Metsä Board
Annual and Sustainability Report 2022
The world needs
solutions that support
the circular economy,
and fresh fibre
paperboards meet
this need.
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Contents
34 and 41
16
20
To achieve our climate
and water targets by
the end of 2030, we
have mill-specific plans
for investments and
measures.
We help our
customers achieve
their sustainability
targets.
The mitigation of climate
change, promotion of the
bioeconomy and the circular
economy, and resource
efficiency are strong drivers
of our operations.
Business operations
and value creation
2 This is Metsä Board
4 CEO’s review
6 Highlights of the year
8 Strategy and targets
10 Value creation
12 Operating environment
16 Product and service development
Sustainability report
20 Sustainability management
22 Progress in 2030 sustainability targets
23 Material topics
24 Material flows and circular economy
26 E – Environment
42 S – Social responsibility
52 G – Sustainability governance
60 Mill-specific information
61 Production capacities and environmental permit
limit violations
62 Disclosure in accordance with SASB Standard
64 Disclosure in accordance with TCFD recommendations
66 Principles of sustainability reporting
Financial development
72 Report of the Board of Directors
90 Consolidated financial statements
94 Notes to the consolidated financial statements
141 Parent company financial statements
144 Notes to the parent company financial statements
157 Auditor’s Report
161 Shares and shareholders
167 Taxes and key figures
Corporate governance
169 Corporate governance statement
176 Board of Directors of Metsä Board
178 Corporate Management Team of Metsä Board
180 Investor relations and investor information
In line with our strategy,
we invest in sustainable
growth.
9
1
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Focus on sustainable
fresh fibre paperboards
We focus on premium and recyclable fresh fibre paperboards,
that help our customers reduce their plastic use. Our paper-
boards are mainly used in consumer packaging and in retail
packaging solutions where demand is rather stable, regardless
of the economic situation.
A forerunner in
sustainability
Our products support the circular economy and they have a
smaller carbon footprint compared to many other packaging mate-
rials. Our future growth is based on more efficient use of resources
and raw materials. Our target is fossil free production and products
by the end of 2030.
Investing in
sustainable growth
Our ongoing and planned investments respond to the growing
demand for sustainable packaging materials. We are continuously
modernising our industrial operations to further strengthen our
competitiveness. We have a clear road map to implement our
ambitious sustainability targets. This includes investments and
explorations of alternative raw materials in cooperation with our
partners.
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 USA, we are the largest
supplier of folding boxboard. We expect the global demand for
paperboards to grow faster, at an annual rate of around 5%,
compared to other packaging materials.
This is
Metsä Board
We focus on premium fresh fibre paperboards and are a forerunner in
sustainability. Our strategy is to grow in fibre-based packaging materials
and renew our industrial operations.
We are part of the profitable Metsä Group and benefit from the good availability of our main raw material, northern wood.
Our self-sufficiency in pulp guarantees the consistent and high quality of the fibre and enables the growth of our paperboard business.
METSÄ GROUP
WOOD SUPPLY AND
FOREST SERVICES
(Metsä Forest)
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
50.2*% (68.2% of votes)
The company is listed
on Nasdaq Helsinki.
Metsäliitto Cooperative
100%
The parent company Metsäliitto Cooperative is
composed of over 90,000 Finnish forest owners.
Sales
EUR 7.0 billion
METSÄ SPRING
Innovation company
OWNERSHIP
* Information based on flagging release on 30 December 2022
2
350
300
250
200
150
100
50
0
600
500
400
300
200
100
0
30
25
20
15
10
5
0
18 19 20 21 22 18 19 20 21 2218 19 20 21 22
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Our ambitious targets
strengthen our position
as a forerunner in
sustainability
SALES SPLIT BY PRODUCT
% of sales
SALES SPLIT BY REGION
% of sales
Folding boxboard ���������������� 57
White kraftliners ����������������� 25
Market pulp ��������������������������15
Other �������������������������������������� 3
EMEA ������������������������������������66
Americas ������������������������������26
APAC region��������������������������� 8
A record year 2022
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
Read more on page 22
Our strong financial
position lays the foundation
for our future growth.
Interest-bearing net debt/
comparable EBITDA
0.2
Our financial target
is no more than 2.5
We are
2,248
Metsä Board employees in
17
countries
In 2022, we produced
1.9 million tonnes of
paperboard and
1.4 million tonnes
of pulp and BCTMP
We have
8 production units in Finland
and Sweden and deliver
products to approximately
100 countries
Our customers include
international brand
owners, packaging
converters, manufacturers
of corrugated products
and merchants
Our sustainable investments
are moving us closer to
fossil free operations.
The share of fossil free
energy of our total energy
consumption is
87%
Target: 100%
by the end of 2030
We procure wood from
forests where renewal and
biodiversity are safeguarded.
Of all the wood fibre we
procure, certified wood fibre
accounts for
83%
Target > 90%
by the end of 2030
3
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Record result in a challenging
business environment
We achieved an excellent result in 2022, and our financial position
at the end of the year was strong. We continued our sustainability
efforts to mitigate climate change and helped our customers
lower their use of plastic and reduce the carbon footprint of their
packages. All this builds a strong foundation for future growth,
which we seek through our sustainable and profitable investments.
everyone at Metsä Board carries out to achieve our goals. Since
2022, the personal performance goals of all Metsä Board employ-
ees have included at least one sustainability objective, which in my
case concerns safety at work.
Our strategy has proven its success
Our strategy has proved its sustainability and success in a
challenging market situation, and we will continue its systematic
implementation – growing sustainably in fibre-based packaging
materials. In recent years, we have strengthened our market
position in premium fresh fibre paperboards and have met the
quickly increasing demand for recyclable packaging materials
that can replace plastic in our main markets – Europe and North
America. In 2023, our paperboard capacity will increase following
the completion of our investments in folding boxboard in Husum
and kraftliner in Kemi. To continue our sustainable growth, we
have launched pre-engineering for a new folding boxboard mill with
an annual capacity of 800,000 tonnes in Kaskinen. A potential
investment decision could be made in 2024 at the earliest.
Resource efficiency helps us reduce
the environmental impact of packaging
Our resource-efficient paperboards made of renewable raw mate-
rial have a smaller carbon footprint than many other packaging
materials, and they are an excellent match to circular economy
needs. Packaging design carried out in cooperation with our
customers helps us continuously reduce the amount of packaging
material and waste.
Resource and production efficiency play a key role in the
pre-engineering for the new folding boxboard mill in Kaskinen. We
aim for the world’s most resource-efficient paperboard mill, with
For Metsä Board, 2022 was an exceptional year in many ways. As a
paperboard company, we achieved a record result in a challenging
business environment that proved difficult to predict. Our sales
were nearly EUR 2.5 billion, and our comparable operating result
was EUR 521 million. At 20.9%, our return on capital employed
exceeded our long-term target by a wide margin. Our result
improved especially thanks to the higher prices of fresh fibre
paperboards supported by a favourable currency effect. Success-
ful price increases exceeded the rapid cost inflation. In addition, the
profitability of Metsä Fibre, our associated company, was boosted
by the higher market pulp prices.
The past year was overshadowed by Russia’s war against
Ukraine, which is continuing in 2023. In addition to human suffer-
ing, Russia’s military operations triggered the most severe energy
crisis in Europe’s recent history, making energy self-sufficiency a
significant competitive factor for many companies. Metsä Board’s
energy self-sufficiency is at a high level, which offers stability to our
operations. The new recovery boiler and turbine that started up
at the Husum pulp mill in December, will increase the production
of bioenergy and take us closer to our goal of entirely fossil free
production by the end of 2030.
Valuable recognition of our sustainability efforts
During the year, we continued our long-term work to promote
sustainability. For the second year in a row, we secured a place on
the ’A’ List in all of CDP’s three environmental focus areas: climate
change mitigation, water security and forest protection. Only
12 out of 15,000 companies achieved the same excellent result.
In EcoVadis’s evaluation, we were in the top 1% among paper,
paperboard and packaging manufacturers, receiving full points
in the environment section. These acknowledgements reflect our
role as a forerunner in sustainability and the systematic work that
4
CEO’S REVIEW
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Our resource-ecient
paperboards made of
renewable raw material have
a smaller carbon footprint
than many other packaging
materials, and they are an
excellent match for circular
economy needs.
world-class competitiveness and a product concept that enables
carbon footprint reduction. By utiliing the best available tech-
nology, the consumption of raw materials, energy and water per
tonne of folding boxboard produced can be significantly reduced
compared to our current production units.
Strong financial position supports growth
Our strong financial position creates a firm foundation for future
and planned growth investments in fibre-based packaging
materials. In addition to our financial and sustainability targets,
our decision making is guided by our long-term goal of increasing
shareholder value. Metsä Board’s Board of Directors proposes
that a dividend of EUR 0.58 per share be distributed for 2022. The
proposal is in line with our dividend policy and reflects confidence
in our future success.
Our excellent performance in a volatile operating environment
is proof not only of a well-functioning strategy but also of a compe-
tent and motivated personnel. I wish to thank all our employees for
their great work and all our customers and other partners for their
good cooperation.
Mika Joukio
CEO
CEO’s review
5
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Highlights in
2022
In 2022, Metsä Board delivered a strong financial result. We continued
the systematic implementation of our strategy and cooperation with our
customers to create packaging solutions that support the circular economy.
Pre-engineering for the
world’s most resource-
efficient paperboard
mill started
Metsä Board started pre-engineering work
for a new folding boxboard mill, with an
annual capacity of approximately 800,000
tonnes, at the Kaskinen mill site in Finland.
Read more on p. 9
Innovating
for circularity
Golf ball packaging takes on a second life as an insect hotel.
The innovative packaging was a result of a co-creation
workshop at Metsä Board’s Excellence Centre. In total 45
co-creation workshops were organised with customers and
partners during the year. Read more on p. 16.
6
BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Business operations and value creation
Solutions for plastic reduction
and recyclability
Metsä Board’s dispersion coated barrier paperboard helped
several brands, including the U.S.’s fastest growing cookie
company, Crumbl Cookies, to reduce plastic and lightweight
their packaging. Sales of dispersion coated barrier board have
grown rapidly, and the aim is to increase its share up to half of
the Kyro mill’s production capacity in 2023. Read more on p. 16.
Recognitions for systematic work
for sustainability
Metsä Board was recognised again with an outstanding triple
CDP ’A’ score for its environmental leadership in climate change,
water security and forests. Only 12 companies achieved a triple
‘A’ out of nearly 15,000 companies scored.
Metsä Board was again awarded Platinum rating by EcoVadis for
the company’s sustainability and corporate social responsibility,
scoring the full 100/100 in the Environment section for the first
time.
Metsä Board won for the second time both the Finnish Circular
Economy Award and the Finnish Quality award in the Excellence
Finland assessment using the international EFQM model. Read
more on p. 21.
Renewal of the Husum
pulp mill is an important
step towards our goal
of 100% fossil-free
production
The new recovery boiler and turbine,
started up in December, will increase
the bioenergy production of Husum
pulp mill and improve the integrate’s
electricity self-suffiency. Read more on
p. 9.
A LIST
2022
CLIMATE FORESTS WATER
7
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Purpose
Advancing the bioeconomy and
circular economy by efficiently
processing northern wood into first-
class products.
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.
Values
Reliability
Cooperation
Responsible profitability
Renewal
Megatrends
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.
Urbanisation
Population growth Climate change
Biodiversity loss
Digitalisation
8
25
20
15
10
5
0
60
50
40
30
20
10
0
18 19 20 21 22 18 19 20 21 22
18 19 20 21 22
BUSINESS OPERATIONS AND VALUE CREATION
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
We invest in sustainable
and profitable growth
Metsä Board has significant investments under-
way and in the pipeline to achieve sustainable
growth in fibre-based packaging materials. In
line with our strategy, we are also renewing our
industrial operations to further strengthen our
competitiveness. By using the best available
technology, we improve our production and
resource efficiency and reduce the carbon
footprint of our products.
We will increase the annual production capac-
ity of folding boxboard at the Husum integrated
mill by some 200,000 tonnes and of white
kraftliners at the Kemi paperboard mill by some
40,000 tonnes. We expect both investments to
be completed in the second half of 2023.
The new recovery boiler and turbine of the
Husum pulp mill started up at the end of 2022.
This increased the mill’s bioenergy production
and considerably improved the integrate’s
energy self-sufficiency. In the renewal’s second
phase, during the 2020s, an investment decision
will be made concerning the renewal of the mill’s
fibre line. The renewal will strengthen the Husum
integrate’s role as an efficient and sustainable
platform for the long-term development of
paperboard production and is an important step
towards our target of entirely fossil free mills.
In the autumn of 2022, we initiated a
pre-engineering process for the new Kaskinen
paperboard mill, with an annual capacity of
800,000 tonnes. A potential investment decision
will be made in 2024 at the earliest. The planning
of the new mill is based on fossil free production,
world-class resource and production efficiency,
and a product concept that reduces carbon
footprint.
Read more on Metsä Board’s investments at
COMPARABLE RETURN
ON CAPITAL EMPLOYED
%
INTEREST-BEARING NET
DEBT / COMPARABLE
EBITDA
DIVIDEND /
NET RESULT
Target > 12% Target < 2.5 Target at least > 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 efficiency.
Premium supplier
Effective innovation
Safe and efficient 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
9
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Resources Business model
People and partnerships
• 2,248 employees in 17 countries
• 25 apprentices
• Active cooperation with local communities and educational
institutions
Production and supply chain
• More than 3,600 suppliers
• 8 production units in Finland and Sweden
• Deliveries to approximately 100 countries
Natural resources
• 8.3 million m
3
of sourced wood of which 83% is certified
• Total energy consumption 12.0 TwH of which 87% is fossil
free
• Water intake 110 million m
3
• 355,000 dry tonnes of purchased pigments, adhesives and
other raw materials
Intangible assets
• R&D expenditure EUR 6 million
• An Excellence Centre in Äänekoski, Finland, and a satellite
centre in Norwalk, the United States
• Recoqnition for premium quality paperboards
Economic capital
• Capital invested EUR 2.7 billion
• 57,000 shareholders in B series and 10,000 in A series
We produce resource-efficient fresh fibre paperboards from
renewable raw materials, which support the principles of the
circular economy and offer an alternative to fossil-based packaging
materials. We are part of Metsä Group, and benefit from its unique
value chain, from pure northern fibre to premium end products. We
have high energy self-sufficiency, and our holding in our associated
company Metsä Fibre ensures our over self-sufficiency in pulp.
Our production is located in Finland and Sweden, and we have
sales around the world. Our main markets are Europe and North
America.
OTHER
3% (of sales)
MARKET PULP
15% (of sales)
FOLDING BOXBOARD
57% (of sales)
OUR SALES IN 2022
EUR 2,480 million
WHITE KRAFTLINERS
25% (of sales)
We create value and well-being,
with respect for nature
We help our customers achieve their sustainability targets with our 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.
10
BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
ImpactsOutputs
Customers
• Recyclable and sustainably produced products with a smaller
carbon footprint
• Innovative and material-efficient packaging solutions that help
reduce the use of plastic
• Customer satisfaction NPS (Net Promoter Score) 34
Suppliers
• EUR 2.0 billion purchases from suppliers
• 99% of suppliers are committed to the Supplier Code of
Conduct
• 15% of target group suppliers have set their own SBTi targets
Personnel
• EUR 217 million paid to employees as wages and benefits
• 100% of the personnel have completed the Code of Conduct
training
Shareholders
• A sustainable investment; several recognitions from ESG
evaluations conducted by third parties
• EUR 206 million distributed to shareholders of the parent
company as dividends
• 20.9% comparable return on capital employed
Common value creation
• Taxes to be paid EUR 96 million
• Total investments EUR 304 million
• Aiming for a 100% fossil free future, with science-based targets
Further information on taxes on p. 167
Sustainable products and services
• 1.9 million tonnes of premium fresh fibre paperboards
• 1.4 million tonnes of pulp and BCTMP
• 5 service entities that generate benefits throughout the
packaging value chain (360 Services)
• Common stock service improves availability and enables fast
delivery to the customer
Emissions and side streams
• Fossil-based CO
2
emissions 383,000 tonnes (Scope 1 and 2,
market-based)
• 96% of the used water is returned to the waterbodies after
treatment
• More than 99% of production side streams are used as
materials or energy
11
SUSTAINABILITY
REPORT
FINANCIAL
DEVELOPMENT GOVERNANCE
BUSINESS OPERATIONS
AND VALUE CREATION
Business environment
Paperboard is the fastest growing
packaging material
Paperboard accounts for around a third of the global packaging
market, and it is expected to experience faster growth than other
packaging materials – an average annual rate of 5%. The main
growth drivers include the consumers’ increasing environmental
awareness, which favours recyclable packages, and the ease of
packaged food in daily life.
The value of the global packaging market
is around USD 1 billion
Annual growth is approximately 4% (2021–2026).
Paperboard demand
is influenced by
long-term trends
REGULATION
Regulation seeks to reduce the negative impacts
of climate change, the increasing amount of
waste and loss of biodiversity.
EASE
To make everyday life easier, consumers shop
online and buy ready meals.
PLASTIC REDUCTION
Brand owners and retailers are setting ambitious
goals for making packages reusable, recyclable
and compostable by 2025.
APPROPRIATENESS
Packages help protect products and thereby
prevent waste generation while avoiding
over-packaging.
BRAND PROMOTION IN E-COMMERCE
Positive unboxing experiences are becoming
increasingly important, leading to more branding
inside boxes.
THE GLOBAL PAPERBOARD PACKAGING
MARKET VALUE BY MATERIAL
Paperboard �������������������� 33%
Plastic����������������������������� 37%
Metal �������������������������������13%
Glass ��������������������������������� 4%
Other packaging
(mostly fibre-based) ����� 13%
Source: Smithers Information
12
BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Consumers prefer recyclable packaging,
policymakers drive reusability
According to Euromonitor, 66% of consumers try to have a positive
impact on the environment through their everyday actions.
Reducing plastic is the top measure taken, followed by reducing
food waste, recycling items, and using sustainable packaging.
Recyclability is seen as the key sustainability feature for a sustaina-
ble packaging. (source: Euromonitor International Global Lifestyles
Survey 2022)
With a recycling rate of 82%, paper packaging is the most
recycled packaging material in the EU, while the plastic recycling
rate is 38%. (Source: Eurostat)
Reusability is favored in EU’ s waste hierarchy, although many
third-party certified LCA studies show that reuse or refill is not
always the best option for the climate and environment.
The main purpose of packaging is to protect products, thereby
preventing waste. Packaging accounts for only 5% of the total
global food system greenhouse gas emissions. (Source: the UN
and the EC)
Consumers responded to the inflationary
environment of 2022
Rapid inflation has reduced consumers´ purchasing power and
forced them to reconsider their consumption habits.
The demand for packaged food has remained stable. Con-
sumers have moved to less expensive products and private label
products and are opting for discounters. Purchases of durables
and luxury products are being postponed.
Despite the pressure to save, the majority of consumers are
eager to catch up on experiences they missed out during the
pandemic.
Metsä Board’s paperboards are especially used in food packaging, which is more defensive in nature
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,
point-of sale displays and
solutions
E-commerce
Other consumer packaging
Source: Metsä Board’s estimates
13
SUSTAINABILITY
REPORT
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 2022
• share of all deliveries
by region
28% 68% 4%
• delivery volumes
503,000 tonnes 1,239,000 tonnes 75,000 tonnes
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
• Demand growth for retail-ready
packaging in stores
• Promotion and differentiation 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
• Demand growth 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
Metsä Board’s paperboards have several growth drivers in its main market areas in Europe and
North America
Metsä Board has an established position in its main markets
– Europe and North America. It is a leading producer of folding
boxboard and white kraftliners in Europe and the largest supplier of
folding boxboard in the US. In 2022, demand for folding boxboard
and white kraftliners was strong, especially in the first half of the
year, and the average paperboard prices improved. Among other
things, demand was boosted by the pandemic-induced consump-
tion shift from services to packaged goods and concerns about the
availability of packaging materials. Demand began to normalise
towards the end of the year. In the long term, the increasing
demand for sustainably produced fresh fibre paperboards used to
replace plastic is expected to continue.
Strong position
in a growing market
14
12 13 14 15 16 17 18 19 20 21 22
BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Metsä Board is Europe’s largest producer of folding boxboard and white kraftliners
Pulp market
PRODUCERS OF
WHITE KRAFTLINERS IN EUROPE
Total capacity 2.1 million tonnes (excl. Russia)
PRODUCERS OF
FOLDING BOXBOARD IN EUROPE
Total capacity 4.0 million tonnes
Metsä Board ������������������ 32%
Peer 1 ������������������������������ 25%
Peer 2 ������������������������������14%
Peer 3 ������������������������������12%
Peer 4 ������������������������������10%
Peer 5 ��������������������������������7%
METSÄ FIBRE’S PULP SALES
BY MARKET AREA, %
Europe ���������������������������� 46%
APAC ������������������������������� 44%
MEA, Americas���������������10%
METSÄ FIBRE’S PULP DELIVERIES
BY END USE, %
Paperboards ������������������ 35%
Printing papers ������������� 27%
Tissue papers ���������������� 30%
Speciality papers ������������ 8%
Metsä Board ������������������ 34%
Peer 1 ������������������������������� 21%
Peer 2 �����������������������������20%
Peer 3 ������������������������������� 6%
Peer 4 ������������������������������� 5%
Others �����������������������������14%
Sources: the companies’ websites, RISI, Metsä Board’s own estimates
Source: Fastmarkets Foex
Globally, about 181 million tonnes of pulp made from fresh fibre is used each
year, of which 112 million tonnes is pre-integrated into e.g. paper or board
production. The remainder, 69 million tonnes, is sold to the market, and consists
mainly of bleached softwood and hardwood pulp. Demand and prices for pulp
can vary from year to year and are influenced, among others, by the general
economic situation. In the long term, megatrends such as urbanisation and
emerging economies will support demand for sustainably produced pulp.
Demand growth will be sustained by the development of tissue and packaging
board products. Also new products, such as pulp-based textile fibres will play an
increasingly important role in the future. Market pulp supply has been limited in
recent years by logistical bottlenecks and a number of planned and unplanned
production stoppages.
Metsä Board’s associated company Metsä Fibre is a leading producer of market softwood pulp (NBSK)
Megatrends drive long-term demand for sustainably produced pulp
Metsä Board
is the biggest
producer of
coated white
kraftliners
globally.
Metsä Board aims to be self-sufficient in pulp, which ensures
consistently high quality in paperboard production. Metsä Board
produces chemical pulp and bleached high-yield pulp (BCTMP),
which are used in our own paperboard production and 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.
Metsä Fibre is constructing a new bioproduct mill in Kemi. Its
annual capacity is approximately 1.5 million tonnes of softwood
and hardwood pulp The mill is expected to be completed in
2023, and it will replace the current pulp mill in Kemi, which has
an annual capacity of around 610,000 tonnes.
Europe
China (net)
1,600
1,400
1,200
1,000
800
600
400
SOFTWOOD PULP PRICE DEVELOPMENT
IN EUROPE AND CHINA
USD/tonnes
15
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Our R&D aims for recyclability
and resource efficiency
Promoting the goals of the circular economy drives the development of packaging
materials throughout the packaging sector’s value chain. The requirements for packages
are increasing, and cooperation among all the value chain operators is important.
Metsä Board has been an active participant in the 4evergreen
alliance, covering the entire packaging value chain, since its
establishment. The goal of 4evergreen is to make all fibre-based
packaging recyclable by 2025 and raise the recycling rate in the
EU from the current 82% to 90% by 2030. In 2022, 4evergreen
published packaging design guidelines, as well as instructions for
collecting and sorting fibre-based packaging and for assessing
the recyclability of packaging. They support the recycling of fibre-
based packaging and promote the competitiveness of fibre-based
packaging against other packaging materials.
Aiming for world-class resource efficiency
and a reduced carbon footprint
Ensuring and developing the recyclability and compostability of
paperboards is one of the key goals of our product development
process. In the fibre-based packaging material circular economy,
our task is to provide the market with premium fresh fibre
paperboards as resource-efficiently as possible, help replace fos-
sil-based materials and reduce the carbon footprint of packaging.
We continue to focus on lightweighting of paperboard and
developing recyclable protective barrier coatings for use in food
packaging. Our competence in lightweighting of paperboards plays
a key role in the pre-engineering of the Kaskinen folding boxboard
mill, launched in 2022, which builds on fossil free production and
significantly lower consumption of wood, energy and water per
tonne of folding boxboard produced, compared to current produc-
tion units. We aim for world-class resource efficiency and a product
that enables the reduction of the carbon footprint.
We are developing the resource efficiency of all our mills and
make use of artificial intelligence. For example, at the Äänekoski
paperboard mill, we can now locate the reason for process disrup-
tions much faster thanks to new AI technology. The technology
analyses the underlying causes of visual defects detected by AI
based machine vision and looks for deviations among the 10,000
variables measured at the mill, also accounting for process delays.
This helps target the right corrective measures more quickly,
reducing the time lost due to disruptions.
In the biobarrier programme launched in 2021, we continued
to study new alternative products for reducing plastic. Several
While delicious gourmet cookies have made
Crumbl Cookies the fastest-growing cookie
company in the United States, its signature
pink boxes have helped establish the firm as a
social media sensation. Founded five years ago,
Crumbl Cookies now has more than 600 U.S. loca-
tions, using hundreds of thousands of cookie boxes
per week. By switching to Metsä Board’s lightweight
dispersion barrier board, Crumbl was able to to
reduce the weight of the package by 32% and reduce
its carbon footprint by more than 50%.
Large-scale
material savings
16
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potential products are being tested in the laboratory, and some
proceeded to production testing last year. In accordance with our
product development process, the prerequisites for sales and
production will first be determined before making decisions about
commercialisation.
In 2022, we established a systematic development programme
for reducing the use of all fossil-based raw materials. As part of this,
we work with suppliers to find ways to reduce the carbon footprint
of the raw materials we purchase. We have set as our goal that
by the end of 2030, all the solutions and polymers developed for
paperboards will be based on fossil free raw materials.
Deeper customer cooperation
We used our 360 Services to further strengthen our customer
relationships. The services cover five areas: Sustainability Service;
Packaging Design Service; Technical Service; R&D Service; and the
Supply Chain and Digital Service.
We helped our customers, for example, with life-cycle assess-
ments of packaging, data-based comparisons of the environmental
impacts of different materials, and with concrete packaging solu-
tions for improving recyclability and material efficiency. In 2022, we
organised 45 packaging development workshops at our Excellence
Centre in Äänekoski.
Metsä Group and Fortum’s ExpandFibre programme promoting
the circular bioeconomy continued in 2022. Among other things,
the programme focused on organising cooperation with packaging
design companies and packaging technology companies and
developing solutions to packaging challenges identified in develop-
ment workshops. One example of these efforts was the moderni-
sation of the pastry packaging used by bakeries, with Viipurilainen
Kotileipomo as the pilot company. The packaging was developed
with usability, ecology and layout in mind. The result was a pastry
package that is easy to assemble, and that reduces the need for
material by 25% and carbon dioxide emissions by roughly 34%.
Metsä Group’s 3D fibre product has
been produced at Metsä Group’s and
Valmet’s demo plant in Äänekoski
since May 2022. Using brand new
technology, the products are pressed
from wood fibre into their final form
and their properties can be tailored
during the production process
according to the intended purpose.
Ready-to-use three-dimensional
Muoto products are suitable for such
applications as food packaging. If the
market interest and product viability
can be proved on a large scale, Metsä
Group will consider building a larger
production unit.
The 3D Muoto®
innovation
replaces plastic
17
Mitigating climate change,
promoting biodiversity,
using resources eciently,
and developing a
responsible corporate
culture and supply chain
are at the core of our
sustainability eorts.
SUSTAINABILITY REPORT
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Sustainability Report
Sustainability Report
20 Sustainability management
22 Progress in 2030 sustainability targets
23 Material topics
24 Material flows and the circular economy
E
Environment
27 Forest biodiversity and carbon storage
30 Sustainable products
32 Climate and energy
36 Climate change creates risks and opportunities
38 Other emissions
39 Waste and by-products
40 Water
S
Social responsibility
43 Workplace community
48 Safety at work
50 Product safety
G
Sustainability governance
53 Culture of doing the right thing
54 Sustainability of the supply chan
58 Advocacy
Tables and reporting principles
60 Mill-specific information
61 Production capacities and environmental permit
limit violations
62 Disclosure in accordance with SASB Standard
64 Disclosure in accordance with TCFD
recommendations
66 Principles of sustainability reporting
68 Assurance report
19
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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.
Sustainability governance model
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
company’s strategy, long-term business and investment plans, risk
assessments and annual action plans approved by the Board of
Directors.
The CEO is responsible for the implementation of the sustaina-
bility measures per instructions provided by the Board. In accord-
ance with the annual plan, the CEO presents to the Board a review
of environmental matters and a sustainability review focusing on
the progress towards sustainability targets twice a year, as well as
the reviews of work safety and R&D once a year. The company’s
Corporate Management Team prepares sustainability-related
matters before the CEO presents them to the Board. The Board
discusses and approves the sustainability matters presented by
the CEO, including the sustainability targets and related investment
plans, and monitors their implementation annually.
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, participates in Metsä Group’s Sustainability Process
Management Team and reports on the realised results of the
sustainability measures to the Sustainability Process Management
Team quarterly.
The CFO chairs Metsä Board’s Risk Committee, which deals with
sustainability-related risks as part of the company’s general risk
assessment. The results of the company’s risk assessment, includ-
ing risks related to sustainability, are presented to the Board and
the Audit Committee twice a year. In addition, the Audit Committee
handles biannually an information security review and annully a
compliance report. Other sustainability issues, such as investment
plans, are also presented to the Board and the committees as
appropriate.
Metsä Board’s Product Safety and Sustainability Director
reports on the realisation of sustainability and development needs
When it enters into force, the new EU directive concerning sustainability
reporting will have a major impact on corporate sustainability reporting.
At Metsä Board, we have initiated preparations by adopting the ESG
structure in our current sustainability report and by acquainting
ourselves with the new reporting standards and verifying our key sustain-
ability information. We have also adopted a reporting tool that enables the
digital and machine-readable reporting of both financial and sustainability
information.
“There will be a stronger link between sustainability reporting and
financial reporting. For example, Metsä Board reports on its climate
impact, but it must also consider climate-related risks from a business
perspective,” says Henri Sederholm, CFO.
Sustainability reporting is developing
Sustainability
management
20
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Sustainability report
to the company’s SVP, Development, and presents topical sustain-
ability matters to the entire Corporate Management Team on a
regular basis. The Product Safety and Sustainability Director leads
a team of experts, which works in close cooperation with produc-
tion, wood supply, procurement and logistics, HR, marketing and
sales, communications, investor relations and legal affairs. Wood
supply, as well as sourcing and legal affairs, is centralised in Metsä
Group. Sustainability is part of the entire personnel’s daily work.
We also expect sustainability from our suppliers, customers and
other partners. Further information on sustainability governance
can be found on pages 52–57.
The link between sustainability and remuneration
The personal performance bonus target of each Metsä Board
employee includes an ESG target. The CEO’s remuneration is
based on Metsä Board’s operating result (weighting 50%) and
the strategic targets defined by the Board of Directors (weighting
50%), including the sustainability targets, as well as the realisation
of Metsä Group’s EBIT multiplier. In 2022, the CEO’s sustainability
target was related to safety at work.
The remuneration of the other members of the Corporate
Management Team is based on Metsä Board’s operating result
(weighting 30% or 50%), the targets of their respective areas of
responsibility (weighting 50% or 70%), including the sustainability
targets, as well as Metsä Group’s EBIT multiplier. In 2022, the
sustainability targets of the other Corporate Management Team
members related to the reduction of energy and water use,
sustainability cooperation with customers, and the development of
sustainable products, for example.
Sustainable and ethical operations, as well as compliance with the law, are the foundation of Metsä Board’s business operations.
Our operating methods are based on Metsä Group’s Code of Conduct and policies. Our sustainability targets are based on our
company’s strategy, Metsä Group’s sustainability targets and materiality analysis on corporate responsibility (page 23).
Board of Directors
Corporate Management Team
Product Safety and
Sustainability Director
Business functions
Metsä Group Sustainability Process
Management Team
SUSTAINABILITY MANAGEMENT AT METSÄ BOARD
ESG assessments
Metsä Board actively participates in the following ESG and sustainability assessments:
ESG ASSESSMENT RATING COMMENT UPDATED
CDP Climate Change: A
Water Security: A
Forests: A
Metsä Board is at the highest level in combating climate change and in the
sustainable use of water and forests. The scale ranges from D to A.
Q4/2022
EcoVadis 87 Metsä Board is at the highest level, Platinum, which puts it among the top 1%
in the paper, paperboard and packaging manufacturers category. The highest
possible score in the assessment is 100.
Q2/2022
MSCI AAA Metsä Board is at the highest level. The scale ranges from CCC to AAA. Q4/2021
Sustainalytics 14.6 Metsä Board has a low risk of experiencing significant financial impacts caused
by ESG factors. A score of 0 indicates the lowest risk and 100 the highest risk.
Q3/2022
ISS ESG Corporate Rating B- Metsä Board is at Prime level. The scale ranges from D- to A+. Q4/2022
ISS QualityScore Environment: 2
Social: 6
Governance: 3
A score of 1 indicates the lowest governance risk and high-level sustainability
reporting, while 10 is the weakest score.
Q4/2022
VigeoEiris,
Moody’s ESG Solutions
68 Metsä Board is on the Advanced level. The highest possible score in the
assessment is 100.
Q3/2021
Circulytics® B Metsä Board is rated B in the Ellen MacArthur Foundation’s Circulytics®
assessment. The scale ranges from E to A.
Q4/2022
21
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TARGET TARGET 2030 ACTUAL 2022 PROGRESS
E – ENVIRONMENT
Safeguarding biodiversity
Share of certified wood fibre >90% 83%
MG: Retention trees at regeneration sites 100% 95%
MG: Four high biodiversity stumps in harvesting sites 90% 90%
Mitigating climate change and reducing emissions
Fossil-based carbon dioxide emissions, tonnes (Scope 1 and Scope 2, market based) 0 t 383,098 t
Share of fossil free energy of total energy consumption 100% 87%
Share of target group suppliers have set SBTi targets by 2024* (Scope 3) 70% 15%
Fossil free raw materials and packaging materials, share of dry tonnes 100% 99.3%
MG: Area of regeneration and management of young stands from the 2018 level 100% 2.8%
MG: The amount of carbon stored in wood products from the 2018 level + 30% -12.4%
Sustainable production and efficient use of resources
Improvement in energy efficiency from the 2018 level >+ 10% 2.7%
Reduction in the use of process water per produced tonne from the 2018 level - 30% - 12.2%
Utilisation of side streams 100% 99.9%
S – SOCIAL RESPONSIBILITY
Responsible corporate culture and accident free working environment
Ethics index in ethics barometer 100% 85%
Total Recordable Injury Frequency (TRIF) per million hours worked 0 6.7
G – SUSTAINABILITY GOVERNANCE
Sustainable supply chain
Suppliers’ commitment to the Supplier Code of Conduct, share of total purchases 100% 99%
Supplier background check passed, share of total purchases 100% 96%
Supplier sustainability assessment passed, share of total purchases 100% 63%
Traceability of raw materials, share of total purchases 100% 97%
MG = Target at Metsä Group level
* 70% of our non-fibre suppliers and of the logistics operators related to our customer deliveries, measured as a share of our total purchases, would set themselves targets in accordance with the
SBTi by 2024.
Progress
in our 2030 sustainability targets
In 2022, our successes included reducing fossil-based carbon dioxide emissions as well
as positive developments in safety at work and the monitoring of supplier responsibility.
Lower production in the last quarter of the year weighed on the full year performance
in energy efficiency and process water use.
Progress in 2022 compared to the previous year.
Above target
On target
Below target
22
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TOPIC IMPACTS INDICATORS FOR SUSTAINABILITY 2030 TARGETS
E – ENVIRONMENT
1. Safeguarding biodiversity
and ecologically sustainable
forestry
We safeguard and enhance biodi-
versity byincreasing the conditions
required by species and preserving
valuable habitats.
MG: 100% of regeneration felling sites have retention trees
MG
: 100% of harvesting sites have high biodiversity stumps
MG: 0% young stand management have only spruce remaining
MG: 10,000 actions to enhance biodiversity
2. Mitigating climate change
and reducing emissions
We mitigate climate change and
reduce fossil-based carbon dioxide
emissions, minimising the environ-
mental impact of products and ensur-
ing that carbon is bound in forests and
stored in wood products.
0 t fossil-based carbon dioxide emissions, (Scope 1 &2)
70% of target group suppliers have set SBTi targets by 2024 (Scope 3)
100% fossil free raw materials and packaging materials
MG: +30% forest regeneration and young stand management (ha. compared to 2018)
MG: +50% forest fertilization (ha. compared to 2018)
MG: +30% share of continuous cover forestry in peatlands
MG: +30% amount of carbon stored in wood products (ha. compared to 2018)
3. Sustainable production and
efficient use of resources
We use natural resources efficiently
and reduce waste.
-35% process water use per tonne of production (m
3
/t, compared to 2018)
10% improvement in energy efficiency (compared to 2018)
0 t of process waste sent to landfills
S – SOCIAL RESPONSIBILITY
4. Respecting everyone and
doing the right thing
We do the right thing – we respect
each other and value diversity.
100% implementation of ethics barometer measures
100% anonymous recruitment for open recruitment
>30% women in management positions
5. Promoting safety and
well-being at work
We promote safety across the
value chain.
0 accidents at work (TRIF)
AAA job satisfaction among personnel
G – SUSTAINABILITY GOVERNANCE
6. Innovation and open-
minded cooperation and
7. The impact of
forest-based bioeconomy
for society
We develop new wood-based products
with partners.
We know the origin of our raw
materials. We favour responsible
suppliers.
100% traceable raw materials
>90% share of certified wood
100% commitment to Supplier Code of Conduct
100% core supplier assessments and audits
100% common sustainability targets with key partners
Sustainability report
Material topics
We focus our sustainability work on the most material topics for us and our stakeholders.
Metsä Group’s materiality assessment regarding sustainability was updated in autumn 2022,
and Metsä Board will report according to the updated topics and targets starting with the
reporting of 2023 data.
The process used for the materiality assessment consisted of
three stages: identifying the material sustainability topics; prioritis-
ing them; and confirming them.
Sustainability frameworks and standards, regulatory require-
ments, trends, and Metsä Group’s strategy were used to identify
the material sustainability topics. In addition, interviews with
internal and external stakeholders were carried out to find out their
expectations towards the company. The external stakeholders
interviewed included customers, investors, goods and service
suppliers, and NGOs.
The identified topics were prioritised in a workshop for Metsä
Group’s management, where the significance of the topics’ impacts
on Metsä Board’s and entire Metsä Group’s business as well as
the surrounding society, people and nature was assessed (so
called double materiality). The seven material sustainability topics
identified in the materiality assessment concern all Metsä Group’s
business operations and account for the most significant impacts
across the value chain.
Metsäliitto Cooperative’s Board of Directors confirmed the
material topics and the sustainability 2030 targets at the beginning
of the year 2023. We will report according to the updated topics
and targets starting with the reporting of 2023 data.
Material sustainability topics
23
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Renewable
wood-based raw
material
• We ensure that forests grow more
than they are used
• We promote biodiversity
• We use every part of the tree in the
best possible way
By the principles of the circular economy, we continuously invest in the viability of forests
and the resource efficiency of our processes, as well as in generating as little waste and
emissions as possible and keeping materials in circulation for extended periods.
The entire life cycle of fresh fibre
supports the circular economy
Promoting
recycling
• Our paperboards are recyclable and/or
compostable
• Fresh fibre is strong and can be recycled
several times
• We are actively involved in the 4ever-
green alliance and the European Paper
Packaging Alliance
99% of raw materials are fossil free
Wood-based
• Wood used for self-produced pulp, million m
3
5.4 (5.2)
• Purchased pulp, 1,000 t*, 558 (570)
• Wood used for purchased pulp, million m
3
2.9 (3.1)
Other
• Process chemicals, 1,000 t* 11.0 (8.6)
• Coatings, binders and pigments, 1,000 t* 315 (315)
• Packaging materials, 1,000 t* 30 (36)
* dry tonne
87% of the energy we use is fossil free
• Own fuel consumption, TWh 6.0 (5.4)
• Purchased electricity, TWh 5.2 (5.2)
• Purchased heat, TWh 0.8 (1.2)
Surface water accounts for nearly 100%
of water use
• Surface water, 1,000 m
3
110 (115)
• Groundwater*, 1,000 m
3
0.07 (0.06)
* mainly for hygiene and laboratory
Inbound material flows
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Resource-efficient
production
• We progress towards fossil free
production
• We use energy, water and materials
efficiently and recycle them in the
production process
• We utilise more than 99% of our pro-
duction side streams in cooperation
with our partners
Our products support the circular economy
• Paperboard, 1,000 t 1,890 (1,918*)
• Pulp and BCTMP, 1,000 t 1,409 (1,362)
• By-products recovered, 1,000 t 36 (50)
• Bioproducts, such as tall oil
• Bioenergy sold
* The 2021 figure has been revised.
Aiming for zero tonnes of fossil Scope 1 and
2 emissions
• Fossil-based CO
2
(Scope 1 + 2), 1,000 t 383 (439*)
• Fossil-based CO
2
e (Scope 3), 1,000 t 1,817 (1,855)
• Biogenic CO
2
, 1,000 t 1,951 (1,713)
• Other emissions: Sulphur and nitrogen compounds and
particles. See figures p. 60.
* The 2021 figure has been revised.
Around 96% of the water is returned to
waterbodies
• Treated wastewater, 1,000 m
3
58,740 (58,738)
• Cooling water 54,291 (57,486)
• Other emissions: COD, BOD, nitrogen and phosphorus
compounds, solids, AOX compounds. See figures p. 60.
Side streams and waste mainly for recovery
• Waste to materials use, 1,000 t 60 (46)
• Waste to energy, 1,000 t 74 (60)
• Landfill waste, 1,000 t 0.16 (0.34)
• Hazardous waste, 1,000 t 0.96 (1.6)
Outbound material flows
Circulating
paperboard solutions
• Paperboard is a clean and safe material
• We reduce the environmental impact of
packaging with smartly designed packages
that are suitable for their intended purpose,
reduce the use of raw materials, replace
plastic and are easy to recycle
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Environment
All Metsä Board production units have a certified ISO 9001 quality
management system, ISO 14001 environmental management
system, ISO 50001 energy management system, and an energy
efficiency system (EES). All our operations are covered by the
PEFC and FSC® certified Chains of Custody. In accordance with the
systems’ requirements, we conduct regular risk assessments and
internal and third-party audits of our operations.
All our mills have environmental permits issued by the
authorities, which specify the maximum limits for discharges into
Our environmental operations are guided by the principles of our environmental
policy, which concerns matters such as sustainable forest management, environ-
mental responsibility, the continuous improvement of our operations, resource
efficiency, stakeholder communication, and our suppliers’ sustainability.
Forest use is guided by Metsä Group’s principles for forest use and management.
In 2022, Metsä Group joined the global circular economy network of
the Ellen MacArthur Foundation, which brings together companies,
innovators, cities, universities and influencers. This cooperation sup-
ports our goal of being a forerunner in a fossil free circular economy.
“The circular economy is more than ramped-up waste management
and recycling of end products. The goal is to optimise material, energy
and information flows, and generate value across the entire value
chain and system. This calls for a dialogue with operators of the value
chain,” says Maija Pohjakallio, Metsä Group’s VP, Climate and Circular
Economy.
For example, in Äänekoski, wood supply and forest services, as well as
the operations of Metsä Board, Metsä Fibre, Metsä Spring and Metsä
Wood come together with other companies to form an industrial
ecosystem in which nearby production units benefit from one another.
Working together to promote
the circular economy
waterbodies and emissions into the atmosphere. The permits also
set limits for environmental noise and minimum requirements for
the monitoring of emissions and reporting on them.
We engage in continuous dialogue with our stakeholders. All
major projects such as new production lines always include an
environmental impact assessment, during which we hear the
opinions of local residents and other stakeholders.
License codes: PEFC/02–31–92 and FSC®-C001580
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Forest biodiversity
and carbon storage
We aim for vibrant, diverse forests that store carbon efficiently and mitigate the
impacts of climate change. We always require that the wood we use has a sustainable
origin. Our wood supply and forest services provide forest owners with measures
and services that promote biodiversity and strengthen forests’ carbon storage and
adaptation to climate change.
Indicators and progress
Metsä Group’s goal is that in 2030,
retention trees will be left on all
regeneration felling sites, and four
high biodiversity stumps per hectare
will be made in 90% of thinning and
regeneration felling sites.
In 2022, retention trees were left on 95%
(94) of Metsä Group’s regeneration
felling sites.
High biodiversity stumps were made on
90% (88) of Metsä Group’s thinning and
regeneration felling sites.
Metsä Group’s goal is to increase the
amount of carbon stored in forests
by 30% compared to 2018. This will
be achieved by increasing the area
of newly established forests and
the area covered by young stand
management.
In 2022, Metsä Group increased
the areas of newly established
forests and those covered by young
stand management by a total of
2.8% (3.8).
Metsä Group aims to increase the
amount of carbon bound in long-
lived products such as construction
materials by 30% compared to
2018.
Metsä Group’s long-lived products
produced in 2022 stored -12.4%
less (-1.2) of carbon compared to
2018.
30
20
10
0
TARGET
2030
AREA OF REGENERATION
AND MANAGEMENT OF
YOUNG STANDS, %
21 22
30
20
10
0
-10
-20
TARGET
2030
THE AMOUNT OF CARBON
STORED IN WOOD
PRODUCTS, %
19 20 21 22
100
80
60
40
20
0
TARGET
2030
HIGH BIODIVERSITY
STUMPS IN HARVESTING
SITES, %
18 19 20 21 22
100
80
60
40
20
0
TARGET
2030
RETENTION TREES AT
REGENERATION FELLINGS
%
20 21 22
27
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Our operations
Sustainable forest use
The sustainable use of forests must account for all three pillars of
sustainability – environmental, social and economic. Sustainable
forest use creates wellbeing, mitigates climate change, maintains
biodiversity and prevents deforestation. Wood fibre – the renewa-
ble raw material provided by forests – is an important alternative to
fossil raw materials, and forest industry products play a significant
role in the national economy of Metsä Board’s home market: the
forest industry generates roughly a fifth of Finland’s export income
from goods.
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 for forest owners that their
forests remain viable for future generations.
The volume of wood in Finnish and Swedish forests has
increased in recent decades: the annual growth of forests
surpasses the volume of felling and natural removal of trees. In
2016–2021, forest felling in Finland accounted for an average of
91% of the country’s felling potential. However, the rate varied in
different regions. In Northern Finland, 76% of the estimated felling
potential was used, compared to 96% in Southern and Central
Finland (Source: Natural Resources Institute Finland).
In both Finland and Sweden, the law states that a forest must
always be regenerated after final felling. Forestry does not cause
deforestation in our wood supply area. Instead, deforestation in our
wood supply area in Finland and Sweden is caused by other types
of land use, such as infrastructure construction.
The targets of Metsä Group’s wood supply and forest services
extending until the end of 2030 will help us increase the amount
of carbon stored in the forests and long-lived wood products and
promote the biodiversity of forests.
• In commercial forests: Our ecological sustainability programme
focuses on increasing the carbon sinks of forests, as well as
improving forest biodiversity and water protection related to
forestry work.
• Outside commercial forests: Through its nature programme,
Metsä Group provides financial support every year to develop-
ment projects with a regional impact that promote biodiversity
and improve the condition of waterbodies. At the end of 2022,
the programme encompassed 16 projects, for which a total of
EUR 600.000 had been granted in subsidies.
Promoting biodiversity
We ensure the sustainable origin of wood and promote biodiversity
by using only traceable certified or controlled wood. Our goal is to
increase our share of certified wood fibre from 83% at present to
90% by the end of 2030 (p. 54–57).
Metsä Group’s key measures to increase biodiversity:
• We leave rare broadleaved trees in the forest: Since June 2022,
we only accept pine, spruce and birch, as well as aspen with
a diameter of less than 40 centimetres, in Finland. The tree
species excluded from our wood supply account for three per
cent of the volume of Finland’s growing stock, but these rare
species are significant in view of biodiversity and adaptation to
climate change.
• We increase the amount of decaying wood in forests: Decaying
wood is increased by retaining dead trees, leaving retention
trees preferably in groups, and making high biodiversity stumps
during thinning and regeneration felling. 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.
Decaying wood is important for many birds, insects and fungi,
some of which are threatened species.
• Mixed forests help us improve the biodiversity of forests and
their resilience against storms and insect damage, for example.
Metsä Group offers forest owners a forest renewal service
in which both spruce and pine are planted in the same area.
Broadleaved trees, such as birch, which spreads to stands
naturally, must also be retained in forests.
• In line with our policy, we recommend nature management
measures in herb-rich forests and voluntary protection of the
best sites. We thus direct nature management measures to
where they have the greatest impact on biodiversity: herb-rich
forests account for only 1–2% of the surface area of Finland’s
forests, but they are the primary home for approximately 45%
of threatened forest-dwelling species.
In 2021–2022, Metsä Group surveyed the species living in high biodi-
versity stumps. The results confirmed that high biodiversity stumps
increased the number of species dependent on decaying wood in the
forest. Compared to felled stumps, they were home to a significantly
larger number of species. Moreover, all the discriminating species
detected in the study were found in high biodiversity stumps. These
included previously threatened beetle species, whose situation has
since improved.
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• We leave protective thickets for animals at all stages of forest
management. Protective thickets comprising different tree
species are small, untended thickets that provide shelter and
food for birds and mammals, thereby securing the habitats of
forest-dwelling species.
• Buffer zones around waterbodies help promote biodiversity and
prevent the runoff of soil and nutrients. A buffer zone is a strip
along the waterbody where forest management measures are
performed more lightly or omitted completely.
• The FSC® nature site service helps target protection at the most
valuable sites in terms of nature: The FSC nature site service
means that Metsä Group offers valuable nature sites required
by FSC forest certification to its owner-members who have
joined the FSC group and whose own estates do not include
such sites. In Finland, FSC forest certification requires that at
least five per cent of the surface area of forestland on the forest
estate is permanently excluded from forestry use.
Safeguarding carbon sinks
Thanks to forests growing, they act as carbon sinks and mitigate
climate change. In sustainable forest management, a forest is
regenerated swiftly after harvesting, using seedlings or seeds of
Finnish natural tree species, which are rapidly growing and the
most suitable for the site. By cleaning and thinning stands, more
growth space can be created for the best trees. Forest fertilisation
also boosts tree growth. The faster a new forest is established
and the better the young trees are managed, the faster the stand
develops into a carbon sink. Metsä Group aims to increase the
amount of carbon stored in forests by actively offering forest
management services to forest owners. We offer forest owners
both periodic cover forestry, which includes regeneration felling
and forest regeneration, as well as continuous cover forestry, which
means removing only some of the trees at a time. We recommend
continuous cover forestry above all for peatlands. However, it is the
forest owner who ultimately decides how their forest is managed.
Impact of regulation on forest use
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 as well as the protection of forests and the safeguarding
of their biodiversity. 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 steer the forest-related regulation of
EU member states in the coming years.
The EU 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 oppor-
tunities in the commercial use of forests.
From the forest industry’s perspective, the effects of the EU
Forest Strategy are indeed twofold, and it is possible that EU regu-
lations with an impact on forest use will begin to limit the availability
of wood. The role of member states and differences among forests
across Europe should be considered when implementing the
strategy.
Metsä Group updated its 2030 objectives related to biodiversity in early 2023.
Measures concerning forest nature will be diversified to support the goal of
improving the state of nature. Key targets include diversifying the ratio of tree
species, adding more decaying trunk wood and diversifying forest structure.
By the end of 2030, retention trees and high biodiversity stumps will be left on
all felling sites. In young stand management, we will no longer create spruce
forests of a single species.
In Finland, threatened species are primarily found on special sites. In addition
to the recommended management measures for herb-rich forests determined
in 2021, we will initiate management of ridge slopes and the controlled burning
of retention trees. “By managing sunny and hot ridge slopes we can prevent
overgrowth, which is a threat to species typical of such slopes. The burning of
retention trees creates suitable conditions for the species of burnt areas and
accelerates the formation of decaying wood important for biodiversity,” says
Vesa Junnikkala, Sustainability Director for Metsä Group’s Wood Supply and
Forest Services.
We updated our goals and measures
for promoting biodiversity
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Sustainable
products
We aim for fully fossil free products and use natural resources as efficiently
as possible in accordance with the principles of the circular economy.
This reduces the climate and environmental footprints of our products.
Our operations
Fossil free products
Our main raw material, wood fibre, accounts for 93% of all our
raw materials per dry tonne. In our paperboards, we also use raw
materials based on natural minerals such as calcium carbonate,
fossil oil-based materials such as latex, and especially in food
service packaging also PE coating.
To replace fossil oil-based materials, we are continuing to
develop systematic monitoring of the fossil share of all our raw
materials, based on the data provided by our suppliers. We actively
monitor the needs of our customers and the global markets and
have conducted experiments and test runs of packaging materials
using raw materials that can replace paperboard latexes and
coatings currently in use.
Environmental impacts of products
The environmental impact of our products arises throughout their
life cycle, including the production and procurement of raw materi-
als, our own production processes, transports, further processing,
and disposal after use. In the assessments of the environmental
impact of our paperboards, we use life cycle analyses that help our
customers reduce the environmental impacts of their packaging
through appropriate materials choices and packaging solutions.
As well as this, the life cycle analyses help us further improve our
products’ environmental performance.
We always carry out our products’ life cycle analyses and the
comparisons between different 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. In 2022, we published our first environmental product
declaration (EPD), verified by an external party, which provides a
transparent and comparable report of the life cycle analysis results
of our paperboard product. 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 paperboard production, the
carbon footprint of our products will become even smaller. For
example, according to an independent study, the climate impact of
a paperboard box for cherry tomatoes is more than 80% smaller
than that of a box made from recycled plastic (Natural Resources
Institute Finland).
Indicators and progress
We aim to use solely fossil free raw
materials and packaging materials by
the end of 2030.
In 2022, 99.3% (99.2) of our raw materi-
als and product packaging materials per
dry tonne were fossil free.
100
90
80
70
18 19 20 21 22 TARGET
2030
FOSSIL FREE RAW MATERIALS
%
30
1
%
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Our lightweight paperboards, made resource-efficiently and
primarily from a renewable raw material, respond well to the
needs of the circular economy. All our paperboards are recyclable,
depending on the local recycling systems. By ensuring good pack-
aging design and participating in initiatives supporting recycling,
we aim for our products to be recycled after use. If recycling is
impossible because of food residue or the like, composting is a
good alternative for our paperboards. All Metsä Board paperboards
Belgian Ice Cream Group (BIG), part of the Baronie Group,
decided to replace the PE-coated paperboard used in the
trays holding its ice pralines with MetsäBoard Prime FBB EB,
a dispersion-coated paperboard that is easy to recycle. This
supports Baronie’s goal of reducing packaging waste and
improving the recyclability of packages.
The new package was designed and its environmental impacts
analysed in collaboration with Metsä Board’s packaging design
and sustainability services. According to the life cycle analysis
(LCA), the transfer to the dispersion-coated paperboard
reduced the package’s carbon footprint by 32%. In other
An easily recyclable package
reduces carbon footprint
except for the PE-coated grades have been certified as industrially
compostable in accordance with the DIN EN 13432 and ASTM
D6400 standards. Some of our paperboard grades have also
been certified as home compostable in accordance with the NF T
51–800 standard.
Read more about our product development
and services pp. 16–17.
Read more about the traceability and risk management
of our raw materials pp. 50–51.
1%
Metsä Board’s annual folding boxboard capacity
is 1.3 million tonnes. This corresponds to
Even a small reduction in weight has a big impact
reduction in weight
of the paperboard
brings material
savings equal to
1.6
million packages
every day
words, by replacing 100 tonnes of PE-coated paperboard
with the dispersion-coated alternative, the annual carbon
dioxide emissions were reduced by an amount equivalent to a
300,000-kilometre car trip. Thanks to the new tray weighing
less, the amount of paperboard needed for an individual tray
decreased by 5%, and eliminating the PE coating reduces the
use of plastic.
milion
packages of 19 grammes
every day
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Climate and energy
To mitigate climate change, we will reduce the fossil carbon dioxide
emissions from our production to zero, use energy more efficiently and
commit our suppliers to setting reduction targets for their emissions.
Indicators and progress
By the end of 2030, we aim to
reduce our direct and indirect
fossil-based carbon dioxide
emissions (Scopes 1 and 2) to zero
and increase our share of fossil free
energy to 100%. Our goal has been
approved by the Science Based
Targets initiative (SBTi), and it meets
the strictest requirements of the
Paris Agreement, which aims to limit
global warming to 1.5 degrees.
Since 2018, we have reduced our
fossil-based CO
2
emissions (Scopes 1 and
2, market-based) by 33% (23) per tonne
produced.
In 2022, fossil free energy accounted for
87% (85) of our energy mix.
As for our value chain (Scope 3), our
goal approved by the SBTi is that
70% of our non-fibre suppliers and
the logistics operators related to our
customer deliveries, measured as
a share of our total purchases, set
themselves targets in accordance
with the SBTi by 2024.
Our goal is to improve our energy
efficiency by at least ten per cent
compared to the 2018 level by 2030.
By the end of 2022, 15% (16) of our sup-
pliers belonging to the target group had
set targets in accordance with the SBTi.
At the end of 2022, our energy efficiency
had improved by 2.7% (4.3) compared to
our base year of 2018. Lower production
in the last quarter of the year reduced
energy efficiency.
70
60
50
40
30
20
10
0
19 20 21 22 TARGET
2024
SHARE OF SUPPLIERS THAT
HAVE SET A SCIENCE-BASED
TARGET, %
0
TARGET
2030
FOSSIL-BASED
CO
2
EMISSIONS
tonnes kg/tonne
600,000
500,000
400,000
300,000
200,000
100,000
0
kg CO
2
/product tonne
18 19 20 21 22
240
200
160
120
80
40
0
TARGET
2030
IMPROVING
ENERGY EFFICIENCY
%
19 20 21 22
10
8
6
4
2
0
TARGET
2030
SHARE OF FOSSIL FREE
ENERGY
%
18 19 20 21 22
100
80
60
40
20
0
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GREENHOUSE GAS EMISSIONS IN 2022 WERE APPROXIMATELY 2.2 MILLION TONNES IN TOTAL
Purchased goods and services ��������������������������������������������������������������������������������� 33%
Fuel- and energy-related activities ������������������������������������������������������������������������������ 4%
Capital goods ���������������������������������������������������������������������������������������������������������������� 4%
Upstream transportation and distribution ��������������������������������������������������������������� 3%
Waste generated in operations ���������������������������������������������������������������������������������0.1%
Processing of sold products ������������������������������������������������������������������������������������������19%
Downstream transportation and distribution ������������������������������������������������������������18%
End-of-life treatment of sold products ������������������������������������������������������������������������ 17%
Investments ����������������������������������������������������������������������������������������������������������������������2%
37%
6%
11%
46%
Upstream – Scope 3
799,895 tonnes
Purchased electricity and
heat – Scope 2 market-based
147,061 tonnes
Own processes and power
plants – Scope 1
236,037 tonnes
Downstream – Scope 3
1,017,084 tonnes
UPSTREAM
Indirect emissions
DOWNSTREAM
Indirect emissions
OWN OPERATIONS
Direct emissions
Our operations
Greenhouse gas emissions
Greenhouse gases most significant for our operations and the
environment include the carbon dioxide emissions caused by our
own energy generation and production processes (Scope 1), the
generation of purchased energy (Scope 2) and the rest of our value
chain (Scope 3).
In 2022, Metsä Board’s Scope 1 emissions declined slightly from
the previous year, despite full ownership of the Hämeenkyrö power
plant being transferred to Metsä Board, meaning that the power
plant’s emissions are now reported as the Kyro mill’s Scope 1 emis-
sions instead of Scope 2 emissions. At the company level, Scope 1
emissions decreased thanks to the Simpele mill using less peat and
the Husum mill replacing heavy fuel oil with bio-based fuel. Moreo-
ver, Husum’s Scope 1 emissions were higher in 2021 due to the fire
that broke out on the pulp mill’s chip conveyor, which increased the
mill’s oil consumption. The change in Hämeenkyrö power plant’s
ownership and an increase in the use of fossil free purchased
energy contributed to the decrease of Scope 2 emissions.
The emissions of our value chain (Scope 3) accounted for 83%
(81) of all our fossil greenhouse gas emissions in 2022. A sizeable
portion of the emissions in our value chain is attributable to the
production of the raw materials we purchase – including pulp, bind-
ing agents, pigments and process chemicals – and the further pro-
cessing and transport of the products we sell, and their treatment
at the end of their life cycles. To reduce our value chain’s emissions,
we commit our suppliers to setting science-based reduction
targets for emissions. A recommendation to this effect is included
in Metsä Group’s Supplier Code of Conduct, and the matter is
discussed at meetings with suppliers. We also favour low-emission
modes of transport as much as possible (p. 38). In 2022, Metsä
Group and the VR logistics group agreed a new joint target to halve
emissions from transport covered by their cooperation by 2030.
VR handles Metsä Board’s train transports in Finland.
GREENHOUSE GAS EMISSIONS (CO
2
) 2018−2022
2022 2021 2020 2019 2018
Direct fossil-based CO
2
emissions (Scope 1), t
1)
236,037 255,467 240,036 250,259 288,579
Indirect fossil-based CO
2
emissions (Scope 2, market-based), t
2)
147,061 184,028 282,236 262,442 275,048
Indirect fossil-based CO
2
emissions (Scope 2, location-based), t
2)
291,482 313,030 383,937 384,781 431,037
Indirect fossil-based CO
2
e emissions (Scope 3), t
3)
1,816,979 1,854,840 1,847,773 1,026,896 1,058,455
Biogenic CO
2
emissions, t 1,950,901 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
4)
116.1 134.0 161.7 159.8 173.5
1)
Scope 1 emissions consist of carbon dioxide emissions. The 2019 figure has been retroactively corrected due to more detailed emission measurements.
2)
Scope 2 emissions consist of carbon dioxide emissions. The calculation of market- and location-based Scope 2 emissions has been revised retroactively due to changes in fuel-specific emission factors for
purchased heat, which is why the figures for the years 2018–2021 have been corrected. The amount of location-based Scope 2 emissions is affected by the average energy distribution of Metsä Board’s
production countries.
3)
Scope 3 emissions consist of carbon dioxide and other greenhouse gas emissions converted into carbon dioxide equivalents. The increase in Scope 3 emissions after 2019 is explained by changes in cal-
culation 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.
4)
Due to the revised calculation of market-based Scope 2 emissions and revisions of paperboard tonnes used in the environmental calculation, the figures for the years 2018–2021 have been corrected
retroactively.
Further details about the principles of emissions calculations are available on pages 66−67.
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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 is replaced by
renewable energy
HUSUM, KEMI, KYRO, TAKO and SIMPELE
Liquefied petroleum gas (LPG) or natural gas in the coating
drying will be replaced e.g. 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
KYRO
The power plant’s new turbine and generator
RENEWAL
OF THE HUSUM
PULP MILL
Phase 2:
New fibre line
Estimated time frame
for the project
A darker shade indicates
measures already taken
SIMPELE
Peat is replaced by
renewable energy
JOUTSENO
Natural gas is
replaced by biogas
or electricity
RENEWAL
OF THE 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. See also
our interactive roadmaps on our sustainability website metsagroup.com/fi/metsaboard.
Roadmap to fossil free mills by the end of 2030
TAKO
In steam production,
natural gas is replaced
by, e.g. electricity
Roadmap for mitigating climate change
Our plan for transitioning to entirely fossil free production
supports the goal of limiting climate change to no more than 1.5
°C above the pre-industrial era. It also helps adapt our operations
to a low-carbon future. Our roadmap comprises mill-specific
investments and measures that enable us to replace the fossil fuels
used by our production units and power plants with renewable
fuels and non-fossil electricity. We will also switch to renewable or
fossil free alternatives in terms of purchased energy. We will also
continue to improve the efficiency of our energy and water use.
Water use makes a difference, given that the use of process water
and wastewater treatment consume energy and thereby generate
carbon dioxide emissions.
The first phase of the Husum pulp mill’s renewal, comprising a
new recovery boiler and turbine, was completed at the end of 2022.
This will increase the mill’s production of renewable energy and
raise the electricity self-sufficiency of the Husum integrated mill. In
addition, the use of heavy fuel oil as a support fuel decreased, and
the necessary backup fuels will be replaced with renewable alterna-
tives by 2030. The energy source used in the recovery boiler is the
wood-based black liquor generated alongside pulp production.
In 2022, it was decided to invest in a turbine and generator for
the Kyro mill’s biopower plant. Thanks to the improved efficiency of
the new turbine, the share of electricity produced by the biopower
plant will increase from around 30% to around 50% of the mill’s
total electricity use. The investment is scheduled to be completed
by the end of 2024.
Energy and water efficiency will improve thanks to the 2022
investment in a lamella clarifier for chemically treating water used
as process water at the Kyro mill, as well as the introduction of a
heat exchanger for cooling the debarking department, and the
utilisation of waste heat at the Simpele mill. These measures will
reduce raw water intake and water heating needs, thereby reducing
the use of water and energy.
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Energy
Most of the energy we use (Scopes 1 and 2) is already based on
renewable energy produced of fractions generated in our pro-
cesses and wood supply, including black liquor, bark and logging
residue. We have analysed the risks related to this bio-based
energy, and all the biomass we use is climate neutral in accordance
with EU regulations. In addition to renewable energy, nuclear power
is an important fossil free source of energy for us.
Despite the halt to natural gas deliveries from Russia, the supply
of natural gas to Metsä Board’s Joutseno, Kyro and Tako mills
continued uninterrupted in 2022. Natural gas has been partly
replaced with oil, and in early 2023, the Kyro and Joutseno mills will
also have the resources in place to use liquefied natural gas. The
use of alternative forms of energy will not slow down Metsä Board’s
goal of gradually transitioning to fully fossil free energy by the end
of 2030.
INTERACTIVE ROADMAPS ON 2030
CLIMATE AND WATER TARGETS
On its website, Metsä Board has published detailed interactive
roadmaps of the measures with which it aims to achieve its targets
for mitigating climate change and reducing water by the end of 2030.
Renewable energy,
wood-based ����������������������� 53%
Other renewable
energy ������������������������������������2%
Nuclear power �������������������� 32%
Fossil fuels * ������������������������ 13%
TOTAL ENERGY CONSUMPTION BY ENERGY
SOURCE IN 2022
12.0 TWh (primary energy)
Own generation ������������������ 21%
Purchased at cost price
from Pohjolan Voima ���������� 31%
Purchased from
Metsä Fibre ������������������������� 12%
Purchased on the market 36%
ELECTRICITY BY SOURCING METHOD
2,4 TWh
Biomass,
own production ������������������77%
Biomass-based heat
purchased from
Metsä Fibre ������������������������� 13%
Gas, oil, recycled fuel
and peat purchased
on the market ���������������������10%
HEAT AND FUELS BY SOURCING METHOD
6,2 TWh (primary energy)
Energy self-sufficiency
Metsä Board’s self-sufficiency in electricity is high. In its self-suf-
ficiency, the company includes its own electricity generation,
electricity purchased at cost price from Pohjolan Voima
1) (known
as the Mankala principle), and electricity purchased from Metsä
Fibre, its associated company. During 2023–2024, the company’s
electricity self-sufficiency will increase, when Husum’s new
recovery boiler and turbine as well as Olkiluoto 3 reach their full
production capacity. Self-sufficiency will be further increased by
Metsä Fibre’s new bioproduct mill, which will start up in the second
half of 2023. Respectively, later in 2023 energy consumption will
be increased by capacity expansions of folding boxboard in Husum
as well as white krafliner in Kemi. Heat is mainly produced from
fractions generated in our own processes and wood supply, includ-
ing black liquor, bark and logging residue. The company hedges
against the price risk of gas and fuels purchased on the market in
accordance with its commodity hedging policy. The degree and
duration of hedging depends on the type of commodity.
1) Metsä Board ownerships in nuclear power plants are: 5.2% in OL1 and OL2 and 1.5% in OL3
through its ownership in Pohjolan Voima.
ENERGY CONSUMPTION 2018–2022
2022 2021 2020 2019 2018
Energy consumption, GWh (as primary energy) 11,965 11,860 11,844 11,699 11,675
Energy consumption, GWh (according to GRI) 8,561 8,428 8,355 8,398 8,643
* Gas 7%, oil 3%, coal < 2%, recycled fuel 1%, peat 1%
Metsä Board does not use coal in its own energy
production, but the share of coal is based on purchased
electricity.
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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. The identified climate-related risks and opportunities concern
mainly the medium-term (1–5 years) and long-term (more than 5 years) future. Weather-related
risks such as dry summers and rainy winters may also occur in the short term (0–1 years). 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
significant requirements for a new kind of pro-
duction 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 efficiency and
shift to the use of entirely fossil free energy in its production.
We also encourage 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-efficiently to avoid waste in pro-
duction. Our aim is to make full use of the production side streams.
Regulation that acknowledges that forest
industry products can replace materials made
from fossil-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 pro-
duction 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 sustaina-
bly 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 pro-
duction and the light weight of the products reduce their carbon
footprint. All our paperboards are recyclable and/or compostable.
Good packaging design allows us to further reduce the environ-
mental 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 organisa-
tions promoting recycling (including 4evergreen and the European
Paper Packaging Alliance).
Climate change creates
risks and opportunities
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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 assess-
ments. Examples of such measures include sufficient 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
supports 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 de-
liveries 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 manage-
ment 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
Reporting in accordance with TCFD’s
recommendations pp. 64–65.
Reporting required by the European Union’s taxonomy on
sustainable finance pp. 82–85.
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Other
emissions
We monitor our environmental impact closely and use
the best available technology in our production.
Our operations
Emissions into air and water
The bulk of our atmospheric emissions results from the energy
generation required to produce pulp, high-yield pulp, and
paperboard. Besides the climate impact of carbon dioxide, our key
emissions into air consist of sulphur and nitrogen oxides, which
cause acidification. We also measure particulate concentrations
from our mills’ flue gases, and in the production of high-yield 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)
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 waterbodies is typically small compared
to the diffuse 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).
Deviations from environmental permit conditions
We use the best available technology in our production and
continuously monitor that our mills operate in compliance with
the environmental certificates issued to them. Any deviations and
the corrective measures pertaining to them are reported to the
authorities. In 2022, Metsä Board’s mills recorded some cases in
which permit conditions were exceeded at a monthly level. Our
mill-specific emissions and deviations from environmental permit
conditions are reported on pages 60–61.
Transport
Given that the majority of our products is sold to countries other
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 efficient 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. Measured as a share of our 2022 logistics costs,
maritime transports accounted for 44% (39) of our transports,
road transports for 37% (38), and rail transports for 5% (6), while
14% (17) of our transports were related to port and warehouse
operations. Since 2022, some of the maritime transports departing
from Kemi are carried out with lower-emission LNG vessels. Ves-
sels with lower emissions have also been introduced in maritime
transports departing from Helsinki for the Iberian Peninsula.
Metsä Board has started an environmental impact assessment
(EIA) procedure for a folding boxboard mill it is planning to build in
Kaskinen, Finland. The environmental permit will set out the scope of
operations and environmental impact.
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Waste and
by-products
We invest in resource efficiency so that there is no waste in pulp and board produc-
tion. In this way, we reduce waste.
Our operations
Waste and by-products
Our production side streams consist of by-products generated
in our production, including ash used as fertiliser and recov-
ered lime fractions, as well as process waste such as green
liquor dregs and other types of sludge. Our operations also
generate hazardous waste and municipal and construction
waste.
We improve our recovery methods continuously, so as not to
generate waste in the production of pulp and paperboard. We
are also seeking new ways to reuse production side streams
and use organic waste for energy production. Our biggest
challenge is to find applications for the green liquor dregs
generated in pulp production, and we are actively exploring
solutions for its utilisation.
In 2022, our operations generated a total of 36,063 tonnes
of by-products and 134,587 tonnes of waste. Our target of
using 100% of our production side streams covers all by-prod-
ucts and 96.4% of non-hazardous waste in 2022.
Indicators and progress
We aim to make 100% use of all
production side streams to ensure our
processes do not generate any landfill
waste after 2030.
In 2022, we used 99.9% (99.8) of our side
streams: 55% were reused as materials,
and 45% in energy production.
WASTE USE AND DISPOSAL
On-site, t Off-site, t Total, t
Process waste (non-hazardous waste)
Material reuse 18,009 36,921 54,930
Energy recovery 57,6 9 6 16,060 73,756
Landfill 54 76 130
Other non-hazardous waste
Material reuse 4,611 4,611
Energy recovery 167 167
Landfill 33 33
Hazardous waste
Material reuse 142 142
Energy recovery 14 14
Incineration without energy recovery 736 736
Landfill 5 5
Other disposal * 64 64
* Disposal and treatment of waste other than landfill. The amount also includes repacking and
pre-processing before disposal.
WASTE AND BY-PRODUCTS 2022, t
By-products ������������������������������������������������������� 36,063
Process waste (non-hazardous waste) ��������� 128,816
Other non-hazardous waste ��������������������������������4,811
Hazardous waste �����������������������������������������������������960
18 19 20 21 22
100
90
80
70
TARGET
2030
UTILISATION OF PRODUCTION
SIDE STREAMS
%
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Water
We invest in making water use more efficient, which supports the circular economy, the
management of water resources, and the achievement of our energy and climate targets.
half was used as process water and the other half as cooling
water. A small amount of groundwater, 65 thousand m
3
, was used
primarily for drinking and hygiene purposes.
Our water consumption is very small in proportion to our total
water use, as we return around 96% of the water to waterbodies
after use. The remaining 4% either evaporates during the process
or is bound to products. In 2022, our water consumption was
approximately 4,399 thousand m
3
.
Roadmap for reducing water use
To achieve our 2030 target, we have defined mill-specific measures
for enhancing the recycling of water and reducing the withdrawal
of raw water from waterbodies. The Simpele paperboard mill, for
example, will invest in the renewal of its pulp and white water sys-
tem in 2021–2023. This will reduce both the use of process water
and energy. In 2021–2023, the Kemi paperboard mill’s develop-
ment programme will reduce the mill’s water use by approximately
40% and energy consumption by around 5% per tonne of paper-
board 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.
Indicators and progress
Our aim is to reduce the use of
process water by 30% per tonne
produced from the 2018 level.
In 2022, we reduced our process water use
by 12.2% (12.6) per tonne produced from
the 2018 level.
Lower production in the last quarter of the
year weighed on the full-year progress in
process water use.
Energy consumption for 2018 and the tonnes of paper-
board produced used in environmental accounting have
been revised. The revisions have retroactively impacted
on the figures related to the reduction in process water
use.
Our operations
Water use
We strive to optimise the use of water in our processes and
enhance the recycling of process water in the production process,
the aim being to reduce the need to withdraw new raw water. We
circulate water at our paperboard mills an average of 12–14 times,
and up to 30 times at our BCTMP mills. This allows us to both
minimise wastewater discharges and save energy, which reduces
our climate impact. It also reduces our water risk (pp. 37 and 63).
All of the process and cooling water we use is withdrawn from
nearby surface waters, such as rivers and lakes. The maximum
volumes for water intake are defined in the water intake permit
issued by the authorities. Given that all our mills are in Finland
and Sweden, in areas with plenty of water, we do not withdraw
any water 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.
As the cooling water flows within its own closed cycle, it remains
clean at all times and is returned as such to the waterbodies.
In 2022, Metsä Board’s use of fresh water totalled 110 million
cubic metres (115 million m
3
). Surface water accounted for nearly
100% and groundwater for 0.06% of our water intake. We withdrew
109,901 thousand m
3
(115,034) of surface water, of which roughly
0
-10
-20
-30
19 20 21 22 TARGET
2030
REDUCTION IN
PROCESS WATER USE
%
40
2018 2022 2030
SUSTAINABILITY REPORT
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Reduction of process water use per product tonne
Reduction of process water use per product tonne
-30%
Base year:
21 m
3
/t
Target:
14 m
3
/t
-20%
-10%
0%
SIMPELE
Enhancing water recycling , optimising water use in debarking and in wastewater treatment
KASKINEN
Optimising water use in debarking, in raw water chemical purification, and in wastewater treatment
TAKO
Enhancing water recycling
KEMI
Enhancing water recycling and optimising the separation
of process water and uncontaminated cooling water
ÄÄNEKOSKI
Enhancing water recycling and water use efficiency, combining wastewater treatment with Metsä Fibre
KYRO
Optimising reject handling of raw water chemical purification, enhancing water recycling
and optimising the separation of process water and uncontaminated cooling water
HUSUM
Optimising the separation of process water and uncontaminated cooling water. Renewal of Husum pulp mill, phase 2: New fibre line
Estimated time frame for the project
To achieve our target, we have defined mill-specific measures which improve water recycling and reduce water withdrawal from natural
sources. Some of the projects still lack a final investment decision and the times shown are indicative. Over 50% of total process water
reductions per product tonne will be due to the phase 2 of the renewal of Husum pulp mill. See also our interactive roadmaps on our
sustainability website metsagroup.com/fi/metsaboard.
Roadmap for reduced process water use by the end of 2030
JOUTSENO
Minor upgrades to water use efficiency
WATER USE 2018–2022
2022 2021 2020 2019 2018
Water withdrawal, 1,000 m³ 109,967 115,095 113,633 109,087* 105,921
Of water withdrawal used as process water, 1,000 m³ 60,186 59,551 62,037 59,381 67,495*
Of water withdrawal used as cooling water, 1,000 m³ 54,291 57,4 8 6 54,690 53,352 54,804
Wastewater discharges from process water, 1,000 m³ 58,740 58,738 60,119* 59,326 67,133*
* The measurement data has been revised and the figures have been retroactively corrected from the figures published in the 2021 report.
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Social responsibility
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.
Our operations are guided by Metsä Group’s Code of Conduct and in the field
of social responsibility by the human resources and equality policies. We
require our suppliers to commit to our Supplier Code of Conduct.
The renewal of the operating model used at Metsä
Board’s Kemi paperboard mill was initiated in connection
with the mill’s development programme. As part of the
programme, the production of base pulp used in paper-
board production will become part of the paperboard
mill process, and product storage will be automated.
This will create entirely new duties and competence
areas.
“We want to support our employees’ learning and offer
them increasingly versatile duties,” says Mill Director
Timo Ahonen. “Multiple skill sets and varied duties
boost motivation and enable the introduction of new
perspectives and ideas into the joint development of
operations.”
Multiple skills required in the
production of premium paperboards
All our mills have management systems for quality, occupa-
tional health and safety, and food safety (ISO 9001, ISO 45001,
ISO 22000). Our mills that produce paperboard for food packaging
also have the FSSC 22000 system, which is used in the food
industry. We ensure that our partners operating in our mill areas
also comply with the requirements of our management systems.
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Indicators and progress
We aim for our ethics index, which
depicts the level of ethics in our
business, to be 100% by the end of
2030.
In 2022, our ethics index was 85% (85).
Of our employees, 52% (58) responded
to the ethics barometer survey.
We use the Pulse survey to measure
the success of our personnel
strategy.
The 2022 Pulse survey:
• 73% of respondents would recommend the company as an employer
• 77% of respondents felt that the company operates ethically correct
We aim for women to account for
at least 25% of our executives
(Vice President or higher) by 2025.
In 2022, women accounted for 25%
(19) of our executives.
We increase awareness of diversity,
equality and inclusion (DEI) through
our e-learning course, which all
employees are required to complete.
By the end of 2022, the e-learning course on
DEI had been completed by 98% (97) of our
personnel.
Workplace
community
We want to ensure that our values are visible in the daily work of every employee,
and that we treat each other respectfully. We are committed to developing a
responsible corporate culture in which safety, diversity, equality and inclusion are
realised.
25
20
15
10
5
0
TARGET
2025
SHARE OF WOMEN IN
EXECUTIVE MANAGEMENT
%
20 21 22
100
80
60
40
20
0
TARGET
2030
DIVERSITY, EQUALITY AND
INCLUSION E-LEARNING
COMPLETION RATE
%
20 21 22
100
80
60
40
20
0
TARGET
2030
ETHICS INDEX
%
20 22
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KEY PERSONNEL FIGURES
2022 2021 2020
Total number of employees FTE
1) 2)
2,248 2,389 2,370
Share of blue-collars of all employees, % 63.4 64.1 64.7
Share of white-collars of all employees, % 36.6 35.9 35.3
Share of permanent employees, % 91.8 91.9 94.0
Share of full-time employees, % 96.6 96.6 96.4
Average age in years 45.8 46.1 46.4
Average years in service 17.0 17.8 18.6
Employee turnover rate, %
3)
7.8 5.2 4.5
Average training hours per employee
2)
15.0 11.0 11.8
Average training hours (blue-collars)
2)
15.0 9.5 8.8
Average training hours (white-collars)
2)
15.1 13.7 16.0
Employees covered by collective agreement, %
2)
75.4 72.2 78.0
1)
Full-time equivalent FTE on 31 Dec 2022
2)
The former subsidiary Hangö Stevedoring is included in the figures until the end of 2021.
3)
The figure includes redundancies caused by restructuring of business. In 2022, Metsä Board started
restructuring pertaining to approximately 100 permanent or temporary employees to centralise
customer service and distribution logistics functions in EMEA. The effects of the restructuring will be
realised in 2023.
PERSONNEL’S AGE AND GENDER DISTRIBUTION
PERSONNEL’S DISTRIBUTION BY REGION
Women aged less than 30 ������������������������������3%
Men aged less than 30 ������������������������������������8%
Women aged 30–50 ������������������������������������� 12%
Men aged 30–50 ������������������������������������������ 36%
Women aged more than 50 ����������������������������7%
Men aged more than 50 ������������������������������ 34%
Finland ����������������������������������������������������������� 54%
Sweden ���������������������������������������������������������� 33%
Rest of the EMEA region ���������������������������������9%
The Americas and the APAC region ��������������4%
Personnel in
17 countries
Permanent employees recruited
207
Summer employees
279
Our operations
Working conditions
All our production units and 87% of our personnel are in Finland
and Sweden, both of which have high-standard statutory
requirements concerning working conditions, including reasonable
working hours, annual leave, parental leave and part-time work. In
2022, we harmonised our payroll practices concerning our Finnish
personnel’s family leave. Our approach now exceeds the require-
ments of family leave legislation and provides parents with more
equal opportunities to care for their children. We also comply with
local legislation in all the other countries in which we operate. All
our employees can choose whether they belong or do not belong to
a trade union.
At the beginning of 2022, we moved from national collective
agreements to company-specific collective agreements that are in
force until further notice. The agreements were negotiated with the
trade unions. Moreover, elected representatives of personnel have
been on the mills’ management teams since 2022.
Our entire personnel is entitled to free occupational health care,
and we encourage our employees to anticipate and assess their
own working ability and health. Benefits pertaining to wellbeing at
work are equally available to permanent employees and employees
with a fixed-term contract. In our work ability management, we
have adopted an early intervention model that encompasses all our
employees. It means supporting wellbeing and working ability by
addressing any challenges at an early stage.
Because of the coronavirus pandemic, employees whose duties
allowed it continued to work remotely until the summer of 2022. In
August, we introduced a hybrid model, which enables employees
to work remotely part of the week, depending on the nature of their
duties.
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Workplace community and strategy
Motivated people is one of the Metsä Board’s strategic
programmes. The programme focuses on the development of
management and employees’ competence; harmonised operating
models at mills; a diverse, equal and inclusive company culture;
and future personnel needs.
We want everyone in our workplace community to understand
their role and the significance of their work in implementing our
strategy. We measure our progress with our ethics barometer and
personnel survey, which are conducted in alternate years. In 2022,
it was the turn of the ethics barometer. We also introduced the
Pulse survey in 2022. Conducted four times a year, it measures our
personnel’s commitment to the company and their opinions about
our level of business ethics.
We seek to ensure the availability and retention of qualified
personnel with our development programmes and successor
planning, and by investing in cooperation with educational
institutions and in our attractiveness as an employer. We use com-
petence surveys to support the development of multiple skills and
competence measurement. Regular and consistent monitoring and
planning help provide everyone with a personal development plan
to support their development at both personal and team levels. The
aim is to ensure the adoption of the agreed best practices in all our
locations. In 2022, we began developing the Husum mill’s operating
model jointly with the employees to ensure the model supports the
considerable technical investments made. The experiences gained
will also be used at our other mills.
We encourage our employees to actively develop their com-
petence and participate in various types of training. To promote
continuous development, Metsä Group launched Metsä Finance
Academy, a training programme for all financial management
employees, in 2022. Similar programmes are now being designed
for other fields of competence. We also launched mentoring
programmes to support professional growth and enable the use of
tacit knowledge.
In 2022, we introduced induction training for supervisors,
which focuses on topics such as performance management, the
supporting role of occupational health care in supervisory work,
work-related legislation and challenging situations in daily work.
Metsä Board has a bonus scheme based on the company’s
strategy and personal targets. It covers the entire personnel. The
personal performance bonus target of each Metsä Board employee
includes an ESG target. Personal targets and development goals
are set, and their progress is monitored in PDAs, which all employ-
ees conduct with their supervisor twice a year.
We prepare for future retirements by making retirement fore-
casts and drawing up resource plans based on them. We recruit
new talent through collaboration with educational institutions,
summer jobs, and apprenticeships in production and maintenance,
for example.
In November, the Simpele paperboard
mill hosted technology students and
personnel from LUT University as part
of the EU’s Equal Career Paths for
Women – NOW! campaign, the key goal
of which is to promote and support
women’s equal employment and career
advancement.
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Promoting diversity and equality in recruiting
• Anonymous recruiting is our main recruiting method.
• The system automatically hides all the information regarding applicants’ personal characteristics such as name, age and gender
during the application screening phase.
• We support the equal treatment of applications, based only on competence and qualifications, as well as the equal treatment of
applicants and the diversity of personnel. We reduce the impact of unconscious bias and any resulting discrimination during the
processing of applications.
Ethics barometer
The Ethics barometer measures our employees’ experience of our
ethics: what we do well, and where we still have room to improve.
The results of the barometer are expressed as an ethics index
(85/100%), which indicates that our personnel’s awareness of
the requirements concerning business ethics is at a high level, our
employees find the topic important, and our company operates
ethically. The areas in greatest need of improvement were the
equal treatment of employees and a culture in which the reporting
of unethical behaviour is encouraged, and concerns are addressed.
The risk of financial misconduct was not highlighted in the barome-
ter results.
The results of the ethics barometer were used to determine
development measures aimed at improving the issues detected
and reaching the target of 100% set for the ethics index. A total of
22 local and function-specific measures to be carried out in 2023
were decided in Metsä Board. We also launched the following
Metsä Group-wide development measures.
• Our entire personnel will receive training in the core content of
our Code of Conduct through a revised e-learning course.
• In training for managers, more emphasis will be placed on the
importance of addressing ethical concerns and creating a
culture that encourages the reporting of such concerns.
• Anonymous recruiting will be adopted as the primary recruiting
method.
• The transparency of recruiting will be increased by publishing
all vacancies internally, except for vacancies that involve
successor planning.
• Local workshops will be organised to promote the Metsä For All
vision.
Diversity, equality and inclusion
We are committed to promoting an equal culture that does not
allow discrimination, and in which everyone has the opportunity to
be accepted and succeed. We want to ensure that personal charac-
teristics – such as gender, age, sexual orientation, disability, ethnic
background and nationality – have no impact on the individual’s
opportunity to succeed at work. In this respect, our activities are
guided by the results of the ethics barometer, the Metsä For All
vision and our equality targets.
The most important measure promoting equality is the imple-
mentation of the Metsä For All vision through communication and
workshops for local management. As part of this measure, which
will continue in 2023, development measures will be specified
locally.
In 2022, we changed our job titles to make them gender-neutral
and adopted anonymous recruiting as our main recruiting method.
A separate module on diversity, equality and inclusion was added
to all supervisor and leadership trainings.
With the aid of our equality targets, we strive to increase the
share of women in top management, rectify unjustified differences
in pay and promote equality.
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SHARE OF WOMEN
AT METSÄ BOARD
2022 2021 2020
Share of women within all employees, % 21.9 21.9 21.3
Share of women in manager positions, %
1)
21.3 22.8 23.0
Share of women in executive management,
VP, SVP, CEO %
2)
25.0 19.2 23.1
Share of women in the Corporate
Management Team, %
14.3 14.3 33.3
Share of women in the Board of Directors, % 33.3 33.3 22.2
1)
Share of women within all managers.
2)
The definition has been clarified. Women in the target group (VP, SVP or CEO) must have an
IPE of at least 58. With this revision, the figures for 2021 and 2020 have been recalculated
retrospectively.
The former subsidiary Hangö Stevedoring is not included in the figures.
REMUNERATION AT METSÄ BOARD AS A WHOLE
AND BY PRODUCTION COUNTRY 2022
Metsä Board Finland Sweden
Annual total earnings of person with
highest wages compared to the average
total earnings of other personnel
30.5 32.2 6.7
Women’s total earnings compared to
men’s total earnings, white-collars
1)
0.95 0.97 0.92
Women’s total earnings compared to
men’s total earnings, blue-collars
0.94 0.93 0.95
1)
Weighted average of women’s total salary compared to men’s total salary in the same job
grade. Includes 98% 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
different organisational levels
• Ensuring equal pay
• Equality training for the entire
personnel
• Gender-neutral job titles
DIVERSITY
• Recruitment practices that support
diversity
• Ensuring international skills in the
organisation
INCLUSION AND
CULTURAL CHANGE
• Developing the personnel’s
awareness and skills
• Supporting the cultural change by
means of communications
• Promoting work-life balance
Human rights
We respect human rights in everything we do. We do not condone
human rights violations in any way or form, and we are committed
to ensuring that our operations do not result in negative human
rights impacts. We are committed to correcting any shortcomings
brought to light and to cooperating in this. Human rights are
covered in various e-learning courses such as the Code of Conduct,
sustainability as well as the diversity, equality and inclusion e-learn-
ings, which all our employees are required to complete.
In our own operations, inputs into safety at work and the
development of diversity, equality and inclusion were among the
key practical measures promoting human rights in 2022.
Our Supplier Code of Conduct also specifies requirements for
our suppliers’ human rights responsibilities. We survey our supply
chain and customers to detect any human rights risks as part of
our Know Your Business Partner background checks. No cases of
human rights violations related to our operations or subcontracting
chain were brought to our attention in 2022. Read more about our
Code of Conduct (pp. 52–53), and how we manage risks in our
supply chain (pp. 54–57).
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The safety of our employees is a top priority for us, and we work systematically to reduce
the number of occupational accidents. In the development of safety at work, we focus on
personal risk assessment, the deployment of common safety standards, and the develop-
ment of hand safety.
Safety at work
Our operations
Operating methods
We manage risks associated with safety at work by complying
with the ISO 45001 standard for occupational health and safety,
and with the common safety management principles, daily
management processes, safety at work standards, and key
safety guidelines applied throughout Metsä Group. The common
principles and operating methods support operations in line with
the ISO standard at our mills and comply with our company’s Code
of Conduct and safety policy. The implementation of processes at
mills is monitored with internal audits. External annual audits are
carried out in accordance with the ISO 45001 standard.
Risk assessment and management is supported by a health,
safety, environment and quality (HSEQ) system, intended for the
recording and monitoring of accidents, safety observations, close
calls, corrective measures, and our personnel briefing sessions,
known as safety talks. In addition to safety matters, the same
system is used for recording entries concerning environmental
Indicators and progress
We aim for zero accidents by 2030.
In 2022, the total recordable injury
frequency (TRIF) was 6.7 (9.8).
In 2022, the lost-time accident rate
(LTA1F) was 5.4 (7.0).
18 19 20 21 22
0
15
12
9
6
3
0
TARGET
2030
TOTAL RECORDABLE
INCIDENT FREQUENCY (TRIF)
per million hours worked
18 19 20 21 22
0
10
8
6
4
2
0
LOST-TIME ACCIDENT
FREQUENCY RATE (LTA1F)
per million hours worked
TARGET
2030
Metsä Board has also specified annual targets for its proactive
safety indicators – namely, safety observations, safety walks,
safety talks and personal risk assessments.
The 2022 result for safety observations was 104%, safety walks
144%, safety talks 139% and personal risk assessments 255%,
while the target is 100%. In addition, 77% of the target group
conducted the targeted number of risk assessments per person.
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matters and product safety. These observations can also be
recorded by our partners. The HSEQ system is also utilised in
internal and external audits.
All our mills follow the 5S method to increase productivity,
safety at work and wellbeing. The method is a five-step system for
keeping workstations safe, efficient and neat. The steps that the
five S’s stand for are sorting, setting in order, shining, standardising
and sustaining. Among other improvements, 5S has reduced the
number of falls and tripping, and the resulting accidents.
Each of our mills has an occupational health and safety (OHS)
committee which convenes regularly to promote the development
of local safety at work. At some of our mills, we have also set up
safety development teams to monitor the realisation of proactive
safety work, among other things. Our personnel are actively
involved in making observations about safety issues, and they
participate in training focusing on safety at work.
The focal areas of safety development
Our focus in the development of safety at work is on personal risk
assessment, the improvement of hand safety and the introduction
of common safety standards.
• The purpose of personal risk assessments is to prevent acci-
dents by identifying any hazards involved before initiating work.
• The goal of our hand safety programme is to halve the number
of hand and finger injuries in 2022–2023. Hand injuries are the
most typical accidents at Metsä Board.
• Safety at work standards harmonise the operating methods of
our production units, and everyone is expected to follow them
in their daily work.
In our development work, we invite all our mill employees to discuss
and identify ways to improve safety and share best practices
among all mills. We have organised personnel training on risk
identification, hand safety and safety at work standards. These
measures promoted positive safety development at our mills in
2022, but our accident frequency is still high compared to our
target of zero accidents. Hand injuries were still the most typical
accidents.
Safety requirements for partners
We ensure that our partners comply with the requirements of ISO
45000. All our external partners like cleaning and maintenance
companies working in our mill areas must complete a safety
induction before being granted an access pass to the area.
Drivers of heavy goods vehicles, who deliver goods to or pick up
goods from our mill, complete their own safety induction. We also
organise regular safety information sessions, including safety talks,
for partners. We investigate and prepare reports on all accidents
occurring to our partners in mill areas.
KEY SAFETY INDICATORS
2022 2021 2020
Sickness absences, % of theoretical working
hours
4.9 4.1 3.9
Total Recordable Injury Frequency (TRIF) per
million hours worked
6.7 9.8 8.4
Lost-time accident frequency (LTA1F) per million
hours worked
5.4 7.0 5.7
Number of lost-time accidents (LTA1), external
partners
1)
6 5 7
Accident severity rate 15.0 12.3 9.2
Accident severity rate, external partners
1)
22.3 18.2 12.1
Number of fatal occupational accidents
2)
0 0 0
1)
Our external partners working in a mill area, excluding major investment projects (e.g. the Husum
recovery boiler and turbine, board machine investments and the Kemi board mill investment).
2)
Includes also our external partners.
The former subsidiary Hangö Stevedoring is included in the figures until the end of February 2022.
Personal risk assessment is one of Metsä Board’s focal areas in safety
at work. The risk assessment project initiated in 2022 aims to prevent
accidents at work, and it has already produced good results. The number of
accidents has decreased, while the number of risk assessments conducted
by employees has increased substantially.
Employees conduct an assessment of potential hazards whenever they are
to carry out a task that differs from their own daily work. This is also impor-
tant in service or repair work and when using special tools. The assessment
list helps them systematically evaluate safety to determine whether the
required permits to work and protective equipment are in order, and whether
any elements in the work environment or task may pose a risk of accident.
Risk assessment reduces accidents
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Raw materials
All of Metsä Board’s paperboards are made of renewable, recycla-
ble fresh fibre. Fresh fibre paperboards do not alter the odour or
taint the properties of the products packaged in them, and they
are the safest choice for wood-based food packaging and other
sensitive packaging end uses.
Metsä Group’s business operations cover the entire production
chain, from the forest to the pulp and paperboard mill. This ensures
that we know exactly what our paperboard is made from.
Only carefully selected chemicals are used in our paperboard
production process. Each chemical undergoes a detailed inspec-
tion to ensure it complies with required international regulations
and other requirements for food contact material, for example. All
the chemicals used at our mills must pass our extensive safety-at-
work and environmental evaluations. Our fresh fibre products do
not contain unknown chemicals, such as ink residues, which may
be found in paperboards made of recycled fibre.
Production environment
As our paperboards are part of the food supply chain, our product
safety criteria and practices are equally stringent as those followed
in the food industry. Our mills follow good manufacturing practice
(GMP), which is a requirement for production of all food contact
materials. In addition, all of Metsä Board’s mills have an ISO 22000
certified food safety system, and the mills producing paperboard
for food contact use have also been certified according to the
requirements of the FSSC 22000 food safety system.
In addition to the product safety requirements for our own pro-
duction, we also require our suppliers and subcontractors to meet
equal standards so that we can ensure the cleanliness and safety of
products in all stages of the supply chain. We use regular product
safety questionnaires, audits, and follow-ups to ensure that the
risks are controlled throughout the production and supply chain.
Compliance
Direct food contact materials are regulated strictly around
the world. Metsä Board assures the safety of its products in
compliance with the legislation applicable in its market areas in
Europe, the Americas and Asia. Our team of product safety experts
continuously follows developments in the relevant regulations and
requirements. The team’s competence is supported with regular
training.
The safety of materials is one of the key properties of packaging.
Our comprehensive product safety work helps ensure that
products are safe for consumers.
Our mills operate according to Good
Manufacturing Practice (GMP), and they
have certified ISO/FSSC 22000 food
safety systems in place, the status of
which is ensured annually with external
and internal audits.
All the wood raw material used in our
production comes from controlled or
certified forests and is traceable. The
chemicals we use are carefully chosen
and safe for use. Chemicals suppliers
are required to respond to our product
safety questionnaire every year.
Product safety risks are managed throughout the production and supply chain
Our products are regularly tested
for quality and safety in internal and
external laboratories, accounting
for various end uses, including food
packaging.
Raw materials
Production
Product safety
Product safety
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Our products are tested regularly in accredited laboratories
to ensure they meet the required quality and safety standards.
Laboratory analyses together with detailed internal risk analyses
form the basis for our Product Safety Statement, which includes
product-specific information about product safety and compliance.
Careful packaging, requirements on the
supply chain, and regular audits ensure
the cleanliness and safety of our products
during transport and storage.
Premium paperboards guarantee high
performance and quality in converting.
Uninterrupted production reduces
product safety risks at all different
stages of converting and processing.
The main function of packaging is to
ensure that the packaged product,
such as food, stays safe for consumers.
Laboratory analyses and detailed
internal risk analyses form the basis for
our Product Safety Statement.
At the EU level, risks detected in food contact materials and
product recalls are monitored and reported through RASFF alerts.
There were no product safety related RASFF notifications concern-
ing Metsä Board’s products nor any recalls of consumer packaging
made from our paperboard in 2022.
Fresh fibre paperboard is a safe
choice for food packaging
Transport Converting
Product safety
and consumers
Fazer, a Finnish food industry company, chose MetsäBoard Prime FBB EB, Metsä
Board’s lightweight and recyclable dispersion-coated paperboard, as the packaging
material for its chocolate Christmas calendar. Fresh fibre paperboard is a safe choice
for a Christmas calendar where the chocolate is in direct contact with paperboard.
“Our fresh fibre paperboard has neutral properties in terms of odour and flavour. It
ensures that the chocolate retains its excellent flavour for the consumer, as intended,”
says Olli Haaranoja, Sales Director at Metsä Board.
The choice of material reduces annual plastic use by 1,200 kilograms compared to the
PE-coated paperboard previously in use. In addition, it makes the calendar easier to
recycle. The lightweight paperboard also reduces the carbon footprint of the calendar
box by approximately 25 per cent. The change in calendar material is part of Fazer’s
sustainable packaging programme.
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Sustainability
governance
In addition to applicable legislation, our work and decision-making
are guided by Metsä Group’s Code of Conduct. These are comple-
mented, among other things, by policies concerning personnel,
equality, information security, competition law, sourcing and envi-
ronmental matters. From our suppliers, we require a commitment
to our Supplier Code of Conduct or supplier’s own equivalent Code
of Conduct.
Our Code of Conduct contains the key principles on
compliance, responsible business and respect for peo-
ple. In November 2022, a revised online training course
was published, covering all 15 of our Code of Conduct
principles and guidance on how to report perceived
wrongdoing. The training, aimed at all employees, is
available in ten languages.
”The renewed e-learning training supports all of us
in doing the right thing. This will ensure a common
understanding the requirements set for business ethics
and enable our employees to identify and raise ethically
challenging situations in a timely manner,” says Tarja
Tudor, Vice President, Compliance & Ethics at Metsä
Group.
Code of Conduct e-learning
was renewed
We are committed to acting in accordance with the UN Guiding
Principles on Business and Human Rights, and we expect the
same from our business partners. Since 2003 we support the UN
Global Compact and its principles on human rights, labour, the
environment and anti-corruption, as well as the UN CEO Water
Mandate.
Read also about Metsä Board’s corporate governance on pp. 169–175.
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A culture of
doing the right thing
Our operations
Code of Conduct and steering responsible business
In its Code of Conduct, Metsä Board is committed to respecting
human rights and to responsible business operations, including
anti-corruption and anti-bribery as well as environmental respon-
sibility. Compliance with the Code of Conduct and the personnel’s
competence on business ethics are supported through regular
training and the ethics barometer survey.
The Code of Conduct e-learning course was revised in Novem-
ber 2022. The course covers the company’s key ethical principles
and describes best sustainable business practices with the help
of examples and assignments. All our employees are required to
complete the Code of Conduct e-learning course every three years.
In addition, all employees must complete e-learning courses on
diversity, equality and inclusion, sustainability, and the principles
of information security and information protection. Depending on
their duties, employees are also required to complete e-learning
courses focused on, for example competition, procurement,
contract and legal policies. In 2022, advanced training in the
Metsä Group’s competition policy was organised for various target
groups.
The ethics barometer, conducted for the second time in 2022,
measures our employees’ experience on realisation of ethics from
different perspectives. The ethics barometer is a tool that helps
us detect areas of development related to topics such as anti-cor-
ruption and anti-bribery or the prevention of misconduct. The
results of the ethics barometer led to the decision that in trainings
for managers, the importance of addressing ethical concerns will
receive greater emphasis and the reporting of misconduct will
be further encouraged. Based on the ethics barometer, financial
misconduct, corruption, conflicts of interest, attempts to inappro-
priately influence partners’ decision making, and data protection
violations are not considered essential risks. The results of the
ethics barometer are presented from the workplace community’s
perspective on page 46.
We follow appropriate due diligence in ensuring the sustainabil-
ity of our suppliers, customers and other partners and carry out
background checks as part of our Know Your Business Partner
process. Knowing the background of business partners helps us
operate according to regulations and manage risks related to trade
sanctions, corruption, money laundering, human rights and cases
involving irregularities. Read more about the sustainability of our
supply chain and our third-party due diligence on pages 54–57.
We aim to have a culture of doing the right thing and
address any shortcomings across the value chain.
Indicators and progress
Our goal is that all our employees
complete the Code of Conduct
e-learning course.
By the end of 2022, 70% of our employ-
ees had completed the Code of Conduct
e-learning course launched in November
2022.
100% (99) had completed the previous
version of the course.
20 21 22
100
80
60
40
20
0
TARGET
CODE OF CONDUCT
E-LEARNING COMPLETION RATE
%
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We know the origin of our raw materials and who we work with
across the value chain.
Sustainability
of the supply chain
E
S
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Indicators and progress
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 wood we use always meets at
least the criteria for PEFC Controlled
Sources and FSC® Controlled Wood. In
2022, 83% (83) of the wood we used
came from certified forests and 17%
(17) from controlled forests.
18 19 20 21 22
100
80
60
40
20
0
TARGET
2030
SHARE OF CERTIFIED
WOOD FIBRE
%
>90%
Compliance and Ethics Channel
We encourage our employees and stakeholders to report any
breaches of legislation and ethical concerns they detect. Any
observations can be reported to the line managers, local manage-
ment, HR or the Compliance Committee or through Metsä Group’s
Compliance and Ethics channel.
The Compliance and Ethics Channel is open to everyone, and
reports can be submitted in ten languages, as well as anonymously
if required. The channel’s technical implementation is handled by
an external service provider. We are committed to protecting the
privacy of whistleblowers, and we do not accept any countermeas-
ures against those who have reported shortcomings in good faith.
No such countermeasures came to our attention in 2022.
We are committed to investigate all suspected violations
brought to our attention through the Compliance and Ethics Chan-
nel or in some other manner. The investigations are steered by the
Compliance Committee, composed of the directors in charge of
Metsä Group’s legal services, compliance and internal auditing. The
committee is also tasked with monitoring that the consequences of
the investigations are applied consistently in cases of equal gravity
and that the corrective actions are sufficient. Any illegal activities
are reported to the authorities. The changes required in the EU
Whistleblower Protection Directive have been taken into account
in our countries of operation with respect to the Compliance and
Ethics Channel, the investigation of reported violations and the
protection of whistleblowers.
In 2022, Metsä Board received a total of 6 (10) reports that
resulted in an investigation. The reported incidents are divided
into the following categories: fraud or other criminal behaviour;
corruption and bribery; competition law; conflicts of interest;
general personnel matters; discrimination; privacy and information
security; safety at work; the environment; breaches of the Supplier
Code of Conduct; and other reports. None of the cases resulted
in legal proceedings, investigation by the authorities or fines, or
concerned corruption, bribery, human rights violations, or the use
of child labour
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Our operations
A sustainable supply chain
It is important for us that our customers, suppliers and other
partners also operate sustainably. We use local suppliers whenever
possible. In 2022, 81% (78) of all our purchases originated from
Finland or Sweden, in which our production units are located. The
sustainability of our supply chain is separately ensured for wood
and fibre as well as other raw materials and services.
Wood supply
Our wood supply operations are guided by environmental policy,
Metsä Group’s principles for forest use and management, and the
requirements of the PEFC and FSC® chains of custody.
Metsä Group’s Wood Supply and Forest Services is responsible
for our wood supply. The pulp used in paperboard production is
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-sufficiency 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 aim for a 100% sustainable supply
chain, which we assess based on our
suppliers’ commitment to the Supplier
Code of Conduct and their success in
passing our background checks and
sustainability assessment.
Of our purchases in 2022, 99% (98) came from suppliers committed to our Supplier
Code of Conduct. Suppliers that have passed the Know Your Business Partner
background checks accounted for 96% (92) of our total purchases. As for the separate
sustainability assessment of our key suppliers and potentially risky suppliers, our
requirements are met by 63% (54) of our suppliers, calculated according to our total
purchases.
We aim to know the country of
manufacture of all our raw materials and
packaging materials by 2030.
In 2022, we knew the origin – at least
the country of manufacture – of 97%
(98) of the total purchases of raw
materials and packaging materials.
100
80
60
40
20
0
19 20 21 22 TARGET
2030
TRACEABILITY OF RAW
MATERIALS
%
100
80
60
40
20
0
100
80
60
40
20
0
TARGET
2030
TARGET
2030
TARGET
2030
SUPPLIERS’
COMMITMENT TO
THE SUPPLIER CODE
OF CONDUCT
%
SUPPLIER
BACKGROUND
CHECK PASSED
%
SUPPLIER
SUSTAINABILITY
ASSESSMENT PASSED
%
100
80
60
40
20
0
19 20 21 22 19 20 21 22 19 20 21 22
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REPORT
For our customers to be able to purchase certified paperboard or
pulp, both the forests and the Chain of Custody 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 peoples. Forest certification
requires an external third party to audit the certified forest areas
and regularly implemented measures. According to Metsä Group’s
policy, requirements concerning biodiversity, the environment
and social responsibility as well as statutory requirements are also
followed in uncertified forests so that the criteria set for controlled
wood are met.
Our Chain of Custody is annually assessed through internal
and third-party audits. The audits cover Metsä Group’s business
operations from the forest to the end product. 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 secur-
ing of Indigenous people’s rights, safety at work, and traceability
and calculation practices, which should accord 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 2022, our wood use totalled 8.3 million cubic metres (8.3
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. Of the wood used by
Metsä Board, 12% came from the sawmill industry’s side streams,
woodchips. Of all the wood fibre we used, 83% (83) came from
certified forests and 17% (17) was controlled wood. All the wood
fibre we use meets the requirements of the PEFC and FSC chains of
custody.
The availability of certified wood fibre is limited – around 11%
of the world’s forests are certified. The war that Russia started in
Ukraine in February 2022 has reduced the volume of certified wood
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 sustaina-
bility. Certification and traceability
ensure that the wood used in a
product comes from sustainably
managed forests.
The pulp used in paperboard
production 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 cal-
culations that the volume of certi-
fied 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 calcu-
lates 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 require-
ments of PEFC Controlled Sources
and FSC® Controlled Wood.
Most of the wood we use comes
from PEFC or FSC®-certified North-
ern European forests. The forest
owners have agreed to the require-
ments of forest certification. Metsä
Group and external auditors verify
the sustainable forest management
by auditing harvesting sites, for
example.
PEFC/02–31–92
FSC®-C001580
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.
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Procurement of other raw materials and services
The sustainability of suppliers providing material other than wood
or fibre, including chemicals, machinery, equipment, transport and
other services, is centrally ensured in Metsä Group’s procurement
process.
Our procurement process includes a number of risk management
tools:
• The minimum requirements for our suppliers are detailed in
our Supplier Code of Conduct. The Code sets requirements on
human rights responsibilities, health, safety and environmental
responsibilities, and includes a recommendation to set
emission reduction targets for greenhouse gases. Our Code of
Conduct is part of our purchase agreements, and all our sup-
pliers are required to commit to them or to their own equivalent
principles. 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.
• Third-party due diligence is carried out for most of our suppliers
as part of the Know Your Business Partner process. It provides
us with a better understanding of who we are working with
and helps us 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.
• A separate sustainability assessment is conducted for our
most significant suppliers and potentially risky suppliers. It
comprises a self-assessment form for the supplier, an analysis
of the responses and any recommendations for developing the
supplier’s operations.
• Metsä Group or an external party audits some of the suppliers.
In our audits, we focus on the way in which suppliers handle
environmental matters and ensure quality and safety at work
in their operations. We have trained our auditors to detect risks
related to forced labour and labour exploitation.
• We investigate the origin – at least the country of origin – of
our raw materials and packaging materials with product safety
questionnaires.
• We also require our suppliers to meet our requirements with
regard to the cleanliness and safety of products (pp. 50–51).
• We monitor the development of sustainability of the suppliers
for whom we have recommended development measures.
• We require our employees in the procurement organisation to
complete e-learning courses in topics such as procurement,
agreement and competition policy.
In 2022, we continued to improve the traceability of our raw
materials, including process, basic and coating chemicals, as well
as packaging materials. We aim to make information about the
origin of raw materials a more inherent part of risk analyses and to
better target supplier background checks and audits at suppliers in
risk countries. In 2022, a third party audited 14 (17) of our suppliers
and Metsä Group audited 2 (0).
available, as forest certification standards prohibited during the
2022 spring the use of Russian and Belarusian wood in PEFC- and
FSC-certified products and products containing controlled wood.
Metsä Board has managed to retain a high level of certification in its
wood use thanks to the high share of certified forests in our main
wood supply areas: around 90% in Finland and 65% in Sweden.
Read more about forest biodiversity and carbon storage (pp. 27–29)
Finland ���������������������������������60%
Sweden ��������������������������������32%
Baltic countries ����������������������7%
Russia* ������������������������������������ 1%
WOOD SUPPLY AREAS IN 2022
* Wood supply from Russia was discontinued in March 2022.
57
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S
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REPORT
Advocacy
Our advocacy efforts focus on developing regulation at the national
and European Union level. Topics relevant for the paperboard
and packaging industry at the EU level include the promotion of
the circular economy, sustainable product policies, the proposed
ecodesign regulation, the proposed regulation concerning packag-
ing and packaging waste, and the sustainable finance taxonomy.
Key memberships in 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 2022, our
representatives were active in 4evergreen’s Steering Group and
team of public relations experts.
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), which
represents paperboard producers and packaging converters. As
part of Metsä Group, we are an active member in the Confederation
of European Paper Industries (Cepi), which supports the EU’s goal
of achieving climate neutrality by 2050. Metsä Group’s President
and CEO chairs the Board of Cepi.
We are also involved in a number of national-level advocacy
organisations, the most important of which are the Finnish Forest
Industries Federation, the Swedish Forest Industries Federation,
and Die Papierindustrie, an association of German paper mills.
In 2022, Metsä Board paid a total of EUR 650,000 in mem-
bership fees to industrial associations. Metsä Group’s parent
company, Metsäliitto Cooperative, has registered with the EU
Transparency Register, maintained by the European Parliament
and European Commission, and has signed the Register’s Code of
Conduct.
We take part in advocacy as part of Metsä Group. We focus on promoting the bioecon-
omy, and the role of forests, the forest industry, and wood-based products in mitigating
climate change and securing biodiversity. We increase understanding of fresh fibre as
an enabler of the fibre cycle, the benefits of wood fibre-based packaging materials, and
product and food safety.
According to Ritva Mönkäre,
Metsä Board’s Communications
Manager and Brussels-based
Tytti Peltonen, Metsä Group’s
Vice President, Corporate
Affairs, active science-based
advocacy helps improve the
functioning and environmental
impact of regulation.
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Environmental benefits from
single-use fibre packaging
In takeaway restaurants, single-use fibre packaging is a better
solution than reusable packaging in terms of the environment.
This was the finding of a life-cycle assessment (LCA) con-
ducted by Ramboll, an independent consultancy, and published
by the EPPA in 2022. During its life cycle, single-use takeaway
packaging generates less CO
2
emissions and consumes less
water than reusable tableware, for example. A similar result
was arrived at in a life-cycle assessment conducted a year
earlier by Ramboll and published by the EPPA, which studied
the environmental impacts of packaging used in European fast
food restaurants.
Further information about the study is available at eppa-eu.org
Open day drew a crowd in Simpele
The open day organised at the Simpele paperboard mill in
September 2022 attracted numerous students and other
residents from Simpele and neighbouring municipalities. In
addition to presenting the paperboard mill, the event showcased
Metsä Group’s other business areas and products. “It was great
to see that so many people were interested in our mill and its
operations. We were positively surprised by the event attracting
1,300 visitors. For many, the tour of the mill was a highlight of
the day,” says Timo Tallinen, Director of the Simpele mill. Open
days organised at mills are an established way for Metsä Board
to present its operations to local residents and other people
interested in the topic.
Encouraging children and
young people to exercise
Metsä Group is the main partner of the Finnish Athletics
Federation in the field of athletics for children and young
people. The Finnish Athletics Federation annually organises
around 500 club competitions across Finland, reaching out to
approximately 30,000 children and young people aged 5–15.
The goal of club competitions is to encourage the age group to
try different disciplines and get to know a variety of hobbies in a
safe and cheerful way.
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MILL-SPECIFIC INFORMATION
The data in the table have been assured by an independent third-party (limited assurance). The Assurance Report is available on page 68.
Mills Joutseno Kaskinen Kemi Kyro Simpele Tako Äänekoski Husum Others
6)
Total
COUNTRIES FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND SWEDEN
Personnel
Number of employees, FTE
1)
54 84 128 143 273 193 192 693 488 2,248
Total Recordable Injury Frequency
(TRIF)
2)
0 6.7 9.1 7.8 6.3 21 6.1 6.0 6.7
Lost-time accident frequency (LTA1F)
3)
0 6.7 4.5 7.8 4.2 18 6.1 4.3 5.4
Sickness absences, %
4)
7 3.1 4.5 5.1 4.6 7.2 6.4 6 4.9
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 CO
2
0 168,978 0 118,611 177,268 1,072 0 1,484,972 1,950,901
Fossil-based CO
2
(Scope 1) 26,969 8,307 6,884 16,873 43,301 70,545 0 63,158 236,037
Sulphur (SO
2
)
5)
0 29 0 53 81 0 0 255 418
Total reduced sulphur (TRS) 0 0 0 0 0 0 0 60 60
Nitrogen oxides (NO
2
) 14 103 3 81 126 48 0 851 1,226
Particles 10 8 0 5 2 0 0 260 285
Discharges to water (t)
Adsorbable organic halogen (AOX) 0 0 0 0 0 0 0 50 50
Chemical oxygen demand (COD) 679 892 264 154 225 166 512 7,476 10,368
Biological oxygen demand (BOD) 5 40 30 11 27 45 165 323 647
Total phosphorus 0 2 1 1 1 1 1 15 23
Total nitrogen 4 14 31 13 9 1 10 90 172
Total suspended solids 40 123 124 78 40 29 95 988 1,517
Water use (1,000 m
3
)
Water sourcing 6,414 13,821 9,625 4,292 2 7, 372 3,803 0 44,640 109,967
Wastewater flow 563 2,999 7,706 3,026 4,514 2,469 2,890 34,573 58,740
Waste and by-products (t)
Utilised by-products and waste 21,410 20,493 5,800 23900 23,110 5,833 11,232 57,74 9 169,527
Landfill waste 0 4.8 101 3.8 0 0.00 54 0 163
Hazardous waste 42 293 4 24 87 58 27 424 960
1)
Full-time equivalent on 31 December 2022
2)
Total Recordable Incident Frequency per million hours worked, TRIF = number of accidents * 1,000,000 / hours worked. The TRIF rate includes not only accidents at work resulting
in absence but also accidents at work requiring compensatory work or medical treatment. The former subsidiary Hangö Stevedoring is included in the Total figure until the end
of February 2022.
3)
LTA1 frequency rate. Accidents at work resulting to at least one day sick leave, excluding the day of the accident, per million hours worked. The former subsidiary Hangö Stevedoring
is included in the Total figure until the end of February 2022.
4)
% of theoretical working time. The former subsidiary Hangö Stevedoring is included in the Total figure until the end of February 2022.
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 ja FSC®-C001580
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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 360,000 360,000
Kaskinen Finland 390,000 390,000
Total 730,000 750,000 1,480,000
Metsä Fibre pulp mills
1)
Tonnes Country Chemical pulp BCTMP 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 2022, there were no environmental incidents or permit violations at Metsä Board’s mills that would have caused significant environ-
mental impacts, and would have been followed by claims, compensations or significant media coverage. The incidents that have caused
violations of montlhly permit limit values are detailed in the table below. There were no exceedances at quarterly or annual level.
The data in the table have been assured by an independent third-party (limited assurance). The Assurance Report is available on page 68.
Unit Incident Corrective actions
Äänekoski The reduction of suspended solids at the wastewater
treatment plant failed to meet the permit conditions in
August.
Review and adjustment of flocculant input.
Kyro The monthly phosphorus limit for wastewater was
exceeded in September.
Adjustment of the aeration and process at the
wastewater treatment plant.
Kyro The monthly limit for phosphorus and solids in wastewater
was exceeded in November.
More precise adjustments to the process during
the mill’s maintenance shutdown.
Tako The monthly limit for suspended solids in wastewater was
exceeded in November.
More precise sampling. The incident was likely caused by a
sampling error.
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CODE ACCOUNTING METRIC CATEGORY COMMENTS AND REFERENCES
Greenhouse gas emissions
RR-PP-110a.1. Gross global Scope 1 emissions
(gross)
Quantitative 236,037 tonnes of fossil-based Scope 1 carbon dioxide emissions.
We also disclose fossil-based Scope 2 carbon dioxide emissions, Scope 3
greenhouse gas emissions as well as biogenic carbon dioxide emissions
(p. 33). For Scopes 1 and 2 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 market-based 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 fossil-based Scope 1 and Scope 2 emissions will reduce
to zero. In 2018–2022, our Scope 1 and 2 emissions per tonne produced
reduced by 33%. Further information about our progress in this respect
and on our plan for achieving the target can be found on pp. 32–33.
Air quality
RR-PP-120a.1 NO
X
(excluding N
2
O) Quantitative 1,226 tonnes (as NO
2
)
SO
2
Quantitative 418 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 285 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 8,561 GWh (according to the GRI calculation method, end-use)
In accordance with the established practice, we disclose energy consump-
tion as gigawatt hours and based on lower heating values (pp. 34–35).
Percentage grid electricity Quantitative 22%
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 4,941 GWh
of which 4,345 GWh is renewable energy and 67 GWh was sold outside
Metsä Board. Sold energy was mainly based on bio-based energy sources
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. A risk analysis has been performed in terms of the biomass, and
all the biomass we use is climate neutral in accordance with EU regula-
tions 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 2022 follows the SASB Industry Standard for Pulp & Paper Products,
which falls under the SASB Industry Class Renewable Resources & Alternative Energy. Referenc-
es to more detailed information are given in the table. The data in the table have been assured by
an independent third-party (limited assurance). For the Assurance Report, see page 68.
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CODE ACCOUNTING METRIC CATEGORY COMMENTS AND REFERENCES
Water management
RR-PP-140a.1 Total water withdrawn Quantitative 109,901 (1,000 m³) surface water
65 (1,000 m³) groundwater
Nearly 100% of the process and cooling water is surface water. We only use
groundwater for hygiene, laboratory, etc. purposes.
Total water consumed, percentage
of each in regions with High or Ex-
tremely High Baseline Water Stress
Quantitative 4,399 (1,000 m³) water consumed
Of all the water we use 96% is returned to waterbodies after use and
roughly 4%, either evaporates during the process or is bound to products
(pp. 40–41). The figure is based on a value that takes into account direct
water intake and the water contained in the raw materials (p. 67). 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 twice a year at the company level. At the pro-
duction unit level risk assessments are done in accordance with certified
management systems. Climate change may also cause water-related risks
in the future (pp. 36–37). Our target of reducing the use of process water
by 30% per tonne produced during 2018–2030 reduces our water risk.
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. Thus the wood fibre we use is traceable (p. 54–57).
In our view the properties of PEFC-certified and FSC-certified wood fibre
are not materially different, due to which we do not disclose their percent-
ages separately.
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. We promote the circular economy throughout our value chain (pp.
8–9, 24–25, 30–31). Our life cycle assessments have shown the carbon
footprint of packaging made from our fresh fibre paperboard is up to more
than 50% smaller than that of packaging made from recycled fibre of equal
stiffness (2019). Metsä Board is prepared for the reputational and physical
risks associated with forest use (pp. 36–37).
Activity metrics
RR-PP-000.A Pulp production Quantitative 1,409,000 tonnes (chemical pulp and BCTMP)
RR-PP-000.B Paper production Quantitative 1,890,000 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, not as tonnes (pp. 55–57).
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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 management pp. 20–21
CG: Risk management p. 174
b) Describe the management’s role in assessing and managing
climate-related risks and opportunities.
AR: Sustainability management pp. 20–21
CG: Risk management p. 174
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 organisa-
tion has identified over the short, medium, and long term.
AR: Strategy pp. 8–9
AR: Operating environment pp. 12–14
AR: Product and service development pp. 16–17
AR: Climate-related risks and opportunities pp. 36−37
AR: Sustainable products pp. 30–31
BDR: Most significant risks and uncertainties pp. 85–88
CG: Risk management p. 174
b) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
AR: Strategy pp. 8–9
AR: Sustainability management pp. 20–21
AR: Climate-related risks and opportunities pp. 36−37
BDR: Most significant risks and uncertainties pp. 85–88
CG: Risk management p. 174
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario.
In line with Metsä Board’s strategy, the company has a plan to achieve zero car-
bon dioxide emissions (Scope 1 and Scope 2, market-based) at all its mills by the
end of 2030. The emissions target is science-based and approved by SBTi (1.5°C
target level). The target is also fossil free for all raw materials. To mitigate climate
change and and to adapt to a low-carbon future, investments and development
measures have been and will be made in energy efficiency and the transition to
fossil free energy sources in own energy production and in purchased energy.
The company has analysed climate-related scenarios and examined the potential
effects 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. 16–17
AR: Sustainable products pp. 30–31
AR: Climate-related risks and opportunities pp. 36−37
AR: Forests, climate and the environment pp. 27–41
BDR: Most significant risks and uncertainties pp. 85–88
Disclosures in accordance
with the TCFD recommendations
Metsä Board’s disclosures concerning climate-related risks and opportunities in accordance with
the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are com-
piled 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) Cor-
porate Governance Statement.
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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 assess-
ing climate-related risks.
Climate-related risks have been integrated into Metsä Board’s overall risk
management:
AR: Sustainability management pp. 20–21
AR: Climate-related risks and opportunities pp. 36−37
BDR: Most significant risks and uncertainties pp. 85–88
CG: Risk management p. 174
b) Describe the organisation’s processes for managing climate-re-
lated risks.
BDR: Most significant risks and uncertainties pp. 85–88
CG: Risk management p. 174
c) Describe how the processes for identifying, assessing and manag-
ing 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 management pp. 20–21
BDR: Most significant risks and uncertainties pp. 85–88
CG: Risk management p. 174
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 cli-
mate-related risks and opportunities in line with its strategy and risk
management process.
AR: Sustainability targets pp. 22–23
AR: Sustainable products pp. 30–31
AR: Forests, climate and the environment pp. 27–41
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 green-
house gas emissions and the related risks.
Scope 1, Scope 2 and Scope 3 emissions:
AR: Climate and energy pp. 32–37
c) Describe the targets used by the organisation to manage climate
related risks and opportunities and performance against targets.
AR: Sustainability targets pp. 22–23
AR: Sustainable products pp. 30–31
AR: Forests, climate and the environment pp. 27–41
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Principles of
sustainability reporting
Non-financial reporting covers the entire Metsä Board Group,
including Metsä Board Corporation and all companies in which
the Group directly or indirectly holds more than 50% of the votes,
unless otherwise stated. Metsä Board owns 24.9% of its associ-
ated company Metsä Fibre, and the financial reporting includes
the share of Metsä Fibre’s result corresponding to this holding. In
non-financial reporting, the corresponding share of Metsä Fibre’s
sustainability information is not included in Metsä Board’s sustain-
ability information, with the exception of Metsä Fibre’s Scope 1 and
Scope 2 emissions, which are taken into account in the emissions
from Metsä Board’s value chain (Scope 3).
• Environmental data are compiled from the operations of
production units, and they have an environmental permit for
their operations.
• Personnel data are compiled for all employees of the Group.
The reporting also covers subcontractors in terms of accidents.
• This report also contains information related to the value chain,
such as Scope 3 emissions and key figures describing the
sustainability of suppliers.
Metsä Board’s sustainability themes and key figures are based on
Metsä Group’s materiality assessment conducted in 2018. Based
on the materiality assessment, the most relevant indicators for
the company’s operations, products and stakeholders have been
selected. The materiality analysis and material topics were updated
in 2022. The updated themes and targets will be adopted as of
the reporting of 2023 data. Further information on the materiality
assessment and its results is available on page 23.
Sustainability Report 2022 follows the SASB Industry Standard
for Pulp & Paper Products, which falls under the SASB Industry
Class Renewable Resources & Alternative Energy. The reporting
has been substantially supplemented by applying the Global
Reporting Initiative (GRI) 2021 standards. The reporting period is
1 January−31 December 2022. The previous Sustainability Report
was published on 23 February 2022. The report is published
annually.
Selected sustainability performance data and claims related
to them have been externally assured (limited assurance) by an
independent third party PricewaterhouseCoopers Oy. Assurance
was conducted in compliance with international standards on
assurance engagements, ISAE 3000 (Revised) and ISAE 3410. The
assurance report is available on page 68. Assurance covers:
• Data in the Non-financial key figures table (p. 79)
• EU Taxonomy KPIs (pp. 83−85)
• Data in the mill-specific information table (p. 60).
• Data in the environmental permit limit violations table (p. 61)
• Data in the SASB reporting table (pp. 62−63)
Environmental reporting principles
Only material flows (raw materials, energy, water, products and
waste) to and from industrial sites are taken into account. For
example, interim storage is not reported for waste.
The Group’s greenhouse gas emissions are calculated in
accordance with the GHG Protocol (GHG Protocol Corporate
Accounting and Reporting Standard and Corporate Value Chain
(Scope 3) Accounting and Reporting Standard). Reporting covers
direct carbon dioxide emissions (Scope 1) from Metsä Board’s
own operations, indirect carbon dioxide emissions (Scope 2) from
the generation of purchased energy, and indirect greenhouse gas
emissions from the rest of the value chain (Scope 3), including
upstream and downstream emissions in the GHG Protocol Scope 3
emission categories identified as significant.
For Scope 1 and 2 emissions, the climate impact consists of
CO
2
emissions, as the share of other greenhouse gas emissions
is estimated to be very low and therefore irrelevant for reporting
purposes. Scope 3 emissions consist of CO
2
and other greenhouse
gases. All Scope 3 emissions have been converted into CO
2
equiv-
alents. Biogenic CO
2
emissions originate from wood-based fuels,
and the CO
2
emission factor used for their calculation is 396 tonnes
of CO
2
/GWh. Emissions from power plants are allocated to mills,
which use the energy from those power plants.
Scope 1 emissions are calculated from fuels used at Metsä
Board’s production units. Calculation is based on supplier-specific
emission factors for fuels or nationally specified emission factors.
Scope 2 emissions include emissions from purchased electricity
and heat used at Metsä Board’s production units. Emissions from
purchased electricity have been calculated using two different
methods. The market-based method uses supplier-specific emis-
sion factors for electricity, supplemented by national residual-mix
Metsä Board Corporation and its subsidiaries comprise a forest industry
group “Metsä Board” or “the Group”. Metsä Board’s business operations
comprise folding boxboards, white kraftliners and market pulp.
66
SUSTAINABILITY REPORT
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
emission factors for untracked purchased electricity. The
location-based method uses country-specific emission factors for
average electricity generation. Residual-mix and country-specific
emission factors are obtained from the AIB’s (Association of
Issuing Bodies) report on European emission factors. Heat is
obtained as a direct energy transfer from pulp mills and emissions
are determined by actual fuel consumption.
Scope 3 emissions are calculated using primary data on Metsä
Board’s procurement (e.g. t, m
3
, EUR, tkm). Life-cycle emission
factors available from various databases, such as ecoinvent, Defra
and GaBi, are primarily used in the calculation. Based on the infor-
mation obtained from suppliers, supplier-specific factors are used
where applicable, for example, for pulp procured from Metsä Fibre
and for certain purchased chemicals. Scope 3 reporting covers the
following emissions categories:
• Purchased goods and services: procured wood and pulp and
other raw materials and services
• Capital goods: purchased capital goods
• Fuel- and energy-related activities: impacts of energy produc-
tion (other than the emissions included in Scope 1 and 2)
• Upstream transportation and distribution: wood ans pulp
transports to Metsä Board’s mills
• Waste generated in operations: treatment of landfill and
hazardous waste
• Downstream transportation and distribution: third-party
product transports to customers purchased by Metsä Board
• Processing of sold products: expected further processing of the
sold market pulp and high-yield pulp
• End-of-life treatment of sold products: expected end-of-life
treatment of the sold paperboard (combustion, landfill,
recycling)
• Investments: Metsä Board’s share (24.9%) of Metsä Fibre’s
Scope 1 and 2 emissions
Energy consumption is expressed both as primary energy con-
sumption and final energy consumption. Primary energy consump-
tion includes the energy consumed in end use and the amount of
energy used to produce energy. For purchased electricity, primary
energy is calculated by dividing the amount of purchased electricity
by the assumed efficiency of energy production: traditional fuels
0.4, nuclear power 0.33, hydro, wind and solar power 1. The total
energy of purchased heat is calculated based on the actual fuel
consumption of nearby power plants.
Calculated according to the GRI, Metsä Board’s final energy
consumption is 8.6 TWh. This calculation method does not take
into account the efficiency factors of electricity and heat. Final
energy consumption is obtained by summing up renewable fuel, i.e.
biomass (4.93 TWh), non-renewable fuel (1.03 TWh), self-gener-
ated hydropower (0.03 TWh), purchased electricity (1.92 TWh) and
purchased heat (0.73 TWh) consumed at the mills. Sold heat and
electricity (0.07 TWh) are deducted from this.
Waste volumes include moisture. Waste figures include volumes
for final disposal (material and energy recovery, landfilling and
hazardous waste treatment). Part of the reported waste comes
directly from the mill process and part from interim storage. Waste
generated in the mill process and transferred to interim storage is
not included in this figure.
Wastewater discharges are based on laboratory measurements,
as in reporting to authorities. Discharges of external wastewater
treated in our wastewater treatment plants are not taken into
account in Metsä Board’s reporting. The allocation of emissions
between internal and external inflows is carried out assuming theo-
retical chemical oxygen demand (COD) reductions for each inflow,
which are then corrected according to the actual COD reduction
for the whole plant. Other discharges are allocated according to
the flow. In the mill integrates, the amount of COD is allocated to
parties using the wastewater treatment plant based on the quality
of COD.
At Tako mill, some of the wastewater discharges are fed through
the municipal wastewater treatment plant, which assumes an 85%
reduction in COD. Emissions of biological oxygen demand (BOD),
phosphorus and suspended solids are calculated based on the
flow, using the following residual concentrations: BOD 10 mg/l,
total phosphorus 0.5 mg/l and total suspended solids 10 mg/l.
Total nitrogen emissions are considered zero because municipal
wastewater contains excess nitrogen, and a reduction of our
BOD binds nitrogen to biomass, reducing the mill’s total nitrogen
emissions.
Water consumption is an estimate of the amount of water evap-
orated during production and wastewater treatment, and bound
in products and wastewater treatment sludges. The calculation
is based on an estimate that takes into account, in addition to the
above, direct abstraction, water contained in raw materials and
water returned to water bodies.
Personnel reporting principles
The number of employees is reported as full-time equivalents
(FTE). The sickness absence rate is calculated per theoretical
hours worked. LTA1F, i.e. the lost-time accident rate, includes all
accidents at work that have resulted in at least one day of absence,
excluding the day of the accident. TRIF, i.e. the frequency of
accidents at work, includes not only accidents at work resulting in
absence but also accidents at work requiring compensatory work
or medical treatment. Both measures are calculated as follows:
number of accidents x 1,000,000 / hours worked.
For external partners, the number of accidents resulting in
absence (LTA1), the accident severity rate and the number of
fatal occupational accidents are reported. The figures cover our
partners operating on the mill site, excluding major investment
projects, e.g. the Husum recovery boiler and board machine
investments and the Kemi paperboard mill investment.
Women’s share in executive management includes women
with the management level of VP, SVP or CEO and a management
requirement level of IPE 58 at least. New entrants include only new
permanent employees. Leavers include only permanent employees
who have left the company. Employee turnover rate includes all
permanent leavers and redundancies due to business restructur-
ing and is calculated per the average permanent head count.
67
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT GOVERNANCE
SUSTAINABILITY
REPORT
To the Management of Metsä Board Oyj
We have been engaged by the Management of Metsä Board Oyj (hereinafter also the “Company”) to perform a limited assurance engagement on selected sustaina-
bility information for the reporting period 1 January 2022 to 31 December 2022, disclosed in the Company’s Annual and Sustainability Report 2022 (hereinafter the
Selected sustainability information).
Selected sustainability information
The selected sustainability information within the scope of assurance are the
economic, social and environmental sustainability indicators including EU
Taxonomy KPIs for climate change mitigation and climate change adaptation
as identified in the table “Data in scope of assurance” in the Company’s Annual
and Sustainability Report 2022.
Management’s responsibility
The Management of the Company is responsible for preparing the Selected
sustainability information in accordance with the Reporting criteria as set out in
the Company’s reporting instructions described in the Company’s Annual and
Sustainability Report 2022, the GRI Standards of the Global Reporting Initiative,
SASB Pulp and Paper Products Sector Standard and EU Taxonomy Regulation
(EU 2020/852) and Delegated Act (EU 2021/2178) (collectively “Reporting
criteria”).
The Management of the Company is also responsible for such internal control
as the management determines is necessary to enable the preparation of the
Selected sustainability information that is free from material misstatement,
whether due to fraud or error.
Practitioner’s independence, other ethical
requirements and quality control
We have complied with the independence and other ethical requirements of the
International Code of Ethics for Professional Accountants (including Interna-
tional Independence Standards) issued by the International Ethics Standards
Board for Accountants (IESBA Code), which is founded on fundamental
principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behavior.
PricewaterhouseCoopers Oy applies International Standard on Quality
Control (ISQC) 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.
Practitioner’s responsibility
Our responsibility is to express a limited assurance conclusion on the Selected
sustainability information based on the procedures we have performed and the
evidence we have obtained. We conducted our limited assurance engagement
in accordance with the International Standard on Assurance Engagements
(ISAE) 3000 (revised) “Assurance Engagements Other than Audits or Reviews
of Historical Financial Information” and, in respect of greenhouse gas emis-
sions, ISAE 3410 “Assurance Engagements on Greenhouse Gas Statements”.
These standards require that we plan and perform the engagement to obtain
limited assurance about whether the Selected sustainability information is free
from material misstatement.
In a limited assurance engagement, the evidence-gathering procedures are
more limited than for a reasonable assurance engagement, and therefore less
Independent practitioner’s limited assurance report
(Translation of the Finnish Original)
assurance is obtained than in a reasonable assurance engagement. An assur-
ance engagement involves performing procedures to obtain evidence about
the amounts and other information in the Selected sustainability information.
The procedures selected depend on the practitioner’s judgment, including an
assessment of the risks of material misstatement of the Selected sustainability
information.
Our work consisted of, amongst others, the following procedures:
• Interviewing senior management of the Company.
• Conducting two site visits (one video interview and one on-site) with Metsä
Board’s production sites in Finland and Sweden.
• Interviewing employees responsible for collecting and reporting the selected
information on sustainability indicators at the Group level.
• Assessing how Group employees apply the reporting instructions and
procedures of the Company.
• Testing the accuracy and completeness of the information from original
documents and systems on a sample basis.
• Testing the consolidation of information and performing recalculations on a
sample basis.
• Considering the disclosure and presentation of the Selected sustainability
information.
Limited assurance conclusion
Based on the procedures we have performed and the evidence we have
obtained, nothing has come to our attention that causes us to believe that
Metsä Board Oyj’s Selected sustainability information for the reporting period
1 January 2022 to 31 December 2022 is not properly prepared, in all material
respects, in accordance with the Reporting criteria.
When reading our limited assurance report, the inherent limitations to the
accuracy and completeness of sustainability information should be taken into
consideration.
Our assurance report has been prepared in accordance with the terms of our
engagement. We do not accept, or assume responsibility to anyone else, except
to Metsä Board Oyj for our work, for this report, or for the conclusions that we
have reached.
Helsinki 21 February 2023
PricewaterhouseCoopers Oy
Mikael Niskala
Partner
ESG Reporting & Assurance
Karsten Westerling
Partner, KHT
ESG Reporting & Assurance
68
SUSTAINABILITY REPORT
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Non-financial key figures in the Disclosure of non-financial information:
Environment
Share of certified wood fibre, %
Traceability of raw materials, % of total purchases
Share of fossil-free raw materials and packaging materials, % of dry tonnes
Direct fossil-based CO
2
emissions (Scope 1), t
Indirect fossil-based CO
2
emissions (Scope 2, market-based), t
Indirect fossil-based CO
2
emissions (Scope 2, location-based), t
Indirect fossil-based CO
2
e emissions (Scope 3), t
Share of target group suppliers who have set SBTi targets (Scope 3), %
Share of fossil free energy (Scope 1 + 2, market-based), %
Improvement in energy efficiency from 2018 level, %
Reduction in the use of process water per produced tonne compared to 2018 level, %
Utilisation of production side streams, %
Social responsibility and personnel
Total Recordable Injury Frequency (TRIF) per million hours worked
Lost-time accident frequency (LTA1F) per million hours worked
Share of women in executive management (Vice President or higher) by 2025, %
Diversity, equality and inclusion e-learning completion rate, %
Women’s total earnings compared to men’s total earnings for white-collars/blue-collars
Anti-corruption, anti-bribery and corporate culture
Code of Conduct e-learning completion rate, %
Ethics index of the Ethics barometer
Suppliers’ commitment to the Supplier Code of Conduct, % of total purchases
Supplier background check passed, % of total purchases
Supplier sustainability assessment passed, % of total purchases
EU Taxonomy KPIs for climate change mitigation and adaptation in the
Disclosure of non-financial information.
Mill-specific information based on the GRI Standards:
Personnel
Number of employees, FTE
Total recordable injury frequency, TRIF
Lost-time accident frequency, LTA1F
Sickness absenteeism, %
Managment system
ISO 9001
ISO 14001
ISO 50001
ISO 45001
ISO 22000
FSSC 22000
Chain of custody
PEFC
FSC®
Emissions to air (t)
Biogenic CO
2
Fossil-based CO
2
( Scope 1)
Sulphur (SO
2
)
Total reduced sulphur
Nitrogen oxides (NO
2
)
Particles
Discharges to water (t)
Adsorbable organic halogen (AOX)
Chemical oxygen demand (COD)
Biological oxygen demand (BOD)
Total phosphorus
Total nitrogen
Total suspended solids
Water use (1 000 m
3
)
Water withdrawal
Wastewater flow
Waste and by-products (t)
Recovered by-products and waste
Landfill waste
Hazardous waste
Environmental permit limit violations based on the GRI Standards.
SASB metrics based on the SASB Pulp & Paper Products Industry
Standard:
Greenhouse gas emissions
RR-PP-110a.1
Gross global Scope 1 emissions
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
Air quality
RR-PP-120a.1
NOX (excluding N
2
O)
SO
2
Volatile Organic Compounds (VOCs)
Particulate matter (PM)
Hazardous Air Pollutants (HAPs)
Energy management
RR-PP-130a.1
Total energy consumed
Percentage grid electricity
Percentage from biomass
Percentage from other renewable energy
Total self-generated energy
Risks and uncertainties related to the use of biomass as an energy source
Water management
RR-PP-140a.1
Total water withdrawn
Total water consumed, percentage of each in regions with High or Extremely High Base
-
line Water Stress
RR-PP-140a.2
Description of water management risks and discussion of strategies and practices to
mitigate those risks
Supply chain management
RR-PP-430a.1
Percentage of wood fibre sourced from (1) third-party certified forestlands and percen
-
tage to each standard and (2) meeting other fibre sourcing standards and percentage to
each standard
RR-PP-430a.2
Amount of recycled and recovered fibre procured
Activity metrics
RR-PP-000.A Pulp production
RR-PP-000.B Paper production
RR-PP-000.C Total wood fibre sourced
Data in the scope of assurance
69
600
500
400
300
200
100
0
400
300
200
100
0
-100
350
300
250
200
150
100
50
0
350
300
250
200
150
100
50
0
15
12
9
6
3
0
600
500
400
300
200
100
0
30
25
20
15
10
5
0
30
25
20
15
10
5
0
25
20
15
10
5
0
18 19 20 21 22
18 19 20 21 22
18 19 20 21 2218 19 20 21 22 18 19 20 21 22
18 19 20 21 22
18 19 20 21 22 18 19 20 21 22
18 19 20 21 22 18 19 20 21 22
18 19 20 21 22
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
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
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 �����������������������������14%
Pulp * ���������������������������� 20%
Logistics ���������������������� 15%
Personnel �������������������� 10%
Chemicals �������������������� 15%
Energy �������������������������� 18%
Other ����������������������������� 8%
TOTAL COSTS 2022
EUR 2.1 billion
Development of key figures per
share can be found on
page 164.
*) 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 2022:
wood 51%, chemicals 15%, logistics 12%, personnel 5%,
other 17%.
70
Auditor’sreportonESEF
Non-official version and translation
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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
Accountsreceivable
andotherreceivables
Otherliabilities
Accountspayableand
otherliabilities
Provisions
Capitalstructureandfinancialrisks
Shareholders’equity
Financialincomeandexpenses
Otherfinancialassets
Cashandcashequivalents
Borrowingsandnetdebt
Managementoffinancialrisks
Classificationandfairvaluesof
financialassetsandliabilities
Incometaxes
Groupstructure
Groupcompanies
Acquisitionsassetsclassifiedas
heldforsaleandoperationsdisposedof
Relatedpartytransactions
Othernotes
Contingentliabilitiesassets
andcommitments
■ 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
Disputeslegalproceedings
andcommitments
Sharesandholdings
TheBoard’sproposaltothe
AnnualGeneralMeetingfor
thedistributionoffunds
Auditor’sreport
Sharesandshareholders
Calculationofkeyratios
Comparableperformancemeasures
Taxesandkeyfigures
Corporategovernancestatement
BoardofDirectorsofMetsäBoard
CorporateManagementTeam
ofMetsäBoard
Investorrelationsand
investorinformation
Report of the Board of the Directors
and financial statements
71
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Report of the Board of Directors 2022
■ Market environment
Paperboards
Global megatrends pose requirements for the safety, quality, sustainability
and recyclability of packaging. Pure and easily recyclable fresh fibre
paperboards made from renewable raw materials replace non-renewable
packaging materials like plastic. The coronavirus pandemic shifted
consumption from services to goods and accelerated the demand for fresh
fibre paperboards in nearly all end uses. At the end of 2022, the general
decline in the demand for consumer products, and the inventory adjust-
ments made in the value chain reduced the demand for paperboards.
In addition, the volumes of paperboard imported from Asia to Europe
increased towards the end of the year as the global challenges in logistics
eased.
In 2022, the deliveries of European folding boxboard and white
kraftliners to Europe decreased significantly from the previous year. Cor-
respondingly, market prices increased notably. Metsä Board accounted for
33% (34) of the overall deliveries of European folding boxboard producers
and for 57% (56) of exports from Europe.
In the United States, the 2022 production volumes of solid bleached
board for local consumption increased, and those of food service board
increased notably compared to the previous year. The market prices of
both solid bleached board and food service boards grew significantly.
Market pulp
Metsä Board and its associated company Metsä Fibre sell mainly long-fibre
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 2022, the demand for long-fibre market pulp was mainly at a good
level in Europe. In China, overall economic activity was weakened by the
strict coronavirus measures, but the demand for pulp remained at a good
level in view of supply. In the last quarter, demand for market pulp declined
in both Europe and China. The global supply for long-fibre market pulp
decreased due to several planned and unplanned production shutdowns,
as well as challenges in logistics, which eased towards the
■ Metsä Board’s business
Metsä Board produces high-quality, sustainable fresh fibre paperboards,
and is Europe’s largest producer of folding boxboard and white kraftliners.
The company’s folding boxboard is mainly used to package consumer
products such as food and pharmaceuticals, while its white kraftliners are
mainly used for various packaging needs in the retail sector. More than half
of the white kraftliners made by Metsä Board are coated. The total annual
paperboard capacity is approximately 2 million tonnes, and it is sold to
approximately 100 countries. Metsä Board’s main market areas are Europe
and North America.
Metsä Board produces chemical pulp and bleached high-yield pulp
(BCTMP), which are used in its own paperboard production, with some
sold as market pulp. The annual capacity for pulp and BCTMP is roughly
1.5 million tonnes. In addition, Metsä Board owns 24.9% of its associated
company Metsä Fibre, a global leader in the production of softwood market
pulp. Metsä Fibre’s annual pulp capacity is roughly 3.3 million tonnes.
■ Strategy and financial targets
Metsä Board’s strategy is to grow in fibre-based packaging materials and
renew its industrial operations. To implement this strategy, the company
has significant growth and development investments ongoing and planned
to meet the rapidly growing demand for recyclable and plastic-replacing
packaging materials in Europe and North America. Metsä Board’s produc-
tion is located close to its most important raw material, the high-quality
Northern wood fibre. The company aims to maintain high self-sufficiency in
pulp and energy.
Metsä Board’s decision-making is guided by financial and sustainability
targets, as well as long-term shareholder value growth. The company
focuses on continuous cost efficiency improvements and on customers
who benefit from the high performance of the company’s products and
services. The objective is to pay a competitive dividend and maintain a
strong balance sheet.
In 2022, Metsä Board’s financial targets and dividend policy remain
unchanged:
The comparable return on capital employed (ROCE) is at minimum 12%.
• Actual in 2022 was 20.9%.
A ratio of interest-bearing net debt to comparable EBITDA at maximum 2.5.
• Actual in 2022 was 0.2.
In line with 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 AGM on the dividend for the
2022 financial year, EUR 0.58 per share, corresponds to 50% of the
result for the financial period.
72
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Report of the Board of Directors
■ Delivery and production volumes
1,000 t 2022 2021 2020
Delivery volumes
Folding boxboard 1,208 1,296 1,223
White kraftliner 609 627 587
Metsä Board’s market pulp
1)
503 496 521
Metsä Fibre’s market pulp
2)
717 762 696
Production volumes
Folding boxboard 1,272 1,272 1,249
White kraftliner 605 634 591
Metsä Board’s pulp
1)
1,409 1,362 1,371
Metsä Fibre’s pulp
2)
731 747 702
1)
Includes chemical pulp and high-yield pulp (BCTMP).
2)
Equal to Metsä Board’s 24.9% holding in Metsä Fibre.
■ Key figures
2022 2021 2020
Sales, EUR million 2,479.6 2,084.1 1,889.5
EBITDA, EUR million 614.6 466.0 321.8
comparable, EUR million 602.8 472.2 315.8
EBITDA, % of sales 24.8 22.4 17. 0
comparable, % of sales 24.3 22.7 16.7
Operating result, EUR million 531.5 375.9 227.3
comparable, EUR million 520.7 386.6 221.2
Operating result, % of sales 21.4 18.0 12.0
comparable, % of sales 21.0 18.6 11.7
Result before taxes, EUR million 524.9 365.8 212.3
comparable, EUR million 514.6 376.6 206.3
Result for the period, EUR million 461.3 314.0 170.1
comparable, EUR million 451.4 326.6 165.3
Earnings per share, EUR 1.15 0.82 0.48
comparable, EUR 1.13 0.85 0.46
Return on equity, % 22.5 19.4 12.5
comparable, % 22.0 20.2 12.1
Return on capital employed, % 21.4 18.2 12.6
comparable, % 20.9 18.7 12.2
Equity ratio
1)
, % 66 63 60
Net gearing
1)
, % 4 -4 17
Interest-bearing net liabilities/comparable EBITDA 0.2 -0.2 0.7
Shareholders’ equity per share
1)
, EUR 5.86 4.78 3.89
Interest-bearing net liabilities
1)
, EUR million 94.5 -78.4 235.5
Total investment, EUR million 304.1 220.2 166.4
Net cash flow from operations, EUR million 232.0 329.6 3 0 7.7
Personnel
1)
2,248 2,389 2,370
1)
at the end of the period
73
100
80
60
40
20
0
100
80
60
40
20
0
20 21 22 20 21 22
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Report of the Board of Directors
Folding boxboard
White kraftliner
Market pulp
Others
EMEA
Americas
APAC
SALES SPLIT
BY PRODUCT
%
SALES SPLIT
BY REGION
%
■ Sales and result
Metsä Board’s sales were EUR 2,479.6 million (2,084.1). Sales increased
due to the higher average prices of paperboards and market pulp.
overall impact of pulp on Metsä Board’s result was markedly positive. The
general cost inflation also affected fixed costs. In 2022, inflation accounted
for approximately 20% of Metsä Board’s overall costs.
Unused emissions allowances were sold for a total of approximately EUR
29 million during the year (1–12/2021: EUR 21 million).
The associated company Metsä Fibre’s share of Metsä Board’s
comparable result in January–December was EUR 174.7 million (123.0).
Metsä Fibre’s profitability improved thanks to higher sales prices and the
US dollar strengthening against the euro, which also compensated for the
strongly increased production costs.
Financial income and expenses totalled EUR -6.6 million (-10.0), including
foreign exchange rate differences from accounts receivable, accounts
payable, financial items and the valuation of currency hedging instruments,
totalling EUR -5.0 million (-2.3). A total of EUR 8.2 million of interest
expenses for ongoing investments were capitalised in investment costs.
The result before taxes was EUR 524.9 million (365.8). The comparable
result before taxes was EUR 514.6 million (376.6). Income taxes amounted
to EUR 63.5 million (51.8).
Earnings per share were EUR 1.15 (0.82), and comparable earnings
per share were EUR 1.13 (0.85). The return on equity was 22.5% (19.4),
and the comparable return on equity was 22.0% (20.2). The return on
capital employed was 21.4% (18.2), and the comparable return on capital
employed was 20.9% (18.7).
■ Business development
Paperboard sales
Metsä Board’s paperboard deliveries in January–December totalled
1,817,000 tonnes (1–12/2021: 1,922,000).
In the comparison year 2021, paperboard delivery volumes were at a
record high and occasionally exceeded Metsä Board’s production capacity.
The demand for paperboards remained exceptionally high in the first half of
2022, but normalised in the second half of the year. The change in demand
for paperboards in the latter part of the year was driven by the decreasing
demand for consumer products and the inventory adjustments in the value
chain.
In the first half of the year, Metsä Board intentionally increased its very
low inventories, partly in preparation for the investment shutdown of
Husum folding boxboard in the autumn 2023.
The folding boxboard volumes previously directed to Russia were
successfully reallocated to new markets. In 2021, around 130,000 tonnes
of folding boxboard were delivered to Russia.
The sales of dispersion coated barrier board, produced in Kyro folding
boxboard mill, has been rapid. Metsä Board estimates that in 2023 roughly
half of the mill’s production volume will be dispersion coated barrier board.
The prices of paperboards continued to increase in the fourth quarter. In
2022, the average prices of Metsä Board’s paperboards in euros increased
by approximately 25% from the previous year. The strengthening of the US
dollar against the euro contributed to the increase.
The comparable operating result was EUR 520.7 million (386.6), and
the operating result was EUR 531.5 million (375.9). Items affecting com-
parability totalled EUR 10.8 million in the financial period. They comprised
EUR 19.2 million from the sale of the share capital in Hangö Stevedoring
Ab; a EUR 6.5 million capital gain from the sale of a land area unrelated to
business operations; EUR -5.5 million from the restructuring of customer
service and supply chain management; a EUR 2.8 million capital gain
related to the divestment of shares; a EUR -1.0 million impairment recog-
nised for Russian operations; a EUR -10.5 million impairment recognised
for the Russian operations of the associated company Metsä Fibre; a EUR
-1.2 million impairment recognised in the assets of Metsä Fibre’s Kyrö
sawmill, and EUR 0.3 million for other items.
The comparable operating result improved especially due to the higher
average prices of paperboard. Higher market pulp prices and the sales
of by-products from pulp production also improved the operating result.
On the other hand, the lower paperboard delivery volumes weakened the
operating result.
Exchange rate fluctuations, including hedges, had a positive impact of
EUR 57 million on the operating result compared to the comparison period.
Costs increased rapidly especially in chemicals, energy and logistics. In
chemicals, price increases were particularly notable for caustic soda, per-
oxides, starch and latexes. Energy costs were driven especially by higher
electricity prices. Logistics costs increased due to the limited availability of
transport capacity and higher fuel prices. Wood costs increased because
of the rise in wood prices and harvesting and transport costs. In the paper-
board business, profitability was weakened by higher pulp prices, but the
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Market pulp sales
Metsä Board’s market pulp deliveries totalled 503,000 tonnes (496,000)
in January–December. the EMEA region accounting for 72% (66), and the
APAC region for 28% (34).
The associated company Metsä Fibre’s overall paperboard deliveries
totalled 2,880,000 (3,058,000) tonnes, of which 54% was delivered to
the EMEA region, 43% to the APAC region, and 3% to the Americas. Metsä
Board holds 24.9% of Metsä Fibre.
Paperboard, pulp and BCTMP production
The production volume of paperboard totalled 1,877,000 tonnes
(1,906,000), while the combined production volume of pulp and BCTMP
amounted to 1,409,000 tonnes (1,362,000). Paperboard production was
restricted in the latter part of the year to meet demand. The combined
production volume of pulp and BCTMP was at a record high in 2022.
In 2021, a fire broke out on the chip conveyor of the Husum pulp mill,
closing Husum’s pulp production for around 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.
Corporate transactions
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. The company was merged with the parent company in the third
quarter. The arrangement will not have a significant impact on Metsä
Board’s key financial figures.
The share capital of Metsä Board’s subsidiary Oy Hangö Stevedoring
Ab was sold to Euroports Finland Oy on 31 March 2022. The company rec-
ognised a capital gain of EUR 19.2 million in its January–March operating
result as an item affecting comparability.
Impacts of Russia’s war in Ukraine
Russia’s attack on Ukraine in early 2022 has had an impact on Metsä
Board’s business operations. In 2021, Russia accounted for 5.6%, and
Ukraine for 0.7%, of Metsä Board’s sales. Folding boxboard deliveries to
Russia were approximately 130,000 tonnes in 2021, mainly to multinational
brand owners. In March 2022, Metsä Board discontinued its sales to
Russia, and reallocated the delivery volumes to its main markets Europe
and North America.
Metsä Group, responsible for Metsä Board’s wood procurement,
discontinued its wood procurement from Russia in March and focused it on
Finland and Sweden. In 2021, Russian wood accounted for approximately
9% of Metsä Board’s wood supply. Imports from Russia have been mainly
birch wood, for which the market situation has tightened throughout Metsä
Group’s operating area.
In May, Russia halted natural gas supplies to Finland. Prior to this, Metsä
Board’s Joutseno BCTMP mill and the Tako and Kyro paperboard mills
used natural gas imported from Russia in their production. Despite the
halt to deliveries from Russia, the mills have been supplied with natural gas
without disruption. Natural gas has also been replaced by oil, and during
the first quarter in 2023, the company will have the readiness to use LNG
in its Kyro and Joutseno mills. Constraints in the availability of alternative
energy sources could affect the continuity of Metsä Board’s production. In
the long term, by the end of 2030 at the latest, Metsä Board’s target is that
all the energy it uses will be fossil free.
Impacts of COVID-19
The pandemic shifted consumption from services to goods and increased
the consumption of products used at home. Metsä Board’s paperboard
product portfolio responded well to the changes in demand resulting from
the pandemic, and strong cash flow supported the financial flexibility.
Metsä Board’s production and deliveries ran smoothly during the
pandemic.
Most of the strict precautionary measures adopted at Metsä Board’s
production and office units during the pandemic were mainly completely
lifted during the second half of the year. The company continues its efforts
to ensure the health of employees, prevent the spread of the virus and
secure business continuity. The situation is monitored continuously, and
local precautionary measures can be quickly initiated if required. From
2023 onwards, the development of the COVID-19 and its effects will only
be reported if they have a material impact on Metsä Board’s business or
financial situation
■ Cash flow
Net cash flow from operations in January–December 2022 was EUR 232.0
million (1–12/2021: 329.6). Working capital increased by EUR 151.4 million
(decreased of 49.5). The increase in working capital derived from the
increase in paperboard inventories, a rise in inventory value due to cost
inflation, and the increase in trade receivables resulting from the higher
prices of finished products.
■ Balance sheet and financing
Metsä Board’s equity ratio at the end of the financial period was 66% (31
December 2021: 63) and the net gearing ratio was 4% (-4). The ratio of
interest-bearing net liabilities to comparable EBITDA in the previous 12
months was 0.2 (-0.2).
At the end of the financial period, interest-bearing liabili-ties totalled
EUR 453.0 million (31 December 2021: 448.6). Non-euro-denominated
loans accounted for 2.0% of loans and floating-rate loans for 13.9%, the
rest being fixed-rate loans. The average interest rate on liabilities was 2.2%
(2.3), and the average maturity of non-current liabilities was 4.0 years (4.7).
The interest rate maturity of loans was 36.1 months (45.3).
At the end of the financial period, interest-bearing net debt totalled EUR
94.5 million (31 December 2021: -78.4).
Metsä Board’s liquidity has remained strong. At the end of the financial
period, the available liquidity was EUR 556.0 million (31 December 2021:
916.0), consisting of the following items: liquid assets and investments of
EUR 356.2 million and a syndicated credit facility (revolving credit facility)
of EUR 200.0 million. Of the liquid assets, EUR 338.6 million consisted of
short-term de-posits with Metsä Group Treasury, and EUR 17.6 mil-lion were
cash funds and investments. Other interest-bearing receivables amounted
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to EUR 2.4 million. In addition to items reported as liquidity, the liquidity
re-serve is complemented by Metsä Group’s internal un-drawn short-term
credit facility of EUR 150.0 million and undrawn pension premium (TyEL)
funds of EUR 227.6 million.
The fair value of other non-current investments was EUR 345.4 million
at the end of the financial period (31 December 2021: 181.0). The change
in value was related to the increase in the fair value of Pohjolan Voima
Oyj’s shares, which was caused by updating the long-term electricity price
forecast used in the share valuation model.
At the end of the financial period, an average of 8.5 months of the net for-
eign currency exposure was hedged, including the hedging of the balance
sheet position of trade receivables and trade payables.
Metsä Board has investment grade credit ratings by S&P Global and
Moody’s Investor Service. In December 2022 Moody’s upgraded Metsä
Board’s rating to Baa2 (was Baa3), with stable outlook (was positive). The
company’s rating by S&P Global is BBB-, with a stable outlook.
■ Investments
Investments during the financial period totalled EUR 304.1 million
(1–12/2021: 220.2), with growth and development investments accounting
for 74%, acquired business operations for 10%, and maintenance invest-
ments for 16%. Out of total investments, the company’s own property,
plant and equipment amounted to EUR 278.1 million (216.1), and leased
property, plant and equipment to EUR 26.1 (4.1). In the latter, the most
significant item was the machinery and equipment for the boiler plant from
the acquisition of Hämeenkyrön Voima Oy, totalling EUR 18.0 million.
Renewal of the Husum pulp mill
Metsä Board initiated the first phase of the renewal of the Husum pulp mill
in 2019. The first phase included a new recovery boiler and turbine. By the
end of the financial period, the investments made in the project totalled
EUR 370 million. The total investment value of the first phase is estimated
to be EUR 380 million.
The new recovery boiler and turbine will increase the pulp mill’s
electricity production, which will improve the energy self-sufficiency of the
integrated mill and bring Metsä Board closer to its goal of completely fos-
sil-free production by 2030. The new recovery boiler and turbine will also
reduce the energy and maintenance costs of the integrated mill, improve
production efficiency and shorten the duration of annual maintenance
works. The investment is expected to improve Metsä Board’s annual cash
flow by approximately EUR 35 million, of which at least half is expected to
be realised in 2023.
The plan is to replace the current fibre lines with a new fibre line during
the second phase of the investment, later in the 2020s.
Development programme of the Kemi paperboard mill
In 2021, Metsä Board initiated the development programme for the Kemi
paperboard mill, which will increase the mill’s annual white-top kraftliner
capacity by around 40,000 tonnes. The company estimates that invest-
ment value of the programme, originally EUR 67 million, will be higher due
to, among other things, rapid cost inflation. The investments will take place
in 2021–2023.
The programme includes a series of modernisation and bottleneck
investments in the paperboard production line. 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 reduce the mill’s water
use by 40% and energy use by 5% per tonne of paperboard produced.
Increasing the production capacity
of folding boxboard in Husum
Metsä Board will increase its annual production capacity of folding
boxboard by 200,000 tonnes at the Husum integrated mill in Sweden.
Following the investment, the production capacity of folding boxboard of
the BM1 will be 600,000 tonnes per year. The value of the investment is
approximately EUR 210 million. It will take place in 2021–2024, mainly in
2022 and 2023.
The investment is expected to increase Metsä Board’s annual sales by
approximately EUR 200 million and improve annual comparable EBITDA by
approximately EUR 50 million. The company expects to achieve the growth
and improved result in full in 2026.
Due to the growing logistics volumes of the Husum integrated mill, the
port concept will also be renewed. The value of the investments still partly
being planned is EUR 20–30 million. The investments mainly target new
warehouse capacity, expected to be completed in 2023.
Pre-engineering for new folding
boxboard mill in Kaskinen
In autumn 2022, Metsä Board launched pre-engineering for a new folding
boxboard mill with an annual capacity of approximately 800,000 tonnes
in Kaskinen. The pre-engineering includes technical design, infrastructure
and logistics solutions, and tendering for the main equipment. In addition,
an environmental impact assessment (EIA) and an envi-ronmental permit
process are ongoing. A potential investment decision could be made in
2024 at the earliest.
Metsä Fibre’s Kemi bioproduct mill
Metsä Board’s associated company Metsä Fibre is building a new bioprod-
uct mill in Kemi. The mill is expected to be completed in 2023. The new
bioproduct mill will produce annually some 1.5 million tonnes of softwood
and hardwood pulp as well as other bioproducts.
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 610,000 tonnes.
The bioproduct mill will not use any fossil fuels, and its electricity
self-sufficiency will be 250%.
The estimated investment value of Metsä Fibre’s bioproduct mill is EUR
2.02 billion (Interim report for January–September 2022: EUR 1.85 billion).
The financing of bioproduct mill is composed of internal financing and debt.
Metsä Board will not invest equity in Metsä Fibre to finance the project.
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■ R&D and innovation
In Metsä Board’s R&D, ensuring and developing the recyclability and
compostability of paperboards is of key importance. In the fibre-based
packaging material circular economy, the company’s task is to provide
the market with premium fresh fibre paperboards as resource-efficiently
as possible, contribute to the replacement of fossil-based materials and
reduce the carbon footprint of packaging.
The company continues to focus on reducing the weight of paperboard
and developing recyclable protective coatings for use in food packaging.
The weight reduction of paperboards plays a key role in the pre-engineering
of the Kaskinen folding boxboard mill, which aims for world-class resource
efficiency and a product that enables a reduced carbon footprint. The mill is
designed to run fully fossil free production with notably lower wood, energy
and water consumption per tonne of folding boxboard produced compared
to currently operating production units.
In the biobarrier programme launched in 2021, the company continued
to study new alternative products for reducing plastic. Several potential
products are being tested in the laboratory, and some have proceeded to
production testing.
In 2022, Metsä Board’s 360 Services system was used actively to
strengthen customer relationships. The Excellence Centre in Äänekoski
hosted 45 packaging development workshops.
The production of Metsä Group’s 3D fibre product began in May 2022
at Metsä Group and Valmet’s demo plant in Äänekoski. The products are
pressed into their final form using brand new technology. The renewable
and recyclable product is a good alternative to plastic in food packaging, for
example.
In 2022, Metsä Board’s research and development expenses totalled
EUR 6.1 million (6.0), or 0.2% (0.3) of sales. The costs include direct
expenses, excluding depreciations and operational investments.
■ Disclosure of non-financial information
Business model
Metsä Board is part of Metsä Group, and benefits from Metsä Group’s
unique value chain, from pure northern fibre to end products. The company
produces premium recyclable fresh fibre paperboards, used mainly in
consumer product packaging. 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, mainly from Finland and Sweden. The wood is sourced only
from forests, in which the regeneration of the forests and biodiversity is
safeguarded. This is explained in more detail in the section Environment -
Forests and raw materials. 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 owns 24.9% of its associate company Metsä Fibre. Metsä
Board’s own pulp production and holding in Metsä Fibre together secure
the company’s self-sufficiency in pulp and ensure end products of consist-
ently high quality.
Metsä Board’s decision-making is guided by financial and sustainability
targets and long-term, responsible growth of shareholder value. Climate
change mitigation and efficient use of resources are an integral part of the
company’s strategy and operational business. Metsä Board’s goal is to
have fossil free production and products by the end of 2030. Lightweight,
recyclable and/or compostable products that are produced resource-effi-
ciently have a low carbon footprint, support the circular economy and offer
alternatives to plastics. For example, a Metsä Board cherry tomato box
made from paperboard has a carbon footprint up to 80% lower than a box
made from recycled plastic, according to an independent study (Source:
Natural Resources Institute Finland). Meeting ambitious targets will require
investments, operational development and introduction of new solutions.
For more information on sustainability targets, see the section on Material
aspects related to non-financial information.
Sustainability governance
Work at Metsä Board is guided by Metsä Group’s Code of Conduct, comple-
mented by policies concerning personnel, equality, environmental matters,
competition law and information security, among other things. All Metsä
Board mills apply quality, occupational health and safety, environmental
and energy efficiency management systems as well as the management
and monitoring system required by food safety.
At Metsä Board, the realisation of sustainability is supported and
monitored by the company’s Board of Directors, CEO and Corporate Man-
agement Team. Sustainability is incorporated into the company’s strategy,
long-term business and investment plans, risk assessments and annual
action plans approved by the company’s Board of Directors. The Board
discusses and approves sustainability topics presented by the CEO, such
as sustainability targets and related investment plans, and monitors their
implementation. Sustainability topics are regularly discussed by Metsä
Board’s Corporate Management Team and Board of Directors several times
a year. The CEO is responsible for implementing sustainability measures
in accordance with the instructions given by the Board of Directors. The
SVP, Development, is responsible for research and development, business
development and sustainability, and participates in Metsä Group’s Sus-
tainability Process Management Team and reports on the realized results
of the sustainability measures to the Sustainability Process Management
Team quarterly. Each Metsä Board employee’s performance bonus target
includes a measurable sustainability target, which is defined on a person-
or unit-specific basis based on the job function. In 2022, the management’s
sustainability targets included occupational safety, reduction of energy
and water use, sustainability cooperation with customers and development
of sustainable products. For a more detailed description of sustainability
management and the link between sustainability and remuneration, see
Metsä Board’s Sustainability Report 2022 pages 20–21.
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Reporting principles and data quality
The reporting of non-financial information covers the entire Metsä Board
Corporation, including all companies in which Metsä Board directly or
indirectly holds more than 50% of the votes. Metsä Board owns 24.9
per cent of its associated company, Metsä Fibre, and financial reporting
includes a share of Metsä Fibre’s result corresponding to this holding. In
non-financial reporting, this ownership share of Metsä Fibre’s sustainability
information is not included in Metsä Board’s sustainability information,
with the exception of Metsä Fibre’s Scope 1 and Scope 2 emissions, which
are taken into account in Metsä Board’s value chain emissions (Scope 3).
Environmental data are compiled from the operations of the production
units. Personnel data are compiled for all Metsä Board employees.
In addition to Metsä Board’s own operations, the reporting covers
indirect greenhouse gas emissions from the purchased energy (Scope
2) and from the rest of the value chain (Scope 3), including upstream
and downstream emissions in the GHG Protocol’s emission categories
identified as significant in the calculation. More information can be found
in the Environment - Climate and energy section. Metsä Board also reports
indicators on the sustainability performance of its suppliers. A more
detailed description of the reporting principles can be found in Metsä
Board’s Sustainability Report 2022 on pages 66–67.
All data included in the tables pertaining non-financial information
and the EU taxonomy have been assured (limited assurance) by an
independent third party PricewaterhouseCoopers Oy. The assurance was
performed in accordance with the international assurance standards ISAE
3000 (Revised) and ISAE 3410. The assurance report is published in Metsä
Board’s Sustainability Report 2022 on page 68.
Material aspects related to non-financial information
Promoting sustainability includes complying with good corporate govern-
ance, carrying social and environmental responsibility, respecting business
ethics and human rights, and continuous improvement in all these areas. In
addition to its own operations, Metsä Board requires sustainability from its
supply chain. Metsä Board’s sustainability targets cover the environment,
social responsibility and governance. These and other key performance
indicators are summarized in the table Non-financial key figures. The
targets are based on Metsä Board’s business strategy, Metsä Group’s
strategic sustainability targets and a materiality analysis completed in
2018. The materiality analysis considered the impacts of the Metsä Board
and the entire Metsä Group’s operations on society and the environment,
and stakeholder perspectives. According to the materiality analysis, the
material sustainability topics were: safety at work, local and social impact,
sustainable forest management, resource efficiency, renewable energy,
emissions to air and water, water use, circular economy and new bioprod-
ucts, responsible supply chain and product safety.
The materiality analysis and material topics were updated in 2022. The
identification of material sustainability topics was based on sustainability
frameworks and standards, regulatory requirements, trends, and
interviews with internal and external stakeholders. The identified topics
were prioritized in a management’s workshop, where the significance
of their positive and negative impacts on Metsä Board and the entire
Metsä Group’s business, the surrounding society, people and nature (the
so-called ”double materiality”) was assessed. Metsäliitto Cooperative’s
Board of Directors confirmed the material topics and the sustainability
2030 targets in the beginning of the year 2023. Metsä Board will report in
accordance with the updated material topics and clarified sustainability
targets starting from the reporting of 2023 data.
Risks related to non-financial information
The risks related to environmental, personnel and social issues, respect
for human rights as well as the anti-corruption and anti-bribery activities
are described in more detail in the Board of Directors’ Report in the section
Most significant risks and uncertainties. The key risks are related to climate
change and biodiversity loss, which at Metsä Board in particular affect
the use of forests, energy and water. For these, the company has sus-
tainability targets by the end of 2030, and their achievement is regularly
monitored. The achievements are reported in the table Non-financial key
figures. Metsä Board reports on climate-related risks and opportunities
in accordance with the recommendations of TCFD (Task Force on
Climate-related Financial Disclosures). 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. A table
of the TCFD-compliant reporting is published on pages 64–65 of Metsä
Board’s Sustainability Report 2022 and the TCFD-compliant risks and
opportunities related to climate change and biodiversity loss are described
on pages 36–37.
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Non-financial key figures
2022 2021 Target 2030
Environment
Share of certified wood fibre, % 83 83 >90
Traceability of raw materials, % of total purchases 97 98 100
Share of fossil free raw materials and packaging materials, % of dry tonnes 99.3 99.2 100
Direct fossil-based CO
2
emissions (Scope 1), t 236,037 255,467 0
Indirect fossil-based CO
2
emissions (Scope 2, market-based), t
1)
147,061 184,028 0
Indirect fossil-based CO
2
emissions (Scope 2, location-based), t
2)
291,482 313,030
Indirect fossil-based CO
2
e emissions (Scope 3), t
3)
1,816,979 1,854,840
Share of target group suppliers who have set SBTi targets (Scope 3), %
3)
15 16
Share of fossil free energy (Scope 1 + 2, market-based), % 87 85 100
Improvement in energy efficiency from 2018 level, %
4)
+2.7 +4.3 10
Reduction in the use of process water per produced tonne compared to 2018 level, %
5)
-12.2 -12.6 -30
Utilisation of production side streams, % 99.9 99.8 100
Social responsibility and personnel
Total Recordable Injury Frequency (TRIF) per million hours worked
6)
6.7 9.8 0
Lost-time accident frequency (LTA1F) per million hours worked
6)
5.4 7.0 0
Share of women in executive management (Vice President or higher) by 2025, %
7)
25.0 19.2 25
Diversity, equality and inclusion e-learning completion rate, %
8)
98 97 100
Women’s total earnings compared to men’s total earnings for white-collars/blue-collars
9)
0.95/0.94 0.92/0.93 1.0
Anti-corruption, anti-bribery and corporate culture
Code of Conduct e-learning completion rate, % 100 99 100
Ethics index of the ethics barometer, %
10)
85 - 100
Suppliers’ commitment to the Supplier Code of Conduct, % of total purchases 99 98 100
Supplier background check passed, % of total purchases 96 92 100
Supplier sustainability assessment passed, % of total purchases 63 54 100
1) The 2021 figure for market-based Scope 2 emissions has been revised from the previously reported 173,371 tonnes to 184,028 tonnes.
2) The amount of location-based Scope 2 emissions is affected by the average energy distribution of Metsä Board’s production countries. The figure for 2021 has been corrected from 306,555
tonnes to 313,030 tonnes.
3) 70% of the non-fibre suppliers and logistics operators related to customer deliveries, measured as a share of our total purchases, would set themselves targets in accordance with the SBTi by
2024.
4) The 2021 figure for energy efficiency improvement has been revised from +1.9% to +4.3%, as previously reported.
5) The 2021 figure for the reduction of process water use has been revised from -13.5% to -12.6%, as previously reported.
6) The former subsidiary Hangö Stevedoring is included in the figures until the end of February 2022.
7) The 2021 figure for the share of women in executive management has been revised from 16.1% to 19.2%.
8) The former subsidiary Hangö Stevedoring is included in the 2021 figure.
9) Weighted average of women’s total salary compared to men’s total salary in the same job grade. Includes 98% of white-collar personnel.
10) The previous ethics barometer was conducted in 2020 (ethics index: 85%). In 2021, we implemented the selected development actions based on the results of the previous ethics barometer.
Environment
Metsä Board’s operations related to environment follow the following
policies, principles and management systems:
• Metsä Group’s Code of Conduct
• Metsä Group’s Supplier Code of Conduct
• Metsä Group’s Environmental Policy
• Metsä Group’s principles of environmental management
• Metsä Group’s principles for forest use and management
• ISO 9001
• ISO 14001
• ISO 50001
• PEFC (License code: PEFC/02-31-92)
• FSC® (License code: FSC®-C001580)
• UN Global Compact
Forests and raw materials
Metsä Board’s wood supply is carried out 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. These practices are
assessed annually through Metsä Group’s internal audits and third-party
audits. These audits monitor environmental and social responsibility
issues in the operations of wood suppliers and harvesters, as well as the
traceability of wood fibre in our own processes.
Metsä Board aims for certified wood to account for at least 90% of all
the wood fibre used by the company by 2030. In 2022, 83% (83) of the
wood fibre came from PEFC- or FSC-certified forests and 17% (17) met
the requirements for PEFC or FSC controlled wood. Metsä Group’s wood
supply and forest services have targets for the end of 2030 to increase
the amount of carbon sequestered in forests and wood products and to
safeguard forest biodiversity. Metsä Group regularly monitors indicators
such as the increase of forest management services that promote carbon
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sequestration and the prevalence of high biodiversity stumps and retention
trees that improve forest biodiversity. For more information on these, see
Metsä Board’s Sustainability Report 2022 pages 26–29.
Regarding other raw materials, the systematic collection of origin
data continues to be developed. In 2022, the origin, at least the country
of manufacture, was known for 97% (98) of the total purchases of raw
materials and packaging materials, including fully traceable wood. The
proportion of fossil free raw materials, including the packaging materials of
the company’s own products, was 99.3% (99.2).
Climate and energy
Metsä Board’s targets for reducing greenhouse gas emissions are
approved by the Science Based Targets initiative (SBTi) and are in line
with the Business Ambition for 1.5°C commitment. 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, market-based) is zero.
In 2022, 87% (85) of the energy used by Metsä Board was fossil free.
The company has reduced its fossil-based CO
2
emissions (Scope 1 and 2)
per tonne produced by 33% in 2018–2022. To achieve the fossil free target,
the company has drawn up an investment and action plan applicable to
all its mills. In 2022, the new recovery boiler and the turbine at the Husum
pulp mill started up, increasing bioenergy production and improving the
electricity self-sufficiency of the entire integrate. Other key measures
during the year included the reduction of peat use at the Simpele mill and
the investment decision to replace the turbine and generator at the Kyro
mill’s biopower plant in 2022–2024.
Despite the end of natural gas supplies from Russia, Metsä Board’s Jout-
seno, Kyro and Tako mills have been operating without disruptions. Natural
gas has been partially replaced by oil and the Kyro and Joutseno mills are
ready to switch to LNG in the first half of 2023. The use of substitute energy
sources will not slow down Metsä Board’s target of a phased transition to
completely fossil-free energy (Scope 1 and 2) by the end of 2030.
The fossil-free production target is supported by energy efficiency
improvements, where the company aims to achieve at least a 10%
improvement in 2018–2030. In 2022, energy efficiency improved by 2.7%
(4.3) compared to 2018. The change compared to corresponding year was
due to the adjustment of production to meet demand at the end of 2022.
Key measures to improve energy efficiency in 2022 included an investment
in a lamella separator for the chemical purification of water used as process
water at the Kyro mill, as well as the introduction of a heat exchanger and
utilization of waste heat in the debarking plant of the Simpele mill. Both
measures reduce raw water intake and the need for water heating, thus
reducing water and energy use.
For the value chain (Scope 3), Metsä Board’s Science Based Target is
that 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, set themselves targets in accordance with SBTi by 2024. The recom-
mendation to set SBTi targets is included in Metsä Group’s Supplier Code
of Conduct and is discussed in supplier meetings. By the end of 2022, 15%
(16) of the suppliers in Metsä Board’s SBT target group had set a target.
In 2023–2024, Metsä Board will update its value chain related emission
reduction targets and also set a land use related emission reduction target,
the so-called FLAG target.
Value chain emissions (Scope 3) account for 83% of Metsä Board’s
fossil greenhouse gas emissions. Scope 3 emissions are calculated for
all GHG Protocol’s emission categories identified as significant, including
purchased goods and services, capital goods, fuel- and energy-related
activities (not included in Scope 1 or Scope 2), transportation to Metsä
Board’s sites, waste generated in operations, transportation to customers,
processing of sold products, end-of-life treatment of sold products, and
investments. More detailed description of the greenhouse gas emissions
from Metsä Board’s own operations (Scope 1), purchased energy (Scope 2)
and the value chain (Scope 3) can be found in Metsä Board’s Sustainability
Report 2022 on page 33.
Water use, discharges and side streams
Metsä Board does not source any water from areas of high water stress
(WRI Aqueduct Water Risk Atlas). Metsä Board’s water use in 2022 was
110 million cubic metres (115), of which 60.2 million cubic metres (59.6)
was process water. Surface water accounted for almost 100% of water
use. Small amounts of groundwater (0.06% of water use) were used,
mainly for hygiene and laboratory purposes. Of all the water used by the
company, roughly 96% is returned to the waterbodies after use. The
target is to reduce the use of process water by 30% per tonne produced in
2018–2030. In 2022, the reduction was 12.2% (12.6) compared to 2018.
To reduce its water use, Metsä Board has defined mill-specific measures to
increase the efficiency of water recycling and to reduce raw water intake.
The Husum integrated mill accounts for roughly 40% of the company’s
water use. Therefore, the renewal of the Husum pulp mill will significantly
reduce Metsä Board’s water use by 2030. Measures related to the reduc-
tion of water use in 2022 are explained in the section Environment - Climate
and energy.
Metsä Board uses the best available technology in its production and
continuously monitors that all its mills operate in compliance with the
environmental permits issued to them. In 2022, some exceedings of permit
limit values for wastewater discharges were recorded at the production
sites. These were reported to the authorities as required and corrective
actions were taken at the mills.
99.9% (99.8%) of the production side streams were utilised as materials
or energy. The side streams consist of process waste generated in produc-
tion and by-products such as ash for fertiliser use.
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 2022 totalled EUR 2.0 million (2.7) and its environmental expenses
totalled EUR 11.7 million (13.3). The environmental expenses consist mainly
of using and maintaining environmental protection equipment, waste
management and environmental insurance expenses, and the depreciation
of capitalised environmental expenses.
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Social responsibility
Metsä Board’s operations related to social and personnel matters follow
the following policies, principles and management systems:
• Metsä Group’s Code of Conduct
• Metsä Group’s Supplier Code of Conduct
• Equality Policy
• HR Policy
• Occupational Safety and Well-being instructions
• ISO 45001
• Metsä Group Modern Slavery Act Transparency Statement
• UN Global Compact
Human rights
Metsä Board respects internationally recognised human rights in all its
operations, in accordance with the UN Universal Declaration of Human
Rights and the International Labour Organisation’s (ILO) Fundamental
Principles and Rights at Work. The company complies with legal reporting
obligations, such as the UK Modern Slavery Act, and does not tolerate child
or forced labour. The company is committed to operating in accordance
with the UN Guiding Principles on Business and Human Rights and expects
its business partners to do the same. Metsä Board supports the UN
Global Compact initiative and its principles on human rights, labour, the
environment and anti-corruption.
Metsä Board does not tolerate human rights abuses in any form and is
committed to ensuring that its operations do not have negative human
rights impacts. Human rights issues are addressed, among others, which
all employees are required to complete on a regular basis. Such trainings
include the Code of Conduct, sustainability, as well as diversity, equality
and inclusion.
In the company’s own operations, investments in occupational safety
as well as the development of diversity, equality and inclusion were key
measures affecting the realisation of human rights in 2022.
The Supplier Code of Conduct sets out requirements for suppliers to
fulfil their human rights responsibilities. The company mapped potential
human rights risks related to its supply chain or customers as part of Know
Your Business Partner background checks. In 2022, the company was not
aware of any human rights violations related to its operations or supply
chain.
Metsä Board is committed to developing an equal culture where personal
characteristics such as gender, age, ethnic background, sexual orientation
or disability do not affect a person’s ability to succeed in the workplace.
Metsä Board promotes diversity, equality and inclusion of its employees
through the Metsä for All vision, launched in 2021, and through the equality
targets. The targets support, among other things, gender equality in the
work community and diversity in recruitment. Key performance indicators
are reported in the table Non-financial key figures.
Personnel and safety at work
At the end of 2022, the number of full-time equivalent (FTE) employees
was 2,248 (31 December 2021: 2,389), of whom 1,226 (1,416) were
employed in Finland. In January–December, Metsä Board employed an
average of 2,352 people (1–12/2021: 2,461). The changes in the number
of employees were mainly due to the sale of Oy Hangö Stevedoring Ab
to Euroports Oy in the first quarter of 2022. Personnel expenses for
January–December totalled EUR 217.4 million (216.0). Metsä Board aims
to ensure the availability and retention of skilled personnel by investing
in employer image, development programmes and succession planning.
Future retirements are prepared for via retirement forecasts and resource
plans based on those. The company also organises apprenticeships train-
ing in Finland, aiming to recruit future personnel, and the mill units invest in
on-the-job learning and the sharing of know-how. The risks related to staff
availability and retention are anticipated through early support discussions
and solutions between supervisors and employees, anticipating possible
working capacity risks, and targeting guidance and support to 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 result of the
ethics barometer, an ethics index of 85% (2020: 85), shows that there is
a high level of awareness of ethical requirements, personnel feel the issue
is important and that the company is acting ethically and correctly. There
is room for improvement in the equal treatment of personnel and in the
culture of having the courage to report and address unethical behaviour.
Metsä Board’s aims for an accident-free working environment. In
developing occupational safety, the focus is on personal risk assessment,
improving safety at work and introducing common safety-at-work
standards. The measures contributed to a positive development of work
safety at Metsä Board’s mills in 2022, but the accident frequency rate is
still high compared to the zero target. In 2022, the Total Recordable Injury
Frequency (TRIF) was 6.7 (9.8) while the Lost-time accident frequency
(LTA1F) was 5.4 (7.0). The most common causes of accidents were injuries
to hands. Accidents are prevented through common safety-at-work stand-
ards, proactive measures – such as risk assessment, safety observations,
safety walkthroughs and safety training – and investments improving
safety. All Metsä Board mills and the company’s head office apply the 5S
method, which aims to increase productivity, safety and wellbeing at work.
Due to the corona pandemic, remote working was extended until
summer 2022 for those jobs where possible. From August 2022, a hybrid
model was introduced, whereby remote working can take place part of the
week, depending on the nature of the work.
Anti-corruption, anti-bribery and corporate culture
Metsä Board’s operations related to anti-corruption, anti-bribery and
corporate culture follow the following policies, principles and management
systems:
• Metsä Group’s Code of Conduct
• Metsä Group’s Supplier Code of Conduct
• UN Global Compact
Metsä Board expects it personnel to comply with applicable legislation,
act with integrity and make ethically sustainable decisions. The Code of
Conduct and the related training programme aim to strengthen the culture
of doing the right thing, to help personnel identify ethically challenging sit-
uations and to encourage them reporting any shortcomings they observe.
The company’s personnel are required to attend training on the Code of
Conduct every three years. By the end of 2022, 70% of the company’s
personnel had completed the online training on the Code of Conduct
published in November 2022. The previous version of the corresponding
online training was completed by 100% (99) of the personnel. The Code of
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Conduct also includes a commitment to anti-corruption and anti-bribery.
In the ethics barometer conducted in 2022 surveying the implementation
of the Code of Conduct in practice, the risk of financial misconduct did not
emerge.
Compliance and Ethics channel
Metsä Group has a joint Compliance and Ethics Channel through which
personnel and stakeholder representatives can anonymously report any
shortcomings they detect. The reporting of such shortcomings is encour-
aged, for example, in the Code of Conduct online training. All breaches and
violations, as well as suspected breaches and violations, brought to the
attention of the company are investigated. The Compliance Committee is
responsible for guiding and implementing the investigation. In 2022, Metsä
Board received a total of 6 (10) cases that led to an investigation. The cases
are categorised as fraud or other criminal activity, corruption and bribery,
competition law, conflicts of interest, human resources issues, discrimi-
nation, privacy and data security, work safety, environment, violations of
the Supplier Code of Conduct and other cases. None of the cases resulted
in legal proceedings, administrative investigations or fines, nor did they
concern corruption, bribery, human rights violations, child or forced labour.
Supply chain
Sustainability of wood procurement is ensured through a process
described in the section Environment. The sourcing of other raw materials
and services is centralised in Metsä Group, where a Group-wide purchasing
process ensures that partners in the Group’s supply chain act responsibly.
This aims to minimise risks in the supply chain, such as those related
to the environment, health, corruption, child labour and human rights
violations. Metsä Board’s minimum requirement in supply agreements
is that suppliers commit to Metsä Group’s Supplier Code of Conduct or
equivalent supplier-specific principles. In addition, the supply agreements
may contain other sustainability requirements. A risk analysis is carried
out as a part of the supplier selection process. It considers the suppliers’
country and category risks as well as their compliance with the law. Metsä
Board conducts third-party due diligence in the Know Your Business
Partner background check, which investigates a supplier’s background for
trade sanctions, money laundering, corruption, human rights violations
and other key risks. Metsä Board also has a similar process in place for
customers. In addition, the key suppliers and potentially risky suppliers
are subject to a sustainability assessment questionnaire. The results of
these can be found in the table Non-financial key figures. Metsä Group
and external parties audit some of Metsä Board’s suppliers each year.
Based on the assessments and audit results, suppliers are informed of
deviations and recommendations, and suppliers who are expected to
improve their sustainability management are followed up. In 2022, Metsä
Group conducted 2 (0) audits and external party 14 (17) at the premises of
Metsä Board’s suppliers. In 2022, Metsä Board continued to improve the
traceability of raw materials, such as process, base and coating chemicals,
and packaging materials. The aim is to make information on the country
of raw material production a more integral part of risk analyses to better
target supplier background checks and audits to suppliers in high-risk
countries. The identification of risk countries is based on the CPI (corrup-
tion perception index), which measures the level of corruption in the public
sector in different countries.
The 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, which lists
economic activities that qualify as sustainable in terms of the climate and
the environment. The goal of the Taxonomy is to channel money to sus-
tainable investments so that the EU can achieve the ambitious emissions
reduction targets it has set for itself.
According to the European Commission, the Taxonomy is under contin-
uous development. The Commission has prioritised the establishment of
criteria for economic activities that offer the greatest potential contribution
to the climate and the environment. Metsä Board’s main business
operations, the paperboard and market pulp businesses, are not currently
covered by the Taxonomy. The company’s Taxonomy-eligible and Taxono-
my-aligned economic activities, especially in sales and operating expenses,
account for only a minor share. 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.
Metsä Board’s key objectives include the mitigation of global warming
and adapting business operations to a low-carbon future. The company
aims for entirely fossil free production and products by the end of 2030.
In accordance with the principles of the circular economy, Metsä Board
focuses in sustainable forest use and resource-efficient processes. In addi-
tion, it focuses on minimising waste and emissions and keeping materials
in circulation for a long time. Metsä Board’s products offer an alternative to
products made from fossil-based raw materials.
Taxonomy reporting
The Taxonomy defines six sustainable environmental objectives against
which different 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 con-
trol; and (f) the protection and restoration of biodiversity and ecosystems.
For the 2022 financial period, Metsä Board will disclose information on its
Taxonomy-eligible and Taxonomy-aligned business operations in terms
of the climate objectives, that is, climate change mitigation and climate
change adaptation. Business disclosures include the share of sales, capital
expenditure and operating expenses.
The Taxonomy-aligned disclosures indicate how the economic activity in
question supports the confirmed environmental objectives. An economic
activity is considered Taxonomy-aligned if it contributes substantially to
one of the defined environmental objectives and causes no significant
harm to the other objectives. In addition, operations must meet minimum
social safeguards.
Metsä Board’s reporting principles
In its Taxonomy-eligible sales, Metsä Board includes the product and
service sales included in Metsä Board’s reported sales. The company’s
Taxonomy-aligned sales include the sale of electricity produced with bio-
energy at the Husum pulp mill under category 4.20 Cogeneration of heat/
cool and power from bioenergy. Taxonomy-eligible sales under category
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4.20 also include the sale of district heat produced at the Simpele and Kyro
power plants to neighbouring areas.
Metsä Board includes any additions to tangible and intangible
fixed assets in Taxonomy-eligible capital expenditure, including any
right-of-use assets recognised based on long-term lease agreements.
Taxonomy-aligned capital expenditure includes investments in the renewal
of the Husum pulp mill’s recovery boiler and turbine under category 4.20
Cogeneration of heat/cool and power from bioenergy. Taxonomy-eligible
capital expenditure also includes maintenance investments in the Simpele
and Kyro power plants under category 4.20, as well as maintenance
investments in the Kaskinen power plant and chemicals recovery facility
under category 4.24 Production of heat/cool from bioenergy.
Metsä Board’s Taxonomy-eligible operating expenses include research
and development costs recognised as expenses and the maintenance
costs of production units and property, supplemented by the costs of
waste management and short-term lease agreements. The reported
expenditure includes both external service costs and the wages, including
indirect employee costs, of the company’s own personnel responsible for
the listed activities. Taxonomy-aligned operating expenses include operat-
ing expenses for the recovery of chemicals and heat at the Husum pulp mill
under category 4.20 Cogeneration of heat/cool and power from bioenergy.
Taxonomy-eligible operating expenses also include operating costs for
the Simpele and Kyro power plants under category 4.20 and operating
costs for the Kaskinen power plant and chemicals recovery facility under
category 4.24.
To avoid double reporting, external sales have been included in the Tax-
onomy operations only once. In addition, measures have been adopted to
ensure that capital expenditure and operating expenses are kept separate
for each operation.
In Metsä Board’s opinion, the company meets the Taxonomy’s minimum
social safeguards, which cover human rights, bribery and corruption, fair
competition and taxation. The company has reviewed each of these from
two perspectives: the presence of relevant processes and the addressing
of infringements. For example, human rights due diligence is described in
greater detail under Social affairs and human rights and Anti-corruption
and anti-bribery activities and corporate culture.
Proportion of sales from products or services associated with Taxonomy-aligned economic activities
Substantial
contribution
criteria DNSH criteria
Economic activities
Codes
Absolute sales
Proportion of
sales
Climate change
migitation
Climate change
adabtation
Climate change
migitation
Climate change
adabtation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of
sales 2022
Enabling activity /
transitional activity
EUR
million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E/T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Cogeneration of heat/cool and power from
bioenergy
4.20. 1.0 0% 100% Y Y - Y Y Y 0%
Sales of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
1.0 0% 0% 0% 0% 0%
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Cogeneration of heat/cool and power from
bioenergy
4.20. 1.8 0%
Sales of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
1.8 0%
Total (A.1+A.2) 2.9 0% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Sales of Taxonomy-non-eligible activities (B) 2,476.7 100%
Total (A+B) 2,479.6 100%
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Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
Substantial
contribution
criteria DNSH criteria
Economic activities
Codes
Absolute CapEx
Proportion of
CapEx
Climate change
migitation
Climate change
adabtation
Climate change
migitation
Climate change
adabtation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of
CapEx 2022
Enabling activity /
transitional activity
EUR
million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E/T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Cogeneration of heat/cool and power from
bioenergy
4.20. 1 17.8 39% 100% Y Y - Y Y Y 39%
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
1 17.8 39% 39% 0% 39% 0%
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Cogeneration of heat/cool and power from
bioenergy
4.20. 1.0 0%
Production of heat/cool from bioenergy 4.24. 1.9 1%
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
2.9 1%
Total (A.1+A.2) 120.7 40% 39% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B) 183.4 60%
Total (A+B) 304.1 100%
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Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities
Substantial
contribution
criteria DNSH criteria
Economic activities
Codes
Absolute OpEx
Proportion of
OpEx
Climate change
migitation
Climate change
adabtation
Climate change
migitation
Climate change
adabtation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of
OpEx 2022
Enabling activity /
transitional activity
EUR
million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E/T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Cogeneration of heat/cool and power from
bioenergy
4.20. 4.2 4% 100% Y Y - Y Y Y 4%
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
4.2 4% 4% 0% 4% 0%
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Cogeneration of heat/cool and power from
bioenergy
4.20. 2.2 2%
Production of heat/cool from bioenergy 4.24. 1.8 2%
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
4.0 4%
Total (A.1+A.2) 8.2 8% 4% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activi-ties (B) 99.3 92%
Total (A+B) 107.4 100%
■ 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 sys-
tematically assesses its strategic, operational and financial risks. Key risks
are accounted for in the planning processes 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 damage risks are
covered with the Group’s property and interruption, liability, transport
damage 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 2022.
■ Market risks
Development of the world economy
The global economy is marked by uncertainty, and the growth outlook
has weakened due to high inflation, tighter monetary policy and capacity
issues in global production and supply chains. This situation is caused by
many factors, most importantly by Russia’s war against Ukraine and its
consequences.
Russia’s war of aggression in Ukraine has increased global geopolitical
tensions, eroded consumers’ and companies’ confidence in economic
development, and accelerated inflation. Especially in Europe, the war and
abandonment of Russian energy has caused an energy crisis, which has
significantly affected the availability and prices of energy. The impacts of
sanctions imposed on Russia and the related counter sanctions as well as
the risks arising from the crisis target international production and supply
chains, costs and availability of production inputs, the energy infrastruc-
ture and cybersecurity.
The war in Ukraine is not expected to end in the short term. In addition,
central banks are striving to curb inflation by raising interest rates. These
factors may have negative impacts on the economy in the form of weaker
growth prospects and a higher risk of recession due to higher interest
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rates, a decrease in real income caused by high inflation, a further decrease
in households’ purchasing power and an extended energy crisis in Europe.
All of these factors may have a negative impact on the demand for Metsä
Board’s products, business continuity or the company’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’
capacity or the expansion of product ranges may lower the price level
of end products and negatively affect Metsä Board’s profitability. If
paperboard imports from Asia and the Americas to Europe increase faster
than demand, this may lead to an imbalance in the market situation. Any
significant changes in exchange rates may also influence products’ market
balance and companies’ competitiveness.
Changes in regulation, such as the EU’s climate and environmental policy
and tighter new requirements to limit carbon dioxide, sulphur or other
emissions, may weaken Metsä Board’s profitability or hamper business
continuity. The acceptability of single-use food and food service packaging
involves regulatory risks.
Significance of the Chinese market
China is a significant market area especially for Metsä Fibre. China’s
economic growth has slowed down in recent years due to the country’s
strict coronavirus policy, problems in the real estate market and tighter
business regulation. Increased geopolitical tensions may also influence
China’s future economic growth. Problems in China’s industrial sector may
increase the problems and costs of global supply chains. The relations
between the EU and China are burdened by bilateral sanctions and differing
views on multiple issues. Should the growth of the Chinese economy slow
down further or the relations between the EU and China deteriorate, this
could affect the demand for market pulp or paperboards on the Chinese
market and consequently affect the company’s profitability.
International trade restrictions and geopolitical risks
Potential changes in the industrial and trade policies of leading industrial-
ised countries, the materialisation of geopolitical risks or an escalation of
geopolitical crises may lead to more extensive trade restriction measures
or the use of international sanctions. The possible consequences of
these include a further slowdown in the recovery and growth of the global
economy and even a curtailment of global trade flows. Any sanctions
and restrictions on international trade may affect the demand for Metsä
Board’s products and the company’s profitability.
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.
Coronavirus pandemic
The coronavirus pandemic is easing, but may still cause uncertainty in the
global economy and Metsä Board’s business environment. A prolonged
pandemic could reduce the demand for Metsä Board’s products and cause
disruptions in the company’s production or supply chains.
■ Operational risks
Cost and availability risks of production inputs
Significant or unforeseen changes in the cost of Metsä Board’s most
important production inputs – wood, energy and chemicals – and any
problems with their availability, may reduce profitability, threaten business
continuity and put the implementation and life-cycle profitability of
planned development investments at risk.
The discontinuation of wood supply from Russia may result in production
curtailments at mills, especially due to the availability of birch, affecting
the sales of the company’s products and profitability. An extended energy
crisis and limited availability of natural gas, volatile electricity market prices
or changes in the prices of emissions allowances may have a negative
impact on profitability.
In addition, the availability of transport capacity and a steep increase in
market prices may negatively affect the company’s profitability. Changes
in exchange rates may also have an effect on the costs of some production
inputs. The Group aims to hedge against these risks by making long-term
supply agreements and related derivatives contracts.
Sustainability
Promoting sustainability supports Metsä Board’s business and its
development, but risks also arise from climate change and biodiversity loss
in particular. 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 reputation risks, if the company fails to effectively 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 differ from the current situation.
Physical climate risks can be further divided into acute weather phenom-
ena and more permanent changes. Extreme weather phenomena – such
as storms, drought 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
86
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
climate becomes warmer, the most significant physical risks influencing
forests and the availability of wood raw material will be the weakening of
harvesting conditions due to shorter winters and increasing insect damage.
The mitigation of climate change and the transition to a low-carbon
economy are strongly visible in Metsä Board’s sustainability goals. Tran-
sitioning to fully fossil-free energy in production, abandoning fossil-based
raw materials and using energy and water more efficiently are at the core of
these objectives. The measures related to the objectives help Metsä Board
to manage climate 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.
Forest protection must be increased to safeguard forest biodiversity,
which, in turn, poses risks to wood supply. All wood sourced by Metsä
Group comes from sustainably managed forests, and this is verified by
certification or controlled in other ways. Metsä Group also implements
its ecological sustainability programme in commercial forests jointly with
forest owners The company also has a nature programme for non-com-
mercial forests, which aims to safeguard biodiversity and improve the state
of waters in Finland through restoration projects funded by Metsä Group.
Increasing EU regulation poses risks to the commercial use of forests in
Metsä Group’s wood supply. There are many different vegetation zones in
the EU area, and each zone has its own characteristic forests. The forests
of each zone, as well as the forest management practices best suited to
them, differ from one another. However, EU-based regulation concerning
forests in the EU area and their use has become clearly more detailed,
treating different areas in a similar way. This trend increases the risk for
poorly suited regulation also applying to forests from which Metsä Group
obtains raw material.
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 example, large-
scale fires, significant equipment malfunctions, serious accidents, extreme
weather phenomena and environmental damage. Employees falling ill due
to infectious diseases, cyberattacks and malware and ensuing long-term
malfunctions in IT systems, labour disputes, availability issues concerning
the most important raw materials and disruptions in the logistics chain
may 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.
Business is also being developed by modernising production technology,
running efficiency programmes, conducting 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
affect 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
functioning of the related investigation process are also key tools in the
identification and management of compliance-related risks. As part of its
ongoing sustainability efforts, the company is developing processes and
controls to help identify and more efficiently manage risks related to the
sustainability of the supply chain, including trade sanctions, conflicts of
interest, irregularities, corruption, bribery, money laundering, taxation and
human rights.
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
efficient 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 affecting 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.
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FINANCIAL
DEVELOPMENT
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 difficult, 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
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
exposed to fluctuations in exchange rates. The US dollar strengthening by
10% against the euro would have a positive impact of approximately EUR
100 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 lim-
its 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. Excluding Russia,
Metsä Board’s customer credit risk was at a normal level in 2022. 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 2022 consolidated financial statements
(Management of financial risks).
■ Metsä Board’s shares and trading
Metsä Board has two series of 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. All shares carry the same
right to receive a dividend.
The year end closing price of Metsä Board’s B share on the Nasdaq
Helsinki was EUR 8.77. The share’s highest and lowest prices were EUR
10.49 and EUR 7.09, respectively. Correspondingly, the closing price of the
A share was EUR 10.15; the share’s highest and lowest prices were EUR
10.50 and EUR 7.66, respectively.
In January–December, the average daily trading volumes of the B and
A shares on the Nasdaq Helsinki were around 347,200 shares and around
3,400 shares respectively. The total trading volume of the B share was EUR
767 million, and the total trading volume of the A share was EUR 8 million.
At the end of 2022, the market value of all Metsä Board shares was EUR
3.2 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.
On 27 October 2022, the Board of Directors of Metsä Board decided
to launch a share buyback of company’s own shares. The acquisition of
the company’s own shares started on 28 October 2022 and ended on 11
November 2022. During this period, Metsä Board acquired 1,000,000 B
shares for an average price of EUR 7.8225 per share. The own shares were
acquired for payment of the Board fees or to implement the company’s
share-based incentive systems.
On 30 December 2022, Metsäliitto Cooperative announced that its
ownership in Metsä Board had exceeded the 50% threshold, and that its
holding in Metsä Board was 50.16% of shares and 68.24% of votes. As
Metsä Board is an entity controlled by Metsäliitto Cooperative, Metsäliitto
Cooperative’s ownership also includes the 1,000,000 own shares held by
Metsä Board.
Foreign and nominee-registered investors held approximately 14% (14)
of all shares.
■ 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
company’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 company’s operational management
is handled by the CEO, supported by the Corporate Management Team, the
members of which are not members of the Board of Directors. The tasks
and responsibilities of the different corporate 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
2022 financial period, the Board of Directors held 13 meetings, at which the
attendance of Board members was 97% (99 in 2021).
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
■ Resolutions of 2022 Annual General
Meeting and the Board of Directors’ authority
to issue shares
The 2022 Annual General Meeting was held on 24 March 2022 in
accordance with exceptional procedures. The General Meeting decided to
distribute a dividend of EUR 0.41 per share. The dividend payment date was
7 April 2022.
The general meeting resolved that the annual remuneration of the
members of the Board of Directors be increased such that the Chair will
be paid EUR 99,000, the Vice Chair EUR 85,000 and ordinary members
EUR 67,000 per year. In addition, it was decided to keep the meeting fees
unchanged at EUR 800 for each attended meeting of the Board of Direc-
tors and its Committees. The general meeting resolved that approximately
one half of the remuneration is paid in the company’s B-series shares to be
acquired from public trading. The transfer of such shares is restricted for
a period of two years. Further, the Chair of the Audit Committee is paid an
additional monthly remuneration of EUR 900.
The General Meeting resolved to approve the Remuneration Report in an
advisory vote.
The general meeting fixed the number of Board members to nine (9)
members and elected the following persons as members of the Board of
Directors: Hannu Anttila, M.Sc (Economics), Raija-Leena Hankonen-Ny-
bom M.Sc (Economics), Erja Hyrsky M.Sc (Economics), Ilkka Hämälä,
M.Sc. (Technology), Mari Kiviniemi M.Soc.Sc. (Econ.), Jussi Linnaranta,
M.Sc (Agriculture), Jukka Moisio M.Sc (Economics), Timo Saukkonen M.Sc
(Agriculture) and Veli Sundbäck, LL.M. The term of office of the Board
members continues until the end of the next Annual General Meeting.
The Annual General Meeting resolved to authorise the Board to decide
on a share issue and the issue of special rights entitling to shares as
defined in 1§ of Chapter 10 of the Companies Act. The authorisation applies
to B-shares. By virtue of the authorisation the Board is entitled to issue
up to 35,000,000 new B-series shares, including shares to be issued
pursuant to rights entitling to shares. The number of shares corresponds to
approximately 10% of all current shares. This authorisation is effective until
30 June 2023.
The Annual General Meeting resolved to authorise the Board to decide
on the acquisition of the company’s own shares. The number of shares
to be acquired based on the authorisation shall not exceed 1,000,000
B-shares, which corresponds to approximately 0.3% of all current shares.
This authorisation is effective until 30 June 2023.
■ Near-term outlook
The decline in global economic growth and consumers’ purchasing power
is causing uncertainty in the market. The visibility of paperboard sales
development is weak.
Metsä Board’s paperboard delivery volumes in January–March are
expected to remain at roughly the same level as in October–December
(418,000 tonnes). The average prices for folding boxboard are expected to
increase.
The demand outlook for market pulp is uncertain due to global economic
developments. In the first quarter, market pulp prices are slightly lower
than in the previous quarter. Global supply of long-fibre pulp will be reduced
due to the limited availability of raw material in North America. Demand for
sawmill products is expected to pick up in the second quarter.
Cost pressure will continue. Following the increase in wood prices and
harvesting and transport costs last year, wood costs are expected to
increase in the beginning of the year.
With the start-up of the new recovery boiler and turbine in Husum,
depreciation in January–March is about EUR 10 million higher than in the
previous quarter.
No major annual maintenance shutdowns have been planned at the mills
in the first quarter.
Exchange rate fluctuations in January–March 2023, including the impact
of hedges, will have a positive impact on the operating result compared to
October–December 2022, and a notably positive impact on the operating
result compared to January–March 2022.
■ Board of Directors’ proposal for dividend
The distributable funds of the parent company on 31 December 2022 were
EUR 609.3 million, of which the retained earnings for the financial year are
EUR 398.6 million.
The Board of Directors proposes to the Annual General Meeting to be
held on 23 March 2023 that a dividend of EUR 0.58 per share be distributed
for the 2022 financial period.
The proposed dividend corresponds to 50% of the earnings per share for
2022. The amount of dividend totals approximately EUR 206 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 27 March 2023. The Board of Directors proposes 5
April 2023 as the dividend payment date.
89
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
EUR million Note 1–12/2022 1–12/2021
Sales 2.1, 2.2, 7.3 2,479.6 2,084.1
Change in stocks of finished goods and work in progress 70.1 11.9
Other operating income 2.3, 7.3 79.6 57.0
Materials and services 2.4, 7.3 -1,824.3 -1,461.0
Employee costs 3 -217.4 -216.0
Share of result of associated company 7.2, 7.3 163.1 114.4
Depreciation, amortisation and impairment charges 4.1, 4.2 -83.1 -90.2
Other operating expenses 2.4 -136.1 -124.4
Operating result 531.5 375.9
Share of profit from associated companies and joint ventures 7. 2 0.0 0.0
Net exchange gains/losses 5.2 -5.0 -2.3
Other financial income 5.2, 7.3 3.0 0.2
Interest and other financial expenses 5.2, 7.3 -4.7 -7.9
Result before tax 524.9 365.8
Income taxes 6 -63.5 -51.8
Result for the period 461.3 314.0
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 -4.7 3.0
Financial assets at fair value through other comprehensive income 4.3 178.5 -5.8
Share of profit from other comprehensive income of associated company 3.0 -0.1
Income tax relating to items that will not be reclassified -33.9 -0.8
Total 142.9 -3.7
Items that may be reclassified to profit or loss 5.1
Cash flow hedges -3.1 -11.0
Translation differences -56.3 -4.8
Share of profit from other comprehensive income of associated company 28.1 -3.8
Income tax relating to items that may be reclassified 0.6 2.2
Total -30.6 -17.4
Other comprehensive income, net of tax 112.2 -21.1
Total comprehensive income for the period 573.6 292.8
Result for the period attributable to
Shareholders of parent company 409.9 292.1
Non-controlling interest 51.4 21.9
Total comprehensive income for the period attributable to
Shareholders of parent company 535.7 272.4
Non-controlling interest 37.8 20.4
Adjusted average number of shares, thousands 355,359 355,513
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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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Consolidated financial statements
EUR million Note 31 DEC 2022 31 DEC 2021
ASSETS
Non-current assets
Goodwill 4.1 12.2 12.4
Other intangible assets 4.1 5.9 6.2
Tangible assets 4.2 1,107.9 935.0
Investments in associated companies and joint ventures 7. 2 614.2 479.0
Other investments 4.3, 5.7 345.4 181.0
Other non-current financial assets 5.3 6.0 15.3
Derivative financial instruments 5.7 2.9
Deferred tax receivables 6 9.4 8.4
Current assets
Inventories 4.4 506.7 382.6
Accounts receivable and other receivables 4.5, 7.3 354.5 331.5
Current income tax receivables 41.4 1.0
Derivative financial instruments 5.7 40.5 34.0
Cash and cash equivalent 5.4, 7. 3 356.2 524.2
Assets classified as held for sale 7. 2 11.0
Total assets 3,403.2 2,921.5
SHAREHOLDERS’ EQUITY AND LIABILITIES
Equity attributable to shareholders of parent company 5.1
Share capital 557.9 557.9
Translation differences -64.0 -27.2
Fair value and other reserves 283.9 118.3
Reserve for invested unrestricted equity 208.9 208.9
Treasury shares -7.8
Retained earnings 1,103.2 841.5
Non-controlling interests 173.2 146.2
Total shareholders' equity 2,255.2 1,845.6
Non-current liabilities
Deferred tax liabilities 6. 149.5 96.2
Post employment benefit obligations 3.4 10.4 13.7
Provisions 4.8 2.0 2.0
Borrowings 5.5, 5.6, 5.7 434.4 437.0
Other liabilities 4.6 3.9 1.5
Derivative financial instruments 5.7 1.7
Current liabilities
Provisions 4.8 4.9 1.0
Current borrowings 5.5, 5.6, 5.7 18.6 10.0
Accounts payable and other liabilities 4.7, 7. 3 482.7 467.5
Current income tax liabilities 11.6 19.9
Derivative financial instruments 5.7 30.2 18.6
Liabilities classified as held for sale 7. 2 6.8
Total liabilities 1,148.1 1,076.0
Total shareholders' equity and liabilities 3,403.2 2,921.5
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
differences
Fair value
and other
reserves
Reserve for
invested
restricted
equity
Treasury
shares
Retained
earnings Total
Non-
controlling
interest
Total
share -
holders'
equity
Shareholders’ equity, 1 Jan 2022 557.9 -27.2 118.3 208.9 841.5 1,699.4 146.2 1,845.6
Result for the period 409.9 409.9 51.4 461.3
Other comprehensive income net of
tax total
5.1 -36.9 165.6 -2.9 125.8 -13.6 112.2
Comprehensive income total -36.9 165.6 407.0 535.7 37.8 573.6
Related party transactions
Dividends 5�1 -145.8 -145.8 -10.8 -156.6
Acquisition of treasury shares 5�1 -7.8 -7.8 -7.8
Share based payments 3.3 0.5 0.5 0.5
Shareholders’ equity, 31 Dec 2022 557.9 -64.0 283.9 208.9 -7.8 1,103.2 2,082.0 173.2 2,255.2
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
interest
Related party transactions
Dividends and capital distribution 5�1 -56.9 -35.6 -92.4 -92.4
Share based payments 3.3 1.1 1.1 1.1
Shareholders’ equity, 31 Dec 2021 557.9 -27.2 118.3 208.9 841.5 1,699.4 146.2 1,845.6
The notes are an integral part of these financial statements.
Statement of changes in shareholders’ equity
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR million Note 1–12/2022 1–12/2021
Cash flow from operating activities
Result for the period 461.3 314.0
Adjustments to the result, total -63.0 11.8
Interest received 2.4 0.1
Interest paid -3.6 -11.2
Dividends received 59.1 0.0
Other financial items, net -6.4 -3.6
Income tax paid -66.5 -31.1
Change in working capital -151.4 49.5
Net cash flow from operations 232.0 329.6
Cash flow from investing activities
Acquisition of other shares -13.6
Capital expenditure -274.2 -213.7
Proceeds from disposal of shares in subsidiaries, net of cash 7. 2 24.5
Proceeds from disposal of other shares 16.9 0.2
Proceeds from sale of tangible and intangible assets 41.1 30.4
Change in non-current receivables, net -0.1 0.2
Net cash flow from investing -205.3 -183.0
Cash flow from financing activities
Changes in non-controlling interests 261.2
Proceeds from non-current interest bearing liabilities 60.9
Payment of non-current interest bearing liabilities -81.0 -7.2
Change in current liabilities 5.5 -0.5 -0.4
Change in non-current non-interest bearing liabilities, net 2.4 -0.4
Acquisition of treasury shares 5�1 -7.8
Dividend paid and capital distribution -157.1 -92.4
Net cash flow from financing -183.1 160.7
Change in cash and cash equivalents -156.5 307.3
Cash and cash equivalents at beginning of period 524.2 214.0
Translation adjustments -11.6 3.0
Change in cash and cash equivalents -156.5 307.3
Cash and cash equivalents at end of period 5.4 356.2 524.2
Adjustments to the result, total
Taxe s 63.5 51.7
Depreciation, amortisation and impairment charges 83.1 90.2
Share of result from associated companies and joint ventures -163.1 -114.4
Gains and losses on sale of non-current assets -59.5 -28.2
Finance costs, net 6.6 10.0
Post-employment benefit obligations and provisions 3.6 -0.7
Other adjustments 2.8 3.2
Adjustments to the result, total -63.0 11.8
Change in working capital
Inventories -128.8 -19.3
Accounts receivables and other receivables -27.6 -53.9
Accounts payable and other liabilities 5.1 122.7
Change in working capital -151.4 49.5
The notes are an integral part of these financial statements.
Consolidated cash flow statement
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SUSTAINABILITY
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FINANCIAL
DEVELOPMENT
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 fi bre li ne rb oa rd an d ma rket pu lp
businesses. Metsä Board reports on its financial performance in one
Metsä Board Corporation is Group’s parent company, which is domiciled
in Helsinki . The registered address of the company is Revontulenpuisto 2,
Ltd. At the end of 2022 Metsäliitto Cooperative owned 50.2 per cent of the
shares, and the voting rights conferred by these shares were 68.2 per cent.
A copy of the annual report can be obtained from Metsä Board’s website
www.metsaboard.com or parent company’s head office at Revontulen-
puisto 2, 02100 Espoo Finland.
■ Accounting principles
94
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
■ Other accounting principles
Other accounting principles are presented as part of the relevant Notes.
95
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
2. Profitability
96
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
97
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Employee costs are reported in Note 3.1 and information on depreciation,
amortisation and impairment charges in Notes 4.1 and 4.2.
98
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
3. Remuneration
99
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
100
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
101
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
102
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
103
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
104
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
105
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
4. Capital employed
Accounting principles
106
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
107
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
108
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
109
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
110
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
111
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
112
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
113
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
114
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
115
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
5. Capital structure and financial risks
116
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
117
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
118
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
119
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
120
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
121
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
122
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
123
23 24 25 26 27 28-
300
250
200
150
100
50
0
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
REPAYMENT OF
NON-CURRENT
LOANS
EUR million
BREAKDOWN
OF CURRENCY
EXPOSURE
%
USD ...................................69%
SEK ...................................37%
GBP ..................................... 7%
CAD ..................................... 2%
Others ..................................1%
124
CONSOLIDATED FINANCIAL STATEMENTS
|
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125
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
126
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
127
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
128
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Fair value hierarchy of financial assets and liabilities
129
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
130
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
131
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
132
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
6. Income taxes
133
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
134
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
7. Group structure
135
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Business transactions with non-controlling interest
136
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
137
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
138
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
139
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
8. Other notes
140
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR NOTE 1.1.–31.12.2022 1.1.–31.12.2021
Sales 2 1,572,707,178.40 1,389,003,575.21
Change in stocks of finished and unfinished products 43,724,591.06 18,978,903.15
Other operating income 3, 4 91,648,078.56 40,474,541.15
Materials and services
Materials, consumables and goods
Purchases during the financial period -1,091,988,355.22 -820,695,309.71
Changes in stocks 3,368,182.68 1,622,173.39
External services 5 -255,741,958.55 -220,006,720.05
Employee costs 5 -106,360,648.15 -103,737,173.86
Depreciations and impairment charges 3, 6 -48,392,956.43 -49,811,731.10
Other operating expenses 3, 5 -112,597,632.50 -101,053,305.55
-1,611,713,368.17 -1,293,682,066.88
Operating profit/loss 96,366,479.85 154,774,952.63
Financial income and expenses 7
Income from group companies 68,282,404.82 5,644,555.11
Income from investments in other non-current assets 323,118.23 855.00
Other interest and financial income 37,044.13 16,028.55
Exchange rate differences -24,823,074.91 -4,792,233.25
Interest expenses and other financial expenses -11,243,159.60 -10,861,550.10
32,576,332.67 -9,992,344.69
Profit/loss before appropriations and taxes 128,942,812.52 144,782,607.94
Appropriations
Change in depreciation differences 6 -11,697,827.98 -16,340,995.30
Group contribution 0.00 391,363.11
-11,697,827.98 -15,949,632.19
Income taxes 8 -5,624,167.05 -25,358,945.30
Profit/loss for the financial period 111,620,817.49 103,474,030.45
Parent company
■ Income statement
Parent company financial statements
141
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Parent company
■ Balance sheet
EUR Note 31.12.2022 31.12.2021
ASSETS
NON-CURRENT ASSETS
Intangible assets 9
Intangible assets 11,360,766.54 4,865,929.32
Other intangible assets 432,011.17 278,744.68
Advance payment and construction in
progress
133,093.84 1,020,133.10
11,925,871.55 6,164,807.10
Tangible assets 9
Land and water areas 26,340,436.42 29,491,684.80
Buildings and constructions 127,095,989.94 123,703,859.97
Machinery and equipment 239,929,037.57 236,913,618.20
Other tangible assets 7,629,729.80 6,638,072.18
Advance payment and construction in
progress
60,459,586.34 18,957,755.83
461,454,780.07 415,704,990.98
Investments 10
Shares in group companies 534,406,191.31 535,378,815.29
Receivables from group companies 290,412,859.87 305,699,997.81
Shares in associated companies 86,429,409.33 86,429,409.33
Other shares and holdings 344,817,070.84 178,311,058.30
Other receivables 0.00 5,002.00
1,256,065,531.35 1,105,824,282.73
Total non-current assets 1,729,446,182.97 1,527,694,080.81
CURRENT ASSETS
Inventories
Materials and consumables 53,576,680.10 50,227,009.35
Finished products 197,662,125.58 153,937,534.52
Advance payments 15,432,257.27 4,695,368.34
266,671,062.95 208,859,912.21
NON-CURRENT RECEIVABLES 11
Receivables from group companies
Receivables from group companies 38,878,585.67 19,511,624.05
38,878,585.67 19,511,624.05
Current receivables 11
Accounts receivables 156,737,059.46 136,478,748.63
Receivables from group companies 182,648,251.13 350,842,606.92
Receivables from associated companies 98,183.87 289,849.64
Other receivable 23,337,352.03 33,700,472.97
Prepayments and accrued income 41,637,891.74 7,928,830.79
404,458,738.23 529,240,508.95
Total receivables 443,337,323.90 548,752,133.00
Cash and cash equivalents 13,371,673.53 24,353,833.76
Total current assets 723,380,060.38 781,965,878.97
TOTAL ASSETS 2,452,826,243.35 2,309,659,959.78
EUR Note 31.12.2022 31.12.2021
EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY 12
Share capital 557,881,540.40 557,881,540.40
Other reserves
Reserve for invested unrestricted equity 210,639,481.81 210,639,481.81
Value adjustment reserve 259,659,751.43 116,464,042.72
Profit/loss for previous financial periods 287,026,854.12 337,173,372.47
Profit/loss for the financial period 111,620,817.49 103,474,030.45
1,426,828,445.25 1,325,632,467.85
APPROPRIATIONS
Accumulated depreciation difference 6 176,002,120.56 164,304,292.58
PROVISIONS 13 2,729,857.00 3,760,116.35
LIABILITIES
Non-current liabilities 15
Bonds 249,601,391.02 249,517,437.02
Loans from financial institutions 176,470,588.24 179,316,176.48
Advance payments 1,082,432.07 1,082,432.10
Deferred tax liability 8, 14 64,368,909.96 28,363,930.89
Liabilities to group companies 0.00 1,691,108.71
Other liabilities 2,399,500.74 0.00
493,922,822.03 459,971,085.20
Current liabilities 16
Pension premium loans 11,764,705.88 3,908,823.52
Advance payments 3,756,180.63 2,521,860.77
Accounts payable 175,417,664.49 154,123,561.95
Liabilities to group companies 88,896,086.27 83,855,599.29
Liabilities to associated companies 0.00 704,619.73
Other liabilities 7,699,014.97 19,896,953.06
Accruals and deferred income 65,809,346.27 90,980,579.48
353,342,998.51 355,991,997.80
Total liabilities 847,265,820.54 815,963,083.00
TOTAL SHAREHOLDES' EQUITY
AND LIABILITIES
2,452,826,243.35 2,309,659,959.78
142
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR 1.1.–31.12.2022 1.1.–31.12.2021
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss before appropriations and taxes 128,942,812.52 144,782,607.94
Adjustments to profit/loss a) -47,715,398.92 37,829,380.81
Interest received 9,472,006.62 5,625,765.02
Interest paid -10,680,827.37 -10,387,182.18
Dividends received 59,142,897.83 35,336.84
Other financial items, net -10,999,779.03 -5,487,515.15
Income taxes paid -49,996,551.31 -13,806,989.91
Change in net working capital b) -109,960,671.71 60,201,890.97
Net cash flow from operating activities -31,795,511.37 218,793,294.34
INVESTMENTS
Acquisition of other shares -15,767,840.00 0.00
Investments in tangible and intangible assets -78,185,167.01 -52,139,088.99
Proceeds from disposal of shares in affiliated companies, 25,241,080.85 0.00
Proceeds from other investments 16,878,690.70 210,500.00
Prodeeds from sale of tangible and intangible assets 40,771,107.52 30,349,351.55
Increase and decrease of non-current receivables, net -19,342,971.29 60,245,134.44
Total cash flow from investing activities -30,405,099.23 38,665,897.00
CASH FLOW BEFORE FINANCIAL ACTIVITIES -62,200,610.60 257,459,191.34
Cash flow from financial activities
Acquistion of own shares -7,838,135.79 0.00
Dividends paid and other profit distribution -145,782,413.01 -92,433,313.95
Increase in non-current liabilities 60,899,777.40 0.00
Decrease in non-current liabilities -55,889,483.28 0.00
Pitkäaikaisten korollisten velkojen muutos 2,399,500.72 0.00
Increase or decrease in interest bearing current receivables, net 197,037,841.22 -147,374,614.78
Group contribution 391,363.11 1,160,000.00
51,218,450.37 -238,647,928.73
CHANGES IN CASH AND CASH EQUIVALENTS -10,982,160.23 18,811,262.61
Cash and cash equivalents opening balance 24,353,833.76 5,542,571.15
Change in cash and cash equivalents -10,982,160.23 18,811,262.61
Cash and cash equivalents closing balance 13,371,673.53 24,353,833.76
a) Adjustments to profit/loss
Depreciations and impairment charges 48,392,956.43 49,811,731.10
Financial income and expenses -32,576,332.67 9,992,344.69
Gains or losses on sale of fixed assets -62,501,763.33 -21,257,815.66
Change in provisions -1,030,259.35 -716,879.32
Total -47,715,398.92 37,829,380.81
b) Change in net working capital
Inventories -57,800,939.75 -17,961,740.73
Change in current receivables, non-interest bearing -39,982,068.72 -14,579,980.26
Change in current liabilities, non-interest bearing -12,177,663.24 92,743,611.96
Total -109,960,671.71 60,201,890.97
Parent company accounts
■ Cash flow statement
143
SUSTAINABILITY
REPORT
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 office is in
Helsinki. The Metsä Group prepares consolidated financial statements
which are available at the Group’s main office at Revontulenpuisto 2 A,
FIN-02100 Espoo, Finland.
Metsä Board Oyj’s financial statements have been prepared in
accordance with Finnish Accounting Standards (FAS).
Metsä Board Oyj has related party transactions in the Metsä Group.
Those are described in more detail in the Metsä Board Annual report
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 differences hedging sales are recorded immediately to
financial income and expenses in the income statement. Exchange
rate differences are recorded in the financial statements with effect on
profit.
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 effective. The unrealised fair value of derivatives not in
hedge accounting is recognised in the income statement. In addition,
the company 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.
Share-based payments
Share-based payments are booked on the fiscal year when the non cancel-
lable right of the shares for the employee is issued.
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 Metsäliitto Employees’ Pension Foundation
or are an unfunded liability of the company. Pension insurance premi-
ums 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 taxa-
ble 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 differences 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 machines of power plants 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 production. Net realizable 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 recognized in
the income statement in line with the nature of the expense item and in
the mandatory provisions of the balance sheet.
144
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR 2022 2021
2. Sales by region
Other EU-countries 785,329,475.63 620,765,028.16
Other European countries 221,181,415.75 258,084,428.42
Other countries 501,092,341.29 417,137,893.36
Total 1,572,707,178.40 1,389,003,575.21
3. Exceptional items
Other operating income
Oy Hangö Stevedoring Ab Proceeds from liquidation of shares 22,955,409.24 0.00
Proceeds of selling land 6,533,675.05 7,007,417.18
Encore Ympäristöpalvelut Oy Proceeds of liquidation of shares 4,892,703.24 0.00
Merger profit 632,637.88 0.00
Environmental reservation 93,187.59 0.00
35,107,613.00 7,007,417.18
Exceptional items in income statement 35,107,613.00 7,007,417.18
4. Other operating income
Rental income 1,053,865.71 1,051,500.39
Service revenue 16,868,639.19 14,641,881.77
Gains on disposal 62,127,817.78 21,367,326.91
Government grants and allowances 3,214,154.64 787,581.19
Scrap and waste sale 219,922.43 255,568.97
Others 8,163,678.81 2,370,681.92
91,648,078.56 40,474,541.15
5. Operating expenses
External services
Distribution costs 178,928,268.89 149,817,832.97
Other external services 76,813,689.66 70,188,887.08
255,741,958.55 220,006,720.05
Employee costs
Wages and salaries for working hours 64,823,548.60 62,526,946.89
Osakeperusteiset maksut -495,369.86 2,004,301.44
Social security expenses
Pension expenses 15,531,896.13 13,676,031.03
Other social security expenses 26,500,573.28 25,529,894.50
106,360,648.15 103,737,173.86
Share-based fee arrangement is concerning 31.12.2022 19 persons of mother entity Metsä Board Oyj. From earning period 2020–2022 it is possible to earn total 469,498 (brut
-
to), from earning period 2021–2023 total 344,109 (brutto)and from earning period 2022–2024 total 351,398 (brutto) Metsä Board B-series shares.
Additional information of salaries, rewards and pension plans to management are presented in Group’s Note 3.2.
Additional information of share-based payments are presented in Group’s Note 3.3.
The average number of personnel during the financial period in the parent company 1,222 1,219
Other operating expenses
Rental and other property costs 13,469,651.58 12,758,855.97
Purchases of services 73,671,626.62 64,063,910.41
Losses on disposal of non-current assets 258,692.33 109,511.25
Other expenses
Voluntary social costs 4,080,223.14 4,686,272.21
Fixed energy costs 8,938,239.16 9,688,348.45
Traveling expenses 897,984.13 230,641.07
Insurances 3,283,249.15 2,406,028.29
Advertising and marketing expenses 1,858,792.58 2,252,894.58
Others 6,139,173.81 4,856,843.32
112,597,632.50 101,053,305.55
Fees of principal auditor
Audit fees 221,447.49 196,064.00
Auditor's opinions 49,612.51 4,930.00
271,060.00 200,994.00
The principal auditor is KPMG Oy Ab.
145
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
EUR 2022 2021
6. Depreciation and impairment charges
Planned depreciation
Intangible rights 754,573.95 1,487,864.06
Other intangible assets 85,985.10 87,6 67.88
Buildings and constructions 8,496,098.14 8,469,149.47
Machinery and equipment 38,298,727.98 38,997,457.55
Other tangible assets 757,571.26 769,592.14
Total 48,392,956.43 49,811,731.10
Change in depreciation difference 11,697,827.98 16,340,995.30
Total depreciation 60,090,784.41 66,152,726.40
Depreciation difference at the beginning of the financial year 164,304,292.58 147,963,297.28
Change in depreciation differences 11,697,827.98 16,340,995.30
Depreciation difference at the end of the financial year 176,002,120.56 164,304,292.58
7. Financial income and expenses
Income from investments in non-current assets
Dividend income
From Group companies 58,847,155.62 34,481.84
From others 323,118.23 855.00
59,170,273.85 35,336.84
Interest income on investments in non-current assets
From Group companies 8,273,801.16 5,580,610.15
8,273,801.16 5,580,610.15
Total income from non-current assets 67,444,075.01 5,615,946.99
Other interest and financial income
Interest income from Group companies 1,161,448.04 29,463.12
Other interest income 36,757.42 15,691.75
Other financial income 286.71 336.80
1,198,492.17 45,491.67
Exchange rate differences recognised in financial income and expenses
Exchange rate differences on sales 1,127,532.45 3,481,677.43
Exchange rate differences on purchases -513,406.61 -545,443.31
Exchange rate differences on financing -25,437,200.75 -7,728,467.37
-24,823,074.91 -4,792,233.25
Interest and other financial expenses
Interest expenses for the same group companies -794,579.90 -1,011,035.11
Other interest expenses -9,631,591.72 -8,902,440.98
Other financial expenses -816,987.98 -948,074.01
Total interest expenses and other financial expenses -11,243,159.60 -10,861,550.10
Financial income and expenses total 32,576,332.67 -9,992,344.69
8. Income taxes
Taxes for the financial year 5,596,020.86 25,557,347.96
Taxes for previous financial years -177,905.68 -341,778.52
Deferred taxes 206,051.87 143,375.86
5,624,167.05 25,358,945.30
146
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR 2022 2021
9. Intangible and tangible assets
Intangible rights
Acquisition costs 1.1. 111,057,990.95 117,493,533.02
Increases 8,019,339.65 458,238.69
Decreases -68,792,929.00 -7,529,650.20
Transfers between items 1,020,133.10 635,869.44
Acquisition costs 31.12. 51,304,534.70 111,057,990.95
Accumulated depreciation and impairment charges 1.1. -106,192,061.63 -104,835,551.39
Accumulated depreciation of deductions and transfers 67,002,867.42 131,353.82
Depreciation and write-downs for the financial period -754,573.95 -1,487,864.06
Accumulated depreciation and impairment 31.12. -39,943,768.16 -106,192,061.63
Book value 31.12. 11,360,766.54 4,865,929.32
Goodwill
Acquisition costs 1.1. 24,970,634.39 24,970,634.39
Decreases -24,970,634.39
Acquisition costs 31.12. 0.00 24,970,634.39
Accumulated depreciation and impairment charges 1.1. -24,970,634.39 -24,970,634.39
Accumulated depreciation of deductions and transfers 24,970,634.39 0.00
Accumulated depreciation and impairment on 31.12. 0.00 -24,970,634.39
Book value 31.12. 0.00 0.00
Other intangible assets
Acquisition costs 1.1. 7,846,976.75 7,878,550.92
Lisäykset 245,460.55 0.00
Decreases -872,084.63 -31,574.17
Transfers between items 1,445,140.51 0.00
Acquisition costs 31.12. 8,665,493.18 7,846,976.75
Accumulated depreciation and impairment charges 1.1. -7,568,232.07 -7,512,138.36
Accumulated depreciation of deductions and transfers -579,264.84 31,574.17
Depreciation and write-downs for the financial period -85,985.10 -87,667.88
Accumulated depreciation and impairment 31.12. -8,233,482.01 -7,568,232.07
Book value 31.12. 432,011.17 278,744.68
Advance payments and work in progress
Acquisition costs 1.1. 1,020,133.10 635,869.44
Increases 133,093.84 1,020,133.10
Transfers between items -1,020,133.10 -635,869.44
Acquisition costs 31.12. 133,093.84 1,020,133.10
Intangible assets total
Acquisition costs 1.1. 144,895,735.19 150,978,587.77
Increases 8,397,894.04 1,478,371.79
Decreases -94,635,648.02 -7,561,224.37
Transfers between items 1,445,140.51 0.00
Acquisition costs 31.12. 60,103,121.72 144,895,735.19
Accumulated depreciation and impairment charges 1.1. -138,730,928.09 -137,318,324.14
Accumulated depreciation of deductions and transfers 91,394,236.97 162,927.99
Depreciation and write-downs for the financial year -840,559.05 -1,575,531.94
Accumulated depreciation and impairment charges 31.12. -48,177,250.17 -138,730,928.09
Book value 31.12. 11,925,871.55 6,164,807.10
147
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AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
EUR 2022 2021
Land and water areas
Acquisition costs 1.1. 29,491,705.78 31,282,434.04
Increases 9,464.00 3,000.00
Decreases -3,164,398.52 -1,793,728.26
Transfers between items 3,685.36 0.00
Acquisition costs 31.12. 26,340,456.62 29,491,705.78
Accumulated depreciation and impairment charges 1.1. -20.98 -20.98
Accumulated depreciation of deductions and transfers 0.78 0.00
Accumulated depreciation and impairment on 31.12. -20.20 -20.98
Book value 31.12. 26,340,436.42 29,491,684.80
Buildings and constructions
Acquisition costs 1.1. 311,087,587.69 308,253,184.06
Opening balance correction 11,134,125.36 0.00
Increases 4,330,072.64 1,510,233.98
Decreases -3,256,608.92 -598,747.98
Transfers between items 3,015,475.54 1,922,917.63
Acquisition costs 31.12. 326,310,652.31 311,087,587.69
Accumulated depreciation and impairment charges 1.1. -187,383,727.72 -179,513,326.23
Opening balance correction -4,868,791.86 0.00
Accumulated depreciation of deductions and transfers 1,533,955.35 598,747.98
Depreciation and write-downs for the financial year -8,496,098.14 -8,469,149.47
Accumulated depreciation and impairment on 31.12. -199,214,662.37 -187,383,727.72
Book value 31.12. 127,095,989.94 123,703,859.97
Machinery and equipment
Acquisition costs 1.1. 1,281,155,098.82 1,240,170,683.48
Opening balance correction 6,979,604.01 0.00
Increases 34,987,919.86 31,110,627.78
Decreases -17,313,443.78 -7,582,216.10
Transfers between items 6,373,558.75 17,456,003.66
Acquisition costs 31.12. 1,312,182,737.66 1,281,155,098.82
Accumulated depreciation and impairment charges 1.1. -1,044,241,480.62 -1,012,826,239.17
Opening balance correction -6,744,936.04 0.00
Accumulated depreciation of deductions and transfers 17,031,444.55 7,582,216.10
Depreciation and write-downs for the financial year -38,298,727.98 -38,997,457.55
Accumulated depreciation and impairment on 31.12. -1,072,253,700.09 -1,044,241,480.62
Book value 31.12. 239,929,037.57 236,913,618.20
Other tangible assets
Acquisition costs 1.1. 14,204,781.97 13,862,872.09
Increases 1,363,101.25 341,745.97
Decreases -1,296,226.73 0.00
Transfers between items 386,127.63 163.91
Acquisition costs 31.12. 14,657,784.12 14,204,781.97
Accumulated depreciation and impairment charges 1.1. -7,566,709.79 -6,797,117.65
Accumulated depreciation of deductions and transfers 1,296,226.73 0.00
Depreciation and write-downs for the financial year -757,571.26 -769,592.14
Accumulated depreciation and impairment on 31.12. -7,028,054.32 -7,566,709.79
Book value 31.12. 7,629,729.80 6,638,072.18
Advance payments and work in progress
Acquisition costs 1.1. 18,957,755.83 20,641,731.56
Increases 51,280,677.79 17,695,109.47
Transfers between items -9,778,847.28 -19,379,085.20
Acquisition costs 31.12. 60,459,586.34 18,957,755.83
148
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR 2022 2021
Total tangible assets
Acquisition costs 1.1. 1,654,896,930.09 1,614,210,905.23
Opening balance correction 18,113,729.37 0.00
Increases 91,971,235.54 50,660,717.20
Decreases -25,030,677.95 -9,974,692.34
Acquisition costs 31.12. 1,739,951,217.05 1,654,896,930.09
Accumulated depreciation and impairment charges 1.1. -1,239,191,939.11 -1,199,136,704.03
Opening balance correction -11,613,727.90 0.00
Accumulated depreciation of deductions and transfers 19,861,627.41 8,180,964.08
Depreciation and write-downs for the financial year -47,552,397.38 -48,236,199.16
Accumulated depreciation and impairment on 31.12. -1,278,496,436.98 -1,239,191,939.11
Book value 31.12. 461,454,780.07 415,704,990.98
10. Investments
Shares in Group companies
Acquisitions costs 1.1. 535,378,815.29 535,378,815.29
Increases 14,495,216.02 0.00
Decreases -15,467,840.00 0.00
Transfers between items 0.00 0.00
Acquisitions costs 31.12. 534,406,191.31 535,378,815.29
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. 178,311,058.30 184,224,295.61
Increases 178,492,000.00 0.00
Decreases -11,985,987.46 -5,913,237.31
Acquisitions costs 31.12. 344,817,070.84 178,311,058.30
Total invesments and holdings
Acquisitions costs 1.1. 800,119,282.92 806,032,520.23
Increases 192,987,216.02 0.00
Decreases -27,453,827.46 -5,913,237.31
Acquisitions costs 31.12. 965,652,671.48 800,119,282.92
Receivables from Group companies
Acquisitions costs 1.1. 305,699,997.81 306,190,496.80
Increases 0.00 0.00
Decreases -15,287,137.94 -490,498.99
Acquisitions costs 31.12. 290,412,859.87 305,699,997.81
Other receivables
Acquisitions costs 1.1. 5,002.00 35,222.52
Decreases -5,002.00 -30,220.52
Acquisitions costs 31.12. 0.00 5,002.00
Receivables total
Acquisitions costs 1.1. 305,704,999.81 306,225,719.32
Increases 0.00 0.00
Decreases -15,292,139.94 -520,719.51
Acquisitions costs 31.12. 290,412,859.87 305,704,999.81
Investments total
Acquisitions costs 1.1. 1,105,824,282.73 1,112,258,239.55
Increases 192,987,216.02 0.00
Decreases -42,745,967.40 -6,433,956.82
Acquisitions costs 31.12. 1,256,065,531.35 1,105,824,282.73
149
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
EUR 2022 2021
11. Receivables
Non-current receivables
Receivables from group companies
Loans receivables 35,965,401.28 19,511,624.05
Derivatives 2,913,184.39 0.00
38,878,585.67 19,511,624.05
Total non-current receivables 38,878,585.67 19,511,624.05
Current receivables
Receivables from group companies
Accounts receivable 72,118,873.10 42,204,078.56
Loans receivables 68,312,253.83 278,895,200.81
Other receivables -1,012,541.57 -536,314.82
Prepayments and accrued income 43,229,665.77 30,279,642.37
182,648,251.13 350,842,606.92
Receivables from associated companies
Accounts receivable 98,183.87 289,849.64
98,183.87 289,849.64
Receivables from others
Accounts receivable 156,737,059.46 136,478,748.63
Other receivables 23,337,352.03 33,700,472.97
Prepayments and accrued income 41,637,891.74 7,928,830.79
221,712,303.23 178,108,052.39
Total current receivables 404,458,738.23 529,240,508.95
Accrued income from group companies, current, specification
Derivatives 40,510,486.72 28,920,689.87
Accrued interests 2,719,179.05 1,358,952.50
43,229,665.77 30,279,642.37
Accrued income from others, current, specification
Tax accrual 33,516,269.26 0.00
Accrued personnel costs -40,370.38 41,175.43
Energy and other taxes 2,472,676.17 2,474,456.57
Others 5,689,316.69 5,413,198.79
41,637,891.74 7,928,830.79
Total receivables 443,337,323.90 548,752,133.00
150
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
EUR 2022 2021
12. Shareholders’ equity
Restricted equity
Share capital 1.1.
A-shares 51,788,806.85 51,607,529.31
B-shares 506,092,733.55 506,274,011.09
557,881,540.40 557,881,540.40
Conversion of A shares into B shares
A-shares 0.00 -133,346.95
B-shares 0.00 133,346.95
0.00 0.00
Share capital 31.12.
A-shares 51,788,806.85 51,788,806.85
B-shares 506,092,733.55 506,092,733.55
557,881,540.40 557,881,540.40
Fair value reserve 1.1. 116,464,042.72 134,374,020.36
Changes 143,195,708.71 -17,909,977.64
Fair value reserve 31.12. 259,659,751.43 116,464,042.72
817,541,291.83 674,345,583.12
Unrestricted equity
Reserve for invested unrestricted equity 1.1. 210,639,481.81 267,521,521.17
Return of invested unrestricted equity 0.00 -56,882,039.36
Reserve for invested unrestricted equity 31.12. 210,639,481.81 210,639,481.81
Retained earnings 1.1. 440,647,402.91 372,724,647.06
Acquisition of own shares -7,838,135.78 0.00
Dividends -145,782,413.01 -35,551,274.60
Profit for the financial period 111,620,817.49 103,474,030.45
Retained earnings 31.12. 398,647,671.61 440,647,402.91
609,287,153.42 651,286,884.72
Equity total 31.12 1,426,828,445.25 1,325,632,467.84
Distributable funds
Reserve for invested unrestricted equity 210,639,481.81 210,639,481.81
Profit from previous financial periods 287,026,854.12 337,173,372.46
Profit for the financial period 111,620,817.49 103,474,030.45
Distributable funds 609,287,153.42 651,286,884.72
151
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
EUR 2022 2021
13. Mandatory provisions
Provisions for pension
1.1. 843,168.00 843,168.00
Decrease -104,220.00 0.00
31.12. 738,948.00 843,168.00
Provisions for unemployment pension costs
1.1. 172,714.66 196,086.09
Decrease -172,714.66 -23,371.43
31.12. 0.00 172,714.66
Provisions for environmental obligations
1.1. 2,744,233.69 3,437,741.58
Increase 29,091.00
Decrease -689,228.10 -722,598.89
Cancellation of unused provision -64,096.59 0.00
31.12. 1,990,909.00 2,744,233.69
Total provisions
1.1. 3,760,116.35 4,476,995.67
Increase 0.00 29,091.00
Decrease -966,162.76 -745,970.32
31.12. 2,729,857.00 3,760,116.35
14. Deferred tax assets and liabilities
Deferred tax assets
Mandatory provisions 545,971.40 752,023.27
545,971.40 752,023.27
Deferred tax liabilities
Valuation of Pohjolan Voima Oyj shares at fair value 62,945,573.05 27,247,173.05
Financial instruments 1,969,308.31 1,868,781.12
64,914,881.36 29,115,954.17
Deferred tax assets (+) and liabilities (-), net -64,368,909.96 -28,363,930.90
The deferred tax liability for accrued depreciation in 2022 was EUR 35.2 million (32.9).
15. Non-current liabilities
Liabilities to group companies
Accrued liabilities
Derivatives 0.00 1,691,108.43
0.00 1,691,108.43
Other liabilities
Bonds 249,601,391.02 249,517,437.02
Loans from financial institutions 176,470,588.24 179,316,176.48
Government grants 2,399,500.74 0.00
Deferred tax liabilities 64,368,909.96 28,363,930.89
Advance payments 1,082,432.07 1,082,432.10
493,922,822.03 458,279,976.49
Non-current liabilities total 493,922,822.03 459,971,084.92
152
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Bond and debentures
Bond Nominal value Interest % 2022 2021
2017–2027 250,000,000.00 2.75 249,601,391.02 249,517,437.02
250,000,000.00 249,601,391.02 249,517,437.02
Metsä Board has for Husum investments Finnvera 95% guaranteed loan agreement of EUR 100.0 million, of which remaining EUR 66.8 million was drawn down in May.
Non-current liabilities and repayment
Liabilities to
group companies Bonds
Loans from
financial
institutions
Other
loans Total
2023 0.00 0.00
2024 11,764,705.88 11,764,705.88
2025 111,764,705.88 111,764,705.88
2026 11,764,705.88 11,764,705.88
2027 11,764,705.88 11,764,705.88
2028– 249,601,391.02 29,411,764.72 279,013,155.74
Total 0.00 249,601,391.02 176,470,588.24 0.00 426,071,979.26
EUR 2022 2021
16. Current liabilities
Liabilities from Group companies
Accounts payable 56,142,768.77 63,200,799.16
Accruals and deferred income 32,753,317.50 20,654,800.27
88,896,086.27 83,855,599.43
Liabilities from associated interests
Accounts payable 0.00 704,619.73
0.00 704,619.73
Liabilities from other
Return loans from occupational pension insurance institutions 11,764,705.88 3,908,823.52
Advance payment 3,756,180.63 2,521,860.77
Accounts payable 175,417,664.49 154,123,561.95
Other liabilities 7,699,014.97 19,896,953.06
Accruals and deferred income 65,809,346.27 90,980,579.48
264,446,912.24 271,431,778.78
Total current liabilities 353,342,998.51 355,991,997.94
Accruals and deferred income to group companies, current, specification
Derivatives 30,218,666.25 18,589,770.35
Others 2,534,651.25 2,065,029.92
32,753,317.50 20,654,800.27
Accruals and deferred income, current, external
Personnel expenses 26,666,808.07 27,813,139.51
Accruals of purchases 20,622,684.87 28,729,281.88
Discounts 16,000,244.15 18,065,576.49
Interests 2,275,783.41 2,093,172.00
Taxe s 224,929.41 11,623,372.28
Others 18,896.36 2,656,037.32
65,809,346.27 90,980,579.48
153
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
17. Financial Instruments
Financial derivatives 2022
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 3,147,221.92 0.00 3,147,221.92 0.00 3,147,221.92
Total interest rate derivatives 100,000,000.00 3,147,221.92 0.00 3,147,221.92 0.00 3,147,221.92
Currency forward agreements 1,790,092,903.51 31,341,614.74 25,038,675.12 6,302,939.62 1,378,520.10 4,924,419.66
Currency option agreements 281,267,579.22 2,200,385.60 137,976.17 2,062,409.43 0.00 2,062,409.43
Currency derivates total 2,071,360,482.73 33,542,000.34 25,176,651.29 8,365,349.05 1,378,520.10 6,986,829.09
Oil derivatives 27,484,187.40 538,987.95 3,877,616.12 -3,338,628.17 0.00 -3,338,628.17
Other commodity derivatives 32,698,452.00 6,195,460.90 1,164,398.84 5,031,062.06 2,089,620.00 2,941,442.06
Commodity derivatives 60,182,639.40 6,734,448.85 5,042,014.96 1,692,433.89 2,089,620.00 -397,186.11
Derivatives total 2,231,543,122.13 43,423,671.11 30,218,666.25 13,205,004.86 3,468,140.10 9,736,864.90
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
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
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
agreements within IFRS financial statements. Only the part of currency derivatives designated as hedges of accounts receivables and accounts payables is not directed to hedge ac
-
counting. Interest rate derivatives are interest rate swaps maturing in 1–3 years and entered into to hedge the floating rate interest payments. Currency derivatives contracts concluded
to hedge currency cash flows mature fully during 2022. Commodity derivatives are natural gas forwards and fuel oil forwards directed to hedge the cash flows arising from purchases of
these commodities. Commodity forwards mature fully during 2023. A more detailed description of financial risk management and the principles applied to derivative contracts is includ
-
ed in note 5.6 and 5.7 of the concolidated Group accounts.
154
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
The fair value hierarchy of financial assets and liabilities 2022
EUR Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other shares and holdings 344,817,070.84 344,817,070.84
Derivative financial assets 6,734,448.85 36,689,222.26 43,423,671.11
Financial liabilities measured at fair value
Derivative financial liabilities 5,042,014.96 25,176,651.15 30,218,666.11
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 26,887,254.15 2,033,435.72 28,920,689.87
Financial liabilities measured at fair value
Derivative financial liabilities 82,476.63 20,198,402.15 20,280,878.78
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 2022 2021
For own and for affiliated companies
Guarantees and counter-indemnities 2,061,906.00 2,045,966.00
For affiliated companies
Other commitments 3,759,384.00 0.00
Leasing commitments
Payments due in following 12 months 2,650,424.63 1,939,543.43
Payments due later than 1 year 5,180,159.98 4,913,625.50
Total
Guarantees 2,061,906.00 2,045,966.00
Other commitments 3,759,384.00 0.00
Leasing commitments 7,830,584.61 6,853,168.93
Total commitments 13,651,874.61 8,899,134.93
Investment commitments
Payments due in following 12 months 4,250,625.57 5,793,673.55
Payments due later than 1 year 1,595,315.50 1,856,148.10
5,845,941.07 7,649,821.65
19. Shares and holdings
Shares and holdings are presented in Note 7.2. of consolidated financial statements.
155
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
The Board’s proposal to the Annual General Meeting
for the distribution of funds
The distributable funds of the company are EUR 609,287,153.42 of which retained earnings constitute
EUR 287,026,854.12 and profit for the period EUR 111,620,817.49.
The Board of Directors proposes the following to the Annual General Meeting regarding
the distribution of funds:
Dividend of EUR 0.58 per share be paid, or in total 205,617,392.68
To be left in the unrestricted shareholders' equity 403,669,760.74
Distributable funds of the company 609,287,153.42
The Board of Directors proposes that the dividend will be paid on 5 April, 2023.
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 8 February 2023
Ilkka Hämälä Jussi Linnaranta Hannu Anttila
Raija-Leena Hankonen-Nybom Erja Hyrsky Mari Kiviniemi
Jukka Moisio Timo Saukkonen Veli Sundbäck
Mika Joukio
CEO
156
AUDITOR’S REPORT
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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,
2022. The financial statements comprise the consolidated balance sheet,
statement 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 sufficient 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 effect 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
Auditor’s Report
157
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
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 1,126 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 163 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.
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 507 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 refer-
ence 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 453 million, accounting for 13
percent of the consolidated balance sheet. In addition, the Group has
off-balance sheet committed credit facility agreements amounting to
EUR 200 million.
The Group hedges financial risks with interest rate and foreign
currency derivatives and their nominal values amounted to EUR 2,171
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 meas-
urement 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 effec-
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.
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
thereon, and we do not provide a separate opinion on these matters. The
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 prepa-
ration 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
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 sufficient 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 effectiveness 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 sufficient 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.
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SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
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 11 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 9, 2023
KPMG Oy Ab
Kirsi Jantunen
Authorized Public Accountant, KHT
160
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SHARES AND SHAREHOLDERS
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Shares and shareholders
Metsä Board’s shares
Metsä Board’s shares are listed on the Nasdaq
Helsinki. The share capital of the company on
31 December 2022 was EUR 557,881,540.40.
Metsä Board has two series of shares. At the
end of 2022, 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 Gen-
eral Meeting of Shareholders, and each series B
share entitles the holder to one (1) vote. 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 a
conversion to the company. During the review
period, there were no share conversions.
On 27 October 2022, the Board of Directors of
Metsä Board decided to launch a share buyback
of company’s own shares. The acquisition of the
company’s own shares started on 28 October
2022 and ended on 11 November 2022. During
this period, Metsä Board acquired 1,000,000
B shares for an average price of EUR 7.8225
per share. The own shares were acquired for
payment of the Board fees or to implement the
company’s share-based incentive systems.
On 30 December 2022, Metsäliitto Cooper-
ative announced that its ownership in Metsä
Board had exceeded the 50% threshold, and
that its holding in Metsä Board was 50.16% of
shares and 68.24% of votes. As Metsä Board is
an entity controlled by Metsäliitto Cooperative,
Metsäliitto Cooperative’s ownership also
includes the 1,000,000 own shares held by
Metsä Board.
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 2022 32,802,175 322,710,571
Trading on the Nasdaq Helsinki in 2022 (2021)
Metsä Board’s A share Metsä Board’s B share
Closing price on 31 December, EUR 10.15 (9.38) 8.77 (8.61)
Lowest price, EUR 7.66 (8.50) 7.09 (7.50)
Highest price, EUR 10.50 (11.00) 10.49 (11.01)
Average price, EUR 9.48 (9.48) 8.73 (9.14)
Average daily trading volume, no. of shares 3,357 (7,153 ) 347,165 (389,117)
Total trading volume, no. of shares 849,346 (1,802,589) 87,832,699 (98,057,575)
Market capitalisation, EUR million 333 (308) 2,829 (2,779)
Share price development 2022
EUR Million shares
Metsä Board A
Metsä Board B
Trading volume
Source: Euroland https://www.metsagroup.com/metsaboard/investors/share-tools/share-monitor/
12.0
11.0
10.0
9.0
8.0
7.0
6.0
1.8
1.5
1.2
0.9
0.6
0.3
0.0
Shares and shareholders
161
SUSTAINABILITY
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BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Major shareholders, 31 December 2022
1) 2)
A series B series Total shares Votes
Shareholders No. of shares No. of shares No. of shares % %
1 Metsäliitto Cooperative 25,767,605 150,986,697 176,754,302 49.72 68.08
2 Varma Mutual 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 9,597,000 10,847,000 3.05 3.53
4 Etola Erkki Olavi 0 6,000,000 6,000,000 1.69 0.61
5 Elo Mutual Pension Insurance Company 0 4,064,000 4,064,000 1.14 0.42
6 The State Pension Fund 0 3,400,000 3,400,000 0.96 0.35
7 Evli Finnish Small Cap Fund 0 1,503,000 1,503,000 0.42 0.15
8 Danske Invest Finnish Equity Fund 0 1,322,643 1,322,643 0.37 0.14
9 OP-Finland Small Firms Fund 0 1,218,629 1,218,629 0.34 0.12
10 OP-Finland 0 1,212,887 1,212,887 0.34 0.12
11 OP-Henkivakuutus Ltd. 0 1,088,833 1,088,833 0.31 0.11
12 Etola Markus Eeriki 0 1,000,000 1,000,000 0.28 0.1
13 Metsä Board Oyj 0 1,000,000 1,000,000 0.28 0.1
14 Säästöpankki Small Cap Mutual Fund 0 951,643 951,643 0.27 0.1
15 Etola Mikael Kristian 0 870,000 870,000 0.24 0.09
16 Säästöpankki Kotimaa Mutual Fund 0 857,600 857,600 0.24 0.09
17 Aktia Capital Mutual Fund 0 854,841 854,841 0.24 0.09
18 Maa- ja Metsätaloustuottajain Keskusliitto MTK ry 576,551 201,852 778,403 0.22 1.2
19 Nordea Pro Finland Fund 0 649,977 649,977 0.18 0.07
20 Seppälä Tommi Kalervo 0 600,000 600,000 0.17 0.06
1)
Shareholders in the book entry system
2)
Ownership information is as recorded in the book-entry account, i.e. taking into account the settlement date (T+2)
Supplied by Euroland https://www.metsagroup.com/metsaboard/investors/share-information/major-shareholders/
Shares
A share B share
Number of shares
Number of
Shareholders %
Number of
shares %
Number of
Shareholders %
Number of
shares %
1–10 2,042 20.43 11,015 0.03 4,209 7.4 0 26,337 0.01
11–100 3,994 39.96 201,075 0.61 16,185 28.45 847,301 0.26
101–1,000 3,428 34.30 1,233,583 3.76 25,878 45.49 10,202,708 3.16
1,001–10,000 507 5.07 1,162,199 3.54 9,625 16.92 26,636,607 8.25
10,001–100,000 20 0.20 396,603 1.21 894 1.57 20,580,452 6.38
100,001– 4 0.04 29,797,700 90.84 96 0.17 264,417,166 81.94
Total 9,995 100.00 32,802,175 100.00 56,887 100.00 322,710,571 100.00
Split of shareholdings and voting rights, 31 December 2022
SPLIT OF
SHAREHOLDINGS
%
SPLIT OF
VOTING RIGHTS
%
Metsäliitto Cooperative .... 50
Finnish institutions .............. 17
Finnish private investors ....19
Foreign owners* .................. 14
Metsäliitto Cooperative ..... 68
Finnish institutions .............. 15
Finnish private investors .....12
Foreign owners* ....................5
* includes nominee registered * includes nominee registered
162
60
50
40
30
20
10
0
18 19 20 21 22 18 19 20 21 22
SHARES AND SHAREHOLDERS
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Shareholdings of the members of the Board of Directors
and CEO on 31 December 2022
Holding
Ilkka Hämälä Chair of the Board of Directors 287,349 B shares
Jussi Linnaranta Vice Chair of the Board of Directors 29,801 B shares
Hannu Anttila Member of the Board of Directors 147,575 B shares
Raija-Leena Hankonen Member of the Board of Directors 6,956 B shares
Erja Hyrsky Member of the Board of Directors 9,456 B shares
Mari Kiviniemi Member of the Board of Directors 3,633 B shares
Jukka Moisio Member of the Board of Directors 12,231 B shares
Timo Saukkonen Member of the Board of Directors 16,831 B shares
Veli Sundbäck Member of the Board of Directors 74,908 B shares
Mika Joukio CEO 352,500 B shares
Share holdings of the Corporate Management Team members are presented on pages 178–179.
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 0.58 per share be distributed
for the 2022 financial period, corresponding to
50% of the earnings per share in 2022.
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 authorisa-
tion 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 30 June 2023. The authorisation was
fully unused on 31 December 2022.
Impact of change in control
Some of Metsä Board’s shareholder agreements
concerning resource and associated companies
include provisions under which Metsä Board
must offer 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 offer 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 offer its shares in Metsä Fibre Oy for sale.
DIVIDEND
EUR %
DIVIDEND /
NET RESULT
%
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
Dividend/share, EUR
Dividend yield, %
163
SUSTAINABILITY
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BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
Price development and number of shares
2022 2021 2020 2019 2018
Adjusted share prices, EUR
A share high 10.50 11.00 8.80 7.98 10.10
low 7.6 6 8.50 4.80 5.46 6.00
closing 10.15 9.38 8.64 6.14 6.14
average 9.48 9.48 6.88 6.56 8.36
B share high 10.49 11.01 8.79 6.65 10.30
low 7.0 9 7.50 4.47 3.86 4.98
closing 8.77 8.61 8.62 6.00 5.12
average 8.73 9.14 6.12 5.26 7.95
Trading volume at Nasdaq Helsinki, number of shares
A share 849,346 1,802,589 1,758,683 694,519 2,227,788
% of total number of shares 2.6 5.5 5.3 2.1 6.3
B share 87,832,699 98,057,575 155,232,570 220,170,829 180,834,626
% of average number of shares 27. 2 30.4 48.1 68.3 56.5
Number of shares at year end
A share 32,802,175 32,802,175 32,887,151 33,087,647 35,358,794
B share 322,710,571 322,710,571 322,625,595 322,425,099 320,153,952
Total 355,512,746 355,512,746 355,512,746 355,512,746 355,512,746
Number of shares at year end 355,359,331 355,512,746 355,512,746 355,512,746 355,512,746
Market capitalisation at year end, EUR million 3,161.5 3,086.2 3,065.2 2,136.1 1,856.3
Number of shareholders, B shares 56,887 54,904 48,165 50,420 45,341
Key figures
EUR million 2022 2021 2020 2019 2018
Earnings per share
Result before tax 524.9 365.8 212.3 165.6 224.2
– Income taxes -63.5 -51.8 -42.2 -21.0 -20.8
= Result for the period 461.4 314.0 170.1 144.6 203.4
– Average number of shares 355,359,331 355,512,746 355,512,746 355,512,746 355,512,746
Earnings per share, basic and diluted, EUR 1.15 0.82 0.48 0.41 0.57
Shareholders’ equity per share, EUR 5.86 4.78 3.89 3.76 3.72
Dividend per share, EUR 0.58
1)
0.41 0.26 0.24 0.29
Payout ratio, % 50.4 49.9 54.3 58.5 50.9
Metsä Board shares have no nominal value.
Dividend yield, % of closing price
A share 5.7
1)
4.4 3.0 3.9 4.7
B share 6.6
1)
4.8 3.0 4.0 5.7
Price/earning ratio (P/E ratio)
A share 8.8 11.4 18.1 15.0 10.8
B share 7.6 10.5 18.0 14.6 9.0
Price to book value (P/BV), %
A share 173.2 196.2 222.0 163.3 165.1
B share 149.6 180.1 221.5 159.6 1 37.6
1)
The Board of Directors has proposed that a dividend of EUR 0.58 per share be distributed for the 2022 financial year.
164
KEY FIGURES
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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
associated 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,
amortisation 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 differences
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.
Key figures
165
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
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 efficiency 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 affecting 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 affecting 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
affecting 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 effect arising from items and transactions outside ordinary course of
business.
Reconciliation of items affecting comparability
EUR million 2022 2021
Operating result 531.5 375.9
Depreciation, amortisation and impairment charges 83.1 90.2
EBITDA 614.6 466.0
Items affecting comparability
Other operating income -28.6 -12.2
Employee costs 4.6
Share of results of associated companies 11.6 8,7
Other operating expense 0.6 9,7
Total -11.7 6,2
EBITDA, comparable 602.8 472,2
Depreciation, amortisation and impairment charges -83.1 -90.2
Items affecting comparability
Impairment charges and reversals of impairments 0.9 4.6
Operating result, comparable 520.7 386.6
Share of results of associated companies and joint
ventures
0.0
Net financial items -6.6 -10.0
Items affecting comparability
Financial items 0.5
Result before income tax, comparable 514.6 376.6
Income taxes -63.5 -51.8
Income taxes related to items affecting comparability 0.3 1.9
Result for the period, comparable 451.4 326.6
"+" sign items = expense affecting comparability
"-" sign items = income affecting comparability
Items affecting operating result comparability in 2022 totalled EUR 10.8
million. They comprised EUR 19.2 million from the sale of the share capital
in Hangö Steve-doring Ab to Euroports Finland Oy; a EUR 6.5 million capital
gain from the sale of a land area unrelated to business operations; a EUR
-5.5 million restructuring of customer service and supply chain manage-
ment; a EUR 2.8 million valuation gain related to the divestment of shares;
a EUR -1.0 million impairment recognised for the Russian operations; a
EUR -10.5 million impairment recognised for the Russian operations of the
associated company Metsä Fibre; a EUR -1.2 million impairment recognised
in the assets of Metsä Fibre’s Kyrö sawmill; and other items EUR 0.3 million.
Items affecting comparability during 2021 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 affecting comparability are reported in the taxes
of previous financial years based on the tax audit of the Italian subsidiary.
166
KEY FIGURES
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Quarterly data
Full year Quarterly
EUR million 2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Sales 2,479.6 2,084.1 599.8 647.3 650.5 582.0 518.5 516.1 555.8 493.7
2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Operating result, comparable 520.7 386.6 100.8 152.5 145.9 121.5 91.3 104.0 102.5 88.8
2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Operating result 531.5 375.9 94.7 153.4 142.6 140.7 90.8 99.4 103.7 82.0
Share of profit from associated companies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Exchange gains/losses -5.0 -2.3 -1.8 -0.5 -2.3 -0.4 -0.6 -0.3 -1.1 -0.4
Other financial income and expenses -1.7 -7.7 0.5 -0.6 -0.3 -1.2 0.6 -2.8 -2.8 -2.7
Result before tax 524.9 365.8 93.4 152.4 140.0 139.1 90.7 96.4 99.8 78.9
2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Operating result, % of sales 21.4 18.0 15.8 23.7 21.9 24.2 17.5 19.3 18.6 16.6
Full year Quarterly
1,000 t 2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Deliveries
Folding boxboard 1,208 1,296 285 308 308 307 300 319 348 329
White kraftliner 609 627 133 146 164 166 143 156 166 162
Metsä Fibre’s pulp
1)
503 496 105 124 152 122 120 104 156 116
Metsä Board’s pulp 717 762 162 177 192 187 203 178 185 196
2022 2021 IV/2022 III/2022 II/2022 I/2022 IV/2021 III/2021 II/2021 I/2021
Production
Folding boxboard 1,272 1,272 264 337 336 335 295 317 318 342
White kraftliner 605 634 133 147 164 162 155 155 160 164
Metsä Fibre’s pulp
1)
1,409 1,362 319 360 362 368 335 335 329 362
Metsä Board’s pulp 731 747 190 190 171 181 183 184 194 186
1)
Corresponds to Metsä Board’s ownership of 24.9 per cent in Metsä Fibre.
Metsä Board’s business generates taxes to finance public society. In
addition to taxes and tax-like payments we pay as a taxpayer our value
chain generates various other taxes.
Considering all directly and indirectly generated taxes and tax-like pay-
ments arising from Metsä Board’s operations, our economic contribution
to surrounding society is material.
Metsä Board is committed to follow international transfer pricing guide-
lines and local tax laws and regulations in all of its operating countries.
Majority of Metsä Board’s management, production and other functions
are located in Finland, thus most of the corporate taxes are paid in Finland.
Based on our Board Tax Policy Metsä Board’s business models and
structures shall always be based on business reasons and real substance.
Taxes
We refrain from artificial means to decrease our tax cost.
Metsä Board’s cooperation with tax authorities is transparent and active.
In Finland Metsä Board participates in enhanced cooperation with Finnish
Tax Administration.
Tax issues are managed by Metsä Board’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.
Taxes to be paid
Finland Sweden Other countries Total
EUR million 2022 2021 2022 2021 2022 2021 2022 2021
Direct taxes on Corporate income 5.7 25.4 26.7 20.8 4.5 5.6 36.9 51.8
Payroll related taxes and contributions 29.4 29.5 14.5 14.7 4.1 3.5 47.9 4 7.6
Operational taxes 4.1 4.1 6.2 4.8 0.0 0.0 10.4 8.9
Other taxes 0.6 0.3 0.0 0.0 0.2 0.2 0.8 0.5
Total 39.8 59.4 47. 5 40.2 8.7 9.2 96.0 108.8
167
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION GOVERNANCE
FINANCIAL
DEVELOPMENT
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Income statement, eur million
Sales 2,479 2,084 1,890 1,932 1,944 1,849 1,720 2,008 2,008 2,019
- change, % 19.0 10.3 -2.2 -0.1 5.2 7.5 -14.3 -0.0 -0.5 -4.2
EBITDA, comparable 603 472 316 279 344 289 231 283 236 208
- % of sales 24.3 22.7 16.7 14.4 1 7.7 15.6 13.4 14.1 11.8 10.3
Operating result 532 376 227 181 246 207 132 199 117 114
Operating result, comparable 521 387 221 184 252 193 137 180 137 104
- % of sales 21.0 18.6 11.7 9.5 13.0 10.5 8.0 9.0 6.8 5.2
Result for the period 461 314 170 145 203 150 90 137 69 64
Balance sheet, eur million
Balance sheet total 3,403 2,922 2,302 2,270 2,284 2,226 2,194 2,220 2,149 2,097
Equity attributable to shareholders of parent company 2,082 1,699 1,384 1,338 1,323 1,167 1,052 1,029 841 850
Interest bearing net liabilities -94 -78 236 308 335 358 464 333 427 597
Key figures per share and distribution equity owners
of the parent company
Dividend and equity distribution, EUR million 205.6
1)
145.8 92.4 85.3 103.1 74.7 67. 5 60.4 39.4 29.5
Dividend and equity distribution per share, EUR 0.58
1)
0.41 0.26 0.24 0.29 0.21 0.19 0.17 0.12 0.09
Payout ratio including equity distribution, % 50.4
1)
49.9 54.31 58.5 50.9 50.0 76.0 43.6 57. 1 47.4
Dividend yield, % 6.6
1)
4.8 3.0 4.0 5.7 2.9 2.8 2.5 2.7 2.9
Key figures – profitability
Return on capital employed (ROCE), comparable, % 20.9 18.7 12.2 10.4 14.4 11.2 8.1 11.3 9.1 6.4
Return on equity, comparable, % 22.0 20.2 12.1 11.0 16.7 12.4 9.0 12.9 10.4 6.5
Key figures – balance sheet and financing
Interest bearing net liabilities / EBITDA, comparable 0.2 -0.2 0.7 1.1 1.0 1.2 2.0 1.2 1.8 2.9
Equity ratio, % 66.4 63.3 60.3 59.1 58.1 52.6 48.2 46.5 39.2 40.7
Net gearing, % 4 -4 17 23 25 31 44 32 51 70
Net cash flow from operations, EUR million 232 330 308 201 151 236 77 247 198 82
Net interest expense, EUR million 5 8 12 14 19 36 26 26 42 60
Interest cover 50.7 42.7 2 7.6 15.4 9.0 7.6 4.0 10.4 5.7 2.4
Other key figures
Total investments, EUR million 304 220 166 99 70 65 162 178 44 67
Depreciation, amortisation and impairment losses, EUR
million
83 90 95 114 92 92 102 104 126 101
R & D expenditure, EUR million
2)
6 6 9 9 6 6 6 8 6 5
- % of sales 0.2 0.3 0.5 0.4 0.3 0.3 0.4 0.4 0.3 0.3
Personnel, average 2,352 2,461 2,455 2,433 2,435 2,456 2,588 2,851 3,200 3,245
- in Finland 1,340 1,490 1,486 1,458 1,433 1,441 1,552 1,538 1,542 1,560
Paperboard deliveries, 1,000 t 1,817 1,922 1,810 1,791 1,830 1,803 1,568 1,404 1,256 1,141
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 0.58 per share be distributed for the 2022 financial year. Dividend yield for 2022 has been calculated including the proposed equity
distribution and using the B share closing price as of 31 December 2022.
2)
The reporting of research and development expenses has been clarified and the figures for 2019–2022 are comparable.
Calculation of key ratios is presented on page 165.
Ten years in figures
168
CORPORATE GOVERNANCE STATEMENT
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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 2020 is
available on the website of the Finnish Securities
Market Association at https://cgfinland.fi/en/
corporate-governance-code/.
Metsä Board is a Finnish public limited
company whose A and B series shares are
publicly traded on the official list of NASDAQ
Helsinki Ltd. (Helsinki Stock Exchange). In its
administration and governance Metsä Board
complies with Finnish laws, especially the
Limited Liability Companies Act, the Company’s
Articles of Association, and rules and regulations
issued under the law, including those issued by
the Financial Supervisory Authority that apply
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.
Compliance with the Finnish
Corporate Governance Code
As a Finnish listed company, Metsä Board
complies with the Finnish Corporate Governance
Code, which became effective on 1 January
2020. Metsä Board does not currently depart
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.
CORPORATE GOVERNANCE IN METSÄ BOARD
FINANCIAL REPORTING
Internal auditing | Auditing
SHAREHOLDERS’ MEETING
BOARD OF DIRECTORS
BOARD COMMITTEES
Audit
Committee
Nomination and HR
Committee
CEO
Corporate Management Team
■ Corporate governance
in Metsä Board
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 the
management team (including the CEO) are not
members of the Board of Directors. The tasks
and responsibilities of the different corporate
bodies are determined in accordance with the
Finnish Limited Liability Companies Act.
Metsä Board’s organisation is based on the
following key functions: sales and supply chain,
production, technology, finance, business
development and human resources. The heads
of functions are members 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 separate arm’s
length service agreements.
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 General Meeting notice. Accord-
ing to the Limited Liability Companies Act, the
General Meeting decides on matters such as:
• amendments to the Articles of Association;
• adoption of the financial statements;
• profit distribution;
• mergers and demergers;
• acquisition and disposal of own shares;
• appointment of the members of the Board,
and their and the Board committee mem-
bers’ remuneration; and
• appointment of the auditor and the auditor’s
remuneration.
Shareholders are entitled to have a matter
pertaining to the General Meeting addressed by
the General Meeting, provided that they submit
a written request well in advance so that the
matter can be included in the meeting notice.
The Company has specified 15 January as the
deadline. In addition, shareholders have the right
Corporate governance statement
169
SUSTAINABILITY
REPORT
BUSINESS OPERATIONS
AND VALUE CREATION
FINANCIAL
DEVELOPMENT
GOVERNANCE
to request information about the items on the
agenda of the General Meeting. To be entitled to
participate in a General Meeting, a shareholder
must be included in the register of shareholders
eight working days before the General Meeting.
An Annual General Meeting takes place each
year in June at the latest. Notice of 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
effect 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
authority of the Board covers matters that are
far-reaching, 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 the Company’s
strategy, major investments, organisation
structure and significant financing matters. The
Board supervises the appropriate organisation
of the Company’s operations. It also ensures
that accounting and financial control, financial
reporting and risk management have been
organised appropriately.
The Board has written rules of procedure for
its operations. In accordance with the rules of
procedure, the Board’s tasks include:
• monitoring compliance with the Company’s
Articles of Association;
• appointing and discharging the CEO and
ensuring that the CEO takes care of the
Company’s day-to-day administration in
accordance with the regulations and guide-
lines issued by the Board;
• establishing necessary committees, appoint-
ing their members and approving their rules
of procedure;
• addressing and approving the Company’s
values, the long-term plan and corporate
strategy;
• accepting the annual operational plan and
budget;
• supervising the organisation of the Compa-
ny’s accounting, asset management, risk
control and financial reporting;
• 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 authorisations 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 business policies, orders and
guidelines, including the insider rules;
• deciding on the incentive schemes and their
criteria and terms and conditions;
• approving and publishing the financial state-
ments bulletin as well as interim and half-year
financial reports; and
• publishing or authorising the CEO to
publish all inside information likely to have
a significant effect on the value of the
Company’s shares, or which otherwise must
be made public under the Finnish Securities
Markets Act or the Rules of the Helsinki Stock
Exchange.
The Board’s rules of procedure are available
in their entirety on the Company’s website at
https://www.metsagroup.com/globalassets/
metsa-board/documents/investors/
corporate-governance/en/general/metsa-
board-board-working-order.pdf. The Board
can delegate matters falling within its general
competence to the CEO and correspondingly
take charge of decision making in a task that falls
within the CEO’s general competence.
On an annual basis, the Board assesses its
own operation and the Company’s corporate
governance principles and decides on any
necessary changes to them.
The Board convenes on a regular basis. In the
financial year 2022, the Board held a total of 13
meetings. The Board members’ attendance rate
was 97% (99% in 2021 and 100% in 2020).
Each member’s attendance in the meetings
of the Board and its committees
Member of the Board of Directors
Number
of Board
meetings
Attendance
rate (%)
Number of
committee
meetings
Attendance
rate (%)
Ilkka Hämälä
Chair of the Board and the Nomination
and HR Committee
13/13 100 4/4 100
Jussi Linnaranta
Deputy Chair of the Board and Member of
the Nomination and HR Committee
13/13 100 4/4 100
Hannu Anttila
Member of the Board and the Audit Committee
13/13 100 4/4 100
Raija-Leena Hankonen-Nybom
Chair of the Audit Committee and Member of
the Board
12/13 92 4/4 100
Erja Hyrsky
Member of the Board and the Nomination
and HR Committee
13/13 100 4/4 100
Mari Kiviniemi (as of 24 March 2022)
Member of the Board and the Audit Committee
10/10 100 3/3 100
Kirsi Komi (until 24 March 2022)
Member of the Board and the Audit Committee
2/3 67 1/1 100
Jukka Moisio
Member of the Board and the Audit Committee
12/13 92 4/4 100
Timo Saukkonen
Member of the Board and the Nomination
and HR Committee
13/13 100 4/4 100
Veli Sundbäck
Member of the Board and the Nomination
and HR Committee
13/13 100 4/4 100
170
CORPORATE GOVERNANCE STATEMENT
|
METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Composition, diversity
and independence of the
Board of Directors
The composition and number of members of the
Board of Directors must facilitate the effective
fulfilment of the Board’s tasks. The composition
of the Board of Directors takes into account
the Company’s development stage, ownership
structure, the special requirements of the indus-
try and the needs of the Company’s operations.
The goal is to set up a diverse Board, while also
ensuring that each Board member has the
necessary qualifications and time to perform the
duties assigned to them. The Board of Directors
has both women and men as members.
The Board of Directors has adopted diversity
principles, which are available on the Company’s
website (https://www.metsagroup.com/
globalassets/metsa-board/documents/
investors/corporate-governance/en/general/
metsa-board-board-diversity-principles.
pdf). The Board recognises the benefits that a
diverse and broad Board composition can offer
the Company and its shareholders. Diversity
supports the Board’s open work atmosphere,
independent role and decision making. One of
the Board’s key tasks is to support and challenge
the operative management from various per-
spectives proactively and consistently. For the
Board and its committees to successfully handle
their duties, they require a diverse composition
and varied competence and experience. Atten-
tion must also be paid to the personal qualities
of individual members. Diversity must also
support the Company’s development stages and
correspond to the future development needs of
the Company and its business.
In addition to industry knowledge, Metsä
Board has determined experience from different
fields of business and the international business
scene are to be key factors in terms of the Board
of Directors’ diversity. In addition, varying edu-
cational backgrounds, management experience
from different business sectors and a varying
age and gender structure have been identified as
factors promoting diversity. Metsä Board’s goal
is to have both women and men on the Board.
The Board evaluates the achievement of diver-
sity targets as part of its own and its Nomination
and HR Committee’s normal operations.
According to the Articles of Association,
a minimum of five and a maximum of ten
ordinary members are 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 Deputy
Chair from among its members. The 2022
Annual General Meeting appointed the following
persons as members of the Board of Directors:
• Hannu Anttila, born in 1955, independent
of the Company and of its significant share-
holders, M.Sc. (Econ.), member since 2018,
147,575 B shares
• Raija-Leena Hankonen-Nybom, born in
1960, independent of the Company and of its
significant shareholders, M.Sc. (Econ.), APA,
member since 2021, 6,956 B shares
• Erja Hyrsky, born in 1979, independent of the
Company and of its significant shareholders,
M.Sc. (Econ.), MBA, member since 2021,
9,456 B shares
• Ilkka Hämälä, born in 1961, not independent
of the company or its significant shareholder,
Chair, M.Sc. (Eng.), member since 2018,
287,349 B shares
• Mari Kiviniemi, born in 1968, independent of
the Company and of its significant sharehold-
ers, M.Soc.Sc. (Econ.), member since 2022,
3,633 B shares
• Jussi Linnaranta, born in 1972, independent
of the Company, M.Sc. (Agr.), member since
2017, 29,801 B shares
• Jukka Moisio, born in 1961, independent of
the Company and of its significant sharehold-
ers, M.Sc. (Econ.), MBA, member since 2020,
12,231 B shares
• Timo Saukkonen, born in 1963, independent
of the Company, M.Sc. (For.), member since
2020, 16,831 B shares
• Veli Sundbäck, born in 1946, independent
of the Company and of its significant share-
holders, L.L.M., member since 2013, 74,908
B shares
These ownerships include shares possibly
owned by controlled entities on 31 December
2022.
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, Ilkka Hämälä, the
Chair of the Board, is dependent of both
the Company and its majority shareholder,
Metsäliitto Cooperative. Jussi Linnaranta and
Timo Saukkonen are members of the Board
of Metsäliitto Cooperative and consequently
dependent on a significant shareholder. Further
information about the Board members is
available on the Company’s website at https://
www.metsagroup.com/metsaboard/investors/
corporate-governance/board-of-directors/.
Board Committees
If required, the Board can decide to establish
committees to provide assistance to and pre-
pare matters for which the Board is responsible.
The Board has appointed an Audit Committee
and a Nomination and HR 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 and its committees can also consult
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 HR
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,
financial statements and other financial informa-
tion and non-financial information published by
the Company are correct, balanced, transparent
and clear. The Audit Committee regularly
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 efficiency
and scope of internal auditing, the Company’s
risk management, key risk areas and compliance
with applicable laws and regulations. It assesses
the independence of the auditor and audit firm
and 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 audits.
The Audit Committee consists of four Board
members. Since the 2022 Annual General
Meeting, Raija-Leena Hankonen-Nybom has
been Chair of the Audit Committee with Hannu
Anttila, Mari Kiviniemi and Jukka Moisio as
members. All the members are independent of
the Company and its significant shareholders.
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The committee members must have
adequate expertise in accounting and financial
statement policies. The Audit Committee
convenes regularly, at least four times a year. In
connection with the meetings, the Committee
hears the Company’s auditor. The Chair of
the Audit Committee provides the Board
with a report on each meeting. The tasks and
responsibilities are specified in the Committee’s
rules of procedure approved by the Board of
Directors (https://www.metsagroup.com/
globalassets/metsa-board/documents/
investors/corporate-governance/en/general/
metsa-board-audit-committee-charter.pdf).
At the invitation of the Committee, the
Company’s auditor, CEO and CFO, as well as
other management representatives and external
advisors, are represented at the Audit Commit-
tee’s meetings if required.
The Audit Committee convened four times in
2022. All the members attended all the meetings
(attendance rate: 100% in 2021 and 95% in
2020).
Audit Committee member Number of meetings Attendance rate (%)
Raija-Leena Hankonen-Nybom (Chair) 4/4 100
Hannu Anttila 4/4 100
Mari Kiviniemi 4/4 100
Jukka Moisio 4/4 100
Nomination and HR Committee
In spring of 2022, the Nomination and Remu-
neration Committee changed its name to the
Nominations and HR Committee. According
to the Comittee’s view, the new name better
describes the Committee’s work and the issues
on the agenda. The task of the Nomination
and HR Committee is to assist the Board of
Directors in matters related to the appointment
and remuneration of the Company’s CEO,
any Deputy CEO and senior management,
and prepare matters related to the incentive
schemes for management and employees. In
addition, the Committee prepares for the Annual
General Meeting a proposal on the number of
Board members, the Board composition and the
remuneration for Board members. The Commit-
tee also recommends, prepares and presents
for the Board’s approval the appointment of
the CEO (and any Deputy CEO), as well as their
salary and compensation. The Committee also
prepares and provides recommendations to the
Board and the CEO concerning matters related
to the remuneration and incentive schemes of
management and employees.
The Committee consists of five Board mem-
bers. It convenes on a regular basis, at least four
times a year. The Chair of the Committee pre-
sents the Committee’s proposals to the Board.
The tasks and responsibilities of the Nomination
and HR Committee are specified in the
Committee’s rules of procedure approved by the
Board of Directors (https://www.metsagroup.
com/globalassets/metsa-board/documents/
investors/corporate-governance/en/general/
metsa-board-nomination-and-hr-commit-
tee-charter.pdf).
Since the 2022 Annual General Meeting,
Ilkka Hämälä has been Chair of the Nomination
and HR Committee with Erja Hyrsky, Jussi
Linnaranta, Timo Saukkonen and Veli Sundbäck
as members.
The Nomination and HR Committee convened
four times in 2022. All the members attended
all the meetings (100% attendance rate also in
2021 and 2020).
Members of the Nomination and HR Committee Number of meetings Attendance rate (%)
Ilkka Hämälä (Chair) 4/4 100
Erja Hyrsky 4/4 100
Jussi Linnaranta 4/4 100
Timo Saukkonen 4/4 100
Veli Sundbäck 4/4 100
Chief Executive Officer
Chief Executive Officer Mika Joukio (born
in 1964), M.Sc. (Eng.), MBA, is responsible
for the daily management of the Company’s
administration in accordance with the guidelines
and instructions provided by the Board. The
CEO is also responsible for ensuring that the
Company’s accounting has been carried out
according to applicable legislation 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 different functions.
The CEO has a written CEO contract approved
by the Board. The Board monitors the CEO’s
performance and provides a performance
evaluation once a year. The CEO is covered by
the Employees Pensions Act, which provides
pension security based on the period of service
and earned income as provided in the Act. In
the Finnish earnings-related pension system,
basic salary, remuneration and taxable fringe
benefits are included in earned income,
whereas income from options and share-based
incentive schemes for management are not. The
Company has commissioned an extra pension
insurance policy for the CEO, entitling the CEO
to retire at the age of 62. The maximum level of
his pension is 60% of the total salary under the
Employees Pensions Act, calculated on the basis
of the five-year period preceding retirement.
The Board appoints and discharges the CEO.
The CEO may be discharged at the Board of
Directors’ decision without a separate reason.
The CEO can also resign from his assignment.
The mutual period of notice is six months.
However, the Board may decide to discharge
the CEO without a period of notice. If the Board
terminates the CEO’s contract, the CEO is
entitled to a discharge compensation equal to
his 12-month salary.
Deputy to the CEO
At its discretion, the Board can 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 their duties. For now, 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
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
(Technology), Markku Leskelä (Development),
Jussi Noponen (Sales and Supply Chain), Harri
Pihlajaniemi (Production), Henri Sederholm
(Finance) and Camilla Wikström (Human
Resources), who all report to the CEO.
Each of the members of the Corporate Man-
agement Team have a written employment or
service contract. With the exception of the CEO,
they do not have extraordinary pension arrange-
ments apart from the statutory pension cover.
The term of notice of Corporate Management
team members is six months on both sides.
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 various
matters to be reviewed by the Board. As a rule,
the Corporate Management Team convenes
at the Chair’s invitation once a month, and
otherwise if required.
At the end of the financial year 2022, the
Corporate Management Team members owned
the Company’s shares as follows:
Mika Joukio 352,500 B shares
Ari Kiviranta 30,000 B shares
Markku Leskelä 16,406 B shares
Jussi Noponen 80,000 B shares
Harri Pihlajaniemi 41,414 B shares
Henri Sederholm 42,466 B shares
Camilla Wikström 19,984 B shares.
Any controlled entities of the Corporate
Management Team members do not hold shares
in the Company.
■ Internal control, internal audit
and risk management
Profitable business requires that operations
are monitored continuously and with adequate
efficiency. Metsä Board’s internal management
and control procedure is based on the Finnish
Limited Liability Companies Act, the regulations
and recommendations for listed companies,
the Articles of Association and the Company’s
own approved principles and policies. The
functioning 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 that
support control. The principles, objectives
and responsibilities of Metsä Board’s internal
control, risk management and internal auditing
are described in the following section.
Internal control
As a listed company, Metsä Board’s internal
control is steered by the Finnish Limited Liability
Companies Act and the Securities Markets 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
the achievement of the company’s goals and
objectives; economical, appropriate and efficient
use of resources; correct and reliable financial
information and other management information;
adherence to external regulations and internal
policies; adequate security of operations,
information and property; and the arrangement
of adequate and appropriate 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
steering and monitoring including the relevant
operational systems and work instructions; 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 approach to
control jointly form the basis for overall internal
control.
Monitoring of the financial reporting process,
credit control and authorisation rights
The financial organisations of the different
functions and central administration are respon-
sible for financial reporting. The units report
their financial figures each month. The units’
controller functions check their units’ monthly
performance and submit a performance
report to central administration. The functions’
profitability development and business risks
and opportunities are discussed in monthly
meetings attended by the Company’s and each
function’s management. The result is reported
to the Board and Corporate Management Team
monthly. The Board presents the financial
statements to the Annual General Meeting for
approval, approves the financial statement
bulletin and interim reports, and decides on their
publication. The rules for reporting and control
as well as the reporting process are described
in greater detail in the Company’s internal
guidelines.
Credit control in Metsä Board has been
centralised under a Credit Committee, which
convenes at least each quarter. Credit control-
lers monitor the trend in trade receivables in
each sales company 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, sales
and financial 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 progressively for different organisation
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 handled by the functions’ man-
agement teams and the Corporate Management
Team within the framework of the annual invest-
ment plan. The most significant investments are
separately submitted to the Board for approval.
Investment follow-up reports are compiled each
quarter.
Internal auditing
Internal auditing is an independent and objective
assessment, assurance and consulting activity
designed to add value to Metsä Board and
improve its operations.
Internal auditing assists the Board of Directors
in its supervisory role and supports Metsä Board
and its management in achieving the Company’s
objectives by providing a systematic approach
to assessing and improving the effectiveness
of risk management, control, governance and
management processes.
Metsä Board’s internal auditing is carried out
by Metsä Group’s internal audit unit. Audit work
is carried out in compliance with the internal
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audit guidelines approved by the Audit Commit-
tee. The internal audit function reports to the
Audit Committee on operations and to Metsä
Group’s President and CEO on administration.
Internal auditing draws up a six-monthly
action plan which is approved by the Audit
Committee. Auditing is risk-based and focuses
on the Company’s activities and units that
are considered to be key to achieving the
objectives set for operations. In cooperation
with the audit function, internal auditing sees
to the coordination of plans to ensure adequate
coverage of auditing and avoid overlapping work.
Similarly, cooperation is carried out with Metsä
Group’s other assurance functions such as risk
management, internal controls and compliance.
The results of the audit are compiled into
an audit report, which is shared with Metsä
Board’s CEO and CFO, the management of the
audited entity and the persons in charge. The
audit reports are submitted to Metsä Group’s
President and CEO, CFO, auditor and, if required,
to other Group management for informative
purposes.
Internal auditing provides the Audit
Committee with a six-monthly summary report
on the audits carried out, the main findings and
recommendations, and the management action
plans and their implementation. The Chair of
the Audit Committee and the Audit Director
also meet regularly without the presence of
management.
Risk management
Risk management is an essential part of Metsä
Board’s standard business planning and
leadership. Risk management is part of daily
decision making, operations follow-up and
internal control, helping to promote and ensure
the achievement of the Company’s objectives.
Business management and risk management
are efficiently coordinated based on the
operational principles confirmed by the Board,
the aim of which is to secure a well-defined,
understandable and sufficiently practical
risk management process. Risks and their
development are regularly reported to the Board
of Directors’ Audit Committee. Centralised risk
management also takes care of the coordination
and competitive bidding of Metsä Board’s
insurance coverage.
The key objective of risk management is to
identify and evaluate the risks, threats and
opportunities that may have an impact on the
implementation of the strategy and the achieve-
ment of short- and long-term objectives. The
businesses regularly evaluate and monitor the
risk environment and related changes as part
of their normal operational planning. The risks
identified and their management are reported
to the Audit Committee and the Board at least
twice a year. Business risks also involve opportu-
nities, and they can be capitalised on 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. Such an evaluation must be
conducted before any pre-engineering and
execution phases of projects and investments.
Risk management responsibilities are divided
among different functions in Metsä Board. 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 as well as the
essential risk areas and provides the Board with
related proposals. The CEO and Management
Team are responsible for the specification and
adoption 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 Management reports to the CFO and
is responsible for the development and coor-
dination of the Company’s risk management
process, the implementation of risk evaluation
and the essential insurance decisions. The Risk
Committee conducts a twice-yearly risk review,
the results of which the CEO presents to the
Board following a review by the Corporate Man-
agement Team. The Risk Committee consists
of the CFO acting as Chair, and SVP Production,
SVP Development, VP Risk Management and VP
Group Accounting. The 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.
The key elements of Metsä Board’s risk
management include implementing a compre-
hensive risk management process that supports
the entire business, protecting property and
ensuring business continuity, corporate security
and its continuous development, as well as crisis
management and continuity and recovery plans.
According to the risk management policy and
principles, adequate risk management forms
a necessary part of the preliminary review and
implementation stages of projects that are
financially or otherwise significant.
Metsä Board’s risk management is tasked with:
• ensuring that all the identified risks with
an impact on personnel, customers,
products, property, information assets,
corporate image, corporate responsibility or
operational capacity are controlled according
to applicable laws and based on the best
available information;
• ensuring that the Company’s objectives are
met;
• fulfilling stakeholders’ expectations;
• protecting property and ensuring disrup-
tion-free business continuity;
• optimising the profit/loss potential; and
• ensuring the management of the company’s
overall risk exposure and minimising 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 that
must be an audit firm authorised by the Central
Chamber of Commerce of Finland. The General
Meeting appoints the auditor each year at the
Annual General Meeting. The Company’s Audit
Committee together with the Audit Committee
of its parent entity, Metsäliitto Cooperative,
organised a competitive bidding for audit
services in 2011 and 2021. As a result of the
2011 bidding, the Company’s long-term auditor
PricewaterhouseCoopers Oy was changed
to KPMG Oy Ab at the 2012 Annual General
Meeting. Following the competitive bidding
organised in 2021 and pursuant to the decision
of the 2022 Annual General Meeting, KPMG
Oy Ab now acts as the Company’s auditor with
Kirsi Jantunen, APA, as the auditor with main
responsibility. Under the EU Audit Directive, an
audit firm may act as a company’s auditor for a
maximum of 10 years, after which a competitive
174
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
bidding must be organised for the audit services.
Should the same audit firm be re-elected, it may
serve continuously as the Company’s auditor for
another 10 years at most, after which the audit
firm must be changed. The Audit committee
controls the appointment procedure of auditors
and provides the Board and the General Meeting
with a recommendation for the appointment of
the auditor.
In 2022 audit fees were paid as follows:
Audit fees 2022 2021 2020
Audit fees to KPMG Oy Ab EUR 200,000 EUR 196,000 EUR 196,000
International fees EUR 255,000 EUR 241,000 EUR 206,000
For services unrelated to the audit proper EUR 0 EUR 0 EUR 4,000
Total EUR 455,000 EUR 437,000 EUR 406,000
Fee to other audit firms other than KPMG Oy Ab EUR 11,000 EUR 21,000 EUR 23,000
Total EUR 466,000 EUR 458,000 EUR 429,000
Insider administration
For insider matters, Metsä Board and its group
companies comply with Finnish laws, especially
the Securities Markets Act, Regulation N:o
596/2014 of the European Parliament and of the
Council 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). Based on the above
provisions, the Company has approved its own
insider guidelines.
Pursuant to MAR Article 14 and Chapter 51
of the Criminal Code, a person who possesses
inside information shall not (i) engage or
attempt to engage in insider trading by acquiring
or transferring financial instruments on his or
her own account or on behalf of a third party,
(ii) recommend that another person engage
in insider trading or induce another person to
engage in insider dealing, (iii) unlawfully disclose
inside information to another person, unless
such disclosure is made as part of carrying
out normal work duties. The goal of insider
administration is to enable people considered
the company’s insiders, to openly hold shares
in the company while maintaining public trust
in the trading and price formation involving the
company’s securities. The Company recom-
mends only long-term investments. Insiders are
provided with instructions and training at regular
intervals.
Since the Market Abuse Regulation MAR took
effect on 3 July 2016, the Company has not
had a register of public insiders or maintained a
permanent company-specific insider register.
If required and by decision of the Chair of the
Board of Directors, the Company can set up a
project-specific insider register to cover all the
persons involved in the preparation of a specific
project containing insider information.
The Company’s managers with a duty to notify
include the members of the Board of Directors
and the CEO. The holdings of these individuals
and their related parties is public. Each of them
has 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 in
a stock exchange release.
Managers with a duty to notify are not allowed
to trade in the Company’s shares and other
financial instruments during a period starting at
the end of each reporting period and lasting until
the interim report has been published (always
at least 30 calendar days, a period known as the
‘closed window’). This prohibition applies not
only to managers with a duty to notify, but also
to any 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 for monitoring and evaluating
business transactions with related parties.
The Company’s business activities include
contractual relationships with the parent entity
Metsäliitto Cooperative and affiliated companies
Metsä Fibre Oy and Metsä Tissue Corporation.
The most significant of these are related to the
procurement of raw material (such as wood
and pulp) and to operating in joint integrated
mills. The Board of Directors decides on
contractual relationships with related parties
unless the matter is related to the Company’s
normal business operations and is of minor
significance. In situations where the Board of
Directors addresses a business relationship or
other contractual relationship or connection
to Metsäliitto Cooperative or the Company’s
affiliated companies, the Board of Directors
acts, as a rule, without those of its members who
are dependent on Metsäliitto Cooperative. or the
relevant affiliated company considered a related
party. The Audit Committee regularly 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 are required to notify the Company of
circumstances that may have an impact on the
member’s ability to act without conflict of inter-
est. As of 31 December 2022, neither the Board
members, nor the Company’s CEO or Corporate
Management Team members had monetary
loans from the Company or its subsidiaries. No
collateral arrangements or significant business
relations existed between these persons (includ-
ing their related parties as defined in IFRS) and
the Company during 2022.
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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� 2022:
29,801 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
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec� 2022: 6,956 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� 2022:
287,349 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� 2022:
147,575 B shares
Metsä Board’s
Board of Directors
Read more at metsagroup.com/metsaboard
176
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METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
Board of Directors
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� 2022:
74,908 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� 2022:
12,231 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� 2022:
9,456 B shares
MARI KIVINIEMI
b� 1968
M.Soc.Sc. (Econ.)
Member of the Board since 2022
Independent of the company
and of its significant shareholders
Shares owned in Metsä Board
Corporation 31 Dec� 2022:
3,633 B shares
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� 2022:
16,831 B shares
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FINANCIAL
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MIKA JOUKIO
b� 1964
M.Sc. (Tech), MBA
Chief Executive Officer
Metsä Group employee since 1990�
Chair of Metsä Board Corporate
Management Team since 2014
Shares owned in Metsä Board
Corporation 31 Dec� 2022:
352,500 B shares
HENRI SEDERHOLM
b� 1978
M.Sc. (Econ.)
Chief Financial Officer
Metsä Group employee since 2003�
Member of Metsä Board Corporate
Management Team since May 2021�
Shares owned in Metsä Board
Corporation 31 Dec� 2022:
42,466 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� 2022:
41,414 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� 2022:
80,000 B shares
Metsä Board’s
Corporate Management Team
Read more at metsagroup.com/metsaboard
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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� 2022:
30,000 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� 2022:
19,984 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� 2022:
16,406 B shares
179
SUSTAINABILITY
REPORT
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 adequate information 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 by the Vice President for
Investor Relations, the CFO and/or 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 standing
or outlook, or the market environment.
Investors website
More information about 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
https://www.metsagroup.com/metsaboard/
i n v e s t o r s /.
Investor relations in 2022
In 2022, investor and analyst meetings were
increasingly organised in person, as the
restrictions in force during the coronavirus
pandemic were gradually lifted. Nevertheless,
many meetings and events were held virtually.
Roadshows were held in several cities in
Central Europe and the US. The company also
participated in investor conferences organised
by various brokerage firms. In November,
Metsä Board organised a Capital Markets
day for investors and analysts, the material
and webcast recording of which is available at
https://www.metsagroup.com/metsaboard/
investors/reports-and-presentations/
capital-markets-day/
The 2022 Annual General Meeting was held
with extraordinary meeting procedures. It was
only possible to attend the meeting by voting
and asking questions and making any counter-
proposals in advance.
In connection with the publishing 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 calls are available on the
company’s Investors website.
Metsä Board’s investor communication
makes use of social media through Twitter and
LinkedIn accounts, for example.
Analyst coverage
At least the following brokerage firms conducted
analyses of Metsä Board in 2022: ABGSC,
Carnegie, Danske Equities, DnB, Inderes, Nordea
Markets, OP Equities, SEB and UBS. The contact
details of the analysts and some of the consen-
sus forecasts are available on the company’s
Investors web page.
Metsä Board is not responsible for the con-
tent, accuracy or scope of the analysts’ views.
Annual General Meeting in 2023
The registration period and advance voting
period commence on 24 February2023 at 12.00
noon EET. A shareholder, who is registered in
the Company’s shareholders’ register and who
wishes to participate in the general meeting,
were register for the general meeting by giving
prior notice of participation no later than 17
March 2023 at 4 p.m. EET, by which time the
notice must be received. When registering,
requested information such as the shareholder’s
name, birth date or company identification
number, address and telephone number, as
well as requested information on a possible
proxy representative (namebirth date), must
be notified. The personal data submitted to
Inderes Oyj and Innovatics Oy 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
24 February 2023, 12 noon–17 March 2023, 4
p.m. EET as follows:
a) electronically via the Company’s website at
https://www.metsagroup.com/AGM2023.
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 completing and submitting the advance
voting form available on the Company’s website
by mail to Innovatics Oy, Yhtiökokous/Metsä
Board Oyj, Ratamestarinkatu 13A, 00520
Helsinki, or by email to agm@innovatics.fi.
Profit distribution
The Board of Directors proposes to the Annual
General Meeting to be held on 23 March 2023
that a dividend of EUR 0.58, totalling approx-
imately EUR 206 million, be paid for the 2022
financial period.
The dividend will be paid to shareholders who
are registered in the shareholders’ register held
by Euroclear Finland Ltd on the date of record,
27 March 2023. The Board of Directors proposes
5 April 2023 as the dividend payment date.
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. The
contact details of our sales offices are available
on our website at https://www.metsagroup.
com/metsaboard/contacts/.
Business ID 0635366–7
METSÄ BOARD CORPORATION
Head office
PO Box 20
02020 METSÄ, Finland
Financial reporting in 2023
Silent period Financial report Publication date
1 January–8 February 2023 Financial Statements Bulletin 2022 9 February 2023
1 April–26 April 2023 Interim Report for January–March 2023 27 April 2023
1 July–26 July 2023 Half-Year Financial Report for January–June 2023 27 July 2023
1 October–25 October 2023 Interim Report for January–September 2023 26 October 2023
Investor relations and investor information
180
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, 2022, included in the Metsä Board Corporation’s digital files
743700KKB8Q035K38488-2022-12-31-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 sufficient 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
743700KKB8Q035K38488-2022-12-31-en.zip for the year ended 31
December, 2022 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, 2022 is set
out in our Auditor’s Report dated 9 February, 2023. In this report, we do
not express an audit opinion, review conclusion or any other assurance
conclusion on the consolidated financial statements.
Helsinki 22 February, 2023
KPMG OY AB
Kirsi Jantunen
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report
on Metsä Board Corporation’s ESEF Financial Statements
