2011-05-04 11:03:13 CEST
2011-05-04 11:04:14 CEST
REGULATED INFORMATION
Metsäliitto Osuuskunta - Interim report (Q1 and Q3)
Metsäliitto Group Interim Report January-March 2011
Metsäliitto Group Interim Report 1-3/2011, Stock Exhange Release 4 May 2011 at
noon
Metsäliitto Group's operating result excluding non-recurring items EUR 130
million
Result for the first quarter of 2011
-- Sales were EUR 1,403 million (1-3/2010: EUR 1,224 million).
-- Operating result excluding non-recurring items totalled EUR 130 million
(96). Operating result including non-recurring items totalled EUR 133
million (105).
-- Result before taxes and excluding non-recurring items was EUR 86 million
(55). Result before taxes including non-recurring items was EUR 89 million
(64).
Events in the first quarter
-- In February, Metsä-Botnia decided to build a bark gasification plant at the
Joutseno pulp mill. Once the plant is completed, the mill will not use
fossil fuel at all during normal operation. The total value of the
investment is approximately EUR 20 million.
-- In February, M-real announced plans to invest approximately EUR 30 million
in expanding the folding boxboard capacity at the Äänekoski and Kyröskoski
mills by a total of approximately 70,000 tonnes.
-- Metsäliitto decided to participate in a 46 per cent ownership share in a
project in which Lohjan Biolämpö Oy, a company to be established, will
build a bioenergy heating plant at the Metsäliitto Wood Product Industry's
Lohja mill. The total cost of the project is approximately EUR 17 million.
-- In March, a decision was made to build a biopower plant at the M-real mill
area at Hämeenkyrö. The plant is to generate electricity and process heat
for the paper and board mills as well as electricity and municipal heat for
Leppäkosken Sähkö. The project will be implemented by Hämeenkyrön Voima Oy
and its estimated investment cost is approximately EUR 50 million.
-- In January, M-real announced it will launch a new profit improvement
programme which focuses on improving profitability of the paper business
operations as well as on decreasing variable costs. It is estimated that
the measures will improve M-real's annual operating result by EUR 70
million.
“Our result continued to be strong in the first quarter of 2011. Our plans to
generate profitable growth in boards and wood products and our investments in
the production of renewable energy progressed as planned. Now we focus
especially on minimising the negative impacts of cost development.”
Kari Jordan, President & CEO, Metsäliitto Group
Metsäliitto Group
Income statement 2011 2010 2010
(Continuing operations) 1-3 1-3 1-12
----------------------------------------------------------
Sales 1 403 1 224 5 377
----------------------------------------------------------
Other operating income 29 31 142
----------------------------------------------------------
Operating expenses -1 228 -1 073 -4 686
----------------------------------------------------------
Depreciation and impairment losses -71 -78 -336
----------------------------------------------------------
Operating result 133 105 497
----------------------------------------------------------
Share of results in associates 0 -6 -15
----------------------------------------------------------
Exchange gains and losses -1 -2 -7
----------------------------------------------------------
Other net financial items -44 -34 -129
----------------------------------------------------------
Result before income tax 89 64 345
----------------------------------------------------------
Income taxes -26 -24 -131
----------------------------------------------------------
Result from continuing operations 63 40 214
----------------------------------------------------------
Metsäliitto Group
Profitability 2011 2010 2010
(Continuing operations) 1-3 1-3 1-12
----------------------------------------------------------------
Operating result, EUR mill. 133 105 497
----------------------------------------------------------------
- “ -, excluding non-recurring items 130 96 547
----------------------------------------------------------------
- “ - % of sales 9.3 7.9 10.2
----------------------------------------------------------------
Return on capital employed, % 13.2 10.0 11.8
----------------------------------------------------------------
- ” -, excluding non-recurring items 12.8 9.1 13.4
----------------------------------------------------------------
Return on equity, % 14.7 11.0 13.9
----------------------------------------------------------------
- ” -, excluding non-recurring items 13.9 8.6 18.2
----------------------------------------------------------------
Financial position 2011 2010 2010
31.3 31.3 31.12
----------------------------------------------------------------
Equity ratio, % 30.4 27.1 29.7
----------------------------------------------------------------
Net gearing ratio, % 112 151 116
----------------------------------------------------------------
Interest-bearing net liabilities, EUR mill. 1 933 2 241 1 939
----------------------------------------------------------------
Business segments
Sales and Operating result Wood Wood Pulp Board Tissue and
January - March 2011 Supply Product Industr and Cooking
(EUR mill.) s y Paper Papers
Industr Industry
y
--------------------------------------------------------------------------------
Sales 376 238 340 685 241
--------------------------------------------------------------------------------
Other operating income 2 2 5 22 3
--------------------------------------------------------------------------------
Operating expenses -370 -226 -232 -630 -228
--------------------------------------------------------------------------------
Depreciation & impairment -1 -8 -17 -31 -10
losses
--------------------------------------------------------------------------------
Operating result 8 5 96 46 7
--------------------------------------------------------------------------------
Non-recurring items - - - -3 -
--------------------------------------------------------------------------------
Operating result, excl. 8 5 96 43 7
non-rec. items
--------------------------------------------------------------------------------
- % of sales 2.0 2.2 28.1 6.3 2.7
--------------------------------------------------------------------------------
The figures are unaudited
METSÄLIITTO GROUP
INTERIM REPORT 1 JANUARY - 31 MARCH 2011
Sales and result
Metsäliitto Group's sales for the first quarter were EUR 1,403 million
(1-3/2010: EUR 1,224 million) and operating result was EUR 133 million (105).
Operating result excluding non-recurring items totalled EUR 130 million (96).
The only non-recurring item, approximately EUR 3 million, was connected to the
sale of a land area in Jyväskylä. The non-recurring items of the comparison
period were approximately EUR 9 million, of which EUR 10 million related to the
dissolution of an IT cost provision, EUR 1 million to the divestment of the
blockboard mill in Romania, and EUR -2 million to the closure of the Kyröskoski
sawmill.
Financial income amounted to EUR 2 million (2), income from associates was EUR
0 million (-6) and financial expenses totalled EUR 45 million (36). Financial
expenses include, among other expenses, approximately EUR 9 million of
dividends paid on Metsä-Botnia's shares under a redemption obligation. Net
exchange gains recognised in financial items were EUR -1 million (-2).
The result for the period before taxes was EUR 89 million (64), while taxes,
including changes in deferred tax liabilities, totalled EUR 26 million (24).
The net result for the report period was EUR 63 million (40).
The Group's return on capital employed for continuing operations was 13.2 per
cent (10.0), and the return on equity was 14.7 per cent (11.0). Excluding
non-recurring items, the return on capital employed was 12.8 per cent (9.1) and
return on equity was 13.9 per cent (8.6).
Balance sheet and financing
Metsäliitto Group's total liquidity was EUR 961 million at the end of March (31
December 2010: 1,054). Of this, EUR 447 billion (440) was in liquid assets and
investments, and EUR 514 billion (614) was in off-balance-sheet binding credit
facilities. In addition, the Group can satisfy short-term financial needs with
non-binding commercial paper schemes in Finland and abroad, as well as with
credit limits amounting to approximately EUR 0.5 billion.
The Group's equity ratio at the end of March was 30.4 per cent and net gearing
was 112 per cent (31 December 2010: 29.7% and 116%, respectively).
Interest-bearing net liabilities were EUR 1,933 million (31 December 2010:
1,939).
M-real's Annual General Meeting decided to reduce the share premium account in
operating capital, as stated on the parent company's balance sheet on 31
December 2010, by transferring all funds in the account, or approximately EUR
664 million, to the company's non-restricted equity reserve. The reduction of
the share premium account will take place without consideration and it will not
impact the company's number of shares, the rights conferred by the shares, or
the proportionate ownership of the shareholders. The reduction will become
effective after the completion of the creditor protection procedure referred to
in the Limited Liability Companies Act. With the reduction, the prerequisites
for future distribution of profits will be improved.
Standard & Poors raised the outlook of M-real's credit rating B from stable to
positive.
The equity ratio of the parent company Metsäliitto Cooperative was 61.5 per
cent at the end of March and net gearing ratio was 38 per cent (31 December
2010: 58.6% and 45%, respectively).
During January-March, Metsäliitto's members' capital increased by a total of
EUR 9.6 million. The actual members' capital grew by EUR 0.3 million, the
additional members' capital A by EUR 5.0 million and the additional members'
capital B by EUR 4.3 million.
In March, Metsäliitto Cooperative took out an investment loan totalling EUR 100
million from Finnish insurance companies. The loans were used to finance the
EUR 100 million syndicated loan that matured in March.
Personnel
The Group employed an average of 13,087 people (12,978) during the firstquarter. At the end of March, the number of personnel in the Group was 13,058
(31 December 2010: 12,820). The parent company Metsäliitto Cooperative employed
2,786 people at the end of March (31 December 2010: 2,495).
In March, Metsäliitto Cooperative had 125,780 members (31 December 2010:
126,382).
Investments
Metsäliitto Group's capital expenditure totalled EUR 35 million (15).
In February, Metsä-Botnia decided to improve energy production at the Joutseno
pulp mill by building a bark gasification plant. The total value of the
investment is approximately EUR 20 million. The plant will replace the use of
natural gas as fuel at the mill, making the mill carbon dioxide neutral in
normal operation.
In February, M-real announced plans to invest approximately EUR 30 million in
expanding the folding boxboard capacity at the Äänekoski and Kyröskoski mills
by a total of approximately 70,000 tonnes. After the planned investments, the
annual production capacity would increase to 190,000 tonnes at Kyröskoski and
to 240,000 tonnes at Äänekoski. The Kyröskoski investment would be carried out
at the end of 2011, and the Äänekoski investment in the spring of 2012.
Metsäliitto decided to participate in a 46 per cent ownership share in a
project in which Lohjan Biolämpö Oy, a company to be established, will build a
bioenergy heating plant in Lohja. The other shareholders of the company are
Lohjan Energiahuolto Oy Loher (49%) and Ääneseudun Energia (5%). The plant will
use primarily by-products of the Kerto mill and supplementing forest chips and
other wood-derived fuels. The total cost of the investment is approximately EUR
17 million, and the construction is planned to start in the summer of 2011. The
new plant will be commissioned at the end of 2012.
Hämeenkyrön Voima Oy, a subsidiary of Pohjolan Voima Oy, decided to build a
biopower plant to M-real's mill site. The plant is to produce electricity and
process heat to M-real's Kyro mill as well as electricity and municipal heating
for Leppäkosken Sähkö Oy. The expected investment cost is in total EUR 50
million. Investment by M-real is about EUR 11 million. The permissions needed
to build the plant were received in February 2011 and the project is expected
to be finalized during autumn 2012.
Business areas
Wood Supply
Wood Supply's sales totalled EUR 376 million (333) in January-March, and the
operating result amounted to EUR 8 million (7). The operating result does not
include non-recurring items. Wood Supply Finland accounted for EUR 263 million
(237) of the sales and EUR 5 million (4) of the operating result.
Wood sales started slowly at the beginning of the year. The forest industry
purchased a total of three million cubic metres of wood from private forests.
General supply was at a low level, and the offering mainly consisted of wood
from winter thinning. Purchases by Metsäliitto also fell clearly short of the
target in the first quarter. The price level of softwood logs took an upward
turn at the end of the period, but the price level of pulpwood remained stable.
Wood harvesting succeeded as planned, but wood deliveries fell slightly short
of the planned level due to the difficulties in railway transports in Finland
and the challenging ice situation. The lack of subsidy for electricity produced
with wood slowed down demand for energy wood. During the period under review,
Wood Supply's total delivery volume to production units amounted to 7.7 million
cubic metres (7.5).
Measures to sell forest management services were intensified, and the efforts
succeeded very well. Metsäliitto was granted Finland's first PEFC group
certificate which comprises forests owned by Group's associate companies.
Previously the group certificates have been granted to smaller geographical
areas. The possibility to join Metsäliitto's certificate is offered as a new
service to members who have signed a forest management agreement, and they may
enrol during the spring. In connection with the Cooperative's Representative
Council election, more than one hundred events for members were organised in
the districts.
Wood Products Industry
The sales of Metsäliitto Wood Products Industry totalled EUR 238 million (192)
in January-March, and the operating result excluding non-recurring items
totalled EUR 5 million (0).
Wood Products Industry's business operations grew in all customer segments
compared to the first quarter of the previous year. Strict cost monitoring and
management of capital employed improved the profitability of the operations.
The market balance of sawn timber continued to be weak and the result was
unsatisfactory. Demand for value-added products continued to be weak in Europe
and partly in Finland as well. However, internal measures improved
profitability. The sales of engineered wood products grew, and profitability
increased through higher utilisation rates. Profitability of construction
products improved even though the long winter complicated sales. Investments in
the development of the operations continue.
Wood Products Industry supplied a Finnforest Kerto-Ripa roof system for the
Karisma shopping centre being built in Lahti, and the system was installed in
record time. In March, Wood Products Industry's product development received a
significant recognition when Metropol Parasol, one of the world's largest wood
buildings, made with Kerto elements, was inaugurated in Seville, Spain.
Pulp
Metsä-Botnia's sales amounted to EUR 340 million (288), while the operating
result was EUR 96 million (57). The operating result does not include
non-recurring items. The considerable improvement in sales and operating result
was primarily due to the positive development of the prices of pulp. The sales
volume of pulp remained at last year's level at 528,952 tonnes (531,300).
Foreign-currency-denominated market prices for both softwood and hardwood pulp
were, on average, 12 per cent higher than in the first quarter last year. The
price of softwood pulp in Europe was USD 950 per tonne at the beginning of the
period and USD 980 at the end of the period. The corresponding figures for
hardwood pulp were USD 850 and USD 850. The stock levels of both producers and
customers are normal or low, and the demand for pulp has remained good.
Unplanned downtime reduced the utilisation rate of Metsä-Botnia's mills
slightly in January-February. In addition, traffic at the ports of the Gulf of
Bothnia came to a complete standstill due to the difficult ice situation in
February. In the latter half of the review period, the utilisation rate of the
mills was good, and a new monthly production record, 47,160 tonnes, was set in
Äänekoski.
At the beginning of February, Metsä-Botnia's Board of Directors decided to
invest in a gasification plant at the Joutseno mill. The plant will improve the
efficiency of renewable energy usage. The investment will replace the fossil
fuel used in the lime kiln with bio fuel produced from tree bark. The
investment will make the mill a carbon dioxide neutral unit during normal
operation. Construction will begin in June 2011, and the new mill will be
commissioned at the end of 2012. In the construction phase, the employment
impact of the investment is approximately 120 person-years. The total value of
the investment is approximately EUR 20 million.
Board and Paper
The sales of Board and Paper totalled EUR 685 million (602), and the operating
result excluding non-recurring items was EUR 43 million (39). A gain of EUR 3
million was recognised in the operating result as a non-recurring item from the
sale of a plot in Jyväskylä. The non-recurring item of EUR 10 million in the
comparison period is from dissolved IT cost provisions.
Operating result excluding non-recurring items compared to the corresponding
period last year was improved by the higher average selling prices of board and
papers. The result was weakened by the increase in raw material prices. In
particular, the cost of wood, chemicals and energy was at a higher level than
in the previous year. In addition, the clear strengthening of the Swedish krona
weakened the result.
Operating result including non-recurring items totalled EUR 46 million (49).
Net interest and other financial expenses totalled EUR 17 million (16), income
from associates was EUR 0 million (-2) and net exchange gains and losses booked
as financial items were EUR 2 million (-6).
The result for the review period before taxes was EUR 31 million (25), earnings
per share were EUR 0.08 (0.06) and return on capital employed was 8.4 per cent
(9.1). Excluding non-recurring items, the result before taxes was EUR 28
million (15), earnings per share were EUR 0.07 (0.03) and the return on capital
employed was 7.8 per cent (7.3).
At the end of March, M-real's equity ratio was 33.6 per cent and net gearing
was 78 per cent (31 December 2010: 32.1% and 83%, respectively). Some of
M-real's loan agreements set a 120 per cent limit on the company's net gearing
and a 30 per cent limit on the equity ratio. At the end of March, net gearing
calculated as defined in the loan agreements was approximately 60 per cent and
the equity ratio about 39 per cent.
Tissue and Cooking Papers
The first-quarter sales of Metsä Tissue, producer of tissue and cooking papers,
totalled EUR 241 million (225). The increase in sales was primarily due to the
selling prices and structure of sales as well as favourable exchange rate
fluctuations. The sales of own brands increased by 13 per cent compared to the
previous year.
Operating result was EUR 7 million (19). The result remained low due to the
continued increases in the prices of pulp, recycled fibre, other raw materials
and energy. Compared to the first quarter of last year, the average price of
pulp was 15 per cent higher and the price of recycled pulp 30 per cent higher.
Increased transportation costs also weakened the result. The exceptionally
harsh winter and the resulting floods in Germany caused challenges in product
deliveries and generated additional expenses for the company.
The rebuilt paper machine 5 at the Düren mill in Germany was launched at the
end of March. The installation of upgrading lines started during the first
quarter. The goal is to have the entire upgrading capacity of the Düren unit in
operation by the end of June.
In Slovakia, the company switched to electricity generated with hydropower. In
the future, approximately 70 per cent of the mill's electricity will be
generated with hydropower, which supports the company's sustainable development
objectives. The hydropower project is one the subprojects being implemented
under the Tissue 20 project. The objective of the subprojects is to improve
energy efficiency so that it equals 20 per cent of the company's current energy
consumption by 2012.
The company's Serla brand reached its 50th anniversary. The jubilee year opened
with sales, marketing and communication measures. Finnish consumers recognised
Serla's strong position as a responsible brand by ranking it the second most
popular product that has the Nordic Swan ecolabel. A Swedish consumer survey
ranked the most loved brands in Sweden, and Lambi was number 15 among nearly
one thousand brands. In Denmark, a consumer panel selected Lambi as their
favourite product based on its product characteristics.
Events after the period
At the beginning of April, M-real signed a letter of intent on the sale of the
Premium Paper operations at the Reflex mill to an affiliate of German
Papierwerke Lenk AG. The agreement would cover the Premium Paper operations and
related properties as well as approximately 100 M-real employees.
If the arrangement proceeds as planned, M-real will recognise a EUR 12 million
negative non-recurring item. The cash impact would be approximately EUR 1
million negative. The divestment will not have any material impact on M-real's
operating result excluding non-recurring items. It is estimated that the
arrangement will become final during the second quarter of 2011.
In April, Metsä Tissue announced an extensive investment programme in Poland.
The three-year programme includes, among other things, the construction of two
new paper machines and an upgrading line at the Metsä Tissue Krapkowice mill,
rebuild of one paper machine, and infrastructure development. The total value
of the investment programme is approximately EUR 55 million, and it will enable
Metsä Tissue to increase its annual production capacity in Poland by 35,000
tonnes.
M-real announced today its plan to divest the entire Gohrsmühle mill in Germany
or parts of the mill separately based on a Paper Park concept. At the same
time, M-real initiates a process to discontinue production of uncoated fine
paper and unprofitable speciality papers at the Gohrsmühle mill in case the
sales options will not materialize. If the closures will be realised, M-real
would focus on cast-coated label and packaging materials (Chromolux). In
addition, M-real is planning to discontinue the remaining operation, carbonless
paper converting, at Reflex mill in Germany.
During the past years, M-real has had several unsuccessful attempts with a
number of candidates divest the Alizay paper mill in France. Sales options are
sought further. M-real invites credible candidates to a public process which
aims at a divestment of the Alizay paper mill by the end of September 2011.
Should M-real fail to find a credible buyer for the mill in the process within
the given time frame, M-real would be forced to consider closing of the Alizay
paper mill.
If the planned measures will be implemented, Metsäliitto Group's annual sales
is expected to reduce by about EUR 390 million and the operating result to
improve by about EUR 60 million based on 2010 actual performances. Most of the
annual financial impact is expected to be realised in 2012, and in full impact
from 2013 onwards. As a result from the planned measures M-real's annual paper
production capacity would reduce by about 500,000 tonnes of which about 430,000
tonnes would be uncoated fine paper and 70,000 tonnes coated specialty papers.
Implementations of the planned measures are subject to finalisation of the
statutory labour negotiations processes with the employees based on the local
legislations. As part of the statutory labour negotiations, also other future
alternatives for the closed units will be investigated. These negotiations will
be started at Gohrsmühle and Reflex as soon as possible. In regard with Alizay,
the statutory labour negotiations relating to possible closure will be
initiated in case the divestment process is unsuccessful. M-real strives with
its own actions to mitigate the negative impacts the the possible measures
inflict on the employees.
All in all, the planned measures at Alizay, Gohrsmühle and Reflex are estimated
to result in approximately EUR 170 million non-recurring impact on result. The
cash costs are estimated be EUR 50 million. In connection with the planned
measures, Board and Paper Industry's result in The positive impact from the
release of working capital is expected to be EUR 80 million the second quarter
2011 is estimated to include EUR 20 million non-recurring impairments and cost
provisions. Above estimates of the non-recurring financial impacts are
preliminary and they will be further determined when the final decisions for
the planned measures are taken.
Risks and uncertainties
The estimates and statements in this Interim Report are based on current plans
and estimates. They involve risks and uncertainties that may cause the results
to differ from those expressed in such statements. In the short term,
especially the price of and demand for end products, raw material costs, energy
prices and the exchange rate development of the euro have an effect on the
results of Metsäliitto Group.
In March, the state enterprise Metsähallitus filed a claim for damages at the
District Court of Helsinki, demanding that Metsäliitto, UPM-Kymmene and Stora
Enso jointly pay a maximum of EUR 340 million in compensation due to prohibited
cooperation with regard to prices in the raw wood market. The claim is related
to the 3 December 2009 decision by the Market Court which states that the
aforementioned companies have violated the act on competition restrictions.
Metsäliitto's view is that the claim for damages is unfounded, and the company
has not recognised any provisions regarding it.
The risks related to the Group's business have been explained more extensively
in Metsäliitto Group's Annual Report for 2010.
Near-term outlook
The use of wood at the Group's production units will continue at the normal
level. Metsäliitto will actively purchase stands marked for felling that can be
harvested in the summer and all timber grades.
After the quiet first quarter in Wood Products Industry, the operating result
is expected to strengthen during the second quarter. Demand forecasts for both
heavy and light transportation equipment industry have improved significantly.
Construction is also expected to recover.
In the second quarter, demand for pulp is expected to continue at a good level
and the market situation is expected to be stable. New capacity will enter the
market in short fibre pulp, in particular, during the spring.
The demand for tissue and cooking papers is estimated to remain stable. The
continued increases in production and transportation costs and the impact of
new indirect taxes will be transferred to the prices of Metsä Tissue's all
product categories.
Demand for board is also expected to remain good during the next few months.
M-real successfully increased the prices of liner in April. The production
downtime relating to the expansion investment of the Simpele folding boxboard
machine, to be carried out in May, will have a negative impact on the result in
the second quarter. Demand for and price level of uncoated fine paper and
special paper seems to continue unchanged.
Metsäliitto Group's operating result excluding non-recurring items in the
second quarter of the year is expected to be approximately at the same level as
in the previous quarter.
Proposal for interest on members' capital
Metsäliitto Cooperative's Board of Directors has proposed to the Supervisory
Board that interest of 5.5 per cent (5.5 for 2009) be paid on the statutory
capital invested by the members for 2010. Interest of 5.0 per cent (5.0) is
proposed for additional members' capital A, and interest of 4.5 per cent (4.5)
for additional members' capital B and C.
The proposal was discussed in March by Metsäliitto Cooperative's Supervisory
Board, which, in turn, made a proposal on the interest on members' capital to
the Representative Council meeting convening on 4 May 2011.
Espoo, 4 May 2011
Metsäliitto Group
Board of Directors
Further information:
Vesa-Pekka Takala, Group CFO, Metsäliitto Group, tel. +358 10 465 4260
Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541
Unaudited
METSÄLIITTO GROUP
Condensed consolidated statement 2011 2010 Change 2010
of comprehensive income, EUR mill. 1-3 1-3 1-12
------------------------------------------------------------------------
Continuing operations
------------------------------------------------------------------------
Sales 1 403 1 224 179 5 377
------------------------------------------------------------------------
Other operating income 29 31 -2 142
------------------------------------------------------------------------
Operating expenses -1 228 -1 073 -155 -4 686
------------------------------------------------------------------------
Depreciation and impairment losses -71 -78 7 -336
------------------------------------------------------------------------
Operating result 133 105 29 497
------------------------------------------------------------------------
Share of results in associated companies 0 -6 6 -15
------------------------------------------------------------------------
Exchange gains and losses -1 -2 1 -7
------------------------------------------------------------------------
Other net financial items -44 -34 -10 -129
------------------------------------------------------------------------
Result before income tax 89 64 26 345
------------------------------------------------------------------------
Income taxes -26 -24 -3 -131
------------------------------------------------------------------------
Result for the period 63 40 23 214
from continuing operations
------------------------------------------------------------------------
Discontinued operations
------------------------------------------------------------------------
Result from discontinued operations 0 0 0 0
------------------------------------------------------------------------
Result for the period 63 40 22 214
------------------------------------------------------------------------
Other comprehensive income
------------------------------------------------------------------------
Cash flow hedges -2 1 -3 19
------------------------------------------------------------------------
Available for sale financial assets 0 18 -18 30
------------------------------------------------------------------------
Currency translation differences 3 13 -10 25
------------------------------------------------------------------------
Other items 2 2 0 0
------------------------------------------------------------------------
Income tax relating to components 0 -3 2 -7
of other comprehensive income
------------------------------------------------------------------------
Other comprehensive income, net of tax 3 32 -30 67
------------------------------------------------------------------------
Total comprehensive income 66 73 -7 281
for the period
------------------------------------------------------------------------
Result attributable to:
------------------------------------------------------------------------
Members of parent company 13 21 -8 170
------------------------------------------------------------------------
Non-controlling interests 49 19 31 44
------------------------------------------------------------------------
63 40 22 214
------------------------------------------------------------------------
Total comprehensive income
attributable to:
------------------------------------------------------------------------
Members of parent company 16 42 -26 204
------------------------------------------------------------------------
Non-controlling interests 49 31 19 77
------------------------------------------------------------------------
66 73 -7 281
------------------------------------------------------------------------
Unaudited
Condensed consolidated balance sheet 2011 2010 2010
31.3. 31.3. 31.12.
----------------------------------------------------------------
ASSETS
Non-current
Goodwill 504 499 503
Other intangible assets 260 262 242
Tangible assets 2 248 2 385 2 281
Biological assets 8 7 8
Investments in associated companies 77 92 80
Available for sale investments 338 372 338
Non-current financial assets 15 12 18
Deferred tax receivables 60 63 63
---------------------
3 510 3 692 3 534
---------------------
Current
Inventories 827 747 798
Accounts receivables and other receivables 934 876 892
Cash and cash equivalents 447 193 440
---------------------
2 208 1 816 2 131
---------------------
Assets classified as held for sale 8 - 8
----------------------------------------------------------------
Total assets 5 726 5 508 5 672
----------------------------------------------------------------
MEMBERS' FUNDS AND LIABILITIES
Members' funds
Members' funds 1 179 989 1 154
Non-controlling interests 553 499 524
---------------------
1 732 1 488 1 678
Non-current liabilities
Deferred tax liabilities 400 393 409
Post-employment benefit obligations 114 120 115
Provisions 36 64 48
Borrowings 2 016 1 896 1 927
Other liabilities 33 139 36
---------------------
2 600 2 612 2 534
Current liabilities
Provisions 25 38 19
Current borrowings 381 554 471
Accounts payable and other liabilities 987 817 969
---------------------
1 393 1 408 1 460
Liabilities classified as held for sale - - -
Total liabilities 3 994 4 021 3 994
----------------------------------------------------------------
Total members' funds and liabilities 5 726 5 508 5 672
----------------------------------------------------------------
Unaudited
Equity attributable to members of parent company
Change in members' Member Share Transl Fair Retain Total Non- Total
funds s' premiu ation value ed contro
EUR million capita m differ and earnin lling
l accoun - other gs intere
t ences reserv sts
es --------------------------------------------------------------------------------
Members' funds 484 30 9 221 184 927 471 1 399
1.1.2010
--------------------------------------------------------------------------------
Result for the 21 21 19 40
period
Other
comprehensive
income
Cash flow hedges 3 3 -2 1
Available for sale 8 8 11 18
financial assets
Currency 9 9 4 13
translation
differences
Other items 2 2 0 2
Income tax 1 -3 -2 0 -3
relating to
components
of other
comprehensive
income
--------------------------------------------------------------------------------
Other 10 8 2 20 12 32
comprehensive
income total
Total 10 8 24 42 31 73
comprehensive
income
Transactions with
owners
Dividends paid -1 -1 -4 -5
Change in members' 21 21 21
capital
Change in share
premium account
Transfer from
unrestricted to
restricted equity
Business 0 0
arrangements
--------------------------------------------------------------------------------
Members' funds 505 30 19 229 207 989 499 1 488
31.3.2010
--------------------------------------------------------------------------------
Members' funds 539 31 25 247 312 1 154 524 1 678
1.1.2011
--------------------------------------------------------------------------------
Result for the 13 13 49 63
period
Other
comprehensive
income
Cash flow hedges -1 -1 -1 -2
Available for sale 0 0 1 0
financial assets
Currency 2 2 1 3
translation
differences
Other items 2 2 0 2
Income tax -1 0 0 0 0
relating to
components
of other
comprehensive
income
--------------------------------------------------------------------------------
Other 1 -1 2 3 0 3
comprehensive
income total
Total 1 -1 15 16 49 66
comprehensive
income
Transactions with
owners
Dividends paid -1 -1 -20 -21
Change in members' 10 10 10
capital
Change in share
premium account
Transfer from
unrestricted to
restricted equity
Business 0 0 0
arrangements
Acquisitions of
non-controlling 0 0
interests
--------------------------------------------------------------------------------
Members' funds 549 31 27 246 326 1 179 553 1 732
31.3.2011
--------------------------------------------------------------------------------
Unaudited
Condensed consolidated cash flow statement 2011 2010 2010
1-3 1-3 1-12
------------------------------------------------------------------
Result for the period 63 40 214
Total adjustments 131 91 495
Change in working capital -83 -164 -136
------------------------------------------------------------------
Cash flow arising from operations 110 -33 573
Net financial items -41 -26 -163
Income taxes paid -18 -8 -100
------------------------------------------------------------------
Net cash flow arising from operating activities 52 -67 310
Acquisitions 0 0 -21
Investments in tangible and -35 -15 -138
intangible assets
Divestments of assets and other 10 12 89
------------------------------------------------------------------
Net cash flow arising from investing activities -25 -4 -70
Change in members' funds 10 21 52
Change in other equity 0 0 4
Change in long-term loans -3 -316 -376
and other financial items
Dividends paid -25 0 -40
------------------------------------------------------------------
Net cash flow arising from financing activities -19 -295 -360
------------------------------------------------------------------
Changes in cash and cash equivalents 7 -365 -120
------------------------------------------------------------------
------------------------------------------------------------------
Cash and cash equivalents at beginning of period 440 558 558
Translation difference 0 1 3
Changes in cash and cash equivalents 7 -365 -120
Cash and cash equivalents 0 - 0
in assets classified as held for sale
------------------------------------------------------------------
Cash and cash equivalents at end of period 447 193 440
------------------------------------------------------------------
BUSINESS SEGMENTS
Wood Supply QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 376 333 1 353
--------------------------------------------------------
EBITDA 8 8 25
- ” -, excl. non-recurring items 8 8 25
Depreciation and impairment -1 -1 -4
Operating result 8 7 21
- ” -, excl. non-recurring items 8 7 21
- ” -, % of sales 2,0 2,0 1,6
--------------------------------------------------------
Capital expenditure 1 0 3
Personnel at end of period 1 058 1 024 1 078
--------------------------------------------------------
Wood Products Industry QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 238 192 902
--------------------------------------------------------
EBITDA 14 8 67
- ” -, excl. non-recurring items 14 9 63
Depreciation and impairment -8 -9 -45
Operating result 5 -2 23
- ” -, excl. non-recurring items 5 0 28
- ” -, % of sales 2,2 -0,1 3,1
--------------------------------------------------------
Capital expenditure 2 3 16
Personnel at end of period 2 977 2 673 2 703
--------------------------------------------------------
Pulp Industry QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 340 288 1 365
--------------------------------------------------------
EBITDA 113 78 444
- ” -, excl. non-recurring items 113 78 453
Depreciation and impairment -17 -21 -63
Operating result 96 57 381
- ” -, excl. non-recurring items 96 57 379
- ” -, % of sales 28,1 19,7 27,8
--------------------------------------------------------
Capital expenditure 10 1 14
Personnel at end of period 883 903 881
--------------------------------------------------------
Board and Paper Industry QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 685 602 2 605
--------------------------------------------------------
EBITDA 77 82 312
- ” -, excl. non-recurring items 74 72 305
Depreciation and impairment -31 -33 -166
Operating result 46 49 146
- ” -, excl. non-recurring items 43 39 173
- ” -, % of sales 6,3 6,5 6,6
--------------------------------------------------------
Capital expenditure 12 7 66
Personnel at end of period 4 515 4 796 4 538
--------------------------------------------------------
Tissue and Cooking Papers QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 241 225 938
--------------------------------------------------------
EBITDA 16 29 94
- ” -, excl. non-recurring items 16 29 99
Depreciation and impairment -10 -10 -44
Operating result 7 19 50
- ” -, excl. non-recurring items 7 19 59
- ” -, % of sales 2,7 8,5 6,3
--------------------------------------------------------
Capital expenditure 9 4 49
Personnel at end of period 3 211 3 162 3 198
--------------------------------------------------------
Other operations QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales 1 0 3
--------------------------------------------------------
EBITDA -1 -2 -7
- ” -, excl. non-recurring items -1 -2 -6
Depreciation and impairment 0 0 -2
Operating result -2 -2 -9
- ” -, excl. non-recurring items -2 -2 -7
--------------------------------------------------------
Capital expenditure 1 0 23
Personnel at end of period 443 369 422
--------------------------------------------------------
Other operations include among others Metsäliitto's service and holding
functions.
Internal sales and eliminations QI/11 QI/10 QI-IV/10
--------------------------------------------------------
Sales -478 -415 -1 790
--------------------------------------------------------
EBITDA -22 -19 -101
- ” -, excl. non-recurring items -22 -19 -94
Depreciation and impairment -4 -3 -13
Operating result -26 -23 -114
- ” -, excl. non-recurring items -26 -23 -107
--------------------------------------------------------
Metsäliitto Group QI/11 QI/10 QI-IV/10
----------------------------------------------------------
Sales 1 403 1 224 5 377
----------------------------------------------------------
EBITDA 204 183 833
- ” -, excl. non-recurring items 201 174 846
Depreciation and impairment -71 -78 -336
Operating result 133 105 497
- ” -, excl. non-recurring items 130 96 547
- ” -, % of sales 9,3 7,9 10,2
----------------------------------------------------------
Capital expenditure 35 15 159
Personnel at end of period 13 087 12 927 12 820
----------------------------------------------------------
EBITDA = Operating result before depreciation and impairment losses
Quarterly data 2011 2010 2010 2010 2010
QI QIV QIII QII QI
----------------------------------------------------------------------
Sales
Wood Supply 376 365 318 337 333
Wood Products Industry 238 224 231 256 192
Pulp Industry 340 365 344 368 288
Board and Paper Industry 685 665 662 676 602
Tissue and Cooking Papers 241 246 236 231 225
Other operations 1 1 1 2 0
Internal sales -478 -475 -446 -454 -415
----------------------------------------------------------------------
Sales total 1 403 1 391 1 345 1 416 1 224
Operating result
Wood Supply 8 4 3 8 7
Wood Products Industry 5 2 11 11 -2
Pulp Industry 96 98 114 112 57
Board and Paper Industry 46 -4 66 35 49
Tissue and Cooking Papers 7 14 11 5 19
Other operations -2 -1 -3 -2 -2
Eliminations -26 -30 -32 -29 -23
----------------------------------------------------------------------
Operating result total 133 82 170 141 105
- % of sales 9.5 5.9 12.6 10.0 8.6
Share of results in 0 -1 -1 -7 -6
associated companies
Exchange gains and losses -1 -1 -6 2 -2
Other net financial items -44 -27 -35 -34 -34
----------------------------------------------------------------------
Result before income tax 89 52 128 102 64
Income tax -26 -29 -39 -40 -24
----------------------------------------------------------------------
Result from continuing operations 63 23 89 62 40
----------------------------------------------------------------------
Result from discontinued operations 0 0 0 0 0
----------------------------------------------------------------------
Result for the period 63 23 89 62 40
----------------------------------------------------------------------
Operating result excl. non-rec. items QI/11 QIV/10 QIII/10 QII/10 QI/10
----------------------------------------------------------------------------
Wood Supply 8 4 3 8 7
----------------------------------------------------------------------------
Wood Products Industry 5 12 5 11 0
Pulp Industry 96 99 114 110 57
Board and Paper Industry 43 37 54 43 39
Tissue and Cooking Papers 7 14 13 12 19
Other operations & eliminations -28 -24 -34 -31 -25
----------------------------------------------------------------------------
Operating result total 130 142 155 154 96
- % of sales 9.3 10.2 11.5 10.9 7.9
----------------------------------------------------------------------------
Change in tangible assets QI/11 QI/10 QI-IV/10
-----------------------------------------------------------------
Book value at beginning of period 2 281 2 428 2 428
Business acquisitions - - 5
Investments 34 14 135
Decrease -3 -12 -23
Assets classified as held for sale - - -6
Depreciation and impairment charges -67 -74 -314
Translation differences and other changes 4 29 56
-----------------------------------------------------------------
Book value at end of period 2 248 2 385 2 281
In December 2010, assets classified as held for sale include part of the old
equipment of the Metsä-Botnia's Kaskinen pulp mill shut down in 2009.
Commitments QI/11 QI/10 QIV/10
---------------------------------------------------------------
On own behalf (incl. leasing liabilities) 717 464 717
---------------------------------------------------------------
On behalf of associated companies 4 6 4
On behalf of others 6 3 4
---------------------------------------------------------------
Total 727 474 724
Open derivative contracts QI/11 QI/10 QIV/10
-----------------------------------------------
Interest rate derivatives 1 020 829 1 003
-----------------------------------------------
Currency derivatives 1 474 1 775 1 660
Other derivatives 118 234 127
-----------------------------------------------
Total 2 612 2 838 2 790
The market value of open derivative contracts at the end of the review period
was EUR 8 million (QIV/10: EUR -20 million). Open derivative contracts also
include closed contracts to a total amount of EUR 555 million (QIV/10: EUR 522
million).
Accounting policies
This Interim Report was prepared in accordance with the IAS 34 standard Interim
Financial Reporting and the accounting policies presented in Metsäliitto
Group's Annual Report 2010.
Calculation of
key ratios
Return on = (Result from continuing operations before tax + interest
capital expenses, net exchange gains/losses and other financial
employed (%) expenses) per
(Balance total - non-interest-bearing liabilities (average))
Return on = (Result from continuing operations before tax - income
equity (%) taxes) per
(Members' funds (average))
Equity ratio = (Members' funds) per
(%) (Balance total - advance payments received)
Net gearing = (Interest bearing borrowings - liquid funds -
ratio (%) interest-bearing receivables) per
(Members' funds)
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