Metsä Group’s operating result for 2014 excluding non-recurring items was eur 418 million
Metsä Group Stock Exchange Release 5 February 2015 at 12.00 noon
Full year result for 2014
• Sales amounted to EUR 4,970 million (2013: EUR 4,939 million).
• Operating result excluding non-recurring items was EUR 418 million (343). Operating result including non-recurring items was EUR 417 million (335).
• Result before taxes excluding non-recurring items was EUR 339 million (232). Result before taxes including non-recurring items was EUR 330 million (224).
• Return on capital employed excluding non-recurring items was 11.4 per cent (9.1).
• Cash flow from operations amounted to EUR 764 million (491).
• Metsäliitto Cooperative’s Board of Directors has decided to propose to the Supervisory Board that interest of 5.5 per cent (5.5 + 1.0 per cent for 2013) be paid on the members’ capital for 2014. Interest of 5.0 per cent (5.0) is proposed for additional members’ capital A, and interest of 4.5 per cent (4.5) for additional members’ capital B.
Result for October–December 2014
• Sales amounted to EUR 1,248 million (10–12/2013: EUR 1,219 million).
• Operating result excluding non-recurring items was EUR 117 million (87). Operating result including non-recurring items was EUR 84 million (88).
• Result before taxes excluding non-recurring items was EUR 101 million (61). Result before taxes including non-recurring items was EUR 68 million (60).
• Return on capital employed excluding non-recurring items was 12.0 per cent (9.3).
• Cash flow from operations amounted to EUR 390 million (195).
Events in the fourth quarter of 2014
• Profitability improved in all of Metsä Group's business areas year-on-year.
• Metsä Board launched measures to complete its restructuring and decided to invest approximately EUR 170 million in a new folding boxboard machine at the Husum mill in Sweden. In addition, the company is planning to discontinue paper production and has launched the divestment process of the loss-making Gohrsmühle mill in Germany
• Metsäliitto Cooperative announced that it will sell the entire share capital of Metsä Wood's UK-based pole business subsidiary Burt Boulton and Haywood Ltd. The transaction was completed in February 2015. The sale will not have any material effect on the Group's result.
• Mika Joukio, M.Sc. (Tech.), MBA, started as CEO of Metsä Board Corporation on 1 October 2014.
Events after the period
• Metsä Tissue Corporation's Board of Directors appointed Petri Helsky, M.Sc. (Chem. Eng.), M.Sc. (Econ), 48, as CEO of the company. He will start in his new position and as a member of Metsä Group’s Executive Management Team on 1 July 2015 at the latest.
“In the light of our key indicators, and considering the business environment, 2014 was a good year. Our operating result excluding non-recurring items clearly improved, the return on capital employed increased, net debt continued to decrease and our cash flow was strong.
We will continue the determined implementation of our focused strategy. We are the market leader in wood supply and forest services, and this year we will be the first company in Finland to digitise all sales and purchase processes in wood trade and forest management. Metsä Wood's decision to focus on large industrial customers has already strengthened our position in the wood product market. We are also among the leading players in tissue and cooking papers in our key markets. Metsä Board's decision to discontinue paper production and build a new folding boxboard machine at Husum will finalise the company's restructuring into a paperboard company.
If the prerequisites for the investment are met, the investment decision regarding building Metsä Fibre's planned bioproduct mill in Äänekoski will be made this spring. The preparations for the decision have progressed smoothly.
The basis for year 2015 is good: our finances are solid and stable, our products are of the highest quality and our planned investments will further strengthen our position. We are heading for the future with confidence."
Kari Jordan, President & CEO, Metsä Group
|Income statement, EUR million||2014||2013||2014||2013|
|The figures for 2013 are restated||1-12||1-12||10-12||10-12|
|Sales||4 970.3||4 938.7||1 247.5||1 219.3|
|Other operating income||170.3||81.0||29.2||25.1|
|Operating expenses||-4 447.5||-4 427.7||-1 105.2||-1 094.8|
|Depreciation and impairment losses||-276.2||-257.1||-87.4||-61.3|
| Share of results from associated companies and |
|Exchange gains and losses||2.7||-4.6||3.9||-2.6|
|Other net financial items||-106.1||-116.2||-22.4||-24.3|
|Result before income tax||329.9||223.8||67.6||61.5|
|Result for the period||260.3||188.7||56.5||71.7|
|The figures for 2013 are restated||1-12||1-12||10-12||10-12|
|Operating result, EUR million||416.9||335.0||84.1||88.3|
|- ” -, excluding non-recurring items||418.1||342.9||117.3||87.3|
|- ” -, % of sales||8.4||6.9||9.4||7.2|
|Return on capital employed, %||11.1||8.9||8.7||9.4|
|- ” -, excluding non-recurring items||11.4||9.1||12.0||9.3|
|Return on equity, %||13.0||9.9||11.1||14.9|
|- ” -, excluding non-recurring items||13.4||10.3||17.6||14.7|
|The figures for 2013 are restated||31.12.||31.12.||30.9.||30.9.|
|Equity ratio, %||37.9||37.9||38.5||35.9|
|Net gearing ratio, %||46||77||62||85|
|Interest-bearing net liabilities, EUR million||938||1 510||1 258||1 604|
| Sales and Operating result |
1–12/2014, EUR million
|Wood Supply and Forest Services||Wood Products Industry|| |
|Paperboard and Paper Industry||Tissue and Cooking Papers|
|Sales||1 575.0||896.9||1 295.7||2 008.4||1 012.8|
|Other operating income||6.7||10.1||33.4||69.6||9.3|
|Operating expenses||-1 552.0||-842.5||-1 039.2||-1 835.8||-921.6|
| Depreciation and impairment |
| Operating result |
excluding non-recurring items
|- " -, % of sales||1.8||4.1||16.0||6.8||6.1|
Metsä Forest buys wood from across the country, primarily from stands harvested when the ground is unfrozen. Winter thinning stands are purchased in limited volumes, as some of the logging sites planned to be harvested last year were moved to this winter's harvest due to the poor weather conditions. The aim in forest management services is to continue strong growth and be the owner-members' first choice partner.
In spite of seasonal fluctuations in demand, wood products industry's sales for the first quarter of 2015 are expected to develop steadily compared to the fourth quarter of 2014. The outlook for construction is challenging in Europe, and especially in Finland. Competition in the sawn timber market, which is suffering from oversupply, is expected to continue to be tight, and production curtailments may need to be continued. The exchange rates of the currencies of the key competitor countries have weakened more than the euro against the main trade currencies, which weakens the competitiveness of the Finnish wood products industry.
Demand for pulp has remained stable, and no signs of rapid changes in the market are in sight. The strengthening of the US dollar against the euro has improved the profitability of pulp producers in the euro area.
Delivery volumes of paperboard are estimated to increase slightly during the first quarter of 2015 compared to the previous quarter. No material changes in the price of paperboard are in sight at the moment.
Metsä Board's paper deliveries are estimated to increase slightly during the first quarter, while the average price is expected to decrease.
Price competition in the retail trade of tissue and cooking papers will continue to be tight in all markets. Demand is expected to continue to be at the level of 2014. Changes in energy and raw material prices and the quality of recycled paper and its local availability are significant drivers of the development of Metsä Tissue's operating result.
Metsä Group’s operating result excluding non-recurring items in the first quarter of 2015 is expected to be approximately on the same level compared to the fourth quarter of 2014.
Metsä Group has adopted a disclosure procedure made possible by the Financial Supervision Authority Standard 5.2b. This bulletin is a summary of Metsä Group's Financial Statement Bulletin for 2014. The Financial Statement Bulletin and its tables are attached to this Stock Exchange Release as a PDF attachment and are available on the Group’s website at www.metsagroup.com.
Metsä Group will publish its financial reports in 2015 as follows:
7 May Interim Report January–March 2015
6 Aug. Interim Report January–June 2015
5 Nov. Interim Report January–September 2015
For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0)10 465 4260
Reeta Kaukiainen, SVP, Communications, Metsä Group, tel. +358 (0)10 465 4541, +358 (0)50 522 0924
Metsä Group is a responsible forest industry group whose products’ main raw material is renewable and sustainably grown northern wood. Metsä Group focuses on tissue and cooking papers, fresh forest fibre paperboards, pulp, wood products, and wood supply and forest services. Its high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group’s sales totalled EUR 5 billion in 2014, and it employs approximately 10,500 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 122,000 Finnish forest owners.