Metsa Board Oyj Class A · OMXHEX:METSA
Metsa Board Oyj Class A — Q3 2022 Earnings Presentation
34 slides from Metsa Board Oyj Class A's earnings presentation, November 2022
Slide 1: Metsä Board Results for January–September 2022
Metsä Board Results for January–September 2022 Presentation material
Slide 2: Disclaimer
Disclaimer 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-lookin
Slide 3: Q3 2022 in brief
Comparable Q3 2022 in brief Sales operating result • 2,084 Strong performance continued 647 153 • Increased average sales prices, supported by strong US dollar EUR million EUR million • Good production volumes despite the (Q3 2021: EUR 516m) (Q3 2021: EUR 104m) maintenance shutdowns in Finnish mills
Slide 4: Q3 delivery volumes fell slightly, mainly in white kraftliners
Q3 delivery volumes fell slightly, mainly in white kraftliners TOTAL TOTAL Q1–Q3 2021: -6% Q1–Q3 2022: 1,480,000 tonnes 1,398,000 tonnes White kraftliners Folding boxboard Q3 2021: -5% Q3 2022: 475,000 tonnes 454,000 tonnes 500 166 400 162 156 148 143 165 146 1,000 tonnes 152 144 143 164 1,000 tonne
Slide 5: Paperboard deliveries by region
Paperboard deliveries by region FBB deliveries in 1–9 2022 (1–9 2021) WKL deliveries in 1–9 2022 (1–9 2021) total 923,000 tonnes (996,000) 476,000 tonnes (484,000) APAC APAC 58,000 2,000 (88,000) (8,000) Americas 6% 213,000 EMEA (224,000) Americas EMEA 651,000 23% 71% (684,000) 183,000 39% 290,000 (
Slide 6: Market pulp
Market pulp Long-fibre pulp price (PIX) development in Europe and China • Demand in softwood market pulp USD/tonne – In Europe, stable demand 1 600 – In China, stable demand in relation to supply 1 400 • Market pulp deliveries (1–9 2022 vs 1–9 2021) 1 200 • Metsä Board +6%: (399,000 vs 376,000 tonne
Slide 7: Record high sales and profitability
Record high sales and profitability YTD 2022 vs YTD 2021: Sales +20%, comparable operating result +42% Sales, quarterly Comparable operating result, quarterly EUR million EUR million and % of sales 1–9 2022: EUR 420 million 1–9 2022: margin 22.3% FY 2021: EUR 1,880 million FY 2020: EUR 2,084 million
Slide 8: Main items affecting comparable operating result
Main items affecting comparable operating result Q3 2022 vs Q3 2021: +47% Q1–Q3 2022 vs Q1–Q3 2021: +42% EUR 153 million vs 104 EUR million EUR 420 million vs EUR 295 million Positives: Positives: • Higher sales prices in paperboards and market pulp • Higher sales prices in paperboards and market pu
Slide 9: Q3 2022 comparable ROCE at 24.7%
Q3 2022 comparable ROCE at 24.7% Comparable return on capital employed, % Quarterly and rolling 12 months 26% 26% 24% 24% 22% 22% 20% 20% 18% 18% 16% 16% 14% 14% Target > 12% 12% 12% 10% 10% 8% 8% 6% 6% Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q
Slide 10: High working capital impacting cash flow
High working capital impacting cash flow 400 400 300 300 EUR million EUR million 200 200 134 120 90 93 100 80 72 74 81 72 100 59 66 44 49 33 31 27 37 30 38 37 17 24 23 19 14 3 0 0 -17 -100 -73 -100 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Free cash flow = c
Slide 11: Balance sheet remaining strong
Balance sheet remaining strong Net debt, EUR million Net debt to comparable EBITDA (last 12 months) 600 1,5 500 1,3 Financial target: 1.2 400 1.1 1.1 Net debt to 1,0 1.0 1.0 comparable EBITDA 300 <2.5 0,8 0.7 200 0,5 0.2 0.2 100 0,3 352 308 260 306 277 236 0.0 4 109 91 -25 0 0,0 -7 0.0 -78 -100 -0.1
Slide 12: Update on ongoing investments
Update on ongoing investments • Husum pulp mill renewal, first phase • Start-up in November 2022, investment value EUR 380 million • Increased production of bioenergy, higher energy self-sufficiency • Second phase will follow during 2020s • Folding boxboard capacity expansion in Husum • +200,000 t/a
Slide 13: Planning a new folding boxboard mill in Kaskinen, Finland
We are planning to invest in a new folding boxboard mill in Kaskinen, Finland • Pre-engineering has started, based on • Annual capacity of 800,000 tonnes • 100% fossil-free mill • World-class resource and operational efficiency • Possible investment decision could be made in 2024 at the earliest
Slide 14: Near-term outlook
Near-term outlook October–December 2022 • Paperboard delivery volumes are expected to remain stable or slightly decrease due to seasonal slowdown • Average sales prices of paperboards are expected to increase slightly • Strengthening US dollar improves profitability • Demand for softwood market pulp
Slide 15: Result guidance
Result guidance Metsä Board’s comparable operating result in October–December 2022 is expected to be weaker than in July–September 2022 (EUR 153 million)
Slide 16: Summary
Summary • Yet another strong quarter • Successful price increases in paperboards more than offset rapidly rising costs • Stable demand for paperboards is expected to continue… • … with increased uncertainty in the operating environment • According to the strategy, Metsä Board aims to grow sustainabl
Slide 17: Capital Markets Day 10 November 2022
Metsä Board Capital Markets Day Virtual / on-site in Helsinki 10 November 2022
Slide 18: uy! Metsa
uy! Metsa
Slide 19: Appendix
Appendix My! Metsa
Slide 20: Key financials
Key financials Change Change FY 2021 Q3/22 Q3/21 Q3/22 1–9/22 1–9/21 1–9/22 vs Q3/21 vs 1–9/21 Sales EUR, m 647 516 +25% 1,880 1,566 +20% 2,084 EBITDA* EUR, m 176 125 +40% 486 363 +34% 472 Operating result* EUR, m 152 104 +47% 420 295 +42% 387 % of sales* % 23.6 20.1 22.3 18.9 18.6 Metsä Fibre’s sha
Slide 21: Long-term financial targets
Long-term financial targets Comparable ROCE: Net debt/comparable Dividend policy: Target at least 12% EBITDA: Payout ratio at least 50% Maximum level 2.5x of net result 23.0 59 18.7 Target 12.2 Target <2.5x 54 10.4 >12% 51 50 1.1 0.7 0.2 -0.2 2019 2020 2021 1–9/2022 2019 2020 2021 1–9/2022 2018 2019
Slide 22: Rapid cost inflation has continued throughout 2022
Rapid cost inflation has Metsä Board’s cost structure in 2021 continued throughout 2022 Total costs EUR 1,747 million (1,532) Other fixed Wood 9% (13) • Main increases in chemicals and energy 15% (17) Personnel • Logistics costs have increased due to the limited 12% (13) availability of transport eq
Slide 23: Impacts of FX changes
Impacts of FX changes Annual transaction exposure total EUR 2 billion Other currencies GBP 2% 5% • Impact including hedges, actual – Q3 2022 vs Q3 2021: EUR +24 million SEK USD – 1–9/2022 vs 1–9/2021: EUR +33 million 35% 58% • Estimated impacts including hedges – Q4 2022 vs Q3 2022: positive FX sens
Slide 24: Debt structure and liquidity on 30 September 2022
Debt structure and liquidity on 30 September 2022 Interest-bearing debt Liquidity EUR 464 million EUR 571 million Financial leases and other loans 23 Syndicated credit facility (RCF) 125 200 Loans from 193 financial 249 institutions Bonds 371 Liquid assets and investments Liquidity is complemented b
Slide 25: Debt maturity and credit ratings
Debt maturity and credit ratings Maturity of interest-bearing debt Total EUR 464 million EUR million 30 September 2022 300 250 • Total interest-bearing debt was EUR 464 200 million, and net debt was EUR 91 million 150 100 • The average interest rate on loans at the end 50 of the review period was 2.
Slide 26: Update on Russia's attack on Ukraine
Update on Russia’s attack on Ukraine Impacts and measures taken • Metsä Board’s paperboard sales to Russia have been discontinued Volumes released from Russia have been sold to other markets In 2021, Russia’s share of sales was 5.6% (130,000 tonnes of folding boxboard) • Metsä Group has discontinu
Slide 27: Market cap and ownership distribution
Market cap and ownership distribution Metsä Board has two share series, A and B shares Market cap and foreign owners Ownership distribution 30 September 2022 EUR million % 3 500 25 Foreign owners 15% 3 000 20 2 500 15 2 000 Metsäliitto Domestic private owners Cooperative 1 500 18% 48% 10 1 000 5 500
Slide 28: Roadmap to fossil free mills
Roadmap to fossil free mills 100% TAKO In steam production, Target: natural gas is JOUTSENO replaced by e.g. 100% electricity Natural gas is replaced by biogas or Share of fossil free energy (of total energy) electricity SIMPELE HUSUM, KASKINEN, KYRO and SIMPELE Peat is replaced by The power plants’
Slide 29: Strong evidence of sustainability leadership
Strong evidence of sustainability leadership Metsä Board again scored ‘Platinum’ in Metsä Board’s GHG emission Metsä Board, as part of Metsä Group, is committed Metsä Board is among the top the EcoVadis sustainability rating in reduction targets are approved by the to the UN Global Compact corporate
Slide 30: Price development of folding boxboard and white kraftliners in Europe
Price development of folding boxboard and white kraftliners in Europe EUR/ tonne EUR/ tonne 1 600 1 600 1 500 Folding boxboard 1 500 1 400 1 400 1 300 1 300 1 200 1 200 1 100 1 100 1 000 1 000 900 900 800 800 700 700 White top kraftliners 600 600 500 500 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 31: Price development of pulp (PIX)
Price development of pulp (PIX) Long-fibre (SW) and short-fibre (HW) pulp 1 600 1 600 1 500 Long-fibre Europe, USD 1 500 1 400 1 400 1 300 1 300 1 200 Short-fibre Europe, USD 1 200 USD or EUR USD or EUR 1 100 1 100 1 000 1 000 900 900 800 800 700 700 600 600 500 500 400 400 Short-fibre Europe, EUR L
Slide 32: Price development of pulpwood in Finland and Sweden
Price development of pulpwood in Finland and Sweden Delivery at roadside Finland Sweden EUR/m3 SEK/m3 40 400 35 350 30 300 25 250 20 200 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Pine Spruce Birch Conifers Spruce Birc
Slide 33: FX rates development: EUR/USD and EUR/SEK
FX rates development: EUR/USD and EUR/SEK EUR/USD EUR/SEK 1,25 11,2 11 1,2 10,8 1,15 10,6 1,1 10,4 1,05 10,2 1 10 0,95 9,8 33
Slide 34: Together we make the perfect package
Together we make the perfect package Katri Sundström Vice President, Investor relations +358 10 462 0101 [email protected]