Interim report Metsä Group's operating result for January–March 2015 excluding non-recurring items was EUR 129 million

Metsä Group Interim Report 1–3/2015 Stock Exchange Release 7 May 2015 at 12 noon EET
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Metsä Group Interim Report 1–3/2015 Stock Exchange Release 7 May 2015 at 12 noon EET

Result for January–March

– Sales were EUR 1,255 million (1–3/2014: EUR 1,254 million).
– Operating result excluding non-recurring items was EUR 129 million (105). Operating result including non-recurring items was EUR 118 million (70).
Result before taxes excluding non-recurring items was EUR 117 million (80). Result before taxes including non-recurring items was EUR 106 million (37).
– Return on capital employed excluding non-recurring items was 13.5 per cent (12.3).
Cash flow from operations was EUR 67 million (-32).

Events for first quarter
Profitability for pulp industry improved considerably as a result of the higher euro-denominated prices of pulp.
The demand for paperboard continued to be at a good level, and prices were stable.
Metsä Fibre signed letters of intent with Valmet Corporation and Andritz Oy on the main equipment deliveries for the Äänekoski bioproduct mill, and with Sweco Industry Oy and Sweco Rakennetekniikka Oy on the planning of the project implementation.
Metsä Board completed a EUR 100 million share issue in March. The funds will be used to finance the final steps of the company's transformation.
Standard & Poor’s Ratings Services raised Metsä Board's credit rating by two notches, from B+ to BB. The outlook of the rating is stable.
The sale of Metsä Wood's UK-based pole business Burt Boulton and Haywood Ltd. was finalised in February.
The Supervisory Board of Metsäliitto Cooperative has decided to propose to the Representative Council, convening today, that interest of 5.5 per cent (5.5 + 1.0 per cent for 2013) be paid on the statutory capital for 2014. Interest of 5.0 per cent (5.0) is proposed for additional members’ capital A, and interest of 4.5 per cent (4.5) for additional members’ capital B.

Events after the period
In April, the Ministry for Employment and the Economy granted EUR 32.1 million as an investment subsidy for renewable energy for the bioproduct mill.
In April, Metsä Group announced its decision to build a bioproduct mill in Äänekoski.
Petri Helsky started on 16 April as Metsä Tissue’s CEO.
Metsä Group announced it would sell 30.13 per cent of Finsilva Oyj's shares to a fund managed by Dasos Capital Oy. After the transaction, Metsä Group's holding in Finsilva will be 19.8 per cent.
On 29 April, Metsä Board announced it would sell Metsä Board Zanders GmbH to mutares AG’s fully owned holding company and its partner company. The transaction is contingent on the approval of the German competition authorities and is expected to take place by the end of May 2015.

“The development of Metsä Group's business operations was steady in the first quarter. The operating result excluding non-recurring items improved and was at the highest level in four years. Underlying the positive performance development is our long-term work to improve efficiency and productivity. In the past quarter, the result was also supported by exchange rates.

Our investments to strengthen our core businesses are progressing well. In April, we announced that we will build a bioproduct mill in Äänekoski, to be completed in the third quarter of 2017. Metsä Board's share issue, completed in March, enables us to further develop the paperboard business at the Husum mill in Sweden.

The economic situation in Finland and Europe continues to be challenging, which creates uncertainty and weakens growth opportunities for companies. The recently elected Finnish Parliament will play a key role in recovering economic growth and improving competitiveness in our country. Hopefully, the new government will have the courage to implement policies with the long-term view in mind and make constructive decisions that support the Finnish business environment and the export industries.”

Kari Jordan, President & CEO

Metsä Group

  2015 2014 2014
Income statement, EUR million 1–3 1–3 1–12
Sales 1 255.1 1 254.3 4 970.3
Other operating income 15.4 36.1 170.3
Operating expenses -1 083.2 -1 152.5 -4 447.5
Depreciation and impairment losses -69.4 -68.2 -276.2
Operating result 117.8 69.7 416.9
Share of results from associated companies and
joint ventures



Exchange gains and losses 3.5 -2.1 2.7
Other net financial items -21.3 -37.8 -106.1
Result before income tax 106.1 37.2 329.9
Income tax -17.5 -5.4 -69.7
Result for the period 88.6 31.8 260.3


  2015 2014 2014
Profitability 1–3 1–3 1–12
Operating result, EUR million 117.8 69.7 416.9
- ” -, excluding non-recurring items 128.6 105.1 418.1
- ” -, % of sales 10.2 8.4 8.4
Return on capital employed, % 12.5 8.0 11.1
- ” -, excluding non-recurring items 13.5 12.3 11.4
Return on equity, % 16.7 6.5 13.0
- ” -, excluding non-recurring items 18.8 15.4 13.4


  2015 2014 2014
Financial position 31.3. 31.3. 31.12.
Equity ratio, % 39.0 37.2 37.9
Net gearing ratio, % 41 83 46
Interest-bearing net liabilities, EUR million 887 1 614 938


Sales and Operating result
1–3/2015, EUR million
Wood Supply and Forest Services Wood Products Industry
Paperboard Industry Tissue and Cooking Papers
Sales 411.8 209.4 330.4 525.7 253.7
Other operating income 2.5 1.0 7.2 8.0 1.1
Operating expenses -404.7 -195.7 -237.4 -464.5 -239.8
Depreciation and impairment
-0.9 -6.8 -21.4 -26.1 -9.9
Operating result 8.7 7.9 78.7 43.1 5.1
Non-recurring items - - - 0.1 10.7
Operating result
excluding non-recurring items
8.7 7.9 78.7 43.2 15.8
- " -, % of sales 2.1 3.8 23.8 8.2 6.2


Near-term outlook

In Finland, Metsä Forest actively purchases renewal stands and thinning stands for harvesting in the summer. In addition, wood from delivery contracts will be purchased from active forest owners. Sales of forest management services are forecasted to continue to grow strongly.

Sales in the wood products industry are expected to grow in the second quarter, compared to both the previous quarter and the corresponding period in the previous year. The construction outlook in the European main markets continues to be challenging. Competition is expected to continue to be fierce in the sawn timber market, which suffers from oversupply.

The global demand for softwood pulp is expected to continue to grow moderately, and softwood pulp supply and demand are expected to be in balance in the near future as well. The utilisation rates of the pulp mills are expected to remain at a good level in the second quarter.

The paperboard delivery volume is forecasted to increase slightly in the second quarter from the previous quarter. No material changes in the price of folding boxboard are currently in sight. Metsä Board announced an increase of EUR 40 per tonne in the price of white fresh forest fibre linerboard in Europe as of 11 May 2015.

The maintenance and investment shutdown at the Husum mill is forecasted to have a slightly negative impact on the result in the second quarter. A more extensive shutdown related to the investment programme at Husum is scheduled for the last quarter of the year.

In the tissue paper market, demand is expected to continue to be stable in all market areas and to grow in Central Eastern Europe, in particular.

Metsä Group's operating result excluding non-recurring items in the second quarter of 2015 is expected to be approximately on the same level compared to the first quarter of 2015.

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–March 2015 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

Group Communications

For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 (0)10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 (0)10 465 4541

Metsä Group is a responsible forest industry group whose products’ main raw material is renewable and sustainably grown northern wood. Metsä Group focuses on tissue and cooking papers, fresh forest fibre 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 billion in 2014, and it employs approximately 10,500 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 122,000 Finnish forest owners.


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