Earnings call transcript: Metsa Board Q2 2025 sees strategic shifts amid challenges

Metsa Board Oyj B reported its Q2 2025 earnings, revealing a mix of strategic initiatives and challenges. The company’s stock rose 2.89% following the announcement, reflecting investor optimism despite a decline in sales and operating results. According to InvestingPro data, the stock has declined nearly 24% year-to-date, and analysis indicates the company is currently undervalued. The company is focusing on profitability improvements and operational adjustments to navigate a challenging market environment.

[Discover 6 key InvestingPro Tips for Metsa Board, including insights on valuation multiples and dividend consistency. Start your InvestingPro trial to access all tips.]

Key Takeaways

• Metsa Board’s stock increased by 2.89% post-earnings announcement.
• Q2 sales declined 5% quarter-on-quarter and 10% year-on-year.
• The company launched a €200 million profitability improvement program.
• CapEx guidance for 2025 has been reduced to approximately €100 million.
• The company plans to release €150 million in working capital by year-end.

Company Performance

Metsa Board faced a challenging Q2 2025, with sales declining both sequentially and year-over-year. The company reported a negative comparable operating result of €23 million, indicating operational pressures. InvestingPro data shows the company maintains a solid financial foundation with a current ratio of 1.79 and an Altman Z-Score of 7.05, suggesting strong financial stability. Despite these challenges, Metsa Board is leveraging its strong sustainability credentials and long-term customer relationships to maintain its competitive position.

Financial Highlights

• Revenue: Declined 5% quarter-on-quarter and 10% year-on-year.
• Operating result: Negative €23 million.
• Interest-bearing net debt: €430 million.
• Leverage: 2.9%, above the 2.5% target.

Market Reaction

Metsa Board’s stock rose by 2.89% following the earnings call, indicating a positive response from investors. The stock’s movement is notable given the company’s operational challenges, suggesting confidence in the company’s strategic initiatives and future prospects.

Outlook & Guidance

Looking ahead, Metsa Board expects paperboard delivery volumes to remain flat in Q3, with a weaker comparable operating result than Q2. The company is shifting its focus from the U.S. market to European growth and aims to absorb U.S. tariffs through pricing strategies. According to InvestingPro analysis, analyst consensus remains cautiously optimistic with price targets ranging from €3.72 to €4.69. An update to the overall strategy and financial targets is expected by the end of 2026.

[Access the comprehensive InvestingPro Research Report for Metsa Board, part of our coverage of 1,400+ stocks, for detailed analysis and actionable insights.]

Executive Commentary

CEO Esa Kaikkonen emphasized the importance of proactive measures, stating, "We cannot simply wait for the market conditions to improve." He highlighted the launch of the profitability improvement program aimed at achieving an annual EBITDA improvement of €200 million by 2027. Strengthening cash flow is now a key priority for the company.

Risks and Challenges

• Weak consumer sentiment is affecting demand for Packaging Materials.
• Geopolitical instability and U.S. import tariffs create uncertainty.
• The pulp market remains weak, particularly in Europe and China.
• Overcapacity in the EMEA region is disrupting market balance.
• The company’s leverage exceeds its target, posing financial risks.

Q&A

During the earnings call, analysts focused on the impact of U.S. tariffs and the details of the profitability improvement program. Questions also addressed strategies for reducing working capital and managing inventory levels, reflecting concerns about operational efficiency and financial health.

Full transcript - Metsa Board Oyj B (METSB) Q2 2025:

Katis Unstrom, Investor Relations, Metzaboard: Good afternoon, and welcome to Metzaboard’s half year report webcast and conference call. My name is Katis Unstrom, and I’m responsible for Investor Relations at Metzaboard. As you may notice, our format has changed. From now on, we will be holding our result presentations as live webcasts instead of audiocasts. Otherwise, the structure remains the same.

CEO, Esa Kaikkonen and CFO, Henry Sverholm, will present the results, after which we will open the conference call for questions. In addition, you can submit questions through chat function by typing them into the text box visible on your screen, and I will then present them here to the management. And an important reminder and disclaimer that the presentation includes forward looking statements. But now we are ready to begin. Once more, thank you for joining us today, and I will now hand over to Essa.

Esa Kaikkonen, CEO, Metzaboard: Thank you, Kati, and good afternoon, everyone. Before moving on to the results, let’s take a moment to review the current market landscape we are facing. Weak consumer sentiment and cautious spending have continued to hold back demand for Packaging Materials. Geopolitical instability, U. S.

Import tariffs is adding further uncertainty, even though there is a preliminary deal between U. S. And EU now. The market balance, especially in the EMEA area, has been disrupted by capacity growth. And lastly, high wood costs are putting pressure on our competitiveness.

To strengthen our competitiveness and adapt our cost structure was we announced earlier today that we are launching a transformation program focused on improving profitability. In addition to the cost savings, we aim to enhance our commercial capabilities and leverage our core competitive strengths. I will return to the details of the program later in my presentation. In a very tough market situation, Metaboard has several competitive advantages, which have secured our leading position in high quality Packaging Materials. First and foremost, our employees are not only highly skilled, but also motivated and deeply committed to Metsoboard’s development.

Our paperboard production is based on years of deep expertise, and our product quality constantly receives high ratings in customer surveys. We have also numerous long term customer relationships that value the high performance of our boards and the wide range of services we offer. And finally, customers appreciate our high sustainability level and the transparent value chain, which is supported by being part of Netza Group. Together, all of these form a solid foundation for the transformation. But now let’s move on to the results, starting with a brief overview of Q2.

Our comparable operating result was clearly negative at minus €23,000,000 The decline from Q1 was greater than we had anticipated earlier. The main reasons were the continued weakness in the pulp market and more extensive production curtailments, the main reasons. In particular, U. S. Tariffs have increased uncertainty and negatively affected order inflows.

Cash flow remained negative as it did in Q1. Looking ahead, we will place particular emphasis on improving cash flow with the progress expected already Q3 through tighter operative working capital management. There was also a long repair shutdown at Metsofibres Chemie mill, where the damaged evaporator units were replaced with the new ones. During the shutdown, Metsoboard’s kraftliner production was also halted. Finally, the closure of Tako Mill was completed at the June.

Production was successfully transferred to Kura, where operations were also streamlined. These measures are expected to improve our EBITDA, annual EBITDA, by approximately €30,000,000 starting from Q4. Total paperboard delivery volumes reached 360,000 tonnes in Q2, slightly below our earlier expectations of stable volumes compared to Q1. Our delivery volumes remain clearly below the capacity. To return to the growth path, we must take proactive steps, sharpening our commercial focus and making more effective use of our services.

The year to date sales split for both FBB and White Craftliner showed no major deviations between the review periods. However, total volumes were lower than the same period last year, even though deliveries in 2024 were negatively impacted by political strikes in Finland. Then Market Pulp. Metzaport’s Market Pulp deliveries in Q2 totaled just 86,000 tonnes, the lowest quarterly volume in several years. Year to date deliveries also lagged behind the corresponding period last year.

In contrast, Metsofibres deliveries increased compared to the same period in 2024. We also curtailed production at the Husum pulp mill and PCTMP mills more than initially anticipated at the beginning of the quarter. Demand for softwood market pulp has remained weak in both Europe and China, with no clear sign of near term improvement. In June, Metsofiber announced a temporary shutdown of its Yogeno pulp mill to adjust the inventory levels in response to low order volumes, particularly from Asia. In addition to the sluggish market, European pulp producers’ competitiveness has been impacted by high wood costs and the weakening of the U.

S. Dollar against the euro. Now over to Henri for a closer look at the financials.

Henry Sverholm, CFO, Metzaboard: Thank you, Olesa, and good afternoon, everyone. Let’s start with the top line. Our Q2 sales declined by 5% compared to Q1 and by 10% year on year. The main driver behind this decline was lower delivery volumes in both paperboard and pulp. Profitability in the second quarter was very unsatisfactory and worse than we had anticipated.

The first half of the year resulted in breakeven. Next, let’s look at the bridge analysis of items affecting the operating result. The main result drivers were fairly consistent across both comparison periods. Metsofibers’ negative earnings contribution was smaller than in the corresponding periods last year, and this led to a positive impact. In Q2, paperboard prices rose slightly in local currencies.

However, this positive effect was offset by the weakening of the U. S. Dollar. On the negative side, lower delivery volumes production volumes of both paperboard and pulp along with adverse currency effects burdened the result. Fixed costs and depreciation were higher in both periods.

During the review period, wood and logistics costs rose, while chemical costs declined. And as a result of poor profitability development, our return on capital employed remains well below our target level of 12%. At the end of the review period, capital employed amounted to €2,600,000,000 And now the cash flows, which have been in the red for several quarters, although the decline is showing signs of stabilization. In addition to weak earnings, our operating cash flow has been particularly impacted by capital tied up in product inventory. We have already initiated measures to release working capital, and we expect the results to be reflected in cash flow on the second half of the year.

Furthermore, investments in 2025 will be clearly lower than during the last five years. It is also worth noting that our operating cash flow is affected by dividends received from our sister company, Metze Fibre. Negative cash flow has impacted our interest bearing net debt, which stood at €430,000,000 at the end of the period. Combined with weak profitability, this pushed our leverage above the target level, reaching 2.9%. Despite exceeding our target of 2.5%, our financial position remains stable.

During the review period, we issued a new six year €200,000,000 green bond. This transaction extends our debt maturity profile and supports our ambitious 2030 sustainability targets. And that concludes the financial review, so back to you, Ese.

Esa Kaikkonen, CEO, Metzaboard: Thank you, Henri. Before moving on to the outlook, let’s take a quick look at our investments as well. The major investment projects are now behind us, and our focus is shifting to making the most of the recent capacity expansions. This means sharpening our sales and marketing efforts, which I will touch on shortly. We are lowering our CapEx guidance for 2025 and estimate that our investments will be landing approximately to €100,000,000 The renewal of the Simpele paperboard machine will be completed this year, with a major shutdown scheduled for September.

We are also critically reviewing ongoing pre engineering projects and will provide an update on them latest in Q3 interim report. Now on to the near term outlook, which remains uncertain. Weak consumer goods demand and The U. S. Tariffs continue to reduce the predictability of Paperboard sales.

Expect our Paperboard delivery volumes in Q3 to remain relatively flat compared to Q2. Variable costs, excluding pulp, are expected to stay stable. In Q3, there will be more planned annual maintenance than in Q2. At Simpele, an investment related shutdown lasting approximately one month is scheduled. We will also continue market related and working capital reduction driven curtailments at near all mills, which will negatively impact the results.

The weak pulp market is expected to continue. The total impact of pulp will be significantly weighed on Q3 profitability. Based on this outlook, we estimate that our comparable operating result in Q3 twenty twenty five will be weaker than in the last quarter. That concludes the review of our results. Let’s now turn our focus to the future and the transformation program we announced this morning.

We cannot simply wait for the market conditions to improve. Instead, we must take decisive, immediate actions to cut our cost base, improve the profitability and drive focused value creation. It’s essential that we actively leverage our core strengths, those I highlighted at the beginning of my presentation, and concentrate on the markets and customer segments that deliver the greatest value. We must improve our profitability and strengthen our cash flow, as I stated, without delay. We are launching a profitability improvement and cost savings program aimed at achieving an annual EBITDA improvement of €200,000,000 fully realized by the 2027.

On the cost side, we are implementing a broad set of measures, including optimized sourcing and use of raw materials as well as reduction in unit costs, some of which are already underway. In terms of fixed costs, we see clear potential for savings in ill overheads, group level shared services and ICT expenses. To improve profitability, we are sharpening our commercial focus by redefining key customer segments and aligning our sales efforts to support the profitable growth. To succeed, we must also make better use of our service offering. Supply chain efficiency will be enhanced by streamlining the product portfolio and reducing the complexity.

Strengthening the cash flow is now a key priority. Our target is to release €150,000,000 in working capital by the end of this year, with a particular focus on optimizing inventory management, where we see significant opportunities for improvement. Key performance will be followed and improvement program will be defined during the third quarter. Progress will be reported as well on quarterly basis. Alongside profitability improvements, we need sustainable growth and must consistently deliver value, especially to our key customers.

Given the current high level of uncertainty in The U. S. Market, we are shifting our focus also towards accelerating growth in Europe. In the past years, we have been too dependent on the growth in The U. S.

Market. The U. S. Will remain our core market, where our goal is to maintain the strong position we’ve built over the decades. Growth in The U.

S. Will primarily come from deepening relationships with our existing customers. Reducing complexity in our product portfolio means sharpening our focus on Food, Foodservice, Healthcare and other strongest growing brand segments. Supported by our strong sustainability credentials, regulation is still one of our most important growth drivers. We must leverage this more effectively, particularly in our product development efforts.

And to support this transformation, we are also reshaping our leadership team. I’m very happy about receiving new people into my management teams. These changes will ensure that we have the right capabilities in place to achieve our targets: strengthen the cash flow, improve the profitability and ensure the sustainable growth. The new members joining the management team bring valuable expertise to support the company’s strategic priorities. Erija strengthens the team with her local commercial with her commercial excellence.

Minna Bjorklund brings strong industrial leadership, and Laura Remes will focus on the execution of key transformation initiatives. So welcome new members as well. And then, of course, here are the next steps, what is to be expected. During the third quarter, we will move forward with more detailed planning and execution of the transformation program. We will be defining also clear indicators and set clear targets for each initiatives.

Progress will be tracked and reported on a regular basis. We will be critically reviewing our ongoing investment pre engineering projects, including the ERP program that we have been informing you earlier. In addition, we will be updating our overall strategy and financial targets as well, aiming to present this by the end of the 2026. With this, I conclude my presentation and we are ready now for your questions. Thank you.

Robin Santaverta, Analyst, DNB Carnegie: Okay.

Moderator: The next question comes from Linus Larsson from SEB. Please go ahead.

Linus Larsson, Analyst, SEB: Thank you and good day, gents and everyone listening in. On these incredibly ambitious cost savings and profit improvement measures that you are launching today, Could you please share some more detail what are the main buckets here? And is it right to understand that half of the €200,000,000 is across the board cost savings and half of it is commercial measures like more sales, which will have an impact on operating rates and top line? A bit more detail would be super helpful. Okay.

Esa Kaikkonen, CEO, Metzaboard: Thank you, Bib. Thank you for the question. I would say that this as I was actually elaborating earlier, the €200,000,000 is divided both in a cost savings and then profitability improvement. And I think that we were actually opening in our press release also quite extensively those items that we have been looking at. As there are very, very many different items throughout the whole value chain where we have to improve the profitability, but it’s not only those issues you were referring to the top line.

I think that, that is, of course, the aim at the end of the day to grow the business. As I said, we have been too dependent on The U. S. Growth earlier in the past ten years. And now we are shifting the focus also to the European market.

And I think that we have been identifying a lot of new, let’s say, initiatives throughout the value chain, where we can really if you look in the sales, for instance, sales side, I think that we are not currently using our services to leverage the services for the growth initiatives and then through that also actually to the Product Development. And then in the Supply Chain, just an example on the product development, when we really can develop the recipes in a way that they would be more efficient that they are today, still keep the good quality that is appreciated by the customers. And then if you go to the supply chain side, we have been dealing with our customer base. We have as you understand that we have plenty of customers, and we have been dealing with them decades. And through those decades, there is a a lot of complexity coming on regarding the offering and also how we operate in the markets, where we are having the warehouses, how the logistics is operating.

And then through that, you go to the production side and you aim to have production runs that are more efficient from the cost perspective and also from the runnability point of view, getting the ORs and OEEs higher level. But that’s in a nutshell. I think that plenty of discussions will be now actually carried on in our internal discussions to have detailed plans. But this is based really to a robust analysis that we have been doing together with my management team and also with the senior management. And I think that we have a plentiful, let’s say, task list now on these initiatives, and I’m pretty sure that we can really carry out good results out of this program.

Linus Larsson, Analyst, SEB: And how much is a higher operating rate part of these €200,000,000 that you’re targeting? Is that at all a part of it?

Esa Kaikkonen, CEO, Metzaboard: Well, I think that it’s not something that we can today predict what would be the clear impact on the operating rate as such. We aim to have as high operating rate as possible, but we’ll be seeing then the results when we are collaborating with the customers and internally as well in order to get best out of this program.

Linus Larsson, Analyst, SEB: Right. And then maybe on more of the short term market dynamics and if we talk about The U. S. Market for a moment. Looking at your slides, the paperboard shipments in the first half were clearly down when it comes to line of board, but actually not so much for folding boxboard.

So I wonder what you’re seeing experiencing in The U. S. Market in terms of current order books and your anticipation for the third and the fourth quarters in The U. S. Market, please?

Esa Kaikkonen, CEO, Metzaboard: Yes. Yes, we if you’re looking at the overall market situation, I think that this uncertainty that is related to the tariffs, it was the greatest in the last quarter. And now I think that we are basing our hypothesis that there will be tariffs in the level of 15% as of August 1. And I think that, that is the level that we can live with clearly. We were able to push the prices in local currencies up during the Q2 based on the tariffs.

In FBB, now further increases will be more difficult. WKL, I see better opportunities also going forward because there is no, let’s say, substitute on WKL than FPP’s fighting against SBS mainly in The U. S. Market. And I see that we have an opportunity based on our, let’s say, good commercial relationships.

We can turn the trend upward again. I don’t say that it comes in Q3, but eventually, it will be following, and we can get these tariffs absorbed to the prices at some point of time. I can’t promise when it happens, but I see clear opportunities based on the discussions that we have had in the markets with our customers.

Linus Larsson, Analyst, SEB: Right. That sounds good. And how far have you come in folding boxboard and kraftliner, respectively, in terms of absorbing this tariff at this stage?

Esa Kaikkonen, CEO, Metzaboard: WKL, I think that we have been able to push the prices and the cost of tariffs almost 100%. In FBB, it’s been a bit tougher, we had to make some concessions, but not substantial.

Linus Larsson, Analyst, SEB: Okay. That’s great. And finally, just one more question, and that’s on paperboard in terms of production in the third quarter. What do you expect? Do you expect higher, lower or the same level of production as in the second quarter in Paperboard specifically?

Esa Kaikkonen, CEO, Metzaboard: This is something that will be, of course, based hypothesis that we have two major shutdowns. One is investment related in where we have a five weeks shutdown in Simpele and then Husum annual maintenance break. Those are taking a toll on our capacity rates this quarter. And I think that the level of the production, precise numbers we cannot give because we will be following the order inflow as well, and we will not be compromising our cash flow actually targets currently. So really difficult to estimate currently the exact amount of the production.

Linus Larsson, Analyst, SEB: Okay. Sorry, maybe if I rephrase that. If you look at how should we say it, maintenance or planned maintenance neutral, if that’s if you see what I mean? I mean more from a neutral point of view, do you see rising operating rates or falling operating rates from the second quarter level?

Esa Kaikkonen, CEO, Metzaboard: The million dollar question, I would say, because it is like that now we have to see that what will be the discussions with the customers in The U. S. And how this tariff situation will be resolving these uncertainties that we have currently in that market. Currently, it has a significant impact on our order inflow. So if you take rolling four, five weeks, so it has an, let’s say, significant impact negative impact on our order inflows.

At the same time, I’m positive that we can turn this trend also that it can turn pretty fast also when this when the deal is sealed and the decisions are finally made and kind of a table has been settled. So after that, I expect that the order inflow is also catching up. So difficult to say Q3 order inflow.

Linus Larsson, Analyst, SEB: No, that’s very helpful. Thanks a lot.

Henry Sverholm, CFO, Metzaboard: The

Moderator: next question comes from Robin Santaverta from DNB Carnegie. Please go ahead.

Robin Santaverta, Analyst, DNB Carnegie: Yes. Thank you very much. If I start with the question of continuation from Inus’ question related to North America. Looking at the deliveries in the quarter, roughly 100,000 tons of paperboard there. How much of those 100,000 tons did you already ship before the tariff increase?

Is that half of that or two thirds? I’m trying to sort of understand where the profitability in a way hit or impact comps? Because I guess you have some inventory there sitting and some of the deliveries of or sales in Q2 were actually paperboard that you had already shipped before the tariffs increased.

Esa Kaikkonen, CEO, Metzaboard: I think that the specific answer, will be handing over to Hendri, but taking the first, let’s say, steam out of this question because we really hadn’t, of course, landed stock there, common stock and then made to order stock as well. And that was all, let’s say, or partly tariff free. And then we had to postpone some of the shipments, of course, and some of the production because of the order inflow. But maybe I will be handing over to Hendri, if you have more specific information on these numbers.

Henry Sverholm, CFO, Metzaboard: Well, there’s not much to add to that. So it was a mix of both tariff free and then also production that already included the tariffs. So but we don’t disclose the more detailed numbers.

Robin Santaverta, Analyst, DNB Carnegie: But can I ask, when you say that the order inflow has been weak in the past four to five weeks, is that now reflecting in a way the price increase of your products? So essentially, when during the quarter did you raise the kraftliner and falling box for prices? Was it five weeks ago when in a way the the sort of the what you sell there is is carries the tariffs or was it before?

Esa Kaikkonen, CEO, Metzaboard: Well, in that sense, it also depend on the timing and everything, depend a bit on the discussions with the customers. So we are not operating with our customers based on the one fits for all principles, but we had a dialogue, of course, especially with the FPP customers, and it is a customer specific question, and it’s difficult to say that what was exact timing of different price increases. But we did those price increases immediately when the tariffs came in. That was the basic principle, but then there were several exceptions as well.

Robin Santaverta, Analyst, DNB Carnegie: I understand. Thanks. And can I just ask related to Q3, now you look at roughly unchanged delivery volumes Q on Q, but then you state that over the past five weeks, the order intake has been quite weak in The US? Do I understand it correctly that you expect this 15% now, the decision in a way to reduce uncertainty and increase order inflow? Or do you expect to replace sort of those U.

S. Volumes in other markets?

Esa Kaikkonen, CEO, Metzaboard: In this time schedule, Robin, I think that it’s really difficult to so fast, swiftly actually allocate the new resources in this situation. Course, supplydemand balance So is challenging, it’s not so easy in the current circumstance to do that fast, swift movements on a volume allocation. I would say, well, also in there, so in our view, we’ll be prioritizing our cash flows, and that will have an impact and toll in the EBIT that we have. And that is something the compromise we’re taking at this time because of the uncertainty as long as we are seeing that the order inflows recovers.

Robin Santaverta, Analyst, DNB Carnegie: I understand. And can I just ask on the big profitability improvement program? It seems to be like exceptionally big number. I looked at the past four quarters, you generated some €150,000,000 in EBITDA and then 200 plus 30 from my company specific items. I assume that 200 plus EUR 30,000,000 from Taco and Kira does not assume an improving market environment.

So then it would be 150% increase in EBITDA simply from company specific items. Very, very seldom in this industry we see those kind of improvements and only in two years. Is this a net number, the $230,000,000 or a gross number? Because quite often when you cut cost and cut production, you also lose a little bit of top line and you might end up getting some other costs and so forth. So this is a net number or a gross number?

Esa Kaikkonen, CEO, Metzaboard: Well, I can you, Henri, elaborate this a bit from your perspective? You’re looking at the numbers in more in details.

Henry Sverholm, CFO, Metzaboard: Yes. I think as you defined it, I think this is more like a net number. So this is €200,000,000 net on top of the current profitability level.

Esa Kaikkonen, CEO, Metzaboard: But then having said this, I think that the €150,000,000 EBITDA level is not our run rate currently, so that is must be corrected in a way. It’s the current yes, business business, let’s say, performance level that we are aiming to improve.

Robin Santaverta, Analyst, DNB Carnegie: I understand. And just quickly checking production platform, we can see you’re not producing at capacity and we understand, for example, Fusum is a quite efficient production facility, albeit a lot of that goes to the The US. One would think that it could be smart to, you know, close more capacity and just run up the the capacity utilization into more efficient mills and by that improving profitability. So does this program include potential closure of production capacity in paperboards

Esa Kaikkonen, CEO, Metzaboard: overall? Yes. Think that most of the producers these days have a capability on the multi mill concepts. And I think that, that is exactly what we are doing as well. And that makes us partly strong as well.

And I think that we can shift some of the businesses from the other mills, smaller mills to a bigger mill as well to some extent. But there are of course some quality issues and some structural issues in our offering that hinders us to do it in full. And that is something that, of course, is an issue that we have to elaborate further. So it was really good point that you made. But this plan is not actually including any closures.

That’s I’m stressing this. There is a weaker capacity in the market than our capacity. Our capacity is up to date and, let’s say, modern and efficient.

Robin Santaverta, Analyst, DNB Carnegie: The

Moderator: next question comes from Samu Wilhomson from Nordea Credit Research. Please go ahead.

Samu Wilhomson, Analyst, Nordea Credit Research: Hi and thank you for taking my question. I had two questions regarding the cash flow. As already mentioned here a few times, your measures seem indeed quite ambitious. And the working capital release of €150,000,000 for the next six months sounds also quite massive. You mentioned focusing on inventory management, but can you give more details on what actual measures you are taking place in terms of inventories given the relatively short time frame?

And how feasible you see that you will be able to reach that target by the end of this year?

Esa Kaikkonen, CEO, Metzaboard: Well, I will be handing over to Hendri as well regarding this for further remarks. But from my part, looking at the working capital and releasing the or driving down the inventory levels is part of this plan that we are doing. And we are not going to compromise our service capability either. So I think that this is something that we have to do in a diligent collaboration with the customers as well. And still, based on the analysis that we have done and based on the project so far, we are confident that we can release this €150,000,000 and most of that comes from the inventories.

Is there something that, Henri, you can?

Henry Sverholm, CFO, Metzaboard: No. I mean, that’s exactly correct. And as we indicated in the near term outlook that we will also take a profitability hit by taking sort of material production curtailments, and that is, of course, then serving the purpose of reducing the inventory levels. And of course, we need to adjust also, it’s not only paperboard, but also our pulp inventories to the current market situation, which is still very soft in pulp side. So we are looking at all these elements.

And yes, it is ambitious, but it is reachable.

Samu Wilhomson, Analyst, Nordea Credit Research: All right. Thank you. Then on the CapEx side, I understand if you aren’t able to provide any specifics, but the €60,000,000 CapEx in Simpele, given that the investment is expected to be completed in the second half, how much of that initial CapEx we should expect by the end of this year, given that you said that it will be distributed 24,000,000 and €26,000,000

Esa Kaikkonen, CEO, Metzaboard: Can you hand it?

Henry Sverholm, CFO, Metzaboard: Yes. So the simple CapEx will be this year roughly €40,000,000 some CapEx already realized last year, so say, let about €10,000,000 and then the remaining will happen next year. So most of the investments, so two thirds, will occur this year.

Moderator: There are no more questions at this time. So I hand the conference back to the speakers.

Katis Unstrom, Investor Relations, Metzaboard: Okay. We do have a couple of questions here in the chat function. So let’s start with the capacity closures. You guys already answered to that, that this program does not include any. But if not, how do you view the current supply demand balance in FBB in Europe?

And do you see need for capacity closures going forward?

Esa Kaikkonen, CEO, Metzaboard: Well, I cannot actually answer on behalf of other companies, of course, but I was mentioning that our capacity is well invested. They’re up to date. They’re modern. So we will be actually, of course, trying to push the most out of the value that we have in this value chain. And I think that we can still there is in all, let’s say, industries, there is an overcapacity, and we shouldn’t be kind of going to that kind of a discussion all the time that we have overcapacity.

We have to just push forward and leverage the market because there are other materials in Packaging side that we can take the market away from.

Katis Unstrom, Investor Relations, Metzaboard: Fair enough. And then the question related to quarter on quarter bridge. This probably for Hendri. So if we look at third quarter against the second, how much is the maintenance headwind and how much is FX benefit?

Henry Sverholm, CFO, Metzaboard: Yes. So normal maintenance mainly related to Husum Integrate annual maintenance break is €10,000,000 on top of the Q2. But then, of course, we have to remember that also in Q2, we had the chemi reparations of also around €10,000,000 so that is netting each other out. And the second question was

Katis Unstrom, Investor Relations, Metzaboard: FX benefit.

Henry Sverholm, CFO, Metzaboard: FX benefit. At the moment, we estimate that to be in the region of €10,000,000 Okay.

Katis Unstrom, Investor Relations, Metzaboard: And then well, we have not given this in our guidance, but the question goes that what are you seeing on your pricing trends? This is again third quarter against second quarter.

Esa Kaikkonen, CEO, Metzaboard: Yes. I think that roughly, I think that 40% of our contracts in the FVB are annual contracts. We will be seeing that price trend pretty soon then when we are concluding the new, let’s say, contracts with the customers for the next year. So that will be setting the price trend for FBB. It’s not yet there.

We don’t see it. Will be working with each of the customers separately and then pushing our value proposition forward. Currently, the prices in Q2 were in actually an increase in local currencies, but then the mix effect and also mix effect and then also this fluctuation of currencies took away that, let’s say, tailwind that we had through those.

Katis Unstrom, Investor Relations, Metzaboard: Okay. Good. Well then there was the question about The U. S. Tariffs.

I think that we already went through those. Then how much one off costs do you expect to book from the €200,000,000 profit improvement program?

Esa Kaikkonen, CEO, Metzaboard: That’s also a good question, I would say. One offs, we’ll be analyzing also, of course, those. And depending on, for instance, on those, let’s say, investment projects that we have in the pre engineering phase, including the ERP, there might be some, but nothing substantial, let’s say, looking at our balance sheet.

Katis Unstrom, Investor Relations, Metzaboard: Yes. And then what’s the EBIT impact from the Symbele stop in third quarter versus second quarter?

Henry Sverholm, CFO, Metzaboard: Yes. So we are not separating that impact separately. So my previous answer covers also the simple investment shutdown.

Katis Unstrom, Investor Relations, Metzaboard: Okay. And still sticking into third quarter, could you please provide some clarity on the pulp quarter on quarter effects?

Esa Kaikkonen, CEO, Metzaboard: Well, the effects as such, the direct effects, we see that the market pulp market is still deteriorating and it has an impact to the price levels And that will have an impact, of course, to our profitability, partly through our own, let’s say, market pulp, but also through Medsafibre. So we have this impact. But the magnitude of that, Henri, do you want to?

Henry Sverholm, CFO, Metzaboard: Nothing to add to that.

Esa Kaikkonen, CEO, Metzaboard: Nothing to add? Okay. Fair enough.

Katis Unstrom, Investor Relations, Metzaboard: Okay. Good. I think that we are done with the chat questions. I think that there’s still one question online. Is that correct?

We can take that in here.

Moderator: The next question comes from Robin Santaverta from DNB Carnegie. Please go ahead.

Robin Santaverta, Analyst, DNB Carnegie: Yes. Thanks for taking an additional or two additional questions. So one, I I had, related to pulpwood costs. Some of your peers are speaking about, some relief finally on that side, particularly in Sweden, but perhaps also a bit in Finland. What are you seeing in terms of spot pricing?

So what do you I know there’s a lag in the P and L impact, but what are you seeing in terms of pulpwood cost in H2 this year?

Esa Kaikkonen, CEO, Metzaboard: Okay. Pulpwood this year, we actually or the Metze Group disclosed some information on this one and said stated that the pulpwood and the wood cost, generally speaking, has been reducing somewhat. And we can see it also from the statistics. So it is decreasing, but the magnitude to and predict the future, very hard to say that. It depends on the supply and demand and how much curtailments there will be in the pulp mills and sawmills that will be depending the future outlook.

Robin Santaverta, Analyst, DNB Carnegie: Thank you. And the second question, I might have missed this if you already answered, but for Hendri, any kind of rough sort of indications about CapEx in 2026, 2027? Is it roughly at the same level as this year more or less?

Henry Sverholm, CFO, Metzaboard: Yes. Well, Robin, I have to be a bit vague here at this point because we have this review of the pre engineering projects during the Q3, so we’ll be probably able to give later this year guidance going forward. But obviously, you remember that our maintenance CapEx is between 50,000,000 to €60,000,000 and we only have some €10,000,000 left from Simpele investments. So that kind of the base load from those is fairly low. But then, of course, we’ll get back to the more sort of detailed guidance later on this year.

Robin Santaverta, Analyst, DNB Carnegie: Perfect. Thank you.

Katis Unstrom, Investor Relations, Metzaboard: Okay. It seems that there are no further questions on the line, none in the chat function either. With that, we’ll conclude the Q and A session and or have your presentation. Please feel free to reach out with any further questions. We are happy to continue the conversations at Investor Relations.

Thank you all for joining us today and for your very active participation. We wish you a good continuation of the week and an enjoyable rest of the summer.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.