Earnings call transcript: Metsä Board Q3 2025 reveals market challenges

Metsä Board reported a challenging third quarter for 2025, with a loss in its comparable operating result and a decline in sales. The company posted sales of €441 million, down from the previous year, and a comparable operating loss of €46 million. Despite these setbacks, the company’s stock surged by 8.18% following the earnings announcement, closing at €2.88. According to InvestingPro analysis, the stock appears undervalued at current levels, with technical indicators suggesting oversold conditions. This positive market reaction suggests investor confidence in Metsä Board’s strategic initiatives to counteract current market difficulties.

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Key Takeaways

• Metsä Board experienced a significant operating loss in Q3 2025.
• Sales declined to €441 million, reflecting market pressures.
• The stock rose by 8.18% post-earnings, indicating positive investor sentiment.
• The company is implementing a cost-saving program to improve future performance.
• Market-related production curtailments are expected to continue.

Company Performance

Metsä Board’s performance in Q3 2025 was marked by a decline in sales and a shift from profit to loss in its operating results compared to the same quarter last year. The company’s financial results were impacted by lower market pulp prices, reduced paperboard delivery volumes, and weaker contributions from Metsä Fibre. Despite these challenges, Metsä Board maintained a positive cash flow of €122 million, demonstrating its ability to manage liquidity effectively. InvestingPro data shows the company maintains strong liquidity with a current ratio of 2.1, while having maintained dividend payments for 13 consecutive years, highlighting its financial resilience.

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Financial Highlights

• Revenue: €441 million, down from the previous year.
• Comparable operating result: Loss of €46 million versus a profit of €42 million in Q3 2024.
• Operating cash flow: €122 million.
• Net debt: €338 million.

Earnings vs. Forecast

Metsä Board’s earnings per share (EPS) for the quarter were not specified, but the company had forecasted an EPS of -€0.1073. The revenue forecast was €450.29 million, slightly above the actual sales of €441 million. The results indicate a slight miss in revenue expectations, although the stock’s positive reaction suggests that other strategic factors might have influenced investor sentiment.

Market Reaction

Following the earnings release, Metsä Board’s stock rose by 8.18%, reflecting investor optimism. The stock’s price increase is notable, especially given the company’s recent challenges. Currently trading at €3.36, analyst consensus suggests an upside potential of 11%, with targets ranging from €3.26 to €3.61. This movement, combined with the company’s Fair Value assessment from InvestingPro, indicates potential for further recovery in investor confidence.

Outlook & Guidance

Metsä Board did not provide specific operating result guidance for the upcoming quarters. However, the company anticipates continued market-related production curtailments and expects lower wood costs in Finland and Sweden from 2026. InvestingPro analysis shows the company maintains a "Fair" overall financial health score of 2.12 out of 5, with particularly strong performance in relative value metrics. Metsä Board is focusing on cash flow and cost competitiveness, with a strategy update planned for Q1 2026.

Executive Commentary

CEO Esa Kaikkonen emphasized the need for adaptability in a challenging market environment, stating, "The market environment remains challenging, and we must improve our ability to adapt." He also expressed confidence in the company’s long-term strategy, particularly in fresh fibre packaging materials, which he believes will be a winning concept.

Risks and Challenges

• Continued market-related production curtailments could affect future sales.
• Overcapacity and subdued demand in the European paperboard market.
• U.S. tariffs on folding boxboard may limit market penetration.
• Stagnant global demand for pulp, particularly in China.
• Potential job reductions as part of cost-saving measures.

Q&A

During the earnings call, analysts inquired about the impact of U.S. tariffs and the company’s ability to pass on these costs to customers. Metsä Board addressed concerns about mill capacity and market positioning, highlighting its focus on commercial excellence in key segments such as food and healthcare. The company also discussed potential market share growth opportunities in packaging, despite current challenges.

Full transcript - Metsa Board Oyj B (METSB) Q3 2025:

Katri Sundström, Investor Relations, Metsä Board: Good afternoon and welcome to Metsä Board’s January-September interim report webcast and conference call. My name is Katri Sundström and I’m responsible for Investor Relations at Metsä Board. The presentation will follow the usual format. CEO Esa Kaikkonen and CFO Henri Sederholm will present the results, after which we will open the conference call for questions. You can also submit questions via the chat function, and I will present them to the management after we have taken the questions from the line. Please note an important reminder as today’s presentation may contain forward-looking statements. We are ready to get started. Thank you for joining us today, and I will now hand over to Esa.

Esa Kaikkonen, CEO, Metsä Board: Thank you, Katri, and good afternoon on my behalf as well. Before we move to the Q3 results, let’s take a moment to look at the key themes shaping our actions right now. First, the market environment remains challenging, and this continues to put pressure on our business. Our recent financial performance underlines the need for decisive measures. To address this, we have launched a comprehensive cost-saving and profitability improvement program with around 350 different initiatives. I will return to this later in the presentation. At an early stage of the transformation, we are placing strong emphasis on strengthening cash flow. In Q3, we succeeded exceptionally well. Operating cash flow reached €122 million. For the time being, we are updating our strategy to unlock long-term growth and value creation as well. Together, these steps demonstrate our commitment to adapting and acting decisively for a stronger future.

Strong competitive advantages give us a solid foundation, the same strengths that have made us a leader in high-quality packaging solutions. First and foremost, our people, highly skilled and deeply committed to Metsä Board’s success and continuous development. We have also longstanding customer relationships built on the trust and the strong performance of our paperboards, supported by a wide range of services. Our production is backed by decades of expertise, and our quality consistently earns top ratings. Customers also value our high sustainability standards and transparent value chain. Together, these strengths form a powerful platform for transformation and long-term growth and value creation. Let’s now turn to our results for January to September. Starting with an overview of the third quarter of 2025.

Profitability was in red and impacted by low pulp prices, peak maintenance and investment shutdowns, as well as market-driven production curtailments, which were due to various factors, including U.S. imports’ tariffs that reduced folding boxboard orders. The Husum integrated mill was hit hardest as it serves U.S. customers and includes our only chemical pulp mill. Paperboard deliveries declined versus Q2, reflecting the continued weak demand. The transformation program was implemented to restore competitiveness and ensure long-term profitability. As already mentioned, cash flow improved significantly during the quarter, driven by a substantial release of working capital. After the review period, we initiated change negotiations covering all of our employees. These negotiations may lead to a reduction of up to 315 positions, including approximately 155 in Finland. Of course, these are difficult but necessary measures to align our core structure with the market reality.

Finally, the modernization project at Simpele has been completed, and the upgraded board machine is now in operation. This is a very good achievement. This investment marks significant milestones in product performance and supports our transition towards fossil-free production. The business development, starting with the folding boxboard. The presentation format is a bit different than earlier. I hope that it creates more transparency in our business. In Europe, demand has remained subdued while supply has increased, keeping capacity utilization below the long-term average. In the U.S., a 15% import tariff came into effect in early August. Folding boxboard can be substituted with heavier, locally available grades, which has limited our ability to fully pass on the tariff impact. The price increases have only been partially successful. U.S. delivery volumes declined already in Q2 compared to the previous quarters and have not yet recovered.

Overall, year-to-date delivery volumes for folding boxboard are down by 9%, while average euro prices have remained stable. Here, the weaker dollar has been offset by the partial price increases. The white kraft liners. In Europe, demand has been stable but moderate for both coated and uncoated grades. In the U.S., our sales focus is almost entirely on coated white kraft liners, and this product is difficult to substitute, which has allowed us to implement price increases corresponding to tariffs rather well. Delivery volumes, as well as average euro prices, remained fairly stable. Moving on to the pulp. Weak consumer sentiment continues to weigh on market pulp demand in both Europe and China. The removal of tariffs on pulp imports to the U.S. has slightly reduced global trade uncertainty. Prices for softwood pulp remain depressed across all regions, with China approaching unsustainable levels for many producers.

Production has been adjusted in our group as well to reflect lower demand. Metsä Fibre’s Joutseno mill has been curtailed since early summer. Looking at the volumes, Metsä Board’s pulp and PCTMP deliveries declined by 13% year on year. Metsä Fibre’s strong development is largely explained by the explosion at the Kemi mill in 2024, which significantly impacted their delivery volumes then. Yet both companies are operating clearly below the capacity. I will let Henri go through the financials. Thank you, Esa, and good afternoon. In 2025, our sales have declined slightly each quarter, following the overall volume trend. Q3 ended at €441 million, bringing the year-to-date figure to approximately €1.4 billion. Profitability, as has been mentioned several times, remains at a highly unsatisfactory level. As we guided in our previous earnings release, the comparable operating result was expected to deteriorate.

For Q3 and for the entire reporting period, we posted an operating loss of €46 million. Let’s take a closer look at the breaches. Comparable operating result moved from €42 million in Q3 2024 to a loss of €46 million in Q3 2025. While FX impacts, including hedging, provided some support, these were heavily outweighed by several negatives: lower market pulp prices, weaker contribution from Metsä Fibre, reduced paperboard delivery volumes, and market-related production shutdowns. In addition, last year’s gains from the sale of unused emission rights did not recur this quarter. It’s also important to note that Q3 2024 included €23 million in insurance compensations related to the gas explosion at Metsä Fibre’s Kemi bioproduct mill in spring 2024. Looking at the full review period, the comparable operating result decreased from €73 million in 2024 to a loss of €46 million in 2025.

Positives included slightly higher paperboard prices in local currencies and lower chemical costs. On the negative side, we had lower market pulp prices, which also lowers paperboard’s inventory value. Weaker result share from Metsä Fibre, reduced delivery volumes, and market-related production shutdowns. Costs for wood and logistics increased, as did maintenance costs and depreciations. The gain from the sale of unused emission rights was €15 million lower this year compared to last year. Next, let’s look at an area where we delivered real strength: cash flow. Along with our transformation program, we set a target to release €150 million of working capital. We performed exceptionally well against this goal, releasing a total of €120 million in operational working capital during Q3. This was achieved mainly by curtailing production, which lowered inventory levels, but also through financing arrangements related to payables.

Cash flow from operation and cash flow after investments were clearly positive in the third quarter. At the end of the period, our total interest-bearing debt stood at €551 million, and net debt was €338 million, which is clearly down from the levels seen in the first half of the year. Liquidity remains strong at over €400 million, split roughly 50/50 between liquid assets and unused revolving credit facilities. After the review period, we renewed our previous RCF with a new €250 million sustainability-linked facility, further strengthening our financial resilience. Metsä Board continues to hold an investment-grade rating from both Moody’s and S&P. It is worth noting that the elevated leverage, clearly above our target level of 2.5, is largely due to weak profitability. Now back to you, Esa.

Henri Sederholm, CFO, Metsä Board: Thank you, Henri. Before moving on to the outlook, let’s take a quick look at our investments. The major investment projects are now behind us, and our focus is to make the most of the recent capacity expansions in Husum and Kemi. This means sharpening our sales and marketing efforts, which play a significant role in our transformation. In October, we also completed the approximately €60 million investment to modernize the Simpele paperboard machine, as I was referring to earlier as well. Our estimate for this year’s CapEx is approximately €100 million. We have also decided to discontinue all our investments in the pre-engineering phase, as their expected returns would not meet the targets in the current market environment. In addition, the Metsä Group-wide ERP project has been put on hold for the time being. In today’s challenging and volatile market environment, our priority is to safeguard our cash flow.

For now, we will not give an operating result guidance. Yet, we aim to provide a comprehensive and transparent view of the key market trends and company-specific factors, ensuring that the markets have the best possible understanding of what drives our business and outlook. First, let’s look at the operating environment and what we have expected for the next three to six months. In paperboard, weak consumer sentiment and U.S. tariffs continue to make sales development unpredictable. In Europe, overcapacity adds pressure, and in North America, demand is expected to stay weak. Global pulp demand remains stagnant as well. In Europe, production is further being limited by high raw material costs and weakening U.S. dollar. Lower wood costs in Finland and Sweden should support profitability from 2026 onwards.

We have long avoided negative FX impacts through hedging, but these will start to show now, slightly in Q4 first and more clearly early next year. Let’s look at the Metsä Board-specific items and their impacts on the fourth quarter. First, cash flow-based steering continues. Market-driven production curtailments are thus expected at all mills, continuing to negatively impact profitability. This has a particular impact on our Husum integrate. Operating cash flow is expected to remain positive. Paperboard delivery volumes are expected to decline due to normal seasonality. On the positive side, we’ll have less planned maintenance, although the ramp-up at Simpele may involve some production uncertainty. Employee costs will also increase from Q3 based on seasonality. Finally, there is a possibility that the final insurance compensations related to the 2024 Kemi bioproduct mill accidents will be recognized in the Q4 results.

Now, a few words about the strategic directions and the operating environment. The strategic direction remains unchanged. We continue to focus on growth in fresh fiber-based packaging. At the same time, we have started updating our strategy to reflect the changing market environment and our future ambitions, with an update planned for the first quarter of 2026. While the long-term direction is clear, our immediate priority is improving the cash flow and profitability, as we have been stating many times earlier. To achieve this, we have launched now a cost-saving and profitability improvement program targeting an annual EBITDA run-rate increase of €200 million by the end of 2027 and a €150 million release in working capital. In the early phase, results will be primarily coming from cost savings, while actions to drive profitability growth will follow as the program progresses.

Next, a bit deeper look into the program’s content and progression. First, we need to be fit for the future, building a leaner, more competitive cost base aligned with the current market realities. We can drive margin expansion and accelerate growth through complexity reduction and commercial excellence. How we are doing this: On fixed costs, we are reducing personnel expenses, as we were referring to the statutory negotiations already earlier. More saving potential is expected through Metsä Group’s statutory negotiations. In procurement, we are driving savings through logistics improvements, while route and mode optimization are reducing external spend in maintenance and ICT. On mill productivity, we are, for example, optimizing pulp and chemical use, reducing complexity, and improving energy efficiency. Finally, in commercial excellence, we are sharpening our focus on value-creating segments such as food, food service, and healthcare, and regaining share in Europe and North America.

The commercial strategy developed in Q3 is now moving into implementation. While these targets are ambitious and challenging, we are confident in our ability to achieve them. As we have already mentioned, our efforts to release working capital and strengthen cash flow have been highly successful. Most of the release has come from the inventory reductions, but we have also seen positive development in payables and receivables. Going forward, we’ll be maintaining strict discipline on working capital, and cash flow will remain a top priority in the coming years. To summarize, the market environment remains challenging, and we must improve our ability to adapt. We deliver everything that is in our own hands. Profitability is unsatisfactory, yet we are supported by the strong financial position that we have. Our transformation has delivered already promising early results, and maintaining this progress and momentum requires further capital discipline.

The cash flow improvement achieved in Q3 was a good performance, and as part of our measures, we discontinued investments in the pre-engineering phase. Where we do focus next, we continue to steer the business with a strong focus on cash flows and customer centricity, ensuring resilience and agility in a volatile market environment. Operationally, this will likely mean that market-related production curtailments will continue towards the end of the year. At the same time, we are driving our transformation forward with strong momentum and commitment, and reporting on financial impacts will start from Q4 2025 onwards. Finally, the planned work on our strategy update is progressing, and we plan to share the revised strategy with you during the first quarter of 2026. That concludes our presentation part, and we are ready now to take your questions. Operator, please go ahead and open the lines.

Conference Call Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Linus Larsson from SEB. Please go ahead.

Thank you very much. Hello, Esa and Henri. Good day, everyone. Maybe starting off with your Americas business, shipments amounted to some 100,000 tons in the quarter. How much of that was subject to tariffs, and what was the total tariff cost in the quarter? Second to that, how much of that tariff cost could you cover by price increases, and how much of that cost did you just have to carry yourself?

Esa Kaikkonen, CEO, Metsä Board: Please, Henri, if you can. Yeah. If I start, I can say that the majority of the volumes was under tariffs of the volumes that we delivered during this quarter, but unfortunately, we don’t publish those exact amounts of tariffs.

I’m just thinking because, as you said in the presentation, the tariffs only hit sometime into August, and I know you also had some inventory going into this tariff situation. That’s why I wondered, you know, if it was, and you also sell to other countries than the U.S. for that matter. That’s the reason for my question.

Yeah, we appreciate the question, but we are not going into the details. There are, of course, currency impacts as well. We have had a headwind on the currencies a bit as well, and then this tariff issue and let’s say how much those tariffs are impacting our warehouses and everything, it would be very, very complicated to open all of this. Maybe the big picture in here is that, as we have been saying regarding the prices, the prices in the market of fresh fibre paperboards, they have been stable. In the U.S., we have gotten, let’s say, price increases that are bigger in the coated kraftliners than in the fresh fibre paperboards, and we have been compensating this partly, but not the bigger.

Let’s say that we have been, in fresh fibre paperboards, we have been able to push the prices up on local currencies to some extent, but not covering the full effect of the tariffs. In the white kraft liners, most of the tariffs have been absorbed in the prices, and we have been able to push those pricing in the form of price increases further to the market. I hope that this answers the question.

Yeah, that’s helpful. Now we’re sometime into the fourth quarter, I’m guessing, but I’m thinking probably you’ve exhausted the inventory that you had. You have a full quarter of tariffs, whereas in the third quarter, it wasn’t the entire quarter. Are you expecting a step up in tariff costs in the fourth quarter compared to the third quarter, ending up with you rather than your customers? Is there an incremental burden carried by yourselves Q4 compared to Q3?

I would say that if it would have been substantial in comparison to this quarter, we would be guiding that through in our company-specific items. It’s not substantial. There is some kind of effect, or Henri can maybe add on this one, but there will be an impact, but it’s not substantial if you take the overall, let’s say, results of the company.

Henri Sederholm, CFO, Metsä Board: Yes, I agree. Yeah.

Okay, that’s great. A different set of questions relating to downtime, maybe starting with Metsä Fibre, a very challenging quarter apparently. Metsä Fibre also took a lot of planned market-related downtime in the third quarter. What’s the curtailment schedule looking like in the fourth compared to the third quarter in Metsä Fibre and in Metsä Board, please?

Esa Kaikkonen, CEO, Metsä Board: In a production curtailment market-related situation, I think that we are not expecting big changes in Metsä Board’s side. In Metsä Fibre’s part, Joutseno has already been standing since spring, and we are not assuming that it will be starting up anytime soon. It will be started before the winter arrives, but we don’t have an exact time for that currently.

Okay, so you’re saying that the curtailment schedules look pretty similar Q4 versus Q3?

Yes.

Okay, thank you. That’s very helpful.

Conference Call Operator: The next question comes from Robin Santaverta from DNB Carnegie. Please go ahead.

Yes, thank you very much. Now, you’re the largest producer of folding boxboard in Europe. If I look at the markets right now, they seem to be quite significantly oversupplied, potentially getting even worse with Stora Enso launching new capacity in Oulu, and with the problematics in North America where a lot of European guys cannot sell normally in North America. It seems as quite a challenging market. I was wondering, I guess you’re now discussing pricing for folding boxboard Europe 2026. Could you shed some light on those discussions? I mean, you’re deeply in the red here. You will have quite significant negative effects, sort of impact on earnings in 2026. Everything I see and read relates to quite significant declines in folding boxboard pricing going into 2026. What are you sort of, what is happening in the market when it comes to pricing?

What kind of measures are you taking to make sure that prices would hold up better than the current speculations?

Esa Kaikkonen, CEO, Metsä Board: Thank you, Robin, for the question. I think that that’s very topical, I would say. In a way, seeing clearly that the market, the same way, at the same time, as I was referring, and we were referring to in our quarterly results as well, the biggest impact on the market is currently in Husum integrate. That is the concern that we have mostly currently at hand. We have been acting pretty swiftly to actually correct those as well. This transformation program measures also what comes to the cost cutting is targeted. A big part of those are targeted into our Husum integrate. We are answering to these pressures through, of course, being more cost-competitive in the market, of course. It goes through the whole mill fleet, but especially in Husum, which is the most suffering on the current situation, the biggest mill and biggest integrate that we have.

Seeing what comes to the annual negotiations, we have roughly 40%, a little bit less than 40% of our volumes are under the annual contracts. We are in the early stage of those discussions currently. We will not give a forward-looking view in our prices, but the market situation, of course, is having an impact on the overall sentiment, as you were referring to. I will not kind of go into the negotiations that much because we don’t have any news to break at this point of time.

I understand. Thank you very much, Esa. I was just wondering, would it make sense for you and for Stora Enso or maybe a few other Nordic producers to simply make sure that your own ship is very tight and simply close the weakest assets? It seems to me it’s not a question of, sure, there’s some cyclicality included, and the markets will be some, I mean, is it then 2026 or 2027? There will be better demand at some stage. It seems to be a case where the capacity utilization is getting so low that the temporary curtailment of production is not enough. Are you looking at your weakest mills? In order to not get into this stock of problematics where all of a sudden we realize that you have been running a mill on losses for two years, would it now be smart?

We have the big cost-cutting program to just make sure that you have a very tight sort of competitive production. That to me would then also include a closure. Is that at all what you are looking at, or is it just to try to be more efficient and then temporarily curtail production?

Robin, that’s again a very, very good question. I think that we have been discussing this earlier as well. If you’re looking at our mill fleet, it’s well invested. We have really competent people and a really committed customer base in our mills as well. We have just closed the Taco mill, and we have been circulating our products and customers in other mills, very, very successfully. I’m not concerned. The situation currently that we have at hand is more of a U.S. problem on the FPB side than a domestic issue for us. We believe that we have a kind of a competitive and really specialized and quality-wise excellent mill fleet to answer the customer needs that we have.

Thank you, Esa. That is very clear. Final quick question to Henri. Can you help me with this? Current FX spot rates plus the EBIT impact 2026 ballpark is enough.

I think I also earlier commented about the sort of effective dollar rates that we are seeing as heads. We are for this year at the level of $1.08 roughly. When we get to the spot rates, you will be able to calculate that the 10% change in the U.S. dollar is roughly €60 million. You will get the kind of idea from that.

Perfect. Thank you very much, gentlemen.

Conference Call Operator: The next question comes from Joni Sandvall from Nordea. Please go ahead.

Yeah, thanks. Maybe follow up on the Husum mill. Can you give us a reminder of the ramp-up there? Are you still expecting, you know, are you at full speed there? Correct me if I’m wrong, but were these additional volumes targeted to go to the U.S.? Obviously, I’m asking this because, as mentioned many times, the European market is in oversupply. What to do actually with these volumes?

Esa Kaikkonen, CEO, Metsä Board: Thank you, Joni, for the question. This Husum mill, after the investment that we had of increasing the capacity by 200,000 tons, the capacity is 600,000 tons. It’s a modern new facility and very competitive as well. Of course, at this situation, it was specified predominantly to the U.S. This is, of course, having currently the impact. Just kind of in the ramp-up curve, all of this kind of geopolitical situation has changed rather dramatically and has an impact to our, let’s say, capacity utilization rate. Technically speaking, the mill is excellent. It produces what we are expecting that to produce. In that sense, we have all the capabilities. Currently, of course, we are looking at everything that is at our hands to sell that volume in all of our main markets that we have, meaning Europe and U.S. as well. The most suitable machine is for the U.S. market.

As said, if you’re looking at year on year, the volumes that we have had, the decline of 9%, it’s not that dramatic if you see that we have been in the U.S. market, even where the currency has been 1.6. We have a great belief. While I have been also visiting the U.S., excellent team there, very, very competent team. We have an excellent service concept and reliability, and our customers are appreciating that a lot. I believe that we can turn, when the market sentiment is turning, we can still grow in the U.S. as well.

Okay, that’s clear. I understand that you are starting to give some indication of the run rate in Q4 of the cost savings measures, but could you give any indication of the absolute EBITDA that you are, or how large part of these initiatives you have started from the 350 that you mentioned?

As I said, it’s an early stage in there. Of course, the cost part is something that we will get first our hands at, and this is something that we will be starting to report. Also, this profitability improvement, there are early signs that are promising, but unfortunately, I don’t have numbers currently to disclose to you because we have to verify them and build the audit trail as well in order to give you accurate, good information on those.

Okay, and lastly, about the European ETS scheme, is this now going to phase out during 2026? Could you just remind us of the situation there?

Henri Sederholm, CFO, Metsä Board: Yeah, that is our understanding.

Okay, thanks. That’s all from me.

Esa Kaikkonen, CEO, Metsä Board: Thanks.

Conference Call Operator: The next question comes from Cole Hathorn from Jefferies. Please go ahead.

Thanks for taking my question. Just to follow up on the export volumes to the U.S. on folding boxboard and the white kraft liner grade, am I right in assuming that the majority of the pressures on the folding boxboard side versus the white kraft liner, I imagine you’re probably more likely to have passed on a portion of the tariffs on the white kraft liner side. Could you just remind us, you said 50/50, that’s kind of the goal to split the tariffs. I’m just wondering if wood costs ease into 2026, is that kind of what you’re looking for to also help you on your kind of cost positioning on the folding boxboard machine at Husum? Thank you.

Esa Kaikkonen, CEO, Metsä Board: Yeah, of course, the market is deciding the first question regarding the prices. The market is deciding the market prices, so we cannot state anything on that. Currently, I said that we have been able to push some increases in the prices in the folding boxboard and then white kraft liners. We said that the substantial part of those tariff impacts have been able to push forward, and I suppose that will be the situation also going forward, that we don’t expect that the market could at this stage when the consumer confidence is also rather weak in the U.S. market. We don’t see that we could be capable of actually pushing the prices upwards. The market is not supporting that currently, or as we speak, but let’s see. Of course, we are following it very closely.

Even the small, let’s say, adjustments in the capacity in the U.S., which is rather dynamic, could change the situation, of course, very, very, very fast. This wood procurement side, we have been actually guiding that as of the beginning of 2026, we’ll see the prices decreasing. If you see the statistic prices, which in Finland we are following very, very closely, they have been actually going down by 20% from the peak level compared to the current level. It is significant to step down as well, and those, when we have a standing stock consumed thereafter, will have an impact in the beginning of the year on the wood prices. We are expecting some easing from that as we have been guiding.

Henri Sederholm, CFO, Metsä Board: This is a difficult medium-term question to answer, but you know, post-COVID, I think everyone in the industry reevaluated upwards kind of the medium-term demand trends in packaging. Now, after the cyclical downturn, delays in PPWR, people are kind of reevaluating downwards their longer-term views on kind of packaging growth. How do you think about kind of medium-term demand in folding boxboard? Have you kind of lowered your expectation of growth medium-term? How are you protecting, you know, with the wider European industry, the European business? Are you kind of trying to ensure that we’re not getting imports or at least lobbying some of the trade bodies to protect against imports into the future?

Esa Kaikkonen, CEO, Metsä Board: Yeah, if you start with the, let’s say, the imported flow of goods to the European market, the main market, of course, we see some unhealthy, let’s say, volumes coming to this region because the U.S. has been kind of imposing tariffs, for instance, to Asian suppliers. In that regard, we see this development now in Europe, but at the same time, saying that our customer base and our quality, I think that, and our brand among our customers is so good that I’m not really concerned on the imported volumes that much in those high-value categories that we are. There are issues related to reliability, service levels, the quality, and then the safety of the products, etc., that are, let’s say, that we have been safeguarding throughout this. Also, the value chain and the whole, let’s say, fiber security and everything is in our value proposition.

I would not be too concerned about these imported volumes. Having said this, in a longer term, the market growth, I think that this is like we cannot think in this industry that we would be having the same size of a cake going forward. I think that we have to take market share from different packaging materials, as we have been believing also earlier. It’s really difficult to say what would be the expectations on the short term. We know how it is, the market is not having a tailwind too much, but the medium and long term, I’m really 100% sure that the fresh fibre packaging materials will be the winning concept going forward, taking into account this regulatory framework as well that we have in the U.S., partly, and in Europe particularly. I hope that this answered your question.

I don’t give any numbers on the growth, because we are currently in the phase of, let’s say, making assumptions to our strategy work, and thus I will not be updating our view on the markets in the current circumstances.

Thank you. I understand.

Conference Call Operator: As a reminder, if you wish to ask a question, please dial the pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers.

Katri Sundström, Investor Relations, Metsä Board: Okay, let’s take questions from the chat function. Starting with our decision not to give the result guidance anymore, can you still go through the reasons for that? Why have we discontinued that?

Esa Kaikkonen, CEO, Metsä Board: In these circumstances, it’s, let’s say, impossible to give a profit guidance in that level that we were earlier. The market is so volatile, we see that we’ll have to drive the business through securing our cash flow. In this, let’s say, if you see that, then we really have to see how we are tying our capital, etc. It means that we have to be really agile and act swiftly according to the market conditions, not losing the ability to serve our customers at the same time. Therefore, it’s really difficult. Taking again the pulp market as well, which is actually very volatile currently as well.

Katri Sundström, Investor Relations, Metsä Board: True. Do you see other options on top of profitability improving to support your balance sheet and get closer to the targeted leverage?

Esa Kaikkonen, CEO, Metsä Board: Of course, if you’re looking at our total balance sheet, we have items that during the process of strategy, everything, when you are looking at the strategy process, you’re looking at your balance sheet, of course. Through that, we see that our balance sheet is healthy. We have well-invested mill fleet. We have very good, let’s say, ownership of Metsä Fibre, and they have just invested the two most modern pulp mills in Finland as well. In that sense, I see that our balance sheet is really, really in a good shape in order to actually transform our business going forward as well. I don’t go to the details, of course, at this point of time.

Katri Sundström, Investor Relations, Metsä Board: A bit of follow-up there, do you see any potential divestment opportunities?

Esa Kaikkonen, CEO, Metsä Board: I don’t comment on that, but absolutely everything in a way, when you’re looking at the strategy process, everything in your balance sheet, in your profitability side, how you generate the cash flow, how you win in the market, they’re all the questions that we have to ask.

Katri Sundström, Investor Relations, Metsä Board: Yeah, maybe for Henri, this following, further potential to release from working capital?

Henri Sederholm, CFO, Metsä Board: Yes, absolutely. We still have not reached the $150 million target, so there is definitely potential in the short term, but also in the long term when we start looking into the more sort of slower items that we have there, and also looking into the capital tied in our commercial operations, that’s also very important to look at. We really have good ideas also for the medium term.

Katri Sundström, Investor Relations, Metsä Board: What is the estimated cost of implementing your cost reduction program?

Henri Sederholm, CFO, Metsä Board: At this stage, we are not sort of estimating that cost, and we’ll get back to more details later on.

Esa Kaikkonen, CEO, Metsä Board: Of course, there are always one-off costs when you’re talking about this kind of transformation in relation to the cost cutting. I think that the overarching theme is that we are improving our run rate in structural cost cutting and then the commercial excellence as well.

Katri Sundström, Investor Relations, Metsä Board: Once we have implemented the actions, we will come back on possible one-off costs. It looks like there’s no more questions on the line or in the chat. With that, we’ll conclude our result presentation. If you have any additional questions, please don’t hesitate to reach out to our Investor Relations. We are happy to continue the discussion. Our next earnings release will be the 2025 financial statements coming out on February 5, 2026. Thank you all for joining us today. Wishing you a great autumn and rest of the week.

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