Metsä Board Investor presentation 2 February 2017

Metsä BoardInvestor presentation 2 February 2017

Investor presentation February 20172

ContentsInvestment highlights 3

Strategic cornerstones and financial targets 11

Operating environment and market position 19

Growth in the paperboard business 27

Q4/2016 and FY 2016 results and outlook 34

Balance sheet and funding 44

Investments 52

Production, capacities and sourcing 58

Sustainability 65

Owners 69

Appendix 72

Contact information 78

Investment highlights

• Market leader in folding boxboard in Europe and global market leader in coated white fresh fibrelinerboard

• Strong fibre know-how and self-sufficiency in pulp • Sales in 2016 EUR 1.7 billion and comparable

operating result EUR 137 million• Appr. 2,500 employees in 23 countries• Global sales to over 100 countries and eight

production units in Finland and Sweden


Metsä Board in brief

50%25%

15%

10%

Sales split in 2016

Folding boxboardLinerboardsMarket pulpOthers

75 %

17 %

8 %

Sales split by region in 2016

EMEA

Americas

APAC

5

High-performance packaging materialsFolding boxboards, white fresh fibre linerboards and fully bleached linerboards

Consumer goods Retail-ready Food service


• Lightweightness– Even 30% lighter than competing grades (e.g. SBB, WLC)

• Excellent printability and runnability

• Purity and safety

• Bioenergy– More than 60% of the energy Metsä Board uses comes from

renewable resources

• Wood from known origin– Fibres used in production are sourced from sustainably

managed northern forests

6

Benefits of Metsä Board paperboards

Metsä Board’s folding boxboards are produced from BCTMP or mechanical pulp, which is used in the middle layer (3) to make the board bulky and light. The two outer fibre layers (2 and 4) are made of chemical pulp, which maximizes the strength of the board.

Folding boxboard is the stiffest yet lightest paperboard grade



Comparable EBITDA development

185 208 236 283 231

8,8 %10,3 %

11,8 %

14,1 % 13,4 %

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

250

300

2012 2013 2014 2015 2016

EU

R m

illio

n

2016 was negatively impacted by Husum’s new FBB machine ramp-upComparable ROCE-%


Comparable EBIT-%

4,8

6,4

9,1

11,3

8,1

0

2

4

6

8

10

12

2012 2013 2014 2015 2016

%

3,6

5,2

6,8

9,08,0

0

2

4

6

8

10

2012 2013 2014 2015 2016%

Target over 12% from 2017


Strong improvement in productivity over time

1 000

1 100

1 200

1 300

1 400

1 500

1 600

1 700

1 800

1 900

2 000

1 000

1 300

1 600

1 900

2 200

2 500

2 800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E

Productivity (capacity) Personnel average

Production capacity (tonnes) / employee at current millsPersonnel

Capacity tn /employee

• High investment costs

• Limited availability of high yield pulp (e.g. BCTMP)

• Leading global consumer goods companies and corrugated box manufacturers not willing to change paperboard suppliers easily in the high-quality segments

– High speed packaging lines very quality sensitive– Requirements for uniform brand look and feel globally– Sustainability and product safety aspects

• Skilled people and organizations a crucial success factor


High threshold for new producers to enter high-quality paperboard segment

Vaihda kuva laadukas kartonki

Strategic cornerstones and financial targets

Values

• Responsible profitability• Reliability• Cooperation• Renewal

Strategic cornerstones

• Focus• Growth• Profitability


Metsä Board’s vision is to be the preferred supplier of premium paperboards creating value for customers globally

Focus on premium fresh fibre paperboards for consumer and retail packaging

This means to us:• We focus on serving customers whose quality

expectations require our high quality, light and strong packaging materials

• Our paperboards are produced from fresh fibres• Our products are used for packages at the store and

from the store to the consumer


Focus

Profitability is based on superior cost efficiency and healthy sales prices driven by high-quality pulps and unique technical know-how

This means to us:• Our superior cost efficiency will be achieved by further

developing productivity and efficiency of our mills, operations and people

• We will continue to drive down purchasing costs in all areas

• Our self-sufficiency in high-quality pulps together with unique paperboard making expertise helps us to improve our market position further and maintain healthy price levels


Profitability

Grow profitably together with brand owner, converter and merchant customers globally in businesses that benefit from our safe and sustainable paperboards

This means to us:• We grow in end-uses where our product is best suited to

protecting our customers’ products and promoting their brands and businesses

• Our customer base is global, including brand owner, private label, converter and merchant customers

• By selecting businesses that benefit from our paperboards we can generate value for our customers and grow profitably with them


Growth

Financial targets

Comparable ROCE, %


Net gearing, %

4,8

6,4

9,1

11,3

8,1

2012 2013 2014 2015 2016

72 70

51

32

44

2012 2013 2014 2015 2016

• Return on capital employed (ROCE) a minimum of 12% from 2017 onwards• Net gearing a maximum of 70%

• Grow the paperboard businesses profitably globally

• Ensure successful sales of new capacity

• Secure good price levels

• Keep best in class product quality and improve supply

chain

• Develop new products for existing and new end uses

• Continue productivity improvements and cost savings


Main priorities and actions to achieve financial targets

• Metsä Board’s dividend payout target is at least 1/3 of EPS

• Dividend proposal for 2016:– 0.19 per share– Totalling EUR 68 million– Corresponds 76 per cent of EPS and

73 per cent of comparable EPS 0,00

0,10

0,20

0,30

0,40

0,50

2012 2013 2014 2015 2016

EPS and DPS, EUR

Earnings per share Dividend per share


Dividend and EPS

Operating environment and market position

Demand is based on global trends

Globalisation Technology Sustainability Consumption

• Increasing role of retail and harmonisation of global brands

• Growing importance of logistics

• Consolidation of carton converters

• New innovations utilising wood fibre and other biomaterials

• Continuous development of production technologies

• Digitisation and automatisation change business dynamics

• Greater significance of resource efficiency drives circular economy and life-cycle thinking

• Increasing regulation brings additional obligations

• Social responsibility through value chain

• Growing consumption and consumers’ increasing quality needs globally

• Stronger demand for sustainable packaging

• Digital services change purchasing behavior

The global fresh fibre paperboard packaging market is about USD 120 billion

The total packaging market is USD 840 billion


Estimated average annual growth rate of fresh fibre paperboard is 3–4%

Fresh fibre paperboard

Other wood fibre based materials

Non-fibre based materials0

20

40

60

80

100

120

140

2013 2014 2015 2016E 2020F

USD bn

Source: Metsä Board estimates


Global folding boxboard market is about 9 Mt/aTotal cartonboard market is about 36 Mt/a*

Source: Metsä Board estimates

*) Excluding liquid packaging board, cup & plate stock, liner and uncoated recycled board.

APAC20 Mt/a

EMEA8 Mt/a

NorthAmerica

6 Mt/a

Lat. Am.2 Mt/a

Folding boxboard

Other fresh fibre grades

Recycled grades

Avg. growth rate for premium cartonboards is

3–4%/a


Global food service board market is 3.5 Mt/a*

Source: Metsä Board estimates*) Base board only, excl. other laminate materials such as aluminium and PE.

Cups

Plates

Cartons

Avg. growth rate for food service board is

3–5%/a

APAC1.0 Mt/a

EMEA0.9 Mt/a

Americas1.6 Mt/a

Metsä Board has a strong position in Europe

Largest Folding Boxboard Producers in EuropeTotal capacity: 3.6M tonnes

Largest White Fresh Fibre Linerboard Producers in EuropeTotal capacity: 2.2M tonnes

Sources: Company information, Pöyry Management Consulting Oy Q1 2017

16%

7%

9%

11%

21%

37%

0 300 600 900 1200 1500

Others

International Paper

Mayr-Melnhof

Kotkamills Oy

Stora Enso

Metsä Board

14%

8%

11%

13%

23%

31%

0 200 400 600 800

Others

SCA

BillerudKorsnäs

Mondi

Smurfit Kappa

Metsä Board


500

600

700

800

900

1000

1100

2010 2011 2012 2013 2014 2015 2016

Folding boxboard White‐top kraftliner

Market price development in folding boxboardand white-top kraftliner in Europe

Sources: Pöyry Management Consulting & FOEX Indexes Ltd

EUR/ tn

25 Investor presentation February 2017

Source: Foex Indexes Ltd

Softwood, USD

Softwood, EUR

Hardwood, EUR

Hardwood, USD

USDEUR

350400450500

550600650700750800850

900950

10001050

'10 '11 '12 '13 '14 '15 '16350400450500

550600650700750800850

90095010001050

Pulp price development (PIX)


Growth in the paperboardbusiness

Annual paperboard deliveries Target level 2 million t/a 2018 onwards

28

0

250

500

750

1 000

1 250

1 500

1 750

2 000

2012 2013 2014 2015 2016 2018 target

Fresh fibre linerboard Folding boxboardInvestor presentation February 2017

Paperboard deliveries, 1,000 tonnes Total deliveries in 2016 were 1.57m tonnes – annual growth 12%


Most important growth area is Americas

0

50

100

150

200

250

300

2011 2012 2013 2014 2015 2016 2018 target

Folding boxboard Fresh fibre linerboard

300

250

1,00

0 to

nnes

Actual and targeted deliveries to Americas


Ambitious growth targets for new paperboard volume from Husum mill

250150

150

0

500

1 000

1 500

2 000

Deliveries in 2015 Folding boxboard toAmericas

Food service boardglobally

Linerboard toEurope andAmericas

Targeted deliveriesin 2018

A total of 400,000 tonnesof new FBB capacity

1,00

0 to

nnes

Incremental capacity in linerboard*)

*) until July 2016 the paperboard machine (BM2) produced simoultenously fine paper reels.

• The goal is to remain Europe’s biggest producer of folding boxboard and white fresh fibre linerboards

• The biggest growth drivers are – Strong and long-term customer relationships – Innovative high-performance product portfolio to replace

other packaging materials– Top-class customer service concept

• In EMEA, Metsä Board’s paperboard delivery volumes grew by 10% in 2016 compared to 2015


Maintaining of strong market position in Europe

Metsä Board uses only fresh fibres from sustainably managed northern forests

EMEAShare of sales

75%

REGIONAL GOALS AND OPERATING MODEL:

• The most rapid growth is sought in the Americas, where most of Husum’s new capacity in folding boxboard is targeted

• The biggest growth drivers are– Limited local supply in folding boxboard– Due to strong consolidation, converters without own paperboard

production are looking for alternatives• In folding cartons their share is 40–50%

– Strong demand in food service board– Growing environmental awareness

• In Americas, Metsä Board’s paperboard delivery volumes grew by 14% in 2016 compared to 2015


Growth in the Americas in the coming years

Paperboard offers a sustainable option for plastics such as styrofoam in food service applications.

AmericasShare of sales

17%


• Metsä Board aims at moderate growth, primarily in cooperation with brand owners

• Responsible consumer goods companies promote good packaging– Consistent quality– Traceable raw materials– Responsible production

• Due to the local overcapacity in Asia, the timing is not good for aggressive growth

• In APAC, Metsä Board’s paperboard delivery volumes grew by 24% in 2016 compared to 2015


Focus on premium segments in the Asia-Pacific region

Global consumer goods companies not willing to change paperboard suppliers easily in the high-quality segments

APACShare of sales

8%


Q4 2016 and FY 2016 results and outlook

• Sales declined moderately, and comparable EBIT remained roughly at the same level as in Q3 2016

• Delivery volumes in paperboard and market pulpdeclined

• The annual maintanance shutdown at Husum wasextended by one week

• Average price level in paperboard was supported byan improved price level for Husum’s new FBB and the stronger US dollar

• The market situation was stable

Q4 2016 in summary



Key financials

Q4/16 Q3/16ChangeQ4/16

vs. Q3/162016 2015

Change2016

vs. 2015

Sales EUR million 422 440 -4% 1,720 2,008 -14%

EBITDA, comparable EUR million 53 59 -11% 231 283 -18%

Operating result, comparable EUR million 33 34 -4% 137 180 -24%

% of sales % 7.8 7.7 8,0 9,0

Result before taxes, comparable EUR million 23 27 -16% 107 150 -29%

Earnings per share EUR 0.07 0.05 +40% 0.25 0.39 -36%

ROCE, comparable % 7.7 8.0 8.1 11.3

Gross investments EUR million 43 16 +164% 162 178 -9%

Cash flow from operations EUR million 55 67 -19% 77 247 -69%

Dividend per share EUR 0.19* 0.17 +12%*) proposal to AGM

Quarterly sales and EBIT development

Sales, EUR million

499 526 522 498 462 436 423 440 4220

100

200

300

400

500

600

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

37 43 47 55 35 35 36 34 33

7,4 %8,2 %

9,0 %

11,0 %

7,6 % 8,0 %8,5 %

7,7 % 7,8 %

0%

2%

4%

6%

8%

10%

12%

0

10

20

30

40

50

60

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416


Comparable EBIT (EUR mill.) and EBIT-%

FY 2015:EUR 2,008 million

FY 2016:EUR 1,720 million

FY 2015:EUR 180 million

FY 2016:EUR 137 million-14% -24%

34 33

0

10

20

30

40

Q3 2016 Q4 2016

Operating result, EUR million


2016 operating result mainly impacted by Husum

180

137

0

50

100

150

200

FY 2015 FY 2016

Operating result, EUR million

+ Improved price of Husum’s new FBB, good performance in linerboard business, stronger US dollar

- Lower production and delivery volumes, extended maintenance shutdown at Husum

+ Stable development in Finnish mills, positive impact from FX rates afterhedges

- Ramp-up of new FBB machine, technicalchallenges at Husum, lower avg. price in FBB, declined market pulp prices

EBIT-%9.0

EBIT-%8.0

EBIT-%7.7

EBIT-%7.8

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

Comparable ROCE, %Investor presentation February 201739

ROCE-% remained at the same level throughoutthe year

Target >12% from 2017 onwards

Paperboard deliveries in 2016 up by 12%Seasonal decline in Q4

210 203 204 213 224 224 227 250 266 245

120 111 130 141 137 131 142148 148

143

0

60

120

180

240

300

360

420

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Folding boxboard Fresh fibre linerboard

1,00

0 to

nnes

Change in paperboarddeliveries:

-6% Q4/16 vs.Q3/16

+9% Q4/16 vs.Q4/15

+12% FY16 vs.FY15


Cash flows turned clearly positive in H2 2016

51 74 33 56 93 66

-22 -22

67 5546 56 9 8 45 8

-76-50

49 17

157

198

250

214

256 247

193

11589 77

110

155188

119 11870

-15

-73 -69 -56-100

-50

0

50

100

150

200

250

300

Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

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

EUR million


Positive cash flow decreased net debt in H2 2016

427 333 464 412 541 488 464

1,8

1,2

2.0

1,5

2,1 2,1 2.0

0

1

2

3

0

200

400

600

2014 2015 2016 3/16 6/16 9/16 12/16

Interest-bearing net debt, EUR million

Interest-bearing net debt / comparable EBITDA(rolling 12 months)

Interest-bearing net debt / comparable EBITDA

427 333 464 412 541 488 464

51%

32%

44% 42%

54%49%

44%

0

0,1

0,2

0,3

0,4

0,5

0,6

0

200

400

600

2014 2015 2016 3/16 6/16 9/16 12/16

Interest-bearing net debt, EUR million

Net gearing, %

Net gearing, %


Financial target in net gearing is maximumof 70%

• Metsä Board’s paperboard delivery volumes are expected to increase in Q1

• No planned shutdowns in January–March 2017 • Demand and price development in fresh fibre

paperboards are expected to remain stable • Metsä Board’s comparable operating result in Q1

2017 is expected to improve from Q4 2016

Near-term outlook and guidance


Balance sheet and funding


Strong balance sheet

Equity ratio, %

33%

41% 39%

46% 48%

0%

10%

20%

30%

40%

50%

2012 2013 2014 2015 2016

73% 70%

51%

32%

44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2012 2013 2014 2015 2016

Net gearing, %

625 597 427 333 464

3,4

2,9

1,81,2

2,0

0

1

2

3

4

0

200

400

600

2012 2013 2014 2015 2016

Net debt, EUR million

Net debt/EBITDA (rolling 12 months)

Net debt, EUR million and Net debt / Comparable EBITDA

Debt structure and liquidity31 December 2016

223

199

128

23

115Bonds

Loans fromfinancial institutions

Pension loans

Finance leases andother loans

Other short-termloans

221

100

102Cash and cashequivalentsRevolving creditfacilityUnraised pensionloans

Interest-bearing debt, total EUR 688 million

Available liquidity, total EUR 423 million

Average maturity of long-term loans at 31 December 2016 was 2.2 years. 46 Investor presentation

February 2017


Debt programmes 31 December 2016Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity

EUR 225 million bond Issue 2014 225 225 4.5 2019

Syndicated credit facility 2014 250 150 3.1 2020

EUR 101 million bilateral loans 101 101 1.7 2017–2020

EUR 23 million finance leases 23 23 2.3 2017–2024

EUR 230 million pension loans 230 128 4.5 2017–2020

Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity

Revolving credit facility 2014 100 0 - 2020

Pension loan facilities 230 128 4.5 -

Short-term funding programmes

Metsä Group internal short-term limit 150 0 - 0–12 months

Metsä Group Treasury funding programmes

EUR 150 million domestic CP programme 150 0 - 0–12 months

Metsä Board’s significant debt securities issued and outstanding at 31 December 2016

* The average interest rate take into account outstanding interest rate swaps and amortised arrangement feesThe average interest rate of all Metsä Board interest bearing net liabilities incl. interest rate derivatives per 31 December 2016 is 3.3 %

Metsä Board’s principal long-term liquidity reserves at 31 December 2016


Maturity schedule in long-term IB debt

155

35

257

174

1 2

100 102

0

50

100

150

200

250

300

2017 2018 2019 2020 2021 >2021

Long-term interest-bearing debt (total EUR 469 million) and committed undrawn credit facilities 31 December 2016

Long-term interest bearing liabilities Committed undrawn credit facilities

EUR million


Steadily decreasing net financial costs

47 56 39 32 31

5,2

4,6

4,2

3,8

3,3

3,0

3,5

4,0

4,5

5,0

5,5

0

20

40

60

2012 2013 2014 2015 2016

Net financial costs, EUR million

Average interest rate at the end of period, %

EUR million %

• Net financials in Q4 were EUR -10 million (Q3/16: EUR -7 million)

• Net exchange gains and lossesamounted to EUR -4 million(EUR -1 million)

• Updated normal level in hedging: 100% of balance sheet position + 50% of annual net FX flows are hedged (previously 25%)

FX exposure and sensitivities

58 %34 %

6 %2 %USD

SEK

GBP

Othercurrencies

FX exposure by currency,Annual gross amount EUR 1.2bn FX sensitivities before hedges

10 % strengthening of foreign currency vs. EUR will have an impact on Metsä Board’s operating result of

Currency Next 12 months

USD, $ EUR +70 million

Swedish krona EUR -40 million

GBP, £ EUR +7 million


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

51

Metsä Board 's credit rating

Moody’sStandard & Poor’s

BB+ | Ba1

Stable

Positive

BB | Ba2

BB- | Ba3

B+ | B1

B | B2

B- | B3

CCC+ | Caa1

CCC | Caa2


Investments

• Main growth capex in 2016 included Husum investment programme, extrusion coating line and equity investment in MetsäFibre’s bioproduct mill

• Estimated capex in 2017 is EUR 65–70 million

Capex in 2016 was EUR 162 million

0

30

60

90

120

150

180

2010 2011 2012 2013 2014 2015 2016 2017E

Capex Growth capex Depreciation

€ million



Husum investment programme

Folding boxboard production

• Capacity approximately 400,000 t/a

• Deliveries mainly to Americas and Food service globally

Linerboard production

• Capacity approximately 300,000 t/a

• Deliveries to Europe and Americas

Capacity changes 2014 vs. 2016:

• Paperboard capacity +700,000 tn/a

• Paper capacity -600,000 tn/a

• Launched at the end of 2014• Two paper machines were shut down in 2015 • One paper machine converted to produce linerboard (BM2)• New folding boxboard machine (BM1) started up on February 2016• Enhancements to the pulp mill and the mill site’s own port

• New folding boxboard production line at Husumstarted up in February 2016

• Total delivery volume of Husum’s folding boxboardwas 120,000 tonnes

• Efficiency improvement programme launched in Mayproceeded as planned

• Own extrusion coating line will start up in H1 2017

Husum update


Food service packaging requires barrier features e.g. moisture and fat resistance

• Investment value EUR 38 million• Located at Husum mill• Start-up in H1/2017 with capacity of 100,000 t/a, until then

Metsä Board’s paperboards are coated by external converter

• The company continues to develop other barrier solutions, and closely monitors their commercial feasibility


Metsä Board expands its offering in food and food service paperboards by investing in extrusion coating

• Net capacity increase at the site is approximately 800,000 t/a• Total capacity is 1.3 million t/a

– Investment cost of approximately EUR 1.2 billion– Start up in Q3 2017

• Capital invested by Metsä Board was EUR 24.9 million– Metsä Board has no other financial commitments in the project

• Metsä Board’s holding in Metsä Fibre remains unchanged at 24.9 per cent

• All in all, Metsä Board’s pulp balance is expected to be 500,000–600,000 t/a long from 2018 onwards

– Result contribution is driven by the market price of softwood chemical pulp

– Reserve to grow paperboard business further in the future while maintaining self-sufficiency in pulp


Metsä Board’s associated company Metsä Fibre builds a bioproduct mill

Production, capacities and sourcing

Paperboard mills• Husum (FBB and linerboard)• Kemi (linerboard)• Kyro (FBB)• Tako (FBB)• Simpele (FBB)• Äänekoski (FBB)

Pulp mills• Husum (chemical pulp)• Joutseno (BCTMP)• Kaskinen (BCTMP)


Production locations

Äänekoski

Simpele

Joutseno

Tako

Kyro

KaskinenHusum

Kemi


Paperboard capacity

Town Country Machines Folding boxboard

White freshfibre linerboard Total

Tampere (Tako) Finland 2 210 210

Kyröskoski (Kyro) Finland 1 190 190

Äänekoski Finland 1 240 240

Simpele Finland 1 280 280

Kemi Finland 1 410 410

Husum Sweden 2 400 270 670

Total 9 1,320 680 2,000


Pulp capacityMetsä Board pulp mills Country Chemical pulp BCTMP Total

Husum Sweden 730 730

Joutseno Finland 320 320

Kaskinen Finland 340 340

Total 730 660 1,390

Metsä Fibre pulp mills Country Chemical pulp BCTMP Total

Äänekoski Finland 530 530

Kemi Finland 610 610

Rauma Finland 650 650

Joutseno Finland 690 690

Total 2,480 2,480

Deliveries by region in 2016

Folding boxboard


Fresh fibre linerboard

48%

25%

16%

11%

Western Europe

Eastern Europe

Americas

Asia and Pacific

60%

7%

32%

1%

Own generation

20%

Through PVO shareholding

32%

Purchased energy

45%

Outsourced generation

3%

Wood-based60%

Nuclear power22%

Gas7%

Hydro4%

Coal2%

Peat2% Oil

2%

Sweden 38%

Finland31%

Baltic countries18 %

Russia13%

Sourcing 2016Electricity sourcing

(total 2,438 GWh)


Primary energy used(total 12.0 TWh)

Wood sourcing by country (total 4.6 million cubic metres)


Cost structure in 2016Delivery costs

16%

Wood26%

Chemicals, pigments and fillers

14%

Energy12%

Other variables3%

Personnel 14%

Other fixed15%

Fixed costs

Variablecosts

Sustainability

Transportation package protects the paperboard from being damaged during the delivery chain.

Pure paperboard helps to store the packaged product safely.

The circular economy of a durable and safe package

Durable paperboard protects the packaged product effectively.

Our paperboards are recyclable and biodegradable, or they can be used for energy production.

We follow goodmanufacturing principles(GMP).

All of our products meet the requirements of relevant international legislation.

Fresh fibre is a pure and safe, renewable raw material.

We only use carefully selected and safe raw materials in our products.


LOGISTICSENSURE THE SUSTAINAINABILITY OF MAIN LOGISTIC FLOWS

PERFORMANCE 2016−2017 100%

SAFETYLOST-TIME ACCIDENTS

PERFORMANCE 2016 -18.9

-10%ENERGYENERGY EFFICIENCY IMPROVEMENT2009−2020

PERFORMANCE 2016 7.8%

12% -17%RESOURCE EFFICIENCYPROCESS WATER USE PERPRODUCT TONNE 2010−2020

PERFORMANCE 2016 -14%

Metsä Board’s sustainability targets

Min 80%

WOODTHE AMOUNT OFCERTIFIED WOOD

PERFORMANCE 2016 81%

-30%

CLIMATEFOSSIL CO2 EMISSIONS PER PRODUCT TONNE 2009−2020

PERFORMANCE 2016 -45%

<3%WELL-BEINGSICKNESS ABSENTEEISM

PERFORMANCE 2016 4.1%

BIOENERGY SHARE OF TOTAL PURCHASED ENERGY 51%


• CDP Water A list– Metsä Board was the only forest industry company in

the world included on the list

• CDP Climate A list– Only 9% of the reporting companies were included on

the A list

• Leadership status in CDP’s 2016 Forest programme

• According to L’Oréal Metsä Board was the best packaging material supplier in CDP’s 2015 CDP Supply chain programme.

68

Metsä Board received againrecognition from CDP in 2016


Owners

Market cap and foreign owners31 December 2016

Ownership distribution31 December 2016

Market cap and ownership distribution

0

4

8

12

16

20

24

0

500

1 000

1 500

2 000

2 500

2012 2013 2014 2015 2016

Market cap, EUR million

Share of foreign owners, %

42 %

25 %

18 %

15 % MetsäliittoCooperative

Domestic institutionalinvestors

Domestic privateinvestors

Foreign owners

EUR million

*) Metsäliitto Cooperative has 61% of voting rights

*)

70

%



Ownership structure on 31 December 2016

42 %

15 %

18 %

13 %

7 %

2 % 3 %MetsäliittoCooperative

Foreign owners*

Households

Public sectororganisations

Finance andinsurancecompaniesNon-profitorganisations

Other companies

61 %15 %

10 %

5 %

4 % 3 %1 % Metsäliitto

Cooperative

Public sectororganisations

Households

Foreign owners*

Non-profitorganisations

Finance andinsurance companies

Other companies

Shares, % (total no. of shares 355,512,746)

Votes, % (total no. of votes 1,037,530,115)

* incl. nominee registeredSource: Euroland

Appendix

METSÄ TISSUE

Tissue and cookingpapers

Sales:

EUR 1.0 billionPersonnel:

2,700Metsäliitto Cooperativeholding 100%

METSÄ WOOD

Wood Products

Sales:


1,520Metsäliitto Cooperativeholding 100%

METSÄ FOREST

Wood Supply and ForestServices

Sales:


860Metsäliitto Cooperativeholding 100%


METSÄ BOARD

Paperboard

Sales:


2,500Metsäliitto Cooperativeholding 42%, 61% of votes

METSÄ FIBRE

Pulp and SawnTimber

Sales:


1,230Metsäliitto Cooperativeholding 50.2%, Metsä Board 24.9%,Itochu Corporation 24.9%

METSÄ GROUP | Sales EUR 4.7 billion | Personnel 9,300

METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 104,000 Finnish forest owners

2005 Structural change starts Paper production over 80% of sales -> Decision to exit paper business

2006 Strategic review launchedRestructuring and focused investment programme initiated, focus on paperboard

2007–2013 Streamlining and focused investmentsPaper capacity reduction from about 5 million to 0.8 million annual tonnesMajor divestments incl. Graphic Papers and Map MerchantsPaperboard capacity increases

2013 Strategic review completed Clear focus on paperboard Paper production 25% of sales

2015 Strong market position in main productsEurope’s leading producer of folding boxboardThe world’s leading manufacturer of coated white fresh fibre linerboards

2016 Final exits from non-core businessesFine paper production at Husum mill and wallpaper base production at Kyro mill endedPaperboard capacity 2 million t/a


True success story


M&A activity 1997-2015

100 000 B2 shares in

PVO

Acquisitions

Divestments

Biberist Paper Mill

UK Paper

Modo Paper

Zanders

ChemicalsBusiness

BotniaWood

CorrugatedPackaging

MD Papier Metsä Tissue

Albbruck SavonSellu

Forestia

KemiartLiners (53 %)

8% in Botnia

PSM

9% in Botnia

Cartonplants

Map

New Thames

MB Uruguay

Graphic Papers

Part of Reflex

Halleinmill

1997 20001998 1999 2001 2002 2003 2004 2005 2006 2007 20092008 2010 2011

Rest of Reflex

0.5% in PVO

2012

7.3 % in Metsä Fibre

2013 2014

Alizay mill Lielahti

real estate

2015

Gohrsmühle mill

Simpele Mill

Year Divestiture Enterprise Value, EUR million

2015 Gohrsmühle mill in Germany neg.

2014 Lielahti real-estate 32

2013 Alizay property and other estates 22

2012 7.3% stake in Metsä Fibre 138

2012 0.5% stake in PVO 64

2011 Hallein 34

2009 Metsä-Botnia’s Uruguayan operations 300*

2008 Graphic Papers 750

2008 100,000 shares in PVO 80

2008 New Thames mill 82**

2007 Map Merchant Group 382

2007 Folding carton plants 60

2007 Botnia (9%) 240

2005 Botnia (8%) 164

2005 Savon Sellu 20

2005 Forestia (95%) 163

2004 Metsä Tissue 570

2002 Papierfabrik Albbruck 235

2001 MD Papier 300

2001 Noviant (19%) 41

3,679


Significant Divestments EUR 3.7 billion in assets divested since 2001

* Cash portion**Incl. pension liabilities


5624 4440 3236 2432 2605 2485 2108 2019 2008 2008 1720

0,8 1,1

‐1,1‐6,2

6,6

2,43,6

5,2

6,8

9,0

8,0

‐7,0

‐5,0

‐3,0

‐1,0

1,0

3,0

5,0

7,0

9,0

0

1000

2000

3000

4000

5000

6000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sales, EUR million EBIT‐%

%

Sales and EBIT-% development

Katri SundströmVice President, Investor relations

Tel +358 400 976 [email protected]

78

Contact information


Metsä Board Investor presentation 2 February 2017

Documents

Transcript of Metsä Board Investor presentation 2 February 2017