Metsä Board’s comparable operating result in January–September 2020 was EUR 157 million

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Metsä Board Corporation Stock Exchange Release January-September Interim report 29 October 2020 at 12 noon EET

January–September 2020
(compared to 1–9/2019)

  • Sales were EUR 1,416.4 million (1,453.4).
  • Comparable operating result was EUR 156.7 million (145.3) or 11.1% (10.0%) of sales. Operating result was EUR 162.7 million (160.8).
  • Comparable earnings per share were EUR 0.33 (0.32), and earnings per share were EUR 0.34 (0.36).
  • Comparable return on capital employed was 11.8% ( 11.0%).
  • Net cash flow from operations was EUR 226.7 million (110.9).

July–September 2020
(compared to 7–9/2019)

  • Sales were EUR 471.2 million (489.2).
  • Comparable operating result was EUR 62.5 million (42.5), or 13.3% (8.7%) of sales. Operating result was EUR 62.5 million (42.5).
  • Comparable earnings per share were EUR 0.13 (0.09), and earnings per share were EUR 0.13 (0.09).
  • Comparable return on capital employed was 14.3% (9.7%).
  • Net cash flow from operations was EUR 74.4 million (43.8).

Impact of coronavirus pandemic on Metsä Board’s business operations

The coronavirus pandemic has increased demand for hygienic and safe packaging materials, particularly for end uses in the food and pharmaceutical industries. On the other hand, the pandemic has weakened demand for the packaging materials of luxury items and graphic end uses.

The coronavirus has not had an impact on production at Metsä Board’s mills. Some annual maintenance works were postponed from the first to the second half of the year. The planned annual maintenance shutdowns scheduled for the third quarter went well.

Metsä Board’s financial position is good. The maturity structure of the loans is healthy, and the company has adequate liquidity. Metsä Board’s paperboard product portfolio is defensive in a pandemic situation, and thus  the cash flow, which has remained strong, supports financial headroom.

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

Events in July–September 2020

  • Demand for Metsä Board’s fresh fibre paperboards remained good and delivery volumes were on the previous quarter’s high level. The average prices of folding boxboard and white kraftliner remained stable.
  • The profit losses due to the annual maintenance shutdowns held in the third quarter were at the lower end of the estimated range. 
  • In China, demand for market pulp picked up and prices increased slightly. In Europe, the pulp market remained uncertain.
  • Net cash flow from operations in the third quarter was EUR 74.4 million and interest-bearing net liabilities at the end of the period were EUR 277.3 million. The financial position remained strong.
  • The Excellence Centre for paperboard and packaging design opened in Äänekoski, Finland.
  • All Metsä Board paperboards, except the PE-coated grades, achieved certificates in industrial compostability.

Events after the review period

On 9 October 2020, Metsä Board gave a positive profit warning concerning the comparable operating result for July–September. Previously, the company expected its comparable operating result for the third quarter to weaken from the second quarter. Paperboard sales in the third quarter were higher than expected and total costs were lower than expected.

Near-term outlook

The duration of the coronavirus pandemic and the scope of its negative impact on the world economy and on Metsä Board’s business operations continue to be difficult to estimate.

Metsä Board’s paperboard deliveries in the fourth quarter of 2020 are expected to decline slightly from the level of the third quarter of 2020. The decline is mainly caused by the seasonally slower December.  

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

Annual maintenance shutdowns will be held at three of Metsä Fibre’s pulp mills during the fourth quarter, in addition to which the annual maintenance shutdown of Metsä Board’s Husum mill integrate extended to the first week of October, according to plan.

The supply of long-fibre market pulp during the fourth quarter will decrease due to the annual maintenance shutdowns of producers and the production curtailments announced by some producers. Metsä Board’s market pulp deliveries in the fourth quarter of 2020 are expected to increase from the level of the third quarter of 2020.

Changes in exchange rates, including the impact of hedges, will have a neutral impact on the result in the fourth quarter of 2020 compared to the third quarter of 2020 and a positive impact compared to the fourth quarter of 2019.

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

Result guidance for October–December 2020

Metsä Board’s comparable operating result for the fourth quarter of 2020 is expected to remain roughly at the same level as in the third quarter of 2020.

Metsä Board’s CEO Mika Joukio:

“The impacts of coronavirus pandemic on Metsä Board’s business operations has so far been smaller than expected. Good demand for food and pharmaceutical packaging as well as various packaging solutions in the retail sector has increased the sales of our fresh fibre paperboards in both Europe and North America. In January–September, the total delivery volumes of our paperboards were on a higher level than in the corresponding period last year. We have a good paperboard product portfolio, which has proven to be defensive in a pandemic situation. Further, our recyclable paperboards made from renewable wood fibre are ideal for sustainable packaging, which will support their demand in the future.

Our comparable operating result in July–September was EUR 62.5 million (7–9/2019: 42.5). Profitability was supported particularly by the lower production costs of paperboard, a reduction in fixed costs and a positive FX impact. The sales prices of market pulp were lower than in the corresponding period last year. In China, the market situation of pulp has picked up slightly over the past few months, while in Europe, the rapid decline in paper production continues to reduce demand for market pulp.  

A number of planned annual maintenance shutdowns at our mills took place in the third quarter, the most significant being the annual maintenance shutdowns of the Kemi and Husum mill integrates. The maintenance works proceeded well, and the profit losses due to them remained at the lower end of the estimated range. This was a continuation of the good performance of our mills throughout the pandemic.   

Our cash flow from operations remained strong, amounting to EUR 226.7 million in January–September – twice as much as in the corresponding period last year. This will further strengthen our good liquidity and support us in our large-scale investments. We are ready to make the final investment decision on the renewal of the Husum pulp mill as soon as the amendment to the environmental permit is approved by the Swedish authorities. We expect this to happen before the year end. The renewal of Husum’s pulp mill is an important investment for us, given that it will enable the long-term development and growth of competitive paperboard business at the Husum mill integrate in the coming years. The investment will also take us closer to our ambitious goal of fossil-free mills by 2030.  

Growing consumption and the demand for sustainable packaging solutions will accelerate the need for innovations. In September, we opened a new Excellence Centre in Äänekoski’s unique bioeconomy ecosystem in Finland. The Excellence Centre aims to accelerate material and packaging innovations by utilizing state-of-the-art technology in R&D work, and to provide a collaboration platform for customers and technology partners globally. I’m very excited about the possibilities that the new Excellence Centre will provide us with now and in the future.”

Key figures

2020 2019 2020 2020 2019     2019
Q3 Q3 Q2 Q1–Q3 Q1–Q3 Q1–Q4
Sales, EUR million 471.2 489.2 473.1 1,416.4 1,453.4 1,931.8
EBITDA, EUR million 84.7 62.1 92.6 236.6 235.1 294.5
  comparable, EUR million 84.7 62.1 86.6 230.6 219.6 279.0
EBITDA, % of sales 18.0 12.7 19.6 16.7 16.2 15.2
  comparable, % of sales 18.0 12.7 18.3 16.3 15.1 14.4
Operating result, EUR million 62.5 42.5 66.5 162.7 160.8 180.8
  comparable, EUR million 62.5 42.5 60.5 156.7 145.3 184.4
Operating result, % of sales 13.3 8.7 14.1 11.5 11.1 9.4
  comparable, % of sales 13.3 8.7 12.8 11.1 10.0 9.5
Result before taxes, EUR million 58.1 38.8 63.9 150.8 148.6 165.6
  comparable, EUR million 58.1 38.8 57.8 144.8 133.1 169.2
Result for the period, EUR million 47.0 32.5 51.7 120.8 128.4 144.6
  comparable, EUR million 47.0 32.5 46.9 116.0 114.6 145.8
Earnings per share, EUR 0.13 0.09 0.15 0.34 0.36 0.41
  comparable, EUR 0.13 0.09 0.13 0.33 0.32 0.41
Return on equity, % 14.6 10.1 16.0 12.2 13.1 10.9
  comparable, % 14.6 10.1 14.5 11.7 11.7 11.0
Return on capital employed, % 14.3 9.7 15.3 12.2 12.1 10.2
  comparable, % 14.3 9.7 13.9 11.8 11.0 10.4
Equity ratio, % 59 58 58 59 58 59
Net gearing, % 21 27 24 21 27 23
Interest-bearing net liabilities/comparable EBITDA 1.0 1.2 1.1 1.0 1.2 1.1
Shareholders’ equity per share, EUR 3.69 3.65 3.57 3.69 3.65 3.76
Interest-bearing net liabilities, EUR million 277.3 351.8 305.5 277.3 351.8 307.8
Total investments, EUR million 44.4 17.9 43.3 117.5 42.2 98.9
Net cash flow from operations, EUR million 74.4 43.8 72.3 226.7 110.9 200.5
Personnel 2,398 2,382 2,662 2,398 2,382 2,351



Further information:

Jussi Noponen, CFO, tel. +358 10 465 4913
Katri Sundström, VP, Investor Relations, tel. +358 10 462 0101

Further information as of 1 p.m.

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: +358 981 710 310  

Sweden: +46 856 642 651

The United Kingdom: +44 333 300 0804    

The United States: + 1 631 913 1422   

The conference call ID is 81715944#.  



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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