METSÄ BOARD Annual review 2023
Parent company accounts ■ Cash flow statement
Parent company accounting policies
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
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.
EUR
1.1.–31.12.2023
1.1.–31.12.2022
CASH FLOW FROM OPERATING ACTIVITIES Profit/loss before appropriations and taxes
Strategy and financial targets
147,533,948.90
128,942,812.52
8
Value creation
Adjustments to profit/loss a)
-85,927,509.95
-47,715,398.92
Interest received
21,422,500.02 -12,275,116.16 82,767,207.10 -3,570,452.49 29,642,145.48 79,748,470.25 259,341,193.15
9,472,006.62 -10,680,827.37 59,142,897.83 -10,999,779.03 -49,996,551.31 -109,960,671.71 -31,795,511.37 -15,767,840.00 -78,185,167.01 25,241,080.85 16,878,690.70 40,771,107.52 -19,342,971.29 -30,405,099.23
Interest paid
Financial development 10 Key figures 12
Dividends received
Other financial items, net
Income taxes paid
Report of the Board of Directors
Leasing Lease payments are treated as rental expenses.
Change in net working capital b)
20 72
• Sustainability statement • Sustainability statement assurance report
Net cash flow from operating activities
INVESTMENTS Acquisition of other shares
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
74
Consolidated financial statements
Investments in tangible and intangible assets
-87,896,874.00 4,757,354.04
Proceeds from disposal of shares in affiliated companies,
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
Proceeds from other investments
Prodeeds from sale of tangible and intangible assets Increase and decrease of non-current receivables, net
59,000,151.81
Total cash flow from investing activities
-24,139,368.15
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 -145,782,413.01 60,899,777.40 -55,889,483.28 2,399,500.72
Dividends paid and other profit distribution
-205,740,701.92
Increase in non-current liabilities
Payment of non-current interest bearing liabilities
-11,764,705.88 4,738,469.29 30,000,000.00 -55,479,374.52
Change in other non-current liabilities
Change in current non-interest bearing liabilities, net
Increase or decrease in interest bearing current receivables, net
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 Change in cash and cash equivalents Cash and cash equivalents closing balance
13,371,673.53 -3,044,480.63 10,327,192.90
24,353,833.76 -10,982,160.23 13,371,673.53
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.
a) Adjustments to profit/loss Depreciations and impairment charges
50,438,167.30 -85,616,613.08 -50,778,155.17
48,392,956.43 -32,576,332.67 -62,501,763.33 -1,030,259.35 -47,715,398.92
Financial income and expenses
Gains or losses on sale of fixed assets
Change in provisions
29,091.00
Total
-85,927,509.95
170 Remuneration report 174 Investor relations and investor information
b) Change in net working capital Inventories
63,680,745.14 84,830,229.14 -68,762,504.03 79,748,470.25
-57,800,939.75 -39,982,068.72 -12,177,663.24 -109,960,671.71
Change in current receivables, non-interest bearing Change in current liabilities, non-interest bearing
Total
128
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Parent company financial statements | METSÄ BOARD ANNUAL REVIEW 2023
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