Annual Report
contents
2020
Holmen in brief
CEO’s message
Strategy and targets
Investment case
The year in brief
Forest
Paperboard
Paper
Wood Products
Renewable Energy
A sustainable business
Employees
Corporate governance report
Risk management
Shareholder information
03
04
06
10
14
16
18
20
22
24
26
34
36
41
46
Financial statements
Notes
Proposed appropriation
of profits
Auditor’s report
Review of Sustainability Report
Board of Directors
Group management
Key figures
Ten-year review, finance
Five-year review, sustainability
Business overview
Definitions & glossary
Calendar & information
48
54
79
80
83
84
86
87
88
90
92
94
95
100 % Holmen-produced
This entire annual report is made using Holmen’s
own products. The cover is printed on Invercote G,
manufactured at Iggesund Mill. This is a paperboard
The Board of Directors and the CEO of Holmen
The basis for the sustainability information
Aktiebolag (publ.), corporate identity number
presented is the issues identified as key in view of
556001-3301, submit their annual report for
the materiality analysis conducted in 2018.
with high whiteness and a smooth, matt surface.
the parent company and the Group for the 2020
The Sustainability Report has been compiled in
The paperboard is ideal for graphical products
financial year. The annual report comprises the
accordance with the Global Reporting Initiative’s
with a surface finish. The insert is printed on
Holmen TRND, which is manufactured at Hallsta
Paper Mill. This is an uncoated, matt magazine
administration report (pages 2, 6–9, 14–15, 32–47,
GRI guidelines at Core level. The report comprises
79, 84) and the financial statements, together
pages 2, 4–7, 15–43, 46–47, 49, 59, 61–64, 73,
with the notes and supplementary information
76, 83–86, 90–93 and the GRI index on the website
paper that offers a wide range of options in terms
(pages 48–78). The statutory sustainability report
holmen.com. The information is audited by a third
of bulk, grammage and shade. Both Holmen TRND
in accordance with the Annual Accounts Act is
party, see separate assurance report at
and Invercote G are made using fresh fibre from
included in the annual report (pages 8–9, 32–35,
holmen.com.
sustainably managed forests.
38–40, 42–43). The Group’s consolidated income
statement and balance sheet and the parent
This is a translation of the Swedish annual report
company’s income statement and balance sheet
of Holmen Aktiebolag (publ.). In the event of
will be adopted at the Annual General Meeting.
inconsistency between the English and the Swedish
versions, the Swedish version shall prevail.
The cover is printed on Invercote G 280 gsm. The insert is printed on Holmen TRND 2.0 – 80 gsm. Layout: Identity Works. Production: Gylling Produktion AB.
Photos: Jake Fagan, Fredrik Schlyter, Ulla-Carin Ekblom and others. Print: Åtta.45.
2
Holmen Annual Report 2020
Holmen
in brief
The growing trees, the water rushing
down the mighty rivers and the wind
blowing through the treetops. This
is the heart of Holmen, a business
that is all about owning and refining
forest. From seedling to plank, paper
and paperboard.
We make maximum use of the raw mate
rial from the forest. In fact, thanks to our
efforts nothing goes to waste. The most
valuable parts of the log are used to make
wood products. The smaller parts of the
tree – wood from thinning and chips from
the sawmills – are turned into paperboard
and paper at our mills. What’s more, residual
products such as bark and wood shavings
are used to produce bio energy. But what
about the water and the wind? They are
used to make renewable energy. The fact is
that, combined with the renewable energy
produced in our mills, hydro power and wind
power equate to an increasing proportion of
our electricity use.
And so it continues. We plant new
seedlings and manage the growing trees
responsibly, creating productive forests
that give us more raw material to refine.
The value of the forest takes
many forms
Holmen creates longterm value and has
fantastic potential for the future. Our way
of managing the forest ensures that it pro
vides 80 beneficial years before harvest.
Alongside the economic value that we cre
ate, our way of managing the forest brings
significant climate benefits, along with
preserving biodiversity, jobs, thriving rural
communities and recreation in Sweden’s
natural heritage.
Our customers are able to embrace
climatesmart building in wood, replace
less environmentally friendly packag
ing with the world’s best paperboard, and
print on paper with the unique properties of
fresh fibre. And with green electricity from
water and wind, we also contribute to a
sustainable energy supply.
We are proud that Holmen delivers
concrete solutions to some of society’s
major challenges and that our business
contributes to a better climate.
2020 in figures
Net sales
16 327 SEKm
Operating profit
2 479 SEKm
Cash flow
2 411 SEKm
No. of employees
2 974
Total shareholder return Holmen B and OMX Stockholm
Index
600
500
400
300
200
100
0
11
12
13
14
15
16
17
18
19
20
Jan 21
Holmen B
OMX Stockholm 30 (OMXS30)
Holmen in brief
Holmen Annual Report 2020
3
CEO’s message ↘
Dear sHareHolDer
Although the coronavirus pandemic has been a significant
feature of our lives, we can report that our business has stood
firm and operating profit for 2020 was good, at SEK 2 479 million.
We are pleased to have added Martinsons to the Group, thus
advancing our position in sustainable wood construction and
expanding our opportunities to add value to our own raw material.
Putting the pandemic to one side, 2020 was the year that
the climate firmly established itself on the global stage.
The EU raised its ambition to phase out fossil car bon di
oxide, while China tightened its national climate goals
and in early 2021 the USA rejoined the Paris Agreement.
The world is now embarking on a journey that will have a
revolutionary effect on all manufacturing industry, where
energy systems that are currently almost exclusively
fossil-based will have to change. It is not enough just to
make the electricity renewable – all industrial processes
need to be electrified and the way that buildings are con
structed must be reformed. Achieving this transition will
require major investment and all products will have to
carry the cost of their climate impact.
The transition will dramatically increase demand for
electricity, both in Sweden and across the rest of Europe.
We have long produced hydro power, a renewable and
controllable means of electricity generation that can be
regulated to the times when it is most needed. This is
now being complemented by wind power, which we are
establishing costeffectively on our own land. Our ex
tensive land holdings offer huge potential, but progress
will take time due to the long permit processes.
Products for the future
It is also becoming increasingly clear that the forest and
its products fit naturally into a sustainable, fossil-free
future. This is true not least of wood products, which
store carbon dioxide when they are used in buildings
and reduce demand for products with a high carbon
footprint. During the year, the acquisition of Martinsons
and the investment in Braviken Sawmill have almost
doubled our wood products business, while at the same
time broadening our product portfolio. We now have an
excellent platform from which to continue growing.
Our manufacture of paperboard and paper also fits
in well with a sustainable society, since the production
is practically fossilfree, unlike that of many of our com
petitors on the continent, and when the products can no
longer be used, they provide the benefit of bioenergy.
With well-invested production facilities and fresh fibre
as our base, we are in an excellent position to develop
products that add value in the climate transition.
Overall climate benefit of the forest
The interest in owning forest is rising steadily and this
is hardly surprising, since the transition to a fossilfree
world has only just begun. The value to society is
reflected in the overall climate benefit that our forest
and our products delivered in 2020, totalling more
than 6 million tonnes of CO2e, which can be compared
with Sweden’s total emissions of a little over 50 million
tonnes. Contrary to what many might think, the main
contribution comes not from the carbon sequestration
in the forest; in fact the greatest benefit comes from the
ability of our products to replace alternatives that put a
heavy burden on the climate.
Strong result despite a tumultuous year
The pandemic initially threw up significant challenges
in keeping the whole business going, and created enor
mous uncertainty about how demand for our products
would pan out. We quickly adopted measures to make
the work environment safe for our employees, increased
our non-current financing, postponed investment deci-
sions and halved the dividend. Looking back on 2020,
we can report that the paper market was hit hard, but
we managed to compensate for this through increased
efficiency in the paperboard business and with the
help of rising wood product prices. At the same time,
the con tinued strong interest in owning forests has
impacted market prices for forest properties, raising
the value of the Group’s forest assets by 5 per cent to
SEK 43 billion.
In view of the good results for 2020, despite the
coronavirus pandemic, and our strong financial position
even after the acquisition of Martinsons, the Board pro
poses that the ordinary dividend be raised to SEK 7.25
per share, with an extra dividend of SEK 3.50 per share.
Holmen’s business, where we refine our forest raw
material into everything from wood for climatesmart
building to renewable packaging, magazines and books,
while at the same time we generate hydro and wind
power on our own land, is fully in tune with the times.
Our development opportunities are also being strength
ened as politicians in Europe accelerate the pace of the
transition towards a fossil-free society. We look to the
future with confidence.
Stockholm, 26 February 2021
Henrik Sjölund
President and CEO
4
Holmen Annual Report 2020
CEO’s message
“ Our development opportunities
are being strengthened as
politicians in Europe accelerate
the pace of the transition towards
a fossil-free society.”
CEO’s message
Holmen Annual Report 2020
5
Strategy and targets ↘
growing a
sustainable
future
Our business concept is to own
and add value to the forest
Holmen’s extensive forest holdings are the foun
dation of our business. Using our own production
facilities, the growing trees are refined into every-
thing from wood for climatesmart building to
renewable packaging, magazines and books, while
at the same time we generate hydro and wind power
on our own land. A business that not only creates
value for customers and shareholders, but also
contributes to a better climate and thriving rural
communities.
↘ Wood Products
The Wood Products business
will grow through products and
solutions for sustainable
construction.
↗ Paperboard
The Paperboard business will develop
on the basis of its position as a market
leader in the premium segment for
renewable consumer packaging.
6
Holmen Annual Report 2020
Strategy and targets
← Forest
Forest growth and future
harvests will increase through
active and sustainable forestry.
A strong position in the wood
market will enable the develop
ment of Holmen’s production
facilities.
↙ Renewable Energy
The Renewable Energy business
will grow by establishing wind
power on Holmen’s own land.
← Paper
The Paper business will be developed
by offering resource-efficient alterna
tives to traditional products.
Strategy and targets
Holmen Annual Report 2020
7
Strategy and targets ↘
we aim to create value tHat
stanDs tHe test of time
wHile contributing to
a better climate
Forest
The forest is sustainably managed to pro
vide a good annual return and stable value
growth. Growth and harvests will increase
over time.
In 2020, a new harvesting plan was
drawn up for 2021–2030, under which the
annual harvest will increase by 0.1 million m3
compared with 2016–2020, while keeping
the amount of thinning unchanged.
Industry
The industrial operations are run with a
focus on long-term profitability. The target
is for a sustained return of over 10 per cent
on capital employed.
The return for industrial operations
amounted to 12 per cent, with Paperboard
and Wood Products exceeding the target by
a good margin, while the return for Paper
was weak.
Renewable energy
The production of renewable energy will
increase by complementing our existing
hydro power with wind power on our own
land.
Due to a good supply of water, the pro
duction of hydro and wind power was higher
than normal, reaching almost 1.4 TWh.
2021 will see the wind farm in Blåbergsliden
become operational, which is expected
to boost the Group’s annual production of
renewable energy by a little over 400 GWh.
Annual harvest, ’000 m3sub/year
Industry’s return on capital
employed, %
Production of hydro and
wind power, GWh
3 500
3 000
2 500
2 000
1 500
1 000
500
0
2001-
2005
2006-
2010
2011-
2015
2016-
2020
2021-
2025*
Harvest
Storms & other events
Thinning
*Forecast
15
10
5
0
12
16
17
18
19
20
1 600
1 200
800
400
0
1 352
16
17
18
19
20
8
Holmen Annual Report 2020
Strategy and targets
Climate benefit
We will contribute positively to the climate
through higher growth in our forests, prod
ucts that replace fossilbased alternatives
and reductions in the fossil emissions along
our value chain. Furthermore, expanding
wind power will play its part in the transition
to a fossilfree energy system in Europe.
In 2020, Holmen’s operations helped to
generate a climate benefit of over 6 million
tonnes of CO2e, with positive contributions
from all the business areas. For further
information, see page 30.
Capital structure
Our financial position is to be strong in
order to secure room for manoeuvre when
making longterm commercial decisions.
Net financial debt will not exceed 25 per
cent of equity.
At year end, the financial position re
mained strong, with a debt/equity ratio of
10 per cent.
Dividend
Holmen will generate a good annual dividend
for shareholders. The level is determined
by the Group’s profitability, investment
plans and financial situation. The dividend
is supplemented with share buybacks
where this is judged to create longterm
value for shareholders.
Based on a weighted assessment of the
effects of the coronavirus pandemic, the
decision was taken to pay a dividend of
SEK 3.50 per share in autumn 2020. The
Board proposes that the 2021 AGM approve
a dividend of SEK 7.25 per share and an ex
tra dividend of SEK 3.50 per share.
Climate benefit, million tonnes CO2e
Net debt as % of equity
Dividend per share, SEK
8
6
4
2
0
6.4
16
17
18
19
20
40
30
20
10
0
10
16
17
18
19
20
12
9
6
3
0
Proposal
3.50
Proposal
7.25
16
17
18
19
20
Ordinary dividend
Extra dividend
Strategy and targets
Holmen Annual Report 2020
9
Investment case ↘
we let tHe forest grow anD give
Holmen provides solutions to some of society’s biggest challenges
– meeting the needs of a growing population while at the same time
reducing climate change.
Growing demand for renewable
and fossil-free products
Demand for raw materials and products
that are renewable, recyclable and fossil
free is on the rise, a trend being accelerated
by political decisions and increasing aware
ness among consumers. Active forestry is
boosting the growth in our forests, but the
supply of forest raw materials is limited,
while at the same time global demand is
expected to increase, for both logs and
pulpwood.
Population growth and urbanisation,
coupled with surging ambitions for sus
tainable construction, are driving the wood
products market. Demand for paperboard
and paper is being fuelled largely by eco
nomic and population growth, as well as
behavioural changes and increased digi
talisation. The desire to reduce climate
impacts and avoid plastic packaging is a
strong driving force promoting greater use of
paperboard. Digitalisation has led to a drop
in demand for printing paper, but certain
segments are standing up well to the com
petition from digital media, including the
traditional book market.
Electricity consumption is expected to
rise due to electrification of transport and
industrial processes. As fossil energy is
phased out, renewable electricity produc
tion will take on even greater significance
in the future.
Sustainable value creation
As a Swedish forest company, we have a
fantastic opportunity to help bring about
solutions to some of the world’s major
challenges – climate change in particular.
Our growing forests reduce the amount
of carbon dioxide in the atmosphere, our
products replace fossil alternatives and our
production of hydro power and wind power
contributes to the transition towards a
renewable energy system in Europe.
We are a partner for sustainable business,
and our investments in higher production of
wood products and wind power are strength
ening our position in areas with consider able
development potential, while at the same
time our contribution to a better climate is
increasing.
10
Holmen Annual Report 2020
Investment case
tHe value of owning forest
The forest is a fantastic asset. In the
drive to become less dependent on
fossil raw materials, forest products
have a key role to play and demand
for them will increase over time.
Advanced forestry is increasing the growth
in the forests and with it the amount of re
newable raw material, but the potential is
limited to the areas that are available for
forestry. The fact that Holmen owns 1.3
million hectares of land provides fantastic
opportunities to create value over time.
The growth in the forest is the result of our
active and sustainable forest management,
which begins with the seed – we raise our
own seedlings and reforest all the areas that
are harvested. Because the annual growth
is greater than the harvest, the amount of
wood in our forests is also increasing year on
year, which means that we will gradually be
able to harvest more in the future. In 2020,
Holmen’s total volume of standing timber
amounted to 124 million m3 growing stock,
solid over bark, which is 5 per cent higher
than 10 years ago.
Revenue from our forest holdings
Owning forest naturally provides a chance to
earn revenue when the forest is harvested.
The best prices are achieved for the large
logs that are turned into timber for buildings
and furniture, for example. Holmen uses
the narrower part of the tree and wood
from thin ning, along with residual wood
chips from the sawmills, to manufacture
paperboard and paper for packaging, books
and other graphical printing. In addition to
logs and pulpwood, treetops and branches
have their own uses and are sold as forest
fuel for the production of district heating
and so on.
Wind power. Owning forest land also
provides opportunities for other revenue
streams, not least by developing wind power.
With our extensive forest holdings, we have
a unique opportunity to identify and develop
areas that are favourable for wind power.
As we continue to initiate projects on our
own land, the ongoing investment in the
Blåbergsliden Wind Farm, due on stream
in late 2021, is set to boost our production
of hydro and wind power to approximately
1.6 GWh per year. There are currently 157
wind turbines in use or under construction
on our land. With several wind projects in
various stages of development, we have an
opportunity to continue expanding wind
power within Holmen.
Housing and quarrying. Where parts of our
land holdings are located near centres of
population, in southern and central Sweden,
and in tourist areas close to the mountains,
the potential exists to develop the land
for housing and holiday accommodation.
Extracting stone and gravel from our own
land for use in projects such as road build
ing is another possibility for landowners
such as Holmen.
The value of the forest is confirmed
by current transactions
A large number of forest property transac
tions are carried out every year. Holmen’s
forest assets are recognised at fair value
based on the prices paid for forest proper
ties in the areas where we have our forest.
As of 31 December 2020, the book value
stands at SEK 43 202 (41 345) million,
which averages out at SEK 41 420 per hec-
tare of productive forest land. The value var
ies across the country, with forest pro per
ties in southern Sweden being valued much
higher per hectare as a result of a greater
volume of standing timber, higher wood
producing capacity, a shorter harvesting
cycle and greater demand for forest land.
In 2020, a new harvesting plan was
drawn up for the period 2021–2030
in which the annual harvest is planned
to be 2.3 million m3 per year and
thinning will be 0.5 million m3 per
year. During the period 2016−2020
an average of 2.2 million m3 was har
vested annually and 0.5 million m3
was thinned. In addition, an average
of 0.1 million m3 per year was taken
out due to events such as storms
and spruce bark beetle outbreaks.
The new plan is not expected to
affect cash flow from the Forest
business area.
Planned harvest, ’000 m3sub/year
3 500
3 000
2 500
2 000
1 500
1 000
500
0
2001-
2005
2006-
2010
2011-
2015
2016-
2020
2021-
2025*
Harvest
Thinning
Storms & other events
*Forecast
Wood prices, SEK/m3sub
Price of forest properties, SEK/m3sub
600
500
400
300
200
2003
2005
2007
2009
2011
2013
2015
2017
2019
2004
2006
2008
2010
2012
2014
2016
2018
2020
Real
Nominal
800
600
400
200
0
2015
2016
2017
2018
2019
2020
Southern Sweden
Central Sweden
Northern Sweden
Source: Infotrader and Holmen’s calculations. Average prices based on market
transactions per county weighted together based on Holmen’s holdings in each
region. Rolling 3-year average.
Investment case
Holmen Annual Report 2020
11
Investment case ↘
“ Developing the energy business will provide
a substantial complement to our forestry
and industrial operations – an opportunity
that also supports Europe’s transition to
renewable energy.”
investing in winD Power
strengtHens our business
Blåbergsliden Wind Farm is currently
being built on Holmen’s land outside
Skellefteå. The investment, amount-
ing to an estimated SEK 1.3 billion,
will increase our production of renew-
able energy by 35 per cent to 1.6 TWh,
representing a significant step in the
development of Holmen’s renewable
energy business.
For Holmen, the establishment of large
scale wind power provides a logical comple
ment to our controllable hydro power. It is
also an effective way of obtaining added
value from our forest ownership, and addi
tional renewable electricity is positive for
both Sweden and the climate. Once the
wind farm is fully up and running in late
2021, the 26 wind turbines, with their com
bined capacity of 143 MW, will generate
renewable domestic electricity for the
equivalent of 100 000 homes each year.
According to a report by the Confedera
tion of Swedish Enterprise (reference page
95), Sweden’s demand for electricity is set
to rise by at least 60 per cent by the year
2045. This substantial increase is due to
the electrification of society and industry,
in part as a consequence of more recharge-
able cars and larger vehicles, the establish
ment of energyintensive data centres and
the electrification of industrial processes.
As a major landowner, Holmen has great
potential to play its part in the expansion of
wind power. In recent years have we con
ducted a survey and wind analysis of the
Group’s land holdings to identify favourable
areas for future installations. The analysis
showed that a number of sites are suitable
for wind power and the development of
largescale wind power on our own land is
judged to have good potential and provide
a good com plement to our controllable
hydro power. In addition to Blåbergsliden,
a permit application for another wind farm
in Västerbotten has been submitted, and
the ambition is to apply for environmental
permits for wind farms in Östergötland un
der 2021.
12
Holmen Annual Report 2020
Investment case
The investment in wind power will provide
Holmen with a stable cash flow that will
strengthen the company and provide op
portunities to continue developing the
business. As a major consumer of electri
city, the expansion in wind power will also
help to reduce our exposure to the vagaries
of energy supply and electricity prices.
Blåbergsliden Wind Farm
comprises 26 wind turbines. The
overall height of the turbines is
200 metres, measured from the
ground to the top of the blade.
Installed capacity per turbine
is 5.5 MW, giving a total figure of
143 MW for the whole wind farm.
Production capacity is affected by
the amount of wind, but the fore
cast for a normal year is just over
400 GWh.
Skellefteå’s new cultural centre will stand at around 80 metres
tall once all 20 floors have been completed. The structural
frame will use a total of around 10 000 cubic metres of CLT
and 2 200 cubic metres of glulam from Martinsons.
acQuisition aDvances Holmen’s
Position in wooD construction
In 2020, Holmen acquired Martinsons,
one of Sweden’s biggest names in
sawn and engineered wood products.
The acquisition almost doubles the
sales of wood products to a little over
SEK 3 billion.
Martinsons comprises two well invested
sawmills in northern Sweden providing
a comprehensive range of products for
Scandinavian wood construction, as well as
a project business for construction of com
plete frames made of crosslaminated tim
ber (CLT) and glulam beams for purposes
such as offices, sports halls, schools and
apartment buildings. The Bygdsiljum and
Kroksjön Sawmills are ideally located near
our forest holdings in northern Sweden,
allowing us to maximise the value of our
forest. Adding in the raw material flows from
Martinsons’ wood buying, we are strength
ening supplies to the whole of our industrial
operation.
In recent years, Holmen has been building
up its position with Swedish builders’ mer
chants, supplying quality products with high
value added. Martinsons has a broader pro
duct portfolio and some diffe rent builders’
merchants as customers. By combining our
existing offering with Martinsons’ pro ducts,
we can drive up sales to nationwide chains
of builders’ merchants.
Holmen’s production of wood products
has become an increasingly vital part of our
business, and the acquisition of Martinsons
has caused the Wood Products business
area to grow significantly. Demand for re-
fined wood products, especially CLT and
glulam beams, is growing and with rising
interest in wood construction we see great
opportunities to further develop the busi
ness. The acquisition advances Holmen’s
position in wood construction and gives us
the ability to process the majority of the
raw material from our own forests at our
own production facilities.
Martinsons comprises two sawmills
with wood processing plus a project
business for timberframed struc
tures. Annual wood consumption is
1 million m3, which corresponds to
Holmen’s annual harvest in northern
Sweden.
Bygdsiljum is a largescale saw
mill with annual production of
450 000 m3, of which 100 000 m3
is processed into CLT and glulam
for industrial construction and for
builders’ merchants.
Kroksjön produces 110 000 m3
wood products, of which 90 000 m3
is refined for builders’ merchants
through processes such as planing,
painting, cutting and pressure
treatment.
Investment case
Holmen Annual Report 2020
13
The year in brief ↘
Strong reSultS and
inveStmentS for the future
2020 was a year defined by the
coronavirus pandemic and its
far-reaching effects on both society
and the economy. Despite the pan-
demic, Holmen saw good profit for
the full year of SEK 2 479 million,
with higher production efficiency
in Paperboard and price increases
for wood products offsetting the
weak paper market. The year saw
Holmen acquire wood products
company Martinsons, doubling our
wood products business, and we
have also begun erecting a new
wind farm that is expected to in-
crease our production of renew-
able energy by over 400 GWh.
Demand for logs gradually rose over the
year, but was lower than normal for pulp
wood due to low capacity utilisation in
parts of the industry, and this led to slightly
lower pulpwood prices. Forest’s profits
climbed to SEK 1 367 million, due to a
change in accounting policy and the sale of
forest assets. The continued strong inter
est in owning forests has impacted market
prices for forest properties, which raised the
value of the Group’s forest assets by almost
SEK 2 billion to over SEK 43 billion.
Despite the effects of the pandemic,
consumption of paperboard for consumer
packaging increased during the year and
prices were stable. The annual maintenance
shutdown at Iggesund Mill was completed
successfully. Good production stability
and a solid product mix drove up profits for
Paperboard to SEK 812 million. The pan
demic had a considerable impact on demand
for paper, which fell by over 20 per cent dur
ing the year. Although our niche products
performed slightly better than the market
as a whole, we were forced to impose sig
nificant production curtailments. Coupled
with lower sales prices, this reduced Paper’s
profit to SEK 73 million. The market for
wood products saw positive development
over the year, driven by a strong US housing
market and a pickup in home renovation
projects, combined with a production
slowdown in several countries due to the
pandemic. Construction timber prices
increased sharply in the second half of
the year which, together with increased
production at Braviken Sawmill and the
acquisition of Martinsons, boosted profit
for Wood Products to SEK 185 million.
Electricity prices were low during the
year, due to a good supply of hydro power
and lower consumption than usual. Despite
increased production, profit for Renewable
Energy therefore fell to SEK 215 million.
Holmen’s financial position remains
strong, even after distribution of the divi
dend and the acquisition of Martinsons. The
Group’s net debt at year end amounted to
SEK 4 181 million, equating to 10 per cent
of equity.
Outlook
The strong wood products market is driving
demand for logs from the forest. After a
Key figures
2020
2019
Net sales, SEKm
Operating profit/loss, SEKm
Operating profit/loss excl. items affecting comparability, SEKm
Profit for the year, SEKm
Diluted earnings per share, SEK
Ordinary dividend per share, SEK
Extra dividend per share, SEK
Return on capital employed, %
Cash flow before investments and changes in working capital, SEKm
Cash flow from investments, SEKm**
Equity, SEKm
Net financial debt, SEKm
Net debt as % of equity
Average no. of employees (FTE)
16 327
2 479
2 479
1 979
12.2
7.25*
3.5*
5.6
2 411
1 924
42 516
4 181
10
2 974
16 959
11 115
2 345
8 731
52.6
3.5
-
8.9
2 727
1 050
40 111
3 784
9
2 915
*Board proposal. **Net including company acquisitions but excluding changes in non-current financial receivables.
14
Holmen Annual Report 2020
The year in brief
year of weaker demand for pulpwood due
to production curtailments, primarily in
the paper industry, there are signs that de
mand is beginning to rise again. Holmen
has worked tirelessly to prevent the spread
of the European spruce bark beetle in
southern Sweden, but the development of
the situa tion over the year depends largely
on external factors such as temperature
and precipitation.
The paperboard market rode out the
effects of the pandemic well. Holmen
continues working to gradually increase
sales to the most ambitious packaging
customers, as paperboard production be
comes even more efficient. The pandemic
has added extra momentum to the under
lying structural decline for paper. Although
announced shutdowns will improve the
market balance, the situation in the market
is expected to remain challenging, with
falling prices. Holmen remains committed
to its strategy of developing paper products
that make best use of fresh fibre and are
competitive over time. The acquisition of
Martinsons has doubled Holmen’s wood
products business. The focus in 2021 will
be on leveraging the broader product range
that has come from the acquisition and
building up sales to builders’ merchants and
largescale construction projects, while at
the same time continuing the develop ment
of existing production facilities.
With the energy market in Europe under
going a major transformation, increasing
electrification of both transport and industry
is set to drive up demand for more renew
able electricity. Blåbergsliden Wind Farm is
expected to become operational in autumn
2021, increasing the Group’s electricity
production.
Europe’s politicians have upped the pace
of the transition to a fossilfree society.
Holmen’s business, where we refine our
forest raw material into everything from
wood for climatesmart building to renew
able packaging, magazines and books,
while at the same time we generate hydro
and wind power on our own land, is fully in
tune with the times. In all, this brought a
climate benefit equating to over 6 million
tonnes of greenhouse gases in 2020.
Net sales and operating margin
Operating profit/loss and return
Operating profit*
Business area, %
SEKm
20 000
16 000
12 000
8 000
4 000
0
%
20
SEKm
2 500
16 327
15.2
16
2 000
12
1 500
8
4
0
1 000
500
0
15
16
17
18
19
20
2 479
5.6
4.8
15
16
17
18
19
20
Net sales
Operating margin*
*Excl. items affecting comparability
Operating profit*
Return on capital employed*
Return on equity*
*Excl. items affecting comparability
8
7
3
31
%
15
12
9
6
3
0
52
Forest
Paperboard
Paper
Wood Products
Renewable Energy
*Excl. Group-wide
Total: 2 479 SEKm
1 367 SEKm
812 SEKm
73 SEKm
185 SEKm
215 SEKm
Cash flow, SEKm
Net debt as % of equity
3 000
2 000
1 000
0
2 411
765
1 159
567
15
16
17
18
19
20
40
30
20
10
0
Investments
Dividend
Acquisitions
Cash flow before investments and
changes in working capital
Capital employed*
Business area, %
7
4
4
11
10
15
16
17
18
19
20
74
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Total: 46 697 SEKm
34 230 SEKm
5 276 SEKm
1 969 SEKm
1 846 SEKm
3 351 SEKm
*Excl. Group-wide
The year in brief
Holmen Annual Report 2020
15
Forest ↘
future-Smart foreStS
Holmen manages the forest
actively and sustainably. As well
as being a stable source of revenue
for Holmen, the forest brings major
climate benefits by capturing
and storing carbon dioxide and
reducing the need for fossil raw
materials.
Holmen’s forests cover 1.3 million hectares,
of which a little over a million hectares
comprise productive forest land. The stra
tegy is to increase the revenue from and
future value of the forest holdings through
active and sustainable forestry. As one
of Sweden’s biggest landowners, we are
largely able to supply Holmen’s Swedish
production units with renewable raw mate
rial from our own sources. Economies of
scale and efficient logistics give us a strong
position in the wood market, which boosts
competitiveness and enables the develop
ment of Holmen’s production facilities.
Actively managed forest benefits
the climate
By managing the forest, we are contributing
to a sustainable society. As the trees grow,
they absorb carbon dioxide, which is good
for the climate. What is more, the renewable
forest raw material replaces fossil alterna
tives, doubling the climate effect. In addi
tion, the larger the area managed, the more
carbon dioxide is captured. Forest that is
not managed does not deliver anywhere
near the same long-term benefits for the
climate, not least due to the reduction in
the substitution of products that are harm
ful for the climate.
Forestry constantly developing
The volume of standing timber in Holmen’s
forests is built up over 70–90 years and is
then harvested when it reaches maturity,
with a new growth cycle beginning after
harvest. The most important silviculture
measures come in the years immediately
after harvest, when the soil is prepared and
the land is reforested using seedlings and
seeds that are specifically tailored to the
location. The forest is cleaned and thinned in
order to select trees with the best potential
for continuing their growth. Around 10–30
years before the forest is harvested, it can
be fertilised to further boost growth. Holmen
invests around SEK 160 million a year in
future growth through silviculture and
fertilisation. Holmen’s forestry is certified
according to PEFC™ and FSC® and all the
wood is traceable.
Fossil-free seedlings. Holmen’s two nurse
ries – one in Gideå and one in Friggesund –
produce a little over 40 million seedlings
each year, the majority of which are planted
on our own land. During the year, Gideå
Nursery has switched to a biobased heat
ing system. In using wood chips from local
suppliers for the heating, we have taken a
major step towards making production at
our nurseries fully fossilfree. The nursery in
Friggesund uses a district heating system,
and over the year the plastic foam balls
previously used to protect seedlings from
weeds and drying out during the growing
phase have been replaced with wood
shavings.
Together with innovation and technology
development company SweTree Technolo
gies, Holmen is taking part in an initiative
to automate the production of improved
seedlings, based on the method of somatic
embryogenesis. This technology will allow
us to produce seedlings with higher growth,
better wood quality and greater disease
resistance.
Active forestry and biodiversity
We combine active forestry focused on high
growth with protecting the diversity of na
tural habitats and species in our forests. We
apply extensive environmental conservation
measures during harvesting. For example,
we leave old and dead trees in the forest
landscape, as well as trees along water
courses. We also conduct targeted initia
tives to increase the availability of habitats
that are in short supply, not least by restoring
wetlands or performing controlled burning.
In addition, we have identified almost
8 000 sites that we do not harvest. These
are either left to their own devices or we
carry out measures to protect and improve
habitat diversity. The aim is to ensure that
all naturally occurring species are able to
thrive in the Swedish forest landscape.
Learning more about
Swedish forests
Forestry is of major national, regional and
local significance. It creates employment in
rural areas and enables many people to live
16
Holmen Annual Report 2020
Forest
and work outside the major urban regions.
The significance of forestry for both the cli-
mate and the Swedish economy makes it an
issue that matters to many people. Holmen
and other industry players have joined for
ces to make politicians, authorities and the
general public aware of how vital the forest
is for the climate and the importance of
forestry for an emerging bioeconomy.
Holmen’s Knowledge Forests. To raise
awareness of our forestry and forest re
search, we have established Holmen’s
Knowledge Forests. These forests are spe
cifically intended to be places to explore,
gather and pass on knowledge about the
forest, and each section of the landscape
has been selected for its specific biological
conditions. It is also our way of showing
that sustainable forestry can promote
growth while at the same time increasing
biodiversity in the forest. Our first forest is
Kunnådalen, situated west of Örnsköldsvik.
Strong position in the wood market
The growing interest in building in wood
has driven up demand for logs in recent
years. Calls for different types of renewable
packaging material and largescale invest
ments in pulp mills have also helped to
drive up prices over several years. With the
imminent expansion of pulp capacity in the
Nordic region, competition for raw material
from the forest is expected to remain high.
However, production curtailments, primarily
in the paper industry, due to the pandemic
plus bark beetle outbreaks in southern
Sweden created a surplus of pulpwood and
chips during the year.
The acquisition of Martinsons has
strength ened our position in the wood
market in the north. With control over larger
volumes than we need for our own produc
tion facilities, we hold a strong position in
the market.
“ We combine active forestry
focused on high growth with
protecting the diversity of
natural habitats and species
in our forests.”
Key figures
Operating profit
↓ Comment on results
2020
2019
5 883
6 286
1 367
1 172
Net sales, SEKm
Operating profit/loss
excl. items affecting
comparability, SEKm
Investments, SEKm
207
77
Book value, forest assets,
SEKm
Average no. of employees
(FTE)
Volume from own forest,
’000 m3sub
43 202 41 345
384
376
2 841
2 699
SEKm
1 600
1 200
800
400
0
1 367
Demand for logs was good during the year,
but it was lower than normal for pulpwood
because of production curtailments in
the industry. Operating profit for 2020
amounted to SEK 1 367 million. A change
of accounting policy for forest assets and
the sale of forest properties had a positive
effect on the year’s results, compensating
for lower wood prices. Harvesting and
thinning of Holmen’s own forest stood at
a normal level and in line with the new
harvesting plan for 2021–2030.
15
16
17
18
19
20
Volume of standing timber,
m3 growing stock per hectare
of productive forest land
120
90
60
30
0
1948
1965
1988
2000
2020
1955
1975
1993
2010
Assessment of tax
Operating profit/loss
excluding items affecting comparability
Holmen’s forests 2020
Total land acreage
Total forest land acreage*
– of which nature conservation areas
Productive forest land**
Total volume of standing timber
on productive forest land
1 303 000 ha
1 153 000 ha
195 000 ha
1 043 000 ha
124 million m3 growing stock, solid over bark
* Analysis performed by the Swedish National Forest Inventory, according to the international definition of forest land:
Land area > 0.5 hectares with a tree canopy cover of more than 10 per cent for trees capable of reaching a height of
at least 5 metres at maturity.
** Forest land that can produce 1 m3 growing stock, solid over bark per hectare and year (on average during the growth
period of the forest stand).
Forest
Holmen Annual Report 2020
17
“ Our customers are reducing
their carbon footprint by
replacing fossil plastic
materials with paperboard.”
Key figures
Operating profit/loss and return
↓ Comment on results
Net sales, SEKm
Operating profit/loss
excl. items affecting
comparability, SEKm
2020
2019
6 187
6 229
812
435
SEKm
1 000
750
Investments, SEKm
275
421
500
Capital employed, SEKm
5 276
5 589
Average no. of employees
(FTE)
1 228
1 286
Deliveries, ’000 tonnes
544
538
250
0
812
15
15
16
17
18
19
20
%
20
15
10
5
0
European demand for paperboard increased
slightly over the year and selling prices
were stable. Profit for 2020 rose by almost
SEK 400 million to SEK 812 million. This
improve ment in profits is due to a better
product mix and lower production costs,
along with higher production after com
pleted investments in pulp production at
Iggesund Mill. Major maintenance shut
downs negatively impacted earnings
by SEK 110 million, compared with
SEK 210 million in 2019.
Operating profit/loss
excluding items affecting comparability
Return on capital employed,
excluding items affecting comparability
European demand for SBB and FBB
Holmen’s deliveries of paperboard
Mtonnes
4
3
2
1
0
11
12
13
14
15
16
17
18
19
20
18
Holmen Annual Report 2020
Paperboard
Ktonnes
600
500
400
300
200
100
0
11
12
13
14
15
16
17
18
19
20
Paperboard ↘
Premium PaPerboard for
conSciouS brandS
Holmen Iggesund is a market
leader in the manufacture of high-
quality paperboard for conscious
custo mers and brands with high
ambitions. The strategy is to grow
globally with two of the market’s
strongest brands by combining
high quality and custom products
with efficient production and first-
class service.
Holmen develops premium paperboard
for consumer packaging solutions in
sectors such as cosmetics, electronics,
pharmaceuticals, food and tobacco. The
paperboard is marketed under two brands:
Invercote and Incada. The products are
global market leaders due to their quality,
dur ability and excellent design properties.
Our facilities for paperboard production
and processing are located in Iggesund and
Strömsbruk in Sweden and in Workington in
the UK.
Close customer collaboration
on development
With its high and consistent quality, the
paperboard ensures stable results in the
customer’s production process. Products
are constantly being developed to meet the
growing demand for sustainable packaging
solutions. The customers’ need for support
and fast deliveries are priority areas that
covers everything from advice and product
samples to service centres with local sheet
ing units and warehousing. Via support
teams that maintain close contact with the
market and have a deep understanding of
the customer’s needs and wishes, we offer
expert advice before, during and after the
customer’s production process.
The service offering includes environ
mental documentation and access to analy
sis facilities at the company’s own accredit
ed laboratory for sensory and chemical
analysis, known as the taint and odour lab,
at Iggesund Mill. Coupled with the finishing
options at the lamination unit in Strömsbruk,
this means that we can offer custom solu
tions that meet the toughest requirements.
Fresh fibre delivers unique
properties
Both Invercote and Incada are manufac
tured entirely from fresh fibre, which brings
multiple product benefits. Higher strength,
better brightness and a neutral effect on
smell and taste in contact with food are just
a few of the properties that add clear value
to the end product. Achieving all this relies
on the use of fresh fibre and a multi-tiered
structure, with layers of different fibre types
forming the basis for the paperboard’s out
standing performance. Fresh fibre products
are also essential to keep the recycled fibre
industry going.
Sustainable production
Both of Holmen’s paperboard mills hold
chain-of-custody certification and all the
wood raw material comes from sustainably
managed forests. Our facilities are largely
self-sufficient in renewable thermal and
electrical energy. Iggesund Mill is integrated
with Iggesund Sawmill, ensuring that every
part of the tree is put to use on site in a
circular production process. Wood chips
from the sawmill are used as raw material
for the paperboard production, while bark
and wood shavings are used as biofuel to
produce energy and district heating. The
circle is closed when the surplus heat from
the mill is used for drying processes at the
sawmill.
A smarter alternative to plastic
Two strong trends in the packaging market
are the drive to reduce impacts on the cli
mate and the drive to avoid plastic packag
ing. Replacing fossil plastic materials with
paperboard cuts our customers’ carbon
footprint, while also reducing the amount
of plastic that can end up in the natural
environment.
New product for food packaging.
The launch of Inverform, a new paperboard
product specifically developed to replace
plastic and aluminium food packaging,
gained pace over the year. Inverform has
been designed for pressmoulded and
folded trays for packaging ready meals.
A barrier gives the paperboard resistance
to both moisture and grease. Inverform
based packaging has a substantially lower
carbon footprint than regular plastic trays
and can also be recycled in the existing
packaging collection system. In 2021 we
will also be launching a degradable bio
plastic that can be used as a barrier in our
products, as a complement to our standard
PE barrier.
These innovations are prime examples
of how we continue to develop purposeful
packaging solutions in collaboration with
our customers and partners.
A growing packaging market
Demand for packaging is rising in line with
factors such as population growth, urbani
sation, an expanding middle class and
more singleperson households. Demand
in the various product segments varies de
pending on the market, but there is a general
increase in demand for renewable packag
ing materials. This trend is being driven by
regulations against singleuse plastics and
growing environmental awareness among
consumers.
Greater demand for pharmaceutical
packaging. Demand for paperboard was
good over the year, particularly in food,
electronics and pharmaceuticals. The
pandemic did suppress demand for tax
free products such as confectionery and
alcoholic drinks.
However, we are proud to have delivered
our Incada paperboard for use in various
parts of the packaging for COVID-19 vac
cines. An effective partnership, based on
wellestablished relationships between the
paperboard factory in Workington and the
British pharmaceuticals industry, has made
it possible to adapt production and deliveries
to manage the need for packag ing material
at short notice.
Paperboard
Holmen Annual Report 2020
19
Paper ↘
innovative PaPer ProductS
from freSh fibre
of wood chips from the sawmill, which in
turn is supplied with energy and heat from
the paper mill. Surplus bark and wood
shavings are sold for the production of
renewable energy.
Focus on climate impact. Customer inter
est in the climate impact of the products
continues to increase. We are also seeing
growing interest in lifecycle analyses, where
fresh fibre-based paper is compared with
recycled fibre equivalents, for example.
Holmen’s paper performs strongly in these
comparisons and this trend is fully in line
with our strategy of helping our customers
to make their business more sustainable.
With our climate-smart products from
responsibly managed forests, this develop
ment is a welcome one.
The pandemic’s effects on a
challenging market
The coronavirus pandemic has caused a
marked drop in demand for printing paper
over the year. The pandemic has also ac
celerated the underlying structural decline
and a number of paper manufacturers have
decided to permanently close parts of their
business. This has reduced the available
capacity and balanced out the market. The
decline varies, however, between the dif
ferent segments. Book paper has recovered
best and by the end of 2020 was back to
prepandemic levels, while the demand in
paper for maga zines and printed advertis
ing remained subdued.
Holmen develops paper made
from fresh fibre for a number
of end- uses. Our papers are
lightweight compared to
traditional alternatives, making
them resource-efficient without
compromising on quality or the
ove rall impression. The focus
lies on delive ring and constantly
developing products that are
competitive over time.
Holmen is a market leader in the develop
ment of new paper products based entirely
on fresh fibre. With their unique properties,
our papers challenge more traditional alter
natives for books, magazines, printed ad
vertising and packaging. In contrast to re
cycled fibre products, fresh fibre produces
a naturally high brightness for an improved
experience of text and images. Holmen’s
paper products have high bulk, making
them thick yet light, which means that the
customer gets more paper with the same
feel at no extra cost. A lighter paper also
enables lower distribution costs.
Paper with the power
to communicate
The customers are largely publishers, print
ing firms and retailers looking for resource-
and cost-efficient papers with a focus on
bulk, brightness and overall impression.
We take a long-term approach in working to
meet customer demand and create profit-
able products in three segments: books,
magazines and printed advertising.
Book paper. Holmen’s book paper is the
leading product for paperback books in
Europe. Our carbonneutral paper with high
bulk helps customers to achieve efficiencies
in both production and distribution. Pub
lishers appreciate Holmen’s paper because
it offers product properties – in the form of
a bright, smooth surface – that enhance the
reading experience.
Magazine paper. Holmen offers a wide
range of magazine papers. The combina
tion of high bulk, whiteness and brightness
makes these products competitive alterna
tives, with a focus on the overall impression.
Printed advertising. Direct mail is still
considered an important communications
channel for driving customers to both phy
sical and digital stores. Holmen’s paper
creates opportunities for retailers, in the
form of pure savings on both paper and dis
tribution, or in the potential to increase the
format or the number of pages or copies,
without adding to the cost.
Paper products of the future
With a focus on processes and unique
product properties, we are continuing to
develop our position in a changing market.
Investments have boosted capacity in se
lected product areas and our development
of new paper products, including flexible
packaging such as bags and wrapping paper,
involves close collaboration with customers
and partners.
Recycled paper grows in the forest
Our paper is essential for the European pa
per recycling system. Forest resources are
limited in the rest of Europe and paper
manu facture is based on recycled paper
to a considerably higher extent. However,
paper cannot be recycled again and again
forever. After a limited number of times,
the wood fibre is exhausted. The ecocycle
there fore needs a constant injection of fresh
fibre. Environmental and chain-of-custody
certification enables Holmen to ensure that
the raw material for our products always
comes from sustainably managed forests.
Production in circular ecocycles
Our paper is produced at two Swedish
mills, Braviken and Hallsta. Favourable
locations in terms of logistics mean short
distances for wood transport, and the mills
are close to ports with good capacity and
efficient handling.
Uniquely, Hallsta Paper Mill has practi
cally zero emissions of fossil carbon dioxide.
The mill’s energy solutions include recover
ing heat from the wastewater and the paper
machines, selling the bark to heating plants
and composting residual products to create
topsoil.
Braviken Paper Mill and Braviken Saw
mill make an energy-efficient unit. The
paper mill receives raw material in the form
20
Holmen Annual Report 2020
Paper
“ With a focus on processes and
unique product properties, we
are continuing to develop our
position in a changing market.”
Key figures
Operating profit/loss and return
↓ Comment on results
2020
2019
Net sales, SEKm
4 879
5 757
Operating profit/loss,
SEKm
73
509
Investments, SEKm
280
187
Capital employed, SEKm
1 969
1 903
Average no. of employees
(FTE)
832
855
Deliveries, ’000 tonnes
883
996
SEKm
600
400
200
0
-200
%
30
20
10
0
-10
Demand for paper in Europe was hit heavily
by the pandemic, falling a little over 20
per cent during the year. Profit for 2020
decreased to SEK 73 million due to lower
selling prices and extensive production
curtailments. Although it was possible to
step up production slightly by the end of
the year and announced closures are ex
pected to improve the market balance, the
situation remains challenging for the paper
industry.
4
73
15
16
17
18
19
20
Operating profit/loss
excluding items affecting comparability
Return on capital employed,
excluding items affecting comparability
European demand for paper
Holmen’s production of magazine
and book paper
Ktonnes
20 000
15 000
10 000
5 000
0
11
12
13
14
15
16
17
18
19
20
Ktonnes
1 000
750
500
250
0
2010
2020
Uncoated magazine and book
Newsprint
Coated magazine
Paper
Holmen Annual Report 2020
21
“ We offer everything from joinery
timber, via refined products for
builders’ merchants to advanced
construction components, glulam
and complete structural frames.”
Key figures
Operating profit/loss and return
↓ Comment on results
Net sales, SEKm
Operating profit/loss,
SEKm
2020
2019
2 222
1 695
185
62
Investments, SEKm
107
162
Capital employed, SEKm
1 846
1 000
Average no. of employees
(FTE)
387
266
Deliveries, ’000 m3
1 052
879
SEKm
300
225
150
75
0
%
30.0
22.5
185
17
15.0
7.5
0.0
15
16
17
18
19
20
The market balance for wood products was
good in 2020 because of robust consump
tion in many countries, at the same time
that production curtailments limited supply.
Prices for spruce products increased sharply
in the second half of the year, helping to
boost profit to SEK 185 million in 2020. The
rise in profit was underpinned by lower raw
material costs, as well as the additional
profits from the acquisition of Martinsons
and higher production at Braviken Sawmill.
Operating profit
Return on capital employed
Consumption of wood products
Price trend
Million m3
400
300
200
100
0
Index
160
140
120
100
11
12
13
14
15
16
17
18
19
20
80
05
06
08
10
12
13
11
14
15
09
07
16
17
18
19
20
Europe
North America
China
Other Asia
MENA
Wood products
Concrete
Steel
22
Holmen Annual Report 2020
Wood Products
Wood Products ↘
building the future in wood
mill. With a total of five sawmills strategically
located in different parts of the country,
we are increasing our control over the raw
material.
Strong trend in the global market
The market for wood products is global and
huge streams of goods are shipped between
continents. Worldwide consumption of
wood products has leapt up 20 per cent
in the past decade, propelled largely by
increased consumption in China and in the
US market.
Sustainable building driving the trend.
The real estate sector accounts for a third
of carbon emissions in Europe and the con
struction industry is working hard to reduce
its carbon footprint. A sharper focus on sus
tainability within the construction sector
is good news for wood construction, since
wooden buildings continue to store carbon
dioxide within the structures, instead of
generating emissions. As this trend gathers
momentum, it is expected to push up de
mand for wood products. There is great
potential for growth, mainly in highrise
buildings, and the proportion of housing
built in wood is expected to rise as the
capacity for industrial building in wood is
expanded.
Pandemic prompts more home renovation
projects. A strong house market in the
USA and a rise in home renovation projects
in many countries due to the pandemic,
combined with production curtailments
in Canada and Russia, led to rising prices
for wood products in 2020. Today’s wood
products market is somewhat split, with
high demand and major price rises for con
struction timber in spruce, while demand
for pine joinery timber has seen rather
weaker growth, since it is not driven to the
same extent by home renovation projects.
Holmen produces sawn and re-
fined wood products for joinery,
construction and builders’ mer-
chants. Following the acquisi-
tion of Martinsons, we are now
also able to offer custom solutions
for climate-smart and large-scale
wood construction. The business is
being developed by increasing the
value added and making better use
of the wood raw material in combi-
nation with large-scale production.
Wood is a fantastic material. It is strong,
versatile, light and the only construction ma
terial that is renewable. Holmen’s sawmills
play a key role in our circular business. This
is where the wood is split and the proces sing
of the forest we have harvested begins.
Sustainable building
As trees grow, they capture carbon dioxide,
which then remains stored in the wood
products that we manufacture. Building in
wood is therefore significantly better for
the climate than building in concrete and
steel, since the manufacture of these mate
rials requires large amounts of energy and
generates considerable emissions of fossil
carbon dioxide. In addition, the whole chain
from manufacture to transport is much
more energy-efficient and cost-effective,
since wood weighs less than concrete and
steel. We thus create benefit for the climate
on multiple fronts.
Several independent studies (references
page 95) have shown that the use of wood in
the structure of buildings has major climate
benefits compared with other construction
materials. A study by Linköping University
pre sented calculations showing that an
apart ment building in wood has 40 per cent
lower carbon emissions than a concrete
building. The study took into account raw
material extraction, transport and produc
tion of construction materials. If the effect
of the carbon that is stored in the building
is included in the calculation, the climate
benefit of building in wood doubles.
Large-scale production adds
greater value
Holmen’s hightech sawmills deliver a
strong product range, and the advanced
technology allows us to maximise the output
from every log. Applying customercentric
working methods, we are building a platform
for long-term and profitable customer rela
tions with the capacity to meet demand in
different wood product markets. Proximity
to the raw material combined with efficient
wood purchasing is a key factor for profit-
ability, while competitiveness is under
pinned by the fact that parts of production
are colocated with the Group’s paperboard
and paper mills.
Broader range of refined products.
The acquisition of Martinsons strength ens
our portfolio of sawn and engi neered wood
products. We now offer every thing from
joinery timber, via refined products for
builders’ merchants to advanced construc
tion components, glulam and complete
structural frames.
Investments to boost capacity. Two of the
Group’s sawmills, Iggesund and Braviken,
form collective units with their neighbour
ing paperboard and paper mills. This means
that every aspect of the wood raw material
is made use of in a cycle in which chips from
the sawmills act as raw material in pulp
production and the final residual products
are used as biofuel to produce energy and
district heating. Steam from the mills is
also used in the drying processes at the
sawmills.
Since becoming operational in 2011,
Braviken Sawmill has undergone several
rounds of technical upgrades. The recent
in vestment in dryers and a new trimming
saw for the sorting line has increased
production capacity by 150 000 m³ to
600 000 m³ per year. Iggesund Sawmill is
also being modernised through an invest
ment in a new drying plant to be ready for
an increase in production.
Sustainable raw material supply.
Holmen’s sawmills are located near our
forest holdings from north to south, bring
ing logistical benefits and giving access to
a transport network that reaches around
the globe by rail, road and, not least, sea.
Holmen’s sawmills have chainofcustody
certification, which means that all the wood
can be traced back to its origin in sustainably
managed forests. The wood raw material is
sourced from Holmen’s own forest holdings
and from other forest owners, ensuring an
efficient logistics chain from forest to saw
Wood Products
Holmen Annual Report 2020
23
Renewable Energy ↘
green energy from our land
wind turbines. As a largescale land owner,
Holmen is well placed to establish wind
power at a competitive cost.
Investing in wind power. At the end of
2019, Holmen decided to build the second
of its own wind farms, Blåbergsliden, out
side Skellefteå. The investment is worth an
estimated SEK 1.3 billion and the facility is
expected to produce a little over 400 GWh
of electricity when it becomes operational
in autumn 2021. An application for an addi
tional wind farm with a similar production
capacity at Blisterliden in Västerbotten is
currently being reviewed by the authorities.
The ambition for 2021 is to also submit en
vironmental permit applications for wind
farms in Östergötland with a total potential
of over 1 TWh.
Greater electricity production in
the Nordics
The market for electricity in the Nordic
region has worked well historically, with
harmonised pricing that usually follows the
marginal cost of coalbased power, since
the market is tied in with the rest of Europe.
Electricity was in plentiful supply over the
past year, due to wet and windy weather
and high hydro power production, coupled
with new wind power coming on stream.
Together with limits to transmission capaci
ty and a fall in demand for electricity due to
the pandemic, this created an imbalance in
the energy market, resulting in low electri
city prices.
Holmen’s production of renewable
hydro and wind power contributes
towards a sustainable energy
supply in Sweden and towards
Europe’s transition to fossil-free
energy sources. We are now tak-
ing the next step as a green energy
producer by investing in the expan-
sion of our wind power capacity.
We produce renewable energy from water
and wind. Hydro power is an important
source of energy for society as it can be
regulated and has an almost infinite life
time and minimal climate impact. With
Uppland’s largest wind farm, Varsvik, up
and running and new projects in the pipe
line, we see interesting opportunities for
more wind power to advance our renewa
ble energy business.
Europe switching to renewables
The European energy market is undergoing
a major transition due to the issue of climate
change. In late 2020, the European Parlia
ment decided to raise its climate ambitions,
whereby carbon emissions in the EU are to
fall by at least 55 per cent by 2030 (base
year 1990) compared with the previous
target of a 40 per cent cut. Several coun
tries, including Italy, the Netherlands and
Germany, have also introduced legislation
to phase out coal power, while many coun
tries are scaling back their nuclear power
production.
Roughly half of electricity production in
Europe is fossilfree. However, electricity
only accounts for a quarter of total energy
consumption and almost all other energy
consumption is fossilbased. To meet the
climate targets, much of fossilbased energy
production will need to be switched to
fossil-free sources, and with electrification
of both transport and industry on the rise, it
is clear that electricity consumption is set
to increase, creating additional demand for
renewable energy.
Transitioning the energy system to more
weatherdependent energy sources such
as solar and wind power will also bring
challenges, since the power supply has to
be maintained every minute of every day,
all year round. An expansion of transmission
capacity both between and within countries
is therefore necessary.
Strength in own energy assets
Holmen produced almost 1.4 TWh of re
newable hydro and wind power in 2020.
However, we are also a major consumer of
electricity, so the expansion in wind power
will help to reduce our exposure to the
vaga ries of energy supply and electricity
prices. Together with the renewable electri
cal energy that is produced at the Group’s
mills, our production of hydro and wind
power equates to more than 55 per cent of
Holmen’s overall energy consumption.
Hydro power provides a reliable electricity
supply. Holmen’s energy production is
dominated by hydro power from our 21
wholly or partly owned power stations
located on the Umeälven, Faxälven,
Gideälven, Iggesundsån, Ljusnan and
Motala Ström rivers. In contrast to other
renewable energy sources, hydro power is
uniquely controllable. Energy is difficult to
store on any great scale, but the water that
is used to generate electricity can be stored
in reservoirs, lakes and rivers. Hydro power
stations can therefore generate both base
load power and regulating power, which is
the energy needed to meet fluctuations in
demand. Production is tailored to demand
or changes in other electricity production
by reducing or increasing the flow of water
through the turbines. The climate impact of
the operation is also marginal, with minimal
emissions.
Another benefit of hydro power is service
life. A hydro power station can deliver energy
for a very long time. The investment required
is relatively small, and the operating and
maintenance costs are low since the plants
are almost entirely automated. Overall, hy
dro power brings major benefits to society
as part of the move towards a fossilfree
electricity system.
Wind power creates opportunities
Wind power is the fastest growing energy
type in the EU and the third largest means of
producing electricity in Sweden. Landbased
wind power is now a mature technology and
electricity generation costs are among the
lowest of all the options, including gene
ration using fossil fuels.
Expansion is being driven by rapid devel
opments in the wind power industry and a
new generation of larger and more efficient
24
Holmen Annual Report 2020
Renewable Energy
“ As a large-scale land owner,
Holmen is well placed to
establish wind power at a
competitive cost.”
Key figures
Operating profit/loss and return
↓ Comment on results
Net sales, SEKm
Operating profit/loss
excl. items affecting
comparability, SEKm
2020
2019
378
215
378
336
Investments, SEKm
291
203
Capital employed, SEKm
3 351
3 058
Average no. of employees
(FTE)
Own production of hydro
and wind power, GWh
16
13
1 352
1 109
SEKm
400
300
200
100
0
Electricity prices were low during the year,
due to a good supply of hydro power and
lower consumption than usual. Profit for
2020 therefore dropped to SEK 215 million,
despite Holmen ’s production being 10 per
cent higher than in a normal year. Profit for
2019 included SEK 80 million from the sale
of a permit to build a wind farm on Holmen
property.
%
12
9
6
3
0
7
215
15
16
17
18
19
20
Operating profit/loss
excluding items affecting comparability
Return on capital employed,
excluding items affecting comparability
European energy consumption, %
European electricity consumption, TWh
6
7
10
23
15
23
2
37
Fossil fuels
Nuclear power
Renewables
Electricity
Natural gas
Oil
Coal
Other
4 000
3 000
2 000
1 000
0
1990
1995
2000
2005
2010
2015
Fossil fuels
Nuclear power
Renewables
Renewable Energy
Holmen Annual Report 2020
25
A sustainable business ↘
TogeTher we
are circular
Our business model is circular.
The forest ecocycle gives us our
wood, which is refined and made
into products which our customers
can then refine in their turn. As
the lifecycle draws to a close, the
products can be recovered and
come back to life in a new form,
or be put to use as biofuel.
Our customers, partners, employees and,
not least, the users of our products are
all part of Holmen’s circular business.
Every new relationship is an opportunity
to expand the positive ripple effect of our
actions. Over the years, we have made cir
cularity an integrated part of our business.
Today, growing, healthy forests, efficient
management of raw materials and circular
cycles are not merely essential to our profit
ability, they are also the cornerstone of a
genuinely sustainable business.
Smart use of constantly
growing forests
Holmen’s two nurseries produce more than
40 million seedlings each year, with the
majority planted on the Group’s own land.
After 70–90 years, as the tree’s growth
slows and its capacity to absorb and store
carbon dioxide falls, the forest is mature
enough to be harvested.
We saw as many planks and boards as
technically possible from the trees we
harvest. About half of the harvest consists
of large logs that are used to produce con
struction material used for houses and
interiors, for example. The narrower part of
the tree and wood from thinning represents
about half of the harvest and is used with
residual wood chips from the sawmills to
manufacture paperboard and paper. The
remainder comprises branches, tops, bark
and wood shavings, which are used to pro
duce bioenergy. We use 100 per cent of the
raw material. Nothing goes to waste.
Recycled paper grows in the forest. When
our paperboard and paper made using fresh
fibre from sustainably managed forests is
recycled, it feeds into the recycled paper
system, which needs an injection of fresh
fibre to function.
Residual products become
new resources
Holmen’s production plants are among the
most resourceefficient in the world. Over
the years, we have effectively reduced our
use of energy, water and chemicals, and
we recover and reuse the waste that arises.
Residual products from the sawmill are used
to generate electrical and thermal energy
in the mills, organic material from the water
treatment process is sold on as soil, and
steam from the mills is used in the drying
processes at the integrated sawmills.
Reusing water. Holmen’s industries use
surface water from lakes and watercourses,
partly to transport and wash fibres in the
mills. The same water is used many times
before it is cleaned in several steps in dif
ferent combinations of mechanical, biologi
cal and chemical treatment. This sees us
working to ensure that the ecosystems in
the aquatic environments surrounding our
mills are healthy and thriving.
Renewable raw materials from
flourishing ecosystems
The forest has the capacity to provide
many benefits at the same time, making
it a valu able resource not only for Holmen
but for society as a whole. The transition
to a fossilfree society demands more re
newable material, which means that the
earth’s surface needs to be managed more
efficiently and to a greater extent. Flourish
ing ecosystems are essential to creating
healthy, resilient forests.
We are convinced that it is through re
search and collaboration that we can con
tinue to develop forestry and find new ways
to encourage both growth and biodiversity.
Environmental conservation is part of all
our activities as we manage and harvest
our forest, and protect and improve habitat
diversity. This enables Holmen to increase
harvests over time, while enabling all natu
rally occurring species to continue to thrive
in the forest landscape.
Forever learning
To increase the value and the usefulness
of the forest, Holmen constantly engages in
development work spanning every aspect
of our operations. Holmen’s work on re
search and development is mainly focused
on three areas – increased forest growth,
more efficient production and developing
new and existing products based on forest
raw material.
Using all of the tree trunk ↘
Wood – Planks and boards
Wood chips – Pulp for paper
Bark – Bioenergy
Wood shavings – Bioenergy
26
Holmen Annual Report 2020
A sustainable business
5%
Branches, tops, bark and
wood shavings become
renewable bioenergy.
45%
The narrower parts of
the tree and wood from
thinning are grinded
and digested into pulp
that then becomes
paperboard or paper.
50%
The large logs that
make up approximately
half of the harvest go
to sawmills for the
production of building
materials in the form of
construction timber and
joinery products.
Distribution of by-products
and waste, %
0.2
0.4
2
20.8
78.6
To energy production,
internal/external
Utilised or sent for
material recovery
Waste sent to landfill
Hazardous waste
78.6
20.8
0.4
0.2
A sustainable business
Holmen Annual Report 2020
27
A sustainable business ↘
how we are coNTriBuTiNg To
a SuSTAiNaBle FuTure
As a Swedish forest industry company,
we have excellent opportunities to
drive sustainable development to-
gether with our customers. This espe-
cially applies to the climate challenge.
Holmen’s business is genuinely sustainable.
With growing, healthy forests, renewable
energy production, resource and energy
efficient production of climatesmart prod
ucts and a valuesdriven company culture,
we have major opportunities to do our part
in creating sustainable development in line
with the UN’s Sustainable Development
Goals. Our single greatest contribution
is that we promote a better climate, both
through our own operations and together
with our customers. We also contribute so
cial benefit by being actively engaged in our
employees and in the local communities
in which we work. This was made clear in
the materiality analysis conducted in 2018.
In it we identified the areas where we con
sider Holmen has the greatest opportunity
to contribute to sustainable development.
The analysis included interviews and work
shops with about 50 stakeholders and
was based on the ten principles of the UN
Global Compact, the UN’s sustainable de
velopment goals and the megatrends and
external factors affecting our customers
and our industry.
As a result of the materiality analysis,
we formulated Holmen’s three focus areas
that encapsulate our most important con
tributions. Objectives, targets and activities
linked to our focus areas are followed up on
a quarterly basis.
“Holmen’s production, business and
organisation contributes to the UN’s
Sustainable Development Goals and
thus also to the 2030 Agenda.”
The UN’s SDGs
We have been building our own
experience and finding longterm
solutions for 400 years. Thanks
to sustainable use of our forests’
ecosystems, today we are able to
operate a circular, renewable and
biobased business that contributes
to the UN’s Sustainable Development
Goals and benefits our customers,
shareholders, employees and local
communities.
28
Holmen Annual Report 2020
A sustainable business
↓ Focus areas
↓ Objectives
1. We contribute to a better climate
Our growing forests and our products bind carbon dioxide.
Through active and sustainable forestry we increase forest
growth and capacity to absorb carbon. We make wood prod
ucts from the forest which store carbon dioxide. Residual
products from the sawmills and wood from thinning are
made into paperboard and paper, which also store carbon
throughout their shorter lifecycle. At Holmen we work ac
tively to cut our own carbon dioxide emissions and since
2005 we have reduced the use of fossil fuels at our mills by
88 per cent. This means that Holmen’s direct emissions of
carbon dioxide are already lower than the emission limits
set in the Paris Agreement.
2. We help our customers in their
sustainable business
We reduce our customers’ need for fossil materials and
energy. Wood construction, products made from paper
board and paper, and energy from hydro and wind power on
our own land mean we are reducing our customers’ need
for fossilbased materials and fossil energy. This leads to
lower fossil carbon dioxide emissions from our customers’
businesses. At the same time, we are injecting a sustainably
produced raw material into the recycled fibre industry and
contributing towards the transition to a fossilfree energy
system.
Increase our climate benefit
Our climate benefit is to increase through forest growth which
binds carbon dioxide and by increasing our production of wood
products. At the same time, we are to have low fossil emissions
in our value chain and we have undertaken to ensure that the
Group’s combined emission levels of fossil greenhouse gases
continue to lie below the level defined by the Science Based
Targets initiative (SBTi)* for the paper, pulp and paperboard in
dustry in 2030. Our fossil emissions from transport are to fall by
2 per cent per tonnekilometre and emissions from the majority
of our suppliers of input goods are to fall by 1.2 per cent. In 2021,
Holmen will apply to have a new climate target approved by SBTi.
Enable our clients to reduce their
carbon footprint
We seek to increase our contribution to our customers’ climate
efforts. We will achieve this by increasing our sales of wood
prod ucts and construction products, which replace fossilbased
materials. We also aim to increase our sales of paperboard,
enab ling our customers to replace fossilbased packaging, and
continue to develop paper products manufactured with one
of the lowest carbon footprints in the world. Our production
of paper and paper board also contributes a sustainable raw
material to the recycled fibre industry and when the products
can no longer be recycled, they are put to use as biofuel, which
replaces fossil fuels. Expanding wind power on our own land
will enable us to increase our sales of renewable electricity from
hydro and wind power, reducing the need for fossilbased energy.
In this way, Holmen plays an important role in the transition to a
fossilfree society and to a fossilfree energy system in Europe.
3. We are committed to our employees
and our local communities
With courageous, committed and responsible employees
and thriving local communities, we can achieve more. At
Holmen, the focus is very much on innovation and develop
ment, and we want our employees to develop and grow with
us. In our work towards a sustainable future, this means
investing in employees’ skills, active leadership, a positive
corporate culture and a healthy workplace. Naturally, we
therefore work actively to encourage health and prevent in
jury, promote diversity and combat discrimination. Holmen
plays a significant role as an employer in several locations
and the business has considerable regional significance. It
creates employment in rural areas and helps enable people
to live and work outside the big cities.
An organisation focused on its objectives
and thriving local communities
Holmen’s management by objectives process is to contribute to
wards our strategy and foster courage, commitment and respon
sibility in our employees. We are to attract and develop a diverse
staff of competent employees and work for a culture that is inclu
sive and dynamic. Aware and mature leadership and employee
ship is to drive the business forward and contribute to a positive
culture, in which we focus on our own tasks and simultaneously
help each other in every respect. Our work environment is to be
safe and healthy. Therefore we have a zero vision for workrelated
accidents, repetitive strain injury and workrelated illness. As an
important employer in many locations, we are to actively contri
bute to thriving local communities by providing employment for
our workers and other companies in our value chain.
* The Science Based Targets initiative (SBTi) is an international framework for calculating the target of 1.5°C set by the Intergovernmental Panel on Climate Change (IPCC), a
UN body. Holmen has already attained the emissions target for paper and pulp companies for 2045. The threshold values are formulated by the IPCC and published by SBTi.
A sustainable business
Holmen Annual Report 2020
29
A sustainable business ↘
climate BeNeFiT ThroughouT
The vAlue chaiN
The forest delivers the most benefit
when it is put to use. It is the heart
of Holmen’s sustainable business.
We are part of a value chain that
creates climate benefit in four areas,
amounting to a total of just over
6 million tonnes of carbon dioxide per
year. This is equivalent to 12 per cent
of total emissions within Sweden’s
borders. This is how Holmen created
real climate benefit in 2020.
Forest carbon uptake
Young trees have the greatest capacity to
bind carbon dioxide. When the trees be
come old and die, they rot and the stored
carbon dioxide returns to the atmosphere.
Through active and sustainable forestry we
increase forest growth and capacity to ab
sorb carbon. In 2020 it is calculated that
the increase in the volume of standing tim
ber in Holmen’s forests has absorbed and
bound 1.4 million tonnes of carbon dioxide.
Carbon storage and substitution
in products
The raw material from the forest continues
to bind carbon dioxide in its refined form
and substitution occurs when woodbased
products and renewable energy replace
fossil alternatives with a higher climate
footprint. It is here that Holmen’s climate
benefit becomes the most tangible – when
our products reduce the need for fossil
materials and raw materials, enabling the
carbon to stay in the ground.
The production of wood products in
creased global storage of carbon dioxide
by more than 0.3 million tonnes, while
at the same time replacing construction
materials that would have caused green
house gas emissions of 1.4 million tonnes.
It also replaced fossil energy equivalent to
emissions of 0.4 million tonnes. Holmen’s
paperboard and paper production has
a car bon storage effect equating to just
under 0.1 million tonnes of carbon dioxide.
When the products can no longer be recy
cled, they provide benefits as bioenergy, so
replacing fossil energy equivalent to emis
sions of 1.5 million tonnes of greenhouse
gases.
Renewable energy production that
replaces fossil alternatives
Our production of renewable electricity
from hydro and wind power replaces power
from coal and gas equivalent to 1.2 million
tonnes of greenhouse gas emissions. On
top of this, we have bioenergy production
that comes from residual products from the
forest and our facilities. By selling this bio
energy, we replace emissions of 0.5 million
tonnes.
Holmen’s climate footprint
meets the target of 1.5°C
To meet the target of the Paris Agreement
that global warming is not to exceed 1.5°C,
we have to make the necessary transition
and keep within the limits our ecosystem
can cope with.
Holmen’s own operations generate
greenhouse gas emissions that already
meet the Paris Agreement’s threshold
values for 2045. We have achieved this
through energy efficiency measures and
investments in renewable energy at our
facilities.
Our fossilfree energy production in the
form of hydro and wind power, forestbased
bioenergy and purchasing of fossilfree
electricity are important contributions to
the climate. Because we manage the forest
sustainably, the world gains access to more
sustainable raw materials, and with invest
ments in wind power we enable more people
to contribute to the Paris Agreement.
Just like the UN’s Sustainable Develop
ment Goal 17, Partnerships for the Goals,
it is through partnership and collaboration
with new and existing customers and sup
pliers that we create the greatest climate
benefit, and through several different acti
vities and value chains working in concert.
Climate benefit created in Holmen’s value chains 20201)
Million tonnes CO2e
↓ Climate benefit in several
Uptake in the annual increase in volume of standing timber in Holmen’s forests2)
Storage in and substitution through the products Holmen sells3)
Wood products
Paperboard and paper
Substitution through renewable energy production
Hydro and wind power4)
Bioenergy5)
Holmen’s fossil emissions (Scope 1, 2 and 3)6)
Total climate benefit
1.4
3.7
2.2
1.5
1.7
1.2
0.5
-0.4
6.4
value chains
In addition to the uptake, storage and sub
stitution that take place in Holmen’s main
value chains, we are also a link in creating
climate benefit in other value chains, partly
through our external sales of roundwood.
The raw material often comes from private
forest owners and is then refined by our
customers. This creates climate bene
fit through coopera tion between several
different actors.
1) Climate benefit in Holmen’s value chains in 2020 is calculated in line with the methodology used by the Swedish Forest Industries Federation, CEPI and a number of other forest
companies. To ensure that Holmen’s reporting is based on the same methodology, Holmen has had the calculations carried out by Peter Holmgren of Futurevistas AB. For further
information, visit holmen.com. Operations at the Bygdsiljum and Kroksjön Sawmills (formerly Martinsons) have been included from the date of acquisition, 1 October 2020.
2) The calculation is based on the annual increase in the volume of standing timber, using data from the company forest inventory minus harvested volume.
3) Carbon storage is calculated in line with Sweden’s official climate reporting to the UN conducted by the Swedish Environmental Protection Agency using the IPCC’s methodology.
Under this methodology, what is reported is the increased storage of carbon dioxide from Holmen’s production of wood products, paperboard and paper in 2020. This means
that the methodology takes into account the fact that a certain amount of old wood and fibre products rot or are incinerated in 2020 and thus stop binding carbon dioxide.
According to the IPCC, fibre products have a half-life of 2 years and wood products 30 years. Holmen’s calculation makes the assumption that climate benefit is equivalent to
100 per cent of the fibre products, and the old wood products that ceased binding carbon dioxide in 2020 were used for bioenergy which substituted for fossil fuel.
4) Calculated based on our production of renewable electricity from hydro power replacing fossil-based electricity from coal power, and our production of renewable electricity from
wind power replacing fossil-based electricity from coal and gas power.
5) Bioenergy comprises branches and treetops and residual products from Holmen’s operations delivered externally.
6) Details of Holmen’s fossil and biogenic emissions are reported on pages 90–91.
30
Holmen Annual Report 2020
A sustainable business
In 2020 Holmen’s operations
contributed towards a climate
benefit of 6.4 million tonnes
CO2e, equivalent to 12 per cent
of emissions in Sweden.
1.4 million tonnes of CO2e
were absorbed in the growing volume
of standing timber in our forests
3.7 million tonnes of CO2e were
stored in and replaced by wood products
(2.2) and by paper and paperboard (1.5)
1.7 million tonnes CO2e were
replaced by our renewable production
of electricity from wind and water
(1.2) and from bioenergy (0.5)
Emissions equivalent to 0.4 million tonnes
CO2e come from Holmen’s production and transport
A sustainable business
Holmen Annual Report 2020
31
The picture shows the
biological treatment facility
at Hallsta Paper Mill.
acTive eNviroNmeNTAl
acTiviTieS
Holmen’s environmental activities involve constantly
reducing environmental and climate impact, and
ensuring that the Group complies with the
environmental rules and conditions set.
Environmental
responsibility
For Holmen, environmental and energy
concerns play a natural role in planning
production and investments. Operations
are characterised by resourceefficient use
of renewable raw material and energy, and
by protecting the environment, applying
the precautionary principle.
Energy, chemicals and fibre are recovered
as far as possible, in order to minimise the
environmental impact of production. The
section on Risk management on page 43
outlines Holmen’s preventive work on eco
related risks and how they are managed.
The main environmental impact from the
industrial sites takes the form of emissions
to air and water. Information on production
and priority environmental parameters is
presented on page 90.
Holmen’s environmental work is charac
terised by constant improvement measures
within the framework of certified environ
mental and energy management systems
(see page 33), which ensure compliance
with legislation and requirements set by
authorities. Responsibility for the manage
ment systems rests with the respective
business area, as does environmental
responsibility.
Permits
At the end of 2020, Holmen was running
production operations that require en
vironmental permits at nine facilities.
The permits specify conditions regarding
permitted production volumes and per
mitted emissions to air and water, among
other things. Eight of the facilities are
located in Sweden and one is in Work
ington in the UK. The facilities’ turnover
amounted to 81 per cent of the Group’s
net sales in 2020.
The environmental status of Holmen’s
Swedish mills is good and the mills meet
the tougher emissions criteria that apply
from October 2018 under the EU’s
Industrial Emissions Directive (IED).
Workington Mill has a derogation whereby
the mill is to invest in measures to ensure
that the emission requirements for water
are met. The schedule for this will be
de ter mined in consultation with the
Environment Agency.
At Braviken Paper Mill the produc
tion of bright products will gradually be
stepped up. An application for a new
environmental permit for operations
was submitted in late 2020.
In 2020 Holmen acquired Martinsons’
two sawmills at Bygdsiljum and Kroksjön.
Bygdsiljum Sawmill gained a new environ
mental permit under the Environmental
Code in 2018. Kroksjön Sawmill obtained
a new environmental permit in late 2020.
It will be applied in 2021.
In Västerbotten, Holmen is construct
ing Blåbergsliden Wind Farm, which will
have annual electricity production of just
over 400 GWh. The wind farm will be
fully operational in late 2021. A permit
application has been put in for another
wind farm on the same scale in Väster
botten. In autumn 2020, consultation
began on a permit application for wind
power projects on Holmen’s land in
Östergötland. Electricity production from
these projects has a potential of more
than 1 TWh.
New environmental legislation for
hydro power entered into force on
1 January 2019. The legislation means
that hydro power operators who do not
comply with modern environmental cri
teria will need to apply for a review under
the Swedish Environmental Code before
the end of 2039. Holmen’s facilities have
been registered with the national plan
for the revision of hydro power plant
licences. Jointly owned facilities have
been registered by the respective main
owner.
32
Holmen Annual Report 2020
A sustainable business
A sustainable business ↘
Environmental permits for the Group’s
production facilities
2018
2017
Iggesund Mill, Environmental Code1)
Workington Mill, IED
Hallsta Paper Mill,
Environmental Protection Act
2000
Braviken Paper Mill, Environmental Code2) 2002
2014
Iggesund Sawmill, Environmental Code
2010
Braviken Sawmill, Environmental Code
2003
Linghem Sawmill, Environmental Code
2018
Bygdsiljum Sawmill, Environmental Code
Kroksjön Sawmill, Environmental Code3)
2020
1) Port activity at Skärnäs Terminal, alongside Iggesund
Mill, is included in the environmental permit. In addi-
tion, operations subject to notification requirements
take place at the production unit in Strömsbruk.
2) An application for a new environmental permit was
submitted to the Land and Environment Court in late
2020.
3) The sawmill gained a new environmental permit in late
2020. The permit will be applied in 2021.
Discontinued operations
In consultation with the environmental
authorities, studies are being conducted
at contaminated discontinued industrial
sites where Holmen has operated in the
past. In 2020, studies were in progress
at different stages regarding the former
sawmills Håstaholmen, Stocka and
Lännaholm, the sulphite mills at
Strömsbruk, Domsjö and Loddby, the
former groundwood mill in Bureå and at
the Hults Bruk landfill site.
The ground area and the buildings at
the former sawmill in Håstaholmen in
Hudiksvall have been remediated. The
project to remediate polluted sediment
in the area of water off the industrial
site was completed in 2020 and in
2021 work will continue in dealing with
the polluted sediment mass. The land
and the buildings at the former surface
treatment site at Iggesund have been
remediated and the work of treating the
polluted groundwater was completed in
2020. This concludes the remediation
work at this former industrial site. The
remedia tion work at the Hults Bruk land
fill site was completed in 2020.
Exceedances
and complaints
Emission allowances and
electricity certificates
The environmental manager within each
operation handles any incidents that occur.
Close dialogue with the mills’ local resi
dents is important in order to identify and
address any views on operations at an
early stage. 37 (35) environmentrelated
incidents were reported to the supervisory
authorities during the year. The noncon
formities were not of a significant nature in
terms of environmental impact or impact
on profits. Corrective measures were taken
to deal with these cases, in line with the
environmental management system of the
operations concerned.
Holmen has been awarded emission
allowances within the EU Emissions
Trading Scheme. As a result of invest
ments in biobased energy production
and energy savings at the facilities, the
use of fossil fuels has fallen consider
ably in recent years. Surplus allocated
emission allowances have been able
to be sold. Holmen has applied for
allocation of emission allowances for
the period 2021–2030. The process
of allocating emission allowances in the
EU has been delayed and notification is
expected in summer 2021.
The Group has produced renewable
electricity for many years. This has
contributed income in that we have
obtained electricity certificates for our
production. The electricity certificates
have been sold to electricity distribu
tors, who have used the certificates in
their turn because their customers need
a proportion of their electricity to come
from renewable sources. In the UK,
electricity distributors have to meet a
certain quota for renewable electricity,
and producers of renewable electri
cal energy receive green Renewables
Obligation Certificates in proportion to
the amount of electricity generated.
Workington Mill obtained such green
certificates in 2020.
A holistic approach
to sustainability
Holmen has been part of the UN Global
Compact and its corresponding Nordic
network since 2007. We report to the
organisation each year on our work in line
with the ten principles and set out the pro
gress made. Information on how Holmen
complies with and works in line with the
principles is available at holmen.com.
“ We have a holistic approach to responsible
business and our work draws on the UN
Global Compact. We see it as natural to
support its ten principles on human rights,
social and environmental responsibility,
and anti-corruption.”
Henrik Sjölund
President and CEO of Holmen
Management system certifications
Production facilities1) Environment
ISO 14001
Energy
ISO 50001
Quality
ISO 9001
Health and safety
ISO 45001
Iggesund Mill2)
Workington Mill3)
Hallsta Paper Mill
Braviken Paper Mill
Iggesund Sawmill4)
Braviken Sawmill4)
2001
2003
2001
1999
1999
2011
2005
2015
2005
2006
2006
2011
1990
1990
1993
1996
1997
2011
2016
2005
2012
2015
2017
2017
The years given in the table are the years when the certification was first issued. The certifications mean that proce-
dures are in place for planning, implementation and follow-up, as well as measures to enable continuous improve-
ment in the work on the various management systems. Certifications can be viewed at holmen.com/certificates.
1) Holmen Forest is certified under the environmental management system ISO 14001. Forest operations also
hold forest management and chain-of-custody certification under PEFC™ and FSC® respectively. All Holmen’s
facilities at which wood raw material is used have chain-of-custody certification.
2) The certifications include the production unit in Strömsbruk and operations at Skärnäs Terminal.
3) Workington Mill has been certified under the food safety management system ISO 22000 since 2019.
4) From 2011 the certification is a joint certification for the two sawmills. Linghem Sawmill, which was acquired
in 2017, was certified under ISO 45001 in 2020. Martinsons’ sawmills were acquired in 2020 and both the
Bygdsiljum and Kroksjön production facilities are certified under ISO 14001. Work is in progress to include
Linghem, Bygdsiljum and Kroksjön in the certificates of the other sawmills.
A sustainable business
Holmen Annual Report 2020
33
Employees ↘
courage, commiTmeNT
& reSpoNSiBiliTy
Today’s Holmen is the result of
countless decisions large and small,
made in line with our values of
courage, commitment and respon-
sibility. A team effort where we
have put long-term values ahead of
short-term profit and dared to swim
against the tide when it made sense
to do so. This sees us continuing to
fine-tune our products and services.
Management by objectives
Holmen is a learning workplace where
everyone has the opportunity to feel a
sense of commitment and responsibility
for the areas in which they work and the
objectives set. Using Holmen’s model for
management by objectives, the strategy,
business plans and expectations are com
municated across the organisation, which
sets stepbystep targets to meet the ex
pectations. Ultimately, the managers com
municate expectations to the individual
employee, who in turn suggests objectives
that steer towards the expectations. This
helps us to make the most of the skills and
potential of every employee.
We believe in the drive inherent in every
individual, team and unit. The management
by objectives model is our way of making
sure that all of us working at Holmen feel
that we are focusing on the right things and
helping to implement our strategy.
Core values
Our core values of courage, commitment
and responsibility are the route to a strong
culture and the answer to how we make
each other and Holmen better. The core
values guide us in our approach to each
other, in relations with customers and
in our work. They are integrated in our
processes and tools, including in the re
cruitment process, appraisal talks, as a
complement to the management by objec
tives model, and as a basis for our internal
leader ship and management programme.
Recruitment and development
To maintain competitiveness over time,
attracting and retaining the right employees
is of the utmost importance. This way,
we ensure that Holmen continues to be a
busi ness with a focus on innovation and
develop ment. Employees and leaders are
given opportunities to grow through com
petence develop ment and we create con
ditions in which each and every individual
is able to grow, with stimulating tasks and
new challenges.
Based on our current and future skills
needs, we are working on employee develop
ment at all levels. We give employees a
great deal of responsibility, but also moti
vation and support from a team of commit
ted and expert colleagues and leaders. We
also provide development programmes for
new and more experienced managers and
for specialists driving work on change.
Health and safety
It goes without saying that we actively pursue
a healthy culture and an accidentfree work
place for our employees and the contractors
who work with us. Holmen carries out sys
tematic Groupwide health and safety work
in line with ISO 45001 (see page 33) and
all our production units are certified, apart
from Bygdsiljum and Kroksjön Sawmills,
which were acquired in 2020. Work is in
progress to include these facilities in the
certificates of the other sawmills.
As a result of the coronavirus pandemic,
Holmen implemented a large number of
adaptations and measures to ensure a safe
work environment for our employees and
others present in our operations.
Human rights and equality
Holmen safeguards human rights and the
equal value of all people in everything we
do, both in the workplace and when travel
ling on business. All employees must have
the same rights, obligations and opportuni
ties irrespective of their sex, transgender
identity or expression, ethnicity, political
opinion, union membership, religion or
other belief, disability, sexual orientation,
health status, age or family responsibilities.
This is set out in Holmen’s Code of Conduct
34
Holmen Annual Report 2020
Employees
↓ Examples of adaptations as a result
of the coronavirus pandemic:
Conducted risk analyses at all workplaces.
Identified critical operational employees to
safeguard production.
Promoted working from home to reduce
the risk of transmission based on risk
analyses.
Introduced strict health checks for exter
nal staff in production operations.
Stepped up cleaning and introduced rules
on hygiene and distancing.
Minimised travel and facetoface
meetings.
Modified working hours to avoid crowded
public transport.
Supported managers in remote leader
ship.
Issued recommendations on health and
safety when working from home.
Industrial accidents
with more than 8 hours of absence (LTI)
per million hours worked.
LTI
20
15
10
5
0
15
16
17
18
19
20
↗ A zero vision for accidents
The number of accidents per million hours worked
fell to 4.3 in 2020 from 5.7 in 2019. The dominant
causes of accidents are slipping, tripping, pinching
and cutting. During the year we have successfully
managed to reduce the number of accidents from
27 to 21 incidents, which is our best result ever.
This shows that our work is paying off and how
important it is for us to continue taking a farsighted
approach, focused on our vision of zero accidents.
It is worthy of note that our paperboard mill in
Workington in the UK had no accidents resulting
in sickness absence in 2019 or in 2020.
Dynamic workplace
To maintain strong competitiveness, we
want to be a workplace that attracts and
retains the skills Holmen needs – employees
who represent a diversity of insights, ex
periences and cultures. Our industry is
currently overwhelmingly male and we
are therefore working to increase diversity
and achieve a more even gender distribu
tion among managers and leaders. This
will enable us to benefit from a diversity of
backgrounds and experiences, and make
everyone to feel welcome.
As part of our work to be an inclusive
workplace in which everyone is given the
same development opportunities, we draw
up action plans and annual pay surveys in
line with the Swedish Equality Act. We also
use appraisal talks and employee surveys
as tools to improve our work on equality
and actively combat discrimination.
and applies to employees, contractors and
suppliers. To us, this means that everyone
who works at Holmen and in our supply
chain must stay healthy and perform well
at work and have an inclusive, safe and
healthy work environment with fair terms
of employment. Bullying and harass ment
are not tolerated and everyone is expected
to act professionally and not expose them
selves to the risk of being linked to opinions
and activities that are not compatible with
Holmen’s Code of Conduct. We have clear
guidelines on what applies and where to turn
in cases where Holmen’s Code of Conduct
is not being followed.
Monitoring the Code of Conduct
During the year we have conducted exten
sive internal training on Holmen’s Code of
Conduct with all employees who work as
managers or in sales, marketing, purchas
ing, finance, HR, information, market com
munication, projects or in Group staffs. The
training was provided online and the com
pletion rate was 89 per cent by the end of
the year. We have also continued to work in
line with our process for supplier followup,
which was updated last year. We have iden
tified which suppliers pose risks linked to
the environment, labour law, human rights,
business ethics and sustainable purchasing.
Work to draw up action plans for suppliers
identified as being high risk continues.
Employees
Holmen Annual Report 2020
35
Corporate
governanCe
report
Holmen AB is a Swedish public
limited company, listed on the
Stockholm Stock Exchange
(Nasdaq Stockholm) since 1936.
The preparation of a corporate
gover nance report is a require
ment under the Swedish Annual
Accounts Act. The corporate gover
nance report complies with the
rules and instructions stipulated
in the Swedish Code of Corporate
Governance.
Shareholders
Holmen had 48 104 shareholders at year-
end 2020. Private individuals with Swedish
citizenship accounted for the largest cate-
gory of owners with 45 749 owners.
The largest owner at year-end, with 62.3
per cent of votes and 34.1 per cent of capital,
was L E Lundbergföretagen, which means
that a Group relationship exists between
L E Lundbergföretagen AB (corporate ID
number 556056-8817), whose registered
office is in Stockholm, and Holmen. The
second-largest owner was the Kempe
Foundations and their holdings of Holmen
shares amounted to 17.5 per cent of votes
and 7.4 per cent of capital at the same
date. No other individual shareholder con-
trolled as much as 10 per cent of the votes.
Employees have no holdings of Holmen
shares via a pension fund or similar system.
There is no restriction on how many votes
each shareholder may cast at the Annual
General Meeting (AGM).
At the 2020 AGM, the Board’s authorisa
tion to purchase up to 10 per cent of the
company’s shares was renewed. No shares
were repurchased in 2020, but 7 000 000
of the class B treasury shares that were pre
viously repurchased by the company were
cancelled in 2020. After the cancellation
Holmen AB holds 586 639 shares in treasury.
See pages 46–47 for further information
on the shares and ownership structure.
General meeting of shareholders
The notice convening the AGM is sent no
earlier than six and no later than four weeks
before the meeting. The notice contains:
a) information about registering intention to
attend and entitlement to participate in and
vote at the meeting; b) a numbered agenda
of the items to be addressed; c) information
on the proposed dividend and the main
content of other proposals. Shareholders or
proxies are entitled to vote in respect of the
full number of shares owned or represented.
Registration for the meeting is made by let-
ter, telephone or at holmen.com. Notices
convening an Extraordinary General Meet-
ing (EGM) called to deal with changes to the
company’s articles of association shall be
sent no earlier than six and no later than
four weeks before the meeting.
Proposals for submission to the AGM
should be addressed to the Board and
submitted in good time before the notice is
distributed. Information about the rights of
shareholders to have matters discussed at
the meeting is provided at holmen.com.
It was announced on 25 September 2020
that the 2021 AGM would take place in
Stockholm on 22 April 2021.
↓ AGM 2020
↓ Extraordinary General Meeting
The 2020 AGM and the material presented was in Swedish. The notice
convening the meeting, the agenda and the minutes are available at
holmen.com. According to item 1.2 of the Swedish Corporate Governance
Code, the Chairman of the Board and as many members of the Board as
are required for a quorum are to be present at meetings. In light of the
risk of spreading the coronavirus, however, the Board resolved to conduct
the AGM so that as few participants as possible would be present. For this
reason, only the Chairman of the Board and the CEO were present at the
AGM. However, as many members as were needed for the Board to have
a quorum were prepared to hold a telephone meeting on the day of the
AGM. During the AGM, the shareholders had the opportunity to ask and
obtain answers to questions. The AGM adopted the income statement
and balance sheet, decided on the appropriation of profits and granted
the departing Board discharge from liability. Fredrik Lundberg and Hans
Hedström, Carnegie Funds, checked and approved the minutes. It was not
possible to follow or participate in the meeting from other locations using
communication technology. No changes in this regard are planned for the
2021 AGM.
At an Extraordinary General Meeting (EGM) on 16 September 2020 the
shareholders resolved to pay a dividend of SEK 3.50 per share. In light
of the risk of the spread of coronavirus, the EGM was conducted without
physical presence, by shareholders exercising their voting rights only by
postal voting pursuant to the Act (2020:198) on temporary exemptions to
facilitate the conduct of general and association meetings. Shareholders
were given the opportunity to submit questions in writing to the Board and
the CEO prior to the EGM.
↓ Board meetings
The Board held twelve meetings in 2020, four of which were in connection
with the company’s publication of its quarterly reports. One meeting
was dedicated to reviews of strategic issues and the Group budget for
2021. Two meetings were held in connection with the company’s AGM.
In addition, the Board paid particular attention to strategic, financial and
accounting issues, the monitoring of business operations, the valuation of
the company’s forests, effects of the coronavirus pandemic, sustainability
issues, acquisition of the sawmill group Martinsons and other significant
investment matters. On two occasions the company’s auditor reported
directly to the Board, providing a presentation about their audit of the
accounts and internal control.
36
Holmen Annual Report 2020
Corporate governance report
Shareholders
Nomination committee
General meeting of shareholders
Board of Directors
CEO
Group management
Five group staffs
Five business areas
Auditors
Nomination committee
The AGM resolved that the nomination
committee shall consist of the chairman
of the Board and one representative from
each of the three shareholders in the
company that control the most votes at
31 August each year. The composition of
the nomination committee for the 2020
and 2021 AGMs is shown in the table on
page 39.
The nomination committee’s mandate
is to submit proposals for the election of
Board members and the Board chairman,
for the Board fee and auditing fees and,
where applicable, for the election of auditors.
The committee’s proposals are presented
in the notice convening the AGM.
The nomination committee applies rule
4.1 of the Swedish Corporate Governance
Code (the Code) as a diversity policy in put-
ting forward proposed Board members,
which means the composition of the Board
should reflect the company’s business op
erations, phase of development and other
circumstances, and should be diverse and
wide-ranging in terms of the expertise, ex-
perience and background of the members
elected by general meetings. An even gen-
der distribution is sought. The nomination
committee has observed this policy in its
proposals to the Board. Further information
about the work of the nomination committee
will be provided at the 2021 AGM.
For the 2021 AGM, the nomination com-
mittee proposes that the Board consist of
nine members elected by the AGM. The
nomi nation committee proposes the re-
election of the current Board members:
Fredrik Lundberg (who is also proposed
for reelection as Chairman of the Board),
Carl Bennet, Alice Kempe, Lars Josefsson,
Lars G Josefsson, Louise Lindh, Ulf Lundahl,
Henrik Sjölund and Henriette Zeuchner.
The audit committee conducted a pro-
curement process for a new auditing com-
pany in 2020. For the 2021 AGM, the nomi-
nation committee proposes, in line with the
recommendation of the audit committee,
that PWC, Pricewaterhouse Coopers AB, is
the first choice and Ernst & Young AB is the
second choice to serve as the company’s
auditor for a period of one year until the
adjournment of the 2022 AGM.
Composition of the Board
The members of the Board are elected each
year by the AGM for the period until the end
of the next AGM. According to the articles of
association, the Board should consist of
seven to eleven members. The company’s
articles of association contain no other rules
regarding the appointment or dismissal of
Board members, or regarding amendments
to the articles, or restrictions on how long
members can serve on the Board.
The 2020 AGM reelected Fredrik
Lundberg , Carl Bennet, Lars G Josefsson,
Lars Josefsson, Alice Kempe, Louise Lindh,
Ulf Lundahl, Henriette Zeuchner and Henrik
Sjölund to the Board. Fredrik Lundberg was
reelected Chairman of the Board. At the
statutory first meeting of the new Board in
2020, Henrik Andersson, Senior Vice Presi-
dent Legal Affairs, was appointed company
secretary.
↓ Members of the Board of Directors
Attendance at meetings in 2020:
Board members
Elected
Role on the
Board
Audit
committee
Remuneration
committee
Board of
Directors
Audit
committee1)
Remuneration
committee2)
Fee
(SEK ’000)
Fredrik Lundberg
Carl Bennet
Lars O Josefsson
Lars G Josefsson
Alice Kempe
Louise Lindh
Ulf Lundahl
Henriette Zeuchner
Henrik Sjölund
1988
2009
2016
2011
2019
2010
2004
2015
2014
Chairman
Member
Member
Member
Member
Member
Member
Member
Member,
President & CEO
Member
–
Member
–
–
–
Chairman
–
–
Chairman
Member
–
–
Member
–
–
–
–
12/12
12/12
11/12
12/12
12/12
11/12
10/12
12/12
12/12
6/6
2/6
6/6
2/6
2/6
2/6
5/6
2/6
–
2/2
2/2
–
–
1/2
–
–
–
–
710
355
355
355
355
355
355
355
–
1) As of the 2020 AGM the audit committee consists of Ulf Lundahl (Chair), Fredrik Lundberg and Lars O Josefsson. Before that time, the audit committee
consisted of the external Board members.
2) As of the 2020 AGM, the remuneration committee consists of Fredrik Lundberg (Chair), Carl Bennet and Alice Kempe. Before that time the remuneration
committee consisted of Fredrik Lundberg and Carl Bennet.
According to the nomination committee, Fredrik Lundberg, Carl Bennet, Lars G Josefsson, Lars Josefsson, Alice Kempe, Louise Lindh, Ulf Lundahl and
Henriette Zeuchner are independent of the company and its senior management, and Lars G Josefsson, Lars Josefsson, Ulf Lundahl, Henriette Zeuchner
and Henrik Sjölund are independent of the company’s major shareholders.
Employee representatives
Steewe Björklundh, member, elected 1998/Kenneth Johansson, member, elected 2004/Tommy Åsenbrygg, member, elected 2009/Per-Arne Berg,
deputy member, elected 2015/Daniel Hägglund, deputy member, elected 2014/Christer Johansson, deputy member, elected 2017.
Holmen Annual Report 2020
37
Corporate governance report Strategy and targets
Strategy, budget and management by objectives
Business processes
Earnings, reporting and monitoring
Code of Conduct
Policies
Guidelines
Authority
Values
Group instructions
Authorisation rules
Management systems
Internal management processes and guideline documents.
Over and above the nine members elected
by the AGM, the local labour organisations
have a statutory right to appoint three
members and three deputy members.
Of the nine Board members elected by
the AGM, eight are deemed independent
of the company as defined by the Code.
The CEO is the only Board member with an
operational position in the company. Further
information about the members of the Board
is provided on pages 84–85.
The Board’s activities
The activities of the Board follow a plan, one
of whose aims is to ensure that the Board
obtains all requisite information. Each year
the Board decides on written working pro-
cedures and issues written instructions
relating to the division of responsibilities
between the Board and the CEO and the
information that the Board is to receive
continually on financial developments and
other key events. Employees of the company
participate in Board meetings to submit
reports.
In order to develop the work of the Board,
an annual evaluation is undertaken involving
each member answering a questionnaire
containing relevant questions concerning
the Board’s work and having the opportunity
to make suggestions on how to enhance the
Board’s work. Their responses were pre-
sented and discussed at a Board meeting.
The results of the 2020 evaluation will form
the basis for planning the Board’s work for
the coming year. The Chairman of the Board
has reported the results of the evaluation to
the nomination committee.
Remuneration
The Board has appointed a remuneration
committee consisting of Fredrik Lundberg,
Carl Bennet and Alice Kempe. During the
year, the committee prepared matters
pertaining to the remuneration and other
38
Holmen Annual Report 2020
employment conditions of the CEO and also
evaluated guidelines for remuneration and
share savings programmes.
Remuneration and other employment
conditions for senior management who
report directly to the CEO are decided by
the latter and approved by the remunera-
tion committee in accordance with the
instructions for the remuneration commit-
tee adopted by the Board of Directors, as
well as the guidelines adopted by the AGM
for remuneration of senior management.
The Group applies the principle that
each manager’s manager must approve
decisions on remuneration in consultation
with the relevant personnel manager.
At the 2020 AGM the Board set out its
proposals regarding guidelines for remu-
neration of the CEO and other senior man-
agement, i.e. heads of business areas and
heads of Group staffs who report directly to
the CEO. The AGM adopted the guidelines
in accordance with the Board’s proposal.
Current guidelines and information about
remuneration are presented in Note 4 on
page 61.
The 2020 AGM approved the Board fee
and payment of the auditors’ fee as
invoiced.
The 2020 AGM resolved to adjust the
performance terms of the share savings
programme adopted by the 2019 AGM,
which covers 54 members of senior man-
agement in the company. The adjustment
was made because of a change of account-
ing policy for the company’s forest assets.
The programme will expire upon publication
of the interim report for January–March
2022. The company’s commitment to pro-
vide shares under the programme will be
met by means of free transfers of treasury
shares. The effects on key ratios and profit
per share are marginal. See Note 4 on page
61 for further information about the share
savings programme.
Group management
The Board has delegated operational
responsibility for management of the com-
pany and the Group to the CEO. The Board
an nual ly decides on instructions covering
the distribution of tasks between the Board
and the CEO.
Holmen’s Group management comprises
the company’s CEO, the heads of the five
business areas, the heads of the five Group
staffs and the head of international affairs.
Information about the CEO and other mem-
bers of Group management is provided on
page 86.
Group management met on nine occa-
sions in 2020. The meetings dealt with
matters such as earnings performance and
reports before and after Board meetings,
strategic issues, budgets, investments,
acquisition of the sawmill group Martinsons,
internal control, work environment, sustain-
ability issues, climate and environmental
issues and silviculture matters. Meetings
were also dedicated to reviews of market
conditions, the coronavirus pandemic,
economic developments, possible conse-
quences of Brexit and other external factors
affecting the business, as well as discussion
about governance of the Group and the tools,
such as the managementbyobjectives
model and Group-wide policies, used in
such governance.
Audit
KPMG, which has been Holmen’s auditor
since 1995, was re-elected by the 2020
AGM as auditor for a period of one year.
Authorised Public Accountant Joakim
Thilstedt was appointed as the principal
auditor. KPMG audits Holmen AB and al
most all of its subsidiaries.
The examination of internal procedures
and control systems begins in the second
quarter and continues thereafter until
yearend. The interim report for January–
September is subject to review by the audi-
tors. The examination and audit of the final
annual accounts and the annual report,
including the sustainability report, take
place in January–February.
Up until the 2020 AGM, the audit com-
mittee consisted of the external Board
members, who met two times. After that
date, the committee consisted of Ulf
Lundahl, Chairman, Fredrik Lundberg and
Lars Josefsson who met four times. The
Board’s reporting instructions include
requirements that the members of the
Board shall receive a report each year from
the auditors confirming that the company’s
organisation is structured to enable satis-
factory supervision of accounting, manage-
ment of funds and other aspects of the
company’s financial circumstances. The
auditors reported in 2020 to the audit com-
mittee at three meetings and to the Board of
Directors on two occasions. In addition to
the audit assignment, Holmen has consulted
KPMG on matters pertaining to taxation,
accounting and for various investigations.
The remuneration paid to KPMG for 2020
is stated in Note 5 on page 62.
Corporate governance report
KPMG is required to assess its independ-
ence before making decisions on whether
to provide Holmen with indepen dent advice
alongside its audit assignment.
Internal management processes
Holmen’s business strategy is formulated
by Group management in order to create
long-term value for both shareholders and
customers, while contributing to a better
climate and thriving rural communities.
A review is conducted annually of each
business area’s strategy, including the
business’ goals. The strategy, which is pre-
sented to and adopted by the Board, forms
the basis of the expectations applied to the
units in each respective business area. On
the basis of the expectations, each unit sets
objectives and identifies success factors for
achieving them. Key performance indicators
(KPIs) are linked to the success factors in
order to measure and demonstrate changes
in performance. The strategy review also
provides the basis for the budget, in which
decisions are taken on the distribution of
resources and targets for the coming year are
set. Use of a simple and wellimplemented
managementbyobjectives tool for con
tinuous follow-up ensures that the entire
organisation is applying appropriate priori-
ties to attain the objectives established.
The business areas guide the operating
businesses towards these targets using pro-
cesses for purchasing, production and sales,
and supported by HR, financial mana gement,
research and development, IT, environment
and communication processes.
Operations are followed up through
regu lar reporting of performance and KPIs
that reflect business activity, along with
additional qualitative analysis. Reporting of
sustainability data is integrated with finan-
cial reporting.
Code of Conduct. Holmen’s Code of Conduct
is in line with the UN Global Compact and
provides guidance on day-to-day operations
and clarifies what expectations are made of
employees. Holmen’s operations should be
characterised by responsible behaviour
towards both internal and external stake-
holders. The Supplier Code of Conduct com-
plies with the UN Global Compact and covers
the areas of anti-corruption, human rights,
health and safety and the environment.
With respect for human rights, Holmen
endeavours to ensure a workplace climate
that is founded on the equal value of all
people. All Holmen’s employees must have
the same rights, obligations and opportuni-
ties irrespective of their sex, transgender
identity or expression, ethnicity, religion or
other belief, disability, sexual orientation
and age. Holmen is subject to the UK Modern
Slavery Act and a report relating to this is
available at holmen.com.
Policies. Holmen uses policies, guidelines
and Group instructions to clarify how
em ployees should act within key and critical
areas. The Group’s 11 policies cover matters
materials should be used efficiently, pollu-
tion should be prevented and that we should
aspire to make continuous improvements.
Financial risk is managed centrally and
should be characterised by a low level of
risk. The policies should also ensure that
the company’s assets are managed in
accor dance with Group rules, risks of errors
in financial reporting are minimised and
irregularities are prevented. The Group’s
purchasing should contribute to long-term
profitability. The sustainable sale of raw
materials, products and services should
be ensured in both the short and long term.
Communication must be accurate, trans-
parent and easily accessible and comply
with legal requirements and commercial
confidentiality.
Compliance. Holmen’s Code of Conduct,
policies and values are part of every
”Holmen is a forest-owning company whose business is to
create lasting value over time and mitigate global warming.
The climate benefit is created by capture and storage of
carbon dioxide, as well as the production of renewable
energy and products that replace fossil materials.”
Louise Lindh, Holmen Board member
such as expectations of employee participa-
tion and leadership, specify the scope of
management by objectives, talent manage-
ment, interaction with trade union organisa-
tions, equality and employment terms and
conditions. In addition to this, a good work
environment is covered in terms of health
and safety, anti-corruption and competition
issues, and how good business practice is
maintained in relation to external contacts
on different markets. Employees in depart-
ments at risk of encountering unauthorised
behaviour receive special training on busi-
ness ethics. The policies specify that raw
employee’s induction programme, and
are reiterated by managers at employee
meetings. Compliance is monitored partly
through employee surveys and appraisal
talks, pay surveys, safety statistics and
audits of the organisational and social work
environment. Where non-compliance or
failings are found in terms of the corporate
culture, the issue is addressed on a case-by-
case basis. A few events linked to Holmen’s
Code of Conduct were reported during the
year, which were handled according to
internal procedures.
↓ Composition of the nomination committee
Before AGM:
Independent of the:
Name
Mats Guldbrand
Fredrik Lundberg
Carl Kempe
Hans Hedström
Representing
2021
L E Lundbergföretagen* x (chairman)
Chairman of the Board
Kempe Foundations*
Carnegie Funds*
x
x
x
2020
x (chairman)
x
x
x
Company
Largest shareholder
(in terms of votes)
Yes
Yes
Yes
Yes
No
No
Yes
Yes
* At 31 August 2020, L E Lundbergföretagen controlled 62.3 per cent of the votes, the Kempe Foundations controlled 17.5 per cent and Carnegie Funds (Sweden) controlled 1.5 per cent.
Holmen Annual Report 2020
39
Corporate governance report
Whistleblower function. A whistleblower
function is available so that employees and
other stakeholders can highlight any defi-
ciencies in Holmen’s financial reporting or
other possible areas of concern at the com-
pany. No complaints about deficiencies
were reported through this channel in 2020.
Internal control of financial
reporting
The Board’s responsibility for internal con-
trol and financial reporting is regulated by
the Swedish Companies Act and the Swedish
Corporate Governance Code. Under this
code, the Board is also responsible for
en suring that the company is managed in a
sustainable and responsible manner. Day
to-day responsibility for all these matters is
delegated to the CEO.
Purpose and structure. The purpose of
internal control is to ensure that Holmen
achieves its financial reporting objectives
(see below), ensure the company’s assets
are managed according to Group rules and
to prevent irregularities. Group Finance
coordinates and monitors the internal con-
trol process concerning financial reporting.
This work adheres to guidelines issued
by the Committee of Sponsoring Organiza-
tions of the Treadway Commission (COSO)
in respect of internal control over financial
reporting. The framework comprises five
basic elements: control environment, risk
assessment, control activities, information
and communication, as well as monitoring
activities and evaluations. The framework
has been modified to suit the estimated
needs of Holmen’s various operations.
Control environment. The control environ-
ment provides the basis for internal control
of financial reporting and is based in part on
the company’s internal management pro-
cesses. The Board of Directors’ procedural
rules and the instruction for the CEO estab-
lish the distribution of roles and responsi-
bilities to ensure effective control and mana-
gement of the business’ risks.
Policies, guidelines and instructions con-
tribute to making individuals aware of their
role in establishing good internal control.
These documents also ensure that financial
reporting complies with the laws and rules
that apply to companies listed on Nasdaq
Stockholm and the local rules in each coun-
try where the company operates.
Risk assessment. Risk assessment activi-
ties aim to identify and evaluate the risks
that can result in the Group’s financial
reporting objectives not being met. The
results of these riskrelated activities are
compiled and assessed under the guidance
of Group Finance.
Holmen’s greatest risks regarding finan-
cial reporting are linked to the valuation of
forest assets, pension provisions, other
provisions and to financial transactions.
The risk assessment also involves identify-
ing and assessing operational risks. For fur-
ther information, see the Risk Management
section on pages 41–45.
Control activities. To ensure that Holmen’s
financial reporting objectives are met, con-
trol requirements are incorporated into the
processes that are deemed relevant: sales,
purchasing, investments, personnel, finan-
cial statements, payments and IT. Control
activities aim to prevent, identify and rectify
errors and discrepancies. Businessspecific
self-assessments that are completed by all
Group units set out what control require-
ments apply for each respective process and
whether or not they are met.
Information and communication. Holmen’s
financial information provision, both external
and internal, adheres to a communication
policy established by the CEO. The provi-
sion of financial information for Holmen’s
shareholders and other stakeholders must
be accurate, comprehensive, transparent
and consistent, and must take place on
equal terms and at the right time.
Followup and evaluation. Control activities
are assessed regularly to ensure that they
are effective and appropriate. The results of
self-assessments are followed up on a con-
tinual basis and discrepancies are reported
to the Executive Vice President. The accuracy
of selfassessments is subject to testing.
The reporting of internal control to Group
management takes place once a year. The
company’s auditors report their observa-
tions from the review of internal control to
the audit committee and Board during the
year.
Follow-up is an important tool to identify
possible deficiencies within the Group and
to address these through the development
of new control requirements.
Statement on internal audit. The Board of
Directors does not believe that particular
circumstances in the business or other
conditions exist to justify an internal audit
function. The internal control managed by
the Group, together with the activities car-
ried out by the external auditors, is deemed
to be sufficient.
↓ Holmen’s financial reporting
External financial reporting must:
• be accurate and complete, and comply with applicable laws, regulations
and recommendations
• provide a true and fair description of the company’s business
• support a reasoned and informed valuation of the business.
Internal financial reporting must also support correct business decisions at all
levels in the Group.
” Climate benefit is fundamental in Holmen’s
business and sustainability is naturally
integrated into our corporate governance.
We were among the first to integrate the
sustainability report into our annual
report and have done so since 2010.”
Anders Jernhall, Executive Vice President and CFO, Holmen
40
Holmen Annual Report 2020
Corporate governance report
Risk management
The Group’s business and operational risks
are managed by the relevant business areas,
which also take decisions regarding produc-
tion, sales and employees with the aim of
generating a lasting good return on invested
capital. Risks are addressed using the busi-
ness areas’ management systems.
Purchasing and IT are managed by Group-
wide functions in order to leverage econo-
mies of scale and risks are handled in line
with the Group’s policies. The Group’s
financing and financial risks are managed by
Group Finance based on a financial policy
established by the Board and that is
characterised by a low level of risk and
aims to minimise the Group’s cost of capital
and provide effective control of the Group’s
financial risks.
↓ Operational risks
Risk
Risk management
Comment
Production and deliveries
Demand for Holmen’s products is affected by
many factors, both political and macroeconomic,
including production among European manufac-
turers, changes in imports to Europe and oppor-
tunities for profitably exporting from Europe.
Changes in demand for Holmen’s products af-
fect the ability to achieve full production at the
Group’s industries and can lead to lower income.
Income may also be impacted if harvesting
from our own forests needs to be limited as a
result of lower demand and variations in pre-
cipitation and wind, which govern generation
from hydro and wind power.
Holmen endeavours to maintain a good cost
position through large-scale production at
well-invested production facilities, efficient
logistics solutions and good control over the
supply of wood. Together with longstanding
customer relationships and strong product
brands, this also increases the ability to main-
tain a high level of production amid more diffi-
cult market conditions. Changes in demand
for wood may be met by shifting harvesting
from our own forests from year to year, while
production of hydro power during the year
can be controlled by regulating water reser-
voir levels.
Selling prices
The market balance in each product segment
governs the selling price and affects income.
Raw materials
Wood, electricity and chemicals are the most
significant input goods and price changes affect
profitability. Holmen’s costs depend on the
price trend for input goods, as well as on how
well the Group succeeds in making production
and administration more efficient. There is a
risk that the Group’s costs will increase if there
is a shortage of raw materials, or if prices in-
crease for input goods.
Holmen has limited possibilities to make
rapid changes to its product range in the
event of changes in price, but it adjusts its
product focus towards those products and
markets deemed to have the best long-term
conditions, and by having a broad customer
base and offering across a number of product
areas. Changes in the price of wood can be
managed to some extent by shifting harvest-
ing from year to year and changes in the price
of electricity can be managed by regulating
reservoir water levels in order to shift elec-
tricity generation over the year.
Half of the Group’s wood needs are covered
by harvesting from the Group’s own forests,
while the remainder is purchased from private
forest owners. The Group is largely in balance
in terms of pulp as a result of the integrated
production process. The paperboard business
generates almost all the electricity required
at its own mills, while electricity for paper
manufacturing is supplied from external pur-
chases. The Group also sells electricity from
its hydro power and wind power assets, as
well as from bioenergy, to the electricity grid.
In net terms, the Group’s own electricity
gene ration corresponds to about 50 per cent
of its total electricity consumption. The price
risk in this consumption is managed through
physical fixed price contracts and financial
hedging. The need for thermal energy is great
and is met locally through recycling and pro-
duction from residual products. Chemicals
are a significant input, particularly in paper-
board production, but the need is being
reduced since used chemicals are recycled
at the mills.
In 2020, Holmen acquired the wood products com-
pany Martinsons, which strengthens Holmen’s mar-
ket position for wood products. In addition, much
of the company’s own forests are refined by its own
industry as a result of the acquisition. The work to
expand production capacity by 150 000 cubic me-
tres at Braviken Sawmill was completed in 2020.
The work to construct Blåbergsliden Wind Farm with
a 143 MW capacity is underway and is expected
to increase Holmen’s electricity generation from
hydro and wind power by 35 per cent in late 2021.
Production of paper was limited during the year be-
cause of weak demand in the wake of the pandemic.
For information about how changes in deliveries
would affect Holmen’s operating profit, given the
circumstances on 31 December 2020, see the
sensitivity analysis on page 45.
The price of paperboard was stable during the year,
while the price of wood products rose as a result of
home renovation projects in several markets, at the
same time that production was limited in certain
regions. Paper prices fell as a result of weak de-
mand. The large supply of hydro power caused the
price of electricity to fall compared with 2019. For
information about how changes in prices would af-
fect Holmen’s operating profit, given the circum-
stances on 31 December 2020, see the sensitivity
analysis on page 45.
On average, the price of wood and chemicals
was somewhat lower in 2020 than in 2019. The
price of net electricity consumption is 65 per cent
hedged for 2021, 65 per cent for 2022, and 15–35
per cent hedged for 2023–2025. The Group’s net
exposure to the price of electricity will decrease
once Blåbergsliden Wind Farm is operational at
the end of 2021. The nominal amount for financial
hedging is SEK 625 million. For information about
how changes in commodity prices would affect
Holmen’s operating profit, given the circumstances
on 31 December 2020, see the sensitivity analysis
on page 45.
Holmen Annual Report 2020
41
Risk management
Risk
Risk management
Comment
Suppliers
Deficiencies in the supply chain for inputs in
terms of security of supply and quality can lead
to production disruptions. Suppliers that do not
meet Holmen’s requirements can also have a
negative effect on operations. There is also a
risk that essential raw materials are not deli-
vered because of changes in laws and regula-
tions or other external factors.
Customer credits
The risk of the Group’s customers being unable
to fulfil their payment obligations constitutes a
credit risk.
Facilities
Production equipment can be seriously
damaged, for example, in the event of a fire,
machine breakdown or power outage. This can
lead to supply problems, unexpected costs and
reduced customer confidence. Production
facilities require ongoing maintenance. Major
maintenance shutdowns can entail higher costs
and greater loss of production than planned.
Investments in non-current assets can also be
more expensive than initially planned.
IT systems
Efficient IT support is required to be able to
plan and manage the production and when
handling sales and purchasing. Disruptions in
IT support and unauthorised access to informa-
tion can have significant negative effects on the
business.
Forest management
Holmen’s right to manage its own forest is cru-
cial for maintaining its value. There is a risk that
requirements to allocate areas for purposes
other than forestry could increase in the future.
Such a development could have a negative im-
pact on the value of Holmen’s forest assets.
Damage to forests
Wild game can damage the forest when graz-
ing, resulting in both deterioration of the quality
of the trees and reduced forest growth. Insect
pests are another risk factor; for example, the
spruce bark beetle can damage spruce forests.
Climate change
The Swedish Meteorological and Hydrological
Institute’s forecasts show that average tempera-
ture, precipitation and soil moisture will increase
in Sweden. A warmer climate could increase the
growth of our northerly growing forests with a
longer growth period, more precipitation and
higher levels of carbon dioxide in the air, aiding
photosynthesis. It could also affect biological
diversity and raise the risk of wind and snow
damage, fungal attack, insect damage and
forest fires. Climate change could also impact
the ability to carry out harvesting.
42
Holmen Annual Report 2020
Holmen endeavours to have at least two ap-
proved suppliers per area of use. In addition,
Holmen’s Supplier Code of Conduct is included
in all new contracts. It contains requirements
on sustainable development, including by re-
specting internationally recognised principles
on anti-corruption measures, human rights,
health and safety and the environment. Since
2017, Holmen has engaged an external party,
Ecovadis, to monitor suppliers regarding their
compliance with the Code. Holmen is subject to
the UK Modern Slavery Act and a report on this
is available at holmen.com.
In 2020, 1 (0) case regarding breach of the Supplier
Code of Conduct was reported. There is an active
dialogue with an action plan in place in accordance
with Holmen’s procedures. Suppliers associated
with 90 per cent (90) of the Group’s purchasing vo-
lumes have signed the Code. Supply chain risks re-
lating to the environment, labour legislation, human
rights, business ethics and a sustainable purchasing
have been mapped and an action plan has been for-
mulated. Despite the challenges associated with the
pandemic, Holmen has been able to maintain its de-
liveries of essential raw materials to such an extent
that production has not been negatively impacted.
The risk that the Group’s customers will not
fulfil their payment obligations is limited by
means of creditworthiness checks, internal
credit limits per customer and, in some cases,
by insuring trade receivables against credit
losses. Credit limits are continually monitored.
Exposure to individual customers is limited.
At 31 December 2020, the Group’s trade receiva-
bles totalled SEK 2 015 million, of which 32 per
cent (35) were insured against credit losses. During
the year, credit losses on trade receivables had a
SEK -14 million (-7) impact on earnings. Sales to
the five largest customers accounted for 15 per
cent (15) of the Group’s total sales in 2020.
No event causing significant damage occurred in
2020. During the year one major maintenance
shutdown was carried out at Iggesund Mill, which
went smoothly. The ongoing investment in the
Blåbergsliden wind farm is progressing according
to plan.
Business operations were not affected by IT inci-
dents in 2020. Disruptions in IT support were
avoided despite the heavy workload caused by the
increase in remote work as a result of the pandemic.
The regularly recurring IT security training course
was held for employees during the year.
Of Holmen’s total land area of 1 303 000 hectares,
195 000 hectares are set aside for nature conser-
vation purposes.
The spruce bark beetle infestation continued in
southern Sweden in 2020. To prevent spread,
Holmen prioritised harvesting spruce bark beetle
infested forests and the percentage of spruce sawn
at Braviken Sawmill increased to take care of the
damaged logs.
Ongoing climate risk analyses are conducted to
create healthy, resilient forests suited to a chang-
ing climate. Climate change is leading to greater
demand for Holmen’s products as our customers
want renewable alternatives to fossil-based
products.
Damage prevention measures, regular mainte-
nance and continual upgrades can minimise the
risk of damage to facilities. Training of employees
promotes participation, knowledge and aware-
ness about these risks and how they can be
countered. Holmen insures its facilities at re-
placement value against damage to property
and interruption of business. The insurance ex-
cess varies from one facility to another, but the
maximum is SEK 35 million for a single claim.
The Group has liability insurance that also
covers sudden and unforeseen environmental
damage affecting third parties.
Operating disruptions and unauthorised access
are prevented by security measures and preven-
tive measures in the form of appropriate physical
protection, reliable server operation and secure
networks. Measures and procedures are in place
to minimise the risk of interruption and to manage
situations if interruptions occur. Holmen is con-
tinually developing protective measures to ad-
dress changes in the risk profile.
Holmen participates in national and interna-
tional industry organisations whose purpose is
to handle the monitoring of social trends, advo-
cacy and put forward Holmen’s position and
view on relevant political and regulatory issues.
Holmen’s forest holdings are scattered across
large parts of Sweden and the risk of extensive
damage occurring simultaneously is considered
to be low, for which reason the Group does not
have insurance cover for its forest holdings. To
reduce the extent of grazing by wild animals, ac-
tive efforts are undertaken on Holmen’s land to
maintain game at the correct population level.
Insect pests such as pine weevils are combatted
by waxing seedlings and infested forest is har-
vested as soon as possible to prevent spread.
Holmen is developing seedlings and processes
for planting, clearing and thinning to adapt
our forests to a changed climate. Seeds from
Holmen’s cultivation of seedlings are selected
to grow and flourish in a changing climate and
when planting we choose tree species based on
the specific conditions of the soil to ensure the
trees can better withstand extreme weather
such as storms, rain and drought. Since shorter
periods of frozen ground can make harvesting
more difficult in the winter, this work is being ad-
justed through planning and by relocating ma-
chines to areas with better conditions. The risk
of impact on Holmen’s sites from climate change
is being managed through Holmen operational
continuity planning. Risks concerning energy
consumption and greenhouse gas emissions
are managed through our ISO-certified environ-
mental and energy management systems.
Risk management Risk
Risk management
Comment
Environment and permits
Holmen runs operations that require environ-
mental permits. The permits specify conditions
regarding permitted production volumes and
permitted emissions to air and water. Produc-
tion disruptions can cause breaches of emis-
sions conditions set for the business by envi-
ronmental authorities, which could impact
the environment. In places where Holmen has
conducted industrial operations, the need for
remediation may entail future costs.
Health and safety
Incidents and accidents at the workplace
have an effect on human life and health. This
could also lead to production disruptions and
increased costs.
Environmental measures are organised and
conducted in accordance with Holmen’s
environ mental and energy policy. In the event
of process disruptions, the environment takes
precedence over production. Risks are preven-
ted and managed through regular own checks,
checks by authorities and environmental risk
analyses, as well as through the use of certi-
fied environmental and energy management
systems and chain-of-custody certification.
In consultation with the authorities, Holmen is
conducting investigations to assess the need
for remediation at former industrial sites.
Good health and safety is a priority at all levels
of management in the Group. Certified manage-
ment systems, Group-wide targets relating to
work accidents, continual training of personnel
to increase risk awareness, procedures for risk
observation and incident and accident report-
ing, and risk assessment of tasks and work
by contractors are examples of activities to
achieve a high level of safety in the workplace.
Talent management
Skilled and motivated employees are key to
being able to conduct long-term business
operations with good profitability. Retirements
increase the need to attract new personnel,
which can be challenging.
With Holmen’s employer brand, we are
marketing Holmen as an employer in digital
channels and physical meetings. We have a
strong Employer Value Proposition (EVP) with
our sustainable business and the small big
company as the prominent message.
Business ethics risks
Nationally and internationally, customers
and partners place requirements on Holmen
as a stable and reliable supplier that has
good business ethics and clear sustainability
principles. Deviations from principles and
policies could have a negative impact on
reputation and business relationships.
International, political and legal risks
Holmen is active in a global market and sells
products to many countries around the world.
Because of this geographical spread, Holmen
is exposed to political risks, conflicts, natural
disasters, epidemics and pandemics. Moreover,
Holmen is obligated to comply with laws and
regulations where Holmen conducts business,
including in areas such as the environment,
real estate, labour law and taxation. Changes
in laws and regulations may affect conditions
for Holmen’s operations and lead to increased
costs for regulatory compliance. Since Holmen’s
business is based on our sustainable use of
the forest and land, it is important that laws
and regulations, such as the Environmental
Code, the Forest Inquiry and the EU taxonomy
promote the development of green growth.
Holmen’s Code of Conduct, business ethics
policy and associated guidelines provide clear
guidance on how to maintain good business
ethics when dealing with external contacts in
various markets. Holmen’s Code of Conduct
also provides guidance on human rights,
workers’ rights and the environment. These
areas are clarified in Holmen’s policies and
related guidelines. Managers and employees
in sales, marketing, purchasing, finance, HR,
information, market communication, projects
and Group staffs have all received training in
all aspects of Holmen’s Code of Conduct.
Holmen participates in national and interna-
tional industry organisations whose purpose
is to handle the monitoring of social trends,
advocacy and put forward Holmen’s position
and view on relevant political and regulatory
issues. Contact is established with local rep-
resentatives and the general public in areas
where the Group has operations. This takes
place, for example, through consultation and
information meetings and through meetings
with decision-makers. More unpredictable risks
that may arise, such as shutdowns as a result
of disease outbreaks or political unrest, are
managed through ongoing external monitoring,
close dialogue and coordination with indus-
try organisations to maintain the best possible
preparedness.
In 2020, 37 (35) environmentally related incidents
were reported to the supervisory authorities. The
nonconformities were not of a significant nature in
terms of environmental impact or impact on profits.
The figure in 2020 was 4.3 (5.7) industrial acci dents
per 1 million hours worked. See also page 35. The
most common accidents were slips, trips, cuts and
pinch point accidents. The most significant areas of
risk involve work with overhead cranes and vehicles
with peo ple in movement. As a result of the corona-
virus pandemic, we implemented a large number
of adaptations and measures to ensure a safe work
environment for employees and others present in
our operations.
Our employer branding efforts in digital channels at
the Group level, combined with local efforts at our
operating sites, provide a good foundation for an
inflow of interested applicants to our vacant posi-
tions. The voluntary employee turnover is stable
and annual surveys show that new employees ap-
preciate Holmen as an employer, both the culture
and the job opportunities. Holmen has not fur-
loughed personnel as a result of the pandemic
during the year.
In 2020, 0 (0) cases concerning deviations from
the business ethics policy or the parts of the
Code of Conduct regarding business ethics issues
were reported. During the year, 89 per cent of the
designated functions completed the training on the
Code of Conduct. See also page 35.
The outbreak of the coronavirus pandemic has had
a negative impact on profitability within the Paper
business area, while impact on other business areas
has been limited. The Group worked continually in
2020 to take action to minimise the impact of the
coronavirus outbreak, with a focus on the health
and safety of our employees. To mitigate the effects
of the UK’s exit from the EU, Holmen took a number
of measures during the year; for example, logistics
solutions and warehouses were adapted to ensure
deliveries to customers and from suppliers. Holmen
has also been active through dialogue, responses
to reports, preparedness and advocacy work
along with industry organisations to promote the
development of green growth.
Holmen Annual Report 2020
43
Risk management ↓ Financial risks
Risk
Risk management
Comment
Currency
The Group’s earnings are affected by fluctua-
tions in exchange rates. Transaction exposure
risk arises due to a significant portion of the
Group’s sales income being in different cur-
rencies from costs. The translation exposure
risk arises from the translation of foreign sub-
sidiaries’ assets, liabilities and earnings into
Swedish kronor.
For just over the next two years, expected flows in
EUR/SEK are hedged at an average of 10.64. For
other currencies, 4–7 months of flows are hedged.
Hedging of exposure to pounds sterling amounted
to GBP 33 million at year-end. Net assets in other
currencies are limited and are not usually hedged.
Transaction exposure. In order to reduce
the impact on profit from changes in exchange
rates, net flows are hedged using forward for-
eign exchange contracts. Net flows in euros, US
dollars and sterling for the coming four months
are always hedged. These normally correspond
to trade receivables and outstanding orders.
The Board can decide to hedge flows for a
longer period if this is deemed suitable in light
of the products’ profitability, competitiveness
and the currency situation. Currency exposure
arising when investments are paid for in foreign
currency is distinguished from other transac-
tion exposure. Normally, 90–100 per cent of
the currency exposure associated with major
investments is hedged.
Translation exposure. Hedging exposure that
arises when subsidiaries’ assets and liabilities
are translated into Swedish kronor (known as
equity hedging) is assessed on a case-by-case
basis and is arranged based on the value of net
assets upon consolidation. The Group’s non-
current assets are mainly Swedish, with the
exception of the paperboard mill in the UK,
which accounts for 2 per cent of the assets. The
hedges take the form of foreign currency loans
or forward foreign exchange contracts. Exposure
that arises when the earnings of foreign sub-
sidiaries are translated into Swedish kronor is
not normally hedged.
SEKm
9 000
6 000
3 000
0
EUR/SEK
GBP/SEK
USD/SEK
EUR/GBP
CNH/SEK
Net flow 12 months
Hedged
Interest rates
Risks that arise when changes in the market
interest rate affect the Group’s interest income
and cost.
The fixed rate period for the Group’s financial
assets and liabilities is normally short. The
Board can decide to lengthen these periods
in order to limit the effect of a rise in interest
rates. Derivatives in the form of interest rate
swaps may be used to manage fixed interest
rate periods without altering underlying loans.
The Group’s average borrowing rate in 2020 was
1.2 per cent.
In 2020 interest on loans of SEK 900 million was
fixed for 5 years. The table below shows the Group’s
fixed interest rate period by currency.
SEKm
<1 year
1–3
years
3–5
years
>5
years
Pension
provisions
Right-of-use
agreements
Total
SEK
-1 773
-500
-1 400
EUR
GBP
Other items
24
-213
16
-
-
-
-
-
-
-1 946
-500 -1 400
-
-
-
-
-
-18
-6
-24
-
-48
-192
-3 883
-78
-7
-10
-61
-244
6
-287
-4 181
At 31 December 2020, the Group had outstanding
derivative contracts with a nominal amount
of SEK 15 billion and a net fair value of
SEK +477 million.
A maximum credit risk and settlement risk are
established for each financial counterparty and
are monitored continually. Holmen’s financial
counterparties are assessed using reputable
credit rating agencies or, where a counterparty
has no credit rating, the company’s own analyses.
This calculation is based on the maturity and
historical volatility of different types of deriva-
tive. The maximum credit risk for other finan-
cial assets is estimated to correspond to their
nominal amount.
Credit risk from financial counterparties
The risk of financial transactions giving
rise to credit risks in relation to financial
counterparties.
44
Holmen Annual Report 2020
Risk management Risk
Risk management
Comment
Liquidity and refinancing
The risk of the need for future funding and
refinancing of maturing loans being required
at a high cost.
Holmen’s strategy is to have a strong financial
position in order to secure room for manoeuvre
when making long-term commercial decisions.
The target is for net financial debt not to ex-
ceed 25 per cent of equity. Holmen’s financ-
ing mainly comprises bonds and the issue of
commercial paper. Holmen reduces the risk
of future funding becoming difficult or expen-
sive by using long-term contractually agreed
credit facilities. The Group plans its financing
by forecasting financing needs over the com-
ing years based on the Group’s budget and
profit forecasts that are regularly updated.
The financial position is strong, with net finan cial
debt at 31 December 2020 amounting to
SEK 4 181 million. Of these financial liabilities,
SEK 605 million falls due in 2021.
The Group has unutilised committed credit facili-
ties of SEK 5 billion, of which SEK 4 billion matures
in 2026 and SEK 1 billion in 2024. Both facilities in-
clude a limit stipulating that they cannot be used if
net liability in relation to equity exceeds 125 per
cent. At year-end, the Group’s net liability in rela-
tion to equity was 10 per cent.
SEKm
5 000
4 000
3 000
2 000
1 000
0
2021
2022
2023
2024
>2025
Financial liabilities
Credit facility
↓ Sensitivity analysis
Operational risks
A 1 per cent change in deliveries and price of
the Group’s products or significant input goods
is deemed to affect Group operating profit as
per the table to the right.
Earnings are relatively evenly spread over the
year. The clearest seasonal effects are lower
personnel costs in the third quarter and the fact
that electricity production at the hydro power
plants is normally higher in the first and fourth
quarters.
Impact on operating profit, SEKm
Change
Price
Deliveries
Paperboard
Paper
Wood products
Wood from company forests
Hydro and wind power
Input goods
Wood*
Electricity*
Chemicals
Other variable costs
Delivery costs
Employees
Other fixed costs
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
60
49
22
13
3
31
16
8
9
2
Change
Price
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
31
11
13
8
14
24
15
* Taking account of harvesting of company forests and generation of own electricity, net earnings sensitivity for
the Group was SEK 18 million for wood and SEK 8 million for electricity.
Financial risks
The table to the right shows the extent of the
impact from a change in the Swedish krona,
the price of electricity and the market interest
rate on Group profit before tax and equity next
year, taking account of hedging. The adopted
change is calculated based on five years’ ave-
rage historical volatility for each instrument,
which is deemed a reasonable change going
forward. Historical volatility on exchange rates
is calcula ted based on average annual volatility
on the KIX, the Riksbank’s exchange rate index.
Excluding hedging, a 5 per cent change in the
krona would affect earnings before tax by
SEK 380 million a year. In addition, a 40 per cent
change in the price of electricity would affect
earnings before tax by SEK 190 million a year,
excluding hedging.
Earnings before tax*
Exchange rates
EUR/SEK
USD/SEK
GBP/SEK
other currencies/SEK
Electricity price
Borrowing rate
Equity
Transaction hedging
Investment hedging
Equity hedging
Electricity price hedging
Interest rate changes
Change
SEKm
+/-5%
+/-5%
+/-5%
+/-5%
+/-5%
+/-40%
+/-0.5% unit
126
8
36
33
48
56
10
Change
SEKm
+/-5%
+/-5%
+/-5%
+/-40%
+/-0.5% unit
535
40
19
256
21
*Estimated effect for 2021 including hedging.
Holmen Annual Report 2020
45
Risk management shaReholdeR infoRmation
Holmen’s two classes of shares
are listed on Nasdaq Stockholm,
Large Cap. Over the past five
years, Holmen’s total shareholder
return (dividend paid and share
price performance) has been 248
per cent, compared with 54 per
cent for OMX Stockholm 30. For
Holmen, this corresponds to an
annual return of 28 per cent. At the
same time, the number of owners
has increased by 20 000 to just
over 48 000.
Stock exchange trading
Holmen was listed on the Stockholm Stock
Exchange in 1936, but was called Mo och
Domsjö AB at that time. Holmen’s two
classes of shares are listed on Nasdaq
Stockholm, Large Cap. At the end of 2020
Holmen A was trading at SEK 415 (295) and
Holmen B at SEK 394 (285), corresponding
to a market capitalisation of SEK 64.7 bil-
lion (46.6). The highest closing price for
Holmen’s class B shares was SEK 396, on
18 December. The lowest closing price
was SEK 228, on 12 March. The daily aver-
age number of class B shares traded was
715 000, which corresponds to a value of
SEK 221 million. The daily average number
of class A shares traded was 2 500. Almost
45 per cent of trading took place on Nasdaq
Stockholm. Holmen shares have also been
traded on other trading platforms, such as
Cboe BXE, Aquis and Turquoise.
Dividend
Decisions on dividends are based on an
appraisal of the Group’s profitability, future
investment plans and financial position.
The Board proposes that the AGM to be
held on 22 April 2021 approve a dividend of
SEK 7.25 per share and an extra dividend of
SEK 3.50 per share.
Share structure
Holmen has 161 925 685 shares outstand-
ing, of which 45 246 468 are class A shares
and 116 679 217 are class B shares. The
company also has 586 639 repurchased
class B shares held in treasury. Each class A
share carries 10 votes, and each class B
share one vote. In other respects, the shares
carry the same rights. Neither laws nor the
company’s articles of association place any
restrictions on the transferability of the
shares.
Cancellation of shares and
share buy-back
The 2020 AGM resolved to cancel 7 000 000
class B treasury shares that were previously
repurchased by the company. After cancel-
lation Holmen holds 586 639 class B shares
in treasury. The 2020 AGM renewed the
authorisation for the Board to be able to take
decisions to purchase up to 10 per cent of
the company’s shares. No buy-backs took
place during the period. The Board proposes
that the 2021 AGM approve corresponding
authorisation for the Board.
Ownership structure
Holmen had a total of 48 104 shareholders
at year-end 2020. In terms of numbers,
Swedish private individuals account for the
largest owner category with 45 749 share-
holders. Shareholders registered in Sweden
own 82 per cent (84) of the share capital.
Among foreign shareholders, the largest
proportion of shares are held in the US and
Finland, accounting for 5 per cent and 2 per
cent of capital, respectively. The largest
owner at the turn of 2020/2021, with 62.3
per cent of votes and 34.1 per cent of capi-
tal, was L E Lundbergföretagen AB.
Shareholder communication
Information about the company is available
at the holmen.com website, including finan
cial information in the form of reports, pres-
entations and financial data, as well as the
performance of Holmen shares and contact
information.
Shareholder categories
Share of capital, %
2
18
12
17
53
Swedish institutions
Swedish equity funds
Swedish private individuals
Foreign shareholders
53%
17%
12%
18%
Share price performance,
Holmen class B and OMX Stockholm
Total shareholder return for Holmen B och OMX Stockholm
incl. reinvested dividend but excl. tax
Index
400
300
200
100
0
Number of shares (thousand)
Index
40 000
30 000
20 000
10 000
600
500
400
300
200
100
16
17
18
19
0
20 Jan 21
0
11
12
13
14
15
16
17
18
19
20
Jan 21
Holmen B
Total number of class B shares traded (thousands)
OMX Stockholm 30 (OMXS30)
Holmen B
Source: Macrobond
OMX Stockholm 30 (OMXS30)
46
Holmen Annual Report 2020
Shareholder information
Earnings per share, 2020
Proposed dividend per share, 2020
SEK 12.2
SEK 7.25 +
SEK 3.50
Annual return at 31 Dec 2020*, %
1 year
3 years
5 years
10 years
Holmen B
OMX Stockholm 30
*Including reinvested dividend.
39
7
25
9
28
9
17
9
Holmen’s total shareholder return has averaged 17 per cent a year over the past 10 years, which is 8 percentage
points better than the OMX Stockholm 30.
Share capital structure
Shares
Votes No. of shares No. of votes Quotient value SEKm
Ownership structure*
31 Dec 2020
% of
capital
% of
votes
L E Lundbergföretagen
Kempe Foundations
Carnegie Funds (Sweden)
SEB Funds
Alecta
Nordea Funds
Swedbank Robur Funds
Vanguard (US)
Norges Bank
Länsförsäkringar
Total
Other
Total
Of which non-Swedish
shareholders
34.1
7.4
5.3
4.3
2.8
2.3
2.3
1.5
1.3
1.3
62.3
17.5
1.5
1.2
0.8
0.7
0.6
0.4
0.4
0.4
62.6
85.8
37.4
14.2
100.0
17.7
100.0
5.3
A
B
Total no. of shares
Holding of repurchased
class B shares
10
1
45 246 468
117 265 856
162 512 324
-586 639
452 464 680
117 265 856
569 730 536
-586 639
Total number of shares outstanding 161 925 685 569 143 897
26 1 180
26 3 058
4 238
* Calculated based on the total number of shares
outstanding. The 10 identified shareholders with
the largest holdings in terms of capital. Some large
shareholders may have their holdings registered
under nominee names, in which case they are
included among ‘Other shareholders’.
Based on the decision of the general meeting, 7 000 000 class B shares were cancelled during the year. The quotient
value increased in conjunction with this cancellation from SEK 25 to SEK 26.
Changes in share capital
2000–2020
Change
in no. of
shares
Total
no. of
shares
Change
in share
capital
Total share
capital,
SEKm
2001 Cancellation of shares repurchased
2004 Conversion and subscription
2018 Share split
2020 Cancellation of shares repurchased
-8 885 827
4 783 711
84 756 162
-7 000 000
79 972 451
84 756 162
169 512 324
162 512 324
-444
239
-
-
3 999
4 238
4 238
4 238
Shareholder statistics at 31 Dec 2020
Holding classes,
no. of shares
No. of
share-
holders
Share of
capital,
%
1–1 000
1 001–100 000
100 001–
Total
44 143
3 882
79
48 104
4
10
86
100
Data per share (adjusted for the 2:1 share split in 2018)
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Diluted earnings per share, SEK1)
12.2
52.6
13.5
9.9
8.5
3.3
5.4
4.3
11.1
23.6
4.5
4.5
Dividend, SEK
Ordinary dividend, SEK
Extra dividend, SEK
Ordinary dividend in % of
Equity
Closing market price
Profit/loss for the year
Return, equity, %1) 3)
Return, capital employed, %1) 3)
Equity per share, SEK
Closing market price, B, SEK
Average listed price for year, B, SEK
Highest market price for year, B, SEK
Lowest market price for year, B, SEK
7.252)
3.52)
3
2
59
5
6
263
394
310
396
228
3.5
6.75
6.5
-
1
1
6
8
9
238
285
220
297
172
-
5
4
50
10
10
140
175
213
240
175
-
5
3
65
8
9
131
218
186
218
157
6
-
5
4
71
8
9
127
164
141
163
114
5.5
-
4
4
158
7
6
124
131
132
153
110
5
-
4
4
93
6
6
125
133
118
136
105
-
4
4
106
4
5
124
117
99
118
87
Total closing market capitalisation, '000 SEKm
64.7
46.6
29.5
36.6
27.4
22.3
22.3
19.7
P/E ratio4)
EV/EBITDA3) 5)
32
19
5
14
13
9
22
13
19
10
39
11
25
9
28
10
4
-
3
4
17
8
9
118
99
101
126
78
16.6
4
7
-
4
5
41
6
7
124
96
93
102
85
16.2
9
8
Closing beta value (48 months), B, at year-end6)
0.77
0.77
0.74
0.74
0.72
0.68
0.71
0.67
0.67
0.67
Number of shareholders at year-end
48 104 38 904 33 573 30 903 28 159 28 176 27 788 27 692 28 440 28 899
1) See page 94: Definitions & glossary. 2) Board proposal. 3) Excl. items affecting comparability. 4) Closing market price divided by diluted earnings per share.
5) Market capitalisation plus net financial debt at year-end (EV) divided by EBITDA. 6) Measures the sensitivity of the yield on class B shares in relation to the yield on the
OMX 30 Stockholm over a period of 48 months.
Holmen Annual Report 2020
47
Shareholder information
Financial
statements
Income statement, SEKm
Note
2020
Net sales
Other operating income
Change in inventories
Raw materials and consumables
Personnel costs
Other operating costs
Change in value of biological assets
Depreciation/amortisation according to plan
Impairment losses
Profit/loss from investments in associates and joint ventures
Operating profit
Financial income
Financial costs
Earnings before tax
Tax
Profit/loss for the year
Attributable to:
Owners of the parent company
Earnings per share (SEK)
basic
diluted
Average number of shares (million)
basic
diluted
2
3
4
5
9
10, 11, 12
13
13
6
6
7
8
8
Operating profit for 2020 amounted to SEK 2 479 million (2019: 11 115). Lower
production costs in Paperboard and higher wood product prices had a positive
impact on earnings, though this effect was offset by price decreases and
production curtailments in Paper. In 2019, the operating profit for the year
included SEK 8 770 million in items affecting comparability. Operating profit
excluding items affecting comparability in 2019 totalled SEK 2 345 million.
Net financial items totalled SEK -42 million (-34). Net debt totalled
SEK 4 181 million (3 784) at year-end.
Tax recognised totalled SEK -458 million (-2 351), corresponding to
19 per cent (21) of profit before tax.
Statement of comprehensive income, SEKm
Note
2020
16 327
1 339
-88
-8 781
-2 411
-3 310
579
-1 172
-
-6
2 479
11
-53
2 437
-458
1 979
1 979
8 731
12.2
12.2
161.9
161.9
52.6
52.6
166.1
166.1
2019
16 959
1 370
-220
-9 398
-2 316
-3 597
9 566
-1 141
-109
0
11 115
13
-47
11 081
-2 351
8 731
2019
8 731
13 055
14
-2 687
10 382
-277
247
-7
141
-2
-6
8
105
10 487
19 218
2 968
19 218
9
18
7
13
7
1 979
1 173
-15
-239
920
380
-105
-2
-187
29
16
-61
69
989
2 968
Profit/loss for the year
Other comprehensive income
Revaluation of forest land
Revaluations of defined benefit pension plans
Tax attributable to items that will not be reclassified to profit/loss for the year
Total items that will not be reclassified to profit/loss for the year
Cash flow hedges
Revaluation
Transferred from equity to the income statement
Transferred from equity to non-current assets
Translation difference on foreign operations
Hedging of currency risk in foreign operations
Share in joint ventures’ other comprehensive income
Tax attributable to items that will be reclassified to profit/loss for the year
Total items that will be reclassified to profit/loss for the year
Total other comprehensive income after tax
Total comprehensive income
Attributable to:
Owners of the parent company
48
Holmen Annual Report 2020
GroupFinancial statements Balance sheet at 31 December, SEKm
Note
2020
2019
Non-current assets
Forest assets
Biological assets
Forest land
Non-current intangible assets
Property, plant and equipment
Right-of-use assets
Investments in associates and joint ventures
Other shares and participations
Non-current financial receivables
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade receivables
Current tax receivable
Other operating receivables
Current financial receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Other contributed capital
Reserves
Retained earnings incl. profit/loss for the year
Total equity attributable to owners of the parent company
Non-current liabilities
Non-current financial liabilities
Non-current liabilities relating to right-of-use assets
Pension provisions
Other provisions
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Current financial liabilities
Current liabilities relating to right-of-use assets
Trade payables
Current tax liability
Provisions
Other operating liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
9
9
10
11
12
13
13
14
7
15
16
8
16
14
14
14
18
19
7
14
20
7
19
20
28 663
14 538
555
9 226
284
1 717
2
290
1
55 276
3 594
2 015
6
1 262
43
346
7 267
27 979
13 366
70
8 906
183
1 620
1
452
1
52 579
3 460
2 005
0
799
14
483
6 761
62 543
59 340
4 238
281
11 541
26 457
42 516
3 919
175
48
491
10 570
15 203
605
112
2 496
211
163
1 235
4 824
20 026
62 543
4 238
281
10 540
25 052
40 111
2 018
171
46
637
10 299
13 171
2 485
13
2 259
112
158
1 030
6 058
19 229
59 340
Holmen Annual Report 2020
49
GroupFinancial statements Changes in equity, SEKm
Opening equity balance 1 Jan 2019
Profit/loss for the year
Other comprehensive income
Revaluation of forest land
Revaluation of defined benefit pension plans
Cash flow hedges
Translation difference on foreign operations
Hedging of currency risk in foreign operations
Share in joint ventures’ other comprehensive income
Tax attributable to other comprehensive income
Total other comprehensive income
Total comprehensive income
Dividend paid
Buy-backs of treasury shares
Share savings programme
Closing equity balance 31 Dec 2019
Profit/loss for the year
Other comprehensive income
Revaluation of forest land
Revaluation of defined benefit pension plans
Cash flow hedges
Translation difference on foreign operations
Hedging of currency risk in foreign operations
Share in joint ventures’ other comprehensive income
Tax attributable to other comprehensive income
Total other comprehensive income
Total comprehensive income
Dividend paid
Cancellation of treasury shares
Bonus issue
Share savings programme
Closing equity balance 31 Dec 2020
Share
capital
4 238
-
Other
contributed
capital
281
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4 238
-
281
-
-
-
-
-
-
-
-
-
-
-
-175
175
-
4 238
-
-
-
-
-
-
-
-
-
-
-
-
-
281
Reserves
Translation
reserve
Hedge
reserve
Revaluation
surplus
Retained earnings
incl. profit/loss
for the year
Total
equity
-48
-
-
-
-
141
-2
-
0
140
140
-
-
-
92
-
-
-
-
-187
29
-
-6
-165
-165
-
-
-
-
-73
118
-
-
-
-37
-
-
-6
8
-35
-35
-
-
-
83
-
-
-
273
-
-
16
-55
234
234
-
-
-
-
316
-
-
13 055
-
-
-
-
-
-2 689
10 366
10 366
-
-
-
10 366
-
1 173
-
-
-
-
-
-242
932
932
-
-
-
-
18 865
8 731
23 453
8 731
-
14
-
-
-
-
2
17
8 747
-1 134
-1 430
4
25 052
1 979
-
-15
-
-
-
-
3
-12
1 967
-567
175
-175
2
13 055
14
-37
141
-2
-6
-2 679
10 487
19 218
-1 134
-1 430
4
40 111
1 979
1 173
-15
273
-187
29
16
-300
989
2 968
-567
-
-
2
11 297
26 457
42 516
50
Holmen Annual Report 2020
GroupFinancial statements Cash flow statement, SEKm
Operating activities
Earnings before tax
Adjustments for non-cash items
Depreciation/amortisation according to plan
Impairment losses
Change in value of biological assets
Change in provisions
Other*
Income tax paid
Cash flow from operating activities before changes in working capital
Cash flow from changes in working capital
Change in inventories
Change in trade receivables and other operating receivables
Change in trade payables and other operating liabilities
Cash flow from operating activities
Investing activities
Acquisition of property, plant and equipment
Disposal of property, plant and equipment
Acquisition of non-current intangible assets
Investments in and acquisition of biological assets
Disposal of biological assets
Acquisition of shares and participations
Repayment of non-current financial receivables
Cash flow from investing activities
Financing activities
Raised long-term borrowings
Repayments of long-term borrowings**
Change in current financial liabilities
Change in current financial receivables
Buy-backs of treasury shares
Dividend paid to owners of the parent company
Cash flow from financing activities
Cash flow for the year
Cash and cash equivalents at beginning of year
Exchange difference on cash and cash equivalents
Cash and cash equivalents at end of year
Note
2020
2019
25
2 437
11 081
1 172
-
-579
-95
46
-569
2 411
195
-44
-105
2 457
-1 032
12
-7
-128
69
-839
141
-1 783
1 900
-
-2 144
3
-
-567
-808
-133
483
-4
346
1 141
109
-9 566
86
22
-147
2 727
210
-135
83
2 884
-1 024
21
-14
-9
0
-25
36
-1 015
1 000
-500
385
13
-1 430
-1 134
-1 665
204
278
1
483
25
*Otheradjustmentsprimarilyconsistofforeignexchangeeffectsandthemarkingtomarketoffinancialinstruments,profitfromassociates,aswellasgains/losseson
sale of non-current assets.
**Referstorepaymentsofloansthatwerelong-termloanswhenraised.
Change in net financial debt, SEKm
Opening net financial debt
New IFRS 16 Leases accounting policy
Business combination
Cash flow
Operating activities
Investing activities (excl. non-current financial receivables)
Share buy-backs
Dividend paid
Liabilities arising from new right-of-use agreements
Revaluations of defined benefit pension plans
Foreign exchange effects and changes in fair value
Closing net financial debt
2020
-3 784
-
-187
2 457
-1 924
-
-567
-163
-15
1
-4 181
2019
-2 807
-205
-
2 884
-1 050
-1 430
-1 134
-76
12
21
-3 784
Holmen Annual Report 2020
51
GroupFinancial statements Income statement, SEKm Note 2020
2019
Cash flow statement, SEKm Note 2020
2019
Net sales
Other operating income
Change in inventories
Raw materials and consumables
Personnel costs
Other external costs
Depreciation/amortisation
according to plan
Operating profit
Profit/loss from investments in Group
companies
Profit/loss from investments in
associates
Interest income and similar income
Interest expense and similar costs
Profit/loss after financial items
Appropriations
Earnings before tax
Tax
Profit/loss for the year
2
3
4
5
10, 11
6, 23
6, 13
6
6
24
7
14 187
690
-119
-7 285
-1 942
-5 150
15 004
706
-114
-7 834
-1 887
-5 449
-48
332
199
-
24
-23
531
1 804
2 336
-417
1 919
-44
382
231
-185
30
-53
404
1 936
2 340
-493
1 847
Statement of comprehensive
income, SEKm
Profit/loss for the year
Other comprehensive income
Cash flow hedges
Revaluation
Transferred from equity to the
income statement
Transferred from equity to
non-current assets
Tax attributable to other
comprehensive income
Total items that will be reclassified
to profit/loss for the year
Note 2020
2019
1 919
1 847
372
-97
-2
-55
218
-291
264
-7
7
-27
7
Total comprehensive income
2 137
1 820
The parent company includes Holmen’s Swedish operations, with the exception
of the majority of the non-current assets and the operation that was taken over
on 1 October 2020 in conjunction with the acquisition of Martinsons, which are
recognised in other companies in the Group.
Profit after net financial items includes the result from hedging equity in foreign
subsidiaries of SEK 29 million (-2).
Operating activities
Profit/loss after financial items
Adjustments for non-cash items
Depreciation/amortisation according
to plan
Impairment losses
Change in provisions
Other*
Income tax paid
Cash flow from operating activities
before changes in working capital
Cash flow from changes in working
capital
Change in inventories
Change in operating receivables
Change in operating liabilities
Cash flow from operating activities
Investing activities
Acquisition of property, plant and
equipment
Disposal of property, plant and equipment
Repayment of non-current financial
receivables
Acquisition of shares and participations
Disposal of shares and participations
Cash flow from investing activities
Financing activities
Raised long-term borrowings
Repayments of external long-term
borrowings**
Change in other financial liabilities
Change in other financial receivables
Dividend paid to owners of the parent
company
Buy-backs of treasury shares
Group contributions received
Group contributions paid
Cash flow from financing activities
Cash flow for the year
Cash and cash equivalents at beginning
of year
Cash and cash equivalents at end of year
25
531
404
48
95
-50
22
-440
44
-
87
-6
-74
206
455
187
96
-171
319
-72
6
141
-918
-
-842
56
-129
134
516
-73
8
36
-210
109
-135
1 900
1 000
-
-1 941
-1 549
-567
-
2 513
-1
355
-168
403
236
-500
475
-1 190
-1 134
-1 430
2 572
-2
-208
173
230
403
* Other adjustments primarily consist of currency effect and the marking to market
offinancialinstrumentsandgains/lossesonthesaleofnon-currentassets.
**Referstorepaymentsofloansthatwerelong-termloanswhenraised.
52
Holmen Annual Report 2020
Parent companyFinancial statements Balance sheet at
31 December, SEKm
Non-current assets
Non-current intangible assets
Property, plant and equipment
Non-current financial assets
Shares and participations
Non-current financial receivables
Total non-current assets
Current assets
Inventories
Operating receivables
Current tax receivable
Current investments
Cash and cash equivalents
Total current assets
Total assets
Changes in equity, SEKm
Opening equity balance 1 Jan 2019
Appropriation of profits
Profit/loss for the year
Other comprehensive income
Cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Total comprehensive income
Dividend paid
Buy-backs of treasury shares
Share savings programme
Note 2020
2019
Balance sheet at
31 December, SEKm
Note 2020
2019
10
11
13, 23
14
17
3 038
24
3 008
11 597
3 467
18 119
10 774
2 397
16 203
15
16
7
14
14
2 659
2 442
-
43
236
5 379
2 867
2 364
-
14
403
5 648
23 498
21 852
Equity
Restricted equity
Share capital
Statutory reserve
Revaluation reserve
Non-restricted equity
Retained earnings incl. hedge reserve
Profit/loss for the year
Total equity
Untaxed reserves
Provisions
Pension provisions
Other provisions
Deferred tax liabilities
Total provisions
Liabilities
Non-current financial liabilities
Current financial liabilities
Current tax liabilities
Operating liabilities
Total liabilities
17
24
18
19
7
14
14
7
20
4 238
1 577
100
4 394
1 919
4 238
1 577
100
2 894
1 847
12 228
10 656
2 354
1 646
4
744
657
0
839
614
1 405
1 454
4 083
514
145
2 769
7 511
2 480
2 493
105
3 018
8 096
Total equity and liabilities
23 498
21 852
Restricted equity
Non-restricted equity
Statutory
reserve
Revaluation
reserve
Hedge
reserve
Retained
earnings
Profit/loss
for the year
1 577
100
162
4 805
Share
capital
4 238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Closing equity balance 31 Dec 2019
4 238
1 577
100
Appropriation of profits
Profit/loss for the year
Other comprehensive income
Cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Total comprehensive income
Dividend paid
Cancellation of treasury shares
Bonus issue
Share savings programme
Closing equity balance 31 Dec 2020
-
-
-
-
-
-
-
-175
175
-
4 238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 577
100
Total
equity
11 395
-
1 847
-34
7
-27
1 820
-1 134
-1 430
4
10 656
-
1 919
272
-55
218
2 137
-567
-
-
2
514
-514
1 847
-
-
-
1 333
-
-
-
1 847
-1 847
1 919
-
-
-
72
-
-
-
-
-
-
-34
7
-27
-27
-
-
-
135
-
-
272
-55
218
218
-
-
-
-
353
514
-
-
-
-
514
-1 134
-1 430
4
2 759
1 847
-
-
-
-
1 847
-567
175
-175
2
4 042
1 919
12 228
Holmen Annual Report 2020
53
GroupFinancial statementsParent company Notes to the
fiNaNcial statemeNts
Amounts in SEKm, unless otherwise stated
1. Accounting policies
2. Operating segment reporting
3. Other operating income
4.
Employees, personnel costs and remuneration to senior
management
5. Auditors’ fee and remuneration
6. Net financial items and income from financial instruments
7. Tax
8. Earnings per share
9. Forest assets
10. Non-current intangible assets
11. Property, plant and equipment
12. Right-of-use assets (leases)
13. Investments in associates, joint ventures and other shares and
participations
Note 1. Accounting policies
54
14. Financial instruments
59
15. Inventories
60
16. Operating receivables
17. Equity, parent company
61
62
62
63
64
65
66
66
67
68
18. Pension provisions
19. Other provisions
20. Operating liabilities
21. Collateral and contingent liabilities
22. Related parties
23. Investments in Group companies
24. Untaxed reserves
25. Cash flow statement
26. Business combinations
27. Critical accounting estimates and judgements
69
72
72
72
73
74
74
74
75
76
77
77
78
78
The accounting policies for the Group presented below have been applied con-
sis tently to all periods included in the Group’s financial statements except where
otherwise stated below. The Group’s accounting policies have been applied
consistently to the reporting and the consolidation of the parent company,
subsidiaries, associates and joint ventures.
Compliance with standards and statutory requirements
The consolidated accounts are prepared in accordance with International Financial
Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB), as adopted by the EU. The Swedish Financial Reporting Board’s
recommendation (RFR 1 Supplementary Accounting Rules for Groups) has also
been applied.
The parent company applies the same accounting policies as the Group except
in the cases that are commented on separately under each section. The parent
company’s accounts are prepared in accordance with RFR 2 Accounting for Legal
Entities. The differences between the policies applied by the parent company and
those applied by the Group are due to restrictions in the parent company’s ability
to apply IFRS as a consequence of the Swedish Annual Accounts Act, the Swedish
Pension Obligations Vesting Act, and in some cases for tax reasons.
A decision has been taken within the EU to allow Member States to defer reporting
under the ESEF for one year. An amendment to the law is proposed to enter into
force on 15 March 2021 with application from 1 January 2021, stating that the
first reporting according to ESEF will take place beginning with the annual report
for 2021. Consequently, Holmen AB will not prepare an annual report for 2020 in
accordance with ESEF.
Valuation principles applied in preparing the financial
statements of the parent company and the Group
Assets and liabilities are stated at cost, except for biological assets and forest land,
as well as certain financial assets and liabilities, which are valued at fair value.
In the parent company, biological assets and forest land are not valued at fair value.
Investments in Group companies and associates are recognised in the parent
company at the lower of cost and fair value.
Functional currency and reporting currency
The functional currency is the currency used in the primary financial environments
in which the companies conduct their business. The parent company’s functional
currency is the Swedish krona (SEK), which is also the reporting currency of the
parent company and the Group. This means that the financial statements are
presented in Swedish kronor.
Estimates and judgements in the financial statements
Preparing the financial statements in accordance with IFRSs requires the company’s
management to make estimates and judgements, as well as to make assumptions
that affect the application of the accounting policies and the recognised amounts
for assets, liabilities, income and costs. The actual outcome may deviate from
these assessments and estimates.
These estimates and judgements are reviewed regularly. Changes in estimates are
recognised in the accounts for the period in which the change is made if the change
only affects that period, or in the period the change is made and in later periods if
the change affects current and future periods. See also Note 27 ‘Critical accounting
estimates and judgements’.
Changes in accounting policies
New and amended accounting policies applicable as of 2020
New and amended IFRSs with application from 2020 do not have any material
impact on the company’s financial statements.
Amendments to IFRS 9 and IFRS 7 were adopted on 15 January 2020 as a result
of the Interest Rate Benchmark Reform. The amendments provide temporary
exceptions from the application of specific requirements for hedge accounting for
hedging relationships that are directly impacted by this reform. The exceptions
apply to hedge accounting so that companies should not have to discontinue
hedging relationships due to uncertainty concerning the reform. The amendments
are to be applied as of 1 January 2020. For such currencies where the reference
rate reform is underway, continued hedge accounting will apply while the reform
is in progress. Nevertheless, these hedges are expected to be effective in the
future. Consequently, the reform is not expected to have any material impact on the
Group’s financial statements. See also Note 14.
New and amended accounting policies not yet applied
New and amended IFRSs to be applied in the future are not expected to have any
material impact on the company’s financial statements.
Segment reporting
The Group’s operations are divided into operating segments, based on which parts
of the operations are monitored by the company’s highest executive decision-
maker, known as the management approach. The segmentation criterion is based
on the Group’s business areas. This corresponds to the Group’s operating structure
and the internal reporting to the CEO and the Board. The items in the profit, assets
and liabilities of the operating segment are recognised in accordance with the
profit (operating profit), assets and liabilities that are monitored by the company’s
54
Holmen Annual Report 2020
Note 1Notes highest executive decision-maker. See Note 2 for more details of the classification
and presentation of operating segments.
Classification
Essentially, non-current assets, non-current liabilities and provisions consist solely
of amounts that are expected to be recovered or paid more than 12 months after
the balance sheet date. Current assets, current liabilities and provisions essentially
consist of amounts that are expected to be recovered or paid within 12 months of
the balance sheet date.
Consolidation principles
Subsidiaries
A subsidiary is a company over which the parent company, Holmen AB, exercises
a controlling influence. Controlling influence exists if Holmen AB has control over
an investment object, is exposed or entitled to variable returns on its involvement
and can exercise its control of the investment to influence the size of return. In
determining whether one company has control over another, potential shares with
an entitlement to vote and whether de facto control exists are taken into account.
The consolidated accounts are prepared using the acquisition method. The acquisi-
tion method entails the parent company indirectly acquiring the subsidiary’s assets
and assuming the liabilities of the subsidiary, valued at fair value. The difference
between the cost of the shares and the fair value of the acquired identifiable net
assets is treated as goodwill. The subsidiary companies’ income and expenses, and
their assets and liabilities, are stated in the consolidated accounts as of the date
when the Group gains control (acquisition date) until such time as the Group no
longer has control. Intra-Group receivables and liabilities, transactions between
companies in the Group and related unrealised gains are eliminated in their entirety.
Holdings recognised in accordance with the equity method
Associates. Shareholdings in associates, in which the Group controls a minimum
of 20 per cent and a maximum of 50 per cent of the votes, or otherwise exercises
a significant influence, are stated in the consolidated accounts in accordance with
the equity method.
Jointly owned companies/joint ventures. In accounting, joint ventures are those
companies for which the Group, through cooperation agreements with one or more
parties, has joint control whereby the Group has rights to the net assets instead of
direct rights to assets and commitments in liabilities. Holdings in joint ventures are
consolidated in the consolidated accounts using the equity method.
The equity method. The equity method means that the book value of the shares in
the associates and joint ventures stated in the consolidated accounts corresponds
to the Group’s interest in the associates and joint ventures’ equity and any con-
soli dated surplus and deficit values. The Group’s share of the net earnings of
associates and joint ventures after tax attributable to parent company owners
adjusted for any depreciation/amortisation or reversal of acquired surplus and
deficit values, respectively, is stated in the consolidated income statement as
‘Share of profits of associates and joint ventures’. Dividends received from an
associate or joint venture reduce the book value of the investment. Unrealised
gains arising as a consequence of transactions with associates and joint ventures
are eliminated in relation to the owned proportion of equity.
When the Group’s share of the recognised losses of an associate and joint venture
exceeds the book value of the investments stated in the consolidated accounts,
the value of the investments is written down to zero. Losses are also offset against
unsecured long-term financial balances that, in financial terms, comprise part
of the owning company’s net investment in the associate and joint venture. Any
further losses are not recognised unless the Group has provided guarantees
to cover losses incurred by the associate or joint venture. The equity method is
applied until such time as the significant influence no longer exists or the jointly
owned company ceases to be jointly owned.
Foreign currency
Transactions denominated in foreign currencies
Transactions in foreign currencies are translated into the functional currency
at the exchange rates prevailing on the transaction dates. Monetary assets and
liabilities in foreign currencies are translated into the functional currency at the
exchange rate prevailing on the balance sheet date. Exchange differences arising
on such translations are stated in the income statement. Non-monetary assets
and liabilities that are stated at historical cost are translated at the exchange rate
prevailing on the transaction date.
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and other con-
solidated surplus and deficit values, are translated in the consolidated accounts,
from the foreign operation’s functional currency, to the Group’s reporting currency
(Swedish kronor) at the balance sheet date rate. The income and expenses of
foreign operations are translated into Swedish kronor at an average rate that is an
approximation of the exchange rates prevailing at the date of each transaction.
Translation differences arising during currency translation of foreign operations
and the related effects of hedging net investments are recognised in other compre-
hensive income and are accumulated in a separate component of equity called the
translation reserve. In the disposal of a foreign operation, the accumulated trans-
lation differences attributable to the business are realised, less any currency hedg-
ing, in the consolidated income statement.
Companies operating on behalf of the parent company
The parent company’s business is largely conducted through companies operating
on its behalf: Holmen Skog AB, Iggesund Paperboard AB, Holmen Paper AB,
Holmen Timber AB and Holmen Energi AB.
The parent company is liable for all commitments entered into by these companies.
All income, expenses, assets and liabilities, which arise in the operations conducted
by the companies, are recognised in Holmen AB’s accounts, except for the majority
of investments made as well as some sales of forest assets, which are instead
recognised in some of the Group’s subsidiaries.
Income
The Group’s sales mostly relate to goods sold to customers, which is specified in
the tables in Note 2. The services provided are limited and essentially relate to
silviculture services and services in the construction industry such as installation
work. Holmen acts almost exclusively as principal and the sales transactions are
based on agreements. For Holmen, the vast majority of contracts are separate
undertakings and comprise one undertaking per contract. Holmen’s guarantees
in connection with sales should not be regarded as separable and are therefore
recognised in accordance with IAS 37.
The transaction price is the price of the goods or service. Variable consideration
mainly occurs in the form of rights of return, or volume or cash discounts. All
returns relating to defective goods are recognised as they arise. Volume discounts
give customers a discounted price provided that a certain amount of goods are
purchased over a period. A cash discount entitles customers to a lower price if
payment is made by a certain date. Discounts are recognised as a reduction in net
sales.
The income item is recognised when Holmen fulfils its commitment by transferring
control of the pledged goods and, where applicable, services to the customer. The
date of transfer of control, and the transfer of risk, is critical to when an income item
is recognised. The transfer of risk differs depending on the shipping terms applied.
The sale of energy differs from other sales as supply takes place in conjunction with
generation, when it is also recognised as revenue.
Through the acquisition of Martinsons on 1 October 2020, the Group’s operations
also include wood construction solutions. Income from this activity is treated as a
commercial construction contract and reported over time, based on hours worked
in relation to the total estimated working hours of the project. Projects usually
do not extend beyond twelve months. Accrued income related to commercial
construction contracts is initially recognised as contract assets, since the right to
payment is conditional upon customer approval. When the customer has accepted
the goods, the amount of the contract asset is recognised as a receivable instead.
Advances received are included in the contract liability.
Payment terms vary from market to market and Holmen usually follows applicable
practice on the respective market.
Other operating income
Income from activities not forming part of the company’s main business is stated
as other operating income. This item mainly comprises sales of by-products,
renewable energy certificates, rent and land lease income, emission allowances,
insurance compensation and gains/losses on sales of non-current assets.
Renewable energy certificates
Certificates are issued in relation to production of renewable energy according
to a quota system introduced in order to promote electricity generation using
renewable sources of energy. Income from allocated certificates is recognised as
other operating income in the same period in which generation occurs.
State grants
State grants are recognised in the balance sheet as accrued income when it is
reasonably certain that the grant will be received and that the Group will satisfy
the conditions associated with the grant. State grants linked to a non-current asset
reduce the asset’s recognised cost. State grants, such as road grants, intended
to cover costs are recognised as other operating income. Grants are distributed
systematically in the income statement in the same way and over the same periods
as the costs the grants are intended to cover.
Holmen Annual Report 2020
55
Note 1Notes Financial income and costs
Financial income and costs consist of interest income and interest expense,
dividend income and revaluations of financial instruments valued at fair value,
as well as unrealised and realised currency gains and losses.
Interest income on receivables and interest expense on liabilities are calculated by
using the effective interest method. Interest expense includes transaction costs for
loans, which have been distributed over the duration of the loan; this also applies
to any difference between the funds received and the repayment amount. Dividend
income is recognised when the dividend is established and the right to receive
payment is judged to be certain.
Interest expense usually impacts earnings for the period to which it is attributable.
Borrowing costs attributable to the purchase, construction or production of qualify-
ing assets are capitalised in the consolidated accounts as part of the asset’s cost.
A qualifying asset is an asset that takes a substantial period of time to get ready
for its intended use and that is relevant for the Group in connection with major
investment projects.
Taxes
Income taxes comprise current tax and deferred tax. Income taxes are recognised
in the income statement except when underlying transactions are recognised in
other comprehensive income or directly in equity, in which case the associated
tax effect is also recognised in other comprehensive income or directly in equity.
Current tax is the tax to be paid or received for the year in question, using the tax
rates that have been decided on, or to all intents and purposes have been decided
on at the balance sheet date. This also includes any adjustment to current tax
attributable to previous periods. Deferred tax is calculated using the balance sheet
method on the basis of temporary differences between book values and values
for tax purposes of assets and liabilities, applying the tax rates and rules that have
been approved or announced at the balance sheet date. In the parent company’s
accounts, untaxed reserves are recognised inclusive of deferred tax liability.
Deferred tax assets in respect of tax-deductible temporary differences and loss
carry-forwards are recognised only to the extent that it is likely they will be utilised
and entail lower tax payments in the future. Deferred tax assets and deferred tax
liabilities in the same country are recognised net to the extent that a right of set-off
applies.
Earnings per share
The calculation of earnings per share (EPS) is based on the Group’s profit/loss for
the year attributable to the parent company’s owners and the weighted average
number of shares outstanding during the year. In calculating diluted EPS, the
earnings and the average number of shares are adjusted to take account of the
effects of any potential ordinary shares having a diluting effect.
Financial instruments
Financial instruments are measured and recognised according to IAS 9.
Recognition in and derecognition from the balance sheet
A financial asset or liability is stated in the balance sheet when the company
becomes a party in accordance with the contractual conditions of the instrument.
A financial asset is removed from the balance sheet when the rights referred to
in the contract have been realised or mature, or when the company no longer
has control over them. A financial liability is removed from the balance sheet
when the undertaking in the contract is performed or expires in some other way.
Spot transactions are stated in accordance with the trade date principle. Trade
receivables are recognised in the balance sheet when an invoice has been sent.
Liabilities are recognised when the counterparty has provided a product or service
and there is a contractual obligation to pay, even if an invoice has not yet been
received. A financial asset and a financial liability are only offset and recognised
at a net amount where a legal right to offset the amounts exists and there is an
intention to settle the items at a net amount or simultaneously realise the asset
and settle the liability. Financial assets, excluding shares, and financial liabilities
have been classified as current if the amounts are expected to be recovered or paid
within 12 months of the balance sheet date. Shares have been classified as non-
current if they are intended to be held in the operation permanently.
Classification and measurement of financial instruments
Financial instruments are classified and measured based on the company’s
business model and the nature of contractual cash flows. See Note 14 for the
company’s classifications of financial instruments.
Financial assets - are measured initially at fair value less any transaction costs.
Normally, the assets are measured on a current basis at amortised cost using
the effective interest method since the assets are held with the objective of
collecting the contractual cash flows, which consist of principal and interest on
the outstanding principal. In those cases where funds issued fall short of the
repayment amount, the difference is allocated over the duration of the loan using
the effective interest method. Derivatives are recognised on an ongoing basis at
56
Holmen Annual Report 2020
fair value. Changes in the value of derivatives that are not hedged are recognised
in profit/loss.
Financial liabilities - are measured initially at the value of funds received after
deduction of any transaction costs. Normally, the liabilities are measured on a
current basis at amortised cost using the effective interest method. In those
cases where funds received fall short of the repayment amount, the difference
is allocated over the duration of the loan using the effective interest method.
Derivatives are recognised on an ongoing basis at fair value. Changes in the value
of derivatives that are not hedged are recognised in profit/loss.
Impairment of financial assets - For financial assets for which there is an indication
that the entire book value cannot be recovered, an individual assessment of the
respective instrument is made. Missed payments from counterparties usually
constitute such an indication. Any impairment is recognised based on an individual
estimate. For financial instruments for which there are no indications of low credit
quality, a provision is made for credit losses based on historical outcomes.
Hedge accounting - All derivatives, such as forward foreign exchange contracts,
electricity derivatives and interest rate swaps, are measured at fair value and
recognised in the balance sheet. Essentially all derivatives are held for hedging
purposes. The effective portion of changes in value from cash flow hedges is
recognised in other comprehensive income and accumulated in equity until such
time as the hedged item influences the income statement, when the accumulated
changes in value are transferred from equity via other comprehensive income to
the income statement to meet and match the hedged transaction. In the hedging
of investments, the cost of the hedged item is instead adjusted when it occurs.
The ineffective portion of hedges is recognised directly in the income statement.
Interest rate swaps are used as a cash flow hedge for interest rates. Changes
in the value of hedges relating to net investments in foreign businesses are
recognised in other comprehensive income for the Group. Accumulated changes
in value are recognised as a component in the Group’s equity until the business is
disposed of, at which point the accumulated changes in value are recognised in
the income statement. In the parent company, changes in value are recognised
in the income statement, as hedge accounting is not applied. Holmen’s cash
flow hedges mainly relate to the hedging of sales in foreign currency, future
interest payments, the purchase of electricity and purchases in foreign currency
in conjunction with investments. Hedging instruments comprise forward foreign
exchange contracts, forward electricity contracts and interest rate swaps. The
hedged items comprise forecasts of future sales, interest payments, electricity
purchases and capital expenditures. The hedge ratio is set on an ongoing basis by
comparing hedged amounts with actual forecasts. For hedging of net investments
in foreign operations, the book value of the net investment is a hedged item and
the hedge ratio is set by comparing the hedged amounts with the net investment.
Any inefficiency is based on an estimate of the hedge ratio. The Group’s risk
management of financial instruments is described on pages 44–45.
Forest assets
The Group’s forest assets are recognised at fair value based on the transaction
prices for forest properties in those areas where the Group has forest land. Fair
value measurement is based on measurement level 3. The total value of the forest
assets is allocated across growing trees, which are recognised as a biological
asset, and forest land. How much of the value is allocated to the biological assets
is established by calculating the present value of expected cash flows, less selling
costs but before tax, from harvesting those trees currently growing. Calculation
of present value uses a discount rate before tax calculated on the basis of forest
property transactions. The value of the forest land is calculated as the difference
between the total value of the forest assets and the biological assets. Changes
in the fair value of biological assets are recognised in profit/loss. Changes in
the fair value of forest land are recognised in other comprehensive income and
accumulated in a separate component of equity called the revaluation surplus.
If the fair value of forest land were to be less than cost, the difference would be
recognised in profit/loss as an impairment loss.
Recognition in the parent company
In the parent company, forest assets are recognised in accordance with RFR 2.
This means that they are classified as non-current assets and recognised at cost
adjusted for revaluations taking into account the need, if any, for impairment
in value.
Non-current intangible assets
Non-current intangible assets such as the value of acquired wood supply business,
patents, licences and IT systems are recognised at cost after deduction of
accumulated amortisation and any impairment losses. The Group’s non-current
intangible assets are amortised over periods of between 5 and 20 years, except
for goodwill. Both goodwill and other non-current intangible assets are tested for
impairment annually. Any impairment losses may be reversed via exceptions from
goodwill. Non-current intangible assets in the parent company are amortised over
five years.
Note 1Notes Goodwill represents the difference between the cost of business combinations and
the fair value of the acquired assets, assumed liabilities and contingent liabilities.
Goodwill is allocated to cash-generating units that are expected to benefit from
the effects of the acquisition. Goodwill is valued at cost less any accumulated
impairment losses. Goodwill arising in connection with the acquisition of associates
is included in the book value of the participating interest in such companies.
Research costs are expensed when they are incurred. Development costs are
only capitalised in the case of major projects to the extent that their future
financial benefits can be reliably assessed. The recognised value includes all
directly attribu table expenses, for example in connection with materials and
services, employee benefits, registration of a legal right, amortisation of patents
and licences and borrowing costs in accordance with IAS 23. Other development
expenditure is recognised in the income statement as costs when incurred.
Development expenditures recognised in the balance sheet are stated at cost
less accumulated amortisation and impairment losses.
Property, plant and equipment
Property, plant and equipment are stated at cost after deduction of accumulated
depreciation and any impairment losses. Property, plant and equipment that
consist of parts with different useful lives are treated as separate components
of property, plant and equipment. Additional expenditure is capitalised only if
it is estimated to generate financial benefits for the company. The key factor
determining whether or not additional expenditure is capitalised is if it relates
to the replacement of identified components or parts thereof, in which case the
expenditure is capitalised. The cost is also capitalised in cases where a new
component is created. Any undepreciated book values for replaced components or
parts of components are retired and expensed in connection with the replacement.
The book value of an item of property, plant or equipment is removed from the
balance sheet in connection with retirement or disposal of the asset or when no
future financial benefits can be expected from the use of the asset. The gain or loss
arising on the retirement or disposal of an asset consists of the difference between
any selling price and the book value of the asset, less any direct selling costs. Gains
and losses are recognised in the accounts as other operating income/costs.
An asset is classified as being held for sale if it is available for immediate sale in its
present condition and based on normal terms, and it is highly likely that a sale will
take place. Such assets are recognised on a separate line as a current asset in the
balance sheet. When an asset is classified as holdings for sale, it is recognised at
the lower of book value and fair value, less selling costs.
Depreciation according to plan is based on original acquisition cost less any
impairment losses. Depreciation takes place on a straight-line basis over the
estimated useful life of the asset. Land is not depreciated.
The following useful lives (years) are used:
Machinery for hydro power production
10–40
Administrative and warehouse buildings, residential properties
10–33
Production buildings, land installations, and machinery
for sawmills, pulp, paper and paperboard production
Other machinery
Forest roads
Equipment
10–20
10
20
4–10
If there is any indication that the book value is too high, an analysis is made in
which the recoverable amount of single or inherently related assets is determined
at the higher of the net realisable value and the value in use. The net realisable
value is the estimated selling price after deduction of the estimated cost of selling
the asset. The value in use is measured as expected future discounted cash flow.
The discount rate applied takes account of the risk-free rate and the risk associated
with the asset. An impairment loss consists of the amount by which the recoverable
amount falls short of the book value. An impairment loss is reversed if there has
been any positive change in the circumstances upon which the determination of
the recoverable amount is based. A reversal may be made up to, but not exceeding,
the book value that would have been recognised, less depreciation, if there had
been no impairment.
Borrowing costs attributable to the purchase or construction of qualifying assets
are to be capitalised in the consolidated accounts as part of the asset’s cost.
A qualifying asset is an asset that takes a substantial period of time to get ready
for its intended use and that is relevant for the Group in connection with major
investment projects.
Right-of-use assets (leases)
When entering an agreement an assessment is made as to whether the agreement
is, or contains, a lease. An agreement is, or contains, a lease if the agreement
transfers the right for a set period to control the use of an identified asset in
exchange for compensation. The Group recognises a right-of-use asset and
associated liability upon entering into a lease. Such liabilities are initially valued at
the present value of the remaining lease payments for the estimated lease period.
Lease payments are discounted at the Group’s marginal borrowing rate, which
in addition to the Group’s credit risk reflects the agreement’s lease period and
currency. Right-of-use assets are initially valued at the value of the liability plus
lease payments paid upon or before the start date, plus any initial direct payments.
Such right-of-use asset is depreciated/amortised on a straight-line basis over the
term of the lease.
The term of the lease comprises the non-cancellable period plus additional periods
in the agreement if it is deemed at the start date reasonably certain that these will
be used.
No right-of-use asset or lease liability is recognised for leases with a term of 12
months of less or with underlying assets of low value. Lease payments for such
leases are recognised as a cost on a straight-line basis over the term of the lease.
Parent company
The policies on leases, in accordance with IFRS 16, that are applied by the Group
are not applied by the parent company. The parent company applies an exception
option in RFR 2 with the result that the parent company recognises existing leases
as operating leases.
Inventories
Inventories are valued at the lower of cost and production cost after deduction
for necessary obsolescence, or net realisable value. The cost of inventories
is calculated by using the first in, first out method (FIFO). The net realisable
value is the estimated selling price in operating activities after deduction of the
estimated costs of completion and affecting the sale. The cost of finished products
manufactured by the company comprises direct production costs and a reasonable
share of indirect costs.
Purchased felling rights are stated as inventories. They have been acquired with
a view to securing Holmen’s raw material requirements through harvesting.
No measurable biological change occurs from the acquisition date.
Emission allowances received are initially recognised at market price when allotted
among inventories and as deferred income. During the year the allocation is recog-
nised as income at the same time as an interim liability, corresponding to emissions
made, is expensed. Unsold rights are measured at the lower of cost and fair value.
Certificates received for renewable energy are initially recognised at market price
when allotted among inventories. Unsold certificates are measured at the lower of
cost and fair value.
Employee benefits
Pension costs and pension obligations
Obligations to pay premiums to defined contribution plans are recognised as a cost
in the income statement as and when they are earned.
The Group’s net obligation regarding defined benefit plans is calculated separately
for each plan by estimating future benefits earned by employees through their
employment in both current and previous periods. This benefit is discounted to
present value and unrecognised costs relating to employment in previous periods
and the fair value of any plan assets are deducted. The discount rate is the interest
rate at the balance sheet date for a high-quality corporate bond with a duration
corresponding to the Group’s pension obligations. If there is no active market
for such corporate bonds, the market interest rate for government bonds with a
corresponding duration is used instead. The calculation is performed by a qualified
actuary using the projected unit credit method for the portion of the pension
obligations that is defined benefit.
Establishment of the obligation’s present value and the fair value of plan assets
may give rise to actuarial gains and losses. These arise either through the actual
outcome deviating from previously made assumptions or through changes in
assumptions. Actuarial gains and losses are recognised in other comprehensive
income.
If the benefits provided by a plan are improved, the proportion of the improvement in
the benefit that is attributable to the employees’ employment during earlier periods
is recognised as a cost in the income statement and is distributed on a straight-line
basis over the average period until the benefits have been fully earned. If the benefit
has been earned in full, a cost is recognised directly in the income statement. If any
changes occur to a defined benefit plan, these are recognised when the change to the
plan occurs. If the change occurs in conjunction with restructuring, this is recognised
when the company recognises the associated restructuring costs. The changes are
recognised directly in profit/loss for the year.
When the calculation leads to an asset for the Group being limited, the book value
of the asset is limited to the lower of the plan surplus and the asset limitation
calculated using the discount rate. The limitation of assets consists of the present
value of future economic benefits in the form of reduced future costs or cash
reimbursement. Any minimum funding requirements are taken into account in
calculating the present value of future reimbursements or receipts.
Holmen Annual Report 2020
57
Note 1Notes Holdings of shares bought back are stated as a reduction in retained earnings.
Acquisitions of treasury shares are stated as a deduction, and proceeds from
the disposal of treasury shares are stated as an increase. Transaction costs are
charged directly to retained earnings.
The parent company’s equity comprises share capital, statutory reserves,
revaluation reserves, retained earnings and profit/loss for the year. The parent
company’s statutory reserve consists of previous compulsory provisions to the
statutory reserve plus amounts added to the share premium reserve before
1 January 2006. The parent company’s revaluation reserve contains amounts set
aside in connection with the revaluation of property, plant and equipment or non-
current financial assets. Retained earnings comprise all other parts of equity, such
as hedge reserves and transactions as a result of share buy-backs. The parent
company applies the same accounting policies as the Group for these items, see
above.
Provisions
A provision is recognised in the balance sheet when the Group has a legal or
informal commitment as a consequence of a past event and it is likely there will be
an outflow of financial resources to settle the commitment and a reliable estimate
of the amount can be made. A provision to cover restructuring is recognised
once the Group has established a detailed and formal restructuring plan and the
restructuring process has either begun or been publicly announced.
Provisions are made for environmental measures that relate to earlier activities
when contamination arises or is discovered, it is likely that a payment obligation
will arise, and the amount can be estimated reliably.
Contingent liabilities
A contingent liability is recognised when there is a potential commitment that
originates from past events, the existence of which will be confirmed only by
one or more uncertain future events, or when there is a commitment that is not
recognised as a liability or provision because it is unlikely that an outflow of
resources will be required.
Group contributions and shareholder contributions
Group contributions are recognised in the parent company in accordance with
RFR 2’s alternative rule, i.e. Group contributions paid or received are recognised
as appropriations.
Shareholder contributions are recognised as an increase in the item ‘Investments in
Group companies’. In addition, a review is conducted as to whether an impairment
loss on the value of the shares is necessary. This review complies with standard rules
on the valuation of this asset item. Shareholder contributions received are recognised
directly in non-restricted equity.
Other
The figures presented are rounded off to the nearest whole number or equivalent.
The absence of a value is indicated by a dash (-).
The interest expense on defined benefit obligations is recognised in profit/loss
for the year under financial items. This is calculated as the net total of the upward
adjustment of interest on the pension obligation and expected income on plan
assets calculated according to the same interest factor (discount rate). Other
components are recognised in operating profit/loss. The revaluation effects consist
of actuarial gains and losses and the difference between the actual return on plan
assets and the amount included in net interest. Revaluation effects are recognised
in other comprehensive income.
Payroll tax constitutes part of the actuarial assumptions and is therefore recognised
as part of net obligations. Policyholder tax is recognised as it is incurred in profit/
loss for the period to which the tax relates and is consequently not included in the
calculation of liabilities. In the case of funded plans, this tax is levied on the return
on plan assets and is recognised in other comprehensive income. In the case of
unfunded plans or partially unfunded plans, this tax is levied on profit for the year.
In the parent company’s accounts, different grounds are used for computation of
defined benefit pension plans from those referred to in IAS 19. The parent company
complies with the provisions of the Swedish Pension Obligations Vesting Act and the
Swedish Financial Supervisory Authority’s regulations, because this is a condition
for the right to make deductions for tax purposes. The main differences in relation
to the rules in IAS 19 relate to how the discount rate of interest is established, the
calculation of the defined benefit obligation on the basis of the current pay level
without any assumption regarding pay increments in the future, and the recognition
of all actuarial gains and losses in the income statement when they arise.
When there is a difference between how the pension cost is arrived at in the legal
entity and in the Group, a provision or a receivable is recognised in the consolidated
accounts in respect of payroll tax based on this difference. The present value of the
provision or receivable is not calculated.
Share-based payments
The share savings programme is recognised in accordance with IFRS 2 Share-based
Payments and is paid through equity instruments. Recognition of share-based
payment programmes paid through equity instruments entails the fair value of
the instrument at the dividend date being recognised in the income statement
as a cost over the vesting period, with a corresponding adjustment of equity. At
the end of each vesting period, an estimate is made of the expected number of
allocated shares and the effect of any change in previous estimates are recognised
in the income statement with a corresponding adjustment of equity. In addition,
a provision is made for estimated social security costs relating to the share
programme.
Estimates are based on the value of the shares at the allocation date, which is defined
as the period when the agreement was concluded between the parties. The average
share price during this period was used as the basis for the valuation of the shares
at the allocation date.
Termination benefits
Termination benefits in connection with the termination of employment contracts
are recognised in the accounts if it is shown that the Group has an obligation, without
any reasonable possibility of withdrawing, as a result of a formal, detailed plan to
terminate an employment contract before the normal date. When benefits are paid
in the form of an offer to encourage voluntary redundancy, a cost is recognised if
it is likely that the offer will be accepted and the number of employees who will
accept the offer can be reliably estimated.
Short-term benefits
Short-term employee benefits are calculated without being discounted and are
recognised as a cost when the related services are provided.
Equity
Consolidated equity comprises share capital, other contributed capital, translation,
hedge and revaluation surpluses, and retained earnings, including profit/loss for
the year. Other contributed capital refers to premiums paid in conjunction with
share issues. The translation reserve consists of all exchange differences that arise
in the translation of foreign operations’ financial statements that are prepared in a
currency other than Swedish kronor. It also includes exchange differences arising
in connection with the revaluation of liabilities and derivatives that are classified as
instruments for hedging a net investment in a foreign operation, including tax. The
hedge reserve comprises the effective proportion of the accumulated net change
in the fair value of a cash flow hedging instrument attributable to underlying trans-
actions that have not yet occurred, including tax. The revaluation surplus also
comprises changes in value attributable to forest land. Retained earnings comprise
all other parts of equity, including profit/loss for the year.
58
Holmen Annual Report 2020
Note 1Notes Note 2. Operating segment reporting
2020
Net sales
External
Internal
Other operating income
Operating costs
Change in value of biological assets
Depreciation/amortisation according to plan
Share of profits of associates
Operating profit
Operating margin, %
Return on capital employed, %
Operating assets
Operating liabilities
Net deferred tax
Capital employed
Acquisition of non-current assets
External net sales by market
Sweden
Germany
UK
France
Italy
Poland
Rest of Europe
Asia
Rest of the world
Total
Net sales by market
Sweden
Germany
UK
France
Italy
Poland
Rest of Europe
Asia
Rest of the world
Total
Forest Paperboard
Paper
Wood
Products
Renewable
Energy
Group-wide
and other
Eliminations Total Group
2 664
3 219
279
-5 318
579
-55
-
1 367
23
4
45 088
-1 673
-9 185
34 230
207
2 656
-
-
-
-
-
8
-
-
2 664
6 187
-
796
-5 617
-
-554
-
812
13
15
6 920
-869
-775
5 276
275
105
1 258
774
380
271
397
1 352
1 329
321
6 187
4 879
-
179
-4 603
-
-381
-
73
2
4
2 925
-693
-262
1 969
280
279
850
590
425
532
321
1 250
438
192
4 879
2 222
-
395
-2 308
-
-124
-
185
8
17
2 625
-727
-52
1 846
107
781
6
465
11
2
0
411
174
371
2 222
375
3
19
-149
-
-27
-6
215
57
7
3 810
-121
-339
3 351
291
375
-
-
-
-
-
-
-
-
375
Group
Parent company
2020
4 197
2 115
1 830
816
805
718
3 022
1 940
884
2019
4 084
2 244
1 958
910
938
719
3 050
1 765
1 291
2020
4 382
1 707
1 253
647
716
488
2 332
1 841
820
2019
4 045
1 849
1 224
758
854
527
2 184
1 714
1 847
16 327 16 959 14 187 15 004
Net sales by product area
Consumer paperboard
Pulp
Book and magazine paper
Newsprint
Wood products, pine
Wood products, spruce
Wood construction solutions
Wood
Electricity
Other
-
-
248
-392
-
-31
-
-174
-
-
873
-893
44
24
845
-
-
-
-
-
-
-
-
-
-
-
-3 222
-577
3 799
-
-
-
-
-
-
-379
379
-
-
-
-
-
-
-
-
-
-
-
-
-
16 327
-
1 339
-14 589
579
-1 172
-6
2 479
15
6
61 862
-4 597
-10 568
46 697
2 006
4 197
2 115
1 830
816
805
718
3 022
1 940
884
16 327
Group
Parent company
2020
2019
2020
2019
187
260
293
6 001 5 969 3 861 3 596
369
4 381 5 058 4 381 4 976
699
904
789
-
2 664 2 913 2 656 2 909
350
411
498
1 035
1 080
107
699
904
789
-
498
863
948
-
330
45
350
17
330
358
Income from external customers is allocated to individual countries according to
the country in which the customer is based.
Group
Parent company
Non-current assets per country
2020
2019
2020
2019
Sweden
UK
Other
Total
53 657 50 532 14 652 13 806
-
-
1 587
5
1 321
4
-
-
54 983 52 124 14 652 13 806
Sales of consumer paperboard and pulp are made within the Paperboard business
area, while book and magazine paper and newsprint are attributable to the Paper
business area. Spruce and pine products, as well as wood construction solutions,
are sold within the Wood Products business area. Wood is sold by the Forest
business area and electricity by the Renewable Energy business area.
The Forest business area manages the Group’s forests, which cover just over one
million hectares. The annual volume in own forest amounts to 2.8 million m3sub.
The Renewable Energy business area is responsible for the Group’s hydro power and
wind power assets. Generation in a normal year amounts to 1.2 TWh of electricity.
The business areas are also responsible for the Group’s supply of wood and
electricity in Sweden.
Total
16 327 16 959 14 187 15 004
The Paperboard business area produces paperboard for consumer packaging for
the premium segment at one Swedish and one UK mill. The Paper business area
produces paper mainly for books, magazines and advertising at two Swedish mills.
The Wood Products business area produces wood products at five sawmills, for
use in joinery and construction. In 2020, the Group produced 0.6 million tonnes
of paperboard and 0.9 million tonnes of paper. Production of sawn wood products
totalled 1.0 million m3, including 0.1 million m3 from the wood products company
Martinsons, which was acquired as of 1 October.
These business areas are responsible for managing the operating assets and
liabilities, which together with the net amount of deferred tax assets and tax
liabilities constitutes their capital employed. Group management monitors the
business at operating profit level, and in terms of how earnings relate to capital
employed. Capital employed in each segment includes all assets and liabilities
used by the business area such as non-current assets, inventories and operating
receivables and operating liabilities, and the net amount of deferred tax assets
and tax liabilities. Financing and tax issues are managed at Group level.
Consequently, financial assets and liabilities, including pension liabilities, and
current tax assets and tax liabilities, are not allocated to the business areas.
Intra-Group sales between segments are founded on an internal market-based
price. The ‘Group-wide and other’ segment comprises Group staffs and Group-
wide functions that are not allocated to other segments.
Holmen Annual Report 2020
59
Note 2Notes Notes 2–3
Note 2. Operating segment reporting, cont.
2019
Forest Paperboard
Paper
Wood
Products
Renewable
Energy
Group-wide
and other
Eliminations Total Group
Net sales
External
Internal
Other operating income
Operating costs
Change in value of biological assets
Depreciation/amortisation according to plan
Impairment losses
Share of profits of associates
Operating profit
Operating profit/loss excluding items
affecting comparability*
Operating margin excluding items affecting
comparability, %
Return on capital employed, excluding items
affecting comparability, %
Operating assets
Operating liabilities
Net deferred tax
Capital employed
Acquisition of non-current assets
External net sales by market
Sweden
Germany
UK
Italy
France
Poland
Rest of Europe
Asia
Rest of the world
Total
2 913
3 372
191
-5 747
9 566
-45
-
-
10 250
6 229
-
839
-6 072
-
-562
-
-
435
5 757
-
185
-5 051
-
-382
-
-
509
1 172
435
509
19
8
43 127
-1 719
-8 690
32 718
77
2 909
-
-
-
-
-
5
-
-
2 913
7
8
7 403
-880
-935
5 589
421
79
1 356
872
302
424
351
1 286
941
618
6 229
9
24
3 007
-741
-363
1 903
187
280
883
669
634
486
367
1 421
658
359
5 757
1 695
-
351
-1 887
-
-97
-
1
62
62
4
6
1 232
-193
-39
1 000
162
450
4
418
3
0
0
339
166
314
1 695
367
11
102
-118
-
-26
-109
0
227
336
89
11
3 521
-127
-335
3 058
203
367
-
-
-
-
-
-
-
-
367
-
-
224
-562
-
-29
-
-
-368
-168
-
-
546
-982
64
-372
21
-
-
-
-
-
-
-
-
-
-
-
-3 384
-521
3 905
-
-
-
-
-
-
-
-
-445
445
-
-
-
-
-
-
-
-
-
-
-
-
-
16 959
-
1 370
-15 531
9 566
-1 141
-109
0
11 115
2 345
14
9
58 390
-4 196
-10 298
43 895
1 071
4 084
2 244
1 958
938
910
719
3 050
1 765
1 291
16 959
*Items affecting comparability refer to the revaluation of biological assets within Forest (SEK 9 079 million), an impairment loss of an associate within Renewable Energy
(SEK -109 million) and increased provisions for environmental restoration (SEK -200 million), recognised centrally within the Group.
Note 3. Other operating income
Group
Parent company
2020
2019
2020
2019
Certificates, renewable energy
Sales of by-products
Rent and land lease income
Emission allowances
Silviculture contracts
Sales of non-current assets
Other
457
411
94
85
80
59
153
510
371
54
86
70
15
265
Total
1 339
1 370
12
291
49
83
80
6
170
690
31
272
51
87
70
7
187
706
Of the sales of by-products in the Group, SEK 118 million (111) relates to rejects
from production, SEK 186 million (132) to wood shavings, bark and chips, as well
as SEK 108 million (127) to external sales of energy.
Income from renewable energy certificates received from the production of
renewable energy at the Group’s mills amounted to SEK 457 million (510),
of which SEK 445 million (479) refers to the UK.
The Group has been allotted emission allowances that have been used partly
within its own production. The surplus resulted in a gain of SEK 85 million (86).
60
Holmen Annual Report 2020
Notes Note 4. Employees, personnel costs and remuneration to senior management
Note 4
Wages, salaries and social
security costs
Wages, salaries and other
remuneration
Social security costs
Group
Parent company
2020
2019
2020
2019
1 694
679
1 625
633
1 326
577
1 300
543
AGM’s guidelines for determining salaries and other
remuneration for senior management
The 2020 AGM decided on the following guidelines for determining the salaries
and other remuneration of the CEO and other senior management, namely the
heads of the business areas and heads of Group staffs who report directly to
the CEO. The guidelines shall apply to remuneration agreed after the guidelines
have been adopted by the 2020 AGM. The guidelines do not cover remuneration
determined by the AGM.
Guidelines’ promotion of the company’s business strategy, long-term
interests and sustainability
Holmen’s strategy is to own and add value to the forest. Holmen’s forest holdings
form the basis of the business in which the raw material grows and is refined into
everything from wood products for climate-smart building to renewable packaging,
magazines and books, using energy that largely comes from its own hydro and wind
power. Successful implementation of the company’s business strategy, long-term
interests and sustainability requires the company to be able to attract the right
employees. This guideline is intended to provide Holmen with the conditions to
recruit and retain skilled employees.
Forms of remuneration
A long-term share-based incentive programme has been established within
the company, which is described below under Share savings programme. It was
approved by the 2019 AGM and is therefore not covered by these guidelines. Over
and above share-based incentive programmes approved by the AGM, no variable
remuneration shall be paid.
The remuneration of the CEO and the senior management shall consist of a fixed
market-based salary. Other benefits may include such items as health insurance,
accommodation and car allowance. Where such benefits are provided, they should
constitute no more than 10 per cent of the fixed salary.
The retirement age is normally 65 years. The pension benefit shall be based on
contributions and the contributions shall correspond to what is stipulated in the
ITP occupational pension plan, currently 30 per cent of fixed cash salary.
Notice and severance pay
The period of notice is six months, regardless of whether notice is given by the
company or the member of senior management. In the event of notice being given
by the company, severance pay may be paid corresponding to no more than 18
months’ salary.
Consideration of salary and employment terms for other employees
In formulating its proposals for these remuneration guidelines, the Board has taken
into account salaries and employment terms of the company’s other employees,
by including information about employees’ total remuneration, the components
of such remuneration and the increase in remuneration and the rate of increase
over time, which have constituted part of the basis for decisions in evaluating the
reasonableness of these guidelines.
Decision-making process for establishing, reviewing and implementing
the guidelines
The Board has established a remuneration committee. The committee’s duties
include preparing the Board’s decision on proposed remuneration guidelines for
senior management. Under Chapter 8, § 51 of the Swedish Companies Act, the
Board must draft proposed new guidelines at least every four years and put such
proposal to the AGM. The remuneration committee must also monitor and evaluate
the application of the guideline and applicable remuneration structures and levels
in the company. Members of the remuneration committee must be independent in
relation to the company and its senior management. The CEO and other members
of senior management do not attend the Board’s discussion of and decisions on
remuneration-related matters if such matters relate to them.
Deviation from the guidelines
The Board may decide to temporarily deviate from the guidelines in full or in part
if, in an individual case, there are particular reasons for so doing and deviation is
necessary in the long-term interests of the company, including its sustainability,
or to ensure the company’s financial viability.
Share savings programme
The 2019 AGM approved a targeted share savings programme for key individuals
in the Group. The overall purpose of the programme is to retain close alignment of
the interests of senior management and shareholders and to encourage long-term
commitment to Holmen.
Participation in the programme required the relevant employees to have personally
invested in Holmen shares (known as ‘savings shares’) during the period 9 May
to 31 May 2019. For each savings share invested, half a matching share will
be allocated after the expiry of the vesting period provided that Holmen’s total
shareholder return is positive over the duration of the programme. In addition,
performance shares may be allocated, depending on the level of the Group’s
return on capital employed. The maximum number of performance shares varies
depending on the participant’s position and amounts to 3–6 shares per savings
share. The assignment of matching and performance shares requires participants
to have been full-time employees within the Holmen Group and to have held the
savings shares for the entire vesting period. The vesting period runs from 31 May
2019 through the day of publication of the interim report for the first quarter
of 2022. The maximum number of shares that can be allocated is estimated at
151 000. Total costs for the programme are estimated at SEK 11 million. Costs of
SEK 5 million have been recognised for 2020.
Remuneration of Board and senior management
Board of Directors
A fixed Board fee shall be paid to the members of the Board elected by the AGM.
The CEO, however, does not receive any Board fee. For 2020, fees to the Board
amounted to SEK 3 195 000 (3 195 000). The chairman of the Board received a fee
of SEK 710 000 (710 000), and each of the other seven (seven) members received
SEK 355 000 (355 000).
Senior management
Salary and other benefits for the CEO in 2020 amounted to SEK 9 783 332
(16 404 506), of which SEK 0 (7 341 506) relates to the value of shares allocated
under the share savings programme. No variable remuneration was paid besides
the allocation under the share savings programme. The total pension cost for the
CEO, calculated in accordance with IAS 19, amounted to SEK 5 647 641 (5 193 543).
Recognised wages and salaries for the share savings programmes for the CEO
amounted to SEK 577 836 (809 752).
In 2020, the salaries and other benefits of other senior management, i.e. the
heads of the five (five) business areas and the heads of the five (five) Group
staffs and the head of international affairs, who report directly to the CEO,
totalled SEK 29 066 025 (37 499 766) in 2020, of which SEK 0 (10 964 132)
relates to the value of shares allocated under the share savings programme.
No variable remuneration was paid besides the allocation under the share savings
programme. The total pension cost for this group, calculated in accordance
with IAS 19, amounted to SEK 11 795 571 (11 566 102) in 2020. Recognised
wages and salaries for the share savings programmes for this group amounted
to SEK 1 802 587 (1 446 961).
For senior management, employed from 2011, a mutual notice period of six
months applies. In the event of notice being given by the company, deductible
severance pay corresponding to 18 months’ salary is paid. These terms apply to
nine people. For one person no severance is paid. For two senior management
employment contracts, signed before 2011, the employee is required to give six
months’ notice and the company must give 12 months’ notice. In the event of
notice being given by the company for these people, severance pay corresponding
to up to two years’ salary is paid, depending on age.
All members of senior management are employed by the parent company.
Pension obligations in respect of senior management
Holmen’s pension obligations over and above the ITP plan for the CEO amounted
to SEK 29 million (23) at 31 December 2020 and for other members of senior
management to SEK 31 million (26), calculated in accordance with IAS 19. The
pension obligations are secured using plan assets managed by an independent
pension fund.
Holmen Annual Report 2020
61
Notes Notes 4–6
Note 4. Employees, personnel costs and
remuneration to senior management,
cont.
Average no.
of employees
(FTE)
Of
which
women
Of
which
men
Average no.
of employees
(FTE)
Of
which
women
Of
which
men
2020
2019
2 316
462 1 854
2 349
445 1 904
12
76
377
123
22
12
35
6
41
41
17
8
4
15
6
35
336
106
14
8
20
12
73
409
-
23
13
36
5
39
45
-
8
5
15
7
34
363
-
15
8
21
658
132
526
566
118
448
2 974
594 2 380
2 915
562 2 352
Parent company
Sweden
Group companies
France
Netherlands
UK
Sweden
Germany
US
Other countries
Total Group
companies
Total Group
Proportion of women, %
Board (excl. deputy members)
Senior management
Total
Group
Parent company
2020
25
17
21
2019
25
17
21
2020
25
17
21
2019
25
17
21
Note 5. Auditors’ fee and remuneration
The audit firm KPMG was elected by the 2020 AGM as Holmen’s auditors for a
period of one year. KPMG audits Holmen AB and almost all of its subsidiaries.
Group
Parent company
Financial costs
Impairment losses on value of
shares in Group companies
Impairment losses on value of
shares in associates
Net profit/loss
Assets and liabilities measured
at fair value through profit/loss
Cash and cash equivalents
Assets and liabilities measured
at amortised cost
Total net profit/loss
Interest expense attributable to
right-of-use liabilities
Interest expense*
Financial costs
Net financial items
Group
Parent company
2020
2019
2020
2019
-
-
15
6
-22
-2
-5
-47
-53
-42
-
-
-95
-
-
-185
-28
-3
29
-2
-4
-41
-47
-34
43
6
-21
28
-
-52
-118
199
-29
-3
29
-4
-
-50
-238
22
*SEK -7 million (-18) in the Group and parent company relates to interest
expense for derivatives valued at fair value through other comprehensive income.
SEK -2 million (-4) relates to interest expense for derivatives recognised at fair value
through profit/loss for the year. Remaining interest expense is calculated using the
effective interest rate method and relates to financial items valued at amortised
cost.
Net gains and losses recognised in net financial items mainly relate to currency
revaluations of internal lending and hedging of internal lending. The parent
company’s net financial items also include currency revaluation of forward
contracts that hedge net investment in foreign operations, which are recognised
in the Group under other comprehensive income. The fair value of the interest
component in forward foreign exchange contracts as well as value changes in
accrued interest and realised interest in fixed-interest-rate swaps is recognised on
an ongoing basis in net interest items. Information on financial risks is provided on
pages 44–45.
The income from financial instruments included in operating profit/loss is shown
in the following table:
Group
Parent company
Remuneration to KPMG
2020
2019
2020
2019
2020
2019
2020
2019
Audit assignments
Tax advice
Total
Other auditors
Total
7
0
7
0
7
7
1
7
0
7
4
0
5
-
5
5
1
5
-
5
‘Audit assignments’ refers to the statutory examination of the annual accounts
and accounting records, the administration by the Board and the CEO, and auditing
and other assessment performed as agreed or in accordance with contracts.
This includes other duties that are incumbent on the company’s auditors and the
provision of advice or other assistance resulting from observations in connection
with such assessment or the performance of such other duties. ‘Tax advice’ refers
to all consultation in the field of taxation.
Note 6. Net financial items and income from
financial instruments
Financial income
Dividend income from Group
companies
Dividends from associates
Gains on sales of Group companies
Gains on sales of associates
Interest income*
Total financial income
Group
Parent company
2020
2019
2020
2019
-
0
-
0
11
11
-
0
0
-
13
13
284
-
10
0
24
318
148
-
82
-
30
261
*SEK 11 million (12) relates to interest income calculated using the effective interest
rate method from financial items valued at amortised cost.
Exchange gains/losses on trade
receivables and trade payables
Net gain/loss on derivatives stated
in working capital
48
336
45
343
-98
-250
-80
-265
The derivatives included in operating profit/loss relate to currency hedging of trade
receivables and trade payables as well as financial electricity derivatives.
Gains and losses on currency hedging are recognised in operating profit/loss
when the hedged item is recognised and in 2020 amounted to SEK -16 million
(-419), with the remainder being recognised in other comprehensive income as
hedge accounting is applied. The fair value of outstanding currency hedges at
31 December 2020 was SEK 466 million (-27).
Gains/losses on financial electricity hedges are recognised in the income
statement when they expire; for 2020 they totalled SEK -82 million (172). The
fair value of outstanding financial electricity hedges at 31 December 2020 was
SEK 14 million (206). The change in fair value is recognised in other comprehensive
income as hedge accounting is applied.
The change in the fair value of hedges for investment purchases is recognised in
other comprehensive income until expiry, at which point the gain/loss is added to
the cost of the non-current asset that was hedged. The fair value of outstanding
hedges for investment purchases amounted to SEK -35 million (4) at 31 December
2020. In 2020 there was an impact of SEK -2 million on the cost of hedged items
owing to results from hedging.
Results from hedging of foreign net assets amounted to SEK 29 million (-2) in
2020 and are recognised in other comprehensive income as hedge accounting is
applied. In the parent company accounts, this gain is recognised in the income
statement. The translation of net foreign assets had an impact of SEK -187 million
(141) on consolidated equity. The fair value of outstanding hedges of net assets at
31 December 2020 was SEK 7 million (3) and relates to financial derivatives.
The fair value of the derivatives used to manage the fixed interest periods
amounted to SEK -3 million (-6) at 31 December 2020, which was recognised
in other comprehensive income as hedge accounting is applied. This value is
expected to be recognised in the income statement in 2021 and later.
62
Holmen Annual Report 2020
Notes
Note 7
Note 7. Tax
Taxes stated in income statement
2020
2019
2020
2019
Group
Parent company
Current tax
Deferred tax
Total
-517
-582
59 -1 769
-458 -2 351
-429
12
-417
-506
13
-493
Tax recognised totalled SEK -458 million, corresponding to 19 per cent of profit
before tax. In 2019, tax recognised was affected by SEK -1 870 million from a
change in the accounting of forest assets.
Group
Parent company
2020
2019
2020
2019
%
SEKm
%
SEKm
2 336
%
SEKm
2 340
Taxes stated in income statement
Recognised profit/loss before tax
Tax at applicable rate
Difference in tax rate in foreign operations
Tax-exempt income
Non-tax-deductible costs
Standard interest on tax allocation reserve
Effect of unstated loss carry-forwards and temporary differences
Tax attributable to previous periods
Change to tax rate on deferred tax assets/liabilities
Other
Effective tax
SEKm
2 437
-521
9
7
-19
-2
0
60
5
4
-458
11 081
-2 371
2
23
-29
-1
0
-6
62
-30
21.4
-0.4
-0.3
0.8
0.1
0.0
-2.4
-0.2
-0.2
18.8
-2 351
21.4
0.0
-0.2
0.3
0.0
0.0
0.1
-0.6
0.3
21.2
-500
0
64
-24
-2
0
45
0
0
-417
21.4
0.0
-2.7
1.0
0.1
0.0
-1.9
0.0
0.0
17.9
-501
0
70
-45
-1
0
0
0
-16
-493
%
21.4
0.0
-3.0
1.9
0.0
0.0
0.0
0.0
0.7
21.1
Tax attributable to other
comprehensive income
Cash flow hedges
Share in joint ventures’ other
comprehensive income
Translation difference on foreign
operations
Hedging of currency risk in
foreign operations
Revaluations of forest land
Revaluations of defined benefit
pension plans
Group
Parent company
Before
tax
After
tax
Before
tax
After
tax
Before
tax
Tax
After
tax
Before
tax
Tax
Tax
After
tax
Tax
2020
2019
2020
2019
-29
272
-55
218
-34
273
-55
218
-37
16
-187
-
-
16
-6
-187
141
8
-
-
-6
141
29
1 173
-6
-242
23
-1
932 13 055 -2 689 10 366
-2
0
-15
3
-12
14
2
16
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7
-
-
-
-
-
7
-27
-
-
-
-
-
-27
Other comprehensive income
1 289
-300
989 13 166 -2 679 10 487
272
-55
218
-34
Taxes as stated in balance sheet
2020
2019
2020
2019
Group
Parent company
Tax receivables
Deferred tax asset
Current tax receivable
Total tax receivables
Deferred tax liabilities
Non-current assets
Biological assets
Forest land
Property, plant and equipment
Tax allocation reserve
Transactions subject to hedge
accounting
Other, including deferred tax
assets stated net among deferred
tax liabilities
1
6
7
1
0
2
-
-
-
-
-
-
5 901
2 939
1 063
509
5 746
2 697
1 434
359
-
595
2
-
-
595
2
-
92
66
37
27
Deferred tax liabilities
10 570 10 299
Current tax liability
Total tax liabilities
211
112
10 780 10 411
91
37
-32
657
145
802
-19
614
105
719
Holmen Annual Report 2020
63
Notes Notes 7–8
Note 7. Tax, cont.
Change in the net amount of deferred tax assets and deferred tax liabilities
Group
Stated
in the
income
statement
Stated in
other com-
prehensive
income
Opening
balance
Translation
differences
and other
Business
combination
Closing
balance
Opening
balance
Parent company
Stated
in the
income
statement
Stated in
other com-
prehensive
income
-5 746
-2 697
-1 434
-359
-37
-26
-10 298
-155
-
357
-150
-
7
59
-
-242
-
-
-55
-3
-300
-
-
14
-
0
7
21
-
-
-
-
-
-50
-5 901
-2 939
-1 063
-509
-92
-66
-
-595
-2
-
-37
19
-50
-10 570
-614
-
-1
-
-
-
13
12
-
-
-
-
-55
-
-55
2020
Biological assets
Forest land
Property, plant and
equipment
Tax allocation reserve
Transactions subject
to hedge accounting
Other
Deferred net tax
liability
2019
Biological assets
Forest land
Property, plant and equipment
Tax allocation reserve
Transactions subject to hedge
accounting
Other
Group
Stated in
other com-
prehensive
income
Stated in
the income
statement
-1 973
-
324
-134
-
13
-
-2 689
-
-
8
2
Opening
balance
-3 773
-8
-1 746
-225
-44
-42
Translation
differences
and other
Closing
balance
Opening
balance
Parent company
Stated
in the
income
statement
Stated in
other com-
prehensive
income
-
-
-12
-
-
1
-5 746
-2 697
-1 434
-359
-37
-26
-
-594
-2
-
-44
6
-635
-
-1
-
-
-
13
13
-
-
-
-
7
-
7
Deferred net tax liability
-5 838
-1 769
-2 679
-11
-10 298
Closing
balance
-
-596
-2
-
-91
32
-657
Closing
balance
-
-595
-2
-
-37
19
-614
The Group’s deferred tax liability for forest assets (biological assets and forest
land) amounts to SEK 8 840 million (8 442) and is calculated based on the
difference between book value SEK 43 201 million (41 345) and taxable cost
SEK 315 million (363). This represents the tax expense that would arise if the
forest assets were sold as forest properties. No tax expense arises if the assets
are retained.
Deferred tax liability in respect of property, plant and equipment is primarily
attributable to depreciation/amortisation in excess of plan.
The amount recognised in other comprehensive income includes deferred tax
mainly related to a change in the value of forest land of SEK -242 million (-2 689)
and hedge reserve of SEK -55 million (8).
In 2020 the Group’s Spanish companies were liquidated. Holmen is considering
applying group relief in the parent company related to the companies’ tax losses.
No deferred tax asset has been recognised for these losses. There are no other
loss carry-forwards of significance in the Group.
The share savings programme approved by the 2019 AGM may entail allocation
of up to 151 000 shares from Holmen’s treasury holdings when the programme
expires in 2022. The effects on key ratios and profit per share are marginal.
Note 8. Earnings per share
Group
2020
2019
Total number of shares outstanding,
1 January
Buy-back of treasury shares during the year
Share savings programme allocation
161 925 685 167 992 324
- 6 235 436
168 797
-
-
Total number of shares outstanding,
31 December
161 925 685 161 925 685
Shareholders’ share of profit/loss for
the year, SEKm
Basic average number of shares
1 979
8 731
161 925 685 166 097 996
Basic EPS for the year, SEK
12.2
52.6
Shareholders’ share of profit/loss for
the year, SEKm
Diluted average number of shares
1 979
8 731
161 925 685 166 097 996
Diluted EPS for the year, SEK
12.2
52.6
64
Holmen Annual Report 2020
Notes
Note 9. Forest assets
Holmen owns a total of 1 303 000 hectares of land, of which 1 043 000 hectares
are productive forest land. Forest assets are recognised at fair value, calculated
based on the transaction prices for forest properties in those areas where the
Group owns forest land. The valuation is based on detailed data about transactions
and pricing statistics published by different market operators over the past three
years. Account is taken of where in the country the forest land is located and
differences in the forest in terms of the volume of standing timber and site quality.
The volume of standing timber is estimated at 124 million cubic metres growing
stock, solid over bark, based on the inventory conducted in 2019 and taking into
account subsequent growth and harvest. No value is assigned to land that is not
productive forest land.
The book value of forest assets amounted to SEK 43 202 million (41 345) at
31 December 2020. The value corresponds to an average of SEK 41 420 per
hectare of productive forest land. The value per hectare varies between different
parts of the country, with forest properties in southern Sweden being valued much
higher per hectare as a result of a greater volume of standing timber, higher site
quality, a shorter harvesting cycle and greater demand for forest land.
North
Central
South
Productive forest land, ‘000 ha
Volume of standing timber, mil.
m3 solid over bark
688
264
74
35
91
15
Total
1 043
124
The value of the forest assets is allocated in the balance sheet to growing trees,
which are recognised as a biological asset, and forest land. How much of the value
is allocated to the biological assets is established by calculating the present value
of expected future cash flows, less selling costs but before tax, from harvesting
those trees currently growing. The trees that are currently growing are expected
to be harvested when they reach an age of 85 years. The volumes are based on
the long-term harvest plan that was updated in 2020. Income is calculated based
on a long-term trend price for 2020 of SEK 457 (445)/m3sub, which is in line with
currently prevailing market prices. Costs are based on the current level. Prices
and costs are revised up by 2 per cent each year. A discount rate before tax of 4.5
per cent (4.5) has been used. Costs for replanting after harvesting have not been
taken into account. The book value of forest land is calculated as the difference
between the total value of forest assets and biological assets. This value reflects
future income from sources other than the harvest of currently standing trees, such
as leasing of land for wind power, quarrying, hunting leases, licence income and
harvesting future generations of trees.
The change in value of biological assets, calculated as the net of the change as a
result of harvesting and the unrealised change in fair value is stated in the income
statement and in 2020 totalled SEK 579 million (9 566). For 2019 this amounted
to SEK 9 079 million, recognised as an item affecting comparability as a result of
amended assumptions, primarily an amended discount rate. The change in fair
value for forest land is recognised in other comprehensive income and totalled
SEK 1 173 million (13 055). In 2019 a new accounting policy was adopted for
forest land that affected the size of the change.
Note 9
The future value of forest assets is governed by changes in market prices for forest
properties and growth in Holmen’s volume of standing timber. The following
graphs show historical market prices for forest properties and the development
of Holmen’s volume of standing timber according to completed inventories.
Price of forest properties, SEK/m3
800
600
400
200
0
2015
2016
2017
2018
2019
2020
Southern Sweden
Central Sweden
Northern Sweden
Source: Infotrader together with Holmen’s calculations. Average prices based on
market transactions per county weighted together based on Holmen’s holdings in
each region. Rolling 3-year average.
Volume of standing timber, m3 solid over bark growing
stock per hectare of productive forest land
160
120
80
40
0
1948
1955
1965
1975
1988
1993
2000
2010
2020
SEKm
Change in assumption
Market price based
on market statistics
Forest stand volume
of timber
Price change SEK 5/m3
growing stock, solid over bark
1 million m3 growing stock,
solid over bark
Change in value,
before tax
2020
2019
620
615
350
335
In 2019 and 2020, an external independent valuation was carried out for forest
properties corresponding to 44 per cent of book value. The external valuation
exceeds the book value by an average of 4 per cent.
The inventory conducted in 2019 is a random sample inventory of forest holdings
with an estimated standard error of 1.3 per cent.
Group
Book value at start of year
Acquisitions
Disposal
Investment in reforestation
Change due to harvesting
Unrealised change in fair value
Other changes
Book value at end of year
Forest assets
Biological assets
Forest land
Of which
2020
41 345
9
-22
128
-691
2 444
-12
43 202
2019
18 701
16
-3
-
-665
23 286
10
41 345
2020
27 979
0
-16
128
-691
1 271
-8
28 663
2019
18 400
9
-3
-
-665
10 231
7
27 979
2020
13 366
9
-6
-
-
1 173
-4
14 538
2019
301
7
-
-
-
13 055
3
13 366
The acquisition cost of forest land amounted to SEK 310 million at 31 December 2020.
Holmen Annual Report 2020
65
Notes Notes 10–11
Note 10. Non-current intangible assets
Group
Accumulated acquisition costs
Opening balance
Business combination
Investments
Disposal and retirement of assets
Translation differences
Total
Accumulated amortisation, depreciation and impairment losses
Opening balance
Depreciation/amortisation for the year
Disposal and retirement of assets
Translation differences
Total
Residual value according to plan at end of year
Group
Goodwill
Other intangible
assets
Total
Parent company
Non-current
intangible assets
2020
2019
2020
2019
2020
2019
2020
2019
-
355
-
-
-
355
-
-
-
-
-
355
-
-
-
-
-
-
-
-
-
-
-
-
225
140
7
-2
0
370
155
17
-2
0
170
200
231
-
12
-18
1
225
163
10
-18
1
155
70
225
495
7
-2
0
725
155
17
-2
0
170
555
231
-
12
-18
1
225
163
10
-18
1
155
70
68
-
-
-
-
68
44
6
-
-
50
17
81
-
5
-18
-
68
56
6
-18
-
44
24
The goodwill recognised in conjunction with the acquisition of Martinsons in 2020 relates to the Wood Products business area, see Note 26. Goodwill is tested for
impairment annually by calculating the value in use of the cash-flow generating unit to which goodwill has been allocated. The calculations are made by assessing future
cash flows. The impairment test performed in 2020 is based on analyses of margin and volume growth made in connection with the acquisition. The future cash flows have
been discounted by 8 per cent interest before tax. The discount rate has been determined by calculating the weighted average cost of capital (WACC). Based on these
calculations, there is no need for impairment.
Other intangible assets consist primarily of the value of the wood supply business included in the acquisition of Martinsons SEK 134 million (0), right-of-use relating to
certain energy assets SEK 49 million (46) and IT systems SEK 10 million (16).
The assets are mainly externally acquired and all assets, with the exception of goodwill, have a definable useful life.
Note 11. Property, plant and equipment
Buildings, other land*
and land installations
Machinery and
equipment
Work in progress and
advance payments
to suppliers
Total
2020
2019
2020
2019
2020
2019
2020
2019
5 934
475
79
7
-1
-53
6 441
3 549
348
110
-
0
-36
3 971
2 471
5 695
-
195
10
-9
43
5 934
29 050
866
549
89
-416
-399
29 739
28 573
-
657
36
-534
318
29 050
3 418
-
22 773
646
22 154
-
949
-
-414
-294
934
-13
-528
227
23 660
22 773
100
13
-9
27
3 549
2 385
244
134
397
-96
-
-2
676
-
-
-
-
-
-
-
80
-
208
-46
-
3
244
35 229
1 475
1 025
-
-417
-454
36 858
34 348
-
1 060
-
-543
364
35 229
-
-
-
-
-
-
-
26 323
994
25 572
-
1 059
-
-414
-330
1 034
-
-537
254
27 632
26 323
6 078
6 277
676
244
9 226
8 906
Group
Accumulated acquisition costs
Opening balance
Business combination
Investments
Reclassifications
Disposal and retirement of assets
Translation differences
Total
Accumulated amortisation, depreciation and
impairment losses
Opening balance
Business combination
Depreciation and amortisation according to plan for
the year
Reclassifications
Disposal and retirement of assets
Translation differences
Total
Residual value according to plan at end of year
*Other land refers to land other than forest land.
66
Holmen Annual Report 2020
Notes Notes 11–12
Parent company
Accumulated acquisition costs
Opening balance
Investments
Reclassifications
Disposal and retirement of assets
Total
Accumulated depreciation and
amortisation according to plan
Opening balance
Depreciation and amortisation
according to plan for the year
Disposal and retirement of assets
Total
Accumulated revaluations
Opening balance
Disposal and retirement of assets
Total
Residual value according to plan at
end of year
*Other land refers to land other than forest land.
Forest land
Buildings, other land*
and land installations
Machinery and
equipment
Work in progress and
advance payments
to suppliers
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
474
4
-
-
478
-
-
-
-
469
5
-
-
474
-
-
-
-
177
9
4
-
190
166
5
6
-
177
136
133
4
-
3
-
139
136
2 388
-
2 388
2 388
-
2 388
1
-
1
1
-
1
260
52
9
-18
303
173
38
-18
193
-
-
-
243
46
1
-30
260
168
35
-30
173
-
-
-
17
7
-13
-
10
-
-
-
-
-
-
-
8
17
-8
-
17
-
-
-
-
-
-
-
928
72
-
-18
982
309
42
-18
333
886
72
-
-30
928
301
38
-30
309
2 389
-
2 389
2 389
-
2 389
2 866
2 862
51
42
111
87
10
17
3 038
3 008
For forest assets in the Group see Note 9. The Group’s investment commitments relating to approved and ongoing projects amounted to SEK 1 304 million (1 841) at
31 December 2020, the majority of which is attributable to the Blåbergsliden Wind Farm. In 2020, capitalised borrowing costs totalled SEK 2 million (3). An interest rate of
1.2 per cent (1.1) was used to determine the amount.
Note 12. Right-of-use assets (leases)
Group
Accumulated acquisition costs
Value at start of year
Amended accounting policy
Business combination
Additional right-of-use agreements
Completed leases
Total
Accumulated depreciation and amortisation
Value at start of year
Depreciation/amortisation for the year
Completed leases
Total
Value at end of year
Buildings
The Group leases a number of office and warehouse premises. The leases
usually have a term of between 5 and 10 years.
Machinery and equipment
The Group’s leasing of machinery and equipment mainly relates to cargo
ships, forklifts and cars. The leasing period for such assets is normally 2 to
5 years.
Buildings
Machinery and equipment
Total
2020
2019
2020
2019
2020
2019
167
-
3
82
-17
235
42
38
-17
63
172
-
143
-
24
0
167
-
42
0
42
126
113
-
32
80
-36
188
56
58
-36
78
111
-
62
-
51
0
113
-
56
0
56
57
281
-
35
162
-53
424
98
96
-53
141
284
-
205
-
75
0
281
-
98
0
98
183
Amounts recognised in profit/loss
2020
2019
Depreciation/amortisation
Interest expense
Costs related to current lease liabilities
Costs related to low-value leases
Costs related to variable leases
96
5
2
0
0
98
4
2
0
2
102
106
In 2020 the Group’s payments attributable to leases amounted to SEK 102 million
(104). These payments include both amounts for leases that are recognised as
lease liabilities and amounts paid for variable lease payments, short-term leases
and low-value leases. No right-of-use asset is recognised for leases with a term of
12 months of less or with underlying assets of low value.
See Note 14 for a maturity analysis of liabilities regarding right-of-use assets.
Holmen Annual Report 2020
67
Notes Note 13
Note 13. Investments in associates, joint ventures and other shares and participations
Profit/loss from associates and joint ventures
Recognised in profit/loss for the year
Stated in other comprehensive income
Total comprehensive income
Group
2020
-6
16
10
2019
0
-6
-6
Associates and joint ventures
Book value at start of year
Business combination
Investments
Disposals
Share of earnings
Translation difference
Impairment losses
Other
Book value at end of year
Associates
Joint ventures
Total
Group
Parent company
Group
Parent company
Group
Parent company
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
1 620
13
10
-
-1
-
-
-
1 626
-
25
-29
-1
-
-
-
1 642
1 620
87
-
-
-
-
-
-
-
87
114
-
-
-26
-
-
-
-
87
0
-
64
-
11
0
-
0
75
113
-
-
-
-5
0
-109
0
0
0
-
64
-
-
-
-
-
64
185
-
-
-
-
-
-185
-
1 620
13
74
-
10
0
-
0
1 740
-
25
-29
-6
0
-109
0
87
-
64
-
-
-
-
-
0
1 717
1 620
151
299
-
-
-26
-
-
-185
-
87
Parent company and Group holdings of shares and investments in associates and joint ventures
Corporate ID No.
Registered
office
Number of
holdings
Holding
%*
556036-9398
556504-2826
556017-6678
556016-0953
556594-6984
556594-3015
Vännäs
Lycksele
Arbrå
Örnsköldsvik
Stockholm
Umeå
9 886
683
5 556
990
2 300
2 014
49.4
6.8
13.9
9.9
46.0
40.3
556914-9833
Stockholm
250
50.0
Associates
Harrsele AB
Vattenfall Tuggen AB
Brännälvens Kraft AB
Gidekraft AB
Uni4 Marketing AB
Rebio AB
Other associates
Joint venture
Varsvik AB
Total
Value of
holding in
consolidated
accounts
2020
Book value
in the parent
company
Holding
%*
Value of
holding in
consolidated
accounts
2019
Book value
in the parent
company
1 493
85
36
0
16
10
1
1 642
75
1 717
49.4
6.8
13.9
9.9
36.0
-
50.0
-
85
-
0
2
-
0
87
64
151
1 484
85
36
0
15
-
0
1 620
0
1 620
-
85
-
0
2
-
0
87
0
87
*The percentage of ownership corresponds to the percentage of votes for the total number of shares.
Other shares and participations
2020
2019
2020
2019
Group
Parent company
Book value at start of year
Investments
Disposals
Translation difference
Impairment losses
Book value at end of year
1
0
0
0
-
2
1
-
-
0
-
1
0
-
0
-
-
0
0
-
-
-
0
The holdings in Brännälvens Kraft AB, Gidekraft AB, Harrsele AB and Vattenfall
Tuggen AB refer to hydro power assets. The holdings entitle the Group to buy
electricity produced at cost price, so the associate only earns a very limited
profit. Purchased electricity is sold to external customers at market price, and the
earnings are stated in the consolidated accounts within the Renewable Energy
business area.
The holding in associate Harrsele AB is recognised in the Group at SEK 1 493 million
(1 484). Holmen purchased 568 GWh (476) of electrical power from Harrsele AB
in 2020, giving Holmen an operating profit of SEK 112 million (133) from market
sales. Harrsele AB owns power assets that generate 950 GWh of electrical power in
a normal year. These assets were originally constructed in 1957–58 and the book
value of the non-current assets in Harrsele AB amounts to SEK 140 million (122).
The company’s shareholders made a shareholders contribution during the year of
SEK 20 million (25).
Ownership in remaining associates relates to activities in the areas of sales,
research and development.
The interests in Brännälvens Kraft AB, Gidekraft AB and Vattenfall Tuggen AB
are classified as associates even though the holdings are less than 20 per cent,
since shareholder agreements provide significant influence over each company’s
activities.
Ownership in the joint venture, Varsvik AB, relates to wind power operations.
68
Holmen Annual Report 2020
Notes Note 14. Financial instruments
Non-current financial receivables consist of interest-bearing financial receivables
from other companies, prepayments for credit facilities and the fair value of non-
current derivatives.
Current financial receivables are recognised as fixed income investments and
lending for durations of up to one year, accrued interest income and unrealised
exchange gains and fair values of derivatives. Current financial receivables
essentially have fixed interest periods of under three months, and thus involve
a very limited interest rate risk.
Cash and cash equivalents refers to bank balances and investments that can be
readily converted into cash for a known amount and with a duration of no more
than three months from the date of acquisition, which also means that the interest
rate risk is negligible. Cash and cash equivalents are placed in bank accounts or as
current deposits at banks.
Loans, accrued interest expense, unrealised exchange losses and fair values
of derivatives are stated as financial liabilities. Financial liabilities are largely
interest-bearing.
In addition to the financial assets and liabilities identified above, liabilities relating
to right-of-use assets (see Note 12) and a pension liability (see Note 18) are also
included in net financial debt. The maturity structure and average interest for the
Group’s liabilities are stated in the section on Risk on pages 44–45. SEK 514 million
of the parent company’s liabilities are due for payment within one year.
All of the Group’s derivatives are covered by ISDA or FEMA agreements, which entails
a right for Holmen to offset assets and liabilities in relation to the same counterparty
in the case of a credit event. Taking into account the terms of the netting agreement,
the net exposure is SEK 489 million (147). Assets and liabilities are not offset in the
report. Recognised derivatives totalled SEK 577 million (326) on the asset side and
SEK -88 million (-179) on the liability side.
The ongoing reference rate reform only has a marginal impact on Holmen, since
interest derivatives are almost exclusively denominated at the Swedish reference
rate. For such currencies where the reference rate reform is underway, continued
hedge accounting will apply while the reform is in progress. Nevertheless, these
hedges are expected to be effective in the future.
No provision has been made for expected credit losses for the financial assets
included in the net liability, based on no losses arising over the past 10 years and
assets held at the balance sheet date being deemed to be of good credit quality.
See Note 16 for information about impairment testing of trade receivables.
The fair value of financial instruments traded on an active market is based on listed
market prices and belongs to measurement level 1 as per IFRS 13. Where there are
no listed market prices, fair value has been calculated using discounted cash flows.
In calculating discounted cash flows, variables used for the calculations, such as
discount rates and exchange rates, are taken from market listings where possible.
In calculating discounted cash flows, the mean of exchange rates and discount rates
is used. These valuations belong to measurement level 2. Other valuations, for which
a variable is based on own assessments, belong to measurement level 3. Currency
options are valued using the Black & Scholes formula, where appropriate. Holmen
uses valuation level 2 when measuring financial instruments in accordance with
IFRS 13.
Fair value in the tables is calculated on the basis of discounted cash flows and
all variables, such as discount rates and exchange rates, are taken from market
listings. The difference between fair value and book value arises because certain
liabilities are not measured at fair value in the balance sheet, and are instead
stated at their amortised cost. In the case of trade receivables and trade payables,
the book value is stated as the fair value, as this is judged to be a good reflection
of the fair value. For further information about financing and quantitative data on
Holmen’s hedge accounting see the section on Risk on pages 44–45 and Note 6 on
page 62.
Note 14
2021
2022
2023
2024
2025–
-9
-66
-2 496
-113
-630
-4
-2
-
-2
-7
-
-2
0
-
-3
-
-
-50
-80
-529 -1 026 -1 023 -1 428
-29
-36
18
3
297
2 015
380
226
-
35
2
29
-
36
2
0
-
37
3
2
-
200
Group
Maturity structure,
undiscounted amounts
Financial liabilities
Derivatives
Derivatives attributable
to working capital
Trade payables
Liabilities relating to
right-of-use assets*
Other financial liabilities
Financial receivables
Derivatives
Derivatives attributable
to working capital
Trade receivables
Other financial receivables
*Liabilitiesrelatingtoright-of-useassetsarenotclassifiedasafinancialinstru-
ment under IFRS 9.
Parent company
Maturity structure,
undiscounted amounts
Financial liabilities
Derivatives
Derivatives attributable
to working capital
Trade payables
Other financial liabilities
Financial receivables
Derivatives
Derivatives attributable
to working capital
Trade receivables
Other financial receivables
2021
2022
2023
2024
2025–
-9
-4
-2
-2
-3
-66
-1 970
-539
-2
-
-
-
-529 -1 026 -1 023 -1 422
-7
-
0
-
18
3
297
1 487
266
226
-
35
2
29
-
36
2
0
-
37
3
2
-
188
Holmen Annual Report 2020
69
Notes Note 14
Note 14. Financial instruments, cont.
Group
Financial instruments included in
net financial debt
Non-current financial receivables
Derivatives
Other financial receivables
Current financial receivables
Accrued interest
Derivatives
Other financial receivables
Cash and cash equivalents
Bank balances
Non-current liabilities
Bonds
Derivatives
Other non-current liabilities
Current liabilities
Commercial paper programme
Derivatives
Accrued interest
Other current liabilities
Financial instruments not included
in net financial debt
Other shares and participations
Trade receivables
Derivatives (recognised among
operating receivables)
Trade payables
Derivatives (recognised among
operating liabilities)
Total financial instruments
Recognised at
fair value through
profit/loss*
Hedging
instruments
Recognised at
amortised cost
Total
book value
Fair value
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
-
-
-
-
16
-
16
-
-
-
-
-
-
-
-5
-
-
-5
2
-
36
-
-2
36
48
-
-
-
-
14
-
14
-
-
-
-
-
-
-
-13
-
-
-13
1
-
8
-
-32
-23
-22
12
-
12
-
-
-
-
-
-
-
-14
-
-14
-
-
-
-
-
-
-
14
-
14
-
-
-
-
-
-
-
-12
-
-12
-
-8
-
-
-8
-
-
-
278
278
0
-
27
27
346
346
-3 900
-
-5
-3 905
-500
-
-9
-92
-601
-
438
438
0
-
0
0
483
483
-2 000
-
-6
-2 006
-2 450
-
-14
0
-2 464
12
278
290
0
16
27
43
346
346
-3 900
-14
-5
-3 919
-500
-5
-9
-92
-605
14
438
452
0
14
0
14
483
483
-2 000
-12
-6
-2 018
-2 450
-21
-14
0
-2 485
12
278
290
0
16
27
43
346
346
-3 900
-14
-5
-3 919
-500
-5
-9
-92
-605
14
438
452
0
14
0
14
483
483
-2 000
-12
-6
-2 018
-2 450
-21
-14
0
-2 485
-
2 015
-
2 005
2
2 015
1
2 005
2
2 015
1
2 005
513
291
-
-
550
299
550
299
-
-68
445
-
-2 496
-2 259
-2 496
-2 259
-2 496
-2 259
-115
176
-
-
-481
-254
-70
1
-147
-101
-70
1
-147
-101
443
170
-4 336
-3 803
-3 845
-3 655
-3 845
-3 655
*Refers to instruments compulsorily valued at fair value in accordance with IFRS 9.
70
Holmen Annual Report 2020
Notes
Note 14
Parent company
Financial instruments included in
net financial debt
Non-current financial receivables
Derivatives
Receivables from Group companies
Other financial receivables
Current financial receivables
Accrued interest
Derivatives
Other financial receivables
Cash and cash equivalents
Bank balances
Non-current liabilities
Bonds
Liabilities to Group companies
Derivatives
Current liabilities
Commercial paper programme
Derivatives
Accrued interest
Liabilities to Group companies
Other current liabilities
Financial instruments not included
in net financial debt
Other shares and participations
Trade receivables
Derivatives (recognised among
operating receivables)
Trade payables
Derivatives (recognised among
operating liabilities)
Total financial instruments
Recognised at
fair value through
profit/loss*
Hedging
instruments
Recognised at
amortised cost
Total
book value
Fair value
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
-
-
-
-
-
16
-
16
-
-
-
-
-
-
-
-5
-
-
-
-5
0
-
38
-
-3
35
46
-
-
-
-
-
14
-
14
-
-
-
-
-
-
-
-13
-
-
-
-13
0
-
8
-
-32
-24
-23
12
-
-
12
-
-
-
-
-
-
-
-
-14
-14
-
-
-
-
-
-
-
-
14
-
-
14
-
-
-
-
-
-
-
-
-12
-12
-
-8
-
-
-
-8
-
-
-
3 180
275
3 455
0
-
27
27
236
236
-3 900
-169
-
-4 069
-500
-
-9
-
0
-509
-
1 948
435
2 384
0
-
0
0
403
403
-2 000
-468
-
-2 468
-2 450
-
-14
-8
0
-2 472
12
3 180
275
3 467
0
16
27
43
236
236
-3 900
-169
-14
-4 083
-500
-5
-9
-
0
-514
14
1 948
435
2 397
0
14
0
14
403
403
-2 000
-468
-12
-2 480
-2 450
-21
-14
-8
0
-2 493
12
3 180
275
3 467
0
16
27
43
236
236
-3 900
-169
-14
-4 083
-500
-5
-9
-
0
-514
14
1 948
435
2 397
0
14
0
14
403
403
-2 000
-468
-12
-2 480
-2 450
-21
-14
-8
0
-2 493
-
1 487
-
1 749
0
1 487
0
1 749
0
1 487
0
1 749
515
293
-
-
553
301
553
301
-
-68
447
-
-1 970
-2 150
-1 970
-2 150
-1 970
-2 150
-118
175
-
-
-483
-400
-71
-1
-150
-249
-71
-1
-150
-249
444
169
-1 344
-2 553
-853
-2 407
-853
-2 407
*Refers to instruments compulsorily valued at fair value in accordance with IFRS 9.
Holmen Annual Report 2020
71
Notes
Notes 15–17
Note 15. Inventories
Note 17. Equity, parent company
Felling rights
Logs and pulpwood
Raw materials and consumables
Finished products and work in
progress
Electricity certificates and
emission allowances
Total
Group
Parent company
2020
2019
2020
2019
558
369
916
600
306
890
450
331
689
592
287
675
1 728
1 617
1 176
1 266
23
47
14
47
3 594
3 460
2 659
2 867
During the year impairment losses and reversal of previous impairment losses
for finished stock had an effect of SEK 12 million (-36) on Group profit, while
impairment losses on other stock had an effect of SEK -6 million (-13). Impairment
losses and reversal of previous impairment losses for finished stock had an effect
of SEK 5 million (-24) on the parent company, with impairment losses on other
stock of SEK -3 million (-11).
Note 16. Operating receivables
Trade receivables
Group companies
Associates
Other
Total trade receivables
Current receivables
Derivatives
Prepayments and accrued income
Total other operating receivables
Group
Parent company
2020
2019
2020
2019
-
33
1 982
2 015
446
550
266
1 262
-
44
1 961
2 005
267
299
232
799
14
33
1 440
1 487
298
553
104
955
102
44
1 604
1 749
221
301
92
614
Total operating receivables
3 278
2 804
2 442
2 364
Trade receivables are recognised at the amount expected to be received, based on
an individual assessment of each customer. The Group’s trade receivables mainly
consist of receivables from European customers. Trade receivables denominated
in foreign currencies were valued at the balance sheet date. Contract assets
attributable to goods delivered but not yet invoiced that are not included in the item
‘Trade receivables’ amounted to SEK 36 million (23). The provision for expected
credit losses was SEK 45 million (32) at 31 December 2020. During the year, the
provision decreased by SEK 16 million (-3) as a result of actual credit losses,
and increased by SEK 31 million (-1) as a result of changes in the provision for
anticipated or expected credit losses. At 31 December 2020, SEK 58 million (13) of
trade receivables were past due for more than 30 days. The credit quality of trade
receivables that are neither past due nor impaired is deemed to be good and on a
par with previous years.
The fair values of derivatives relate to hedges of future cash flows.
Registered share capital
Number Quotient value
31 Dec 2020
Class A
Class B
Total no. of shares
Holding of repurchased
class B shares
Total number of shares
outstanding
45 246 468
117 265 856
162 512 324
-586 639
161 925 685
26
26
Registered share capital
Number Quotient value
31 Dec 2019
Class A
Class B
Total no. of shares
Holding of repurchased
class B shares
Total number of shares
outstanding
45 246 468
124 265 856
169 512 324
-7 586 639
161 925 685
25
25
SEKm
1 180
3 058
4 238
SEKm
1 131
3 107
4 238
The company’s share capital consists of shares issued in two classes: class A, each
of which carries 10 votes, and class B, each of which carries one vote. In other
respects, there are no restrictions between classes of shares.
In 2020, 7 000 000 class B treasury shares that the company had previously
repurchased were cancelled. After cancellation Holmen holds 586 639 class B
shares in treasury. In conjunction with the cancellation of treasury shares a bonus
issue was carried out to restore share capital. Assets and liabilities measured at fair
value according to Chapter 4 Section 14a of the Swedish Annual Accounts Act had
an impact of SEK 490 million (146) on parent company equity. In the consolidated
accounts, valuation of derivatives and other financial instruments had an impact of
SEK 491 million (148) on equity.
Decisions on dividends are based on an appraisal of the Group’s profitability, future
investment plans and financial position. The objective is to maintain a strong
financial position and for the Group’s net financial debt as a percentage of equity
not to exceed 25 per cent.
The AGM has at its disposal the company’s earnings amounting to SEK 6 313 587 411.
The Board proposes that the AGM to be held on 22 April 2021 approve a dividend
of SEK 7.25 per share and an extra dividend of SEK 3.50 per share. The proposed
dividend totals SEK 1 741 million. The Board also proposes that the remaining
amount of SEK 4 572 886 297 be carried forward.
In the preceding year, the dividend paid was SEK 3.50 per share (SEK 567 million).
Net financial debt as a percentage of equity was 10 per cent (9).
Neither the parent company nor any of the subsidiaries are subject to external
capital requirements. For further details about the Group’s capital management
and risk management, see pages 41–45.
72
Holmen Annual Report 2020
Notes
Note 18. Pension provisions
Holmen provides defined benefit pension plans for some office-based employees
in Sweden. Most of these commitments are secured by means of insurance
policies with Alecta. As Alecta cannot provide sufficient information to permit
the ITP plan to be stated in the accounts as a defined benefit plan, it is stated
in accordance with statement UFR 10 of the Swedish Financial Reporting Board
as a defined contribution plan. Some defined benefit obligations over and above
the ITP plan are available for Group management and secured by means of a
pension fund. Occupational pensions for other office-based employees and all
collective agreement workers in Sweden are defined contribution plans. There
are two defined benefit plans in the UK that have been closed to new pension
accruals since 2015. These obligations are recognised in the consolidated
accounts as defined benefit plans in accordance with IAS 19.
Cost recognised in profit/loss for
the year
Defined benefit plans
Personnel costs*
Financial income and costs
Total defined benefit plans stated
in profit/loss for the year
Defined contribution plans
Personnel costs
Total recognised in profit/loss for
the year
Group
Parent company
2020
2019
2020
2019
-11
2
-9
-7
0
-7
-15
0
-15
10
0
10
-136
-129
-101
-101
-146
-136
-116
-92
*SEK -9 million (17) is included in the parent company relating to an item that is
recognised in the Group as an actuarial revaluation in other comprehensive income.
Group
Cost recognised in other comprehensive income
2020
2019
Return on plan assets excl. recognised interest income
Actuarial gains and losses from changes in
demographic assumptions
Actuarial gains and losses from changes in financial
assumptions
Actuarial gains and losses from experiential
adjustments
Payroll tax
Effect of asset ceiling
Total recognised in other comprehensive income
77
30
240
45
-208
-205
88
-1
-1
-15
6
2
-73
14
The change in the defined benefit obligations and the change in plan assets are
specified in the tables below. Some 90 per cent of the obligations relate to the
pension plans in the UK. The obligations arising out of the pension schemes in the UK
are placed in two trusts. These are governed by boards consisting of representatives
from Holmen and the beneficiaries. Holmen’s UK subsidiaries have commitments
to cover any deficits that exist. The assets in one trust exceed the commitment by
SEK 118 million. This surplus has not been recognised as there are no offset rights.
This adjustment is referred to as an asset ceiling in tables. The other trust has a
deficit of SEK 24 million which will be covered over the next five years.
Obligations
Obligations at 1 January
Current service cost
Payroll tax
Interest expense
Actuarial gains/losses
Benefits paid
Exchange differences
Obligations at 31 December
Group
Parent company
2020
2019
2020
2019
-2 305 -2 063
-7
-2
-57
-154
121
-145
-11
1
-42
-90
93
192
-2 161 -2 305
-176
-15
-
-2
-
12
-
-182
-176
10
-
-20
-
10
-
-176
The weighted average duration is 16 years.
Of the Group’s total obligations, SEK 8 million (7) refers to those that are not
funded, while the rest are wholly or partially funded obligations. Of the parent
company’s obligations, SEK 4 million (0) are secured under the Swedish Pension
Obligations Vesting Act.
Note 18
Plan assets
Fair value of assets at 1 January
Interest income
Expected return excl. recognised
interest income
Real return (parent company)
Administrative expenses
Contribution by employer
Benefits paid
Exchange differences
Fair value of assets at 31 December
Effect of asset ceiling
Pension provisions, net
Plan assets by type are as shown below:
Plan assets
Equities
Bonds
Current fixed income investments
Group
Parent company
2020
2 388
44
77
-
-1
6
-81
-201
2 231
-118
-48
2019
2 053
57
240
-
-2
4
-111
148
2 388
-130
-46
2020
2019
176
-
-
2
-
-
-
-
178
-
-4
156
-
-
20
-
-
-
-
176
-
0
Group
Parent company
2020
1 119
1 093
19
2 231
2019
1 201
1 160
27
2 388
2020
2019
81
92
4
82
92
0
178
174
The plan assets do not include any financial instruments issued by Group compa-
nies or assets used by the Group. Of equities, 38 per cent relate to the UK, 57 per
cent to the rest of Europe and the US and 5 per cent to the rest of the world. Of
bonds, 42 per cent relate to government bonds and 58 per cent to corporate bonds.
Key actuarial assumptions, Group
(weighted average), %
31 Dec 2020 31 Dec 2019
UK
Discount rate
Rate of salary increase
Rate of price inflation
1.3
-
3.1
Sweden
2.0
-
3.0
Key actuarial assumptions, Group, %
31 Dec 2020 31 Dec 2019
Discount rate
Rate of salary increase
Rate of price inflation
0.9
2.8
1.8
1.3
3.0
2.0
The discount rate for pension obligations have been established based on high-
quality corporate bonds in the relevant currency and country of the commitment, i.e.
mainly the UK. A discount rate of 0.3 per cent (0.7) and salary levels at the balance
sheet date were used for calculating the amount of the parent company’s pension
obligation. The table below shows how the obligation would be affected in the
event of a change in key actuarial assumptions (- reduces debt, + increases debt).
Group
Sensitivity analysis
31 Dec 2020 31 Dec 2019
Discount rate (+ 0.5%)
Rate of salary increase (+ 0.5%)
Rate of price inflation (+ 0.5%)
Mortality (+ 1 year in life expectancy)
-151
2
112
113
-167
2
128
117
The Group’s payments into the funded defined benefit plans in 2021 are expected
to amount to SEK 5 million.
Multi-employer plans
The year’s premiums for pension insurance policies taken out with Alecta’s ITP
2 plan amounted to SEK 27 million (30) and are included among personnel costs
in the income statement. Holmen’s active members in the plan amounted to 665
people, which corresponds to 0.17 per cent of the plan’s active members. Premiums
to Alecta are expected to amount to SEK 36 million in 2021. Alecta’s surplus can
be allocated to policyholders and/or the persons insured. If Alecta’s collective
consolidation falls below 125 per cent or exceeds 150 per cent, measures will be
taken to create the conditions to ensure the level of consolidation returns to the
normal range. In the event of low consolidation, one measure may be to raise the
agreed price for new policy subscriptions and an increase in existing benefits. In
the event of high consolidation, one measure may be to introduce reductions in
premiums. At the end of 2020, Alecta’s collective consolidation level was 148 per
cent (148).
Holmen Annual Report 2020
73
Notes Notes 19–21
Note 19. Other provisions
Note 21. Collateral and contingent liabilities
Contingent liabilities
Guarantees on behalf of Group
companies
Other contingent liabilities
Total
Group
Parent company
2020
2019
2020
2019
-
67
67
-
96
96
210
55
265
60
83
143
Other contingent liabilities for the Group largely comprise guarantee undertakings
for third parties. Holmen has environmentally related contingent liabilities that
cannot currently be quantified but that could result in future costs.
Group
2020
2019
Book value at start of year
Business combination
Provisions during the year
Utilised during the year
Unutilised amount reversed during the year
Reclassification
Translation differences
Book value at end of year
Of which non-current portion of the provisions
Of which current portion of the provisions
Parent company
Book value at start of year
Provisions during the year
Utilised during the year
Unutilised amount reversed during the year
Book value at end of year
Of which non-current portion of the provisions
Of which current portion of the provisions
795
75
53
-158
-55
-55
-1
654
491
163
839
194
-231
-58
744
489
255
680
-
251
-124
-14
-
1
795
637
158
753
328
-230
-12
839
616
223
Other provisions mainly relate to uncertainties associated with obligations for en-
vironmental restoration, fixed price electricity supply contracts and restructuring
costs. SEK 263 million of these provisions are expected to be settled within three
years, while the remainder is expected to be settled over a longer time horizon.
Note 20. Operating liabilities
Trade payables
Group companies
Other
Total trade payables
Group
Parent company
2020
2019
2020
2019
-
2 496
2 496
-
2 259
2 259
22
1 948
1 970
34
2 116
2 150
Current liabilities
Associates
Other
Derivatives
Accruals and deferred income
4
242
70
920
4
217
147
663
Total other operating liabilities
1 235
1 030
3
208
71
516
799
3
185
150
530
868
Total operating liabilities
3 732
3 289
2 769
3 018
All trade payables are due for payment within one year.
Accruals and deferred income in the parent company principally consist of
personnel costs of SEK 218 million (199), discounts of SEK 82 million (74) and
goods and services delivered but not yet invoiced of SEK 38 million (61).
The fair values of derivatives relate to hedges of future cash flows. See Note 14.
74
Holmen Annual Report 2020
Notes Note 22
Note 22. Related parties
Of the parent company’s net sales of SEK 14 187 million (15 004), SEK 182 million
(109) relates to deliveries of goods to Group companies. The parent company’s
purchases of goods from Group companies amounted to SEK 134 million (145).
Parent company net sales also include income from the sale of silviculture services
to subsidiaries for an amount of SEK 427 million (386). SEK -2 178 million (-2 299)
of expenses for leasing of non-current assets from subsidiaries are recognised in
the parent company.
There are significant financial receivables and liabilities between the parent
company and its Swedish subsidiaries.
The parent company has a related party relationship with its subsidiaries
(see Note 23).
L E Lundbergföretagen AB is a major shareholder in Holmen (see pages 46–47).
Holmen rents office premises for SEK 6 million (6) from Fastighets AB L E Lundberg,
which is a group company within L E Lundbergföretagen AB. In 2020, Fredrik
Lundberg, who is CEO and principal shareholder in L E Lundbergföretagen, received
a fee of SEK 710 000 (710 000) as Board chairman of Holmen. Louise Lindh, who
is the CEO of Fastighets AB L E Lundberg and who is also a party related to Fredrik
Lundberg, received a Board fee of SEK 355 000 (355 000).
Partly owned wind power company Varsvik AB has loans amounting to
SEK 275 million (425).
Transactions with related parties are priced on market terms. The equity holdings
in associates that produce hydro and wind power entitle the Group to buy the
electricity produced at cost price in relation to the shareholding, which means that
the associate only earns a limited profit. Purchased electricity is sold to external
customers at market price, and the earnings are stated in the consolidated accounts
within the Renewable Energy business area.
Transactions with related parties
Group
Associates
Joint venture
Parent company
Subsidiaries
Associates
Joint venture
Sale of goods to
related parties
Purchase of goods
from related parties
Other (e.g. interest,
dividend)
Liability to
related parties
Receivable due from
related parties
2020
261
14
182
261
13
2019
368
3
109
368
3
2020
2019
2020
2019
2020
2019
56
-
134
56
-
42
-
145
42
-
0
11
296
0
11
0
13
160
0
12
4
3
192
3
-
6
-
514
3
-
2020
43
275
3 197
43
275
2019
54
425
2 053
54
425
See Note 4 for fees and remuneration paid to members of the Board.
Holmen Annual Report 2020
75
Notes Note 23
Note 23. Investments in Group companies
Accumulated acquisition costs
Value at start of year
Shareholder contributions and investments
Liquidations
Sales
Total
Accumulated impairment losses
Value at start of year
Impairment losses for the year
Liquidations
Total
Book value at end of year
Parent company
2020
2019
17 335 17 142
210
-
-17
853
-5 077
-
13 112 17 335
6 648
95
-5 077
1 666
6 655
-7
-
6 648
11 445 10 687
The parent company’s impairment losses on investments in Group companies are
stated in the income statement in the line item for ‘Profit/loss from investments in
Group companies’. During the year the Spanish company Holmen Suecia Holding
S.L. and its subsidiaries were liquidated.
Corporate
ID No.
Registered
office
Number of
holdings
Holding %*
Book value in the
parent company Holding %*
Book value in the
parent company
Parent company’s direct holdings
of investments in subsidiaries
Holmen Skog AB
Iggesund Paperboard AB
Holmen Paper AB
Holmen Timber AB
Holmen Energi AB
Holmens Bruk AB
Holmen Skog Mitt AB
Holmen Skog Syd AB
Holmen Sågverk AB
Holmen Vattenkraft AB
Iggesunds Bruk AB
Ljusnan Vattenkraft AB
Blåbergsliden Vind AB
Other Swedish Group companies
Total Swedish holdings
556220-0658
556088-5294
556005-6383
556099-0672
556524-8456
559165-6615
559165-6623
559165-6631
559165-6672
559165-6664
559165-6656
559165-6680
559138-5181
Holmen UK Ltd, UK
Holmen Paper Ltd**
Iggesund Paperboard (Workington) Ltd**
Holmen France S.A.S., France
Holmen GmbH, Germany
Holmen Suecia Holding S.L., Spain
Holmen Paper Madrid S.L.**
Iggesund Paperboard Asia Pte Ltd, Singapore
Holmen B.V., Netherlands
AS Holmen Mets, Estonia
Iggesund Paperboard Inc, USA
Iggesund Paperboard Asia (HK) Ltd, China
Other non-Swedish Group companies
Total non-Swedish holdings
Total
Örnsköldsvik
Hudiksvall
Norrköping
Hudiksvall
Örnsköldsvik
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Workington
London
Workington
Paris
Hamburg
Madrid
Madrid
Singapore
Amsterdam
Tallinn
Lyndhurst
Hong Kong
1 000
1 000
100
1 000
1 000
1 000
1 000
1 000
1 000
1 000
1 000
1 000
500
1 197 100
-
-
10 000
-
-
-
800 000
35
500
1 000
4 000 000
*The percentage of ownership corresponds to the percentage of votes for the total number of shares.
**Indirect holdings.
2020
2019
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
0
0
0
0
383
2 856
1 527
422
2 663
740
276
200
832
9 901
1 519
-
-
0
1
-
-
4
7
0
7
5
2
1 545
0
0
0
0
0
383
2 856
1 527
422
2 633
740
276
200
74
9 142
1 519
-
-
0
1
0
-
4
7
0
7
5
2
1 545
11 445
10 687
76
Holmen Annual Report 2020
Notes Notes 24–25
Note 24. Untaxed reserves
Parent company
Parent company
Accumulated depreciation
and amortisation in
excess of plan
Non-current intangible
assets
Property, plant and
equipment
31 Dec 2019 Appropriations 31 Dec 2020
-16
11
-5
3
5
8
-13
17
3
Group contributions received amounted to SEK 2 513 million (2 572) and Group
contributions paid amounted to SEK -1 million (-2). Total appropriations of profit
amounted to SEK 1 804 million (1 936).
Accumulated depreciation
and amortisation in
excess of plan
Tax allocation reserves
2015 fiscal year
2016 fiscal year
2017 fiscal year
2019 fiscal year
2020 fiscal year
Total
31 Dec 2019 Appropriations 31 Dec 2020
191
290
470
700
-
1 651
1 646
-
-
-
-
700
700
708
191
290
470
700
700
2 351
2 354
Note 25. Cash flow statement
Interest paid and dividends
received
Dividends received
Interest received
Interest paid
Total
Group
Parent company
2020
2019
2020
2019
-
11
-40
-29
-
13
-31
-18
284
24
-35
273
148
21
-31
139
The change in current liabilities mostly relates to borrowing within the Group’s
commercial paper programme. In 2020, a number of different short-term loans
totalling SEK 3 528 million (8 250) were raised within the Group’s commercial
paper programme, and SEK 5 478 million (7 751) was repaid. See Note 14 for a
breakdown of cash and cash equivalents.
Group
Bonds
Commercial paper
Other financial liabilities
Liabilities relating to
right-of-use assets
Pension liability
Financial liabilities*
2018
1 500
1 951
75
-
61
3 587
New
leases
-
-
-
281**
-
281
Cash
flow
500
499
-41
-100
-27
831
Currency
and market
revaluation
-
-
18
4
12
34
2019
2 000
2 450
52
184
46
4 733
Business
combinations
New
leases
-
-
173
34
-
207
-
-
-
163
-
163
Cash
flow
1 900
-1 950
-106
-99
-13
-268
Currency
and market
revaluation
-
-
7
5
15
27
2020
3 900
500
126
287
48
4 860
*Including pension liability and liabilities relating to right-of-use assets.
**SEK 205 million is attributable to the introduction of the new IFRS 16 Leases
accounting policy. The remainder relates to liabilities linked to right-of-use
agreements entered into in 2019.
2018 Cash flow
Currency
and market
revaluation
2019 Cash flow
Currency
and market
revaluation
Parent company
Bonds
Commercial paper
Liabilities to Group
companies
Other financial liabilities
Pension liability
Financial liabilities*
10 330
*Including pension liability.
1 500
1 951
6 791
68
20
500
499
-6 315
-39
-11
-5 367
-
-
-
18
-9
9
2 000
2 450
476
47
0
4 973
1 900
-1 950
-307
-26
-1
-384
2020
3 900
500
169
28
4
-
-
-
7
4
11
4 601
Holmen Annual Report 2020
77
Notes Notes 26–27
Note 26. Business combinations
Note 27. Critical accounting estimates and
On 1 October 2020 Holmen completed the acquisition of Martinsons, one of
Sweden’s leading players in sawn and engineered wood products. The preliminary
purchase price, which was paid on 1 October, was SEK 960 million for 100 per cent
of the shares. The final purchase price will be determined in 2021. Based on the
information available at the time of writing of this report, goodwill is recognised
at SEK 355 million and other intangible assets at SEK 140 million in conjunction
with the acquisition. Goodwill relates to the value of integrating Holmen’s own
forest with its own industry and other intangible assets relate to the value of the
wood supply business included in the acquisition. Recognised goodwill is not tax
deductible. The fair value of intangible assets other than goodwill are amortised
over seven years.
From the time of acquisition on 1 October 2020 until 31 December 2020, Martinsons
contributed SEK 344 million to the Group’s sales and SEK 21 million to the Group’s
profit after tax.
Martinsons consists of two sawmills in northern Sweden with processing of wood
products for Scandinavian wood construction, as well as a project operation for
construction of complete frames made of cross-laminated timber (CLT) and glulam
beams for purposes such as offices, sports centres and apartment buildings. After
current investments are completed, the larger sawmill, Bygdsiljum, will have the
capacity to produce 500 000 m3 of wood products annually, while the annual
production at Kroksjön is over 100 000 m3. Bygdsiljum also manufactures CLT and
glulam beams, while Kroksjön processes wood products through trimming, planing,
painting, treatment and finger jointing. Martinsons’ annual wood consumption is
1 million m3, which corresponds to Holmen’s annual harvest in northern Sweden.
The company has 470 employees, most of whom work in processing. The acquisition
will nearly double Holmen’s sales in Wood Products, while strengthening its position
in sustainable wood construction and increasing integration between forest and
industry.
Costs for the acquisition are recognised as other operating costs and amount to
SEK 14 million.
judgements
When preparing financial statements the company’s management is required
to make estimates and judgements that have an effect on the stated amounts.
The estimates and judgements that, in the view of the company’s management,
are of importance for the amounts stated in the annual accounts, and that are
at significant risk of being altered by future events and new information, mainly
include the following.
Forest assets
The book value of the Group’s forest assets at 31 Dec 2020 was SEK 43 202 million
(41 345), divided between SEK 14 538 million (13 366) for forest land and
SEK 28 663 million (27 979) for biological assets. A deferred tax liability of
SEK 8 840 million (8 442) has been recognised relating to the forest assets. The
valuation of the forest assets is based on detailed data about transactions and
pricing statistics published by different market operators. The valuation takes
account of where in the country the forest land is located and differences in
the forest in terms of the volume of standing timber and site quality. The book
value of the forest assets will be affected by changes in transaction prices for
forest properties and by how the volume of standing timber develops. The value
of the forest assets is allocated in the balance sheet to growing trees, which
are recognised as a biological asset, and forest land. How much of the value is
allocated to biological assets is established by calculating the present value
of expected future cash flows from growing trees based on estimates of future
harvest volumes, price and cost development and discount rate. See Note 7 and
Note 9 for further information.
Impairment testing of non-current assets
Non-current assets are tested for impairment annually. The calculations are based
on current market conditions. Changes in conditions may have an effect on the
estimated recoverable amount applied in connection with future impairment tests.
Pension obligations
The Group has benefit-based pension obligations measured at SEK 2 161 million
and SEK 2 231 million in plan assets set aside to cover such obligations. The value
of pension obligations is estimated on the basis of assumptions regarding discount
rates, inflation and demographic factors. These commitments are usually updated
annually, which affects the Group’s comprehensive income and the recognised
pension provision. See Note 18.
Other provisions
Obligations that may result in costs for Holmen are evaluated on an ongoing
basis to assess the need for a provision. Uncertainty in the assessment mainly
relates to the date and size of the future cost. The Group mainly has provisions for
uncertainty related to obligations for environmental restoration. See Note 19.
78
Holmen Annual Report 2020
Notes ProPosed aPProPriation
of Profits
Appropriation of profits
The following earnings of the parent company are at the disposal of the AGM:
Net profit for the 2020 financial year
Retained earnings
The Board of Directors proposes that the shareholders be paid
in part, an ordinary dividend of SEK 7.25 per share (161 925 685 shares),
and in part, an extra dividend of SEK 3.50 per share (161 925 685 shares)
and that the remaining amount be carried forward
The Board of Holmen AB has proposed that the 2021 AGM resolve in favour
of paying an ordinary dividend of SEK 7.25 per share, and an extra dividend of
SEK 3.50 per share, for a total of SEK 1 741 million. In the preceding year, the
dividend paid was SEK 3.50 per share. The proposal complies with the Board’s
policy, in that decisions on dividends are to be based on an appraisal of the Group’s
profitability, future investment plans and financial position.
The proposed dividend corresponds to 88 per cent of net profit for 2020 for the
Group and means that 4.1 per cent of equity in the Group at 31 December 2020 will
be paid out by way of dividend.
The Board has established that the Group should have a strong financial position,
with net financial debt not exceeding 25 per cent of equity. At 31 December 2020 it
amounted to 10 per cent. The proposed dividend would increase net debt to equity
by 5 percentage points.
Holmen AB’s equity at 31 December 2020 amounted to SEK 12 228 million, of
which non-restricted equity was SEK 6 314 million. Assets and liabilities measured
at fair value according to Chapter 4 Section 14a of the Swedish Annual Accounts
Act had an impact of SEK 490 million on equity. The Group’s equity at 31 December
2020 amounted to SEK 42 516 million. In accordance with IFRS, no distinction is
made at Group level between restricted and non-restricted equity.
The Board considers that payment of a dividend of the amount proposed is
justifiable in view of the demands made on the company and the Group by the
nature, extent and risks associated with the business in terms of the amount of
SEK
1 919 135 580
4 394 451 831
6 313 587 411
1 173 961 216
566 739 898
1 740 701 114
4 572 886 297
equity required, and taking into account the need for consolidation, liquidity and
financial position in other respects. The financial position will remain strong after
payment of the proposed dividend and is considered to be fully adequate to enable
the company to fulfil its obligations in both the short and the long term, as well as to
finance such investments as may be necessary.
The Board and CEO declare that the annual accounts were prepared in accordance
with generally accepted accounting principles in Sweden and the Group’s consoli-
dated accounts were prepared in accordance with the international accounting
standards referred to in Regulation (EC) No 1606/2002 of the European Parliament
and of the Council of 19 July 2002 on the application of international accounting
standards. The annual report and the Group’s consolidated accounts provide a
true and fair view of the performance and financial position of the parent company
and the Group. The administration report for the parent company and the Group
provides a true and fair view of the development of the operations, financial position
and performance of the Group and the parent company and also describes material
risks and uncertainties to which the parent company and the other companies in
the Group are exposed.
The annual accounts and the consolidated accounts were approved for publication
by the Board in its decision of 26 February 2021. The Group’s consolidated income
statement and balance sheet and the parent company’s income statement and
balance sheet will be presented for adoption at the AGM to be held on 22 April 2021.
Fredrik Lundberg
Chairman
Carl Bennet
Board member
Steewe Björklundh
Board member
Kenneth Johansson
Board member
Stockholm, 26 February 2021
Lars G Josefsson
Board member
Ulf Lundahl
Board member
Lars Josefsson
Board member
Alice Kempe
Board member
Louise Lindh
Board member
Henriette Zeuchner
Board member
Tommy Åsenbrygg
Board member
Henrik Sjölund
Board member and
Chief Executive Officer
Our audit report was submitted on 1 March 2021.
KPMG AB
Joakim Thilstedt
Authorised Public Accountant
Proposed appropriation of profits
Holmen Annual Report 2020
79
auditor’s report
To the general meeting of the shareholders of Holmen AB, corp. id 556001-3301
Report on the annual accounts and
consolidated accounts
Opinions
We have audited the annual accounts and consolidated accounts of Holmen
AB for the year 2020, except for pages 8–9 and 33–35 in the sustainability
report. The annual accounts and consolidated accounts of the company are
included on pages 2, 6–9, 14–15, 32–79 and 84 in this document.
In our opinion, the annual accounts have been prepared in accordance with
the Annual Accounts Act, and present fairly, in all material respects, the
financial position of the parent company as of 31 December 2020 and its
financial performance and cash flow for the year then ended in accord
ance with the Annual Accounts Act. The consolidated accounts have been
prepared in accordance with the Annual Accounts Act and present fairly, in
all material respects, the financial position of the Group as of 31 December
2020 and their financial performance and cash flow for the year then ended
in accordance with International Financial Reporting Standards (IFRS), as
adopted by the EU, and the Annual Accounts Act. Our opinions do not cover
pages 8–9 and 33–35 in the sustainability report.
A corporate governance statement has been prepared. The statutory
administration report and the corporate governance statement are
consistent with the other parts of the annual accounts and consolidated
accounts, and the corporate governance statement is in accordance with
the Annual Accounts Act.
We therefore recommend that the general meeting of shareholders adopts the
income statement and balance sheet for the parent company and the Group.
Our opinions in this report on the the annual accounts and consolidated
accounts are consistent with the content of the additional report that has
been submitted to the parent company’s audit committee in accordance
with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on
Auditing (ISA) and generally accepted auditing standards in Sweden. Our
responsibilities under those standards are further described in the Audi
tor’s Responsibilities section. We are independent of the parent company
and the Group in accordance with professional ethics for accountants in
Sweden and have otherwise fulfilled our ethical responsibilities in accord
ance with these requirements.This includes that, based on the best of
our knowledge and belief, no prohibited services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided to the audited com
pany or, where applicable, its parent company or its controlled companies
within the EU.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our professional
judgment, were of most significance in our audit of the annual accounts
and consolidated accounts of the current period. These matters were
addressed in the context of our audit of, and in forming our opinion
thereon, the annual accounts and consolidated accounts as a whole,
but we do not provide a separate opinion on these matters.
Valuation of forest assets
See disclosures 9 and 27 and accounting principles on page 56 in the annual account and consolidated accounts for detailed information and
description of the matter.
Description of key audit matter
Forest assets comprise of forest land and biological assets and have a
total carrying value on the Group’s balance sheet of SEK 43 201 million
as of 31 December 2020. This is made up of SEK 14 538 million forest
land and SEK 28 663 million biological assets.
The forest assets are valued at fair value, where the determination
of the fair value of the forest assets is based on transaction prices for
forest properties in those areas where the Group owns forest land,
considering the location of the forest land and differences in the nature
of the forest in terms of the volume of standing timber and site quality.
The fair value calculation of forest assets is both complex and com
prises judgements. There is a risk that the market transactions that
form the basis of the valuation do not accurately mirror the value of
the Group’s forest assets, which could significantly affect the carrying
value.
The total value of forest assets is subsequently allocated between
growing trees, which is recognised as a biological asset, and forest
land. The value which is allocated to biological assets is determined
by discounting estimating future cash flows from the growing trees to
present value. The valuation is performed internally and is calculated
using a combination of harvesting plans, future sales prices, cost
projections, inflation and discount rates.
Response in the audit
We have obtained and assessed the Group’s model for determining fair
value of forest assets. We have also made an independent calculation
of the value of forest assets based on the same model and under lying
base data. The frequency and number of transactions in the areas
where the Group owns forest land has been assessed. During our audit
we have also performed detailed sample testing by agreeing underly
ing transactions which form the basis of the Group’s valuation, regard
ing price and area to external supporting documentation. In connection
with this we have also evaluated the market operators from which
the Group uses data on completed transactions. We have moreover
inspected the external reference valuation which was carried out on
a portion of the Group’s forest assets.
Regarding the portion of the total fair value which is allocated to
biological assets, we have examined the valuation and underlying
documentation in order to assess whether the valuation is carried out
in accordance with an established valuation methodology.
Furthermore, we have had discussions with management and, through
evaluation of management’s written plans and documentation, we
have assessed the reasonableness of assumptions regarding volumes,
prices, costs and the discount rate used in the valuation model. We
have also performed sensitivity analysis to assess how changes in the
assumptions can affect the overall valuation.
We have also considered the completeness of the disclosures in the
Annual Report and assessed whether they show a true and fair view
of the new accounting principle which has been applied and are in line
with the assumptions that Group management have applied in their
valuation.
80
Holmen Annual Report 2020
Auditor’s Report
Other provisions
See disclosures 19 and 27 and accounting principles on page 58 in the annual account and consolidated accounts for detailed information and
description of the matter.
Description of key audit matter
The carrying value of the other provisions as of 31 December 2020
amounts to SEK 654 million (795) in the Group and SEK 744 million
(839) in the parent company. The other provisions include among other
obligations for environmental restoration, contractual commitments
regarding delivery of electricity at a fixed price and restructuring costs.
In the parent company there are also provisions for replanting after
harvest.
Provisions involve significant levels of judgement regarding uncertain
future outcomes, in particular relating to the amount and timing of the
final assessments. Changes to the underlying assumptions used to make
these provisions could significantly affect the reported result.
Other Information than the annual accounts and consolidated accounts
This document also contains other information than the annual accounts and
consolidated accounts and is found on pages 3–5, 10–13, 16–31 and 85–94.
The other information comprises also of the remuneration report which we
obtained prior to the date of this auditor’s report. The Board of Directors and
the Managing Director are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts does not
cover this other information and we do not express any form of assurance
conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated
accounts, our responsibility is to read the information identified above
and consider whether the information is materially inconsistent with the
annual accounts and consolidated accounts. In this procedure we also take
into account our knowledge otherwise obtained in the audit and assess
whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude
that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the
preparation of the annual accounts and consolidated accounts and that
they give a fair presentation in accordance with the Annual Accounts Act
and, concerning the consolidated accounts, in accordance with IFRS as
adopted by the EU. The Board of Directors and the Managing Director are
also responsible for such internal control as they determine is necessary to
enable the preparation of annual accounts and consolidated accounts that
are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts The Board of
Directors and the Managing Director are responsible for the assessment of
the company’s and the Group’s ability to continue as a going concern. They
disclose, as applicable, matters related to going concern and using the
going concern basis of accounting. The going concern basis of accounting
is however not applied if the Board of Directors and the Managing Director
intend to liquidate the company, to cease operations, or has no realistic
alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Director’s
responsibilities and tasks in general, among other things oversee the
company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the an
nual accounts and consolidated accounts as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinions. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with ISAs and generally accepted auditing standards in Sweden will always
detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual accounts and
con solidated accounts.
As part of an audit in accordance with ISAs, we exercise professional
Response in the audit
We have inspected the Group’s documentation of its provisions. We
have assessed management’s estimates and have had discussions with
management regarding their assumptions in each area to ensure that
the provisions are in line with the Group’s accounting principles and
with IFRS requirements.
We have also considered the completeness of the disclosures in the
Annual Report and assessed whether they are, in all material respects,
in agreement with IFRS requirements.
judgment and maintain professional scepticism throughout the audit. We
also:
• Identify and assess the risks of material misstatement of the annual
accounts and consolidated accounts, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for
our opinions. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the over
ride of internal control.
• Obtain an understanding of the company’s internal control relevant to
our audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasona
bleness of accounting estimates and related disclosures made by the Board
of Directors and the Managing Director.
• Conclude on the appropriateness of the Board of Directors’ and the Manag
ing Director’s, use of the going concern basis of accounting in preparing the
annual accounts and consolidated accounts. We also draw a conclusion,
based on the audit evidence obtained, as to whether any material uncer
tainty exists related to events or conditions that may cast significant doubt
on the company’s and the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the annual
accounts and consolidated accounts or, if such disclosures are inadequate,
to modify our opinion about the annual accounts and consolidated accounts.
Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause
a company and a Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the annual
accounts and consolidated accounts, including the disclosures, and wheth
er the annual accounts and consolidated accounts represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient and appropriate audit evidence regarding the financial
information of the entities or business activities within the Group to
express an opinion on the consolidated accounts. We are responsible for
the direction, supervision and performance of the Group audit. We remain
solely responsible for our opinions.
We must inform the Board of Directors of, among other matters, the
planned scope and timing of the audit. We must also inform of significant
audit findings during our audit, including any significant deficiencies in
internal control that we identified.
We must also provide the Board of Directors with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reason
ably be thought to bear on our independence, and where applicable, measures
that have been taken to eliminate the threats or related safeguards.
From the matters communicated with the Board of Directors, we determine
those matters that were of most significance in the audit of the annual
accounts and consolidated accounts, including the most important
Auditor’s Report
Holmen Annual Report 2020
81
assessed risks for material misstatement, and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or
regulation precludes disclosure about the matter.
Report on other legal and regulatory requirements
Opinions
In addition to our audit of the annual accounts and consolidated accounts,
we have also audited the administration of the Board of Directors and the
Managing Director of Holmen AB for the year 2020 and the proposed
appropriations of the company’s profit or loss.
We recommend to the general meeting of shareholders that the profit be
appropriated in accordance with the proposal in the statutory administra
tion report and that the members of the Board of Directors and the
Managing Director be discharged from liability for the financial year.
Basis for Opinions
We conducted the audit in accordance with generally accepted auditing
standards in Sweden. Our responsibilities under those standards are fur
ther described in the Auditor’s Responsibilities section. We are independ
ent of the parent company and the Group in accordance with professional
ethics for accountants in Sweden and have otherwise fulfilled our ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropriations of
the company’s profit or loss. At the proposal of a dividend, this includes an
assessment of whether the dividend is justifiable considering the require
ments which the company’s and the Group’s type of operations, size and
risks place on the size of the parent company’s and the Group’s equity,
consolidation requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s organization and
the administration of the company’s affairs. This includes among other
things continuous assessment of the company’s and the Group’s financial
situation and ensuring that the company’s organization is designed so that
the accounting, management of assets and the company’s financial affairs
otherwise are controlled in a reassuring manner.
The Managing Director shall manage the ongoing administration according
to the Board of Directors’ guidelines and instructions and among other
matters take measures that are necessary to fulfill the company’s account
ing in accordance with law and handle the management of assets in a
reassuring manner.
Directors or the Managing Director in any material respect:
• has undertaken any action or been guilty of any omission which can give
rise to liability to the company, or
• in any other way has acted in contravention of the Companies Act, the
Annual Accounts Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of the
company’s profit or loss, and thereby our opinion about this, is to assess
with reasonable degree of assurance whether the proposal is in accord
ance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with generally accepted auditing
standards in Sweden will always detect actions or omissions that can give
rise to liability to the company, or that the proposed appropriations of the
company’s profit or loss are not in accordance with the Companies Act.
As part of an audit in accordance with generally accepted auditing stand
ards in Sweden, we exercise professional judgment and maintain profes
sional scepticism throughout the audit. The examination of the administra
tion and the proposed appropriations of the company’s profit or loss is
based primarily on the audit of the accounts. Additional audit procedures
performed are based on our professional judgment with starting point in
risk and materiality. This means that we focus the examination on such
actions, areas and relationships that are material for the operations and
where deviations and violations would have particular importance for the
company’s situation. We examine and test decisions undertaken, support
for decisions, actions taken and other circumstances that are relevant to
our opinion concerning discharge from liability. As a basis for our opinion
on the Board of Directors’ proposed appropriations of the company’s profit
or loss we examined the Board of Directors’ reasoned statement and a
selection of supporting evidence in order to be able to assess whether
the proposal is in accordance with the Companies Act.
The auditor’s opinion regarding the statutory sustainability report
The Board of Directors is responsible for the sustainability report on pages
8–9, 32–35, 38–40 and 42–43, and that it is prepared in accordance with
the Annual Accounts Act.
Our examination has been conducted in accordance with FAR:s audit
ing standard RevR 12 The auditor’s opinion regarding the statutory
sustainability report. This means that our examination of the statutory
sustainability report is different and substantially less in scope than an
audit conducted in accordance with International Standards on Auditing
and generally accepted auditing standards in Sweden. We believe that the
examination has provided us with sufficient basis for our opinion.
A statutory sustainability report has been prepared.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby our
opinion about discharge from liability, is to obtain audit evidence to assess
with a reasonable degree of assurance whether any member of the Board of
KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of Holmen
AB by the general meeting of the shareholders on the 4 June 2020. KPMG
AB or auditors operating at KPMG AB have been the company’s auditor
since 1995.
Stockholm 1 March 2021
KPMG AB
Joakim Thilstedt
Authorized Public Accountant
82
Holmen Annual Report 2020
Auditor’s Report
review of sustainability
report
Holmen’s Sustainability Report, as defined on page 2 of Holmen’s Annual
Report 2020, has been subject to a limited review in accordance with ISAE
3000 Assurance engagements other than audits or reviews of historical
financial information.
A complete assurance report on the Sustainability Report is available at
holmen.com.
The assurance report contains the following conclusion:
Based on the limited assurance procedures we have performed,
nothing has come to our attention that causes us to believe that
the Sustainability Report is not prepared, in all material respects,
in accordance with the criteria defined by Group management.
Stockholm 1 March 2021
KPMG AB
Joakim Thilstedt
Authorized Public Accountant
Torbjörn Westman
Expert member of FAR
Review of Sustainability Report
Holmen Annual Report 2020
83
Board of directors
1. Fredrik Lundberg
5. Lars Josefsson
Employee representatives
Chairman. Djursholm. Born in 1951.
Member since 1988. M.Sc. in Engineer-
ing and M.Sc. in Economics. Tech. h.c.
and D. Econ. h.c. President and CEO of
L E Lundbergföretagen AB.
Other significant appointments:
Chairman of Hufvudstaden AB and
AB Industrivärden. Deputy Chairman
of Svenska Handelsbanken AB. Board
member of L E Lundbergföretagen AB
and Skanska AB.
Shareholding: 1 679 448 shares.
Shareholding of L E Lundbergföretagen:
55 244 000 shares.
2. Henrik Sjölund
Norrköping. Born in 1966.
Member since 2014. M.Sc. in International
Economics. President and CEO.
Other significant appointments:
Chairman of The Swedish Forest
Industries Federation and SKGS.
Board member of The Confederation
of Swedish Enterprise
Shareholding: 52 155 shares.
3. Carl Bennet
Gothenburg. Born in 1951.
Member since 2009. B.Sc. (Econ.), Ph.D.
h.c. (Med.), Ph.D. h.c. (Tech.) CEO of Carl
Bennet AB. Former President and CEO of
Getinge AB. Chairman of Elanders AB
and Lifco AB.
Other significant appointments:
Deputy Chairman of Arjo AB and
Getinge AB. Board member of
L E Lundberg företagen AB.
Shareholding: 200 000 shares.
4. Lars G Josefsson
Stockholm. Born in 1950.
Member since 2011. M.Sc. in
Engineering. Former President
and CEO of Vattenfall.
Other significant appointments:
Board member of Prorsum AG.
Member of Robert Bosch International
Advisory Committee and Hand in
Hand International. Member of The
Royal Swedish Academy of Engineering
Sciences, IVA.
Shareholding: 10 000 shares.
Norrköping. Born in 1953.
Member since 2016.
M.Sc. in Engineering.
Other significant appointments:
Chairman of TimeZynk.
Deputy Chairman of Vestas.
Board member of Ouman.
Shareholding: 7 000 shares.
6. Alice Kempe
Torshälla. Born in 1967.
Member since 2019. M.Sc. in Forestry.
Other significant appointments:
Chairwoman of the Kempe Foundations.
Board member of MoRe Research
Örnsköldsvik AB, SweTree Technologies
AB and Arevo AB.
Shareholding: 218 792 shares.
7. Louise Lindh
Stockholm. Born in 1979.
Member since 2010. M.Sc. in Economics.
CEO and Board member of Fastighets AB
L E Lundberg.
Other significant appointments:
Chairman of J2L Holding AB. Board
member of Hufvudstaden AB and
L E Lundbergföretagen AB.
Shareholding: 200 000 shares.
8. Ulf Lundahl
Lidingö. Born in 1952.
Member since 2004.
B.A. in Legal Science and B.Sc. (Econ).
Other significant appointments:
Chairman of Attendo AB, Fidelio Capital
AB, SHB Regionbank Stockholm and
Nordstjernan Kredit AB. Board member
of Indutrade AB.
Shareholding: 8 000 shares.
9. Henriette Zeuchner
Stockholm. Born in 1972.
Member since 2015.
M.Sc. in Economics and Bachelor of Laws.
CEO of Clear Channel Scandinavia.
Other significant appointments:
Board member of the NTM Group.
Shareholding: 1 600 shares.
10. Steewe Björklundh
Hudiksvall. Born in 1958.
Member since 1998.
Employee representative, LO.
11. Kenneth Johansson
Söderköping. Born in 1958.
Member since 2004.
Employee representative, LO.
Chairman of the Swedish Paper
Workers Union branch 53,
Holmen Paper Braviken.
12. Tommy Åsenbrygg
Skebobruk. Born in 1968.
Member since 2015.
Employee representative, PTK.
Deputy Chairman of Ledarna,
Hallsta Paper Mill.
Shareholding: 100 shares.
13. Per-Arne Berg
Forsa. Born in 1955.
Deputy member since 2015.
Employee representative, PTK.
Chairman of Unionen Club,
Holmen Iggesund.
14. Daniel Hägglund
Örnsköldsvik. Born in 1982.
Deputy member since 2014.
Employee representative, PTK.
15. Christer Johansson
Iggesund. Born in 1959.
Deputy member since 2017.
Employee representative, LO.
Chairman of the Swedish Paper
Workers Union branch 15.
Auditors: KPMG AB
Principle Auditor:
Joakim Thilstedt.
Authorised Public Accountant.
84
Holmen Annual Report 2020
Board of Directors
The information relates to personal and related party shareholdings at 31 December 2020.
1
4
7
10
13
2
5
8
11
14
3
6
9
12
15
Board of Directors
Holmen Annual Report 2020
85
Group manaGement
1
5
9
1. Henrik Sjölund
President and CEO
Born in 1966.
Joined Holmen in 1993.
Shareholding: 52 155 shares.
Henrik Sjölund has no signi
ficant shareholdings or owner-
ship in companies with which
the Group has important busi-
ness relations. Further infor-
mation is provided on page 84.
2. Anders Jernhall
Executive Vice President,
Chief Financial Officer
Born in 1970.
Joined Holmen in 1997.
Shareholding: 27 527 shares.
3. Sören Petersson
Senior Vice President Forest
Born in 1969.
Joined Holmen in 1994.
Shareholding: 16 200 shares.
2
6
3
7
4
8
10
11
12
4. Johan Nellbeck
Senior Vice President
Paperboard
Born in 1964.
Joined Holmen in 2019.
Shareholding: 4 000 shares.
7. Fredrik Nordqvist
Senior Vice President
Renewable Energy
Born in 1971.
Joined Holmen in 2011.
Shareholding: 800 shares.
10. Gunilla Rolander
Senior Vice President
Human Resources
Born in 1966.
Joined Holmen in 2013.
Shareholding: 4 398 shares.
5. Lars Lundin
Senior Vice President Paper
Born in 1966.
Joined Holmen in 2018.
Shareholding: 2 250 shares.
6. Johan Padel
Senior Vice President
Wood Products
Born in 1966.
Joined Holmen in 2014.
Shareholding: 1 200 shares.
8. Stina Sandell
Senior Vice President
Sustainability and
Communications
Born in 1966.
Joined Holmen in 2017.
Shareholding: 765 shares.
9. Nils Ringborg
Senior Vice President
International Affairs
Born in 1958.
Joined Holmen in 1988.
Shareholding: 8 200 shares.
11. Ola Schultz-Eklund
Senior Vice President
Technology
Born in 1961.
Joined Holmen in 1994.
Shareholding: 2 740 shares.
12. Henrik Andersson
Senior Vice President
Legal Affairs
Company Secretary.
Born in 1971.
Joined Holmen in 2008.
Shareholding: 3 782 shares.
The information relates to personal and related party shareholdings at 31 December 2020.
86
Holmen Annual Report 2020
Group management
Key fiGures
Holmen uses performance measures in its reporting in addition
to the measures defined within IFRS regulations, or directly in
the income statement and balance sheet, in order to illustrate the
company’s financial position and performance and to increase com-
parability between different periods and other companies. Below
are calculations used to arrive at the performance measures applied
within the Group. For further information, see also Definitions.
ESMA’s (European Securities And Markets Authority) ‘Guidelines
– Alternative Performance Measures’ are used. Alternative perfor
mance measures published in this report should not be regarded as
replacing the financial measures defined under IFRS regulations,
but rather as a complement and they do not need to be comparable
in the same way with defined performance measures published by
other companies.
Key figures, SEKm
2020
2019
2018
2017
2016
Operating profit, EBITDA and items affecting comparability
EBITDA
Depreciation/amortisation according to plan
Operating profit/loss excluding items affecting comparability
Items affecting comparability*
Operating profit
Profit/loss for the year and items affecting comparability
Profit/loss for the year excluding items affecting comparability
Items affecting comparability*
Profit/loss for the year
Operating margin
Operating profit/loss excluding items affecting comparability
Net sales
Operating margin, %
Capital employed
Equity
Net financial debt
Capital employed
Return on capital employed
Operating profit/loss excluding items affecting comparability
Average capital employed
Return, %
Return on equity
Profit/loss after tax excluding items affecting comparability
Average equity
Return, %
Net financial debt
Non-current financial liabilities
Non-current liabilities relating to right-of-use assets
Current financial liabilities
Current liabilities relating to right-of-use assets
Pension provisions
Non-current financial receivables
Current financial receivables
Cash and cash equivalents
Net financial debt
Debt/equity ratio
Net financial debt
Equity
Net debt as % of equity
Equity/assets ratio
Equity
Assets
Equity/assets ratio, %
*See page 88 for what items affecting comparability refers to.
3 651
-1 172
2 479
-
2 479
1 979
-
1 979
2 479
16 327
15.2
42 516
4 181
46 697
2 479
44 128
5.6
1 979
40 718
4.8
3 919
175
605
112
48
-290
-43
-346
4 181
4 181
42 516
10
42 516
62 543
68
3 486
-1 141
2 345
8 770
11 115
1 789
6 943
8 731
2 345
16 959
13.8
40 111
3 784
43 895
2 345
26 391
8.9
1 789
23 035
7.8
2 018
171
2 485
13
46
-451
-14
-483
3 784
3 784
40 111
9
40 111
59 340
68
3 488
-1 012
2 476
-94
2 382
2 341
-73
2 268
2 476
16 055
15.4
23 453
2 807
26 261
2 476
25 469
9.7
2 341
22 546
10.4
1 033
-
2 494
-
61
-468
-35
-278
2 807
2 807
23 453
12
23 453
36 912
64
3 157
-991
2 166
-
2 166
1 668
-
1 668
2 166
16 133
13.4
22 035
2 936
24 972
2 166
24 874
8.7
1 668
21 297
7.8
552
-
2 775
-
39
-42
-32
-356
2 936
2 936
22 035
13
22 035
34 891
63
3 179
-1 018
2 162
-232
1 930
1 652
-228
1 424
1 930
15 513
13.9
21 243
3 945
25 190
2 162
25 146
8.6
1 652
20 890
7.9
882
-
3 200
-
201
-39
-89
-210
3 945
3 945
21 243
19
21 243
34 891
61
Key figures
Holmen Annual Report 2020
87
2020 ↘
Ten-year review,
finance
SEKm
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Income statement
Net sales
Operating costs
Change in value of biological assets
Profit from investments in associates and joint ventures
16 055
16 327 16 959
18 656
-13 250 -13 961 -12 984 -13 379 -12 626 -13 348 -13 270 -13 919 -15 224 -15 501
-
84
350
47
425
-9
267
7
264
3
315
-22
487
0
282
-7
415
-12
579
-6
15 994
15 513
17 852
16 231
16 014
16 133
EBITDA
3 651
3 486
3 488
3 157
3 179
2 940
2 999
2 579
3 026
3 239
Depreciation and amortisation according to plan
-1 172
-1 141
-1 012
-991
-1 018
-1 240
-1 265
-1 370
-1 313
-1 260
Operating profit/loss excluding items affecting
comparability
2 479
2 345
2 476
2 166
2 162
1 700
1 734
1 209
1 713
1 980
Items affecting comparability*
-
8 770
-94
-
-232
-931
-450
-140
-193
3 593
2 479 11 115
2 382
2 166
1 930
769
1 284
1 069
1 520
5 573
Operating profit
Net financial items
Earnings before tax
Tax
Profit/loss for the year
Net sales
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group-wide costs and eliminations
Group
Operating profit
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group-wide costs and eliminations
-42
-34
-25
-53
-71
2 437 11 081
2 356
2 113
1 859
-458
-2 351
-89
-445
-436
1 979
8 731
2 268
1 668
1 424
5 883
6 187
4 879
2 222
378
-3 222
6 286
6 229
5 757
1 695
378
-3 385
5 944
5 785
5 571
1 747
319
-3 311
5 535
5 526
5 408
1 562
315
-2 214
5 302
5 252
5 431
1 342
314
-2 128
5 481
5 472
6 148
1 314
359
-2 760
-90
679
-120
559
3.4
-147
1 137
-230
907
5.4
5 641
5 113
6 247
1 352
389
-2 748
-198
871
-160
-227
-244
1 294
5 328
559
-1 374
711
1 853
3 955
4.3
11.1
23.6
5 694
4 618
7 148
1 175
450
-2 853
6 061
4 967
8 144
1 129
522
-2 972
6 348
5 109
8 631
875
552
-2 858
16 327 16 959 16 055 16 133 15 513 16 014 15 994 16 231 17 852 18 656
1 367
812
73
185
215
-174
1 172
435
509
62
336
-168
1 185
689
329
246
181
-154
1 069
764
288
80
135
-170
1 001
903
289
-3
120
-148
905
847
-74
9
176
-163
817
674
141
37
212
-146
924
433
-309
-75
371
-136
931
596
94
-130
355
-132
739
863
228
-136
406
-120
2 479
2 345
2 476
2 166
2 162
1 700
1 734
1 209
1 713
1 980
Diluted earnings per share, SEK**
12.2
52.6
13.5
9.9
8.5
Items affecting comparability*
-
8 770
-94
-
-232
-931
-450
-140
-193
3 593
Group
Cash flow
Earnings before tax
Adjustment items
Income tax paid
Changes in working capital
2 479 11 115
2 382
2 166
1 930
769
1 284
1 069
1 520
5 573
2 437 11 081
-8 208
-147
158
544
-569
46
2 356
540
-396
-214
2 113
418
-221
199
1 859
965
-504
-360
679
1 802
-398
443
1 137
1 448
-191
-217
871
1 056
210
-127
1 294
1 057
-434
338
5 328
-2 561
-557
-109
Cash flow from operating activities
2 457
2 884
2 286
2 509
1 961
2 526
2 176
2 011
2 254
2 101
Cash flow from investing activities***
-1 924 -1 050 -1 005
-644
-123
-824
-815
-872 -1 957 -1 791
Cash flow after investments
533
1 834
1 281
1 865
1 838
1 702
1 361
1 139
297
310
Dividend paid
Share buy-backs
-567
-
-1 134
-1 430
-1 092
-
-1 008
-
-882
-
-840
-
-756
-
-756
-
-672
-
-588
-
*Items affecting comparability:
2019: Revaluation of biological assets amounting to SEK 9 079 million, impairment loss by associates of SEK -109 million and provisions of SEK -200 million.
2018: Restructuring costs of SEK -94 million.
2016: Sale of the mill in Spain and insurance compensation of SEK -232 million for the reconstruction of Hallsta Paper Mill following a fire.
2015: Impairment loss on non-current assets, provision for costs and the effects of a fire totalling SEK -931 million.
2014: Impairment loss on non-current assets of SEK -450 million.
2013: Impairment loss on non-current assets and restructuring costs of SEK -140 million.
2012: Impairment loss on non-current assets and restructuring costs of SEK -193 million.
2011: Revaluation of forest amounting to SEK 3 593 million.
**Historical figures have been adjusted because of the share split (2:1) in 2018.
***Net after disposals and before changes in non-current financial receivables.
88
Holmen Annual Report 2020
Ten-year review, finance
SEKm
Balance sheet
Forest assets
Other non-current assets*
Current assets
Financial receivables
Total assets
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
For a ten-year review of data per share, see page 47.
43 202
11 784
6 878
679
41 345
10 781
6 264
950
18 701
10 586
6 845
781
17 971
10 780
5 710
430
17 595
11 106
5 852
338
17 340
12 184
5 607
325
17 032
13 189
5 964
249
16 654
13 998
5 774
327
16 344
14 320
6 005
377
15 871
14 463
6 642
240
62 543 59 340 36 912 34 891 34 891 35 456 36 434 36 753 37 046 37 217
Equity
Deferred tax liabilities
Financial liabilities and interest-bearing provisions
Operating liabilities
42 516
10 570
4 860
4 597
40 111
10 299
4 733
4 196
23 453
5 839
3 587
4 033
22 035
5 650
3 366
3 840
21 243
5 613
4 283
3 752
20 853
5 508
5 124
3 971
20 969
5 480
6 156
3 829
20 854
5 804
6 443
3 653
20 813
5 504
6 967
3 762
19 773
6 630
6 499
4 313
Total equity and liabilities
62 543 59 340 36 912 34 891 34 891 35 456 36 434 36 753 37 046 37 217
Capital employed
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group-wide and other**
Capital employed
Key figures
Operating margin, %**
Paperboard
Paper
Wood Products
Group
Return, capital employed, %**
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group
Return on equity, %**
Net debt as % of equity
Deliveries
Volume from own forest, ’000 m3
Paperboard, ’000 tonnes
Paper, ’000 tonnes
Wood products, ’000 m3
Own production of hydro and wind power, GWh
*Excluding non-current financial receivables.
**Excluding items affecting comparability.
34 230
5 276
1 969
1 846
3 351
24
32 718
5 589
1 903
1 000
3 058
-372
14 830
5 316
2 072
927
3 082
34
13 824
5 433
2 193
862
3 115
-455
13 536
5 546
2 507
859
3 153
-410
13 401
5 698
3 266
897
3 075
-684
13 212
5 841
4 366
874
3 118
-535
12 688 12 657
5 489
4 920
1 385
2 947
5
5 686
4 438
1 327
3 005
-173
11 599
4 233
5 798
1 471
2 884
47
46 697 43 895 26 261 24 972 25 190 25 653 26 876 26 970 27 403 26 032
13
2
8
15
4
15
4
17
7
6
5
10
7
9
4
14
8
8
24
6
11
9
8
9
12
6
14
15
8
12
15
27
6
10
10
12
14
5
5
13
8
14
12
9
4
9
8
13
17
5
0
14
7
16
10
0
4
9
8
19
15
-1
1
11
7
15
neg
1
6
6
7
23
13
2
3
11
6
12
3
3
7
6
6
28
9
-4
-6
7
7
8
neg
neg
13
4
4
29
12
1
-12
10
8
12
2
neg
12
7
6
32
17
3
-16
11
8
23
4
neg
14
9
8
32
2 841
544
883
1 052
1 352
2 699
538
996
879
1 109
2 816
525
1 036
828
1 145
2 883
526
1 117
852
1 169
2 945
497
1 134
776
1 080
3 132
499
1 325
730
1 441
3 207
493
1 305
725
1 113
3 361
469
1 574
686
1 041
3 085
485
1 651
660
1 353
2 850
474
1 668
487
1 235
Ten-year review, finance
Holmen Annual Report 2020
89
2020 ↘
five-year review,
sustainabiliTy
The environmental and employee data provided is the most relevant
information with regard to regulatory requirements and internal
monitoring. The key performance indicators provided are widely
used in the industry.
Data from all parts of the Group is collected, quality-assured
and evaluated. 1 October saw the acquisition of Martinsons with
its two sawmills, the figures for which have been included in the
report for the fourth quarter of 2020. No material changes have
otherwise been made to the principles of reporting. Holmen reports
its environmental data to the supervisory authorities monthly and
annually. Reporting to Swedish authorities is made available to
the public under the principle of public access to documents. Data
from all the mills is reported to the EU annually. Expenditure on
environmental protection is reported in accordance with guidelines
from Statistics Sweden. As some of the details provided in this
report had already been collected by the end of the year they refer
to, they might differ slightly from the information finally reported to
the authorities.
2020 2019 2018 2017 2016
615 GWh.
1) Bio-based electricity production accounted for
Production
Paperboard, ’000 tonnes
Market pulp, ’000 tonnes
Paper, ’000 tonnes
Wood products, ’000 m3
Own production of hydro and wind power, GWh
Electricity production at the mills, GWh
Raw materials
Wood, million m3sub2)
Purchased pulp, ’000 tonnes
Thermal energy, GWh
Electrical energy, GWh
Water use, million m3,5)
Plastic granules/foiling material, ’000 tonnes
Chemicals, ’000 tonnes6)
Filler, pigment, ’000 tonnes6)
Emissions to air, tonnes7)
Sulphur dioxide (counted as sulphur, S)
Nitrogen oxides
Particulates
Fossil carbon dioxide, ’000 tonnes
Biogenic carbon dioxide, ’000 tonnes
Emissions to water, tonnes7)
AOX (chlorinated organic matter)
Nitrogen
Phosphorus
COD (organic matter), ’000 tonnes
Suspended solids (SS), ’000 tonnes
By-products, ’000 tonnes
To energy production, internally/externally
Utilised or for recovery8)
Tall oil9)
Waste, ’000 tonnes
Hazardous10)
Sent to landfill (wet)
Energy supplies
Branches, treetops and peat, GWh11)
Electrical and thermal energy, GWh12)
Environmental protection expenditure,
SEKm
Investments (remedial and preventive)13)
Electricity and heat-saving investments
Environmental taxes and charges14)
Internal and external environmental expenses15)
Environmental cost of forestry16)
551
84
891
1 021
1 352
6211)
5.62
78
5 8853)
3 5084)
69
2.8
147
156
64
902
33
63
1 545
38
210
19
20
3.5
937
252
16
2.3
4.9
115
351
428
18
10
174
80
532
79
975
877
1 109
669
5.49
78
5 992
3 720
70
3.2
181
160
59
888
28
68
1 585
44
174
14
21
2.9
949
208
10
2.5
0.9
101
372
310
20
14
182
65
538
66
1 069
873
1 145
679
5.62
78
6 238
3 996
73
2.9
165
164
56
986
45
75
1 660
48
216
16
22
3.5
977
166
13
1.6
7.6
137
370
84
10
12
165
91
530
54
1 268
827
1 169
621
5.63
79
6 099
3 987
73
2.9
147
146
48
907
30
73
1 545
48
177
14
20
2.8
995
202
14
1.8
1.8
116
366
44
20
12
137
62
503
56
1 317
776
1 080
784
5.36
70
6 375
3 949
70
2.6
151
148
41
960
39
124
1 540
52
208
14
20
3.2
872
270
13
2.2
16.0
155
380
55
8
14
182
71
90
Holmen Annual Report 2020
Five-year review, sustainability
2) At Group level, wood consumption is computed net,
taking into account internal deliveries of chips from
the sawmills to the nearby mills.
3) Of which 4 644 GWh from production at mills
from recovered liquors, bark and wood residues,
949 GWh from the TMP process at Braviken Paper
Mill, Hallsta Paper Mill and Workington Mill. The
process generates thermal energy that is recovered
and used in production. 292 GWh comes from
natural gas, oil and purchased thermal energy.
4) 1 286 GWh renewable electricity, 2 222 GWh
fossil-free electricity. Emissions of fossil carbon
dioxide from production of purchased electricity
totalled 493 tonnes.
5) Almost 100 per cent use of surface water from
lakes and watercourses.
6) Stated as 100 per cent active substance. Total
quantity of commodities was 214 000 tonnes
for chemicals and 220 000 tonnes for filler
and pigment. In total, 207 tonnes of chemicals
were used at three of the sawmills for protective
treatment of the wood products.
7) Relates to emissions at facilities. Emissions of
methane and natural gas at the facilities amounted
to 16 000 tonnes of carbon dioxide equivalents.
8) By-products used, for example, as filling material,
construction material or for the production of soil
products.
9) For delivery to the chemical industry.
10) Hazardous waste is dealt with by authorised col-
lection and recovery contractors. Certain fractions
of the waste are recovered. In 2020, Holmen dealt
with oil-containing waste from vessels that docked
at two of its own ports. Such waste is included in
the figures for hazardous waste. The amount of this
oil-containing waste totalled 456 tonnes in 2020.
11) Branches and treetops (39 GWh) and peat (76 GWh)
delivered from Holmen’s land to external energy
producers.
12) For 2020: 114 GWh of electrical energy supplied from
Workington Mill to the local community. 226 GWh
of thermal energy from Iggesund Mill and Braviken
Paper Mill to Iggesund Sawmill and Braviken Saw-
mill. A total of 11 GWh thermal energy from Hallsta
Paper Mill and Iggesund Mill was supplied to the
district heating network of the local communities.
13) The stated amount includes costs for internal
process measures and water treatment measures,
plus the cost of erecting wind turbines.
14) The stated amount includes costs for waste mana-
gement, energy tax charged in Sweden on the use
of fossil fuels, nitrogen oxide tax and inspection
charges. Two environmental incidents led to corpo-
rate fines totalling SEK 0.1 million.
15) Includes costs of environmental personnel, opera-
tion of treatment equipment, waste management,
management systems, environmental training,
applications for permits, environmental consultants
and the costs of inquiries and measures in connec-
tion with discontinued operations.
16) The environmental cost of forestry is calculated as the
value of the wood that is not harvested for environ-
mental reasons. The annual loss of income in 2020
is estimated at around SEK 80 million. The figures
for the years 2016–2019 are based on calculations
for each year. The figures for 2020 are calculated
as an average value for the past three years.
1) Employee data for former Martinsons
employees is included for the fourth quarter
of 2020.
2) See page 62, Note 4.
3) Relates to permanent employees.
4) No industrial accidents with a fatal outcome
occurred during the year.
5) Relates to permanent and temporary employees.
6) All Swedish units have collective agreements.
At foreign units, Holmen supports other forms
of collective employee engagement in line with
local standards.
7) Holmen accepts its responsibility to society
and pays its taxes in line with the legislation
and rules in force in all the countries in
which we operate. Holmen’s financial policy
and guidelines state that Holmen must be
transparent in its tax-related deliberations,
with a focus on commercial considerations
and no transactions whose main purpose is
tax planning. Holmen must also not accept,
support or facilitate any tax violations by third
parties.
8) Board’s dividend proposal.
Employees1)
Employees
Average no. of employees (FTE)2)
of whom women, %
of whom temporary employees, %
Average age3)
Sickness absence, %
Total
of which longer than 60 days
2020 2019 2018 2017 2016
2 974
20.0
8.4
44.3
2 915
20.0
11.1
44.4
2 955
20.3
10.7
44.9
2 976
19.3
7.4
46.0
2 989
19.3
8.8
46.3
4.3
1.7
3.8
1.6
4.1
1.6
4.2
2.0
4.2
2.0
Gender equality, %3)
Women managers out of total number of managers
Women joining the company out of total new employees
22.7
35.5
22.9
39.5
19.8
40.1
20.7
25.0
19.0
27.0
Personnel turnover, %3)
Personnel turnover
of which given notice
of which retiring
of which leaving at own request
New employees
Number of industrial accidents 4)
Industrial accidents, more than 8 hours of absence,
per million hours worked
Union cooperation, %5)
Percentage of employees that work at a unit with a
collective agreement6)
Employees
Lenders
Society 7)
Income statement per stakeholder category, SEKm
Customers
Suppliers
Sales of products, wood and electricity
Purchases of products, services,
along with depreciation, etc.
Wages and social security costs
Interest
Property tax
Excise tax
Social security costs
Payroll tax
Corporation tax
Shareholders Net profit
Dividend
7.3
0.6
3.1
3.0
2.6
7.9
0.9
2.2
4.4
2.5
7.9
0.4
2.6
3.9
2.7
8.0
0.9
2.6
4.4
5.9
6.9
1.6
2.4
2.9
5.4
4.3
5.7
4.9
5.1
8.8
94
93
94
94
94
17 666
18 329
17 339
17 269
17 072
-12 734
-1 891
-42
-42
-31
-481
-39
-427
1 979
1 7418)
-4 817 -12 539 -12 719 -12 721
-1 786
-1 819
-71
-34
-126
-55
-26
-27
-448
-472
-34
-25
-436
-2 351
1 424
8 731
1 008
567
-1 767
-53
-101
-31
-449
-36
-445
1 668
1 092
-1 792
-25
-82
-30
-479
-35
-89
2 268
1 134
Greenhouse gas emissions Scope 1, 2, 3 tonnes CO2e
Ecovadis gives Holmen top sustainability rating
In 2020, all of Holmen’s paperboard and paper mills were
awarded a Platinum rating by the international analysis firm
Ecovadis, putting Holmen’s mills in the absolute top flight of
rated companies. Ecovadis assesses how companies work on the
environment, sustainable purchasing, ethics, workers’ rights and
human rights.
Scope 1: From production facilities and nurseries1)
Scope 2: From purchased electricity2)
Scope 3: From Holmen’s value chain3)
Forestry4)
Input goods
Transport of fuel to biofuel boiler in Workington
Transport of raw materials and products5)
Total
79
0
25
67
11
195
377
1) Emissions from the production facilities are included in the EU’s system for
emissions trading.
2) Emissions of greenhouse gases from production of purchased electricity amounted
to 493 tonnes CO2e (rounded down to 0 Ktonnes). This follows a market-based
methodology, with EPD from Vattenfall AB as the source. Calculated using a
location-based methodology, with the European Environment Agency as the
source, the emissions are 27 197 tonnes CO2e.
3) Emissions from the production of machinery, vehicles, buildings etc, and travel for
work and business are not included.
4) Forestry in own forest.
5) Fuel combustion during transport, using calculation method: “Tank-to-wheel”.
Five-year review, sustainability
Holmen Annual Report 2020
91
Business overview ↘
Holmen 2020
Holmen gives quality-conscious customers
across the world access to renewable
products from the Swedish forests.
Holmen’s forests,
power plants &
industrial sites
Forest holdings
1.3 million hectares total land acreage
1 million hectares productive forest land
92
Holmen Annual Report 2020
Business overview
Kroksjön Sawmill
Bygdsiljum Sawmill
Umeälven
Harrsele
Tuggen
Gideälven
Stennäs
Gammelbyforsen
Björna
Gideå
Gidböle
Gideåbacka
Faxälven
Linnvasselv
Junsterforsen
Gäddede
Bågede
Strömsbruk
Strömsbruk Converting Plant
Iggesundsån
Pappersfallet
Iggesund Power Station
Iggesund
Iggesund Mill
Iggesund Sawmill
Ljusnan
Sveg
Byaforsen
Krokströmmen
Långströmmen
Ljusne Strömmar
Hallstavik
Hallsta Paper Mill
Varsvik Wind Farm
Stockholm
Head Office
Norrköping
Braviken Paper Mill
Braviken Sawmill
Linghem Sawmill
Motala Ström
Holmen
Bergsbron-Havet
UK
Workington Mill
Forest holdings
Holmen’s forests 2020
Total land acreage
Total forest land acreage*
– of which nature conservation areas
Productive forest land**
Total volume of standing timber
on productive forest land
Production facilities
1 303 000 ha
1 153 000 ha
195 000 ha
1 043 000 ha
Iggesund Mill
Products: Multi-layered paperboard made
from bleached chemical pulp (SBB).
Brand: Invercote.
Raw material: Softwood and hardwood
pulpwood.
124 million m3 growing stock, solid over bark
* Analysis performed by the Swedish National Forest Inventory, according to the international definition of forest land:
Land area >0.5 hectares with a tree canopy cover of more than 10 per cent for trees capable of reaching a height of
at least 5 metres at maturity.
** Forest land that can produce 1 m3 growing stock, solid over bark per hectare and year (on average during the growth
period of the forest stand).
Power plants
Hydro power plant
%1)
GWh2) Built in
Workington Mill
Products: Multi-layered paperboard,
surface layer of chemical pulp, core of
mechanical pulp (FBB).
Brand: Incada.
Raw material: Spruce pulpwood and
purchased sulphate pulp.
Strömsbruk Converting Plant
Products: Converted paperboard
products for the packaging of cosmetics,
confectionery, food, etc.
Braviken Paper Mill
Products: Paper for books, magazines,
advertising and newspapers.
Raw material: Spruce pulpwood.
Hallsta Paper Mill
Products: Paper for books, magazines
and advertising.
Raw material: Spruce pulpwood.
Braviken Sawmill
Products: Spruce and pine wood products
for construction and joinery.
Raw material: Spruce and pine saw logs.
Iggesund Sawmill
Products: Pine joinery products.
Raw material: Pine saw logs.
Linghem Sawmill
Products: Spruce and pine wood products
for construction and joinery.
Raw material: Spruce and pine saw logs.
Bygdsiljum Sawmill
Products: CLT, glulam, spruce and pine
wood products for construction and joinery.
Raw material: Spruce and pine saw logs.
Kroksjön Sawmill
Products: Spruce and pine wood products
for joinery and construction.
Raw material: Spruce and pine saw logs.
River
Umeälven
Gideälven
Faxälven
Harrsele
Tuggen
Stennäs
Gammelbyforsen
Björna
Gideå
Gidböle
Gideåbacka
Linnvasselv
Junsterforsen
Gäddede
Bågede
Iggesundsån
Pappersfallet
Iggesund Power Station
Ljusnan
Motala Ström
Sveg
Byaforsen
Krokströmmen
Långströmmen
Ljusne Strömmar
Holmen
Bergsbron-Havet
Wind power
Varsvik Wind Farm
1) Holmen’s share of production. 2) Normal production.
Customers and market
49
22
10
10
10
10
10
10
7
100
30
100
100
100
20
20
9
11
7
100
100
50
489
98
3
1
8
9
6
8
16
130
22
71
6
22
22
21
42
32
17
106
8
75
1957–58
1962
1985–96
"
"
"
"
"
1961–74
"
"
"
1915
2009
1949–75
"
"
"
"
1990
1927
2014
Business area Products
Customer
segment
Competitors
Forest
Paperboard
Paper
Wood Products
Logs, pulpwood and
biofuel
Sawmills, pulp mills,
paperboard and paper
mills
SCA, Sveaskog plus a
number of large forest
owners’ associations
Premium paperboard
for consumer packaging
Brand owners, converters
and wholesalers
Metsä Board,
Stora Enso
Paper for books,
magazines and printed
advertising
Publishers, printing firms
and retailers
Norske Skog,
Stora Enso, UPM
Construction timber,
joinery timber, CLT and
glulam, plus wood for
pallets and packaging
Construction industry,
joinery industry,
builders’ merchants,
and packaging industry
Moelven, SCA, Setra,
Södra, Vida and a
large number of
foreign companies
Renewable Energy
Renewable energy from
hydro and wind power
Nordic electricity
market
Fortum, Statkraft,
Vattenfall, Uniper
Business overview
Holmen Annual Report 2020
93
Definitions & glossary ↘
Definitions
Capital employed
Net financial debt plus equity, which corresponds
to fixed assets (excluding non-current financial
receivables) plus working capital less the net sum
of deferred tax liabilities and deferred tax assets.
Average values are calculated on the basis of
quarterly data.
Cash flow after investments
Cash flow from operating activities less cash flow
from investing activities.
Debt/equity ratio
Net financial debt divided by total equity.
Earnings per share (EPS)
Profit for the year divided by the weighted average
number of shares outstanding, adjusted for buy-
back of shares, if any, during the year. Diluted EPS
means that any diluting effect from outstanding call
options has been taken into account.
EBITDA
Earnings before interest, taxes, depreciation and
amortisation, excl. items affecting comparability.
Equity/assets ratio
Equity expressed as a percentage of total assets.
Financial assets
Non-current and current financial receivables and
cash and cash equivalents.
Items affecting comparability
Used to clarify how the earnings measures are
affected by matters outside normal business
operations, such as impairment, disposal, closure
and major restructuring measures, plus alterations to
assumptions in the valuation of biological assets. The
effects of maintenance and rebuilding shutdowns are
not treated as an item affecting comparability. Page
88 states which items have been treated as items
affecting comparability over the past 10 years.
Net financial debt
Non-current and current financial liabilities,
non-current and current liabilities regarding right-
of-use assets, and pension provisions, less finan-
cial assets.
Operating margin
Operating profit/loss (excl. items affecting compara-
bility) expressed as a percentage of net sales.
Operating profit
Profit before net financial items and tax.
Return on capital employed
Operating profit/loss (excluding items affecting
comparability) expressed as a percentage of
average capital employed, based on quarterly data.
Return on equity
Profit for the year excluding items affecting
comparability, expressed as a percentage of average
equity, calculated on the basis of quarterly data.
Glossary
Bio co-location
A co-location of different
operations for more efficient
use of raw materials and
energy, amongst other benefits.
Biofuel
Renewable fuels such as wood,
black liquor, bark and tall oil.
Fuels that do not generate any
net emission of carbon dioxide
into the atmosphere, since
the quantity of carbon dioxide
formed during combustion is
part of the carbon cycle.
Bulk
Measure of the paper’s volume.
Paper of the same grammage
can have different thicknesses
depending on the paper’s bulk.
High bulk means thick, but
relatively light, paper.
Carbon dioxide (CO2)
Carbon is the building block
of life and is part of all living
things. Biogenic carbon dioxide
is released when biological
material decays or wood is
burned. Fossil carbon dioxide
is released when coal, oil or
natural gas is burned.
Carbon dioxide equivalents
(CO2e)
Carbon dioxide equivalents
include the effects from
greenhouse gases other than
just carbon dioxide, such as
methane and nitrous oxide.
COD
Chemical oxygen demanding
substances. A measure of the
amount of oxygen needed for
the complete decomposition of
organic material in water.
Cross-laminated timber (CLT)
Engineered wood product
comprising an odd number
of layers of planed lamellae
glued together, with each layer
perpendicular to the previous
one. Uses include posts and
beams plus surface units for
walls and floor systems.
FBB
Folding Box Board. Multi-
layered paperboard made from
mechanical and chemical pulp.
Fillers
Fillers, such as ground marble
and kaolin clay, are used to
give the paper bulk and make it
more uniform in structure and
brighter.
Fossil fuels
Fuels based on carbon and
hydrogen compounds from
sediment or sedimentary
bedrock – mainly coal, oil and
natural gas.
FSC®
Forestry certification system.
Glulam
Particulates
Particles of ash formed in
incineration of bark or liquor,
for example.
PEFC™
Forestry certification system.
Phosphorus (P)
An element contained in
wood. Excessive phosphorus
in the water may cause over-
fertilisation (eutrophication)
and oxygen consumption.
Precautionary principle
Persons who pursue an activity
or take a measure, or intend
to do so, shall implement
protective measures, comply
with restrictions and take any
other precautions that are
necessary in order to prevent,
hinder or combat damage or
detriment to human health or
the environment as a result of
the activity or measure. For the
same reason, the best available
technology shall be used in
connection with professional
activities.
SBB
Solid Bleached Board. Multi-
layered paperboard made from
bleached chemical pulp.
Sulphate pulp
Chemical pulp that is produced
by cooking wood under
high pressure and at a high
temperature together with
white liquor (sodium hydroxide
and sodium sulphide).
Sulphur dioxide (SO2)
A gas consisting of sulphur
and oxygen that is formed
in combustion of sulphur-
containing fuels, such as oil.
In contact with moist air,
sulphur dioxide is converted
into sulphuric acid, which
creates acid rain.
Suspended solids
Waterborne substances
consisting of fibres and
particles that can largely be
removed using a fine mesh
filter.
Tall oil
By-product of the sulphate
pulp process used for making
soft soap, paints, biodiesel and
other products.
TMP
Thermo-mechanical pulp.
Obtained by heating spruce
chips and then grinding them
in refiners.
Engineered wood product
comprising layers of planed
lamellae glued together, with
the wood grain running parallel
with the length. Uses include
posts, beams and roof trusses.
GRI
Global Reporting Initiative.
International cooperation body,
in which many different groups
of stakeholders in society have
drawn up global guidelines for
how companies are to report on
activities encompassed by the
umbrella term of sustainable
development.
ISO 9001
An international standard for
quality management systems.
Primarily aimed at companies
and organisations that wish to
improve two aspects of their
operations, i.e. to ensure more
satisfied customers and lower
costs.
ISO 14001
An international standard for
environmental management.
Important principles in
ISO 14001 include regular
environmental audits and
a gradual increase in the
requirements.
ISO 45001
A series of international
standards regarding a
management system for health
and safety. The management
system includes monitoring,
evaluating and reporting on
health and safety work.
ISO 50001
An international energy
management systems standard
that provides a framework for
energy efficiency measures.
m3 growing stock,
solid over bark
The volume of tree stems,
incl. bark, from stump to top.
Generally used as a measure
for growing forest.
m3sub
Cubic metre solid volume
under bark. The actual volume
(no gaps between the logs)
of whole stems or stemwood
excl. bark and treetops.
Generally used as a measure
for harvested wood.
Nitrogen (N)
An element contained in wood.
Nitrogen emissions to water
may cause eutrophication.
Nitrogen oxides (NOx)
Gases that consist of nitrogen
and oxygen that are formed
in combustion. In moist air,
nitrogen oxides are converted
into nitric acid, which creates
acid rain. Nitrogen oxides also
have a fertilising effect.
94
Holmen Annual Report 2020
Definitions & glossary
Calendar & information ↘
Information
Calendar
The interim and year-end reports are
presented at an online conference for
press and analysts. The conference is
held in English and is broadcast live on
holmen.com. The annual report, togeth-
er with year-end and interim reports, is
published in Swedish and English and
the reports are sent automatically to
the shareholders who have indicated
their wish to receive them. They are also
available at holmen.com.
How to order printed material:
Holmen AB, Group Sustainability
and Communications, P.O. Box 5407,
SE-114 84 Stockholm, Sweden
e-mail: info@holmen.com
telephone: +46 8 666 21 00
or go to holmen.com
For 2021, Holmen will publish the
following financial reports:
Interim report Jan–Mar: 29 Apr 2021
Interim report Jan–Jun: 19 Aug 2021
Interim report Jan–Sep: 21 Oct 2021
Year-end report: 28 January 2022
AGM 2021
Holmen’s AGM for 2021 will be held
on 22 April. The format of the AGM
will mean that shareholders will only
be able to exercise their voting rights
via postal voting. Votes will need to be
submitted using a form that is available
at holmen.com. The company must
receive the signed form by 21 April at
the latest. The form can be signed using
a BankID or by hand and should then be
sent to the company by e-mail
(info@computershare.se) or to Holmen
via the address Computershare AB,
“Årsstämma i Holmen”, Box 5267,
SE-102 46 Stockholm, Sweden.
Dates of trading
and dividend
The final date for trading,
including right to dividend:
22 April 2021
Record date for dividend:
26 April 2021
Payment date for dividend:
29 April 2021
References
References page 12
• Kraftsamling elförsörjning – Långsiktig scenarioanalys (Focusing energies on electricity supply –
long-term scenario analysis), Confederation of Swedish Enterprise 2020.
References page 23
• Brege, S, Nord, T and Stehn, L. Industriellt byggande i trä – nuläge och prognos mot
2025. 2017 (Industrial construction in wood – status and forecast to 2025). 2017,
Linköping University. With annex from consultancy firm Tyréns, Framtidsstudie: Indata för
bedömning av klimateffekt av ökat träbyggande (Future study: Input data for assessing
climate impact of increased wood construction), 2017.
• Hurmekoski, E. How can wood construction reduce environmental degradation, 2017.
European Forest Institute. ISBN 978-952,5980-43-9.
• Tettey, U, Y, A; Dodoo, A. and Gustafsson, L., Carbon balances for a low energy
apartment building with different structural frame materials. Innovative Solutions for
Energy Transitions: Proceedings of the 10th International Conference on Applied Energy
(ICAE2018), Elsevier, 2019, Vol. 158, p. 4254–4261.
Holmen AB (publ)
P.O. Box 5407, SE-114 84
Stockholm, Sweden
+46 8 666 21 00
info@holmen.com
ID no. 556001-3301
Registered office Stockholm