leading european fresh forest fibre paperboard … and other...growth of the folding boxboard...
TRANSCRIPT
Metsä Board
Metsä Board Leading European Fresh Forest
Fibre Paperboard CompanyMatti Mörsky
12 September 2013
Metsä Board
Content
1. Metsä Board’s Consistent Strategy
2. Profitable Growth of the Paperboard Business
3. Improving the Profitability of Husum
4. Result Development and Outlook
5. Focus Areas
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Metsä Board
Metsä Board’s Consistent Strategy
3
Metsä Board
Metsä Board in Brief
‒ Annual sales about 2.2 b€
‒ Leading European paperboard company
‒ Major uncoated fine and printing paper and market pulp supplier
‒ Valuable holdings in Metsä Fibre and Pohjolan Voima
‒ Global sales and customer service network in 70 countries and nine production units in Finland, Sweden and Germany
‒ Listed on the NASDAQ OMX Helsinki Ltd and a part of MetsäGroup, one of the largest forest industry groups in Europe
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Metsä Board
Consistent Strategic Direction
‒ Paperboard is Metsä Board’s core business
‒ Good growth potential
‒ Growth through maximising capacity of existing
mills
‒ Smaller but healthier paper business
‒ Heavy re-engineering and successful
divestments
‒ Extensive fibre know-how and pulp self-sufficiency
‒ Continuous development towards Super Productivity
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Metsä Board
Metsä Board’s Future Was Secured by Massive Re-Engineering of the Paper Operations
‒ In 2006, the successful strategic review of the company’s paper
business was started. Our paper capacity then was about 5
million t/a
‒ Closures of 2 million tonnes annual capacity
‒ Divestments worth over 2 b€ incl.
‒ Graphic Papers business for Sappi
‒ Map Merchants for Sequana
‒ New Thames for DS Smith
‒ Material productivity improvement of the remaining paper units
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Metsä Board
Metsä Board is Heavily Focused on Paperboard. Paper Business Accounts Only About a Quarter of Total Sales
Sales distribution 2Q 2013
Paperboard 59%Paper 26%
Market pulp 15%
Sales distribution 2006
Paper 56%
Paperboard 18%Paper merchanting26%
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Metsä Board
Metsä Board’s Productivity Has Improved by over 60%
Year end
8
300
600
900
1 200
1 500
1 800
2006 2007 2008 2009 2010 2011 2012 2013E
tonn
es/a
/per
son
Capacity per employee in Metsä Board’s board, paper and pulp mills
Metsä Board
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Profitability of Metsä Board’s Core Business is the Best in its Field
Operating result, excl. non-recurring items, % of sales
Metsä Board
Profitable Growth in Paperboard Business
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Metsä Board
The Strategy of Metsä Board’s Paperboard Business Has Been Very Successful
‒ Focusing on lightweight fresh forest fibre paperboards
and the brand owner customer segment
‒ Reaching the European market leadership
‒ Securing healthy price level as the market leader
‒ Productivity improved nearly 60% since 2006
EBIT, excl. non-recurring items, % of sales
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Metsä Board
Metsä Board’s Main Product, Lightweight and Pure FBB, Is an Excellent Result of Successful Product Development
‒ Folding boxboard is a multilayered packaging material made of fresh forest fibre
‒ Pure and safe folding boxboard is an excellent material also for the most demanding end uses
‒ Metsä Board’s folding boxboards are up to 30% lighter than other paperboards
‒ Metsä Board’s production machinery has been renewed and capacity increased by about 20%
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Metsä Board
Growth of the Folding Boxboard Business Proceeding According to Expectations‒ FBB delivery volumes in 1H 2013 over 10 % higher than a year ago
‒ Efficiencies of the FBB machines have developed according to plans‒ There is still room for improvement at all mills
‒ Current products are further improved‒ Further reduction in weight and improvement of product and
service portfolio
‒ New products and end use areas are actively developed
‒ Europe remains our main market but new business is actively pursued also in North America and Asia
‒ Metsä Board is able to increase its FBB capacity further with moderate investments, if market situation so requires
0
1000
2000
3000
2010 2012 1-2Q 2013
Metsä Board FBB machines’ daily production
Tons+20%
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Metsä Board
Metsä Board’s Lightweight Folding Boxboard has Excellent Growth Potential Globally also in the Coming Years
‒ Global cartonboard demand growth 3–4 %/a
‒ Excellent way for consumer goods companies to
improve sustainability with Metsä Board’s ecological
FBB
‒ Threshold for new producers to enter high performance
FBB segment is very high
Share of ecological FBB of total cartonboard market still low in all continents
Europe 34%North America 4%
Asia 22%
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Metsä Board
Metsä Board is the World’s Leading Producer of High-Quality Coated White Top Kraftliners
‒ Fresh forest fibre linerboards are used in high-quality corrugated boxes increasingly also in consumer packaging end uses
‒ Metsä Board has strong long time presence both in Europe and North America
‒ Demand is increasing 3–4 % globally. Main growth drivers are sustainability, safety and top class quality
‒ The coating section of the Kemi linerboard mill was upgraded in 2011 and the production will focus mainly on coated grades
‒ The profitability of the Kemi linerboard mill has been improved to a very good level and its capacity is in full use
Metsä Board’s white-top kraftliner deliveries
EMEA 62%
Americas 37%
Asia-Pacific 1%
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Metsä Board
Metsä Board Is Increasing Capacity to Grow Its Linerboard Business
‒ Production of light-weight fully bleached uncoated linerboards has been started at Husum mill‒ Linerboard was produced at Husum until early 2000s
‒ Husum’s new products replace partially the mill’s unprofitable paper production and complement Metsä Board’s linerboard portfolio in an excellent way
‒ Kemi mill is further dedicated to coated grades and part of the uncoated volumes are transferred to Husum
‒ Target is to produce min. 80,000 tonnes of kraftliner at Husum in 2014 ‒ About 30,000 t/a to be transferred from Kemi mill which focuses on
coated grades‒ Total deliveries expected to be about 20,000 t/a in 2H 2013
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Metsä Board
Improving the Profitability of Husum
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Metsä Board
New Measures Taken to Improve Husum’s Profitability Husum is the largest unit in its field in Europe with top class productivity
Increase of pulp production to 750,000 tonnes and paper production to over 800,000 tonnes
New measures to improve profitability are needed due to the difficult situation of the European paper market
New 15 m€ cost savings programme ongoing
New, more profitable products are being developed in addition to current products
Possibilities to participate the European paper industry consolidation are still being surveyed
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Metsä Board
Result Development and Outlook
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Metsä Board
625 24 26
436
32
-21
20 30
-40
-20
0
20
40
60
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
685 660 616 524 545 522 509532 535 503
0
200
400
600
800
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
28 16-11
-33
17 10 9-9
194
-50
-25
0
25
50
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Sales, m€ Operating result excl. non-rec. items, m€
Result before taxes excl. non-rec. items, m€
Operating Result in 2Q 2013 Roughly in Line with the Previous Quarter
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Metsä Board
Financial Situation Continues Good
‒ Net debt 606 m€
‒ Net gearing 74%, equity ratio 32.4% at end 2Q 2013
‒ The 500 m€ term loans were drawn and the remaining 450 m€ of the 500 m€ eurobond was repaid in April
‒ Metsä Board’s cash about 130 m€ at end 2Q 2013 and a 100 m€ RCF available
‒ Average interest rate 3.9% at end 2Q 2013
Net Debt, m€
606
3693
2403
0
500
1000
1500
2000
2500
3000
3500
4000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2Q13
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Metsä Board
Short-Term Profitability Outlook
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‒ Metsä Board’s operating result, excluding non-
recurring items, is in the third quarter of 2013
expected to be weaker than in the second quarter of
2013 primarily due to the maintenance shutdowns at
Husum and Kemi mills
Metsä Board
Focus Areas
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Metsä Board
Key Focus Areas in 2013
1. Fully benefit the potential of the expanded folding boxboard capacity
2. Develop even more ecological paperboards and expand the current product range
3. Improve profitability and cash flow of the current paper mills
Husum, Kyro Paper and Gohrsmühle
4. Increase the amount of contractual market pulp customers
5. New measures towards Super Productivity and best in class supply chain
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Metsä Board
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Thank You!