.
– Pulp prices turned into a slight upward trend.
– Delivery volumes of folding boxboard fell short of the previous quarter due to seasonal factors. Average price of linerboard increased.
– The profitability of Tissue and Cooking Papers improved from both the previous year and the previous quarter.
Events after the period
– The Alizay mill property in France, including all equipment and buildings, was sold to Conseil Général de l’Eure, representing the French state, for EUR 22 million.
– Esa Kaikkonen, LLM, was appointed Executive Vice President of Metsä Wood as of 5 February 2013.
"Our result for 2012 was satisfactory, considering the market conditions. Our operating result excluding non-recurring items improved steadily quarter after quarter.
The most significant events during the year included launching the new corporate identity, deepening the pulp partnership with the Japanese company Itochu and the completion of the strategic review of the paper business in the spring. These are important milestones for the Group’s future.
We continued our development investments to renew the capacity of our production plants and improve our efficiency and profitability. Investments in bioenergy in Finland will increase the use of renewable fuels at our production plants and improve our energy efficiency and environmental performance considerably.
The general market situation continues to be unstable, and continuously increasing national and EU-level regulation makes the operations of Finnish export companies even more challenging. However, as the result of the choices that we have made, Metsä Group can head to the future from a solid foundation."
Kari Jordan, President & CEO, Metsä Group
Metsä Group
| Income statement | 2012 1–12 | 2011 1–12 | 2012 10–12 | 2011 10–12 |
| Sales | 5 001 | 5 346 | 1 228 | 1 223 |
| Other operating income | 77 | 95 | 25 | 32 |
| Operating expenses | -4 591 | -5 058 | -1 124 | -1 366 |
| Depreciation and impairment losses | -249 | -354 | -52 | -89 |
| Operating result | 237 | 29 | 77 | -200 |
| Share of profit from associates | 5 | 4 | 0 | -1 |
| Exchange gains and losses | 2 | 2 | 1 | 0 |
| Other net financial items | -110 | -133 | -29 | -27 |
| Result before income tax | 134 | -98 | 49 | -228 |
| Income taxes | -32 | -59 | 2 | 22 |
| Result for the period | 103 | -157 | 51 | -206 |
| Profitability | 2012 1–12 | 2011 1–12 | 2012 10–12 | 2011 10–12 |
| Operating result, EUR mill. | 237 | 29 | 77 | -200 |
| - “ -, excluding non-recurring items | 252 | 314 | 71 | 3 |
| - “ - % of sales | 5.0 | 5.9 | 5.8 | 0.2 |
| Return on capital employed, % | 6.6 | 1.1 | 7.9 | -20,6 |
| - ” -, excluding non-recurring items | 7.0 | 8.5 | 7.3 | 0.7 |
| Return on equity, % | 6.1 | -9.9 | 10.9 | -51.9 |
| - ” -, excluding non-recurring items | 6.9 | 8.6 | 9.6 | 0.1 |
| Financial position | 2012 31.12. | 2011 31.12. | 2012 30.9. | 2011 30.9. |
| Equity ratio, % | 35.4 | 28.3 | 34.4 | 31.0 |
| Net gearing ratio, % | 84 | 131 | 89 | 113 |
| Interest-bearing net liabilities, EUR mill. | 1 590 | 1 953 | 1 648 | 1 895 |
Segments
| Sales and Operating result 2012 (EUR mill.) | Wood Supply | Wood Products Industry | Pulp Industry | Paperboard and Paper Industry | Tissue and Cooking Papers |
| Sales | 1 515 | 904 | 1 274 | 2 108 | 982 |
| Other operating income | 10 | 10 | 10 | 194 | 16 |
| Operating expenses | -1 502 | -866 | -1 077 | -1 982 | -922 |
| Depreciation & impairment losses | -3 | -31 | -57 | -100 | -43 |
| Operating result | 20 | 17 | 150 | 220 | 33 |
| Non-recurring items | - | 2 | -2 | -146 | 7 |
| Operating result, excl. non-rec. items | 20 | 19 | 148 | 74 | 40 |
| - % of sales | 1.3 | 2.1 | 11.6 | 3.5 | 4.0 |
Near-term outlook
For 2013, the wood orders of Metsä Forest’s customers are at a normal level. The demand for wood continues to be steady for all timber grades.
The balance of the sawn timber market is improving due to the decreased stock levels of suppliers and customers. Sales of both plywoods and Kerto products are expected to develop favourably during the next few months.
Pulp prices in different market areas have levelled off and partly begun to increase during early 2013. The favourable development is supported by the low levels of softwood suppliers’ stock, delays in additional capacity projects and China’s investments in tissue paper production capacity.
The demand for tissue and cooking papers is expected to continue to increase in all markets. Metsä Tissue’s strong focus areas in 2013 include Poland and Russia. In particular, changes in energy and raw material prices and local availability of recycled paper contribute to the development of operating profit.
Delivery volumes of folding boxboard and liner are estimated to increase slightly during the first quarter of 2013 compared to the previous quarter. As a result of the completed annual folding boxboard contract negotiations the volumes are increasing in 2013 compared to 2012 and no material price changes are expected. No significant changes are expected in liner prices in the next few months.
Delivery volumes of uncoated fine paper are estimated to increase slightly in the first quarter of 2013 compared to the previous quarter, and Metsä Board’s pulp delivery volumes are expected to be on a par with the previous quarter. No significant changes in the price of uncoated fine paper are visible. The market situation of coated paper has weakened further during the first months of the year, and delivery volume and prices are estimated to decrease slightly early in the year.
Metsä Group's operating result excluding non-recurring items in the first quarter of 2013 is expected to be slightly better compared to the fourth quarter of 2012.
New disclosure procedure
Metsä Group has adopted a new disclosure procedure made possible by the Financial Supervision Authority Standard 5.2b. This bulletin is a summary of Metsä Group's Financial Statement Bulletin for 2012. The Financial Statement Bulletin and its tables are attached to this Stock Exchange Release as a PDF attachment and are available on the Group website at www.metsagroup.com.
METSÄ GROUP
Group Communications
For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0)10 465 4260
Reeta Kaukiainen, SVP, Communications, Metsä Group, tel. +358 (0)10 465 4541, +358 (0)50 522 0924
www.metsagroup.com
Metsä Group is a responsible forest industry group whose products’ main raw material is renewable and sustainably grown Nordic wood. Metsä Group focuses on tissue and cooking papers, consumer packaging paperboards, pulp, wood products, and wood supply. Its high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group’s sales totalled EUR 5.0 billion in 2012, and it employs approximately 11,500 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 125,000 Finnish forest owners.