Metsä Group Interim Report Q1/2017€¦ · spruce plywood products grew, particularly in Northern...
Transcript of Metsä Group Interim Report Q1/2017€¦ · spruce plywood products grew, particularly in Northern...
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Metsä Group Interim Report Q1/2017
Kari JordanPresident and CEO
4 May 2017
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• Sales EUR 1,216 million (Q1/2016: EUR 1,156 million)
• Operating result* EUR 128 million (EUR 109 million)
• Operating result of sales* 10.5% (9.5%)
• Return on capital employed* 12.5% (10.6%)
• Sales grew mainly due to increased delivery volumes
• Operating result improved mainly by favourable development
of the paperboard business
4.5.2017 Metsä Group2
Business developed as expected
Metsä Group –Q1
*comparable
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• The market prices of long-fibre and short-fibre pulp increased
• The capacity utilisation rate of the folding boxboard machine
started up in 2016 at Husum, Sweden, increased
• Metsä Tissue commenced the renewal of the recycled pulp
plant at the Mänttä mill in Finland
• Metsäliitto Cooperative acquired the 9% share in Metsä Tissue
Corporation from Jozef Antošík
• Metsä Wood sold its project business located in Pälkäne,
Finland, to Lapwall Oy
4.5.2017 Metsä Group3
Events in the first quarter
Metsä Group –Q1
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4.5.2017 Metsä Group4
1,254 1,2651,204
1,248 1,255
1,330
1,225 1,2051,156 1,184
1,1431,175
1,216
0
200
400
600
800
1 000
1 200
1 400
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Sales quarterly
Metsä Group –Q1
EUR million
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4.5.2017 Metsä Group5
Operating result
Metsä Group –Q1
105
92
104
117
129137
149
123
109
120
103 107
128
70
160
103
84
118
154
142
128
107
119
107
110
131
0
20
40
60
80
100
120
140
160
180
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Comparable operating result Operating result (IFRS)
EUR million
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4.5.2017 Metsä Group6
53
6468 71
8994
73
87
105
92
104
117
129137
149
123
109
120
103107
128
0
20
40
60
80
100
120
140
160
Q1
/12
Q2
Q3
Q4
Q1
/13
Q2
Q3
Q4
Q1
/14
Q
2
Q
3
Q
4
Q1
/15
Q
2
Q
3
Q
4
Q1
/16
Q
2
Q
3
Q
4
Q1
/17
Q
2
Q
3
Q
4
Comparable operating result
Metsä Group –Q1
EUR million
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Change in comparable operating result
4.5.2017 Metsä Group7
Metsä Group –Q1
EUR million
Comparable operating result 1–3/2016 109.5
Sales prices -22.6
Sales volumes 30.5
Exchange rates 1.6
Raw materials and energy -2.1
Employee costs 10.6
Maintenance and other -5.9
Others total 6.3 18.4
Comparable operating result 1–3/2017 127.9
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Items affecting comparability Q1/2017
4.5.2017 Metsä Group8
Metsä Group –Q1
EUR million Q1/2017
Operating result (IFRS) 131.2
Items affecting comparability:
Metsä Wood / sale of the project business 3.3
Items total +3.3
Comparable operating result 127.9
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4.5.2017 Metsä Group9
Comparable ROCE
Metsä Group –Q1
9.7
12.3
13.5
10.6
12.5
0
2
4
6
8
10
12
14
16
Q1/2013 Q1/2014 Q1/2015 Q1/2016 Q1/2017
%
Target >10 %
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4.5.2017 Metsä Group10
Equity ratio
Metsä Group –Q1
37.9 37.9
43.2 43.9 44.1
0
5
10
15
20
25
30
35
40
45
50
12/2013 12/2014 12/2015 12/2016 3/2017
%
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4.5.2017 Metsä Group11
Interest-bearing net liabilities
Metsä Group –Q1
1,510
938
610
1,033
1,226
0
250
500
750
1 000
1 250
1 500
1 750
12/2013 12/2014 12/2015 12/2016 3/2017
EUR million
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4.5.2017 Metsä Group12
Capital expenditure
Metsä Group –Q1
214143
492
758
127
0
100
200
300
400
500
600
700
800
1–12/2013 1–12/2014 1–12/2015 1–12/2016 1–3/2017
EUR million
Full-year
estimate
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Income statement
4.5.2017 Metsä Group13
Metsä Group –Q1
EUR million Q1/2017 Q1/2016 Change
Sales 1,216.1 1,155.6 60.6
Other operating income 14.0 8.3 5.7
Operating expenses -1,036.3 -990.8 -45.6
Depreciation and impairment losses -62.7 -66.3 3.6
Operating result 131.2 106.8 24.4
Comparable operating result 127.9 109.5 18.4
Share of results from associated companies and joint
ventures14.0 -0.1
14.2
Exchange gains and losses 1.4 -1.0 2.4
Other net financial items -17.1 -17.8 0.8
Result before taxes 129.5 87.8 41.8
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Key figures
4.5.2017 Metsä Group14
Metsä Group –Q1
Q1/2017 Q1/2016 Muutos
Return on capital employed, % 12.8 10.3 2.5
Comparable return on capital employed, % 12.5 10.6 1.9
Return on equity, % 16.3 11.3 5.0
Comparable return on equity, % 15.7 11.8 3.9
Equity ratio, % 44.1 42.8 1.3
Net gearing ratio, % 46 35 11
Interest-bearing net liabilities, EUR million 1,226 847 379
Capital expenditure, EUR million 127 143 -16
Personnel at end of period 9,310 9,512 -202
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Cash Flow Statement I
4.5.2017 Metsä Group15
Metsä Group –Q1
EUR million Q1/2017 Q1/2016
Cash flow from operating activities
Result for the period 106.7 68.3
Adjustments to result for the period 80.6 103.0
Interest received 1.0 0.9
Interest paid -12.5 -12.5
Dividends received 0.8 0.7
Taxes -19.0 -25.7
Other financial items, net -9.9 0.3
Change in working capital -188.7 -202.1
Net cash flow from operating activities -41.0 -67.1
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Cash Flow Statement II
4.5.2017 Metsä Group16
Metsä Group –Q1
EUR million Q1/2017 Q1/2016
Net cash flow from operating activities -41.0 -67.1
Purchase of shares 0.0 0.0
Acquired shares from non-controlling interests -30.7 0.0
Investments -127.5 -142.9
Sales of assets and others 11.7 0.8
Changes in members' capital and other capital 18.0 13.9
Interest on members' capital and dividends paid -31.1 -32.9
Change in long-term loans and committed facilities 42.0 -4.3
Change in cash and cash equivalents -158.7 -232.5
Cash and cash equivalents at beginning of the period 895.1 1,120.8
Translation differences and others 0.4 0.0
Change in cash and cash equivalents -158.7 -232.5
Cash and cash equivalents at end of the period 736.8 888.4
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4.5.2017 Metsä Group17
Personnel
Metsä Group –Q1
10,73610,410
9,599 9,300 9,310
0
2 000
4 000
6 000
8 000
10 000
12 000
12/2013 12/2014 12/2015 12/2016 3/2017
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Wood Supply and Forest Services
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Wood Supply and Forest Services
4.5.2017 Metsä Group19
Metsä Forest –Wood Supply and Forest Services
EUR million Q1/2017 Q1/2016 Change
Sales 432.6 401.2 31.5
Other operating income 0.8 2.4 -1.6
Operating expenses -424.0 -394.9 -29.1
Depreciation and impairment losses -0.9 -0.8 -0.1
Operating result 8.5 7.8 0.7
Items affecting comparability, total - - -
Comparable operating result 8.5 7.8 0.7
% of sales 2.0 1.9 0.1
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Steady supply of wood and
higher purchasing volumes
• Metsä Forest delivered a total of 8.7 million
cubic metres of wood (8.3)
• In Finland, the supply of wood was steady,
and stumpage prices remained stable
• Purchasing volume of wood was higher than
during the corresponding period in the
previous year
• Sales of forest management services
continued to grow
• 25% of wood bought from private forests
was purchased electronically
• 35% of forest management services was
sold electronically
4.5.2017 Metsä Group20
Comparable operating result EUR million
Metsä Forest –Wood Supply and Forest Services
8.7
6.9 7.0
6.3
7.8
6.5
7.7
8.98.5
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
Q1
/15
Q2
/15
Q3
/15
Q4
/15
Q1
/16
Q2
/16
Q3
/16
Q4
/16
Q1
/17
Q2
/17
Q3
/17
Q4
/17
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Wood Products Industry
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Wood Products Industry
4.5.2017 Metsä Group22
Metsä Wood –Wood Products Industry
EUR million Q1/2017 Q1/2016 Change
Sales 120.2 121.4 -1.2
Other operating income 3.9 0.6 3.3
Operating expenses -107.2 -110.6 3.4
Depreciation and impairment losses -2.9 -3.6 0.7
Operating result 14.0 7.8 6.2
Items affecting comparability, total -3.3 0.4 -3.7
Comparable operating result 10.7 8.2 2.5
% of sales 8.9 6.8 2.1
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Strong demand for wood products
• Delivery volumes and sales of Metsä Wood's
Kerto® LVL products grew, especially in North
America and the Middle East
• Delivery volumes and sales of birch and
spruce plywood products grew, particularly in
Northern Europe
• Metsä Wood is building a birch plywood mill in
Pärnu, Estonia. The new mill will begin
production in the second half of 2018
• Metsä Wood sold its project business located
in Pälkäne, Finland, to Lapwall Oy
4.5.2017 Metsä Group23
Comparable operating result EUR million
Metsä Wood –Wood Products Industry
4.5
7.1
8.08.4 8.2
13.2
9.08.3
10.7
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
Q1
/15
Q2
/15
Q3
/15
Q4
/15
Q1
/16
Q2
/16
Q3
/16
Q4
/16
Q1
/17
Q2
/17
Q3
/17
Q4
/17
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Pulp and Sawn Timber Industry
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Pulp and Sawn Timber Industry
4.5.2017 Metsä Group25
Metsä Fibre – Pulp and Sawn Timber Industry
EUR million Q1/2017 Q1/2016 Change
Sales 422.0 408.8 13.2
Other operating income 4.2 2.4 1.8
Operating expenses -350.3 -325.0 -25.3
Depreciation and impairment losses -21.4 -25.0 3.6
Operating result 54.5 61.2 -6.7
Items affecting comparability, total - - -
Comparable operating result 54.5 61.2 -6.7
% of sales 12.9 15.0 -2.1
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4.5.2017 Metsä Group26
Price of pulp (PIX) 2009–Q1/2017
Metsä Fibre – Pulp and Sawn Timber Industry
350
450
550
650
750
850
950
1050
350
450
550
650
750
850
950
1050
´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17
Hardwood/EUR Softwood/EUR Hardwood/USD Softwood/USD
USD EUR
Source: Foex
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Demand for long fibre pulp remained good
• Demand for long-fibre pulp was good. In
China the demand was stronger than
expected
• The price of long-fibre pulp grew about 2%
and short-fibre 9% in Europe during Q1 2017
• The bioproduct mill’s completion rate at the
end of March was roughly 90%.
Commissioning and test-run phase is ongoing
• Production and sales volumes of sawn timber
increased according to plan
• The prices of sawn timber increased but
remained at a low level
4.5.2017 Metsä Group27
Comparable operating result EUR million
Metsä Fibre – Pulp and Sawn Timber Industry
82.0
95.6
83.479.7
61.2
53.2
46.4
53.7 54.5
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Q1
/15
Q2
/15
Q3
/15
Q4
/15
Q1
/16
Q2
/16
Q3
/16
Q4
/16
Q1
/17
Q2
/17
Q3
/17
Q4
/17
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Paperboard Industry
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Paperboard Industry
4.5.2017 Metsä Group29
Metsä Board –Paperboard Industry
EUR million Q1/2017 Q1/2016 Change
Sales 444.5 435.6 8.9
Other operating income 3.2 6.0 -2.8
Operating expenses -378.9 -386.1 7.2
Depreciation and impairment losses -23.6 -22.9 -0.7
Operating result 45.2 32.7 12.5
Items affecting comparability, total - 2.3 -2.3
Comparable operating result 45.2 35.0 10.2
% of sales 10.2 8.0 2.2
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4.5.2017 Metsä Group30
600
650
700
750
800
850
900
950
1000
1050
1100
2011 2012 2013 2014 2015 2016 2017
Folding boxboard White-top kraftliner
Prices of folding boxboard and white-top krafliner in
Europe 2011–Q1/2017
Source: Pöyry Management Consulting ja FOEX Indexes Ltd
EUR/ tonne
Metsä Board –Paperboard Industry
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Delivery volumes increased and
profitability improved
• Operating result was improved mainly by
increased folding boxboard and linerboard
delivery volumes
• Average prices of the paperboards
produced in Finland remained roughly at the
level of the comparison period
• Capacity utilisation rate of Husum's folding
boxboard machine in Sweden was appr.
70%. The aim is 75% during 2017,
corresponding appr. 300,000 tonnes
• New extrusion coating line at the Husum mill
started up in April
4.5.2017 Metsä Group31
Comparable operating result EUR million
43.2
47.0
54.6
35.1 35.0 35.834.0 32.8
45.2
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Q1
/15
Q2
/15
Q3
/15
Q4
/15
Q1
/16
Q2
/16
Q3
/16
Q4
/16
Q1
/17
Q2
/17
Q3
/17
Q4
/17
Metsä Board –Paperboard Industry
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Tissue and Cooking Papers
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Tissue and Cooking Papers
4.5.2017 Metsä Group33
Metsä Tissue – Tissue and Cooking Papers
EUR million Q1/2017 Q1/2016 Change
Sales 252.0 246.2 5.8
Other operating income 0.6 0.9 -0.3
Operating expenses -225.5 -223.9 -1.6
Depreciation and impairment losses -9.5 -9.7 0.2
Operating result 17.6 13.5 4.1
Items affecting comparability, total - - -
Comparable operating result 17.6 13.5 4.1
% of sales 7.0 5.5 1.5
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Operating result of Tissue and Cooking Papers
improved
• Metsä Tissue’s sales grew primarily due to
increased delivery volumes
• Operating result was positively impacted by
the higher sales volume, the lower market
price of fresh fibre and the strengthening of
the Norwegian krone
• Result was impacted negatively by the
price increase of recycled fibre and the
weakening of the Swedish krona and the
British pound
• Metsä Tissue commenced the renewal of
the deinking plant at the Mänttä mill. It will
increase production efficiency and prolong
the pulp plant's lifetime
4.5.2017 Metsä Group34
Comparable operating result EUR million
Metsä Tissue – Tissue and Cooking Papers
15.8
7.6
13.2
18.6
13.5 13.2
15.8
20.6
17.6
0,0
5,0
10,0
15,0
20,0
25,0
Q1
/15
Q2
/15
Q3
/15
Q4
/15
Q1
/16
Q2
/16
Q3
/16
Q4
/16
Q1
/17
Q2
/17
Q3
/17
Q4
/17
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Summary
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Outlook for the business areas 1/2
Wood Supply and Forest Services
• Wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms of energy wood,
mainly on crown wood
• The sales of forest management services are expected to remain good
Wood Products
• Market demand for wood products will remain good, and this will be reflected in the order book level, which will be
higher than in the previous year, particularly in Kerto® LVL products
• The outlook for plywood products is likewise positive. Construction in the UK is expected to remain at a good level,
and delivery volumes in the second quarter are expected to grow, supported by the season
Pulp and Sawn Timber
• Demand and supply in the pulp markets are well-balanced in both the Asian and European markets
• Demand for spruce sawn timber will remain good in all of the main markets, with demand in China being particularly
strong
• The oversupply situation in pine sawn timber has eased off, and market balance has improved
4.5.2017 Metsä Group36
Summary
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Outlook for the business areas 2/2
Paperboard
• Global demand for high-quality consumer packaging paperboard made from fresh fibre is expected to
continue to grow
• Metsä Board's paperboard deliveries in April–June are expected to grow from the previous quarter. The
growth is supported by Husum's new folding boxboard production
Tissue and Cooking Papers
• In the tissue and cooking paper markets, demand is expected to remain stable in all market areas
• Demand for tissue paper will increase particularly in Eastern Central Europe, and demand for cooking
papers in Asia
4.5.2017 Metsä Group37
Summary
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• Metsä Group’s comparable operating
result is in the second quarter of 2017
expected to be roughly at the same
level as in the first quarter of 2017
4.5.2017 Metsä Group38
Near-term outlook
Summary
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