Metsä Board Corporation Interim Report 1 January – 30 September 2013, 6 November 2013 at 12:00 noon
Result for January–September 2013
- Sales were EUR 1,540.1 million (Q1–Q3/2012: 1,599.1).
- The operating result excluding non-recurring items was EUR 75.1 million (51.4). The operating result including non-recurring items was EUR 83.0 million (181.8).
- The result before taxes excluding non-recurring items was EUR 30.8 million (18.3). The result before taxes including non-recurring items EUR 38.8 million (148.7).
- Earnings per share excluding non-recurring items were EUR 0.08 (0.05) and including non-recurring items EUR 0.10 (0.41).
Result for the third quarter of 2013
- Sales were EUR 502.3 million (Q2/2013: 502.8).
- The operating result excluding non-recurring items was EUR 18.9 million (26.0). The operating result including non-recurring items was EUR 19.3 million (28.9).
- The result before taxes excluding non-recurring items was EUR 8.5 million (18.5). The result before taxes including non-recurring items EUR 9.0 million (21.3).
- Earnings per share excluding non-recurring items were EUR 0.02 (0.05) and including non-recurring items EUR 0.02 (0.06).
Events in the third quarter of 2013
- Folding boxboard and kraftliner delivery volumes increased slightly in the third quarter. Metsä Board announced a folding boxboard price increase in Europe as of 14 October 2013.
- The new Modo Northern Light kraftliner produced at the Husum mill was introduced, and its delivery volume increased according to plan.
- The extensive maintenance shutdowns at the integrated Husum and Kemi mills were carried out as planned.
- The market situation for papers continued to be weak in Europe.
- Metsä Board sold its 51 per cent holding in Metsä Group Treasury Oy to Metsäliitto Cooperative for approximately EUR 5 million.
- Markus Holm was appointed Metsä Board's CFO and member of the Corporate Management Board as of 1 January 2014.
Events after the period
- Metsä Board announced that it will renew its management and reporting structure. As of the first quarter of 2014, the company’s reporting segments will be Cartonboard, and Linerboard and Paper. Ari Kiviranta was appointed SVP, Head of Cartonboard business area and Seppo Puotinen SVP, Head of Linerboard and Paper business area.
“The situation in our Paperboard business continues to be good. Metsä Board's paperboard deliveries have grown by nearly 10 per cent this year, compared to the corresponding period last year, although growth in demand for consumer goods has been very slow in the key markets.
Our third-quarter profitability was, as expected, weaker than in the previous quarter due to the extensive planned maintenance shutdowns at the integrated Husum and Kemi mills. Folding boxboard and kraftliner deliveries continued to increase slightly in the third quarter. We are currently increasing folding boxboard prices in Europe.
The market has welcomed the new kraftliners from Husum and their delivery volumes have grown as planned. No improvement is in sight in the European paper market, which is why it is increasingly important for us to be able to substitute new products for Husum mill’s weakest paper volumes and thus improve the mill's profitability.”
Mikko Helander, CEO
Adoption of the amended IAS 19 standard
Metsä Board adopted the amended IAS 19 Employee Benefits standard retroactively on 1 January 2013. The most significant changes included the following: all actuarial profits and losses are recognised immediately, and the financial cost of retirement plans is determined on the basis of net funding.
The Group's equity decreased by approximately EUR 10.6 million due to the amendment on 31 December 2012. The 2012 operating result improved by EUR 1.4 million and financial expenses increased by EUR 3.2 million.
The impact on the balance sheet and the statement of comprehensive income is discussed in greater detail in the Notes (Note 1).
The amended key figures are presented in the Key Figures table (Key Figures, restated).
| KEY FIGURES, restate | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | 2012 | ||
| Q3 | Q2 | Q1 | Q3 | Q1-Q3 | Q1-Q3 | Q1-Q4 | |||
| Sales, EUR million | 502.3 | 502.8 | 535.0 | 532.3 | 1,540.1 | 1,599.1 | 2,107.6 | ||
| EBITDA, EUR million | 44.0 | 52.7 | 61.4 | 52.0 | 158.1 | 267.6 | 321.4 | ||
| excl. non-recurring items, EUR million | 43.6 | 52.1 | 56.8 | 54.0 | 152.5 | 137.0 | 186.0 | ||
| EBITDA, % | 8.8 | 10.5 | 11.5 | 9.8 | 10.3 | 16.7 | 15.3 | ||
| excl. non-recurring items, % | 8.7 | 10.4 | 10.6 | 10.1 | 9.9 | 8.6 | 8.8 | ||
| Operating result, EUR million | 19.3 | 28.9 | 34.8 | 23.4 | 83.0 | 181.8 | 221.1 | ||
| excl. non-recurring items, EUR million | 18.9 | 26.0 | 30.2 | 25.5 | 75.1 | 51.4 | 74.9 | ||
| EBIT, % | 3.8 | 5.7 | 6.5 | 4.4 | 5.4 | 11.4 | 10.5 | ||
| excl. non-recurring items, % | 3.8 | 5.2 | 5.6 | 4.8 | 4.9 | 3.2 | 3.6 | ||
| Result before taxes, EUR million | 9.0 | 21.3 | 8.5 | 7.8 | 38.8 | 148.7 | 173.9 | ||
| excl. non-recurring items, EUR million | 8.5 | 18.5 | 3.9 | 9.9 | 30.8 | 18.3 | 27.7 | ||
| Result for the period, EUR million | 7.3 | 17.6 | 8.0 | 7.9 | 32.9 | 133.1 | 171.3 | ||
| excl. non-recurring items, EUR million | 6.8 | 15.3 | 3.4 | 9.9 | 25.5 | 18.2 | 42.4 | ||
| Result per share, EUR | 0.02 | 0.06 | 0.02 | 0.03 | 0.10 | 0.41 | 0.52 | ||
| excl. non-recurring items, EUR | 0.02 | 0.05 | 0.01 | 0.03 | 0.08 | 0.05 | 0.13 | ||
| Return on equity, % | 3.6 | 8.5 | 3.8 | 3.9 | 5.2 | 22.7 | 21.5 | ||
| excl. non-recurring items, % | 3.3 | 7.4 | 1.6 | 4.8 | 4.1 | 3.1 | 5.3 | ||
| Return on capital employed, % | 5.1 | 6.7 | 7.7 | 5.4 | 6.8 | 13.5 | 12.4 | ||
| excl. non-recurring items, % | 4.9 | 6.1 | 6.8 | 5.8 | 6.2 | 4.4 | 4.8 | ||
| Equity ratio at end of period, % | 38.7 | 32.4 | 33.3 | 31.2 | 38.7 | 31.2 | 33.2 | ||
| Gearing ratio at end of period, % | 91 | 130 | 122 | 138 | 91 | 138 | 130 | ||
| Net gearing ratio at end of period, % | 75 | 74 | 69 | 70 | 75 | 70 | 73 | ||
|
Shareholders' equity per share at end of period, EUR |
2.51 | 2.48 | 2.54 | 2.51 | 2.51 | 2.51 | 2.59 | ||
| Interest-bearing net liabilities, EUR million | 622.1 | 605.9 | 577.6 | 580.1 | 622.1 | 580.1 | 625.2 | ||
| Gross investments, EUR million | 16.0 | 21.5 | 9.2 | 10.7 | 46.7 | 37.9 | 66.1 | ||
| Deliveries, 1 000 tonnes | |||||||||
| Paperboard | 313 | 311 | 311 | 306 | 935 | 890 | 1,188 | ||
| Paper | 159 | 158 | 186 | 169 | 503 | 519 | 681 | ||
| Personnel at the end of period | 3,178 | 3,401 | 3,239 | 3,337 | 3,178 | 3,337 | 3,279 | ||
| Deliveries are not comparable due to restructuring. | |||||||||
| EBITDA = Earnings before interest, taxes, depreciation and impairment charges | |||||||||
The divestment of the holding in Metsä Group Treasury Oy improved Metsä Board's equity ratio by approximately 5 percentage points and return on capital employed by nearly 1 percentage point, as well as decreased the company's gross debt by more than EUR 300 million, compared to the actual figures of the second quarter of 2013. More information on the divestment is provided in the section ‘Structural changes’ of the interim report.
Near-term outlook
Metsä Board’s paperboard deliveries have increased by nearly 10 per cent this year, compared to the corresponding period last year, although growth in the demand for consumer goods in the main markets has been very slow.
In the last quarter of 2013, paperboard delivery volumes are estimated to decrease slightly from the previous quarter, mainly due to seasonal factors in December. Metsä Board has announced that it will increase the prices of folding boxboard by approximately EUR 70 per tonne in Europe during the last quarter of the year. The intention is to also include the price increases in the next year’s annual contracts which are currently being negotiated and which cover approximately 60 per cent of the folding boxboard deliveries for the entire year. No significant changes in the average price level of white-top kraftliner are in sight.
Delivery volumes of uncoated fine paper are estimated to increase slightly in the last quarter of 2013 and delivery volumes of coated paper are expected to be at approximately the same level as in the previous quarter. No significant changes in the price of uncoated fine paper or coated paper are in sight.
Delivery volumes of market pulp in the last quarter of 2013 are expected to be at approximately the same level as in the previous quarter. The USD-denominated average price of long-fibre pulp is estimated to increase slightly, but the price of short-fibre pulp is expected to decrease somewhat in the last quarter of the year.
Production costs in the last quarter of 2013 are expected to be at approximately the same level as in the previous quarter.
Metsä Board’s operating result, excluding non-recurring items, is in the last quarter of 2013 expected to improve from the third quarter of 2013.
Disclosure procedure
Metsä Board Corporation follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority and hereby publishes its Interim Report for January–September 2013 enclosed to this stock exchange release. Metsä Board's complete Interim Report is attached to this release in pdf-format and is also available on the company's web site at www.metsaboard.com.
METSÄ BOARD CORPORATION
Further information:
Matti Mörsky, CFO, tel. +358 (0)10 465 4913
Juha Laine, Vice President, Investor Relations and Communications, tel. +358 (0)10 465 4335
More information will be available starting from 1 p.m. on 6 November 2013. A conference call held in English for investors and analysts starts at 3 p.m. (EET). Conference call participants are requested to dial in and register a few minutes prior to the start of the conference call on the following numbers:
Europe: +44 (0)20 7162 0025
US: +1-334-323-6201
The conference ID is 937551.
Metsä Board is Europe’s leading producer of folding boxboard, the world’s leading manufacturer of coated white-top kraftliners and a major paper supplier. It offers premium solutions for consumer and retail packaging, graphics and office end-uses. The company’s sales network serves brand owners, carton printers, corrugated packaging manufacturers, printers, merchants and office suppliers. Metsä Board is part of Metsä Group and its shares are listed on the NASDAQ OMX Helsinki. In 2012, the company’s sales totalled approximately EUR 2.1 billion. The company has approximately 3,300 employees.
www.metsaboard.com
