Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Metsa Board Oyj (FRA:MSRB, Financial) reported a 7% increase in full-year delivery volumes compared to 2023.
- The company received EUR7.5 million in insurance compensation related to the Kemi bioproduct mill explosion.
- Folding boxboard sales strengthened in each market compared to the previous year.
- The company has a solid financial position despite recent large growth investments.
- Metsa Board Oyj (FRA:MSRB) is making significant investments to improve energy efficiency and reduce carbon footprint.
Negative Points
- Q4 demand for paperboard was lower than expected, leading to production curtailments and temporary layoffs.
- The operating result for 2024 was significantly weaker than in 2023, at EUR69 million.
- The Kemi bioproduct mill shutdown had a roughly EUR9 million negative impact on operating results.
- Cash flow has been in steep decline, with free cash flow at EUR84 million negative for the year.
- The company faces challenges from increased import volumes of carton board from Asia, impacting market balance in Europe.
Q & A Highlights
Q: What is the current demand for paperboards in Europe, and what is the outlook for folding boxboard pricing in Europe and North America this winter and spring?
A: Mika Joukio, CEO, stated that Q1 is expected to be better than Q4, with improved order inflows from Europe and other markets. Prices are estimated to remain flat or slightly better in Q1 compared to Q4 for both white kraftline and folding boxboard in Europe and North America.
Q: Can you provide insights into the annual contracts for folding boxboard in Europe?
A: Mika Joukio, CEO, mentioned that the volumes for annual contracts in Europe are higher than last year, and prices are pretty much flat, which is considered a good achievement given the global demand and supply situation.
Q: What are the reasons for the significant decrease in paperboard demand in Europe compared to five years ago?
A: Mika Joukio, CEO, explained that the demand has been affected by Asian producers sending paperboard to markets where European producers have traditionally delivered overcapacity. Additionally, the economic situation in Europe, particularly in Germany, has contributed to the weaker demand.
Q: How are the Finnish strikes impacting Metsa Board, particularly in terms of chemical availability?
A: Mika Joukio, CEO, stated that so far, there has been no negative impact from the Finnish strikes. They have sufficient raw materials to produce their products and have made preparations to move volumes outside Finland if necessary.
Q: What is the status of the Kemi and Husum ramp-ups, and when do you expect full capacity?
A: Mika Joukio, CEO, reported that Kemi is running well, with an investment shutdown planned for June. Full capacity is expected by the end of the year, allowing for full-speed operations in 2026.
Q: Can you provide details on the potential conversion of the board machine at Husum and its impact?
A: Mika Joukio, CEO, explained that the pre-engineering study is focused on producing greaseproof and food service papers. The ownership and CapEx details are still under consideration, with results expected in Q1 next year.
Q: How do you view the potential market imbalance with new capacity in Europe, and what actions are you considering?
A: Mika Joukio, CEO, attributed the imbalance to Asian producers entering markets traditionally served by European producers. The company is planning actions like the potential closure of the Taco Mill to address this imbalance.
Q: What is the expected depreciation level going forward, considering the potential closure of Taco?
A: Henri Sederholm, CFO, stated that the depreciation for this year will be close to last year's level, between EUR105 million to EUR110 million, with Taco's depreciation having only a minor impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
