Holmen Annual Report 2022

FY2022 Annual Report · Holmen

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Annual Report 2022

We let the forest
groW and give

contents
2022

Holmen in brief
CEO’s message
Strategy and targets
Investment case
The year in brief
Forest
Wood Products
Paperboard
Paper
Renewable Energy
A sustainable business
Employees
Corporate governance report
Risk management
Shareholder information

03
04
06
10
14
16
21
25
28
32
36
46
48
53
58

Financial statements

60
66
Notes
Proposed appropriation of profits 93
95
Auditor’s Report
97
Review of Sustainability Report

Board of Directors
Group management

Key figures
Ten-year review, finance
Taxonomy
Five-year review, sustainability
Environmental information
Business overview
Definitions and glossary
Calendar and information

98
100

101
102
104
108
110
112
114
115

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
with high whiteness and a smooth, matt surface. The
paperboard is ideal for graphical products with a
surface finish. The insert is printed on Holmen TRND,
which is manufactured at Hallsta Paper Mill. This is an
uncoated, matt magazine paper that offers a wide
range of options in terms of bulk, grammage and
shade. Both Holmen TRND and Invercote G are made
using fresh fibre from sustainably managed forests.

Holmen Aktiebolag (publ.), corporate identity
number 556001-3301, submit their annual report
for the parent company and the Group for the
financial year 01.01.2022–31.12.2022. The annual
report comprises the administration report (pages 2,
6–9, 14–15, 44–59, 93–94, 98–99 and 110) and
the financial statements, together with the notes
and supplementary information (pages 60–92).
The statutory sustainability report in accordance
with the Swedish Annual Accounts Act comprises
pages 6–9, 44–47, 50–52, 54–55, 104–107 and
110. The Group’s consolidated income statement
and balance sheet and the parent company’s
income statement and balance sheet will be adopted
at the Annual General Meeting.

The basis for the sustainability information presented
is the issues identified as key in view of the materiality
analysis conducted in 2018. The sustainability work is
reported in accordance with the Global Reporting
Initiative’s GRI Standards 2021. The Sustainability
Report comprises pages 36–47, 54–55, 104–111
and the GRI index on the website holmen.com. The
information is audited by a third party, see separate
assurance report at holmen.com.

This is a translation of the Swedish annual report
of Holmen Aktiebolag (publ.). In the event of
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: Jonas Westling, Måns Berg, Patrick Degerman, Kollberg & Karlsson, Ulla-Carin Ekblom and others. Print: Larsson Offsettryck AB.

Holmen Annual Report 2022

Holmen
grows
Houses

We manage the forest actively and sustainably, and use the raw
material wisely and far-sightedly. The wood is refined into wood
products for sustainable building, and we turn whatever is left
over into paperboard of world-leading quality and innovative paper
products. In addition, we use the water rushing down the rivers and
the wind blowing over the treetops to produce renewable energy.
When we grow houses, we are also growing change.

2022 in figures

Net sales

23 952 SEKm

Cash flow*

6 768 SEKm

Operating profit**

7 262 SEKm

No. of employees

3 466

Profit per share

SEK
40

19***

Total shareholder return Holmen B and OMX Stockholm

Index
800

600

400

200

0
13

Jan 23

Holmen B

OMX Stockholm 30 (OMXS30)

*Before investments and changes in working capital **Excl. items affecting comparability
***Excl. forest revaluation

Holmen in brief

Holmen Annual Report 2022

» Our strong financial position
makes us well equipped to
exploit the opportunities
opening up in a world
that is working towards
a sustainable society.«

Holmen Annual Report 2022

CEO’s message

Dear
sHareHolDers,

2022 was marked by the war in Ukraine and the energy
crisis in Europe, while around the world, central banks
struggled with high inflationary pressures driven by
raw material shortages. With our own forest and energy
production as a foundation, we at Holmen have been
able to advance our positions within our business areas,
despite the uncertain environment, with earnings surging
above SEK 7 billion.

As we close the books on 2022, we can clearly see that our
business model − creating value based on our forest assets − is a
successful one. We can also report that interest in owning forest
remains high, as reflected in the 11 per cent increase in the value
of our forest assets to a little over SEK 52 billion. In light of the
solid earnings development and our strong financial position, the
proposal is to increase the ordinary dividend to SEK 8 and to pay
an extra dividend of SEK 8.

The transition to a sustainable world
Although we are seeing rapid advances in renewable energy, only
a small proportion of the world’s energy comes from sustainable
sources. Looking back over the past 50 years, the world’s energy
consumption has tripled, and this increase in demand has almost
exclusively been met using fossil fuels. Russia’s invasion of
Ukraine has highlighted just how damaging our dependence on
fossil energy sources can be, not only for the climate, but also for
the economy and security policy. To wean us off this dependence,
Europe needs to restructure its energy supply. This means not
only that we need to produce more fossil-free electricity, but that
we must also electrify substantial elements of industrial production,
heating and transport.

Renewable electricity production
With a fossil-free energy system and opportunities to increase
renewable electricity generation, Sweden is well placed to
lead the development of next-generation, fossil-free industrial
processes. Recent initiatives concerning everything from green
steel to batteries are concrete examples of companies beginning to
turn words into action. With our controllable hydro power, we can
play our part in supplying the growing industry with green electricity
when it is most needed, while at the same time helping to stabilise
an increasingly weather-dependent electricity system. In 2022,
we increased our capacity for renewable energy production by
40 per cent with the commissioning of Blåbergsliden Wind Farm
and the acquisition of Varsvik. There is also significant potential
to develop more wind power on our own land, but this is reliant
on permit application processes that are currently protracted
and unpredictable.

Sustainable building
The real estate sector accounts for over a third of Europe’s carbon
emissions, something that the major construction companies
have begun to acknowledge as they set targets to make the whole
value chain fossil-free. The main challenge is that making the
dominant construction materials, cement and steel, sustainable
is both costly and difficult. Wood offers a renewable alternative
that is more than just fossil-free. In contrast to cement and steel,
it is also energy-efficient to produce, and it stores carbon in the

buildings. This makes the market prospects for wood very good,
not least when fossil construction materials are made to carry
their true cost to the climate. Through the acquisitions and
investments of recent years, we have expanded our wood
products business while at the same time shifting ourselves
forward in the value chain. We are currently investing in the
expansion of Iggesund Sawmill, and in higher volumes of products
for large-scale construction. With a strong position in the wood
market and well-invested sawmills, we have a platform for
continued growth for many years to come.

Fossil-free paper and paperboard
We grow forest with a view to building houses. When we saw the
wood, whatever is left over is used in our paper and paperboard
mills, where wood chips and shavings are topped up with the
trees that are too narrow to become construction material.
With a secure and largely fossil-free energy supply, we provide
the market with climate-smart products − a winning concept in
light of the energy and raw material shortages that have hit
competitors on the continent. Our paper business is performing
strongly against the competition, with interesting opportunities
also opening up in the packaging area. On the paperboard front,
we are now accelerating the pace of investment over a five-year
period in order to drive up sales to our customers in the
premium segment.

Managed forest generates climate benefits
The world’s forests absorb increasing amounts of carbon dioxide
every year, but this increase only occurs in the forests that are
actively managed. We have long combined active forestry with
preservation of biodiversity, and we are seeing this bear fruit
with a increasing volume of standing timber and larger harvests
from healthy ecosystems. Our growing volume of standing timber
contributes to a better climate by sequestering carbon, but the
main benefit comes when we are able to increase the production
of wood products, paperboard and paper to replace fossil
alternatives, while at the same time keeping the carbon stored
in the buildings. In 2022, our combined operations contributed
towards a climate benefit of 7 million tonnes CO2e, equivalent
to 15 per cent of emissions in Sweden.

With our large forest holdings as a foundation, we grow houses

while also harnessing the energy that blows over the treetops
and flows in the rivers. We then make renewable packaging,
magazines and books from what is left over from forestry. Our
strong financial position makes us well equipped to exploit the
opportunities opening up in a world that is working towards a
sustainable society in a time when both raw materials and energy
are in short supply.

Stockholm, 20 February 2023

Henrik Sjölund
President and CEO

CEO’s message

Holmen Annual Report 2022

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
foundation of our business. Using our own
production facilities, the growing trees are refined
into everything from wood for climate-smart
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.

Paper

The Paper business will
be developed by offering
resource-efficient alternatives
to traditional products.

↑ Wood Products

The Wood Products business
will grow through products
and solutions for sustainable
construction.

Holmen Annual Report 2022

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 development of Holmen’s
production facilities.

↓ Paperboard

The Paperboard business
will develop on the basis of its
position as a market leader in the
premium segment for renewable
consumer packaging.

↙ Renewable Energy

The Renewable Energy business
will grow by establishing wind
power on Holmen’s own land.

Strategy and targets

Holmen Annual Report 2022

Strategy and targets

We aim to create value that
stands the test of time …

Forest

Industry

Renewable Energy

The forest is sustainably managed to
provide a good annual return and stable
value growth. Growth and harvests will
increase over time.

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.

Deliveries of renewable energy will
increase by complementing our existing
hydro power with wind power on our
own land.

Annual harvest, ’000 m3sub/year

Industry’s return on capital
employed, %*

Deliveries of hydro and wind
power, GWh

3 500

3 000

2 500

2 000

1 500

1 000

500

2003-
2007

2008-
2012

2013-
2017

2018-
2022

2023-
2027*

2028-
2032*

2033-
2037*

2038-
2042*

2 000

1 600

1 200

800

400

1 639

Harvest

Thinning

Storms & other events

*Excl. items affecting comparability

*Forecast

In 2022 volumes amounted to
2.8 million m3, which is in line with the
current harvesting plan. The value of
the Group’s forest assets increased by
11 per cent to SEK 52 billion.

In 2022, the return for the industrial side
of the business reached 52 per cent,
driven primarily by excellent profitability
in Paper and Wood Products.

Over the year, the Group increased its
deliveries of renewable energy by a little
over 30 per cent with the commissioning
of Blåbergsliden Wind Farm and
acquisition of the outstanding shares
in Varsvik Wind Farm.

Holmen Annual Report 2022

Strategy and targets

… While contributing to
a better climate

Climate benefit

Capital structure

Dividend

We will increase our benefit to the climate
through higher growth in our forest and
higher sales of renewable products that
store carbon dioxide and replace fossil-
based alternatives, while also reducing
the fossil emissions along our value chain.

Our financial position is to be strong in
order to secure room for manoeuvre when
making long-term commercial decisions.
Net financial debt will not exceed 25 per cent
of equity.

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
buy-backs where this is judged to create
long-term value for shareholders.

Climate benefit, million tonnes
CO2e

Net debt as % of equity

Dividend per share, SEK

7.2

Proposal
8

Ordinary dividend

Extra dividend

In 2022, Holmen’s operations helped to
generate a climate benefit amounting to
7.2 million tonnes of CO2e, with positive
contributions from all the business areas.
For further information, see page 42.

Strong cash flow has reduced net debt
by SEK 1 956 million to SEK 2 145 million
over the year, and the debt/equity ratio
has fallen to 4 per cent.

The Board proposes that the 2023 AGM
approve a dividend of SEK 8 per share
and an extra dividend of SEK 8 per share.

Strategy and targets

Holmen Annual Report 2022

Investment case

tHe value of owning forest

The forest is a fantastic asset. It
provides a renewable raw material
that can be processed into climate-
smart products for a sustainable
future. If we are to become less
dependent on fossil raw materials,
forest products have a key role to
play and demand will increase in
the future.

Active forest management enables
the trees to grow better, which in turn
increases the amount of renewable raw
material. However, 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. In 2022,
Holmen’s total volume of standing timber
amounted to 125 million m3 growing
stock, solid over bark, which is 5 per cent
higher than 10 years ago.

As well as harvesting the forest on our

own land, we also purchase wood from
private forest owners and other Swedish
forest companies. Almost 15 000 private
forest owners have chosen us as a forestry
partner. The amount of forest we refine at
our own production facilities is thus twice
the volume that we harvest from our
own forest, and all this wood is used for
everything from timber for climate-smart
construction to renewable packaging,
magazines and books.

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
construction material. Holmen uses the
narrower part of the tree and wood from
thinning, along with residual wood chips
from the sawmills, to manufacture
paperboard and paper.

Wood products used for houses and
other structures add considerable value
by storing carbon for a long period
while at the same time replacing fossil
emissions from concrete and steel.
Paperboard and paper also contribute to
a better climate when they replace fossil
materials, are recycled and finally create
benefit as bioenergy. 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. Nothing goes to waste.

Wind and hydro power. Owning forest
land also provides opportunities for other
revenue streams, not least by developing
wind power. Our extensive forest holdings
give us a unique opportunity to develop
areas that are favourable for wind power.
We develop projects on our own land and
during the spring of 2022, Holmen's new
Blåbergsliden Wind Farm became fully
operational. Blåbergsliden contributes its
annual production of 0.4 TWh to the grand
total of 1.8 TWh of hydro and wind power
that we generate each year. We now have
159 wind turbines operating on our land.
With several wind projects in various
stages of development, we have an
opportunity to continue expanding wind
power within Holmen.

Holmen’s renewable energy production is
dominated by the plannable hydro power
from our 21 fully or partly owned power
stations. Hydro power provides a reliable
electricity supply and delivers major social
benefits in the transition to more
renewable energy sources.

Other opportunities on our land.
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 recreation. Extracting
stone and gravel from our own land for
use in projects such as road building is
another possibility for landowners such
as Holmen.

The climate benefit of managed
forest
Our growing forests bind carbon and
all our products help to replace fossil
material such as concrete, steel and
plastic. In addition, our energy production
makes it possible for people to heat their
homes and for companies to run their
production on renewable energy sources.
Our business thus provides substantial
climate benefits and reduces the amount
of carbon dioxide in the atmosphere. Our
positive climate impact for 2022 equated
to 7.2 million tonnes of CO2e.

Net sales and operating costs, SEKm

Climate benefit, million tonnes CO2e

25 000

20 000

15 000

10 000

5 000

Net sales

Operating costs

Holmen Annual Report 2022

Investment case

7.2

focus on climate anD energy

One of society’s biggest challenges is
meeting the needs of today’s growing
population without compromising
the ability of future generations to do
the same. If we are to successfully
transition to a fossil-free society, we
must break our dependence on fossil
resources and make sure that more
carbon atoms remain in the ground.

Our world is currently dictated, to a large
extent, by two parallel factors: the climate
transition that is driving demand for
sustainable products, and the prevailing
energy crisis that has rewritten the ground
rules for both industry and private
individuals. Since energy accounts
for almost three quarters of global
greenhouse gas emissions, the energy
issue is closely tied up with the climate
transition. The way we handle the energy
crisis will also affect the world’s ability
to manage climate change.

The climate transition is driving
demand
Population growth and urbanisation,
coupled with surging ambitions for
sustainable construction, are driving the
wood products market. Demand for
paperboard and paper is being fuelled
largely by economic and population
growth, as well as changes in consumer
behaviour and increased digitalisation.
The desire to reduce climate impacts and
avoid plastic packaging is a strong driving
force promoting greater use of wood fibre-
based products.

We are seeing a distinct rise in demand

for raw materials and products that are
renewable, recyclable and fossil-free, a
trend being accelerated by political
decisions and increasing awareness
among consumers. Active forestry
increases growth in our forests, but in
global terms the supply of forest raw
material is limited. And yet demand for
logs and pulpwood is expected to rise.

The energy crisis is rewriting the
ground rules
The European energy market is
undergoing a major transition. Roughly
half of electricity production in Europe is
fossil-free, but electricity only accounts
for a quarter of total energy consumption
and almost all other energy consumption
is fossil-based. The war in Ukraine has
also shown how dependent Europe is on
energy from Russia and how sensitive the
energy market is to disruptions.

To meet the climate targets, much of
fossil-based energy production will need to
be switched to fossil-free sources, while at
the same time securing a stable and cost-
effective energy supply. However, it will not
be enough just to increase the production
of renewable energy – all transport
and industrial processes will need to
be electrified and made more energy-
efficient, as will the construction and
heating of buildings. Achieving this
transition will require major investment
and all products will have to carry the true
cost of their climate impact. As fossil
energy is phased out with no expansion of
nuclear power on the horizon, renewable
electricity production will take on even
greater significance in the future.

» To meet the climate targets, much of fossil-based energy

production will need to be switched to fossil-free sources.«

Investment case

Holmen Annual Report 2022

Investment case

tHe
climate
can’t wait

As the focus on both climate issues
and the energy situation intensifies,
it is becoming increasingly clear that
the forest and its products have a vital
role to play in a fossil-free future.

Holmen as a company is already
contributing towards a better climate and
a stable energy system. The amount of
greenhouse gas in the atmosphere is
lower thanks to the work we do. Our
growing forests capture and store carbon
dioxide, our renewable products replace
fossil alternatives and our production of
hydro power and wind power contributes
to the transformation of Europe’s energy
system. The more we produce, the greater
the positive effects.

We began planning for our production
facilities to move away from fossil energy
use back in the early 2000s and we have
now switched to primarily using fossil-free
electricity and renewable energy from
biofuel. This is a major reason why
our production has such a low carbon
footprint compared with many of our
competitors. Combined with energy
efficiencies, emissions of fossil carbon
dioxide from our production facilities
have fallen by 90 per cent since 2005.
We have also increased our production of
renewable electricity by building two wind
farms. And we will continue to invest and
grow our positive contribution where the
benefit and demand are greatest – wood
products for sustainable building and
more green energy.

Greenhouse gas emissions from paper production*

Tonnes CO2e/tonne paper
1.5

Direct emissions (Scope 1)
Indirect emission from
purchased energy (Scope 2)

1.0

0.5

0.0

In dia

C hin a

Ja p a n

G er m a ny

M exico

S p ain

U K

Italy

U S A

Fra nce

C a n a d a

Finla n d

S w e d e n

Brazil

H ol m e n

*Production of paper for packaging, newspapers and other graphical purposes. Source: FisherSolve

Braviken Sawmill
taken into operation

Solid fuel boiler at Hallsta Paper Mill
replaced with fossil-free electricity

Opening of Varsvik Wind
Farm outside Hallstavik

Acquisition of Martinsons
and its two sawmills

Holmen takes full ownership
of Varsvik Wind Farm

2010

2013

2014

2020

2022

2012

2013

2017

2022

New recovery boiler
at Iggesund Mill

New biofuel boiler
at Workington Mill

Acquisition of
Linghem Sawmill

Opening of Blåbergsliden Wind
Farm outside Skellefteå

Holmen Annual Report 2022

Investment case

wooD proDucts for
sustainable builDing

Buildings account for considerable
emissions of greenhouse gases, in
construction and during the building’s
lifecycle. Within the EU, the construction
and real estate sector is responsible for a
third of fossil carbon dioxide emissions, and
in Sweden buildings account for 40 per cent
of energy use. Active measures in heating
and smart material choices offer major
opportunities to cut the real estate sector’s
climate footprint.

Construction companies have

ambitious climate targets and more and
more countries, regions and cities are
demanding sustainable building. Concrete,
steel and wood are all key building
materials, but wood has major benefits as
it stores carbon while at the same time
replacing materials with greater impact on
the climate. In addition, the whole chain
from manufacture to transport is much
more energy-efficient for wood products
than for other construction materials.

The development of ‘green’ cement and

fossil-free steel might lead to lower
emissions, but it will also bring higher
material costs, not least with a reduced
allocation of emission allowances, as
today’s production of steel and concrete
does not carry its true cost to the climate.

Increased production and
value added
Holmen’s manufacture of wood products
has become an increasingly important
part of our business. The construction
of Braviken Sawmill in 2010 and the
acquisition of Martinsons in 2020 have
prompted strong growth in our wood
products business. Demand for refined
wood products is growing and with rising
interest in wood construction, we see
great opportunities to further develop the
business. The next step is to increase
capacity at Iggesund Sawmill by

20 per cent, and to step up the production
of glulam and CLT (cross-laminated
timber). Furthermore, we are exploring
the viability of building a new large-scale
sawmill in the county of Västerbotten.
With a broader palette of refined products,
we have also increased sales to chains
of builders’ merchants, while through
Martinsons we are now able to offer the
planning and construction of complete
timber frames in CLT and glulam for
everything from sports halls and schools
to office blocks and apartment buildings.

Price trend for construction materials

Index
400

300

200

100

Wood products

Steel

Concrete

renewable energy
from our lanD

The energy crisis in Europe has created
significant difficulties in securing enough
energy for households and industry. This
has had far-reaching consequences for the
whole of our society and shows just how
sensitive the European energy system is
and how dependent we are on fossil fuels
such as gas and coal. At a time when the
whole world needs to switch away from
fossil energy sources, prompting a
dramatic increase in electricity use,
the need for more renewable energy is
enormous. Having more weather-
dependent energy from wind and solar
also increases the need for controllable
power in order to secure a stable and
reliable network. The benefits of Holmen’s
plannable hydro power are thus becoming
all the clearer, as it can be managed to
ensure production at times when the
energy need is highest, and can help to
keep the electricity grid’s frequency stable.

Large-scale investment in wind power
Our extensive land holdings mean that we

also have the potential to add more
renewable energy in the form of wind
power. The establishment of large-
scale wind power provides a logical
complement to our controllable hydro
power. It is also a great way to derive added
value from our land, as higher energy

production provides a good cash flow.
2014 saw the opening of Varsvik Wind
Farm in Uppland, and Blåbergsliden Wind
Farm outside Skellefteå came into
operation in 2022. With 26 turbines, the
wind farm will boost our annual production
of renewable energy to 1.8 TWh.

Europe’s energy use 2021, %

Europe’s electricity use 2021, %

Fossil gas

Oil
Nuclear power
Electricity

Coal

Renewables

Fossil gas

Oil
Nuclear power

Coal
Renewables

Investment case

Holmen Annual Report 2022

The year in brief

2022 was a
recorD year

Net sales and operating margin

Operating profit/loss and return

Operating profit*
Business area, %

SEKm
25 000

20 000

15 000

10 000

5 000

23 952

%
50

SEKm
8 000

6 000

4 000

2 000

7 262

Net sales
Operating margin*

*Excl. items affecting comparability

Operating profit*
Return on capital employed*
Return on equity**

*Excl. items affecting comparability
**Excl. forest revaluation 2019

%
16

Forest
Paperboard
Paper
Wood Products
Renewable Energy

Total: 7 262 SEKm
1 401 SEKm
1 081 SEKm
2 714 SEKm
1 237 SEKm
1 006 SEKm

*Excl. items affecting comparability and
Group-wide

Cash flow, SEKm

Net debt as % of equity

Capital employed*
Business area, %

8 000

6 000

4 000

2 000

6 768

1 352

1 862

Investments

Dividend
Acquisitions
Cash flow before investments and

changes in working capital

Forest
Paperboard
Paper
Wood Products
Renewable Energy

Total: 59 095 SEKm
41 354 SEKm
5 632 SEKm
1 939 SEKm
2 067 SEKm
4 618 SEKm

*Excl. Group-wide

Holmen Annual Report 2022

The year in brief

The defining features of this year have been the war in Ukraine and the energy crisis in Europe. With our own forest
and renewable energy production, we have managed to avoid the high inflationary pressures driven by the raw material
shortages, while also advancing our position in several segments. Overall, we have managed to drive our profits to a high
of SEK 7 262 million, marking our best result ever.

Business area

Comment

Outlook

Forest

Paperboard

Paper

Demand for logs and pulpwood was high in 2022.
Wood prices have gradually risen, generating profit
of SEK 1 401 million. The value of Holmen’s forest
property rose by 11 per cent over the year, based on
transaction prices in the areas where Holmen owns
forest land, and at year end amounted to SEK 52 billion.

Despite a weaker wood products market, demand for logs
is good. Competition for pulpwood is high due to sanctions
stopping exports from Russia. Our strong position in the wood
market, where we have good control over raw materials,
is a real advantage in these uncertain times, ensuring a
secure supply of raw material and good conditions for the
development of our production facilities.

Demand for paperboard for consumer packaging held
up well and market prices settled at a higher level over
the year. Price rises, combined with a favourable energy
situation at the paperboard mills in Iggesund and
Workington, helped boost profits to SEK 1 081 million,
despite elevated raw material costs.

Following a period of high demand and rising prices,
the market normalised towards the end of the year. The
paperboard market is expected to continue growing, but
may be affected in the near term by an economic downturn.
Backed by an advantageous cost position, we are continuing
to develop our business with customers that demand the
highest quality.

While the structural decline in demand for paper continues,
prices are currently driven mainly by the trend in production
costs for producers on the continent who are dependent on
recycled fibre and fossil energy. With well-invested facilities
and access to fossil-free electricity and local wood, we
remain highly competitive and are continuing to develop our
book and magazine paper business, while also exploring new
segments in the packaging area.

Following substantial falls from the historically high levels of
the summer, prices stabilised towards the end of the year.
There is some uncertainty about how rising interest rates will
affect construction and thus the demand for wood products.
With our strong position in the wood market, we nevertheless
see good opportunities to develop the wood products business
in pace with the increasing demand for sustainable building
materials.

Energy shortages continue to be an issue in Europe and
prices are historically high, although the situation has
improved somewhat compared with last summer. The
price gap between northern Sweden and the rest of Europe
decreased towards the end of the year, in part due to greater
transmission capacity within Sweden. We increased our
renewable production capacity by 40 per cent over the year,
and have large potential to build further wind power on our
own land, although protracted permit application processes
are impeding the pace of development.

Holmen’s already strong financial position has been
further boosted over the year, with net debt down by
SEK 1 956 million to SEK 2 145 million, or 4 per cent
of equity. Our business model has proven to be a
particularly good fit in a world that is short of raw
materials and energy and where we are striving for
a sustainable society.

Despite declining demand in several segments,
paper prices climbed to record levels over the year,
driven by energy and fibre shortages. Profit rose to
SEK 2 714 million thanks to higher selling prices and
our ability to adapt production to an environment of
volatile electricity prices, combined with electricity
price hedging.

Wood Products

After a strong performance in the first half of the year,
the wood products market abruptly stalled due to high
stock levels and uncertainty about the prospects for the
construction industry. Nevertheless, the strong opening
to the year delivered high profits of SEK 1 237 million.

Renewable
Energy

As a result of the energy crisis in Europe, electricity
prices in Sweden rose to record levels during the year,
although due to grid limitations, the price of electricity
was lower in northern Sweden, where the majority
of Holmen’s production is located. Higher electricity
prices, the expansion of wind power and higher
remuneration for hydro power’s ancillary services to
help stabilise the electricity system boosted profits to
SEK 1 006 million.

Key figures

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)

2022

23 952
7 527
7 262

5 874
36.3

8.0*
8.0*

13.3
6 768

1 352
56 950
2 145
4
3 466

2021

19 479
3 731
4 061

3 004
18.5
7.5
4.0
8.5
3 375

1 332
46 992
4 101
9
3 474

*Board proposal. **Net including company acquisitions but excluding changes in non-current financial receivables.

The year in brief

Holmen Annual Report 2022

Forest

sustainable forestry

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. The strategy is to increase
the revenue from and future value of
the forest holdings through active
and sustainable forestry with high
growth.

Holmen’s forests cover 1.3 million
hectares, of which a little over a million
hectares comprise productive forest land.
As one of Sweden’s biggest landowners,
we are largely able to supply our Swedish
production units with renewable raw
material from our own sources, which
boosts our competitiveness while also
promoting the development of our
industrial facilities.

Sustainable forestry is about balancing
several perspectives – economic, environ
mental and social – and succeeding in
doing so over time. It is in our interest
and equally in the interest of society for us
to manage the forest actively and sustain
ably and for us to use the raw material in
a wise and farsighted way. When we
harvest trees, nothing goes to waste, since
we make use of 100 per cent of the raw
material.

We grow houses
In our forests, we grow houses. By this we
mean that we manage the forest in a
way that generates as much timber as
possible. As the trees grow, they absorb
carbon dioxide, which remains stored in
the wood products that are used to build
homes. Using the renewable raw material
in place of fossil alternatives doubles the
climate benefit. In addition, the larger the
area managed, the more carbon dioxide
is captured. Forest that is not actively
managed delivers nowhere near the same
longterm climate gains, since the carbon
released from old trees and plants as
they die and rot down to a large extent
cancels out the absorption capacity of the
younger trees. It also removes the option
for wood raw material to replace products
with a greater climate impact.

Forestry constantly developing
It takes 90 years for trees to reach
maturity and be ready for harvesting, and

by this time their growth and ability to
absorb carbon dioxide have significantly
declined. After harvesting, all the land is
reforested, with at least two seedlings
planted for every tree harvested. 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. 10–30 years
before the forest is harvested, it can be
fertilised to further boost growth. Holmen
invests SEK 170 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.

Long-term planning. Of Holmen’s
over a million hectares of forestclad
land, we use about 80 per cent for wood
production. Every ten years we conduct
a survey of all of our forest holdings
and calculate the potential harvest in
a hundred years’ time, taking into
account any habitats requiring special
consideration, reindeer husbandry and
social assets. Both volumes of standing
forest and the forest’s growth continue
to increase.

45 million seedlings. Holmen’s two
nurseries – one in Gideå and one in
Friggesund – produce almost 45 million
spruce and pine seedlings each year, the
majority of which are planted on our own
land. Selected seeds and organic fertiliser
produce healthy and vigorous seedlings
that are given a special coating to protect
against insect attack. Holmen is also
involved in the development of improved
seedlings that will grow better, produce
higher quality timber and be more disease
resistant.

Biodiversity
We care about the diversity of habitats and
species in our forests. We take extensive
measures to protect the environment
when tending and harvesting our forest,
and we have also identified around
6 500 areas that we refrain from
harvesting. In these areas that have
been voluntarily set aside, we conduct

inventories of the natural assets and,
where necessary, take action to further
boost habitat diversity. Our forests and
their assets are detailed in local ecological
landscape plans, which also describe how
areas set aside for nature conservation
are to be planned and how the forests are
to be managed over the long term in order
to preserve existing natural assets and to
create new ones. The aim is to ensure that
all naturally occurring species are able to
thrive in the Swedish forest landscape.

Learning more about Swedish forests
With the major contribution that our
forests make to both the climate and the
Swedish economy, management of the
forest is of great national, regional and
local significance. Holmen and other
industry players have therefore joined
forces to make politicians, authorities and
the general public more aware of how vital
the forest is for the climate, and the
importance of forestry for a growing
bioeconomy.

Holmen’s Knowledge Forests. To raise
awareness of our forestry and forest
research, we have established four
Knowledge Forests. The forests are
selected for their specific biological
conditions and are used to explore, gather
and pass on knowledge. This is also our way
of showing how our sustainable forestry
can promote growth while at the same time
increasing biodiversity in the forest. This
year saw the opening of Berga Knowledge
Forest in Västerbotten, where we are
working to develop our prescribed burning
in order to create habitats for species that
rely on burned ground and wood.

Control over the raw material
Owning large areas of forest and having
close partnerships with almost
15 000 private forest owners creates
considerable economies of scale, which
give Holmen a strong position in the
wood market. Alongside extensive
timber trading, we provide our industrial
sites with raw material via efficient
logistics solutions. With growing
capacity to produce wood products near
our forest holdings, we can also process
an everincreasing proportion of our
forest at our own industrial sites.

Holmen Annual Report 2022

Forest

Key figures

Operating profit

Comment on results

2022

2021

Net sales, SEKm

7 342

6 509

Of which from own forest,

1 524

1 376

SEKm

Operating profit/loss, SEKm 1 401

1 495

Investments, SEKm

278

249

Book value, forest assets,
SEKm

Average no. of employees
(FTE)

Deliveries, own forest,
’000 m3sub

52 151 47 080

450

431

2 813

2 833

Volume of standing timber, m3
growing stock, solid over bark per
hectare of productive forest land

120

1948

1955

1965

1975

1988

1993

2000

2010

2020

2022*

Inventory

* Estimate

SEKm
1 600

1 200

800

400

1 401

Demand for logs and pulpwood was high
in 2022. Wood prices have gradually risen,
generating profit of SEK 1 401 million.
The value of Holmen’s forest property
rose by 11 per cent over the year, based
on transaction prices in the areas where
Holmen owns forest land, and at year end
amounted to SEK 52 billion.

17
Operating profit
excl. items affecting comparability

Holmen’s forests 2022

Total land acreage

Total forest land acreage*
– of which nature conservation areas
Productive forest land**

1 305 000 ha
1 160 000 ha
204 000 ha
1 045 000 ha

Total volume of standing timber
on productive forest land

125 million m3 growing stock, solid over bark

* Calculated based on Holmen’s stand catalogue and data from the National Forest Inventory in line with 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) according to Holmen’s stand catalogue.

Forest

Holmen Annual Report 2022

Forest

Our nature conservation initiatives aim to benefit
everything from plants and birds to insects and
fungi. The photo shows a dog lichen of the genus
Peltigera and family Peltigeraceae.

Active meAsures create
flourishing forests

Biodiversity means that a landscape
has many types of natural habitat, a
rich variety of species, and a great
deal of genetic variation within those
species. It is all about wild animals,
plants and fungi. But it is also about
cultivated trees and growing forests.

Holmen works to ensure that all naturally
occurring species are able to thrive in our
forests and that important natural assets
are encouraged and preserved. Since the
early 1990s, when the issue of nature
conservation came into sharper focus, we
have learned a great deal about how we
can improve biodiversity and increase
growth in the forest at the same time.

Long-term planning for future
generations
Planning is the foundation of active and
sustainable forestry. Every 10 years, we
conduct an inventory of our entire forest
holdings in order to calculate sustainable
harvesting levels and ensure a growing
volume of standing timber over time. The
assets of our forests are also detailed in
local ecological landscape plans, which

describe how the forests are to be
managed over the long term in order to
preserve existing natural assets and to
create new ones.

Our active forest management includes

extensive consideration for both natural
and cultural assets. Since forestdwelling
species depend on different habitats for
their survival, large broadleaf trees, dead
trees and unusually old trees are
preserved. Some areas are also kept
entirely free from forestry activities, due
to their high conservation value. Some of
these areas are left entirely to their own
devices and in others we implement active
nature conservation measures such as
clearing brushwood or burning forest
under controlled conditions, which is
good for many rare plants and animals.

We also maintain valuable buffer zones
around lakes, watercourses, marshes, rocky
outcrops and agricultural land. These sites
tend to be rich in species due to varying light
conditions, soil types and moisture levels,
and they also provide places where the flora
and fauna of the forest mix with those from
the marshes, water or open landscape.

Forever learning
With a production cycle of almost a
century in the forest, longtermism is
more than just a buzzword for us. It is a
perspective that runs through every
aspect of our business. As a forest
company, we depend on the natural world
being healthy and resilient – in fact it lies
at the very heart of our business. We know
it is fully possible to actively manage the
forest while at the same time preserving
and supporting important natural assets.
We have come a long way on this journey,
but we have not finished yet.

Although we now have a huge bank of
knowledge on how to promote biodiversity
in our forests, we believe that, through
research and collaboration, we can develop
and refine our methods for creating
healthy and flourishing ecosystems.
Holmen is therefore running a hundred
or so research projects on our land, both
independently and in partnership with
research organisations, universities and
other stakeholders. Our goal is to achieve
futuresmart forests that give more, not
just to us but to future generations.

Holmen Annual Report 2022

Forest

the value of
the forest
is confirmed
by current
trAnsActions

Holmen’s forest holdings cover 1.3 million hectares, of which a
little over a million hectares comprise productive forest land.
The land holdings are split across around 4 700 forest properties
from Småland in the south to Västerbotten in the north.

A large number of forest property transactions are carried out every
year. Holmen’s forest assets are recognised at fair value based on the
prices paid for forest properties in the areas where we have our forest.
As of 31 December 2022, the book value stands at SEK 52 151
(47 080) million, which averages out at SEK 49 900 per hectare of
productive forest land.

The value varies across 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 wood producing capacity,
a shorter harvesting cycle and greater demand for forest land.

Wood prices, SEK/m3sub

700

600

500

400

300

200

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2005

2007

2009

2011

2013

2015

2017

2019

2021

Real

Nominal

Price of forest properties, SEK/m3 growing stock,
solid over bark

1 000

800

600

400

200

Holmen owns 1.3 million
hectares of forest and land in
Sweden, equivalent to almost
two million football pitches.

2015

2016

2017

2018

2019

2020

2021

2022

Northern Sweden

Central Sweden

Southern Sweden

Source: Annual collation of price statistics from various market players and
transaction data.

Forest

Holmen Annual Report 2022

Vasaplan bus terminal in Umeå.

Key figures

Operating profit/loss and return

Comment on results

2022

2021

Net sales, SEKm

5 015

4 872

Operating profit/loss, SEKm 1 237

1 668

Investments, SEKm

122

242

Capital employed, SEKm

2 067

2 278

Average no. of employees
(FTE)

729

783

Deliveries, ’000 m3

1 435

1 373

SEKm
2 000

1 600

1 200

800

400

%
100

1 237

Operating profit
Return on capital employed

After a strong performance in the first half
of the year, the wood products market
abruptly stalled due to high stock levels
and uncertainty about the prospects for
the construction industry. Nevertheless,
the strong opening to the year delivered
high profits of SEK 1 237 million.

Consumption of wood products

Price development

Million m³
400

300

200

100

Index
500

400

300

200

100

Europe

North America

China

Other Asia

MENA

Export price Sweden

Price USA

Holmen Annual Report 2022

Wood Products

building the future in wood

Holmen offers a wide range of wood
and timber products for building,
joinery and construction systems. The
raw material comes from responsibly
managed forests and is turned into
sustainable building materials in our
chain-of-custody certified sawmills.
The business is being developed by
increasing the value added and
making better use of the wood raw
material in combination with large-
scale production.

Wood is a fantastic material. It is strong,
versatile, light and the only construction
material that is renewable. Holmen’s
sawmills play a key role in our circular
business. This is where the wood is split
and the processing of the forest we have
harvested begins. Developing the wood
products business is a natural extension
of our forestry work and a key dimension
of our strategy of owning and adding value
to the forest.

Our wood products become houses and
other buildings. They are used for façades,
roof trusses, floors, walls, doors and
window frames, as well as for furniture
and decking. Products as basic as planks
and boards create great value, not least
for the climate.

Sustainable building
Drawing energy from the sun and water from
the ground, trees absorb carbon dioxide
from the air, and this then remains stored
in the wood products we manufacture.
Building in wood is therefore significantly
better for the climate than building in
concrete and steel, since the manufacture
of these materials 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 costeffective, since wood weighs less
than concrete and steel. We thus create
benefit for the climate on multiple fronts.
Demand for refined wood products,

especially CLT and glulam beams, is
growing and with rising interest in wood
construction we see great opportunities to
further develop the business. We currently
offer everything from joinery timber and
refined products for builders’ merchants to
advanced construction components and
glulam. Through Martinsons, we are now
also able to offer the planning and

construction of complete timber frames for
everything from sports halls and schools to
office blocks and apartment buildings.

Added value in large-scale production
Holmen’s hightech sawmills enable us to
offer a wide range of dimensions and
grades. Proximity to the raw material
combined with efficient wood purchasing
is a key factor for profitability, while
competitiveness is underpinned by
the fact that parts of production are
colocated with the Group’s paperboard
and paper mills.

In the sawmills, the entire log is used
in an optimized way. Thanks to advanced
technology, we can maximise the output
from every log. Our high level of techno
logy, including one of the world’s most
efficient planing mills at Braviken Sawmill,
enables product development with a
greater focus on optimising wood
characteristics in the log to suit the end
customer’s product. We develop sawing
and drying in cooperation with our
customers to minimise wastage and
maximise customer benefit.

Investments strengthening our position.
Since becoming operational in 2011,
Braviken Sawmill has undergone several
rounds of technical upgrades to become
one of Scandinavia’s largest and most
modern sawmills. Following the expansion
of Braviken, plus the acquisition of the
Linghem customer sawmill in 2017 and
Martinsons’ two sawmills in 2020, the
focus now turns to Iggesund Sawmill as
the next step in strengthening our wood
products business. An investment in
timber sorting and a new planing mill will
increase production at Iggesund Sawmill
by 20 per cent, as well as adding
construction timber on top of its joinery
products range.

Investments in Bygdsiljum Sawmill

and in a distribution warehouse and
cutting line at Braviken Sawmill will also
enable us to expand production of glulam
and CLT, as well as strengthening our
position with builders’ merchants.
Furthermore, we are exploring the viability
of building a new largescale sawmill in
Västerbotten.

Energy-efficient production units. Two
of the Group’s sawmills, Iggesund and
Braviken, form energy-efficient units with
their neighbouring 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.

Control over the raw material. Holmen’s
sawmills are located near our forest
holdings from north to south, bringing
logistical benefits and giving access to a
transport network that reaches around the
globe by rail, road and, not least, sea.
Holmen’s sawmills all hold chainof
custody certification, and 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 sawmill. With a total
of five sawmills, strategically located near
our forest holdings in various parts of
Sweden, we have good control over our
raw material.

Strong underlying growth 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
climbed almost 25 per cent in the past
decade, propelled largely by increased
consumption in China and in the US
market.

The real estate sector accounts for a
third of carbon emissions in Europe and
the construction industry is working hard
to reduce its carbon footprint. Within the
ongoing green transition, wood as a
construction material has a great deal in
its favour, since wooden buildings
continue to store carbon dioxide within
the structures, instead of generating
emissions. This trend is expected to
strengthen, boosting demand for wood
products, particularly if concrete and steel
are made to carry their true cost to the
climate. There is great growth potential,
not least for highrise buildings, and the
proportion of housebuilding in wood is
expected to rise as the capacity for
industrial wood construction expands.

Wood Products

Holmen Annual Report 2022

Magasin X is Sweden’s largest office block in wood.

With mArtinsons We build the
Wooden houses of the future

The acquisition of Martinsons in
autumn 2020 saw Holmen take a
real leap forward in the market for
modern wood construction. Together
we form a strong and stable value
chain, from seed to finished
wooden building.

Martinsons was founded in Bygdsiljum
in the late 1920s and in the 1960s the
company began to take an early interest
in the glulam being manufactured in
Germany. The management spotted the
potential of the material and decided to
launch their own production. In 2003 they
launched their first construction system
in CLT, a new way of building in wood that
further reinforced Martinsons’ position at

the cutting edge of developments in wood
construction. Since then, Martinsons’
structural frame systems in glulam and
CLT have secured an increasingly vital role
in the future of construction, and all the
wood for the frames is still supplied by
Holmen’s sawmill in Bygdsiljum. Today,
the business covers development and
design, as well as sales, project
management and assembly.

Function, sustainability and
economics
Wood is a fantastic material and making
use of all its good properties is allowing us
to create new opportunities to build both
quickly and economically. Whether the
focus is on halls, highrise apartment

blocks or other kinds of buildings, our
ambition is to play an active part in building
a more sustainable society.

Through Martinsons, we offer brand
new opportunities for wood construction.
When it comes to function, performance
and overall cost, frame systems in glulam
and CLT have a central role to play.

In our drive to constantly explore
new ways of building in wood, we are
continuing to push the boundaries of
what is possible. We develop business
premises, sports halls, schools and other
public buildings based around financially
smart construction systems, as well as
building apartment blocks and office
buildings that enable people to live and
work in pleasant environments.

Holmen Annual Report 2022

Wood Products

With its seven floors and total
floorspace of 16 600 m2, Magasin X is
Sweden’s largest office block in wood
– located in the heart of Uppsala. The
project was run jointly with NCC and
the timber frame was supplied by
Martinsons as part of a turnkey
contract that included responsibility
for the planning, manufacture and
assembly of the frame. The building
was completed in 2022.

the mAny Advantages
of Wooden buildings

Spending time surrounded by wood
boosts health and wellbeing. It is
thought that the reasons for the
positive effects include the
naturalness of the material and its
positive impact on indoor air quality,
moisture balance and acoustics.

Wood is seen as an attractive and natural
construction material. Exposed details in
wood help to create light and pleasant
indoor environments, while the material’s
moisture buffering properties also
contribute towards a good indoor climate.
The wood absorbs moisture at humid times
of the year, which it then releases at drier
times, levelling out the relative humidity
indoors. Put simply, wood produces a
healthy and pleasing living environment.
Being surrounded by wood feels very
natural and is also much sought after by
today’s well-informed consumers. From
an environmental perspective, renewable
building materials are the only sustainable
option, and as knowledge and interest
grow, we are increasingly realising the
importance of making conscious choices.
Studies also show that wood has a

positive effect on humans, and that
people who spend time in natural settings
feel better. Patients, for example, recover
faster in environments with exposed
wood and it reduces our stress levels.
Essentially, we become healthier, happier
and more productive when we spend time
anywhere with a connection to nature.

Six reasons to build in wood

1. Good for the climate
Wood products are made from

renewable raw material in a process
with a low climate impact. As a natural
part of the ecocycle, they store carbon
for their entire lifetime and when the
time comes to demolish a wooden
building, the material can be reused,
recycled or used for energy production
to heat other buildings.

2. Energy-efficient material production
In contrast to steel and concrete, the
manufacture of wood products is highly
energy-efficient, a key consideration in
a world facing energy shortages.

3. Light and easy to work with
Wood is around five times lighter than

concrete and therefore puts less
pressure on the foundations. This low
weight also makes installation easier,
using a relatively small crane, and
transport much more energy-efficient.
What is more, the material can be
worked on using simple hand tools.

4. High load-bearing capacity and

large spans

Their highly engineered structure
means that glulam and CLT are
dimensionally stable materials with an
impressive loadbearing capacity that
makes it possible to achieve large
spans. This allows for flexible structures
that open up design freedom in a wide
range of contexts.

5. Shorter construction time
Most wooden buildings are prefabricated
in factories and assembled on site. Large
elements and efficient joints enable
rapid assembly, thus bringing down the
construction time.

6. Less noise
Since wooden structures don’t generate
noise during onsite assembly, wood is
increasingly being chosen when
building new, temporary or additional
floors on top of existing buildings. This
provides a better work environment,
and neighbours are not disturbed nearly
as much, or for as long, as they would
be with builds using steel and concrete.

Wood Products

Holmen Annual Report 2022

Key figures

Operating profit/loss and return

Comment on results

2022

2021

6 735

6 261

1 081

673

Net sales, SEKm

Operating profit/loss
excl. items affecting
comparability, SEKm

Investments, SEKm

555

399

Capital employed, SEKm

5 632

5 169

Average no. of employees
(FTE)

1 290

1 263

Deliveries, ’000 tonnes

503

544

SEKm
1 250

1 000

750

500

250

%
25

1 081

Demand for paperboard for consumer
packaging held up well and market prices
settled at a higher level over the year.
Price rises, combined with a favourable
energy situation at the paperboard mills
in Iggesund and Workington, helped boost
profits to SEK 1 081 million, despite
elevated raw material costs.

Operating profit

excl. items affecting comparability
Return on capital employed
excl. items affecting comparability

European demand for SBB and FBB

Price development FBB

Mtonnes
4

Index
160

120

Holmen Annual Report 2022

Paperboard

premium paperboard for
conscious brands

Holmen Iggesund is a market leader
in the production of high-quality
paperboard. The strategy is to grow
globally with our strong product
brands by combining high quality,
custom products 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 three
brands: Invercote, Incada and Inverform.

The quality, strength and design

properties of the paperboard mean that
we can create worldleading products
for conscious brand owners with high
ambitions.

Clear product benefits from
fresh fibre
Our paperboard products are
manufactured 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
combination of fresh fibre and a multi-
tiered structure, with layers of different
fibre types forming the basis for the
paperboard’s outstanding performance.
This allows us to work with our customers
to develop better packaging solutions that
are more fit for purpose.

And because the paperboard is

made from a renewable, recyclable and
biodegradable material, we can develop
products that encourage more circular
packaging systems. When the paperboard
is recycled, it also provides a necessary
injection of fresh fibre into the recycled
fibre industry.

Circular production process
Our facilities for paperboard production
and processing are located in Iggesund
and Strömsbruk in Sweden and in
Workington in the UK. The paperboard
mills hold chain-of-custody certification
and all the wood raw material comes from

sustainably managed forests. The plants
are also largely self-sufficient in
renewable thermal and electrical
energy, which gives the products a
low carbon footprint.

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.

Both Iggesund Mill and Workington
Mill have received a Platinum rating from
EcoVadis for their successful sustainability
work. In the latest review, Iggesund Mill
was also ranked number one in its class
by the international analysis firm,
cementing the mill’s worldbeating
status on sustainability.

Investments in increased capacity.
With local wood raw material from our
own forests and a sound energy
situation, Iggesund Mill is ripe for further
development. The aim of upcoming
investments is to increase paperboard
production at Iggesund by 25 per cent
over time.

Our customers’ choices make
a difference
We want to help our customers to make
more renewable choices, so that more
carbon atoms can be left in the ground.
The next generation of packaging
solutions is being created in close
collaboration with our customers and
partners. As we learn together, we are
identifying new applications for our
paperboard products and we are well
placed to use our collective knowledge
to create packaging solutions that really
make a difference.

A smarter alternative to plastic. One
of the greatest challenges facing the
packaging world is the switch from plastic
to more sustainable packaging materials.

The problems with plastic lie both in its
fossil raw material and the enormous
quantities of plastic that are polluting our
oceans. 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.

Close collaboration with customers.
With its high and consistent quality, our
paperboard ensures stable results in the
customer’s production process, and the
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 cover everything from advice
and product samples to service centres
with local sheeting 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

environmental documentation and access
to analysis facilities at the company’s own
accredited 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 solutions that meet the
toughest requirements.

Growing packaging market
Demand for packaging is rising in line with
factors such as population growth,
urbanisation, an expanding middle class
and more singleperson households.
Demand in the various product segments
varies depending on the market, but there
is a general increase in demand for
renewable packaging materials.

Being able to offer paperboard products

of the highest quality, with a low climate
footprint, that are also made from a
raw material that is traceable back to
sustainably managed forests puts us in a
strong position in the premium segment.

Paperboard

Holmen Annual Report 2022

versatile packAging
that mAkes A difference

The choice of packaging material
can make a big difference in the
transition from fossil sources to
renewables. Companies and brands
in all industries have set ambitious
targets to support progress towards
more sustainable alternatives, and
Holmen is constantly exploring
new packaging solutions and
applications for our paperboard.

In our view, packaging should protect
products, people and our planet.
Switching to renewable and recyclable
packaging materials is a way that all of us
can help to make a difference – both today
and for future generations.

A smarter alternative
Inverform is a formable paperboard
product specially developed to replace
food packaging in plastic and aluminium,

and compared with fully plastic packaging,
its carbon footprint can be as much as 60
to 80 per cent lower. The paperboard is
normally supplied with a functional barrier
that keeps the food fresh and stops it
being affected by external factors,
ensuring a longer shelflife and reduced
food waste. Just like our other paperboard
products, Inverform has optimal
whiteness and a smooth surface that
offers superb printability. Made from pure
wood fibre, the paperboard delivers a
natural feel that is much appreciated by
both brand owners and end customers.

A conscious choice
Plastic can be an excellent material, when
used correctly. However, widespread use
of plastics also has many downsides, not
least the major climate impact from the
fossil raw materials used in their
manufacture and the risk of plastic

particles ending up in the oceans and
nature, where they can’t be decomposed.
When developing Inverform, we wanted

to create a renewable and recyclable
packaging solution that would be more
ecofriendly than plastic, but with the
same good packaging performance along
the whole value chain – from factory to
warehouse, via the restaurant or store to
the end consumer.

We can do the most good together
Our customers’ choices make a difference.
And the best thing we can do for the
climate is to help more customers to
replace fossil sources with renewables.
An informed choice of packaging material
can significantly reduce our customers’
climate impact and help to keep plastic
out of our natural environment.

Holmen Annual Report 2022

Paperboard

Customer-driven product
development creating
packaging of the future

Working and developing alongside our customers, suppliers
and partners lays the foundation for our co-learning, which in
turn anchors and improves our position in the paperboard
market, enabling us to advance further than we would be able
to on our own.

The world is in a constant state of flux, and everything is moving ever
faster. We know that the only way to remain one step ahead is for us to
quickly adapt to the changes that occur. We also need to constantly
learn more about our customers’ need for new technology and new
methods. This is how we will remain relevant and secure our position
as the leading manufacturer of premium paperboard, all while
delivering what our customers want – sustainable packaging solutions.
We all need to be part of the solution in the necessary but formidable

transition from fossil to renewables. As such, we need to be open and
take every opportunity we can to share knowledge and collaborate. The
next generation of packaging solutions is being created in close
collaboration with customers and partners. We take on the challenges
and opportunities of the future by learning together. The focus might
be on anything from replacing traditional plastic payment cards with
paperboard alternatives, to coming up with creative packaging that
helps our customers to boost their brand. The emphasis of our
collaborations is on sharing our knowledge and experience as a means
of developing longterm relationships. These exchanges give us
insights into the customer and the segment, while also developing
our own knowhow and gaining valuable feedback on our products
and solutions.

Our customers, partners,
employees and, not least, the
users of our products are all
part of Holmen’s circular
business, and every new
relationship is an opportunity
to expand the positive ripple
effect of our actions.

Paperboard

Holmen Annual Report 2022

Paper

innovative paper products
from fresh fibre

Holmen develops fresh fibre-based
paper for books, packaging and
graphical publications. Our papers
are lightweight compared to
traditional alternatives, making
them resource-efficient without
compromising on quality or the
overall impression. Our strategy is
to deliver and constantly develop
products that are competitive
over time.

Holmen is a market leader in the
development of new paper products
based entirely on fresh fibre. In contrast
to recycled fibre products, fresh fibre
produces a naturally high brightness for an
improved experience of text and images.
Our 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.

Holmen has been making paper for
more than 100 years and has unparalleled
expertise. We are convinced that, as a
material, paper has an important role to
play in society, today and tomorrow. With
fresh fibre as the foundation, we are
continuing to develop our position in a
changing market, in both existing and
new segments.

Paper with the power to
communicate
Our customers are largely publishers,
printing firms and retailers looking for
resource- and cost-efficient papers with
a focus on bulk, brightness and overall
impression. We take a longterm approach
in working to meet customer demand and
create profitable products for books,
magazines and printed advertising.

Book paper. Holmen’s book paper is the
leading product for paperback books in
Europe. With its high bulk, it helps
customers to achieve efficiencies in both
production and distribution, while also
having a low carbon footprint. Publishers
further appreciate Holmen’s book paper
because it offers product properties – in
the form of a bright, smooth surface – that
enhance the reading experience.

Graphical paper. We have a wide range of
papers for magazines and advertising. The
combination of high bulk, whiteness and
brightness makes our magazine paper a
competitive choice.

Direct mail is still considered an

important communications channel for
driving customers to both physical stores
and online retail. Holmen’s lightweight
paper offers customers the potential to
increase the format or the number of
pages or copies without adding to the
cost, or simply to bank the pure savings
on both paper and distribution.

Successful launch of packaging paper
In a world where goods and products are
increasingly being distributed globally
and often directly to households, it is
becoming even more vital to ensure that
the packaging materials are sustainably
produced and based on renewable
materials. Our light but strong and stable
packaging paper from fresh fibre reduces
transport emissions and gives customers
a chance to replace fossilbased
packaging. The launch of paper for
corrugated packaging sees us taking the
next step in our development of paper
products for the future.

Production with a low climate
footprint
With renewable raw material, fossilfree
electricity and resource-efficient produc
tion, we are able to offer products with a
low climate footprint. Customer interest
in our climatesmart products continues to
grow, in a trend that matches our strategy
of helping our customers to achieve a more
sustainable business. Investments have
boosted capacity in selected product areas
and our development of new paper prod
ucts involves close collaboration with
customers and partners.

Circular ecocycles. Holmen’s paper is
produced at two Swedish mills, Braviken
and Hallsta. Strategic logistical locations
ensure short transport distances for the
wood and proximity to ports with good
capacity. The raw material for our paper
comprises residual products from nearby
forests and sawmills, which are employed
in a circular ecocycle where nothing goes
to waste. Environmental and chainof

custody certification enables us to ensure
that the raw material for our products
always comes from sustainably managed
forests. In the most recent review in
2021, both mills were awarded EcoVadis
Platinum. This puts them in the top flight
of companies around the world that have
been assessed on their environmental,
ethical and social performance.

Uniquely, production at Hallsta Paper
Mill is entirely fossilfree. The mill’s energy
solutions include recovering 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
Sawmill make an energy-efficient unit.
The paper mill receives raw material in the
form 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.

Without fresh fibre, there is no recycled
fibre. The supply of fresh fiber is limited
and paper manufacture in continental
Europe is largely based on recycled fibre.
But paper cannot be recycled again and
again forever. The wood fibre becomes
exhausted after a limited number of uses
and the cycle thus has to be continually
topped up with fresh fibre in order to keep
functioning and maintain a sufficiently
high level of quality. Our fresh fibre-based
paper is therefore essential to the
European recycled fibre system.

Opportunities in a challenging
market
The market for graphical paper has
experienced an underlying structural
decline over many years. Demand varies
across the segments, with the book
market remaining stable, while other
graphical segments such as magazine
paper have weakened. The packaging
market is growing strongly, but amid heavy
competition, as many manufacturers have
switched their printing paper production
over to packaging materials. Our paper
products have good competitiveness, not
least due to resource-efficient production
using local wood raw material and fossil
free electricity, giving the products a low
climate footprint.

Holmen Annual Report 2022

Paper

Key figures

Operating profit/loss and return

Comment on results

2022

2021

Net sales, SEKm

8 370

5 441

Operating profit/loss, SEKm 2 714

Investments, SEKm

186

129

Capital employed, SEKm

1 939

1 637

Average no. of employees
(FTE)

842

854

Deliveries, ’000 tonnes

995

1 029

SEKm
3 000

2 500

2 000

1 500

1 000

500

2 714

139

Despite declining demand in several
segments, paper prices climbed to record
levels over the year, driven by energy and
fibre shortages. Profit rose to SEK 2 714
million thanks to higher selling prices and
our ability to adapt production to an
environment of volatile electricity prices,
combined with electricity price hedging.

%
180

150

120

Operating profit
Return on capital employed

European demand for paper

Price development

Ktonnes
20 000

15 000

10 000

5 000

Index
1 200

900

600

300

Uncoated magazine and book

Coated magazine

Newsprint

Uncoated magazine
Coated magazine
Newsprint

Paper

Holmen Annual Report 2022

Paper

innovative paper delivers
light And strong packAging

Holmen INNR is a new fresh fibre-
based paper product that not only
broadens our product range, but also
encourages more climate-smart
packaging.

2021 saw the launch of Holmen INNR
as an interliner, the innermost layer in
multilayered corrugated board. The
market responded positively and the
product was further developed in
collaboration with our customers, who
provided valuable feedback on what they
needed from future packaging paper.
Alongside this, work continued on
improving the strength of the paper so
that it could also be used for fluting, the
wavy layer in corrugated board. Following
a year of development work and extensive
testing, in 2022 we were ready to add
Holmen INNR fluting to our market
portfolio. The product arrived at exactly

the right time, as the shortage of recycled
paper during the pandemic prompted
European corrugated packaging
manufacturers to begin seeking out new
suppliers. With a product that is neither a
traditional kraftliner or based on recycled
fibre, Holmen has created a whole new
market segment as the only European
supplier of interliner and fluting made
from thermo-mechanical pulp (TMP).

A lighter paper is a smarter paper
Holmen INNR in a grammage of 73 grams
is just as strong as recycled paperbased
fluting of 80–85 grams, but weighs less
per square metre. Since paper is traded
in volumes by weight, the customer can
thus buy less paper, or get more square
metres per tonne.

Holmen INNR also delivers a significant

difference in climate impact. Calculated
according to industry association CEPI’s

guidelines, the carbon footprint for
Holmen INNR is only 87 kg CO2 per ton
of paper, while the average figure for
recycled paperbased liner and fluting
in Europe is a much higher 838 kg CO2
according to data from FisherSolve.

Like all our papers, Holmen INNR is
made from fresh fibre, which is one of
the reasons why it is so light. The key
innovation comes not from the paper
per se, but from the concept – creating
corrugated board that is lighter than any
other packaging material, but still strong
enough to handle longdistance shipping.
The lower weight also means lower energy
consumption during distribution, which
reduces both the overall carbon footprint
and the cost of shipping. We know that our
customers’ choices make a positive
difference. And the best thing we can do
for the climate is to help more customers
to make smarter choices.

Holmen Annual Report 2022

Paper

838
↓
87

The carbon footprint of Holmen INNR
is 87 kg CO2 per tonne of paper, which
compares very favourably with the average
footprint of recycled paper-based liner and
fluting in Europe, at 838 kg CO2.

An orgAnisation
that thinks
differently

Within Holmen, we want to create a learning organisation
that sees opportunities where others see challenges, whether
creating the products of tomorrow or adapting to a changing
world.

The development of INNR is a prime example of a learning organisation
and a successful collaboration within the company. Over recent years,
demand for graphical paper has declined while at the same time
demand for packaging paper has rocketed, powered in part by the rise in
online retail. As part of our drive to continue growing in new segments,
autumn 2020 therefore saw us begin to develop a stronger paper for the
packaging industry.

Moving into the packaging market brought us up against a whole

new set of challenges. Compared with graphical paper, packaging paper
has to be stronger in order to survive greater stresses. In contrast to
graphical paper, packaging paper also needs to have high compression
strength, meaning that it can take higher pressure against the paper
surface without the paper tearing.

Development of the new product was a real team effort that

involved large parts of the business area’s organisation, from business
development, marketing and sales to the R&D departments and labs at
the paper mills. And progress was fast, with just a few months between
the first enquiries coming in and the first order being delivered.

Managing the energy crisis
Another challenge for the organisation has been the leap in energy prices
over the past year. Holmen’s two paper mills account for over 90 per cent
of the Group’s electricity consumption, which means they have to bear the
brunt of the high and rapidly changing electricity prices. The industry is
designed to run at maximum capacity 24 hours a day, as this is the most
resource-efficient. However, there is a breakeven point for the viability of
producing paper, since a high electricity price cannot automatically be
reflected in price rises for customers.

To manage the high electricity prices, we have therefore been

forced to think on our feet and adapt production to the prices
wherever possible. We have, for example, increased the energy
intensive production of paper pulp at night, when the price of electricity
is lower, in order to create a buffer that means we can produce less when
the prices are higher.

The level of engagement has been high across the organisation, and
the work on developing ourselves, our products and our production is by
no means finished. On the contrary. Because we know that the best way
to contribute to our continued success is to challenge ourselves and put
our knowledge and experience to the test.

Paper

Holmen Annual Report 2022

Renewable Energy

green energy from our land

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. 2022 saw us take the next
step in developing our renewable
energy business, with the
construction of the wind farm in
Blåbergsliden and the acquisition
of Varsvik.

Holmen produces renewable energy from
water and wind. Hydro power is an
important source of energy for society
as production output can be adjusted and
has an almost infinite lifetime and minimal
climate impact. Our strategy is to increase
the production of renewable energy by
building wind farms on our own land as a
complement to existing hydro power,
which is uniquely controllable. This will
help to increase the amount of renewable
electricity on the market, which is a
cornerstone of the transition to a
sustainable society.

Europe switching to renewables
The European energy market is undergoing
a major transition due to the issue of
climate change. 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 fossilfree sources.
Together with increasing electrification of
both transport and industry, it is clear that
electricity consumption is set to increase,
creating additional demand for more
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 in
transmission capacity within Sweden will
therefore be needed.

Strength in own energy assets
Holmen supplied 1.6 TWh renewable
electricity from hydro and wind power in
2022. Together with the renewable

electrical energy that is produced at the
Group’s mills, our production of hydro and
wind power equates to around 55 per cent
of Holmen’s overall electricity
consumption.

Hydro power stabilises the electricity
market. 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 baseload 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 value of this
stabilising capacity has increased in
recent years, and with it the market for
different forms of ancillary services that
contribute to a stable electricity system.
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. The climate impact of
the operation is also marginal, with
minimal emissions. Overall, hydro power
brings major benefits to society as part of
the move towards a fossilfree electricity
system.

Wind power creates opportunities
The energy system is changing as fossil
energy sources are phased out. Wind
power is currently the fastest growing
energy source in the EU and the third
largest method of generating electricity
in Sweden. Recent years have seen
enormous technical advances in wind
power, with longer rotor blades, larger
generators and higher towers dramatically
reducing the cost of wind power per
kilowatt hour produced. As a consequence,
wind power is now the cheapest way of

producing new renewable electricity in
Sweden. As a major landowner, Holmen
has considerable opportunities to build
wind power at a competitive cost, and we
have several projects in different phases of
development.

Increased production on own land. This
year saw the opening of Blåbergsliden
Wind Farm outside Skellefteå. The 26
wind turbines, with annual production
totalling 0.4 TWh, are able to supply
around 100 000 households with
renewable electricity. Over the year, we
have also acquired the outstanding shares
in Varsvik Wind Farm, which was
previously coowned with an investment
fund for renewable energy. Opened in
2014, the wind farm in Varsvik is an
attractive asset in many ways, particularly
considering it is located next to Hallsta
Paper Mill in electricity area SE3. These
investments boost our renewable energy
production by 40 per cent, marking a
significant step in the development of
Holmen’s renewable energy business.

Energy crisis in Europe
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 and the price is set according to
the most expensive means of production.
However, the rapid phasing out of fossil
energy production on the continent made
its impact noticeable when the world
started up again after the pandemic
without sufficient expansion of fossil-free
alternatives. Russia’s invasion of Ukraine
and stranglehold on gas deliveries to
Europe sparked an energy crisis that has
led to significant difficulties in sourcing
enough energy for households, transport
and industry, prompting unprecedented
price hikes.

The energy shortage in Europe also
affected Swedish electricity prices, while
at the same time the price differences
within Sweden were unusually large due
to nuclear closures and limitations in
transmission capacity between northern
and southern parts of the country.

Holmen Annual Report 2022

Renewable Energy

Key figures

Operating profit/loss and return

Comment on results

2022

2021

Net sales, SEKm

1 226

Operating profit/loss, SEKm 1 006

Investments, SEKm

237

488

347

712

Capital employed, SEKm

4 618

4 069

Average no. of employees
(FTE)

Deliveries of hydro and wind
power, GWh

1 639

1 230

SEKm
1 200

900

600

300

1 006

%
32

As a result of the energy crisis in Europe,
electricity prices in Sweden rose to record
levels during the year, although due to grid
limitations, the price of electricity was
lower in northern Sweden, where the
majority of Holmen’s production is located.
Higher electricity prices, the expansion of
wind power and higher remuneration for
hydro power’s ancillary services to help
stabilise the electricity system boosted
profits to SEK 1 006 million.

Operating profit

excl. items affecting comparability

Return on capital employed

excl. items affecting comparability

European energy consumption, %

European electricity consumption

Price development

TWh
6 000

4 000

2 000

0
96

EUR/MWh
600

400

200

Electricity
Fossil gas
Oil
Coal
Other

Fossil fuels
Nuclear power
Renewables

Source: Our World in Data

Fossil fuels

Nuclear power

SE2 (Sundsvall)

SE3 (Stockholm)

Renewables

Germany

Fossil gas

Renewable Energy

Holmen Annual Report 2022

Renewable Energy

hydro poWer
helps towArds
A stable
energy system

Holmen’s hydro power is a valuable asset that
generates renewable electricity at a low cost and has
a lifetime bordering on the infinite. Since production
can be concentrated at times when the electricity is
most in demand, hydro power is also crucial for the
transition to a fossil-free energy system with
widespread use of weather-dependent energy
sources.

For our electricity system to function
reliably, we need a constant balance
between the electricity produced and the
electricity consumed. As the expansion of
weatherdependent energy sources such
as solar and wind power increases, along
with the phasing out of fossilbased
generation, there is a growing need for
plannable energy production, known as
‘regulating power’. Hydro power provides
regulating power in two ways – water can
be stored in reservoirs and lakes ready for
times when electricity demand generally
increases, such as winter, and hydro
power production can quickly be adapted
to ensure a stable and reliable power grid.
‘Ancillary services’ is an umbrella term

for the different techniques used to
stabilise the electricity system and ensure
that it works properly. There has always

been a need for these stabilising ancillary
services, but they have become more
critical with the vital expansion of more
renewable energy sources. The market for
ancillary services has also developed as
demand has become more pressing.

One of the tasks of Svenska Kraftnät
(Transmission system operator in Sweden)
is to ensure a stable electricity grid
across the country. This is done in part by
purchasing hydro power production that
is kept in reserve to run the network at a
stable frequency of 50 Hz. A number of
Holmen’s hydro power plants provide this
type of service. Thanks to hydro power, we
therefore have electricity when we need it,
while also supporting the stable and
secure expansion of other renewable
energy sources.

Income hydro power*, SEK/MWh

600

400

200

As Sweden’s biggest source of
renewable energy, hydro power
currently accounts for around
40 per cent of overall electricity
generation.

Q1-21

Q3-21

Q1-22

Q3-22

Q2-21

Q4-21

Q2-22

Q4-22

* Ancillary services, timing and guarantees of origin.

Holmen Annual Report 2022

Renewable Energy

We build Wind poWer
on our oWn lAnd

Holmen owns 1.3 million hectares
of forest and land in Sweden,
equivalent to almost two million
football pitches. As a major
landowner, we have unique
opportunities to find favourable
locations for wind power, thus
contributing to the green transition.

Holmen has already completed much
of the energy transition, which has
dramatically reduced our fossil emissions,
but we do still have energyintensive
production sites. In combining forestry and
renewable energy production in our
forests, we are taking responsibility for our
own electricity consumption, while playing
our part in the energy transition that
society so badly needs. Wind power also
works well with forestry as it requires
relatively little space and the roads that are
laid for the wind farms can be used to
improve access for the general public,
forestry activities and transport in the
local area.

Holmen’s strategy for wind power is to
plan, own and manage wind farms on our
own land, an approach that has several
benefits:

Major landowner
Surveys and analyses of our substantial
land holdings enable us to identify areas
with favourable wind conditions and
address the unique circumstances
of each site, covering everything from
consideration for local residents and the
environment to the scope for connecting to
the existing power grid.

Consideration for nature
Holmen’s forestry is certified to the
FSC® standard, which means that we pay
extra attention to our environmental
impact in the areas where we establish
wind power, and we never erect wind
turbines in areas that have high
conservation value or are key biotopes.

Good local knowledge
As a landowner, we are also fully familiar
with the areas we investigate. It is
important for us to have good relations
with local residents, nearby property
owners and businesses that may be
affected by our activities. They are, after
all, our neighbours.

Long-term responsibility
We take the long view, as both a landowner
and an energy producer. As a forest owner,
everything we do has a longterm
perspective, and that goes for our wind
power projects too. We take responsibility
along the whole journey, from planning to
the future operation of our wind farms.

Wind analysis of Holmen’s land holdings

No. of areas Total area, hectares

Analysed areas with potential for wind power
Of which, areas judged suitable for wind power
Priority areas where we are conducting more detailed analyses

261
136
24

377 000
224 000
64 000

Holmen’s entire land holdings, totalling 1.3 million hectares, have been analysed, with an initial
screening flagging up 261 areas with wind power potential. Of these, 136 areas are judged suitable
sites for wind power, with 24 of them now undergoing more detailed analysis. In addition to these 24,
we have around 10 areas in different phases from detailed analysis to processing of permit applications.

Renewable Energy

Holmen Annual Report 2022

A sustainable business

We manage the forest
while preserving
biodiversity

Our products replace
fossil-based products
and can be reused to
make recykled paper
and energy

Our mills and sawmills
are resource- and
energy-efficient

We produce
renewable
energy

Our growing forests
capture carbon
dioxide

We use all the
raw material

TogeTher we
are circular

The transition to a fossil-free
society demands more renewable
material, which means that
the earth’s surface needs to be
managed more efficiently and to a
greater extent. But it also means
we need to manage our resources
more efficiently and use them
more wisely.

The forest has the capacity to provide
many benefits at the same time, making it
a valuable resource not only for Holmen
but for society as a whole. A tree binds
carbon dioxide while it is growing. When it
is harvested and turned into planks and
boards, the carbon stays in the wood –
until someone demolishes the building,
changes the windows or builds a new
deck. The great thing is that the wood can
then be reused or converted into fossil-
free bioenergy, creating value once more.

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 further 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
bioenergy. We are also the only forest
company in the Nordic region to use our land
to produce renewable energy from wind and
water. Over the years, we have improved our
capacity to create value in every part of our
operations. Today, growing, healthy forests,
efficient management of raw materials and
circular ecocycles are not merely essential
to our profitability, they are also the
cornerstone of a genuinely sustainable
business. We have the expertise to make the
forest grow and give. Over and over again.

A circular business that is bigger
than Holmen
We create the greatest benefit for the
climate together with our customers. We
give quality-conscious customers across
the world access to products from the
Swedish forests. Our customers, partners
and, not least, the users of our products
are all part of Holmen’s circular business
and their choice of renewable products
from the forest, from wind and from water
makes a positive difference. The best
thing we can do for the climate is to help
more customers to replace fossil sources
with renewables.

Recycled paper grows in the forest. Our
customers become part of an ecocycle
that creates benefit and value at every
stage. When the products they buy can be
reused or recycled, these too become part
of the forest ecocycle. One example is
when our paperboard and paper products,
made using fresh fibre, are used for
packaging or for graphical purposes and
are then recycled. This feeds the recycled
paper system, which needs a constant
injection of fresh fibre if it is to continue
functioning, as wood fibre can only be
recycled a limited number of times before
it wears out. This is why we often say that
recycled paper grows in the forest.

A virtuous circle. To avoid linear flows, we
need to use renewable raw materials. But
if the circular society is to become a
reality, phasing out fossil raw materials
won’t be enough. We will also need more
renewable products, and even better
ones. This is why we are working with our
customers and industry organisations to
develop products and processes that can
make recycling easier and do their bit for
the green transition.

Holmen Annual Report 2022

A sustainable business

--------➔ ; : : :,,.,.;,: -''-l'We grow houses but we produce more than wood products

Holmen’s two nurseries produce almost
45 million seedlings each year, the
majority of which are planted on the
Group’s own land. After 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.
Environmental and chain-of-custody
certification enables us to ensure that
the raw material for our products always
comes from sustainably managed forests.

We grow houses. This means that we
manage the forest to produce as much
wood as possible and we saw as many
planks and boards as we possibly can
from the trees we harvest. But not
everything can be turned into construction
materials. This is because tree trunks are
round and planks have corners, and
because trees also have branches, knots
and bark. We make use of 100 per cent of
the raw material. About half of the harvest
consists of large logs that are used to
produce construction material used for
houses and interiors, for example. The
narrower part of the tree and wood from
thinning represent about half of the
harvest and are used with residual
products from the sawmills in the form of
wood chips to manufacture paperboard
and paper. The remainder comprises
branches, tops, bark and wood shavings,
which are used to produce bioenergy.

The harvest

5%
Branches, tops, bark and wood shavings
become renewable bioenergy which can be
used to produce electricity, heating and
biofuels.
45%
The narrower parts of the tree and wood from
thinning are ground or digested down into pulp,
which is used to produce paper and paperboard.
50%
The large logs that make up half of the harvest
go to sawmills where they become building
materials in the form of construction timber
and joinery products.
About half of these logs in turn become
wood products, while residual products such
as wood chips and wood shavings are used to
produce pulp and bioenergy.

The tree trunk

Wood – Planks and boards
Wood chips – Pulp for paper
Bark – Bioenergy
Wood shavings – Bioenergy

Resource-efficient production in circular ecocycles

No part of the trees we harvest goes to
waste. When deciding what to make out of
the different parts of the tree, greatest
value added is the key criterion and the
resulting residual products are used in
other processes. We see this as good
business practice and responsible
resource management.
Holmen’s production plants are among
the most resource-efficient 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 sawmills are used to generate
electrical and thermal energy in the mills,
organic material from the water treatment
process is sold on as soil improver, and
steam from the mills is used in the drying
processes at the integrated sawmills.
Another example is the way that residual
products from Iggesund Mill are used to
cap a former industrial landfill site.

Distribution of by-products
and waste, %

0.5

0.1

37.9

61.4

To energy production internally/

externally

To material production
Waste sent to landfill
Hazardous waste

61.4
37.9
0.5
0.1

Reusing water. Holmen’s industries
use surface water from lakes and
watercourses, partly to transport and
wash fibres in the mills and also for
cooling and steam production.
Different combinations of mechanical,
biological and chemical processes treat
the water in several steps before it is
returned to the natural ecocycle. Here
we are working to ensure healthy and
thriving aquatic environments in the
vicinity of our mills.

By-products and waste. Holmen strives
to minimise the amount of waste it
produces and to use as high a proportion
as possible of the by-products that arise.
Thanks to our efforts to find alternative
uses, today only 0.5 per cent of the by-
products and waste we produce is sent
to landfill.

A sustainable business

Holmen Annual Report 2022

A sustainable business

Limited supply of
forest raw materiaL

The forest plays a pivotal role in
the climate transition. This is
especially true when we look at
sustainable building. The whole
chain from seed to wooden
building relies on active and
sustainable forestry to produce the
raw material needed. But while the
forest is a renewable resource, the
supply of this raw material is
limited across much of the world.

Higher demand for sustainable
construction materials
The construction and property sector
accounts for considerable emissions of
greenhouse gases, in construction and
during the building’s lifecycle. In Europe,
35 per cent of emissions of fossil carbon
dioxide come from buildings, driving
demands for more sustainable
construction. Unlike steel and concrete,
wood products store carbon dioxide when
they are in use, while at the same time
reducing demand for products with a high
carbon footprint. The phasing out of
emission allowances will also make them
more expensive over time. Products that
generate major emissions becoming more
expensive is a further factor contributing
towards increased use of wood. In Europe
alone, more than 110 million m3 of wood
products were used in 2020 and demand
is expected to rise, while the amount of
wood products available is limited.

Forestry in different parts of
the world
Sweden is a country with major forest assets
that are actively managed, as is the case in
many other countries. However, Sweden’s
forests make up just over 15 per cent of
forests in the EU and less than 1 per cent of
forested land worldwide. Brazil, Canada, the

USA and Russia are the countries with the
largest amount of forest. In total, these four
countries account for almost half of the
world’s forests. Despite our comparatively
small size, Sweden is one of the world’s
largest producers of pulp, paper and wood
products, with a large proportion of
production being exported. Sweden is the
world’s third largest exporter of softwood
timber products and the sixth largest
producer.

110

million m3 of wood products were
used in Europe in 2020

Forestry conditions vary hugely between
different countries and regions, with
differences in forms of ownership having a
particular impact on the way forests are
managed and forest policy issues are
approached. In global terms, private
ownership is unusual. In Central Asia,
Russia, Canada and Africa, almost
all forests are state owned, while
approximately half of Europe’s forests
are in private ownership. 75 per cent of
Sweden’s forest is owned by private actors,
with almost 50 per cent being private
individuals and 25 per cent companies.

In Sweden we have managed our forests
for generations and forestry is deeply
rooted in our culture. Over the years, we
have developed long-term, rational
management of our forests and a well-
developed and industrialised forest
industry. The powerful rights of ownership
of the large number of forest owners,
combined with extensive legislation, have
also led to varied and sustainable forestry
with high growth. Over the past 100 years,
the amount of forest in Sweden has
doubled, while harvests have increased.

Risk of a global wood shortage
While demand for wood products is
expected to increase, global supplies of
wood are under increasing pressure.
Spruce bark beetle damage has had a
dramatic impact on the wood and wood
products market in Europe, as large
swathes of Central Europe have been
forced to increase harvesting to remove
damaged trees. In the long term, however,
this is expected to lead to lower volumes
due to the negative impact on future
supply, mainly of softwood saw logs.
Canada has also suffered major bark
beetle attacks in the past 20 years,
reducing the annual harvest from
approximately 75 million m3 per year
to just over 55 million m3.
On the European market, the war
in Ukraine has further reduced the
availability of wood raw material. In
the short term, this is affecting all flows
from Russia, Belarus and Ukraine, as
EU sanctions have halted wood imports
from Russia to Europe. In the long
term, political instability and neglected
infrastructure are expected to reduce
amounts of both logs and wood products
from Russia.

The worlds’ largest exporters of wood products 2021

Growth and harvest in Sweden’s forests*

Million m³

Million m3 growing stock, solid over bark

35
30
25
20
15
10
5
0

R ussia

C a n a d a

S w e d e n

G er m a ny

Finla n d

A ustria

B elarus

C hile

Latvia

C zech
R e p u blic

Source: FAO

Holmen Annual Report 2022

A sustainable business

140

120

100

1970

1980

1990

2000

2010

2018

Total growth

Harvest of living trees

Source: National forest inventory, Swedish Forest Agency, Swedish Forest
*Moving five-year average.
Industries Federation

HigH growtH in
tHriving forests

Historically, biodiversity has not
been a priority issue for Swedish
forestry, but the focus has shifted
over the past 30 years. Development
has been rapid and we have learned
a great deal about how we can
foster healthy ecosystems while
increasing forest growth.

The forests of today are growing
the houses of tomorrow
Holmen’s forest strategy focuses on
achieving high and profitable growth while
also ensuring that all naturally occurring
species can thrive in the Swedish forest
landscape. Of Holmen’s just over 1 million
hectares of forested land, we use about
80 per cent for wood production and we
always take far-reaching environmental
conservation into account when managing
and harvesting our forest. Because we
know that a varied forest environment
with deciduous trees, watercourses and
a wide range of animal species is vital to
functioning ecosystems and thriving forests.
Holmen has been managing forests
since the 17th century and over the years
has contributed to enormous industrial
advances. The trees we plant today will
grow for 80–90 years before they can be
harvested and become buildings and
homes and an awful lot can happen in
that time. The forest could be hit by
drought, fires, storms and pests. Active
management and thriving ecosystems
increase the resilience of the trees. Each
year, we invest SEK 170 million in caring
for our forests and constantly work to
improve everything from seedlings to
nature conservation through research,
development and education – all to
ensure good growth and healthy
ecosystems for future generations.

Good conditions for biodiversity in
the Nordic countries
Safeguarding global biodiversity is a critical
dimension of sustainable development,
and one that is closely related to how our
forests are managed. However, the natural
variation of biotopes and species in a given
area makes studying trends a complex
challenge.
The Biodiversity Intactness Index
models human impact on the natural
environment and estimates how high a
proportion of the original number of
species and habitats still remain. The
desirable level of biodiversity in an area is
at least 90 per cent, which can be seen as
a threshold value that biodiversity in an
area must exceed.
Sweden and Finland are two of the most
highly forested countries in Europe, both
comprising more than 70 per cent forest
land, much of which is actively managed.

According to the Biodiversity Intactness
Index, conditions in Sweden and Finland
are also good for functioning ecosystems,
with both countries having an index of just
over 95 per cent. This can be compared
with the global average of 77 per cent,
significantly lower than the 90 per cent
considered to be sustainable. The index
also shows that conditions for biodiversity
in Sweden have improved in the past
50 years.

The Biodiversity Intactness
Index
The index is based on the world’s largest
database of how ecological communities
have been affected by mankind and is used
to monitor biodiversity in different regions.
For further information, see page 114.

Biodiversity Intactness Index 2022

Biodiversity Intactness Index trends 1970–2022

100

Finla n d

S w e d e n

C a n a d a

Glo b al
average

P ortu gal

In d o n esia
Brazil

U S A

G er m a ny

Fra nce

In dia

100

1970

1980

1990

2000

2010

2020

2022

Sweden

Europe

Global average

In 2022, Sweden’s biodiversity intactness index was just over 95 per cent – a
level with good biodiversity and good prospects for functioning ecosystems.

Since 1970, the year from which data is available, the trend in Sweden’s index
has been better in comparison with both the European and the global averages.

A sustainable business

Holmen Annual Report 2022

A sustainable business

our con-
tribution
to a sus-
tainabLe
future

For Holmen, running a successful
business goes hand in hand with a
sustainable future. We are working
to be a positive force in society,
focusing on three areas where we
are especially well placed to make
a difference, not just in the future
but right now: climate, customers’
sustainable choices, and our
employees and the local communities
in which we operate.

GOOD HEALTH
AND WELLBEING

AFFORDABLE AND
CLEAN ENERGY

DECENT WORK
AND ECONOMIC
GROWTH

INDUSTRY,
INNOVATION AND
INFRASTRUCTURE

SUSTAINABLE CITIES
AND COMMUNITIES

RESPONSIBLE
CONSUMPTION AND
PRODUCTION

CLIMATE
ACTION

LIFE BELOW
WATER

LIFE ON
LAND

PARTNERSHIPS
FOR THE GOALS

We have been building our experience for 400 years and we con stantly
work to find long-term solutions to current challenges. Thanks to
sustainable use of our forests’ ecosystems, today we are able to
operate a circular, renewable and bio-based business that benefits our
customers, shareholders, employees and local communities. Our
production, business and organisation contribute to many of the UN’s
Sustainable Development Goals and thus also to the 2030 Agenda.

1. The climate
can’t wait

2. The power of

customer choice

3. We grow
together

We are part of a value chain in
which climate benefit is created
on multiple fronts and where
we control a large proportion of
the chain ourselves. We will
increase the positive impact of our
operations, while reducing our own
climate footprint at the same time.

The forest’s uptake of carbon dioxide will
increase through active and sustainable
forestry with high growth, while we
increase the storage of carbon dioxide in
our climate-smart products. We will also
cut emissions from our value chain, mainly
from transport and input goods, in line
with targets approved by the Science
Based Targets initiative*.

We create the greatest benefit
for the climate together with
our customers. Their choice of
renewable products from forests,
wind and water means that the
world is avoiding fossil emissions.
We make our customers part of a
circular business that creates value
at several stages of the chain.

Our customers’ choices make a positive
difference and the best we can do for the
climate is to help more customers to
replace fossil sources with renewables,
known as carbon substitution. The goal is
to help customers to choose more
renewable products so that more fossil
carbon atoms can stay in the ground.

We are committed to our
employees and our local
communities. We invest in
development and community
because when people and
communities grow, we can
grow too.

We create a positive working climate
through development and teamwork in
equal measures, with goal-oriented work
on health and safety, diversity and
inclusion. Forestry also fosters thriving
rural communities and enables people to
live, work and enjoy quality of life outside
the urban regions.

Target

We will increase the amount of carbon
dioxide stored in our products while
reducing our greenhouse gas emissions
in line with the Paris Agreement.

Outcomes are presented on pages 9 and 42.

We will increase the substitution of fossil
carbon dioxide through higher sales of
renewable products and renewable energy.

Outcomes are presented on pages 9 and 42.

We will be an attractive employer with
a healthy work environment free from
industrial accidents, discrimination
or harassment, and where employees
recommend Holmen as a workplace.

Outcomes are presented on page 47.

In the materiality analysis carried out in 2018, we identified these three focus areas where we see Holmen
having the greatest opportunity to contribute to sustainable development. The analysis included interviews
and workshops with about 50 stakeholders and was based on the ten principles of the UN Global Compact,
the UN’s Sustainable Development Goals and the mega-trends and external factors affecting our customers
and our industry.

*The Science Based Targets initiative is an
international framework for calculating UN body
the IPCC’s target of 1.5°C. Read more about our
climate targets at holmen.com.

Holmen Annual Report 2022

A sustainable business

Sweden has approximately 470 000 km of
private roads, about half of which are forest
roads. In other words, put together, these
forest roads would run more than five times
round the world.

A holistic approach
to sustainability

Holmen has been part of the
UN Global Compact and its
corresponding Nordic network
since 2007. Every year we report
on our work and on the progress
made in line with its ten principles.
Information on how Holmen is
working in line with and fulfilling the
principles of the UN Global Compact
is provided 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

Thriving rural
communiTies

Active forestry is essential to thriving rural communities. It
creates jobs in places where there are few employers and
gives people an opportunity to live, work and enjoy quality
of life outside the city regions.

Holmen is one of Sweden’s largest forest owners, with a land holding
of 1.3 million hectares divided between about 4 700 forest properties
from Småland in the south to Västerbotten in the north. We manage
our forests and harvest timber on our own land, but we also work with
private forest owners and other companies that are part of the Swedish
forest industry. Almost 15 000 private forest owners have chosen us as
a forestry partner. As well as our own 3 500 forest workers, we create
employment for local contractors and companies in many small
communities across the country.
Forestry also makes the forests easily accessible for outdoor
recreation under Sweden’s right to roam. Our forest roads get people
out enjoying the natural world, while thinning means the forest does
not become overgrown. Our land is accessible to hikers, for picking
mushrooms and berries, and is excellent for hunting and fishing.
Our active forestry creates prosperity, jobs and a confident future for
Sweden, while also bringing major regional benefits. We take pride in
being a good neighbour and engage with local clubs and societies and
the tourism industry. This enables us to develop in harmony with our
local communities. Because when people and communities grow, we
can grow too.

The forest industry employs about
120 000 people in Sweden in total.
In several regions, the forest
industry accounts for 20 per cent
or more of industrial employment.

A sustainable business

Holmen Annual Report 2022

A sustainable business

a business tHat benefits tHe
cLimate on multipLe fronts

Holmen’s operations are already
benefitting the climate today.
The amount of greenhouse gas in
the atmosphere is lower thanks
to the work we do. In 2022 we
contributed a climate benefit
totalling 7.2 million tonnes of
carbon dioxide. This is equivalent
to 15 per cent of total emissions
within Sweden’s borders.

The forest delivers the most benefit
when it is put to use. This is the heart of
Holmen’s sustainable business. Our aim is
to increase the climate benefit in our value
chain, mainly by increasing the positive
impact on the climate that our business
has, but also by reducing our negative
footprint. This is how Holmen created
real climate benefit in 2022.

Forest carbon uptake
Young trees have the greatest capacity
to bind carbon dioxide. When the trees
become old and die, they decay and the
stored carbon dioxide returns to the
atmosphere. Active and sustainable
forestry, in which the trees are harvested
when growth declines and the land is
then reforested, sees us increasing forest
growth and uptake capacity over time. In
2022 it is calculated that the increase in
the volume of standing timber in Holmen’s

forests has absorbed and stored a net
1.3 million tonnes of carbon dioxide.

Storage in our products
After harvest, the raw material from the
forests continues to bind carbon dioxide
even in its processed form. In products
with a long lifetime such as wood
products, the carbon is stored for a long
time once the products have been turned
into buildings and homes, while short-
lived products made of paperboard and
paper store carbon over a shorter period
of time.
Holmen’s production of wood products
increased global storage of carbon
dioxide by just over 0.5 million tonnes
and our paperboard and paper products
contributed storage equivalent to just
under 0.1 million tonnes of carbon dioxide.

Replacing fossil products
The greatest climate benefit is created
when our customers choose wood-
based products and renewable energy
instead of fossil-based options with a
higher carbon footprint. It is here too
that Holmen’s climate benefit becomes
the most tangible – when our products
reduce the need for fossil materials and
raw materials, which means that finite raw
materials such as coal, oil and gas can stay
in the ground.

The wood products we produced during
the year replaced construction materials
and fossil energy that would have
generated 2.6 million tonnes of greenhouse
gas emissions. When the paperboard and
paper we have produced can no longer be
recycled, it continues to provide a benefit
as bioenergy, replacing fossil energy
equivalent to 1.5 million tonnes
of greenhouse gas emissions.

Renewable energy production. Our sales
of our own renewable electricity from
hydro power, wind power and biomass
replace coal and gas power equivalent
to 1.3 million tonnes of greenhouse gas
emissions. On top of this, our sales of
bioenergy based on residual products
from the forest and our facilities replace
0.6 million tonnes of emissions.

Lower emissions
Energy-efficiency measures and
investments in renewable energy at our
production facilities have led to a sharp
drop in fossil emissions from our own
operations. Since 2005, the use of fossil
fuels in our production has fallen by
90 per cent and today the majority of our
emissions are generated from purchases
of input products and from transport
to and from Holmen’s industrial sites.
Therefore, we are now focusing on cutting
emissions in these areas.

Managed forests benefit the climate in several ways, million tonnes CO2e

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

2.6

1.3

0.5

0.1

Storage in
Holmen’s forests

Storage in
wood products

Storage in paper
& paperboard

1.5

1.3

0.6

Wood products
replacing fossil
materials

Paper &
paperboard
replacing fossil
energy

Bioenergy replacing
fossil energy

Renewable
electricity
production
replacing
fossil energy

Increased net storage of carbon dioxide

Reduced fossil carbon dioxide emissions

-0.7

Holmen’s emissions
in Scope 1–3

Emissions
in Holmen’s
value chain

Actively managing the forest enables us to benefit the climate by storing carbon dioxide both in the forest and in our products, and by forest-based products and renewable energy
replacing fossil alternatives. Total climate benefit from Holmen’s value chains in 2022 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 had the calculation methodology produced by Peter
Holmgren of Futurevistas AB in 2020. See page 111 for further details of the calculations.

Holmen Annual Report 2022

A sustainable business

In 2022 Holmen’s operations contributed towards
a climate benefit of 7.2 million tonnes CO2e, equivalent
to 15 per cent of emissions within Sweden.

1.3 million tonnes of CO2e were absorbed in the
growing volume of standing timber in our forests

1.9 million tonnes CO2e
were replaced by our renewable
production of electricity from
wind and water (1.3) and from
bioenergy (0.6)

Emissions equivalent to 0.7 million
tonnes CO2e come from Holmen’s
production and transport

4.7 million tonnes of CO2e were
stored in and replaced by wood products
(3.1) and by paper and paperboard (1.6)

Climate targets in line with the Paris Agreement
Holmen’s emissions targets are in line with the UN’s climate goals under the Paris Agreement, as certified by the UN-backed
organisation the Science Based Targets initiative (SBTi). Since 2005, emissions from fossil fuels in our production have fallen by
90 per cent and our own emissions are already at the low levels defined by the IPCC as the target for our industry in 2045 if we are to
be in line with the Paris Agreement. Today the majority of our fossil emissions are generated from purchases of input products, along
with transport to and from Holmen’s industrial sites. Read more about our science-based targets at holmen.com

Holmen’s science-based targets are to reduce greenhouse gas
emissions by 2030 in:
• Scope 1 and 2 by 15 per cent per tonne of paper and pulp
• Scope 3 from transport to and from our industrial facilities by 22 per cent per

tonne kilometre

• Scope 3 from transport of woody biomass by 22 per cent per tonne of woody biomass
Additionally, suppliers accounting for 35 per cent of emissions from purchased goods and
services are to have climate targets in line with Science Based Targets by 2025.

A sustainable business

Holmen Annual Report 2022

Water treatment plant
at Braviken 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 resource-efficient
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.
Holmen’s environmental work is
characterised by constant improvement
measures within the framework of certified
environmental and energy management
systems, which ensure compliance
with legislation and requirements set
by authorities. Responsibility for the
management systems rests with the
respective business area, as does
environmental responsibility.
Holmen’s operations have a
large number of quality, energy and
environmental targets, which are set by
the respective business area and mill.
These targets differ between the business
areas and are set within the framework of
Holmen’s different management systems.
The targets are owned by the Senior Vice
President Forest and by the respective
mill managers in Paper, Paperboard and
Wood Products.
For information about environmental
permits and certification, see pages
110–111.

Environmental risks
Holmen makes continuous efforts to
manage risks related to the environment,
where the main environmental impact is
from emissions to air and water and the
occurrence of noise and waste. There
is also a risk of exceeding the limits laid
down by the environmental authorities for
operations. Holmen works continuously
to prevent and tackle different types
of environmental risks. This is done for
example by conducting our own checks,
inspections by government agencies,
environmental risk analyses, Group-
wide climate targets and certification.
For information on discontinued
operations, see page 110.

Exceedances and complaints
The environmental managers at each
facility handle any incidents that occur.
Close dialogue with local residents
is important in order to identify and
address any views on operations. The
environmental incidents reported to
the supervisory authorities during
the year were tackled by means of
corrective measures within the facilities’
environmental management systems.

Proactive work. Constant monitoring
of environmental incidents that occur
at different levels is an important part
of Holmen’s environmental efforts.
Proactively identifying a high proportion
of potential incidents means we can avoid
more serious incidents taking place.

» Operations are characterised by

resource-efficient use of renewable
raw material and energy, and by
protecting the environment, applying
the precautionary principle. «

Holmen Annual Report 2022

A sustainable business

climate adaptation

Our business concept is to own
and add value to the forest. Taking
nature as the starting point of
everything we do means that
climate issues are very closely
integrated in our operations.
This applies to both our capacity
to contribute towards positive
development and how our
operations may be affected by
a changed climate.

Climate adaptation plan
Holmen has a decentralised organisation
in which each business unit is responsible
for drawing up a climate adaptation
plan to assess how its operations and its
products and/or services may be affected
by climate change. In 2022 climate
adaptation plans were produced for our
operations in forestry, hydro and wind
power, our sawmill in Linghem and for
electricity production from biofuel.
The climate adaptation plans are
based on an assessment of changes in
climate parameters that pose a risk to
operations. The climate parameters take
into account primary physical events such

as air and water temperature, secondary
physical events such as surface water
or groundwater supply, and transitional
events such as new customer demands
and regulatory and legislative changes.
The climate adaptation plans identify
critical business processes and the
climate-related events considered to
pose a risk to these processes. An annual
financial impact is calculated to assess
the impact of climate-related events
on operations, and the result of this
risk assessment becomes a financial
consequence in the respective critical
process.
Ongoing and potential activities
capable of reducing the consequences
of these various climate risks are
identified, while at the same time the
direct and indirect impacts of the planned
measures are evaluated. This may involve
everything from developing digital tools to
investigating our opportunities to plan and
regulate water supply in reservoirs.
All in all, the climate adaptation plans
represent proactive work that equips us
to develop our operations and adapt to a
changing climate.

Examples of climate-related risks and how they are tackled

Primary physical event
— Temperature change

Secondary physical event
— Fire

Transitional event
— Reduction obligation

The risk of forest fires is rising
due to three factors: higher
temperatures, a greater risk of
storms and lightning strikes
because of higher energy levels
in the atmosphere, and more
biomass on the ground as a
result of increased growth.

Holmen is working with SMHI
to develop a digital tool for
planning harvesting and fire
watching, taking into account
the higher risk of fires.

A requirement to increase the
admixture of biofuels may
affect fuel prices.

To mitigate the consequences
of higher fuel prices, Holmen is
working to increase the volumes
transported by rail. To improve
the efficiency of transport
kilometres driven by truck,
Holmen is also involved in
technological development
efforts to enable the use of
longer and heavier vehicles and
alternative fuels.

Modelling by the Swedish
Meteorological and Hydrological
Institute (SMHI) indicates that
Sweden’s average temperature
is set to rise. A warmer climate
may increase growth in our
forests due to a longer growing
season, but may also affect the
ecosystems due to changes in
biodiversity.

Holmen is developing seedlings
and processes to adapt our
forestry to a changing climate.
When planting, we choose tree
species in line with the unique
land conditions to create thriving
and highly resilient forests.
Areas with high conservation
value are identified and
prioritised with greater
consideration or individual
nature conservation measures.

A sustainable business

Holmen Annual Report 2022

Employees

empLoyees witH courage,
commitment & responsibiLity

Today’s Holmen is the result of
countless decisions large and
small, made in line with our
values: courage, commitment
and responsibility. 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. We like being the small big
company among the world’s forest
companies and would rather be
best at the things we choose to
focus on than the biggest in the
business and fairly good at lots of
things.

Management by objectives in a
decentralised organisation
Holmen has a management philosophy
and decentralised organisation that sets
great store by the active participation of
employees. Applying our management by
objectives model, the strategy, business
plans and performance expectations are
communicated across the organisation.
Based on this, our employees produce an
initial proposal for targets that will lead to
the expectations being met. This helps us

to make the most of the skills, potential and
drive of every individual, team and unit.
Holmen provides a learning
environment where everyone has the
opportunity to feel a sense of commitment
and responsibility for the areas in which
they work and their objectives. The
management by objectives model is
our way of making sure that everyone
working at Holmen feels that we are
focusing on the right things and helping
to implement our strategy. This makes
it easy to work across boundaries and in
new constellations.

Values that guide us. Our three values:
courage, commitment and responsibility
develop us as individuals, build further
on our strong culture and make Holmen
better. The values are clearly front and
centre at Holmen. Every day, they support
and develop the behaviours, priorities,
decisions and the way we run the
business. They guide us in our approach
to each other, in relations with customers
and in our work day to day. They are also
integrated in our processes and tools,
including in the recruitment process,
appraisal talks, in our management by

objectives model, and as a basis for our
internal leadership and management
programmes.

We grow together
Based on our current and future skills
needs, we are working on employee
development at all levels. We give them
a great deal of responsibility, as well as
the motivation and support of a team
of committed and expert colleagues
and managers. We also provide
development programmes for new and
more experienced managers alike, plus
specialists driving work on change.
Ongoing competence development
sees us paving the way for everyone
to grow, with stimulating duties and
new challenges. Because we know that
the impetus to grow is greatest when
development is built from the ground up.
Attracting and retaining the right
employees is of the utmost importance
in maintaining competitiveness over
time. This way, we ensure that Holmen
continues to be a business with a focus
on innovation and development. We have
an attractive employer offering that we
are constantly refining to attract the right

Holmen Annual Report 2022

Employees

people. We recruit using a competency-
based methodology that helps us bring in
the right skills.

Dynamic workplace. To maintain strong
competitiveness, Holmen wants to be
an attractive employer that appeals
to and retains the talent we need –
employees who represent a diversity of
insights, experiences and cultures. This
will enable us to benefit from different
backgrounds and ensure that everyone
feels welcome. As our industry is currently
overwhelmingly male, we are working to
achieve a more even gender distribution
among all employees. We draw up action
plans and annual pay surveys in line with
the Swedish Equality Act as part of our
work to create an inclusive workplace
in which everyone is given the same
development opportunities.

Health and safety
It goes without saying that we actively
pursue a healthy culture and an accident-
free workplace for our employees and the
contractors who work with us. Holmen
carries out systematic Group-wide health
and safety work in line with ISO 45001
(see page 111) and all 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 and is expected to be completed
in 2023.
During the coronavirus pandemic,
Holmen implemented a large number of
adaptations and measures to ensure a safe
work environment for our employees and
others visiting our operations. As always,
the precautionary principle is paramount.

Code of Conduct
Holmen’s good reputation as a responsible
and trustworthy company is fundamental
to our business. Holmen’s Code of Conduct
clearly sets out the requirements and
expectations of how employees at Holmen
are to behave. Office workers receive
training in the Code of Conduct every three
years. A few cases linked to deviation from
the Code of Conduct were reported during
the year and were handled according to
internal procedures.
We constantly work in line with our
supplier follow-up process, which was
updated in 2020. Our follow-up has
identified which suppliers pose risks
linked to the climate, 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.

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
travelling on business. All employees
must have the same rights, obligations
and opportunities 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
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, while enjoying an inclusive,
safe and healthy work environment
with fair terms of employment. Bullying
and harassment are not tolerated and
everyone is expected to act professionally
and not expose themselves 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.

Three of our social targeTs

Industrial accidents
with more than 8 hours of absence (LTI)
per million hours worked.
LTI
10

A zero vision for
discrimination and
harassment
Holmen has a vision of zero
discrimination and harassment, which
is followed up internally via employee
surveys, appraisal talks and reported
cases. A number of cases involving
discrimination and harassment were
reported during the year. The cases were
handled in line with internal procedures.

A zero vision for accidents
The number of accidents per million hours worked
increased from 5.6 in 2021 to 7.6 in 2022. There
was a reduction in the leading reasons for work-
related accidents (tripping, slipping, falls and pinch
point accidents) in 2022, but the number of cuts
and lacerations increased. Work is underway to
investigate the reasons for this rise and to put
additional measures in place. It is important for us
to continue to work far-sightedly, focused on our
vision of zero accidents.

Employees who
recommend Holmen
A comparison based on responses from
250 companies in different industries
showed that Holmen’s employees are
far more likely to recommend Holmen
as an employer than the benchmark.
Employee surveys put Holmen’s
employee Net Promotor Score (eNPS)
at 25, compared with a benchmark
index of 16.

Employees

Holmen Annual Report 2022

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 governance report is
a requirement under the Swedish
Annual Accounts Act. The
corporate governance report
complies with the rules and
instructions stipulated in the
Swedish Code of Corporate
Governance.

Shareholders
Holmen AB had 52 701 shareholders
at year-end 2022. Private individuals
with Swedish citizenship accounted for
the largest category of owners with
50 177 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 controlled as much
as 10 per cent of the votes. Employees
have no holdings of Holmen shares via a
pension fund or similar system.
At the 2022 AGM, the Board’s
authorisation to purchase up to 10 per cent
of the company’s shares was renewed.
No shares were bought back in 2022. The
company already holds 0.3 per cent of the
total number of shares in treasury. During
the year, 75 993 shares were transferred
to participants in the Group’s share savings
programme, which expired in 2022.
See pages 58–59 for further information
on the shares and ownership structure.

General meeting of shareholders
The notice convening the AGM is
announced and posted on holmen.com no
earlier than six and no later than four
weeks before the meeting. That a notice
has been issued is also advertised in a
nation-wide newspaper. It was announced
on 20 September 2022 that the 2023
AGM would take place on 28 March 2023.
Shareholders or proxies are entitled to

vote in respect of the full number of shares
owned or represented.

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 2022
and 2023 AGMs is shown in the table on
page 51.
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 for
the election of auditors.
The nomination committee applies rule
4.1 of the Swedish Corporate Governance
Code (the Code) as a diversity policy in
putting forward proposed Board members,
which means the composition of the Board
should reflect the company’s business
operations, phase of development and
other circumstances, and should be
diverse and wide-ranging in terms of the
expertise, experience and background of
the members elected by general meetings.

↓ 2022 AGM

↓ Board meetings

The notice convening the meeting, the agenda and the minutes of the
2022 AGM 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 only through postal
voting 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. For the AGM, shareholders were given the opportunity to ask and
receive answers to questions in writing. 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,
Hans Hedström, Carnegie Funds, and Carina Silberg, Alecta, checked and
approved the minutes. It was not possible to follow or participate in the
meeting from other locations using communication technology.

The Board held eight meetings in 2022, 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 2023.
One meeting was 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 energy markets, and
the other impacts of the war in Ukraine on Holmen’s operations. The
Board also devoted time to sustainability issues, study visits to sawmills
and power plants in the vicinity of Skellefteå and significant investment
matters. On one occasion the company’s auditor reported directly to
the Board, providing a presentation about the audit of the accounts and
internal control.

Holmen Annual Report 2022

Corporate governance reportNomination committee

Shareholders

General meeting
of shareholders

Board of Directors

CEO

Group management

Five group staffs

Five business areas

Auditors

An even gender distribution is sought.
Further information about the work of the
nomination committee will be provided at
the 2023 AGM.
For the 2023 AGM, the nomination
committee proposes that the Board consist
of nine members elected by the AGM. The
nomination committee proposes the re-
election of the current Board members
Fredrik Lundberg (who is also proposed for
re-election as Chairman of the Board), Lars
Josefsson, Alice Kempe, Louise Lindh, Ulf
Lundahl, Fredrik Persson, Henrik Sjölund
and Henriette Zeuchner, as well as the
election of Carina Åkerström. Carl Bennet
declined to stand for re-election.

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 2022 AGM re-elected Fredrik Lundberg ,
Carl Bennet, Lars Josefsson, Alice Kempe,
Louise Lindh, Ulf Lundahl, Henrik Sjölund
and Henriette Zeuchner to the Board, as
well as electing Fredrik Persson. Fredrik
Lundberg was re-elected Chairman of the
Board. At the statutory first meeting of the
new Board in 2022, Henrik Andersson,
Senior Vice President Legal Affairs, was
appointed company secretary.
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 98–99.

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 procedures 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 presented and
discussed at a Board meeting. The results
of the 2022 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
employment conditions of the CEO and
also evaluated guidelines for remuneration

↓ Members of the Board of Directors

Attendance at meetings in 2022:

Board members
Fredrik Lundberg
Carl Bennet
Lars G Josefsson
Lars Josefsson
Alice Kempe
Louise Lindh
Ulf Lundahl
Fredrik Persson
Henriette Zeuchner
Henrik Sjölund

Elected
1988
2009
2011
2016
2019
2010
2004
2022
2015
2014

Role on the
Board
Chairman
Member
Member
Member
Member
Member
Member
Member
Member
Member, President
& CEO

Audit
committee
Member
–
–
Member
–
–
Chairman
–
–
–

Remuneration
committee
Chairman
Member
–
–
Member
–
–
–
–
–

Board of
Directors
8/8
8/8
2/8
8/8
8/8
8/8
8/8
5/8
8/8
8/8

Audit
committee
5/5
–
–
5/5
–
–
5/5
–
–
–

Remuneration
committee
1/1
1/1
–
–
1/1
–
–
–
–
–

Fee for 2022
decided by AGM
(SEK ’000)
780
390
–
390
390
390
390
390
390
–

According to the nomination committee, Fredrik Lundberg, Carl Bennet, Lars Josefsson, Alice Kempe, Louise Lindh, Ulf Lundahl, Fredrik Persson and
Henriette Zeuchner are independent of the company and its senior management, and Lars Josefsson, Ulf Lundahl, Fredrik Persson, Henriette Zeuchner
and Henrik Sjölund are independent of the company’s major shareholders. Lars G Josefsson declined to stand for re-election at the AGM on March 30
2022 and Fredrik Persson was elected as a new Board member.

Employee representatives
Steewe Björklundh, member, elected 1998/Christer Johansson, member, elected 2017/Tommy Åsenbrygg, member, elected 2009/Martin Nyman, deputy
member, elected 2021/Daniel Hägglund, deputy member, elected 2014/Ari Aula, deputy member, elected 2022.

Holmen Annual Report 2022

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.

and share savings programmes. The
committee also examined remuneration
structures, remuneration levels and
methods for establishing the Group’s salary
levels to ensure that these are reasonable
and appropriate.
Remuneration and other employment
conditions for senior management who
report directly to the CEO are decided
by the latter and approved by the
remuneration committee in accordance
with the instructions for the remuneration
committee 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.
The current guidelines for remuneration
of the CEO and other senior management,
i.e. heads of business areas and heads of
Group staffs who report directly to the CEO,
were adopted by the 2020 AGM. The AGM
adopted the guidelines in accordance with
the Board’s proposal. Current guidelines
and information about remuneration are
presented in Note 4 on pages 73–74. New
guidelines are proposed for the 2023 AGM.
See Note 4. The proposal is available on
holmen.com.
The 2022 AGM approved the Board fee
and payment of the auditors’ fee as invoiced.
The share savings programme that was
introduced following a resolution by the
2019 AGM expired in April 2022. The 2022
AGM approved a new share savings
programme for key individuals in the Group.
The aim of the programme is to strengthen
common interests between shareholders
and company management, as well as to
create a long-term commitment to Holmen.
More information about the current share
savings programme can be found in Note 4.

Holmen Annual Report 2022

Group management
The Board has delegated operational
responsibility for management of the
company and the Group to the CEO. The
Board annually decides on instructions
covering the distribution of tasks between
the Board and the CEO.
Holmen’s Group management consists
of the company’s CEO, the heads of the
five business areas, and the heads of the
five Group staffs. Information about the
CEO and other members of Group
management is provided on page 100.
Group management meets regularly.
The meetings during the year dealt with
matters such as earnings performance
and reports before and after Board
meetings, strategic issues, budgets,
investments, internal control, work
environment, sustainability issues,
climate and environmental issues and
silviculture matters. Meetings were also
dedicated to reviews of market conditions,
economic developments and other
external factors affecting the business, as
well as discussion about governance of
the Group and the tools, such as the
management-by-objectives model and
Group-wide policies, used in such
governance. In 2022, Group management
focused particularly on analysing the
energy and construction material markets,
and testing the Group’s strategy in
different scenarios according to how these
markets might develop.

Audit
The audit firm PricewaterhouseCoopers
AB (PwC), which has been Holmen’s
auditor since 2021, was re-elected as
auditor at the 2022 AGM for a period of
one year. Authorised Public Accountant
Magnus Svensson Henryson was
appointed as the principal auditor.
PwC performs the audit for Holmen
AB as well as for the majority of
Holmen’s subsidiaries.

The examination of internal procedures
and control systems begins in the second
quarter and continues thereafter until
year-end. The interim report for January–
September is subject to review by the
auditors. The examination and audit of the
final annual accounts and the annual
report, including the sustainability report,
take place in January–February.
The members of Holmen’s audit
committee are Ulf Lundahl, Chairman,
Fredrik Lundberg and Lars Josefsson. The
audit committee has met five times. The
audit committee’s task is to monitor the
company’s financial reporting and the
efficiency of the company’s internal
control and risk management. The audit
committee reviews and monitors the
impartiality and independence of the
auditor. The committee also evaluates the
auditor’s work and submits proposals to
the company’s nomination committee on
the election of an auditor for the next
mandate period. 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
satisfactory supervision of accounting,
management of funds and other aspects
of the company’s financial circumstances.
In 2022, the auditors reported on their
work to the audit committee at four
meetings and to the Board of Directors on
one occasion. In addition to the audit
assignment, Holmen has consulted PwC
on matters pertaining to taxation,
accounting and for various investigations.
The remuneration paid to PwC for 2022 is
stated in Note 5 on page 75. PwC is
required to assess its independence
before making decisions on whether to
provide Holmen with independent 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. An annual review of the
Group’s strategy is conducted, including
objectives for the business. The strategy
is adopted by the Board and forms the
basis for the expectations that are set.
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 well-
implemented management-by-objectives
tool for continuous follow-up ensures
that the entire organisation is applying
appropriate priorities to attain the
objectives established.

Corporate governance reportThe business areas guide the operating
businesses towards these targets using
processes for purchasing, production
and sales, and supported by HR, financial
management, IT, environment and
communication processes.
Operations are followed up through
regular reporting of performance and KPIs
that reflect business activity, along with
additional qualitative analysis. Reporting of
non-financial data is integrated with the
financial reporting. When major investment
decisions are under consideration,
financial, social and environmental
effects are taken into account.

Code of Conduct. Holmen’s Code of
Conduct is in line with the UN Global
Compact, the International Labour
Organization’s (ILO’s) eight fundamental
conventions and the OECD’s Guidelines
for Multinational Enterprises, 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 stakeholders.
The Supplier Code of Conduct is also in
keeping with the principles, conventions
and guidelines above. Both Holmen’s
Code of Conduct and Supplier Code
of Conduct cover 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
opportunities 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 works with policies,
guidelines and Group instructions to clarify
how employees should act within key and
critical areas. The Group’s 11 policies cover

matters such as expectations of employee
participation and leadership, specify the
scope of management by objectives, talent
management, interaction with trade union
organisations, equality and employment
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
departments at risk of encountering
unauthorised behaviour receive special
training on business ethics. The policies
specify that raw materials should be used
efficiently, pollution 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
accordance with Group rules, risks of errors

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. The Board is to be informed
of any violations of the Code of Conduct.
Where non-compliance or failings are
found in terms of the corporate culture, the
issue is addressed on a case-by-case basis.

Whistleblower function. A whistleblower
function is available so that employees and
other stakeholders can highlight any
deficiencies in Holmen’s financial reporting
or other possible areas of concern and
improprieties at the company. No
complaints about deficiencies were
reported through this channel in 2022.

Internal control of financial reporting
The Board’s responsibility for internal
control and financial reporting is regulated

» Forests are the core and basis of sustainably successful
entrepreneurship in a Group that rests on five strong
business areas and whose strategy revolves around
sustainable development. Through Holmen’s business
model, returns and climate benefits are generated at the
same time as ecosystems and biodiversity are protected.«

Louise Lindh, Board member, Holmen

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,
transparent and easily accessible and
comply with legal requirements and
commercial confidentiality.

Compliance. Holmen’s Code of Conduct,
policies and values are part of every
employee’s induction programme, and

by the Swedish Companies Act and the
Swedish Corporate Governance Code.
Under this code, the Board is also
responsible for ensuring 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 page 52), ensure the company’s
assets are managed according to Group

↓ Composition of the nomination committee

Before AGM:

Independent of the:

Name

Mats Guldbrand
Fredrik Lundberg
Carl Kempe
Vegard Torsnes
Hans Hedström

Representing

2023

L E Lundbergföretagen* x (Chairman)
Chairman of the Board
Kempe Foundations*
Norges Bank*
Carnegie Funds

x
x
x
-

2022

x (Chairman)
x
x
-
x

Company

Largest shareholder
(in terms of votes)

Yes
Yes
Yes
Yes
Yes

No
No
Yes
Yes
Yes

* At 31 August 2022, L E Lundbergföretagen controlled 62.2 per cent of the votes, the Kempe Foundations controlled 17.5 per cent and Norges Bank controlled 1.1 per cent.

Holmen Annual Report 2022

Corporate governance report

rules and to prevent irregularities. Group
Finance coordinates and monitors the
internal control process concerning
financial reporting.
This work adheres to guidelines
issued by the Committee of Sponsoring
Organizations 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
environment provides the basis for
internal control of financial reporting and
is based in part on the company’s internal
management processes. The Board of
Directors’ procedural rules and the
instruction for the CEO establish the
distribution of roles and responsibilities to
ensure effective control and management
of the business’ risks.
Policies, guidelines and instructions
contribute 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 country where the company operates.

Risk assessment. Risk assessment
activities aim to identify and evaluate the
risks that can result in the Group’s
financial reporting objectives not being
met. The results of these risk-related
activities are compiled and assessed
under the guidance of Group Finance.
Holmen’s greatest risks regarding
financial reporting are linked to the
valuation of forest assets, pension
obligations, provisions and financial
transactions. The risk assessment also
involves identifying and assessing
operational risks. For further information,
see the Risk Management section on
pages 53–57.

Control activities. To ensure that Holmen’s
financial reporting objectives are met,
control requirements are incorporated into
the processes that are deemed relevant:
sales, purchasing, investments, personnel,
financial statements, payments and IT.
Control activities aim to prevent, identify
and rectify errors and discrepancies.
Business-specific self-assessments that
are completed by all Group units set out
what control requirements 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 provision 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.

Follow-up 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 continual basis and discrepancies
are reported half-yearly to the Executive
Vice President. The accuracy of self-
assessments is subject to testing. The
reporting of internal control to Group
management takes place once a year.
The company’s auditors report their
observations 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
carried 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.

» Sustainability is about balancing several
perspectives – economic, environmental
and social – and succeeding in doing so
over time. It is a core component of our
corporate governance and we were among
the first to integrate the sustainability
report into our annual report.«

Anders Jernhall, Executive Vice President and CFO, Holmen

Holmen Annual Report 2022

Corporate governance report
Risk management

The Group’s business and operational risks
are managed by the relevant business
areas, which also take decisions regarding
production, sales and employees with the
aim of generating a lasting good return on
invested capital.

Purchasing and some parts of IT are
managed by Group-wide functions in
order to leverage economies 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
macroeconomic and political factors, among
others, and the competitiveness above all
of European producers. Changes in demand
affect 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 precipitation and wind, which
govern generation from hydro and wind power.

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 development 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 increase for input goods.

Thanks to our strong supply of wood and energy,
Holmen was able to produce largely at full
capacity in 2022, whereas many competitors on
the continent had problems with raw material
supplies. Blåbergsliden Wind Farm became
operational at the start of 2022, which, together
with the acquisition of the remaining 50 per cent
of the previously partly owned Varsvik Wind
Farm, increased Holmen’s renewable electricity
production capacity by 40 per cent per year. For
information about how changes in deliveries
would affect Holmen’s operating profit, given the
circumstances on 31 December 2022, see the
sensitivity analysis on page 57.

Paperboard and paper product prices were
increased in 2022. A flagging construction market
drove down wood product prices at the end of
the year. Electricity prices were high, but with
significant local variations. Holmen’s renewable
electricity prices were on average nearly twice
as high as in 2021. For information about how
changes in prices would affect Holmen’s operating
profit, given the circumstances on 31 December
2022, see the sensitivity analysis on page 57.

The electricity price in southern Sweden,
where most of Holmen’s consumption takes
place, was high in 2022. Due to price hedges
and Holmen’s adapting of its production to an
environment with volatile electricity prices, the
price increase had a limited impact on Holmen’s
costs. Other important input goods, such as
chemicals and wood, also increased in price during
the year. For information about how changes in
commodity prices would affect Holmen’s operating
profit, given the circumstances on 31 December
2022, see the sensitivity analysis on page 57.

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 and energy. Together with
longstanding customer relationships and
strong product brands, this also increases the
ability to maintain a high level of production
amid more difficult 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 reservoir levels.

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
harvesting from year to year and changes in
the price of electricity can be managed by
regulating reservoir water levels in order to
shift electricity generation over the year.

Around half of the Group’s wood needs are
covered by harvesting from the Group’s
own forests, while the remainder is mainly
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 electricity purchases.
The price risk in this consumption is managed
through physical fixed price contracts and
financial hedging. The Group also sells
electricity from its hydro power and wind
power assets to the grid. The need for
thermal energy is great and is met locally
through recycling and production from
residual products. Chemicals are a significant
input, particularly in paperboard production,
but the need is declining since used
chemicals are being recovered at the mills.

Holmen Annual Report 2022

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 delivered because of changes in laws and
regulations 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 can be seriously disrupted, for
example, in the event of a fire, machine
breakdown or natural disaster. This can lead
to supply problems, unexpected costs and
reduced customer confidence. Production
facilities require ongoing maintenance and
technical upgrades. Major maintenance
shutdowns can entail higher costs and greater
loss of production than planned. Investments
in non-current assets can also be more costly
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
information can have significant negative
effects on the business.

Forest management
Holmen’s right to manage its own forest is
crucial 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 impact on the value of Holmen’s forest
assets, and mean that forestry methods may
need to change, which could reduce the harvest
and increase costs.

Damage to forests
Wild game can damage the forest when
grazing, 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. Storm and snow damage, fungal
attacks and forest fires are other examples of
damage that must be addressed and managed
in forestry.

Climate change
The Swedish Meteorological and Hydrological
Institute’s forecasts show that average
temperature, 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 the ecosystems in that
biodiversity is altered, while the risk of storm
and snow damage, fungal attack, insect
damage and forest fires increases. Climate
change could also impact the ability to carry
out harvesting, for example because of the
increased risk of damage to the land.

Holmen Annual Report 2022

Holmen endeavours to have at least two
approved 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
respecting 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. Compliance with forest
management contractor agreements is ensured
through site visits in the forest and all forest
management contractors are trained in forest
management and labour law and are informed
about where to turn if irregularities should occur.

In 2022, 0 (2) cases regarding breach of the
Supplier Code of Conduct were reported. In
the event of such breaches of the Code, an
active dialogue with an action plan is in place in
accordance with Holmen’s procedures. Suppliers
representing 88 per cent (85) of the Group’s
purchasing volumes have signed the Supplier
Code of Conduct. Supply chain risks relating to the
climate, environment, labour legislation, human
rights, business ethics and a sustainable purchasing
have been mapped and an action plan has been
formulated. The largest suppliers of input products
are engaged in dialogues regarding the reduction of
fossil emissions. The war in Ukraine and the effects
of the pandemic have made it more difficult and
expensive to acquire certain goods and services.
Holmen has actively worked to limit the effects and
has been able to avoid disruptions to production.

The risk that the Group’s customers will not
fulfil their payment obligations is limited by
means of creditworthiness checks, 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.

Damage prevention measures, regular
maintenance and continual upgrades can
minimise the risk of damage to facilities.
Training of employees promotes participation,
knowledge and awareness about these risks
and how they can be countered. Holmen
insures its facilities at replacement value and
has insurance against interruptions in the
event of unforeseen events. The Group also
has liability insurance that covers sudden and
unforeseen environmental damage affecting
third parties.

Operating disruptions and unauthorised
access are prevented by security measures
and preventive 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 continually
developing protective measures to address
changes in the risk profile.

Land and forest management are regulated
both nationally and at the EU level. In order
to be able to engage in active and sustainable
forestry, it is important that laws and
regulations such as the Environmental Code,
the Forest Inquiry, the EU’s forest strategy
and LULUCF do not restrict the conditions
necessary for sustainable operations. Holmen
participates in national and international
industry organisations to exert an influence
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,
active 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
harvested as soon as possible to prevent spread.

At 31 December 2022, the Group’s trade
receivables totalled SEK 2 929 million (2 393),
of which 43 per cent (34) were insured against
credit losses. During the year, no credit losses
on trade receivables had an impact on earnings
(SEK 0 million). Sales to the five largest customers
accounted for 14 per cent (14) of the Group’s total
sales in 2022.

The turbine in the biofuel boiler at Workington
became fully operational again in the first quarter
of 2022 after being damaged in 2021. Following
the insurance investigation, Holmen was entitled
to compensation for the turbine damage, minus
the excess and certain costs. In 2022, Holmen
invested SEK 1 225 million in the maintenance and
upgrading of its production facilities. At Braviken
Paper Mill, a project was launched to streamline
production and treat and reuse more water and
chemicals.

Business operations were not affected by cyber
incidents in 2022. To make its systems and
procedures secure, Holmen has created a new
function focused on IT and cyber security. A
regularly recurring IT security training course is
held for employees.

During the year, the right to use the forest in line
with Swedish laws and regulations was questioned
within the EU. Holmen has actively participated,
both on its own and through industry organisations,
in the debate to influence the EU position,
including by elucidating the positive climate effects
associated with a managed forest.

The spruce bark beetle infestation continued
in southern Sweden in 2022. To halt its spread,
Holmen continued to prioritise the harvesting of
the spruce bark beetle infested forest. Holmen
is working resolutely on the spruce bark beetle
infested forest, focusing on retaining as much of
the wood’s value as possible and looking for a sales
outlet for the damaged logs.

Holmen is developing seedlings and processes
for planting, clearing and thinning to adapt
our forests to a changed climate. Seeds for
Holmen’s cultivation of seedlings are selected
to grow and flourish in a changing climate.
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
adjusted through planning and by relocating
machines to areas with better conditions.

Ongoing climate risk analyses and adaptation
plans are carried out to ensure healthy, resilient
forests suited to a changing climate. The risk of
an impact on Holmen’s sites from climate change
is being managed through Holmen’s operational
continuity planning. Risks concerning energy
consumption and greenhouse gas emissions are
managed through our ISO-certified environmental
and energy management systems. Demand for
Holmen’s products is rising in response to the
market’s ambitions to counteract climate change,
since our customers want renewable alternatives
to fossil-based products.

Risk managementRisk

Risk management

Comment

Environment and permits
Holmen runs operations that require
environmental permits. The permits specify
conditions regarding permitted production
volumes and permitted emissions to air and
water. Production disruptions can cause
breaches of emissions conditions set for the
business by environmental authorities. Such
breaches could affect 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.

Talent management
Skilled and motivated employees are key to
being able to conduct long-term business
operations with good profitability. There is a
structural shortfall in many industrial positions.

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.

External 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.

Environmental measures are organised and
conducted in accordance with Holmen’s
environmental and energy policy. In the event
of process disruptions, the environment
takes precedence over production. Risks
are prevented and managed through regular
own checks, checks by authorities and
environmental risk analyses, as well as
through the use of certified 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.

In 2022, 45 (53) environment-related incidents
were reported to the supervisory authorities.
There were no incidents that led to long-term
consequences for the environment, production
or human health in 2022. Corrective measures
were taken to deal with these cases, in line with
the environmental management system of the
operations concerned. Holmen has several wind
farm project applications in progress, but the
authorisation procedure often takes a long time
and its outcome is uncertain.

Good health and safety is a priority at all levels
of the Group. Certified management systems,
Group-wide targets relating to work accidents,
continual training of personnel to increase risk
awareness, procedures for risk observation
and incident and accident reporting, and risk
assessment of tasks and work by contractors
are examples of activities to achieve a high
level of safety in the workplace.

In 2022, the rate of industrial accidents was 7.6 per
1 million hours worked (5.6). See also page 47.
The most common accidents were slips, trips and
crush injuries. The most significant areas of risk
involve work with overhead cranes and vehicles
with people in movement. The focus during the
year was conducting preliminary investigations into
industrial accidents before the end of shifts in order
to directly address any dangers.

Holmen is continually working to enhance the
employer brand in the eyes of existing and
potential employees. Systematic marketing
to targeted groups through digital channels,
combined with in-person meetings in the form
of careers fairs and sponsorship collaborations,
are helping to increase awareness of Holmen
and attract and retain talented employees.

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
international 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 representatives 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
unforeseeable risks that may arise, such as
shutdowns as a result of disease outbreaks,
war or political unrest, are managed through
ongoing external monitoring. To maintain
optimum preparedness and active crisis
management, Holmen is engaged in close
dialogue and coordination with industry
organisations, customers and suppliers.

Annual surveys show that new hires rate Holmen
highly as an employer. During the year, managers
were trained in competency-based recruiting in
order to improve their recruitment success rate
and increase diversity among new employees.
Holmen received accolades in 2022 such as a
top 20 ranking in the Ranstad awards, the title
Karriärföretag (career company) 2023, and a top
10 place in Universum’s ranking of Sweden’s Best
Employers (Sveriges Bästa Arbetsgivare).

No identified or reported cases concerning
deviations from the business ethics policy or the
parts of the Code of Conduct or Supplier Code of
Conduct regarding business ethics issues were
reported in 2022. In August 2022, new versions
of the Code of Conduct and the Supplier Code
of Conduct were adopted. Office workers and
managers at Holmen are trained in the Code of
Conduct every three years. No corruption lawsuits
against the organisation or its employees were
ongoing in 2022.

Following the war in Ukraine, Holmen has taken a
number of measures to safeguard its employees
and guarantee its raw material supply, logistics
and IT security. Holmen has marginal direct
exposure to Ukraine, Russia and Belarus, but we
continuously analyse the consequences the war
might have for our operations, in both the short and
long term. We comply with the sanctions adopted.
In 2022, Holmen continued to take action to
minimise the impact of the coronavirus pandemic,
with a focus on the health and safety of our
employees. Holmen has been active in promoting
the growth of sustainable energy production,
and bio-based and fossil-free activities, through
dialogue, consultation responses, preparedness
and advocacy work, on its own and together with
industry organisations.

Holmen Annual Report 2022

Risk management Financial risks

Risk

Risk management

Comment

Currency
The Group’s earnings are affected by
fluctuations in exchange rates. Transaction
exposure risk arises due to a significant portion
of the Group’s sales income being in different
currencies from costs. The translation exposure
risk arises from the translation of foreign
subsidiaries’ assets, liabilities and earnings into
Swedish kronor.

For the next two years, expected flows in EUR/SEK
are hedged at an average of 10.55. For other
currencies, 4–8 months of flows are hedged.

Hedging of exposure to pounds sterling amounted
to GBP 126 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
foreign exchange contracts. Net flows in
euros, US dollars and pounds 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 transaction exposure. Normally,
90–100 per cent of the currency exposure
associated with major investments is hedged.

Validation of revaluations. 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 subsidiaries are translated
into Swedish kronor is not normally hedged.

SEKm
10 000

7 500

5 000

2 500

EUR/SEK

GBP/SEK

USD/SEK

EUR/GBP

CNH/SEK

Net flow 12 months
Hedge

Interest rates
Changes in market interest rates affect the
Group’s cost of borrowing.

The fixed rate duration for the Group’s net
financial debt varies over time and is decided by
the Board of Directors. To limit the effects of a
rise in interest rates, the interest rate on loans
may be fixed, or an interest rate swap agreement
may be entered into without changing the
interest rate on the underlying loan.

Holmen’s average borrowing rate in 2022 was
1.5 per cent.

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
obligations

Right-of-use
agreements

Total

SEK

1 873

-1 400

-500

EUR
GBP
Other items

-246
-1 737
119

0
0
0

-1 400

-500

0
0
0

-9
0
0

-7

-153

-179

-75
-8
-10

-330
-1 746
109

-247

-2 145

Credit risk from financial counterparties
The risk of financial transactions giving
rise to credit risks in relation to financial
counterparties.

The creditworthiness of Holmen’s financial
counterparties is assessed using reputable
credit rating agencies or, where a counterparty
has no credit rating, the company’s own
analyses. A maximum credit risk and
settlement risk are established for each
financial counterparty and are monitored
continually. This calculation is based on the
maturity and historical volatility of different
types of derivatives. For cash and cash
equivalents and current investments, the
maximum credit risk is assessed to correspond
to the nominal amount.

At 31 December 2022, the Group had outstanding
derivative contracts with a nominal amount of
SEK 17 billion and a net fair value of SEK 4 billion.

Holmen Annual Report 2022

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 exceed 25 per cent of
equity. Holmen’s financing usually mainly
comprises bonds and the issue of commercial
paper. Holmen reduces the risk of future
funding becoming difficult or expensive by
using long-term contractually agreed credit
facilities. The Group plans its financing by
forecasting financing needs over the coming
years based on the Group’s budget and profit
forecasts that are regularly updated.

The cash flow was strong in 2022 and net financial
debt fell to SEK 2 145 million, which is equal
to 4 per of equity. Financial liabilities totalled
SEK 4 195 million at the end of the year, of which
SEK 1 127 million are due for payment in 2023,
and financial assets totalled SEK 2 050 million, of
which SEK 1 935 million consist of cash and cash
equivalents and short-term investments.

The Group has unutilised committed credit
facilities of SEK 5 billion, of which SEK 1 billion
matures in 2025 and SEK 4 billion in 2027. Both
facilities include a limit stipulating that they cannot
be used if net liability in relation to equity exceeds
125 per cent.

SEKm
5 000

4 000

3 000

2 000

1 000

2023

2024

2025

2026

>2027

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.

Holmen hedges parts of the electricity
consumption by the paper business area. For
2022, 90 per cent of electricity consumption
was hedged. At year-end, 90 per cent of
electricity consumption was hedged for 2023.
For 2024, 60 per cent has been hedged, while
for 2025 the figure is 25 per cent.

Sale

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

Change

+/-1%
+/-1%
+/-1%
+/-1%
+/-1%

Change

+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%
+/-1%

Impact on operating profit, SEKm

Price

Deliveries

35
42
24
10
10

66
84
50
15
12

Price

36
2
20
9
22
30
14

* Taking electricity price hedges for 2023 into account. Without taking hedges into account, the corresponding
figure would be SEK 39 million.

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’
average historical volatility for each instrument,
which is deemed a reasonable change going
forward. Historical volatility on exchange rates
is calculated 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
500 million a year.

Earnings before tax*

Exchange rate total

EUR/SEK
USD/SEK
GBP/SEK
other currencies/SEK

Borrowing rate

Equity

Transaction hedging
Investment hedging
Equity hedging
Electricity price hedging
Interest rate changes

Change

+/-5%
+/-5%
+/-5%
+/-5%
+/-5%
+/-1% point

Change

+/-5%
+/-5%
+/-5%
+/-60 %
+/-1% point

*Estimated effect for 2023 including hedging.

SEKm

180
18
68
46
48
1

SEKm

590
11
79
2 625
8

Holmen Annual Report 2022

Risk managementshaReholdeR infoRmation

Holmen’s two classes of shares
are listed on Nasdaq Stockholm,
Large Cap. Over the past ten years,
Holmen’s total shareholder return
(dividend paid and share price
performance) has been 488 per cent,
compared with 160 per cent for the
OMX Stockholm 30. For Holmen,
this corresponds to an annual return
of 19 per cent. At the same time,
the number of shareholders has in-
creased by 25 000 to nearly 53 000.

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 currently
listed on Nasdaq Stockholm, Large Cap.
At the end of 2022, Holmen A was
trading at SEK 424 (448) and Holmen
B at SEK 414 (435), corresponding to a
market capitalisation of SEK 67.5 billion
(71.0). The highest closing price for
Holmen’s class B shares was SEK 573,
on 29 April. The lowest closing price
was SEK 400, on 2 November. The daily
average number of class B shares traded
was 1 050 000, which corresponds to
a value of SEK 501 million. The daily
average number of class A shares traded
was 1 097. Almost 28 per cent of trading
took place on Nasdaq Stockholm. Holmen
shares have also been traded on other
trading platforms, such as Cboe BXE, LSE
and Aquis.

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 28 March 2023 approve

a dividend of SEK 8 per share and an extra
dividend of SEK 8 per share.

Share structure
Holmen has 162 001 678 shares
outstanding, of which 45 246 468 are
class A shares and 116 755 210 are class
B shares. The company also has 510 646
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.

Share savings programme
The share savings programme introduced
by decision of the 2019 AGM expired
in April 2022, which means that the
participants have been allocated 75 993
matching and performance shares. The
2022 AGM decided on a new, similar
share savings programme. The aim of
the programme is to strengthen common
interests between shareholders and
company management, as well as to
create a long-term commitment to
Holmen. More information about the
current share savings programme can
be found in Note 4.

Share buy-backs
The 2022 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 company
already owns 0.3 per cent of all shares
outstanding. The Board proposes that
the 2023 AGM approve corresponding
authorisation for the Board.

Ownership structure
Holmen had a total of 52 701
shareholders at year-end 2022. In terms
of numbers, Swedish private individuals
account for the largest owner category
with 50 177 shareholders. Shareholders
registered in Sweden own 73 per cent
(81) of the share capital. Among foreign
shareholders, the largest proportion of
shares are held in the US and Norway,
accounting for 8 per cent and 5 per cent of
capital, respectively. The largest owner at
the turn of 2022/2023, with 62.3 per cent
of votes and 34.1 per cent of capital, was
L E Lundbergföretagen AB.

Shareholder communication
Information about the company is
available at the holmen.com website,
including financial information in the form
of reports, presentations and financial
data, as well as the performance of
Holmen shares and contact information.

Shareholder categories
Share of capital, %

Swedish institutions
Swedish equity funds
Swedish private individuals
Foreign shareholders

50%
11%
12%
27%

Share price performance,
Holmen class B and OMX Stockholm

Total shareholder return Holmen B and OMX Stockholm
Including reinvested dividend without tax

Index

500

400

300

200

100

Number of shares (thousand)

50 000

40 000

30 000

20 000

10 000

Index
800

600

400

200

0
22 Jan 23

0
13

Jan 23

Holmen B
Total number of class B shares traded (thousands)

OMX Stockholm 30 (OMXS30)

Holmen B
Source: Macrobond

OMX Stockholm 30 (OMXS30)

Holmen Annual Report 2022

Shareholder information

Earnings per share

Proposed dividend per share

sek 36.3

sek 8 +
sek 8

Annual return at 31 Dec 2022*, %

1 year

3 years

5 years

10 years

Holmen B
OMX Stockholm 30

*Including reinvested dividend.

-3
-13

15
7

16
9

19
10

Holmen’s total shareholder return has averaged 19 per cent a year over the past 10 years, which is 9 percentage points
better than the OMX Stockholm 30.

Share capital structure

Equities

Votes No. of shares

No. of votes Quotient value SEKm

A
B

Total no. of shares
Holding of repurchased
class B shares

Total number of shares
outstanding

10
1

45 246 468
117 265 856

162 512 324
-510 646

452 464 680
117 265 856

569 730 536
-510 646

162 001 678

569 219 890

26
26

1 180
3 058

4 238

Changes in share capital
2000–2022

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

79 972 451

4 783 711
84 756 162
-7 000 000

84 756 162
169 512 324
162 512 324

-444

239
-
-

3 999

4 238
4 238
4 238

Ownership structure*
2022-12-31

% of
capital

% of
votes

L E Lundbergföretagen
Kempe Foundations
Norges Bank
SEB Funds
BlackRock
Handelsbanken Funds
Vanguard (US)
Carnegie Funds (Sweden)
Swedbank Robur Funds
Nordea Funds

Total

Other

Total
Of which non-Swedish
shareholders

34.1
7.4
4.8
2.4
2.3
2.1
2.1
1.8
1.5
1.4

62.3
17.5
1.4
0.7
0.7
0.6
0.6
0.5
0.4
0.4

59.9

85.0

40.1

15.0

100.0
27.3

100.0
8.0

* 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’.

Shareholder statistics at 31 Dec 2022

Holding
classes, no.
of shares

1–1 000
1 001–100 000
100 001–

Total

Number of
shareholders

Share of
capital, %

48 890
3 731
80

52 701

4
11
85

100

Data per share
(adjusted for the 2:1 share split in 2018)

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

Diluted earnings per share, SEK1)

36.3

18.5

12.2

52.6

13.5

9.9

8.5

3.3

5.4

4.3

Dividend, SEK

Ordinary dividend, SEK

Extra dividend, SEK

Total dividend as % of:

Equity

Closing market price

Profit/loss for the year

Return, equity, %1)

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

82)
82)

4.6

3.9

352

414

459

573

400

7.5

4.0

2.6

290

435

404

469

365

7.25

3.5

4.1

2.7

263

394

310

396

228

3.5

1.4

1.2

238

285

220

297

172

6.75

4.8

3.9

140

175

213

240

175

6.5

5.0

3.0

131

218

186

218

157

4.7

3.7

127

164

141

163

114

5.5

4.2

4.0

158

124

131

132

153

110

4.0

3.8

125

133

118

136

105

4.5

3.6

3.8

106

124

117

118

Total closing market capitalisation, ’000 SEKm

67.5

71.0

64.7

46.6

29.5

36.6

27.4

22.3

19.7

P/E ratio4)

EV/EBITDA3) 5)

Closing beta value (48 months), B, at year-end6)

0.75

0.78

0.77

0.74

0.72

0.68

0.71

0.67

Number of shareholders at year-end

52 701

48 126 48 104 38 904 33 573 30 903 28 159 28 176 27 788 27 692

1) See page 114: Definitions and 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 2022

Shareholder information

Financial
statements

Income statement, SEKm

Net sales
Other operating income
Change in inventories
Raw materials and consumables
Personnel costs
Other operating costs
Change in value of biological assets
Depreciation and amortisation according to plan
Impairment losses
Share in profits of 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

Note

2
3

4
5
9
10, 11, 12
10
13

6
6

2022

23 952
2 743
364
-11 078
-2 956
-4 585
509
-1 345
-87
10
7 527
12
-99

7 441
-1 567

5 874

2021

19 479
1 690
1
-10 110
-2 720
-3 814
464
-1 261
-
0
3 731
9
-48

3 691
-688

3 004

5 874

3 004

36.3
36.3

162.0
162.0

18.5
18.5

161.9
161.9

Operating profit for 2022 amounted to SEK 7 527 million (3 731). The increase in
profit is due to prices rising significantly while cost inflation has been limited by our
own strong supply of wood and energy.

Net financial items totalled SEK -87 million (-39).

Tax recognised totalled SEK -1 567 million (-688), corresponding to 21 per cent
(19) of profit before tax.

Statement of comprehensive income, SEKm

Note

2022

Profit/loss for the year
Other comprehensive income
Revaluation of forest land
Revaluation 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

Holmen Annual Report 2022

9
18
7

13
7

5 874

4 373
-6
-899

3 469

6 560
-3 507
-16
72
-28
0
-612

2 469

5 938

11 812

2021

3 004

3 345
-12
-683

2 650

182
349
-27
180
-39
3
-97

551

3 201

6 204

11 812

6 204

GroupFinancial statementsBalance sheet at 31 December, SEKm

Note

2022

2021

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 receivables
Other operating receivables
Current financial receivables
Cash and cash equivalents

Total current assets

Total assets

Equity
Share capital
Other contributed capital
Reserves
Retained earnings including 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 obligations
Non-current 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 liabilities
Other operating liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

9
9
10
11
12
13
13
14
7

15
16
7
16
14
14

18
19
7

20
7
20

29 867
22 284
427
10 124
242
1 680
2
97
2

64 726

4 838
2 929
589
6 402
18
1 935

16 710

81 436

4 238
281
20 689
31 742

56 950

2 902
158
7
441
13 490

16 998

1 039
89
3 848
118
2 395

7 488

24 486

81 436

29 204
17 876
539
9 711
240
1 756
2
268
3

59 598

3 818
2 393
70
1 676
39
507

8 503

68 101

4 238
281
14 748
27 725

46 992

3 911
173
24
409
11 610

16 127

736
71
2 836
80
1 259

4 982

21 109

68 101

Holmen Annual Report 2022

GroupFinancial statementsChanges in equity, SEKm

Opening equity balance 1 Jan 2021
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
Share savings programme

Closing equity balance 31 Dec 2021
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
Share savings programme

Share
capital

4 238
-

Other
contributed
capital

281
-

-
-
-
-
-
-
-

-
-
-

-
-
-
-
-
-
-

-
-
-

4 238
-

281
-

-
-
-
-
-
-
-

-
-
-

-
-
-
-
-
-
-

-
-
-

Closing equity balance 31 Dec 2022

4 238

281

Reserves

Translation
reserve

Hedge
reserve

Revaluation
surplus

-73
-

-
-
-
180
-39
-
8

149

149
-
-

76
-

-
-
-
72
-28
-
6

50
-
-

126

316
-

-
-
504
-
-
3
-105

402

402
-
-

718
-

-
-
3 037
-
-
0
-618

2 419

2 419
-
-

3 137

11 297
-

3 345
-
-
-
-
-
-689

2 656

2 656
-
-

13 953
-

4 373
-
-
-
-
-
-901

3 472

3 472
-
-

17 426

Retained
earnings incl.
profit/loss
for the year

26 457
3 004

-
-12
-
-
-
-
6

-6

2 997
-1 741
12

27 725
5 874

-
-6
-
-
-
-
2

-4

5 870
-1 862
9

31 742

Total
equity

42 516
3 004

3 345
-12
504
180
-39
3
-780

3 201

6 204
-1 741
12

46 992
5 874

4 373
-6
3 037
72
-28
0
-1 511

5 938

11 812
-1 862
9

56 950

Holmen Annual Report 2022

GroupFinancial statementsCash flow statement, SEKm

Operating activities
Earnings before tax
Adjustments for non-cash items

Depreciation and 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
Disposal of shares and participations
Repayment of non-current financial receivables

Cash flow from investing activities

Financing activities
Raised long-term borrowings
Repayment of long-term borrowings
Change in current financial liabilities
Repayment of debt related to right-of-use assets
Change in current financial receivables
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

2022

2021

25
25

7 441

1 345
87
-509
15
28
-1 639

6 768

-1 007
-1 284
1 007

5 484

-1 225
14
-6
-160
32
-11
4
3

-1 349

-
-500
-261
-90
0
-1 862

-2 713

1 422
507
5

1 935

3 691

1 261
-
-464
-187
-263
-662

3 375

-236
-156
247

3 229

-1 534
19
-13
-166
424
-63
-
25

-1 307

500
-
-411
-110
-3
-1 741

-1 764

158
346
2

507

* Other adjustments primarily consist of foreign exchange effects and the marking to market of financial instruments, profit from associates, as well as gains/losses on the
sale of non-current assets.

Change in net financial debt, SEKm

Opening net financial debt
Cash flow

Operating activities
Investing activities (excl. financial receivables and business combinations)
Dividend paid
Business combinations
Liabilities arising from new right-of-use agreements
Revaluation of defined benefit pension plans
Foreign exchange effects and changes in fair value

Closing net financial debt

2022

-4 101

5 484
-1 350
-1 862
- 270
-93
-7
53

-2 145

2021

-4 181

3 229
-1 332
-1 741
-
-67
17
-27

-4 101

Holmen Annual Report 2022

GroupFinancial statementsIncome statement, SEKm Note 2022

2021

Net sales
Other operating income
Change in inventories
Raw materials and consumables
Personnel costs
Other external costs
Depreciation and amortisation
according to plan

Operating profit
Profit/loss from investments in Group
companies
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

21 995
1 262
304
-9 418
-2 485
-6 590

18 186
921
35
-10 127
-2 078
-5 428

10, 11

-56

-51

5 012

1 458

6, 23
6
6

453
84
-88

5 459
-511

4 948
-930

4 019

380
26
-90

1 774
768

2 541
-451

2 090

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

Total comprehensive income

Note 2022

2021

4 019

2 090

6 401

-3 499

-16

204

329

-27

-594

-104

2 291

6 310

401

2 491

The parent company includes Holmen’s Swedish operations, except for most
of the non-current assets , the business operating at Varsvik Wind Farm and the
Group’s construction system business, which are recognised within other Group
companies.

Profit after net financial items includes the result from hedging equity in foreign
subsidiaries of SEK -28 million (-39).

Cash flow statement,
SEKm

Operating activities
Profit/loss after financial items
Adjustments for non-cash items

Depreciation and 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
Repayment of long-term borrowings
Change in other financial liabilities
Change in other financial receivables
Dividend paid to owners of the parent
company
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

Note 2022 2021

5 459

1 774

56
-
10
-357
-1 460

51
2
-145
75
-618

3 708

1 139

-1 073
-969
1 168

2 834

3
-157
26

-102

-
-500
267
0

-1 862
1 013
-322

-1 404

1 329

445

1 774

-250
-641
622

870

-92

25
-39
-

-95

500
-
-303
-286

-1 741
1 495
-230

-565

209

236

445

* Other adjustments primarily consist of foreign exchange effect and the marking to
market of financial instruments and gains/losses on the sale of non-current assets.

Holmen Annual Report 2022

Parent companyFinancial statementsBalance 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 receivables
Current investments
Cash and cash equivalents

Total current assets

Total assets

Note 2022

2021

Balance sheet at
31 December, SEKm

Note 2022

2021

10
11

13, 23
14

9
3 088

13
3 075

11 792
3 648

18 537

11 634
4 176

18 898

15
16
7
14
14

3 965
8 606
579
18
1 774

14 941

2 886
3 616
39
39
445

7 025

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 obligations
Provisions
Deferred tax liabilities

33 478

25 923

Total provisions

Liabilities
Non-current financial liabilities
Current financial liabilities
Operating liabilities

Total liabilities

18
19
7

14
14
20

4 238
1 577
100

7 514
4 019

4 238
1 577
100

4 986
2 090

17 448

12 990

4 053

2 852

13
609
1 389

2 011

3 334
1 039
5 593

9 966

0
599
787

1 386

4 513
736
3 446

8 695

Total equity and liabilities

33 478

25 923

Restricted equity

Non-restricted equity

Share capital

Statutory
reserve

Revaluation

reserve Hedge reserve

Retained
earnings

Profit/loss for
the year

Total equity

Changes in equity, SEKm

Opening equity balance 1 Jan 2021
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
Share savings programme

Closing equity balance 31 Dec 2021
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
Share savings programme

4 238
-
-

1 577
-
-

-
-
-

4 238
-
-

1 577
-
-

-
-
-

100
-
-

-
-
-

100
-
-

-
-
-

Closing equity balance 31 Dec 2022

4 238

1 577

100

353
-
-

505

-104

401

401
-
-

754
-
-

2 885

-594

2 291

2 291
-
-

3 045

4 042
1 919
-

1 919
-1 741
12

4 232
2 090
-

2 090
-1 862
9

4 469

1 919
-1 919
2 090

171
-
-

2 090
-2 090
4 019

1 929
-
-

4 019

12 228
-
2 090

505

-104

401

2 491
-1 741
12

12 990
-
4 019

2 885

-594

2 291

6 310
-1 862
9

17 448

Holmen Annual Report 2022

Parent companyFinancial statementsNotes to the fiNaNcial
statemeNts

Amounts in SEKm, unless otherwise stated

1. Accounting policies

2. Operating segment reporting

3. Other operating income

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

14. Financial instruments

15. Inventories

16. Operating receivables

17. Equity, parent company

18. Pension obligations

19. 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

Note 1. Accounting policies

The accounting policies for the Group presented below have been applied
consistently 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.

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 measured 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. The financial statements are presented in millions
of Swedish kronor.

Holmen Annual Report 2022

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 2022
New and amended IFRSs with application from 2022 do not have any material
impact on the company’s financial statements.

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
highest executive decision-maker. See Note 2 for more details of the classification
and presentation of operating segments.

Note 1NotesClassification
Essentially, non-current assets, non-current liabilities and non-current 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
current 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
acquisition 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
consolidated 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 in 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 any goodwill and other
consolidated 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 comprehensive income and are accumulated in a separate component of
equity called the translation reserve. In the disposal of a foreign operation, the
accumulated translation differences attributable to the business are realised, less
any currency hedging, 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, Holmen Wood Products AB, Holmen Iggesund
Paperboard AB, Holmen Paper 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 other 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 volume or cash discounts. 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.

The Group’s business also includes construction solutions in wood. Income from
this activity is treated as a commercial construction contract and recognised over
time, based on costs spent in relation to the total estimated costs of the project.
Projects usually do not extend beyond twelve months. Holmen therefore applies
the relaxation rule and does not disclose remaining performance commitments.
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 2022

Note 1NotesFinancial 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 expenses affect profit/loss in the period to which they relate. Borrowing
costs attributable to the purchase or construction of qualifying 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

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
fair value. Changes in the value of derivatives that are not hedged are recognised
in profit/loss.

Holmen Annual Report 2022

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 - When assessing expected credit losses on
financial assets, the simplification rule is applied in accordance with IFRS 9. 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 56–57.

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.

Goodwill represents the difference between the cost of business combinations and
the fair value of the acquired assets, assumed liabilities and contingent liabilities.

Note 1NotesGoodwill 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 book value includes all directly attributable
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

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 a 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 a
maximum of 12 months 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, after deduction for necessary
obsolescence, and 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 of making 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 recognised 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 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 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 2022

Note 1NotesThe 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 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
transactions 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.

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.

Holmen Annual Report 2022

Note 1NotesForest Paperboard

Paper

Wood
Products

Renewable
Energy

Group-wide

and other Eliminations

Total
Group

Note 2. Operating segment reporting

2022

Net sales
External
Internal
Other operating income
Operating costs
Change in value of biological assets
Depreciation and amortisation according to plan
Impairment losses
Share in profits of associates and joint ventures

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
Deferred tax, net

Capital employed

2 610
4 732
367
-6 643
509
-87
-87
-

1 401

6 735
-
1 820
-6 610
-
-599
-
-

8 370
-
314
-5 651
-
-319
-
-

1 347

2 714

5 015
-
605
-4 181
-
-204
-
2

1 237

1 222
4
152
-273
-
-106
-
8

1 006

1 401

1 081

2 714

1 237

1 006

54 499
-2 015
-11 130

41 354

139

7 792
-1 263
-897

3 242
-1 003
-301

5 632

1 939

2 944
-749
-128

2 067

6 101
-1 110
-372

4 618

-
-
222
-370
-
-30
-
-

-178

5 888
-1 744
-660

3 485

Acquisition of non-current assets

278

555

186

122

237

External net sales by market

Sweden
Germany
UK
France
Italy
Rest of Europe
Asia
Rest of the world

Total

2 586
-
-
-
-
25
-
-

2 610

164
1 128
874
475
399
1 995
1 296
404

6 735

373
1 329
953
958
912
2 963
496
386

8 370

1 794
45
646
52
17
1 092
409
959

5 015

1 222
-
-
-
-
-
-
-

1 222

-
-
-
-
-
-
-
-

-
-4 737
-737
5 473
-
-
-
-

-1 083
1 083
-

-
-
-
-
-
-
-
-

23 952
-
2 743
-18 255
509
-1 345
-87
10

7 527

7 262

79 384
-6 801
-13 487

59 095

1 401

6 138
2 502
2 474
1 486
1 328
6 084
2 202
1 739

23 952

*Items affecting comparability refer to the insurance compensation, and the costs and the loss of revenue, associated with the turbine breakdown at the paperboard mill in
Workington (SEK 266 million).

Net sales by market

Sweden
Germany
UK
France
Italy
Rest of Europe
Asia
Rest of the world

Total

Group

Parent company

2022

6 138
2 502
2 474
1 486
1 328
6 084
2 202
1 739

2021

5 343
1 963
2 304
1 074
911
4 383
2 150
1 351

2022

6 645
2 114
1 939
1 279
1 188
4 995
2 117
1 718

2021

6 240
1 611
1 793
896
788
3 497
2 077
1 285

23 952 19 479 21 995 18 186

Net sales by product area

Consumer paperboard
Pulp
Book, magazine & packaging paper
Newsprint
Wood products, pine
Wood products, spruce
Wood construction solutions
Wood
Electricity
Other

Group

Parent company

2022

2021

2022

2021

446

464

182

446

202

6 553 6 059 4 232 3 950
396
7 924 4 977 7 924 4 977
464
2 116 2 206 2 116 2 206
2 580 2 345 2 731 2 345
-
2 610 2 424 2 586 3 181
473
473 1 396
1 216
194
118
6

320

Income from external customers is allocated to individual countries according to
the country in which the customer is based.

Non-current assets per country

2022

2021

2022

2021

Group

Parent company

Total

23 952 19 479 21 995 18 186

Sweden
UK
Other

Total

63 262 57 993 14 889 14 721
-
-

1 358
4

1 329
4

-
-

64 624 59 326 14 889 14 721

Holmen Annual Report 2022

Note 2Notes
Notes 2–3

Note 2. Operating segment reporting, cont.

Forest Paperboard Paper

Wood
Products

Renewable
Energy

Group-wide

and other Eliminations Total Group

2021

Net sales
External
Internal
Other operating income
Operating costs
Change in value of biological assets
Depreciation and amortisation according to plan
Share in profits of associates and joint ventures

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
Deferred tax, net

Capital employed

2 424
4 085
580
-5 979
464
-78
-

1 495

49 178
-1 834
-10 045

37 300

-
642

6 261 5 441
-
270
-5 995 -5 270
-
-371
-

-
-565
-

343

673

6 974 2 707
-840
-958
-231
-847

5 169 1 637

4 872
-
499
-3 514
-
-189
1

1 668

481
7
28
-140
-
-28
-1

347

1 668

347

2 954
-606
-70

2 278

Acquisition of non-current assets

249

399

129

242

External net sales by market

Sweden
Germany
UK
France
Italy
Rest of Europe
Asia
Rest of the world

Total

2 422
-
-
-
-
2
-
-

2 424

131
1 136
804
465
333

195
791
661
528
570
1 780 1 677
645
1 196
374
415

6 261 5 441

2 113
37
839
81
7
924
309
561

4 872

4 772
-334
-368

4 069

712

481
-
-
-
-
-
-
-

481

-
-
217
-380
-
-29
-

-193

1 320
-633
-47

640

-
-
-
-
-
-
-
-

-
-4 092
-544
4 636
-
-
-

-620
620
-

-
-
-
-
-
-
-
-

19 479
-
1 690
-16 643
464
-1 261
0

3 731

4 061

67 284
-4 584
-11 608

51 093

1 775

5 343
1 963
2 304
1 074
911
4 383
2 150
1 351

19 479

*Items affecting comparability refer to the costs and the loss of revenue associated with the turbine breakdown at the paperboard mill in Workington (SEK -330 million).

The Forest business area manages the Group’s forests, which cover just over one
million hectares. The annual harvest of own forests amounts to 2.8 million m3sub.
This business area is also responsible for the Group’s wood supply in Sweden.

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 2022, the Group produced 0.5 million tonnes of
paperboard, 1.0 million tonnes of paper and 1.4 million m3 of wood products.

The Renewable Energy business area is responsible for the Group’s hydro power
and wind power assets. Deliveries in 2022 amounted to 1.6 TWh of renewable
hydro and wind power electricity and include wind power electricity bought from
wind farm constructed on Holmen’s land.

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,
net financial items, financial assets and liabilities, including pension obligations,
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.

Note 3. Other operating income

Group

Parent company

2022

2021

2022

2021

Sales of by-products
Sales of non-current assets
Certificates, renewable energy
Emission allowances
Insurance compensation
Rent and land lease income
Silviculture contracts
Other

849
34
433
284
489
150
91
413

584
320
186
140
0
101
95
264

548
7
1
251
1
73
91
289

Total

2 743

1 690

1 262

378
10
1
136
0
43
95
258

921

Holmen Annual Report 2022

Of the sales of by-products in the Group, SEK 178 million (182) relate to rejects
from production, SEK 226 million (292) to wood shavings, bark and chips, as well
as SEK 445 million (110) to external sales of energy.

Holmen receives a certificate for the production of renewable energy at the British
paperboard mill in Workington. Revenue for 2022 was higher than in 2021 due to
increased electricity prices, and the fact that the revenue for 2021 was lower than
usual because of the turbine breakdown at the mill in Workington, which led to
lower renewable energy production than normal. Insurance compensation refers
above all to the turbine breakdown in Workington.

The Group has been allotted emission allowances that have been used
partly within its own production. The surplus resulted in a recognised gain of
SEK 284 million (140).

NotesNote 4

Note 4. Employees, personnel costs and remuneration to senior management

Wages, salaries and social security costs 2022 2021 2022
2 048 1 928 1 662
Wages, salaries and other remuneration
760
759
Social security costs

856

2021

1 415
615

Group

Parent company

The 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.

The 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 under Share savings programme. It was approved
separately by the AGM and is therefore not covevered 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 conditions for other employees
In formulating its proposals for these remuneration guidelines, the Board has
taken into account the salaries and employment conditions 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 (‘LTIP 2019’). Participation in the programme required the relevant employees
to have personally invested in Holmen shares (known as ‘savings shares’).

Participants in the programme were able to receive a half matching share for each
savings share on the condition that the total return on Holmen’s shares was positive
during the period 2019–2021. Participants could also receive performance shares
based on the Group’s return on capital employed. The condition for matching shares
was met and the performance condition was met by 72 per cent. The programme
conditions include an allocation ceiling, however, in the event of the share price
doubling during the programme’s term. As the share price more than doubled during
the programme’s term, the allocation was reduced so that the participants received
69 per cent of the number of shares that they would have received without the ceiling.
Overall, this means that the participants received 75 993 shares free of charge.
The recognised cost of the programme totalled SEK 25 million during 2019–2022.

The 2022 AGM approved a new targeted share savings programme for key
individuals in the Group (‘LTIP 2022’). The aim of the programme is to strengthen
common interests between employees and shareholders, as well as to foster a
long-term commitment to Holmen.

Participation in the programme required a personal investment in Holmen shares
(known as ‘savings shares’). For each savings share invested in, a half share will
be allocated after the end of the vesting period, provided that the total return
on the company’s shares exceeds 10 per cent during the period 2022–2024.
Performance shares will also be allocated depending on the level of the return on
capital employed for the three Paperboard, Paper and Wood Products business
areas. The maximum number of performance shares varies depending on the
participant’s position and ranges between 3 and 6 shares per savings share. To
be allocated shares, a participant must be a permanent employee of the Holmen
Group and hold savings shares on the day of publication of Holmen’s interim report
for the first quarter of 2025. 73 people are taking part in the programme and the
maximum number of shares that may be allocated is calculated at 81 000. Costs of
SEK 17 million have been recognised for 2022.

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 2022, fees to the Board
amounted to SEK 3 510 000 (3 330 000). The Chairman of the Board received a fee
of SEK 780 000 (740 000), and each of the other seven (seven) members received
SEK 390 000 (370 000).

Senior management
Salary and other benefits for the CEO in 2022 amounted to SEK 10 753 215
(9 786 724), of which SEK 10 320 299 (9 360 000) relates to fixed salary and
SEK 432 916 (426 724) relates to other benefits. In addition to salary and other
benefits, in 2022 the CEO was allocated 14 547 shares under the LTIP 2019 share
savings programme, worth SEK 7 643 430. No allocation was made under the
share savings programme the previous year. The total pension cost for the CEO,
calculated in accordance with IAS 19, amounted to SEK 6 140 673 (5 907 348).
The recognised payroll cost for the LTIP 2019 and LTIP 2022 share savings
programmes for the CEO amounted to SEK 1 288 276 (2 309 061).

In 2022, 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, until May 2022, the head of international affairs, who report directly to the
CEO, totalled SEK 30 309 270 (30 826 296), of which SEK 29 196 504 (29 635
750) relates to fixed salaries and SEK 1 112 766 (1 190 546) relates to other
benefits. In addition to salaries and other benefits, in 2022 the other members
of senior management were allocated 30 288 shares under the LTIP 2019 share
savings programme, worth SEK 15 914 224. No allocation was made under the
share savings programme the previous year. The total pension cost for this group,
calculated in accordance with IAS 19, amounted to SEK 12 759 263 (12 027 090)
in 2022. The recognised payroll cost for the LTIP 2019 and LTIP 2022 share savings
programmes for this group amounted to SEK 2 313 342 (4 694 627).

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
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 32 million (32) at 31 December 2022 and for other members of senior
management to SEK 27 million (32), calculated in accordance with IAS 19. The
pension obligations are secured using plan assets managed by an independent
pension fund. These agreements were entered into in accordance with the guidelines
for remuneration to senior management that were applicable at the time.

Holmen Annual Report 2022

NotesNote 4

Note 4. Employees, personnel costs and remuneration to senior management, cont.

Board resolution regarding guidelines on remuneration for
senior management
The Board proposes that the 2023 AGM approve the guidelines below on remuneration
for senior management (Chapter 8, §§ 51–53 of the Swedish Companies Act).

The guidelines relate to the employment conditions of the Chief Executive Officer,
the Executive Vice President and other members of senior management, i.e. the
heads of business areas and heads of Group staff who report directly to the Chief
Executive Officer. The guidelines replace the guidelines approved by the 2020 AGM
and shall apply to remuneration agreed after the guidelines have been adopted
by the 2023 AGM. The guidelines do not cover remuneration determined by the
general meeting of shareholders.

Other benefits may include such items as health insurance, and accommodation
and car allowances. 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. Pension benefits should be based on
defined contributions and should usually be equal to 30 per cent of the person’s
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.

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 give Holmen the means to hire and
retain qualified employees and ensure that the forms of remuneration and other
conditions are uniform and consistent.

Forms of remuneration
Long-term share-based incentive schemes are introduced within the company
from time to time. These are approved by the general meeting of shareholders
and are therefore not covered by these guidelines. See holmen.com for more
information about these schemes.

Remuneration for senior management should be in line with market terms and
competitive within the job market for senior managers, as well as reflecting senior
management’s responsibilities, powers and performance. Remuneration may
consist of a fixed salary, variable remuneration, other benefits and a pension.

Variable remuneration should be aimed at encouraging and rewarding value-
creating initiatives that support the company’s business strategy, sustainability
and long-term interests. Variable remuneration should be calculated based on the
achievement of measurable targets and not exceed 50 per cent of the person’s
fixed annual salary. It should be possible to measure compliance with the criteria
for the payment of variable remuneration annually, under normal circumstances.

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 Chief Executive Officer
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.

Average no. of employees (FTE)

Average no. of
employees (FTE)

Of which
women

Of which
men

Average no. of
employees (FTE)

Of which
women

Of which
men

2022

2021

Parent company
Sweden

Group companies
France
Netherlands
UK
Sweden
Germany
USA
Other countries

Total Group
companies

Total Group

2 863

597

2 266

2 464

507

1 957

12
79
395
47
22
8
40

603

3 466

6
45
41
9
8
3
16

128

725

6
34
354
38
14
5
24

475

2 741

12
80
383
466
22
9
38

6
45
41
72
8
3
14

6
35
342
394
14
6
24

1 010

3 474

189

696

821

2 778

Proportion of women in Holmen’s Board of Directors and Group management

Proportion of women, %
Board (excl. deputy members)
Senior management

Total

Group

Parent company

2022
25
18

2021
25
17

2022
25
18

2021
25
17

Holmen Annual Report 2022

NotesNote 5. Auditors’ fee and remuneration

The audit firm PricewaterhouseCoopers AB (PwC) was elected by the 2022 AGM as
Holmen’s auditors for a period of one year. PwC performs the audit for Holmen AB
as well as for the majority of Holmen’s subsidiaries.

Remuneration to auditors

2022

2021

2022

2021

Group

Parent company

Audit assignments PwC
Tax advice PwC

Total

Other auditors

Total

8
0

8
1

6
0

5
1

‘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

2022

2021

2022

2021

-
0
-
1
11

-
0
-
-
8

446
-
25
1
84

536

382
-
-
-
26

408

*SEK 11 million (8) relates to interest income calculated using the effective interest
rate method from financial items valued at amortised cost.

Financial costs

Impairment losses on value of
shares in Group companies

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 agreements
Interest expense*

Financial costs

Net financial items

Group

Parent company

2022

2021

2022

2021

-26
-12

-29

-5
-65

-99

-87

3
0

-5

-2

-5
-41

-48

-39

-2

-2
-12

-7

-
-82

-88

448

-35
0

-5

-40

-
-49

-92

316

*SEK -7 million (-2) relates to the interest expense for derivatives valued at fair
value through other comprehensive income. SEK -2 million (-1) relates to the interest
expense for derivatives recognised at fair value through profit/loss for the year. The
remaining interest expense is calculated using the effective interest rate method and
relates to financial items valued at amortised cost.

Notes 5–6

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 56–57.

The income from financial instruments included in operating profit/loss is shown in
the following table:

Group

Parent company

Exchange gains/losses on trade
receivables and trade payables
Net gain/loss relating to
derivatives

2022

2021

2022

2021

204

-97

199

-96

2 703

336

2 775

314

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 2022 amounted to SEK -341 million
(120), with the remainder being recognised in other comprehensive income as
hedge accounting is applied. The fair value of outstanding currency hedges at
31 December 2022 was SEK -499 million (103).

Gains/losses on financial electricity hedges are recognised in the income
statement when they expire; for 2022 they totalled SEK 3 043 million (215).
The fair value of outstanding financial electricity hedges at 31 December 2022
was SEK 4 366 million (838). 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 7 million (-3) at 31 December
2022. In 2022 there was an impact of SEK 16 million (-23) on the cost of hedged
items owing to results from hedging.

Results from the hedging of foreign net assets amounted to SEK -28 million (-39)
in 2022 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 72 million
(180) on consolidated equity. The fair value of outstanding hedges of net assets
at 31 December 2022 was SEK 14 million (-12) and relates to financial derivatives.

The fair value of the derivatives used to manage the fixed interest periods
amounted to SEK 78 million (13) at 31 December 2022, which was recognised
in other comprehensive income as hedge accounting is applied. This value is
expected to be recognised in the income statement in 2023 and later.

Holmen Annual Report 2022

Notes

Note 7

Note 7. Tax

Taxes stated in income statement

2022

2021

2022

2021

Group

Parent company

Tax recognised totalled SEK -1 567 million (-688), corresponding to 21 per cent
(19) of profit before tax.

Current tax
Deferred tax

Total

-1 138
-429

-1 567

-456
-232

-688

-921
-9

-930

-426
-25

-451

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
Tax attributable to previous periods
Change to tax rate on deferred tax assets/liabilities
Other

Effective tax

Group

Parent company

2022

2021

2022

2021

SEKm

7 441

-1 533
7
21
-32
-2
8
-
-35

-1 567

SEKm

3 691

20.6
-0.1
-0.3
0.4
0.0
-0.1
-
0.5

21.0

-760
-2
65
-25
-2
4
-31
62

-688

20.6
0.0
-1.8
0.7
0.1
-0.1
0.8
-1.7

18.6

SEKm

4 948

-1 019
-
103
-8
-2
0
-
-4

-930

SEKm

2 541

20.6
-
-2.1
0.2
0.0
0.0
-
0.1

18.8

-523
-
79
-4
-2
0
-2
1

-451

20.6
-
-3.1
0.2
0.1
0.0
0.1
-0.1

17.7

Tax attributable to other
comprehensive income

Cash flow hedges
Share in joint ventures’ other
comprehensive income
Translation difference from foreign
operations
Hedging of currency risk in foreign
operations
Revaluation of forest land
Revaluation of defined benefit
pension plans

Before
tax

Tax

2022

Group

After
tax

Before
tax

Tax

2021

After
tax

Before
tax

Tax

2022

Parent company

After
tax

Before
tax

After
tax

Tax

2021

3 037

-618

2 419

504

-105

399

2 885

-594

2 291

505

-104

401

180

-28
4 373

6
-901

-22
3 472

-39
3 345

8
-689

-31
2 656

-6

-4

-12

-6

-
-

Other comprehensive income

7 449 -1 512

5 938

3 981

-780

3 201

2 885

-594

2 291

505

-104

401

Taxes as stated in balance sheet

2022

2021

2022

2021

Group

Parent company

Tax receivables
Deferred tax assets
Current tax receivables

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

2
589

592

3
70

6 153
4 553
1 143
850

6 016
3 648
1 171
606

-
579

579

-
601
3
0

-
39

-
601
2
-

789

196

790

196

-29

-4

Deferred tax liabilities

13 490 11 610

1 389

Current tax liabilities

Total tax liabilities

118

13 608 11 690

1 389

Holmen Annual Report 2022

-12

787

NotesChange in the net amount of deferred tax assets and deferred tax liabilities

Notes 7–8

Group

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

Translation
differences
and other

Business
combinations

Closing
balance

Opening
balance

Parent company

Stated
in the
income
statement

Stated in
other com-
prehensive
income

-6 016
-3 648

-1 171
-606

-196
29

-137
-4

-6
-244

-
-38

-
-901

-
-

-593
2

-11 608

-429

-1 491

-
-

-6
-

-
0

-6

-
-

39
-

-
7

-6 153
-4 553

-1 143
-850

-789
0

-13 488

-
-601

-2
-

-196
11

-787

-
0

0
-

-
-9

-9

Group

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

Translation
differences
and other

Reclassi-
fication

Closing
balance

Opening
balance

Parent company

Stated
in the
income
statement

Stated in
other com-
prehensive
income

-5 901
-2 939

-1 063
-509

-92
-66

-125
-10

-51
-97

-
51

-10 570

-232

-
-689

-
-

-105
6

-788

-
-

-13
-

1
-5

-17

10
-10

-44
-

-
44

-6 016
-3 648

-1 171
-606

-196
29

-
-596

-2
-

-91
32

-11 608

-657

-
-5

0
-

-
-20

-25

Closing
balance

-
-601

-2
-

-
-

-593
-

-789
3

-593

-1 389

Closing
balance

-
-601

-2
-

-196
11

-
-

-104
-

-104

-787

2022

Biological assets
Forest land
Property, plant and
equipment
Tax allocation reserve
Transactions subject
to hedge accounting
Other

Deferred net tax
liability

2021

Biological assets
Forest land
Property, plant and
equipment
Tax allocation reserve
Transactions subject
to hedge accounting
Other

Deferred net tax
liability

The Group’s deferred tax liability for forest assets (biological assets and forest land)
amounts to SEK 10 706 million (9 664) and is calculated based on the difference
between book value SEK 52 151 million (47 080) and taxable cost SEK 181 million
(173). 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. Deferred tax
assets from leases in accordance with IFRS 16 total SEK 1 million net, of which
SEK 51 million of deferred tax assets and SEK -50 million of deferred tax liabilities.

The amount recognised in other comprehensive income includes deferred tax
mainly related to a change in the value of forest land of SEK -901 million (-689)
and a hedge reserve of SEK -593 million (-105).

The Swedish Tax Agency has rejected Holmen AB’s group relief claim relating
to tax losses in Spanish subsidiaries that were liquidated. Holmen intends to
appeal the decision. The deductions correspond to SEK 386 million in tax, but
no tax receivable has been recognised. There are no other loss carry-forwards of
significance in the Group.

The share savings programme introduced by decision of the 2019 AGM expired
in May 2022, which means that the participants have been allocated 75 993
matching and performance shares. The 2022 AGM decided on a new share savings
programme. The new programme may lead to the allocation of 81 000 shares from
Holmen’s own holding of shares. The effects on key ratios and profit per share are
marginal. See Note 4 for more information about the share savings programme.

Note 8. Earnings per share

Group

2022

2021

Total number of shares outstanding,
1 January
Share savings programme allocation

Total number of shares outstanding,
31 December

161 925 685
75 993

161 925 685
-

162 001 678

161 925 685

Shareholders’ share of profit/
loss for the year, SEK
Basic average number of shares

5 874 297 908 3 003 524 941
161 925 685

161 975 028

Basic EPS for the year, SEK

36.3

18.5

Shareholders’ share of profit/
loss for the year, SEK
Diluted average number of shares

5 874 297 908 3 003 524 941
161 925 685

161 975 028

Diluted EPS for the year, SEK

36.3

18.5

Holmen Annual Report 2022

NotesNote 9

Note 9. Forest assets

Holmen owns land totalling 1 305 000 hectares, of which 1 045 000 hectares are
defined as productive forest land with an estimated volume of standing timber of
125 million cubic metres (m3) of growing stock, solid over bark. The holdings are
distributed over three regions in Sweden.

Volume of
standing
timber, millions
m3 growing
stock, solid
over bark

Productive
forest land,
’000 ha

North
Central
South
Total

690
264
92
1 045

75
36
15
125

North

Central

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 calculation
is carried out through an appraisal of the
valuations that are based partly on price
statistics published by various market
participants, and partly on detailed
information regarding transactions with
forest properties over the past three years.
The price statistics refer to SEK per m3
growing stock, solid over bark, which is paid on average in the various counties in
Sweden where Holmen has land. The calculation based on transactions with forest
properties is carried out as a regression analysis based on transactions exceeding
20 hectares in the areas where Holmen has land.

South

The price statistics used in the valuation are public information that comes from
market participants who are independent of Holmen. The transaction data that
are used come from Lantmäteriet (the Swedish mapping, cadastral and land
registration authority) and were processed by an external party. In the areas where
Holmen has land about 300 transactions involving forest properties are carried
out annually. Transactions between legal entities are not normally included in the
calculations for price statistics or transaction data. Holmen has chosen to use three
years of price statistics and transaction data in the valuation. If a different time
period were used, the book value would be affected.

Market data

Number of
transactions
Average size of
property (ha)

2022

2021

2020

2019

322

138

308

140

263

117

246

122

The book value of forest assets amounted to SEK 52 151 million (47 080) at
31 December 2022. 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. The following two
graphs show Holmen’s recognised value of forest assets by region, stated in both
SEK million and in SEK per hectare.

Book value, SEKm

Book value, SEK/hectare
140 000

120 000

100 000

80 000

60 000

40 000

20 000

2019
Northern Sweden

2020
Central Sweden

2021

2022

Southern Sweden

The recognised value of forest assets is primarily dependent on how large the
volume of standing timber is estimated to amount to and the market price per m3
growing stock, solid over bark calculated based on price statistics and transaction
data collected from external parties. The table below shows how the value is
affected by changes in the size of the volume of standing timber and the market
price, respectively.

Price statistics and market data
Northern Sweden SEK 10/m3 growing stock, solid over bark
SEK 10/m3 growing stock, solid over bark
Central Sweden
Southern Sweden SEK 10/m3 growing stock, solid over bark
Holmen’s volume
of standing timber

1 million m3 growing stock, solid over bark

SEKm
750
360
150

420

The size of Holmen’s volume of standing timber is calculated based on the most
recent inventory, updated with the completed harvest and estimated growth after
the time of inventory. In the most recent inventory, an external party carried out
a random sample inventory with a standard error of 1.4 per cent. The inventory
is normally carried out every ten years. The diagram below shows the volume of
standing timber measured as m3 growing stock, solid over bark, per hectare in the
inventories carried out since 1988 and the estimated volume of standing timber at
31 December 2022.

Volume of standing timber m3 growing stock, solid over bark
per hectare productive forest land, average for Holmen’s
forest assets

160

120

1988

1993

2000

2010

2020

2022

The diagram below shows the price for forest properties measured in SEK per m3
growing stock, solid over bark, based on annual price statistics and transaction
data for the regions in the country where Holmen owns land.

Price of forest properties, SEK/m3 growing stock, solid over bark

60 000

40 000

20 000

2019

2020

2021

2022

1 000

750

500

250

2015

2016

2017

2018

2019

2020

2021

2022

Northern Sweden

Central Sweden

Southern Sweden

Northern Sweden

Central Sweden

Southern Sweden

Holmen Annual Report 2022

Notes

To verify Holmen’s own valuation of the forest assets, an external independent
valuation of parts of the forest holdings is carried out every year, with the aim of
having a reference valuation of the entire forest holdings over five years. Since
Holmen began to recognise forest assets at fair value in 2019, the company Forum
Fastighetsekonomi has carried out external valuations each year. At the end of
2022, forest properties corresponding to 90 per cent of the book value were
valued by Forum Fastighetsekonomi. The external valuations exceed the internal
valuations by 7 per cent.

The value of the forest assets is allocated in the balance sheet to growing
trees, SEK 29 867 million, recognised as a biological asset, and forest land,
SEK 22 284 million.

Biological assets
The value 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 and costs
are calculated based on long-term trend levels. The trend price that was used for
2022 was SEK 476 (466)/m3sub, which is lower than current prices. The costs are
based on the current level adjusted for temporary effects. 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 harvest have not been included.

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 2022 totalled SEK 509 million (464).

Wood prices, SEK/m3sub

600

500

400

300

200

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

Real

Nominal

Note 9

Planned harvest, ’000 m3sub/year

3 500
3 000

2 500

2 000

1 500

1 000

500

2003-
2007

2008-
2012

2013-
2017

2018-
2022

2023-
2027*

2028-
2032*

2033-
2037*

2038-
2042*

Harvest

Thinning

Storms & other events

*Forecast

The table below shows how the value of biological assets would be affected by
changes in the most significant valuation assumptions.

Annual change

+0.1% per year

Harvest rate
Price inflation
Cost inflation

Change in level
Harvesting
Prices
Costs

+1 %

Discount rate

+0.1%

SEKm

1 080
1 620
-670

350
520
-230

-840

Annual change refers to the annual rate of change used in the valuation of each
parameter. For example, an increase of 0.1 per cent means that the annual price
inflation will be increased from 2.0 per cent to 2.1 per cent in the calculations.
Change in level means that the level for each parameter and year changes. For
example, a 1 per cent price increase means that the wood prices in the calculations
are raised by 1 per cent for all years (change of level).

Note that the discounted cash flow model for biological assets only affects the
dividing of the forest assets’ value between biological assets and forest land.
The changed assumption would not affect the value of the forest assets, but only
transfer the value between biological assets and forest land.

Forest land
The book value of the forest land is calculated as the difference between the total
value of the forest assets and the 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 fair value for forest land is recognised in other comprehensive
income and totalled SEK 4 373 million (3 345) in 2022. No value is assigned to
land that is not productive forest land.

Group

Book value at beginning of year
Acquisitions
Disposal
Investment in reforestation
Change due to harvesting
Unrealised change in fair value
Other changes
Book value at end of year

Of which

Forest assets

Biological assets

Forest land

2022

47 080
71
-9
127
-836
5 718
0
52 151

2021

43 202
42
-120
142
-695
4 503
7
47 080

2022

29 204
33
-6
127
-836
1 345
0
29 867

2021

28 663
24
-93
142
-695
1 158
5
29 204

2022

17 876
38
-3
-
-
4 373
0
22 284

2021

14 538
18
-27
-
-
3 345
2
17 876

The acquisition cost of forest land amounted to SEK 338 million at 31 December 2022.

Holmen Annual Report 2022

Notes
Notes 10–11

Note 10. Non-current intangible assets

Group

Other
intangible assets

Total

Parent company

Non-current
intangible assets

Goodwill

2022

2021

2022

2021

2022

2021

2022

2021

Accumulated acquisition costs
Opening balance
Business combinations
Investments
Disposal and retirement of assets
Translation differences

Total

Accumulated amortisation, depreciation and
impairment losses
Opening balance
Business combinations
Depreciation and amortisation for the year
Disposal and retirement of assets
Impairment losses
Translation differences

Total

358
-
-
-
-

358

-
-
-
-
-
-

355
4
-
-
-

358

-
-
-
-
-
-

Residual value according to plan at end of year

358

384
4
6
-1
0

392

203
1
32
-1
87
0

323

370
-
13
-
1

384

170
-
32
0
-
1

203

181

742
4
6
-1
0

750

203
1
32
-1
87
0

323

427

725
4
13
-
1

742

170
-
32
0
-
1

203

539

68
-
-
-1
-

55
-
4
-1
-
-

68
-
-
-
-

50
-
5
-
-
-

The goodwill recognised is attributable to the Wood Products business area, and relates to the acquisition of Martinsons in 2020. The goodwill refers to the value of
integrating Holmen’s own forest with its own industrial plants. 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 future cash flows are based on current levels of selling prices, costs
and volumes for the coming year. When calculating cash flows for subsequent periods, prices and costs are used based on historical data. 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 right-of-use relating to certain energy assets amounting to SEK 60 million (57) and IT systems amounting to
SEK 2 million (5). The book value of the wood supply business included in the 2020 acquisition of Martinsons totals SEK 0 million (110) after impairment losses. The assets
are mainly externally acquired and all the 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

2022

2021

2022

2021

2022

2021

2022

2021

6 512
109
65
158
-18
19

6 845

4 059
43

134
-15
13

4 234

2 612

6 441
-
54
37
-72
52

6 512

3 971
-

122
-70
36

4 059

2 454

31 352
588
829
157
-223
136

32 839

29 739
-
657
1 061
-492
387

31 352

363
-
332
-316
-
1

381

676
-
782
-1 098
-
3

363

24 456
257

23 660
-

1 088
-198
103

995
-487
288

25 706

24 456

-
-

-
-
-

-
-

-
-
-

7 132

6 895

381

363

38 227
697
1 226
-
-241
156

40 065

28 515
300

1 222
-213
116

29 940

10 124

36 858
-
1 493
-
-564
442

38 227

27 632
-

1 117
-557
324

28 515

9 711

Group

Accumulated acquisition costs
Opening balance
Business combinations
Investments
Reclassifications
Disposal and retirement of assets
Translation differences

Total

Accumulated amortisation, depreciation and
impairment losses
Opening balance
Business combinations
Depreciation and amortisation according
to plan for the year
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.

Holmen Annual Report 2022

NotesNotes 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

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

499
-
-
-

499

-
-

478
21
-
-

499

-
-

203
7
6
-

215

190
5
8
-

203

143

139

5
0

4
-

148

143

2 388
-

2 388

2 388
-

2 388

1
-

306
58
-
-32

332

194

48
-32

210

-
-

303
45
-
-42

306

193

43
-42

194

-
-

2 887

124

113

15
1
-6
-

-
-

10
13
-8
-

-
-

1 024
66
-
-32

1 055

982
84
-
-42

1 024

336

53
-32

357

333

44
-42

336

2 388
-

2 388

2 388
-

2 388

3 088

3 075

For forest assets in the Group see Note 9. In 2022, capitalised borrowing costs totalled SEK 0 million (6). An interest rate of 1.2 per cent (1.2) was used to determine the amount.

Note 12. Right-of-use assets (leases)

Group

Accumulated acquisition costs
Opening balance
Additional agreements
Completed leases

Total

Accumulated depreciation and amortisation
Opening balance
Depreciation and amortisation for the year
Completed leases

Total

Value at end of year

Buildings

Machinery and equipment

Total

2022

2021

2022

2021

2022

2021

261
19
-23

257

77
42
-23

161

235
57
-32

261

63
46
-32

184

191
73
-93

172

135
48
-93

188
11
-8

191

78
66
-8

135

452
92
-116

429

212
91
-116

187

242

424
68
-40

452

141
111
-40

212

240

Buildings
The Group’s rental of buildings refers to 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 leases usually have a term of between 2 and 5 years.

Amounts recognised in profit/loss

2022

2021

Depreciation and amortisation
Interest expense
Costs related to current lease liabilities
Costs related to low-value leases
Costs related to variable lease payments

91
5
2
2
0

100

111
5
4
3
0

122

In 2022, the Group’s payments attributable to leases amounted to SEK 100 million
(122). 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 or 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 2022

NotesNote 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

2022
10
0

2021
0
3

Associates and joint ventures

Associates

Joint ventures

Total

Group

Parent company

Group

Parent company

Group

Parent company

Book value at beginning of year
Investments
Share of earnings
Reclassification between joint ventures
and subsidiaries
Translation difference
Disposals
Other

2022

1 675
0
6

2021

1 642
33
0

-
0
-2
-

-
-
-
-

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

92
2
-

-
-
-
-

87
5
-

-
-
-
-

81
-
3

-84
-
-
-

75
3
3

-
0
-
0

67
-
-

-67
-
-
-

64
3
-

1 756
0
10

1 717
36
3

-
-
-
-

-84
0
-2
-

-
0
-
0

1 680

1 756

159
2
-

-67
-
-
-

151
8
-

-
-
-
-

159

Book value at end of year

1 680

1 675

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
2 050
2 014

49.4
6.8
13.9
9.9
41.0
40.3

556914-9833

Stockholm

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**

Book value
in the parent
company

Holding
%*

Value of
holding in
consolidated
accounts**

Book value
in the parent
company

2022

1 522
90
36
0
20
10
1

1 680

49.4
6.8
13.9
9.9
46.0
40.3

50.0

-
90
-
0
3
1
-

2021

1 518
90
36
0
20
10
1

1 675

1 756

-
90
-
0
2
-
0

159

*The percentage of ownership corresponds to the percentage of votes for the total number of shares.
**The proportion of equity is recognised in the Renewable Energy and Wood Products business areas, at SEK 1 649 million (1 725) and SEK 31 million (31) respectively.
*** In February 2022, Holmen acquired the remaining 50 per cent of shares in Varsvik AB. Varsvik AB has since been included in the Holmen Group’s subsidiaries.

See Note 26 for further information.

Group

Parent company

Other shares and participations

2022

2021

2022

2021

Book value at beginning of year
Investments
Disposals
Translation difference

Book value at end of year

2
-
-
0

2
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 associates only earn 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 1 522 million
(1 518). Holmen purchased 553 GWh (515) of electrical power from Harrsele AB
in 2022, giving Holmen an operating profit of SEK 437 million (180) 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 169 million (155).
The company’s shareholders made a shareholders contribution during the year of
SEK 0 million (52).

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.

Holmen Annual Report 2022

Notes
Note 14

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

2023

2024

2025

2026

2027-

-7

-821
-3 848

-276
-

-49
-

-34
-

-
-

-79

-52
-1 103 -1 065

-42
-943

-31
-531

-51
-510

3 631
2 929

950
-

337
-

1 941

14
-

-
-

* Liabilities relating to right-of-use assets are not classified as a financial
instrument 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

2023

2024

2025

2026

2027-

-12

-5

-3

-2

-712
-3 617
-1 102

-216
-
-1 499

-49
-
-943

-34
-
-531

-
-
-508

3 630
2 454

950
-

373
-

1 825

3 601

48
-

-
-

144

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 pension obligations (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 56–57.
SEK 1 039 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 3 833 million (946). Assets
and liabilities are not offset in the report. Recognised derivatives totalled
SEK 5 020 million (1 097) on the asset side and SEK 1 187 million (151) on
the liability side.

The ongoing Interest Rate Benchmark 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 Interest Rate Benchmark
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 56–57 and Note 6.

Holmen Annual Report 2022

NotesNote 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
Cash and cash equivalents

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)

Recognised at
fair value through
profit/loss*

Hedging instruments

Recognised at
amortised cost

Total book value

Fair value

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

-
-

-
2
-

-
-
-

-
-3
-
-

-3

2
-

-
-

-
6
-

-
-
-

-
-11
-
-

-11

2
-

78
-

-
7
-

-
-
-

-
-5
-
-

-5

-
-

19
-

-
-
-

-
-6
-

-6

-
-12
-
-

-12

-
19

2
-
7

1 935

-2 900
-
-2

-2 902

-
-
-18
-1 013

-1 031

-
248

248

0
-
33

78
19

2
9
7

19
248

268

0
6
33

78
19

2
9
7

507

1 935

507

1 935

-3 900
-
-5

-3 905

-200
-
-10
-503

-713

-2 900
-
-2

-2 902

-
-7
-18
-1 013

-1 039

-3 900
-6
-5

-3 911

-200
-23
-10
-503

-736

-2 900
-
-2

-2 902

-
-7
-18
-1 013

-1 039

19
248

268

0
6
33

507

-3 900
-6
-5

-3 911

-200
-23
-10
-503

-736

-
-

-
2 929

-
2 393

2
2 929

2
2 393

2
2 929

2
2 393

200

4 732

1 037

4 933

1 072

4 933

1 072

-321

-119

-22

-3 848

-2 836

-3 848

-2 836

-3 848

-2 836

-859

3 873

-99

938

-1 180

-919

-443

2 836

-122

508

-1 180

2 836

-122

508

Total financial instruments

-120

-9

3 954

939

-2 890

-4 273

944

-3 325

944

-3 325

*Refers to instruments compulsorily valued at fair value in accordance with IFRS 9.

Holmen Annual Report 2022

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
Cash and cash equivalents

Non-current liabilities
Bonds
Liabilities to Group companies
Derivatives

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

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

-
-
-

-
9
-

-
-14
-

-14

-
-7
-
-

-7

0
-

-
-
-

-
6
-

-
-
-

-
-23
-
-

-23

0
-

78
-
-

-
-
-

-
-
-
-

-
-

19
-
-

-
-
-

-
-
-6

-6

-
-
-
-

-
-

-
3 553
17

3 570

2
-
6

1 774

-2 900
-420
-

-3 320

-
-
-18
-1 013

-1 031

-
3 910
246

4 157

0
-
33

78
3 553
17

3 648

2
9
6

19
3 910
246

4 176

0
6
33

78
3 553
17

3 648

2
9
6

445

1 774

445

1 774

-3 900
-607
-

-4 507

-200
-
-10
-503

-713

-2 900
-434
-

-3 334

-
-7
-18
-1 013

-1 039

-3 900
-607
-6

-4 513

-200
-23
-10
-503

-736

-2 900
-434
-

-3 334

-
-7
-18
-1 013

-1 039

19
3 910
246

4 176

0
6
33

445

-3 900
-607
-6

-4 513

-200
-23
-10
-503

-736

-
2 454

-
2 068

0
2 454

0
2 068

0
2 454

0
2 068

323

4 685

1 037

5 007

1 072

5 007

1 072

-82

241

229

-24

-3 617

-2 540

-3 617

-2 540

-3 617

-2 540

-929

3 756

-101

936

-1 010

-1 163

-472

2 835

-125

475

-1 010

2 835

-125

475

-6

3 835

950

-162

-1 057

3 901

-114

3 901

-114

*Refers to instruments compulsorily valued at fair value in accordance with IFRS 9.

Holmen Annual Report 2022

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

2022

810
356
1 234

2021

2022

2021

664
355
975

810
335
877

664
307
674

2 322

1 778

1 870

1 218

116

4 838

3 818

3 965

2 886

During the year impairment losses and reversal of previous impairment losses
for finished stock had an effect of SEK -65 million (7) on Group profit, while
impairment losses on other stock had an effect of SEK -7 million (-5). Impairment
losses and reversal of previous impairment losses for finished stock had an effect
of SEK -35 million (7) on the parent company, with impairment losses on other
stock of SEK -5 million (-3).

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

2022

2021

2022

2021

-
69
2 860

2 929
907
4 933
563

6 402

-
50
2 343

2 393
425
1 072
179

1 676

12
69
2 373

2 454
797
5 007
347

6 152

108
50
1 910

2 068
320
1 072
157

1 548

Total operating receivables

9 332

4 069

8 606

3 616

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 0 million (20). The provision for expected
credit losses was SEK 28 million (28). During the year, the provision decreased by
SEK -3 million (-26) as a result of actual credit losses, and increased by SEK 3 million
(8) as a result of changes in the provision for anticipated or expected credit losses.
At 31 December 2022, SEK 29 million (19) 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.

31 Dec 2022

Registered share capital

Class A
Class B
Total no. of shares
Holding of repurchased class
B shares

Total number of shares
outstanding

Number

45 246 468
117 265 856
162 512 324

-510 646

162 001 678

Quotient
value

26
26

SEKm

1 180
3 058
4 238

31 Dec 2021

Registered share capital

Class A
Class B
Total no. of shares
Holding of repurchased class
B shares

Total number of shares
outstanding

Number

45 246 468
117 265 856
162 512 324

-586 639

161 925 685

Quotient
value

26
26

SEKm

1 180
3 058
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.

At 31 December 2022, the Group’s own shareholding was 510 646 shares
(586 639). During the year, 75 993 shares were transferred to participants in the
share savings programme.

Assets and liabilities measured at fair value according to Chapter 4 Section 14a
of the Swedish Annual Accounts Act had an impact of SEK 4 064 million (944) on
parent company equity. In the consolidated accounts, valuation of derivatives and
other financial instruments had an impact of SEK 3 834 million (930) 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 11 532 865 159.
The Board proposes that the AGM, to be held on 28 March 2023, approve a dividend of
SEK 16.00 per share. The proposed dividend totals SEK 2 592 million. The Board also
proposes that the remaining amount of SEK 8 940 838 311 be carried forward.

The preceding year, the dividend paid was a total of SEK 11.50 per share
(SEK 1 862 million).

Net financial debt as a percentage of equity was 4 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 53–57.

Holmen Annual Report 2022

Notes

Note 18

Note 18. Pension obligations

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.

The change in the defined benefit obligations and the change in plan assets are
specified in the table on the left. 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. In 2022, the trusts entered into an
agreement with a life insurance company that, in exchange for a one-time payment
made in December 2022, will compensate the trusts for all their future pension
payments, and thereby bear the risk of future changes in pension payments as a
result of changes in inflation, mortality rates, and so on. In both trusts, the assets
exceed the commitment, but no surplus may be included in the accounts. This
adjustment is referred to as an asset ceiling in tables.

Group

Parent company

The weighted average duration is 11 years.

Cost recognised in profit/loss
for the year
Defined benefit plans
Personnel costs*
Financial income and costs
Indexation change**

Total defined benefit plans stated
in profit/loss for the year
Defined contribution plans
Personnel costs

2022

2021

2022

2021

-6
10
-

-9
2
65

-26
0
-

-26

21
0
-

-184

-173

-148

-135

Total recognised in profit/loss
for the year
*SEK -20 million (27) is included in the parent company relating to an item that is
recognised in the Group as an actuarial revaluation in other comprehensive income.

-115

-114

-180

-174

**Change in the index-based price of defined benefit plans in the UK.

Cost recognised in other comprehensive income
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

Group

2022

2021

-827

210

593

142

-48
1
247

-6

5
6
-380

-12

Group

Parent company

Obligations
Obligations at 1 January
Current service cost
Payroll tax
Interest expense
Actuarial gains/losses
Benefits paid
Indexation change
Exchange differences
Obligations at 31 December

Plan assets
Fair value of assets at 1 January
Recognised interest income
Expected return excl. recognised
interest income
Real return (parent company)
Administrative expenses
Receipts and outgoings from
employer
Benefits paid
Exchange differences
Fair value of assets at
31 December

Effect of asset ceiling
Pension obligations, net

2022

2021
-2 070 -2 161
-9
0
-28
151
92
65
-179
-1 471 -2 070

-6
6
-39
574
116
-
-52

2 568
49

2 231
30

-827
-
-3

17
-116
65

210
-
-2

-12
-92
202

1 753

2 568

-289
-7

-522
-24

2022
-175
-10
-
-2
-
13
-
-
-175

174
-

-
-13
-

-
-
-

161

-
-13

2021
-182
-3
-
-2
-
12
-
-
-175

178
-

-
25
-

-29
-
-

174

-
0

Of the Group’s total obligations, SEK 10 million (10) refers to those that are not
funded, while the rest are wholly or partially funded obligations. Of the parent
company’s obligations, SEK 13 million (0) are secured under the Swedish Pension
Obligations Vesting Act.

Plan assets by type are as shown below:

Plan assets
Equities
Bonds and bank account balances
Life insurance company
receivables

Group

2022
71
405

1 277

1 753

2021
1 052
1 516

2 568

Parent company
2021
93
82

2022
71
90

161

174

The plan assets do not include any financial instruments issued by Group
companies or assets used by the Group. All instruments are traded on an active
market. In 2022, most of the UK trusts’ holdings of shares and bonds were sold
to finance the above agreement with the life insurance company. Of the shares,
100 per cent are Swedish shares, and of the bonds, 61 per cent are government
bonds and 39 per cent corporate bonds.

Key actuarial assumptions, Group
(weighted average)
Discount rate, %
Rate of salary increase, %
Rate of price inflation, %
Life expectancy after 65 for men/
women, years
Life expectancy table

Key actuarial assumptions, Group
Discount rate
Rate of salary increase
Rate of price inflation
Life expectancy after 65 for men/
women, years
Life expectancy table

31 Dec 2022 31 Dec 2021
2.0
-
2.9

4.9
-
2.8

21/24
SAPS S3PA

Sweden
31 Dec 2022 31 Dec 2021
1.2
3.0
2.0

3.7
3.0
2.0

22/24
DUS21

22/24
DUS14

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 0.2 per cent (-0.1) 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).

Sensitivity analysis
Discount rate (+0.5%)
Rate of salary increase (+0.5%)
Rate of price inflation (+0.5%)
Mortality (+ 1 year in life expectancy)

Group
31 Dec 2022 31 Dec 2021
-133
2
98
110

-71
1
55
62

The Group’s payments into the funded defined benefit plans in 2023 are expected
to amount to SEK 0 million.

Holmen Annual Report 2022

NotesNotes 18–21

Note 18. Pension obligations, cont.

Note 20. Operating liabilities

Multi-employer plans
The year’s premiums for pension insurance policies taken out with Alecta’s ITP
2 plan amounted to SEK 32 million (36) and are included among personnel costs
in the income statement. Holmen’s active members in the plan amounted to
640 people, which corresponds to 0.16 per cent of the plan’s active members.
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 2022, Alecta’s collective consolidation level
was 172 (172) per cent and Alecta decided to introduce a premium reduction for
2023. Expected premiums to Alecta in 2023 amount to SEK 23 million, taking the
premium reduction into account.

Note 19. Provisions

Group

2022

2021

Book value at beginning of year
Business combinations
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

Parent company

Book value at beginning 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

409
6
66
-31
-9
-
0

441
441

599
130
-118
-2

609
454
155

654
-
6
-169
-50
-32
0

409
409

744
120
-261
-5

599
467
132

Provisions mainly relate to obligations to restore the environment at discontinued
factory sites. SEK 140 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.

Trade payables
Group companies
Other

Total trade payables
Current liabilities
Associates
Other
Derivatives
Accruals and deferred income

Total other operating liabilities

Group

Parent company

2022

2021

2022

2021

-
3 848

3 848

3
359
1 180
853

2 395

-
2 836

2 836

2
257
122
878

1 259

2
3 615

3 617

3
289
1 010
674

1 976

70
2 470

2 540

2
192
125
587

906

Total operating liabilities

6 243

4 095

5 593

3 446

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 248 million (231), discounts of SEK 92 million (84) and
goods and services delivered but not yet invoiced of SEK 78 million (68).

The fair values of derivatives relate to hedges of future cash flows. See Note 14.

Note 21. Collateral and contingent liabilities

Contingent liabilities

Guarantees on behalf of Group
companies
Other contingent liabilities

Total

Group

Parent company

2022

2021

2022

2021

-
51

-
64

69
51

60
62

120

122

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. Under Swedish
law, Holmen has strictly unlimited liability for damages towards third parties
caused by dam failures. Holmen has liability insurance for such damages.

Holmen Annual Report 2022

NotesNote 22

Note 22. Related parties

Of the parent company’s net sales of SEK 21 995 million (18 186), SEK 438 million
(964) relates to deliveries of goods to Group companies. The parent company’s
purchases of goods from Group companies amounted to SEK 95 million (1 722).
Parent company net sales also include income from the sale of silviculture services
to subsidiaries for an amount of SEK 475 million (459). SEK 2 469 million (2 183) 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 58–59).
Holmen rents office premises for SEK 7 million (8) from Fastighets AB L E Lundberg,

which is a group company within L E Lundbergföretagen AB. In 2022, Fredrik
Lundberg, who is CEO and principal shareholder in L E Lundbergföretagen, received
a fee of SEK 780 000 (740 000) 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 390 000 (370 000).

In February 2022, Holmen acquired the remaining 50 per cent of the shares in wind
power company Varsvik AB and the company is since recognised as a subsidiary of
Holmen AB.

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

2022

541
0

438
541
0

2021

265
1

964
265
1

2022

2021

2022

2021

2022

2021

2022

64
-

95
64
-

54
-

1 722
54
-

0
1

510
0
1

0
10

399
0
10

3
-

439
3
-

2
2

680
2
-

81
-

3 646
81
-

2021

60
254

4 018
60
254

See Note 4 for fees and remuneration paid to members of the Board.

Holmen Annual Report 2022

NotesNote 23

Note 23. Investments in Group companies

Accumulated acquisition costs

Opening balance
Shareholder contributions and investments
Reclassification from joint ventures to
subsidiaries
Disposals
Liquidations

Total

Accumulated impairment losses

Opening balance
Impairment losses for the year
Liquidations

Total

Parent company

2022

12 831
156

2021

13 112
31

67
0
0

-
-
-312

13 054

12 831

1 357
-
-

1 357

1 666
2
-312

1 357

Book value at end of year

11 697

11 474

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’.

Corporate ID No.

Registered office

Number of
holdings

Book value
in the parent

Holding %*

company Holding %*

Book value
in the parent
company

Parent company’s direct holdings
of investments in subsidiaries

Holmen Skog AB
Holmen Wood Products AB
Holmen Paper AB
Holmen Iggesund Paperboard AB
Holmen Energi AB
Holmen Skog Mitt AB
Holmen Skog Syd AB
Holmen Sågverk AB
Martinsons Såg AB
Holmens Bruk AB
Iggesunds Bruk AB
Holmen Vattenkraft AB
Ljusnan Vattenkraft AB
Blåbergsliden Vind AB
Martinsons Skogsfastigheter AB
Terminalen i Bastuträsk AB
Varsvik AB
Other Swedish Group companies

Total Swedish holdings

556220-0658
556099-0672
556005-6383
556088-5294
556524-8456
559165-6623
559165-6631
559165-6672
556218-2856
559165-6615
559165-6656
559165-6664
559165-6680
559138-5181
556738-2154
556591-5898
556914-9833

Holmen UK Ltd, UK
Holmen Paper Ltd***
Holmen Iggesund Paperboard (Workington) Ltd***
Holmen France S.A.S., France
Holmen GmbH, Germany
Holmen Paper S.A., Spain
Iggesund Paperboard Asia Pte Ltd, Singapore
Iggesund Paperboard Inc, US
Iggesund Paperboard Asia (HK) Ltd, China
Holmen B.V., Netherlands
AS Holmen Mets, Estonia
Other non-Swedish Group
companies

Total non-Swedish holdings

Total

Örnsköldsvik
Hudiksvall
Norrköping
Hudiksvall
Örnsköldsvik
Stockholm
Stockholm
Stockholm
Skellefteå
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm
Stockholm

Workington
London
Workington
Paris
Hamburg
Madrid
Singapore
Lyndhurst
Hong Kong
Amsterdam
Tallinn

1 000
1 000
100
1 000
1 000
1 000
1 000
1 000
50 000
1 000
1 000
1 000
1 000
500
1 000
1 000
500

1 197 100
-
-
10 000
-
60 000
800 000
1 000
4 000 000
35
500

*The percentage of ownership corresponds to the percentage of votes for the total number of shares.

**The percentage of ownership of Varsvik AB was 50 per cent in 2021 and is recognised as a joint venture.

***Indirect holdings.

Holmen Annual Report 2022

2022

2021

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
2 856
1 527
422
831
383
740
2 663
276
200
70
18
163
2

10 152

1519
-
-
0
1
1
4
7
5
7
0

1 545

11 697

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
2 856
1 527
422
858
383
740
2 663
276
200
-
-

9 929

1 519
-
-
0
1
1
4
7
5
7
0

1 545

11 474

NotesNote 24. Untaxed reserves

Parent company

Untaxed reserves

Accumulated depreciation
and amortisation in excess
of plan
Non-current intangible
assets
Property, plant and
equipment

31 Dec
2021

Appropriations

31 Dec
2022

-9

-7

Untaxed reserves

Tax allocation reserves
2016 fiscal year
2017 fiscal year
2019 fiscal year
2020 fiscal year
2021 fiscal year
2022 fiscal year

Group contributions received amounted to SEK 1 013 million (1 495) and Group
contributions paid amounted to SEK -322 million (-230). Total appropriations of
profit amounted to SEK 511 million (768).

Total

Notes 24–25

31 Dec
2021

Appropriations

31 Dec
2022

290
470
700
700
680
-

2 840

2 852

-290

1 490

1 200

1 202

-
470
700
700
680
1 490

4 040

4 053

Note 25. Cash flow statement

Interest paid and dividends
received

Dividends received
Interest received
Interest paid

Total

Group

Parent company

2022

2021

2022

2021

-
9
-48

-39

1
8
-39

-30

446
81
-59

467

382
26
-36

371

The change in current liabilities mostly relates to borrowing within the Group’s
commercial paper programme. In 2022, a number of different short-term loans
totalling SEK 800 million (2 300) were raised within the Group’s commercial
paper programme, and SEK 1 000 million (2 600) 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 obligations

Financial liabilities*

2020

3 900
500
126

287
48

4 860

New
leases

-
-
-

67
-

Cash
flow

500
-300
-89

-115
-8

-12

Currency
and market
revaluation

-
-
11

5
-16

2021

4 400
200
47

244
24

4 915

Business
combinations

New
leases

-
-
3

-
-

-
-
-

93
-

Currency
and market
revaluation

2022

- 3 900
-
-
41
28

5
7

247
7

40 4 195

Cash
flow

-500
-200
-37

-95
-24

-856

*Including liabilities relating to right-of-use assets and pension obligations.

Parent company

Bonds
Commercial paper
Liabilities to Group companies
Other financial liabilities
Pension obligations

Financial liabilities*

*Including pension obligations.

Cash
flow

500
-300
428
-
-5

623

Currency
and market
revaluation

-
-
10
14
2

2021

4 400
200
607
42
0

5 250

Cash
flow

-500
-200
-171
-26
13

-884

Currency
and market
revaluation

-
-
-2
22
-

2022

3 900
-
434
39
13

4 386

2020

3 900
500
169
28
4

4 601

Holmen Annual Report 2022

NotesNotes 26–27

Note 26. Business combinations

In February 2022, Holmen acquired the remaining 50 per cent of the shares in the
partly owned company Varsvik AB. The 17 wind turbines in Varsvik provide 51 MW
and production totals 150 GWh in a normal year. The final purchase price, restated
to 100 per cent of the shares, was SEK 190 million. The table below shows the
assets and liabilities of the acquired company. No goodwill has been recognised
in connection with the acquisition. The previously owned proportion of equity has
been revalued at a fair value of SEK 10 million and recognised as other operating
income in the income statement.

Acquired net assets

Property, plant and equipment
Deferred tax, net
Working capital
Net financial debt

Identifiable assets, net

SEKm

373
50
-61
-172

190

Note 27. Critical accounting estimates
and 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 December 2022 was
SEK 52 151 million (47 080), divided between SEK 29 867 million (29 204) for
biological assets and SEK 22 284 million (17 876) for forest land. A deferred
tax liability of SEK 10 707 million (9 664) 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 goodwill and non-current assets
Goodwill is tested for impairment annually, and non-current assets are tested
when there is an indication that an impairment loss needs to be recognised. 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 1 471 million
(2 070) and SEK 1 753 million (2 568) 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 assumptions are usually updated annually, which affects the Group’s
comprehensive income and the recognised pension provision. See Note 18.

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.

Taxes
The Swedish Tax Agency has rejected Holmen AB’s group relief claim relating to
tax losses in Spanish subsidiaries that were liquidated. Holmen intends to appeal
the decision. The deductions correspond to SEK 386 million in tax, but no tax
receivable has been recognised.

Holmen Annual Report 2022

NotesProPosed aPProPriation
of Profits

Appropriation of profits

The following earnings of the parent company are at the disposal of the AGM:
Net profit for the 2023 financial year
Retained earnings

The Board proposes that the following be allocated to the shareholders
an ordinary dividend of SEK 8.00 per share (162 001 678 shares),
an extra dividend of SEK 8.00 per share (162 001 678 shares)

and that the remaining amount be carried forward

SEK

4 018 886 579
7 513 978 580

11 532 865 159

1 296 013 424
1 296 013 424

2 592 026 848

8 940 838 311

The Board of Holmen AB has proposed that the 2023 AGM resolve in favour
of paying an ordinary dividend of SEK 8.00 per share, and an extra dividend of
SEK 8.00 per share, for a total of SEK 2 592 million. In 2022, an ordinary dividend
of SEK 7.50 per share and an extra dividend of SEK 4.00 per share were paid. 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 44.1 per cent of net profit for 2022 for the
Group and means that 4.6 per cent of equity in the Group at 31 December 2022 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 2022 it
amounted to 4 per cent. The proposed dividend would increase net debt to equity
by 5 percentage points.

Holmen AB’s equity at 31 December 2022 amounted to SEK 17 448 million,
of which non-restricted equity was SEK 11 533 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 4 064 million on equity. The Group’s equity at
31 December 2022 amounted to SEK 56 950 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
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
consolidated 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 accounts and the 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.

Proposed appropriation of profits

Holmen Annual Report 2022

Signatures

The annual accounts and the consolidated accounts were approved for publication by the Board in its decision of 20 February 2023. 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 28 March 2023.

Stockholm, 20 February 2023

Fredrik Lundberg
Chairman

Carl Bennet
Board member

Lars Josefsson
Board member

Alice Kempe
Board member

Louise Lindh
Board member

Ulf Lundahl
Board member

Fredrik Persson
Board member

Henriette Zeuchner
Board member

Henrik Sjölund
Board member
and Chief Executive Officer

Steewe Björklundh
Board member, employee representative

Christer Johansson
Board member,
employee representative

Tommy Åsenbrygg
Board member,
employee representative

Our audit report was submitted on 22 February 2023.
PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised Public Accountant
Principal Auditor

Linda Corneliusson
Authorised Public Accountant

Holmen Annual Report 2022

Signatures

Auditor’s report

To the general meeting of 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 2022, except for the corporate governance statement and the statutory sus-
tainability report on pages 48-52 and 6-9, 44-47, 50-52, 54-55, 104-107 and 110,
respectively. The annual accounts and consolidated accounts of the company are
i ncluded on pages 2, 6-9, 14-15, 44-94, 98-99, 104-107 and 110 of this document.

In our opinion, the annual accounts have been prepared in accordance with the An-
nual Accounts Act, and present fairly, in all material respects, the financial position
of the parent company as of 31 December 2022 and its financial performance and
cash flow for the year then ended in accordance 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 2022 and its 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 the cor-
porate governance statement and the sustainability report on pages 48-52 and 6-9,
44-47, 50-52, 54-55, 104-107 and 110, respectively. The statutory administration
report is consistent with the other parts of the annual accounts and consolidated
accounts.

We therefore recommend that the general meeting of shareholders adopts the in-
come statement and balance sheet for the parent company and the Group.

Our opinions in this report on the annual accounts and consolidated accounts are
consistent with the content of the additional report that has been submitted to the
Board of the parent company and the Group in accordance with the Audit Regula-
tion (537/2014) Article 11.

Basis of opinion
We have conducted our audit in accordance with the International Standards on Au-
diting (ISA) and generally accepted auditing standards in Sweden. Our responsibili-
ties under these standards are further described in the Auditor’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 accordance with these requirements. This includes,
based on the best of our knowledge and belief, that no prohibited services referred
to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited
company or, where applicable, its parent company or its controlled companies with-
in the EU.

We believe that the audit evidence we have obtained is sufficient and adequate as a
basis for our opinion.

Our audit approach
Audit scope

We have designed our audit by determining the materiality level and assessing the
risk of material misstatement in the financial statements. We have considered where
the Managing Director and the Board of Directors have made significant accounting
estimates about future events or outcomes that are inherently uncertain. In the au-
dit, we have also addressed the risk that the Board of Directors and the Managing Di-
rector may have overridden internal controls, including considering whether there is
evidence of systematic deviations that could indicate irregularities.

We have designed our audit to enable us to provide an opinion on the financial
statements as a whole, taking into account how the Group is organised, the pro-
cesses for financial reporting and the industry in which the operations are active.

Materiality

The scope of our audit has been influenced by our application of materiality. An au-
dit is designed to obtain reasonable assurance about whether the financial state-
ments are free from material misstatement. Misstatements may arise due to fraud
or error. They are considered material if they, individually or in aggregate, could rea-
sonably be expected to influence the economic decisions of users taken on the ba-
sis of the financial statements.

Based on our professional judgement, we have determined quantitative thresholds
for materiality concerning the financial statements as a whole. With the help of
these and qualitative considerations, we have established the audit orientation and
scope and the character and point in time for our audit procedures. Quantitative
thresholds for materiality have also been used to assess the effect of potential mis-
statements, individual and aggregated, in the financial statements as a whole.

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 for the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consoli-
dated accounts as a whole, but we do not provide a separate opinion on these matters.

Description of key audit matter

Revenue recognition

Net sales amount to SEK 23 952 million and are a material item in the
income statement.

The Group has various types of revenue, which largely consist of goods
such as paper, paperboard, timber, wood products and pulpwood that
are sold to customers. Sales of goods are transaction-rich, put require-
ments on bookkeeping, monitoring and internal controls.

The services provided are limited and primarily relate to forest man-
agement services and within construction, such as installation work.

The various revenue streams have different characteristics, leading to
separate processes for revenue recognition, which have been exam-
ined individually.

Valuation of forest assets

The Group’s forest assets amount to SEK 52 151 million and constitute
a significant item in the consolidated and the parent company’s bal-
ance sheets.

The assets are divided into biological assets that are recognised in ac-
cordance with IAS 41 Agriculture, and properties that are recognised in
accordance with IAS 16 Property, Plant and Equipment.

A description of the measurement of value of forest assets and impor-
tant assumptions is presented in Note 9.

The measurement process is complex since it requires assessments
and assumptions in respect of, inter alia, market statistics, and the
breakdown of the total value of land and biological assets.

Significant areas of judgment include the scope and completeness of
market statistics, local market prices and discount rates as well as tim-
ber prices and felling costs. The measurement is classified as a Level 3
measurement in accordance with IFRS 13. In view of the material na-
ture of the item and the inherent complexity, the valuation of the
group’s forest assets is considered key audit matter in our audit.

How our audit addressed the key audit matter

Our audit procedures have included, but were not limited to, the activities listed below.

• Evaluated the Group’s processes for the recognition of the various revenue streams.

• Performed tests of a sample of controls in the processes for revenue recognition.

• Tested a selection of transactions against supporting underlying agreements and

payments, as well as performed accounts receivable confirmation.

• Tested a sample of transactions to assess whether revenue has been recognised in

the appropriate period.

• Reviewed the information presented in the annual accounts and assessed whether it

provides sufficient information according to the regulatory requirements.

Our audit procedures have included, but were not limited to, the procedures listed
below.

We have:

• Evaluated the process and the method used for valuation of forest assets as well as

the company’s process for collecting input data, performed through validation
against supporting documents and interviews with Holmen staff.

• Tested the allocation of value between biological assets and land assets.

• Evaluated the reasonableness of material assumptions that form the basis for the
Group’s valuation, including but not limited to, timber prices, harvest plan as well
as costs for forestry and harvesting activities.

• Verified, on a sample basis, the mathematical accuracy of the valuation model used.

• Our valuation specialists have evaluated assumptions and documentation used for

establishing the discount rate used.

• Evaluated outcome of the internal valuation model used compared to external

valuations.

• Examined that the disclosed information in Note 9 of the annual report meets the
requirements according to IFRS and provides a fair presentation of the company’s
valuation.

Holmen Annual Report 2022

Auditor’s ReportOther information than the annual accounts and consolidated
accounts
This document also contains information other than the annual accounts and con-
solidated accounts, which is found on pages 3-5, 10-13, 16-43, 95-97,100-103,
108-109 and 111-116 (“Other information”). The remuneration report that we
obtained prior to the date of this auditor’s report also constitutes Other information.
The Board of Directors and the Managing Director are responsible for Other
information.

Our opinion on the annual accounts and consolidated accounts does not cover other
information and we do not express any form of assurance conclusion regarding Oth-
er information.

In connection with our audit of the annual accounts and consolidated accounts,
our responsibility is to read the Other 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
obtained in the audit and assess whether Other information otherwise appears to
be materially misstated.

If we, based on the work performed concerning Other information, conclude that
the Other information contains a material misstatement, we are required to report
this. We have nothing to report in this regard.

The Board of Directors’ and Managing Director’s responsibilities
The Board of Directors and the Managing Director are responsible for the prepa-
ration 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 assessing 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 assumption applies unless the Board and the Managing Director intend to
liquidate or cease to operate the company or have no realistic alternative to doing so.

The auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the annual ac-
counts 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, indivi-
dually or aggregated, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual accounts and consolidated
accounts.

A further description of our responsibility for the audit of the annual accounts and
consolidated accounts is available on the website of the Swedish Inspectorate of
Auditors: www.revisorsinspektionen.se/revisornsansvar. This description is part of
the auditor’s report.

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 2022 as well as the proposed appropriations of the com-
pany’s profit or loss.

We recommend to the general meeting of shareholders that the profit be appropri-
ated in accordance with the proposal in the statutory administration report and that
the members of the Board of Directors and the Managing Director be discharged
from liability for the financial year.

Basis of opinion
We have conducted our audit in accordance with generally accepted auditing stand-
ards in Sweden. Our responsibilities under those standards are further described in
the Auditor’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 accordance with these
requirements.

We believe that the audit evidence we have obtained is sufficient and adequate as a
basis for our opinion.

The Board of Directors’ and Managing Director’s responsibilities
Responsibility for the proposed appropriation of the company’s profit or loss rests
with the Board of Directors. In conjunction with the proposal of a dividend, this in-
cludes 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’ equity, consolidation require-
ments, liquidity and position in general.

Holmen Annual Report 2022

The Board of Directors is responsible for the organisation and administration of the
company’s affairs. This includes continuous assessment of the company’s and the
Group’s financial situation and ensuring that the company’s organisation is de-
signed so that the accounting, management of assets and the company’s financial
affairs otherwise are controlled in a reassuring manner. The Managing Director is re-
sponsible for day-to-day management in accordance with the guidelines and in-
structions issued by the Board and is required to take such actions as may be nec-
essary to ensure compliance with the company’s statutory accounting obligations
and satisfactory management of funds.

The auditor’s responsibility
Our objective for the management audit, and thus for our opinion on release from
liability, is to obtain audit evidence which enables us to assess with reasonable
assurance whether any member of the Board or the Managing Director has in any
material respect:

taken any action or been guilty of any neglect that could give rise to a liability to
indemnify the company

otherwise acted in contravention of the Companies Act, the Annual Accounts Act or
the Articles of Association.

Our objective in respect of our audit of the proposed appropriation of the company’s
profit or loss, and thus for our opinion on the same, is to obtain reasonable assur-
ance that the proposed appropriation is consistent 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.

A further description of our responsibility for the audit of the administration is availa-
ble on the website of the Swedish Inspectorate of Auditors: www.revisorsinspek-
tionen.se/revisornsansvar. This description forms part of the statutory annual report.

The auditor’s opinion on the ESEF report

Opinion
In addition to our audit of the annual accounts and consolidated accounts, we have
also examined whether the Board of Directors and the Managing Director have
prepared the annual accounts and the consolidated accounts in a format that facili-
tates uniform electronic reporting (the ESEF report) according to Chapter 16, Sec-
tion 4 a of the Securities Market Act (2007:528) for Holmen AB for the year 2022.

Our examination and our opinion refer only to the statutory requirement.

In our opinion, the ESEF report has been prepared in a format that in all significant
respects facilitates uniform electronic reporting.

Basis for Opinion
We have conducted our examination in accordance with FAR’s recommendation,
RevR 18 Examination of the Esef report. Our responsibilities under this recommen-
dation are further described in the Auditor’s Responsibilities section. We are inde-
pendent of Holmen AB 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 evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for ensuring that
the Esef report has been prepared in accordance with Chapter 16, Section 4 a of the
Securities Market Act (2007:528) and for ensuring that there is such internal con-
trol as the Board of Directors and the Managing Director regard as necessary to pre-
pare the Esef report in a manner that is free from material misstatement, whether
due to fraud or error.

The auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef report is in all
material respects prepared in a format that meets the requirements of Chapter 16,
Section 4 a of the Swedish Securities Market Act (2007:528), based on the proce-
dures performed.

RevR 18 requires us to plan and execute procedures to achieve reasonable assur-
ance that the Esef report is prepared in a format that meets these requirements.

Reasonable assurance is a high level of assurance, but it is not a guarantee that
an engagement carried out according to RevR 18 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, individu-
ally or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the Esef report.

The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits and
Reviews of Financial Statements, and other Assurance and Related Services
Engagements and accordingly maintains a comprehensive system of quality con-
trol, including documented policies and procedures regarding compliance with
professional ethical requirements, professional standards and legal and regulatory
requirements.

Auditor’s ReportThe examination involves obtaining evidence, through various procedures, that the
Esef report has been prepared in a format that enables uniform electronic reporting
of the annual accounts and consolidated accounts. The procedures selected de-
pend on the auditor’s judgment, including the assessment of the risks of material
misstatement in the report, whether due to fraud or error. In carrying out this risk
assessment, and in order to design procedures that are appropriate in the circum-
stances, the auditor considers those elements of internal control that are relevant
to the preparation of the Esef report by the Board of Directors (and the Managing
Director), but not for the purpose of expressing an opinion on the effectiveness of
those internal controls. The examination also includes an evaluation of the appro-
priateness and reasonableness of assumptions made by the Board of Directors and
the Managing Director.

The procedures mainly include a validation that the Esef report has been prepared
in a valid XHTML format and a reconciliation of the Esef report with the audited
annual accounts and consolidated accounts.

Furthermore, the procedures also include an assessment of whether the con-
solidated statement of financial performance, financial position, changes in equity,
cash flow and disclosures in the Esef report has been marked with iXBRL in accord-
ance with what follows from the Esef regulation.

Auditor’s opinion regarding the corporate governance
statement
The Board of Directors is responsible for ensuring that the corporate governance
statement on pages 48-52 has been prepared in accordance with the Annual
Accounts Act.

Focus and scope of the examination
Our examination has been conducted in accordance with FAR’s auditing standard
RevR 16 The Auditor’s Examination of the Corporate Governance Statement. This

means that our examination of the corporate governance statement is different and
substantially less in scope than an audit conducted in accordance with Internation-
al Standards on Auditing and generally accepted auditing standards in Sweden. We
believe that this examination has provided us with sufficient basis for our opinions.

Opinion
A corporate governance statement has been prepared. Disclosures in accordance
with Chapter 6, Section 6, second paragraph, points 2–6 of the Annual Accounts Act
and Chapter 7, Section 31, second paragraph of the same law are consistent with
the other parts of the annual accounts and the consolidated accounts and are in
accordance with the Annual Accounts Act.

Auditor’s opinion regarding the statutory sustainability
report

Assignment and division of responsibilities
The Board of Directors is responsible for ensuring that the sustainability report on
pages 6-9, 44-47, 50-52, 54-55, 104-107 and 110 has been prepared in accord-
ance with the Annual Accounts Act.

Focus and scope of the examination
Our examination has been conducted in accordance with FAR’s auditing standard
RevR 12 The auditor’s opinion regarding the statutory sustainability report. This
means that our examination of the sustainability report is different and substantial-
ly more limited in scope compared with the focus and scope of 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.

Opinion
A statutory sustainability report has been prepared.

PricewaterhouseCoopers AB, Torsgatan 21, SE-113 97 Stockholm,
was appointed auditor of Holmen AB by the general meeting of the shareholders
on 30 March 2022 and has been the company’s auditor since 22 April 2021.

Stockholm, 22 February 2023

PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised Public Accountant
Auditor in Charge

Linda Corneliusson
Authorised Public Accountant

review of sustainAbility
report

Holmen’s Sustainability Report, as defined on page 2 of Holmen’s Annual
Report 2022, 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, 22 February 2023

PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised Public Accountant
Auditor in Charge

Isabelle Hammarström
Specialistmedlem i FAR

Auditor’s Report & Review of Sustainability Report

Holmen Annual Report 2022

Board of directors

1. Fredrik Lundberg

6. Louise Lindh

Employee representatives

Chairman. Djursholm. Born in 1951.
Member since 1988. M.Sc. in
Engineering 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. Board member of
the Confederation of Swedish Enterprise.
Shareholding: 54 602 shares.

3. 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.

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.

7. Fredrik Persson

Stockholm. Born in 1968.
Member since 2022.
M.Sc. in Economics.
Other significant appointments:
Former President and CEO of Axel
Johnson AB. Chairman of Business
Europe, Ellevio AB and JM AB and board
member of AB Electrolux, Ahlström
Capital Oy, Hufvudstaden, ICA Gruppen
AB and Interogo Holding AB.
Shareholding: 3 000 shares.

8. Carl Bennet

Gothenburg. Born in 1951.
Member since 2009. M.Sc. in
Economics. Med. dr. h.c. and Tekn. dr.
h.c. 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 Lundbergföretagen AB.
Shareholding: 200 000 shares.

10. Ari Aula

Norrköping. Born in 1967.
Deputy member since 2022.
Employee representative, LO.
Chairman of the Swedish Paper
Workers Union’s branch 53 at
Braviken.

11. Steewe Björklundh

Hudiksvall. Born in 1958.
Member since 1998. Employee
representative, LO. Chairman of
the GS union, Iggesund Sawmill.

12. Daniel Hägglund

Örnsköldsvik. Born in 1982.
Deputy member since 2014.
Employee representative, PTK.

13. Martin Nyman

Ölsund. Born in 1978.
Deputy member since 2021.
Employee representative, PTK.
Chairman of Unionen Club,
Holmen Iggesund.
Shareholding: 760 shares.

14. Christer Johansson
Iggesund. Born in 1959.
Elected as deputy member 2017,
ordinary member since 2022.
Employee representative, LO.
Chairman of the Swedish Paper
Workers Union branch 15.

4. Henriette Zeuchner

9. Lars Josefsson

15. Tommy Åsenbrygg

Norrköping. Born in 1953.
Member since 2016. M.Sc. in
Engineering.
Other significant appointments:
Chairman of TimeZynk. Board member
of Ouman and Nevel.
Shareholding: 7 000 shares.

Skebobruk. Born in 1968.
Member since 2015. Employee
representative, PTK.
Shareholding: 200 shares.

Stockholm. Born in 1972.
Member since 2015.
M.Sc. in Economics and Bachelor of Laws.
Other significant appointments:
Board member of the NTM Group.
Shareholding: 1 600 shares.

5. 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, and Nordstjernan Kredit AB. Board
member of Indutrade AB.
Shareholding: 8 000 shares.

Auditors: PricewaterhouseCoopers AB
Principle auditor:
Magnus Svensson Henryson
Authorised public accountant.

Holmen Annual Report 2022

Board of Directors

The information relates to personal and related party shareholdings at 31 December 2022.

1. Fredrik Lundberg
2. Henrik Sjölund
3. Alice Kempe
4. Henriette Zeuchner
5. Ulf Lundahl
6. Louise Lindh
7. Fredrik Persson
8. Carl Bennet
9. Lars Josefsson
10. Ari Aula
11. Steewe Björklundh
12. Daniel Hägglund
13. Martin Nyman
14. Christer Johansson
15. Tommy Åsenbrygg

Board of Directors

Holmen Annual Report 2022

Group manaGement

1. Henrik Sjölund
President and CEO
Born in 1966.
Joined Holmen in 1993.
Shareholding: 54 602
shares. Henrik Sjölund
has no significant
shareholdings or
ownership in companies
with which the Group has
important business
relations. Further
information is provided
on page 98.

8. Gunilla Rolander

Senior Vice President
Human Resources
Born in 1966.
Joined Holmen in 2013.
Shareholding: 3 436 shares.

2. Anders Jernhall

Executive Vice President,
Chief Financial Officer
Born in 1970.
Joined Holmen in 1997.
Shareholding: 20 160 shares.

5. Johan Nellbeck

Senior Vice President
Paperboard
Born in 1964.
Joined Holmen in 2019.
Shareholding: 6 000 shares.

9. Ola Schultz-Eklund
Senior Vice President
Technology
Born in 1961.
Joined Holmen in 1994.
Shareholding: 4 000 shares.

3. Sören Petersson
Senior Vice President Forest

Born in 1969.
Joined Holmen in 1994.
Shareholding: 19 378 shares.

6. Lars Lundin
Senior Vice President Paper

Born in 1966.
Joined Holmen in 2018.
Shareholding: 3 000 shares.

10. Stina Sandell

Senior Vice President
Sustainability and
Communications
Born in 1966.
Joined Holmen in 2017.
Shareholding: 2 156 shares.

4. Johan Padel

Senior Vice President
Wood Products
Born in 1966.
Joined Holmen in 2014.
Shareholding: 2 570 shares.

7. Fredrik Nordqvist
Senior Vice President
Renewable Energy
Born in 1971.
Joined Holmen in 2011.
Shareholding: 721 shares.

11. Henrik Andersson
Senior Vice President
Legal Affairs
Secretary of the Board
of Directors.
Born in 1971.
Joined Holmen in 2008.
Shareholding: 5 296 shares.

100

Holmen Annual Report 2022

Group management

The information relates to personal and related party shareholdings at 31 December 2022.

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
comparability 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
performance 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

2022

2021

2020

2019

2018

Operating profit, EBITDA and items affecting comparability
EBITDA
Depreciation and amortisation according to plan

Operating profit/loss excluding items affecting comparability

Items affecting comparability*

Operating profit

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 after tax
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 obligations
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 102 for what items affecting comparability refers to.

8 607
-1 345

7 262

266

7 527

7 262
23 952

30.3

56 950
2 145

59 095

7 262
54 570

13.3

5 874
51 299

11.5

2 902
158
1 039
89
7
-97
-18
-1 935

2 145

2 145
56 950

56 950
81 436

5 321
-1 261

4 061

-330

3 731

4 061
19 479

20.8

46 992
4 101

51 093

4 061
47 557

8.5

3 004
43 326

6.9

3 911
173
736
71
24
-268
-39
-507

3 651
-1 172

2 479

3 486
-1 141

2 345

8 770

2 479

11 115

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

2 345
16 959

13.8

40 111
3 784

43 895

2 345
26 391

8.9

8 731
25 233

34.6

2 018
171
2 485
13
46
-451
-14
-483

3 488
-1 012

2 476

-94

2 382

2 476
16 055

15.4

23 453
2 807

26 261

2 476
25 469

9.7

2 268
22 546

10.1

1 033
-
2 494
-
61
-468
-35
-278

4 101

4 181

3 784

2 807

4 101
46 992

46 992
68 101

4 181
42 516

42 516
62 543

3 784
40 111

40 111
59 340

2 807
23 453

23 453
36 912

Key figures

Holmen Annual Report 2022

101

2022

Ten-year review,
finance

SEKm

2022 2021 2020 2019 2018 2017 2016 2015 2014 2013

Income statement
Net sales
Operating costs
Change in value of biological assets
Share in profits of associates and joint ventures

EBITDA

Depreciation and amortisation according to plan

Operating profit/loss excluding items
affecting comparability

19 479

16 327

16 231
23 952
-15 865 -14 622 -13 250 -13 961 -12 984 -13 379 -12 626 -13 348 -13 270 -13 919
264
3

464
0

415
-12

282
-7

425
-9

267
7

315
-22

579
-6

487
0

509
10

16 133

16 959

15 513

15 994

16 014

16 055

8 607

-1 345

7 262

5 321

-1 261

4 061

3 651

3 486

3 488

3 157

3 179

2 940

2 999

2 579

-1 172

-1 141

-1 012

-991

-1 018

-1 240

-1 265

-1 370

2 479

2 345

2 476

2 166

2 162

1 700

1 734

1 209

Items affecting comparability*

266

-330

8 770

-94

-232

-931

-450

-140

7 527

3 731

2 479 11 115

2 382

2 166

1 930

769

1 284

1 069

Operating profit

Net financial items

Earnings before tax

Tax

-87

-39

-42

-34

-25

-53

-71

7 441

3 691

2 437 11 081

2 356

2 113

1 859

-1 567

-688

-458

-2 351

-89

-445

-436

Profit/loss for the year

5 874

3 004

1 979

8 731

2 268

1 668

1 424

Diluted earnings per share, SEK**

36.3

18.5

12.2

52.6

13.5

9.9

8.5

Net sales
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group-wide costs and eliminations

7 342
6 735
8 370
5 015
1 226
-4 737

6 509
6 261
5 441
4 872
488
-4 092

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

Group

23 952 19 479 16 327 16 959 16 055 16 133 15 513 16 014 15 994 16 231

Operating profit
Forest
Paperboard
Paper
Wood Products
Renewable Energy
Group-wide costs and eliminations

Items affecting comparability*

Group

Cash flow
Earnings before tax
Adjustment items
Income tax paid
Changes in working capital

1 401
1 081
2 714
1 237
1 006
-178

7 262

266

1 495
673
70
1 668
347
-193

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

4 061

2 479

2 345

2 476

2 166

2 162

1 700

1 734

1 209

-330

8 770

-94

-232

-931

-450

-140

7 527

3 731

2 479 11 115

2 382

2 166

1 930

769

1 284

1 069

7 441
966
-1 639
-1 284

3 691
346
-662
-145

2 437
544
-569
46

11 081
-8 208
-147
158

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

Cash flow from operating activities

5 484

3 229

2 457

2 884

2 286

2 509

1 961

2 526

2 176

2 011

Cash flow from investing activities***

-1 352

-1 332

-1 924 -1 050 -1 005

-644

-123

-824

-815

-872

Cash flow after investments

4 132

1 897

533

1 834

1 281

1 865

1 838

1 702

1 361

1 139

Dividend paid
Share buy-backs

-1 862
-

-1 741
-

-567
-

-1 134
-1 430

-1 092
-

-1 008
-

-882
-

-840
-

-756
-

*Items affecting comparability:
2022: Insurance compensation, and the costs and the loss of revenue, associated with the turbine breakdown in Workington (SEK 266 million).
2021: Increased energy costs of SEK -330 million due to turbine breakdown in Workington.
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.
**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.

102

Holmen Annual Report 2022

Ten-year review, finance

-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

711

4.3

5 694
4 618
7 148
1 175
450
-2 853

SEKm

Balance sheet
Forest assets
Other non-current assets*
Current assets
Financial receivables

Total assets

2022 2021 2020 2019 2018 2017 2016 2015 2014 2013

For a ten-year review of data per share, see page 59.

52 151 47 080
12 477 12 251
7 956
14 758
814
2 050

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

81 436 68 101 62 543 59 340 36 912 34 891 34 891 35 456 36 434 36 753

Equity
Deferred tax liabilities
Financial liabilities and interest-bearing provisions
Operating liabilities

56 950 46 992
13 490 11 610
4 915
4 584

4 195
6 801

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

Total equity and liabilities

81 436 68 101 62 543 59 340 36 912 34 891 34 891 35 456 36 434 36 753

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
Own forests, ’000 m3sub
Paperboard, ’000 tonnes
Paper, ’000 tonnes
Wood products, ’000 m3
Hydro and wind power, GWh

*Excluding non-current financial receivables
**Excluding items affecting comparability

41 354 37 300
5 169
1 637
2 278
4 069
640

5 632
1 939
2 067
4 618
3 485

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
5 686
4 438
1 327
3 005
-173

59 095 51 093 46 697 43 895 26 261 24 972 25 190 25 653 26 876 26 970

16
32
25
30

4
20
139
54
23
13

11
4

11
1
34
21

4
13
4
82
10
9

7
9

13
2
8
15

4
15
4
17
7
6

5
10

7
9
4
14

8
8
24
6
11
9

35
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

7
19

15
-1
1
11

7
15
neg
1
6
6

3
23

13
2
3
11

6
12
3
3
7
6

4
28

9
-4
-6
7

7
8
neg
neg
13
4

3
29

2 813
503
995
1 435
1 639

2 833
544
1 029
1 373
1 230

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

Ten-year review, finance

Holmen Annual Report 2022

103

2022

Taxonomy

The Taxonomy Regulation is a classification system that currently
covers certain economic activities that have a significant impact on
the climate and the climate change adaptation measures taken.
In accordance with this regulation, companies must report

the proportion of their turnover, capital expenditure and
operating expenditure covered by the Taxonomy Regulation,
and the proportion that meets the requirements allowing them
to be considered sustainable. Each activity is examined to see
whether it meets the regulation’s criteria for compliance with
environmental objectives without causing significant harm to
any other environmental objectives and it has minimum social
safeguards in place.
Detailed information about Holmen’s activities that are covered
by the taxonomy can be found in the tables below. These show
that 11 per cent of Holmen’s turnover, 47 per cent of its capital
expenditure and 20 per cent of its operating expenditure are
covered by the taxonomy, and that all the activities meet the
criteria for being considered sustainable.
The key figures have been calculated in accordance with
definitions 1.1.1, 1.1.2 and 1.1.3 in Annex 1 to the Disclosures
Delegated Act in line with Article 8 of the Taxonomy Regulation.
In short, this means that the turnover, capital expenditure and
operating expenditure that are covered by the taxonomy (the
numerators) must be divided by the Group’s total turnover, capital
expenditure and operating expenditure (the denominators) in
accordance with the definitions in the Delegated Act. The following
sections describe the calculation principles applied by Holmen.

Allocation of turnover, capital expenditure and
operating expenditure to the denominators
The Group’s total turnover in accordance with the taxonomy’s
definition corresponds to the Group’s sales as presented in the
income statement on page 60, and some of the Group’s other
operating income. Note 3 on page 72 shows the Group’s other
operating income, and the items included in the denominators
are sales of by-products, renewable energy certificates,
emission allowances and silviculture contracts, and some rent
and land lease revenue and other items, which together total
SEK 1 950 million. Internal sales eliminated from the consolidated
figures, which are generated by intra-Group activities and are
covered by the taxonomy, are not factored in.
Capital expenditure corresponds to investments and
acquisitions for the year in line with Note 9 Forest assets, Note 10
Intangible assets, Note 11 Property, plant and equipment, and
Note 12 Leases on pages 78–81.
The total operating expenditure in accordance with the
taxonomy’s definition that is applicable to Holmen consists of
repairs and maintenance and research and development. Based
on this definition it totalled SEK 1 386 million for 2022.

Allocation of turnover, capital expenditure and
operating expenditure to the numerators
Holmen’s activities that are covered by the taxonomy are harvest
of own forest (NACE code 02.20) and electricity production from
wind power, hydro power and bioenergy (NACE code 35.11).

Turnover for 2022

Economic activities (1)

Unit

A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

1.3 Harvest of own forest

4.3 Wind power

4.5 Hydro power

4.8 Bioenergy

Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1)

A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)

Not applicable

Turnover of taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities) (A.2)

Total (A.1 + A.2)

B. Taxonomy-non-eligible activities

Turnover of taxonomy-non-eligible activities (B)

Total (A + B)

104

Holmen Annual Report 2022

Taxonomy

)
2
(
s
e
d
o
C

02.20

35.11

)
3
(

r
e
v
o
n
r
u
t
e
t
u

l
o
s
b
A

SEKm

758

208

1 009

853

2 829

)
4
(
r
e
v
o
n
r
u
t

f
o
n
o
i
t
r
o
p
o
r
P

2 829

23 074

25 903

100

These activities correspond to taxonomy activities 1.3 (harvesting
of own forests), 4.3, 4.5 and 4.8 (electricity production from
wind power, hydro power and bioenergy). Holmen does not have
any external sales derived from other NACE codes (economic
activities) covered by the Taxonomy Regulation or activities
covered by climate adaptation measures. Capital expenditure
relating to suppliers whose activities are covered by the
taxonomy, but that does not relate to Holmen activities 1.3, 4.3,
4.5 or 4.8, known as category C investments, is negligible and is
not included.
Turnover from the harvesting of our own forests above all
consists of external sales of logs and pulpwood, but not the logs
and pulpwood processed by Holmen in its industrial plants.
Capital expenditure includes purchases of forest machinery,
the construction of forest roads and acquisitions of forest
properties. Operating expenditure includes the development
and maintenance of our own forests in the form of thinning, road
maintenance, clearing and fertilisation.
Turnover derived from electricity production consists primarily of
external sales of electricity, support services for the stabilisation of
the electricity grid and green electricity certificate revenue. Capital
expenditure includes upgrades, new facilities and acquisitions.
Operating expenditure consists of minor renovations and the
maintenance of equipment for electricity production, and various
forms of development work, such as the designing of new wind farms.
The different activities that are subject to the taxonomy are able
to be separately identified in Holmen’s financial reporting, which

prevents any double counting of turnover, capital expenditure and
operating expenditure.

Evaluation of compliance with the criteria
Holmen has evaluated its compliance with the criteria for
substantial contributions and the criteria for doing no significant
harm as set out in Annex 1 to the Delegated Act on climate change
mitigation. The Group’s forestry plan, together with the climate
benefit analysis prepared that shows increased carbon storage
and that the legislation ensures continued land use for forestry,
are considered together to meet the requirements for substantial
contributions to forest management. Forest management takes
place in accordance with the Group’s certifications and, along with
the legal requirements and the climate adaptation plan prepared,
this ensures that the forest management does no significant harm.
With regard to the evaluation of whether the Group produces
wind and hydro power and bioenergy in line with the criteria
set, an analysis of each power plant’s individual design and
characteristics has been conducted and climate adaptation plans
prepared for each activity.
Compliance with minimum social safeguards has been
evaluated in keeping with the guidance from the Platform on
Sustainable Finance. Holmen complies with labour and human
rights laws.

Substantial contribution criteria

Does Not Significantly
Harm (DNSH) criteria

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Enabling

Transitional

Taxonomy

Holmen Annual Report 2022

105

Capital expenditure for 2022

Economic activities (1)

Unit

A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

1.3 Harvest of own forest

4.3 Wind power

4.5 Hydro power

4.8 Bioenergy

Capital expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1)

A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)

Not applicable

Capital expenditure of taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities) (A.2)

Total (A.1 + A.2)

B. Taxonomy-non-eligible activities

Capital expenditure of taxonomy-non-eligible activities (B)

Total (A + B)

)
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SEKm

267

596

913

1 011

1 923

100

Of the SEK 267 million of taxonomy-aligned capital expenditure relating to the harvesting of our own forests, SEK 198 million were invested in forest assets,
SEK 51 million in property, plant and equipment and SEK 18 million in leases. Of the SEK 596 million of taxonomy-aligned capital expenditure relating
to wind power, SEK 592 million were invested in property, plant and equipment and SEK 4 million in intangible assets. Of the SEK 20 million of taxono-
my-aligned capital expenditure relating to hydro power, SEK 14 million were invested in property, plant and equipment and SEK 6 million in intangible
assets. Of the SEK 30 million of taxonomy-aligned capital expenditure relating to bioenergy, SEK 30 million were invested in property, plant and equipment.

Operating expenditure for 2022

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280

1 105

1 386

100

Economic activities (1)

Unit

A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

1.3 Harvest of own forest

4.3 Wind power

4.5 Hydro power

4.8 Bioenergy

Operating expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1)

A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)

Not applicable

Operating expenditure of taxonomy-eligible but not environmentally
sustainable activities (not taxonomy-aligned activities) (A.2)

Total (A.1 + A.2)

B. Taxonomy-non-eligible activities

Operating expenditure of taxonomy-non-eligible activities (B)

Total (A + B)

Most of the SEK 280 million of taxonomy-aligned operating expenditure relates to maintenance and repairs.

106

Holmen Annual Report 2022

Taxonomy

Substantial contribution criteria

Does Not Significantly
Harm (DNSH) criteria

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Enabling

Transitional

Taxonomy

Holmen Annual Report 2022

107

2022

5-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. No material changes have been made to the
principles of reporting in 2022. 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 Statistics
Sweden guidelines. 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.

2022 2021 2020 2019 2018

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, GWh1)

Raw materials
Wood, million m3sub2)
Purchased pulp, ’000 tonnes
Thermal energy, GWh4)
Electrical energy, GWh
Water use, million m3,6)
Plastic granules/foiling material, ’000 tonnes
Chemicals, ’000 tonnes7)
Filler, pigment, ’000 tonnes7)

Emissions to air, tonnes8)
Sulphur dioxide (counted as sulphur, S)
Nitrogen oxides
Particulates
Fossil carbon dioxide, ’000 tonnes
Biogenic carbon dioxide, ’000 tonnes

Emissions to water, tonnes8)
AOX (chlorinated organic matter)
Nitrogen
Phosphorus
COD (organic matter), ’000 tonnes
Suspended solids (SS), ’000 tonnes

By-products, ’000 tonnes
To energy production, internally/externally9)
To material production10)

Waste, ’000 tonnes
Hazardous11)
Sent to landfill (wet)

Energy supplies
Branches, treetops and peat, GWh12)
Electrical and thermal energy, GWh13)

Environmental protection expenditure,
SEKm
Investments (remedial and preventive)14)
Electricity and heat-saving investments
Environmental taxes and charges15)
Internal and external environmental expenses16)
Environmental cost of forestry17)

513
77
1 016
1 468
1 561
520

529
80
998
1 465
1 230
445

6.363)
6.34
77
77
5 291
4 648
3 9305) 3 872
70
3.3
147
162

71
3.0
147
162

49
899
49
42
1 657

50
811
52
81
1 423

36
162
12
19
3.6

39
187
16
19
3.2

759
469

1 067
412

1.8
6.3

325
377

215
44
18
239
83

2.0
3.7

291
317

815
35
15
159
79

551
84
891
1 021
1 352
621

5.62
78
5 885
3 508

69
2.8
147
156

64
902
33
63
1 545

38
210
19
20
3.5

937
252

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

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

1.6
7.6

137
370

84
10
12
165
91

108

Holmen Annual Report 2022

Five-year review, sustainability

1) Bio-based electricity production accounted for
514 GWh. Production was negatively impacted
in 2022 as a result of a turbine breakdown at the
Workington Mill and the turbine at Iggesund Mill
bei ng taken out of operation for part of the year.
2) At Group level, wood consumption is computed net,
taking into account internal deliveries of chips from
the sawmills to the nearby mills.
Harvest of Holmen’s own forests amounted to
2 813 000 m3sub.

4) The calculation model has been modified for 2022,
which means that the data is not fully comparable
with the data for 2018–2021.

5) 2 494 GWh renewable electricity and 1 436 GWh

fossil-free electricity. Direct emissions of fossil carbon
dioxide from production of purchased electrical
energy totalled 0 ktonnes.

6) Almost 100 per cent use of surface water from lakes
and watercourses, i.e. renewable raw material.
7) Non-renewable raw material stated as 100 per cent
active substance, equivalent to 219 000 tonnes of
commodities for chemicals and 222 000 tonnes of
commodities for filler and pigment.
Relates to emissions at facilities. Emissions of meth-
ane and nitrous oxide at the facilities amounted to
15 000 tonnes of carbon dioxide equivalents.

9) From 2022 onwards, by-products to energy production

are reported as dry weight instead of falling dry
content. This produces a somewhat lower amount.

10) By-products used, for example, as filling material,
construction material or for the production of soil
products. Holmen Wood Products has been included
from 2021. By-products from Holmen’s sawmills
are mainly used for pulp. Of by-products to material
production, 16 000 tonnes consist of tall oil, which is
mainly supplied to the fuel and chemicals industry.
11) Hazardous waste is dealt with by an authorised col-
lection and recovery contractor. Certain fractions of
the waste are recovered. 26 per cent of the hazardous
waste consists of oil sludge from ships that dock at
Holmen’s ports.

12) Branches and treetops (37 GWh) and peat (85 GWh)

delivered from Holmen’s land and 203 GWh of branch-
es and treetops from felling rights to external energy
producers.

13) 123 GWh of electrical energy supplied from Working-
ton Mill to the local community. 228 GWh of thermal
energy from Iggesund Mill and Braviken Paper Mill to
Iggesund Sawmill and Braviken Sawmill. A total of
26 GWh thermal energy from Hallsta Paper Mill and
Iggesund Mill was supplied to the local communities’
district heating networks.

14) The stated amount includes costs of internal process
measures and water treatment measures. The figure
for 2021 included the costs of constructing Blåbergs-
liden Wind Farm.

15) The stated amount includes costs for waste manage-
ment, energy tax charged on the use of fossil fuels in
Sweden, nitrogen oxide tax and inspection charges.
Two environmental incidents led to corporate fines
totalling SEK 0.1 million.

16) Includes costs of environmental personnel, operation

of treatment equipment, waste management,
management systems, environmental training, appli-
cations for permits, environmental consultants and
the costs of inquiries and measures in connection
with discontinued operations.

17) The environmental cost of forestry is calculated
as the value of the wood that is not harvested for
environmental reasons. The loss of income in 2022
is valued at SEK 83 million and is due to general
considerations and nature conservation.

5-year review, susTainabiliTy

1) See page 74, note 4.
2) Relates to permanent employees.
3) Relates to employees. No industrial accidents
with a fatal outcome occurred during the year.
4) Relates to permanent and temporary employees.
5) Relates to Swedish and UK units, all of which
have collective agreements. At other foreign
units, Holmen supports different forms of
collective employee engagement in line with
local standards, e.g. Works Councils.

6) 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 trans-
parent in its tax-related deliberations, with a
focus on commercial considerations and no
transactions whose main purpose is tax plan-
ning. Holmen must also not accept, support or
facilitate any tax violations by third parties.

7) Board’s dividend proposal.

Employees
Employees
Average no. of employees (FTE)1)
of whom women, %
of whom men, %
of whom temporary employees, %
Average age2)

Sickness absence, %
Total
of which longer than 60 days

Gender equality, %2)
Proportion of female managers out of total
no. of managers
Proportion of male managers out of total
no. of managers
Women joining the company out of total
new employees
Men joining the company out of total new
employees

Personnel turnover, %2)
Personnel turnover
of which given notice
of which retiring
of which leaving at own request
New employees

2022 2021 2020 2019 2018

3 466
20.9
79.1
11.4
42.9

3 474
20.6
79.4
9.3
43.5

2 974
20.0
80.0
8.4
44.3

2 915
20.0
80.0
11.1
44.4

2 955
20.3
79.7
10.7
44.9

4.7
1.4

4.1
1.4

23.8

23.1

76.2

76.9

44.4

30.3

55.6

69.7

8.3
0.1
2.3
5.1
5.3

8.9
0.3
3.0
4.3
5.1

4.3
1.7

22.7

77.3

35.5

64.5

7.3
0.6
3.1
3.0
2.6

3.8
1.6

22.9

77.1

39.5

60.5

7.9
0.9
2.2
4.4
2.5

4.1
1.6

19.8

80.2

40.1

59.9

7.9
0.4
2.6
3.9
2.7

Number of industrial accidents3)
Industrial accidents, more than 8 hours of absence,
per million hours worked

Union cooperation, %4)
Percentage of employees that work at a unit with a
collective agreement5)

7.6

5.6

4.3

5.7

4.9

Income statement per stakeholder category,
SEKm
Customers

Suppliers

Employees
Lenders
Society 6)

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

26 696

21 169

17 666

18 329

17 339

-16 176 -14 675
-2 121
-43
-43
-37
-558
-39
-651
3 004
1 862

-2 322
-93
-41
-35
-576
-47
-1 532
5 874
2 5927)

-12 734
-1 891
-42
-42
-31
-481
-39
-427
1 979
1 741

-4 817
-1 819
-34
-55
-27
-472
-25
-2 351
8 731
567

-12 539
-1 792
-25
-82
-30
-479
-35
-89
2 268
1 134

Five-year review, sustainability

Holmen Annual Report 2022

109

Environmental information

Permits

At the end of 2022, Holmen was running
production operations that require
environmental permits at nine facilities.
Additionally, the converting plant in
Strömsbruk is a notifiable activity. The
permits specify conditions regarding
permitted production volumes, noise
levels and permitted emissions to
air and water. Eight of the facilities
are located in Sweden and one is in
Workington in the UK. The facilities’
turnover amounted to 84 per cent of the
Group’s net sales in 2022.
The paperboard mill in Workington
gained a new environmental permit
in 2022 with new conditions for its
operations. In 2022, Sweden’s Land and
Environment Court passed a decision on
a new environmental permit for Braviken
Paper Mill. The County Administrative
Board appealed against the decision
to the Land and Environment Court of
Appeal. That court will decide whether
leave to appeal will be granted. If leave
to appeal is not granted, the ruling of the
Land and Environment Court will gain
legal force. It is expected that the matter
will be resolved in 2023.
Holmen has three permits for
wind power and 15 permits for
commercial quarries. Additionally, the
six wholly-owned hydro power plants
have environmental permits for the
production plant, reservoirs and water
regulation. In 2022, Blåbergsliden

Wind Farm was opened in Västerbotten
with an anticipated annual electricity
production of just over 400 GWh. A
permit application process is in progress
for another wind farm in Västerbotten.
Holmen has applied for permits to
build two wind farms on its own land
in Östergötland. In one case, Holmen
chose to withdraw the application in
2022 while awaiting an update to the
municipal wind power plan. In the other
case, current political circumstances
make continued work more difficult.
Two new consultations on wind farms
began during the year; Tigerberget in the
municipality of Hudiksvall and Högaliden
in the municipality of Robertsfors.
New environmental legislation for
hydro power entered into force in
2019. The legislation means that hydro
power operators who do not comply
with modern environmental criteria
have to apply for a review under the
Swedish Environmental Code before
the end of 2039. Holmen’s plants have
been registered under the national
plan for revision of hydro power plant
licences. Jointly owned facilities have
been registered by the respective main
owner. In late 2022, the Government
announced that the plan will be
paused for a year to investigate the
consequences of implementing a review
of the power system.

Emission allowances and electricity
certificates

Holmen has been awarded emission
allowances within the EU Emissions
Trading Scheme. As a result of
investment in bio-based energy
production and energy savings at
the facilities, the use of fossil fuels
has fallen considerably in recent
years. Surplus allocated emission
allowances have been able to be
sold. Holmen has applied to be
allocated emission allowances for
the period 2021–2030 and has
received an allocation decision for
the trading period 2021–2025. 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 distributors, 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 electrical energy
receive green Renewables Obligation
Certificates in proportion to the
amount of electricity generated.
Workington Mill obtained such green
certificates in 2022.

110

Holmen Annual Report 2022

Environmental information

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 2022, studies were in
progress at different stages regarding
the former sawmills Håstaholmen,
Stocka and Lännaholm, the sulphite
mills at Strömsbruk, Domsjö, Loddby
and Mariannelund, the paper mill at
Silverdalen and the groundwood mill
at Bureå.
The project to remediate the polluted
sediment in the area of water outside
the former sawmill at Håstaholmen in
Hudiksvall was concluded in autumn
2022. The final report on completed
remediation is awaiting approval from
the responsible environmental agency.
During the year, it became clear that
the Geological Survey of Sweden (SGU)
will be the client for remediation projects
at the former Stocka sawmill and the
former sulphite plant in Strömsbruk. In
early 2023, an application for funding for
preparatory surveys at these abandoned
factory sites will be submitted to the
Swedish Environmental Protection Agency.
In 2022, the County Administrative
Board approved the study of measures
and risk evaluation submitted by Holmen
regarding polluted land at the Domsjö
industrial area. This means that there
is now a remediation option that will be
worked on further. It is expected that
documentation for an application for
funding for preparatory surveys will be
produced in 2023.

Environmental permits for the
Group’s production facilities

2018
2022

Iggesund Mill, Environmental Code1)
Workington Mill, IED
Hallsta Paper Mill, Environmental
Protection Act
2000
Braviken Paper Mill, Environmental Code2) 2002
Iggesund Sawmill, Environmental Code 2014
Braviken Sawmill, Environmental Code 2010
Linghem Sawmill, Environmental Code 2003
Bygdsiljum Sawmill, Environmental Code 2018
Kroksjön Sawmill, Environmental Code 2020

1) Port activity at Skärnäs Terminal, alongside

Iggesund Mill, is included in the environmental
permit. In addition, operations subject to notification
requirements take place at the production unit in
Strömsbruk.

2) Sweden’s Land and Environment Court passed a

decision on a new environmental permit in 2022. An
appeal was lodged with the Land and Environment
Court of Appeal. It is expected that the matter will be
resolved in 2023.

Greenhouse gas emissions Scope 1–3, ’000 tonnes CO2e

2022 2021 2020 2019

Scope 1: Direct greenhouse gas emissions

Scope 2: Indirect greenhouse gas emissions from purchased electrical energy1,2)

Scope 3: Emissions in the value chain

of which category 1: Purchased goods and services3)
of which category 2: Capital goods
of which category 3: Fuel and energy-related activities4)
of which category 4: Upstream transport5)
of which categories 6 & 7: Travel6)
of which category 9: Downstream transport7)

Total emissions

604

191
95
40
54
4
220
691

971)

601)

550

136
120
38
56
4
196
707

460

100
80
36
56
4
184
577

453

101
80
31
57
4
180
585

1) Emissions from Scope 1 and 2 were high as a result of the turbine breakdown at Workington Mill which reduced its own fossil-free electricity production.
2) Refers to emissions from production and maintenance of the electricity-producing facilities and emissions from downstream electricity distribution.
3) The amount of input goods covered by the calculation has been increased and for 2022 includes 99 per cent of the volume of paperboard and paper (recalculated as dry weight).
4) Transport of fuel for the biofuel boiler at Workington Mill and emissions from forestry, such as emissions from logging and forestry.
5) Transport of woody biomass, Well to Wheel.
6) Based on the travel habits survey conducted by Holmen in 2019.
7) Refers to transport of finished products, Well to Wheel. The increase is mainly due to a new calculation method that is more wide-ranging and based on more detailed data.

Management system certifications

Production facilities1)

Environmental
ISO 14001

Energy
ISO 50001

Quality
ISO 9001

Iggesund Mill2)
Workington Mill3)
Hallsta Paper Mill
Braviken Paper Mill
Iggesund Sawmill
Braviken Sawmill
Linghem Sawmill4)
Bygdsiljum Sawmill4)
Kroksjön Sawmill4)

2001
2003
2001
1999
1999
2011

1999
2005

1990
1990
1993
1996
1997
2011

2005
2015
2005
2006
2006
2011

2022
2022

Health
and safety
ISO 45001

2016
2005
2012
2015
2017
2017
2020

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. Licence codes for
PEFC and FSC® are available at holmen.com.
2) The certifications include the production unit in
Strömsbruk and operations at Skärnäs Terminal.

3) Workington Mill has also been certified under the food
safety management system ISO 22000 since 2019
and upgraded to FSSC 22000 in 2021.

4) Work is in progress to include Linghem, Bygdsiljum

and Kroksjön in the other sawmill certificates.

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 improvement
in the work on the various management systems. Certificates can be viewed at holmen.com/sustainability.

Holmen awarded
EcoVadis Platinum

Holmen has been ranked Platinum by the
international analysis company EcoVadis. This
means that Holmen is among the top percentage
of the companies examined worldwide.
EcoVadis assesses how companies work on the
environment, sustainable purchasing, ethics,
workers’ rights and human rights.

High rating from CDP
CDP is an independent sustainability index
that analyses climate data from over 18 000
companies each year. The companies that
report their sustainability work to CDP are
assessed on disclosure, awareness and
management of climate-related risks and
opportunities.
Holmen has reported to the CDP Climate
Program since 2007 and also to the CDP Forest
Program since 2013. The results show that
Holmen has a good strategy and management
to mitigate negative impacts of climate change.
In the 2022 evaluation Holmen was ranked A-
in both categories.

Calculation of Holmen’s climate benefit
Comments to calculations on pages 42–43
Carbon dioxide storage in Holmen’s forests is based on the annual increase in the
volume of standing timber based on the company inventory carried out in 2019
minus harvested volumes.
Net storage in land, wood products, paperboard and paper 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. Storage in land
is calculated by the Swedish University of Agricultural Sciences (SLU) using the
permit method based on an inventory of 30 000 sample sites over a five-year cycle.
The methodology also takes into account the fact that a certain amount of old wood
and fibre products rotted or was incinerated during the year and thus stopped
binding carbon dioxide. According to the IPCC, fibre products have a half-life of
2 years and wood products 30 years.
The substitution effect of wood products is based on European and Canadian
research. Holmen’s calculations of the substitution effect of wood products also
make the assumption that 100 per cent of older fibre products and old wood
products that ceased binding carbon dioxide in 2022 were used for bioenergy
which substituted for fossil fuel. The substitution effect from paper and paperboard
is calculated based on the assumption that 100 per cent of paper and paperboard
becomes biofuel at the end of its lifecycle, and thus replaces fossil fuels. The
substitution effect from our production of renewable electricity is calculated by bio-
based electricity production and hydro power replacing fossil-based controllable
electricity from coal power, wind power replacing fossil-based electricity from coal
and gas power, and bioenergy (comprising branches and treetops and residual
products from Holmen’s operations delivered externally) replacing fossil fuels.
More information on calculations and sources is provided in Holmen’s
sustainability report at holmen.com.

Environmental information

Holmen Annual Report 2022

111

Business overview

holmen 2022

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

112

Holmen Annual Report 2022

Business overview

Kroksjön Sawmill

Blåbergsliden Wind Farm

Bygdsiljum Sawmill

Umeälven

Harrsele
Tuggen

Gideälven

Stennäs
Gammelbyforsen
Björna
Gideå
Gidböle
Gideåbacka

Faxälven
Linnvasselv
Junsterforsen
Gäddede
Bågede

Strömsbruk
Strömsbruk Converting Plant

Iggesundsån
Pappersfallet

Iggesunds Kraftstation

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

Workington Mill

Forest holdings

Holmen’s forests 2022
Total land acreage
Total forest land acreage*
– of which nature conservation areas
Productive forest land**

1 305 000 ha
1 160 000 ha
204 000 ha
1 045 000 ha

Total volume of standing timber on productive forest land

125 million m3 growing
stock, solid over bark

* Calculated based on Holmen’s stand catalogue and data from the National Forest Inventory in line with 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) according to Holmen’s stand catalogue.

Power plants

Hydro power plant

%1)

GWh2) Built in

River

Umeälven

Gideälven

Faxälven

Harrsele
Tuggen

Stennäs
Gammelbyforsen
Björna
Gideå
Gidböle
Gideåbacka

Linnvasselv
Junsterforsen
Gäddede
Bågede

Iggesundsån

Pappersfallet
Iggesunds Kraftstation

Ljusnan

Motala Ström

Sveg
Byaforsen
Krokströmmen
Långströmmen
Ljusne Strömmar

Holmen
Bergsbron-Havet

Wind power

Varsvik Wind Farm

Blåbergsliden Wind Farm

49
22

10
10
10
10
10
10

7
100
30
100

100
100

20
20
9
11
7

100
100

100

489
98

3
1
8
9
6
8

16
130
22
71

6
22

22
21
42
32
17

106
8

149

430

1957–58
1962

1985–96
"
"
"
"
"

1961–74
"
"
"

1915
2009

1949–75
"
"
"
"

1990
1927

2014

2020–22

Production facilities

Iggesund Mill
Products: Multi-layered paperboard made
from bleached chemical pulp (SBB).
Brand: Invercote and Inverform.

Workington Mill
Products: Multi-layered paperboard,
surface layer of chemical pulp, core of
mechanical pulp (FBB).
Brand: Incada.

Strömsbruk Converting Plant
Products: Converted paperboard
products for the packaging of cosmetics,
confectionery, food, etc.

Braviken Paper Mill
Products: Paper for books, magazines,
advertising, newspapers and packaging.

Hallsta Paper Mill
Products: Paper for books, magazines,
advertising and packaging.

Braviken Sawmill
Products: Spruce and pine construction
products.

Iggesund Sawmill
Products: Pine joinery products.

Linghem Sawmill
Products: Spruce and pine construction
products.

Bygdsiljum Sawmill
Products: Spruce and pine products for
joinery and construction plus glulam and
CLT for the construction market.

Kroksjön Sawmill
Products: Spruce and pine products for
joinery and construction plus planed and
painted construction products.

1) Holmen’s share of production. 2) Holmen’s share of production in a normal year.

Customers and market

Product area

Products

Customer
segment

Primary markets

Competitors

Paperboard

Paper

Wood Products

Premium paperboard for
consumer packaging

Brand owners, converters
and wholesalers

Europe, Asia, North America

Metsä Board, Mayr-Melnhof,
Stora Enso, Westrock

Paper for books, packaging
and graphical publications

Publishers, printers,
retailers and converters

Europe, Asia

Norske Skog, Stora Enso,
UPM

Construction and joinery
timber, CLT and glulam,
plus wood for pallets and
packaging

Construction and joinery
industry, builders’
merchants, and packaging
industry

Europe, Middle East & North
Africa, North America

Moelven, SCA, Setra, Södra,
Vida and a large number of
foreign companies

Business overview

Holmen Annual Report 2022

113

Carbon dioxide (CO2)

Particulates

Definitions and 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 102 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 obligations, less financial
assets.

Operating margin

Operating profit/loss (excl. items affecting
comparability) expressed as a percentage
of net sales.

Operating profit

Profit before net financial items and tax.

Carbon is the building block of life and is part of all
living things. Biogenic carbon dioxide is released
when biological material decays or is burned. Fossil
carbon dioxide is released when coal, oil or fossil
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.

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 fossil gas.

FSC®

Forest Stewardship Council. Forestry certification
system.

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 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.

Return on capital employed

ISO 9001

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 expressed as a percentage
of average equity, calculated on the basis of
quarterly data.

Glossary

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.

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.

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.

114

Holmen Annual Report 2022

Definitions and glossary

Particles of ash formed in incineration of bark or
liquor, for example.

PEFC

Programme for the Endorsement of Forest
Certification. Forestry certification system.

Phosphorus (P)

An element contained in wood. Excessive
phosphorus in the water may cause over-
fertilisation (eutrophication) and oxygen depletion.

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.

The Biodiversity Intactness Index

Ahead of the UN biodiversity conference, COP15, a
research group at the UK’s Natural History Museum
launched the Biodiversity Trends Explorer. This is a
free tool open to everyone which can be used to see
how biodiversity is being affected by human activity.
The change is summarised by an index (Biodiversity
Intactness Index) showing what percentage of a
region’s natural biodiversity remains. The index
can assume values between 0 and 100, where 100
means that the function of an ecosystem is intact and
that the ecosystem is functioning as it always has,
while 100 indicates an ecosystem that is completely
depleted. The desirable level of biodiversity in an
area is at least 90 per cent, which can be seen as a
threshold value that biodiversity must exceed.
The Biodiversity Intactness Index is based on
the world’s largest database on how ecological
communities have been affected by mankind. The
database contains more than 4.7 million data points
from more than 41 000 places and represents
58 000 species of plants, fungi and animals worldwide.
For the period 1970–2014, the index values are based
on the actual values contained in the database. From
2015 onwards, the index values are modelled from
available data in the database.

For further information, visit www.holmen.com
Sources: Natural History Museum.
Global Forest Watch.

Calendar and information

Information

Calendar

For 2023, Holmen will publish the
following financial reports:

Interim report Jan–Mar: 28 April 2023
Interim report Jan–Jun: 17 August 2023
Interim report Jan–Sep: 25 October 2023
Year-end report: 31 January 2024

AGM 2023: 28 March 2023

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, together
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. The reports 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

Dates of trading
and dividend

The final date for trading, including right
to dividend: 28 March 2023

Record date for dividend: 30 March 2023

Payment date for dividend: 4 April 2023

Holmen Annual Report 2022

115

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