Metsa Board Oyj Class A · OMXHEX:METSA
Metsa Board Oyj Class A — Q1 2022 Earnings Presentation
31 slides from Metsa Board Oyj Class A's earnings presentation, Apr 28, 2022
Slide 1: Results for January–March 2022
Metsä Board Results for January–March 2022 Presentation material April 28, 2022
Slide 2: Q1 2022 in brief
Comparable Sales operating result Q1 2022 in brief • 2,084 Strong demand for paperboards continued; 580 121 Metsä Board’s paperboard deliveries were at 473,000 tonnes EUR million EUR million • Average sales prices of paperboards improved by 20% year-on-year • No major maintenance shutdowns; a new pr
Slide 3: Russia's attack on Ukraine
Russia’s attack on Ukraine Metsä Board’s measures to replace operations related to Russia FIGURES ARE FROM FY2021 • Paperboard sales to Russia have been discontinued Reallocation to other markets enables Metsä Board to support its customers’ growth Reallocation not limited by demand, but rather
Slide 4: Low stock levels affected paperboard deliveries in Q1 2022
Low stock levels affected paperboard deliveries in Q1 2022 Q1 2022 vs Q1 2021: -4% Q1 2021: Q1 2022: White kraftliners Folding boxboard 491,000 473,000 tonnes tonnes 500 162 166 400 156 161 148 143 166 1,000 tonnes 138 146 140 152 144 143 1,000 tonnes 300 200 329 348 302 299 305 300 298 310 318 297
Slide 5: Paperboard sales by market area
Paperboard sales by market area FBB deliveries in Q1/2022 (Q1/2021) WKL deliveries in Q1/2022 (Q1/2021) total 307,000 tonnes (329,000) total 166,000 tonnes23% (162,000) 22% APAC 68% 19,000 APAC (28,000) 1,000 (1,000) Americas 6% 1% EMEA 66,000 EMEA Americas 100,000 (78,000) 221,000 (102,000) 22% 65,
Slide 6: Market pulp
Market pulp Pulp price (PIX) development in Europe and China • Market pulp deliveries in Q1 2022 vs Q1 2021 USD/tonne – Metsä Board +5% (122,000 vs 116,000 tonnes) 1,600 – Metsä Fibre*) -5% (749,000 vs 787,000 tonnes) 1,400 1,200 • Good demand in long-fibre market pulp in Europe and China 1,000 800
Slide 7: Improved sales prices boosted both sales and profitability, operating margin over 20%
Improved sales prices boosted both sales and profitability, operating margin over 20% Sales, quarterly Comparable operating result, quarterly EUR million EUR million and % of sales FY 2021 FY 2020: FY 2021: EUR 387 million EUR 1,890 2,084 million margin 18.6% 400 million 2000 518 91 FY 2020: 473 300
Slide 8: Main items affecting comparable operating result
Main items affecting comparable operating result Q1 2022 vs Q1 2021: +37% EUR 121 million vs EUR 89 million Positives: Negatives: • Increased average sales prices • Rapid cost inflation in chemicals, energy in paperboards and logistics, higher fixed costs • Increased market pulp prices • Lower deliv
Slide 9: Strong profitability reflected in operating cash flow
Strong profitability reflected in operating cash flow Q1 cash flow includes the dividend from Metsä Fibre, EUR 59 million 450 450 400 400 350 350 300 300 EUR million EUR million 250 250 200 200 150 134 150 120 90 81 93 100 80 72 74 72 100 49 59 36 44 37 38 37 50 29 31 27 33 30 24 50 14 17 23 0 0 -17
Slide 10: Q1 2022 comparable ROCE at 21.1%
Q1 2022 comparable ROCE at 21.1% Comparable return on capital employed, % Quarterly and rolling 12 months 22% 22% 20% 20% 18% 18% 16% 16% 14% 14% 12% Target > 12% 12% 10% 10% 8% 8% 6% 6% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21
Slide 11: Net debt and leverage remained negative
Net debt and leverage remained negative 31 March 2022: Net debt EUR -100 million, comparable EBITDA R12: EUR 502 million Net debt, EUR million Net debt to comparable EBITDA (last 12 months) 600 1.5 500 1.3 1.2 1.2 Financial target: 400 1.1 1.1 Net debt to 1.0 1.0 1.0 0.9 comparable 300 0.8 EBITDA <
Slide 12: Investing in sustainable growth
Investing in sustainable growth • Husum pulp mill renewal, first phase • No new pulp capacity, higher energy self-sufficiency • EUR 360 million, expected start-up September 2022 • Second phase will follow during 2020s • Folding boxboard capacity expansion in Husum • +200,000 t/a folding boxboard • E
Slide 13: Near-term outlook
Near-term outlook April–June 2022 • Strong demand for paperboards continues • Metsä Board’s paperboard delivery volumes expected to remain stable, average sales prices expected to increase compared to Q1 2022 • Demand for market pulp is expected to remain good. Several factors limit supply • Increas
Slide 14: Result guidance
Result guidance Metsä Board’s comparable operating result in April–June 2022 is expected to improve compared to January–March 2022 (EUR 121.5 million)
Slide 15: Summary
Summary • Another record high quarter, supported by higher paperboard prices • Strong demand for sustainable fresh fibre paperboards continues • Cost inflation remains high, especially in logistics • Russia’s attack on Ukraine impacts Metsä Board’s operations and weakens visibility
Slide 16: My! Metsa
My! Metsa
Slide 17: Appendix
Appendix a Metsa
Slide 18: Key financials
Key financials Change Q1/22 Q1/21 Q1/22 Q4/21 FY/21 vs Q1/21 Sales EUR, m 582 494 18% 518 2,084 EBITDA* EUR, m 143 112 27% 109 472 Operating result* EUR, m 121 89 37% 91 387 % of sales* % 20.9 18.0 17.6 18.6 Metsä Fibre’s share of operating EUR, m 31 13 35 123 result* Earnings per share EUR 0.31 0.1
Slide 19: Long-term financial targets
Long-term financial targets Comparable ROCE: Net debt/ Dividend policy: Target at least 12% comparable EBITDA: Payout ratio at least 50% Maximum level 2.5x of net result 21.1 59 18.7 Target 12.2 Target < 2.5x 54 10.4 > 12% 51 50 1.1 0.7 -0.2 -0.2 2019 2020 2021 Q1 22 2019 2020 2021 3/2022 2018 2019
Slide 20: Cost inflation continued in Q1 2022
Cost inflation continued in Q1 2022 Metsä Board’s cost structure in 2021 Total costs EUR 1,747 million (1,532) Other fixed Wood 9% (13) 15% (17) • Cost inflation continued in Q1 2022 especially in Personnel logistics, energy and chemicals. Logistics costs 12% (13) increased due to the reduced availa
Slide 21: Impacts of FX changes
Impacts of FX changes Annual transaction exposure total EUR 1.5 billion Other currencies GBP 2% 7% • Impact including hedges, actual – Q1 2022 vs Q4 2021: EUR +3.8 million USD SEK – Q1 2022 vs Q1 2021: EUR -3.5 million 35% 56% • Estimated impacts including hedges – Q2 2022 vs Q1 2022: slightly posit
Slide 22: Debt structure and liquidity
Debt structure and liquidity Interest-bearing debt Liquidity EUR 468 million EUR 957 million Financial leases and Other other loans committed credit facilities 28 192 191 Loans from 249 financial Bonds 565 institutions Syndicated 200 Liquid assets and credit facility investments (RCF) Liquidity is c
Slide 23: Debt maturity and credit ratings
Debt maturity and credit ratings Maturity of interest-bearing debt Total EUR 468 million EUR million 31 March 2022 300 250 • Total interest-bearing debt was EUR 468 200 million and net debt was EUR -100 million 150 100 • The average interest rate on loans at the end 50 of the review period was 2.3%,
Slide 24: Market cap and ownership distribution
Market cap and ownership distribution Metsä Board has two share series, A and B shares Market cap and foreign owners Ownership distribution 31 March 2022 EUR million % 3,500 25 Foreign owners 13% 3,000 20 2,500 15 2,000 Domestic Metsäliitto private owners Cooperative 1,500 19% 48% 10 1,000 5 500 Dom
Slide 25: Roadmap to fossil free mills
Roadmap to fossil free mills 25
Slide 26: Strong evidence of sustainability leadership
Strong evidence of sustainability leadership Metsä Board is among the top Metsä Board again scored ‘Platinum’ in Metsä Board’s GHG emission As part of Metsä Group, Metsä Board is committed companies to have received a triple ‘A’ EcoVadis’s sustainability rating in 2021 reduction targets are approved
Slide 27: Price development of folding boxboard and white kraftliners in Europe
Price development of folding boxboard and white kraftliners in Europe EUR/tonne EUR/tonne 1,300 1,400 Folding boxboard 1,200 1,300 1,200 1,100 1,100 1,000 1,000 900 White top kraftliners 900 800 800 700 700 600 600 500 500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sources
Slide 28: Price development of pulp (PIX)
Price development of pulp (PIX) Long-fibre (SW) and short-fibre (HW) pulp USD or EUR USD or EUR 1,400 1,400 1,350 1,350 1,300 Long-fibre Europe, USD 1,300 1,250 1,250 1,200 1,200 1,150 Short-fibre Europe, USD 1,150 1,100 1,100 1,050 1,050 1,000 1,000 950 950 900 900 850 850 800 800 750 750 700 700 6
Slide 29: Price development of pulpwood in Finland and Sweden
Price development of pulpwood in Finland and Sweden Delivery at roadside Finland Sweden EUR/m3 SEK/m3 40 400 35 350 30 300 25 250 20 200 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Pine Spruce Birch Pine Spruce Bir
Slide 30: FX rates development: EUR/USD and EUR/SEK
FX rates development: EUR/USD and EUR/SEK EUR/USD EUR/SEK 1.25 11.2 1.23 11 1.21 1.19 10.8 1.17 10.6 1.15 10.4 1.13 1.11 10.2 1.09 10 1.07 1.05 9.8 30
Slide 31: Together we make the perfect package
Together we make the perfect package Katri Sundström Vice President, Investor relations +358 10 462 0101 katri.sundstrom@metsagroup.com