Metsä Board Annual review 2023

METSÄ BOARD Annual review 2023

Cash flows of installments and interest payments of financial liabilities 2023

Market risk sensitivity 2023

Impact on equity exposure and annual transaction exposure

EUR million

2024

2025

2026

2027

2028

2029–

Total

Impact on annual transaction expo- sure (cash flow) incl. hedging

Bonds

249.2

249.2 176.1

Impact on financial assets and liabilities

Impact on net equity of foreign entities

Impact on annual transaction expo- sure (cash flow)

Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6

Loans from financial institutions

11.8

111.5

11.8

11.8 0.3 12.1

17.5

MEUR

Finance lease liabilities 1)

5.7

3.8

1.8

1.1

0.7

13.5

Interest rate risk (100 bp rise in interest rates) Effect on profit

Non-current interest-bearing liabilities total

17.5

115.4

13.6

262.0

18.3

438.9

1.8

2.3

Effect on other change in equity

0.5

Financial liabilities total Financial expenses total

17.5

115.4

13.6

262.0

12.1

18.3

438.9

Commodity risk (electricity price + 20%) Effect on profit

Strategy and financial targets

12.5 30.0

8.9

7.4

7.3

0.3

0.2

36.5

-8.6

-3.3

Financial liabilities and expenses total

124.3

21.0

269.3

12.4

18.5

475.4

Value creation

Effect on other change in equity

5.3

Guarantee agreements

0.2

1.3

1.6

FX risk (USD - 10%) Effect on profit

Financial development 10 Key figures 12

3.9

-69.1

-21.2

Derivatives Currency derivative, liabilities Currency derivative, receivables Interest rate swaps, liabilities Interest rate swaps, receivables Commodity derivatives, liabilities Commodity derivatives, receicables

Effect on other change in equity

51.3

-11.2

1,144.3 -1,168.1

FX risk (GBP - 10%) Effect on profit

Report of the Board of Directors

0.1

-11.7

-4.1

1.3

0.1

1.5

Effect on other change in equity

5.8

-0.4

20 72

• Sustainability statement • Sustainability statement assurance report

-2.0

-1.0

-3.0

FX risk (SEK - 10%) Effect on profit

4.1

-3.1

44.8

9.5

-0.2

Effect on other change in equity

-31.6

-69.8

Consolidated financial statements

Derivatives, net

-20.5

-0.9

-21.4

Market risk sensitivity 2022

78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board

Cash flows of installments and interest payments of financial liabilities 2022

Impact on equity exposure and annual transaction exposure

Impact on annual transaction expo- sure (cash flow) incl. hedging

EUR million

2023

2024

2025

2026

2027

2028–

Total

Impact on financial assets and liabilities

Impact on net equity of foreign entities

Impact on annual transaction expo- sure (cash flow)

Bonds

249.0

249.0 187.6

MEUR

Loans from financial institutions

11.8

11.8 4.3 16.1

111.3

11.8

11.8 0.5

29.3

Interest rate risk (100 bp rise in interest rates) Effect on profit

Finance lease liabilities 1)

6.7

2.8

1.0

2.0

17.3

2.3

3.1

Non-current interest-bearing liabilities total

18.5

114.0

12.7

261.3

31.3

453.9

Effect on other change in equity

0.9

Current interest-bearing liabilities

0.4

Commodity risk (electricity price + 20%) Effect on profit

-17.6

-7.4

Financial liabilities total Financial expenses total

18.9

16.1

114.0

12.7

261.3

31.3

454.3 42.8 497.1

Effect on other change in equity

10.2

9.8

9.7

8.1

7.4

7.3

0.5

FX risk (USD - 10%) Effect on profit

Financial liabilities and expenses total

28.7

25.8

122.2

20.1

268.6

31.7

0.1

-100.3

-30.4

Effect on other change in equity

64.9

-10.3

Guarantee agreements

0.4

0.1

0.3

1.2

2.1

FX risk (GBP - 10%) Effect on profit

0.1

-10.8

-3.8

Derivatives Currency derivative, liabilities Currency derivative, receivables Interest rate swaps, liabilities Commodity derivatives, liabilities Commodity derivatives, receicables

Effect on other change in equity

5.3

-0.4

1,815.3 -1,823.6

FX risk (SEK - 10%) Effect on profit

-10.0

53.4

7.3

-1.7 5.0 -6.7

-1.1

-0.4

-3.1 5.0 -6.7

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

Derivatives, net

-11.7

-1.1

-0.4

-13.2

1) Cash flows from lease liabilities include both debt repayment and financing expense.

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.

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).

170 Remuneration report 174 Investor relations and investor information

112

113

Consolidated financial statements | METSÄ BOARD ANNUAL REVIEW 2023