Metsä Board Interim report Q3/2015
Solid performance in Q3/2015 • Profitability improved from the previous quarter 14 ROCE, % (excl. non-recurring items) • Paperboard delivery volumes grew and price levels remained target is >12% from 2017 12 stable 10 • Production of coated paper ended at Husum mill 8 12.1 6 9.1 4 6.4 After the review period: 4.8 2 3.4 • Metsä Board announced price increase in FBB in Europe 0 Q1 – Q3/15 2011 2012 2013 2014 • Installation of new FBB machine in Husum began • Investment decision in extrusion coating 2 Q3/2015
Steady sales and improving margins 50 Operating result* 15% Sales 600 EUR million and % of sales EUR million 40 500 10% 30 400 20 5% 300 10 19 29 36 28 35 37 43 47 55 502 479 501 494 514 499 526 522 498 0 0% 200 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 50 15% Pre-tax result* EUR million and % of sales 40 10% 30 20 5% 10 9 18 21 20 27 32 32 40 48 0 0% Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 3 Q3/2015 *) excluding non-recurring items
Main operating result drivers in Q3/2015 vs. Q2/2015 Paperboard delivery Strike in Finland volumes Lower FX hedging costs Maintenance shutdown in Kemi Negative profit impact from Gohrsmühle mill* Paper delivery volumes was eliminated (planned) *) Divested in May 2015 4 Q3/2015
Paperboard deliveries continued to grow in Q3/2015 Annual average growth rate (CAGR) in 2013 – 2015E: 12% 1,000 tonnes 360 300 137 141 120 130 111 110 112 95 240 93 94 91 180 120 224 210 213 204 203 197 197 192 191 189 185 60 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Folding boxboard Fresh forest fibre linerboard 5 Q3/2015
Most important growth area is Americas Actual and targeted deliveries to Americas 300 300 250 250 1,000 tonnes 200 150 100 50 0 2011 2012 2013 2014 2015E 2018 target Folding boxboard Fresh forest fibre linerboard 6 Q3/2015
Paperboard segment in Q3/2015: Sales increased and profitability improved Operating result , excl. non-recurring items Sales 16% 16% 15% 60 16% 14% 400 12% 13% EUR million EUR million 40 10% 300 Operating result, M € 65 Operating result, M € 61 60 7% 200 51 44 EBIT-% 20 4% 100 1% 0 0 -2% Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q3/2015 highlights • FBB deliveries increased compared to Q2/2015 • Price level remained stable • Result was weakened by the strike in Finland and maintenance shutdown in Kemi 7 Q3/2015
Non-core operations segment in Q3/2015: Sales decreased as expected Operating result , excl. non-recurring items Sales 150 2 2% EUR million Operating result, M € EUR million 100 0 0% Operating result, M € -2.9 -1.8 -3.2 -3.4 -1.3 EBIT-% 50 -2 -2% -1% -2% -2% -3% -3% 0 -4 -4% Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q3/2015 highlights • Paper deliveries decreased as planned and prices declined slightly compared to Q2 2015 • Negative profit impact from Gohrsmühle was eliminated (divested in May 2015) • Coated paper production discontinued in Husum 8 Q3/2015
Exchange rate changes during the last 12 months have been favourable • Only minor positive impact on operating result after hedges in Q3 2015 compared to previous quarter • Duration of Metsä Board’s hedges of the main foreign currency flows has been 4 – 6 months during the last 12 months • Annual unhedged operating profit sensitivity of 10% change vs. euro – EUR 45 million in USD – EUR 20 million in GBP – Reversed EUR 30 million SEK • Segment figures reflect exchange rate changes rapidly but hedge accounting result in Other operations balance the impact 9 Q3/2015
Strong balance sheet Equity ratio, % Net debt, EUR million and Net gearing, % Net debt/EBITDA 1000 5 50% 120% 46% 106% 41% 4.4 39% 100% 40% 800 4 33% 3.4 73% Target 70% 80% 70% 2.9 27% 30% 600 3 60% 51% 1.8 20% 400 2 34% 40% 1.2 200 1 10% 20% 783 625 597 427 344 0% 0% 0 0 2011 2010 2013 2014 9/15 2011 2012 2013 2014 9/15 2011 2012 2013 2014 9/15 Net debt, EUR million Net debt/EBITDA 10 Q3/2015
Financial costs are declining steadily Net financial costs and average interest rate % EUR • Net financial costs in January – 60 5.5 September totalled EUR 27 million 5.0 (Q1 – Q3/2014: EUR 34 million) 40 4.5 • Declining costs due to the lower interest rates, credit margins and 4.0 20 IB debt 3.5 • Average interest rate in IB debt in 47 56 39 27 Q1 – Q3/2015 was 3.8% 0 3.0 Q1 – Q3 2012 2013 2014 2015 Net financial costs, EUR million Average interest rate, % 11 Q3/2015
Investment programme in Husum continued as planned • Installation of new FBB machine started in October, production start-up in January 2016 • Paper machines PM6 and PM7 closed down in Q4 • Husum will become a leading fresh forest fibre paperboard unit in Europe Folding boxboard production (BM1) Linerboard production (BM2) • • Capacity 400,000 t/a Capacity 300,000 t/a • • Deliveries mainly to Americas and Deliveries to Europe and Americas Food service globally • Remaining uncoated paper* • Full production capacity reached production to linerboard production by the end of 2016 by end of 2017 • Expected delivery volumes in 2016 at least 200,000 tonnes 12 Q3/2015 *) current run-rate 150,000 tn/a
Completion of the transformation and expected impacts • Transformation process in Husum mill, Sweden – Annual Operating result impact +EUR 50 million – Fully impact mostly in 2017 and fully in 2018 – Expected impact on 2016 is roughly one third of the total • Gohrsmühle divestment – Annual Operating result impact +EUR 20 million – Roughly half materialises in 2015 – Reduces annual sales by EUR 90 million • Total paperboard capacity after the transformation over 2 million tonnes All figures are based on company estimates and compared to FY2014 figures 13 Q3/2015
Metsä Board expands its offering in food and food service paperboards by investing in extrusion coating • Investment value EUR 38 million • Will be implemented at Husum mill • Start-up in Q1/2017 with capacity of 100,000 t/a • In 2015 –2016 Metsä Board’s paperboards are coated by external converter • The company continues to develop other barrier solutions including biobased materials Food service packaging requires barrier features e.g. moisture and fat resistance 14 Q3/2015
Significant recognitions for product quality and sustainability 2015 Pro Carton ECMA awards • Four carton packages using Metsä Board’s paperboard won awards including the top honour of the sustainability award 2015 CDP • CDP recognised Metsӓ Board’s climate change transparency with score of 100/100. The company was included on the Nordic Disclosure Leadership Index (CDLI) • Metsä Board was also recognized as a world leader for sustainable use of water. ECMA is the International Network of Folding Carton Organisations; carton businesses, national carton associations and suppliers to the carton industry. CDP is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. CDP works with market forces, including 767 institutional investors with assets of US$92 trillion, to motivate companies to disclose their impacts on the 15 Q3/2015 environment and natural resources and take action to reduce them.
Near-term outlook for Q4/2015 • Paperboard delivery volumes are expected to decrease slightly due to the seasonally weaker December. Average price level is expected to remain stable • Metsä Board announced price increase in FBB in Europe, effective from 1 December • Paper delivery volumes will decrease clearly as planned • Long fibre pulp supply and demand is expected to be in balance • The earlier announced investment shutdown in Husum will have a negative impact on operating result of approximately EUR 15 million • Average production costs are not expected to change materially in Q4/2015 16 Q3/2015
Profit guidance for Q4/2015 Metsä Board’s operating result excluding non -recurring items in Q4/2015 is expected to decline compared to Q3/2015 The result is weakened primarily due to the shutdown of the integrated mill related to Husum's investment programme 17 Q3/2015
Summary • Operating result in January – September 2015 already exceeded the full year operating result in 2014 • Paperboard delivery volumes continued to grow, a slight decline is expected in Q4/2015 • Metsä Board continues its extensive product development work and expands the product offering • Transformation process to pure paperboard company is near to its’ completion 18 Q3/2015
Appendix
ROCE-% and EBIT, % ROCE-%, excl. non-recurring items EBIT-%, excl. non-recurring items 14 14 12.1 12 12 9.4 10 9.1 10 8 8 6.8 6.4 % % 5.2 6 6 4.8 3.6 3.4 4 4 2.4 2 2 0 0 2011 2012 2013 2014 9/2015 2011 2012 2013 2014 9/2015 21 Q3/2015
EBITDA development EBITDA, excl. non-recurring items 250 236 224 208 200 185 180 EUR million 150 100 50 0 Q1 – Q3/2015 2011 2012 2013 2014 22 Q3/2015
Recommend
More recommend
