Metsä Board’s comparable operating result in 2018 was EUR 252 million
Financial statements bulletin for 1 January – 31 December 2018, 7 February 2019 at 12:00 noon
January–December 2018 (1–12/2017)
• Sales were EUR 1,944.1 million (1,848.6).
• Comparable operating result was EUR 251.9 million (193.5), or 13.0% (10.5%) of sales. Operating result was EUR 246.3 million (207.1).
• Comparable earnings per share were EUR 0.58 (0.39), and earnings per share were EUR 0.57 (0.42).
• Comparable return on capital employed was 14.4% (11.2%).
October–December 2018 (7–9/2018)
• Sales were EUR 458.0 million (475.1).
• Comparable operating result was EUR 60.1 million (63.7), or 13.1% (13.4%) of sales. Operating result was EUR 60.1 million (63.7).
• Comparable earnings per share were EUR 0.14 (0.16), and earnings per share were EUR 0.14 (0.16).
• Comparable return on capital employed was 13.7% (15.0%).
Events in October–December 2018
• Paperboard deliveries were on a lower level compared to the previous quarter due to the seasonal decline in December, among other factors.
• The average prices of folding boxboard and white kraftliner rose slightly. Metsä Board announced an increase of EUR 80 per tonne in the price of folding boxboard in Europe. The company estimates slightly more than a third of the increase, on average, to have been realised. The higher prices took effect for the most part as of the beginning of 2019.
• A new baling line was taken into use at the Kaskinen BCTMP mill. Metsä Board announced that it would invest in a new sheeting line at the Äänekoski paperboard mill.
• Metsä Board lowered its result guidance for the fourth quarter in December. The guidance was weakened by the pulp market’s uncertainty, particularly in China, and the machinery breakdown at the Husum pulp mill in Sweden.
• The delivery volumes of market pulp, particularly in China, declined during the fourth quarter of the year. The difference between the price of market pulp in Europe and China grew clearly towards the end of 2018.
• On 14 November, Metsä Board held a Capital Markets Day in London for analysts and institutional investors. The company’s financial targets remained unchanged. In the short term, the company aims for more modest growth than in previous years, with focus on profitability.
Events after the financial period
• Metsä Board was again recognised for sustainability when the company was included on CDP’s Water A and Climate A lists and scored A- in CDP’s forest programme. In addition, Metsä Board was recognised as a world leader for supplier engagement on climate change. CDP is a non-profit global environmental disclosure platform.
• Moody’s Investors Service upgraded Metsä Board’s credit rating to investment grade. The rating was upgraded from Ba1 to Baa3. The outlook for the rating is stable.
Result guidance for January–March 2019
Metsä Board’s comparable operating result for the first quarter of 2019 is expected to remain roughly at the same level as in the fourth quarter of 2018.
Board of Directors’ proposal for dividend and other distribution of equity
The Board of Directors proposes to the Annual General Meeting to be held on 28 March 2019 that a dividend of EUR 0.10 per share be distributed for the 2018 financial year 2018, and further that EUR 0.19 per share be distributed from the unrestricted equity reserve. The proposed distribution, a total of EUR 0.29 per share, is equal to 51% of the earnings per share for 2018.
Metsä Board’s CEO Mika Joukio:
“Our comparable result in October–December, EUR 60.1 million, was roughly at the same level as in the previous quarter. The average prices of our paperboards increased, but delivery volumes remained on a lower level than in the previous quarters due to a seasonal decline. We estimate that the changes in delivery volumes continued to be influenced by the exceptionally strong demand during the first half of the year.
The profitability of the fourth quarter was burdened by a machinery breakdown at the Husum pulp mill and the increased uncertainty in the pulp market, particularly in China. We have a substantial market pulp position through our holding in Metsä Fibre, due to which changes in the delivery volumes and price level of market pulp have an impact on our profitability.
All in all, 2018 was a good year for Metsä Board, and we continued to grow profitably, supported by strong market trends. The production efficiency of our mills was at a good level, and nearly all of our production lines set new annual production records.
Our comparable operating result improved by nearly a third and was EUR 252 million. Our profitability improved due to higher paperboard prices, a strong pulp market and the increased delivery volumes of folding boxboard.
The prices of white kraftliner have been increased several times over the past 18 months. At the year end, we announced a price increase in folding boxboard in Europe, of which we achieved slightly over a third.
Our strategy and financial targets remained unchanged in 2018. In the short term, our growth will be more modest than in previous years, and decision-making will be strongly guided by our profitability targets and the growth of shareholder value.
Sustainable business operations are increasingly important to our stakeholders and the entire society. Our goal is to promote packaging solutions which create better consumer experiences with less environmental impact. After the financial period, we received again recognition for our sustainability from CDP.
I have confidence in Metsä Board’s future. I want to thank our personnel, customers and other stakeholders for the past year.”
Financial key figures
|Sales, EUR million||458.0||475.1||518.7||492.3||451.3||1,944.1||1,848.6|
|EBITDA, EUR million||81.2||84.2||78.5||94.3||77.8||338.2||298.7|
|comparable, EUR million||81.2||84.2||84.1||94.3||77.8||343.8||289.1|
|EBITDA, % of sales||17.7||17.7||15.1||19.2||17.2||17.4||16.2|
|comparable, % of sales||17.7||17.7||16.2||19.2||17.2||17.7||15.6|
|Operating result, EUR million||60.1||63.7||53.6||69.0||54.4||246.3||207.1|
|comparable, EUR million||60.1||63.7||59.2||69.0||54.4||251.9||193.5|
|Operating result, % of sales||13.1||13.4||10.3||14.0||12.0||12.7||11.2|
|comparable, % of sales||13.1||13.4||11.4||14.0||12.0||13.0||10.5|
|Result before taxes, EUR million||55.8||59.5||47.8||61.0||46.8||224.2||170.8|
|comparable, EUR million||55.8||59.5||53.5||61.0||46.8||229.7||157.2|
|Result for the period, EUR million||50.2||57.5||41.8||53.9||42.1||203.4||150.5|
|comparable, EUR million||50.2||57.5||46.2||53.9||42.1||207.8||137.5|
|Earnings per share, EUR||0.14||0.16||0.12||0.15||0.12||0.57||0.42|
|Return on equity, %||15.5||18.7||14.4||18.7||14.8||16.3||13.6|
|Return on capital employed, %||13.7||15.0||12.6||15.8||12.4||14.0||11.9|
|Equity ratio at the end of period, %||58||57||55||50||53||58||53|
|Net gearing ratio at the end of period, %||25||27||33||29||31||25||31|
|Interest-bearing net liabilities/comparable EBITDA||1.0||1.0||1.2||1.1||1.2||1.0||1.2|
|Shareholder’s equity per share at the end of period, EUR||3.72||3.58||3.32||3.21||3.28||3.72||3.28|
|Interest-bearing net liabilities, EUR million||334.6||343.6||388.1||334.7||358.4||334.6||358.4|
|Gross investments, EUR million||33.9||10.7||15.3||10.5||26.7||70.3||65.4|
|Net cash flow from operations, EUR million||30.4||53.9||36.3||30.2||106.1||150.9||236.3|
|Personnel at the end of period||2,352||2,375||2,578||2,402||2,351||2,352||2,351|
Delivery and production volumes
|Metsä Fibre pulp1)||193||191||179||177||180||740||619|
|Metsä Board pulp||338||334||338||352||305||1,363||1,330|
Equal to Metsä Board’s 24.9 per cent holding in Metsä Fibre.
Metsä Board’s paperboard deliveries in the first quarter are expected to rise slightly compared to the fourth quarter of 2018.
The market prices of folding boxboard in local currencies are expected to increase. The company continues its measures to improve the average price of folding boxboard by optimising the sales mix.
The global economic uncertainty, slowdown in China’s economic growth and reductions in inventory levels in the value chain are still causing uncertainty in Metsä Board’s business operations.
A maintenance shutdown at Metsä Fibre’s Äänekoski bioproduct mill is set to take place in the first quarter.
Changes in exchange rates including the impact of hedges will have a positive effect on the operating result for the first quarter compared to the previous quarter.
Production costs are expected to remain stable. The price of wood is expected to remain on a high level in the beginning of the year.
METSÄ BOARD CORPORATION
Espoo, Finland, 7 February 2019
BOARD OF DIRECTORS
Jussi Noponen, CFO tel. +358 10 465 4913
Katri Sundström, VP, Investor Relations, tel. +358 400 976 333
Further information will be available as of 1 p.m. on 07/02/2019. 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 0361
Sweden +46 8 5033 6574
United Kingdom +44 330 336 9105
United States +1 323-794-2551
The conference ID is 9681033.
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 2018, the company’s sales totalled EUR 1.9 billion, and it has approximately 2,400 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.