Metsa Board Oyj Class A · OMXHEX:METSA
Metsa Board Oyj Class A — Q1 2023 Earnings Presentation
33 slides from Metsa Board Oyj Class A's earnings presentation, Apr 27, 2023
Slide 1: Metsä Board Results for January–March 2023
Metsä Board Results for January–March 2023 Presentation material 27 April 2023
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: Q1 2023 in brief
Comparable Sales operating result Q1 2023 in brief 2,084 542 89 • Improved average sales price of EUR million EUR million paperboards (Q1 2022: EUR 582m) (Q1 2022: EUR 121m) • Total delivery volumes of paperboards decreased • Weakened market pulp demand • Production was adjusted to meet the lower de
Slide 4: Weakened demand in consumer products reduced volumes
Weakened demand in consumer products reduced volumes Q1 2022: Q1 2023: 473,000 tonnes -19% 380,000 tonnes White kraftliners Folding boxboard Q4 2022: Q1 2023: 418,000 tonnes -9% 380,000 tonnes 500 166 400 162 156 166 164 146 143 1,000 tonnes 133 1,000 tonnes 126 300 200 329 348 319 300 307 308 308 2
Slide 5: Paperboard deliveries by region
Paperboard deliveries by region FBB deliveries Q1 2023 (Q1 2022) WKL deliveries Q1 2023 (Q1 2022) total 255,000 tonnes (307,000) 126,000 tonnes (166,000) APAC APAC 11,000 1,000 (19,000) (1,000) Americas 59,000 1% (66,000) 4% EMEA EMEA Americas 73,000 185,000 52,000 41% (100,000) 23% 72% (221,000) (6
Slide 6: Market pulp
Market pulp Softwood pulp price (PIX) development in Europe and China • Market pulp deliveries (Q1 2023 vs Q1 2022) 1 600 1 400 – Metsä Board -32%: (83,000 vs 122,000 tonnes) – Metsä Fibre*) -14%: (647,000 vs 751,000 tonnes) 1 200 • Weakened demand in softwood market pulp 1 000 USD/tonnes – In Europ
Slide 7: Production adjustment measures reflected in energy efficiency and water use
Production adjustment measures reflected in energy efficiency and water use TARGET 0 +10% -35% >90% set for 2030 Accidents at Energy Process water Certified wood work, TRIF efficiency used fibre COMPARED TO 2018 COMPARED TO 2018 ACTUAL in Q1 2023 5.3 Q1 2022: 7.1 +0.1% -9.1% 90% Q1 2022: +4.8% Q1 20
Slide 8: Reduced volumes reflected in sales; improved prices offset negative result impact
Reduced volumes reflected in sales; improved prices offset negative result impact Sales, quarterly Comparable operating result, quarterly EUR million EUR million and % of sales FY 2022: EUR 2,480 million FY 2022: 2 500 FY 2021: 600 EUR 521 million EUR 2,084 million margin 21% 600 FY 2021: 2 000 500
Slide 9: Main items affecting comparable operating result
Main items affecting comparable operating result Q1 2023 vs Q1 2022: -27% Q1 2023 vs Q4 2022: -12% EUR 89 million vs 121 EUR million EUR 89 million vs 101 EUR million Positives: Positives: • Higher sales prices for paperboards and market pulp • Higher sales prices for folding boxboards • FX after he
Slide 10: Q1 2023 comparable ROCE at 13.9%
Q1 2023 comparable ROCE at 13.9% 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% 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 Q1/22 Q
Slide 11: Strong cash flow in Q1 2023, supported by dividend from Metsä Fibre
Strong cash flow in Q1 2023, supported by dividend from Metsä Fibre 400 400 300 300 EUR million EUR million 200 200 134 126 120 93 100 72 70 69 100 59 66 37 23 17 24 19 3 0 0 -17 -10 -100 -73 -100 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Free cash flow = cash flow from operations – inve
Slide 12: Balance sheet remained strong
Balance sheet remained strong Net debt, EUR million Net debt to comparable EBITDA (last 12 months) 400 1 Financial target: 300 Net debt to comparable 0,75 0.7 EBITDA <2.5 236 200 0,5 EUR million 109 94 0.2 91 0.2 0.2 100 0,25 9 0 4 0 0 0 0 -7 -0.1 -25 -0.2 -0.2 -100 -78 -0,25 -100 -200 -0,5 12/2020
Slide 13: Ongoing and planned investments support our growth in fibre-based packaging materials
Ongoing and planned investments support our growth in fibre-based packaging materials Husum folding boxboard capacity Kemi white kraftliner development Pre-engineering for new folding expansion programme boxboard mill in Kaskinen • Start up in H2/2023 • Start up in H2/2023 • Pre-engineering based on
Slide 14: Strong financial situation creates solid platform for planned growth
Strong financial situation creates solid platform for planned growth Actual capital expenditure and depreciation Indicative timetable for ongoing and planned investments 300 EUR MILLION 200 100 0 2019 2020 2021 2022 Capex in growth and development Maintenance capex Depreciation 1) In addition, an in
Slide 15: Near-term outlook
Near-term outlook April–June 2023 • Outlook for sales development remains weak • Paperboard delivery volumes and average sales prices expected to remain stable compared to Q1 • Muted demand with weakening prices for market pulp • Total costs expected to remain stable • Several annual maintenance shu
Slide 16: Result guidance
Result guidance Metsä Board’s comparable operating result in April–June 2023 is expected to be weaker than in January–March 2023 (EUR 89 million)
Slide 17: Summary
Summary • Improved paperboard prices have offset negative impacts from lower volumes • Short-term uncertainty continues • Production has been and will be adjusted to meet the demand • Major ongoing investments will be completed in H2
Slide 18: a Metsa
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Slide 19: Appendix
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Slide 20: Key financials
Key financials Change Q1/23 Q1/22 Q1/23 Q4/22 FY/22 vs Q1/22 Sales EUR, m 542 582 -7% 600 2,480 EBITDA* EUR, m 114 143 -20% 117 603 Operating result* EUR, m 89 121 -27% 101 521 % of sales* % 16.4 20.9 16.8 21.0 Metsä Fibre’s share of operating EUR, m 29 31 123 175 result* Earnings per share EUR 0.19
Slide 21: Long-term financial targets and dividend payout
Long-term financial targets and dividend payout Comparable ROCE: Net debt/comparable Dividend policy: Target at least 12% EBITDA: Payout ratio at least 50% Maximum level 2.5x of net result 20.9 18.7 Target 59 max 2.5x 13.9 54 12.2 Target min 12% 0.7 50 50 Target 0.2 min 50% 0.0 -0.2 2020 2021 2022 3
Slide 22: Cost inflation +15%
Cost inflation +15% Metsä Board’s cost structure in 2022 Total costs EUR 2,122 million (1,747) • In Q1 2023, total costs, excluding pulp, were Other fixed Wood roughly 15% higher compared to Q1 2022 8% 14% Personnel • In chemicals, prices increased especially in 10% caustic soda, peroxides, starch a
Slide 23: Impacts of FX changes
Annual FX transaction exposure Impacts of FX changes total EUR 1.5 billion Other GBP currencies 7% 2% • Impact including hedges, actual SEK 34% USD 57% – Q1 2023 vs Q4 2022: EUR 7 million – Q1 2023 vs Q1 2022: EUR 24 million The foreign currency transaction exposure consists of foreign currency deno
Slide 24: Debt structure and liquidity
Debt structure and liquidity 31 March 2023 Interest-bearing debt Liquidity EUR 451 million EUR 640 million Financial leases and other loans 14 Syndicated credit facility (RCF) Loans from 200 financial 188 249 institutions 440 Bonds Liquid assets and investments Liquidity is complemented by • Metsä G
Slide 25: Debt maturity and credit ratings
Debt maturity and credit ratings Maturity of interest-bearing debt Total EUR 451 million EUR million 31 March 2023 300 250 • Total interest-bearing debt was EUR 451 200 million, and net debt was EUR 9 million 150 100 • The average interest rate on loans at the end 50 of the review period was 2.5%, a
Slide 26: 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 31 March 2023 EUR million % 3 500 25 Foreign owners 11% 3 000 20 2 500 15 Domestic 2 000 Metsäliitto private owners Cooperative 20% 1 500 50% 10 1 000 5 500 Dom
Slide 27: Transition plan towards fossil free production
Transition plan towards fossil free production 100% TAKO Target: In steam production, natural gas is replaced 100% JOUTSENO by, e.g. electricity Natural gas is replaced by biogas or electricity SIMPELE HUSUM, KASKINEN, KYRO, SIMPELE Peat is replaced by The power plant’s backup fuels will be replaced
Slide 28: Strong evidence of sustainability leadership
Strong evidence of sustainability leadership Metsä Board is among the top Metsä Board again scored ‘Platinum’ Metsä Board’s GHG emission Metsä Board, as part of Metsä Group, is committed companies to have received an ‘A’ in the EcoVadis sustainability rating reduction targets are approved by the to
Slide 29: 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 30: 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 31: Price development of pulpwood in Finland and Sweden
Price development of pulpwood in Finland and Sweden Delivery at roadside Price (on bark) of pulpwood in Finland Price (under bark) of pulpwood in Sweden EUR/m3 SEK/m3 50 500 45 450 40 400 35 350 30 300 25 250 20 200 2012 2015 2018 2021 2010 2011 2013 2014 2016 2017 2019 2020 2022 2023 2010 2011 2012
Slide 32: FX rates development: EUR/USD and EUR/SEK
FX rates development: EUR/USD and EUR/SEK EUR/USD EUR/SEK 1,25 11,4 1,2 11,2 11 1,15 10,8 1,1 10,6 10,4 1,05 10,2 1 10 0,95 9,8 32
Slide 33: Together we make the perfect package
Together we make the perfect package Katri Sundström Vice President, Investor relations +358 10 462 0101 [email protected]