Metsä Board Corporation FY 2019 Results Presentation material 12 February 2020
COMPARABLE OPERATING TOTAL PAPERBOARD OPERATING RESULT CASH FLOW INVESTMENTS DELIVERIES Q4 2019 in summary 39.1 89.6 56.8 440,000 tonnes EUR million EUR million EUR million • Strong cash flow • Paperboard delivery volumes slightly lower due to seasonality, prices remained stable • In Europe, market pulp prices continued to decline • Profitability supported by less maintenance and lower production costs • First investments made in the renewal of the Husum pulp mill • Board of Directors proposes a distribution of EUR 0.24 per share for 2019 2 2019 Results
3
Sustainability highlights from 2019 Developing low-carbon solutions according to the principles of the circular economy • New ambitious sustainability targets for 2030 • Several external recognitions, e.g. EcoVadis Gold rating, position on the CDP Climate A-list • Improved FBB portfolio which saves resources and reduces carbon footprint • New ecobarrier paperboard to replace use of plastic Actuals in 2019: SHARE OF FOSSIL-FREE ENERGY PROCESS WATER ENERGY CONSUMPTION CONSUMPTION 83% +0.7% -11% More information and all targets at PER PRODUCED TONNE, PER PRODUCED TONNE, COMPARED TO 2018 COMPARED TO 2018 www.metsaboard.com/sustainability 4 2019 Results
Total paperboard delivery volumes slightly down year-on-year White kraftliner Folding boxboard +3% 500 161 400 173 170 161 171 149 138 140 146 134 152 163 1,000 tonnes 1,000 tonnes 300 200 328 304 302 305 299 297 297 299 300 293 276 265 100 0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2018: FY 2019: 1,830,000 tonnes 1,791,000 tonnes -2% 5 2019 Results
FBB deliveries in 2019 (2018) Paperboard sales development by total 1,207,000 tonnes (1,215k) APAC market area in 2019 105,000 (119k) 9% EMEA Americas 242,000 860,000 EMEA (252k) (844k) 20% • Stable demand in FBB with rising price levels 71% • Soft market situation in WKL in H1, demand picked up during the summer. Slightly improved price levels year-on-year WKL deliveries in 2019 (2018) AMERICAS total 584,000 tonnes (615k) APAC • Slightly lower delivery volumes in FBB with clearly 9,000 (4k) EMEA improved price levels. Stable market situation in 385,000 Americas (438k) WKL with increased delivery volumes 190,000 (173k) 33% APAC 66% • Lower FBB delivery volumes FBB = Folding boxboard WKL = White kraftliner 6 2019 Results
Higher paperboard prices supported 2019 sales, profitability burdened mainly by lower market pulp prices Sales Comparable operating result EUR million EUR million and % of sales FY 2019: FY 2018: FY 2018: FY 2019: EUR 1,932 million EUR 1,944 million EUR 252 million EUR 184 million 2000 300 13.0% 9.5% 458 Q4 478 Q4 1600 240 Q4 60 475 EUR million EUR million 1200 489 Q3 180 Q3 39 Q4 64 Q3 43 800 Q3 120 519 477 Q2 Q2 59 Q2 41 Q2 400 60 Q1 492 487 Q1 69 62 Q1 Q1 0 0 2018 2019 2018 2019 7 2019 Results
Our long-term financial targets aim for profitability and a strong balance sheet Comparable ROCE: Net debt/comparable EBITDA: Dividend policy: Maximum level 2.5x Payout ratio at least 50% of net result Target at least 12% 76 < 2.5x 14.4 59 2.0 51 50 10.4 11.2 > 50% > 12% 1.2 8.1 1.1 1.0 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 8 2019 Results
Market pulp price decline decelerating but coronavirus causes uncertainty Pulp price (PIX) development in Europe and China • In 2019 European NBSK (USD) decreased by Long-fibre pulp, Europe Long-fibre pulp, China (net) 16%, while Chinese prices dropped by 28%*. Some stabilisation especially for Chinese prices USD/tonne USD/tonne towards the end of the year 1 400 1 400 1 200 1 200 • Strong Chinese consumption throughout 2019, driven by the resurgence of paper and paperboard 1 000 1 000 production. Demand trend remains expanding. In 800 800 Europe, the trend remains rather weak 600 600 • Global stock levels for both NBSK and BHK have 400 400 declined from the peak levels in the summer 2019 200 200 0 0 2013 2014 2015 2016 2017 2018 2019 *) calculated from the difference between the average yearly prices Source: Fastmarkets Foex 9 2019 Results
Total capex in 2019 roughly EUR 100 million Husum pulp mill renewal will increase capex in the coming years Capital expenditure and depreciation Main investments in growth and development 2014–2020E: 250 Husum pulp mill renewal 2020E 200 Husum pulp mill renewal, 2019 EUR million 150 new sheeting line in Äänekoski New baling line in Kaskinen BCTMP mill: 2018 100 30,000 new BCTMP capacity New extrusion coating line in Husum: 2017 50 100,000 t/a PE coating capacity 0 New folding boxboard production line in 2015–16 2014 2015 2016 2017 2018 2019 2020E Husum: 400,000 t/a of FBB and linerboard production line conversion: 250,000 t/a of Capex in growth and development WKL Maintenance capex Depreciation NOTE! Estimated investments in 2020 are provisional and dependent on the environmental permit process related to the Husum pulp mill renewal 10 2019 Results
Strong operative cash flow in 2019 Q4 cash flow supported by release in working capital 250 250 200 200 150 150 EUR million EUR million 106 100 90 100 79 68 59 54 43 44 50 50 37 36 36 31 30 30 29 26 23 20 13 0 0 -3 -50 -50 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Cash flow from operations, quarterly Free cash flow, quarterly Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months 11 2019 Results Free cash flow = cash flow from operations − total investments
Renewal of Husum pulp mill in Sweden
Husum pulp mill renewal The renewal consists of two phases Ø Create a solid foundation to increase paperboard capacity in the Husum integrate in the future Ø Secure cost efficient pulp and energy production Enable the company to reach its ambitious target of fossil-free mills by 2030 Ø First phase: New recovery boiler and turbine New recovery Company Company Pre- applies expects to boiler and First engineering amendment to make the final turbine phase investments expected to be environmental investment launched made in operation permit decision 2019 2020 2021 2022 Second phase: New fibre line. To be implemented during the 2020s after the first phase is fully completed 13 2019 Results
Husum pulp mill renewal in figures Investment value • Investment value of first phase is EUR 320 million, divided over 2019– 2022 – In 2019 investments were EUR 21 million Estimated impacts of the first phase • Self-sufficiency in electricity increases from 40% to over 80%* • Reduced amount of purchased oil • Lower maintenance capex and costs – Reduced duration and extended intervals between planned shutdowns → Increased pulp and paperboard production • Annual cash flow improvement EUR 35 million, of which EUR 30 million EBITDA improvement and EUR 5 million lower capex • Financing costs to increase EUR 2 million per year *) Annual increase in electricity production about 330 GWh, 14 2019 Results resulting in cost savings at 2019 electricity prices of approximately EUR 12 million
Near-term outlook January–March 2020 • Strikes in Finnish mills will have a negative impact on operating result of approximately EUR 20 million, affecting mainly Q1 2020 • Metsä Board’s paperboard delivery volumes will be roughly at the same level as in Q4 2019 • Paperboard prices expected to be stable, pulp prices are not expected to decline • No major planned maintenance shutdowns during Q1 2020 • Stable production costs, prolonged mild winter might increase wood costs 15 2019 Results
Result guidance for January–March 2020 Metsä Board’s comparable operating result for the first quarter of 2020 is expected to weaken compared to the fourth quarter of 2019 due to strikes at mills in Finland. 16 2019 Results
Summary • Q4 2019 development met the expectations • First investments made to Husum pulp mill renewal • Strikes in the Finnish mills will have a negative impact on profitability in H1 • Market outlook: – Stable market situation for paperboard – Pulp prices are not expected to decline, but coronavirus is causing uncertainty 17 2019 Results
Appendix
Key financials Change Change Q4/19 Q4/18 Q4/19 FY 2019 FY 2018 2019 vs. Q4/18 vs. 2018 Sales EUR, m 478 458 4% 1,932 1,944 -1% EBITDA* EUR, m 59 81 -27% 279 344 -19% Operating result* 39 60 -35% 184 252 -27% EUR, m % of sales* % 8.2 13.1 9.5 13.0 Metsä Fibre’s share of operating EUR, m 1 32 -97% 43 124 -64% result* Earnings per share EUR 0.05 0.14 -64% 0.41 0.57 -28% ROCE* % 8.9 13.7 10.4 14.4 Capex (own assets) EUR, m 54 34 59% 95 70 33% Cash flow from operations EUR, m 90 30 195% 201 151 33% IB Net debt, at end of period EUR, m 308 335 -8% 308 335 -8% *comparable 19 2019 Results
Recommend
More recommend
