Metsä Group Interim financial report January–September 2024
January–September 2024 (1–9/2023)
- Sales were EUR 4,273 million (4,624).
- Operating result was EUR 157 million (443). Comparable operating result was EUR 170 million (431).
- Result before taxes was EUR 119 million (438). Comparable result before taxes was EUR 131 million (430).
- Comparable return on capital employed was 3.2% (8.3).
- Net cash flow from operations was EUR -165 million (487).
July–September 2024 (7–9/2023)
- Sales were EUR 1,336 million (1,509).
- Operating result was EUR 111 million (41). Comparable operating result was EUR 113 million (51).
- Result before taxes was EUR 100 million (49). Comparable result before taxes was EUR 102 million (60).
- Comparable return on capital employed was 6.1% (3.2).
- Net cash flow from operations was EUR 87 million (469).
Events during the third quarter of 2024
- The average sales prices of Metsä Group’s softwood market pulp increased by 6% in Europe and decreased by 4% in China compared to the previous quarter.
- In Europe, the pulp market situation was at a good level. In China, demand weakened in the second quarter but picked up at the end of the third quarter.
- Metsä Group’s paperboard delivery volumes increased slightly from the previous quarter. The average prices remained stable.
- Metsä Group published its updated Green Finance Framework. The previous framework was from 2019.
- The comparable operating result for July–September includes EUR 67 million in insurance compensation for the gas explosion at the Kemi bioproduct mill. Negotiations are continuing with the insurance consortium to compensate the remaining estimated financial losses.
Result guidance for October–December 2024
In October–December 2024, Metsä Group’s comparable operating result is expected to be weaker than in July–September 2024. The insurance compensation for the gas explosion at Kemi bioproduct mill, included in the comparable operating result for July–September, and any future insurance compensations in October–December have not been considered in the result guidance. Metsä Group’s comparable operating result for July–September 2024 amounted to EUR 113 million, including EUR 67 million in insurance compensation.
President and CEO Ilkka Hämälä:
The economy continued to be weak in the third quarter of 2024. In the wood market, trade was normal, and prices remained at a record high, compared with figures across the last two decades. A high cost level combined with low demand across the board resulted in a weak result for the third quarter. The quarterly result was significantly improved by the business interruption insurance compensation for the accident at the Kemi bioproduct mill, which was allocated to the first half. Negotiations on the final insurance compensation are still underway, but EUR 67 million in compensation was recorded for the third quarter.
The slowdown in the construction industry continues, and there are no signs of a change in the demand for sawn timber and plywood. Demand for Kerto® LVL has remained strong, proving the product’s competitiveness in construction industry solutions.
In China, the pulp market picked up in September, and prices began to gradually increase in softwood pulp trade. Demand remained stable in the European pulp market even though prices continued to decrease, still remaining higher than the price level in Asia. In Europe, the paperboard market continues to be affected by Asian paperboard imports to regions neighbouring the EU such as Türkiye. In the US, the market situation has remained slightly stronger than in Europe. As is typical of consumer products, demand for tissue papers has been stable, and profitability has remained at a reasonable level.
During the autumn, heated discussions have taken place concerning the forest industry’s ability and willingness to comply with forest-related legislation, certification schemes and requirements specified by the companies themselves. Companies in the industry have worked individually, jointly and in cooperation with the authorities to find ways to prevent mistakes and deviations. Naturally, Metsä Group is committed to continuously improving its business to safeguard the ecological state of forests and waterbodies, an example of this is the principles of regenerative forestry introduced in 2023. However, if a mistake occurs, we are fully transparent about it. From now on, we will publish any deviations from the law and certificates on our website.
Metsä Group’s numerous development and investment projects are progressing as planned. The expansion of the Mariestad tissue paper mill’s new production line has progressed to the initial stage of equipment installation. The first stage of the modernisation of the Mänttä tissue paper mill’s converting line has begun. Infrastructure planning for the new tissue paper mill in the UK is moving forward. Equipment manufacture for the
Kerto LVL mill under construction in Äänekoski has begun mainly at Finnish machine shops. We are constructing a demo plant for the recovery of lignin in Äänekoski and are initiating preparations for carbon capture pilot equipment for test runs that will be launched in the spring at the Rauma pulp mill. We have initiated the development programmes at the Simpele paperboard mill and are planning the next steps for improving competitiveness at the Kyro and Husum mills.
The pre-engineering project for the MuotoTM 3D mill is nearing completion, and marketing of the products to be produced at the demo plant has begun. The Kuura® textile fibre is produced at the demo plant for various end uses. Plans for a commercial mill are underway.
Metsä Group’s mission is to add value to the forests of the owner-members of the Group’s parent company Metsäliitto Cooperative. Carefully and sustainably managed, our owners’ 5.5 million hectares of Finnish forest make an important contribution to the success of the Finnish economy. The only way we can handle the challenging task of coordinating and promoting the economic, ecological and social roles of commercial forests is by engaging in continuous, long-term and future-oriented development work.
| Key figures | |||||
| 2024 | 2023 | 2024 | 2023 | 2023 | |
| 1–9 | 1–9 | 7–9 | 7–9 | 1–12 | |
| Sales, EUR million | 4,272.7 | 4,624.3 | 1,335.7 | 1,508.5 | 6,110.4 |
| EBITDA, EUR million | 492.2 | 673.0 | 222.0 | 117.7 | 845.3 |
| Comparable, EUR million | 497.5 | 658.8 | 224.0 | 126.8 | 833.0 |
| % of sales | 11.6 | 14.2 | 16.8 | 8.4 | 13.6 |
| Operating result, EUR million | 157.2 | 443.1 | 111.2 | 40.8 | 498.1 |
| Comparable, EUR million | 170.3 | 430.8 | 113.2 | 51.0 | 487.9 |
| % of sales | 4.0 | 9.3 | 8.5 | 3.4 | 8.0 |
| Result before income tax, EUR million | 118.7 | 438.1 | 99.6 | 48.9 | 487.8 |
| Comparable, EUR million | 131.4 | 430.2 | 101.7 | 60.1 | 481.6 |
| Result for the period, EUR million | 98.0 | 342.8 | 77.5 | 37.0 | 383.6 |
| Return on capital employed, % | 3.0 | 8.5 | 6.0 | 2.7 | 7.3 |
| Comparable, % | 3.2 | 8.3 | 6.1 | 3.2 | 7.2 |
| Return on equity, % | 2.3 | 8.1 | 5.6 | 2.6 | 6.8 |
| Comparable, % | 2.5 | 7.9 | 5.7 | 3.3 | 6.7 |
| Equity ratio, % | 56.5 | 57.5 | 56.5 | 57.5 | 55.9 |
| Net gearing ratio, % | 22.9 | 13.5 | 22.9 | 13.5 | 11.7 |
| Interest-bearing net liabilities, EUR million | 1,281.3 | 755.7 | 1,281.3 | 755.7 | 662.9 |
| Total investments, EUR million | 422.3 | 864.8 | 160.3 | 311.9 | 1,193.2 |
| Net cash flow from operations, EUR million | -164.8 | 486.9 | 86.7 | 468.6 | 925.6 |
| Personnel at the end of the period | 9,638 | 9,725 | 9,638 | 9,725 | 9,464 |
| Sales and Operating result | |||||
| 1–9/2024, EUR million | Wood Supply and Forest services | Wood Products Industry | Pulp and Sawn timber industry | Paperboard Industry | Tissue and Greaseproof papers |
| Sales | 1,757.3 | 421.9 | 1,685.8 | 1,492.6 | 862.6 |
| Other operating income | 5.9 | 5.5 | 87.2 | 52.5 | 9.5 |
| Operating expenses | -1,734.4 | -393.0 | -1,585.4 | -1,395.7 | -763.4 |
| Depreciation and impairment losses | -2.8 | -16.5 | -179.8 | -85.4 | -35.2 |
| Operating result | 26.0 | 17.9 | 7.8 | 64.0 | 73.4 |
| Items affecting comparability | -4.1 | -0.2 | 6.1 | 8.6 | 1.6 |
| Comparable operating result | 21.9 | 17.8 | 13.9 | 72.6 | 75.1 |
| % of sales | 1.2 | 4.2 | 0.8 | 4.9 | 8.7 |
Near-term outlook
The demand for wood will focus particularly on thinning stands, birch logs and roundwood from delivery sales. We will also buy regeneration felling as usual. In energy wood, the demand will focus on crown wood and small trees. Demand for forest management services is expected to remain strong.
The decline in market and central bank rates is not yet expected to boost construction activity in the last quarter of this year. However, demand for Kerto LVL products will continue to be good, and new customer relationships will support demand for Kerto LVL.
Demand for birch plywood exceeds supply despite the general economic recession. Demand in the German transport equipment segment will probably continue to be weaker than normal, but overall demand for birch plywood is expected to remain good nevertheless. The availability of birch logs still limits the production of birch plywood.
In the UK, demand for upgrading is expected to remain stable in the DIY segment but weaker than normal in the merchant customer segment and new construction in the coming months.
The average sales prices of market pulp decreased in October. In the fourth quarter, demand is expected to remain stable in Europe and North America. In China, demand has normalized after a very slow third quarter. Sawn timber demand and prices are estimated to remain at the current level.
The general demand for consumer products will continue to be influenced by the trend in consumers’ purchasing power and general purchasing behaviour. In the latter part of the year, demand for fresh fibre paperboards is expected to be affected by the seasonally weaker December. In October–December, paperboard delivery volumes are expected to decrease slightly from the previous quarter. Sales prices in local currencies are expected to remain stable.
The cost increase in the second and third quarters reduced margin levels in the tissue paper business from the previous good level. Measures to improve margins will continue. Demand for tissue and greaseproof papers is expected to remain stable.
METSÄ GROUP