Metsä Board Corporation Investor presentation - January-September 2019 - Metsä Board
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Metsä Board Corporation Investor presentation January–September 2019
Contents
This is Metsä Board ………………………… 3 January-September 2019 Results …….. 32
Planned investments ……………………….. 14 Sustainability ………………………………. 45
Profitability drivers ………………………….. 19 R&D ………………………………………… 56
Operating environment …………………….. 27 Owners, management, contacts ……….... 67
2
Metsä Board in brief Sales split by product
Year 2018: Sales EUR 1.9bn, comparable operating result EUR 252m, Market
ROCE 14.4%, Capex EUR 70m, Personnel 2,352 pulp Folding
18% boxboard
56%
Total paperboard capacity FY 2018:
2Mt/a 8 White
EUR 1,944m
Net pulp balance production units kraftlainer
+600,000t/a in Finland and Sweden 26%
MAIN CUSTOMERS STRONG MARKET POSITION Sales split by region
Brand-owners, converters, merchants #1 in folding boxboard and white kraftliner in Europe APAC
and manufacturers of corrugated products #1 in coated white kraftliner globally 8%
Largest European importer of folding boxboard to US
TOP10 customers: ~25% of sales
Largest customer:
Our focus is on premium fresh fibre paperboards mainly
used for consumer goods packaging
Total paperboard capacity 2Mt, of which 2/3 folding boxboard and 1/3 white kraftliners
Folding boxboards and Food service boards White kraftliners, coated and uncoated
Folding boxboard end-uses* White kraftliner end-uses*
Graphical E-commerce
end-uses
Other
Food and Food consumer Shelf-ready and
Other service goods (e.g. Point-of-sale
consumer electronics) (food,
goods (e.g. beverages,
pharma, cosmetics)
cosmetics) *) all data is indicative and based on
4 Metsä Board’s own estimates
Our fresh fibre paperboards offer solutions for global trends
GLOBALISATION AND SUSTAINABILITY FOOD SAFETY E-COMMERCE
URBANISATION
We use only We have good Our paperboards
We offer recyclable renewable fresh control of raw offer a strong
products that are fibres from materials, which promotion and
ideal for the sustainably guarantees purity branding
circular economy managed northern and safety in food experience
forests contact uses
We have a leading position in Europe in our
main products
Folding boxboard White kraftliner
• Regional sales split of
in Europe in Europe paperboard deliveries (2018):
Total capacity 3.8m tonnes Total capacity 2.1m tonnes
• 70% EMEA
• 23% Americas
Others Metsä Others Metsä
• 7% APAC
Board #5 Board
#1 #1 • In APAC we focus on high-
#5
#4
35% #4
32% quality FBB segment
• We are the largest European
importer of FBB to US
#3
#3 • We are #1 in coated white
#2 #2
kraftliners globally
6
Our production is close to our main raw material
Total paperboard capacity: Our net balance in pulp in 2019,
Folding boxboard (FBB): 1,345,000 t/a including the 24.9% ownership in
White kraftliner (WKL): 675,000 t/a Metsä Fibre, is 600,000 t/a
Wood sourced from
Finland, Sweden,
Kemi Baltics and Russia. Äänekoski
425,000 t/a WKL 255,000 t/a FBB
610,000 t/a Pulp* 1.3 million t/a Pulp*
Husum, SWE Simpele
400,000 t/a FBB 290,000 t/a FBB
250,000 t/a WKL
730,000 t/a Pulp
Kaskinen Joutseno
370,000 t/a BCTMP 330,000 t/a BCTMP
690,000 t/a Pulp*
Kyro Tako
190,000 t/a FBB 210,000 t/a FBB
*Metsä Fibre mill
7
We have good control of wood raw materials,
from forests to pulp and board production
• High availability of Northern wood
• Consistent quality of fibres that are tailor-made for the end products
METSÄ GROUP
METSÄLIITTO COOPERATIVE
Group’s parent company, owned by 103,000 Finnish forest owners
METSÄ METSÄ METSÄ METSÄ METSÄ
FOREST FIBRE WOOD BOARD TISSUE
Wood supply and Pulp and sawn Wood products Paperboard Tissue and
forest services timber greaseproof papers
METSÄ BOARD
OWNS 24.9%
Through Metsä Fibre’s ownership Metsä
Board’s annual net pulp balance is
8 600,000 tonnes long in 2019
We have been growing well above average market
growth rate during past years …
Metsä Board’s annual paperboard deliveries and current capacity, 1,000 tonnes
Total paperboard capacity 2 million tonnes
2 000 2 000
1 500 658 615 1 500
1,000 tonnes
580
539
1 000 444 1 000
373
1144 1215
500 988 500
763 801 865
0 0
2013 2014 2015 2016 2017 2018
White kraftliner deliveries Folding boxboard deliveries Total paperboard capacity
9 * During 2013-2017 the demand growth for FBB and WKL was ~3%/year
… driven by paperboard capacity increases
Capital expenditure and depreciation
Investments in growth 2011–2018:
180
150 2019 New sheeting line in Äänekoski
120 2018 New baling line in Kaskinen BCTMP mill:
30,000 new BCTMP capacity
EUR million
90 2017 New extrusion coating line in Husum:
60 100,000 t/a PE coating capacity
2015–16 New folding boxboard production line in
30 Husum: 400,000 t/a of FBB and linerboard
production line conversion: 250,000 t/a of
0
2011 2012 2013 2014 2015 2016 2017 2018 2019E WKL
2011–12 Debottlenecking in Simpele, Äänekoski and
Maintenance capex Growth capex Depreciation Kyro mills: total 150,000 t/a of FBB
Note! Estimated 2019 capex includes the first instalments related to Husum pulp mill renewal
10Our long-term financial targets aim for profitability
and a strong balance sheet
Comparable ROCE: Net debt/comparable EBITDA: Dividend policy:
At least 12% Maximum level 2.5x Payout ratio at least 50% of net result
76
14.4 < 2.5x
2.0 50
11.8 44 51
11.3 11.2 > 50%
> 12%
8.1 1.2 1.2 1.2
1.0
2015 2016 2017 2018 LTM 2015 2016 2017 2018 LTM 2015 2016 2017 2018
LTM = last twelve months
11Our aim is to create the highest possible
shareholder value
CAGR in dividend
+30%
Dividend, EUR and payout ratio, % in 2012–2018 Enterprise value, EUR million
0,30 100%
3500
0,25 3000
75%
0,20 2500
0,15 50% 2000
1500
0,10
25% 1000
0,05
500
0,00 0%
2012 2013 2014 2015 2016 2017 2018 0
2012 2013 2014 2015 2016 2017 2018 9/2019
Dividend, EUR Dividend/EPS, %
Note! Year 2018 total distribution consists of a Net debt Market capitalization, EUR million
dividend of EUR 0.10 and other distribution of
equity of EUR 0.19 per share
12Capital allocation
Free cash flow in EUR million and % of EBITDA
• Capital allocation for 2019 EUR million %
– EUR 103 million dividend paid in April 200 Comparable 80
EBITDA, LTM,
– Capex: Estimated EUR 90-100 million, including the EUR 301 million
150 60
first instalments of Husum pulp mill renewal
• Estimated impacts on capital allocation from 100 40
Husum pulp mill renewal going forward 50 20
– Capex EUR 320 million in 2019-2022
0 0
• 2020 and 2021 will be the main investment years –
capex split to be communicated when the timing of -50 -20
the environmental permit is known
– Financing mainly through incremental debt – -100 -40
costPlanned investments: Renewal of Metsä Board Husum pulp mill New bioproduct mill and a sawmill line by Metsä Fibre
Metsä Board and Metsä Fibre are planning three major
investments with total value of EUR 2 billion
The aim is to further improve the competitiveness of pulp and energy production
and move towards fossil-free mills
Metsä Board: Husum, SWE Metsä Fibre: Kemi, FIN Metsä Fibre: Rauma, FIN
Renewal of the pulp mill New bioproduct mill New pine sawmill line
EUR 320 million (first phase) EUR ~1.5 billion EUR ~200 million
Metsä Board owns 24.9% of Metsä FibreMetsä Board is planning to renew its pulp mill in
Husum integrate in Sweden
The renewal of the pulp mill would:
➢ Create a solid foundation to increase paperboard capacity in the integrate in the future
➢ Secure cost efficient pulp and energy production
➢ Enable the company to reach its ambitious target of fossil-free mills by 2030
The first phase* of the investment
Investment value is EUR 320 million, divided over 2019–2022
Prefeasibility Company to apply Final investment New recovery boiler and
study on the for an decision expected turbine expected to be in
renewal environmental to be made in operation, at the earliest
concluded permit Q2 2020,
at the earliest
2019 2020 2021 2022
* The second phase of the investment would include the replacement the old fibre lines with one
16 new line and take place during the 2020s after the first phase is fully completedUpdate on planned renewal
Announced after the review period on 31 October
• Background: On 27 August, Länsstyrelsen1)
decided that the planned new recovery boiler
will require an amendment to the environmental
permit
• Metsä Board aims to minimize the delay
caused by the permit process and will make
financial commitments up to EUR 100 million2)
before the final investment decision
• Final investment decision will be made after
receiving the environmental permit, estimated
in Q2 2020, at the earliest
1) Competent authority in Sweden
17
2) Included in the total investment value of EUR 320 millionEstimated impacts on the
first phase of the investment
• Self-sufficiency in electricity to increase from the current
40% to over 80%*
• Reduced amount of purchased oil
• Lower maintenance capex and costs
– Extended intervals between planned shutdowns
– Reduced duration of the planned shutdowns
→ Increased pulp and paperboard production
• Annual cash flow improvement EUR 35 million, of which EUR
30 million EBITDA improvement and EUR 5 million lower capex
• Financing costs to increase EUR 2 million per year
*) Annual increase in electricity production about 330 GWh, resulting in cost
18 savings at current electricity prices of approximately EUR 12 millionMetsä Fibre is planning
two major investments
New bioproduct mill* in Kemi, Finland
• Size of the investment EUR 1.5 billion
• Annual capacity 1.5 million tonnes of chemical pulp and
several other bioproducts
• Final investment decision expected in the summer of 2020
– environmental permit application filed in September 2019
New sawmill line in Rauma, Finland
• Size of the investment EUR 200 million
• Annual capacity 750,000 cubic meters
• If realised, would be the most modern and efficient sawmill
line in the world
• Final investment decision in the beginning of 2020
*)
would replace the existing pulp mill in Kemi, with
19
annual capacity of 630,000 tonnes of chemical pulpMain contributors in Metsä Board’s profitability
Our main profit components and sensitivities
Component Unit Change Impact on EBIT Annual FX transaction exposure
total EUR 1.1 billion
Folding boxboard Price +/- 10% > EUR 100 million Others
GBP 2%
7%
White kraftliners Price +/- 10% ~ EUR 50 million
FX USD/EUR +/- 10% EUR 65 million USD
SEK 57 %
34 %
SEK/EUR +/- 10% EUR 40 million
Pulp PIX price of SW/HW +/- 10% EUR 25 million
per tonne
Wood Cost, delivered to +/-10% EUR 40 million* In 2018, Metsä Board sourced 5.5 million m3
Finnish mills wood, of which 37% from Sweden, 28%
Finland, 20% Baltics and 15% Russia.
Cost, delivered to +/-10% EUR 20 million Including the 24.9% share from Metsä Fibre,
Husum the total sourcing was 8.5 million m3
* incl. ownership in Metsä Fibre
21Costs have remained at a high level in 2019
after the rapid rise in 2018
Metsä Board’s cost split in 2018
incl. 24.9% share of Metsä Fibre’s costs
Cost Estimated development in 2019 vs. 2018
component Other
Wood Rapid rise in 2018. Stabilised but high price level in
fixed
2019 leads to slightly higher costs year-on-year. 14%
Wood
Small decline in Baltics at the end of H1. 28%
Logistics Stable Personnel
13%
Chemicals Stable or slightly lower
Energy Lower costs year-on-year. Offsets the increase in
wood costs. Energy
14% Logistics
Personnel Stable or slightly lower
16%
Chemicals
Other fixed In line with or below general cost inflation 15%
Metsä Board’s total costs in 2018:
EUR 1.7 billion
22 (2017: EUR 1.6 billion)Price development of folding boxboard and
white kraftliner in Europe
EUR/ tonne EUR/ tonne
1200 Folding boxboard 1200
1100 1100
1000 1000
900 900
White-top kraftliner
800 800
700 700
600 600
500 500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
23 Sources: Fastmarkets RISI & Fastmarkets FOEXPrice development of pulp in Europe (PIX)
Long-fibre (SW) and short-fibre (HW) pulp
USD or EUR USD or EUR
1250 1250
1200 Long-fibre, USD 1200
1150 1150
1100 1100
1050 Short-fibre, USD 1050
1000 1000
950 950
900 900
850 850
800 800
750 750
700 700
Long-fibre, EUR
650 650
600 600
550 550
500 Short-fibre, EUR 500
450 450
400 400
350 350
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Fastmarkets Foex
24Price development of roadside pulpwood in Finland
and Sweden
Pulpwood roadside prices in Finland, EUR/m3 Pulpwood roadside prices in Sweden*, SEK/m3
40
390
38 370
36 350
34 330
310
32
290
30 270
28 250
26 230
210
24 190
22 Spruce Birch Pine 170 Spruce Birch Pine
20 150
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2013
2010
2011
2012
2014
2015
2016
2017
2018
2019
Sources: Luke (Natural Resources Institute Finland) and Skogsstyrelsen (The Swedish Forest Agency)
25FX rates development: EUR/USD and EUR/SEK
EUR/USD EUR/SEK
1,26 11
1,24
10,8
1,22
10,6
1,2
1,18 10,4
1,16 10,2
1,14
10
1,12
9,8
1,1
1,08 9,6
26Operating environment for fresh fibre paperboards
Paperboard is roughly one third of total packaging market
The total packaging market is USD 850 billion Average annual growth rate of paperboard packaging
Glass 350
Paperboard +3% per year 2017–2022
Metal 7% 300
13% 250
36%
USD bn
USD 200
300 bn
150
34%
100
10%
Plastic Other 50
fibre-
based 0
2012 2013 2014 2015 2016 2017 2022F
Source: Smithers PiraMetsä Board operates in a growing market
Cartonboard growth forecast Containerboard growth forecast
70000 225
200
60000
175
Million metric tonnes
50000 150
1000 metric tonnes
40000 125
100
30000
75
20000
50
Asia 2.5%/a
10000 25
0 0
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
29
Source: RISI Paper Packaging ForecastsWe have good growth opportunities in premium
paperboards
FSB
36%
Americas EMEA FBB APAC
Other
fresh fibre
grades
FSB FSB
28%
FBB FBB 41%
Other Other Recycled
fresh fibre fresh fibre CWKL grades
grades 38%
grades WKL
Recycled WKL
Recycled CWKL White
77% grades White
grades WKL testliner testliner
White testliner
Cartonboard White linerboard Cartonboard White linerboard Cartonboard White linerboard
Total annual 10 million 3 million 10 million 5 million 22 million 3 million
demand: tonnes tonnes tonnes tonnes tonnes tonnes
FSB = food service board, FBB = folding boxboard, SBS & CUK = other fresh fibre grades, WLC = recycled grades
WKL = uncoated white kraftliner, CWKL=coated white kraftliner
30 Source: Metsä Board research based on several sources,
e.g. CEPI Cartonboard and Containerboard, RISIMetsä Board’s fresh fibre linerboards are at the top of
the quality pyramid
Global annual demand in containerboards totals 170 million tonnes
White White
coated uncoated
kraftliner kraftliner
1Mt 3Mt
White Brown Brown
White kraftliner
testliner kraftliner testliner
4Mt
7Mt 24Mt 67Mt
White linerboard Brown linerboard Fresh fibre Recycled
fluting fluting
11Mt 91 Mt 8Mt 60Mt
Linerboards Fluting
102Mt 68Mt
Total containerboard market
170Mt
31 Source: Metsä Board’s own estimate based on several sourcesPaperboard demand and supply by region
Share of Metsä Board’s total paperboard deliveries in 2018:
AMERICAS EMEA APAC
23% 70% 7%
• Decreasing local supply of • Stable demand in FBB, but • Growing upper/middle class
SBS/FSB and declined customers operate with low and increased purchasing
imports from China stocks power support demand for
• FSB demand growing paperboard
• Environmental commitments
• Stable market situation in and regulations support • Plenty of local supply in
coated WKL demand for sustainable cartonboard
packaging materials
• Metsä Board’s focus is on
• No significant growth in high-quality segment
cartonboard supply
• Several conversions from
paper into containerboard
production
32Branding and personalisation
becoming more important in
E-commerce
• Functionality, durability and consumer experience are the
key words
• Demand for white kraftliner driven by
– Increasing branding of the packaging
– Trend towards shipping the product in its own container
– Personalisation of boxes, supported by advanced technology
in digital printing
• The global value of E-commerce is expected to grow by
20% per year on average, increasing its share of the retail
trade from 10% to 18% in 2017–2021
33 Sources: eMarketer, Smithers PiraResults for January– September 2019
Key financials
Change Change
Q3/19 Q1-Q3 Q1-Q3 Q1–3/19
Q3/19 Q3/18 FY 2018
vs. 2019 2018 vs.
Q3/18 Q1–3/18
Sales EUR, m 489 475 3% 1,453 1,486 -2% 1,944
EBITDA* EUR, m 62 84 -26% 220 263 -16% 344
Operating result* EUR, m 43 64 -33% 145 192 -24% 252
% of sales* % 8.7 13.4 10.0 12.9 13.0
Metsä Fibre’s share of
EUR, m 6 34 -83% 44 92 -52% 124
operating result*
Earnings per share EUR 0.09 0.16 -44% 0.36 0.43 -16% 0.57
ROCE* % 9.7 15.0 11.0 14.7 14.4
Capex EUR, m 18 11 67% 42 36 16% 70
Cash flow from operations EUR, m 44 54 -19% 111 121 -8% 151
IB Net debt, at end of period EUR, m 352 344 2% 352 344 2% 335
35 *comparableQ3 in summary
• Favourable development in paperboard business
– Higher paperboard volumes, stable price
levels and lower costs compared to Q2 2019
• Market pulp prices continued to decline with a
negative impact on the result
• Planned maintenance shutdowns in Kemi and
Husum integrates
Announced after the review period on 30 October:
Planned renewal of Metsä Board’s Husum pulp mill
proceeds. Company to make financial commitments
prior to the final investment decision
36Higher kraftliner volumes pushed total paperboard
deliveries up in Q3
+4%
White kraftliner Folding boxboard +5%
500
447 445 466
400 161
173 170 171 161
149 134 138 146
163 152
1,000 tonnes
1,000 tonnes
300
200
304 299 297 328 297 302 299 305
265 276 293
100
0
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Q1-Q3 2018 total: Q1-Q3 2019 total:
1,405k tonnes 1,352k tonnes
37 -4%Year-to-date paperboard deliveries by grade
Biggest deviations in WKL in EMEA and FBB in APAC
Folding boxboard (FBB) deliveries in tonnes White kraftliner (WKL) deliveries in tonnes
January–September 2019 (1–9/2018) January–September 2019 (1–9/2018)
APAC APAC
77,000 7,000 (3k)
(92k)
2%
9% Americas
Americas 147,000 EMEA
185,000 (134k) 290,000
(192k) EMEA 33% (344k)
20% 645,000
65%
(637k)
71%
Total FBB deliveries Total WKL deliveries
1–9/2019: 907,000 tonnes 1–9/2019: 445,000 tonnes
(1–9/2018: 922,000) (1–9/2018: 481,000)
38January–September 2019 (1-9/2018)
Sales were roughly at the same level but operating
result weakened
Sales Comparable operating result
EUR million EUR million and % of sales
2000 300 15,0
13.0% 12.9%
1600 1,486 1,453 240 10.5% 10.0% 12,0
192 Operating
EUR million
EUR million
1200 475 489 180 8.0% 9,0
Q3 145 result,
64
% of sales:
800 519 477 120 43 Q3 6,0
Q2 Q3/19: 8.7%
59
41 Q2 Q2/19: 8.6%
400 60 3,0
492 487 Q1 69 Q1/19: 12.7%
62 Q1
0 0 0,0
2016 2017 2018 Q1–Q3 Q1–Q3 2016 2017 2018 Q1–Q3 Q1–Q3
2018 2019 2018 2019
39Year-to-date result was supported by higher paperboard
prices and FX, negative from pulp and production costs
Comparable operating result Comparable operating result
Q3 2019 vs. Q2 2019 Jan-Sep 2019 vs. Jan–Sep 2018
Q3 2019: EUR 43 million (EUR 41 million) Q1–Q3 2018: EUR 145 million (EUR 192 million)
Positive: Positive:
+ favourable development in paperboard business + higher prices in FBB and WKL
+ lower costs + FX
+ lower depreciation
Negative: Negative:
- weakened market pulp prices - weakened market pulp prices and volumes
- Metsä Fibre’s result share - Metsä Fibre’s result share
- more maintenance - higher production costs in paperboard and pulp
40Market pulp prices in China and Europe have
declined throughout the year
Pulp price (PIX) development in Europe and China
• The PIX price of NBSK has declined by
roughly 30% in Europe and by 40% in Long-fibre pulp, Europe Long-fibre pulp, China (net)
China from their highest levels in 2018 USD/tonne USD/tonne
• Net prices in China and Europe are 1 400 1 400
approaching each other 1 200 1 200
1 000 1 000
• Seasonally higher demand at year end
800 800
• Some producers have announced price
600 600
increases in China
400 400
• Producers’ inventory levels have 200 200
decreased but are are still high
0 0
2018
2013
2014
2015
2016
2017
2019
Source: Fastmarkets Foex
41 Note! The specifications of PIX China Net index were renewed in the beginning of 2017. Earlier data not comparable with newYear-to-date cash flow from operations EUR 111 million
(1–9/2018: EUR 121 million)
250
250
200
200
150 150
EUR million
EUR million
106
100 100
79
68
59 54 43 44
50 30 36 30 36 31 50
23 29 26
20 13
0 0
-3
-50 -50
Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19
Cash flow from operations, quarterly Free cash flow, quarterly
Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months
42 Free cash flow = cash flow from operations − investmentsNet debt at EUR 352 million, leverage 1.2x
On 30 September, Metsä Board signed a financing facility with sustainability targets consisting of
EUR 150 million term loan and EUR 200 million RCF to replace existing loan (EUR 50 million) and RCF (EUR 150 million)
Net debt, EUR million Net debt to comparable EBITDA (last 12 months)
600 3,0
Net debt / EBITDA target level:Debt and its maturity Metsä Board’s both credit ratings are investment grade
Rating agency Rating and Last update
• On 30 September, Metsä Board agreed on a new bank financing outlook
facility consisting of five-year term loan of EUR 150 million1) and S&P Global BBB- 02/2018
five-year RCF of EUR 200 million to replace the drawn loan of EUR stable Upgrade from BB+
50 million2) and undrawn RCF of EUR 150 million Moody‘s Investor Baa3 01/2019
Services stable Upgrade from Ba1
• Interest-bearing debt on 30 September was EUR 461 million
(30.9.2018: EUR 469 million)
1) drawn and booked after the review period
2) earlier drawn loan that would have expired on 2020
Long-term interest-bearing debt maturity profile as per 30 September 2019
250
200
EUR million
In addition, Metsä
150 Board has
100
unraised pension
loans of EUR 166
50 million
2)
0
2019 2020 2022–26 2027
Bonds Loans from financial institutions Pension loans Other loans
44Near-term outlook
• Paperboard delivery volumes in Q4 are
expected to decline from Q3 levels due
to seasonally slower December
• Stable price levels for FBB and WKL
• Pulp prices remain low globally
• Less planned maintenance shutdowns
• Stable production costs and FX impacts
in Q4 compared to Q3
• Metsä Board’s comparable operating
result for the fourth quarter of 2019 is
expected to remain roughly at the same
level as in the third quarter of 2019
45Sustainability
“Our comprehensive approach
to reducing our environmental
Sustainability is on impact means looking at all
everybody’s agenda aspects of our business, how
they intersect and how we can
integrate new solutions to
create meaningful and
sustained change.”
• Growing consumer awareness:
– Starbucks website
Origin and transparency of
materials, renewability, resource
efficiency and recylability
• Brand owners are committed to
reducing their carbon footprints: “We want low-carbon to become
the new normal, so we’re taking
Lighter packaging reduces CO2 action to reduce GHG emissions
emissions across the value chain throughout our value chain.”
– Unilever website
47Alternative to plastics:
Paperboard adds value to packaging
• Consumers regard paperboard as a more responsible choice than plastic packaging –
willingness to pay more for it
• Paperboard cartons preserved the cherry tomatoes at least as well as the plastic equivalent
• The climate effect of a recycled PET container was calculated at six times higher than the average
value for the paperboard cartons
A detailed consumer study with cherry tomatoes was carried out in Finland by Sense N Insight,
Luke (Natural Resources Institute Finland) and Metsä Board
48Fresh fibre paperboards offer solutions to major challenges Increased waste Replacing fossil- Reducing carbon Ensuring food generation due to based materials, footprint safety urbanisation i.e. plastics The solution: The solution: The solution: The solution: renewable energy, pure and safe Paperboard is renewable and efficient energy fresh fibres in food recyclable biodegradable and water usage in packaging – and widely wood fibre production recycled
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 waste
generated
Less
transport
weightWood is our main raw
material
• Metsä Board sources its wood mainly from
Finland and Sweden (65%)
• All wood used is 100% traceable and comes
from sustainably managed forest sources
ensuring the bio-diversity and recreational use
of forests
• 79% of wood sourced is certified (remaining
21% from controlled forest sources)
• Our target is that >90% of our used wood fibre
is certified by 2030
51Finland – the largest forest cover in Europe
The area of Finland
5% Cities, villages and roads
Annual growth of Finnish forests is 10%
100+
MILLION M3
over 100 million m 3 – more than ever
10%
Fields and agricultural use
Lakes and rivers
Forests grow more than they are used,
annual harvesting 72 million m 3 (2017)
Four seedlings are planted for each
harvested tree 75% Forest
Over 20% of the Finnish export comes
from forest-based products
52We have decreased our
process water use by 20%
since 2010
• Metsä Board uses only
surface water in its processes
• Water is been recirculated
in processes several times
• 99% of the water used is returned
back to the close-by waterways
after thorough purification
53Primary energy used in 2018
(total 12.0 TWh)
Our energy efficiency has improved
Fossil-based
by almost 12% during 2009–2018 18%
Renewable,
mainly
wood-based
Nuclear
55%
power
• Over 80% of primary energy we use is fossil free 27%
• After OL31) starts up, we will be nearly self-sufficient in
electricity in Finland
Electricity sourced in 2018
− Including the electricity used in Husum mill, (total 2.4 TWh)
self-sufficiency will be nearly 80% Outsourced
generation
• Metsä Board’s shareholding in PVO2) is 3.2% 3% Own
generation
− Fair value as per 31 December 2018 was EUR 266 million 3)
21%
Purchased
electricity
44%
Through
1) Olkiluoto Nuclear Power Plant PVO
shareholding
2) Pohjolan Voima Oyj is a non-listed public limited liability company. 32%
It supplies electricity and heat for its shareholders at cost price
3) Out of 44% share of purchased energy, 14% is from Metsä Fibre
54Metsä Board’s strategic 2030 sustainability objectives and targets
WE BRING WE WORK FOR A WE OFFER WE CREATE
THE FOREST TO YOU BETTER SUSTAINABLE CHOICES WELL-BEING
CLIMATE AND
Certified wood fibre ENVIRONMENT
• Share of certified fibre >90%
Fossil free mills Fossil free raw materials Responsible corporate culture
Increasing the amount of • Fossil CO2 emissions • Share of fossil free raw • Ethics barometer 100%
carbon stored in forests and 0 tCO2 (Scope 1) materials 100%
products Accident-free work
• Area of regeneration and Fossil-free purchased energy Sustainable supply chain environment
management of young stands • Fossil CO2 emissions, • Sustainable suppliers 100% • Accident frequency LTA1 0
+30% vs. 2018 0 tCO2 (Scope 2) • Traceability of raw
• Amount of carbon stored in materials 100%
products (t)
Resource efficient production
+30% vs. 2018
• Utilisation of side-streams
100%
Safeguarding biodiversity • Process water use per
• Increasing the amount of product ton (m 3/t)
decayed wood: high – 30% vs. 2018
biodiversity stumps in • Energy efficiency
improvement
90% of thinnings and
>10% vs. 2018
retention trees in all
regeneration logging sites
55External recognition and commitments
Metsä Board has been included on the CDP In 2018, Metsä Board received a Metsä Board scored the highest Metsä Board was awarded
Water A List every year since 2015 and on the rating of AAA (on a scale of recognition level “Gold” in “Prime” status in ISS ESG
CDP Climate A List since 2016. In addition, AAA-CCC) in the MSCI ESG EcoVadis’ CSR ranking in 2018, corporate responsibility rating in
Metsä Board has scored A- in the CDP Forest Ratings assessment. and is included in the top 1% of May 2018.
programme since 2015, and is included on the suppliers assessed across all
Link to MSCI Terms and Conditions
Supplier Engagement leader board in 2019 for categories.
its efforts to address climate change.
SUSTAINALYTICS SCIENCE BASED TARGETS
Metsä Board as a part of Metsä Group is Metsä Board has an overall Metsä Board’s ESG Metsä Board is committed to
committed to the UN Global Compact corporate ESG score of 86/100 and is performance was rated Science Based Targets
responsibility initiative and its principles in the considered a Leader in “Advanced” in Vigeo Eiris ESG initiative to reduce its GHG
areas of human rights, labour, environment and Sustainalytics’ assessment in assessment in July 2019. emissions in line with the goal of
anti-corruption. Metsä Board also supports the May 2018. the Paris Agreement.
UN’s Sustainable Development Goals, the SDGs.
56Research and Development
Customers want better brand experiences with
less environmental impacts
Unique opportunities for Enhanced and balanced
sustainability and yield gains visual properties that enable highly
through lightweighting and raw demanding printing and finishing
material efficiency techniques for premium looks
58The role of packaging is to promote the brand and
protect the product – in a cost-effective way
Metsä Board’s
Solid bleached board folding boxboard
(SBB)
PROMOTION
Brightness
Folding boxboard
(FBB)
Coated unbleached kraft
(CUK)
White lined chipboard
(WLC)
PROTECTION
Stiffness
59High-yield pulp makes the difference between folding
boxboard and other grades …
Three-layer structure of Folding Boxboard
Light weight
→ better yield and sustainability
High strength and bending stiffness
→ secure protection
High brightness and smoothness
→ excellent printability
Consistent quality
→ improved production efficiency
60… and leave more trees standing
SBS =
(100% chemical pulp)
5 m3 of wood per tonne of pulp
Metsä Board FBB
(up to 70% BCTMP, =
30% chemical pulp )
3.4 m3 of wood per tonne of pulpDeveloping new paperboard and
packaging solutions of the future
A unique bioeconomy ecosystem in Äänekoski,
Finland
• Metsä Board to establish a new Paperboard and Packaging
Excellence Centre, to be operational in 2020
– Combines packaging design and R&D excellence under the same roof
– Enables to organise packaging design workshops and innovation days
together with customers and partners
• We are testing and developing new types of paperboard in
collaboration with Metsä Spring, Metsä Group’s innovation
company
• Pro Nemus Visitor Center provides a new way to learn about
Metsä Group’s business operations, products and innovation
activities
62Our key product development focus areas
LIGHTWEIGHTING BARRIER BOARDS
• Improved BCTMP • Dispersion barriers
• Microfibrillated cellulose (MFC) • Bio-based raw materials
• Strength additives
63Lighter-weight paperboards: Better with Less
The weights equal to a print job of 30 000 sheets on a standard size printing press
Metsä Board
lightweight paperboard
Average FBB –
Folding boxboard
SBB –
Solid bleached board
WLC –
White lined chipboard
64Metsä Board enhances its leading
position in premium lightweight
paperboards
In April 2019, we announced of our new, improved FBB
portfolio, that answers to increasing demands for
sustainability, product safety and brand promotion
– Further opportunities for lightweighting
– Enhanced visual properties
– Industry-leading quality consistency
– Improved supply security and availability
Enabled by our improved high-yield BCTMP and full
R&D focus on paperboard
65New plastic-free barrier
board for even more
demanding end-uses
Metsä Board has developed a new
plastic-free eco-barrier paperboard for
food and food service purposes
Medium barrier for grease and moisture
Can be recycled in paper or paperboard
streams
END-USES: Food service, fresh, dry and frozen food and
other packaging end-uses that require barrier properties
66KEY ADVANTAGES OF METSÄ BOARD’S NEW
5 ECO-BARRIER PAPERBOARD
✓ Plastic-free
✓ Easily recyclable
✓ Protective with medium barrier for grease and moisture
✓ Safe for direct food contact – no fluorochemicals or
optical brighteners (OBA)
✓ Brightest OBA-free board on the market, with excellent
printability on both sidesThe new plastic-free eco-barrier is the next step
in Metsä Board’s barrier board development
HIGH PE barrier boards
WVTR < 15 g/m²/d
Moisture resistance
MEDIUM MetsäBoard
15 ≤ WVTR < 100 Prime FBB EB
MODERATE
100 ≤ WVTR < 250
MetsäBoard
NONE Paperboards
WVTR > 250 g/m²/d without barrier Prime FBB EB1
NONE MODERATE MEDIUM HIGH
< 10 min 10 min ≤ OGR < 6 h 6 h ≤ OGR < 72 h OGR > 72 h
Oil and grease resistance (flat sample)
68Getting familiar with terminology:
Barrier boards types
Examples of materials used in coating
BIODEGRADABLE Note!
Biobased material
PVA (polyvinyl alcohol) =
PLA (polylactide): often
NON-BIOBASED
PBS (polybutylene Renewable material
based on corn starch
succinate)
BIOBASED
≠
Compostable
≈
PE: made from fossil raw
Green PE: made from
materials, used in Biodegradable
biomaterials
extrusion coating
NON-BIODEGRADABLE
69Owners, management and contact information
Market cap and ownership distribution
Metsä Board shares are listed on Nasdaq Helsinki
Market cap and foreign owners Ownership distribution
30 September 2019 30 September 2019
EUR million % Foreign
3 000 25 owners
13%
2 500 20
2 000 Metsäliitto
15
1 500 Cooperative
Domestic
45%
10 private
1 000 investors
5 21%
500
0 0
12/2014 12/2015 12/2016 12/2017 12/2018 9/2019
Market cap, EUR million Domestic
institutional
Share of foreign owners, % investors
21%
71Metsä Board Corporate Management Team
Mika Joukio Jussi Noponen Sari Pajari
CEO CFO SVP, Marketing and Sales
Chairman of CMT since 2014 Member of CMT since 2016 Member of CMT since 2011
MG employee since 1990 MG employee since 2000 MG employee since 2007
Share ownership: 297,700 Share ownership: 73,000 Share ownership: 66,075
Harri Pihlajaniemi
Ari Kiviranta SVP, Production Camilla Wikström
SVP, Development SVP, HR
Member of CMT since 2017
Member of CMT since 2014 MG employee in 2001-2004 Member of CMT since 2019
MG employee since 1993 and since 2017 MG employee since 2001
Share ownership: 50,000 Share ownership: no ownership Share ownership: 17,807
Share ownerships are B-shares.
72 MG = Metsä GroupContact information
Katri Sundström
Vice President, Investor relations
Tel +358 10 462 0101
katri.sundstrom@metsagroup.com
Metsä Board Corporation
P.O. Box 20
02020 Metsä, Finland
www.metsaboard.com
73Disclaimer
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
subscribe for Metsä Board’s securities anywhere in the world or an inducement to enter into any investment activity
relating to the same. No part of this presentation should form the basis of, or be relied on in connection with, any contract
or commitment or decision to invest in Metsä Board securities whatsoever. Potential investors are instructed to acquaint
themselves with Metsä Board’s annual accounts, interim reports and stock exchange releases as well as other information
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.
74You can also read
