Metsä Group’s comparable operating result in January–March 2023 was EUR 276 million

Metsä Group Press release 27 April 2023
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Metsä Group Interim report January March 2023

January–March 2023 (1–3/2022)

  • Sales were EUR 1.634 million (1.594).
  • Operating result was EUR 276 million (341). Comparable operating result was EUR 276 million (244).
  • Result before taxes was EUR 271 million (330). Comparable result before taxes was EUR 272 million (232).
  • Comparable return on capital employed was 15.3% (15.8).
  • Net cash flow from operations was EUR 38 million (135).

Events during the first quarter of 2023

  • The average sales prices for Metsä Group’s long-fibre pulp decreased compared to the previous quarter.
  • Metsä Board adjusted its production to match demand. The demand for paperboard declined due to the decreasing demand for consumer products and the adjustments made to inventories in the value chain.
  • The average prices for Metsä Board’s paperboards increased.
  • In February, Metsä Tissue decided to invest in its Mariestad tissue paper mill in Sweden. The value of the investment is approximately EUR 370 million.
  • Metsä Group adopted regenerative forestry principles, the goal of which is to ensure that Finnish forest assets are transferred in a more vibrant, diverse and climate-resilient condition from one generation and owner to the next.
  • Metsä Group and Fortum initiated cooperation aimed at utilising wood-based carbon dioxide generated in the forest industry as a raw material for the chemical industry.
  • Metsä Group revised its 2030 sustainability targets.
  • Metsä Spring invested in Fiberwood, a start-up that develops new kinds of thermal insulation materials from the forest industry’s side streams.

Result guidance for April–June 2023

In April–June 2023, Metsä Group’s comparable operating result is expected to be weaker than in January–March 2023.

Proposal of the Board of Directors on the use of the surplus on the balance sheet

Metsäliitto Cooperative’s Board of Directors has decided to propose to the Representative Council convening on 27 April 2023 that for 2022, interest of 7.0% (6.0 for 2021) be paid on the participation share capital invested by members, and that interest of 6.5% be paid on Metsä1 additional shares, 4.0% (5.0) on additional capital A, and 1.0% (1.0) on additional capital B. The Board of Directors also proposes that a surplus reimbursement of EUR 0.30 per cubic metre of industrial roundwood received from a member over the past four concluded financial periods be distributed. The surplus reimbursement will be paid primarily as Metsä1 additional shares, but in money for the part corresponding to the tax-at-source to be carried in terms of each member. If the right to the shares has been transferred to another person in accordance with the statutes of the cooperative, the interest is paid to the person who is registered as the owner on the reconciliation date, 31 March 2023. The proposed payment date is 12 May 2023. If the member entitled to the surplus reimbursement resigns from the cooperative before the date of payment, this share of the surplus reimbursement will not be distributed. In total, the proposed profit distribution would be approximately EUR 101 million (80), of which the surplus reimbursement based on wood trade would be approximately 15%.

President and CEO Ilkka Hämälä:

As anticipated, Metsä Group’s result in the first quarter of 2023 was weaker than that of the previous quarter, but it can still be considered excellent. The quarterly results of Metsä Wood and Metsä Tissue were record high. Metsä Board’s paperboard business performed as expected. The faster than expected market slowdown was reflected in Metsä Fibre and Metsä Board’s pulp business, leading to Metsä Board’s result being weaker than anticipated. Wood trade was active in the early part of the year, and it was supported by Metsä Forest’s bonus campaigns for the cooperative’s owner-members.

Although the Group achieved a high level in its result, Europe’s weak economic outlook and high inflation have a notable impact in all our business areas. In the mechanical forest industry, demand reflected the decrease in new construction industry projects. The increasing consumer prices affect the retail activity and further the demand for tissue paper products and packaging materials. Production curtailments in the industry converting pulp into end products, in both Europe and Asia, led to an oversupply of pulp in the early part of the year. Despite the modest mood in the market, the outlook for long-term strong demand in our product segments remains the same, and our competitiveness is good in our main market areas.

Forestry and the forest industry must continue to develop, regenerate and respond to social trends. In February, we published our regenerative forestry targets and strategy. Avoiding damage to nature is no longer an adequate goal for our operations in commercial forests. Instead, we must plan and implement forestry measures so that we see verifiable improvements in the state of habitats. To achieve this goal, we need data about the forest ecosystems and the ability to carry out practical reforms in forest management measures so that we can achieve the desired impact on the environment. As most of Finland’s forest area will continue to be under the scope of forestry, regardless of expanding protection requirements, the development of forestry operations is extremely important for preventing biodiversity loss.

Metsä Group’s various development projects are progressing as planned. At the Kemi bioproduct mill, test runs have gradually been initiated, and installation work continues alongside them. The bioproduct mill and the integrated expansion of Metsä Board’s Kemi linerboard mill will be deployed in the third quarter. The 200,000-tonne increase in the capacity of the folding boxboard machine at the Husum paperboard mill is scheduled to start up in the last quarter. Metsä Tissue’s investment in the Mariestad tissue paper mill has been launched, and the new paper machine and related converting lines will start up in early 2025. Plans for Metsä Wood’s Kerto LVL mill in Äänekoski are ready for the investment decision, and the environmental permit for the mill was granted in April.

The extensive renewal of the Group’s IT systems is progressing. To date, a new financial system and an ERP solution for wood supply have been introduced in the project, which will run until 2026.

Metsä Group’s global personnel comprises more than 9,000 professionals, approximately 60% of whom work in Finland. In addition, our partners and supply chain employ many times more people. We are a growing and developing company that manufacture products for people’s daily lives from a renewable raw material – wood. Our operations have broad impacts on society, which we must identify and communicate to our stakeholders.

The new parliamentary term will be exceptionally important for Finland’s success. This is a time of transition and change in many ways, including the climate crisis, global political instability, the war in Europe, and the imbalance in our national economy. To ensure that as a society we preserve the functioning and wellbeing typical of the Nordic countries, policymakers must pay great attention to securing operating conditions of businesses. In return, healthy businesses must contribute to achieving the goals set by society.

Key figures
2023 2022 2022
1–3 1–3 1–12
Sales, EUR million 1,634.4 1,593.8 6,980.2
EBITDA, EUR million 354.8 419.5 1,636.4
  Comparable, EUR million 354.8 322.4 1,564.4
  % of sales 21.7 20.2 22.4
Operating result, EUR million 275.7 341.3 1,301.9
  Comparable, EUR million 275.7 244.2 1,276.4
  % of sales 16.9 15.3 18.3
Result before income tax, EUR million 270.5 329.6 1,269.8
  Comparable, EUR million 271.9 232.5 1,240.3
Result for the period, EUR million 213.1 259.1 998.7
Return on capital employed, % 15.3 22.1 19.9
  Comparable, % 15.3 15.8 19.5
Return on equity, % 14.9 21.1 19.0
  Comparable, % 15.0 15.2 18.9
Equity ratio, % 58.2 59.9 60.6
Net gearing ratio, % 7.1 -2.0 3.1
Interest-bearing net liabilities, EUR million 408.8 -99.2 177.0
Total investments, EUR million 250.0 332.0 1,500.4
Net cash flow from operations, EUR million 37.6 135.5 1,226.8
Personnel at the end of the period 9,513 9,409 9,155
Sales and Operating result
1–3/2023, EUR million Wood Supply and Forest services Wood Products Industry Pulp and Sawn timber industry Paperboard  Industry Tissue and Greaseproof papers
Sales 601.3 161.8 668.6 542.1 343.1
  Other operating income 1.3 2.4 3.4 24.9 2.6
  Operating expenses -594.4 -134.4 -503.6 -453.5 -288.7
  Depreciation and impairment losses -1.4 -5.2 -34.1 -25.0 -10.2
Operating result 6.8 24.6 134.3 88.4 46.8
  Items affecting comparability 0.0 0.0 0.0 0.3 0.0
Comparable operating result 6.8 24.6 134.3 88.7 46.8
  % of sales 1.1 15.2 20.1 16.4 13.6

Near-term outlook

The demand for wood focuses on thinning sites to be harvested when the ground is unfrozen and on roundwood from delivery sales. In energy wood, the demand focuses on crown wood and energy wood trunks. Demand for forest management services is expected to remain good.

The general economic downturn and the slowdown in construction result in weaker demand for engineered wood products and the improved availability of alternative materials in Europe. In the US and Australian markets, the demand for construction remains better than in Europe for now. The market situation for birch plywood continues to be strong. In industrial customer segments, demand still exceeds supply by far due to the absence of Russian birch plywood imports on the European market. The demand for spruce plywood remains notably weaker than last year.

In Metsä Wood UK, the demand for the upgrade business is expected to be considerably weaker than the long-term average in the next few months.

The development of the European and Chinese paper and paperboard markets in the coming months creates uncertainty around the demand for Metsä Fibre’s softwood market pulp. The global supply of softwood market pulp is curtailed by the limited availability of wood raw material in North America.

In the second quarter, Metsä Fibre will limit its pulp production in response to lower market demand.

A slight seasonal improvement is expected in sawn timber demand in Metsä Fibre’s main markets. The impact of the Russia’s attack on Ukraine on the global economy creates uncertainty concerning the long-term market situation.

The annual maintenance shutdowns at Metsä Fibre’s Äänekoski and Rauma pulp mills will take place during the second quarter.

The decline in global economic growth and consumers’ purchasing power is creating uncertainty in Metsä Board’s market environment. The near-term prospects for paperboard sales remain uncertain. Metsä Board’s paperboard delivery volumes in April–June 2023 are expected to be at the same level as in January–March 2023 (380,000 tonnes). The average prices of paperboards are expected to remain stable and overall costs to remain fairly stable. Several annual maintenance shutdowns will take place at the mills in Finland in the second quarter.

The operating environment for Metsä Tissue’s tissue paper business continues to be unstable, as underlying inflation remains high. If required, the company will opt for commercial shutdowns to secure adequate product profitability when demand begins to normalise.


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

Metsä Group

Metsä Group is leading the way in advancing the bioeconomy. We invest in growth, bioproduct development and a fossil free future. The raw material for our products is renewable wood from sustainably managed northern forests. We focus on the growth sectors of the forest industry: wood supply and forest services, wood products, pulp, fresh fibre paperboards, as well as tissue and greaseproof papers.

Metsä Group’s annual sales amount to approximately EUR 7 billion, and we have around 9,500 employees in around 30 countries. Our international Group has its roots in the Finnish forests: our parent company is Metsäliitto Cooperative which is owned by over 90,000 forest owners. 

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