Metsä Board’s comparable operating result in January–September 2018 was EUR 192 million

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Metsä Board Corporation Interim Report 1 January 30 September 2018, 8 November 2018 at 12:00 noon

January–September 2018 (1–9/2017)

• Sales were EUR 1486.1 million (1397.3).

• Comparable operating result was EUR 191.9 million (139.1), or 12.9% (10.0%) of sales. Operating result was EUR 186.3 million (152.7).

• Comparable earnings per share were EUR 0.44 (0.27), and earnings per share were EUR 0.43 (0.30).

Comparable return on capital employed was 14.7% (10.6%).

July–September 2018 (4–6/2018)

• Sales were EUR 475.1 million (518.7).

• Comparable operating result was EUR 63.7 million (59.2), or 13.4% (11.4%) of sales. Operating result was EUR 63.7 million (53.6).

• Comparable earnings per share were EUR 0.16 (0.13), and earnings per share were EUR 0.16 (0.12).

• Comparable return on capital employed was 15.0% (13.9%).

Events in July–September 2018

• Profitability improved due to the higher average prices of paperboard and market pulp as well as associated company Metsä Fibre’s increased pulp production and delivery volumes.

• Paperboard delivery volumes fell below the record-high delivery volumes of the second quarter.

• The optimisation of the sales mix was continued in Americas and partly in Europe.

• Wood costs remained fairly stable compared to the previous quarter. The result continued to be burdened by the expensive imported wood purchased for the Husum mill. Wood deliveries to mills were normal and production was not curtailed.

• Planned maintenance shutdowns were held at the Kemi and Husum integrated mills. The maintenance shutdown at Husum began at the end of September and ended at the beginning of October.

Result guidance for October–December 2018

Metsä Board's comparable operating result for the fourth quarter of 2018 is expected to improve compared to the third quarter of 2018.

Metsä Board’s CEO Mika Joukio:

“Profitability in the third quarter improved due to the increased average prices of folding boxboard, white kraftliner and market pulp. The average price of paperboard rose due to successful price increases and the optimisation of the sales mix. The pulp market remained strong and the increased production and delivery volumes of pulp improved the result of our associated company Metsä Fibre.

Our paperboard deliveries were at a record-high level during the first half of the year and particularly during the second quarter. We estimate the high delivery volumes during the first half of the year to have increased customers’ stocks, which had an effect on our delivery volumes during the third quarter. The changes in the delivery volumes of market pulp were mainly due to theincrease in our own pulp consumption from growing paperboard production at the Husum mill in Sweden.

Exchange rate fluctuations during the third quarter had the expected negative effect on results compared to other quarters this year. Planned maintenance shutdowns were held at the Kemi integrated mill and partly at the Husum integrated mill. The maintenance shutdowns’ effect on results was at the same level as in the previous quarter.

Wood costs remained fairly stable compared to the previous quarter, but the result continues to be burdened by the expensive imported wood purchased for the Husum mill. General cost inflation has been rapid this year, in addition to which transport costs in the United States have increased. Recently, however, cost inflation has slowed down, and we do not expect significant changes to our production costs in the near future.

Growing concern over the use of non-renewable natural resources and ensuring product safety particularly in food packaging increase demand for ecological and lightweight fresh fibre paperboard. In addition, sustainability and actions against climate change are increasingly important prerequisites for operations and competitive factors for companies. Thanks to long-term work, the energy efficiency of Metsä Board’s production has improved year after year. Fossil-based carbon dioxide emissions and water consumption have been reduced to a significant degree. Our sustainable way of working has won plenty of external recognition, of which I am particularly proud. The thanks for these achievements belongs not only to our competent and committed personnel, but our customers, for whom a responsible way of working has been an important starting point and requirement for cooperation for many years now. Our goal is to continue this development in the future.”

Financial key figures

2018 2018 2018 2017    2018 2017 2017
Q3 Q2 Q1 Q3 Q1–Q3 Q1–Q3 Q1–Q4
Sales, EUR million 475.1 518.7 492.3 478.6 1,486.1 1,397.3 1,848.6
EBITDA, EUR million 84.2 78.5 94.3 85.2 257.0 220.9 298.7
comparable, EUR million 84.2 84.1 94.3 75.0 262.6 211.2 289.1
EBITDA, % of sales 17.7 15.1 19.2 17.8 17.3 15.8 16.2
comparable, % of sales 17.7 16.2 19.2 15.7 17.7 15.1 15.6
Operating result, EUR million 63.7 53.6 69.0 60.6 186.3 152.7 207.1
comparable, EUR million 63.7 59.2 69.0 50.4 191.9 139.1 193.5
Operating result, % of sales 13.4 10.3 14.0 12.7 12.5 10.9 11.2
comparable, % of sales 13.4 11.4 14.0 10.5 12.9 10.0 10.5
Result before taxes, EUR million 59.5 47.8 61.0 43.8 168.4 124.0 170.8
comparable, EUR million 59.5 53.5 61.0 33.5 174.0 110.3 157.2
Result for the period, EUR million 57.5 41.8 53.9 39.3 153.2 108.4 150.5
comparable, EUR million 57.5 46.2 53.9 29.0 157.6 95.4 137.5
Result per share, EUR 0.16 0.12 0.15 0.11 0.43 0.30 0.42
comparable, EUR 0.16 0.13 0.15 0.08 0.44 0.27 0.39
Return on equity, % 18.7 14.4 18.7 14.2 16.7 13.3 13.6
comparable, % 18.7 15.9 18.7 10.5 17.2 11.7 12.4
Return on capital employed, % 15.0 12.6 15.8 13.9 14.3 11.7 11.9
comparable, % 15.0 13.9 15.8 11.5 14.7 10.6 11.2
Equity ratio at the end of period, % 57 55 50 51 57 51 53
Net gearing ratio at the end of period, % 27 33 29 39 27 39 31
Interest-bearing net liabilities/ comparable EBITDA 1.0 1.2 1.1 1.7 1.0 1.7 1.2
Shareholders’ equity per share at the end of period, EUR 3.58 3.32 3.21 3.14 3.58 3.14 3.28
Interest-bearing net liabilities, EUR million 343.6 388.1 334.7 436.9 343.6 436.9 358.4
Gross investments, EUR million 10.7 15.3 10.5 7.3 36.4 38.7 65.4
Net cash flow from operating activities, EUR million 53.9 36.3 30.2 67.5 120.5 130.2 236.3
Personnel at the end of period 2,375 2,578 2,402 2,369 2,375 2,369 2,351

Near-term outlook

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

Metsä Board’s paperboard deliveries during the fourth quarter are expected to remain roughly on the level of the third quarter or to decline slightly. The delivery volumes of the fourth quarter are affected by the seasonally slower December.

Metsä Board continues its measures to improve the average price of folding boxboard by optimising the mix of sales.

Part of the maintenance shutdown of the Husum integrated mill occurred during the fourth quarter. The maintenance shutdown ended at the beginning of October, and its effect on the result has been accounted for in the result guidance for the fourth quarter.

The strengthening of the US dollar and the weakening of the Swedish krona against the euro, accounting for the impact of hedges, will have a positive impact on the operating result during the fourth quarter compared to the previous quarter.

Wood costs in the fourth quarter are expected to remain roughly at the same level as in the third quarter. Net impact of energy costs and sale of emission rights are expected to improve the operating result.

The total production costs of paperboard in 2018 will increase due to more expensive wood and an acceleration in general cost inflation. The share of wood costs accounts for approximately EUR 30 million of the increase. Recently, however, cost inflation has slowed down, and no significant changes to production costs are expected in the near future.


Espoo, Finland, 8 November 2018


Further information:

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 8 November 2018.

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 +1 646-828-8143

The conference ID is 9227029.  

Other events in 2018:  14 November 2018, Capital Markets Day in London

Metsä Board’s financial reporting in 2019:
7 February 2019: Financial Statements Bulletin 2018 
26 April 2019: Interim Report for January–March 2019  
1 August 2019: Half-Year Financial Report for January–June 2019  
31 October 2019: Interim Report for January–September 2019

Metsä Board

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 2017, the company’s sales totalled EUR 1.8 billion, and it has approximately 2,350 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.

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