UPM Raflatac has released the findings of a new neuromarketing study. Results show the power of different label materials and finishes to shape consumer perceptions and drive purchasing. Focused on white wine labels, the research carried out in collaboration with partners in the packaging value chain, ARGEA, SenseCatch, Kurz, and Krämer Druck, shows that label material and finishes all have a significant part to play in consumer purchasing behavior and post-purchase enjoyment. The research has been summarized in a book, which also features a foreword by Uwe Melichari, a sustainable packaging expert, designer, and Pentawards jury member. The book is available in three languages and as a digital version. A wine’s label plays a pivotal role in the consumer’s decision to buy it or not. In fact, according to a study on the wine sector conducted by wine.net, it was found that 82% of a sample of 2000 consumers relied primarily on the label to choose their favorite wine. Many other studies have also commented on the link between the perceived taste of wine and expectations, and how these are influenced by the label’s color, shape, paper, printing technique, and overall design.
January–March 2021 (compared to 1–3/2020)
• Sales were EUR 493.7 million (472.1).
• Comparable operating result was EUR 88.8 million (33.8) or 18.0% (7.2) of sales. Operating result was EUR 82.0 million (33.8).
• Comparable earnings per share were EUR 0.20 (0.06), and earnings per share were EUR 0.18 (0.06).
• Comparable return on capital employed was 18.3% (7.6).
• Net cash flow from operations was EUR 16.8 million (80.0).
Impact of coronavirus pandemic on Metsä Board’s business operations
The coronavirus pandemic has increased demand for hygienic and safe packaging materials, particularly for end uses in the food and pharmaceutical industries. On the other hand, the pandemic has weakened demand for the packaging materials of luxury items and graphic end uses.
While no chains of coronavirus transmissions have occurred, the incidence of individual cases of infection has increased as the pandemic has progressed.
Metsä Board’s financial position is good. The maturity structure of the loans is healthy, and the company has adequate liquidity. Metsä Board’s paperboard product portfolio has responded to the changes in demand resulting from the pandemic, and thus the cash flow, which has remained strong, supports financial headroom.
The company continues to employ substantial precautionary measures aiming to ensure the health of employees and the continuity of business operations and prevent the virus from spreading. Despite the precautionary measures, a prolonged pandemic could lead to disruptions in production and/or the supply chain.
Metsä Board’s CEO Mika Joukio:
“Metsä Board’s year got off to a brisk start. Demand was very strong in all our products and in all our main markets. The delivery volumes of folding boxboard and white kraftliners were record high in January–March, totalling 491,000 tonnes. At the end of the review period, the order backlog was at an exceptionally high level, which indicates good paperboard sales for the second quarter, too.
Thanks to the low number of maintenance shutdowns and the mills’ further improved production efficiency, the production volumes of paperboard and market pulp were also record high.
Our comparable operating result in January–March was EUR 88.8 million, i.e. clearly better than during the comparison period (1–3/2020: EUR 33.8 million). The profitability of the comparison period was burdened by the paper industry strike in Finland, which had a roughly EUR 15 million negative impact on the operating result. The operating result of the review period improved due to higher delivery volumes of paperboard and the rapidly increased prices of market pulp in Europe and particularly in China. At the same time, a growing shortage of containers in the traffic between Europe and Asia has resulted in challenges and will continue to impact deliveries, especially in market pulp.
At the beginning of the year, we sold a 30% share of our Husum pulp mill to Norra Skog. The transaction made us a net debt free company. At the end of the review period, our interest-bearing net debt was EUR -6.6 million. Our cooperation with Norra Skog will reduce the amount of wood delivered to the Husum pulp mill from the Baltic countries, as it will be replaced by local pulpwood. This will, in turn, increase the share of certified wood fibre out of all wood fibre we purchase. Our target is, that more than 90% of all the wood fibre we purchase will be certified by 2030.
Our strong financial position and the growing demand for sustainable fresh fibre paperboard provides us with an excellent basis for the growth and development of our paperboard business. During the review period, we initiated pre-engineering on increasing the annual production capacity of Husum’s folding boxboard machine by some 200,000 tonnes. The decision readiness for the investment is expected to be reached in the summer of 2021, in which case the planned increase of production could start in 2023. In addition, we launched a development programme at the Kemi paperboard mill in which the annual production capacity of white kraftliner will be increased by 40,000 tonnes and the mill’s water and energy efficiency will be improved considerably.
We continue to invest in product development and innovations, and have an excellent platform for doing so in the Excellence Centre we opened last year. The centre manages development work globally in cooperation with our customers and technology partners.