Metsä Board’s comparable operating result in 2025 January–June was EUR 0 million
Metsä Board’s CEO Esa Kaikkonen:
“The demand for packaging materials has been weakened by prolonged low consumer confidence, which has been affected by geopolitical tensions and, more recently, by import tariffs imposed by the United States. The market situation has also tightened with the addition of new capacity. Additionally, Metsä Board's growth and profitability have been burdened by competitiveness issues, primarily driven by high wood raw material costs.
To improve our competitiveness and adapt our cost structure, we are immediately launching a transformation program in cooperation with Metsä Group. The aim is to strengthen profitability and drive targeted value creation. In addition to cost savings, we will sharpen our commercial expertise and leverage our strong competitive advantages. Our long-term customer relationships and motivated personnel create a solid foundation for achieving our goals.
In the second quarter, our comparable operating result fell short of our expectations and was -23 million euros (Q1/25: 23; Q2/24: -1). The most significant deviations from the previous quarter were due to weaker-than-expected developments in the pulp market and stronger-than-planned adjustments in paperboard production, mainly caused by a decline in order volumes resulting from U.S. import tariffs.
Our comparable operating result for January–June 2025 was zero (H2/2024: 31), and cash flow from operations was -38 million euros (H2/2024: -16.5). In addition to profitability, there will be a strong focus on strengthening cash flows in future. We expect cash flow from operations to turn positive during the second half of the year, thanks to disciplined working capital management.
Our financial position remains stable. The ratio of interest-bearing net debt to comparable EBITDA at the end of the period was 2.9, which exceeds our target maximum level of 2.5. The increase was mainly due to weaker profitability and negative cash flow.
At the end of June, we completed the closure of the Tako mill and the efficiency improvement measures at the Kyro mill. These measures will improve our annual EBITDA by an estimated EUR 30 million.
After the review period, we launched a transformation program aimed at improving our annual EBITDA by EUR 200 million by the end of 2027. The program consists of EUR 100 million in cost savings and EUR 100 million in profitability improvement measures - including refocusing sales, simplifying the supply chain, and improving operational efficiency.
Our goal is also to release at least EUR 150 million in working capital by the end of 2025. Furthermore, we are revisiting our ongoing investment pre-engineering projects, including the ERP investment. We will also update our strategy and financial targets in early 2026.
Europe and North America remain our main market areas. Due to the uncertain market situation in the United States, we are focusing our growth efforts and strengthening our services in Europe. We are leveraging our leading position in high-quality fresh fibre paperboards, our sustainability performance, and our expertise in developing efficient, safe, and recyclable packaging solutions.
With our existing strengths and the transformation program now underway, we are well-positioned to return to a path of sustainable growth and create value for all our stakeholders. The transformation is supported by a new leadership structure and new management team appointments effective as of 1 August 2025. In addition to the updated financial targets, we will set specific performance indicators for the transformation program and report on its progress regularly.”
