CEO Mika Joukio's review

CEO's review

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

Comment on  January–March 2020 results   

"Our operating result in January–March was EUR 33.8  million, when it was almost double that in the corre-sponding quarter last year. The main reason for the weaker result was the cheaper price of market pulp.

Also, the two-week strike of paper industry workers early in the year had a big impact on us, given that a majority of our production is located in Finland. The negative impact that the strike had on the result totals roughly EUR 20 million, and most of it concerned the first quarter. The first-quarter cash flow was exceptionally strong.

It is difficult to estimate the ultimate impact that the global spread of the coronavirus, which began during the review period and continues to this day, will have on our business. The pandemic has decreased demand in certain end uses of paperboard. On the other hand, it has accelerated the demand for food and pharma packaging, for example. So far, the pandemic's net effect on the order inflow of Metsä Board's paperboards has been positive. 

Despite the exceptional circumstances, our production of folding boxboard was at a record high in March. Our investment projects also continued according to plan: Foundation work got under way in Husum's recovery boiler project in Sweden and the winder project at Kyro mill in Finland has progressed according to the original schedule. 

Metsä Board's financial position is strong. The financing arrangements made last year secured a favourable maturity profile for our loans, and provide us with financial flexibility. Our liquidity is likewise on a good level. 

The pandemic will significantly weaken the world economy, and is also likely to have a negative impact on Metsä Board's business and profitability. Even so, as a company we have a strong foundation – skilled people, the industry's leading products and innovative packaging solutions. Furthermore, demand for pure and safe products made from a renewable raw material can be expected to continue.  

For now, the most important things are our personnel's safety, ensuring the continuity of our business and preventing further spread of the pandemic. I have proudly taken note of how well our personnel have performed and coped with this challenging time. These exceptional circumstances will come to an end at some point, and I believe that, once things get back to normal, we will be in an even stronger position to respond to our customers' needs."


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