Metsä Board’s comparable operating result in January–September 2017 was EUR 139 million
January–September 2017 (1–9/2016) Sales were EUR 1,397.3 million (1,298.5). Comparable operating result was EUR 139.1 million (104.7), or 10.0 per cent (8.1) of sales. The operating result was EUR 152.7 million (93.8). Comparable earnings per share were EUR 0.27 (0.21), and earnings per share were EUR 0.30 (0.18).
Metsä Board Corporation Interim Report 1 January – 30 September 2017, 1 November 2017 at 12:00 noon
January–September 2017 (1–9/2016)
• Sales were EUR 1,397.3 million (1,298.5).
• Comparable operating result was EUR 139.1 million (104.7), or 10.0 per cent (8.1) of sales. The operating result was EUR 152.7 million (93.8).
• Comparable earnings per share were EUR 0.27 (0.21), and earnings per share were EUR 0.30 (0.18).
• Comparable return on capital employed was 10.6 per cent (8.3).
July–September 2017 (4–6/2017)
• Sales were EUR 478.6 million (474.2).
• Comparable operating result was EUR 50.4 million (43.5), or 10.5 per cent (9.2) of sales. The operating result was EUR 60.6 million (46.9).
• Comparable earnings per share were EUR 0.08 (0.09), and earnings per share were EUR 0.11 (0.09).
• Comparable return on capital employed was 11.5 per cent (10.3).
Events in July–September 2017
• Demand for packaging materials made from fresh fibre was at a good level in Metsä Board’s main market areas.
• Market prices in local currencies remained stable or rose slightly. Metsä Board announced an increase in the price of white fresh fibre linerboard in Europe of EUR 50 per tonne (as of 15 September 2017) and in the price of folding boxboard of EUR 90 per tonne (as of 1 November 2017).
• Metsä Board’s paperboard deliveries remained roughly at the level of the previous quarter. Geographic sales mix improved the average price of folding boxboard.
• Net cash flow from operations was strong at EUR 67.5 million (4–6/2017: 37.1).
• Metsä Fibre’s new bioproduct mill started up according to plan in August.
• Metsä Board issued an unsecured bond of EUR 250 million maturing in 2027.
Events after the review period
Metsä Board was once again recognized as a global leader in terms of its responsible water consumption and measures to mitigate the effects of climate change. The company was included on CDP’s Water A and Climate A lists, and achieved Leadership status in CDP’s Forest programme.
Result guidance for October–December 2017
Mainly due to the maintenance shutdown at the Husum integrated mill, Metsä Board’s comparable operating result in the fourth quarter of 2017 is expected to weaken slightly from the third quarter of 2017.
Metsä Board’s CEO Mika Joukio:
“Third quarter developed according to our expectations. Paperboard delivery volumes remained roughly at the level of the previous quarter, but our comparable operating result improved by 16 per cent. The result improved due to an increase in average paperboard prices as well as the higher production volumes of pulp and paperboard. Cash flow from operations was strong due to the improved result and release in working capital. Our associated company Metsä Fibre’s new bioproduct mill at Äänekoski started up according to plan in August, and pulp deliveries to customers started at the beginning of September.
Demand for packaging materials made from fresh fibre has remained strong, and market prices in local currencies have increased, particularly in white fresh fibre linerboard. The growth in demand has also been visible in the order books of our paperboard mills, which are now clearly higher than before.
The annual maintenance shutdown at the Husum integrated mill after the review period resulted in losses, particularly in the production and sales of pulp. The total delivery volumes of paperboard will also decline slightly for seasonal reasons towards the end of the year. Due to these reasons, we expect the fourth quarter results to weaken slightly.
We aim to further improve the average price of folding boxboard, production efficiency and profitability at the Husum mill. We estimate that the 2019 operating result of the Husum mill will be EUR 100 million better than in 2016.
Metsä Board’s strategy is clear: we focus on high-quality, light and ecological fresh fibre paperboards in growing markets. We develop our products and services in cooperation with our customers to gain an even stronger market position. Thanks to our skilled and competent personnel, I am confident about the company’s development.”
FINANCIAL KEY FIGURES
|Q3||Q2||Q1||Q3||Q1 –Q3||Q1 –Q3||Q1–Q4|
|Sales, EUR million||478.6||474.2||444.5||440.0||1,397.3||1,298.5||1,720.3|
|EBITDA, EUR million||85.2||67.0||68.8||60.6||220.9||175.7||234.6|
|comparable, EUR million||75.0||67.5||68.8||59.4||211.2||178.0||231.1|
|EBITDA, % of sales||17.8||14.1||15.5||13.8||15.8||13.5||13.6|
|comparable, % of sales||15.7||14.2||15.5||13.5||15.1||13.7||13.4|
|Operating result, EUR million||60.6||46.9||45.2||26.6||152.7||93.8||132.3|
|comparable, EUR million||50.4||43.5||45.2||34.0||139.1||104.7||137.5|
|Operating result, % of sales||12.7||9.9||10.2||6.0||10.9||7.2||7.7|
|comparable, % of sales||10.5||9.2||10.2||7.7||10.0||8.1||8.0|
|Result before taxes, EUR million||43.8||40.3||39.9||19.8||124.0||73.0||101.6|
|comparable, EUR million||33.5||36.9||39.9||27.1||110.3||84.0||106.8|
|Result for the period, EUR million||39.3||35.0||34.2||18.6||108.4||65.7||90.4|
|comparable, EUR million||29.0||32.2||34.2||24.1||95.4||74.4||93.6|
|Result per share, EUR||0.11||0.09||0.10||0.05||0.30||0.18||0.25|
|Return on equity, %||14.2||13.2||13.1||7.4||13.3||8.6||8.7|
|Return on capital employed, %||13.9||11.1||10.6||6.3||11.7||7.4||7.8|
|Equity ratio at end of period, %||51||51||47||48||51||48||48|
|Net gearing ratio at end of period, %||39||45||44||49||39||49||44|
|Interest-bearing net liabilities/EBITDA1)||1.7||2.0||1.9||2.1||1.7||2.1||2.0|
|Shareholders' equity per share at end of period, EUR||3.14||3.06||2.90||2.82||3.14||2.82||2.96|
|Interest-bearing net liabilities, EUR million||436.9||495.2||457.8||487.6||436.9||487.6||463.8|
|Gross investments, EUR million||7.3||12.4||19.0||16.4||38.7||119.0||162.4|
|Net cash flow from operating activities, EUR million||67.5||37.1||25.6||67.0||130.2||22.5||77.0|
|Personnel at the end of period||2,369||2,581||2,450||2,493||2,369||2,493||2,466|
Growth in the demand for high-quality consumer packaging paperboard made from fresh fibre is expected to continue in market areas important for Metsä Board. Linerboard prices have already increased, and the impact of the announced price increases in consumer packaging board is expected to be visible mainly in early 2018.
Metsä Board’s paperboard deliveries have grown strongly in 2017. Delivery volumes in October–December are expected to decline slightly compared to the previous quarter, due to the seasonal decline in December. The company aims to improve the average price of Husum’s folding boxboard and increase sales particularly in North America.
The fourth quarter production volume of Metsä Fibre’s new bioproduct mill is expected to be higher than the average three-month production of Äänekoski’s closed-down pulp mill. The bioproduct mill’s impact on Metsä Board’s fourth quarter operating result is expected to be positive.
The annual maintenance shutdown at the Husum integrated mill in October will have a remarkable negative impact on fourth quarter result.
The production costs of paperboards in October–December are expected to remain at the level of the previous quarter.
The positive result impact from the hedging of the US dollar will dilute towards the end of the year.
METSÄ BOARD CORPORATION
Espoo, Finland, 1 November 2017
BOARD OF DIRECTORS
Jussi Noponen, CFO, tel. +358 10 465 4913
Katri Sundström, Head of Investor Relations, tel. +358 400 976 333
Further information will be available as of 1 p.m. on 1 November 2017. A conference call held for investors and analysts in English will begin at 3 p.m. Conference call participants are requested to dial in and register a few minutes earlier on the following numbers:
Finland +358 9 7479 0404
Sweden +46 8 5065 3942
United Kingdom +44 330 336 9411
United States +1 719-457-1036
The conference ID is 6378283.
Metsä Board is a leading European producer of premium fresh fibre paperboards including folding boxboards, food service boards and white kraftliners. Our lightweight paperboards are developed to provide better, safer and more sustainable solutions for consumer goods as well as retail-ready and food service applications. We work together with our customers on a global scale to innovate solutions for better consumer experiences with less environmental impact. The pure fresh fibres Metsä Board uses are a renewable resource, traceable to origin in sustainably managed northern forests.
The global sales network of Metsä Board supports customers worldwide, including brand owners, retailers, converters and merchants. In 2016, the company’s sales totalled EUR 1.7 billion, and it has approximately 2,500 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.