metsä group half year financial report 2017 · metsä group half year financial report 2017 kari...
TRANSCRIPT
Metsä Group Half Year Financial report 2017
Kari JordanPresident and CEO
3.8.2017
• Sales EUR 2,451 million (1–6/2016: 2,339 million)• Operating result * EUR 247 million (229 million)• Operating result of sales* 10.1% (9.8%)• Return on capital employed* 11.5% (11.0%)• Sales grew mainly as a result of higher delivery volumes • Operating result improved mainly due to the positive
development in Finland’s paperboard business and the increase in pulp prices
3.8.2017 Metsä Group2
Metsä Group’s profitability improved
Metsä Group – Q2
*comparable
• The market prices of long-fibre and short-fibre pulp increased • Paperboard deliveries grew by 11% from the previous quarter• Metsä Tissue started to rebuild the baking paper machine at the
Düren mill in Germany• Metsä Wood started to build a birch plywood mill in Pärnu, Estonia• Metsä Fibre prepared the start-up of the bioproduct mill
due in mid-August 2017• Ilkka Hämälä was appointed CEO of Metsäliitto Cooperative
as of 1 January 2018 and the President and CEO of Metsä Group as of 1 April 2018
• Ismo Nousiainen was appointed Deputy CEO of Metsä Fibre as of 1 August 2017 and CEO as of 1 January 2018
3.8.2017 Metsä Group3
Metsä Group – Q2
Events in the second quarter
3.8.2017 Metsä Group4
1,254 1,2651,204
1,248 1,2551,330
1,225 1,2051,156 1,184 1,143 1,175 1,216 1,235
0
200
400
600
800
1 000
1 200
1 400
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Sales
Metsä Group – Q2
EUR million
3.8.2017 Metsä Group5
Operating result
Metsä Group – Q2
10592
104117
129137
149
123109
120
103 107
128119
70
160
103
84
118
154142
128
107
119
107110
131122
0
20
40
60
80
100
120
140
160
180
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Comparable operating result Operating result (IFRS)
EUR million
3.8.2017 Metsä Group6
5364 68 71
8994
73
87
105
92104
117129
137149
123
109120
103 107
128119
0
20
40
60
80
100
120
140
160
Q1/
12 Q2
Q3
Q4
Q1/
13 Q2
Q3
Q4
Q1/
14
Q2
Q3
Q4
Q1/
15
Q
2
Q
3
Q
4
Q1/
16
Q
2
Q
3
Q
4
Q1/
17
Q2
Q
3
Q
4
Comparable operating result
Metsä Group – Q2
EUR million
Change in comparable operating result
3.8.2017 Metsä Group7
Metsä Group – Q2
EUR million
Comparable operating result 1–6/2016 229
Sales prices -12
Sales volumes 42
Exchange rates 10
Raw materials and energy 5
Employee costs 8
Change of inventories -30
Other -4 18
Comparable operating result 1–6/2017 247
Items affecting comparability 1–6/2017
3.8.2017 Metsä Group8
Metsä Group – Q2
EUR million 1–6/2017
Operating result (IFRS) 253.4
Items affecting comparability:
Metsä Wood / sale of the project business 3.3
Metsä Board / sale of the paper machine at Kyro, net 3.4
Metsä Wood & Metsä Fibre / transfer of the sawmills -0.2
Items total +6.5
Comparable operating result 246.9
3.8.2017 Metsä Group9
Comparable ROCE
Metsä Group – Q2
9.8
11.3
13.7
11.0 11.5
0
2
4
6
8
10
12
14
16
QI–II/2013 QI–II/2014 QI–II/2015 QI–II/2016 QI–II/2017
%
Target >10%
3.8.2017 Metsä Group10
Equity ratio
Metsä Group – Q2
37.9 37.9
43.2 43.9 45.3
0
5
10
15
20
25
30
35
40
45
50
12/2013 12/2014 12/2015 12/2016 6/2017
%
3.8.2017 Metsä Group11
Interest-bearing net liabilities
Metsä Group – Q2
1,510
938
610
1,033
1,252
0
250
500
750
1 000
1 250
1 500
1 750
12/2013 12/2014 12/2015 12/2016 6/2017
EUR million
3.8.2017 Metsä Group12
Capital expenditure
Metsä Group – Q2
214143
492
758
275
0
100
200
300
400
500
600
700
800
1–12/2013 1–12/2014 1–12/2015 1–12/2016 1–6/2017
EUR million
Full-year estimate
Income statement
3.8.2017 Metsä Group13
Metsä Group – Q2
EUR million QI–II/2017 QI–II/2016 ChangeSales 2,451.4 2,339.6 111.8
Other operating income 25.7 25.2 0.5
Operating expenses -2,109.0 -2,013.6 -95.4
Depreciation and impairment losses -114.6 -125.8 11.2
Operating result 253.4 225.3 28.1
Comparable operating result 246.9 229.3 17.6
Share of results from associated companies and joint ventures 18.9 -0.9 19.8
Exchange gains and losses -2.6 -0.5 -2.0
Other net financial items -33.2 -37.9 4.7
Result before tax 236.6 186.0 50.6
Key figures
3.8.2017 Metsä Group14
Metsä Group – Q2
QI–II/2017 QI–II/2016 ChangeReturn on capital employed, % 11.8 10.8 1.0
Comparable return on capital employed, % 11.5 11.0 0.5
Return on equity, % 14.3 11.8 2.5
Comparable return on equity, % 13.9 12.1 1.8
Equity ratio, % 45.3 44.8 0.5
Net gearing ratio, % 45 38 7
Interest-bearing net liabilities, EUR million 1,252 945 307
Capital expenditure, EUR million 275 338 -63
Personnel at end of period 9,824 10,075 -251
Cash Flow Statement I
3.8.2017 Metsä Group15
Metsä Group – Q2
EUR million QI–II/2017 QI–II/2016
Cash flow from operating activities
Result for the period 192.8 143.9
Adjustments to result for the period 167.4 190.6
Interest received 1.8 1.7
Interest paid -28.7 -30.5
Dividends received 1.6 0.8
Taxes -38.3 -75.7
Other financial items, net -15.0 6.2
Change in working capital -169.8 -213.8
Net cash flow from operating activities 111.8 23.6
Cash Flow Statement II
3.8.2017 Metsä Group16
Metsä Group – Q2
EUR million QI–II/2017 QI–II/2016Net cash flow from operating activities 111.8 23.6
Purchase of shares -0.8 0.0Acquired shares from non-controlling interests -30.7 0.0Investments -275.4 -337.9Sales of assets and others 28.4 16.4Change in members’ capital and other capital 65.4 81.5Interest on members’ capital and dividends paid -122.1 -120.2Change in long-term loans and committed facilities 104.6 -31.3
Change in cash and cash equivalents -118.7 -367.9
Cash and cash equivalents at beginning of the period 895.1 1,120.8Translation differences and others -0.5 0.4Change in cash and cash equivalents -118.7 -367.9
Cash and cash equivalents at end of the period 775.9 753.3
3.8.2017 Metsä Group17
Personnel
Metsä Group – Q2
10,736 10,4109,599 9,300
9,824
0
2 000
4 000
6 000
8 000
10 000
12 000
12/2013 12/2014 12/2015 12/2016 6/2017*
*including approximately 800 summer employees
Wood Supply and Forest Services
Wood Supply and Forest Services
3.8.2017 Metsä Group19
Metsä Forest – Wood Supply and Forest Services
EUR million QI–II/2017 QI–II/2016 Change
Sales 829.4 779.0 50.4
Other operating income 1.5 3.7 -2.2
Operating expenses -816.0 -766.6 -49.4
Depreciation and impairment losses -1.9 -1.7 -0.2
Operating result 12.9 14.3 -1.4
Items affecting comparability, total - - -
Comparable operating result 12.9 14.3 -1.4
% of sales 1.6 1.8 -0.2
Purchasing volumes of wood increased• In Finland, the supply of wood was steady,
and stumpage prices stable• Metsä Forest delivered a total of
16.4 million cubic metres of wood (15.7)• The sales of forest management services
grew by approximately 25%• 28% of the wood from private forest owners
was purchased online. In the sale of forest management services, the share was 37%
• Metsä Forest divested its share in ZAO HK Vologodskie Lesopromyshlennik
• Metsä Forest acquired the wood supply of Harvestia Oy in southeast Finland and of Metsäkolmio Oy
3.8.2017 Metsä Group20
Comparable operating resultEUR million
Metsä Forest – Wood Supply and Forest Services
8.7
6.9 7.06.3
7.8
6.5
7.7
8.98.5
4.4
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
Q1/
15
Q2/
15
Q3/
15
Q4/
15
Q1/
16
Q2/
16
Q3/
16
Q4/
16
Q1/
17
Q2/
17
Q3/
17
Q4/
17
Wood Products Industry
Wood Products Industry
3.8.2017 Metsä Group22
Metsä Wood – Wood Products Industry
EUR million QI–II/2017 QI–II/2016 ChangeSales 242.0 251.2 -9.2
Other operating income 4.6 5.0 -0.4
Operating expenses -218.5 -228.5 10.0
Depreciation and impairment losses -5.9 -6.7 0.8
Operating result 22.2 21.0 1.2
Items affecting comparability, total -3.2 0.4 -3.6
Comparable operating result 19.1 21.4 -2.3
% of sales 7.9 8.5 -0.6
Demand for wood products continued strong
• Demand for Kerto® LVL products continued strong• Deliveries of Kerto® LVL declined due to the
investment related shutdown of one line in Lohja• The delivery volumes and sales of birch and
spruce plywood grew especially thanks to strong demand in Northern and Central Europe
• Metsä Wood started to build a birch plywood mill Pärnu, Estonia. It will start production in the second half of 2018
• The new Kerto® LVL line will start up in Lohja mill in August
• Converting the paper machine hall at Äänekoskiinto a birch veneer mill is proceeding
3.8.2017 Metsä Group23
Comparable operating resultEUR million
Metsä Wood – Wood Products Industry
4.5
7.18.0
8.4 8.2
13.2
9.08.3
10.7
8.4
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
Q1/
15
Q2/
15
Q3/
15
Q4/
15
Q1/
16
Q2/
16
Q3/
16
Q4/
16
Q1/
17
Q2/
17
Q3/
17
Q4/
17
Pulp and Sawn Timber Industry
Pulp and Sawn Timber Industry
3.8.2017 Metsä Group25
Metsä Fibre – Pulp and Sawn Timber Industry
EUR million QI–II/2017 QI–II/2016 ChangeSales 848.5 831.3 17.2
Other operating income 10.7 5.9 4.8
Operating expenses -699.1 -682.1 -17.0
Depreciation and impairment losses -34.9 -45.7 10.8
Operating result 125.2 109.4 15.8
Items affecting comparability, total 0.1 5.0 -4.9
Comparable operating result 125.3 114.4 10.9
% of sales 14.8 13.8 1.0
3.8.2017 Metsä Group26
Price of pulp (PIX) 2009–Q2/2017
Metsä Fibre – Pulp and Sawn Timber Industry
350
450
550
650
750
850
950
1050
350
450
550
650
750
850
950
1050
´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17
Hardwood/EUR Softwood/EUR Hardwood/USD Softwood/USD
USD EUR
Source: Foex
Higher pulp prices improved results
• The demand for pulp grew more than expected
• The market price of long-fibre pulp grew about 6% and short-fibre 1%, compared to the first half of 2016
• The production and sales volumes of sawn timber continued to grow. Prices are still at a low level
• The bioproduct mill is nearly completed. The mill will be started-up in mid-August
• Ismo Nousiainen was appointed Deputy CEO of Metsä Fibre as of 1 August 2017 and CEO as of 1 January 2018
3.8.2017 Metsä Group27
Comparable operating resultEUR million
Metsä Fibre – Pulp and Sawn Timber Industry
82.0
95.6
83.479.7
61.2
53.246.4
53.7 54.5
70.8
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Q1/
15
Q2/
15
Q3/
15
Q4/
15
Q1/
16
Q2/
16
Q3/
16
Q4/
16
Q1/
17
Q2/
17
Q3/
17
Q4/
17
Paperboard Industry
Paperboard Industry
3.8.2017 Metsä Group29
Metsä Board – Paperboard Industry
EUR million QI–II/2017 QI–II/2016 ChangeSales 918.7 858.5 60.2
Other operating income 8.6 14.3 -5.7
Operating expenses -791.6 -757.7 -33.9
Depreciation and impairment losses -43.6 -48.0 4.4
Operating result 92.1 67.2 24.9
Items affecting comparability, total -3.4 3.6 -7.0
Comparable operating result 88.7 70.8 17.9
% of sales 9.7 8.2 1.5
Prices of folding boxboard and white-top kraftliner in Europe 2011–Q2/2017
600650700750800850900950
10001050110011501200
2011 2012 2013 2014 2015 2016 2017
Folding boxboard White-top kraftliner Source: RISI, Inc. & FOEX Indexes Ltd
3.8.2017Metsä Group
30
Metsä Board – Paperboard Industry
EUR/ tonne
Paperboard deliveries at a record level• The result was improved by the positive
development in Finland’s paperboard business and market pulp business
• Demand for fresh fibre paperboards remained good in all Metsä Board’s main market areas
• Deliveries of folding boxboard increased by 19% and white fresh fibre linerboards by 16%
• The average prices of paperboards produced in Finland remained roughly at the level of the comparison period
• The new extrusion coating line at the Husum mill in Sweden started up in April
• Metsä Board launched a renewed product and service portfolio in May
3.8.2017 Metsä Group31
Comparable operating resultEUR million
Metsä Board – Paperboard Industry
43.247.0
54.6
35.1 35.0 35.834.0 32.8
45.2 43.5
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Q1/
15
Q2/
15
Q3/
15
Q4/
15
Q1/
16
Q2/
16
Q3/
16
Q4/
16
Q1/
17
Q2/
17
Q3/
17
Q4/
17
Tissue and Cooking Papers
Tissue and Cooking Papers
3.8.2017 Metsä Group33
Metsä Tissue – Tissue and Cooking Papers
EUR million QI–II/2017 QI–II/2016 ChangeSales 503.4 495.1 8.4
Other operating income 1.2 1.6 -0.3
Operating expenses -451.3 -450.1 -1.2
Depreciation and impairment losses -19.5 -19.8 0.3
Operating result 33.9 26.7 7.2
Items affecting comparability, total - - -
Comparable operating result 33.9 26.7 7.2
% of sales 6.7 5.4 1.3
Sales volumes of tissue and cooking papers increased • Sales grew due to increased sales volumes• The operating result was positively
impacted by the higher sales volumes and the strengthening of the Norwegian krone
• The result was impacted negatively by the price increase in fresh and recycled fibre, and the weakening of the Swedish krona and the British pound
• Metsä Tissue started the rebuild of the baking paper machine at the Düren mill in Germany. The investment is EUR 15 million
3.8.2017 Metsä Group34
Comparable operating resultEUR million
Metsä Tissue – Tissue and Cooking Papers
15.8
7.6
13.2
18.6
13.5 13.2
15.8
20.6
17.616.3
0,0
5,0
10,0
15,0
20,0
25,0
Q1/
15
Q2/
15
Q3/
15
Q4/
15
Q1/
16
Q2/
16
Q3/
16
Q4/
16
Q1/
17
Q2/
17
Q3/
17
Q4/
17
Summary
Outlook for the business areas 1/2Wood Supply and Forest Services• Wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms of
energy wood, on crown wood
Wood Product Industry • Demand for wood products will remain good, and this will be reflected in the order book level, which will be
higher than in the previous year, particularly in Kerto® LVL products• The outlook for plywood products is likewise positive• Construction in the UK is expected to remain at a good level, but delivery volumes in the third quarter are
expected to suffer a slight seasonal decline
Pulp and Sawn Timber Industry• Demand and supply of market pulp in Europe and Asia are in balance, with normal seasonal variation• Demand for spruce sawn timber is expected to remain good in most markets• Demand for pine sawn timber has improved, and the market balance strengthened
3.8.2017 Metsä Group36
Summary
Outlook for the business areas 2/2Paperboard • The growth in the demand for high-quality consumer packaging paperboard made from fresh fibre is
expected to continue in market areas important for Metsä Board• Delivery volumes in July–September are expected to remain roughly at the level of the second quarter
Tissue and Cooking Papers• In the tissue and cooking paper markets, demand is expected to remain stable in all market areas • Demand for tissue paper will particularly increase in Eastern Central Europe and demand for cooking
papers in Asia
3.8.2017 Metsä Group37
Summary
• Metsä Group’s comparable operating result is in the third quarter of 2017 expected to be roughly at the same level as in the second quarter of 2017
3.8.2017 Metsä Group38
Near-term outlook
Summary