Metsäliitto Group’s operating result excluding non-recurring items was EUR 314 million in 2011
Metsäliitto Group Financial Statements Bulletin 2011, Stock Exchange Release 9 February 2012 at 12.00 EET
The operating result excluding non-recurring items was EUR 3 million in October–December
This 2011 Financial Statements Bulletin still uses the Metsäliitto Group company names in use in 2011.
Full year result for 2011
– Sales amounted to EUR 5,346 million (1–12/2010: EUR 5,377 million).
– The operating result excluding non-recurring items was EUR 314 million (547). The operating result including non-recurring items was EUR 29 million (497).
– The result before taxes and excluding non-recurring items was EUR 195 million (411). Including non-recurring items, the result before taxes was EUR -98 million (345).
Result for October–December 2011
– Sales amounted to EUR 1,223 million (10–12/2010: EUR 1,391 million).
– The operating result excluding non-recurring items was EUR 3 million (142). The operating result including non-recurring items was EUR -200 million (82).
– The result before taxes and excluding non-recurring items was EUR -21 million (112). Including non-recurring items, the result before taxes was EUR -228 million (52).
Events during the fourth quarter of 2011
– M-real announced it would start negotiations on shutting down the Alizay mill and on discontinuing the unprofitable operations at the Gohrsmühle mill.
– M-real announced it will shut down the coated paper machine in Äänekoski by the end of 2011. Correspondingly, the company aims to increase production at the Husum mill from 285,000 tonnes to 340,000 tonnes in 2012.
– Metsä Tissue announced it would discontinue the tissue paper manufacturing, refining and logistics operations at the Konstancin-Jeziorna mill in April 2012.
– Metsäliitto Cooperative launched the Equity Bonus investment alternative for co-op members. The new investment alternative came into effect as of the beginning of 2012.
– Metsä-Botnia’s pulp production volume was a record high. Annual production records were set at the Äänekoski, Joutseno and Rauma mills.
Events after the period
– M-real announced on 13 January 2012 that it would sell the Premium Paper operations of the Reflex mill to Hahnemühle FineArt GmbH. It is estimated that the arrangement will be finalised during the first quarter of 2012.
– Metsäliitto Group announced it will unify its corporate identity to Metsä Group.
“The uncertainty in the world economy in the second half of the year, in particular, weakened demand in all our business areas, and the Group's result in the last quarter of the year was modest. However, due to the successful structural change in recent years, our Group is on a solid foundation. We rely strongly on four central and competitive business areas: wood products, pulp, paperboard, and tissue and cooking papers.
M-real’s restructuring measures and the strategic review of the paper business are being finalised and will improve our result capability considerably. Metsä Tissue’s development investments form a solid basis for improving the company’s profitability, and the new business area management is driving the efforts powerfully.
The transformation of our corporate identity into the unified Metsä Group will further strengthen our competitiveness.”
Kari Jordan, President & CEO, Metsä Group
Key figures
Metsäliitto Group
| Income statement (Continuing operations) | 2011 1–12 | 2010 1–12 | 2011 10–12 | 2010 10–12 |
| Sales | 5 346 | 5 377 | 1 223 | 1 391 |
| Other operating income | 95 | 142 | 32 | 44 |
| Operating expenses | -5 058 | -4 686 | -1 366 | -1 225 |
| Depreciation and impairment losses | -354 | -336 | -89 | -129 |
| Operating result | 29 | 497 | -200 | 82 |
| Share of results in associates | 4 | -15 | -1 | -1 |
| Exchange gains and losses | 2 | -7 | 0 | -1 |
| Other net financial items | -133 | -129 | -27 | -27 |
| Result before income tax | -98 | 345 | -228 | 52 |
| Income taxes | -59 | -131 | 22 | -29 |
| Result from continuing operations | -157 | 214 | -206 | 23 |
Metsäliitto Group
| Profitability (Continuing operations) | 2011 1–12 | 2010 1–12 | 2011 10–12 | 2010 10–12 |
| Operating result, EUR mill. | 29 | 497 | -200 | 82 |
| - “ -, excluding non-recurring items | 314 | 547 | 3 | 142 |
| - “ - % of sales | 5.9 | 10.2 | 0.2 | 10.2 |
| Return on capital employed, % | 1.1 | 11.8 | -20.6 | 8.0 |
| - ” -, excluding non-recurring items | 8.4 | 13.4 | 0.4 | 13.9 |
| Return on equity, % | -9.9 | 13.9 | -51.9 | 5.7 |
| - ” -, excluding non-recurring items | 8.6 | 18.2 | 0.1 | 20.2 |
| Financial position | 2011 31.12 | 2010 31.12 | 2011 30.9 | 2010 30.9 |
| Equity ratio, % | 28.3 | 29.7 | 31.0 | 28.1 |
| Net gearing ratio, % | 131 | 116 | 113 | 123 |
| Interest-bearing net liabilities, EUR mill. | 1 953 | 1 939 | 1 895 | 1 985 |
Segments
| Sales and Operating result January–December 2011 (EUR mill.) | Wood Supply | Wood Products Industry | Pulp Industry | Board and Paper Industry | Tissue and Cooking Papers |
| Sales | 1 476 | 939 | 1 301 | 2 485 | 971 |
| Other operating income | 10 | 9 | 19 | 66 | 11 |
| Operating expenses | -1 459 | -904 | -994 | -2 574 | -923 |
| Depreciation & impairment losses | -3 | -41 | -63 | -191 | -40 |
| Operating result | 24 | 3 | 263 | -214 | 20 |
| Non-recurring items | - | 9 | 4 | 274 | - |
| Operating result, excl. non-rec. items | 24 | 12 | 267 | 59 | 20 |
| - % of sales | 1.7 | 1.3 | 20.5 | 2.4 | 2.1 |
Near-term outlook
Metsäliitto Wood Supply’s reserves are good. The wood market primarily in western Finland is, to a certain extent, affected by the damage caused by the storms at the end of 2011.
Wood Product Industry’s near-term outlook continues to be challenging. Growth in total demand is expected to be small at best in the main markets. Cost management will continue and adjustments in production may be necessary.
The price level of pulp in various market areas has stabilised and partly started to rise after the downward development at the end of the year. In addition, the weakening of the euro against the pulp pricing currency dollar will improve profitability and relative competitiveness.
Board orders have been growing in recent weeks but continue to be below the normal level. Orders declined considerably in the latter half of 2011, which is estimated to be due in part to the decreased inventory levels in different parts of the supply chain as the general economic uncertainty increased.
However, the long-term demand and profitability outlook for board will continue to be strong and M-real is increasing its folding boxboard capacity as planned. The last of the investments in the programme announced earlier, the increase in the folding boxboard capacity at the Äänekoski mill, will be completed in the second quarter of 2012.
Demand for soft tissue products will continue to be fairly steady despite the economic situation. Demand for baking and cooking papers will continue to rise and the new products will also increase sales. High energy costs and raw material prices, as well as the local availability and price of recycled paper, will make the company's result improvement objective challenging.
The Group’s operating result excluding non-recurring items in the first quarter of 2012 is expected to improve from the level of the last quarter in 2011 due to bigger delivery volumes in board and pulp.
New disclosure procedure
Metsäliitto Group has adopted a new disclosure procedure made possible by the Financial Supervision Authority Standard 5.2b. This bulletin is a summary of Metsäliitto Group's Financial Statement Bulletin for 2011. The Financial Statement Bulletin and its tables are attached to this Stock Exchange Release as a PDF attachment and are available on the Group website at www.metsäliitto.com.
METSÄ GROUP
Group Communications
For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0) 10 465 4260
Anu Salonsaari-Posti, VP, Metsä Group, Communications, tel. +358 (0)50 453 4262
Metsä Group is a responsible forest industry group whose products are part of people’s everyday life and promote sustainable well-being. Metsä Group produces high-quality products mainly from renewable Nordic wood. The Group’s business areas are tissue and cooking papers, board and paper, pulp, wood products as well as wood supply. Metsä Group’s sales totalled EUR 5.3 billion in 2011, and it employs approximately 12,500 people. The Group is present in some 30 countries.