Our strategy highlights solutions that promote circular economy
METSÄ BOARD Annual review 2024
PACKAGING MATERIALS AND ANNUAL GROWTH
(+4.2%/y) (+3.2%/y) (+5.1%/y) (+3.5%/y) (+2.9%/y) (+2.8%/y)
Paperboard packaging �������������������������������������������� 32% Other fibre-based packaging ����������������������������������� 14% Flexible plastic packaging ���������������������������������������� 17% Rigid plastic packaging �������������������������������������������� 19% Metal packaging �������������������������������������������������������� 13% Glass packaging ���������������������������������������������������������� 5%
THE GLOBAL PACKAGING MARKET VALUE IS USD 1.175 BILLION AND IT IS GROWING BY 3.9% PER YEAR (2023– 2028) (Source: Smithers)
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Strategy and financial targets
Our competitiveness is based on premium products and services, as well as on the efficiency of our industrial operations. Our strategy emphasises packaging solutions that promote circular economy, replacing use of plastic. In 2024, we implemented our strategy and vision through a number of measures.
THE DEMAND OUTLOOK FOR LIGHTWEIGHT FRESH FIBRE PAPERBOARDS IS GOOD IN THE LONG TERM
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Value creation
Brand-owners set targets to reduce the carbon footprint of packaging
Financial development 10 Key figures 12
GLOBAL ANNUAL GROWTH RATE OF FOLDING BOXBOARD IS 4.2% AND OF WHITE KRAFTLINERS 2.2% (2023–2035) (Source: AFRY)
The availability and quality of recycled fibre decreases as paper consumption decreases
Report of the Board of Directors
Consumers prefer alternatives to fossil-based packaging materials
20 20 37 70 89 96
• Sustainability statement
Population growth, urbanisation and rising living standards increase the need for packaging
General information
Regulation favours recyclable packaging materials
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.
E – Environment
S – Social responsibility
G – Governance
Annexes to the Sustainability statement
Financial targets and dividend policy
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
COMPARABLE RETURN ON CAPITAL EMPLOYED, %
INTEREST-BEARING NET DEBT / COMPARABLE EBITDA
DIVIDEND / NET RESULT Target: at least 50% Actual 2024: 98%
Target > 12% Actual 2024: 3.2%
Target < 2.5 Actual 2024: 2.0
Values
25
2.5 2.0
100
20
80
1.5 1.0 0.5 0 -0.5
Reliability • Cooperation • Responsible profitability • Renewal
15
60
10
40
5
20
0
0
20 21 22 23 24
20 21 22 23 24
20 21 22 23 24
Strategic programmes We have five strategic programmes. Each programme has objectives and concrete measures that contribute to our growth in fibre-based packaging materials and the renewal of our industrial operations.
In 2024, profitability was weakened by lower prices for folding boxboard, as well as several unexpected events beyond our control. The cost level remained high.
Our financial position remains solid. The ratio of interest-bearing net debt to EBITDA has risen due to due to weaker profitability.
In 2024 we renewed our divdend policy. Metsä Board’s target is to distribute an annual dividend of at least 50% of the result for the financial period over time, taking into account the company’s future investment and development needs.
STRATEGIC PROGRAMME
TARGET
MAIN ACTIONS IN 2024
Premium supplier
High-quality and reliable products and services with excellent customer experience
- Sale of Husum and Kemi’s new paperboard capacity - Improving supply chain resilience - Customer satisfaction, Net Promoter Score of 33
Sustainable and profitable investments With targeted investments, we plan to implement our stra- tegy to grow in fibre-based packaging materials, increase the production and resource efficiency of our mills, and reduce the carbon footprint of our products. Over the past three years, we have completed significant development and gro- wth investments that have increased our production capacity and improved the cost competitiveness of our production units. We expect the investments to significantly improve our profitability in the coming years.
Effective innovation
Developing packaging solutions, lightweighting packaging and reducing plastic
- Customer workshops in Äänekoski, 49 workshops in total - Improving quality of folding boxboard produced at Simpele mill - Pre-engineering to improve performance of Kyro mill’s barrier boards
In 2024, we also decided not to invest in a new board mill in Kaskinen. The cost of the planned investment was signi- ficantly higher than our initial estimate, and the investment would not have achieved the profitability targets that were set. At the same time, we announced that we will launch several other investments to improve competitiveness that will support our targets for fossil-free production and reduce the use of plastic in packaging.
Safe and efficient operations and organic growth
Continuous improvement of occupational safety and opertional efficiency, growth investments
- Targeted programmes to improve occupational safety - Implementation of Simpele mill investment plan and planning of future investments
Leader in sustainability
Fossil-free production and products by 2030 - Definition and prioritisation of planned investments to achieve taget of fossil-free production and products - Renewed turbine of Kyro bioenergy plant
196 Remuneration report 201 Investor relations and investor information
Motivated people
A diverse, equal and inclusive culture with well- being at work and continuous skills development
- Anonymous recruitment as main recruitment method - Personnel survey combined with ethics barometer - Metsä Group’s internal academy trainings
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Business operations and value creation | METSÄ BOARD ANNUAL REVIEW 2024
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