Metsä Board Corporation Interim Report 1 January–30 September 2014, 5 November 2014 at 12:00 noon
Result for January–September 2014
• Sales were EUR 1,509.0 million (Q1–Q3/2013: 1,540.1).
• Operating result excluding non-recurring items was EUR 99.6 million (75.1). Operating result including non-recurring items was EUR 109.8 million (83.0).
• Result before taxes excluding non-recurring items was EUR 68.1 million (30.8). Result before taxes including non-recurring items was EUR 76.0 million (38.8).
• Earnings per share excluding non-recurring items were EUR 0.17 (0.08). Earnings per share including non-recurring items were EUR 0.19 (0.10).
Result for the third quarter of 2014
• Sales were EUR 513.8 million (Q2/2014: 494.0).
• Operating result excluding non-recurring items was EUR 35.2 million (28.3). Operating result including non-recurring items was EUR 34.1 million (32.2).
• Result before taxes excluding non-recurring items was EUR 27.3 million (20.0). Result before taxes including non-recurring items was EUR 26.1 million (23.9).
• Earnings per share excluding non-recurring items were EUR 0.07 (0.04). Earnings per share including non-recurring items were EUR 0.06 (0.05).
Events during the third quarter of 2014
• Paperboard deliveries continued to increase.
• The delivery volumes of paper and market pulp were at approximately the same level as in the previous quarter.
• No significant changes took place in the prices of paperboard and paper. The prices of market pulp deliveries increased slightly.
• Net debt decreased to EUR 491 million as a result of strong cash flow.
Events after the period
• Mika Joukio started as the CEO of Metsä Board on 1 October 2014.
“The third quarter of 2014 met our expectations, and our operating result improved from previous quarter.
Profitable growth in paperboard business is the main goal of our company. Paperboard deliveries continued to increase strongly in the third quarter, and the current total delivery volume for 2014 is approximately 10 per cent higher than at the same time in the previous year. The demand for Metsä Board’s folding boxboard and fresh forest fibre linerboard has been normal in Europe and very strong in North America. This year, our paperboard deliveries in North America have increased already by more than 30 per cent.
Our cash flow continued to be good in the third quarter, and our net debt decreased clearly.
Overall, our profitability and balance sheet structure have improved significantly in 2014. However, I still see much room for improvement. Our most important measures include increasing our paperboard business at good price levels and decreasing the unprofitable paper production.”
Mika Joukio, CEO
KEY FIGURES
| 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2013 | |
| Q3 | Q2 | Q1 | Q3 | Q1-Q3 | Q1-Q3 | Q1-Q4 | |
| Sales, EUR million | 513.8 | 494.0 | 501.2 | 502.3 | 1,509.0 | 1,540.1 | 2,019.3 |
| EBITDA, EUR million | 60.7 | 55.9 | 69.2 | 44.0 | 185.8 | 158.1 | 214.8 |
| excl. non-recurring items, EUR million | 61.8 | 52.0 | 61.8 | 43.6 | 175.6 | 152.5 | 208.0 |
| EBITDA, % | 11.8 | 11.3 | 13.8 | 8.8 | 12.3 | 10.3 | 10.6 |
| excl. non-recurring items, % | 12.0 | 10.5 | 12.3 | 8.7 | 11.6 | 9.9 | 10.3 |
| Operating result, EUR million | 34.1 | 32.2 | 43.5 | 19.3 | 109.8 | 83.0 | 113.6 |
| excl. non-recurring items, EUR million | 35.2 | 28.3 | 36.1 | 18.9 | 99.6 | 75.1 | 104.4 |
| EBIT, % | 6.6 | 6.5 | 8.7 | 3.8 | 7.3 | 5.4 | 5.6 |
| excl. non-recurring items, % | 6.9 | 5.7 | 7.2 | 3.8 | 6.6 | 4.9 | 5.2 |
| Result before taxes, EUR million | 26.1 | 23.9 | 26.0 | 9.0 | 76.0 | 38.8 | 57.8 |
| excl. non-recurring items, EUR million | 27.3 | 20.0 | 20.8 | 8.5 | 68.1 | 30.8 | 48.6 |
| Result for the period, EUR million | 20.8 | 16.8 | 24.8 | 7.3 | 62.4 | 32.9 | 64.1 |
| excl. non-recurring items, EUR million | 21.9 | 12.9 | 20.6 | 6.8 | 55.4 | 25.5 | 55.4 |
| Result per share, EUR | 0.06 | 0.05 | 0.08 | 0.02 | 0.19 | 0.10 | 0.19 |
| excl. non-recurring items, EUR | 0.07 | 0.04 | 0.06 | 0.02 | 0.17 | 0.08 | 0.17 |
| Return on equity, % | 9.8 | 8.0 | 11.6 | 3.6 | 9.8 | 5.2 | 7.5 |
| excl. non-recurring items, % | 10.4 | 6.1 | 9.6 | 3.3 | 8.7 | 4.1 | 6.5 |
| Return on capital employed, % | 9.0 | 8.5 | 11.2 | 5.1 | 9.6 | 6.8 | 7.0 |
| excl. non-recurring items, % | 9.2 | 7.5 | 9.9 | 4.9 | 8.9 | 6.2 | 6.4 |
| Equity ratio at end of period, % | 39.8 | 39.8 | 41.0 | 38.7 | 39.8 | 38.7 | 40.7 |
| Gearing ratio at end of period, % | 82 | 84 | 84 | 91 | 82 | 91 | 83 |
| Net gearing ratio at end of period, % | 57 | 65 | 69 | 75 | 57 | 75 | 70 |
| Shareholders' equity per share at end of period, EUR | 2.60 | 2.54 | 2.62 | 2.51 | 2.60 | 2.51 | 2.59 |
| Interest-bearing net liabilities, EUR million | 491.1 | 540.1 | 592.6 | 622.1 | 491.1 | 622.1 | 597.2 |
| Gross investments, EUR million | 7.3 | 14.0 | 4.7 | 16.0 | 26.0 | 46.7 | 66.9 |
| Deliveries, 1 000 tonnes | |||||||
| Cartonboard | 237 | 226 | 219 | 225 | 682 | 662 | 872 |
| Linerboard and Paper | 265 | 250 | 265 | 247 | 780 | 776 | 1,027 |
| Personnel at the end of period | 3,164 | 3,370 | 3,145 | 3,178 | 3,164 | 3,178 | 3,116 |
EBITDA = Earnings before interest, taxes, depreciation and impairment charges
The divestment of the holding in Metsä Group Treasury Oy in September 2013 improved Metsä Board’s equity ratio by approximately 5 percentage points and return on capital employed by almost 1 percentage point and reduced the company’s gross debt by more than EUR 300 million, compared to the actual figures for the second quarter of 2013.
Business environment and near-term outlook
Compared to the third quarter, the delivery volumes of folding boxboard and white-top fresh forest fibre linerboard are estimated to decrease in the fourth quarter of 2014, as December is a seasonally weaker month. No material changes in paperboard prices are in sight at the moment.
The delivery volume of paper in the fourth quarter is expected to be at approximately the same level as in the third quarter. The price of uncoated fine paper is expected to decrease slightly, and the average price of coated papers to remain unchanged.
The volume and average price of Metsä Board’s market pulp deliveries in the fourth quarter are expected to be at approximately the same level as in the third quarter.
No material changes in production costs are expected in the fourth quarter.
Over the past few months, the trend in foreign exchange rates has been favourable for Metsä Board. The duration of the company’s currency hedges is approximately six months. The recent changes in foreign exchange rates will thus not have a material effect on the operating result for the fourth quarter of 2014.
Metsä Board’s operating result excluding non-recurring items is in the fourth quarter of 2014 expected to be roughly at the same level as in the third quarter of 2014.
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 2014 enclosed to this stock exchange release. Metsä Board's complete Financial Statements 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
More information:
Markus Holm, 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 from 1 p.m. on 5 November 2014. A conference call for investors and analysts will be held in English at 3 p.m. (EET). Conference call participants are requested to dial in and register a few minutes earlier on the following numbers:
Europe: +44 (0)20 7162 0025
USA: +1 334 323 6201
The conference ID is 948479.
Metsä Board is Europe’s leading producer of folding boxboard, the world’s leading manufacturer of coated white-top fresh forest fibre 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 2013, the company’s sales totalled approximately EUR 2.0 billion. The company has approximately 3,100 employees.
