Debt Investor Presentation 2Q 2014 31.7. 2014 Metsä Board Metsä Group
Thanks to Strong Cash Flow Net Debt Reduced to EUR 540 Million Net Debt, m€ 1000 ‒ Gross debt EUR 699 million and net debt EUR 540 million 827 750 ‒ Net gearing 65 %, equity ratio 40 % and average interest rate 540 reduced to 4.2% at the end of 2Q 2014 500 ‒ Funds from operations increased to EUR 102 million in 2Q 250 0 ‒ ONWC reduced clearly from 1Q due to accounts payable 2010 2011 2012 2013 2Q14 Net Debt / EBITDA improvement measures and timing reasons 5 ‒ Solid liquidity position of over EUR 400 million 4 2,7 3 2,5 2 1 0 2010 2011 2012 2013 2Q14 2 Metsä Board Metsä Group
Loans and Interest Rate At the end of 2Q 2014 ‒ Average maturity of long term loans 3,8 years ‒ Average interest rate of loans (including derivatives) 4,2 % ‒ Interest rate maturity of loans (including derivatives) 33 months ‒ Of the loans about 24 per cent was subject to variable interest rates and 76 per cent to fixed interest rates 3 Metsä Board Metsä Group
Diversified Funding Sources Long-Term Interest Bearing Liabilities 30.6. 2014 8 % 3 % 32 % Bonds Pension premium loans Loans from financial institutions 29 % Finance leases Other interest bearing liabilities 28 % Total 693 m€ 4 Metsä Board Metsä Group
Interest Bearing Net Liabilities 30.6.2014 m€ ‒ Long-term 693 ‒ Short-term 6 Total interest bearing liabilities 699 ‒ Liquidity and interest bearing receivables 159 Interest bearing net liabilities 540 5 Metsä Board Metsä Group
Well Balanced Maturity Schedule Long-term Interest Bearing Liabilities and Committed Undrawn Credit Facilities 30.6.2014 m€ 300 253 250 Long-term interest bearing liabilities Committed undrawn credit facilities 200 181 150 100 100 100 83 50 34 24 14 14 4 0 2014 2015 2016 2017 2018 2019 2020 >2 020 6 Metsä Board Metsä Group
Balance Sheet Ratios Net Debt and Net Debt/EBITDA* Net Gearing, % Net debt, m€ Net debt/EBITDA 120 900 20 827 106 783 18 777 800 17,7 100 16 700 84 83 625 14 597 80 72 600 70 540 65 12 500 60 10 400 8 300 40 6 200 4,4 4 3,4 20 2,9 2,7 2,5 100 2 0 0 0 2009 2010 2011 2012 2013 2Q 14 2009 2010 2011 2012 2013 2Q14 7 Metsä Board *Excluding non-recurring items Metsä Group
Quarterly Balance Sheet Ratios Equity Ratio Net gearing % % 45 75 80 41,0 74 40,7 39,8 38,7 69 70 69 40 70 65 33,3 32,4 35 60 30 50 25 40 20 30 15 20 10 10 5 0 0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 8 Metsä Board Metsä Group
Debt Programs 30.6.2014 The following table sets forth the significant debt securities issued and outstanding of Metsä Board as at June 30, 2014 Average Long-term borrowings Total amount Outstanding I nterest Rate * ) Maturity (currency in millions) EUR 225 million Bond Issue 2014 EUR 225 EUR 225 4,5 % 2019 Syndicated credit facility 2014 EUR 250 EUR 150 5,1 % 2018 EUR 103 million bilateral loans EUR 103 EUR 103 3,6 % 2014-2017 EUR 24 million finance leases EUR 24 EUR 24 2,3 % 2014-2020 EUR 210 million pension loans EUR 210 EUR 195 3,8 % 2014–2020 *) The average interest rate take into account outstanding interest rate swaps and amortised arrangement fees. Average interest rate of all Metsä Board interest bearing liabilities including interest rate derivatives per 30.6.2014 is 4,2 %. The following table sets forth Metsä Board´s principal long-term liquidity reserves as at June 30, 2014: Average Liquidity reserves Total amount Outstanding I nterest Rate * ) Maturity (EUR in millions) Revolving Credit Facility 2014 EUR 100 EUR 0 – 2018 Pension loan facilities EUR 210 EUR 195 3,8 % - Short-term funding programmes Metsä Group internal short-term limit EUR 150 EUR 0 – 0-12 months Metsä Group Treasury funding programmes: EUR 150 million domestic CP-program EUR 150 EUR 2 0,4 % 0-12 months 9 Metsä Board Metsä Group
Ratings’ History 2000 2007 S&P: Short term ratings lowered to A3, Moody’s: Downgrade to B3, negative outlook Long term ratings placed to credit watch S&P: Downgrade to B, negative outlook negative S&P: Downgrade to B-, stable outlook Moody’s: Long and short term ratings 2008 outlook changed from stable to negative S&P: Outlook to negative 2001 2009 S&P: Long term ratings lowered to BBB-, S&P: Downgrade to CCC+, negative outlook stable outlook Moody’s: Downgrade to Caa1, outlook negative Moody’s: Long and short term ratings 2010 lowered to Baa3/P3, negative outlook S&P: Outlook to stable 2003 Moody’s: Outlook to stable S&P: Downgrade to BB+, stable outlook S&P: Upgrade to B-, stable outlook Moody’s: Downgrade to Ba1, negative Moody’s: Upgrade to B3, outlook to positive outlook 2011 2004 S&P: Outlook to positive S&P: Outlook changed from stable to S&P: Outlook to stable negative, ratings affirmed Moody’s: Outlook to stable Moody’s: Downgrade to Ba2, stable outlook 2012 2005 Moody’s: Outlook to positive S&P: Downgrade to BB, stable outlook 2013 Moody’s: Outlook changed from stable to negative, S&P: Outlook to positive ratings affirmed Moody’s: Upgrade to B2, outlook stable 2006 S&P: Upgrade to B, outlook stable S&P: Downgrade to BB-, negative outlook Moody’s: Outlook to positive Moody’s: Downgrade to Ba3, negative outlook Moody’s: Downgrade to B2, negative outlook S&P: Downgrade to B+, negative outlook 10 Metsä Board Metsä Group
Standard & Poor’s Positive Rating Development Moody’s BB+ | Ba1 BB | Ba2 BB- | Ba3 Stable B+ | B1 Positive B | B2 B- | B3 CCC+ | Caa1 CCC | Caa2 2005 2006 2007 2008 2009 2010 2011 2012 2013 11 Metsä Board Metsä Group
Thank You! www.metsaboard.com Juha Laine Headof IR +358 10 4654335 juha.laine@metsagroup.com Metsä Board Metsä Group
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