Metsä BoardInvestor presentation Q3 2015

2

Contents

Q3 2015

Investment highlights 3

Operating environment and market position 14

Strategic cornerstones and financial targets 23

Final steps of transformation 31

Q3 2015 results and outlook 39

Balance sheet and funding 51

Product development and capital expenditure 60

Capacity and deliveries 65

Cost structure and sourcing 71

Sustainability 76

General information 83

Owners 91

Contact information 94

Investment highlights

Metsä Board is market leader in folding boxboard in

Europe and global market leader in coated white top

kraftliner

4

• Main customers are consumer goods companies,

converters and merchants

• Best-in-class profitability and a technology leader

• Steady cash flow generation and strong balance sheet

• Strong fibre know-how and self-sufficiency in pulp

• Valuable holdings in Metsä Fibre (24.9%) and

Pohjolan Voima (2.6%)

• Global sales to over 100 countries and eight

production units in Finland and Sweden

Sales split2014

Paperboard

Paper

Sales by region 2014

EMEA

Americas

APAC

*) Includes Market pulpQ3 2015

RETAIL-READY

FOOD SERVICE

CONSUMER GOODS

Metsä Board’s customers benefit from high-performance

packaging materials

Folding boxboard, white top kraftliners and fully bleached linerboard

6

Metsä Board’s paperboard business’ profitability

is top of its field in Europe

Q3 2015

ROCE-% and EBIT, %

3,4

4,8

6,4

9,1

12,1

0

2

4

6

8

10

12

14

2011 2012 2013 2014 9/2015

%

2,4

3,6

5,2

6,8

9,4

0

2

4

6

8

10

12

14

2011 2012 2013 2014 9/2015

%

Q3 20157

ROCE-%, excl. non-recurring items EBIT-%, excl. non-recurring items

8

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

1 000

1 300

1 600

1 900

2 200

2 500

2 800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016F

Production capacity/employee Number of employees

Strong continuing improvement in productivity

Production capacity (tonnes) / employee at current mills

Q3 2015

No. of

employees

Production

capacity/

employee

• Pure and safe

• Superior printing surface

• Consistently high quality

• Even over 30% lighter in weight than other paperboards

Metsä Board’s paperboards offer an excellent way for

consumer goods companies to improve quality of their

packages and sustainability of their operations

9

Metsä Board’s paperboards are

examples of successful product

development

40,8 g

Recycled

fibre board

35,2 g

Solid

bleached

board

30,2 g

Average

folding

boxboard

27,7 g

Metsä Board’s

folding

boxboard

Q3 2015

• Continuous steady growth above the market

• The biggest growth drivers are

– strong and long-term customer relationships

– innovative high-performance product portfolio to

replace other packaging materials

– best-in class customer service concept

• Paperboard sales volume in Jan–September 2015

up by 10 % compared to corresponding period in

2014.

Q3 201510

Metsä Board is the market leader in

Europe

• Metsä Board uses only

fresh forest fibre from

sustainably managed

northern forests.

• Americas is our main growth market

• The biggest growth drivers are

– Limited local supply in high-quality paperboards

– Due to strong consolidation, converters without own

paperboard production are looking for alternatives

• In folding cartons their share is 40–50%

– Growing environmental awareness

• Paperboard sales volume in Jan–September 2015 up

by 20 % compared to corresponding period in 2014.

11

Metsä Board has a significant

foothold in North America

• Paperboard offers a

sustainable option

for plastics such as

styrofoam in food

service applications.

Q3 2015

• Metsä Board is the paperboard quality benchmark in

Asia

• Responsible consumer goods companies promote

good packaging

– Sustainability

– Traceable raw materials

– Product safety

• Due to the local overcapacity in Asia, the timing is not

good for aggressive growth.

12

Focus on the high-quality segment

in APAC

• Global consumer

goods companies are

not willing to change

paperboard suppliers

easily in the high-

quality segments.

Q3 2015

• Limited availability of high quality fibre– Sustainably harvested high quality fresh forest fibres are a must

– Own state of art chemical, mechanical and BCTMP pulping capacity

vital competitive factors

• Leading global consumer goods companies and corrugated box

manufacturers not willing to change paperboard suppliers easily

in the high-quality segments– High speed packaging lines very quality sensitive

– Requirements for uniform brand look and feel globally

– Sustainability and product safety aspects

• Skilled people and organizations a crucial success factor– High-quality paperboard companies have traditions from several

generations

Q3 201513

High threshold for new producers to

enter high-quality board segment

Operating environmentand market position

GLOBALISATION TECHNOLOGY SUSTAINABILITY CONSUMPTION

• Increasing role of retail

and harmonisation of

global brands

• Growing importance of

logistics

• Consolidation of carton

converters

• New innovations

utilising wood fibre and

other biomaterials

• Continuous

development of

production

technologies

• Digitalisation and

automatisation change

business dynamics

• Greater significance of

resource efficiency

drives circular

economy and life-cycle

thinking

• Increasing regulation

brings additional

obligations

• Social responsibility

through value chain

• Growing consumption

and consumers’

increasing quality

needs globally

• Stronger demand for

sustainable packaging

• Digital services change

purchasing behavior

Demand is based on global trends

Fresh forest fibre paperboard

Other wood fibre based materials

Non-fibre based materials

16

The global fresh forest fibre paperboard packaging

market is about USD 110 billion

Source: Metsä Board estimates

0

20

40

60

80

100

120

140

2013 2014 2015 2018E

USD bn

USD 110 bn

The total packaging market is

USD 800 billion

Estimated average annual growth rate of

fresh forest fibre paperboard is 3-4%

Q3 2015

Global cartonboard market is about 36 Mt/aThe share of FBB is 9 Mt or 25% of the total market

17

Folding boxboard

Other fresh forest fibre grades

Recycled grades

Source: Metsä Board estimates

APAC20 Mt/a

EMEA8 Mt/a

North America6 Mt/a

Lat. Am.2 Mt/a

Q3 2015

Avg. growth rate

for premium

cartonboards is

3–4%/a

Market price development in EuropeFolding boxboard and white-top kraftliner

Q3 201518

500

600

700

800

900

1000

1100

2009 2010 2011 2012 2013 2014 2015

Taivekartonki Valkopintainen kraftlaineriFolding boxboard White-top kraftliner

Folding boxboard

1/2009–9/2015

White-top kraftliner

1/2009–9/2015

EUR/tonne

Sources: Pöyry Management consulting, FOEX Indexes Ltd.

350

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

'04 '05 '06 '07 '08 ´09 '10 '11 '12 '13 '14 '15

350

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

Havu

Lehti

Lehti

Havu

USD

EUR

Pulp price development in USD and EUR (PIX)

Q3 201519

Source: Foex Indexes Ltd

Softwood pulp

Softwood pulp

Hardwood pulp

Hardwood pulp

USD EUR

Metsä Board strengthens its market leadership

Q3 201520

Largest Folding Boxboard

Producers in Europe1,000 tonnes

400

4002000 800 1,2001,000 1,400600

Capacity: 1000 tons/a

Current Post-

measures

Holmen (7%)

IP (8%)

Mayr-Melnhof (13%)

Stora Enso (25%)

935(35%)

150

2001000 700300 600500400

Smurfit Kappa

(15%)

(13%)

Mondi

580(29%)

(25%)

(12%)

Current

730 / 34%

Post-

measures

SCA

BillerudKorsnäs

Capacity: 1000 tons/a

+43%+21%

1,335 / 43%

Note: Share of production capacity currently shown in parenthesis

Sources: Metsä Board, Pöyry Management Consulting Oy

Largest White Fresh Forest Fibre

Linerboard Producers in Europe1,000 tonnes

Folding Boxboard Capacities in Europe BIG 5 = 89% of total

Q3 201521

0 100 200 300 400 500 600 700 800 900 1000

Others

Cascades

Holmen

IP

Mayr-Melnhof

Stora Enso

Metsä Board

8%

8%

7%

5%

35%

25%

13%

Capacity: 1,000 tonnes/yearSource: Pöyry Management Consulting Oy

White fresh forest fibre linerboard capacities in Europe BIG 5 = 94% of total

Q3 201522

Capacity: 1,000 tonnes/yearSource: Metsä Board and Pöyry Management Consulting Oy

0 100 200 300 400 500 600 700

Others

SCA

BillerudKorsnäs

Mondi

Smurfit Kappa

Metsä Board 29%

25%

15%

13%

12%

7%

Strategic cornerstones and financial targets

Metsä Board’s vision is to be the preferred

supplier of premium paperboards creating

value for customers globally

Strategic cornerstones are

• Focus

• Growth

• Profitability

Q3 201524

Responsible profitability

Reliability

Cooperation

Renewal

Focus

Focus on premium fresh forest fibre

paperboards for consumer and retail packaging

This means to us:

• We focus on serving customers whose quality

expectations require our high quality, light and strong

packaging materials.

• Our paperboards are produced from fresh forest fibres.

• Our products are used for packages at the store and

from the store to the consumer.

Q3 201525

Growth

Grow profitably together with brand owner, converter

and merchant customers globally in businesses that

benefit from our safe and sustainable paperboards

This means to us:

• We grow in end-uses where our product is best suited to

protecting our customers’ products and promoting their brands

and businesses.

• Our customer base is global, including brand owner, private

label, converter and merchant customers.

• By selecting businesses that benefit from our paperboards we

can generate value for our customers and grow profitably with

them.

Q3 201526

Profitability

Profitability is based on superior cost efficiency

and healthy sales prices driven by high-quality

pulps and unique technical know-how

This means to us:

• Our superior cost efficiency will be achieved by further

developing productivity and efficiency of our mills, operations

and people.

• We will continue to drive down purchasing costs in all areas.

• Our self-sufficiency in high-quality pulps together with unique

paperboard making expertise helps us to improve our market

position further and maintain healthy price levels.

Q3 201527

Financial targets

Minimum ROCE 12%* from 2017

3,4

4,8

6,4

9,1

12,1

2011 2012 2013 2014 Q1–Q3/2015

106

72 70

51

34

2011 2012 2013 2014 9/2015

Q3 201528

Maximum net gearing 70%

* excl. non-recurring items

%%

• Return on capital employed (ROCE) a minimum of 12% from 2017 onwards• Net gearing not to exceed 70%

• Grow the paperboard businesses profitably globally

• Exit underperforming paper businesses

• Secure good price levels

• Keep best in class product quality and improve supply chain

• Develop new products for existing and new end uses

• Continue productivity improvements and cost savings

Q3 201529

Main priorities and actions to achieve

financial targets

Earnings per share and dividend paid

1,85

0,460,3

-0,43

-0,79

-0,25

-1,21

-0,59

-1,59

-1,09

0,09

-0,83

0,52

0,19 0,21

0,51 0,51 0,51

0,250,12 0,12 0,06 0,06 0,06 0,09 0,12

-1,6

-1,1

-0,6

-0,1

0,4

0,9

1,4

1,9

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Earnings per share, EUR Dividend per share, EUR

Q3 201530

Dividend policy: • Metsä Board’s dividend policy is to pay a dividend of at least 1/3 of the Company's EPS

• Dividend pay-out in 2014: 57% (2013: 47%)

Final steps of transformation

New measures finalise Metsä Board’s

successful transformation

Q3 201532

Market

growth

Fresh

Forest Fibre

Paperboard

ROCE %

European

paper

2006: New strategy

2007–2013: Numerous divestments,

closures and restructuring measures

2015: Completion of the transformation

The leading fresh forest fibre

paperboard company in Europe

Q3 201533

Husum will become a leading fresh

forest fibre paperboard unit in Europe

Folding boxboard production

• Capacity 400,000 t/a

• Deliveries mainly to Americas and

Food service globally

• Start up in Jan 2016, full production

capacity reached by the end of 2016

• Expected delivery volumes in 2016

at least 200,000 tonnes

• Total investment EUR 170 million

Linerboard production

• Capacity 300,000 t/a

• Deliveries to Europe and Americas

• Remaining uncoated paper* production to

linerboard production by the end of 2017

Capacity changes 2014 vs. 2017:

• Paperboard capacity +700,000 tn/a

• Paper capacity -600,000 tn/a

*) Currently, the paperboard machine BM2 produces simultaneously uncoated paper

(capacity 100,000 tn/a). This production will will be finished by the end of 2017.

Ambitious growth targets for new paperboard

volume from Husum millIf the demand supply situation so requires in the coming years,

Metsä Board has possibilities to adjust its production accordingly

250

150150

0

500

1 000

1 500

2 000

Estimateddeliveries in 2015

Folding boxboardto Americas

Food serviceboard globally

Linerboard toEurope andAmericas

Targeteddeliveries in 2018

34

A total of 400 000 tonnes of

new FBB capacity

1,0

00 tonnes

Q3 2015

Most important growth area is Americas

0

50

100

150

200

250

300

2011 2012 2013 2014 2015E 2018 target

Folding boxboard Fresh forest fibre linerboard

35

Actual and targeted deliveries to Americas

1,0

00 tonnes

300

250

Q3 2015

36

Gohrsmühle mill in Germany

divested to mutares and its partner

company in May 2015

• mutares AG is a stock listed German industrial holding

company focusing on acquiring companies in special situations

• Negative cash flow impact of about EUR 37 million, which was

clearly less than in the case of a potential closure

• Positive non-recurring item of EUR 17.5 million was booked in

2Q 2015

• Gohrsmühle’s main products are cast coated and label

papers and there are approximately 480 employees

Q3 2015

• Based on growth of paperboard business and discontinuation

of paper production, Metsä Board’s annual sales is expected to

remain rather stable

• Transformation process in Husum mill, Sweden

– Annual Operating result impact +EUR 50 million

– Fully impact mostly in 2017 and fully in 2018

– Expected impact on 2016 is roughly one third of the total

• Gohrsmühle divestment

– Annual Operating result impact +EUR 20 million

– Roughly half materialises in 2015

– Reduces annual sales by EUR 90 million

• Total paperboard capacity after the transformation

over 2 million tonnes

Q3 201537

Completion of the transformation

and expected impacts

All figures are based on company estimates and compared to FY2014 figures

Paperboard is Metsä Board’s core business

74 %

26 %

2014

Paperboard Paper

38

81 %

19 %

2015E

Paperboard Paper

96 %

4 %

2016E

Paperboard Paper

Paperboard includes the market pulpQ3 2015

Q3/2015 results and outlook

• Profitability improved from the previous quarter

• Paperboard delivery volumes grew and price levels remained

stable

• Production of coated paper ended at Husum mill

Q3 201540

Solid performance in Q3/2015

After the review period:

• Metsä Board announced price increase in FBB in Europe

• Installation of new FBB machine in Husum began

• Investment decision in extrusion coating

ROCE, % (excl. non-recurring items)target is >12% from 2017

3,44,8

6,4

9,1

12,1

0

2

4

6

8

10

12

14

2011 2012 2013 2014 Q1–Q3/15

Steady sales and improving margins

Q3 201541

19 29 36 28 35 37 43 47 550%

5%

10%

15%

0

10

20

30

40

50

Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Operating result*EUR million and % of sales

9 18 21 20 27 32 32 40 480%

5%

10%

15%

0

10

20

30

40

50

Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Pre-tax result* EUR million and % of sales

502 479 501 494 514 499 526 522 498200

300

400

500

600

Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

SalesEUR million

*) excluding non-recurring items

Paperboard delivery volumes

Lower FX hedging costs

Negative profit impact from Gohrsmühle mill* was eliminated

Strike in Finland

Maintenance shutdown in Kemi

Paper delivery volumes (planned)

Q3 201542

Main operating result drivers

in Q3/2015 vs. Q2/2015

*) Divested in May 2015

Paperboard deliveries continued to grow in Q3/2015Annual average growth rate (CAGR) in 2013–2015E: 12%

Q3 201543

189 192 197 185 191 197 210 203 204 213 224

94 93 9591

112 110120

111130

141137

0

60

120

180

240

300

360

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Folding boxboard Fresh forest fibre linerboard

1,000 tonnes

Paperboard segment in Q3/2015: Sales increased and profitability improved

Q3 201544

Operating result, excl. non-recurring itemsSales

EU

R m

illio

n

EU

R m

illio

n

4451

61 60 65

12%

14%16% 15% 16%

-2%

1%

4%

7%

10%

13%

16%

0

20

40

60

Q3/14 Q4/14 Q1/15 Q2/15 Q3/150

100

200

300

400

Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Q3/2015 highlights

• FBB deliveries increased compared to Q2/2015

• Price level remained stable

• Result was weakened by the strike in Finland and maintenance shutdown in Kemi

Operating result, M€

Operating result, M€

EBIT-%

Non-core operations segment in Q3/2015: Sales decreased as expected

Q3 201545

Operating result, excl. non-recurring itemsSales

EU

R m

illio

n

EU

R m

illio

n

0

50

100

150

Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

-2,9 -1,8 -3,2 -3,4 -1,3

-2%

-1%

-3%-3%

-2%

-4%

-2%

0%

2%

-4

-2

0

2

Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Q3/2015 highlights

• Paper deliveries decreased as planned and prices declined slightly compared to Q2/2015

• Negative profit impact from Gohrsmühle was eliminated (divested in May 2015)

• Coated paper production discontinued in Husum

Operating result, M€

Operating result, M€

EBIT-%

Other operations segment result

Q3 201546

-2 -6 -6 -12 -14 -9 -9

-15

-12

-9

-6

-3

0

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Other operations segment:

Operating result, excl. non-recurring itemsEUR million

• Other operations segment include costs which

are not allocated to units, e.g. head office costs

• Cost base of these is roughly EUR 4–5 million

per quarter

• Result fluctuation is caused by hedge

accounting result, which has had a negative

impact of EUR 3–8 million per quarter during

the past year

• In Q3/2015, the hedge accounting impact was

EUR -5 million (H1/2015: EUR -16 million).

Strong cash flow from operations

33

-19

92 51 74 33 56 9110

-24

78 46 56 9 8 45

82

19

114

157

198

250

214

254

22

-37

57110

155

188

119 118

-100

-50

0

50

100

150

200

250

300

Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Cash flow from operations, quarterly Free cash flow, quarterly

Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months

Q3 201547

€ million

Q3 201548

Near-term outlook for Q4/2015

• Paperboard delivery volumes are expected to decrease slightly due

to the seasonally weaker December. Average price level is expected

to remain stable

• Metsä Board announced price increase in FBB in Europe, effective

from 1 December

• Paper delivery volumes will decrease clearly as planned

• Long fibre pulp supply and demand is expected to be in balance

• The earlier announced investment shutdown in Husum will have a

negative impact on operating result of approximately EUR 15 million

• Average production costs are not expected to change materially in

Q4/2015

Metsä Board’s operating result excluding non-recurring items in

Q4/2015 is expected to decline compared to Q3/2015

The result is weakened primarily due to the shutdown of the

integrated mill related to Husum's investment programme

Q3 201549

Profit guidance for Q4/2015

• Effective ramp-up of new cartonboard machine

• Ensure successful sales of new capacity

• Secure good price levels

• Keep high product quality and further improve

supply chain

• Continue product development and enter new

end use areas

• Ensuring the cost efficiency and productivity

Q3 201550

Key priorities in 2016

2Q/2015 Results and OutlookFunding and Debt InformationBalance sheet and funding

Strong balance sheet

Equity ratio, %

27%

33%

41%39%

46%

0%

10%

20%

30%

40%

50%

2011 2010 2013 2014 9/15

106%

73% 70%

51%

34%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 2014 9/15

Q3 201552

Net gearing, %

783 625 597 427 344

4,4

3,42,9

1,8

1,2

0

1

2

3

4

5

0

200

400

600

800

1000

2011 2012 2013 2014 9/15

Net debt, EUR million

Net debt/EBITDA

Net debt, EUR million and Net debt/EBITDA

Target 70%

FX exposure by currencyAnnual gross amount €1.1 bn

49 %

17 %

30 %

4 %

USD GBP SEK Other currencies

Currency Q3 2015 Estimated in

2017

USD, $ +45 M€ +70 M€

GBP, £ +20 M€ +10 M€

Swedish krona -30 M€ -30 M€

53

Annual FX sensitivities to Group EBIT

Foreign exchange exposure and sensitivites

10 % strengthening of foreign currency vs. EUR

will have an impact on EBIT:

• Duration of Metsä Board’s hedges of the main foreign currency flows has been 4–6 months during the last 12 months

• Segment figures reflect exchange rate changes rapidly but hedge accounting result in Other operations balance the impact

Q3 2015

Diversified funding sources, strong liquidity

33 %

30 %

26 %

3%7 % Bonds

Loans from financialinstitutionsPension loans

Finance leases

Other loans

Q3 201554

Debt structureTotal EUR 670 million

30 September 2015

69 %

21 %

10 % Liquid assets andinvestments

Revolving creditfacility

Undrawn pensionloan

Available liquidityTotal EUR 467 million

30 September 2015

Average interest rate of IB at the end of Q3/2015 was 3.8%.

Well-balanced maturity schedule

6446

96

182

254

25

0 1

100

45

0

50

100

150

200

250

300

2015 2016 2017 2018 2019 2020 2021 >2021

Long-term interest bearing liabilities and committed undrawn credit facilities 30 September 2015

Long-term interest bearing liabilities Committed undrawn credit facilities

Q3 201555

EUR million

Financial costs are declining steadily

47 56 39 273,0

3,5

4,0

4,5

5,0

5,5

0

20

40

60

2012 2013 2014 Q1–Q3 2015

Net financial costs, EUR million

Average interest rate, %

• Net financial costs in January–

September totalled EUR 27 million

(Q1–Q3/2014: EUR 34 million)

• Declining costs due to the lower

interest rates, credit margins and

IB debt

• Average interest rate in IB debt in

Q1–Q3/2015 was 3.8%

Q3 201556

Net financial costs and average interest rateEUR %

Debt programmes 30 September 2015

Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity

EUR 225 million bond Issue 2014 225 225 4.5 2019

Syndicated credit facility 2014 250 150 3.7 2018

EUR 104 million bilateral loans 104 104 2.9 2015–2017

EUR 21 million finance leases 21 21 2.2 2015–2020

EUR 218 million pension loans 218 172 3.7 2015–2020

Q3 201557

Metsä Board’s significant debt securities issued and outstanding at 30 September 2015

* The average interest rate take into account outstanding interest rate swaps and amortised arrangement fees

The average interest rate of all Metsä Board interest bearing net liabilities incl. interest rate derivatives per 30 September 2015 is 3.8%

Metsä Board’s principal long-term liquidity reserves at 30 September 2015Liquidity reserves Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity

Revolving credit facility 2014 100 0 - 2018

Pension loan facilities 218 172 3.7 -

Short-term funding programmes

Metsä Group internal short-term limit 150 0 - 0–12 months

Metsä Group Treasury funding programmes

EUR 150 million domestic CP programme 150 0 - 0–12 months

Ratings’ history

2000: S&P: Short term ratings lowered to A3, Long term ratingsplaced to credit watch negativeMoody’s: Long and short term ratings outlook changed fromstable to negative

2001: S&P: Long term ratings lowered to BBB-, stable outlookMoody’s: Long and short term ratings lowered to Baa3/P3,negative outlook

2003: S&P: Downgrade to BB+, stable outlook Moody’s: Downgrade to Ba1, negative outlook

2004: S&P: Outlook changed from stable to negative, ratings affirmedMoody’s: Downgrade to Ba2, stable outlook

2005: S&P: Downgrade to BB, stable outlookMoody’s: Outlook changed from stable to negative, ratings affirmed

2006: S&P: Downgrade to BB-, negative outlookMoody’s: Downgrade to Ba3, negative outlookMoody’s: Downgrade to B2, negative outlookS&P: Downgrade to B+, negative outlook

2007: Moody’s: Downgrade to B3, negative outlookS&P: Downgrade to B, negative outlookS&P: Downgrade to B-, stable outlook

2008: S&P: Outlook to negative

2009: S&P: Downgrade to CCC+, negative outlook Moody’s: Downgrade to Caa1, outlook negative

2010: S&P: Outlook to stableMoody’s: Outlook to stableS&P: Upgrade to B-, stable outlookMoody’s: Upgrade to B3, outlook to positive

2011: S&P: Outlook to positiveS&P: Outlook to stableMoody’s: Outlook to stable

2012: Moody’s: Outlook to positive

2013: S&P: Outlook to positiveMoody’s: Upgrade to B2, outlook stableS&P: Upgrade to B, outlook stableMoody’s: Outlook to positive

2014: S&P: Outlook to positiveMoody’s: Upgrade to B1, outlook positive

2015: S&P: Upgrade to BB, outlook stableMoody’s: Upgrade to Ba2, outlook stable

58 Q3 2015

Positive rating development

59

Moody’s

Standard & Poor’s

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

BB+ | Ba1

StableStableBB | Ba2

BB- | Ba3

B+ | B1

B | B2

B- | B3

CCC+ | Caa1

CCC | Caa2

Q3 2015

2Q/2015 Results and OutlookProduct development and capital expenditureProduct development and capital expenditure

Q3 201561

Increased emphasis on

product development

• Further improvement of product quality and sustainability

• Close cooperation with customers

• Technical properties of food service boards will be developed

and thus the end use range widened

• The Kyro mill will be the first in the world to start testing foam

forming on a production scale – Improves printing surface and enables further reduction of weight

– Reduces the use of raw materials, energy and water

– Metsä Board has done extensive development work for several

years to commercialise this new technology

Q3 201562

Metsä Board expands its offering in

food and food service paperboards

by investing in extrusion coating

• Investment value EUR 38 million

• Will be implemented at Husum mill

• Start-up in Q1/2017 with capacity of 100,000 t/a

• In 2015–2016 Metsä Board’s paperboards are coated by

external converter

• The company continues to develop other barrier

solutions including biobased materials

Food service packaging requires barrier features

e.g. moisture and fat resistance

Capital expenditure and depreciation

0

30

60

90

120

150

180

2010 2011 2012 2013 2014 2015E 2016E

Capex Growth capex Depreciation

• Annual capex excluding the growth capex

is €40-60 million

• Main growth capexes:

– Debottlenecking at Finnish mills in 2010–12

– Husum investment 170 M€ in 2015–16

– Extrusion line 38 M€ in 2016–17

– Metsä Fibre’s bioproduct mill 25 M€ in 2016

Q3 201563

€ million

• Net capacity increase at the site is approximately 800,000 t/a– Investment cost of approximately EUR 1.2 billion

– Start up in 3Q 2017

• Capital invested by Metsä Board will be EUR 24,9 million– Metsä Board has no other financial commitments in the project

• Metsä Board’s holding in Metsä Fibre remains unchanged at

24.9 per cent

• All in all, Metsä Board’s pulp balance is expected to be

500,000–600,000 t/a long from 2018 onwards– Majority of the market pulp is softwood chemical pulp

– Reserve to grow paperboard business further in the future while

maintaining self-sufficiency in pulp

Q3 201564

Metsä Board’s associated company

Metsä Fibre builds a bioproduct mill

Capacity and deliveries

Production locations

Q3 201566

HusumÄänekoski

Simpele

Joutseno

Kemi

TakoKyro

Kaskinen

Paperboard mills

• Husum

• Kemi

• Kyro

• Tako

• Simpele

• Äänekoski

Pulp mills

• Husum

• Joutseno

• Kaskinen

Speciality paper mill

• Kyro

Production Capacity

Currently

Q3 201567

After implementation ofthe planned measures

0

500

1 000

1 500

2 000

2 500

Paper Paperboard Pulp and BCTMP0

500

1 000

1 500

2 000

2 500

Wallpaper base Paperboard Pulp and BCTMP

Paperboard and paper capacity in 2015

Town Country Machines Folding

boxboard

White

fresh

forest fibre

linerboard

Uncoated

fine paper

Speciality

paper

Coated

paper

Total

Tampere

(Tako) Finland 2 205 205

Kyröskoski

(Kyro) Finland 2 190 105 295

Äänekoski Finland 1 240 240

Simpele Finland 1 300 300

Kemi Finland 1 410 410

Husum Sweden 3 170 400 240 810

Total 10 935 580 400 105 240 2,260

Q3 201568

1,000 t/a

Pulp capacity in 2015

Metsä Board

pulp mills

Country Chemical

pulp

BCTMP Total

Husum Sweden 750 750

Joutseno Finland 310 290

Kaskinen Finland 310 300

Total 750 620 1,340

Q3 201569

1,000 t/a

Metsä Fibre

pulp mills

Country Chemical

pulp

BCTMP Total

Äänekoski Finland 530 530

Kemi Finland 590 590

Rauma Finland 650 650

Joutseno Finland 690 690

Total 2,460 2,460

Metsä Board ownership share of Metsä Fibre is 24,9 %

Deliveries by region in 2014

Q3 201570

46%

27%

14%

13%

Western Europe

Eastern Europe

Americas

Asia and Pacific

57%

6%

36%

1%

85%

11%

4%

Folding Boxboard Fresh forest fibre linerboard Uncoated fine paper

Cost structure and sourcingCost structure and sourcing

Cost structure in 2014

Q3 201572

Delivery costs15%

Wood25%

Chemicals, pigments and fillers

16%

Energy11%

Other variables

4%

Personnel 15%

Other fixed15%

Fixed

costs

Variable

costs

Electricity sourcing in 2014(total 2,737 GWh)

Q3 201573

Own generation23%

Through PVO shareholding

30%

Purchased energy47%

Fuels used in 2014(total 12.9 TWh)

Q3 201574

Wood-based59%

Nuclear power19%

Natural gas6%

Hydro5%

Coal7%

Oil1%

Peat3%

Wood sourcing by country in 2014(total 5.0 million cubic metres)

Sweden 37%

Finland27%

Baltic countries21%

Russia15%

Q3 201575

SourcingSustainability

Sustainability

Stakeholder engagement

• Ensuring ethical

business practices

• Improving safety at work

• Assuring responsible

management

• Contributing to local

livelihoods and society

Supply chain

• Promoting sustainable

forest management,

certification and the

diversity of forest nature

• Enhancing sustainability

in the value chain

• Ensuring the traceability

of raw materials

Resource efficiency and

emissions

• Making efficient use of

raw materials, energy,

water

• Increasing the value of

side streams

• Maximising the share of

bioenergy

• Minimising emissions to

water and air

Products and services

• Turning renewable wood

into sustainable, safe

and recyclable products

• Providing customer-

focused services and

solutions

• Innovating for

continuous improvement

and renewal

We offer sustainable choices

We bring the forest to you

We work for a better climate and environment

We create well-being

Lightweight paperboards improve sustainability

throughout the value chain

78

ENERGY

Energy efficiency

improvementTarget from 2009 to 2020

12%

Performance by 2014 7%

CLIMATE

Fossil CO2 emissions

per product tonneTarget from 2009 to 2020

-30%

Performance by 2014 -37%

RESOURCE EFFICIENCY

Process water use

per product tonneTarget from 2010 to 2020

-17%

Performance by 2014 -15%

BIOENERGY

Share of

total energy 62%

Q3 2015

Target level in Energy has recently been raised

from 10% to 12%.

• The amount of certified wood was 77%

• A new supply chain management target was

launched: to audit 100% of risk rated key

material suppliers against sustainability

criteria by end 2015

90% of all Metsä Board purchases,

excluding wood, come from countries

where we have own production

Q3 201579

Raw materials and supply chain management 2014

66

16

8

63 1

Finland

Sweden

Germany

Other EU

Outside Europe

Other

Metsä Board purchases by country, % (excl. wood supply)

• Share of wood based biofuels increased to

63% of total fuels

• Energy efficiency has been improved by 7%

from 2009

• Process water use per product tonne has

decreased by 15% from 2010

– 99% of the water we use is surface water

• Total reduction of fossile CO2 emissions has

been 37% since 2009

Q3 201580

Resource and environmental efficiency 2014

976

830 789

681

482

388 380

2008 2009 2010 2011 2012 2013 2014

Metsä Board greenhouse gas effect (CO2 equivalent, 1,000 tonnes)

• In 2014, Metsä Board’s lost-time accident

frequency rate was 12.0 (12.2 in 2013) and

sickness absenteeism rate 3.9 (3.9)

• Metsä Board aims to improve its lost-time

accident frequency rate by 10% each year.

The long-term target is zero

• The target is to keep the sickness

absenteeism rate at the best European

level and below 3% at all times0

1

2

3

4

5

2010 2011 2012 2013 2014

Q3 201581

Well-being and accident rate development 2014

Metsä Board sickness absenteeism

development, target < 3%

• Highest possible score 100/100 for the depth and quality of

climate change data (2014: 98/100 and 2013: 82/100).

• High scores indicate success in providing robust climate change

data and strong understanding of climate-related issues.

Leaders usually have a solid financial performance.

• Metsä Board recognized as world leader for corporate action on

water security.

Q3 201582

Metsä Board recognized as a leader for

corporate actions on climate change

CDP is an international, not-for-profit organization providing the only global system for companies

and cities to measure, disclose, manage and share vital environmental information. CDP works with

market forces, including 767 institutional investors with assets of US$92 trillion, to motivate

companies to disclose their impacts on the environment and natural resources and take action to

reduce them.

General info

Annual sales development

2313

30143319

4044

5898

6923

6564

6044

54605241

5624

4440

3236

24322605 2485

2108 2019 2008

0

1000

2000

3000

4000

5000

6000

7000

8000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Q3 201584

EUR million

EBITDA development

Q3 201585

179 186208 236 224

0

60

120

180

240

300

2011 2012 2013 2014 Q1–Q3/15

EBITDA, excl. non-recurring itemsEUR million

1995, sales EUR 2.3 billion

Q3 201586

2014, sales EUR 2.0 billion

Focus on core businesses

17%

32%

12%

9%

12%

6%

9%3%

Paper

Pulp

Paperboard

Packaging

Tissue

MechanicalForest Products

Merchanting

Chemicals

24%

15%61%

Paper

Pulp

Paperboard

Q3 201587

True success story

2005 Structural change starts

Paper businesses over 80% of sales

Decision to exit paper business

2006 Strategic review launched

Restructuring and focused investment programme initiated, focus on paperboard

2007–2013 Streamlining and focused investments

Paper capacity reduction from about 5 million to 0.8 million annual tonnes

Major divestments incl. Graphic Papers and Map Merchants

Paperboard capacity increases

2013 Strategic review completed

Clear focus on paperboard

Paper production about a quarter of sales

2015 Strong position and growing

Europe’s leading producer of folding boxboard

The world’s leading manufacturer of coated white-top kraftliners

Exit from paper business (fully by end of 2017)

Q3 201588

100 000 B2

shares in

PVO

Acquisitions

Divestments

Biberist Paper Mill

UK Paper

Modo Paper

Zanders

Chemicals

Business

Botnia

WoodCorrugated

PackagingMD Papier Metsä

Tissue

Albbruck Savon

Sellu

Forestia

Kemiart

Liners (53 %)

8% in

Botnia

PSM

9% in

Botnia

Carton

plants

Map

New

Thames MB

Uruguay

Graphic

Papers

Part of

Reflex

Hallein

mill

1997 20001998 1999 2001 2002 2003 2004 2005 2006 2007 20092008 2010 2011

Rest of

Reflex

0.5% in

PVO

2012

7.3 % in Metsä Fibre

2013 2014

Alizay

mill Lielahti

real estate

2015

Gohrsmühle

mill

Simpele Mill

Metsä Board’s restructuring story

Significant Divestments

– EUR 3.7 billion in assets divested since 2001

Q3 201589

Year Divestiture Enterprise Value, EUR million

2015 Gohrsmühle mill in Germany neg.

2014 Lielahti real-estate 32

2013 Alizay property and other estates 22

2012 7.3% stake in Metsä Fibre 138

2012 0.5% stake in PVO 64

2011 Hallein 34

2009 Metsä-Botnia’s Uruguayan operations 300*

2008 Graphic Papers 750

2008 100,000 shares in PVO 80

2008 New Thames mill 82**

2007 Map Merchant Group 382

2007 Folding carton plants 60

2007 Botnia (9%) 240

2005 Botnia (8%) 164

2005 Savon Sellu 20

2005 Forestia (95%) 163

2004 Metsä Tissue 570

2002 Papierfabrik Albbruck 235

2001 MD Papier 300

2001 Noviant (19%) 41

3,679

* Cash portion

**Incl. pension liabilities

Metsä Board Corporate Management Team

as of 1 January 2015

Q3 201590

CEO

Mika Joukio

Marketing and Sales

Seppo Puotinen

Business Development

Sari Pajari

Production and Technology

Ari Kiviranta

Finance

Markus Holm

Human Resources

Susanna Tainio

SourcingSustainabilityOwners

Market cap and foreign owners

42 %

22 %

17 %

19 %

MetsäliittoCooperative

Domesticinstitutionalinvestors

Domestic privateinvestors

Foreign owners

Q3 201592

Ownership distribution

Rising market cap with more foreign owners

0

4

8

12

16

20

0

500

1 000

1 500

2 000

2 500

2011 2012 2013 2014 2015

Market cap, M€

Share of foreign owners, %

*) 13 November 2015

*

Shares, % (total no. of shares 355,512,746)

93

Votes, % (total no. of votes 1,037,530,115)

17,1

2,2

18,5

40,2

4,4

6,1

11,5

Households

Non-profitorganisations

Foreigners*

MetsäliittoCooperative

Other companies

Finance andinsurance companies

Public sectororganisations

10,1 4,1

6,6

60,9

1,82,1

14,5

Households

Non-profitorganisations

Foreigners*

MetsäliittoCooperative

Other companies

Finance andinsurance companies

Public sectororganisations

Ownership structure on 30 September 2015

* incl. nominee registeredSource: Euroland

Q3 2015

Katri Sundström

Vice President, Investor relations

Tel +358 400 976 333

katri.sundstrom@metsägroup.com

www.metsaboard.com

Q3 201594

Contact information