Metsä Board Reports Improved Second-Quarter Profitability as Transformation Programme Advances

Metsä Board reported improved second-quarter profitability for the period ended June 30, 2026, as higher paperboard delivery volumes, ongoing cost-saving measures and progress in its transformation programme helped return comparable operating profit to positive territory despite continued weakness in the pulp market and higher logistics costs.

For the first six months of 2026, sales were EUR 825.6 million, down from EUR 940.9 million in the corresponding period of 2025. Comparable EBITDA totalled EUR 47.0 million, representing 5.7% of sales, compared with EUR 57.3 million or 6.1% of sales a year earlier. EBITDA amounted to EUR 39.8 million, while the comparable operating result was EUR -7.7 million, compared with EUR 0.1 million in the first half of 2025. The reported operating result improved to EUR -14.8 million from EUR -25.5 million.

Comparable earnings per share were EUR -0.04, compared with EUR -0.02 a year earlier, while reported earnings per share were EUR -0.06. Comparable return on capital employed was -0.4%, and net cash flow from operations was EUR -61.8 million.

Second quarter returns to positive comparable operating profit

During the April–June quarter, sales reached EUR 431.9 million, compared with EUR 460.1 million in the same period last year.

Comparable EBITDA increased to EUR 30.3 million, or 7.0% of sales, from EUR 6.1 million a year earlier. EBITDA rose to EUR 26.9 million from EUR 7.1 million.

Comparable operating profit improved to EUR 3.1 million, marking the first positive comparable operating result since the first quarter of 2025, compared with a loss of EUR 22.7 million in the second quarter of 2025. The reported operating result improved to EUR -0.3 million from EUR -21.7 million.

Comparable earnings per share improved to EUR -0.01, while reported earnings per share were EUR -0.02. Comparable return on capital employed improved to 0.8%, and operating cash flow turned positive at EUR 8.7 million, compared with EUR -10.1 million a year earlier.

Transformation programme progresses

Metsä Board said its transformation programme continued to advance during the review period.

By June 30, 2026, the programme had achieved an annual run-rate EBITDA improvement of approximately EUR 135 million, of which approximately EUR 45 million had already been realised in reported EBITDA. The programme aims to improve annual EBITDA by EUR 200 million on a run-rate basis by the end of 2027.

The company said improvements have resulted from streamlined mill cost structures, procurement efficiencies, lower logistics costs, reductions in work tasks, profitability improvements at associated company Metsä Fibre, and efficiency gains in Metsä Group's shared services. Commercial development initiatives are expected to begin contributing gradually during the second half of 2026 through pricing improvements, customer segmentation and service model enhancements.

CEO highlights improving profitability

Chief Executive Officer Esa Kaikkonen said the company's profitability continued to improve during the second quarter, supported by higher paperboard delivery volumes and systematic implementation of efficiency improvements and cost-saving measures.

He noted that the Husum integrated mill remained loss-making and improving its profitability remains one of the company's highest priorities.

According to Kaikkonen, demand for paperboard strengthened compared with the first quarter, increasing delivery volumes in both the Consumer Packaging and Retail Packaging businesses. Metsä Board also slightly increased its European folding boxboard market share, while order intake at its Finnish mills exceeded last year's level.

Average prices for folding boxboard and white kraftliners began increasing toward the end of the review period.

Kaikkonen said approximately EUR 135 million of annual EBITDA improvement had already been achieved under the transformation programme, representing a significant share of the company's EUR 200 million target for 2027.

He also said higher oil prices resulting from the conflict in Iran increased logistics costs during the quarter. Nevertheless, the company's high energy self-sufficiency and disciplined cost management supported competitiveness.

Cash flow improved significantly during the second quarter as working capital management remained a key operational focus.

Looking ahead, Kaikkonen said the second half of 2026 will be affected by extended shutdowns at the Husum and Kemi integrated mills, low utilisation rates at Metsä Fibre and continued weakness in the pulp market, while geopolitical developments continue to place upward pressure on logistics and chemical costs.

He added that long-term demand for renewable and recyclable fibre-based packaging is expected to benefit from growing consumer and brand owner demand as well as increasingly stringent regulations. The company continues strengthening its market position through investments such as new sheeting capacity in the Netherlands and a packaging design studio in Milan under its Lead the Pack strategy.

Business performance

For the first half of 2026, folding boxboard represented 54% of total sales, white kraftliner 30%, market pulp 12%, and other operations 4%.

Sales declined primarily because of lower folding boxboard deliveries and prices, weaker market pulp sales and adverse currency movements.

Paperboard deliveries totalled 687,000 tonnes, compared with 727,000 tonnes a year earlier, while market pulp deliveries decreased to 169,000 tonnes from 186,000 tonnes.

Exchange-rate movements, including hedging, reduced operating profit by approximately EUR 24 million during the first half.

Lower wood and chemical costs helped offset some pressure, while fixed costs declined due to the ongoing transformation programme and closure of the Tako mill.

During the second quarter alone, higher production volumes of folding boxboard and white kraftliners, increased white kraftliner deliveries and lower fixed costs supported profitability. However, lower average selling prices and approximately EUR 12 million of negative currency impacts weighed on earnings.

Market conditions

Demand for paperboard strengthened during the second quarter compared with the first quarter.

European folding boxboard deliveries remained below the previous year but improved sequentially. Increased imports from China and additional European capacity continued to influence market balance.

In North America, deliveries declined by more than one-third year-on-year, mainly because of weaker food service paperboard demand. The company said 10% U.S. import tariffs affected market demand.

White kraftliner deliveries increased compared with the previous year in both Europe and the Americas.

Market pulp demand and prices remained weak in Europe and China. The market-driven production curtailment at Metsä Fibre's Joutseno pulp mill, which began at the end of March, continued throughout the second quarter.

Cash flow, investments and financing

Operating cash flow for the first half was EUR -61.8 million, compared with EUR -38.1 million in the previous year.

Working capital increased because of higher inventories, increased business activity and preparations for major production shutdowns planned later in the year at the Husum and Kemi mills.

Total investments during January–June amounted to EUR 24.3 million, compared with EUR 35.1 million in the previous year. Approximately 45% comprised development investments and 55% maintenance investments.

Metsä Board said total investments for 2026 are expected to remain well below EUR 100 million, with maintenance investments expected to total approximately EUR 40–50 million.

At the end of June, the company's equity ratio stood at 58%, while net gearing was 21%.

Interest-bearing debt totalled EUR 637.7 million, and interest-bearing net liabilities amounted to EUR 340.8 million.

Available liquidity stood at EUR 546.5 million, comprising EUR 296.5 million in liquid assets and investments together with a EUR 250 million revolving credit facility.

During the review period, Metsä Board concluded a binding financing arrangement to refinance its EUR 250 million bond maturing in September 2027.

Sustainability developments

During the quarter, Metsä Board expanded its climate targets to include emissions generated at the end of its products' life cycle and received validation from the Science Based Targets initiative (SBTi).

In May, the company also received an A score in CDP's Supplier Engagement Assessment, complementing its existing A ratings for climate, forests and water security. It was also included in the Financial Times Europe's Climate Leaders list.

Following the reporting period, in July, Metsä Board retained its EcoVadis Platinum sustainability rating, placing the company among the top 1% of manufacturers in the paper, paperboard and packaging sector.

Outlook

Metsä Board said profitability in the second half of 2026 will be influenced by planned extended shutdowns at its Husum and Kemi integrated mills, continued low utilisation at Metsä Fibre, weak global pulp markets and higher logistics and chemical costs linked to geopolitical tensions.

Despite these near-term challenges, the company said long-term demand for recyclable fibre-based packaging is expected to remain supported by sustainability trends, customer demand and tightening environmental regulation.