CEO’s Review...Metsä BoardMetsä Group 2 Content 1. Metsä Board Today 2. Year 2013 3. Profitable...

Metsä Board

CEO’s Review

Mikko Helander

AGM 20142 April2014

Metsä GroupMetsä Board2

Content

1. Metsä Board Today

2. Year 2013

3. Profitable Growth

4. Key Focus Areas in 2014

Metsä Board

Metsä Board Today

Metsä GroupMetsä Board

Metsä Board Is the Leading European Fresh Forest FibrePaperboard Producer

‒ Annual sales about 2.0 b€

‒ Europe’s largest in folding boxboard. World’s largest in white-top fresh forest fibrelinerboard

‒ Major uncoated fine and printing paper as well as market pulp supplier

‒ Valuable holdings in Metsä Fibre and Pohjolan Voima

‒ Main customers are brand owners, printers, corrugated packaging manufacturers, merchants and office products suppliers

‒ Global sales and customer service network in over 70 countries and nine production units in Finland, Sweden and Germany

‒ Listed on the NASDAQ OMX Helsinki Ltd

4


Consistent Strategy

5

‒ Paperboard is Metsä Board’s core business‒ Focus on high-quality consumer packaging paperboards

‒ Smaller but healthier paper business‒ Heavy re-engineering and successful divestments

‒ Extensive fibre know-how and pulp self-sufficiency

‒ Continuous development towards Super Productivity


Metsä Board is Europe’s Largest Folding Boxboard Producer

Capacity: 1,000 t/a

34%

25%

13%

8%

8%

7%

5%

Source: Pöyry Management Consulting Oy

6


Metsä Board is Europe’s Second Largest White-Top Fresh Forest Fibre Linerboard Producer

Source: Metsä Board, Pöyry Management Consulting Oy

7

Capacity: 1,000 t/a

28%

27%

17%

14%

11%

3%


Paperboard incl. Market Pulp Accounted Already Almost 80 per cent of Sales in 2013

8

Sales distribution 2013

Paperboard 59%Paper 23%

Market pulp 18%

Sales distribution 2006

Paper 56%

Paperboard 18%Paper merchanting 26%


Profitability of Metsä Board’s Core Business is Best in its FieldOperating result excluding non-recurring items, % of sales

9


Metsä Board’s Productivity Has Been Improved by Almost 70 per cent Since 2006

Year end

10

Capacity per employee in Metsä Board’s board, paper and pulp mills

300

600

900

1 200

1 500

1 800

2006 2007 2008 2009 2010 2011 2012 2013

tonn

es/a

/per

son

Metsä Board

Year 2013


Key Events in 2013

‒ Profitability improved from previous year

‒ Folding boxboard and white top kraftliner deliveries increased clearly and folding boxboard prices were increased in late 2013

‒ Sustainability and printing properties of Metsä Board’s folding boxboards were further improved by renewed products launched in spring

‒ Exposure to paper business was further reduced by starting successfully kraftlinerproduction at Husum mill

‒ Metsä Board’s management structure was renewed at year end to accelerate growth

‒ Net debt reduced to EUR 597 million and net gearing ratio to 70 per cent. Credit ratings improved

12


m€ m€

m€

m€

m€

%

13

Result before taxes excl. non-recurring items

Result before taxes

Operating result

Result, Excluding Non-Recurring Items, Improved from Previous Year

SalesOperating result excl. non-recurring items

172

640

60

120

180

240

2012 2013

m€

Result for the period

230

230

80

160

240

320

2012 2013

m€

Parent company’s result for the period

2108 2019

0

1000

2000

3000

2012 2013

74

104

0

40

80

120

2012 2013

221

114

0

100

200

300

2012 2013

4,86,4

0

3

6

9

12

2012 2013

ROCE excl. non-recurring items

28 49

0

25

50

75

100

2012 2013

174

580

100

200

300

2012 2013


Short-Term Profitability Outlook

14

‒ Metsä Board’s operating result, excluding non-recurring

items, is in the first quarter of 2014 expected to improve

slightly from the last quarter of 2013


Balance Sheet on a Healthy Basis

15

Net debt, EUR million

2,93,4

4,4

6,4

5,1

6,5

17,7

2,7

0

1

2

3

4

5

6

7

8

9

10

2006 2007 2008 2009 2010 2011 2012 2013

Net debt / EBITDA excluding non-recurring items

827777

1254

1867

2403

783

625 597

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012 2013

Metsä Board

Profitable Growth


Metsä Board’s High-Quality Paperboards Help the World’sLeading Consumer Goods Companies to Succeed

‒ Increasing sales

‒ Promoting sustainablity

‒ Securing product safety

‒ Decreasing costs

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Lower quality recycled fibre paperboards

Cartonboard and linerboard quality pyramid

Metsä Board’s products

Recycled and fresh forest fibre based cartonboards

and linerboards

High-quality fresh forest fibre cartonboards

and linerboards


Metsä Board’s Renewed Fresh Forest Fibre Based PaperboardPortfolio Fits to Consumer Goods Companies’ Demand Well

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Consumer Goods Companies

Husumcoated fully

bleached linerboard

Kemi coated kraftliner

Fresh forest fibre linerboardKemi and Husum

uncoated linerboard

Total capacity 650,000 t/a

Graphicalend-uses

Folding boxboard

Total capacity 935,000 t/a

Carton printersTraditional Microflute cartonsfolding cartons

MerchantsCorrugated box manufacturers

Transport packages

Consumer packages


Metsä Board is the Global Quality Leader in Folding Boxboard

‒ Lighter in weight than other paperboards thus leading to smaller environmental load and good cost competitiveness

‒ Pure and safe

‒ Superior printing surface

‒ Best quality consistency

‒ Traceable raw material

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The light-weight of Metsä Board’s folding boxboard is based on the high-yield pulp or mechanical pulp used in the middle layer

Recycled fibre based cartonboard

Average FBB

SBB (Solid Bleached Board)

Metsä Board FBB


Metsä Board’s Folding Boxboard Provides Customers with a Considerable Yield Advantage – Case from Europe

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Product Old packagingmaterial

Weight/m2 Weight of Metsä Board’s FBB/m2

Yield advantage

Cosmetics packaging Solid bleached board 341 gsm 270 gsm 21%

Hygiene productpackaging

Recycled fibre basedcartonboard

326 gsm 210 gsm 36%

Better cost competitiveness and smaller environmental load in relation to the yield advantage


Metsä Board’s Folding Boxboard Provides Customers with a Considerable Yield Advantage – Case from North America

21

Product Old packagingmaterial

Weight/m2 Weight of Metsä Board’s FBB/m2

Yield advantage

Food packaging Solid bleached board 193 g 141 g 27%

Confectionarypackaging

Recycled fibre basedcartonboard

406 g 240 g 41%

Yield advantage for customers even greater than in Europe


Metsä Board’s Fresh Forest Fibre Linerboards Have SimilarCompetitive Advantages as Folding Boxboards

Superior printing surface

Light-weight and thus small environmental load and good costcompetitiveness

Pure and safe

Quality consistent

Traceable raw material

One of the few Finnish forest industry products that have reached the market leadership both in Europe and in North America

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Metsä Board’s fresh forest fibre linerboard deliveries to North America, 1,000 tonnes

0

30

60

90

120

150

2009 2010 2011 2012 2013

0

2

4

6

8

1020

13

1120

13

1220

13

1201

4

2201

4

Husum linerboard deliveries, 1,000 tonnes


Steady Growth in Paperboard Deliveries Despite Weak General Economy in Main Markets

‒ Paperboard deliveries increased over 7% in 2013

‒ Metsä Board’s market shares are steadily increasing‒ Share of European FBB producers 32%‒ Share of global white top kraftliner and fully bleached

linerboard deliveries 23%

‒ In 2014, growth is expected to be faster than in 2013

23

Paperboard deliveries, 1,000 tonnes

+4%

+7%


Metsä Board Accelerates Growth in Paperboard Business

‒ Steady organic growth in the domestic markets in Europe

‒ Continued good growth in the highest quality segment in Asia

‒ Chinese overcapacity does not allow aggressive growth

‒ Ambitious growth targets in North America both in FBB and linerboard businesses

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Metsä Board is a Known Local Supplier in the North American High-Quality Paperboard Market

‒ Metsä Board is the market leader in white-top fresh forest fibre linerboard

‒ Thanks to light weight products Metsä Board’s cost competitiveness in folding boxboard is very good even with current unfavorable exchange rates

‒ Efficient sales and supply chain resources that have recently been further strengthened

‒ Paperboard sales to North America was in 2013 was already about 170 000 tonnes. Growth target for 2014 is over 30 %

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Metsä Board

Key Focus Areas in 2014


Key Focus Areas in 2014

1. Further increase folding boxboard sales based on the light weight concept

2. Clear increase of kraftliner sales

3. Secure good folding boxboard and kraftliner price levels

4. Develop and launch new folding boxboard and kraftliner products

5. Maximize cash flow from decreasing paper businesses

6. Continuous improvements to achieve Super Productivity and Best-in-Class supply chain

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Metsä Board28

Thank You!

CEO’s Review...Metsä BoardMetsä Group 2 Content 1. Metsä Board Today 2. Year 2013 3. Profitable...

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