Metsä Board
Annual review 2023
Metsä Board is a leading
producer of high-quality
and recyclable fresh fibre
paperboards in Europe
and a forerunner in
sustainability.
Metsä Board
Sustainability review 2023
METSÄ BOARD ANNUAL REVIEW 2023
Contents
Business operations
and value creation
This is Metsä Board 2
CEO’s review 4
Strategy and financial targets 6
Value creation 8
Financial development
Key figures 10
Report of the Board of Directors 12
• Sustainability statement 20
• Sustainability statement assurance report 72
Consolidated financial statements 74
Notes to the consolidated financial statements 78
Parent company financial statements 126
Notes to the parent company financial statements 129
The Board’s proposal to the Annual General
Meeting for the distribution of funds 142
Auditor’s Report 143
Shares and shareholders 147
Ten years in figures 151
Taxes 152
Production capacities 153
Calculation of key ratios and comparable
performance measures 155
Corporate governance
Corporate governance statement 157
• Board of Directors of Metsä Board 165
• Corporate Management Team of Metsä Board 168
Remuneration report 170
Investor relations and investor information 174
Metsä Board Sustainability review
presents Metsä Board’s key sustainability
objectives and achievements in 2023.
The review will be available in spring 2024
1
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 made from renewable wood fibre are mainly used in
consumer packaging and retail packaging solutions.
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 kraft-
liners. In the USA, we are the largest supplier of folding boxboard.
The global demand for paperboards is expected to grow faster than
all packaging materials on average, at an annual rate of slightly
over 4%. (Source: Smithers Information Ltd.).
Investing in
sustainable growth
Population growth, urbanisation and the replacement of plastic will
increase the demand for fibre-based packaging material in the long
term. We respond to this demand with sustainable investments and
innovative packaging solutions. We have ambitious, science-based
sustainability targets and mill-specific investment plans to achieve
the targets.
A forerunner in
sustainability
Our products support the circular economy and they have a
smaller carbon footprint compared to many other packaging
materials. 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.
This is Metsä Board
We are part of Metsä Group
All our wood supply is handled by Metsä Group. The wood we use is sourced from sustainably managed forests, mainly from Finland and
Sweden where renewal of forests and the biodiversity of nature is secured. Our ownership (24.9%) in Metsä Fibre secures self-sufficiency
in pulp and enables the growth of paperboard business.
METSÄ
GROUP
The parent company Metsäliitto
Cooperative is composed of over
90,000 Finnish forest owners.
Sales
EUR 6.1 billion
Comparable operating result
EUR 488 million
Personnel
9,500
METSÄ SPRING Innovation company
Metsäliitto Cooperative
100%
Wood Products
METSÄ WOOD
Metsäliitto Cooperative
50.1%
Metsä Board 24.9%
Itochu Corporation 25.0%
Pulp and sawn
timber
METSÄ FIBRE
Wood Supply and
Forest Services
OWNERSHIP
Metsäliitto Cooperative
100%
Metsäliitto Cooperative
52% (69% of votes)
The company is listed
on Nasdaq Helsinki
Paperboard
METSÄ BOARD
Metsäliitto Cooperative
100%
Tissue and
greaseproof papers
METSÄ TISSUE
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METSÄ BOARD ANNUAL REVIEW 2023
SALES SPLIT BY PRODUCT
% of sales
SALES SPLIT BY REGION
% of sales
Folding boxboard ���������������� 59
White kraftliners ����������������� 24
Market pulp ��������������������������13
Other �������������������������������������� 4
EMEA ������������������������������������66
Americas ������������������������������ 27
APAC ���������������������������������������� 7
Financial development in 2023
Our profitability was affected by weakened paperboard and pulp market. We completed our investments as planned and secured cash
flow from operations through efficient management of working capital. Our balance sheet remained strong.
SALES
EUR million
2,500
2,000
1,500
1,000
500
0
COMPARABLE
OPERATING RESULT
EUR million
% of sales
TOTAL
INVESTMENTS
EUR million
We are
2,300
Metsä Board employees in
17
countries
We have
8 production units
in Finland and Sweden.
Our main market areas are
Europe and North America
Our customers include
international brand owners,
packaging converters,
manufacturers of corrugated
products and merchants
Paperboard capacity
2.3 million tonnes/year
Pulp and BCTMP capacity
1.7 million tonnes/year
We are committed to the ambitious and
science-based 2030 sustainability targets
that enable fossil free production and
products and help our customers to con-
tribute to their own goals. Read more about
sustainable development and our goals.
CASH FLOW
FROM OPERATIONS
EUR million
END USE OF
FOLDING BOXBOARD
END USE OF
WHITE KRAFTLINERS
Food and food service
packaging
Other consumer
product packaging
Graphical end use
Various retail packaging
solutions
Other consumer
product packaging
E-commerce
Interest-bearing net debt/
comparable EBITDA
0.7
Target <2.5
Source: Metsä Board
3
Ready for sustainable growth
The year 2023 was challenging for Metsä Board. Our business was affected by
the weaker pulp and paperboard market and high cost level. Over the year, we
systematically implemented our strategic programmes and helped our customers
reduce their use of plastics and the carbon footprint of packaging. The Kemi and Husum
investment projects, completed in the second half of the year, and our strong financial
position offer us excellent conditions for future sustainable growth. I am proud of every
Metsä Board employee’s work and commitment to our company’s future.
Competitiveness from energy
and fibre self-sufficiency
The energy crisis in Europe highlighted the importance of energy
self-sufficiency. Metsä Board’s energy self-sufficiency is already
90%, increased by the new recovery boiler in Husum and the
additional production from the Olkiluoto 3 nuclear power plant. In
addition to own production, our self-sufficiency in pulp is supported
by 24.9% holding in Metsä Fibre.
Wood, our main raw material, accounts for more than a quarter
of our total costs. The discontinuation of wood supply from Russia
led to a tighter wood market in the Baltic Sea region, and pulpwood
prices increased in Finland and Sweden in 2023. Our wood supply
is handled by Metsä Group, which is Finland’s largest buyer of
wood. Wood is only procured from sustainably managed forests,
where growth exceeds use. In the spring of 2023, Metsä Group
adopted regenerative forestry principles which improve forests’
carbon storage, biodiversity and ability to adapt to climate change.
In accordance with the principles, the state of forest nature is not
only improved, but the improvement is also demonstrated with
measurements.
A year of significant investments
Over the year, several significant investments were completed. At
the Kemi kraftliner mill, we completed a development programme
to increase the production capacity of the white kraftliner and
improve the mill’s energy and water efficiency. Similarly, the
modernisation of the folding boxboard production line in Husum
will increase our annual folding boxboard capacity and improve
the mill’s production efficiency. Moreover, Metsä Fibre’s new bio-
product mill started up in Kemi. It is the largest investment in the
history of the Finnish forest industry. The mill produces softwood
and hardwood pulp more cost-effectively and offers world-class
production, environmental and energy efficiency.
The world around us has changed rapidly, and the changes have
also had a strong impact on the paperboard market. The pandemic
led to exceptionally steep growth in the demand for packaging
materials, with restrictions on mobility shifting consumption from
services to products. Since then, rising inflation and interest rates
have affected consumers’ purchasing power and behaviour: prices
of consumer products have increased, and people now consider
their purchases more carefully. Weaker consumer demand has
led to major inventory adjustments in the value chain. In addition,
the overall market balance for paperboards, especially in Europe,
has been affected by the discontinuation of sales to Russia and
increased paperboard supply from Asia to the Middle East and
South America.
Notable year-over-year change in profitability
Our sales were EUR 1.9 billion, and our comparable operating result
was EUR 122 million. Our comparable return on capital employed
was 5.1%, compared to a record high of over 20% the previous
year. Paperboard and market pulp delivery volumes were well
below capacity levels, and we adjusted our production to match the
low demand level. Our performance was also impacted by high cost
level and a significantly lower result from our associated company
Metsä Fibre compared to the previous year. However, the average
sales price of our paperboards improved from 2022.
To safeguard profitability, we focused our paperboard sales on
customers in our main market areas, who most benefit from sus-
tainably produced premium fresh fibre paperboards. In the second
half of the year, we temporarily laid off some of our personnel at our
mills in Finland. Through efficient management of working capital,
we managed to support our cash flow from operating activities,
which amounted to EUR 343 million. Our balance sheet remained
strong in the challenging market situation.
4
CEO’S REVIEW
|
METSÄ BOARD ANNUAL REVIEW 2023
In our operations and
development eorts, we
have systematically done the
right things, which will have
a positive impact on our
business in the future.
Concrete actions to ensure sustainability
In the circular economy of fibre-based packaging materials, our
task is to provide the market with fresh fibre paperboards as
resource efficiently as possible, contribute to the replacement of
fossil-based materials and reduce the carbon footprint of packag-
ing. Lighter-weight paperboards and resource efficiency are the key
areas in our product development, and they also form the basis for
future investments. We aim to reduce wood, energy and water use
per tonne of paperboard produced compared to our current pro-
duction units. In 2023, we implemented measures and investments
at our mills in line with our strategic programmes, which aim to
make our production entirely fossil free by the end of 2030. These
measures will continue as planned in the coming years.
Ready for future growth
Our goal is to continue to grow in fibre-based packaging materials
and to renew our industrial operations. Population growth,
urbanisation and plastic replacement remain strong trends that
will increase demand for fibre-based packaging in the long term.
Consumer preferences favour fossil free packaging materials,
and several brand owners are committed to ambitious targets
to reduce plastic use in their packaging. Our competitiveness is
boosted by high quality of our paperboards, reliable deliveries,
and a service concept, which helps our customers improve their
material efficiency and reduce the environmental impact of their
packaging.
Although our business environment still involves uncertainties,
I am confident about Metsä Board’s future. In our operations and
development efforts, we have systematically done the right things,
which will have a positive impact on our business in the future. Our
strong financial position will support us in this growth. The Board of
Directors proposes a dividend of EUR 0.25 per share for 2023.
I would like to thank Metsä Board’s employees for their great
work and all our customers, shareholders and other partners for
their trust and good cooperation.
Mika Joukio
CEO
CEO’s review
5
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
Population growth
Climate change
Digitalisation
Urbanisation
Biodiversity loss
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 financial 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.
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BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL REVIEW 2023
We invest in sustainable
and profitable growth
With the investments, we implement our
strategy to grow in fibre-based packaging
materials, improve the production and resource
efficiency of our mills and reduce the carbon
footprint of our products. We have set ambi-
tious, science-based sustainability targets and
mill-specific investment plans to achieve our
goals by the end of 2030. Some of the invest-
ments required by these plans have already
been implemented. These measures will also
help our customers to reduce their emissions
and further increase our competitiveness.
In 2023, we completed a development
programme at our Kemi paperboard mill that
will increase the annual production capacity of
white kraftliner by 40,000 tonnes and improve
the mill’s energy and water efficiency. As part of
the development programme, we will purchase
a modernised unbleached pulp production line
from our associated company Metsä Fibre for
use in paperboard production. At the same time,
Metsä Fibre completed its new bioproduct mill
in Kemi, which will increase our surplus in pulp
by an amount corresponding our share of own-
ership in Metsä Fibre. In Husum, an investment
related to the modernisation of the production
line for folding boxboard was completed, which
will increase annual production capacity by
200,000 tonnes and improve the production
efficiency of the mill. The increase in production
capacity is expected to be fully available on the
market in 2026.
During the 2020s, we will make an invest-
ment decision to renew the fibre line at the
Husum pulp mill. In addition, we have pre-en-
gineering ongoing for a new folding boxboard
mill in Kaskinen. The pre-engineering work is
still ongoing and an investment decision can be
made in 2024 at the earliest.
COMPARABLE RETURN
ON CAPITAL EMPLOYED
%
INTEREST-BEARING NET
DEBT / COMPARABLE
EBITDA
DIVIDEND /
NET RESULT
Target > 12% Target < 2.5 Target > 50%
Our financial targets
2.5
2.0
1.5
1.0
0.5
0
-0.5
Our strategic programmes
We implement our strategy through five strategic programmes that
drive sustainable growth in fibre-based packaging materials and
industrial 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
• 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
• Availability and quality of recycled fibre is declining
• Global e-commerce continues to grow
Business operations and value creation
7
Resources Business model
People and partnerships
• 2,300 employees in 17 countries
• 36 apprentices
• Active cooperation with local communities and educational
institutions
Production and supply chain
• More than 3,400 suppliers
• 8 production units in Finland and Sweden
• Deliveries to approximately 100 countries
Natural resources
• 6,3 million m
3
of sourced wood of which 91% is certified
• Total energy consumption 7.6 TWh of which 90% is fossil
free
• Water intake 102 million m
3
• 254,000 dry tonnes of purchased pigments, adhesives and
other raw materials
Intangible assets
• R&D expenditure EUR 7.3 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 2.5 billion
• Approximately 62,000 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
4% (of sales)
MARKET PULP
13% (of sales)
FOLDING BOXBOARD
59% (of sales)
OUR SALES IN 2023
EUR 1,942 million
WHITE KRAFTLINERS
24% (of sales)
We create value and well-being
for several stakeholders
We are continuously looking for opportunities to grow profitably and sustainably, and to generate
value for our stakeholders with our operations. We help our customers achieve their sustainability
targets with our paperboards and our expert services that support the circular economy.
8
BUSINESS OPERATIONS AND VALUE CREATION
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METSÄ BOARD ANNUAL REVIEW 2023
ImpactsOutputs
Customers
• Recyclable and sustainably produced products with a smaller
carbon footprint
1)
• Innovative and material-efficient packaging solutions that help
reduce the use of plastic
• Customer satisfaction NPS (Net Promoter Score) 40
Suppliers
• EUR 1.6 billion purchases from suppliers
• 99% of suppliers are committed to the Supplier Code of
Conduct
• 19% of target group suppliers have set their own SBTi targets
Personnel
• EUR 200 million paid to employees as wages and benefits
• 98% of the personnel have completed the Code of Conduct
training
Shareholders
• A sustainable investment; several recognitions from ESG
evaluations conducted by third parties
• EUR 89 million distributed to shareholders of the parent
company as dividends
• 5.1% comparable return on capital employed
Common value creation
• Taxes paid EUR 65 million
• Total investments EUR 229 million
• Aiming for 100% fossil free products and production, with
science-based targets
Further information on taxes on p. 152
Sustainable products and services
• 1.3 million tonnes of premium fresh fibre paperboards
• 1.0 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
• 184,713 tonnes of fossil-based carbon dioxide emissions
(Scope 1 + Scope 2 market-based)
• 96% of the used water is returned to the waterbodies after
treatment
• 149,000 tonnes of by-products and waste most of which
used as materials or energy
1)
based on third-party verified EPD reports, life cycle database values for
alternative packaging materials and a series of life cycle and carbon footprint
calculations carried out for customers in 2023
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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 �����������������������������17%
Pulp*����������������������������� 16%
Logistics ���������������������� 15%
Chemicals ��������������������14%
Personnel ��������������������� 12%
Energy ���������������������������11%
Other fixed ������������������ 10%
Other variable ��������������� 4%
TOTAL COSTS 2023
EUR 1.7 billion
Development of key figures per
share can be found on page 150.
*) 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 2023: Wood 56%, Chemicals 13%, Logistics 9%,
Personnel 6%, Other 16%.
10
Non-official version and translation
Auditor’s report on ESEF 175
FINANCIAL DEVELOPMENT
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METSÄ BOARD ANNUAL REVIEW 2023
Contents
Report of the Board of the Directors
and financial statements
■ Report of the Board of Directors 12
Sustainability statement 20
Annexes to the Sustainability statement 70
Sustainability statement assurance report 72
■ Consolidated financial statements 74
Consolidated statement of comprehensive income 74
Consolidated balance sheet 75
Statement of changes in shareholders’ equity 76
Consolidated cash flow statement 77
Notes to the consolidated financial statements 78
1 Accounting policies 78
2 Profitability 80
2.1 Segment information 80
2.2 Sales 81
2.3 Other operating income 82
2.4 Operating expenses 82
3 Remuneration 83
3.1 Employee costs 83
3.2 The management’s salaries, remuneration
and pension expenses 83
3.3 Share-based payment 85
3.4 Retirement benefit obligations 89
4 Capital employed 92
4.1 Intangible assets 92
4.2 Property, plant and equipment 95
4.3 Other investments 98
4.4 Inventories 99
4.5 Trade receivables and other receivables 99
4.6 Other liabilities 100
4.7 Trade payables and other liabilities 100
4.8 Provisions 101
5 Capital structure and financial risks 102
5.1 Shareholders’ equity 102
5.2 Financial income and expenses 105
5.3 Other financial assets 105
5.4 Cash and cash equivalents 106
5.5 Borrowings and net debt 106
5.6 Management of financial risks 108
5.7 Classification and fair values of financial
assets and liabilities 114
6 Income taxes 119
7 Group structure 121
7.1 Group companies 121
7.2 Acquisitions and operations disposed of 124
7.3 Related party transactions 124
8 Other notes 125
8.1 Contingent liabilities, assets and commitments 125
8.2 Events after the financial period 125
■ Parent company
financial statements 126
Parent company income statement 126
Parent company balance sheet 127
Parent company cash flow statement 128
Notes to the parent company financial statements 129
1 Accounting policies 129
2 Sales 130
3 Exceptional items 130
4 Other operating income 130
5 Operating expenses 130
6 Depreciation and impairment charges 131
7 Financial income and expenses 131
8 Income taxes 131
9 Intangible and tangible assets 132
10 Investments 134
11 Receivables 135
12 Shareholders’ equity 136
13 Mandatory provisions 137
14 Deferred tax assets and liabilities 137
15 Non-current liabilities 137
16 Current liabilities 138
17 Financial instruments 139
18 Disputes, legal proceedings and commitments 140
19 Shares and holdings 140
The Board’s proposal to the Annual General Meeting
for the distribution of funds 142
Auditor’s report 143
Shares and shareholders * 147
Ten years in figures 151
Taxes 152
Production capacities 153
Calculation of key ratios * 155
Comparable performance measures * 156
■ Corporate governance 157
Corporate governance statement 157
• Board of Directors of Metsä Board 165
• Corporate Management Team of Metsä Board 168
Remuneration report 170
Investor relations and investor information 174
* part of the Report of the Board of Directors
Financial development
11
Report of the Board of Directors 2023
According to the dividend policy, at least 50% of the result for the financial
period is distributed as dividends.
• In 2023: 95% (dividend: EUR 0.25 per share)
Market environment
■ Paperboards
Population growth, urbanisation and replacing plastics are global trends
that will increase demand for fibre-based packaging in the long term.
Consumer preferences favour fossil free packaging materials, and several
brand owners are committed to ambitious targets to reduce plastic use
in their packaging. Lightweight fresh fibre paperboards produced from
renewable raw materials are material-efficient and have a smaller environ-
mental impact than many corresponding packaging materials.
Rising inflation and a higher price level have eroded consumers’
purchasing power and affected general demand for consumer products. In
2023, the demand for fresh fibre paperboards decreased rapidly, leading
to considerable inventory adjustments in the value chain. In addition, the
overall market balance for paperboards, especially in Europe, was affected
by the discontinuation of sales to Russia and increased paperboard supply
from Asia to Turkey, the Middle East and South America.
In 2023, the deliveries of European folding boxboard and white kraft-
liners to Europe decreased significantly from the previous year. Folding
boxboard market prices remained stable, while those of white kraftliners
declined.
Metsä Board accounted for 32% (33) of the overall deliveries of Euro-
pean folding boxboard producers and for 50% (57) of exports from Europe.
At the end of 2023, Metsä Board accounted for 39% of folding boxboard
production capacity and for 33% of white kraftliner production capacity in
Europe
(Sources: Fastmarkets FOEX, Fastmarkets RISI, CEPI Cartonboard, CEPI
Containerboard, websites of benchmark companies).
■ Market pulp
Metsä Board and its associated company Metsä Fibre sell mainly long-fibre
pulp to Europe and Asia. Global demand for market pulp is supported by
the global growth in demand for packaging and hygiene products made
from renewable materials.
In 2023, global demand for market pulp decreased, and the price level
(PIX) declined from the previous year. In Europe, demand was constrained
by production shutdowns by paperboard and paper producers due to the
weak market situation. In China, demand picked up in the second half of the
year.
The global supply of long-fibre pulp was restricted by several production
capacity closures, the limited availability of raw material in North America,
and global production curtailments.
Metsä Board’s business
Metsä Board produces recyclable premium 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. The total annual
paperboard capacity is approximately 2.3 million tonnes. Metsä Board’s
main market areas are Europe and North America.
In addition to paperboard, the company 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 1.7 million tonnes. Metsä Board owns 24.9% of
its associated company Metsä Fibre, a global leader in the production of
softwood market pulp.
Metsä Board covers its energy consumption with its own production and
supplementary purchases from the market. Most of the electricity con-
sumption is covered by the company’s own production and by electricity
purchased from Pohjolan Voima and Metsä Fibre. Metsä Board has a 2.6%
holding in Pohjolan Voima, from which it purchases electricity at cost price.
Strategy and financial targets
According to its strategy, Metsä Board aims to grow in fibre-based
packaging materials and renew its industrial operations. The company
implements its strategic programmes, including growth and development
investments, to improve the mills’ production and resource efficiency and
reduce the carbon footprint of products. The company’s production is
located near the most important raw material, high-quality northern fibre.
Metsä Board aims to maintain high self-sufficiency in pulp and energy.
Its decision-making is steered by profitability and sustainability targets
and by the long-term increase of shareholder value. The company focuses
on the continuous improvement of cost-effectiveness and on customer
accounts which benefit from the high performance of the company’s
products and services. The objective is to distribute a competitive dividend
and retain a strong balance sheet.
Financial targets, dividend policy
and actual figures for 2023:
The comparable return on capital employed is at least 12%.
• In 2023: 5.1%
The ratio of interest-bearing net liabilities to comparable EBITDA is at most
2.5.
• In 2023: 0.7.
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Report of the Board of Directors
Delivery and production volumes
1,000 tonnes 2023 2022 2021
Delivery volumes
Folding boxboard 906 1,208 1,296
White kraftliner 467 609 627
Metsä Board’s market pulp
1)
394 503 496
Metsä Fibre’s market pulp
2)
684 717 762
Production volumes
Folding boxboard 859 1,272 1,272
White kraftliner 450 605 634
Metsä Board’s pulp
1)
996 1,409 1,362
Metsä Fibre’s pulp
2)
685 731 747
1)
Includes chemical pulp and high-yield pulp (BCTMP).
2)
Equal to Metsä Board’s 24.9% holding in Metsä Fibre.
Key figures
2023 2022 2021
Sales, EUR million 1,941.9 2,479.6 2,084.1
EBITDA, EUR million 214.6 614.6 466.0
comparable, EUR million 216.0 602.8 472.2
EBITDA, % of sales 11.1 24.8 22.4
comparable, % of sales 11.1 24.3 22.7
Operating result, EUR million 120.8 531.5 375.9
comparable, EUR million 122.2 520.7 386.6
Operating result, % of sales 6.2 21.4 18.0
comparable, % of sales 6.3 21.0 18.6
Result before taxes, EUR million 120.9 524.9 365.8
comparable, EUR million 122.6 514.6 376.6
Result for the period, EUR million 101.6 461.3 314.0
comparable, EUR million 103.8 451.4 326.6
Earnings per share, EUR 0.27 1.15 0.82
comparable, EUR 0.27 1.13 0.85
Return on equity, % 4.7 22.5 19.4
comparable, % 4.8 22.0 20.2
Return on capital employed, % 5.0 21.4 18.2
comparable, % 5.1 20.9 18.7
Equity ratio
1)
, % 67 66 63
Net gearing
1)
, % 7 4 -4
Interest-bearing net liabilities/comparable EBITDA 0.7 0.2 -0.2
Shareholders’ equity per share
1)
, EUR 5.35 5.86 4.78
Interest-bearing net liabilities
1)
, EUR million 144.0 94.5 -78.4
Total investment, EUR million 228.7 304.1 220.2
Net cash flow from operations, EUR million 342.8 232.0 329.6
Personnel
1)
2,240 2,248 2,389
1)
at the end of the period
13
100
80
60
40
20
0
100
80
60
40
20
0
21 22 23 21 22 23
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 1,941.9 million (2,479.6).
and Husum paperboard mills. The completion of investments increased
depreciation by around EUR 12 million from the previous year.
Unused emissions allowances were sold for approximately EUR 55
million (EUR 29 million).
The associated company Metsä Fibre’s share of Metsä Board’s com-
parable result in January–December was EUR 28.2 million (174.7). Metsä
Fibre’s result was weakened by the lower sales prices of end products,
especially pulp. Pulp delivery volumes fell by around 5% from the previous
year. The performance of the sawn timber business was also clearly weaker
than in the previous year. Profitability was also impacted by higher wood
costs and increased depreciation resulting from the completion of the
Kemi bioproduct mill.
Financial income and expenses totalled EUR 0.1 million (-6.6), including
foreign exchange rate differences from accounts receivable, accounts
payable, financial items and the valuation of currency hedging instruments,
totalling EUR 2.6 million (-5.0).
The result before taxes was EUR 120.9 million (524.9). The comparable
result before taxes was EUR 122.6 million (514.6). Income taxes amounted
to EUR 19.3 million (63.5).
Earnings per share were EUR 0.27 (1.15), and comparable earnings per
share were EUR 0.27 (1.13). The return on equity was 4.7% (22.5), and
the comparable return on equity was 4.8% (22.0). The return on capital
employed was 5.0% (21.4), and the comparable return on capital employed
was 5.1% (20.9).
Cash flow
Net cash flow from operations in January–December 2023 was EUR 342.8
million (1–12/2022: 232.0). Working capital decreased by EUR 105.8
million (an increase of 151.4). Cash flow was supported by efficient use
of working capital. Due to the weakened demand situation, the company
adjusted its production to prevent an increase in inventories. In the corre-
sponding period, working capital was increased by higher inventory levels
of paperboard and higher inventory values due to cost inflation.
Balance sheet and financing
Metsä Board’s equity ratio at the end of the financial period was 67% (31
December 2022: 66), and the net gearing ratio was 7% (4). The ratio of
interest-bearing net liabilities to comparable EBITDA in the previous 12
months was 0.7 (0.2).
Interest-bearing liabilities totalled EUR 438.1 million (31 December 2022:
453.0). Non-euro-denominated loans accounted for 2.0% of loans, and
floating-rate loans for 15.3%, the rest being fixed-rate loans. The average
interest rate on liabilities was 2.6% (2.2), and the average maturity of
non-current liabilities was 3.1 years (4.0). The interest rate maturity of
loans was 30.6 months (36.1).
Interest-bearing net debt totalled EUR 144.0 million (31 December 2022:
94.5).
Metsä Board’s liquidity is good. At the end of the financial period, the
available liquidity was EUR 491.6 million (31 December 2022: 556.2),
The comparable operating result was EUR 122.2 million (520.7), and the
operating result was EUR 120.8 million (531.5). Items affecting compa-
rability totalled EUR -1.4 million in the review period. They comprised
Metsä Board’s capital gains of EUR 2.7 million from the sale of a land area
unrelated to business operations, and items related to the business of the
associated company Metsä Fibre: A write-down related to the closure of the
old Kemi pulp mill; translation differences from discontinued operations in
Russia; the loss on sale of fixed asset items, and other items, totalling EUR
-4.1 million.
Total deliveries of paperboards were 1,373,000 (1,817,000) tonnes,
of which 67% was delivered to the EMEA region, 30% to the Americas,
and 4% to the APAC region. Metsä Board’s deliveries of market pulp were
394,000 (503,000) tonnes, of which 67% was delivered to the EMEA
region and 33% to the APAC region.
The comparable operating result was weakened by the lower price level
of market pulp and lower delivery volumes. The delivery volumes of paper-
board also fell significantly. Metsä Board adjusted its paperboard, pulp
and BCTMP production to match the low level of demand, and production
volumes remained well below capacity levels.
Profitability was supported by improved average prices for paperboards,
especially folding boxboard.
Exchange rate fluctuations, including hedges, had a positive impact of
approximately EUR 95 million on the operating result compared to the
previous year.
The cost level was higher than in the previous year. The greatest increase
during the year was in wood costs, due to higher stumpage prices in
Finland and Sweden. The change in the costs of chemicals and energy
was less significant. In the second half of the year, the result was affected
by major annual maintenance and investment shutdowns at the Kemi
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METSÄ BOARD ANNUAL REVIEW 2023
consisting of the following items: liquid assets and investments of EUR
291.6 million and a syndicated credit facility (revolving credit facility) of
EUR 200.0 million. Of the liquid assets, EUR 278.4 million consisted of
short-term deposits with Metsä Group Treasury, and EUR 13.2 million was
cash funds and investments. Other interest-bearing receivables amounted
to EUR 2.5 million. In addition to items reported as liquidity, the liquidity
reserve is complemented by the EUR 200 million commercial paper pro-
gramme signed in December, Metsä Group’s internal undrawn short-term
credit facility of EUR 150.0 million and undrawn pension premium (TyEL)
funds of EUR 229.7 million.
The fair value of other non-current investments was EUR 254.4 million
(31 December 2022: 345.4). The change in value was related to the change
in the fair value of Pohjolan Voima Oyj’s shares.
At the end of the financial period, an average of 8.6 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 from S&P Global and
Moody’s Investor Service. Metsä Board’s rating by S&P Global is BBB-, with
a stable outlook. The company’s rating by Moody’s is Baa2, with a stable
outlook.
Investments
Investments during the financial period totalled EUR 228.7 million
(1–12/2022: 304.1), with growth and development investments accounting
for 74%, and maintenance investments for 26%. Of total investments,
the company’s own property, plant and equipment amounted to EUR
223.0 million (278.1), and leased property, plant and equipment to EUR
5.7 (26.1). In the latter, the most significant item in the previous year was
the machinery and equipment for the boiler plant from the acquisition of
Hämeenkyrön Voima Oy, totalling EUR 18.0 million.
Metsä Board group companies are parties to legal proceedings concern-
ing disputes related to obligations and liabilities under delivery contracts
for major investment projects. In addition, these investment projects
involve outstanding disputes, which may also lead to the initiation of new
arbitration or litigation.
■ Development programme
of Kemi paperboard mill
In September, the Kemi paperboard mill completed a development pro-
gramme launched in 2021, which will increase the mill’s annual production
capacity of the white kraftliner by around 40,000 tonnes. After the
programme, the mill’s annual production capacity will be around 465,000
tonnes, which is expected to be fully available on the market in 2025.
The programme also included a series of modernisation and bottleneck
investments in the paperboard machine, which will reduce the mill’s water
use by 40% and energy use by 5% per tonne of paperboard produced.
As part of the programme, Metsä Board will purchase a modernised
unbleached pulp production line used in kraftliner production from Metsä
Fibre. The production line’s annual capacity is roughly 180,000 tonnes.
The total investment value is approximately EUR 110 million.
■ Capacity expansion of
folding boxboard in Husum
In November, the investment was completed at the Husum paperboard
mill that will increase the annual production capacity of folding boxboard
by 200,000 tonnes. After the investment, the folding boxboard production
capacity of the BM 1 will be 600,000 tonnes per year, and it is expected to
be fully available on the market in 2026. The total value of the investment is
approximately EUR 230 million.
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 is approxi-
mately EUR 20 million and will mainly include new warehouse capacity, with
completion expected in 2024.
■ ERP project
As part of Metsä Group, Metsä Board is modernising its information (ERP)
systems. The project will gradually improve Metsä Group’s operational
efficiency and ability to create new data-driven functions, primarily for
business management and customer support. For Metsä Board, the design
phase started in 2021, and the system is expected to be implemented by
the end of 2025. In 2023, Metsä Group’s common financial system was
implemented. Metsä Board’s share of the total project value is at least EUR
80 million, most of which will be booked as investments during 2024 and
2025.
■ Pre-engineering for folding
boxboard mill in Kaskinen
Metsä Board has started pre-engineering for a new folding boxboard mill
with an annual capacity of approximately 800,000 tonnes in Kaskinen,
Finland. The pre-engineering includes technical design, infrastructure and
logistics solutions, and tendering for the main equipment. The environmen-
tal impact assessment (EIA) for the project was completed in September.
The environmental permit process is ongoing. A potential investment
decision could be made in 2024 at the earliest.
■ Associated company Metsä Fibre’s Kemi
bioproduct mill
Associated company Metsä Fibre’s new bioproduct mill in Kemi, Finland,
started up in September. The new mill will produce some 1.5 million tonnes
of softwood and hardwood pulp annually, as well as other bioproducts.
The pulp production capacity of 1.5 million tonnes includes the existing
unbleached pulp production line for white kraftliners, which will be trans-
ferred to Metsä Board, with an annual capacity of approximately 180,000
tonnes. The new bioproduct mill replaced the old pulp mill in Kemi, with an
annual capacity of 610,000 tonnes.
The bioproduct mill will not use any fossil fuels, and its electricity
self-sufficiency is 250%.
15
The investment value of the bioproduct mill is approximately EUR 2.02
billion, composed of internal financing and debt. Metsä Board has not
invested equity in Metsä Fibre to finance the project.
R&D and innovation
In the circular economy for fibre-based packaging material, Metsä Board’s
task is to provide markets with premium fresh fibre paperboards as
resource efficiently as possible, help replace fossil-based materials and
reduce the carbon footprint of packaging. Ensuring and developing the
recyclability and compostability of paperboards is of key importance
Reducing the weight of paperboard is one of the focal areas of Metsä
Board’s product development. Apart from the use of fossil free energy
in production, the light weight of paperboard plays a significant role in
reducing the carbon footprint. In 2023, tailored life-cycle and carbon
footprint calculations and comparisons were carried out as part of the 360
sustainability services. The calculations demonstrated that Metsä Board’s
folding boxboard had a clearly smaller carbon footprint than many other
packaging materials on the market. The company will continue to verify
life-cycle analyses according to the environmental product declaration
(EPD) jointly with its partner.
Lighter-weight packaging and resource efficiency also play a key role
in the pre-engineering of the Kaskinen folding boxboard mill, which aims
for significantly lower wood, energy and water use per tonne of folding
boxboard produced than in current production units.
The development of bio-based barrier coating for end-uses in food
packaging is another focal area in product development. In the biobarrier
programme launched in 2021, the company continued to study new alter-
native products for reducing plastic. Production testing has been carried
out on various product alternatives, and the company is currently exploring
the most promising products for commercialisation.
Metsä Board’s Excellence Centre in Äänekoski offers an active
collaboration environment for the research, innovation and testing of
packaging materials and solutions. In 2023, the Excellence Centre hosted
46 development workshops, organised jointly with customers, focusing on
topics such as reducing the environmental impacts of packaging. Some of
the workshops were organised virtually.
In 2023, Metsä Board’s research and development expenses totalled
EUR 7.3 million (6.1), or 0.4% (0.2) of sales. The costs include direct
expenses, excluding depreciations and operational investments.
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.
The company’s Board of Directors is responsible for the company’s risk
management and approves its risk management policy. Metsä Board
systematically 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 2023.
■ Strategic risks
Development of the world economy
The uncertainty surrounding global development and growth continues.
The higher cost level and the resulting rise in interest rates have slowed
down economic growth worldwide and especially in Europe. Consumers’
low confidence in the economy and weaker purchasing power have reduced
the demand for consumer products. Consumers are becoming increasingly
price-sensitive and are choosing less expensive products. If prolonged, the
situation may further reduce the demand for fresh fibre paperboards and
market pulp and negatively affect Metsä Board’s profitability.
Central banks sought to curb inflation with several interest rate increases
in 2023. While expectations of interest rate cuts have picked up, interest
rates may also remain at the current level or even increase. This could
have negative impacts on the economy, the most significant of which are a
continued weak growth outlook and a prolonged risk of recession, a lower
real income due to high inflation, and a further decrease in consumers’
purchasing power. All of these factors may have an unfavourable impact
on the demand for Metsä Board’s products, business continuity or the
company’s profitability.
Changes in the competitive and 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 reduce the price of end
products and negatively affect Metsä Board’s profitability.
Paperboard imports from Asia to the Middle East, Turkey and South
America have rapidly increased. This has also affected the market balance
elsewhere in Europe. If paperboard imports increase faster than demand,
they could also cause an imbalance in the company’s other market areas
and affect the prices of end products and the company’s profitability. Any
significant changes in exchange rates may 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
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METSÄ BOARD ANNUAL REVIEW 2023
continuity. The acceptability of single-use food and food service packaging
involves regulatory risks.
Impact of the Chinese economy
China is an important market area especially for Metsä Board’s associated
company Metsä Fibre, as nearly half its market pulp is sold to China. Chi-
nese economic growth has slowed down due to challenges in the country’s
real estate market and tight corporate regulation. Domestic consumer
demand has also weakened. In addition, demographic factors and increas-
ing geopolitical tension may affect China’s future economic development.
Should relations between the EU and China deteriorate, or the Chinese
economy and domestic consumer demand slow down further, these may
have a negative impact on the demand for market pulp or paperboards
on the Chinese market and consequently on Metsä Board’s profitability.
Problems in China’s industrial sector may increase the problems and costs
of global delivery chains.
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 demand and market prices and thereby on Metsä Board’s profit-
ability. The market price of pulp strengthening (weakening) by 10% would
have a positive (negative) impact of roughly EUR 50 million on the compa-
ny’s operating result. This sensitivity includes the impact on the associated
company Metsä Fibre, in which Metsä Board has a 24.9% holding.
Geopolitical risks
Russia’s continued military aggression in Ukraine has maintained global
geopolitical tension and has had a negative impact on the economy. The
impact of Russian sanctions and countersanctions, as well as the risks
caused by the crisis, affect areas such as the costs and availability of
production inputs, energy infrastructure and cybersecurity. The ultimate
effects of Russia’s attack on the world economy and the Group’s business
will only become clear over a longer period.
Potential changes in the industrial and trade policies of leading industri-
alised countries, the materialisation of geopolitical risks or an escalation
of geopolitical risks may lead to more extensive measures restricting
trade or the use of international sanctions. The possible consequences of
these include a 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.
Sustainability
Sustainability-related risks and their impacts on the company are sepa-
rately discussed in this report’s Sustainability statement.
■ Operational risks
Cost and availability risks of production inputs
Significant or unforeseen changes in the prices 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 profitability of planned develop-
ment investments at risk.
The discontinuation of wood supply from Russia has made the pulpwood
market situation in the Baltic Sea area tighter. Challenges in the availability
of wood could impact production continuity and thus the sales of the com-
pany’s products and its profitability. Should the conflict in the Middle East
spread, it may affect the price of oil and natural gas. Changes in the prices
of electricity, natural gas or chemicals, or challenges in their availability, as
well as changes in the prices of emission allowances, may have a negative
impact on Metsä Board’s profitability.
In addition, the availability of transport capacity and a steep increase in
market prices may negatively affect the company’s profitability. Attacks
on ships in the Red Sea are hampering sea transports between Europe and
Asia, causing additional costs and delays in deliveries. Prolonged instability
in the region’s safety situation may have a negative impact on the product
deliveries of Metsä Board and its associated company Metsä Fibre and
therefore on Metsä Board’s profitability.
Changes in exchange rates may 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.
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 interfere with Metsä
Board’s production and customer deliveries and have a negative impact on
the company’s business operations.
Continuity risks
The continuity of mills’ production may be impacted by, for instance, large-
scale fires, significant equipment malfunctions, serious accidents, extreme
weather phenomena and environmental damage. In addition, labour dis-
putes, cyberattacks and malware, and the ensuing long-term malfunctions
in IT systems, employees falling ill due to infectious diseases, availability
issues concerning the most important raw materials and disruptions in the
logistics chain may suspend the entire business or parts of it.
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 contingency plans for 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
17
impact on the demand for Metsä Board’s products and the company’s
profitability. Increasing sales on a global scale also involves cost and
exchange rate risks.
The business is also developed by modernising the production tech-
nology, efficiency programmes, product development and harmonising
business processes. If development projects and investments significantly
exceed their costs, or if their completion is delayed or their production
or commercial objectives are not met, this could negatively affect the
company’s profitability.
Corporate and 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.
A cyberattack on information systems could lead to a leak of sensitive
information and damage the company’s reputation. Operating processes
related to corporate security and the guidelines, training and internal
control related to the management of threat factors are developed contin-
uously, and exercises on the management of crisis situations are organised
on a regular basis.
Personnel availability and retention
Metsä Board pays attention to ensuring the availability and retention
of competent personnel by means of various personnel development
programmes and successor plans, and by investing in its employer image.
Metsä Board also prepares for retirements and other personnel risks
through the promotion of multiple skills and work ability as well as through
job rotation.
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 liabil-
ity risks have been hedged with insurance policies.
Business ethics
Risks related to business ethics are discussed in this report’s Sustainability
statement.
■ 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
susceptible to fluctuations in exchange rates. The US dollar strengthening
by 10% against the euro would have a positive impact of approximately
EUR 70 million on Metsä Board’s annual operating result. Correspondingly,
the Swedish krona strengthening by 10% would have a negative impact of
approximately EUR 45 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. Metsä Board’s
customer credit risk was at a normal level in 2023. 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 (Management of financial risks) to the consolidated
financial statements in the 2023 Annual Review.
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. Metsä Board’s shares are listed on the Nasdaq
Helsinki.
At the end of 2023, the closing price of Metsä Board’s B share on the
Nasdaq Helsinki was EUR 7.19. The share’s highest and lowest prices were
EUR 8.96 and EUR 6.26 respectively. Correspondingly, the closing price of
the A share was EUR 7.80; the share’s highest and lowest prices were EUR
13.05 and EUR 7.48 respectively.
In January–December, the average daily trading volumes of the B and A
shares on the Nasdaq Helsinki were around 466,200 shares and around
2,100 shares respectively. The total trading volume of the B share was EUR
874 million, and the total trading volume of the A share was EUR 5 million.
At the end of 2023, the market value of all Metsä Board shares was EUR
2.6 billion, of which the market value of the B shares and the A shares
accounted for EUR 2.3 billion and EUR 0.3 billion respectively.
Metsä Board’s major shareholder Metsäliitto Cooperative holds approx-
imately 52% of Metsä Board’s shares and approximately 69% of votes. As
Metsä Board is an entity controlled by Metsäliitto Cooperative, Metsäliitto
Cooperative’s ownership also includes 701,215 of the company’s own
shares held by Metsä Board.
International and nominee-registered investors held approximately 9%
(15) of all shares. (Source: Euroland)
Governance
Metsä Board’s statutory administrative bodies are the Annual General
Meeting, the Board of Directors and the CEO. The Board of Directors has
general authority and, accounting for the scope and quality of the compa-
ny’s operations, it is responsible for matters that are strategic, far-reaching
and unusual in nature, and therefore not part of the company’s day-to-day
business operations. The company’s operational management is handled
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METSÄ BOARD ANNUAL REVIEW 2023
by the CEO, supported by the Corporate Management Team, the members
of which are not members of the Board of Directors. The tasks and respon-
sibilities 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 2023,
the Board of Directors held 14 meetings, at which the attendance of Board
members was 97% (97 in 2022).
Resolutions of Annual
General Meeting and issue
authorisations
The Annual General Meeting (AGM) of Metsä Board Corporation was held
on 23 March 2023. All the proposals made by the Board of Directors to the
AGM were supported.
The AGM resolved that a dividend of EUR 0.58 per share would be dis-
tributed for financial period 2022. The dividend was paid on 5 April 2023.
The AGM resolved to amend the Articles of Association to include
the Board of Directors’ possibility to arrange, at its discretion, a General
Meeting of Shareholders as a hybrid meeting. In addition, the amendment
enables arranging a General Meeting of Shareholders as a virtual meeting
without a meeting venue.
The AGM resolved to keep the remuneration of the members of the
Board of Directors unchanged, so that the Chair would be paid EUR
99,000, the Vice Chair EUR 85,000, and ordinary members EUR 67,000
per year. In addition, it was resolved to keep the meeting fees unchanged
at EUR 800 for each attended meeting of the Board of Directors and its
Committees. The AGM resolved that half the annual remuneration would
be paid in the company’s Series B shares to be acquired from public
trading. The transfer of such shares is restricted for a two-year period.
Furthermore, the Chair of the Audit Committee will be paid an additional
monthly remuneration of EUR 900.
The AGM confirmed the number of members of the Board of Directors
as nine (9) and elected the following persons as members of the Board of
Directors: Hannu Anttila MSc (Economics), Raija-Leena Hankonen-Nybom
MSc (Economics), Erja Hyrsky MSc (Economics), Ilkka Hämälä MSc
(Technology), Mari Kiviniemi MSocSc (Economics), Jussi Linnaranta,
MSc (Agriculture and Forestry), Jukka Moisio M Sc (Economics), Mikko
Mäkimattila, MSc (Agriculture and Forestry), and Juha Vanhainen, MSc
(Process Technology). The term of office of the members of the Board of
Directors expires at the end of the next AGM.
The AGM resolved to authorise the Board of Directors to decide on the
issuance of shares, the transfer of treasury shares and the issuance of spe-
cial rights referred to in chapter 10, section 1 of the Finnish Companies Act.
The authorisation applies to Series B shares. By virtue of the authorisation
the Board of Directors may issue new shares or transfer treasury shares up
to a maximum of 35,000,000 shares, including shares that may be issued
by virtue of special rights referred to in chapter 10, section 1 of the Finnish
Companies Act. The number of shares corresponds to approximately 10%
of all shares in the company. The authorisation is effective until 30 June
2024.
The AGM resolved to authorise the Board of Directors to decide on the
repurchase of the company’s own Series B shares. The number of the
company’s own shares to be repurchased under the authorisation will not
exceed 1,000,000 Series B shares, which corresponds to approximately
0.3% of all shares in the company. The authorisation is effective until 30
June 2024.
Near-term outlook
The global market environment will remain uncertain, and visibility for the
near-term development of paperboard sales continues to be weak. Higher
costs of living affect consumers’ purchasing behaviour and may reduce
the general demand for consumer products. The value chain is expected to
follow the market situation in its inventory adjustment efforts.
Metsä Board’s paperboard delivery volumes are expected to increase in
the first quarter of 2024 compared with the previous quarter (10–12/2023:
299,000 tonnes). The sales prices of folding boxboard in local currencies
are expected to decrease slightly, and the sales prices of white kraftliners
to remain stable.
The company will continue production adjustment measures if neces-
sary, as well as temporary layoffs at its mills in Finland, in 2024.
In the first quarter of the year, total costs excluding pulp costs are
expected to remain stable. The unstable security situation in the Red Sea
may hamper the sea transport of Metsä Board and Metsä Fibre to Asia and
increase logistics costs.
Demand for market pulp in China may be affected by several paper
and paperboard production shutdowns during the Chinese New Year. In
January–March, market prices for pulp (PIX) are expected to improve
compared to the previous quarter, especially in Europe. The global supply
of long-fibre market pulp is constrained by announced production capacity
closures and wood raw material availability problems, especially in North
America. The demand and price situation for sawn timber is expected to
improve seasonally in the second quarter of 2024.
Board of Directors proposal
for dividend
The distributable funds of the parent company on 31 December 2023 were
EUR 518.9 million, of which the retained earnings for the financial period
are EUR 308.2 million.
The Board of Directors proposes to the Annual General Meeting to be
held on 26 March 2024 that a dividend of EUR 0.25 per share be distributed
for the 2023 financial period.
The proposed dividend corresponds to 94% of the earnings per share for
2023. The amount of dividend totals approximately EUR 88.7 million.
The dividend will be paid to shareholders who are registered in the com-
pany’s shareholders register held by Euroclear Finland Oy on the dividend
payment record date of 28 March 2024. The Board of Directors proposes 9
April 2024 as the dividend payment date.
19
Sustainability statement
General information
Reporting principles
■ Sustainability statement reporting principles
Basic information
Metsä Board Corporation and its subsidiaries form a forest industry
group (“Metsä Board” or “group”). Metsä Board’s business operations
comprise folding boxboards, white kraftliners and market pulp. Reporting
covers the entire group and all the companies in which the group directly
or indirectly holds more than 50% of the votes unless otherwise stated
in connection with the disclosed information. Metsä Board owns 24.9%
of its associated company Metsä Fibre Oy (“Metsä Fibre”), and financial
reporting includes the share of Metsä Fibre’s results and balance sheet
corresponding to this holding. The accounting principles are discussed
in more detail in the consolidated financial statements, under 7. Gro u p
structure. In sustainability reporting, the corresponding share of Metsä
Fibre’s sustainability information is not included in Metsä Board’s own
sustainability information. Instead, Metsä Fibre is accounted for as part of
the value chain. For example, Metsä Fibre’s Scope 1 and Scope 2 emissions
are accounted for in the emissions from Metsä Board’s value chain (Scope
3). Metsä Board is part of Metsä Group, which publishes a Sustainability
statement encompassing all of Metsä Group.
In Metsä Board’s Sustainability statement, reporting mainly focuses on
the Metsä Board Group. As Metsä Board follows Metsä Group’s policies
and processes and uses Metsä Group’s shared services, reference is made
to Metsä Group in some cases. Production unit-specific key figures related
to the environment and employees are disclosed on page 71.
The Sustainability statement is published annually as part of the Report
of the Board of Directors. The reporting period coincides with that of
financial reporting, that is, the financial period from 1 January 2023 to 31
December 2023.
The reporting principles for metrics related to each topic are described
at the end of each section.
Basis for preparation
This Sustainability statement complies with the requirements of the
Global Reporting Initiative (GRI) 2021 standard and the SASB Pulp & Paper
Products industry standard. It also meets the reporting requirements
of the Accounting Act for the reporting of non-financial information, in
accordance with the EU’s Non-Financial Reporting Directive (NFRD). The
progress made in Metsä Board’s strategic 2030 sustainability targets is
also reported in this Sustainability statement. As of 2024, Metsä Board is
bound by the EU’s Corporate Sustainability Reporting Directive (CSRD)
and its reporting requirements, which have guided the content and
structure of this 2023 report.
The disclosed sustainability matters and key figures are based on a
double materiality assessment, conducted in two stages in 2022–2023.
The GRI reporting requirements that are material to the company’s
operations, products and stakeholders were chosen based on the
materiality assessment. The material topics and sustainability targets
based on the materiality assessment were approved in early 2023, and
reporting based on them was initiated in 2023. The materiality assessment
was supplemented in 2023, with attention paid to the requirements of the
European Sustainability Reporting Standards. Further information about
the materiality assessment and its results is provided on pages 26–28.
Selected sustainability information and related claims have been
assured (limited assurance) by KPMG Oy Ab, an independent third party.
Assurance was conducted in accordance with the international assurance
standards ISAE 3000 (Revised) and ISAE 3410.
The reported GRI and SASB information, Metsä Board’s own metrics and
their location in the Sustainability statement are indicated in separately
published indices. The indices present any deviations and omissions from
the GRI and SASB requirements along with the relevant explanations. The
indices also contain further details about the indicator-specific information
that has been assured. In a separate annex, Metsä Board also presents
a table on climate-related risks and opportunities in accordance with the
TCFD requirements.
■ Risk management and internal controls
over sustainability reporting
Metsä Board’s sustainability reporting complies with Metsä Group’s com-
mon principles and processes for statutory reporting, risk management
and internal control.
In sustainability reporting, internal control is based on risk identification,
analysis and a focus on the most material risks identified, as well as the
best practices of internal control. Metsä Group’s internal control unit and
internal control processes, as well as its risk management process, comply
with the principles of the COSO (ERM) framework. The sustainability
reporting control environment emphasises the company’s values,
management’s commitment to sustainable operations, a corporate culture
emphasising ethics and sustainability, policies promoting sustainable
operations, centralised business processes, professional employees, and
transparent operations.
Metsä Board’s Chief Financial Officer, supported by the sustainability
function , is in charge of the implementation of sustainability reporting. In
its sustainability reporting, the company uses Metsä Group head office
functions, especially financial services.
The risks identified in sustainability reporting include the accuracy of
information and the timing of reporting. To ensure that the disclosed infor-
mation is accurate and appropriately timed, Metsä Group has defined and
adopted a governance model that specifies the roles and responsibilities in
sustainability reporting. Metsä Group has included the capacities required
to produce the disclosed information in the common business processes
that Metsä Board and Metsä Group’s other business areas and head office
functions follow in their operations.
The owners of business processes ensure that the process environment
can transparently produce the required information for disclosure. The
responsibility for the accuracy of content, as well as compliance with
reporting schedules and the provision of material to Group Accounting,
is assigned to the roles in Metsä Group’s business areas and head office
functions specified in the governance model.
To ensure the accuracy and timeliness of disclosed information, internal
controls have been adopted in Metsä Group as part of the common busi-
ness processes. Their systematic monitoring is part of the internal control
unit’s reporting.
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METSÄ BOARD ANNUAL REVIEW 2023
The internal control unit reports on the efficiency of the sustainability
reporting controls according to the specified schedule monthly, quarterly,
twice a year or once a year in compliance with the common governance
model and process of internal control. The results of internal control are
monitored, and control is supervised by Metsä Board’s and Metsä Group’s
Audit Committee and Corporate and Executive Management Team,
respectively, as well as by Metsä Group’s shared services and the manage-
ment team for process development. Internal audit inspects sustainability
reporting controls and internal control practices as part of its audit work.
Sustainability governance and strategy
■ The role of, information provided to and
sustainability matters addressed by the adminis-
trative, management and supervisory bodies
This sustainability statement provides details about sustainability govern-
ance. Further information about the general duties, composition, diversity
and experience of the administrative and supervisory bodies, as well as
the processes of internal control, internal audit and risk management is
available in the Corporate Governance Statement.
Sustainability governance at Metsä Board
Sustainable and ethical operations, as well as compliance with the law,
are the foundation of Metsä Board’s business operations. The Board of
Directors, CEO and Corporate Management Team are responsible for sus-
tainability matters. Metsä Board’s operating methods are based on Metsä
Group’s Code of Conduct and policies adopted by Metsä Board’s Board
of Directors. The company’s sustainability targets are based on Metsä
Board’s strategy, the materiality assessment of sustainability matters and
Metsä Group’s sustainability targets.
The seven themes guiding sustainability work, the 2030 sustainability
targets, as well as the summary and process of the materiality assess-
ment, are described under Material sustainability-related impacts, risks and
opportunities.
The impacts, risks and opportunities related to sustainability, as well
as their management methods, are described in the Sustainability state-
ment’s sections on the environment, social responsibility and governance
and in the Report of the Board of Directors, under Most significant risks and
uncertainties.
Sustainability governance at Metsä Board
Board of Directors
CEO and Corporate Management Team
Product Safety and
Sustainability function
Business functions
Metsä Group Sustainability Process
Management Team
Board of Directors
Metsä Board’s Board of Directors is the company’s highest body
overseeing sustainability. It approves the Metsä Group Code of Conduct
and policies, including policies related to the procurement, HR, antitrust,
quality, risk management, contracts, legal, data protection, information
security, taxation, communication, equality, environmental and corporate
security, as well as more detailed guidelines issued based on them, which
guide the company’s operations and internal control. The company’s Board
of Directors approves Metsä Board’s sustainability targets as part of the
company’s strategy and supervises their achievement. The policies and
targets are updated should any changes that must be addressed take place
in the operating environment.
Sustainability is incorporated into the company’s strategy, long-term
business and investment plans, risk assessments and annual action
plans approved by the Board of Directors. In accordance with the annual
cycle, the Board of Directors handles the environmental review and the
sustainability review once a year. The Board also discusses other sustain-
ability-related matters if required and consults with the company’s and
Metsä Group’s internal sustainability specialists.
In the 2023 financial period, the Board of Directors convened 14 (2022:
13) times and discussed the following sustainability topics at its meetings:
• Adopting the 2030 sustainability targets
• The CEO made quarterly presentations of the company’s 2030
sustainability targets and the key sustainability figures, as well as the
most significant risks and uncertainties related to the environmental,
employee and social matters.
21
• The CEO presented one environmental review, including matters such
as the most significant observed environmental risks and adverse
events.
• The SVP, Development and Metsä Group’s sustainability specialist
presented one sustainability review, discussing matters such as the
company’s plan for transitioning to fossil free production and the actual
progress made in the 2030 sustainability targets.
• The SVP, Development presented two R&D reviews, including a plan for
innovations to support the achievement of the 2030 sustainability tar-
gets, create new products and improve the company’s competitiveness.
• The CEO reported on occupational accidents monthly and presented
one review of accidents and one follow-up review of the development of
the company’s occupational safety.
• The Board of Directors discussed Metsä Group’s new service related to
wood supply, which aims to improve biodiversity, once.
• The Board of Directors discussed a legal affairs review once, including
topical information about regulatory reforms concerning the Board of
Directors’ and the company’s operations.
• The Board of Directors decided on updates to several of the company’s
policies and guidelines.
• In the 2023 financial period, the Board members, CEO and Corporate
Management Team completed an e-learning course on the company’s
insider guidelines.
Board Committees
To ensure the efficient management of the Board’s duties, the Board of
Directors has appointed an Audit Committee and a Nomination and HR
Committee from among its members. They prepare the decisions made by
the Board and support the Board in its supervisory role.
The Audit Committee’s tasks are determined by the Limited Liability
Companies Act and the Committee’s written Rules of Procedure approved
by the Board. Among other things, the Audit Committee assesses the effi-
ciency and scope of internal control, internal audit and risk management
systems, key risk areas, and compliance with the law and regulations.
It also approves the annual plan for internal audit and reviews the audit
reports. In addition, the Audit Committee discusses the information secu-
rity review twice a year and the compliance review once a year. The results
of the company’s risk assessment are presented to the Audit Committee
twice a year. The risk assessment results also include any sustainability-re-
lated risks, to the extent that these are assessed to be of key importance to
achieving the company’s operational targets.
The tasks of the Nomination and HR Committee are defined in the Com-
mittee’s written Rules of Procedure approved by the Board of Directors.
Among other things, the Committee assesses the effectiveness of human
resource management processes, including occupational health and
safety and the wellbeing and development of employees. The Committee
reviews the results of employee surveys, assesses the results of studies
measuring the ethics of activities, prepares the forms of remuneration and
incentive schemes, and approves their key principles and criteria It also
supervises the implementation of social responsibility in remuneration and
appointment matters and the company’s other operations, including the
realisation of human rights and the employees’ workplace wellbeing. The
Committee also prepares a proposal on the Board’s composition to the
Annual General Meeting, and in connection with preparing the proposal, it
annually reviews and assesses the Board’s independence, experience and
competence, for example.
In the 2023 financial period, the Board’s Audit Committee convened
five (2022: 4) times and discussed the following sustainability topics at its
meetings:
• The CEO made quarterly presentations of the company’s key sustain-
ability figures, the strategic sustainability targets up to 2030, and the
most significant risks and uncertainties related to the environmental,
employee and social matters.
• Metsä Group’s VP, Compliance and Ethics presented one compliance
review to the Audit Committee, including a report of misconduct cases
examined in the company, completed e-learning courses, the results
of the employees’ ethics barometer, and a plan for the development of
diversity and equality.
• The Audit Committee twice discussed an information security review
concerning the company’s information security risks and measures.
• Metsä Group’s internal auditor presented the company’s internal audit
report and action plan twice.
• The Audit Committee once discussed the annual internal control
monitoring report, which includes key sustainability controls and their
results.
• The Audit Committee discussed regulatory development related to
sustainability reporting three times.
CEO and Corporate Management Team
Metsä Board’s CEO is in charge of the implementation of sustainability
measures in accordance with the Board’s instructions. Once a year, the
CEO reports to the Board on material impacts, risks and opportunities
related to sustainability and on the progress made in sustainability targets
by presenting a sustainability review and a separate environmental review
to the Board, either alone or jointly with the company’s sustainability
specialists In addition, the CEO presents to the Board of Directors an
occupational safety review and, jointly with the SVP, Development, an
R&D review once a year. The CEO reports to the Board without delay on all
sustainability-related risks with a significant impact on the company.
The company’s Corporate Management Team prepares sustainabili-
ty-related matters before the CEO presents them to the Board of Directors
and for its part, supervises the implementation of the approved sustaina-
bility measures and sustainability-related impacts, risks and opportunities
regularly at its meetings.
Of the Corporate Management Team’s members, the SVP, Development
is responsible for research and product development, business develop-
ment and sustainability. The SVP, Development reports monthly to the
Corporate Management Team on topical sustainability-related matters
that affect the company. Metsä Board’s and Metsä Group’s sustainability
specialists present a review of sustainability matters to the Corporate
Management Team twice a year. The SVP, Development participates in the
management team of Metsä Group’s sustainability process and reports the
results of sustainability measures to the team quarterly.
The SVP, Development manages Metsä Board’s product safety and
sustainability function, which includes the company’s Product Safety and
Sustainability Director and several specialists. The team works in close
cooperation with production, wood supply, procurement and logistics,
HR, marketing and sales, communications, investor relations, finance, and
legal affairs. Wood supply and procurement are centrally handled in Metsä
Group. The SVP, Development ensures that the sustainability principles
and targets defined by the company are integrated into the daily work
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METSÄ BOARD ANNUAL REVIEW 2023
of employees, and that the company’s suppliers, customers and other
partners are also required to operate sustainably.
In addition, the company’s CFO heads Metsä Board’s Risk Committee,
which handles sustainability risks as part of the company’s general risk
assessment.
The Corporate Management Team regularly discusses reviews related
to occupational safety, the environment, energy, information security and
compliance. In addition, the Corporate Management Team discusses the
internal control monitoring report, including sustainability controls and
their results, twice a year
The expertise and skills of Board members
regarding sustainability
The sustainability-related expertise and skills of Metsä Board’s Board
members are ensured with regular sustainability, environmental and
compliance reviews in accordance with the annual cycle, which provide
the Board members with information about material impacts, risks and
opportunities related to the company’s sustainability, and the progress
made in the company’s sustainability targets. The reviews are presented
by the company’s and Metsä Group’s internal specialists in various fields.
If required, the Board of Directors and its committees can also acquire
third-party expertise in sustainability matters. Several Board members
have many years of experience of sustainability-related impacts risks and
opportunities concerning the company’s branch of industry and its prod-
ucts, which they have acquired from operative duties or positions of trust.
Good governance
In its 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, as well as the rules and
recommendations of Nasdaq Helsinki as applicable to listed companies.
As a Finnish listed company, Metsä Board complies with the Corporate
Governance Code for Finnish listed companies, effective as of 1 January
2020, which was issued by the Securities Market Association and contains
recommendations on good governance. The Code is available at www.
cgfinland.fi/en. Metsä Board does not currently depart from the Code’s
recommendations.
The Board of Directors and the CEO are in charge of Metsä Board’s
administration. At Metsä Board, good governance is ensured with clear
management and leadership, internal control, and internal auditing.
External auditing is handled by the company’s auditor.
The goal of internal control is to ensure the achievement of the
company’s goals and targets; the economical, appropriate and efficient
use of resources; the reliability and correctness of financial and other man-
agement information; compliance with external regulations and internal
policies; sufficient security of operations, information and property; and
adequate and appropriately arranged manual and IT systems to support
operations.
The company’s internal audit assists the Board in its supervisory
role and supports Metsä Board and its management in achieving the
company’s targets by providing a systematic approach to assessing and
improving the effectiveness of risk management, control, governance
and management processes. The processes and tasks of Metsä Board’s
internal control and audit are described in more detail in Metsä Board’s
Corporate Governance Statement.
The Board of Directors’ tasks include approving the key business policies
and orders aimed at ensuring Metsä Board’s compliance with the law and
the company’s internal business principles.
All the Board members have gained significant experience of good
governance from their previous duties in operative management and/
or as Board members in a listed company or another large corporation.
The Board members annually complete training in the company’s insider
guidelines.
■ Integration of sustainability-related
performance in incentive schemes
At Metsä Board, remuneration is based on the following principles:
• Ensuring sustainable and responsible business operations
• Ensuring performance and profitable growth
• Supporting competence development and renewal
• Consistency, competitiveness and transparency
To ensure the sustainability and responsibility of its business, Metsä Board
uses remuneration to support the achievement of its strategic, operational
and sustainability targets. The company encourages activities in line with
its values and interests – responsible profitability, reliability, renewal and
cooperation.
The principles of Metsä Board’s remuneration and the overall remu-
neration of the administrative, management and supervisory bodies are
described in more detail in the Remuneration Report and Remuneration
policy.
The Board of Directors approves the CEO’s salary and remuneration,
as well as the principles applied to the remuneration of other members of
the Corporate Management Team. The Board of Directors also approves
the structure, target group, principles and indicators of the company’s
remuneration schemes and the relevant target values for the indicators.
The Board of Directors’ Nomination and HR Committee assists the Board
in handling matters related to the remuneration, terms of employment and
rewarding of management and prepares the Board’s decisions concerning
management remuneration. The CEO decides on the compensation of
other Corporate Management Team members in cooperation with the
Chair of the Board of Directors and in accordance with the principles
approved and guidelines issued by the Board. The remuneration of the
Board of Directors is not linked to Metsä Board’s performance.
In 2023, sustainability was included in the annual personal goals of
every Metsä Group employee. The target-setting model will continue to
encourage the continuous assessment and improvement of sustainability
matters. In 2023, the maximum level of remuneration available in the
CEO’s short-term incentive system was, accounting for Metsä Group’s EBIT
multiplier, 75% of the fixed annual salary. The reward is based on Metsä
Board’s operating result (50% weighting) and the strategic targets defined
by the Board of Directors (50% weighting), as well as the realisation of
Metsä Group’s EBIT multiplier. In 2023, the CEO’s sustainability targets
were related to Metsä Board’s 2030 sustainability targets, including
occupational safety and strategic projects, the aim of which is to reduce
fossil-based CO
2
emissions, promote the use of fossil free raw materials
and reduce process water use in production.
In 2023, the maximum level of remuneration available in the short-term
incentive system for other Corporate Management Team members was,
23
accounting for Metsä Group’s EBIT multiplier, at most 50% or 62.5% of the
fixed annual salary. The reward is based on Metsä Board’s operating result
(50% weighting) and the targets of the own responsibility area, including
sustainability targets (50% weighting), as well as the realisation of Metsä
Group’s EBIT multiplier. In 2023, the Corporate Management Team
members’ individual sustainability targets were related to Metsä Board’s
2030 sustainability targets such as occupational safety, the promoting
of an ethical corporate culture, water use, the development of fossil free
products and the reduction of fossil-based CO
2
emissions.
■ Business model, value chain and strategy
Business model and value chain
Metsä Board uses renewable raw materials to produce premium
resource-efficient fresh fibre paperboards that support the principles of
the circular economy and offer an alternative to fossil-based packaging
materials. The company is Europe’s leading producer of folding boxboard
and white kraftliners, and the world’s largest producer of coated white
kraftliners. In 2023, folding boxboard accounted for 59% of sales, while
24% of sales came from white kraftliner, 13% from market pulp, and 4%
from other operations.
Metsä Board’s folding boxboard is mainly used in consumer product
packaging like food and pharmaceutical packaging. The end uses of white
kraftliners are related to various packaging needs in the retail sector.
The company also produces chemical pulp and bleached high-yield pulp
(BCTMP), which are used in its own paperboard production, with some
sold as market pulp.
Metsä Board sells paperboard and market pulp worldwide. The com-
pany’s main market areas are Europe and North America. Key customer
groups include international brand owners, paperboard converters, man-
ufacturers of corrugated products and the retail sector. The company’s
competitiveness is supported by its delivery reliability and service concept,
which helps customers deal with various packaging challenges, such
as reducing the carbon footprint of packaging, reducing plastic use and
improving production efficiency.
Metsä Board employs approximately 2,300 people in 17 countries.
Metsä Board’s eight production units are located in Finland and Sweden,
close to its main raw material, high-quality northern wood fibre.
Metsä Board is part of Metsä Group, the parent company of which is
Metsäliitto Cooperative, owned by approximately 90,000 Finnish forest
owners. Metsä Board benefits from Metsä Group’s value chain, which
extends from the wood fibre of northern forests to the end products. Metsä
Board does not own forests. The procurement of wood raw material is han-
dled centrally through Metsä Group from forests that are regenerated after
harvesting, and where attention is paid to biodiversity. Further information
about biodiversity is disclosed in section E4 – Biodiversity and ecosystems.
In Finland, most of the wood is procured from Metsäliitto Cooperative’s
owner-members, who together own around half of Finnish private forests.
This accounts for 31 per cent of all the forests in Finland. In Sweden, wood
is mainly procured from Norra Skog’s owner-members, who own around 17
per cent of all the forests in Sweden. Norra Skog has a 30 per cent holding
in Husum Pulp AB, Metsä Board’s subsidiary, which owns the Husum pulp
mill.
Metsä Board’s competitiveness is strengthened by its high pulp and
energy self-sufficiency. The company’s own pulp production and a 24.9 per
cent holding in Metsä Fibre secure its self-sufficiency in pulp and ensure
the high and consistent quality of its end products. The company covers
its energy consumption especially with its own production, electricity pur-
chased from its associated company Metsä Fibre and electricity purchased
at cost price from Pohjolan Voima, in which Metsä Board has a 2.6 per cent
holding. Metsä Board’s energy self-sufficiency is approximately 90 per
cent.
The procurement of other raw materials and services is centrally
handled by Metsä Group’s procurement and logistics unit, which strives,
through its procurement process, to ensure that partners operate sustain-
ably. Relationships with goods and service suppliers are discussed under
section G1 − Business conduct. The resources used by Metsä Board and
the company’s output are discussed under section E5 − Resource use and
circular economy and in the Annual Review, under Value creation.
Strategy
According to its strategy, Metsä Board aims to grow in fibre-based
packaging materials and renew its industrial operations. The company is
implementing its strategic programmes, including investments in growth
and development, which improve the mills’ production and resource
efficiency and reduce the carbon footprint of products.
The company’s decision-making is guided by financial and sustainability
targets and long-term shareholder value growth. Metsä Board focuses
on the continuous improvement of cost-effectiveness and on customers
who benefit from the high performance of the company’s products and
services. The company’s long-term goal is to achieve at least a 12 per
cent comparable return on capital employed (ROCE) and keep the ratio of
interest-bearing net liabilities and comparable EBITDA below 2.5.
■ Interests and views of stakeholders
Metsä Board interacts with its key stakeholders and develops its opera-
tions based on stakeholder feedback. In 2023, Metsä Group developed its
operating model for stakeholder engagement by defining management
processes for it. The processes will be implemented during 2024. They will
enable an increasingly systematic identification and active engagement
of key stakeholders and the collection and processing of stakeholder
feedback. The processes will also ensure that the feedback is taken into
account in the company’s operational development and decision-making.
According to the processes, stakeholders’ main messages and key
feedback are regularly reported to Metsä Board’s Board of Directors and
Corporate Management Team.
The views of stakeholders were used in the double materiality assess-
ment carried out in 2022, based on which Metsä Board determined the
sustainability themes material to the company’s operations. These themes
serve as the focal areas for the company’s sustainability development.
The materiality assessment is discussed in more detail under Material
sustainability-related impacts, risks and opportunities.
Stakeholder feedback is used in risk management and as a basis for
new cooperation projects, examples of which are included in section S3 –
Affected communities.
24
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL REVIEW 2023
Interests and views of stakeholders
This table includes a summary of Metsä Board’s key stakeholders and of how themes important to them are considered in the company’s strategy and
business model.
Stakeholder Stakeholder engagement Themes important to stakeholders
Impact on operations, business model and
strategy
Own workforce • Employee survey and Pulse survey
• Ethics barometer
• Cooperation with employee representatives
• Safety and health at work and related
observations
• Health and safety
• Diversity, equality and inclusion (DEI)
• Competence development and good leadership
• Working conditions and other work-related
rights
• Certified safety management systems
• Metsä for all vision
• Anonymous recruitment
• Metsä Group’s academies and other training
• Development of leadership and key capabilities
• Measures determined based on the ethics
barometer
Customers, consumers
and end-users
• Customer experience surveys
• Customer feedback forms
• Bilateral meetings
• Events and training
• Materiality assessment
• Sustainability assessments
• Contact forms on web pages
• Sustainable products
• Product safety and quality
• Product information
• Sustainable forest management and
biodiversity
• Recyclable products with a small carbon foot-
print that replace fossil-based materials
• Resource-efficient production
• Product safety and quality
• Wider use of product information
• Forest certification and regenerative forestry
Investors, analysts and
other capital market
representatives
• Investor meetings and events coordinated by
the company and/or brokerage firms, including
mill visits
• Annual General Meeting
• Regular dialogue
• Materiality assessment
• Climate change mitigation and emissions
reduction across the value chain
• Biodiversity and availability of wood raw
material
• Human rights and diversity
• Management of sustainability risks and good
governance
• Investments in fossil free production and
products and the improvement of the mill’s
production and resource efficiency
• Forest certification and regenerative forestry
• Metsä for all vision
• Sustainability targets in management
remuneration
• Definition and management of sustainability
risks
Suppliers and workers in
the supply chain
• Supplier days
• Cooperation forums for occupational safety
• (Anonymous) cooperation survey for suppliers
• Materiality assessment
• Compliance and Ethics Channel
• Sustainability working group activities with
partner suppliers
• Bilateral meetings
• Safety and health
• Working conditions and other work-related
rights
• Climate change
• Biodiversity
• Sustainable forest management
• Circular economy
• Sustainable supply chain
• Harmonised safety management system for
the company’s own and service providers’
employees
• Proactive operating model to combat the grey
economy in construction projects
• Joint sustainability targets with partner
suppliers
• Measures defined based on the cooperation
survey for suppliers
• Assessment of suppliers’ sustainability as part
of the supplier selection process and continu-
ous supplier assessment
Policymakers • Public hearings
• Bilateral meetings
• Events, seminars and panels
• Surveys
• Organisation of visits
• Compliance and Ethics Channel
• Materiality assessment
• Circular bioeconomy
• Reducing environmental impacts
• Climate change mitigation
• Reducing fossil emissions
• Safeguarding biodiversity
• Logistics and public infrastructure
• New products and innovation
• Renewal and jobs
• New investments
• Fossil free energy
• Resource-efficient production
• Waste-free production
• Recyclable products with a small carbon foot-
print that replace fossil-based materials
• Regenerative forestry, Metsä Group’s nature
programme and biodiversity plans on mill sites
Lobbying and industrial
associations
• Bilateral meetings
• Events, seminars and panels
• Materiality assessment
• Safeguarding biodiversity
• Climate change adaptation
• Climate change mitigation
• Advocacy cooperation
• Regenerative forestry
• Biodiversity roadmap of the Finnish Forest
Industries Federation
• Recyclable products with a small carbon foot-
print that replace fossil-based materials
Researchers, educational
institutions and students
• Surveys
• Cooperation projects
• Cooperation events
• Organisation of visits
• Recruitment events
• Thesis assignments and traineeships
• Materiality assessment
• Research and development cooperation
• Education, training and competence
• Investments and jobs
• Learning, training and education
• Working life
• Diversity, equality and inclusion
• Joint research and development projects
• Metsä Group’s nature programme
• Education and training cooperation and
partnerships
• Jobs and traineeships
• Student guidance and induction
NGOs • Bilateral meetings
• Events, seminars and panels
• Materiality assessment
• Project cooperation
• Organisation of visits
• Compliance and Ethics Channel
• Safeguarding biodiversity
• Old-growth forests
• Carbon sinks and climate change
• Forests as carbon sinks and stocks
• Forest protection
• Rehabilitation of forest nature
• Forest management methods
• Forestry’s impact on waterbodies
• Rights of indigenous peoples
• Regenerative forestry
• Forest protection (incl. METSO programme)
• Biodiversity roadmap of the Finnish Forest
Industries Federation
• Biodiversity plans on mill sites
• Metsä Group’s nature programme
25
Material sustainability-related impacts,
risks and opportunities
■ The identification and assessment of
material impacts, risks and opportunities
Metsä Board’s sustainability-related material impacts, risks and oppor-
tunities have been identified in a double materiality assessment based on
the principles of the company’s risk management process. The risk man-
agement process complies with the COSO Enterprise Risk Management
methodology. The key goal is to identify and assess the risks, threats and
opportunities potentially significant to the implementation of the compa-
ny’s values and strategy and to the achievement of long-term targets, as
well as to identify and assess the company’s impacts on society and the
environment. In addition to the company’s own operations, the identifi-
cation and assessment of impacts, risks and opportunities encompasses
the upstream and downstream value chain and any other parties that the
company’s operations affect. Metsä Board’s risk management process and
its responsibilities are described in more detail in the Corporate Governance
Statement.
Metsä Board updated its materiality assessment of sustainability
matters in 2022−2023 in cooperation with Metsä Group. The updating of
the materiality assessment proceeded in two phases. In the first phase,
in 2022, the views of external and internal stakeholders of the company’s
real and potential impacts, risks, and opportunities were collected through
interviews and surveys. The stakeholders interviewed included the
company’s own employees, as well as its customers, investors, goods and
service suppliers, and NGOs. Based on the material collected, the impacts,
risks and opportunities were prioritised in management workshops. The
prioritisation was based on double materiality, meaning that the workshop
participants paid attention to the company’s impacts on the environment,
society, employees and other stakeholders, as well as on the qualitative
and financial risks to and opportunities for the company’s business related
to sustainability matters. The likelihood and scope of the impact, risk or
opportunity were considered in prioritisation.
Material sustainability topics
Theme Topic Sub-topic Materiality 2030 target
E – ENVIRONMENT
1. Safeguarding biodiversity
and the ecological sustainability
of forest use
2. Mitigating climate change
and reducing emissions
3. Resource efficiency
and sustainable production
E1 Climate change
Climate change mitigation 10 √
Climate change adaptation 10 √
Energy 9
√
E2 Pollution
Pollution of air, water and soil 7
Microplastics 6
E3 Water and marine
resources
Water
6
√
E4 Biodiversity
and ecosystems
Direct impact drivers of biodiversity loss 10
√
Impacts on the state of species and the extent and condition of ecosystems 11
√
Impacts and dependencies on ecosystem services 12
√
E5 Resource use
and circular economy
Resources inflows, including resource use
9
√
Resource outflows related to products and services 10
Waste and side streams 6 √
S – SOCIAL RESPONSIBILITY
4. Respecting everyone
and doing the right thing
5. Promoting safety
and wellbeing at work
S1 Own workforce
Equal treatment and opportunities for all 9 √
Health and safety 11 √
Other working conditions 7
√
Other work-related rights 5
S2 Workers in the
value chain
Health and safety 12
√
Other working conditions 8
√
Other work-related rights 7
√
S3 Affected communities
Communities’ economic, social and cultural rights
6
Rights of indigenous peoples 9
S4 Consumers
and end-users
Personal safety of consumers and end-users 8
Information-related impacts on consumers and end-users 6
G – GOVERNANCE
6. Innovation and open-minded
cooperation
7. The significance of forest-based
bioeconomy to society
G1 Business conduct
Corporate culture 8 √
Corruption and bribery 8
Management of relationships with suppliers including payment practices 8
√
Protection of whistle-blowers 6
Political influence and lobbying activities 6
26
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METSÄ BOARD ANNUAL REVIEW 2023
At the end of the first phase, seven themes guiding all Metsä Group’s
sustainability work were determined. They are described in the summary
of the materiality assessment, on page 26. The themes were used as the
basis for updating Metsä Group’s strategic 2030 sustainability targets,
which also guided Metsä Board’s target setting. Metsä Board’s Board of
Directors adopted the themes and the updated targets in early 2023. The
framework of the EU’s sustainability reporting standards was not yet used
in the first phase to classify sustainability themes.
The second phase of the materiality assessment was initiated in 2023,
the goal being to include the classification of sustainability impacts, risks
and opportunities in line with the EU’s sustainability reporting standards
(topics, sub-topics and sub-sub-topics) and consider the directive’s
guidelines on the prioritisation of impacts, risks and opportunities in
the materiality assessment. As part of the work carried out in 2023, an
assessment scale, found on page 27, was drawn up. The scale standardised
for Metsä Group’s risk management process was used to assess likelihood.
Impacts are assessed based on their scale, scope, duration and remedia-
bility. Risks and opportunities to Metsä Board’s business were assessed
based on the monetary values and reputational risks defined in the risk
management process, and in the case of risks, on remediability. The
assessment of impacts, risks and opportunities was expanded from the
previous year to cover the sub-topics and sub-sub-topics specified in the
EU’s sustainability reporting standards. As a result, the impacts on workers
in the value chain, affected communities, consumers and end-users could
be better accounted for. Remediability was assessed on the following scale:
short-term (less than one year), medium-term (1−5 years), long-term (5−10
years), very long-term (10−30 years) and irremediable.
The work carried out in 2023 did not lead to any changes to the seven
sustainability themes guiding sustainability work or the 2030 sustainability
targets.
Assessment scale for impacts, risks and opportunities
Likelihood
Annual Very likely 5 5 10 15 20 25
In the next three
years
Likely 4 4 8 12 16 20
In the next six
years
Possible 3 3 6 9 12 15
In the next ten
years
Unlikely 2 2 4 6 8 10
Unlikely in the
next ten years
Very unlikely 1 1 2 3 4 5
1 2 3 4 5
Financial impact Very limited Limited Moderate Significant Very significant
Reputation
Local mention, quickly
forgotten
Local harm to reputa-
tion, impact on local
operations
Short-term national con-
cern, long-term impact
on reputation
Long-term national
concern, significant
change in market share,
significant operations
restricted
Long-term national
concern, decisive change
in market share
Impact on the wellbeing of society,
nature and other stakeholders
Very limited impact on
individuals and/or the
local environment
Limited impact on a
group of people and/or
the regional environment
Moderate short-term
impact on society and/or
the environment
Significant short-term
impact on society and/or
the environment
Severe long-term impact
on society and/or the
environment
Impact
27
Based on the results of the materiality assessment, Metsä Board’s key sus-
tainability matters include climate change, biodiversity, the environmental
impacts of products, and the occupational safety of the company’s own
workforce and value chain workers. The results of the materiality assess-
ment are presented on page 26. Sub-topics classified as moderate (a value
of 5–9) or high (a value of 10–25) were determined as material sub-topics.
The table does not include sub-topics of low materiality.
The results of the materiality assessment and the general annual risk
assessment process guide the management of sustainability risks. Metsä
Group’s internal control unit monitors and reports on sustainability risks
to Metsä Board’s Corporate Management Team and Audit Committee
in accordance with Metsä Group’s general internal control governance
model and the annual cycle. The control of sustainability risks is planned,
described and implemented on a risk basis in business processes. Control
is carried out in accordance with Metsä Group’s general model for internal
control. Internal controls are described in more detail in the Corporate
Governance Statement.
Metrics and targets
TARGET 2030 TARGET
2023 ACTUAL 2023 PROGRESS
UN SDG
E – ENVIRONMENT
1. Safeguarding biodiversity and the ecological sustainability of forest use
MG: Retention trees on regeneration felling sites, % 100 96
•
13, 15
MG: High biodiversity stumps on harvesting sites, % 100 92
•
13, 15
MG: Spruce as the only tree species after young stand management, % 0 25
•
13, 15
MG: Measures promoting biodiversity, number 10,000 816
•
13, 15
2. Mitigating climate change and reducing emissions
Improvement in energy efficiency from the 2018 level, % +10 -5.8
•
7, 12, 13
Fossil-based carbon dioxide emissions (Scope 1 and Scope 2 market-based), t 0 184,713
•
12, 13
Share of target group suppliers with targets set in accordance with the SBTi by 2024
(Scope 3), %
70 19
•
13
Fossil free raw materials and packaging materials, share of dry tonnes, % 100 98.8
•
9, 12
MG: Amount of forest regeneration and young stand management from the 2018 level, % +30 +14
•
13, 15
MG: Amount of forest fertilisation from the 2018 level, % +50 -26
•
13, 15
MG: Share of continuous cover forestry in peatland forest regeneration, % 30 17
•
13, 15
MG: Amount of carbon stored in wood products from the 2018 level, % +30 -21
•
12, 13
3. Resource efficiency and sustainable production
Reduction in process water use per produced tonne from the 2018 level, % -35 +2.0
•
6, 12
Process waste delivered to landfills, t 0 1,164
•
12
S – SOCIAL RESPONSIBILITY
4. Respecting everyone and doing the right thing
Anonymous recruitment for vacancies open to all, % 100 72
•
5, 8
Women in management positions, % >30 21
•
5, 8
5. Promoting safety and wellbeing at work
Total recordable incident frequency, own employees (TRIF) 0 6.1
•
8
Employee job satisfaction AAA A+
•
5, 8
G – GOVERNANCE
6. Innovation and open-minded cooperation and 7. The significance of forest-based bioeconomy to society
Implementation of ethics barometer measures, % 100 100
•
5, 8
Traceability of raw materials, share of total purchases, % 100 97
•
9, 12
Share of certified wood fibre, % >90 91
•
15
Suppliers’ commitment to the Supplier Code of Conduct, share of total purchases, % 100 99.0
•
8, 12
Supplier assessments and audits of core suppliers, % 100 68
•
8, 12
MG: Joint sustainability targets with partner suppliers, % 100 100
•
12, 13
MG: The target has been set at the level of Metsä Group.
Targets will be reached by the end of 2030. For example, fossil fuels will be abandoned by 31
December 2030.
Metsä Board’s target of “0 accidents at work” also applies to service suppliers. In future, service
suppliers will be included in the performance figure.
The targets for different topics are described in more detail in the topic-specific sections of this
Sustainability statement.
Progress in 2023 compared with the previous year.
Exceeds target (significant progress)
•
On target (progress as planned)
•
Short of target (no progress or weaker progress)
•
28
REPORT OF THE BOARD OF DIRECTORS
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METSÄ BOARD ANNUAL REVIEW 2023
E – Environment
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, listing
economic activities sustainable in terms of climate and the environment.
The goal of the Taxonomy is to direct money to sustainable investments so
that the EU can achieve its ambitious emission reduction targets.
The Taxonomy does not currently include technical screening criteria for
Metsä Board’s main business operations, the paperboard and market pulp
businesses.
■ Taxonomy reporting
The taxonomy defines six main environmental objectives against which
the company’s different economic activities are assessed. These
environmental objectives are: (a) climate change mitigation, (b) climate
change adaptation, (c) sustainable use and protection of water and marine
resources, (d) transition to a circular economy, (e) pollution prevention and
control, and (f) protection and restoration of biodiversity and ecosystems.
For the 2023 financial period, Metsä Board discloses its taxonomy-eligible
business activities in terms of all six environmental targets, as well as its
taxonomy-aligned business activities in terms of climate change mitigation
and adaptation. Business disclosures include the share of sales, capital
expenditure and operating expenditure.
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, the activity must meet minimum social
safeguards.
Metsä Board has carried out its assessment of taxonomy eligibility and
taxonomy alignment based on the EU Taxonomy Regulation, the Climate
Delegated Act and the best interpretation of the currently available
guidelines issued by the European Commission. Metsä Board’s specialists
in each topic have assessed whether the financial operations indicated in
the Taxonomy meet the criteria of taxonomy alignment. For each financial
operation, the assessment considered the criteria for ‘significant contribu-
tion’ and ‘no significant harm’ to determine taxonomy alignment. Minimum
safeguards were examined at the company level. Metsä Board was also
supported by external specialists in the assessment. The assessment and
its results have also been externally assured.
In Metsä Board’s opinion, the company meets the Taxonomy’s minimum
social safeguards, which cover human rights, corruption and bribery, fair
competition and taxation. The company has reviewed each of these from
two perspectives: the presence of relevant processes and the addressing
of violations. For example, human rights due diligence is described in more
detail under this Sustainability statement’s sections S – Social responsibility
and G – Governance.
■ Reporting principles
Turnover
In the calculation of the key figure for turnover, Metsä Board applies the
same IFRS-compliant accounting principles applied in the consolidated
financial statements. The overall turnover used to calculate the key
figure corresponds to the turnover disclosed in the consolidated financial
statements. The accounting principles used for turnover are discussed in
Note 2.2 to the consolidated financial statements.
In category 4.20 (cogeneration of heat/cool and power from bioenergy),
the Group’s taxonomy-aligned turnover includes the turnover of electric
power produced with bioenergy at the Husum pulp mill.
Taxonomy-eligible turnover in category 4.20 includes the turnover of
district heat produced at the Simpele and Kyro power plants to the nearby
regions.
Capital expenditure
Metsä Board’s taxonomy-eligible capital expenditure includes additions to
tangible and intangible fixed assets, including any additions to right-of-use
assets recognised based on long-term lease agreements. Any increase in
goodwill recognised for acquisitions is not included in the capital expendi-
ture specified in the Taxonomy. These items are handled in accordance with
IAS 38 Intangible Assets, IAS 16 Property, Plant and Equipment, and IFRS
16 Leases. Additions to intangible assets are presented in Note 4.1, and
additions to property, plant and equipment in Note 4.2, to the consolidated
financial statements.
Taxonomy-aligned capital expenditure includes investments made in the
Husum pulp mill recovery boiler and turbine under category 4.20.
Taxonomy-eligible capital expenditure also includes maintenance invest-
ments 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. Category 3.2. (Renovation of existing
buildings) includes renovation investments in Metsä Board’s real estate.
Operating expenditure
Metsä Board’s taxonomy-eligible operating expenditure includes research
and development expenditure recognised as expenses and the mainte-
nance costs of production units and property, supplemented by the costs
of waste management and short-term lease agreements. The reported
expenses include both external service costs and the wages, including indi-
rect employee costs, of the company’s own employees responsible for the
listed activities. In the group’s income statement, the operating expenditure
specified in the Taxonomy is included in materials and services, employee
expenses and other operating expenses. Operating expenses are disclosed
in Note 2.4 to the consolidated financial statements. Operating expenses
related to the recovery of chemicals and heat at the Husum pulp mill under
category 4.20 make up the most significant part of the taxonomy-aligned
operating expenditure.
Taxonomy-eligible operating expenditure under category 3.2 includes
the repair costs for the company’s real estate assets. Taxonomy-eligible
operating expenditure also includes the costs of Simpele and Kyro power
plants in category 4.20 and costs of Kaskinen power plant and the chemical
recovery plant in category 4.24.
To avoid double counting, 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.
29
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure
covering year 2023
Financial year 2023 Yea r Substantial contribution criteria
DNSH criteria
(‘does not significantly harm’)
Economic activities
Code
Turnover
Proportion of turnover,
year 2023
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy-
aligned (A.1) or eligible
(A.2) turnover, year 2022
Category enabling
activity
Category transitional
activity
EUR
million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL 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
CCM
4.20.
0.7 0% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0%
Turnover of environmentally sustainable activi-
ties (Taxonomy-aligned) (A.1)
0.7 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which enabling 0.0 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which transitional 0% 0% 0%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Cogeneration of heat/cool
and power from bioenergy
CCM
4.20.
2.3 0% EL N/EL N/EL N/EL N/EL N/EL 0%
Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
2.3 0% 0% 0% 0% 0% 0% 0% 0%
A. Turnover of Taxonomy eligible
activities (A.1+A.2)
3.0 0% 0% 0% 0% 0% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of taxonomy-non-eligible activities 1,938.9 100%
TOTAL 1,941.9 100%
30
REPORT OF THE BOARD OF DIRECTORS
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METSÄ BOARD ANNUAL REVIEW 2023
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure
covering year 2023
Financial year 2023 Yea r Substantial contribution criteria
DNSH criteria
(‘does not significantly harm’)
Economic activities
Code
CapEx
Proportion of CapEx,
year 2023
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy
aligned (A.1) or eligible
(A.2) CapEx, year 2022
Category enabling
activity
Category transitional
activity
EUR
million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
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
CCM
4.20.
22.2 10% K E/S E/S E/S E/S E/S Y Y Y Y Y Y Y 39%
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
22.2 10% 10% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 39%
Of which enabling 0.0 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which transitional 0% 0% 0%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Cogeneration of heat/cool
and power from bioenergy
CCM
4.20.
2.3 1% EL N/EL N/EL N/EL N/EL N/EL 0%
Production of heat/cool from bioenergy
CCM
4.24.
0.1 0% EL N/EL N/EL N/EL N/EL N/EL 1%
Renovation of existing buildings
CE
3.2.
1.8 1% N/EL N/EL N/EL N/EL EL N/EL
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
4.2 2% 1% 0% 0% 0% 1% 0% 1%
A. CapEx of taxonomy-eligible
activities (A.1+A.2)
26.4 12% 11% 0% 0% 0% 1% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of taxonomy-non-eligible
activities
202.3 88%
TOTAL 228.7 100%
31
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure
covering year 2023
Financial year 2023 Yea r Substantial contribution criteria
DNSH criteria
(‘does not significantly harm’)
Economic activities
Code
OpEx
Proportion of OpEx,
year 2023
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy-
aligned (A.1) or eligible
(A.2) OpEx, year 2022
Category enabling
activity
Category transitional
activity
EUR
million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
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
CCM
4.20.
5.2 4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 4%
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
5.2 4% 4% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 4%
Of which enabling 0.0 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which transitional 0% 0% 0%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Cogeneration of heat/cool
and power from bioenergy
CCM
4.20.
4.1 3% EL N/EL N/EL N/EL N/EL N/EL 2%
Production of heat/cool from bioenergy
CCM
4.24.
2.7 2% EL N/EL N/EL N/EL N/EL N/EL 2%
Renovation of existing buildings
CE
3.2.
1.1 1% N/EL N/EL N/EL N/EL EL N/EL
OpEx of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned) activities (A.2)
7.9 6% 5% 0% 0% 0% 1% 0% 4%
A. OpEx of Taxonomy eligible activities
(A.1+A.2)
13.1 10% 9% 0% 0% 0% 1% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 123.8 90%
TOTAL 136.9 100%
Form 1 for the economic activities of certain energy sectors – Nuclear energy and fossil gas related activities
Row Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to the research, development, demonstration and deployment of innovative electricity generation facilities
that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available
technologies.
NO
3.
The undertaking carries out, funds or has exposures to the safe operation of existing nuclear installations that produce electricity or process heat, including for
the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to the construction or operation of electricity generation facilities that produce electricity using fossil
gaseous fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using
fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using
fossil gaseous fuels.
NO
32
REPORT OF THE BOARD OF DIRECTORS
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METSÄ BOARD ANNUAL REVIEW 2023
E1 – Climate change
Material impacts, risks and opportunities related to climate change mitigation and energy
Impacts Risks and opportunities for Metsä Board Management
Greenhouse gas emissions in own operations
Metsä Board’s production generates
climate-warming greenhouse gas emissions
(Scope 1 and Scope 2), p. 37.
Market opportunity: By generating and consuming renew-
able energy, Metsä Board can replace fossil-based energy
sources. Renewable energy already accounts for 74% of
the energy used in Metsä Board’s production (Scope 1 and
Scope 2), p. 37. Most of the energy generated at Metsä
Board is used in the company’s own production, and the
company’s energy self-sufficiency is high.
• Metsä Board’s strategic target is to improve energy
efficiency and the transition to entirely fossil free fuels,
as well as fossil free purchased electricity and heat.
• During the financial year, a survey was conducted on the
feasibility of technological carbon sinks in Metsä Group’s
operations.
• Active dialogue with policymakers develops the oper-
ating environment. Political influencing is discussed in
more detail in section G1 – Business conduct.
The company’s biogenic carbon dioxide emis-
sions are classified as carbon-neutral, p. 37.
Market opportunity: In 2023, Metsä Group studied
technical and business opportunities for recovering
biogenic carbon dioxide and reusing it as a raw material for
renewable bioproducts.
Metsä Board produces renewable energy from
bio-based fuels, which mainly comprise wood-
based production side streams and logging
residue.
Regulatory risk: Regulation sets significant requirements
for new production technology reducing emissions or
affects the sustainability criteria of biogenic carbon
dioxide emissions in terms of climate neutrality. This may
cause changes in the pricing of energy and greenhouse
gas emissions, increasing expenses in both production and
transports.
Greenhouse gas emissions in the upstream and downstream value chain
Metsä Board’s upstream and downstream
value chain generates climate-warming green-
house gas emissions (Scope 3), p. 37.
Market opportunity: Metsä Board’s main raw material,
wood, is mainly procured from Finnish and Swedish forests
(p. 67), keeping transport distances – and thus emissions
– moderate.
• During the financial year, the calculation of Scope 3
emissions was further developed.
• Suppliers are encouraged to set emissions targets, for
example, in line with the SBTi. Metsä Board has a Scope
3 target approved by the SBTi for supplier commitment.
• Joint emissions reduction projects are agreed with
suppliers. They are related to the company’s strategic
target of setting a joint sustainability target with partner
suppliers.
• Active dialogue with policymakers develops the operat-
ing environment.
• By 2030, Metsä Group aims to have reduced fossil
carbon dioxide emissions from wood supply in Finland
by 30 per cent from the 2022 level. One way to reduce
emissions is to introduce electric and biogas lorries to
wood transports.
Regulatory and market risk: Regulation and customer
requirements increase the demands to reduce greenhouse
gas emissions in the value chain. A comprehensive identi-
fication, accurate measurement and reduction of climate
impacts is more challenging in the value chain than in the
company’s own operations.
Carbon balance of forests
Metsä Group’s Wood Supply and Forest
Services provides owner-members with forest
management services that aim for regener-
ative forestry, promoting carbon storage in
commercial forests. Metsä Group is develop-
ing a calculation to verify the impact of wood
supply and forest management on the carbon
balance. In Finland, wood is mainly procured
from the owner-members of the parent com-
pany, Metsäliitto Cooperative. Owner-mem-
bers own 31% of Finnish forests.
Regulatory risk: Regulation concerning the use of forests
as carbon storage restricts harvesting volumes.
• Metsä Group’s Wood Supply has a regenerative forestry
strategy that aims to measurably strengthen the state of
nature by 2030.
• Wood Supply has strategic targets, the achievement of
which increases carbon storage in commercial forests
and promotes forest biodiversity.
• Raw materials are used resource efficiently to avoid
waste in production. The goal is to make full use of
production side streams.
• The calculation and reporting of the carbon balance of
forests is being developed in cooperation with partners.
• Active dialogue with policymakers develops the operat-
ing environment.
Market risk: Consumers’ critical view of forest use, as
forests are seen as carbon storage.
Market opportunity: 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.
Products
Metsä Board uses mainly fossil free raw mate-
rials and packaging materials, p. 34.
Regulatory opportunity: Regulation that acknowledg-
es that forest industry products can replace materials
made from fossil-based raw materials, or the production
of which generates substantial amounts of fossil-based
emissions.
• The main raw material of products is renewable wood,
and the goal is for all raw materials and packaging mate-
rials to be fossil free by 2030.
• The use of fossil free energy in production reduces the
carbon footprint of products.
• The carbon footprint calculation of products is being
developed.
• Active dialogue with policymakers develops the operat-
ing environment.
Market opportunity: Consumers favour easily recyclable
packaging made from a renewable, fossil free raw material.
33
Physical risks related to climate change adaptation and their management
Risks for Metsä Board Management
Acute hazards
Storms, drought and floods cause disruptions in pro-
duction or complicate the transport of raw materials
and products.
Metsä Board prepares for the risks arising from extreme weather phenomena in both company and mill-level risk
assessments. 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
transport routes or partners.
Chronic hazards
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 areas of high overall water risk, which supports the company’s competitiveness
in the face of climate change (WRI Aqueduct Water Risk Atlas). Metsä Board’s goal of reducing process water use and
enhancing the recycling of water within the process reduces the water risk.
Harvesting conditions are complicated due to a
lack of snow and frost and because of increased
precipitation.
Metsä Group’s wood supply always considers weather conditions and related changes in harvesting. Wood is harvested
only in suitable conditions. If required, wood terminals can be used to smooth out any variation caused by harvesting
conditions
Damage caused by snow, storms, drought, forest fires,
insects and fungi are increasing in forests, and chang-
es are occurring in the prevalence of tree species.
Alien species are likewise causing problems in forests.
Metsä Group’s Wood Supply and Forest Services provides sustainable forest management services which support
forests’ adaptation to climate change and help safeguard forest biodiversity. Metsä Group’s wood supply has strategic
targets for promoting forest biodiversity, and Metsä Group is committed to the principles of regenerative forestry, which
aim to strengthen the state of nature and comprehensively manage ecosystem services, or the benefits obtained from
nature. As a result, forests can better adapt to climate change. An example of regenerative forestry is the Metsä Group
Plus service offered to owner-members.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
Neutral impact on the environment and society or on Metsä Board’s business
Metsä Board’s 2030 sustainability targets
2030 target 2023 2022 2018
Fossil-based carbon dioxide emissions (Scope 1 and Scope 2 market-based) 0 t 184,713 t 391,220 t 563,627 t
Share of target group suppliers with targets set in accordance with the SBTi by 2024 (Scope 3)
1)
70% 19% 15% 4.3%
Improvement in energy efficiency from the 2018 level +10% -5.8% +2.7% 2.36 MWh/t
Fossil free raw materials and packaging materials, share of dry tonnes 100% 98.8% 98.8% 99.4%
Metsä Group’s 2030 sustainability targets
MG: Amount of carbon stored in wood products from the 2018 level +30% -21% -12% 1,651,505 t
MG: Amount of forest regeneration and young stand management from the 2018 level +30% +14% +2.8% 33,265 ha
MG: Amount of forest fertilisation from the 2018 level +50% -26% - 9,115 ha
MG: Share of continuous cover forestry in peatland forest regeneration 30% 17% - -
1)
In contrast with the other targets, the Scope 3 target year is 2024, and the base year is 2019.
MG: The target has been set at the level of Metsä Group. The progress made in Metsä Group’s targets is described in more detail in Metsä Group’s Sustainability statement.
The comparative data have not been provided for all the new targets set in 2023.
Information for 2018 is not disclosed in the case of fossil free raw materials and packaging materials due to changes in calculation. Further information is provided under Reporting
principles for metrics.
34
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL REVIEW 2023
■ Progress in targets
• Fossil-based carbon dioxide emissions (Scope 1 and Scope 2
market-based) − The production curtailments caused by the market
situation and investment shutdowns significantly reduced fossil-based
CO
2
emissions in 2023. Completed investments and energy efficiency
measures also reduced emissions. The carbon dioxide emissions of
purchased energy were reduced by the notably lower total electricity
consumption and the increased share of nuclear-based electricity.
All in all fossil-based carbon dioxide emissions (Scope 1 and Scope 2
market-based) per produced tonne have reduced by 54 per cent from
the 2018 level.
• Share of target group suppliers with targets set in accordance
with the SBTi by 2024 (Scope 3) – Despite progress being made in
2023, Metsä Board will not reach the supplier commitment target set
for 2024. The company will update its Scope 3 target in 2024.
• Improvement in energy efficiency from the 2018 level – The
production curtailments caused by the market situation and investment
shutdowns weakened energy efficiency in 2023. However, energy
efficiency measures saved 30 GWh of energy.
• Fossil free raw materials and packaging materials, share of dry
tonnes – The share of fossil free raw materials and packaging materials
remained at a good level.
The company’s targets for reducing greenhouse gas emissions (Scope 1
and Scope 2) have been approved by the Science Based Targets initiative,
and they meet the strictest requirements of the Paris Agreement, aimed
at limiting global warming to 1.5 degrees. The Scope 3 target concerning
suppliers meets the strictest requirements of the SBTi and complies with
best practices.
■ The identification and assessment of material
impacts, risks and opportunities
The material impacts, risks and opportunities related to climate change
have been identified in a double materiality assessment based on the
principles of the company’s risk management process. The materiality
assessment is discussed on pages 26–28.
Ensuring undisturbed and uninterrupted operations in all conditions is
key in the risk assessment of production units. The assessment process of
production units’ environmental risks is guided by the ISO 14001 and ISO
50001 management systems. The key identified risks are included in the
company-level risk management process.
The environmental impacts of production units are assessed in
connection with the environmental impact assessments of investment
projects, for example. The need for environmental impact assessments is
determined by the local EIA authority. Risks related to climate change have
been taken into account in the environmental impact assessments of the
most recent investments.
The regulatory risks associated with forest use are identified, assessed
and managed in cooperation with Metsä Group’s Wood Supply and the
Group’s Corporate Affairs unit.
■ Policies
In its Environmental policy, Metsä Board is committed to transitioning
to fully fossil free fuels at its production units, developing its production
methods to support this transition, replacing purchased electricity and
heat with fossil free alternatives, and finding fossil free alternatives to all
the company’s raw materials and packaging materials. The company is
also committed to the continuous improvement of its environmental and
energy efficiency. Environmental management and environmental perfor-
mance are guided by the requirements of the production units’ certified
quality, environmental and energy management systems.
In the Leader in sustainability strategic programme, the climate focus is
on reaching the strategic sustainability targets for fossil free operations at
production units, fossil free products, and water and energy efficiency.
Forest use is guided by Metsä Group’s principles for forest use and
management, in which Metsä Group commits to increasing the amount of
carbon bound in forests and to promoting forest biodiversity, among other
things. Certified quality and environmental management systems are in
use in Metsä Group’s wood supply.
Suppliers are required to commit to Metsä Group’s Supplier Code of
Conduct or to their own equivalent codes. In the Supplier Code of Conduct,
suppliers are encouraged to set reduction targets for greenhouse gas
emissions, for example, in accordance with the principles of the Science
Based Targets initiative, and to continuously improve their environmental
performance and efficient energy use. Suppliers are required to adopt a
certified environmental management system where applicable.
■ Actions
Climate change mitigation and energy
Metsä Board’s plan for climate change mitigation includes action plans for
the climate impacts from production, the supply chain and products. An
action plan for the carbon balance of forests has been drawn up for Metsä
Group’s wood supply. The plan for climate change mitigation supports the
Paris Agreement’s target of limiting global warming to 1.5 °C above pre-in-
dustrial levels and promotes the company’s adaptation to a low-carbon
future.
Greenhouse gas emissions and energy in the company’s
own operations
Metsä Board’s plan for climate change mitigation comprises investments
and measures for replacing fossil fuels with renewable fuels and fossil free
electricity at all the company’s production units and power plants. The
measures apply to the fuels and backup fuels used at power plants and to
the process fuels used at production units. The company will also transition
to fully renewable or fossil free alternatives in its purchased energy. In
addition, the company will improve the efficiency of its energy and water
use through continuous development and investment. Reducing water use
is a way of mitigating climate change, as process water use and wastewater
treatment consume energy, causing greenhouse gas emissions. Measures
related to water use are discussed under E3 – Water and marine resources.
The company’s key actions promoting climate change mitigation, carried
out in 2022−2023, included the replacement of peat with renewable fuels
at the power plants of the Kyro and Simpele paperboard mills and the
renewal of the turbine and generator of the Husum pulp mill, which will
increase bioenergy generation at the Husum integrated mill and raise the
mill’s electricity self-sufficiency from 50 to more than 80 per cent. These
actions are expected to reduce fossil-based carbon dioxide emissions by
around 136,000 tonnes annually.
The renewal and bottleneck investments, completed in 2023, related
to the Kemi paperboard mill’s development project will reduce the mill’s
water use by 40 per cent and energy use by 5 per cent per tonne of
35
paperboard produced. Energy efficiency actions of a smaller scope were
also completed in 2023, including the optimisation of energy use in drying
at the Joutseno BCTMP mill and the Äänekoski paperboard mill.
The turbine and generator investment at the Kyro paperboard mill’s
biopower plant is expected to be completed by the end of 2024. Thanks
to the new turbine’s improved efficiency, the biopower plant’s electricity
self-sufficiency will increase from 30 to 50 per cent.
Greenhouse gas emissions in the value chain
The commitment of Metsä Board’s suppliers to science-based greenhouse
gas emissions (SBTi compliant) is discussed on page 35, under Progress in
targets.
Greenhouse gas emissions in Metsä Board’s value chain are curbed by
Metsä Group’s wood supply target of reducing fossil-based carbon dioxide
emissions from wood supply in Finland by 30 per cent from the 2022 level
by 2030. Emissions are reduced by introducing electric and biogas lorries,
for example.
The value chain’s greenhouse gas emissions are also reduced through
emissions reduction targets jointly set by Metsä Group and its suppliers.
The joint 2030 target of Metsä Group and VR, a logistics group, will halve
emissions from transports covered by the cooperation. For Metsä Group,
these actions mean an annual emissions reduction of approximately
14,000 tonnes of carbon dioxide equivalent, corresponding to more than
25,000 average lorry transports. VR also handles Metsä Board’s rail trans-
ports in Finland. The joint target with Royal Wagenborg, a Dutch maritime
logistics company, is to reduce products’ carbon dioxide emissions from
marine transports by 30 per cent (per tonne per mile) from the 2021 level
by 2030.
Logistics emissions will be reduced by planning efficient routes, minimis-
ing transport distances, optimising fill rates and favouring rail connections
over road connections on selected routes. For example, in the transport of
products from the Kemi paperboard mill to ports, the load size of transport
units is maximised, and all fuels are fossil free. At the Tako paperboard mill,
products are transported fossil free to the nearby terminal, and from there,
shipping containers are delivered by low-emission lorries to the port.
Carbon balance of forests
In 2023, Metsä Group adopted regenerative forestry principles. They
include measures in wood supply and forest services with which the state
of nature will begin to improve verifiably in Finland. Regenerative forestry
practices will increase forests’ carbon sequestration , biodiversity and
ability to adapt to climate change. Forest certification demonstrates that
the forest has been managed sustainably.
Key practical actions related to climate change mitigation include the
following:
• Forests are swiftly renewed after regeneration felling. The faster and
with better quality a new forest is established, the sooner it begins to
store carbon from the atmosphere. Cultured seeds and seedlings of
local tree species are used in renewal whenever available. Domesticated
trees grow better than naturally generated trees.
• Young stand management and thinning ensure that stands remain vital,
and growth is focused on the best trees.
• Forest fertilisation improves tree growth, maintains the growth condi-
tions of the soil and ensures the vitality of trees.
• Increasing the share of continuous cover forestry helps curb and adapt
to climate change, as it minimises the GHG emissions of peatland
forests. The goal of continuous cover forestry is to maintain a steady
surface level of groundwater to prevent the carbon stored in peat being
released into the atmosphere and to minimise impacts on waterbodies.
Metsä Group’s Wood Supply and Forest Services have public sustainability
targets for these measures, and they are presented in the table on page 34.
Products
The aspects most relevant in terms of the climate impact and carbon
footprint of paperboard packaging are the energy used in its production
and the light weight of the paperboard itself. As Metsä Board shifts to using
fully fossil free energy in its production, the carbon footprint of the compa-
ny’s products will continue to decrease. Reducing the weight of paperboard
is a focal area of Metsä Board’s R&D operations.
Metsä Board’s paperboards offer an alternative to packaging materials
made of non-renewable raw materials such as plastic. According to an
independent study, the carbon footprint of a cherry tomato box made of
Metsä Board’s paperboard is as much as 80 per cent smaller than that of a
box made of recycled plastic (source: Natural Resources Institute Finland).
Metsä Board aims to replace the fossil-based raw materials and packag-
ing materials still in use with fossil free alternatives by 2030. The transition
to fully fossil free raw materials is being promoted collaboratively in Metsä
Group’s strategic R&D programme. Replacing fossil-based binders used in
Metsä Board’s paperboard coatings with bio-based alternatives was a key
focus of pilot and mill trials in 2023. Investigation of bio-based alternatives
for product packaging materials were conducted collaboratively in Metsä
Group. All in all, cooperation with the scientific community and raw mate-
rial providers is important. The progress of work is monitored by Metsä
Group’s procurement organisation.
The share of fossil free raw materials and packaging materials is pre-
sented in the table on page 34. Further information about the company’s
R&D operations is available under section E5 – Resource use and circular
economy and in the Report of the Board of Directors, under R&D and
innovation.
Climate change adaptation
Climate change adaptation calls for adaptation to both acute hazards
such as extreme weather phenomena and chronic hazards, caused by the
impacts of climate change on water availability, harvesting conditions,
growth conditions of different tree species, or snow, storm, drought, forest
fire, insect, and fungi damage in forests.
Metsä Board prepares for hazards from extreme weather phenomena
at both the company and mill level. Examples of actions include controlling
water levels with dam arrangements and ensuring power distribution
in exceptional situations. The supply chain is preparing for alternative
transport routes or partners. The company’s mills are not located in areas
at high water risk, which supports the company’s competitiveness in the
face of climate change. Metsä Board’s target of reducing the use of process
water and enhancing the recycling of water within the process also reduces
the water risk.
Metsä Group’s wood supply always considers weather conditions
and related changes in harvesting. Wood is harvested only in suitable
conditions. If required, wood storages can be used to smooth out variation
36
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL REVIEW 2023
caused by harvesting conditions. Metsä Group’s regenerative forestry
principles and sustainable forest management services help forests adapt
to climate change and promote forest biodiversity. Regenerative forestry is
discussed in more detail under E4 – Biodiversity and ecosystems.
Energy consumption by energy source
% 2023 2022
Renewable, wood-based 73 67
Other renewable energy 0.5 3.2
Nuclear power 16 15
Fossil-based fuels 10 15
Energy consumption
MWh 2023 2022
FUELS
Oil 310,423 298,274
Gas 412,864 573,967
Coal 0 0
Waste 43,825 63,317
Peat 17,829 95,619
Wood-based fuels 5,010,322 4,892,216
PURCHASED ENERGY
Purchased electricity and heat,
renewable wood-based
663,692 899,056
Purchased electricity and heat,
other renewable
7,543 250,532
Purchased electricity and heat,
fossil-based
22,539 239,429
Purchased electricity and heat,
nuclear power
1,200,337 1,263,229
CONSUMPTION OF OTHER SELF-GENERATED RENEWABLE ENERGY
Consumption of self-generated hydropower 29,349 25,238
ENERGY SOLD
Energy sold, renewable wood-based 9,288 13,164
Electricity sold, fossil-based 442 434
Energy sold, renewable wood-based 52,656 51,820
Heat sold, fossil-based 7,930 2,025
TOTAL ENERGY CONSUMPTION
Total energy consumption, renewable wood-based 5,612,070 5,726,287
Total energy consumption, other renewable 36,892 275,770
Total energy consumption, fossil-based 799,107 1,268,202
Total energy consumption, nuclear 1,200,337 1,263,229
Total energy consumption 7,648,406 8,533,488
ENERGY INTENSITY (MWh/sales)
Energy intensity 0.004 0.004
GHG emissions
tCO
2
e 2023 2022
Direct GHG emissions (Scope 1) 201,984 264,961
Location-based indirect GHG emissions (Scope 2) 300,726 287,640
Market-based indirect GHG emissions (Scope 2) 5,108 142,436
GHG emissions in the value chain from material
categories (Scope 3)
1,792,006 2,274,825
1 Purchased goods and services 479,875 656,936
2 Capital goods 57,6 5 1 68,884
3 Fuel and energy-related activities (not included
in Scope 1 or Scope 2 emissions)
57,7 72 111,064
4 Upstream transportation and distribution 282,264 368,052
5 Waste generated in operations 2,919 1,984
6 Business travel 813 315
7 Employee commuting 1,889 1,897
9 Downstream transportation and distribution 4,732 8,490-
10 Processing of sold products 268,042 356,970
11 Use of sold products 890 3,883
12 End-of-life treatment of sold products 582,863 6 57, 1 7 7
15 Investments 52,294 39,174
Location-based total GHG emissions 2,294,716 2,827,426
Market-based total GHG emissions 1,999,098 2,682,222
GHG intensity
2023 2022
GHG intensity based on sales,
Scopes 1, 2, 3 (market-based), tCO
2
e / euros
0.0010 0.0011
GHG intensity based on sales,
Scopes 1, 2 (market-based), tCO
2
e / euros
0.0001 0.0002
GHG intensity based on production,
Scopes 1, 2 (market-based), tCO
2
e / t
0.09 0.12
Wood-based biogenic carbon dioxide emissions
tCO
2
2023 2022
Wood-based biogenic carbon dioxide emissions 1,984,088 1 937,318
37
Reporting principles for metrics
The amount of forest regeneration and young stand management
covers, in hectares, the soil preparation and young stand
management, or early cleaning and thinning, carried out by Metsä
Group’s Wood Supply and Forest Services (Metsä Forest). The
amount of forest fertilisation includes, in hectares, the growth,
boron and ash fertilisation carried out by Metsä Forest. The share
of continuous cover forestry in peatland forest regeneration
covers Metsä Forest’s standing sales, as well as the group
selection cutting, selection cutting and strip felling carried out to
regenerate peatlands, and it is calculated based on the amount of
harvesting.
The amount of carbon stored in wood products is calculated for
Metsä Group’s mechanical wood products. The carbon content is
calculated using tree species-specific database factors to ensure
comparable results between tonnes of wood (CO
2
equivalent).
The amount of fossil free raw materials and packaging materials
covers the raw materials and packaging materials of products
produced by Metsä Board. The weight of raw materials is con-
verted to dry tonnes using the factors provided by the suppliers.
A raw material is considered fossil free if none of its main raw
materials contains fossil-based oil. Materials that do not remain
in the product, such as process chemicals, are not taken into
account in calculation. In 2023, the dry tonne factor for raw wood
was adjusted, and as a result, the 2022 comparison figure was
retroactively calculated in accordance with the new factor.
Energy consumption encompasses all Metsä Board’s production
units. Metsä Board’s internal heat transfer is taken into account to
avoid double counting. Energy consumption is expressed as final
energy consumption, which means that the efficiency factors
of electricity and heat are not taken into account. Final energy
consumption is obtained by summing up the fuel consumed at
mills, self-generated hydropower and the amount of purchased
electricity and purchased heat, and then deducting sold heat
and electricity. Internal logistics and the electricity purchased
for buildings outside mill areas, such as warehouses and office
facilities, is excluded from the calculation, as their share of total
energy consumption, and thus of Scope 1 and Scope 2 emissions,
is assessed to be non-material. Local factors are used to calculate
the energy contained in different fuels. Metsä Board’s heat
consumption is mainly based on steam.
The improvement of energy efficiency is determined as specific
energy consumption, meaning the ratio of energy consumption
and production volume. Specific energy consumption is calcu-
lated for individual production lines, including the consumption
of electricity, heat and fuels as megawatt hours (MWh). Tonnes
and cubic metres are both used as units in production volume
calculations. They are considered to be of equal value. The energy
efficiency of Metsä Board’s power plants is not taken into account
in calculations. Discontinued lines are included in the calculations
for as long as they are used in production. New production units
are included in the calculations from the year in which their
production begins.
GHG emissions include the emissions of all Metsä Board
production units. In emissions calculations, Metsä Board’s
internal heat transfer is taken into account to avoid double
counting. GHG emissions are calculated in accordance with the
GHG Protocol Corporate Accounting and Reporting Standard and
the Corporate Value Chain (Scope 3) Accounting and Reporting
Standard. The scope of reporting is based on operational control.
Reporting covers direct GHG emissions (Scope 1) from Metsä
Board’s own operations, indirect GHG emissions (Scope 2) from
the production of purchased energy, and indirect GHG emissions
from other parts of the value chain (Scope 3), including upstream
and downstream. Power plant emissions are allocated to the mills
that use the energy generated by the plants.
The calculation includes all the greenhouse gases covered by
the GHG Protocol (CO
2
, CH4, N
2
O, HFCs, PFCs, SF
6
and NF
3
).
Emissions have been converted into carbon dioxide equivalents.
The figures for previous years have been adjusted retroactively,
as Metsä Board has previously included only carbon dioxide
emissions in the calculation. In addition, the Scope 1 emissions for
2022 were retroactively adjusted by 8,116 tonnes due to changes
in emissions factors.
Scope 1 emissions have been calculated from the fuels used by
production units. The calculation is based on supplier-specific
emission factors for fuels or on national emission factors. Two
different methods are used for Scope 2 carbon dioxide emissions.
The market-based method uses supplier-specific emissions
factors, supplemented with national residual mix emission
factors for untracked purchased electricity. In the location-based
method, country-specific average emission factors for electricity
are used. The residual mix factors and country-specific factors
have been obtained from the AIB (Association of Issuing Bodies)
report on emission factors.
Metsä Board’s 2030 sustainability target, “0 tonnes of fos-
sil-based carbon dioxide emissions”, concerns Scope 1 and Scope
2 emissions and only encompasses carbon dioxide emissions,
excluding other greenhouse gases. In other respects, the target
has been calculated in accordance with the GHG Protocol.
The target does not include buildings outside the mill areas or
internal logistics, as their share of emissions is assessed to be
non-material.
The company’s biogenic carbon dioxide emissions originate in
wood-based fuels. A CO
2
emission factor of 396 tonnes of CO
2
/
GWh, provided by Statistics Finland, has been used in their
calculation.
The materiality of each of the 15 Scope 3 categories was
determined using a spend-based materiality assessment. All the
categories assessed to be material were calculated. Categories
in which the amount of greenhouse gases was insignificant were
also included in the Scope 3 inventory. The categories included
in the calculation are listed in the table on page 37. Only three
categories were excluded from the calculation – upstream leased
assets, downstream leased assets and franchising – as they
were assessed to be non-material. Metsä Board does not have
significant leased assets under Scope 3 that would not already be
included in Scope 1 and Scope 2. Metsä Board does not engage in
franchising.
The Scope 3 inventory has been calculated as tonnes of CO
2
equivalent, excluding biogenic CO
2
. The operational data used
in the calculation are obtained from Metsä Group’s internal
systems. In the absence of accurate data, assumptions have
been used. The emission factors used are mainly from global
databases, including ecoinvent 3.9.1, EXIOBASE 3, DEFRA’s GHG
conversion factors (full set 2022) and IEA’s Life Cycle Upstream
Emission Factors (2023). In addition, supplier-specific emission
factors have been used for logistics (46 per cent of operational
data) and raw materials (78 per cent of operational data excluding
raw wood). Some of the supplier-specific emission factors in
logistics only cover CO
2
in current calculations, but they will be
updated to include other essential greenhouse gases in the next
few years as the international disclosure guidelines for logistics
develop. Currently, many of the supplier-specific emission factors
38
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL REVIEW 2023
in logistics only cover TTW (tank-to-wheel) emissions. As a rule,
WTW (well-to-wheel) emission factors are used if available from
suppliers.
Metsä Board’s emissions data related to investments are based
on the company’s share of Metsä Fibre’s Scope 1 and Scope 2
emissions, corresponding to Metsä Board’s holding (24.9 per
cent) in Metsä Fibre, excluding the emissions associated with pulp
raw materials procured from Metsä Fibre that have been assigned
to the first category of the Scope 3 inventory.
A more detailed description of calculation methods is available on
Metsä Group’s website.
The 2022 Scope 3 emissions have been retroactively updated in
accordance with the above model, which is why the 2022 Scope 3
emissions increased from 1,816,979 tonnes to 2,274,825 tonnes.
The increase in disclosed emissions was caused especially
by updated assumptions, the change in the emissions factor
depicting landfill disposal, and the inclusion of pulp sold in the
category End-of-life treatment of sold products. Emissions also
increased because process chemicals were calculated based
on weight instead of consumption in the Purchased goods and
services category. The updated Scope 3 emissions for 2022 have
not been externally assured.
E2 – Pollution
Pollution-related impacts, risks and opportunities
Impacts Risks and opportunities for Metsä Board Management
Pollution of air, water and soil
In addition to GHG emissions, Metsä Board’s
production generates other emissions to air.
Most of the emissions to air originate in the
production units’ and power plants’ combus-
tion process. Production also generates waste-
water discharges. Emissions to air and water,
as well as environmental permit deviations at
mills in the reporting year, are presented in the
tables on page 40.
Soil pollution may occur as a result of techni-
cal defects or human errors in Metsä Board’s
or its service providers’ operations. The com-
pany has environmental liabilities related to
former activities on industrial sites that have
since been closed, sold or leased, and from
decommissioned landfill sites.
Risk: Deviations in emissions may cause a liability to pay
compensation and costs from corrective action. In addi-
tion, Metsä Board’s reputation as a sustainable operator
may suffer.
• Emissions to air are reduced with a meticulous control
of the combustion processes and the purification of flue
gases.
• Emissions to water are reduced through reduced water
use, more efficient processes and efficient wastewater
treatment.
• The best available techniques are used in production.
Environmental performance is monitored continuously.
Proactive measures aimed at preventing interruptions
include comprehensive preventive maintenance and
observations in production.
• Any deviations in emissions and related corrective ac-
tions are immediately reported to the authorities.
Microplastics
Metsä Board’s products, produced mainly
from renewable raw materials, are an alter-
native to plastic packaging and enable the
reduction of microplastics.
Opportunity: Demand for Metsä Board’s products
increases.
• Nearly all Metsä Board’s raw materials are fossil free.
Active research and development is being conducted to
replace the remaining fossil-based raw materials.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
■ The identification and assessment
of material impacts, risks and opportunities
The material impacts, risks and opportunities related to pollution have
been identified in a double materiality assessment based on the principles
of the company’s risk management process. The materiality assessment is
discussed on pages 26–28.
Ensuring undisturbed and uninterrupted operations in all conditions is
key in the risk assessment of production units. The assessment process of
production units’ environmental risks is guided by the ISO 14001 and ISO
50001 management systems. The key identified risks are included in the
company-level risk management process.
The pollution-related impacts of production units are assessed in
connection with the environmental impact assessments of investment
projects and during the environmental permit processes, for example. The
need for environmental impact assessments is determined by the local EIA
authority.
After any environmental impact assessment and environmental permit
process, the production units operate in accordance with their environ-
mental permit and the company’s operational management system.
The environmental permit and the related programme for monitoring
emissions and impacts set the minimum requirements for the observation
of environmental impacts. In addition to emissions, observations typically
focus on waterbodies, fish stock, air quality and noise. Regular risk assess-
ments and official inspections ensure the adequate scope of observations
and performance of production units.
39
■ Policies
In its Environmental policy, Metsä Board is committed to protecting
the environment, preventing environmental pollution and continuously
developing production processes by employing the best available methods
and techniques.
In the Leader in sustainability strategic programme, the environmental
focus is on implementing the planned actions aimed at achieving the
strategic sustainability targets in water and energy efficiency, for example.
Environmental management and continued environmental performance
are guided by the requirements of the production units’ certified quality,
environmental and energy management systems. The production units’
environmental management practices are described in more detail in the
company’s internal environmental management policies. A key goal is to
actively engage in preventive environmental work, which is the most effec-
tive way of preventing leakage and disruptions. Production unit employees
must continuously observe their work environment, actively make HSEQ
observations and adopt immediate corrective action if required. Regular
environmental walks are carried out at Metsä Board. In addition, employ-
ees are offered training and regular info sessions on environmental topics.
All Metsä Board employees have the right and responsibility to report
a situation that may cause a leakage or malfunction. Any infringement of
environmental permit limits and significant deviations are investigated,
and corrective actions are determined. The production unit’s management
is always in charge of the investigations, as well as the adequacy and
implementation of corrective actions.
The terms and conditions of maintenance and investment project agree-
ments for production unit sites contain minimum requirements regarding
the environment for goods and service suppliers. Suppliers are required to
immediately report any observed hazards, accidents or other equivalent
matters to Metsä Board’s contact person. Suppliers must participate in the
investigation of any environmental deviation or damage resulting from their
operations, determine corrective actions and take part in compensating for
the damage in accordance with the applicable law and the “polluter pays”
principle.
■ Actions
Pollution of air, water and soil
All Metsä Board production units have a valid environmental permit. The
company uses the best available techniques in production and continu-
ously monitors that its mills operate in compliance with the environmental
permits issued to them. Any deviations and related corrective actions
are immediately reported to the authorities. Production processes are
developed in line with continuous improvement and targets. Environmental
impact assessments are conducted in process change projects if required.
Most of the company’s emissions to air originate in the pulp mills’ and
power plants’ combustion process. The primary emissions are carbon
dioxide, sulphur dioxide, nitrogen oxides and particles. Small amounts of
reduced sulphur compounds are generated at the Husum pulp mill. In addi-
tion to carbon dioxide, the combustion processes generate small amounts
of other greenhouse gases such as methane and nitrous oxide. Emissions
to air are reduced with a meticulous control of the combustion processes
and the purification of flue gases.
Wastewater discharges primarily consist of nutrients (phosphorus and
nitrogen), organic substances measured as chemical and biological oxygen
demand, as well as suspended solids. The wastewaters of pulp production
also contain organic chlorine compounds, sodium and sulphates.
Emissions to water are reduced through reduced water use, more efficient
processes and efficient abatement technology.
Metsä Board’s emissions to air and water are presented in the tables on
page 40. The emissions of individual production units are presented in the
table on page 71.
Metsä Board has environmental liabilities related to former activities
on industrial sites that have since been closed, sold or leased, and from
decommissioned landfill sites. Financial provisions for the costs of land
rehabilitation work have been made in cases where it has been possible to
measure the Group’s liability for land contamination and any post-treat-
ment obligations.
Metsä Board’s environmental liabilities in 2023 totalled EUR 2.0 million
(2.0), and its environmental expenses amounted to EUR 6.8 million (11.7).
The environmental expenses consist mainly of expenses related to the
use and maintenance of environmental protection equipment, expenses
related to waste management and environmental insurance, and the
depreciation of capitalised environmental expenses.
No significant environmental impacts, claims or compensation related
to the pollution of air, water and soil were recorded in 2023, nor was any
significant media visibility related to these topics seen. Environmental
permit deviations are presented in the table on page 40.
Microplastics
Metsä Board’s products, produced mainly from renewable raw materials,
offer an alternative to plastic packaging and enable the reduction of
microplastics. Products are described in more detail under E5 – Resource
use and circular economy.
Emissions to air
t 2023 2022
Sulphur (SO
2
) 176 418
Nitrogen oxides (NO
x
) 1,285 1,226
Particles (PM2.5) 55 285
Emissions to water
t 2023 2022
Nitrogen (N) 165 172
Adsorbable organic halogen (AOX) 47 50
Chemical oxygen demand (COD) 10,645 10,368
Biological oxygen demand (BOD) 840 647
Phosphorus (P) 23 23
Suspended solids 1,885 1,517
Environmental permit deviations at Metsä Board’s mills
Mill Date of incident Incident Corrective actions
Simpele 7/2023 Wastewater nitrogen emission exceeded the permit limit Adjustment of nutrient dosage at the treatment plant
Kaskinen 8/2023 Wastewater nitrogen emission exceeded the permit limit COD load matched to the nutrient situation
40
REPORT OF THE BOARD OF DIRECTORS
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METSÄ BOARD ANNUAL REVIEW 2023
Reporting principles for metrics
Emissions to water and air include the material emissions from
Metsä Board’s production units. Emissions are also reported to
the authorities.
Water discharges are determined based on laboratory meas-
urements. Emissions to water are calculated as a combination
of waterflows and concentrations. Any wastewater discharges
of third parties handled in the wastewater treatment plants are
excluded from reporting. Emissions to air are determined based
on continuous and/or one-off measurements. The final emission
is calculated as a combination of airflows and concentrations.
Emissions are allocated to internal and external inflows by first
making an assumption, based on prior measurements, of the
reduction in chemical oxygen demand (COD) for each inflow,
and later adjusting them to correspond to the unit’s actual COD
reduction. Other emissions are allocated based on the flow. At
integrated mills, the amount of COD is allocated to parties using
the wastewater treatment plant based on the quality of COD.
Discharges fed through external (usually municipal) wastewater
treatment plants are taken into account with the assumption of
an 85 per cent reduction in COD.
Biological oxygen demand (BOD) and emissions of 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 suspended solids 10 mg/l. Total nitrogen emissions
are considered to be zero, as municipal wastewater contains
excess nitrogen and the reduction of BOD binds nitrogen to bio-
mass, reducing the unit’s total nitrogen emissions. A seven-day
measuring period (BOD7) is used to determine BOD.
E3 – Water and marine resources
Impacts, risks and opportunities related to water and marine resources
Impacts Risks and opportunities for Metsä Board Management
Water
Water withdrawals: Metsä Board’s production
units are located in areas at low or low-medi-
um water risk that have large surface water re-
serves. Metsä Board’s operations are designed
so they do not affect other parties’ rights or
opportunities to use water. Water withdrawals
are presented in the table on page 42.
Opportunity: The production units’ location in areas at
low water risk supports the company’s competitiveness
in a changing climate. The target of reducing process
water use offers cost benefits, improves energy efficiency
and helps minimise water risk. By reducing its water use,
Metsä Board can strengthen its reputation as a sustaina-
ble operator.
• The production units are located in areas at low or
low-medium water risk.
• Process development and the adoption of new tech-
niques reduces water use and increases water recycling
in the production process, decreasing the need to
withdraw more raw water.
• The best available techniques are used and systemat-
ically operated in production. Environmental perfor-
mance is monitored continuously. Actions related to
water discharges are described in more detail under
E2 – Pollution.
Water consumption: The production process
of pulp and paperboard products requires
plenty of water. However, water consumption
is low in relation to the volume of water used.
Of all the water consumed, approximately 96
per cent is returned to waterbodies after use,
and the remaining 4 per cent evaporates in the
process or is bound to the products.
Risk: If the company is unable to reduce its water use
in line with the target, it will lose the cost benefits from
reduced water use and will fail to minimise water risks.
Metsä Board’s reputation as a sustainable operator will
suffer.
Wastewater discharges: Metsä Board’s
production generates water discharges. The
impacts, risks and opportunities, as well as
management methods related to water dis-
charges, are discussed under E2 – Pollution.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
Neutral impact on the environment and society or on Metsä Board’s business
Metsä Board’s 2030 sustainability target
2030 target 2023 2022 2018
Reduction in process water use per produced tonne from the 2018 level, % -35% +2.0% -12% 21 m
3
/t
41
■ Progress in targets
• Reduction in process water use per tonne produced compared
with the 2018 level – Production curtailments caused by the market
situation and investment shutdowns weakened the efficiency of process
water use in 2023.
■ The identification and assessment of material
impacts, risks and opportunities
The material impacts, risks and opportunities related to water and marine
resources have been identified in a double materiality assessment based
on the principles of the company’s risk management process. The materi-
ality assessment is discussed on pages 26–28.
Ensuring undisturbed and uninterrupted operations in all conditions is
key in the risk assessment of production units. The assessment process of
production units’ environmental risks is guided by the ISO 14001 and ISO
50001 management systems. The key identified risks are included in the
company-level risk management process.
The production units’ impacts on water resources are assessed in
connection with the environmental impact assessments of investment
projects and during the environmental permit processes, for example. The
need for environmental impact assessments is determined by the local
EIA authority. Matters considered include water withdrawal, the thermal
stress caused by the water returned or the impact of emission parameters
on waterbodies. The impacts are also assessed in connection with process
development and environmental risk mapping. Several production units
have waterbody monitoring obligations and commitments. These are often
regionally comprehensive long-term programmes for monitoring the long-
term consequences of operations.
Metsä Board’s operations are designed so they do not affect other
parties’ rights or opportunities to use water. Surface water accounted
for nearly 100% of Metsä Board’s water withdrawals. A small amount
of groundwater is used mainly for hygiene and laboratory purposes.
Production processes account for roughly half Metsä Board’s water
use, and cooling purposes for the rest. The cooling water circulates in a
separate system and does not need to be treated. However, the cooling
water returned to waterbodies has a local heating impact. Process water is
carefully treated before it is returned into waterbodies.
All Metsä Board’s production units are located in areas at low or
low-medium water risk that have large surface water reserves. None of the
production units is located in an area of high water stress or high overall
water risk (WRI Aqueduct Water Risk Atlas). Water stress indicates water
demand in relation to water availability. Overall water risk indicates the
risks related to water resources, taking the volume and quality of water
resources and regulation in the area into account.
■ Policies
Environmental management and continued environmental performance
are guided by the requirements of the mills’ certified quality, environmental
and energy management systems. The Environmental policy lays the
foundation for environmental target setting. Resource efficiency is a key
part of the policy, and in compliance with it, Metsä Board is committed to
reducing its water use.
In the Leader in sustainability strategic programme, the environmental
focus is on implementing the planned actions aimed at reaching the
strategic sustainability targets in water and energy efficiency, for example.
■ Actions
Water withdrawals and water consumption
Increasing the efficiency of water use supports the circular economy,
energy efficiency and minimised emissions. Metsä Board’s actions to
reduce process water use in line with the 2030 sustainability target
include investments in processes and wastewater treatment, as well as
adjustments to and optimisation of water use. The actions improve water
recycling and reduce water withdrawal from waterbodies. In addition to the
company-level target, all production units have targets for water use, which
are regularly monitored. Of all the water the company uses, approximately
96 per cent is returned to waterbodies after use, and the remaining 4 per
cent evaporates in the process or is bound to the products.
The development programme of the Kemi paperboard mill, completed in
2023, reduces the mill’s energy consumption by 5 per cent and water use
by roughly 40 per cent per tonne produced.
In 2023, water recycling was enhanced at the Husum pulp mill, and the
renewal of the pulp and white-water system continued at the Simpele
paperboard mill, the goal being to reduce the use of process water and
energy.
Wastewater discharges
The impacts, risks and opportunities, as well as management methods
related to wastewater discharges, are discussed under E2 – Pollution.
Water withdrawals and consumption and wastewater
discharges
1,000 m
3
2023 2022
WATER WITHDRAWALS
Surface water 101,884 114,401
Groundwater 58 65
Total water withdrawals 101,943 114,465
WATER CONSUMPTION
Water consumption 3,874 4,579
WASTEWATER
Wastewater discharges 45,380 58,740
Reporting principles for metrics
Water withdrawals include the withdrawal of process and cooling
water at all Metsä Board production units.
Process water use per tonne produced is measured as cubic
metres from the process water used and calculated per tonne of
product produced.
Water consumption is an estimate of the amount of water that
has evaporated in production and wastewater treatment and
water bound in products and wastewater treatment sludge. The
calculation is based on an estimate, which considers the matters
mentioned above, as well as direct water withdrawal, the water
contained in raw materials and the water returned to waterbodies.
The amount of water withdrawn in 2022 has been retroactively
adjusted from 109,967 thousand cubic metres to 114,465
thousand cubic metres because the figure for the Äänekoski
paperboard mill was not included in the 2022 disclosures. Water
consumption was adjusted from 4,399 thousand cubic meters to
4,579 thousand cubic meters.
42
REPORT OF THE BOARD OF DIRECTORS
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METSÄ BOARD ANNUAL REVIEW 2023
E4 – Biodiversity and ecosystems
Material impacts, risks and opportunities related to biodiversity and ecosystems
Impacts Risks and opportunities for Metsä Board Management
Direct impact drivers of biodiversity loss
Climate change: Metsä Board’s production
generates greenhouse gases that cause global
warming.
The risks, opportunities and actions related to climate
change are discussed under E1 – Climate change.
• The risks, opportunities and actions related to climate
change are discussed under E1 – Climate change.
The company’s biogenic carbon dioxide emis-
sions are classified as carbon-neutral.
Pollution: The emissions to water, air and soil
from Metsä Board’s production units can have
a negative impact on species and ecosystems
in the area.
The risks, opportunities and actions related to pollution
are discussed under E2 – Pollution.
• The risks, opportunities and actions related to pollution
are discussed under E2 – Pollution.
Direct exploitation: Metsä Board uses wood
as its raw material. However, neither Metsä
Board nor Metsä Group owns forests. Instead,
they procure all their raw material from forests
whose owners always decide how they are
used. The impact of wood supply on biodiver-
sity and ecosystems is described in this table,
under Impacts on the state of species and the
extent and condition of ecosystems.
- -
Impacts on the state of species and the extent and condition of ecosystems
Commercial forest use reduces the amount
of dead wood and changes forest structure,
leading to changes in species and the state of
ecosystems.
Risks:
• Regulation that emphasises the protection of forest na-
ture to promote biodiversity restricts harvesting volumes
or increases wood supply costs.
• A complex regulatory environment sets conflicting
requirements for the forest industry.
• Ecological compensation may increase the protection of
commercial forests, as industries exploiting non-re-
newable materials strive to compensate their negative
impacts. Meanwhile, the use of non-renewable materials
continues.
• Consumers view forests as protected sites and reduce
their consumption of wood-based products.
• If the state of nature continues to weaken, the accepta-
bility of the forest industry as well as the reputation of
Metsä Board and Metsä Group as sustainable operators
will suffer.
• Metsä Group’s Wood Supply has adopted the princi-
ples of regenerative forestry, which aim to measurably
improve the state of nature by 2030. Examples of regen-
erative forestry actions:
- The Metsä Group Plus service that compensates forest
owners for the costs incurred from safeguarding
nature values
- Diversifying tree species in forests
- Increasing the number of old trees
- Diversifying and adding more decaying wood
- Increasing the structural diversity of forest stands
- Protecting valuable habitats
• Forest certification can be used to demonstrate that the
forest has been managed sustainably and responsibly.
The international forest certification systems in use are:
PEFC (Programme for the Endorsement of Forest Certifi-
cation, PEFC/02−31−92) and FSC® (Forest Stewardship
Council®, FSC-C001580).
• Regulatory risks are managed through active dialogue
with policymakers, discussed in more detail under G1 –
Business conduct.
Metsä Group aims to measurably and verifi-
ably strengthen the state of nature by 2030.
If achieved, this will have a positive impact on
the state of nature.
Opportunities:
• As a result of the improved state of nature and the
comprehensive management of ecosystem services, or
benefits obtained from nature, forests will be better able
to adapt to climate change.
• Metsä Group’s compliance with the principles of regener-
ative forestry and success in strengthening the state of
nature will improve Metsä Board’s and Metsä Group’s
reputation as sustainable operators.
Impacts on the state of species and the extent and condition of ecosystems
The draining of peatland forests causes
changes in habitats and can lead to biodiver-
sity loss.
Risk: Regulation that emphasises the special role of
peatlands as large carbon reservoirs, sources of GHG
emissions, and potential restoration and protection sites
restricts felling volumes.
• The goal of peatland forestry is to protect natural bog
environments and maintain the water economy and wa-
ter quality of water ecosystems, as well as protect their
species. New drainage is not created, and old drainage is
improved only if necessary. Bog environments suitable
for active restoration will be determined and selected
on a case-by-case basis. Continuous cover forestry is
proposed to forest owners on suitable sites.
If valuable habitats are not identified or taken
into account in wood supply and forest man-
agement, there will be fewer forests offering
special biodiversity and ecological value.
Risk: If the state of nature continues to deteriorate, the
forest industry’s legitimacy and the image of Metsä Group
as a sustainable operator will suffer.
• Metsä Board procures wood from commercial forests.
Forest certification and controlled origin also require the
company to consider valuable nature sites in commer-
cial forests. Metsä Group’s FSC® nature site service
helps focus the protection required by the FSC on the
sites most valuable in terms of nature.
Biodiversity and the condition of waterbodies
improve outside commercial forests.
Opportunity: Metsä Board’s and Metsä Group’s reputation
as sustainable operators strengthens.
• Metsä Group annually funds development projects with
a regional impact that improve biodiversity and the
condition of waterbodies and are implemented outside
commercial forests in Finland.
Metsä Board offers consumers products
based on naturally occurring tree species.
Opportunity: Regenerative forestry offers a competitive
advantage over competitors who use foreign tree species
in their products.
• In line with the principles of regenerative forestry, spruce,
pine, silver birch, downy birch and aspen – all species
that spread to Finland after the last Ice Age – are grown
as industrial trees.
43
Impacts Risks and opportunities for Metsä Board Management
Metsä Group will draw up biodiversity plans
for its mill sites to increase the biodiversity
of the sites, taking special local features into
account and combining local industrial history
and nature solutions.
Opportunities:
• Metsä Board’s and Metsä Group’s reputation as sustain-
able operators strengthens.
• Metsä Board can more comprehensively monitor the
environmental impact of its production units, with the
built environment’s biodiversity impacts included in
monitoring.
• Cooperation with significant stakeholders develops in
the localities of production units.
• In 2023, Metsä Group launched a multi-year action plan
in which a biodiversity plan will be drawn up for each
production unit. The project was launched as a pilot
project at the mills in Kemi. The plan encompasses areas
on the industrial site, as well as offsite land areas owned
by the company.
Impacts and dependencies on ecosystem services
Finnish forests produce a diverse range of
tangible and intangible services, with a local,
regional, national and international impact.
Commercial forest use reduces the amount
of dead wood and number of old trees and
makes forest structure more one-sided, weak-
ening the state of species and ecosystems.
Risk: For Metsä Board, wood production is one of nature’s
key ecosystem services. If the state of forest nature
deteriorates, forests become more vulnerable to weather
phenomena caused by climate change
• The goal of regenerative forestry is to develop forestry
so that nature’s various benefits from carbon sinks to
pollinators – that is, ecosystem services – can be meas-
ured, and that wood is produced as part of a developing
production model with multiple targets and based on
ecosystem services.
Metsä Group aims for the state of nature to
strengthen measurably and verifiably by 2030.
If this is achieved, it will have a positive impact
on the state of nature.
Opportunity: As a result of the improved state of nature
and the comprehensive management of ecosystem ser-
vices, or benefits obtained from nature, forests can adapt
better to climate change.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
Neutral impact on the environment and society or on Metsä Board’s business
Metsä Group’s 2030 sustainability targets for wood supply
2030 target 2023 2022
MG: Retention trees on regeneration felling sites, % 100 96 95
MG: High biodiversity stumps on harvesting sites, % 100 92 90
MG: Spruce as the only tree species after young stand management, % 0 25 -
MG: Measures promoting biodiversity, number 10,000 816 -
Comparative data have not been provided for all the new targets set in 2023.
MG: The target has been set at the level of Metsä Group. Metsä Group, which handles Metsä Board’s wood supply, has targets for promoting forest biodiversity and the sustainable use of
forests. The progress made in these targets is described in more detail in Metsä Group’s Sustainability statement.
■ The identification and assessment of material
impacts, risks and opportunities
The material impacts, risks and opportunities related to biodiversity and
ecosystems have been identified in a double materiality assessment
based on the principles of the company’s risk management process. The
materiality assessment is discussed on pages 26–28.
Metsä Board’s impacts, risks and opportunities related to forest
biodiversity and the state of forest ecosystems take place through Metsä
Group’s Wood Supply and Forest Services. Metsä Group’s wood supply is
guided by Wood Supply’s certified ISO 14001 environmental management
system.
Regulatory risks related to forest use are assessed and managed in
accordance with the principles of Metsä Group’s risk management process
in cooperation with Metsä Group’s Wood Supply and Corporate Affairs
unit. Wood supply is discussed in more detail under Business model, value
chain and strategy and G1 − Business conduct.
Metsä Board’s production units may also have negative impacts on
the mill sites’ biodiversity and ecosystems due to the units’ emissions,
for example. The methods for identifying and managing the impacts of
pollution are discussed under E2 – Pollution.
The production units’ environmental impacts are assessed in connection
with the environmental impact assessments of investment projects and
during the environmental permit processes. The need for environmental
impact assessments is determined by the local EIA authority.
■ Policies
The Environmental policy lays the foundation for environmental target
setting. In its Environmental policy, the company is committed to obtaining
wood raw material from sustainably managed forests and to paying
attention to the economic, social and environmental aspects of forest man-
agement and wood supply. Environmental management and continued
environmental performance at mills are guided by the requirements of the
mills’ certified quality, environmental and energy management systems.
In 2023, Metsä Group’s Board of Directors adopted regenerative forestry
principles. The goal of regenerative forestry measures is to verifiably
strengthen the state of Finnish nature as part of Metsä Group’s Wood
Supply and Forest Services. Progress is monitored with the indicators
specified for the 2030 targets, presented in the table on page 44.
With its targets for strengthening the state of nature, Metsä Group con-
tributes to international, the EU’s and Finland’s biodiversity targets. The
principles of regenerative forestry are in line with the biodiversity roadmap
prepared by the Finnish Forest Industries Federation.
In the Leader in sustainability strategic programme, the focus concern-
ing forest biodiversity is on reaching the strategic sustainability targets in
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Metsä Group’s Wood Supply and Forest Services and increasing the share
of certified wood fibre in Metsä Board’s wood use.
Forest certification is a demonstration of sustainable and responsible
forest management. Forest certification has two key elements: sustainable
forest management and the wood supply chain. The international forest
certification systems used by Metsä Board are PEFC (Programme for the
Endorsement of Forest Certification, PEFC/02−31−92) and FSC® (Forest
Stewardship Council®, FSC-C001580). Metsä Board aims for the share of
certified wood fibre to remain at least 90 per cent of all the wood fibre it
uses.
The wood used by Metsä Board is procured by Metsä Group. All the
wood that Metsä Board uses comes from either certified forests or forests
that meet the requirements of controlled origin (PEFC Controlled Sources,
FSC® Controlled Wood). The origin of the wood is always known.
The procurement of Metsä Board’s wood does not cause deforestation.
The countries from which wood is procured impose a statutory obligation
to renew forests after regeneration felling. The wood that Metsä Board
uses in its products is mainly procured from Finland and Sweden. A break-
down of wood supply by country is presented in the table on page 67. Metsä
Group’s Wood Supply requires all partners to comply with legislation, and
operations adhere to the European Timber Regulation (EUTR), US Lacey
Act and UK Timber Regulation (UKTR). Wood supply is described in more
detail under G1 – Business conduct.
Metsä Group’s Wood Supply complies with certification requirements
and considers the impacts of its operations on its key stakeholders, includ-
ing forest owners, mill locations and their residents, nature, and people
who earn their livelihood from nature, such as indigenous peoples, as well
as other parties interested in the environment, such as NGOs. Metsä Group
has an operating model for the active engagement of stakeholders, as well
as processes for managing stakeholder engagement, which are described
under S3 – Affected communities.
■ Actions
Direct impact drivers of biodiversity loss
Actions related to climate change mitigation and adaptation, as well as
pollution, are discussed under E1 – Climate change and E2 – Pollution.
Impacts on the state of species and the extent and
condition of ecosystems
Regenerative forestry
Wood raw material is used as efficiently as possible to ensure high added
value and minimise the forest area needed for harvesting. The utilisation
of side streams is described in more detail under E5 – Resource use and
circular economy.
The principles of Metsä Group’s regenerative forestry are discussed
under Policies in the section on biodiversity. As part of the regenerative
forestry programme, Metsä Group and its stakeholders are developing
monitoring systems so the impacts of operations on the state of nature can
be measured and disclosed.
Metsä Group cooperates actively with a diverse research community,
and the forest and nature management and harvesting methods used in
the company’s wood supply are based on recent research. Some of the key
biodiversity-promoting measures that follow the principles of regenerative
forestry include the following:
• Wood is procured only from certified forests or sources of controlled
origin (see Policies for further information).
• Metsä Group only procures tree species naturally occurring in the area,
that is, spruce, pine, silver birch, downy birch and aspen.
• Mixed forests increase forest biodiversity and forest resilience against
storm and insect damage, for example.
• In wood procurement areas, decaying wood is added by retaining dead
trees, leaving retention trees preferably in groups, and by making high
biodiversity stumps during thinning and regeneration felling.
• In herb-rich forests, Wood Supply recommends nature management
methods – and voluntary protection for the most valuable sites. Nature
management measures are thus focused on places where they have the
greatest impact on biodiversity.
• Protective thickets are left for animals at all stages of forest
management.
• Buffer zones along waterbodies promote biodiversity and prevent the
runoff of soil and nutrients.
• Continuous cover forestry is chosen as the procedure for sites that it is
suited for.
• The FSC nature site service contributes to focusing protection on the
most valuable nature sites.
A very tangible example of the practical implementation of regenerative
forestry measures in forest management services and wood supply is the
Metsä Group Plus service introduced in June 2023, which is a forest man-
agement model designed for Metsäliitto Cooperative’s owner-members. In
the Plus model, measures that safeguard and improve the state of forest
nature more comprehensively than current standard practices are agreed
in connection with wood trade and orders for young stand management.
Metsä Board has identified the key legislative initiatives that may affect
forest use and the production of Metsä Board’s products. As part of Metsä
Group, Metsä Board participates in the management of regulatory risks
by actively engaging in policy dialogue and targeting its key messages
based on the identified regulatory risks. Advocacy is discussed under
G1 – Business conduct.
Regenerative forestry makes business more resilient to impacts related
to legislation, the markets and climate change.
Biodiversity outside commercial forests
Metsä Group’s nature programme annually funds regional development
projects that improve biodiversity and the state of waterbodies and are
implemented outside commercial forests in Finland. In 2023, a total of 23
Finnish biodiversity management and restoration projects were selected
for funding. They focus on themes such as the management of traditional
landscapes and restoration of flowing waters. The funding for these
projects totalled EUR 600,000.
Biodiversity in areas around production units
In 2023, Metsä Group launched a multi-year systematic action plan in
which a biodiversity plan will be drawn up for each of the company’s
production units. The project was launched in Kemi, which will serve as the
pilot site for the entire project. The action plan encompasses the industrial
45
site, as well as off-site land areas that are used by the town for recreational
purposes. The special features of local nature will be taken into account
in the project, and the living conditions of endangered species will be
improved.
Impacts and dependencies on ecosystem services
Wood production is a key ecosystem service, or a benefit offered by nature,
for Metsä Board. The goal of Metsä Group’s forest management services
is to safeguard locally, nationally and internationally significant ecosystem
services. Strengthening the state of nature with regenerative forestry and
comprehensively managing nature’s ecosystem services improve forests’
adaptation to climate change
Reporting principles for metrics
The calculation of high biodiversity stumps left on harvesting
sites covers the direct standing sales carried out by Metsä
Group’s Wood Supply and Forest Services. The harvesting sites
include intermediate and regeneration felling sites. The calcula-
tion of retention trees left on regeneration felling sites covers the
direct standing sales carried out. Forest certification criteria set
minimum requirements for the number of retention trees. The
calculation is based on the number of regeneration felling sites.
Stands containing only spruce after young stand management
are determined based on the young stand management work
carried out. The calculation takes into account spruce-dominated
sites where spruce accounts for more than 50 per cent of the
remaining trees. Spruce is considered to be the only tree species
if other species account for less than 10 per cent on the site.
The number of measures promoting biodiversity is calculated
based on the measures carried out in owner-members’ forests.
The measures that are currently monitored include nature
management measures in herb-rich forests, burned retention
trees, FSC nature site services and the number of Metsä Group
Plus agreements.
E5 – Resource use and circular economy
Material impacts, risks and opportunities related to resource use and the circular economy
Impacts Risks and opportunities for Metsä Board Management
Resources inflows, including resource use
Thanks to regenerative forestry, Metsä Board’s
primary renewable resources can be obtained
in line with circular economy principles, and
they are a more sustainable alternative to
primary fossil-based raw materials, the pro-
curement of which is not compatible with the
circular economy.
The impact of wood raw material on the car-
bon balance of forests and forest biodiversity,
as well as the related risks and opportunities,
are presented under E1 – Climate change
and E4 – Biodiversity and ecosystems. The
impacts, risks and opportunities of water and
energy consumption are described under
E1 – Climate change and E3 Water and marine
resources.
Opportunity: Legislation that recognises the climate and
other benefits of fossil free raw materials in the produc-
tion of materials and sets requirements for replacing
primary fossil-based raw materials with more sustainable
alternatives.
• Wood raw material is utilised entirely.
• Industrial symbioses are developed so that the network
of companies offers synergies in resource use.
• R&D for developing fossil free alternatives and making
products more lightweight.
• The continuous improvement of production processes
and new mill investments further improve resource
efficiency.
• Commitment to regenerative forestry principles, the
continuous development of forest management services
and other active cooperation with the cooperative’s
owner-members. The actions are described in more
detail under E1 – Climate change and E4 – Biodiversity
and ecosystems.
• Attention is also paid to the resource efficiency of other
materials and energy use. Actions to reduce water use
are described in more detail under E3 – Water and ma-
rine resources, and actions to improve energy efficiency
are described under E1 – Climate change.
Risk: Legislation that requires the use of recycled material
in several products and does not recognise the circular
economy benefits offered by fresh fibres and other bio-
based raw materials. Because the current business strate-
gy focuses on fresh fibre products, this will probably have
a negative impact on business. Adapting to a changed
operating environment will require new investments,
among other things.
Resource outflows related to products and services
Metsä Board’s products offer customers and
consumers the opportunity to use recyclable
products and an alternative to products made
from fossil-based raw materials.
Opportunity: Legislation and international agreements
that favour recyclable products made from renewable
resources by the forest industry instead of packaging
made from materials such as plastic offer more growth
opportunities.
• R&D and services increase the recyclability of products
and reduce their environmental footprint.
• Cooperation with customers and other value-chain
operators is active.
• Active engagement in advocacy. Metsä Board’s influ-
encing and lobbying are discussed under G1 – Business
conduct.
Risk: Legislation that favours reusable packaging instead
of recyclable single-use packaging can reduce the demand
for Metsä Board’s products and in the worst case, prohibit
the use of single-use packaging. If the chemical recycling
of plastics is implemented at industrial scale, the use of
plastics may become more acceptable, and there will be
less need to replace plastics.
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Impacts Risks and opportunities for Metsä Board Management
Waste and side streams
Metsä Board’s production side streams are
converted into new products.
Opportunity: The utilisation of side streams generates
financial benefit. Making full use of the forest industry’s
side streams strengthens the industry’s acceptability and
secures future operations.
• In cooperation with Metsä Group’s other business areas,
Metsä Board aims to make full use of wood raw material.
• New applications are jointly sought for production side
streams with partners.
• As part of Metsä Group, Metsä Board develops industrial
symbioses so that the network of companies offers
synergies in resource use.
• Metsä Board invests in cleaner process technology.
Metsä Board’s production currently generates
landfill waste that causes emissions to air, wa-
ter and soil. Nearly all production side streams
are utilised as materials or energy. Landfill
waste in the reporting year is presented in the
table on page 49. The 2030 target is 0 tonnes
of process waste delivered to landfills.
Risk: If an end use is not found for all side streams, the
acceptability of forest industry operations will weaken, and
no economic benefit will be obtained from side streams.
Risk: Legislation that leads to a decline in the use of forest
industry side streams for bioenergy generation erodes the
acceptability of forest industry operations.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
Metsä Board’s 2030 sustainability target
2030 target 2023 2022
Process waste delivered to landfills, t 0 1,164 130
■ Progress in targets
• Process waste to landfills – In 2023, the volume of landfill waste
increased from the previous year due to a waste batch resulting from
the Husum investment shutdown. The investment shutdown is also
expected to affect the volume of landfill waste in 2024. Except for
this single incident, the reduction of Metsä Board’s landfill waste has
progressed as planned towards the 2030 target.
The targets related to water and energy use are discussed under E1 – Cli-
mate change and E3 – Water and marine resources.
Comprehensive system-level indicators for the circular economy are still
under development internationally. Metsä Group follows the development
of indicators and participates in testing and development work in the scope
of the Ellen MacArthur Foundation.
■ The identification and assessment of material
impacts, risks and opportunities
The material impacts, risks and opportunities related to resource use and
the circular economy have been identified in a double materiality assess-
ment based on the principles of the company’s risk management process.
The materiality assessment is discussed on pages 26–28.
The production units’ resource efficiency and waste management
are considered in the environmental impact assessments of investment
projects and during the environmental permit processes. The need
for environmental impact assessments is determined by the local EIA
authority.
After any environmental impact assessment, the production units
operate in accordance with their environmental permit and the company’s
operational management system. The mills’ waste management is also
regulated by the conditions in the environmental permits. Some mills have
their own waste management area, subject to an environmental permit, the
environmental impacts of which are monitored and managed in accord-
ance with the permit conditions. Risks related to waste management are
assessed as part of regular risk assessments.
■ Policies
In its environmental policy, Metsä Board is committed to regenerative
forestry, efficiently using raw materials, water and energy, and continu-
ously developing operations. The side streams generated in production
processes are used primarily as raw material or energy. The company
takes advantage of synergies between its production units and develops
industrial cycles and the recyclability of products.
In its operations, the company follows circular economy principles, safe-
guarding nature’s capacity for renewal, minimising waste and emissions,
and keeping natural resources used by society in use for as long as possible
and as valuable as possible.
As the complete recycling and reuse of materials are impossible,
maintaining the material cycle also requires the addition of primary
raw materials to the cycle. Fresh fibre is therefore needed to maintain a
good and functioning recycling loop of fibre-based packaging. Primary
renewable resources can be obtained while safeguarding nature’s capacity
for renewal, as required by circular economy principles. Metsä Group’s
wood supply is based on regenerative forestry, which is discussed under
E1 – Climate change and E4 – Biodiversity and ecosystems.
In the Leader in sustainability strategic programme, the focus concern-
ing the circular economy is on achieving the strategic sustainability targets
for fossil free production units and products, water and energy efficiency,
and expanding the company’s role in the circular economy. The goal of
the Effective innovation programme is to ensure the long-term competi-
tiveness of Metsä Board’s products. Its focal areas include reducing the
weight of paperboard and developing fossil free recyclable products such
as dispersion-coated paperboard.
All Metsä Board’s paperboards are produced from renewable and
recyclable fresh fibre. Fresh fibre paperboards do not interfere with the
smell or flavour of the product they cover, and they are the safest choice for
fibre packaging designed for food and other demanding end uses.
47
■ Actions
The company’s key strategic actions related to resource use and the
circular economy are the following:
• Committing to regenerative forestry principles and also promoting
regenerative land use in mill areas. Further information is available
under E1 – Climate change and E4 Biodiversity and ecosystems.
• Reducing water use by developing production processes and deploying
new technologies. Further information is available under E3 – Water
resources.
• Transitioning to fully fossil free energy in production. Further informa-
tion is available under E1 – Climate change.
• Improving energy efficiency by using electricity, heat and fuel more
efficiently. Further information is available under E1 – Climate change.
• Transitioning to fully fossil free raw materials and packaging materials.
Further information is available under E1 – Climate change.
• Reducing the environmental impacts of packaging through product
development such as lightweighting of paperboards and by offering
customers services in areas like sustainability and packaging design.
Further information is available in the Report of Board of Directors,
under R&D and innovation.
• Promoting recycling by participating in international initiatives. Further
information is available under G1 – Political influence and lobbying
activities.
• Finding new purposes for waste generated in production jointly with
partners.
Resources inflows, including resource use
Raw materials are used resource efficiently to avoid waste in production.
The main raw material, renewable wood, is used fully. The most valuable
part of the tree, log wood, is used for wood products produced by Metsä
Group’s other business areas, while thinner tree parts and the thin trees
obtained from thinning are used as the main raw material for pulp and
paperboard mills. The branches and logging residue are used in the
production of renewable energy. Metsä Board’s mills are continuously
improving their recovery processes to avoid the generation of waste in
pulp and paperboard production. For example, increasing process water
recycling makes energy use more efficient and reduces the loss of fibre
material.
The pre-engineering of the Kaskinen folding boxboard mill, launched in
2022, is based on the idea of fossil free production, reduced paperboard
weight and notably reduced wood, energy and water use per tonne of
folding boxboard produced compared with current production units.
Outflows related to products and services
In the circular economy for fibre-based packaging material, Metsä Board’s
task is to provide markets with premium fresh fibre paperboards as
resource efficiently as possible, help replace fossil-based materials and
reduce the carbon footprint of packaging. Ensuring and developing the
recyclability and compostability of paperboards is of key importance.
Metsä Board’s paperboards, mainly produced from renewable raw
materials, can be recycled, depending on local recycling systems. Except
for the PE-coated grades, all the company’s paperboards are certified as
industrially compostable according to the DIN EN 13432 and ASTM D6400
standards and as home compostable in accordance with the NF T 51–800
standard.
The company’s R&D focuses on lightweighting of paperboard and devel-
oping bio-based barrier coating for end-uses in food packaging. Further
information is available in the Report of the Board of Directors, under R&D
and innovation.
Through its 360 Services, Metsä Board offers customers services in
fields like R&D, sustainability and packaging design to help customers
improve the recyclability and material efficiency of their packages
through packaging life-cycle calculations, data-based comparisons of the
environmental impacts of different materials, and concrete packaging
solutions. The life-cycle assessments of all the company’s products and
the comparisons between different materials are carried out in accordance
with the ISO 14040 and ISO 14044 standards. The calculation model of the
life-cycle assessments has been verified by an external partner, and two of
the company’s products have an environmental product declaration (EPD),
stating the comparable results of the paperboard product’s life-cycle
assessment.
Waste and side streams
Most of the production side streams are utilised. Wood-based waste and
by-products, sludge, ashes and lime are used in soil improvement and
landscaping, fertilisers, chemicals industry applications, and in energy
generation. A relatively small share of the materials is delivered to landfills
(table on page 49).
The main process waste components are green liquor dregs generated
in the pulp production process and ash unsuitable for fertilisation, which
is generated in energy generation. No established end use has yet been
identified for green liquor dregs. Metsä Group is actively seeking new
applications for green liquor dregs by conducting its own research and pilot
projects and participating in universities’ jointly funded research projects.
In 2023, batches of green liquor dregs were supplied for testing in new
applications, and they were also used in earthworks.
Some mills have their own waste management area or landfill, where
operations are subject to an environmental permit. The environmental
impacts of the mills’ own waste management areas are minimised in
accordance with the environmental permits. Part of the waste is delivered
to external waste management companies, whose operations are subject
to environmental permits, for processing or disposal. The sustainability of
waste management operators is ensured in supply agreements.
A strategic R&D programme for converting side streams for use in the
circular economy is underway at Metsä Group. Metsä Group is researching
and developing, both independently and with partners, various new
purposes for sludge, ashes, lignin, sawdust, bark and many other forest
industry side streams. It is also exploring opportunities for carbon recovery
and upgrading.
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Inflows of material and energy
Wood-based raw materials, 1,000 t 2023 2022
Wood 3,505 4,450
Purchased pulp 373 558
Recycled fibre 0 0
Other raw materials, 1,000 t 2023 2022
Process chemicals 28 37
Coatings, binders and pigments 254 345
Packaging material 21 30
Share of renewable and recyclable raw
materials and packaging materials, % 2023 2022
Renewable materials 93 93
Recycled materials 0.1 0.2
Metsä Board uses recycled paperboard for the cores of paperboard reels.
Outflows of material and energy
Products, 1,000 t 2023 2022
Pulp 555 683
BCTMP 441 727
Paperboard 1,319 1,890
Other bioproducts (tall oil and turpentine) 17 20
By-products, 1,000 t 2023 2022
Fertilising and soil improvement
(lime, ash, sandy bark)
12 12
Industrial use (lime dust, ash, de-inking sludge) 13 25
Energy use (de-inking sludge, sandy bark) 0 0
Total 25 36
Waste use and disposal, 1,000 t On-site Off-site Total 2023 Total 2022
PROCESS WASTE (NON-HAZARDOUS)
Material utilisation 10 49 59 55
Energy use 59 0.6 59 74
Landfill 0 1.2 1.2 0.1
Total process waste 69 50 119 129
OTHER NON-HAZARDOUS WASTE
Material utilisation 0.1 3.6 3.8 4.6
Energy use 0 0.3 0.3 0.2
Landfill 0 0.1 0.1 0.03
Total other non-hazardous waste 0.1 4.0 4.1 4.8
HAZARDOUS WASTE
Material utilisation - 0.5 0.5 0.1
Energy use - 0.01 0.01 0.01
Incineration without energy recovery - 0.8 0.8 0.7
Landfill - 0.01 0.01 0.01
Other disposal - 0.1 0.1 0.04
Total hazardous waste - 1.4 1.4 0.9
Total waste 69 56 125 133
Reporting principles for metrics
The waste volumes include waste transferred directly from
the mill process and interim storage to final disposal, including
material and energy recovery, landfill disposal, and hazardous
waste treatment. Waste transferred from the mill process to
interim storage is not included in the disclosed waste volumes.
The disclosed waste volumes include moisture.
The volume of process waste delivered to landfills includes the
volume of waste from production processes (in tonnes) delivered
to landfills from all the production units. The 2030 sustainability
target only applies to process waste. For example, it does not
apply to waste generated in production units’ cafeterias, the
volume of which is non-material compared with process waste.
The volume of waste treated in the mills’ own waste treatment
areas is collected from weighting reports. Information about the
volume of waste treated by external service providers and the
treatment method is obtained from service providers.
49
S – Social responsibility
S1 – Own workforce
Material impacts, risks and opportunities related to own workforce
Material sub-sub-topics Impacts Risks and opportunities for Metsä Board Management
Equal treatment and opportunities for all
• Gender equality and equal
pay for work of equal value
• Diversity
• Measures against violence
and harassment in the
workplace
• Training and skills
development
If equality is realised in the
treatment, compensation and re-
cruitment of employees, wellbeing
can increase, and opportunities
for continuous learning and career
development can improve.
Opportunity: The most suitable
professionals are selected for key
duties, which improves Metsä Board’s
employer image, as well as its innova-
tiveness and performance.
• Anonymous recruitment is the company’s main recruit-
ment method.
• Competence development and performance manage-
ment are systematic.
• DEI (diversity, equality and inclusion) activities are
invested in.
• The share of women is increased at different organisa-
tional levels.
• Everyone can report grievances through the Compli-
ance and Ethics Channel.
If equality is not realised in the
treatment, compensation or re-
cruitment of employees, wellbeing
and opportunities for continuous
learning and career development
would be weakened.
Risk: The most suitable professionals
are not selected for key duties, which
weakens Metsä Board’s employer
image, as well as its innovativeness
and performance.
Working conditions
• Secure employment
• Working time
• Adequate wages
• Social dialogue
• Collective bargaining
• Work-life balance
Actions promoting working con-
ditions, such as company-specific
collective agreements, flexitime
and individual working time model
for shift work, positively impact
employees’ work ability and
wellbeing.
Opportunity: Workforce’s work ability,
job satisfaction and commitment to
the company increase. This improves
Metsä Board’s employer image and
performance.
• Metsä Board’s production units are in countries with
high-quality statutory requirements concerning working
conditions. Local legislation is followed in all operating
countries.
• Everyone has the possibility to choose whether they
belong to a trade union or not.
• Metsä Board uses company-specific collective
agreements.
• All Metsä Board employees are covered by the central-
ised HR management system.
• Employees can work remotely depending on the nature
of their work.
• Employees have flexible working hours.
• An individual working time model for shift work is being
tested at Finnish production units.
Inadequate working conditions
would weaken the quality of life of
employees and their families and
increase inequality.
• Health and safety Actions promoting health and
safety positively impact employees’
general physical and mental well-
being and work ability.
Risk: Workforce’s work ability, job
satisfaction and commitment to
the company decline. This weakens
Metsä Board’s employer image and
performance.
• Actions promoting health and safety at Metsä Board
include, for example:
- Certified safety management systems
- Training, opportunities for safety observations,
ongoing risk assessments and defined processes for
responding to accidents
- Operating models for early support and return-to-work
support (rehabilitative activities), and a substance
abuse programme
- Training of supervisors in managing occupational
safety and wellbeing
- Employees are offered healthcare and a sports and
culture benefit that anticipate and promote the main-
tenance of work ability
Inadequate actions for securing
health and safety would negatively
impact employees’ general physi-
cal and mental wellbeing and work
ability.
Other work-related rights
• Child labour
• Forced labour
Violation of labour rights would
cause human suffering, inequality
and a deterioration in the quality of
life of employees and their families.
Risk: Metsä Board suffers permanent
damage to its reputation. Workforce’s
job satisfaction and commitment to
the company decline.
• Metsä Board has focused its production in countries
with no significant risk of child or forced labour.
• Metsä Board respects human rights in all its operations,
does not accept human rights violations in any form,
and is committed to ensuring that its operations do not
result in negative human rights impacts.
• Employees receive human rights training through
e-learning courses.
• Everyone can report grievances through the Compli-
ance and Ethics Channel.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
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Metsä Board’s 2030 sustainability targets
2030 target 2023 2022
Anonymous recruitment for vacancies open to all, % 100 72 57
Women in management positions, % >30 21 25
Total recordable incident frequency, own employees (TRIF) 0 6.1 6.7
Employee job satisfaction AAA A+ -
The previous result of the employee survey is from 2021.
■ Progress in targets
• Anonymous recruitment for vacancies open to all – Metsä Board
initiated anonymous recruitment in 2022. The 2023 results offer a good
starting point for the 2030 target.
• Women in management positions – Despite the measures taken, the
share of women in management positions did not increase in line with
the target in 2023. The measures’ effectiveness and proportionality in
terms of the target will be assessed in 2024.
• Total recordable incident frequency, own employees (TRIF) – TRIF
progressed towards the zero accidents target. Unfortunately, some of
the accidents were serious, so the emphasis on proactive safety work
and preventing serious work-related accidents must continue.
• Employee job satisfaction – The result remained the same as in the
previous employee survey. The goal is to enhance the implementation
of the measures set based on the employee survey and to assess any
other measures affecting job satisfaction.
■ The identification and assessment of
material impacts, risks and opportunities
The material impacts, risks and opportunities related to the company’s
own workforce have been identified in a double materiality assessment
based on the principles of the company’s risk management process. The
materiality assessment is discussed on pages 26–28.
■ Policies
The sustainability of Metsä Board’s own workforce is guided by applicable
legislation, as well as policies comprising Metsä Group’s policies approved
by the company’s Board of Directors, such as the Code of Conduct, the
Metsä for all vision and management systems. The policies apply to all
Metsä Board employees. The key occupational safety training applies to
the company’s own employees and leased labour.
The Motivated people strategic programme focuses on the competence
development of management and employees’ ; the mills’ common
operating model; a diverse, equal and inclusive (DEI) culture; the imple-
mentation and development of an ethical and respectful company culture,
and ensuring future employee needs. The goal is that everyone in the
workplace community understands the significance of their role and work
in strategy implementation. The Safe and efficient operations and organic
growth strategic programme focuses on topics such as the continuous
improvement of occupational safety. One of the goals is to reduce the
number of work-related accidents.
Equal treatment and opportunities for all
Metsä Board is committed to promoting the diversity, equality and inclu-
sion (DEI) of its own workforce. This work is guided by Metsä Group’s Code
of Conduct, Equality policy and the Metsä for all vision, published in 2021.
The DEI steering group, set up in 2023, handles the practical guidance of
Metsä Board’s equality work, which aims to ensure the implementation of
the Metsä for all vision and the company’s other principles.
The Code of Conduct and Equality policy encompass the prohibition of
discrimination based on gender, age, origin, race, nationality, language,
religion, belief, opinion, political activity, trade union activity, family
relations, pregnancy, health, disability, sexual orientation or any other
personal characteristics. Indirect discrimination is also prohibited. The
non-discrimination principle applies throughout the life-cycle of an employ-
ment relationship, regardless of whether the employment relationship is
permanent, temporary or part-time.
Awareness of diversity, equality, inclusion and non-discrimination is
promoted through the Code of Conduct and DEI e-learning courses, which
are mandatory for employees. The themes are part of the induction of new
employees and apprentices, and supervisor and leadership trainings.
Training and skills development
Metsä Board’s management and employees’ skills development are guided
by the Human Resources policy. Metsä Board’s management and HR are
in charge of implementing the policies included in the Human Resources
policy. Management and supervisory work is supported through coaching,
where participants discuss matters such as Metsä Group’s good leadership
framework. Employees’ skills are developed long-term in line with Metsä
Board’s strategy and goals.
Working conditions
Metsä Board complies with the applicable practices for working conditions
in its operating countries, in addition to local legislation. In its Code of
Conduct, the company is committed to fair terms and conditions of
employment. In Finland, Metsä Board follows company-specific collective
agreements for the chemical forest industry.
All Metsä Board production units and 88% of the employees are located
in Finland and Sweden, both of which have high-standard statutory
requirements concerning working conditions such as reasonable working
hours, annual leave, parental leave and part-time work. The wage payment
practices for the family leave of employees in Finland have been harmo-
nised to a level that exceeds the requirements of family leave legislation
and provides parents more equal opportunities to care for their child. All
employees are paid a living wage (situation at the end of the reporting
period, 31 December 2023). Metsä Board’s employees can choose whether
they belong to a trade union or not.
51
Health and safety
Metsä Board’s occupational safety is guided by the safety management
system, comprising the Corporate Security policy and the safety princi-
ples, standards, processes and work instructions. Metsä Board’s safety
management system considers each country’s legislation, for example,
the Occupational Safety and Health Act in Finland. In addition to guiding
occupational safety, the ISO 45001 standard calls for a safety management
system. Metsä Board’s CEO is responsible for the implementation of safety
policies in accordance with the requirements specified by Metsä Group’s
senior management.
The roles and responsibilities of occupational safety are defined in
the safety management principles. The related e-learning course is
mandatory for the employees of production units. The General Safety
Induction e-learning course on hazards and risks in the work environment
is mandatory for Metsä Board’s own workforce working in production units
and construction sites.
All Metsä Board mills comply with the ISO 45001 standard for occupa-
tional health and safety. All Metsä Board mills and the company’s head
office apply the 5S method for organising workplaces and standardising
working methods, which aims to increase productivity, safety and wellbe-
ing at work.
At Metsä Board, wellbeing and the improvement and maintenance of
work ability are guided by the Code of Conduct and the guidelines for
wellbeing and occupational safety, in which Metsä Group commits to
promoting the employees’ physical and mental wellbeing. The promotion
of workplace wellbeing and work ability is proactive, the goal being to
identify threats to employees’ work ability, initiate actions and maintain the
employees’ health throughout their careers. The sites are responsible for
compliance with applicable legislation and Metsä Group’s requirements for
workplace wellbeing.
Metsä Board organises healthcare for its employees in accordance with
each country’s legislation. Information about healthcare services is availa-
ble on the company’s intranet pages, and it is also included in employees’
induction.
Other work-related rights
As part of the Code of Conduct, Metsä Board is committed to acting in
accordance with the UN Guiding Principles on Business and Human Rights
and to respecting internationally recognised human rights in accordance
with the UN’s Universal Declaration of Human Rights and the ILO’s
Declaration on Fundamental Principles and Rights at Work. Metsä Board
is committed to ensuring that no child or forced labour, human trafficking
or other forms of modern slavery occurs in its business operations and
supply chain. Metsä Group publishes a modern slavery statement annually
in accordance with the UK Modern Slavery Act, in which it describes the
actions taken to ensure that no modern slavery occur in the company’s
own operations or its supply chain. Metsä Board supports the UN Global
Compact initiative and its principles concerning human rights and employ-
ees, among other things. Human rights matters are discussed in e-learning
courses such as those focusing on sustainability, the Code of Conduct and
DEI, which all employees are required to complete regularly.
■ Engaging with the workforce and
workforce representatives about impacts
Metsä for all vision
Interaction with employees played an important role when defining the
Metsä for all vision. The vision’s content was influenced by the opinions
of the international working group comprising the company’s employees,
as well as the results of the survey for all employees. The site-specific
development measures related to the vision were determined in workshops
for local management, aided by site-specific DEI employee surveys. The
workshops and DEI surveys are discussed under Actions.
Collective agreements
Company-specific collective agreements for the chemical forest industry
are renewed among the parties based on the principle of continuous
negotiations. The concluding of company-specific collective agreements
marked the beginning of measures carried out jointly with the employees’
representatives to renew and improve work life.
Cooperative activities
Metsä Board complies with local legislation and applicable collective
agreements in all its operating countries. Cooperation is carried out in
accordance with each country’s legislation. The aim of cooperation is to
develop the company’s operations and the employees’ opportunities to
influence the company’s decision-making concerning their work, working
conditions and position in the company.
In Finland, elected representatives participate annually in Metsä
Group’s cooperation forum and Metsä Board’s corporate meeting, where
the elected representatives and the company management discuss the
elected representatives’ questions, development proposals and the
group’s financial position. In addition, the management team at all mills in
Finland includes an elected representative.
Metsä Board has a European Works Council (EWC). The goal of the
EWC is to promote the company’s internal information flow and contacts
between the Corporate Management and employees, as well as to regularly
discuss questions about the company’s multinational operations that are
significant to the employees, primarily in accordance with the Finnish ver-
sion of the EWC agreement. The Works Council is not intended to discuss
matters regulated through national or local collective agreements.
Employee survey, ethics barometer and Pulse survey
Metsä Board conducts an employee survey, measuring job satisfaction,
and an ethics barometer, measuring the employees’ views on the practical
implementation of the Code of Conduct, in alternate years. The ethics
barometer is discussed under G1 – Business conduct.
The employee survey is the responsibility of the HR function, which
supports the company management in handling the survey results and
addressing them in decision-making. The results are discussed at different
organisational levels and with elected representatives. Supervisors are
trained to process the results, and teams are offered professional support
for processing the results and preparing development actions. The results
are used in the workplace communities to define development measures,
the implementation of which is monitored in units and by the company
management.
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Metsä Board measures employees’ commitment to the company and
their views on the ethics of business with the Pulse survey, conducted four
times a year.
The results of the employee survey, ethics barometer and Pulse survey
are used as indicators for strategy implementation.
Safety talks and occupational health
and safety committees
Occupational safety is promoted and supported with safety talks, or infor-
mation sessions for the workforce, which are recorded in the system. The
occupational health and safety committees of mill sites regularly discuss
matters related to the promotion of occupational safety with various
groups of the workforce. The occupational health and safety committee
prepares an annual action plan for occupational safety, based on which
the occupational health and safety manager and the committee jointly
determine the key development measures related to occupational safety.
The occupational health and safety committees represent the company’s
own workforce as a whole, that is, the company’s own employees and
leased labour.
■ Processes to remediate negative impacts
and channels for the company’s own
employees to raise concerns
Compliance and ethics channel
The company’s own workforce can report any ethical concerns or
non-compliance with legislation they detect through Metsä Group’s
Compliance and Ethics Channel or to their supervisor, local management,
HR or the Compliance Committee. The Compliance and Ethics Channel,
raising concerns and the processing of notifications are discussed in more
detail under G1 – Business conduct.
Working conditions
Health and safety
Metsä Board’s risk assessment and management is supported by the
HSEQ system, designed for recording and monitoring safety observations,
accidents, close calls, corrective measure, employee briefing sessions,
known as safety talks, and safety walks. Entries can be made by anyone
belonging to the company’s own workforce. Safety observations are dis-
cussed in daily meetings. Metsä Board does not accept countermeasures
against whistle-blowers. If required, whistle-blowers can also submit a
report anonymously through the Compliance and Ethics Channel.
All accidents and hazardous situations are investigated. The investiga-
tion creates conditions for avoiding similar situations and identifying any
shortcomings in safety management. When the investigation report is
completed, a summary of the investigation is distributed to all Metsä Group
business areas.
■ Actions
Equal treatment and opportunities for all
The focal points of the Metsä for all vision are equality and gender equality,
diversity, inclusion, and cultural change. They guide the development of
employee processes and the annually determined measures for achieving
the vision. As part of the continuous development work, an equal pay
survey is conducted annually, employees are trained regularly, and
measures are taken to ensure that the gender distribution in supervisor
and leadership trainings corresponds to the DEI targets.
Breaking the forest sector’s traditional male dominance has been identi-
fied as a key theme in Metsä Board’s social responsibility. In addition to the
company’s strategic target (>30% of women in management positions),
efforts are made to increase the share of women at all organisational levels.
Anonymous recruitment is the main recruitment method. It supports the
diversity of employees by encouraging people with different backgrounds
to apply for jobs at Metsä Board. Anonymous recruitment encourages
personnel to consider their unconscious biases and their potential impact
on recruitment.
Based on the results of the 2022 ethics barometer, increasing awareness
of the Metsä for all vision and strengthening its implementation at the
local level was determined as a development area. To promote it, a
workshop-based programme was launched for local management. In
the workshops, development measures will be determined based on the
results of the DEI survey conducted among local employees. Key areas of
development identified in the DEI surveys conducted by the end of 2023
include the unequal distribution of workload, the unequal treatment of
employees and poor work-life balance. The workshops will continue in the
first half of 2024.
Training and skills development
The aim is to ensure the availability and retention of skilled employees by
investing in development programmes, successor planning, cooperation
with educational institutions, and employer image. Competence surveys
support the development of multi-competence and competence measure-
ment. Personal assessments and wider competence surveys can guide the
individual, group and organisational level competence development and
the content of development programmes.
Metsä Board encourages its employees to actively develop their com-
petence and participate in different types of training. Everyone is provided
with a personal development plan to support their development at both the
personal and team levels. In 2023, to promote continuous development,
Metsä Group launched academies for procurement, leadership, sustain-
ability and sales alongside the previously launched Finance Academy.
Mentoring programmes support the employees’ professional growth and
enable the use of tacit knowledge.
The implementation of competence development is monitored at two
levels. Metsä Board monitors the number of personal development plans
and employee survey results related to the opportunities to use one’s own
competence. In addition, feedback is collected for each academy.
Metsä Board’s employees have a bonus system, and the personal
performance bonus goals of each employee covered by the system include
a sustainability target. Personal goals and development items are set,
and progress is monitored in performance and development appraisals
(PDAs), which all employees conduct with their supervisor twice a year.
The bonus system does not cover trainees, thesis workers, employees
who have worked less than four months during the bonus scheme year or
individuals who are not in an employment relationship at the time of the
bonus payment.
53
Working conditions
All Metsä Board’s employees are included in the same HR management
system, which reduces the risk of employment conditions or wages
in breach of the law or agreements. Depending on the nature of work,
employees have access to flexible working hours and a hybrid model, which
enables them to work remotely part of the week. The company supports
the employees’ wellbeing at different stages of life and enables a long
career by offering various solutions such as job rotation.
Health and safety
In Metsä Board, safety management is based on the prevention of hazards
and risks. Risks are assessed regularly, and the company’s own workforce
completes a safety induction in the potential risks of the work environment.
Accidents are prevented with common safety-at-work standards,
proactive measures – such as risk assessments, safety observations,
safety walks and safety training – and investments improving safety. The
most typical accidents consist of injuries to hands and feet. Safety-at-work
standards have been drawn up for the duties identified as the riskiest. The
permit to work standard covers the most important of these: lockout/
tagout, working at heights, lifting work, work in confined spaces, excava-
tions and hot work.
The zero accidents target is supported by long-term focal areas for
safety – the deployment of common safety-at-work standards, personal
risk assessments and the development of hand safety. The measures
determined based on the focal areas guide the development of safety work,
define the key targets and make safety work more predictable. In 2023, the
main focal area of safety work was improving personal commitment. This
was carried out through individual targets for proactive safety work and by
planning and launching the concept of safety coaching.
Despite all the preventive actions, a fatal accident took place at Metsä
Board’s Simpele mill in 2023. One of the company’s employees died during
maintenance work when they got caught between a travelling crane and a
solid structure. The accident was thoroughly investigated in cooperation
with the authorities and service suppliers. In addition to the investigation
report, an internal audit summary was compiled so the company could
learn from the incident, and so that future accidents could be avoided.
In health checks, occupational healthcare evaluates employees’ health
in view of the demands of their duties and the exposures related to their
work. The healthcare services of leased labour are handled by their own
employer. The most common occupational illnesses are allergic skin or
respiratory reactions caused by dust or chemicals. Workplace conditions
are made as health secure as possible, for example, in terms of tidiness and
adequate ventilation. Also the appropriateness and adequacy of personal
protective equipment is ensured.
To support work performance, operating models have been defined for
rehabilitative activities and early support. A substance abuse programme
is also in place. Supervisors are offered guidelines and training for manag-
ing wellbeing at work.
In 2023, work to promote wellbeing at work continued. Supervisors and
HR were trained in the implementation of early support as part of day-to-
day management. The material supporting the promotion of workplace
wellbeing was updated. The early support measures carried out are mon-
itored in relation to the defined and required measures. Special attention
was paid to the employees’ musculoskeletal condition and support for
mental wellbeing. Webinars and info sessions on the topics were organised
for the employees, and supervisors were offered Mind and Work training.
The individual working time model for shift work prepared by Metsä
Group in 2023 supports the employees’ work ability at Metsä Board’s
production units in Finland by improving employees’ opportunities to influ-
ence their working hours. A year-long trial period will begin at all Finnish
production units in 2024.
Other work-related rights
The realisation of human rights is considered as part of the development
of HR processes. Investments in occupational safety, DEI work, and
e-learning courses dealing with these topics were key practical measures
affecting the realisation of human rights in 2023. The Compliance and
Ethics Channel and the ethics barometer are important tools for identifying
human rights impacts.
Regarding the employees’ data protection, procedures for processing
employees’ personal data have been defined, and all employees are
required to comply with the Data Protection policy in place. The Data
Protection policy defines the principles and rules that must be followed
when processing personal data. Personal data related to the employees’
health are processed only by designated individuals, in accordance with
data protection legislation and in situations required by law. Employees’
health-related data are stored separately from the employees’ general
personal data. Metsä Board uses advanced technical and organisational
means for implementing data protection and information security, and the
same is required of companies providing occupational healthcare services
as part of the agreements.
In 2023, Metsä Board was made aware of incidents that may have
had a direct or indirect negative impact on the company’s human rights
obligations. The incidents are discussed thoroughly under G1 – Business
conduct. In addition, concerning the employees’ occupational safety, these
incidents are discussed in more detail in the Health and safety subsection
of this chapter, as well as concerning the occupational safety and other
work-related rights of suppliers’ employees under S2 – Workers in the value
chain.
Key employee figures
2023 2022
Number of employees 2,343 2,347
Women 516 514
Men 1,827 1,833
Aged under 30 269 269
Aged 30–50 1,088 1,113
Aged over 50 986 965
Permanent employees 2,177 2,154
Women 465 454
Men 1,712 1,700
Temporary employees 165 193
Women 51 60
Men 114 133
Non-guaranteed hours employees 1 0
Women 0 0
Men 1 0
Full-time employees 2,262 2,267
Women 488 480
Men 1,774 1,787
Part-time employees 81 80
Women 28 34
Men 53 46
Total number of non-employees in
company’s own workforce
12 -
Share of men and women in management 22 / 6 21 / 7
Share of men and women in management, % 79 / 21 75 / 25
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Employees by country
Finland Sweden Poland USA Germany
Other
countries
Number of employees 1,280 780 110 74 27 72
Number of permanent employees 1,186 714 105 74 27 71
Number of temporary employees 94 65 5 0 0 1
Number of non-guaranteed hours employees 0 1 0 0 0 0
Number of full-time employees 1,244 743 109 73 23 70
Number of part-time employees 36 37 1 1 4 2
Collective bargaining coverage and social dialogue
Collective bargaining coverage Social dialogue
Coverage rate Employees – EEA Employees – non-EEA Workplace representation (EEA only)
0–19% Poland USA
20–39%
40–59%
60–79% Finland
80–100% Sweden Finland, Sweden
Countries with more than 50 employees.
Employee turnover and recruitment
2023 2022
Employee turnover rate, % 5.5 7. 9
Women 6.6 11
Men 5.2 6.9
Aged under 30 5.5 14
Aged 30–50 5.2 5.8
Aged over 50 5.9 9.1
Number of new hires, total 130 120
Women 55 49
Men 75 71
Aged under 30 40 33
Aged 30–50 75 73
Aged over 50 15 14
Total remuneration ratio of women to men
Finland Sweden Poland
Blue-collars 0.95 1.00 -
White-collars 0.98 0.93 0.98
Training and skills development
2023 2022
Employees who participated in regular performance
and career development reviews, %
92 88
Women 89 81
Men 93 90
Blue collars 92 90
White collars 92 84
Management 95 92
The average number of training hours per employee 18 15
Women 15 13
Men 18 16
Blue collars 17 15
White collars 19 15
Management 24 17
Social protection
Countries with no social security
for the listed life events
Sickness
Unemployment starting from when
the company’s own worker is working
for the undertaking
India, Singapore
Injury incurred at work or
work disability
India, Singapore
Maternity leave
Retirement India
55
Health and safety
2023 2022
OWN EMPLOYEES
Occupational accidents 23 26
TRIF 6.1 6.7
Lost time occupational accidents 15 21
Lost time accident frequency, LTA1F 4.0 5.4
Fatal occupational accidents 1 0
Occupational diseases 0 0
Fatal occupational diseases 0 0
SERVICE PROVIDERS
Occupational accidents 4 10
Fatal occupational accidents 0 0
Family-related leave
2023
Employees entitled to take family-related leave 2,343
Employees entitled to take family-related leave, % 100
Number of women on family-related leave 44
Women on family-related leave, % 8.5
Number of men on family-related leave 159
Men on family-related leave, % 8.7
Figure for comparison unavailable.
Total remuneration
2023
The annual total remuneration ratio of the highest paid individual to
the median annual total remuneration for all employees (excluding the
highest-paid individual)
37. 8
Figure for comparison unavailable.
Reporting principles for metrics
The figures for the company’s own workforce include the entire
Metsä Board Group.
The number of employees used in the calculations is indicated
as the number at the end of the reporting period (31 December
2023), excluding metrics related to the coverage of collective
agreements, social security and family-related leave, the report-
ing date of which is 30 September 2023. Any changes in the last
quarter are not expected to affect the result of these metrics.
The number of employees also includes non-active employees
such as employees on family-related leave. Metsä Board annually
employs around 300 seasonal summer employees, thesis
workers and trainees, some of whom are not employed at the
end of the reporting period, when the number of employees is
determined.
Non-employee workers in the company’s own workforce include
workers who have concluded an agreement on the supply of
labour with Metsä Board, that is, self-employed people and work-
ers provided by companies that primarily engage in employment
activities. No significant changes usually take place in the number
of workers over the year.
Recruitment includes permanent new hires. Employee turnover
includes all leavers, whatever the reason (excluding transfer
of business), divided by the number of employees. The figure
includes permanent and employment relationships.
The share of anonymous recruitment of vacancies open to all
includes the recruitment carried out in the Workday system.
Workday is used in most recruitment. For example, cases in which
the job applicant directly contacts the production unit are not
included in the calculation.
The share of women in management includes women whose
management level is VP/SVP/CEO, and who have a management
IPE level.
The remuneration figures are reported based on the number of
employees with an active employment relationship on 31 Decem-
ber 2023. The total remuneration ratio of women to men has
been calculated as an average of women and men in the same pay
category, weighted by the number of employees. If pay categories
are not in use in the unit, remuneration has been compared within
the same mill. The table indicates the three largest operating
countries. In calculating the ratio of the highest paid individual to
the median annual remuneration for all employees, the median
excludes employees whose employment began during the report-
ing year, or who were absent for more than three months during
the reporting year, as well as the remuneration of the highest-paid
individual. The adequate wage indicator has been calculated by
comparing employees’ total remuneration with market data on
the adequate wage in the area in question.
The number of work-related accidents is indicated separately for
the company’s own employees and service providers’ employees.
The accident frequencies, TRIF and LTA1F, only include the
company’s own employees, because information about service
providers’ actual working hours is unavailable. LTA1F includes
all work-related accidents that have led to at least one day of
absence. Frequencies have been calculated per million hours
worked. The number of fatal work-related accidents includes the
company’s own employees and service providers’ employees.
The employee survey results are based on the employee
survey conducted every two years. The results are compared
with European benchmarks, and the level of job satisfaction is
derived from this. All Metsä Board employees can respond to the
survey. Responses are collected on a scale of 1−4 (fully disagree/
agree), and an external service provider converts the responses
to indexes on a scale of 0−100 (100 = everyone fully agrees).
Compared with the standard, the target of AAA is “very good”.
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S2 – Workers in the value chain
Material impacts, risks and opportunities related to workers in the value chain
Material sub-sub-topic Impacts Risks and opportunities for Metsä Board Management
Working conditions
• Secure employment
• Working time
• Adequate wages
• Social dialogue
• Collective bargaining
• Work-life balance
Metsä Board’s requirements and
control mechanisms such as the model
for combating the grey economy may
have a positive impact on the working
conditions of suppliers’ employees.
Risk: Metsä Board may unknowingly
support operations contrary to its
values. Suppliers’ employees or con-
tract entrepreneurs may experience
weaker work ability, satisfaction
and commitment to cooperation
with Metsä Board. Metsä Board’s
reputation as a sustainable and safe
partner is put at risk.
• The Supplier Code of Conduct contains requirements
for fair employment practices.
• Compliance is ensured with supplier audits and
assessments.
• Metsä Board follows due diligence in the Know Your
Business Partner background check, which reviews
known human rights violations, among other things.
• The model for combating the grey economy is in use
in construction projects.
Inadequate working conditions weaken
the quality of life and wellbeing of
suppliers’ employees and their families,
increase inequality and risk the work-life
balance
• Health and safety Metsä Board’s safety requirements can
positively influence the wellbeing and
work ability of suppliers’ employees and
the wellbeing of the employees’ families.
Opportunity: The suppliers and
their employees work ability, wellbe-
ing and commitment to cooperation
with Metsä Board increases. Metsä
Board’s reputation as a sustainable
and safe partner strengthens.
• The Supplier Code of Conduct contains requirements
for occupational safety management.
• Compliance is secured with targeted supplier audits
and assessments.
• The safety management system covers service
providers working in Metsä Board’s operations.
Occupational safety is continuously developed jointly
with service providers.
• In Wood Supply, forest site preparation days and
safety walks at loading and unloading sites are
conducted regularly.
Deficiencies in Metsä Board’s health
and safety requirements or in the over-
sight of their implementation weaken
the work ability of suppliers’ employees,
as well as their physical and mental
wellbeing, and increase work-related
accidents.
Other work-related rights
• Child labour
• Forced labour
An infringement of work-related rights
in Metsä Board’s supply chain causes
human suffering and inequality and
undermines the quality of life of em-
ployees and their families.
Risk: Metsä Board unknowingly
supports operations contrary to its
values, which risks Metsä Board’s
reputation as a sustainable partner
and operator.
• The Supplier Code of Conduct contains requirements
for respecting human rights.
• Compliance is ensured with supplier audits.
• Metsä Board follows due diligence in the Know Your
Business Partner background check, which reviews
known human rights violations, among other things.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
■ Targets
Metsä Board has set sustainability targets related to value chain workers
and supplier commitment in the Code of Conduct, as well as supplier
assessments and audits. These targets are discussed under G1 – Business
conduct.
■ The identification and assessment
of material impacts, risks and opportunities
The material impacts, risks and opportunities related to workers in the
value chain have been identified in a double materiality assessment
based on the principles of the company’s risk management process. The
materiality assessment is discussed on pages 26–28.
■ Policies
Sustainability related to workers in Metsä Board’s value chain is guided
by Metsä Group’s Supplier Code of Conduct, approved by the company’s
Board of Directors, and the safety management system. 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. The safety management system covers all employees of service
providers working in Metsä Board’s operations.
One of Metsä Board’s strategic programmes focuses on safe and effi-
cient operations and organic growth. The programme’s focal areas include
the continuous improvement of occupational safety. One of the goals is to
reduce the number of work-related accidents.
Working conditions
The Metsä Group Supplier Code of Conduct includes several requirements
related to the working conditions of suppliers’ employees, with which
suppliers must comply:
• Fair employment practices
• A living wage as required by laws and regulations
• Freedom of association and collective bargaining
• Respect for privacy
• Anti-harassment
• Equal opportunities and non-discrimination
The implementation of the Supplier Code of Conduct is the responsibility of
Metsä Group’s procurement organisation, which also handles centrally the
procurement of Metsä Board’s raw materials and services. The head of the
procurement unit reports to Metsä Group’s President and CEO.
57
Health and safety
Metsä Board’s occupational safety is guided by the safety management
system, comprising the corporate security policy and the safety principles,
standards, processes and work instructions. The requirements of
the safety management system are the same for the company’s own
workforce and service providers working in Metsä Board’s operations. The
implementation of safety policies is the responsibility of Metsä Board’s
CEO in accordance with the requirements specified by Metsä Group’s
senior management. The responsibilities related to safety policies are
described under S1 – Own workforce.
The Safety Management Standard for Metsä Group Service Providers
sets requirements for the work management and supervision, employee
competence, safety reporting and permits to work of service providers
working in Metsä Board’s operations.
The General safety induction e-learning course dealing with hazards and
risks in the work environment is mandatory for service providers working
at Metsä Board’s production units and construction sites.
The Supplier Code of Conduct require suppliers to provide a safe and
healthy working environment to prevent accidents, injuries and illnesses
and to ensure that employees are aware of and adequately trained in
these issues. Suppliers must have an occupational health and safety
management system according to ISO 45001 or an equivalent system, as
applicable.
Other work-related rights
The Supplier Code of Conduct includes many binding requirements
concerning other work-related rights of suppliers’ workers:
• Respecting 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.
• Acting in compliance with the UN Guiding Principles on Business and
Human Rights.
• Taking action to remedy any adverse human rights impacts. Special
attention must be paid to any adverse impacts on groups or individuals
that may be at higher risk of vulnerability, such as migrant workers.
• Prohibiting any form of forced and child labour.
Further information about Metsä Group’s Supplier Code of Conduct is
available on Metsä Board’s website.
■ Engaging with value chain workers
about impacts
The need for interaction with suppliers’ employees or their representatives
is highlighted when suppliers’ employees work in operations comparable
to Metsä Board’s own operations, for example, at mills or on construction
sites. In other respects, the views of suppliers’ employees are conveyed
indirectly through supplier management activities such as cooperation
meetings and surveys and audits. Supplier management practices are
discussed under G1 – Business conduct.
Safety is continuously developed and monitored with service providers
working at mills and in construction projects. A more detailed description
is available under Processes to remediate negative impacts and channels for
value chain employees to raise concerns.
Service providers’ safety performance is monitored in large investments
such as construction projects. Regular on-site safety talks are organised
for the project personnel, and observed safety deviations are actively
addressed. A contact person from the applicable trade union and a health
and safety representative are assigned to projects.
■ Processes to remediate negative
impacts and channels for value
chain workers to raise concerns
Compliance and ethics channel
Value chain workers can report any ethical concerns or non-compliance
with legislation they detect in connection with their cooperation with Metsä
Board through Metsä Group’s Compliance and Ethics Channel or to their
contact person at Metsä Board. The notification procedures are discussed
in the general safety induction for service providers’ employees working
in the company’s operations. The Compliance and Ethics Channel and
the opportunity available to suppliers’ employees to report concerns are
mentioned in the Supplier Code of Conduct. Information is also supplied at
production units through info screens and posters.
In the Supplier Code of Conduct, the supplier commits to rectifying
any non-compliance with the code. Suppliers must also ensure that their
employees and stakeholders can raise concerns or grievances, and that
there are appropriate practices for handling such cases.
The Compliance and Ethics Channel, raising concerns and the pro-
cessing of notifications are discussed in more detail under G1 – Business
conduct.
Working conditions
Methods adopted to prevent and mitigate any negative impacts on
suppliers’ employees include supplier background checks, audits and
assessments. A model for combating the grey economy, as well as on-site
spot checks, is in use in construction projects. A more detailed description
is provided under Actions in this section and under G1 – Business conduct.
Any non-compliance related to working conditions, health and safety or
other human rights is handled in accordance with Metsä Board’s escalation
process. The idea is to first offer suppliers the chance to rectify their way of
working. If the supplier is unwilling or unable to rectify their way of working,
they are removed from Metsä Board’s operations. The most serious cases
are presented for processing to Metsä Board’s Corporate Management
Team. In 2023, a total of ten companies had to be removed from the associ-
ated company Metsä Fibre’s Kemi bioproduct mill construction project site
because they did not comply with the project’s sustainability requirements,
even after being reprimanded. Further information is provided under
G1 – Business conduct.
Health and safety
Safety is continuously developed and monitored with service providers
working at mills and in construction projects. Service providers are
required to engage in systematic and proactive safety work in the form of
safety observations, walks and talks. Service providers’ employees record
their safety observations in the HSEQ system. Safety observations are
discussed at daily meetings. Metsä Board does not tolerate retaliation
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against whistle-blowers. If required, whistle-blowers can also submit a
report anonymously through the Compliance and Ethics Channel.
Accidents and hazardous situations are investigated thoroughly in coop-
eration with service providers. In the case of serious accidents, the author-
ities are also involved. The investigation creates conditions for avoiding
similar situations and identifying any shortcomings in safety management.
When the investigation report is completed, a summary of the investigation
is also distributed to all other Metsä Group business areas.
If shortcomings are observed in the service providers’ safety, the same
approach is followed as in other incidents of non-compliance related to
working conditions, that is, the provider is first offered the opportunity to
rectify their way of working. If the service provider is unwilling or unable
to rectify their way of working, they are removed from the operations. In
2023, in connection with the expansion of the Husum paperboard mill’s
folding boxboard capacity, eight service providers were removed from
the site due to shortcomings in safety. No accidents were caused by the
shortcomings.
Other work-related rights
The practices of supplier management and the process for handling
observed grievances are discussed in the Working conditions subsection of
this chapter.
■ Actions
Working conditions
A background check is always conducted for suppliers. Any known
human rights violations and negative publicity related to human rights
are reviewed as part of the background check. Supplier evaluations and
audits are conducted to ensure that each supplier has adequate means
to recognise and minimise impacts on the working conditions and other
work-related rights of their employees. Among other things, evaluations
seek to ensure that the companies have adequate proactive measures for
ensuring occupational safety, as well as a written Code of Conduct and an
anonymous reporting channel for employees. Audits include observations
of working conditions and interviews with employees if required.
In construction projects, the sustainability of the subcontracting chain is
ensured proactively by checking the companies’ backgrounds during the
tendering stage, employing the model for combating the grey economy
and conducting regular spot checks. The model for combating the grey
economy ensures that companies in the subcontracting chain comply with
laws and collective agreements and handle taxes and obligations appropri-
ately. The goal of regular spot checks is to observe any deviations.
Supplier management practices are discussed in more detail under
G1 – Business conduct.
Health and safety
Before beginning to work on Metsä Board’s site, suppliers receive a general
and work-specific safety induction and permits to work. Service providers
must assess the risks in their own work, prepare for them with a safety plan
and submit their plan to the mill in question. Service providers participate
in Metsä Board’s safety walks and risk assessments. Work-related
accidents that occur in the company’s operations are registered in the
HSEQ system. Accidents and reported safety observations are monitored
continuously. In construction projects, the safety performance of different
service providers is monitored, and any safety deviations observed are
actively addressed.
Since 2023, regular safety walks have been jointly organised at the load-
ing and unloading sites of Metsä Board’s production units and terminals
with contract entrepreneurs.
Metsä Fibre, Metsä Board’s associated company, organises regular
cooperation forums with key service providers to discuss the conditions
and joint development needs of safety cooperation. Metsä Group’s key
safety development measure in the next few years is to expand coopera-
tion forums to Metsä Board.
Other work-related rights
Supplier management practices, including audits to ensure the realisation
of social responsibility, are discussed in the Working conditions subsection
of this chapter. The auditors have been trained to detect risks related to
forced labour and labour exploitation, for example.
59
S3 – Aected communities
Material impacts, risks and opportunities related to aected communities
Material sub-sub-topic Impacts Risks and opportunities for Metsä Board Management
Communities’ economic, social and cultural rights
• Land-related impacts
• Adequate housing
Metsä Group can contribute to social
equality and consensus among different
communities through systematic
stakeholder engagement. The needs of
local communities and other affected
communities are taken into account in
decision-making and the development
of operations.
Opportunity: Metsä Board considers the
views, needs and rights of various stake-
holders such as the affected communities
when making decisions and developing op-
erations, which improves the management
of sustainability impacts. The acceptability
of Metsä Board’s operations and the com-
pany’s reputation as a sustainable operator
improve.
• The model for stakeholder engagement was
developed in 2023 by defining process-
es for the management of stakeholder
engagement, which will be implemented
in 2024.
• Metsä Board actively provides information
about its operations and organises local
public events on major events such as
investments.
• Stakeholders are engaged in the materiality
assessment concerning sustainability.
• In the localities of production units, local
residents are offered greater opportunities
for participation, and initiatives are made to
improve the local quality of life.
The inadequate management of
stakeholder engagement could lead
to the views and rights of affected
communities not being considered
in decision-making and operational
development.
Risk: If the views, needs and rights of vari-
ous stakeholders such as affected commu-
nities are not taken into account adequately,
Metsä Board’s understanding of the impacts
of its operations and value chain remains
incomplete. This means Metsä Board is
unable to take stakeholders into account in
its decision-making, which weakens the ac-
ceptability of the company’s operations and
its reputation as a sustainable operator.
Rights of indigenous peoples
• Free, prior and informed
consent
• Self-determination
Stakeholder engagement ensures that
the needs of indigenous peoples and
the conditions for their livelihoods can
be taken into account in decision-mak-
ing and operational development.
Opportunity: As part of Metsä Group, Metsä
Board considers the needs of indigenous
peoples, especially the conditions for their
livelihoods, in its decision-making and op-
erational development, improving the man-
agement of sustainability impacts. Metsä
Board’s acceptability and its reputation as a
sustainable operator improve.
• In the home region of the Sámi, Metsä
Group engages in local dialogue about the
coordination of reindeer husbandry and for-
estry with key stakeholders such as forest
owners and reindeer owners’ associations.
Communication with the Sámi is typically
related to practical questions.
A lack of engagement would lead to the
needs of indigenous peoples and the
conditions for their livelihoods not being
adequately considered in decision-mak-
ing and operations.
Risk: If adequate attention is not paid to the
needs of indigenous peoples and especially
the conditions for their livelihoods, Metsä
Board’s understanding of the impacts of
its operations and its value chain weakens.
This means Metsä Board is unable to take
indigenous peoples into account in its deci-
sion-making, which weakens the accepta-
bility of the company’s operations and its
reputation as a sustainable operator.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
■ Targets
Metsä Board’s strategic 2030 sustainability targets and the process for
their setting and monitoring are described under Sustainability governance
and strategy. The sustainability targets related to the environment and
the supply chain’s sustainability especially seek to directly or indirectly
reduce Metsä Board’s negative impacts or promote its positive impacts on
affected communities.
■ The identification and assessment
of material impacts, risks and opportunities
The material impacts, risks and opportunities related to affected commu-
nities have been identified in a double materiality assessment based on
the principles of the company’s risk management process. The materiality
assessment is discussed on pages 26–28.
The main communities affected by Metsä Board include forest owners,
local communities in mill localities, the nature around the mills and the
people who earn their livelihood from it, as well as other interested parties
such as indigenous peoples and NGOs.
■ Policies
Sustainability concerning affected communities is guided by the Code of
Conduct and the Supplier Code of Conduct, which include commitments
to human rights. Metsä Board respects internationally recognised human
rights in all its operations. The commitments are discussed in more detail
under S1 – Own workforce and S2 – Workers in the value chain. In addition
to the company’s own workforce and workers in the value chain, the
commitments concern all affected communities.
In 2023, management processes and practices for stakeholder engage-
ment were defined. The company will follow them from the beginning of
2024.
Special attention is paid to affected communities in stakeholder
activities and in the management processes introduced in 2024, the goal
of which is to ensure good and confidential relationships, a low contact
threshold, and regular meetings between Metsä Board and its stake-
holders. Metsä Board also strives to develop its operations by regularly
surveying opportunities for cooperation.
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■ Engaging with aected
communities about impacts
For example, Metsä Board communicates openly on the impact of its
operations and products with the help of life-cycle assessments and aims
for active dialogue with stakeholders. The goal of stakeholder engagement
is to ensure that stakeholders are met and heard, and that the company
receives feedback on its operations. Stakeholder feedback is analysed indi-
vidually for various stakeholders, and it is taken into account in develop-
ment and reported to Metsä Board’s management and administration. The
scope and frequency of engagement differs depending on the stakeholder.
The management processes for stakeholder engagement, which will
be implemented in 2024, aim to diversify the methods of engagement
and harmonise the scope and frequency of engagement with various
stakeholders to ensure the opinions of all stakeholders are equally taken
into account. The intention is to meet each stakeholder in person at least
once a year. Other engagement mechanisms include cooperation days with
NGOs and researchers, visits, and cooperation projects.
Of indigenous peoples, the Sámi are affected by Metsä Board’s
operations, especially in the context of wood supply. In wood supply, the
main local stakeholders are taken into account, and compliance with
certification requirements is ensured. Forest certification schemes also
set out strict criteria for social sustainability, such as requirements for
safeguarding the rights of indigenous peoples. In the home region of the
Sámi, Metsä Group engages in dialogue about the coordination of reindeer
husbandry and forestry with stakeholders, including forest owners and
reindeer owners’ associations
■ Processes to remediate negative
impacts and channels for aected
communities to raise concerns
Metsä Board engages in continuous dialogue with its stakeholders. The
implementation of large projects such as new production units or lines
always includes an environmental impact assessment, carried out in
advance, which also involves hearing local communities and other stake-
holders. In other matters, the affected communities can raise concerns by
directly contacting local operations through the production units’ contact
persons, Metsä Board’s Communications or Metsä Group’s Corporate
Affairs, for example. To remediate any negative impacts, the company acts
without delay and in cooperation with the local and regional authorities if
required.
Open Doors events organised at Metsä Board’s production units are an
established way of informing local residents and other interested parties
about the operations. Metsä Board strives to comprehensively inform
the public about events open to them, for example, through newspaper
announcements and social media. Providing feedback and asking ques-
tions through the company’s website is also possible.
The affected communities can also report any ethical concerns or
non-compliance with legislation through Metsä Group’s Compliance and
Ethics Channel. In the Supplier Code of Conduct, the supplier commits to
rectifying any non-compliance with the code. The Compliance and Ethics
Channel is described under G1 – Business conduct.
■ Actions
The materiality assessment is further specified based on the feedback
obtained from engagement with affected communities. The company
seeks to harness identified opportunities by exploring potential business
development and cooperation initiatives with interested stakeholders.
Actions for managing negative impacts and promoting positive impacts
at mill localities include systematically reducing environmental impacts,
engaging with local communities and increasing cooperation, as well as
adopting initiatives that improve the quality of life locally, such as improving
employment and providing opportunities for recreation.
Biodiversity plans will be drawn up for Metsä Board’s production units
as part of Metsä Group’s action plan launched in 2023. The biodiversity
plans will be prepared in cooperation with an NGO that specialises in
the biodiversity of the built environment. The goal is to raise the level of
the biodiversity protection of the built environment to a new level in mill
environments and develop cooperation with local communities.
The regenerative forestry strategy is a solution that Metsä Group has
been systematically developing to seriously address stakeholders’, such as
NGOs, concerns about biodiversity loss and climate change. In addition to
regenerative forestry, Metsä Group is promoting other actions such as the
voluntary METSO forest conservation programme and its implementation.
To its forest-owner members, Metsä Group offers regenerative forestry
service solutions such as the Metsä Group Plus service.
Regenerative forestry and biodiversity work are described in more detail
under E4 – Biodiversity and ecosystems.
Cooperation with scientific communities will be strengthened, for
example, through cooperation days organised for stakeholders to discuss
topics such as the progress made in cooperation involving Metsä Group
and scientific communities, as well as to offer Metsä Board’s stakeholders
the opportunity to influence the company’s work more widely.
61
S4 – Consumers and end-users
Material impacts, risks and opportunities related to consumers and end-users
Material sub-sub-topic Impacts Risks and opportunities for Metsä Board Management
Personal safety of consumers and end-users
Health and safety If Metsä Board’s products were to ex-
hibit defects related to product safety,
there would be negative impacts on the
health and safety of consumers and
end-users.
Risk: Metsä Board suffers reputational
damage among current and potential new
customers, consumers and end-users,
and may incur liabilities for compensation
and other costs related to the limitation of
damage.
• Metsä Board uses regular product safety
surveys, inspections, risk assessments
and monitoring.
• Metsä Board has appropriate certified
management systems.
Information-related impacts on consumers and end-users
Access to quality information If Metsä Board’s products were to
include misleading product information,
there could be negative impacts on the
health and safety of consumers and
end-users.
Risk: Metsä Board suffers reputational
damage among current and potential new
customers, consumers and end-users,
and may incur liabilities for compensation
and other costs related to the limitation of
damage.
• Metsä Board has established practices for
ensuring that its product information is up
to date and accurate.
• The compliance of product information
is controlled annually and through continu-
ous change monitoring.
• Product information and product require-
ments are controlled with the product
information management system.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
■ The identification and assessment
of material impacts, risks and opportunities
The material impacts, risks and opportunities related to consumers
and end-users have been identified in a double materiality assessment
based on the principles of the company’s risk management process. The
materiality assessment is discussed on pages 26–28.
■ Policies
Sustainability related to Metsä Board’s consumers and end-users is guided
by policies comprising Metsä Group’s Code of Conduct, Supplier Code
of Conduct, Quality policy and management systems approved by the
company’s Board of directors. The goal of policies is to minimise adverse
environmental impacts, promote human rights and strengthen ethical
operations, and thus demonstrate to consumers and end-users that the
products are sustainably produced. The policies indirectly encompass all
consumer and end-user groups.
Of the topics included in the Code of Conduct and Supplier Code of
Conduct, those important for end-users are, for example, respect for the
environment, human rights and product safety. Respect for the environ-
ment includes the commitment to use wood fibre, whose origin is always
known. The certified PEFC and FSC® Chain of Custody systems cover all
company operations.
The Quality policy determines the targets and policies for ensuring the
quality of Metsä Board’s operations and products. The goal is to ensure
that the quality of the company’s operations, products and services meets
the needs and expectations of customers – and thus consumers and
end-users. Products are also discussed under E1 – Climate change.
One of the focal areas of the Leader in sustainability strategic
programme is to expand the company’s role in the circular economy. The
goals of the Efficient Innovation programme include reducing the weight
of paperboard and developing recyclable products. The focal areas and
targets of strategic programmes are described in more detail under E5 –
Resource use and circular economy.
Health and safety
The Code of Conduct includes the commitment to ensure product safety
across the value chain. In addition to traceable wood fibre, Metsä Board’s
other raw materials come from reliable suppliers, who comply with the
Supplier Code of Conduct and meet the requirements for product safety.
Further information about the safety of raw materials is provided on page
63.
Metsä Board complies with legislation protecting the health of people
and the environment, including the EU regulation on the registration,
evaluation, authorisation and restriction of chemicals (REACH), the CLP
Regulation on the classification, labelling and packaging of chemicals,
legislation on the use of biocides, and product requirements concerning
food safety. As Metsä Board’s paperboards are part of the food supply
chain, the product safety practices in production are as stringent as
those followed in the food industry. Metsä Board assures the safety of its
products in compliance with the applicable legislation in its market areas in
Europe, the Americas and Asia.
The company’s mills follow good manufacturing practice (GMP), which
is a requirement for the production of all food contact materials. All Metsä
Board’s mills have an ISO 22000 certified food safety system, and the
mills producing paperboard for food contact have also been certified in
accordance with the requirements of the FSSC 22000 food safety system.
Subcontractors and suppliers are required to meet equal standards so that
the cleanliness and safety of products for consumers and end-users can be
ensured. The certified management systems of Metsä Board’s production
units are listed in the table on page 71.
Access to quality information
To ensure the quality of product management, harmonised product
management processes are in place, covering product specifications, the
management of basic information and product descriptions, and the man-
agement of product requirements of customers and officials throughout
the product life-cycle.
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■ Engaging with consumers
and end-users about impacts
Most of Metsä Board’s customers are companies. The process for direct
engagement with consumers and end-users has therefore not been
defined. Instead, customers engage with consumers in accordance with
their own processes. Metsä Board’s channel for direct engagement with
consumers and end-users is the contact form available on the company’s
website.
Metsä Board builds its understanding of consumers’ and end-users’
wishes through its active engagement with its customers. The company’s
continuous and needs-based engagement with customers is carried out
by means such as customer feedback forms and customer experience
surveys. Annual customer experience surveys are part of the assessment
of customer needs and the identification of development needs.
The observations from customer engagement are discussed at sales
meetings and meetings of Metsä Board’s management if required, and
they guide decision-making. Observations and the results of sales-volume
monitoring build market insight, enabling products and services, as well as
their development, to be prioritised based on the preferences and needs of
consumers and end-users. Metsä Board’s management is responsible for
taking consumers’ and end-users’ needs and expectations into account in
decision-making.
In 2023, Metsä Board and Aalto University participated in a study to
determine how the packaging design process could be improved in coop-
eration with consumers by creating narratives that were also suitable for
product marketing. The study aimed to involve consumers in the packaging
design process. To improve the design process, consumers were engaged
in the creation of narratives, and their opinions were also requested at
different stages of the design process. The consumers were chosen from
suitable product user groups in remote workshops.
■ Processes to remediate negative impacts
and channels for consumers and end-users
to raise concerns
Metsä Board directs contacts from corporate customers, consumers and
end-users to the appropriate party for handling to ensure they receive a
thorough response. Contacts concerning product feedback are used in
product or product portfolio analyses, and they are taken into account in
product and service development.
Any product complaints are thoroughly investigated internally, and
supported by external parties such as research institutions if required.
The company has a process for managing quality deviations, according to
which root cause analyses must be carried out, and any required corrective
action must be taken in the case of quality deviations. A standardised recall
process is followed in the event of any product safety risks to ensure that all
potentially harmful products are removed from the market and transports.
At the EU level, risks detected in food contact materials and related recalls
are monitored and reported using RASFF (Rapid Alert System for Food and
Feed) alerts. There were no product safety-related RASFF notifications
concerning Metsä Board’s products or any recalls of consumer packaging
made from our paperboard in 2023.
Compliance and Ethics Channel
Consumers and end-users can use Metsä Group’s Compliance and Ethics
Channel to report any ethical concerns or non-compliance with legislation.
The Compliance and Ethics Channel and the process for handling reports
are described in more detail under G1 – Business conduct.
■ Actions
Health and safety
Metsä Board and external parties assess the compliance of products.
Regular product safety questionnaires, audits and monitoring are used
to ensure that risks are managed throughout the production and supply
chain. Metsä Board’s ISO 22000 and FSSC 22000 food safety systems
and their functioning are ensured annually with internal and external
audits.
Production-related product safety risks are managed with methods such
as the HACCP (Hazard Analysis and Critical Control Points), which is used
at all Metsä Board production units. A new hazard analysis is always car-
ried out in connection with material changes to processes or raw materials.
Metsä Board’s products are tested regularly in accredited laboratories
to ensure their quality and safety. The laboratory analyses and detailed
composition compliance analyses form the basis for our Product Safety
Statement, which includes product-specific information about product
safety and compliance.
The implementation of measures is monitored with methods such as
reputation studies, customer feedback, customer surveys, internal audits
and external assessments. Metsä Board’s product safety specialists
continuously monitor developments in legislation and requirements.
Access to quality information
Product management processes include established practices to ensure
the product information is up to date and to correct any mistakes in the
information.
Product information and requirements are managed with Metsä Group’s
Product Information Management system, which was introduced in 2022
and is actively developed to support new product information management
needs. Product information management is used to actively control the
accuracy of product information. Metsä Group has an internal control
process that is also applied in the management of product information and
in accordance with which the compliance of Metsä Board’s products is
audited at least twice a year.
360 Services
Metsä Board 360 Services that are offered to customers, also provide
added value to consumers and end-users. The services are described
under E5 – Resource use and circular economy and in the Report of the
Board of Directors under R&D and innovation. For example, the packaging
design service enables a better consumer experience with fewer environ-
mental impacts. Measures improving recyclability, which promote material
circulation, also create added value to consumers and end-users.
63
G – Sustainability governance
G1 – Business conduct
Impacts, risks and opportunities related to business conduct
Impacts Risks and opportunities for Metsä Board Management
Corporate culture
Metsä Board’s measures to promote an eth-
ical corporate culture offer the employees a
safe work environment and other stakehold-
ers an opportunity for cooperation with an
ethical and reliable operator.
Opportunity: The employees’ and other stake-
holders’ experience of Metsä Board and the
company’s reputation as an ethical and reliable
operator strengthen.
• Employees learn about ethical corporate culture during induction,
and later during employment, through e-learning and classroom
training, as well as through communication. Especially supervi-
sors’ capacity to address grievances is developed through training.
• Ethical corporate culture is measured with the ethics barometer.
• Metsä Board has a Compliance and Ethics Channel open to
everyone.
Inadequate measures to commit employees
to an ethical corporate culture could lead to
non-compliance with the law or unethical
business operations, as well as unequal treat-
ment and harassment.
Risk: Metsä Board incurs financial losses due
to operations in breach of legislation. The com-
pany’s reputation as a sustainable partner and
operator weakens. Unequal treatment and har-
assment reduce the employees’ job satisfaction
and commitment.
Corruption and bribery
Prevention and detection: Metsä Board’s
measures and control mechanisms for
preventing corruption and bribery offer stake-
holders the opportunity to cooperate with an
ethical and reliable operator.
Opportunity: The stakeholders’ experience of
Metsä Board and the company’s reputation as an
ethical and reliable operator strengthen, improv-
ing performance and competitiveness.
• Employees learn about ethical corporate culture during induction,
and later during employment, through e-learning and classroom
training as well as through communication.
• Metsä Board has internal controls, which are continuously
developed.
• Ethical corporate culture is measured with the ethics barometer.
• Everyone can report grievances through the Compliance and
Ethics Channel.
Incidents: Inadequate measures and control
mechanisms for preventing corruption and
bribery could lead to non-compliance with
Metsä Group’s Code of Conduct and legisla-
tion concerning corruption and bribery.
Risk: Corruption and bribery have significant fi-
nancial consequences and weaken the reputation
and employer image.
Management of relationships with suppliers including payment practices
Metsä Board’s requirements and control
mechanisms, as well as its sustainability
cooperation with suppliers, have a positive
impact on the realisation of ethical operations
and sustainability in the supply chain.
Opportunity: Metsä Board’s reputation as a
sustainable partner and operator improves.
Cooperation with suppliers becomes closer and
leads to long partnerships.
• Suppliers are required to commit to the Code of Conduct.
• Metsä Board follows due diligence in its selection of partners
(Know Your Business Partner process).
• Joint sustainability targets and actions are agreed with partner-lev-
el suppliers.
• The company uses supplier assessments, surveys and audits, as
well as risk analyses.
• Procurement personnel are trained in matters concerning ethics
and sustainability.
• Cooperation is close with local contract entrepreneurs in harvest-
ing, transport and forestry work.
• The sustainability and traceability of wood fibre is ensured in
accordance with the Chain of Custody.
• The traceability of other raw materials and packaging materials is
continuously developed.
If Metsä Board’s requirements and control
mechanisms were inadequate, this could lead
to non-compliance with the law or the compa-
ny’s requirements in the supply chain.
Risk: Metsä Board unintentionally supports
operations contrary to its values, which risks the
company’s reputation as a sustainable partner.
Relationships with suppliers weaken, leading to
the loss of the best partnerships.
Inadequate training of the procurement
personnel or insufficient control mechanisms
could cause unequal treatment of suppliers.
Protection of whistle-blowers
Failure to protect the anonymity of whis-
tle-blowers and confidentiality could lead to
retaliation against whistle-blowers. No such
incidents were recorded in 2023.
Risk: Trust in the Compliance and Ethics Channel
wanes, and suspected misconduct is not report-
ed. Activities contrary to Metsä Board’s values
and Code of Conduct may not be detected.
Unlawful activities may incur financial losses. The
employees’ job satisfaction and the employer
image weaken.
• Reports can be submitted anonymously through Metsä Group’s
Compliance and Ethics Channel.
• The reports are handled in confidence under the Compliance
Committee’s lead.
• Metsä Board is committed to protecting the rights and privacy of
people who report breaches in good faith. These commitments
have been confirmed in both the Code of Conduct and the prin-
ciples guiding the reporting and investigation of breaches, which
were updated in 2023 to comply with the new requirements of the
EU Whistleblowers Directive.
Political influence and lobbying activities
Through successful influencing and lobbying,
Metsä Board, as part of Metsä Group, can in-
troduce views into social debate that support
the promotion of the circular bioeconomy
and highlight wood-based products as an
alternative to, for example, plastic-based
products and emphasise their role in climate
change mitigation.
Opportunity: Political operators recognise the
potential of the circular bioeconomy and the role
of forests and wood-based solutions in climate
change mitigation, improving the conditions of
Metsä Board’s operations.
• An ethical corporate culture and the Code of Conduct are put into
practice through training. The Code of Conduct includes Metsä
Group’s policies on matters such as gifts, hospitality, conflicts of
interest, anti-corruption and fair competition.
• Influencing plans and key social messages are determined based
on the Group’s and business areas’ strategies, reviews of the oper-
ating environment and surveys of regulatory risks.
• The progress and success of influencing activities are regularly
reported to group management and the Board of Directors.
If Metsä Group’s key messages related to
influencing and lobbying or the related ethical
practices are not adequately implemented
in the company, this may lead to influencing
or lobbying that is inconsistent or in breach
of the company’s policies. The potential of
the circular bioeconomy and wood-based
products in climate change mitigation would
not be harnessed in society.
Risk: Metsä Board and Metsä Group are unable
to consistently introduce the key messages
identified as being material to political discus-
sion, which may, in the worst case, lead to the
realisation of regulatory risks. Unethical forms of
influencing and lobbying weaken the company’s
reputation as a sustainable operator.
Positive impact on the environment and society or on Metsä Board’s business
Negative impact on the environment and society or on Metsä Board’s business
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Metsä Board’s 2030 sustainability targets
2030 target 2023 2022
Implementation of ethics barometer measures, % 100 100 -
Traceability of raw materials, share of total purchases, % 100 97 97
Share of certified wood fibre, % >90 91 83
Suppliers’ commitment to the Supplier Code of Conduct, share of total purchases ,% 100 99.0 98.7
Supplier assessments and audits of core suppliers, % 100 68 50
MG: Joint sustainability targets with partner suppliers, % 100 100 -
Comparative data have not been provided for all the new targets set in 2023. The previous result of the implementation of ethics barometer measures is from 2021.
MG: The target has been set at the level of Metsä Group.
■ Progress in targets
• Implementation of ethics barometer measures – The ethics
barometer is conducted every two years. The measures based on the
2020 ethics barometer were specified for 2021, during which 100% of
the measures were carried out. In 2023, 100% of the measures defined
in 2022 were achieved in accordance with the target.
• Traceability of raw materials, share of total purchases, % − The
traceability of raw materials remained at a high level in 2023.
• Share of certified wood fibre – In 2023, the target set for 2030 was
achieved.
• Suppliers’ commitment to the Supplier Code of Conduct, share
of total purchases − Supplier commitment to the Supplier Code of
Conduct progressed as planned towards the 2030 target. Among other
things, the supplier approval process was developed in 2023.
• Supplier assessments and audits of core suppliers − Significant
progress was made in this target in 2023, as Metsä Board initiated
cooperation with Ecovadis, which specialises in sustainability
assessments.
• Joint sustainability targets with partner suppliers − A sustainability
target has been agreed with all current partner suppliers, which means
the 2030 target has been achieved. The company works in close
cooperation with its suppliers to reach the joint targets.
■ The role of the administrative, management
and supervisory bodies
The Compliance and Ethics programme is supervised by the Compliance
Committee, composed of the directors in charge of legal affairs, internal
audit, HR, and compliance and ethics. In 2023, the Compliance Committee
convened five times.
Once a year, the director in charge of compliance and ethics presents a
compliance and ethics review to Metsä Board’s Corporate Management
Team and Audit Committee. In addition, the directors in charge of legal
affairs, taxes, and compliance and ethics present a legal affairs, compli-
ance and tax review twice a year to the CEO and CFO.
The Compliance Committee’s role in investigating ethical concerns is
described under Mechanisms for identifying, reporting and investigating
concerns.
■ The identification and assessment of material
impacts, risks and opportunities
The material impacts, risks and opportunities related to governance and
corporate culture have been identified in a double materiality assessment
based on the principles of the company’s risk management process. The
materiality assessment is discussed on pages 26–28.
The Know Your Business Partner process, supplier assessments and
audits, the company’s ethics barometer, and the Compliance and Ethics
Channel are key elements in the identification, analysis and management
of impacts, risks and opportunities related to governance and corporate
culture.
■ Policies
The sustainability of Metsä Board’s business conduct is guided by
applicable legislation as well as the values, Metsä Board’s Code of Conduct
and various policies approved by the company’s Board of Directors. Metsä
Board is committed to operating in accordance with the UN Guiding
Principles on Business and Human Rights and requires the same from its
business partners. Since 2003, Metsä Board has supported the UN Global
Compact and its principles on human rights, employees, the environment
and anti-corruption.
In 2023, all Metsä Group’s 16 policies were updated to comply with
changes in legislation and the company’s operating methods. Three of
the policies are public, and 13 are internal to the company. All the group’s
employees are required to complete e-learning courses in the Code of
Conduct and other key policies such as the Equality policy and Information
Security policy every three years. The e-learning course in the Code of
Conduct covers Metsä Board’s key ethical principles and describes the
best practices related to business sustainability through examples and
exercises.
Depending on the employees’ duties, they are also required to complete
e-learning courses related to other policies such as the antitrust,
procurement, agreement and legal affairs policies. The classroom training
programme in competition law, initiated in 2022, continued in 2023, as
did workshops in diversity, equality and inclusion for local management
(workshops are discussed in more detail under S1 – Own workforce). A sec-
tion developing supervisors’ capability to address ethical grievances and
encourage the reporting of grievances was added to the training offered to
supervisors. Ethical operations and doing the right thing are also part of the
induction of new salaried employees and apprenticeship trainees.
65
The completion of e-learning courses and classroom training is regularly
monitored by the Compliance Committee, which supervises the Compli-
ance and Ethics programme, and the results are reported once a year to
the Audit Committee of the company’s Board of Directors as part of the
Compliance and ethics review. The completion percentage of the Code of
Conduct e-learning course is presented in the table on page 68.
A culture of diversity, equality and inclusion (DEI) and the implementa-
tion and development of an ethical and respectful corporate culture are
one of the focal areas of the Motivated people strategic programme. The
programme’s focal areas and goal are discussed under S1 – Own workforce.
The implementation and development of the culture of doing the right
thing are measured with the ethics barometer, conducted every two years,
which surveys the employees’ experience of ethics in the company’s
operations. According to the most recent barometer, conducted in 2022,
financial misconduct, corruption, conflicts of interest, inappropriate influ-
encing of partners’ decision-making and information security breaches
are not considered to be material risks. The results of the ethics barometer
were discussed on all sites in 2022, and each site determined development
measures for 2023 to correct the problems observed.
To ensure the sustainability of its suppliers, customers and other
partners, Metsä Board follows third-party due diligence in its Know
Your Business Partner process, in which the third party’s background is
checked for any risks related to sanctions, corruption, money laundering,
human rights violations and various other misconduct before a binding
agreement is concluded, as well as during the cooperation relationship by
means of continuous monitoring. In 2023, the process was developed by
introducing a new tool for background checks, harmonising the process,
clarifying responsibilities and roles, and updating the risk model used in
background checks.
Due to Russia’s military aggression against Ukraine, Metsä Board has
ended all business related to Russia and Belarus. Operations have been
guided by compliance with the applicable regulations and overall consider-
ation regarding business ethics.
■ Mechanisms for identifying,
reporting and investigating concerns
The employees and stakeholders are encouraged to report any ethical
concerns and non-compliance with the law related to Metsä Board’s oper-
ations. Observations can be reported to the supervisor, local management,
HR and the Compliance Committee, or through Metsä Group’s Compliance
and Ethics Channel, which is available on the company’s website in ten
languages to all internal and external stakeholders. Reports can be made
anonymously. The channel’s technical implementation is handled by an
external service provider.
Metsä Board uses the ethics barometer to monitor the effectiveness of
the Compliance and Ethics Channel and other reporting methods in raising
and handling concerns. The ethics barometer can also be used to provide
open-ended feedback related to reporting channels.
Every breach or violation, and suspected breach or violation, of which the
company becomes aware is investigated. The investigation is supervised
by the Compliance Committee. The committee is tasked with monitoring
that the consequences of the investigations are applied consistently in
cases of equal gravity, and that the corrective actions are sufficient, as
described in the company’s Code of Conduct and the principles guiding the
reporting and investigation of breaches. Any illegal activities are reported
to the authorities. Neither the person investigated nor their supervisor
participates in the investigation of the breach or suspected breach. If called
for by the significance of the breach under investigation, the Compliance
Committee reports the incident to Metsä Board’s management and Board
of Directors at a regular meeting, or immediately if required.
The cases are divided into the following categories: fraud or other
criminal behaviour; corruption and bribery; competition law; conflicts of
interest; employee matters; discrimination; privacy and information secu-
rity; occupational safety; the environment; breaches of the Supplier Code
of Conduct; and other reports. Crimes against the company and attempts
of such are also taken into account in the number of reports.
In 2023, Metsä Board was made aware of incidents that might have
had a direct or indirect negative impact on the company’s human rights
responsibilities. In addition to less severe work-related accidents causing
personal injuries (table on page 56), a fatal accident took place at the
Simpele paperboard mill. None of the incidents led to court proceedings or
fines, or concerned the use of child or forced labour. The fatal accident is
under official investigation.
In 2023, no confirmed cases of bribery or corruption were brought to the
company’s attention. Apart from the principle of continuous development
followed in the company’s Compliance and Ethics programme, no need for
separate development projects was identified concerning the anti-bribery
and anti-corruption process.
In June 2023, the European Commission announced it had ended its
antitrust investigation into the softwood pulp sector, having concluded that
there were no grounds for continuing the investigation. The investigation
was initiated in 2021 as a result of an antitrust investigation. The investiga-
tion of Metsä Board’s associated company Metsä Fibre was part of a wider
EU-level antitrust investigation targeting the pulp industry.
The changes required by the EU Whistleblowers Directive (EU
2019/1937) have been taken into account in Metsä Board’s operating
countries in terms of the Compliance and Ethics Channel, the investigation
of reported incidents and the protection of whistleblowers over the
2022−2023 period as local legislation in EU Member States has entered
into force. The company is committed to fairly investigating all reports
submitted in good faith and adopting the required actions based on the
investigation and its results if required. The company is also committed to
protecting the rights and privacy of people who report breaches in good
faith. These commitments have been confirmed in the company’s Code
of Conduct and the principles guiding the reporting and investigation
of breaches, which were updated in 2023 to meet the requirements of
the Whistleblowers Directive. In 2023, no cases of retaliation against
whistle-blowers were brought to the company’s attention.
■ Relationships with goods
and service suppliers
Supplier management practices
Metsä Board’s wood supply is ensured by Metsä Group’s Wood Supply and
Forest Services. The procurement of other raw materials and services is
centrally handled by Metsä Group’s Procurement and Logistics unit. These
procurement processes seek to ensure that the company’s partners oper-
ate sustainably to minimise any risks in the supply chain related to matters
such as the environment, health, corruption, the use of child labour and
human rights violations.
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Wood supply
Metsä Board uses wood from the Northern European forests as its main
raw material. Metsä Group has wood supply organisations in Finland,
Sweden, Estonia and Latvia. The company works in close cooperation with
local contract entrepreneurs in harvesting, transport and forestry work. All
the countries from which wood is procured have issued legislation requiring
forests to be renewed after regeneration felling. Wood and purchased pulp
account for 93% of the company’s raw material consumption. Metsä Board
produces the pulp and high-yield pulp it uses or procures the material from
its associated company Metsä Fibre.
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 (PEFC/02−31−92 and FSC-C001580). These practices
are annually assessed by Metsä Group’s internal and third-party audits.
The audits focus on matters related to environmental and social respon-
sibility in the operations of wood suppliers and harvesting contractors,
as well as on the traceability of wood fibre. Metsä Board aims for certified
wood to account for at least 90% of all the wood fibre used by the company
by 2030. The share of certified wood fibre in 2023 is presented in the table
on page 65. Non-certified wood is also required to be of a sustainable
origin, and the wood always meets at least the requirements for PEFC
Controlled Sources and FSC Controlled Wood. For example, Metsä Board’s
policies concerning indigenous peoples are discussed under S3 – Affected
communities.
Procurement of other raw materials and services
As a minimum requirement in procurement agreements, suppliers are
required to commit to the Metsä Group Supplier Code of Conduct or their
own equivalent principles.
To ensure the sustainability of suppliers, Metsä Board follows third-party
due diligence in its Know your Business Partner background check, which
is described under Policies. Metsä Board only selects suppliers that are
committed to the Supplier Code of Conduct and pass the background
checks.
More detailed supplier assessments focus on the core suppliers and on
suppliers operating in industries with identified potential risks related to
human rights, corruption or the environment. Suppliers’ sustainability and
supplier-related risks are assessed with questionnaires, the Ecovadis tool
and supplier audits.
Metsä Group, an external HSEQ cluster and another external party if
required conduct annual supplier audits focusing on ethics, environmental
responsibility, occupational safety and quality. The supplier assessments
and audits are used as the basis for making development proposals and
monitoring any corrective action taken. The results are the responsibility
of a third party or a Metsä Group employee who is not responsible for sup-
pliers. The number of assessments and audits in 2023 is presented in the
table on page 67. No serious incidents were observed in the assessments
and audits.
To ensure the equal treatment of suppliers, the procurement personnel
are trained to disqualify themselves in decisions that may involve conflicts
of interest. A written assurance of this is required in the procurement pro-
cess. Approximately every two years, an anonymous survey is conducted
among suppliers concerning the smoothness and fairness of cooperation
and factors contributing to these matters. The survey results are submit-
ted to the suppliers, and measures to improve procurement practices are
adopted based on them. The procurement personnel have annual financial
performance targets related to matters such as conducting supplier
sustainability assessments and monitoring improvements proposed by
suppliers.
In 2023, the procurement personnel participated in training dealing with
the management of supplier cooperation, and how to take sustainability
matters in meetings with suppliers into account. In 2023, Metsä Group
organised a supplier event and competition dealing with sustainability for
its core suppliers.
The company’s target is to agree joint sustainability targets and
measures to achieve them with all its partner suppliers. The management
of environmental impacts in cooperation with suppliers is discussed in
more detail under E1 – Climate change. Another target is to know the origin,
or at least the country of manufacture, of all the company’s raw materials,
including wood and process, basic, and coating chemicals, by the end of
2030,
In the annual supplier audits, the company ensures that by using raw
materials from its suppliers, the company’s products meet statutory
requirements and Metsä Board’s own strict product safety requirements.
Product safety is discussed in more detail under S4 – Consumers and
end-users.
Procurement from local operators, %
2023 2022
Procurement from countries in which Metsä Board
has production
82 81
Procurement of wood fibre by country, %
2023 2022
Finland 62 60
Sweden 30 32
Baltic countries 8.1 7.0
Others 0.02 1.0
Assessed or audited suppliers and critical observations
2023 2022
Assessed or audited suppliers 201 61
Significant environmental observations 0 0
Significant observations related to social
responsibility
0 0
New supplier background checks, %
2023 2022
Share of suppliers for which a Know Your Business
Partner background check was made
90 23
■ Prevention and detection
of corruption and bribery
The Code of Conduct, which guides ethical operations, prohibits corruption
and bribery. It also includes principles for preventing conflicts of interest,
crucially linked to anti-corruption, and principles linked to gifts and
hospitality. Metsä Group is committed to anti-corruption and anti-bribery
in its own operations and in relation to its partners. A similar prohibition
is included in Metsä Group’s Supplier Code of Conduct. Anti-corruption
and anti-bribery efforts contribute to Metsä Group’s 2030 sustainability
targets concerning a responsible corporate culture and supply chain.
67
The following are the main measures for preventing and detecting
corruption and bribery:
• Training in the Code of Conduct and other policies guiding Metsä
Group’s operations (discussed on pages 65–66, 68).
• The ethics barometer that measures the ethics of operations and seeks
to identify areas in need of development (discussed on page 66).
• The Compliance and Ethics Channel, which is available to all internal and
external stakeholders. A standardised process is defined for handling
reports (discussed on page 66).
• Due diligence in ensuring the sustainability of partners, and the required
background checks (third-party due diligence) as part of the Know Your
Business Partner process (discussed on pages 66–67).
• Continuous development of ethical operations in the supply chain.
The key measures in this respect include supplier commitment to the
Supplier Code of Conduct in line with the 2030 sustainability targets,
as well as supplier audits and assessments (discussed on pages 65–67).
Completion of Code of Conduct and Equality e-learning
courses
2023 2022
CODE OF CONDUCT
Number of employees who completed
the revised Code of Conduct training
2,214 1,423
Share of all employees who have completed
the revised Code of Conduct training, %
98 63
Share of Board members who have completed
the revised Code of Conduct training, %
100 -
EQUALITY
Number of employees who have completed
the previous Equality training
2,215 2,226
Share of all employees who have completed
the previous Equality training, %
98 98
Number of employees who have completed
the revised Equality training
1,995 -
Share of all employees who have completed
the revised Equality training, %
88 -
Incidents of non-compliance with good governance or
ethical corporate culture
2023 2022
ALL REPORTS RELATED TO UNETHICAL BEHAVIOUR
Reports resulting in an investigation 4 6
Critical reports to the Board 1 0
ANTI-COMPETITIVE BEHAVIOUR
Legal actions for anti-competitive behaviour 0 0
CORRUPTION OR BRIBERY
Confirmed incidents of corruption or bribery 0 0
Confirmed incidents in which a business agreement
has been terminated or has not been renewed due
to a case linked to corruption or bribery
0 0
Number of judgments issued in corruption or
bribery cases.
0 0
Amount of fines issued in corruption or bribery
cases.
0 0
The case reported to the Board in 2023 was related to occupational safety.
■ Political influence and lobbying activities
Metsä Board participates in advocacy as part of Metsä Group at the EU
and national level especially in Finland, Sweden and Germany. Metsä
Group’s parent company Metsäliitto Cooperative is registered in the EU’s
Transparency Register and complies with its code of conduct. Its member
number in the Transparency Register is 962687110415-94.
The Board of Directors of Metsäliitto Cooperative ensures that the com-
pany has an appropriate corporate affairs function in view of its business.
Metsä Group’s President and CEO, supported by Metsä Group’s Executive
Management Team, determines the priorities of political influence for
Metsä Board and other business operations and monitors the progress
made in them. Metsä Group’s corporate affairs function coordinates prac-
tical influence work, handling the related cooperation among Metsä Board
and other functions, and reporting the work’s progress and effectiveness
to Metsä Board’s and Metsä Group’s management teams and Boards of
Directors.
To identify the most significant legislative risks and focal areas of lob-
bying, Metsä Group has conducted a comprehensive assessment of reg-
ulatory risks, which covers all the business areas, including Metsä Board.
These risks have been considered in the double materiality assessment.
Metsä Group follows and participates in discussions about forests and
biodiversity and influences policy questions related to the bioeconomy
and products. Metsä Group has actively influenced several legal initiatives
in the EU, including the deforestation regulation, nature restoration
regulation, packaging and packaging waste regulation, and sustainable
product policy.
Metsä Group promotes the circular bioeconomy and emphasises the
role of forests and wood-based products in climate change mitigation, and
the safeguarding of biodiversity. The company supports EU’s environmen-
tal targets and the 2050 climate neutrality target.
Metsä Board’s advocacy efforts as part of Metsä Group focus on:
• Promoting the recyclability of wood fibre-based packaging.
• Increasing the understanding of the role of fresh fibre in product safety
and the advantages of sustainable fibre-based food packaging in terms
of the environment and health.
• Supporting a comprehensive approach to laws that influence forestry
practices and the availability of wood raw material as part of the joint
production of forest-based ecosystem services.
• Energy-related topics in the EU, such as reducing dependence on
fossil-based fuels, focusing greater attention on the opportunities
provided by biogenic carbon dioxide capture, and defining renewable
energy targets based on something other than the direct energy use of
convertible wood biomass.
All Metsä Group’s main advocacy messages are described in Metsä Group’s
Sustainability statement.
Cooperation with trade and industrial organisations
As part of Metsä Group, Metsä Board is an active member of the Confed-
eration of European Paper Industries (Cepi), which represents the forest
industry producing fibre-based products across Europe. Metsä Group’s
President and CEO chaired the Board of Cepi in 2023. Representatives of
Metsä Group also actively participated in the work of Cepi’s committees
and working groups.
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METSÄ BOARD ANNUAL REVIEW 2023
Metsä Board has representatives in the 4evergreen alliance’s steering
group and team of public relations experts. 4evergreen represents the
entire value chain of fibre-based packaging and has set as its target the
raising of the recycling rate of fibre-based packaging to 90 per cent by
2030. Metsä Board also participates in the activities of the European
Paper Packaging Alliance (EPPA). The alliance stands for the sustainability
of wood fibre-based food and food service packaging and the circular
economy. Metsä Board is a member of several national trade and industrial
organisations.
Key memberships in organisations and advocacy groups:
• Confederation of European Paper Industries (Cepi)
• European Association of Carton and Cartonboard manufacturers (Pro
Carton)
• CEPI Cartonboard
• CEPI Containerboard
• European Carton Makers Associations (ECMA)
• The European Paper Packaging Alliance (EPPA)
• 4evergreen
• Finnish Forest Industries Federation, Finland
• Swedish Forest Industries’ Federation, Sweden
• Die Papierindustrie, Germany
In 2023, Metsä Board paid a total of EUR 1.2 million in membership fees to
trade and industrial organisations.
Metsä Board does not make direct political contributions. The company
may participate in seminars that deal with the forest industry or forest
policy.
■ Payment practices
The average time it takes for Metsä Board to pay an invoice from the date
when the contractual or statutory term of payment calculation begins is
49 days. The standard payment term in Metsä Board’s general terms and
conditions for purchases is 60 days net. However, this can be reconsidered
individually in the case of smaller suppliers, for example.
Metsä Board is not party to any legal proceedings due to late payments.
Reporting principles for metrics
The implementation of ethics barometer measures depicts the
share of implemented measures of all the measures determined
based on the ethics barometer in the reporting year.
The supplier commitment to the Supplier Code of Conduct
indicates the share of all purchases made from suppliers
committed to the Metsä Group Supplier Code of Conduct or their
own equivalent codes. The figure does not cover the authorities,
associations or wood supply. Supplier assessments and audits
of core suppliers cover partner, key and preferred suppliers in
accordance with the supplier classification. The target does not
include wood supply operators. The joint sustainability targets
with partner suppliers applies to the nine partner suppliers
agreed in connection with Metsä Group’s supplier classification.
The figure does not include wood supply, but partner suppliers
include other suppliers in wood supply and forest management
services.
The target of traceable raw materials covers the raw materials
used in product production and product packaging materials.
The target’s calculation is based on the value of the raw materials
in euros. A raw material that is traceable at least to the level of
country of manufacture is considered traceable.
The share of certified wood covers the share of certified wood
fibre of all the wood fibre used by Metsä Board. The figure
includes the wood used in Metsä Board’s own production of pulp
and high-yield pulp, as well as the wood used for the pulp pur-
chased from Metsä Fibre. The chip deliveries from the company’s
own industries are not included in the calculation to avoid double
counting.
In the completion rate of the Code of Conduct and DEI e-learning
courses, the divisor is the number of active employees at the time
of reporting. In other words, employees absent on family leave or
for other reasons are not included in the calculation.
The figures for payment practices do not account for raw wood
purchases from forest owners or industrial suppliers. The
payment term has been calculated as a weighted average based
on the supplier invoices paid in the review period. The total value
of the invoice is used in weighting.
69
Annexes to the Sustainability statement
Annexes
The annexes published at the same time as the Sustainability statement include
1) Separate annexes:
• GRI content index
• SASB content index
• Disclosures in accordance with the TCFD recommendations
2) Data on pages 71−73 of the Sustainability statement:
• Mill-specific key figures for sustainability
• Sustainability statement assurance report
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■ Mill-specific key sustainability figures
Mill Joutseno Kaskinen Kemi Kyro Simpele Ta ko Äänekoski Husum Others Total
COUNTRY FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND FINLAND SWEDEN
EMPLOYEES
Number of employees 59 89 148 149 282 187 198 780 451 2,343
TRIF 11 15 0 17 13 6.8 6.6 5.0 6.1
LTA1F 11 15 0 13 11 6.8 3.3 0.8 4.0
PRODUCTION
Pulp and high-yield pulp (1,000 t) 216 225 555 997
Paperboard (1,000 m
3
) 298 120 232 128 174 366 1,319
MANAGEMENT SYSTEM
ISO 9001 x x x x x x x x
ISO 14001 x x x x x x x x
ISO 50001 x x x x x x x x
ISO 45001 x x x x x x x x
ISO 22000 x x x x x x x x
FSSC 22000 x x x x x
CHAIN OF CUSTODY
PEFC x x x x x x x x
FSC x x x x x x x x
EMISSIONS TO AIR, t
Biogenic carbon dioxide (CO
2
), Scope 1 0 94,663 0 100,008 187,068 1,143 0 1,601,206 1,984,088
GHG emissions (CO
2
e), Scope 1 16,288 7,195 6,493 12,496 15,708 46,017 0 97,7 8 5 201,984
Sulphur (SO
2
) 0 14 0 42 59 0.02 0 62 176
Nitrogen oxides (NO
x
) 8.3 107 2.8 66 93 31 0 977 1,285
Particles 6.1 2.8 0 4.3 2.6 0 0 40 55
Reduced sulphur compounds (TRS) 0 0 0 0 0 0 0 52 52
EMISSIONS TO WATER, t
Adsorbable organic halogen (AOX) 0 0 0 0 0 0 0 47 47
Chemical oxygen demand (COD) 308 805 138 97 212 123 555 8,407 10,645
Biological oxygen demand (BOD) 2.9 22 52 8 24 34 205 492 840
Phosphorus, total 0.2 1.2 1.3 0.6 1.2 0.9 0 17 23
Nitrogen, total 2.8 12 19 12 12 0.3 7.0 100 165
Suspended solids, total 24 54 303 31 38 21 90 1,324 1,885
WATER USE, 1,000 m
3
Water withdrawals 5,321 8,414 8,131 3,368 26,556 2,798 3,449 43,905 101,943
Wastewater discharges 417 1,963 7,117 2,113 4,232 1,877 2,527 25,135 45,380
WASTE AND SIDE STREAMS, t
Utilised side streams and waste 8,423 22,474 4,918 15,879 25,841 5,697 32,398 31,231 146,862
Landfill waste 0 11 36 0 1.0 0 0.6 1,164 1,213
Hazardous waste 36 330 5.5 8.4 577 44 25 395 1,421
71
We have been engaged by the Board of Metsä Board Oyj (0635366-7)
(hereafter “Metsä Board” or “Company”) to provide limited assurance on
selected corporate sustainability information (hereafter “Sustainability
Information”) presented in Metsä Board’s Sustainability Statement for
the year ended 31 December 2023. The Sustainability Information being
reviewed is described in the GRI index and in the SASB index in the annexes
of the statement. Reporting requirements under the Taxonomy Regulation
have also been included under our review scope.
■ Board of Directors’ responsibilities
The Board of Directors of Metsä Board is responsible for the preparation
and presentation of the Sustainability Information in accordance with the
following reporting guidelines, principles and criteria,
• Global Reporting Initiative (GRI) Sustainability Reporting Standards,
• Sustainability Accounting Standards Board (SASB) Standards,
• Metsä Board and Metsä Group 2030 sustainability targets,
• Metsä Board selected own indicators, as well as
• reporting requirements under the Taxonomy Regulation (EU 2020/852)
and Commission Delegated Acts (EU 2021/2178 and EU 2023/2486).
The Board is also responsible for determining Metsä Board’s objectives
with regard to sustainability performance and reporting, including the
identification of stakeholders and material issues, and for establishing and
maintaining appropriate performance management and internal control
systems from which the reported performance information is derived.
■ Our responsibilities
Our responsibility is to carry out a limited assurance engagement and to
express a conclusion based on the work performed. We conducted our
assurance engagement on the Sustainability Information in accordance
with International Standard on Assurance Engagements (ISAE) 3000
(Revised), Assurance Engagements other than Audits or Reviews of
Historical Financial Information, and ISAE 3410 Assurance Engagements
on Greenhouse Gas Statements, issued by the International Auditing
and Assurance Standards Board IAASB. That Standard requires that
we plan and perform the engagement to obtain limited assurance about
whether the Sustainability Information is free from material misstatement.
The nature, timing and extent of the assurance procedures selected
depend on professional judgement, including the assessment of material
misstatement due to irregularity or error. We believe that the evidence we
obtain is sufficient and appropriate to provide a basis for our conclusion on
limited assurance.
Independent Practitioners’ Assurance Report
to the Board of Directors of Metsä Board Oyj
We are independent of the Company in accordance with the ethical
requirements applicable in Finland to the engagement we have undertaken
and have fulfilled our other ethical obligations under those requirements.
KPMG Oy Ab applies International Standard on Quality Management
ISQM 1, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
■ Procedures performed
A limited assurance engagement on Sustainability Information consists
of making inquiries, primarily of persons responsible for the preparation
of information presented in the Sustainability Information, and applying
analytical and other evidence gathering procedures, as appropriate. In the
engagement, we have performed the following procedures, among others:
• Interviewed members of Metsä Board senior management and relevant
staff responsible for providing the Sustainability Information;
• Assessed the application of the reporting criteria, i.e., the Company’s
reporting guidelines, the Global Reporting Initiative (GRI) Sustainability
Reporting Standards, Sustainability Accounting Standards Board
(SASB) Standards, reporting principles related to Metsä Board and
Metsä Group 2030 sustainability targets and Metsä Board selected own
sustainability indicators, as well as reporting requirements under the EU
Taxonomy in the presentation of the Sustainability Information;
• Assessed data management processes and working methods used to
gather and consolidate the Sustainability Information;
• Reviewed the presented Sustainability Information and assessed its
quality and reporting boundary definitions;
• Assessed the Sustainability Information’s data accuracy and
completeness through a review of the original documents and systems
on a sample basis and;
• Conducted site visits to review the Sustainability Information on Metsä
Board’s sites.
The procedures performed in a limited assurance engagement vary
in nature and timing from, and are less in extent than for, a reasonable
assurance engagement. Consequently, the level of assurance obtained in
a limited assurance engagement is substantially lower than the assurance
that would have been obtained had a reasonable assurance engagement
been performed.
72
REPORT OF THE BOARD OF DIRECTORS
|
METSÄ BOARD ANNUAL REVIEW 2023
■ Inherent limitations
Inherent limitations exist in all assurance engagements due to the selective
testing of the information being examined. Therefore fraud, error or non-
compliance may occur and not be detected. Additionally, non-financial
data may be subject to more inherent limitations than financial data, given
both its nature and the methods used for determining, calculating and
estimating such data.
■ Conclusion
Our conclusion has been formed on the basis of, and is subject to, the
matters outlined in this report.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our conclusions.
Based on the procedures performed and the evidence obtained, as
described above, nothing has come to our attention that causes us to
believe that the Sustainability Information subject to the limited assurance
engagement is not prepared, in all material respects, in accordance with
the Company’s reporting guidelines, the GRI Sustainability Reporting
Standards, the SASB Standards, reporting principles related to Metsä
Board and Metsä Group 2030 sustainability targets and Metsä Board
selected own indicators, as well as EU Taxonomy reporting requirements.
Helsinki, 8 February 2024
KPMG Oy Ab
Kirsi Jantunen
APA
Partner, Audit and Assurance
73
EUR million Note 1–12/2023 1–12/2022
Sales 2.1, 2.2, 7.3 1,941.9 2,479.6
Change in stocks of finished goods and work in progress -57.0 70.1
Other operating income 2.3, 7.3 79.9 79.6
Materials and services 2.4, 7.3 -1,429.5 -1,824.3
Employee costs 3 -199.5 -217.4
Share of result of associated company 7.2, 7.3 24.2 163.1
Depreciation, amortisation and impairment charges 4.1, 4.2 -93.8 -83.1
Other operating expenses 2.4 -145.4 -136.1
Operating result 120.8 531.5
Share of profit from associated companies and joint ventures 7. 2 0.0 0.0
Net exchange gains/losses 5.2 2.6 -5.0
Other financial income 5.2, 7.3 9.9 3.0
Interest and other financial expenses 5.2, 7.3 -12.4 -4.7
Result before tax 120.9 524.9
Income taxes 6 -19.3 -63.5
Result for the period 101.6 461.3
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 -1.0 -4.7
Financial assets at fair value through other comprehensive income 4.3 -87.8 178.5
Share of profit from other comprehensive income of associated company -3.4 3.0
Income tax relating to items that will not be reclassified 18.5 -33.9
Total -73.6 142.9
Items that may be reclassified to profit or loss 5.1
Cash flow hedges 8.2 -3.1
Translation differences -2.8 -56.3
Share of profit from other comprehensive income of associated company -5.7 28.1
Income tax relating to items that may be reclassified -1.6 0.6
Total -1.9 -30.6
Other comprehensive income, net of tax -75.6 112.2
Total comprehensive income for the period 26.1 573.6
Result for the period attributable to
Shareholders of parent company 94.8 409.9
Non-controlling interest 6.8 51.4
101.6 461.3
Total comprehensive income for the period attributable to
Shareholders of parent company 20.7 535.7
Non-controlling interest 5.4 37.8
26.1 573.6
Adjusted average number of shares, thousands 354,751 355,359
Basic and diluted earnings per share for result for the period attributable to the
shareholders of parent company, EUR
0.27 1.15
Consolidated statement of comprehensive income
74
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Consolidated financial statements
EUR million Note 31 DEC 2023 31 DEC 2022
ASSETS
Non-current assets
Goodwill 4.1 12.2 12.2
Other intangible assets 4.1 16.1 5.9
Property, plant and equipment 4.2 1,230.4 1,107.9
Investments in associated companies and joint ventures 7. 2 549.9 614.2
Other investments 4.3, 5.7 254.4 345.4
Other non-current financial assets 5.3 6.3 6.0
Derivative financial instruments 5.7 1.5 2.9
Deferred tax receivables 6 9.5 9.4
2,080.4 2,103.9
Current assets
Inventories 4.4 394.4 506.7
Trade receivables and other receivables 4.5, 7.3 251.7 354.5
Current income tax receivables 7.1 41.4
Derivative financial instruments 5.7 30.0 40.5
Cash and cash equivalent 5.4 , 7. 3 291.6 356.2
974.7 1,299.3
Total assets 3,055.1 3,403.2
SHAREHOLDERS’ EQUITY AND LIABILITIES
Equity attributable to shareholders of parent company 5.1
Share capital 557.9 557.9
Translation differences -66.0 -64.0
Fair value and other reserves 209.1 283.9
Reserve for invested unrestricted equity 208.9 208.9
Treasury shares -5.5 -7.8
Retained earnings 992.6 1,103.2
1,897.0 2,082.0
Non-controlling interests 155.6 173.2
Total shareholders' equity 2,052.6 2,255.2
Non-current liabilities
Deferred tax liabilities 6. 139.2 149.5
Post employment benefit obligations 3.4 10.1 10.4
Provisions 4.8 1.7 2.0
Borrowings 5.5, 5.6, 5.7 421.0 434.4
Other liabilities 4.6 8.7 3.9
580.7 600.2
Current liabilities
Provisions 4.8 1.4 4.9
Current borrowings 5.5, 5.6, 5.7 17.1 18.6
Trade payables and other liabilities 4.7, 7. 3 377.5 482.7
Current income tax liabilities 15.8 11.6
Derivative financial instruments 5.7 10.2 30.2
421.8 547.9
Total liabilities 1,002.5 1,148.1
Total shareholders' equity and liabilities 3,055.1 3,403.2
Consolidated balance sheet
75
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 2023 557.9 -64.0 283.9 208.9 -7.8 1,103.2 2,082.0 173.2 2,255.2
Result for the period 94.8 94.8 6.8 101.6
Other comprehensive income net of
tax total
5.1 -1.9 -74.8 2.6 -74.1 -1.4 -75.6
Comprehensive income total -1.9 -74.8 97.5 20.7 5.4 26.1
Related party transactions
Dividends 5�1 -205.8 -205.8 -22.9 -228.7
Disposal of treasury shares 5�1 2.3 -2.3
Share based payments 3.3 0.1 0.1 0.1
Shareholders’ equity, 31 Dec 2023 557.9 -66.0 209.1 208.9 -5.5 992.6 1,897.0 155.6 2,052.6
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
Statement of changes in shareholders’ equity
76
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
EUR million Note 1–12/2023 1–12/2022
Cash flow from operating activities
Result for the period 101.6 461.3
Adjustments to the result, total 27.3 -63.0
Interest received 9.7 2.4
Interest paid -11.1 -3.6
Dividends received 82.8 59.1
Other financial items, net 2.6 -6.4
Income tax paid 24.1 -66.5
Change in working capital 105.8 -151.4
Net cash flow from operations 342.8 232.0
Cash flow from investing activities
Acquisition of other shares -13.6
Capital expenditure -218.4 -274.2
Proceeds from disposal of shares in subsidiaries, net of cash 7.2 24.5
Proceeds from disposal of other shares 16.9
Proceeds from sale of tangible and intangible assets 58.9 41.1
Change in non-current receivables, net -0.2 -0.1
Net cash flow from investing -159.7 -205.3
Cash flow from financing activities
Proceeds from non-current interest bearing liabilities 60.9
Payment of non-current interest bearing liabilities -18.9 -81.0
Change in current liabilities 5.5 -0.4 -0.5
Change in non-current non-interest bearing liabilities, net 4.7 2.4
Acquisition of treasury shares 5�1 -7.8
Dividend paid and capital distribution -229.7 -157.1
Net cash flow from financing -244.3 -183.1
Change in cash and cash equivalents -61.2 -156.5
Cash and cash equivalents at beginning of period 356.2 524.2
Translation adjustments -3.5 -11.6
Change in cash and cash equivalents -61.2 -156.5
Cash and cash equivalents at end of period 5.4 291.6 356.2
Notes to consolidated cash flow statement
Adjustments to the result, total
Taxes 19.3 63.5
Depreciation, amortisation and impairment charges 93.8 83.1
Share of result from associated companies and joint ventures -24.2 -163.1
Gains and losses on sale of non-current assets -59.1 -59.5
Finance costs, net -0.1 6.6
Post-employment benefit obligations and provisions -4.7 3.6
Other adjustments 2.2 2.8
Adjustments to the result, total 27.3 -63.0
Change in working capital
Inventories 109.5 -128.8
Trade receivables and other receivables 103.0 -27.6
Trade payables and other liabilities -106.7 5.1
Change in working capital 105.8 -151.4
Consolidated cash flow statement
77
Notes to the consolidated
financial statements
1. Accounting principles
■ Metsä Board Group
Metsä Board Corporation and its subsidiaries comprise a forest industry
group (”Metsä Board” or ”the Group”). Metsä Board’s business operations
consist solely of folding boxboard, fresh fibre linerboard and market pulp
businesses. Metsä Board reports on its financial performance in one
reporting segment.
Metsä Board Corporation is Group’s parent company, which is domiciled
in Helsinki. The registered address of the company is Revontulenpuisto 2,
02100 Espoo Finland. The parent company is listed on Nasdaq Helsinki
Ltd. At the end of 2023 Metsäliitto Cooperative owned 52.0 per cent of the
shares, and the voting rights conferred by these shares were 68.9 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.
The Group consolidated financial statements were authorised for
issue by the Board of Directors on 7 February 2023. According to Finnish
Companies Act shareholders can accept or reject the financial statements
in General Meeting of shareholders after date of publication. General
Meeting of shareholders also have possibility to decide to change financial
statements.
■ Accounting principles
Metsä Board Corporation’s consolidated financial statements have been
prepared in accordance with the International Financial Reporting Stand-
ards (IFRS) effective and approved by the EU at the date of the financial
statements 31 December 2023. The notes to the consolidated financial
statements also comply with the requirements of Finnish accounting and
company legislation supplementing the IFRS regulations.
The consolidated financial statements are presented in millions of euros,
unless otherwise noted.
The consolidated financial statements have been prepared based on
original acquisition costs, excluding financial assets recognised at fair
value, hedged items in fair value hedging, assets and obligations related to
defined benefit plans and share-based payments measured at fair value.
■ The impact of Russia’s military aggression
Due to the discontinuation of Russian business operations, the Group rec-
ognised an impairment of EUR 0.3 million for owned and leased property.
The Group also recognised a loss of EUR 0.7 million in other operating
expenses mostly related to accumulated Russian ruble-denominated
translation differences. Further information can be found in the notes:
2.4. Operating expenses, 4.2. Property, plant and equipment, 5.1. Equity,
translation differences, and 5.2. Financial income and expenses.
■ Mitigating climate change and reducing
emissions
Transitioning to fully fossil free energy in production, abandoning
fossil-based raw materials, using energy and water more efficiently, and
safeguarding strong forest growth and carbon storage are at the core of
Metsä Boards’s sustainability targets. The Group aims for fully fossil free
mills and raw materials by the end of 2030. The achievement of ambitious
targets requires investment, operational development and the use of the
best available technology. Climate-related targets have an impact on the
useful lives of property, plant and equipment (Note 4.2) and the prepara-
tion of future cash flow estimates in connection with goodwill impairment
testing (Note 4.1).
■ Amendments to standards applied
during the 2023 financial period
Amendments to IAS 12 Income taxes - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction. The amendments narrow the
initial recognition exemption (IRE) and clarify that the exemption does not
apply to transactions such as leases and decommissioning obligations
which give rise to equal and offsetting temporary differences. The amend-
ments will impact the notes to be presented. Further information can be
found in the note: 6 Income taxes.
Amendments to IAS 12 Income taxes - International Tax Reform — Pillar
Two Model Rules. The amendments give relief from accounting for deferred
taxes arising from the OECD’s (Organisation for Economic Co-operation
and Development) international tax reform and require new disclosures to
compensate for the potential loss of information resulting from the relief.
Further information can be found in the note: 6 Income taxes.
Other standard changes do not have a significant impact on the group’s
financial statements.
■ New and amended standards to be applied
during future financial periods
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures * (effective for financial years beginning on or
after 1 January 2024, early application is permitted). The amendments
enhance the transparency of supplier finance arrangements and their
effects on a company’s liabilities, cash flows and exposure to liquidity risk.
Amendments require to disclose quantitative and qualitative information
about supplier finance programs.
* = Amendment has not been approved to be applied by the EU by
31.12.2023.
Other standard changes do not have a significant impact on the group’s
financial statements.
78
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
■ Translations in foreign currency
The items included in the financial statements of Group companies are
presented in the currency that is used in each company’s primary operat-
ing environment. The consolidated financial statements are presented in
euros, which is the parent company’s functional and presentation currency.
Business transactions denominated in foreign currencies are recognised
in the operating currency using the exchange rate on the transaction date.
At the end of the financial period, open receivables and liabilities denom-
inated in foreign currencies are translated into the functional currency
using the exchange rate on the balance sheet date. Since March 2023, the
rate used for the Russian ruble is the closing rate for EUR/RUB published
by Refinitiv, which management considers to best represent the market
rate for the time. Any gains or losses resulting from transactions in foreign
currencies and from the translation of monetary items are recognised in
financial income and expenses.
Information about currency hedging is provided in Note 5.6 Management
of financial risks.
The income statements of Group companies whose functional currency
is not the euro are translated into euros using the average exchange rates
of the financial period, and their balance sheets are translated using
the exchange rates on the balance sheet date. Changes in translation
differences arising from the translation of Group companies’ income state-
ments and balance sheets and from the translation of net investments in
foreign entities are recognised in the consolidated comprehensive income
statement. In conjunction with divestments of Group companies, either by
selling or by dissolving , translation differences accumulated by the time of
the divestment are recognised in the income statement as part of the gain
or loss from the divestment.
■ Earnings per share
Undiluted earnings per share are calculated using the weighted average
number of shares during the reporting period, where the own shares
held by the group have been deducted. In calculating earnings per share
adjusted for the effect of dilution, the average number of shares is adjusted
for the dilution effect of any equity instruments that have been issued.
In calculating earnings per share, earnings are taken to be the reported
earnings attributable to the parent company’s shareholders.
■ Other accounting principles
Other accounting principles are presented as part of the relevant Notes.
■ Key estimates and judgements
The preparation of financial statements requires the use of the manage-
ment’s estimates, assumptions and judgement-based decisions that affect
the amount of assets and liabilities, the presentation of contingent assets
and liabilities in the financial statements, and the amount of income and
expenses. Even though such estimates and assumptions are based on the
management’s best knowledge at the time they were made, it is possible
that the actual values differ from those used in the financial statements.
In terms of the financial statements, the key areas that involve the man-
agement’s estimates and judgement-based decisions are presented in the
following notes:
Management’s judgement-based decisions
Management’s judgement-based decisions that were made when applying the accounting principles and that have the greatest impact on the figures of
the consolidated financial statements concern the following areas:
Item Note Nature of management’s judgement-based decisions
Financial instruments measured at fair
value
4.4 Other investments Accounting principle and valuation model applied to the shares of Pohjolan Voima Oyj
Estimates and assumptions
The Group’s key uncertainties related to assumptions and estimates that carry a significant risk of the book values of assets and liabilities changing during
the following financial period include the following:
Item Note Nature of estimates and assumptions
Pension obligations 3.4 Pension obligations Actuarial assumptions used as the basis for determining the current value of pension obli-
gations arising from defined benefit plans and the obligation items recognised as expenses
during the financial period
Property, plant and equipment and leases 4.2 Property, plant and equipment Estimates of the useful lives of property, plant and equipment, and of lease extension options
Fair value measurement 4.3 Other investments Estimates of key factors affecting cash flows in the valuation of Pohjolan Voima Oyj
Inventories 4.4 Inventories Estimates of the sales prices of products measured at net realisable value, the costs of comple-
tion and the costs necessary for making the sale
Provisions 4.9 Provisions Estimates of the date and amount of costs from the obligation
Income taxes 6. Income taxes Estimates of the date and amount of tax liabilities arising in tax audits and deferred tax assets
recognised for losses
Legal obligations 8.1 Commitments and contingencies Estimates of the date and amount of costs from obligations related to disputes and legal
proceedings
79
2. Profitability
■ 2.1 Segment information
Accounting principles
The Corporate Management Team is the chief operational decision-maker monitoring business operations performance based on the operating
segments.
Metsä Board’s business operations consist solely of folding boxboard, fresh fibre linerboard and market pulp businesses. Metsä Board reports
on its financial performance in one reporting segment.
Geographical sales are reported based on the location of the customer and assets and capital expenditure based on the location of the assets.
Personnel at year end
By country 2023 2022
Finland 1,234 1,226
Sweden 739 733
Belgium 107 62
Germany 74 66
USA 17 57
Singapore 17 46
Other countries 54 58
Total 2,240 2,248
Personnel average
By country 2023 2022
Finland 1,303 1,340
Sweden 743 744
Belgium 103 21
Germany 70 66
USA 32 63
Singapore 28 49
Other countries 54 70
Total 2,333 2,352
Information on most important customers
There were no customers with revenue exceeding 10 per cent of total
Group revenue in 2023 and 2022.
Geographical areas
External sales
by location of customer
Non-current
assets Capital expenditure
EUR million 2023 2022 2023 2022 2023 2022
Germany 148.9 209.8 2.6 2.5 0.1 0.1
Italy 136.0 174.6 0.3 0.4 0.0 0.0
Sweden 82.3 108.6 780.0 679.0 141.2 196.6
Finland 89.8 99.5 1,278.8 1,405.1 83.9 103.8
Spain 88.8 112.0 0.1 0.1 0.0 0.0
France 89.9 104.4 0.4 0.4 0.2 0.3
Poland 120.1 121.4 1.3 0.6 1.1 0.6
The Netherlands 46.8 30.5
Belgium 18.2 32.1 0.4 0.3 0.2 0.0
Other EU 178.1 192.5
EU total 999.0 1,185.4 2,063.8 2,088.3 226.7 301.4
Turkey 56.2 137. 5 0.0 0.0
United Kingdom 106.1 117.3 4.9 5.3 0.2 2.5
Russia 0.0 41.9 0.0 0.2
Norway 6.9 8.1
Other Europe and Middle East 33.2 41.9
USA 432.8 514.5 1.6 0.6 1.4
Canada 56.4 29.6
Asia 114.2 176.1 0.5 0.3 0.4 0.0
Other countries 137. 3 227.3 0.0 0.0
Total 1,941.9 2,479.6 2,070.8 2,094.6 228.7 304.1
Non-current assets include all non-current assets with the exception of derivative financial instruments and deferred tax assets.
80
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
■ 2.2 Sales
Accounting principles
Metsä Board’s sales are mainly generated from the sale of forest
industry goods, such as the sale of folding boxboard and white
kraftliners to branded product manufacturers, packaging proces-
sors and wholesalers, as well as the sale of pulp to manufacturers
of cardboard, tissue, printing and specialty papers.
Performance obligations arising from the Group’s sales contracts
are mainly order-driven customer deliveries related to the sale of
forest industry goods. Services mostly have an ancillary role in
the Group’s business operations, or they complement deliveries
of goods.
The transaction price is the amount that the Group expects to
receive in exchange for a fulfilled performance obligation. This
amount, less sales-based value added taxes and sales taxes, is
presented as the Group’s sales. The prices received by the Group
are divided into a fixed part and a variable part. The variable part
consists of various discounts based on, among other things,
payment terms and purchased quantities, and is allocated by the
Group as deductions from sales revenue in line with estimates of
the extent of the discount the customer is deemed to be entitled
to. The Group’s sales contracts mostly include obligations solely
related to deliveries of goods, to which the allocation of the trans-
action price is uncomplicated. The terms of payment applied in
the Group’s sales invoicing vary to some degree geographically
and in different business areas, but the term of payment provided
is nonetheless always clearly less than a year, when the financing
component does not need to be separated.
The Group recognises revenue from the sale of goods in the
period during which the control of the delivered products passes
to the customer, i.e. when the risks and benefits related to the
sold products transfer to the customer. Services are recognised
as income over time.
Control to products transfers at the point of time when the
products have been delivered in accordance with the agreed term
of delivery. The Incoterms 2010 delivery terms most commonly
applied by the Group and the corresponding times of sales
income recognition are:
D terms: Delivery of goods to the buyer at the agreed destina-
tion at the agreed time
C terms: Handing over the goods to be transported to the
agreed destination by a carrier arranged for by the
seller
F terms: Handing over the goods to a carrier arranged for by the
buyer
The Group sees geographical distribution of sales as describing
best the nature, amount, timing and uncertainty of sales revenue.
Sales by geographical regions is presented below based on the
location of customers.
Geographical distribution of sales
EUR million 2023 2022
Germany 148.9 209.8
Italy 136.0 174.6
Sweden 82.3 108.6
Turkey 56.2 1 37. 5
Finland 89.8 99.5
United Kingdom 106.1 117.3
Russia 41.9
Spain 88.8 112.0
France 89.9 104.4
Poland 120.1 121.4
Norway 6.9 8.1
The Netherlands 46.8 30.5
Belgium 18.2 32.1
Rest of EMEA 299.5 336.8
EMEA 1,289.4 1,634.5
USA 432.8 514.5
Canada 56.4 29.6
Rest of Americas 26.8 102.3
Americas 516.0 646.4
APAC 136.5 198.7
Total 1,941.9 2,479.6
81
■ 2.3 Other operating income
EUR million 2023 2022
Gains on disposal 59.9 59.2
Rental income 1.3 1.1
Service revenue 5.5 6.1
Government grants and allowances 7. 5 3.3
Scrap and waste sale 0.2 0.2
Other 5.4 9.7
Total 79.9 79.6
Gains on disposal
EUR million 2023 2022
Emission rights 55.0 29.0
Non-business related land area 2.7 6.5
Share ownership 2.8
Oy Hangö Stevedoring Ab 19.2
Other 2.2 1.6
Total 59.9 59.2
The government grants and compensation relate to the compensation for
training, healthcare and research costs, insurance indemnities and energy
aid.
■ 2.4 Operating expenses
EUR million 2023 2022
Materials and services
Raw materials and consumables
Purchases during the financial year 1,074.1 1,465.4
Change in inventories 33.6 -48.0
External services
Logistics cost 243.6 332.7
Other external services 78.1 74.3
Total 1,429.5 1,824.3
Depreciation, amortisation and impairment charges
total
93.8 83.1
Employee costs total 199.5 217.4
Other operating expenses
Rents and other real estate expenses 20.0 17.6
Purchased services 86.8 76.2
Losses on sale of non-current assets 0.8 0.3
Other operating expenses 37. 9 42.0
Total 145.4 136.1
Employee costs are reported in Note 3.1 and information on depreciation,
amortisation and impairment charges in Notes 4.1 and 4.2.
Other operating expenses include e.g. energy costs, real estate costs,
marketing and advertising costs and administrative costs. In 2022, other
operating expenses include expenses of EUR 0.7 million related to the
discontinuation of Russian business operations.
Research and development expenses excluding depreciations were EUR
7.3 (6.1) million.
Auditor fees
The fees of the group’s auditor KPMG
EUR million 2023 2022
Audit 0.5 0.5
Auditors' opinions 0.0
Tax services
Other services 0.0 0.0
Total 0.5 0.5
Other than audit related fees to other auditors than KPMG amounted to
EUR 0.3 (0.1) million. Non-auditing services for KPMG in 2023 were EUR 30
thousand.
82
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METSÄ BOARD ANNUAL REVIEW 2023
3. Remuneration
■ 3.1 Employee costs
EUR million 2023 2022
Wages and salaries 119.6 13 7. 3
Share-based payments 2.2 2.8
Pension costs
Defined benefit plans 0.6 0.5
Defined contribution plans 22.9 22.7
Other social security costs 54.2 54.1
Social security costs total 7 7.7 7 7. 3
Employee costs total 199.5 2 17.4
■ 3.2 The management’s salaries, remuneration and pension expenses
Key management includes members of the Board of Directors as well as Corporate Management Team.
The management’s salaries, remuneration and pension expenses
EUR 2023 2022
Salaries and other remuneration 2,946,400.96 2,824,918.65
Share-based payments (long-term remuneration) 2,838,785.26 2,073,129.01
Pension costs
Defined benefit plans 520,027.42 589,122.26
Defined contribution plans 336,557.35 278,099.65
Total 6,641,770.99 5,765,269.57
Remuneration paid to the members of the Board of Directors of the parent company and their shareholding
Shareholding
shares Renumeration Renumeration
Pensions, Defined
contribution
Pensions, Defined
contribution
EUR 2023 2023 2022 2023 2022
Ilkka Hämälä 294,814 112,592 114,192 18,794 18,359
Jussi Linnaranta 36,211 98,480 100,080 17,907 17,584
Hannu Anttila 152,627 81,136 81,936 1,025 14,400
Raija-Leena Hankonen-Nybom 13,131 91,936 90,836 15,454 14,620
Erja Hyrsky 14,508 80,336 81,936 14,611 14,400
Jukka Moisio 17,283 79,536 81,136 13,280 13,049
Mari Kiviniemi (from 24 March 2022) 8,685 81,136 75,536 13,549 12,143
Kirsi Komi (until 24 March 2022) 4,800 777
Mikko Mäkimattila (from 23 March 2023) 5,052 74,736 13,586
Juha Vanhainen (from 23 March 2023) 9,460 76,336 12,742
Timo Saukkonen (until 23 March 2023) 5,600 81,936 941 13,179
Veli Sundbäck (until 23 March 2023) 5,600 81,936
Total 551,771 787,4 2 3 794,323 121,890 118,510
Metsä Board’s Annual General Meeting 2023 decided, that about one half of the remuneration will be paid in cash while the other half is paid in company’s
B shares.
The remuneration of the Management Team consists of a fixed monthly salary and remuneration based on short-term and long-term remuneration
schemes. The CEO is also covered by a defined benefit pension plan.
83
The monthly salary of CEO Mika Joukio is EUR 43.478. The salary includes
car and phone benefits and extended insurance cover for travel and
accidents. In 2022 and 2023, the reward option for the CEO’s short-term
compensation plan was at the target level of 30 per cent and at the maxi-
mum level of 75 per cent of the fixed annual salary.
In 2022 and 2023, the reward option for the short-term compensation
plan for members of the Management Team was at the target level of 20
or 25 per cent and at the maximum level of 50 or 62.5 per cent of the fixed
annual salary.
The Board of Directors decides on the criteria of the short-term remu-
neration system. Remuneration is based on defined financial criteria and
targets supporting strategy.
Share based incentive schemes and the shareholding programme for
Corporate Management Team are presented in Note 3.3.
The CEO’s mutual term of notice is six months. In case the CEO contract
is terminated by the Board of Directors, the CEO is entitled to receive
discharge compensation equal to his 12-month salary.
The period of notice for other members of Corporate Management
Team is six months. Corporate Management Team members are entitled
Salaries and remuneration paid to the CEO and other members of the Corporate Management Team
CEO CEO
Other
Management Team
Other
Management Team
EUR 2023 2022 2023 2022
Salaries and remuneration
Basic salary including fringe benefits
1)
545,164 535,749 1,391,974 1,327,502
Short-term performance bonus
2)
331,049 327,155 678,214 634,513
Long-term share-based incentive
3)
1,391,888 954,226 1,446,898 1,022,174
Deferred long-term share-based incentive
4)
96,730
Total 2,268,101 1,817,130 3,517,085 3,080,918
Pension Costs
Supplemental defined benefit pension plan 520,027 589,122
Defined contribution plans 92,002 72,225 244,555 205,875
Total 612,030 661,347 244,555 205,875
Salaries and remuneration as well as pension costs in total 2,880,131 2,478,477 3,761,640 3,286,792
1)
Basic salary may include car and telephone benefits, extended health, travel and accident insurance cover, and minor other benefits in kind.
2)
The 2023 payment concerns performance in 2022; the 2022 payment concerns performance in 2021.
3)
2023: earning period 2020–2022; 2022: earning period 2019–2021.
4)
In 2022 delayed long-term rewards were paid in accordance with the terms and conditions and the decision of the Board of Directors
to additional mainly severance compensation of six month salary in
case of employment termination on grounds not related to the affected
Management Team member.
The CEO is covered by statutory employee pension scheme. This offers
pension benefits based on term of service and renumeration earned as
prescribed in applicable legislation. Through supplementary pension
arrangements, the CEO is entitled to retire at the age of 62 years. His
pension will be equal to 60 per cent of his salary at the time of retirement
calculated in accordance with Finnish pension legislation and based on the
calculation period of five years immediately preceding retirement. In case
the CEO’s contract is terminated prior to retirement, the pension earned by
the CEO becomes vested.
The Corporate Management Team members have no pension arrange-
ments differing from statutory pensions. The Group has no off balance
sheet pension liabilities on behalf of management.
Key management had no loans outstanding from the company or
its subsidiares and there were no guarantees given on behalf of key
management.
84
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■ 3.3 Share-based payments
Accounting principles
Share-based incentive programmes in which the payments are
made with equity instruments and cash have been established for
the company’s top executives. The Group’s share-based incentive
schemes have been treated in full as arrangements settled in
shares. The incentives granted are measured at fair value on the
grant date, and recognised as expenses in the income statement
and equity evenly over the vesting period.
The effect on profit of the incentive programmes is presented
under employee costs.
the set goals and paid in March following the incentive period. In addition
to shares, the bonus includes a cash component, which is used to cover
taxes and tax-like charges incurred by plan participants due to the bonus.
The number of shares allocated under the performance based incentive
scheme 2020–2024 and 2023–2027 includes both the share and the cash
portion. Accordingly, the reward is paid partly in shares and partly in cash
and the cash portion is intended to cover taxes and tax-like payments. The
bonus is not paid if the person’s employment ends before the end of the
earning period. In addition, the scheme includes a two-year commitment
period. If the key employee’s employment ends during the commitment
period, the key person must, as a rule, return the delivered shares to the
Company free of charge.
Based on the fulfillment of the criteria for the earning period 2020–2022,
298,785 Metsä Board Oyj B shares and a cash contribution were paid to
cover taxes and tax-like payments arising from the reward at the time of the
transfer of the shares.
Committing-based share incentive scheme 2020–2024 and
Committing-based share incentive scheme 2023–2027
The scheme offers key employees in the target group the opportunity to
receive Metsä Board Corporation’s B-series shares, provided that the par-
ticipant’s employment relationship remains in force and continues in force
until the end of the restriction period. The scheme has restriction periods
of 12 to 36 months. As a rule, rewards are not paid if the participant’s
employment relationship ends during the restriction period. Commit-
ting-based share incentive scheme 2023–2027 has not any allocations.
During the review period, Metsä Board had five active share-based incen-
tive schemes: Performance based share incentive scheme 2017–2021 of
which the company Board of Directors decided to adopt on 10 January
2017 and Performance based share incentive scheme 2020–2024 which
the company Board of Directors decided to adopt on 12 December 2019,
Performance based share incentive scheme 2023–2027 of which the com-
pany Board of Directors decided to adopt on 15 December 2012 ,as part of
company’s incentive and key personnel retention programme.
The effect on consolidated income statement of share-based incentive
schemes amounted to EUR 2,224,395 (2,817,955) in 2023.
Performance based share incentive scheme 2017–2021,
Performance based share incentive scheme 2020–2024 and
Performance based share incentive scheme 2023–2027
The schemes offer the participants the possibility to be awarded Metsä
Board Corporation’s B shares for achieving set goals for three-year
periods. Incentive periods are the calendar years 2017–2019, 2018–2020,
2019–2021, 2020–2022, 2021–2023, 2022–2024, 2023–2025,
2024–2026 and 2025–2027. The bonus awarded under the performance
based share incentive plan 2017–2021 is determined by achievement of
85
Key characteristics of Performance based share incentive scheme 2017–2021 are summarised in the table below:
Performance based
share incentive scheme
2017–2021
31 Dec 2023 2017–2019 2018–2020 2019–2021 Total
Key characteristics
Shares allocated to the scheme, shares 280,694 280,694
Grant date(s) 2.4.2019, 13.6.2019,
12.8.2019, 13.1.2022
Criteria Equity ratio,
ROCE ja EBIT
Personnel (31 December 2023) 23
Factors used to determine fair value (EUR)
1)
Share price at grant date 5.82
Share fair value at grant date 5.20
Annual dividend assumption in fair value measurement 0.31
Share price at payment date / balance sheet date 8.86
Fair value on balance sheet date 1,885,138 1,885,138
Effect on result and financial position (EUR)
Expense in 2023, share-based payments settled as equity 418,968 418,968
Share-based payments settled in cash, unpaid part, estimate
Number of shares 1 January 2023
2)
Outstanding at the beginning of the period 173,573 173,573
Changes during the year
Shares exercised 173,573 173,573
Number of shares 31 December 2023
Outstanding at the end of the period
1)
The fair value of the share settled component at the grant date was the share price of Metsä Board Corporation’s B share less any dividends estimated by analyst consensus to be paid before the
payment of the incentive. The fair value of the share based payment is recognised to the number of shares based on the best available estimate of the total incentive to which the participants are
expected to be entitled.
2)
The amounts in the table represent net amounts, i.e. the number of shares to be given based on the share based payment schemes. In addition, the payment will include a cash settled component
used to cover taxes and tax-like charges.
86
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Key characteristics of Performance based share incentive scheme 2020–2024 are summarised in the table below:
Performance based
share incentive scheme
2020–2024
Committing based
share incentive
plan 2020–2024
31 Dec 2023 2020–2022 2021–2023 2022–2024 2022–2024 Total
Key characteristics
Shares allocated to the scheme, shares 590,788 453,650 437,545 20,838 1,502,821
Grant date(s) 27.1.2020, 18.6.2021 27.1.2021, 18.6.2021 31.1.2022, 8.11.2022 7.10.2022
Criteria Equity ratio,
ROCE ja EBIT
Equity ratio,
ROCE ja EBIT
Equity ratio,
ROCE ja EBIT
Personnel (31 December 2023) 29
Factors used to determine fair value (EUR)
1)
Share price at grant date 5.46 8.93 9.44 7.74
Share fair value at grant date 4.66 8.15 8.21 6.68
Annual dividend assumption in fair value measurement 0.27 0.27 0.41 0.53
Share price at payment date / balance sheet date 8.26 7.1 9 7. 1 9 7. 1 9
Fair value on balance sheet date 2,657,030 3,416,959 2,098,187 139,198 8,311,374
Effect on result and financial position (EUR)
Expense in 2023, share-based payments settled as equity 686,596 797,661 248,185 70,079 1,802,521
Share-based payments settled in cash, unpaid part, estimate 1,576,693 961,874 80,516 2,619,084
Number of shares 1 January 2023
2)
Outstanding at the beginning of the period 564,054 413,980 421,099 20,838 1,419,971
Changes during the year
Shares forfeited 1,574 4,689 6,263
Shares exercised 50,021 50,021
Shares expired 933 933
Number of shares 31 December 2023
Outstanding at the end of the period 513,100 412,406 416,410 20,838 1,362,754
1)
The fair value of the share settled component at the grant date was the share price of Metsä Board Corporation’s B share less any dividends estimated by analyst consensus to be paid before the
payment of the incentive. The fair value of the share based payment is recognised to the number of shares based on the best available estimate of the total incentive to which the participants are
expected to be entitled.
2)
The amounts in the table represent brutto amounts, i.e. the number of shares to be given based on the share based payment schemes. In addition, the payment will include a cash settled compo-
nent used to cover taxes and tax-like charges.
87
Key characteristics of Performance based share incentive scheme 2023–2027 are summarised in the table below:
Performance based
share incentive scheme
2023–2027
31 Dec 2023 2023–2025 2024–2026 2025–2027 Total
Key characteristics
Shares allocated to the scheme, shares 432,163 432,163
Grant date(s) 30.1.2023, 6.9.2023
Criteria Equity ratio,
ROCE ja EBIT
Personnel (31 December 2023) 26
Factors used to determine fair value (EUR)
1)
Share price at grant date 8.34
Share fair value at grant date 6.90
Annual dividend assumption in fair value measurement 0.48
Share price at payment date / balance sheet date 7.1 9
Fair value on balance sheet date
Effect on result and financial position (EUR)
Expense in 2023, share-based payments settled as equity 2,906 2,906
Share-based payments settled in cash, unpaid part, estimate
Number of shares 1 January 2023
2)
Outstanding at the beginning of the period 432,163 432,163
Changes during the year
Shares granted 7,800 7,800
Number of shares 31 December 2023
Outstanding at the end of the period 424,363 424,363
1)
The fair value of the share settled component at the grant date was the share price of Metsä Board Corporation’s B share less any dividends estimated by analyst consensus to be paid before the
payment of the incentive. The fair value of the share based payment is recognised to the number of shares based on the best available estimate of the total incentive to which the participants are
expected to be entitled.
2)
The amounts in the table represent brutto amounts, i.e. the number of shares to be given based on the share based payment schemes. In addition, the payment will include a cash settled compo-
nent used to cover taxes and tax-like charges.
88
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METSÄ BOARD ANNUAL REVIEW 2023
■ 3.4 Retirement benefit obligations
Accounting principles
The Group’s arrangements concerning benefits following the
termination of employment are either defined benefit pension
plans or defined contribution pension plans. A defined contribu-
tion plan is a pension arrangement in which fixed contributions
are made to a separate unit, and the Group does not have legal or
constructive obligations to make additional contributions if the
fund has insufficient funds to pay all benefits to all employees in
accordance with its obligations in the future. All arrangements
that do not meet these requirements are considered to be defined
benefit plans. A defined benefit plan defines the pension benefit
that the employee will receive upon retiring , the amount of which
depends on factors including the employee’s age, years of service
and salary level, for example.
With defined benefit plans, the current value of the obligations
on the end date of the reporting period, less the fair value of the
assets included in the arrangement, is recognised on the balance
sheet as a liability. The amount of the obligation arising from the
plan is based on annual calculations by independent actuaries
using the projected unit credit method. The current value of the
obligation is determined using the interest rate equalling the
interest rate of high-quality bonds issued by the companies as the
discount rate for the estimated future cash flows. The bonds used
in determining the interest rate have been issued in the same
currency as the benefits to be paid, and their maturity is approxi-
mately the same as that of the corresponding pension obligation.
Actuarial gains and losses from experience verifications and
changes in actuarial assumptions are recognised through items
of other comprehensive income as a reimbursement or charge in
equity for the period during which they have been incurred. Past
service costs are recognised immediately through profit and loss.
Apart from contributions related to pension insurance, the Group
does not have any other payment obligations in defined contribu-
tion plans. Obligation-based payments are allocated as expenses
in accordance with accrual accounting.
Key estimates and judgements
The determination of the current value of pension obligations
arising from defined benefit plans and the items to be recognised
as expenses during the financial period is based on the use of
actuarial assumptions. The assumptions include, among other
things, the discount rate, the assumed increase in the salary level
and the assumed life expectancy. The actuarial assumptions used
may differ significantly from the actual results, due to changes
in economic conditions or the employment relationships of the
people covered by the arrangements. Significant differences
between the assumptions and actual results may affect the
amount of the pension obligation and the value of items to be
recognised as expenses.
Post-employment benefits
EUR million 2023 2022
Liabilities recognised in balance sheet
Defined benefit pension plans 10.0 10.3
Defined contribution pension plans 0.1 0.1
Total 10.1 10.4
Surplus of funded plans in assets -3.4 -3.4
Defined benefit pension plans
The most significant defined benefit pension plans are in Germany and
United Kingdom.
Group’s German defined benefit pension plans grant old-age pensions,
disability pensions and family pensions exceeding the statutory pension
level to eligible officials and senior management. The retirement age is usu-
ally 67 years, and the amount of pension depends on the length of service.
Officials and senior management are required to have a service history of
25–30 years to receive a full pension. Some of the pension arrangements
are closed. The defined benefit plans in Germany are unfunded.
The defined benefits plans in United Kingdom guarantee participants of
the plan a pension, the amount of which is based on the length of service
and the salary in the most recent working years. The arrangement is closed
to new members. The UK pension scheme operates under an independent
foundation separate from the Group.
The Group also has defined benefit plans in Finland, Belgium and Italy.
Amounts in balance sheet
EUR million 2023 2022
Present value of funded obligations 35.5 36.3
Fair value of plan assets - 3 7. 3 -37. 3
Deficit (+) / surplus (-) -1.8 -0.9
Present value of unfunded obligations 8.3 7. 8
Deficit (+) / surplus (-) of defined benefit pension
plans, total
6.5 6.9
Defined benefit-based pension liabilities
on the balance sheet, net
10.0 10.3
Defined benefit-based pension assets
on the balance sheet, net
-3.4 -3.4
89
Change in defined benefit pension obligations in 2022
EUR million
Present
value of
obligation
Fair value of
plan assets Total
1 Jan 2022 64.0 -62.8 1.2
Current service cost 0.5 0.5
Interest expense (+) or interest income (-) 0.9 -1.0 -0.1
Total amount recognised in profit and loss 1.4 -1.0 0.4
Remeasurements in other comprehensive
income
Return on plan assets, excluding amounts
included in interest income or expense
22.1 22.1
Gains (-) and losses (+) from change in
demographic assumptions
0.0 0.0
Gains (-) and losses (+) from change in
financial assumptions
-15.6 -15.6
Experience gains (-) and losses (+) -0.9 -0.9
Total remeasurements in other comprehensive
income
-16.5 22.1 5.7
Translation differences -2.1 2.7 0.6
Contributions
Employers -0.3 -0.3
Plan participants 0.0 0.0
Payments from plans
Benefit payments -2.7 2.1 -0.6
Settlements -0.1 -0.1
31 Dec 2022 44.1 -37. 3 6.9
Change in defined benefit pension obligations in 2023
EUR million
Present
value of
obligation
Fair value of
plan assets Total
1 Jan 2023 44.1 -37. 3 6.9
Current service cost 0.6 0.6
Interest expense (+) or interest income (-) 1.9 -1.7 0.2
Total amount recognised in profit and loss 2.4 -1.7 0.7
Remeasurements in other comprehensive
income
Return on plan assets, excluding amounts
included in interest income or expense
0.7 0.7
Gains (-) and losses (+) from change in
demographic assumptions
-0.5 -0.5
Gains (-) and losses (+) from change in
financial assumptions
0.0 0.0
Experience gains (-) and losses (+) 0.4 0.4
Total remeasurements in other comprehensive
income
-0.1 0.7 0.7
Translation differences 0.5 -0.6 -0.1
Contributions
Employers -0.3 -0.3
Plan participants 0.0 0.0
Payments from plans
Benefit payments -2.9 2.3 -0.6
Settlements -0.3 -0.5 -0.8
31 Dec 2023 43.8 - 3 7. 3 6.5
Defined benefit pension obligation and plan assets by country in 2023
EUR million Germany United Kingdom Finland Other countries Total
Present value of obligation 7.5 24.4 8.6 3.3 43.8
Fair value of plan assets -27.8 -7. 1 -2.4 -37. 3
Total 7. 5 -3.4 1.5 0.9 6.5
Defined benefit pension obligation and plan assets by country in 2022
EUR million Germany United Kingdom Finland Other countries Total
Present value of obligation 7. 1 24.3 9.2 3.5 44.1
Fair value of plan assets -2 7.7 -7. 3 -2.2 -37. 3
Total 7.1 -3.4 1.9 1.2 6.9
Significant actuarial assumptions 2023
Germany United Kingdom Finland Belgium
Discount rate, % 3.17 5.10 3.13 3.60
Salary growth rate, % 3.00 3.30
Pension growth rate, % 2.00 3.05 2.42 2.30
Significant actuarial assumptions 2022
Germany United Kingdom Finland Belgium
Discount rate, % 3.73 4.90 3.72 3.10
Salary growth rate, % 3.00 2.60 1.00
Pension growth rate, % 2.00 3.10 2.84 2.30
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METSÄ BOARD ANNUAL REVIEW 2023
Sensitivity of benefit obligation to changes in essential
weighted assumptions 2023
Impact on benefit obligation
Change of
assumption Increase Decrease
Discount rate 0.5%-points 4.5% decrease 5.0% increase
Salary growth rate 0.5%-points 0.5% increase 0.4% decrease
Pension growth rate 0.5%-points 4.2% increase 4.0% decrease
One year
increase
in assumption
One year
decrease
in assumption
Life expectancy 2.9% increase 2.9% decrease
The aforementioned sensitivity analyses are based on a situation where all
other assumptions remain unchanged when one assumption changes. The
sensitivity of a defined benefit obligation to changes in significant actuarial
assumptions has been calculated using the same method as is used in
calculating the pension obligation recognised in the balance sheet.
Plan assets are comprised as follows:
2023
EUR million
2023
%
2022
EUR million
2022
%
Qualifying insurance policies 36.5 98% 34.7 93%
Cash and cash equivalents 0.6 2% 0.4 1%
Investment funds 0.2 1% 2.1 6%
Total 37. 3 100% 37. 3 100%
The most considerable risks related to Defined benefit plans are as follows:
Changes in the return on bonds
Liabilities arising from the arrangements have been calculated using a dis-
count rate based on the return on high-quality corporate bonds. A decline
in the discount rate increases the arrangements’ liabilities.
Inflation risk
The plan’s benefit obligations are linked to inflation and a higher inflation
will lead to increased obligation.
Life expectancy
The majority of the arrangement obligations arises from generating life-
time benefits for members, so the expected increase in life expectancy will
increase the arrangement obligations.
The contribution made to post-employment defined benefit plans is
expected to be EUR 1.7 million in 2024. The weighted average duration of
the defined benefit obligation is 10.9 years (11.5).
91
4. Capital employed
■ 4.1 Intangible assets
Accounting principles
Goodwill
Goodwill arising from the merging of business operations is
recognised as the amount by which the sum of the consideration
paid, the non-controlling interests’ share in the object of the
acquisition and the previous holding exceed the fair value of the
acquired net assets.
Goodwill is not amortised. Instead, it is tested for impairment
annually and always when there is an indication of a decrease in
value. Goodwill is therefore allocated to cash-generating units for
impairment testing. Goodwill is recognised at original acquisition
cost less accumulated impairment losses.
Other intangible assets
Intangible assets are initially recognised at their original acqui-
sition cost on the balance sheet if the acquisition cost can be
determined reliably and it is probable that the expected financial
benefit from the asset will be to the benefit of the Group.
Intangible assets with limited useful lives are recognised as
expenses over their known or estimated useful lives, using the
straight-line depreciation method.
The residual value of an asset, the useful life and depreciation
method are reviewed at least annually, at the end of each financial
period, and adjustments are made when necessary to reflect
changes in the expected financial benefit of the asset.
Research and development costs
Research costs are recognised as expenses at the time they are
incurred. Development costs are capitalised and amortised over
their useful lives if the research project is likely to generate finan-
cial benefits and the costs can be measured reliably. Metsä Board
has not capitalised development costs.
Computer software
Costs arising from developing and building of significant new
computer software are recognised as intangible assets on the
balance sheet and depreciated on a straight-line basis over its
estimated useful life, which is not to exceed seven years. Main-
tenance and operating costs related to computer software are
recorded as expenses in the reporting period during which they
have been incurred.
Configuration and customisation costs in the deployment of
cloud services are recognised as expenses if they do not result in
intangible assets. If the services received by the group are sep-
arable, the costs are recognised as expenses when the supplier
modifies the application. If the services received by the group are
not separable, the costs are recognised as expenses when the
supplier provides access to the application during the term of the
agreement.
Patents, licences and trademarks
The cost of patents, licences and trademarks with finite useful
lives are capitalised on the balance sheet under intangible assets
and depreciated on a straight-line basis over their useful lives of
5–10 years.
Emission allowances
The Group has received emission allowances in accordance with
the European Union Emissions Trading System. Allowances are
treated as intangible assets and are measured at acquisition cost.
The acquisition cost of emission allowances received without con-
sideration is zero. Emission allowances are used simultaneously
with the carbon dioxide emissions generated during their validity
period. Earnings from emission allowances sold are recognised
in other operating income. If the emission allowances received
without consideration are not sufficient to cover the amount of
the actual emissions, the Group purchases additional allowances
from the market.
The allowances purchased are recognised in intangible rights
at the fair value on the acquisition date. The provision to fulfil
the obligation to return the emission allowances is recognised
at fair value on the closing date of the reporting period if the
emission allowances received without consideration and
purchased are not sufficient to cover the amount of the actual
emissions.
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EUR million Goodwill
Other intangible
assets
Construction
in progress Total
Acquisition cost, 1 Jan 2023 12.2 59.2 0.1 46.6
Translation differences 0.0 0.0
Increases 8.3 8.1 16.4
Decreases -6.9 -6.9
Transfers between asset categories 0.1 0.1
Acquisition cost, 31 Dec 2023 12.2 60.7 8.3 56.1
Accumulated amortisation and impairment charges, 1 Jan 2023 -53.4 -28.5
Translation differences 0.0 0.0
Accumulated amortisation on decreases and transfers 2.0 2.0
Amortisation for the period -1.4 -1.4
Accumulated amortisation and impairment charges, 31 Dec 2023 -52.8 -27.9
Book value, 1 Jan 2023 12.2 5.8 0.1 18.1
Book value, 31 Dec 2023 12.2 7.8 8.3 28.3
EUR million Goodwill
Other intangible
assets
Construction
in progress Total
Acquisition cost, 1 Jan 2022 12.4 124.2 1.0 1 37.6
Translation differences -0.5 -0.5
Increases 0.9 0.1 1.1
Acquired business 1.3 1.3
Decreases -0.1 - 6 7. 8 -92.9
Transfers between asset categories 1.0 -1.0
Acquisition cost, 31 Dec 2022 -12.2 59.2 0.1 46.6
Accumulated amortisation and impairment charges, 1 Jan 2022 -119.1 -119.1
Translation differences 0.4 0.4
Accumulated amortisation on decreases and transfers 66.4 91.4
Amortisation for the period -1.2 -1.2
Accumulated amortisation and impairment charges, 31 Dec 2022 -53.4 -28.5
Book value, 1 Jan 2022 12.4 5.1 1.0 18.5
Book value, 31 Dec 2022 12.2 5.8 0.1 18.1
Other intangible assets include among other things computer software, patents and licenses. Acquired businesses in 2022 include the intangible assets of
Hämeenkyrön Voima Oy. Further information is available in Note 7.2.
The Group received 582 thousand tonnes of emission allowances free of
charge (597). In addition the Group has sold 655 thousand tonnes to the
market (350). At balance closing date the group had emission allowances
of 685 thousand tonnes (1,000). Emissions during the reporting period
fell below the amount of emission allowances received free of charge and
consequently emissions during the year did not have an impact on income
statement or balance sheet.
Capital gains from the sale of emission allowances recognised in other
operating income totalled EUR 55.0 million (29.0). On the balance sheet
date, the fair market value of an emission right was EUR 77.25 per tonne
(80.76) and total value of owned rights EUR 52.9 million (80.8).
93
Impairment testing
Depreciation is not recognised for assets with indefinite useful lives.
Instead, such assets are tested for impairment annually. Assets that
are subject to depreciation are always tested for impairment when
events or changes in conditions indicate that it is possible that the
monetary amount corresponding to the book value of the assets
might not be recoverable.
Cash-generating units are reporting segments or smaller units for
which a utility value can be defined.
The recoverable amount is the higher of the fair value of an asset less
the cost of sale, and its value in use. Value in use is the estimated
future net cash flows, discounted to their present value, expected to
be derived from said asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of the asset
is higher than its recoverable amount. If the impairment loss concerns
a cash-generating unit, it is first allocated to decrease the goodwill of
the cash-generating unit, and thereafter to decrease the other assets
of the unit on pro-rata basis. In connection with the recognition of the
impairment loss, the useful life of the depreciated asset is re-evalu-
ated. An impairment loss recognised for an asset other than goodwill
is reversed if a change has taken place in the estimates used to deter-
mine the recoverable amount of the asset. However, the maximum
reversal of an impairment loss amounts to no more than the carrying
amount of the asset if no impairment loss had been recognised. An
impairment loss recognised on goodwill is not reversed under any
circumstances.
Impairment testing 2023
Metsä Board carries out impairment testing once a year, during the fourth quarter, based on the situation on 30 September, or more frequently if signs of a
possible impairment are detected.
The group did not recognise impairments based impairment testing in 2023. In the testing carried out in 2023, a somewhat potential change in any
individual key assumption would not lead to the recognition of an impairment.
The group’s key impairment testing and key assumptions in the situation on 30 September 2023:
Cash-generating unit
Goodwill
EUR million
Brand
EUR million
Discount rate
after taxes on 30
September 2023
Discount rate
after taxes on 30
September 2022
Long-term
growth rate on 30
September 2023
Long-term
growth rate on 30
September 2022
Paperboard industry
Folding boxboard
1)
31.0 2.5 7. 9 7. 2 2.0 2.0
Liner
1)
26.4 3.0 7. 9 7.2 2.0 2.0
Market pulp
1)
7. 9 7.2 2.0 2.0
1)
Metsä Board’s share of Metsä Fibre’s recoverable cash flow, the book value and the goodwill included in the balance sheet item “Investments in associates and joint ventures” (EUR 45.2 million)
and other intangible assets with unlimited economic life (EUR 5.6 million), are allocated to cash flow generating units in proportion to their pulp purchases.
The recoverable amounts of the cash-generating units being tested are based on five-year forecasts and the resulting, steadily growing cash flows. The
initial value used for the key assumptions of the cash flows – prices and variable costs – after the forecast period is the average of the five-year forecast
period. The value used for delivery volumes and fixed costs is the value of the forecast period’s fifth year. The key testing assumptions are management
estimates and forecasts obtained from external sources of information.
The discount rate used is the weighted average cost of capital (WACC). When calculating the WACC, the cost of debt takes into account the mar-
ket-based view of the credit risk premium.
94
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Accounting principles
Property, plant and equipment are measured at acquisition cost less
accumulated depreciation and impairment losses.
The acquisition cost includes costs that are directly incurred in the
acquisition of an item of property, plant or equipment. Qualifying
external borrowing costs resulting directly from the acquisition, con-
struction or manufacture of an item of property, plant or equipment
are capitalised as part of the acquisition cost of property, plant and
equipment.
If a piece of property, plant or equipment consists of several com-
ponents with differing useful lives, each component is handled as
a separate item. In that case, the expenses related to replacing the
component are capitalised, and any book value remaining at the time
of replacement is derecognised on the balance sheet.
Spare parts, spare equipment and maintenance supplies are recog-
nised in property, plant and equipment when they fulfill the criteria
for recognition of property, plant and equipment. Otherwise, such
commodities are classified as inventories.
Significant investments in refurbishments and improvements are
capitalised on the balance sheet and depreciated over the remaining
useful life of the main asset related to such investments.
Repair and maintenance costs are recognised as expenses when they
are incurred.
Property, plant and equipment is depreciated on a straight-line basis
over the estimated useful lives. Depreciation is not recognised for
owned land and water.
Estimated useful lives
Buildings and constructions 20–40 years
Machinery and equipment
Heavy power plant machinery 20–40 years
Other heavy machinery 15–20 years
Lightweight machinery and equipment 5–15 years
Other tangible assets 5–20 years
The residual value of an asset, the financial useful life and depreciation
method are reviewed at least annually, at the end of each financial
period, and adjustments are made when necessary to reflect changes
in the expected financial benefit of the asset.
Gains and losses arising from the sale and decommissioning of items
of property, plant and equipment are recognised in other operating
income and expenses. Sales gains or losses are calculated as the
difference between the sales price and the remaining acquisition cost.
Government grants related to the acquisition of assets are presented
as adjustments of the acquisition cost on the balance sheet and recog-
nised as income in the form of lower depreciation during the useful life
of the asset.
Leases
The Group has leased various land areas, properties, equipment and
vehicles. When the leased asset is available for the Group’s use, A fixed
asset item and a corresponding liability of the lease is recognised. Paid
rents are divided into liabilities and finance costs. The finance cost
is included in profit or loss over the lease term in such a way that the
interest rate of the remaining debt balance is the same during each
period. The leased fixed asset is subject to straight-line depreciations
over the asset’s economic life or the lease term, depending on which
of them is shorter.
Assets and liabilities arising from leases are initially measured at the
present value. Lease liabilities include fixed payments, less any lease
incentives receivable; amounts expected to be payable by the lessee
under residual value guarantees; the exercise price of a purchase
option if the lessee is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising an option to terminate the lease. The
lease payments are discounted using the interest rate implicit in the
lease, if that rate can be readily determined, or the Group’s incre-
mental borrowing rate. The leased fixed assets are measured at cost,
which includes the amount of the initial measurement of the lease lia-
bility; any lease payments made at or before the commencement date,
less any lease incentives received; any initial direct costs incurred; and
any costs incurred by restoring the site on which it is located.
Some of the leases include options to extend or terminate, which are
largely available only for the Group, not the lessor.
Payments related to short-term leases or leases where the value of
the underlying asset is low are recognised as costs on a straight-line
basis. A lease with a lease term of 12 months or less is considered a
short-term lease. Assets of a low value include mainly ICT and office
equipment.
Key estimates and judgments
Aineelliset käyttöomaisuushyödykkeet
Estimates concerning the residual value and useful life of property,
plant and equipment, as well as the selection of the depreciation
method, require significant management judgement.
Leases
When determining the lease term, the management accounts for all
relevant facts and circumstances that create an economic incentive
to exercise the option to extend the lease, or not to exercise the option
to terminate the lease. Options to extend the lease (or the time sub-
sequent to an option to terminate) are accounted for in the lease term
only if the extension of the lease (or the decision not to terminate the
lease) is reasonably certain. The possible future cash flows of EUR 2.0
million have not been included in the lease liability because the exten-
sion of the lease (or the decision not to terminate it) is not reasonably
certain. The Group will conduct a reassessment upon the occurrence
of either a significant event or a significant change in circumstances
that is within the control of the lessee and affects the assessment.
■ 4.2 Property, plant and equipment
95
Land and water areas Buildings and constructions Machinery and equipment
EUR million Owned Leased Owned Leased Owned Leased
Acquisition cost, 1 Jan. 2023 12.4 2.4 472.4 12.2 2,782.3 1 7. 5
Translation differences 0.0 0.7 0.0 8.8 0.0
Additions 4.8 16.2 3.1 222.6 2.6
Decrease -1.1 -1.3 -1.8 -5.4 21.5 -3.2
Transfers between items 1 7.4 - 37.6
Acquisition cost, 31 Dec. 2023 16.1 1.1 504.9 9.9 2,997.6 16.9
Accumulated depreciation and impairment charges 1 Jan. 2023 -0.4 -0.7 -281.7 -8.4 -2,063.3 -8.3
Translation differences 0.0 -0.3 0.1 -2.3 0.0
Accumulated depreciation on deductions and transfers 0.1 1.6 5.2 47. 5 3.2
Depreciation for the period -0.2 -10.0 -2.3 -74.8 -4.3
Accumulated depreciation and impairment charges 31 Dec. 2023 -0.4 -0.8 -290.4 -5.3 -2,092.9 -9.4
Book value, 1 Jan. 2023 12.0 1.7 190.7 3.9 719.0 9.2
Book value, 31 Dec. 2023 15.7 0.4 214.6 4.5 904.7 7.4
Other tangible
assets
Construction in
progress Total Total
EUR million Owned Owned Owned Leased Total
Acquisition cost, 1 Jan. 2023 23.0 163.2 3,453.3 32.1 3,485.5
Translation differences 0.2 -2.2 7. 5 -0.1 7.4
Additions 4.6 -36.7 211.5 5.7 217.2
Decrease -0.3 -73.1 -54.8 -9.9 -64.7
Transfers between items 20.1 -0.1 -0.1
Acquisition cost, 31 Dec. 2023 27. 5 71.4 3,617.5 27.8 3,645.3
Accumulated depreciation and impairment charges 1 Jan. 2023 -14.8 -2,360.2 -1 7.4 -2,377.6
Translation differences 0.0 -2.6 0.1 -2.5
Accumulated depreciation on deduction and transfers 0.0 49.0 8.5 57. 5
Depreciation for the period -0.9 -85.6 -6.7 -92.4
Accumulated depreciation and impairment charges 31 Dec. 2023 -15.7 -2,399.4 -15.5 -2,414.9
Book value, 1 Jan. 2023 8.2 163.2 1,093.2 14.7 1,107.9
Book value, 31 Dec. 2023 11.8 71.4 1,218.1 12.3 1,230.4
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Land and water areas Buildings and constructions Machinery and equipment
EUR million Owned Leased Owned Leased Owned Leased
Acquisition cost, 1 Jan. 2022 15.7 2.0 401.2 10.2 2,563.2 15.7
Translation differences -0.1 -12.5 0.0 -113.1 -0.6
Additions 0.0 0.7 72.1 3.3 68.7 4.1
Acquired business 6.6 5.0 18.0
Decrease -3.2 -0.2 2.1 -1.3 8.9 -19.6
Transfers between items 0.0 3.0 249.7
Acquisition cost, 31 Dec. 2022 12.4 2.4 472.4 12.2 2,782.3 1 7. 5
Accumulated depreciation and impairment charges 1 Jan. 2022 -0.5 -0.5 -280.0 -5.4 -2,093.5 -6.2
Translation differences 0.0 7.5 -0.1 82.6 0.2
Accumulated depreciation on deductions and transfers 0.0 -0.6 1.4 11.1 2.1
Depreciation for the period -0.2 -8.5 -3.4 -63.5 -4.4
Impairments -0.8 -0.1 0.0
Accumulated depreciation and impairment charges 31 Dec. 2022 -0.4 -0.7 -281.7 -8.4 -2,063.3 -8.3
Book value, 1 Jan. 2022 15.2 1.4 121.3 4.8 469.7 9.5
Book value, 31 Dec. 2022 12.0 1.7 190.7 3.9 719.0 9.2
Other tangible
assets
Construction in
progress Total Total
EUR million Owned Owned Owned Leased Total
Acquisition cost, 1 Jan. 2022 23.0 306.1 3,309.2 27.8 3,337.0
Translation differences -0.7 -15.0 -141.3 -0.6 -141.9
Additions 1.4 121.9 264.1 8.1 272.2
Acquired business 0.1 11.6 18.0 29.6
Decrease -1.3 3.3 9.8 -21.1 -11.3
Transfers between items 0.4 -253.1
Acquisition cost, 31 Dec. 2022 23.0 163.2 3,453.3 32.1 3,485.5
Accumulated depreciation and impairment charges 1 Jan. 2022 -15.9 -2,389.8 -12.1 -2,401.9
Translation differences 0.6 90.8 0.1 90.9
Accumulated depreciation on deduction and transfers 1.3 11.8 3.5 15.3
Depreciation for the period -0.8 -72.9 -8.0 -80.9
Impairments -0.1 -0.9 -0.9
Accumulated depreciation and impairment charges 31 Dec. 2022 -14.8 -2,360.2 -1 7.4 -2,377.6
Book value, 1 Jan. 2022 7.2 306.1 919.4 15.7 935.0
Book value, 31 Dec. 2022 8.2 163.2 1,093.2 14.7 1,107.9
Acquired businesses in 2022 include the property, plant and equipment of Hämeenkyrön Voima Oy. More information on the acquired businesses can be
found in note 7.2.
Leases
EUR million 2023 2022
Costs related to short-term leases 0.3 0.8
Costs of leases in which the underlying asset is of low
value
2.2 1.5
Interest expenses 0.4 0.5
Cash outflow for leases 7.6 25.6
Disclosures on lease liabilities are presented in Note 5.5 (Financial liabili-
ties) and 5.6 (Management of financial risks).
Impairments
Year 2022 impairments include EUR 0.3 million of impairments related
to the discontinuation of Russian business operations and EUR 0.7
million related to the restructuring of customer service and supply chain
management.
Borrowing costs
Borrowing costs capitalised totalled to EUR 2.0 million (8.3). The average
interest rate used in capitalisation was 1.9 % (2.2%).
97
Accounting principles
Other investments consist of listed and unlisted equity invest-
ments. The most significant of these is the Group’s holding in
Pohjolan Voima. This investment is unlisted and strategic in
nature, serving the Group’s long-term energy sourcing needs.
This being the case, the Group classifies its shares in Pohjolan
Voima as financial assets at fair value recognised under other
items of comprehensive income. Changes in their fair value are
presented in the fair value reserve, accounting for the tax effect.
When the investment is abandoned, the fair value changes accu-
mulated in the equity are transferred to the retained earnings
from the fair value fund.
The Group classifies its other equity financial assets as financial
assets at fair value to be recognised as financial assets through
profit and loss.
The fair values of publicly listed shares are based on the share
price on the balance sheet date. The fair values of shares other
than listed shares are determined using various valuation models,
such as the price levels of recent transactions and valuation
methods based on the present value of discounted cash flows.
As far as possible, the valuation methods are founded on mar-
ket-based valuation factors.
Key estimates and judgements
Fair value measurement
The application of valuation models to measuring fair value
requires judgement concerning the selection of the method to
be applied, as well as valuation factors required by the chosen
method that are based on the price and interest levels prevailing
in the market on the end date of each reporting period. The most
significant item of other investments that has been valued by
using a valuation model is the Group’s investment in the shares of
Pohjolan Voima Oyj.
The price of these shares is determined based on the present
value of discounted cash flows. Key factors affecting cash
flows include the price of electricity, inflation expectations and
the discount rate. The 12-month moving average of electricity
futures prices has been used as the energy price for the first eight
years. Subsequent prices are based on a long-term market price
forecast.
The carrying amount of the Group’s shares in Pohjolan Voima was
EUR 253.0 million on the balance sheet on 31 December 2023.
The carrying value of other investments is estimated to change
by EUR -9.9 million and EUR 10.3 million should the rate used
for discounting the cash flows change by 0.5 percentage points
from the rate estimated by the management. The carrying value
of other investments is estimated to change by EUR 61.6 million
should the energy prices used in calculating the fair value differ
by 10% from the prices estimated by the management.
EUR million 2023 2022
Pohjolan Voima Oyj 253.0 344.1
Other unlisted shareholdings 1.4 1.3
Other investments total 254.4 345.4
The most important unlisted shareholding under other investments
consists of a 2.6 per cent stake in Finnish energy company Pohjolan Voima
Oyj, which produces electricity and heat for its shareholders in Finland.
Pohjolan Voima trades with its shareholders at prices based on production
costs, which generally are lower than market prices. The Group is entitled,
through the B shares of Pohjolan Voima, to a share of approximately 5.2%
of the energy generated by the Olkiluoto 1 and Olkiluoto 2 nuclear power
plants and, through the B2 shares of Pohjolan Voima, to a share of 1.5%
of the energy generated by the Olkiluoto 3 nuclear power plant, now being
deployed.
On 1 January 2022, Metsä Board acquired the entire share capital of
Hämeenkyrön Voima Oy from Pohjolan Voima Oyj (84%) and from DL
Power Oy, part of Leppäkoski group (16%). In this connection, Metsä
Board sold its series G10 shares, which corresponded to an 84% holding
in Hämeenkyrön Voima Oy, to Pohjolan Voima Oyj for EUR 12.0 million.
Hameenkyrön Voima Oy was merged later during the financial year to the
parent company.
The ownership is measured quarterly at fair value on share series basis
by using the average of discounted cash flow method and valuation based
on earlier transactions. The weighted average cost of capital used was 5.35
(5.42) per cent.
The acquisition cost of shares in Pohjolan Voima Oyj is EUR 28.3 million
(28.3) and the fair value EUR 253.0 million (344.1). The change in fair value
was due to an updated long-term price forecast for the electricity used in
the shares’ valuation model.
Shareholder agreement restricts sale of shares of Pohjolan Voima to
buyers that are not existing shareholders.
■ 4.3 Other investments
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Accounting principles
Inventories are measured at the lower of acquisition cost or net
realisable value. In measuring inventories, the FIFO principle is
observed or, alternatively, the weighted average price method,
depending on the nature of the inventories. The acquisition cost
of finished products acquired comprises all purchase costs,
including direct transport, handling and other expenses. The
acquisition cost of finished and semi-finished products of own
manufacture includes raw materials, direct production costs, and
the systematically allocated portion of variable manufacturing
overheads and fixed overheads at the normal level of operation.
Borrowing cost is not included in the acquisition cost.
Net realisable value is the estimated sales price in ordinary
business operations less the estimated cost of completion and
the necessary sales costs.
Key estimates and judgements
The Group regularly reviews its inventories for situations where
the inventories contain non-marketable items or items with net
realisable value below the acquisition cost. When necessary, the
Group reduces the book value of the inventories accordingly. This
review requires the management’s estimates of the sales prices
of products, the cost of completion and the costs necessary to
make the sale. Any changes in these estimates might lead to an
adjustment in the book value of the inventories in future periods.
Accounting principles
Trade receivables are initially measured at fair value and later
at amortised cost, taking into account impairment. The Group
applies a model based on expected credit losses to the deter-
mination of the impairment of trade receivables. Provisions are
furthermore set up on a case-by-case basis when there is a justifi-
able reason to assume that the Group will not receive payment for
the invoiced amount according to the original terms.
EUR million 2023 2022
Raw materials and consumables 174.9 211.6
Finished goods 219.4 276.1
Advance payments 0.0 19.0
Inventories total 394.4 506.7
At the end of 2023, the inventory has been written down to a net realisable
value of EUR 1.0 million. In 2022, no write-downs were recorded for
inventory.
Trade receivables and other non-interest bearing receivables
EUR million 2023 2022
From Group companies
Trade receivables 19.3 40.8
Prepayments and accrued income 0.5 0.4
Total 19.8 41.2
From associated companies and joint ventures
Trade receivables 0.2 0.1
From others
Trade receivables 190.3 272.5
Impairment -0.6 -1.2
Total 189.7 271.4
Other receivables 36.1 34.3
Prepayments and accrued income 5.9 7.5
From others total 231.7 313.2
Trade receivables and other receivables total 251.7 354.5
Receivables from Group companies are receivables from parent company
Metsäliitto Cooperative and from other subsidiaries of the parent company.
Derivative receivables are from Metsä Group Treasury Oy, a wholly owned
subsidiary of Metsäliitto Cooperative.
In 2022 as a consequence of the discontinuation of Russian business
operations, the Group made a write-down of all its trade receivables and
other receivables related to operations in Russia, totalling EUR 0.1 million.
■ 4.4 Inventories ■ 4.5 Trade receivables and other receivables
99
Case-specific impairments and impairments determined by applying the
model based on expected credit losses deducted from trade receivables
are as follows:
EUR million 2023 2022
Value 1 Jan 1.2 2.5
Increase 0.6 0.6
Decrease -1.2 -1.9
Value 31 Dec 0.6 1.2
Credit losses recognised were EUR 0.1 million (0.2).
Age distribution of trade receivables less impairments
EUR million 2023 2022
Not overdue 153.8 251.2
Overdue
Less than 30 days 25.0 17. 3
Between 31 and 60 days 8.0 2.1
Between 61 and 90 days 0.5 -0.3
Between 91 and 180 days 0.2
Over 180 days 2.2 1.0
Total 189.7 271.4
■ 4.6 Other non-current liabilities
EUR million 2023 2022
Advance payments received 8.2 1.1
Subsidies 2.4
Accruals and deferred income 0.5 0.5
Total 8.7 3.9
■ 4.7 Trade payables and other liabilities
EUR million 2023 2022
Advance payments received 5.4 5.1
Trade payables 206.5 223.0
Trade payables, Supply Chain Finance schemes 55.3 91.0
Other liabilities 13.1 28.1
Accruals and deferred income
Customer discounts 20.4 23.2
Purchase-related items 20.8 46.3
Employee costs 31.6 31.7
Other accrued expenses 24.3 34.2
Total 3 7 7. 5 482.7
With financing banks, Metsä Group has established Supply Chain Finance
(SCF) schemes aimed at a few key suppliers. In the schemes, the suppliers
are offered the option of selling their Metsä Group receivables to a bank
providing the SCF scheme. The SCF schemes partly replace the earlier
advance payment arrangements, and their aim is not to cause a significant
deviation from Metsä Group’s normal payment terms.
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■ 4.8 Provisions
Accounting principles
A provision is recognised when, as a result of an earlier event, the
Group has a legal or actual obligation, the realisation of a payment
obligation is likely, and the amount of the obligation can be reliably
estimated. Any reimbursement from a third party is presented as
an asset separate from the provision if it is practically certain that
reimbursement will be received.
Restructuring
A restructuring provision is recorded when the Group has incurred
a legal or constructive obligation to make a payment. Termination
payments are recorded when a detailed plan has been made for
the restructuring and the Group has raised valid expectations in
those affected that it will carry out the restructuring by starting to
implement that plan or announcing its main features to those affected
by it. If the Group makes an offer to employees concerning voluntary
resignation against benefits determined in the offer, the liability arising
from this is recorded when the Group can no longer withdraw its offer.
The obligation arising from such an offer is based on the number of
employees that the Group expects to accept the offer. Benefits falling
due in twelve months’ time or later are measured at their present
value.
Environmental obligations
Costs arising from environmental remediation that do not increase
present or future revenue are recorded as expenses. An environmen-
tal obligation is recognised if, based on the current interpretation
of environmental legislation, an obligation has likely arisen and its
amount can be reliably estimated. The obligation is recorded at the
current value of estimated future expenses. A sum corresponding to
the obligation is also recognised in property, plant and equipment.
Other provisions
Other provisions mainly consist of provisions arising from estimated
cost of future restoration of leased sites.
Key estimates and judgements
The determination of the criteria for the recognition of provisions
involves the management’s judgement. The amounts recognised as
provisions are based on the management’s best assessment of the
expenses required to handle the obligation. As the timing and amount
of these expenses are not fully certain, the actual expenses may differ
significantly from the original estimate. The book value of provisions
is regularly reviewed and adjusted as required, taking into account
changes in cost assessments, regulation, technology and conditions.
Provisions
EUR million Restructuring Environmental Other Total
1 Jan 2023 4.9 2.0 0.0 6.9
Translation differences 0.0 0.0
Increases 0.0 0.0
Utilised during the year -3.8 -3.8
31 Dec 2023 1.1 2.0 0.0 3.2
Non-current 1.7 0.0 1.7
Current 1.1 0.3 1.4
Total 1.1 2.0 0.0 3.2
1 Jan 2022 0.2 2.7 0.0 3.0
Translation differences 0.0 0.0 0.0
Increases 4.9 4.9
Utilised during the year -0.7 0.0 -0.7
Unused amounts reversed -0.2 -0.1 -0.3
31 Dec 2022 4.9 2.0 0.0 6.9
Non-current 2.0 0.0 2.0
Current 4.9 4.9
Total 4.9 2.0 0.0 6.9
Provisions are estimated to be utilised within five years.
The Group companies have environmental responsibilities related to former industrial activities at sites that have since been closed, sold or leased, and
from decommissioned landfill sites. Provisions for the costs of land rehabilitation work have been made in cases where it has been possible to measure the
Group’s liability for land contamination and any post-treatment obligations.
101
5. Capital structure and financial risks
Translation differences
Translation differences include translation differences arising from trans-
lation of subsidiaries in other currencies than euro and gains and losses
arising on hedging of net investments in these subsidiaries less deferred
tax, when requirements of hedge accounting have been fulfilled. Net invest-
ments were not hedged in Metsä Board Group in 2023 or in 2022.
Cumulative translation
Translation differences
in other comprehensive
income
EUR million 2023 2022 2023 2022
SEK -74.7 -7 7.5 2.8 -49.9
RUB * 7. 0
USD 8.3 13.1 -4.7 6.5
GBP 0.4 -0.6 0.2 -0.5
Others -0.1 1.0 -0.2 -0.1
Total -66.0 -64.0 -1.9 -36.9
* RUB denominated translation difference arises mostly from associate company Metsä Fibre.
In June 2022, as a consequence of the discontinuation of Russian business
operations, the Group recognised an expense of EUR 0.6 million for accu-
mulated Russian ruble-denominated translation differences. The Russian
ruble-denominated translation differences accumulated since June 2022
have been reported in the financial items in the income statement. Since
March 2022, the rate used for the Russian ruble is the closing rate for EUR/
RUB published by Refinitiv.
Number of shares
Outstanding shares Treasury shares
Totalshares Series A Series B Total Series B
1 Jan 2022 32,802,175 322,710,571 355,512,746 355,512,746
Acquisition of treasury shares -1,000,000 -1,000,000 1,000,000
31 Dec 2022 32,802,175 321,710,571 354,512,746 1,000,000 355,512,746
Disposal of treasury shares 298,785 298,785 -298,785
31 Dec 2023 32,802,175 322,009,356 354,811,531 701,215 355,512,746
The share has no nominal value. All shares have been paid in full. The weighted average number of shares, which does not include Metsä Board Oyj’s treas-
ury shares, is 354 750 822 (355,359,331) pieces.
Fair value and other reserves
EUR million 2023 2022
Fair value reserve 207.4 282.2
Legal reserve and reserves stipulated by the Articles
of Association
1.7 1.7
Total 209.1 283.9
Fair value reserve
Fair value changes in derivatives designated as cash flow hedges are
recorded to fair value reserve deducted by deferred tax effect. Additionally,
the fair value change of Pohjolan Voima Oyj shares recognised by the
Group as other investments is moved to the reserve with deferred tax
effect deducted.
Legal reserve and reserves stipulated by the Articles of Association
Legal reserve and reserves stipulated by the Articles of Association have
been created and accumulated on resolutions by the General Meeting of
Shareholders.
■ 5.1 Shareholders’ equity
Changes in share capital
Share capital
EUR million Series A Series B Total
1 Jan 2022 51.5 506.4 557.9
Conversion of A shares into B shares
31 Dec 2022 51.5 506.4 557.9
Conversion of A shares into B shares
31 Dec 2023 51.5 506.4 557.9
Each series A share confers to its holder twenty (20) votes at the General Meeting of Shareholders, and each series B share confers to the holder one (1)
vote. All shares carry the same right to receive a dividend. Metsä Board’s A shares can be converted to B shares if shareholder or representative of the
nominee registered shares makes a written request for the conversion to the company. No monetary consideration is paid for the conversion.
102
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Reserve for invested unrestricted equity
The reserve for invested unrestricted equity fund includes other invest-
ments of an equity nature and the subscription price of the shares to the
extent that it is not recognised to the share capital according to the specific
decision.
EUR million 2023 2022
Reserve for invested unrestricted equity 208.9 208.9
Treasury shares
Accounting principles
When treasury shares are acquired, the equity belonging to the
owners of the parent company is reduced by an amount that
consists of the consideration paid, including immediate transac-
tion costs after taxes, until the treasury shares are canceled or
reissued. If the purchased treasury shares are reissued, the con-
sideration received, less transaction costs after taxes, is recorded
in the equity belonging to the owners of the parent company.
At the end of the year, the group held 701,215 treasury shares (1,000,000),
which corresponds to 0.2% (0.3) of the number of shares. The average
purchase price of the shares was 7.82 euros (7.82) per share.
Shares Shares
EUR million 2023 2023 2022 2022
Treasury shares 1.1. -7.8 1,000,000
Acquisition of treasury
shares
-7. 8 1,000,000
Disposal of treasury shares 2.3 -298,785
Treasury shares 31�12� -5.5 701,215 -7. 8 1,000,000
Dividend
Dividends payable by the company are recorded as deductions to equity
in the period during which the shareholders in a general meeting have
declared the dividend.
The Board of Directors has proposed that a dividend of EUR 0.25 per
share be distributed for the 2023 financial year.
103
Other comprehensive income after taxes 2023
Equity attributable to members of parent company
Milj. euroa
Translation
differences
Fair value and
other reserves
Retained
earnings Total
Non-con-
trolling
interest Total equity
Items that will not be reclassified to profit or loss
Actuarial gains/losses on defined benefit pension plans -1.0 -1.0 -1.0
Financial assets at fair value through other comprehensive income -87.8 - 8 7. 8 - 87.8
Share of profit from other comprehensive income of associated company -3.4 0.0 -3.4 -3.4
Income tax relating to items that will not be reclassified 18.2 0.2 18.5 18.5
Total -72.9 -0.7 -73.6 -73.6
Items that may be reclassified to profit or loss
Cash flow hedges
Currency hedges
Gains and losses recorded in equity 7.6 7.6 -0.7 6.8
Transferred to adjust Sales 6.6 6.6 6.6
Interest hedges
Gains and losses recorded in equity -1.7 -1.7 -1.7
Commodity hedges
Gains and losses recorded in equity -14.2 -14.2 0.0 -14.3
Transferred to adjust purchases 10.6 10.6 0.0 10.7
Share of profit from other comprehensive income of associated company -5.7 -5.7 -5.7
Cahs flow hedges total 3.2 3.2 -0.7 2.5
Translation differences -1.9 -1.9 -0.8 -2.8
Translation differences total -1.9 -1.9 -0.8 -2.8
Income tax relating to items that may be reclassified -1.8 -1.8 0.2 -1.6
Total -1.9 1.4 -0.5 -1.4 -1.9
Other comprehensive income, net of tax -1.9 -71.5 -0.7 -74.1 -1.4 -75.6
Other comprehensive income after taxes 2022
Equity attributable to members of parent company
Milj. euroa
Translation
differences
Fair value and
other reserves
Retained
earnings Total
Non-con-
trolling
interest Total equity
Items that will not be reclassified to profit or loss
Actuarial gains/losses on defined benefit pension plans -4.7 -4.7 -4.7
Financial assets at fair value through other comprehensive income 178.5 178.5 178.5
Share of profit from other comprehensive income of associated company 3.0 0.0 3.0 3.0
Income tax relating to items that will not be reclassified -35.7 1.8 -33.9 -33.9
Total 145.8 -2.9 142.9 142.9
Items that may be reclassified to profit or loss
Cash flow hedges
Currency hedges
Gains and losses recorded in equity -63.0 -63.0 0.5 -62.5
Transferred to adjust Sales 87.4 87.4 -0.1 8 7. 3
Interest hedges
Gains and losses recorded in equity 4.4 4.4 4.4
Transferred to adjust net financial items
Commodity hedges
Gains and losses recorded in equity 46.6 46.6 0.8 47.4
Transferred to adjust purchases -78.6 -78.6 -1.1 -79.7
Share of profit from other comprehensive income of associated company 22.4 22.4 22.4
Cahs flow hedges total 19.1 19.1 0.2 19.3
Translation differences -42.6 -42.6 -13.7 -56.3
Share of profit from other comprehensive income of associated company 5.8 5.8 5.8
Translation differences total -36.9 -36.9 -13.7 -50.6
Income tax relating to items that may be reclassified 0.7 0.7 0.0 0.6
Total -36.9 19.8 -1 7. 1 -13.6 -30.6
Other comprehensive income, net of tax -36.9 165.6 -2.9 125.8 -13.6 112.2
104
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Accounting principles
Interest income and expenses are recognised using the effective
interest rate method.
Dividend income is recognised when the right to receive a pay-
ment is established.
Borrowing costs are generally recognised as an expense in the
period in which they are incurred. When an item of property, plant
or equipment is involved in a major and long-term investment
project, the borrowing costs directly due to the acquisition,
construction or production of the asset are included in the asset’s
acquisition cost.
The Group presents net interest income and expenses related to
defined benefit plans as financial income and expenses.
■ 5.2 Financial income and expenses ■ 5.3 Other financial assets
EUR million 2023 2022
Exchange differences
Commercial items 1.5 5.8
Hedging, hedge accounting not applied 1.3 -10.1
Other items -0.2 -0.6
Exchange differences total 2.6 -5.0
Other financial income
Interest income on loans, other receivables and cash
and cash equivalents
9.8 2.6
Dividend income 0.0 0.3
Other financial income total 9.9 3.0
Other financial expense
Interest expenses on financial liabilities carried at
amortised cost using the effective interest method
-12.0 -3.8
Other financial expenses -0.4 -0.8
Interest and other financial expenses, total -12.4 -4.7
Valuation of financial assets and liabilities and interest
and other financial expenses, total
-12.4 -4.7
The Russian ruble-denominated translation differences accumulated since
June 2022 as a consequence of the discontinuation of Russian business
operations, amounting to EUR -0.3 million (-0.5), have been reported
in other exchange rate differences in the income statement. Interest
expenses have been capitalized as a part of the acquisition costs of invest-
ments in the amount of EUR 2.0 million (8.3).
EUR million 2023 2022
Loan receivables 2.5 2.3
Defined benefit pension plans (Note 3.5) 3.4 3.4
Other receivables and accrued income 0.4 0.3
Total 6.3 6.0
105
Accounting principles
Cash and cash equivalents consist of cash and other short-term,
highly liquid investments that can be easily converted into an
amount of cash known in advance and that carry a minimal risk
of value changes. Metsä Board has classified as cash and cash
equivalents the short-term money market investments made in
accordance with its treasury policy and interest-bearing receiv-
ables comparable to cash funds and available immediately from
Metsä Group’s internal bank Metsä Group Treasury Oy.
When determining the impairment of monetary assets, a model
based on expected credit losses is applied. The expected credit
losses are reviewed for the following 12 months.
Accounting principles
Financial liabilities are categorised initially recognised at fair value. The Group has classified all financial liabilities under “Amortised cost”. Trans-
action costs are included in the original book value of financial liabilities measured at amortised cost. Subsequently, all financial liabilities are
measured at amortised cost using the effective interest method.
■ 5.4 Cash and cash equivalents
■ 5.5 Borrowings and net debt
EUR million 2023 2022
Cash at hand and in bank 13.2 17.6
Deposits to Metsä Group Treasury Oy 278.4 338.6
Total 291.6 356.2
Interest-bearing Liabilities
EUR million 2023 2022
Non-current interest-bearing financial liabilities
Bonds 249.2 249.0
Loans from financial institutions 164.4 175.9
Lease liabilities 7.5 9.5
Total 421.0 434.4
Current interest-bearing financial liabilities
Current portion of non-current debt 17. 1 18.2
Current liabilities to group companies 0.4
Total 1 7. 1 18.6
Interest-bearing financial liabilities total 438.1 453.0
Interest-bearing assets
EUR million 2023 2022
Non-current interest-bearing financial assets
Loan receivables 2.5 2.3
Current interest-bearing financial assets
Cash at hand and in bank 13.2 17.6
Deposits to Metsä Group Treasury Oy 278.4 338.6
Total 291.6 356.2
Interest-bearing financial assets total 294.0 358.5
Interest-bearing net debt 144.0 94.5
Metsä Board has classified interest-bearing receivables comparable to
cash funds and available immediately from Metsä Group’s internal bank
Metsä Group Treasury Oy as Cash and cash equivalents.
106
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Changes in liabilities and current interest-bearing receivables reported in the cash flow from financing
activities in 2023
Non-cash changes
EUR million 1 Jan 2023 Cash flows
Acquired
/ Sold
businesses
Changes in
foreign
exchange rates
New finance
leases Other changes 31 Dec 2023
Non-current interest-bearing liabilities incl. Current portion
Bonds 249.0 0.2 249.2
Loans from financial institutions 1 87.6 -11.8 0.3 176.1
Finance lease liabilities 15.9 -7. 1 0.0 4.0 12.8
Other 0.0 0.0 0.0
Total 452.6 -18.9 0.0 4.0 0.5 438.1
Non-current non-interest bearing liabilities 3.9 4.7 0.0 8.7
Current interest-bearing liabilities 0.4 -0.4 0.0
Total 456.9 -14.6 0.0 4.0 0.5 446.8
Changes in liabilities and current interest-bearing receivables reported in the cash flow from financing
activities in 2022
Non-cash changes
EUR million 1 Jan 2022 Cash flows
Acquired
/ Sold
businesses
Changes in
foreign
exchange rates
New finance
leases Other changes 31 Dec 2022
Non-current interest-bearing liabilities incl. Current portion
Bonds 248.8 0.2 249.0
Loans from financial institutions 182.3 5.0 0.3 187.6
Finance lease liabilities 15.9 -25.1 18.0 -0.5 7.0 0.7 15.9
Total 447.0 -20.1 18.0 -0.5 7. 0 1.1 452.6
Non-current non-interest bearing liabilities 1.5 2.4 -0.0 0.0 3.9
Current interest-bearing liabilities 0.0 -0.5 0.0 0.0 0.0 0.9 0.4
Total 448.6 -18.1 18.0 -0.5 7.0 2.0 456.9
Other changes consists of Oy Hangö Stevedoring Ab’s liabilities transferred to assets held for sale in 2022 and of accrual of effective interest during the
financial year on financial liabilities valued.
Bonds
EUR million Interest % 2023 2022
2017–2027 2.75 249.2 249.0
Total 249.2 249.0
Metsä Board Corporation issued in September 2017 a bond of EUR
250 million. The bond carries a fixed coupon rate of 2.75 per cent, and
the maturity date is 29 September 2027. The bond ranks senior and is
unsecured.
107
■ 5.6 Management of financial risks
The financial risks associated with business operations are managed in
accordance with the financial policy endorsed by the Board of Directors
and the senior management of the company. The policy defines focal
instructions on the management of foreign currency, interest rate, liquidity
and counterparty risks, and for the use of derivative financial instruments.
Correspondingly, commodity risks are managed according to the compa-
ny’s commodity risk policy. The purpose is to protect the company against
major financial and commodity risks, to balance the cash flow and to allow
the business units time to adjust their operations to changing conditions.
Metsä Group Treasury Oy is specialized in finance and functions as the
Group’s internal bank. Metsäliitto Cooperative´s holding is 100 per cent of
the company. Financial operations have been centralised to Metsä Group
Treasury, which is in charge of managing the Group companies’ financial
positions according to the strategy and financial policy, providing neces-
sary financial services and acting as an advisor in financial matters.
Foreign currency risk
The Group’s foreign currency exposure consists of the risks associated
with foreign currency flows, translation risk of net investments in foreign
entities and economic currency exposure. Most of the Group’s costs are
incurred in the euro zone and to some extent in Sweden, but a significant
part of the sales is received or priced in other currencies. Sales may
therefore vary because of changes in exchange rates, while production
costs remain unchanged. The foreign currency transaction exposure is
consisting of foreign currency denominated sales and costs. The exposure
is including foreign currency denominated balance sheet exposure consist-
ing of accounts receivable and accounts payable and 50 per cent share of
the annual contracted or estimated net currency cash flow.
The main currencies of the Group’s foreign currency transaction
exposure are the US dollar, the Swedish krona and the British pound. The
share of dollar is 54 per cent (2022: 60), share of Swedish krona is 35 per
cent (32) and share of pound is 9 per cent (6). A strengthening of the dollar
and the pound has a positive impact on the financial result and a weakening
a negative impact. A weakening of the Swedish krona has a positive
impact on the result of the Group. From other currencies Metsä Board has
currency risk in Canadian dollar. The hedging policy is to keep the balance
sheet exposure and 50 per cent of annual cash flow of contracted or
estimated currency flows consistently hedged. The amount of hedging may
deviate from the normal level by 40 per cent in either direction. The Board
of Directors of Metsä Board is deciding on hedging levels significantly
deviating from the norm set out in the financial policy. The amount of
currency-specific hedging depends on current exchange rates and market
expectations, on the interest rate differences between the currencies and
the significance of the exchange rate risk for the financial result of the
Group. The transaction exposure is mainly hedged by forward transactions
but also by the use of foreign currency loans and currency options.
At the end of the financial period, the foreign exchange transaction
exposure had been hedged 8.6 months on average (8.9) being 123 per cent
of the hedging norm (122). During the financial period, the hedging level
has varied between 8 and 10 months (8–9) being between 114 and 127 per
cent of the norm (113–128). The dollar’s hedging level was 8.3 months (8.4)
being 121 per cent of the norm (119). The Swedish krona’s hedging level
was 9.4 months (10.4) being 135 per cent of the norm (135). The pound’s
hedging level was 7.8 months (7.7) being 100 per cent of the norm (100).
Hedge accounting has been applied to hedging of transaction exposure
and forwards and options allocated to hedge accounting have been used
to hedge the portion of highly probable forecast sales of the currency
transaction exposure.
The translation risk of a net investment in a foreign entity is generated
from the consolidation of the equity of subsidiaries outside the euro area
into euros in the consolidated financial statements. Hedging of equity has
been discontinued.
Metsä Board applies the average deviation vs. hedging norm key figure
to assess the risk of its open foreign currency positions. The Metsä Board
Group average deviation vs. hedging norm was 23.7 percentage (1.6
months) at the end of financial period and has been on average 19.6 (1.4
months) percentage during year 2023
Interest rate risk
The interest rate risk is related in the interest bearing receivables and
loans, working capital financing and currency hedging. The most signifi-
cant currencies in risk management are the euro, the US dollar, the Swed-
ish krona and British pound. The objective of the interest rate risk policy is
to minimise the negative impact of interest rate changes on the Group´s
and group companies´ result and the financial position, and to optimise
financing costs within the framework of risk limits. The effect of interest
rate changes on financial costs depends on the average interest fixing time
of interest bearing assets and liabilities, which is measured in the Group by
duration. As duration is lengthening the rise of interest rates affects more
slowly the interest expenses of financial liabilities. The maturity of the loan
portfolio can be influenced by adjusting between floating-rate and fixed-
rate loans and by using interest rate swaps.
The average interest duration norm based on the Group’s financial policy
is 24 months. The duration can, however, deviate between 6 to 36 months
from the hedging policy norm so that the decision of a larger deviation
has to be made by the Board of Directors. The average duration of loans
was high 30.6 months at the end of the year (36.1). During the reporting
period duration has varied between 31 and 36 months (36–44). Duration
is lengthened by the bond of EUR 250 million. Of interest-bearing liabilities
15 per cent (14) is subjected to variable rates and the rest to fixed rates
and the average interest rate at the end of 2023 is 2.6 per cent (2.2). At the
end of 2023, an increase of one per cent in interest rates would decrease
net interest rate costs of the next 12 months by 1.8 million euros (decrease
2.3).
The Group has applied cash flow hedge accounting to interest rate swaps
by which floating-rate financing has been converted to fixed-rate financing.
The gross nominal volume of interest rate derivative at the time of financial
statements is EUR 50.0 million (100.0) and the interest rate swap matures
in April 2025.
Commodity risk
In the hedging of commodity risks the Group applies risk management
policies defined separately for each selected commodity. According to
the policy, the management of commodity risks with regard to financial
hedges is accomplished centralized by Metsä Group Treasury based on the
strategy approved by Board of Directors of Metsä Board. The commodity
hedging policy is applied to the management of the natural gas, light and
heavy fuel oil and also transactions related to Emission allowances are
managed by Metsä Group Treasury. Hedge accounting has been applied to
108
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
all commodity hedging. According to the commodity hedging policy an 80
per cent hedge level of the estimated net position during the first 12 month
period has been set as a hedging norm and the hedge ratio can vary by 20
per cent in either direction. The Group Board of Directors makes significant
strategic decisions.
Part of Metsä Board’s mills’ purchase of fuel is based on natural gas and
the company is hedging the price risk of natural gas purchases by using
financial hedges. Metsä Board is hedging also the gas oil, heavy fuel oil
and 0.5% fuel oil price risk related to logistics costs (sea freights) based
on commodity risk policy by using financial hedges. Metsä Board is not
hedging its pulp price risk.
Liquidity risk
Liquidity risk is defined as the risk that funds and available funding
become insufficient to meet business needs, or costs that are incurred in
arranging the necessary financing are unreasonable high. Liquidity risk is
monitored by estimating the need for liquidity needs 12 – 24 months ahead
and ensuring that the total liquidity available will cover a main part of this
need. According to the financial policy, the liquidity reserve must at all
times cover 100 per cent of the Group’s liquidity requirement for the first
12 months and 50 – 100 per cent of the following 12 – 24 months liquidity
requirement. The objective is that at the most 20 per cent of the Group’s
loans, including committed credit facilities, are allowed to mature within
the next 12 months and at least 25 per cent of the total debt must have a
maturity in excess of four years. The target is to avoid keeping extra liquid-
ity as liquid funds and instead maintain a liquidity reserve as committed
credit facilities outside the balance sheet.
The cornerstone of liquidity risk management is to manage the Group’s
operative decisions in such a way that targets concerning indebtedness
and sufficient liquidity reserve can be secured in all economic conditions.
Liquidity risk is also managed by diversifying the use of capital and money
markets to decrease dependency on any single financing source and the
optimisation of the maturity structure of loans is also emphasized in finan-
cial decisions. Metsä Board is using short-term working capital financing
related to accounts receivables and accounts payables.
At the end of the financial period, available liquidity was EUR 491.6
million (556.2), consisting of following items: liquid assets and investments
of EUR 291.6 million (356.2), a syndicated credit facility (revolving credit
facility) of EUR 200.0 million (200.0), and other committed credit facilities
of EUR 0.0 million (191.8). Of the liquid assets, EUR 278.4 million consisted
of short-term deposits with Metsä Group Treasury (338.6), and EUR 13.2
million were cash funds and investments (17.6). Other interest-bearing
receivables amounted to EUR 2.5 million (2.3). In addition, Metsä Board’s
liquidity reserve is complemented by Metsä Board commercial paper
program of EUR 200 million signed in December 2023, Metsä Group’s
internal undrawn short-term credit facility of EUR 150.0 million (150.0) and
undrawn pension premium (TyEL) funds of EUR 229.7 million (227.6). At
the end of 2023, the liquidity reserve covers the forecasted financing need
of 2024–2025. 3 per cent (3) of long-term loans and committed facilities
fall due in a 12 month period and 5 per cent (75) have a maturity of over
four years. The average maturity of long-term loans is 3.1 years (4.0). The
share of short-term financing of the Group’s interest bearing liabilities is 4.0
per cent (0.1).
Counterparty risk
Financial instruments carry the risk that the Group may incur losses
should the counterparty be unable to meet its commitments. The Group
is managing this risk by entering into financial transactions only with most
creditworthy counterparties and within pre-determined limits. Cash and
cash equivalents, and other investments have been spread to several
banks, commercial papers of several institutions and money market funds.
During the reporting period, credit risks of financial instruments did not
result in any losses. Counterparty limits have been revised during the year
by taking into account the needs of the company and the view on the finan-
cial position of the used counterparties. Derivatives trading is regulated
by the standardised ISDA contracts made with the counterparties. The
Group has applied expected credit loss model to calculate the impairment
of financial assets.
The Group’s accounts receivable carry a counterparty risk that the
Group may incur losses should the counterparty be unable to meet its
commitments. Credit risk attached to accounts receivable is managed on
the basis of the credit risk management policies approved by operative
management. Accounts receivable performance is followed by Group
Credit Risk Management Team and reported monthly to Customer Credit
& Compliance Committee and operative management. Credit quality
of customers is assessed at regular intervals based on the customers’
financial statements, payment behaviour and credit ratings agencies.
Credit limits are approved according to credit risk management policy with
approval limits of varying values across the Group. Individual credit limits
are reviewed at least annually. Letters of Credits, bank and parent company
guarantees, and Credit insurance are used to mitigate credit risk according
to management decisions. The Customer Credit & Compliance Committee
reviews and sets all major credit limits which are not supported by credit
insurance and / or other security.
Metsä Board implements regular impairment tests for customer
accounts receivables. Credit loss impairment is booked when a customer
enters legal bankruptcy or becomes past due for more than 6 months (180
days) without a valid payment plan or other acceptable reasons. New net
credit loss provisions for the year were 22 thousand euros (2022: 239).
The portion of overdue client receivables of all accounts receivable is at
the time of financial statements 19.0 per cent (7.4), of which 0.2 per cent
(0.0) is overdue between 90 - 180 days and 1.2 per cent (0.4) over 180
days. The specification of doubtful receivables is in the Notes. Expected
credit losses on accounts receivables are calculated by using a provision
matrix. Expected credit loss expense is recognized by applying expected
credit loss percentages based on five-year historic losses on accounts
receivables from external debtors, net of credit insurance outstanding
at period end. The expected credit loss percentage is 0.2 per cent of
receivables (0.2).
The geographical structure of the accounts receivable is diversified
and is reflecting the external sales structure presented in the Segment
information. The top ten largest sources of credit risk exist in USA, Italy,
United Kingdom, Poland, Turkey, Germany, Spain, Sweden, Netherlands
and Hungary (around 70 per cent of total external receivables (67)). The
share of largest individual customer (individual companies or groups of
companies under common ownership) credit risk exposure of Metsä Board
at the end of 2023 represented 9 per cent (7) of total external accounts
receivable. 36 per cent (32) of accounts receivable was owed by ten largest
customer groups (individual companies or groups of companies under
109
common ownership). At the end of 2023, there was around 1.0 per cent
(1.0) shortfall of credit insurance limits beyond usual policy deductibles
and exclusions.
Managing the capital
Terms capital and capital structure are used to describe investments made
in the company by its owners and retained earnings (together equity) and
debt capital (liabilities) as well as the relation between them. In managing
its capital structure, the Group aims at maintaining an efficient capital
structure that ensures the Group’s operational conditions in financial and
capital markets in all circumstances despite the fluctuations typical to the
sector. The company has a credit rating for its long-term financing. Certain
central target values, which correspond to standard requirements set by
financing and capital markets, have been defined for the capital structure.
No target level has been defined for the credit rating. The Group’s capital
structure is regularly assessed by the Group’s Board of Directors and its
Audit Committee.
Metsä Board´s long-term financial target for the comparable return on
capital employed is minimum 12 per cent. According to the company´s
target, the ratio of interest-bearing net liabilities to comparable EBITDA
(last 12 months) is a maximum of 2.5. In 2023 the long-term financial
targets have been kept constant.
Hedging of foreign exchange transaction exposure 31.12.2023
Annual transaction exposure
EUR million USD GBP SEK AUD CAD Other long Other short Total
Transaction exposure, net (mill. currency units) 763 102 -4,969 5 37
Transaction exposure, net (EUR million) 691 117 -448 3 25 5 1,289
Transaction exposure hedging (EUR million) -478 -76 352 -14 -921
Hedging at the end of the year (months) 8.3 7.8 9.4 6.6 8.6
Average hedging in 2023 (months) 7. 9 7.6 10.5 6.6 8.7
Average rate of hedging at the end of the year 1.0898 0.8707 11.6454
Hedging of foreign exchange transaction exposure 31.12.2022
Annual transaction exposure
EUR million USD GBP SEK AUD CAD Other long Other short Total
Transaction exposure, net (mill. currency units) 1,069 96 -5,941 33
Transaction exposure, net (EUR million) 1,003 108 -534 23 9 1,676
Transaction exposure hedging (EUR million) -698 -69 462 -12 -1,242
Hedging at the end of the year (months) 8.4 7.7 10.4 6.6 8.9
Average hedging in 2022 (months) 8.0 7.8 9.8 5.5 8.5
Average rate of hedging at the end of the year 1.0403 0.8709 10.7134
The key ratios describing the capital structure and the capital amounts
used for the calculation of the key ratio were on 31.12.2023 and 31.12.2022
the following.
EUR million 2023 2022
Interest-bearing net liabilities/comparable EBITDA 0.7 0.2
Net gearing ratio, % 7 4
Interest-bearing borrowings 438.1 453.0
./. Liquid funds 291.6 356.2
./.Interest-bearing receivables 2.5 2.3
Net interest bearing liabilities 144.0 94.5
Equity attributable to shareholders
of parent company
1 , 8 97.0 2,082.0
+ Non-controlling interest 155.6 173.2
Total Equity 2,052.6 2,255.2
Financial covenants of external loans
In Group`s certain financial contracts the financial covenants have been set
regarding financial performance and capital structure. Other covenants
in the Group’s loan agreements are customary terms and conditions
including for example a negative pledge, restrictions on major asset dis-
posals, limitations on subsidiary indebtedness, restrictions on changes of
business and mandatory prepayment obligations upon a change of control
of the Group. Metsä Board loan agreements and credit facility agreement
include a financial covenant that is related to net gearing. The Group has
been in compliance with its covenant during the accounting periods 2023
and 2022. In case the company could not meet its obligations as defined
in financial contracts and in order to avoid a breach of contract that could
have an adverse effect on the company’s financial position, it would need to
renegotiate its financial arrangements, payback its loans or get its debtors
to give up their claims to meet these obligations.
REPAYMENT OF
NON-CURRENT
LOANS
EUR million
BREAKDOWN
OF CURRENCY
EXPOSURE
%
USD ................................... 54%
SEK ...................................35%
GBP .....................................9%
Others .................................2%
24 25 26 27 28 29-
300
250
200
150
100
50
0
110
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Hedging of natural gas price risk exposure
Tons 31 Dec 2023 31 Dec 2022
Natural Gas exposure, net 377 315
Natural Gas hedging 211 306
Hedging at the end of the year (%) 56 97
Average price of hedging at the end of the year
(€/tons)
51.09 70.45
Natural Gas price risk is hedged based on defined risk management policy
by financial contracts. Metsä Board position is hedged using TTF financial
contracts.
Hedging of logistics oil price risk exposure
Tons 31 Dec 2023 31 Dec 2022
Oil exposure, net 65,322 56,257
Oil hedging 39,660 49,248
Hedging at the end of the year (%) 61 88
Average price of hedging at the end of the year
(€/tons)
468.84 558.08
Logistic oil price risk is hedged based on defined risk management policy
by financial contracts. Metsä Board logistic oil exposure includes positions
with bunker clause. Metsä Board is hedging gas oil, heavy fuel oil and
marine fuel oil purchases.
Net investments in a foreign entity 31.12.2023
Equity exposure
EUR million USD GBP SEK Others Total
Equity exposure (mill. currency units) 124 4 7,74 5
Equity exposure (EUR million) 112 4 698 3 817
Net investments in a foreign entity 31.12.2022
Equity exposure
EUR million USD GBP SEK Others Total
Equity exposure (mill. currency units) 109 3 7,769
Equity exposure (EUR million) 103 4 699 3 808
Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2023
Loan
amount
(EUR million)
Duration
(months)
Average
interest rate
(%)
Interest rate
sensitivity
1)
(EUR million)
Re-pricing structure of interest rates of loans
1–4/2024 5–8/2024 9–12/2025 2025 2026 2027 >2027
438 30.6 2.6 -1.8 53 7 7 64 14 12 280
Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2022
Loan
amount
(EUR million)
Duration
(months)
Average
interest rate
(%)
Interest rate
sensitivity
1)
(EUR million)
Re-pricing structure of interest rates of loans
1–4/2023 5–8/2023 9–12/2023 2024 2025 2026 >2026
453 36.1 2.2 -2.3 54 8 2 14 63 14 299
1)
Interest rate sensitivity is an estimate of the effect of an interest rate change of one percent in one direction on net interest cost based on year end exposure
111
Market risk sensitivity 2023
Impact on equity exposure and annual transaction exposure
MEUR
Impact on
financial assets
and liabilities
Impact on
net equity of
foreign entities
Impact on annual
transaction expo-
sure (cash flow)
Impact on annual
transaction expo-
sure (cash flow)
incl. hedging
Interest rate risk (100 bp rise in interest rates)
Effect on profit 1.8 2.3
Effect on other change in equity 0.5
Commodity risk (electricity price + 20%)
Effect on profit -8.6 -3.3
Effect on other change in equity 5.3
FX risk (USD - 10%)
Effect on profit 3.9 -69.1 -21.2
Effect on other change in equity 51.3 -11.2
FX risk (GBP - 10%)
Effect on profit 0.1 -11.7 -4.1
Effect on other change in equity 5.8 -0.4
FX risk (SEK - 10%)
Effect on profit -3.1 44.8 9.5
Effect on other change in equity -31.6 -69.8
Market risk sensitivity 2022
Impact on equity exposure and annual transaction exposure
MEUR
Impact on
financial assets
and liabilities
Impact on
net equity of
foreign entities
Impact on annual
transaction expo-
sure (cash flow)
Impact on annual
transaction expo-
sure (cash flow)
incl. hedging
Interest rate risk (100 bp rise in interest rates)
Effect on profit 2.3 3.1
Effect on other change in equity 0.9
Commodity risk (electricity price + 20%)
Effect on profit -17.6 -7.4
Effect on other change in equity 10.2
FX risk (USD - 10%)
Effect on profit 0.1 -100.3 -30.4
Effect on other change in equity 64.9 -10.3
FX risk (GBP - 10%)
Effect on profit 0.1 -10.8 -3.8
Effect on other change in equity 5.3 -0.4
FX risk (SEK - 10%)
Effect on profit -10.0 53.4 7. 3
Effect on other change in equity -38.6 -69.9
Items with + sign = positive effect = increase of assets / decrease of liabilities / increase of cash flow
Items with - sign = negative effect = decrease of assets / increase of liabilities / decrease of cash flow
An entity to required to disclose a sensitivity analysis for each type of
market risk to which the entity is exposed at the reporting date, showing
how profit or loss and equity would have been affected by changes in the
relevant risk variable that were reasonably possible at that date. The Group
has recognised interest rates, electricity prices and foreign exchange rates
as its key market risks and has set 1 per cent interest rate rise, 20 per cent
rise in electricity price and 10 per cent weakening of USD, GBP and SEK
as reasonably possible risk variables. These currencies represent over 97
per cent of Group´s annual transaction exposure. The nature of the market
price risk is relatively linear so that the size of effects of opposite market
price changes do not essentially differ from the presented figures. The
scenarios have been calculated by using regular principles of calculating
market values of financial instruments described in the Group Accounting
policies. Figures at the reporting date reflect quite well the average market
risk conditions throughout the reporting period.
Additionally the Group is presenting figures describing the effects of
the risk variables to its equity exposure and annual transaction exposure
(cash flow) to present a broader picture about market risks of interest
rates, electricity prices and foreign exchange rates. Annual cash flows
are based on estimates, and not not existing commercial contracts. The
weakening of USD and GBP has a negative impact on annual cash flow and
the weakening of SEK has a positive impact. Hedges reduce this impact
depending on hedging strategy. The impact on net equity of foreign entities
is arising from the consolidation of subsidiaries to the Group consolidated
accounts. The rise of electricity price has a negative impact on cash flow.
As according to hedging policy the electricity price risk of the nearest year
has mostly been hedged, the impact including hedges remains minor.
112
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL REVIEW 2023
Cash flows of installments and interest payments of financial liabilities 2023
EUR million 2024 2025 2026 2027 2028 2029– Total
Bonds 249.2 249.2
Loans from financial institutions 11.8 111.5 11.8 11.8 11.8 1 7. 5 176.1
Finance lease liabilities
1)
5.7 3.8 1.8 1.1 0.3 0.7 13.5
Non-current interest-bearing liabilities total 17. 5 115.4 13.6 262.0 12.1 18.3 438.9
Financial liabilities total 17. 5 115.4 13.6 262.0 12.1 18.3 438.9
Financial expenses total 12.5 8.9 7.4 7.3 0.3 0.2 36.5
Financial liabilities and expenses total 30.0 124.3 21.0 269.3 12.4 18.5 475.4
Guarantee agreements 0.2 0.2 1.3 1.6
Derivatives
Currency derivative, liabilities 1,144.3 1,144.3
Currency derivative, receivables -1,168.1 -1,168.1
Interest rate swaps, liabilities 1.3 0.1 1.5
Interest rate swaps, receivables -2.0 -1.0 -3.0
Commodity derivatives, liabilities 4.1 4.1
Commodity derivatives, receicables -0.2 -0.2
Derivatives, net -20.5 -0.9 -21.4
Cash flows of installments and interest payments of financial liabilities 2022
EUR million 2023 2024 2025 2026 2027 2028– Total
Bonds 249.0 249.0
Loans from financial institutions 11.8 11.8 111.3 11.8 11.8 29.3 1 8 7.6
Finance lease liabilities
1)
6.7 4.3 2.8 1.0 0.5 2.0 17. 3
Non-current interest-bearing liabilities total 18.5 16.1 114.0 12.7 261.3 31.3 453.9
Current interest-bearing liabilities 0.4 0.4
Financial liabilities total 18.9 16.1 114.0 12.7 261.3 31.3 454.3
Financial expenses total 9.8 9.7 8.1 7.4 7.3 0.5 42.8
Financial liabilities and expenses total 28.7 25.8 122.2 20.1 268.6 31.7 4 97. 1
Guarantee agreements 0.4 0.1 0.3 1.2 2.1
Derivatives
Currency derivative, liabilities 1,815.3 1,815.3
Currency derivative, receivables -1,823.6 -1,823.6
Interest rate swaps, liabilities -1.7 -1.1 -0.4 -3.1
Commodity derivatives, liabilities 5.0 5.0
Commodity derivatives, receicables -6.7 -6.7
Derivatives, net -11.7 -1.1 -0.4 -13.2
1)
Cash flows from lease liabilities include both debt repayment and financing expense.
The balance sheet value of lease liabilities on was EUR 12.8 million (15.9). The balance sheet value of currency derivative liabilities on was EUR 6.0 million
(31.3) and the value of currency derivative receivables was EUR 29.8 million (25.0).
113
■ 5.7 Classification and fair values of financial assets and liabilities
Classification and fair values of financial assets and liabilities 2023
EUR million Note
Fair value through
profit and loss
Fair value through other
comprehensive income Amortised cost Total carrying amount
Financial assets
Other non-current investments 4.3 1.4 253.0 254.4
Other non-current financial assets 5.3 6.3 6.3
Trade receivables and other receivables 4.5 251.7 251.7
Cash and cash equivalents 5.4 291.6 291.6
Derivative financial instruments 5.7 1.2 30.3 31.5
Total carrying amount 2.6 283.3 549.6 835.5
Total fair value 2.6 283.3 549.6 835.5
Financial liabilities
Non-current interest-bearing financial liabilities 5.3 421.0 421.0
Other non-current financial liabilities 4.7 0.5 0.5
Current interest-bearing financial liabilities 5.5 1 7. 1 1 7. 1
Trade payables and other liabilities 4.7 338.9 338.9
Derivative financial instruments 5.7 0.4 9.8 10.2
Total carrying amount 0.4 9.8 777.5 7 8 7.6
Total fair value 0.4 9.8 7 67. 2 777.3
Classification and fair values of financial assets and liabilities 2022
EUR million Note
Fair value through
profit and loss
Fair value through other
comprehensive income Amortised cost Total carrying amount
Financial assets
Other non-current investments 4.3 1.3 344.1 345.4
Other non-current financial assets 5.3 6.0 6.0
Trade receivables and other receivables 4.5 354.5 354.5
Cash and cash equivalents 5.4 356.2 356.2
Derivative financial instruments 5.7 4.2 39.3 43.4
Total carrying amount 5.5 383.4 716.8 1,105.6
Total fair value 5.5 383.4 716.7 1,105.6
Financial liabilities
Non-current interest-bearing financial liabilities 5.3 434.4 434.4
Other non-current financial liabilities 4.7 2.9 2.9
Current interest-bearing financial liabilities 5.5 18.6 18.6
Trade payables and other liabilities 4.7 444.3 444.3
Derivative financial instruments 5.7 0.7 29.5 30.2
Total carrying amount 0.7 29.5 900.1 930.3
Total fair value 0.7 29.5 879.3 909.5
Trade receivables and other receivables do not include advance payments,
accrued tax receivables and periodisations of employee costs (Note 4.5).
Trade payables and other financial liabilities do not include advance pay-
ments, accrued tax liabilities and periodisations of employee costs (Note
4.7).
In Metsä Board, all interest-bearing liabilities are valued in the balance
sheet at amortised cost based on effective interest method.
Fair values are based on present value of cash flow of each liability or
assets calculated by market rate. The discount rates applied are between
1.9–4.3 per cent (2.2–4.6). The fair values of accounts and other receiva-
bles and trade payables and other liabilities do not materially deviate from
their carrying amounts in the balance sheet.
114
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Fair value hierarchy of financial assets and liabilities
Accounting principles
Financial assets and liabilities measured at fair value have been cate-
gorised as follows:
Level 1 Fair value is based on quoted prices in active markets.
Level 2 Fair value is determined by using valuation techniques
that use observable price information from market.
Level 3 Fair value are not based on observable market data,
but on company’s own assumptions.
The fair value measurement of financial assets at fair value recognised
under other items of comprehensive income is described in Note 4.3.
The fair values of electricity, natural gas and fuel oil derivatives are
determined by using public price quotations in an active market (Level
1).
The fair values of currency forwards and options are determined by
using the market prices of the closing date of the reporting period. The
fair values of interest rate swaps are determined by using the present
value of expected payments, discounted using a risk adjusted discount
rate, supported by market interest rates and other market data of the
closing date of the reporting period (Level 2).
For financial instruments not traded on an active market, the fair
value is determined by valuation techniques. Judgment is used when
choosing the different techniques and making assumptions, which
are mainly based on circumstances prevailing in the markets on each
closing date of the reporting period (Level 3).
Fair value hierarchy of financial assets and liabilities 2023
31 Dec 2023
EUR million Note Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other non-current investments 4.3 254.4 254.4
Derivative financial assets 5.7 0.2 31.4 31.5
Financial liabilities measured at fair value
Derivative financial liabilities 5.7 4.1 6.0 10.2
Financial assets not measured at fair value
Cash and cash equivalents 5.4 291.5 291.5
Financial liabilities not measured at fair value
Non-current interest-bearing financial liabilities 5.5 411.1 411.1
Current interest-bearing financial liabilities 5.5 16.7 16.7
Fair value hierarchy of financial assets and liabilities 2022
31 Dec 2022
EUR million Note Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other non-current investments 4.3 345.4 345.4
Derivative financial assets 5.7 6.7 36.7 43.4
Financial liabilities measured at fair value
Derivative financial liabilities 5.7 5.0 25.2 30.2
Financial assets not measured at fair value
Cash and cash equivalents 5.4 356.2 356.2
Financial liabilities not measured at fair value
Non-current interest-bearing financial liabilities 5.5 413.6 413.6
Current interest-bearing financial liabilities 5.5 18.6 18.6
Other non-current investments measured at fair value based on level 3 valuation
EUR million 2023 2022
Value 1 Jan 345.4 181.0
Total gains and losses in profit and loss 2.8
Total gains and losses in other comprehensive income -91.1 178.5
Purchases 0.0 0.0
Sales 0.0 -16.9
Value Dec 31. 254.4 345.4
115
Financial derivatives and hedge accounting
Accounting principles
Derivative contracts are initially recognised on the balance sheet
at fair value at cost, and thereafter during their term-to-maturity
revalued at their fair value at each reporting date. The fair value
of derivatives is presented in non-interest-bearing receivables or
liabilities. Gains and losses resulting from recognition at fair value are
treated in accounting as required with regard to the intended use of
the derivative contract in question. Derivatives are initially classified
as either
1. Hedges of the exposure to changes in the fair value of receivables,
liabilities or firm commitments;
2. Hedges of the cash flow from a highly probable forecast transaction;
3. Hedges of a net investment in a foreign entity, or
4. Derivatives to which it has been decided not to apply hedge
accounting.
Metsä Board currently applies hedge accounting only to cash flow
hedging. When applying hedge accounting at the inception of a hedg-
ing relationship, the Group has documented the relationship between
the hedged item and the hedging instruments, as well as the hedging
strategy observed. To meet the requirements of hedge accounting,
the Group has also continuously carried out effectiveness testing to
verify that changes in the fair value of the hedging instrument for each
hedging relationship cover any changes in the fair value of the hedged
item effectively enough, with respect to the hedged risk. Changes in
the fair value of the effective portion of derivative instruments that
meet the criteria for cash flow hedging are recognised in other items
of comprehensive income. The gains and losses recognised in equity
are transferred to the income statement when the forecast sale or
purchase is realised, and are recognised as an adjustment to the
hedged item. If the forecast transaction is no longer expected to occur,
the gain or loss accrued in equity is recognised immediately in the
income statement.
Derivatives not subject to hedge accounting, as well as the ineffective
portion of derivatives subject to hedge accounting, are measured at
fair value, and changes in the value of interest rate and currency deriv-
atives are recognised in financial items and changes in the value of
commodity derivatives are recognised in other income and expenses.
Hedge accounting is applied as cash flow hedging to highly probable
cash flows from sales denominated in foreign currencies and
contractual cash flows from floating interest rates of loans. In the
management of price risks related to commodities, hedge accounting
is applied to cash flows from highly probable purchases of electricity,
liquefied natural gas (LNG), natural gas, propane, light, heavy and
0.5% fuel oil. The fair values of forward foreign exchange contracts are
based on the forward prices prevailing on the balance sheet date, and
currency options are measured at fair value in accordance with the
Black–Scholes model. Interest rate swaps are measured at the current
value of cash flows, with the calculation being based on the market
interest rate yield curve. The fair values of derivatives are measured on
the basis of publicly quoted market prices.
Management of financial risks and hedge effectiveness
The management of the Group’s currency, interest rate and com-
modity risks is described in more detail in Note 5.6, Management of
financial risks. Note 5.7., Fair values of financial assets and liabilities,
includes the fair values and grouping of derivatives. Note 5.1, Equity,
includes itemisations of hedge accounting entries in the fair value
reserve.
The hedging of the currency flow position is effective, given that there
is a direct financial relationship between the hedged sale and the
hedging derivative. The spot rate component of a forward contract
or the reference value component of a currency option has been
determined as the hedged item, and the forward points or the option’s
time value are treated as hedging costs subject to amortisation based
on the period. Currency flow forecasts are fairly stable, invoicing
steady within quarters and months, and forward deals are allocated
to each month, due to which the ineffectiveness of hedging usually
remains very low. Changes in production or the structure of sales may
sometimes lead to ineffectiveness during the validity of a hedging
relationship, in which case the hedging is adjusted accordingly.
The hedge accounting of the cash flow from interest rates is primarily
effective, given that there is a direct financial relationship between
the long-term loans subject to hedging and the hedging interest rate
swaps. Ineffectiveness in the hedge relationship derives from any
possible differences between the loans and the swaps’ interest rate
periods as well as from differences in the reference rates of contract
terms. The ineffective portion of interest rate hedging is recognised
through profit and loss. Premature loan withdrawals or premature
repayment of loans may result in a state of ineffectiveness, in which
case the hedging interest rate swaps are reversed or derecognised
from hedge accounting, and the change in fair value is recognised in
financial items under income.
The hedging of commodity purchases is effective, given that, in lieu
of the total purchase price, the hedged item is the same, identical risk
component of pricing applied in the hedging derivative. In the hedging
of the price risk of electricity, the hedged item is what is referred to
as the portion of the system price and the hedging takes place with a
system-priced electricity swap. Correspondingly, the price compo-
nents of the purchases and the hedging derivative in the hedging of
natural gas, propane and fuel oil are identical. Commodity purchases
are fairly steady and hedges are allocated to each month, due to which
the ineffectiveness of the hedging usually remains low. Changes in the
use of various commodities may sometimes lead to ineffectiveness
during the validity of a hedging relationship, in which case the hedging
is adjusted accordingly.
Hedging for electricity, propane and liquefied natural gas (LNG) ended
at the end of 2022.
116
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Derivatives 2023
Nominal value Fair value
EUR million Derivative assets
Derivative
liabilities Fair value net
Fair value
through profit
and loss
Fair value
through other
comprehensive
income
Interest rate swaps 50.0 1.5 1.5 1.5
Interest rate derivatives 50.0 1.5 1.5 1.5
Currency forward contracts 1,138.3 2 7.7 5.7 21.9 0.9 21.0
Currency option contracts 488.7 2.2 0.3 1.9 1.9
Currency derivatives 1,627.0 29.8 6.0 23.8 0.9 22.9
Oil derivatives 18.7 0.2 0.6 -0.5 -0.5
Natural gas and propane derivatives 10.8 3.5 -3.5 -3.5
Commodity derivatives 29.5 0.2 4.1 -4.0 -4.0
Derivatives total 1,706.4 31.5 10.2 21.4 0.9 20.5
Derivatives 2022
Nominal value Fair value
EUR million Derivative assets
Derivative
liabilities Fair value net
Fair value
through profit
and loss
Fair value
through other
comprehensive
income
Interest rate swaps 100.0 3.1 3.1 3.1
Interest rate derivatives 100.0 3.1 3.1 3.1
Currency forward contracts 1,790.1 31.3 25.0 6.3 1.4 4.9
Currency option contracts 281.3 2.2 0.1 2.1 2.1
Currency derivatives 2,071.4 33.5 25.2 8.4 1.4 7.0
Oil derivatives 2 7. 5 0.5 3.9 -3.3 -3.3
Natural gas and propane derivatives 32.7 6.2 1.2 5.0 2.1 2.9
Commodity derivatives 60.2 6.7 5.0 1.7 2.1 -0.4
Derivatives total 2,231.5 43.4 30.2 13.2 3.5 9.7
Changes in the value of hedge accounting and the effects on profit or loss are presented in Note 5.1 Equity.
Economic effect of the net settlement of instruments under master netting agreements executed
2023 2022
Financial
derivatives
on-balance sheet
Assets and
liabilities
related to
master netting
agreements Net risk
Financial
derivatives
on-balance sheet
Assets and
liabilities
related to
master netting
agreements Net risk
Derivative assets 31.5 31.5 43.4 43.4
Derivative liabilities -10.2 -10.2 -30.2 -30.2
Metsä Board enters into derivative contracts only with Metsä Group Treasury Oy.
117
Cash flow hedge maturities 2023
EUR million
1–6
months
7–12
months
1–5
years
over 5
years
Hedged
cash flow total
Interest rate derivatives, hedge accounting 50.0 50.0
Currency rate derivatives, hedge accounting 613.5 200.3 813.8
Currency derivatives, no hedge accounting 79.9 79.9
Commodity derivatives, hedge accounting 14.7 14.7 29.5
Cash flow hedge maturities 2022
EUR million
1–6
months
7–12
months
1–5
years
over 5
years
Hedged
cash flow total
Interest rate derivatives, hedge accounting 50.0 50.0 100.0
Currency rate derivatives, hedge accounting 834.2 230.7 1,064.9
Currency derivatives, no hedge accounting 137. 8 13 7. 8
Commodity derivatives, hedge accounting 30.1 30.1 60.2
118
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
6. Income taxes
Accounting principles
Tax expenses in the income statement consist of taxes based
on the taxable income for the period, taxes for previous periods,
and deferred tax assets and liabilities. The tax effect related to
the items recorded in the comprehensive income statement
is recognised in the comprehensive income statement. Taxes
based on the taxable income for the period are calculated based
on taxable income in accordance with the tax rate as it stands in
each country at that time.
Deferred tax assets and liabilities are calculated on the temporary
differences between the carrying amount and the tax base in
accordance with the tax rates enacted as at the balance sheet
date.
No deferred taxes are recognised for non-deductible goodwill,
and no deferred taxes are recognised for subsidiaries’ undistrib-
uted profits to the extent that the difference will not likely realise
in the predictable future. Deferred tax assets are recognised to
the extent that it is probable that taxable profit will be available
against which a deductible temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred taxes are related to
the same taxation authority.
The most significant temporary differences arise from depre-
ciation of property, plant and equipment; the measurement of
other investments and derivatives contracts at fair value; defined
benefit plans; unused tax losses; and measurement at fair value in
conjunction with acquisitions of business operations.
Key estimates and judgement
The management’s judgement is required for determining the
taxes based on the result for the period, deferred tax assets
and liabilities, and the extent to which deferred tax assets are
recorded. The Group is subject to income taxation in several
countries, and the final amount of tax is uncertain for several
business operations and calculations. The Group anticipates
future tax audits and recognises liabilities based on estimates of
whether further taxes will need to be paid. If the associated final
tax differs from the originally recorded amounts, the difference
has an effect on both the taxes based on the taxable income for
the period, and on deferred tax receivables and liabilities.
EUR million 2023 2022
Income taxes for the financial period -12.8 -36.4
Income taxes from previous periods -0.1 -0.5
Deferred taxes -6.4 -26.7
Income taxes total -19.3 -63.5
Income tax reconciliation
EUR million 2023 2022
Result before tax 120.9 524.9
Calculated tax at Finnish statutory rate of 20.0% -24.2 -105.0
Effects of differences between Finnish and non-Finnish
tax rates
-0.6 -2.4
Tax exempt income 0.5 4.9
Non-deductible expenses -0.2 -0.4
Restatement of deferred taxes recognised for temporary
differences and tax losses in previous years
-0.4 0.0
Use of unrecognised tax losses 0.7
Share of result from associate companies
and joint ventures
4.8 32.6
Income taxes from previous periods -0.1 -0.5
Other 0.2 7. 2
Income taxes total -19.3 -63.5
Effective tax rate, % 16.0 12.1
Taxes for the current period include a 7.1 million euros of tax support to
be applied for in the 2022 taxation of the investments of the Swedish
subsidiary.
Taxes reported in other comprehensive income are specified in Note 5.1.
Developed in the context of the OECD/G20 Inclusive Framework on Base
Erosion and Profit Shifting, Pillar II concerns a global minimum tax rate
on the income of international corporations. The change involves a new
top-up corporate tax, the goal of which is to ensure a minimum tax rate of
15% worldwide. If in any of a group’s countries of operation, the aggregate
effective tax rate, calculated in accordance with the provisions concerning
minimum taxation, remains below 15%, a top-up tax will be imposed to
raise the effective tax rate to 15% The change will apply to financial periods
beginning after 31 December 2023. According to Metsä Board’s current
estimates, the global minimum tax rate under Pillar II will have no impact or
no material impact on the taxes paid by Metsä Board.
119
Deferred tax assets and liabilities 2023
EUR million 1 Jan 2023
Charged to
income statement
Charged to other
comprehensive
income
Translation
differences 31 Dec 2023
Deferred tax assets
Rental agreements 2.3 1.8 0.0 4.1
Pension obligations and provisions 3.5 -0.4 0.2 0.2 3.5
Intercompany margins 8.2 -3.2 -0.2 4.8
Unused tax loss carry-forwards 0.8 28.0 1.0 29.7
Other temporary differences 2.6 1.0 0.2 3.8
Total 17. 3 27. 2 0.2 1.2 45.9
Netting against liabilities -7. 9 -26.8 -1.6 -36.4
Deferred tax assets in balance sheet 9.4 0.4 0.2 -0.4 9.5
Deferred tax liabilities
Rental agreements 2.5 1.4 3.9
Pension obligations 0.1 0.1 -0.1 0.2 0.3
Depreciation differences and appropriations 79.0 31.2 3.9 114.1
Other investments recognised at fair value 62.9 -18.2 44.7
Financial instruments 3.9 -0.2 1.6 0.5 5.9
Other temporary differences 9.0 0.7 -3.1 6.6
Total 1 5 7.4 33.6 -16.7 1.2 175.5
Netting against receivables -7. 9 -26.8 -1.6 -36.4
Deferred tax liabilities in balance sheet 149.5 6.8 -16.7 -0.4 139.2
Deferred tax assets and liabilities 2022
EUR million 1 Jan 2022
Charged to
income statement
Charged to other
comprehensive
income
Translation
differences 31 Dec 2022
Deferred tax assets
Rental agreements 2.5 -0.2 2.3
Pension obligations and provisions 3.8 -0.2 -0.2 0.0 3.5
Intercompany margins 3.4 4.9 -0.2 8.2
Unused tax loss carry-forwards 4.8 -3.9 -0.1 0.8
Other temporary differences 2.1 0.3 0.1 2.6
Total 14.2 1.2 -0.2 -0.1 15.1
Netting against liabilities -8.3 -2.0 2.3 -7. 9
Deferred tax assets in balance sheet 8.4 -1.0 -0.2 2.2 9.4
Deferred tax liabilities
Rental agreements 2.9 -0.4 2.5
Pension obligations 3.3 0.0 -3.0 -0.2 0.1
Depreciation differences and appropriations 62.6 19.1 -2.8 79.0
Other investments recognised at fair value 27. 2 35.7 62.9
Financial instruments 4.8 0.4 -0.5 -0.7 3.9
Other temporary differences 3.7 5.5 -0.1 -0.1 9.0
Total 102.0 27.8 32.1 -6.7 155.2
Netting against receivables -8.3 -2.0 2.3 -7. 9
Deferred tax liabilities in balance sheet 96.2 25.6 32.1 -4.4 149.5
The Group has recognised deferred tax assets related to operating loss carry-forwards for EUR 0.7 million (0.8) in Germany. Management assesses that
taxable profit will be available against which loss carry-forward can be utilised. Taxable loss carry-forwards do not expire.
The taxable loss carry-forwards of business operations, for which deferred tax assets have not been recognised due to uncertainty of amount or
utilisation possibilities, amounted approximately to EUR 93 million (91) in Germany. The unrecognised deferred tax assets for these loss carry forwards is
about EUR 29 million (29). Taxable loss carry-forwards do not expire.
120
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
7. Group structure
■ 7.1 Group companies
Subsidiaries and joint operations 31 December 2023
Metsä Board Oyj’s holdings in Group companies
Country Holding, % Number of shares
Book value
EUR
Holdings in parent company
Metsäliitto Cooperative Finland - 674 892 674,892.00
Subsidiary shares in Finland
Kotimaiset
Metsä Board International Oy Finland 100.00 10,000 23,347,464.13
in other countries
Metsa Board Americas Corporation
1)
USA 99.00 17, 8 2 0 12,209,018.39
Metsä Board Benelux n.v./s.a
1)
Belgium 0.08 2 0.00
Metsä Board Deutschland GmbH Germany 100.00 1 0.00
Metsa Board Ibéria S.A
1)
Spain 1.00 100 1,561.63
Metsä Board Sverige Ab Sweden 100.00 10,000,000 493,721,059.95
Subsidiary shares total 529,279,104.10
Shares and holdings in Group companies 529,953,996.10
1)
TotalGroupholding
Subgroup in Finland
Metsä Board International Oy
Metsä Board Benelux n.v./s.a
1)
Belgium 99.92 2,919 140,001.71
OOO Metsä Board Rus Russia 100.00 1 0.00
Metsä Board France SAS France 100.00 8,211 418,951.75
Metsa Board Ibéria S.A.
1)
Spain 99.00 14 7,7 7 1 155,316.78
Metsa Board Italia S.r.l. Italy 100.00 100,000 1,250,691.84
Metsa Board (Middle East & Africa) Ltd Cyprus 100.00 742,105 214,000.00
Metsä Board Polska Sp. Z o.o. Poland 100.00 232 54,458.58
Metsa Board Singapore Pte Ltd Singapore 100.00 10,000 4,036.51
Metsa Board Singapore Pte Ltd Indian Branch India 100.00 - -
Metsa Board Turkey LLC Turkey 100.00 400 1,201.25
Metsa Board UK Ltd United Kingdom 100.00 2,400 264,172.02
Metsa Board Americas Corporation
1)
USA 1.00 180 4,435.15
Metsa Board Australia and New Zealand Pty Ltd Australia 100.00 1 41,827.54
Total 2,549,093.13
Accounting principles
Subsidiaries
The financial statements include all of the companies controlled by the
Group. Intra-Group shareholding is eliminated using the acquisition
method. Intra-Group business transactions, receivables, liabilities and
unrealised gains, as well as internal distribution of profits, are elimi-
nated on consolidation. Unrealised losses arising from impairment are
not eliminated. When necessary, the accounting principles applied by
subsidiaries have been adjusted to comply with the Group’s principles.
The parent company’s owners’ and non-controlling interests’ shares of
the result for the period and comprehensive income are presented in
the comprehensive income statement. The non-controlling interests’
share of equity is presented as a separate item under equity on the
balance sheet.
Joint operations
A joint operation is a joint arrangement in which parties who have
joint control in the arrangement have rights concerning the assets
related to the arrangement and obligations concerning liabilities. The
Group consolidates its proportion of the assets, liabilities, income and
expenses of the joint operation in its financial statements.
121
Material subsidiaries
Metsä Board has two material subsidiaries:
• Metsä Board Sverige AB
Metsä Board Sverige AB is located in Örnsköldsvik, Sweden. Metsä Board
Sverige AB produces folding boxboard and kraftliner. Metsä Board Sverige
AB’s sales were EUR 396 million (642). The company’s capacity is 250,000
tonnes of liner and 600,000 tonnes of folding boxboard.
• Husum Pulp AB
Husum Pulp AB produces pulp for Metsä Board Sverige Ab and to the
market. The company’s sales were EUR 370 million (560) and capacity
730,000 tonnes of chemical pulp.
Non-controlling interest’s shares
Principal non-controlling interest’s shares
Non-controlling interest
Holding, %
Non-controlling interest
Share of result, EUR million
Non-controlling interest
Share of equity, EUR million
EUR million Country 2023 2022 2023 2022 2023 2022
Husum Pulp AB Sweden 30.0% 30.0% 6.8 51.4 155.6 173.2
Country Holding, % Number of shares
Book value
EUR
Subgroup in other countries
Metsä Board Sverige Ab
Husum Pulp Ab Sweden 70.00 85,664 190,688,553.55
122
CONSOLIDATED FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Accounting principles
Associated companies include all companies over which the
Group has considerable influence but no control. Significant influ-
ence is usually based on a shareholding conferring 20–50 per
cent of the voting rights. A joint venture is a joint arrangement in
which the parties that have joint control of the arrangement have
rights to its net assets. Investments in associates and joint ven-
tures are accounted for using the equity method and are initially
recognized at cost. The Group’s shares in associated companies
and joint ventures also include the goodwill measured at the time
of acquisition, less any impairment.
The Group’s share of the profits or losses of associated compa-
nies and joint ventures is recognised in the income statement as a
separate line item above the operating result in case of associate
company Metsä Fibre and below the operating result in case of
other associate companies. Correspondingly, the Group’s share
of other comprehensive income in associated companies and
joint ventures is recognised in its items of other comprehensive
income. A proportion corresponding to the Group’s shareholding
is eliminated from unrealised profits between the Group and
its associate companies and joint ventures. Unrealised losses
arising from impairment are not eliminated. When necessary,
the accounting principles applied by associated companies and
joint ventures have been adjusted to comply with the Group’s
principles.
Investments in associate companies and joint ventures
EUR million 2023 2022
Value 1 Jan 614.2 479.0
Share of results from associated companies and joint
ventures
Share of result from Metsä Fibre 24.2 163.1
Share of results from other associated companies
and joint ventures
0.0 0.0
Dividends received -82.8 -58.8
Share of other comprehensive income from
associated companies and joint ventures
Fair value reserve 25.4
Translation differences and other changes in equity -5.7 5.6
Investments in associated companies and joint ventures
31 Dec
549.9 614.2
Amounts recognised in income statement
EUR million 2023 2022
Associate companies 24.2 163.1
Amounts recognised in income statement total 24.2 163.1
Amounts recognised in balance sheet
EUR million 2023 2022
Associate companies 549.9 614.2
Amounts recognised in balance sheet total 549.9 614.2
The carrying amount of associated companies at 31 December 2023
includes goodwill of EUR 45.2 million (45.2). None of the associate com-
panies or joint ventures are listed companies. Transactions with associate
companies and joint ventures are detailed in Note 7.3.
Financial information summary of
essential associated companies
According to management’s view, the only essential associated company is
Metsä Fibre Group, which produces chemical pulp and sawn timber. Metsä
Board owns 24.9 per cent of Metsä Fibre. Metsä Board’s parent company,
Metsäliitto Cooperative, owns 50.1 per cent, and Itochu Corporation from
Japan owns 25.0 per cent. Metsä Fibre has operations primarily in Finland,
and its production capacity is approximately 3.3 million tonnes of chemical
pulp. In Addition Metsä Fibre has five sawmills in Finland.
Summarised financial information for Metsä Fibre
Metsä Fibre Group
EUR million 2023 2022
Sales 2,498.6 3,070.7
Result for the period 78.7 664.7
Other comprehensive income -22.9 125.1
Total comprehensive income for the period 55.8 789.8
Dividend received 82.8 58.8
Non-current assets 3,467.3 2,976.9
Current assets 980.9 835.6
Non-current liabilities 1,378.4 781.0
Current liabilities 1,054.3 739.6
Net assets 2,015.5 2,291.8
Reconciliation of financial information for Metsä Fibre to the value
recognised in consolidated balance sheet
EUR million 2023 2022
Group's share of net assets 501.9 570.7
Goodwill 45.2 45.2
Other purchase price allocations at acquisition 4.1 4.6
Other adjustments -1.3 -6.5
Carrying value of associated company in consolidated
balance sheet
549.8 614.0
Metsä Fibre has been consolidated according to equity method based on
its consolidated financial statements prepared under IFRS.
Financial information summary of other than essential associated
companies
EUR million 2023 2022
Share of result from other associated compa-
nies
0.0 0.0
Carrying value in consolidated balance sheet 0.2 0.2
123
■ 7.3 Related party transactions
Related parties include Metsä Board’s ultimate parent company Metsäliitto
Cooperative, which owns 52,0 per cent of Metsä Board’s shares and 68,9
per cent of the voting rights, other subsidiaries of Metsäliitto, associated
companies and joint ventures. The members of the Board of Directors,
Metsä Group’s Executive Management Team and Metsä Board’s Corporate
Management Team as well as their close family members are also included
in related parties.
The management’s salaries, remuneration and pension expenses are
presented in Note 3.2.
The most significant subsidiaries of Metsäliitto, with which Metsä Board
has business transactions, are as follows:
Metsä Tissue Group
Metsä Fibre Group
Metsä Forest Sverige Ab
Metsä Fibre has been consolidated by using equity method according to
Investments in associates standard (IAS 28). Related party transactions
with Metsä Fibre are presented as transactions with sister companies.
Financial operations of the Group have been centralised to Metsä Group
Treasury Oy, which is a wholly-owned subsidiary of Metsäliitto Cooperative
and in charge of managing the Group companies’ financial positions
according to the strategy and financial policy defined by the Group,
providing necessary financial services and acting as a competence center
in financial matters. Financial transactions with Metsä Group Treasury Oy
are carried out at market prices.
The value of wood purchases from Metsäliitto Cooperative was EUR
171.3 million (129.0) and pulp purchases from Metsä Fibre Oy EUR 255.8
million (416.0). The purchases were carried out at market prices.
Metsä Board is participating in the supplementary pension arrangement
of Metsä Group executives. Payments to the arrangement amounted to
EUR 0.5 million in 2023 (0.6).
■ 7.2 Acquisitions and operations disposed of
Accounting principles
Acquired business operations are consolidated from the time
when control is transferred to the Group, and divested operations
are consolidated until the time when control is transferred away-
from the Group.
The consideration paid, including the contingent sales price and
the identifiable assets and liabilities of the acquired business
operations, are measured at fair value at the time of acquisition.
Expenses related to acquisitions are recognised as costs.
Depending on the acquisition, the non-controlling interests’
share in the object of the acquisition is recognised at fair value
or the amount that corresponds to the non-controlling interests’
proportion of the net assets of the object of the acquisition
The amount by which the sum of the consideration paid, the fair
value of the non-controlling interests’ share and the fair value
of the assets previously owned in the object of the acquisition
exceed the fair value of the identifiable net assets is recognised as
goodwill.
Acquired businesses
On 1 January 2022, Metsä Board acquired the entire share capital of
Hämeenkyrön Voima Oy from Pohjolan Voima Oyj (84%) and from DL
Power Oy, part of Leppäkoski group (16%). Hämeenkyrön Voima Oy was
merged to Metsä Board Oyj on 31 July 2022.
Hämeenkyrön Voima Oy
EUR million 2023 2022
Intangible assets 1.3
Property, plant and equipment 29.6
Trade receivables and other receivables 3.2
Cash and cash equivalent 0.9
Total assets 35.0
Deferred tax liabilities 0.0
Financial liabilities, non-current 16.7
Financial liabilities, current 1.3
Trade payables and other liabilities 2.8
Total liabilities 20.8
Net assets 14.2
Acquisitions cost 14.5
Goodwill / Other operating expenses 0.2
Acquisition price -14.5
Cash and cash equivalents in subsidiaries 0.9
Net cash flow arising on acquisitions -13.6
Divested operations
Metsä Board and Euroports signed an agreement on 16 December
2021, according to which Metsä Board Corporation sold the entire share
capital of its fully owned subsidiary Oy Hangö Stevedoring Ab to Euroports
Finland Oy. Transaction was completed on 31 March 2022. The group
recognised a capital gain of EUR 19.2 million and realised a EUR 24.5 million
positive cash flow effect.
124
CONSOLIDATED FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL REVIEW 2023
Transactions with parent company
and sister companies
Transactions with
parent company
Transactions with
sister companies
EUR million 2023 2022 2023 2022
Sales 9.6 24.8 112.3 172.9
Other operating income 5.0 5.4 -3.4 1.2
Purchases 213.4 167.0 460.4 693.9
Share of result from
associated companies
163.1 30.8
Dividend income 0.0 0.0
Interest income 9.4 2.3
Interest expense -0.1 0.0 0.4 0.9
Receivables
Trade receivables
and other receivables
1.6 4.2 49.8 80.4
Cash equivalents 278.4 338.6
Liabilities
Trade payables and
other liabilities
23.8 9.5 46.6 76.8
Transactions with associated companies
and joint ventures
EUR million 2023 2022
Sales 0.5 0.7
Purchases 0.1 4.2
Receivables
Trade receivables and other receivables 0.2 0.1
Metsä Board has classified interest-bearing receivables comparable to
cash funds and available immediately from Metsä Group’s internal bank
Metsä Group Treasury Oy as Cash and cash equivalents.
The receivables from group companies do not include doubtful receiv-
ables, and no bad debt was recognised during the period. No security or
collateral has been provided for group liabilities.
8. Other notes
■ 8.1 Contingent liabilities, assets
and commitments
Key estimates and judgementsa
Disputes and claims
Metsä Board companies have been sellers in several share trans-
actions in recent years. In these divestments, the companies
have issued regular seller’s assurances. Claims presented against
Metsä Board companies and costs incurred by the companies
due to these assurances cannot be ruled out.
Commitments
EUR million 2023 2022
Leases not yet commenced to which the Group is
committed
1.6 1.5
Other commitments 3.8
Total 1.6 5.3
Commitments include granted pledges, mortgages and floating charges as
well as guarantees.
Investment commitments
EUR million 2023 2022
Payments due in following 12 months 69.7 132.0
Payments due later 0.8 1.6
Total 70.5 133.5
Commitments related to property, plant and equipment mainly concern
the development programme of the Kemi mill and an investment to
increase Husum’s folding boxboard capacity.
Other information
Metsä Board has investment grade credit ratings from S&P Global and
Moody’s Investor Service. Metsä Board’s rating by S&P Global is BBB-, with
a stable outlook. The company’s rating by Moody’s is Baa2, with a stable
outlook.
■ 8.2 Events after the financial period
The Group has no events after the financial period.
125
EUR NOTE 1.1.–31.12.2023 1.1.–31.12.2022
Sales 2 1,239,168,327.91 1,572,707,178.40
Change in stocks of finished and unfinished products 3, 4 -59,575,562.56 43,724,591.06
Other operating income
81,035,662.81 91,648,078.56
Materials and services
Materials, consumables and goods
Purchases during the financial period -735,583,407.40 -1,091,988,355.22
Changes in stocks 11,327,074.69 3,368,182.68
External services 5 -204,945,195.88 -255,741,958.55
Employee costs 5 -101,494,562.44 -106,360,648.15
Depreciations and impairment charges 3, 6 -50,438,167.30 -48,392,956.43
Other operating expenses 3, 5 -117,576,834.01 -112,597,632.50
-1,198,711,092.34 -1,611,713,368.17
Operating profit/loss 61,917,335.82 96,366,479.85
Financial income and expenses 7
Income from group companies 103,927,858.98 68,282,404.82
Income from investments in other non-current assets 945.00 323,118.23
Other interest and financial income 301,640.04 37,044.13
Exchange rate differences -5,398,633.64 -24,823,074.91
Interest expenses and other financial expenses -13,215,197.30 -11,243,159.60
85,616,613.08 32,576,332.67
Profit/loss before appropriations and taxes 147,533,948.90 128,942,812.52
Appropriations
Change in depreciation differences 6 -24,354,472.54 -11,697,827.98
Group contribution
Income taxes 8 -7,843,257.95 -5,624,167.05
Profit/loss for the financial period 115,336,218.41 111,620,817.49
Parent company’s financial statements
■ Income statement
Parent company financial statements
126
PARENT COMPANY FINANCIAL STATEMENTS
|
METSÄ BOARD ANNUAL REVIEW 2023
Parent company financial statements
Parent company
■ Balance sheet
EUR Note 31.12.2023 31.12.2022
ASSETS
NON-CURRENT ASSETS
Intangible assets 9
Intangible assets 11,089,921.66 11,360,766.54
Other intangible assets 512,038.25 432,011.17
Advance payment and construction in
progress
8,256,659.20 133,093.84
19,858,619.11 11,925,871.55
Property, plant and equipment 9
Land and water areas 30,046,780.31 26,340,436.42
Buildings and constructions 142,309,889.82 127,095,989.94
Machinery and equipment 259,941,625.99 239,929,037.57
Other tangible assets 6,835,013.27 7,629,729.80
Advance payment and construction in
progress
43,361,374.25 60,459,586.34
482,494,683.64 461,454,780.07
Investments 10
Shares in group companies 529,953,996.10 534,406,191.31
Receivables from group companies 288,654,833.04 290,412,859.87
Shares in associated companies 86,429,409.33 86,429,409.33
Other shares and holdings 253,698,707.84 344,817,070.84
1,158,736,946.31 1,256,065,531.35
Total non-current assets 1,661,090,249.06 1,729,446,182.97
CURRENT ASSETS
Inventories
Materials and consumables 64,903,754.79 53,576,680.10
Finished products 138,086,563.02 197,662,125.58
Advance payments 15,432,257.27
202,990,317.81 266,671,062.95
Receivables from group companies
Receivables from group companies 37,596,485.20 38,878,585.67
37,596,485.20 38,878,585.67
Current receivables 11
Trade receivables 115,699,537.58 156,737,059.46
Receivables from group companies 196,956,199.22 182,648,251.13
Receivables from associated companies 195,710.12 98,183.87
Other receivable 15,553,670.54 23,337,352.03
Prepayments and accrued income 5,097,591.69 41,637,891.74
333,502,709.15 404,458,738.23
Total receivables 371,099,194.35 443,337,323.90
Cash and cash equivalents 10,327,192.96 13,371,673.53
Total current assets 584,416,705.12 723,380,060.38
TOTAL ASSETS 2,245,506,954.18 2,452,826,243.35
EUR Note 31.12.2023 31.12.2022
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 195,273,187.14 259,659,751.43
Profit/loss for previous financial periods 192,906,977.09 287,026,854.12
Profit/loss for the financial period 115,336,218.41 111,620,817.49
1,272,037,404.85 1,426,828,445.25
APPROPRIATIONS
Accumulated depreciation difference 6 200,356,593.10 176,002,120.56
PROVISIONS 13 2,758,948.00 2,729,857.00
LIABILITIES
Non-current liabilities 15
Bonds 249,685,345.02 249,601,391.02
Loans from financial institutions 164,705,882.36 176,470,588.24
Advance payments 7,354,456.51 1,082,432.07
Deferred tax liability 8, 14 48,266,450.66 64,368,909.96
Other liabilities 865,945.59 2,399,500.74
470,878,080.14 493,922,822.03
Current liabilities 16
Pension premium loans 11,764,705.88 11,764,705.88
Advance payments 4,687,512.48 3,756,180.63
Trade payables 122,711,978.74 175,417,664.49
Liabilities to group companies 94,701,965.84 88,896,086.27
Other liabilities 6,832,689.40 7,699,014.97
Accruals and deferred income 58,777,075.75 65,809,346.27
299,475,928.09 353,342,998.51
Total liabilities 770,354,008.23 847,265,820.54
TOTAL SHAREHOLDES' EQUITY
AND LIABILITIES
2,245,506,954.18 2,452,826,243.35
127
EUR 1.1.–31.12.2023 1.1.–31.12.2022
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss before appropriations and taxes 147,533,948.90 128,942,812.52
Adjustments to profit/loss a) -85,927,509.95 -47,715,398.92
Interest received 21,422,500.02 9,472,006.62
Interest paid -12,275,116.16 -10,680,827.37
Dividends received 82,767,207.10 59,142,897.83
Other financial items, net -3,570,452.49 -10,999,779.03
Income taxes paid 29,642,145.48 -49,996,551.31
Change in net working capital b) 79,748,470.25 -109,960,671.71
Net cash flow from operating activities 259,341,193.15 -31,795,511.37
INVESTMENTS
Acquisition of other shares -15,767,840.00
Investments in tangible and intangible assets -87,896,874.00 -78,185,167.01
Proceeds from disposal of shares in affiliated companies, 4,757,354.04 25,241,080.85
Proceeds from other investments 16,878,690.70
Prodeeds from sale of tangible and intangible assets 59,000,151.81 40,771,107.52
Increase and decrease of non-current receivables, net -19,342,971.29
Total cash flow from investing activities -24,139,368.15 -30,405,099.23
CASH FLOW BEFORE FINANCIAL ACTIVITIES 235,201,825.00 -62,200,610.60
Cash flow from financial activities
Acquistion of own shares -7,838,135.79
Dividends paid and other profit distribution -205,740,701.92 -145,782,413.01
Increase in non-current liabilities 60,899,777.40
Payment of non-current interest bearing liabilities -11,764,705.88 -55,889,483.28
Change in other non-current liabilities 4,738,469.29 2,399,500.72
Change in current non-interest bearing liabilities, net 30,000,000.00
Increase or decrease in interest bearing current receivables, net -55,479,374.52 197,037,841.22
Group contribution 391,363.11
Net cash flow arising from financing activities -238,246,305.63 50,827,087.26
CHANGES IN CASH AND CASH EQUIVALENTS -3,044,480.63 -10,982,160.23
Cash and cash equivalents opening balance 13,371,673.53 24,353,833.76
Change in cash and cash equivalents -3,044,480.63 -10,982,160.23
Cash and cash equivalents closing balance 10,327,192.90 13,371,673.53
a) Adjustments to profit/loss
Depreciations and impairment charges 50,438,167.30 48,392,956.43
Financial income and expenses -85,616,613.08 -32,576,332.67
Gains or losses on sale of fixed assets -50,778,155.17 -62,501,763.33
Change in provisions 29,091.00 -1,030,259.35
Total -85,927,509.95 -47,715,398.92
b) Change in net working capital
Inventories 63,680,745.14 -57,800,939.75
Change in current receivables, non-interest bearing 84,830,229.14 -39,982,068.72
Change in current liabilities, non-interest bearing -68,762,504.03 -12,177,663.24
Total 79,748,470.25 -109,960,671.71
Parent company accounts
■ Cash flow statement
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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 finan-
cial income and expenses in the income statement. Exchange rate dif-
ferences 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.
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EUR 2023 2022
2. Sales by region
Finland 71,957,904.99 65,103,945.73
Other EU-countries 634,651,668.85 785,329,475.63
Other European countries 155,584,591.86 221,181,415.75
Other countries 376,974,162.21 501,092,341.29
Total 1,239,168,327.91 1,572,707,178.40
3. Exceptional items
Other operating income
Oy Hangö Stevedoring Ab Proceeds from selling shares 22,955,409.24
Proceeds of selling land 2,707,107.12 6,533,675.05
Encore Ympäristöpalvelut Oy Proceeds of selling shares 4,892,703.24
Merger profit 632,637.88
Environmental reservation 93,187.59
Total 2,707,107.12 35,107,613.00
4. Other operating income
Rental income 1,195,943.71 1,053,865.71
Service revenue 18,372,566.27 16,868,639.19
Gains on disposal 50,797,267.91 62,127,817.78
Government grants and allowances 6,060,823.02 3,214,154.64
Scrap and waste sale 234,025.33 219,922.43
Others 4,375,036.57 8,163,678.81
Total 81,035,662.81 91,648,078.56
5. Operating expenses
External services
Distribution costs 134,631,795.07 178,928,268.89
Other external services 70,313,400.81 76,813,689.66
Total 204,945,195.88 255,741,958.55
Employee costs
Wages and salaries for working hours 61,525,003.31 64,823,548.60
Osakeperusteiset maksut -2,183,679.64 -495,369.86
Social security expenses
Pension expenses 14,621,870.25 15,531,896.13
Other social security expenses 27,531,368.52 26,500,573.28
Total 101,494,562.44 106,360,648.15
Share-based fee arrangement is concerning 31.12.2023 18 persons of mother entity Metsä Board Oyj. From earning period 2021–2023 it is possible to earn total 344,109 (brutto),
from earning period 2022–2024 total 351,398 (brutto)and from earning period 2023–2025 total 359,415 (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 1,227 1,222
Other operating expenses
Rental and other property costs 15,494,361.54 13,469,651.58
Purchases of services 80,399,030.53 73,671,626.62
Losses on disposal of non-current assets 19,112.74 258,692.33
Other expenses
Voluntary social costs 2,454,527.45 4,080,223.14
Fixed energy costs 6,118,227.77 8,938,239.16
Traveling expenses 1,532,327.66 897,984.13
Insurances 3,427,277.87 3,283,249.15
Advertising and marketing expenses 2,755,110.69 1,858,792.58
Others 5,376,857.76 6,139,173.81
Total 117,576,834.01 112,597,632.50
Fees of principal auditor
Audit fees 224,000.00 221,447.49
Auditor's opinions 12,359.30 49,612.51
Total 236,359.30 271,060.00
The principal auditor is KPMG Oy Ab.
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6. Depreciation and impairment charges
Planned depreciation
Intangible rights 961,615.18 754,573.95
Other intangible assets 100,208.89 85,985.10
Buildings and constructions 9,289,313.76 8,496,098.14
Machinery and equipment 38,747,838.08 38,298,727.98
Other tangible assets 819,224.47 757,571.26
Total 49,918,200.38 48,392,956.43
Impairment on tangible and intangible assets
Intangible assets 519,966.92
Total 519,966.92
Total depreciation and impairment 50,438,167.30 48,392,956.43
Change in depreciation difference 24,354,472.54 11,697,827.98
Total depreciation 74,792,639.84 60,090,784.41
Depreciation difference at the beginning of the financial year 176,002,120.56 164,304,292.58
Change in depreciation differences 24,354,472.54 11,697,827.98
Depreciation difference at the end of the financial year 200,356,593.10 176,002,120.56
7. Financial income and expenses
Income from investments in non-current assets
Dividend income
From Group companies 82,806,999.00 58,847,155.62
From others 945.00 323,118.23
Total 82,807,944.00 59,170,273.85
Interest income on investments in non-current assets
From Group companies 16,261,117.45 8,273,801.16
Total 16,261,117.45 8,273,801.16
Total income from non-current assets 99,069,061.45 67,444,075.01
Other interest and financial income
Interest income from Group companies 4,859,742.53 1,161,448.04
Other interest income 301,640.04 36,757.42
Other financial income 286.71
Total 5,161,382.57 1,198,492.17
Exchange rate differences recognised in financial income and expenses
Exchange rate differences on sales -450,166.38 1,127,532.45
Exchange rate differences on purchases -872,017.52 -513,406.61
Exchange rate differences on financing -4,076,449.74 -25,437,200.75
Total -5,398,633.64 -24,823,074.91
Interest and other financial expenses
Interest expenses for the same group companies 1,157,772.68 -794,579.90
Other interest expenses -13,962,089.81 -9,631,591.72
Other financial expenses -410,880.17 -816,987.98
Total interest expenses and other financial expenses -13,215,197.30 -11,243,159.60
Financial income and expenses total 85,616,613.08 32,576,332.67
8. Income taxes
Taxes for the financial year 7,849,008.63 5,596,020.86
Taxes for previous financial years 67.52 -177,905.68
Deferred taxes -5,818.20 206,051.87
7,843,257.95 5,624,167.05
131
EUR 2023 2022
9. Intangible and tangible assets
Intangible rights
Acquisition costs 1.1. 51,304,534.70 111,057,990.95
Increases 8,566,067.13 8,019,339.65
Decreases -9,071,775.42 -68,792,929.00
Transfers between items 8,120.09 1,020,133.10
Acquisition costs 31.12. 50,806,946.50 51,304,534.70
Accumulated depreciation and impairment charges 1.1. -39,943,768.16 -106,192,061.63
Accumulated depreciation of deductions and transfers 1,708,325.42 67,002,867.42
Depreciation and write-downs for the financial period -961,615.18 -754,573.95
Impairments -519,966.92
Accumulated depreciation and impairment 31.12. -39,717,024.84 -39,943,768.16
Book value 31.12. 11,089,921.66 11,360,766.54
Goodwill
Acquisition costs 1.1. 24,970,634.39
Decreases -24,970,634.39
Acquisition costs 31.12.
Accumulated depreciation and impairment charges 1.1. -24,970,634.39
Accumulated depreciation of deductions and transfers 24,970,634.39
Accumulated depreciation and impairment on 31.12.
Book value 31.12.
Other intangible assets
Acquisition costs 1.1. 8,665,493.18 7,846,976.75
Increases 132,558.44 245,460.55
Decreases -8,005.74 -872,084.63
Transfers between items 46,937.50 1,445,140.51
Acquisition costs 31.12. 8,836,983.38 8,665,493.18
Accumulated depreciation and impairment charges 1.1. -8,233,482.01 -7,568,232.07
Accumulated depreciation of deductions and transfers 8,745.77 -579,264.84
Depreciation and write-downs for the financial period -100,208.89 -85,985.10
Accumulated depreciation and impairment 31.12. -8,324,945.13 -8,233,482.01
Book value 31.12. 512,038.25 432,011.17
Advance payments and work in progress
Acquisition costs 1.1. 133,093.84 1,020,133.10
Increases 8,123,565.36 133,093.84
Transfers between items -1,020,133.10
Acquisition costs 31.12. 8,256,659.20 133,093.84
Intangible assets total
Acquisition costs 1.1. 60,103,121.72 144,895,735.19
Increases 16,822,190.93 8,397,894.04
Decreases -9,079,781.16 -94,635,648.02
Transfers between items 55,057.59 1,445,140.51
Acquisition costs 31.12. 67,900,589.08 60,103,121.72
Accumulated depreciation and impairment charges 1.1. -48,177,250.17 -138,730,928.09
Accumulated depreciation of deductions and transfers 1,717,071.19 91,394,236.97
Depreciation and write-downs for the financial year -1,061,824.07 -840,559.05
Impairments -519,966.92
Accumulated depreciation and impairment charges 31.12. -48,041,969.97 -48,177,250.17
Book value 31.12. 19,858,619.11 11,925,871.55
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Land and water areas
Acquisition costs 1.1. 26,340,456.62 29,491,705.78
Increases 4,768,400.00 9,464.00
Decreases -1,062,056.11 -3,164,398.52
Transfers between items 3,685.36
Acquisition costs 31.12. 30,046,800.51 26,340,456.62
Accumulated depreciation and impairment charges 1.1. -20.20 -20.98
Accumulated depreciation of deductions and transfers 0.78
Accumulated depreciation and impairment on 31.12. -20.20 -20.20
Book value 31.12. 30,046,780.31 26,340,436.42
Buildings and constructions
Acquisition costs 1.1. 326,310,652.31 311,087,587.69
Opening balance correction 11,134,125.36
Increases 8,832,311.77 4,330,072.64
Decreases -1,492,068.30 -3,256,608.92
Transfers between items 15,670,901.87 3,015,475.54
Acquisition costs 31.12. 349,321,797.65 326,310,652.31
Accumulated depreciation and impairment charges 1.1. -199,214,662.37 -187,383,727.72
Opening balance correction -4,868,791.86
Accumulated depreciation of deductions and transfers 1,492,068.30 1,533,955.35
Depreciation and write-downs for the financial year -9,289,313.76 -8,496,098.14
Accumulated depreciation and impairment on 31.12. -207,011,907.83 -199,214,662.37
Book value 31.12. 142,309,889.82 127,095,989.94
Machinery and equipment
Acquisition costs 1.1. 1,312,182,737.66 1,281,155,098.82
Opening balance correction 6,979,604.01
Increases 33,111,908.38 34,987,919.86
Decreases -13,461,281.06 -17,313,443.78
Transfers between items 25,708,599.67 6,373,558.75
Acquisition costs 31.12. 1,357,541,964.65 1,312,182,737.66
Accumulated depreciation and impairment charges 1.1. -1,072,253,700.09 -1,044,241,480.62
Opening balance correction -6,744,936.04
Accumulated depreciation of deductions and transfers 13,401,199.51 17,031,444.55
Depreciation and write-downs for the financial year -38,747,838.08 -38,298,727.98
Accumulated depreciation and impairment on 31.12. -1,097,600,338.66 -1,072,253,700.09
Book value 31.12. 259,941,625.99 239,929,037.57
Other tangible assets
Acquisition costs 1.1. 14,657,784.12 14,204,781.97
Increases 24,507.94 1,363,101.25
Decreases -1,296,226.73
Transfers between items 386,127.63
Acquisition costs 31.12. 14,682,292.06 14,657,784.12
Accumulated depreciation and impairment charges 1.1. -7,028,054.32 -7,566,709.79
Accumulated depreciation of deductions and transfers 1,296,226.73
Depreciation and write-downs for the financial year -819,224.47 -757,571.26
Accumulated depreciation and impairment on 31.12. -7,847,278.79 -7,028,054.32
Book value 31.12. 6,835,013.27 7,629,729.80
Advance payments and work in progress
Acquisition costs 1.1. 60,459,586.34 18,957,755.83
Increases 24,337,087.07 51,280,677.79
Decreases 683.00
Transfers between items -41,435,982.16 -9,778,847.28
Acquisition costs 31.12. 43,361,374.25 60,459,586.34
133
EUR 2023 2022
Total property, plant and equipment
Acquisition costs 1.1. 1,739,951,217.05 1,654,896,930.09
Opening balance correction 18,113,729.37
Increases 71,074,215.16 91,971,235.54
Decreases -16,014,722.47 -25,030,677.95
Transfers between items -56,480.62
Acquisition costs 31.12. 1,794,954,229.12 1,739,951,217.05
Accumulated depreciation and impairment charges 1.1. -1,278,496,436.98 -1,239,191,939.11
Opening balance correction -11,613,727.90
Accumulated depreciation of deductions and transfers 14,893,267.81 19,861,627.41
Depreciation and write-downs for the financial year -48,856,376.31 -47,552,397.38
Accumulated depreciation and impairment on 31.12. -1,312,459,545.48 -1,278,496,436.98
Book value 31.12. 482,494,683.64 461,454,780.07
10. Investments
Shares in Group companies
Acquisitions costs 1.1. 534,406,191.31 535,378,815.29
Increases 14,495,216.02
Decreases -4,452,195.21 -15,467,840.00
Acquisitions costs 31.12. 529,953,996.10 534,406,191.31
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. 344,817,070.84 178,311,058.30
Increases 178,492,000.00
Decreases -91,118,000.00 -11,985,987.46
Impairments -363.00
Acquisitions costs 31.12. 253,698,707.84 344,817,070.84
Total invesments and holdings
Acquisitions costs 1.1. 965,652,671.48 800,119,282.92
Increases 192,987,216.02
Decreases -95,570,195.21 -27,453,827.46
Impairments -363.00
Acquisitions costs 31.12. 870,082,113.27 965,652,671.48
Receivables from Group companies
Acquisitions costs 1.1. 290,412,859.87 305,699,997.81
Increases 522,658.70
Decreases -2,280,685.53 -15,287,137.94
Acquisitions costs 31.12. 288,654,833.04 290,412,859.87
Other receivables
Acquisitions costs 1.1. 5,002.00
Decreases -5,002.00
Acquisitions costs 31.12.
Receivables total
Acquisitions costs 1.1. 290,412,859.87 305,704,999.81
Increases 522,658.70
Decreases -2,280,685.53 -15,292,139.94
Acquisitions costs 31.12. 288,654,833.04 290,412,859.87
Investments total
Acquisitions costs 1.1. 1,256,065,531.35 1,105,824,282.73
Increases 522,658.70 192,987,216.02
Decreases -97,850,880.74 -42,745,967.40
Impairments -363.00
Acquisitions costs 31.12. 1,158,736,946.31 1,256,065,531.35
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11. Receivables
Non-current receivables
Receivables from group companies
Loans receivables 36,049,026.68 35,965,401.28
Prepayments and accrued income
Derivatives 1,547,458.52 2,913,184.39
Total 37,596,485.20 38,878,585.67
Total non-current receivables 37,596,485.20 38,878,585.67
Current receivables
Receivables from group companies
Trade receivables 38,105,756.72 72,118,873.10
Loans receivables 123,791,628.35 68,312,253.83
Other receivables 76,184.82 -1,012,541.57
Prepayments and accrued income 34,982,629.33 43,229,665.77
Total 196,956,199.22 182,648,251.13
Receivables from associated companies
Trade receivables 195,710.12 98,183.87
Total 195,710.12 98,183.87
Receivables from others
Trade receivables 115,621,193.18 156,297,636.15
Other receivables 15,632,014.94 23,776,775.34
Prepayments and accrued income 5,097,591.69 41,637,891.74
Total 136,350,799.81 221,712,303.23
Total current receivables 333,502,709.15 404,458,738.23
Accrued income from group companies, current, specification
Derivatives 29,996,045.52 40,510,486.72
Accrued interests 4,975,124.48 2,719,179.05
Others 11,459.33
Total 34,982,629.33 43,229,665.77
Accrued income from others, current, specification
Tax accrual 336,276.00 33,516,269.26
Accrued personnel costs -61,289.56 -40,370.38
Energy and other taxes 3,985,428.55 2,472,676.17
Others 837,176.70 5,689,316.69
Total 5,097,591.69 41,637,891.74
Total receivables 371,099,194.35 443,337,323.90
135
EUR 2023 2022
12. Shareholders’ equity
Restricted equity
Share capital 1.1.
A-shares 51,788,806.85 51,788,806.85
B-shares 506,092,733.55 506,092,733.55
Total 557,881,540.40 557,881,540.40
Share capital 31.12.
A-shares 51,788,806.85 51,788,806.85
B-shares 506,092,733.55 506,092,733.55
Total 557,881,540.40 557,881,540.40
Fair value reserve 1.1. 259,659,751.43 116,464,042.72
Changes -64,386,564.29 143,195,708.71
Fair value reserve 31.12. 195,273,187.14 259,659,751.43
Restricted equity total 753,154,727.54 817,541,291.83
Unrestricted equity
Reserve for invested unrestricted equity 1.1. 210,639,481.81 210,639,481.81
Reserve for invested unrestricted equity 31.12. 210,639,481.81 210,639,481.81
Retained earnings 1.1. 398,647,671.61 440,647,402.92
Acquisition of own shares -7,838,135.78
Dividends -205,740,701.92 -145,782,413.01
Profit for the financial period 115,336,218.41 111,620,817.49
Retained earnings 31.12. 308,243,195.50 398,647,671.61
Unrestricted equity total 518,882,677.31 609,287,153.42
Equity total 31.12 1,272,037,404.85 1,426,828,445.25
Distributable funds
Reserve for invested unrestricted equity 210,639,481.81 210,639,481.81
Profit from previous financial periods 192,906,977.09 287,026,854.12
Profit for the financial period 115,336,218.41 111,620,817.49
Distributable funds 518,882,677.31 609,287,153.42
136
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
EUR 2023 2022
13. Mandatory provisions
Provisions for pension
1.1. 738,948.00 843,168.00
Decrease -104,220.00
31.12. 738,948.00 738,948.00
Provisions for unemployment pension costs
1.1. 172,714.66
Decrease -172,714.66
31.12.
Provisions for environmental obligations
1.1. 1,990,909.00 2,744,233.69
Increase 29,091.00
Decrease -689,228.10
Cancellation of unused provision -64,096.59
31.12. 2,020,000.00 1,990,909.00
Total provisions
1.1. 2,729,857.00 3,760,116.35
Increase 29,091.00
Decrease -966,162.76
Cancellation of unused provision -64,096.59
31.12. 2,758,948.00 2,729,857.00
14. Deferred tax assets and liabilities
Deferred tax assets
Mandatory provisions 551,789.60 545,971.40
Total 551,789.60 545,971.40
Deferred tax liabilities
Valuation of Pohjolan Voima Oyj shares at fair value 44,721,973.05 62,945,573.05
Financial instruments 4,096,267.21 1,969,308.31
Total 48,818,240.26 64,914,881.36
Deferred tax assets (+) and liabilities (-), net -48,266,450.66 -64,368,909.96
The deferred tax liability for accrued depreciation in 2023 was EUR 40.1 million (35.2).
15. Non-current liabilities
Other liabilities
Bonds 249,685,345.02 249,601,391.02
Loans from financial institutions 164,705,882.36 176,470,588.24
Government grants 865,945.59 2,399,500.74
Deferred tax liabilities 48,266,450.66 64,368,909.96
Advance payments 7,354,456.51 1,082,432.07
Total 470,878,080.14 493,922,822.03
Non-current liabilities total 470,878,080.14 493,922,822.03
137
Bond and debentures
Bond Nominal value Interest % 2023 2022
2017–2027 250,000,000.00 2.75 249,685,345.02 249,601,391.02
Metsä Board Corporation issued in September 2017 a bond of EUR 250 million. The bond carries a fixed coupon rate of 2.75 per cent, and the maturity date is 29 September 2027. The
bond ranks senior and is unsecured.
Non-current liabilities and repayment
Liabilities to
group companies Bonds
Loans from
financial
institutions
Other
loans Total
2024
2025 11,764,705.88 11,764,705.88
2026 111,764,705.88 111,764,705.88
2027 249,685,345.02 11,764,705.88 261,450,050.90
2028 11,764,705.88 11,764,705.88
2029– 29,411,764.72 29,411,764.72
Total 249,685,345.02 176,470,588.24 426,155,933.26
EUR 2023 2022
16. Current liabilities
Liabilities from Group companies
Borrowings 30,000,000.00
Trade payables 52,695,613.31 56,142,768.77
Accruals and deferred income 12,006,352.53 32,753,317.50
Total 94,701,965.84 88,896,086.27
Liabilities from other
Return loans from occupational pension insurance institutions 11,764,705.88 11,764,705.88
Advance payment 4,687,512.48 3,756,180.63
Trade payables 122,711,978.74 175,417,664.49
Other liabilities 6,832,689.40 7,699,014.97
Accruals and deferred income 58,777,075.75 65,809,346.27
Total 204,773,962.25 264,446,912.24
Total current liabilities 299,475,928.09 353,342,998.51
Accruals and deferred income to group companies, current, specification
Derivatives 10,164,353.73 30,218,666.25
Others 1,841,998.80 2,534,651.25
Total 12,006,352.53 32,753,317.50
Accruals and deferred income, current, external
Personnel expenses 22,384,791.06 26,666,808.07
Accruals of purchases 11,529,875.20 20,622,684.87
Discounts 14,866,702.16 16,000,244.15
Interests 2,914,301.17 2,275,783.41
Taxes 4,536,157.78 224,929.41
Others 2,545,248.38 18,896.36
Total 58,777,075.75 65,809,346.27
138
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
17. Financial Instruments
Financial derivatives 2023
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 50,000,000.00 1,547,458.52 1,547,458.52 1,547,458.52
Total interest rate derivatives 50,000,000.00 1,547,458.52 1,547,458.52 1,547,458.52
Currency forward agreements 1,138,276,907.69 27,654,017.14 5,735,017.85 21,918,999.29 897,814.21 21,021,185.08
Currency option agreements 488,687,782.86 2,191,276.94 298,456.13 1,892,820.81 1,892,820.81
Currency derivates total 1,626,964,690.55 29,845,294.08 6,033,473.98 23,811,820.10 897,814.21 22,914,005.89
Oil derivatives 18,709,442.40 150,751.44 645,197.37 -494,445.93 -494,445.93
Other commodity derivatives 10,770,062.40 3,485,682.38 -3,485,682.38 -3,485,682.38
Commodity derivatives 29,479,504.80 150,751.44 4,130,879.75 -3,980,128.31 -3,980,128.31
Derivatives total 1,706,444,195.35 31,543,504.04 10,164,353.73 21,379,150.31 897,814.21 20,481,336.10
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 3,147,221.92 3,147,221.92
Total interest rate derivatives 100,000,000.00 3,147,221.92 3,147,221.92 3,147,221.92
Currency forward agreements 1,790,092,903.51 31,341,614.74 25,038,674.98 6,302,939.76 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 2,062,409.43
Currency derivates total 2,071,360,482.73 33,542,000.34 25,176,651.15 8,365,349.19 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 -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 30,218,666.11 13,205,005.00 3,468,140.10 9,736,864.90
All derivative agreements of Metsä Board Oyj have been entered into for hedging purpose, and cash flow hedge accounting has been applied in major part of the agreements. Only the
part of currency derivatives designated as hedges of trade receivables and trade payables is not directed to hedge accounting. Interest rate derivatives are interest rate swaps maturing
in 1–2 years and entered into to hedge the floating rate interest payments. Currency derivatives contracts concluded to hedge currency cash flows mature fully during 2024. 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 2024.
A more detailed description of financial risk management and the principles applied to derivative contracts is included in note 5.6 and 5.7 of the concolidated Group accounts.
139
The fair value hierarchy of financial assets and liabilities 2023
EUR Level 1 Level 2 Level 3 Total
Financial assets at fair value
Other shares and holdings 253,698,707.84 253,698,707.84
Derivative financial assets 150,751.44 31,392,752.60 31,543,504.04
Financial liabilities measured at fair value
Derivative financial liabilities 4,130,879.75 6,033,473.98 10,164,353.73
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 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 2023 2022
For own and for affiliated companies
Guarantees and counter-indemnities 2,069,254.00 2,061,906.00
For affiliated companies
Other commitments 3,759,384.00
Leasing commitments
Payments due in following 12 months 1,793,027.76 2,650,424.63
Payments due later than 1 year 2,411,125.89 5,180,159.98
Total
Guarantees 2,069,254.00 2,061,906.00
Other commitments 3,759,384.00
Leasing commitments 4,204,153.65 7,830,584.61
Total commitments 6,273,407.65 13,651,874.61
Investment commitments
Payments due in following 12 months 45,051,646.28 65,185,625.57
Payments due later than 1 year 833,123.64 1,595,315.50
Total 45,884,769.92 66,780,941.07
19. Shares and holdings
Shares and holdings are presented in Note 7.2. of consolidated financial statements.
140
PARENT COMPANY FINANCIAL STATEMENTS
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METSÄ BOARD ANNUAL REVIEW 2023
Electricity business
Accounting principles
According to the Electricity Market Act, a company operating in the electricity market must separate its electricity business from its other business oper-
ations. Separation means that for each financial period, an income statement and balance sheet must be prepared for the separated electricity business
operations. The Ministry of Trade and Industry’s decree includes more detailed provisions regarding the separation.
■ Balance sheet / Electrical business
EUR 2023 2022
ASSETS
Current assets
Receivables
Current receivables
Accounts receivables 391,157.51 10,404,765.79
Prepayments and accrued income 178,807.66
Cash and cash equivalents 10,298,520.45 13,349,677.26
Total assets 10,868,485.62 23,754,443.05
EQUITY AND LIABILITIES
Equity
Profit/loss for previous financial periods 10,657,362.45 24,550,553.95
Profit/loss for the financial period -440,770.31 -2,638,957.28
Total equity 10,216,592.14 21,911,596.66
Liabilities
Current liabilities
Current non-interest bearing liabilities
Accounts payable 651,893.48 1,842,846.39
Total equity and liabilities 10,868,485.62 23,754,443.05
■ Income statement / Electrical business
EUR 2023 2022
Sales 26,311,781.45 64,916,170.86
Materials and services
Materials, consumables and goods
Purchases during the financial period 27,474,421.14 67,478,642.70
Materials and services, Total -27,474,421.14 -67,478,642.70
Other operating expenses
Other operating expenses 83,132.86 76,485.44
Other operating expenses, total -83,132.86 -76,485.44
Operating profit/loss -1,245,772.55 -2,638,957.28
Financial income and expenses
Other interest and financial income
From Group companies 805,002.24 0.00
Financial income and expenses, Total 805,002.24 0.00
Profit/loss before appropriations and taxes -440,770.31 -2,638,957.28
Profit/loss for the financial period -440,770.31 -2,638,957.28
141
The Board’s proposal to the Annual General Meeting
for the distribution of funds
The distributable funds of the company are EUR 518,882,677.31 of which retained earnings constitute
EUR 192,906,977.09 and profit for the period EUR 115,336,218.41.
The Board of Directors proposes the following to the Annual General Meeting regarding
the distribution of funds:
Dividend of EUR 0.25 per share be paid, or in total 88,702,882.75
To be left in the unrestricted shareholders' equity 430,179,794.56
Distributable funds of the company 518,882,677.31
The Board of Directors proposes that the dividend will be paid on 9 April, 2024.
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 7 February 2024
Ilkka Hämälä Jussi Linnaranta Hannu Anttila
Raija-Leena Hankonen-Nybom Erja Hyrsky Mari Kiviniemi
Jukka Moisio Mikko Mäkimattila Juha Vanhainen
Mika Joukio
CEO
142
AUDITOR’S REPORT
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METSÄ BOARD ANNUAL REVIEW 2023
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,
2023. 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
company’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
responsibilities 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
misstatements and/or possible misstatements that in our opinion are
material for qualitative reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. The
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.
Auditor’s Report
143
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 1,259 million and represent 41
percent of the consolidated total assets.
The group’s business operations are capital intensive with valuation
risk in tangible and intangible assets. 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 using
discounted cash flow model.
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 have tested
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.
Revenue recognition (Refer to note 2.2 to the consolidated financial statements)
The Group’s total revenue EUR 1,942 consist mainly of sales from
produced paper board and pulp products. The Group has several pricing
and discount principles, and incoterms in use.
The revenue is recognized from the sales of goods in the period
during which the control of the delivered products is transferred to the
customer in accordance with the agreed term of delivery.
Due to the significant volume and the risk of revenue recognized to
incorrect period, revenue recognition is determined a key audit matter.
We obtained an understanding of the revenue recognition principles and
practices. We evaluated the appropriateness of the accounting policies
by reference to IFRS standards.
Our audit procedures included testing of the effectiveness of controls
and substantive procedures over revenue transactions and approvals.
Our substantive procedures included revenue cut-off testing and
vouching of sales invoices to received payments.
In addition, we evaluated the appropriateness of the disclosures
relating to revenue recognition principles and notes.
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 394 million at the end of the financial year.
The valuation of inventories involves management estimates in
relation to potentially obsolete inventory, as well as to fluctuations in the
market prices of finished goods.
The valuation of inventories has a significant impact on the profit and
loss account and therefore it is determined as a key audit matter.
We evaluated the appropriateness of the accounting policies by
reference to IFRS standards.
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 stocktaking routines in selected inventory locations during the
financial year.
ERP renewal process
The consolidated financial statement is based on extensive number of
data flows from multiple IT systems. The group has ongoing renewal
process for IT systems, which will take several years to finish. New
finance ERP was implemented at the beginning of the fiscal year, which
is in use alongside with the existing production ERP.
ERP takeover and incoherent system environment causes risks
relating to access and change management, consequently the ERP
renewal process is determined as a key audit matter.
We evaluated the system reconciliations prepared by the management
and independently tested the accuracy of balance sheet migration
relating to financial reporting during the takeover of the new finance
ERP.
As a part of testing the existing and new finance ERP, our audit
procedures focused on the reconciliation and approval controls as well
as on evaluating the administration of access rights.
144
AUDITOR’S REPORT
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METSÄ BOARD ANNUAL REVIEW 2023
Responsibilities of the Board of Directors and
the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for
the preparation of consolidated financial statements that give a true and
fair view in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU, and of financial statements that give a true
and fair view in accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director are also
responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s
and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern
basis of accounting. The financial statements are prepared using the going
concern basis of accounting unless there is an intention to liquidate the
parent company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit
of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with good
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 scepticism
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 concern. 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.
145
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
uninterrupted engagement of 12 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
responsibility 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 8, 2024
KPMG Oy Ab
Kirsi Jantunen
Authorized Public Accountant, KHT
146
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100
80
60
40
20
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SHARES AND SHAREHOLDERS
|
METSÄ BOARD ANNUAL REVIEW 2023
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 2023 was EUR 557,881,540.40.
Metsä Board has two series of shares. At the
end of 2023, 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. In 2023, there were
no share conversions.
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 0.25 per share be paid for the
2023 financial period. The dividend payment, in
total EUR 89 million, corresponds to 94% of the
result for the 2023 financial period.
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 2023.
Impact of change in control
Some of Metsä Board’s shareholder agreements
concerning resource and associated companies
include provisions under which 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 2023 32,802,175 322,710,571
Trading on the Nasdaq Helsinki in 2023 (2022)
Metsä Board’s A share Metsä Board’s B share
Closing price on 31 December, EUR 7.80 (10.15) 7.19 (8.77)
Lowest price, EUR 7.48 (7.66) 6,26 (7.09)
Highest price, EUR 13.05 (10.50) 8,96 (10.49)
Average daily trading volume, no. of shares 2,132 (3,357) 466 223 (347 165)
Total trading volume, no. of shares 535,219 (849,346) 117,021,973 (87,832,699)
Market capitalisation, EUR million 256 (333) 2,320 (2,829)
Share price development 2023
EUR Million shares
Metsä Board A
Metsä Board B
Trading volume
Source: Euroland https://www.metsagroup.com/metsaboard/investors/share-tools/share-monitor/
15.0
13.0
11.0
9.0
7.0
5.0
5.0
4.0
3.0
2.0
1.0
0.0
Shares and shareholders
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, %
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.
147
Major shareholders, 31 December 2023
1) 2)
A series B series Total shares Votes
Shareholders No. of shares No. of shares No. of shares % %
1 Metsäliitto Cooperative 25,767,605 158,502,147 184,269,752 51.83 68.85
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 1,243,635 8,520,989 9,764,624 2.75 3.41
4 Etola Erkki Olavi 0 5,500,000 5,500,000 1.55 0.56
5 Elo Mutual Pension Insurance Company 0 5,291,000 5,291,000 1.49 0.54
6 The State Pension Fund 0 3,400,000 3,400,000 0.96 0.35
7 Evli Finnish Small Cap Fund 0 2,471,196 2,471,196 0.7 0.25
8 OP-Finland 0 2,012,887 2,012,887 0.57 0.21
9 Säästöpankki Small Cap Mutual Fund 0 1,454,211 1,454,211 0.41 0.15
10 OP-Henkivakuutus Ltd. 0 1,370,300 1,370,300 0.39 0.14
11 Etola Markus Eeriki 0 1,250,000 1,250,000 0.35 0.13
12 Etola Mikael Kristian 0 1,120,000 1,120,000 0.32 0.11
13 Danske Invest Finnish Equity Fund 0 1,078,362 1,078,362 0.3 0.11
14 OP-Finland Small Firms Fund 0 1,026,860 1,026,860 0.29 0.1
15 Säästöpankki Kotimaa Mutual Fund 0 957,600 957,600 0.27 0.1
16 Aktia Capital Mutual Fund 0 854,841 854,841 0.24 0.09
17 Arpera Oy 0 822,855 822,855 0.23 0.08
18 S-Stock Oy 0 822,855 822,855 0.23 0.08
19 Maa- ja Metsätaloustuottajain Keskusliitto MTK ry 576,543 201,852 778,395 0.22 1.2
20 Laakkonen Mikko Kalervo 0 750,000 750,000 0.21 0.08
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 2,290 21.7 11,987 0.04 4,736 7.58 28,866 0.01
11–100 4,277 40.53 212,336 0.65 17,7 15 28.34 927,054 0.29
101–1,000 3,463 32.82 1,239,299 3.78 28,644 45.83 11,368,565 3.52
1,001–10,000 497 4.71 1,153,058 3.52 10,390 16.62 28,653,858 8.88
10,001–100,000 21 0.2 394,168 1.2 919 1.47 20,426,142 6.33
100,001– 4 0.04 29,791,327 90.82 97 0.16 261,306,086 80.97
Total 10,552 100.00 32,802,175 100.00 62,501 100.00 322,710,571 100.00
Split of shareholdings and voting rights, 31 December 2023
SPLIT OF
SHAREHOLDINGS
%
SPLIT OF
VOTING RIGHTS
%
Metsäliitto Cooperative .....52
Finnish institutions .............. 19
Finnish private investors ... 20
Foreign owners* ....................9
Metsäliitto Cooperative ..... 69
Finnish institutions .............. 15
Finnish private investors ..... 12
Foreign owners* ....................4
* includes nominee registered * includes nominee registered
148
SHARES AND SHAREHOLDERS
|
METSÄ BOARD ANNUAL REVIEW 2023
Shareholdings of the members of the Board of Directors
and CEO on 31 December 2023
Holding
Ilkka Hämälä Chair of the Board of Directors 294,814 B shares
Jussi Linnaranta Vice Chair of the Board of Directors 36,211 B shares
Hannu Anttila Member of the Board of Directors 152,627 B shares
Raija-Leena Hankonen-Nybom Member of the Board of Directors 13,131 B shares
Erja Hyrsky Member of the Board of Directors 14,508 B shares
Mari Kiviniemi Member of the Board of Directors 8,685 B shares
Jukka Moisio Member of the Board of Directors 17,283 B shares
Mikko Mäkimattila Member of the Board of Directors 5,052 B shares
Juha Vanhainen Member of the Board of Directors 9,460 B shares
Mika Joukio CEO 315,173 B shares
Share holdings of the Corporate Management Team members are presented on pages 168–169.
149
Price development and number of shares
2023 2022 2021 2019 2018
Adjusted share prices, EUR
A share high 13.05 10.50 11.00 8.80 7.98
low 7.4 8 7.6 6 8.50 4.80 5.46
closing 7.8 0 10.15 9.38 8.64 6.14
average 10.06 9.48 9.48 6.88 6.56
B share high 13.05 10.49 11.01 8.79 6.65
low 7.4 8 7.0 9 7.50 4.47 3.86
closing 7.8 0 8.77 8.61 8.62 6.00
average 10.06 8.73 9.14 6.12 5.26
Trading volume at Nasdaq Helsinki, number of shares
A share 535,219 849,346 1,802,589 1,758,683 694,519
% of total number of shares 1.6 2.6 5.5 5.3 2.1
B share 117,021,973 87,832,699 98,057,575 155,232,570 220,170,829
% of average number of shares 36.3 2 7. 2 30.4 48.1 68.3
Number of shares at year end
A share 32,802,175 32,802,175 32,802,175 32,887,151 33,087,647
B share 322,710,571 322,710,571 322,710,571 322,625,595 322,425,099
Total 355,512,746 355,512,746 355,512,746 355,512,746 355,512,746
Number of shares at year end 354,750,822 355,359,331 355,512,746 355,512,746 355,512,746
Market capitalisation at year end, EUR million 2,576.1 3,161.5 3,086.2 3,065.2 2,136.1
Number of shareholders, B shares 62,501 56,887 54,904 48,165 50,420
Key figures
EUR million 2023 2022 2021 2019 2018
Earnings per share
Result before tax 120.9 524.9 365.8 212.3 165.6
– Income taxes -19.3 -63.5 -51.8 -42.2 -21.0
= Result for the period 101.6 461.4 314.0 170.1 144.6
– Average number of shares 354,750,822 355,359,331 355,512,746 355,512,746 355,512,746
Earnings per share, basic and diluted, EUR 0.27 1.15 0.82 0.48 0.41
Shareholders’ equity per share, EUR 5.35 5.86 4.78 3.89 3.76
Dividend per share, EUR 0.25
1)
0.58 0.41 0.26 0.24
Payout ratio, % 93.5 50.4 49.9 54.3 58.5
Metsä Board shares have no nominal value.
Dividend yield, % of closing price
A share 3.2
1)
5.7 4.4 3.0 3.9
B share 3.5
1)
6.6 4.8 3.0 4.0
Price/earning ratio (P/E ratio)
A share 29.2 8.8 11.4 18.1 15.0
B share 26.9 7.6 10.5 18.0 14.6
Price to book value (P/BV), %
A share 145.9 173.2 196.2 222.0 163.3
B share 134.5 149.6 180.1 221.5 159.6
1)
The Board of Directors has proposed that a dividend of EUR 0.25 per share be distributed for the 2023 financial year.
150
SHARES AND SHAREHOLDERS
|
METSÄ BOARD ANNUAL REVIEW 2023
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Income statement, eur million
Sales 1,942 2,479 2,084 1,890 1,932 1,944 1,849 1,720 2,008 2,008
- change, % -21.7 19.0 10.3 -2.2 -0.1 5.2 7. 5 -14.3 -0.0 -0.5
EBITDA, comparable 216 603 472 316 279 344 289 231 283 236
- % of sales 11.1 24.3 22.7 16.7 14.4 17.7 15.6 13.4 14.1 11.8
Operating result 121 532 376 227 181 246 207 132 199 117
Operating result, comparable 122 521 387 221 184 252 193 137 180 137
- % of sales 6.3 21.0 18.6 11.7 9.5 13.0 10.5 8.0 9.0 6.8
Result for the period 102 461 314 170 145 203 150 90 137 69
Balance sheet, eur million
Balance sheet total 3,055 3,403 2,922 2,302 2,270 2,284 2,226 2,194 2,220 2,149
Equity attributable to shareholders of parent company 1,897 2,082 1,699 1,384 1,338 1,323 1,167 1,052 1,029 841
Interest bearing net liabilities -144 -94 -78 236 308 335 358 464 333 427
Key figures per share and distribution equity owners
of the parent company
Dividend and equity distribution, EUR million 88.7
1)
205.6 145.8 92.4 85.3 103.1 74.7 67. 5 60.4 39.4
Dividend and equity distribution per share, EUR 0.27
1)
0.58 0.41 0.26 0.24 0.29 0.21 0.19 0.17 0.12
Payout ratio including equity distribution, % 93.5
1)
50.4 49.9 54.31 58.5 50.9 50.0 76.0 43.6 57. 1
Dividend yield, % 3.5
1)
6.6 4.8 3.0 4.0 5.7 2.9 2.8 2.5 2.7
Key figures – profitability
Return on capital employed (ROCE), comparable, % 5.1 20.9 18.7 12.2 10.4 14.4 11.2 8.1 11.3 9.1
Return on equity, comparable, % 4.8 22.0 20.2 12.1 11.0 16.7 12.4 9.0 12.9 10.4
Key figures – balance sheet and financing
Interest bearing net liabilities / EBITDA, comparable 0.7 0.2 -0.2 0.7 1.1 1.0 1.2 2.0 1.2 1.8
Equity ratio, % 67. 5 66.4 63.3 60.3 59.1 58.1 52.6 48.2 46.5 39.2
Net gearing, % 7 4 -4 17 23 25 31 44 32 51
Net cash flow from operations, EUR million 343 232 330 308 201 151 236 77 247 198
Net interest expense, EUR million 12 5 8 12 14 19 36 26 26 42
Interest cover 28.6 50.7 42.7 2 7.6 15.4 9.0 7.6 4.0 10.4 5.7
Other key figures
Total investments, EUR million 229 304 220 166 99 70 65 162 178 44
Depreciation, amortisation and impairment losses, EUR
million
94 83 90 95 114 92 92 102 104 126
R & D expenditure, EUR million
2)
7 6 6 9 9 6 6 6 8 6
- % of sales 0.4 0.2 0.3 0.5 0.4 0.3 0.3 0.4 0.4 0.3
Personnel, average 2,333 2,352 2,461 2,455 2,433 2,435 2,456 2,588 2,851 3,200
- in Finland 1,303 1,340 1,490 1,486 1,458 1,433 1,441 1,552 1,538 1,542
Paperboard deliveries, 1,000 t 1,373 1,817 1,922 1,810 1,791 1,830 1,803 1,568 1,404 1,256
Dividend and key figures per share for year 2014 have been issue-adjusted. The rights issue factor was 1.030627.
1)
The Board of Directors has proposed that a dividend of EUR 0.25 per share be distributed for the 2023 financial year. Dividend yield for 2023 has been calculated including the proposed equity
distribution and using the B share closing price as of 31 December 2023.
2)
The reporting of research and development expenses has been clarified and the figures for 2019–2023 are comparable.
Calculation of key ratios is presented on page 155.
Ten years in figures
151
Metsä Board’s business generates taxes that 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 complying with international transfer
pricing guidelines and local tax laws and regulations in all its operating
countries. In accordance with the arm’s length principle, majority of
taxable income and corporate income taxes to be paid are allocated to the
countries where the Group’s most significant operations are located.
In accordance with its tax policy, Metsä Board’s business models and
legal structures must always be based on business reasons and real
business substance. Metsä Board will refrain from artificial ways to reduce
its taxes.
Taxes
Metsä Board’s cooperation with tax authorities is transparent and active.
In Finland, Metsä Board participates in enhanced cooperation with Finnish
Tax Administration.
Tax matters are managed by Metsä Board’s tax function and taxes are in
the scope of regular follow-up of Audit Committee of the Board of Directors
of Metsä Board.
In order to increase the transparency of its tax matters, we voluntarily
publish information on taxes and tax-like payments imposed on Group
companies in our tax footprint.
Metsä Fibre’s share of result
Metsä Board’s consolidated result includes associated company Metsä
Fibre’s result share (24.9% ownership). Metsä Fibre pays corporate income
taxes on its own results and Metsä Board consolidates the result share on
post-tax basis.
Paid taxes
Finland Sweden Other countries Total
EUR million 2023 2022 2023 2022 2023 2022 2023 2022
Corporate income taxes 8.3 5.7 0 26.7 4.7 4.5 13 36.9
Payroll related taxes and contributions 2 7. 9 29.4 14.7 14.5 3.6 4.1 46.3 47. 9
Operational taxes 2.2 4.1 2.4 6.2 0 0 4.7 10.4
Other taxes 0.5 0.6 0 0 0.2 0.2 0.6 0.8
Total 38.9 39.8 17. 2 47. 5 8.6 8.7 64.6 96.0
152
PRODUCTION CAPACITIES
|
METSÄ BOARD ANNUAL REVIEW 2023
Production capacities
Metsä Board’s 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 1 465,000 465,000
Husum Sweden 2 600,000 250,000 850,000
Total 8 1,560,000 715,000 2,275,000
Metsä Board’s 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
Kemi Finland 180,000 180,000
Total 910,000 750,000 1,660,000
Metsä Fibre’s pulp mills
1)
Tonnes Country Chemical pulp Total
Äänekoski Finland 1,300,000 1,300,000
Kemi Finland 1,500,000
2)
1,500,000
2)
Rauma Finland 650,000 650,000
Joutseno Finland 690,000 690,000
Total
2)
4,140,000
2)
4,140,000
2)
1) Metsä Board owns 24.9% of Metsä Fibre
2) The capacity includes production capacity of unbleached pulp, 180,000 t/y, owned by Metsä Board.
Production capacities
153
Quarterly data
Full year Quarterly
EUR million 2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Sales 1,941.9 2,479.6 422.6 479.0 498.2 542.1 599.8 647.3 650.5 582.0
2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Operating result, comparable 122.2 520.7 0.7 5.5 27. 3 88.7 100.8 152.5 145.9 121.5
2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Operating result 120.8 531.5 -0.2 3.1 29.5 88.4 94.7 153.4 142.6 140.7
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 2.6 -5.0 1.8 2.1 -0.6 -0.8 -1.8 -0.5 -2.3 -0.4
Other financial income and expenses -2.5 -1.7 -0.2 -1.0 -1.5 0.2 0.5 -0.6 -0.3 -1.2
Result before tax 120.9 524.9 1.4 4.3 27. 5 87.7 93.4 152.4 140.0 139.1
2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Operating result, % of sales 6.3 21.4 0.2 1.1 5.5 16.4 15.8 23.7 21.9 24.2
Full year Quarterly
1,000 t 2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Deliveries
Folding boxboard 1,373 1,208 299 340 353 380 285 308 308 307
White kraftliner 906 609 188 228 235 255 133 146 164 166
Metsä Fibre’s pulp
1)
467 503 111 112 118 126 105 124 152 122
Metsä Board’s pulp 684 717 120 107 83 83 162 177 192 187
2023 2022 IV/2023 III/2023 II/2023 I/2023 IV/2022 III/2022 II/2022 I/2022
Production
Folding boxboard 1,289.4 1,272 280.0 307.2 331.6 370.5 264 337 336 335
White kraftliner 516,0 605 104.1 132.0 136.6 143.3 133 147 164 162
Metsä Fibre’s pulp
1)
136.5 1,409 38.6 39.7 30.0 28.2 319 360 362 368
Metsä Board’s pulp 1,941.9 731 422.6 479.0 498.2 542.1 190 190 171 181
1)
Corresponds to Metsä Board’s ownership of 24.9 per cent in Metsä Fibre.
154
KEY FIGURES
|
METSÄ BOARD ANNUAL REVIEW 2023
Calculation of key ratios
Key figures
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.
155
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 2023 2022
Operating result 120.8 531.5
Depreciation, amortisation and impairment charges 93.8 83.1
EBITDA 214.6 614.6
Items affecting comparability
Other operating income -2.7 -28.6
Employee costs 4.6
Share of results of associated companies 4.1 11.6
Other operating expense 0.6
Total 1.4 -11.7
EBITDA, comparable 216.0 602.8
Depreciation, amortisation and impairment charges -93.8 -83.1
Items affecting comparability
Impairment charges and reversals of impairments 0.9
Operating result, comparable 122.2 520.7
Share of results of associated companies and joint
ventures
Net financial items 0.1 -6.6
Items affecting comparability
Financial items 0.3 0.5
Result before income tax, comparable 122.6 514.6
Income taxes -19.3 -63.5
Income taxes related to items affecting comparability 0.5 0.3
Result for the period, comparable 103.8 451.4
"+" sign items = expense affecting comparability
"-" sign items = income affecting comparability
Items affecting operating result comparability in 2023 totalled EUR -1.4 mil-
lion. They comprised Metsä Board’s capital gains of EUR 2.7 million from
the sale of a land area unrelated to business operations, and items related
to the business of the associated company Metsä Fibre: A write-down
related to the closure of the old Kemi pulp mill; translation differences from
discontinued operations in Russia; the loss on sale of fixed asset items, and
other items, totalling EUR -4.1 million.
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 Stevedoring Ab; 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 management; 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.
156
CORPORATE GOVERNANCE STATEMENT
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METSÄ BOARD ANNUAL REVIEW 2023
Corporate governance statement
■ Introduction
This Corporate Governance Statement of Metsä
Board Corporation (“Metsä Board” or the
“Company”) has been prepared in accordance
with the Finnish Corporate Governance Code
2020 (the “Corporate Governance Code”),
published by the Finnish Securities Market
Association, and has been issued separately
from the Report of the Board of Directors and
published simultaneously with the Compa-
ny’s financial statements and the Board of
Directors’ Report. The Corporate Governance
Code is available at https://cgfinland.fi/en/
corporate-governance-code/.
Metsä Board is a Finnish public limited com-
pany whose A and B series shares are publicly
traded on the official list of NASDAQ Helsinki
Ltd (Helsinki Stock Exchange). The governance
of Metsä Board is based on, in particular, the
Finnish Limited Liability Companies Act (“Com-
panies Act”), the Company’s Articles of Associ-
ation and regulations issued under the Finnish
laws, the rules and recommendations of Helsinki
Stock Exchange applicable to listed companies,
as well as the regulations and guidelines issued
by the Finnish Financial Supervisory Authority.
Metsä Board complies with the Corporate
Governance Code and does not currently deviate
from any specific recommendations of the Code.
This Statement has been reviewed by the
Audit Committee of the Board of Directors. The
Company’s auditor has verified that this State-
ment has been issued, and that the description
of the main features of the internal control and
risk management systems relating to the finan-
cial reporting process contained in the report is
consistent with the financial statements.
■ Corporate governance in
Metsä Board
The Company’s statutory bodies are the General
Meeting, the Board of Directors and the CEO,
whose duties and responsibilities are deter-
mined in accordance with the Companies Act.
The coordination of the Company’s operations
and operational management is also ensured by
a Management Team assisting the CEO, whose
members (including the CEO) are not members
of the Board of Directors.
General Meeting
The General Meeting is the highest decision-
making body, at which shareholders exercise
their decision-making power. Each shareholder
has the right to participate in the General
Meeting by following the procedure described in
the notice of the General Meeting. The General
Meeting decides on the matters that fall within
METSÄ BOARD’S GOVERNANCE MODEL
FINANCIAL REPORTING
SUSTAINABILITY REPORTING
Internal auditing | Auditing
SHAREHOLDERS’ MEETING
BOARD OF DIRECTORS
BOARD COMMITTEES
Audit
Committee
Nomination and HR
Committee
CEO
Corporate Management Team
the competence of General Meeting under the
Companies Act and the Articles of Association,
such as:
• approval of the financial statements;
• distribution of profits;
• granting discharge to the members of the
Board of Directors and the CEO;
• election of the members of the Board of
Directors and the remuneration of the
members of the Board of Directors;
• advisory approval of the remuneration policy
and the remuneration report;
• the appointment and remuneration of the
auditor and the sustainability auditor;
• other matters proposed to the General
Meeting.
A shareholder has the right to have a matter
before the General Meeting of Shareholders if
they request the Board of Directors in writing
in sufficient time to allow the matter to be
included in the notice of the meeting. In 2024,
the deadline was 12 January 2024. The Annual
General Meeting of the Company is held no later
than June each year. The notice of the Annual
General Meeting shall be given no earlier than
three months and no later than three weeks
before the meeting, but at least nine (9) days
before the record date of the Annual General
Meeting, by means of a stock exchange release
and publication on the Company’s website and
in full or in summary in at least one newspaper
published in Finland.
An Extraordinary General Meeting will
convene if the Board of Directors considers
it necessary, or if the auditor or shareholders
representing at least 10% of all shares request it
in writing to deal with a specific matter.
Board of Directors
The duties of Metsä Board’s Board of Directors
are determined in accordance with the Finnish
Limited Liability Companies Act, the Company’s
Articles of Association and the written rules of
procedure approved by the Board of Directors.
Metsä Board’s Board of Directors is responsible
for the management of the Company and the
proper organisation of its operations. The Board
of Directors is responsible for the proper organ-
isation of the Company’s financial management
and accounting control. The Board is also
Corporate governance statement
157
responsible for the direction and supervision
of Metsä Board Group. Taking into account the
scope and nature of the Company’s activities,
the Board of Directors is responsible for matters
that are economically, commercially or princi-
pally significant and far-reaching and thus not
part of the day-to-day management of the busi-
ness. Among other things, the Board decides
on the Company’s strategy, major investments,
organisational structure and important financial
matters. The Board of Directors ensures that the
Company operates responsibly and takes the
interests of the Company’s other stakeholders,
as well as the collective interests of sharehold-
ers, into account.
Metsä Board’s Board of Directors has written
rules of procedure for its activities. Accordingly,
the Board of Directors shall, among other things:
• nominate and dismiss the CEO and the
deputy CEO and decide on the CEO’s terms of
engagement;
• organise the Company’s accounting, financial
and risk management, and the supervision
of the financial and sustainability reporting
process, as well as analyse the risks that are
the most significant for the group;
• supervise the CEO’s management of the
Company’s operative management in line
with the Board’s instructions and orders;
• adopt the Company’s values and the Board’s
diversity policy;
• monitor and guide the Company’s contribu-
tion to sustainable development;
• review and adopt the Company’s long-term
action plan, strategy, annual action plan and
budget;
• decide on significant investments, corporate
transactions, and take decisions on acquisi-
tions, mergers, divestments and closures of
business operations;
• decide on significant financing arrange-
ments, including debt financing, the provision
of securities and subsidiary capitalisation;
• decide on the assignment or pledging as
securities of the Company’s significant fixed
assets;
• decide on the granting of donations to the
extent that they do not fall within the compe-
tence of the General Meeting;
• decide on the delegation of its powers,
subject to express limits of approval and rules
of delegation, and the granting and revoking
of representation rights;
• convene an Annual General Meeting and
supervise the implementation of resolutions
it passes;
• sign and present to the Annual General
Meeting the financial statements and the
Board of Directors’ annual review, including
the sustainability statement, and prepare a
proposal for dividend distribution;
• approve and publish a financial statement
bulletin, half-year financial report and interim
reports for each quarter;
• adopt the key policies guiding the Company’s
business operations; insider guidelines and
disclosure policy governing communications,
and supervise their application;
• decide on remuneration schemes, their
criteria and conditions, as well as monitor
their implementation.
The Board of Directors’ rules of procedure are
available in their entirety on the Company’s
website at https://www.metsagroup.com/glo-
balassets/metsa-board/documents/investors/
corporate-governance/en/general/metsa-board-
board-working-order.pdf. The Board of Directors
may delegate within its general competence to
the CEO and, conversely, may take a decision on
a matter within the general competence of the
CEO.
On an annual basis, the Board of Directors
assesses its own operation and the Company’s
corporate governance principles and makes any
necessary changes to them.
Composition, diversity and
independence of the Board of Directors
The composition and number of members of
the Board of Directors must enable it to carry
out its duties effectively. The composition of the
Board of Directors takes into account the stage
of development of the Company, the ownership
base, the specific requirements of the industry
and the needs of the Company’s operations. The
Board’s objective is to create a diverse Board,
but with the proviso that those elected to the
Board must have the necessary qualifications
and be able to devote the time required to
perform their duties. The Board of Directors is
composed of female and male members.
The Board of Directors has adopted a Diver-
sity Policy, which is available on the Company’s
website. The Board of Directors recognises the
benefits that a diverse Board composition brings
to the Company and its shareholders. Diversity
supports the Board’s open working atmosphere,
independent role and decision making. The
Board’s key role is also to proactively and con-
sistently support and challenge the Company’s
executive management from a wide range of
perspectives. The successful performance of
the duties of the Board and its Committees
requires a diversity of composition, skills and
experience, as well as consideration of the
personal qualities of individual Board members.
Furthermore, diversity must support the current
stage of development of the Company and meet
its future needs and business development.
Metsä Board has identified experience
in different industries and the international
operating environment as essential for the
diversity of the Board of Directors, in addition
to knowledge of the Company’s industry. The
Board members’ complementary educational
backgrounds, management experience in
different areas of the business, and diverse age
and gender distribution have also been identified
as factors contributing to diversity. Metsä
Board’s objective is to have both women and
men represented on the Board. The Nomination
and HR Committee of the Board takes the
diversity principles into account when proposing
the composition of the Board to the Annual
General Meeting each year. The achievement of
the Board’s diversity objectives is monitored as
part of the normal activities of the Board and its
Nomination and HR Committee.
According to the Articles of Association, the
Board of Directors shall consist of at least five
and at most ten ordinary members elected by
the shareholders at the Annual General Meeting
for a term of office starting from the end of
the General Meeting that elected the member
and continuing until the end of the next Annual
General Meeting. There is no limit to the number
of consecutive terms of office. The Board of
Directors shall elect a Chair and Vice Chair from
among its members.
In 2023, the Board of Directors had nine (9)
members, of whom 66.67% were men (6) and
33.33% were women (3). The age range of the
Board members was 44–68 years.
Of the nine (9) members of the Board of
Directors, 88.89% of the members (8) were
independent of the Company, and 66.67% (6)
were independent of a major shareholder of the
Company.
158
CORPORATE GOVERNANCE STATEMENT
|
METSÄ BOARD ANNUAL REVIEW 2023
GENDER DISTRIBUTION
%
Men .......................................67
Women .................................33
AGE DISTRIBUTION
%
40–50 ....................................11
51–60....................................33
61–65 ................................... 44
>65 .........................................11
No members of the Board of Directors are exec-
utive officers of the Company.
The representation of employees in the man-
agement of the Company is organised so that
the management team of each of the Company’s
production facility includes one employee
representative.
The Board as a whole has extensive
experience in good corporate governance,
international business and management, either
in operational or fiduciary positions in various
industries, including the forest industry, forestry,
engineering, the food industry and auditing. In
addition, the majority of the Board members
have experience in pulp, board and/or paper
products. The Board also has years of expe-
rience in managing sustainability issues and
assessing the risks and opportunities involved.
The composition of the Board of Directors and a
summary of the Board members’ work history
and positions of trust can be found below in the
Board members’ introduction and on the Com-
pany’s website, https://www.metsagroup.com/
metsaboard/investors/corporate-governance/
board-of-directors/.
In financial year 2023, the Board held a total of
14 meetings. Board members attended 97% of
the meetings (97% attendance in 2022 and 99%
in 2021).
Attendance at Board and committee meetings by member
Member of the Board of Directors
Number
of Board
meetings
Attendance
rate (%)
Independence
from the
Company
Independence
from the major
shareholder
Ilkka Hämälä
(Chair of the Board)
14/14 100 No No
Jussi Linnaranta 14/14 100 Ye s No
Hannu Anttila 13/14 92 Yes Yes
Raija-Leena Hankonen-Nybom 13/14 92 Ye s Ye s
Erja Hyrsky 14/14 100 Ye s Ye s
Mari Kiviniemi 14/14 100 Ye s Ye s
Mikko Mäkimattila (as of 23 March 2023) 14/14 100 Ye s No
Jukka Moisio 11/11 100 Yes Ye s
Timo Saukkonen (until 23 March 2023) 3/3 100 Yes No
Veli Sundbäck (until 23 March 2023) 3/3 100 Ye s Ye s
Juha Vanhainen (as of 23 March 2023) 11/11 100 Ye s Ye s
Board of Directors’ Committees
The Board of Directors may decide to set up
committees, if necessary, to prepare and dis-
cuss matters falling within its competence, with
the assistance of the Board of Directors. The
Board has appointed an Audit Committee and a
Nomination and HR Committee from among its
members. The Board of Directors appoints the
chair and members of each committee annually
after the Annual General Meeting. The Board
and its committees may also be assisted by
external advisors.
Based on the proposals of the committees,
the final decisions on matters within the scope of
the committees’ duties are taken by the Board of
Directors, with the exception of proposals on the
composition and remuneration of the Board of
Directors made directly to the General Meeting
by the Nomination and HR Committee.
Audit Committee
The role of the Audit Committee is to assist the
Board in ensuring the accuracy, balance, trans-
parency and clarity of the Company’s financial
reporting, accounting methods, financial state-
ments, and other financial information as well as
sustainability reporting disclosed by the Com-
pany. The Audit Committee regularly reviews
the internal control and governance systems
and monitors the progress of the reporting of
financial and sustainability risks and the financial
and sustainability audit. The Audit Committee
assesses the effectiveness and scope of internal
audit, the Company’s risk management, key risk
areas, and compliance with laws and regulations.
It assesses the independence of the auditor and
audit firm and makes a recommendation to the
Board on the election of the Company’s auditor.
The Audit Committee also reviews the internal
audit’s half-yearly action plans and reports on
significant audits.
The members of the committee must have
sufficient expertise in accounting and financial
reporting. The Audit Committee meets regularly,
at least four times a year. In connection with
its meetings, the committee shall consult the
Company’s auditor. The Chair of the committee
shall report to the Board of Directors on each
meeting of the Audit Committee. The duties and
responsibilities of the Audit Committee are set
out in its charter, which is approved by the Board
of Directors (https://www.metsagroup.com/glo-
balassets/metsa-board/documents/investors/
corporate-governance/en/general/metsa-board-
rules-of-procedure-for-audit-committee.pdf).
The Company’s auditor, the CEO and CFO, as
well as other management representatives and
external advisors, are also represented at the
Audit Committee meetings when invited by the
committee.
159
The board members listed below have acted
as members of the Audit Committee since the
Annual General Meeting 2023. The members
of the Audit Committee are independent of the
Company and its major shareholder.
The Audit Committee met five times during
2023. The attendance rate of Committee
members was 92% (100% in 2022 and 2021).
Audit Committee member Number of meetings Attendance rate (%)
Raija-Leena Hankonen-Nybom (Chair) 5/5 100
Hannu Anttila 5/5 100
Mari Kiviniemi 5/5 100
Jukka Moisio 4/5 80
Juha Vanhainen (as of 23 March 2023) 4/4 100
Nomination and HR Committee
The purpose of the Nomination and HR Commit-
tee 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
a proposal for the Annual General Meeting
on the number of Board members, the Board
composition and the remuneration for Board
members. The committee 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
members. It convenes on a regular basis, at least
four times a year. The Chair of the committee
presents 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-com-
mittee-charter.pdf).
The board members listed below have acted
as members of the Nomination and HR Commit-
tee since the Annual General Meeting 2023.
The Nomination and HR Committee met four
times during 2023. All members attended all
meetings (100% attendance also in 2022 and
2021).
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 (until 23 March 2023) 1/1 100
Veli Sundbäck (until 23 March 2023) 1/1 100
Mikko Mäkimattila (as of 23 March 2023) 3/3 100
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 in
accordance with applicable legislation, and that
asset management has been organised in a reli-
able manner. The CEO manages the Company’s
daily business and is responsible for controlling
and steering the businesses.
The CEO has a written CEO contract approved
by the Board of Directors. The Board of
Directors supervises the CEO’s performance
and provides a performance evaluation once
a year. The CEO is covered by the Employees
Pensions Act, which provides for a pension
compensation based on service years and
earnings. 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
insur-ance policy for the CEO, entitling the CEO
to retire at the age of 62. The maximum level
of the CEO’s 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 of Directors appoints and
dismisses the CEO. The CEO may be discharged
by the Board of Directors’ without a specific
reason. The CEO can also resign from their
assignment. The mutual period of notice is six
months. However, the Board may decide to
discharge the CEO without a notice period. If the
Board terminates the CEO’s contract, the CEO
is entitled to discharge compensation equal to
their 12-month salary.
Deputy to the CEO
The Board of Directors may appoint a deputy to
the CEO. The Deputy CEO shall be responsible
for the duties of the CEO in the event of the
CEO’s absence. Currently, no deputy has been
appointed for the CEO.
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,
with function heads Markku Leskelä (Develop-
ment), Jussi Noponen (Sales and Supply Chain),
Harri Pihlajaniemi (Production and Technology),
Henri Sederholm (Finance) and Camilla
Wikström (Human Resources), who all report
to the CEO. Ari Kiviranta, the Company’s Chief
Technology Officer, retired on 31 October 2023.
Ari Kiviranta’s responsibilities were transferred
to Harri Pihlajaniemi as of 1 November 2023.
The tasks and responsibilities of the Corpo-
rate Management Team include investment
planning, the development and preparation
of the Company’s strategic guidelines, the
allocation of resources, the supervision of day-
to-day operations and the preparation of several
matters for the Board of Directors. As a rule,
the Corporate Management Team meets once a
160
CORPORATE GOVERNANCE STATEMENT
|
METSÄ BOARD ANNUAL REVIEW 2023
month at the invitation of the CEO, and whenever
necessary.
The members of the Corporate Management
Team have written employment or service
contracts. With the exception of the CEO, they
have no pension arrangements other than the
statutory pension scheme. The period of notice
for members of the Executive Board is six
months on either side.
■ Internal control, internal audit
and risk management
Effective business requires that operations are
monitored continuously and effectively. Metsä
Board’s internal management and control
procedure is based on the Companies Act,
other laws and regulations applicable to listed
companies, the Articles of Association, the rules
and recommendations of the Helsinki Stock
Exchange, the recommendations of the Good
Corporate Governance Code and the Company’s
own approved policies and principles. The
effectiveness of internal control is assessed by
the Company’s Internal Audit function. Internal
control is implemented throughout the organi-
sation. Internal control methods include internal
guidelines and reporting systems that support
controls. External control is the responsibility
of Metsä Board’s auditor and the authorities.
Metsä Board’s internal control, risk manage-
ment and internal audit principles, operational
objectives, and responsibilities are described
below. Internal control and risk management
for sustainability reporting is described in the
Sustainability Report included in the Company’s
Annual Review in the Risk management and
internal control for sustainability reporting
section.
Internal control
At Metsä Board, internal control includes finan-
cial reporting, sustainability reporting and other
operational controls. Internal control is carried
out by the Board of Directors and the acting
management, as well as the entire staff. Internal
control aims to ensure the achievement of the
Company’s goals and objectives, the economi-
cal, appropriate and efficient use of resources,
the reliability and accuracy of financial and other
management information and sustainability
data, compliance with external regulations and
internal procedures, adequate safeguarding of
operations, data and assets, and adequate and
properly organised manual and IT systems to
support operations.
Internal control is divided into (i) preventive
control such as establishing the Company’s
values, general operating and business princi-
ples, (ii) day-to-day control such as directing
and monitoring activities, including operating
systems and work instructions, and (iii) ex-post
control such as management assessments and
reviews, and comparisons and verifications to
ensure the achievement of objectives and to
monitor compliance with agreed operating and
control principles. The Company’s corporate
culture, management style and approach to
control together form the basis of the overall
internal control framework.
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 at 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 to a Credit Committee, which
convenes at least quarterly. Credit controllers
monitor the trend in trade receivables in each
sales company under the supervision of the
Metsä Group’s Director, Credit Management.
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 regularly reported
to the Board of Directors.
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 Metsä Group’s
financial administration in accordance with
the investment policy confirmed by the Board.
After pre-approval, investments are handled
by the functions’ Management Teams and
the Corporate Management Team within the
framework of the annual investment plan. The
most significant investments are separately
submitted to the Board for approval. Investment
follow-up reports are compiled quarterly.
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
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 in
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 to other
Group management if required for the purposes
of information.
Internal auditing provides the Audit
Committee with a six-monthly summary report
on the audits carried out, the main findings and
161
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 promote and ensure the
achievement of the Company’s objectives.
The effective coordination of business
management and risk management is based
on the operating principles approved by the
Board of Directors, which are designed to keep
the overall risk management system clear,
understandable and sufficiently practical. Risks
and their evolution are regularly reported to the
Audit Committee of the Board of Directors.
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 matters. Such an evaluation must be
conducted before any pre-engineering and
execution phases of projects and investments.
Responsibilities for risk management
are shared between the different governing
bodies. The Board of Directors is responsible
for risk management and approves the risk
management policy, while the Audit Committee
assesses the Company’s risk management
levels and practices and key risk areas and
makes proposals to the Board of Directors in this
regard.
The CEO and the Corporate Management
Team are responsible for defining and imple-
menting risk management policies and are also
responsible for ensuring that risks are taken into
account in the Company’s planning processes,
and that they are adequately and appropriately
reported. Reporting to Metsä Group’s Business
Process Development Director, the Chief Risk
Officer is responsible for the development,
coordination and implementation of the
Company’s risk management process. The Chief
Insurance Officer, reporting to Metsä Group’s
CFO, is responsible for key insurance solutions.
The Risk Committee conducts a risk mapping
twice a year, which is presented by the President
and CEO to the Board after the Management
Team meeting. The Risk Committee consists
of the CFO, who leads the committee, with the
Chief Production Officer, the Chief Development
Officer, the Chief Risk Officer and the Chief
Accounting Officer. The business and support
functions identify and assess the material risks
in their respective areas of responsibility in their
planning processes, prepare for them, take the
neces-sary preventive measures and report on
the risks as agreed.
The key elements of Metsä Board’s risk man-
agement include implementing a comprehensive
risk management process that supports the
entire business, protecting assets and ensuring
business continuity, corporate security and
its continuous improvement, as well as crisis
management and continuity and recovery plans.
In line with the Risk Management Policy and
Principles, adequate risk assessment is part of
the pre-appraisal and implementation phases
of projects that are financially or otherwise
significant.
Metsä Board’s risk management function is to:
• ensure that all identified risks affecting
personnel, customers, products, property,
information assets, corporate image, corpo-
rate responsibility or operational capacity are
managed in accordance with the law and on
the basis of the best available information;
• ensure the achievement of the objectives set
for the Company;
• meet the expectations of stakeholders;
• protect assets and ensure business
continuity;
• optimise the profit/loss potential ratio; and
• ensure the management of the Company’s
overall risk exposure and the minimisation of
overall risks.
The most significant risks and uncertainties
known to the Company are described in the
Report of the Board of Directors.
Auditing
According to Metsä Board’s Articles of Asso-
ciation, the Company has one auditor, which
must be an auditing firm approved by the
Finnish Patent and Registration Office, with the
principal auditor being a Chartered Accountant.
The auditor is elected annually by the General
Meeting of Shareholders at the Annual General
Meeting. The Company’s audit services have
been tendered for the financial years 2011
and 2021 under the guidance of the Audit
Committees of the Company and the parent
company Metsäliitto Cooperative. Based on the
2011 tender, PricewaterhouseCoopers Oy, the
Company’s long-term auditor, was replaced by
KPMG Oy Ab at the Annual General Meeting in
the spring of 2012. The audit was put out to ten-
der in 2021, and in accordance with the decision
of the Annual General Meeting in the spring of
2023, the Company’s auditor will be KPMG Oy
Ab, which appointed Kirsi Jantunen, KHT, as its
principal auditor. The Audit Committee oversees
the auditor selection procedure and makes
recommendations to the Board of Directors
on the proposal to the Annual General Meeting
regarding the selection of the auditor and the
auditor’s remuneration.
In 2023, audit fees were paid as follows:
Audit fees 2023 2022
Audit fees to KPMG Oy Ab EUR 260,000 EUR 232,000
International fees EUR 251,000 EUR 223,000
For services unrelated to the audit proper, incl. certificati-
on of the sustainability report
EUR 32,000 EUR 0
Total EUR 543,000 EUR 455,000
To other audit firms than KPMG Oy Ab EUR 12,000 EUR 11,000
Total EUR 555,000 EUR 466,000
162
CORPORATE GOVERNANCE STATEMENT
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METSÄ BOARD ANNUAL REVIEW 2023
Insider administration
For insider matters, Metsä Board and its group
companies comply with Finnish laws, especially
the Securities Markets Act, Regulation No
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 their
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, and (iii) unlawfully
disclose inside information to another person
unless such disclosure is made as part of carry-
ing 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.
The Company does not maintain a permanent
company-specific insider register. If necessary,
the Company will, by decision of the Chair of
the Board of Directors, establish an insider
project, which will include all persons involved in
the preparation of a specific project containing
insider information. The Company’s directors
subject to the disclosure requirement include
the members of the Board of Directors and
the CEO. The ownership of these persons and
of natural and legal persons related to them
is public, as each of them has an independent
duty of disclosure to the Company and the
Supervisory Authority in respect of their
transactions in Metsä Board shares and other
financial instruments. Metsä Board publishes
the notifications of transactions it receives in the
form of stock exchange releases.
Directors who are required to report are
prohibited from trading in the Company’s shares
and other financial instruments during the
period between the end of the reporting period
and the end of the publication date of the interim
report (but always for at least 30 calendar days
– the “closed window”).
Metsä Board maintains a list of persons who,
in the course of their duties, are involved in
the preparation and communication of interim
reports, the financial statements release and
the annual financial statements and thus may
receive inside information. These persons are
covered by the Company’s closed window and
are therefore subject to the trading restriction
mentioned above.
Related party transactions
The Board of Directors has defined the princi-
ples for monitoring and evaluating related party
transactions. The Company has contractual
relationships with the parent company Metsäli-
itto Osuuskunta and its sister companies Metsä
Fibre Oy and Metsä Tissue Oyj in the normal
course of business. The most significant of these
are related to the procurement of raw materials
such as wood and pulp and the operation of joint
integrated mill sites.
The Board of Directors decides on contractual
relations with related parties unless the matter is
related to the normal business of the Company
and is of minor importance. In situations in
which the Board of Directors deals with a busi-
ness or other contractual relationship or a rela-
tionship with Metsäliitto Cooperative or a related
company, the Board of Directors acts in principle
without its members who are dependent on
Metsäliitto Cooperative or the related company
in question. The Audit Committee of the Board
of Directors regularly monitors and evaluates the
transactions and contractual relationships of the
Company and its related parties.
To assess the independence and integrity
of directors, directors must disclose to the
Company any matters that may affect their
ability to act free of conflicts of interest. As of
31 December 2023, the members of the Board
of Directors, the CEO and the other members
of the Corporate Management Team had
no financial loans from the Company or its
subsidiaries, and no collateral arrangements
existed between them. There were no significant
business relationships between these persons
or their related parties (as defined in IAS 24) and
the Company during 2023.
163
Board of Directors of Metsä Board
The Annual General Meeting 2023 elected the following persons as members of the Board of Directors:
RAIJA-LEENA HANKONEN-NYBOM
1960
M.Sc. (Econ.), Authorised Public Accountant
degree
Member of the Board since 2021
Independent of the Company and its significant shareholder
Primary working experience:
KPMG Oy Ab:
Chair of the Board (2016–2018)
CEO (2010–2016)
Lead Audit Partner of Large Corporates in Financial Services, Manufactur-
ing and Retail Industry (2006–2019)
Head of Audit (2006–2010)
Various audit and IFRS client engagements in Finland and abroad
(1987–2005)
Positions of trust:
Cargotec Corporation, Member of the Board and Chair of the Audit and
Risk Management Committee (2023–)
Danske Bank A/S, Chair of the Audit Committee (2021–), Member of the
Board (2020–) and Member of Remuneration Committee (2020–2021)
Posti Group Oyj, Member of the Board and Chair of the Audit, Risk and
Sustainability Committee (2020–)
Helsinki Deaconess Institute Foundation sr, Member of the Board (2020–)
and Chair of the Audit Committee (2022–)
Directors’ Institute Finland ry, Member of the Board (2021–)
Savonlinna Opera Festival Support Association ry, Member of the Board
(2018–)
Jalmari and Rauha Ahokas Medical Foundation sr, Chair of the Supervisory
Board (2018–2022), Member of the Supervisory Board (2013–2017), Chair
of the Board (2008–2012), Member of the Board (2005–2007), Member of
the Delegation (1999–2004)
Shares owned: 13,131 B shares
HANNU ANTTILA
1955
M.Sc. (Econ), Teollisuusneuvos (Finnish
honorary title)
Member of the Board since 2018
Independent of the Company and its significant shareholder
Primary working experience:
Metsä Group, Executive Vice President, Strategy (2006–2017)
M-real Corporation (now Metsä Board Corporation), CEO (2005–2006)
Metsäliitto Group, Chief Financial Officer (2003–2004)
Metsä Tissue Corporation, CEO, (1998–2003)
Oy Metsä-Botnia Ab and Metsä Serla Corporation (now Metsä Fibre Oy and
Metsä Board Corporation), various management positions
Positions of trust:
Metsä Tissue Corporation, Member of the Board (2004–2018)
Metsä Fibre Oy, Member of the Board (2004–2017)
Pohjolan Voima Oyj, Member of the Board (2007–2017)
Teollisuuden Voima Oyj, Member of the Board (2007–2017)
Shares owned: 52,627 B shares
164
CORPORATE GOVERNANCE STATEMENT
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METSÄ BOARD ANNUAL REVIEW 2023
ERJA HYRSKY
1979
M.Sc. (Econ.)
Member of the Board since 2021
Independent of the Company and its significant shareholder
Primary working experience:
Unilever Nordics, Ice Cream Lead, Nordics (2021–)
Unilever PLC, Strategy Director, Global Markets (2019–2021)
Unilever Finland Oy, Managing Director, Sales Director (2013–2019)
Procter & Gamble Oy, various managerial positions in sales (2006–2013)
Hewlett Packard Oy, various positions in sales and marketing
(2004–2006)
Positions of trust:
Finnish Food and Drink Industries’ Federation (ETL), Member of the Board
(2016–2019)
Polaris Pension Fund, Chair of the Board (2016–2019)
Shares owned: 14,508 B shares
ILKKA HÄMÄLÄ
1961
M.Sc. (Engineering)
Vuorineuvos, (Finnish honorary title)
Chair of the Board since 2018
Not independent of the company or its significant shareholder
Primary working experience:
Metsä Group, CEO and President (2018–)
Metsäliitto Cooperative, CEO (2018–)
Metsä Fibre Oy, CEO (2008–2017)
Oy Metsä-Botnia Ab (now Metsä Fibre Oy), previously various management
positions
Positions of trust:
Metsä Fibre Oy, Chair of the Board (2018–)
Metsä Spring Oy, Chair of the Board (2018–)
Metsä Tissue Corporation, Chair of the Board (2018–)
Finnish-Swedish Chamber of Commerce, Member of the Council (2023–)
China Office of Finnish Industries Oy, Member of the Board (2022–)
Confederation of European Paper Industries (CEPI), Member of the Steer-
ing Committee (2020–), Member of the Board (2018–)
Finnish Forest Industries Federation, Vice Chair of the Board and the
Board’s Working Committee (2021–), Chair of the Election Committee
(2021–), Member of the Board (2012–),
Ilmarinen Mutual Pension Insurance Company, Chair of the Supervisory
Board (2021–), Member of the Supervisory Board (2009–),
Finnish Business and Policy Forum EVA, Member of the Board (2021–)
ETLA Economic Research, Member of the Board (2021–)
Jyväskylän yliopiston varainhallintatoimikunta, member (2021–)
Finnish Chambers of Commerce, Member of the Delegation (2018–)
Helsinki Region Chamber of Commerce, Member of the Delegation (2018–)
Finnish Quality Association, Chair of the Board (2020–), Member of the
Board (2018–), Member of the Advisory Board (2008–)
Pohjolan Voima Oyj, Deputy Member of the Board (2009–)
Shares owned: 294,814 B shares
165
MARI KIVINIEMI
1968
MSocSc. (Econ.)
Member of the Board since 2022
Independent of the Company and its significant shareholder
Primary working experience:
Finnish Commerce Federation, Managing Director (2019–)
OECD, Deputy Secretary General (2014–2018)
Finnish Prime Minister (2010–2011)
Minister of Public Administration and Local Government (2007–2010)
Minister for Foreign Trade and Development and Minister for European
Affairs (2005–2006)
Member of Parliament, Finland, (1995–2014)
Positions of trust:
The Finnish Fare Foundation, Member of the Board (2024–)
Vaasa University, Chair of the Board (2022–)
Asian Infrastructure Investment Bank, International Advisory Panel
(2021–)
Savonlinna Opera Festival’s Board of Trustees, member (2020–)
Blic Public Affairs, Member of the Board (2019–2022)
Messukeskus Helsinki, Member of Supervisory Board (2019–2021)
Suomi Mutual, Member of the Board (2013–2014)
The Finnish Centre Party, Leader (2010–2012)
Helsinki City Council, member (2005–2012)
The Finnish Centre Party, Deputy Party Leader (2003–2008)
Uusimaa Regional Council, member (2004–2008)
Ilkka-Yhtymä Group, member of Supervisory Board (2006–2007)
Finnish National Opera Foundation, Member of the Board (2004–2007 and
2013–2014)
Lännen Tehtaat Oyj, Member of Supervisory Board (1996–2005)
Alko Inc., member of Supervisory Board (2002–2003)
Leonia Bank, Member of Supervisory Board (1997–2000)
VR Group Ltd, Member of Supervisory Board (1995–1997)
Shares owned: 8,685 B shares
JUSSI LINNARANTA
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 signifi-
cant shareholder
Primary working experience:
Thermal entrepreneur (2003–)
Forest and Agricultural entrepreneur (2001–)
Ministry of Agriculture and Forestry, Information and Research Centre,
various positions (1997–2007)
Positions of trust:
Metsäliitto Cooperative, Member of the Supervisory Board (2004–2016),
Member of the Board (2017–), Vice Chair of the Board (2019), Chair of the
Board (2020–)
Pellervo Coop Center, Member of the Board (2020–)
Pohjois-Savo Cooperative Bank, Member of the Representative Council
(2014–2017)
The Central Union of Agricultural Producers and Forest Owners (MTK),
Member of the Energy Committee (2007–2008, 2014–2016)
Shares owned: 36,211 B shares
JUKKA MOISIO
1961
M.Sc. (Econ), MBA
Member of the Board since 2020
Independent of the Company and its significant shareholder
Primary working experience:
Nokian Tyres plc, President and CEO (2020–)
Huhtamäki Oyj, President and CEO (2008–2019)
Ahlström Oyj, various duties (1991–2008), President and CEO
(2004–2008)
McKinsey & Company, Associate (1989–1991)
Positions of trust:
Paulig Oy, Member of the Board of Directors (2019-), Chair of the Board of
Directors (2020–)
Sulapac Oy, Chair of the Board of Directors (2019–)
Atria Oyj, Member of the Board of Directors (2014–2022)
Neles Corporation, Chair of the Board of Directors (2020–2021)
Shares owned: 17,283 B shares
166
CORPORATE GOVERNANCE STATEMENT
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METSÄ BOARD ANNUAL REVIEW 2023
MIKKO MÄKIMATTILA
1971
M.Sc. (Agriculture and Forestry), Agronomist
Member of the Board since 2023
Independent of the Company. Not independent of the Company’s signifi-
cant shareholder
Primary working experience:
RockRobot Oy, CEO (2021–)
Forestry and agriculture entrepreneur (1994–)
Potila Tuotanto Oy, CEO (2017–2020)
Dometal Oy, CEO, partner (2011–2021)
Multiva Magyarország Kft., CEO of the Hungarian subsidiary (2013–)
Farmit Website Oy, CEO (2005–2010)
Lännen Tehtaat Oyj, Development manager (2003–2005)
Suomen Gallup Elintarviketieto Oy, Research manager (2001–2003)
Pellervon taloudellinen tutkimuslaitos, Researcher (1998–2001)
Positions of trust:
Metsäliitto Cooperative, Member of the Board (2020–), Vice Chair of the
Board (2023–)
Pellervo Coop Center, Member of the Delegation (2023–)
LähiTapiola Loimi-Häme Regional Mutual Insurance Company, Member of
the Board (2008–2022)
LocalTapiola General Mutual Insurance Company, Member of the Supervi-
sory Board (2014–2023)
Dometal Oy, Member of the Board (2012–2021)
Potila Tuotanto Oy, Member of the Board (2013–2020)
Lähivakuutus Cooperative, Member of the Supervisory Board (2011–2014)
Forestry Management Association Loimijoki, Member of the Delegation
(2005–2019)
Shares owned: 17,283 B shares
JUHA VANHAINEN
1961
M.Sc. (Process Technology)
Member of the Board since 2023
Independent of the Company and its significant shareholder
Primary working experience:
Apetit Plc, CEO 2015–2019
Stora Enso Oyj, EVP and Country Manager of Finland (several different
areas of responsibility) 2007–2015
Stora Enso Oyj, several director and manager positions 1990–2007
Kemi Oy, engineer 1988–1990
Other positions of trust:
EKE-Construction Ltd., Member of the Board of Directors (2022–)
Koskisen Corporation Plc, Chair of the Board of Directors (2020–2023)
Ponsse Plc, Member of the Board of Directors (2018–)
Wihuri Group, Member of the Board of Directors (2018–2021)
Ekokem Oyj (now Fortum Waste Solutions Oy), Chair of the Board of Direc-
tors (2015–2016), Member of the Board of Directors and Remuneration
Committee (2014–2015)
FoodDrinkEurope, Member of the Board of Directors (2018–2019)
Finnish Food and Drink Industries’ Federation (ETL), Member of the Board
of Directors and Working Committee (2015–2019)
Sucros Ltd, Vice Chair of the Board of Directors (2015–2019)
Pohjolan Voima Oy, Vice Chair of the Board of Directors and Member of the
Remuneration Committee (2008–2015)
Finnish Forest Industries Federation, Chair of the Board of Directors and
Working Committee (2012–2013), Vice Chair of the Board and Working
Committee (2008–2011)
Confederation of European Paper Industries (CEPI), Member of the Board
of Directors (2012–2013)
Stora Enso Suzhou Paper (Suzhou) Co., Ltd., Chair of the Board of Direc-
tors (2012–2014)
Ilmarinen Mutual Pension Insurance Company, Member of Supervisory
Board (2009–2015)
Efora Oy, Chair of the Board of Directors (2013–2015), Member of the
Board of Directors (2009–2013)
Stora Enso Huatai Paper (Shandong) Co., Ltd., Chair of the Board of Direc-
tors (2009–2014)
Stora Enso Arapoti Industria De Papel S.A., Member of the Board of Direc-
tors (2009–2014)
Fortek Oy, Chair of the Board of Directors (2003–2008), Member of the
Board of Directors (1999–2003)
Shares owned: 9,460 B shares
The shareholdings also take into account any shares held by controlling
entities on 31 December 2023.
167
Management Team of Metsä Board
Members of the Company’s Management Team:
MARKKU LESKELÄ
1962
Senior Vice President, Development
PhD
Metsä Group employee since 2016. Metsä Board Corporation’s Senior Vice
President, Development since 2021.
Main positions:
Metsä Board Corporation, Senior Vice President, Development (2021–)
Metsä Board Corporation, Vice President, Research and Product Develop-
ment (2016–2021)
CLIC Innovation Ltd, Chief Technology Officer (2012–2015)
Paperra Oy, Partner (2010–2012)
Metsä Wood, Vice President, R&D (2009–2010)
Metsä Board Corporation, Vice President, R&D (2007–2009)
Metsä Board Corporation, Vice President, R&D, Head of Technology Centre
Kirkniemi (2001–2007)
Metsä Board Corporation, various positions in R&D (1991–2001)
ESPRI/State University of New York, Syracuse, Visiting Scientist
(1990–1991)
University of Oulu, Department of Biophysics, Research Scientist
(1987–1990)
Shares owned: 23,175 B shares
JUSSI NOPONEN
1975
Senior Vice President, Sales and Supply Chain
M.Sc. (Tech.)
Metsä Group employee since 2000. Metsä Board Corporation’s Senior
Vice President, Sales and Supply since 2021.
Main positions:
Metsä Board Corporation, Senior Vice President, Sales and Supply (2021–)
Metsä Board Corporation, CFO (2016–2021)
Metsä Group, Senior Vice President, Group Finance (2009–2016)
Metsä Board Corporation, Senior Vice President, Business Control,
Graphic Papers (2008)
Metsä Board Corporation, Vice President, Group Business Control
(2006–2008)
Metsä Board Corporation, Business Controller, Folding Cartons
(2003–2006)
Nokia Corporation (1999–2000) and Metsä Group (2000–2003), SAP
system implementation projects in finance
Shares owned: 90,000 B shares
MIKA JOUKIO
1964
Chief Executive Officer
M.Sc. (Tech.), MBA
Metsä Group employee since 1990. Metsä Board Corporation’s Chief
Executive Officer since 2014.
Main positions:
Metsä Tissue Corporation, CEO (2012–2014)
Metsä Board Corporation, Head of Consumer Packaging (2006–2012)
Metsä Board Corporation, Vice President and Mill Manager, Metsä Board
Kyro and Metsä Board Tako (2006)
Metsä Board Corporation, Vice President and Mill Manager, Metsä Board
Kyro (2005–2006)
Metsä Board Corporation, Senior Vice President, Corporate Logistics and
Supply Chain (2004–2005)
Metsä Board Corporation, Vice President and Mill Manager, Metsä Board
Äänekoski (2001–2004)
Various management positions in Metsä Board Corporation since 1990.
Positions of trust:
Husum Pulp AB, Chair of the Board (2021–)
Metsä Fibre Oy, Board of Directors, member (2014–)
Atria Plc, Member of the Board (2022–)
Finnish Forest Industries, Trade Policy Committee, Chair (2022–)
Varma Mutual Pension Insurance Company, Member of the Supervisory
Board (2019–)
Shares owned: 315,173 B shares
168
CORPORATE GOVERNANCE STATEMENT
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METSÄ BOARD ANNUAL REVIEW 2023
HARRI PIHLAJANIEMI
1970
Senior Vice President, Production and Technology
M.Sc. (Tech.)
Metsä Group employee since 2017. Metsä Board Corporation’s Senior Vice
President, Production and Technology since 2023.
Main positions:
Metsä Board Corporation, Senior Vice President, Production and Techno-
logy (2023–)
Metsä Board Corporation, Senior Vice President, Production (2017–2023)
Stora Enso Corporation, Vice President, Operations Excellence &
Investments (2012–2017)
Stora Enso Corporation, Mill Director, Publication Paper, Veitsiluoto mill
(2011–2012)
Stora Enso Corporation, Production Director, Oulu paper mill (2008–2011)
Stora Enso Corporation, Production Manager PM 6, Oulu mill
(2006–2007)
Stora Enso Corporation, Production Manager PM 7, Oulu mill (2004–2005)
Metsä Board Corporation, Production Manager PM 3, Kirkniemi mill
(2001–2004)
Shares owned: 60,081 B shares
HENRI SEDERHOLM
1978
Chief Financial Officer
M.Sc. (Econ.)
Metsä Group employee since 2003. Metsä Board Corporation’s Chief
Financial Officer since 2021.
Main positions:
Metsä Board Corporation, Chief Financial Officer (2021–)
Metsä Group, Senior Vice President, Group Finance (2016–2021)
Metsä Wood, Chief Financial Officer (2015–2016)
Metsä Board Corporation, Vice President, Finance & Control (2009–2015)
Metsä Group Treasury, Long-term Funding (2003–2009)
Shares owned: 50,000 B shares
CAMILLA WIKSTRÖM
1970
Senior Vice President, Human Resources
M.Sc. (Eng.)
Metsä Group employee since 2002. Metsä Board Corporation’s Senior Vice
President, Human Resources since 2019.
Main positions:
Metsä Board Corporation, Senior Vice President, Human Resources
(2019–)
Metsä Fibre Oy, SVP Production, pulp (2018–2019)
Metsä Fibre Oy, VP, Äänekoski Mill (2009–2017)
Oy Metsä Botnia Ab (now Metsä Fibre Oy), various positions (2002–2008)
Herkules Ab, various positions in sales and customer service (1995–2002)
Botnia Mill Service Oy, board member (2018–2019)
Shares owned: 25,015 B shares
No controlling entities of the members of the Corporate Management
Team own shares in the Company.
169
24
20
16
12
8
4
0
19 20 21 22 23
600
500
400
300
200
100
0
19 20 21 22 23
Remuneration report
Metsä Board’s remuneration aims to fairly support profitable growth and
the increase of shareholder value in line with the company’s values and
interests. The key objective is to enable the achievement of the company’s
vision, as well as its strategic and operational targets. We aim to motivate
excellent performance both in the short-term and long-term.
At Metsä Board, remuneration is based on the following principles:
• Ensuring sustainable and responsible business operations
Our remuneration supports the achievement of the company’s vision,
strategic and operational goals as well as the goals of sustainable devel-
opment. We encourage activities in line with the company’s values and
interests – responsible profitability, reliability, renewal and cooperation.
• Ensuring performance and profitable growth
With remuneration, we encourage excellent performance and results
in both short and long term. We remunerate our people for achieving
and exceeding targets and for profitable growth and the increase of
shareholder and stakeholder value.
• Supporting competence development and renewal
With remuneration, we support competence development and the
commitment of talent. We encourage continuous improvement, renewal
and the creation of conditions needed for future success. In addition
to monetary remuneration, we develop personnel’s competencies and
offer opportunities for career development. Our leadership is of a high
quality and we encourage the personnel’s participation.
• Consistency, competitiveness and transparency
The remuneration is fair and based on clear principles and structures.
We offer competitive overall remuneration. We communicate and report
on remuneration transparently and according to requirements.
Introduction
■ The company’s financial development
OPERATING RESULT,
COMPARABLE
EUR million
RETURN ON
CAPITAL EMPLOYED,
COMPARABLE
%
■ Short-term and long-term
incentive systems
Metsä Board has a short-term incentive system with a review period of
one calendar year. In addition, Metsä Board has a long-term share-based
incentive system with a performance period of three years and a restriction
period of approximately two years. The targets of the long-term incentive
system, tied to the return on capital employed, operating result, and equity
ratio, affect the long-term development of shareholder value. The Board
of Directors has steered the company’s operations in the short- and long-
term with the support of the incentive systems. Metsä Board’s financial
result has a direct impact on the remuneration of the CEO through both the
short- and long-term incentive systems.
170
REMUNERATION REPORT
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METSÄ BOARD ANNUAL REVIEW 2023
REMUNERATION PAID TO THE BOARD OF DIRECTORS AND THE COSTS OF THE BOARD MEMBERS’ PENSION ARRANGEMENTS IN 2023
(IN EUROS)
2023 2022 2021 2020 2019
Chair of the Board of Directors 111,800 113,400 108,600 108,300 105,500
Ilkka Hämälä as of 27 March 2018
Vice Chair of the Board of Directors 97,800 99,400 93,600 94,700 90,500
Jussi Linnaranta as of 11 June 2020
Martti Asunta until 11 June 2020
Other members of the Board of Directors (average) 80,200 82,329 75,986 75,900 73,400
CEO
1)
2,268,101 1,817,130 1,558,658 1,148,937 1,333,824
Mika Joukio as of 1 October 2014
Average earnings of employees
2)
52,221 59,564 56,941 50,695 51,418
1)
The figures shown in the table do not include paid supplementary pension insurance premiums.
2)
The average earnings of employees have been calculated from the employee costs of Metsä Board Group in its entirety by deducting social security costs from the total
and dividing the remainder by the average number of employees.
■ Development of remuneration in 2019–2023
No changes were made to the remuneration paid to Board members in
2019–2021. In 2022, the Annual General Meeting decided to increase the
annual remuneration paid to Board members. The annual remuneration
paid to the Chair and to the Vice Chair of the Board of Directors is EUR
99,000 and EUR 85,000 respectively. The annual remuneration paid to
other members of the Board of Directors is EUR 67,000. The 2022 Annual
General Meeting also decided to keep meeting fees at EUR 800. The 2023
Annual General Meeting decided to keep the fees unchanged. The CEO’s
base salary has been increased by around seven per cent over a five-year
period.
The development of the gross earnings has been influenced particularly
by the company’s success and thereby by the number of the company’s B
series shares earned in the long-term remuneration incentive system. The
development of employees’ average earnings has been moderate.
Remuneration report
171
Remuneration paid to the Board of Directors
REMUNERATION PAID TO THE BOARD OF DIRECTORS AND THE COSTS OF THE BOARD MEMBERS’ PENSION ARRANGEMENTS IN 2023
(IN EUROS)
Annual remuneration
1)
Board
meeting fees
Committee
meeting fees
Pension insurance
contribution
(TyEL)
2)
Total
Ilkka Hämälä, Chair 99,000 10,400 2,400 18,794 130,594
Jussi Linnaranta, Vice Chair 85,000 10,400 2,400 17,907 115,707
Hannu Anttila 67,000 10,400 3,200 1,025 81,625
Raija-Leena Hankonen-Nybom
3)
67,000 10,400 3,200 15,454 96,054
Erja Hyrsky 67,000 10,400 2,400 14,611 94,411
Mari Kiviniemi 67,000 10,400 3,200 13,549 94,149
Jukka Moisio 67,000 10,400 1,600 13,280 92,280
Mikko Mäkimattila, as of 23 March 2023 67,000 6,400 800 13,586 87,786
Juha Vanhainen, as of 23 March 2023 67,000 6,400 2,400 12,742 88,542
Yhteensä 653,000 85,600 21,600 120,949 881,149
Former members of the Board of Directors
Timo Saukkonen, until 23 March 2023 5,600 4,000 1,600 941 12,141
Veli Sundbäck, until 23 March 2023 5,600 4,000 1,600 - 11,200
Yhteensä 11,200 8,000 3,200 941 23,341
1)
Approximately half the remuneration has been paid as the company’s B series shares, and approximately half in cash. The cash portion has covered the taxes to be
charged from the remuneration. The figures shown in the table do not include the portion of transfer tax paid by the company.
2)
Members of the Board arevoluntarily covered by TyEL pension (the Finnish statutory pension system) insurance until they reach the required upper age limit.
3)
The Chair of the Audit Committee has also been paid a monthly remuneration of EUR 900 every month.
SHARES
1)
DELIVERED TO THE BOARD OF DIRECTORS IN 2023
Member of the Board of Directors Number of shares delivered
Ilkka Hämälä, Chair 7,4 6 5
Jussi Linnaranta, Vice Chair 6,410
Hannu Anttila 5,052
Raija-Leena Hankonen-Nybom 5,052
Erja Hyrsky 5,052
Mari Kiviniemi 5,052
Mikko Mäkimattila 5,052
Juha Vanhainen 5,052
Jukka Moisio 5,052
Total 49,239
1)
B shares acquired from public trading on 28 April 2023
172
REMUNERATION REPORT
|
METSÄ BOARD ANNUAL REVIEW 2023
Remuneration of the CEO
THE DIVISION OF THE CEO’S REMUNERATION
INTO A FIXED BASE SALARY, SHORT-TERM INCENTIVE
AND LONG-TERM INCENTIVE IN 2023
Base salary, including fringe benefits �������������� 24%
Short-term incentive �������������������������������������������15%
Long-term incentive �������������������������������������������� 61%
THE SALARIES AND FEES AND THE COST OF THE SUPPLEMENTARY
PENSION ARRANGEMENT PAID TO THE CEO IN 2023 (IN EUROS)
2023
Base salary, including fringe benefits
1)
545,164
Short-term incentive
2)
331,049
Long-term incentive
3)
1,391,888
Total 2,268,101
Supplementary defined benefit pension arrangement 520,027
1)
The base salary includes a company car and phone benefit, as well as extended
health, travel and accident insurance coverage.
2)
The short-term incentive paid concerns performance in 2022.
3)
The long-term incentive paid concerns the 2020–2022 performance period.
LONG-TERM INCENTIVE YSTEM
Performance period 2020–2022
Performance criteria ROCE
1)
Realisation of performance period, % 100
Year of reward payment 2023
Restriction period 2 years
Share price on the date of transfer, EUR 8.26
Number of shares delivered 84,576
1)
Metsä Board’s and Metsä Group’s three-year average return on capital
employed. Furthermore, minimum values have been set for the equity ratio and
operating result.
In 2019, Metsä Board’s Board of Directors decided on a long-term perfor-
mance-based incentive system for 2020–2024. The system comprises
three three-year performance periods. The CEO’s reward can be no more
than 210% of the CEO’s fixed annual base salary (a cut-off level 270%
of fixed annual base salary). The payment of the reward is followed by a
restriction period of approximately two years, during which the CEO cannot
transfer or dispose of the shares. The reward is based on the development
of Metsä Board Group’s (50%) and Metsä Group’s (50%) return on capital
employed (ROCE, %) as determined by the Board of Directors. Minimum
levels have also been set for the operating result and equity ratio.
The reward paid from the long-term incentive system in 2023 concerned
the 2020–2022 performance period of the 2020–2024 performance
share plan. The realisation of the performance period 2020–2022 was
100%. The realisation of the long-term incentive was 61% of the CEO’s total
remuneration in 2023. The reward for the 2021–2023 performance period
will be paid in March 2024.
In 2022, Metsä Board’s Board of Directors decided on a new long-term
performance-based incentive system for 2023–2027. The system com-
prises three three-year performance periods. Each performance period will
be followed by a restriction period of approximately two years. The amount
of the reward has been limited. The CEO’s reward can be no more than
210% of the CEO’s fixed annual base salary (a cut-off level 270% of fixed
annual base salary). The reward is based on the development of Metsä
Board Group’s (50%) and Metsä Group’s (50%) return on capital employed
(ROCE, %) as determined by the Board of Directors. Minimum levels have
also been set for the operating result and equity ratio.
The variable pay (short- and long-term incentives) form a significant
portion of the CEO’s remuneration. The relative portions of variable pay
and the fixed annual base salary are shown in the graph on the left.
■ The cost of the CEO’s supplementary
pension arrangement in 2023
The CEO is covered by the supplementary defined benefit pension
arrangement, according to which the CEO is entitled to retire at the age of
62. In 2023, the contribution to the supplementary defined-benefit pension
arrangement was EUR 520,027. No other financial benefits were paid to the
CEO in 2023.
The short-term incentive paid to the CEO was based on performance in
2022. The maximum level of remuneration available in the short-term
incentive system in 2022 was 75% of the fixed annual base salary, account-
ing for Metsä Group’s EBIT multiplier. The reward was based on Metsä
Board’s operating result (weighting 50%) and the strategic targets defined
by the Board of Directors (weighting 50%), as well as the realisation of
Metsä Group’s EBIT multiplier. The CEO’s short-term incentive for 2022
was 15% of the overall remuneration paid in 2023, accounting for Metsä
Group’s EBIT multiplier. The incentive was paid in March 2023. The 2023
short-term incentive system was based on the same principles as that of
2022. The reward for 2023 will be paid in March 2024.
173
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 nv e s to r s /.
Investor relations in 2023
In 2023, several investor and analyst meetings
were organised, both virtually and in person.
Investors were met mainly in Finland, Central
Europe and North America. Metsä Board also
participated actively in investor conferences
organised by brokerage firms. In-person group
events were organised for private investors.
The 2023 Annual General Meeting was held on
23 March 2023 in Espoo.
In connection with the publishing of each
interim report, Metsä Board organises a
webcast and conference call open to everyone.
During the event, the CEO and CFO present the
results, and the audience can ask questions.
The recordings and presentation materials are
available on the company’s website for at least
five (5) years.
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 2023: ABG Sundal
Collier, Carnegie, Danske Bank, DnB, Inderes,
Nordea, OP Equities, SEB and UBS. The contact
details of the analysts and some of the consen-
sus forecasts are available on the company’s
website.
Metsä Board is not responsible for the con-
tent, accuracy or extent of the analysts’ views.
Annual General Meeting in 2024
Metsä Board’s Annual General Meeting will be
held on Tuesday 26 March 2024 at 3:00 p.m.
EET in the Kaleva Hall at Dipoli, Otakaari 24,
02150 Espoo, Finland. The notice to general
meeting, including registration instructions,
as well as the general meeting documents and
additional information are available on the
Company’s website at
www.metsagroup.com/agm2024.
Profit distribution
The Board of Directors proposes to the Annual
General Meeting to be held on 26 March 2024
that a dividend of EUR 0.25 per share be paid
for the 2023 financial period. The proposed
dividend is in line with the company’s dividend
policy.
The dividend will be paid to shareholders who
are registered in the company’s shareholder
register held by Euroclear Finland Oy on the
date of record, 28 March 2024. The Board of
Directors proposes 9 April 2024 as the dividend
payment date.
Contact details for investor relations
Katri Sundström
Vice President, Investor Relations
tel. +358 10 462 0101
[email protected]
General questions and comments related to
investor relations can be emailed to:
metsaboard.investors@metsagroup.com.
Business ID 0635366–7
Metsä Board Corporation
Head office
PO Box 20
FI-02020 METSÄ
Financial reporting in 2024
Silent period Financial report Publication date
1 January–8 February 2024 Financial Statements Bulletin 2023 8 February 2024
1 April–25 April 2024 Interim Report for January–March 2024 25 April 2024
1 July–1 August 2024 Half-year Financial Report for January–June 2024 1 August 2024
1 October–24 October 2024 Interim Report for January–September 2024 24 October 2024
Investor relations and investor information
174
To the Board of Directors of Metsä Board Corporation
We have undertaken a reasonable assurance engagement in respect
of whether the consolidated financial statements for the year ended 31
December, 2023 included in the digital financial statements 743700KKB-
8Q035K38488-2023-12-31-en.zip of Metsä Board Corporation (Business
ID 0635366-7) have been marked up with iXBRL markups 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 primary statements and the notes to the consolidated
financial statements, and the company identification data 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 Management
We are independent of the company in accordance with the ethical
requirements applicable in Finland, which apply to the engagement we
have performed, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The auditor applies International Standard on Quality Management
ISQM 1, which requires the firm to design, implement and operate a system
of quality management including policies or procedures regarding comp-
liance with ethical requirements, professional standards and applicable
legal and regulations 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 sta-
tements 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 primary statements of 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;
• whether the notes to the consolidated financial statements and the
company identification data included in the ESEF financial statements
data, have been marked up, in all material respects, with iXBRL tags in
accordance with Article 4 of the ESEF RTS; and
• whether 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 primary statements of the consolidated financial
statements, the notes to the consolidated financial statements and the
company identification data included in the ESEF financial statements of
Metsä Board Corporation identified as 743700KKB8Q035K38488-2023-
12-31-en.zip for the year ended 31 December, 2023 are, in all material
respects, marked up in compliance with the ESEF Regulatory Technical
Standard.
Our audit opinion on the audit of the consolidated financial statements
of Metsä Board Corporation for the year ended 31 December, 2023 is
set out in our Auditor’s Report dated 8 February, 2024. In this report, we
do not express any audit opinion or other assurance conclusion on the
consolidated financial statements.
Helsinki 22 February, 2024
KPMG OY AB
Kirsi Jantunen
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report
on Metsä Board Corporation’s ESEF Financial Statements
METSÄ BOARD CORPORATION
P.O. Box 20
FI-02022 Metsä, Finland
Visiting address: Revontulenpuisto 2 A
02100 Espoo, Finland
Tel. +358 10 4611
metsagroup.com/metsaboard
© Metsä Board Corporation 2023
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