Metsä Board
Annual and Sustainability Report 2021
The world needs
solutions that support
the circular economy,
and fresh fibre
paperboards meet
this need.
The cover of this Annual and Sustainability Report is made from the MetsäBoard Prime FBB Bright folding boxboard we manufacture. We have produced its raw material, high-quality pulp, from wood
grown in sustainably managed Northern European forests. The Annual and Sustainability Report was made in Finland and it is fully recyclable.
PUBLISHED BY
Metsä Board Corporation, Communications
metsaboard.communications@metsagroup.com
Metsä Board’s Annual and Sustainability Report is published in English and Finnish.
Metsä Board also publishes a Remuneration Report. The publications are available in PDF
format at www.metsaboard.com
Metsä Board is a leading European producer of
premium fresh fibre paperboards and a forerunner
in sustainability. Metsä Board is part of Metsä Group.
Metsä Group
Brochure
2021
Metsä Group
Annual Review
2021
Metsä Board
Annual and
Sustainability Report
2021
Metsä Group
Sustainability Report
2021
Metsä Group
Annual Review 2021
PEFC/02–31–92
Your partner in
sustainable growth
Covers: MetsäBoard Prime FBB Br ight 235g/m². © Me tsä Group 2022
METSÄ GROUP
P.O. Box 10
FI–02020 Metsä, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Tel. +358 10 4601
www.metsagroup.com
Metsä Board
Annual and Sustainability Report 2021
PEFC/02–31–92
Covers: MetsäBoard Prime FBB Br ight 235g/m². © Me tsä Board Corp oration 2022
METSÄ BOARD CORPORATION
P.O. Box 20
FI-02021 Metsä, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Tel. +358 10 4611
www.metsaboard.com
Together we make
the perfect package
Metsä Group
Sustainability Report 2021
PEFC/02–31–92
Your partner in
sustainable growth
Covers: MetsäBoard Prime FBB Br ight 235g/m². © Me tsä Group 2022
METSÄ GROUP
P.O. Box 10
FI–02020 Metsä, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Tel. +358 10 4601
www.metsagroup.com
Metsä’s year
2021
Your partner in
sustainable growth
METSÄ GROUP
P.O. Box 10
FI–02020 Metsä, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Tel. +358 10 4601
www.metsagroup.com
Covers: MetsäBoard Prime FBB Bright 235g/m
2
.
©
Metsä Group 2022
The cover material of this report was produced
at the Kyro paperboard mill. The high-yield pulp in
the middle layer of the paperboard was produced at
the Joutseno mill, and the chemical pulp in the back
layer was produced at the Äänekoski bioproduct mill.
The coated folding boxboard made from pure fresh
fibre is suitable for packaging and graphical end uses.
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Contents
52 and 57
30
45
We advanced in our
sustainability targets at
several mills.
We promote a diverse and
equal corporate culture.
We helped our customers to
improve the sustainability
of their packaging with our
Sustainability Services.
The fully recyclable
paperboard lid is a good
example of an innovation
supporting the circular
economy.
9
Business operations
and value creation
4 This is Metsä Board
6 CEO’s review
8 Highlights of the year
10 Strategy and targets
12 Value creation
14 Operating environment
18 Product and service development
Sustainability
20 Sustainability targets
34 Well-being
38 Forests and wood
44 Sustainable products
52 Climate and environment
60 Mill-specific information
Financial development
66 Report of the Board of Directors
81 Consolidated financial statements
85 Notes to the consolidated financial statements
131 Parent company financial statements
134 Notes to the parent company financial statements
147 Auditor’s Report
150 Shares and shareholders
155 Key figures and taxes
Governance
158 Corporate governance statement
164 Board of Directors of Metsä Board
166 Corporate Management Team of Metsä Board
168 Investor relations and investor information
1
The world needs more sustainable ways of
packing – and for good reason. Population
growth, urbanisation and climate change require
solutions that respect nature. Our lightweight
paperboards are the circular economy at its best.
By taking advantage of the full potential of fibre-
based materials, we help our customers to create
more sustainable packaging and deliver better
consumer experiences.
Packaging solutions
that respect nature
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Focus on sustainable
fresh fibre paperboards
We focus on premium and recyclable fresh fibre paperboards,
used primarily in consumer goods packaging and for various
retail packaging solutions. The demand for these products
is stable, regardless of economic cycles. Our main products
include folding boxboards and food service boards as well as
white kraftliners.
Strong position
in a growing market
We are a leading producer of folding boxboard and white
kraftliners in Europe, and globally the biggest producer of coated
white kraftliners. In the United States, we are the largest supplier
of folding boxboard. We estimate that the global demand for our
main products will grow by an annual rate of roughly 2–3% in the
long-term. Our customers include brand owners, converters,
manufacturers of corrugated products and merchants.
We are part of Metsä Group
We are part of the profitable Metsä Group and benefit from
the good availability of our main raw material, northern wood.
Our self-suciency in pulp guarantees the consistent and high
quality of the fibre and enables the growth of our paperboard
business. Metsä Group’s value chain, from the forest to the end
products and further on to customer, operates according to the
principles of sustainability and is circular economy at its finest.
Aiming for a fossil free future
We aim for fossil free production and products by end of 2030.
This requires investments and the exploration of alternative
raw materials in cooperation with our partners. Our products
support the circular economy and provide alternatives to
plastic – they are light, recyclable and/or compostable.
This is
Metsä Board
We focus on premium fresh fibre paperboards and are a forerunner
in sustainability. In 2021, our business development was strong and
we decided on investments in sustainable and profitable growth.
METSÄ GROUP
WOOD SUPPLY AND
FOREST SERVICES
METSÄ WOOD
Wood Products
METSÄ FIBRE
Pulp and sawn timber
METSÄ BOARD
Paperboard
METSÄ TISSUE
Tissue and greaseproof
papers
Metsäliitto Cooperative
100%
Metsäliitto Cooperative
100%
Metsäliitto Cooperative 50.1%
Metsä Board 24.9%
Itochu Corporation 25.0%
Metsäliitto Cooperative 48%
(67% of votes)
The company is listed
on Nasdaq Helsinki.
Metsäliitto Cooperative
100%
The parent company Metsäliitto Cooperative is
composed of nearly 100,000 Finnish forest owners.
Sales
EUR 6.0 billion
Personnel
9,500
METSÄ SPRING Innovation company
OWNERSHIP
4
240
200
160
120
80
40
0
400
300
200
100
0
20
15
10
5
0
17 18 19 20 21 17 18 19 20 2117 18 19 20 21
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Most of the sales derive from folding boxboard and the EMEA region
SALES SPLIT BY PRODUCT
% of sales
SALES SPLIT BY REGION
% of sales
Folding boxboard 57
White kraftliners 25
Market pulp 13
Other 5
EMEA 67
Americas 27
APAC region 6
Strong financial development in 2021
Source: Metsä Board’s estimates
SALES
EUR million
2,500
2,000
1,500
1,000
500
0
COMPARABLE
OPERATING
RESULT
EUR million
% of sales
TOTAL
INVESTMENTS
EUR million
Comparable ROCE
%
18.7
Target > 12%
Paperboard capacity
2
million tonnes
Production units
in Finland and Sweden
8
Personnel
2,389
Share of fossil free energy
of total energy use
%
85
Share of certified wood
fibre
%
83
Read more at www.metsaboard.com
Significant recognitions for our sustainability work
The use by Metsä Board of any MSCI
ESG Research LLC or its aliates
(“MSCI”) data, and the use of MSCI
logos, trademarks, service marks or
index names herein, do not constitute a
sponsorship, endorsement, recommen-
dation, or promotion of Metsä Board
by MSCI. MSCI services and data are
the property of MSCI or its information
providers, and are provided ‘as-is’ and
without warranty. MSCI names and
logos are trademarks or service marks
of MSCI.
5
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
A strong year
for Metsä Board
2021 was a successful year for Metsä
Board despite the challenges posed by
the COVID-19 pandemic. Our profitability
was on a record high level and we
promoted our growth and development
projects successfully. With our products
and services, we helped our customers to
create increasingly sustainable
packaging and deliver better consumer
experiences. We continued our eorts to
mitigate climate change, with the target
of completely fossil free mills and
products by the end of 2030.
competence to implement the strategy. We also make sure that
our personnel have the opportunity to develop and advance in their
careers. We aim for zero accidents at work, but based on last year’s
development, we have room for improvement.
Sustainable and profitable
growth through investments
We want to respond to the rapid growing demand for sustainable,
high-quality packaging materials. In 2021, we made decisions on
two investments, which together will increase our annual paper-
board capacity by around 240,000 tonnes. We expect additional
capacity to be fully available in our main markets from 2026
onwards. With these investments we strengthened our leading
position in Europe and continue to grow in North America, where
our sales are supported by competitive products, an ecient
supply chain and excellent customer service. In 2022, we will start
up a new recovery boiler and turbine at Husum. This will increase
our self-suciency in electricity production, and further strengthen
Husum’s position as a sustainable platform for the development of
first-class paperboard production.
Global leader in sustainability
We have set ourselves ambitious sustainability targets, which we
aim to achieve by the end of 2030. Among other things, we are
aiming for fully fossil free production and products. Achieving
these targets requires investments and close cooperation with
our partners. Combating climate change and securing forest
biodiversity call for measures and development projects which we
are implementing as part of Metsä Group.
Our determined sustainability work received valuable recogni-
tion when CDP, the global non-profit organisation, added Metsä
Board to its ‘A List’ for combatting climate change and sustainable
use of water resources and forests.
I am very proud of our achievement of the highest ‘A List’ in all
three of CDP’s environmental themes. It is an acknowledgement
for our leadership in the fight against climate change and our
uncompromising commitment to sustainability.
Metsä Board’s business was in a strong shape in 2021. Demand
for our fresh fibre paperboards was at a record high in all our
market areas, and price increases improved our profitability.
Our paperboard delivery volumes grew by 6% from the previous
year and exceeded 1.9 million tonnes. Our comparable return on
capital employed was 18.7%, which is clearly above the long-term
target level. With our strong performance, we were able to meet
the challenges of rapid cost inflation and complications related to
logistics. The cooperation agreement signed early in the year with
Norra Skog, a Swedish forest owners’ cooperative, made Metsä
Board a net debt-free company and strengthened our sustainable
wood management, particularly in Sweden.
A clear strategy yields results
We have a clear strategy which has proved its eectiveness during
the COVID-19 pandemic and made us increasingly competitive.
We focus on sustainable and premium paperboards, develop our
services, and innovate new packaging solutions in cooperation
with our partners. Our growth is profitable and sustainable. We
enable and monitor to ensure that our personnel have the needed
6
REVIEW BY THE CEO
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Review by the CEO
Long-term and focused R&D work
in cooperation with customers
As the amount of packaging increases, we need resource-ecient
and easily recyclable packaging solutions that we develop together
with our customers and partners. Our high-quality lightweight
paperboards help to reduce the carbon footprint of packaging
throughout the packaging chain. Growth in the sales of our
dispersion coated barrier paperboard, which reduces the use of
plastic, has been rapid and we expect this trend to continue. Our
Excellence Centre in Äänekoski, Finland, and our 360 Services
deepen the R&D work we are carrying out with our customers.
A good outlook
As we head into 2022, the outlook for the global economy is
favourable, although a prolonged COVID-19 pandemic and the
functionality of the logistics chain are a source of uncertainty. I
believe that the demand for our sustainably produced paperboards
will remain strong as the circular economy and plastic reduction
stay on the agenda of brand owners and consumers. This has been
visible through our strong order book and the increased prices of
our paperboards.
Metsä Board’s Board of Directors proposes that a dividend of
EUR 0.41 per share be distributed for 2021. The proposal is in line
with our dividend policy and reflects the trust in our ability to keep
generating a strong cash flow.
Success starts with people. I wish to extend my sincere thanks
to our entire personnel for their work under the exceptional circum-
stances, and to all our partners for their excellent collaboration.
Mika Joukio
CEO
We want to respond to the
rapid growing demand for
sustainable, high-quality
packaging materials.
7
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Highlights in
2021
Paperboard demand was at a record high
throughout the year, thanks to an increase in
sales in the retail sector and e-commerce
driven by the COVID-19 pandemic. Demand
was also strengthened by the desire of brand
owners to find more sustainable and easily
recyclable packaging solutions and reduce the
use of plastic.
We made progress in terms
of our 2030 fossil free targets
We progressed towards fossil free mills by phasing out the use of
peat in our energy generation at the Kyro mill and by reducing the
use of peat at the Simpele mill. This cut the fossil-based carbon
dioxide emissions of these mill to a significant degree. The new
recovery boiler and turbine will start up in September 2022.
Once in operation, the new recovery boiler will increase the mill’s
bioenergy generation and self-suciency in electricity.
Programme to safeguard biodiversity
Metsä Group has been implementing its programme on the
ecological sustainability of commercial forests since 2020, to
secure the biodiversity of forest nature. With the nature manage-
ment programme established in 2021, we are also taking part
in improving the state of Finnish nature outside of commercial
forests.
New service package helps to
make the most of paperboard
We launched the new 360 Services approach with which we help
our customers improve the sustainability and performance of
packaging throughout the value chain.
We are responding to the
growing demand for sustainable
packaging materials
Metsä Board made an investment decision to increase the fold-
ing boxboard capacity at the Husum integrated mill in Sweden by
200,000 tonnes a year. We launched a development programme
at the Kemi paperboard mill, which will increase the annual
capacity of white kraftliners by roughly 40,000 tonnes.
8
BUSINESS OPERATIONS AND VALUE CREATION
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Business operations and value creation
‘Metsä For All’ promotes
a more equal workplace
As part of Metsä Group, Metsä Board is committed to the
development of a responsible culture that supports equality. The
‘Metsä For All’ vision describes the
kind of workplace we want to be in
the future. The personnel’s equality
training, the adoption of anonymous
recruiting, and increasing the share
of women in executive positions are
examples of the practical measures
we are taking in this area.
We helped our customers
reduce the use of plastic
Reducing the amount of plastic waste is more important than
ever, a fact visible in the solid growth in the demand for our
dispersion-coated barrier paperboard. In cooperation with the
Finnish start-up The Paper Lid Company, we also introduced a fully
recyclable paperboard lid suitable for paper cups to the market.
We won both
the Finnish Circular
Economy Award and the
Finnish Quality Award
Metsä Board was presented with the circular
economy award, the first in the world to be
based on an external assessment. Laatuke-
skus Excellence Finland presented the award
in recognition of our strategic sustainability
work, which is reflected in our high level of
competitiveness. We also won the Finnish
Quality award.
9
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Purpose
Advancing the bioeconomy and circular
economy by eciently processing northern
wood into first-class products.
Megatrends
Vision
Preferred supplier of innovative and
sustainable fibre-based packaging solutions,
creating value for customers globally.
Strategy
We grow in fibre-based packaging materials
and renew our industrial operations.
Our strategy highlights solutions
that promote the circular economy
We are a leading European producer of premium fresh fibre paperboards and a forerunner
in sustainability. Our decision making is guided by our profitability and sustainability targets
and the ambition to increase shareholder value. Our goal is to maintain a strong financial
position and distribute a competitive dividend to our owners. We reviewed our strategy at the
end of 2021 and updated our strategic programmes.
Values
Reliability
Responsible
profitability
Cooperation
Renewal
UrbanisationPopulation growth
Climate change
Biodiversity loss
Digitalisation
10
20
15
10
5
0
60
50
40
30
20
10
0
17 18 19 20 21 17 18 19 20 21
17 18 19 20 21
2021 2030
BUSINESS OPERATIONS AND VALUE CREATION
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
We invest in
sustainable and
profitable growth
Metsä Board has significant
investments ongoing to meet the
growing demand for sustainable
and premium packaging materials.
In 2021–2022, the total investments
will exceed EUR 500 million.
At the Husum integrated mill, we
will increase the annual production
capacity of folding boxboard with
approximately 200,000 tonnes.
We expect the investment be
completed in the second half of
2023.
At the Kemi mill, a development
programme is ongoing to increase
the annual production capacity of
white kraftliners by 40,000 tonnes.
The development programme will
also improve the energy eciency
per tonne of paperboard produced
and reduce water use.
The ongoing pulp mill renewal at the
Husum integrated mill will further
strengthen Husum’s position as an
ecient and sustainable platform
for a long-term development of
premium paperboard production.
The first phase of the renewal, the
new recovery boiler and turbine,
is expected to be completed in
September 2022. In the second
phase of the renewal, during 2020s,
the mill’s fibre line will be renewed.
COMPARABLE RETURN
ON CAPITAL EMPLOYED
%
INTEREST-BEARING NET
DEBT / COMPARABLE
EBITDA
DIVIDEND /
NET RESULT
Target > 12% Target < 2.5 Target > 50%
Our financial targets
2.5
2.0
1.5
1.0
0.5
0
-0.5
Our strategic programmes
We implement our strategy through five strategic programmes that drive
sustainable growth in fibre-based packaging materials and industrial eciency.
Premium supplier
Eective innovation
Safe and ecient operations and organic growth
Leader in sustainability
Motivated people
Operating environment supports
growing demand for fresh fibre paperboards
• Population growth, urbanisation and rising living standards
drive packaging
• Global e-commerce continues to grow
• Availability and quality of recycled fibre is declining
• Regulation and consumer preferences favour fossil free packaging
materials
• The requirements of the circular economy become more specific
and drive the development of the industry
11
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Resources Business model
People and partnerships
• 2,400 employees in 18 countries
• 62 apprentices
• Active cooperation with local communities and educational
institutions
Production and supply chain
• More than 3,700 suppliers
• 8 production units in Finland and Sweden
• Deliveries to approximately 100 countries
• An ecient and global supply chain
• R&D expenditure EUR 6 million
• An Excellence Centre in Äänekoski, Finland, and a satellite
centre in Norwalk, the United States
Natural resources
• 8.3 million m
3
of sourced wood of which 83% is certified
• 315,000 dry tonnes of purchased pigments, adhesives and
other raw materials
• Total energy consumption 11.9. TwH of which 85% is fossil
free
• Water intake 115 million m
3
Economic capital
• Capital invested EUR 2.3 billion
• 55,000 shareholders in B series and 9,000 in A series
We focus on sustainable fresh fibre paperboards and innovative
packaging solutions that support the circular economy. We are part
of Metsä Group, and benefit from its unique value chain, from pure
northern fibre to premium end products. Our holding in our associ-
ated company Metsä Fibre ensures our self-suciency in pulp.
We create value and well-being,
with respect for nature
We help our customers achieve their sustainability targets with our packaging
paperboards and our expert services that support the circular economy. We are
continuously looking for opportunities to grow profitably and sustainably, and to
generate value for our stakeholders with our operations.
OTHER
5% (of sales)
MARKET PULP
13% (of sales)
FOLDING BOXBOARD
57% (of sales)
OUR SALES IN 2021
EUR 2,084 million
WHITE KRAFTLINERS
25% (of sales)
12
BUSINESS OPERATIONS AND VALUE CREATION
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
ImpactsOutputs
Customers
• Recyclable and sustainably produced products with a
smaller carbon footprint
• Innovative and material-ecient packaging solutions that
help reduce the use of plastic
• Customer satisfaction NPS (Net Promoter Score) 40
Suppliers
• EUR 1.5 billion purchases from suppliers
• 98% of suppliers are committed to the Supplier Code of
Conduct:
Personnel
• EUR 216 million paid to employees as wages and benefits
• 99% of the personnel have completed the Code of Conduct
training
Shareholders
• A sustainable investment; several recognitions from ESG
evaluations conducted by third parties
• EUR 146 million distributed to shareholders as dividends
• 18.7% comparable return on capital employed
Common value creation
• EUR 32 million paid income and property taxes
• Total investments EUR 220 million
• Aiming for 100% fossil free future, science-based targets
Further information on taxes on p. 158
Sustainable products and services
• 1.9 million tonnes of premium fresh fibre paperboards
• 1.4 million tonnes of pulp and high-yield pulp
• 5 service entities that generate benefits throughout the
packaging value chain (360 Services)
Emissions and side streams
• Fossil-based CO
2
emission 429,000 tonnes (Scope 1 and 2,
market based)
• 99% of the used water is returned to the waterbodies after
treatment
• More than 99% of production side streams are used as
materials or energy
Read more on pp. 48–49
13
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
The COVID-19 pandemic has
impacted consumer behaviour
The pandemic has shifted consumption from services to goods and accelerated the
online shopping of groceries in particular. The amount of packaging materials ending up in
homes has drawn consumers attention to recyclability of packaging. Metsä Board’s pure,
lightweight and easily recyclable paperboards made from renewable raw materials meet
well with consumer requirements.
The eects of the COVID-19 pandemic on consumer behaviour and implications to Metsä Board
The eects of the pandemic Implications to Metsä Board
Eating habits
• At the beginning of the pandemic, eating
moved from restaurants into homes. The
consumption of ready-made meals and
alcoholic beverages as well as cooking at
home increased.
• Eating at foodservice outlets has increased
when the restrictions set due to the pandemic
have eased.
• The majority of Metsä Board’s paperboards are
used in the packaging of foods.
• Metsä Board’s dispersion-coated barrier
board is well suited for takeaway and fast food
packaging.
Health and hygiene
• During the pandemic, consumers have paid
special attention to general hygiene, holistic
well-being and immunity.
• Demand for packaged products increased
during the pandemic, but in the coming years,
the focus will be on reducing over-packaging.
• Demand for preventative consumer health
products, such as vitamins and dietary supple-
ments , will grow.
E-commerce
• E-commerce accounted for 19% of total retail
trade in 2021. Growth in online groceries was
exceptionally strong.
• By 2025, e-commerce is expected to account
for 23–24% of total retail trade
(Source: eMarketer).
• The growth in e-commerce increases especially
demand for corrugated materials.
• The rising demand for experiences and sales
promotion supports the use of white kraftliners.
• As handling increases, so do the strength
requirements for consumer packaging.
Reduction of packaging
materials and plastic
• While the role of plastic in guaranteeing
product safety was acknowledged during the
pandemic, concern over its environmental
hazards remains high.
• Reuse, recyclability and compostability are
key measures to decrease waste and littering
of single-use items.
• Paperboards replace plastic in packaging.
• Metsä Board’s folding boxboards are lighter and
have a smaller carbon footprint than competing
paperboard grades.
• Metsä Board’s 360 Services help to improve
sustainability of packaging and performance
throughout the value chain.
14
BUSINESS OPERATIONS AND VALUE CREATION
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
At the beginning of 2021 Nestlé announced
that its popular Smarties brand is now
using recyclable paper packaging for its
confectionery products worldwide. This
represents a transition of 90% of the
Smarties range, as 10% was previously
already packed in recyclable paper
packaging. Smarties is the first global
confectionery brand to switch to recyclable
paper packaging, removing approximately
250 million plastic packs sold globally every
year.
Smarties Giant Hexatube is a plastic-free
pack, comprised of a one-piece con-
struction made entirely from recyclable
paperboard with an integrated
cartonboard lid. The carton was pro-
duced by WestRock on MetsäBoard
Pro FBB Bright lightweight paper-
board. It won the Public Award at the
2021 European Carton Excellence
Awards in September 2021.
(Source: Nestlé.com/Media/News)
Paperboards
are replacing
plastic in
packaging.
Metsä Board’s fresh fibre paperboards are especially used in food packaging
Smarties switched to
recyclable packaging
END USES OF FOLDING
BOXBOARD
%
END USES OF WHITE
KRAFTLINERS
%
Food and food service
packaging
Other consumer products
(including the packaging
of pharmaceuticals and
cosmetics)
Graphical end uses
Shelf-ready packaging,
in-store sales racks and
point-of-sale solutions
Other consumer
packaging
E-commerce
Source: Metsä Board’s estimates
15
SUSTAINABILITY
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Paperboard market
AMERICAS EMEA APAC
Regional emphasis
• Continued growth in North
America
• Maintaining strong market
position in Europe
• Focus on high quality
packaging in selected end
use segments
Paperboard deliveries in 2021
• share of all deliveries by
region
27% 67% 6%
Demand outlook for folding
boxboard and white kraftliners
• Limited local availability of
lightweight high-quality folding
boxboards and coated white
kraftliners
• Demand growth for recyclable
and/or compostable food and
food service packaging made
from renewable raw materials
• Growth of demand for retail-
ready packaging in stores
• Promotion and dierentiation of
brands in growing e-commerce
• Environmental awareness
and regulation support
the demand for recyclable
packaging materials
• Food safety requirements
favour pure fresh fibre
paperboards
• Growth of demand for retail-
ready packaging in stores
• Growth of e-commerce
• Weakened availability and
higher price of recycled fibre
• Growth of the middle class
increases consumers’
purchasing power and
demand for packaged
products
• China’s import ban on
recycled fibres increases
demand for pulp and fresh
fibre paperboards
• Growth of local
paperboard capacity
boosts supply in China
Metsä Board has a well established position in the company’s main markets, Europe and North America
Consumer trends support paperboard market growth
The global packaging market is valued at approximately EUR 900
billion, of which paperboard packaging accounts for roughly a third.
Both fresh and recycled fibres are used in paperboard production,
depending on end use requirements. Quality, product safety and
hygiene requirements are decisive factors impacting the choice.
Metsä Board uses only pure and safe fresh fibre in the production
of paperboard.
Global demand for premium fresh fibre paperboard has grown
by around 2–3% a year, and similar growth is expected in the next
few years. The COVID-19 pandemic has intensified demand for
pure and safe packaging materials, particularly for end uses in the
food industry.
In 2021, demand for folding boxboard and white kraftliners was
strong in almost all end uses in Metsä Board’s main market areas
Europe and North America.
We operate in a
growing market
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Metsä Board is Europe’s largest producer of folding boxboard and white kraftliners
Source: Hawkins Wright
OTHER
7 million tonnes
SOFTWOOD PULP
26 million tonnes
MARKET PULP
69 million tonnes
CONSUMPTION OF
FRESH FIBRE
171
million tonnes
INTEGRATED PULP
102 million tonnes
HARDWOOD PULP
36 million tonnes
Pulp market
EUROPEAN PRODUCERS OF
WHITE KRAFTLINERS IN EUROPE
Total capacity 2.6 million tonnes
PRODUCERS OF
FOLDING BOXBOARD IN EUROPE
Total capacity 4.5 million tonnes
Metsä Board 26%
Peer 1 21%
Peer 2 16%
Peer 3 12%
Peer 4 8%
Others 16%
Metsä Board 30%
Peer 1 22%
Peer 2 17%
Peer 3 5%
Peer 4 5%
Others 20%
Sources: the companies’ websites, RISI, Metsä Board’s own estimates
UNBLEACHED PULP
3 million tonnes
HIGH-YIELD PULP (CTMP)
4 million tonnes
Global demand for market pulp amounts to approximately 69 million tonnes a year
Global consumption of pulp made from fresh fibre amounts to
around 171 million tonnes a year, of which some 69 million tonnes is
primarily bleached softwood and hardwood pulp sold to markets.
Global demand for the market softwood pulp important to Metsä
Board is estimated to grow, with the growth driven particularly by
China.
Metsä Board’s associated company Metsä Fibre is a leading producer of market softwood pulp (NBSK)
Metsä Board
is the biggest
producer of
coated white
kraftliners
globally.
Metsä Board aims to be self-sucient in pulp, which ensures
consistent high quality in paperboard production. Metsä Board
produces chemical pulp and bleached chemo-thermomechanical
pulp (BCTMP), which are used in our own paperboard production,
and some sold as market pulp. In addition, Metsä Board has 24.9%
holding in its associated company Metsä Fibre, which is a leading
producer of wood-based bioproducts such as pulp, sawn timber,
biochemicals and bioenergy. Metsä Fibre’s annual capacity is
approximately 3.3 million tonnes of pulp and 1.8 million cubic
metres of sawn timber.The pulp produced by Metsä Board and
Metsä Fibre is primarily softwood pulp.
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SUSTAINABILITY
FINANCIAL
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Our R&D work considers
the entire life cycle of a package
As the amount of packaging grows, we need resource-ecient and easily recyclable
solutions. It is the common goal of customers and Metsä Board to make packaging lighter
and to reduce plastic with renewable raw materials and reduce emissions.
Thanks to long-term focused development work, Metsä Board has
a leading position in the quality and performance of paperboard
materials. Both our folding boxboards and white kraftliners
receive the highest quality assessments. In cooperation with our
customers and partners, we invest strongly in innovative solutions
to optimise performance throughout the life cycle of packages.
The development work centres on the paperboard’s good print-
ing and conversion properties as well as on reducing its weight,
without compromising its strength. Lightweight paperboards
are resource-ecient and help to reduce the carbon footprint of
packaging throughout the chain.
The market has a strong need for recyclable
solutions that can replace plastic
The dispersion-coated barrier paperboard we launched two years
ago helps brand houses to reduce the use of plastic and make their
packaging recyclable. The growth in the sales of this product was
strong in 2021 in food industry end uses, including the packaging
of confectionary, pastries and takeaway foods. The growth is also
expected to continue.
Metsä Board has launched a biobarrier programme. The
starting point for the solutions and polymers to be developed
is that they will be based on fossil free raw materials, according
to our 2030 sustainability targets. Development work is done in
collaboration with partners.
Deeper customer cooperation
We invest in service development which helps our customers to
make the most of our paperboard and optimise the performance
of packaging throughout its life cycle. Our new 360 Services cover
five areas: Sustainability Service, Packaging Design Service,
Technical Service,
Mars Wrigley UK has replaced the old multi-layer box
design, where the PE plastic liner covered the box,
with a dispersion coated barrier paperboard. The
company says the new design will reduce its annual
plastic usage by 82 tonnes. The new Maltesers
box uses Metsä Board’s dispersion coated barrier
board, which is fully recyclable, biodegradable and
compostable.
Mars Wrigley UK’s
Maltesers boxes now fully
recyclable
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R&D Service as well as the Supply Chain and Digital Service.
Examples of the above-mentioned services include carbon
footprint calculations for packaging materials and computer-based
packaging simulation, which enables the digital modelling of
prototype packages as well as the optimisation of material and
structural choices.
For over a year now, we have held development workshops at
Metsä Board’s Excellence Centre in Äänekoski, in which our teams
of experts have developed new packaging solutions in cooperation
with customers. The virtual workshops have brought together both
Metsä Board’s and customers’ multi-skilled specialists on product
development, sustainability and packaging design, for example. In
2021, we held 25 of these workshops.
ExpandFibre is progressing
Metsä Group and Fortum’s ExpandFibre programme, which
promotes the circular bioeconomy, moved forward in the form of
concrete projects. The construction work of the 3D demo plant of
Metsä Group’s innovation company Metsä Spring and Valmet has
progressed, and production is expected to start up during the first
half of 2022. Metsä Board was actively involved in new research
consortiums and projects focused on innovative packaging
solutions. Three projects were kicked o in 2021, with topics
ranging from the reuse of packaging to fossil free polymers for
coating and a new paperboard folding technique intended for the
implementation of novel applications. These projects involve a total
of 44 partners – business enterprises, research institutions and
public sector organisations.
AI facilitating improvements in production
eciency and process control
We employ artificial intelligence in production at our Kemi, Kyro
and Simpele mills, and its use is also being tested at our other
mills. AI allows us to anticipate process deviations, which improves
a mill’s eciency and reduces quality deviations and idle time.
It also allows operators to develop their own competence at the
same time. At the Tako mill, we have tested the integration of our
paperboard machine into our customer’s production line. When the
production lines interact with each other, the parameters can be
optimised at both ends.
The state-of-the-art 3D technology
enables the simulation of the performance
of materials and packaging under dierent
conditions. Optimum material selections
and packaging designs help to reduce
carbon footprints. Compared to a physical
prototype, 3D simulation allows us to
come up with material and packaging
design recommendations for customers
85% faster.
We minimise the
environmental impact of
packaging with Dassault’s
simulation platform
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DEVELOPMENT GOVERNANCESUSTAINABILITY
Our 2030
sustainability targets
Our sustainability targets guide our journey towards a fossil free
circular economy and an increasingly responsible corporate culture.
Well-being
Forests and
wood
100%
responsible corporate
culture
> 90%
certified wood fibre
0
accidents at work
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Sustainability
Sustainable
products
Climate
and
environment
100%
fossil free
products
100%
traceable raw
materials
100%
sustainable
suppliers
100%
fossil free
energy
> 10%
better energy
eciency
100%
of side streams
utilised
30%
less of process
water used per
tonne produced
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DEVELOPMENT GOVERNANCESUSTAINABILITY
TARGET TARGET 2030 ACTUAL 2021
DEVELOPMENT
IN LINE WITH
TARGET
WELL-BEING
A responsible corporate culture
Ethics index of the Ethics barometer 100% *
An accident-free working environment
Total Recordable Injury Frequency (TRIF) per million hours worked 0 9.8
FORESTS AND WOOD
Certified wood fibre
Share of certified fibre > 90% 83%
SUSTAINABLE PRODUCTS
Fossil free products
Fossil free raw materials and packaging materials, share of dry tonnes 100% 99.2%
A sustainable supply chain
Traceability of raw materials, share of total purchases 100% 98%
Suppliers’ commitment to the Supplier Code of Conduct, share of total purchases 100% 98%
Supplier background check passed, share of total purchases 100% 92%
Supplier sustainability assessment passed, share of total purchases 100% 54%
CLIMATE AND ENVIRONMENT
Fossil free mills and fossil free purchased energy
Fossil-based carbon dioxide emissions, tonnes (Scope 1 and Scope 2, market based) 0 t 428,838 t
Share of fossil free energy 100% 85%
Resource-ecient production
Improvement in energy eciency from the 2018 level >10% +1.9%
Reduction in the use of process water per produced tonne from the 2018 level -30% -13.5%
Utilisation of side streams 100% 99.8%
* In 2021, we implemented the selected development actions based on the results of the previous Ethics baromter survey.
The next Ethics barometer will be conducted in 2022.
Progress in our
2030 targets
In 2021, we reduced the use of process water, increased the share of certified
wood fibre, and invested in ensuring supplier responsibility. For safety at work,
development was not in line with our targets.
Our equality targets and ‘Metsä For All’
vision promote the equal treatment of our
entire personnel.
Read more on pp. 30–35
Metsä Group’s wood supply is responsible
for all our wood supply and has set targets
for securing biodiversity.
Read more on pp. 38–43
Our targets for reducing our greenhouse
gas emissions have been approved by the
Science Based Targets initiative.
Read more on pp. 52–55
Good development
Moderate development
Room for development
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UN SUSTAINABLE DEVELOPMENT GOAL OUR OPERATIONS
GOAL 6
Clean water and sanitation
Our mills are located in areas with ample water resources. We use only surface water in our production,
and our water use does not weaken the availability of water for others. We use water sustainably and re-
source eciently, and we aim to reduce the use of process water. Approximately 99% of the water we use
is returned to waterbodies. Before that, all process waters are treated with the best available technology.
GOAL 7
Aordable and clean energy
We are a significant producer and user of renewable energy. Roughly half of the energy used by our mills is
renewable, and we intend to stop the use of fossil-based energy in our production. We also aim to continue
improving our energy eciency.
GOAL 8
Decent work and economic growth
We invest in innovative and resource-ecient future packaging solutions. We provide employment for
some 2,400 people, and our indirect employment impact is a lot bigger. We pay special attention to safety
at work. Our target is zero accidents. We comply with high ethical standards and expect our partners to do
the same.
GOAL 9
Industry, innovation and
infrastructure
We continue to improve our resource eciency and processes and invest in new, sustainable industrial
concepts and technologies and in renewable energy. We aim for fossil free production both in terms of
energy use and raw materials. We are actively involved in research, development and innovation networks.
GOAL 12
Responsible consumption and
production
We promote the circular economy throughout the value chain. Our paperboard is made from renewable
fresh fibre which is fully traceable and comes from sustainably managed forests. Our paperboards are
light in weight and their production consumes less raw materials, energy and water than the production
of heavier paperboard grades. The light weight is also an advantage in transport. After use, lightweight
paperboards generate less waste than heavier packaging materials. All our paperboards are designed
to be recyclable or compostable. They also provide an alternative to fossil-based packaging materials. In
production, we put side streams to use in the recycling of materials or energy production, and our target is
to generate no landfill waste at all. We prioritise the safety of both our employees and the consumers. We
comply with standards that exceed the requirements set by legislation.
GOAL 13
Climate action
We promote a low-carbon economy by improving our energy eciency and aiming for fossil free produc-
tion. Our target is for all our mills to use only fossil free energy. We are also aiming for a fossil free future in
terms of our raw materials and packaging materials. By sourcing wood solely from sustainably managed
forests we ensure that forests grow more than they are used and function as carbon sinks.
GOAL 15
Life on land
All the wood raw material we use is traceable and comes from sustainably managed forests, which are
either certified (PEFC, FSC®) or meet the criteria for controlled origin. Our target is to keep increasing the
certified fibre’s share out of all the wood fibre we use. Sustainable forest management does not cause
deforestation rather, it supports biodiversity. We promote biodiversity in harvested areas with groups of
retention trees, for example, and with high biodiversity stumps, buer zones around natural waterbodies,
by increasing the share of mixed forests and by protecting habitats.
Sustainability
Our targets support the UN’s
Sustainable Development Goals
Our sustainability targets and operating methods support the UN’s Sustainable
Development Goals. Of the 17 goals set by the UN, we have selected seven which we can
influence the most with our own operations.
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BUSINESS OPERATIONS
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FINANCIAL
DEVELOPMENT GOVERNANCESUSTAINABILITY
Sustainability is part of
everything we do
At Metsä Board, sustainability is based on compliance with good corporate governance, bearing
social and environmental responsibility, respecting business ethics and human rights as well as the
continuous improvement of operations with respect to all of the above. In addition to our own
operations, we also expect sustainability from our suppliers, customers and other partners.
Our work and decision making are guided by Metsä Group’s Code
of Conduct, complemented, among other things, by policies
concerning personnel, equality, environmental matters and
information security. From our suppliers, we require a commitment
to our Supplier Code of Conduct. All our mills apply quality, occu-
pational health and safety, environmental and energy eciency
management systems (ISO 9001, ISO 45001, ISO 14001, ISO
50001) as well as the management and monitoring system ISO
22000 required by food safety. In addition, the mills which also
produce paperboard for food packaging apply the FSSC 22000
food safety system.
We are party to a number of
international commitments
We respect internationally recognised human rights in accordance
with the United Nations’ Universal Declaration of Human Rights
and the International Labour Organization’s (ILO) Declaration
on Fundamental Principles and Rights at Work. We comply with
legal reporting obligations, such as the United Kingdom’s Modern
Slavery Act, and do not approve child labour or forced labour.
We are committed to operating according to the UN’s principles
concerning business operations and human rights, and we require
the same from our business partners. We support the UN’s Global
Compact initiative and its principles of human rights, labour, the
environment, and anti-corruption, as well as the UN CEO Water
Mandate. Our sustainability targets, which extend to 2030,
contribute, for our part, to the realisation of the UN’s Sustainable
Development Goals. Our targets for reducing greenhouse gas
emissions have been approved by the Science Based Targets
initiative. Our sustainability targets are presented on pages 22–23.
Sustainability is part of our strategy
At Metsä Board, the realisation of sustainability is monitored
and supported by the company’s Board of Directors, CEO and
Corporate Management Team. Sustainability is incorporated in
the strategy approved by the company’s Board of Directors and
in the company’s long-term business and investment plans, risk
assessments and annual action plans.
The Board discusses and approves the sustainability targets
presented by the CEO and monitors their realisation on an annual
basis. The sustainability targets are based on Metsä Group’s
strategic sustainability objectives and an extensive corporate
responsibility materiality analysis, last completed at Metsä Group
in 2018. The analysis accounted for the impact that Metsä Group’s
operations have on society and the environment, as well as the
stakeholder perspective.
The CEO is responsible for the implementation of the sustain-
ability measures in accordance with instructions provided by the
Board. The CEO reports to the Board on key sustainability issues
in several Board meetings each year. Important topics include the
progress made in terms of the set targets, the planned measures
and investments for achieving the targets, the results of external
ESG evaluations, and an environmental review. The results of the
company’s risk assessment, including risks related to sustainabil-
ity, are presented to the Board and the Audit Committee twice a
year.
The company’s Corporate Management Team prepares sus-
tainability-related issues before they are presented to the Board by
the CEO. Of the members of the Corporate Management Team, the
Senior Vice President, Development, is responsible for research,
product and business development, and sustainability. The SVP,
Development, takes part in Metsä Group’s Sustainability Process
Management Team, and quarterly reports on the realised results of
sustainability measures to the Sustainability Process Management
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Sustainability
Team . The CFO chairs Metsä Board’s risk committee, which deals
with sustainability-related risks as part of the company’s general
risk assessment.
The CEO; SVP, Development; and SVP, Production, have deter-
mined annual targets related to sustainability which impact the
amounts of their personal remuneration. From 2022 onwards, all
Metsä Board’s employees will have an ESG target included in their
personal performance bonus targets.
Metsä Board’s Product Safety and Sustainability Director
reports on the realisation of sustainability and development needs
to the company’s SVP, Development, and presents topical sus-
tainability issues to the entire Corporate Management Team on a
regular basis. The amount of the Product Safety and Sustainability
Director’s personal remuneration is impacted by targets related to
the company’s performance in sustainability matters.
Sustainability is part of the entire personnel’s daily work. The
Product Safety and Sustainability Director leads a team of experts
which works in close cooperation with production, wood supply,
sourcing and logistics, HR, marketing and sales, communications,
investor relations and legal aairs. Wood supply, as well as sourcing
and legal aairs, are centralised in Metsä Group.
We also exercise due diligence in ensuring the sustainability of
our value chain. Further information on this can be found on pages
44–46.
Sustainable and ethical operations, as well as compliance with the law, are the foundation of Metsä Board’s business operations.
The Code of Conduct and sustainability targets are based on Metsä Group’s policies and strategic sustainability objectives.
Board of Directors
Corporate Management Team
Product Safety and Sustainability
Director
Business functions
Metsä Group Sustainability Process
Management Team
SUSTAINABILITY GOVERNANCE AT METSÄ BOARD
“We want to be a leader in sustainability. We pursue targets
for development that allow us to advance sustainability
systematically, by means of continuous improvement,”
says Markku Leskelä, SVP, Development, appointed to the
Corporate Management Team in 2021.
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BUSINESS OPERATIONS
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DEVELOPMENT GOVERNANCESUSTAINABILITY
We take part in advocacy
as part of Metsä Group
Our advocacy eorts focus on developing regulations both at
national and European Union level. Topics relevant for the paper-
board and packaging industry at the EU level include the promotion
of the circular economy, sustainable product policies as well as
the revision of the Packaging and Packaging Waste Directive. We
are also monitoring the implementation of the Single-Use Plastics
Directive in EU member states.
We have a voice in several organisations
Metsä Board furthers the recyclability of fibre-based packaging
and participates in the activities of the 4evergreen alliance, which
brings together the entire packaging value chain. In 2021, our
representatives were active in 4evergreen’s Steering Group and
Public Aairs and Advocacy Group.
We also promote fibre-based food packaging that is sustainable
in terms of the environment and health, and participate in the
activities of the European Paper Packaging Alliance (EPPA). As part
of Metsä Group, we are an active member in the Confederation of
We focus on promoting the role of forests, the forest industry, and wood-based products in
mitigating climate change and securing biodiversity. We increase understanding of the bio-
economy as part of the circular economy, fresh fibre as an enabler of the fibre cycle, the
benefits of wood fibre-based packaging materials, and of product and food safety.
European Paper Industries (Cepi), which supports the EU’s goal of
achieving climate neutrality by 2050. As of the beginning of 2022,
the President and CEO of Metsä Group is acting as the Chair of
Cepi.
We are involved in number of national-level trade and industry
associations. The most important associations are the Finnish
Forest Industries Federation and the Swedish Forest Industries
Federation.
Metsä Group’s parent company, Metsäliitto Cooperative, is
registered with the EU Transparency Register, maintained by the
European Parliament and European Commission, and has signed
the register’s Code of Conduct.
Disposable fibre packaging has
environmental advantages
In 2021, EPPA published a life cycle assessment carried out
by the independent consulting firm Ramboll, according to
which the single-use fibre-based food and beverage pack-
aging used in European quick service restaurants generates
considerable environmental benefits compared to reusable
tableware. During its life cycle, single-use fibre-based
packaging generates less CO
2
emissions and consumes less
water than reusable tableware, for example.
To learn more about the assessment, go to website
eppa-eu.org
“It is essential to know what is happening in our operating
environment,” says Ritva Mönkäre, Metsä Board’s
Communications Manager (left), an opinion shared by the
Brussels-based Tytti Peltonen, Vice President, Corporate
Aairs at Metsä Group.
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The focal points of our social engagement include
promoting the well-being of children and young people,
and reinforcing their relationship with nature. As part of
Metsä Group, we support the physical activity of children
and young people and oer coaching lessons to secondary
school students within the framework of the “Nuorelle
siivet” campaign, run by the Finnish Olympic Committee’s
Sports Academies. We also encourage children and youth
to get to know forests and the forest industry in cooperation
with 4H Finland and its local organisations. In addition, we
visit secondary schools to share information about the
opportunities oered by the forest industry, cooperate with
many educational institutions, and provide summer jobs,
traineeships and opportunities for the preparation of theses.
At Yrityskylä in Pirkanmaa province in Finland, ninth
graders again played a game in which pupils playing the
roles of imaginary members of Metsä Board’s Corporate
Management Team hammered out international deals on
paperboard products. The game involved a total of 2,000
young people across Pirkanmaa. “It is important for us
that children understand the forest industry’s importance
to Finland and the entire national economy, and see the
industry’s potential as a future employer. We want to
send a strong message about the sustainability of our
operations,” says Susanna Tainio, Vice President, HR,
Recruitment and HR Development at Metsä Group.
Paperboard deals
at Yrityskylä
We invest in the well-being
of children and youth
Metsä Board’s Äänekoski, Simpele, Joutseno and Kemi mills
took part in Metsä Group’s annual road safety campaign, based
on the national road safety week. The aim was to inspire teach-
ers and students, as well as their guardians, to think about road
safety issues with the help of a road safety animation, among
other things.
We improved
road safety
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BUSINESS OPERATIONS
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FINANCIAL
DEVELOPMENT GOVERNANCESUSTAINABILITY
Climate change creates
risks and opportunities
While the promotion of sustainability creates business opportunities for Metsä Board,
climate change and biodiversity also involve risks. At Metsä Board, these risks particularly
concern the use of forests, energy and water. Our reporting on these issues complies with
the recommendations of TCFD.
The transition risks and opportunities arise from the transition to a low-carbon economy, i.e. compliance with the goals of the Paris Agreement of
limiting global warming to less than 2, or preferably to 1.5, degrees.
Risks and opportunities Impact Management
Regulation The regulation aiming to combat climate change
and reduce greenhouse gas emissions poses sig-
nificant requirements for a new kind of production
technology and results in changes to the pricing
of energy and greenhouse gas emissions. This can
increase costs in both production and transport.
Metsä Board has set targets for improving energy eciency and shift to
the use of entirely fossil free energy in its production. We also encour-
age our suppliers to set targets for emission reductions.
Regulation that emphasises the use of forests
as carbon sinks and the protection of forests to
secure biodiversity limits harvesting volumes.
Metsä Group’s wood supply has set targets, the achievement of which
increases the sequestration of carbon in forests and helps secure the
biodiversity of forests.
We use our raw material resource-eciently to avoid waste in produc-
tion. Our aim is to make full use of the production side streams.
Regulation that acknowledges that forest industry
products can replace materials made from fos-
sil-based raw materials, the production of which,
furthermore, generates substantial amounts of
fossil-based emissions.
The main raw material of Metsä Board’s products is renewable wood
fibre and our target is for all our raw materials and packaging materials
to be fossil free. The use of fossil free energy in production and the light
weight of the products reduce their carbon footprint.
Markets and
reputation
Consumers’ critical attitude towards the use of
forests – forests are seen as carbon sinks or as
needing protection.
All the wood fibre we use is traceable and sourced from sustainably
managed forests which are certified or, at the least, meet the criteria for
controlled wood. Metsä Board communicates openly on the impact of
its operations and products with the help of life cycle assessments, for
instance, and aims for active dialogue with customers, suppliers and
other stakeholders.
Consumers favour easily recyclable packaging
made from a renewable, fossil free raw material.
The main raw material of Metsä Board’s products is renewable wood
fibre and our target is for all our raw materials and packaging materials
to be fossil free. The use of fossil free energy in production and the light
weight of the products reduce their carbon footprint. All our paper-
boards are recyclable and/or compostable. Good packaging design
allows us to further reduce the environmental impact of paperboard
packaging and increase recyclability.
Wood use is increasingly being directed to
products other than paperboard products (other
bio-based products).
Metsä Board participates in projects that develop new types of wood
fibre-based packaging solutions (such as ExpandFibre).
Wood is Finland’s most significant processed
natural resource, providing a good basis for the
bioeconomy, circular economy and innovations
based on a renewable raw material.
Metsä Board’s main raw material is renewable and recyclable wood
fibre. Paperboard already has an extensive recycling infrastructure,
and Metsä Board actively participates in the activities of organisations
promoting recycling (including 4evergreen and the European Paper
Packaging Alliance).
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The physical risks and opportunities involve changes in temperatures and precipitation, and they will materialise if climate change is not mitigated.
Acute changes Risks and opportunities Impact Management
Extreme
weather
phenomena
Storms, drought and floods cause disruptions
in production or complicate the transport of raw
materials and products.
Metsä Board prepares for the risks arising from extreme weather
phenomena through both company and mill-level risk assessments.
Examples of such measures include sucient reserves of wood, the
control of water levels with dam arrangements, and ensuring power
distribution in exceptional situations. The supply chain is preparing for
alternative partners or transport routes.
Chronic
changes Risks and opportunities Impact Management
Rising average
temperature
and changes in
precipitation
The increased frequency of droughts weakens
the availability of the process and cooling water
needed by mills and causes production breaks.
Metsä Board’s mills are not located in high water risk areas, which sup-
ports the company’s competitiveness in the face of climate change. The
company’s target to reduce the use of process water and enhance the
recycling of water within the process also reduces the water risk.
Increased precipitation and floods impair the
quality of surface waters, thereby impairing the
availability of process and cooling water and
causing production breaks.
Metsä Board has drawn up plans on how to secure paperboard deliver-
ies in the event that production is interrupted at one of its mills.
Harvesting conditions are complicated due to a
lack of snow and frost and because of increased
precipitation.
Metsä Group actively monitors which areas allow harvesting and what
are the alternative wood supply areas. When necessary, wood reserves
can be increased during good harvesting conditions. Metsä Board’s
long-term contract with Norra Skog increases the delivery reliability of
wood, particularly in Sweden.
Damage caused by snow, storms, drought, forest
fires, insects and fungi are increasing in forests,
and changes are occurring in the prevalence of
tree species. Alien species are likewise causing
problems in forests.
Metsä Group’s wood supply provides sustainable forest management
services which support forests’ adaptation to climate change and help
to secure the biodiversity of forests.
Global warming is expected to increase the
growth of forests and the wood removal, which
will increase the availability of wood and lower the
costs of wood supply.
Cooperation and long-term wood supply contracts (with e.g. Norra
Skog) will improve the delivery reliability of wood even further.
Potential negative impact on business operations Potential positive impact on business operations
Further information on TCFD and risk management
Reporting on climate-related risks and opportunities in accordance with TCFD’s
recommendations can be found on pages 74–75 of the Board of Directors’ report.
For a comprehensive description of Metsä Board’s business risks, see pages 76–79
of the Report of the Board of Directors, and for a description of risk management,
see pages 164–165 of the Corporate Governance Statement.
Read more about our business operations and climate change
from the perspective of the EU taxonomy.
The reporting on how sustainable our business is from the perspective of climate
change mitigation and adaptation to climate change, required by the European Un-
ion’s taxonomy on sustainable finance, can be found on pages 75–76 of the Report
of the Board of Directors.
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100
80
60
40
20
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AND VALUE CREATION
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DEVELOPMENT GOVERNANCESUSTAINABILITY
We are developing a responsible
and equal corporate culture
The Code of Conduct guides our way to work
Metsä Board is committed to Metsä Group’s Code of Conduct. The
commitment includes sustainability and a culture of doing the right
thing, such as respecting human rights and anti-corruption and anti-bri-
bery measures. The realisation of our principles and the personnel’s
sustainability skills are supported by regular training. In 2021, 99% of
our personnel had completed the Code of Conduct online training.
We also require responsible conduct from our customers, suppliers
and other partners. Read more about the background checks
performed on our business partners (third-party due diligence) as a
part of our Know Your Business Part process, and sustainability targets
regarding the supply chain, see pages 44–46.
We are committed to promoting a culture of doing the right thing and developing
our workplace community and ways of working to achieve even better results in
diversity and equality. Our development work is guided by common values, our
Code of Conduct, and the ‘Metsä For All’ vision, published in 2021.
TARGET
99% OF OUR PERSONNEL
HAVE COMPLETED THE CODE
OF CONDUCT ONLINE TRAINING
WELL-BEING
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The Ethics barometer promotes
a culture of doing the right thing
As part of our sustainability targets, we measure the responsibility
of our corporate culture with an Ethics barometer, which covers
the entire personnel and is conducted every other year. The Ethics
barometer measures our personnel’s experience of workplace
ethics and allows us to identify development needs and risks
related to our business ethics.
The Ethics barometer was conducted for the first time in 2020,
when our ethics index was at 85%. The target is 100% by the end of
2030. To achieve this, we organised training on whistleblowing, the
use of our Compliance and Ethics Channel, and the investigation
process related to reports for the entire personnel in 2021. Corpo-
rate management, managers and HR personnel also participated
in an in-depth Code of Conduct training session in autumn 2021,
covering topics such as ethical blindness, favouritism, equality, and
addressing and reporting grievances. A total of 248 people from
Metsä Board participated in these in-depth trainings. The training
topics were selected based on the development actions identified
by the results of the Ethics barometer.
Several new controls for identifying conflict of interest in our
recruitment and sourcing processes were introduced. Further-
more, we discussed practices that could increase the flexibility of
working life with our personnel, adopted a remote working model,
and made use of the results of the Ethics barometer in the determi-
nation of the ‘Metsä For All’ vision. The next Ethics barometer will
be conducted in 2022.
Compliance and Ethics channel is available to all
We encourage our personnel and stakeholders to raise their
concerns if they detect problems in our operations. Our Comp-
liance and Ethics Channel is available in ten languages and its
technological implementation is seen to by an independent third
party. Reports can be made anonymously. We are committed to
protecting the privacy of whistleblowers and do not condone any
counter measures against whistleblowers.
All breaches and violations, as well as suspected breaches and
violations, brought to the attention of the company are investi-
gated. The investigations are led by the Compliance Committee,
composed of the directors in charge of Metsä Group’s legal aairs,
compliance, and internal auditing. The Compliance Committee
ensures that the consequences demanded by the results of each
investigation are consistent in cases of equal gravity, and that the
corrective measures are adequate. Any illegal activities detected
“Achieving the ‘Metsä For All’ vision requires the courage to
shake up the status quo and question earlier practices. The
change will not happen on its own accord. Instead, it needs
to be managed just like any other thing key to business
operations. It is up to us all to make sure that our personal
actions correspond with the aim. It is the only way to make
the change permanent,” says Tarja Tudor, Metsä Group’s
Compliance Director.
Theme-related UN goal
31
2019 2020 2021 2022
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are reported to the authorities. We ensure that the changes
required by the EU Directive on the protection of whistleblowers
are implemented in our Compliance and Ethics channel and the
internal investigation of reported cases.
In 2021, Metsä Board became aware of a total of 10 (2020: 10)
cases or suspicions related for example to conflicts of interest,
inappropriate conduct or shortcomings in equal treatment. None
of the cases resulted in legal proceedings or concerned corruption,
bribery, or the use of child labour.
We respect human rights
Human rights issues are included in the Code of Conduct and
equality training aimed at the entire personnel, and in the Know
Your Business Partner training held for our sourcing and sales
personnel.
A study conducted by an independent party concerning the
human rights performance of 78 Finnish companies in relation to
the United Nations Guiding Principles on Business and Human
Rights (UNGP), was published in 2021. Metsä Group’s results in
the realisation of its human rights responsibility were average
compared to the other companies assessed. The study found that
targets for development could be found in both practical measures
and on how those measures are communicated in public. Con-
sequently, we continue to consider our human rights impact and
the ways in which we could promote their realisation and prevent
human rights-related risks in our operations.
We promote diversity, equality and inclusion
We want to ensure that personal characteristics – such as gender,
age, ethnic background, sexual orientation or disability – have no
impact on an individual’s opportunity to succeed in working life.
Diversity, equality and inclusion are promoted in the ’Metsä For All’
vision’ and measured according to set targets.
Our journey towards the ‘Metsä For All’ vision
Code of Conduct
update and Equality
Policy
Equality targets
and development
programme
First Ethics barometer
Online training on
diversity, equality
and inclusion for the
entire personnel
Additional training for manage-
ment and the topic’s inclusion in
leadership coaching
Determination and publication of the
‘Metsä For All’ vision and focal points
• Stakeholder interviews
• Survey for the entire personnel
• Management views
• Internal, international work group
Second Ethics barometer
The development of recruitment practices
that support diversity and equality, including
the adoption of anonymous recruitment
32
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20
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10
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Our equality targets:
• By the year 2025, 25% of Metsä Group’s leaders* are women
(*Vice President or higher)
• We promote equality with a training programme targeted at the entire
personnel
• There are no unjustifiable pay gaps between women and men
SHARE OF WOMEN AT METSÄ BOARD
2021 2020 2019
Women’s share of all employees, % 21.9 21.3 21.1
Women’s share in manager positions
1)
, % 22.8 23.0 21.0
Women’s share in executive management, VP, SVP or CEO, % 16.1 19.4 -
Women’s share in Corporate Management Team, % 14.3 33.3 33.3
Women’s share on Board of Directors, % 33.3 22.2 22.2
1)
Share of women within all managers. Figures do not include the subsidiary Hangö Stevedoring
REMUNERATION AT METSÄ BOARD AS A WHOLE AND BY PRODUCTION COUNTRY
Metsä Board Finland Sweden
Annual total earnings of person with highest wages com-
pared to the average total earnings of other personnel
27. 5 29.0 6.0
Women’s total earnings compared to men’s total earnings,
white-collars
1)
0.9 1.0 0.9
Women’s total earnings compared to men’s total earnings,
blue-collars
0.9 0.9 0.9
1)
Weighted average of women’s total salary compared to men’s total salary in the same job grade. Includes 97% of
white-collar personnel
Focus areas of the ‘Metsä For All’ vision in 2021–2023
EQUAL OPPORTUNITIES AND
GENDER EQUALITY
• Increasing the share of women
at dierent organisational levels
• Ensuring equal pay
• Gender-neutral professional titles
DIVERSITY
• Recruitment practices that
support diversity
• Ensuring international skills
in the organisation
INCLUSION AND
CULTURAL CHANGE
• Developing our personnel’s
awareness and skills
• Supporting cultural change by means
of communications
• Improving work-life balance
16% OF OUR MANAGEMENT
ARE WOMEN
(VP, SVP or CEO)
TARGET
TARGET
2025
We are developing
our remuneration
process and
correcting
unjustified pay
gaps.
97% OF OUR PERSONNEL HAVE
COMPLETED THE TRAINING
ON DIVERSITY, EQUALITY AND
INCLUSION
33
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Diverse opportunities for
growth and development
An ethical and respectful corporate culture, management through
clear objectives, allocation of responsibilities, and rapid decision
making are our strengths. We want to oer our employees an
equal-opportunity and forward-looking workplace community with
a good team spirit, in which everyone has the chance to develop
and advance in their career.
Goal-oriented leadership
Metsä Board has a bonus scheme based on the company’s growth
strategy and personal targets. It covers the entire personnel. When
As an international, continuously developing company, Metsä Board
aims to oer diverse opportunities for personal competence development,
job rotation and career advancement.
skilled people are in the right jobs and see the significance of their
own contribution, it will prove motivational, increase well-being, and
produce good results.
Our entire personnel is entitled to free occupational healthcare,
and we encourage our employees to anticipate and assess their
own working ability and health. Benefits related to well-being at
work are equally available to permanent employees and employees
with a fixed-term contract.
In terms of managing working abilities, we rely on operating
models such as early support, which allow us to address and tackle
potential working ability or well-being at work problems at an early
stage. During the COVID-19 pandemic, we have provided everyone,
in addition to other means for maintaining working ability, with the
services of a website providing access to podcasts and guidance
for improving personal well-being.
Remote working and virtual meetings have become routine
practices during the pandemic, with everything from daily mill
meetings, to bigger personnel briefings and the executive manage-
ment’s mill tours taking place virtually. Depending on the nature of
each job, remote working and connections will be taken advantage
of in the future.
New talents
We recruit new talent with the help of collaborations with
educational institutions, summer jobs, and apprenticeships in
production and maintenance, for example. While managers play a
key role as activators, each of us bears responsibility for our own
development.
Competence mapping supports the development of multiple
skills and creates the right kinds of indicators for measuring
competence. With regular and consistent monitoring and planning,
everyone can be provided with a personal plan to support their
development, both at a personal and team level. The aim is to
ensure the adoption of the agreed best practices at all our mills.
A good team spirit
as a strength
In 2021, Metsä Board conducted a renewed and
more extensive personnel survey, aiming to find out
employees’ views on work, the workplace community,
leadership, and the company as a whole. The survey was
responded to by 75.4% of Metsä Board’s employees.
The overall grade measuring job satisfaction, 72.9, was
on par with the norm in Europe, 72.8. The key strengths
of our workplace communities include the ecient
functioning of teams, a good team spirit, and the active
sharing of skills. All these are a wellspring for good
work motivation. Key targets for development include
possibilities for influencing operational development and
access to information, as well as managers’ activeness in
addressing problems when necessary.
The Ethics barometer and personnel survey are carried
out in alternate years. In 2022, we will be conducting the
Ethics barometer to collect information on how realisa-
tion of our Code of Conduct is perceived in practice.
WELL-BEING
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KEY PERSONNEL FIGURES
2021 2020 2019
Total number of employees FTE
1) 2)
2,389 2,370 2,351
Blue-collars’ share of employees, % 64.1 64.7 65.2
White-collars’ share of employees, % 35.9 35.3 34.8
Share of permanent employees, % 91.9 94.0 92.5
Share of full-time employees, % 96.6 96.4 9 7. 2
Average age, in years 46.1 46.4 46.2
Average years in service 17.8 18.6 18.7
Employee turnover, %
3)
5.2 4.5 7.7
Average hours of training per employee
2)
11.0 11.8 1 7.6
Average hours of training (blue-collars)
2)
9.5 8.8 -
Average hours of training (white-collars)
2)
13.7 16.0 -
Employees covered by the scope of a collective
agreement, %
2)
72.2 78 -
1)
Full-time equivalent FTE on 31 December
2)
Subsidiary company Hangö Stevedoring is included
3)
The figure includes also redundancies caused by restructuring of business
From summer employee to production manager
Production Manager Malin Nygren’s career at Metsä Board has presented her with
plenty of opportunities for professional development.
“I became interested in working at the Husum pulp and paperboard mill during my engi-
neering studies. So, I applied for and got a summer job here. After graduation, I was hired
as a development engineer. Since then, I’ve worked as a production engineer, laboratory
manager, environmental manager, and the mill’s assistant production manager. My
career has been supported in various ways through leadership training and mentoring
programmes.
As a manager, I want to lead by example, create good working conditions, and give my
team members opportunities to develop in their roles.
I sincerely believe that pure fresh fibre is one of sustainable solutions of the future for
global challenges, such as the realisation of a circular economy and mitigation of climate
change. Together, we have what we potential to create something genuinely good.”
PERSONNEL’S AGE AND GENDER DISTRIBUTION
MOST OF OUR EMPLOYEES WORK IN OUR
PRODUCTION COUNTRIES
Women aged less than 30 3%
Men aged less than 30 9%
Women aged 30–50 11%
Men aged 30–50 35%
Women aged more than 50 8%
Men aged more than 50 34%
Finland 56%
Sweden 32%
Rest of the EMEA region 9%
The Americas and the APAC region 4%
Personnel in
18 countries
New apprentices
29
Summer employees
244
35
18 19 20 21
18 19 20 21
0
0
15
12
9
6
3
0
10
8
6
4
2
0
BUSINESS OPERATIONS
AND VALUE CREATION
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41 accidents
too many
We engage in systematic work to reduce the number of accidents at work. Good examples
of this include the adoption of a common set of occupational safety standards, more eective
safety talks, and increasingly strong investments in training. However, the good progress
made in occupational safety over recent years was not reflected in the 2021 results.
The safety of employees is Metsä Board’s top priority. We manage
associated risks by complying with the ISO 45001 standard on
occupational health and safety, as well as the common safety
management principles, daily management processes, occupatio-
nal safety standards, and key safety guidelines applied throughout
Metsä Group. These common principles and operating methods
support operations in line with the ISO standard at our mills and
are in accordance with our company’s Code of Conduct and safety
policy. The implementation of processes at our mills are monitored
with annual internal audits. External annual audits are carried out in
accordance with the ISO 45001 standard.
All our mills follow the 5S method to increase productivity,
safety and well-being at work. Among other improvements, 5S
has reduced the number of stumbles and trips, and the resulting
accidents.
Our personnel play a key role in preventing
risks related to occupational safety
Our personnel are actively involved in making observations about
safety shortcomings, and participate in occupational safety trai-
ning. In 2021, we organised additional training and communication
at each mill to ensure that everyone complies with common safety
standards in their work, every day.
All our mills has an occupational health and safety (OHS)
committee which convenes regularly to promote the development
of local safety at work. We have also set up safety development
teams at some of our mills, who monitor the realisation of proactive
safety work.
The risk management is supported by a health, safety, environ-
ment and quality (HSEQ) system, intended for the recording and
monitoring accidents, safety observations, close calls, corrective
measures, and safety talks.
In addition to safety matters, the same system works as a
repository for entries concerning environmental matters and
product safety. These observations can also be recorded by our
partners. The HSEQ system is utilised in risk assessments as well
as in internal and external audits.
TARGET
TOTAL RECORDABLE INCIDENT
FREQUENCY (TRIF)
per million hours worked
LOST-TIME ACCIDENT FREQUENCY
RATE (LTA1)
per million hours worked
Our 2030 target:
Our target is
0 accidents at work.
WELL-BEING
TARGET
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KEY SAFETY INDICATORS
2021 2020 2019
Sickness absences, % of theoretical working
hours
4.1 3.9 4.0
Total Recordable Injury Frequency (TRIF) per
million hours worked
9.8 8.4 10.2
Lost-time accident frequency (LTA1) per million
hours worked
7.0 5.7 5.5
Number of lost-time accidents (LTA1), external
partners*
5 7 13
Accident severity rate 12.3 9.2 18.6
Accident severity rate, external partners 18.2 12.1 10.3
Number of fatal occupational accidents 0 0 0
The subsidiary Hangö Stevedoring is included in all figures.
* Our external partners working in a mill area.
Indicators for monitoring occupational safety
The safety key performance indicators are a valuable tool for
developing safety. The key indicators are the TRIF indicator,
which measures, in addition to accidents resulting in absences,
the frequency of accidents requiring replacement work or
medical treatment. The LTA1 indicator measures the frequency of
accidents resulting in absences. We monitor the achievement of
the internal targets of proactive occupational safety at each mill
on a continuous basis. Proactive safety measures include safety
observations, safety walks and safety talks.
In 2021, the frequency of accidents at work, or TRIF, was 9.8
(2020: 8.4), while the frequency of accidents resulting in absences
was 7.0 (5.7). Safety at our mills developed in a negative direction,
but safety in our port operations, at Hangö Stevedoring, improved
from the previous year. The most common accidents consisted of
injuries to hands in particular and feet.
In 2021, we will focus on developing safety involving hands and
improve personal hazard identification with the aim of making
everyone capable of identifying risks before they begin work. Metsä
Board will also be adopting four new safety standards. At the Kyro
mill, safety at work is improved by the production line’s new winder,
operational since late 2021. The Tako mill is also investing in a
winder.
Safety requirements apply to our partners
We monitor that our partners comply with the ISO 45001
requirements. All of our external partners, such as cleaning and
maintenance companies, working in our mill areas must complete
safety inductions to be granted access passes to the areas. These
inductions also apply to truck drivers, who deliver and pick up
goods at the mills. We also hold regular information sessions on
safety, such as safety talks, for partners. We investigate and report
all accidents occurring for our partners in mill areas.
“We continued to follow strict precautionary measures
at our locations due to the COVID-19 pandemic. The goal
was to ensure the health, safety and working ability of our
employees, prevent the emergence of transmission chains
and ensure the continuity of our business. We provided
information on the maintenance of working ability in the form
of webinars held by experts. The only visits we allowed to our
mills have been related to either development projects or
maintenance. Metsä Group’s mills have also organised mass
testing whenever a regional COVID-19 situation has arisen.
I am very proud of the commitment and flexibility shown
by our personnel during the pandemic. Thanks to these
measures, we have been able to avoid chains of transmission
and production and deliveries run smoothly,” says Camilla
Wikström, Metsä Board’s SVP, Human Resources.
Prioritising health and safety
during the COVID-19 pandemic
37
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Sustainably managed forests
serve many purposes
We always ensure the origin of the wood fibre we use, and source
wood only from sustainably managed forests in which the renewal
of forests and biodiversity are safeguarded.
TARGET
SHARE OF CERTIFIED
WOOD FIBRE
%
Our 2030 target:
Finland 53%
Sweden 29%
Baltic countries 9%
Russia 9%
MOST OF THE WOOD WE USE IS SOURCED
FROM FINLAND AND SWEDEN
Approximately
10%
of the world’s
forests are
certified
FORESTS AND WOOD
>90%
38
PEFC/02–31–92
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The sustainable use of forests must account for all three criteria for
sustainability: financial, ecological and social. The sustainable use
of forests creates well-being, mitigates climate change, maintains
biodiversity and prevents deforestation. The raw material provided
by forests, wood fibre, is an important alternative to fossil-oil based
raw materials, and forest industry products are significant in terms
of the national economy of Metsä Board’s home market: the forest
industry generates roughly a fifth of Finland’s export income.
We always verify the origin of wood fibre
Metsä Group’s wood supply and forest services is responsible for
our wood supply. The pulps used in paperboard production are
manufactured in Metsä Board’s own high-yield pulp and pulp mills,
or our associated company Metsä Fibre’s pulp mills. Knowing the
origin of the wood fibre, self-suciency in pulp, and the control of
chemicals at all stages of production ensure the availability of fibre,
the consistently high quality of the products, and an uninterrupted
chain of product safety.
We source wood solely from sustainably managed forests in
Northern Europe. Our wood use in 2021 totalled 8.3 million cubic
metres (2020: 8.2 million m
3
). The volume includes the wood used
in Metsä Board’s own production of pulp and high-yield pulp as well
as the wood used in the pulp purchased from Metsä Fibre.
The wood we use always meets at least the criteria for PEFC
Controlled Sources and FSC® Controlled Wood. This means that
all parties involved in the processing of wood and pulp in our value
chain comply with the requirements of the PEFC and FSC® Chains
of Custody, and as a result all the wood fibre we use is traceable.
In 2021, 83% (80) of the wood fibre we used came from certified
forests and 17% (20) from controlled forests. Our target is to
increase the share of certified wood fibre to at least 90% of all
the fibre we use by the end of 2030. The long-term wood delivery
contract made with Norra Skog in 2020 increases the volume
of certified wood fibre purchased from Sweden. The availability
of certified wood fibre is nevertheless limited: some 10% of the
world’s forests are certified. In Finland, the certification rate is
approximately 90%, and in Sweden over 60%.
All the wood fibre we use is traceable
All parties involved in the processing of wood and pulp in our value
chain comply with the requirements of the PEFC and FSC® Chains of
Custody. The wood fibre we use is therefore traceable. In addition to
sustainable forest sites, we choose our partners responsibly.
Customer Paperboard, pulp and
high-yield pulp mills
Wood supply and
forest services
Forest owners
Forest certification and our Chain of
Custody system give our customers
the opportunity to tell their own clients
about a product’s sustainability. Cer-
tification and traceability ensure that
the wood used in a product comes
from sustainably managed forests.
The pulp used in paperboard produc-
tion is manufactured in Metsä Board’s
own high-yield pulp and pulp mills or
its associated company Metsä Fibre’s
pulp mills. These mills purchase all
their wood from Metsä Group’s wood
supply. The mills record the volume,
origin and certification of the wood
they purchase, and ensure through
calculations that the volume of cer-
tified products they sell corresponds
with the volume of inbound certified
wood. The certification details are
shown in the orders and the related
documents.
All wood can be traced with the help
of maps, the details entered in data
systems, and various documents.
Metsä Group’s wood supply calculates
the share of certified wood and sells
a corresponding volume of certified
wood to the mills. We also require a
sustainable origin from non-certified
wood, and the wood always meets at
least the requirements of PEFC Con-
trolled Sources and FSC® Controlled
Wood.
Most of the wood we use comes from
PEFC or FSC®-certified Northern
European forests. The forest owners
have agreed to the requirements of
forest certification. Metsä Group and
external auditors verify the sustain-
able forest management by auditing
harvesting sites, for example.
Theme-related UN goals
39
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Sustainability is monitored with audits
For our customers to be able to purchase certified paperboard or
pulp, both the forests and the Chain of Custody system must be
certified.
Forest certifications define strict criteria for the ecological,
social and economic sustainability of forest management. The
requirements pertain, among other things, to the safeguarding
of the forests’ biodiversity, maintaining the forests’ growth, and
securing the rights of Indigenous people. Forest certification
requires third parties to regularly audit the certified forest areas
and the implemented measures. Metsä Group implements a policy
according to which requirements related to the environment and
quality are also complied with and monitored in non-certified
forests, so that the criteria for controlled wood are met.
Metsä Board’s Chain of Custody system is evaluated annually
with Metsä Group’s internal and third-party external audits. The
audits monitor the operations of the wood suppliers and harvesting
contractors as well as the traceability of the wood fibre within our
own processes. The auditing covers a range of aspects related to
environmental and social responsibility, such as the wood’s legal
origin, the securing of Indigenous people’s rights, safety at work,
and traceability and calculation practices, which should be in
accordance with certification standards. This allows us to ensure
the wood’s sustainable origin and the share of certified wood
used in our production. If deviations are observed in the audits,
we implement the corrective measures immediately. In 2021, we
developed our internal communications by compiling online train-
ing material which allows our mills to increase their personnel’s
knowledge about forest certifications.
In 2021–2022, Metsä Group is participating
in the ‘Tekopöly’ research project which
studies the species relying on high
biodiversity stumps in forests and which
types of stumps are the most beneficial for
the biodiversity of forests.
40
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
safeguard biodiversity and develop the protection of water. In 2021,
the programme’s measures were complemented with a policy con-
cerning the management of herb-rich forests, according to which
Metsä Group’s principal recommendation for herb-rich forests in
commercial forests is nature management. For the best sites, it
recommends voluntary conservation. Beyond commercial forests,
biodiversity is promoted with the nature management programme
established in 2021.
Targets for the sustainability of forest management
Further improvement of the ecological sustainability of forest
nature is crucial. Because of this, Metsä Group has targets exten-
ding to 2030 on increasing the amount of carbon bound to forests
and long-lived wood products, and safeguarding the biodiversity in
forests.
To achieve these targets, Metsä Group launched an ecological
sustainability programme focused on commercial forests in 2020.
The programme aims to increase the carbon sinks of forests,
Metsä Group’s 2030 targets concerning forests
Increasing the amount of carbon stored in
forests by 30% (in hectares) from 2018
In 2021, the realisation was 3.8%.
Increasing the amount of carbon stored in
products by 30% from 2018
In 2021, the amount of carbon stored in sawn timber and wood products
was 1.2% smaller than in the comparison year 2018.
Securing the biodiversity of forests:
Leaving retention trees on 100% of regeneration felling sites and
making high biodiversity stumps on 90% of the sites
In 2021, retention trees were left in 94% in regeneration fellings carried
out by Metsä Group, while high biodiversity stumps were made in 88% of
thinnings and regeneration fellings carried out by Metsä Group.
Metsä Group’s programmes for safeguarding biodiversity
Ecological sustainability programme – aimed at commercial forests
Key measures include increasing retention trees and decaying wood in forests; leaving cover thickets for animals; the mixed cultivation of pine and
spruce instead of planting only one species; developing forest management, particularly on peatland; the nature site service aimed at forest owners fall-
ing under the scope of Metsä Group’s FSC® group certificate; the policy on the management of herb-rich forests; and participating in research projects
focused on the development of sustainable forest management.
Nature management programme – aimed at nature beyond commercial forests
In 2021–2030, Metsä Group will support regionally material and eective development projects improving biodiversity and the state of waterbodies
in Finland with financial contributions and its own expertise. The projects may involve waterfowl habitats and wetlands, watercourses, small bodies of
water and riparian habitats, pollinator habitats, or new water conservation methods.
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BUSINESS OPERATIONS
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DEVELOPMENT GOVERNANCESUSTAINABILITY
Forests act as carbon sinks thanks to their growth
Metsä Board’s mills are located in Finland and Sweden, which are
Europe’s most forested countries. Forests cover approximately
75% of Finland’s and 69% of Sweden’s surface area. In both
countries, at least half of the forests are owned privately by
ordinary families, meaning that forests are a source of income for
many people. This is why it is important to forest owners that their
forests remain viable for future generations.
The volume of wood in the forests of Finland and Sweden has
grown over the last few decades because the annual growth of
forests surpasses the volume of harvesting and other removal
of trees in forests. In Finland, for example, the annual growth of
forests was 103.5 million cubic metres in 2014–2020, while the
annual drain, including felling and trees that die for natural causes,
amounted to 83% of the growth over the same period of time
(Natural Resources Institute Finland).
In both Finland and Sweden, the law states that a forest must
always be regenerated after harvesting. Forestry does not cause
deforestation in our wood supply area. Rather, the permanent
felling of trees results from other forms of land use, including
infrastructure building and clearing land into fields.
Thanks to the growth of the forests, they act as carbon sinks
and thereby mitigate climate change. Good forest management
enhances carbon sequestration. In sustainable forest manage-
ment, a forest is regenerated swiftly after harvesting, and the
regeneration relies on rapidly growing seedlings or seeds that are
best suited to the site. The seedling stands are thinned to create
growth space for the best seedlings, and the forest is fertilised.
At its best, a well-managed seedling stand in Southern Finland
becomes a carbon sink at around the age of 15. Metsä Group aims
to increase the amount of carbon stored in forests by actively
oering forest management services to forest owners.
Dierent felling methods are needed
In light of current studies, periodic cover silviculture, which also
includes regeneration felling, is the most risk-free option for a
forest owner and yields the best financial return. Continuous
cover forestry, in which only some of the trees are removed at
any one time, is a good alternative, particularly on peatland, in
the vicinity of waterbodies, in rugged pine stands, and in areas
which already contain seedlings. There is no consensus on which
method is better over the long term in terms of biodiversity and
carbon sequestration, and more research is needed. Metsä Group
provides forest owners with all harvesting methods – it is the forest
owner who has the final say on their property.
The selected methods promote biodiversity
Increasing the amount of decaying wood in forests and favouring
mixed forests are especially important for biodiversity. Decaying
wood is increased by retaining all dead trees, preferably in groups,
and by making high biodiversity stumps at thinning and regenera-
tion felling sites. High biodiversity stumps are made by cutting a
tree trunk at a height of 2–4 metres and leaving the upright stump
to decay in the forest.
Given that mixed forests increase forests’ biodiversity and resil-
ience to storms and insect damage, Metsä Group provides forest
owners with a forest regeneration service in which both spruce
and pine are planted in the same area. Broad-leaved trees, such as
birch, which spreads to stands naturally, should also be retained in
forests.
Biodiversity can be increased by protecting habitats important
for biodiversity from felling, and by leaving cover thickets for
animals and buer zones around natural waterways. Such buer
zones also prevent the run-o of soil and nutrients.
The policy concerning the nature management or protection
of herb-rich forests directs management measures to where they
have the most impact on biodiversity: herb-rich forests account
for only 1–2% of the surface area of Finland’s forests, but approxi-
mately 45% of endangered forest-dwelling species live primarily in
the herb-rich forests.
Legislation acknowledges biodiversity
The legislation in Finland and in Sweden requires habitats
important for biodiversity to be considered in connection to felling
and harvesting. Certified and controlled forests involve additional
requirements for the safeguarding of biodiversity.
Statutory protected forests account for some 10% of Finland’s
total forest area. According to a report by the European Union,
more than half of Europe’s strictly protected forests are located in
Finland.
The measures increase the amount
of decaying and retention trees of
dierent ages and species. This is
vitally important for many birds,
insects and fungi.
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Biodiversity makes forests stronger
Metsä Group, which is responsible for Metsä Board’s wood
supply, develops sustainable forest management methods
continuously, and bases its practices on scientific studies.
Together with Finnish forest owners, Metsä Group supports
the retention of forests’ viability by establishing mixed forests
of pine and spruce. The use of two species of coniferous trees
in forest regeneration promotes a forest’s health and biodiver-
sity. “Mixed forests of spruce and pine are more sustainable
and diverse than forests of one tree species,” says Tiina Laine,
Forest Management Manager at Metsä Group.
The establishment of mixed forests makes sense in areas
experiencing elk damage. Elk prefer pine seedlings over spruce
seedlings. In addition, climate change exposes spruce to the
European spruce bark beetle. “It has already caused consid-
erable damage in Central Europe. As the climate warms and
spruces suer from drought, northern spruce stands may also
begin to see more of this damage,” says Laine. Mixed forests
can also include naturally occurring broad-leaved trees left in
suitable locations. “This results in the best possible growth
conditions and promotes biodiversity.” Metsä Group aims to
regenerate forests soon after a felling. The faster a new viable
seedling stand is achieved, the earlier the forest can begin to
bind carbon.
Many EU policies have an impact on the use of forests
There are several projects under way in the European Union with
a direct and indirect bearing on the use of forests within our wood
supply area. EU policies place a strong emphasis on the carbon
sinks of forests and the safeguarding of biodiversity. The most
holistic view of forest use is provided by the EU Forest Strategy,
which aims to reconcile the diverse commercial use of forests, their
role as carbon sinks, the climate benefits of wood-based products,
and the protection of forests and the safeguarding of their biodi-
versity. The EU Forest Strategy is not legally binding, but together
with other EU initiatives and legislation, such as the Renewable
Energy Directive, the Biodiversity Strategy for 2030, and the EU
Taxonomy, it will guide the forest-related regulation of EU member
states in the coming years.
The Forest Strategy acknowledges that forest industry products
mitigate climate change by replacing materials whose production
generates copious amounts of fossil-based emissions. At the
same time, the further measures of the Forest Strategy, such as
its policies regarding regeneration felling, may limit opportunities
in the commercial use of forests. From the perspective of the
forest industry, the eects of the EU Forest Strategy are indeed
twofold, and it is possible that EU regulation with an impact on the
use of forests will start to limit the availability of wood. It would
also be important to consider the role of member states and the
dierences between forests across Europe in the implementation
of the strategy.
43
100
80
60
40
20
0
100
90
80
70
19 20 21 19 20 21 19 20 21 19 20 21 19 20 21
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCESUSTAINABILITY
We develop the sustainability of
our supply chain and products
The sustainability of packaging is the sum of many things. This is why we
invest in traceable, fossil free raw materials, a sustainable supply chain, and
the holistic assessment of the environmental impact our paperboards.
Our sourcing process includes
a number of risk management tools:
• The minimum requirements for our suppliers are detailed in
our Supplier Code of Conduct. They constitute a part of our
purchasing agreements, and our target is for all our suppliers to
commit to the Supplier Code of Conduct. The agreements may
furthermore contain other sustainability requirements.
• In our supplier selection process, we assess the sustainability
risks of all our suppliers with the help of country risk classifica-
tions. We also analyse category-specific risks.
• The majority of our suppliers are subject to the Know Your
Business Partner background check, in addition to which
key suppliers and potentially risky suppliers are subject to a
separate sustainability assessment.
• Metsä Group or an external party audits some of the suppliers.
• We investigate the origin of our raw materials and packaging
materials with product safety questionnaires.
• We monitor the development of sustainability in terms of the
suppliers for whom we have recommended development
measures.
TARGET TARGET TARGET TARGET TARGET
Supplier sustainability
assessment passed, %
Supplier background
check passed, %
Suppliers’ commitment
to the Supplier Code of
Conduct, %
Traceability of raw materials,
share of total purchases (in
euros).,%
Fossil free raw materials
and packaging materials
in dry tonnes, %
WE ARE KEEPING AN INCREASINGLY CLOSE EYE
ON THE SUSTAINABILITY OF OUR SUPPLIERS
%
A SIZEABLE SHARE OF OUR RAW MATERIALS ARE
ALREADY TRACEABLE AND FOSSIL FREE
%
Our 2030 target:
It is important for us that our customers, suppliers and other part-
ners also operate sustainably. In ensuring sustainability, we follow
due diligence as part of the Know Your Business Partner process.
The background checks included in the process provide us with a
better understanding of who we are working with and thereby allow
us to reduce the risk of participating in illegal activities. The checks
cover the background of a customer, supplier, or other partner in
terms of trade sanctions, money laundering, corruption, human
rights violations, and other key risks.
We use local suppliers whenever possible. In 2021, 78% of all
our purchases (2020: 75%) originated from Finland or Sweden, in
which our production units are located.
SUSTAINABLE PRODUCTS
* The calculation method has been changed and the figures have been corrected retrospectively. Percentages now include purchases where suppliers have passed a background check or sustai-
nability assessment. Previously, we reported the proportion of all purchases for which suppliers have been made a background check or sustainability assessment.
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Guylian’s chocolate
packaging awarded a
certification logo
Choosing sustainably produced
packaging materials and communicating about
packaging sustainability to consumers is increas-
ingly important for our customers. Metsä Board’s
sustainability services provide reliable fact-based
information to support decision making.
Our team of experts worked in close cooperation
with the Belgian chocolatier Guylian to help them
understand the forest certification process
and define the matters that the use of PEFC
certification logo on packaging requires. Guylian
is continuously pursuing means by which to make
its business and products more sustainable,
and sustainable packaging materials are an
important part of this development.
We measure the sustainability of our supply chain
The sustainability of our supply chain is ensured with respect to
wood and fibre (pp. 38–43) as well as other raw materials and
services. The sustainability of suppliers supplying something
other than wood or fibre is ensured in the context of Metsä Group’s
centralised purchasing process. These include the suppliers of
chemicals, machines, equipment, transport, and other services.
In 2021, suppliers commited to the Supplier Code of Conduct
covered 98% (96) of our total purchases. Suppliers that have
passed the Know Your Business Partner background checks
accounted for 92% (84) of our total purchases. In terms of the
separate sustainability assessment concerning our key suppliers
and potentially risky suppliers, our requirements are met by
54% (53) of our suppliers, calculated according to our total
purchases.
We supplement the monitoring of our suppliers’ sustaina-
bility with audits conducted at their premises. These audits
include questions related to environmental and social respon-
sibility. In 2020–2021, we conducted fewer of these audits than
usual, due to restrictions related to the COVID-19 pandemic.
In 2021, an external party audited 17 of our suppliers, and in
2020, Metsä Group and an external party audited a total of 21
suppliers.
Theme-related UN goals
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In our Science Based Targets, we are committed to 70% of our
non-fibre suppliers and of the logistics operators related to our
customer deliveries, measured as a share of our total purchases,
setting themselves targets in accordance with the SBTi by 2024.
We have supported the achievement of this target by our compa-
ny’s internal training, supplier-specific meetings, and by serving as
a partner in the Climate Ambition Accelerator programme of the
UN Global Compact Finland network. By the end of 2021, 16% (5)
of our suppliers belonging to the target group had set targets in
accordance with the SBTi.
We also require our suppliers to meet our requirements with
regard to the purity and safety of products. Read more about
product safety (pp. 50–51).
We trace the origin of raw materials
We continue to improve the traceability of chemicals, other raw
materials, and our products’ packaging materials. Because if this,
we ask our suppliers to indicate the manufacturing location of the
raw materials we purchase in our product safety questionnaires.
We aim to know the country in which every raw material and
packaging material we use is made by the end of 2030, and in
terms of some raw materials, we try to trace the details on origin
even further back. In 2021, we knew the origin – at least the coun-
try of manufacture – with regard to 98% (97) of the total purchases
of raw materials and packaging materials.
99% of our raw materials are fossil free
Our products are already made primarily from a renewable raw
material. Our main raw material, wood fibre, accounts for 93% of all
our raw materials. In addition, the production of our paperboards
relies on raw materials based on natural minerals, such as kaolin,
and fossil oil-based materials, including latex, and PE coating, par-
ticularly in food service packaging. We are looking for alternatives
to fossil-based raw materials, and our aim is to use solely fossil free
raw materials and packaging materials by the end of 2030. In 2021,
99% (99) of our raw materials and products’ packaging materials
per dry tonne were fossil free.
We improve the eciency of our transports
Given that the majority of our products are sold to somewhere else
than Finland or Sweden, the transport distances are often long. We
minimise the environmental impact of logistics with careful route
planning and by developing more ecient operating methods.
As far as possible, we favour the alternatives that generate the
least amount of emissions, such as marine and rail transports
instead of road transports. In 2021, 39% (38) of our transports
conducted as sea transports, 38% (36) on road, and 6% (7) on
rail, while 17% (19) related to port and warehouse operations,
measured by logistics costs. As of 2021, we have been shifting from
road to maritime transport by starting direct shipping routes from
the Kemi industrial area to Central Europe, near our customers.
As of 2022, some of the maritime transport departing from Kemi
will be carried out with low-emission LNG vessels. We will also
be re-routing our transport headed to the Iberian Peninsula as of
2022. This will reduce the average transport journey on this route
by roughly 7% per tonne of paperboard.
Life cycle assessments help our customers
in the selection of packaging materials
The environmental impact of our products arises over a product’s
entire life cycle: from the sourcing of the raw materials, production,
transports as well as from the product’s further processing and its
disposal after use. Our lightweight paperboards, made resource-ef-
ficiently and primarily from a renewable raw material, respond
well to the needs of the circular economy. All our paperboards are
recyclable, and with good packaging design and by participating
in initiatives supporting recycling, we aim for our products to be
recycled after use (p. 49).
The life cycle assessments of our products produce vital
information for our customers, who want their material selections
to reduce the environmental impact of their packaging. At the same
Consumers use around 160 million
packages made from Metsä Board’s
folding boxboard every day. By
reducing the weight of paperboard
by 1%, you can achieve material
savings equal to approximately 1.6
million packages a day.
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Metsä Board won the Finnish Circular Economy Award and
the Finnish Quality Award in the evaluation of Laatukeskus
Excellence Finland. The awards are based on the international
model of the European Foundation for Quality Management
(EFQM). According to the external panel of judges, clarity in
defining a direction, strategy implementation as well as in per-
formance monitoring and reporting strengthens the company’s
competitiveness from the perspective of the circular economy.
The circular economy evaluation carried out by Laatukeskus
Excellence Finland included interviews with approximately 70
Metsä Board employees from across the organisation and a
thorough review of Metsä Board’s processes and operating
methods. “The circular economy is at the core of our operations,
and I was delighted to notice how visible it really is at every
level of our organisation,” says Anne Uusitalo, Metsä Board’s
Product Safety and Sustainability Director.
In the Circulytics assessment, Metsä Board achieved the gene-
ral grade of B (on a scale from E to A). The assessment, provided
by the Ellen MacArthur Foundation, supports businesses in their
transition towards a circular economy. According to the asses-
sment, the circular economy is clearly visible in our strategy
and the skills level of our personnel, as well as in our sustainable
use of water. By further increasing the share of certified wood
in our wood use, we will be even better prepared to meet the
challenges of the circular economy.
Recognition for skills
in the circular economy
time, the life cycle assessments help us to further improve our
products’ environmental performance.
We always carry out our products’ life cycle assessments and
the comparisons between dierent materials in accordance with
the ISO 14040 and ISO 14044 standards. Our calculations account
for the environmental impact attributable to the production of raw
materials and energy, sourcing and transports as well as our own
production. The aspects most relevant in terms of paperboard
packaging are the energy used in its production and the light
weight of the paperboard itself. As we shift to the use of 100%
fossil free energy in our production, the carbon footprint of our
products will become even smaller. At its best, the carbon footprint
of packaging made from our fresh fibre paperboard is more than
50% smaller than that of recycled fibre or solid bleached board
packaging of equivalent stiness (Ecoinvent database). Fresh
fibre paperboard also oers significant climate benefits compared
to plastic. For example, according to an independent study, the
climate impact of a paperboard box for cherry tomatoes is 83%
smaller than the impact of a box made from recycled plastic (Nat-
ural Resources Institute Finland). Read more about our product
development and services (pp. 18–19).
47
BUSINESS OPERATIONS
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In accordance with the principles of a circular economy, we invest
continuously in the viability of forests and the resource eciency of our
processes, and in generating as little waste and emissions as possible,
and keeping materials in circulation for extended periods of time.
The entire life cycle of fresh fibre
supports the circular economy
Our main raw material is renewable
and traceable wood
• We always ensure that the wood fibre we use meets the
requirements of the PEFC and FSC® Chain of Custody
systems and that it comes from certified or controlled
forests, in which the biodiversity and regeneration
after harvesting are ensured.
Our production is
resource ecient
• We utilise more than 99% of our production side
streams.
• We circulate water at our paperboard mills an average
of 12–14 times and at our BCTMP mills, up to 30 times.
We continue to increase the eciency of our water use.
• Three of our mills already make use of artificial intelli-
gence, which enables us to increase the consistency of
our paperboard quality and reduce the consumption of
energy and raw materials.
85% of the energy we
use is fossil free
From our energy consumption
calculated as primary energy:
• Self-generated energy
5.4 TWh
• Purchased energy 6.4 TWh
99% of our raw materials
are fossil free
• Wood 8.3 million m
3
• Process chemicals
8,646 dry tonnes
• Coatings, binders and
pigments 314,727 dry tonnes
• Packaging materials
35,738 dry tonnes
100% surface water
• Surface water
115 million m
3
• We do not operate in
high water risk areas.
Read more about mill-specific information and capacities on page 60.
SUSTAINABLE PRODUCTS
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We reduce the environmental
impact of packaging
• At its best, the carbon footprint of packaging made
from our fresh fibre paperboard is more than 50%
smaller than that of recycled fibre or solid bleached
board packaging of equivalent stiness (Ecoinvent
database).
• The optimal use of materials, and designing a package
fit for purpose and to be recycled to reduce the overall
environmental impact.
More than 80% of paper and
paperboard packaging is recycled*
• All our paperboards are recyclable and/or compostable,
depending on the local recycling systems.
• We further the recyclability of our products through
active participation in organisations such as 4evergreen
and in the European Paper Packaging Alliance.
We aim to reduce our Scope 1 and 2
emissions to zero
Bio-based CO
2
1,712,639 tonnes
Fossil-based CO
2
(Scope 1+2) 428,838 tonnes
Fossil-based CO
2
(Scope 3) 1,854,840 tonnes
Sulphur and nitrogen compounds and particles
Products
• Paperboard, 1,920,000 tonnes
• Pulp and BCTM, 1,362,000 tonnes
• Bioenergy
• Bioproducts, such as tall oil
Side streams and waste
mainly to reuse
• Utilised by-products 49,603
• Waste to materials use 46,250 tonnes
• Waste to energy 60,423 tonnes
• Landfill waste 337 tonnes
• Hazardous waste 1,558 tonnes
Approximately 99% of the water is
returned to waterbodies
• 58.7 million cubic metres
of treated wastewater
• Emissions: COD, BOD, nitrogen
and phosphorus compounds, solids,
AOX compounds
• Cooling water
*
)
Collected for recycling in Europe and the United States (Sources: Eurostat and the EPA)
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BUSINESS OPERATIONS
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DEVELOPMENT GOVERNANCESUSTAINABILITY
Fresh fibre paperboard is a
safe and sustainable choice
All Metsä Board paperboards are produced from renewable fresh
fibres, which are naturally pure, traceable and recyclable. Fresh
fibre paperboards do not alter odour or taint properties of the
packed products, and they are the safest choice for wood-based
food packaging and other sensitive packaging end uses.
We know our raw materials
The whole production chain from the forest to the board mill is
coved by Metsä Group’s business model. Controlled production
chain ensures that we know exactly the origin of our paperboards’
raw materials.
In our paperboard production processes only carefully selected
chemicals are being used. Each chemical goes through a very
detailed inspection: chemicals must meet the requirements of
relevant legislations, e. g. food contact material regulations. Every
chemical used at a mill has passed comprehensive occupational
safety and environmental assessments. Our fresh fibre products
do not contain unknown chemicals, such as printing ink traces,
which can cause problems when using recycled fibre based
materials.
Safe paperboard is produced
in clean production environment
Since our paperboards are part of the food supply chain, our pro-
duct safety practice criteria are equally high compared to the food
industry. Our mills follow good manufacturing practices (GMP),
which are required for all food contact materials. Additionally, all
Metsä Board mills have certified ISO 22000 food safety manage-
ment systems in place. Mills producing food contact materials have
also been certified according to the requirements of FSSC 22000
food safety management system.
In addition to the product safety requirements for our own
production, we also require our suppliers and subcontractors to
meet equal standards. This way we can ensure the cleanliness and
safety of the products in all stages of the supply chain. With regular
product safety questionnaires, audits and follow-up we make sure
that the risks are controlled through the whole production and
supply chain.
Safe product fulfills the requirements
Direct food contact materials are regulated strictly all over the
world. Metsä Board confirms the product safety properties by
ensuring compliance with relevant regulations aecting on its
Safety is one of the key properties for food contact materials.
With comprehensive product safety work Metsä Board wants to make
sure that consumers can enjoy safe groceries packed in our materials.
Our mills work according to Good Manufac-
turing Practices (GMP), and certified food
safety management systems ISO/FSSC
22000 are in place. Their status is verified
annually during internal and external
audits.
All wood raw material used in our produc-
tion comes from controlled or certified
forests and is traceable. The chemicals we
use are carefully chosen and safe for use.
Chemical suppliers are required to answer
to Metsä Group product safety question-
naire annually.
Product safety related risks are managed through the whole production and supply chain
The products are tested regularly for
quality and product safety properties
in internal and external laboratories.
Dierent end uses are taken into
account, especially food packaging.
Raw materials Production Product safety
SUSTAINABLE PRODUCTS
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market areas: Europe, Americas and Asia. Our global team of
product safety experts continuously follows the development of
relevant regulations and requirements. The competence of our
personnel is maintained with regular trainings.
Our products are tested regularly in accredited laboratories to
meet quality and product safety standards. Laboratory analyses
together with detailed internal risk analyses form the basis for
Product safety related risks are managed through the whole production and supply chain
By careful packaging, supply chain con-
trol and regular auditing we ensure that
our products stay safe and clean during
transportation and storage.
High quality paperboards guarantee
high performance in converting. Trou-
ble-free production diminishes product
safety risks during dierent stages of
converting.
The most important function of food
packaging material is to ensure, that
packed food stays safe for consumers’
use. Laboratory testing together with
detailed internal risk analyses form the
basis for our Product Safety Statement.
our Product Safety Statement, which includes product specific
information covering the product safety and compliance properties
of our products.
On an EU level, food contact material risks and recalls are
monitored and reported through RASFF notifications. There were
no product safety related RASFF notifications or recalls regarding
Metsä Board products during 2021.
The coronavirus pandemic has increased the need for
packaging solutions that are sustainable, safe and clean, and
that meet the criteria for good manufacturing practices. In
demanding medical applications, such as vaccine packaging,
the paperboard packaging must also withstand extreme
temperatures as low as -70 degrees and protect the injection
bottles throughout transportation and storage.
The Chinese pharmaceutical companies Sinovac (Beijing) and
Sinopharm (Wuhan) approved MetsäBoard Pro FBB Bright
paperboard as the material of choice for their COVID-19 vac-
cine packaging. Thanks to their good cleanliness and strength
properties, Metsä Board’s paperboards are perfectly suited
for vaccine packaging. “It’s an honour for Metsä Board to be
actively contributing its share to combating the pandemic”,
commented Andy Zhong, Metsä Board’s local sales manager.
Our paperboard protects
COVID-19 vaccines
Transportation Converting Consumer safety
51
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BUSINESS OPERATIONS
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DEVELOPMENT GOVERNANCESUSTAINABILITY
Our climate targets are leading
the way towards a fossil free future
We made progress in our fossil free
target at Kyro and Simpele
Metsä Board Kyro has replaced peat with renewable energy in its energy
generation. The Kyro power plant aims to use primarily wood-based fuels – such
as chips, bark, and sawdust – generated alongside Metsä Group’s production
and wood supply. Abandoning the burning of peat reduces the share of fossil
fuels used by the power plant from a quarter to approximately a tenth of the
total. The abandoning of peat has required investments, thanks to which the
production of the paperboard mill’s energy and local district heat will generate
even less fossil-based carbon dioxide emissions in the future.
The Simpele mill has reduced the use of peat to a considerable degree. The mill
aims to replace all the peat it uses with a renewable fuel during 2022.
TARGET
TARGET
TARGET
SHARE OF FOSSIL FREE
ENERGY
%
ENERGY EFFICIENCY
%
FOSSIL-BASED CO
2
EMISSIONS
(SCOPE 1+2,
MARKET-BASED)
t kg/t
600,000
500,000
400,000
300,000
200,000
100,000
0
Our 2030 target:
Climate change mitigation requires significant investments
which will adapt our operations to the low-carbon future.
Our target is fully fossil free production.
CLIMATE AND ENVIRONMENT
kg CO
2
/tuotetonni
52
19 20 21
10
8
6
4
2
0
-2
18 19 20 21
240
200
160
120
80
40
0
18 19 20 21
100
80
60
40
20
0
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
We want to play our part to meet the strictest requirements of
the Paris Agreement, which aims to limit global warming to 1.5
degrees. Our target is for our production units not to use any fossil
fuels at all by the end of 2030, and for them not to purchase any
fossil-based energy. Once we achieve this, our direct and indirect
fossil-based carbon dioxide emissions (Scope 1 and 2) will fall to
zero. Our target has been approved by the Science Based Targets
initiative. Our reduction target for the emissions of our value chain
(Scope 3) also meets the strictest requirements of the SBTi.
In addition to our earlier emission reductions, we have reduced
our fossil-based CO
2
emissions (Scope 1 and Scope 2) by 25%
per tonne produced from 2018. In 2021, our Scope 1 emissions
nevertheless increased from the previous year. The reason for this
was a fire which broke out on the chip conveyor belt at the Husum
pulp mill, due to which the mill had to use oil instead of a renewable
fuel for two months. In 2021, fossil-free energy accounted for 85%
of our total energy consumption (2020: 83). Most of this consisted
of renewable energy, which was produced from the fractions
generated by our processes and wood supply, such as black liquor,
bark, and logging residue.
The value chain plays a significant role
The emissions of our value chain (Scope 3) make up 81% of all our
fossil-based carbon dioxide emissions. A significant portion of the
emissions in our value chain is attributable to the production of
the raw materials we purchase (including pulp, binders, pigments,
and process chemicals) and the further processing and transport
of the products we sell, and their disposal at the end of their life
cycles. The reduction of these emissions is more challenging for
us than the measures pertaining to our own mills. We encourage
our key suppliers to set themselves emission reduction targets in
accordance with the SBTi. We also favour low-emission modes of
transport, wherever possible (pp. 44–47).
CO
2
EMISSIONS IN 2018–2021
2021 2020 2019 2018
Fossil-based CO
2
emissions (Scope 1), t 255,467 240,036 248,274 288,579
Indirect fossil-based CO
2
emissions (Scope 2, market-based), t 173,371 272,115 250,742 275,048
Indirect fossil-based CO
2
emissions (Scope 2, location-based), t 306,555 373,816 374,409 416,789
Indirect fossil-based CO
2
emissions (Scope 3), t 1,854,840 1,847,773* 1,026,896 1,058,455
Bio-based CO
2
-emissions, t 1,712,639 1,812,952 1,815,179 1,837,299
Fossil-based CO
2
emissions (Scope 1 + Scope 2, market-based), kg CO
2
/tonne produced 130.6 159.4 156.5 174.6
* The increase in Scope 3 emissions after 2019 is explained by changes in calculation methodology in 2020: two new categories (Processing of sold products and End of life treatment of sold products) were
added in the calculations. Calculation methodology related to purchased chemicals was also updated. Data for 2020 have been revised compared to the previously reported figure.
Scope 1 11%
Scope 2 8%
Scope 3 81%
Purchased goods
and services 32%
Capital goods 5%
Fuel-and-energy-related
activities (not included
in Scope 1 or 2) 4%
Upstream transportation
and distribution 3%
Waste generated
in operations 0.1%
Downstream trans portation
and distribution 18%
Processing of
sold product 18%
End of life treatment
of sold products 17%
Investments 2%
THE MAJORITY OF OUR FOSSIL-BASED CO
2
EMISSIONS ARE GENERATED BY OUR VALUE
CHAIN
THE PRODUCTION OF OUR RAW MATERIALS
AND THE HANDLING OF THE SOLD
PRODUCTS GENERATE THE MOST SCOPE 3
EMISSIONS
Theme-related UN goals
The calculation methodologies for the categories are explained
in Metsä Board’s CDP reporting.
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DEVELOPMENT GOVERNANCESUSTAINABILITY
2018 2025 2030
Share of fossil free energy out of total energy. When the share is
100%, Metsä Board’s Scope 1 and 2 emissions are zero
Share of fossil free energy (out of total energy)
80%
Starting point:
82%
Target:
100%
90%
100%
KYRO
Peat replaced by
renewable energy
HUSUM, KEMI, KYRO, TAKO, SIMPELE
Liquefied petroleum gas (LPG) or natural gas in the coating drying will be replaced with e. g.
biogas or electricity
ÄÄNEKOSKI
New technology will be piloted to increase
coating drying capacity with biogas or electricity
HUSUM, KASKINEN, KYRO, SIMPELE
The power plant’s backup fuels will be replaced with
renewable fuels
KASKINEN
Process fuels in chemicals recovery will be replaced with
renewable fuels
RENEWAL OF
HUSUM PULP
MILL
Phase 2: New fibre line
Estimated time frame
for the project
SIMPELE
Peat replaced by
renewable energy
JOUTSENO
Natural gas replaced
by biogas or
electricity
RENEWAL OF
HUSUM PULP
MILL
Phase 1: New recovery
boiler and turbine
Key measures, according to plan, for reducing fossil-based carbon dioxide emissions to zero. Some of the projects still lack a final
investment decision and the times shown are indicative. The purchasing of power and heat will shift to fossil free energy sources.
A fossil free roadmap for all mills
Our roadmap aiming for entirely fossil free energy is composed of
mill-specific investments and measures with which we phase out
fossil-based energy sources and continue to improve the eciency
of energy and process water use.
The fossil fuels used in our own energy generation (natural gas,
liquefied petroleum gas, peat, and oil) will be replaced by renewable
fuels or by energy generated by fossil free means. We will also
switch to renewable or fossil free alternatives in terms of purchased
energy.
In 2021, we implemented several measures improving energy
eciency at our mills, the most important of which were improving
the eciency of the evaporation plant at the Husum pulp mill and
increasing the dry matter content of black liquor, the development
of the drying hood ventilation of paperboard machine 1 and the
energy recovery of condensates at the Tako mill, and the renewal of
the boiler feedwater pump at the Simpele power plant. By the end
of 2021, we had improved energy eciency by 1.9% (2.1) compared
to the 2018 base year. In the summer of 2021, eorts to improve
energy eciency were slowed down by a fire which broke out on
the chip and bark conveyor belt of the Husum pulp mill.
Water use also makes a dierence, given that the use of process
water and wastewater treatment consumes energy, and thereby
generates emissions. Read more about how we are reducing our
water use (pp. 56–59).
Roadmap for fossil free mills by the end of 2030
TAKO
In steam production,
natural gas replaced by,
e.g. electricity
A darker shade indicates
measures already taken
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Energy consumption has been calculated as the consumption
of primary energy, which describes the consumed energy and
the amount of energy needed to generate it. Purchased electricity
is converted into primary energy by dividing the amount of
purchased electricity with the assumed eciencies of the energy
generation: traditional fuels 0.4; nuclear power 0.33; hydro, wind
and solar power 1. Purchased heat is calculated by the actual fuel
consumption of nearby power plants.
1)
Pohjolan Voima Oyj is a non-listed company which delivers
power and heat to its shareholders at cost price. Metsä
Board has a 3.2% holding in Pohjolan Voima.
2)
Most of the electricity purchased from the market is nuclear
power or hydropower.
Renewable energy,
wood-based 50.8%
Other renewable
energy 2.4%
Nuclear power 31.4%
Fossil fuels 15.4%
Own energy
generation, fossil free 36.7%
Own energy generation,
fossil-based 9.2%
Purchased energy,
fossil free 47.8%
Purchased energy,
fossil-based 6.2%
Own generation 18.2%
Purchased electricity
through holding
in Pohjolan Voima*
1)
30.7%
Purchased electricity
from Metsä Fibre 9.1%
Purchased electricity
2)
42.1%
ENERGY CONSUMPTION BY ENERGY
SOURCE IN 2021
11.9 TWh (Primary energy)
ENERGY CONSUMPTION BY SOURCING
METHOD IN 2021
11.9 TWh (Primary energy)
ELECTRICITY CONSUMPTION BY SOURCING
METHOD IN 2021
2.4 TWh
When calculated according to the GRI methodology, Metsä
Board’s energy consumption is 8.4 TWh. Rather than taking into
account the eciency factors of power and heat, this calculation
method sums up the renewable fuel, or biomass (4.3 TWh),
non-renewable fuel (1.1 TWh), self-generated hydropower (0.03
TWh, as well as purchased electricity (2.0 TWh) and purchased
heat (1.0 TWh, net), consumed at the mills.
ENERGY CONSUMPTION
2021 2020 2019 2018
Energy consumption, GWh (as primary energy) 11,860 11,844 11,699 11,675
Energy consumption, GWh (according to GRI) 8,428 8,355 8,398 8,643
Previously reported energy consumption figures have been revised for hydropower and GHG Protocol requirements.
The generation of renewable energy and self-suciency in electricity will increase at Husum
The first phase in the renewal of the Husum pulp mill, which involves the renewal of the recovery boiler and turbine, will increase
the mill’s generation of renewable energy, and increase its self-suciency in electricity from approximately 40% to around 80%.
In addition, the use of heavy fuel oil as a backup fuel will reduce, and by 2030, the necessary backup fuels will be replaced with
renewable alternatives. The energy source used in the recovery boiler is the wood-based black liquor generated alongside pulp
production. The new recovery boiler and turbine will start up in 2022.
Metsä Board’s self-suciency in electricity is set to grow over the next few years
In 2021, some 60% of Metsä Board’s electricity consumption was
covered by the company’s own generation, electricity purchased
from Pohjolan Voima, and electricity purchased from associated
company Metsä Fibre. The rest, 40%, was purchased directly from
the market. The company hedges against electricity’s market-price
risk in accordance with its commodity hedging policy. The
company estimates its self-suciency in electricity to grow from
roughly 60% to more than 90% by the end of 2024. The self-suf-
ficiency in electricity will increase due to, among other things, the
adoption of the new recovery boiler at Metsä Board’s Husum mill,
the start-up of the new nuclear power plant OL3 at Olkiluoto, and
Metsä Fibre’s new bioproduct mill in Kemi.
55
0
-5
-10
-15
-20
-25
-30
19 20 21
18 19 20 21
100
90
80
70
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCESUSTAINABILITY
The majority of our emissions into the air result from the energy
production needed for the manufacture of pulp, high-yield pulp,
and paperboard. Besides the climate impact of carbon dioxide, our
key climate emissions consist of sulphur and nitrogen oxides, which
cause acidification. We also measure particulate concentrations
from our mills’ flue gases, and in the production of chemical pulp,
we monitor malodorous sulphur compounds. Our mills may also
have local noise impacts.
Our wastewater discharges are largely the result of our
products’ production process. The key indicators to be monitored
include the biological and chemical oxygen demand (BOD, COD),
the amount of nutrient discharges (phosphorus and nitrogen)
Resource-ecient production
reduces environmental impacts
We monitor our environmental impact closely. We invest in making our use of water
and side streams more ecient, which supports the circular economy, the management
of water resources as well as the achievement of our energy and climate targets.
Environmental management
with precise targets and practices
Our operations are guided by the principles of our environmental policy,
which concerns, among other things, sustainable forest management,
environmental responsibility, the continuous improvement of our
operations, resource eciency, and our suppliers’ sustainability. All
our mills operate within the framework of mill-specific environmental
permits issued by the authorities. The permits define maximum limits for
discharges into bodies of water and emissions into the atmosphere. The
permits also set limits for environmental noise and minimum require-
ments for the monitoring of emissions and reporting on them. Before
initiating any major projects, such as new production lines, we carry out
the environmental impact assessment required by law, in which we listen
to the perspectives of residents and other stakeholders.
All our production units comply with certified management systems in
terms of quality, the environment, and energy, among other things. In
accordance with the management systems, our production units are sub-
ject to regular risk assessments as well as internal and third-party audits.
We measure and develop our performance according to our ambitious
sustainability targets, which exceed the requirements set by law.
WE HAVE REDUCED THE USE
OF PROCESS WATER BY -13.5%
PER TONNE PRODUCED FROM
THE 2018 LEVEL
%
TARGET
Our 2030 target:
TARGET
WE UTILISE MORE THAN 99%
OF OUR SIDE STREAMS
%
with an impact on eutrophication, the amount of solids, and the
chlorine-containing AOX compounds generated in the bleaching
of pulp. Our mills’ impact on water bodies is typically small com-
pared to the diuse source input attributable to agriculture and
forestry as well as scattered settlement. In Finland, for instance,
only 3–4% of nutrient emissions derive from the pulp and paper
industry (the Finnish Forest Industries Federation).
We use the best available technology in our production and
continuously monitor that our mills operate in compliance with
the environmental permits issued to them. Any deviations and the
corrective measures pertaining to them are reported to the author-
ities. In 2021, Metsä Board’s production units recorded some
CLIMATE AND ENVIRONMENT
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cases in which permit conditions were exceeded at a monthly and
an annual level. Our mill-specific emissions and deviations from
the conditions of environmental permits are reported on pages
60–61 of this Annual and Sustainability Report. There was also an
oil spill at the Husum mill on 16–17 September, which originated
from the mill’s oil burner. To minimise any environmental damage,
Metsä Board has supported the investigation of the incident, and
the clean-up of the oil from the sea and the shores with all the
necessary resources. It has also maintained a dialogue with the key
stakeholders, such as residents and authorities.
Our water use became more ecient
We aim to optimise the water use in our processes and enhance
the recycling of water within the production process continuously,
with the aim of reducing the need to abstract new raw water. This
allows us to both minimise wastewater discharges and save energy,
which reduces our climate impact. It also reduces our water risk
(pp. 28–29).
All of the process and cooling water we use is sourced from
nearby surface waters, such as rivers and lakes. The maximum
volumes for water sourcing are defined in the water sourcing
permit issued by the authorities. Given that all our mills are located
in Finland and Sweden, and moreover in areas with plenty of
water, we do not source any water at all from areas with a high or
extremely high baseline water stress (WRI Aqueduct Water Risk
Atlas). After use, the process water is carefully treated before it
is returned to the waterbodies. Given that the cooling water flows
within its own, closed cycle, it always remains clean. Our water
consumption is very small in proportion to the volume of water we
use: of all the water we use, some 99% is returned to waterbodies
after use. The rest, 1%, either evaporates during the process or is
bound to products.
The Husum integrated
mill accounts for roughly
40% of our water use,
which is why the renewal
of the Husum pulp mill
will reduce our water use
significantly by the end
of 2030.
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In 2021, Metsä Board’s use of fresh water amounted to 115 mil-
lion cubic metres (2020: 114 million m
3
), of which roughly half was
used in the process and the other half in the cooling of equipment.
In addition to our earlier reduction in water use, we aim to reduce
the use of process water by a further 30% per tonne produced in
2018–2030. In 2021, the use of process water per tonne produced
reduced by 13.5% (-7.7) compared to 2018, thanks to our mills’
high-capacity utilisation rate and a number of small development
measures.
To achieve the 2030 target, we have defined mill-specific meas-
ures by which to enhance the recycling of water and reduce the
sourcing of raw water from waterbodies. The Simpele paperboard
mill, for example, will invest in the renewal of its stock preparation
and white-water system in 2021–2023. This will reduce both the
use of process water and energy. In Kemi, the paperboard mill’s
development programme in 2021–2023 will reduce the mill’s water
use by approximately 40% and energy consumption by around
5% per tonne of paperboard produced. The Husum integrated
mill accounts for roughly 40% of our water use, which is why the
renewal of the Husum pulp mill will reduce Metsä Board’s water use
significantly by 2030.
We are already making use of almost all side streams
As part of Metsä Group, we can make full use of our wood raw
material. Metsä Group’s production units use the most valuable
parts of trees, such as the thick logs to produce wood products for
the purposes of the construction industry. The thinner parts of tree
trunks and the younger trees harvested from thinning sites are the
main raw material of pulp used in paperboard. Bark and branches
are used in the production of bioenergy.
We improve our recovery methods continuously, so as not to
generate waste in the production of pulp and paperboard. Disc fil-
ters allow us to enhance the recycling of process water and thereby
reduce the loss of fibre material, for example. We are also looking
for new ways to reuse production side streams and use organic
waste for energy production. Our target is to put all production
side streams into use in such a way that our processes will not
generate any landfill waste at all after 2030. Our biggest challenge
is to find applications for the green liquor dregs generated in pulp
production, and we are currently studying potential solutions to
achieve this.
In 2021, we used 99.8% (99.3) of our side streams. Side streams
consist of process waste and by-products generated during
production, such as the ash used in fertilisers. The utilisation of
side streams does not apply to any hazardous waste nor municipal
or construction waste. Of the side streams, 56% were reused as
materials and 44% in energy production.
Our operations also generate hazardous waste, municipal
waste, and construction waste which is not included in the 100%
utilisation target we have set. Of all waste generated in our
operations, 43% was directed to materials reuse, 56% was used
as energy, 0.3% was delivered to landfills, and approximately 1% to
the treatment of hazardous waste.
WATER USE, BY-PRODUCTS AND WASTE, 2018–2021
2021 2020 2019 2018
Water sourcing, 1,000 m
3
115,095 113,633 100,967 105,921
Of sourced water used as process water, 1,000 m
3
59,551 62,037 59,381 65,662
Wastewater discharges generated from process water, 1,000 m
3
58,738 58,891 59,326 65,662
Utilised by-products, tonnes 49,603 69,913 3 7,0 2 6 28,959
Utilised waste, tonnes 106,673 104,045 162,428 164,626
Landfill waste, tonnes 337 1,124 1,502 1,611
Hazardous waste, tonnes 1,558 685 936 1,146
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Woodio manufactures bathroom products from a
wood composite. The birch chips generated as a
side stream of Metsä Board’s Joutseno high-yield
pulp mill are an important raw material of the wood
composites. Woodio is a Finnish startup company,
in which Metsä Group’s innovation company
Metsä Spring has made a capital investment.
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MILL-SPECIFIC INFORMATION
Mills Joutseno Kaskinen Kemi Kyro Simpele Ta ko Äänekoski Husum Others
6)
Total
COUNTRIES FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND SWEDEN
PERSONNEL
Number of employees, FTE
1)
58 84 121 161 266 201 193 671 634 2,389
Total Recordable Injury Frequency (TRIF)
2)
31.6 13.7 4.8 10.8 14.8 14.0 12.0 6.0 - 9.8
Lost-time accident frequency (LTA1)
3)
10.5 13.7 0.0 10.8 10.6 5.6 9.0 3.4 - 7.0
Sickness absences, %
4)
4.6 2.9 4.6 2.9 3.9 5.8 4.8 4.1 - 4.1
MANAGEMENT SYSTEMS
ISO 9001
x x x x x x x x
ISO 14001
x x x x x x x x
ISO 50001
x x x x x x x x
ISO 45001
x x x x x x x x
ISO 22000
x x x x x x x x
FSSC 22000
x x x x x
CHAIN OF CUSTODY
PEFC
x x x x x x x x
FSC®
x x x x x x x x
EMISSIONS TO AIR (t)
Biogenic carbon (CO
2
)
0 176,464 0 0 172,473 0 0 1,363,701 1,712,639
Fossil carbon (CO
2
)
27,238 6,502 6,335 4,702 54,636 74,622 0 81,433 255,467
Sulphur (SO
2
)
5)
0 12 0 0 72 0 0 211 295
Total reduced sulphur (TRS)
0 0 0 0 0 0 0 60 60
Nitrogen oxides (NO
2
)
14 95 3 2 147 46 0 872 1,180
Particles
10 11 0 0 1 0 0 205 228
DISCHARGES TO WATER (t)
Adsorbable organic halogen (AOX)
0 0 0 0 0 0 0 47 47
Chemical Oxygen demand (COD)
681 1,156 320 157 524 168 426 7,056 10,488
Biological oxygen demand (BOD)
4 59 37 14 89 56 190 309 758
Total phosphorus
0 2 1 0 2 1 0 21 29
Total nitrogen
3 22 23 15 13 1 7 184 268
Total suspended solids
25 223 110 58 93 33 72 931 1,544
WATER USE (1,000 m
3
)
Water sourcing
6,142 16,656 10,405 4,140 27,506 3,520 5,002 41,724 115,095
Waste water flow
579 3,847 8,291 3,253 4,591 2,622 3,417 32,136 58,738
WASTE AND BY-PRODUCTS (T)
Utilised by-products and waste 11,662 20,744 5,378 16,940 22,246 4,769 2,819 71,717
156,276
Landfill waste
0.0 4.7 328 3.7 0.05 0.0 0.0 0.0 337
Hazardous waste
27 35 2 1,028 65 80 15 306 1,558
1)
Full-time equivalent on 31 December 2021
2)
Total recordable incident frequency per million worked hours
3)
LTA1 frequency rate. Accidents at work resulting to at least one day sick leave per million worked hours.
4)
% of theoretical working time
5)
SO
2
calculation contains also TRS (Husum)
6)
Includes personnel from sales and logistics operations, management and subsidiaries. Production, emissions and waste originate
from Äänevoima’s production of energy sold for external use. Personnel figures of Others are included in Metsä Board’s total figures.
License codes: PEFC/02–31–92 and FSC®-C001580
An independent external assurance has been performed for the data in the table as part of Metsä Group’s Sustainability Report (limited assurance).
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PRODUCTION CAPACITIES
Board mills
Tonnes Country Machines Folding boxboard White kraftliner Total
Tampere (Tako) Finland 2 210,000 210,000
Kyröskoski (Kyro) Finland 1 190,000 190,000
Äänekoski Finland 1 260,000 260,000
Simpele Finland 1 300,000 300,000
Kemi Finland 1 425,000 425,000
Husum Sweden 2 400,000 250,000 650,000
Total 8 1,360,000 675,000 2,035,000
Pulp and BCTMP mills
Tonnes Country Chemical pulp BCTMP Total
Husum Sweden 730,000 730,000
Joutseno Finland 350,000 350,000
Kaskinen Finland 390,000 390,000
Total 730,000 740,000 1,470,000
Metsä Fibre pulp mills
1)
Tonnes Country Chemical pulp Total
Äänekoski Finland 1,300,000 1,300,000
Kemi Finland 610,000 610,000
Rauma Finland 650,000 650,000
Joutseno Finland 690,000 690,000
Total 3,250,000 3,250,000
1)
Metsä Board owns 24.9% of Metsä Fibre.
ENVIRONMENTAL PERMIT LIMIT VIOLATIONS
In 2021, there were no environmental incidents or permit violations at Metsä Board’s mills that would have caused significant environmen-
tal impacts, and that would have been followed by claims, compensations or significant media coverage. However, in September, there
was an accidental oil spill from an oil burner at the Husum mill, which required action and caused media publicity in Sweden. To minimise
any environmental damage, Metsä Board has supported the incident’s investigation, and the clean-up of the oil from the sea and the
shores with all the necessary resources. It has also maintained a dialogue with the key stakeholders, such as authorities and residents.
All incidents that have caused violations of monthly, quarterly or annual permit limit values are detailed with description and corrective
actions in the table below. The authorities have been informed and corrective actions have been taken in all cases.
Unit Incident Corrective actions
Simpele The COD emissions exceeded the permit limit in February, and the
phosphorus emissions exceeded the permit limit in February, March
and April due to problems with compressors, nutrient dosing and cold
weather (four incidents in total during spring).
Optimisation of nutrient dosage and application parameters.
Maintenance.
Simpele The COD emissions exceeded the permit limit in December, and the
phosphorus emissions exceeded the permit limit in November and De-
cember due to process failures at the treatment plant (three incidents
in total in autumn). The annual limit for phosphorus was also exceeded.
Process optimisation and development project for euent treatment.
Kaskinen The phosphorus emissions exceeded the permit limit in April due to
losses of solids. Sludge treatment problems caused the high age of the
sludge. At the same time, a large amount of municipal water came for
wastewater treatment.
Maintenance, sludge age control and nutrient dosage.
Kyro The permit limit for solids was exceeded in December. This was due
to a high solids load to the waste water treatment plant caused by a
process failure in the paperboard production.
Optimum precaution.
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CODE ACCOUNTING METRIC CATEGORY COMMENTS AND REFERENCES
Greenhouse gas emissions
RR-PP-110a.1. Gross global Scope 1 emissions Quantitative 255,467 tonnes of fossil-based Scope 1 carbon dioxide emissions. We also
disclose biogenic carbon dioxide emissions as well as fossil-based Scope
2 and Scope 3 carbon dioxide emissions (p. 53). The emissions of other
greenhouse gases are estimated to be very low and immaterial in terms of
the disclosures.
RR-PP-110a.2 Discussion of long-term and short-
term strategy or plan to manage
Scope 1 emissions, emissions
reduction targets, and an analysis of
performance against those targets.
Discussion
and analysis
Our target is to reduce our Scope 1 and Scope 2 emissions by 100% from the
baseline year of 2018 by the end of 2030. According to the target, all our mills
will abandon the use of fossil-based energy sources, and thereby our fos-
sil-based Scope 1 and Scope 2 emissions will reduce to zero. In 2018–2021,
our Scope 1 and 2 emissions per tonne produced reduced by 25%. Further
information about our progress in this respect and on our plan for achieving
the target can be found on pages 52–55.
Air quality
RR-PP-120a.1 NO
X
(excluding N
2
O) Quantitative 1,180 tonnes (as NO
2
)
SO
2
Quantitative 295 tonnes
Volatile Organic Compounds (VOCs) Quantitative Our production processes do not generate substantial amounts of VOCs and
Metsä Board is not obligated to measure them regularly. This is why Metsä
Board does not consider VOCs material in terms of the disclosures.
Particulate matter (PM) Quantitative 228 tonnes
Hazardous Air Pollutants (HAPs) Quantitative Our production processes do not generate substantial amounts of HAPs and
Metsä Board is not obligated to measure them regularly. This is why Metsä
Board does not consider HAPs material in terms of the disclosures.
Energy management
RR-PP-130a.1 Total energy consumed Quantitative The amount of energy consumed by the company was (8,428 GWh) accord-
ing to the GRI calculation method. Alternatively, the consumption may be
expressed as primary energy consumption (11,860 GWh), which is higher,
because the calculation accounts for the eciency of the energy generation.
In accordance with the established practice, we disclose energy consumption
as gigawatt hours and based on lower heating values. Further information on
energy can be found on page 55.
Percentage grid electricity Quantitative 25%
Percentage from biomass Quantitative 67%
Percentage from other renewable
energy
Quantitative 3%
In addition to renewable energy sources, nuclear power produced without
fossil fuels plays an important role in achieving our fossil free target.
Total self-generated energy Quantitative 4,489 GWh (including energy sold), of which 80% renewable energy.
Risks and uncertainties related to the
use of biomass as an energy source.
Discussion
and analysis
The biomass we use is mainly based on the use of the black liquor, bark, and
logging residue generated in the context of our production and wood supply.
We have performed a risk analysis in terms of the biomass, and all the bio-
mass we use is climate neutral in accordance with EU regulations and meets
the EU’s sustainability criteria. Should the sustainability criteria change in the
long run, some additional costs may be allocated to biomass’s energy use.
Disclosure in accordance
with the SASB Standard
Our reporting concerning 2021 follows the SASB Standard for Pulp and Paper Products,
which falls under the scope of the SASB topic Renewable Resources and Alternative Energy.
References to more detailed information are given in the table.
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CODE ACCOUNTING METRIC CATEGORY COMMENTS AND REFERENCES
Water management
RR-PP-140a.1 Total water withdrawn Quantitative 115,095 (1,000 m³), 100% of the process and cooling water is surface water.
Small amount of domestic water is groundwater (0.05% of all water).
Total water consumed, percentage
of each in regions with High or
Extremely High Baseline
Water Stress
Quantitative Our water consumption is minor in proportion to the volume of water we use:
approximately 99% of all the water we use is returned to waterbodies after
use. The rest, roughly 1%, either evaporates during the process or is bound
to products. 0% of the water comes from areas with high or extremely high
baseline water stress (WRI Aqueduct Water Risk Atlas).
RR-PP-140a.2 Description of water management
risks and discussion of strategies
and practices to mitigate those risks
Discussion
and analysis
All our mills are located in areas with ample water resources, due to which
our water use does not impair the availability of water to other parties. Risk
assessments are carried out regularly at our production units in accord-
ance with certified management systems. Climate change may also cause
water-related risks in the future. Our target of reducing the use of process
water by 30% per tonne produced by the end of 2030 reduces our water risk.
Further information on water use and risk management is available on pages
28–29 and 56–58.
Supply chain management
RR-PP-430a.1 Percentage of wood fibre sourced
from (1) third-party certified
forestlands and percentage to each
standard and (2) meeting other fibre
sourcing standards and percentage
to each standard
Quantitative 83% of the wood fibre we use comes from PEFC or FSC®-certified forests,
and 17% of the fibre meets the criteria for PEFC Controlled Sources and
FSC® Controlled Wood. All of the wood fibre we use is therefore traceable. In
our view the properties of PEFC-certified and FSC®-certified wood fibre are
not materially dierent, due to which we do not disclose their percentages
separately. Further information is available on page 38–40.
RR-PP-430a.2 Amount of recycled and recovered
fibre procured
Quantitative 0 tonnes
Metsä Board produces premium paperboards made from pure, traceable
fresh fibre also suitable for demanding end uses requiring a high level of
hygiene. Our life cycle assessments have shown the carbon footprint of pack-
aging made from our fresh fibre paperboard to be at its best more than 50%
smaller than that of packaging made from recycled fibre of equal stiness.
Further information is available on page 46–47.
Activity metrics
RR-PP-000.A Pulp production Quantitative 1,362,000 tonnes (chemical pulp and BCTMP)
RR-PP-000.B Paper production Quantitative 1,920,000 tonnes (folding boxboard and white kraftliners)
RR-PP-000.C Total wood fibre sourced Quantitative 8.3 million m³. It is our company’s established custom to indicate volume as
cubic metres, rather than as tonnes. Further information is available on page
38–39.
63
SUSTAINABILITY
BUSINESS OPERATIONS
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FINANCIAL
DEVELOPMENT
Contents
ReportoftheBoardofDirectors
■ Consolidated financial
statements
Consolidatedstatementof
comprehensiveincome
Consolidatedbalancesheet
Statementofchangesinshareholders’
equity
Consolidatedcashflowstatement
Notestotheconsolidated
financialstatements
Accountingpolicies
Profitability
Segmentinformation
Sales
Otheroperatingincome
Operatingexpenses
Remuneration
Employeecosts
Themanagement’ssalaries
remunerationandpensionexpenses
Sharedbasedpayment
Retirementbenefitobligations
Capitalemployed
Intangibleassets
Tangibleassets
Otherinvestments
Inventories
Accountsreceivableandother
receivables
Otherliabilities
Accountspayableandother
liabilities
Provisions
Capitalstructureandfinancialrisks
Shareholders’equity
Financialincomeandexpenses
Otherfinancialassets
Cashandcashequivalents
Borrowingsandnetdebt
Managementoffinancialrisks
Classificationandfairvalueof
financialassetsandliabilities
Incometaxes
Groupstructure
Groupcompanies
Non-currentassetsheld
forsale
Relatedpartytransactions
Othernotes
Contingentliabilitiesassetsand
commitments
Eventsafterthefinancialperiod
■ Parent company
financial statements
Parentcompanyincomestatement
Parentcompanybalancesheet
Parentcompanycashflowstatement
Notestotheparentcompany
financialstatements
Accountingpolicies
Sales
Exceptionalitems
Otheroperatingincome
Operatingexpenses
Depreciationandimpairmentcharges
Financialincomeandexpenses
Incometaxes
Intangibleandtangibleassets
Investments
Receivables
Shareholders’equity
Mandatoryprovisions
Deferredtaxassetsandliabilities
Non-currentliabilities
Currentliabilities
Financialinstruments
Disputeslegalproceedingsand
commitments
Sharesandholdings
TheBoard’sproposaltotheAnnual
GeneralMeetingforthe
distributionoffunds
Auditor’sreport
Sharesandshareholders
Calculationofkeyratios
Comparableperformancemeasures
Keyfiguresandtaxes
Corporategovernancestatement
BoardofDirectorsofMetsäBoard
CorporateManagementTeam
ofMetsäBoard
Investorrelationsandinvestor
information
64
Auditor’sreportonESEF
500
400
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200
100
0
400
300
200
100
0
-100
350
300
250
200
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100
50
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250
200
150
100
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20
16
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4
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400
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17 18 19 20 21
17 18 19 20 21
17 18 19 20 2117 18 19 20 21 17 18 19 20 21
17 18 19 20 21
17 18 19 20 21 17 18 19 20 21
17 18 19 20 21 17 18 19 20 21
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Key figures
SALES
EUR million
2,500
2,000
1,500
1,000
500
0
PAPERBOARD DELIVERIES
1,000 tonnes
METSÄ BOARD’S MARKET PULP
DELIVERIES
1)
1,000 tonnes
COMPARABLE EBITDA
EUR million,
% of sales
CASH FLOW FROM OPERATIONS
EUR million
COMPARABLE OPERATING RESULT
EUR million,
% of sales
CAPITAL EMPLOYED, EUR million
RETURN ON CAPITAL EMPLOYED, %
INTEREST-BEARING NET DEBT, EUR million
INTEREST-BEARING NET DEBT / EBITDA,
COMPARABLE
TOTAL INVESTMENTS
EUR million
TOTAL RECORDABLE INJURY FREQUENCY
(TRIF)
per million hours worked
2,500
2,000
1,500
1,000
500
0
2.0
1.5
1.0
0.5
0
-0.5
PERSONNEL AT THE END OF PERIOD
3,000
2,500
2,000
1,500
1,000
500
0
2,000
1,500
1,000
500
0
600
500
400
300
200
100
0
1)
includes chemical pulp and
high-yield pulp (BCTMP)
Wood 15%
Pulp * 20%
Logistics 16%
Personnel 12%
Chemicals 13%
Energy 13%
Other 12%
TOTAL COSTS 2021
EUR 1.7 billion
Development of key figures per
share can be found on
page 153.
*) Pulp: Metsä Board purchases all external pulp from its
associated company Metsä Fibre, of which Metsä Board
owns 24.9%. Metsä Fibre’s pulp cost structure in 2021:
wood 57%, chemicals 11%, logistics 10%, personnel 5%,
other 17%.
65
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Report of the Board of Directors 2021
Pure and easily recyclable fresh fibre paperboards made from renewable
raw materials replace non-renewable packaging materials like plastic. The
coronavirus pandemic has shifted consumption from services to goods
and accelerated the demand for consumer packaging across nearly all end
uses. E-commerce has also grown significantly, especially in foodstus.
Metsä Board expects global demand for premium fresh fibre paperboard
to grow by around 2–3% a year in the future.
In 2021, the deliveries and market prices of European producers of
folding boxboard and white kraftliners increased from the previous year.
Metsä Board’s share of the total deliveries by European folding boxboard
producers was 34% (35), and 56% (57) of exports from Europe.
In the United States, the production of solid bleached boxboard for local
consumption was stable, while the production of food service paperboard
grew. The market prices of solid bleached boxboard and food service
paperboards increased.
Market pulp
Metsä Board and its associated company Metsä Fibre sell mainly softwood
pulp to Europe, the Middle East, Africa and Asia. In the long run, demand
for market pulp will be supported by the global growth in demand for
packaging and hygiene products made from renewable materials.
In Europe, demand for long-fibre pulp was supported particularly by the
increased consumption of paperboard and the increase in the capacity
utilisation rates of printing paper mills. The market prices of pulp increased
in Europe.
In China, the strong demand for market pulp during the first half of the
year weakened after the summer. The decline in demand was attributable
to paper and paperboard mills’ extensive production shutdowns resulting
from state-imposed restrictions on energy use, lower-than-normal domes-
tic consumption and a decline in the exports of paper and paperboard
products, brought on by increased logistics costs. Demand picked up
towards the end of the year. Market prices of pulp increased in China.
■ Sales
Metsä Board’s sales in 2021 were EUR 2,084.1 million (2020: 1,889.5).
Sales increased due to higher prices of paperboard and market pulp as well
as higher delivery volumes of paperboard.
■ Result
The comparable operating result was EUR 386.6 million (221.2), and the
operating result was EUR 375.9 million (227.3). Items aecting compara-
bility during the financial period totalled EUR 10.8 million and comprised
the following items: a EUR 7.0 million capital gain from the sale of a land
area unrelated to business operations; a EUR -6.9 million impairment
recognised in the assets of Metsä Fibre’s Kemi pulp mill; EUR -1.8 million
recognised in taxes as a result of the tax audit in Metsä Fibre’s subsidiary in
Italy; a EUR -4.6 million impairment recognised in the current paperboard
■ Metsä Board’s business
Metsä Board is a leading European producer of fresh fibre paperboards
and a forerunner in sustainability. The company focuses on premium
lightweight fresh fibre paperboards, used primarily in consumer product
packaging and in the various packaging solutions of the retail sector. Metsä
Board’s annual paperboard capacity is around 2 million tonnes. In addition,
company produces chemical pulp and bleached high-yield pulp (BCTMP)
for own use and to be sold as market pulp. The annual capacity for pulp and
BCTMP is roughly 1.4 million tonnes. In addition, Metsä Board owns 24.9
per cent of its associated company Metsä Fibre. Like Metsä Board, Metsä
Fibre is part of Metsä Group, and is a leading producer of wood-based
bioproducts such as pulp, sawn timber, biochemicals and bioenergy.
Metsä Board has sales to over 100 countries and has approximately 2,400
employees in 18 countries.
■ Strategy and financial targets
Metsä Board aims to grow in a controlled manner, accounting for the
prevailing market situation. This growth will be based on skilled people,
the industry’s leading products and innovative packaging solutions. The
company expects global demand for premium fresh fibre paperboard to
grow by around 2–3% a year.
Metsä Board’s decision-making is steered by profitability and sustai-
nability targets, and by the increase of shareholder value. The company
focuses on the continuous improvement of cost-eectiveness and on cus-
tomer accounts which benefit from the high performance of the company’s
products and services. The objective is to distribute a competitive dividend
and retain a strong balance sheet.
In 2021, Metsä Board’s financial targets and dividend policy remained
unchanged.
• The comparable return on capital employed (ROCE)
is, at minimum, 12%.
Actual in 2021 was 18.7%.
• A ratio of interest-bearing net liabilities to comparable EBITDA of,
at maximum, 2.5.
Actual in 2021 was -0.2.
In accordance with its dividend policy, Metsä Board aims to distribute at
least 50% of the result for the financial period in dividends every year.
The Board of Directors’ proposal to the Annual General Meeting on the
dividend for the 2021 financial year corresponds to 50% of the result for
the financial period.
■ Operating environment
Paperboards
Global megatrends impact the operations of businesses and set require-
ments for the safety, quality, sustainability and recyclability of packaging.
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
■ Delivery and production volumes
1,000 t 2021 2020 2019
Delivery volumes
Folding boxboard 1,296 1,223 1,207
White kraftliner 627 587 584
Metsä Board’s market pulp
1)
496 521 460
Metsä Fibre’s market pulp
2)
762 696 745
Production volumes
Folding boxboard 1,272 1,249 1,242
White kraftliner 634 591 574
Metsä Board’s pulp
1)
1,362 1,371 1,373
Metsä Fibre’s pulp
2)
747 702 734
1)
Includes chemical pulp and high-yield pulp (BCTMP).
2)
Equal to Metsä Board’s 24.9% holding in Metsä Fibre.
Report of the Board of Directors
■ Key figures
2021 2020 2019
Sales, EUR million 2,084.1 1,889.5 1,931.8
EBITDA, EUR million 466.0 321.8 294.5
comparable, EUR million 472.2 315.8 279.0
EBITDA, % of sales 22.4 1 7. 0 15.2
comparable, % of sales 22.7 16.7 14.4
Operating result, EUR million 375.9 227.3 180.8
comparable, EUR million 386.6 221.2 184.4
Operating result, % of sales 18.0 12.0 9.4
comparable, % of sales 18.6 11.7 9.5
Result before taxes, EUR million 365.8 212.3 165.6
comparable, EUR million 376.6 206.3 169.2
Result for the period, EUR million 314.0 170.1 144.6
comparable, EUR million 326.6 165.3 145.8
Earnings per share, EUR 0.82 0.48 0.41
comparable, EUR 0.85 0.46 0.41
Return on equity, % 19.4 12.5 10.9
comparable, % 20.2 12.1 11.0
Return on capital employed, % 18.2 12.6 10.2
comparable, % 18.7 12.2 10.4
Equity ratio at the end of the period, % 63 60 59
Net gearing at the end of the period, % -4 17 23
Interest-bearing net liabilities/comparable EBITDA -0.2 0.7 1.1
Shareholders’ equity per share at the end of the period, EUR 4.78 3.89 3.76
Interest-bearing net liabilities at the end of the period, EUR million -78.4 235.5 3 07. 8
Total investment, EUR million 220.2 166.4 98.9
Net cash flow from operations, EUR million 329.6 3 07.7 200.5
Personnel
1)
2,389 2,370 2,351
1)
at the end of the period
production assets in Husum; and EUR -4.5 million in costs related to the
chip conveyor fire at the Husum pulp mill.
The comparable operating result of the financial period improved due to
the higher prices of paperboard and market pulp and the higher delivery
volumes of paperboard. The profitability of the comparison year was
burdened by the paper industry strike which concerned Metsä Board’s
mills in Finland and all Metsä Fibre pulp mills. The strike’s negative eect on
the operating result in 2020 was approximately EUR 20 million. The 2021
financial period was also subject to approximately EUR 9 million less in
depreciations than the previous financial period.
Cost inflation was rapid in 2021. The prices of raw materials, especially
those of latex, PE coatings and packaging materials, increased. Energy
costs were higher due to the nearly record high market price of electricity.
The prices of other sources of energy also increased. The higher energy
prices were partly set o by sale of the company’s unused emission allo-
wances, totalling roughly EUR 21 million (in 2020: EUR 6 million). Logistics
67
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costs and the maintenance costs of mills were likewise at a higher level
than in the year before. Other fixed costs increased due to higher personnel
expenses and healthcare costs related to the prevention of the coronavirus
pandemic, for example.
Exchange rate fluctuations, including hedges, had a negative impact of
around EUR 56 million on the operating result compared to the previous
year.
The associated company Metsä Fibre’s share of Metsä Board’s
comparable operating result in January–December was EUR 123.0 million
(-2.4). Metsä Fibre’s profitability improved due to the increased prices
and delivery volumes of market pulp. The demand for sawn timber was
likewise strong in the company’s main markets and prices increased clearly
compared to the previous year.
Folding boxboard
White kraftliner
Market pulp
Others
EMEA
Americas
APAC
SALES SPLIT
BY PRODUCT
%
SALES SPLIT
BY REGION
%
Financial income and expenses totalled EUR -10.0 million (-14.9), inclu-
ding foreign exchange rate dierences from accounts receivable, accounts
payable, financial items and the valuation of currency hedging instruments,
totalling EUR -2.3 million (-3.4). The interest expenses of financial liabilities
decreased in 2021, given that the interest expenses of ongoing investments
were capitalised in the cost of investments.
The result before taxes was EUR 365.8 million (212.3). The comparable
result before taxes was EUR 376.6 million (206.3). Income taxes amounted
to EUR 51.8 million (42.2).
Earnings per share were EUR 0.82 (0.48). The comparable earnings
per share were EUR 0.85 (0.46). The return on equity was 19.4% (12.5),
and the comparable return on equity was 20.2% (12.1). The return on
capital employed was 18.2% (12.6), and the comparable return on capital
employed was 18.7% (12.2).
■ Business development
Impacts of coronavirus pandemic
on Metsä Board’s business operations
The coronavirus pandemic has shifted consumption from services to
goods and increased the consumption of products used at home. This has
increased the demand for packaging materials, especially in food and other
daily consumer goods – the main end uses for Metsä Board’s paperboards.
The pandemic has also accelerated sales in e-commerce, which has
increased the demand for white kraftliners. In 2021, the demand for Metsä
Board’s fresh fibre paperboards was record high in nearly all end uses.
Metsä Board’s production and deliveries have run smoothly during the
pandemic. While the number of individual infections began to rise late in
the year, chains of transmission were avoided due to restrictions.
The company continues to employ precautionary measures that aim to
ensure the health of employees and the continuity of business operations,
and to prevent the spread of the virus. Despite the precautionary measu-
res, a prolonged pandemic could lead to disruptions in production or the
supply chain.
Metsä Board’s financial position is very 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 the cash flow, which has
remained strong, has supported the financial headroom.
Paperboard sales
Metsä Board’s paperboard deliveries in January–December totalled
1,922,000 tonnes (1,811,000). Paperboard deliveries grew in all Metsä
Board’s market areas compared to the previous year.
The demand for folding boxboard was very strong across all end uses
in 2021. Customers’ interest in Metsä Board’s dispersion-coated barrier
paperboard increased markedly, and the growth in delivery volumes is
expected to continue in 2022. Demand for white kraftliners was supported
by the brisk retail sector and the growth in online commerce. In addition
to strong demand, the market situation in Europe tightened due to the
reduced import volumes of paperboard, especially from Asia.
Metsä Board increased the prices of folding boxboard and white
kraftliners several times during the financial period in all market areas.
DELIVERIES OF FOLDING BOXBOARD BY
REGION IN 2021 (2020)
1,000 tonnes
DELIVERIES OF WHITE KRAFTLINER BY
REGION IN 2021 (2020)
1,000 tonnes
EMEA region 906 (866)
Americas region 282 (274)
APAC region 108 (83)
EMEA region 385 (369)
Americas region 233 (210)
APAC region 9 (9)
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Paperboard prices, particularly the average prices of folding boxboard, are
expected to continue to rise, given that some of the increases did not take
eect until the beginning of 2022.
Market pulp sales
Metsä Board’s deliveries of market pulp were 496,000 (521,000) tonnes,
of which 67% was delivered to the EMEA region, and 33% to the APAC
region. Delivery volumes were negatively impacted by the fire at the Husum
pulp mill’s chip conveyor in the summer.
The associated company Metsä Fibre’s total pulp deliveries grew, total-
ling 3,000,000 tonnes (2,796,000). Around 50% of Metsä Fibre’s market
pulp is sold in the EMEA region and 50% in the APAC region, where China
accounts for a significant share. Metsä Board holds 24.9% of Metsä Fibre.
Production
The production volume of paperboards during the financial period totalled
1,906,000 tonnes (1,840,000), while the combined production volume of
pulp and high-yield pulp amounted to 1,362,000 tonnes (1,371,000).
A fire which broke out on the chip conveyor of the Husum pulp mill on
18 June closed Husum’s pulp production for approximately four weeks.
Paperboard production was run at a lower-than-normal capacity following
the pulp mill’s shutdown. The production losses resulting from the fire
amounted to roughly 50,000 tonnes in pulp and roughly 30,000 tonnes in
paperboard.
Production in the comparison year was limited by the paper industry’s
strike, which lasted for more than two weeks and involved all Metsä Board
paperboard and BCTMP mills in Finland. The loss in paperboard production
during the strike was roughly 65,000 tonnes, and the loss in BCTMP
production some 34,000 tonnes.
The durations of all annual maintenance shutdowns remained at the
planned levels in 2021. The modernisation of the finishing area carried out
at the Kyro mill resulted in a 2–3-week loss in production.
Corporate acquisitions and disposals
Metsä Board sold a 30% minority share of the Husum pulp mill to a
Swedish forest owners’ cooperative Norra Skog. The transaction was
completed on 4 January 2021, and it reduced Metsä Board’s net debt by
approximately EUR 260 million. The arrangement improves wood manage-
ment at the Husum mill and allows the company to focus its development
investments on paperboard.
Metsä Board signed an agreement on 16 December 2021, according to
which company will sell the entire share capital of its fully owned subsidiary
Oy Hangö Stevedoring Ab to Euroports Finland Oy. The transaction is
expected to be completed in the first quarter of 2022. The gain on sale will
be reported as an item aecting comparability and will not have a material
impact on Metsä Board’s key financials.
After the financial period, on 1 January 2022, Metsä Board acquired all
the shares in Hämeenkyrön Voima Oy held by Pohjolan Voima Oyj and DL
Power Oy, part of Leppäkoski Group. Following the arrangement, Metsä
Board owns 100% of Hämeenkyrön Voima Oy. The arrangement will not
have a significant impact on Metsä Board’s financial key figures.
■ Cash flow
Net cash flow from operations in 2021 was EUR 329.6 million (1–12/2020:
307.7). Working capital decreased by EUR 49.5 million (decreased by
37.9). Cash flow from operations was supported by the strong paperboard
business.
■ Balance sheet and financing
Metsä Board’s equity ratio at the end of the financial period was 63% (31
December 2020: 60) and the net gearing ratio was -4% (17). The ratio of
interest-bearing net liabilities to comparable EBITDA in the previous 12
months was -0.2 (0.7).
At the end of the financial period, interest-bearing liabilities totalled EUR
448.6 million (31 December 2020: 452.4). Non-euro-denominated loans
accounted for 1.5% of loans and floating-rate loans for 10.6%, with the rest
being fixed-rate loans. The average interest rate on liabilities was 2.3%
(2.3), and the average maturity of non-current liabilities was 4.7 years (5.7).
The interest rate maturity of loans was 45.3 months (52.0).
At the end of the financial period, interest-bearing net debt totalled EUR
-78.4 million (31 December 2020: 235.5).
Metsä Board’s liquidity has remained strong. At the end of the financial
period, the available liquidity was EUR 916.0 million (31 December 2020:
605.8), consisting of the following items: liquid assets and investments of
EUR 524.2 million, a syndicated credit facility (revolving credit facility) of
EUR 200.0 million, and other committed credit facilities of EUR 191.8 mil-
lion. The pricing of the syndicated credit facility is linked to the company’s
sustainability targets and a reduction in the specific consumption of water
and energy.
Of the liquid assets, EUR 496.4 million consisted of short-term deposits
with Metsä Group Treasury, and EUR 27.8 million were cash funds and
investments. Other interest-bearing receivables amounted to EUR 2.7
million. In addition to items reported as liquidity, the liquidity reserve is
complemented by Metsä Group’s internal undrawn short-term credit
facility of EUR 150.0 million and undrawn pension premium (TyEL) funds of
EUR 215.9 million
The fair value of long-term investments was EUR 181.0 million at the end
of the financial period (31 December 2020: 186.9). The change in the fair
value is related to the decrease in the fair value of Pohjolan Voima Oyj’s
shares.
At the end of the financial period, an average of 8.1 months of the net
foreign currency exposure was hedged, including the hedging of the
balance sheet position of trade receivables and trade payables (31 Decem-
ber 2020: 7.9). The degree of hedging during the period varied between
seven and nine months, on average. In addition to the balance sheet
position, half of the projected annual net foreign currency exposure at the
normal level is hedged. The amount of hedging may deviate from the nor-
mal level by 40% in either direction. When hedging is at the normal level,
the aim is to allocate the hedges primarily to the following two quarters.
Metsä Board has investment grade credit ratings by S&P Global and
Moody’s Investor Service. The company’s rating by S&P Global is BBB-,
with a stable outlook. The company’s rating by Moody’s is Baa3, with a
positive outlook.
69
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■ Investments
Total investments during the review period were EUR 220.2 million (166.4),
of which investments in own property, plant and equipment were EUR 216.1
million (159.4) and investments in leased property, plant and equipment
were EUR 4.1 million (7.0). Out of the total investments, the maintenance
investments accounted for approximately 22% and development
investments 78%.
Renewal of the Husum pulp mill
In 2019, Metsä Board started the first phase of the renewal of the Husum
pulp mill which includes a new recovery boiler and turbine. The investment
value of the first phase is approximately EUR 360 million. By the end of the
financial period, the investments made in the project totalled approxima-
tely EUR 253 million.
The start-up of the new recovery boiler and turbine will be slightly
delayed. The company estimates the recovery boiler and turbine to start
up in September 2022. According to the earlier estimate, this would have
taken place in the first half of 2022. The delay is attributable to delay in
installation work.
The first phase of the renewal is expected to improve Metsä Board’s
annual cash flow by some EUR 35 million as of 2023.
During the second phase of the renewal, later in the 2020s, the current
fibre lines are planned to be replaced with a new fibre line.
The renewal project will enable the long-term development and growth of
competitive paperboard business operations at the Husum integrated mill
over the coming years. In addition, the investment aims to develop Metsä
Board’s energy production and enable a shift towards fossil free mills.
Development programme of the Kemi paperboard mill
In 2021, Metsä Board initiated the development programme for the Kemi
paperboard mill, which produces white-top kraftliner. The programme’s
investment cost is approximately EUR 67 million, and the mill’s annual
paperboard capacity will increase by around 40,000 tonnes. The
investments will take place in 2021–2023.
The programme includes a series of modernisation and bottleneck
investments in the paperboard machine. As part of the programme, Metsä
Board will also buy a modernised production line for unbleached pulp from
Metsä Fibre. The production line’s annual capacity is roughly 180,000
tonnes.
The development programme will also reduce water use by 40% and
energy use by 5% per tonne of paperboard produced and represents a
significant step towards the company’s sustainability targets set for 2030.
Increasing the paperboard capacity at Husum
Metsä Board will increase its folding boxboard capacity by 200,000 tonnes
per year at the Husum integrated mill in Sweden. Following the investment,
the folding boxboard capacity of paperboard machine BM1 will be 600,000
tonnes per year. The value of the investment is approximately EUR 210 mil-
lion. It will take place in 2021–2024, with an emphasis on 2022 and 2023.
The investment is expected to increase Metsä Board’s annual sales by
approximately EUR 200 million. In addition, the investment is expected to
have a positive impact of approximately EUR 50 million on the company’s
annual comparable EBITDA. The company expects to achieve the growth
and improved result in full in 2026.
Husum’s port concept will be reviewed separately, taking into account
the growing logistics volumes in the entire integrated mill, and the poten-
tially necessary investments will be decided at a later date..
Associated company Metsä Fibre’s Kemi bioproduct mill
Metsä Board’s associated company Metsä Fibre is building a new
bioproduct mill in Kemi. The new bioproduct mill will produce annually
some 1.5 million tonnes of softwood and hardwood pulp as well as other
bioproducts. The investment’s cost estimate is roughly EUR 1.85 billion.
This estimated cost has increased from the original EUR 1.6 billion due
to price increases aecting raw materials, especially steel, as well as
construction and installation work. The bioproduct mill is expected to be
completed in 2023.
The bioproduct mill will not use any fossil fuels, and its electricity
self-suciency will be 250%. The pulp production capacity includes the
existing pulp production line for unbleached pulp used in the production
of white kraftliner, with an annual capacity of roughly 180,000 tonnes. The
new mill will replace the current pulp mill in Kemi, with an annual capacity
of about 620,000 tonnes.
The financing of Metsä Fibre’s bioproduct mill is composed of internal
financing and debt. Metsä Board will not invest equity in Metsä Fibre to
finance the project.
■ R&D, innovations and new products
As the amount of packaging grows, we need resource-ecient and easily
recyclable solutions. Metsä Board’s development work focuses on the
paperboard’s printing and conversion properties as well as on reducing
its weight, without compromising its strength. Lightweight paperboards
are resource-ecient and help reduce the carbon footprint of packaging
throughout the value chain.
In 2021, sales of Metsä Board’s dispersion-coated barrier paperboard
in food end uses were strong, and this growth is expected to continue.
Company continues to develop barrier solutions and is investigating their
commercial potential in food and food service applications. The deve-
lopment of barrier solutions is also part of the ExpandFibre programme,
Fortum and Metsä Group’s EUR 50 million programme promoting the
circular bioeconomy.
The Excellence Centre at Äänekoski, which began its operations in
2020, has organised workshops for developing new packaging solutions
in cooperation with customers. In 2021, the Excellence Centre held 25
development workshops.
Examples of Metsä Board’s new 360 Services include carbon footprint
calculations for packaging materials and computer-based packaging
simulation, which enables the digital modelling of prototype packages as
well as the optimisation of material and structural choices.
Metsä Group’s innovation company Metsä Spring and Valmet Oyj are
building a demo plant in Äänekoski. The plant will produce new kinds of 3D
fibre products directly from wood fibre pulp, without intermediate phases.
End uses will be in food packaging. The first test runs were carried out
during the fourth quarter of 2021.
Metsä Board’s research and development costs in 2021 totalled EUR
6.0 million (8.6), or 0.3% (0.5) of sales. The costs include direct expenses,
excluding depreciations and operational investments.
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■ Disclosure of non-financial information
Business model
Metsä Board is part of Metsä Group, and benefits from Metsä Group’s uni-
que value chain, from pure northern fibre to end products. The company
produces premium recyclable fresh fibre paperboards, used mainly in
consumer product packaging. The business model focuses on sustainable
and profitable growth as well as value creation for all stakeholders. Metsä
Board relies on global cooperation with its customers and technology
partners in product and service development emphasising innovation and
sustainability.
Metsä Board’s eight production units are located in Finland and Sweden,
close to its main raw material, high-quality northern wood fibre. The raw
wood is sourced centrally through Metsä Group from Finland, Sweden, the
Baltic countries and Russia. The wood is sourced only from sustainably
managed forests, in which the regeneration of the forests and biodiversity
is safeguarded. Most of the wood purchased in Finland comes from forests
owned by Metsäliitto Cooperative’s owner-members. In Sweden, the
company has a long-term wood delivery agreement with the Swedish forest
owner cooperative Norra Skog.
Metsä Board is part of Metsä Group, the parent company of which is
Metsäliitto Cooperative. Metsäliitto Cooperative holds 48.2% of Metsä
Board’s shares and 67.4% of the voting rights conferred by shares. Metsä
Board, on the other hand, owns 24.9% of its associated company, Metsä
Fibre. Metsä Board’s own pulp production and holding in Metsä Fibre toget-
her ensure the company’s self-suciency in pulp as well as end products of
a consistently high quality.
Sustainability principles
Metsä Board is a forerunner in sustainability and advances the bio- and
circular economy. Climate change mitigation and the ecient use of
resources are strong drivers of the company’s operations. The company
aims for fossil free production and products by the end of 2030.
Resource-eciently produced lightweight, recyclable and/or compostable
products support the circular economy and oer alternatives to plastic.
The promotion of sustainability includes compliance with good corporate
governance, bearing social and environmental responsibility, respecting
business ethics and human rights as well as the continuous improvement
of operations in all the above. In addition to its own operations, Metsä
Board requires sustainability throughout its supply chain.
The company’s sustainability targets focus on four aspects: 1) well-
being; 2) forests and wood; 3) sustainable products and a sustainable
supply chain; and 4) the climate and the environment. The sustainability
targets are based on Metsä Board’s business strategy, Metsä Group’s
strategic sustainability targets and materiality analysis on corporate
responsibility, which was last completed in 2018. The analysis took into
account the impacts of Metsä Group’s operations on society and the
environment, as well as stakeholders’ perspectives.
Policies, management systems
and sustainability management
Work and decision making at Metsä Board are guided by Metsä Group’s
Code of Conduct, complemented by policies concerning competition law,
the personnel, equality, environmental matters and information security,
among other things. Suppliers are also expected to commit to our Supplier
Code of Conduct. All Metsä Board mills apply quality, occupational health
and safety, environmental and energy eciency management systems
(ISO 9001, ISO 45001, ISO 14001, ISO 50001), as well as the management
and monitoring system ISO 22000 required by food safety. In addition, the
mills which also produce paperboard for food packaging apply the FSSC
22000 food safety system.
At Metsä Board, the realisation of sustainability is supported and
monitored by the company’s Board of Directors, CEO and Corporate Mana-
gement Team. Sustainability is incorporated into the strategy approved by
the company’s Board of Directors and the company’s long-term business
and investment plans, risk assessments and annual action plans.
The Board discusses and approves the sustainability targets presented
by the CEO and monitors their implementation. The CEO is responsible
for the implementation of the sustainability measures in accordance with
instructions provided by the Board. Sustainability reviews are discussed
by Metsä Board’s Corporate Management Team and Board of Directors
several times a year. The SVP, Development, takes part in the Metsä Group
Sustainability Process Management Team and reports on the realised
results of the sustainability measures to the Sustainability Process Mana-
gement Team quarterly. Annual targets related to sustainability have been
set to the CEO; SVP, Development; and SVP, Production, which impact the
amounts of their individual remuneration.
International commitments and recognitions
Metsä Board respects internationally recognised human rights in accor-
dance with the UN’s Universal Declaration of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work. The company is
committed to operating according to the UN’s principles concerning busi-
ness operations and human rights and requires the same from its business
partners. The company also supports the UN’s Global Compact initiative
and its principles on human rights, labour, the environment and anti-cor-
ruption. Metsä Board’s sustainability targets contribute to the realisation
of the UN’s Sustainable Development Goals. The company’s targets for
reducing greenhouse gas emissions have been approved by the Science
Based Targets initiative and accord with the Business Ambition for 1.5°C
commitment. Metsä Board has achieved excellent scores in assessments
related to the environment, social responsibility and governance carried
out by MSCI, Sustainalytics, Ecovadis and CDP, among others. In 2021, the
CDP included Metsä Board in its highest A Lists with respect to all three of
its environmental themes: climate change; water security; and forests.
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Non-financial key figures
2021 2020
Target for
2030
Personnel
1)
Coverage of Code of Conduct training, % 99 99 100
Total Recordable Injury Frequency (TRIF)
per million hours worked
9.8 8.4 0
Lost-time accident frequency (LTA1)
per million hours worked
7.0 5.7 0
Raw materials and supply chain
Share of certified wood fibre, % 83 80 > 90
Suppliers’ commitment to the Supplier Code
of Conduct, % of total purchases
98 96 100
Supplier background check passed,
% of total purchases
92 84 100
Supplier sustainability assessment passed,
% of total purchases
54 53 100
Traceability of raw materials,
% of total purchases
98 97 100
Share of fossil-free raw materials and
packaging materials, % of dry tonnes
99.2 99.3 100
The environment
Fossil-based CO
2
emissions (Scope 1), t 255,467 240,036 0
Indirect fossil-based CO
2
emissions
(Scope 2, market-based), t
173,371 272,115 0
Indirect fossil-based CO
2
emissions
(Scope 2, location-based), t
306,555 373,816
2)
Indirect fossil-based CO
2
emissions
(Scope 3), t
1,854,840 1,847,773
3)
Bio-based CO
2
emissions, t 1,712,639 1,812,952
4)
Share of fossil free energy (Scope 1 + 2), % 85 83 100
Improvement in energy eciency
from 2018 level, %
+1.9 +2.1 +10
Reduction in the use of process water per
produced tonne compared to 2018 level, %
-13.5 -7.7 -30
Utilisation of production side streams, % 99.8 99.3 100
1)
The figures include the subsidiary Hangö Stevedoring Oy.
2)
The amount of location-based Scope 2 emissions is dependent on the energy mix in
Metsä Board’s production countries.
3)
SBTi-approved targets for 2024.
4)
The bioenergy we use is climate neutral according to current EU regulation and meets
the requirements of the EU’s sustainability criteria.
Personnel and safety at work
At the end of the financial period, the number of personnel was 2,389 (31
December 2020: 2,370), of whom 1,416 (1,422) were based in Finland.
In January–December, Metsä Board employed 2,461 people on average
(1–12/2020: 2,455). Personnel expenses in January–December totalled
EUR 216.0 million (196.9).
Metsä Board aims to ensure the availability and retention of skilled per-
sonnel by investing in its employer image, and with the help of development
programmes and successor planning. Future retirements are prepared for
with retirement forecasts and resource plans drawn up on their basis. The
company also arranges apprenticeship training in Finland, aiming to recruit
future personnel, and the mill units are investing in on-the-job learning
and the sharing of know-how. The company aims to anticipate risks
through early support discussions and solutions between supervisors and
employees, the anticipation of possible working capacity risks as well as by
targeting guidance and support at risk groups.
The company conducts a personnel survey, measuring job satisfaction,
and an ethics barometer, measuring the personnel’s view on the realisation
of the Code of Conduct in practice, in alternate years. The overall score
measuring job satisfaction in the renewed personnel survey conducted
in 2021 was 72.9, which was on a par with Europe’s general norm of 72.8,
used as a benchmark.
Metsä Board aims for zero accidents at work. In 2021, the Total Recor-
dable Incident Frequency, or TRIF, was 9.8 (2020: 8.4), while the Lost-time
accident frequency, or LTA1, was 7.0 (5.7). The frequency of accidents at
mills increased, but in the port operations of Hangö Stevedoring, safety
developed positively. The most typical accidents consisted of injuries to
hands and feet. Accidents are prevented with the aid of common safety-at-
work standards, proactive measures – such as safety observations, safety
walkthroughs and safety training – and investments improving safety. All
Metsä Board mills and the company’s head oce apply the 5S method,
which aims to increase productivity, safety and wellbeing at work.
Operations during the COVID-19 pandemic
Metsä Board applies precautionary measures in proportion to the situation
and partly exceeding those required by the authorities. The principal
objectives have been to ensure the health and safety of personnel, prevent
the spread of the virus and secure business continuity. Metsä Board’s
production and deliveries have run without interruptions during the pande-
mic, and chains of transmission have been avoided. The pandemic has not
resulted in changes to the company’s sustainability targets.
The mills and oces have followed strict special arrangements which
minimise close contact along passageways, in cafeterias and sta
facilities and at workstations. Personnel have been provided with detailed
instructions on hygiene and the use of masks. The special arrangements
also apply to suppliers visiting the mills. The mills have also organised mass
testing whenever a regional COVID-19 situation has required it. Company
personnel with jobs that allow it have worked remotely throughout the pan-
demic. The possibility of remote working will continue after the pandemic.
Employees’ working ability and the maintenance of their working capacity
has been supported by virtual guidance.
Respecting human rights, equality as well as anti-
corruption and anti-bribery measures
Metsä Board expects its personnel to comply with the applicable legisla-
tion, operate fairly and make ethically sound decisions. The Code of Con-
duct and the related training programme seek to strengthen the culture
of doing the right thing, help the personnel identify ethically challenging
situations and encourage them to report any shortcomings they observe.
Code of Conduct training has been completed by 99% (99) of the
company’s personnel. The Code of Conduct commits to a respect for
human rights, for example, and measures against corruption and bribery.
Human rights issues are also included in the equality training aimed at the
entire personnel and in the Know Your Business Partner training organised
for the sourcing and sales sta. Partners are likewise expected to abide by
a code of conduct. The company has continued to develop its processes on
the basis of the human rights risk survey initiated in 2017 to prevent human
rights risks connected to its operations and supply chain
Metsä Board is committed to developing a culture of equality in which
everyone has the opportunity to succeed in their career and be an
accepted member of the workplace community. Personal characteristics
– such as gender, age, ethnic background, sexual orientation or disability –
have no impact on an individual’s opportunity to succeed in the workplace
community. Metsä Board promotes the diversity, equality and inclusion
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of its personnel with the Metsä For All vision published in 2021 and with
the help of set targets. Among other things, the targets support gender
equality in the workplace community and diversity in recruitment.
Metsä Group has a joint Compliance and Ethics Channel through which
personnel and stakeholder representatives can anonymously report any
shortcomings they detect. All breaches and violations, as well as suspected
breaches and violations, brought to the attention of the company are inves-
tigated. Such investigations are led by the compliance committee. In 2021,
Metsä Board was informed of a total of 10 (10) cases involving conflicts of
interest, inappropriate behaviour or shortcomings in equal treatment, for
example. None of the cases has resulted in legal proceedings or concerned
corruption, bribery or the use of child labour.
Raw materials and supply chain
The sustainability of Metsä Board’s raw materials and supply chain is
ensured within separate processes in respect of wood fibre and other raw
materials and services.
Metsä Board’s wood supply is ensured by Metsä Group’s wood supply
and forest services. The wood fibre’s sustainability and traceability are
ensured by practices which meet the requirements of the PEFC Chain-of-
Custody and FSC® Chain-of-Custody systems. All the wood raw material
used by the company is traceable and comes from either certified or
controlled, sustainably managed northern European forests, in which the
regeneration of forests and biodiversity is safeguarded. Metsä Board aims
for certified wood to account for at least 90% of all the wood used by the
company by 2030. During the financial period, 83% (80) of the wood came
from certified forests.
The sourcing of other raw materials and services is centralised in Metsä
Group, where the group-wide sourcing process ensures that the partners
operating in the group’s supply chain operate sustainably. This aims to
minimise risks related to the environment, health, corruption, for example,
the use of child labour and human rights violations in the supply chain.
Metsä Board’s minimum requirements for purchasing agreements
include the supplier’s commitment to Metsä Group’s Supplier Code of
Conduct or the supplier’s equivalent code of conduct. The purchasing
agreements may also contain other sustainability requirements. The
supplier selection process includes a risk analysis, which covers a review of
the suppliers’ country and category risks and compliance with laws. Metsä
Board complies with third-party due diligence in the Know Your Business
Partner background check, which covers a review of a supplier’s back-
ground in terms of trade sanctions, money laundering, corruption, human
rights violations and other key risks. Metsä Board also has a corresponding
process applicable to customers. Key suppliers and any risky suppliers are
further requested to respond to a sustainability assessment questionnaire.
Every year, Metsä Group and external auditors audit some of Metsä
Board’s suppliers. In 2021, Metsä Group conducted 0 (12) audits, and an
external party 17 (9), on Metsä Board’s suppliers’ premises. The pandemic
impacted on the number of the audits. Based on the assessments and the
results of the audits, the suppliers are informed of any deviations and given
recommendations. They also serve as a basis for monitoring suppliers
expected to improve their sustainability management In 2021, safety at
work and environmental issues were more extensively considered in the
assessments, the audits and the selection of suppliers. The auditors were
also trained to identify risks related to social responsibility, such as those
involving forced labour and labour exploitation.
In 2021, we knew the origin – at least the country of manufacture – with
regard to 98% (97) of the total purchases of raw materials and packaging
materials. The systematic collection of origin data continues to be deve-
loped. The proportion of fossil free raw materials, including the packaging
materials of the company’s own products, was 99.2% (99.3).
In its Science Based Targets, Metsä Board is committed to 70% of its
non-fibre suppliers and of the logistics operators related to its customer
deliveries, measured as a share of the company’s purchasing costs, setting
themselves targets in accordance with the SBTi by 2024. In 2021, 16% (5)
of the company’s suppliers within the target group had done so.
Climate and the environment
Metsä Board aims to use only fossil free energy by the end of 2030. In
essence, this refers to a situation in which the company’s mills do not use
fossil fuels or purchase energy generated with fossil fuels, meaning that
the target for fossil-based CO
2
emissions (Scope 1 and Scope 2) is zero.
In 2021, 85% (83) of the energy used by Metsä Board was fossil free. The
company has reduced its fossil-based CO
2
emissions (Scope 1 and Scope
2) per tonne produced by 25% in 2018–2021. In terms of energy eciency,
Metsä Board aims for a minimum improvement of 10% in 2018–2030. In
2021, energy eciency improved by 1.9% (2.1) compared to 2018.
To achieve the fossil free target, the company has drawn up an
investment and action plan applicable to all its mills. In accordance with
the plan, peat was replaced by renewable energy in the energy generation
of the Kyro mill in 2021. The use of peat at the Simpele mill was reduced,
and the aim there is to phase out the use of peat altogether during 2022.
The renewal of the recovery boiler and turbine at the Husum pulp mill
progressed. Once completed, the investment will increase the mill’s
generation of renewable energy and increase its electricity self-suciency
from around 40% to approximately 80%. In addition, the use of heavy fuel
oil as a backup fuel will reduce, and by 2030, the necessary support fuels
will be replaced with renewable alternatives.
The emissions of the value chain (Scope 3) make up 81% of Metsä
Board’s fossil-based carbon dioxide emissions. The target is that 70%
of the non-fibre suppliers and logistics operators related to customer
deliveries, measured as a share of the company’s purchasing costs, would
set themselves targets in accordance with the SBTi by 2024.
Metsä Board’s water use in 2021 amounted to 115 million cubic metres
(114), of which 59.6 million cubic metres (62.0) was process water. Surface
water accounted for 100% of the process and cooling water. Metsä
Board does not abstract any water at all from areas with a high baseline
water stress (WRI Aqueduct Water Risk Atlas). Of all the water used by
the company, roughly 99% is returned to the waterbodies after use. The
aim is to reduce the use of process water by 30% per tonne produced in
2018–2030. In 2021, the use reduced by 13.5% (7.7) compared to 2018. To
reduce its water use, the company has defined mill-specific measures for
increasing the eciency of water recycling and reducing the intake of raw
water. The Husum integrated mill accounts for approximately 40% of the
water use. The renewal of the Husum pulp mill will therefore significantly
reduce Metsä Board’s water use by 2030. 99.8% (99) of production side
streams was used as materials or energy. The target stands at 100%.
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Environmental responsibilities and obligations
Metsä Board has environmental liabilities related to former operations at
sites that have since been closed, sold or leased, as well as at decommis-
sioned landfill sites. Financial provisions for the cost of land rehabilitation
work have been made where it has been possible to measure the compa-
ny’s liability for land contamination. Metsä Board’s environmental liabilities
in 2021 totalled EUR 2.7 million (3.4), and its environmental expenses
amounted to EUR 13.3 million (16.3). The environmental expenses consist
mainly of expenses related to the use and maintenance of environmental
protection equipment, expenses related to waste management and envi-
ronmental insurance, and the depreciation of capitalised environmental
expenses. There was an oil spill at the Husum mill on September, which ori-
ginated from the mill’s oil burner. To minimise any environmental damage,
Metsä Board has supported the incident’s investigation, and the clean-up
of the oil from the sea and the shores with all the necessary resources.
Company has also maintained a dialogue with the key stakeholders, such
as residents and authorities. In addition, Metsä Board’s production units
recorded in 2021 some cases in which permit conditions were exceeded
at a monthly or a yearly level. These were reported to the authorities in
accordance with the relevant requirements.
Risk descriptions
The risks related to the environmental, personnel and social issues, respect
for human rights as well as the anti-corruption and anti-bribery activities
reviewed above are described in more detail in the Board of Directors’
Report in the section Most significant risks and uncertainties section.
Metsä Board’s risks related to climate change and biodiversity loss relate
in particular to the use of forests, energy and water, which the company
reports in accordance with the TCFD recommendations.
Disclosures in accordance with the TCFD
recommendations
Metsä Board’s disclosures concerning climate-related risks and opportu-
nities in accordance with the recommendations of the Task Force on Cli-
mate-related Financial Disclosures (TCFD) are compiled in the table below.
The references to more detailed information are indicated with abbrevia-
tions: (AR) Annual Report, (BDR) Board of Directors’ Report, (FS) Financial
Statements, (CG) Corporate Governance Statement.
Governance
Disclose the organisation’s governance around climate-related risks and opportunities
a) Describe the Board’s oversight of
climate-related risks and opportunities.
AR: Sustainability governance pp. 24–25
CG: Risk management pp.164–165
b) Describe the management’s role in assessing and
managing climate-related risks and opportunities.
AR: Sustainability governance pp. 24–25
CG: Risk management pp.164–165
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s business operations, strategy and financial planning where such
information is material.
a) Describe the climate-related risks and opportunities
the organisation has identified over the short, medium,
and long term.
The identified climate-related risks and opportunities concern mainly the medium-term (1–5 years)
and long-term (more than five years) future. Weather-related risks such as dry summers and rainy
winters may also occur in the short term (0–1 years).
AR: Strategy pp. 10–11
AR: Operating environment pp. 14–17
AR: Product and service development pp. 18–19
AR: Climate-related risks and opportunities pp. 28−29
AR: Sustainable products pp. 44–49
BDR: Most significant risks and uncertainties pp. 76–79
CG: Risk management pp. 164–165
b) Describe the impact of climate-related risks and
opportunities on the organization’s businesses,
strategy, and financial planning
AR: Strategy pp. 10–11
AR: Sustainability governance pp. 24–25
AR: Climate-related risks and opportunities pp. 28−29
BDR: Most significant risks and uncertainties pp. 76–79
CG: Risk management pp.164–165
c) Describe the resilience of the organisation’s strategy,
taking into consideration dierent climate-related scenarios,
including a 2°C or lower scenario.
Metsä Board is already adapting its operations to a low-carbon economy and is committed to the target
of limiting global warming to 1.5 °C compared to the pre-industrial era. The company aims for zero fossil
carbon dioxide emissions (Scope 1 and Scope 2) by the end of 2030. Practical adaptation measures
have been carried out in the sourcing of fuels and purchased energy, for example. The company has
continued to analyse climate-related scenarios and examined the potential eects of transitional and
physical risks and opportunities on its business. Metsä Board employs, among others, analyses based on
the RCP 2.6, RCP 4.5 and RCP 8.5 scenarios (Representative Concentration Pathways).
AR: Product and service development pp. 18–19
AR: Climate-related risks and opportunities pp. 28−29
AR: Sustainable products pp. 44–49
AR: Climate and the environment pp. 52–59
BDR: Most significant risks and uncertainties pp. 74–79
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Risk management
Disclose how the organisation identifies, assesses and manages climate-related risks.
a) Describe the organisation’s processes for identifying
and assessing climate-related risks.
Climate-related risks have been integrated into Metsä Board’s overall risk management:
AR: Sustainability governance pp. 24–25
BDR: Most significant risks and uncertainties pp. 76–79
CG: Risk management pp. 164–165
b) Describe the organisation’s processes for managing
climate-related risks.
BDR: Most significant risks and uncertainties pp. 76–79
CG: Risk management pp.164–165
c) Describe how the processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management.
Climate-related risks have been integrated into Metsä Board’s overall risk management:
AR: Sustainability governance pp. 24–25
BDR: Most significant risks and uncertainties pp. 76–79
CG: Risk management pp.164–165
Climate-related risks are assessed as part of Metsä Board’s assessment process for overall risks.
The results of the risk assessment are presented to the Board of Directors and the Audit Committee
twice a year. The risks are assessed with a risk matrix which accounts for the magnitude of a risk’s
potential financial impact and the likelihood of the risk’s materialisation.
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
AR: Sustainability targets pp. 20–23
AR: Sustainable products pp. 44–49
AR: Climate and the environment pp. 52–59
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions and the related risks.
Scope 1, Scope 2 and Scope 3 emissions:
AR: Climate and the environment pp. 52–55
c) Describe the targets used by the organisation
to manage climate related risks and opportunities
and performance against targets.
AR: Sustainability targets pp. 20–23
AR: Sustainable products pp. 44–49
AR: Climate and the environment pp. 52–59
■ EU taxonomy
General
The Taxonomy is a classification system for the financial market based
on Regulation (EU) 2020/852, valid as of the beginning of 2022, listing
economic activities sustainable in terms of climate and the environment.
The Taxonomy aims to direct money to sustainable investments in such
a way that the EU can achieve the ambitious emission reduction targets
it has set for itself. Technical screening criteria and limit values, based on
which an activity can be considered sustainable, are determined for each of
these defined economic activities.
The European Commission has stated that the Taxonomy is subject to
continuous development and that the Commission will begin the task of
determining the technical screening criteria by determining them for the
economic activities in which the improvements to be carried out will have
the greatest impact on the climate and environment. Metsä Board’s main
business operations, the paperboard and market pulp, are not currently
included in the Taxonomy. Therefore company’s taxonomy-eligible
economic activities account for only a minor share, especially of its sales.
Metsä Board is currently unaware of the schedule and extent to which
the Taxonomy’s scope may come to cover the company’s main economic
activities.
Climate change mitigation and adapting the business to a low-carbon
future are at the core of Metsä Board’s objectives. The company aims for
entirely fossil free production and products by the end of 2030. In accor-
dance with the principles of the circular economy, the company invests in
the sustainable use of forests and the resource eciency of its processes.
In addition, Metsä Board focuses on minimising waste and emissions
and keeping materials in circulation for extended periods of time. Metsä
Board’s products oer an alternative to products made from fossil-based
raw materials.
Reporting on taxonomy eligibility
The Taxonomy defines six sustainable environmental objectives against
which dierent economic activities are assessed. These environmental
objectives are: (a) climate change mitigation; (b) climate change adapta-
tion; (c) the sustainable use and protection of water and marine resources;
(d) the transition to a circular economy; (e) pollution prevention and cont-
rol; and (f) the protection and restoration of biodiversity and ecosystems.
Metsä Board discloses for the financial year 2021 on the extent to which
the company’s business is eligible in relation to the first two environmental
objectives - climate change mitigation and climate change adaptation - in
accordance with the EU Taxonomy’s regulations. These disclosures
concerning the taxonomy-eligible economic activities comprise their share
of the turnover (sales), capital expenditure and operating expenditure.
As of the 2022 financial year, Metsä Board will disclose both the taxo-
nomy-eligible economic activities and their alignment with the Taxonomy.
The Taxonomy-aligned disclosures focus on how well the economic
activity in question supports the confirmed environmental objectives. An
economic activity is considered Taxonomy-aligned if it makes a substantial
contribution to one of the defined environmental objectives and causes no
significant harm to the other objectives. In addition, the economic activity
must meet minimum social safeguards -criteria.
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■ Metsä Board’s taxonomy-eligible
economic activities in 2021
Economic activity Turnover
Capital
expendi-
ture
Operating
expendi-
ture
4.20. Cogeneration of heat/cool and power
from bioenergy
0.1% 59.0% 7.5%
4.24. Production of heat/cool from bioenergy 0.0% 0.2% 1.2%
5.1. Construction, extension and operation of
water collection, treatment and supply systems
0.0% 0.0% 0.4%
5.3. Construction, extension and operation of
waste water collection and treatment
0.0% 0.2% 0.7%
5.5. Collection and transport of non-hazardous
waste in source segregated fractions
0.0% 0.0% 2.1%
Taxonomy-eligible activities, total 0.1% 59.4% 11.9%
Taxonomy-non-eligible activities, total 99.9% 40.6% 88.1%
Calculation principles for shares of
taxonomy-eligible economic activities
In the taxonomy-eligible turnover, Metsä Board includes the sales of
products and services that is included in Metsä Board’s reported sales.
The production of the taxonomy-eligible economic activities is used almost
entirely in Metsä Board’s operations, due to which these activities generate
very little sales to be reported.
The taxonomy-eligible capital expenditure includes mainly investments
in the renewal of the Husum pulp mill’s recovery boiler and turbine in class
4.20, Cogeneration of heat/cool and power from bioenergy. The other
taxonomy-eligible capital expenditure consist of replacement investments
in the bioenergy-based production of heat and the water treatment carried
out at the Kaskinen and Simpele mills. Metsä Board includes additions to
tangible and intangible fixed assets in the financial period’s capital expen-
diture, including any right-of-use assets recognised based on long-term
lease agreements.
The taxonomy-eligible operating expenditure includes research and
development expenditure recognised as costs and the maintenance costs
of production units and property, supplemented by the costs of waste
management and short-term lease agreements. The expenditure includes
both costs of external service and the wages, employers’ contributions
included, of Metsä Board’s own personnel. The operating expenditure
related to the recovery of chemicals and heat at the Husum pulp mill under
class 4.20 make up the most significant proportion of the taxonomy-eli-
gible operating costs. The operating expenditure of the bioenergy-based
heat production of the Kaskinen pulp mill is disclosed in class 4.24. The
operating expenditure related to water treatment and waste management
is accumulated from all Metsä Board mills.
■ Most significant risks and uncertainties
Metsä Board’s risk management is systematic and proactive, and it
assesses and manages business-related risks, threats and opportunities.
Metsä Board’s Board of Directors is responsible for the company’s risk
management and approves its risk management policy. Metsä Board’s
business operations systematically assess strategic, operational, financial
and liability risks. Key risks are accounted for in the planning processes
of the business operations and they are prepared for with management
measures. In addition, the Corporate Management Team reviews the most
significant risks as part of its management-team work.
Risks that exceed the Metsä Board’s risk-bearing capacity have been
transferred with insurance, derivatives and other contracts to insurance
companies, banks and other counterparties. Significant liability risks are
covered with the group’s property, interruption, liability, transport damage,
cyber and credit insurance policies.
Identified risks and the means by which they are managed are reported
to the company’s Board of Directors and the Board of Directors’ Audit
Committee at least twice a year. The following risks and uncertainties with
a potential impact on Metsä Board’s business operations and profitability
were identified in the risk assessments carried out in 2021.
■ Market risks
Coronavirus pandemic
The coronavirus pandemic continues to cause uncertainty in the world
economy and Metsä Board’s business environment. The uncertainty cau-
sed by the pandemic is sustained by the virus variants, the restriction and
lockdown measures imposed by governments, dierences in vaccination
coverage and uncertainty over the duration of vaccine ecacy. A prolon-
ged pandemic could reduce the demand for Metsä Board’s products and
cause disruptions in the company’s production or operational chains. On
the other hand, the accommodative monetary policy during the pandemic,
combined with the positive economic impacts of the recovery from the
pandemic, may lead to an overheating of the economy. The unwinding of
the situation may have sudden negative eects on the world economy and
thereby on the demand for Metsä Board’s products and its profitability. In
addition, customers’ weaker cash position or slower payment behaviour
may have an impact on the company’s cash flow and lead to credit losses.
The pandemic may also incur additional costs, should the availability of
transport capacity weaken, for example.
Uncertainty in the development of the world economy
In addition to changes in the situation with the pandemic, the world
economy in 2022 will be aected by a continuation of the tension between
the United States and China, the development of China’s economy,
accelerated inflation, the tightening monetary policies of central banks as
well as disruptions in global supply and delivery chains. An increase in the
tensions between the United States and Russia and the adoption of any
new sanctions could also cause uncertainty in the world economy.
Significance of the Chinese market
China is a significant market area, especially for Metsä Board’s associated
company Metsä Fibre. China’s economic growth has slowed down due
to the country’s strict restriction measures, troubles in its real estate
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sector and an energy shortage in the industrial sector. Problems in China’s
industrial sector may increase the problems and costs of global delivery
chains. The relations between the EU and China are burdened by bilateral
sanctions and diering views on multiple issues. Any further slowdown
in the growth of the Chinese economy or deterioration in the relations
between the EU and China could have a negative eect on the demand
for market pulp or paperboards in China and thereby on Metsä Board’s
profitability.
Changes in the operating environment
Metsä Board operates in an industry where the balance between supply
and demand, and any changes to it, impact the demand for and prices of
end products. New operators entering the market, alternative products
or changes in consumer behaviour may have a negative impact on the
demand for Metsä Board’s paperboards. An increase in competitors’
capacities or the expansion of product ranges may lower the price levels of
end products and have a negative eect on Metsä Board’s profitability. Any
significant changes in exchange rates may also influence products’ market
balance and companies’ competitiveness.
Changes in regulations, such as the EU’s climate and environmental
policy and increasing new requirements to limit carbon dioxide, sulphur or
other emissions, may increase production costs and weaken the profitabi-
lity of business operations. The restrictions imposed on products that con-
tain single-use plastics guide the development of Metsä Board’s products.
The acceptability of plastic-free single serving products also involves risks.
In addition, the acceptability and taxation of various packaging materials
involve regulatory risks.
Pulp market situation
Structural changes in customers’ pulp use, increasing competition and new
production capacity in the global pulp market may have a negative impact
on pulp delivery volumes and market prices and thereby on Metsä Board’s
profitability. The market price of pulp strengthening (weakening) by 10%
would have a positive (negative) impact of roughly EUR 30 million on the
company’s operating result.
Geopolitical risks
The impact of existing inter-related geopolitical risks and crises in the world
may manifest as changes in regional security situations and living condi-
tions, and also in the global economy. The eects of regional conflicts may
be manifested as mass migrations and in terrorism based on extremist
ideologies. The predictability of these risks is poor, and their impact may
also emerge either very rapidly or over a long period of time.
Restrictions on international trade and sanctions
Potential changes in the industrial and trade policies of leading industria-
lised countries, the materialisation of geopolitical risks or an escalation of
geopolitical risks may lead to more extensive measures restricting trade
or the use of international sanctions. The possible consequences of these
include a slowdown in the recovery and growth of the world economy and
even a curtailment of global trade flows. Sanctions and restrictions on
international trade could have negative eects on the demand for Metsä
Board’s products and the company’s profitability.
■ Operational risks
Sustainability and climate risks
Promoting sustainability supports Metsä Board’s business and its
development, but climate change and the loss of biodiversity, in particular,
also involve risks. At Metsä Board, these risks involve especially forests as
well as the use of energy and water, and if materialised, the risks could have
a negative impact on Metsä Board’s business. Climate risks are divided into
1) transition risks, i.e., the risks arising from the transition to a low-carbon
economy and 2) physical risks, which involve changes in temperatures and
precipitation, and which will arise if climate change is not mitigated.
The most important transition risks include increasing regulation, as well
as market and reputational risks, if the company fails to eectively respond
to the changed market environment. The regulation aiming to combat cli-
mate change and reduce greenhouse gas emissions may result in demands
for new technology and impact the pricing of energy and greenhouse gas
emissions, thereby increasing costs. In addition, safeguarding carbon sinks
and the biodiversity of forest nature with increasing regulations causes
risks for using forests. The supply and demand of products in a low-carbon
economy may also dier from the current situation.
Physical climate risks can be further divided into acute weather
phenomena and more permanent changes. Extreme weather phenomena
– such as storms, droughts and floods – may cause disruptions in
production or impede the transport of raw materials and products. In the
long term, both an increase in the frequency of droughts and increased
precipitation and floods may weaken the availability of the process water
needed by mills and result in production suspensions. The risk is mitigated
by the fact that all Metsä Board mills are located in northern areas with
ample water. As the climate grows warmer, the most significant physical
risks influencing forests and the availability of wood raw material will be
the weakening of harvesting conditions as winters get shorter and insect
damage increases.
Climate change mitigation and the transition to a low-carbon economy
are strongly visible in Metsä Board’s sustainable development goals. The
core of these objectives consists of a transition to the use of entirely fossil
free energy in production, abandoning the use of raw materials based on
fossil oil and increasing the eciency of energy and water consumption.
The measures related to the objectives help Metsä Board to manage cli-
mate risks. At the same time, they open new opportunities for Metsä Board
in the changed operating environment and meet the needs of the circular
economy. To safeguard biodiversity and protect waterways, Metsä Group’s
wood supply has established programmes for ecological sustainability and
nature management in forestry. All wood sourced by Metsä Group comes
from sustainably managed forests, and this is verified by certification or
controlled in some other way.
Metsä Board’s reporting on climate risks and opportunities in line
with TCFD recommendations can be found in the section Statement on
non-financial information.
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Concentration of operations in
a limited geographical area
Seven of Metsä Board’s eight production units are located in Finland, and
one of them is located in Sweden. Finland has a history of labour disputes
in both the forest industry and the distribution chain of forest industry
products. These may have a negative impact on production volumes and
customer deliveries and weaken the company’s competitiveness and
profitability. Labour disputes in Sweden may also damage Metsä Board’s
production and customer deliveries and have a negative impact on the
company’s business operations.
Continuity risks
The continuity of mills’ production may be impacted by, for instance,
large-scale fires, significant equipment malfunctions, serious accidents,
extreme weather phenomena and environmental damage. Employees
falling ill due to infectious diseases, any persisting malfunctions in IT
systems, labour disputes, delivery problems and availability issues in the
most important raw materials and disruptions in the logistics chain may
furthermore suspend the entire business or parts thereof.
Interruptions in production or the supply chain may influence the
continuity of customer service and delivery reliability. If such interruptions
continue for a long period of time, the resulting financial losses may be
very substantial and result in the permanent loss of customers. The
company has prepared continuity and recovery plans in preparation for the
realisation of these risks.
Business development
The development and growth of Metsä Board’s business requires
strategic choices that involve risks. The uncertainties in question involve
the selection and timing of growth investments, for example, as well
as the development of sales and the customer portfolio. The growth of
the paperboard business and the introduction of new production to the
market are dependent on successful sales. The commercialisation of new
products involves uncertainties that, should they be realised, could have
a negative impact on the demand for Metsä Board’s products and the
company’s profitability. Increasing sales on a global scale also involves cost
and exchange rate risks.
The business is also developed by modernising the production techno-
logy, eciency programmes, product development and harmonising
business processes. If the costs of development projects and investments
are significantly exceeded, their completion is delayed, or their productive
or commercial objectives are not met, this could negatively aect the
company’s profitability.
Business ethics
Business ethics in general, as well as the prevention of human rights
violations, conflicts of interest, misuses, corruption, bribery and money
laundering, have been identified as requiring continuous development. The
company carries out an ethics barometer aimed at the entire personnel
every other year. The anonymous Compliance and Ethics Channel and the
functionality of the related investigation process are also key tools in the
identification and management of compliance-related risks. As part of its
continuous sustainability work, the company develops processes involving
the identification of its suppliers and customers which allow for more
eective risk identification and management.
Cost and availability risks of production inputs
An unforeseen rise in the price of production inputs important for Metsä
Board’s operations - such as wood, energy and chemicals - or availability
problems may reduce profitability and threaten the continuity of opera-
tions. Changes in exchange rates may also have an eect on the costs of
some production inputs. Metsä Board works to hedge against this risk by
entering into long-term delivery agreements and goods-related derivative
contracts. In addition, a steep increase in transport and other logistics
costs and the weak availability of transport may have a negative eect
on Metsä Board’s profitability. Moreover, any amendments to legislation,
regulations or taxation related to the most important production inputs
may result in significantly increased costs.
Liability risks
Metsä Board’s business involves liability risks, such as contractual, envi-
ronmental and product liability risks. Liability risks are managed by way
of ecient business processes, contract training, management practices,
quality control and transparent operations. Some of the operational
liability risks have been hedged with insurance policies.
Corporate security risks
Risks to corporate security include shortcomings and neglect in personal
safety and security and safety at work and in the management of financial
misconduct, any negative information manipulation and cyber threats,
threats aecting the supply chains, and the adequacy of internal control.
Operating processes related to corporate security and the guidelines,
training and internal control related to the management of threat factors
are developed continuously, and exercises on the management of crisis
situations are organised on a regular basis.
Personnel availability and retention
Metsä Board pays attention to ensuring the availability and retention
of competent personnel by means of various personnel development
programmes and successor plans, and by investing in its employer image.
Metsä Board also prepares for retirements and other personnel risks
through the promotion of multiple skills and work ability as well as through
job rotation.
■ Financial risks
Financial and exchange rate risks
As a result of increasing regulation in the financial market, the operations
of credit and bond markets may become more dicult, which may impact
the company’s ability to acquire long-term debt financing at a competitive
price. The financial risks are managed in accordance with the treasury
policy approved by Metsä Board’s Board of Directors. The purpose is to
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hedge against considerable financial risks, balance cash flow and give the
business enough time to adjust to changing conditions.
Metsä Board sells its products in several countries and is therefore
susceptible to fluctuations in exchange rates. The US dollar strengthening
by 10% against the euro would have a positive impact of approximately
EUR 80 million on Metsä Board’s annual operating result. Correspondingly,
the Swedish krona strengthening by 10% would have a negative impact of
approximately EUR 50 million. The British pound strengthening by 10%
would have a positive impact of approximately EUR 10 million. The impact
of weakened exchange rates would be the opposite. The sensitivities do not
include the impact of hedging.
Credit risks
The management of credit risks related to commercial operations is
the responsibility of Metsä Board’s executive management and Metsä
Group’s centralised credit control. Metsä Board’s management determines
the limits on credit extended to customers and the applicable terms of
payment in cooperation with the centralised credit control. Nearly all
credit risks are transferred by means of credit insurance contracts. Metsä
Board’s customer credit risk was at a normal level in 2021. The main
principles of credit control are defined in the credit guidelines of the risk
management policy approved by the company’s Board of Directors.
Metsä Board’s financial risks and their management are described in
more detail in Note 5.6 to the consolidated financial statements (Manage-
ment of financial risks).
■ Legal proceedings
In the autumn of 2015, the Finnish Tax Administration, in its assessment of
the 2014 taxation, refused the deductibility of certain losses related to the
cross-border merger of a French subsidiary in Metsä Board Corporation’s
2014 taxation.
Metsä Board appealed the decision issued by the Tax Administration, as
the company believes the losses to be deductible. The Tax Administration’s
Adjustment Board dismissed the company’s appeal in March 2018. In
February 2021, the Administrative Court of Helsinki dismissed the appeal
made by the company on the Adjustment Board’s decision. In its decision
of September 2021, the Supreme Administrative Court did not grant
Metsä Board leave to appeal the matter, due to which the dismissal of the
Administrative Court of Helsinki remains valid, and the case is closed.
■ Governance
Metsä Board’s statutory administrative bodies are the Annual General
Meeting, the Board of Directors and the CEO. The Board of Directors has
general authority and, accounting for the scope and quality of the compa-
ny’s operations, it is responsible for matters that are strategic, far-reaching
and unusual in nature, and therefore not part of the company’s day-to-day
business operations. The CEO, supported by the Corporate Management
Team, the members of which are not members of the Board of Directors,
is responsible for the company’s operational management. The tasks and
responsibilities of the dierent administrative bodies are determined in
accordance with the Finnish Limited Liability Companies Act.
Metsä Board’s Board of Directors has nine members, three of whom are
women. A majority of Board members (six of nine) are independent of both
the company and its biggest shareholders. Three members of the Board of
Directors are not independent of Metsäliitto Cooperative. During the 2021
financial period, the Board of Directors held a total of 13 meetings, at which
the attendance rate of Board members was 99% (100 in 2020).
Metsä Board’s Board of Directors has determined the principles
applicable to the diversity of the Board. The realisation of the principles is
reported on yearly, in the company’s Corporate Governance Statement.
■ Resolutions of the 2021 AGM
The Annual General Meeting held on 25 March 2021 adopted the
company’s financial statements for the financial year 2020 and decided
to distribute a dividend of EUR 0.10 per share and capital in the amount
of EUR 0.16 per share from the reserve for invested non-restricted equity,
totalling EUR 0.26 per share.
The Annual General Meeting decided to keep the Board of Directors’
annual remuneration unchanged in such a way that the Chair of the Board
of Directors is paid annual remuneration of EUR 95,000, the Vice Chair
is paid EUR 80,000 and each member of the Board is paid EUR 62,500,
and that a meeting fee of EUR 800 is paid for each meeting of the Board
and committees of the Board that a member attends. The Annual General
Meeting decided to pay roughly half of the remuneration in the form of the
company’s B shares acquired through public trading. Furthermore, the
Annual General Meeting decided to pay the Chair of the Audit Committee
monthly remuneration of EUR 800.
The Annual General Meeting confirmed the number of Board members
as nine (9) and elected the following persons as members of the Board
of Directors: Hannu Anttila, teollisuusneuvos (Finnish honorary title);
Raija-Leena Hankonen-Nybom, M.Sc. (Economics); Erja Hyrsky, M.Sc.
(Economics); Ilkka Hämälä, M.Sc. (Technology); Kirsi Komi, LL.M.; Jussi
Linnaranta, M.Sc. (Agriculture); Jukka Moisio, M.Sc. (Economics); Timo
Saukkonen, M.Sc. (Agriculture); and Veli Sundbäck, LL.M. The Board
members’ term of oce continues until the end of the next Annual General
Meeting.
Further information about the decisions made by the Annual General
Meeting and materials related to the meeting is available on the company’s
website at https://www.metsaboard.com/Investors/General-Meeting/
General-Meeting-2021/Pages/default.aspx.
■ Shares
Metsä Board has two share series. At the end of the year, the number of A
shares was 32,802,175 and B shares was 322,710,571. Each A share carries
twenty (20) votes and each B share one (1) vote at the Annual General
Meeting. All shares entitle to equal dividends.
Metsä Board’s A shares can be converted to B shares if a shareholder or
a representative of the nominee registered shares makes a written request
for the conversion to the company. During the financial year 84,976 Metsä
Board A shares were converted into B shares. Metsä Board did not receive
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any flagging notifications during 2021. The company does not hold any
treasury shares.
At the end of the financial period, the closing price for Metsä Board’s B
share on Nasdaq Helsinki was EUR 8.61, the highest price EUR 11.01 and
lowest price was EUR 7.50. At the end of the financial period, the price
for Metsä Board’s A share on the Nasdaq Helsinki was EUR 9.38. The
share’s highest and lowest prices in 2020 were EUR 11.00 and EUR 8.50,
respectively.
In 2021, the average daily trading volumes of the B and A shares on the
Nasdaq Helsinki were 389,117 shares and 7,153 shares. The total trading
volume of the B share was EUR 896 million and the total trading volume of
the A share was EUR 17 million.
At the end of the financial period, the market value of all Metsä Board’s
shares was EUR 3.1 billion, of which the market value of the B shares and
the A shares accounted for EUR 2.8 billion and EUR 0.3 billion, respectively.
At the end of the review period, Metsäliitto Cooperative held 48% (31
December 2020: 48) of all shares, and the votes conferred by these shares
accounted for 67% (67) of the total votes. International and nominee-regis-
tered investors held approximately 14% (16) of all shares.
Board of directors’ authority to issue shares
The Board of Directors is authorised to decide on an issue of shares and
any special rights with an entitlement to shares. The maximum number of
shares that can be issued on the basis of the authorisation is 35,000,000
B shares, which corresponds to approximately 10% of all shares in the
company. The authorisation is valid until 23 March 2022. The authorisation
was fully unused on 31 December 2021.
■ Near-term outlook
Demand for folding boxboard and white kraftliners is expected to remain
good in Metsä Board’s main market areas in Europe and North America.
The average prices of paperboards are expected to rise in the first quarter
of 2022.
Global challenges with the availability of transport equipment will
increase logistics costs. The higher prices of especially energy and certain
chemicals will increase other production costs.
Demand for long-fibre market pulp is expected to remain good in Europe.
In China, demand for market pulp strengthened towards the end of 2021.
However, the weakened corona situation and China’s strict policies might
cause some uncertainty in demand. The global bottlenecks in logistics will
continue to impact pulp deliveries to Asia from all market pulp producing
areas.
■ Events after the financial period
On 1 January 2022, Metsä Board acquired all the shares in Hämeenkyrön
Voima Oy held by Pohjolan Voima Oyj and DL Power Oy, part of Leppäkoski
Group. Following the arrangement, Metsä Board owns 100% of Hämeenky-
rön Voima Oy. The arrangement will not have a significant impact on Metsä
Board’s financial key figures.
The start-up of the Husum pulp mill’s new recovery boiler and turbine will
be delayed. The company expects the new recovery boiler and turbine to
start up in September 2022. The earlier estimate was the first half of 2022.
■ Board of Directors’ proposal for dividend
The distributable funds of the parent company on 31 December 2021 were
EUR 651.3 million, of which the retained earnings for the financial year are
EUR 440.6 million.
The Board of Directors proposes to the Annual General Meeting to be
held on 24 March 2022 that a dividend of EUR 0.41 per share be distributed
for the 2021 financial period.
The proposed dividend corresponds to 50% of the earnings per share for
2021. The amount of dividend totals EUR 145.8 million.
The dividend will be paid to shareholders who are registered in the com-
pany’s shareholders register held by Euroclear Finland Oy on the dividend
payment record date of 28 March 2022. The Board of Directors proposes 7
April 2022 as the dividend payment date.
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EUR million Note 1–12/2021 1–12/2020
Sales 2.1, 2.2, 7.3 2,084.1 1,889.5
Change in stocks of finished goods and work in progress 11.9 -38.7
Other operating income 2.3, 7.3 57.0 33.3
Materials and services 2.4, 7.3 -1,461.0 -1,225.4
Employee costs 3 -216.0 -196.9
Share of result of associated company 7.2, 7.3 114.4 -2.4
Depreciation, amortisation and impairment charges 4.1, 4.2 -90.2 -94.5
Other operating expenses 2.4 -124.4 -137.5
Operating result 375.9 227.3
Share of profit from associated companies and joint ventures 7.2 0.0 -0.1
Net exchange gains/losses 5.2 -2.3 -3.4
Other financial income 5.2, 7.3 0.2 0.4
Interest and other financial expenses 5.2, 7.3 -7.9 -11.9
Result before tax 365.8 212.3
Income taxes 6 -51.8 -42.2
Result for the period 314.0 170.1
Other comprehensive income
Items that will not be reclassified to profit or loss 5.1
Actuarial gains/losses on defined benefit pension plans 3.4 3.0 -3.7
Financial assets at fair value through other comprehensive income 4.3 -5.8 -70.3
Share of profit from other comprehensive income of associated company -0.1 0.4
Income tax relating to items that will not be reclassified -0.8 15.0
Total -3.7 -58.6
Items that may be reclassified to profit or loss 5.1
Cash flow hedges -11.0 17.6
Translation dierences -4.8 6.2
Share of profit from other comprehensive income of associated company -3.8 0.7
Income tax relating to items that may be reclassified 2.2 -3.4
Total -17.4 21.1
Other comprehensive income, net of tax -21.1 -37.5
Total comprehensive income for the period 292.8 132.6
Result for the period attributable to
Shareholders of parent company 292.1 170.1
Non-controlling interest 21.9
Total comprehensive income for the period attributable to
Shareholders of parent company 272.4 132.6
Non-controlling interest 20.4
Adjusted average number of shares, thousands 355,513 355,513
Basic and diluted earnings per share for result for the period attributable to the
shareholders of parent company, EUR
The notes are an integral part of these financial statements.
Consolidated statement of comprehensive income
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EUR million Note 31 DEC 2021 31 DEC 2020
ASSETS
Non-current assets
Goodwill 4.1 12.4 12.4
Other intangible assets 4.1 6.2 6.7
Tangible assets 4.2 935.0 824.7
Investments in associated companies and joint ventures 7. 2 479.0 369.0
Other investments 4.3, 5.7 181.0 186.9
Other non-current financial assets 5.3 15.3 10.8
Deferred tax receivables 6 8.4 7.5
Current assets
Inventories 4.4 382.6 360.0
Accounts receivable and other receivables 4.5, 7.3 331.5 276.7
Current income tax receivables 1.0 0.7
Derivative financial instruments 5.7 34.0 33.3
Cash and cash equivalent 5.4, 7.3 524.2 214.0
Assets classified as held for sale 7. 2 11.0
Total assets 2,921.5 2,302.5
SHAREHOLDERS’ EQUITY AND LIABILITIES
Equity attributable to shareholders of parent company 5.1
Share capital 557.9 557.9
Translation dierences -27.2 -24.9
Fair value and other reserves 118.3 136.6
Reserve for invested unrestricted equity 208.9 265.8
Retained earnings 841.5 448.4
Non-controlling interests 146.2
Total shareholders' equity 1,845.6 1,383.8
Non-current liabilities
Deferred tax liabilities 6. 96.2 97.5
Post employment benefit obligations 3.4 13.7 13.4
Provisions 4.8 2.0 3.7
Borrowings 5.5, 5.6, 5.7 437.0 444.8
Other liabilities 4.6 1.5 1.9
Derivative financial instruments 5.7 1.7 3.4
Current liabilities
Provisions 4.8 1.0 1.0
Current borrowings 5.5, 5.6, 5.7 10.0 7.6
Accounts payable and other liabilities 4.7, 7. 3 467.5 340.4
Current income tax liabilities 19.9 0.1
Derivative financial instruments 5.7 18.6 4.9
Liabilities classified as held for sale 7. 2 6.8
Total liabilities 1,076.0 918.7
Total shareholders' equity and liabilities 2,921.5 2,302.5
The notes are an integral part of these financial statements.
Consolidated balance sheet
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Equity attributable to shareholders of parent company
EUR million Note Share capital
Translation
dierences
Fair value
and other
reserves
Reserve for
invested
restricted
equity
Retained
earnings Total
Non-control-
ling interest
Total
share holders'
equity
Shareholders’ equity, 1 Jan 2021 557.9 -24.9 136.6 265.8 448.4 1,383.8 1,383.8
Result for the period 292.1 292.1 21.9 314.0
Other comprehensive income net of tax
total
5.1 -2.3 -18.3 1.0 -19.7 -1.5 -21.1
Comprehensive income total -2.3 -18.3 293.1 272.4 20.4 292.8
Transactions with non-controlling
interests
7. 1 134.4 134.4 125.7 260.2
Share based payments 3.3 1.1 1.1 1.1
Related party transactions
Dividends and capital distribution 5.1 -56.9 -35.6 -92.4 -92.4
Shareholders’ equity, 31 Dec 2021 557.9 -27.2 118.3 208.9 841.5 1,699.4 146.2 1,845.6
Shareholders’ equity, 1 Jan 2020 557.9 -29.1 175.5 315.5 318.2 1,338.0 1,338.0
Result for the period 170.1 170.1 170.1
Other comprehensive income net of tax
total
5.1 4.2 -38.9 -2.8 -37.5 -37.5
Comprehensive income total 4.2 -38.9 167.3 132.6 132.6
Share based payments 3.3 -1.5 -1.5 -1.5
Related party transactions
Dividends and capital distribution 5.1 -49.8 -35.6 -85.3 -85.3
Shareholders’ equity, 31 Dec 2020 557.9 -24.9 136.6 265.8 448.4 1,383.8 1,383.8
The notes are an integral part of these financial statements.
Statement of changes in shareholders’ equity
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DEVELOPMENT
1–12/2020EUR million Note 1–12/2021
Cash flow from operating activities
Result for the period 314.0 170.1
Adjustments to the result, total 11.8 140.6
Interest received 0.1 0.1
Interest paid -11.2 -11.4
Dividends received 0.0 21.9
Other financial items, net -3.6 -6.3
Income tax paid -31.1 -45.2
Change in working capital 49.5 37.9
Net cash flow from operations 329.6 307.7
Cash flow from investing activities
Acquisition of other shares 0.0 -2.2
Capital expenditure -213.7 -154.2
Proceeds from disposal of other shares 0.2 0.1
Proceeds from sale of tangible and intangible assets 30.4 14.5
Change in non-current receivables, net 0.2 -0.2
Net cash flow from investing -183.0 -142.0
Cash flow from financing activities
Changes in non-controlling interests 261.2
Proceeds from non-current interest bearing liabilities 0.0 33.2
Payment of non-current interest bearing liabilities -7.2 -32.0
Change in current liabilities 5.5 -0.4 -0.3
Change in non-current non-interest bearing liabilities, net -0.4 -0.1
Dividend paid and capital distribution -92.4 -85.3
Net cash flow from financing 160.7 -84.4
Change in cash and cash equivalents 307.3 81.3
Cash and cash equivalents at beginning of period 214.0 134.2
Translation adjustments 3.0 -1.5
Change in cash and cash equivalents 307.3 81.3
Cash and cash equivalents at end of period 5.4 524.2 214.0
Adjustments to the result, total
Taxe s 51.7 42.2
Depreciation, amortisation and impairment charges 90.2 94.5
Share of result from associated companies and joint ventures -114.4 2.5
Gains and losses on sale of non-current assets -28.2 -14.0
Finance costs, net 10.0 14.9
Post-employment benefit obligations and provisions -0.7 -1.0
Other adjustments 3.2 1.5
Adjustments to the result, total 11.8 140.6
Change in working capital
Inventories -19.3 17.7
Accounts receivables and other receivables -53.9 26.1
Accounts payable and other liabilities 122.7 -5.8
Change in working capital 49.5 37.9
The notes are an integral part of these financial statements.
Consolidated cash flow statement
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Notes to the consolidated
financial statements
1. Accounting principles
■ Metsä Board Group
group (”Metsä Board” or ”the Group”). Metsä Board’s business operations
consist solely of fol din g box bo ard, f res h fib re lin er bo ard a nd m ar ket pul p
businesses. Metsä Board reports on its financial performance in one
reporting segment.
Metsä Board Corporation is Group’s parent company, which is domiciled
in Helsin ki . The registered address of the company is Revontulenpuisto 2 ,
Ltd. At the end of 2021 Metsäliitt o Cooperati ve owned 48.0 per cent of the
shares, and the voting rights conferred by these shares were 67.5 per cent.
A copy of the annual report can be obtained from Metsä Board’s website
www.metsaboard.com or parent company’s head oce at Revontulenpu-
isto 2, 02100 Espoo Finland .
The Group consolidated financial statements were authorised for issue
by the Board of Directors on 10 February 2022. According to Finnish
Companies Act shareholders can accept or reject the financial statements
in General Meeting of shareholders after date of publication. General
Meeting of shareholders also have possibility to decide to change financial
statements.
■ Accounting principles
Metsä Board Corporation’s consolidated financial statements have
been prepared in accordance with the International Financial Reporting
Standards (IFRS), applying the IAS and IFRS standards and SIC and IFRIC
interpretations that were eective and approved by the EU at the date
of the financial statements 31 December 2021. International Financial
Reporting Standards refer to the standards and their interpretations
approved for use in the EU by the Finnish Accounting Act and the regula-
tions set out pursuant to it in accordance with the procedure defined in the
EU regulation (EC) no. 1606/2002. The notes to the consolidated financial
statements also comply with the requirements of Finnish accounting and
company legislation supplementing the IFRS regulations.
The consolidated financial statements are presented in millions of euros,
unless otherwise noted.
The consolidated financial statements have been prepared based on
original acquisition costs, excluding financial assets recognised at fair
value, hedged items in fair value hedging, biological assets, assets and
obligations related to defined benefit plans and share-based payments
measured at fair value.
■ Coronavirus pandemic
The impact of the coronavirus pandemic on business has been discussed
in the Report of the Board of Directors. The impacts of the coronavirus
pandemic on determining the impairment of sales receivables as well
as cash and cash equivalents are discussed in Note 5.6, Management of
financial risks, counterparty risk.
■ Amendments to standards applied
during the 2021 financial period
The amendments to standards and interpretations that entered into force
at the beginning of 2021 have no material impacts on the consolidated
financial statements.
■ New and amended standards to be applied
during future financial periods
Amendments to IAS 16, Property, Plant and Equipment - Proceeds before
Intended Use (to be applied during the financial periods beginning on 1
January 2022 or thereafter). The amendment prohibits deducting from the
cost of an item of property, plant and equipment any proceeds from selling
items produced while bringing that asset to the location and condition
necessary for it to be capable of operating in the manner intended by
management. Instead, the proceeds from selling such items, and the cost
of producing those items, are recognised in profit or loss. The amendments
will impact the definition of the acquisition cost of the Group’s tangible
assets and the notes to be presented.
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■ Translations in foreign currency
The items included in the financial statements of Group companies are
presented in the currency that is used in each company’s primary operat-
ing environment. The consolidated financial statements are presented in
euros, which is the parent company’s functional and presentation currency.
Business transactions denominated in foreign currencies are recognised
in the operating currency using the exchange rate on the transaction date.
At the end of the financial period, open receivables and liabilities denom-
inated in foreign currencies are translated into the functional currency
using the exchange rate on the balance sheet date. Any gains or losses
resulting from transactions in foreign currencies and from the translation
of monetary items are recognised in financial income and expenses.
Information about currency hedging is provided in Note 5.6 Management
of financial risks.
The income statements of Group companies whose functional currency
is not the euro are translated into euros using the average exchange rates
of the financial period, and their balance sheets are translated using
the exchange rates on the balance sheet date. Changes in translation
dierences arising from the translation of Group companies’ income state-
ments and balance sheets and from the translation of net investments in
foreign entities are recognised in the consolidated comprehensive income
statement. In conjunction with divestments of Group companies, either by
selling or by dissolving , translation dierences accumulated by the time of
the divestment are recognised in the income statement as part of the gain
or loss from the divestment.
■ Earnings per share
Undiluted earnings per share are calculated using the weighted average
number of shares during the reporting period. In calculating earnings per
share adjusted for the eect of dilution, the average number of shares is
adjusted for the dilution eect of any equity instruments that have been
issued. In calculating earnings per share, earnings are taken to be the
reported earnings attributable to the parent company’s shareholders.
■ Other accounting principles
Other accounting principles are presented as part of the relevant Notes.
■ Key estimates and judgements
The preparation of financial statements requires the use of the manage-
ment’s estimates, assumptions and judgement-based decisions that aect
the amount of assets and liabilities, the presentation of contingent assets
and liabilities in the financial statements, and the amount of income and
expenses. Even though such estimates and assumptions are based on the
management’s best knowledge at the time they were made, it is possible
that the actual values dier from those used in the financial statements.
In terms of the financial statements, the key areas that involve the
management’s estimates and judgement-based decisions are presented in
the following notes:
Key estimates and judgements Note
Retirement benefit obligations 3.4 Retirement benefit obligations
Intangible and tangible assets
4.1 Intangible assets
4.2 Tangible assets
Leases 4.2 Tangible assets
Financial instruments measured at fair
value
4.3 Other investments
Valuation of inventories 4.4 Inventories
Valuation of accounts receivable
4.5 Accounts receivable and other
receivables
Provisions 4.8 Provisions
Income taxes 6. Income taxes
Contingent liabilities from legal disputes
and claims
8.1 Contingent liabilities, assets and
commitments
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2. Profitability
■ 2.1 Segment information
Accounting principles
The Corporate Management Team is the chief operational decision-maker monitoring business operations performance based on the operating
segments.
Metsä Board’s business operations consist solely of folding boxboard, fresh fibre linerboard and market pulp businesses. Metsä Board reports
on its financial performance in one reporting segment.
Sales, assets and capital expenditure information by geographical areas is presented in the table below. Geographical sales are reported based
on the location of the customer and assets and capital expenditure based on the location of the assets.
Personnel at year end
By country 2021 2020
Finland 1,416 1,422
Sweden 712 691
Belgium 64 58
Germany 49 51
USA 63 60
Singapore 12 12
Other countries 73 76
Total 2,389 2,370
Personnel average
By country 2021 2020
Finland 1,490 1,486
Sweden 711 714
Belgium 61 58
Germany 49 50
USA 61 57
Singapore 12 11
Other countries 76 80
Total 2,461 2,455
Information on most important customers
There were no customers with revenue exceeding 10 per cent of total
Group revenue in 2021 and 2020.
Geographical areas
External sales
by location of customer
Non-current
assets Capital expenditure
EUR million 2021 2020 2021 2020 2021 2020
Germany 161.4 14 7.4 3.4 3.7 0.1 -0.4
Italy 134.6 120.6 0.5 0.8 0.1 0.5
Sweden 100.5 84.0 551.9 432.6 164.2 122.1
United Kingdom 79.1 7. 0 0.0
Spain 79.6 69.4 0.2 0.4
France 77. 5 53.7 0.2 0.5 0.2 0.0
Poland 91.7 73.1 0.1 0.1 0.0 0.1
The Netherlands 28.7 7 7. 5
Belgium 23.0 1 7.7 1.1 1.5 0.0 0.1
Other EU 141.1 129.4
EU total 970.6 953.7 1,614.9 1,408.4 219.8 165.8
Turkey 90.3 103.8 0.0 0.0
United Kingdom 102.9 12.2 0.0
Russia 116.5 95.2 0.1 0.2 0.0 0.0
Norway 3.3 3.6
Other Europe and Middle East 41.2 35.6
USA 401.4 365.0 1.0 1.2 0.1 0.1
Canada 25.2 17. 2
Asia 173.7 148.0 0.5 0.6 0.2 0.4
Other countries 159.0 1 67.4 0.0 0.1 0.0 0.0
Total 2,084.1 1,889.5 1,628.8 1,410.4 220.2 166.4
Non-current assets include all non-current assets with the exception of derivative financial instruments and deferred tax assets. The transition period
related to the United Kingdom’s withdrawal from the EU ended on 31 December 2020.
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■ 2.2 Sales
Accounting principles
Performance obligations arising from the Group’s sales contracts
are mainly order-driven customer deliveries related to the sale of
forest industry goods. Services mostly have an ancillary role in
the Group’s business operations, or they complement deliveries
of goods.
The transaction price is the amount that the Group expects to
receive in exchange for a fulfilled performance obligation. This
amount, less sales-based value added taxes and sales taxes, is
presented as the Group’s sales. The prices received by the Group
are divided into a fixed part and a variable part. The variable part
consists of various discounts based on, among other things,
payment terms and purchased quantities, and is allocated by the
Group as deductions from sales revenue in line with estimates of
the extent of the discount the customer is deemed to be entitled
to. The Group’s sales contracts mostly include obligations solely
related to deliveries of goods, to which the allocation of the
transaction price is uncomplicated. The terms of payment applied
in the Group’s sales invoicing vary to some degree geographically
and in dierent business areas, but the term of payment provided
is nonetheless always clearly less than a year, when the financing
component does not need to be separated.
The Group recognises revenue from the sale of goods in the
period during which the control of the delivered products passes
to the customer, i.e. when the risks and benefits related to the
sold products transfer to the customer. Services are recognised
as income over time.
Control to products transfers at the point of time when the
products have been delivered in accordance with the agreed term
of delivery. The Incoterms 2010 delivery terms most commonly
applied by the Group and the corresponding times of sales
income recognition are:
D terms: Delivery of goods to the buyer at the agreed destina-
tion at the agreed time
C terms: Handing over the goods to be transported to the
agreed destination by a carrier arranged for by the
seller
F terms: Handing over the goods to a carrier arranged for by the
buyer
The Group sees geographical distribution of sales as describing
best the nature, amount, timing and uncertainty of sales revenue.
Sales by geographical regions is presented below based on the
location of customers.
Geographical distribution of sales
EUR million 2021 2020
Germany 161.4 147.4
Italy 134.6 120.6
Sweden 100.5 84.0
Turkey 90.3 103.8
Finland 132.6 101.8
United Kingdom 102.9 79.1
Russia 116.5 95.2
Spain 79.6 69.4
France 77. 5 53.7
Poland 91.7 73.1
Norway 3.3 3.6
The Netherlands 28.7 7 7. 5
Belgium 23.0 1 7.7
Rest of EMEA 266.7 254.9
EMEA 1,409.3 1,281.8
USA 401.4 365.0
Canada 25.2 17. 2
Rest of Americas 55.6 58.5
Americas 482.2 440.7
APAC 192.6 167. 0
Total 2,084.1 1,889.5
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■ 2.3 Other operating income
EUR million 2021 2020
Gains on disposal 28.7 14.2
Rental income 1.2 1.2
Service revenue 4.5 3.4
Government grants and allowances 17.6 9.9
Scrap and waste sale 0.3 0.1
Other operating income 4.8 4.5
Total 57. 0 33.3
Gains on disposal
EUR million 2021 2020
Emission rights 21.3 6.2
Sale of non-business related land area 7.0 6.0
Other 0.4 1.9
Total 28.7 14.2
The government grants and compensation relate to the compensation for
training, healthcare and research costs, insurance indemnities and energy
aid. Government grants and allowances include the EUR 16.8 million
insurance claim paid to Metsä Board’s Husum pulp mill in 2021.
■ 2.4 Operating expenses
EUR million 2021 2020
Materials and services
Raw materials and consumables
Purchases during the financial year 1,117.6 898.4
Change in inventories -10.0 25.5
External services
Logistics cost 271.1 244.1
Other external services 82.4 57.4
Total 1,461.0 1,225.4
Depreciation, amortisation and impairment
charges
Depreciation, amortisation and impairment charges
total
90.2 94.5
Employee costs
Employee costs total 216.0 196.9
Other operating expenses
Rents and other real estate expenses 17.4 12.3
Purchased services 43.1 69.7
Losses on sale of non-current assets 0.5 0.2
Other operating expenses 63.3 55.3
Total 124.4 13 7. 5
Employee costs are reported in Note 3.1 and information on depreciation,
amortisation and impairment charges in Notes 4.1 and 4.2.
Other operating expenses include e.g. energy costs, real estate costs,
marketing and advertising costs and administrative costs.
Research and development expenses excluding depreciations were EUR
6.0 (6.6) million. The reporting of research and development expenses has
been clarified and the figures for the comparison year have been adjusted
accordingly.
Auditor fees
The fees of the group’s auditor KPMG
EUR million 2021 2020
Audit 0.4 0.4
Auditors' opinions 0.0 0.0
Tax services
Other services 0.0
Total 0.4 0.4
In 2021 fees to other auditors than KPMG amounted to EUR 0.4 (0.1)
million.
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3. Remuneration
■ 3.1 Employee costs
EUR million 2021 2020
Wages and salaries 136.9 123.1
Share-based payments 3.2 1.4
Pension costs
Defined benefit plans 0.4 0.3
Defined contribution plans 17. 1 18.7
Other social security costs 58.3 53.5
Social security costs total 75.9 72.5
Employee costs total 216.0 196.9
■ 3.2 The management’s salaries, remuneration and pension expenses
Key management includes members of the Board of Directors as well as Corporate Management Team.
The management’s salaries, remuneration and pension expenses
EUR 2021 2020
Salaries and other remuneration 2,093,350.95 1,820,308.99
Share-based payments (long-term remuneration) 2,044,228.93 2,449,410.62
Pension costs
Defined benefit plans 402,966.82 476,611.79
Defined contribution plans 307,833.93 191,951.86
Total 4,848,380.63 4,938,283.26
Remuneration paid to the members of the Board of Directors of the parent company and their shareholding
Shareholding
shares
2021
Renumeration
EUR
2020
Renumeration
EUR
2021
Defined
contribution
EUR
2020
Defined
contribution
EUR
Ilkka Hämälä, chairman 213,381 109,360 109,060 16,931 14,784
Martti Asunta, Vice chairman (until 11 June 2020) 7,70 0 1,268
Jussi Linnaranta, Vice chairman (from 11 June 2020) 25,192 94,240 93,940 15,996 14,151
Hannu Anttila 143,942 76,600 77,000 13,005 11,622
Hankonen-Nybom Raija-Leena (from 23 May 2021) 4,446 77,400 11,989
Hyrsky Erja (from 25 March 2021) 5,823 71,000 12,048
Kirsi Komi 81,610 76,600 77,000 11,864 10,475
Kai Korhonen (until 25 March 2021) 8,000 86,600
Liisa Leino (until 25 March 2021) 5,600 76,300 873 10,380
Jukka Moisio (from 11 June 2020) 8,598 76,600 68,600 11,864 9,228
Juha Niemelä (until 11 June 2020) 0 7,70 0
Timo Saukkonen (from 11 June 2020) 13,198 76,600 68,600 11,864 9,228
Veli Sundbäck 71,275 76,600 76,300
Total 567,465 748,600 748,800 106,435 81,135
Metsä Board’s Annual General Meeting 2021 decided, that about one half of the remuneration will be paid in cash while the other half is paid in company’s
B shares.
The remuneration of the Management Team consists of a fixed monthly salary and remuneration based on short-term and long-term remuneration
schemes. The CEO is also covered by a defined benefit pension plan.
The monthly salary of CEO Mika Joukio is EUR 41,390. The salary includes car and phone benefits and extended insurance cover for travel and acci-
dents. In 2019 and 2020, the reward option for the CEO’s short-term compensation plan
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
was at the target level of 30 per cent and at the maximum level of 75 per
cent of the fixed annual salary.
In 2019 and 2020, the reward option for the short-term compensation plan
for members of the Management Team was at the target level of 20 or 25
per cent and at the maximum level of 50 or 62.5 per cent of the fixed annual
salary.
The Board of Directors decides on the criteria of the short-term remu-
neration system. Remuneration is based on defined financial criteria and
targets supporting strategy.
Share based incentive schemes and the shareholding programme for
Corporate Management Team are presented in Note 3.3.
The CEO’s mutual term of notice is six months. In case the CEO contract
is terminated by the Board of Directors, the CEO is entitled to receive
discharge compensation equal to his 12-month salary.
The period of notice for other members of Corporate Management
Team is six months. Corporate Management Team members are entitled
to additional mainly severance compensation of six month salary in
case of employment termination on grounds not related to the aected
Management Team member.
The CEO is covered by statutory employee pension scheme. This oers
pension benefits based on term of service and renumeration earned as
prescribed in applicable legislation. Through supplementary pension
arrangements, the CEO is entitled to retire at the age of 62 years. His
pension will be equal to 60 per cent of his salary at the time of retirement
calculated in accordance with Finnish pension legislation and based on the
calculation period of five years immediately preceding retirement. In case
the CEO’s contract is terminated prior to retirement, the pension earned by
the CEO becomes vested.
The Corporate Management Team members have no pension arrange-
ments diering from statutory pensions. The Group has no o balance
sheet pension liabilities on behalf of management.
1)
Basic salary may include car and telephone benefits, extended health, travel and accident insurance cover, and minor other benefits in kind.
2)
The 2021 payment concerns performance in 2020; the 2020 payment concerns performance in 2019.
3)
Lump sum for a project related to the sale of a 30% stake in the Husum pulp mill to Norra Skog.
4)
2021: earning period 2018–2020; 2020: earning period 2017–2019.
5)
In 2021 Delayed long-term rewards were paid in accordance with the terms and conditions and the decision of the Board of Directors totalling EUR 7,902 (658,981).
6)
In 2021 Delayed long-term rewards were paid in accordance with the terms and conditions and the decision of the Board of Directors totalling EUR 208,595 (445,620).
Salaries and remuneration paid to the CEO and other
members of the Corporate Management Team
EUR
2021
CEO
2020
CEO
2021
Other
Management
Team
2020
Other
Management
Team
Salaries and remuneration
Basic salary including fringe benefits
1)
518,981 511,158 1,176,977 1,119,875
Short-term performance bonus
2)
135,341 64,903 202,052 124,372
Lump sum
3)
30,000 30,000
Long-term share-based incentive
4)
874,336 572,876 953,396 771,934
Deferred long-term share-based incentive
5) 6)
7,902 658,981 208,595 445,620
Total 1,566,560 1,807,918 2,571,020 2,461,802
Pension Costs
Supplemental defined benefit pension plan 402,967 476,612
Contribution-based statutory arrangement 94,026 52,856 213,808 139,095
Total 496,993 529,468 213,808 139,095
Salaries and remuneration as well as pension costs in total 2,063,553 2,337,386 2,784,828 2,600,897
Key management had any loans outstanding from the company or
its subsidiares and there were no guarantees given on behalf of key
management.
■ 3.3 Share-based payments
Accounting principles
Share-based incentive programmes in which the payments are
made with equity instruments and cash have been established for
the company’s top executives. The Group’s share-based incentive
schemes have been treated in full as arrangements settled in
shares. The incentives granted are measured at fair value on the
grant date, and recognised as expenses in the income statement
and equity evenly over the vesting period.
The eect on profit of the incentive programmes is presented
under employee costs.
During the review period, Metsä Board had three active share-based
incentive schemes: Share incentive scheme 2014, which company Board
of Directors decided to adopt on 6 February 2014, Performance based
share incentive scheme 2017–2021 of which the company Board of
Directors decided to adopt on 10 January 2017 and Performance based
share incentive scheme 2020–2024 which the company Board of Directors
decided to adopt on 12 December 2019, as part of company’s incentive and
key personnel retention programme.
The eect on consolidated income statement of share-based incentive
schemes amounted to EUR 3,193,961 in 2021 (2020: EUR 1,404,744).
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Key characteristics of Share incentive scheme 2014 are summarised in the table below:
31 Dec 2021 2015–2017 Total
Key characteristics
Shares allocated to the scheme, shares 427,500 427,500
Grant date(s)
27.2.2015,
1.11.2016
Criteria
Equity ratio, ROCE,
EBIT multiplier
Personnel (31 December 2021) 1
Factors used to determine fair value (EUR)
1)
Share price at grant date 5.85
Share fair value at grant date 5.12
Annual dividend assumption in fair value measurement 0.14
Share price at payment date / balance sheet date 7.4 6
Fair value on balance sheet date 0
Eect on result and financial position (EUR)
Expense in 2021, share-based payments settled as equity 0 0
Share-based payments settled in cash, unpaid part, estimate 96,422 96,422
Number of shares 1 January 2021
2)
Outstanding at the beginning of the period 0 0
Changes during the year
Shares granted 0 0
Shares forfeited 0 0
Shares exercised 0 0
Shares expired 0 0
Number of shares 31 December 2021
Outstanding at the end of the period 0 0
Based on the fulfillment of the criteria for the earning period 2018–2020,
132,229 Metsä Board Oyj B shares and a cash contribution were paid to
cover taxes and tax-like payments arising from the reward at the time of the
transfer of the shares.
The company changed the terms of the scheme during 2016 so that
for incentive periods 2014–2016 and 2015–2017 a cap was set for total
employee compensation, including the share incentive paid, based on
each plan participant’s salary. The part of earned incentive exceeding the
cap is deferred and paid in full in cash in coming years when allowed by the
cap. Starting from vesting period 2016–2018, a salary based cap was set
with the eect of cutting the part of share incentive exceeding the cap and
resulting in the forfeiture of the excess part of the incentive. On balance
sheet date, the deferred compensation for periods 2015–2017 reflects the
value of deferred compensation and interest accrued thereon to be paid
later when the employment criterion is fulfilled.
Share incentive scheme 2014, Performance based
share incentive scheme 2017–2021 and Performance
based share incentive scheme 2020–2024
The schemes oer the participants the possibility to be awarded Metsä
Board Corporation’s B shares for achieving set goals for three-year
periods. Incentive periods are the calendar years 2014–2016, 2015–2017,
2016–2018, 2017–2019, 2018–2020, 2019–2021, 2020–2022, 2021–2023
and 2022–2024. The bonus awarded under the share incentive scheme
2014 and performance based share incentive plan 2017–2021 is
determined by achievement of the set goals and paid in March following
the incentive period. In addition to shares, the bonus includes a cash com-
ponent, which is used to cover taxes and tax-like charges incurred by plan
participants due to the bonus. The number of shares allocated under the
performance share plan 2020–2024 includes both the share and the cash
portion. Accordingly, the reward is paid partly in shares and partly in cash
and the cash portion is intended to cover taxes and tax-like payments. The
bonus is not paid if the person’s employment ends before the end of the
earning period. In addition, the scheme includes a two-year commitment
period. If the key employee’s employment ends during the commitment
period, the key person must, as a rule, return the delivered shares to the
Company free of charge.
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Key characteristics of Performance based share incentive scheme 2017–2021 are summarised in the table below:
Performance based
share incentive scheme
2017–2021
31 Dec 2021 2017–2019 2018–2020 2019–2021 Total
Key characteristics
Shares allocated to the scheme, shares 269,167 275,278 280,694 825,139
Grant date(s)
6.4.2017,
7.9.2017
9.4.2018,
25.9.2018
2.4.2019,
13.6.2019,
12.8.2019
Criteria
Equity ratio,
ROCE ja EBIT
Equity ratio,
ROCE ja EBIT
Equity ratio,
ROCE ja EBIT
Personnel (31 December 2021) 27
Factors used to determine fair value (EUR)
1)
Share price at grant date 6.37 8.64 5.82
Share fair value at grant date 5.92 7.8 4 5.20
Annual dividend assumption in fair value measurement 0.23 0.27 0.31
Share price at payment date / balance sheet date 4.86 8.62 8.62
Fair value on balance sheet date - 2,198,400 1,926,418 4,124,818
Eect on result and financial position (EUR)
Expense in 2021, share-based payments settled as equity 490,193 412,870 927,307 1,830,371
Share-based payments settled in cash, unpaid part, estimate - - 1,707,225 1,707,225
Number of shares 1 January 2021
2)
Outstanding at the beginning of the period 183,687 256,389 280,694 720,770
Changes during the year
Shares granted 0 0 6,667 6,667
Shares forfeited 0 0 6,667 6,667
Shares exercised 183,687 0 0 183,687
Shares expired 0 124,160 0 124,160
Number of shares 31 December 2021
Outstanding at the end of the period 0 132,229 280,694 412,923
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Key characteristics of Performance based share incentive scheme 2020–2024 are summarised in the table below:
Performance based
share incentive scheme
2020–2024
31 Dec 2021 2020–2022 2021–2023 Total
Key characteristics
Shares allocated to the scheme, shares 590,788 453,650 1,044,438
Grant date(s) 27.1.2021, 18.6.2021 27.1.2021, 18.6.2021
Criteria
Equity ratio,
ROCE ja EBIT
Equity ratio,
ROCE ja EBIT
Personnel (31 December 2021) 26
Factors used to determine fair value (EUR)
1)
Share price at grant date 5.46 8.93
Share fair value at grant date 4.66 8.10
Annual dividend assumption in fair value measurement 0.27 0.27
Share price at payment date / balance sheet date 8.61 8.61
Fair value on balance sheet date 2,234,013 3,357,586 5,591,600
Eect on result and financial position (EUR)
Expense in 2021, share-based payments settled as equity 742,746 620,844 1,363,590
Share-based payments settled in cash, unpaid part, estimate 2,182,800 1,881,076 4,063,876
Number of shares 1 January 2021
2)
Outstanding at the beginning of the period 590,788 0 590,788
Changes during the year
Shares granted 18,756 453,650 472,406
Shares forfeited 20,978 24,369 45,347
Shares exercised 0 0 0
Shares expired 0 0 0
Number of shares 31 December 2021
Outstanding at the end of the period 588,566 429,281 1,017,847
1)
The fair value of the share settled component at the grant date was the share price of Metsä Board Corporation’s B share less any dividends estimated by analyst consensus to be paid before the
payment of the incentive. The fair value of the share based payment is recognised to the number of shares based on the best available estimate of the total incentive to which the participants are
expected to be entitled.
2)
The amounts in the table represent net amounts, i.e. the number of shares to be given based on the share based payment schemes. In addition, the payment will include a cash settled component
used to cover taxes and tax-like charges.
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■ 3.4 Retirement benefit obligations
Accounting principles
The Group’s arrangements concerning benefits following the
termination of employment are either defined benefit pension
plans or defined contribution pension plans. A defined contribu-
tion plan is a pension arrangement in which fixed contributions
are made to a separate unit, and the Group does not have legal or
constructive obligations to make additional contributions if the
fund has insucient funds to pay all benefits to all employees in
accordance with its obligations in the future. All arrangements
that do not meet these requirements are considered to be defined
benefit plans. A defined benefit plan defines the pension benefit
that the employee will receive upon retiring , the amount of which
depends on factors including the employee’s age, years of service
and salary level, for example.
With defined benefit plans, the current value of the obligations
on the end date of the reporting period, less the fair value of the
assets included in the arrangement, is recognised on the balance
sheet as a liability. The amount of the obligation arising from the
plan is based on annual calculations by independent actuaries
using the projected unit credit method. The current value of the
obligation is determined using the interest rate equalling the
interest rate of high-quality bonds issued by the companies as
the discount rate for the estimated future cash flows. The bonds
used in determining the interest rate have been issued in the
same currency as the benefits to be paid, and their maturity is
approximately the same as that of the corresponding pension
obligation.
Actuarial gains and losses from experience verifications and
changes in actuarial assumptions are recognised through items
of other comprehensive income as a reimbursement or charge in
equity for the period during which they have been incurred. Past
service costs are recognised immediately through profit and loss.
Apart from contributions related to pension insurance, the Group
does not have any other payment obligations in defined contribu-
tion plans. Obligation-based payments are allocated as expenses
in accordance with accrual accounting.
Key estimates and judgements
The determination of the current value of pension obligations
arising from defined benefit plans and the items to be recognised
as expenses during the financial period is based on the use of
actuarial assumptions, which involves management judgement.
The actuarial assumptions used may dier significantly from
the actual results, due to changes in economic conditions or the
employment relationships of the people covered by the arrange-
ments. Significant dierences between the assumptions and
actual results may aect the amount of the pension obligation
and the value of items to be recognised as expenses.
Post-employment benefits
EUR million 2021 2020
Liabilities recognised in balance sheet
Defined benefit pension plans 13.4 13.1
Defined contribution pension plans 0.3 0.3
Total 13.7 13.4
Surplus of funded plans in assets -12.2 -7. 5
Defined benefit pension plans
The most significant defined benefit pension plans are in Germany and
United Kingdom.
Group’s German defined benefit pension plans grant old-age pensions,
disability pensions and family pensions exceeding the statutory pension
level to eligible ocials and senior management. The retirement age is usu-
ally 65 years, and the amount of pension depends on the length of service.
Ocials and senior management are required to have a service history of
25–30 years to receive a full pension. Some of the pension arrangements
are closed. The defined benefit plans in Germany are unfunded.
The defined benefits plans in United Kingdom guarantee participants of
the plan a pension, the amount of which is based on the length of service
and the salary in the most recent working years. The arrangement is closed
to new members. The assets in the arrangement have been invested in
funds that are managed in accordance with local guidelines and practice.
Funds administered by third parties pay the benefits to the eligible recipi-
ents. The Group participates actively in the activities of the pension trust’s
investment committee.
The Group also has defined benefit plans in Finland, Belgium and Italy.
Amounts in balance sheet
EUR million 2021 2020
Present value of funded obligations 53.2 59.1
Fair value of plan assets -62.8 -64.8
Deficit (+) / surplus (-) -9.6 -5.7
Present value of unfunded obligations 10.8 11.3
Deficit (+) / surplus (-) of defined benefit pension
plans, total
1.2 5.6
Defined benefit-based pension liabilities
on the balance sheet, net
13.4 13.1
Defined benefit-based pension assets
on the balance sheet, net
-12.2 -7. 5
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Change in defined benefit pension obligations in 2020
EUR million
Present
value of
obligation
Fair value of
plan assets Total
1 Jan 2020 68.9 -67.5 1.4
Current service cost 0.3 0.3
Administrative costs
Interest expense (+) or interest income (-) 1.0 -1.1 -0.1
Past service cost
Total amount recognised in profit and loss 1.4 -1.1 0.2
Remeasurements in other comprehensive
income
Return on plan assets, excluding amounts
included in interest income or expense
-0.6 -0.6
Gains (-) and losses (+) from change in demo-
graphic assumptions
0.2 0.2
Gains (-) and losses (+) from change in finan-
cial assumptions
6.9 6.9
Experience gains (-) and losses (+) -2.3 -2.3
Total remeasurements in other comprehensive
income
4.7 -0.6 4.2
Translation dierences -2.3 2.9 0.6
Contributions
Employers -0.3 -0.3
Plan participants 0.0 0.0 0.0
Payments from plans
Benefit payments -2.3 1.8 -0.6
Settlements
31 Dec 2020 70.4 -64.8 5.6
Change in defined benefit pension obligations in 2021
EUR million
Present
value of
obligation
Fair value of
plan assets Total
1 Jan 2021 70.4 -64.8 5.6
Current service cost 0.4 0.4
Administrative costs
Interest expense (+) or interest income (-) 0.6 -0.6 0.0
Past service cost -0.4 -0.4
Total amount recognised in profit and loss 0.6 -0.6 0.0
Remeasurements in other comprehensive
income
Return on plan assets, excluding amounts
included in interest income or expense
-2.4 -2.4
Gains (-) and losses (+) from change in demo-
graphic assumptions
-0.1 -0.1
Gains (-) and losses (+) from change in finan-
cial assumptions
-1.9 -1.9
Experience gains (-) and losses (+) 1.2 1.2
Total remeasurements in other comprehensive
income
-0.7 -2.4 -3.1
Translation dierences 3.1 -3.6 -0.5
Contributions
Employers -0.3 -0.3
Plan participants 0.0 0.0 0.0
Payments from plans
Benefit payments -8.7 8.1 -0.6
Settlements -0.8 0.9 0.1
31 Dec 2021 64.0 -62.8 1.2
Defined benefit pension obligation and plan assets by country in 2021
EUR million Germany United Kingdom Finland Other countries Total
Present value of obligation 9.9 39.0 11.2 3.9 64.0
Fair value of plan assets -51.2 -9.7 -1.9 -62.8
Total 9.9 -12.2 1.5 2.0 1.2
Defined benefit pension obligation and plan assets by country in 2020
EUR million Germany United Kingdom Finland Other countries Total
Present value of obligation 10.4 44.5 11.4 4.1 70.4
Fair value of plan assets -51.5 -11.3 -2.1 -64.8
Total 10.4 -6.9 0.2 1.9 5.6
Significant actuarial assumptions 2021
Germany United Kingdom Finland Belgium
Discount rate, % 0.74 1.85 0.82 0.70
Salary growth rate, % 3.00 2.80 0.00 1.00
Pension growth rate, % 1.75 3.35 2.36 2.00
Significant actuarial assumptions 2020
Germany United Kingdom Finland Belgium
Discount rate, % 0.74 1.20 0.38 0.30
Salary growth rate, % 3.00 2.30 0.00 1.00
Pension growth rate, % 1.75 3.10 1.40 1.70
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Sensitivity of benefit obligation to changes in essential
weighted assumptions 2021
Impact on benefit obligation
Change of
assumption Increase Decrease
Discount rate 0.5%-points 5.6% decrease 6.2% increase
Salary growth rate 0.5%-points 0.4% increase 0.3% decrease
Pension growth rate 0.5%-points 5.2% increase 4.8% decrease
One year in-
crease
in assumption
One year de-
crease
in assumption
Life expectancy 4.0% increase 3.9% decrease
The aforementioned sensitivity analyses are based on a situation where all
other assumptions remain unchanged when one assumption changes. The
sensitivity of a defined benefit obligation to changes in significant actuarial
assumptions has been calculated using the same method as is used in
calculating the pension obligation entered in the balance sheet.
Plan assets are comprised as follows:
2021
EUR
million
2021
%
2020
EUR
million
2020
%
Qualifying insurance policies 1.9 3% 2.1 3%
Cash and cash equivalents 0.8 2% 0.2 0%
Investment funds 50.4 80% 51.3 79%
Funds held by Insurance company 9.7 15% 11.3 17%
Total 62.8 100% 64.8 100%
The most considerable risks related to Defined benefit plans are as follows:
Volatility of assets
The Group works to reduce investment risk by diversifying the assets in the
arrangement to dierent asset types such as property, government bonds
as well as corporate bonds.
Changes in the return on bonds
Liabilities arising from the arrangements have been calculated using a dis-
count rate based on the return on high-quality corporate bonds. A decline
in the discount rate increases the arrangements’ liabilities.
Inflation risk
The plan’s benefit obligations are linked to inflation and a higher inflation
will lead to increased obligation.
Life expectancy
The majority of the arrangement obligations arises from generating
lifetime benefits for members, so the expected increase in life expectancy
will increase the arrangement obligations.
The contribution made to post-employment defined benefit plans is
expected to be EUR 0.9 million in 2022. The weighted average duration of
the defined benefit obligation is 14.4 years (15.1).
4. Capital employed
■ 4.1 Intangible assets
Accounting principles
Goodwill
Goodwill arising from the merging of business operations is
recognised as the amount by which the sum of the consideration
paid, the non-controlling interests’ share in the object of the
acquisition and the previous holding exceed the fair value of the
acquired net assets.
Goodwill is not amortised. Instead, it is tested for impairment
annually and always when there is an indication of a decrease in
value. Goodwill is therefore allocated to cash-generating units for
impairment testing. Goodwill is recognised at original acquisition
cost less accumulated impairment losses.
Other intangible assets
Intangible assets are initially recognised at their original acqui-
sition cost on the balance sheet if the acquisition cost can be
determined reliably and it is probable that the expected financial
benefit from the asset will be to the benefit of the Group.
Intangible assets with limited useful lives are recognised as
expenses over their known or estimated useful lives, using the
straight-line depreciation method.
The residual value of an asset, the useful life and depreciation
method are reviewed at least annually, at the end of each financial
period, and adjustments are made when necessary to reflect
changes in the expected financial benefit of the asset.
Research and development costs
Research costs are recognised as expenses at the time they
are incurred. Development costs are capitalised and amortised
over their useful lives if the research project is likely to generate
financial benefits and the costs can be measured reliably. Metsä
Board has not capitalised development costs.
Computer software
Costs arising from developing and building of significant new
computer software are recognised as intangible assets on the
balance sheet and depreciated on a straight-line basis over
its estimated useful life, which is not to exceed seven years.
Maintenance and operating costs related to computer software
are recorded as expenses in the reporting period during which
they have been incurred.
Configuration and customisation costs in the deployment of
cloud services are recognised as expenses if they do not result in
intangible assets. If the services received by the group are sep-
arable, the costs are recognised as expenses when the supplier
modifies the application. If the services received by the group are
not separable, the costs are recognised as expenses when the
supplier provides access to the application during the term of the
agreement.
Other
The cost of patents, licences and trademarks with finite useful
lives are capitalised on the balance sheet under intangible assets
and depreciated on a straight-line basis over their useful lives of
5–10 years.
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EUR million Goodwill
Other intangible
assets
Construction in
progress Total
Acquisition cost, 1 Jan 2021 12.4 123.4 0.6 136.4
Translation dierences -0.1 -0.1
Increases 0.5 1.0 1.5
Decreases -0.2 -0.2
Transfers between asset categories 0.6 -0.6
Acquisition cost, 31 Dec 2021 12.4 124.2 1.0 1 3 7.6
Accumulated amortisation and impairment charges, 1 Jan 2021 -1 1 7.4 -1 17.4
Translation dierences 0.1 0.1
Accumulated amortisation on decreases and transfers 0.2 0.2
Amortisation for the period -2.0 -2.0
Impairment charges for the period
Accumulated amortisation and impairment charges, 31 Dec 2021 -119.1 -119.1
Book value, 1 Jan 2021 12.4 6.1 0.6 19.1
Book value, 31 Dec 2021 12.4 5.1 1.0 18.5
EUR million Goodwill
Other intangible
assets
Construction in
progress Total
Acquisition cost, 1 Jan 2020 12.4 130.5 1.4 144.3
Translation dierences 0.3 0.3
Increases 0.7 0.0 0.7
Decreases -8.1 -8.1
Transfers between asset categories 0.0 -0.8 -0.8
Acquisition cost, 31 Dec 2020 12.4 123.4 0.6 136.4
Accumulated amortisation and impairment charges, 1 Jan 2020 -123.1 -123.1
Translation dierences -0.2 -0.2
Accumulated amortisation on decreases and transfers 8.1 8.1
Amortisation for the period -2.2 -2.2
Impairment charges for the period
Accumulated amortisation and impairment charges, 31 Dec 2020 -1 17.4 -1 1 7.4
Book value, 1 Jan 2020 12.4 7.4 1.4 21.2
Book value, 31 Dec 2020 12.4 6.1 0.6 19.1
No impairments were recorded for intangible assets during the current or previous financial year.
Other intangible assets include among other things computer software, patents and licenses. Metsä Board has not capitalised development expenditure.
Accounting principles
The Group has received emission allowances in accordance with the Euro-
pean Union Emissions Trading System. Allowances are treated as intangible
assets and are measured at acquisition cost. The acquisition cost of emis-
sion allowances received without consideration is zero. Emission allowances
are used simultaneously with the carbon dioxide emissions generated during
their validity period. Earnings from emission allowances sold are recognised
in other operating income. If the emission allowances received without
consideration are not sucient to cover the amount of the actual emissions,
the Group purchases additional allowances from the market.
The allowances purchased are recognised in intangible rights at the fair
value on the acquisition date. The provision to fulfil the obligation to
return the emission allowances is recognised at fair value on the closing
date of the reporting period if the emission allowances received without
consideration and purchased are not sucient to cover the amount of
the actual emissions.
In 2021 the Group received 501 thousand tonnes of emission
allowances free of charge (606). In addition the Group has
sold 310 thousand tonnes to the market (217). At balance
closing date the group had emission allowances of 1,011 thou-
sand tonnes (1,060). In addition, the Group has 47 thousand
tonnes of emission allowances in 2021, which were not yet on
the allowance register on 31 December 2021 due to the delay
in allocation. Emissions during the reporting period fell below
the amount of emission allowances received free of charge
and consequently emissions during the year did not have an
impact on income statement or balance sheet.
In 2021, the Group sold emission allowances for EUR 21.3
million (6.2). On the balance sheet date, the fair market value
of an emission right was EUR 79.61 per tonne (32.04) and
total value of owned rights including delayed allowances
approximately EUR 84.2 million (34.0).
Emission allowances
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Impairment testing
Depreciation is not recognised for assets with indefinite useful lives.
Instead, such assets are tested for impairment annually. Assets that
are subject to depreciation are always tested for impairment when
events or changes in conditions indicate that it is possible that the
monetary amount corresponding to the book value of the assets
might not be recoverable.
Cash-generating units are reporting segments or smaller units for
which a utility value can be defined.
The recoverable amount is the higher of the fair value of an asset less
the cost of sale, and its value in use. Value in use is the estimated
future net cash flows, discounted to their present value, expected to
be derived from said asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of the asset
is higher than its recoverable amount. If the impairment loss concerns
a cash-generating unit, it is first allocated to decrease the goodwill
of the cash-generating unit, and thereafter to decrease the other
assets of the unit on pro-rata basis. In connection with the recognition
of the impairment loss, the useful life of the depreciated asset is
re-evaluated. An impairment loss recognised for an asset other than
goodwill is reversed if a change has taken place in the estimates
used to determine the recoverable amount of the asset. However,
the maximum reversal of an impairment loss amounts to no more
than the carrying amount of the asset if no impairment loss had been
recognised. An impairment loss recognised on goodwill is not reversed
under any circumstances.
Key estimates and judgements
Future cash flows
The recoverable amounts of cash-generating units are based on
calculations of value in use. The management’s key estimates in
the calculations concern the product price developments, delivery
volumes, currency exchange rates, capacity utilisation rates, and
the development of costs related to key raw material costs and other
costs, as well as the discount rate.
Impairment testing 2021
Metsä Board carries out impairment testing once a year, during the fourth quarter, based on the situation on 30 September, or more frequently if signs of a
possible impairment are detected.
The group did not recognise impairments based impairment testing in 2021. In the testing carried out in 2021, a somewhat potential change in any
individual key assumption would not lead to the recognition of an impairment.
The group’s key impairment testing and key assumptions in the situation on 30 September 2021:
Cash-generating unit
Goodwill
EUR million
Brand
EUR million
Discount rate
after taxes on 30
September 2021
Discount rate
after taxes on 30
September 2020
Long-term
growth rate on 30
September 2021
Long-term
growth rate on 30
September 2020
Paperboard industry
Folding boxboard
1)
29.5 2.5 5.78% 5.41% 2.0% 1.5%
Liner
1)
28.1 3.0 5.78% 5.41% 2.0% 1.5%
Market pulp
1)
5.78% 5.41% 2.0% 1.5%
1)
Goodwill includes the goodwill from Metsä Board’s holding in Metsä Fibre (EUR 45.2 million). Goodwill from the holding as well as other assets with indefinite useful life (EUR 5.6 million) are shown
under ”Investments in associated companies and joint ventures” in balance sheet.
The recoverable amounts of the cash-generating units being tested are based on five-year forecasts and the resulting, steadily growing cash flows. The
initial value used for the key assumptions of the cash flows – prices and variable costs – after the forecast period is the average of the five-year forecast
period. The value used for delivery volumes and fixed costs is the value of the forecast period’s fifth year. The key testing assumptions are management
estimates and forecasts obtained from external sources of information.
The discount rate used is the weighted average cost of capital (WACC). When calculating the WACC, the cost of debt takes into account the market-ba-
sed view of the credit risk premium.
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DEVELOPMENT
Accounting principles
Property, plant and equipment are measured at acquisition cost less
accumulated depreciation and impairment losses.
The acquisition cost includes costs that are directly incurred in the
acquisition of an item of property, plant or equipment. Qualifying
external borrowing costs resulting directly from the acquisition, con-
struction or manufacture of an item of property, plant or equipment
are capitalised as part of the acquisition cost of property, plant and
equipment.
If a piece of property, plant or equipment consists of several
components with diering useful lives, each component is handled
as a separate item. In that case, the expenses related to replacing the
component are capitalised, and any book value remaining at the time
of replacement is derecognised on the balance sheet.
Spare parts, spare equipment and maintenance supplies are recog-
nised in property, plant and equipment when they fulfill the criteria
for recognition of property, plant and equipment. Otherwise, such
commodities are classified as inventories.
Significant investments in refurbishments and improvements are
capitalised on the balance sheet and depreciated over the remaining
useful life of the main asset related to such investments.
Repair and maintenance costs are recognised as expenses when they
are incurred.
Property, plant and equipment is depreciated on a straight-line basis
over the estimated useful lives. Depreciation is not recognised for
owned land and water.
Estimated useful lives
Buildings and constructions 20–40 years
Machinery and equipment
Heavy power plant machinery 20–40 years
Other heavy machinery 15–20 years
Lightweight machinery and equipment 5–15 years
Other tangible assets 5–20 years
The residual value of an asset, the financial useful life and depreciation
method are reviewed at least annually, at the end of each financial
period, and adjustments are made when necessary to reflect changes
in the expected financial benefit of the asset.
Gains and losses arising from the sale and decommissioning of items
of property, plant and equipment are recognised in other operating
income and expenses. Sales gains or losses are calculated as the
dierence between the sales price and the remaining acquisition cost.
Government grants related to the acquisition of assets are presented
as adjustments of the acquisition cost on the balance sheet and
recognised as income in the form of lower depreciation during the
useful life of the asset.
Leases
The Group has leased various land areas, properties, equipment and
vehicles. When the leased asset is available for the Group’s use, A fixed
asset item and a corresponding liability of the lease is recognised. Paid
rents are divided into liabilities and finance costs. The finance cost
is included in profit or loss over the lease term in such a way that the
interest rate of the remaining debt balance is the same during each
period. The leased fixed asset is subject to straight-line depreciations
over the asset’s economic life or the lease term, depending on which
of them is shorter.
Assets and liabilities arising from leases are initially measured at the
present value. Lease liabilities include fixed payments, less any lease
incentives receivable; amounts expected to be payable by the lessee
under residual value guarantees; the exercise price of a purchase
option if the lessee is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising an option to terminate the lease. The
lease payments are discounted using the interest rate implicit in the
lease, if that rate can be readily determined, or the Group’s incre-
mental borrowing rate. The leased fixed assets are measured at cost,
which includes the amount of the initial measurement of the lease lia-
bility; any lease payments made at or before the commencement date,
less any lease incentives received; any initial direct costs incurred; and
any costs incurred by restoring the site on which it is located.
Some of the leases include options to extend or terminate, which are
largely available only for the Group, not the lessor.
Payments related to short-term leases or leases where the value of
the underlying asset is low are recognised as costs on a straight-line
basis. A lease with a lease term of 12 months or less is considered a
short-term lease. Assets of a low value include mainly ICT and oce
equipment.
Key estimates and judgments
Estimates concerning the residual value and useful life of property,
plant and equipment, as well as the selection of the depreciation
method, require significant management judgement.
Leases
When determining the lease term, the management accounts for all
relevant facts and circumstances that create an economic incentive
to exercise the option to extend the lease, or not to exercise the option
to terminate the lease. Options to extend the lease (or the time sub-
sequent to an option to terminate) are accounted for in the lease term
only if the extension of the lease (or the decision not to terminate the
lease) is reasonably certain. The possible future cash flows of EUR 2.0
million have not been included in the lease liability because the exten-
sion of the lease (or the decision not to terminate it) is not reasonably
certain. The Group will conduct a reassessment upon the occurrence
of either a significant event or a significant change in circumstances
that is within the control of the lessee and aects the assessment.
■ 4.2 Tangible assets
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Land and water areas Buildings and constructions Machinery and equipment
EUR million Owned Leased Owned Leased Owned Leased
Acquisition cost, 1 Jan. 2021 17.0 2.3 410.7 10.8 2,557.8 21.9
Translation dierences 0.0 -2.6 0.2 -27.2 -0.2
Additions 0.0 0.3 1.6 1.4 40.5 2.5
Decrease -1.8 -0.6 -11.5 -2.1 - 27.7 -8.5
Transfers between items 0.5 3.0 19.7
Acquisition cost, 31 Dec. 2021 15.7 2.0 401.2 10.2 2,563.2 15.7
Accumulated depreciation and impairment charges 1 Jan.
2021
-0.5 -0.2 -282.1 -4.8 -2,066.3 -9.7
Translation dierences 0.0 2.0 -0.1 22.0 0.1
Accumulated depreciation on deductions and transfers 0.1 0.6 1.5 7.7 8.5
Assets held for sale -0.1 7. 3 15.1
Depreciation for the period -0.3 -7. 9 -2.0 - 67.4 -5.0
Impairments
Accumulated depreciation and impairment charges 31 Dec.
2021
-0.5 -0.5 -280.0 -5.4 -2,093.5 -6.2
Book value, 1 Jan. 2021 16.5 2.1 128.7 6.0 491.4 12.2
Book value, 31 Dec. 2021 15.2 1.4 121.3 4.8 469.7 9.5
Other tangible
assets
Construction in
progress Total Total
EUR million Owned Owned Owned Leased Total
Acquisition cost, 1 Jan. 2021 24.8 158.4 3,168.7 35.0 3,203.7
Translation dierences -0.2 -4.5 -34.5 0.0 -34.5
Additions 0.4 172.2 214.6 4.1 218.7
Decrease -0.4 1.6 -39.7 -11.2 -50.9
Transfers between items -1.6 -21.7
Acquisition cost, 31 Dec. 2021 23.0 306.1 3,309.2 27.8 3,337.0
Accumulated depreciation and impairment charges 1 Jan. 2021 -15.4 -2,364.3 -14.7 -2,379.0
Translation dierences 0.2 24.2 0.0 24.2
Accumulated depreciation on deduction and transfers 8.4 10.1 18.4
Assets held for sale 0.3 22.7 -0.1 22.6
Depreciation for the period -0.9 -76.2 -7.4 -83.6
Impairments -4.6 -4.6
Accumulated depreciation and impairment charges 31 Dec. 2021 -15.9 -2,389.8 -12.2 -2,401.9
Book value, 1 Jan. 2021 9.4 158.4 804.4 20.2 824.7
Book value, 31 Dec. 2021 7. 2 306.1 919.4 15.6 935.0
Assets held for sale include Oy Hangö Stevedoring Ab’s assets. For more information on assets held for sale, see Note 7.2.
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Land and water areas Buildings and constructions Machinery and equipment
EUR million Owned Leased Owned Leased Owned Leased
Acquisition cost, 1 Jan. 2020 14.6 2.5 391.8 10.9 2,416.9 16.2
Translation dierences 0.0 4.8 -0.2 50.9 0.5
Additions 4.9 0.3 4.9 0.0 28.0 6.6
Decrease -2.6 -0.6 2.9 0.1 43.8 -1.1
Transfers between items 6.4 18.2 -0.3
Acquisition cost, 31 Dec. 2020 17.0 2.3 410.7 10.8 2,557.8 21.9
Accumulated depreciation and impairment charges 1 Jan.
2020
-0.5 -0.3 -267.3 -2.3 -1,906.2 -5.1
Translation dierences 0.0 -3.8 0.1 -40.8 -0.2
Accumulated depreciation on deductions and transfers 0.4 -2.9 -0.1 -44.3 0.9
Depreciation for the period -0.3 -8.1 -2.4 -75.1 -5.3
Impairments
Accumulated depreciation and impairment charges 31 Dec.
2020
-0.5 -0.2 -282.1 -4.8 -2,066.3 -9.7
Book value, 1 Jan. 2020 14.2 2.2 124.5 8.5 510.7 11.1
Book value, 31 Dec. 2020 16.5 2.1 128.7 6.0 491.4 12.2
Other tangible
assets
Construction in
progress Total Total
EUR million Owned Owned Owned Leased Total
Acquisition cost, 1 Jan. 2020 24.6 60.9 2,908.9 29.6 2,938.5
Translation dierences 0.4 5.8 61.9 0.3 62.2
Additions 0.4 120.5 158.6 7.0 165.6
Decrease -1.2 -4.6 38.2 -1.6 36.6
Transfers between items 0.6 -24.1 1.1 -0.3 0.8
Acquisition cost, 31 Dec. 2020 24.8 158.4 3,168.7 35.0 3,203.7
Accumulated depreciation and impairment charges 1 Jan. 2020 -14.8 -2,188.8 -7.7 -2,196.5
Translation dierences -0.3 -44.9 -0.2 -45.1
Accumulated depreciation on deduction and transfers 0.9 -46.2 1.2 -45.1
Depreciation for the period -1.2 -84.4 -8.0 -92.4
Impairments
Accumulated depreciation and impairment charges 31 Dec. 2020 -15.4 -2,364.3 -14.7 -2,379.0
Book value, 1 Jan. 2020 9.8 60.9 720.1 21.8 742.0
Book value, 31 Dec. 2020 9.4 158.4 804.4 20.2 824.7
Leases
EUR million 2021 2020
Costs related to short-term leases 1.1 0.3
Costs of leases in which the underlying asset is of low
value
3.9 1.3
Interest expenses 0.5 0.6
Cash outflow for leases 7.6 8.4
Disclosures on lease liabilities are presented in Note 5.5 (Financial
liabilities) and 5.6 (Management of financial risks) and disclosures on lease
obligations in Note 8.1 (Commitments and contingencies).
Impairments
Metsä Board invests its folding boxboard capacity at Husum in Sweden.
When the investment is completed, some of the board mill’s machinery and
equipment will be taken out of service. In 2021 there were an impairment
loss of EUR 4.6 million recognised in the assets that will be taken out of
service.
Borrowing costs
Borrowing costs capitalised in 2021 totalled to EUR 4.0 million (0.2). The
average interest rate used in capitalisation was 2.1% (1.0%).
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Accounting principles
Other investments consist of listed and unlisted equity
investments. The most significant of these is the Group’s holding
in Pohjolan Voima. This investment is unlisted and strategic in
nature, serving the Group’s long-term energy sourcing needs.
This being the case, the Group classifies its shares in Pohjolan
Voima as financial assets at fair value recognised under other
items of comprehensive income. Changes in their fair value are
presented in the fair value reserve, accounting for the tax eect.
Changes in fair value are never transferred from equity to profit
and loss.
The Group classifies its other equity financial assets as financial
assets at fair value to be recognised as financial assets through
profit and loss.
The fair values of publicly listed shares are based on the share
price on the balance sheet date. The fair values of shares other
than listed shares are determined using various valuation models,
such as the price levels of recent transactions and valuation
methods based on the present value of discounted cash flows.
As far as possible, the valuation methods are founded on
market-based valuation factors.
Key estimates and judgements
Fair value measurement
The application of valuation models to measuring fair value
requires judgement concerning the selection of the method to
be applied, as well as valuation factors required by the chosen
method that are based on the price and interest levels prevailing
in the market on the end date of each reporting period. The most
significant item of other investments that has been valued by
using a valuation model is the Group’s investment in the shares
of Pohjolan Voima Oyj. The price of these shares is determined
based on the present value of discounted cash flows. Key factors
aecting cash flows include the price of electricity, inflation
expectations and the discount rate. The 12-month moving
average of electricity futures prices has been used as the energy
price for the first six years. Subsequent prices are based on a
long-term market price forecast. In 2020 Group discontinued the
use of previous bench-mark transactions in Pohjolan Voima Oyj’s
shares as a valuation basis and increased the discount rates used
in the valuation model based on projected cash flows to reflect
prevailing circumstances.
The carrying amount of the Group’s shares in Pohjolan Voima
was EUR 177.6 million on the balance sheet on 31 December 2021.
The carrying value of other investments is estimated to change
by EUR -8.7 million and EUR 9.5 million should the rate used for
dis-counting the cash flows change by 0.5 percentage points
from the rate estimated by the management. The carrying value
of other investments is estimated to change by EUR 67.1 million
should the energy prices used in calculating the fair value dier by
10% from the prices estimated by the management.
EUR million 2021 2020
Pohjolan Voima Oyj 17 7.6 183.4
Other unlisted shareholdings 3.4 3.5
Other investments total 181.0 186.9
The most important unlisted shareholding under other investments
consists of a 3.2 per cent stake in Finnish energy company Pohjolan Voima
Oyj, which produces electricity and heat for its shareholders in Finland.
Pohjolan Voima trades with its shareholders at prices based on production
costs, which generally are lower than market prices. The Group is entitled
to about:
• 5.2 per cent of the energy produced by Olkiluoto nuclear power plants
(OL1 and OL2) through its ownership of Pohjolan Voima B-shares,
• 1.5 per cent of the energy produced by Olkiluoto 3 nuclear power plant
under deployment phase through its ownership of Pohjolan Voima
B2-shares, and
• 84 per cent of the energy produced by Hämeenkyrön Voima Oy through
Pohjolan Voiman G10-shares.
In November 2020, Metsä Board participated in the shareholder loan of
Pohjolan Voima Oyj with EUR 2.2 million, corresponding to its holding, to
fund the comple-tion of the Olkiluoto 3 project. The loan retains the cur-
rent level of Metsä Board’s portion of OL3 power. The unsecured loan does
not have a maturity date, its re-payment and interest payments depend on
a decision of the debtor company’s Board of Directors, and the loan capital
can be converted into 40,011 new B2 series shares in Pohjolan Voima Oyj.
The loan capital is re-payable in the event of bankruptcy only with a priority
poorer than that of all other creditors.
The ownership is measured quarterly at fair value on share series basis
by using the average of discounted cash flow method and valuation based
on earlier transactions. The weighted average cost of capital used was 3.14
(2020: 2.87) per cent and 3.14 per cent (3.87) for the Olkiluoto 3 currently
under deployment phase.
The acquisition cost of shares in Pohjolan Voima Oyj is EUR 40.2 million
(40.2) and the fair value EUR 177.6 million (183.4), which can be allocated
to dierent shares as follows: The fair value of nuclear power shares totals
EUR 165.6 million (171.3) and G10 shares have a fair value of EUR 12.0
million (12.0).
Shareholder agreement restricts sale of shares of Pohjolan Voima to
buyers that are not existing shareholders.
■ 4.3 Other investments
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DEVELOPMENT
Accounting principles
Inventories are measured at the lower of acquisition cost or net
realisable value. In measuring inventories, the FIFO principle is
observed or, alternatively, the weighted average price method,
depending on the nature of the inventories. The acquisition cost
of finished products acquired comprises all purchase costs,
including direct transport, handling and other expenses. The
acquisition cost of finished and semi-finished products of own
manufacture includes raw materials, direct production costs, and
the systematically allocated portion of variable manufacturing
overheads and fixed overheads at the normal level of operation.
Borrowing cost is not included in the acquisition cost.
Net realisable value is the estimated sales price in ordinary
business operations less the estimated cost of completion and
the necessary sales costs.
Key estimates and judgements
The Group regularly reviews its inventories for situations where
the inventories contain non-marketable items or items with net
realisable value below the acquisition cost. When necessary, the
Group reduces the book value of the inventories accordingly. This
review requires the management’s estimates of the sales prices
of products, the cost of completion and the costs necessary to
make the sale. Any changes in these estimates might lead to an
adjustment in the book value of the inventories in future periods.
Accounting principles
Trade receivables are measured at the expected net realisable
value, which is the original invoicing value less estimated impair-
ment provisions on the receivables. The Group applies a model
based on expected credit losses to the determination of the
impairment of trade receivables. Provisions are furthermore set
up on a case-by-case basis when there is a justifiable reason to
assume that the Group will not receive payment for the invoiced
amount according to the original terms.
Key estimates and judgements
The evaluation of the recognition criteria and the amount of
impairment losses requires the management’s judgement. If
customers’ financial position weakens so that it aects their
solvency, further impairment losses may need to be recognised in
future periods. The impacts of the corona pandemic on determin-
ing the impairment of sales receivables is discussed in Note 5.6,
Management of financial risks, counterparty risk.
EUR million 2021 2020
Raw materials and consumables 162.3 147. 5
Finished goods 211.7 201.1
Advance payments 8.6 11.4
Inventories total 382.6 360.0
The value of Metsä Board inventories was not reduced through write-
downs in 2021 or in 2020.
Accounts receivable and other non-interest bearing
receivables
EUR million 2021 2020
From Group companies
Accounts receivable 26.6 17.0
Other receivables
Prepayments and accrued income 0.0 0.0
Total 26.7 17. 0
From associated companies and joint ventures
Accounts receivable 0.3 0.2
From others
Accounts receivable 245.8 208.4
Impairment -2.5 -3.0
Total 243.3 205.4
Other receivables 46.5 26.5
Prepayments and accrued income 14.7 2 7.7
From others total 304.5 259.6
Accounts receivable and other receivables total 331.5 276.7
Receivables from Group companies are receivables from parent company
Metsäliitto Cooperative and from other subsidiaries of the parent company.
Derivative receivables are from Metsä Group Treasury Oy, a wholly owned
subsidiary of Metsäliitto Cooperative.
■ 4.4 Inventories ■ 4.5 Accounts receivable and other receivables
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Doubtful accounts receivable
Case-specific impairments and impairments determined by applying the
model based on expected credit losses deducted from accounts receivable
are as follows:
EUR million 2021 2020
Value 1 Jan 3.0 2.1
Increase 0.0 4.6
Decrease -0.5 -3.7
Value 31 Dec 2.5 3.0
Credit losses recognised during 2021 were EUR 0.0 million (0.3) .
Age distribution of accounts receivable less
impairments
EUR million 2021 2020
Not overdue 236.3 195.6
Overdue
Less than 30 days 8.0 10.1
Between 31 and 60 days -0.2 0.4
Between 61 and 90 days 0.0 0.0
Between 91 and 180 days -0.4 -0.4
Over 180 days -0.3 -0.2
Total 243.3 205.4
■ 4.6 Other liabilities
EUR million 2021 2020
Non-current liabilities to Group companies
Non-current liabilities
Advance payments received 1.1 1.5
Accruals and deferred income 0.5 0.4
Total 1.5 1.9
■ 4.7 Accounts payable and other liabilities
EUR million 2021 2020
Advance payments received 4.0 4.5
Accounts payable, Supply Chain Finance schemes 76.3 55.3
Other accounts payable 222.2 172.0
Other liabilities 12.9 12.8
Accruals and deferred income
Customer discounts 26.3 20.6
Purchase-related items 50.2 23.4
Employee costs 32.7 29.9
Other accrued expenses 43.0 21.8
Total 467.5 340.4
With financing banks, Metsä Group has established Supply Chain Finance
(SCF) schemes aimed at a few key suppliers. In the schemes, the suppliers
are oered the option of selling their Metsä Group receivables to a bank
providing the SCF scheme. The SCF schemes partly replace the earlier
advance payment arrangements, and their aim is not to cause a significant
deviation from Metsä Group’s normal payment terms.
105
SUSTAINABILITY
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DEVELOPMENT
■ 4.8 Provisions
Accounting principles
A provision is recognised when, as a result of an earlier event, the
Group has a legal or actual obligation, the realisation of a payment
obligation is likely, and the amount of the obligation can be reliably
estimated. Any reimbursement from a third party is presented as
an asset separate from the provision if it is practically certain that
reimbursement will be received.
Restructuring
A restructuring provision is recorded when the Group has incurred
a legal or constructive obligation to make a payment. Termination
payments are recorded when a detailed plan has been made for
the restructuring and the Group has raised valid expectations in
those aected that it will carry out the restructuring by starting to
implement that plan or announcing its main features to those aected
by it. If the Group makes an oer to employees concerning voluntary
resignation against benefits determined in the oer, the liability arising
from this is recorded when the Group can no longer withdraw its
oer. The liability arising from such an oer is based on the number of
employees that the Group expects to accept the oer. Benefits falling
due in twelve months’ time or later are measured at their present
value.
Environmental obligations
Costs arising from environmental remediation that do not increase
present or future revenue are recorded as expenses. Environmental
liabilities are measured at current value in accordance with current
environmental protection regulations when it is probable that an
obligation has arisen and its amount can be estimated reasonably.
Other provisions
Other provisions mainly consist of provisions arising from estimated
cost of future restoration of leased sites.
Key estimates and judgements
The determination of the amount of provisions and the conditions for
their recognition involves management’s judgment.
Provisions
EUR million Restructuring Environmental Other Total
1 Jan 2021 0.2 3.4 1.0 4.7
Translation dierences 0.0 0.0
Increases 0.0 0.0
Utilised during the year -0.7 -0.7
Unused amounts reversed 0,0 0,0
Transfers to assets held for sale -1.0 -1.0
31 Dec 2021 0.2 2.7 0.0 3.0
Non-current 2.0 0.0 2.0
Current 0.2 0.8 0.0 1.0
Total 0.2 2.7 0.0 3.0
1 Jan 2020 1.2 3.5 1.2 5.8
Translation dierences 0.0 0.0 0.1
Increases 0.0 0.0
Utilised during the year -1.0 -0.2 -1.2
Unused amounts reversed -0.1 -0.1
31 Dec 2020 0.2 3.4 1.0 4.7
Non-current 2.7 1.0 3.7
Current 0.2 0.8 0.0 1.0
Total 0.2 3.4 1.0 4.7
Half of non-current provisions are estimated to be utilised by the end of 2025 and the rest in 2030s. The decrease in restructuring provision in 2020 relates
to usage of Husum plant eciency improvement programme 2018 provision. Decrease in environmental obligations in 2020 is mainly due to updated
estimate of fair value of environmental provision.
Assets held for sale include Oy Hangö Stevedoring Ab’s assets. For more information on assets held for sale, see Note 7.2.
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5. Capital structure and
financial risks
■ 5.1 Shareholders’ equity
Changes in share capital
Share capital
EUR million Series A Series B Total
1 Jan 2020 51.9 506.0 557.9
Conversion of A shares into B shares -0.3 0.3
31 Dec 2020 51.6 506.3 557.9
Conversion of A shares into B shares -0.1 0.1
31 Dec 2021 51.5 506.4 557.9
Each series A share confers to its holder twenty (20) votes at the General
Meeting of Shareholders, and each series B share confers to the holder
one (1) vote. All shares carry the same right to receive a dividend. Metsä
Board’s A shares can be converted to B shares if shareholder or repre-
sentative of the nominee registered shares makes a written request for
the conversion to the company. No monetary consideration is paid for the
conversion.
Number of shares
Share capital
shares Series A Series B Total
1 Jan 2020 33,087,647 322,425,099 355,512,746
Conversion of A shares into B shares -200,496 200,496
31 Dec 2020 32,887,151 322,625,595 355,512,746
Conversion of A shares into B shares -84,976 84,976
31 Dec 2021 32,802,175 322,710,571 355,512,746
The share has no nominal value. All shares have been paid in full.
Translation dierences
Translation dierences include translation dierences arising from
translation of subsidiaries in other currencies than euro and gains and
losses arising on hedging of net investments in these subsidiaries less
deferred tax, when requirements of hedge accounting have been fulfilled.
Net investments were not hedged in Metsä Board Group in 2021 or in 2020.
Cumulative translation
Translation dierences in
other comprehensive income
EUR million 2021 2020 2021 2020
SEK - 2 7.6 -1 7. 6 -10.0 14.1
RUB * 7.0 -7.7 0.7 -2.3
USD -6.5 0.4 6.1 -5.9
CNY -0.9
GBP 0.1 -0.7 0.5 -0.4
Others -0.2 0.7 0.4 -0.3
Total -27.2 -24.9 -2.3 4.2
* RUB denominated translation dierence arises mostly from associate company Metsä Fibre.
Fair value and other reserves
EUR million 2021 2020
Fair value reserve 116.6 135.0
Legal reserve and reserves stipulated by the Articles
of Association
1.7 1.7
Total 118.3 136.6
Fair value reserve
Fair value changes in derivatives designated as cash flow hedges are
recorded to fair value reserve deducted by deferred tax eect. Additionally,
the fair value change of Pohjolan Voima Oyj shares recognised by the
Group as other investments is moved to the reserve with deferred tax
eect deducted.
Legal reserve and reserves stipulated by the Articles of
Association
Legal reserve and reserves stipulated by the Articles of Association have
been created and accumulated on resolutions by the General Meeting of
Shareholders.
Reserve for invested unrestricted equity
EUR million 2021 2020
Reserve for invested unrestricted equity 208.9 265.8
According to Finnish Limited Liability Companies Act, the reserve for
invested unrestricted equity shall be credited with the part of the subscrip-
tion price of the shares that according to the share issue decision is not to
be credited to the share capital and that according to the Accounting Act
is not to be credited to liabilities, as well as with other equity additions that
are not to be credited to some other reserve.
Dividend
Dividends payable by the company are recorded as deductions to equity
in the period during which the shareholders in a general meeting have
declared the dividend.
The Board of Directors has proposed that a dividend of EUR 0.41 per
share be distributed for the 2021 financial year.
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DEVELOPMENT
Other comprehensive income after taxes 2021
Equity attributable to members of parent company
Milj. euroa
Translation
dierences
Fair value and
other reserves
Retained
earnings Total
Non-control-
ling interest Total equity
Items that will not be reclassified to profit or loss
Actuarial gains/losses on defined benefit pension plans 3.0 3.0 3.0
Financial assets at fair value through other comprehensive income -5.8 -5.8 -5.8
Share of profit from other comprehensive income of associated company -0.1 0.0 -0.1 -0.1
Income tax relating to items that will not be reclassified 1.2 -2.0 -0.8 -0.8
Total -4.7 1.0 -3.7 -3.7
Items that may be reclassified to profit or loss
Cash flow hedges
Currency hedges
Gains and losses recorded in equity -40.8 -40.8 1.5 -39.4
Transferred to adjust Sales 0.3 0.3 -0.9 -0.6
Interest hedges
Gains and losses recorded in equity 1.2 1.2 1.2
Transferred to adjust net financial items
Commodity hedges
Gains and losses recorded in equity 61.4 61.4 61.4
Transferred to adjust purchases -33.7 -33.7 -33.7
Share of profit from other comprehensive income of associated company -4.3 -4.3 -4.3
Cahs flow hedges total -15.9 -15.9 0.6 -15.3
Translation dierences -2.9 -2.9 -1.9 -4.8
Share of profit from other comprehensive income of associated company 0.6 0.6 0.6
Translation dierences total -2.3 -2.3 -1.9 -4.2
Income tax relating to items that may be reclassified 2.3 2.3 -0.1 2.2
Total -2.3 -13.6 -15.9 -1.5 -17.4
Other comprehensive income, net of tax -2.3 -18.3 1.0 -19.6 -1.5 -21.1
Other comprehensive income after taxes 2020
EUR million
Translation
dierences
Fair value and
other reserves Retained earnings Total equity
Items that will not be reclassified to profit or loss
Actuarial gains/losses on defined benefit pension plans -3.7 -3.7
Financial assets at fair value through other comprehensive income -70.3 -70.3
Share of profit from other comprehensive income of associated company 0.4 0.4
Income tax relating to items that will not be reclassified 14.1 0.9 15.0
Total -55.8 -2.8 -58.6
Items that may be reclassified to profit or loss
Cash flow hedges
Currency hedges
Gains and losses recorded in equity 39.3 39.3
Transferred to adjust Sales -19.7 -19.7
Interest hedges
Gains and losses recorded in equity -0.7 -0.7
Transferred to adjust net financial items 0.0 0.0
Commodity hedges
Gains and losses recorded in equity -12.8 -12.8
Transferred to adjust purchases 11.5 11.5
Share of profit from other comprehensive income of associated company 2.7 2.7
Cahs flow hedges total 20.3 20.3
Translation dierences 6.2 6.2
Share of profit from other comprehensive income of associated compa-
ny
-2.0 -2.0
Translation dierences total 4.2 4.2
Income tax relating to items that may be reclassified -3.4 -3.4
Total 4.2 16.9 21.1
Other comprehensive income, net of tax 4.2 -38.9 -2.8 -3 7. 5
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Accounting principles
Interest income and expenses are recognised using the eective
interest rate method.
Dividend income is recognised when the right to receive a
payment is established.
Borrowing costs are generally recognised as an expense in the
period in which they are incurred. When an item of property, plant
or equipment is involved in a major and long-term investment
project, the borrowing costs directly due to the acquisition,
construction or production of the asset are included in the asset’s
acquisition cost.
The Group presents net interest income and expenses related to
defined benefit plans as financial income and expenses.
■ 5.2 Financial income and expenses ■ 5.3 Other financial assets
EUR million 2021 2020
Exchange dierences
Commercial items 4.9 -7. 0
Hedging, hedge accounting not applied -7. 2 3.7
Other items 0.0 0.0
Exchange dierences total -2.3 -3.4
Other financial income
Interest income on loans, other receivables and cash and
cash equivalents
0.2 0.3
Dividend income 0.0 0.0
Other financial income total 0.2 0.4
Valuation of financial assets and liabilities
Impairment gains and losses from financial assets 0.0 0.0
Gains and losses on derivatives, hedge accounting not
applied
Valuation total 0.0 0.0
Interest expenses on financial liabilities carried at
amortised cost using the eective interest method
-6.9 -11.1
Other financial expenses -0.9 -0.8
Interest and other financial expenses, total -7. 9 -11.9
Valuation of financial assets and liabilities and interest
and other financial expenses, total
-7. 9 -11.9
Interest expenses on financial liabilities have decreased in 2021 due to the
capitalisation of interest expenses on ongoing investments as part of the
acquisition cost of investments.
EUR million 2021 2020
Other non-current financial assets
Loan receivables 2.7 2.9
Defined benefit pension plans (Note 3.5) 12.2 7.5
Other receivables and accrued income 0.3 0.3
Total 15.3 10.8
109
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Accounting principles
Cash and cash equivalents consist of cash and other short-term,
highly liquid investments that can be easily converted into an
amount of cash known in advance and that carry a minimal risk
of value changes. Metsä Board has classified as cash and cash
equivalents the short-term money market investments made
in accordance with its treasury policy and interest-bearing
receivables comparable to cash funds and available immediately
from Metsä Group’s internal bank Metsä Group Treasury Oy. The
expected credit losses are reviewed for the following 12 months.
The impacts of the corona pandemic on determining the impair-
ment of sales receivables is discussed in Note 5.6, Management
of financial risks, counterparty risk.
Accounting principles
Financial liabilities are categorised initially recognised at fair value. The Group has classified all financial liabilities under “Other liabilities”.
Transaction costs are included in the original book value of financial liabilities measured at amortised cost. Subsequently, all financial liabilities
are measured at amortised cost using the eective interest method.
■ 5.4 Cash and cash equivalents
■ 5.5 Borrowings ja net debt
EUR million 2021 2020
Financial assets carried at amortized cost 1.3 1.0
Cash at hand and in bank 26.4 8.2
Deposits to Metsä Group Treasury Oy 496.4 204.7
Total 524.2 214.0
Interest-bearing Liabilities
EUR million 2021 2020
Non-current interest-bearing financial liabilities
Bonds 248.8 248.6
Loans from financial institutions 178.4 182.1
Lease liabilities 9.8 14.1
Other liabilities
Total 4 37. 0 444.8
Current interest-bearing financial liabilities
Current portion of non-current debt 10.0 6.2
Current liabilities to group companies 1.3
Total 10.0 7.6
Liabilities classified as held for sale, interest-bearing
liabilities
1.5
Interest-bearing financial liabilities total 448.6 452.4
Interest-bearing assets
EUR million 2021 2020
Non-current interest-bearing financial assets
Loan receivables 2.7 2.9
Current interest-bearing financial assets
Current investments at amortised cost 1.3 1.0
Cash at hand and in bank 26.4 8.2
Deposits to Metsä Group Treasury Oy
496.4 204.7
Total 524.2 214.0
Interest-bearing financial assets total
5 2 7.0 216.9
Interest-bearing net debt -78.4 235.5
Metsä Board has classified interest-bearing receivables comparable to
cash funds and available immediately from Metsä Group’s internal bank
Metsä Group Treasury Oy as Cash and cash equivalents.
Current liabilities to group companies include EUR 0.9 million of Oy Hangö
Stevedorig Ab’s intra-group interest-bearing debt transferred to assets
held for sale.
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Cash and non-cash changes in financial liabilities 2020 Non-cash changes
EUR million 1 Jan 2020 Cash flows
Changes in
foreign
exchange rates
New finance
leases Other changes 31 Dec 2020
Non-current interest-bearing liabilities incl. Current portion
Bonds 248.5 0.0 0.1 248.6
Loans from financial institutions 148.8 33.2 0.0 182.1
Pension loans 24.1 -24.1
Finance lease liabilities 21.8 -7.8 0.1 6.3 0.0 20.4
Total 443.3 1.3 0.1 6.3 0.1 451.1
Non-current non-interest bearing liabilities 1.8 -0.1 0.1 0.0 1.9
Current interest-bearing liabilities 1.6 -0.3 0.0 1.3
Total 446.7 1.0 0.2 6.3 0.1 454.3
Cash and non-cash changes in financial liabilities 2021 Non-cash changes
EUR million 1 Jan 2021 Cash flows
Changes in
foreign
exchange rates
New finance
leases Other changes 31 Dec 2021
Non-current interest-bearing liabilities incl. Current portion
Bonds 248.6 0.2 248.8
Loans from financial institutions 182.1 0.2 182.3
Pension loans
Finance lease liabilities 20.4 -7. 2 -0.1 3.4 -0.7 15.9
Total 451.1 -7. 2 -0.1 3.4 -0.2 447.0
Non-current non-interest bearing liabilities 1.9 -0.4 0.0 0.0 1.5
Current interest-bearing liabilities 1.3 -0.4 -0.9 0.0
Total 454.3 -8.0 -0.1 3.4 -1.1 448.6
Other changes consists of Oy Hangö Stevedoring Ab’s liabilities transferred to assets held for sale and of accrual of eective interest during the financial
year on financial liabilities valued.
Bonds
EUR million Interest % 2021 2020
2017–2027 2.75 248.8 248.6
Total 248.8 248.6
Metsä Board Corporation issued in September 2017 a bond of EUR
250 million. The bond carries a fixed coupon rate of 2.75 per cent, and
the maturity date is 29 September 2027. The bond ranks senior and is
unsecured.
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■ 5.6 Management of financial risks
The financial risks associated with business operations are managed in
accordance with the financial policy endorsed by the Board of Directors
and the senior management of the company. The policy defines focal
instructions on the management of foreign currency, interest rate, liquidity
and counterparty risks, and for the use of derivative financial instruments.
Correspondingly, commodity risks are managed according to the compa-
ny’s commodity risk policy. The purpose is to protect the company against
major financial and commodity risks, to balance the cash flow and to allow
the business units time to adjust their operations to changing conditions.
Metsä Group Treasury Oy is specialized in finance and functions as the
Group’s internal bank. Metsäliitto Cooperative´s holding is 100 per cent of
the company. Financial operations have been centralised to Metsä Group
Treasury, which is in charge of managing the Group companies’ financial
positions according to the strategy and financial policy, providing neces-
sary financial services and acting as an advisor in financial matters.
Foreign currency risk
The Group’s foreign currency exposure consists of the risks associated
with foreign currency flows, translation risk of net investments in foreign
entities and economic currency exposure. Most of the Group’s costs are
incurred in the euro zone and to some extent in Sweden, but a significant
part of the sales is received or priced in other currencies. Sales may
therefore vary because of changes in exchange rates, while production
costs remain unchanged. The foreign currency transaction exposure is
consisting of foreign currency denominated sales and costs. The exposure
is including foreign currency denominated balance sheet exposure consist-
ing of accounts receivable and accounts payable and 50 per cent share of
the annual contracted or estimated net currency cash flow.
The main currencies of the Group’s foreign currency transaction
exposure are the US dollar, the Swedish krona and the British pound.
The share of dollar is 56 per cent, share of Swedish krona is 35 per cent
and share of pound is 7 per cent. A strengthening of the dollar and the
pound has a positive impact on the financial result and a weakening
a negative impact. A weakening of the Swedish krona has a positive
impact on the result of the Group. Other currencies, where Metsä Board
has currency risk are among others Australian dollar and Canadian
dollar. The hedging policy is to keep the balance sheet exposure and
50 per cent of annual cash flow of contracted or estimated currency
flows consistently hedged. The amount of hedging may deviate from the
normal level by 40 per cent in either direction. The Board of Directors of
Metsä Board is deciding on hedging levels significantly deviating from
the norm set out in the financial policy. The amount of currency-specific
hedging depends on current exchange rates and market expectations,
on the interest rate dierences between the currencies and the signifi-
cance of the exchange rate risk for the financial result of the Group. The
transaction exposure is mainly hedged by forward transactions but also
by the use of foreign currency loans and currency options.
At the end of the reporting period, the foreign exchange transaction
exposure had been hedged 8.1 months on average (2020: 7.9) being
117 per cent of the hedging norm (112). During the reporting period, the
hedging level has varied between 7 and 9 months (7–9) being between
108 and 118 per cent of the norm (107–115). The dollar’s hedging level was
7.7 months (6.6) being 113 per cent of the norm (97). The Swedish krona’s
hedging level was 9.3 months (10.0) being 135 per cent of the norm (139).
The pound’s hedging level was 7.5 months (7.8) being 100 per cent of
the norm (100). Hedge accounting in accordance with IFRS 9 has been
applied to hedging of transaction exposure and forwards and options
allocated to hedge accounting have been used to hedge the portion of
highly probable forecast sales of the currency transaction exposure.
The translation risk of a net investment in a foreign entity is generated
from the consolidation of the equity of subsidiaries and associated
companies outside the euro area into euros in the consolidated financial
statements. Hedging of equity has been discontinued.
The Group has applied the Value-at-Risk method to assess the risk of
its open foreign currency positions. The VaR is calculated on the deviation
from the balance sheet exposure plus 50 per cent of annual foreign
currency exposure hedge norm defined in the financial policy. A 99%
confidence level on one month period is applied to the VaR risk figure.
The risk mandates regarding hedging decisions have been defined by
restricting the company management’s powers by linking them to maxi-
mum currency-specific hedging level changes and to a VaR limit. Possible
strategic decisions which exceed the policy risk limits are made by the
Board of Directors. The limit set for the Metsä Board’s foreign currency
risk is EUR 9.0 million (12.5) and the VaR is at the end of the reporting
period EUR 4.4 million (3.9). Average during the period has been EUR 3.6
million (3.8).
Interest rate risk
The interest rate risk is related in the interest bearing receivables and
loans, working capital financing and currency hedging. The most signifi-
cant currencies in risk management are the euro, the US dollar, the British
pound and the Swedish krona. The objective of the interest rate risk policy
is to minimise the negative impact of interest rate changes on the Group´s
and group companies´ result and the financial position, and to optimise
financing costs within the framework of risk limits. The eect of interest
rate changes on financial costs depends on the average interest fixing time
of interest bearing assets and liabilities, which is measured in the Group by
duration. As duration is lengthening the rise of interest rates aects more
slowly the interest expenses of financial liabilities. The maturity of the loan
portfolio can be influenced by adjusting between floating-rate and fixed-
rate loans and by using interest rate swaps.
The average interest duration norm based on the Group’s financial
policy is 24 months since 2021. Earlier norm was 12 months average
duration. The duration can, however, deviate between 6 to 36 months
from the hedging policy norm so that the decision of a larger deviation
has to be made by the Board of Directors. The average duration of
loans was high 45.3 months at the end of the year (52.0). During the
reporting period duration has varied between 44 and 53 months
(51–56). Duration is lengthened by the 10 year bond of EUR 250 million.
Of interest-bearing liabilities 11 per cent (13) is subjected to variable
rates and the rest to fixed rates and the average interest rate at the end
of 2021 is 2.3 per cent (2.3). At the end of 2021, an increase of one per
cent in interest rates would decrease net interest rate costs of the next
12 months by EUR 5.0 million (2.2).
The Group has applied cash flow hedge accounting in accordance with
IFRS 9 to interest rate swaps by which floating-rate financing has been
converted to fixed-rate financing. The gross nominal volume of interest rate
112
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
derivatives at the time of financial statements is EUR 100.0 million (100.0)
and the maturity of interest rate swap contracts varies between 1–4 years
(1–5).
Commodity risk
In the hedging of commodity risks the Group applies risk management
policies defined separately for each selected commodity. According to
the policy, the management of commodity risks with regard to financial
hedges is accomplished centralized by Metsä Group Treasury based on the
strategy approved by Board of Directors of Metsä Board. The commodity
hedging policy is applied to the management of the price risks of electricity,
natural gas, propane and fuel oil and also transactions related to Emission
allowances are managed by Metsä Group Treasury. Hedge accounting
in accordance with IFRS 9 has been applied to all commodity hedging.
According to the commodity hedging policy an 80 per cent hedge level of
the estimated net position during the first 12 month period has been set
as a hedging norm and the hedge ratio can vary by 20 per cent in either
direction. Hedges based on previous policy are gradually maturing. The
Group Board of Directors makes significant strategic decisions.
Metsä Board’s target in managing the electricity price risk is to balance
the eect of changes in the price of electricity on the Group’s result and
financial position. The main principle is to hedge the electricity purchase
exposure, which consists of the dierence of factory-specific electricity
consumption estimates and power plant production shares in the posses-
sion of the Group. The electricity exposure of Metsä Board is stabilizing
after Olkiluoto 3 -project is getting ready and thanks to the investment in
Husum pulp mill. Therefore the need to hedge the electricity exposure is
ending during the year 2022. The hedge strategy has been implemented
in cooperation with Metsä Group Energy service unit centralized through
Metsä Group Treasury. Approximately a quarter of Metsä Board’s mills’
purchase of fuel is based on natural gas and the company is hedging
the price risk of natural gas purchases by using financial hedges. Metsä
Board is hedging also the gas oil, heavy fuel oil and 0.5% fuel oil price risk
related to logistics costs (sea freights) based on commodity risk policy by
using financial hedges. Metsä Board is not hedging its pulp price risk.
Liquidity risk
Liquidity risk is defined as the risk that funds and available funding
become insucient to meet business needs, or costs that are incurred in
arranging the necessary financing are unreasonable high. Liquidity risk is
monitored by estimating the need for liquidity needs 12–24 months ahead
and ensuring that the total liquidity available will cover a main part of this
need. According to the financial policy, the liquidity reserve must at all
times cover 100 per cent of the Group’s liquidity requirement for the first
12 months and 50–100 per cent of the following 12–24 months liquidity
requirement. The objective is that at the most 20 per cent of the Group’s
loans, including committed credit facilities, are allowed to mature within
the next 12 months and at least 25 per cent of the total debt must have a
maturity in excess of four years. The target is to avoid keeping extra liquid-
ity as liquid funds and instead maintain a liquidity reserve as committed
credit facilities outside the balance sheet.
The cornerstone of liquidity risk management is to manage the Group’s
operative decisions in such a way that targets concerning indebtedness
and sucient liquidity reserve can be secured in all economic conditions.
Liquidity risk is also managed by diversifying the use of capital and money
markets to decrease dependency on any single financing source and the
optimisation of the maturity structure of loans is also emphasized in finan-
cial decisions. Metsä Board is using short-term working capital financing
related to accounts receivables and accounts payables. Metsä Board has
for Husum investments EIB loan agreement of EUR 125.0 million, which
has not been drawn down and Finnvera guaranteed loan agreement of EUR
100.0 million, of which EUR 33.2 million has been drawn down and EUR
66.8 million has not been drawn down.
Metsä Board’s liquidity has remained strong. At the end of the review
period, available liquidity was EUR 916.0 million (605.8), consisting of
following items: liquid assets and investments of EUR 524.2 million (214.0),
a syndicated credit facility (revolving credit facility) of EUR 200.0 million
(200.0), and other committed credit facilities of EUR 191.8 million (191.8).
Of the liquid assets, EUR 496.4 million consisted of short-term deposits
with Metsä Group Treasury (204.7), and EUR 27.8 million were cash funds
and investments (9.3). Other interest-bearing receivables amounted
to EUR 2.7 million (2.9). In addition, Metsä Board’s liquidity reserve is
complemented by Metsä Group’s internal undrawn short-term credit
facility of EUR 150.0 million (150.0) and undrawn pension premium (TyEL)
funds of EUR 215.9 million (212.3). At the end of 2021, the liquidity reserve
covers fully the forecasted financing need of 2022–2023. 2 per cent (1) of
long-term loans and committed facilities fall due in a 12 month period and
69 per cent (88) have a maturity of over four years. The average maturity
of long-term loans is 4.7 years (5.7). The share of short-term financing of
the Group’s interest bearing liabilities is 0.0 per cent (0.3).
Counterparty risk
Financial instruments carry the risk that the Group may incur losses
should the counterparty be unable to meet its commitments. The Group
is managing this risk by entering into financial transactions only with most
creditworthy counterparties and within pre-determined limits. Cash and
cash equivalents, and other investments have been spread to several
banks, commercial papers of several institutions and money market funds.
During the reporting period, credit risks of financial instruments did not
result in any losses. Counterparty limits have been revised during the year
by taking into account the needs of the company and the view on the finan-
cial position of the used counterparties. Derivatives trading is regulated by
the standardised ISDA contracts made with the counterparties. Main part
of financial credit risks are in the balance sheet of Metsä Group Treasury
and not directly in the balance sheet of Metsä Board. The Group has
applied expected credit loss model in accordance with IFRS 9 to calculate
the impairment of financial assets.
TThe Group’s accounts receivable carry a counterparty risk that the
Group may incur losses should the counterparty be unable to meet its
commitments. Credit risk attached to accounts receivable is managed on
the basis of the credit risk management policies approved by operative
management. Accounts receivable performance is followed by Group
Credit Risk Management Team and reported monthly to Customer Credit
& Compliance Committee and operative management. Credit quality
of customers is assessed at regular intervals based on the customers’
financial statements, payment behaviour and credit ratings agencies.
Credit limits are approved according to credit risk management policy with
approval limits of varying values across the Group. Individual credit limits
113
22 23 24 25 26 27-
300
250
200
150
100
50
0
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
are reviewed at least annually. Letters of Credits, bank and parent company
guarantees, and Credit insurance are used to mitigate credit risk according
to management decisions. The Customer Credit & Compliance Committee
reviews and sets all major credit limits which are not supported by credit
insurance and/ or other security. Despite the continuation of the COVID-19
pandemic, credit risk proved to be at a normal level. That notwithstanding,
reviews of customer credit risks were continued at an increased level
during the course of the year.
Metsä Board implements regular impairment tests for customer
accounts receivables. Credit loss impairment is booked when a customer
enters legal bankruptcy or becomes past due for more than 6 months (180
days) without a valid payment plan or other acceptable reasons. New net
credit loss provisions for the year were nil (2020: EUR 0.3 million). The
portion of overdue client receivables of all accounts receivable is at the
time of financial statements 2.1 per cent (3.8), of which 0.0 per cent (0.0)
is overdue between 90 - 180 days and 0.5 per cent (0.9) over 180 days.
The specification of doubtful receivables is in the Notes. Expected credit
losses on accounts receivables in accordance with IFRS 9 are calculated
by using a provision matrix. Expected credit loss expense is recognized
by applying expected credit loss percentages based on five-year historic
losses on accounts receivables from external debtors, net of credit
insurance outstanding at period end. The calculations were adjusted to
take in to account the impact of COVID-19 pandemic. The expected credit
loss percentage is 0.4 per cent of receivables (0.5).
The geographical structure of the accounts receivable is diversified and
is reflecting the external sales structure presented in the Segment informa-
tion. The top ten largest sources of credit risk exist in Italy, USA, Sweden,
Turkey, Poland, Germany, Russia, United Kingdom, Finland and Spain
(around 65 per cent of total external receivables (68)). The share of largest
individual customer (individual companies or groups of companies under
common ownership) credit risk exposure of Metsä Board at the end of 2021
represented 7 per cent (5) of total external accounts receivable. 33 per
cent (31) of accounts receivable was owed by ten largest customer groups
(individual companies or groups of companies under common ownership).
At the end of 2021, there was around 0.4 per cent (1.0) shortfall of credit
insurance limits beyond usual policy deductibles and exclusions.
Managing the capital
Terms capital and capital structure are used to describe investments made
in the company by its owners and retained earnings (together equity) and
debt capital (liabilities) as well as the relation between them. In managing
its capital structure, the Group aims at maintaining an ecient capital
structure that ensures the Group’s operational conditions in financial and
capital markets in all circumstances despite the fluctuations typical to the
sector. The company has a credit rating for its long-term financing. Certain
central target values, which correspond to standard requirements set by
financing and capital markets, have been defined for the capital structure.
No target level has been defined for the credit rating. The Group’s capital
structure is regularly assessed by the Group’s Board of Directors and its
Audit Committee.
Metsä Board updated the company´s long-term financial targets and
decided on a new dividend policy in 2017. Metsä Board´s target for the
comparable return on capital employed is at least 12 per cent. According
to the company´s target, the ratio of interest-bearing net liabilities to com-
parable EBITDA is a maximum of 2.5. This target level gives the company
enough flexibility for potential growth in the future. In 2021 the long-term
financial targets have been kept constant.
The key ratios describing the capital structure and the capital amounts
used for the calculation of the key ratio were on 31.12.2021 and 31.12.2020
the following:
EUR million 2021 2020
Interest-bearing net liabilities/comparable EBITDA -0.2 0.7
Net gearing ratio, % -4 17
Interest-bearing borrowings 448.6 452.4
./. Liquid funds 524.2 214.0
./.Interest-bearing receivables 2.7 2.9
Net interest bearing liabilities -78.4 235.5
Equity attributable to shareholders
of parent company
1,699.4 1,383.8
+ Non-controlling interest 146.2
Total Equity 1,845.6 1,383.8
In Group`s certain financial contracts financial covenants have been set
regarding financial performance and capital structure. Other covenants in
the Group’s loan agreements are customary terms and conditions includ-
ing for example a negative pledge, restrictions on major asset disposals,
limitations on subsidiary indebtedness, restrictions on changes of business
and mandatory prepayment obligations upon a change of control of the
Group. According to the covenant conditions of EUR 225 million financing
package of Husum investments net gearing may not exceed 100 per cent
in relation to the share capital. The Group has been in compliance with its
covenants during the accounting periods 2021 and 2020. In case the com-
pany could not meet its obligations as defined in financial contracts and
in order to avoid a breach of contract that could have an adverse eect on
the company’s financial position, it would need to renegotiate its financial
arrangements, payback its loans or get its debtors to give up their claims to
meet these obligations.
Metsä Group has launched a Green Finance Framework, which
integrates sustainability and climate change mitigation to the Group´s
investments and related financing activities. The framework is based on
the Group´s strategy and the strategic sustainability objectives for 2030.
The interest margin of Metsä Board´s EUR 200 million syndicated credit
limit (revolving credit facility) has been linked to results of environmental
objectives set by the company.
REPAYMENT OF
NON-CURRENT
LOANS
EUR million
BREAKDOWN
OF CURRENCY
EXPOSURE
%
USD 56%
SEK 35%
GBP 7%
CAD 2%
Others 1%
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Hedging of foreign exchange
transaction exposure 31.12.2021 Annual transaction exposure
EUR million USD GBP SEK AUD CAD Other long Other short
Total
Transaction exposure, net (mill. currency units) 920 80 -5,296 11 37
Transaction exposure, net (EUR million) 812 95 -517 7 26 3 0 1,460
Transaction exposure hedging (EUR million) -520 -59 400 0 0 0 0 -980
Hedging at the end of the year (months) 7,7 7, 5 9,3 0,0 0,0 8,1
Average hedging in 2021 (months) 6,9 7, 6 10,0 1,3 1,0 7, 9
Average rate of hedging at the end of the year 1,1655 0,8550 10,2117
Hedging of foreign exchange
transaction exposure 31.12.2020 Annual transaction exposure
EUR million USD GBP SEK AUD CAD Other long Other short Total
Transaction exposure, net (mill. currency units) 761 80 -4,188 22 14
Transaction exposure, net (EUR million) 620 89 -417 14 9 3 0 1,152
Transaction exposure hedging (EUR million) -339 -58 347 -7 -4 0 0 -755
Hedging at the end of the year (months) 6.6 7.8 10.0 6.4 5.0 7. 9
Average hedging in 2020 (months) 6.7 7. 5 10.3 10.3 6.1 8.0
Average rate of hedging at the end of the year 1,1873 0,9066 10,5698
Net investments in a foreign entity 31.12.2021 Equity exposure
EUR million USD GBP SEK Others Total
Equity exposure (mill. currency units) 112 8 5,892
Equity exposure (EUR million) 99 10 575 3 685
Net investments in a foreign entity 31.12.2020 Equity exposure
EUR million USD GBP SEK Others
Total
Equity exposure (mill. currency units) 93 6 4,084
Equity exposure (EUR million) 76 6 407 4 493
Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2021
Loan
amount
(EUR million)
Duration
1)
(months)
Average
interest rate
(%)
Interest rate
sensitivity
2)
(EUR million)
31 Dec 21
Re-pricing structure of interest rates of loans
1–4/2022 5–8/2022 9–12/2022 2023 2024 2025 >2025
449 45,3 2,3 -5,0 -97 9 157 76 35 84 377
Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2020
Loan
amount
(EUR million)
Duration
1)
(months)
Average
interest rate
(%)
Interest rate
sensitivity
2)
(EUR million)
31 Dec 20
Re-pricing structure of interest rates of loans
1–4/2021 5–8/2021 9–12/2021 2022 2023 2024 >2024
452 52,0 2,3 -2,2 -98 3 151 7 57 6 326
1)
The duration has been calculated including EUR 192 million of undrawn loans related to investments, which are also included in the re-pricing structure.
2)
Interest rate sensitivity is an estimate of the eect of an interest rate change of one percent in one direction on net interest cost based on year end exposure
Hedging of electricity price risk exposure
GWh 31 Dec 21 31 Dec 20
Electricity exposure, net 2021 555 850
Electricity hedging 2021 135 367
Hedging at the end of the year 2021 (%) 24 43
Average price of hedging at the end of the year 2021 (e/MWh) 32,07 24,10
Electricity price risk is hedged based on defined risk management policy by physical contracts or by financial contracts. The net electricity exposure has
been calculated by taking into account the own and associated companies´ electricity production.
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Market risk sensitivity 2021 31 Dec 21 Impact on equity exposure and annual transaction exposure
MEUR
Impact on
financial assets
and liabilities
Impact on
net equity of
foreign entities
Impact on annual
transaction expo-
sure (cash flow)
Impact on annual
transaction expo-
sure (cash flow)
incl. hedging
Interest rate risk (100 bp rise in interest rates)
Eect on profit 5.0 7.0
Eect on other change in equity 2.0
Commodity risk (electricity price + 20%)
Eect on profit -5.5 -3.7
Eect on other change in equity 1.9
FX risk (USD - 10%)
Eect on profit -0.0 -81.2 -29.2
Eect on other change in equity 46.5 -9,9
FX risk (GBP - 10%)
Eect on profit 0.1 -9.5 -3.6
Eect on other change in equity 4.7 -1.0
FX risk (SEK - 10%)
Eect on profit 0.8 51.7 11.7
Eect on other change in equity -36.1 -57.5
Market risk sensitivity 2020 31 Dec 20 Impact on equity exposure and annual transaction exposure
MEUR
Impact on
financial assets
and liabilities
Impact on
net equity of
foreign entities
Impact on annual
transaction expo-
sure (cash flow)
Impact on annual
transaction expo-
sure (cash flow)
incl. hedging
Interest rate risk (100 bp rise in interest rates)
Eect on profit 2.2 5.3
Eect on other change in equity 3.0
Commodity risk (electricity price + 20%)
Eect on profit -5.8 -3.7
Eect on other change in equity 2.0
FX risk (USD - 10%)
Eect on profit -0.5 -62.0 -28.1
Eect on other change in equity 29.7 -7.6
FX risk (GBP - 10%)
Eect on profit 0.1 -8.9 -3.1
Eect on other change in equity 4.4 -0.6
FX risk (SEK - 10%)
Eect on profit 0.2 41.7 7.0
Eect on other change in equity -30.7 -40.7
Items with + sign = positive eect = increase of assets / decrease of liabilities / increase of cash flow
Items with - sign = negative eect = decrease of assets / increase of liabilities / decrease of cash flow
IFRS 7 requires an entity to disclose a sensitivity analysis for each type of
market risk to which the entity is exposed at the reporting date, showing
how profit or loss and equity would have been aected by changes in the
relevant risk variable that were reasonably possible at that date. The Group
has recognised interest rates, electricity prices and foreign exchange rates
as its key market risks and has set 1 per cent interest rate rise, 20 per cent
rise in electricity price and 10 per cent weakening of USD, GBP and SEK
as reasonably possible risk variables. These currencies represent over 98
per cent of Group´s annual transaction exposure. The nature of the market
price risk is relatively linear so that the size of eects of opposite market
price changes do not essentially dier from the presented figures. The
scenarios have been calculated by using regular principles of calculating
market values of financial instruments described in the Group Accounting
policies. Figures at the reporting date reflect quite well the average market
risk conditions throughout the reporting period.
Additionally the Group is presenting figures describing the eects of the
risk variables to its equity exposure and annual transaction exposure (cash
flow) to present a broader picture about market risks of interest rates, elec-
tricity prices and foreign exchange rates. Annual cash flows are based on
estimates, but not existing commercial contracts. The weakening of USD
and GBP has a negative impact on annual cash flow and the weakening of
SEK has a positive impact. Hedges reduce this impact depending on hedg-
ing strategy. The impact on net equity of foreign entities is arising from
the consolidation of subsidiaries to the Group consolidated accounts. The
rise of electricity price has a negative impact on cash flow. As according to
hedging policy the electricity price risk of the nearest year has mostly been
hedged, the impact including hedges remains minor.
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Cash flows of installments and interest payments of financial liabilities 2021
EUR million 2022 2023 2024 2025 2026 2027– Total
Bonds 248.8 248.8
Loans from financial institutions 3.9 3.9 3.9 153.2 3.9 13.5 182.3
Finance lease liabilities
1)
6.6 4.6 2.6 1.4 0.4 2.6 18.1
Non-current interest-bearing liabilities total 10.5 8.5 6.5 154.6 4.3 264.9 449.3
Current interest-bearing liabilities 0.0 0.0
Total liabilities 10.5 8.5 6.5 154.6 4.3 264.9 449.3
Interest payments 8.6 8.5 8.5 7. 5 7. 0 7. 2 47. 3
Guarantee agreements 0.2 0.4 0.1 0.1 1.2 2.0
Derivatives
Currency derivative, liabilities 1,085.4 1,085.4
Currency derivative, receivables -1,068.9 -1,068.9
Interest rate swaps, liabilities 0.9 0.4 0.3 0.1 1.7
Commodity derivatives, liabilities 0.1 0.1
Commodity derivatives, receicables -32.0 -32.0
Derivatives, net -14.5 0.4 0.3 0.1 -13.7
Cash flows of installments and interest payments of financial liabilities 2020
EUR million 2021 2022 2023 2024 2025 2026– Total
Bonds 248.6 248.6
Loans from financial institutions 3.9 3.9 3.9 153.0 1 7.4 182.1
Finance lease liabilities
1)
6.7 5.3 3.9 2.4 1.2 2.9 22.3
Non-current interest-bearing liabilities total 6.7 9.2 7. 8 6.3 154.2 268.9 453.1
Current interest-bearing liabilities 1.3
Total liabilities 8.0 9.2 7.8 6.3 154.2 268.9 454.4
Interest payments 8.6 8.6 8.5 8.5 7. 5 14.2 55.9
Guarantee agreements 0.8 0.2 0.1 2.4 3.5
Derivatives
Currency derivative, liabilities 963.6 963.6
Currency derivative, receivables -988.0 -988.0
Interest rate swaps, liabilities 1.0 0.9 0.7 0.5 0.2 3.4
Commodity derivatives, liabilities 0.4 0.1 0.4
Commodity derivatives, receicables -4.3 0.0 -4.3
Derivatives, net -27.3 1.0 0.7 0.5 0.2 0.0 -24.9
1)
Cash flows from lease liabilities include both debt repayment and financing expense.
The balance sheet value of lease liabilities on December 31, 2021 was EUR 15.9 million (20.4). The balance sheet value of currency derivative liabilities on
31 December 2021 was EUR 2.0 million (4.6) and the value of currency derivative receivables was EUR 18.5 million (29.0).
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■ 5.7 Classification and fair values of financial assets and liabilities
Classification and fair values of financial assets and liabilities 2021
EUR million Note
Fair value through
profit and loss
Fair value through other
comprehensive income Amortised cost Total carrying amount
Financial assets
Other non-current investments 4.3 3.4 1 77.6 181.0
Other non-current financial assets 5.3 15.3 15.3
Accounts receivable and other receivables 4.5 331.5 331.5
Cash and cash equivalents 5.4 0.0 524.2 524.2
Derivative financial instruments 5.7 0.5 33.5 34.0
Assets classified as assets held for sale 7. 2 2.1 2.1
Total carrying amount 3.9 211.1 873.1 1,088.1
Total fair value 3.9 211.1 873.1 1,088.1
Financial liabilities
Non-current interest-bearing financial liabilities 5.5 437.0 4 3 7.0
Other non-current financial liabilities 4.7 0.5 0.5
Current interest-bearing financial liabilities 5.5 10.0 10.0
Accounts payable and other liabilities 4.7 430.9 430.9
Derivative financial instruments 5.7 0.6 19.6 20.3
Liabilties classified as held for sale 7. 2 5.5 5.5
Total carrying amount 0.6 19.6 883.9 904.1
Total fair value 0.6 19.6 913.1 933.4
Classification and fair values of financial assets and liabilities 2020
EUR million Note
Fair value through
profit and loss
Fair value through other
comprehensive income Amortised cost Total carrying amount
Financial assets
Other non-current investments 4.3 3.5 183.4 186.9
Other non-current financial assets 5.3 10.8 10.8
Accounts receivable and other receivables 4.5 276.7 276.7
Cash and cash equivalents 5.4 214.0 214.0
Derivative financial instruments 5.7 0.6 32.6 33.3
Total carrying amount 4.1 216.0 501.5 721.6
Total fair value 4.1 216.0 501.5 721.6
Financial liabilities
Non-current interest-bearing financial liabilities 5.5 444.8 444.8
Other non-current financial liabilities 4.7 0.4 0.4
Current interest-bearing financial liabilities 5.5 7.6 7. 6
Accounts payable and other liabilities 4.7 306.0 306.0
Derivative financial instruments 5.7 1.1 7. 2 8.4
Total carrying amount 1.1 7. 2 758.7 767.1
Total fair value 1.1 7. 2 791.7 800.1
Accounts receivable and other receivables do not include advance
payments, accrued tax receivables and periodisations of employee costs
(Note 4.5). Accounts payable and other financial liabilities do not include
advance payments, accrued tax liabilities and periodisations of employee
costs (Note 4.7).
In Metsä Board, all interest-bearing liabilities are valued in the balance
sheet at amortised cost based on eective interest method.
Fair values are based on present value of cash flow of each liability or
assets calculated by market rate. The discount rates applied are between
0.3–1.4 per cent (31 December 2020: 0.3–2.1). The fair values of accounts
and other receivables and accounts payable and other liabilities do not
materially deviate from their carrying amounts in the balance sheet.
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Fair value hierarchy of financial assets and liabilities
Accounting principles
Financial assets and liabilities measured at fair value have been
categorised as follows:
Level 1 Fair value is based on quoted prices in active markets.
Level 2 Fair value is determined by using valuation techniques
that use observable price information from market.
Level 3 Fair value are not based on observa-ble market data,
but on company’s own assumptions.
The fair value measurement of financial assets at fair value recognised
under other items of comprehensive income is described in Note 4.3.
The fair values of electricity, natural gas and fuel oil derivatives are
determined by using public price quotations in an active market (Level
1).
The fair values of currency forwards and options are determined by
using the market prices of the closing date of the reporting period. The
fair values of interest rate swaps are determined by using the present
value of expected payments, discounted using a risk adjusted discount
rate, supported by market interest rates and other market data of the
closing date of the reporting period (Level 2).
For financial instruments not traded on an active market, the fair
value is determined by valuation techniques. Judgment is used when
choosing the dierent techniques and making assumptions, which
are mainly based on circumstances prevailing in the markets on each
closing date of the reporting period (Level 3).
Fair value hierarchy of financial assets and liabilities 2021
31 Dec 2021
EUR million Note Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other non-current investments 4.3 0.0 181.0 181.0
Derivative financial assets 5.7 9.3 24.7 34.0
Financial liabilities measured at fair value
Derivative financial liabilities 5.7 0.1 20.2 20.3
Financial assets not measured at fair value
Cash and cash equivalents 5.4 524.2 524.2
Financial liabilities not measured at fair value
Non-current interest-bearing financial liabilities 5.5 466.3 466.3
Current interest-bearing financial liabilities 5.5 10.0 10.0
Fair value hierarchy of financial assets and liabilities 2020
31 Dec 2020
EUR million Note Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other non-current investments 4.3 186.9 186.9
Derivative financial assets 5.7 2.3 30.9 33.3
Financial liabilities measured at fair value
Derivative financial liabilities 5.7 0.4 8.0 8.4
Financial assets not measured at fair value
Cash and cash equivalents 5.4 214.0 214.0
Financial liabilities not measured at fair value
Non-current interest-bearing financial liabilities 5.5 47 7. 8 47 7.8
Current interest-bearing financial liabilities 5.5 7.6 7.6
Other non-current investments measured at fair value based on level 3 valuation
EUR million 2021 2020
Value 1 Jan 186.9 255.1
Total gains and losses in profit and loss -0.1 -0.1
Total gains and losses in other comprehensive income -5.8 -70.3
Purchases 2.2
Sales 0.0 -0.1
Transfers out from Level 3 0.0
Value Dec 31. 181.0 186.9
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Financial derivatives and hedge accounting
Accounting principles
Derivative contracts are initially recognised on the balance sheet
at fair value at cost, and thereafter during their term-to-maturity
revalued at their fair value at each reporting date. The fair value
of derivatives is presented in non-interest-bearing receivables or
liabilities. Gains and losses resulting from recognition at fair value are
treated in accounting as required with regard to the intended use of
the derivative contract in question. Derivatives are initially classified
as either
1. Hedges of the exposure to changes in the fair value of receivables,
liabilities or firm commitments;
2. Hedges of the cash flow from a highly probable forecast transaction;
3. Hedges of a net investment in a foreign entity, or
4. Derivatives to which it has been decided not to apply hedge
accounting.
Metsä Board currently applies hedge accounting only to cash flow
hedging. When applying hedge accounting at the inception of a hedg-
ing relationship, the Group has documented the relationship between
the hedged item and the hedging instruments, as well as the hedging
strategy observed. To meet the requirements of hedge accounting,
the Group has also continuously carried out eectiveness testing to
verify that changes in the fair value of the hedging instrument for each
hedging relationship cover any changes in the fair value of the hedged
item eectively enough, with respect to the hedged risk. Changes in
the fair value of the eective portion of derivative instruments that
meet the criteria for cash flow hedging are recognised in other items
of comprehensive income. The gains and losses recognised in equity
are transferred to the income statement when the forecast sale or
purchase is realised, and are recognised as an adjustment to the
hedged item. If the forecast transaction is no longer expected to occur,
the gain or loss accrued in equity is recognised immediately in the
income statement.
Derivatives not subject to hedge accounting, as well as the ineective
portion of derivatives subject to hedge accounting, are measured at
fair value, and changes in the value of interest rate and currency deriv-
atives are recognised in financial items and changes in the value of
commodity derivatives are recognised in other income and expenses.
Hedge accounting is applied as cash flow hedging to highly probable
cash flows from sales denominated in foreign currencies and
contractual cash flows from floating interest rates of loans. In the
management of price risks related to commodities, hedge accounting
is applied to cash flows from highly probable purchases of electricity,
liquefied natural gas (LNG), natural gas, propane, light, heavy and
0.5% fuel oil. The fair values of forward foreign exchange contracts are
based on the forward prices prevailing on the balance sheet date, and
currency options are measured at fair value in accordance with the
Black–Scholes model. Interest rate swaps are measured at the current
value of cash flows, with the calculation being based on the market
interest rate yield curve. The fair values of derivatives are measured on
the basis of publicly quoted market prices.
Management of financial risks and hedge
eectiveness
The management of the Group’s currency, interest rate and com-
modity risks is described in more detail in Note 5.6, Management of
financial risks. Note 5.7., Fair values of financial assets and liabilities,
includes the fair values and grouping of derivatives. Note 5.1, Equity,
includes itemisations of hedge accounting entries in the fair value
reserve.
The hedging of the currency flow position is eective, given that there
is a direct financial relationship between the hedged sale and the
hedging derivative. The spot rate component of a forward contract
or the reference value component of a currency option has been
determined as the hedged item, and the forward points or the option’s
time value are treated as hedging costs subject to amortisation based
on the period. Currency flow forecasts are fairly stable, invoicing
steady within quarters and months, and forward deals are allocated
to each month, due to which the ineectiveness of hedging usually
remains very low. Changes in production or the structure of sales may
sometimes lead to ineectiveness during the validity of a hedging
relationship, in which case the hedging is adjusted accordingly.
The hedge accounting of the cash flow from interest rates is primarily
eective, given that there is a direct financial relationship between
the long-term loans subject to hedging and the hedging interest rate
swaps. Ineectiveness in the hedge relationship derives from any
possible dierences between the loans and the swaps’ interest rate
periods as well as from dierences in the reference rates of contract
terms. The ineective portion of interest rate hedging is recognised
through profit and loss. Premature loan withdrawals or premature
repayment of loans may result in a state of ineectiveness, in which
case the hedging interest rate swaps are reversed or derecognised
from hedge accounting, and the change in fair value is recognised in
financial items under income.
The hedging of commodity purchases is eective, given that, in lieu
of the total purchase price, the hedged item is the same, identical risk
component of pricing applied in the hedging derivative. In the hedging
of the price risk of electricity, the hedged item is what is referred to
as the portion of the system price and the hedging takes place with a
system-priced electricity swap. Correspondingly, the price compo-
nents of the purchases and the hedging derivative in the hedging of
natural gas, propane and fuel oil are identical. Commodity purchases
are fairly steady and hedges are allocated to each month, due to which
the ineectiveness of the hedging usually remains low. Changes in the
use of various commodities may sometimes lead to ineectiveness
during the validity of a hedging relationship, in which case the hedging
is adjusted accordingly.
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Derivatives 2021
Nominal value Fair value
EUR million Derivative assets
Derivative
liabilities Fair value net
Fair value
through profit
and loss
Fair value
through other
comprehensive
income
Interest rate swaps 100.0 0.0 1.7 -1.7 0.0 -1.7
Interest rate derivatives 100.0 0.0 1.7 -1.7 0.0 -1.7
Currency forward contracts 1,066.9 2.0 18.5 -16.5 -0.2 -16.3
Currency derivatives 1,066.9 2.0 18.5 -16.5 -0.2 -16.3
Electricity derivatives 4.4 4.9 0.0 4.9 4.9
Oil derivatives 1 7. 1 3.7 0.0 3.7 3.7
Natural gas and propane derivatives 14.6 23.5 0.1 23.4 23.4
Commodity derivatives 36.1 32.0 0.1 31.9 31.9
Derivatives total 1,203.0 34.0 20.3 13.7 -0.2 13.9
Derivatives 2020
Nominal value Fair value
EUR million Derivative assets
Derivative
liabilities Fair value net
Fair value
through profit
and loss
Fair value
through other
comprehensive
income
Interest rate swaps 100.0 3.4 -3.4 -3.4
Interest rate derivatives 100.0 3.4 -3.4 -3.4
Currency forward contracts 959.1 29.0 4.6 24.4 -0.5 24.9
Currency derivatives 959.1 29.0 4.6 24.4 -0.5 24.9
Electricity derivatives 9.8 0.6 0.3 0.3 0.3
Oil derivatives 12.3 1.3 0.1 1.2 1.2
Natural gas and propane derivatives 8.3 2.4 0.0 2.3 2.3
Commodity derivatives 30.4 4.3 0.4 3.9 3.9
Derivatives total 1,089.4 33.3 8.4 24.9 -0.5 25.4
Changes in the value of hedge accounting and the eects on profit or loss are presented in Note 5.1 Equity.
Economic eect of the net settlement of instruments under master
netting agreements executed
2021 2020
Financial
derivatives
on-balance sheet
Assets and
liabilities
related to
master netting
agreements Net risk
Financial
derivatives
on-balance sheet
Assets and
liabilities
related to
master netting
agreements Net risk
Derivative assets 34.0 34.0 33.3 33.3
Derivative liabilities -20.3 -20.3 -8.4 -8.4
Master netting agreements are used for derivative contracts entered into by the Group and its counterparties. In the event of unlikely credit events, all valid
transactions based on the agreement will be cancelled, and only one net sum will be payable by each counterparty for all the transactions. The items are
not netted on the balance sheet.
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Cash flow hedge maturities 2021
EUR million
1–6
months
6–12
months
1–5
years
over 5
years
Hedged
cash flow total
Interest rate derivatives, hedge accounting 100.0 100.0
Currency rate derivatives, hedge accounting 672.4 204.1 876.5
Currency derivatives, no hedge accounting 82.0 82.0
Commodity derivatives, hedge accounting 18.5 1 7.6 36.1
Cash flow hedge maturities 2020
EUR million
1–6
months
6–12
months
1–5
years
over 5
years
Hedged
cash flow total
Interest rate derivatives, hedge accounting 100.0 100.0
Currency rate derivatives, hedge accounting 548.9 110.9 659.8
Currency derivatives, no hedge accounting 100.5 0.0 0.0 100.5
Commodity derivatives, hedge accounting 15.2 14.2 1.0 30.4
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6. Income taxes
Accounting principles
Tax expenses in the income statement consist of taxes based
on the taxable income for the period, taxes for previous periods,
and deferred tax assets and liabilities. The tax eect related to
the items recorded in the comprehensive income statement
is recognised in the comprehensive income statement. Taxes
based on the taxable income for the period are calculated based
on taxable income in accordance with the tax rate as it stands in
each country at that time. Deferred tax assets and liabilities are
calculated on the temporary dierences between the carrying
amount and the tax base in accordance with the tax rates enacted
as at the balance sheet date.
No deferred taxes are recognised for non-deductible goodwill,
and no deferred taxes are recognised for subsidiaries’ undistrib-
uted profits to the extent that the dierence will not likely realise
in the predictable future. Deferred tax assets are recognised to
the extent that it is probable that taxable profit will be available
against which a deductible temporary dierence can be utilised.
Deferred income tax assets and liabilities can be oset when
there is a legally enforceable right to oset current tax assets
against current tax liabilities and when the deferred taxes are
related to the same taxation authority.
The most significant temporary dierences arise from depre-
ciation of property, plant and equipment; the measurement of
other investments and derivatives contracts at fair value; defined
benefit plans; unused tax losses; and measurement at fair value in
conjunction with acquisitions of business operations.
Key estimates and judgement
The management’s judgement is required for determining the
taxes based on the result for the period, deferred tax assets
and liabilities, and the extent to which deferred tax assets are
recorded. The Group is subject to income taxation in several
countries, and the final amount of tax is uncertain for several
business operations and calculations. The Group anticipates
future tax audits and recognises liabilities based on estimates of
whether further taxes will need to be paid. If the associated final
tax diers from the originally recorded amounts, the dierence
has an eect on both the taxes based on the taxable income for
the period, and on deferred tax receivables and liabilities.
EUR million 2021 2020
Income taxes for the financial period 48.6 41.8
Income taxes from previous periods 3.2 0.2
Change in deferred taxes 0.1 0.2
Income taxes total 51.8 42.2
Income tax reconciliation
EUR million 2021 2020
Result before tax 365.8 212.3
Calculated tax at Finnish statutory rate of 20.0% 73.2 42.5
Change in Swedish company tax rate from 21.4% to
20.6%
-1.1
Eects of dierences between Finnish and non-Finnish
tax rates
1.0 0.2
Tax exempt income -1.4 -0.4
Non-deductible expenses 0.2 0.1
Previous years tax losses on which no deferred tax asset
has been recognised used during period
-0.5 -0.3
Adjustments to previously recognised deferred taxes -1.1 0.7
Losses from subsidiaries, on which no deferred tax asset
has been recognised
0.0
Share of result from associate companies and joint
ventures
-22.9 0.5
Income taxes from previous periods 3.2 0.2
Other items 0.1 -0.1
Income taxes total 51.8 42.2
Eective tax rate, % 14.2 19.9
Income taxes from previous periods include EUR 2.3 million in taxes
recorded on the basis of a tax audit of an Italian subsidiary.
Taxes reported in other comprehensive income are specified in Note 5.1.
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Deferred tax assets and liabilities 2021
EUR million 1 Jan 2021
Charged to
income statement
Charged to other
comprehensive
income
Translation
dierences Sold subsidiaries 31 Dec 2021
Deferred tax assets
Pension obligations and provisions 4.2 -0.2 0.0 0.0 -0.2 3.8
Intercompany margins 4.5 -1.2 0.1 3.4
Unused tax loss carry-forwards 0.6 4.2 0.0 4.8
Other temporary dierences 2.4 -0.3 0.0 0.1 2.2
Total 11.8 2.5 -0.1 0.2 -0.2 14.2
Netting against liabilities -4.3 -1.6 0.0 0.1 -5.8
Deferred tax assets in balance sheet 7. 5 0.9 0.0 0.2 -0.2 8.4
Deferred tax liabilities
Pension obligations 1.3 -0.1 2.0 0.1 3.3
Depreciation dierences and appropriations 61.2 2.4 -0.6 -0.4 62.6
Other investments recognised at fair value 28.4 -1.2 2 7. 2
Financial instruments 6.7 0.3 -2.2 0.0 4.8
Net investments in foreign operations 0.1 -0.1
Other temporary dierences 4.2 -0.1 0.0 0.0 4.1
Total 101.8 2.6 -1.4 -0.6 -0.4 102.0
Netting against receivables -4.3 -1.6 0.0 0.1 -5.8
Deferred tax liabilities in balance sheet 9 7. 5 1.0 -1.4 -0.6 -0.4 96.2
Deferred tax assets and liabilities 2020
EUR million 1 Jan 2020
Charged to
income statement
Charged to other
comprehensive
income
Translation
dierences Sold subsidiaries 31 Dec 2020
Deferred tax assets
Pension obligations and provisions 4.1 -0.2 0.4 0.0 4.2
Intercompany margins 3.8 0.9 -0.2 4.5
Unused tax loss carry-forwards 0.6 0.6
Other temporary dierences 3.7 -0.7 -0.5 -0.1 2.4
Total 12.3 0.0 -0.2 -0.3 11.8
Netting against liabilities -5.5 2.2 0.0 -1.0 -4.3
Deferred tax assets in balance sheet 6.7 2.2 -0.2 -1.2 7. 5
Deferred tax liabilities
Pension obligations 2.1 -0.1 -0.6 -0.1 1.3
Depreciation dierences and appropriations 63.4 -3.4 0.0 1.2 61.2
Other investments recognised at fair value 42.5 -14.1 28.4
Financial instruments 2.9 0.3 3.4 0.1 6.7
Net investments in foreign operations -0.9 0.9
Other temporary dierences 0.3 4.3 -0.5 0.1 4.2
Total 111.2 0.2 -11.8 2.2 101.8
Netting against receivables -5.5 2.2 0.0 -1.0 -4.3
Deferred tax liabilities in balance sheet 105.6 2.4 -11.8 1.2 97. 5
The Group has recognised deferred tax assets related to operating loss carry-forwards for EUR 0.8 million in Germany. Management assesses that taxable
profit will be available against which loss carry-forward can be utilised.
The taxable loss carry-forwards of business operations, for which deferred tax assets have not been recognised due to uncertainty of amount or utili-
sation possibilities, amounted approximately to EUR 90 million (506) in Germany. The unrecognised deferred tax assets for these loss carry forwards is
about EUR 29 million (113). Loss carry-forwards do not expire. The change in the financial year is mainly related to the resolution of the dispute mentioned
in Note 8.1.
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7. Group structure
■ 7.1 Group companies
Subsidiaries and joint operations 31 December 2021
Metsä Board Oyj ’ s holdings in Group companies
Country Holding, % Number of shares
Book value
EUR
Holdings in parent company
Subsidiary shares in Finland
Kotimaiset
Oy Hangö Stevedoring Ab Finland 100.00 150 1,000,000.00
Metsä Board International Oy Finland 100.00 10,000 23,347,464.13
in other countries
Metsa Board Americas Corporation
1)
USA 99.00 17,820 12,209,018.39
Metsä Board Benelux n.v./s.a
1)
Belgium 0.08 2 0.00
Metsa Board Hong Kong Ltd
1)
Hong Kong 1.00 1 168.19
Metsä Board Deutschland GmbH Germany 100.00 1 0.00
Metsa Board Ibéria S.A
1)
Spain 1.00 100 1,561.63
Metsä Board NL Holding B.V. The Netherlands 100.00 15,350 4,492,764.02
Metsä Board Sverige Ab Sweden 100.00 10,000,000 493,721,059.95
Subsidiary shares total 534,772,036.31
Shares and holdings in Group companies 535,378,815.29
TotalGroupholding
Subgroup in Finland
Metsä Board International Oy
Metsä Board Benelux n.v./s.a
1)
Belgium 99.92 2,921 140,001.71
OOO Metsä Board Rus Russia 100.00 1 821,786.71
Metsä Board France SAS France 100.00 8,211 418,951.75
Metsa Board Hong Kong Ltd
1)
Hong Kong 99.00 99 1,069.35
Metsa Board Ibéria S.A.
1)
Spain 99.00 147,771 155,316.78
Metsa Board Italia S.r.l. Italy 100.00 100,000 1,250,691.84
Metsa Board (Middle East & Africa) Ltd Cyprus 100.00 742,105 214,000.00
Metsä Board Polska Sp. Z o.o. Poland 100.00 232 54,458.58
Metsa Board Singapore Pte Ltd Singapore 100.00 10,000 4,036.51
Metsa Board Singapore Pte Ltd Indian Branch India 100.00 - -
Metsa Board Turkey LLC Turkey 100.00 400 1,201.25
Metsa Board UK Ltd United Kingdom 100.00 2,400 264,172.02
Metsa Board Americas Corporation
1)
USA 1.00 180 4,435.15
Metsa Board Australia and New Zealand Pty Ltd Australia 100.00 1 41,827.54
Total 3,371,949.19
Accounting principles
Subsidiaries
The financial statements include all of the companies controlled by the
Group. Intra-Group shareholding is eliminated using the acquisition
method. Intra-Group business transactions, receivables, liabilities and
unrealised gains, as well as internal distribution of profits, are elimi-
nated on consolidation. Unrealised losses arising from impairment are
not eliminated. When necessary, the accounting principles applied by
subsidiaries have been adjusted to comply with the Group’s principles.
The parent company’s owners’ and non-controlling interests’ shares of
the result for the period and comprehensive income are presented in
the comprehensive income statement. The non-controlling interests’
share of equity is presented as a separate item under equity on the
balance sheet.
Joint operations
A joint operation is a joint arrangement in which parties who have
joint control in the arrangement have rights concerning the assets
related to the arrangement and obligations concerning liabilities. The
Group consolidates its proportion of the assets, liabilities, income and
expenses of the joint operation in its financial statements.
125
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AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Material subsidiaries
Metsä Board has two material subsidiaries:
• Metsä Board Sverige AB
Metsä Board Sverige AB is located in Örnsköldsvik, Sweden. Metsä Board
Sverige AB produces folding boxboard and kraftliner. Metsä Board Sverige
AB’s sales were EUR 446 million (601). The company’s capacity is 250,000
tonnes of liner and 400,000 tonnes of folding boxboard.
• Husum Pulp AB
Husum Pulp Ab was established in 2020. The pulp business of Metsä
Board Sverige Ab was transferred to the company on December 31, 2020.
Husum Pulp AB produces pulp for Metsä Board Sverige Ab and to the
market. The company’s sales were EUR 379 million and capacity 730,000
tonnes of chemical pulp. A 30% minority stake in the company was sold
to the Swedish forest owners’ cooperative Norra Skog and the transaction
was completed on January 4, 2021.
Non-controlling interest’s shares
Principal non-controlling interest’s shares
Non-controlling interest
Holding, %
Non-controlling interest
Share of result, EUR million
Non-controlling interest
Share of equity, EUR million
EUR million Country 2021 2020 2021 2020 2021 2020
Husum Pulp AB Sweden 30.0% 21.9 146.2
Business transactions with non-controlling interest
Accounting principles
Changes in the parent company’s holdings in subsidiaries that
do not cause the parent company to lose its control over the
subsidiary are processed as business transactions concerning
equity.
The sale of a 30 percent stake in the Husum pulp mill to Norra Skog was
completed on January 4, 2021. Following the arrangement, the non-cont-
rolling interests’ share inceased by EUR 125.7 million and retained earnings
by EUR 134.4 million
In 2021 and 2020 there were no other significant acquisitions or sales of
non-controlling interests.
Impact on parent company’s equity from transactions
with non-controlling interest:
EUR million 2021 2020
The sale of a 30 percent stake in the Husum pulp mill,
Husum Pulp AB
Net eect in equity 134.4
Summary of financial information of subsidiaries with a
substantial non-controlling interest
Husum Pulp Ab
EUR million 2021 2020
Sales 378.8
Result for the period 75.3
Non-controlling interest’s share of the result 22.6
Non-controlling interest’s share of the total comprehen-
sive result -1.5
Dividends paid to non-controlling interest
Non-current assets 313.2
Current assets 273.7
Non-current liabilities 7. 1
Current liabilities 85.4
Net assets 494.3
Net cash flow from operating activities 68.8
Net cash flow arising from investing activities -133.8
Net cash flow arising from financing activities 190.2
Change in cash and cash equivalents 125.3
The numbers are presented before eliminations.
Country Holding, % Number of shares
Book value
EUR
Subgroup in other countries
Metsä Board Sverige Ab
Husum Pulp Ab Sweden 70.00 85,664 206,421,294,03
126
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Accounting principles
Associated companies include all companies over which the
Group has considerable influence but no control. Significant
influence is usually based on a shareholding conferring 20–50
per cent of the voting rights. A joint venture is a joint arrangement
in which the parties that have joint control of the arrangement
have rights to its net assets. Investments in associates and joint
ventures are accounted for using the equity method and are
initially recognized at cost. The Group’s shares in associated
companies and joint ventures also include the goodwill measured
at the time of acquisition, less any impairment.
The Group’s share of the profits or losses of associated compa-
nies and joint ventures is recognised in the income statement as a
separate line item above the operating result in case of associate
company Metsä Fibre and below the operating result in case of
other associate companies. Correspondingly, the Group’s share
of other comprehensive income in associated companies and
joint ventures is recognised in its items of other comprehensive
income. A proportion corresponding to the Group’s shareholding
is eliminated from unrealised profits between the Group and
its associate companies and joint ventures. Unrealised losses
arising from impairment are not eliminated. When necessary,
the accounting principles applied by associated companies and
joint ventures have been adjusted to comply with the Group’s
principles.
Investments in associate companies and joint ventures
EUR million 2021 2020
Value 1 Jan 369.0 392.4
Share of results from associated companies and joint
ventures
Share of result from Metsä Fibre 114.4 -2.4
Share of results from other associated companies
and joint ventures
0.0 -0.1
Dividends received -21.8
Decreases -0.5
Share of other comprehensive income from
associated companies and joint ventures
Fair value reserve -4.4 3.1
Translation dierences and other changes in equity 0.6 -2.2
Investments in associated companies and joint ventures
31 Dec
479.0 369.0
Amounts recognised in income statement
EUR million 2021 2020
Associate companies 114.4 -2.4
Joint ventures 0.0 -0.1
Amounts recognised in income statement total 114.4 -2.5
Amounts recognised in balance sheet
EUR million 2021 2020
Associate companies 479.0 368.5
Joint ventures 0.5
Amounts recognised in balance sheet total 479.0 369.0
The carrying amount of associated companies at 31 December 2021
includes goodwill of EUR 45.2 million (45.2). None of the associate com-
panies or joint ventures are listed companies. Transactions with associate
companies and joint ventures are detailed in Note 7.3.
Financial information summary of
essential associated companies
According to management’s view, the only essential associated company is
Metsä Fibre Group, which produces chemical pulp and sawn timber. Metsä
Board owns 24.9 per cent of Metsä Fibre. Metsä Board’s parent company,
Metsäliitto Cooperative, owns 50.1 per cent, and Itochu Corporation from
Japan owns 25.0 per cent. Metsä Fibre has operations primarily in Finland,
and its production capacity is approximately 3.2 million tonnes of chemical
pulp. In Addition Metsä Fibre has five sawmills in Finland and Metsä Svir
sawmill in Russia.
Summarised financial information for Metsä Fibre
Metsä Fibre Group
EUR million 2021 2020
Sales 2,628.1 1,826.5
Result for the period 472.4 -13.4
Other comprehensive income -15.4 4.5
Total comprehensive income for the period 4 57.0 -8.9
Dividend received 21.8
Non-current assets 1,966.9 1,473.2
Current assets 865.8 838.4
Non-current liabilities 469.1 543.5
Current liabilities 624.7 486.1
Net assets 1,738.9 1,282.1
Reconciliation of financial information for Metsä Fibre to
the value recognised in consolidated balance sheet
EUR million 2021 2020
Group's share of net assets 433.0 319.2
Goodwill 45.2 45.2
Other purchase price allocations at acquisition 5.1 5.6
Other adjustments -4.5 -1.7
Carrying value of associated company in consolidated
balance sheet
478.8 368.3
Metsä Fibre has been consolidated according to equity method based on
its consolidated financial statements prepared under IFRS.
127
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BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
■ 7.2 Non-current assets held for sale
Accounting principles
Assets held for sale are recognised at the lower of the book value
or fair value less expenses arising from the divestment. Deprecia-
tion is not recognised on assets held for sale after classification.
Assets classified as held for sale
Metsä Board and Euroports have signed an agreement on 16 December
2021, according to which Metsä Board Corporation will sell the entire share
capital of its fully owned subsidiary Oy Hangö Stevedoring Ab to Euroports
Finland Oy. The transaction is expected to be completed in the first quarter
of 2022. Hangö Stevedoring is a port operator in the Port of Hanko. The
company has approximately 180 employees and its sales in 2020 were
approximately EUR 20 million.
Assets classified as held for sale total
EUR million 2021 2020
Intangible and tangible assets 8.6
Accounts receivable and other receivables 2.4
Total assets 11.0
Provisions 1.0
Borrowings 1.5
Accounts payable and other liabilities 4.3
Total liabilities 6.8
Financial information summary of other than essential
associated companies
EUR million 2021 2020
Share of result from other associated compa-
nies
0.0 0.0
Carrying value in consolidated balance sheet 0.2 0.1
Joint ventures
Kemishipping Oy oers logistics services in Kemi, Finland. At the end of
November 2021, Metsä Board sold the joint venture Kemishipping Oy to
Metsäliitto Cooperative. The transaction resulted in a sales loss of EUR 0.3
million.
EUR million 2021 2020
Sales 13.5 12.9
Result for the period -0.1 -0.5
Result for the period includes the following items:
Depreciation, amortisation and impairment charges 1.3 1.4
Interest expenses 0.1 0.1
Income taxes 0.0 0.1
Dividends received from Joint Ventures
Non-current assets 6.1
Current assets 3.5
Non-current liabilities 2.3
Current liabilities 3.9
Net assets 3.4
Group's share of net assets 0.5
Joint venture carrying value in consolidated balance
sheet
0.5
128
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
■ 7.3 Related party transactions
Related parties include Metsä Board’s ultimate parent company Metsäliitto
Cooperative, which owns 48 per cent of Metsä Board’s shares and 67
per cent of the voting rights, other subsidiaries of Metsäliitto, associated
companies and joint ventures as well as Metsäliitto Employees’ Pension
Foundation. The members of the Board of Directors, Metsä Group’s Execu-
tive Management Team and Metsä Board’s Corporate Management Team
as well as their close family members are also included in related parties.
The most significant subsidiaries of Metsäliitto, with which Metsä Board
has business transactions, are as follows:
Metsä Tissue Group
Metsä Fibre Group
Metsä Forest Sverige Ab
Metsä Fibre has been consolidated by using equity method according to
Investments in associates standard (IAS 28). Related party transactions
with Metsä Fibre are presented as transactions with sister companies.
Financial operations of the Group have been centralised to Metsä Group
Treasury Oy, which is a wholly-owned subsidiary of Metsäliitto Cooperative
and in charge of managing the Group companies’ financial positions
according to the strategy and financial policy defined by the Group,
providing necessary financial services and acting as a competence center
in financial matters. Financial transactions with Metsä Group Treasury Oy
are carried out at market prices.
The value of wood purchases from Metsäliitto Cooperative was EUR 117.7
million (113.4) and pulp purchases from Metsä Fibre Oy EUR 336.9 million
(249.1). The purchases were carried out at market prices.
Metsä Board is participating in the supplementary pension arrangement
of Metsä Group executives. Payments to the arrangement amounted to
EUR 0.4 million in 2021 (0.5).
Transactions with parent company and sister
companies
Transactions with
parent company
Transactions with
sister companies
EUR million 2021 2020 2021 2020
Sales 13.7 6.8 96.6 68.6
Other operating income 3.9 2.9 1.1 1.0
Purchases 149.5 140.5 547.7 458.2
Share of result from
associated companies
114.4 -2.4
Dividend income 0.0 0.0
Interest income 0.0 0.1
Interest expense 1.0 0.9
Receivables
Accounts receivable
and other receivables
3.8 0.9 56.9 49.3
Cash equivalents 496.4 204.7
Liabilities
Accounts payable and
other liabilities
9.5 10.5 74.3 44.3
Transactions with associated companies and
joint ventures
EUR million 2021 2020
Sales 0.2 0.5
Purchases 4.2 3.0
Receivables
Other non-current financial assets
Accounts receivable and other receivables 0.3 0.2
Liabilities
Accounts payable and other liabilities 0.7 0.6
Metsä Board has classified interest-bearing receivables comparable to
cash funds and available immediately from Metsä Group’s internal bank
Metsä Group Treasury Oy as Cash and cash equivalents.
The receivables from group companies do not include doubtful receiv-
ables, and no bad debt was recognised during the period. No security or
collateral has been provided for group liabilities.
129
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
8. Other notes
■ 8.1 Contingent liabilities, assets and
commitments
Disputes and claims
In the autumn of 2015, the Finnish Tax Administration, in its assessment of
the 2014 taxation, refused the deductibility of certain losses related to the
cross-border merger of a French subsidiary in Metsä Board Corporation’s
2014 taxation.
Metsä Board appealed the decision issued by the Tax Administration, as
the company believes the losses to be deductible. The Tax Administration’s
Adjustment Board dismissed the company’s appeal in March 2018. In
February 2021, the Administrative Court of Helsinki dismissed the appeal
made by the company on the Adjustment Board’s decision. In its decision
of September 2021, the Supreme Administrative Court did not grant
Metsä Board leave to appeal the matter, due to which the dismissal of the
Administrative Court of Helsinki remains valid, and the case is closed.
Metsä Board companies have been sellers in several share transactions
in recent years. In these divestments, the companies have issued regular
seller’s assurances. Claims presented against Metsä Board companies and
costs incurred by the companies due to these assurances cannot be ruled
out.
EUR million 2021 2020
Own liabilities for which collateral has been provided
Pledges granted
Real estate mortages 192.8
Total collateral provided for own liabilities 192.8
Leases not yet commenced to which the Group is
committed
18.0
Other commitments given on own behalf 1.5 2.8
Commitments given on the behalf of others 0.1
Total 19.5 195.7
Commitments include granted pledges, mortgages and floating charges as
well as guarantees.
Investment commitments
EUR million 2021 2020
Payments due in following 12 months 80.6 60.4
Payments due later 1.9
Total 82.4 60.4
Commitments related to property, plant and equipment concern the first
phase of the modernisation of the Husum pulp mill and an investment to
increase Husum’s folding box-board capacity.
Other information
Metsä Board has investment grade credit ratings by S&P Global and
Moody’s Investor Service. The compa-ny’s rating by S&P Global is BBB-,
with a stable out-look. The company’s rating by Moody’s is Baa3, with a
positive outlook.
■ 8.2 Events after the financial period
On 1 January 2022, Metsä Board acquired all the shares in Hämeenkyrön
Voima Oy held by Pohjolan Voima Oyj and DL Power Oy, part of Leppäkoski
Group. Following the arrangement, Metsä Board owns 100% of Hämeen-
kyrön Voima Oy. The arrangement will not have a significant impact on
Metsä Board’s financial key figures.
The start-up of the Husum pulp mill’s new recovery boiler and turbine will
be delayed. The company ex-pects the new recovery boiler and turbine to
start up in September 2022. The earlier estimate was the first half of 2022.
130
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
EUR NOTE 1.1.–31.12.2021 1.1.–31.12.2020
Sales 2 1,389,003,575.21 1,262,298,497.02
Change in stocks of finished and unfinished products 18,978,903.15 -3,581,989.63
Other operating income 3.4 40,474,541.15 36,169,588.08
Materials and services
Materials, consumables and goods
Purchases during the financial period -820,695,309.71 -655,650,971.36
Changes in stocks 1,622,173.39 3,084,733.82
External services 5 -220,006,720.05 -184,687,540.74
Employee costs 5 -103,737,173.86 -96,195,043.20
Depreciations and impairment charges 3.6 -49,811,731.10 -51,242,262.32
Other operating expenses 3.5 -101,053,305.55 -111,572,081.32
-1,293,682,066.88 -1,096,263,165.12
Operating profit/loss 154,774,952.63 198,622,930.35
Financial income and expenses 7
Income from group companies 5,644,555.11 33,578,546.16
Income from investments in other non-current assets 855.00 1,980.00
Other interest and financial income 16,028.55 2,614.49
Exchange rate dierences -4,792,233.25 6,263,249.69
Interest expenses and other financial expenses -10,861,550.10 -11,306,180.32
-9,992,344.69 28,540,210.02
Profit/loss before appropriations and taxes 144,782,607.94 227,163,140.37
Appropriations
Change in depreciation dierences 6 -16,340,995.30 -9,066,231.37
Group contribution 391,363.11 1,160,000.00
-15,949,632.19 -7,906,231.37
Income taxes 8 -25,358,945.30 -38,800,726.87
Profit/loss for the financial period 103,474,030.45 180,456,182.13
Parent company
■ Income statement
Parent company financial statements
131
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Parent company
■ Balance sheet
EUR Note 31.12.2021 31.12.2020
ASSETS
Intangible assets 9
Intangible assets 4,865,929.32 12,657,981.63
Other intangible assets 278,744.68 366,412.56
Advance payment and construction in
progress
1,020,133.10 635,869.44
6,164,807.10 13,660,263.63
Tangible assets 9
Land and water areas 29,491,684.80 31,282,413.06
Buildings and constructions 123,703,859.97 128,739,857.83
Machinery and equipment 236,913,618.20 227,344,444.31
Other tangible assets 6,638,072.18 7,065,754.44
Advance payment and construction in
progress
18,957,755.83 20,641,731.56
415,704,990.98 415,074,201.20
Investments 10
Shares in group companies 535,378,815.29 535,378,815.29
Receivables from group companies 305,699,997.81 306,190,496.80
Shares in associated companies 86,429,409.33 86,429,409.33
Other shares and holdings 178,311,058.30 184,224,295.61
Other receivables 5,002.00 35,222.52
1,105,824,282.73 1,112,258,239.55
Total non-current assets 1,527,694,080.81 1,540,992,704.38
CURRENT ASSETS
Inventories
Materials and consumables 50,227,009.35 48,604,835.96
Finished products 153,937,534.52 134,958,631.37
Advance payments 4,695,368.34 7,334,704.15
208,859,912.21 190,898,171.48
NON-CURRENT RECEIVABLES 11
Receivables from group companies
Receivables from group companies 19,511,624.05 79,726,537.97
19,511,624.05 79,726,537.97
Current receivables 11
Accounts receivables 136,478,748.63 118,264,583.91
Receivables from group companies 350,842,606.92 210,760,985.45
Receivables from associated companies 289,849.64 199,805.19
Other receivable 33,700,472.97 17,934,171.78
Prepayments and accrued income 7,928,830.79 24,299,436.72
529,240,508.95 371,458,983.05
Total receivables 548,752,133.00 451,185,521.02
Cash and cash equivalents 24,353,833.76 5,542,571.15
Total current assets 781,965,878.97 647,626,263.65
TOTAL ASSETS 2,309,659,959.78 2,188,618,968.03
EUR Note 31.12.2021 31.12.2020
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY 12
Share capital 557,881,540.40 557,881,540.40
Other reserves
Reserve for invested unrestricted equity 210,639,481.81 267,521,521.17
Value adjustment reserve 116,464,042.72 134,374,020.36
Profit/loss for previous financial periods 337,173,372.47 192,268,464.93
Profit/loss for the financial period 103,474,030.45 180,456,182.13
1,325,632,467.85 1,332,501,728.99
APPROPRIATIONS
Accumulated depreciation dierence 6 164,304,292.58 147,963,297.28
PROVISIONS 13 3,760,116.35 4,476,995.67
LIABILITIES
Non-current liabilities 15
Bonds 249,517,437.02 249,433,483.02
Loans from financial institutions 179,316,176.48 183,225,000.00
Advance payments 1,082,432.10 1,515,404.91
Deferred tax liability 8, 14 28,363,930.89 32,698,049.43
Liabilities to group companies 1,691,108.71 3,361,597.67
459,971,085.20 470,233,535.03
Current liabilities 16
Pension premium loans 3,908,823.52 0.00
Advance payments 2,521,860.77 1,756,007.02
Accounts payable 154,123,561.95 119,759,541.04
Liabilities to group companies 83,855,599.29 49,863,035.29
Liabilities to participating companies 704,619.73 379,727.97
Other liabilities 19,896,953.06 6,612,960.98
Accruals and deferred income 90,980,579.48 55,072,138.76
355,991,997.80 233,443,411.06
Total liabilities 815,963,083.00 703,676,946.09
Total shareholdes’ equity and
liabilities
2,309,659,959.78 2,188,618,968.03
132
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
EUR 1.1.–31.12.2021 1.1.–31.12.2020
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss before appropriations and taxes 144,782,607.94 227,163,140.37
Adjustments to profit/loss
a)
37,829,380.81 14,139,599.44
Interest received 5,625,765.02 8,356,030.38
Interest paid -10,387,182.18 -10,714,750.12
Dividends received 35,336.84 25,226,848.20
Other financial items, net -5,487,515.15 -1,478,801.92
Income taxes paid -13,806,989.91 -43,029,488.89
Change in net working capital
b)
60,201,890.97 -5,971,666.18
Net cash flow from operating activities 218,793,294.34 213,690,911.28
INVESTMENTS
Acquisition of other shares 0.00 -2,240,616.00
Investments in tangible and intangible assets -52,139,088.99 -43,947,568.55
Proceeds from disposal of other shares 210,000.00 65,008.00
Proceeds from sale of tangible and intangible assets 30,349,351.55 14,718,563.46
Increase and decrease of non-current receivables, net 60,245,134.44 -0.01
Total cash flow from investing activities 38,665,897.00 -31,404,613.10
CASH FLOW BEFORE FINANCIAL ACTIVITIES 257,459,191.34 182,286,298.18
Cash flow from financial activities
Dividend paid and other profit distribution -92,433,313.95 -85,323,059.04
Proceeds from non-current liabilities 0.00 33,225,000.00
Payment of non-current liabilities 0.00 -23,348,214.35
Increase or decrease in interest bearing current receivables, net -147,374,614.78 -105,605,473.93
Group contribution 1,160,000.00 1,050,000.00
-238,647,928.73 -180,001,747.32
CHANGES IN CASH AND CASH EQUIVALENTS 18,811,262.61 2,284,550.86
Cash and cash equivalents opening balance 5,542,571.15 3,258,020.29
Change in cash and cash equivalents 18,811,262.61 2,284,550.86
Cash and cash equivalents closing balance 24,353,833.76 5,542,571.15
a) Adjustments to profit/loss
Depreciations and impairment charges 49,811,731.10 51,242,262.32
Financial income and expenses 9,992,344.69 -28,540,210.02
Gains or losses on sale of fixed assets -21,257,815.66 -8,471,235.75
Change in provisions -716,879.32 -91,217.11
Total 37,829,380.81 14,139,599.44
b) Change in net working capital
Inventories -17,961,740.73 625,796.71
Change in current receivables, non-interest bearing -14,579,980.26 6,022,320.09
Change in current liabilities, non-interest bearing 92,743,611.96 -12,619,782.98
Total 60,201,890.97 -5,971,666.18
Parent company accounts
■ Cash flow statement
133
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Parent company accounting policies
1. Accounting policies
Metsä Board Oyj belongs to Metsä Group, whose parent company is
Metsäliitto Cooperative. Metsäliitto Cooperative’s registered oce is in
Helsinki. The Metsä Group prepares consolidated financial statements
which are available at the Group’s main oce at Revontulenpuisto 2 A,
FIN-02100 Espoo, Finland.
Metsä Board Oyj’s financial statements have been prepared in accord-
ance with Finnish Accounting Standards (FAS).
Metsä Board Plc has transactions with other companies in the Group.
These are described in more detail in the notes to the consolidated financial
statements in section 7.3. Transactions with related parties are based on
market prices.
Foreign currency transactions
Foreign exchange gains and losses have been booked to exchange gains/
losses under financial income and expense. Open and actual foreign
exchange dierences hedging sales are recorded immediately to financial
income and expenses in the income statement.
Derivative financial instruments
The company uses derivatives only for hedging against currency, interest
rate and commodity risks. Derivatives are valued at fair value in accord-
ance with the alternative treatment permitted by Chapter 5, Section 2a of
the Accounting Act.
The management of financial risks and the principles applied to derivatives
are explained in Notes 5.6 and 5.7 to the consolidated financial statements.
The unrealised fair value of cash flow hedges in hedge accounting is
recognised in the fair value reserve of the balance sheet to the extent that
they are eective. The unrealised fair value of derivatives not in hedge
accounting is recognised in the income statement. In addition, the com-
pany has recognised deferred tax assets and liabilities as a separate item in
the income statement and balance sheet during the financial year.
Metsä Board Oyj applies the fair value option under Chapter 5,
Section 2a of the Accounting Act also to the other shares and holdings.
Accordingly, the company has classified its shares in Pohjolan Voima
Oyj as financial assets at fair value through equity in accordance with
IFRS 9 and other equity instruments in financial assets valued at fair
value through profit or loss. The principles applied in determining
the fair value of shares and the sensitivity of fair value to various
valuation factors are described in Note 4.3 to the consolidated financial
statements.
Sales
Sales are calculated after deduction of indirect sales taxes, trade discounts
and other items adjusting sales.
Pensions and pension funding
Statutory pension security is handled by pension insurance companies
outside the Group. In addition to statutory pension security, some salaried
employees have supplementary pension arrangements which are either
insured at Pohjola or are an arranged through Metsäliitto Employees’
Pension Foundation or are anMetsäliitto Employees’ Pension Foundation
or are an unfunded liability of the company. Pension insurance premiums
have been accrued to correspond to the accrual-based wages and salaries
given in the financial statements.
Leasing
Lease payments are treated as rental expenses.
Income taxes
Tax expenses in the income statement consists of taxes based on the
taxable income for the period, taxes for the previous periods and deferred
tax assets and liabilities. Deferred tax assets and liabilities are calculated
on the temporary dierences between the carrying amount and the tax
base in accordance with the tax rate issued as at the balance sheet date.
Deferred taxes are calculated on the basis of the enacted tax rate.
Property, plant and equipment and depreciation
The carrying values of property, plant and equipment are based on original
acquisition costs less depreciation according to plan and impairment
losses.
Depreciation according to plan is based on the estimated useful life of the
asset as follows:
Buildings and constructions 20–40 years
Heavy machinery 20–40 years
Other heavy machines 15–20 years
Lightweight machinery and equipment 5–15 years
Other tangible assets 5–10 years
Depreciation is not recorded on the purchase cost of land and water.
Inventories
Inventories are measured at the lower of cost or net realisable value.
FIFO principle is observed in measuring inventories or, alternatively, the
weighted average cost method. Value of finished and semi-finished goods
comprises raw materials, direct wages and salaries, depreciation and
amortisation and other direct cost as well as a reasonable share of variable
and fixed production overhead cost calculated at normal level of produc-
tion. Net realisable value is the estimated selling price less the estimated
cost of completion and the estimated costs necessary to make the sale.
Provisions
Contingent costs and losses that are no longer generate corresponding
income and for which the parent company is obliged or committed and
whose monetary value can be reasonably estimated are recognised in the
income statement in line with the nature of the expense item and in the
mandatory provisions of the balance sheet.
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2. Sales by region
Finland 93,016,225.27 70,750,494.84
Other EU-countries 620,765,028.16 674,947,752.34
Other European countries 258,084,428.42 162,720,555.65
Other countries 417,137,893.36 353,879,694.19
Total 1,389,003,575.21 1,262,298,497.02
The transitional period for the United Kingdom’s secession from the EU ended on 31 December 2020. Turnover in the United Kingdom has been included in the Other European
countries group since 1 January 2021.
3. Exceptional items
Other operating income
Proceeds from selling of land 7,007,417.18 6,039,731.85
7,007,417.18 6,039,731.85
Employee costs
Refund from pension 0.00 -581,739.51
0.00 -581,739.51
Exceptional items in income statement 7,007,417.18 5,457,992.34
4. Other operating income
Rental income 1,051,500.39 1,053,576.83
Service revenue 14,641,881.77 14,038,890.30
Gains on disposal 21,367,326.91 8,561,323.35
Government grants and allowances 787,581.19 9,884,268.49
Scrap and waste sale 255,568.97 93,693.78
Others 2,370,681.92 2,537,835.33
40,474,541.15 36,169,588.08
5.
Operating expenses
External services
Distribution costs 149,817,832.97 139,431,896.81
Other external services 70,188,887.08 45,255,643.93
220,006,720.05 184,687,540.74
Employee costs
Wages and salaries for working hours 62,526,946.89 59,481,772.98
Share based payments 2,004,301.44 1,265,646.93
Social security expenses
Pension expenses 13,676,031.03 14,935,467.02
Other social security expenses 25,529,894.50 21,777,803.20
103,737,173.86 96,195,043.20
On December 31, 2021, 19 employees of the parent company Metsä Board Plc are covered by the share-based incentive plan. The system for the earning period 2019–2021 it is
possible to earn a total of 255,694 (net), for the earning period 2020–2022 a total of 494,010 (gross) and a total of 359,410 (gross) Metsä Board’s Series B earnings for the earning
period 2021–2023 shares.
Management salaries and fees and pension obligations are described in Note 3.2 to the consolidated financial statements.
Management’s share-based payments are described in section 3.3 of the notes to the consolidated financial statements.
The average number of personnel during the financial period in the parent company 1,219 1,218
Other operating expenses
Rental and other property costs 12,758,855.97 10,839,928.55
Purchases of services 64,063,910.41 79,978,131.97
Losses on disposal of non-current assets 109,511.25 90,087.60
Other expenses
Voluntary social costs 4,686,272.21 2,658,151.88
Fixed energy costs 9,688,348.45 9,367,338.76
Traveling expenses 230,641.07 345,627.91
Insurances 2,406,028.29 2,009,099.23
Advertising and marketing expenses 2,252,894.58 1,626,306.97
Others 4,856,843.32 4,657,408.45
101,053,305.55 111,572,081.32
Fees of principal auditor
Audit fees 196,064.00 196,064.00
Auditor's opinions 4,930.00 760.00
200,994.00 196,824.00
The principal auditor is KPMG Oy Ab.
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DEVELOPMENT
EUR 2021 2020
6. Depreciation and impairment charges
Planned depreciation
Intangible rights 1,487,864.06 1,641,719.87
Other intangible assets 87,6 67. 88 120,150.34
Buildings and constructions 8,469,149.47 8,742,569.99
Machinery and equipment 38,997,457.55 39,975,101.43
Other tangible assets 769,592.14 762,720.69
Total 49,811,731.10 51,242,262.32
Change in depreciation dierence 16,340,995.30 9,066,231.37
Total depreciation 66,152,726.40 60,308,493.69
Depreciation dierence at the beginning of the financial year 147,963,297.28 138,897,065.91
Change in depreciation dierences 16,340,995.30 9,066,231.37
Depreciation dierence at the end of the financial year 164,304,292.58 147,963,297.28
7. Financial income and expenses
Income from investments in non-current assets
Dividend income
From Group companies 34,481.84 25,224,868.20
From others 855.00 1,980.00
35,336.84 25,226,848.20
Interest income on investments in non-current assets
From Group companies 5,580,610.15 6,331,028.39
5,580,610.15 6,331,028.39
Total income from non-current assets 5,615,946.99 31,557,876.59
Other interest and financial income
Interest income from Group companies 29,463.12 2,022,649.57
Other interest income 15,691.75 2,352.42
Other financial income 336.80 262.07
45,491.67 2,025,264.06
Exchange rate dierences recognised in financial income and expenses
Exchange rate dierences on sales 3,481,677.43 -2,350,438.98
Exchange rate dierences on purchases -545,443.31 358,683.24
Exchange rate dierences on financing -7,728,467.37 8,255,005.43
-4,792,233.25 6,263,249.69
Impairment losses on investments in non-current assets 0.00 5,316.53
Interest and other financial expenses
Interest expenses for the same group companies -1,011,035.11 -891,984.39
Other interest expenses -8,902,440.98 -9,387,119.08
Other financial expenses -948,074.01 -1,032,393.38
Total interest expenses and other financial expenses -10,861,550.10 -11,311,496.85
Financial income and expenses total -9,992,344.69 28,540,210.02
8. Income taxes
Taxes for the financial year 25,557,347.96 38,781,516.74
Taxes for previous financial years -341,778.52 966.71
Deferred taxes 143,375.86 18,243.42
25,358,945.30 38,800,726.87
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9. Intangible and tangible assets
Intangible rights
Acquisition costs 1.1. 117,493,533.02 117,255,065.98
Increases 458,238.69 9,946,350.49
Decreases -7,529,650.20 -9,707,883.45
Transfers between items 635,869.44 0.00
Acquisition costs 31.12. 111,057,990.95 117,493,533.02
Accumulated depreciation and impairment charges 1.1. -104,835,551.39 -102,976,859.65
Accumulated depreciation of deductions and transfers 131,353.82 -216,971.87
Depreciation and write-downs for the financial period -1,487,864.06 -1,641,719.87
Accumulated depreciation and impairment 31.12. -106,192,061.63 -104,835,551.39
Book value 31.12. 4,865,929.32 12,657,981.63
Goodwill
Acquisition costs 1.1. 24,970,634.39 24,970,634.39
Acquisition costs 31.12. 24,970,634.39 24,970,634.39
Accumulated depreciation and impairment charges 1.1. -24,970,634.39 -24,970,634.39
Accumulated depreciation and impairment 31.12. -24,970,634.39 -24,970,634.39
Book value 31.12. 0.00 0.00
Other intangible assets
Acquisition costs 1.1. 7,878,550.92 15,724,698.18
Decreases -31,574.17 -7,846,147.26
Acquisition costs 31.12. 7,846,976.75 7,878,550.92
Accumulated depreciation and impairment charges 1.1. -7,512,138.36 -15,238,135.28
Accumulated depreciation of deductions and transfers 31,574.17 7,846,147.26
Depreciation and write-downs for the financial period -87,667.88 -120,150.34
Accumulated depreciation and impairment 31.12. -7,568,232.07 -7,512,138.36
Book value 31.12. 278,744.68 366,412.56
Advance payments and work in progress
Acquisition costs 1.1. 635,869.44 1,383,677.21
Increases 1,020,133.10 45,880.00
Transfers between items -635,869.44 -793,687.77
Acquisition costs 31.12. 1,020,133.10 635,869.44
Intangible assets total
Acquisition costs 1.1. 150,978,587.77 159,334,075.76
Increases 1,478,371.79 9,992,230.49
Decreases -7,561,224.37 -17,554,030.71
Transfers between items 0.00 -793,687.77
Acquisition costs 31.12. 144,895,735.19 150,978,587.77
Accumulated depreciation and impairment charges 1.1. -137,318,324.14 -143,185,629.32
Accumulated depreciation of deductions and transfers 162,927.99 7,629,175.39
Depreciation and write-downs for the financial year -1,575,531.94 -1,761,870.21
Accumulated depreciation and impairment charges 31.12. -138,730,928.09 -137,318,324.14
Book value 31.12. 6,164,807.10 13,660,263.63
Land and water areas
Acquisition costs 1.1. 31,282,434.04 28,976,841.96
Increases 3,000.00 2,681,077.36
Decreases -1,793,728.26 -375,485.28
Acquisition costs 31.12. 29,491,705.78 31,282,434.04
Accumulated depreciation and impairment charges 1.1. -20.98 -20.98
Accumulated depreciation and impairment charges 31.12. -20.98 -20.98
Book value 31.12. 29,491,684.80 31,282,413.06
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DEVELOPMENT
EUR 2021 2020
Buildings and constructions
Acquisition costs 1.1. 308,253,184.06 295,270,714.76
Opening balance adjustment 0.00 6,458,935.50
Increases 1,510,233.98 4,690,025.74
Decreases -598,747.98 -4,550,431.22
Transfers between items 1,922,917.63 6,383,939.28
Acquisition costs 31.12. 311,087,587.69 308,253,184.06
Accumulated depreciation and impairment charges 1.1. -179,513,326.23 -168,841,361.55
Opening balance adjustment 0.00 -6,458,935.50
Accumulated depreciation of deductions and transfers 598,747.98 4,529,540.81
Depreciation and write-downs for the financial year -8,469,149.47 -8,742,569.99
Accumulated depreciation and impairment 31.12. -187,383,727.72 -179,513,326.23
Book value 31.12. 123,703,859.97 128,739,857.83
Machinery and equipment
Acquisition costs 1.1. 1,240,170,683.48 1,155,859,703.19
Opening balance adjustment 0.00 87,438,189.37
Increases 31,110,627.78 15,911,955.47
Decreases -7,582,216.10 -37,256,639.55
Transfers between items 17,456,003.66 18,217,475.00
Acquisition costs 31.12. 1,281,155,098.82 1,240,170,683.48
Accumulated depreciation and impairment charges 1.1. -1,012,826,239.17 -922,669,587.92
Opening balance adjustment 0.00 -87,109,446.12
Accumulated depreciation of deductions and transfers 7,582,216.10 36,927,896.30
Depreciation and write-downs for the financial year -38,997,457.55 -39,975,101.43
Accumulated depreciation and impairment 31.12. -1,044,241,480.62 -1,012,826,239.17
Book value 31.12. 236,913,618.20 227,344,444.31
Other tangible assets
Acquisition costs 1.1. 13,862,872.09 13,752,403.75
Increases 341,745.97 346,120.38
Decreases 0.00 -555,452.57
Transfers between items 163.91 319,800.53
Acquisition costs 31.12. 14,204,781.97 13,862,872.09
Accumulated depreciation and impairment charges 1.1. -6,797,117.65 -6,589,849.53
Accumulated depreciation of deductions and transfers 0.00 555,452.57
Depreciation and write-downs for the financial year -769,592.14 -762,720.69
Accumulated depreciation and impairment 31.12. -7,566,709.79 -6,797,117.65
Book value 31.12. 6,638,072.18 7,065,754.44
Advance payments and work in progress
Acquisition costs 1.1. 20,641,731.56 31,410,056.94
Increases 17,695,109.47 13,359,201.66
Transfers between items -19,379,085.20 -24,127,527.04
Acquisition costs 31.12. 18,957,755.83 20,641,731.56
Total tangible assets
Acquisition costs 1.1. 1,614,210,905.23 1,525,269,720.60
Opening balance adjustment 0.00 93,897,124.87
Increases 50,660,717.20 36,988,380.61
Decreases -9,974,692.34 -42,738,008.62
Transfers between items 0.00 793,687.77
Acquisition costs 31.12. 1,654,896,930.09 1,614,210,905.23
Accumulated depreciation and impairment charges 1.1. -1,199,136,704.03 -1,098,100,819.98
Opening balance adjustment 0.00 -93,568,381.62
Accumulated depreciation of deductions and transfers 8,180,964.08 42,012,889.68
Depreciation and write-downs for the financial year -48,236,199.16 -49,480,392.11
Accumulated depreciation and impairment 31.12. -1,239,191,939.11 -1,199,136,704.03
Book value 31.12. 415,704,990.98 415,074,201.20
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10. Investments
Shares in Group companies
Acquisitions costs 1.1. 535,378,815.29 535,378,815.29
Acquisitions costs 31.12. 535,378,815.29 535,378,815.29
Shares in participating companies
Acquisitions costs 1.1. 86,429,409.33 86,429,409.33
Acquisitions costs 31.12. 86,429,409.33 86,429,409.33
Other shares and holdings
Acquisitions costs 1.1. 184,224,295.61 252,435,976.80
Increases 0.00 2,240,616.00
Decreases -5,913,237.31 -70,452,297.19
Acquisitions costs 31.12. 178,311,058.30 184,224,295.61
Total investments and holdings
Acquisitions costs 1.1. 806,032,520.23 874,244,201.42
Increases 0.00 2,240,616.00
Decreases -5,913,237.31 -70,452,297.19
Acquisitions costs 31.12. 800,119,282.92 806,032,520.23
Receivables from Group companies
Acquisitions costs 1.1. 306,190,496.80 301,618,572.70
Increases 0.00 4,571,924.10
Decreases -490,498.99 0.00
Acquisitions costs 31.12. 305,699,997.81 306,190,496.80
Other receivables
Acquisitions costs 1.1. 35,222.52 35,222.52
Decreases -30,220.52 0.00
Acquisitions costs 31.12. 5,002.00 35,222.52
Receivables total
Acquisitions costs 1.1. 306,225,719.32 301,653,795.22
Increases 0.00 4,571,924.10
Decreases -520,719.51 0.00
Acquisitions costs 31.12. 305,704,999.81 306,225,719.32
Investments total
Acquisitions costs 1.1. 1,112,258,239.55 1,175,897,996.64
Increases 0.00 6,812,540.10
Decreases -6,433,956.82 -70,452,297.19
Acquisitions costs 31.12. 1,105,824,282.73 1,112,258,239.55
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EUR 2021 2020
11. Receivables
Non-current receivables
Receivables from group companies
Loans receivables 19,511,624.05 79,726,537.97
19,511,624.05 79,726,537.97
Total non-current receivables 19,511,624.05 79,726,537.97
Current receivables
Receivables from group companies
Accounts receivable 42,204,078.56 43,898,813.17
Loans receivables 278,895,200.81 131,520,586.04
Other receivables -536,314.82 1,170,305.62
Prepayments and accrued income 30,279,642.37 34,171,280.62
350,842,606.92 210,760,985.45
Receivables from participating companies
Accounts receivable 289,849.64 199,805.19
289,849.64 199,805.19
Receivables from others
Accounts receivable 136,478,748.63 118,264,583.91
Other receivables 33,700,472.97 17,934,171.78
Prepayments and accrued income 7,928,830.79 24,299,436.72
178,108,052.39 160,498,192.41
Total current receivables 529,240,508.95 371,458,983.05
Accrued income from group companies, current, specification
Derivatives 28,920,689.87 32,539,914.86
Accrued interests 1,358,952.50 1,631,365.76
30,279,642.37 34,171,280.62
Accrued income from others, current, specification
Accrued personnel costs 41,175.43 6,471.75
Energy and other taxes 2,474,456.57 12,583,236.96
Others 5,413,198.79 11,709,728.01
7,928,830.79 24,299,436.72
Total receivables 548,752,133.00 451,185,521.02
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12. Shareholders’ equity
Restricted equity
Share capital 1.1.
A-shares 51,607,529.31 51,922,153.80
B-shares 506,274,011.09 505,959,386.60
557,881,540.40 557,881,540.40
Conversion of A shares into B shares
A-shares -133,346.95 -314,624.49
B-shares 133,346.95 314,624.49
0.00 0.00
Fair value reserve 1.1. 134,374,020.36 171,598,515.80
Changes -17,909,977.64 -37,224,495.44
Fair value reserve 31.12. 116,464,042.72 134,374,020.36
674,345,583.12 692,255,560.76
Unrestricted equity
Reserve for invested unrestricted equity 1.1. 267,521,521.17 317,293,305.61
Return of invested unrestricted equity -56,882,039.36 -49,771,784.44
Reserve for invested unrestricted equity 31.12. 210,639,481.81 267,521,521.17
Retained earnings 1.1. 372,724,647.06 227,819,739.53
Dividends -35,551,274.60 -35,551,274.60
Profit for the financial period 103,474,030.45 180,456,182.13
Retained earnings 31.12. 440,647,402.91 372,724,647.06
651,286,884.72 640,246,168.23
Equity total 31.12 1,325,632,467.84 1,332,501,728.99
Distributable funds
Reserve for invested unrestricted equity 210,639,481.81 267,521,521.17
Profit from previous financial periods 337,173,372.46 192,268,464.93
Profit for the financial period 103,474,030.45 180,456,182.13
Distributable funds 651,286,884.72 640,246,168.23
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13. Provisions
Provisions for pension
1.1. 843,168.00 843,168.00
31.12. 843,168.00 843,168.00
Provisions for unemployment pension cost
1.1. 196,086.09 242,063.20
Decrease -23,371.43 -45,977.11
31.12. 172,714.66 196,086.09
Provisions for environmental obligations
1.1. 3,437,741.58 3,482,981.58
Increase 29,091.00 29,091.00
Decrease -722,598.89 -74,331.00
31.12. 2,744,233.69 3,437,741.58
Total provisions
1.1. 4,476,995.67 4,568,212.78
Increase 29,091.00 29,091.00
Decrease -745,970.32 -120,308.11
31.12. 3,760,116.35 4,476,995.67
14. Deferred tax assets and liabilities
Deferred tax assets
Mandatory provisions 752,023.27 895,399.14
752,023.27 895,399.14
Deferred tax liabilities
Valuation of Pohjolan Voima Oyj shares at fair value 27,247,173.05 28,407,818.26
Financial instruments 1,868,781.12 5,185,630.30
29,115,954.17 33,593,448.56
Deferred tax assets (+) and liabilities (-), net -28,363,930.90 -32,698,049.42
The deferred tax liability for accrued depreciation in 2021 was EUR 32.9 million (29.6).
15. Non-current liabilities
Liabilities to group companies
Accrued liabilities
Derivatives 1,691,108.43 3,361,597.67
1,691,108.43 3,361,597.67
Other liabilities
Bonds 249,517,437.02 249,433,483.02
Loans from financial institutions 179,316,176.48 183,225,000.00
Deferred tax liabilities 28,363,930.89 32,698,049.43
Advance payments 1,082,432.10 1,515,404.91
458,279,976.49 466,871,937.36
Non-current liabilities total 459,971,084.92 470,233,535.03
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Bond and debentures
Bond Nominal value Interest % 2021 2020
2017–2027 250,000,000.00 2.75 249,517,437.02 249,433,483.02
250,000,000.00 249,517,437.02 249,433,483.02
Metsä Board Oyj has an undrawn EIB loan agreement of EUR 125 million signed in 2020 for Husum’s investments and a EUR 100 million loan agreement guaranteed by Finnvera, of which
EUR 33.2 million has been drawn down and EUR 66.8 million has not been drawn down.
Non-current liabilities and repayment
Liabilities to
group companies Bonds
Loans from
financial
institutions
Other
loans Total
2022 0.00 0.00
2023 3,908,823.52 3,908,823.52
2024 3,908,823.52 3,908,823.52
2025 153,908,823.52 153,908,823.52
2026 3,908,823.52 3,908,823.52
2027– 249,517,437.02 13,680,882.40 263,198,319.42
Total 0.00 249,517,437.02 179,316,176.48 0.00 428,833,613.50
EUR 2021 2020
16. Current liabilities
Liabilities from Group companies
Accounts payable 63,200,799.16 44,124,848.19
Accruals and deferred income 20,654,800.27 5,738,187.10
83,855,599.43 49,863,035.29
Liabilities from participating interests
Accounts payable 704,619.73 379,727.97
704,619.73 379,727.97
Liabilities from other
Premium pension loans 3,908,823.52 0.00
Advance payment 2,521,860.77 1,756,007.02
Accounts payable 154,123,561.95 119,759,541.04
Other liabilities 19,896,953.06 6,612,960.98
Accruals and deferred income 90,980,579.48 55,072,138.76
271,431,778.78 183,200,647.80
Total current liabilities 355,991,997.94 233,443,411.06
Accruals and deferred income to group companies, current, specification
Derivatives 18,589,770.35 4,749,964.04
Others 2,065,029.92 988,223.06
20,654,800.27 5,738,187.10
Accruals and deferred income, current, external
Personnel expenses 27,813,139.51 24,385,420.58
Accruals of purchases 28,729,281.88 7,998,028.05
Discounts 18,065,576.49 15,023,668.87
Interests 2,093,172.00 2,093,172.00
Taxe s 11,623,372.28 0.00
Others 2,656,037.32 5,571,849.26
90,980,579.48 55,072,138.76
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17. Financial Instruments
Financial derivatives 2021
Nominal value Fair value Fair value
EUR
Derivative
assets
Derivative
liabilities Total
Fair value
through
profit and loss
Fair value
through fair
value reserve
Interest rate swaps 100,000,000.00 1,691,108.57 -1,691,108.57 0.00 -1,691,108.43
Total interest rate derivatives 100,000,000.00 1,691,108.57 -1,691,108.57 0.00 -1,691,108.43
Currency forward agreements 1,066,871,526.94 2,033,435.72 18,507,293.72 -16,473,858.00 -157,510.75 -16,316,347.25
Currency option agreements 0.00 0.00 0.00 0.00 0.00 0.00
Currency derivates total 1,066,871,526.94 2,033,435.72 18,507,293.72 -16,473,858.00 -157,510.75 -16,316,347.25
Electricity derivatives 0.00 0.00 0.00 0.00 0.00 0.00
Oil derivatives 17,103,868.80 3,658,212.43 4,129.93 3,654,082.50 0.00 3,654,082.50
Other commodity derivatives 14,030,062.80 23,229,041.72 78,346.70 23,150,695.02 0.00 23,150,695.02
Commodity derivatives 31,133,931.60 26,887,254.15 82,476.63 26,804,777.52 0.00 26,804,777.52
Derivatives total 1,198,005,458.54 28,920,689.87 20,280,878.92 8,639,810.95 -157,510.75 8,797,321.84
Financial derivatives 2020
Nominal value Fair value Fair value
EUR
Derivative
assets
Derivative
liabilities Total
Fair value
through
profit and loss
Fair value
through fair
value reserve
Interest rate swaps 100,000,000.00 3,361,597.67 -3,361,597.67 0.00 -3,361,597.67
Total interest rate derivatives 100,000,000.00 3,361,597.67 -3,361,597.67 0.00 -3,361,597.67
Currency forward agreements 959,055,983.54 28,982,108.06 4,588,914.69 24,393,193.37 -479,508.43 24,872,701.80
Currency option agreements 0.00 0.00 0.00 0.00 0.00 0.00
Currency derivates total 959,055,983.54 28,982,108.06 4,588,914.69 24,393,193.37 -479,508.43 24,872,701.80
Electricity derivatives 1,010,304.05 29,500.95 39,025.00 -9,524.05 0.00 -9,524.05
Oil derivatives 12,278,325.00 1,322,834.33 122,024.35 1,200,809.98 0.00 1,200,809.98
Other commodity derivatives 7,181,221.20 2,205,471.52 0.00 2,205,471.52 0.00 2,205,471.52
Commodity derivatives 20,469,850.25 3,557,806.80 161,049.35 3,396,757.45 0.00 3,396,757.45
Derivatives total 1,079,525,833.79 32,539,914.86 8,111,561.71 24,428,353.15 -479,508.43 24,907,861.58
All derivative agreements of Metsä Board Oyj have been entered into for hedging purpose, and cash flow hedge accounting according to IFRS 9 has been applied in major part of the agree-
ments within IFRS financial statements. Only the part of currency derivatives designated as hedges of accounts receivables and accounts payables is not directed to hedge accounting. Inte-
rest rate derivatives are interest rate swaps maturing in 1–4 years and entered into to hedge the floating rate interest payments. Currency derivatives contracts concluded to hedge currency
cash flows mature fully during 2021. Commodity derivatives are electricity forwards, natural gas forwards, propane forwards and gasoil and heavy fuel oil forwards concluded to hedge the
cash flows arising from purchases of these commodities. Commodity forwards mature fully during 2021. A more detailed description of financial risk management and the principles applied
to derivative contracts is included in note 5.6 and 5.7 of the consolidated Group accounts.
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The fair value hierarchy of financial assets and liabilities 2021
EUR Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other shares and holdings 178,311,058.30 178,311,058.30
Derivative financial assets 4,195,295.69 24,725,394.18 28,920,689.87
Financial liabilities measured at fair value
Derivative financial liabilities 82,476.63 20,198,402.29 20,280,878.92
The fair value hierarchy of financial assets and liabilities 2020
EUR Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other shares and holdings 184,224,295.61 184,224,295.61
Derivative financial assets 2,234,972.47 30,304,942.39 32,539,914.86
Financial liabilities measured at fair value
Derivative financial liabilities 39,025.14 8,072,536.57 8,111,561.71
The principles applied to classification of financial assets and liabilities valued at fair value are described in Notes 5.6 and 5.7 of the Metsä Board consolidated financial statements.
18. Disputes, legal proceedings and commitments
Disputes and legal proceedings
Disputes are presented in Note 8.1 of the consolidated financial statements.
Commitments and contingencies
EUR 2021 2020
For own liabilities
Real estate mortgages 0.00 192,779,000.00
For aliated companies
Guarantees 2,045,966.00 3,455,798.00
For associated and joint ventures
Guarantees 0.00 78,815.00
Leasing commitments
Payments due in following 12 months 1,939,543.43 1,579,013.73
Payments due later than 1 year 4,913,625.50 5,334,441.43
Total
Real estate mortgages 0.00 192,779,000.00
Guarantees 2,045,966.00 3,534,613.00
Leasing commitments 6,853,168.93 6,913,455.16
Total commitments 8,899,134.93 203,227,068.16
Commitments related to property, plant and equipment
Payments due in following 12 months 5,793,673.55 0.00
Payments due later 1,856,148.10 0.00
7,649,821.65 0.00
19. Shares and holdings
Shares and holdings are presented in Note 7.2. of consolidated financial statements.
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The Board’s proposal to the Annual General Meeting for the
distribution of funds
The distributable funds of the company are EUR 651,286,884.72 of which retained earnings constitute EUR
337,173,372.46 and profit for the period EUR 103,474,030.45.
The Board of Directors proposes the following to the Annual General Meeting regarding the distribution of
funds:
Dividend of EUR 0.41 per share be paid, or in total 145,760,225.86
To be left in the unrestricted shareholders' equity 505,526,658.86
Distributable funds of the company 651,286,884.72
The Board of Directors proposes that the dividend will be paid on 7th April, 2022.
No material changes have been taken place in respect of the company’s financial position after the balance
sheet date. The liquidity of the company is good, and in the opinion of the Board of Directors, the proposed
profit distribution would not compromise the liquidity of the company.
Espoo 10th February 2022
Ilkka Hämälä Hannu Anttila Raija-Leena Hankonen-Nybom
Erja Hyrsky Kirsi Komi Jussi Linnaranta
Jukka Moisio Timo Saukkonen Veli Sundbäck
Mika Joukio
CEO
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Auditor’s Report
To the Annual General Meeting of Metsä Board Corporation
■ Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Metsä Board Corporation
(business identity code 0635366-7) for the year ended 31 December, 2021.
The financial statements comprise the consolidated balance sheet, state-
ment of comprehensive income, statement of changes in equity, statement
of cash flows and notes, including a summary of significant accounting
policies, as well as the parent company’s balance sheet, income statement,
statement of cash flows and notes.
In our opinion
• the consolidated financial statements give a true and fair view of the
group’s financial position, financial performance and cash flows in
accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU
• the financial statements give a true and fair view of the parent compa-
ny’s financial performance and financial position in accordance with the
laws and regulations governing the preparation of financial statements
in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit
Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We are independent of the parent company and of the group companies
in accordance with the ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fulfilled our other ethical respon-
sibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that
we have provided to the parent company and group companies are in
compliance with laws and regulations applicable in Finland regarding these
services, and we have not provided any prohibited non-audit services
referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit
services that we have provided have been disclosed in note 2.4 to the
consolidated financial statements.
We believe that the audit evidence we have obtained is sucient and
appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The
materiality is determined based on our professional judgement and is used
to determine the nature, timing and extent of our audit procedures and to
evaluate the eect of identified misstatements on the financial statements
as a whole. The level of materiality we set is based on our assessment of
the magnitude of misstatements that, individually or in aggregate, could
reasonably be expected to have influence on the economic decisions of
the users of the financial statements. We have also taken into account mis-
statements and/or possible misstatements that in our opinion are material
for qualitative reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. The
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Valuation of tangible and intangible assets (Refer to notes 4.1 and 4.2 to the consolidated financial statements)
Tangible and intangible assets total EUR 954 million and represent 33
percent of the consolidated total assets. The carrying value of construc-
tion in progress under the tangible assets amounts to EUR 306 million.
Tangible and intangible assets are allocated to cash-generating units
and tested for impairment annually or more frequently should there be
an indication of impairment.
Determining the key assumptions used in the cash flow forecasts
underlying the impairment tests requires management judgment.
Due to the significant carrying values involved, valuation of tangible
and intangible assets is determined a key audit matter.
Our audit procedures included evaluation of the appropriateness of the
capitalization and depreciation principles applied as well as testing of
the financial controls over investments.
We also assessed the key assumptions used in the impairment tests
by reference to the budgets approved by the parent company’s Board
of Directors, data external to the Group and our own views. We involved
KPMG valuation specialists when assessing the mathematical accuracy
of the calculations, as well as comparing the assumptions to externally
available market and industry data.
In addition, we considered the appropriateness of the disclosures
regarding the tangible and intangible assets.
Auditor’s Report
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significant risks of material misstatement referred to in the EU Regulation
No 537/2014 point (c) of Article 10(2) are included in the description of key
audit matters below.
We have also addressed the risk of management override of internal
controls. This includes consideration of whether there was evidence of
management bias that represented a risk of material misstatement due to
fraud.
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for
the preparation of consolidated financial statements that give a true and
fair view in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU, and of financial statements that give a true
and fair view in accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director are also
responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s
and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern
basis of accounting. The financial statements are prepared using the going
concern basis of accounting unless there is an intention to liquidate the
parent company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the
Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with good
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Valuation of inventories (Refer to note 4.4 to the consolidated financial statements)
Inventory management, stocktaking routines and pricing of inventories
are key factors in the valuation of inventories. The Group’s carrying value
of inventories was EUR 383 million at the end of the financial year.
The valuation of inventories involves management estimates in
relation to potentially obsolete inventory, as well as to fluctuations in the
market prices of finished goods.
The valuation of inventories has a significant impact on the profit and
loss account and therefore it is determined as a key audit matter.
We evaluated the appropriateness of the accounting policies by
reference to IFRS standards, as well as the functionality of the key IT
systems of inventory management.
We tested the controls over inventory management, accuracy of
inventory amounts and valuation of inventories, as well as performed
substantive audit procedures relating to the valuation of inventories to
test the accuracy of inventory valuation. We also followed the execution
of certain stocktaking routines during the financial year.
Financial contracts and hedging instruments
(Refer to notes 5.5, 5.6 and 5.7 to the consolidated financial statements)
The financial liabilities amount to EUR 447 million, accounting for 15
percent of the consolidated balance sheet. In addition, the Group has
o-balance sheet committed credit facility agreements amounting to
EUR 392 million.
The Group hedges financial risks with interest rate and foreign
currency derivatives and their nominal values amounted to EUR 1,167
million at the end of the financial year.
Due to the significance of the financial and derivative contracts and
large number of transactions, the financial contracts and hedging
instruments are determined as a key audit matter.
Our audit procedures included evaluation of the recognition and measu-
rement principles applied to financial instruments for appropriateness
in relation to IFRS requirements, as well as testing of controls over the
accuracy and valuation of financial instruments.
As part of our year-end audit procedures we tested the appropri-
ateness of valuations by using various analysis, as well as selecting
transactions for testing on a sample basis.
In addition, we evaluated the adequacy of the disclosures relating to
financial instruments.
Controls over financial reporting and related IT systems
The IT control environment relating to the financial reporting process
and the application controls of individual IT systems have an impact on
the selected audit approach.
As the consolidated financial statements are based on extensive num-
ber of data flows from multiple IT systems, consequently the financial
reporting control environment is determined as a key audit matter.
Our audit procedures included evaluation of the financial reporting
process and related control environment, as well as testing of the eec-
tiveness of controls including general IT controls. Our audit procedures
focused on testing the reconciliation and approval controls as well as on
evaluating the administration of access rights.
Our audit procedures extensively consisted of several substantive
procedures as well as data analysis relating to the most significant
balances on the income statement and on the balance sheet.
148
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
auditing practice will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the
financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that
is sucient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the eectiveness of
the parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made
by management.
• Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’s use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on
the parent company’s or the group’s ability to continue as a going con-
cern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events
or conditions may cause the parent company or the group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events so that
the financial statements give a true and fair view.
• Obtain sucient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to
express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence,
and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of
such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on 28
March 2012, and our appointment represents a total period of uninter-
rupted engagement of 10 years.
Other Information
The Board of Directors and the Managing Director are responsible for the
other information. The other information comprises the report of the Board
of Directors and the information included in the Annual Report, but does
not include the financial statements and our auditor’s report thereon. We
have obtained the report of the Board of Directors prior to the date of this
auditor’s report, and the Annual Report is expected to be made available to
us after that date. Our opinion on the financial statements does not cover
the other information.
In connection with our audit of the financial statements, our respon-
sibility is to read the other information identified above and, in doing so,
consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. With respect to the report of the Board
of Directors, our responsibility also includes considering whether the
report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors
is consistent with the information in the financial statements and the
report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed on the other information that
we obtained prior to the date of this auditor’s report, we conclude that
there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Other opinions
We support that the financial statements should be adopted. The proposal
by the Board of Directors regarding the treatment of distributable funds is
in compliance with the Limited Liability Companies Act. We support that
the Board of Directors of the parent company and the Managing Director
should be discharged from liability for the financial period audited by us.
Helsinki, February 10, 2022
KPMG Oy Ab
Kirsi Jantunen
Authorized Public Accountant, KHT
149
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Shares and shareholders
Metsä Board’s shares
Metsä Board has two series of shares. At the
end of 2021, there were 32,802,175 A shares
and 322,710,571 B shares. Each series A share
entitles its holder to twenty (20) votes at a
General Meeting of Shareholders, and each
series B share entitles the holder to one (1)
vote. On 31 December 2021, the company’s
share capital was EUR 557,881,540.40. Metsä
Board’s A shares can be converted to B shares if
a shareholder or a representative of the nominee
registered shares makes a written request for
the conversion to the company. During the
review period, a total of 84,976 of Metsä Board
Corporation’s A shares were converted to B
shares. Metsä Board did not receive notifications
of major holdings in 2021. The company does
not hold any treasury shares.
Basic information on Metsä Board’s shares
Metsä Board’s A share Metsä Board’s B share
Listing Nasdaq Helsinki Nasdaq Helsinki
Date of listing 2 January 1987 2 January 1987
Market cap segment Large Cap Large Cap
Ticker symbol METSA METSB
ISIN code FI0009000640 FI0009000665
Reuters code METSA.HE METSB.HE
Bloomberg code METSA FH METSB FH
Number of shares 31 Dec 2021 32,802,175 322,710,571
Trading on the Nasdaq Helsinki in 2021 (2020)
Metsä Board’s A share Metsä Board’s B share
Closing price on 31 December, EUR 9.38 (8.64) 8.61 (8.62)
Lowest price, EUR 8.50 (4.80) 7.50 (4.47)
Highest price, EUR 11.00 (8.80) 11.01 (8.79)
Average price, EUR 9.48 (6.88) 9.14 (6.12)
Average daily trading volume, no. of shares 7,153 (6,980 ) 389,117 (616,002)
Total trading volume, no. of shares 1,802,589 (1,758,863) 98,057,575 (155,232,570)
Market capitalisation, EUR million 308 (300) 2,779 (2,800)
Share price development 2021
Source: Euroland
12.0
11.0
10.0
9.0
8.0
7.0
6.0
2.4
2.0
1.6
1.2
0.8
0.4
0.0
EUR Million shares
Metsä Board A
Metsä Board B
OMX Helsinki Portfolio Index (scaled)
Trading volume
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Shares and shareholders
Major shareholders, 31 December 2021
1)
A series B series Total shares Votes
Shareholders No. of shares No. of shares No. of shares % %
1 Metsäliitto Cooperative 25,767,605 144,831,768 170,599,373 47.99 67.4 5
2 Varma Pension Insurance Company 2,203,544 15,041,485 17,245,029 4.85 6.04
3 Ilmarinen Mutual Pension Insurance Company 1,250,000 10,221,394 11,471,394 3.23 3.60
4 Etola Erkki Olavi 0 6,150,000 6,150,000 1.73 0.63
5 Elo Mutual Pension Insurance Company 0 3,789,094 3,789,094 1.07 0.39
6 Evli Finnish Small Cap Fund 0 3,030,000 3,030,000 0.85 0.31
7 OP Finland Small Firms Fund 0 3,011,356 3,011,356 0.85 0.31
8 State Pension Fund 0 3,000,000 3,000,000 0.84 0.31
9 OP Finland 0 2,882,522 2,882,522 0.81 0.29
10 OP Life Assurance Company Ltd 0 1,094,762 1,094,762 0.31 0.13
11 Danske Invest Finnish Equity Fund 0 1,000,000 1,000,000 0.28 0.10
12 Etola Mikael Kristian 0 880,000 880,000 0.25 0.09
13 Etola Markus Eeriki 0 850,000 850,000 0.24 0.09
14 Veritas Pension Insurance Company Ltd. 0 850,000 850,000 0.24 0.09
15 Säästöpankki Kotimaa Mutual Fund 0 827,600 827,600 0.23 0.08
16 Sr Nordea Pro Suomi 0 810,737 810,737 0.23 0.08
17 Maa- ja Metsätaloustuottajain Keskusliitto MTK ry 756,551 778,403 11,732,872 0.22 1.20
18 Sr Aktia Capital 0 754,841 754,841 0.21 0.08
19 FIM Fenno Sijoitusrahasto 0 738,097 738,097 0.21 0.07
20 Säästöpankki Pienyhtiöt 0 731,643 731,643 0.21 0.07
1)
Shareholders in the book entry system
Shares
A share B share
Number of shares
Number of
Shareholders %
Number of
shares %
Number of
Shareholders %
Number of
shares %
1–10 1,706 18.17 9,609 0.03 3,972 7.29 25,319 0.01
11–100 3,732 39.76 188,550 0.58 15,504 28.45 808,167 0.25
101–1,000 3,405 36.27 1,234,040 3.76 24,623 45.19 9,827,424 3.05
1,001–10,000 520 5.54 1,200,988 3.66 9,416 17.28 25,978,734 8.05
10,001–100,000 20 0.21 371,288 1.13 867 1.59 19,857,614 6.15
100,001– 4 0.04 29,797,700 90.84 105 0.19 266,213,313 82.49
Total 9,387 100.00 32,802,175 100.00 54,487 100.00 322,710,571 100.00
Split of shareholdings and voting rights, 31 December 2021
SPLIT OF
SHAREHOLDINGS
%
SPLIT OF
VOTING RIGHTS
%
Metsäliitto Cooperative 48
Finnish institutions 19
Finnish private investors 19
Foreign owners* 14
Metsäliitto Cooperative 67
Finnish institutions 16
Finnish private investors 12
Foreign owners* 5
* includes nominee registered * includes nominee registered
151
60
50
40
30
20
10
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Shareholdings of the members of the Board of Directors
and CEO on 31 December 2021
Holding
Ilkka Hämälä Chair of the Board of Directors 213,381 B shares
Jussi Linnaranta Vice Chair of the Board of Directors 25,192 B shares
Hannu Anttila Member of the Board of Directors 143,942 B shares
Raija-Leena Hankonen-Nybom Member of the Board of Directors 4,446 B shares
Erja Hyrsky Member of the Board of Directors 5,823 B shares
Kirsi Komi Member of the Board of Directors 81,610 B shares
Jukka Moisio Member of the Board of Directors 8,598 B shares
Timo Saukkonen Member of the Board of Directors 13,198 B shares
Veli Sundbäck Member of the Board of Directors 71,275 B shares
Mika Joukio CEO 300,000 B shares
Share holdings of the Corporate Management Team members are presented on page 161.
Dividend policy
Metsä Board aims to distribute at least 50% of
the result for the financial period in dividends
every year. The Board of Directors proposes that
a dividend of EUR 0.41 per share be distributed
for the 2021 financial period, corresponding to
50% of the earnings per share in 2021.
Board of Directors’ authority
to issue shares
The Board of Directors is authorised to decide
on an issue of shares and any special rights
with an entitlement to shares as referred to in
Chapter 10, section 1 of the Limited Liability
Companies Act as follows. The maximum
number of shares that can be issued on the
basis of the authorisation is 35,000,000 B
shares, which corresponds to approximately
10% of all shares in the company. The Board of
Directors decides on all terms and conditions
applicable to the issue of shares and the special
rights with an entitlement to shares. The
authorisation applies to both an issue of new
shares and the assignment of own shares. The
issue of shares and any special rights with an
entitlement to shares may occur in departure
from a shareholder’s subscription right (private
placement). The authorisation is valid until 23
March 2022. The authorisation was fully unused
on 31 December 2021.
Impact of change in control
Some of Metsä Board’s shareholder agreements
concerning resource and associated companies
include provisions under which Metsä Board
must oer its shares in an associated company
for sale to the other shareholders in the case of
a change of control of Metsä Board. Of these
agreements, pursuant to the shareholders
agreement of Metsä Fibre Oy, Metsä Fibre’s
shareholders should oer their shares for sale to
the other shareholders in the case of a change
of control. A decrease in the voting rights of
Metsäliitto Cooperative in Metsä Board to below
50% would not, however, obligate Metsä Board
to oer its shares in Metsä Fibre Oy for sale.
DIVIDEND
EUR
Dividend yield, %
DIVIDEND /
NET RESULT
%
0.60
0.50
0.40
0.30
0.20
0.10
0
6.0
5.0
4.0
3.0
2.0
1.0
0
152
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Price development and number of shares
2021 2020 2019 2018 2017
Adjusted share prices, EUR
A share high 11.00 8.80 7.98 10.10 7.28
low 8.50 4.80 5.46 6.00 5.43
closing 9.38 8.64 6.14 6.14 7.1 3
average 9.48 6.88 6.56 8.36 6.35
B share high 11.01 8.79 6.65 10.30 7.36
low 7.50 4.47 3.86 4.98 5.34
closing 8.61 8.62 6.00 5.12 7.15
average 9.14 6.12 5.26 7.95 6.37
Trading volume at Nasdaq Helsinki, number of shares
A share 1,802,589 1,758,683 694,519 2,227,788 1,491,973
% of total number of shares 5.5 5.3 2.1 6.3 4.2
B share 98,057,575 155,232,570 220,170,829 180,834,626 172,937,862
% of average number of shares 30.4 48.1 68.3 56.5 54.1
Number of shares at year end
A share 32,802,175 32,887,151 33,087,647 35,358,794 35,886,682
B share 322,710,571 322,625,595 322,425,099 320,153,952 319,626,064
Total 355,512,746 355,512,746 355,512,746 355,512,746 355,512,746
Number of shares at year end 355,512,746 355,512,746 355,512,746 355,512,746 355,512,746
Market capitalisation at year end, EUR million 3,086.2 3,065.2 2,136.1 1,856.3 2,539.6
Number of shareholders, B shares 54,904 48,165 50,420 45,341 43,268
Key figures
EUR million 2021 2020 2018 2017 2016
Earnings per share
Result before tax 365.8 212.3 165.6 224.2 170.8
– Income taxes -51.8 -42.2 -21.0 -20.8 -20.3
= Result for the period 314.0 170.1 144.6 203.4 150.5
– Average number of shares 355,512,746 355,512,746 355,512,746 355,512,746 355,512,746
Earnings per share, basic and diluted, EUR 0.82 0.48 0.41 0.57 0.42
Shareholders’ equity per share, EUR 4.78 3.89 3.76 3.72 3.28
Dividend per share, EUR 0.41
1)
0.26 0.24 0.29 0.21
Payout ratio, % 49.9 54.3 58.5 50.9 50.0
Metsä Board shares have no nominal value.
Dividend yield, % of closing price
A share 4.4
1)
3.0 3.9 4.7 2.9
B share 4.8
1)
3.0 4.0 5.7 2.9
Price/earning ratio (P/E ratio)
A share 11.4 18.1 15.0 10.8 1 7. 0
B share 10.5 18.0 14.6 9.0 17.0
Price to book value (P/BV), %
A share 196.2 222.0 163.3 165.1 2 17.4
B share 180.1 221.5 159.6 1 37.6 217.8
1)
The Board of Directors has proposed that a dividend of EUR 0.41 per share be distributed for the 2021 financial year.
153
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Calculation of key ratios
■ Alternative performance measures
Key figure
Definition
Justification for the use of the key figure
Profitability
Operating result =
Result before income tax, financial income and expenses,
exchange gains and losses and share of results from asso-
ciated companies and joint ventures
The key figure describes the Group’s ability to produce a profit from its busi-
ness, and it is independent of the company’s capital structure
EBITDA =
Operating result before depreciation, amortisation and
impairment losses
The key figure shows how much margin is left over from the Group’s sales after
deducting the variable and fixed costs of business before depreciation, amorti-
sation and impairment
Return on equity (%) =
Result before income tax - income taxes
The key figure describes the Group’s ability to produce a profit with the assets
invested in the Group by shareholders
Shareholder’s equity (average)
Return on capital employed (%) =
Result before income taxes + net exchange dierences and
other financial expenses
The key figure describes the Group’s ability to produce a profit on the capital
invested, from the point of the party investing the capital
Balance total + non-interest bearing liabilities (average)
Financial position
Equity ratio (%) =
Shareholder’s equity
The key figure describes the Group’s capital structure, solvency and ability to
take care of its commitments in the long run
Balance total - advance payments received
Net gearing ratio (%) =
Interest-bearing net liabilities
The key figure describes the Group’s capital structure and financial position
Shareholder’s equity
Interest-bearing net liabilities =
Interest-bearing liabilities – cash and cash equivalents
and interest-bearing receivables
The key figure describes the Group’s indebtedness
Other
Total investments =
Investments in owned and leased fixed assets
and investments in business combinations
The key figure describes the Group’s application of funds for maintaining and
renewing its production machinery and plants and for expanding its business
with corporate acquisitions
Interest cover =
Net cash flow arising from operating activities + net
interest expenses
The key figure describes the Group’s ability to meet its debt obligations
Net interest expenses
■ Share performace indicators
Key figure Definition
Earnings per share =
Profit attributable to shareholders of parent company
Adjusted number of shares (average
Shareholders’ equity per share =
Equity attributable to shareholders of parent company
Adjusted number of shares at the end of the period
Dividend per share =
Dividends
Adjusted number of shares at 31 December
Payout ratio (%) =
Dividend per share
Earnings per share
Dividend yield (%) =
Dividend per share
Share price at 31 December
Price/earnings ratio
(P/E ratio) (%)
=
Share price at 31 December
Earnings per share
P/BV (%) =
Share price at 31 December
Shareholders' equity per share
Adjusted average share price =
Total traded volume per share (EUR)
Average adjusted number of shares traded
during the financial year
Market capitalisation =
Number of shares x market price at the end of period
The presentation of earnings per share is regulated by the Decree of the Ministry of Finance on the Regular Duty of Disclosure of an Issuer of a Security.
In addition, the earnings per share ratio is regulated by the IAS 33 standard.
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Comparable performance measures
European Securities and Markets Authority (ESMA) guidelines on Alterna-
tive Performance Measures define alternative performance measures as
a financial measure of historical or future financial performance, financial
position or cash flows, other than a financial measure defined in the appli-
cable financial reporting framework, in Metsä Board’s case International
Financial Reporting Standards as adopted in the EU pursuant to Regulation
(EC) No 1606/2002. With the exception of Earnings per share defined in
IAS 33 Earnings Per Share, performance measures provided in the interim
report all qualify as alternative performance measures under the ESMA
guidelines.
Metsä Board sees the presentation of alternative performance measures
as providing users of financial statements with an improved view of the
company’s financial performance and position, including among other
things the eciency of its capital utilisation, operational profitability and
debt servicing capabilities.
Exceptional and material items outside the ordinary course of business
have been eliminated from the comparable operating result. Metsä Board
has defined operating result as follows: Result for the period presented in
IFRS income statement before income taxes, financial income and expense
as well as share of result of associate companies and joint ventures.
Reconciliation of operating result under IFRS and comparable operating
result as well as EBITDA and comparable EBITDA is presented below.
Comparable return on capital employed has been calculated using the
same adjustments as the comparable operating result, and it has been
further adjusted with items of financial income aecting comparability
when applicable. Metsä Board considers that key figures derived in this
manner improve comparability between reporting periods.
None of these key figures with items aecting comparability eliminated
are key figures used in IFRS reporting, and they cannot be compared
with other companies’ key figures identified with the same names. Items
aecting comparability include material gains and losses on disposals of
assets, impairment and impairment reversals in accordance with IAS 36
“Impairment of Assets”, corporate divestments and acquisitions, adjust-
ment measures and other restructuring measures and their adjustments,
costs arising from extensive and unforeseeable interruptions in production
and the compensation received for them as well as items arising from legal
proceedings.
In Metsä Board’s view, comparable performance measures better reflect
the underlying operational performance of the company by eliminating the
result eect arising from items and transactions outside ordinary course of
business.
Reconciliation of items aecting comparability
EUR million 2021 2020
Operating result 375.9 227.3
Depreciation, amortisation and impairment charges 90.2 94.5
EBITDA 466.0 321.8
Items aecting comparability
Other operating income -12.2 -6.0
Share of results of associated companies 8.7
Other operating expense 9.7
Total 6.2 -6.0
EBITDA, comparable 472.2 315.8
Depreciation, amortisation and impairment charges -90.2 -94.5
Items aecting comparability
Impairment charges and reversals of impairments 4.6
Operating result, comparable 386.6 221.2
Share of results of associated companies and joint
ventures
0.0 -0.1
Net financial items -10.0 -14.9
Result before income tax, comparable 376.6 206.3
Income taxes -51.8 -42.2
Income taxes related to items aecting comparability 1.9 1.2
Result for the period, comparable 326.6 165.3
"+" sign items = expense aecting comparability
"-" sign items = income aecting comparability
Items aecting comparability during the financial period totalled EUR 10.8
million and comprised the following items: a EUR 7.0 million capital gain
from the sale of a land area unrelated to business operations; a EUR -6.9
million impairment recognised in the assets of Metsä Fibre’s Kemi pulp
mill; EUR -1.8 million recognised in taxes as a result of the tax audit in Metsä
Fibre’s sub-sidiary in Italy; a EUR -4.6 million impairment recog-nised in the
current paperboard production assets in Husum; and EUR -4.5 million in
costs related to the chip conveyor fire at the Husum pulp mill. In addition,
EUR -2.3 million of taxes aecting comparability are reported in the taxes
of previous financial years based on the tax audit of the Italian subsidiary.
Items aecting comparability in 2020 totalled EUR 6.0 million and
comprised disposal gains from sold non-business related land area.
Key figures
155
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Quarterly data
Full year Quarterly
EUR million 2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Sales 2,084.1 1,889.5 518.5 516.1 555.8 493.7 473.1 471.2 473.1 472.1
2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Operating result, comparable 386.6 221.2 91.3 104.0 102.5 88.8 64.5 62.5 60.5 33.8
2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Operating result 375.9 227.3 90.8 99.4 103.7 82.0 64.5 62.5 66.5 33.8
Share of profit from associated companies 0.0 -0.1 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Exchange gains/losses -2.3 -3.4 -0.6 -0.3 -1.1 -0.4 -0.2 -1.3 -0.2 -2.0
Other financial income and expenses -7.7 -11.5 0.6 -2.8 -2.8 -2.7 -2.8 -3.0 -2.8 -2.9
Result before tax 365.8 212.3 90.7 96.4 99.8 78.9 61.5 58.1 63.9 28.9
2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Operating result, % of sales 18.0 12.0 1 7. 5 19.3 18.6 16.6 13.6 13.3 14.1 7. 2
Full year Quarterly
1,000 t 2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Deliveries
Folding boxboard 1,296 1,223 300 319 348 329 297 318 310 298
White kraftliner 627 587 143 156 166 162 144 143 148 152
Metsä Fibre’s pulp
1)
496 521 120 104 156 116 158 107 126 130
Metsä Board’s pulp 762 696 203 178 185 196 207 168 156 165
2021 2020 IV/2021 III/2021 II/2021 I/2021 IV/2020 III/2020 II/2020 I/2020
Production
Folding boxboard 1,272 1,249 295 317 318 342 317 311 333 288
White kraftliner 634 591 155 155 160 164 168 137 156 130
Metsä Fibre’s pulp
1)
1,362 1,371 335 335 329 362 359 335 348 329
Metsä Board’s pulp 747 702 183 184 194 186 174 188 193 148
1)
Corresponds to Metsä Board’s ownership of 24.9 per cent in Metsä Fibre.
Metsä Board contributes to surrounding society also through paid taxes. In
addition to paid corporate income taxes and property taxes Metsä Board’s
operations generate various other taxes and tax-like payments. Some are
directly paid
by the company, like employer’s social security payments. Some are
collected by Metsä Board on behalf of the government, like employees’
payroll taxes.
In addition, fuels and electricity used for production activities include
indirect taxes. Considering all directly and indirectly generated taxes and
tax-like payments arising from Metsä Board’s operations, our economic
contribution to surrounding society is material.
Metsä Board is committed to follow international transfer pricing gui-
delines and local tax laws and regulations in all of its operating countries.
Majority of Metsä Board’s production and other operations are located in
Finland, thus most of the taxes are paid in Finland.
Metsä Board’s cooperation with tax authorities is transparent and active.
As an example of this Metsä Board started enhanced cooperation with
Taxes
Finnish Tax Administration during 2021. Tax issues are managed by Metsä
Group’s tax function and taxes are in the scope of Board of Directors’ Audit
Committee’s regular follow-up.
Metsä Fibre’s share of result
Metsä Board’s consolidated result includes associated company Metsä
Fibre’s result share (24.9% ownership). Metsä Fibre pays corporate income
taxes on its own results and Metsä Board consolidates the result share on
post-tax basis.
Paid corporate income taxes and property taxes
EUR million 2021 2020
Finland 15.0 43.9
Sweden 11.9 2.0
Other countries 5.6 0.6
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Income statement, eur million
Sales 2,084 1,890 1,932 1,944 1,849 1,720 2,008 2,008 2,019 2,108
- change, % 10.3 -2.2 -0.1 5.2 7. 5 -14.3 -0.0 -0.5 -4.2 -15.2
EBITDA, comparable 472 316 279 344 289 231 283 236 208 186
- % of sales 22.7 16.7 14.4 17.7 15.6 13.4 14.1 11.8 10.3 8.8
Operating result 376 227 181 246 207 132 199 117 114 221
Operating result, comparable 387 221 184 252 193 137 180 137 104 75
- % of sales 18.6 11.7 9.5 13.0 10.5 8.0 9.0 6.8 5.2 3.6
Result for the period 314 170 145 203 150 90 137 69 64 171
Balance sheet, eur million
Balance sheet total 2,922 2,302 2,270 2,284 2,226 2,194 2,220 2,149 2,097 2,581
Equity attributable to shareholders of parent company 1,699 1,384 1,338 1,323 1,167 1,052 1,029 841 850 851
Interest bearing net liabilities -78 236 308 335 358 464 333 427 597 625
Key figures per share and distribution
Dividend and equity distribution, EUR million 145.8
1)
92.4 85.3 103.1 74.7 67. 5 60.4 39.4 29.5 19.7
Dividend and equity distribution per share, EUR 0.41
1)
0.26 0.24 0.29 0.21 0.19 0.17 0.12 0.09 0.06
Payout ratio including equity distribution, % 49.9
1)
54.31 58.5 50.9 50.0 76.0 43.6 5 7. 1 47.4 11.3
Dividend yield, % 4.8
1)
3.0 4.0 5.7 2.9 2.8 2.5 2.7 2.9 2.7
Key figures – profitability
Return on capital employed (ROCE), comparable, % 18.7 12.2 10.4 14.4 11.2 8.1 11.3 9.1 6.4 4.8
Return on equity, comparable, % 20.2 12.1 11.0 16.7 12.4 9.0 12.9 10.4 6.5 5.3
Key figures – balance sheet and financing
Interest bearing net liabilities / EBITDA, comparable -0.2 0.7 1.1 1.0 1.2 2.0 1.2 1.8 2.9 3.4
Equity ratio, % 63.3 60.3 59.1 58.1 52.6 48.2 46.5 39.2 40.7 33.2
Net gearing, % -4 17 23 25 31 44 32 51 70 73
Net cash flow from operations, EUR million 330 308 201 151 236 77 247 198 82 -2
Net interest expense, EUR million 8 12 14 19 36 26 26 42 60 70
Interest cover 42.7 2 7.6 15.4 9.0 7.6 4.0 10.4 5.7 2.4 1.0
Other key figures
Gross investments, EUR million 220 166 95 70 65 162 178 44 67 66
Depreciation, amortisation and impairment losses, EUR million 90 95 114 92 92 102 104 126 101 100
R & D expenditure, EUR million
2)
6 9 9 6 6 6 8 6 5 5
- % of sales 0.3 0.5 0.4 0.3 0.3 0.4 0.4 0.3 0.3 0.2
Personnel, average 2,461 2,455 2,433 2,435 2,456 2,588 2,851 3,200 3,245 3,552
- in Finland 1,490 1,486 1,458 1,433 1,441 1,552 1,538 1,542 1,560 1,634
Paperboard deliveries, 1,000 t 1,922 1,810 1,792 1,830 1,803 1,568 1,404 1,256 1,141 1,062
Dividend and key figures per share for years 2012–2014 have been issue-adjusted. The rights issue factor was 1.030627.
1)
The Board of Directors has proposed that a dividend of EUR 0.41 per share be distributed for the 2021 financial year. Dividend yield for 2021 has been calculated including the proposed equity distribu-
tion and using the B share closing price as of 31 December 2021.
2)
The reporting of research and development expenses has been clarified and the figures for 2019–2021 are comparable.
Calculation of key ratios is presented on page 130.
Ten years in figures
157
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCE
Corporate governance statement
■ Introduction
This statement describing the corporate govern-
ance of Metsä Board Corporation (Metsä Board
or Company) has been issued as a separate
statement pursuant to the Securities Markets
Act and the Finnish Corporate Governance Code
2020 and is published concurrently with the
Company’s financial statements and report of
the Board of Directors. The Finnish Corporate
Governance Code from 2020 is available at
the website of the Finnish Securities Markets
Association at www.cgifinland.fi.
Metsä Board is a Finnish public limited com-
pany whose A and B series shares are subject
to public trading on the ocial list of NASDAQ
Helsinki Ltd. (Helsinki Stock Exchange). In its
administration and governance Metsä Board
applies Finnish laws, especially the Companies
Act, the Company’s Articles of Association
and rules and regulations issued pursuant to
laws, including those issued by the Financial
Supervisory Authority and applying to listed
companies. Metsä Board also complies with the
rules and recommendations of Nasdaq Helsinki
as applicable to listed companies.
Metsä Board prepares its financial statements
and interim reports according to the Interna-
tional Financial Reporting Standards (IFRS). The
financial statement documents are prepared
and published in Finnish and English.
Metsä Board’s headquarters are located
in Espoo, Finland. The Company’s registered
domicile is Helsinki.
Application of the Finnish
Corporate Governance Code
As a Finnish listed company, Metsä Board
applies the Finnish Corporate Governance Code
of 2020, which became eective on 1 January
2020. Currently Metsä Board does not deviate
from any single recommendation of the Code.
This statement has been issued in compliance
with the regulations concerning reporting
content set out in the code. This statement has
been reviewed by the Board of Directors’ Audit
Committee.
■ Metsä Board’s governance
structure
The Company’s statutory bodies include the
General Meeting of Shareholders, the Board of
Directors and the CEO. In addition, a Corporate
Management Team assists the CEO in the
operative management of the Company and
in coordinating its operations. Members of
■ Corporate governance in Metsä Board
FINANCIAL REPORTING
Internal auditing | Auditing
SHAREHOLDERS’ MEETING
BOARD OF DIRECTORS
BOARD COMMITTEES
Audit
Committee
Nomination and compensation
Committee
CEO
Corporate Management Team
the management team are not members of
the Board of Directors. The tasks and respon-
sibilities of the dierent corporate bodies are
specified in the Finnish Companies Act.
Metsä Board has a function based organisa-
tion, including marketing and sales, production
and technology, finance, business development
and human resources. Function heads are
member of the Corporate Management Team.
Functions are supported by centralised support
functions, most of which are common with other
Metsä Group companies. Support functions are
based on specific service agreements, the terms
of which are at arm’s length.
General Meeting
The General Meeting of Shareholders is the
Company’s highest decision-making body where
shareholders use their decision-making power.
Each shareholder is entitled to participate in
a General Meeting by following the procedure
described in the notice to the General Meeting.
According to the Companies Act, the General
Meeting decides on the following matters,
among others:
• amending the Articles of Association
• approving the financial statements
• profit distribution
• mergers and demergers
• acquisition and transfer of own shares
• appointing the members of the Board and
specifying their and Board committee
members’ compensation
• appointing the auditor and specifying his/her
compensation.
Shareholders are entitled to put forward a
matter pertaining to the General Meeting to
be addressed when the shareholder delivers a
written request to this eect so well in advance
that the matter can be included in the notice
to the meeting. The Company has specified
January 15 as the relevant deadline. In addition,
a shareholder has a right to present questions on
the items on the agenda of the General Meeting.
A shareholder is entitled to participate in a
General Meeting when he/she is included in the
register of shareholders eight (8) working days
before the General Meeting. An Annual General
Meeting takes place each year in June at the
158
SUSTAINABILITY
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
latest. Notice to a General Meeting is served at
the earliest three months and at the latest three
weeks before the meeting by publishing it on the
Company’s website and by publishing the notice
or a summary thereof in at least one Finnish
newspaper of general circulation.
An Extraordinary General Meeting will
convene if the Board finds it necessary, or if the
auditor or shareholders representing at least
10% of all shares deliver a written request to this
eect in order to process a specified matter.
Board of Directors
The Board of Directors is responsible for the
Company’s administration and arranging the
Company’s operations properly according to
applicable laws, the Articles of Association and
good corporate governance. The general author-
ity of the Board cover matters that are far-reach-
ing and unusual, strategically significant or
unusual and which therefore do not belong to
the Company’s day-to-day business operations.
The Board supervises Metsä Board’s operations
and management and decides on strategy,
major investments, the Company’s organisation
structure and significant financing matters. The
Board supervises the proper arrangement of
the Company’s operations, and ensures that
accounting and asset management control,
financial reporting and risk management have
been organised in an appropriate manner.
For its operation, the Board has a written
working order. In accordance with the working
order, the Board’s tasks include:
• monitoring that the Company’s Articles of
Association are complied with;
• appointing the CEO and discharging him
and ensuring that the CEO takes care of
the Company’s day-to-day administration
in accordance with the regulations and
guidelines given by the Board;
• establishing necessary committees,
appointing their members and approving
their working orders;
• addressing and approving the Company’s
values, the long range plan and corporate
strategy;
• accepting the annual operational plan and
budget;
• monitoring how the Company’s accounting,
asset management, risk control and financial
reporting are arranged;
• deciding on significant investments, business
acquisitions, divestments and closures of
operations;
• deciding on considerable investments and
financing arrangements;
• deciding on the transfer and pledging of the
Company’s significant real property;
• deciding on management authorizations and
granting rights to represent the Company;
• convening the General Meeting and monitor-
ing that the decisions taken by the General
Meeting are implemented;
• signing and presenting the financial
statements to the Annual General Meeting
for approval, and preparing a proposal for the
use of profits;
• approving key policies and guidelines,
including the insider guidelines;
• deciding on the remuneration schemes and
their criteria and terms and conditions;
• publishing the financial statements bulleting
as well as interim and half-year financial
reports;
• publishing or authorizing the CEO to publish
all inside information likely to have a signif-
icant eect on the value of the Company’s
shares, or which otherwise shal be made
public according to the Finnish Securities
Markets Act or the Rules of the Helsinki Stock
Exchange.
The working order of the Board of Directors
is presented in full on the Company’s website
(www.metsaboard.com/lnvestors/Corporate
Governance). The Board can delegate matters in
its general authority to the CEO and correspon-
dingly take charge of decision-making in a task
that belongs to the CEO’s general authority.
On an annual basis, the Board assesses its
own operation and the Company’s governance
and decides on any necessary changes.
The Board convenes on a regular basis. In the
financial year 2021, the Board held a total of 13
meetings. Due to Covid-19 pandemic, meetings
were held by using a number of dierent meth-
ods of participation. The attendance rate of the
members was 99% (100% in 2020 and 100% in
2019), such that Raija-Leena Hankonen-Nybom
was absent from one meeting while the others
attended all the meetings.
Composition, diversity and
independence of the Board of
Directors
The composition and number of members of
the Board of Directors must facilitate eective
fulfilment of the Board’s tasks. The composition
of the Board of Directors takes into account
the development phase of the Company,
ownership structure, the special requirements
of the industry and the needs of the Company’s
operations. Both genders are represented on the
Board of Directors. A member of the Board must
possess the competence required by the task
and the opportunity to allocate sucient time
for the task.
The Board of Directors has adopted itself spe-
cific diversity principles, which are available on
the company’s website (https://www.metsab-
oard.com/MaterialArchive/Corporate-govern-
ance/Metsa-Board-board-diversity-principles.
pdf).The Board recognises the benefits to the
Company and its shareholders of a diverse and
broad Board composition. Diversity supports
the Board’s open work atmosphere, independ-
ent role and decision-making. The Board is
responsible for the company’s administration
and the proper arrangement of its operations.
A key task of the Board is also to support and
challenge the operative management from
various perspectives in a consistent and
predictable manner. The successful working by
the Board and its Committees requires a diverse
composition, knowledge and experience base as
well as taking into account the personal qualities
of individual members. Diversity shall further
support the Company’s each development
stage and correspond to the future needs of the
development of the Company and its business.
Metsä Board has identified that key diversity
factors for the company include industry
knowledge, experience from dierent fields of
business and the international business scene.
In addition, varying educational backgrounds,
management experience from dierent business
sectors and a varying age and gender structure
have been identified as items promoting
diversity. Metsä Board’s target is to have both
genders represented at the Board. The Board
evaluates the successful implementation of
these targets as part of its and its Nomination
and Compensation Committee’s normal
operation.
According to the Articles of Association, a
minimum of five and a maximum of ten ordinary
members shall be appointed to the Board of
Directors by the shareholders at the Annual
General Meeting for a one-year period at a time.
The number of consecutive terms is not limited.
At present, the Board has nine members.
The Board appoints a Chair and a Vice Chair
from among its members. The Annual General
Meeting of 2021 appointed the following persons
as members of the Board of Directors:
Corporate governance statement
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• Mr Hannu Anttila, born 1955, independent
of the Company and of its significant share-
holders, M.Sc. (Econ.), member since 2018,
143,942 B shares
• Ms Raija-Leena Hankonen-Nybom, born
1960, independent of the company’s
significant shareholder. Not independent of
the company. M.Sc. (Econ.), APA-degree,
member since 2021, 4,446 B shares
• Ms Erja Hyrsky, born 1979, independent of
the Company and of its significant sharehold-
ers, M.Sc. (Econ.) member since 2021, 5,823
B shares
• Mr Ilkka Hämälä, born 1961, Chair, M.Sc.
(Eng.), member since 2018, 213,381 B shares
• Ms Kirsi Komi, born 1963, independent of the
Company and of its significant shareholders,
L.L.M., member since 2010, 81,610 B shares
• Mr Jussi Linnaranta, born 1972, independent
of the Company, M.Sc. (Agr.), member since
2017, 25,192 B shares
• Mr Jukka Moisio, born 1961, independent of
the Company and of its significant sharehold-
ers, M.Sc. (Econ.), MBA, member since 2020,
8,598 B-shares
• Mr Timo Saukkonen, born 1963, independent
of the Company, M.Sc. (For.), member since
2020, 13,198 B shares
• Mr Veli Sundbäck, born 1946, independent
of the Company and of its significant
shareholders, L.L.M., member since 2013,
71,275 B shares
These ownerships include shares possibly
owned by controlled entities as at 31 December
2021.
A majority of the members of the Board of
Directors are independent of both the Company
and its significant shareholders. As President
and CEO of Metsä Group Chair Hämälä is
dependent on both the Company and its major-
ity shareholder Metsäliitto Cooperative. Jussi
Linnaranta and Timo Saukkonen are members
of the Board of Metsäliitto Cooperative and
consequently dependent on a significant
shareholder. Raija-Leena Hankonen-Nybom is
the Company’s previous auditor in charge and
is consequently considered dependent on the
Company until the Annual General Meeting
of 2022. Kirsi Komi has served on the Board
for more than 10 consecutive years but is
considered independent of the Company and its
significant shareholders, based on the Board’s
general evaluation.
The Board’s Nomination and Compensation
committee proposes to the Annual General
Meeting convened for March 23, 2022 that
current Board members Anttila, Hankonen-Ny-
bom, Hyrsky, Hämälä, Linnaranta, Moisio,
Saukkonen and Sundbäck be re-elected for a
new term and further that M.S.S.(Econ) Mari
Kiviniemi be elected as a new member. Further
information on existing and proposed Board
members is available on the Company’s website
at (www.metsaboard.com/Investors/Corporate
Governance).
Board committees
Board committees provide assistance to the
Board of Directors, preparing matters for which
the Board is responsible. The Board of Directors
appoints an Audit Committee and a Nomination
and Compensation Committee from among its
members. Every year after the Annual General
Meeting, the Board of Directors appoints each
committee’s chair and members. The Board
of Directors and its committees can also seek
assistance from external advisors.
Final decisions concerning matters related
to the tasks of the committees are made by the
Board of Directors on the basis of committee
proposals, excluding proposals on Board
composition and compensation made directly
to the General Meeting by the Nomination and
Compensation Committee.
Audit Committee
The Audit Committee is responsible for assisting
the Board of Directors in ensuring that the com-
pany’s financial reporting, calculation methods,
annual financial statements and other financial
information made public by the Company are
correct, balanced, transparent and clear. On a
regular basis, the Audit Committee reviews the
internal control and management systems and
monitors the progress of financial risk reporting
and the auditing of the accounts. The Audit
Committee assesses the eciency and scope
of internal auditing, the company’s risk manage-
ment, key risk areas and compliance with appli-
cable laws and regulations. The committee gives
a recommendation to the Board concerning the
appointment of auditors to the Company. The
Audit Committee also processes the annual plan
for internal auditing and the reports prepared on
significant auditing.
The Audit Committee consists of four Board
members. Since the Annual General Meeting of
2021, Raija-Leena Hankonen-Nybom has been
Chair of the Audit Committee with Hannu Ant-
tila, Kirsi Komi and Jukka Moisio as members. All
members apart from the Chair are independent
of the Company and its significant shareholders.
The committee members must have adequate
expertise in accounting and financial statement
policies. The Audit Committee convenes on a
regular basis, at least four times a year, including
meeting with the Company’s auditor. The com-
mittee chair provides the Board with a report on
each meeting of the Audit Committee. The tasks
and responsibility areas have been specified
in the committee’s working order which the
Board has approved (www.metsaboard.com/
Investors/Corporate Governance).
When necessary, the following persons
are also represented in the Audit Committee
meetings as summoned by the Committee:
the auditor, Chief Executive Ocer and Chief
Financial Ocer as well as other management
representatives and external advisors.
The Audit Committee convened four times
during 2021 and all members participated in all
meetings (the attendance rate was 95% in 2020
and 100% in 2019).
Nomination and Compensation
Committee
The task of the Nomination and Compensation
Committee is to assist the Board of Directors
in matters related to the appointment and
compensation of the Company’s CEO, a possible
Deputy CEO and the senior management and
prepare matters related to the reward schemes
for management and employees. In addition,
the Committee prepares for the Annual General
Meeting a proposal on the number of Board
members, Board composition and Board mem-
ber compensation. The Committee also recom-
mends, prepares and proposes to the Board the
CEO’s (and a Deputy CEO’s) nomination, salary
and compensation, and further evaluates and
provides the Board and the CEO with recom-
mendations concerning management rewards
and compensation systems.
The Committee consists of five Board
members. It convenes on a regular basis at
least four times a year. The Committee chair
presents the proposals issued by the Committee
to the Board. The tasks and responsibilities of
the Nomination and Compensation committee
have been specified in the committee’s
working order, which the Board approves (www.
metsaboard.com/Investor Relations/Corporate
Governance).
Since the Annual General Meeting of 2021,
Ilkka Hämälä has been Chair of the Nomination
and Compensation Committee with Erja Hyrsky,
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Jussi Linnaranta, Timo Saukkonen and Veli
Sundbäck as members.
The Nomination and Compensation
Committee convened five times during 2021
and all members participated in all meetings
(the attendance rate was 100% also in 2020 and
2019).
Chief Executive Ocer
Chief Executive Ocer Mika Joukio, M.Sc. (Eng.),
born 1964, is responsible for the daily manage-
ment of the Company’s administration accord-
ing to the guidelines and instructions given by
the Board. In addition, the CEO is responsible
for ensuring that the Company’s accounting has
been carried out according to applicable laws
and that asset management has been organised
in a reliable manner. The CEO manages the
Company’s daily business and is responsible for
controlling and steering the functions.
The CEO has a written CEO contract approved
by the Board. The Board monitors the CEO’s
performance and provides a performance eval-
uation once a year. The CEO is covered by the
Finnish Employees’ Pension Act, which provides
for a pension compensation based on service
years and earnings. Basic salary, rewards and
fringe benefits are included in the calculation,
but not stock option or share plan based income.
The Company has commissioned an extra pen-
sion insurance policy for the CEO, entitling the
CEO to retire at the age of 62. The policy entitles
the CEO to receive pension compensation equal
to 60% of his salary at the time of retirement
(calculated in accordance with Finnish pension
laws) on the basis of a five-year-period preceding
the moment of retirement.
The Board appoints and discharges the CEO.
The Board can discharge the CEO without a
specific reason. The CEO can also resign from
his assignment. The mutual term of notice is
six months. The Board may, however, decide
to discharge the CEO without a period of
notice. When the service contract of the CEO
is terminated by the Board, the CEO is entitled
to receive discharge compensation equal to his
12-month salary.
Deputy to the CEO
The Board can at its discretion appoint a Deputy
to the CEO. The Deputy to the CEO is responsible
for carrying out the CEO’s tasks when the CEO is
unable to perform his duties. For the time being
no Deputy to the CEO has been appointed.
Corporate Management Team
In the operative management of Metsä Board,
the CEO is assisted by the Corporate Manage-
ment Team, which consists of Mika Joukio,
CEO, together with function heads Ari Kiviranta
(Technology), Markku Leskelä (Development),
Jussi Noponen (Sales and Supply Chain), Harri
Pihlajaniemi (Production and Technology), Henri
Sederholm (Finance) and Camilla Wikström
(Human Resources), who all report to the CEO.
Each Corporate Management Team member
has a written employment or service contract,
With the exception of the CEO, members of the
Corporate Management Team have no extraor-
dinary pension arrangements which would
deviate from applicable pension legislation. The
term of notice of Corporate Management team
members is six months.
The Corporate Management Team’s tasks and
responsibilities include planning investments,
specifying and preparing the Company’s strate-
gic guidelines, allocating resources, controlling
routine functions as well as preparing several
matters to be reviewed by the Board.
The Corporate Management Team convenes
at the Chair’s invitation once a month, as a rule,
and also otherwise when necessary.
The Corporate Management Team members
owned the Company’s shares at the end of the
financial year 2021 were as follows:
Mika Joukio 300,000 B shares
Ari Kiviranta 31,000 B shares
Markku Leskelä 9,885 B shares
Jussi Noponen 66,062 B shares
Harri Pihlajaniemi 28,672 B shares
Henri Sederholm 33,249 B shares
Camilla Wikström 29,080 B shares.
Possible controlled entities of management
team members do not hold shares in the
Company.
■ Internal control, internal
auditing and risk management
Profitable business requires that operations
are monitored continuously and with adequate
eciency. Metsä Board’s internal management
and control procedure is based on the Finnish
Companies Act, regulations and recommen-
dations for listed companies, the Articles of
Association and the company’s own approved
principles and policies. The functionality of the
company’s internal control is evaluated by the
company’s internal auditing. Internal control is
carried out throughout the organisation. Internal
control methods include internal guidelines
and reporting systems. The following describes
the principles, objectives and responsibilities
of Metsä Board’s internal control, risk manage-
ment and internal auditing.
Internal control
Being a listed company, Metsä Board’s internal
control is steered by the Finnish Companies Act
and the Securities Market Act, other laws and
regulations applicable to the operations and
the rules and recommendations of the Nasdaq
Helsinki, including the Corporate Governance
Code. External control is carried out by Metsä
Board’s auditor and the authorities.
In Metsä Board, internal control covers
financial reporting and other monitoring.
Internal control is implemented by the Board
and operative management as well as the entire
personnel. Internal control aims to ensure
achieving the goals and objectives set for the
company; economical, appropriate and ecient
use of resources; correct and reliable financial
information and other management information;
adherence to external regulations and internal
policies; security of operations, information
and property in an adequate manner; and the
arrangement of adequate and suitable manual
and IT systems to support operations.
Internal control is divided into (i) proactive
control, such as the specification of corporate
values, general operational and business
principles; (ii) daily control, such as operational
systems and work instructions related to
operational steering and monitoring; and (iii)
subsequent control, such as management
evaluations and inspections, comparisons and
verifications with the aim of ensuring that the
goals are met and that the agreed operational
and control principles are followed. The
corporate culture, governance and the approach
to control together create the basis for the entire
process of internal control.
Monitoring of the financial reporting
process, credit control and
authorisation rights
The financial organisations of the functions
and the central administration are responsible
for financial reporting. The units and functions
report the financial figures each month.
The functions’ control functions check their
units’ monthly performance and report them
further to central administration. Functions’
profitability development and business risks
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and opportunities are discussed in monthly
meetings attended by senior management of
the Company and of the function in question.
The result will be reported to the Board and the
Corporate Management Team each month. The
Board presents the Financial Statements to the
Annual General Meeting for approval, approves
the financial statement bulletin and quarterly
reports and decides on their publication. The
Company’s internal guidelines provide detailed
descriptions on the reporting and control rules
and the reporting procedure.
Credit control in Metsä Board has been
centralised under a Credit Committee,
which convenes at least each quarter. The
development of trade receivables is monitored in
each sales company by credit controllers under
the supervision of the Group VP of Credits.
Counterparty-specific credit limits are set within
the boundaries of the credit policy confirmed by
the Board in cooperation with centralised credit
control and business area management. The
development of credit risks is reported to the
Board on a regular basis.
Authorisation rights concerning expenses,
significant contracts and investments have
been specified continuously for dierent organ-
isation levels according to the decision-making
authority policy confirmed by the Board and
the authority separately granted by the CEO
and other management personnel. Investment
follow-up is carried out by the Group’s financial
administration according to the investment pol-
icy confirmed by the Board. After pre-approval,
investments are taken to the management
teams of the functions and the Corporate
Management Team within the framework of
the annual investment plan. Most significant
investments are separately submitted for Board
approval. Investment follow-up reports are
compiled each quarter.
Internal auditing
Internal auditing assists the Board and CEO with
their control tasks by evaluating the quality of
internal control maintained in order to achieve
the Company’s objectives. In addition, internal
auditing supports the organisation by evaluating
and ensuring the functionality of business
processes, risk management and the manage-
ment and administration systems.
The key task of internal auditing is to assess
the eciency and suitability of internal control
concerning the Company’s functions and units.
In its assignment, internal auditing evaluates
how well the operational principles, guidelines
and reporting systems are adhered to, how
property is protected and how eciently
resources are used. Internal auditing also acts
as an expert in development projects related
to its task area and prepares special reports at
the request of the Audit Committee or operative
management.
Internal auditing operates under the super-
vision of the Audit Committee and the CEO.
Audit observations, recommendations and the
progress of measures are reported to the man-
agement of the target audited, the Company
management and the auditor. Every six months,
internal auditing reports its auditing measures,
plans and operations to the Audit Committee.
Internal auditing applies in its tasks a working
order approved by the Board of Directors.
The action plan of internal auditing is prepared
for one calendar year at a time. The aim is to
allocate the auditing to all functions and units at
certain intervals. Auditing is annually allocated
to areas that are in a key position regarding the
evaluated risk and the Company’s objectives at
the time. The topicality and appropriateness of
the action plan are processed with the Compa-
ny’s management every six months.
The scope and coordination of the auditing
operations are ensured through regular commu-
nication and information exchange with other
internal assurance functions and the auditor.
When necessary, internal auditing uses external
service providers for temporary additional
resourcing or special expertise for carrying out
demanding evaluation tasks.
Risk management
Risk management is an essential part of Metsä
Board’s standard business planning and
leadership. Risk management belongs to daily
decision-making, operations follow-up and
internal control, and it promotes and ensures
that the objectives set by the Company are met.
Linking business management eciently with
risk management is based on the operational
principles confirmed by the Board; the aim of
the principles is to maintain risk management
as a process that is well defined, understand-
able and suciently practical. Risks and their
development are reported on a regular basis to
the Board’s Audit Committee. Centralised risk
management also takes care of the coordination
and competitive bidding of Metsä Board’s
insurance coverage.
The most crucial objective of risk manage-
ment is to identify and evaluate those risks,
threats and opportunities which may have an
impact on the implementation of the strategy
and on how short-term and long-term objectives
are met. The businesses regularly evaluate
and monitor the risk environment and related
changes as part of their normal operational
planning. The risks identified and their control is
reported to the Audit Committee and the Board
at least twice a year. Business risks also involve
opportunities, and they can be utilised within the
boundaries of the agreed risk limits. Conscious
risk-taking decisions must always be based
on an adequate evaluation of the risk-bearing
capacity and the profit/loss potential, among
other things, which shall be conducted before
any pre-engineering and execution phases of
projects and investments.
Risk management responsibilities in Metsä
Board are divided among dierent functions.
The Board is responsible for the Company’s
risk management and approves the Company’s
risk management policy; the Audit Committee
evaluates the levels and procedures of the
Company’s risk management and the essential
risk areas and provides the Board with related
proposals. The CEO and the Management Team
are responsible for the specification and adop-
tion of the risk management principles. They are
also responsible for ensuring that the risks are
taken into account in the Company’s planning
processes and that risk reporting is adequate
and appropriate. The Vice President of Risk Man-
agement reports to the CFO and is responsible
for the Company’s risk management process
development, coordination, the implementation
of risk evaluation and the essential insurance
decisions. The Risk Committee conducts twice
each year a risk review, the results of which the
CEO presents to the Board following a review
by the Corporate Management Team. The
Risk Committee consists of the CFO acting as
Chair, SVP Production, SVP Development, VP
Risk Management and VP Group Accounting.
Businesses and support functions identify
and evaluate the essential risks related to their
own areas of responsibility in their planning
processes, prepare for them, take necessary
preventive action and report on the risks as
agreed.
Metsä Board’s essential risk management
elements include implementing a comprehen-
sive corporate risk management process that
supports the entire business, protecting prop-
erty and ensuring business continuity, corporate
security and its continuous development, as well
as crisis management and continuity and recov-
ery plans. According to the risk management
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
policy and principles, adequate risk manage-
ment forms a necessary part of the preliminary
review and implementation stages of projects
which are financially or otherwise significant.
The tasks of Metsä Board’s risk management
are to
• ensure that all identified risks with an impact
on personnel, customers, products, property,
information assets, corporate image, corpo-
rate responsibility and operational capacity
are controlled according to applicable laws
and on the basis of best available information
and financial aspects
• ensure that the Company’s objectives are met
• fulfil the expectations of stakeholders
• protect property and ensure disruption-free
business continuity
• optimise the profit/loss possibility ratio
• ensure the management of the company’s
overall risk exposure and minimise the overall
risks.
The most significant risks and uncertainties that
the Company is aware of are described in the
Report of the Board of Directors.
Auditing
According to Metsä Board’s Articles of
Association, the company has one auditor
who shall be an auditing firm authorised by
the Central Chamber of Commerce of Finland.
The General Meeting appoints the auditor each
year. The Audit Committee together with the
Audit Committee of the parent entity Metsäliitto
Cooperative arranged in 2011 and 2021 respec-
tively tenders for auditing services. As a result of
the tendering of 2011, the Company’s long-term
auditor PricewaterhouseCoopers Oy was at
the 2012 Annual General Meeting changed to
KPMG Oy Ab. Pursuant to the decision of the
Annual General Meeting of 2021, KPMG Oy Ab
acts as the Company’s auditor and appointed
Kirsi Jantunen, APA, as the new auditor with
main responsibility. As a result of the tendering
of 2021 the Board of Directors proposes to the
Annual General Meeting of 2022 that KPMG
Oy Ab be appointed as the Company’s auditor.
Pursuant to EU’s Audit Directive an audit entity
may act as a Company’s auditor for a maximum
of 10 years, following which audit services shall
be subject to tendering. Should the same auditor
be re-elected in the tendering, it may proceed
as the Company’s auditor for another 10 years
at maximum. Thereafter the auditor must be
changed. The Audit committee controls the
appointment procedure of the auditors and
provides the Board and the General Meeting with
a recommendation for the appointment of the
auditor.
In 2021 audit fees were paid as follows: KPMG
Oy Ab received EUR 196,064 (EUR 196,064 in
2020 and EUR 196,064 in 2019); KPMG inter-
nationally received altogether EUR 437,212 in
2021 (EUR 402,322 in 2020 and EUR 413,528 in
2019); and Other auditing firms outside Finland
were paid EUR 20,641 (EUR 23,484 in 2020 and
EUR 23,484 in 2019). In addition, KPMG has
received EUR 0 (EUR 3,581 in 2020 and EUR
34,327 in 2019) for services not related to the
actual auditing of the accounts.
Insider Administration
Metsä Board and its group comply in insider
matters with Finnish laws, namely the Securities
Markets Act, the Regulation N:o 596/2014 by
the European Parliament and the Commission
on market abuse (MAR) and supporting
orders and regulations as well as the insider
guidelines of NASDAQ Helsinki Ltd. (Helsinki
Stock Exchange) (www.nasdaq.com/solutions/
rules-regulations-helsinki). The Board has based
on the above rules approved the Company’s own
insider guidelines.
Pursuant to MAR Article 14 and Chapter 51 of
the Penal Code, a person who possesses inside
information shall not (i) engage or attempt to
engage in insider dealing by acquiring or trans-
ferring financial instruments in his own name
or on behalf of a third party, (ii) recommend
that another person engage in insider dealing
or induce another person to engage in insider
dealing, (iii) unlawfully disclose inside informa-
tion to another person, unless such disclosure is
made as part of carrying out normal work duties.
The purpose of insider management is to enable
a transparent ownership of the Company’s
securities by the Company’s insiders, while
simultaneously maintaining public trust in the
trading with the Company’s securities and their
price formation. The Company recommends
only long-term investments. Insiders are being
trained at regular intervals.
Following the MAR becoming eective on 3
July 2016, the Company no longer has a register
of public insiders and the Company no longer
maintains a permanent company-specific
insider register. The Company shall, when
required and by decision of the Chair of the
Board of Directors, set up a project-specific
insider register to cover all persons who are
involved in the preparation of a specific project
containing insider information.
The Company’s managers with a duty to notify
include members of the Board of Directors and
the CEO. The holdings of such managers and
their related parties is public. Each of them have
an individual duty vis-à-vis the Company and the
competent supervisory authority to notify all
transactions executed with the shares and other
financial instruments of Metsä Board. Metsä
Board will publish all such notifications by means
of a stock exchange release.
Trading in the Company’s shares and other
financial instruments is prohibited during a
period starting at the end of each reporting
period and lasting until the results release has
been published (always at minimum 30 days;
“closed window”). This prohibition applies not
only to managers with a duty to notify but also
to such other persons specified by the Company
who participate in the preparation of financial
reports.
Related Party Transactions
The Board of Directors has determined
the principles applicable to the review and
evaluation of business transactions with related
parties. The Company’s business activities
include contractual relationships with the parent
entity Metsäliitto Cooperative and aliated
companies Metsä Fibre Oy and Metsä Tissue
Corporation. The most significant of these
include raw material (such as wood and pulp)
sourcing and acting in jointly operated inte-
grated mill sites. In situations where the Board
of Directors addresses a business relationship
or other contractual relationship or connection
to Metsäliitto Cooperative or the Company’s
aliated companies, the Board of Directors
shall, as a rule, act without those of its members
who are dependent on Metsäliitto Cooperative
or the relevant aliated company. The Audit
Committee follows up and analyses contractual
relationships between the Company and its
related parties.
To assess the independence and impartiality
of the members of the Board of Directors, the
members shall notify the Company of circum-
stances that may have an impact on the mem-
ber’s ability to act without conflict of interest.
As at 31 December 2021, neither the Board
members, nor the Company’s CEO or the Corpo-
rate Management Team members had monetary
loans from the Company or its subsidiaries. No
security arrangements or significant business
relations existed between these persons (includ-
ing their related parties as defined in IFRS) and
the Company during 2021.
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JUSSI LINNARANTA
b. 1972
M.Sc. (Agriculture and Forestry)
Agronomist
Member of the Board since 2017
Vice Chair of the Board since 2020
Independent of the company.
Not independent of the company’s
significant shareholder
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
25,192 B shares
RAIJA-LEENA HANKONEN-NYBOM
b. 1960
M.Sc. (Econ.)
Authorized Public Accountant degree
Member of the Board since 2021
Independent of the company.
Not independent of the company’s
significant shareholder
Shares owned in Metsä Board
Corporation 31 Dec. 2021: 4,446 B shares
ILKKA HÄMÄLÄ
b. 1961
M.Sc (Eng.)
Vuorineuvos
(Finnish honorary title)
Metsä Group, President and CEO
Chair of the Board since 2018
Not independent of the company
or its significant shareholder
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
213,381 B shares
HANNU ANTTILA
b. 1955
M.Sc. (Econ.)
Teollisuusneuvos
(Finnish honorary title)
Member of the Board since 2018
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
143,942 B shares
Metsä Board’s
Board of Directors
Read more at www.metsaboard.com
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Board of Directors
TIMO SAUKKONEN
b. 1963
M.Sc. (Agriculture and Forestry)
Forester
Member of the Board since 2020
Independent of the company.
Not independent of the company’s
significant shareholder
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
13,198 B shares
VELI SUNDBÄCK
b. 1946
LL.M., Master of Laws
Member of the Board since 2013
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
71,275 B shares
JUKKA MOISIO
b. 1961
M.Sc. (Econ.), MBA
Member of the Board since 2020
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
8,598 B shares
ERJA HYRSKY
b. 1979
M.Sc. (Econ.)
Member of the Board since 2021
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
5,823 B shares
KIRSI KOMI
b. 1963
LL.M., Master of Laws
Member of the Board since 2010
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
81,610 B shares
165
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCE
MIKA JOUKIO
b. 1964
M.Sc. (Tech), MBA
Chief Executive Ocer
Metsä Group employee since 1990.
Chair of Metsä Board Corporate
Management Team since 2014
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
300,000 B shares
HENRI SEDERHOLM
b. 1978
M.Sc. (Econ.)
Chief Financial Ocer
Metsä Group employee since 2003.
Member of Metsä Board Corporate
Management Team since May 2021.
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
33,249 B shares
HARRI PIHLAJANIEMI
b. 1970
M.Sc. (Tech)
Senior Vice President, Production
Metsä Group employee since 2017.
Member of Metsä Board Corporate
Management Team since 2017
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
28,672 B shares
JUSSI NOPONEN
b. 1975
M.Sc. (Tech)
Senior Vice President, Sales and Supply
Chain
Metsä Group employee since 2000.
Member of Metsä Board Corporate
Management Team since 2016
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
66,062 B shares
Metsä Board’s
Corporate Management Team
Read more at www.metsaboard.com
166
SUSTAINABILITY
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2021
Corporate Management Team
ARI KIVIRANTA
b. 1963
D.Sc. (Tech)
Senior Vice President,
Technology
Metsä Group employee since 1993.
Member of Metsä Board Corporate
Management Team since 2014
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
31,000 B shares
CAMILLA WIKSTRÖM
b. 1970
M.Sc. (Tech)
Senior Vice President, Human Resources
Metsä Group employee since 2002.
Member of Metsä Board Corporate
Management Team since 2019
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
29,695 B shares
MARKKU LESKELÄ
b. 1962
PhD.
Senior Vice President, Development
Metsä Group employee since 2016.
Member of Metsä Board Corporate
Management Team since October 2021.
Shares owned in Metsä Board
Corporation 31 Dec. 2021:
9,885 B shares
167
SUSTAINABILITY
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCE
The task of Metsä Board’s Investor Relations
is to ensure that the market receives accurate
and sucient information in order to determine
the value of Metsä Board’s shares. The Investor
Relations function engages in active dialogue
with representatives of the capital markets and
is responsible for the planning and implemen-
tation of the company’s financial and investor
communication.
The activities of Investor Relations also
include collecting feedback from investors and
market information for Metsä Board’s manage-
ment and Board of Directors.
Meetings with investors and analysts are
primarily attended to by the Vice President
for Investor Relations, the CFO and the CEO.
All requests from investors are handled in a
centralised manner by Investor Relations. During
the silent period, the company will not provide
comments on the company’s financial situation
or outlook, or the market environment.
Investors website
More information on Metsä Board as an
investment as well as the company’s strategy,
operating environment, financials and govern-
ance can be found on the company’s website at
www.metsaboard.com/investors.
Investor relations in 2021
The COVID-pandemic had a strong impact on
Metsä Board’s investor relations activities in
2021. All investor and analyst meetings were
held virtually, avoiding contacts. The company
also participated in virtual investor conferences
organised by brokerage firms.
The 2021 AGM was held with extraordinary
meeting procedures. It was only possible to
attend the meeting by voting in advance and
asking questions and possible counter proposals
in advance.
In connection with the publication of interim
reports, Metsä Board organises a conference
call in which the CEO and CFO present the
interim report and the audience can ask ques-
tions. Presentation materials and recordings
of the conference call are available on the
company’s Investors website.
Metsä Board’s investor communication
makes use of social media through Twitter and
LinkedIn accounts.
Analyst coverage
At least the following brokerage firms conducted
analyses of Metsä Board in 2021: ABGSC,
Carnegie, Danske Equities, DnB, Inderes, Kepler
Cheuvreux, Nordea Markets, OP, SEB and UBS.
The contact details of the analysts and some
of the consensus forecasts are available on the
company’s Investors website. Metsä Board is
not responsible for the content, accuracy or
scope of the analysts’ views.
Annual general meeting in 2022
The registration period and advance voting
period commence on 2 March 2022 at 12 noon.
EET, after the deadline for delivering counter-
proposals to be put to a vote has expired. A
shareholder, who is registered in the Company’s
shareholders’ register and who wishes to partici-
pate in the general meeting by voting in advance,
must register for the general meeting by giving
a prior notice of participation and by delivering
his/her votes no later than on 18 March 2022 at
4 p.m. EET, by which time the notice and votes
must be received. When registering, requested
information such as the name, personal
identification number or company identification
number, address and telephone number of the
shareholder, as well as requested information on
a possible proxy representative (name, personal
identification number), must be notified. The
personal data submitted to Euroclear Finland
Ltd. will be used only in connection with the
general meeting and with the processing of
related registrations.
Shareholders with a Finnish book-entry
account can register and vote in advance on
certain matters on the agenda during the period
2 March 2022 at 12 noon–18 March 2022 at 4
p.m. EET in the following manners:
a) electronically via the Company’s website at
www.metsaboard.com/AGM2022.
The shareholder’s book-entry account num-
ber is required for the electronic advance voting.
Terms and instructions for electronic advance
voting are available on the website; or
b) by mail or e-mail by sending the voting
instructions form available on the Company’s
website to Innovatics Oy, Yhtiökokous / Metsä
Board Oyj, Ratamestarinkatu 13 A, 00520
Helsinki or by e-mail to agm@innovatics.fi.
Profit distribution
The Board of Directors proposes to the Annual
General Meeting to be held on 24 March 2022, a
dividend of 0.41 euros per share be distributed
for the financial year 2021.
The distribution will be paid to shareholders
who on the record date for the distribution, 28
March 2022, are recorded in the shareholders’
register held by Euroclear Finland Ltd. The Board
of Directors propose that the distribution is to be
paid on 7 April 2022.
Contact details for investor relations
Katri Sundström
Vice President, Investor Relations
Tel. +358 10 462 0101
General questions and comments related
to investor relations can be emailed to:
metsaboard.investors@metsagroup.com.
Metsä Board has a global sales network.
To locate contact details of Metsä Board
sales oces, please visit company website
www.metsaboard.com/contacts.
Business ID 0635366–7
METSÄ BOARD CORPORATION
P.O. Box 20
FI-02020 METSÄ, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Financial reporting in 2022
Silent period Financial report Publication date
1 January–9 February 2022 Financial Statements Bulletin 2021 10 February 2022
1 April–27 April 2022 Interim Report for January–March 2022 28 April 2022
1 July–27 July 2022 Half-Year Financial Report for January–June 2022 28 July 2022
1 October–26 October 2022 Interim Report for January–September 2022 27 October 2022
Investor relations and investor information
168
169
To the Board of Directors of Metsä Board Corporation
We have undertaken a reasonable assurance engagement on the iXBRL
marking up of the consolidated financial statements for the year ended 31
December, 2021, included in the Metsä Board Corporation’s digital files
743700KKB8Q035K38488-2021-12-31-en.zip prepared in accordance with
the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF
RTS).
The Responsibility of the Board of Directors and
Managing Director
The Board of Directors and Managing Director are responsible for prepa-
ring the report of the Board of Directors and financial statements (ESEF
financial statements) that comply with the requirements of ESEF RTS. This
responsibility includes:
• preparation of ESEF financial statements in XHTML format in accor-
dance with Article 3 of the ESEF RTS
• marking up the consolidated financial statements included in the ESEF
financial statements with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
• ensuring consistency between ESEF financial statements and audited
financial statements.
The Board of Directors and the Managing Director are also responsible for
such internal control as they deem necessary to prepare the ESEF financial
statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethical requi-
rements applicable in Finland, which apply to the engagement we have
performed, and we have fulfilled our other ethical obligations in accordance
with these requirements.
The auditor applies International Standard on Quality Control 1 and
accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory
requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express
an opinion on whether the marking up of the consolidated financial
statements included in the ESEF financial statements comply in all material
respects with the Article 4 of the ESEF RTS. We conducted our reasonable
assurance engagement in accordance with International Standard on
Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
• the consolidated financial statements included in the ESEF financial
statements are, in all material respects, marked up with iXBRL tags in
accordance with Article 4 of the ESEF RTS, and;
• the ESEF financial statements and the audited financial statements are
consistent with each other.
The nature, timing and the extent of procedures selected depend on prac-
titioner’s judgement. This includes the assessment of the risks of material
departures from the requirements set out in the ESEF RTS, whether due to
fraud or error.
We believe that the evidence we have obtained is sucient and appropri-
ate to provide a basis for our opinion.
Opinion
In our opinion, the consolidated financial statements included in the
ESEF financial statements of Metsä Board Corporation’s identified as
743700KKB8Q035K38488-2021-12-31-en.zip for the year ended 31
December, 2021 are marked up, in all material respects, in compliance with
the ESEF Regulatory Technical Standard.
Our audit opinion relating to the consolidated financial statements of
Metsä Board Corporation’s for the year ended 31 December, 2021 is set
out in our Auditor’s Report dated 10 February, 2022. In this report, we do
not express an audit opinion, review conclusion or any other assurance
conclusion on the consolidated financial statements.
Helsinki 23 February, 2022
KPMG OY AB
Kirsi Jantunen
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report
on Metsä Board Corporation’s ESEF Financial Statements
