SLACK DEMAND FOR PACKAGING BOARD AND PAP
M-real Corporation Stock Exchange Bulletin 28.7.2003 at 13.00 1 (15)
SLACK DEMAND FOR PACKAGING BOARD AND PAPER COUPLED WITH A FALL IN THE
SELLING PRICE OF PAPER CUT INTO M-REALS PROFITABILITY
In the second quarter, the M-real Groups operating profit fell to
EUR 14.8 million from EUR 67.4 million in the previous quarter. The
central reasons for the weakening in profitability were the fall in
demand for packaging board and paper in step with the general
economic situation, the fall in the selling price of paper, the
seasonal drop in the volume of paper delivered and the annual
maintenance shutdowns at the mills in Finland.
Key figures in the second quarter:
- Earnings per share: EUR 0.01 negative (previous quarter: EUR 0.12)
- Result before extraordinary items: a loss of EUR 9.7 million
(profit of 38.6)
- Operating profit: EUR 14.8 million (67.4)
- Cash flow from operations: EUR 31.2 million (153.6)
- Return on capital employed: 1.4 per cent (5.0)
- Turnover: EUR 1,507.8 million (1,594.9)
- Equity ratio at the end of the period: 32.9 per cent (32.6)
- 85 per cent capacity utilization rate at the paper mills (90), 78
per cent at the board mills (94)
The selling price of folding boxboard rose somewhat in Europe
compared with the previous quarter. The depreciation of the US dollar
and the British pound nevertheless depressed the average euro-
denominated selling price of both paperboard and paper.
President and CEO Jouko M. Jaakkola commented on the quarter and the
market situation as follows:
M-reals second-quarter profitability was very weak owing to the low
price of paper and the slack demand for paper and paperboard. In
addition, the annual maintenance costs at the mills in Finland
burdened quarter´s result.ö
The development programmes aiming at achieving annual cost savings
of EUR 295 million and increases in income are moving ahead according
to plans and will be seen to completion by the end of this year.ö
Demand for paper in Europe is not likely to pick up, except for the
seasonal upswing in the autumn. Production curtailments are
continuing. The price of paperboard will probably remain stable,
whereas paper prices may come under slight pressure.ö
M-REAL CORPORATION
Corporate communications
For further information, contact:
Jouko M. Jaakkola, President and CEO, M-real Corporation, tel. +358
10 469 4118, GSM +358 50 2261
Veli-Matti Mynttinen, Executive Vice President, M-real Corporation,
tel. +358 10 469 4655, GSM +358 50 2895
Heikki Saarinen, CFO, M-real Corporation, tel. +358 10 469 4686, GSM
+358 50 598 7142
M-REAL CORPORATION
INTERIM REPORT 1 JANUARY - 30 JUNE 2003
APRIL-JUNE EARNINGS COMPARED WITH THE PREVIOUS QUARTER
In the second quarter, the M-real Groups operating profit fell to
EUR 14.8 million from EUR 67.4 million in the previous quarter.
Operating profit accounted for 1.0 per cent of turnover (Jan.Mar.
2003: 4.2). The profitability of all the business areas weakened.
Metsä Tissues earnings also fell.
The weakening in the profitability of the Consumer packaging business
area was due mainly to the fall in demand for its main products in
the face of an uncertain economic situation and the Sars epidemic,
and it was further impacted by the annual maintenance costs at the
mills in Finland in June. The continued depreciation of the US dollar
and the British pound depressed further the average euro-denominated
selling price. Paperboard deliveries amounted to 265,000 tonnes
(283,000). Production at the mills was curtailed by 59,000 tonnes
(19,000) in line with demand. The capacity utilization rate was 78
per cent (94).
Demand for paper was down on the previous quarter. The weakening in
the profitability of paper was attributable primarily to the fall in
the delivery volume and selling price. The delivery volume fell due
to both seasonal factors and weaker demand in the wake of an
uncertain economic situation. The depreciation of the US dollar and
the British pound depressed the average euro-denominated selling
price. The delivery volume of coated fine paper declined by 5 per
cent, with uncoated fine paper down 7 per cent and magazine paper
down 4 per cent. The total volume of paper deliveries was 927,000
tonnes (975,000). Owing to the imbalance in supply and demand,
production curtailments had to be continued. Production curtailments
amounted to 126,000 tonnes (94,000). The capacity utilization rate of
the paper mills was 85 per cent (90).
The effect of the change in foreign exchange rates, including hedging
income, on operating profit was EUR 6.2 million positive (0.8
positive). By the end of June, the dollar had weakened by nearly 4.9
per cent and the pound sterling by 0.5 per cent compared with the end
of March. The average exchange rate of the US dollar against the euro
in April-June was 5.8 per cent lower and against the pound 4.7 per
cent lower than in the previous quarter.
Turnover was EUR 1,507.8 million (1,594.9).
Net financial expenses were EUR 24.5 million (28.8). Financial
expenses include a gain on foreign exchange of EUR 5.3 million (6.2)
as well as non-recurring income of EUR 8.2 million that was realized
on an interest rate swap. Net interest and other financial expenses
amounted to EUR 29.8 million (35.0).
Other operating income amounted to EUR 23.2 million (12.1). The sum
does not include major non-recurring items.
The result before extraordinary items was a loss of EUR 9.7 million
(profit of 38.6 million).
The second-quarter result was a net loss of EUR 2 million (net profit
of 21.0 million in Apr.-June 2002). Tax proceeds, including the
change in the deferred tax liability and the tax refunds for the
companies in Germany and additional assessments (net proceeds of EUR
9.2 million) were EUR 8.3 million (tax expenses of 17.3 million in
Apr.-June 2002).
Earnings per share were EUR 0.01 negative (0.12 positive).
The return on capital employed was 1.4 per cent (5.0). The return on
equity was 0.2 per cent negative (3.5).
EARNINGS IN JANUARY-JUNE COMPARED WITH THE SAME PERIOD OF 2002
Operating profit in January-June was EUR 82.2 million (Jan.-June
2002: 176.5 million). The profitability of all business areas
weakened except for the Map Merchant Group business. The main factors
that weakened profitability were the lower selling prices of paper as
well as the 23 per cent drop in the exchange rate of the US dollar
and the 10 per cent average fall in the British pound. The cheaper
dollar hit the profitability of the Consumer packaging business area
particularly hard. Operating profit was also reduced by the disposal
of the shareholding in Albbruck in June 2002.
Turnover was EUR 3,102.7 million (3,372.8). Turnover was lowered by
the same factors as impacted operating profit. In comparable terms,
the fall in turnover was 7 per cent.
Consolidated profit before extraordinary items was EUR 28.9 million
(82.7).
PERSONNEL
The number of personnel at the end of June was 21,230 employees
(21,659 employees at 30 June 2002), of which 6,848 employees worked
in Finland (7,003). The net increase in personnel as a consequence of
acquisitions and divestments was 415 employees.
The Groups personnel includes 47 per cent of Metsä-Botnias
employees.
The payroll at the end of 2002 was 20,323 employees.
CAPITAL EXPENDITURES ON FIXED ASSETS
M-reals total capital expenditures in January-June amounted to EUR
89 million. In addition, about EUR 154 million has been paid as the
purchase price of shares in acquired companies.
ACQUISITIONS, DIVESTMENTS AND RESTRUCTURING
In January M-real purchased from SCA the shares which the company
owned in Metsä Tissue Corporation (19.27 per cent of the shares
outstanding). In addition, in January M-real purchased shares from
other Metsä Tissue owners, raising M-reals holding in Metsä Tissue
to over 90 per cent. By way of the mandatory redemption process in
accordance with the Securities Market Act and the Companies Act, M-
reals holding rose to 100 per cent in June, and Metsä Tissue was
delisted from the Main List of Helsinki Exchanges on 19 June. The
total price of the Metsä Tissue shares and stock options purchased
during January-June was about EUR 128 million.
In March, M-real purchased 24.7 per cent of the shares in Oy Hangö
Stevedoring Ab, raising M-reals holding in the company to 100 per
cent.
During the report period Metsä Tissue purchased additional shares in
its subsidiary Zaklady Papiernicze Krapkowicach SA, bringing Metsä
Tissues holding in ZPK to 100 per cent.
The acquisition of the Czech office paper merchant Narpex, which Map
Merchants agreed in December, entered into force in the Czech
Republic in January. Also in January, Map Merchants acquired the
shares held by minority shareholders in its Danish subsidiary Schramm-
Papirgros A/S (30.7 per cent of the shares). On 14 March, Metsä-
Botnia announced that it was purchasing 60 per cent of the shares in
the Uruguayan company Compania Forestal Oriental S.A (FOSA) from
Shell International Renewables BV.
On 4 June, M-real announced it had made a bid to the Portuguese State
for a 25 per cent stake in the Portuguese pulp and paper company
Portucel Group. As part of its offer, M-real was to transfer its Home
& Office business area to Portucel. This was to include the Home &
Office business areas four paper mills and one pulp mill: Wifsta in
Sweden, Alizay (paper and pulp) and Pont Sainte Maxence in France and
the New Thames mill in Great Britain. The production of uncoated fine
paper at the Husum paper mill was to be sold to Portucel on a long-
term agreement.
On 11 June M-real announced that it had signed an agreement on a
strategic partnership with IBM Global Services concerning the
delivery of business applications and basic information technology
services to M-reals units worldwide. The agreement provides for the
transfer of M-reals own information technology services business and
Logisware Oys entire operations to IBMs organization, and it will
come into force on 1 September 2003. The agreement is subject to
approval by the competition authorities.
FINANCING
Interest-bearing net liabilities amounted to EUR 3,193 million at the
end of June (Dec. 2002: 3,019 million).
The equity ratio was 32.9 per cent (June 2002: 33.3, Dec. 2002: 34.2)
and the gearing ratio was 134 per cent (June 2002: 124, Dec. 2002:
119). The equity ratio and gearing ratio were weakened during the
period by the purchase of the Metsä Tissue shares as well as by the
dividend payout on 27 March.
Liquidity is good. Liquidity at the end of June was EUR 1,317
million, of which EUR 1,180 million consisted of binding long-term
credit commitments and EUR 137 million represented liquid funds and
investments. 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 700
million.
At the end of June an average of 4.9 months of net foreign currency
exposure was hedged. The degree of hedging during the report period
has varied between 3.8 and 5.2 months. At the end of the report
period, about 96 per cent of the shareholders equity not in euros
was hedged. At the end of June, the Groups liabilities were tied to
fixed-interest rates for a period of 16 months. During January-June,
the fixed-rate period has varied from 12 to 16 months.
In May Standard & Poors confirmed that its credit rating for M-real's
long-term loans was BBB- and the credit rating for M-reals short-
term loans was A3, with a negative outlook. Previously, the credit
rating institution had judged the outlook to be neutral. Moodys´s
credit rating for M-reals long-term loans is Baa3 and for short-term
loans it is P3, with a negative outlook.
SHARES
The highest price of M-reals Series B share on Helsinki Exchanges
during the January-June period was EUR 8.75 and the lowest price was
EUR 6.25. The average share price was EUR 6.98. In 2002 the average
price was EUR 8.28. The price of the Series B share was EUR 6.86 at
the end of the report period, 30 June 2003.
Turnover of the Series B share was EUR 329 million, or 33 per cent of
the shares outstanding. The market capitalization of the Series A and
B shares at 30 June 2003 totalled EUR 1,221 million.
At 30 June 2003 Metsäliitto Osuuskunta owned 38.5 per cent of M-real
Corporations shares and 64.2 per cent of the voting rights conferred
by these shares. International investors owned 34.4 per cent of the
shares.
The Board of Directors does not have valid authorizations to carry
out a share issue or issues of convertible bonds or bonds with
warrants.
NEW ORGANIZATION
In June M-real streamlined its organization with the aim of boosting
competitiveness and the efficiency of customer service. The Group now
comprises the Marketing & Sales and Operations organizations as well
as the corporate functions supporting them.
The business areas and sales units belong to the Marketing & Sales
organization. The business areas are Cartons, Graphics, Offices and
Specialities. In addition, the Map paper merchanting business and
Metsä Tissue belong to the Group.
M-reals financial reporting will continue in accordance with the old
organizational structure up to the end of the current financial year.
NEAR-TERM OUTLOOK
The recession in Europe appears to be continuing. Demand for
paperboard and paper is not estimated to revive this year. In the
United States, there are some isolated signs of a pickup in the
economy and paper consumption, but the main economic indicators do
not point clearly to the course which future developments will take.
In September-November, a seasonal rise in the demand for paper is
expected. A cyclical upswing, however, is not anticipated and price
pressure will continue.
Espoo, 28 July 2003
BOARD OF DIRECTORS
BUSINESS AREAS AND MARKET TRENDS
Consumer packaging
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 211. 229. 227. 231. 232. 921. -8.0%
6 9 0 7 4 1
Operating profit 2.0 18.6 7.0 25.3 17.3 83.4
Operating profit, % 0.9 8.1 3.1 10.9 7.4 9.1
Return on capital 1.3 7.8 3.7 11.1 7.8 9.1
employed, %
Mill deliveries, 265 283 283 284 287 1129 -6.4%
1,000 t
Board mills capacity 78 94 92 94 89 91
utilization rate, %
The Consumer packaging business areas operating profit in the second
quarter was EUR 2.0 million (Jan.-Mar. 2003: 18.6). The weakening in
the profitability was due mainly to the fall in demand for the
business areas main products owing to the uncertain economic
situation and the Sars epidemic as well as to the annual maintenance
costs in Finland in June. The continued weakening in the US dollar
and British pound eroded the average selling price of the main
product groups compared with the previous quarter. The capacity
utilization rate was 78 per cent (94).
Deliveries by west European folding boxboard producers were down 3
per cent on the previous quarter. M-reals total delivery volume
declined by 9 per cent. The selling price in western Europe rose
slightly. The depreciation of the US dollar and the British pound
nonetheless depressed the average euro-denominated selling price.
The delivery volume of linerboard was down 4 per cent on the previous
quarter. The selling price was unchanged. The depreciation of the US
dollar nevertheless depressed the average euro-denominated selling
price.
The weak demand for fluting continued. The delivery volume declined
by 10 per cent.
Deliveries of wallpaper base declined slightly in step with the
worldwide drop in demand for wallpaper base. Selling prices also
fell.
Commercial printing
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 372. 403. 368. 403. 412. 1 -7.6%
8 6 1 6 5 638.4
Operating profit 5.1 18.3 16.6 22.9 28.3 106.7
Operating profit, % 1.4 4.5 4.5 5.7 6.9 6.5
Return on capital 1.4 5.3 4.4 5.6 7.0 7.1
employed, %
Mill deliveries, 439 460 425 419 441 1 757 -4.6%
1,000 t
Capacity utilization 83 86 79 74 82 81
rate, %
The Commercial printing business areas operating profit was EUR 5.1
million (18.3). The weakening in operating profit was attributable
mainly to the fall in the delivery volume. The delivery volume fell
on both a seasonal basis and due to the weakening in demand caused by
the uncertain economic situation in western Europe, especially in
Germany. No major change took place in prices in the main markets in
Europe. The depreciation of the United States dollar and British
pound nevertheless caused a drop in the industrys average selling
price compared with the previous quarter.
Deliveries by west European producers of coated fine paper fell by 8
per cent compared with the previous quarter. The delivery volume of
the Commercial printing business areas products fell by 5 per cent.
The average running time of the paper machines was 2 days shorter
than in the previous quarter and the capacity utilization rate was 83
per cent (86). The order book was 10 days at the end of June.
Zanders was transferred to the Commercial printing business area as
from the beginning of 2003. The figures for 2002 have been adjusted
accordingly.
Home & Office
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 181. 191. 200. 183. 183. 782. -5.1%
8 6 8 4 7 7
Operating profit 13.9 21.8 19.6 28.3 26.1 102.
8
Operating profit, % 7.6 11.4 9.8 15.4 14.2 13.1
Return on capital 5.7 9.4 10.0 11.0 10.6 11.0
employed, %
Mill deliveries, 229 246 211 218 223 902 -6.9%
1,000 t
Capacity utilization 89 93 79 88 91 89
rate, %
The Home & Office business area generated operating profit of EUR
13.9 million (21.8). The weakening in profitability was attributable
mainly to the fall in the delivery volume, the lower selling price,
the product mix and increased deliveries to markets outside Europe.
The delivery volume fell on both a seasonal basis and due to the
weakening in demand caused by the uncertain economic situation in
western Europe.
Deliveries by west European producers of uncoated fine paper declined
by 13 per cent compared with the previous quarter. The Home & Office
business areas delivery volume declined by 7 per cent. The average
running time of the paper machines was 3 days shorter than in the
previous quarter and the capacity utilization rate was 89 per cent
(93). The order book at the end of June was little over two weeks.
Publishing
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 187. 204. 204. 191. 193. 790. -8.4%
1 2 0 0 5 1
Operating profit -6.7 10.3 8.8 16.5 0.9 43.1
Operating profit, % -3.6 5.0 4.3 8.6 0.5 5.5
Return on capital -2.1 3.5 2.7 5.8 0.6 3.6
employed, %
Mill deliveries, 258 269 255 234 235 977 -4.1%
1,000 t
Capacity utilization 84 93 87 87 77 84
rate, %
The Publishing business area reported an operating loss of EUR 6.7
million (an operating profit of EUR 10.3 million). Profitability was
weakened by a lower delivery volume, the continued fall in the
selling price as well as the annual maintenance costs at the
Publishing business areas mills in Finland. In addition, the
depreciation of the US dollar and the British pound caused a decrease
in the average selling price in euros.
Deliveries by west European producers of coated magazine paper (LWC)
rose by 3 per cent compared with the previous quarter. The Publishing
business areas delivery volume fell by 4 per cent. The average
running time of the paper machines was 7 days shorter than in the
previous quarter and the capacity utilization rate was 84 per cent
(93). The order book at the end of June was slightly less than three
weeks.
Map Merchant Group
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 345. 367. 375. 371. 387. 1 -6.2%
0 9 0 7 1 542.8
Operating profit 3.4 5.4 -9.3 -5.9 -0.9 -14.9
Operating profit, % 1.0 1.5 -2.5 -1.6 -0.2 -1.0
Return on capital 4.0 5.8 -9.0 -4.0 -0.8 -3.0
employed, %
Delivery volumes, 308 317 311 307 314 1 270 -2.8%
1,000 t
The Map Merchant Group reported operating profit of EUR 3.4 million
(5.8). The weakening in profitability was due to the fall in both the
selling price and the delivery volume. The market situation remained
difficult.
OTHER BUSINESSES
Metsä Tissue Corporation
II I IV III II 2002 I-II
03 03 02 02 02 03
change
Turnover 169. 164. 170. 162. 155. 647. -2.6%
0 7 7 2 7 8
Operating profit 8.3 11.7 5.9 17.2 8.4 43.1
Operating profit, % 4.9 7.1 3.5 10.6 5.4 6.7
Return on capital 10.2 14.5 7.6 21.0 10.5 13.2
employed, %
Metsä Tissues operating profit in the second quarter was EUR 8.3
million (11.7). Profitability was weakened by the rise in raw
material costs and a slower selling period than is usual for the
season. Operating profit was boosted by the slight rise in the
delivery volume.
Operating profit in January-June was EUR 20.0 million (Jan.-June
2002: 20.0 million). Profitability was lifted by the rise in the
delivery volume together with an improved product range.
Profitability was weakened by the extra costs of starting up new
production lines. Average selling prices were slightly below the
previous years level.
In January-June, Metsä Tissue Corporations share price registered a
high of EUR 12.37 and a low of EUR 9.51. The company was delisted
from the Main List of Helsinki Exchanges on 19 June. The last quoted
price of the share was EUR 12.30. Share turnover was EUR 127.7
million, representing 34.7 per cent of the total number of shares
outstanding. The companys market capitalization at 19 June 2002 was
EUR 369 million. At the end of the financial year M-real owned 100
per cent of Metsä Tissues shares.
M-REALGROUP (all figures unaudited)
PROFIT AND LOSS ACCOUNT 1-6/03 % 1-6/02 %
(EUR million)
Turnover 3 102,7 100,0 3 372,8 100,0
Interest in -8,3 -3,6
associated companies
Other operating 35,3 30,9
income
Operating expenses 2 807,9 2 989,4
Depreciation 239,6 234,2
Operating profit 82,2 2,6 176,5 5,2
Net exchange 11,5 -18,6
gains/losses
Other financial -64,8 -1,7 -75,2 -2,7
income
and expenses
Profit before 28,9 0,9 82,7 2,5
extraordinary items
Extraordinary items 0,0 143,2
Profit before taxes and 28,9 0,9 225,9 6,7
minority interest
Taxes -9,0 -37,0
Minority interest -0,9 -5,0
Profit for the period 19,0 0,6 183,9 5,5
PROFIT AND LOSS ACCOUNT Change % 1-12/02 %
(EUR million)
Turnover -270,1 -8,0 6 564,2 100,0
Interest in -4,7 -4,9
associated companies
Other operating 4,4 73,4
income
Operating expenses 181,5 5 850,7
Depreciation -5,4 457,7
Operating profit -94,3 -53,4 324,3 4,9
Net exchange 30,1 -30,5
gains/losses
Other financial 10,4 -159,5 -2,9
income
and expenses
Profit before -53,8 -65,1 134,3 2,0
extraordinary items
Extraordinary items -143,2 144,5
Profit before taxes and -197,0 -87,2 278,8 4,2
minority interest
Taxes 28,0 -59,8
Minority interest 4,1 -10,1
Profit for the period -164,9 -89,7 208,9 3,2
PROFIT AND LOSS ACCOUNT 4-6/03 %
(EUR million)
Turnover 1 507,8 100,0
Interest in -5,3
associated companies
Other operating 23,2
income
Operating expenses 1 390,8
Depreciation 120,1
Operating profit 14,8 1,0
Net exchange 5,3
gains/losses
Other financial -29,8 -1,6
income
and expenses
Profit before -9,7 -0,6
extraordinary items
Extraordinary items 0,0
Profit before taxes and -9,7 -0,6
minority interest
Taxes 8,3
Minority interest -0,6
Profit for the period -2,0 -0,1
Taxes include taxes corresponding to profit for the period.
BALANCE SHEET 6/2003 % 6/2002 %
(EUR million)
Assets
Fixed assets 4 860,1 67,2 4 929,4 65,7
Current assets
Inventories 827,8 11,4 838,1 11,2
Other current assets 1 412,4 19,5 1 554,0 20,7
Liquid funds 136,7 1,9 176,4 2,4
Total 7 237,0 100,0 7 497,9 100,0
Liabilities
Shareholders´ equity 2 359,6 32,6 2 746,3 36,6
Minority interest 23,1 0,3 61,6 0,8
Provisions for liabilities 58,7 0,8 103,8 1,4
and charges
Long-term liabilities 2 962,0 40,9 2 956,5 39,4
Short-term liabilities 1 833,6 25,4 1 629,7 21,8
Total 7 237,0 100,0 7 497,9 100,0
BALANCE SHEET 12/2002 %
(EUR million)
Assets
Fixed assets 4 934,5 66,6
Current assets
Inventories 814,9 11,0
Other current assets 1 460,9 19,7
Liquid funds 199,9 2,7
Total 7 410,2 100,0
Liabilities
Shareholders´ equity 2 461,0 33,2
Minority interest 74,6 1,0
Provisions for liabilities 66,3 0,9
and charges
Long-term liabilities 3 030,3 40,9
Short-term liabilities 1 778,0 24,0
Total 7 410,2 100,0
CASH FLOW STATEMENTS 1-6/03 1-6/02 1-12/02 4-6/03
(EUR million)
Profit before extraordinary 28,9 82,7 134,3 -9,7
items
Depreciation 239,6 234,2 457,7 120,1
Taxation -28,3 -44,9 -56,7 -4,1
Other changes 23,5 8,9 -14,3 7,7
Funds from operations 263,7 280,9 521,0 114,0
Change in working capital -78,9 75,4 145,4 -82,8
Cash flow from operations 184,8 356,3 666,4 31,2
Gross capital -243,1 -115,0 -310,0 -55,1
expenditures 1)
Disposal and other changes 0,0 235,0 223,9 0,0
in fixed assets
Cash flow after capital -58,3 476,3 580,3 -23,9
expenditure
Interest-bearing net debt of -8,5 9,4 -9,0 0,0
companies acquired and
divested
Dividend -107,4 -108,4 -108,4 0,0
Change in interest-bearing -174,2 377,3 462,9 -23,9
liabilities
(+ decrease / - increase)
1) Excl. interest-bearing net debt of acquired companies.
KEY FIGURES 1-6/03 1-6/02 1-12/02 4-6/03
Earnings per share, EUR 0,11 0,23 0,36 -0,01
(diluted 1-6/03; 0,11 EUR)
Return on capital employed, % 3,2 6,4 5,8 1,4
Return on equity, % 1,6 3,7 3,0 -0,2
Gross capital expenditures, 243 115 310 55
EUR million 1)
Personnel, average 20 538 21 373 21 070 20 857
6/03 6/02 12/02
Shareholders´ equity per 13,18 13,61 13,75
share, EUR
Equity ratio, % 32,9 33,3 34,2
Gearing ratio, % 134 124 119
Securities and guarantees, EUR 6/03 6/02 12/02
million
For own loans 474 533 487
For associated companies 0 1 0
For affiliated companies 5 5 26
For others 10 26 5
Total 489 565 518
Open derivative contracts, Gross Gross Gross
EUR million amount amount amount
6/03 6/02 12/02
Interest rate derivatives 11 189 8 948 9 998
Currency derivatives 7 118 7 960 4 832
Total 18 307 16 908 14 830
1) Excl. interest-bearing net debt of acquired companies.
TURNOVER Quarter I-II Quarterly
EUR Million 2003 2002 II 03 I 03 IV 02 III 02 II 02
Consumer 441,5 462,4 211,6 229,9 227,0 231,7 232,4
packaging
Commercial 776,4 866,7 372,8 403,6 368,1 403,6 412,5
printing
Home & Office 373,4 398,5 181,8 191,6 200,8 183,4 183,7
Publishing 391,3 395,1 187,1 204,2 204,0 191,0 193,5
Map Merchant 712,5 796,1 345,0 367,5 375,0 371,7 387,1
Group
Metsä Tissue 333,7 314,9 169,0 164,7 170,7 162,2 155,7
Internal sales 73,9 139,1 40,5 33,4 41,7 60,5 71,8
and other
operations
GROUP TOTAL 3 102,7 3 372,8 1507,8 1594,9 1587,3 1604,1 1636,7
OPERATING PROFIT Quarter I-II Quarterly
AND RESULT
EUR Million 2003 2002 II 03 I 03 IV 02 III 02 II 02
Consumer 20,6 51,1 2,0 18,6 7,0 25,3 17,3
packaging
Commercial 23,4 67,2 5,1 18,3 16,6 22,9 28,3
printing
Home & Office 35,7 54,9 13,9 21,8 19,6 28,3 26,1
Publishing 3,6 17,9 -6,7 10,3 8,8 16,5 0,9
Map Merchant 8,8 0,3 3,4 5,4 -9,3 -5,9 -0,9
Group
Metsä Tissue 20,0 20,0 8,3 11,7 5,9 17,2 8,4
Other -29,9 -34,9 -11,2 -18,7 2,1 -7,2 -22,4
operations
OPERATING 82,2 176,5 14,8 67,4 50,7 97,1 57,7
PROFIT
% of turnover 2,6 5,2 1,0 4,2 3,2 6,1 3,5
Net exchange 11,5 -18,6 5,3 6,2 5,0 -16,8 0,2
gains/losses
Other financial -64,8 -75,2 -29,8 -35,0 -45,6 -38,7 -37,2
income and
expenses
PROFIT BEFORE 28,9 82,7 -9,7 38,6 10,1 41,5 20,7
EXTRAORDINARY
ITEMS
% of turnover 0,9 2,5 -0,6 2,4 0,6 2,6 1,3
OPERATING Quarter I-II Quarterly
PROFIT, %
2003 2002 II 03 I 03 IV 02 III 02 II 02
Consumer 4,7 11,1 0,9 8,1 3,1 10,9 7,4
packaging
Commercial 3,0 7,8 1,4 4,5 4,5 5,7 6,9
printing
Home & Office 9,6 13,8 7,6 11,4 9,8 15,4 14,2
Publishing 0,9 4,5 -3,6 5,0 4,3 8,6 0,5
Map Merchant 1,2 0,0 1,0 1,5 -2,5 -1,6 -0,2
Group
Metsä Tissue 6,0 6,4 4,9 7,1 3,5 10,6 5,4
GROUP TOTAL 2,6 5,2 1,0 4,2 3,2 6,1 3,5
RETURN ON CAPITAL I - II Q Year
EMPLOYED, %
2003 2002 2001
Consumer packaging 4,7 9,1 14,9
Commercial printing 3,4 7,1 6,2
Home & Office 7,6 11,0 6,2
Publishing 0,7 3,6 5,7
Map Merchant Group 4,9 -3,0 -0,8
Metsä Tissue 12,2 13,2 10,3
GROUP TOTAL 3,2 5,8 6,9
CAPITAL EMPLOYED, 6/03 12/02 12/01
EUR Million
Consumer packaging 932,0 991,0 934,0
Commercial printing 1 527,1 1 567,5 1 621,1
Home & Office 888,7 973,7 1 018,4
Publishing 1 224,3 1 256,2 1 378,2
Map Merchant Group 389,0 410,4 484,8
Metsä Tissue 335,9 325,5 342,3
Other assets 552,4 372,8 515,1
GROUP TOTAL 5 849,4 5 897,1 6 293,8
PERSONNEL, I - II Q I - II Q I - IV Q
average 2003 2002 2002
Consumer packaging 3 094 3 173 3 151
Commercial printing 5 370 5 984 5 831
Home & Office 2 119 2 111 2 125
Publishing 1 603 1 888 1 769
Map Merchant Group 2 582 2 798 2 745
Metsä Tissue 3 333 2 958 3 067
Other operations 2 437 2 461 2 382
GROUP TOTAL 20 538 21 373 21 070
PRODUCTION Quarter I-II Quarterly
1000 tons 2003 2002 II 03 I 03 IV 02
Commercial printing 907 915 446 461 436
Home & Office 470 477 233 237 207
Publishing 1) 537 490 254 283 256
Paperboard 337 339 154 183 173
Fluting 86 103 38 48 57
Liner 2) 74 74 33 41 37
CTMP 159 125 77 82 76
Metsä-Botnias pulp 2) 549 514 269 280 249
M-reals pulp 614 593 303 311 308
PRODUCTION Quarterly
1000 tons III 02 II 02 I 02 IV 01 III 01
Commercial printing 406 448 467 432 425
Home & Office 231 233 244 207 199
Publishing 1) 244 235 255 242 246
Paperboard 167 169 170 152 170
Fluting 64 49 54 60 57
Liner 2) 40 39 35 36 35
CTMP 79 63 62 49 34
Metsä-Botnias pulp 2) 294 250 264 234 258
M-reals pulp 290 304 289 264 251
1) Includes 50 % of the production in Albbruck (until 30.6.2002).
2) Equals to M-real´s ownership (47 %).
