metsä board agm 2013, ceo's review
DESCRIPTION
Metsä Board Annual General Meeting, held on 26th of March 2013, CEO's review presentation.TRANSCRIPT
Metsä GroupMetsä Board1
CEO’s review
Mikko HelanderAnnualGeneral Meeting, 26 March2013
Metsä GroupMetsä Board2
Contents
1. Consistent Strategy
2. Key Events and Financial Performance in 2012
3. Profitable Growth in Paperboard Business
4. Improving the Profitability of Husum
5. Focus Areas in 2013
Metsä GroupMetsä Board3
Consistent Strategy
Metsä GroupMetsä Board
Consistent Strategic Direction
4
‒ Cartonboard 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
Metsä GroupMetsä Board
Metsä Board is Heavily Focused on Paperboard. Paper Business Accounts Only About a Quarter of Total Sales
5
Sales distribution 4Q 2012
Paperboard 57%Paper 26%
Market pulp 17%
Sales distribution 2006
Paper 56%
Paperboard 18%Paper merchanting 26%
Metsä GroupMetsä Board6
Profitability of Metsä Board’s Core Business is the Best in its Field
Operating result, excl. non-recurring items, % of sales
Metsä Board FBB and Linerboard
Metsä GroupMetsä Board
Metsä Board’s Productivity has been Improved by 70 per cent since 2006
Year end
7
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 GroupMetsä Board
Balance Sheet Has Strengthened Materially
8
827777
1254
1867
2403
783625
0
500
1000
1500
2000
2500
3000
2006 2007 2008 2009 2010 2011 2012
Net debt, EUR million
838490
99
126
106
72
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010 2011 2012
Net gearing ratio, %
Metsä GroupMetsä Board9
Key Events and Financial Performance in 2012
Metsä GroupMetsä Board
Key Events in 2012 (1/2)
‒ Metsä Board’s FBB market share in Europe continued to increase
‒ EUR 120 million investment programme was completed‒ Increase of annual FBB capacity by 150,000 tonnes ‒ Commissioning of Kyro biopower plant
‒ New coated linerboards from Kemi mill were launched successfully to the market
‒ The strategic review of the paper business was finalized‒ Heavy losses from Alizay were eliminated and the assets divested‒ Unprofitable operations of Gohrsmühle were discontinued
‒ Productivity at the Husum mill was improved considerably‒ Increase of annual pulp production from 690,000 tonnes to 750,000 tonnes and paper production from 735,000
tonnes to over 800,000 tonnes
10
Metsä GroupMetsä Board
Key Events in 2012 (2/2)
‒ Change of the company’s business name from M-real to Metsä Board
‒ Divestment of 7.3 per cent shareholding in Metsä Fibre Oy and 0.5 per cent shareholding in Pohjolan Voima Oy for 202 m€
‒ Agreement on 600 m€ refinancing was signed
‒ Net debt reduced from 783 m€ to 625 m€
11
Metsä GroupMetsä Board
Profitability Improved in 2012
030
0
25
50
75
100
2011 2012
-281
176
-300
-150
0
150
300
2011 2012
-9,9
12,3
-10
-5
0
5
10
15
2011 20122485
2108
0
1000
2000
3000
2011 2012
5974
0
40
80
120
2011 2012
SalesOperating result, excl. non-rec. items
Result before taxes, excl. non-rec. items
m€ m€
m€
-214
220
-300
-150
0
150
300
2011 2012
Operating result
m€
Result before taxes
m€
ROCE
%
12
-273
173
-300
-150
0
150
300
2011 2012
m€
Net result, m€
-168
230
-300
-150
0
150
300
2011 2012
m€
Parent company net result, m€
Metsä GroupMetsä Board1313
Material Positive Non-Recurring Items Booked in 2012
m€ in EBIT
Sale of 7.3 %-point holding in Metsä Fibre +85Sale of 0.5 %-point holding in Pohjolan Voima +59Reversal of impairments and reductions of cost provisions related to Alizay mill +11Reduction of cost provisions related to Gohrsmühle mill +6Cleaning expenses of a land area in Tampere in Finland -8 Other net non-recurring items -7
Total +146
Metsä GroupMetsä Board
Short-Term Profitability Outlook
14
‒ Metsä Board’s operating result for the first quarter of
2013, excluding non-recurring items, is expected to
improve slightly from the fourth quarter of 2012
Metsä GroupMetsä Board
Profitable Growth in Paperboard Business
15
Metsä GroupMetsä 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
16
Metsä Board FBB and Linerboard
Metsä GroupMetsä 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 per cent lighter than other paperboards
‒ Very significant factor for environment and cost competitiveness
‒ Metsä Board’s production machinery has been renewed and capacity increased by some 20 per cent
Top know-how of paper, mechanical, energy and chemicalengineering are combined in the production of high-quality foldingboxboards
17
Metsä GroupMetsä Board
Metsä Board’s Lightweight Folding Boxboard has Excellent Growth Potential Globally
‒ Global cartonboard demand growth 3-4 %/a
‒ Excellent way for consumer goods companies to
improve sustainability with Metsä Board’s ecological FBB
‒ Metsä Board is further strengthening its market position
globally
‒ Metsä Board has good potential to further increase its
current FBB machines’ capacity with Smart Investments
‒ 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%
18
Metsä GroupMetsä 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
‒ The coating section of the Kemi linerboard mill was upgraded at the end of 2011. The production will focus mainly on coated grades
‒ The new double coated linerboards, launched in spring 2012, have proven their success
‒ The profitability of the Kemi linerboard mill has been improved to a very good level
‒ Metsä Board has good potential to further increase its linerboard capacity with Smart Investments
19
Metsä GroupMetsä Board20
Improving the Profitability at Husum
Metsä GroupMetsä 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
21
- New measures to improve profitability are needed due to the difficult situation of the European paper market
- New cost savings programme implemented
- New, more profitable products are being developed in addition to current products
- Possibilities to participate the European paper industry consolidation are still being surveyed
Metsä GroupMetsä Board22
Focus Areas in 2013
Metsä GroupMetsä Board23
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 the profitability of the Husum mill
4. Continue the measures to further improve the quality, productivity and
cost-competitiveness of operations
Metsä GroupMetsä Board
Thank you!