Metsä Group’s profitability in the second quarter improved on last year, with comparable EBITDA being EUR 129 million

Metsä Group Half-year Financial Report January – June 2026

January–June 2026 (1–6/2025)

• Sales were EUR 2,741 million (3,069).

• EBITDA was EUR 231 million (250). Comparable EBITDA was EUR 257 million (265).

• Operating result was EUR -33 million (6). Comparable operating result was EUR -7 million (44).

• Result before taxes was EUR -74 million (-24). The comparable result before taxes was EUR -42 million (15).

• The comparable return on capital employed was -0.1% (1.3).

• Net cash flow from operations was EUR -37 million (10).

April–June 2026 (4–6/2025)

• Sales were EUR 1,383 million (1,426).

• EBITDA was EUR 117 million (60). Comparable EBITDA was EUR 129 million (68).

• Operating result was EUR -16 million (-46). Comparable operating result was EUR -3 million (-37).

• The result before taxes was EUR -40 million (-61). The comparable result before taxes was EUR -22 million (-52).

• The comparable return on capital employed was -0.1% (-1.7).

• Net cash flow from operations was EUR 42 million (19).

Events during the second quarter of 2026

Demand for market pulp remained muted in Europe and China. The market-driven production shutdown at the Joutseno pulp mill continued throughout the second quarter.

Average invoicing prices for softwood market pulp increased by 8% in Europe and decreased by 3% in China compared with the previous quarter.

Paperboard delivery volumes increased from the previous quarter.

At the end of May, Metsä Group inaugurated the expansion to its tissue paper mill in Mariestad, Sweden. The EUR 370 million investment will improve the mill’s production and environmental efficiency, and support its long-term competitiveness.

During the review period, change negotiations were held in the wood products business with a view to improving profitability. As a result, around 100 jobs will be cut in the UK, and a total of 100 in Finland and Estonia. Production at the Suolahti softwood plywood mill ceased at the end of May.

Metsä Group commissioned KPMG to carry out an independent assessment of the economic impact of Metsä Group’s operations on Finland. According to the assessment, the company’s value-added impact is around EUR 3.4 billion per year, and its overall impact on the Finnish economy is also significant in terms of jobs and tax revenue.

In June, Metsä Group announced a programme to speed up the use of artificial intelligence with the aim of maximising the added business value generated by artificial intelligence across the value chain. One of the partners in this development is the Finnish company QuTwo.

President and CEO Jussi Vanhanen:

Metsä Group’s Q2 result improved significantly compared with the corresponding period in 2025, when the new US tariff policy had a particularly severe impact on the profitability of our pulp and paperboard businesses. Our EBITDA rose from EUR 60 million to EUR 117 million. Our comparable operating profit was still slightly negative (EUR -3 million) but improved significantly from last year’s EUR -37 million. With the exception of our wood products business, profitability improved across all business operations compared with a year ago, although the level remains clearly insufficient.

A year ago, we launched a cost saving programme of EUR 300 million. It has exceeded expectations. Our original target was to achieve permanent annual savings of EUR 300 million by the end of 2027, but it now seems we will significantly exceed that target. Our personnel have done an excellent job of identifying areas for savings and implementing projects.

This work is reflected in our improved result, even though some of the benefits achieved have been passed on to customers through lower sales prices. The impact of exchange rates remained negative.  Our relative competitive position has strengthened, as indicated by many of our Central European and Canadian competitors reporting significant financial difficulties and capacity closures in both the softwood pulp and paperboard businesses.

It is essential to continue making cost savings and improving competitiveness in the future as well, as the crisis in the Strait of Hormuz seems to be dragging on. The rise in oil prices is having a significant impact on our costs. Around 95% of the energy we use in our production is fossil-free, but the price of oil affects our transport costs from the forest to the customer, as well as the prices of many chemicals. We estimate that if the price of oil were to remain at 100 US dollars per barrel, Metsä Group’s annual costs would increase by approximately EUR 200 million compared with the previous price of 70 dollars per barrel.

In June, we published an assessment by KPMG of the economic impact of our parent company, Metsäliitto Cooperative, and Metsä Group on Finland. According to the assessment, our operations generated EUR 3.4 billion of value added for Finland per year in 2023–2025. The tax contribution of our operations to society averaged EUR 960 million per year. This revenue helps sustain the welfare state and boosts economic vitality throughout the country. The figures are high for a simple reason: Finnish wood is the foundation of our business. We are truly proud to be building wellbeing and prosperity for hundreds of thousands of forest owners and their families, entrepreneurs, and citizens throughout Finland – from Miehikkälä to Muonio and from Luvia to Lieksa.

Near-term outlook

Geopolitical tension and conflicts are further increasing global economic uncertainty. Weak consumer confidence, the partial replacement of softwood pulp with hardwood pulp, and a structural decline in demand for printing and writing papers are weakening the demand for softwood market pulp. At the same time, the global supply of softwood market pulp is being constrained by capacity closures that continued into the early part of the year and by production cuts already announced for the coming months.

A slight seasonal decrease in demand for sawn timber is expected in the third quarter. The geopolitical situation in the Middle East also continues to weigh on the outlook for demand.

The annual maintenance shutdowns at the Äänekoski bioproduct mill, the Rauma pulp mill and the mills in Husum are scheduled for the third quarter of the year and will significantly reduce the result for that quarter.

Paperboard pricing and demand improved towards the end of first half of the year, providing support for the operating environment in second half.

Demand for tissue paper products is expected to remain stable, while long-term growth is expected to remain moderate. The uncertainty of the market situation for greaseproof papers in Europe continues due to increased Chinese competition.

In much of Europe, the outlook for construction remains weak, which is reflected in muted demand for Kerto LVL products. Demand for birch plywood is expected to remain stable.

Sales prices for engineered wood products in Europe are expected to be slightly higher than in the previous quarter to offset the rise in delivery costs. In the United States, market prices for LVL are on the rise.

In the UK, demand for upgrading is expected to remain weak in the next few months.

The overall wood trade situation in Finland has picked up towards the summer, and we expect normal wood trade for the rest of the year. Demand for wood extends to all stands suitable for summer felling, especially FSC-certified wood and birch logs. Demand for forest management services is expected to pick up as wood sales volumes increase.

METSÄ GROUP

For further information:

Vesa-Pekka Takala, EVP, CFO, Metsä Group, tel. +358 10465 4260

Maria Mroué, VP, Group Communications and Brand, Metsä Group, tel. +358 50393 4974

Metsä Group
www.metsagroup.com

Metsä Group has its roots in the Finnish forest: our parent company Metsäliitto Cooperative is owned by approximately 90,000 forest owners. We make wood products that people around the world need every day. We focus on pulp, paperboards, tissue and greaseproof papers, wood products, and wood supply and forest services. We are committed to regenerative forestry that measurably strengthens the forest ecosystem. We promote a culture of diversity, equality and inclusion.

In 2025, our sales totalled EUR5.8 billion, and we employ about 8,800 people.

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