Metsä Board

Metsä BoardResults 2Q 2014

Metsä Board

Key Events in 2Q 2014

‒ Paperboard delivery volume continued to increase. Increase of FBB sales to North American markets progressed as planned

‒ Price levels of the main products were stable

‒ Profitability weakened due to successfully completed annual maintenance shutdowns at Husum and Metsä Fibre’s Äänekoski and Joutseno mills

‒ Clear net debt reduction to EUR 540 million due to very strong cash flow

‒ Introduction of new folding boxboards and linerboards proceeded successfully

‒ Mika Joukio appointed as the new CEO latest as of 1 December 2014

2

Metsä Board

3019

29 28

6

2520

24 2636

0

10

20

30

40

50

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

545 522 532 509 535 503 479502 501 494

0

200

400

600

800

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

-9

1710 9

199

184

2021

-10

0

10

20

30

40

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

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

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

Operating Result in 2Q 2014 Weakened as Expected Due to Annual Maintenance Shutdowns

3

Metsä Board

‒ Result was improved mainly by higher folding boxboard delivery volumes

‒ Result was weakened by Metsä Fibre’s Äänekoski and Joutseno pulp mills’ annual shutdowns

‒ Folding boxboard price level was stable in 2Q 2014 and no material changes are expected in the coming months

‒ Folding boxboard deliveries are expected to slightly increase in 3Q 2014

‒ Good service ability for North American customers guaranteed by increased inventories

‒ Great start for recently launched folding boxboards Carta Dedica for cups and plates and Carta Allura for luxury packaging

4

EBIT, excl. non-recurring items

Sales

Cartonboard’s 2Q 2014 Operating Result Continued to Improve

m€

m€

182020

1215

10

0

6

12

18

24

30

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

219214208220218222

0

50

100

150

200

250

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Metsä Board

Linerboard and Paper’s 2Q 2014 Result Weakened by the Maintenance Shutdowns

‒ Result was weakened mainly by the scheduled annual maintenance shutdowns at Husum and Metsä Fibre’s Äänekoski and Joutseno mills

‒ Fresh forest fibre linerboard deliveries were at strong level but decreased slightly from previous quarter. Prices were stable

‒ Paper delivery volumes decreased and prices remained stable at low levels

‒ Market pulp delivery volumes increased and prices were stable

‒ Fresh forest fibre linerboard deliveries are expected to increase slightly in 3Q. Paper and pulp deliveries are forecast to remain at previous quarter level

‒ No material price changes in sight in the main products

‒ Kemi maintenance shutdown has some negative result impact in 3Q

5

EBIT, excl non-recurring items

m€

m€

Sales

20

151516

7

20

0

5

10

15

20

25

30

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

271262

288 269 267250

0

50

100

150

200

250

300

350

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Metsä Board

Thanks to Strong Cash Flow Net Debt Reduced to EUR 540 Million

‒ Gross debt EUR 699 million and net debt EUR 540 million

‒ Net gearing 65 %, equity ratio 40 % and average interest rate reduced to 4.2% at the end of 2Q 2014

‒ Funds from operations increased to EUR 102 million in 2Q

‒ ONWC reduced clearly from 1Q due to accounts payable improvement measures and timing reasons

‒ Solid liquidity position of over EUR 400 million

6

Net Debt / EBITDA

Net Debt, m€

540

827

0

250

500

750

1000

2010 2011 2012 2013 2Q14

2,52,7

0

1

2

3

4

5

2010 2011 2012 2013 2Q14

Metsä Board

Short-Term Profitability Outlook

7

‒ Metsä Board’s operating result, excluding non-

recurring items is in the third quarter of 2014

expected to improve slightly from the second

quarter of 2014

Metsä Board

Strong Growth in Paperboard Businesses Continues

‒ Metsä Board’s paperboard deliveries increased in 1H 2014 over 6 % from last year despite recession in domestic market Europe

‒ Target is to further grow both FBB and fresh forest fibre linerboard businesses

‒ Continued growth in Europe and increased efforts in Asia and especially in North America

‒ Sentiment in paperboard market has further improved in recent weeks and order inflows have somewhat strengthened

8

169 176 185 185 189 192 197 185 191 197

8085

93 8594 93

9591

109 108

0

50

100

150

200

250

300

350

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

Fresh forest fibre linerboardFolding boxboard

Paperboard deliveries, 1000 tonnes

Metsä Board

Metsä Board’s FBB Has Proven Its Competitiveness Among North American Consumer Goods Companies and Converters

9

‒ Missing piece to the North American cartonboard offering enabling the enhancement of sustainability

‒ Even over 30 % lighter in weight than competing paperboards

‒ Long-term contracts signed with several leading North American converters and merchants

‒ Target in 2014 is to at least double FBB deliveries to North America from the 35 000 tonnes last year

0

5

10

15

20

25

2Q13 3Q13 4Q13 1Q14 2Q14

FBB deliveries to North America, 1,000 tonnes

+200 %

Metsä Board

Mika Joukio (50) the New Metsä Board CEO Latest as of 1 December 2014

10

‒ MSc (Tech), MBA

‒ CEO of Metsä Tissue Corporation since 2012

‒ Extensive experience in Metsä Board’s paperboard businesses including

‒ Head of paperboard business area and deputy to the CEO ‒ Several mill manager positions‒ Head of corporate logistics and supply chain

Metsä Board

Appendix

Metsä Board

ROCE and EBIT, Percentage of Sales

12

EBIT % of sales excl. non-recuring items, ROCE %, excl. non-recurring items

6,5

-6,2

6,6

2,4

3,6

5,2

-8

-6

-4

-2

0

2

4

6

8

10

2009 2010 2011 2012 2013 1H14

6,4

4,8

3,4

7,6

-5,6

8,8

-6

-4

-2

0

2

4

6

8

10

12

2009 2010 2011 2012 2013 1H14

Target min. 10 %

Metsä Board

EBITDA Development

13

EBITDA excl. non-recurring items, m€

114

208

186179

305

44

0

60

120

180

240

300

2009 2010 2011 2012 2013 1H 2014

Metsä Board

Business Area Performance – Comparison to Previous Quarter

Sales, m€

2Q 20141Q 2014

14

214

271

219

262

0

50

100

150

200

250

300

350

Cartonboard Linerboard andPaper

182020

15

0

6

12

18

24

30

Cartonboard Linerboard andPaper

Operating result, excluding non-recurring items, m€

Metsä Board

Business Area Performance – Comparison to Previous Year

1H 20141H 2013

15

Sales, m€

440

557

433

532

0

100

200

300

400

500

600

Cartonboard Linerboard andPaper

3227

3835

0

10

20

30

40

50

Cartonboard Linerboard andPaper

Operating result, excluding non-recurring items, m€

Metsä Board

Balance Sheet Ratios

16

777

827783

625597

540

17,7

2,7

4,43,4

2,9 2,5

0

100

200

300

400

500

600

700

800

900

2009 2010 2011 2012 2013 2Q 140

2

4

6

8

10

12

14

16

18

20

Net Debt and Net Debt/EBITDA* Net Gearing, %

65

84 83

106

7270

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2Q14

Net debt, m€ Net debt/EBITDA

*Excluding non-recurring items

Metsä Board

EUR / tonne

Folding Boxboard Market Price in Europe2004 – 2Q 2014

17

Source: Pöyry Management Consulting

800

900

1000

1100

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Metsä Board

18

500

600

700

800

900

2009 2010 2011 2012 2013 2014

White-Top Kraftliner Market Price in Europe2009 – 2Q 2014

Source: Foex

Metsä Board

EUR / tonne

Paper and Pulp Market Price in Europe1998 – 2Q 2014

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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140,8

0,9

1

1,1

1,2

1,3

1,4

1,5

1,6

1,7

19

Metsä Board

Ownership Structure 30.6.2014Shares Votes

Source: Euroland20