Metsä Group Financial Statements 1 January–31 December 2015, 3 February 2016 at 12.00 noon EET
Result for 2015
• Sales were EUR 5,016 million (1–12/2014: EUR 4,970 million).
• Operating result excluding non-recurring items was EUR 537 million (418). Operating result including non-recurring items was EUR 542 million (417).
• Result before taxes excluding non-recurring items was EUR 466 million (339). Result before taxes including non-recurring items was EUR 468 million (330).
• Return on capital employed excluding non-recurring items was 13.6 per cent (11.4). Return on capital employed excluding non-recurring items and excluding assets under construction related to strategic investment projects was 14.3 per cent (11.4).
• Cash flow from operations was EUR 964 million (764).
Result for October–December 2015
• Sales were EUR 1,205 million (10–12/2014: EUR 1,248 million).
• Operating result excluding non-recurring items was EUR 123 million (117). Operating result including non-recurring items was EUR 128 million (84).
• Result before taxes excluding non-recurring items was EUR 108 million (101). Result before taxes including non-recurring items was EUR 113 million (68).
• Return on capital employed excluding non-recurring items was 12.3 per cent (12.0). Return on capital employed excluding non-recurring items and excluding assets under construction related to strategic investment projects was 13.2 per cent (12.0).
• Cash flow from operations was EUR 338 million (390).
Events during the fourth quarter of 2015
• Pulp delivery volumes were strong. The euro-denominated prices of softwood pulp decreased slightly from the previous quarter.
• Paperboard deliveries decreased slightly on a seasonal basis. Paperboard price levels were stable.
• Metsä Board began the installation of the new paperboard machine at the Husum mill in Sweden.
• The construction of Metsä Fibre's bioproduct mill in Äänekoski progressed according to plan.
• Metsä Board announced it would expand its range of paperboard for food service packaging by investing EUR 38 million in extrusion coating at the Husum mill in Sweden.
• The sale of the share capital of Metsä Wood's French timber upgrading company, Metsä Wood France SAS, to mutares AG was completed on 5 October 2015.
Near-term outlook
Metsä Group’s operating result excluding non-recurring items is in the first quarter of 2016 expected to be approximately on the same level as in the fourth quarter of 2015.
President & CEO Kari Jordan:
“Metsä Group’s business operations developed favourably in 2015. Our sales grew, and operating result excluding non-recurring items was markedly better than in 2014. Our cash flow was at a good level and balance sheet strenghtened. Our profit-making ability showed an upward trend during the year, with the exception of the impact of the investment and maintenance shutdowns in the last quarter. We benefitted from exchange rate changes to some extent, but our stronger performance was based above all on our long-term work to improve efficiency and profitability.
We started the construction of the next-generation bioproduct mill in Äänekoski in the spring 2015. The mill will use 6.5 million cubic metres of wood annually and it produces 1.3 million tonnes of pulp as well as other bioproducts. This investment of EUR 1.2 billion is important for the Finnish national economy as a whole, and it strengthens Metsä Group's long-term profitability and competitiveness. The construction of the bioproduct mill has progressed well, and we are determinedly proceeding towards the third quarter of 2017, when the mill will start operations.
Metsä Board's transformation from a paper company to a leading paperboard company, launched in 2005, was completed. The Husum mill’s EUR 170 million investment programme has been completed and the new folding boxboard production line is in a start-up phase. The remaining printing paper production at Husum and the entire Metsä Group came to an end almost in its entirety at the end of 2015.”
METSÄ GROUP
Key figures
| 2015 | 2014 | 2015 | 2014 | |
| Income statement, EUR million | 1–12 | 1–12 | 10–12 | 10–12 |
| Sales | 5 016.0 | 4 970.3 | 1 205.4 | 1 247.5 |
| Other operating income | 95.7 | 170.3 | 16.9 | 29.2 |
| Operating expenses | -4 311.4 | -4 447.5 | -1 033.8 | -1 105.2 |
| Depreciation and impairment losses | -258.2 | -276.2 | -60.3 | -87.4 |
| Operating result | 542.1 | 416.9 | 128.2 | 84.1 |
|
Share of results from associated companies and joint ventures |
11.2 | 16.4 | 2.7 | 1.9 |
| Exchange gains and losses | -1.2 | 2.7 | 2.6 | 3.9 |
| Other net financial items | -83.8 | -106.1 | -20.1 | -22.4 |
| Result before income tax | 468.4 | 329.9 | 113.4 | 67.6 |
| Income tax | -112.6 | -69.7 | -21.2 | -11.1 |
| Result for the period | 355.7 | 260.3 | 92.2 | 56.5 |
| 2015 | 2014 | 2015 | 2014 | |
| Profitability | 1–12 | 1–12 | 10–12 | 10–12 |
| Operating result, EUR million | 542.1 | 416.9 | 128.2 | 84.1 |
| - ” -, excluding non-recurring items | 537.4 | 418.1 | 122.7 | 117.3 |
| - ” -, % of sales | 10.7 | 8.4 | 10.2 | 9.4 |
| Return on capital employed, % | 13.7 | 11.1 | 12.9 | 8.7 |
| - ” -, excluding non-recurring items | 13.6 | 11.4 | 12.3 | 12.0 |
| Return on equity, % | 15.9 | 13.0 | 15.5 | 11.1 |
| - ” -, excluding non-recurring items | 15.8 | 13.4 | 14.6 | 17.6 |
| 2015 | 2014 | 2015 | 2014 | |
| Financial position | 31.12. | 31.12. | 30.9. | 30.9. |
| Equity ratio, % | 43.2 | 37.9 | 42.7 | 38.5 |
| Net gearing ratio, % | 25 | 46 | 29 | 62 |
| Interest-bearing net liabilities, EUR million | 610 | 938 | 682 | 1 258 |
SEGMENTS
|
Sales and Operating result 1–12/2015, EUR million |
Wood Supply and Forest Services |
Wood Products Industry |
Pulp Industry |
Paperboard Industry |
Tissue and Cooking Papers |
| Sales | 1 518.1 | 852.2 | 1 444.6 | 2 007.5 | 1 015.8 |
| Other operating income | 7.4 | 8.4 | 15.9 | 47.7 | 4.8 |
| Operating expenses | -1 493,1 | -820.3 | -1 060.2 | -1 752.8 | -938.5 |
|
Depreciation and impairment losses |
-3.5 | -30.4 | -63.1 | -103.5 | -40.5 |
| Operating result | 29.0 | 10.0 | 337.2 | 199.0 | 41.6 |
| Non-recurring items | - | 21.4 | - | -19.2 | 13.5 |
|
Operating result excluding non-recurring items |
29.0 | 31.4 | 337.2 | 179.9 | 55.1 |
| - " -, % of sales | 1.9 | 3.7 | 23.3 | 9.0 | 5.4 |
Near-term outlook
Wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms of energy wood, on crown wood. The sales of forest management services are expected to grow.
Metsä Wood’s sales are expected to be on a similar level as previous year’s first quarter. In the first quarter, the sawn timber market balance is expected to improve for spruce sawn timber. For pine sawn timber, oversupply is expected to continue due to weak demand in the EMEA sales region. Shutdowns are possible in birch plywood production, depending on the market situation. Demand for other wood products is expected to continue stable.
The global economic uncertainty and changes in the currency market will impact Metsä Fibre's operating environment. Nevertheless, global demand for pulp has remained stable, and there are no signs of material changes in the market situation.
Metsä Board's paperboard deliveries are in January–March expected to grow from the last quarter of 2015. The new paperboard production line at Husum, still in the start-up phase, will have the effect of decreasing the average price of folding boxboard. The company estimates that the required quality targets will be reached by the third quarter of 2016 according to the original plan.
In the tissue and cooking paper markets, demand is expected to continue stable in all market areas. Demand for tissue paper will increase in eastern Central Europe, in particular, and demand for cooking papers will grow in Asia.
Metsä Group’s operating result excluding non-recurring items is in the first quarter of 2016 expected to be approximately on the same level as in the fourth quarter of 2015.
Disclosure procedure
Metsä Group follows the disclosure procedure enabled by the Financial Supervisory Authority’s Standard 5.2b. This release is a summary of Metsä Group's Financial Statements Bulletin for 2015. The complete Financial Statements Bulletin is attached to this Stock Exchange Release in pdf format and is available on the Group’s website at www.metsagroup.com.
METSÄ GROUP
For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0)10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 (0)10 465 4541
Metsä Group will publish its financial reports in 2016 as follows:
3 May 2016: Interim report for January–March 2016
4 August 2016: Interim report for January–June 2016
2 November 2016: Interim report for January–September 2016
www.metsagroup.com
Metsä Group is a responsible forest industry group whose products’ main raw material is renewable wood from sustainably managed northern forests. Metsä Group is a forerunner in the bioeconomy. We focus on tissue and cooking papers, fresh forest fibre paper-boards, pulp, wood products, and wood supply and forest services. Our high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group’s sales totalled EUR 5 billion in 2015, and the company employs approximately 9,600 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 116,000 Finnish forest owners.
