investor presentation 1q 2012 - metsä board...1q 2012 results and outlook metsä group metsä board...

Metsä GroupMetsä Board

Investor Presentation 1Q 2012

22.5. 2012

Metsä GroupMetsä Board2

Content

Investment highlights and update3 Investment Highlights4 Strategy16 Financial Targets18 1Q 2012 Results & Outlook30 Price Development32 Dividend35 Investments

Funding and debt information37 Divestments38 Funding and Debt46 Credit Facilities47 Rating History

General presentation48 General Info55 Business Portfolio61 Operations67 Deliveries69 Sourcing77 Owners79 Market Positions


Investment Highlights

‒ Strong growing core in high-quality paperboards‒ European market leader in folding boxboard‒ Increased capacity in the most profitable part of the company, folding boxboard‒ Good growth potential

‒ Profitability of paperboard production one of the best in its field

‒ Significant net debt reduction in recent years

‒ Material productivity improvement in recent years

‒ Measures to eliminate last paper business losses implemented

3


Strategy


M-real Is now Metsä Board

‒ Restructuring that was started in 2006 is completed

‒ The new identity reflects strong focus and dedication on the growing high quality paperboard business

‒ The company targets better visibility in the market place as a part of the new Metsä Group’s common identity

‒ New name was registered on 12 April 2012

5


Strategy Has Been Successful - Material Profitability Turn-Around Achieved

‒ Severely negative EBIT was turned clearly positive in 2010

‒ Profitability reached the level of main competitors

‒ Strategic restructuring is completed as planned

‒ Good platform to reach a best in class profitability in European

paper and board industry

59

-150

173

-200

-100

0

100

200

2009 2010 2011

EBIT, excl. non-rec. items

m€

6


Consistent Strategic Direction

‒ Cartonboard is the core business‒ Growth through maximizing capacity of existing mills

‒ Lot of growth potential also in the developing markets

‒ Smaller but healthier paper business‒ Heavy re-engineering and successful divestments

‒ High fibre know-how and self-sufficiency

‒ Working towards Super Productivity

7


Packaging Material Business Is One of the Biggest Businesses in the World

Wood fibre based

materials33 %

Others67 %

‒ Demand for Good packaging is heavily increasing

‒ Good packaging is ‒ Ecological ‒ Safe‒ Efficient marketing and communication tool‒ Economical

Wood fibre the best raw material for Good packaging

Sources: Pira & M-real

Global packaging market (~€500 Billion)

8


Our Focus is on Good Packaging – Fresh Forest FibreCartonboard Business

‒ Fresh forest fibre board the most environmentally sound packaging material

‒ Wood fibre based products replace non-renewable materials like plastic and aluminium

‒ In the food segment fresh forest fibre fibre board replaces also recycled fibre based packaging materials

9


Up to 30% Lighter than Competitors’ Products

Metsä Board’s Success is Based on Ecological Cartonboard that Is up to 30% Lighter than Competitors

10

Metsä Board’s folding boxboard

Typicalfolding boxboard

(FBB)Solid bleached Board (SBS)

White lined chipboard

(WLC)

Six million cartons for biscuits = 19 000 m2 of board

Metsä Board’s New Generation Light-Weight Cartonboards Meet Growing Demand from Consumer Goods Brand Owners Very Well

Metsä Board’s innovative folding boxboards are up to 30% lighter than competitors’ products


Chosen Cartonbord Strategy Has Led to Good Results

- Material improvement in profitability

- Intensive development lead to an increase of

European market share from 23 to about 30 %

- European market leader in FBB since 2009

- Top class profitability in its field

EBIT %. excl. non-rec. items

11


Large Pulp and Paper Integrated Sites in Favourable Locations Are the Winners

12

- European coated paper industry still suffering from huge overcapacity

- Slowly declining demand in traditional markets

- Export opportunities reducing especially in WFC

- Overcapacity in uncoated fine papers not as severe as in coated papers

- Demand outlook more positive than in coated grades

- Uncoated fine paper business more local

- Capacity closures are still needed both in coated and uncoated papers

Company Location Pulpand PaperKt/a

PaperKt/a

PulpKt/a

Metsä Board

Husum 1470 740 730

Stora Enso Oulu 1440 1100 340

UPM-Kymmene

Kuusankoski 1400 850 350

Soporcel Fiqueira da Foz 1340 800 540

Soporcel Setubal 1300 790 510

Sappi Gratkorn 1200 950 250


Exposure Has Been Reduced but We Continue to Develop OurPaper Business also in the Future

‒ Paper production in Europe will be concentrated on large and efficient integrated units

‒ Our paper production is now focused on Husum, Europe’s largest fine paper and pulp integrate, with capacity over 1.5 million t/a and its own port

‒ Additionally, we produce wallpaper base paper at the Kyro mill and Chromolux cast coated papers and boards at Gohrsmühle. Metsä Board is the European market leader in both

‒ Metsä Board continues to be interested in taking part in the European wide paper industry consolidation

13


Metsä Board Is a Responsible Company

Completed closures in 2007‒ Sittingbourne: coated fine paper 210 ktons/a‒ Gohrsmühle PM6 and PM7: coated fine paper 100 ktons/a‒ Wifsta: uncoated fine paper 175 ktons/a‒ Tako BM2: folding boxboard 70 ktons/a

Closures in 2008‒ Kangas PM2: coated magazine paper 100 ktons/a ‒ Lielahti: BCTMP 105 ktons/a ‒ New Thames: uncoated fine paper (divestment, grade conversion) 230 ktons/a

Closures in 2009‒ Hallein paper mill: coated fine paper 310 ktons/a ‒ Gohrsmühle: standard coated fine paper (conversion to uncoated fine paper) 250 ktons/a

Closures in 2010‒ Two machines in Reflex: Speciality paper 80 ktons/a‒ Alizay pulp mill: Chemical pulp 310 ktons/a‒ Simpele paper mill: Speciality paper 50 ktons/a

Closures in 2011‒ Äänekoski paper mill Coated fine paper 190 ktons/a

Closures in 2012‒ Gohrsmühle’s unprofitable operations: Uncoated fine paper and Speciality paper 190 ktons/a‒ Alizay paper mill: Uncoated fine paper 310 ktons/a

Total paper capacity 2 205 ktons/a Total board capacity 70 ktons/a Total pulp (incl. BCTMP) capacity 415 ktons/a

14


Management Structure Renewed in Early 2012

15

CEO Mikko Helander

HRMika Paljakka

CFOMatti Mörsky

PaperboardPasi Piiparinen

GohrsmühleKemiKyroTako

SimpeleÄänekoskiJoutseno

Paper and Pulp Seppo Puotinen

HusumKaskinen

S.Chain&Bus. Dev.Sari Pajari

ProcurementJani Suomalainen

Holdings in Metsä Fibre (32 %) and Pohjolan Voima (2.5%)


Financial Targets


Financial Targets

‒ ROCE target set at a minimum of 10% on average over the business cycle

‒ Net gearing not to exceed 100%

Minimum ROCE 10%* Maximum net gearing 100%

* Excluding non-recurring items

184%

119%137%

82%95%

126%99%90%84%83%

106%104%83%

145%

99 00 01 02 03 04 05 06 07 08 09 10 111Q

12

Maximum level of 100%

13,5%

6,2%

2,1%1,6%0,5%0,9%2,8%

-0,5%

-5,6%

7,6%

3,4%1,7%

10,2%7,6%

99 00 01 02 03 04 05 06 07 08 09 10 111Q

12

Minimum target of 10%

17


1Q 2012 Results and Outlook


Key Events in 1Q 2012

‒ Profitability of the Paperboard business area improved clearly

‒ Alizay mill closed and Gohrsmühle mill’s loss-making operations discontinued

‒ Exit from Reflex mill completed

‒ Paperboard investment programme proceeded as planned

‒ AGM decided to change the company’s name from M-real to Metsä Board

‒ Reduction of shareholding in Metsä Fibre Oy and Pohjolan Voima Oyannounced in April

19


602 676 662 665 685 660 545524616

0

250

500

750

1000

I II III IV I II III IV

15 1633

2024-11

-33

28-9

-100

-75-50-25

0

25

50


Sales, m€ Operating result excl. non-rec. Items, m€

Result before taxes excl. non-rec. Items, m€

Key Figures – Quarterly

20112010 2012

39 43 54 37 436

-225

32

-75

-50

-25

0

25

50

75


Clean operating result of units to be closed or under restructuring -16 m€ in total in 1Q 2012

20


‒ Higher delivery volumes improved the result from 4Q 2011

‒ Paperboard order inflows have normalized and operating rates improved clearly from the start of the year

‒ Delivery volumes are expected to further improve in 2Q 2012. No material changes in price levels in sight

‒ Äänekoski investment shutdown has a negative impact on 2Q results

‒ Losses of Gohrsmühle mill are expected to reduce in 2Q vs. 1Q

21

EBIT, excl non-recurring items

Sales

Paperboard Results Improved

8

26

0

10

20

30

40

50m€

275 281

0

100

200

300

400

4Q 2011 1Q 2012

m€

4Q 2011 1Q 2012


Paper and Pulp Business Area’s Performance Improved but Remained Weak due to Alizay’s Losses and Weak Pulp Market

‒ Profitability improved from 4Q 2011 by higher pulp delivery volume and reduction of Alizay mill’s losses

‒ Paper and pulp delivery volumes expected to be stable in 2Q 2012

‒ Prices of uncoated fine paper and market pulp are expected to somewhat increase in 2Q 2012. No material changes in sight in coated papers

‒ Alizay mill’s losses will materially reduce in 2Q 2012

‒ Transfer of Äänekoski mill’s reel paper production proceeding and volumes increasing in Husum as planned

‒ Actions ongoing to increase the number of long- term contractual market pulp customers in Europe

22

EBIT, excl non-recurring items

-20

-12

-30

-20

-10

0

10

238 245

0

100

200

300

400

m€

m€

4Q 2011 1Q 2012

4Q 2011 1Q 2012

Sales


Paperboard Business Area’s 120 m€ Investment Programme Nearly Completed

‒ Programme to increase FBB capacity by 150 000 annual tonnes completed. This new capacity is needed

to fulfil the growing demand‒ Renewed Simpele and Kyro machines in normal production

‒ Äänekoski investment to increase capacity by 30 000 t/a completed in early May 2012

‒ Focusing Kemi mill’s linerboard business to coated grades has been a great success‒ New coated grades have supported the business through challenging market situation

‒ Share of uncoated grades continues to decrease gradually

‒ Kyro biopower plant investment is proceeding according to plans and

commissioning is expected in Autumn 2012

23


Heavy Measures Ongoing to Reach Best in Class Profitability

24

- Planned elimination of the losses of Alizay and speciality paper operations 80

- Restructuring of coated paper operations 20

- Divestment of Hallein pulp mill finalized in 3Q 2011 10

TOTAL 110

Annual EBIT improvement vs. 2011, m€

Impact mostly already in 2012, full impact from 2013 onwards


Elimination of Paper Business’ Losses Starts to ImproveResults Clearly from 2Q 2012 as Earlier Indicated

‒ Alizay mill closed, reindustrialization project started with unions and local authorities to utilize the site infrastructure

‒ Gohrsmühle mill’s loss-making operations discontinued. Profitable Chromolux business continues‒ Gohrsmühle mill’s cost structure is optimized for the remaining operations during 2012‒ FBB sheeting centre to start up in the Autumn 2012‒ Development of business park concept started

‒ Restructuring of coated paper business completed‒ Äänekoski’s paper business ended and the reel paper production was moved to Husum by end 1Q

‒ Exit from Reflex mill completed when the deal with Hahnemühle was closed in February

Losses of 16 m€ in 1Q 2012 from these units expected to be clearly smaller in 2Q 2012

25


Metsä Board Divests 7.3%-Units of Metsä Fibre Oy to Itochu Corporation for 138 m€

‒ Metsä Board’s shareholding reduced to 24.9% decreasing the pulp capacity from 2.1 to 1.9 million t/a*

‒ Metsä Board’s Pulp surplus from 0.5 to 0.3 million t/a

‒ Closing took place in early May 2012

‒ Metsä Board also divested 0.5%-units in Pohjolan Voima Oyto Metsä Fibre for 64 m€

‒ Metsä Board’s direct PVO ownership now about 2.0 %

‒ Negative EBIT impact of about 15 m€/a compared to 2011 and total non-recurring items in Other operations’ 2Q 2012 EBIT 128 m€

26

Metsäliitto Cooperative 50.2%Metsä Board 24.9%Itochu 24.9%

Metsä Fibre Oy ownership structure after announced transactions

* including Metsä Fibre ownership


Short- Term Profitability Outlook

27

‒ Metsä Board’s operating result for the second quarter of 2012, excluding non-recurring items, is expected to improve from the first quarter of 2012


Management Focus Areas in 2012

‒ Finalization of the plans to eliminate paper business losses in Alizay and speciality paper operations

‒ Completion of cartonboard capacity expansion investments and full utilization of the increased capacity

‒ Complete successfully transfer of coated reels business from Äänekoski to Husum

‒ Have more long-term contractual customers for market pulp

‒ Refinancing of the company

28


EUR / tn

Folding Boxboard Market Price in Europe2004 – 1Q 2012

29

800

900

1000

1100

2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Pöyry Forest Industry


EUR / tn

Paper and Pulp Market Price in Europe1998 – 1Q 2012

Coated fine paper (100 g)Uncoated fine paper (B-copy, 80 g)

Softwood pulp NBSKCoated magazine paper LWC (60g)

Source: Foex, Reuters

EUR/USD

EUR/USD

400

500

600

700

800

900

1000

1100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120,8

0,9

1

1,1

1,2

1,3

1,4

1,5

1,6

1,7

30


Dividend


Dividend Policy

- Future dividends will take into account the need to achieve and maintain sufficient financial flexibility

- The Company remains committed to an attractive and competitive dividend

- Metsä Board's dividend policy is stable and rewarding to shareholders, and aims at paying a dividend of at least 1/3 of the Company's EPS on average over the business cycle, nonetheless taking into account the Company's net gearing target

32


0,50

1,09 1,13

1,85

0,460,30

-0,79

-1,58

-1,09

-0,83

0,26 0,37 0,380,51 0,51 0,51

0,25 0,00 0,00 0,00 0,000,09

-0,59

-1,21

-0,25-0,430,23 0,060,06

0,14 0,12 0,120,0%0,0%0,0%

4,3%

0,0%1,3%1,4%

2,1%2,8%3,3%

4,1%

5,6% 5,5%6,9%

8,6%

7,2%

-2

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

€ pe

r sha

re

-8 %

-6 %

-4 %

-2 %

0 %

2 %

4 %

6 %

8 %

10 %

12 %

Div

iden

d yi

eld,

%

Earnings per share Dividend per share Dividend yield

Dividend yield calculated from annual average B-share volume weighted price

Dividend Yield

33


Investments


-1 500

-1 000

-500

0

500

1 000

1 500

2 000

2 500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

€

Disposals

Acquisitions

Capitalexpenditure onfixed assets

Capital Investments 60-70 m€ in 2012

*Indicative level for 2012

35


Funding and Debt Information

36


Significant Divestments- EUR 3.4 billion in assets divested since 2001

2004 Metsä Tissue 5702002 Papierfabrik Albbruck 2352001 MD Papier 3002001 Noviant (19%) 41

3,485

Year Divestiture Enterprise Value

EUR millions

2005 Savon Sellu 202005 Forestia (95%) 163

2005 Botnia (8%) 1642007 Botnia (9%) 2402007 Folding carton plants 602007 Map Merchant Group 3822008 New Thames mill 82**2008 100 000 B2 shares in PVO 802008 Graphic Papers 750

* Cash portion**Incl. pension liabilities

2009 Metsä-Botnia’s Uruguayn operations 300*2011 Hallein 34

37

2012 0.5 % stake in PVO 64


Financial Situation Stable

‒ Net debt reduced to 758 m€

‒ Net gearing 104 %, equity ratio 27.8 % at end 1Q

‒ Divestments announced in April 2012 improve net gearing by about 40 %-units

‒ ONWC decreased slightly in 1Q 2012

‒ Metsä Fibre dividend 33 m€ received in March

‒ Metsä Board’s own liquid funds 264 m€ at and 1Q

‒ Average interest rate 6.1 % at end 1Q

‒ Exposure to USD and GBP somewhat reduced vs. end 2011

Net Debt, m€

758

3693

2403

0

500

1000

1500

2000

2500

3000

3500

4000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q12

38


Agreement on Metsä Board’s Refinancing Signed in May 2012

‒ New 600 m€ term loan and revolving credit facility agreement with a syndicate of five banks and certain Finnish institutional investors

‒ This agreement will be utilized to refinance the 500 m€ eurobondmaturing in April 2013

‒ Facilities include a 100 m€ RCF available immediately and 500 m€term loans available from late March 2013

‒ Maturity of RCF is three years ‒ 150 m€ of term loans matures at end June 2014 and 350 m€ at end March 2016

‒ The average financing cost of the facilities calculated for the entire loan period is 6.5 %

39


Loans and Interest Rate

At the end of 1Q 2012

‒ Average maturity of long term loans 1,6 years

‒ Average interest rate of loans (including derivatives) 6,1 %

‒ Interest rate maturity of loans (including derivatives) 13,0 months

‒ Of the loans about 61 per cent was subject to variable interest rates and 39 per cent to

fixed interest rates

40


Total 1 021 m€ 31.3.2012

Long-Term Interest Bearing Liabilities

67 %

5 %3 %

4 %

21 %

BondsPension premium loansLoans from financial institutionsFinance leasesOther interest bearing liabilities

41


Total 102 m€ 31.3.2012

Short-Term Interest Bearing Liabilities

2 %

98 %

Metsä GroupShort-term bank loans and other

42


Interest Bearing Net Liabilities 31.3.2012 (m€)

‒ Long-term 1 021

‒ Short-term 102

Total interest bearing liabilities 1 123

‒ Liquidity and other interest bearing receivables 365

Interest bearing net liabilities 759

43


Long-term Interest Bearing Liabilities 31.3.2011

164

555

120

71

21 20 2050

0

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017 2018 >2 018

m€

44


Liquidity

Committed credit facilitiesLiquid fundsm€

0

50

100

150

200

250

300

350

400

450

I/11 II/11 III/11 IV/11 I/12

45


Debt Programs

46

The follow ing table sets forth the signif icant debt securities issued and outstanding of Metsä Board as at March 31, 2012:

Average

Long-term borrowings Total amount Outstanding Interest Rate (1) Maturity

USD 350 million Private Note Issue USD 350 USD 224 7,8 % 2012–2014EUR 500 million Bond Issue EUR 500 EUR 500 7,6 % 2013Global Medium-Term Note Program EUR 1 500 EUR 0 million private placements EUR 0 – –EUR 98 million bilateral loans EUR 98 EUR 98 3,2 % 2012–2013EUR 27 million f inance leases EUR 27 EUR 27 2,1 % 2012–2020EUR 230 million pension loans EUR 230 EUR 210 5,6 % 2012–2020

Short-term funding programmes

EUR 350 million domestic CP-program EUR 350 EUR 0 – –EUR 150 milj. Belgian CP-program EUR 150 EUR 0 – –

Average interest rate of all Metsä Board Group interest bearing liabilities including interest rate derivatives per 31.3.2012 is 6,1 %.

The follow ing table sets forth Metsä Board´s principal long-term liquidity reserves as at March 31, 2012:

Average Liquidity reserves Total amount Outstanding Interest Rate (1) Maturity

Pension loan facilities EUR 230 EUR 210 5,6 % -

(1) The average interest rates take into account outstanding interest rate sw aps and amortised arrangement fees.

(currency in millions)

(EUR in millions)


Ratings’ History

2000S&P: Short term ratings lowered to A3, Long term ratings placed to credit watch negativeMoody’s: Long and short term ratings outlook changed from stable to negative

2001S&P: Long term ratings lowered to BBB-,stable outlookMoody’s: Long and short term ratings lowered to Baa3/P3, negative outlook

2003S&P: Downgrade to BB+, stable outlookMoody’s: Downgrade to Ba1, negative outlook

2004S&P: Outlook changed from stable to negative, ratings affirmedMoody’s: Downgrade to Ba2, stable outlook

2005S&P: Downgrade to BB, stable outlookMoody’s: Outlook changed from stable to negative, ratings affirmed

2006S&P: Downgrade to BB-, negative outlookMoody’s: Downgrade to Ba3, negative outlookMoody’s: Downgrade to B2, negative outlookS&P: Downgrade to B+, negative outlook

2007Moody’s: Downgrade to B3, negative outlookS&P: Downgrade to B, negative outlookS&P: Downgrade to B-, stable outlook

2008S&P: Outlook to negative

2009S&P: Downgrade to CCC+, negative outlook Moody’s: Downgrade to Caa1, outlook negative

2010S&P: Outlook to stableMoody’s: Outlook to stableS&P: Upgrade to B-, stable outlookMoody’s: Upgrade to B3, outlook to positive

2011S&P: Outlook to positiveS&P: Outlook to stableMoody’s: Outlook to stable

47


General Presentation


Metsä Board in Brief

‒ Europe’s leading fresh forest fibre paperboard producerand a major paper supplier

‒ Annual sales about EUR 2.5 billion, approximately 3,800 employees

‒ Business areas: Paperboard and Paper and Pulp 9 production units in 3 European countries

‒ Fully self-sufficient in pulp and over 60 % self-sufficient in energy

‒ Present in over 70 countries

‒ Part of Metsä Group, one of the largest forest industry group’s in Europe, and listed on the NASDAQ OMX Helsinki Ltd

Paperboard 45 %Paper 38%Market pulp and energy 17%

Sales breakdown 2011

49


Offering for Consumer Packaging, Communications and Advertising

‒ Cartonboards and white-top kraftliners for packaging beautycare, healthcare, cigarettes, food, consumer durables etc.

‒ Graphic boards e.g. for book covers, postcards, greeting cards, CD or DVD covers

‒ Office papers from high-volume copying and printing to high-quality color presentations

‒ Speciality papers for advertising and corporate materials, creative designs, labeling and for wallcoveringindustry

50


Customers

Office product resellers

Publishers

Brand owners

Printers and converters

Advertising and design agencies

Office paper users

Paper merchants

51


17 %

32 %

12 %

9 %

12 %

6 %

9 %3 %

Paper PulpPaperboard PackagingTissue Mechanical Forest ProductsMerchanting Chemicals

45 %

38 %

17 %

Focus on Core Businesses

1995 Sales€2.3 billion

2011 Sales€2.5 billion

8 Businesses 3 Businesses

52


Acquisitions

Divestments

Biberist Paper Mill

Simpele Mill UK Paper

Modo Paper

Zanders

ChemicalsBusiness

Botnia Wood

CorrugatedPackaging

MD Papier Metsä Tissue

Albbruck

Metsä Board Restructuring Story

SavonSellu

Forestia

Kemiart Liners (53 %)

8% in Botnia

PSM

9% in Botnia

Cartonplants

Map

100 000 B2 shares

in PVO

New Thames MB

Uruguay

Graphic Papers

Part of Reflex

Halleinmill

1997 20001998 1999 2001 2002 2003 2004 2005 2006 2007 20092008 2010 2011

53

Rest of Reflex

0.5% in PVO

2012

7.3 % in Metsä Fibre


Annual Sales Development

26052432

3236

4440

56245241

54606044

65646923

5898

33193014

2313

4044

0

1000

2000

3000

4000

5000

6000

7000

8000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

EUR, million

54


Business Portfolio

55


Business Portfolio

Paperboard Paper and Pulp

56


Paperboard business area

‒ Fibre-based high value-added packaging solutions for global brand owners in beautycare, healthcare, cigarette, food and consumer electronics industries as well as for graphical end-uses

‒ Relatively high earnings stability

‒ High segment consolidation

‒ Competitive folding boxboard mills with end use specified production

Capacity Share (%)

8 %

8 %

9 %

24 %

35 %

0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

IP

Careo

Mayr-Melnhoff

Stora Enso

Metsä Board

No. 1 Folding Boxboard Producer in Europe

Source: Pöyry Management Consulting Oy57


Paper and Pulp Business Area

Capacity Share (%)

4 %

8 %

10 %

12 %

12 %

14 %

0 % 5 % 10 % 15 %

Metsä Board

International Paper

UPM-Kymmene

Mondi

Stora Enso

Portucel

No. 6 Uncoated Fine Paper Producer in Europe

• High quality uncoated fine papers for printing and photocopying as well as for forms, envelopes, manuals and communication purposes. Additionally, chemical pulp and BCTMP for external customers

• Diversified customer base, e.g. merchants, retail chains, office equipment manufacturers and corporations

• Leading European office paper brands like DataCopy and SAVE!

Source: Pöyry Management Consulting Oy58


Business Area Performance – Comparison to Previous Quarter

Sales, m€

1Q 20124Q 2011

59

Operating result, excluding non-recurring items, m€


Business Area Performance – Comparison to Previous Year

Sales, m€

1Q 20121Q 2011

60

Operating result, excluding non-recurring items, m€


Operations


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Paper Board Pulp and BCTMP

1000 tons/a

Production Capacity

62


Production Locations

Paperboard:• Simpele• Äänekoski• Kyro• Tako • Kemi• Gohrsmühle• Joutseno

Paper and Pulp: • Husum• Kaskinen

Husum

Gohrsmühle

ÄänekoskiSimpele

Joutseno

Kemi

TakoKyro

Kaskinen

63


Paper and Board Capacity by Grade(1000 t/a)

64

Production Capacities (1000 t)

BOARD MILLS

Board Mill Country Machines FoldingBoxboard Liner Total

Tampere Finland 2 205 205Kyröskoski Finland 1 190 190Äänekoski Finland 1 240 240Simpele Finland 1 300 300Kemi Finland 1 375 375

Total 6 935 375 1310

PAPER MILLS

Paper Mill Country Machines Coated UncoatedPaper Fine Specialty

Paper Paper Total

Kyröskoski Finland 1 105 105Bergisch Gladbach Germany 2 50 50Husum Sweden 3 340 430 770

Total 6 340 430 155 925


Pulp Capacity

(1000 t/a)

65

PULP MILLS

Pulp Mill Country ChemicalPulp BCTMP Total

Husum Sweden 690 690Joutseno Finland 280 280Kaskinen Finland 300 300

Total 690 580 1270

METSÄ FIBRE *

Mill Country ChemicalPulp Total

Äänekoski Finland 500 500Kemi Finland 590 590Rauma Finland 630 630Joutseno Finland 650 650

Total 2370 2370

* Metsä Board's share is 24.9% of the capacity


Personnel Development

38184070453849036546

9508

1412515154

16490

203722107022237

17351

1388512637

11463

15572

0

5000

10000

15000

20000

25000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q12

66


Deliveries


Uncoated fine paperCartonboard

Annual Deliveries*

25 %

5 %

18 %

52 %

Western- Europe Eastern- Europe Americas Asia & Pacific

10 %

78 %

10 %2 %

* Indicative numbers68


Sourcing


Personnel 17 %

Other fixed15 %

Delivery costs12 %

Wood22 %

Chemicals, pigments and

fillers14 %

Other variables

6 %Energy

14 %

Cost Structure 2011* (total annual costs in industrial operations ~ EUR 2 Billion)

Fixed costs

Variable costs

* Percentage of annual costs in industrial operations

70


Electricity Sourcing 2011 (total 3 045 GWh)

Associated company

(PVO)31 %

Outsourced generation

1 %

Own generation27 %

Purchased energy41 %

71


Fuels Used 2011 (total 14,7 TWh)

Wood-based49 %

Natural gas15 %

Coal12 %

Oil2 %

Peat1 %

Hydropower8 %

Nuclear power13 %

72


Wood Sourcing by Country in 2011

1 000 m3

Sweden 2303

Finland 1234

Baltic countries 900

Russia 497

Germany & Austria 485

Total 5508

73


Development of Softwood PulpwoodCost at Mill, Wood for Chemical Pulping

1980 – 4Q 2011

Source: Pöyry Management Consulting Oy

74

EUR/m³sob


Development of Softwood PulpwoodCost at Mill, Wood for Mechanical Pulping

1980 – 4Q 2011


75

EUR/m³sob


Development of Hardwood PulpwoodCost at Mill, Wood for Chemical Pulping

1980 – 4Q 2011

Source: PöyrySource: Pöyry Management Consulting Oy

76

EUR/m³sob


Owners

77


Ownership Structure 31.3.2012Shares Votes

Source: Euroland78


Market Position


0 100 200 300 400 500 600 700 800 900 1000

Others

Holmen

IP

Careo

Mayr-Melnhof

Stora Enso

Metsä Board

Folding Boxboard Capacities in Europe BIG-5 = 84% of total

Capacity: tons/year (thousand)

35%

24%

9%

8%

8%

8%

8%


80


0 500 1000 1500 2000 2500 3000 3500

Others

Guipuzcoana de Zicuñaga

Arctic Paper

Metsä Board

International Paper

UPM

Mondi

Stora Enso

Portucel

Uncoated Fine Paper Capacities in EuropeBIG-5 = 56% of total

14%

12%

12%

10%

8%

4%

3%

3%

29%

Capacity: tons/year (thousand)


81


Thank You!www.metsaboard.com

Juha LaineHead of IR

+358 10 [email protected]

investor presentation 1q 2012 - metsä board...1q 2012 results and outlook metsä group metsä board...

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