Metsä Board published its interim report for January–March 2016 on 3 May 2016. On the release in English, some words were missing in one sentence in the first paragraph under the section Near-term outlook. Below is the corrected version of the release.
Metsä Board's interim report
January–March 2016 (1–3/2015)
• Sales amounted to EUR 435.6 million (525.7).
• Operating result excluding non-recurring items was EUR 35.0 million (43.2), or 8.0 per cent of sales. Operating result including non-recurring items was EUR 32.7 million (43.1).
• Result before taxes excluding non-recurring items was EUR 30.0 million (32.3). Result before taxes including non-recurring items was EUR 27.7 million (32.2).
• Earnings per share excluding non-recurring items were EUR 0.07 (0.09), and earnings per share including non-recurring items were EUR 0.07 (0.09).
Events in January–March 2016
•The demand for paperboards remained at a good level in Europe and the Americas. Price levels were stable.
• The new folding boxboard production line at Husum in Sweden started up in February, slightly behind the original schedule. The company will market the production line’s annual volume of 400,000 tonnes to the Americas and for food service packaging, such as cups, plates and trays, globally.
• Standard & Poor’s Ratings Services raised Metsä Board Corporation's credit rating by one notch from BB to BB+. The rating outlook was raised from stable to positive.
• Metsä Board’s Annual General Meeting was held at Finlandia Hall on 23 March 2016. AGM decided to distribute a dividend of EUR 0.17 per share for the 2015 financial period. The dividend payment date was 5 April 2016.
Events after the review period
• Metsä Board announced it would increase the price of white fresh forest fibre linerboard by EUR 50 per tonne in Europe. The price increase will take effect on 16 May 2016.
• Metsä Board announced to initiate efficiency improvement programme in Husum integrate in Sweden. The efficiency improvement programme targets minimum of EUR 10 million annual cost savings.
Profit guidance for April–June 2016
Metsä Board’s operating result excluding non-recurring items in the second quarter of 2016 is expected to remain roughly on the same level as in the first quarter of 2016.
Mika Joukio, CEO:
“The result for January–March was at the same level as in the last quarter. Our result was weakened, as expected, by the start-up of the new folding boxboard production line at Husum in Sweden, which is why the production volumes of pulp and paperboard there were low. We expect these factors to have an impact still on the second quarter result, and we keep our guidance the same as in the previous quarter.
Total paperboard deliveries increased from the previous quarter, and the price levels remained stable. In Finland, our paperboard mills were operating at full speed. The demand for lightweight and ecological folding boxboard remained strong in Europe and the Americas.
Exit from the unprofitable paper business reduced our sales considerably in the review period. We estimate that the remaining fine paper production will end completely this year. Our sales are expected to return to a growth path in the next quarter, as our paperboard deliveries will increase along with the new capacity. Our cash flow was weakened by the investment programme at Husum and the changes in working capital. Despite the increase in interest-bearing net debt, our balance sheet remained strong.
The required quality targets for the new folding boxboard at Husum have already been met, and the production volumes are increasing. The first paperboard deliveries to the United States have arrived. Our target is to sell approximately 200,000 tonnes of the new folding boxboard primarily to the Americas and for food service packaging globally in 2016.
After the review period we announced to launch efficiency improvement programme at Husum integrate. We target at least EUR 10 million annual cost savings by harmonising operating methods and eliminating overlaps at the integrate. We expect the impacts to be evident already this year.”
| KEY FIGURES | ||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | 2015 | |
| Q1 | Q4 | Q3 | Q2 | Q1 | Q1–Q4 | |
| Sales, EUR million | 435.6 | 462.2 | 497.6 | 522.0 | 525.7 | 2 007.5 |
| EBITDA, EUR million | 55.5 | 59.1 | 80.8 | 93.3 | 69.3 | 302.5 |
| excl. non-recurring items, EUR million | 57.8 | 59.7 | 80.8 | 73.1 | 69.7 | 283.3 |
| EBITDA, % | 12.7 | 12.8 | 16.2 | 17.9 | 13.2 | 15.1 |
| excl. non-recurring items, % | 13.3 | 12.9 | 16.2 | 14.0 | 13.3 | 14.1 |
| Operating result, EUR million | 32.7 | 34.1 | 54.6 | 67.2 | 43.1 | 199.0 |
| excl. non-recurring items, EUR million | 35.0 | 35.1 | 54.6 | 47.0 | 43.2 | 179.9 |
| EBIT, % | 7.5 | 7.4 | 11.0 | 12.9 | 8.2 | 9.9 |
| excl. non-recurring items, % | 8.0 | 7.6 | 11.0 | 9.0 | 8.2 | 9.0 |
| Result before taxes, EUR million | 27.7 | 29.4 | 47.5 | 58.0 | 32.2 | 167.1 |
| excl. non-recurring items, EUR million | 30.0 | 30.4 | 47.5 | 40.0 | 32.3 | 150.2 |
| Result for the period, EUR million | 23.9 | 26.5 | 26.8 | 54.7 | 29.3 | 137.3 |
| excl. non-recurring items, EUR million | 25.7 | 27.5 | 26.4 | 36.9 | 29.4 | 120.2 |
| Result per share, EUR | 0.07 | 0.07 | 0.08 | 0.15 | 0.09 | 0.39 |
| excl. non-recurring items, EUR | 0.07 | 0.07 | 0.08 | 0.10 | 0.09 | 0.34 |
| Return on equity, % | 9.5 | 10.4 | 10.6 | 22.5 | 13.2 | 14.7 |
| excl. non-recurring items, % | 10.2 | 10.8 | 10.4 | 15.2 | 13.2 | 12.9 |
| Return on capital employed, % | 7.8 | 8.1 | 13.0 | 16.5 | 11.0 | 12.5 |
| excl. non-recurring items, % | 8.3 | 8.3 | 13.0 | 11.6 | 11.0 | 11.3 |
| Equity ratio at end of period, % | 44.4 | 46.5 | 45.6 | 45.9 | 40.8 | 46.5 |
| Gearing ratio at end of period, % | 70 | 64 | 66 | 67 | 73 | 64 |
| Net gearing ratio at end of period, % | 42 | 32 | 34 | 39 | 34 | 32 |
| Shareholders' equity per share at end of period, EUR | 2.77 | 2.89 | 2.86 | 2.83 | 2.63 | 2.89 |
| Interest-bearing net liabilities, EUR million | 412.3 | 333.4 | 344.2 | 389.0 | 318.9 | 333.4 |
| Gross investments, EUR million | 54.3 | 60.8 | 44.8 | 48.3 | 23.9 | 177.8 |
| Net cash flow from operating activities, EUR million | -22.3 | 65.9 | 92.5 | 55.8 | 32.5 | 246.7 |
| Deliveries, 1,000 tonnes | ||||||
| Paperboard | 378 | 365 | 373 | 366 | 345 | 1,449 |
| Non-core operations | 15 | 65 | 118 | 138 | 156 | 478 |
| Personnel at the end of period | 2,573 | 2,601 | 2,642 | 2,850 | 3,158 | 2,601 |
| EBITDA = Earnings before interest, taxes, depreciation and impairment charges | ||||||
Near-term outlook
Metsä Board's paperboard deliveries are expected to grow in April–June from the first quarter of 2016. Also, sales are expected to return to growth. The start-up phase and start-up volumes of the new folding boxboard machine will have an impact on the second quarter result. In addition, the result is weakened by more significant maintenance shutdowns compared to first quarter.
Total production costs in April–June are expected to remain at approximately the level of the first quarter of 2016.
Demand for paperboard is expected to remain stable in both Europe and the Americas. The market prices of folding boxboard and white fresh forest fibre linerboard are expected to remain stable.
The global demand for and supply of long- and short-fibre pulp is expected to remain stable.
The company estimates that the full production capacity of Husum’s new folding boxboard production machine will be reached by the end of 2016. The target is to sell approximately 200,000 tonnes of the new folding boxboard from Husum to the Americas and for food service packaging globally in 2016.
Metsä Board’s operating result excluding non-recurring items in the second quarter of 2016 is expected to remain roughly on the same level as in the first quarter of 2016.
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–March 2016 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
More information:
Markus Holm, CFO, tel. +358 (0)10 465 4913
Katri Sundström, Head of Investor Relations, tel. +358 (0)400 976 333
Metsä Board is a leading European producer of folding boxboards and white linerboards made from fresh forest fibres. Its lightweight paperboards are developed as the perfect fit for consumer goods, retail-ready and food service packaging. The pure fresh forest fibres Metsä Board uses are a renewable resource, traceable to origin in northern forests.
The global sales network of Metsä Board supports customers worldwide, including brand owners, converters and merchants. In 2015, the company’s sales totalled EUR 2.0 billion, and it has approximately 2,600 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.
