Metsä Group expects to significantly exceed its target of generating EUR 300 million in permanent annual savings by the end of 2027, following faster-than-expected progress in procurement, logistics, wood supply and fixed-cost reductions.
The Finnish forest industry group launched its cost-savings and profit-improvement programme in July 2025 as weaker demand, pricing pressure and rising costs weighed on profitability.
Metsä initially expected approximately two thirds of the targeted savings to be reflected in its 2026 results, with the full annual benefit achieved in 2027. Following the programme’s progress during the first half of 2026, management now believes the original target will be surpassed.
“Our original target was to achieve permanent annual savings of EUR 300 million by the end of 2027, but it now seems we will significantly exceed that target,” President and CEO Jussi Vanhanen said.
Metsä Group has not disclosed a revised savings estimate.
Procurement and logistics drive savings
More than half of the planned savings are expected to come from purchasing, finished-product logistics and improvements to the wood supply chain.
Measures include improving production efficiency, optimizing raw material and logistics arrangements, streamlining the movement of wood from forests to production facilities, and revising purchasing agreements and operating models.
The remainder of the programme focuses primarily on fixed-cost reductions.
Metsä Group said the benefits began to appear in its results during the first quarter of 2026. The savings are being realized progressively, meaning their full effect will not be visible until 2027.
Some of the gains have been passed on to customers through lower selling prices. Currency movements and changing market conditions have also limited the programme’s effect on reported earnings.
Programme resulted in 790 job reductions
Metsä Group conducted change negotiations across all business areas and corporate functions during the second half of 2025. These negotiations resulted in the elimination of approximately 790 permanent positions, with the largest reductions occurring in Finland and Sweden.
The negotiations have been completed, and the related provisions were recognized as items affecting comparability in the final quarter of 2025.
The savings programme itself does not include permanent or temporary closures of production units. Its focus is on operating efficiency, procurement, logistics, wood supply and organizational costs.
This distinction separates the group-wide efficiency programme from individual production or restructuring decisions made within specific business areas.
Results move closer to break-even
Metsä Group’s comparable operating result improved sharply between the final quarter of 2025 and the beginning of 2026.
The group recorded a comparable operating loss of EUR 57 million in the fourth quarter of 2025. That loss narrowed to EUR 3.8 million in the first quarter of 2026 and EUR 3.2 million in the second quarter.
Management attributed a significant part of the initial improvement to broad-based cost reductions affecting fixed costs, raw materials, wood and other variable expenses. Market prices, delivery volumes, exchange rates and the business mix also influenced the quarterly results.
Comparable EBITDA reached EUR 129 million in the second quarter, compared with EUR 68 million a year earlier. Although profitability improved in most business areas, Metsä Group said the overall level remained insufficient.
The company intends to continue identifying additional savings while protecting production efficiency and its ability to serve customers. Management also cautioned that higher logistics and raw material expenses could erode part of the programme’s benefits.
Higher Oil Prices Could Offset Savings
External cost pressures could offset part of the programme’s benefits. Although approximately 95% of the energy used in Metsä Group’s production is fossil-free, oil prices affect wood transportation, customer deliveries and the cost of several chemicals.
Metsä Group estimates that an oil price of USD 100 per barrel would increase its annual costs by approximately EUR 200 million compared with a price of USD 70. The group linked the risk to continued uncertainty surrounding the Strait of Hormuz.
Metsä Group is a Finnish forest industry company owned by approximately 90,000 forest owners through its parent, Metsäliitto Cooperative. Its activities include pulp, paperboard, tissue and greaseproof papers, wood products, and wood supply and forest services. The group reported sales of EUR 5.8 billion in 2025 and employs approximately 8,800 people.
