Metsä Board Oyj - Interim report (Q1 and Q3)

Metsä Board's comparable operating result in January-March 2024 was EUR 32 million

Metsä Board Corporation Stock exchange release Interim Report 25 April 2024 at
12:00 noon EEST

January-March 2024 (compared to 1-3/2023)

  · Sales were EUR 483.7 million (542.1).
  · The comparable operating result was EUR 31.5 million (88.7), or 6.5% of
sales (16.4). Operating result was EUR 23.0 million (88.4).
  · Comparable earnings per share were EUR 0.06 (0.19), and earnings per share
were EUR 0.04 (0.19).
  · Comparable return on capital employed was 5.7% (13.9).
  · Net cash flow from operations was EUR -7.9 million (126.4).

Events in January-March 2024

  · Demand for Metsä Board's fresh fibre paperboards picked up notably from the
previous quarter. The average price of folding boxboard decreased.
  · Demand for market pulp was boosted by paper and paperboard producers' higher
capacity utilisation rates in Europe. The average prices of market pulp
improved, especially in Europe.
  · Political strikes by Finnish trade unions from 11 March to 8 April 2024
stopped raw material transports and halted export ports. Due to the strikes,
Metsä Board's paperboard and BCTMP production stopped for 2-3 weeks at all the
mills in Finland. The company expects the negative impact of the strikes to be
around EUR 25 million in the first half of the year.
  · Cash flow from operations weakened by a rapid increase in working capital.
Cash flow for the review period includes a dividend of EUR 9.8 million
(1-3/2023: 83) from the associated company Metsä Fibre.
  · On 21 March 2024, a gas explosion occurred at the evaporation plant of the
associated company Metsä Fibre's Kemi bioproduct mill, which also affects
production at Metsä Board's paperboard mill. The bioproduct mill's down-time
caused by the explosion is expected to last until the end of June.
  · Metsä Board decided not to go ahead with the Kaskinen folding boxboard mill
investment. The costs of pre-engineering, EUR 7.6 million, were recognised in
the January-March operating result as an item affecting comparability.
  · Metsä Board's Annual General Meeting was held on 26 March 2024. The Annual
General Meeting resolved that a dividend of EUR 0.25 per share, or a total of
approximately EUR 89 million, be paid to the shareholders. The dividend was paid
on 9 April 2024.
  · CDP recognised Metsä Board with the highest A-level score for transparency
on climate change and water security. The company received a grade A- in the
forest assessment. The rating was complemented by a place on the CDP Supplier
Engagement Leaderboard.

Events after the review period

On 24 April 2024, Metsä Board made an investment decision to renew the folding
boxboard machine at Simpele. The investment will enable the replacement of
fossil fuels in paperboard production, increase production efficiency and
improve the quality of folding boxboard. In addition, the renewal will increase
production capacity by 10,000 tonnes, which will bring Simpele's production
capacity of folding boxboard to about 310,000 tonnes/year. The investment will
start immediately and is expected to be completed in the second half of 2025.
The investment value is around EUR 60 million, spread over the period 2024-2026.
Simpele mill produces high-quality lightweight folding boxboard, mainly for food
and pharmaceutical packaging.

Near-term outlook

The good demand for fresh fibre paperboards seen in the beginning of the year is
expected to continue in the second quarter. Demand is supported by restocking
activities in the value chain. The overall demand for consumer products will
continue to be influenced by the trend in consumers' purchasing power and
general purchasing behaviour.

Metsä Board's paperboard delivery volumes are expected to increase slightly in
April-June compared the previous quarter (1-3/2024: 364,000 tonnes). The sales
prices in local currencies are expected to remain stable.

More annual maintenance shutdowns will take place at the mills in April-June
compared to the previous quarter.

Total costs, excluding pulp costs, are expected to remain stable.

Average pulp prices are expected to improve clearly from the first quarter. The
global market situation for long-fibre pulp will remain tight, as supply is
limited by the repair works at the Kemi bioproduct mill, pulp producers' annual
maintenance shutdowns and bottlenecks in global logistics. The demand and price
situation for sawn timber is expected to improve slightly on a seasonal basis in
the second quarter of the year.

In April-June 2024, exchange rate fluctuations, including the impact of hedges,
will have a slightly positive impact on the operating result compared with
January-March 2024 and a slightly positive impact compared with April-June 2023.

The negative result impact caused by the political strikes in Finland is
expected to be roughly at the same level in April-June as in January-March, EUR
10-15 million. In April-June, the negative result impact caused by the gas
explosion in Kemi is expected to amount to EUR 30-40 million. The estimate will
be specified as a more precise schedule for the repair work and production
restart becomes available. Metsä Board and Metsä Fibre have property damage and
business interruption insurance policies in accordance with established
practice, for which compensations are recognised later and are not included in
the estimate. The estimates concerning the strikes and the gas explosion in Kemi
include the impact of Metsä Fibre's share of the result.

Result guidance for April-June 2024

Metsä Board's comparable operating result in April-June 2024 is expected to be
weaker than in January-March 2024.

Metsä Board's CEO Mika Joukio:

“We had a positive start to 2024, with demand for fresh fibre paperboards
picking up notably. Demand for paperboards has been boosted by restocking in the
value chain and the normalisation of market balance, especially in Europe. We
expect the positive momentum to continue in the coming months.

Due to the trade unions' political strikes in March, we were forced to stop
production at all our Finnish mills, as raw material transports to mills were
halted and port closures prevented customer deliveries. Depending on the mill,
the production shutdowns lasted for 2-3 weeks, taking place in March-April.
Naturally, this was an unfortunate setback, as order inflows had just picked up
after prolonged weak demand. We estimate that the strikes caused us profit
losses of roughly EUR 25 million, around half of which were allocated to the
first quarter.

Despite the strikes, our January-March paperboard delivery volumes increased by
a fifth from the previous quarter, totalling 364,000 tonnes. The volumes
increased in both folding boxboard and white kraftliners. No planned annual
maintenance shutdowns took place in the review period, and this also increased
paperboard production volumes. Our first quarter sales amounted to EUR 484
million, and our comparable operating result was EUR 32 million. Our financial
position remained strong.

At the end of the review period, a gas explosion occurred at the evaporation
plant of Metsä Fibre's Kemi bioproduct mill. The bioproduct mill's production
shutdown will also affect the production of white kraftliner at Metsä Board's
paperboard mill, which is part of the Kemi integrated mill. The bioproduct
mill's downtime caused by the explosion is expected to last until the end of
June. However, we plan to continue producing white kraftliner during the repair
work at a lower than normal production level.

We decided not to invest in a new folding boxboard mill in Kaskinen. The pre
-engineering indicated that the project's overall cost would have been
significantly higher than the original estimate, and the project would not have
met the financial targets set for it. Instead, we will launch programmes for new
product options as well as growth and development investments at our existing
mills to implement our strategy of growing in fibre-based packaging materials
and renewing our industrial operations. The programmes will support our target
of fossil free production by the end of 2030. We will also continue to develop
packaging solutions that reduce the use of plastic, especially in food and food
service packaging.

We are currently focusing on making full use of the growth investments completed
in Husum and Kemi last year. Both investments strengthen our leading position in
folding boxboard and coated white kraftliners in our main market areas in Europe
and North America. Our customers appreciate high quality, and we aim to be their
preferred supplier of premium fibre-based packaging solutions.”

  Key figures
                                       2024   2023   2023   2023
                                       Q1     Q1     Q4     Q1-Q4
  Sales, EUR million                   483.7  542.1  422.6  1,941.9
  EBITDA, EUR million                  57.0   113.4  25.1   214.6
    comparable, EUR million            57.8   113.7  26.0   216.0
  EBITDA, % of sales                   11.8   20.9   5.9    11.1
    comparable, % of sales             12.0   21.0   6.2    11.1
  Operating result, EUR million        23.0   88.4   -0.2   120.8
    comparable, EUR million            31.5   88.7   0.7    122.2
  Operating result, % of sales         4.8    16.3   0.0    6.2
    comparable, % of sales             6.5    16.4   0.2    6.3
  Result before taxes, EUR million     20.1   87.7   1.4    120.9
    comparable, EUR million            28.6   88.2   2.3    122.6
  Result for the period, EUR million   14.8   75.5   0.9    101.6
    comparable, EUR million            21.7   75.9   1.8    103.8
  Earnings per share, EUR              0.04   0.19   0.01   0.27
    comparable, EUR                    0.06   0.19   0.01   0.27
  Return on equity, %                  3.0    13.8   0.2    4.7
    comparable, %                      4.4    13.9   0.3    4.8
  Return on capital employed, %        4.3    13.9   0.3    5.0
    comparable, %                      5.7    13.9   0.4    5.1
  Equity ratio at the end of the       64     62     67     67
  period, %
  Net gearing at the end of the        9      0      7      7
  period, %
  Interest-bearing net                 1.1    0.0    0.7    0.7
  liabilities/comparable EBITDA, 12m
  rolling
  Shareholders' equity per share at    4.93   5.48   5.35   5.35
  the end of the period, EUR
  Interest-bearing net liabilities at  176.2  8.6    144.0  144.0
  the end of the period, EUR million
  Total investment, EUR million        23.9   57.4   228.7  228.7
  Net cash flow from operations, EUR   -7.9   126.4  124.3  342.8
  million
  Personnel at the end of the period   2,263  2,280  2,240  2,240

METSÄ BOARD CORPORATION

Further information:

Henri Sederholm, CFO, tel. +358 10 465 4913
Katri Sundström, VP, Investor Relations, tel. +358 10 462 0101

A webcast and a conference call for analysts and investors in English will be
held on the same day at 3:00 p.m. EEST. CEO Mika Joukio and CFO Henri Sederholm
will present the results. The webcast and conference call can be followed online
on the company's website at https://metsaboard.videosync.fi/q1-2024

Participation in the conference call requires registration through the following
link: https://palvelu.flik.fi/teleconference/?id=50047147. After the
registration, the participant will be provided with a phone number, a User ID
and a Conference ID to access the conference. By participating in the conference
call, the participant agrees that personal information such as name and company
name can be collected.

Metsä Board
metsagroup.com/metsaboard (http://www.metsagroup.com/metsaboard/)

Metsä Board is a producer of lightweight and high-quality folding boxboards,
food service boards and white kraftliners. The pure fresh fibres we use in our
products are a safe, renewable and recyclable resource, that can be traced back
to northern forests. We aim to have completely fossil free mills and raw
materials by the end of 2030. We promote a culture of diversity, equality and
inclusion.

Metsä Board is listed on the Nasdaq Helsinki. In 2023 our sales totalled EUR 1.9
billion, and we have around 2,300 employees. Metsä Board is part of Metsä Group,
whose parent company Metsäliitto Cooperation is owned by around 90,000 Finnish
forest owners. The sales of the whole Metsä Group were EUR 6.1 billion.

Follow Metsä Board: LinkedIn (https://www.linkedin.com/company/metsa
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Attachments:

04247587.pdf