2008-02-06 11:00:39 CET
2008-02-06 11:04:37 CET
BIRTINGARSKYLDAR UPPLÝSNINGAR
M-real - Financial Statement Release
M-real's operating profit excluding non-recurring items for 2007 EUR 49 million
M-real Corporation Stock Exchange Release 6.2.2008
According to IFRS standards Map Merchant Group has been treated as
discontinued operations. In the income statement Map has been shown
on the line Result from discontinued operations. Comparable figures
from continuing operations have been announced in the release of 17
December 2007.
Result for 2007
Sales were EUR 4,440 million (2006: 4,604). Sales declined by 3.6 per
cent compared to the previous year due to capacity closures and sales
of the carton plants.
* Operating profit excluding non-recurring items was EUR 49 million
(18). Operating profit including non-recurring items was EUR -120
million (-229).
* Result before taxes from continuing operations, excluding
non-recurring items, was EUR -104 million (-104). Result before
taxes from continuing operations, including non-recurring items,
was EUR -273 million (-351).
Result for the fourth quarter of 2007
* Sales were EUR 1,085 million (Q3/07: 1,102). Sales declined 2 per
cent compared to the previous quarter.
* Operating profit excluding non-recurring items was EUR -6 million
(36). Operating profit including non-recurring items was EUR -245
million (43).
* Result before taxes from continuing operations, excluding
non-recurring items, EUR -49 million (-3). Result before taxes from
continuing operations, including non-recurring items, was EUR -288
million (4).
Events during the fourth quarter
* The wood supply situation remained difficult due to a second
consecutive exceptionally mild winter. Nevertheless, so far it has
been possible to ensure the supply of wood to mills without
significant disruptions. If the situation does not improve,
production stoppages cannot be avoided and risk for increases in
the price of pulpwood will grow.
* The new programme to improve profits and reduce complexity was
announced in November. M-real aims to achieve an improvement of EUR
100 million in total annual profits by the end of 2009.
Events after the period
* M-real agreed in the beginning of February to sell its New Thames
office paper mill located in Kemsley, UK, to DS Smith Plc. The debt
free sales price was about EUR 80 million.
* Including the sale of the New Thames mill M-real targets over the
next 12 months period asset sales of a minimum EUR 200 million."In the future, M-real is a smaller-sized company but it will be more
profitable with even a stronger packaging business and a more focused
paper business than today. By simplifying business concepts and ways
of working we will reduce costs and release employed capital."
Mikko Helander, CEO, M-real Corporation
Key figures 2007 2006 Q4/07 Q3/07 Q2/07 Q1/07 2005
Sales, MEUR 4,440 4,604 1,085 1,102 1,096 1,157 4,239
EBITDA, MEUR 444 272 70 116 66 193 413
excl. non-recurring
items, MEUR 366 378 78 111 77 101 358
Operating profit,
MEUR -120 -229 -245 43 -15 97 18
excl. non-recurring
items, MEUR 49 18 -6 36 -2 21 -18
Result before taxes
from continuing
operations, MEUR -273 -351 -288 4 -44 55 -114
from excl.
non-recurring items,
MEUR -104 -104 -49 -3 -31 -21 -146
Result for the period
from continuing
operations, MEUR -250 -340 -249 -5 -48 52 -81
from discontinued
operations, MEUR 55 -59 57 -3 -1 2 1
Result for the period -195 -399 -192 -8 -49 54 -80
Result per share
.. from continuing
operations, EUR -0.76 -1.03 -0.75 -0.02 -0.15 0.16 -0.25
.. from discontinued
operations, EUR 0.17 -0.18 0.17 0.00 0.00 0.00 0.00
Result per share,
total -0.59 -1.21 -0.58 -0.02 -0.15 0.16 -0.25
Return on equity, % -14.0 -16.8 -53.0 -2.3 -11.2 9.9 -4.2
excl. non-recurring
items, % -5.9 -5.3 -0.4 -0.9 -2.4 -7.3 -5.7
Return on capital
employed, % -2.6 -4.7 -24.4 4.4 -1.1 9.7 0.9
excl. non-recurring
items, % 1.4 0.9 -0.3 3.7 0.2 2.5 0.2
Equity ratio at end
of period, % 32.1 30.9 32.1 32.7 32.8 32.9 36.6
Gearing ratio at end
of period, % 112 126 112 117 117 114 95
Interest-bearing net
liabilities 1,867 2,403 1,867 2,187 2,192 2,189 2,205
Gross investments,
MEUR 259 428 81 66 62 50 452
Paper deliveries,
1,000 tonnes 3,949 4,192 980 975 965 1,029 4,046
Paperboard
deliveries, 1,000
tonnes 1,203 1,161 291 297 313 285 1,006
Personnel at end of
period 9,508 14,125 9,508 12,449 13,302 14,509 15,154
Dividend proposed by
the Board of
Directors EUR/share 0.06 0.06 0.12
EBITDA = Earnings before interest, taxes, depreciation and
amortization
Result for 2007 compared to 2006
M-real's sales in 2007 totalled EUR 4,440 million (2006: 4,604).
Comparable sales decreased by 0.5 per cent. The operating result
excluding non-recurring items was EUR 49 million (18). The operating
result including non-recurring items was EUR -120 million (-229). The
result before taxes from continuing operations excluding
non-recurring items amounted to EUR -104 million (-104). The result
before taxes from continuing operations including non-recurring items
was EUR -273 million (-351).
The operating result was EUR -120 million (-229). The net
non-recurring items in the 2007 operating result totalled EUR -169
million (-247) and the most significant items are:
* Net impairment loss of EUR 182 million during the fourth quarter.
The sum consists of an impairment loss of EUR 185 million from the
goodwill of the Office Papers business area, and a EUR 3 million
reversal of an impairment loss from the fixed assets of the Kyro
paper mill in the Consumer Packaging business area in the fourth
quarter
* Capital gain of EUR 135 million on the sale of Metsä-Botnia's
shares in the first quarter
* Cost provision and write-downs of fixed assets of EUR 49 million
in the Graphic Papers business area connected to the profit
improvement programme announced on 13 November 2007 in the fourth
quarter
* EUR 30 million cost provision in the Office Papers business area
for the completion of the closure of the Wifsta mill in the first
quarter
* Impairment loss of EUR 16 million due to the valuation of assets
held for sale at the expected selling price in compliance with IFRS
5 in the first quarter
* EUR 14 million cost provision in the Graphic Papers business area
for the completion of the closure of the Sittingbourne mill during
the first quarter and the reduction of this cost reserve by
EUR 7 million in the third quarter
* EUR 13 million reduction in cost provision for the closure of the
Wifsta mill in Office Paper's business area in the fourth quarter
* Cost provision and write-downs of fixed assets of EUR 12 million
in the Consumer Packaging business area connected to the profit
improvement programme announced on 13 November 2007 in the fourth
quarter
* Cost provisions and write-down of fixed assets of EUR 11 million
connected to the profit improvement programme for domestic
operations in the second quarter
* Cost provision of EUR 8 million in the Office Papers business area
connected to the profit improvement programme announced on 13
November 2007 in the fourth quarter
In addition to the items recognised in the operating profit, in the
fourth quarter an estimated capital gain of EUR 77 million was
recognised in the result from discontinued operations related to the
sale of Map Merchant Group. The exact sales price will be defined
later. Depending on the final adjustment calculation the sales price
may be lowered, at maximum, by EUR 30 million. Lowering of the sales
price, if realised, would have a negative effect on the result for
the discontinued operations in 2008. Finalising the transaction will,
however, have a positive effect on M-real's cash flow in 2008.
In 2006, the net non-recurring items stood at EUR -247 million.
Non-recurring income was EUR 3 million and non-recurring costs were
EUR 250 million. The most significant non-recurring costs were:
* Impairment loss of EUR 113 million in the fourth quarter
* Write-down of fixed assets and cost provision of EUR 60 million
for the closing of the Sittingbourne mill in the fourth quarter.
* Write-down of EUR 15 million on the Wifsta mill's fixed assets in
the fourth quarter
* Loss of EUR 37 million from the disposal of the Pont Sainte
Maxence mill, of which EUR 35 million was booked in the second
quarter and EUR 2 million in the third quarter
* EUR 24 million for reduction in personnel at the Stockstadt,
Hallein and Alizay mills, of which EUR 19 million was booked in the
second quarter and EUR 5 million in the fourth quarter
Compared with the previous year, the operating result excluding
non-recurring items was improved by cost saving measures and the 9
per cent increase in the price of uncoated fine paper. In addition,
the Consumer Packaging business area clearly improved its
profitability mainly due to higher delivery volumes.
Operating profit was reduced by the weaker U.S. dollar, which was 9
per cent lower on average, the sharply increased price of pulpwood
and the lower average selling price of coated magazine paper.
The volume of paper deliveries in 2007 totalled 3,949,000 tonnes
(2006: 4,192,000). Production was curtailed by 201,000 tonnes in line
with demand (238,000). Paperboard deliveries amounted to 1,201,000
tonnes (1,161,000) and production curtailments to 66,000 tonnes
(60,000).
Financing income and expenses totalled EUR -150 million (-122).
Foreign exchange gains and losses from accounts receivable, accounts
payable, financial income and expenses and the valuation of currency
hedging were EUR -3 million (-1). Net interest and other financing
expenses stood at EUR -147 million (-121). Other financing expenses
include EUR 6 million (6) in gains from the unwinding of interest
rate hedging and gains from the valuation of interest rate hedging.
The result from continuing operations before taxes was EUR -273
million (-351). The result from continuing operations before taxes,
excluding non-recurring items, totalled EUR -104 million (-104). The
positive effect of income taxes, including the change in deferred tax
liabilities, was EUR 23 million (11).
Earnings per share were EUR -0.59 (-1.21). Excluding non-recurring
items, earnings per share from continuing operations were EUR -0.32
(-0.29). Return on equity was -14.0 per cent (-16.8), and -5.9 per
cent (-5.3) excluding non-recurring items. The return on capital
employed was -2.6 per cent (-4.7), and 1.4 per cent (0.9) excluding
non-recurring items.
Result for October-December compared with the previous quarter
Sales in the fourth quarter were EUR 1,085 million (Q3/07: 1,102).
Sales decreased by 1 per cent compared with the previous quarter. The
operating profit was EUR -245 million (43). Operating profit
excluding non-recurring items was EUR -6 million (36). Result from
continuing operations before taxes was EUR -49 million (-3). Result
before taxes including non-recurring items was EUR -288 million (4).
Net non-recurring items recognised in operating profit during
October-December stood at EUR -239 million and the most significant
items were:
* A net impairment loss of EUR 182 million comprising an impairment
loss of EUR 185 million from the goodwill of the Office Papers
business area, and a EUR 3 million reversal of an impairment loss
on the fixed assets of the Kyro paper mill in the Consumer
Packaging business area
* A capital gain of EUR 13 million from the sale of assets taken out
of use in the Office Papers business area
* Cost reserves and write-downs of fixed assets of EUR 49 million in
the Graphic Papers business area connected to the profit
improvement programme announced on 13 November 2007
* Cost reserves and write-downs of fixed assets of EUR 12 million in
the Consumer Packaging business area connected to the profit
improvement programme announced on 13 November 2007
* Cost reserves of EUR 8 million in the Office Papers business area
connected to the profit improvement programme announced on 13
November 2007.
In addition to the items recognised in the operating profit, in the
fourth quarter an estimated capital gain of EUR 77 million was
recognised as a non-recurring item from discontinued operations from
the sale of Map Merchant.
A EUR 7 million reduction in the cost reserve made for the closing
costs of the Sittingbourne mill was included as a positive
non-recurring item in operating profit for the previous quarter.
The operating result excluding non-recurring items was weaker
compared to the previous quarter due to Christmas stoppages, a
further increase in the price of wood, temporary disturbances of pulp
production, and the weaker U.S. dollar and the British pound.
The volume of paper deliveries in October-December totalled 980,000
tonnes (975,000). Production was curtailed by 50,000 tonnes in line
with demand (60,000). Paperboard deliveries amounted to 289,000
tonnes (297,000) and production curtailments to 18,000 tonnes (0).
Financing income and expenses in the review period totalled EUR -40
million (-41). Increase in the net interest and other financing
expenses resulted from a raised market interest rate and the
downgrading of credit rating and, in addition, the positive exchange
rate differences compared to the review period. Foreign exchange
gains and losses from accounts receivable, accounts payable,
financial income and expenses and the valuation of currency hedging
were EUR 2 million (-2). Net interest and other financing expenses
stood at EUR -42 million (-39). Other financing expenses include
gains from the unwinding of interest rate hedging and loss from the
valuation of interest rate EUR -3 million (6).
The result from continuing operations before taxes was EUR -288
million (4). The result from continuing operations before taxes,
excluding non-recurring items, totalled EUR -49 million (-3). Income
taxes, including the change in deferred tax liabilities, were EUR 39
million (-9).
Earnings per share were EUR -0.58 (-0.02). Excluding non-recurring
items, earnings per share from continuing operations were EUR -0.07
(-0.04). Return on equity was -53.0 per cent (-2.3), and -0.4 per
cent (-0.9) excluding non-recurring items. The return on capital
employed was -24.4 per cent (4.4), and -0.3 per cent (3.7) excluding
non-recurring items.
Personnel
On 31 December, 2007 the company had 9,508 employees (31 December
2006: 14,125), of which 3,390 (4,220) worked in Finland. Divestments
accounted for a reduction of 3,364 employees, of which Map Merchant
accounted for 2,400 employees. In 2007, the personnel figures include
30 per cent of Metsä-Botnia's personnel and 2006, 39 per cent.
Investment
Gross capital expenditure in 2007 totalled EUR 259 million (2006:
428). This includes a EUR 122 million share of Metsä-Botnia's capital
expenditure (222), based on M-real's ownership, which in 2007
amounted to 30 per cent and in 2006 to 39 per cent.
Metsä-Botnia's pulp mill in Uruguay has started up successfully in
November 2007. The mill is one of the world's most cost-efficient
chemical pulp mills.
Structural change
As part of the restructuring programme that was concluded in
November, M-real sold assets worth about EUR 700 million, and the EUR
500 million target set in the programme was clearly exceeded.
In January 2007, M-real sold nine per cent of Metsä-Botnia's shares
to Metsäliitto Cooperative for EUR 240 million, posting a gain of EUR
135 million. The Sittingbourne fine paper mill in Britain was closed
at the end of January and fine paper machines 6 and 7 in Gohrsmühle
were shut down at the end of February. The Wifsta fine paper mill in
Sweden was closed down in July. A total of about one-third of the
production of the closed down machines has been transferred to M
real's other machines. EUR 76 million relating to these closures was
recognised as an expense in the 2006 financial statements, and a net
cost provision of EUR 20 million was booked in 2007 to complete the
closures. The impact of the closures on cash flow is about EUR -55
million, of which EUR -40 million is realised in 2008-2015. The cash
flow effect of the sale of the New Thames mill announced on 1
February, 2008 has not been taken into account, and that will
decrease the future cash costs resulting from the closure of the
Sittingbourne mill by about EUR 35 million.
The statutory negotiations related to the restructuring programme for
operations in Finland were completed during the summer. The
programme's overall impact on staff is approximately 500 person work
years. The talks also agreed on changes in vacancies and on other
enhancement measures, which will decrease the need for temporary
employees and holiday replacements by some 100 person work years.
The actions decided on and already implemented will achieve annual
cost improvements of about EUR 40 million in the Finnish operations
with full effect from the beginning of 2009. Non-recurring costs of
about EUR 11 million resulting from the programme were recognised
during the second quarter. The sum includes a write-down of about EUR
2 million on the fixed assets. Tako board mill's board machine line
2, with an annual capacity of 70,000 tonnes, was closed in July. Most
of the production has been transferred to other machines in the
Consumer Packaging business area.
At the turn of May and June, respectively, M-real sold Tako Carton
Plant Ltd to the Finnish Pyroll Oy and M-real Petöfi Nyomda Kft to
the German STI Group, and in December M-real sold M-real Meulemans
S.A.'s carton plant to the French Autajon Group. The transactions
have a slight negative impact on operating profit excluding
non-recurring items during the current year. As a result of these
divestments, annual net sales decreased by about EUR 80 million, and
the number of personnel fell by about 820.
In July, M-real agreed on the sale of paper merchant Map Merchant
Holdings BV and its subsidiaries to the French Antalis International
SAS. Approval from the competition authorities was obtained in
October, and the transaction was carried out and entered into force
on 31 October 2007. The total value of the transaction including debt
and pension liabilities is EUR 382 million.
In July, M-real exercised its contractual purchase option and bought
the Kyröskoski gas combi power plant and the land on which the
Kyröskoski mills are located for about EUR 13 million.
In October, M-real announced agreement on the sale of its Zanders
Reflex mill manufacturing fine paper located in Düren, Germany, to
the French Arjowiggins Group. M-real will book a loss of
approximately EUR 20 million from the transaction. The transaction
will not have any material impact on M-real's operating profit
excluding non-recurring items. The transaction is expected to be
completed during the first half of 2008. The transaction is subject
to approval by the competition authorities.
On 13 November 2007, M-real announced the launch of a new profit
improvement and business concept simplification programme. The new
programme includes planned closures of the BCTMP mill at Lielahti and
paper machine 2 at Kangas manufacturing coated magazine paper, the
combination of the Publishing and Consumer Printing business areas
into the new Graphic Papers business area, and the streamlining of
the coated magazine paper operations and the sales and marketing
organisation. As part of the programme, M-real announced it is also
prepared to take other measures, such as capacity cuts, if they are
required by changes in the business environment. The aggregate annual
profit improvement target of the programme is EUR 100 million by the
end of 2009.
Financing
At the end of 2007, the equity ratio stood at 32.1 per cent (30.9 on
31 December 2006), and gearing at 112 per cent (126). In some of
M-real's financing arrangements, a limit of 120 per cent has been set
for gearing and a limit of 30 per cent for the equity ratio. At the
end of the year, gearing calculated in the manner defined in the
financing agreements was approximately 95 per cent (111) and the
equity ratio about 37 per cent (36).
Interest-bearing net debt stood at EUR 1,867 million at the end of
the year (2,403). Foreign-currency-denominated loans accounted for 11
per cent of long-term loans. Of these, 88 per cent were variable rate
loans, and the rest were fixed-rate loans. At the end of 2007, the
average interest rate on loans was 7.4 per cent and the average
maturity of long-term loans was 3.4 years. At the end of the year,
the interest rate maturity of the loans was 5.8 months. During the
year, the interest rate maturity has varied between five and eight
months.
Cash flows from operating activities amounted to EUR 325 million
(367). Working capital decreased by EUR 42 million (EUR 57 million).
At the end of the year under review, an average of five months of net
foreign exchange exposure was hedged. The level of hedging has varied
between five and seven months during the period. Approximately 99 per
cent of non-euro-denominated equity was hedged at the end of the
period under review.
Liquidity is at a good level. At the end of the period under review,
liquidity was EUR 1,233 million, of which EUR 853 million consisted
of binding long-term credit commitments and EUR 380 million of liquid
assets and investments. To meet its short-term financing needs, the
company also had at its disposal non-binding domestic and foreign
commercial paper programmes and credit facilities amounting to about
EUR 575 million.
In March, Moody's Investors Service downgraded M-real's credit rating
from B2 to B3. Moody's revised M-real's rating outlook to stable from
negative. Standard & Poor's downgraded M-real's credit rating from B+
to B, and maintained the negative rating outlook.
In October, Standard & Poor's downgraded M-real's credit rating from
B to B-. Standard and Poor's revised M-real's rating outlook to
stable from negative.
Shares
In 2007, the highest price of M-real's B share on the OMX Nordic
Stock Exchange Helsinki was EUR 5.94, the lowest price was EUR 2.96,
and the average price was EUR 4.56. At the end of the year, the price
of the B share was EUR 3.25. The average price in 2006 was EUR 4.41.
The closing price for 2006 was EUR 4.79.
During the year under review, the trading volume of the B share was
EUR 2,349 million, or 175 per cent of the share capital. The market
value of the A and B shares totalled EUR 1,070 million at the end of
the year. At the end of 2007, Metsäliitto Cooperative owned 38.6 per
cent of the shares, and the voting rights conferred by these shares
was 60.5 per cent. Foreign shareholders owned about 41 per cent of
the shares.
On 13 March 2007, the Annual General Meeting authorised the Board of
Directors, for an undefined term, to decide on one or more equity
issues and/or one or more issues of convertible bonds, pursuant to
chapter 10 of the Limited Liability Companies Act, in such a way that
in the equity issue or issue of convertible bonds, a maximum of
58,365,212 new M-real Corporation B shares with a nominal value of
EUR 1.70 can be subscribed for and the company's share capital can be
increased by a maximum of EUR 99,220,860.40. The authorisation
includes the right to deviate from the shareholders' pre-emptive
right to subscribe for new shares and/or convertible bonds and to
decide on subscription prices and other terms and conditions. It is
possible to deviate from the shareholders' pre-emptive subscription
rights providing that there is a significant financial reason for the
company to do so, such as strengthening the company's balance sheet,
enabling business restructuring or developing the company's
operations in another way.
Consideration of the result for the financial year and dividend
The distributable funds of the parent company as at 31 December 2007
were EUR 251.100.872,07 of which the result for the financial year is
EUR -49.279.052,47.
The Board of Directors has in its meeting on 6 February 2008 decided
to propose to the Annual General Meeting, to be held on 13 March
2008, that a dividend of EUR 0.06 per share, EUR 19,7 million total
be paid for the financial year 2007. The dividend will be paid to
shareholders who on the record date, 18 March 2008, have been entered
in the company's Shareholders Register kept by the Finnish Central
Securities Depository Ltd. The Board of Directors proposes to the
Annual General Meeting that the dividend be paid on 27 March 2008.
For 2006, paid divided per share was EUR 0.06, in total EUR 19,7
million.
Board of Directors and Auditors
The Annual General Meeting in 2007 elected the following persons to
M-real's Board of Directors: Mr Heikki Asunmaa,Counsellor of Forest
Economy; Mr Kim Gran, President of Nokian Tyres plc; Mr Kari Jordan,
President and CEO of Metsäliitto Group; Mr Erkki Karmila, LL.M.; Mr
Runar Lillandt, Counsellor of Agriculture; Mr Juha Niemelä, Honorary
Counsellor; Mr Antti Tanskanen, Minister; and Mr Arimo Uusitalo,
Counsellor of Agriculture. The term of office of Board members
continues until the end of the next Annual General Meeting. At its
organising meeting, the Board of Directors elected Mr Kari Jordan as
Chairman and Mr Arimo Uusitalo as Vice Chairman.
Mr Göran Lindell, APA, and PricewaterhouseCoopers Oy, a firm of
authorised public accountants, were elected as M-real's auditors,
with Mr Johan Kronberg, APA, as principal auditor and Mr Jouko
Malinen, APA, and Mr Markku Marjomaa, APA, as deputy auditors. The
term of office of auditors and deputy auditors continues until the
end of the next Annual General Meeting.
Events after the review period
On 6 February 2008 M-real announced an additional divestment target
of about EUR 200, which will be pursued during next 12 months. The
target includes the sale of the New Thames mill announced in the
beginning of February 2008.
In February, 2008 M-real made an agreement to sell its New Thames
office paper mill located in Kemsley, UK, to DS Smith Plc. The debt
free sales price was GBP 60 million (about EUR 80 million). Taking
the uncovered pension liabilities of M-real's UK mill operations into
consideration, it is estimated that the transaction will have a
positive impact of about EUR 60 million on cash flow, of which about
EUR 40 million will arise when the transaction is completed and about
EUR 20 million in the following 12 months. In addition, M-real will
be freed from about EUR 35 million pension liabilities and other
closure costs previously provided for the period 2008-2015 related to
the closure of the Sittingbourne mill. No significant capital gain or
loss is expected to arise from the transaction. The impact of the
pension liabilities and the final result and cash-flow effect of the
transaction will be clear by the end of the first half of 2008. The
transaction has no significant impact on M-real's operating profit
excluding non-recurring items. The sale will be booked in the result
for the first quarter of 2008. The transaction is subject to approval
by the competition authorities.
Wood supply
Russian export duties and the EU's new targets for the use of
bioenergy will have a crucial impact on the development of the wood
market. During the last quarter, wood supply remained tight due to
the second consecutive unusually mild winter. Nevertheless, so far it
has been possible to ensure the supply of wood to mills without
significant disruptions. If the situation does not improve,
production stoppages cannot be avoided and risk for increases in the
price of pulpwood will grow.
Near-term outlook
During the first quarter of 2008, seasonal demand for M-real's main
products is expected to improve somewhat. At the beginning of the
year, average operating rates are very high. Measures are under way
to increase prices of coated magazine paper and folding boxboard.
Increases in fine paper prices are also being sought actively.
The market balance will improve due to the capacity closures already
carried out and additional closures to be implemented in 2008. There
is a great need to boost the product prices of all paper grades.
M-real's target is to cover most of the cost increases by own profit
improvement actions. Costs will remain high or even continue to
increase. The largest increases are expected in the costs of wood and
energy. In addition to the profit improvement measures already
announced, new measures will be started to cover the increasing
number of rising cost items.
M-real's share of the production of Metsä-Botnia''s pulp mill in
Uruguay will be used in M-real's own fine paper mills in Central
Europe. The first paper production runs using pulp imported from
Uruguay were carried out in January. The use of pulp from Uruguay
instead of externally purchased pulp will improve M-real's
profitability significantly.
The implementation of the profit improvement and business concept
simplification programme announced in November 2007, the fourth stage
in M-real's strategy review, is progressing according to plan. The
strategy review continues.
The operating result excluding non-recurring items in the first
quarter of 2008 is expected to be better than in the last quarter of
2007 but to fall short of the operating result in the first quarter
of 2007 due to further increased wood costs.
Near-term business risks
If the uncertainty in the US economy continues for a longer period,
it could spread worldwide and affect the operational preconditions of
paper and paperboard industry.
Because the forward-looking estimates and statements of this
financial statements release are based on current plans and
estimates, they contain risks and other uncertain factors which may
lead the results to differ from the statements concerning them. In
the short term, M-real's result will be influenced in particular by
the price of, and demand for, finished products, the availability and
price of wood, other raw material costs, the price of energy, and the
exchange rate of the U.S. dollar. More information about longer-term
risk factors can be found on page 25 of M-real's 2006 Annual Report.
M-REAL CORPORATION
Further information:
Seppo Parvi, CFO, tel. +358 10 465 4321
Anne-Mari Achrén, Communications, tel. +358 10 465 4541
Consumer Packaging
+-------------------------------------------------------------------+
| | 2007 | 2006 | 2007 | 2007 | 2007 | 2007 | 2006 |
|----------------+-------+-------+------+------+------+------+------|
| | | | Q4 | Q3 | Q2 | Q1 | Q4 |
|----------------+-------+-------+------+------+------+------+------|
| Sales, MEUR | 934 | 971 | 225 | 231 | 243 | 235 | 241 |
|----------------+-------+-------+------+------+------+------+------|
| EBITDA, MEUR | 136 | 131 | 24 | 45 | 28 | 39 | 25 |
|----------------+-------+-------+------+------+------+------+------|
| excl. | | | | | | | |
| non-recurring | | | | | | | |
| items | 142 | 131 | 25 | 45 | 33 | 39 | 25 |
|----------------+-------+-------+------+------+------+------+------|
| Operating | | | | | | | |
| profit, MEUR | 56 | 43 | 0 | 27 | 8 | 21 | 0 |
|----------------+-------+-------+------+------+------+------+------|
| excl. | | | | | | | |
| non-recurring | | | | | | | |
| items | 71 | 47 | 8 | 27 | 15 | 21 | 4 |
|----------------+-------+-------+------+------+------+------+------|
| Return on | | | | | | | |
| capital | | | | | | | |
| employed, % | 7.5 | 5.1 | 0.1 | 15.3 | 4.1 | 10.9 | 0.3 |
|----------------+-------+-------+------+------+------+------+------|
| excl. | | | | | | | |
| non-recurring | | | | | | | |
| items, % | 9.5 | 5.6 | 4.3 | 15.3 | 7.9 | 10.9 | 2.1 |
|----------------+-------+-------+------+------+------+------+------|
| Deliveries, | | | | | | | |
| 1,000 t | 1,203 | 1,161 | 291 | 297 | 313 | 302 | 288 |
|----------------+-------+-------+------+------+------+------+------|
| Board | | | | | | | |
| production, | | | | | | | |
| 1,000 t | 1,210 | 1,121 | 294 | 303 | 302 | 311 | 279 |
|-------------------------------------------------------------------|
| EBITDA = Earnings before interest, taxes, depreciation and |
| amortization |
+-------------------------------------------------------------------+
The year 2007 compared with the previous year
In 2007, the operating profit excluding non-recurring items of the
Consumer Packaging business area was EUR 71 million (2006: 47).
Compared with the previous year, profitability was improved mainly by
higher delivery volumes and cost saving measures and weakened by
higher wood costs and the weaker U.S. dollar. The previous year's
result was weakened by the investment stoppage at the Simpele mill.
In addition, net non-recurring items of EUR -15 million were
recognised in operating profit in 2007, of which EUR 5 million were
cost provisions and EUR 13 million write-downs of fixed assets
connected to profit improvement programmes, as well as a EUR 3
million reversal of an impairment loss.
Deliveries by Western European folding boxboard producers increased
by 5 per cent year-on-year. M-real's deliveries increased by 6 per
cent compared to the previous year. The euro-denominated selling
price of folding boxboard was slightly lower than in the previous
year due to the weaker U.S. dollar.
The delivery volume of linerboard was 6 per cent higher than in the
previous year. The average euro-denominated price remained at the
same level as in the previous year. Both the delivery volume and
selling price of wallpaper base paper increased clearly from the
previous year.
Starting from the beginning of 2007, the sold carton plants in
Finland, Hungary and Belgium have been reported under Other
Operations. Business area's comparable delivery volume increased by 6
per cent compared to 2006.
The fourth quarter compared with the previous quarter
Consumer Packaging's operating profit excluding non-recurring items
decreased from the previous quarter and stood at EUR 8 million
(Q3/07: 27). The result was weakened by Christmas stoppages, lower
delivery volumes and wood costs that continued to rise.
In addition, net non-recurring items of EUR -8 million were
recognised in the operating profit for the fourth quarter, consisting
of EUR 11 million in write-downs of fixed assets connected to the
profit improvement programme announced on 13 November 2007 and a
positive item of a EUR 3 million reversal of an impairment loss.
Deliveries by Western European folding boxboard producers decreased
by 2 per cent compared with the previous quarter. M-real's folding
boxboard deliveries decreased by 7 per cent.
The delivery volume of linerboard was 3 per cent higher than in the
previous quarter. The euro-denominated selling price decreased
slightly due to the weaker U.S. dollar.
Graphic Papers
+--------------------------------------------------------------------+
| | 2007| 2006| 2007| 2007| 2007|2007| 2006|
|------------------------+------+------+------+-----+-----+----+-----|
| | | | Q4| Q3| Q2| Q1| Q4|
|------------------------+------+------+------+-----+-----+----+-----|
|Sales, MEUR | 2,268| 2,390| 569| 574| 548| 577| 588|
|------------------------+------+------+------+-----+-----+----+-----|
|EBITDA, MEUR | 120| 93| 10| 52| 31| 27| -10|
|------------------------+------+------+------+-----+-----+----+-----|
| excl. non-recurring | | | | | | | |
|items | 142| 187| 20| 48| 33| 41| 41|
|------------------------+------+------+------+-----+-----+----+-----|
|Operating profit, MEUR | -81| -212| -71| 16| -12| -14| -176|
|------------------------+------+------+------+-----+-----+----+-----|
| excl. non-recurring | | | | | | | |
|items | -23| 4| -22| 8| -9| 0| -3|
|------------------------+------+------+------+-----+-----+----+-----|
|Return on capital | | | | | | | |
|employed, % | -3.9| -9.5| -14.1| 3.2| -2.1|-2.5|-31.6|
|------------------------+------+------+------+-----+-----+----+-----|
| excl. non-recurring | | | | | | | |
|items, % | -0.9| 0.3| -4.1| 1.7| -1.6| 0.2| -0.3|
|------------------------+------+------+------+-----+-----+----+-----|
|Deliveries, 1,000 t | 3,002| 3,153| 761| 760| 724| 757| 778|
|------------------------+------+------+------+-----+-----+----+-----|
|Production, 1,000 t | 2,962| 3,090| 736| 752| 735| 739| 747|
|--------------------------------------------------------------------|
|EBITDA = Earnings before interest, taxes, depreciation and |
|amortization |
+--------------------------------------------------------------------+
The year 2007 compared with the previous year
In 2007, the operating profit excluding non-recurring items of the
Graphic Papers business area was EUR -23 million (2006: 4). The
decrease in the price of magazine paper had a negative effect on
profitability. In addition, the weaker U.S. dollar and higher wood
costs had a negative effect on the profitability of the magazine
paper and fine paper businesses. Profitability was boosted by
measures carried out to improve efficiency as well as disposals of
loss-making operations.
In addition, net non-recurring items of EUR -58 million were
recognised in operating profit for 2007, comprising EUR 22 million in
net cost provisions connected to the closure of the Sittingbourne
mill and profit improvement programmes, and EUR 36 million in
write-downs of fixed assets.
Total deliveries by European producers of coated fine paper increased
by 1 per cent in 2007 and total deliveries by European producers of
coated magazine paper by 2 per cent compared with the previous year.
The fourth quarter compared with the previous quarter
Graphic Paper's operating profit excluding non-recurring items was
EUR -22 million in the fourth quarter (Q3/07: 8). Operating profit
was weakened by slightly lower selling prices of coated fine paper
and coated magazine paper, the weaker U.S. dollar, wood costs that
continued to rise, and Christmas stoppages.
In addition, net non-recurring items of EUR -49 million were
recognised in operating profit for the fourth quarter, comprising EUR
10 million in cost provision connected to profit improvement
programmes and EUR 39 million in write-downs of fixed assets.
Total deliveries by European producers of coated fine paper increased
by 3 per cent from the previous quarter, and total deliveries by
European producers of coated magazine paper increased by 6 per cent.
Total deliveries of M-real's Graphic Papers business area were on par
with the previous quarter.
Office Papers
+---------------------------------------------------------------------+
| | 2007| 2006| 2007| 2007| 2007| 2007| 2006|
|---------------+-------+-------+--------+------+------+-------+------|
| | | | Q4| Q3| Q2| Q1| Q4|
|---------------+-------+-------+--------+------+------+-------+------|
|Sales, MEUR | 723| 727| 171| 167| 183| 202| 189|
|---------------+-------+-------+--------+------+------+-------+------|
|EBITDA, MEUR | 53| 59| 25| 21| 15| -8| 26|
|---------------+-------+-------+--------+------+------+-------+------|
| excl. | | | | | | | |
|non-recurring | | | | | | | |
| items | 78| 69| 20| 21| 15| 22| 26|
|---------------+-------+-------+--------+------+------+-------+------|
|Operating | | | | | | | |
|profit, MEUR | -187| -18| -173| 7| 1| -22| -4|
|---------------+-------+-------+--------+------+------+-------+------|
| excl. | | | | | | | |
|non-recurring | | | | | | | |
| items | 23| 7| 7| 7| 1| 8| 11|
|---------------+-------+-------+--------+------+------+-------+------|
|Return on | | | | | | | |
|capital | | | | | | | |
| employed, % | -29,6| -2,3| -114,8| 4,9| 0,6| -12,0| -1,9|
|---------------+-------+-------+--------+------+------+-------+------|
| excl. | | | | | | | |
|non-recurring | | | | | | | |
| items, % | 4,2| 1,1| 5,3| 4,9| 0,6| 5,0| 6,0|
|---------------+-------+-------+--------+------+------+-------+------|
|Deliveries, | | | | | | | |
|1,000 t | 947| 1,039| 219| 215| 241| 272| 264|
|---------------+-------+-------+--------+------+------+-------+------|
|Production, | | | | | | | |
|1,000 t | 973| 1,028| 213| 223| 257| 280| 253|
|---------------------------------------------------------------------|
|EBITDA = Earnings before interest, taxes, depreciation and |
|amortization |
+---------------------------------------------------------------------+
The year 2007 compared with the previous year
In 2007, the operating profit excluding non-recurring items of the
Office Papers business area was EUR 23 million (2006: 7).
Profitability was boosted in particular by the increase in the
average selling price of about 9 per cent. Increased raw material
costs, especially wood costs, had a negative effect on the results. A
significant part of the increase in M-real's wood costs affects the
Office Papers business area.
In addition, net non-recurring items of EUR -210 million were
recognised in operating profit for 2007, which comprised EUR 185
million in impairment losses, a EUR 30 million cost provision for the
completion of the closure of the Wifsta mill, EUR 8 million in cost
provisions connected to profit improvement programmes and reduction
of EUR 13 million in the provision for the closure of the Wifsta
mill.
Demand for uncoated fine paper was weak during the second half of the
year. Total deliveries by European fine paper producers in 2007
decreased by 3 per cent year-on-year. The delivery volume of the
Office Papers business area decreased by 9 per cent. The figure
includes the effect of the closure of the Wifsta mill.
The fourth quarter compared with the previous quarter
The business area's operating profit excluding non-recurring items
was EUR 7 million in the fourth quarter (Q3/07: 7). Operating profit
was boosted somewhat by higher delivery volumes and weakened by wood
costs which continued to rise. The average selling price was on a par
with the previous quarter.
In addition, net non-recurring items of EUR -180 million were
recognised in operating profit for the fourth quarter, which
comprised EUR 185 million in impairment losses, EUR 8 million in cost
provisions connected to profit improvement programmes, and a positive
item of a EUR 13 million capital gain from the sale of assets taken
out of use.
Total deliveries by European producers of uncoated fine paper were up
2 per cent. The delivery volume of the Office Papers business area
increased by 2 per cent.
The financial statements are unaudited.
Condensed consolidated
income statement
MEUR 2007 2006 Change Q4/07
Continuing operations
Sales 4,440 4,604 -164 1,085
Other operating income 239 112 127 27
Operating expenses -4,235 -4,444 209 -1,042
Depreciation and impairment
losses -564 -501 -63 -315
Operating profit -120 -229 109 -245
% of sales -2,7 -5,0 -22,6
Share of results in associated
companies -3 0 -3 -3
Exchange gains and losses -3 -1 -2 2
Other net financial items -147 -121 -26 -42
Result before taxes from continuing
operations -273 -351 78 -288
% of sales -6.1 -7.6 -26.5
Income taxes 23 11 12 39
Result for the period from continuing
operations -250 -340 90 -249
% of sales -5.6 -7.4 -22.9
Result from discontinued operations
55 -59 114 57
Result for the period -195 -399 204 -192
Attributable to
Shareholders of parent company -194 -396 -192
Minority interest -1 -3 0
Earnings per share for result
attributable to shareholders of
parent company (EUR/share)
from continuing operations -0.76 -1.03 -0.75
from discontinued operations 0.17 -0.18 0.17
Total -0.59 -1.21 -0.58
Taxes include taxes corresponding to the result for the period under
review.
Condensed consolidated balance sheet
31.12. % 31.12. %
MEUR 2007 2006
Assets
Non-current assets
Goodwill 172 3.3 376 6.1
Other intangible assets 38 0.7 62 1.0
Tangible assets 2,820 54.3 3,156 51.1
Biological assets 47 0.9 52 0.8
Shares in associated
and other companies 103 2.0 109 1.8
Interest-bearing receivables 27 0.5 34 0.6
Deferred tax receivables 4 0.1 31 0.5
Other non-interest-bearing
receivables 14 0.3 18 0.3
3,225 62.1 3,838 62.2
Current assets
Inventories 619 11.9 676 11.0
Interest bearing receivables 62 1.2 163 2.6
Non-interest-bearing receivables 908 17.5 1,210 19.6
Cash and cash equivalents 380 7.3 182 2.9
1,969 37.9 2,231 36.1
Assets classified as held for sale 103 1.7
Total assets 5,194 100 6,172 100
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Equity attributable to
shareholders of parent company 1,618 31.2 1,843 29.9
Minority interest 52 1.0 63 1.0
1,670 32.2 1,906 30.9
Non-current liabilities
Deferred tax liabilities 215 4.1 284 4.6
Post-employment benefit obligations 159 3.1 199 3.2
Provisions 72 1.4 79 1.3
Other non-interest-bearing liabilities 38 0.7 28 0.5
Interest-bearing liabilities 1,883 36.3 2,182 35.4
2,367 45.6 2,772 45.0
Current liabilities
Non-interest-bearing liabilities 704 13.5 865 14.0
Interest-bearing liabilities 453 8.7 599 9.7
1,157 22.2 1,464 23.7
Liabilities relating to assets
classified as held for sale 30 0.4
Total liabilities 3,524 67.8 4,266 69.1
Total shareholders' equity
and liabilities 5,194 100 6,172 100
Condensed consolidated cash flow statement
MEUR 2007 2006 Q4/07
Result for the period -196 -399 -193
Total adjustments 479 709 216
Change in working capital 42 57 74
Cash flow arising from operations 325 367 97
Net financial items -160 -113 -72
Income taxes paid -38 -32 -6
Net cash flow arising from
operating activities 127 222 19
Investments in tangible and
intangible assets -259 -428 -81
Divestments of assets and other 628 28 396
Net cash flow arising from
investing activities 369 -400 315
Share issue, minority interest 6 31 3
Changes in long-term loans and
other financial items -282 259 -84
Dividends paid -20 -39 0
Net cash flow arising from
financing activities -296 251 -81
Changes in cash and
cash equivalents 200 73 253
Cash and cash equivalents at
beginning of period 182 112 128
Translation difference in cash and
cash equivalents -2 -2 -1
Changes in cash and cash equivalents 200 73 253
Assets held for sale, folding carton plants 0 -1 0
Cash and cash equivalents
at end of period 380 182 380
Statement of changes in shareholders' equity
Fair
value
Trans- and Re- Mi-
Share lation other tained nority
Share pre- dif- re- earn- inter-
MEUR capital mium ference serves ings est Total
Shareholders' equity
1.1.2006, IFRS 558 667 6 0 1 040 45 2,316
Translation
differences -3 -3
Currency flow
hedges,
recorded in equity 16 16
transferred to
income statement's
sales 2 2
Interest flow hedges
recorded in equity 3 3
Commodity hedges
recorded in equity -8 -8
Tax on equity
components -3 -3
Net expenses
recognised directly
in equity -3 10 7
Loss for the period -396 -3 -399
Total recognised
income
and expenses for the
period -3 10 -396 -3 -392
Related party
transactions
Changes in minority
interest
Metsä-Botnia
restructuring in
Uruguay 22 22
Dividends paid -39 -1 -40
Related party
transactions -39 21 -18
Shareholders' equity
31.12.2006, IFRS 558 667 3 10 605 63 1,906
Shareholders' equity
1.1.2007, IFRS 558 667 3 10 605 63 1,906
Translation differences -34 -3 -37
Net investment hedge 28 28
Currency flow hedges,
recorded in equity 8 8
transferred to income statement's
sales -22 -22
Interest flow hedges
recorded in equity 0 0 0
transferred income statement's
financial items 0 0 0
Commodity hedges
recorded in equity 9 9
transferred income statement's
purchases 9 9
Tax on equity components -8 -1 -9
Net expenses recognised directly in
equity -14 3 -3 -14
Loss for the period -194 -1 -195
Total recognised income
and expenses for the period -14 3 -194 -4 -209
Related party transactions
Changes in minority interest
Sale of Metsä-Botnia
shares (9%) -11
Metsä-Botnia
restructuring in Uruguay 5
-6 -6
Dividends paid -20 -1 -21
Related party transactions -20 -7 -27
Shareholders' equity
31.12.2007, IFRS 558 667 -11 13 391 52 1,670
Key ratios 2007 2006 Q4/07
Sales, MEUR 4,440 4,604 1,085
EBITDA, MEUR 444 272 70
excl. non-recurring items, MEUR 366 378 78
Operating profit, MEUR -120 -229 -245
excl. non-recurring items, MEUR 49 18 -6
Result from continuing operations before taxes,
MEUR -273 -351 -288
excl. non-recurring items, MEUR -104 -104 -49
Result for the period from continuing operations,
MEUR -250 -340 -249
Earnings per share, EUR -0.59 -1.21 -0.58
excl. non-recurring items, EUR -0.76 -1.03 -0.75
from discontinued operations, EUR 0.17 -0.18 0.17
from continuing operations excl. non-recurring
items, EUR -0.32 -0.29 -0.07
Return on equity, % -14.0 -16.8 -53.0
excl. non-recurring items, % -5.9 -5.3 -0.4
Return on capital employed, % -2.6 -4.7 -24.4
excl. non-recurring items, % 1.4 0.9 -0.3
Equity ratio at end of period, % 32.1 30.9 32.1
Gearing at end of period, % 112 126 112
Shareholders' equity per share at end of period,
EUR 4.93 5.62 4.93
Net interest-bearing liabilities
at end of period, MEUR 1,867 2,403 1,867
Gross capital expenditure, MEUR 259 428 81
Paper deliveries, 1,000 t 3,949 4,192, 980
Board deliveries, 1,000 t 1,203 1,161 291
Personnel at end of period 9,508 14,125 9,508
EBITDA = Earnings before interest, taxes, depreciation and
amortization
Securities and guarantees, MEUR 2007 2006
For own liabilities 61 77
On behalf of associated companies 1 1
On behalf of Group companies 4 5
On behalf of others 3 3
Total 69 86
Open derivative contracts, MEUR 2007 2006
Interest rate derivatives 1,954 2,828
Foreign exchange derivatives 3,809 4,747
Other derivatives 133 152
Total 5,896 7,727
The fair value of open derivative contracts calculated at market
value was EUR 14.7 million at the end of the review year (EUR -8.3
million 31 December 2006).
The gross amount of open contracts also includes closed contracts,
totalling EUR 2,713.9 million (31 December 2006: EUR 3,664.0
million).
Commitments related to fixed assets,
MEUR 2007 2006
Payments in less than a year 22 146
Payments later 4 16
Changes in property,
plant and equipment, MEUR 2007 2006
Carrying value at beginning of period 3,156 3,178
Capital expenditure 250 456
Decrease -186 -82
Assets classified as held for sale 0 -28
Depreciation and impairment losses -346 -385
Translation difference -54 17
Carrying value at end of period 2,820 3,156
Related-party transactions, MEUR 2007 2006
Transactions with parent company
and sister companies
Sales 34 35
Other operating income 138 3
Purchases 549 491
Interest income 3 7
Interest expenses 8 13
Non-current receivables 19 21
Current receivables 41 183
Non-current liabilities 1 1
Current liabilities 149 362
Transactions
with associated companies
Sales 0 0
Purchases 4 4
Non-current receivables 0 7
Current receivables 7 3
Current liabilities 3 3
Accounting policies
The financial statements release was prepared in accordance with the
IAS 34 standard Interim Financial Reporting and the accounting
policies presented in M-real Annual Report 2006.
The figures in the financial statement release are unaudited.
Taxes include taxes corresponding to the result for the period under
review.
New and changed standards
IFRS 7 Financial instruments: Disclosures and a complementary
amendment to IAS 1 Presentation of Financial Statements - Capital
Disclosures, effective for annual periods beginning on or after 1
January 2007. IFRS 7 introduces new disclosure to improve the
information about the financial instruments in the notes to the
financial statements, but has no effect on classification or
valuation of the financial instruments.
Calculation of key ratios
Return on equity (%) = (Profit from continuing operations before
tax - direct taxes) per
(Total equity (average))
Return on capital = (Profit from continuing operations before
employed (%) tax + interest expenses, net
exchange gains/losses and other financial
expenses) per
(Total assets - non-interest-bearing
liabilities (average))
Equity ratio (%) = (Total equity) per
(Total assets - advance payments received)
Gearing ratio (%) = (Interest-bearing liabilities - liquid
funds - interest-bearing receivables) per
(Total equity)
Earnings per share = (Profit attributable to shareholders of
parent company) per
(Adjusted number of shares (average))
Shareholders' equity per = (Equity attributable to shareholders of
share parent company) per
(Adjusted number of shares at end of
review period)
Quarterly information
Sales and result
by segment, MEUR 2007 2006 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Consumer Packaging 934 971 225 231 243 235 241 236
Graphic Papers 2,268 2,390 569 574 548 577 588 586
Office Papers 723 727 171 167 183 202 189 181
Internal sales and
other operations 515 516 120 130 122 143 163 115
Sales 4,440 4,604 1,085 1,102 1,096 1,157 1,181 1,118
Consumer Packaging 136 131 24 45 28 39 25 38
Graphic Papers 120 93 10 52 31 27 -10 50
Office Papers 53 59 25 21 15 -8 26 15
Other operations 135 -11 11 -2 -8 135 2 -2
EBITDA 444 272 70 116 66 193 45 100
% of sales 10.0 5.9 6.5 10.5 6.0 16.7 3.8 8.9
Consumer Packaging 56 43 0 27 8 21 0 17
Graphic Papers -81 -212 -71 16 -12 -14 -176 4
Office Papers -187 -18 -173 7 1 -22 -4 -1
Other operations 92 -42 -1 -7 -12 112 -7 -8
Operating profit -120 -229 -245 43 -15 97 -187 12
% of sales -2.7 -5.0 -22.6 3.9 -1.4 8.4 -15.8 1.1
Share of results in
associated companies -3 0 -3 1 -1 0 0 1
Exchange gains and
losses -3 -1 2 -2 2 -5 -5 -1
Other net financial
items -147 -121 -42 -38 -30 -37 -36 -34
Result from
continuing
operations before tax -273 -351 -288 4 -44 55 -228 -22
Income taxes 23 11 39 -9 -4 -3 23 -10
Result for the period
from continuing
operations -250 -340 -249 -5 -48 52 -205 -32
Result for period
from
discontinued
operations 55 -59 57 -3 -1 2 -61 -2
Result for the period -195 -399 -192 -8 -49 54 -266 -34
Minority interest 1 3 0 1 0 0 1 3
Financial result
attributable to
shareholders of
parent company -194 -396 -192 -7 -49 54 -265 -31
Earnings per share,
EUR -0.59 -1.21 -0.58 -0.02 -0.15 0.16 -0.81 -0.10
Non-recurring items,
MEUR 2007 2006 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Consumer Packaging -15 -4 -8 0 -7 0 -4 0
Graphic Papers -58 -216 -49 7 -2 -14 -173 -2
Office Papers -210 -25 -180 0 0 -30 -15 0
Other operations 114 -2 -2 0 -4 120 1 0
Non-recurring items
in
operating result -169 -247 -239 7 -13 76 -191 -2
Non-recurring items
in
financial items 0 0 0 0 0 0 0 0
Non-recurring items
total -169 -247 -239 7 -13 76 -191 -2
Consumer Packaging 142 131 25 45 33 39 25 38
Graphic Papers 142 187 20 48 33 41 41 52
Office Papers 78 69 20 21 15 22 26 15
Other operations 4 -9 13 -3 -4 -1 2 -2
EBITDA, excl. non-
recurring items 366 378 78 111 77 101 94 103
% of sales 8.2 8.2 7.2 10.0 7.0 8.7 8.0 9.2
Consumer Packaging 71 47 8 27 15 21 4 17
Graphic Papers -23 4 -22 8 -9 0 -3 6
Office Papers 23 7 7 7 1 8 11 -1
Other operations -22 -40 1 -6 -9 -8 -8 -8
Operating profit
excl.
non-recurring items 49 18 -6 36 -2 21 4 14
% of sales 1.1 0.4 -0.6 3.3 -0.2 1.8 0.3 1.3
Result before taxes,
excl. non-recurring
items -104 -104 -49 -3 -31 -21 -37 -20
% of sales -2.3 -1.6 -4.5 -0.2 -2.8 1.8 -3.1 -1.5
Result per share,
excl.
non-recurring items,
EUR -0.32 -0.29 -0.07 -0.03 -0.12 -0.09 -0.05 -0.08
Return on equity,
excl.
non-recurring items,
% -5.9 -5.3 -0.4 -0.9 -2.4 -7.3 -0.9 -1.5
Return on capital
employed, excl. non-
recurring items, % 1.4 0.9 -0.3 3.7 0.2 2.5 1.5 1.9
Return on capital
employed, % 2007 2006 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Consumer Packaging 7.5 5.1 0.1 15.3 4.1 10.9 0.3 7.5
Graphic Papers -3.9 -9.5 -14.1 3.2 -2.1 -2.5 -31.6 0.8
Office Papers -29.6 -2.3 -114.8 4.9 0.6 -12.0 -1.9 -0.2
Continuing operations
total -2.6 -4.7 -24.4 4.4 -1.1 9.7 -16.5 1.7
Capital employed,
MEUR 2007 2006 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Consumer Packaging 731 809 731 742 741 777 809 914
Graphic Papers 1,907 2,109 1,907 2,046 2,042 2,077 2,109 2,303
Office Papers 518 722 518 681 665 669 722 742
Other equity 866 735 866 469 543 519 735 548
Continuing operations
total 4,022 4,376 4,022 3,938 3,991 4,043 4,376 4,507
The capital employed for a segment included its assets: goodwill,
other intangible goods, tangible assets, biological assets,
investments in associates, inventories, accounts receivables,
prepayments and accrued income (excluding interest and taxes), less
the segment's liabilities (accounts payable, advance payments,
accruals and deferred income (excluding interest and taxes).
+-------------------------------------------------+
| Personnel, average | 2007 | 2006 |
|-------------------------------+--------+--------|
| Consumer Packaging | 1,504 | 2,573 |
|-------------------------------+--------+--------|
| Graphic Papers | 5,135 | 5,862 |
|-------------------------------+--------+--------|
| Office Papers | 1,657 | 1,822 |
|-------------------------------+--------+--------|
| Other continuing operations | 2,372 | 2,146 |
|-------------------------------+--------+--------|
| Discontinued operations (Map) | 2,007 | 2,481 |
|-------------------------------+--------+--------|
| Total | 12,675 | 14,884 |
+-------------------------------------------------+
Q4 Q3 Q2 Q1 Q4 Q3
Deliveries, 1,000 t 2007 2006 2007 2007 2007 2007 2006 2006
Consumer Packaging 1,203 1,161 291 297 313 302 288 285
Graphic Papers 3,002 3,153 761 760 724 757 778 772
Office Papers 947 1,039 219 215 241 272 264 258
Paper segments, total 3,949 4,192 980 975 965 1,029 1,041 1,031
+------------------------------------------------------------------------------+
| | | | Q4| Q3| Q2| Q1| Q4| Q3|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Production, | | | | | | | | |
|1,000 t | 2007| 2006| 2007| 2007| 2007| 2007| 2006| 2006|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Consumer | | | | | | | | |
|Packaging | 1,210| 1,121| 294| 303| 302| 311| 279| 273|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Graphic Papers| 2,962| 3,090| 736| 752| 735| 739| 747| 763|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Office Papers | 973| 1,028| 213| 223| 257| 280| 253| 259|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Paper mills, | | | | | | | | |
|total | 3,935| 4,119| 949| 975| 992| 1,019| 1,000| 1,023|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|Metsä-Botnia | | | | | | | | |
|pulp 1) | 841| 983| 235| 203| 200| 203| 255| 243|
|--------------+--------+--------+------+------+------+-------+--------+-------|
|M-real pulp | 1,679| 1,754| 400| 455| 398| 426| 449| 443|
+------------------------------------------------------------------------------+
1) corresponds to M-real's share in Metsä-Botnia (39 % until Q4/06,
30 % as of Q1/07).
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