Profitability guides our future growth
Mika JoukioCEO
This presentation includes forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,”
“estimate,” “will,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or any similar expressions
identify certain of these forward-looking statements. Others can be identified from the context in which the statements are
made. By their nature, forward-looking statements are subject to assumptions, risks and uncertainties. Although we
believe that the expectations reflected in these forward-looking statements are reasonable, actual results may differ, even
materially, from those expressed or implied by these forward-looking statements. We urge presentation participants not to
place undue reliance on such statements.
The information and views contained in this presentation are provided as at the date of this presentation and are subject to
change without notice. Metsä Board does not undertake any obligation to publicly update or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Viewers should understand that this presentation does not constitute, and should not be construed as, an offer to buy or
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or commitment or decision to invest in Metsä Board securities whatsoever. Potential investors are instructed to acquaint
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published by Metsä Board to form a comprehensive picture of the company and its securities.
Metsä Board publishes inside information according to Market Abuse Regulation (MAR) and rules of the Nasdaq Helsinki.
2
Disclaimer
• Our focus is on high-quality paperboards
made from fresh fibres, where we have a
leading position
• We have a clear strategy for sustainable
and profitable growth
• Fresh fibre paperboard market offers
attractive growth opportunities
3
Profitability guides our
future growth
• Our strategic cornerstones:
– We focus on premium fresh fibre
paperboards
– We target profitable growth together with
brand owner, converter and merchant
customers globally
– Profitability is based on superior cost
efficiency and healthy sales prices
• Global trends are driving demand
• We are self-sufficient in pulp
4
We are a pure-play paperboard company…
35% 32%
Folding boxboard
in EuropeTotal capacity 3.8m tonnes
White kraftliner
in EuropeTotal capacity 2.1m tonnes
Metsä
Board
#1
#2#3
#4
#5
Others Metsä
Board
#1
#2#3
#4
#5
Others
We have a leading position in Europe
Wood products Paperboard
METSÄ
TISSUE
METSÄ
FOREST
Wood supply and
forest services
METSÄ
FIBRE
Pulp and sawn
timber
METSÄ
WOOD
METSÄ
BOARD
Tissue and
cooking papers
Group’s parent company, owned by 104,000 Finnish forest owners
METSÄLIITTO COOPERATIVE
METSÄ GROUP
METSÄ BOARD
OWNS 24.9%
• High availability of northern wood
• Consistent quality of fibres that are tailor-made for the end products
…with good control of wood raw materials,
from forests to pulp and board production
White kraftlinersRetail-ready tray and point-of-sale solutions
Food service boardsSolutions for food service
Folding boxboardsPackaging solutions for consumer goods
We continue to deliver solid performance through our
light, pure and safe paperboards…
Our total paperboard capacity is
2m tonnes/yearof which
1/3 are white kraftliners and
2/3 folding boxboard 0
500
1000
1500
2000
2500
14 15 16 17 LTM
SalesEUR million
0
3
6
9
12
15
0
50
100
150
200
250
14 15 16 17 LTM
Operating resultEUR million and % of sales
.. with increasing shareholder value and
growing dividends
Enterprise value, EUR million
0
500
1000
1500
2000
2500
3000
3500
2012 2013 2014 2015 2016 2017 9/18
Market capitalization, EUR million
Net debt, EUR million
Dividend, EUR and payout ratio, %
0%
20%
40%
60%
80%
100%
0,00
0,05
0,10
0,15
0,20
0,25
2012 2013 2014 2015 2016 2017
Dividend, EUR Dividend/EPS, %
7
CAGR in dividend
+30%in 2012–2017
Our financial targets are unchanged and aim for
profitable growth and a strong balance sheet
Comparable ROCE, %
9,1
11,3
8,1
11,2
14,1
2014 2015 2016 2017 LTM
1,8
1,2
2,0
1,21,0
2014 2015 2016 2017 9/2018
Net debt / comparable EBITDA
10%
13%12%
15%
6%
2014 2015 2016 2017 LTM
Annual growth in total paperboard deliveries, %
Target is to
exceed
relevant
market
growth,
3%/a
Dividend policyWe aim to distribute at least 50% of our
result for the financial period in annual dividends
Target >12% Target <2.5
88
Global paperboard market is growing by 3% annually –
and we have a strong position in it
9
The total packaging market is USD 850 billion Average annual growth rate of paperboard packaging
USD
300 bn
US
D b
nSource: Smithers Pira
0
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017 2022F
+3% per year 2017–2022
Board and Paper
Other fibre-based
Plastic
Metal
Glass
36%
10%
34%
13%
7%
Rapidly growing concern about non-renewable
packaging materials is increasing demand for
fresh fibre paperboards
Lighter packaging reduces CO2 emissions across the
value chain – Our fossil CO2 emissions per product tonne
have reduced by almost 50% since 2009
Less energy, water and
raw material consumed
Less
transport
weight
Less waste
generated
RAW MATERIALS AND SUPPLY CHAIN
We are committed to high performance on sustainability
Share of certified wood:
PERFORMANCE 2017
80%TARGET
>80%
Ensure sustainability of the main logistics
flows:
TARGET
100%
Fossil CO2 emissions per product tonne
2009–2020:
PERFORMANCE 2017
-47%TARGET
-30%
Energy efficiency improvement
2009–2020:
PERFORMANCE 2017
10.2%TARGET
12%
Process water use per product tonne
2010–2020:
PERFORMANCE 2017
-17%TARGET
-17%
Coverage of Code of Conduct training:
PERFORMANCE 2017
79%TARGET
100%
Lost-time accidents frequency annually
(LTA1: 6.4):
PERFORMANCE 2017
-28.4%TARGET
-10%
Sickness absenteeism:
PERFORMANCE 2017
3.9%TARGET
<3%
RESOURCE EFFICIENCY AND ENVIRONMENTAL IMPACTS
STAKEHOLDERS AND SOCIAL IMPACTS
PERFORMANCE 2017
100%
External recognition for and commitments to sustainability:
A rating of AAA in the
MSCI ESG Ratings
assessment in June
2018.
Leader in
Sustainalytics’
assessment in May
2018.
Profitability guides our future growth
14
We have been growing at a CAGR of 12% –
well above average market growth …
0
500
1 000
1 500
2 000
2013 2014 2015 2016 2017 LTM
White kraftliner Folding boxboard
Metsä Board’s annual paperboard deliveries
Annual global
demand growth for
folding boxboard
and white kraftliner
is estimated to be
3%
Source: Metsä Board´s own research
1,0
00 t
onnes
2011–12
Debottlenecking in Simpele, Äänekoski
and Kyro mills: total 150,000 t/a of FBB
2015–16
New folding boxboard production line in
Husum: 400,000 t/a of FBB
Linerboard production line conversion
in Husum: 270,000 t/a of WKL
2017
New extrusion coating line in Husum:
100,000 t/a PE coating capacity
15
…driven by capacity increases
0
30
60
90
120
150
180
2010 2011 2012 2013 2014 2015 2016 2017 2018E
Maintenance capex Growth capex Depreciation
Capital expenditure and depreciation
EUR million
• Our top priorities:
– To keep ROCE above 12% and
– To generate the highest possible
shareholder value
• The best returns can be achieved from
medium-sized investments to increase
the capacity of our current production
lines
• In medium term, this means moderate
growth and a strong focus on profitability
• Our long-term financial targets remain
unchanged
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Next steps:
Profitability first
• We are a pure-play paperboard company
focused on high-quality paperboards
• We have high availability of northern wood
and self-sufficiency in pulp
• Sustainability is driving demand and
making our business even stronger
• In the medium term, we are aiming for
moderate growth, and we have strong
focus on profitability
17
Profitability guides our
future growth