ceo's review at agm 2015 eng (id 170704) governance… · +21% 700 / 33% post-measures sca...
TRANSCRIPT
Metsä Board
CEO’s Review
AGM 2015
Mika Joukio
Metsä GroupMetsä Board2
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
Metsä GroupMetsä Board
Metsä Board in brief
‒ The leading European fresh forest fibre paperboard company
‒ Main customers are consumer goods companies, corrugated packaging manufacturers, printers and merchants
‒ Valuable holdings in Metsä Fibre (24.9%) and Pohjolan Voima (2.6%)
‒ Global sales to over 100 countries and nine production units in Finland, Sweden and Germany
‒ Sales of EUR 2.0 billion and EBIT (excl. non-recurring items) of EUR 137 million in 2014
2 008 2 019 2 108
2012 2013 2014
EBIT margin (%) 1)Sales (EURm)
1) EBIT margin excl. non-recurring items
3
5,2%6,8%
3,6%
Metsä GroupMetsä Board
Global packaging materials market size is about EUR 600bn and it is growing
Wood fibre based
materials36 %
Others64 %
‒ Growing population
‒ Urbanization
‒ Environmental awareness
‒ Safety
Global underlying demand growth for Metsä Board’smain grades folding boxboard and white fresh forestfibre linerboard is estimated to be 3-4 % per annum
Source: Smithers Pira
4
Highest growth inpaperboard packaging, accounting
for the largest share of the total
Metsä GroupMetsä Board
5
White top kraftliners
Folding Boxboard
Fully bleached
linerboards
Metsä Board offers a wide range of high-quality fresh forest fibre paperboards
Metsä GroupMetsä Board
Metsä Board’s paperboards are results of successful product development
Recycled fibre based cartonboard
Average FBB
SBB (Solid Bleached Board)
Metsä Board FBB
6
‒ Pure and safe
‒ Superior printing surface
‒ Consistently high quality
‒ Even over 30 % lighter in weight than other paperboards
Metsä Board’s paperboards offer an excellent way for consumer goods companies to improve quality of their packages and sustainability of their operations
Metsä GroupMetsä Board
Metsä Board’s paperboard deliveries increased by 10 % in 2014
7
+ 7 %
169 176 185 185 189 192 197 185 191 197 210 203
8085
93 8594 93 95
91110 108
118109
0
60
120
180
240
300
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Fresh forest fibre linerboardFolding boxboard
+ 10 %1000 tonnes
Metsä GroupMetsä Board
Metsä Board grows the fastest in North America where its volumes increased over 40% in 2014
8
Fresh forest fibre linerboard deliveries to North America, 1,000 tonnes
0
30
60
90
120
150
180
2009 2010 2011 2012 2013 2014
FBB deliveries to North America, 1,000 tonnes
0
5
10
15
20
25
30
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
FBB volume target in North America is over 300 000 t/a in mid-term
Linerboard volume target in North America is over 250 000 t/a in mid-term
Metsä GroupMetsä Board
300
600
900
1 200
1 500
1 800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
tonn
es/a
nnum
/em
ploy
eeProductivity has been improved significantly since 2005
9
Production capacity per employee per annum at Metsä Board’s current mills
Metsä GroupMetsä Board10
Profitability of Metsä Board’s paperboard business the bestin its field in Europe
Operating result, excl. non-recurring items, % of salesOperating result excluding non recurring items % of sales
Metsä GroupMetsä Board11
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
Metsä GroupMetsä Board
Metsä Board grows its paperboard business and plans to fully exit paper production
‒ Major growth step in the folding boxboard business thanks to the EUR 170 million investment in a new production line and related infra at Husum mill
‒ Linerboard volumes from Husum to be tripled from 2014 level to close to 300 000 tonnes fully from 2018
‒ Planned discontinuation of Husum mill’s paper production mostly by the end of 2015 and fully by the end of 2017
‒ Measures to eliminate losses of Gohrsmühle mill in Germany in process
‒ These final steps of the transformation are expected to be financed by current liquidity, credit facilities, operating cash flow and a share offering
12
Metsä GroupMetsä Board
Share offering was completed successfully
‒ Share offering was oversubscribed: preliminary result 140 %
‒ Size was approximately EUR 100 million
‒ Total amount of Metsä Board’s shares increases to 355.512.746 of which‒ A-shares: 35.895.651‒ B-shares: 319.617.095
‒ Final results of the offering will be published on 30 March (estimated timing)
‒ Trading with the new shares commences on 1 April (estimated timing)
13
Metsä GroupMetsä Board
New measures finalize Metsä Board’s successful transformation
ROCE %
Marketgrowth
‒ 2005: New strategy‒ 2007-2013: Numerous
divestments, closures and restructuring measures
‒ 2015: Completion of the transformation
The leading fresh forest fibre paperboard
company in EuropeEuropean
paper
Fresh Forest Fibre Paperboard
14
Metsä GroupMetsä Board
Investment in Husum the most cost-competitive alternative to increase capacity
‒ Metsä Board’s biggest mill integrate
‒ Skilled personnel
‒ Large two line pulp mill
‒ State of art coating technology
‒ Efficient power plant
‒ Own harbour
‒ Good existing other infrastructure
‒ Proximity to large forest areas
15
Metsä GroupMetsä Board
Husum mill will have two production lines and it becomes a leading fresh forest fibre paperboard unit in Europe
‒ New folding boxboard machine, BM1‒ EUR 170 million investment ‒ Production capacity approximately 400,000 t/a ‒ Start up in early 2016‒ Full production capacity reached by end 2016
‒ Current PM8 to be converted to a linerboard machine, BM2‒ Only minor investment needed‒ Production capacity approximately 300,000 t/a ‒ Start up in spring 2015‒ Husum’s linerboard sales run rate over 100,000 t/a at the moment
‒ Current state of art off-line coating machine serving both paperboard machines
‒ All in all, Husum’s fresh forest fibre paperboard capacity will be approximately 700,000 t/a
16
Metsä GroupMetsä Board
New paperboard volumes expected to be sold mainly outside Europe
‒ Husum’s new folding boxboard volumes planned to be sold mainly to North America and to the food service segment globally
‒ New linerboard volumes expected to be sold both in Europe and North America, increasingly also to new applications e.g. in food packaging
‒ If the demand supply situation so requires in the coming years, Metsä Board has possibilities to adjust its production accordingly
17
Metsä GroupMetsä Board
Gohrsmühle mill’s losses targeted to be eliminated
‒ Main products cast coated and label papers
‒ Approximately 480 employees
‒ Annual sales about EUR 90 million and operating loss excl. non-recurring items EUR 20 million in 2014
‒ Main target is to divest the mill during the first half of 2015
‒ If the divestment will not materialize in the set time frame, other measures to eliminate the losses will be introduced, which may even include a partial or complete shutdown of the mill
18
Metsä GroupMetsä Board
Significant financial improvements thanks to finalization of the transformation
‒ Expected positive impact on annual operating result excluding non-recurring items approximately EUR 50 million compared to 2014
‒ Mostly in 2017 and fully in 2018‒ No material change in Metsä Board’s total annual sales due to measures in Husum
‒ Additionally, elimination of Gohrsmühle mill’s losses would lead to annual sales reduction of approximately EUR 90 million and annual operating result (excl. non-recurring items) improvement of approximately EUR 20 million
19
Metsä GroupMetsä Board
Metsä Board strengthens its market leadership
20
Note: Share of production capacity currently shown in parenthesisSources: Metsä Board, Pöyry Management Consulting Oy
Largest White Fresh Forest Fibre Linerboard Producers in Europe
Largest Folding Boxboard Producers in Europe
400
4002000 800 1,2001,000 1,400600
Capacity: 1000 tons/a
1335 / 43%
+43%
Current Post-measures
Holmen (7%)
IP (8%)
Mayr-Melnhof (13%)
Stora Enso (25%)
935(35%)
120
2001000 700300 600500400
Smurfit Kappa
(15%)
(13%)
Mondi
580(29%)
(25%)
(12%)
Current
+21%
700 / 33%
Post-measures
SCA
BillerudKorsnäs
Capacity: 1000 tons/a
Metsä GroupMetsä Board21
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
Metsä GroupMetsä Board
‒ Profitability improved from previous year
‒ Cash flow was strong and net debt reduced clearly to EUR 427 million
‒ Paperboard delivery volume increased significantly and price levels were stable
‒ Metsä Board’s folding boxboard was successfully launched to North America and to the global food service segment
‒ Production volumes and efficiencies improved
‒ Final steps in transformation to a paperboard company were introduced
‒ Mika Joukio started as the new CEO in October and the organization was renewed as of 1 Jan 2015
Highlights in 2014
22
Metsä GroupMetsä Board
0,170,27
0
0,1
0,2
0,3
0,4
2013 2014
Metsä Board’s profitability improved in 2014
5878
0
25
50
75
100
2013 2014
6,49,1
0
3
6
9
12
2013 2014
2019 2008
0
1000
2000
3000
2013 2014
104137
0
40
80
120
160
2013 2014
SalesOperating result, excl. non-rec. items
Result before taxes, excl. non-rec. items
m€ m€
m€
114 117
0
40
80
120
160
2013 2014
Operating result
m€
Result before taxes
m€
ROCE, excl. non-rec. items
%
Earnings per share, excl. non-rec. items
€ per share
49
100
0
25
50
75
100
125
2013 2014
23
Metsä GroupMetsä Board
Balance sheet strenghtened in 2014
24
Net debt, EUR million
2,7
4,4
3,4
2,9
1,8
0
1
2
3
4
5
2010 2011 2012 2013 2014
Net debt / EBITDA, excluding non recurring items
427
597
625
783827
0
200
400
600
800
1000
2010 2011 2012 2013 2014
Metsä GroupMetsä Board
‒ USD and SEK vs. Euro have moved to favourable direction from Metsä Board’s viewpoint in 2H 2014
and in early 2015‒ Hedging of the main foreign currency flows is 5-7 months
‒ Positive result impact from exchange rate changes in 2014
was about EUR 15 million compared to 2013‒ Positive impact in 2015 expected to be bigger
‒ Annual unhedged EBIT sensitivity of 10 % change vs. euro‒ EUR 45 million in USD
‒ EUR 20 million in GBP
‒ Reversed EUR 30 million SEK
Exchange rate changes favourable for Metsä Board
25
Metsä GroupMetsä Board26
‒ Metsä Board’s operating result excluding non-recurring items is expected to
improve slightly in 1Q 2015 compared to 4Q 2014
Near- term profitability outlook
Operating result excluding non-recurring itemsEUR million
3019
29 28
6
2520
24 2636 35 37
0
10
20
30
40
50
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Result before taxes excluding non-recurring itemsEUR million
-9
1710 9
1927 32
918
42021
-10
0
10
20
30
40
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Metsä GroupMetsä Board27
Content
1. Metsä Board in brief
2. Final steps in transformation
3. Results in 2014 and outlook
4. Summary
Metsä GroupMetsä Board
Key priorities in 2015
‒ Grow profitably the paperboard businesses globally
‒ Successful implementation of the investment project in Husum
‒ Secure good price levels
‒ Further improve excellent product quality and supply chain
‒ Develop new products for existing and new end uses
‒ Elimination of the losses from Gohrsmühle mill
‒ Continue productivity improvements and cost savings
‒ Further competence development, especially related to Husum’s new products
6,4
4,8
3,4
7,6
-5,6
9,1
-6
-3
0
3
6
9
12
15
2009 2010 2011 2012 2013 2014
Target min. 12 % from 2017 onwards
ROCE, excl. non-recurring items%
28
Metsä GroupMetsä Board
Make the most of Metsä Board
Thank You!
29