Metsä Board Annual Review 2024

METSÄ BOARD Annual review 2024

Focus on profitability

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

We have proven evidence of low carbon footprint of our paperboards, which is becoming increasingly important for our customers.

Strategy and financial targets

In 2024, we continued implementing our strategy through investments and development projects. In the current challenging market situation, securing the competitiveness and profitability is increasingly important. We have a strong foundation based on top professionals, high-quality products, and a solid financial position.

Value creation

Financial development 10 Key figures 12

Report of the Board of Directors

20 20 37 70 89 96

• Sustainability statement

General information

Volatility in the market The year 2024 started positively, as paperboard demand picked up from the previous year’s record low level. In the second half of the year, activity slowed down, and our total paperboard deliveries, roughly 1.5 million tonnes, remained below our capacity. Similar to the previous year, we adjusted our production at several mills to match low demand. Despite the slight increase in consumer purchasing power, demand for fresh fibre paperboards continued to be curbed by cautious purchasing behaviour and consumption focusing on services rather than products. The paperboard market has also been impacted by the strong growth in Asian paperboard capacity and increased paperboard imports, especially to Turkey, the Middle East and South America. Volatility was also seen in the pulp market. In Europe, demand was clearly stronger in the first half of the year compared to the second half. In China, market pulp purchases were at a near standstill from summer to early autumn. The increase in softwood market pulp prices was not enough to compensate for the negative impact of low delivery volumes and high production costs, and this was also reflected in the profitability of our associated company, Metsä Fibre. The second consecutive challenging year In 2024, our sales were EUR 1.9 billion, and our comparable operat- ing result was EUR 69 million. Our return on capital employed was around 3%, compared to our target of at least 12%. In addition to muted sales, our profitability was negatively affected by high-cost level, for which we must continue to prepare. The price level of pulpwood, our main raw material, has nearly doubled over the last three years. The supply of northern pulpwood has decreased con- siderably due to the discontinuation of wood imports from Russia, while wood consumption has at the same time increased. In 2024, unexpected events beyond our control also weighed on our results. In the first half of the year, political strikes in Finland stopped the transport of goods to our mills, and we had to halt production at nearly all our Finnish mills. In March, a gas explosion

occurred at Metsä Fibre’s Kemi bioproduct mill, shutting down the integrated mill’s pulp production for several weeks, which affected our linerboard production. Thanks to our organisation’s profes- sional action and cooperation with Metsä Group mills, we restarted linerboard production faster than expected and minimised the negative impact on our customers. Our financial position remains solid, although the ratio of net debt to comparable EBITDA rose to 2.0. However, this was mainly due to weaker profitability. The Board of Directors proposes that we pay a dividend of EUR 0.07 per share for 2024, which corre- sponds to 98% of our net result. Investments targeted at sustainable growth In 2023, we completed two significant investments in Husum and Kemi, which increased our annual paperboard capacity by 240,000 tonnes. This capacity is expected to be fully available to the market as of 2026. In 2024, we also decided not to invest in Kaskinen, where a pre-feasibility study was underway for a new folding boxboard mill with an annual capacity of 800,000 tonnes. Our decision was due to the high cost level, which clearly exceeded our original estimate and meant that the investment no longer met our financial targets. However, the pre-feasibility study results were useful for the investment programme we launched in 2024 to mod- ernise the Simpele board mill. We are also planning investments at our other mills to improve the competitiveness of our products and mills and achieve fossil-free production by the end of 2030. Ensuring profitability and competitiveness is increasingly important To secure profitability, we have adjusted our production to match weaker demand and have temporarily laid off some of our personnel. We have focused on the customer relationships that benefit most from the performance and added value offered by our premium paperboards. We have invested in the maintenance of our mills and made targeted investments to further improve our

E – Environment

S – Social responsibility

G – Governance

Annexes to the Sustainability statement

98 Consolidated financial statements 102 Notes to the consolidated financial statements 150 Parent company financial statements 153 Notes to the parent company financial statements 166 The Board’s proposal to the Annual General Meeting for the distribution of funds 167 Auditor’s Report 171 Sustainability statement assurance report 173 Shares and shareholders 177 Ten years in figures 178 Taxes 179 Production capacities 181 Calculation of key ratios and comparable performance measures Corporate governance 183 Corporate governance statement 190 • Board of Directors of Metsä Board 194 • Corporate Management Team of Metsä Board

proven evidence of low carbon footprint of our paperboards, which is becoming increasingly important for our customers. International brand owners wish to reduce the use of plastic in their packaging materials and improve the recyclability of packaging. Our products and services help them in reaching their goals. Last year, our Excellence Centre in Äänekoski hosted a record number of customer cooperation projects aiming to improve the sustain- ability and performance of packaging. Lightweight, high-quality fresh fibre paperboard is well positioned to respond to increasing regulation. I feel confident about Metsä Board’s future. We have previously demonstrated our ability to tackle challenges in a changing operating environment and create added value for our various stakeholders. I want to thank Metsä Board’s employees for a job well done and all our customers, shareholders and other partners for their trust and good cooperation.

competitiveness. Our high self-sufficiency in pulp and energy also offers us a significant advantage. However, our profitability is cur- rently unsatisfactory, and we must continue our efforts to improve it. It is a key priority to ensure that all our production units are cost-competitive in the prevailing market and economic situation. Heading into 2025, we announced our plans to shut down the Tako board mill and improve operational efficiency at the Kyro board mill. We have initiated change negotiations at both mills. No decisions concerning the mill’s shutdown and personnel reductions will be made until the change negotiations have been concluded. Long-term growth drivers remain strong In line with our strategy, we aim to grow in fibre-based packaging materials and renew our industrial operations. Population growth, urbanisation and plastic replacement remain strong trends that will increase long-term demand for fibre-based packaging. We will also continue our efforts to advance sustainability. Our aim of fossil-free production and products by the end of 2030 will also help our value chain operators achieve their sustainability targets. We have

196 Remuneration report 201 Investor relations and investor information

Mika Joukio CEO

CEO’s review | METSÄ BOARD ANNUAL REVIEW 2024