Metsä Board’s comparable operating result in January–March 2020 was EUR 34 million

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Metsä Board Corporation Interim Report 1 January–31 March 2020  29 April 2020 at 12:00 noon EEST

January–March 2020 (compared to 1–3/2019)

• Sales were EUR 472.1 million (487.1).

• Comparable operating result was EUR 33.8 million (61.8), or 7.2% (12.7%) of sales. Operating result was EUR 33.8 million (71.9).

• Comparable earnings per share were EUR 0.06 (0.14), and earnings per share were EUR 0.06 (0.17).

• Comparable return on capital employed was 7.6% (14.4%).

• Net cash flow from operations was EUR 80.0 million (36.4).

As of the first quarter of 2020, the development of the reported quarter in Metsä Board’s interim report is compared to the corresponding quarter of the previous year. The reported review period will continue to be compared to the corresponding review period of the previous year.


Impacts from Covid-19 on Metsä Board’s business

The coronavirus pandemic has temporarily increased demand for pure and safe packaging materials, and the order inflows of Metsä Board’s paperboards have grown. In delivery logistics, there have been occasional capacity bottlenecks.

So far, the coronavirus has not had an impact on the production of Metsä Board’s mills. To minimise physical contact, the scope of the annual maintenance of mills scheduled for the second quarter of the year have been scaled down and partly postponed. 

Metsä Board’s financial position is good. The maturity profile of the loans is healthy and the company’s liquidity is adequate. The pre-engineering phase of the renewal of the Husum pulp mill and the investment’s preparatory construction work are progressing according to plan. 

The company has at its disposal substantial precautionary measures aiming to ensure the health and safety of the personnel and the continuity of the business. Despite the precautionary measures, a prolonged pandemic could lead to disruptions in production and/or the supply chain. The weakening of the world economy  attributable to the pandemic is also likely to reduce demand for Metsä Board’s products and thereby have a negative impact on the company’s profitability. 


Events in January–March 2020

• The strike at Finnish mills began on 27 January and ended on 10 February 2020. The strike concerned all Metsä Board’s mills in Finland and all pulp mills of Metsä Board’s associated company Metsä Fibre. The strike is estimated to have a negative impact of approximately EUR 20 million on Metsä Board’s operating result. Of this, approximately EUR 15 million materialized in the first quarter.

• Net cash flow from operations was strong, EUR 80 million.

• The coronavirus outbreak has temporarily increased demand for folding boxboard and white kraftliner. Metsä Board’s paperboard deliveries were on a higher level than in the corresponding period last year.

• The market prices of pulp were on a clearly lower level than in the corresponding period last year, which had a negative impact on profitability.

• There were no significant maintenance shutdowns during the review period. The scope and timing of maintenance shutdowns scheduled for the first half of the year have been reviewed due to the coronavirus situation.

• The first phase of the renewal of Husum’s pulp mill is progressing. Permission to begin the construction of the new recovery boiler was received in March, and the foundation work is now under way. The final investment decision will be made once the environmental permit has been secured.

• The Science Based Targets Initiative (SBTi) approved Metsä Board’s emission reduction targets. The company’s emission reduction targets concerning direct and indirect greenhouse gas emissions (Scope 1 and Scope 2) correspond with the reduction requirements necessary to limit global warming to 1.5 degrees.


Annual General Meeting of 2020

Metsä Board Corporation announced on 19 March 2020 its decision to cancel the Annual General Meeting convened for 26 March 2020. Metsä Board plans to hold its Annual General Meeting on 11 June 2020. The Notice to the meeting, including guidelines and procedures relating to the meeting will be published later, however three weeks before the meeting at the latest. The Board of Directors have decided not to amend the proposals already made to the Annual General Meeting.The Board of Directors proposes that a dividend of EUR 0.10 per share and a capital distribution of EUR 0.14 per share be paid for the 2019 financial period. The proposed dividend and capital distribution, totalling EUR 0.24 per share, corresponds to 59% of the earnings per share for 2019.


Near-term outlook

The duration of the pandemic caused by the coronavirus and the scope of its negative impact on the world economy and on Metsä Board’s business is difficult to estimate. At the moment, however, the order book of the company’s paperboards is on a strong level.

Metsä Board’s paperboard deliveries in the second quarter are expected to remain roughly on the level of the first quarter of 2020.

The market prices of folding boxboard and white kraftliner in local currencies are expected to remain stable.

The supply and demand of long-fibre pulp is expected to remain balanced, and market prices are not expected to decline.

The annual maintenance shutdowns of mills scheduled for April–June have partly been postponed to the second half of the year.

Changes in exchange rates, including the impact of hedges, will have a slightly positive impact on results during the second quarter of 2020 compared to the first quarter and a positive impact on results compared to the second quarter of 2019.

The production costs of paperboard and pulp are expected to remain stable.


Result guidance for April–June 2020

Metsä Board's comparable operating result for the second quarter of 2020 is expected to improve compared to the first quarter of 2020.


Metsä Board’s CEO Mika Joukio:

“Our operating result in January–March was EUR 33.8 million, when it was almost double that in the corresponding quarter last year. The main reason for the weaker result was the cheaper price of market pulp. Also, the two-week strike of paper industry workers early in the year had a big impact on us, given that a majority of our production is located in Finland. The negative impact that the strike had on the result totals roughly EUR 20 million, and most of it concerned the first quarter. The first-quarter cash flow was exceptionally strong. 

It is difficult to estimate the ultimate impact that the global spread of the coronavirus, which began during the review period and continues to this day, will have on our business. The pandemic has decreased demand in certain end uses of paperboard. On the other hand, it has accelerated the demand for food and pharma packaging, for example. So far, the pandemic’s net effect on the order inflow of Metsä Board’s paperboards has been positive.

Despite the exceptional circumstances, our production of folding boxboard was at a record high in March. Our investment projects also continued according to plan: Foundation work got under way in Husum’s recovery boiler project in Sweden and the winder project at Kyro mill in Finland has progressed according to the original schedule.

Metsä Board’s financial position is strong. The financing arrangements made last year secured a favourable maturity profile for our loans, and provide us with financial flexibility. Our liquidity is likewise on a good level.

The pandemic will significantly weaken the world economy, and is also likely to have a negative impact on Metsä Board’s business and profitability. Even so, as a company we have a strong foundation – skilled people, the industry’s leading products and innovative packaging solutions. Furthermore, demand for pure and safe products made from a renewable raw material can be expected to continue.  

For now, the most important things are our personnel’s safety, ensuring the continuity of our business and preventing further spread of the pandemic. I have proudly taken note of how well our personnel have performed and coped with this challenging time. These exceptional circumstances will come to an end at some point, and I believe that, once things get back to normal, we will be in an even stronger position to respond to our customers’ needs.”




2019 2019     2019
Q1 Q1 Q4 Q1–Q4
Sales, EUR million 472.1 487.1 478.4 1,931.8
EBITDA, EUR million 59.3 99.3 59.5 294.5
  comparable, EUR million 59.3 89.3 59.4 279.0
EBITDA, % sales 12.6 20.4 12.4 15.2
  comparable, % sales 12.6 18.3 12.4 14.4
Operating result, EUR million 33.8 71.9 20.0 180.8
  comparable, EUR million 33.8 61.8 39.1 184.4
Operating result, % sales 7.2 14.8 4.2 9.4
  comparable, % sales 7.2 12.7 8.2 9.5
Result before taxes, EUR million 28.9 67.9 17.0 165.6
  comparable, EUR million 28.9 57.9 36.1 169.2
Result for the period, EUR million 22.1 59.6 16.2 144.6
  comparable, EUR million 22.1 50.2 31.2 145.8
Earnings per share, EUR 0.06 0.17 0.05 0.41
  comparable, EUR 0.06 0.14 0.09 0.41
Return on equity, % 6.7 18.4 4.9 10.9
  comparable, % 6.7 15.5 9.5 11.0
Return on equity, % 7.6 16.7 4.6 10.2
  comparable, % 7.6 14.4 8.9 10.4
Equity ratio at end of period1), % 59 56 59 59
Net gearing ratio at end of period1), % 20 23 23 23
Interest-bearing net liabilities / comparable EBITDA 1.0 0.9 1.1 1.1
Shareholders’ equity per share at end of period1), EUR 3.71 3.57 3.76 3.76
Interest-bearing net debt1), EUR million 260.1 296.6 307.8 307.8
Total investments, EUR million 29.8 6.4 56.7 98.9
Net cash flow from operations, EUR million 80.0 36.4 89.6 200.5
Personnel1) 2,376 2,382 2,351 2,351

1) at end of period



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Metsä Board 

Metsä Board is a leading European producer of premium fresh fibre paperboards and forerunner in sustainability. We produce premium lightweight folding boxboards, food service boards and white kraftliners for consumer goods packaging 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. We aim for completely fossil free mills and raw materials by 2030. 

The global sales network of Metsä Board supports customers worldwide, including brand owners, retailers, converters and merchants. In 2019, 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. 

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