OPERATING LOSS OF EUR 19.9 MILLION, EARN
M-real Corporation Stock Exchange Bulletin 26.7.2004 at 1.00 p.m. 1
(16)
OPERATING LOSS OF EUR 19.9 MILLION, EARNINGS PER SHARE: EUR 0.18
NEGATIVE
The M-real Groups operating result fell to a loss of EUR 19.9
million in the second quarter from a profit of EUR 0.8 million in the
previous quarter. Compared with the first quarter, the operating
result was weakened mainly by the costs of annual maintenance
shutdowns, the increased share of paper deliveries to the lower
profitability markets outside Western Europe as well as the lower
selling price and the seasonally lower delivery volume of uncoated
fine paper.
The lowering of Finlands corporate tax rate reduced the deferred tax
liability by EUR 21.4 million.
Key figures:
- Operating result: a loss of EUR 19.9 million (profit of 0.8 million
in the previous quarter)
- The result before extraordinary items was a loss of EUR 49.6
million (a loss of 28.3)
- Earnings per share: EUR 0.18 negative (0.17 negative)
- Result for the reporting period: a net loss of EUR 31.5 million
(profit of 142.4).
- Cash flow from operations: EUR 0.7 million negative (79.5 positive)
- Return on capital employed: 1.0 per cent negative (0.3 positive)
- Turnover: EUR 1,333.3 million (1,381.5).
- Equity ratio at the end of the period: 35.8 per cent (35.8)
- Capacity utilization rate at the paperboard mills: 86 per cent
(89); capacity utilization rate at the paper mills: 86 per cent (88)
The profitability of all businesses weakened. The decline in the
profitability of the Cartons business was due to the costs resulting
from annual maintenance shutdowns. The profitability of the Graphics
products and Speciality papers business was furthermore hurt by the
increased share of deliveries to the lower profitability markets
outside Western Europe. The profitability of the Offices business
were weakened in addition to the above-mentioned factors by the
seasonal drop in delivery volumes and a lower selling price.
Demand for paper has picked up in the first part of the year. M-
reals paperboard deliveries have grown markedly in the first half.
The price of coated fine paper remained at nearly the level of the
previous quarter, whereas the price of coated magazine paper declined
somewhat. In the last quarter of 2003 as well as in March 2004, M-
real announced price increases of 5-7 per cent in coated fine papers
in Europe, the Middle East and Asia. For the most part, the sought-
after price increases have failed to go through owing to overcapacity
in the industry and tough competition.
The prices of our main products is still unsatisfactory. I believe,
however, that if the growth in demand continues, well be able to
raise the price of paper, at least for coated grades, during the
coming autumn,ö says President and CEO Jouko M. Jaakkola, commenting
on the market situation.
Reviewing the near-term outlook, Jaakkola said, It will nevertheless
take time for selling prices to increase, and in the third quarter
were only expecting a slight seasonal improvement in profitability
compared with the second quarter. In the beginning of year 2004 we
announced a new EUR 200 million cost-savings and efficiency
improvement programme. Our estimate for this years savings under the
EUR 200 million programme has been revised to EUR 30 million.ö
M-REAL CORPORATION
Corporate communications
For further information, contact Jouko M. Jaakkola, President and
CEO, tel. +358 10 469 4118 or Juhani Pöhö, Senior Vice President and
CFO, tel. +358 10 469 5283
M-REAL CORPORATION
INTERIM REPORT 1 JANUARY - 30 JUNE 2004
APRIL-JUNE EARNINGS COMPARED WITH THE PREVIOUS QUARTER
In the second quarter M-real Groups operating result was a loss of
EUR 19.9 million (Jan.-Mar. 2004: profit of EUR 0.8 million). The
operating result does not include non-recurring income or expenses.
The operating result was weakened by the costs of annual maintenance
shutdowns, the increased share of paper deliveries to the lower
profitability markets outside Western Europe as well as the lower
selling price and seasonally lower delivery volume of uncoated fine
paper.
The profitability of all the businesses weakened.
Deliveries of paperboard to customers totalled 275,000 tonnes
(265,000 tonnes). Because of the imbalance between supply and demand,
production was curtailed by 21,000 tonnes (37,000) in line with
demand. The capacity utilization rate at the mills was 86 per cent
(89).
Paper deliveries from the mills totalled 995,000 tonnes (1,021,000).
Production curtailments amounted to 104,000 tonnes (110,000). The
capacity utilization rate at the mills was 86 per cent (88).
The effect of currency hedging on the operating result was a loss of
EUR 3.2 million (a loss of 12.5 million). At the end of June, the
exchange rate of the United States dollar against the euro was 0.6
per cent higher and the rate of the British pound against the euro
0.7 per cent lower than at the end of March. On average, the dollar
strengthened by 3.7 per cent and sterling by 1.9 per cent compared
with the previous quarter.
Turnover was EUR 1,333.3 million (1,381.5). Comparable turnover was
down 3.5 per cent.
Financial income and expenses resulted in a loss of EUR 29.7 million
(a loss of 29.1 million). They include a net exchange rate loss of
EUR 0.8 million on financial items (a gain of 5.2) as well as net
interest and other financial expenses of EUR 28.9 million (34.3).
Other operating income amounted to EUR 24.1 million (15.7). The sum
does not include non-recurring items.
The result before extraordinary items was a loss of EUR 49.6 million
(a loss of 28.3 million).
A loss of EUR 31.5 million was posted for the reporting period
(profit of 142.4 million). Taxes, including the change in the
deferred tax liability, were EUR 18.4 million negative (23.8). The
deferred tax liability decreased by a total of EUR 21.4 million owing
to the lowering of Finlands corporate tax rate from 29 per cent to
26 per cent. The result for the reporting period improved by a
corresponding amount.
Earnings per share were EUR 0.18 negative (0.17 negative).
The return on capital employed was 1.0 per cent negative (0.3
positive). The return on equity was 5.4 per cent negative (5.2
negative).
EARNINGS IN JANUARY-JUNE COMPARED WITH THE SAME PERIOD OF 2003
The operating result in the January - June period was a loss of EUR
19.1 million (profit of 82.2). Profitability was weakened above all
by the lower selling price of paper as well as the 11 per cent fall
in the exchange rate of the US dollar. The operating result was also
reduced by the divestment of Metsä Tissue in January 2004.
Apart from Cartons, the profitability of all the businesses weakened.
Deliveries of paperboard to customers totalled 540,000 tonnes
(511,000 tonnes). Production was curtailed by 58,000 tonnes in line
with demand (73,000). The capacity utilization rate was 87 per cent
(86).
The total volume of paper delivered was 2,016,000 tonnes (1,965,000).
Production curtailments amounted to 214,000 tonnes (225,000). The
capacity utilization rate of the paper mills was 87 per cent (87).
Turnover was EUR 2,714.8 million (3,102.7). Turnover was lowered by
the same factors as impacted the operating result. In comparable
terms, the fall in turnover was 2.6 per cent.
The result before extraordinary items was a loss of EUR 77.9 million
(a profit of 28.9 million). The result for the comparison period
includes an EUR 8.2 million non-recurring income item that was booked
to financial income and expenses.
PERSONNEL
The number of personnel at the end of June was 17,163 employees
(19,636 employees at 31 December 2003), of which 5,879 employees
worked in Finland (5,835). The net reduction in personnel was 2,473
employees. Acquisitions and divestments resulted in a net decrease of
3,155 employees in the headcount.
The Groups personnel includes 47 per cent of Metsä-Botnias
employees.
CAPITAL EXPENDITURES
Capital expenditures on fixed assets totalled EUR 84 million in
January-June (Jan.Jun. 2003: 89). In addition, in the comparison
period EUR 154 million was paid for the shares of acquired companies.
The investment project in the new BCTMP mill in Kaskinen, which will
have a total price tag of EUR 180 million, is progressing according
to plans. The earthworks have been completed for the most part and
construction of the mill building got under way at the beginning of
July. The mill will have an annual capacity of 300,000 tonnes of
bleached BCTMP pulp and is set to come on stream in August 2005.
ACQUISITIONS, DIVESTMENTS AND RESTRUCTURING
At the beginning of January, a 66 per cent stake in Metsä Tissue was
sold to Metsäliitto Osuuskunta in accordance with a Letter of Intent.
In addition, 17 per cent was sold to the Tapiola Group. At the end of
January, the remaining 17 per cent was sold to Varma Mutual Pension
Insurance Company (9.86 per cent) and Sampo Life Insurance Company
Limited (7.14 per cent). The transactions were carried out on the
same terms and conditions and were based on a debt-free value of EUR
570 million. The after-tax capital gain on the disposals was about
EUR 173 million.
FINANCING
Interest-bearing net liabilities amounted to EUR 2,614 million at the
end of June (Dec. 2003: 3,109).
The equity ratio was 35.8 per cent (Dec. 2003: 31.9) and the gearing
ratio was 113 per cent (Dec. 2003: 137).
Liquidity is good. Liquidity at the end of June was EUR 1,744
million, of which EUR 1,608 million consisted of binding long-term
credit commitments and EUR 136 million represented liquid funds and
investments (184). In addition, to meet its short-term financing
needs, the Group had at its disposal non-binding domestic and foreign
commercial paper programmes and credit facilities amounting to about
EUR 600 million.
At the end the reporting period an average of 4 months of net foreign
currency exposure was hedged. The degree of hedging during the period
varied between 4 and 5 months. At the end of the reporting period,
about 92 per cent of the shareholders equity not in euros was
hedged. At the end of the period the Groups liabilities were tied to
fixed interest rates for a period of 19 months. During the reporting
period the interest rate maturity has varied from 18 to 24 months.
In April, private placements to a total of EUR 120 million were drawn
down within the framework of the Medium-Term-Note programme.
SHARES
The highest price of M-reals Series B share on Helsinki Exchanges
during the January-June period was EUR 8.19 and the lowest price was
EUR 6.52. The average share price was EUR 7.33. In 2003 the average
price was EUR 7.26. The price of the Series B share was EUR 7.45 at
the end of the reporting period on 30 June 2004.
Turnover of the Series B share was EUR 359 million, or 34 per cent of
the shares outstanding. The market capitalization of the Series A and
B shares at 30 June 2004 totalled EUR 1,332 million.
At 30 June 2004 Metsäliitto Osuuskunta owned 38.5 per cent of M-real
Corporations shares and the voting rights conferred by these shares
was 64.2 per cent. International investors owned 36.1 per cent of the
shares.
The Board of Directors does not have current authorizations to carry
out share issues or issues of convertible bonds or bonds with
warrants.
CORPORATE GOVERNANCE
In accordance with the new Helsinki Exchanges recommendation on the
corporate governance of listed companies, M-real Corporations Board
of Directors decided at the beginning of April to set up an Audit
Committee, a Compensation Committee and a Nomination Committee. Each
committee will assist the Board of Directors in preparing matters
within its own area of responsibility. The Board has furthermore
confirmed written rules of procedure for the committees.
The members of the Audit Committee are Asmo Kalpala (chairman), CEO
of Tapiola Group, Kim Gran, President of Nokian Tyres plc and Erkki
Karmila, Executive Vice President of Nordic Investment Bank.
The members of the Compensation Committee are Antti Oksanen
(chairman), President of Metsäliitto Group, Erkki Karmila, Executive
Vice President of Nordic Investment Bank, and Arimo Uusitalo, Titular
Farming Counsellor.
The members of the Nomination Committee are Arimo Uusitalo
(chairman), Titular Farming Counsellor, Runar Lillandt, Titular
Farming Counsellor, and Antti Tanskanen, CEO of the OP Bank Group.
INVESTIGATIONS BY THE EU COMMISSIONS COMPETITION AUTHORITIES
On 25 May 2004 the EU Commissions competition authorities made a
visit of inspection at M-reals various offices. The visit was
connected with the competition authorities investigations into
alleged cooperation with competitors in the fine paper segment.
M-real has commissioned Herbert Smith, an international law firm, to
go through the documents that were handed over to the competition
authorities during the visit of inspection and to conduct the
internal investigations, which are continuing.
Related class action complaints have been brought against M-real in
the United States.
NEW PRESIDENT AND CEO
In June M-reals Board of Directors appointed Hannu Anttila, 49,
M.Sc. (Econ.), as the companys new President and CEO. Mr Anttila
took over as M-real's Senior Executive Vice President on 1 July 2004.
He will become Chief Operating Officer on 1 October 2004 and
President and CEO on 1 January 2005, when the present CEO, Jouko M.
Jaakkola, retires.
NEAR-TERM OUTLOOK
The European economy has been slow to recover in the first part of
the year. Most of the indicators of the overall economic trend are
pointing to a continuation of the revival in the European economy,
though growth forecasts for 2004 have been adjusted downward. In the
United States and Asia, on the other hand, economic growth has
remained robust, though there are signs that growth is tapering off.
Demand for paper has grown in the first part of the year. M-reals
deliveries, especially to markets outside western Europe, have
increased. The growth in demand is expected to continue as the
European economy revives. The markets for M-reals paper grades are
still characterized by oversupply, and production will have to be
curtailed in line with demand. A major change in the average price of
paper and folding boxboard is not expected to take place in the third
quarter.
M-real's third-quarter result before extraordinary items and
excluding non-recurring items is expected to be seasonally somewhat
better than the second quarter.
Espoo, 26 July 2004
BOARD OF DIRECTORS
BUSINESSES AND MARKET TRENDS
Cartons
II I 04 IV III II I-II I-II I-II
04 03 03 03 04 03 04
change
Turnover 210. 204. 196. 200. 196. 414. 412. +2.9%
1 1 2 3 9 2 5
Operating result 9.8 14.0 -2.3 15.1 2.5 23.8 20.6 -30.0%
Operating result, % 4.7 6.9 -1.2 7.5 1.2 5.7 5.0
Return on capital 4.9 6.7 -1.1 7.1 1.5 5.8 4.8
employed, %
Deliveries, 1,000 t 275 265 250 246 246 540 511 +3.8%
Paperboard 242 253 217 238 208 495 458 -4.4%
production, 1,000 t
Capacity 86 89 79 87 78 87 86
utilization rate, %
The Cartons business posted operating profit of EUR 9.8 million
(14.0). The weakening in profitability was due mainly to the costs of
annual maintenance shutdowns. The average capacity utilization rate
of the paperboard machines was 86 per cent (89). The average order
book at the end of June was about three weeks.
Deliveries by west European folding boxboard producers were at the
level of the previous quarter. M-reals deliveries of folding
boxboard grew by 5 per cent. Growth was strongest in North America.
No major change took place in the selling price of folding boxboard.
The delivery volume and selling price of linerboard was at the level
of the previous quarter. The price increases announced for the second
quarter failed for the most part to go through.
The volume of fluting delivered rose markedly from the low level of
the previous quarter. The price increases announced for the second
quarter were implemented, but the selling price is still at an
unsatisfactory level.
The operating result for January-June improved by 16 per cent on the
same period last year. The operating result was improved by the
increased delivery volume in all product groups as well as the cost
savings that were realized. The strengthening of the euro depressed
the euro-denominated selling price within all product groups.
Graphics products and Speciality papers
II I 04 IV III II I-II I-II I-II
04 03 03 03 04 03 04
change
Turnover 581. 591. 572. 578. 574. 1,172 1,196. -1.7%
1 1 6 7 6 .2 7
Operating result - 2.5 - 10.0 -2.1 -9.4 27.0
11.9 12.8
Operating result, -2.1 0.4 -2.2 1.7 -0.4 -0.8 2.3
%
Return on capital -1.6 0.5 -1.7 1.6 -0.2 -0.6 2.2
employed, %
Deliveries, 1,000 767 767 745 729 727 1,534 1,491 +0.0%
t
Production, 1,000 763 775 708 719 718 1,538 1,485 -1.6%
t
Capacity 85 87 80 83 83 86 86
utilization rate,
%
The Graphics products and Speciality papers business reported an
operating loss of EUR 11.9 million (a profit of 2.5 million). The
operating result was weakened above all by the costs of annual
maintenance shutdowns as well as the increased share of deliveries to
the lower profitability markets outside Western Europe.
Deliveries by west European producers of coated fine paper fell by 4
per cent and deliveries by producers of coated magazine paper rose by
4 per cent. M-reals delivery volume of coated fine paper rose by one
per cent and the volume of coated magazine paper by 2 per cent. M-
reals delivery volume for speciality paper fell.
The capacity utilization rate of the paper machines was 85 per cent
(87). The order book at the end of June was slightly more than two
weeks.
The average price of coated fine paper remained nearly at the level
of the previous quarter and the price of coated magazine paper fell
somewhat compared with the previous quarter. The price increases in
fine paper products that were announced for the second quarter
largely failed to go through. Prices of speciality papers were on
average at the previous quarters level.
Compared with the previous year, the operating result in January-June
was weakened by the 5 per cent fall in the price of coated fine paper
and the 3 per cent fall in the price of coated magazine paper. The
average price of speciality paper also fell. The strengthening of the
euro depressed the average selling price within all product groups.
The delivery volume of coated fine paper rose by 6 per cent and that
of speciality paper by 3 per cent. The delivery volume of coated
magazine paper fell by 9 per cent.
Offices
II I 04 IV III II I-II I-II I-II 04
04 03 03 03 04 03
change
Turnover 153. 175. 169. 151. 170. 328. 362. -12.9%
1 8 5 3 5 9 1
Operating result -6.2 3.5 8.6 3.9 13.9 -2.7 35.7
Operating result, -4.1 2.0 5.1 2.6 8.2 -0.8 9.9
%
Return on capital -3.2 2.1 4.1 2.0 5.7 -0.5 7.6
employed, %
Deliveries, 1,000 228 254 209 207 229 482 475 -10.2%
t
Production, 1,000 243 247 203 200 233 490 470 -1.6%
t
Capacity 87 92 75 72 89 89 91
utilization rate,
%
The Offices business reported an operating loss of EUR 6.2 million (a
profit of 3.5 million). Profitability was weakened by the lower
delivery volume, the costs of annual maintenance shutdowns, a lower
selling price and a less favorable sales mix.
Deliveries by west European producers of uncoated fine paper fell by
3 per cent. The volume of products delivered by the Offices business
was down 10 per cent, though it was at the level of the second
quarter of 2003. The capacity utilization rate of the paper machines
was 87 per cent (92). The order book at the end of June was slightly
more than three weeks.
Compared with the previous year, the operating result in January-June
was weakened by the 9 per cent fall in the average selling price. The
delivery volume was up somewhat.
Map Merchant Group
II I 04 IV III II I-II I-II I-II
04 03 03 03 04 03 04
change
Turnover 339. 354. 347. 332. 345. 693. 712. -4.2%
2 0 6 5 0 2 5
Operating result 3.0 3.8 0.4 -2.7 3.4 6.7 8.8 -21.0%
Operating result, % 0.9 1.1 0.1 -0.8 1.0 1.0 1.2
Return on capital 3.2 4.6 0.4 -2.3 4.0 3.9 4.9
employed, %
Deliveries, 1,000 t 319 333 327 312 317 652 644 +1.2%
The operating result of the Map paper merchanting business was a
profit of EUR 3.0 million (3.8). The delivery volume fell in
accordance with the normal seasonal trend. The efficiency-boosting
measures that have been carried out trimmed operating expenses
further.
The result in January-June was lower than in the same period of last
year.
M-REALGROUP (all figures unaudited)
PROFIT AND LOSS ACCOUNT 1-6/04 1-6/03 Change 1-12/03 4-6/04
(EUR million)
Turnover 2 714.8 3 102.7 -387.9 6 044.1 1 333.3
Interest in -3.7 -8.3 4.6 -5.2 -1.8
associated companies
Other operating 39.8 35.3 4.5 73.8 24.1
income
Operating expenses 2 555.8 2 807.9 252.1 5 557.9 1 267.8
Depreciation 214.2 239.6 25.4 481.0 107.7
Operating profit -19.1 82.2 -101.3 73.8 -19.9
% of turnover -0.7 2.6 1.2 -1.5
Net exchange 4.4 11.5 -7.1 20.7 -0.8
gains/losses
Other financial -63.2 -64.8 1.6 -174.7 -28.9
income
and expenses
Profit before -77.9 28.9 -106.8 -80.2 -49.6
extraordinary items
% of turnover -2.9 0.9 -1.3 -3.7
Extraordinary items 195.0 0.0 195.0 -15.1 0.0
Profit before taxes and 117.1 28.9 88.2 -95.3 -49.6
minority interest
% of turnover 4.3 0.9 -1.6 -3.7
Taxes -5.4 -9.0 3.6 -0.7 18.4
Minority interest -0.8 -0.9 0.1 1.0 -0.3
Profit for the period 110.9 19.0 91.9 -95.0 -31.5
% of turnover 4.1 0.6 -1.6 -2.4
Taxes include taxes corresponding to profit for the period.
BALANCE SHEET 6/2004 % 6/2003 %
(EUR million)
Assets
Fixed assets 4 298.7 66.2 4 860.1 67.2
Current assets
Inventories 733.9 11.3 827.8 11.4
Other current assets 1 319.9 20.4 1 412.4 19.5
Liquid funds 136.2 2.1 136.7 1.9
Total 6 488.7 100.0 7 237.0 100.0
Liabilities
Shareholders´ equity 2 303.3 35.5 2 359.6 32.6
Minority interest 18.6 0.3 23.1 0.3
Provisions for liabilities 64.3 1.0 58.7 0.8
and charges
Long-term liabilities 2 237.4 34.5 2 962.0 40.9
Short-term liabilities 1 865.1 28.7 1 833.6 25.4
Total 6 488.7 100.0 7 237.0 100.0
BALANCE SHEET 12/2003 %
(EUR million)
Assets
Fixed assets 4 768.7 67.1
Current assets
Inventories 802.0 11.3
Other current assets 1 351.9 19.0
Liquid funds 183.6 2.6
Total 7 106.2 100.0
Liabilities
Shareholders´ equity 2 245.3 31.6
Minority interest 18.9 0.3
Provisions for liabilities 77.4 1.1
and charges
Long-term liabilities 3 030.6 42.6
Short-term liabilities 1 734.0 24.4
Total 7 106,2 100,0
CASH FLOW STATEMENTS 1-6/04 1-6/03 1-12/03 4-6/04
(EUR million)
Profit before extraordinary -77.9 28.9 -80.2 -49.6
items
Depreciation 214.2 239.6 481.0 107.7
Taxation -8.2 -28.3 -19.0 -5.0
Other changes 2.5 23.5 35.5 7.7
Funds from operations 130.6 263.7 417.3 60.8
Change in working capital -51.8 -78.9 7.8 -61.5
Cash flow from operations 78.8 184.8 425.1 -0.7
Gross capital -84.2 -243.1 -396.7 -62.3
expenditures
Disposal and other changes 425.9 0.0 -2.5 0.0
in fixed assets
Cash flow after capital 420.5 -58.3 25.9 -63.0
expenditure
Interest-bearing net debt of 127.9 -8.5 -8.5 0.0
companies acquired and
divested
Dividend -53.7 -107.4 -107.4 0.0
Change in interest-bearing 494.7 -174.2 -90.0 -63.0
liabilities
(+ decrease/- increase)
KEY FIGURES 1-6/04 1-6/03 1-12/03 4-6/04
Earnings per share, EUR -0.35 0.11 -0.51 -0.18
Return on capital employed, % -0.3 3.2 1.6 -1.0
Return on equity, % -5.3 1.6 -3.8 -5.4
Gross capital expenditures, 84 243 397 62
EUR million 1)
Personnel, average 16 667 20 538 20 372 16 894
1) Excl. interest-bearing net debt of acquired
companies.
6/04 6/03 12/03
Shareholders´ equity per 12.87 13.18 12.54
share, EUR
Equity ratio, % 35.8 32.9 31.9
Gearing ratio, % 113 134 137
Securities and guarantees, 6/04 6/03 12/03
EUR million
For own loans 221 474 287
For associated companies 1 0 1
For affiliated companies 7 5 5
For others 11 10 15
Total 240 489 308
Open derivative contracts,
EUR million 6/04 6/03 12/03
Interest rate derivatives 14 206 11 189 13 017
Currency derivatives 4 624 7 118 4 601
Total 18 830 18 307 17 618
The fair value of open derivative contracts calculated at market
value at the end of the
review period was -4,8 EUR million (-10,5).
TURNOVER Quarter Quarterly
EUR Million I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 414.2 412.5 210.1 204.1 196.2 200.3 196.9
Graphics 1172.2 1196.7 581.1 591.1 572.6 578.7 574.6
products
and Speciality
papers
Offices 328.9 362.1 153.1 175.8 169.5 151.3 170.5
Map Merchant 693.2 712.5 339.2 354.0 347.6 332.5 345.0
Group
Internal sales 106.3 418.9 49.8 56.5 188.3 204.4 220.8
and
other operations
GROUP TOTAL 2714.8 3102.7 1333.3 1381.5 1474.2 1467.2 1507.8
TURNOVER
EUR Million I 03 IV 02 III 02
Cartons 215.6 212.5 216.6
Graphics 622.1 586.6 609.7
products
and Speciality
papers
Offices 191.6 200.8 183.4
Map Merchant 367.5 375.0 371.7
Group
Internal sales 198.1 212.4 222.7
and
other operations
GROUP TOTAL 1594.9 1587.3 1604.1
OPERATING PROFIT Quarter Quarterly
AND RESULT
EUR Million I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 23.8 20.6 9.8 14.0 -2.3 15.1 2.5
Graphics -9.4 27.0 -11.9 2.5 -12.8 10.0 -2.1
products
and Speciality
papers
Offices -2.7 35.7 -6.2 3.5 8.6 3.9 13.9
Map Merchant 6.7 8.8 3.0 3.8 0.4 -2.7 3.4
Group
Other operations -37.5 -9.9 -14.5 -23.0 -31.2 2.6 -2.9
OPERATING PROFIT -19.1 82.2 -19.9 0.8 -37.3 28.9 14.8
% of turnover -0.7 2.6 -1.5 0.1 -2.5 2.0 1.0
Net exchange 4.4 11.5 -0.8 5.2 9.7 -0.5 5.3
gains/
losses
Other financial -63.2 -64.8 -28.9 -34.3 -77.6 -32.3 -29.8
income
and expenses
PROFIT BEFORE -77.9 28.9 -49.6 -28.3 -105.2 -3.9 -9.7
EXTRAORDINARY
ITEMS
% of turnover -2.9 0.9 -3.7 -2.1 -7.1 -0.3 -0.6
OPERATING PROFIT
AND RESULT
EUR Million I 03 IV 02 III 02
Cartons 18.1 6.7 24.2
Graphics 29.1 25.7 40.5
products
and Speciality
papers
Offices 21.8 19.6 28.3
Map Merchant 5.4 -9.3 -5.9
Group
Other operations -7.0 8.0 10.0
OPERATING PROFIT 67.4 50.7 97.1
% of turnover 4.2 3.2 6.1
Net exchange 6.2 5.0 -16.9
gains/
losses
Other financial -35.0 -45.6 -38.7
income
and expenses
PROFIT BEFORE 38.6 10.1 41.5
EXTRAORDINARY
ITEMS
% of turnover 2.4 0.6 2.6
OPERATING Quarter Quarterly
PROFIT, %
I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 5.7 5.0 4.7 6.9 -1.2 7.5 1.2
Graphics -0.8 2.3 -2.1 0.4 -2.2 1.7 -0.4
products
and Speciality
papers
Offices -0.8 9.9 -4.1 2.0 5.1 2.6 8.2
Map Merchant 1.0 1.2 0.9 1.1 0.1 -0.8 1.0
Group
GROUP TOTAL -0.7 2.6 -1.5 0.1 -2.5 2.0 1.0
OPERATING
PROFIT, %
I 03 IV 02 III 02
Cartons 8.4 3.2 11.2
Graphics 4.7 4.4 6.6
products
and Speciality
papers
Offices 11.4 9.8 15.4
Map Merchant 1.5 -2.5 -1.6
Group
GROUP TOTAL 4.2 3.2 6.1
RETURN ON CAPITAL Quarter Quarter Year
EMPLOYED, %
I-II 2004 I-II 2003 2003
Cartons 5.8 4.8 3.9
Graphics products and -0.6 2.2 1.0
Speciality papers
Offices -0.5 7.6 5.4
Map Merchant Group 3.9 4.9 2.0
GROUP TOTAL -0.3 3.2 1.6
CAPITAL EMPLOYED, 30.6.04 30.6.03 31.12.03
EUR Million
Cartons 868.7 870.7 882.1
Graphics products and 2 715.0 2 812.5 2 849.7
Speciality papers
Offices 874.0 888.7 839.0
Map Merchant Group 406.2 389.0 383.2
Other assets 326.4 888.5 734.4
GROUP TOTAL 5 190.3 5 849.4 5 688.4
PERSONNEL, Quarter Quarter Year
average I-II 2004 I-II 2003 2003
Cartons 2 859 3 013 2 970
Graphics products and 6 704 7 054 6 957
Speciality papers
Offices 2 040 2 119 2 107
Map Merchant Group 2 520 2 582 2 554
Other operations 2 544 5 770 5 784
GROUP TOTAL 16 667 20 538 20 372
DELIVERIES Quarter Quarterly
1000 tons I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 1) 540 511 275 265 250 246 246
Graphics products 1534 1491 767 767 745 729 727
and Speciality
papers
Offices 482 475 228 254 209 207 229
Paper businesses 2016 1965 995 1021 955 937 956
total
Map Merchant 652 644 319 333 327 312 317
Group
DELIVERIES
1000 tons I 03 IV 02 III 02
Cartons 1) 265 270 268
Graphics products 763 717 687
and Speciality
papers
Offices 246 211 218
Paper businesses 1009 928 905
total
Map Merchant 328 317 307
Group
PRODUCTION Quarter Quarterly
1000 tons I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 495 458 242 253 217 238 208
paperboard mills
1)
Graphics products 1538 1485 763 775 708 719 718
and Speciality
papers
Offices 490 470 243 247 203 200 233
Paper mills total 2028 1954 1006 1022 912 919 950
Metsä-Botnia´s 579 549 279 300 270 305 269
pulp 2)
M-real´s pulp 750 721 369 381 368 350 355
PRODUCTION
1000 tons I 03 IV 02 III
02
Cartons 250 247 249
paperboard mills
1)
Graphics products 767 713 671
and Speciality
papers
Offices 237 207 231
Paper mills total 1004 921 902
Metsä-Botnia´s 280 249 294
pulp 2)
M-real´s pulp 366 358 340
OPERATING RATES, Quarter Quarterly
%
I-II I-II II 04 I 04 IV 03 III 03 II 03
2004 2003
Cartons 87 86 86 89 79 87 78
paperboard mills
1)
Graphics products 86 86 85 87 80 83 83
and Speciality
papers
Offices 89 91 87 92 75 72 89
Paper mills total 87 87 86 88 79 80 84
OPERATING RATES,
%
I 03 IV 02 III 02
Cartons 94 93 94
paperboard
mills1)
Graphics products 89 82 79
and Speciality
papers
Offices 93 79 88
Paper mills total 90 82 81
1) Equals to M-real´s ownership (47 % in Kemiart Liners).
2) Equals to M-real´s ownership (47 % in Metsä-Botnia).
M-REAL CORPORATION
Jouko M. Jaakkola
President and CEO
