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Metsä Tissue's Result January - September 2008

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22/10/2008


Metsä Tissue's Result January - September 2008 

Metsä Tissue sales in January-September were EUR 696 million (632) and
operating profit EUR 33 million (22). Sales grew 10% compared to last year on
the back of higher sales volumes (+4%) and price/mix changes (+6%). The sales
growth of Metsä Tissue's own brands - Lambi, Katrin, Serla and Mola - as well
as customer brands was stable. Negative impacts from the increasing costs of
raw materials, energy and transportation have been compensated partly by the
company's efficiency improvement projects and partly by increased prices. 

Lambi was voted by Swedish consumers as the fourth most beloved brand. New
Lambi TV commercials were rolled out in September. A new unique product, Serla
Cleaning Paper, was introduced onto the Finnish market and has created a
completely new product category. Serla Cleaning Paper, with great tensile and
wet strength, is non-linting and is designed for wiping and polishing surfaces.
The Mola brand was refreshed with a new design and the new TV commercial was
rolled out in Poland. 

The Away-from-Home business area harmonised the product offering by integrating
its Saga brand into the Katrin brand. At the same time, the products were
grouped into three different quality grades - Plus, Classic and Basic. 

The expansion of business activities in Russia continued with the start up of
the second converting line in the Naro Fominsk distribution and converting
facility. The line produces Lambi, Mola and Katrin products. 

Production has started on the new Away-from-Home rewinder in Krapkowice,
Poland. Construction of new warehouses in Zilina, Slovakia, and in Düren,
Germany, is progressing according to schedule. The warehouse in Bork, Germany,
was closed and sold. The operating profit includes a related one-time expense
of EUR 5.2 million. 

A year long maintenance management project was initiated in the company's
Swedish mills in September. The aim is to document the best practices in
maintenance and share them Metsä Tissue wide. 

In September, Metsä Tissue signed a EUR 238 million syndicated loan agreement.
The loan is a five-year credit facility financing the current facility which is
due to mature in June 2009. The Mandated Lead Arrangers are Calyon, DnB Nord,
Nordea and SEB. A total of eight banks are participating in the loan
arrangement. 

The weakening growth prospects in Europe are not expected to have a significant
influence on the sales volumes of tissue and cooking papers. Higher costs,
energy and transport costs in particular, are still causing cost pressures and
the transfer of these into sales prices will continue.

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