2007-04-24 11:44:02 CEST
2007-04-24 11:44:02 CEST
REGLAMENTUOJAMA INFORMACIJA
M-real - Quarterly report
M-real s result improved but still negative
M-real Corporation Interim Report, 1 January - 31 March 2007
24.4.2007
Result for the first quarter of 2007
* Sales were EUR 1,432 million (1,441 in Q1/06). Comparable sales
grew by two per cent.
* The operating result excluding non-recurring items was EUR 31
million (35 in Q1/06). The operating result including
non-recurring items was EUR 104 million (35 in Q1/06).
* The result before taxes, excluding non-recurring items, was EUR
-15 million (16 in Q1/06). The result before taxes, including
non-recurring items, was EUR 58 million (16 in Q1/06). The result
was improved by the increased price of uncoated fine paper as
well as the cost savings measures implemented, while the main
factors weighing down the result were the increased price of
wood, higher financial expenses, and the weak US dollar.
Events in the first quarter
* The Sittingbourne fine paper mill in the UK was closed down in
January, and fine paper machines 6 and 7 at Gohrsmühle in Germany
were closed in February. It was decided to close the Wifsta paper
mill in Sweden by the end of June.
* A nine per cent holding in Metsä-Botnia was sold to Metsäliitto
Cooperative for EUR 240 million. The capital gain recognised for
the transaction amounted to EUR 135 million. After the
transaction M-real's ownership in Metsä-Botnia is 30 per cent.
* A programme to improve profitability of operations in Finland
aiming at an approximately EUR 40 million improvement in results
was started, with full effect as of the beginning of 2009.
Statutory negotiations ended in April, except for Kyro mill."We improved our profitability from the previous quarter's level, but
the result was weighed down by the increased price of wood as well as
the weak market situation for coated magazine paper. Our
restructuring programme is progressing as planned, and we are
evaluating the next stages of the strategic review. To achieve our
long-term performance target, we must be able to raise paper and
paperboard prices."
Mikko Helander, CEO, M-real Corporation
M-real is one of Europe's leading paper and paperboard manufacturers.
It offers first-class solutions for consumer packaging and for the
communications and marketing sectors. The company's global sales
network caters for the needs of publishers, printing companies, paper
merchants, offices, well-known consumer goods manufacturers, and
folding carton printers.
M-real is a Metsäliitto Group company listed on the OMX Helsinki
Stock Exchange. In 2006, the company's sales totalled EUR 5.6
billion. M-real employs more than 13,000 people.
KEY FIGURES Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006
Sales, EUR m 1 432 1 438 1 367 1 378 1 441 5 624
EBITDA, EUR m 201 48 106 17 128 299
excl. non-recurring
items, EUR m 112 104 108 71 128 411
Operating result,
EUR m 104 -246 15 -75 35 -271
excl. non-recurring
items, EUR m 31 14 17 -21 35 45
Result before taxes,
EUR m 58 -291 -22 -111 16 -408
excl. non-recurring items,
EUR m -15 -31 -20 -57 16 -92
Result for the period,
EUR m 54 -266 -33 -103 3 -399
Earnings per share,
EUR 0.16 -0.81 -0.10 -0.31 0.01 -1.21
Return on equity, % 11.2 -52.2 -6.1 -18.3 0.5 -18.9
excl. non-recurring
items, % -5.4 -2.6 -5.8 -9.1 0.5 -4.4
Return on capital
employed, % 9.6 -20.3 1.8 -5.6 3.4 -5.2
excl. non-recurring
items, % 3.2 1.5 2.0 -1.2 3.4 1.4
Equity ratio at end
of period, % 32.9 30.9 34.3 35.0 36.2 30.9
Gearing ratio at end
of period, % 114 126 111 108 100 126
Interest-bearing net
liabilities at end of
period, EUR m 2 189 2 403 2 402 2 381 2 296 2 403
Gross investments,
EUR m 50 123 101 101 103 428
Paper deliveries,
1,000 tonnes 1 029 1 041 1 031 1 040 1 080 4 192
Paperboard deliveries,
1,000 tonnes 302 288 285 284 304 1 161
Personnel at end
of period 13 538 14 125 14 509 15 277 15 046 14 125
Market situation
Western European producers of coated fine paper have seen a slight
increase in deliveries to Europe since the previous year, and the
consumption of uncoated fine paper is also at a slightly higher
level. Year on year, deliveries of coated magazine paper have
increased somewhat, but there has been a slow downward trend in the
prices. The price of coated fine paper has risen slightly, the
effects of which will begin to be seen in the second quarter. This is
the first time in about six years that the price of this paper grade
has been raised. The price of office paper is currently on the rise.
For January-March, the rise was about three per cent on the previous
quarter's, and new increases for office papers have been announced
for April.
The demand for paperboard was strong in January-March, while prices
remained unchanged. Deliveries of folding boxboard to Europe by
Western European producers decreased slightly year on year.
Result for January-March compared with the previous quarter
Sales totalled EUR 1,432 million (Q4/06: 1,438). Comparable sales
were up one per cent.
The operating result was EUR 104 million (Q4/06: -246). It includes,
as non-recurring income, the gain of EUR 135 million obtained from
the sale of Metsä-Botnia shares to Metsäliitto Cooperative. The
result also includes EUR 62 million in non-recurring expenses. The
most significant non-recurring expenses were:
- A cost provision of EUR 14 million for completing the
closure of the Sittingbourne mill.
- A cost provision of EUR 29 million for completing the
closure of the Wifsta mill.
- An impairment loss of EUR 16 million due to valuation of
assets held for sale at
expected selling price in compliance with IFRS 5.
The most significant non-recurring items for the last quarter of 2006
were:
- An impairment loss of EUR 176 million in compliance with
IAS 36.
- A write-down and a cost provision of EUR 60 million for
closing the Sittingbourne mill.
- A write-down of EUR 15 million on the Wifsta mill's fixed
assets.
- EUR 5 million for personnel reductions at the Hallein mill.
- EUR 6 million for the efficiency improvement programme in
Map Merchant Group.
In the first quarter of 2007, net non-recurring items totalled EUR 73
million (Q4/06:
-260).
The operating result excluding non-recurring items was EUR 31 million
(14). Compared with the previous quarter's figure, the result was
improved by a three per cent rise in price of uncoated fine paper as
well as the increased delivery volumes of folding boxboard and
uncoated fine paper. The result was affected negatively by the
increased price of wood and production losses at pulp mills due to
poorer availability of wood, as well as the weak market situation of
coated magazine paper. The operating result includes 30 per cent of
Metsä-Botnia's operating result (39).
In January through March, paper deliveries totalled 1,029,000 tonnes
(1,041,000). In the reporting period, production was curtailed by
41,000 tonnes (87,000) in line with market demand.
Paperboard deliveries in January-March amounted to 302,000 tonnes
(288,000), and production curtailments were 17,000 tonnes (19,000).
Financial income and expenses totalled EUR -46 million (-45). Foreign
exchange gains and losses from trade receivables, trade payables,
financial income and expenses, and the valuation of currency hedging
came to EUR -5 million (-4). Net interest and other financial
expenses amounted to EUR -41 million (-41). Other financial expenses
include EUR 1 million in valuation losses on interest rate
derivatives (0).
At the end of March, the exchange rate of the US dollar against the
euro was 1.1 per cent lower and the UK pound was 1.2 per cent weaker
against the euro than in the previous quarter. On average, the dollar
fell by 1.6 per cent and the pound strengthened by 0.4 per cent.
The result before taxes for the period was EUR 58 million (-291).
Before taxes and excluding non-recurring items, the figure was EUR
-15 million (-31). The negative impact of income taxes, including a
change in deferred tax liabilities, was EUR 4 million (EUR 25 million
positive).
Earnings per share was EUR 0.16 (-0.81) or, excluding non-recurring
items, EUR -0.08 (-0.04). The return on equity was 11.2 per cent
(-52.2). Excluding non-recurring items, it was -5.4 per cent (-2.6).
Return on capital employed was 9.6 per cent (-20.3) or, excluding
non-recurring items, 3.2 per cent (1.5).
Result for January-March compared with the corresponding period of
2006
Sales amounted to EUR 1,432 million (1,441 Q1/06). Comparable sales
were up two per cent.
The operating result was EUR 104 million (35). The operating result
excluding non-recurring items was EUR 31 million (35). Compared with
the corresponding period's figure last year, the operating result was
affected positively by the rise of about eight per cent in the price
of uncoated fine paper as well as the implemented cost savings
measures. The result was lowered by the weakened US dollar and the
increased pulpwood price, as well as production losses at pulp mills
due to poorer availability of wood.
In the first quarter, total paper delivery volume was 1,029,000
tonnes (1,080,000). Production was curtailed by 41,000 tonnes in line
with demand (36,000) to match market demand. Paperboard deliveries
were 302,000 tonnes (304,000) and production curtailments 17,000
tonnes (12,000).
Financial income and expenses totalled EUR -46 million (-18). Foreign
exchange gains and losses from trade receivables, trade payables,
financial income and expenses, and the valuation of currency hedging
were EUR -5 million (+8). Net interest and other financial expenses
amounted to EUR -41 million (-26). Other financial expenses include
EUR 1 million of valuation losses on interest rate derivatives
(valuation gains EUR 4 million).
At the end of March, the exchange rate of the US dollar against the
euro was 10.0 per cent lower and the rate of the UK pound against the
euro 2.4 per cent higher than at the end of March 2006. On average,
the dollar weakened by 9.0 per cent and the pound grew stronger by
2.3 per cent.
The result before taxes for the period was EUR 58 million (16). The
result before taxes, excluding non-recurring items, was EUR -15
million (16 million). Income taxes, including a change in deferred
tax liabilities, were EUR 4 million (13).
Earnings per share were EUR 0.16 (0.01). Excluding non-recurring
items, the figure is EUR -0.08 (0.01). The return on equity was 11.2
per cent (0.5) or, excluding non-recurring items, -5.4 (0.5). The
return on capital employed was 9.6 per cent (3.4), excluding
non-recurring items 3.2 per cent (3.4).
Personnel
At the end of the quarter, on 31 March 2007, the number of employees
was 13,538 (14,125 on 31 December 2006), of whom 3,994 (4,220) worked
in Finland. M-real employed an average of 13,664 people during the
period. In 2007, the personnel include 30 per cent of Metsä-Botnia's
personnel, and for the 2006 financial year 39 per cent.
Investments
During the period, gross capital expenditure totalled EUR 50 million
(Q1/06: 103). Investments include a EUR 35 million share of
Metsä-Botnia's capital expenditure (31). Metsä-Botnia's investments
are based on a 30 per cent share of ownership. In 2007, M-real's
share in Metsä-Botnia is 30 per cent and in the comparative period,
the share was 39 per cent.
Acquisitions, divestments, and restructuring
On 30 January 2007, M-real sold a nine per cent holding in
Metsä-Botnia to Metsäliitto Cooperative, for EUR 240 million, posting
a gain of EUR 135 million.
Financing
At the end of the period, the equity ratio stood at 32.9 per cent
(30.9 per cent on 31 December 2006) and gearing at 114 per cent
(126). Gearing calculated in the manner specified in loan agreements
was approximately 100 per cent (111) and the equity ratio about 36
per cent (34).
Net interest-bearing liabilities amounted to EUR 2,189 million at the
end of March (2,403). Foreign-currency-denominated loans accounted
for six per cent of long-term loans. 77 per cent were floating-rate
and the rest fixed-rate loans. At the end of March, the average
interest rate on loans was 6.4 per cent and the average maturity of
long-term loans four years. The interest rate maturity of the loans
was 7.5 months. The period saw the interest rate maturity vary
between seven and eight months.
Cash flow from operations amounted to EUR 64 million (Q4/06: 179).
Working capital was up by EUR 27 million (down EUR 139 million).
At the end of the review period, an average of seven months of net
foreign exchange exposure was hedged. The level of hedging varied
between six and seven months in the period under review.
Approximately 96 per cent of non-euro-denominated shareholders'
equity was hedged at the end of the period.
Liquidity is good. At the end of March, liquidity was EUR 1,757
million, of which EUR 1,618 million consisted of binding long-term
credit commitments and EUR 139 million of liquid assets and
investments. To meet its short-term financing needs, the Group also
had at its disposal non-binding domestic and foreign commercial paper
programmes and credit facilities amounting to nearly EUR 800 million.
Of the EUR 850 million credit facility that will mature in November
2007, EUR 550 million was cancelled in early April to reduce excess
liquidity. This will lower financing costs by approximately EUR 2
million this year.
On 9 March 2007, Moody's Investors Service downgraded the rating of
M-real's long-term credits from B2 to B3. The rating outlook changed
from negative to stable. On 21 March 2007, Standard & Poor's Ratings
Services lowered M-real's long-term credit rating from B+ to B. The
rating outlook remained negative. The impact of the downgraded credit
ratings increase the annual financing costs by approximately EUR 5
million.
Shares
In January-March, the highest price of M-real's B shares on the OMX
Helsinki Stock Exchange was EUR 5.94 per share, the lowest being EUR
4.90 and the average price being EUR 5.36. At the end of March, the
price of a B share was EUR 5.82. The average price in 2006 was EUR
4.41. The closing price for 2006 was EUR 4.79.
The trading volume of the B shares was EUR 683 million, or 44 per
cent of the share capital. The market value of the A and B shares
together totalled EUR 1,906 million at the end of the year.
On 31 December 2006, Metsäliitto Cooperative owned 38.6 per cent of
the shares and held 60.5 per cent of the voting rights conferred by
these shares. International investors owned 40.4 per cent of the
shares.
On 13 March 2007, the Annual General Meeting authorised for the time
being the Board of Directors to decide on increasing the share
capital through one or more share issues and/or one or more issues of
convertible bonds accordant with the Chapter 10 of the Companies Act
so that in the rights issue or issue of convertible bonds, a total
maximum of 58,365,212 Series B shares of M-real Corporation with a
nominal value of EUR 1.70 can be subscribed for, and that the
company's share capital can be increased by a total maximum of EUR
99,220,860.40.
The authorization will entitle to deviate from the shareholders'
pre-emptive right to subscribe for new shares and/or issues of
convertible bonds and to decide on the subscription prices and other
terms and conditions. Shareholders' pre-emptive subscription rights
can be deviated from providing that there is a significant financial
reason for the company to do so, such as strengthening of the
company's balance sheet, making possible business structuring
arrangements or taking other measures for developing the company's
business operations.
Dividend
The Annual General Meeting decided that a dividend of EUR 0.06 per
share be paid for the period ending on 31 December 2006, for a total
of EUR 19,689,936.72. The dividend was paid on 23 March 2007.
Board of Directors and auditors
The Annual General Meeting elected the following persons to the
M-real Board of Directors: Heikki Asunmaa, Counsellor of Forest
Economy; Kim Gran, president and CEO of Nokian Tyres plc; Kari
Jordan, president and CEO of Metsäliitto Group; Erkki Karmila, Master
of Laws (trained on the bench); Runar Lillandt, Counsellor of
Agriculture; Juha Niemelä, Honorary Counsellor; Antti Tanskanen,
Minister; and 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 Kari Jordan as its Chairman and Arimo Uusitalo as Vice
Chairman.
Göran Lindell, APA, and PricewaterhouseCoopers Oy, a firm of
authorised public accountants, were elected as M-real's auditors,
with Johan Kronberg, APA, as principal auditor and Jouko Malinen,
APA, and 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.
Strategic review and related measures
On 13 March 2006, the M-real Board of Directors initiated a strategic
review of the company's business structure with the aim of studying
how M-real could participate in the consolidation and restructuring
of the European paper industry and the potential benefits of
participation. On 18 October 2006, M-real announced, as the first
step, an extensive restructuring programme, including closures of
production facilities, a cost savings programme, working capital
reduction programme and potential asset divestments. The
restructuring programme is set to conclude by the end of 2007. In
addition to the restructuring programme, a programme to improve
profitability of operations in Finland was announced on 6 February
2007.
M-real has specified and begun to implement cost savings measures and
working capital reductions. On 30 January 2007, M-real sold nine per
cent of its Metsä-Botnia shares to Metsäliitto Cooperative, for EUR
240 million, posting a gain of EUR 135 million. The sale process for
the folding carton plants has been initiated and is progressing
according to plan. Divestments of other assets will be announced at a
later date.
The Sittingbourne fine paper mill in the UK was closed down at the
end of January, and fine paper machines 6 and 7 at Gohrsmühle in
Germany were closed at the end of February. It has been decided that
the Wifsta fine paper mill in Sweden will be closed by the end of
June. Accordingly, EUR 76 million relating to these closures was
recognised as an expense in the 2006 financial statements, and a cost
provision of EUR 43 million was booked in the first quarter of 2007
to complete the closures. The impact of the closures on cash flow is
approximately EUR -80 million, slightly more than half of which will
be realised in 2007 and the rest in 2008-2015. In 2006, the closures
did not have a significant impact on cash flow.Events after the review period
Statutory negotiations related to the programme to improve
profitability of operations in Finland were completed in April,
except for Kyro Mill. Negotiations covered the Kirkniemi, Kemi,
Simpele, Joutseno, Kaskinen, Kangas, Äänekoski, and Pirkanmaa units.
The total effect of the programme is about 500 full-time equivalents.
In addition, job description and profile changes and other actions
aiming for efficiency were agreed upon, resulting in a reduction of
about 100 full-time equivalents in the need for temporary and backup
labour. The majority of the reductions can be achieved through
pension and other such arrangements, but layoffs are unavoidable.
Together with previously decided actions, the programme will result
in an improvement of approximately EUR 40 million in results, which
will be met in full at the beginning of 2009. The non-recurring costs
are about 12 million euros and will be reported on the second
quarter.
As part of the programme, paperboard machine line 2 at the Tako board
mill will be closed on 31 July 2007 as announced. The line
manufactures folding boxboard and has a capacity of 70,000 tonnes.
The plan is to transfer most of the production of the closed line to
the other machines of the Consumer Packaging business. The closure
costs are included in the above mentioned 12 million euros
non-recurring costs. The amount includes approximately 2 million
euros write-down on fixed assets. The programme does not include
closing entire mills.
Outlook
The demand for M-real's fine paper and paperboard products is
expected to remain good in the second quarter of 2007.
M-real will continue to implement price increases on uncoated fine
paper, and the market price in Europe is expected to rise further in
the second quarter. Also, a slight rise is expected in the market
price of coated fine paper in Europe as a result of increases
implemented in the first quarter. The price of folding boxboard for
new orders will be raised as of mid-May. However, increasing the
prices of coated magazine paper in the near future is still
challenging.
Capacity closures already implemented or planned for 2007 are
anticipated to improve the market balance for all of M-real's main
paper grades. The need to increase product prices is pressing
throughout the industry.
The costs of factors of production continue to increase. In Central
Europe, the price of wood recently has risen clearly, due to the
increased use of wood as a source of energy. Moreover, the
exceptionally mild winter in Northern Europe has caused problems in
the availability of wood. Russia's decision to raise export duties on
roundwood makes the situation all the more challenging. With regard
to 2007, the cost increases are slightly greater than the savings
that can be gained by implementing the cost efficiency measures.
The restructuring programme, announced in October 2006 as the first
stage of M-real's strategic review, and the programme to improve the
profitability of operations in Finland, announced in February 2007,
are progressing as planned. The strategic review continues. The
operating result for the second quarter of 2007, excluding
non-recurring items, is expected to weaken from the first quarter of
2007 but to remain above the second quarter of 2006.
Since the forward-looking statements in this interim report are based
on current plans, estimates, and projections, they involve risks and
uncertainties which may cause actual results to differ from those
expressed in such forward-looking statements. For further information
regarding the risk factors, please see page 25 of the Annual Report
2006 of M-real.
M-REAL CORPORATION
For more information, please contact:
Seppo Parvi, CFO, tel. +358 10 469 4321
Anne-Mari Achrén, Communications, tel. +358 10 469 4541
BUSINESS AREAS AND MARKET DEVELOPMENT
Consumer Packaging
EUR m Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006 Q107/
Q106
change
Sales 235 241 236 237 257 971 -8.6%
EBITDA 39 25 38 24 44 131
excl. non-recurring items 39 25 38 24 44 131
Operating result 21 0 17 2 24 43
excl. non-recurring items 21 4 17 2 24 47
Return on capital
employed, % 10.4 0.3 7.5 1.3 10.9 5.1
excl. non-recurring
items, % 10.4 2.1 7.5 1.3 10.9 5.6
Deliveries, 1,000 tonnes 302 288 285 284 304 1 161 -0.7%
Paperboard deliveries,
1,000 tonnes 311 279 273 270 299 1 121 4.0%
EBITDA = result before depreciation and impairment losses.
First quarter compared with the previous quarter
The first-quarter operating result of the Consumer Packaging business
area, excluding non-recurring items, totalled EUR 21 million (EUR 4
million in Q4/06). The result does not include non-recurring items.
The result mainly was improved by higher delivery volumes and lowered
fixed costs.
Deliveries by Western European folding boxboard producers increased
by 5 per cent from those of the previous quarter. M-real's folding
boxboard deliveries were up nine per cent. The average price of
folding boxboard remained at the previous quarter's level.
Linerboard continued to be in good demand. Deliveries were higher
than in the previous quarter, and the selling price in euros
increased slightly.
First quarter compared with Q1/2006
The business area's operating result was down EUR 3 million from the
figure for the equivalent quarter of last year. The result was
affected negatively by the weakened US dollar.
Deliveries by Western European folding boxboard producers were up 2
per cent year on year. M-real's deliveries increased by three per
cent. The selling price of folding boxboard denominated in euros
decreased as the dollar weakened.
Linerboard deliveries and the selling price in euros were on the same
level as in the previous year. The selling price of wallpaper shows a
clear increase.
Since the beginning of 2007, the folding carton plants that are being
sold have been reported under 'Other operations'.
Publishing
Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006 Q107/
EUR m Q106
change
Sales 212 220 226 216 225 887 -5.8%
EBITDA 21 23 36 23 32 114
excl. non-recurring items 21 23 36 23 32 114
Operating result 3 3 14 2 11 30
excl. non-recurring items 3 3 14 2 11 30
Return on capital 1.4 5.3 0.9 4.1 3.0
employed, % 1.3
excl. non-recurring
items, % 1.3 1.4 5.3 0.9 4.1 3.0
Deliveries, 1,000 tonnes 303 313 320 307 318 1 258 -4.7%
Production, 1,000 tonnes 282 283 307 270 307 1 167 -8.1%
EBITDA = result before depreciation and impairment losses.
First quarter compared with the previous quarter
In January-March, the operating result of the Publishing business
area was EUR 3 million (Q4/06: 3). The result was weakened primarily
by higher fibre and chemical costs and by lower delivery volumes.
Moreover, the average selling price decreased slightly. The result
was improved by change in stocks and lower fixed costs.
Deliveries by Western European producers of coated magazine paper
decreased by 7 per cent. The deliveries of the Publishing business
area were down three per cent.
First quarter compared with Q1/2006
The operating result of Publishing was down EUR 8 million from the
equivalent quarter of last year. The result mainly was weakened by
higher fibre costs, lower delivery volumes, and the drop in the
average selling price. The result was improved by lower fixed costs,
achieved through cost-saving measures.
Deliveries by Western European producers of coated magazine paper
decreased by 1 per cent, while deliveries by the Publishing business
area were down 5 per cent.
Commercial Printing
EUR m Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006 Q107/
Q106
change
Sales 366 369 361 380 394 1 504 -7.1%
EBITDA 6 -33 14 -26 24 -21
excl. non-recurring items 20 19 16 15 24 74
Operating result -17 -179 -10 -51 -2 -242
excl. non-recurring items -3 -6 -8 -10 -2 -26
Return on capital -63.3 -3.2 -16.2 -0.5 -21.7
employed, % -6.3
excl. non-recurring
items, % -0.8 -1.9 -2.6 -3.2 -0.5 -2.2
Deliveries, 1,000 tonnes 454 464 453 481 497 1 895 -8.7%
Production, 1,000 tonnes 457 464 456 494 509 1 923 -10.2%
EBITDA = result before depreciation and impairment losses.
Pont Sainte Maxence is included in the figures until June 30, 2006.
First quarter compared with the previous quarter
The first-quarter operating result of the Commercial Printing
business area, excluding non-recurring items, totalled EUR -3 million
(EUR -6 million in Q4/06). A non-recurring cost provision of EUR 14
million for the completion of mill closure at Sittingbourne was
reported.
The total delivery volume of the business area was slightly lower
than in the previous quarter. Comparable delivery volumes, however,
increased by nearly four per cent, considering the closure of
Sittingbourne mill. Increased fibre costs had a negative effect on
the results.
Deliveries by Western European producers of coated fine paper
increased by 1 per cent. M-real's deliveries of coated fine paper
were down three per cent from the previous quarter. Comparable
delivery volumes of coated fine paper rose by two per cent. The
average selling price denominated in euros was on a par with the
previous quarter's. Prices of speciality papers rose further as a
result of the price increases carried out.
First quarter compared with Q1/2006
The first-quarter operating result of the business area, excluding
non-recurring items, totalled EUR -3 million (EUR -2 million in
Q1/06). Total deliveries were approximately 9 per cent lower than in
the comparative period. Profitability was weakened by the one per
cent decrease in the comparable delivery volumes of the business area
and, in particular, the fibre costs, which were significantly higher
than last year. There was also an increase in energy prices.
Profitability was improved by the closing of unprofitable units.
Deliveries by Western European producers of coated fine paper were
down 1 per cent. M-real's deliveries of coated fine paper decreased
by nearly eight per cent. Comparable delivery volumes fell by close
to four per cent from the previous year's levels.
Office Papers
EUR m Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006 Q107/
Q106
change
Sales 202 189 181 174 183 727 10.4%
EBITDA -8 26 15 -2 20 59
excl. non-recurring items 22 26 15 8 20 69
Operating result -22 -4 -1 -17 4 -18
excl. non-recurring items 8 11 -1 -7 4 7
Return on capital -12.0 -1.9 -0.2 -9.0 2.2 -2.3
employed, %
excl. non-recurring
items, % 5.0 6.0 -0.2 -3.7 2.2 1.1
Deliveries, 1,000 tonnes 272 264 258 251 266 1 039 2.3%
Production, 1,000 tonnes 280 253 259 252 264 1 028 6.1%
EBITDA = result before depreciation and impairment losses.
First quarter compared with the previous quarter
The first-quarter operating result of the Office Papers business area
excluding non-recurring items amounted to EUR 8 million (Q4/06: EUR
11 million). A non-recurring cost provision of approximately EUR 29
million for the completion of mill closure at Wifsta was reported.
The result was affected positively by the rise in prices and delivery
volumes. Increased energy and raw material costs had a negative
effect on the results.
Deliveries by Western European producers of uncoated fine paper were
up 1 per cent. The delivery volumes of the Office Papers business
area increased by 3 per cent.
First quarter compared with Q1/2006
The business area's first-quarter operating result excluding
non-recurring items came to EUR 8 million (Q1/06: EUR 4 million).
The result was improved considerably by the rise in sales prices,
eight per cent on average, and the decrease in fixed costs and was
weakened by the increase in energy and raw material costs.
Deliveries by Western European producers of uncoated fine paper were
up 1 per cent. The delivery volumes of the Office Papers business
area increased by 2 per cent.
Map Merchant Group
Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 2006 Q107/
EUR m Q106
change
Sales 379 377 342 354 365 1 438 3.8%
EBITDA 8 5 5 8 9 27
excl. non- 11 11 5 8 9 33
recurring items
Operating 7 -59 3 7 7 -42
result
excl. non- 10 10 3 7 7 27
recurring items
Return on 11.8 -82.8 4.9 8.2 8.7 -14.2
capital
employed, -%
excl. non-recurring
items, -% 15.9 14.0 4.9 8.2 8.7 9.4
Deliveries, 372 367 347 354 363 1 431 2.5%
1,000 tonnes
EBITDA = result before depreciation and impairment losses.
First quarter compared with the previous quarter
The first-quarter operating result of the Map Merchant Group
excluding non-recurring items amounted to EUR 10 million (Q4/06: EUR
10 million). Non-recurring costs were EUR 3 million. The result was
improved by slightly increased delivery volume, and weakened by
slightly lowered gross margin.
First quarter compared with Q1/2006
The operating result excluding non-recurring items was EUR 10 million
(Q1/06: EUR 7 million). The result was improved by slightly increased
delivery volume and increased gross margin.
This interim report is unaudited.
Condensed income statement
EUR m Q1/07 Q1/06 Change 2006 Q4/06
Continuing operations
Sales 1 432 1 441 -9 5 624 1 438
Other operating income 155 37 118 116 18
Operating expenses -1 386 -1 350 -36 -5 441 -1 407
Depreciation and impairment losses -97 -93 -4 -570 -295
Operating result 104 35 69 -271 -246
% of sales 7.3 2.4 -4.8 -17.1
Share of results in associated
companies 0 -1 1 0 0
Exchange gains and losses -5 8 -13 0 -4
Other financial income and
expenses -41 -26 -15 -137 -41
Result before taxes 58 16 42 -408 -291
% of sales 4.1 1.1 -7.3 -20.2
Income taxes -4 -13 9 9 25
Result for the period 54 3 51 -399 -266
% of sales 3.8 0.2 -7.1 -18.5
Attributable to Q1/07 Q1/06 Change 2006 Q4/06
Shareholders of parent
company 54 2 52 -396 -265
Minority interest 0 1 -1 -3 -1
Earnings per share for
result attributable to
shareholders of parent
company (EUR/share) 0.16 0.01 0.15 -1.21 -0.81
Taxes include taxes corresponding to the result for the period under
review.
Condensed balance sheet
EUR m 31.3.2007 % 31.3.2006 % 31.12.2006 %
ASSETS
Non-current assets
Goodwill 375 6.4 571 9.0 376 6.1
Other intangible
assets 61 1.1 106 1.7 62 1.0
Property, plant
and equipment 2 991 51.4 3 166 50.0 3 156 51.1
Biological assets 41 0.7 46 0.7 52 0.8
Shares in associated
and other companies 107 1.8 116 1.8 109 1.8
Interest-bearing
receivables 34 0.6 40 0.7 34 0.6
Deferred tax assets 31 0.5 31 0.5 31 0.5
Other non-interest-
bearing receivables 19 0.3 20 0.3 18 0.3
3 659 62.8 4 096 64.7 3 838 62.2
Current assets
Inventories 666 11.4 746 11.8 676 11.0
Receivables
Interest-bearing 93 1.6 172 2.7 163 2.6
Non-interest-bearing 1 181 20.3 1 204 19.0 1 210 19.6
Cash and cash
equivalents 137 2.4 110 1.8 182 2.9
2 077 35.7 2 232 35.3 2 231 36.1
Assets classified as
held for sale 86 1.5 0 103 1.7
Total assets 5 822 100.0 6 328 100.0 6 172 100.0
SHAREHOLDERS'
EQUITY AND
LIABILITIES
Shareholders' equity
Equity attributable
to
shareholders of
parent
company 1 864 32.0 2 237 35.4 1 843 29.9
Minority interest 52 0.9 49 0.8 63 1.0
Total shareholders'
equity 1 916 32.9 2 286 36.2 1 906 30.9
Non-current
liabilities
Deferred tax
liabilities 267 4.6 335 5.3 284 4.6
Post employment
benefit obligations 205 3.5 210 3.3 199 3.2
Provisions 99 1.7 58 0.9 79 1.3
Other non-interest-
bearing liabilities 31 0.6 51 0.8 28 0.5
Interest-bearing
liabilities 2 144 36.8 2 077 32.8 2 182 35.4
2 746 47.2 2 731 43.1 2 772 45.0
Current liabilities
Non-interest-bearing
liabilities 825 14.2 769 12.1 865 14.0
Interest-bearing
liabilities 304 5.2 542 8.6 599 9.7
1 129 19.4 1 311 20.7 1 464 23.7
Liabilities relating
to
assets classified as
held for sale 31 0.5 0 0.0 30 0.4
Total liabilities 3 906 67.1 4 042 63.8 4 266 69.1
Total shareholders'
equity and
liabilities 5 822 100.0 6 328 100.0 6 172 100.0
Condensed cash flow statement
+-------------------------------------------------------------------+
| EUR m | Q1/07 | Q1/06 | Q1-4/06 | Q4/06 |
|---------------------------------+-------+-------+---------+-------|
| Cash flow from operating | | | | |
| activities | | | | |
|---------------------------------+-------+-------+---------+-------|
| Result for the period | 54 | 3 | -399 | -266 |
|---------------------------------+-------+-------+---------+-------|
| Total adjustments | 37 | 127 | 701 | 306 |
|---------------------------------+-------+-------+---------+-------|
| Change in working capital | -27 | -65 | 65 | 139 |
|---------------------------------+-------+-------+---------+-------|
| | | | | |
| Cash flow arising from |-------+-------+---------+-------|
| operations | 64 | 65 | 367 | 179 |
|---------------------------------+-------+-------+---------+-------|
| Net finance costs | -27 | -30 | -113 | -56 |
|---------------------------------+-------+-------+---------+-------|
| Income taxes paid | -4 | -5 | -32 | -8 |
|---------------------------------+-------+-------+---------+-------|
| Net cash flow arising from | | | | |
| operating activities | 33 | 30 | 222 | 115 |
|---------------------------------+-------+-------+---------+-------|
| Investments in tangible and | | | | |
| intangible assets | -50 | -103 | -428 | -123 |
|---------------------------------+-------+-------+---------+-------|
| Divestments of assets and other | 240 | 2 | 28 | 14 |
|---------------------------------+-------+-------+---------+-------|
| Net cash flow arising from | | | | |
| investing activities | 190 | -101 | -400 | -109 |
|---------------------------------+-------+-------+---------+-------|
| Share issue, minority interest | 1 | 19 | 31 | 3 |
|---------------------------------+-------+-------+---------+-------|
| Changes in long-term loans and | | | | |
| other financial items | -247 | 90 | 259 | 78 |
|---------------------------------+-------+-------+---------+-------|
| Dividends paid | -20 | -39 | -39 | 0 |
|---------------------------------+-------+-------+---------+-------|
| Net cash flow arising from | | | | |
| financing activities | -266 | 70 | 251 | 81 |
|---------------------------------+-------+-------+---------+-------|
| Changes in cash and cash | | | | |
| equivalents | -43 | -1 | 73 | 87 |
|---------------------------------+-------+-------+---------+-------|
| Cash and cash equivalents at | | | | |
| beginning of period | 182 | 112 | 112 | 96 |
|---------------------------------+-------+-------+---------+-------|
| Translation difference in cash | | | | |
| and cash equivalents | -1 | -1 | -2 | 0 |
|---------------------------------+-------+-------+---------+-------|
| Changes in cash and cash | | | | |
| equivalents | -43 | -1 | 73 | 87 |
|---------------------------------+-------+-------+---------+-------|
| Assets held for sale, folding | | | | |
| carton plants | -1 | 0 | -1 | -1 |
|---------------------------------+-------+-------+---------+-------|
| Cash and cash equivalents at | | | | |
| end of period | 137 | 110 | 182 | 182 |
+-------------------------------------------------------------------+
Statement of changes in shareholders' equity
EUR m Transla- Fair
Share Share tion value Retained Minority
capital premium differ- and earnings interest Total
ence other
reserves
Shareholders'
equity at
31 December 558 667 6 0 1 040 45 2 316
2005,
IFRS
Net expenses
recognised
directly
in equity
Translation -3 -3
differences
Net
investment
hedge,
net of tax
Currency flow
hedges
transferred
to income 2
statement, 2
net of tax
recognised in
equity, 11
net of tax 11
Interest flow
hedges
recognised in 3
equity, net 3
of tax
Commodity
hedges,
recognised in -6
equity, net -6
of tax
Change in
minority
interest
Metsä-Botnia
Restructuring 22
in Uruguay
Other changes 0
22 22
Result for
the -396 -3 -399
period
Total
recognised
income and -3 10 -396 19 -370
expenses for
the period
Dividends -39 -1 -40
paid
Shareholders'
equity
at 31 558 667 3 10 605 63
December 1 906
2006,
IFRS
Net expenses
recognised
directly in
equity
Translation -13 -13
differences
Net
investment 9
hedge, 9
net of tax
Currency flow
hedges
transferred
to income -11
statement, -11
net of tax
recognised in
equity, net 4
of tax 4
Interest flow
hedges
transferred
to income -3
statement, -3
net of tax
recognised in
equity, 3 3
net of tax
Commodity
hedges
transferred
to income 6
statement, 6
net of tax
recognised in
equity, -8 -8
net of tax
Change in
minority
interest
Sale of
Metsä-Botnia -11
shares (9%)
Metsä-Botnia
Restructuring 1
in Uruguay
Other changes 0
-10 -10
Result for 54 0 54
the period
Total
recognised
income and -4 -9 54 -10 31
expenses forthe period
Dividends -20 -1 -21
paid
Shareholders'
equity
at 31 March 558 667 -1 1 639 52 1 916
2007,
IFRS
+-------------------------------------------------------------------+
| Key ratios | Q1/07 | Q1/06 | Q4/06 | 2006 |
|-------------------------------+--------+--------+--------+--------|
| Sales, EUR m | 1 432 | 1 441 | 1 438 | 5 624 |
|-------------------------------+--------+--------+--------+--------|
| EBITDA, EUR m | 201 | 128 | 48 | 299 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items, | | | | |
| EUR m | 112 | 128 | 104 | 411 |
|-------------------------------+--------+--------+--------+--------|
| Operating result, EUR m | 104 | 35 | -246 | -271 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items, | | | | |
| EUR m | 31 | 35 | 14 | 45 |
|-------------------------------+--------+--------+--------+--------|
| Result before taxes, EUR m | 58 | 16 | -291 | -408 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items, | | | | |
| EUR m | -15 | 16 | -31 | -92 |
|-------------------------------+--------+--------+--------+--------|
| Result for the period, EUR m | 54 | 3 | -266 | -399 |
|-------------------------------+--------+--------+--------+--------|
| Earnings per share. EUR | 0.16 | 0.01 | -0.81 | -1.21 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items. | | | | |
| EUR | -0.08 | 0.01 | -0.04 | -0.27 |
|-------------------------------+--------+--------+--------+--------|
| from continuing operations. | | | | |
| EUR | 0.16 | 0.01 | -0.81 | -1.21 |
|-------------------------------+--------+--------+--------+--------|
| from discontinued operations. | | | | |
| EUR | 0.00 | 0.00 | 0.00 | 0.00 |
|-------------------------------+--------+--------+--------+--------|
| Return on equity. % | 11.2 | 0.5 | -52.2 | -18.9 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items. % | -5.4 | 0.5 | -2.6 | -4.4 |
|-------------------------------+--------+--------+--------+--------|
| Return on capital employed. % | 9.6 | 3.4 | -20.3 | -5.2 |
|-------------------------------+--------+--------+--------+--------|
| excl. non-recurring items. % | 3.2 | 3.4 | 1.5 | 1.4 |
|-------------------------------+--------+--------+--------+--------|
| Equity ratio at end of | | | 30.9 | |
| period. % | 32.9 | 36.2 | | 30.9 |
|-------------------------------+--------+--------+--------+--------|
| Gearing at end of period. % | 114 | 100 | 126 | 126 |
|-------------------------------+--------+--------+--------+--------|
| Shareholders' equity per | | | | |
| share at end of period, EUR | 5.68 | 6.82 | 5.62 | 5.62 |
|-------------------------------+--------+--------+--------+--------|
| Net interest-bearing | | | | |
| liabilities at end of period, | | | | |
| EUR m | 2 189 | 2 296 | 2 403 | 2 403 |
|-------------------------------+--------+--------+--------+--------|
| Gross capital expenditure, | | | | |
| EUR m | 50 | 103 | 123 | 428 |
|-------------------------------+--------+--------+--------+--------|
| Paperboard deliveries, 1,000 | | | 288 | |
| tonnes | 302 | 304 | | 1 161 |
|-------------------------------+--------+--------+--------+--------|
| Paper deliveries, 1,000 | | | 1 041 | |
| tonnes | 1 029 | 1 080 | | 4192 |
|-------------------------------+--------+--------+--------+--------|
| Personnel at end of period | 13 538 | 15 046 | 14 125 | 14 125 |
+-------------------------------------------------------------------+
+------------------------------------------------------------+
| Commitments |
|------------------------------------------------------------|
| EUR m | Q1/07 | Q1/06 | 2006 |
|-----------------------------------+--------+-------+-------|
| On own behalf | 60 | 98 | 77 |
|-----------------------------------+--------+-------+-------|
| On behalf of associated companies | 1 | 1 | 1 |
|-----------------------------------+--------+-------+-------|
| On behalf of Group companies | 5 | 5 | 5 |
|-----------------------------------+--------+-------+-------|
| On behalf of others | 3 | 10 | 3 |
|-----------------------------------+--------+-------+-------|
| Total | 69 | 114 | 86 |
|------------------------------------------------------------|
| |
|------------------------------------------------------------|
| Open derivative contracts | | | |
|-----------------------------------+------------------------|
| EUR m | Q1/07 | Q1/06 | 2006 |
|-----------------------------------+--------+-------+-------|
| Interest rate derivatives | 2 810 | 4 336 | 2 828 |
|-----------------------------------+--------+-------+-------|
| Foreign exchange derivatives | 3 795 | 3 447 | 4 747 |
|-----------------------------------+--------+-------+-------|
| Other derivatives | 167 | 106 | 152 |
|-----------------------------------+--------+-------+-------|
| Total | 6 772 | 7 889 | 7 727 |
+------------------------------------------------------------+
The fair value of open derivative contracts calculated at market
value was EUR -12.4 million at the end of the review period (EUR -8.3
million on 31 December 2006).
The gross amount of open contracts also includes closed contracts,
totalling EUR 2,613.4 million (EUR 3,664.0 million on 31 December
2006).
+------------------------------------------------------------+
| Commitments related to fixed assets | | | |
|-------------------------------------+-------+-------+------|
| EUR m | Q1/07 | Q1/06 | 2006 |
|-------------------------------------+-------+-------+------|
| Payments in less than a year | 103 | 102 | 146 |
|-------------------------------------+-------+-------+------|
| Payments later | 10 | 51 | 16 |
+------------------------------------------------------------+
+-------------------------------------------------------------------+
| Changes in property, plant and equipment | | | |
| EUR m | | | |
|-------------------------------------------+-------+-------+-------|
| | Q1/07 | Q1/06 | 2006 |
|-------------------------------------------+-------+-------+-------|
| Carrying value at beginning of period | 3 156 | 3178 | 3178 |
|-------------------------------------------+-------+-------+-------|
| Capital expenditure | 49 | 89 | 456 |
|-------------------------------------------+-------+-------+-------|
| Decrease | -114 | -23 | -82 |
|-------------------------------------------+-------+-------+-------|
| Assets classified as held for sale | 0 | 0 | -28 |
|-------------------------------------------+-------+-------+-------|
| Depreciation and impairment losses | -77 | -84 | -385 |
|-------------------------------------------+-------+-------+-------|
| Translation difference | -23 | 6 | 17 |
|-------------------------------------------+-------+-------+-------|
| Carrying value at end of period | 2 991 | 3 166 | 3 156 |
+-------------------------------------------------------------------+
+--------------------------------------------------------------+
| Related party transactions | Q1/07 | Q1/06 | 2006 |
|---------------------------------------+-------+-------+------|
| Transactions with parent company | | | |
| and sister companies | | | |
|---------------------------------------+-------+-------+------|
| Sales | 8 | 6 | 35 |
|---------------------------------------+-------+-------+------|
| Other operating income | 135 | 1 | 3 |
|---------------------------------------+-------+-------+------|
| Purchases | 121 | 125 | 491 |
|---------------------------------------+-------+-------+------|
| Interest income | 1 | 2 | 7 |
|---------------------------------------+-------+-------+------|
| Interest expenses | 2 | 5 | 13 |
|---------------------------------------+-------+-------+------|
| Non-current receivables | 21 | 25 | 21 |
|---------------------------------------+-------+-------+------|
| Current receivables | 63 | 181 | 183 |
|---------------------------------------+-------+-------+------|
| Non-current liabilities | 1 | 1 | 1 |
|---------------------------------------+-------+-------+------|
| Current liabilities | 38 | 167 | 362 |
|---------------------------------------+-------+-------+------|
| | | | |
|---------------------------------------+-------+-------+------|
| Business transactions with associates | | | |
|---------------------------------------+-------+-------+------|
| Sales | 0 | 0 | 0 |
|---------------------------------------+-------+-------+------|
| Purchases | 1 | 1 | 4 |
|---------------------------------------+-------+-------+------|
| Non-current receivables | 7 | 7 | 7 |
|---------------------------------------+-------+-------+------|
| Current receivables | 0 | 1 | 3 |
|---------------------------------------+-------+-------+------|
| Current liabilities | 1 | 4 | 3 |
+--------------------------------------------------------------+
Accounting policies
The Interim Report was prepared in accordance with the IAS 34
standard Interim Financial Reporting and the accounting policies
presented in M-real Annual Report 2006, but not all requirements of
the IAS 34 standard were met.
Taxes include taxes corresponding to the result for the period under
review.
Quarterly data
+---------------------------------------------------------------------------+
|Sales by segment, EUR m |Q1/07|Q4/06|Q3/06|Q2/06|Q1/06|Q4/05|Q3/05|2006 |
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Consumer Packaging | 235| 241| 236| 237| 257| 231| 196| 971|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Publishing | 212| 220| 226| 216| 225| 230| 181| 887|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Commercial Printing | 366| 369| 361| 380| 394| 376| 381|1 504|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Office Papers | 202| 189| 181| 174| 183| 167| 174| 727|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Map Merchant Group | 379| 377| 342| 354| 365| 357| 341|1 438|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Internal sales and other | | | | | | | | |
|operations | 38| 42| 21| 17| 17| 8| -4| 97|
|---------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Total |1 432|1 438|1 367|1 378|1 441|1 369|1 269|5 624|
+---------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
|Operating result by segment, | | | | | | | | |
|EUR m |Q1/07|Q4/06|Q3/06|Q2/06|Q1/06|Q4/05|Q3/05| 2006|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Consumer Packaging | 21| 0| 17| 2| 24| 16| 14| 43|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Publishing | 3| 3| 14| 2| 11| 13| 14| 30|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Commercial Printing | -17| -179| -10| -51| -2| -41| 0| -242|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Office Papers | -22| -4| -1| -17| 4| 3| -3| -18|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Map Merchant Group | 7| -59| 3| 7| 7| 0| 5| -42|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Other operations | 112| -7| -8| -18| -9| -18| -10| -42|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Operating result | 104| -246| 15| -75| 35| -27| 20| -271|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| % of sales | 7.3|-17.1| 1.1| -5.4| 2.4| -2.0| 1.6| -4.8|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Share of results in associates| 0| 0| 1| 0| -1| 2| 0| 0|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Exchange gains and losses | -5| -4| -1| -3| 8| -7| 0| 0|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Other financial income and | | | | | | | | |
|expenses | -41| -41| -37| -33| -26| -17| -19| -137|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result from continuing | | | | | | | | |
|business before tax | 58| -291| -22| -111| 16| -49| 1| -408|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Income taxes | -4| 25| -11| 8| -13| 11| 2| 9|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result for the period from | | | | | | | | |
|continuing business | 54| -266| -33| -103| 3| -38| 3| -399|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result for the period from | | | | | | | | |
|discontinued operations | 0| 0| 0| 0| 0| 0| 0| 0|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result for the period | 54| -266| -33| -103| 3| -38| 3| -399|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Minority interest | 0| 1| 2| 1| -1| 2| -1| 3|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Financial result attributable | | | | | | | | |
|to shareholders of parent | | | | | | | | |
|company | 54| -265| -31| -102| 2| -36| 2| -396|
|------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Earnings per share, EUR | 0.16|-0.81|-0.10|-0.31| 0.01|-0.12| 0.01|-1.21|
+------------------------------------------------------------------------------+
+-------------------------------------------------------------------------------+
|Non-recurring items, | | | | | | | | |
|EUR m |Q1/07|Q4/06|Q3/06|Q2/06|Q1/06|Q4/05|Q3/05| 2006|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Consumer Packaging | 0| -4| 0| 0| 0| 0| 0| -4|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Publishing | 0| 0| 0| 0| 0| 0| 0| 0|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Commercial Printing | -14| -173| -2| -41| 0| -29| 0| -216|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Office Papers | -30| -15| 0| -10| 0| 0| 0| -25|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Map Merchant Group | -3| -69| 0| 0| 0| -4| 0| -69|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Other operations | 120| 1| 0| -3| 0| -5| 0| -2|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Total of non-recurring items in| | | | | | | | |
|the operating result | 73| -260| -2| -54| 0| -38| 0| -316|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Non-recurring items for | | | | | | | | |
|financial items | 0| 0| 0| 0| 0| 0| 0| 0|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Non-recurring items total | 73| -260| -2| -54| 0| -38| 0| -316|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| | | | | | | | | |
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Operating result excl. | | | | | | | | |
|non-recurring items | 31| 14| 17| -21| 35| 11| 20| 45|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| % of sales | 2.2| 1.0| 1.2| -1.5| 2.4| 0.8| 1.6| -0.8|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result before taxes, excluding | | | | | | | | |
|non-recurring items | -15| -31| -20| -57| 16| -11| 1| -92|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| % of sales | -1.0| -2.2| -1.5| -4.1| 1.1| -0.8| 0.1| -1.6|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Result per share, excluding | | | | | | | | |
|non-recurring items, EUR |-0.08|-0.04|-0.08|-0.16| 0.01|-0.01| 0.01|-0.27|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Return on equity, excluding | | | | | | | | |
|non-recurring items, % | -5.4| -2.6| -5.8| -9.1| 0.5| -0.5| 0.4| -4.4|
|-------------------------------+-----+-----+-----+-----+-----+-----+-----+-----|
|Return on capital employed, | | | | | | | | |
|excluding non-recurring items, | | | | | | | | |
|% | 3.2| 1.5| 2.0| -1.2| 3.4| 1.4| 2.3| 1.4|
+-------------------------------------------------------------------------------+
Return on capital
employed, % Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Q3/05 2006
Consumer Packaging 10.4 0.3 7.5 1.3 10.9 7.8 6.7 5.1
Publishing 1.3 1.4 5.3 0.9 4.1 4.8 5.6 3.0
Commercial Printing -6.3 -63.3 -3.2 -16.2 -0.5 -13.7 0.0 -21.7
Office Papers -12.0 -1.9 -0.2 -9.0 2.2 1.6 -1.1 -2.3
Map Merchant Group 11.8 -82.8 4.9 8.2 8.7 2.1 4.5 -14.2
Total 9.6 -20.3 1.8 -5.6 3.4 -1.8 2.3 -5.2
Capital employed
EUR m Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Q3/05
Consumer Packaging 777 809 914 907 917 878 857
Publishing 1 020 1 069 1 091 1 094 1 124 1 094 1 077
Commercial Printing 1 057 1 040 1 208 1 243 1 273 1 178 1 204
Office Papers 669 722 742 746 754 762 764
Map Merchant Group 264 257 313 318 323 325 315
Other equity 583 722 609 578 514 610 506
Total 4 371 4 694 4 877 4 886 4 904 4 846 4 723
The capital employed for a segment included its assets: goodwill,
other intangible goods, tangible assets, biological assets,
investments in associates, inventories, accounts receivable and
advances received, and accrued income (excluding interest and taxes),
less the segment's liabilities (accounts payable, advance payments
received, and accrued liabilities (excluding interest and taxes).
Personnel, average Q1/07 Q1/06 2006
Consumer Packaging 1 513 2 557 2 573
Publishing 1 300 1 431 1 437
Commercial Printing 3 990 4 646 4 425
Office Papers 1 694 1 853 1 822
Map Merchant Group 2 419 2 518 2 481
Other operations 2 748 2 077 2 146
Total 13 664 15 082 14 884
Deliveries
In thousands of
tonnes Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Q3/05 2006
Consumer Packaging 302 288 285 284 304 268 226 1 161
Publishing 303 313 320 307 318 326 257 1 258
Commercial Printing 454 464 453 481 497 469 480 1 895
Office Papers 272 264 258 251 266 242 254 1 039
Paper businesses,
total 1 029 1 041 1 031 1 040 1 080 1 037 991 4 192
Map Merchant Group 372 367 347 354 363 347 337 1 431
Production
In thousands of
tonnes Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Q3/05 2006
Consumer Packaging 311 279 273 270 299 272 292 1 121
Publishing 282 283 307 270 307 315 294 1 167
Commercial Printing 457 464 456 494 509 476 482 1 923
Office Papers 280 253 259 252 264 258 260 1 028
Paper mills, total 1 019 1 000 1 023 1 016 1 079 1 048 1 036 4 119
Metsä-Botnia pulp 1) 203 255 243 234 251 252 234 983
M-real pulp 426 449 443 422 440 421 379 1 754
1) corresponds to M-real's share in Metsä-Botnia (30% in Q1/07, 39%
until Q4/06).
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