M-Real Is Paperboa Supplier. M Innovative and Pape Commun End
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Annual Report Annual Report Report Annual M-real is Europe’s leading primary fibre 2009 paperboard producer and a major paper supplier. M-real offers its customers innovative high-performance paperboards and papers for consumer packaging, communications and advertising end-uses. Annual Report Annual Report Report Annual M-real is Europe’s leading primary fibre 2009 paperboard producer and a major paper supplier. M-real offers its customers innovative high-performance paperboards and papers for consumer packaging, communications and advertising end-uses. KEY FIGURES AND page 2 M-real YEAR 2009 IN BRIEF 4 Year 2009 in brief 6 Key figures 8 CEO’s review Consumer02 Packaging 12 Office Papers 14 Speciality Papers 16 Market Pulp and Energy 18 page BUSINESS Operating environment 20 Raw materials 22 Managing environmental impacts 24 Energy and climate 26 Personnel 2810 FINANCIAL REPORT 2009 page 32 Report of the Board of Directors 2009 40 Consolidated financial statements 99 Parent company’s fnancial statements 30110 Corporate Governance Statement 118 Board of directors 120 Management team 128 Financial reporting 130 Contact details From forest to end user Raw materials Production Products M-real is committed to using wood raw M-real uses the best available techno- M-real’s production processes are based material from sustainably managed forests logy in its production units. The key on the economic use of resources and on in compliance with local legislation. The principles of production include conti- minimising the environmental impact of role of certified quality and environmental nuous improvement of operations and the products throughout their life cycle. systems is in part to control the origin of minimising environmental impacts; all Moreover, M-real’s products are safe wood: M-real can thereby know the exact production units use certified ISO 9001 for people and the environment alike. source of the wood it uses. In 2009, 69 per quality and ISO 14001 environmental The company’s core competence lies cent of wood raw material was certified, systems. M-real also continuously imp- in its profound knowledge of the pro- and M-real aims to further increase the roves its energy efficiency. A certified perties of different wood fibres and the share of certified wood in its products. energy efficiency system verified by a compatibility of pulps with specific end The safety of other raw materials, such third party was implemented in all pro- uses. The combination of continuous as chemicals, is also taken into account duction units by the end of 2009. M-real’s quality assurance with efficient and well- already in the product development phase. self-sufficiency in energy is about 77 per managed production helps to ensure a Moreover, M-real’s products can achieve cent and wood-based fuels account for 59 uniform quality of the products. In ad- the same stiffness and printability fea- per cent. M-real is also self-sufficient in dition, light boards and papers provide tures with less raw material compared pulp. M-real’s greenhouse gas emission savings throughout the value chain by to competing board and paper grades: reporting received significant recognition decreasing both transported amounts lightweight products are an essential when M-real was placed second in its field and waste. In spite of their lightness, the part of M-real’s product range. in the 2009 Nordic Carbon Disclosure performance and printability properties Leadership Index (CDLI). of the products remain excellent. Thanks to a streamlined product offering with clearer purposes of use, M-real is able to deliver products faster than before. The principles of simplicity and ease 2 guide all M-real operations. FROM FOREST TO END USER Delivery chain Stakeholders The environment Transportation volumes are high in the M-real provides its customers with added Board and paper are made of renewable forest industry, so an efficient and sustai- value through premium products spe- raw materials and are 100 per cent re- nable delivery chain requires a versatile cifically tailored for the purpose of use. cyclable. Recycled board and paper can and well-designed logistics network. The Lightweight products, for instance, offer be utilised at the end of its life cycle in significance of efficient logistics, good customers savings in transport costs, and energy production or as raw material for partners and functional traffic connec- their properties are of high quality along- products made of recycled fibre. Board is tions to competitiveness is everincrea- side their lightness. The uniform quality also suitable for composting. Recycling sing. M-real aims at fast deliveries that of the products also decreases wastage. board and paper reduces the environ- are as efficient as possible by utilising A simple product offering makes it easier mental impact. Lightweight products various means of transportation and for the customer to select the best pos- reduce the amount of waste further, as selecting the most appropriate means sible product for the use in question. In their manufacture requires less raw ma- of transportation for each occasion. The addition, M-real communicates about its terial. The raw material, i.e. wood, is best environmental impacts of transport are operations in an open and transparent used primarily for further refining instead reduced with efficient route planning, manner; for example, the environmental of as fuel wood, for instance. The carbon minimising transport distances, using impacts of operations can be viewed on footprint of M-real’s lightweight products the capacity of the vehicles as efficient- the Paper Profile product declarations is smaller compared to heavier grades ly as possible, and improving operating on the website as well as customer- and throughout the value chain, from the pro- models and guidelines. A constantly product-specific carbon footprint calcu- duction to the end of its life cycle. changing operating environment sets lations. M-real’s business is based on several international and local develop- responsible profit performance, which ment needs for the delivery chain. The sets the prerequisites for continuous- most important of these are related to ly developing operations in a way that the management of environmental im- benefits the customers, shareholders, pacts and maintaining and improving employees and partners. logistical performance. 3 FROM FOREST TO END USER Year 2009 in brief JANUARY FEBRUARY MARCH APRIL MAY JUNE January February March August Statutory negotiations concerning M-real launched a new profit M-real repurchased from the M-real received EUR 190 million mill operations in Finland were improvement programme with an market its own EUR 400 million cash from an early repayment by begun. The target of the negotiations annual target of EUR 80 million. The senior floating rate notes with a Sappi of the vendor notes. was to prepare production full annual effect will be visible from total par value of approximately EUR temporarily for lower demand. 2011. A separate EUR 60 million 60 million. The loan matures on 15 programme to improve the 2009 December 2010. M-real’s associated company Oy cash flow was also launched. Metsä-Botnia Ab announced its plan to close its pulp mill in Kaskinen, Matti Mörsky was appointed Finland. M-real Corporation’s CFO. Mörsky started in the position in May 2009. Statutory negotiations at the Hallein mill, Austria, were initiated, M-real Zanders launched the new targeting to discontinue paper FSC-certified uncoated fine paper production at the end of April 2009. ZANTO. 4 YEAR 2009 IN BRIEF JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER October November December The transaction regarding the new ownership structure of Metsä- M-real’s associated company, Oy M-real was the second best New internal profit improvement Botnia and the divestment of Metsä-Botnia Ab, and its owners, company in the materials sector in measures were announced. The Uruguayan operations was closed. M-real, Metsäliitto Cooperative the Carbon Disclosure Leadership planned actions are a permanent Closing of the transaction reduced and UPM-Kymmene Oyj, signed the Index (CDLI), Nordic Report 2009. closure of the Alizay pulp mill, master agreement regarding the CDLI highlights the companies that M-real’s net debt by about EUR 500 the closures of two speciality new ownership structure of Metsä- provided the most comprehensive million, including a EUR 300 million Botnia and the divestment of Metsä- response to the Carbon Disclosure paper machines in the Reflex mill, cash portion. Botnia’s Uruguayan operations Project (CDP) information request. an investment at Husum mill to The Energy Efficiency System to UPM. improve its energy efficiency and a new EUR 20 million internal profit (EES) was implemented in The profit improvement target for improvement programme covering M-real’s production units during the year 2009 was raised from EUR all M-real’s business areas. the year 2009. The EES provides 80 million to EUR 90 million mainly the foundation for the company’s resulting from a decrease in IT and A new three-year IT services systematic energy efficiency personnel costs. The target for the contract with Tieto Corporation cash flow improvement programme activities. was signed. The new contract will was increased from EUR 60 million M-real announced a partial early to EUR 80 million. become effective on 1 July 2010. The contract is expected to decrease redemption of EUR 250 million of The publisher of German annual IT costs by approximately its 2010 bond. The early redemption Standards chose the brand Zanders EUR 30 million from 2010 onwards. will reduce M-real’s net financing as brand of the century. costs in 2010 by approximately EUR Negotiations on the new 11 million. organisation at M-real Husum were completed. The number of personnel is to decrease to below 800. 5 YEAR 2009 IN BRIEF Key figures 2009 2008 Change (%) Sales, EUR million 2,432 3,236 -25 Operating result excl.