Metsä Board · 2018-11-30 · 3 Investment highlights of Metsä Board Folding boxboard 55 % White...

Metsä Board

Investor presentationJanuary–December 2018

Investor presentation

1-9/20182

Contents

Metsä Board in brief 3

Operating environment and demand drivers 15

Main contributors in Metsä Board’s profitability 23

Results: January–September 2018 29

Balance sheet and financing 39

Sustainability and product safety 43

Sustainability guides our R&D work 55

Owners and management 66

Contact information 70

3

Investment highlights of Metsä Board

Folding boxboard55 %

White kraftlainer

27 %

Market pulp18 %

Sales split

by productSales split

by market area• We are pure-play paperboard company

focused on premium fresh fibre

paperboards

• Global trends, e.g. sustainability and

urbanization drive the demand for

ecological and lightweight packaging

• We have a strong market position …

• … and good control of wood raw

material and self-sufficiency in pulp

EMEA70 %

Americas23 %

APAC7 %

FY 2017:

EUR 1,849m

FY 2017:

EUR 1,849m

Our total paperboard capacity is

2m tonnes/yearof which

1/3 are white kraftliners and

2/3 folding boxboard Investor presentation

1-9/2018

Folding boxboards

Packaging solutions for consumer goods

Food service boards

Solutions for food service

White kraftliners

Retail-ready tray and point-of-sale solutions

Our light, pure and safe paperboards have various

end-uses…

5

… and we have a broad customer base

BRAND OWNERS

FOLDING BOXBOARD WHITE KRAFTLINERS

MERCHANTS

CORRUGATED BOX

MANUFACTURERS

CONVERTERS


1-9/2018

Sustainability

We use only renewable fresh fibres from sustainably managed northern forests

Food safety

We have good control of raw materials, which guarantees purity and safety in food contact uses

E-commerce

Our paperboards offer a strong promotion and branding experience

Our fresh fibre paperboards offer solutions for global trends

Globalisation & urbanisation

We offer recyclable products that are ideal for the circular economy

7

We have a leading position in Europe

35% 32%

Folding boxboard

in EuropeTotal capacity 3.8m tonnes

White kraftliner

in EuropeTotal capacity 2.1m tonnes

Metsä

Board

#1

#2#3

#4

#5

Others Metsä

Board

#1

#2#3

#4

#5

Others

• Our regional sales split:

70% EMEA

23% Americas

7% APAC

• In APAC we focus on high-

quality FBB segment

• We are the largest European

importer of FBB to US

• We are #1 in coated white

kraftliners globally


1-9/2018

Wood products Paperboard

METSÄ

TISSUE

METSÄ

FOREST

Wood supply and

forest services

METSÄ

FIBRE

Pulp and sawn

timber

METSÄ

WOOD

METSÄ

BOARD

Tissue and

cooking papers

Group’s parent company, owned by 104,000 Finnish forest owners

METSÄLIITTO COOPERATIVE

METSÄ GROUP

METSÄ BOARD

OWNS 24.9%

• High availability of northern wood

• Consistent quality of fibres that are tailor-made for the end products

We have good control of wood raw materials,

from forests to pulp and board production

Through Metsä Fibre’s ownership Metsä

Board’s annual net pulp balance is

550,000 tonnes long in 2018Investor presentation

1-9/20188

Our production is close to our main raw material

9

Husum, SWE400,000 t/a FBB

270,000 t/a WKL

730,000 t/a Pulp

Kemi420,000 t/a WKL

620,000 t/a Pulp*

Kaskinen370,000 t/a BCTMP

Kyro190,000 t/a FBB

Äänekoski240,000 t/a FBB

1.3 million t/a Pulp*

Simpele290,000 t/a FBB

Joutseno330,000 t/a BCTMP

690,000 t/a Pulp

Tako210,000 t/a FBB

Wood sourced from

Finland, Sweden,

Baltics and Russia.

*Metsä Fibre mill

Our net balance in pulp in 2018,

including the 24.9% ownership in

Metsä Fibre, is 550,000 t/a

Total paperboard capacity:

Folding boxboard (FBB): 1.33m t/a

White kraftliner (WKL): 690,000 t/a


1-9/2018

Our focused strategy has increased shareholder value

Enterprise value, EUR million

0

500

1000

1500

2000

2500

3000

3500

2012 2013 2014 2015 2016 2017 9/18

Market capitalization, EUR million

Net debt, EUR million

Dividend, EUR and payout ratio, %

0%

20%

40%

60%

80%

100%

0,00

0,05

0,10

0,15

0,20

0,25

2012 2013 2014 2015 2016 2017

Dividend, EUR Dividend/EPS, %

10

CAGR in dividend

+30%in 2012–2017


1-9/2018

Our financial targets aim for profitable growth

and a strong balance sheet

Comparable ROCE, %

9,1

11,3

8,1

11,2

14,1

2014 2015 2016 2017 LTM

1,8

1,2

2,0

1,21,0

2014 2015 2016 2017 9/2018

Net debt / comparable EBITDA

10%

13%12%

15%

6%

2014 2015 2016 2017 LTM

Annual growth in total paperboard deliveries, %

Target is to

exceed

relevant

market

growth,

3%/a

Dividend policyWe aim to distribute at least 50% of our

result for the financial period in annual dividends

Target >12% Target <2.5

1111Investor presentation

1-9/2018

12

We have been growing at a CAGR of 12% –

well above average market growth…

0

500

1 000

1 500

2 000

2013 2014 2015 2016 2017 LTM

White kraftliner Folding boxboard

Metsä Board’s annual paperboard deliveries

Annual global

demand growth for

folding boxboard

and white kraftliner

is estimated to be

3%

Source: Metsä Board´s own research

1,0

00 t

onnes


1-9/2018

Growth capex:

2011–12 Debottlenecking in Simpele, Äänekoski and Kyro mills: total 150,000 t/a of FBB

2015–16 New folding boxboard production line in Husum: 400,000 t/a of FBB and linerboard production line conversion: 270,000 t/a of WKL

2017 New extrusion coating line in Husum: 100,000 t/a PE coating capacity 13

…driven by capacity increases

0

30

60

90

120

150

180

2010 2011 2012 2013 2014 2015 2016 2017 2018E

Maintenance capex Growth capex

Depreciation

Capital expenditure and depreciation

EU

R m

illio

n

NEXT STEPS

• Focus on profitability

– To keep ROCE above 12% and

– To generate the highest possible

shareholder value

• The best returns can be achieved from

medium-sized investments to increase

the capacity of our current production

lines

• In medium term, this means moderate

growth and a strong focus on profitability


1-9/2018

• Our free cash flow has improved due to

– Improved profitability

– Decreased capex

– Good working capital discipline

• Capital allocation in the near future

– Dividend: supported by strong performance

– Capital structure: deleveraging continues to levels

below 1.0x

– CAPEX: return-based allocation (ROCE above 12%)

-40

-20

0

20

40

60

80

-100

-50

0

50

100

150

200

2013 2014 2015 2016 2017 LTM

FCF, EUR million FCF/EBITDA,%14

Our cash flow generation is back on track after the

heavy investment years of 2015–2016

EUR million %

Free cash flow in EUR million and % of EBITDA

Comparable EBITDA (LTM) EUR 341 millionInvestor presentation

1-9/2018

Operating environmentand demand drivers

Paperboard is the packaging material of the future

Growing by 3% per year

16

The total packaging market is USD 850 billion Average annual growth rate of paperboard packaging

USD

300 bn

US

D b

nSource: Smithers Pira

0

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 2017 2022F

+3% per year 2017–2022

Board and Paper

Other fibre-based

Plastic

Metal

Glass

36%

10%

34%

13%

7%


1-9/2018

17

We have good growth opportunities in premium

paperboards

Cartonboard White linerboardCartonboard White linerboard Cartonboard White linerboard

Total annual

demand:

10 million

tonnes

3 million

tonnes10 million

tonnes

5 million

tonnes

22 million

tonnes

3 million

tonnes

Americas EMEA APAC

FSB

FBB

Other

fresh fibre

grades

Recycled

grades

CWKL

WKL

White testliner

FSB

FBB

Other

fresh fibre

grades

Recycled

grades

CWKL

WKL

White

testliner

FSB

FBB

Other

fresh fibre

grades

Recycled

grades

WKL

White

testliner

Annual global

demand

growth for

FBB, FSB and

WKL is

estimated to be

3%

FSB = food service board, FBB = folding boxboard, SBS = other fresh fibre grades, CUK, WLC = recycled grades

WKL = uncoated white kraftliner, CWKL=coated white kraftliner

28%

77%

41%

38%

36%

Source: Metsä Board research based on several sources,

e.g. CEPI Cartonboard and Containerboard, RISI


1-9/2018

18

We sell globally, but have a regional approach The Americas is the biggest growth area

AMERICASSHARE OF TOTAL PAPERBOARD

DELIVERIES IN 1–9/2018

23%

EMEASHARE OF TOTAL PAPERBOARD


70%

APACSHARE OF TOTAL PAPERBOARD


7%

Demand drivers:

• Growing upper and middle

classes, and increased

purchasing power

• More brand-aware

consumers

• Continued shift to modern

retail and mobile

commerce

Demand drivers:

• Stronger consumer

confidence

• Acceleration in

environmental

commitments and

regulations

• Stricter food safety

requirements

Demand drivers:

• Strong consumer

confidence in the US,

private consumption

recovering in Latin America

• Emerging environmental

considerations

• Trend for lightweight

packaging – but limited

local capacity in FBB


1-9/2018

Rapidly growing concern about non-renewable

packaging materials is increasing demand for

fresh fibre paperboards

• Growing consumer awareness:

Origin and transparency of

materials, renewability, resource

efficiency and recylability

• Brand owners are committed to

reducing their carbon footprints:

Lighter packaging reduces CO2

emissions across the value chain

20

Sustainability is on

everybody’s agenda

“Our comprehensive approach

to reducing our environmental

impact means looking at all

aspects of our business, how

they intersect and how we can

integrate new solutions to

create meaningful and

sustained change.”

– Starbucks website

“We want low-carbon to become

the new normal, so we’re taking

action to reduce GHG emissions

throughout our value chain.”

– Unilever website


1-9/2018

• Health and safety aspects are strongly emerging in

food packaging

• Purity and safety have become critical factors, also for

consumers

• Growing worry about e.g. fluorochemicals or mineral oil

migration from recycled packaging into foodstuffs set

stricter demands on packaging materials

• Packaging’s strength and durability are non-negotiables

to reduce food waste

21

Food safety is growing its

importance


1-9/2018

• Increasing quality demands drive the demand of white

kraftliners

– Functionality, durability and consumer experience are the

key words

– Personalisation of boxes is supported by advanced

technology in digital printing

• The value of E-commerce is expected to grow by 20%

per year on average and its share of the retail trade is

estimated to grow from 10% to 18% in 2017-2021

Branding and personalisation

are growing their importance in

E-commerce


1-9/201822 Sources: eMarketer, Smithers Pira

Main contributors in Metsä Board’s profitability

• Strong demand and limited supply in

fresh fibre paperboards have led to

increased price levels

• Our latest price increase

announcements:

– FBB: Europe EUR 80/t, valid 11/2018,

Americas USD 50/t, valid 9/2018

– WKL: Europe EUR 50/t, valid 10/2018

24

Our top priority is to secure a continuously healthy

price level

Market prices have increased in Europe since 2017

€/tonne

500

600

700

800

900

1000

1100

1200

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Folding boxboard White-top kraftliner


1-9/2018

Source: Foex Indexes Ltd

USD

Market pulp price is positively contributing to

our result

25

USD• In 2018, Metsä Board’s net pulp balance is

roughly 550,000 tonnes long, including our

share in Metsä Fibre

• Estimated net balance for 2019 is

approximately 600,000 tonnes long

• 24.9% of Metsä Fibre’s net result (post-tax)

is consolidated in Metsä Board’s EBITDA

Pulp prices (PIX) in Europe have risen by one third

in 1-9/2018 compared to last year


1-9/2018

We see cost inflation slowing down in

the near future

Metsä Board’s cost split in 2017 total EUR1.6 billion*

26

Wood26 %

Logistics16 %

Chemicals, pigments and fillers

14 %

Energy12 %

Other variables

3 %

Personnel14 %

Other fixed15 %

Cost component Near-term outlook

Wood Prices in Finland and Sweden are expected to remain stable.

In the Baltics, the price level will depend on the demand in

export markets (e.g. Sweden)

Logistics In line with general cost inflation

Chemicals In line with or below general cost inflation

Energy Stabilisation following the oil and electricity price hikes in

2018

Personnel Approximately +2% y-on-y, mainly based on collective

agreements

Other fixed In line with or below general cost inflation

* incl. the share of Metsä Fibre’s costsInvestor presentation

1-9/2018

27

We estimate that profit improvement from Husum is

slightly higher than our previous estimates

New estimate in

2019 vs. 2016:

EUR 110–120 million

Original estimate in

2019 vs. 2016:

EUR 100 million

Achieved in

2018 vs. 2016:

EUR 90 million

Estimated profitability improvement in 2019 vs. 2016

Our estimate is based on

• Changed market environment since 2017

• Positive from market pulp prices and SEK/EUR

• Negative from wood costs and USD/EUR

• Estimated potential in 2019 through paperboard

pricing of EUR 20–30 million

• Gradual improvement potential also after 2019

Initial estimate communicated in 2017


1-9/2018

Component Change Impact on EBIT

Folding

boxboard

Price +/- 10% > EUR 100 million

White

kraftliners

Price +/- 10% > EUR 50 million

FX USD/EUR +/- 10% EUR 65 million

SEK/EUR +/- 10% EUR 40 million

Pulp Pix price of SW/HW

per tonne

+/- 10% EUR 25 million

Wood Price per m3 in

Finnish mills

+/-10% EUR 30 million*

Price per m3 in

Husum

+/-10% EUR 20 million

28

Our main profit components and sensitivities

Annual FX net transaction exposure is approximately

EUR1.1 bn, of which 55% USD, 36% SEK and 7% GBP

* incl. ownership in Metsä Fibre

Metsä Board is sourcing approximately 5.6 million m3 wood in

2018, of which 35% from Sweden, 35% Finland, 20% Baltics

and 10% Russia. Including the 24.9% share from Metsä Fibre,

the total sourcing is 10.7 million m3


1-9/2018

January–September 2018

Interim Report

Investor presentation 1-

9/201830

Key financials

Q3/18 Q2/18Change

Q3/18

vs. Q2/181–9/18 1–9/17

Change

1–9/18 vs

1–9/17

FY

2017

Sales EUR, m 475 519 - 8% 1486 1397 6% 1,849

EBITDA* EUR, m 84 84 0% 263 211 24% 289

Operating result* EUR, m 64 59 8% 192 139 38% 194

% of sales % 13.4 11.4 12.9 10.0 10.5

Result before taxes* EUR, m 60 53 11% 174 110 58% 157

Earnings per share EUR 0.16 0.12 33% 0.43 0.30 43% 0.42

ROCE* % 15.0 13.9 14.7 10.6 11.2

Capex EUR, m 11 15 - 30% 36 39 - 6% 65

Cash flow from operations EUR, m 54 36 + 48% 121 130 - 7% 236

Net debt, at end of period EUR, m 344 388 - 11% 344 437 - 21% 358

*comparable

• Our profitability improved due to higher

paperboard prices and strong pulp market

• Our paperboard delivery volumes were down

on record-high levels in Q2

• Wood costs remained high but steady

• We had planned maintenance shutdowns at

Kemi integrated mill and partly at Husum

integrated mill

31

Performance in Q3 2018


1-9/2018

Our total paperboard delivery volumes decreased

in Q3 from the high levels of H1 2018

227 250 266 245 265304 299 276 297 328 297

142148 148

143163

173 170152

171161

149

0

100

200

300

400

500

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

White kraftliner Folding boxboard

1,0

00 tonnes

32

1–12/2016

1,568k tonnes1–12/2017

1,802k tonnes

Annual global

demand

growth for

folding

boxboard and

white

kraftliners is

estimated to

be 3%

Source: Metsä

Board’s own

research

1–9/2017

1,375k tonnes1–9/2018

1,405k tonnes+2%

+15%Investor presentation

1-9/2018

Year-to-date 2018 delivery volumes grew by 2%

compared to last year

Folding boxboard YTD 2018 (1–9/17) tonnes

EMEA637k (601)

Americas192k (179)

APAC92k (88)

↑

EMEA344k (350)

Americas 134k (145)

33

White kraftliner YTD 2018 (1–9/17)tonnes

69%

21%

10%

72%

28%

Total FBB deliveries

922k tonnes (868)Total WKL deliveries

481k (506)

↑

↑

↓

↓


1-9/2018

Our margins improved due to higher prices

SalesEUR million

445 474 479 451 492 519 4750

100

200

300

400

500

Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18

45 44 50 54 69 59 64

10,2 %9,2 %

10,5 %

12,0 %

14,0 %

11,4 %

13,4 %

0%

4%

8%

12%

16%

0

20

40

60

80

Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18

34

Comparable operating resultEUR million and % of sales

EU

R m

illio

n

EU

R m

illio

n

1–12/2017:

EUR 1,849 million

1–9/2017:

EUR 1,397 million

1–9/2018:

EUR 1,486 million

1–12/2017:

EUR 194 million

(10.5% of sales)

1–9/2017:

EUR 139 million

1–9/2018:

EUR 192 million


1-9/2018

0%

2%

4%

6%

8%

10%

12%

14%

16%

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Comparable ROCE-%, Quarterly

35

ROCE is above its target level of 12%12 month rolling ROCE was 14.1%

Target: 12%


1-9/2018

• FX impacted Q3 result negatively: EUR -4 million compared to Q2, mainly caused by USD/EUR

– YTD 2018 impact EUR -47 million compared to corresponding period last year

• Stronger USD and weaker SEK against EUR will support results from Q4 onwards

FX: Headwind from USD in Q3

54 %

36 %

8 % 2 %USD

SEK

GBP

Othercurrencies

Annual transaction exposure

total EUR 1.1 billion FX sensitivities excluding hedges

10% strengthening of foreign currency vs. EUR will have

an impact on Metsä Board’s EBIT of

Currency Next 12 months

USD, $ EUR +63 million

SEK EUR -41 million

GBP, £ EUR +9 million

36Investor presentation

1-9/2018

-22

6755

2637

68

106

30 3654

-72

49 177

2

5979

20 2343

-100

-50

0

50

100

150

200

250

-100

-50

0

50

100

150

200

250

Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Cash flow from operations, quarterly Free cash flow, quarterly

Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months

EU

R m

illio

n

37Free cash flow = Cash flow from operations - investments

Our cash flow generation is back on track after the

heavy investment years of 2015–2016

EU

R m

illio

n


1-9/2018

38

Near-term outlook

• Market prices are expected to be stable or rise slightly

• Pulp market is expected to remain strong

• FX will have a positive impact on Q4 result

• Metsä Board’s paperboard delivery volumes in Q4 will remain flat

or decline slightly compared to Q3 due to seasonality

• Cost inflation has slowed down, no significant changes to

production costs expected

• Net impact of energy costs and sale of emission rights will have a

positive impact in Q4 compared to Q3

• Part of Husum shutdown took place at start of October

• Comparable operating result in Q4 2018 is expected to improve

compared to the Q3 2018


1-9/2018

Balance sheet and financing

541 488 464 458 495 437 358 335 388 344

2,1 2,12,0

1,92,0

1,7

1,21,1

1,21,0

0,0

0,5

1,0

1,5

2,0

2,5

3,0

0

100

200

300

400

500

600

6/2016 9/2016 12/2016 3/2017 6/2017 9/2017 12/2017 3/2018 6/2018 9/2018

Net debt, EUR million Net debt to comparable EBITDA (12 months)

40

We have a strong financial position –

leverage at 1.0x

Net debt / EBITDA target level: <2.5

EU

R m

illio

n


1-9/2018

0 50 100 150 200 250

2018

2019

2020

2021

2022–26

2027

Bonds Loans from financial institutions Pension loans Other loans

41

We have a balanced debt portfolio

Maturity profile of interest-bearing debt, total EUR 469 million

30 September 2018

EUR million

Rating agency Rating and

outlook

Latest

update

Standard & Poor‘s BBB-

stable

02/2018

Moody‘s Ba1

positive

04/2018

Metsä Board’s credit ratings

2027 Notes’ annual coupon is 2.75%


1-9/2018

In addition company has undrawn credit facility EUR 150 million, maturing in 03/2020


1-9/201842

Net financial costs January–September 2018

39 32 31 36 18

4,2

3,8

3,3 3,3 3,3

2,0

2,5

3,0

3,5

4,0

4,5

5,0

0

10

20

30

40

50

2014 2015 2016 2017 1-9/2018

Net financial costs, EUR million

Average interest rate at the end of period, %

EUR million %

• Net financial costs (including

foreign exchange differences) in

1–9/2018 were EUR 18 million

(1–9/17: EUR 29 million)

• Average interest rate at the end

of review period was 3.3%

Sustainability and food safety

Replacing fossil-based materials, i.e. plasticsThe solution: renewable and biodegradable wood fibre

Increased waste generation due to urbanisationThe solution: circular economy and bio-based packaging

Reducing carbon footprintThe solution: bio-based fuels, lower production emissions and lighter paperboards

Consumer expectations on safer products– especially in food packagingThe solution: pure and safe fresh fibres

Fresh fibre paperboards offer solutions to major challenges

Finland – the largest forest cover in Europe

45

100+MILLION M3

Annual growth of Finnish forests is

over 100 million m3 – more than ever

Forests grow more than they are used,

annual harvesting 71 million m3 (2017)

Four seedlings are planted for each

harvested tree

Over 20% of the Finnish export comes

from forest-based products

The area of Finland

Cities, villages and roads

Fields and agricultural use

Lakes and rivers

Forest

10%

10%

75%

5%

Wood is the main raw

material for Metsä Board

• Metsä Board sources its

wood mainly from Finland

and Sweden (75 %)

• All wood used is 100%

traceable and comes from

sustainably managed forest

sources ensuring the bio-

diversity and recreational use

of forests

• 80% of wood sourced is

certified (remaining 20 % from

controlled forest sources)

46

Metsä Board has

decreased its water use

by 17% since 2010

• Metsä Board uses only

surface water in its

processes

• Water is been recirculated

in processes several times

• 99% of the water used is

returned back to the close-by

waterways after thorough

purification

Metsä Board Tako is located

in the middle of the city

• Tako mill follows very tight

environmental and noise

permits

• The most efficient mill in

water use of all Metsä

Board’s mills

• Efficiently planned logistics

chain

City of Tampere

• The most populous inland

city of the Nordic countries

• Over 230 000 inhabitants

Lighter packaging reduces CO2 emissions across the

value chain – Our fossil CO2 emissions per product tonne

have reduced by almost 50% since 2009

Less energy, water and

raw material consumed

Less

transport

weight

Less waste

generated

Own generation22 %

Through PVO shareholding29 %

Purchased electricity

46 %

Outsourced generation

3 %

Electricity sourced in 2017 (total 2.4 TWh)

50

Our energy efficiency has improved

by over 10% during 2009-2017

Wood-based52 %

Nuclear power28 %

Gas8 %

Others12 %

Primary energy used in 2017(total 12.0 TWh)

• 80% of primary energy we use is fossil free

• After OL31) starts up, we will be nearly self-sufficient in

electricity in Finland

− Including the electricity used in Husum mill,

self-sufficiency will be nearly 80%

• Metsä Board’s shareholding in PVO2) is 3.2%

− Fair value as per 30 September 2018 was EUR 270 million

1) Olkiluoto Nuclear Power Plant

2) Pohjolan Voima Oyj is a non-listed public limited liability company.

It supplies electricity and heat for its shareholders at cost price

3) Out of 46% share of purchased energy, 8% is from Metsä Fibre

3)


1-9/2018

RAW MATERIALS AND SUPPLY CHAIN

We are committed to high performance on sustainability

Share of certified wood:

PERFORMANCE 2017

80%TARGET

>80%

Ensure sustainability of the main logistics

flows:

TARGET

100%

Fossil CO2 emissions per product tonne

2009–2020:

PERFORMANCE 2017

-47%TARGET

-30%

Energy efficiency improvement

2009–2020:

PERFORMANCE 2017

10.2%TARGET

12%

Process water use per product tonne

2010–2020:

PERFORMANCE 2017

-17%TARGET

-17%

Coverage of Code of Conduct training:

PERFORMANCE 2017

79%TARGET

100%

Lost-time accidents frequency annually

(LTA1: 6.4):

PERFORMANCE 2017

-28.4%TARGET

-10%

Sickness absenteeism:

PERFORMANCE 2017

3.9%TARGET

<3%

RESOURCE EFFICIENCY AND ENVIRONMENTAL IMPACTS

STAKEHOLDERS AND SOCIAL IMPACTS

PERFORMANCE 2017

100%

External recognitions and commitments in sustainability:

Leader in Sustainalytics’

assessment in May 2018.A rating of AAA in the MSCI

ESG Ratings assessment in

June 2018.

Metsä Board was awarded

“Prime” status in Oekom

corporate responsibility rating in

May 2018


1-9/201851

EU Commission

– Announced plans to regulate printed food contact materials (FCMs)

on EU level

Food Contact Material legislation in Switzerland

– Part of Swiss Food law

– Recycled paper cannot be used as FCM, if direct contact with food

products

– Concentration limits of certain polyaromatic hydrocarbons

micrograms/kg food has been set

Draft German mineral oil regulation

– 4th ordinance draft published in March 2017

– The draft focuses on mineral oil migration from recycled fibre based

packaging materials to food

52

Increased regulation to ensure

product safety


1-9/2018

Metsä Board has goodcontrol over raw materials– from forests to pulpand board production

This ensures a uniquelysafe and unbroken productchain

• Metsä Board’s fresh fibre paperboards do

not change the taste, smell, colour or

composition of the food..

• ..and barriers protect the board from

foods like beverages

• Food packaging made from recycled

fibres includes mineral oil migration risk ..

• .. and food needs to be protected from

board

Packaging should not

harm food


1-9/201854

We promote

circular

economy

providing vital

material

to the recycling

loop

Recycled fibre

packaging is

suitable for

many goods

In food

packaging

mineral oil

migration pose

a health hazard

in recycled fibre

Global

restrictions in

the use of

recycled fibres in

direct food

contact

Packaging made from recycled material

Recycling would

end in few

months without

fresh fibre inflow

Sustainability guides our R&D work

Our key product development focus areas

LIGHTWEIGHTING

57

BARRIER BOARDS

• Improved BCTMP

• Microfibrillated cellulose (MFC)

• Strength additives

• Dispersion barriers

• Bio-based raw materials


1-9/2018

58

We achieve high bending stiffness

from a strong outer layers and a

thick and light inner layer

Bleached chemical pulp

High yield pulp (BCTMP) or groundwood pulp

Bleached chemical pulp

Top coating


1-9/2018

PR

OM

OT

ION

Bri

gh

tne

ss

PROTECTIONStiffness

Folding boxboard

(FBB)

White lined chipboard

(WLC)

Metsä Board’s

folding boxboard

Coated unbleached kraft

(CUK)

The role of packaging is to promote the brand and

protect the product – in a cost-effective way

Solid bleached board

(SBB)


1-9/201859

Light weight – better yield and sustainability

High strength and bending stiffness – secure protection

High brightness and smoothness – excellent printability

Consistent quality – improved production efficiency

High-yield pulp makes the difference between folding boxboard and other grades …

SBS

(100% chemical pulp)

Metsä Board FBB

(up to 70% BCTMP,

30% chemical pulp )

… and leave more trees standing

5 m3 of wood per tonne of pulp

3.4 m3 of wood per tonne of pulp

=

=


1-9/2018

Lighter-weight paperboards: Better with Less

Metsä Board

lightweight paperboard

Average FBB –

Folding boxboard

SBB –

Solid bleached board

WLC –

White lined chipboard

62

The weights equal to a print job of 30 000 sheets on a standard size printing press


1-9/2018

• Made from bio-based, recyclable and

biodegradable fresh fibres

• Developed especially for food service use

with short food contact time and when light

grease resistance is sufficient

• We constantly develop other barrier solutions,

and investigate the utilization of dispersion

and biobased coatings, and their commercial

potential


1-9/201863

Metsä Board has launched an

innovative eco-barrier paperboard

Barriers preserve packed products and the package

Barriers reducing waste have a

huge positive total effect on

environment

Barriers are inbuild in many competing

materials e.g. plastics, metals but those

have other issues

Often needed are water, moisture and

grease barriers and they are in the focus

of Metsä Board’s development

64

Packed product

Influence from

environment

Light, O2, H2O

Light, O2, H2O, Aromas/Odor

Monomers, additives,

oxidation products

CO2, H2O, N2, Aromas/Flavor

H2O, Fats, CO2, Acids,

Alcohols, Aromas

Packaging material

Barriers protect product

and/or packaging


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65

Getting familiar with terminology:

Barrier boards types

NO

N-R

EN

EW

AB

LE

BIODEGRADABLE

RE

NE

WA

BL

E

NON-BIODEGRADABLE

Biobased,

biodegradable

coating, i.e. starch,

PLA etc.

Oil-based,

biodegradable

coating

Bioplastic coating,

i.e. green PE

Latex based

dispersion coating

PE extrusion

coating


1-9/2018

Owners and management

Market cap and foreign owners30 September 2018

Ownership distribution30 September 2018

Market cap and ownership distributionMetsä Board shares (METSB, METSA) are listed on Nasdaq Helsinki

0

5

10

15

20

25

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2013 2014 2015 2016 2017 9/2018

Market cap, EUR million

Share of foreign owners, %

41 %

19 %

17 %

23 %

MetsäliittoCooperative

Domesticinstitutionalinvestors

Domestic privateinvestors

Foreign owners

EUR million

67

%


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1-9/201868

Metsä Board Corporate Management Team

Mika JoukioCEO

Chairman of CMT since 2014

MG employee since 1990

Share ownership: 250,000

Jussi NoponenCFO

Member of CMT since 2016



Sari PajariSVP, Marketing and Sales




Ari KivirantaSVP, Development




Harri PihlajaniemiSVP, Production


MG employee in 2001-2004

and since 2017

Share ownership: no ownership

Susanna TainioSVP, HR




Share ownerships are B-shares.

MG = Metsä Group

METSÄ TISSUE

Tissue and cookingpapers

Sales 2017:

EUR 1.0 billion

Personnel:

2,800

METSÄ WOOD

Wood Products

Sales 2017:

EUR 0.5 billion

Personnel:

1,400

METSÄ FOREST

Wood Supply and ForestServices

Sales 2017:

EUR 1.6 billion

Personnel:

850


1-9/201869

Metsä Board is part of Metsä Group (Metsäliitto Cooperative)

METSÄ BOARD

Paperboard

Sales 2017:

EUR 1.8 billionPersonnel:

2,350

Metsäliitto Cooperative

holding 42% of shares,

61% of votes

METSÄ FIBRE

Pulp and SawnTimber

Sales 2017:

EUR 1.9 billion

Personnel:

1,200

Metsäliitto Cooperative

holding 50.1%,

Itochu Corporation 25.0%

Metsä Board 24.9%

METSÄLIITTO COOPERATIVE Owned by 104,000 Finnish forest owners

Metsä Board is listed

on the Nasdaq Helsinki

Metsäliitto Cooperative holding 100%

Katri Sundström

Vice President, Investor relations

Tel +358 400 976 333

[email protected]

Metsä Board Corporation

P.O. Box 20

02020 Metsä, Finland

www.metsaboard.com

70

Contact information


1-9/2018

mailto:[email protected]

http://www.metsaboard.com/

This presentation includes forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,”

“estimate,” “will,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or any similar expressions

identify certain of these forward-looking statements. Others can be identified from the context in which the statements are

made. By their nature, forward-looking statements are subject to assumptions, risks and uncertainties. Although we

believe that the expectations reflected in these forward-looking statements are reasonable, actual results may differ, even

materially, from those expressed or implied by these forward-looking statements. We urge presentation participants not to

place undue reliance on such statements.

The information and views contained in this presentation are provided as at the date of this presentation and are subject to

change without notice. Metsä Board does not undertake any obligation to publicly update or revise forward-looking

statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

Viewers should understand that this presentation does not constitute, and should not be construed as, an offer to buy or

subscribe for Metsä Board’s securities anywhere in the world or an inducement to enter into any investment activity

relating to the same. No part of this presentation should form the basis of, or be relied on in connection with, any contract

or commitment or decision to invest in Metsä Board securities whatsoever. Potential investors are instructed to acquaint

themselves with Metsä Board’s annual accounts, interim reports and stock exchange releases as well as other information

published by Metsä Board to form a comprehensive picture of the company and its securities.

Metsä Board publishes inside information according to Market Abuse Regulation (MAR) and rules of the Nasdaq Helsinki.


1-9/201871

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Metsä Board · 2018-11-30 · 3 Investment highlights of Metsä Board Folding boxboard 55 % White...

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