METSÄLIITTO GROUP FINANCIAL STATEMENTS: METSÄLIITTO GROUP SALES TOTAL EUR 8,643
METSÄLIITTO GROUP STOCK EXCHANGE RELEASE
8.2.2006 1 PM
METSÄLIITTO GROUP FINANCIAL STATEMENTS: METSÄLIITTO GROUP SALES TOTAL EUR 8,643
MILLION
Labour conflict and non-recurring items behind EUR -159 million loss
Result for 2005
. Sales EUR 8,643 million (8,598 million in 2004)
. Operating profit EUR 50 million (144 million)
. Result before taxes EUR -159 million (-76 million)
Result for last quarter of 2005
. Sales EUR 2,265 million (2,136 million in 9-12/2004)
. Operating loss EUR -13 million (a profit of 4 million)
. Result before taxes EUR -42 million (-45 million)
Labour conflict and non-recurring items burden profitability by
EUR 180 million
. The six-week labour conflict affected the Group's result by placing an
additional burden of EUR 120 million on it. Non-recurring items totalled
EUR 60 million.
. M-real's efficiency-enhancement programme is proceeding as planned. The
labour dispute and non-recurring items caused a EUR -114 million loss.
. The first phase of merging Finnforest with the parent-cooperative is
expected to bring annual savings of about EUR 10 million in the support
functions.
. Metsä-Botnia and Metsä Tissue performed according to expectations when the
effects of the labour conflict are taken into account.
"The largest single factor behind Metsäliitto Group's unprofitable performance in
2005 was the record-length labour dispute in the forest industry, but the result
was also unsatisfactory for other reasons. We must complement the efficiency-
enhancement measures underway in the subsidiaries with a comprehensive effort to
continuously improve profitability and efficiency. We must act cost-effectively
and as a coherent Group, and it is my belief that this will result in the kind of
profitability in which we can all take pride."
President & CEO Kari Jordan
Metsäliitto Group
INCOME STATEMENT 2005 2004 2005 2004
(EUR mill.) 1-12 1-12 10-12 10-12
Sales 8643 8598 2265 2136
Other operating income 148 135 27 21
Operating expenses -8182 -8066 -2137 -2032
Depreciation and
impairment losses -559 -522 -168 -121
Operating profit 50 144 -13 4
Share of results in 4 1 4 -4
associates
Net exchange gains / -27 -2 -4 19
losses
Other financial income & -187 -219 -29 -64
expenses
Result before tax -159 -76 -42 -45
Income tax 15 -28 8 -5
Result for the financial period
-144 -104 -34 -50
Some principles in consolidating Group companies:
- internal sales, internal dividends and internal financial items have been
eliminated
- internal gains in other operating income have been eliminated
- Metsä-Botnia's figures consolidated line-by-line 53% (39% + 14%)
- Vapo's figures consolidated line-by-line 49.9%
2005 2004
KEY RATIOS 1-12 1-12
Return on capital employed, % 1.2 2.5
Return on equity, % -5.3 -3.9
Equity ratio, % 30.5 32.1
Net gearing ratio, % 137 120
Interest-bearing net liabilities,
MEUR 3631 3336
Capital expenditure, MEUR 686 358
Personnel, average 29870 29557
Most important Group companies
*)
Income statement 2005 Metsä- Finn- Metsä M-real Metsä-
(EUR mill.) liitto forest Tissue Botnia
Sales 1109 1986 696 5241 947
Other operating income 8 30 8 206 28
Operating expenses -1089 -1905 -634 -5008 -783
Depreciation and -3 -85 -46 -403 -112
impairment losses
Operating profit 25 26 24 36 80
Share of result in 0 0 0 -2 0
associates
Net exchange gains / 0 0 4 -33 4
losses
Other fin. income & 16 -29 -24 -115 -4
expenses
Group subsidy -10 22 0 0 0
Result before tax 31 19 4 -114 80
*) 100%
FINANCIAL STATEMENTS OF THE METSÄLIITTO GROUP 2005
Sales and result
The sales of the Metsäliitto Group were EUR 8,643 million in 2005 (2004: EUR
8,598 million), or almost the same as in the previous year. EUR 1,108 million
(1,066) of sales were generated in Finland, while exports and overseas
subsidiaries accounted for EUR 7,535 million (7,532).
The operating profit was EUR 50 million (144). It was adversely affected by lower
average sales prices for fine papers, increasing energy costs and the weak
profitability of sawn timber, but the largest factor by far was the labour
dispute in the Finnish forest industry, which had an estimated overall effect of
EUR 120 million.
The operating profit less EUR 60 million in non-recurring items was EUR 110
million. The most significant non-recurring item adversely affecting the
operating profit was the EUR 40-million expense entered by M-real in December;
EUR 24 million of this was associated with the continuation of an efficiency-
enhancement programme at the Pont Sainte Maxence mill in France. Most of the
remaining related to efficiency-enhancement programmes that will be implemented
at various units this year. A EUR 15-million expense reserve associated with the
efficiency-enhancement programme for M-real's Swedish operations and a EUR 14-
million write-down of Finnforest's fixed assets also reduced the operating
profit.
Net financial expenses were 2.4 per cent of sales (2.6). Financial income was EUR
23 million (17), shares in associated companies' profits totalled EUR 4 million
(1) and financial expenses came to EUR 210 million (236). Exchange rate
differences in financing totalled EUR -26 million (-2).
The result before taxes was EUR -159 million (-76). Taxes, including the change
in the deferred tax liability, totalled EUR +15 million (-28). The result for the
financial period was EUR -144 million (-104), EUR -50 million (-24) of which was
attributable to the owners of the parent cooperative and EUR -94 million (-80) to
the minority interest.
The Metsäliitto Group would have posted a small profit in 2005 if the result had
not been affected by costs associated with the labour dispute and non-recurring
items entered into the financial statements.
The Metsäliitto Group's return on capital employed was 1.2 per cent (2.5) and the
return on equity was -5.3 per cent (-3.9).
Balance sheet and financing
The Group's total liquidity was EUR 1.6 billion (2.1) at the end of December. Of
this, EUR 0.2 billion (0.3) was in liquid assets and investments and EUR 1.4
billion (1.8) in binding credit-facility agreements not included in the balance
sheet. In addition, the Group can satisfy short-term financial needs with non-
binding commercial paper schemes in Finland and abroad as well as credit lines
amounting to about EUR 0.8 billion.
The equity ratio of the Metsäliitto Group was 30.5 per cent and net gearing was
137 per cent at the close of the year (32.1% and 120%). Interest-bearing net
liabilities increased by EUR 295 million during the year and stood at EUR 3,631
million at the end of December (3,336).
In April, the Representative Council of Metsäliitto Cooperative decided to amend
its by-laws to allow one third of the distributable surplus confirmed in the most
recent balance sheet to be used annually for redemption of shares and additional
shares. According to the amended by-laws, the amount of share capital that can be
used for redemption is entered under liabilities, while the rest is entered under
members' capital.
Members' capitals of the Metsäliitto Cooperative increased by EUR 50 million
during the year. Members' capital increased by EUR 11.6 million, additional A-
series capital by EUR 30.6 million and additional B-series capital by EUR 7.8
million.
M-real's Annual General Meeting amended the company's articles of association to
allow owners to convert 'A' shares to 'B' shares if they so request. 1,000 'A'
shares were converted into 'B' shares during the year.
Standard & Poor's Ratings Services lowered M-real's long-term credit rating from
BB+ to BB- in March, and changed its outlook from negative to stable. In October,
Moody's Investors Services changed its outlook on M-real's Ba2 credit rating from
stable to negative.
Adoption of International Financial Reporting Standards (IFRS)
The Metsäliitto Group adopted International Financial Reporting Standards (IFRS)
from the beginning of 2005. The effects of the transition on the profit and loss
account and balance sheet were explained in detail in a press release published
on 26 April 2005. This is available on Metsäliitto's website at
www.metsaliitto.com.
Market review
Wood markets
Wood trading got off to a healthy start right from the beginning of the year, but
slowed in May-June because of the labour conflict. Sales were quieter than usual
in the autumn term and Metsäliitto's full-year purchase amount from privately
owned forests only reached 15.1 million cubic metres, which represented 90 per
cent of the target figure. The ending of the transitional period in Finnish
forest taxation had a significant effect only in northern Finland and
Ostrobothnia. The prices of spruce and birch logs were rising during the year,
while the price of pine logs was clearly falling; fibrewood prices remained
stable.
Metsäliitto delivered 23.5 million cubic metres of wood to production facilities
in Finland (wood chips included); the budgeted amount had been 26.8 million.
Lower demand for wood was caused by the labour conflict. Thomesto delivered 3.9
million cubic metres of wood to Finland.
Wood products
Demand remained stable in the sawn timber market, but because of excess supply it
was not possible to raise prices in the first half of the year. Storm damage in
southern Sweden has increased production volumes of Swedish spruce sawn timber,
leading to aggressive selling. Demand for pine sawn timber improved slightly in
the second half of the year, due partly to a repositioning of sawmilling capacity
to accommodate more sawing of spruce. Moderate price hikes were implemented in
some segments of the pine timber market.
The demand for and price development of birch and softwood plywood were better
than in the previous year. The orderbook for Kerto LVL was at a good level and
this product's market position was strong.
Construction remains lively in the Nordic countries and in eastern Central
Europe, but is slowing down in the UK and remains weak in Germany.
Tissue paper products
The protracted labour conflict, a tight market situation and rising prices of raw
materials and energy all contributed to make 2005 a very challenging year.
However, Metsä Tissue was able to compensate for a significant portion of the
increased costs of its tissue paper business through improved productivity and
quality, thus keeping profitability on a satisfactory level.
Special arrangements and additional deliveries by the company's other mills
helped ensure a reasonable level of availability for products during the labour
conflict, minimising permanent customer losses.
Paper and paperboard
Deliveries of coated and uncoated fine papers by suppliers in Western Europe
remained on the levels of 2004. Deliveries by manufacturers of coated magazine
paper rose by 1 per cent. The price development of coated magazine paper was the
most favourable; average prices rose by 2 per cent. The prices of coated fine
papers were almost unchanged, whilst the prices of uncoated fine papers fell by 3
per cent. The downward development in the price of office paper, which had
continued for years, ended towards the close of the year and the prices of
especially lower-quality grades were successfully increased.
Demand for folding boxboard in Western Europe remained on the previous year's
level. On the other hand, M-real's exports beyond its main market area fell
strongly because of the labour conflict. The sales prices of folding boxboard did
not change significantly.
Pulp
At the beginning of the year, demand for pulp was good and prices were rising. In
spring, the price of softwood pulp rose to USD 645 and the price of hardwood pulp
to USD 600. After spring, producers' softwood stockpiles rose above the normal
level and its price fell to USD 600. Inventories of hardwood pulp remained stable
despite the fact that almost two million tonnes of new production capacity went
on stream between the end of 2004 and May 2005. Shutting down old capacity and
numerous stoppages kept supply and demand in equilibrium.
A new collective labour agreement made it possible to run Finnish production
facilities also over the Christmas holidays. Metsä-Botnia's last-quarter turnover
rose by 16 per cent from the previous year. Annual turnover fell by 11 per cent
because of the labour conflict, however.
Personnel
In 2005, Metsäliitto and its subsidiaries employed an average of 29,870 people
(29,557); 9,501 in Finland (9,736) and 20,369 abroad (19,821). The parent company
employed 755 people (819) on average.
Personnel totalled 29,007 (28,783) at the close of the financial period, 19,790
(19,587) of whom were employed overseas. The Vapo Group employed 1,850 and Botnia
1,654 at the end of the year. 49.9 per cent of Vapo and 53 per cent of Botnia are
consolidated into the financial statements of Metsäliitto Group.
Metsäliitto Cooperative CEO Kari Jordan assumed the position of President at the
beginning of 2006. Antti Oksanen, who had held the position of President for ten
years, will retire next summer.
Metsäliitto Cooperative had a total of 131,175 (130,869) members at the close of
the year.
Investments, acquisitions and divestments
The Metsäliitto Group's capital expenditure into fixed assets and corporate
acquisitions totalled EUR 686 million (358).
In January, Metsäliitto Cooperative bough 16.6 per cent of the shares in Vapo
from the Finnish State for EUR 47 million, increasing Metsäliitto's stake in the
company to 49.9%. As of the beginning of 2005, Vapo Group has been consolidated
into the financial statements of the Metsäliitto Group using the proportional
method.
At the end of January, Metsäliitto acquired a 49.9% stake in a company called
Finsilva, which bought the forest assets owned jointly by M-real and Metsäliitto
as well as the forests owned by the Suomi Mutual Life Assurance Company.
A significant share transaction took place within the Metsäliitto Group at the
end of March, when Metsäliitto Cooperative bought 8 per cent of Metsä-Botnia's
shares from its subsidiary M-real for a price of EUR 164 million.
In March, Metsäliitto raised the share capital of its subsidiary Finnforest by
EUR 50 million.
In June, Thomesto acquired all of the shares in OOO Progress, a timber
procurement company operating in the Leningrad oblast, Russia. Thomesto had
previously held a 40 per cent stake in the company. The acquisition will
strengthen Metsäliitto's position in the Russian wood procurement sector and
ensures timber supplies to Metsä-Botnia's sawmill. Thomesto sold its 40 per cent
stake in the SIA Vika Wood and AS Toftan sawmills in the Baltic countries in
September.
Metsä-Botnia's sawmill in Russia commenced operations in January 2006. It has an
annual production capacity of 200,000 cubic metres and the total cost of the
investment exceeded EUR 50 million.
Finnforest is expanding its Kerto LVL production capacity in Punkaharju from
60,000 to 130,000 cubic metres a year. The estimated cost of the investment is
EUR 20 million and it is scheduled for completion early this year.
The EUR 60-million modernisation of the paperboard machine in Simpele is
proceeding as planned and annual production capacity will increase by 45,000
tonnes to 215,000 tonnes. The investment will be completed in phases this spring.
The new BCTMP mill in Kaskinen commenced operations in August and deliveries
started in September. The mill's production capacity is 300,000 tonnes, all of
which will be used as raw material at the Group's own facilities. The total cost
of the investment is some EUR 180 million.
Uruguay pulp mill project
A decision to build a mill that will produce one million tonnes of eucalyptus
pulp was made in March 2005. The total cost of the investment will come to about
USD 1.1 billion.
The pulp mill was granted an environment permit in April 2005. The Uruguayan
government granted free-trade zone status to the project, which came into effect
on the same date as the environment permit.
In May, a contract was signed with Andritz, who will supply the mill's main
process equipment. The deal comprises a fibreline, from wood handling through to
pulp drying, and a chemicals recovery system. The value of the contract is over
EUR 200 million.
A contract with Jaakko Pöyry Group was concluded in September; under it, Pöyry
will assist in the implementation of the pulp mill project and assume
responsibility for the technical planning of the mill. Also in September, Kemira
and Metsä-Botnia signed a chemicals supply contract. Kemira will invest about EUR
60 million in chemicals plants to be built in the same complex as the pulp mill.
A dispute concerning the location of the mill, which is being built on the bank
of the Rio Uruguay border river, has developed between Uruguay and Argentina. The
two countries have established an expert commission to look into the matter and
the dispute has not affected the progress of the project. The mill is scheduled
for completion in the third quarter of 2007. It will directly employ some 300
people, but overall it will create over 8,000 jobs.
Organisation
As part of the Group's efficiency-enhancement and harmonisation programme, the
Board of Directors of Metsäliitto Cooperative approved a plan in August 2005 to
merge the domestic and international wood procurement organisations. The new
arrangement came into effect at the beginning of November.
A plan to merge the Finnforest Corporation with Metsäliitto Cooperative was
approved in late September. The implementation of the merger is expected to take
place in March 2006. Metsäliitto-Yhtymän Tehdasmittaus Oy is being merged with
Metsäliitto Cooperative as part of the same arrangement.
Results by business area
Wood procurement (Metsäliitto Cooperative and Thomesto)
The sales of Metsäliitto Cooperative were EUR 1,109 million in 2005 (1,155).
Deliveries of wood raw material to production facilities in Finland fell slightly
to 23.5 million cubic metres (24.5). The operating profit was EUR 25 million
(25), which represents 2.3 per cent of sales (2.2). EUR 2.4 million in profits
from the sale of shares is included in the operating profit.
The profit before financial items was EUR 41 million (89). A EUR 6-million write-
down related to the Forestia arrangement and EUR 28 million in dividend income
(63) are included in financial items. EUR 18 million in proceeds from company tax
reimbursements are included in the dividends of the comparison year.
The return on capital employed by Metsäliitto was 4.8 per cent (8.8). At the end
of the year, the equity ratio was 56.0 per cent (59.8) and net gearing was 19 per
cent (-8). Metsäliitto's interest-bearing net liabilities came to EUR 210 million
(-82).
Thomesto, which is responsible for overseas wood procurement, achieved sales of
EUR 451 million (426) and its operating profit was EUR 8 million (4). The
increase in the operating profit was mainly due to capital gains from selling
shares and a revaluation of forest assets. Some 3.9 million (3.4) cubic metres of
wood were delivered in Finland.
Wood products industry (Finnforest)
Finnforest's sales were EUR 1,986 million (1,923) and its operating profit came
to EUR 26 million (23). The net effect of non-recurring items included in the
operating profit was EUR 1 million. The result before taxes was EUR 19 million (-
11). A EUR 22-million Group contribution (5) is included in the result.
The return on capital employed was 3.0 per cent (2.5); the equity ratio was 32.1
per cent (27.0) and net gearing 133 per cent (179) at the end of the year.
Tissue paper products (Metsä Tissue)
Considering the market situation, Metsä Tissue's sales and operating profit have
developed according to expectations. Sales were EUR 696 million (689) and the
operating profit EUR 24 million (38). The weaker result compared to the previous
year was caused mainly by the labour conflict in Finland. The rising cost of
energy, transports and key raw materials are likewise having an adverse effect on
profitability.
Paper and paperboards (M-real)
M-real's sales were EUR 5,241 million (5,522) and the operating profit EUR 36
million (28). The operating result includes EUR +32 million of non-recurring
items (-33). Non-recurring income amounted to EUR 88 million and non-recurring
expenses to EUR 56 million.
The most significant item of non-recurring income was the EUR 81 million profit
made on the sale of an 8 per cent stake in Metsä-Botnia, while the most important
expense items were the EUR 20 million write-down on the fixed assets of the Pont
Sainte Maxence fine paper mill in France and the non-recurring EUR 4 million
expense reserve associated with an efficiency-enhancement programme at the mill
as well as a EUR 15 million expense reserve related to an efficiency-enhancement
project in the operations in Sweden.
Excluding non-recurring items, the operating profit was EUR 4 million (61).
Weaker profitability was due especially to the labour conflict in the Finnish
forest industry. The conflict had an estimated effect of EUR 85-90 million on
operating revenue. The falling price of uncoated fine paper, the rising costs of
oil-based raw materials and increasing energy costs were other factors behind the
weaker profitability.
Financial income and expenses amounted to EUR -148 million (-136) and the shares
in associated companies' profits totalled EUR -2 million (0). Exchange-rate
differences on accounts receivable and payable, financial items and the
valuations of currency hedging were EUR -33 million (4). Net interest and other
financial expenses were EUR -115 million (-140).
The loss before taxes was EUR 114 million (-108); the loss per share was EUR 0.25
(a profit of 0.19) and the return on capital employed was 1.2 per cent (0.9).
Excluding non-recurring items, the result was EUR -142 million (-75); the loss
per share was EUR 0.35 (a profit of 0.28) and the return on capital employed was
0.5 per cent (1.6).
M-real's equity ratio was 36.6 per cent (37.5) and net gearing 95 per cent (89).
Pulp (Metsä-Botnia)
Metsä-Botnia's sales were EUR 947 million (1,066) and the operating profit was
EUR 80 million (141). The labour conflict in the second quarter and re-starting
production in the beginning of the third quarter had a significant adverse effect
on sales and profits for the financial period.
The profit before taxes was EUR 80 million (135) and the return on capital
employed was 6.2 per cent (10.8). The equity ratio was 71.6 per cent (72.6) and
net gearing 6 per cent (-5).
39% of Metsä-Botnia's figures are consolidated into the financial statements of M-
real and a further 14% into the financial statements of the Metsäliitto Group.
Outlook
Demand for paper and paperboard products remained good in 2005, but price levels
remained at an unprecedented low level. In 2006, the average sales prices of
different paper grades are expected to rise slightly above the previous year's
levels.
The forest industry's capacity utilisation is forecast to remain high. This
should result in a lively year for the wood market. Traditional sawn timber will
probably continue to be beset by difficulties, but clarifying our strategy,
enhancing the efficiency of operations and implementing quality-based pricing for
pine logs, in which the price of roundwood is determined according to its
potential for value-added processing, will establish a foundation for improving
the profitability of Metsäliitto's wood products manufacturing segment.
In 2005, the Group decided to implement significant reorganisations and launched
new efficiency-enhancement programmes. The measures have already yielded results
and there are signs of a turnaround in profitability. The Metsäliitto Group would
have posted a small profit in 2005 if the result had not been affected by costs
associated with the labour dispute and non-recurring items entered into the
financial statements.
The disciplined implementation of measures aimed at improving cost-effectiveness
and profitability is a priority. Unless the operating environment is
significantly altered, the Metsäliitto Group is aiming for clear profits in 2006.
Espoo, 8 February 2006
BOARD OF DIRECTORS
Additional information:
Mr. Lauri Peltola, Group CCO, Metsäliitto, tel. +358 50570 5606
Mr. Ilkka Pitkänen, Group CFO, Metsäliitto, tel. +358 1046 94260
METSÄLIITTO GROUP
Income statement 2005 2004
(EUR mill.) 1-12 1-12 Change
Sales 8643 8598 45
Other operating income 148 135 13
Materials and services -5385 -5343 -42
Employee costs -1424 -1423 -1
Other operating expenses -1373 -1301 -72
Depreciation and impairment -559 -522 -37
losses
Operating profit 50 144 -94
Share of results in associates 4 1 3
Net exchange gains / losses -27 -2 -25
Other financial income and -187 -219 32
expenses
Result before tax -159 -76 -83
Income taxes 15 -28 43
Result for the period -144 -104 -40
Attributable to
Owners of parent company -50 -24 -26
Minority interest -94 -80 -14
-144 -104 -40
2005 2004
Balance sheet 31.12. 31.12. Change
ASSETS
Non-current assets
Intangible assets 818 802 16
Tangible assets 4256 4148 108
Biological assets 51 201 -150
Financial assets
Interest bearing 68 59 9
Deferred tax receivables 96 102 -6
Other non-interest bearing 201 283 -82
5490 5596 -106
Current assets
Inventories 1293 1172 121
Receivables
Interest bearing 5 66 -61
Non-interest bearing 1706 1564 142
Cash and cash equivalents 194 252 -58
3199 3055 144
TOTAL 8689 8651 38
MEMBERS' FUNDS AND LIABILITIES
Members' funds 1328 1351 -23
Minority interest 1317 1428 -111
Total members' funds 2645 2779 -134
Non-current liabilities
Deferred tax liabilities 439 505 -66
Post employment benefit 270 271 -1
obligations
Provisions 74 45 29
Interest bearing 2915 2946 -31
Other non-interest bearing 90 37 53
3788 3805 -17
Current liabilities
Interest bearing 983 768 215
Non-interest bearing 1273 1299 -26
2256 2067 189
Total liabilities 6044 5872 172
TOTAL 8689 8651 38
Mem- Re- Retained Minority
bers' serves earnings interest
Change in members' funds capital Total
Members' funds 31.12.2003 545 63 947 1408 2963
Effect of transition to IFRS -114 -9 -122 -169 -414
Members' funds 1.1.2004, 431 54 825 1239 2549
IFRS
Translation differences 17 17
Dividends paid -34 -34
Transfers -9 3 6
Increase in members' capital 83 83
Increase in reserves 2 2
Effects of financial 3 3
instruments
Minority interest 188 188
Result for the period -24 -24
Members' funds 31.12.2004 505 62 784 1427 2778
Members' funds 1.1.2005 505 62 784 1427 2778
Translation differences 6 6
Dividends paid -34 -34
Transfers 10 -9 1
Increase in members' capital 53 53
Increase in reserves 1 1
Effects of financial 1 1
instruments
Minority interest -111 -111
Result for the period -50 -50
Members' funds 31.12.2005 558 74 696 1317 2645
2005 2004
Cash flow statement 1-12 1-12
Cash flow from operations
Result for the period -144 -104
Adjustments total 699 697
Change in working capital -131 35
Cash generated from operations 424 628
Finance costs, net -237 -224
Income taxes paid -52 -81
Net cash from operations 135 323
Cash flow from investments
Acquisitions -68 -34
Purchases of assets -538 -298
Sold assets and others 185 181
Net cash from investments -421 -151
Cash flow from financing
Change in loans and
other financial items 286 -77
Dividends paid -58 -62
Net cash flow from financing 228 -139
Change in cash and cash -58 33
equivalents
Cash at beginning of period 252 219
Change in cash and cash
equivalents -58 33
Cash at end of period 194 252
BUSINESS SEGMENTS
I-IV/05 I-IV
Consumer Packaging /04 IV/05 IV/04
Sales 864 1045 231 256
EBITDA 134 187 42 47
Depreciation & impairment
losses -89 -90 -22 -17
Operating profit 45 97 20 30
Papers I-IV/05 I-IV
/04 IV/05 IV/04
Sales 2988 2944 775 759
EBITDA 224 237 61 36
Depreciation & impairment -274 -260 -83 -65
losses
Operating profit -50 -23 -22 -29
I-IV/05 I-IV
MAP Merchant Group /04 IV/05 IV/04
Sales 1390 1368 357 343
EBITDA 25 24 2 1
Depreciation & impairment -7 -7 -2 -1
losses
Operating profit 18 17 0 0
I-IV/05 I-IV
Wood products /04 IV/05 IV/04
Sales 1986 1923 497 466
EBITDA 111 94 40 15
Depreciation & impairment
losses -85 -71 -31 -19
Operating profit 26 23 9 -4
EBITDA = result before depreciation and impairment losses
I-IV/05 I-IV
Others /04 IV/05 IV/04
Operating profit 10 31 -20 7
of which
Wood procurement in 25 25 12 6
Finland
Internat. wood 8 4 0 1
procurement
Tissue paper 24 38 4 8
products
Others and Group -47 -36 -36 -8
elim.
Production
I-IV/05 I-IV
1 000 units /04 IV/05 IV/04
Paper, t 3985 4008 1048 1030
Paperboard, t 985 1330 272 326
Sawn goods, m3 4136 4185 1160 1014
Processed timber, m3 1181 1166 291 427
EW-products, m3 990 911 238 225
Pulp & CTMP, t (M-real) 1533 1533 421 399
Pulp, t (Botnia) 2177 2450 647 601
Quarterly data 2005 2005 2005 2005 2004 2004 2004 2004
IV III II I IV III II I
Sales by segment
Consumer packaging 231 196 199 238 256 264 267 258
Papers 775 735 732 747 759 738 710 737
MAP Merchant Group 357 341 351 341 343 332 339 354
Wood products 497 468 553 468 466 458 529 470
Others & internal
sales 407 317 299 393 311 307 359 341
Group sales 2265 2057 2134 2187 2135 2099 2204 2160
Operating profit by
segment
Consumer packaging 20 15 -17 27 30 26 20 21
Papers -22 13 -51 10 -29 7 -8 6
MAP Merchant Group 0 5 7 6 0 4 7 7
Wood products 9 3 15 -1 -4 6 14 7
Others -20 9 -11 32 7 -8 3 29
Group operating profit -13 45 -56 74 4 35 36 70
- % of sales -0.6 2.2 -2.6 3.4 0.2 1.7 1.6 3.2
Share of results in 4 1 -2 0 -4 0 1 4
associates
Net exchange gains / -4 0 -12 -11 19 0 -6 -15
losses
Other fin. income & -29 -33 -79 -45 -64 -55 -22 -78
expenses
Result before tax -42 13 -149 18 -45 -21 9 -19
Income taxes 8 -5 20 -7 -5 -14 -14 5
Result for the period -34 8 -129 11 -50 -35 -5 -14
METSÄLIITTO GROUP
Reconciliation of profit
Effects of
FAS transition IFRS
Income statement 1-12/2004 to IFRS 1-12/2004
Sales 8554 44 8598
Other operating income 149 -14 135
Operating expenses -8032 -34 -8066
Share of results in associates -5 5 0
Depreciation and impairment -600 78 -522
losses
Operating profit 66 78 144
Share of results in 0 1 1
associates
Net exchange gains / losses 13 -15 -2
Other financial income and -213 -6 -219
expenses
Result before tax
and minority interest -134 58 -76
Income taxes -1 -27 -28
Result after tax -135 31 -104
Minority interest 114 -34 80
Result for the period -21 -3 -24
Reconciliation of balance sheet
Effects of
FAS transition IFRS
Balance sheet 31.12.2004 to IFRS 31.12.2004
ASSETS
Non-current assets
Intangible assets 796 6 802
Tangible assets 4199 -51 4148
Biological assets 0 201 201
Financial assets
Interest bearing 64 -5 59
Deferred tax receivables 62 40 102
Other non-interest bearing 277 6 283
5398 198 5596
Current assets
Inventories 1172 0 1172
Receivables
Interest bearing 18 48 66
Non-interest bearing 1561 3 1564
Cash and cash equivalents 302 -50 252
3053 2 3055
TOTAL 8451 201 8651
MEMBERS' FUNDS AND LIABILITIES
Members' funds 1585 -234 1351
Minority interest 1559 -131 1428
Total members' funds 3144 -365 2779
Non-current liabilities
Deferred tax liabilities 438 67 505
Post employment benefit 47 224 271
obligations
Provisions 45 0 45
Interest bearing 2878 68 2946
Other non-interest bearing 34 3 37
3442 363 3805
Current liabilities
Interest bearing 638 130 768
Non-interest bearing 1225 74 1299
1863 204 2067
Total liabilities 5305 567 5872
TOTAL 8451 201 8651
Metsäliitto is the tenth biggest forest industry group in the world. Its five
business areas include wood supply, wood products industry, pulp production and
producing of paper and paperboard as well as tissue paper. Its sales are about
8.6 billion euro and it employs almost 30,000 people. The Metsäliitto Group
companies, Finnforest, Metsä-Botnia, M-real and Metsä Tissue have own presence in
nearly 30 countries.
