CEO's review at AGM 2015 ENG (ID 170704) governance… · +21% 700 / 33% Post-measures SCA...
Transcript of CEO's review at AGM 2015 ENG (ID 170704) governance… · +21% 700 / 33% Post-measures SCA...
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Metsä Board
CEO’s Review
AGM 2015
Mika Joukio
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Metsä GroupMetsä Board2
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
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Metsä GroupMetsä Board
Metsä Board in brief
‒ The leading European fresh forest fibre paperboard company
‒ Main customers are consumer goods companies, corrugated packaging manufacturers, printers and merchants
‒ Valuable holdings in Metsä Fibre (24.9%) and Pohjolan Voima (2.6%)
‒ Global sales to over 100 countries and nine production units in Finland, Sweden and Germany
‒ Sales of EUR 2.0 billion and EBIT (excl. non-recurring items) of EUR 137 million in 2014
2 008 2 019 2 108
2012 2013 2014
EBIT margin (%) 1)Sales (EURm)
1) EBIT margin excl. non-recurring items
3
5,2%6,8%
3,6%
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Metsä GroupMetsä Board
Global packaging materials market size is about EUR 600bn and it is growing
Wood fibre based
materials36 %
Others64 %
‒ Growing population
‒ Urbanization
‒ Environmental awareness
‒ Safety
Global underlying demand growth for Metsä Board’smain grades folding boxboard and white fresh forestfibre linerboard is estimated to be 3-4 % per annum
Source: Smithers Pira
4
Highest growth inpaperboard packaging, accounting
for the largest share of the total
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Metsä GroupMetsä Board
5
White top kraftliners
Folding Boxboard
Fully bleached
linerboards
Metsä Board offers a wide range of high-quality fresh forest fibre paperboards
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Metsä GroupMetsä Board
Metsä Board’s paperboards are results of successful product development
Recycled fibre based cartonboard
Average FBB
SBB (Solid Bleached Board)
Metsä Board FBB
6
‒ Pure and safe
‒ Superior printing surface
‒ Consistently high quality
‒ Even over 30 % lighter in weight than other paperboards
Metsä Board’s paperboards offer an excellent way for consumer goods companies to improve quality of their packages and sustainability of their operations
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Metsä GroupMetsä Board
Metsä Board’s paperboard deliveries increased by 10 % in 2014
7
+ 7 %
169 176 185 185 189 192 197 185 191 197 210 203
8085
93 8594 93 95
91110 108
118109
0
60
120
180
240
300
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Fresh forest fibre linerboardFolding boxboard
+ 10 %1000 tonnes
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Metsä GroupMetsä Board
Metsä Board grows the fastest in North America where its volumes increased over 40% in 2014
8
Fresh forest fibre linerboard deliveries to North America, 1,000 tonnes
0
30
60
90
120
150
180
2009 2010 2011 2012 2013 2014
FBB deliveries to North America, 1,000 tonnes
0
5
10
15
20
25
30
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
FBB volume target in North America is over 300 000 t/a in mid-term
Linerboard volume target in North America is over 250 000 t/a in mid-term
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Metsä GroupMetsä Board
300
600
900
1 200
1 500
1 800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
tonn
es/a
nnum
/em
ploy
eeProductivity has been improved significantly since 2005
9
Production capacity per employee per annum at Metsä Board’s current mills
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Metsä GroupMetsä Board10
Profitability of Metsä Board’s paperboard business the bestin its field in Europe
Operating result, excl. non-recurring items, % of salesOperating result excluding non recurring items % of sales
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Metsä GroupMetsä Board11
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
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Metsä GroupMetsä Board
Metsä Board grows its paperboard business and plans to fully exit paper production
‒ Major growth step in the folding boxboard business thanks to the EUR 170 million investment in a new production line and related infra at Husum mill
‒ Linerboard volumes from Husum to be tripled from 2014 level to close to 300 000 tonnes fully from 2018
‒ Planned discontinuation of Husum mill’s paper production mostly by the end of 2015 and fully by the end of 2017
‒ Measures to eliminate losses of Gohrsmühle mill in Germany in process
‒ These final steps of the transformation are expected to be financed by current liquidity, credit facilities, operating cash flow and a share offering
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Metsä GroupMetsä Board
Share offering was completed successfully
‒ Share offering was oversubscribed: preliminary result 140 %
‒ Size was approximately EUR 100 million
‒ Total amount of Metsä Board’s shares increases to 355.512.746 of which‒ A-shares: 35.895.651‒ B-shares: 319.617.095
‒ Final results of the offering will be published on 30 March (estimated timing)
‒ Trading with the new shares commences on 1 April (estimated timing)
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Metsä GroupMetsä Board
New measures finalize Metsä Board’s successful transformation
ROCE %
Marketgrowth
‒ 2005: New strategy‒ 2007-2013: Numerous
divestments, closures and restructuring measures
‒ 2015: Completion of the transformation
The leading fresh forest fibre paperboard
company in EuropeEuropean
paper
Fresh Forest Fibre Paperboard
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Metsä GroupMetsä Board
Investment in Husum the most cost-competitive alternative to increase capacity
‒ Metsä Board’s biggest mill integrate
‒ Skilled personnel
‒ Large two line pulp mill
‒ State of art coating technology
‒ Efficient power plant
‒ Own harbour
‒ Good existing other infrastructure
‒ Proximity to large forest areas
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Metsä GroupMetsä Board
Husum mill will have two production lines and it becomes a leading fresh forest fibre paperboard unit in Europe
‒ New folding boxboard machine, BM1‒ EUR 170 million investment ‒ Production capacity approximately 400,000 t/a ‒ Start up in early 2016‒ Full production capacity reached by end 2016
‒ Current PM8 to be converted to a linerboard machine, BM2‒ Only minor investment needed‒ Production capacity approximately 300,000 t/a ‒ Start up in spring 2015‒ Husum’s linerboard sales run rate over 100,000 t/a at the moment
‒ Current state of art off-line coating machine serving both paperboard machines
‒ All in all, Husum’s fresh forest fibre paperboard capacity will be approximately 700,000 t/a
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Metsä GroupMetsä Board
New paperboard volumes expected to be sold mainly outside Europe
‒ Husum’s new folding boxboard volumes planned to be sold mainly to North America and to the food service segment globally
‒ New linerboard volumes expected to be sold both in Europe and North America, increasingly also to new applications e.g. in food packaging
‒ If the demand supply situation so requires in the coming years, Metsä Board has possibilities to adjust its production accordingly
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Metsä GroupMetsä Board
Gohrsmühle mill’s losses targeted to be eliminated
‒ Main products cast coated and label papers
‒ Approximately 480 employees
‒ Annual sales about EUR 90 million and operating loss excl. non-recurring items EUR 20 million in 2014
‒ Main target is to divest the mill during the first half of 2015
‒ If the divestment will not materialize in the set time frame, other measures to eliminate the losses will be introduced, which may even include a partial or complete shutdown of the mill
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Metsä GroupMetsä Board
Significant financial improvements thanks to finalization of the transformation
‒ Expected positive impact on annual operating result excluding non-recurring items approximately EUR 50 million compared to 2014
‒ Mostly in 2017 and fully in 2018‒ No material change in Metsä Board’s total annual sales due to measures in Husum
‒ Additionally, elimination of Gohrsmühle mill’s losses would lead to annual sales reduction of approximately EUR 90 million and annual operating result (excl. non-recurring items) improvement of approximately EUR 20 million
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Metsä GroupMetsä Board
Metsä Board strengthens its market leadership
20
Note: Share of production capacity currently shown in parenthesisSources: Metsä Board, Pöyry Management Consulting Oy
Largest White Fresh Forest Fibre Linerboard Producers in Europe
Largest Folding Boxboard Producers in Europe
400
4002000 800 1,2001,000 1,400600
Capacity: 1000 tons/a
1335 / 43%
+43%
Current Post-measures
Holmen (7%)
IP (8%)
Mayr-Melnhof (13%)
Stora Enso (25%)
935(35%)
120
2001000 700300 600500400
Smurfit Kappa
(15%)
(13%)
Mondi
580(29%)
(25%)
(12%)
Current
+21%
700 / 33%
Post-measures
SCA
BillerudKorsnäs
Capacity: 1000 tons/a
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Metsä GroupMetsä Board21
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
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Metsä GroupMetsä Board
‒ Profitability improved from previous year
‒ Cash flow was strong and net debt reduced clearly to EUR 427 million
‒ Paperboard delivery volume increased significantly and price levels were stable
‒ Metsä Board’s folding boxboard was successfully launched to North America and to the global food service segment
‒ Production volumes and efficiencies improved
‒ Final steps in transformation to a paperboard company were introduced
‒ Mika Joukio started as the new CEO in October and the organization was renewed as of 1 Jan 2015
Highlights in 2014
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Metsä GroupMetsä Board
0,170,27
0
0,1
0,2
0,3
0,4
2013 2014
Metsä Board’s profitability improved in 2014
5878
0
25
50
75
100
2013 2014
6,49,1
0
3
6
9
12
2013 2014
2019 2008
0
1000
2000
3000
2013 2014
104137
0
40
80
120
160
2013 2014
SalesOperating result, excl. non-rec. items
Result before taxes, excl. non-rec. items
m€ m€
m€
114 117
0
40
80
120
160
2013 2014
Operating result
m€
Result before taxes
m€
ROCE, excl. non-rec. items
%
Earnings per share, excl. non-rec. items
€ per share
49
100
0
25
50
75
100
125
2013 2014
23
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Metsä GroupMetsä Board
Balance sheet strenghtened in 2014
24
Net debt, EUR million
2,7
4,4
3,4
2,9
1,8
0
1
2
3
4
5
2010 2011 2012 2013 2014
Net debt / EBITDA, excluding non recurring items
427
597
625
783827
0
200
400
600
800
1000
2010 2011 2012 2013 2014
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Metsä GroupMetsä Board
‒ USD and SEK vs. Euro have moved to favourable direction from Metsä Board’s viewpoint in 2H 2014
and in early 2015‒ Hedging of the main foreign currency flows is 5-7 months
‒ Positive result impact from exchange rate changes in 2014
was about EUR 15 million compared to 2013‒ Positive impact in 2015 expected to be bigger
‒ Annual unhedged EBIT sensitivity of 10 % change vs. euro‒ EUR 45 million in USD
‒ EUR 20 million in GBP
‒ Reversed EUR 30 million SEK
Exchange rate changes favourable for Metsä Board
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Metsä GroupMetsä Board26
‒ Metsä Board’s operating result excluding non-recurring items is expected to
improve slightly in 1Q 2015 compared to 4Q 2014
Near- term profitability outlook
Operating result excluding non-recurring itemsEUR million
3019
29 28
6
2520
24 2636 35 37
0
10
20
30
40
50
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Result before taxes excluding non-recurring itemsEUR million
-9
1710 9
1927 32
918
42021
-10
0
10
20
30
40
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
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Metsä GroupMetsä Board27
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
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Metsä GroupMetsä Board
Key priorities in 2015
‒ Grow profitably the paperboard businesses globally
‒ Successful implementation of the investment project in Husum
‒ Secure good price levels
‒ Further improve excellent product quality and supply chain
‒ Develop new products for existing and new end uses
‒ Elimination of the losses from Gohrsmühle mill
‒ Continue productivity improvements and cost savings
‒ Further competence development, especially related to Husum’s new products
6,4
4,8
3,4
7,6
-5,6
9,1
-6
-3
0
3
6
9
12
15
2009 2010 2011 2012 2013 2014
Target min. 12 % from 2017 onwards
ROCE, excl. non-recurring items%
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Metsä GroupMetsä Board
Make the most of Metsä Board
Thank You!
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