CEO Mika Joukio's review

CEO's review

Metsä Board's CEO Mika Joukio comments on the performance of the company.

CEO comment in Financial statements bulletin 2020   

“The fourth quarter of the year went according to our expectations and our comparable operating result was EUR 64.5 million (10–12/2019: 39.1). The lower produc-tion costs for the paperboard business and the in-creased delivery volumes of market pulp improved our profitability. Our financial position remained strong: at the end of the period, our interest-bearing net debt was at EUR 236 million and its ratio to comparable EBITDA was clearly below one.

In December, we announced to sell a 30% share of the Husum pulp mill to the Swedish forest owner coopera-tive Norra Skog. The arrangement made Metsä Board practically a net debt free company, which means that we are in an excellent position to expand our core busi-ness – sustainable, high-quality fresh fibre paperboard. Also in December, we made a final investment decision on the first phase of the renewal of the Husum pulp mill.

The coronavirus pandemic’s negative impact on our business remained smaller than expected throughout the year. Solid demand in food and pharmaceutical packaging, as well as in various packaging solutions in the retail sector, increased demand for our fresh fibre paperboards in our main markets. Our paperboard deliveries grew from the previous year and were 1,810,000 tonnes. Our growth continued, particularly in North America, where our sales are supported by com-petitive products, an efficient supply chain and superior customer service.

Our comparable operating result in 2020 improved by 20% from the previous year and was EUR 221.2 million. Our comparable return on capital employed, 12.2%, reached our long-term target level. Profitability im-proved due to lower production costs and a positive foreign exchange impact. Early in the year, our result was burdened by the paper industry strike that lasted more than two weeks. The strike concerned Metsä Board’s mills in Finland and all of the pulp mills of our associated company Metsä Fibre. Pulp’s overall impact on our operating result was neutral.

Our production and deliveries has not experienced any disruptions during the pandemic, and the annual maintenance shutdowns of the mills were carried out successfully. The production efficiency of our mills was at a high level in 2020 and we achieved new records in both paperboard and pulp production.

In the autumn, we opened a state-of-the-art Excellence Centre to accelerate paperboard and packaging innova-tions in cooperation with customers and technology partners all over the world. As part of Metsä Group, we also participate in large-scale collaborations which develop large-volume bioproducts with clearly lower carbon footprint than that of products currently on the market.

Our ambition is to be a forerunner in sustainability and we aim for entirely fossil free production and products by 2030. We received plenty of recognition for our sus-tainability this past year. Our recyclable paperboards made from renewable fresh fibres are ideal for sustain-able packaging, which will also support their demand in the future.

The ultimate duration of the coronavirus pandemic is difficult to estimate, and we continue to follow appropri-ate precautionary measures. Most importantly, we must ensure the health and safety of employees, prevent the virus from spreading and secure the continuity of our business. Our starting points for 2021 are nevertheless good: we have a favourable market situation, a strong financial position and highly competent and motivated personnel. I feel positive and confident about the future.”

Mika Joukio


Review in the 2019 Annual report:
Solutions for packaging of the future


Dear reader,
The signs of change in the operating environment of packaging materials are increasingly strong. Climate change mitigation and the reduction of plastic waste require action from everyone. We want to contribute by offering solutions for these challenges and are steering our operations and development work accordingly.

Successes in the paperboard business in 2019
In 2019, demand for our folding boxboard was stable and our average prices rose in all market areas relevant to us. We successfully defended our prices for white kraftliners in the modest demand situation in Europe, which nevertheless picked up after the summer. The total delivery volume of our paperboards was roughly 1.8 million tonnes and our comparable operating result was EUR 184 million. Our profitability was impacted by the decline in the prices of market pulp in both Europe and China. Our cash flow from operations was strong, EUR 201 million. The Board of Directors proposes that EUR 0.24 per share will be distributed to the shareholders, which is in line with our dividend policy. In the spring, we introduced our renewed folding boxboard portfolio to the market. It will help our customers to respond to the requirements of future packaging – to save on resources and reduce their carbon footprint. In the autumn, we launched a new plastic-free eco-barrier paperboard, which provides good protection against moisture and grease, particularly in food and food service packaging. Our recyclable eco-barrier paperboard has generated a lot of interest among our customers and I believe strongly in its commercial success.

We are a forerunner in sustainability
Focus, growth and profitability are the cornerstones of our strategy. We will continue to focus on premium fresh fibre paperboards, and our future growth is strongly guided by our profitability targets. We are a forerunner in sustainability and concentrate increasingly on the development of innovative and sustainable packaging solutions in cooperation with our customers.

As part of Metsä Group, we have set ourselves ambitious sustainability targets with which we aim, among other things, for mills and raw materials by 2030. We are committed to mitigating climate change in accordance with the UN's Sustainable Development Goals. Sustainability is also important for our customers, and I believe that fossil free products will provide us with a significant competitive edge.

Future packaging is expected to provide better brand experiences with less environmental impact than before, not forgetting the functionality of the packaging. We always know the origin of our most important raw material – pure northern fibre – and our end products support the principles of the circular economy. We are in the process of building a paperboard and packaging Excellence Centre in Äänekoski.

The centre will combine packaging design and R&D excellence under the same roof. The centre enables extensive cooperation with our customers throughout the value chain. Our success has been enabled by skilled and committed personnel. We want everyone to be successful in their work and to develop their own competence. Clear goals and supervisory work in line with our values, as well as the systematic development of our personnel's know-how will support these successes.

We invest in future growth
With the renewal, we will ensure the development of our paperboard business in the Husum integrated mill in the future. It also improves our energy efficiency and is a significant step toward our target of fossil free mills.

The future of fresh fibre paperboard looks bright. Fibre-based, fully recyclable packaging solutions are replacing packaging materials based on fossil based raw materials to an increasing degree, which means that there is a lot of potential. I am very confident of Metsä Board's continued success.

I want to extend my warmest thanks for the past year to our customers, employees, shareholders and other stakeholders.

Mika Joukio