January-June 2025 (compared to 1-6/2024)

• Sales were EUR 940.9 million (993.6).
• The comparable operating result was EUR 0.1
  million (30.7), or 0.0% of sales (3.1). Operating result was EUR -25.5 million (22.3).
• Comparable earnings per share were EUR -0.02 (0.03), and earnings per share were EUR -0.08 (0.01).
• Comparable return on capital employed was 0.2% (2.9).
• Net cash flow from operations was EUR -38.1 million (-16.5).

April-June 2025 (compared to 4-6/2024)

• Sales were EUR 460.1 million (509.8).
• The comparable operating result was EUR -22.7 million (-0.8), or -4.9% (-0.2) of sales. Operating result was EUR -21.7 million (-0.7).
• Comparable earnings per share were EUR -0.06 (-0.03), and earnings per share were EUR -0.06 (-0.03).
• Comparable return on capital employed was -3.3% (0.3).
• Net cash flow from operations was EUR -10.1 million (-8.6).

Events in April-June 2025

• Metsä Board's comparable operating result for April-June was clearly negative and weaker than the company had previously estimated.
• The uncertainty caused by U.S. import tariffs has negatively affected the purchasing behaviour of paperboard customers, and paperboard production was adjusted to match demand more significantly than previously planned at all mills.
• The demand situation for market pulp was weak in both Europe and China. The associated company Metsä Fibre announced that it will curtail its pulp production at the Joutseno mill until further notice.
• Total paperboard delivery volumes decreased slightly from the previous quarter. Average paperboard prices remained stable.
• The Kemi integrated mill had a repair shutdown lasting approximately five weeks, during which Metsä Board's white kraftliner production was also halted.
• To improve profitability and competitiveness, the Tako board mill was closed permanently on 16 June 2025. Tako's production was transferred to the Kyro board mill.
• On 21 May 2025, Metsä Board issued a EUR 200 million green bond. The bond will mature in 2031, and it has an annual coupon rate of 3.875%.
• Metsä Board's Board of Directors elected Jussi Vanhanen as Chair of the Board from 1 July 2025.

Near-term outlook

Consumers' cautious purchase behaviour and the supply of fresh fibre paperboard outpacing demand, especially in the EMEA region, continue to affect the demand for paperboard. The import duties imposed by the US increase uncertainty and make it difficult to predict the development of paperboard sales.

In July-September 2025, Metsä Board's total paperboard deliveries are expected to remain roughly at the same level as in April-June (4-6/2025: 360,000 tonnes; 7-9/2024: 388,000 tonnes).

Variable costs, excluding pulp costs, are expected to remain at the previous quarter's level.

More annual maintenance and investment shutdowns are planned for the mills in July-September than in April-June. The Simpele board mill has an investment shutdown lasting approximately one month, and the Husum integrate has an annual maintenance shutdown. In addition, market-related production adjustments will continue at other mills. These measures will have a significant negative impact on earnings.

In July-September 2025, exchange rate fluctuations, including the impact of hedges, will have a positive impact on the result compared to April-June 2025 and July-September 2024.

The market situation for pulp is not expected to improve significantly. The weakening of the dollar, subdued demand, and high raw material costs are limiting pulp production, especially in Europe. The demand for sawn timber is expected to decline seasonally. Metsä Board estimates, that the overall impact of pulp on operating result in July-September will be clearly negative compared to the previous quarter.

Operating cash flow is expected to turn positive in the third quarter of 2025 as a result of measures to release working capital.

Result guidance for July-September 2025

Metsä Board's comparable operating result in July-September 2025 is expected to be weaker than in April-June 2025 (4-6/2025: EUR -22.7 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."

METSÄ BOARD CORPORATION