Metsä Group Interim Report 1–9/2013, Stock Exchange Release 6 November 2013 at noon EET Result for January–September
- Sales amounted to EUR 3,715 million (1–9/2012: EUR 3,773 million).
- Operating result excluding non-recurring items was EUR 256 million (185). The operating result including non-recurring items was EUR 247 million (164).
- Result before taxes excluding non-recurring items was EUR 171 million (106). Result before taxes including non-recurring items was EUR 162 million (86).
- Return on capital employed excluding non-recurring items was 9.0 per cent (6.9).
- Cash flow from operations amounted to EUR 293 million (297).
Result for July–September
- Sales amounted to EUR 1,213 million (7–9/2012: EUR 1,242 million).
- Operating result excluding non-recurring items was EUR 73 million (68). Operating result including non-recurring items was EUR 63 million (57).
- Result before taxes excluding non-recurring items was EUR 41 million (35). Result before taxes including non-recurring items was EUR 31 million (25).
- Return on capital employed excluding non-recurring items was 7.5 per cent (7.1).
Events in the third quarter of 2013
- Metsä Tissue’s EUR 55 million mill investment in Poland was completed.
- Renewed Vilppula sawmill was started in September.
- Sales volume of pulp increased by almost 14 per cent from the previous quarter.
- Delivery volumes of folding boxboard and liner increased slightly in the third quarter.
- Demand for wood products was weak due to seasonal factors, as expected.
- Metsä Wood announced that it will discontinue the operations of the upgrading and distribution unit in Kaskinen, Finland.
- The market situation for papers continued to be weak in Europe.
“ The operating result for the third quarter met our expectations. The operating result of Pulp improved due to price increases, and the development of Tissue and Cooking Papers was stable. Delivery volumes of folding boxboard and liner increased. Seasonally weak demand in Wood Products and planned maintenance shutdowns of the mill integrates, on the other hand, lowered the result for the quarter. We have continued the determined development of our business operations in accordance with our strategy. We focus our investments on products with increasing demand and in which we have clear competitive advantages. The start-up of liner production in Husum, Sweden, the modernised tissue paper capacity in Krapkowice, Poland, and the new polysulphide digestion method adopted in Joutseno, Finland, are good examples of our recent investments that improve productivity and efficiency and strengthen our market position. The competitiveness of Finland has been under pressure for a long time. Swift action to reinforce the export industry’s competitiveness and equal operational conditions is necessary if we want to secure industrial production and jobs in Finland.” Kari Jordan, President & CEO, Metsä Group
Metsä Group
| Income statement, EUR million The figures for 2012 are restated | 2013 1–9 | 2012 1–9 | 2013 7–9 | 2012 7–9 | 2012 1–12 |
| Sales | 3 714.7 | 3 773.0 | 1 213.0 | 1 242.2 | 5 001.0 |
| Other operating income | 56.1 | 51.5 | 16.6 | 14.1 | 76.8 |
| Operating expenses | -3 329.7 | -3 463.6 | -1 098.9 | -1 133.7 | -4 587.2 |
| Depreciation and impairment losses | -194.3 | -196.6 | -67.4 | -65.6 | -249.1 |
| Operating result | 246.8 | 164.3 | 63.3 | 57.0 | 241.5 |
| Share of profit from associates | 9.2 | 5.0 | -0.2 | 1.1 | 4.8 |
| Exchange gains and losses | -1.9 | 1.4 | -2.0 | 1.7 | 2.4 |
| Other net financial items | -91.7 | -85.2 | -30.0 | -35.3 | -115.5 |
| Result before income tax | 162.4 | 85.5 | 31.2 | 24.6 | 133.2 |
| Income taxes | -45.3 | -33.9 | -10.6 | -8.6 | -31.8 |
| Result for the period | 117.1 | 51.7 | 20.6 | 16.0 | 101.4 |
| Profitability The figures for 2012 are restated | 2013 1–9 | 2012 1–9 | 2013 7–9 | 2012 7–9 | 2012 1–12 |
| Operating result, EUR mill. | 246.8 | 164.3 | 63.3 | 57.0 | 241.5 |
| - “ -, excluding non-recurring items | 255.7 | 184.7 | 73.0 | 67.8 | 255.7 |
| - “ - % of sales | 6.9 | 4.9 | 6.0 | 5.5 | 5.1 |
| Return on capital employed, % | 8.7 | 6.2 | 6.5 | 6.0 | 6.7 |
| - ” -, excluding non-recurring items | 9.0 | 6.9 | 7.5 | 7.1 | 7.1 |
| Return on equity, % | 8.4 | 4.1 | 4.4 | 3.5 | 6.1 |
| - ” -, excluding non-recurring items | 9.0 | 5.8 | 6.5 | 5.9 | 6.9 |
| Financial position The figures for 2012 are restated | 2013 30.9. | 2012 30.9. | 2013 30.6. | 2012 30.6. | 2012 31.12. |
| Equity ratio, % | 36.1 | 34.2 | 35.0 | 33.6 | 34.8 |
| Net gearing ratio, % | 84 | 90 | 89 | 94 | 86 |
| Interest-bearing net liabilities, EUR mill. | 1 583 | 1 648 | 1 649 | 1 705 | 1 590 |
Segments
| Sales and Operating result January–September 2013 (EUR mill.) | Wood Supply and Forest Services | Wood Products Industry | Pulp Industry | Paperboard and Paper Industry | Tissue and Cooking Papers |
| Sales | 1 167.6 | 683.3 | 974.0 | 1 540.1 | 741.7 |
| Other operating income | 6.4 | 6.3 | 14.7 | 34.4 | 5.1 |
| Operating expenses | -1 151.1 | -663.4 | -797.1 | -1 416.4 | -676.6 |
| Depreciation & impairment losses | -2.2 | -30.3 | -46.1 | -75.1 | -29.8 |
| Operating result | 20.7 | -4.1 | 145.5 | 83.0 | 40.4 |
| Non-recurring items | - | 17.4 | - | -7.9 | -0.6 |
| Operating result, excl. non-rec. items | 20.7 | 13.4 | 145.5 | 75.1 | 39.8 |
| - % of sales | 1.8 | 2.0 | 14.9 | 4.9 | 5.4 |
Near-term outlook In Finland, demand for logging sites harvestable in the summer and for energy wood will continue to be stable, but there will be some regional variation in the wood trade. Sales in the wood products industry are expected to grow in the fourth quarter compared with the previous quarter and remain at the level of the corresponding period in the previous year. The utilisation rates of Metsä Fibre’s pulp mills are expected to remain good in the fourth quarter. Demand and supply are in balance, and the situation is expected to be stable. Delivery volumes of folding boxboard are estimated to decrease slightly in the fourth quarter compared with the previous quarter due to seasonal variations resulting from the December holiday period. Metsä Board has announced that it will increase the prices of folding boxboard by approximately EUR 70 per tonne during the fourth quarter. The aim is to also include the price increases in next year’s annual agreements that are currently being negotiated, accounting for approximately 60 per cent of the full-year folding boxboard delivery volume. No significant changes in the average price of white-top kraftliner are in sight. Delivery volumes of uncoated fine paper are expected to increase slightly in the fourth quarter of 2013, while delivery volumes of coated paper are expected to be approximately at the previous quarter level. No significant price changes are in sight. Demand for tissue paper is expected to continue to grow in all of the company’s market areas, increasing particularly in Central Eastern Europe and Russia. Metsä Group’s operating result excluding non-recurring items in the fourth quarter of 2013 is expected to improve from the third quarter. Disclosure procedure Metsä Group follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority and hereby publishes its Interim Report for January–September 2013 enclosed to this stock exchange release. Metsä Group’s complete Interim Report is attached to this release in pdf-format and is also available on the company's web site at www.metsagroup.com . METSÄ GROUP Group Communications For further information, please contact: Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0)10 465 4260 Reeta Kaukiainen, SVP, Communications, Metsä Group, tel. +358 (0)10 465 4541, +358 (0)50 522 0924 www.metsagroup.com Metsä Group is a responsible forest industry group whose products’ main raw material is renewable and sustainably grown Nordic wood. Metsä Group focuses on tissue and cooking papers, consumer packaging paperboards, pulp, wood products, and wood supply and forest services. Its high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group’s sales totalled EUR 5.0 billion in 2012, and it employs approximately 11,500 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 125,000 Finnish forest owners .
