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Introduction & Market Context
Metsä Board (HEL:METSB) presented its Q1 2025 results on April 29, showing modest improvement in profitability compared to the previous quarter, though still facing significant headwinds. The Finnish paperboard manufacturer reported a comparable operating result of EUR 23 million, recovering from a EUR -4 million loss in Q4 2024, but still below the EUR 32 million recorded in Q1 2024. The company’s stock rose 3.68% following the presentation, suggesting investors found some encouragement in the results despite ongoing challenges.
The quarter was marked by increased paperboard deliveries and production volumes, but profitability remained under pressure due to rising costs and uncertainty surrounding US tariffs, which could significantly impact the company’s substantial American business.
Quarterly Performance Highlights
Metsä Board reported sales of EUR 481 million in Q1 2025, representing a slight decrease of 1% from EUR 484 million in Q1 2024, but a 7.8% increase from EUR 446 million in Q4 2024. Paperboard deliveries increased to 367,000 tonnes, up 1% year-over-year and 7% quarter-over-quarter, while production volumes rose to 430,000 tonnes, showing a 7.5% year-over-year increase.
As shown in the following chart of quarterly paperboard deliveries, volumes have been consistently below capacity, though showing some recovery in recent quarters:
The company’s comparable operating result margin stood at 4.7% in Q1 2025, down from 6.5% in Q1 2024 but a significant improvement from the negative 0.8% in Q4 2024. This profitability was supported by a higher result share from Metsä Fibre and lower energy and chemical costs, but negatively impacted by higher wood and logistics costs, as well as increased employee costs and depreciation.
The following chart illustrates how sales have remained relatively consistent while profitability has been under pressure:
Cash flow from operations was negative at EUR -28 million, deteriorating from EUR -8 million in Q1 2024, primarily due to prolonged low profitability and increased working capital. The company’s return on capital employed (ROCE) stood at 4%, significantly below its target of >12%.
The comprehensive financial data table below provides a detailed overview of the company’s performance:
Strategic Initiatives
In response to profitability challenges, Metsä Board announced the closure of its Tako mill to improve competitiveness. This strategic move is expected to generate an annual EBITDA improvement of approximately EUR 30 million, primarily from Q4 2025 onwards. Tako’s production will be transferred to other mills, mainly to the Kyro facility.
The company is also navigating the impact of US tariffs, which create significant uncertainty for its American business. In 2024, Metsä Board’s sales to the US amounted to EUR 430 million, with paperboard deliveries of 365,000 tonnes. The company is currently negotiating with customers regarding the impact of tariffs on paperboard prices and aims to maintain relationships with long-term customers despite these challenges.
The regional distribution of Metsä Board’s paperboard sales highlights the importance of the Americas market, particularly for folding boxboard:
Sustainability Performance
Metsä Board maintained its strong sustainability credentials, achieving a "triple-A" rating in CDP, a global independent environmental disclosure system. The company continues to progress toward its goal of fossil-free mills by 2030, with various initiatives underway across its production facilities.
The following chart outlines the company’s key sustainability metrics and progress toward 2030 targets:
The company’s transition plan to fossil-free operations by 2030 includes specific initiatives at each of its mills:
Forward-Looking Statements
Looking ahead to Q2 2025, Metsä Board expects its comparable operating result to be weaker than the EUR 23 million achieved in Q1 2025. This guidance reflects increased uncertainty due to US tariffs, potential changes in consumer buying behavior affecting paperboard demand, and the impact of planned maintenance shutdowns, including at Metsä Fibre’s Kemi bioproduct mill (estimated impact on Metsä Board:EUR 10 million).
Despite these challenges, the company maintains that its financial position remains solid, with a focus on strengthening cash flow and continuing mill improvements. The net debt to comparable EBITDA ratio has increased but remains within the target range of less than 2.5.
For the full year 2025, total investments are expected to be in the range of EUR 100-150 million, including the paperboard machine renewal at the Simpele board mill and the pulp drying machine at the Husum pulp mill.
As global paperboard and pulp markets continue to face price pressures, Metsä Board’s ability to navigate these challenges while implementing its strategic initiatives will be crucial for its performance throughout the remainder of 2025.
Full presentation:
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