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Metsä BoardInvestor presentation 1-6/2016
1-6/20162
Contents
Investment highlights 3
Strategic cornerstones and financial targets 12
Operating environment and market position 22
Q2/2016 results and outlook 33
Balance sheet and funding 46
Investments 54
Production, capacities and sourcing 60
Sustainability 68
Owners 72
Appendix 75
Contact information 81
Investment highlights
• Market leader in folding boxboard in Europe and
global market leader in coated white top kraftliner
• Strong fibre know-how and self-sufficiency in pulp
• Sales in 2015 EUR 2.0 billion and operating result*
EUR 180 million
• 2,600 employees in 23 countries
• Global sales to over 100 countries and eight
production units in Finland and Sweden
1-6/20164
Metsä Board in briefSales split 2015
Paperboard*
Paper
Sales by region 2015
EMEA
Americas
APAC
*) Includes market pulp
*) excluding non-recurring items
5
High-performance packaging materialsFolding boxboards, white-top kraftliners and fully bleached linerboards
Consumer goods Retail-ready Food service
1-6/2016
• Lightweightness– Even 30% lighter than competing grades
• Excellent printability and runnability
• Purity and safety
• Bioenergy– More than 60% of the energy Metsä Board uses comes from
renewable resources
• Wood from known origin– Fibres used in production are sourced from sustainably
managed northern forests
6
Benefits of Metsä Board paperboards
Metsä Board’s folding boxboards are
produced from BCTMP or mechanical
pulp, which is used in the middle layer (3)
to make the board bulky and light. The
two outer fibre layers (2 and 4) are made
of chemical pulp, which maximizes the
strength of the board.
Folding boxboard is the stiffest yet lightest
paperboard grade
1-6/2016
1-6/20167
EBITDA development 2011–2015
excluding non-recurring items
180 185208
236
283
7,2 %
8,8 %
10,3 %
11,8 %
14,1 %
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
50
100
150
200
250
300
2011 2012 2013 2014 2015
EU
R m
illio
n
Strong profitability development
ROCE-%, excl. non-recurring items
1-6/20168
EBIT-%, excl. non-recurring items
3,4
4,8
6,4
9,1
11,3
0
2
4
6
8
10
12
2011 2012 2013 2014 2015
%
2,4
3,6
5,2
6,8
9,0
0
2
4
6
8
10
2011 2012 2013 2014 2015
%
Target over 12% from 2017
1-6/20169
Strong continuing improvement in productivity
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
1 000
1 300
1 600
1 900
2 200
2 500
2 800
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
Production capacity/employee Number of employees
Production capacity (tonnes) / employee at current millsNo. of
employees
Production
capacity/
employee
• Limited availability of high quality fibre – Sustainably harvested high quality fresh forest fibres are a must
– Own state of art chemical, mechanical and BCTMP pulping capacity
vital competitive factors
• Leading global consumer goods companies and corrugated box
manufacturers not willing to change paperboard suppliers
easily in the high-quality segments– High speed packaging lines very quality sensitive
– Requirements for uniform brand look and feel globally
– Sustainability and product safety aspects
• Skilled people and organizations a crucial success factor– High-quality paperboard companies have traditions from several
generations
1-6/201610
High threshold for new producers to
enter high-quality board segment
1-6/201611
Metsä Board’s paperboard business profitability
(EBIT-%) with its’ peers
Strategic cornerstones and financial targets
Values
• Responsible profitability
• Reliability
• Cooperation
• Renewal
Strategic cornerstones
• Focus
• Growth
• Profitability
1-6/201613
Metsä Board’s vision is to be the preferred supplier
of premium paperboards creating value for
customers globally
Focus on premium fresh forest fibre paperboards for
consumer and retail packaging
This means to us:
• We focus on serving customers whose quality
expectations require our high quality, light and strong
packaging materials
• Our paperboards are produced from fresh forest fibres
• Our products are used for packages at the store and
from the store to the consumer
1-6/201614
Focus
Profitability is based on superior cost efficiency and healthy sales prices driven by high-quality pulps and unique technical know-how
This means to us:
• Our superior cost efficiency will be achieved by further developing productivity and efficiency of our mills, operations and people
• We will continue to drive down purchasing costs in all areas
• Our self-sufficiency in high-quality pulps together with unique paperboard making expertise helps us to improve our market position further and maintain healthy price levels
1-6/201615
Profitability
Grow profitably together with brand owner, converter and merchant customers globally in businesses that benefit from our safe and sustainable paperboards
This means to us:
• We grow in end-uses where our product is best suited to protecting our customers’ products and promoting their brands and businesses
• Our customer base is global, including brand owner, private label, converter and merchant customers
• By selecting businesses that benefit from our paperboards we can generate value for our customers and grow profitably with them
1-6/201616
Growth
Financial targets
Minimum ROCE 12%* from 2017
1-6/201617
Maximum net gearing 70%
3,4
4,8
6,4
9,1
11,3
2011 2012 2013 2014 2015
106
72 70
51
32
2011 2012 2013 2014 2015
• Return on capital employed (ROCE) a minimum of 12% from 2017 onwards• Net gearing not to exceed 70%
• Metsä Board’s dividend payout target is at least 1/3 of EPS
• Average pay-out ratio during 2012–2015 has been 40%
1-6/201618
Dividend
0,06
0,09
0,12
0,17
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0,18
0,2
2012 2013 2014 2015
1-6/201619
Targeted average annual growth rate exceeds
clearly the market growth rate 3-5% p.a.
0
250
500
750
1 000
1 250
1 500
1 750
2 000
2011 2012 2013 2014 2015 2018 target
Fresh forest fibre linerboard Folding boxboard
1,000 tonnes
1-6/201620
Most important growth area is Americas
0
50
100
150
200
250
300
2011 2012 2013 2014 2015 2018 target
Folding boxboard Fresh forest fibre linerboard
300
250
1,0
00 tonnes
Actual and targeted deliveries to Americas
• Grow the paperboard businesses profitably globally
• Ensure successful sales of new capacity
• Secure good price levels
• Keep best in class product quality and improve supply
chain
• Develop new products for existing and new end uses
• Continue productivity improvements and cost savings
1-6/201621
Main priorities and actions to
achieve financial targets
Operating environment and market position
Demand is based on global trends
Globalisation Technology Sustainability Consumption
• Increasing role of retail
and harmonisation of
global brands
• Growing importance of
logistics
• Consolidation of carton
converters
• New innovations
utilising wood fibre and
other biomaterials
• Continuous
development of
production
technologies
• Digitisation and
automatisation change
business dynamics
• Greater significance of
resource efficiency
drives circular
economy and life-cycle
thinking
• Increasing regulation
brings additional
obligations
• Social responsibility
through value chain
• Growing consumption
and consumers’
increasing quality
needs globally
• Stronger demand for
sustainable packaging
• Digital services change
purchasing behavior
The global fresh forest fibre paperboard packaging
market is about USD 110 billion
The total packaging market is USD 800 billion
1-6/201624
Estimated average annual growth rate of fresh forest fibrepaperboard is 3–4%
Fresh forest fibre paperboard
Other wood fibre based materials
Non-fibre based materials0
20
40
60
80
100
120
140
2013 2014 2015 2018E
USD bn
Source: Metsä Board estimates
1-6/201625
Global cartonboard market is about 36 Mt/a*The share of folding boxboard is 9 Mt or 25% of the total market
Source: Metsä Board estimates
*) Excluding liquid packaging board, cup & plate stock, liner
and uncoated recycled board.
APAC20 Mt/a
EMEA8 Mt/a
North
America6 Mt/a
Lat. Am.2 Mt/a
Folding boxboard
Other fresh forest fibre grades
Recycled grades
Avg. growth rate for
premium cartonboards is
3–4%/a
1-6/201626
Global food service board market is 3.5 Mt/a*
Source: Metsä Board estimates*) Base board only, excl. other laminate materials
such as aluminium and PE.
Cups
Plates
Cartons
Avg. growth rate for food
service board is
3–5%/a
APAC1.0 Mt/a
EMEA0.9 Mt/a
Americas1.6 Mt/a
500
600
700
800
900
1000
1100
2009 2010 2011 2012 2013 2014 2015 2016
Taivekartonki Valkopintainen kraftlaineri
Price development in folding boxboard and white-top
kraftliner in Europe 2009 – Q2/2016
Sources: Pöyry Management Consulting ja FOEX Indexes Ltd
EUR/ ton
Folding boxboard White-top kraftliner
1-6/201627
1-6/2016
Pulp price development (PIX)
2010 – Q2/2016
350
400
450
500
550
600
650
700
750
800
850
900
950
1000
1050
'10 '11 '12 '13 '14 '15 '16
350
400
450
500
550
600
650
700
750
800
850
900
950
1000
1050
Source: Foex Indexes Ltd
Softwood, USD
Softwood, EUR
Hardwood, EUR
Hardwood, USD
USDEUR
28
Metsä Board has a strong position in Europe
Largest Folding Boxboard Producers in EuropeTotal capacity: 3.9M tons
1-6/201629
Largest White Fresh Fibre Linerboard Producers in EuropeTotal capacity: 2.2M tons
Sources: Company information,
Pöyry Management Consulting Oy
6%
9%
10%
19%
35%
0 300 600 900 1200 1500
International Paper
Mayr-Melnhof
Kotkamills
Stora Enso
Metsä Board
7%
10%
13%
22%
32%
0 200 400 600 800
SCA
BillerudKorsnäs
Mondi
Smurfit Kappa
Metsä Board
• Continuous steady growth above the market
• The biggest growth drivers are
– strong and long-term customer relationships
– innovative high-performance product portfolio to replace
other packaging materials
– best-in class customer service concept
• In Europe, paperboard sales volume grew 12% in 2015
compared to 2014
1-6/201630
Metsä Board is the market
leader in Europe
Metsä Board uses only fresh
forest fibres from
sustainably managed
northern forests
• Americas is Metsä Board’s main growth market
• The biggest growth drivers are
– Limited local supply in high-quality paperboards
– Due to strong consolidation, converters without own
paperboard production are looking for alternatives
• In folding cartons their share is 40–50%
– Growing environmental awareness
• In Americas, paperboard sales volume grew 16% in
2015 compared to 2014
1-6/201631
Metsä Board has a significant
foothold in North America
Paperboard offers a
sustainable option
for plastics such as
styrofoam in food service
applications.
• Metsä Board is the paperboard quality benchmark in
Asia
• Responsible consumer goods companies promote
good packaging
– Sustainability
– Traceable raw materials
– Product safety
• Due to the local overcapacity in Asia, the timing is not
good for aggressive growth
1-6/201632
Focus on the high-quality
segment in APAC
Global consumer goods
companies not willing
to change paperboard
suppliers easily in the
high-quality segments
Q2/2016 results and outlook
• Stable market situation
• Growing paperboard production volumes
and deliveries
• Profitability on the same level as in Q1
• Negative cash flow from operations
due to changes in working capital
• Strong balance sheet
– Extension of existing syndicated credit facility
1-6/201634
Performance in Q2/2016
1-6/201635
Key financials
Q2/16 Q1/16Change
Q2/16
vs. Q1/16H1/16 H1/15
Change
H1/16
vs. H1/15
Sales EUR million 423 436 ↓ 859 1,047 ↓
EBITDA, excl. NRIs EUR million 61 58 ↑ 119 143 ↓
% of sales % 14 13 ↑ 14 14 ↑
Operating result, excl. NRIs EUR million 36 35 ↑ 71 90 ↓
% of sales % 8 8 ↑ 8 9 ↓
Result before taxes, excl. NRIs EUR million 27 30 ↓ 57 72 ↓
Earnings per share EUR 0.07 0.07 0.14 0.19 ↓
ROCE, excl. NRIs % 9 8 ↑ 8 12 ↓
Gross investments EUR million 48 54 ↓ 103 72 ↑
Cash flow from operations EUR million -22 -22 ↓ -45 88 ↓
Sales decreased slightly due to lower market pulp
deliveries, EBIT remained stable
Sales, EUR million
1-6/201636
EBIT excl. NRI’s, EUR million and % of sales
494 514 499 526 522 498 462 436 4230
100
200
300
400
500
600
Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
28 35 37 43 47 55 35 35 360
10
20
30
40
50
Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
________
H1/2015:
1,048 M€
________
H1/2016:
859 M€
________
H1/2015:
90 M€
________
H1/2016:
71 M€
→-3%
→+1%
Paperboard segment
• Lower average price in FBB due to
Husum’s start-up grades
• Leakage in the recovery boiler in Husum
pulp mill
• More planned maintenance shutdowns
• Negative impact from FX rates
Other operations
• Positive difference from hedge accounting
and other items
1-6/201637
Q2/2016 EBIT still impacted by ramp-up of new
folding boxboard machine
0
10
20
30
40
Q1/2016 Paperboard Non-coreoperations
Otheroperations
Q2/2016
EBIT bridge by segment Q1/16 vs. Q2/16excl. non-recurring items
EU
R m
illio
n
35 36
-6 -1
+8
1-6/201638
Growing paperboard deliveriesCAGR% in 2011–2015 has been 9%
191 197 210 203 204 213 224 224 227250
112 110120
111 130141 137 131 142
148
0
60
120
180
240
300
360
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Folding boxboard Fresh forest fibre linerboard
1,0
00
to
nn
es
Note! Figures exclude wallpaper deliveries
Paperboard deliveries
in Q2/2016 grew by:
+8% vs. Q1/2016
+12% vs. Q2/2015
Profitability development
ROCE-%, excl. non-recurring items
1-6/201639
EBIT-%, excl. non-recurring items
6,4
9,1
11,3 11,6
8,3 8,5
0
2
4
6
8
10
12
2013 2014 2015 Q2/15 Q1/16 Q2/16
5,2
6,8
9,0 9,0
8,08,5
0
2
4
6
8
10
12
2013 2014 2015 Q2/15 Q1/16 Q2/16
Target over 12% from 2017
60 60 6551
42 36
15% 15% 16%13%
11%
9%
-2%
1%
4%
7%
10%
13%
16%
0
20
40
60
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
0
100
200
300
400
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
• Operating result excl. NRI in Q2 was
EUR 36 million (Q1/16: 42 M€)
– Low prices in FBB start-up grades,
bottlenecks and stoppages in Husum,
more planned maintenance shutdowns,
negative impact from FX
• Operating result excl. NRI in H1 was EUR
78 million (H1/15: 120 M€)
– Husum ramp-up, low prices in FBB start-up
grades, variations in pulp price, re-
allocated fixed costs from non-core
segment and increased depreciation
1-6/201640
Paperboard segment
Operating result, EUR millionexcl. non-recurring items
Sales, EUR million
Operating result
Operating result,
EBIT-%
0
30
60
90
120
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
• Paper deliveries in Q2 decreased to
11 000 tonnes
• Production of uncoated paper reels
ended in July
• Remaining stocks will be sold during
H2/2016
• From Q3 onwards the reporting of
non-core operations segment will be
discontinued
1-6/201641
Non-core operations segment
-3,2-3,4
-1,3
-8,4
0,2
-1
-2% -3%-2%
1%
-7%
-18%-16%-14%-12%-10%-8%-6%-4%-2%0%2%4%
-10
-8
-6
-4
-2
0
2
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Sales, EUR million
Operating result, EUR millionexcl. non-recurring items
Operating result, M€
Operating result, M€
EBIT-%
-17%
• Other operations include costs which
are not allocated to units, e.g. head
office costs and hedge accounting
• In Q2/2016 hedge accounting and
other items had a positive impact on
segments’ result
1-6/201642
Other operations
-9 -9 -8 -7
1
-15
-10
-5
0
5
Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Operating result, EUR million excl. non-recurring items
1-6/201643
Growing working capital and investments had still
negative impact on cash flows
92 5174 33 56 93 66
-22 -22
78 4656 9 8 45 8
-76
-50
114
157
198
250
214
256 247
193
115
57
110
155 188
119118
70
-15
-73-100
-50
0
50
100
150
200
250
300
Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Cash flow from operations, quarterly Free cash flow, quarterly
Cash flow from operations, rolling 12 months Free cash flow, rolling 12 months
EUR million
• Healthy demand in fresh fibre paperboard is
expected to continue both in Europe and Americas
• In Europe, market prices in FBB and white-top
kraftliner are expected to rise slightly
– Metsä Board will increase the prices of linerboards and
FBB
• Metsä Board’s total delivery volumes in paperboard
are expected to grow compared to Q2/2016
• Q3/2016 profitability will be impacted by start-up
volumes from Husum, production challenges and
the delays in customer approvals due to the
production bottlenecks in Q2
Half year financial report 1-6/201644
Outlook for Q3/2016
Metsä Board’s operating result
excluding non-recurring items in
the third quarter of 2016 is
expected to remain roughly at the
same level as in the second
quarter of 2016.
1-6/201645
Profit guidance
for Q3/2016
Balance sheet and funding
1-6/201647
Strong balance sheet
Equity ratio, %
33%
41%39%
47% 47%
0%
10%
20%
30%
40%
50%
2012 2013 2014 2015 6/16
73%70%
51%
32%
54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2012 2013 2014 2015 6/16
Net gearing, %
625 597 427 333 541
3,4
2,9
1,81,2
2,1
0
1
2
3
4
0
200
400
600
2012 2013 2014 2015 6/16
Net debt, EUR million
Net debt/EBITDA (rolling 12m)
Net debt, EUR million and
Net debt/EBITDA
1-6/201648
Debt structure and liquidity30 June 2016
222
199
144
20 51
Bonds
Loans fromfinancialinstitutions
Pension loans
Finance leasesand other loans
Other short-termloans
161
100
65
Cash and cashequivalents
Revolving creditfacility
Unraised pensionloans
Debt structure,
total EUR 636 million
Available liquidity,
total EUR 326 million
Average maturity of long-term loans at 30 June in 2016 was 2.7 years.
1-6/201649
Debt programmes 30 June 2016
Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity
EUR 225 million bond Issue 2014 225 225 4.5 2019
Syndicated credit facility 2014 250 150 2.9 2020
EUR 101 million bilateral loans 101 101 3.0 2016–2020
EUR 20 million finance leases 20 20 1.9 2016–2022
EUR 209 million pension loans 209 144 4.5 2016–2020
Long-term borrowings Total amount, EUR million Outstanding, EUR million Average interest rate*, % Maturity
Revolving credit facility 2014 100 0 - 2020
Pension loan facilities 209 144 4.5 -
Short-term funding programmes
Metsä Group internal short-term limit 150 0 - 0–12 months
Metsä Group Treasury funding programmes
EUR 150 million domestic CP programme 150 0 - 0–12 months
Metsä Board’s significant debt securities issued and outstanding at 30 June 2016
* The average interest rate take into account outstanding interest rate swaps and amortised arrangement fees
The average interest rate of all Metsä Board interest bearing net liabilities incl. interest rate derivatives per 30 June 2016 is 3.5%
Metsä Board’s principal long-term liquidity reserves at 30 June 2016
1-6/201650
Maturity schedule in long-term IB debt
45
148
33
255
174
100
65
0
50
100
150
200
250
300
2016 2017 2018 2019 2020 2021 >2021
Long-term interest bearing debt (total EUR 541,4 million) and committed undrawn credit facilities 30 June 2016
Long-term interest bearing liabilities Committed undrawn credit facilities
EUR million
1-6/201651
Steadily decreasing net financial costs
47 56 39 32 14
5,2
4,6
4,2
3,8
3,5
3,0
3,5
4,0
4,5
5,0
5,5
0
20
40
60
2012 2013 2014 2015 H1/16
Net financial costs, EUR million
Average interest rate at the end of period, %
EUR million %
• Net financials in Q2 were -9 M€
(Q1/16: EUR -5 M€).
• Net exchange gains and losses
amounted to -2 M€ (2M€)
• Total FX impact after hedges in Q2 vs. Q1 was slightly negative
• UK referendum concerning BREXIT did not have a major impact on profitability
• Hedging duration of the main foreign currency flows is currently approximately 5 months
1-6/201652
FX exposure and sensitivities
62 %29 %
5 %4 % USD
SEK
GBP
Othercurrencies
FX exposure by currency
Annual gross amount EUR 1.1 billionAnnual FX sensitivities
to Group EBIT before hedges
10 % strengthening of foreign currency vs. EUR
will have an impact on Metsä Board’s EBIT of
Currency Next 12 months
USD, $ EUR +60 million
GBP, £ EUR +5 million
Swedish krona EUR -30 million
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1/2016
1-6/201653
Metsä Board 's credit rating
Moody’s
Standard & Poor’s
BB+ | Ba1
Stable
Positive
BB | Ba2
BB- | Ba3
B+ | B1
B | B2
B- | B3
CCC+ | Caa1
CCC | Caa2
Investments
• In H1 2016 the gross investments
were EUR 103 million and depreciation
EUR 48 million
• Annual maintenance capex is EUR
40–60 million
• Main growth capexes in 2016:
– Husum investment programme:
EUR 40 million (total EUR 170 mil.)
– Extrusion line:
EUR 23 million (total EUR 38 mil.)
– Metsä Fibre’s bioproduct mill:
EUR 25 million*
1-6/201655
Capital expenditure
0
30
60
90
120
150
180
2010 2011 2012 2013 2014 2015 2016E
Capex Growth capex Depreciation
EUR million
*) investment in equity made in Q2/2016
1-6/201656
Husum investment programme of
EUR 170 million
Folding boxboard production
• Capacity approximately 400,000 t/a
• Deliveries mainly to Americas and
Food service globally
• Start-up in February 2016, full
production capacity end of 2016
Linerboard production
• Capacity approximately 300,000 t/a
• Deliveries to Europe and Americas
Capacity changes 2014 vs. 2016:
• Paperboard capacity +700,000 tn/a
• Paper capacity -600,000 tn/a
• In Husum two paper machines were shut down in 2015
• One paper machine converted to produce linerboard (BM2)
• New folding boxboard machine (BM1)
1-6/201657
Ambitious growth targets for new paperboard
volume from Husum mill
250150
150
0
500
1 000
1 500
2 000
Deliveries in 2015 Folding boxboard toAmericas
Food service boardglobally
Linerboard toEurope andAmericas
Targeted deliveriesin 2018
A total of 400,000 tonnes
of new FBB capacity
If the demand/supply situation so requires in the coming years, Metsä Board has
possibilities to adjust its production accordingly
1,0
00 tonnes
• Net capacity increase at the site is approximately 800,000 t/a– Investment cost of approximately EUR 1.2 billion
– Start up in 3Q 2017
• Capital invested by Metsä Board will be EUR 24,9 million– Metsä Board has no other financial commitments in the project
– Investment will be made on Q2 2016
• Metsä Board’s holding in Metsä Fibre remains unchanged at
24.9 per cent
• All in all, Metsä Board’s pulp balance is expected to be
500,000–600,000 t/a long from 2018 onwards– Majority of the market pulp is softwood chemical pulp
– Reserve to grow paperboard business further in the future while
maintaining self-sufficiency in pulp
1-6/201658
Metsä Board’s associated company
Metsä Fibre builds a bioproduct mill
Food service packaging requires barrier features
e.g. moisture and fat resistance
• Investment value EUR 38 million
• Will be implemented at Husum mill
• Start-up in H1/2017 with capacity of 100,000 t/a
• In 2015–2016 Metsä Board’s paperboards are coated by
external converter
• The company continues to develop other barrier solutions
including biobased materials
1-6/201659
Metsä Board expands its offering in food and
food service paperboards by investing in
extrusion coating
Production, capacities and sourcing
Paperboard mills• Husum• Kemi • Kyro• Tako• Simpele• Äänekoski
Pulp mills• Husum• Joutseno• Kaskinen
Speciality paper mill• Kyro
1-6/201661
Production locations
Äänekoski
Simpele
Joutseno
Tako
Kyro
KaskinenHusum
Kemi
1-6/201662
Paperboard and specialty paper capacity in 2015
Town Country MachinesFolding
boxboard
White fresh
forest fibre
linerboard
Wallpaper
baseTotal
Tampere (Tako) Finland 2 210 210
Kyröskoski (Kyro) Finland 2 190 100** 290
Äänekoski Finland 1 240 240
Simpele Finland 1 280 280
Kemi Finland 1 410 410
Husum Sweden 2 400 300* 700
Total 9 1,320 710 100 2,130
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Pulp capacity in 2015
Metsä Board pulp mills Country Chemical pulp BCTMP Total
Husum Sweden 750 750
Joutseno Finland 320 320
Kaskinen Finland 320 320
Total 750 640 1,390
Metsä Fibre pulp mills Country Chemical pulp BCTMP Total
Äänekoski Finland 530 530
Kemi Finland 590 590
Rauma Finland 650 650
Joutseno Finland 690 690
Total 2,460 2,460
Deliveries by region in 2015
Folding Boxboard
1-6/201664
Fresh forest fibre linerboard
50%
26%
14%
11%
Western EuropeEastern EuropeAmericasAsia and Pacific
61%
6%
32%
1%
• The amount of certified wood was
75%
• A new supply chain management
target was launched: to audit 100% of
risk rated key material suppliers
against sustainability criteria by end
2015
89% of all Metsä Board purchases,
excluding wood, come from countries
where we have own production
Raw materials and supply chain management 2015
1-6/201665
Metsä Board purchases by country, % (excl. wood supply)
68
17
7
4 3 1
Finland
Sweden
Other EU
Germany
Outside Europe
Other
Own generation
20,90%
Through PVO shareholding
29,60%
Purchased energy49,50%
Wood-based58%
Nuclear power22%
Natural gas8%
Hydro5%
Coal4%
Oil2%
Other1%
Sweden 39%
Finland25%
Baltic countries20%
Russia15%
Sourcing 2015
Electricity sourcing (total 2,533 GWh)
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Primary energy used(total 12.3 TWh)
Wood sourcing by country (total 5.0 million cubic metres)
1-6/201667
Cost structure in 2015
Delivery costs16%
Wood26%
Chemicals, pigments and fillers
14%
Energy10%
Other variables4%
Personnel 14%
Other fixed16%
Fixed
costs
Variable
costs
Sustainability
SUPPLY CHAIN
RISK-RATED
KEY MATERIAL SUPPLIERS
AUDITED
100%
SAFETY
LOST-TIME ACCIDENTS
ANNUALLY
PERFORMANCE 2015 11,1
0
ENERGY
ENERGY EFFICIENCY
IMPROVEMENT10
PERFORMANCE 2015 10%
12% *) -17%
RESOURCE EFFICIENCY
PROCESS WATER USE PER
PRODUCT TONNE
PERFORMANCE 2015 - 16%
*) Target has been brought up from 10% to 12%
1-6/201669
Metsä Board’s sustainability targets (2020 vs. 2009)
> 80%
WOOD
THE AMOUNT OF
CERTIFIED WOOD
PERFORMANCE 2015 75%
-30%
CLIMATE
FOSSIL CO2 EMISSIONS
PER PRODUCT TONNE
PERFORMANCE 2015 -42%
<3%
WELL-BEING
SICKNESS ABSENTEEISM
PERFORMANCE 2015 4,1%
BIOENERGY SHARE OF TOTAL
PURCHASED ENERGY 81%
1-6/201670
Many advantages of lightweight and safe cartonboard
Fresh forest fibre is a pure
and safe raw material.
Lightweight boards use
less raw material, water
and energy and lower
transported weights.
Consistent quality
enables trouble-free
runnability in converting
and packing lines.
Strong packaging stays in shape in logistics.
High quality packaging
attracts at the point-of-sale.
Lightweight boards generate less
waste. They are recyclable and
compostable.
Ensured consumer safety.
• Highest possible score 100/100 for the depth and quality of
climate change data (2014: 98/100 and 2013: 82/100)
• High scores indicate success in providing robust climate
change data and strong understanding of climate-related
issues. Leaders usually have a solid financial performance
• Metsä Board recognized as world leader for corporate action
on water security
• Metsä Board achieved leadership status in the materials
sector of the Forest programme
1-6/201671
Metsä Board recognised as a leader for
corporate actions on climate change
CDP is an international, not-for-profit organization providing the only global system for companies and
cities to measure, disclose, manage and share vital environmental information. CDP works with market
forces, including 767 institutional investors with assets of USD 92 trillion, to motivate companies to
disclose their impacts on the environment and natural resources and take action to reduce them.
Owners
Market cap **) and foreign owners30 June 2016
1-6/201673
Ownership distribution30 June 2016
Market cap and ownership distribution
0
4
8
12
16
20
24
0
500
1 000
1 500
2 000
2 500
2012 2013 2014 2015 6/2016
Market cap, EUR million
Share of foreign owners, %
42 %
23 %
18 %
17 %
MetsäliittoCooperative
Domesticinstitutionalinvestors
Domestic privateinvestors
Foreign owners
EUR million
*) Metsäliitto Cooperative has 62% of the voting rights
**) Metsä Board market cap segmentation is Large Cap and it’s
included in OMX H25 Index
*)
1-6/201674
Ownership structure on 30 June 2016
42 %
17 %
18 %
12 %
6 %
2 % 3 %
MetsäliittoCooperative
Foreignowners*
Households
Public sectororganisations
Finance andinsurancecompaniesNon-profitorganisations
Othercompanies
62 %15 %
10 %
6 %
4 %
2 %1 %
MetsäliittoCooperative
Public sectororganisations
Households
Foreign owners*
Non-profitorganisations
Finance andinsurancecompaniesOther companies
Shares, %
(total no. of shares 355,512,746)Votes, %
(total no. of votes 1,037,530,115)
* incl. nominee registeredSource: Euroland
Appendix
METSÄ BOARD
Paperboard
Sales:
EUR 2.0 billion
Personnel:
2,600-
METSÄLIITTO COOPERATIVE’S
OWNERSHIP 42,53%
(HOLDING OF VOTES 62,15%)
METSÄ WOOD
Wood products
Sales:
EUR 0.9 billion
Personnel:
2,000
METSÄLIITTO COOPERATIVE’S
OWNERSHIP 100%
METSÄ FOREST
Wood supply and forest services
Sales:
EUR 1.5 billion
Personnel:
900
METSÄLIITTO COOPERATIVE’S
OWNERSHIP 100%
METSÄ TISSUE
Tissue and cooking papers
Sales:
EUR 1.0 billion
Personnel:
2,800
METSÄLIITTO COOPERATIVE’S
OWNERSHIP 91%
METSÄ GROUP | Sales EUR 5.0 billion | Personnel 9,600
METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 116,000 Finnish forest owners
METSÄ FIBRE
Pulp
Sales:
EUR 1.4 billion
Personnel:
850METSÄLIITTO COOPERATIVE’S
OWNERSHIP 50,2%
METSÄ BOARD 24,9%
ITOCHU CORP. 24,9%
1-6/201676
Metsä Board is part of Metsä Group & listed in Nasdaq Helsinki
2005 Structural change starts Paper businesses over 80% of salesDecision to exit paper business
2006 Strategic review launchedRestructuring and focused investment programme initiated, focus on paperboard
2007–2013 Streamlining and focused investmentsPaper capacity reduction from about 5 million to 0.8 million annual tonnesMajor divestments incl. Graphic Papers and Map MerchantsPaperboard capacity increases
2013 Strategic review completed Clear focus on paperboard Paper production about a quarter of sales
2015 Strong position and growingEurope’s leading producer of folding boxboardThe world’s leading manufacturer of coated white-top kraftlinersExit from paper business in 2016
1-6/201677
True success story
1-6/201678
EUR million
5241 5624
4440
32362432 2605 2485 2108 2019 2008 2008
-10,0
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
-10000
-8000
-6000
-4000
-2000
0
2000
4000
6000
8000
10000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sales EBIT-%
%
Sales and EBIT-% development 2000–2015
1-6/201679
M&A activity 1997-2015
100 000 B2
shares in
PVO
Acquisitions
Divestments
Biberist Paper Mill
UK Paper
Modo Paper
Zanders
Chemicals
Business
Botnia
WoodCorrugated
PackagingMD Papier Metsä
Tissue
Albbruck Savon
Sellu
Forestia
Kemiart
Liners (53 %)
8% in
Botnia
PSM
9% in
Botnia
Carton
plants
Map
New
ThamesMB
Uruguay
Graphic
Papers
Part of
Reflex
Hallein
mill
1997 20001998 1999 2001 2002 2003 2004 2005 2006 2007 20092008 2010 2011
Rest of
Reflex
0.5% in
PVO
2012
7.3 % in Metsä Fibre
2013 2014
Alizay
mill Lielahti
real estate
2015
Gohrsmühle
mill
Simpele Mill
Year Divestiture Enterprise Value, EUR million
2015 Gohrsmühle mill in Germany neg.
2014 Lielahti real-estate 32
2013 Alizay property and other estates 22
2012 7.3% stake in Metsä Fibre 138
2012 0.5% stake in PVO 64
2011 Hallein 34
2009 Metsä-Botnia’s Uruguayan operations 300*
2008 Graphic Papers 750
2008 100,000 shares in PVO 80
2008 New Thames mill 82**
2007 Map Merchant Group 382
2007 Folding carton plants 60
2007 Botnia (9%) 240
2005 Botnia (8%) 164
2005 Savon Sellu 20
2005 Forestia (95%) 163
2004 Metsä Tissue 570
2002 Papierfabrik Albbruck 235
2001 MD Papier 300
2001 Noviant (19%) 41
3,679
1-6/201680
Significant Divestments
EUR 3.7 billion in assets divested since 2001
* Cash portion
**Incl. pension liabilities
Katri Sundström
Vice President, Investor relations
Tel +358 400 976 333
www.metsaboard.com
1-6/201681
Contact information
