Metsä Group's comparable operating result in January–March 2021 was EUR 174 million
Metsä Group Interim Report January–March 2021, 28 April 2021 at 12:00 noon EEST
JANUARY–MARCH 2021 (1–3/2020)
- Sales were EUR 1,400 million (1,253).
- Operating result was EUR 136 million (61). Comparable operating result was EUR 174 million (62).
- Result before taxes was EUR 121 million (46). Comparable result before taxes was EUR 160 million (48).
- Comparable return on capital employed was 12.6% (4.9).
- Net cash flow from operations was EUR 95 million (36).
EVENTS DURING THE FIRST QUARTER OF 2021
- The dollar-denominated average market prices of long-fibre and short-fibre pulp increased compared to the previous quarter.
- The delivery volumes of paperboards were record high and demand remained strong.
- Metsä Fibre made an investment decision on the construction of Kemi’s new bioproduct mill. The investment’s value is approximately EUR 1.6 billion.
- Metsä Board initiated pre-engineering related to an increase of Husum mill’s annual folding boxboard production capacity by approximately 200,000 tonnes.
- Metsä Board sold a 30% share of the Husum pulp mill to Norra Skog.
- Metsä Group kicked off a EUR 150 million project to renew its ERP system.
- Metsä Spring launched the textile fibre brand Kuura.
THE CORONAVIRUS PANDEMIC
Metsä Group has three key priorities in its operations when it comes to stopping the coronavirus pandemic: personnel safety, full participation in combating the pandemic as part of society and ensuring business continuity. Metsä Group follows and complies with the guidelines issued by the authorities with regard to the coronavirus. Minimising physical contact is the most important precautionary measure. Metsä Group’s resources have remained normal during the coronavirus pandemic. Production and deliveries have run normally, barring a few exceptions.
EVENTS AFTER THE REVIEW PERIOD
Sari Pajari-Sederholm was appointed Metsä Group’s EVP, Strategy as of 1 May 2021. She has worked within Metsä Group since 2007 e.g. as the Metsä Group’s CIO and in various management positions in the paperboard business, Metsä Board. Pajari-Sederholm moves to her new role from the position of Metsä Board’s SVP, Sales and Marketing. In her new position Pajari-Sederholm is responsible for the planning, preparation and implemen-tation support of Metsä Group’s strategy, as well as various business development programmes.
RESULT GUIDANCE FOR APRIL–JUNE 2021
Metsä Group’s comparable operating result is in April-June 2021 expected to improve from January-March 2021.
BOARD OF DIRECTORS’ PROPOSAL ON THE USE OF THE SURPLUS ON THE BALANCE SHEET
Metsäliitto Cooperative’s Board of Directors proposes to the Representative Council set to convene on 28 April 2021 that an interest of 6.0% for 2020 be paid on the statutory capital invested by members (6.5 for 2019), 5.0% (6.0) on additional members’ capital A and 1.0% (2.0) on additional members’ capital B. In total, the proposed distribution of profit would amount to around EUR 66 million (72).
President and CEO Ilkka Hämälä:
"As expected, Metsä Group’s result in the first quarter of 2021 was stronger than that of the previous quarter. The rise in pulp prices which began in Chinese markets in late 2020 continued throughout the first quarter and was exceptionally strong. Europe’s market prices began to increase in Asia’s footsteps. The market situation in the paperboard business, which remained good throughout 2020, grew even stronger, and prices were on the rise both in folding boxboard and linerboards.
Construction in Europe picked up, driving demand in the mechanical forest industry, while the level of activity in the construction industry in the United States reflected globally on the demand for construction materials. Demand among professional customers in the tissue paper business was not on a normal level, given the low level of activity in the restaurant and travel sectors and due to widespread remote working. Household purchases were likewise down compared to the previous year, due to which tissue paper production did not run at full capacity.
The pandemic did not show signs of easing in the countries in which we operate during the first quarter. Protective measures were continued, and the remote working model was in wide use. Regular mass testing was carried out at our locations with the aim of locating possible asymptomatic carriers of the virus. Special attention was paid to health security on the sites of our large-scale investments and to preventing any possible spread of the virus to the surrounding communities.
A decision on the Kemi bioproduct mill investment was made in February. It is Europe’s biggest forest industry investment of all time and a sign of Metsä Group’s strong confidence in the forest industry’s responsible development. The investment in modernising the recovery boiler and turbine generator of the Husum pulp mill is proceeding according to schedule, now that the environmental permit has been secured. The Rauma sawmill project has progressed to the equipment installation phase. Main events in the projects of our innovation company Metsä Spring included the launch of the new textile brand Kuura during Japan fashion week and the construction work of the pilot plant for 3D fibre packaging reaching the topping-out phase.
Forests and the use of forests are a topic of active discussion and subject to legislative work both in Finland and the EU in general. The objectives cover both the mitigation of climate change and safeguarding biodiversity. At the same time, consumers’ daily needs require an increasing amount of products made from renewable raw materials to execute the transition from the fossil economy to the circular economy of renewable materials.
We at Metsä Group believe that all these objectives can be promoted side by side. This requires the consideration of the overall impact of different sectors and the identification of the real economy’s opportunities and need."
KEY FIGURES
|
|
2021 | 2020 | 2020 |
| 1–3 | 1–3 | 1–12 | |
| Sales, EUR million | 1,399.6 | 1,253.0 | 5,054.9 |
| EBITDA, EUR million | 253.8 | 141.5 | 679.3 |
| Comparable, EUR million | 253.8 | 142.8 | 670.9 |
| % of sales | 18.1 | 11.4 | 13.3 |
| Operating result, EUR million | 135.8 | 61.1 | 375.8 |
| Comparable, EUR million | 173.9 | 62.4 | 367.7 |
| % of sales | 12.4 | 5.0 | 7.3 |
| Result before income tax, EUR million | 121.4 | 46.2 | 330.1 |
| Comparable, EUR million | 159.6 | 47.5 | 322.0 |
| Result for the period, EUR million | 98.0 | 35.1 | 262.2 |
| Return on capital employed, % | 9.8 | 4.8 | 7.2 |
| Comparable, % | 12.6 | 4.9 | 7.1 |
| Return on equity, % | 9.7 | 3.8 | 6.8 |
| Comparable, % | 12.7 | 3.9 | 6.6 |
| Equity ratio, % | 57.6 | 56.2 | 57.2 |
| Net gearing ratio, % | -1.6 | 12.1 | 4.3 |
| Interest-bearing net liabilities, EUR million | -67.5 | 448.8 | 167.7 |
| Total investments, EUR million | 173.6 | 61.8 | 400.5 |
| Net cash flow from operations, EUR million | 94.9 | 35.7 | 667.4 |
| Personnel at the end of the period | 9,412 | 9,154 | 9,213 |
|
Sales and Operating result |
Wood Supply and Forest Services | Wood Products Industry | Pulp and Sawn Timber Industry | Paperboard Industry | Tissue and Greaseproof Papers |
| Sales | 516.5 | 140.7 | 561.1 | 493.7 | 223.6 |
| Other operating income | 1.1 | 0.2 | 3.2 | 2.2 | 1.7 |
| Operating expenses | -506.6 | -128.8 | -457.1 | -390.3 | -198.3 |
| Depreciation and impairment losses | -2.6 | -5.1 | -69.6 | -23.6 | -10.6 |
| Operating result | 8.4 | 7.0 | 37.6 | 82.0 | 16.4 |
| Items affecting comparability | 0.0 | 0.0 | 34.5 | 6.9 | 0.0 |
| Comparable operating result | 8.4 | 7.0 | 72.1 | 88.8 | 16.4 |
| % of sales | 1.6 | 5.0 | 12.8 | 18.0 | 7.4 |
NEAR-TERM OUTLOOK
The demand for wood focuses on stands to be harvested when the ground is unfrozen. Both crown wood and energy wood trunks are purchased as energy wood. The demand for forest management services remains good.
Demand is expected to remain very good in all of Metsä Wood’s product categories across all of the main markets. The demand outlook of Kerto® LVL products is expected remain strong in all of the main markets, in line with the robust construction activities. Demand in the main markets for spruce plywood is expected to remain very good due to the limited availability of substitute products. Demand for birch plywood and for the products manufactured in the UK production units is expected to remain strong over the next few months.
The annual maintenance shutdown of Metsä Fibre’s Rauma pulp mill will take place during the second quarter. Pulp producers’ maintenance shutdowns during the spring will translate into a seasonal decline in the supply of pulp. The demand for softwood pulp is expected to remain high in relation to the supply. The market for sawn timber is expected to remain strong across all of the main markets, partly even exceeding supply.
Metsä Board’s paperboard delivery volumes in April–June 2021 are expected to grow from the first quarter (491,000 tonnes). The prices of folding boxboard and white kraftliners in local currencies are expected to rise. Compared to the first quarter, more scheduled maintenance shutdowns of mills will take place during the second quarter.
Uncertainty about the impact of the pandemic on the short-term demand will continue to remain great in the countries in which Metsä Tissue operates. Demand for tissue papers is expected to increase once the restrictions resulting from the pandemic can be eased. Demand for greaseproof papers is expected to continue to grow slightly. To ensure profitability, Metsä Tissue is responding to a rise in the costs of raw materials and other costs through the active steering of its pricing.
METSÄ GROUP
For further information, please contact:
Vesa-Pekka Takala, EVP, CFO Metsä Group, tel. +358 10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 10 465 4541
Metsä Group
www.metsagroup.com
Metsä Group is leading the way in advancing the bioeconomy. We invest in growth, bioproduct development and a fossil free future. The raw material for our products is renewable wood from sustainably managed northern forests. We focus on the growth sectors of the forest industry: wood supply and forest services, wood products, pulp, fresh fibre paperboards, as well as tissue and greaseproof papers.
Metsä Group’s annual sales amount to approximately EUR 5.5 billion, and we have around 9,200 employees in 30 countries. Our international Group has its roots in the Finnish forests: our parent company is Metsäliitto Cooperative which is owned by 100,000 forest owners.
Follow Metsä Group: Twitter LinkedIn Facebook YouTube Instagram Slideshare