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2010-05-05 11:03:59 CEST 2010-05-05 11:04:55 CEST REGULATED INFORMATION Metsäliitto Osuuskunta - Interim report (Q1 and Q3)Metsäliitto Group Interim Report 1 January - 31 March 2010Metsäliitto Group's operating result excluding non-recurring items was EUR 96 million Result for the first quarter of 2010 - Sales EUR 1,224 million (1-3/2009: EUR 1,278 million). - Operating result excluding non-recurring items was EUR 96 million (-67), that is 7.8% of sales (-5.2). Operating result including non-recurring items was EUR 105 million (‑137). - Result before tax, excluding non-recurring items, was EUR 55 million (-93). Result before tax, including non-recurring items, amounted to EUR 64 million (-163). Events in the first quarter - On 25 January 2010, and due to the company's strong liquidity, M-real exercised its right to partial early redemption of its senior floating rate notes maturing in December. The outstanding nominal amount before the redemption was approximately EUR 340 million. The total par value of redemption was EUR 250 million. - On 15 February 2010, Metsäliitto launched a capital programme with the aim of using the funds accrued mainly for financing new business operations. - The sale of the blockboard mill in Romania to the Austrian company Holzindustrie Schweighofer was completed. - Completely new causticization and water stations were decided to be constructed in the Kemi pulp mill. The total value of the investment is approximately EUR 40 million and the new stations will be in use towards the end of 2011. “The positive effects of successful restructuring and the streamlining measures carried out in different parts of the Group are now starting to show in our result. Development in the areas we selected as our core operations has been promising, and the increased pulp prices and the growth in demand for board indicate that the road we chose was the right one. Even though our result has improved, it is still not sufficiently good. We will continue our determined work to strengthen our performance.” Kari Jordan, President & CEO, Metsäliitto Group Metsäliitto Group -------------------------------------------------------------------------------- | Income statement | 2010 | 2009 | 2009 | | (Continuing operations) | 1-3 | 1-3 | 1-12 | -------------------------------------------------------------------------------- | Sales | 1 224 | 1 278 | 4 837 | -------------------------------------------------------------------------------- | Other operating income | 31 | 42 | 353 | -------------------------------------------------------------------------------- | Operating expenses | -1 073 | -1 342 | -4 858 | -------------------------------------------------------------------------------- | Depreciation and impairment losses | -78 | -116 | -501 | -------------------------------------------------------------------------------- | Operating result | 105 | -137 | -169 | -------------------------------------------------------------------------------- | Share of results in associates | -6 | -2 | -16 | -------------------------------------------------------------------------------- | Exchange gains and losses | -2 | -2 | 2 | -------------------------------------------------------------------------------- | Other net financial items | -34 | -20 | -147 | -------------------------------------------------------------------------------- | Result before income tax | 64 | -163 | -329 | -------------------------------------------------------------------------------- | Income tax | -24 | 19 | 10 | -------------------------------------------------------------------------------- | Result from continuing operations | 40 | -144 | -318 | -------------------------------------------------------------------------------- Metsäliitto Group -------------------------------------------------------------------------------- | Profitability | 2010 | 2009 | 2009 | | (Continuing operations) | 1-3 | 1-3 | 1-12 | -------------------------------------------------------------------------------- | Operating result, EUR mill. | 105 | -137 | -169 | -------------------------------------------------------------------------------- | - “ -, excluding non-recurring items | 96 | -67 | -75 | -------------------------------------------------------------------------------- | - “ - % of sales | 7.8 | -5.2 | -1.6 | -------------------------------------------------------------------------------- | Return on capital employed, % | 10.0 | -10.1 | -3.3 | -------------------------------------------------------------------------------- | - ” -, excluding non-recurring items | 9.1 | -4.7 | -1.4 | -------------------------------------------------------------------------------- | Return on equity, % | 11.0 | -34.0 | -20.0 | -------------------------------------------------------------------------------- | - ” -, excluding non-recurring items | 8.6 | -17.5 | -13.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial position | 2010 | 2009 | 2009 | | | 31.3. | 31.3. | 31.12. | -------------------------------------------------------------------------------- | Equity ratio, % | 27.1 | 24.8 | 24.5 | -------------------------------------------------------------------------------- | Net gearing ratio, % | 151 | 167 | 157 | -------------------------------------------------------------------------------- | Interest-bearing net liabilities, EUR | 2 241 | 2 666 | 2 203 | | mill. | | | | -------------------------------------------------------------------------------- Business segments -------------------------------------------------------------------------------- | Sales | Wood | Wood | Pulp | Board | Tissue | | and | Supply | Products | Industry | and | and | | Operating | | Industry | | Paper | Cooking | | result | | | | Industry | Papers | | January - | | | | | | | March 2010 | | | | | | | (EUR mill.) | | | | | | -------------------------------------------------------------------------------- | Sales | 333 | 192 | 288 | 602 | 225 | -------------------------------------------------------------------------------- | Other | 3 | 2 | 5 | 25 | 1 | | operatin | | | | | | | g | | | | | | | income | | | | | | -------------------------------------------------------------------------------- | Operating | -328 | -187 | -215 | -545 | -197 | | expe | | | | | | | nses | | | | | | -------------------------------------------------------------------------------- | Depreciation | -1 | -9 | -21 | -33 | -10 | | & impairment | | | | | | | losses | | | | | | -------------------------------------------------------------------------------- | Operating | 7 | -2 | 57 | 49 | 19 | | resu | | | | | | | lt | | | | | | -------------------------------------------------------------------------------- | Non-recurring | - | 2 | - | -10 | - | | items | | | | | | -------------------------------------------------------------------------------- | Operating | 7 | 0 | 57 | 39 | 19 | | result | | | | | | | excl. | | | | | | | non-recu | | | | | | | rring | | | | | | | items | | | | | | -------------------------------------------------------------------------------- The figures are unaudited METSÄLIITTO GROUP INTERIM REPORT 1 JANUARY - 31 MARCH 2010 Sales and result Metsäliitto Group's sales for the first quarter were EUR 1,224 million (1-3/2009: EUR 1,278 million). The reference period figure includes, among other things, Metsä-Botnia's Uruguay operations and the share from Vapo Oy. During the reference period, the impact of these divested operations on the sales was approximately EUR 145 million. Operating result excluding non-recurring items was EUR 96 million (-67), that is 7.8% of sales (-5.2). The net non-recurring items amounted to EUR 9 million (-70), of which EUR 10 million was associated with a cancelled cost provision, EUR 1 million with the sale of the blockboard mill in Romania and EUR -2 million with the closedown of a sawmill in Kyröskoski. Non-recurring items in the reference period were associated with Metsä-Botnia's Kaskinen mill closure (-40), M-real's Hallein paper mill closure (-28) and the streamlining programme of M-real's sales network (-2). Operating result without non-recurring items was significantly better than in the corresponding period of the previous year and in the previous quarter (Q4/09: 44). Positive profit development was due to the general recovery of the market situation, the implemented cost savings and increased pulp prices. Metsäliitto Group's operating result including non-recurring items was EUR 105 million (-137). Financial income amounted to EUR 2 million (10), the share from associates was EUR -6 million (-2) and financial expenses totalled EUR 36 million (31). The financial items of the reference period include a profit of about EUR 31 million from redemption of senior floating rate notes maturing in December 2010. Net exchange gains/losses recognised in financial items were EUR -2 million (-2). The average year-over-year weakening of the US dollar was 6% in the first quarter, while the British pound strengthened by 2% and the Swedish krona by 9%. Compared to the end of 2009, the dollar has strengthened by about 6% and the krona by about 5%. During the first quarter, the exchange rate of pound sterling compared to the euro has been relatively stable. The result before tax was EUR 64 million (-163) and taxes, including changes in deferred tax liabilities, totalled EUR -24 million (19). The result for continuing operations was EUR 40 million (-144), the result for discontinued operations was EUR 0 million (-10) and the total result for the financial period was EUR 40 million (-153). The Group's return on capital employed for continuing operations was 10.0% (-10.1) and the return on equity was 11.0% (-34.0). Excluding non-recurring items, the return on capital employed was 9.1% (-4.7) and the return on equity was -8.6% (-17.5). Balance sheet and financing Metsäliitto Group's total liquidity was EUR 1.1 billion at the end of March (31 December 2009: 1.4). Of this, EUR 0.2 billion (0.6) was in liquid assets and investments, and EUR 0.9 billion (0.8) was in off-balance-sheet binding credit facilities. During the review period, M-real and Metsä-Botnia paid off approximately EUR 330 million of their loans. In addition, the Group can satisfy short-term financial needs with non-binding commercial paper schemes in Finland and abroad as well as with credit limits amounting to approximately EUR 0.5 billion. The parent company Metsäliitto Cooperative's loans of EUR 460 million, due in March 2011, have been transferred in the Group's consolidated balance sheet of March 31, 2010 from non-current to current liabilities. The Group's equity ratio in March was 27.1% and net gearing was 151% (31 December 2009: 24.5% and 157%, respectively). Interest-bearing net liabilities stood at EUR 2,241 million (31 December 2009: EUR 2,203 million). The equity ratio of the parent company, Metsäliitto Cooperative, was 57.2% at the end of March and net gearing ratio was 51% (31 December 2009: 57.2% and 50%, respectively). Metsäliitto Cooperative's members' capital grew by EUR 20.9 million in January - March. The actual members' capital grew by EUR 0.4 million, the additional members' capital A by EUR 3.7 million and the additional members' capital B by EUR 5.4 million. Between 15 February and 31 March, new additional members' capital C was subscribed for EUR 11.3 million. At the end of March, Metsäliitto Cooperative had 126,499 members (31 December 2009: 127,158). Metsäliitto Cooperative's Supervisory Board will make a proposal to Metsäliitto Cooperative's Representative Council, convening today on 5 May 2010, to the effect that the Council should decide to pay 5.5% (5.5) of interest on the subscribed members' capital, 5.0% (5.0) on the additional A series capital and 4.5% (4.5) on the additional B series capital for 2009. Thus, the interest on members' capital for 2009 would total EUR 35.6 million (37.4). Capital programme In January, Metsäliitto announced that it will launch a capital programme with the purpose of strengthening its equity to correspond to the company's current and future business structure. The assets to be accrued will be mainly used for financing new business operations. In the context of the programme, Metsäliitto issued a new additional members' capital C, on the basis of which the owners can, in addition to interest on members' capital, gain additional profit as cash payments. The sum of the payments depends on the future exchange rate of M-real Corporation's B share on the Helsinki Stock Exchange. The maximum total amount of the members' capital C is EUR 30 million. The subscription period began on 15 February 2010 and will end on 14 May 2010. The prospectus is available in Finnish and Swedish at www.paaomaohjelma.fi and, by request, from Metsäliitto and from OP Pohjola Group's and Helsingin OP Pankki Oyj's branches. Personnel The Group had an average of 12,978 employees (15,497) during the first quarter. At the end of March, the number of personnel in the Group was 12,927 (31 December 2009: 13,592). The parent company, Metsäliitto Cooperative, had 2,286 employees at the end of March (31 December 2009: 2,248). From the beginning of 2010, the Group has been reporting the number of personnel as FTE (Full Time Equivalent). Previously, the NOE (Number of Employees) indicated the number of people employed by the Group, but FTE measures presence and indicates the number of personnel attending work. Reference figures have been converted to correspond to the new practice. Investments Metsäliitto Group's gross capital expenditure totalled EUR 15 million (35). In February, Metsä-Botnia's Board of Directors made a decision on major renovation investments at the Kemi mill. Completely new causticization and water stations will be constructed in the mill area. The total value of the investment is approximately EUR 40 million. The negotiations for main equipment will be started immediately, and according to a preliminary project plan, the construction will begin in October 2010. The new stations will be in use towards the end of 2011. Business areas Wood Supply Wood Supply sales in January-March were EUR 333 million (327) and the operating result amounted to EUR 7 million (5). Non-recurring items are not included in the operating result. Wood Supply Finland accounted for EUR 237 million (246) of the sales and for EUR 4 million (4) of the operating result. Metsäliitto's new Wood Supply organisation commenced work at the beginning of the year. Wood Supply has been organised into four business lines: Wood Supply Finland, International Wood Supply, Wood Energy, and Forestry Services. As the supply decreased after the turn of the year, wood sales in Finland were sluggish during the first quarter. The prices for both log timber and pulpwood were on the increase, with the exception of spruce pulpwood. Metsäliitto Wood Supply fell considerably short of its wood procurement target for the period. At the beginning of the year, the demand was particularly strong for stands dominated by softwood logs as well as for aspen and birch pulpwood. Towards the end of the review period, there was also an increase in the demand for softwood fibre. Wood energy deliveries were carried out as planned, and, thanks to a number of new supply contracts, Metsäliitto strengthened its position as a supplier of wood energy. The development of Metsäliitto's member services continued. The new services include a tax return application in the Metsäverkko online service and a possibility to obtain a custom-made forestry plan. A branch in Oulu was opened to serve forest owners living in the city and the neighbouring municipalities. Due to the increased demand for forestry services, Metsämannut Oy hired new resources. In Russia and the Baltic countries, the demand for wood exceeded the supply. In Russia, the favourable harvesting conditions increased wood supply to an extent, but the harvested volume remained small due to wood export duties. In the Baltic countries, the majority of wood available for sales was from state-owned forests. Both areas saw an increase particularly in log timber prices towards the end of the review period. The prices of log timber rose due to heavy demand in Sweden and Central Europe as well. The entire delivery volume of Metsäliitto Wood Supply to production plants in the first three months of the year was 7.5 million cubic metres (6.9). Wood Products The sales of Metsäliitto Wood Products Industry amounted to EUR 192 million (202), while operating result was EUR -2 million (-25). The operating result was weakened particularly by the non-recurring costs caused by the closure of the Kyröskoski sawmill and the sales postponed until the second quarter due to the stevedore strike. Operating result for the review period excluding non-recurring items was EUR 0 million (-25). The largest single factor behind the improved result is the increase in the price of sawn timber. As a whole, the market situation in Wood Products Industry was slightly improved during the first quarter. However, the cold and snowy winter throughout Europe had a negative impact on demand. Prices for sawn timber increased, but demand remained low. In the transport equipment industry, demand also remained low, but some signs of recovery were observed at the end of the review period. Due to the earthquake in Chile, the supply for softwood plywood went down, which improved the market position of European producers. Curtailements in the production of birch plywood had to be continued. Customer orientation in the Wood Products Industry's business operations increased as the sales of products and services were reorganised by customer segments. Customers are now divided into six segments: construction industry, transport industry, woodworking industry, planning industry, retail, and relationship merchants. The sale of the blockboard mill in Romania to the Romanian subsidiaries of Holzindustrie Schweighofer was completed. Pulp During the first quarter of 2010, Metsä-Botnia's sales increased by 45% compared to the corresponding period last year and amounted to EUR 288 million (199). Operating result excluding non-recurring items was EUR 57 million (-52). The considerable improvement of sales and the operating result were due to the recovery of the market situation and a positive price trend for pulp. Foreign currency-denominated market prices for both softwood and hardwood pulp were, on average, 46% higher compared to the first quarter of the previous year. The positive trend in the pulp price has continued during the first months of 2010. The price for softwood pulp in Europe was USD 830 at the beginning of the review period, and USD 890 at the end of the same period. The respective prices for birch pulp were USD 730 and USD 790. Both customers and producers have very low stock levels. The production downtime in pulp mills in Chile due to the earthquake further weakened the situation, and the impact will continue to be reflected in the pulp market during the second quarter. The heavy rains in the southern parts of the United States have caused a wood shortage for the pulp mills in the area, contributing to the decreased pulp supply. On 3 February 2010, Metsä-Botnia's Board of Directors made a decision on major renovation investments at the Kemi mill. Completely new causticization and water stations will be constructed in the mill area. The new stations will improve the reliability of the mill and decrease its environmental impact. The total value of the investment is approximately EUR 40 million. According to a preliminary project plan, the construction will begin in October 2010, and the new stations will be in use towards the end of 2011. Pulp Industry (Metsä-Botnia) has been consolidated in the financial statements of Metsäliitto Group as a subsidiary from 8 December 2009 onwards. Before that, 53% of Metsä-Botnia had been consolidated using the proportional consolidation method (M-real 30% and Metsäliitto 23%). Metsä-Botnia has processed the business operations in Uruguay as discontinued operations in accordance with the IFRS 5 standard. For this reason, the Uruguay operations are not included in the sales and operating result figures presented above for 2009. Board and Paper The sales of Board and Paper totalled EUR 602 million (623), and the operating result excluding non-recurring items was EUR 39 million (-65). The most important factors behind the improved result were the increased delivery volumes due to recovered demand, the higher pulp price and the implemented cost savings measures. The January-March operating result includes a non-recurring item of EUR 10 million brought about by the cancellation of IT cost provisions registered at the end of 2008. Non-recurring items for the reference period were EUR -53 million, mostly associated with the closures of the Hallein paper mill and Metsä-Botnia's Kaskinen mill. The operating result including non-recurring items was EUR 49 million (-118). Net interest and other financial expenses totalled EUR -16 million (4), the share from associates was EUR -2 million (-1) and net exchange gains/losses recognised as financial items were EUR -6 million (0). The result before tax was EUR 25 million (-115), earnings per share were EUR 0.06 (-0.32) and return on capital employed was 9.1% (-13.4). Excluding non-recurring items, the result before taxes was EUR 15 million (-62), earnings per share were EUR 0.03 (-0.18) and the return on capital employed was 7.3% (-7.0). At the end of March, M-real's equity ratio was 32.7% and net gearing amounted to 86% (31.12.2009: 29.6% and 84%, respectively). In some of M-real's loan agreements, a limit of 120% has been set for gearing and a limit of 30% for the equity ratio. At the end of March, gearing calculated in the manner defined in the loan agreements was approximately 65% and the equity ratio about 38%. On 25 January 2010, M-real exercised its right to partial early redemption of its senior floating rate notes maturing in December. The outstanding nominal amount before the redemption was approximately EUR 340 million. The total par value of redemption was EUR 250 million. Tissue and Cooking Papers The sales of Metsä Tissue, producer of tissue and cooking papers, were EUR 225 million (218). The increased sales were mostly due to larger sales volumes. The sales of Metsä Tissue's own brands, for example, increased by 11% in comparison with the previous year. The operating result was EUR 19 million (19). It was positively affected by volume trends, changes in exchange rates and the sales structure that set off the negative impact of increased prices of raw materials, pulp and recycled paper. Exceptionally severe winter conditions and strikes caused additional costs. The operating result does not include non-recurring items. Metsä Tissue continued to invest in its own brands. In January, the new design patterns of the Lambi Limited Collection product concept were introduced in the markets of the Nordic and Baltic Countries, Eastern Europe and Russia. During the review period, the Board of Directors of Metsä Tissue made investment decisions on a company-wide overhaul of the enterprise resource planning, the maintenance system and the associated processes. During the last two years, Metsä Tissue has redefined its key processes. The objective is to gradually abandon the several different ERPs currently in use and to adopt a single universal system and universal practices. Pulp's price development and availability, the exceptional weather conditions, the stevedore strike in Finland and the paper workers' strike in Sweden made the first quarter of 2010 challenging for Metsä Tissue. Nevertheless, the preparatory measures as well as the response to the situation were successful. Risks and uncertainties Since the estimates and statements in this interim report are based on current plans and projections, they involve risks and uncertainties that may cause prospects to materially differ from those expressed in such statements. The risks related to the Group's business have been explained more extensively in Metsäliitto Group's annual report for 2009. Short-term outlook The operating result of Wood Products Industry is expected to improve during the second quarter. The demand trends in the construction market as well as in retail and distribution look favourable. Furthermore, the market for industrial customer segments shows some slight signs of recovery, but overall demand is still low. Sawn timber production must be restricted if there is no sufficient availability of wood raw material. The market situation for pulp remains good, and the demand exceeds the supply. Further positive price developments are expected. During the second quarter, the utilisation rates of pulp mills are projected to remain at a very good level, and the performance development remains positive. The demand for board is expected to remain favourable during the second quarter. Measures to raise the prices of folding boxboard and liners have already been undertaken, and average prices are expected to increase slightly by the end of the second quarter. The demand for uncoated fine paper seems to continue to be strong during the second quarter. Prices were increased by about 8 per cent in March, and the positive result of this on the result will begin to show by the end of the second quarter. M-real's operating result excluding non-recurring items in the second quarter of 2010 is estimated to be roughly at the same level as in the first quarter. The demand for tissue and cooking papers is expected to remain steady. An increase in the raw material costs has a significant impact on the prices of all Metsä Tissue products. It is expected that demand and price trends for all of Metsäliitto Group's main products - pulp, board, wood products and tissue paper - will remain positive. Metsäliitto's operating result excluding non-recurring items in the second quarter is estimated to be somewhat better than in the first quarter. Espoo, 5 May 2010 Metsäliitto Group Board of Directors Further information: Hannu Anttila, acting Group CFO, Metsäliitto Group, tel. +358 10 465 5111 Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541 Unaudited METSÄLIITTO GROUP -------------------------------------------------------------------------------- | Condensed consolidated statement | 2010 | 2009 | Change | 2009 | | of comprehensive income, EUR mill. | 1-3 | 1-3 | | 1-12 | -------------------------------------------------------------------------------- | Continuing operations | | | | | -------------------------------------------------------------------------------- | Sales | 1 224 | 1 278 | -54 | 4 837 | -------------------------------------------------------------------------------- | Other operating income | 31 | 42 | -10 | 353 | -------------------------------------------------------------------------------- | Operating expenses | -1 073 | -1 342 | 268 | -4 858 | -------------------------------------------------------------------------------- | Depreciation and impairment losses | -78 | -116 | 38 | -501 | -------------------------------------------------------------------------------- | Operating result | 105 | -137 | 242 | -169 | -------------------------------------------------------------------------------- | Share of results in associated | -6 | -2 | -3 | -16 | | companies | | | | | -------------------------------------------------------------------------------- | Exchange gains and losses | -2 | -2 | 0 | 2 | -------------------------------------------------------------------------------- | Other net financial items | -34 | -20 | -14 | -147 | -------------------------------------------------------------------------------- | Result before income tax | 64 | -163 | 226 | -329 | -------------------------------------------------------------------------------- | Income tax | -24 | 19 | -42 | 10 | -------------------------------------------------------------------------------- | Result for the period | 40 | -144 | 184 | -318 | | from continuing operations | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Discontinued operations | | | | | -------------------------------------------------------------------------------- | Result from discontinued | 0 | -10 | 10 | -23 | | operations | | | | | -------------------------------------------------------------------------------- | Result for the period | 40 | -153 | 194 | -342 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income | | | | | -------------------------------------------------------------------------------- | Cash flow hedges | 1 | -4 | 5 | 35 | -------------------------------------------------------------------------------- | Available for sale financial | 18 | -66 | 84 | -103 | | assets | | | | | -------------------------------------------------------------------------------- | Currency translation differences | 13 | 9 | 4 | -15 | -------------------------------------------------------------------------------- | Other items | 2 | 2 | 0 | 0 | -------------------------------------------------------------------------------- | Income tax relating to components | -3 | 21 | -24 | 23 | | of other comprehensive income | | | | | -------------------------------------------------------------------------------- | Other comprehensive income, | 32 | -37 | 70 | -60 | | net of tax | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income | 73 | -191 | 263 | -402 | | for the period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Result attributable to: | | | | | -------------------------------------------------------------------------------- | Members of parent company | 21 | -84 | 106 | -116 | -------------------------------------------------------------------------------- | Non-controlling interests | 19 | -69 | 88 | -226 | -------------------------------------------------------------------------------- | | 40 | -153 | 194 | -342 | -------------------------------------------------------------------------------- | Total comprehensive income | | | | | | attributable to: | | | | | -------------------------------------------------------------------------------- | Members of parent company | 42 | -98 | 140 | -150 | -------------------------------------------------------------------------------- | Non-controlling interests | 31 | -93 | 123 | -252 | -------------------------------------------------------------------------------- | | 73 | -191 | 263 | -402 | -------------------------------------------------------------------------------- Unaudited -------------------------------------------------------------------------------- | Condensed consolidated balance sheet | 2010 | 2009 | 2009 | | | 31.3. | 31.3. | 31.12. | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current | | | | -------------------------------------------------------------------------------- | Goodwill | 499 | 181 | 493 | -------------------------------------------------------------------------------- | Other intangible assets | 262 | 100 | 245 | -------------------------------------------------------------------------------- | Tangible assets | 2 385 | 2 888 | 2 428 | -------------------------------------------------------------------------------- | Biological assets | 7 | 108 | 7 | -------------------------------------------------------------------------------- | Investments in associated companies | 92 | 133 | 98 | -------------------------------------------------------------------------------- | Available for sale investments | 372 | 430 | 356 | -------------------------------------------------------------------------------- | Non-current financial assets | 12 | 234 | 12 | -------------------------------------------------------------------------------- | Deferred tax receivables | 63 | 70 | 58 | -------------------------------------------------------------------------------- | | 3 692 | 4 145 | 3 697 | -------------------------------------------------------------------------------- | Current | | | | -------------------------------------------------------------------------------- | Inventories | 747 | 905 | 669 | -------------------------------------------------------------------------------- | Accounts receivables and other | 876 | 1 023 | 797 | | receivables | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 193 | 389 | 558 | -------------------------------------------------------------------------------- | | 1 816 | 2 317 | 2 024 | -------------------------------------------------------------------------------- | Assets classified as held for sale | - | - | 9 | -------------------------------------------------------------------------------- | Total assets | 5 508 | 6 462 | 5 730 | -------------------------------------------------------------------------------- | MEMBERS' FUNDS AND | | | | | LIABILITIES | | | | -------------------------------------------------------------------------------- | Members' funds | | | | -------------------------------------------------------------------------------- | Members' funds | 989 | 1 007 | 927 | -------------------------------------------------------------------------------- | Non-controlling interests | 499 | 587 | 471 | -------------------------------------------------------------------------------- | | 1 488 | 1 594 | 1 399 | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 393 | 292 | 382 | -------------------------------------------------------------------------------- | Post-employment benefit obligations | 120 | 125 | 122 | -------------------------------------------------------------------------------- | Provisions | 64 | 61 | 76 | -------------------------------------------------------------------------------- | Borrowings | 1 436 | 2 704 | 1 976 | -------------------------------------------------------------------------------- | Other liabilities | 139 | 59 | 134 | -------------------------------------------------------------------------------- | | 2 152 | 3 240 | 2 689 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Provisions | 38 | 52 | 52 | -------------------------------------------------------------------------------- | Current borrowings | 1 014 | 605 | 798 | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | 817 | 971 | 787 | -------------------------------------------------------------------------------- | | 1 868 | 1 628 | 1 637 | -------------------------------------------------------------------------------- | Liabilities classified as held for sale | - | - | 6 | -------------------------------------------------------------------------------- | Total liabilities | 4 021 | 4 868 | 4 331 | -------------------------------------------------------------------------------- | Total members' funds and liabilities | 5 508 | 6 462 | 5 730 | -------------------------------------------------------------------------------- Non-current portion of derivative financial instruments have been transferred to non-current financial assets from accounts receivables and other receivables (QI/09: EUR 0 mill. and QIV/09: EUR 2 mill.). Non-current portion of derivative financial instruments have been transferred to other liabilities from accounts payable and other liabilities (QI/09: EUR 36 mill. and QIV/09: EUR 19 mill.). Unaudited Equity attributable to members of parent company -------------------------------------------------------------------------------- | Change in | Mem- | Shar | Trans- | Fair | Reta | Total | Non-c | Total | | members'funds | bers | e | lation | value | i-ne | | ont- | | | EUR million | ' | pre- | differ | and | d | | rol- | | | | capi | mium | - | other | ear- | | ling | | | | - | ac- | renc | reser | ning | | inte- | | | | tal | count| es | - | s | | rests | | | | | | | ves | | | | | -------------------------------------------------------------------------------- | Members' | 585 | 30 | -5 | 165 | 329 | 1104 | 682 | 1786 | | funds | | | | | | | | | | 1.1.2009 | | | | | | | | | -------------------------------------------------------------------------------- | Result for the | | | | | -84 | -84 | -69 | -153 | | period | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | | | | comprehensive | | | | | | | | | | income | | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | -3 | | -3 | -1 | -4 | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Available | | | | -28 | | -28 | -38 | -66 | | for | | | | | | | | | | sale | | | | | | | | | | financial | | | | | | | | | | assets | | | | | | | | | -------------------------------------------------------------------------------- | Currency | | | 5 | | | 5 | 5 | 9 | | translation | | | | | | | | | | di | | | | | | | | | | fferences | | | | | | | | | -------------------------------------------------------------------------------- | Other items | | | | | 2 | 2 | 0 | 2 | -------------------------------------------------------------------------------- | Income tax | | | 2 | 8 | | 10 | 11 | 21 | | relating to | | | | | | | | | | components | | | | | | | | | | of other | | | | | | | | | | comprehensive | | | | | | | | | | income | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Transactions | | | | | | | | | | with owners | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | 0 | -1 | -1 | | paid | | | | | | | | | -------------------------------------------------------------------------------- | Change in | 1 | | | | | 1 | | 1 | | members' | | | | | | | | | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Business | | | | | | 0 | -1 | -1 | | arrangements | | | | | | | | | -------------------------------------------------------------------------------- | Members' | 585 | 30 | 2 | 143 | 246 | 1007 | 587 | 1594 | | funds | | | | | | | | | | 31.3.2009 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Members' | 484 | 30 | 9 | 221 | 184 | 927 | 471 | 1399 | | funds | | | | | | | | | | 1.1.2010 | | | | | | | | | -------------------------------------------------------------------------------- | Result for the | | | | | 21 | 21 | 19 | 40 | | period | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | | | | comprehensive | | | | | | | | | | income | | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | 3 | | 3 | -2 | 1 | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Available for | | | | 8 | | 8 | 11 | 18 | | sale financial | | | | | | | | | | assets | | | | | | | | | -------------------------------------------------------------------------------- | Currency | | | 9 | | | 9 | 4 | 13 | | translation | | | | | | | | | | differences | | | | | | | | | -------------------------------------------------------------------------------- | Other items | | | | | 2 | 2 | 0 | 2 | -------------------------------------------------------------------------------- | Income tax | | | 1 | -3 | | -2 | 0 | -3 | | relating to | | | | | | | | | | components of | | | | | | | | | | other | | | | | | | | | | comprehensive | | | | | | | | | | income | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Transactions | | | | | | | | | | with owners | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | -1 | -1 | -4 | -5 | | paid | | | | | | | | | -------------------------------------------------------------------------------- | Change in | 21 | | | | | 21 | | 21 | | members' | | | | | | | | | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Business | | | | | | 0 | 0 | 0 | | arrangements | | | | | | | | | -------------------------------------------------------------------------------- | Members' | 505 | 30 | 19 | 229 | 207 | 989 | 499 | 1488 | | funds | | | | | | | | | | 31.3.2010 | | | | | | | | | -------------------------------------------------------------------------------- Unaudited -------------------------------------------------------------------------------- | Condensed consolidated cash flow statement | 2010 | 2009 | 2009 | | | 1-3 | 1-3 | 1-12 | -------------------------------------------------------------------------------- | Result for the period | 40 | -153 | -342 | -------------------------------------------------------------------------------- | Total adjustments | 91 | 117 | 469 | -------------------------------------------------------------------------------- | Change in working capital | -164 | 1 | 231 | -------------------------------------------------------------------------------- | Cash flow arising from operations | -33 | -35 | 359 | -------------------------------------------------------------------------------- | Net financial items | -26 | 44 | -84 | -------------------------------------------------------------------------------- | Income taxes paid | -8 | -7 | 0 | -------------------------------------------------------------------------------- | Net cash flow arising from operating activities | -67 | 2 | 275 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisitions | 0 | -4 | -496 | -------------------------------------------------------------------------------- | Investments in tangible and | -15 | -31 | -152 | | intangible assets | | | | -------------------------------------------------------------------------------- | Divestments of assets and other | 12 | 5 | 940 | -------------------------------------------------------------------------------- | Net cash flow arising from investing activities | -4 | -30 | 291 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in members' funds | 21 | 1 | -57 | -------------------------------------------------------------------------------- | Change in long-term loans | -316 | -204 | -530 | | and other financial items | | | | -------------------------------------------------------------------------------- | Dividends paid | 0 | 0 | -40 | -------------------------------------------------------------------------------- | Net cash flow arising from financing activities | -295 | -203 | -626 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Changes in cash and cash equivalents | -365 | -231 | -60 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at beginning of period | 558 | 619 | 619 | -------------------------------------------------------------------------------- | Translation difference | 1 | 1 | -1 | -------------------------------------------------------------------------------- | Changes in cash and cash equivalents | -365 | -231 | -60 | -------------------------------------------------------------------------------- | Cash and cash equivalents | - | - | -1 | | in assets classified as held for sale | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at end of period | 193 | 389 | 558 | -------------------------------------------------------------------------------- Unaudited BUSINESS SEGMENTS -------------------------------------------------------------------------------- | Wood Supply | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 333 | 327 | 1101 | -------------------------------------------------------------------------------- | EBITDA | 8 | 6 | -5 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 8 | 6 | 16 | -------------------------------------------------------------------------------- | Depreciation and impairment | -1 | -1 | -4 | -------------------------------------------------------------------------------- | Operating result | 7 | 5 | -9 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 7 | 5 | 12 | -------------------------------------------------------------------------------- | Capital expenditure | 0 | 0 | 2 | -------------------------------------------------------------------------------- | Personnel at end of period | 1 024 | 1 093 | 945 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wood Products Industry | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 192 | 202 | 806 | -------------------------------------------------------------------------------- | EBITDA | 8 | -15 | -2 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 9 | -15 | -2 | -------------------------------------------------------------------------------- | Depreciation and impairment | -9 | -10 | -45 | -------------------------------------------------------------------------------- | Operating result | -2 | -25 | -47 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 0 | -25 | -41 | -------------------------------------------------------------------------------- | Capital expenditure | 3 | 1 | 10 | -------------------------------------------------------------------------------- | Personnel at end of period | 2673 | 3296 | 3110 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Pulp Industry | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 288 | 303 | 1195 | -------------------------------------------------------------------------------- | EBITDA | 78 | -29 | 366 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 78 | -12 | 71 | -------------------------------------------------------------------------------- | Depreciation and impairment | -21 | -93 | -173 | -------------------------------------------------------------------------------- | Operating result | 57 | -122 | 193 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 57 | -47 | -43 | -------------------------------------------------------------------------------- | Capital expenditure | 1 | 10 | 53 | -------------------------------------------------------------------------------- | Personnel at end of period | 903 | 1 767 | 1 106 | -------------------------------------------------------------------------------- Pulp Industry (Metsä-Botnia) has been consolidated as a subsidiary from 8 December 2009 onwards. Before that, 53% of Metsä-Botnia has been consolidated using the proportional consolidation method (M-real 30% and Metsäliitto 23%). -------------------------------------------------------------------------------- | Board and Paper Industry | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 602 | 623 | 2 432 | -------------------------------------------------------------------------------- | EBITDA | 82 | -48 | 88 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 72 | -13 | 44 | -------------------------------------------------------------------------------- | Depreciation and impairment | -33 | -70 | -356 | -------------------------------------------------------------------------------- | Operating result | 49 | -118 | -267 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 39 | -65 | -150 | -------------------------------------------------------------------------------- | Capital expenditure | 7 | 16 | 73 | -------------------------------------------------------------------------------- | Personnel at end of period | 4 796 | 6 314 | 4 903 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Tissue and Cooking Papers | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 225 | 218 | 890 | -------------------------------------------------------------------------------- | EBITDA | 29 | 29 | 135 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 29 | 29 | 135 | -------------------------------------------------------------------------------- | Depreciation and impairment | -10 | -10 | -42 | -------------------------------------------------------------------------------- | Operating result | 19 | 19 | 93 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 19 | 19 | 93 | -------------------------------------------------------------------------------- | Capital expenditure | 4 | 4 | 35 | -------------------------------------------------------------------------------- | Personnel at end of period | 3 162 | 3 199 | 3 150 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operations | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 0 | 90 | 170 | -------------------------------------------------------------------------------- | EBITDA | -2 | 14 | 69 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | -2 | 14 | 21 | -------------------------------------------------------------------------------- | Depreciation and impairment | 0 | -5 | -11 | -------------------------------------------------------------------------------- | Operating result | -2 | 10 | 59 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | -2 | 10 | 11 | -------------------------------------------------------------------------------- | Capital expenditure | 0 | 12 | 516 | -------------------------------------------------------------------------------- | Personnel at end of period | 369 | 1 150 | 378 | -------------------------------------------------------------------------------- Other operations include Vapo Group (49.9%) until June 24, 2009 and Metsäliitto's service and holding functions. -------------------------------------------------------------------------------- | Internal sales | QI/10 | QI/09 | QI-IV/09 | | and eliminations | | | | -------------------------------------------------------------------------------- | Sales | -415 | -485 | -1 758 | -------------------------------------------------------------------------------- | EBITDA | -19 | 22 | -319 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | -19 | 9 | -40 | -------------------------------------------------------------------------------- | Depreciation and impairment | -3 | 73 | 129 | -------------------------------------------------------------------------------- | Operating result | -22 | 94 | -190 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | -22 | 36 | 45 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Metsäliitto Group | QI/10 | QI/09 | QI-IV/09 | -------------------------------------------------------------------------------- | Sales | 1 224 | 1 278 | 4 837 | -------------------------------------------------------------------------------- | EBITDA | 183 | -22 | 332 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 174 | 15 | 246 | -------------------------------------------------------------------------------- | Depreciation and impairment | -78 | -116 | -501 | -------------------------------------------------------------------------------- | Operating result | 105 | -137 | -169 | -------------------------------------------------------------------------------- | - ” -, excl. non-recurring items | 96 | -67 | -75 | -------------------------------------------------------------------------------- | Capital expenditure | 15 | 35 | 648 | -------------------------------------------------------------------------------- | Personnel at end of period | 12 927 | 15 458 | 13 592 | -------------------------------------------------------------------------------- EBITDA = Operating result before depreciation and impairment losses. Unaudited -------------------------------------------------------------------------------- | Quarterly data | 2010 | 2009 | 2009 | 2009 | 2009 | | | QI | QIV | QIII | QII | QI | -------------------------------------------------------------------------------- | Sales | | | | | | -------------------------------------------------------------------------------- | Wood Supply | 333 | 292 | 232 | 251 | 327 | -------------------------------------------------------------------------------- | Wood Products Industry | 192 | 193 | 188 | 224 | 202 | -------------------------------------------------------------------------------- | Pulp Industry | 288 | 297 | 313 | 282 | 303 | -------------------------------------------------------------------------------- | Board and Paper Industry | 602 | 606 | 618 | 585 | 623 | -------------------------------------------------------------------------------- | Tissue and Cooking Papers | 225 | 229 | 226 | 217 | 218 | -------------------------------------------------------------------------------- | Other operations | 0 | 4 | 3 | 72 | 92 | -------------------------------------------------------------------------------- | Internal sales and | -415 | -431 | -425 | -418 | -487 | | eliminations | | | | | | -------------------------------------------------------------------------------- | Sales total | 1 224 | 1 190 | 1 155 | 1 213 | 1 278 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating result | | | | | | -------------------------------------------------------------------------------- | Wood Supply | 7 | -17 | -1 | 4 | 5 | -------------------------------------------------------------------------------- | Wood Products Industry | -2 | -9 | -3 | -10 | -25 | -------------------------------------------------------------------------------- | Pulp Industry | 57 | 355 | 2 | -42 | -122 | -------------------------------------------------------------------------------- | Board and Paper Industry | 49 | -52 | -24 | -73 | -117 | -------------------------------------------------------------------------------- | Tissue and Cooking Papers | 19 | 21 | 31 | 22 | 19 | -------------------------------------------------------------------------------- | Other operations | -2 | 20 | 2 | 27 | 10 | -------------------------------------------------------------------------------- | Eliminations | -22 | -300 | 0 | 16 | 94 | -------------------------------------------------------------------------------- | Operating result total | 105 | 18 | 7 | -56 | -137 | -------------------------------------------------------------------------------- | - % of sales | 8.6 | 1.5 | 0.6 | -4.6 | -10.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share of results in | -6 | -4 | -1 | -8 | -2 | | associated companies | | | | | | -------------------------------------------------------------------------------- | Exchange gains and losses | -2 | 2 | 4 | -1 | -2 | -------------------------------------------------------------------------------- | Other net financial items | -34 | -34 | -63 | -30 | -20 | -------------------------------------------------------------------------------- | Result before income tax | 64 | -18 | -53 | -95 | -163 | -------------------------------------------------------------------------------- | Income tax | -24 | -9 | -6 | 7 | 19 | -------------------------------------------------------------------------------- | Result for the period from | 40 | -27 | -59 | -88 | -144 | | continuing operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Result from | | | | | | -------------------------------------------------------------------------------- | discontinued operations | 0 | -9 | -2 | -3 | -10 | -------------------------------------------------------------------------------- | Result for the period | 40 | -36 | -61 | -91 | -153 | -------------------------------------------------------------------------------- Unaudited -------------------------------------------------------------------------------- | Change in tangible assets | QI/10 | QI/09 | I-IV/09 | -------------------------------------------------------------------------------- | Book value at beginning of period | 2 428 | 2 958 | 2 958 | -------------------------------------------------------------------------------- | Business acquisitions | - | 1 | 472 | -------------------------------------------------------------------------------- | Investments | 14 | 31 | 143 | -------------------------------------------------------------------------------- | Decrease | -12 | -6 | -772 | -------------------------------------------------------------------------------- | Assets classified as held for sale | - | - | -3 | -------------------------------------------------------------------------------- | Depreciation and impairment charges | -74 | -109 | -449 | -------------------------------------------------------------------------------- | Translation differences and other changes | 29 | 13 | 78 | -------------------------------------------------------------------------------- | Book value at end of period | 2 385 | 2 888 | 2 428 |-------------------------------------------------------------------------------- ”Assets classified as held for sale” include in 2009 the tangible assets of the Wood Products Industry's blockboard mill in Romania. -------------------------------------------------------------------------------- | Commitments | QI/10 | QI/09 | QIV/09 | -------------------------------------------------------------------------------- | On own behalf (incl. leasing liabilities) | 443 | 310 | 456 | -------------------------------------------------------------------------------- | On behalf of associated companies | 6 | 4 | 6 | -------------------------------------------------------------------------------- | On behalf of others | 3 | 6 | 4 | -------------------------------------------------------------------------------- | Total | 453 | 320 | 466 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commitments related to fixed assets | QI/10 | QI/09 | QIV/09 | -------------------------------------------------------------------------------- | Payments due under 1 year | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Payments due in subsequent years | 1 | 1 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Open derivative contracts | QI/10 | QI/09 | QIV/09 | -------------------------------------------------------------------------------- | Interest rate derivatives | 829 | 1 027 | 831 | -------------------------------------------------------------------------------- | Currency derivatives | 1 775 | 2 055 | 1 766 | -------------------------------------------------------------------------------- | Other derivatives | 234 | 337 | 254 | -------------------------------------------------------------------------------- | Total | 2 838 | 3 419 | 2 850 | -------------------------------------------------------------------------------- The market value of open derivative contracts at the end of the review period was EUR -42 million (QIV/09: EUR -28 million). Open derivative contracts also include closed contracts to a total amount of EUR 465 million (QIV/09: EUR 537 million). Accounting policies This Interim Report was prepared in accordance with the IAS 34 standard Interim Financial Reporting and the accounting policies presented in Metsäliitto Group's Annual Report 2009. |
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