METSÄ BOARD Annual review 2023
8. Other notes
■ 7.2 Acquisitions and operations disposed of
■ 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: 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.
Transactions with parent company and sister companies
Transactions with parent company
Transactions with sister companies
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
■ 8.1 Contingent liabilities, assets and commitments
EUR million
2023
2022
2023
2022 172.9
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.
Sales
9.6 5.0
24.8
112.3
Other operating income
5.4
-3.4
1.2
Purchases
213.4
167.0
460.4
693.9
Share of result from associated companies
Key estimates and judgementsa
Strategy and financial targets
163.1
30.8
8
Value creation
Dividend income Interest income Interest expense
0.0 9.4 0.4
0.0 2.3 0.9
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.
-0.1
0.0
Financial development 10 Key figures 12
Receivables
Trade receivables and other receivables
1.6
4.2
49.8
80.4
Report of the Board of Directors
Cash equivalents
278.4
338.6
20 72
• Sustainability statement • Sustainability statement assurance report
Liabilities Trade payables and other liabilities
23.8
9.5
46.6
76.8
74
Consolidated financial statements
Commitments
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
Transactions with associated companies and joint ventures
EUR million
2023
2022
Leases not yet commenced to which the Group is committed
1.6
1.5
EUR million
2023
2022
Metsä Tissue Group Metsä Fibre Group Metsä Forest Sverige Ab
Other commitments
3.8 5.3
Sales
0.5
0.7 4.2
Total
1.6
Purchases
0.1
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.
Receivables Trade receivables and other receivables
Commitments include granted pledges, mortgages and floating charges as well as guarantees.
0.2
0.1
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).
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.
Investment commitments
EUR million
2023
2022 132.0
Payments due in following 12 months
69.7
Hämeenkyrön Voima Oy
Payments due later
0.8
1.6
Total
70.5
133.5
EUR million
2023
2022
Intangible assets
1.3
Property, plant and equipment
29.6
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.
Trade receivables and other receivables
3.2 0.9
Cash and cash equivalent
Total assets
35.0
Deferred tax liabilities
0.0 16.7
Financial liabilities, non-current Financial liabilities, current Trade payables and other liabilities
1.3 2.8
Total liabilities
20.8
Net assets
14.2
170 Remuneration report 174 Investor relations and investor information
Acquisitions cost
14.5
■ 8.2 Events after the financial period
Goodwill / Other operating expenses
0.2
The Group has no events after the financial period.
Acquisition price
-14.5
Cash and cash equivalents in subsidiaries Net cash flow arising on acquisitions
0.9
-13.6
124
125
Consolidated financial statements | METSÄ BOARD ANNUAL REVIEW 2023
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