Our strategy highlights solutions that promote the circular economy
METSÄ BOARD Annual review 2023
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Strategy and financial targets
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
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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Value creation
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.
Financial development 10 Key figures 12
Report of the Board of Directors
20 72
• Sustainability statement • Sustainability statement assurance report
74
Consolidated financial statements
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.
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
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
Values
Safe and efficient operations and organic growth
Reliability Cooperation Responsible profitability Renewal
Leader in sustainability
Motivated people
Our financial targets
Megatrends
170 Remuneration report 174 Investor relations and investor information
COMPARABLE RETURN ON CAPITAL EMPLOYED %
INTEREST-BEARING NET DEBT / COMPARABLE EBITDA
DIVIDEND / NET RESULT
Population growth Climate change Digitalisation Urbanisation Biodiversity loss
25
2.5 2.0
100
20
80
1.5 1.0 0.5 0 -0.5
15
60
10
40
5
20
0
0
19 20 21 22 23
19 20 21 22 23
19 20 21 22 23
Target > 12%
Target < 2.5
Target > 50%
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Business operations and value creation | METSÄ BOARD ANNUAL REVIEW 2023
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