Metsä Board Corporation’s operating result excluding non-recurring items for January–September 2015 was EUR 144.8 million
Metsä Board Corporation Interim Report 1 January–30 September 2015, 5 November 2015 at 12.00 noon
Result for January–September 2015
• Sales were EUR 1,545.3 million (Q1–Q3/2014: 1509.0).
• Operating result excluding non-recurring items was EUR 144.8 million (99.6). Operating result including non-recurring items was EUR 164.9 million (109.8).
• Result before taxes excluding non-recurring items was EUR 119.8 million (68.1). Result before taxes including non-recurring items was EUR 137.7 million (76.0).
• Earnings per share excluding non-recurring items were EUR 0.27 (0.16), and earnings per share including non-recurring items were EUR 0.32 (0.18).
Result for the third quarter of 2015
• Sales were EUR 497.6 million (Q2/2015: 522.0).
• Operating result excluding non-recurring items was EUR 54.6 million (47.0). Operating result including non-recurring items was EUR 54.6 million (67.2).
• The result before taxes excluding non-recurring items was EUR 47.5 million (40.0). Result before taxes including non-recurring items was EUR 47.5 million (58.0).
• Earnings per share excluding non-recurring items were EUR 0.08 (0.10), and earnings per share including non-recurring items were EUR 0.08 (0.15).
Events in the third quarter of 2015
• Paperboard deliveries continued to grow, and the paperboard price levels were stable.
• The production of coated paper ended at the Husum mill.
• A strike stopped Metsä Board's entire production in Finland for 24 hours.
• Four carton packages using Metsä Board's paperboard received awards at the 2015 Pro Carton ECMA Awards.
Events after the period
• Metsä Board announced it would increase the price of folding boxboard in Europe starting from 1 December 2015.
• The installation of the new paperboard machine began at Husum.
• Metsä Board expands its offering in food and food service paperboards by investing EUR 38 million in extrusion coating.
• The Finnish Tax Administration gave an opinion against the deductibility of certain losses in Metsä Board's 2014 taxation. The company recognised in its Q3/2015 result around EUR 15 million in income tax, which was previously unrecognised. Metsä Board will appeal against this opinion.
• Metsä Board scored a full 100 points in the Nordic Climate Disclosure Leadership Index (CDLI). In addition, of the eight international companies included in the global Water A List concerning sustainable use of water, Metsä Board was the only European company and the only forest sector company.
Profit guidance for the fourth quarter of 2015
• Metsä Board’s operating result excluding non-recurring items in the fourth quarter of 2015 is expected to decline compared to the third quarter of 2015. The result is weakened primarily by the shutdown of the integrated mill related to Husum's investment programme.
CEO Mika Joukio:
“The increased paperboard deliveries improved our profitability in the third quarter of 2015. Our result was burdened by a strike, which stopped our entire production in Finland for 24 hours. After the review period, we announced a price increase of folding boxboard in Europe, which will become effective in December.
We respond to the increasing demand for paperboard by starting production of folding boxboard at Husum. The new production will mainly be marketed to Americas, as well as for food service packaging applications globally. Our key tasks next year are to successfully start-up our new paperboard machine and growing our sales.
We are investing in product development in order to continue to offer our customers the most lightweight and high-quality paperboard in the market. We will expand our offering in the food service packaging segment to end uses which require barrier properties from paperboard due to requirements for withstanding fat and moisture. Related to this, we invested in the extrusion coating line at Husum.
The production of coated paper ended at Husum in September, and the production of uncoated fine paper sheets will be discontinued by the end of this year. The remaining production of uncoated fine paper reels will end by the end of 2017, at the latest.
I am very proud that our sustainability and high-quality products have been recognised across the field. Our inclusion in the Climate Disclosure Leadership Index (CDLI) and the recognition for sustainable use of water show that we are successful by operating responsibly. Receiving four awards in the Pro Carton ECMA Awards – and especially in the series for sustainable development – indicates that the excellence of our cartons and their ecological quality have been taken into account throughout the value chain.”
Key figures
| 2015 | 2015 | 2015 | 2014 | 2015 | 2014 | 2014 | |
| Q3 | Q2 | Q1 | Q3 | Q1–Q3 | Q1–Q3 | Q1–Q4 | |
| Sales, EUR million | 497.6 | 522.0 | 525.7 | 513.8 | 1 545.3 | 1 509.0 | 2 008.4 |
| EBITDA, EUR million | 80.8 | 93.3 | 69.3 | 60.7 | 243.4 | 185.8 | 242.2 |
| excl. non-recurring items, EUR million | 80.8 | 73.1 | 69.7 | 61.8 | 223.6 | 175.6 | 236.2 |
| EBITDA, % | 16.2 | 17.9 | 13.2 | 11.8 | 15.8 | 12.3 | 12.1 |
| excl. non-recurring items, % | 16.2 | 14.0 | 13.3 | 12.0 | 14.5 | 11.6 | 11.8 |
| Operating result, EUR million | 54.6 | 67.2 | 43.1 | 34.1 | 164.9 | 109.8 | 116.5 |
| excl. non-recurring items, EUR million | 54.6 | 47.0 | 43.2 | 35.2 | 144.8 | 99.6 | 136.5 |
| EBIT, % | 11.0 | 12.9 | 8.2 | 6.6 | 10.7 | 7.3 | 5.8 |
| excl. non-recurring items, % | 11.0 | 9.0 | 8.2 | 6.9 | 9.4 | 6.6 | 6.8 |
| Result before taxes, EUR million | 47.5 | 58.0 | 32.2 | 26.1 | 137.7 | 76.0 | 77.6 |
| excl. non-recurring items, EUR million | 47.5 | 40.0 | 32.3 | 27.3 | 119.8 | 68.1 | 99.7 |
| Result for the period, EUR million | 26.8 | 54.7 | 29.3 | 20.8 | 110.8 | 62.4 | 68.5 |
| excl. non-recurring items, EUR million | 26.4 | 36.9 | 29.4 | 21.9 | 92.7 | 55.4 | 88.1 |
| Result per share, EUR | 0.08 | 0.15 | 0.09 | 0.06 | 0.32 | 0.18 | 0.20 |
| excl. non-recurring items, EUR | 0.08 | 0.10 | 0.09 | 0.06 | 0.27 | 0.16 | 0.26 |
| Return on equity, % | 10.6 | 22.5 | 13.2 | 9.8 | 15.9 | 9.8 | 8.1 |
| excl. non-recurring items, % | 10.4 | 15.2 | 13.2 | 10.4 | 13.3 | 8.7 | 10.4 |
| Return on capital employed, % | 13.0 | 16.5 | 11.0 | 9.0 | 13.8 | 9.6 | 7.7 |
| excl. non-recurring items, % | 13.0 | 11.6 | 11.0 | 9.2 | 12.1 | 8.9 | 9.1 |
| Equity ratio at end of period, % | 45.6 | 45.9 | 40.8 | 39.8 | 45.6 | 39.8 | 39.2 |
| Gearing ratio at end of period, % | 66 | 67 | 73 | 82 | 66 | 82 | 81 |
| Net gearing ratio at end of period, % | 34 | 39 | 34 | 57 | 34 | 57 | 51 |
| Shareholders' equity per share at end of period, EUR | 2.86 | 2.83 | 2.63 | 2.53 | 2.86 | 2.53 | 2.49 |
| Interest-bearing net liabilities, EUR million | 344.2 | 389.0 | 318.9 | 491.1 | 344.2 | 491.1 | 426.7 |
| Gross investments, EUR million | 44.8 | 48.3 | 23.9 | 7.3 | 117.0 | 26.0 | 44.2 |
| Deliveries, 1,000 tonnes | |||||||
| Paperboard | 373 | 366 | 345 | 344 | 1.084 | 983 | 1.310 |
| Non-core operations | 118 | 138 | 156 | 158 | 412 | 478 | 636 |
| Personnel at the end of period | 2,642 | 2,850 | 3,158 | 3,164 | 2,642 | 3,164 | 3,111 |
Result per share and shareholders' equity per share in 2014 have been adjusted for right issue. The right issue factor was 1.030627
EBITDA = Earnings before interest, taxes, depreciation and impairment charges
Business environment and near-term outlook
It is estimated that the total delivery volume of paperboard will decrease slightly in the last quarter of the year due to the seasonally weaker December. The average price of paperboard is estimated to remain approximately at the level of the previous quarter. Metsä Board announced it would increase the price of folding boxboard in Europe starting from 1 December 2015.
The global demand for and the price level of long-fibre pulp is expected to remain stable. Metsä Board's market pulp deliveries are expected to decrease slightly from the previous quarter in October–December due to the shutdown of the integrated mill at Husum.
Clearly reductions are being planned in paper deliveries, and prices are estimated to decrease slightly from the previous quarter.
The production costs in the last quarter of the year will remain approximately at the level of the previous quarter.
The shutdown of the integrated mill related to the installation of the new paperboard machine at Husum will impact Metsä Board's operating result for October–December by approximately EUR -15 million.
Metsä Board’s operating result excluding non-recurring items in the fourth quarter of 2015 is expected to decline compared to the third quarter of 2015.
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 2015 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
Katri Sundström, VP, Investor Relations, tel. +358 (0)400 976 333
More information will be available from 1 p.m. on 5 November 2015. A conference call for investors and analysts will be held in English and begin 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 0077
US: +1 334 323 6201
The conference ID is 955861.
www.metsaboard.com
Metsä Board is a leading European producer of folding boxboards and white linerboards made from fresh forest fibres, and a market pulp supplier. 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 and recyclable after use. The global sales network of Metsä Board supports customers worldwide, including brand owners, converters and merchants. In 2014, 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 OMX Helsinki.