Metsa Tissue's Loss in 2000 Eur 21.7 Million - Result for 2001 Expected to Show a Clear Profit.Business Editors STOCKHOLM, Sweden--(BUSINESS WIRE)--Feb. 5, 2001 Before extraordinary items, Metsa Tissue made a loss of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 21.7 million in 2000 (profit of EUR 9.1 million in 1999). - The loss per share was EUR 0.64 (earnings of EUR 0.11). - Turnover rose 4.0 per cent to EUR 609.2 million (585.7 million). - The equity ratio was 24.9 per cent (30.5). - The loss for the period was EUR 19.3 million (profit of 1.4 million). The Board of Directors proposes that no dividend be distributed for the 2000 financial period. The financial result was affected by the sharp rise in raw material costs, which was covered by raising product prices only after a certain delay. As a result of these price rises and development projects the Group expects to make a clear profit in 2001. Turnover and Financial Result Consolidated turnover rose by 4.0 per cent on the previous year to EUR 609.2 million (585.7 million in 1999). Turnover for 1999 includes turnover from businesses that no longer form part of the Group, and on a comparative basis the growth in turnover was 7.6 per cent. There was a loss on operations of EUR 11.9 million, 1.9 per cent of turnover (profit of 16.2 million, 2.8 per cent). The unsatisfactory trend in the financial result is due mainly to the fact that sharp rises in costs could only be covered by raising product prices and making operations more efficient after a certain delay. The financial result was poorest in the first half, but showed a turn for the better during the third quarter. Depreciation was EUR 37.4 million (33.5 million). The increase in depreciation is due to the timing of major investments, which were introduced at the end of 1999 and beginning of 2000. Net financial expenses were EUR 9.8 million, 1.6 per cent of turnover (7.1 million and 1.2 per cent). The increase is due partly to an increase in the Group's debts and also to higher interest rates. Before extraordinary items there was a loss of EUR 21.7 million, -3.6 per cent of turnover (profit of 9.1 million, 1.6 per cent). The loss after taxes and minority interests was EUR 19.3 million (profit of 1.4 million). Main Events During the Financial Period The main focus of activity in all markets was on raising product prices in line with the higher production costs. A programme of price rises was largely completed by the end of the year, although it failed to keep pace with the rise in costs. As a result, business early in the year showed a loss. The basis for profitable business was restored at the end of the period. Price rises were introduced fastest in the Nordic countries, where most of the company's products are sold under their own brand names. The introduction of price rises was much slower in continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. , and some prices will not be raised until 2001. Programmes to improve cost-effectiveness cost-effectiveness pertaining to cost-effective. cost-effectiveness analysis a comparison of the relative cost-efficiencies of two or more ways of performing a task or achieving an objective. were in progress at all mills and involved measures such as slimming product ranges and rationalization rationalization, in psychology: see defense mechanism. investments. The need for development remains greatest in continental Europe. At the end of May, the company's principal owner, Metsa-Serla Corporation, signed an agreement to sell its shares in Metsa Tissue to Svenska Cellulosa Aktiebolaget Svenska Cellulosa Aktiebolaget (SCA) is a Swedish pulp and paper manufacturer and consumer goods company. It has approximately 50,000 employees and a turnover of approximately 100 billion SEK (10 billion euro). SCA (Single Connector Attachment) An 80-pin plug and socket used to connect peripherals. With a SCSI drive, it rolls three cables (power, data channel and ID configuration) into one connector for fast installation and removal. (SCA). The agreement was conditional on approval by the EU competition authority. The decision issued by the European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community at the end of January 2001 prevents the sale of Metsa Tissue shares from going ahead. Key Figures The loss per share for the financial year was EUR 0.64 (earnings of 0.11). Capital invested in business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets at the end of the year was EUR 378.9 million (362.7 million). The return on capital invested was -3.1 per cent (4.6). Return on equity was -14.9 per cent (1.8). Financial Situation and Liquidity The cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses (before investments) was EUR -15.4 million (22.7 million). The equity ratio was 24.9 per cent (30.5) and the gearing ratio Gearing Ratio A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. was 198.8 per cent (139.1). The Group's interest-bearing liabilities were EUR 258.6 million (218.3 million). A long-term EUR 15 million loan agreement was signed in February with Nordiska Investeringsbanken. The loan will be used to finance the Group's investments in Sweden. Liquidity was good throughout the financial year. Liquid funds at 31 December were EUR 19.4 million (17.4 million). In addition, the Group had EUR 14.5 million in unutilized credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities (52.2 million), of which EUR 10.0 million was committed and EUR 4.5 million uncommitted. Of the Group's interest-bearing liabilities, 95 per cent were tied to market interest rates and the rest to fixed interest rates. The average rate of interest on the Group's interest-bearing liabilities at the end of the financial period was 5.40 per cent (4.22). The Market Tissue sales in Europe are currently around 5 million tonnes annually. The tissue markets served by Metsa Tissue represent around 3.4 million tonnes. Metsa Tissue's share of these markets is 9-10 per cent. In terms of volumes, the market is growing by about one per cent a year in the Nordic countries, by 2-3 per cent in continental Europe and by 5-7 per cent in Poland. As growth shifts increasingly towards higher quality products, the total value of the market is rising faster than the growth in volume. In recent years the tissue business has become much more consolidated through acquisitions and mergers. The marked rise in the cost of the company's main raw materials that began in autumn 1999 continued up to the end of 2000. The euro-denominated price of chemical pulp, the principal raw material, rose by almost 45 per cent during the year under review. Waste paper prices also rose, particularly in continental Europe. Between early autumn 1999 and the end of 2000, the rise in raw material costs corresponded to almost 25 per cent of Metsa Tissue's turnover. Coupled with higher energy prices, the sharp rise in raw material costs led to increases in market prices for products, although their introduction was delayed by competition for market shares and by intense competition in the retail trade in continental Europe. Business Areas Turnover for the Consumer business area rose by 12.2 per cent to EUR 317.8 million (283.3 million). There was a loss on operations of EUR 10.9 million, -3.4 per cent of turnover (profit of 6.1 million, 2.2 per cent). The company further strengthened the position of its brand names in the Nordic countries. Sales volumes were unchanged on the previous year. In Sweden, re-launch of the Leni brand name in the highest quality segment succeeded as planned. Prices were raised on all markets, and those introduced in the Nordic countries almost covered the rise in costs. In Germany, intense competition delayed the introduction of price rises, some until 2001. In Poland, launch of the Mola brand coupled with higher product quality improved prices and strengthened Metsa Tissue's market position. The Away-from-Home business area had a turnover of EUR 165.4 million, down slightly on the previous year (169.4 million). Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was EUR 0.7 million, 0.4 per cent of turnover (6.4 million, 3.8 per cent). Turnover for 1999 includes turnover from businesses that have since been divested, and on a comparative basis turnover showed a favourable trend. In the Nordic countries, sales volumes were unchanged on the previous year, and sales prices were raised almost enough to cover the rise in raw material costs. Sales of Katrin products and Ultimatic dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. systems increased according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan. The goal is to strengthen still further the market position of Katrin products both in the Nordic countries and in continental Europe. Sales volumes in continental Europe were up on 1999. Growth was smaller than forecast, however, as the target for winning new customers was not reached. Turnover from Other Operations fell to EUR 133.3 million (145.9 million). There was a loss on operations of EUR 0.6 million, -0.5 per cent of turnover (profit of 5.7 million, 3.9 per cent). In the Baking baking: see cooking. baking Process of cooking by dry heat, especially in an oven. Baked products include bread, cookies, pies, and pastries. and Cooking product area, in-house converting accounted for a greater share of total sales, and business remained fairly stable despite increased competition. The volume of base tissue sales was reduced by the increased volume of in- house converting, a strike in the spring, and the Group's investments. The most important market for the Table Top product area is continental Europe, where sales showed growth of 9 per cent on the previous year. Activities during the year focused on launching the Fasana range of products and raising cost-effectiveness. Investments Investment during the financial period totalled EUR 22.7 million (32.8 million), of which EUR 0.5 million (3.7 million) was used for company acquisitions and EUR 22.2 million (29.1 million) for acquisition of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → . Investment concerned mainly replacements and rationalizations, as a result of which cost-effectiveness has been improved. Some investments were designed to raise the value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. in converting and to develop product characteristics. The CCM CCM Contemporary Christian Music CCM Critical Care Medicine CCM County College of Morris (New Jersey) CCM Chama Cha Mapinduzi (political party, Tanzania) CCM CORBA Component Model production line started up at the Nyboholm mill at the end of 1999 achieved a steady level of production early in 2000, as expected. Production of Katrin Ultimatic products at the Mantta mill was modernized mod·ern·ize v. mo·dern·ized, mo·dern·iz·ing, mo·dern·iz·es v.tr. To make modern in appearance, style, or character; update. v.intr. To accept or adopt modern ways, ideas, or style. and expanded. Converting capacity for Baking and Cooking products was increased. In spring 2000, the Katrinefors mill and the city of Mariestad began a project to build a power plant to use the mill's deinking waste and wood chips as fuel. The plant is due to come on stream at the end of 2001, and will reduce the mill's environmental loading and secure energy supplies at competitive prices well into the future. The project will cost an estimated EUR 23 million and is being carried out by Katrinefors Kraftvarme AB, in which Metsa Tissue has a 50 per cent interest. Metsa Tissue's commitment is restricted to a long-term purchasing agreement. Personnel Metsa Tissue had an average of 3,205 employees (3,459) during the financial period. The number at 31 December was 3,048 (3,355).
Employees by country:
31 Dec.1999 31 Dec.2000 Average
Finland 738 673 730
Other Nordic countries 712 700 729
Germany 1,452 1,279 1,319
Poland 410 358 384
Other countries 43 38 43
Total 3,355 3,048 3,205
General Meeting of Shareholders, Board of Directors and Auditors Metsa Tissue Corporation's Annual General Meeting was held on 23 March 2000. The following persons were re-elected as members of the Board of Directors: Ari Heinio, Curt Lindbom, Jussi Lansio, Antti Oksanen, Juhani Saarela, Arimo Uusitalo and Jorma Vaajoki. The term of office of members of the Board of Directors extends until the end of the Annual General Meeting to be held in 2001. The Board elected Antti Oksanen as its Chairman and Arimo Uusitalo as its Vice Chairman. SVH SVH Sweet Valley High SVH Simi Valley Hospital SVH Silicon Valley Hellas SVH Saint Vincent's Hospital (Sydney, Australia) Pricewaterhouse Coopers Oy (Authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: Public Accountants) were re- elected as the company's auditors, with Goran Lindell, APA (All Points Addressable) Refers to an array (bitmapped screen, matrix, etc.) in which all bits or cells can be individually manipulated. APA - Application Portability Architecture , responsible for the audit. The Annual General Meeting also approved a proposal to convert Metsa Tissue's share capital and the nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. of its shares into euros. So that the nominal value of the share would be exact to one-tenth of a euro, the meeting decided to raise the company's share capital by FIM FIM The ISO 4217 currency code for the Finnish Markka. 3,232,230 through a transfer from the share premium account. As a result, the company now has a share capital of EUR 51.0 million and the nominal value of its share is EUR 1.70. Hannu Anttila was CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Metsa Tissue during the financial year. Events Occurring after the Closing of Accounts The decision issued by the European Commission on 31 January 2001 prevents Metsa-Serla's controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Metsa Tissue from being sold to SCA. Outlook for 2001 The acquisition process concerning our company continued for most of the year but came to an end in January 2001. Metsa Tissue will continue to operate as an independent listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → . Measures to revitalize re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. activities and raise efficiency, which were held back by the acquisition process, will now go ahead immediately. Demand for tissue is expected to show a further growth in volume of about one per cent a year in the Nordic countries, 3-4 per cent in continental Europe and 5-7 per cent in Poland. Growth in production capacity will outstrip out·strip tr.v. out·stripped, out·strip·ping, out·strips 1. To leave behind; outrun. 2. To exceed or surpass: "Material development outstripped human development" growth in demand and lead to greater competition. Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the tissue business is expected to continue. During 2000, a programme of price rises was introduced, a small number of which will be implemented early in 2001. Once this is complete, the rise in raw material costs will have been largely covered by the rise in product prices. Projects carried out during 2000 and earlier have significantly improved cost-effectiveness. Greater efficiency levels can be achieved by revising the product portfolio and overcoming bottlenecks in production, most particularly at the mills in Germany. Higher product prices, coupled with revitalization re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. and efficiency measures, are expected to improve the Group's profitability. The rise in raw material costs is now thought to have stopped, and this will secure a basis for profitable business. The Group anticipates better profitability in 2001 and expects to record a clear profit. Proposed Distribution of Profits The Metsa Tissue Group has distributable funds of EUR -14,533,300. The Board of Directors of Metsa Tissue Corporation proposes to the Annual General Meeting to be held on 13 March 2001 that no dividend be distributed in respect of the financial period ended 31 December 2000. All figures in this bulletin are unaudited. Espoo, 5 February 2001 BOARD OF DIRECTORS ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. : http://www.bit.se/bitonline/2001/02/05/20010205BIT00560/bit0001.doc http://www.bit.se/bitonline/2001/02/05/20010205BIT00560/bit0002.pdf |
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