2016-08-04 11:00:01 CEST
2016-08-04 11:00:01 CEST
REGULATED INFORMATION
Metsä Board Oyj - Half Year financial report
Metsä Board Corporation’s operating result excluding non-recurring items for January–June 2016 was EUR 70.8 million
Metsä Board Corporation Half year financial report 1 January–June 30 2016 4
August 2016 at 12:00 EET
January–June 2016 (1–6/2015)
• Sales amounted to EUR 858.5 million (1,047.7).
• Operating result excluding non-recurring items was EUR 70.8 million (90.2),
or 8.2 per cent of sales. Operating result including non-recurring items was
EUR 67.2 million (110.3).
• Result before taxes excluding non-recurring items was EUR 56.8 million
(72.3). Result before taxes including non-recurring items was EUR 53.3 million
(90.2).
• Earnings per share excluding non-recurring items were EUR 0.14 (0.19), and
earnings per share including non-recurring items were EUR 0.13 (0.24).
April-June 2016 (1–3/2016)
• Sales amounted to EUR 422.9 million (435.6).
• Operating result excluding non-recurring items was EUR 35.8 million (35.0),
or 8.5 per cent (8.0) of sales. Operating result including non-recurring items
was EUR 34.5 million (32.7).
• Result before taxes excluding non-recurring items was EUR 26.8 million
(30.0). Result before taxes including non-recurring items was EUR 25.5 million
(27.7).
• Earnings per share excluding non-recurring items were EUR 0.07 (0.07), and
earnings per share including non-recurring items were EUR 0.06 (0.07).
Events in April-June 2016
• The demand for paperboards remained stable in both Europe and the Americas.
Price levels were stable.
• Metsä Board announced it will increase the price of white fresh fibre
linerboard in Europe by EUR 50 per tonne (as of 16 May 2016) and the price of
folding boxboard by EUR 110 per tonne (as of 1 August 2016).
• Metsä Board Corporation agreed on the extension of its existing syndicated
credit facility by two years. After the extension, the facility, which consists
of a loan facility of EUR 150 million and a revolving credit facility of EUR
100 million, will mature in March 2020.
Events after the review period
• Metsä Board is planning to close down its wallpaper base machine PM3 and
discontinue its loss-making wallpaper base manufacturing at the Kyro mill in
Hämeenkyrö, Finland. In addition, the company adjusts and improves operations
at the Kyro mill in order to increase its competitiveness. The company will
commence related statutory labour negotiations covering all employees at the
mill. The estimated personnel effect is up to 100 employees.
• The production of uncoated paper reels at Husum ended in July. The remaining
inventory will be sold during the second half of the year.
• As the paper production ends, the company will modify its external reporting
structure. The Non-core Operations segment and Other operations will be
discontinued, and as of the third quarter, Metsä Board will use only one
reporting segment externally for its financial reporting.
Profit guidance for July-September 2016
Metsä Board’s operating result excluding non-recurring items in the third
quarter of 2016 is expected to remain roughly at the same level as in the
second quarter of 2016.
Mika Joukio, CEO:
“The operating result for the second quarter of the year remained at the
first-quarter level, as we expected. The development of our result was still
affected by the start-up of the new paperboard production line at Husum and the
lower prices of the start-up volumes of folding boxboard. The bottlenecks in
the finishing area of production and a leak in the recovery boiler at the pulp
mill at the end of the period decreased the production volumes of folding
boxboard at Husum. In addition, they will slow down deliveries in the coming
months. Due to these production challenges, we have revised our folding
boxboard sales target for Husum from 200,000 tonnes to 150,000 tonnes in 2016.
The bottlenecks have now been eliminated, and the production volumes of folding
boxboard at Husum are growing. The operational reliability of the paperboard
production line has also clearly improved. The efficiency improvement measures
at the Husum integrated mill are progressing as planned.
Operations at our mills in Finland remained stable. However, maintenance
shutdowns at several mills took place in the second quarter as planned, which
weakened our result compared to the first quarter.
We announced price increases in fresh fibre liner-boards and folding boxboard
in Europe. We are al-ready seeing clear signs of the success of the price
increase in fresh fibre linerboards. The impact of the price increase in
folding boxboard will become evident in the coming months.
After the review period, in July, our paper production at Husum finally came to
an end. Thus, we have fully exited the unprofitable paper business. From now
on, we will focus on the production of lightweight and ecological fresh fibre
paperboards according to our strategy. The investment programme at Husum was
the last significant step in our transformation from a paper company into a
paperboard company. We are also planning to close down our wallpaper base
ma-chine PM3 due to loss-making wallpaper base manufacturing at the Kyro mill
in Hämeenkyrö, Finland.
At the moment, our most important task is to ensure success in the sales of
Husum’s new folding boxboard from Husum. However, while doing that, we must
also keep our eye on the future. In order to meet the growth in demand for
fresh fibre paperboards, we are continuously investigating options to further
develop our mills in both Finland and Sweden. We want to continue to grow
profitably together with our customers and to promote their sales by supplying
them high-quality, ecological fresh fibre paperboard.”
KEY FIGURES
2016 2016 2015 2015 2016 2015 2015
Q2 Q1 Q2 Q1 Q1–Q2 Q1–Q2 Q1–Q4
----------------------------------------------------
Sales, EUR million 422.9 435.6 522.0 525.7 858.5 1,047.7 2,007.5
--------------------------------------------------------------------------------
EBITDA, EUR million 59.6 55.5 93.3 69.3 115.2 162.6 302.5
excl. non-recurring items, 60.7 57.8 73.1 69.7 118.6 142.8 283.3
EUR million
EBITDA, % 14.1 12.7 17.9 13.2 13.4 15.5 15.1
excl. non-recurring items, 14.4 13.3 14.0 13.3 13.8 13.6 14.1
%
--------------------------------------------------------------------------------
Operating result, EUR 34.5 32.7 67.2 43.1 67.2 110.3 199.0
million
excl. non-recurring items, 35.8 35.0 47.0 43.2 70.8 90.2 179.9
EUR million
EBIT, % 8.2 7.5 12.9 8.2 7.8 10.5 9.9
excl. non-recurring items, 8.5 8.0 9.0 8.2 8.2 8.6 9.0
%
--------------------------------------------------------------------------------
Result before taxes, EUR 25.5 27.7 58.0 32.2 53.3 90.2 167.1
million
excl. non-recurring items, 26.8 30.0 40.0 32.3 56.8 72.3 150.2
EUR million
--------------------------------------------------------------------------------
Result for the period, EUR 23.2 23.9 54.7 29.3 47.1 84.0 137.3
million
excl. non-recurring items, 24.6 25.7 36.9 29.4 50.3 66.3 120.2
EUR million
--------------------------------------------------------------------------------
Result per share, EUR 0.06 0.07 0.15 0.09 0.13 0.24 0.39
excl. non-recurring items, 0.07 0.07 0.10 0.09 0.14 0.19 0.34
EUR
--------------------------------------------------------------------------------
Return on equity, % 9.4 9.5 22.5 13.2 9.3 18.2 14.7
excl. non-recurring items, 9.9 10.2 15.2 13.2 9.9 14.3 12.9
%
--------------------------------------------------------------------------------
Return on capital employed, 8.2 7.8 16.5 11.0 8.0 13.9 12.5
%
excl. non-recurring items, 8.5 8.3 11.6 11.0 8.4 11.6 11.3
%
--------------------------------------------------------------------------------
Equity ratio at end of 47 44 46 41 47 46 46
period, %
Net gearing ratio at end of 54 42 39 34 54 39 32
period, %
Interest-bearing net 2.1 1.5 1.5 1.3 2.1 1.5 1.2
liabilities/EBITDA1)
Shareholders' equity per 2.81 2.77 2.83 2.63 2.81 2.83 2.89
share at end of period,
EUR
Interest-bearing net 541.4 412.3 389.0 318.9 541.4 389.0 333.4
liabilities, EUR million
Gross investments, EUR 48.3 54.3 48.3 23.9 102.6 72.2 177.8
million
Net cash flow from -22.2 -22.3 55.8 32.5 -44.5 88.3 246.7
operating activities, EUR
million
--------------------------------------------------------------------------------
Deliveries, 1,000 tonnes
Paperboard 408 378 366 345 786 711 1,449
Non-core operations 11 15 138 156 26 294 478
Market pulp 113 144 142 150 257 292 549
--------------------------------------------------------------------------------
Personnel at the end of 2,762 2,573 2,850 3,158 2,762 2,850 2,601
period
--------------------------------------------------------------------------------
EBITDA = Earnings before interest, taxes, depreciation
and impairment charges
1) Ratio of end of period interest-bearing net liabilities to 12-month
rolling EBITDA excluding non-recurring items
Near-term outlook
Metsä Board’s paperboard deliveries are expected to grow in July–September from
the second quarter of 2016. The third quarter result will still be impacted by
the start-up volumes of folding boxboard at Husum, which will reduce the
average price of folding box-board.
The company has revised its folding boxboard sales target for Husum due to the
bottlenecks in the finishing area of the folding boxboard production and a leak
in the recovery boiler at the pulp mill. The target is to sell approximately
150,000 tonnes of new folding box-board from Husum to the Americas and for food
service packaging globally in 2016. Previous sales target was 200,000 tonnes.
The company estimates that the full production capacity of Husum’s new folding
boxboard machine will be reached by the end of 2016.
Total production costs in July–September are expected to remain at
approximately the level of the second quarter of 2016.
Demand for paperboard is expected to remain stable in both Europe and the
Americas. European producers have increased their folding boxboard capacity,
but a large part of this capacity targets the global market. The market prices
of folding boxboard and white fresh fibre linerboard are expected to remain
fairly stable or increase slightly. Metsä Board has announced that it will
increase the price of white fresh fibre linerboard and folding boxboard in
Europe.
The global demand for and supply of long- and short-fibre pulp are expected to
remain stable.
Disclosure procedure
Metsä Board Corporation follows the disclosure procedure enabled by Standard
5.2b published by the Finnish Financial Supervision Authority and hereby
publishes its Half year financial report for January–June 2016 enclosed to this
stock exchange release. Metsä Board's complete Half year report is attached to
this release in pdf-format and is also available on the company's web site at
www.metsaboard.com.
METSÄ BOARD CORPORATION
More information:
Markus Holm, CFO, tel. +358 (0)10 465 4913
Katri Sundström, Head of Investor Relations, tel. +358 (0)400 976 333
More information will be available from 1 p.m. on 4 August 2016. A conference
call for investors and analysts will be held in English and begin at 3 p.m.
(EET). Conference call participants are requested to dial in and register a few
minutes earlier on the following numbers:
Europe: +44 (0)20 3427 1925
US: +1 646 254 3370
Conference ID: 1443353.
www.metsaboard.com
Metsä Board is a leading European producer of folding boxboards and white
linerboards made from fresh forest fibres. Its lightweight paperboards are
developed as the perfect fit for consumer goods, retail-ready and food service
packaging. The pure fresh forest fibres Metsä Board uses are a renewable
resource, traceable to origin in northern forests.
The global sales network of Metsä Board supports customers worldwide, including
brand owners, converters and merchants. In 2015, the company’s sales totalled
EUR 2.0 billion, and it has approximately 2,600 employees. Metsä Board, part of
Metsä Group, is listed on the Nasdaq Helsinki.
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