Holmen Annual Report 2023

FY2023 Annual Report · Holmen

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we
grow
houses

Annual Report
2023

contents
2023

Business overview
Holmen in brief
CEO’s message
Strategy and targets
Investment case
The year in brief
Forest
Wood Products
Paperboard
Paper
Renewable Energy
Circular business
Climate benefit
Biodiversity

Employees and thriving
rural communities

Governance
Corporate governance report
Risk management
Shareholder information
Board of Directors
Group management
Calendar and information

03
04
06
10
14
16
20
24
28
32
36
38
40

44
49
54
56
58
59

Financial report

Financial statements
Notes
Proposed appropriation of profits
Auditor’s report

60
66
92
94

Sustainability report
General information
Environment
Social
Governance
Taxonomy
Auditor’s report on its review

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

97
99
103
104
106
110

111
112
114
116
118

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 AB (publ.), corporate identity number
556001-3301, submit the annual report for the
parent company and the Group for the financial year
01.01.2023–31.12.2023. The annual report compris-
es the administration report (pages 2, 6–9, 14–15,
42–59, 92–93 and 111) and the financial statements,
together with the notes and supplementary informa-
tion (pages 60–91). The statutory sustainability
reporting in accordance with the Annual Accounts Act
comprises pages 97–110. 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.

Sustainability information is reported in accordance
with the Global Reporting Initiative’s GRI Standards
2021. The Sustainability Report comprises
pages 97–110 and the GRI index on the website
holmen.com. The information is audited by a third
party, see separate assurance report on page 110.

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: Ulla-Carin Ekblom, Fredrik Schlyter, Jonas Westling, Christian Ekstrand, Torbjörn Jakobsson and others. Print: Larsson Offsettryck AB.

Holmen Annual Report 2023

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.

2023 in figures

Net sales

Cash flow*

22 795 SEKm

5 311 SEKm

Operating profit

4 755 SEKm

No. of employees

3 546

*Before investments and changes in working capital

Total shareholder return Holmen B and OMX Stockholm

Index
700

600

500

400

300

200

100

Jan 24

Holmen B

OMX Stockholm 30 (OMXS30)

Holmen in brief

Holmen Annual Report 2023

CEO’s message

Dear
shareholDers,

2023 was defined by the central banks’ attempts to
combat inflation through interest rate rises, which
slowed the pace of newbuild construction and stifled
consumption. Despite the challenging economic envi-
ronment, we were able to maintain operating profit for
2023 at a historically good level of SEK 4 755 million.

Higher interest rates contributed to a decline in demand in the
previous year, but our business model − creating value based
on our forest assets − has proven successful even during these
tougher times. 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 packag-
ing, magazines and books from the residual forestry products.

In light of the solid earnings and our strong financial position,

the Board of Directors proposes that the dividend per share be
increased from SEK 8 to SEK 8.5, with the payment of an extra
dividend of SEK 3.

Forest and energy are in-demand resources
The forest has a key role to play in the climate transition and demand
for both logs and pulpwood is expected to increase. Although the
industry has not been running at its peak, competition in the wood
market across the Nordic region remains high and prices climbed
further in 2023. Wood prices are now 30 per cent higher than the
historical average, and the value of Holmen’s forest properties has
increased by SEK 4 billion to SEK 56 billion. With a little over a
million hectares of productive forest land, we have a much sought-
after resource that literally grows year on year. Our position in the
wood market, with good control over raw materials and the entire
value chain, ensures the long-term security of our raw material
supplies and gives us good opportunities to continue developing
our industries.

The European energy market is undergoing a major transition.

Roughly half of today’s 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. Europe has accelerated its climate transition and is
beginning to pave the way for new green industry. As a result,
considerable renewable electricity production is going to be
needed, and Holmen is continuing to pursue permits for new
wind turbines on its own land. Our hydro power additionally
contributes to the production of electricity at times of peak demand
in order to stabilise the grid. The role of controllable hydro power is
also going to become increasingly important as more weather-
dependent electricity production is added to the energy mix. The
energy situation in Europe improved over the year thanks to good
gas stocks, lower production levels in energy intensive industries
and a milder winter. Continental electricity and energy prices have
also stabilised, but at a higher level than before the energy crisis.

There is significant potential for Holmen to deliver more

renewable energy, but to realise this, we need permits from the
authorities. I really hope politicians will speed up the permit
processes, for the sake of Sweden and the green transition. I am
pleased to report that in 2023 we obtained permits for two new
wind farms. In the first phase we intend to build Blisterliden Wind
Farm in Västerbotten for a 20 per cent boost to our production of

Holmen Annual Report 2023

CEO’s message

wind and hydro power. Alongside this, we are also beginning work
with Vattenfall on Stormyrberget Wind Farm in Västernorrland, a
project that may be ready for an investment decision by 2025.

Adding value at our own facilities
Buildings account for considerable emissions of greenhouse gases,
in construction and during the building’s lifecycle. As a building
material, wood is benefitting from the ongoing transition to more
sustainable building, in a trend that is expected to drive up demand
for wood products, particularly if concrete and steel are made to
carry their true cost to the climate. There is considerable interest in
large-scale wood construction, but demand from the rest of the
construction market was subdued over the year due to high interest
rates. Given our strong position in the wood market, we see good
opportunities to develop the wood products business in pace with
the increasing demand for sustainable building materials. The first
step is to increase capacity at Iggesund Sawmill, and to ramp up the
production of glulam and CLT.

Over the years, Holmen has succeeded in developing both paper

and paperboard based on fresh wood raw material and a largely
fossil-free production process. Our well-invested facilities, access
to fossil-free electricity and local wood make us highly competitive,
and we are continuing to develop our process industry. Within
paperboard, we have excellent opportunities to grow the premium
business over time, while in paper we are investing to strengthen
our book paper business while also launching a new product for
transport packaging.

To further increase our competitiveness and strategic capabilities,

we are now combining paperboard and paper into a single business
area – Holmen Board and Paper. This move sees us focusing our
business model on four distinct business lines: forestry, hydro
and wind power, woodworking industry and process industry
operations.

Well equipped for the future
Holmen’s strategy draws on the fact that the world is transitioning
towards using energy and materials sustainably. Our growing
forests bind carbon dioxide and all our products help to replace
fossil-based materials such as concrete, steel and plastic. Our
electricity production makes it possible for people to charge
their electric cars and for companies to run their production on
renewable energy sources. Our positive climate impact for 2023
equated to 7.5 million tonnes of CO2e.

Our strong financial position makes Holmen well placed to
succeed even during tough economic times. Backed up by our
own forest and energy production, we have been able to continue
developing and advancing our business despite global uncertainties.
And that is going to continue.

Stockholm, 22 February 2024

Henrik Sjölund, President and CEO

» Holmen’s strategy draws
on the fact that the world
is transitioning towards
using energy and
materials sustainably.«

CEO’s message

Holmen Annual Report 2023

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 building.

Holmen Annual Report 2023

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 2023

Strategy and targets

we aim to create value that
stanDs the test of time –
while contributing to a
better climate

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

2004-
2008

2009-
2013

2014-
2018

2019-
2023

2024-
2028*

2029-
2033*

2034-
2038*

2039-
2043*

2 000

1 600

1 200

800

400

Harvest

Thinning

Storms & other events

*Excl. items affecting comparability

Hydro power

Wind power

*Forecast

In 2023, volumes amounted to
2.7 million m3, which is in line with the
current harvesting plan. The value of the
Group’s forest assets increased by 8 per
cent to SEK 56 billion.

Over the past 10 years, the return for
the industrial side of the business has
averaged out at 18 per cent, and in 2023
the figure was 27 per cent, driven by
excellent profitability in Paper.

In 2022, Blåbergsliden Wind Farm came
online and the outstanding shares in
Varsvik Wind Farm were acquired.
These sites generated 450 GWh wind
power in 2023.

Holmen Annual Report 2023

Strategy and targets

Climate benefit

Capital structure

Dividend

We will increase our benefit to the climate
through higher growth in our forests 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 and share buy-back, SEKm

7,5

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

24*

Ordinary dividend paid
Extra dividend paid

Share buy-backs

*Board proposal

The erection of new wind turbines and
expansion of the wood products business
have increased Holmen’s climate benefit,
which in 2023 came in at 7.5 million
tonnes CO2e, with all the business areas
making a positive contribution. For further
information, see page 38.

Net financial debt in relation to equity has
consistently been below 10 per cent over
the past five years, and amounted to 3 per
cent in 2023. Good cash flow has allowed
for a higher dividend and share buy-backs,
while retaining a strong financial position.

Alongside the gradual increase in the ordi-
nary dividend, extra dividends and share
buy-backs have also been implemented.
The Board proposes that the 2024 AGM
approve a dividend of SEK 8.5 per share
and an extra dividend of SEK 3.0 per share.

Strategy and targets

Holmen Annual Report 2023

Investment case

tHe value of
owning forest

Forest land is a fantastic asset. It
provides a renewable raw material
that can be processed into the
climate-smart products needed for
a sustainable future. And at the
same time, wind and hydro power
can be produced without
interfering on the forestry.

As we all strive to reduce our dependence
on fossil raw materials, forest products
have a key role to play and demand will
only increase in the future. Active forest
management enables the trees to grow
better, which in turn increases the amount
of renewable raw material. 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 manage-
ment, 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 2023, Holmen’s
total volume of standing timber amounted
to 126 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 harvest-
ed. 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, wood
shavings, bark, treetops and branches have
their own uses and are sold on for the
production of district heating and so on.
Nothing goes to waste.

Wind and hydro power. Holmen’s
renewable energy production is

dominated by the plannable hydro power
from our 21 wholly 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.

Owning forest land also gives us the
option of developing our own wind power
resources. This is a great way to derive
added value from our land, as higher
energy production provides a good cash
flow. Holmen’s second wholly-owned
wind farm, Blåbergsliden, became fully
operational in 2022. 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. In 2023, we obtained permits
for another two wind farms on our land,
and decisions on their construction could
be made within a year.

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.

Net sales and operating costs, SEKm

Total shareholder return Holmen B and OMX Stockholm

25 000

20 000

15 000

10 000

5 000

Index
700

600

500

400

300

200

100

0
14

Jan 24

Net sales

Operating costs

Holmen B

OMX Stockholm (OMXS30)

Holmen Annual Report 2023

Investment case

A world tHat must cHAnge

see major opportunities to further develop
the business. The next step is to increase
capacity at Iggesund Sawmill and to step
up the production of glulam and CLT
(cross-laminated timber). With a broader
palette of refined products, we have
increased sales to chains of builders’
merchants, while through Martinsons
we offer the planning and construction of
complete timber frames for everything
from industrial premises to apartment
buildings.

Large-scale investment in wind power
Our extensive land holdings mean that we
have the potential to add more renewable
energy in the form of wind power. The
establishment of wind power provides a
logical complement to our controllable
hydro power. Holmen’s strategy for wind
power is for us to plan, build, own and
manage wind farms on our own land. In
addition to our two wind farms, Varsvik and
Blåbergsliden, we obtained permits for
two new wind farms in 2023, and we have
another 30 or so projects in various stages
of development, from in-depth analysis to
processing of permit applications.

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. Only then can we
meet the needs of today’s growing
population without compromising
the ability of future generations to
do the same.

Our world is currently dictated, to a large
extent, by two parallel factors: the climate
change that is driving demand for
sustainable products, and the energy
transition 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 world’s
ability to curb climate change.

Energy issue 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 is fossil-based. 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. The energy crisis of 2022
showed just how sensitive the European
energy system is and how dependent we
are on fossil fuels such as gas and coal.

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.
On top of this, 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 a long-term strategy for
the energy system of the future.

Climate transition driving demand
Buildings account for considerable emis-
sions of greenhouse gases, in construction
and during the building’s lifecycle. A third
of fossil carbon dioxide emissions in the
EU are attributable to the construction
and real estate sector, but smart material
choices and active measures regarding
heating offer significant opportunities to
reduce the real estate sector’s climate
impact – not least if all products are made
to carry their true cost to the climate.

Lower impacts on the climate and the
environment are a strong driver behind
the increasing use of wood fibre-based
products, and 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.

Holmen is already playing its part
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. Our positive impact on
the climate equated to 7.5 million tonnes
of CO2e in 2023, 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.

Greater production and processing
of wood products
Holmen’s production of wood products
has become an increasingly important
part of our business, and as demand for
value-added wood products expands and
interest in wood construction grows, we

In 2023, we obtained permits to
build two new wind farms

Investment case

Holmen Annual Report 2023

Investment case

from tHe
swedisH forest

Holmen is a Swedish forest company that gives quality-
conscious customers across the world access to renewable
products from the Swedish forests. Conducting forestry
operations and industrial production in Sweden has multiple
plus-points, with good raw material access, fossil-free energy
and clean air just some of the comparative advantages from
which the Swedish forest industry benefits in a global market.

Access to forest raw material →

The forest has a key role to play in the climate transition and
demand for both logs and pulpwood is expected to increase. But
while the forest is a renewable resource, the supply of this raw
material is limited across much of the world. With demand for
forest raw material expected to grow, global supplies are coming
under increased pressure.

Limited supply of forest raw material. Canada has 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. Closer to home, spruce bark beetle attacks have
forced large swathes of Central Europe to increase logging
operations to deal with affected trees. In the long term, this is
expected to lead to lower volumes. The war in Ukraine has also hit
the availability of wood raw material on the European market. 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 limit exports from Russia.

Growth and harvest in Sweden’s forests. In Sweden we have
managed our forests for generations and forestry is deeply rooted
in our culture. Despite our comparatively small size, Sweden is
one of the world’s largest producers of wood products and fibre
products, with a large proportion of its production going to export.
Sweden is the world’s third largest exporter of softwood timber
products and the sixth largest producer. 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.

Holmen Annual Report 2023

Investment case

Forest assets
Proportion of forested land, %

Source: FAO Global Forest
Resources Assessment 2020

>65
51–65
31–50
11–30

Volume of standing timber and harvest in
Sweden’s forests

Million m3 growing stock, solid over bark

3 500

3 000

2 500

2 000

1 500

1 000

500

0
1956

1977

1998

2019

Annual harvest

Total volume of standing timber

Source: National Forest Inventory. Five-year average, annual harvest including
clearcutting, cleaning and thinning

to tHe wHole
world

Fossil-free electricity production →

The European energy market is undergoing major restructuring,
driven by both climate change and the war in Ukraine, which has
cut off the supply of Russian fossil gas. 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. Since electricity use is expected to rise
steeply with the electrification of everything from transport to
industrial processes, the need for more fossil-free electricity is
massive. Thanks to its early and widespread adoption of hydro power,
coupled with nuclear and wind power, Sweden’s electricity production
is fossil free, with the lowest carbon intensity in Europe.

Carbon intensity measures emissions of greenhouse gases from electricity
production, adopting a lifecycle perspective that takes into account emissions
from production and the fuels used, as well as the construction and demolition
of the power stations. Source: Electicity Maps, entsoe.eu

Access to water →

Access to clean water is a must for all life on earth. As the population
increases in Europe, so does demand for everything from drinking
water to water for industrial use and irrigation. 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. In contrast to Southern Europe in
particular, the availability of surface water in Sweden is good and
amounts of precipitation are high as a rule, resulting in significant
water flow in the rivers throughout the year.

Water stress measures the total demand for water relative to the renewable
water resources available. Source: Aqueduct, World Resources Institute

Carbon intensity from
electricity production
(gCO2eq/kWh)

<100
101–200
201–300
301–500
>500
No data

Water stress

The total demand for water
relative to the renewable water
resources available.

Low
Low–medium
Medium–high
High
Extremely high
No data

Clean air →

Like clean water, clean air is vital for our lives and our well-being.
Pollution in the form of small airborne particles can cause or
exacerbate many chronic and acute respiratory and
cardiopulmonary diseases. Although this type of air pollution has
decreased in Europe over the past 10 years, the levels remain above
the WHO’s recommendation of 10 micrograms per cubic metre of air
(μg/m3) in much of Europe. In 2019, the average value in urban
areas of the EU stood at 12.6 μg/m3, while the concentration of
particles in built-up areas of Sweden amounted to 5.8 μg/m3.

Air quality as represented by the annual average concentration of fine particles
(less than 2.5 micrometres in diameter) measured at urban background
stations, annual average 2019. Source: European Environment Agency (EEA)

Exposure to air pollution

Particles less than 2.5
micrometres per m3 (µg/m3)

<8
8–9
10–11
12–14
>14
No data

Investment case

Holmen Annual Report 2023

The year in brief

a Strong reSult
in 2023

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

22 795

%
50

SEKm
8 000

6 000

4 000

2 000

%
60

4 755

Net sales
Operating margin*

*Excl. items affecting comparability

Operating profit*
Industry’s return on capital employed*
Return on equity**

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

Forest
Paperboard
Paper
Wood Products
Renewable Energy

Total: 4 755 SEKm
1 523 SEKm
192 SEKm
2 538 SEKm
6 SEKm
697 SEKm

Cash flow, SEKm

Net debt as % of equity

*Excl. Group-wide

Capital employed*
Business area, %

8 000

6 000

4 000

2 000

5 311

1 653

1 119

2 592

Dividend
Investments
Cash flow before investments and

Share buy-back
Acquisitions

changes in working capital

Holmen Annual Report 2023

The year in brief

Forest
Wood Products

Paperboard

Paper

Renewable Energy

*Excl. Group-wide

The year in brief

The year has been defined by the central banks’ efforts to control inflation, which
slowed down consumption and new construction. Despite the challenging economic
environment, we were able to maintain operating profit at a historically good level of
SEK 4 755 million, thanks to strong earnings from paper, forest and hydro power.

Business area

Comments

Outlook

Forest

Paperboard

Paper

Wood Products

Renewable
Energy

Competition in the wood market was strong in the
Nordics in 2023 and prices increased further. Wood
prices are now 30 per cent above their historical level,
which increased Forest’s profit to SEK 1 523 million.
The value of Holmen’s forest properties, based on
transaction prices, rose by SEK 4 billion to SEK 56
billion.

Despite a weak construction sector, demand for logs remains
high. Competition for pulpwood is good due to sanctions
stopping exports from Russia. Our position in the wood
market, with good control over raw materials and the entire
value chain, ensures the long-term security of our raw
material supplies and gives us good opportunities to continue
developing our industries.

Demand for paperboard for consumer packaging was
lower than normal as customers decreased stocks and
the economy weakened. Prices were largely stable after
the implemented increases last year. The weak market,
coupled with higher raw material costs, is reflected in
Paperboard’s profit, which fell to SEK 192 million.

Demand on the usually stable paperboard market saw a
significant drop in 2023, largely due to customers decreasing
their excess stock. Although demand may be weak at the
moment, we see good possibilities for growing the premium
business over time, given our strong cost and market
position.

Demand for paper has continued to fall, which has put
pressure on market prices. However, the price level
remained high in 2023 due to expensive input goods
for many continental producers. Thanks to high selling
prices and our favorable cost position, Paper’s profit
was very high, SEK 2 538 million.

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 investing to
increase production of our new packaging product.

The wood products market has been pressured by
the weak construction cycle. After a steep drop in
2022, prices stabilised at a historically high level in
2023, due to a shortage of raw material in many of the
major production countries. However, profit for Wood
Products was low, SEK 6 million, as a consequence of
high log prices.

There is strong interest in large-scale building in wood as an
alternative to concrete and steel, but the construction cycle is
weak with low rates of new construction due to central banks’
interest rate increases. 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.

The price of electricity in northern Sweden, where
Holmen has the majority of its production, fell to SEK
450/MWh in 2023, which is still somewhat higher than
the historical norm. Profit declined to SEK 697 million
as a result of lower electricity prices, despite higher
revenue for hydro power’s ancillary services to help
stabilise the electricity grid.

Continental electricity and energy prices have stabilised
over the year, but at a higher level than before the energy
crisis. Europe has accelerated its climate transition and is
beginning to pave the way for new green industry. As a result,
considerable renewable electricity production is going to
be needed, and Holmen is continuing to pursue permits for
new wind turbines on its own land. Hydro power additionally
contributes to the production of electricity at times of peak
demand in order to stabilise the grid.

Thanks to strong cash flow, an extra dividend of SEK 1.3
billion was paid out, and shares worth SEK 1.1 billion
were bought back, all while maintaining low levels of
debt. The Group’s net financial debt at year end
amounted to SEK 1 869 million, corresponding to 3 per
cent of equity. Our strong financial position makes us
well equipped to exploit the opportunities opening up in
a world that is striving towards a sustainable society
and where raw materials and energy are in short supply.

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)

2023

22 795
4 755

4 755
3 697
23.0

8.5*
3.0*
8.5

5 311
1 653
56 923
1 869
3
3 546

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

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

The year in brief

Holmen Annual Report 2023

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 supplying industry with
renewable raw material. 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 nurseries
produce 45 million
seedlings each year

Holmen’s land holdings cover 1.3 million
hectares, of which a little over a million
is productive forest land. As one of
Sweden’s biggest forest owners, 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
sustainably and for us to make wise use of
the raw material. 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 diox-
ide, which remains stored in the wood prod-
ucts 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 long-term 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
The trees are ready for harvesting at the
point when growth tails off, along with the
capacity to absorb carbon dioxide. 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 190 million a year in
future growth through silviculture and
fertilisation. Holmen’s forestry is certified
and all the wood is traceable.

45 million seedlings. Holmen’s two nurs-
eries – one in Gideå and one in Friggesund
– produce 45 million spruce and pine seed-
lings 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 of wax or sand 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.

Long-term planning. With a production
cycle of almost a century in the forest,
long-termism is more than just a buzz-
word for us. 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
and ensure sustainable harvesting levels
over time. The assets of our forests are
also detailed in local ecological landscape
plans, which outline the areas set aside for
nature conservation and how the forests
are to be managed over the long term in
order to preserve existing natural assets
and to create new ones.

Learning more about
Swedish forests
Given the major contribution that our
forests make to both the climate and the

Holmen Annual Report 2023

Forest

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.

Although we have built up extensive
knowledge of how to manage our forests,
we are convinced that the way to advance
and refine our methods is through
research and collaboration. Therefore
there are a hundred or so research pro-
jects conducted on our land, both
independently and in partnership with
research organisations, universities and
other stakeholders.

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 condi-
tions 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.

Control over the raw material
Owning large forest holdings and having
close partnerships with around
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 that is distributed via
efficient logistics solutions. With growing
capacity to produce wood products near
our forest holdings, we can also process
an ever-increasing proportion of our forest
at our own industrial sites.

Key figures

Operating profit

Comment on results

2023

2022

Net sales, SEKm

7 996

7 342

SEKm
1 600

Of which from own forest,
SEKm

1 768

1 524

1 200

Operating profit/loss, SEKm 1 523

1 401

Investments, SEKm

222

278

Book value, forest assets,
SEKm

Average no. of employees
(FTE)

Deliveries, own forest,
’000 m3sub

56 348 52 151

459

450

2 702

2 813

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

1 523

Competition in the wood market was strong
in the Nordics in 2023 and prices climbed
further. Wood prices are now 30 per cent
above their historical level, which increased
Forest’s profit to SEK 1 523 million. The
value of Holmen’s forest properties, based
on transaction prices, rose by SEK 4 billion
to SEK 56 billion.

800

400

Operating profit/loss excluding items
affecting comparability

Holmen’s forests 2023

Total land acreage

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

1 305 000 ha
1 161 000 ha
207 000 ha
1 046 000 ha

Total volume of standing timber
on productive forest land

126 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.

120

1948

1948
1955
1965
1988
2000
2010
2020
1993
1975
1955
1965
1975
1988
1993
2000
2010
2020

2023*

Inventory
* Estimate

Forest

Holmen Annual Report 2023

Forest

active foreStry that iS
conStantly evolVing

to be taken and where. The Forest
Inventory speeds up the process of
identifying beetle attacks in the forest,
making Holmen better placed to take
action early on and thus increase the
chance of limiting the financial losses
and saving the surrounding forest.

Drones and other innovative machines
are also common features in the drive to
test new things. Drones that can carry
heavy loads are, for example, being used in
a pilot project to carry new seedlings to
replanting sites, with the aim that the
drones will be able to handle this part of
the planting process entirely
independently.

Owning and managing forest
involves long time horizons. It
takes almost a century for the
trees to reach maturity and be
ready for harvesting, which brings
multiple challenges for forest
owners. The question of what
demands the forest we are
currently stewarding will need to
meet in the future is therefore a
crucial one. Holmen’s approach
is to embrace continuous
development, with forestry
innovation as a vital element.

Digitalisation has a key role to play in this
development. Gathering data from satel-
lites, aircraft, drones and land-based vehi-
cles enables us to learn new information
that we have previously struggled to
acquire. One example of a forestry chal-
lenge that can be addressed using digital
technology is the spruce bark beetle. Back
in 2019, Holmen created the Bark Beetle
Analysis tool, which can spot beetle-in-
fested forest that is dying off and therefore
needs to be dealt with. The tool combines
satellite images with data from inventories

on the ground, plus information from
forest machinery. This is all put together
to create algorithms that can pick out the
sites of spruce bark beetle attacks before
the damage has become visible to the
human eye. The more data that is fed into
the algorithms, the more accurate the
forecasts, which has made the tool a vital
contributor to silviculture decisions – for
both Holmen and the many private forest
owners that use the tool.

Drones and AI open up
new possibilities
In summer 2022, Holmen supplemented
the Bark Beetle Analysis tool with the
Forest Inventory tool, which involves
drones systematically flying over the
forest taking high-resolution, low-altitude
aerial photographs. These are then
analysed using AI that has learned to
recognise dead and weakened spruce
trees that are at risk of attack. The results
are fed into Holmen’s planning system, as
a supplement to the information produced
by the Bark Beetle Analysis tool. The
photographs provide detailed information
that helps to analyse what measures need

Holmen Annual Report 2023

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 is productive forest land.
The land holdings are split across around 4 600 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 in which our forest is
located. As of 31 December 2023, the book value stands at SEK 56 348
(52 151) million, which averages out at SEK 53 900 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

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

Real

Nominal

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

1 000

750

500

250

2015

2016

2017

2018

2019

2020

2021

2022

2023

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

Northern Sweden

Central Sweden

Southern Sweden

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

Forest

Holmen Annual Report 2023

Vasaplan bus terminal in Umeå.

Key figures

Operating profit/loss and return

Comment on results

2023

2022

Net sales, SEKm

4 075

5 015

Operating profit/loss, SEKm

1 237

Investments, SEKm

391

122

Capital employed, SEKm

2 139

2 067

Average no. of employees
(FTE)

773

729

Deliveries, ’000 m3

1 498

1 435

SEKm
2 000

1 600

1 200

800

400

The wood products market has been
pressured by the weak construction cycle.
After a steep drop in 2022, prices
stabilised at a historically high level in
2023, due to a shortage of raw material in
many of the major production countries.
However, profit for Wood Products was
low, SEK 6 million, as a consequence of
high log prices.

%
100

6
0

Operating profit
Return on capital employed

Consumption of wood products

Price development

Million m3
400

300

200

100

Index
400

300

200

100

Europe

North America

China

Other Asia

MENA

Export price Sweden

Price USA

Holmen Annual Report 2023

Wood Products

building the future
in wood

Wood is the only renewable
construction material

Holmen offers a wide range of wood and timber products
for construction and joinery. The raw material comes
from responsibly managed forests, and 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 win-
dow frames, as well as for furniture and
decking. Products as basic as planks and
boards create great value, not least for the
climate. As demand has increased, sales
of residual products from the sawmills in
the form of chips and the fuel mix have
also become more important factors.

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. 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 gen-
erates considerable emissions of fossil
carbon dioxide. In addition, the whole chain
from manufacture to transport is more ener-
gy-efficient and cost-effective, since wood
weighs less. Wood products thus create
benefit for the climate on multiple fronts.

We currently offer everything from join-
ery timber and refined products for build-
ers’ merchants to advanced construction
components. Through Martinsons, we are
also able to offer the planning and con-
struction of complete timber frames for
everything from sports halls and schools
to warehouses and apartment buildings.

Added value in large-scale
production
Holmen’s high-tech sawmills enable us to
offer a wide range of dimensions and
grades. The sawmills make use of the entire
log, and maximum value is extracted
according to the unique properties of each
log. We optimise the sawing and drying in
cooperation with our customers to minimise
wastage and maximise customer benefit.

Investments strengthening our position.
Following the acquisition of the Linghem
small log 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 busi-
ness. An investment in timber sorting and
a new planing mill will increase the saw-
mill’s production capacity by 20 per cent,
as well as adding construction timber in
both spruce and pine on top of its joinery
products range.

Investments in Bygdsiljum Sawmill and

in a distribution warehouse and cutting
line at Braviken Sawmill also enable us to
expand production of glulam and CLT, as
well as strengthening our position with
builders’ merchants.

Energy-efficient production units. Two
of the Group’s sawmills, Braviken and
Iggesund, form energy-efficient units with
their neighbouring paper and paperboard
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 chain-of-cus-
tody certification, and the wood raw mate-
rial 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 saw-
mills, strategically located near our forest
holdings in various parts of Sweden, we
have good control over our raw material.
Proximity to the raw material combined
with efficient wood purchasing is a key
factor for profitability, while competitive-
ness is underpinned by the fact that parts
of production are co-located with the
Group’s paperboard and paper mills.

Strong underlying growth
The real estate sector accounts for a third
of carbon emissions in Europe and the
construction industry is working hard to
reduce its climate footprint. As a building
material, wood is benefitting from the
ongoing green transition, in a trend that
is expected to boost demand for wood
products, particularly if concrete and steel
are made to carry their true cost to the
climate. There is considerable potential
for growth, not least in medium-sized
buildings such as schools, warehouses
and apartment blocks. The proportion of
larger buildings that use wood is expected
to rise as the capacity for industrial wood
construction expands.

Demand for engineered 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.

Wood Products

Holmen Annual Report 2023

Trikåfabriken in Hammarby Sjöstad

a buSineSS built on
climate-Smart SolutionS

With Martinsons at the forefront,
Holmen is paving the way for large-
scale wood construction. Together,
we have a strong and stable value
chain, from seed to finished
wooden building.

The combined offering of development,
design and delivery of framing systems in
glulam and CLT, for projects such as
apartment blocks, offices and sports halls,
makes Martinsons a leading player in
sustainable building.

Smart upward extensions
Over the past year, Martinsons has been
involved in building the majority of upward
extensions in Stockholm city centre. These
additions are a popular way of developing
an already attractive and much loved inner
city environment. They are also efficient,

since infrastructure such as public trans-
port, water and waste, as well as electricity
and heating are already in place. In addi-
tion, wood is a light material compared with
steel and concrete, which can be a critical
factor when it comes to upward exten-
sions: the structure needs to be strong, but
also of a weight that the existing building is
able to carry. A further advantage of wood
is that it makes installation fast, thanks to a
high degree of prefabrication, which is
good news when working in a dense city
centre, with all the logistical challenges
that this entails. What is more, wood is a
material that many people think contrib-
utes to more liveable indoor environments.

Replaces concrete and steel
Apart from upward extensions, perhaps
the greatest climate benefit comes from
incorporating wood into common

medium-size buildings, such as schools,
warehouses and sports halls – buildings
that have historically tended to be built in
concrete and steel.

During 2023 Martinsons signed its
second- largest contract ever. In partner-
ship with contractor EAB, Martinsons will
be building a logistics warehouse measur-
ing 33 000 square metres for property
developer Catena . Martinsons will be
supplying 30 m tall wooden columns plus
glulam beams for the facility, which will
house gardening retailer Granngården’s
new central warehouse, amongst other
things. The building is expected to be oper-
ational by the fourth quarter of 2024, and
to provide a climate benefit of almost 3 000
tonnes CO2e during its lifetime. That
equates to the emissions from over 2 500
people flying from Stockholm Arlanda to
Gran Canaria in Spain and back again.

Holmen Annual Report 2023

Wood Products

Trikåfabriken in Hammarby Sjöstad
is a great example of how upward
extensions in wood can promote
urban development. When it came to
adding five floors to the old brick
factory building from 1929, a
wooden structure was the optimal
solution. The fact that the glulam and
CLT structural elements are so light
in relation to their load-bearing
capacity is what made it possible to
extend on top of the 90-year-old
brick frame.

growing intereSt
in timber frameS

Building in wood offers many
advantages. We enjoy environ ments
with exposed wood, production is
energy efficient and it is beneficial
for the climate. Over the past couple
of years, recognition of the mate-
rial’s advantages seems to have
increased, since timber frames are
increasingly the go-to choice.

Across the globe, the real estate industry
accounts for a large proportion of green-
house gas emissions, not least due to the
use of steel and cement in construction.
The success of the climate transition
depends on us heavily reducing the use of
fossil materials and replacing them with
renewable alternatives. The trend appears
to have been moving in the right direction
for a few years now.
A survey by Prognoscenter, covering the
period 2018–2022, suggests that timber
frames are gaining ground in all building
categories in Sweden – from apartment
blocks to industrial facilities and ware-
houses. Taking the market as a whole, the
proportion of timber frames grew from 12
to 21 per cent over the period surveyed.
The greatest increase was seen in public
buildings, including schools and care facil-
ities, with the proportion of timber frames
almost doubling between 2018 and 2022,
from 18 to 34 per cent.

Six reasons to build in wood

1. Good for the climate
Wood products are made from renewa-
ble 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 pres-
sure 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

Glulam and CLT are, thanks to their

structure, form-stable materials with
an impressive load-bearing 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 prefabri-
cated 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 on-site 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 2023

Key figures

Operating profit/loss and return

Comment on results

2023

2022

Net sales, SEKm

6 765

6 735

Operating profit/loss
excl. items affecting
comparability, SEKm

Investments, SEKm

192

1 081

697

555

Capital employed, SEKm

5 889

5 632

Average no. of employees
(FTE)

1 289

1 290

Deliveries, ’000 tonnes

448

503

SEKm
1 250

1 000

750

500

250

Demand for paperboard for consumer
packaging was lower than normal as
customers decreased stocks and the
economy weakened. Prices were largely
stable after the implemented increases
last year. The weak market, coupled with
higher raw material costs, is reflected
in Paperboard’s profit, which fell to
SEK 192 million.

%
25

192

Operating profit/loss excluding items

affecting comparability

Return on capital employed, excluding

items affecting comparability

European demand for SBB and FBB

Price development FBB

Mtonnes
4

Index
160

120

Holmen Annual Report 2023

Paperboard

premium paperboard
for conscious brands

We offer paperboard products
of the highest quality with a
low climate footprint

Holmen 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 world-leading products
for conscious brand owners with high
ambitions.

Fresh fibre brings product benefits
Holmen’s 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.
And because the paperboard is made
from a renewable, recyclable and biode-
gradable 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 Working-
ton in the UK. The paperboard mills hold
chain-of-custody certification and all the
wood raw material comes from sustaina-
bly 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 in the sawmill’s
drying processes.

The paperboard mills in both Iggesund

and Workington have been awarded
EcoVadis Platinum for their successful
sustainability work, confirming that the
mills are world leaders in sustainability.

Customer choices make
a difference
We want to help our customers to make
more renewable choices, and the next
generation of packaging solutions is being
created in close collaboration with our
customers and partners. Together, we are
identifying new applications for our paper-
board products, and with our collective
knowledge we are creating packaging
solutions that meet the toughest of
demands.

A smarter alternative to plastic. One of
the greatest challenges facing the packag-
ing 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 makes for a smaller
climate 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 our
products are constantly being developed to
meet demand for sustainable packaging
solutions.
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. Customer support and fast deliver-
ies are priority areas that cover everything
from advice and product samples to service
centres with local sheeting units and ware-
housing. The service offering also includes
environmental documentation.

Strong position in the
premium segment
Demand for packaging has risen in line
with population growth, urbanisation and
an expanding middle class. The past year,
however, has seen demand for consumer
paperboard soften due to the weaker
economic situation.
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 sustain-
ably managed forests puts us in a strong
position in the premium segment. With
local wood raw material and a favourable
energy situation, Holmen is in a strong
position to further develop its paperboard
business.

Paperboard

Holmen Annual Report 2023

together, we are developing
next-generation productS

Holmen is a market leader
in premium paperboard and
sustainable packaging solutions.
Just north of Iggesund Mill lies
Strömsbruk Converting Plant,
which applies additional finishing
to paperboard products from both
Iggesund and Workington.

The paperboard is finished with various
coatings in Strömsbruk – it may be lami-
nated with film and foil to give it specific
properties or glue laminated in several
layers to achieve a more robust product.
The aim is to create sustainable products
that are fit for purpose, such as packaging
for confectionery or cosmetics that is resist-
ant to moisture, fat or odours. Strömsbruk
has three production lines with a total
capacity of just over 50 000 tonnes per year.

Alternative to plastic
We are working with our customers and
partners to develop and identify the next
generation of products. 2023 saw the
launch of a packaging solution for ready-
meals with a lower carbon footprint than
before. The new Inverform product has a
coating containing 25 per cent less plastic
than previously, while maintaining the
same temperature resistance and fat and
moisture barrier properties. Called PET
30, the coating enables our customers to
offer the end consumer an alternative to
traditional packaging in plastic or alumin-
ium.

The fact that packaging is increasingly
made of paperboard instead of plastic cuts
not only the amount of fossil material used,
but also the enormous quantities of plastic
polluting our oceans and countryside.

Forever learning
Working with our customers and partners,
and being open to their needs, is fundamen-
tal if we are to continue being relevant and
secure our position as the leading manufac-
turer of premium paperboard, delivering
what our customers really want – sustaina-
ble packaging solutions. In today’s changing
world, collaboration lies at the heart of our
shared learning. We monitor changes in soci-
ety and in customer needs, taking a creative,
customer-centred approach to developing
new materials and products that create
added market value. The emphasis of our
collaborations is on sharing our knowledge
and experience as a means of developing
long-term relationships. In exchange, we
gain insights into customer needs and valu-
able input on our products and solutions.

Holmen Annual Report 2023

Paperboard

Iggesund Mill and Workington
Mill rewarded for their
sustainability work

For the third year in a row, both Iggesund Mill and
Workington Mill have been awarded the highest Platinum
rating by EcoVadis. Of the more than 30 000 businesses
assessed on sustainability over the year, the two mills are
in the very highest echelons.

Sustainability has become an increasingly important question, for both
customers and wider society. Holmen works actively on sustainability
with the ambition of acting transparently and sharing sustainability
information with our customers and other stakeholders. Since 2017,
we have therefore invited the independent third party EcoVadis* to
audit our sustainability work.

2020 was the first year that EcoVadis awarded Iggesund Mill and
Workington Mill their top Platinum rating, recognising the most sustain-
able companies out of all those assessed. Holmen’s two paperboard
mills were once again rated Platinum in 2023, making this the third
time in a row. Holmen’s two paper mills, Braviken and Hallsta, also
obtained EcoVadis Platinum in 2023, meaning that all of Holmen’s mills
are in the absolute top flight of the world’s audited companies.

There are many factors behind the success of the mills. The plants

hold chain-of-custody certification, for example, and only use raw
material from sustainably managed forests. Both Iggesund Mill and
Workington Mill are also largely self-sufficient in renewable thermal
and electrical energy, which gives the products a low carbon footprint.

*EcoVadis is an international analysis company that annually audits the sustainability
work of companies, based on reported data from 250 questions covering the environ-
ment, sustainable purchasing, ethics, employment practices and human rights.

Paperboard

Holmen Annual Report 2023

Paper

innovative paper
products from
fresh fibre

Holmen produces light and resource-efficient paper
based on fresh fibre for books, packaging and
graphical publications. Our strategy is to constantly
develop our product portfolio so that we remain
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 pro-
duces a naturally high brightness for an
improved experience of text and images.
Our paper products have high bulk, mak-
ing them thick yet light, which means that
the customer gets more paper with the
same feel at no extra cost. A lighter paper
also enables lower distribution costs.

Paper with the power
to communicate
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 long-term approach
in working to meet customer demand and
create profitable products for books, mag-
azines, printed advertising and packaging.

Book paper. Holmen’s book paper is the
leading product for paperback books in
Europe. Publishers appreciate Holmen’s
book paper because it offers bright and
even surface properties that enhance the
reading experience, while also helping
customers improve the efficiency of both
production and transport.

Graphical paper. 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.
The combination of high bulk, whiteness
and brightness makes our magazine paper
a competitive choice.

Packaging paper. With our launch of
paper for corrugated board packaging, we

are taking the next step in our develop-
ment of future paper products and intro-
ducing our paper in what is a new market
segment for Holmen. Our light but strong
and stable packaging paper from fresh
fibre reduces transport emissions and
gives customers a chance to replace
fossil-based packaging.

Production with a low
climate footprint
With renewable raw material, fossil-free
electricity and resource-efficient produc-
tion, we are able to offer products with a
low climate footprint. Customer interest in
our climate-smart 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
products 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 chain-of-
custody certification enables us to ensure
that the raw material for our products
always comes from sustainably managed
forests. Both mills were awarded EcoVadis’
Platinum rating in 2023. 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 fossil-free. Within the mill’s
energy solutions, heat is recovered from
the manufacturing process and waste-

Holmen Annual Report 2023

Paper

Holmen’s book paper is the
leading product for paperback
books in Europe

water, the bark is sold to heating plants
and residual products are composted to
create topsoil.

Braviken Paper Mill forms an energy-
efficient unit with Braviken Sawmill. The
paper mill receives raw material in the
form of wood chips from the sawmill,
which in turn is supplied with 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 fibre 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 manufac-
turers have switched their printing paper
production over to packaging materials.
Our paper products have good com-
petitiveness, not least due to resource-
efficient production using local wood raw
material and fossil-free electricity, giving
the products a low climate footprint.

Key figures

Operating profit/loss and return

Comment on results

2023

2022

Net sales, SEKm

8 200

8 370

Operating profit/loss, SEKm 2 538

2 714

SEKm
3 000

Investments, SEKm

314

186

2 000

Capital employed, SEKm

1 737

1 939

Average no. of employees
(FTE)

859

842

1 000

Deliveries, ’000 tonnes

896

995

134

2 538

Operating profit
Return on capital employed

Demand for paper has continued to fall,
which has put pressure on market prices.
However, the price level remained high in
2023, as input goods are expensive for
many continental producers. Paper
posted very strong profits of SEK 2 538,
as a result of high selling prices and our
good cost base.

%
150

100

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 2023

Paper

inveStment in expanded
production of book and
packaging paper

Recent decades have marked a
fundamental shift in the paper
market. Holmen works actively to
remain fully in tune with the times
and constantly anticipate the
paper products of the future.

Changes in consumer behaviour and
greater digitalisation have had a major
impact on the paper market. To ensure
that our business stays competitive over
time, we need to continually review and
develop our products. In the late 1990s,
for example, forecasts indicated new
opportunities in book paper. A little over
30 years later, Holmen is a market leader
in Europe’s book paper segment.

The same approach drove the business
area’s entry into the packaging market in
2021, when intensive product develop-
ment work was launched to be able to
offer a product to the growing packaging
market. Despite the pandemic, Holmen
was able to develop, produce and launch a
popular new product in the packaging seg-
ment in just a short timeframe. Holmen
INNR was launched as an interliner, the

innermost layer of corrugated board that
is glued between two layers of wavy flut-
ing. Since then its applications have
expanded and Holmen INNR is now also
marketed as a fluting product.

Broader product palette and
higher volumes of book paper
Over the year, we have taken further steps
to improve the quality of our packaging
paper. However, this requires innovative
changes to the manufacturing process,
which is why in 2024, paper machine
PM52 at Braviken Paper Mill will be rebuilt
so that it can switch between making two
substantially different products: book and
packaging paper. PM52 will become what
is known as a swing machine, the first of
its kind in the market for thermo-mechan-
ical pulp (TMP) for book and packaging
paper.

This rebuild will broaden our product
palette and increase our capacity for book
paper, while at the same time enabling us
to launch a completely new packaging
product with greater strength for the same
grammage. The new packaging product

thus has a lower weight than other pack-
aging papers, but without compromising
its strength properties. Since paper
volumes are traded by weight, customers
can buy fewer tonnes and still get the
same amount of paper. The new product
will be launched in 2025, after the rebuild-
ing of the paper machine in autumn 2024.

100 years of experience
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.

85
↓
73

Holmen INNR is a fresh fibre-based
product designed for corrugated board
packaging. Compared with traditional
products, it is both light and strong.
Holmen INNR in 73 gsm is able to replace
a standard 80–85 gsm fluting product,
meaning that the customer can get the
same amount of packaging at a lower cost.
And with a lower carbon footprint.

Holmen Annual Report 2023

Paper

84%

Printed books accounted for 84%
of the European book market’s
total sales in 2022.

Role of the book in a
digitalised world

In an age when digitalisation is changing the global
landscape, it would be unsurprising to feel a certain anxiety
over the future of the printed book. However, the fact is that,
while audio and e-books are gaining market share in some
quarters, the printed book remains strong in many others.

The Federation of European Publishers is an independent, non-profit
umbrella organisation for European publishers that collates statistics
about the market each year. According to them, printed books accounted
for 84 per cent of the European book market’s total sales in 2022, which
is a stable proportion for the format compared with previous years.

Holmen’s book paper is the leading product in its market in Europe,

not least because it is so well suited to its purpose. It has high bulk,
making it thick yet light, which means that the customer gets more paper
with the same feel at no extra cost. The lower weight also means that
less energy is required for distribution, which reduces both the overall
carbon footprint and the cost of shipping. Lower weight can even be of
benefit to the end consumer, not least when it comes to thicker books,
such as textbooks for children and young people, that regularly have to
be carried from place to place.

The fact that book paper is made from fresh fibre also has its

advantages, as it gives the product a naturally high brightness, reducing
the need for chemicals to achieve a bright, print-ready surface . Much of
Holmen’s book paper is sold to continental Europe, where books can be
recycled at the end of their life, providing necessary input to the
European recovered fibre system.

Paper

Holmen Annual Report 2023

Renewable Energy

green energy
from our land

Holmen’s production of renewable hydro and wind
power contributes towards a sustainable electricity
supply in Sweden and towards Europe’s transition to
fossil-free energy sources. The business will grow by
establishing wind power on Holmen’s own land.

Holmen has 21 wholly or partly
owned hydro power stations
and two own wind farms

Holmen produces renewable energy from
water and wind. Hydro power is a vital
energy source for society, not least as it
can be regulated to meet variations in the
market balance. As a complement to the
existing controllable hydro power, our
strategy is to increase the production of
renewable energy by building wind farms
on our own land. 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 driven by the challenge
of climate change. Roughly half of
electricity production in Europe is fossil-
free. However, electricity only accounts for
a quarter of total energy consumption and
almost all other energy consumption is
fossil-based. To meet the climate targets,
much of fossil-based energy production
will need to be switched to fossil-free
sources. When combined with increasing
electrification of both transport and
industry, it is clear that electricity
consumption is set to rise, creating
additional demand for more renewable
electricity.

Strength in own energy assets
Holmen supplied 1.7 TWh renewable
electricity from hydro and wind power
in 2023. Together with the renewable
electrical energy that is produced at the
Group’s mills, our production of hydro and
wind power equates to around 60 per cent
of Holmen’s overall energy use.

Hydro power stabilises the electricity
market. Transitioning the energy system
to more weather-dependent energy
sources will also bring challenges, since
the power supply has to be maintained

every minute of every day, all year round.
The majority of Holmen’s electricity
production comes from our 21 wholly or
partly owned hydro power stations. In
contrast to most renewable energy types,
hydro power is controllable. Electricity 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 regu-
lating power, which is the energy needed
to meet fluctuations in demand. Produc-
tion 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
electricity for a very long time. The invest-
ment required is relatively small, and
the operating and maintenance costs
are low since the plants are almost entirely
automated. The climate impact of the oper-
ation is also marginal, with minimal emis-
sions. Overall, hydro power brings major
benefits to society as part of the move
towards a fossil-free electricity system.

Wind power creates opportunities
Wind power is currently one of the fastest
growing energy sources in the EU and the
third largest method of generating elec-
tricity in Sweden. Recent years have seen
enormous technical advances in wind
power. Higher towers with longer rotor
blades and larger generators have dra-
matically reduced the cost of wind power
per kilowatt hour produced, making wind
power now the cheapest way of producing
new renewable electricity in Sweden.

Increased production on own land.
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.

2022 saw the opening of Blåbergsliden

Wind Farm outside Skellefteå, as well as
Holmen’s acquisition of the outstanding
shares in Varsvik Wind Farm, previously
owned by an investment fund for renewa-
ble energy. These investments boosted
our renewable energy production by
40 per cent, marking a significant step in
the development of Holmen’s renewable
energy business.

In addition to Varsvik and Blåbergs-

liden, Holmen has permits to erect a
further two wind farms totalling 700 GWh.
Decisions on new wind power investments
may be taken in 2024 and 2025.

Energy market restructuring
The electricity market in the Nordic
region has historically worked well, with
harmonised pricing that usually tracks
the marginal cost of fossil energy. This is
because the electricity market is tied in
with the rest of Europe, and the price is
set according to the most expensive type
of production at any given moment.
However, the energy crisis of 2022
showed how vulnerable the European
energy system is, when the ban on imports
of Russian fossil gas caused significant
difficulties in sourcing enough energy,
prompting unprecedented price rises.
The expansion of renewable energy has
reduced our dependence on fossil power,
but it has also made electricity prices
more volatile. At the same time, the price
differences within Sweden have increased
due to nuclear shutdowns and restrictions
on transmission capacity between northern
and southern Sweden.

Holmen Annual Report 2023

Renewable Energy

Key figures

Operating profit/loss and return

Comment on results

2023

2022

Net sales, SEKm

1 070

1 226

Operating profit/loss, SEKm

697

1 006

Investments, SEKm

237

Capital employed, SEKm

4 283

4 618

Average no. of employees
(FTE)

Deliveries of hydro and
wind power, GWh

1 658

1 639

SEKm
1 200

900

600

300

The price of electricity in northern
Sweden, where Holmen has the majority
of its production, fell to SEK 450/MWh in
2023, which is still somewhat higher than
the historical norm. Profit declined to
SEK 697 million as a result of lower
electricity prices, despite higher revenue
for hydro power’s ancillary services to
help stabilise the electricity grid.

%
32

697

Operating profit/loss

excluding items affecting comparability

Return on capital employed, excluding

items affecting comparability

European energy consumption, %

European electricity consumption

Price development

TWh
6 000

4 000

2 000

0
97

EUR/MWh
500

400

300

200

100

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 2023

Renewable Energy

hydro power’S
role in today’S
energy SyStem

There is a major shortfall in green electricity in Europe, and as Swedish
industries transition and vehicle fleets are electrified, a serious increase in
the supply of fossil-free electricity will also be needed in Sweden. Holmen’s
hydro power is a valuable resource that generates renewable electricity at
a low cost, and can be channelled to periods of peak energy demand.

To meet the growing demand for fossil-free
energy, Sweden is seeing large-scale
investments in various energy sources,
with the creation of new solar and wind
farms, plus a planned expansion of nuclear
energy. Investments are also being
made in increased flexibility and power
output. Holmen has a key role to play in
the development of the Swedish energy
system, as we establish wind power on our
own land, with several projects in various
phases of development. In addition, our
hydro power stations are an important
component in the increasingly weather-
dependent electricity mix.

Solar and wind power are both non-

plannable energy sources. We cannot plan
when the sun will shine or the wind will

Income hydro power*, SEK/MWh

600

400

200

Q4-21

Q2-22

Q4-22

Q2-23

Q4-23

Q1-22

Q3-22

Q1-23

Q3-23

*Ancillary services, timing and guarantees of origin

blow, and so we can only produce
electricity from such weather-dependent
sources when the conditions allow.
Weather-dependent electricity systems
therefore need to be supplemented with
controllable sources such as hydro
power, along with flexibility in electricity
consumption. Holmen is already playing
an important role in this respect, through
our hydro power, of course, but also, as
one of Sweden’s largest consumers of
electricity, by adapting our consumption
to support the electricity system.

Hydro power stabilises the
electricity network
Hydro power is already being deployed on
a large scale, providing ancillary services
to stabilise the frequency in the network.
In contrast to sun and wind, water can be
stored in lakes and reservoirs and when
demand builds up in the system, the water
can be released through the turbines, cre-
ating motion and thus energy that a gener-
ator converts into electricity. Conversely,
water can be held in the reservoir when
other sources are generating electricity.
There has always been a need for stabi-
lising ancillary services, but such services
have become more critical as the propor-
tion of weather-dependent energy sources
has increased. 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.

Holmen Annual Report 2023

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.

Much of the energy transition has already
been achieved within Holmen and we have
drastically reduced our fossil emissions.
In combining forestry and electricity
production on our land, we are also 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, build, own and manage wind farms on
our own land. Doing this ourselves on our
land has many benefits:

Major landowner
Surveying and analysing our extensive land
holdings enables us to identify areas with
favourable wind conditions and choose the
locations that make the most economic
sense over time, taking account of the
area’s unique circumstances.

Cheaper building
Developing and operating the facilities
ourselves, instead of using intermediaries,
means that we can do it more cheaply. As
we are a major electricity consumer, we can
also viably process the energy ourselves.

Long-term responsibility
As a forest owner, everything we do has a
long-term perspective, and that goes for
our wind power too. We take responsibility
along the whole journey, from planning to
future operation.

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

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

Of which, priority areas

270

160

410 000

260 000

80 000

Holmen’s entire land holdings, totalling 1.3 million hectares, have been analysed, and 270 areas
appear to have potential for wind power. Of these, 160 areas are judged suitable sites for wind power,
with priority being given to 30 of them. In addition to our two wind farms, Varsvik and Blåbergsliden,
we have a total of around 30 projects in various stages of development, from in-depth analysis to
processing of permit applications.

Renewable Energy

Holmen Annual Report 2023

Circular business

We manage the forest
while preserving
biodiversity

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

Our growing forests
capture carbon dioxide

Our mills and sawmills
are resource- and
energy-efﬁcient

We produce
renewable
energy

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 when it is growing. When it
is harvested and turned into planks and
boards, the carbon stays in the wood.
When the house is demolished or a new
deck is built, the wood can be reused or
converted into other wood products and
the carbon stays stored, creating value
once more, or is recovered as bioenergy.

Our circular business
The forest ecocycle gives us our wood. The
wood is refined and made into products
which our customers can then refine fur-
ther 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 for-
est company in the Nordic region to use our
land to produce renewable energy from
wind and water ourselves. 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.

Resource-efficient production. 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.
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.

The power of customer choice
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

Holmen Annual Report 2023

Circular business

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.

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.

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,
books and magazines, which are then recy-
cled. This feeds the recovered paper sys-
tem, which needs a constant injection of
fresh fibre if it is to continue functioning.
This is why we often say that recycled
paper grows in the forest.

we grow houses buT
we produce more
Than wood producTs

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, tops, knots and bark.
Holmen’s two nurseries produce almost
45 million seedlings each year, the majority
of which are planted on the Group’s land.
After nearly a century, 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.
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
just under 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 and bark,
which are used to produce bioenergy.

The harvest
5%
Branches, tops, bark and wood shavings be-
come 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

A holistic approach to sustainability

Sustainability is about balancing several perspectives – economic, environmental
and social – and succeeding in doing so over time. 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 best placed
to make a difference, not just in the future but right now: climate, customers’
sustainable choices, and our employees and local communities.

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

We create the greatest benefit for the
climate together with our customers.
Their choice of renewable products means
that the world is avoiding fossil emissions.
Our aim is to increase the substitution of
fossil carbon dioxide through higher
sales of renewable products and
renewable energy.

We are committed to our employees and
our local communities. 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.

Circular business

Holmen Annual Report 2023

Climate benefit

climate benefiT 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 2023, Holmen
created a climate benefit of an
impressive 7.5 million tonnes CO2e,
which can be viewed in relation to
Sweden’s total emissions of just
over 50 million tonnes. This is how
Holmen created real climate
benefit in 2023.

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

Forest carbon uptake
Young trees have the greatest capacity
to bind carbon dioxide. When the trees
become old, growth slows, and when they
finally die and decay, 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 2023, it is calculated
that the increase in the volume of standing
timber in Holmen’s forests has absorbed
and stored a net 1.6 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 service life such as wood prod-
ucts, 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 0.5 million tonnes and our paperboard
and paper products contributed storage
equivalent to 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, so that
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 generat-
ed 2.6 million tonnes of greenhouse gas
emissions. When the paperboard and paper
we have produced can no longer be recy-
cled, it continues to provide a benefit as
bioenergy, replacing fossil energy equiva-
lent to emissions of 1.4 million tonnes.

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

Renewable energy production
Our sales of our own renewable electricity
from hydro power, wind power and
biomass replace coal and gas power
equivalent to 1.2 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 0.8 million tonnes of emissions.

Lower emissions
Energy-efficiency measures and
investments in fossil-free technology at
our production facilities have led to a
sharp drop in fossil emissions from our
operations. Holmen’s emissions are
already at the low levels that the IPCC,
the UN’s climate panel, defined for our
industry to meet by 2045. 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. Our emissions targets are in line
with the Paris Agreement, as certified by
the UN-backed organisation the Science
Based Targets initiative (SBTi).

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

2.6

1.4

1.2

0.8

1.6

0.5

0.1

Storage in
Holmen’s forests

Storage in
wood products

Storage in
paper &
paperboard

Wood products
replacing
fossil materials

Paper & paperboard
replacing fossil
energy

Renewable
electricity
production replacing
fossil energy

Bioenergy
replacing
fossil energy

Total net increase in carbon
storage of 2.2 million tonnes.

Total reduction in fossil carbon dioxide emissions of 6.0 million tonnes

-0.7

Holmen’s emissions
in Scope 1–3

Emissions
in Holmen’s
value chain

Actively managing the forest means carbon dioxide is stored in the growing forest and in our products, while forest-based products and renewable energy replace fossil alternatives.
Total climate benefit from Holmen in 2023 is calculated in line with the methodology used by the Swedish Forest Industries Federation, CEPI and a number of other forest companies.
See page 119 for further details of the calculations.

Holmen Annual Report 2023

Climate benefit

20 years of transition

Back in the early 2000s, Holmen started planning for the transition
away from using fossil energy in our industries and in 2005 set the
target of reducing the use of fossil fuels at the Group’s mills by 90
per cent by 2020. Today we have made the switch to mainly using
fossil-free electricity and renewable energy from biofuels.
The fact that we started this transition almost 20 years ago is a
major reason why our manufacturing has a low carbon footprint
today compared to many of our competitors. Thanks to energy
efficiency improvements and investments in fossil-free technology,
we have managed to cut fossil carbon emissions from our production
by 93 per cent since 2005.

Emissions of fossil carbon dioxide from our production 2005–2023, tonnes CO2

800 000

600 000

400 000

200 000

2013
New biofuel boiler
at Workington Mill

2016
Sale of the gas-powered
paper mill in Madrid

2007
Energy-efficiency improvements
launched at Hallsta Paper Mill

2012
New recovery boiler
at Iggesund Mill

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Climate benefit

Holmen Annual Report 2023

Biodiversity

acTive measures for
Thriving foresTs

Historically, biodiversity has not
been a priority issue for Swedish
forestry, but there has been a shift
in focus over the past 30 years.
Development has been rapid and
we are constantly learning more
about how we can foster healthy
ecosystems while increasing
forest growth.

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
1.3 million hectares of land, almost
1.2 million hectares is forest land, while
the remainder is mainly water, exposed
rock and bogs.

Areas set aside for nature conservation
are the parts of our forest land exempt from
forestry as they have major or unique value
that should be preserved. Some of these
areas are left entirely to their own devices
and in others we implement active meas-
ures such as clearing brushwood or burn-
ing forest under controlled conditions,
which is good for many rare plants and ani-
mals. Holmen’s nature conservation areas
are spread across the entire forest holding
and large cohesive areas are prioritised.

Non-productive forest land is forest where
the trees grow extremely slowly due to a
lack of nutrients or water, for example on
exposed rock and in marshland. No forestry
is carried out in these areas. The trees in
these areas are mainly old, slow-growing

or dead and constitute important habitats
for a large number of species. Together
with the nature conservation areas, non-
productive forest land can create large
areas rich in variation.

Our active forest management
incorporates extensive consideration for
both natural and cultural assets. Since
forest-dwelling species depend on
different habitats for their survival, large
broadleaves, dead trees and unusually old
trees are preserved as part of our general
nature conservation measures. We also
maintain valuable buffer zones around
lakes, watercourses, marshes and
agricultural land. These sites tend to be
rich in species due to their varying moisture
levels, light conditions and soil types, and
they also provide places where the flora
and fauna of the forest mix with those from
the marshes, water or open landscape.

Our forest holdings

Active forestry – 82%

Biodiversity indicators

In working to create thriving
forests, we have identified a
shortage of certain habitats.
To monitor and develop these
environments, we have
produced four indicators, all of
which have a clear link to forest
biodiversity:

• Area of old forest

• Area of old forest with high

conservation value

• Volume of dead wood per

hectare

• Volume of standing timber
from large broadleaves per
hectare

Since measurements began,
progress on these indicators
has been strongly positive in
Sweden, showing that our
environmental conservation
work is effective.

Areas set aside for nature conservation – 8%

Forested non-productive forest land – 10%

Long-term planning
for future generations

Forest 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.
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 almost a century 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 190 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.

Holmen Annual Report 2023

Biodiversity

Positive develoPment
in sweden’s forests

The Forestry Act sets out requirements
governing forestry in Sweden. Forestry
legislation has a long history in Sweden and
the first, more modern, forestry act requiring
regeneration, in other words that all forest
that is harvested must be replanted, was
introduced in 1903. Over the years, more
and more knowledge has accrued and the
methods for creating healthy, thriving
forests are constantly evolving.
The introduction of the current Forestry
Act in Sweden in 1993 gave equal weight
to production targets and environmental

targets. In other words, preserving natural
and environmental assets became just as
important as the forest’s productive value.
Environmental conservation requirements
include the size of the harvested area,
leaving individual trees and dead wood
during harvesting, and protecting key bio-
topes and valuable cultural environments.
With a production cycle in the forest of
almost a century, change does not happen
overnight, but several indicators clearly
show positive developments since the
introduction of the Act. The number of

broadleaves has increased by just over
20 per cent and the proportion of large
broadleaf trees has more than doubled
since 1993. The area of old forest and the
amount of hard dead wood have also more
than doubled in the past 30 years.

>100%

Increase in proportion of large
broadleaves since 1993

Area of old forest (160+ years)

Volume of standing timber,
large broadleaves

Volume of hard dead wood

’000 ha

Million m3 growing stock, solid over bark

m3/ha

800

600

400

200

180

120

>=35 cm

>= 45 cm

.
s
a
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r
a
d
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t
c
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:
e
c
r
u
o
S

Good conditions for biodiversity in the Nordic countries

The Biodiversity Intactness Index from the Natural History Museum
in the UK 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
the two most highly forested countries in Europe, both comprising
approximately 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. For more information
on the Biodiversity Intactness Index, see page 119.

Biodiversity Intactness Index 2023

Biodiversity Intactness Index trends 1970–2023

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

2023

Sweden

Europe

Global average

Biodiversity

Holmen Annual Report 2023

Employees and thriving rural communities

we grow TogeTher

We are committed to our emplo-
yees and our local communities.
Because we know that when
people and communities grow,
we can grow too.

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 put
long-term values ahead of short-term
profit and dare to swim against the tide
when it makes 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 propose
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
joins in with implementing our strategy.
This makes it easy to work across
boundaries and in new constellations.

Employees with courage,
commitment & responsibility
Our three values: courage, commitment
and responsibility develop us as individu-
als, build further on our strong culture and
make Holmen better. The values are clearly
front and centre at Holmen. Every day, they
must 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 inte-
grated in our processes and tools, including
in the recruitment process and in appraisal
talks, in our management by objectives
model, and as a basis for our internal lead-
ership and management programmes.

Forever learning. Based on our current
and future skills needs, we are working
on employee development at all levels.

Holmen Annual Report 2023

Employees and thriving rural communities

We give employees a great deal of
responsibility, as well as the motivation
and support of committed and expert
colleagues and managers. Because we
know that the impetus to grow is greatest
when development is built from the
ground up, we enable everyone to develop
through stimulating work and new
challenges. We also provide development
programmes for new and more
experienced managers alike, plus
specialists driving work on change.

Dynamic workplace. 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
offering as an employer and apply
competency-based recruitment which
helps us to bring in the right skills –
employees that represent a diversity of
insights, experiences and cultures. As our
industry is currently overwhelmingly male,
we are working to achieve a more even
gender distribution among all employees.

Thriving rural
communities
with strong local
relationships

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 4 600
forest properties. We manage our own
forests, but also work with private forest
owners and other companies in the
Swedish forest industry. Almost 15 000
private forest owners from Småland in the
south to Västerbotten in the north have
chosen us as their forestry partner. As well
as our own 3 500 employees, we create
employment for local contractors and
companies across the country. 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.

Because we develop in harmony with our
local communities, we make every effort
to be good neighbours and engage in
community organisations and tourism.
For example, we work with sporting and
cultural organisations in the communities
in which we operate. Forestry also makes
the forests easily accessible for outdoor

recreation under Sweden’s right to roam.
Our forest roads enable people to access
the countryside, to pick mushrooms and
berries on our land, and they open up
excellent opportunities for hunting
and fishing.

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 upholds human rights and the
equal value of all people in everything
we do, and all employees must have
the same rights, obligations and
opportunities. We have a vision of zero
discrimination and harassment, which
is followed up internally via employee
surveys, appraisal talks and reported
cases.

A zero vision for accidents
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. We conduct
Group-wide, systematic work on health and
safety in line with ISO 45001. As always,
the precautionary principle is paramount.
The number of work-related accidents per
million hours worked fell from 7.6 in 2022
to 5.2 in 2023 and we continue to take a
long-term approach focused on our vision
of zero accidents.

Employees who
recommend Holmen
Holmen is to be an attractive employer
where our employees recommend
Holmen as a workplace. The most
recent employee survey puts Holmen’s
employee Net Promotor Score (eNPS)
at 25. This is a strong result as the
benchmark for 250 companies in
different industries is 16.

Employees and thriving rural communities

Holmen Annual Report 2023

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 53 344 shareholders at
year-end 2023. Swedish private individu-
als accounted for the largest category of
owners with 50 747 shareholders.
The largest shareholder at year-end,
with 62.6 per cent of the votes and
34.7 per cent of the 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 shareholder
was the Kempe Foundations and their
holdings of Holmen shares amounted to
17.6 per cent of the votes and 7.5 per cent

of the 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 2023 Annual General Meeting
(AGM), the Board’s authorisation to
purchase up to 10 per cent of the
company’s shares was renewed. On 3 May
2023, the Board decided to use the buy-
back authority to adjust the Group’s
capital structure. In 2023, 2 779 323
shares were repurchased for
SEK 1 119 million, corresponding to an
average price of SEK 403/share. The buy-
backs amount to 1.7 per cent of the total
number of shares. The company already
owned 0.3 per cent of its own shares,
meaning that at 31 December 2023
Holmen held 2.0 per cent of the total
number of shares.
See pages 54–55 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 2023 that the 2024
AGM would take place on 16 April 2024.
Shareholders or proxies are entitled to
vote in accordance with the full number of
shares owned or represented.

Nomination committee
The AGM resolved that the nomination
committee should 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 2023
and 2024 AGMs is shown in the table on
page 47.
The nomination committee’s mandate
is to submit proposals for the election of
Board members and the Board Chairman,
for Board fees and auditor 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 when
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

↓ 2023 Annual General Meeting

↓ Board meetings

The notice convening the meeting, the agenda and the minutes of the
2023 AGM are available at holmen.com. The Board of Directors attended
the meeting. The AGM approved the income statement and balance
sheet, decided on the appropriation of profits and granted the departing
Board discharge from liability. The following Board members were re-
elected: Fredrik Lundberg, Alice Kempe, Lars Josefsson, Louise Lindh,
Ulf Lundahl, Fredrik Persson, Henrik Sjölund and Henriette Zeuchner.
Carina Åkerström was elected as a new member. Fredrik Lundberg was
re-elected Chairman of the Board. The general meeting of shareholders
also decided on Board fees, auditors and auditors’ fees, the approval of
the remuneration report, the adoption of new remuneration guidelines
for members of senior management and to authorise the Board to buy
back treasury shares. Fredrik Lundberg, Patrik Jönsson, SEB Investment
Management and Staffan Ringvall, Handelsbanken Fonder, checked and
approved the minutes.

The Board held eleven meetings in 2023, four of which were in connection
with the company’s publication of its quarterly reports. One meeting was
held in connection with the company’s AGM. One meeting was dedicated
to reviews of strategic issues and the Group budget for 2024. The
Board also paid special attention to financial and accounting issues, the
following up of business operations and the energy market. In addition,
the Board devoted time to sustainability issues, study visits to paperboard
mills, sawmills and power plants in the vicinity of Iggesund and significant
investment matters. On one occasion the company’s auditor reported
directly to the Board on the audit of the accounts and internal control.

Holmen Annual Report 2023

Corporate governance report

Nomination committee

Shareholders

General meeting
of shareholders

Board of Directors

CEO

Group management

Five group staffs

Five business areas

Auditors

diverse and wide-ranging in terms of the
expertise, experience and background of
the members elected by general meetings.
An even gender distribution is sought.
Further information about the work of the
nomination committee will be provided at
the 2024 AGM.
For the 2024 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,
Henriette Zeuchner and Carina Åkerström.

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 between seven and eleven
members. The company’s articles of asso-
ciation 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 2023 AGM decided to re-elect Fredrik
Lundberg , Lars Josefsson, Alice Kempe,
Louise Lindh, Ulf Lundahl, Fredrik Persson,
Henrik Sjölund and Henriette Zeuchner to
the Board, as well as electing Carina
Åkerström. Fredrik Lundberg was
re-elected Chairman of the Board. At the
statutory first meeting of the new Board in
2023, Henrik Andersson, Senior Vice
President Legal Affairs, was appointed
Board 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 to be
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 56–57.

The Board’s activities
The activities of the Board follow a plan, one
of whose aims is to ensure that the Board
obtains all the 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. Company employees
participate in Board meetings, where they
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 are pre-
sented and discussed at a Board meeting.
The results of the 2023 evaluation will form
the basis for the planning of the Board’s
work for the coming year. The Chairman of
the Board has reported the results of the
evaluation to the nomination committee.

Audit
The audit firm PricewaterhouseCoopers
AB (PwC), which has been Holmen’s audi-
tor since 2021, was re-elected as auditor
at the 2023 AGM for one year. Authorised
public accountant Magnus Svensson Hen-
ryson was appointed as the principal

↓ Members of the Board of Directors

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

Elected
1988
2009
2016
2019
2010
2004
2022
2015
2023
2014

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

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

Attendance at meetings in 2023:

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

Board of
Directors
11/11
4/11
11/11
11/11
11/11
11/11
11/11
11/11
7/11
11/11

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

Remuneration
committee
3/3
2/3
–
3/3
–
–
1/3
–
–
–

Fee for 2023
decided by AGM
(SEK ’000)
820
–
410
410
410
410
410
410
410
–

According to the nomination committee, Fredrik Lundberg, Lars Josefsson, Alice Kempe, Louise Lindh, Ulf Lundahl, Fredrik Persson, Henriette Zeuchner
and Carina Åkerström are independent of the company and its senior management, and Lars Josefsson, Ulf Lundahl, Fredrik Persson, Henriette
Zeuchner, Carina Åkerström and Henrik Sjölund are independent of the company’s major shareholders. Carl Bennet declined to stand for re-election
at the general meeting of shareholders of 28 March 2023 and Carina Åkerström was elected as a new Board member. Fredrik Persson succeeded
Carl Bennet as a member of the remuneration committee.

Employee representatives

Christer Johansson, member, elected 2017/Tommy Åsenbrygg, member, elected 2009/Ari Aula, member, elected 2022/Martin Nyman, deputy member,
elected 2021/Daniel Hägglund, deputy member, elected 2014/John Nyberg, deputy member, elected 2023.

Corporate governance report

Holmen Annual Report 2023

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.

auditor. PwC performs the audit for Hol-
men AB as well as for the majority of Hol-
men’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 com-
mittee are Ulf Lundahl, Chairman, Fredrik
Lundberg and Lars Josefsson. The audit
committee met five times. The audit com-
mittee’s task is to monitor the company’s
financial reporting and the efficiency of
the company’s internal control and risk
management. In 2023, the committee’s
duties were expanded to also include
reporting on sustainability matters, with
an initial focus on the preparations for the
new corporate sustainability reporting
directive, or CSRD. The audit committee
reviews and monitors the impartiality and
independence of the auditor. The commit-
tee also evaluates the auditor’s work and
submits proposals to the company’s
nomination committee for the election of
an auditor for the next mandate period.
The Board’s reporting instructions include
requirements that the members of the
Board receive a report each year from the
auditors confirming that the company’s
organisation is structured to enable
satisfactory supervision of accounting, of
the management of funds and of other
aspects of the company’s financial
circumstances. In 2023, the auditors
reported on their work to the audit com-
mittee 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 2023 is stated in Note 5 on page 74.
PwC is required to assess its independence
before making decisions on whether to
provide Holmen with independent advice
alongside its audit assignment.

Remuneration
The Board has appointed a remuneration
committee consisting of Fredrik Lundberg,
Fredrik Persson 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 remunera-
tion, share savings programmes and
short-term benefits. The committee also
examined remuneration structures, remu-
neration levels and methods for establish-
ing the Group’s wage 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 on
by the latter and approved by the remu-
neration 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 the remuneration
of members 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 the remuner-
ation of the CEO and other senior manage-
ment, i.e. heads of business areas and
heads of Group staffs who report directly
to the CEO, were adopted by the 2023
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.
The 2023 AGM approved the Board

Holmen Annual Report 2023

Corporate governance report

fees and payment of the auditors’ fee as
invoiced.
The 2022 AGM approved a new share
savings programme for key individuals in
the Group. The programme will expire
in April 2025. Its aim 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.

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 58.
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
discussions about governance of the Group
and the tools, such as the management-by-
objectives model and Group-wide policies,
used in such governance. In 2023, Group
management focused particularly on
analysing the future energy market in
Europe and its impact on the Group’s
competitiveness and activities. Group
management also devoted time to
exploring how Holmen can contribute
further to the European sustainability
objectives, and how changes in the rules
related to these objectives may affect
Holmen’s competitiveness.

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.
The strategy is adopted by the Board each
year and forms the basis for the expecta-
tions that are set. On the basis of these
expectations, each unit sets targets 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, through
which decisions are taken on the distribu-
tion of resources and targets for the
coming year are set. Use of a simple

management-by-objectives tool for con-
tinuous follow-up ensures that the entire
organisation is applying appropriate prior-
ities to attain the targets established.
The business areas guide the operating
activities towards these targets using
processes for purchasing, production and
sales, supported by financial management,
IT, HR, environmental, sustainability and
communication processes.
Activities are followed up through regu-
lar meetings with Group management and
the monthly reporting of performance and
KPIs that reflect business activity, along
with additional qualitative analyses.
Reporting of sustainability data is inte-
grated with the financial reporting. When
major investment decisions are under
consideration, financial, social and envi-
ronmental effects are taken into account.

Risk management. The Group’s business
and operational risks, and climate-related
risks and opportunities, are managed by
the various business areas. Each business
unit has its own processes for identifying,
assessing and responding to these risks
and opportunities. Material risks are
reported to Group management as part of
regular operational reviews.
Purchasing and IT infrastructure are
managed by Group-wide functions in
order to leverage economies of scale, and
risks are handled in line with the Group’s
policies. Group Finance manages the
Group’s financing and financial risks,
based on a finance policy that is estab-
lished by the Board and is characterised
by a low level of risk. Regulatory risks and
changes in external requirements driven
by sustainability matters are monitored
and dealt with by the Holmen Sustainability
Council, which is led by Holmen’s Senior
Vice President Technology (who is a
member of Group management) and
consists of a representative from each
Group staff and each business area.
For further information, see the Risk
management section on pages 49–53.

Code of Conduct. Holmen’s Code of
Conduct is in line with the UN Global

Compact, the International Labour
Organization’s (ILO) 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 above principles,
conventions and guidelines. Both Holmen’s
Code of Conduct and Supplier Code of
Conduct cover the areas of the prevention of
corruption, human rights, the work
environment and the environment.
While respecting human rights, Holmen
endeavours to ensure a workplace climate
that is founded on the equal value of all
people. All of Holmen’s employees should
have the same rights, obligations and
opportunities irrespective of their sex,
transgender identity or expression,
ethnicity, religion or other beliefs,
disabilities, sexual orientation or age.
Holmen is subject to the UK Modern
Slavery Act and a report relating to this
is available at holmen.com.

Policies. Holmen develops policies, guide-
lines and Group instructions to clarify how
employees should act within key and criti-
cal areas. The Group’s eleven policies cover
matters such as expectations of employee
participation and leadership, and specify
the framework for management by objec-
tives, talent management, interaction with
trade union organisations, equal treatment
and employment conditions. A good work
environment is also covered in terms of
health and safety, anti-corruption and com-
petition issues, and how good business
practice is maintained in dealings with
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 we should aspire to make
continuous improvements. Production
units must carry out a climate analysis risk

and prepare climate adaptation plans.
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
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.
Information communicated must be accu-
rate, transparent and easily accessible and
comply with legal requirements and com-
mercial confidentiality.
The policies, with the associated
guidelines and instructions, are available
to all employees on the Group’s intranet.
Policies considered to be of importance
for external stakeholders are published
on holmen.com.

Compliance. Holmen’s Code of Conduct,
policies and values are part of every
employee’s induction programme, and are
repeated through regular training. Compli-
ance is monitored for example through
employee surveys and appraisal talks, pay
surveys, safety statistics and audits of the
organisational and social work environ-
ment. The Board is informed of any
breaches 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, discrimination or other possible
areas of concern or improprieties at
the company. Two matters were raised
through this function in 2023. The matters
concerned work-related issues, which were
managed through ordinary procedures.

↓ Composition of the nomination committee

Before AGM:

Independent of the:

Name

Mats Guldbrand
Bo Selling
Fredrik Lundberg
Carl Kempe
Lars Ericson
Vegard Torsnes

Representing

2024

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

x
-
x
x

2023

x (Chairman)
-
x
x
-
x

Company

Largest shareholder
(in terms of votes)

Yes
Yes
Yes
Yes
Yes
Yes

No
No
No
Yes
Yes
Yes

* At 31 August 2023, L E Lundbergföretagen controlled 62.2 per cent of the votes, the Kempe Foundations controlled 17.5 per cent and Norges Bank controlled 1.9 per cent.

Corporate governance report

Holmen Annual Report 2023

Internal control of financial
reporting
The Board’s responsibility for internal
control and financial reporting is regulated
by the Swedish Companies Act and the
Swedish Corporate Governance Code.
Under this code, the Board is also
responsible for 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 below), to ensure that the company’s
assets are managed according to Group
rules and to prevent irregularities. Group
Finance coordinates and monitors the
internal control process for financial
reporting. Work was begun during the year
on including sustainability reporting in the
Group’s internal control work.
This work adheres to guidelines issued
by the Committee of Sponsoring Organiza-
tions of the Treadway Commission (COSO)
for internal control of financial reporting.
The framework comprises five basic
elements: the control environment, risk
assessment, control activities, informa-
tion and communication, as well as
monitoring activities and evaluations. The
framework has been modified to suit the
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
instructions for the CEO establish the
distribution of roles and responsibilities
to ensure effective control and
management of the business’s risks.

Policies, guidelines and instructions
contribute to making individuals aware
of their role in maintaining 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 may 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. In
2023, the analysis was expanded to also
cover risks related to the sustainability
reporting process.
Holmen’s greatest reporting risks are
linked to the valuation of forest assets,
pension obligations, provisions and finan-
cial transactions. The risk assessment also
includes the identification and evaluation
of operational risks, which are managed
through each business area’s management
system. For further information, see the
Risk management section on pages 49–53.

Control activities. To ensure that
Holmen’s financial reporting objectives
are met, control requirements are
incorporated in the processes that are
deemed relevant: sales, purchasing,
investments, employees, financial
statements, payments and IT. Control
activities aim to prevent, identify and
rectify errors and nonconformities.
Business-specific self-assessments that
are completed by all Group units set
out what control requirements apply for
each process and whether or not they are
being 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
to Holmen’s shareholders and other
stakeholders must be accurate, compre-
hensive, transparent and consistent, and
must take place on equal terms and at the
right time.

Follow-up and evaluation. Control activi-
ties are regularly assessed to ensure that
they are effective and appropriate. The
results of self-assessments are followed
up on a continuous basis and nonconform-
ities are reported half-yearly to the
Executive Vice President. The accuracy
of self-assessments is subject to testing.
Internal control reporting to Group
management takes place once a year.
The company’s auditors report their
observations from their internal control
review to the audit committee and Board
during the year.
Follow-up is an important tool for
identifying possible deficiencies within
the Group and for addressing 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, are
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 2023

Corporate governance report

Risk management

The Group’s business and operational
risks, as well as climate-related risks and
opportunities, 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 finance policy established by

the Board that is characterised by a low
level of risk. This aims to minimise the
Group’s cost of capital and ensure the
effective management and control of the
Group’s financial risks.

Operational risks

Risk

Risk management

Comments

Production and deliveries
Demand for Holmen’s products is affected by
macroeconomic and political factors, among
others, and the competitiveness of European
producers above all. Changes in demand affect
the ability to achieve full production at the
Group’s plants and can lead to lower income.
Income may also be impacted if the harvesting
of our own forests needs to be limited and by
variations in precipitation and wind, which
govern the production of 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 price
developments for input goods, as well as on
how well the Group succeeds in making its
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.

The production of paperboard and paper products
was curtailed in 2023 due to weaker economic
conditions and extensive destocking by customers.
For information about how changes in deliveries
would affect Holmen’s operating profit, given the
circumstances on 31 December 2023, see the
sensitivity analysis on page 53.

Paperboard prices were largely stable in 2023
after increasing the previous year. Paper prices
decreased from high levels. Wood product prices
stabilised after declining in 2022. The electricity
price decreased from historically high levels, but
continued to be volatile, which benefited hydro
power production. For information about how
changes in prices would affect Holmen’s operating
profit, given the circumstances on 31 December 2023,
see the sensitivity analysis on page 53.

The price of wood continued to increase in 2023,
while chemical costs stabilised at a high level. Due
to electricity price hedges and Holmen’s adapting
of its paper production to an environment with
volatile electricity prices, the increase in electricity
prices in 2022 and 2023 had a limited impact on
Holmen’s production costs. For information about
how changes in commodity prices would affect
Holmen’s operating profit, given the circumstances
on 31 December 2023, see the sensitivity analysis
on page 53.

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 our
ability to maintain a high level of production
amid more difficult market conditions.
Changes in demand for wood may be catered
for by moving the harvesting of our own forests
between years, while the production of hydro
power during the year can be controlled by
regulating water reservoir levels.

Holmen is limited in its ability 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 an offering across a number of
product areas. Changes in the price of wood
can be managed to some extent by moving
harvesting between years, and changes in the
price of electricity can be partly managed by
regulating water reservoir levels in order to
move electricity production over the year.

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’s position
when it comes to pulp is largely balanced 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 for this consumption is man-
aged 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
recovery 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.

Risk management

Holmen Annual Report 2023

Risk

Risk management

Comments

Suppliers
Deficiencies in the input supply chain 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 a further
risk of essential raw materials not being
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 may 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 a greater
loss of production than planned. Investments
in non-current assets may also be more costly
than initially planned.

IT systems
Efficient IT support is required to be able
to manage and plan production, 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 to maintaining its value. There is a risk
that the requirements for the forests to be used
as carbon sink may increase in the future. Such
a development could affect the ability to
manage the forests and therefore access to
raw materials. Required changes in forestry
methods could lead to reduced harvests and
increased costs.

Holmen endeavours to have at least two
approved suppliers per area of use. Holmen’s
Supplier Code of Conduct is included in all
new contracts. The Code contains sustainable
development requirements, including respecting
internationally recognised principles governing
the prevention of corruption, human rights, the
work environment and the environment. Since
2017, Holmen has engaged an external party,
EcoVadis, to monitor suppliers for their compli-
ance with the Code. Holmen is subject to the
UK Modern Slavery Act and a report on this is
available at holmen.com. Compliance with
silviculture contractor agreements is ensured
through site visits to forests. All silviculture
contractors are given annual training, through
the silviculture training programme, in silvicul-
ture, and in labour law, and are informed about
where to turn should irregularities occur.

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 employees promotes participation,
knowledge and awareness of these risks and
how they can be countered. Holmen’s facilities
are covered against damage from unforeseen
events by property and business interruption
insurance.

Operating disruptions and unauthorised access
are prevented by security measures and preven-
tive measures in the form of appropriate physical
protection, reliable server operation and secure
networks. Measures and procedures are in
place to minimise the risk of interruption and to
manage situations if interruptions occur. Holmen
is continually developing protective measures to
address changes in the risk profile.

Forest and land management are regulated both
nationally and at EU level. In order to be able
to engage in active and sustainable forestry, it
is important that laws and regulations do not
restrict the conditions necessary for sustaina-
ble operations. Holmen participates in national
and international industry organisations to
exert an influence on relevant political and
regulatory issues.

Damage to forests
Wild game can damage forests 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.

The Group’s forest holdings are not insured as
they are spread across large parts of Sweden
and the risk of extensive damage is not
considered to justify the cost of insurance. 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.

The supply chain risks relating to the climate,
environment, labour legislation, human rights,
business ethics and sustainable purchasing have
been mapped. The outcome is monitored through
EcoVadis, in discussion with the relevant suppliers.
In 2023, 1 (0) breach of the Supplier Code of
Conduct was reported. In the event of such
breaches of the Code, an active discussion with
an action plan is put in place in accordance with
Holmen’s procedures. Suppliers representing
90 per cent (88) of the Group’s purchasing volumes
comply with the principles of the Supplier Code of
Conduct. The largest suppliers of input products
are engaged in discussions on the reduction of
fossil fuel emissions.

At 31 December 2023, the Group’s trade
receivables totalled SEK 2 696 million (2 929), of
which 41 per cent (43) were insured against credit
losses. During the year, credit losses on trade
receivables had a SEK -2 million (0) impact on
earnings. Sales to the five largest customers
accounted for 14 per cent (14) of the Group’s total
sales in 2023.

Holmen continually invests in fire safety and
several facilities increased the areas covered by
sprinkler systems during the year. Planned
maintenance shutdowns are carried out each
year at the Group’s mills and sawmills to ensure
continued good production and high quality
products.

To make its systems and procedures secure,
Holmen has created a function focused on IT and
cyber security. A regularly recurring IT security
training course for employees was provided in
2023.

During the year, decisions have been made within
the framework of the EU’s Green Deal that, when
implemented in Sweden, risk limiting the ability to
manage the forests and therefore the contribution
to increased carbon storage and increasing
substitution. Holmen has continually played an
active part in discussions, both on its own and
through industry organisations, to influence the
EU’s position and the Swedish government’s
implementation planning, including by highlighting
the positive climate effects of a managed forest
and the substitution brought about by forest
products.

The spruce bark beetle infestation continued in
southern Sweden in 2023, but the damaged
volume represented a smaller percentage than
in 2022. To counter the spread, Holmen has
continued to prioritise the harvesting of 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 Annual Report 2023

Risk management

Risk

Risk management

Comments

Climate change
The Swedish Meteorological and Hydrological
Institute’s forecasts show that the average
temperature, precipitation and soil moisture
will increase in Sweden, which may entail
increased extreme weather risks, in the form of
fires, storms and flooding. A warmer climate
may also increase the risk of fungal attack and
insect damage in our forests, and affect our
ability to actively manage the forests due to
shorter periods where the soil is frozen or
stoppages due to a high risk of forest fires.
Changes in temperature, precipitation and
wind may also affect the production of hydro
and wind power.

Environment and permits
Holmen runs operations that require
environmental permits. The permits specify
conditions regarding permitted production
volumes and permitted emissions in the air
and water. Production disruptions can cause
breaches of emission conditions set for the
business by the environmental authorities.
Such breaches could affect the environment.
On sites where Holmen has conducted
industrial operations, the need for remediation
may entail future costs.

Work environment
Incidents and accidents in the workplace have
an effect on human life and health. This can
also lead to production disruptions and
increased costs.

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

Business ethics risks
Nationally and internationally, customers and
partners make demands of 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 the Group’s
reputation and business relationships.

External risks
Holmen operates 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 and pandemics. Moreover, Holmen is
obligated to comply with laws and regulations
wherever it 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.

As part of our forestry, ongoing climate risk
analyses and adaptation plans are carried out
to ensure healthy, resilient forests suited to
a changing climate. Holmen is developing
seedlings and planting, clearing, thinning and
harvesting processes that are adapted to a
warmer and damper climate. The risk of an
impact on Holmen’s plants from climate change
is being managed through the continuity plans
of each production facility. Holmen’s Group-
wide purchasing function conducts analyses of
climate risks in the supply chain.

A warmer climate could increase the growth of
our northerly forests, with a longer growth period,
more precipitation and higher levels of carbon
dioxide in the air, aiding photosynthesis. The
market’s ambitions to combat climate change
are increasing demand for Holmen’s products.
Holmen’s opportunity to manage its own forests is
thus crucial to our contribution to limiting climate
change. Increased demands to reserve land for
purposes other than forestry may lead to reduced
harvests and thus reduced opportunities for the
forest to contribute with renewable products.

Environmental measures are organised and
carried out in accordance with Holmen’s
environmental and energy policy. In the event
of process disruptions, the environment takes
precedence over production. Risks are prevent-
ed and managed through regular own checks,
checks by authorities and environmental risk
analyses, as well as through the use of certi-
fied environmental and energy management
systems and chain-of-custody certification. In
consultation with the authorities, Holmen is
conducting investigations to assess the need
for remediation at former industrial sites.

In 2023, 47 (45) 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 2023. Corrective measures were
taken to deal with these cases, in line with the
environmental management systems 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.

A safe work environment is a priority at all levels
of the Group. Certified management systems,
Group-wide targets relating to industrial
accidents, continual training of employees to
increase risk awareness, risk observation and
incident and accident reporting procedures, and
risk assessments of tasks and work by contrac-
tors, are examples of activities to achieve a high
level of safety in the workplace.

In 2023, the rate of industrial accidents was 5.2
per 1 million hours worked (7.6). Also see page 43.
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 on 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 career days and sponsorship collaborations,
are helping to increase awareness of Holmen
and attract and retain talented employees.

Annual questionnaires for new recruits and employee
surveys show that employees appreciate Holmen
as an employer. The percentage of employees who
would recommend Holmen as an employer is at a
persistently high level. In 2023, Holmen received the
accolades Karriärföretag (career company) 2023, and
came 16th in Universum’s ranking of Sweden’s Best
Employers (Sveriges Bästa Arbetsgivare).

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. Office-based employees
and managers at Holmen are trained in the
Code of Conduct every three years, and such
training was provided in 2023.

Holmen participates in national and interna-
tional industry organisations whose role is
monitoring social trends and advocacy work,
and that put forward Holmen’s position and
view on relevant political and regulatory issues.
Contact is established with local representa-
tives and the general public in areas where the
Group has operations. This takes place, for
example, through consultation and information
meetings, visits to sites and meetings with
decision-makers. More unforeseeable risks that
may arise, for example as a result of disease
outbreaks, war or political unrest, are managed
through ongoing external monitoring. To main-
tain optimum preparedness and active crisis
management, Holmen is engaged in close
dialogue and coordination with industry
organisations, customers and suppliers.

In 2023, no corruption-related adverse judgments
were delivered against the organisation or its
employees. There are also no such cases ongoing
in court. Two matters were raised with Holmen’s
whistleblowing service in 2023. These matters
were managed through ordinary procedures,
through which appropriate measures were
identified and taken.

Following the war in Ukraine, Holmen has taken a
number of measures to safeguard its raw material
supply, logistics and IT security. War between
Israel and Hamas also broke out during the year.
Holmen has marginal direct exposure to these
regions, but we are continually analysing the
external situation for short- and long-term
consequences. Holmen complies with any
sanctions adopted. Holmen has been active in
promoting the growth of sustainable energy
production and bio-based activities, through
dialogue, consultation responses, preparedness
and advocacy work, on its own and together with
industry organisations.

Risk management

Holmen Annual Report 2023

Financial risks

Risk

Risk management

Comments

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

Expected flows in EUR/SEK are hedged for just over
two years at an average rate of 11.05. For other
currencies, 4–8 months of flows are hedged.

Hedging of exposure to pounds sterling amounted
to GBP 130 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 of 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
consist of trade receivables and outstanding
orders. The Board may decide to hedge flows
for a longer period if this is deemed to be
appropriate in light of the products’ profitability
and competitiveness and the currency situation.
Currency exposure arising when investments are
paid for in foreign currencies is distinguished
from other transaction exposures. Normally,
90–100 per cent of the currency exposure
associated with major investments is hedged.

Translation exposure. The hedging of the
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 the net assets upon consolida-
tion. 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. The 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

12 month net flow
Hedged transaction exposure

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

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

Holmen’s average borrowing rate in 2023 was
2.7 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

SEK
EUR
GBP
Other items

1 005
130
-1 440
95

-1 400
0
0
0

-210

-1 400

0
0
0
0

-1
-8
0
0

-9

Right-
of-use
agreements

-187
-52
-7
-4

Total

-584
70
-1 447
91

-250 -1 869

Credit risk relating to 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 analy-
ses. A maximum credit risk and settlement risk
are established for each financial counterparty
and are continually monitored. The 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 deemed to correspond
to the nominal amount.

At 31 December 2023, the Group had outstanding
derivative contracts of a nominal amount of
SEK 16 billion and a net fair value of SEK 0.4
billion.

Holmen Annual Report 2023

Risk management

Risk

Risk management

Comments

Liquidity and refinancing
The risk that the need for future funding and
refinancing of maturing loans may have to be
met at a high cost.

Holmen’s strategy is to have a strong financial
position to give it room for manoeuvre when
making long-term business 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
issuing 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 its financing needs
over the coming years based on the Group’s
budget and profit forecasts, which are
regularly updated.

The cash flow was strong in 2023 and net financial
debt decreased to SEK 1 869 million, which is
equal to 3 per cent of equity. Financial liabilities
totalled SEK 3 182 million at the end of the year,
of which SEK 1 021 million are due for payment
in 2024, and financial assets totalled SEK 1 313
million, of which SEK 1 202 million consist of cash
and cash equivalents and current investments.

The Group has an unused contractually agreed
credit facility of SEK 4 billion that expires in 2027.
The facility includes a limit stipulating that it
cannot be used if the net liability to equity ratio
exceeds 125 per cent.

SEKm
5 000

4 000

3 000

2 000

1 000

2024

2025

2026

2027

≥2028

Credit facility
Financial liabilities

Sensitivity analysis

Operational risks

A 1 per cent change in deliveries and the price
of the Group’s products or significant input
goods is deemed to affect Group operating
profit as per the table on 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
2023, virtually all consumption was hedged.
For 2024, price hedges are in place covering
80 per cent of full production. 75 per cent is
hedged for 2025 and 30 per cent for 2026.

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

33
42
11
12
8

64
82
37
18
10

Price

43
1
21
8
20
33
23

* Taking electricity price hedges for 2024 into account. Without taking hedges into account, the corresponding
impact would be SEK 17 million.

Financial risks

The table on the right shows the extent of the
impact of any change in the Swedish krona, the
price of electricity or the market interest rate
on Group profit/loss 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 to be a reasonable change
going forward. The historical volatility of
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 the
profit/loss before tax by SEK 430 million a year.

Profit/loss 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 2024 including hedging.

SEKm

129
1
48
46
34
2

SEKm

582
18
70
180
8

Risk management

Holmen Annual Report 2023

shaReholdeR infoRmation

Holmen’s two classes of shares
are listed on Nasdaq Stockholm,
Large Cap. Over the past ten years,
Holmen’s total shareholder return
(dividends paid and share price
performance) has been 384 per
cent, compared with 150 per cent
for the OMX Stockholm 30. For
Holmen, this corresponds to
an annual return of 17 per cent.
The number of shareholders has
increased over the same period
from 25 000 to 53 300.

Stock exchange trading
Holmen was listed on the Stockholm Stock
Exchange in 1936, but was called Mo och
Domsjö AB at the time. Holmen’s two class-
es of shares are currently listed on Nasdaq
Stockholm, Large Cap. At the end of 2023,
Holmen A was trading at SEK 424 (424) and
Holmen B at SEK 426 (414), corresponding
to a market capitalisation of SEK 67.6 billion
(67.5). The highest closing price for
Holmen’s class B shares was SEK 459, on
3 February. The lowest closing price was
SEK 372, on 25 April. The daily average
number of class B shares traded was
737 000, which corresponds to a value
of SEK 305 million. The daily average
number of class A shares traded was 558.
29 per cent of trading took place on
Nasdaq Stockholm. Holmen shares are
also traded on other trading platforms,
such as Cboe BXE, LSE and Aquis.

Dividends
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 16 April 2024 approve an ordinary
dividend of SEK 8.5 per share and an extra
dividend of SEK 3.0 per share.

Share buy-backs
On 3 May, the Board decided to use the
authorisation from the 2023 AGM to buy
back own shares. A total of 2 779 323
class B shares were repurchased for
SEK 1 119 million, corresponding to an
average price of SEK 403/share. The buy-
backs amount to 1.7 per cent of the total
number of shares. The company already
owned 0.3 per cent of its own shares,
meaning that at 31 December 2023
Holmen held 2.0 per cent of the total
number of shares.
The Board proposes the renewal of its
authorisation to buy back up to 10 per
cent of the company’s shares by the
2024 AGM.

Share structure
After the share buy-backs, Holmen has
159 222 355 outstanding shares, of
which 45 246 468 class A shares and
113 975 887 class B shares. The company
also holds 3 289 969 repurchased class B
shares. 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.

Ownership structure
Holmen had a total of 53 344 shareholders
at year-end 2023. In terms of numbers,
Swedish private individuals account for
the largest owner category with 50 747
shareholders. Shareholders registered in

Sweden own 73 per cent (73) of the share
capital. Among foreign shareholders,
the largest proportion of shares are held
in Norway and the US, accounting for 8 per
cent and 7 per cent of the capital, respec-
tively. The largest shareholder at the turn
of 2023/2024, with 62.6 per cent of the
votes and 34.7 per cent of the capital,
was L E Lundbergföretagen AB.

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

Shareholder categories
Share of capital, %

Swedish institutions
Swedish equity funds
Swedish private individuals
Foreign shareholders

51%
10%
12%
27%

Share price performance
Holmen B and OMX Stockholm

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

Index

600

500

400

300

200

100

Number of shares (thousand)

50 000

40 000

30 000

20 000

10 000

15 16

19 20

Jan 24

Index
700

600

500

400

300

200

100

0
14

Jan 24

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 2023

Shareholder information

Earnings per share, SEK

Proposed dividend per share, SEK

23.0

8.5 +
3.0

Annual return at 31 Dec 2023*, %

1 year

3 years

5 years

10 years

Holmen B
OMX Stockholm 30

*Including reinvested dividends.

5
21

5
12

22
14

17
10

Holmen’s total shareholder return has averaged 17 per cent a year over the past 10 years, which is 7 percentage points
better than the OMX Stockholm 30.

Share capital structure

Equities

Votes No. of shares

No. of votes

10
1

45 246 468
117 265 856

162 512 324
-3 289 969

452 464 680
117 265 856

569 730 536
-3 289 969

159 222 355

566 440 567

A
B

Total no. of shares
Holding of repurchased
class B shares

Total number of outstanding
shares

Changes in share capital
2000–2023

Change in
no. of
shares

Total
no. of
shares

Change in
share
capital

Total share
capital,
SEKm

2001 Cancellation of repurchased
shares
2004 Conversion and subscription
2018 Share split
2020 Cancellation of repurchased
shares

-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*
31 Dec 2023

% of
capital

% of
votes

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

Total

Other

Total
Of which non-Swedish
shareholders

34.7
7.8
7.5
2.5
2.2
2.0
1.9
1.6
1.5
1.1

62.6
2.2
17.6
0.7
0.6
0.6
0.5
0.5
0.4
0.3

63.0

86.0

37.0

14.0

100.0
26.7

100.0
7.8

Shareholder statistics at 31 Dec 2023

Holding
classes,
no. of shares

1–1 000
1 001–100 000
100 001–

Total

No. of
shareholders

Share of
capital, %

49 505
3 753
86

53 344

4
11
85

100

Quotient
value

SEKm

26
26

1 180
3 058

4 238

* Calculated based on the total number of outstanding
shares. The 10 shareholders identified as having
the largest holdings in terms of capital. Some large
shareholders may have their holdings registered under
nominee names, in which case they are included in
‘Other shareholders’.

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

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

Diluted earnings per share, SEK1)

23.0

36.3

18.5

12.2

52.6

13.5

9.9

8.5

3.3

5.4

Dividends, SEK

Ordinary dividend, SEK

Extra dividend, SEK

Total dividends as % of:

Equity

Closing market price

Profit/loss for the year

Return on equity, %1)

Return on capital employed, %1) 3)

Equity per share, SEK

Closing market price, B, SEK

Average market price for year, B, SEK

Highest market price for year, B, SEK

Lowest market price for year, B, SEK

8.52)
3.02)

3.2

2.7

358

426

414

459

372

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

Total closing market capitalisation, ’000 SEKm

67.7

67.5

71.0

64.7

46.6

29.5

36.6

27.4

22.3

P/E ratio4)

EV/EBITDA3) 5)

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

0.74

0.75

0.78

0.77

0.74

0.72

0.68

0.71

Number of shareholders at year-end

53 344

52 701

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

1) See page 118: 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 return on class B shares relative to the return on the OMX 30
Stockholm over a period of 48 months.

Shareholder information

Holmen Annual Report 2023

Board of directors

1. Fredrik Lundberg

6. Louise Lindh

Employee representatives

Chairman. Djursholm. Born in 1951.
Member since 1988.
M.Sc. in Engineering, M.Sc. in
Economics and Dr h c mult. 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.
L E Lundbergföretagen’s shareholding:
55 244 000 shares.

2. Henrik Sjölund

Norrköping. Born in 1966.
Member since 2014. M.Sc. in
International Economics with
German. President and CEO.
Other significant appointments:
Board member of Skogsindustrierna,
SKGS and Svenskt Näringsliv.
Shareholding: 39 602 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.

4. Henriette Zeuchner

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

5. Ulf Lundahl

Lidingö. Born in 1952.
Member since 2004.
Bachelor of Law and M.Sc. in Economics.
Other significant appointments:
Chairman of Fidelio Capital AB.
Chairman of the credit committee of
Nordstjernan Kredit KB. Board member
of Indutrade AB.
Shareholding: 8 000 shares.

Stockholm. Born in 1979.
Member since 2010. M.Sc. in Economics.
Other significant appointments:
Chairwoman of Fastighets AB
L E Lundberg and J2L Holding AB.
Board member of Hufvudstaden AB
and L E Lundbergföretagen AB.
Shareholding: 200 000 shares.

10. Ari Aula

Norrköping. Born in 1967.
Member since 2023. Employee
representative, Swedish Trade Union
Confederation. Chairman of the
Swedish Paper Workers’ Union,
branch 53, in Braviken.

7. Fredrik Persson

11. John Nyberg

Stockholm. Born in 1968.
Member since 2022. M.Sc. in Economics.
Other significant appointments:
Chairman of BusinessEurope,
Ellevio AB and JM AB. Board member
of AB Electrolux, A Ahlström Oy,
Hufvudstaden, ICA Gruppen AB and
Interogo Holding AB.
Shareholding: 3 000 shares.

8. Carina Åkerström

Stockholm. Born in 1962.
Member since 2023. Legal counsel.
Other significant appointments:
Board member of World Childhood
Foundation, SkiStar and the Royal
Swedish Academy of Engineering
Sciences’ Business Executives Council.

9. Lars Josefsson

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.

Överklinten. Born in 1975.
Deputy member of Holmen’s
Board on a Swedish Trade Union
Confederation mandate, elected in
2023. Club chairman at Holmen’s
sawmill in Bygdsiljum.

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

13. Martin Nyman

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

14. Daniel HägglundÖrnsköldsvik.

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

15. Tommy Åsenbrygg

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

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

Holmen Annual Report 2023

Board of Directors

This information relates to personal and related party shareholdings at 31 December 2023.

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

Board of Directors

Holmen Annual Report 2023

Group manaGement

1. Henrik Sjölund
President and CEO
Born in 1966. Joined
Holmen in 1993.
Shareholding: 39 602
shares. Henrik Sjölund has
no material shareholdings
or ownership interests in
companies with which
the Group has significant
business relations. Further
information is provided on
page 56.

6. Lars Lundin*

Senior Vice President
Board and Paper
Born in 1966.
Joined Holmen in 2018.
Shareholding: 3 000 shares.

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

2. Anders Jernhall

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

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

3. Sören Petersson

9. Stina Sandell

Senior Vice President Forest
Born in 1969.
Joined Holmen in 1994.
Shareholding: 19 878 shares.

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

5. Johan Padel

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

Senior Vice President
Sustainability and
Communications
Born in 1966.
Joined Holmen in 2017.
Shareholding: 2 146 shares.

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

* On 31 January 2024, Holmen’s Board of Directors decided to bring the Group’s paperboard and paper operations together in a combined business area.
During 2023, Lars Lundin was Senior Vice President Paper and Johan Nellbeck was Senior Vice President Paperboard.

This information relates to personal and related party shareholdings at 31 December 2023.

Holmen Annual Report 2023

Group management

calendar and information

Dates of trading
and dividend

The last day for trading, including
dividend rights: 16 April 2024

Record date for dividend: 18 April 2024

Payment date for dividend: 23 April 2024

Information

Calendar

Holmen will publish the following
financial reports for 2024:

Interim report Jan–Mar: 26 April 2024
Interim report Jan–Jun: 15 August 2024
Interim report Jan–Sep: 24 October 2024
Year-end report: 31 January 2025

2024 AGM: 16 April 2024

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 documents:
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

Calendar and information

Holmen Annual Report 2023

Financial
statements

Income statement, SEKm

Net sales
Other operating income
Change in inventories
Raw materials and consumables
Personnel costs
Other operating expenses
Change in value of biological assets
Depreciation and amortisation according to plan
Impairment losses
Share in profits of associates and joint ventures
Operating profit/loss
Financial income
Financial costs

Profit/loss 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

2023

22 795
1 996
-79
-11 162
-3 312
-4 691
562
-1 360
-
6
4 755
49
-98

4 705
-1 008

3 697

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

3 697

5 874

23.0
23.0

160.5
160.5

36.3
36.3

162.0
162.0

Operating profit for 2023 amounted to SEK 4 755 million (7 527). The decrease in
profit is above all due to the weaker market for Wood Products and Paperboard.

Recognised tax totalled SEK -1 008 million (-1 567), corresponding to
21 per cent (21) of the profit/loss before tax.

Net financial items totalled SEK -49 million (-87).

Statement of comprehensive income, SEKm

Note

Profit/loss for the year
Other comprehensive income
Revaluation of forest land
Revaluations of defined benefit pension plans
Tax attributable to items that will not be reclassified to profit/loss for the year

Total items that will not be reclassified to profit/loss for the year
Cash flow hedges
Revaluation
Transferred from equity to the income statement
Transferred from equity to non-current assets

Translation difference on foreign operations
Hedging of currency risk from foreign operations
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 2023

Financial statements

9
18
7

2023

3 697

3 493
-6
-718

2 769

-815
-2 727
-6
55
-42
740

-2 795

-27

3 671

2022

5 874

4 373
-6
-899

3 469

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

2 469

5 938

11 812

3 671

11 812

Group

Balance sheet at 31 December, SEKm

Note

2023

2022

Non-current assets
Forest assets

Biological assets
Forest land

Non-current intangible assets
Property, plant and equipment
Right-of-use assets
Investments in associates
Other shares and participations
Non-current financial receivables
Deferred tax assets

Total non-current assets

Current assets
Inventories
Trade receivables
Current tax assets
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
Current provisions
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

19
20
7
20

30 555
25 793
513
10 330
244
1 686
5
61
3

69 190

4 837
2 696
114
1 630
50
1 202

10 529

79 719

4 238
281
20 667
31 738

56 923

1 902
160
9
418
13 858

16 347

1 021
91
31
3 394
105
1 808

6 449

22 796

79 719

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

Financial statements

Holmen Annual Report 2023

Reserves

Translation
reserve

Hedge
reserve

Revaluation
surplus

Retained
earnings incl.
profit/loss
for the year

76
-

-
-
-
72
-28
-
6

50
-
-

126
-

-
-
-
55
-42
9

22
-
-
-

148

718
-

-
-
3 037
-
-
0
-618

2 419

2 419
-
-

3 137
-

-
-
-3 549
-
-
731

-2 818

-2 818
-
-
-

320

13 953
-

27 725
5 874

4 373
-
-
-
-
-
-901

3 472

3 472
-
-

17 426
-

3 493
-
-
-
-
-720

2 774

2 774
-
-
-

-
-6
-
-
-
-
2

-4

5 870
-1 862
9

31 742
3 697

-
-6
-
-
-
1

-5

3 692
-2 592
-1 119
13

Total
equity

46 992
5 874

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

5 938

11 812
-1 862
9

56 950
3 697

3 493
-6
-3 549
55
-42
22

-27

3 671
-2 592
-1 119
13

20 199

31 738

56 923

Group

Changes in equity, SEKm

Opening equity balance 1 Jan 2022
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 from foreign operations
Share in joint ventures’ other comprehensive income
Tax attributable to other comprehensive income

Total other comprehensive income

Total comprehensive income
Dividends paid
Share savings programme

Closing equity balance 31 Dec 2022
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 from foreign operations
Tax attributable to other comprehensive income

Total other comprehensive income

Total comprehensive income
Dividends paid
Buy-backs of treasury shares
Share savings programme

Share
capital

4 238
-

Other
contributed
capital

281
-

-
-
-
-
-
-
-

-
-
-

-
-
-
-
-
-
-

-
-
-

4 238
-

281
-

-
-
-
-
-
-

-
-
-
-

-
-
-
-
-
-

-
-
-
-

Closing equity balance 31 Dec 2023

4 238

281

Holmen Annual Report 2023

Financial statements

Cash flow statement, SEKm

Operating activities
Profit/loss 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*

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
Repayment of long-term borrowings
Change in current financial liabilities
Repayment of debt related to right-of-use assets
Change in current financial receivables
Buy-backs of treasury shares
Dividends 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

Group

Note

2023

2022

25
25

4 705

1 360
-
-562
-12
-19
-160

5 311

11
899
-417

5 805

-1 497
15
-46
-162
38
0
0
-

-1 653

-1 000
-64
-114
0
-1 119
-2 592

-4 888

-736
1 935
3

1 202

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

* 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)
Buy-backs of treasury share
Dividends paid
Business combinations
Liabilities arising from new right-of-use agreements
Revaluations of defined benefit pension plans
Foreign exchange effects and changes in fair value

Closing net financial debt

2023

-2 145

5 805
-1 653
-1 119
-2 592
-
-117
-6
-43

-1 869

2022

-4 101

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

-2 145

Financial statements

Holmen Annual Report 2023

Parent company

Income statement, SEKm Note

2023

2022

Cash flow statement, SEKm Note

2023

2022

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/loss
Profit/loss from investments in
Group companies
Interest income and similar income
Interest expenses and similar expenses

Profit/loss after financial items
Appropriations

Profit/loss before tax
Tax

Profit/loss for the year

2
3

4
5

20 234
1 337
-81
-9 551
-2 706
-6 754

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

10, 11

-61

-56

2 419

5 012

6, 23
6
6

360
175
-176

2 778
190

2 968
-547

2 421

453
84
-88

5 459
-511

4 948
-930

4 019

Statement of
total 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

2023

2022

2 421

4 019

-6 162

6 401

2 727

-3 499

-16

706

-594

-2 723

-302

2 291

6 310

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/loss after net financial items includes the loss from the hedging of equity
in foreign subsidiaries of SEK -42 million (-28).

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

Depreciation and amortisation
according to plan
Change in provisions
Other*
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
Repayment of long-term borrowings
Change in other financial liabilities
Change in other financial receivables
Buy-backs of treasury shares
Dividends 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

2 778

5 459

61
15
230
-55

56
10
-357
-1 460

3 029

3 708

-89
806
-336

3 410

-1 073
-969
1 168

2 834

-102

-
-100
-

-151

-1 000
147
0
-1 119

-2 592
988
-367

-3 943

3
-157
26

-102

-500
267
0
-

-1 862
1 013
-322

-1 404

-684

1 329

1 774

445

1 090

1 774

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

Holmen Annual Report 2023

Financial statements

Parent company

Balance sheet at
31 December, SEKm

Non-current assets
Non-current intangible assets
Property, plant and equipment
Non-current financial assets
Shares and participations
Non-current financial receivables

Total non-current assets

Current assets
Inventories
Operating receivables
Current tax assets
Current investments
Cash and cash equivalents

Total current assets

Total assets

Note

2023

2022

Balance sheet at
31 December, SEKm

Note

2023

2022

10
11

13, 23
14

8
3 098

9
3 088

11 896
3 809

18 810

11 792
3 648

18 537

15
16
7
14
14

4 054
3 618
87
50
1 092

8 901

3 965
8 606
579
18
1 774

14 941

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

27 711

33 478

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

5 112
2 421

4 238
1 577
100

7 514
4 019

13 448

17 448

4 484

4 053

1
623
683

1 308

2 684
1 021
4 766

8 471

13
609
1 389

2 011

3 334
1 039
5 593

9 966

Total equity and liabilities

27 711

33 478

Changes in equity, SEKm

Opening equity balance 1 Jan 2022
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
Dividends paid
Share savings programme

Closing equity balance
31 Dec 2022
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
Dividends paid
Buy-backs of treasury shares
Share savings programme

Closing equity balance
31 Dec 2023

Share
capital

4 238
-
-

-
-
-

1 577
-
-

-
-
-

4 238
-
-

1 577
-
-

-
-
-
-

Restricted equity

Revaluation

Reserve

reserve Hedge reserve

Non-restricted equity
Retained
earnings

Profit/loss
for the year

Total equity

100
-
-

-
-
-

100
-
-

-
-
-
-

754
-
-

2 885

-594

2 291

2 291
-
-

3 045
-
-

-3 429

706

-2 723

-2 723
-
-
-

4 232
2 090
-

2 090
-2 090
4 019

2 090
-1 862
9

4 469
4 019
-

4 019
-2 592
-1 119
13

1 929
-
-

4 019
-4 019
2 421

-1 598
-
-
-

12 990
-
4 019

2 885

-594

2 291

6 310
-1 862
9

17 448
-
2 421

-3 429

706

-2 723

-302
-2 592
-1 119
13

4 238

1 577

100

322

4 790

2 421

13 448

Financial statements

Holmen Annual Report 2023

Note 1

Notes 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
of 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. Parent company equity

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

28. Events after the balance sheet date

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 and associates.

Compliance with standards and statutory requirements
The consolidated accounts have been 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 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 the preparation of 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’s accounts, biological assets and forest land are
not measured at fair value. Investments in Group companies and associates are
recognised in the parent company’s accounts 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 2023

Notes

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 expenses. The actual
outcome may deviate from these estimates and judgements.

These estimates and judgements are regularly reviewed. Changes in estimates
are recognised in the accounts for the period in which the change was made if
the change only affects that period, or in the period in which the change was
made and in later periods if the change affects current and future periods. Also
see Note 27 ‘Critical accounting estimates and judgements’.

Changes in accounting policies

New and amended accounting policies applicable as of 2023
The new and amended IFRSs applicable from 1 January 2023 do not have any
material impact on the company’s financial statements.

New and amended accounting policies not yet applied
The 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. This is 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
operating segment’s profit, assets and liabilities 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 a detailed
description of the classification and presentation of operating segments.

Consolidation principles

Subsidiaries
A subsidiary is a company over which the parent company, Holmen AB, exercises
a controlling influence. Potential shares with voting rights and whether de facto
control exists are considered when determining whether one company has
control over another.

The consolidated accounts have been prepared using the acquisition method.

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 has a
significant influence, are stated in the consolidated accounts in accordance with
the equity method.

The equity method. The Group’s share of the net earnings of associates after tax
attributable to the parent company’s owners, adjusted for any depreciation/
amortisation or reversals of negative or positive goodwill acquired, is stated in
the consolidated income statement as ‘Share of profits of associates’. Dividends
received from an associate reduce the book value of the investment.

When the Group’s share of the recognised losses of an associate exceeds the
book value of the investments stated in the consolidated accounts, the value of
the investments is written down to zero. The equity method is applied until such
time as the significant influence no longer exists.

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 rates prevailing on the balance sheet dates. 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 rates prevailing on the transaction dates.

Financial statements of foreign operations
The assets and liabilities of foreign operations, including any goodwill, both
positive and negative, are translated in the consolidated accounts, from the foreign
operation’s functional currency into the Group’s reporting currency, (Swedish
kronor) at the exchange rates prevailing on the balance sheet dates. 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 on the date
of each transaction. Translation differences arising during the 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. On 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 operat-
ing 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 that arise in the operations conducted by
the companies are recognised in Holmen AB’s accounts, except for most of the
investments made, as well as some sales of forest assets, which are instead
recognised in the accounts of some of the Group’s other subsidiaries.

Income
The Group’s sales mostly relate to goods sold to customers, which are 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 remuneration
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.

Note 1

The income is recognised when Holmen fulfils its commitment by transferring
control of the promised goods and, where applicable, services, to the customer.
The date of the transfer of control, and the transfer of risk, is critical to when
income 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
alongside production, when it is also recognised in income.

The Group’s business also includes wood construction solutions. Income from
this activity is treated as commercial construction contracts and recognised
over time, based on costs incurred in relation to the total estimated costs of the
project. Projects do not usually 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 each market.

Renewable energy certificates and guarantees of origin
Some of the Group’s renewal electricity production entitles it to renewable
energy certificates and guarantees of origin. These are recognised in income as
the eligible electricity production takes place, and provided that a sales contract
is signed with an external party.

Income from certificates and guarantees of origin granted related to hydro and
wind power production is recognised in net sales, and income from certificates
and guarantees of origin granted related to other forms of renewable electricity
production is recognised in other operating income.

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,
certificates for other forms of renewable energy, rent and land lease income,
emission allowances, insurance compensation and gains/losses on sales of non-
current assets.

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
systematically distributed in the income statement in the same way and over the
same periods as the costs the grants are intended to cover.

Financial income and expenses
Financial income and expenses consist of interest income and interest expenses,
dividend income and revaluations of financial instruments measured at fair
value, as well as unrealised and realised currency gains and losses.

Interest income on receivables and interest expenses on liabilities are
calculated using the effective interest method. Interest expenses include
transaction costs for loans that have been distributed over the duration of the
loans; this also applies to any difference between the funds received and the
repayment amounts. Dividend income is recognised when the dividend is
confirmed and the right to receive payment is judged to be certain.

Interest expenses are charged to 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 assets’ cost. A qualifying
asset is an asset that takes a substantial period of time to get ready for its intended
use and that is useful to the Group in connection with major investment projects.

Taxes
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, at 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 adjustments 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 the values for tax purposes of assets and liabilities,
applying the tax rates and rules that have been decided on or announced at the
balance sheet date. In the parent company’s accounts, untaxed reserves are
recognised including the deferred tax liability.

Notes

Holmen Annual Report 2023

Note 1

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. When calculating the diluted EPS,
the earnings and the average number of shares are adjusted to take account of
the effects of diluting potential ordinary shares.

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 it. 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. A financial
asset and a financial liability are only offset and recognised as 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.

Classification and measurement of financial instruments
Financial instruments are classified and measured based on the company’s
business model and the nature of the 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 an ongoing 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 distributed 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 the income statement.

Financial liabilities - are measured initially at the value of the funds received after
the deduction of any transaction costs. Normally, the liabilities are measured on
an ongoing basis at amortised cost using the effective interest method. In those
cases where the funds received fall short of the repayment amount, the difference
is distributed 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 the income statement.

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
may not be recovered, an individual assessment of each 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
the hedged item impacts the income statement. The accumulated changes in
value are then reclassified from equity to the income statement through other
comprehensive income, to charge them against the hedged transactions. When
investments are hedged, the cost of the hedged item is instead adjusted when it
is incurred. 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 operations
are recognised in other comprehensive income for the Group. Accumulated
changes in value are recognised as a component of 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’s accounts, changes
in value relating to hedges of net investments in foreign operations are recognised
in the income statement as hedge accounting is not used. Holmen’s cash

Holmen Annual Report 2023

Notes

flow hedges mainly relate to the hedging of sales in foreign currencies, future
interest payments, electricity purchases and purchases in foreign currencies in
conjunction with investments. Hedging instruments comprise forward foreign
exchange contracts, forward electricity contracts and interest rate swaps.

The hedged items consist of forecasts of future sales, interest payments, electricity
purchases and capital expenditures. The hedge ratio is set on an ongoing basis by
comparing the hedged amounts with actual forecasts. For the 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 the estimation of the hedge ratio. The
Group’s risk management of financial instruments is described on pages 52–53.

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
biological assets, and forest land. How much of the value is allocated to the
biological assets is established by calculating the present value of the cash
flows, less selling costs but before tax, expected from harvesting those trees
currently growing. When the present value is calculated, a discount rate before
tax is used, which is 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
proved to be less than its cost, the difference would be recognised in the income
statement as an impairment loss.

Recognition in the parent company’s accounts
In the parent company’s accounts, 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.

Non-current intangible assets
Non-current intangible assets, such as IT systems and right-of-use assets relating to
some energy assets, are recognised at cost after the 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, with the exception of goodwill. Non-current
intangible assets in the parent company’s accounts are amortised over five years.

Goodwill is allocated to cash generating units that are expected to benefit from
the effects of the acquisition. Goodwill is valued at cost less any accumulated
impairment losses. Goodwill arising in connection with the acquisition of associ-
ates is included in the book value of investments in associates.

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, the registration of legal rights, the amortisation of patents
and licences and borrowing costs in accordance with IAS 23. Other development
expenditure is recognised in the income statement as expenses when incurred.

Property, plant and equipment
Property, plant and equipment are stated at cost after the deduction of accumu-
lated depreciation and any impairment losses. Property, plant and equipment
that consist of parts with different useful lives are treated as separate compo-
nents of property, plant and equipment. Additional expenditure is capitalised
only if it is judged 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 when the replacement is made.

The book value of an item of property, plant or equipment is removed from the
balance sheet on the retirement or disposal of the asset or when no future
financial benefits can be expected from 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/expenses.

Depreciation according to plan is based on the 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 (in years) are used:
Machinery for hydro and wind 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 individual or inherently related assets is deter-
mined as the higher of the net realisable value and the value in use. The value in
use is measured as the 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 a
positive change in the circumstances upon which the determination of the recov-
erable 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 assets’ cost. A
qualifying asset is an asset that takes a substantial period of time to get ready for its
intended use and that is useful to 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 an associated liability upon entering into a lease agreement. 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 to be 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 an expense 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
optional exception 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 deductions for necessary
obsolescence, and net realisable value. The cost of inventories is calculated
using the first in, first out method (FIFO). The net realisable value is the
estimated selling price for the operating activity after the 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 in inventories. These have been acquired
with a view to meeting Holmen’s raw material requirements through harvesting.
No measurable biological change has occurred since the acquisition date.

Holmen receives a free allocation of emission allowances under the EU ETS.
The free allocation is recognised in inventories and in income during the year
of allocation for the emission allowances that are not needed to cover the
business’s emissions from its own activities, and provided that a sales contract
has been signed with an external party. Renewable energy certificates and
guarantees of origin received are recognised in inventories and income as the
eligible electricity production takes place, and provided that a sales contract
has been signed with an external party.

Note 1

Employee benefits

Pension costs and pension obligations
Obligations to pay premiums to defined contribution plans are recognised as an
expense 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. These benefits are discounted
to present value and the fair value of any plan assets is deducted. The discount rate
is the interest rate at the balance sheet date based on a selection of high quality
corporate bonds 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
defined benefit portion of the pension obligations.

The establishing of the obligations’ 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 comprehen-
sive income.

If any changes occur to a defined benefit plan, these are recognised when the
change to the plan occurs. If the changes occur in conjunction with restructuring,
they are 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, the book value of the asset
is limited to the lower of the plan surplus and the maximum value of the asset
calculated using the discount rate. The maximum value of the asset consists of
the present value of future economic benefits in the form of reduced future costs
or cash reimbursements. Any minimum funding requirements are taken into
account when calculating the present value of future reimbursements or receipts.

The interest expenses in respect of defined benefit obligations are recognised in
profit/loss for the year under financial items. They are calculated as the net total
of the upward adjustment of interest on the pension obligations and expected
income on plan assets calculated using the same interest factor (discount rate).
Other components are recognised in operating profit/loss. 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 is recognised in 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/loss for the year.

In the parent company’s accounts, different bases are used for the calculation of
defined benefit plans from those referred to in IAS 19. The parent company com-
plies 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 wage increases 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 consoli-
dated accounts for 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 settled through equity instruments. Recognition of
share-based payment programmes settled 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 shares to be allocated, and the effect of any change in
previous estimates is 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 savings 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 is used as the basis for the valuation of
the shares at the allocation date.

Notes

Holmen Annual Report 2023

Note 1

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 granted 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 rendered.

Equity
Consolidated equity comprises share capital, other contributed capital, the
translation reserve, hedge reserve, revaluation surplus 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 the
exchange differences arising in the translation of foreign operations’ financial
statements that have been 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 the hedging
of a net investment in a foreign operation, including tax. The hedge reserve
comprises the effective portion of the accumulated net change in the fair value of
cash flow hedging instruments attributable to underlying transactions that have
not yet occurred, including tax. The revaluation surplus comprises changes in
value attributable to forest land. Retained earnings comprise all the other
components of equity, including profit/loss for the year.

Holdings of repurchased shares are stated as a reduction in retained earnings.
Acquisitions of treasury shares are stated as a deduction, and proceeds from the
disposal of treasury shares are stated as an increase. Transaction costs are
charged directly to retained earnings.

The parent company’s equity comprises share capital, statutory reserves,
revaluation reserves, retained earnings and profit/loss for the year. The parent
company’s statutory reserve consists of previous compulsory provisions charged
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 the
other components of equity, such as hedge reserves and transactions as a result
of treasury 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.

Provisions are made for environmental measures that relate to earlier activities
when pollution 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’s accounts in accord-
ance 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 of whether the shares
need to be impaired. 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 the
equivalent. The absence of a value is indicated by a dash (-).

Holmen Annual Report 2023

Notes

Note 2. Operating segment reporting

Note 2

Forest Paperboard

Paper

Wood
Products

Renewable
Energy

Group-wide
and other

Eliminations Total Group

2 692
5 304
235
-7 194
562

-77

1 523

59 005
-2 220
-12 016

44 768

222

2 691
-
-
-
-
1
-
-

2 692

6 765
-
1 178
-7 087
-

8 200
-
342
-5 712
-

4 075
-
820
-4 706
-

1 063
7
31
-299
-

-664

-293

-184

-110

192

7 831
-1 054
-888

5 889

697

131
937
1 250
439
401
2 006
1 221
380

6 765

2 538

134

3 015
-956
-322

1 737

314

416
1 007
1 216
926
762
2 918
569
386

8 200

3 015
-720
-156

2 139

391

1 336
621
29
41
11
851
340
846

4 075

697

5 142
-338
-522

4 283

1 063
-
-
-
-
-
-
-

1 063

-
-
250
-420
-

-32

-202

1 011
-1 082
49

-22

-
-
-
-
-
-
-
-

-
-5 311
-861
6 172
-

-615
615
-

-
-
-
-
-
-
-
-

22 795
-
1 996
-19 245
562

-1 360

4 755

78 403
-5 755
-13 856

58 793

1 706

5 637
2 565
2 495
1 406
1 174
5 776
2 130
1 612

22 795

2023

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

Operating profit/loss

Operating margin excluding items
affecting comparability, %
Return on capital employed, excluding
items affecting comparability, %

Operating assets
Operating liabilities
Deferred tax, net

Capital employed

Acquisition of non-current assets

External net sales by market

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

Total

Net sales by market

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

Total

Group

Parent company

2023

5 637
2 565
2 495
1 406
1 174
5 776
2 130
1 612

2022

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

2023

5 670
1 845
2 062
1 229
1 027
4 839
2 070
1 492

2022

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

22 795 23 952 20 234 21 995

Net sales by product group

Consumer paperboard
Pulp
Paper
Wood products, pine
Wood products, spruce
Wood construction solutions
Wood
Electricity
Other

Group

Parent company

2023

2022

2023

2022

454

182

328

6 437 6 553 4 133 4 232
446
8 200 8 370 8 200 8 370
1 857 2 116 1 857 2 116
1 792 2 580 1 962 2 731
-
2 692 2 610 2 691 2 586
781 1 396
1 051 1 216
118
156
6

320

422

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

Non-current assets by country

2023

2022

2023

2022

Group

Parent company

Total

22 795 23 952 20 234 21 995

Sweden
UK
Other

Total

67 680 63 262 14 997 14 889
-
-

1 358
4

1 437
4

-
-

69 121 64 624 14 997 14 889

Notes

Holmen Annual Report 2023

Operating profit/loss

1 401

1 347

2 714

1 237

Notes 2–3

Note 2. Operating segment reporting, cont.

2022

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

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

Acquisition of non-current assets

278

555

186

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

Forest Paperboard

Paper

Wood
Products

Renewable
Energy

Group-wide
and other

Eliminations Total Group

2 610
4 732
367
-6 643
509

-87
-87

6 735
-
1 820
-6 610
-

-599
-

8 370
-
314
-5 651
-

-319
-

5 015
-
605
-4 181
-

-204
-

1 222
4
152
-273
-

-106
-

1 006

1 401

1 081

2 714

1 237

1 006

54 499
-2 015
-11 130

41 354

7 792
-1 263
-897

5 632

139

3 242
-1 003
-301

1 939

2 944
-749
-128

2 067

122

1 794
45
646
52
17
1 092
409
959

5 015

6 101
-1 110
-372

4 618

237

1 222
-
-
-
-
-
-
-

1 222

-
-
222
-370
-

-30
-

-178

5 888
-1 744
-660

3 485

-
-
-
-
-
-
-
-

-
-4 737
-737
5 473
-

-
-

-1 083
1 083
-

-
-
-
-
-
-
-
-

23 952
-
2 743
-18 255
509

-1 345
-87

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).

The Forest business area manages the Group’s forests, which cover just over one
million hectares. The annual harvest of own forests usually 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 for books, packaging and graphical publications at two Swedish
mills. The Wood Products business area produces wood products at five sawmills,
for use in joinery and construction. In 2023, the Group produced just over
0.4 million tonnes of paperboard, 0.9 million tonnes of paper and 1.5 million m3
of wood products.

The Renewable Energy business area is responsible for the Group’s hydro power
and wind power assets. Deliveries in 2023 amounted to 1.7 TWh of renewable
hydro and wind power electricity and include wind power electricity bought from
a 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 constitute their capital employed. Group management monitors the
business at operating profit level, and in terms of earnings relative to capital
employed. The capital employed in each segment includes all the 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 based 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

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

Group

Parent company

2023

2022

2023

2022

783
15
557
235
7
48
113
238

849
34
433
284
489
150
91
413

631
43
0
272
2
47
113
229

548
7
1
251
1
73
91
289

Total

1 996

2 743

1 337

1 262

Holmen Annual Report 2023

Notes

Of the sales of by-products in the consolidated accounts, SEK 178 million (178)
relate to rejects from production, SEK 339 million (226) to wood shavings, bark
and chips, as well as SEK 266 million (445) to external sales of energy.

Renewable energy certificates mainly relate to allocations for production at the
UK paperboard mill in Workington. The Group has been allocated emission
allowances that have been partly used for its own production. The surplus
resulted in a recognised gain of SEK 235 million (284).

Note 4

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

Wages, salaries and social
security costs

Wages and other remuneration
Social security costs

Group

Parent company

2023

2 311
922

2022

2 048
856

2023

1 841
803

2022

1 662
760

The AGM’s guidelines for determining wages and other
remuneration for senior management
The 2023 AGM decided on the following guidelines for determining the wages
and other remuneration of the CEO and other members of senior management,
namely the heads of the business areas and heads of Group staff who report
directly to the CEO. The guidelines will apply to remuneration agreed after
the guidelines were adopted by the 2023 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 transformed
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.

The company must be able to attract the right employees to be able to
successfully implement the company’s business strategy, long-term interests
and sustainability. These guidelines are 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 programmes 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 programmes.

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 wage, 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 wage. It should be possible to measure compliance with the criteria
for the payment of variable remuneration annually, under normal circumstances.

Other benefits may include such items as health insurance, and housing and car
allowances. Where such benefits are provided, they should constitute no more
than 10 per cent of the fixed wage.

The retirement age should usually be 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 wage.

Notice and severance pay
The period of notice should be 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’ wages.

Consideration of wage and employment conditions for other employees
In formulating its proposals for these remuneration guidelines, the Board took
into account the wage 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 rate of
increase over time, in the basis for decision-making when 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
members of senior management. Under Chapter 8, § 51 of the Swedish Companies
Act, the Board must prepare 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 guidelines 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.

Deviations 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 a deviation
is necessary in the long-term interests of the company, including its sustainabil-
ity, or to ensure the company’s financial viability.

Share savings programme
The 2022 AGM approved a share savings programme reserved 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 will vary depending on the
participant’s position and will range 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. 69 people are taking part in the programme
and the maximum number of shares that may be allocated is calculated at
78 000. Costs of SEK 16 million (17) have been recognised for 2023.

In 2022, the share savings programme reserved for key individuals in the Group
that the 2019 decided on (‘LTIP 2019’) came to an end. 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 half a 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
included 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.

Remuneration of the Board and members of the
senior management

Board of Directors
A fixed Board fee is paid to the members of the Board elected by the AGM.
The CEO, however, does not receive a Board fee. For 2023, fees to the Board
amounted to SEK 3 690 000 (3 510 000). The Chairman of the Board received a
fee of SEK 820 000 (780 000), and each of the other seven (seven) members
received SEK 410 000 (390 000).

Senior management
Wages, variable remuneration and other benefits for the CEO in 2023 amounted
to SEK 17 013 054 (10 753 215), of which SEK 11 040 000 (10 320 299)
relates to fixed wages, SEK 5 520 000 (-) to variable remuneration and 453 054
(432 916) to other benefits. Variable remuneration consists of the short-term
incentive programme for 2023 that will be paid out in 2024. In addition to wages,
variable remuneration 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 in 2023. The total
pension cost for the CEO amounted to SEK 6 171 350 (6 140 673), of which
SEK 2 888 318 (3 091 230) relates to the recognised cost of an option to retire
before the usual retirement age. The recognised payroll cost for share savings
programmes for the CEO amounted to SEK 2 032 526 (1 288 276).

In 2023, the wages, variable remuneration and other benefits for the other
members of 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 40 501 166
(30 309 270), of which SEK 29 739 862 (29 196 504) relates to fixed wages,
SEK 9 548 400 (-) to variable remuneration and SEK 1 212 904 (1 112 766) to

Notes

Holmen Annual Report 2023

Notes 4–5

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

Pension obligations in respect of senior management
Holmen’s defined benefit pension obligations for the CEO amounted to
SEK 40 million (32) at 31 December 2023 and, for the other members of senior
management, to SEK 30 million (27), calculated in accordance with IAS 19. The
obligations relate to the costs that would arise if the CEO and three members of
senior management retired before ordinary retirement age based on agreements
entered into in accordance with the applicable guidelines for remuneration for
members of senior management. The pension obligations are secured by plan
assets managed by an independent pension fund.

other benefits. Variable remuneration consists of the short-term incentive
programme for 2023 that will be paid out in 2024. In addition to wages,
variable remuneration 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 share savings
programmes in 2023. The total pension cost for this group amounted, in 2023, to
SEK 10 597 299 (12 759 263). The recognised payroll cost for share savings
programmes for this group amounted to SEK 3 873 303 (2 313 342).

For members of 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’ wages is paid. These
terms apply to the CEO and eight other 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 correspond-
ing to up to two years’ wages is paid, depending on age.

All members of senior management are employed by the parent company.

Average no. of employees (FTE)

Parent company
Sweden

Group companies
France
Netherlands
UK
Sweden
Germany
US
Other countries

Total Group companies

Total Group

Average no.
of employees

Of which
women

2023

Of which
men

Average no.
of employees

Of which
women

2022

Of which
men

2 923

13
75
407
58
22
8
41

623

3 546

660

5
44
44
13
7
3
15

131

792

2 263

2 863

8
31
364
44
15
5
26

492

12
79
395
47
22
8
40

603

2 755

3 466

597

6
45
41
9
8
3
16

128

725

2 266

6
34
354
38
14
5
24

475

2 741

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

2023
33
18

2022
25
18

2023
33
18

2022
25
18

Note 5. Auditors’ fee and remuneration

The audit firm PricewaterhouseCoopers AB (PwC), which has been Holmen’s
auditor since 2021, was re-elected as auditor at the 2023 AGM for a period of
one year. PwC performs the audit for Holmen AB as well as for the majority of
Holmen’s subsidiaries.

‘Audit assignments’ refers to the statutory examination of the annual accounts and
accounting records, and of the administration by the Board and the CEO, and the
auditing carried out 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 as a result of observations in connection with such reviews or
the performance of such other duties. ‘Tax advice’ refers to all consulting in the
field of taxation.

Remuneration of auditors

Audit assignments, PwC
Tax advice, PwC

Total

Other auditors

Total

Group

Parent company

2023

2022

2023

2022

9
1

8
0

6
1

6
0

Holmen Annual Report 2023

Notes

Note 6. Net financial items and income from financial instruments

Note 6

Financial income

Dividend income from
Group companies
Gains on sales of Group companies
Gains on sales of associates
Interest income*

Total financial income

Group

Parent company

2023

2022

2023

2022

-
-
-
49

-
-
1
11

348
-
-
175

535

446
25
1
84

536

*SEK 49 million (11) relates to interest income from financial items valued at
amortised cost, calculated using the effective interest method.

Financial costs

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 expenses attributable
to right-of-use agreements
Interest expenses*

Financial costs

Net financial items

Group

Parent company

2023

2022

2023

2022

17
1

-16

-7
-93

-98

-49

-26
-12

-29

-5
-65

-99

-87

-12
0

-16

-29

0
-136

-176

359

-2
-12

-7

-
-82

-88

448

* SEK -19 million (-7) relates to interest expenses for derivatives measured at fair
value through other comprehensive income. SEK -2 million (-2) relates to interest
expenses for derivatives recognised at fair value through profit/loss for the year.
The remaining interest expenses are calculated using the effective interest method
and relate to financial items valued at amortised cost.

Net gains and losses recognised in net financial items mainly relate to currency
revaluations of internal lending and hedging of internal lending. The parent
company’s net financial items also include currency revaluations of forward
contracts that hedge net investments in foreign operations, which are
recognised in the consolidated accounts under other comprehensive income.
The fair value of the interest component of forward foreign exchange contracts
as well as changes in the value of the accrued interest and realised interest
component of fixed interest rate swaps are recognised on an ongoing basis in net
interest items. Information on financial risks is provided in the section on risk
on pages 52–53.

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

Exchange gains/losses on trade
receivables and trade payables
Net gain/loss from derivatives
recognised in operating profit/loss

Group

Parent company

2023

2022

2023

2022

459

204

449

199

536

2 703

215

2 775

The derivatives included in operating profit/loss relate to currency hedges of
trade receivables and trade payables as well as financial electricity derivatives.

Gains and losses on currency hedges are recognised in operating profit/loss
when the hedged item is recognised and in 2023 amounted to SEK -477 million
(-341), the remainder being recognised in other comprehensive income as
hedge accounting is applied. The fair value of outstanding currency hedges at
31 December 2023 was SEK 64 million (-499).

Gains/losses on financial electricity hedges are recognised in the income
statement when they expire; for 2023 they totalled SEK 872 million (3 043).
The fair value of outstanding financial electricity hedges at 31 December 2023
was SEK 302 million (4 366). The change in fair value is recognised in other
comprehensive income as hedge accounting is applied.

The change in the fair value of hedges of 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 of investment purchases amounted to SEK -8 million (7) at 31 December
2023. In 2023, there was a SEK 12 million (16) impact on the cost of asset due to
gains/losses from hedges.

The result from the hedging of foreign net assets amounted to SEK -42 million
(-28) in 2023 and was recognised in other comprehensive income as hedge
accounting was applied. In the parent company’s accounts, this result is
recognised in the income statement. The translation of foreign net assets had an
impact of SEK 55 million (72) on consolidated equity. The fair value of outstanding
hedges of net assets at 31 December 2023 was SEK43 million (14) and relates to
financial derivatives.

The fair value of the derivatives used to manage fixed interest rate periods
amounted to SEK 45 million (78) at 31 December 2023, which was recognised
in other comprehensive income as hedge accounting was applied. This value is
expected to be recognised in the income statement in 2024 and later.

Notes

Holmen Annual Report 2023

Note 7

Note 7. Tax

Taxes stated in the
income statement

Current tax
Deferred tax

Total

Group

Parent company

Recognised tax totalled SEK -1 008 million (-1 567), corresponding to
21 per cent (21) of the profit/loss before tax.

2023

2022

2023

2022

-655 -1 138
-429
-353

-1 008 -1 567

-546
0

-547

-921
-9

-930

Taxes stated in the income statement

Recognised profit/loss before tax

Tax at applicable rate
Difference in tax rate for foreign operations
Tax-exempt income
Non-tax-deductible costs
Standard interest on tax allocation reserve
Tax attributable to previous periods
Other

Effective tax

Tax attributable to other
comprehensive income

Cash flow hedges
Translation difference on
foreign operations
Hedging of currency risk from
foreign operations
Revaluations of forest land
Revaluations of defined benefit
pension plans

Other comprehensive income

Group

Parent company

2023

2022

2023

2022

SEKm

4 705

-969
-9
9
-22
-16
11
-12

-1 008

20.6
0.2
-0.2
0.5
0.3
-0.2
0.3

21.4

SEKm

7 441

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

-1 567

SEKm

2 968

20.6
-0.1
-0.3
0.4
0.0
-0.1
0.5

21.0

-611
-
83
-12
-16
10
0

-547

20.6
-
-2.8
0.4
0.5
-0.3
0.0

18.4

SEKm

4 948

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

-930

20.6
-
-2.1
0.2
0.0
0.0
0.1

18.8

Before
tax

Tax

2023

Group

After
tax

Before
tax

Tax

2022

After
tax

Before
tax

Tax

2023

Parent company

After
tax

Before
tax

After
tax

Tax

2022

-3 549

731 -2 818

3 037

-618

2 419 -3 429

706 -2 723

2 885

-594

2 291

-42
3 493

9
-720

-33
2 774

-28
4 373

6
-901

-22
3 472

-
-

-6

-48

-5

-27

-6

-4

7 449 -1 512

5 938 -3 429

706 -2 723

2 885

-594

2 291

Taxes as stated in the
balance sheet

Tax receivables
Deferred tax assets
Current tax assets

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 of deferred tax liabilities

Group

Parent company

2023

2022

2023

2022

3
114

117

2
589

592

6 294
5 272
1 210
932

6 153
4 553
1 143
850

789

-
87

-
601
3
-

-4

-
579

579

-
601
3
-

790

-4

Deferred tax liabilities

13 858 13 490

683

1 389

Current tax liabilities

Total tax liabilities

105

118

13 963 13 608

683

1 389

Holmen Annual Report 2023

Notes

Notes 7–8

Closing
balance

-
-601

-3
-

-83
4

-683

Closing
balance

-
-601

-2
-

-789
3

-
-

-593
-

Parent company

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

-
-601

-2
-

-789
3

-
0

0
-

-
0

-
-

706
-

706

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

Group

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

Translation
differences
and other

-6 153
-4 553

-1 143
-850

-789
0

-142
1

-68
-82

-
-63

-13 488

-353

-
-720

-
-

706
1

-12

Group

-
0

1
-

-
-3

-3

Closing
balance

-6 294
-5 272

-1 210
-932

-83
-65

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

Translation
differences
and other

Business
combina-
tions

-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

-13 856

-1 389

Closing
balance

-6 153
-4 553

-1 143
-850

-789
0

-
-

39
-

-
7

2023

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

Deferred net tax
liability

2022

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

Deferred net tax
liability

Parent company

Stated
in the
income
statement

Stated in
other com-
prehensive
income

Opening
balance

-
-601

-2
-

-196
11

-787

-
0

0
-

-
-9

-9

-13 488

-593

-1 389

The Group’s deferred tax liability for forest assets (biological assets and forest land)
amounts to SEK 11 566 million (10 706) and is calculated based on the difference
between the book value of SEK 56 348 million (52 151) and taxable cost of
SEK 203 million (181). 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.

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

The 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 (1), of which
SEK 50 million (51) of deferred tax assets and SEK -51 million (-50) 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 -720 million (-901) and a hedge reserve of SEK 706 million (-593).

Note 8. Earnings per share

The Group is covered by the OECD’s Pillar Two model rules and legislation has
been adopted in Sweden that will come into force on 1 January 2024. According
to Holmen’s evaluation of the legislation, the Group should not need to pay
additional tax because of Pillar Two.

Group

2023

2022

Total number of outstanding shares,
1 January
Share savings programme allocation
Buy-backs of treasury shares during
the year

Total number of outstanding shares,
31 December

162 001 678
-

161 925 685
75 993

-2 779 323

159 222 355

162 001 678

The 2022 AGM decided on a share savings programme. The new programme
may lead to the allocation of 78 000 shares from Holmen’s own holding of
shares. The effects on key figures and earnings per share are marginal.
See Note 4 for more information about the share savings programme.

On 3 May, the Board decided to use the authorisation from the 2023 AGM
to buy back treasury shares. During the year, 2 779 323 class B shares were
repurchased for SEK 1 119 million, corresponding to an average price of
SEK 403/share. The buy-backs amount to 1.7 per cent of the total number of
shares. When combined with the shares that it already owned, this means that at
31 December 2023 Holmen held 2.0 per cent of the total number of shares.

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

3 697 317 688 5 874 297 908
161 975 028

160 470 138

Basic EPS for the year, SEK

23.0

36.3

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

3 697 317 688 5 874 297 908
161 975 028

160 470 138

Diluted EPS for the year, SEK

23.0

36.3

Notes

Holmen Annual Report 2023

Note 9

Note 9. Forest assets

Holmen owns land totalling 1 305 000 hectares, of which 1 046 000 hectares are
defined as productive forest land with an estimated volume of standing timber of
126 million cubic metres (m3) growing stock, solid over bark. The holdings are
spread over three regions of Sweden.

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

76
36
14

126

Productive
forest land,
’000 ha

690
264
92

1 046

North
Central
South

Total

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 valuations based partly on
price statistics published by various market
participants, and partly on detailed
information regarding forest property
transactions over the past three years.
The price statistics refer to the SEK per m3
growing stock, solid over bark, which are paid on average in the various counties
in Sweden where Holmen has land. The calculation using forest property
transactions 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 reg-
istration 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 calculation of 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 was used, the book value would be affected.

Market data

Number of
transactions
Average size of
property (ha

2023*

2022

2021

2020

2019

192

131

370

142

308

140

263

117

246

122

*The number of transactions for 2023 is not comprehensive as there is a certain
time lag in the collection of data.

The book value of forest assets amounted to SEK 56 348 million (52 151) at
31 December 2023. The value per hectare varies between different parts of the
country, 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, SEK/hectare

140 000

120 000

100 000

80 000

60 000

40 000

20 000

2019

2020

2021

2022

2023

Northern Sweden

Central Sweden

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 transac-
tion 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

760
360
140

450

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
inventory date. 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 in 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 2023.

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

160

120

1988

1993

2000

2010

2020

2023

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

Book value, SEKm

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

60 000

40 000

20 000

2019

2020

2021

2022

2023

1 000

750

500

250

2015

2016

2017

2018

2019

2020

2021

2022

2023

Northern Sweden

Central Sweden

Southern Sweden

Northern Sweden

Central Sweden

Southern Sweden

Holmen Annual Report 2023

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
2023, the entire forest holdings had been 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 30 555 million), which are recognised as biological assets, and forest land
(SEK 25 793 million).

Biological assets
The value allocated to 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, on average, 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 expenses are calculated based on long-term trend levels. The trend
level was adjusted in 2023 due to significant price and cost inflation. The
adjustment has not affected the book value. The trend price used for 2024 is
SEK 555/m3sub (488), which is a little over 15 per cent lower than current prices.
The trend costs represent 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 harvesting have
not been included.

The change in value of biological assets, calculated net of the change due to
harvesting and the unrealised change in fair value, is stated in the income
statement and in 2023 totalled SEK 562 million (509).

Wood prices, SEK/m3sub

700

600

500

400

300

200

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2006

2008

2010

2012

2014

2016

2018

2020

2004

2002

2022

2023

Real

Nominal

Note 9

Harvesting plan, ’000 m3sub/year

3 500
3 000

2 500

2 000

1 500

1 000

500

2004–
2008

2009–
2013

2014–
2018

2019–
2023

2024–
2028*

2029–
2033*

2034–
2038*

2039–
2043*

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

+1%

Harvest
Prices
Costs

Discount rate

+0.1%

SEKm

1 220
1 730
-810

380
580
-290

-870

The 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 calcula-
tions. Change in level means that the level for each parameter and year is
changed. 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).

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 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 harvesting of currently standing trees, such
as the leasing of land for wind power, quarrying, hunting leases, licence income
and the harvesting of future generations of trees.

The change in fair value for forest land is recognised in other comprehensive
income and totalled SEK 3 493 million (4 373) in 2023. No value is assigned to
land that is not productive forest land.

Group

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

The cost of forest land amounted to SEK 354 million at 31 December 2023.

Of which

Forest assets

Biological assets

Forest land

2023

52 151
33
-36
145
-977
5 032
0
56 348

2022

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

2023

29 867
17
-36
145
-977
1 539
0
30 555

2022

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

2023

22 284
16
0
-
-
3 493
0
25 793

2022

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

Notes

Holmen Annual Report 2023

Notes 10–11

Note 10. Non-current intangible assets

Group

Other intangible
assets

Total

Parent company

Non-current
intangible assets

Goodwill

2023

2022

2023

2022

2023

2022

2023

2022

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 for the year
Reclassifications
Disposal and retirement of assets
Impairment losses
Translation differences

Total

358
-
-
-
-
-

358

-
-
-
-
-
-
-

358
-
-
-
-
-

358

-
-
-
-
-
-
-

Residual value according to plan at end of year

358

392
-
46
64
-63
0

438

323
-
9
15
-63
-
0

283

155

384
4
6
-
-1
0

392

203
1
32
-
-1
87
0

323

750
-
46
64
-63
0

797

323
-
9
15
-63
-
0

283

513

742
4
6
-
-1
0

750

203
1
32
-
-1
87
0

323

427

67
-
-
-
0
-

58
-
1
-
0
-
-

68
-
-
-
-1
-

55
-
4

-1
-
-

The goodwill recognised is attributable to the Wood Products business area, and was added when Martinsons was acquired in 2020. 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 IT systems, amounting to SEK 89 million (2), and the value of the right of use relating to certain energy assets, amounting to
SEK 58 million (60). 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

2023

2022

2023

2022

2023

2022

2023

2022

6 845
-
155
17
-5
10

7 022

4 234
-

138
2
-5
7

4 376

2 646

6 512
109
65
158
-18
19

6 845

32 839
-
1 084
284
-308
64

33 963

31 352
588
829
157
-223
136

32 839

4 059
43

25 706
-

24 456
257

1 098
79
-298
53

1 088
-
-198
103

26 638

25 706

134
-
-15
13

4 234

2 612

381
-
256
-269
-17
7

359

-
-

-
-
-
-

363
-
332
-316
-
1

381

-
-

-
-
-
-

40 065
-
1 494
32
-330
82

41 344

29 940
-

1 236
81
-304
60

31 014

10 330

38 227
697
1 226
-
-241
156

40 065

28 515
300

1 222
-
-213
116

29 940

10 124

7 325

7 132

359

381

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
Reclassifications
Disposal and retirement of assets
Translation differences

Total

Residual value according to plan at end of year

*Other land refers to land other than forest land.

Holmen Annual Report 2023

Notes

Notes 11–12

Parent company

Accumulated acquisition costs
Opening balance
Investments
Reclassifications
Disposal and retirement of assets

Total

Accumulated depreciation and
amortisation according to plan
Opening balance
Depreciation and amortisation
according to plan for the year
Reclassifications
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

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

499
3
-
0

502

-
-
-

499
-
-
-

499

-
-
-

215
6
7
0

228

203
7
6
-

215

148

143

5
-
0

153

148

2 388
-6

2 382

2 388
-

2 388

1
-

332
65
32
-22

407

210

54
32
-22

273

-
-

306
58
-
-32

332

194

48
-
-32

210

-
-

2 884

2 887

134

124

9
4
-7
-2

-
-
-

-
-

15
1
-6
-

1 055
78
32
-25

1 141

1 024
66
-
-32

1 055

-
-
-

-
-

357

59
32
-22

426

336

53
-
-32

357

2 388
-6

2 382

2 388
-

2 388

3 098

3 088

For forest assets in the Group see Note 9. In 2023, capitalised borrowing costs totalled SEK 3 million (0). An interest rate of 1.5 per cent (1.2) was used to determine the
amount.

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

Group

Accumulated acquisition costs
Value at beginning of year
Additional leases
Completed leases

Total

Accumulated depreciation and amortisation
Value at beginning of year
Depreciation and amortisation for the year
Completed leases

Total

Value at end of year

Buildings

Machinery and equipment

Total

2023

2022

2023

2022

2023

2022

257
33
-7

283

96
51
-7

140

143

261
19
-23

257

77
42
-23

161

172
84
-33

223

91
64
-33

122

101

191
73
-93

172

135
48
-93

429
117
-40

506

187
115
-40

262

244

452
92
-116

429

212
91
-116

187

242

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

2023

2022

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

Total

115
7
3
2
0

127

91
5
2
2
0

100

In 2023, the Group’s payments attributable to leases amounted to SEK 127 million
(100). 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 low-value underlying assets.

See Note 14 for a maturity analysis of liabilities relating to right-of-use assets.

Notes

Holmen Annual Report 2023

Note 13

Note 13. Investments in associates, joint ventures and other shares and participations

Profit/loss from associates and joint ventures
Recognised in profit/loss for the year

Total comprehensive income

Group

2023
6

2022
10

Associates and joint ventures

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

Associates

Joint ventures*

Total

Group

Parent company

Group

Parent company

Group

Parent company

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

2023

1 680
0
6

2022

1 675
0
6

-
-
-

-
0
-2

93
-
-

-
-
-

92
2
-

-
-
-

81
-
3

-84
-
-

-
-
-

67
-
-

-67
-
-

1 680
0
6

1 756
0
10

-
-
-

-84
0
-2

93
-
-

-
-
-

1 686

1 680

159
2
-

-67
-
-

Book value at end of year

1 686

1 680

*In February 2022, Holmen acquired the remaining 50 per cent of the shares in Varsvik AB. Varsvik AB has since been included in the Holmen Group’s subsidiaries.
See Note 26 for further information.

Parent company and Group holdings of shares and investments in associates

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

Associates

Harrsele AB
Vattenfall Tuggen AB
Brännälvens Kraft AB
Gidekraft AB
Uni4 Marketing AB
Rebio AB
Other associates

Total

Value of
holding in the
consolidated
accounts**

Book value
in the parent
company’s
accounts

Holding
%*

Value of
holding in the
consolidated
accounts**

Book value
in the parent
company’s
accounts

2023

1 527
90
36
0
21
10
1

1 686

49.4
6.8
13.9
9.9
41.0
40.3

-
90
-
0
3
1
-

2022

1 522
90
36
0
20
10
1

1 680

-
90
-
0
3
1
-

*The holdings correspond to the percentage of votes for the total number of shares held.
**Proportion of equity recognised in the Renewable Energy and Wood Products business areas of SEK 1 654 (1 649) million and SEK 32 (31) million respectively.

Group

Parent company

Other shares and participations

2023

2022

2023

2022

Book value at beginning of year
Investments
Disposals
Translation difference

Book value at end of year

2
4
-
0

2
-
-
0

0
4
-
-

0
-
-
-

The interests 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, which means that 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 1 527
million (1 522). Holmen purchased 451 GWh (553) of electrical power Harrsele AB
in 2023, giving Holmen an operating profit of SEK 319 million (437) 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’s amounts to SEK 176 million
(169). The company’s shareholders made a shareholders’ contribution during the
year of SEK 0 million (0).

Ownership of the 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 a significant influence over each company’s
activities.

Holmen Annual Report 2023

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

2024

2025

2026

2027

2028-

-6

-447
-3 394

-68
-1 112

-94
-

-31
-

-
-

-60
-942

-54
-530

-39
-508

-52
-2

564
2 696

231
-

1 207

75
-

-
-

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

2024

2025

2026

2027

2028-

-6

-106
-441
-3 196
-
-1 112 - 1 726

-36
-
-530

-
-
-508

565
2 226

245
-

1 099

3 755

98
-

-
-

-
-
-

-
-

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.

Fixed income investments and lending with maturities of up to one year, accrued
interest income, unrealised exchange gains and the fair value of derivatives
are recognised in current financial receivables. 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 of a known amount and have maturities of no more
than three months from their acquisition date, which also means that their
interest rate risk is negligible. Cash are placed in bank accounts or with banks as
current deposits.

Loans, accrued interest expenses, unrealised exchange losses and the fair value
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
52–53. SEK 1 021 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
entail a right for Holmen to offset assets and liabilities relating to the same
counterparty in the case of a credit event. Based on the terms of the netting
agreements, the net exposure is SEK 380 million (3 833). Assets and liabilities
are not offset in the report. Recognised derivatives totalled SEK 941 million
(5 020) on the asset side and SEK 561 million (1 187) on the liability side.

The ongoing Interest Rate Benchmark Reforms only have a marginal impact on
Holmen, since interest derivatives are almost exclusively denominated at the
Swedish reference rate. For currencies for which a reform of the interest rate
benchmark is under way, continued hedge accounting will apply while the reform is
in progress. These hedges are expected to also be effective in the future, however.

No provision has been made for expected credit losses for the financial assets
included in the net liability, as no losses have arisen over the past 10 years and
the assets held at the balance sheet date are deemed to have a good credit
quality. See Note 16 for information about the 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. When discounted cash flows are calculated, the variables used for
the calculations, such as discount rates and exchange rates, are taken from
market quotations where possible. When such calculations are made, the mean
exchange rates and discount rates are 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 measurement
level 2 when valuing financial instruments, in accordance with IFRS 13.

Fair value in the tables is calculated on the basis of discounted cash flows and all
the variables, such as discount rates and exchange rates, are taken from market
quotations. Fair value may differ from the book value 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
regarding Holmen’s hedge accounting, see the section on risk on pages 52–53
and Note 6.

Notes

Holmen Annual Report 2023

Note 14

Note 14. Financial instruments, cont.

Group

Financial instruments included
in net financial debt

Non-current financial receivables
Derivatives
Other financial receivables

Current financial receivables
Accrued interest
Derivatives
Other financial receivables

Cash and cash equivalents
Cash and cash equivalents

Non-current liabilities
Bonds
Derivatives
Other non-current liabilities

Current liabilities
Certificate programme
Derivatives
Accrued interest
Other current liabilities

Financial instruments not included
in net financial debt
Other shares and participations
Trade receivables
Derivatives (recognised in
operating receivables)

Trade payables
Derivatives (recognised in
operating liabilities)

Recognised at
fair value through
profit/loss*

Hedging instruments

Recognised at
amortised cost

Total
book value

Fair value

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

-
-

-
1
-

-
-
-

-
-3
-
-

-3

5
-

-
-

-
2
-

-
-
-

-
-3
-
-

-3

2
-

45
-

-
43
-

-
-
-

-
-
-
-

-
-

78
-

-
7
-

-
-
-

-
-5
-
-

-5

-
-

-
16

2
-
5

-
19

2
-
7

45
16

2
43
5

78
19

2
9
7

45
16

2
43
5

78
19

2
9
7

1 202

1 935

1 202

1 935

1 202

1 935

-1 900
-
-2

-1 902

-
-
-18
-1 000

-1 018

-2 900
-
-2

-2 902

-
-
-18
-1 013

-1 031

-1 900
-
-2

-1 902

-
-3
-18
-1 000

-1 021

-2 900
-
-2

-2 902

-
-7
-18
-1 013

-1 039

-1 900
-
-2

-1 902

-
-3
-18
-1 000

-1 021

-2 900
-
-2

-2 902

-
-7
-18
-1 013

-1 039

-
2 696

-
2 929

5
2 696

2
2 929

5
2 696

2
2 929

200

791

4 732

852

4 933

852

4 933

-3 394

-3 848

-3 394

-3 848

-3 394

-3 848

-124

-58

-321

-119

-434

358

-859

3 873

-698

-919

-558

-398

-1 180

2 836

-558

-398

-1 180

2 836

Total financial instruments

-60

-120

446

3 954

-2 394

-2 890

-2 008

944

-2 008

944

*Refers to instruments that must be measured at fair value in accordance with IFRS 9.

Holmen Annual Report 2023

Notes

Note 14

Parent company

Financial instruments included
in net financial debt

Non-current financial receivables
Derivatives
Receivables in respect of
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 in respect of Group
companies
Derivatives

Current liabilities
Certificate programme
Derivatives
Accrued interest
Other current liabilities

Financial instruments not included
in net financial debt
Other shares and participations
Trade receivables
Derivatives (recognised in
operating receivables)

Trade payables
Derivatives (recognised in
operating liabilities)

Recognised at
fair value through
profit/loss*

Hedging instruments

Recognised at
amortised cost

Total
book value

Fair value

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

-
-

-
43
-

-
-

-
-3
-
-

-3

4
-

-106

-35

-
-

-
9
-

-14
-

-14

-
-7
-
-

-7

0
-

-
-

3 751
13

3 764

3 553
17

3 570

3 751
13

3 809

3 553
17

3 648

3 751
13

3 809

3 553
17

3 648

-
-
-

-
-

-
-
-
-

-
-

-
-
-

-
-

-
-
-
-

-
-

2
-
5

2
-
6

2
43
5

2
9
6

2
43
5

2
9
6

1 092

1 774

1 092

1 774

1 092

1 774

-1 900

-2 900

-1 900

-2 900

-1 900

-2 900

-784
-

-420
-

-784
-

-434
-

-784
-

-434
-

-2 684

-3 320

-2 684

-3 334

-2 684

-3 334

-
-
-18
-1 000

-1 018

-
-
-18
-1 013

-1 031

-
-3
-18
-1 000

-1 021

-
-7
-18
-1 013

-1 039

-
-3
-18
-1 000

-1 021

-
-7
-18
-1 013

-1 039

-
2 226

-
2 454

4
2 226

0
2 454

4
2 226

0
2 454

323

794

4 685

861

5 007

861

5 007

-82

241

-3 196

-3 617

-3 196

-3 617

-3 196

-3 617

-434

360

-929

3 756

-970

-1 163

-539

-644

-1 010

2 835

-539

-644

-1 010

2 835

Total financial instruments

229

406

3 835

190

-162

601

3 901

601

3 901

*Refers to instruments that must be measured at fair value in accordance with IFRS 9.

Notes

Holmen Annual Report 2023

Notes 15–18

Note 15. Inventories

Felling rights
Logs and pulpwood
Raw materials and consumables
Finished products and work
in progress
Electricity certificates and
emission allowances

Total

Group

Parent company

2023

982
414
1 119

2022

810
356
1 234

2023

2022

982
388
834

810
335
877

2 296

2 322

1 822

1 870

116

4 837

4 838

4 054

3 965

During the year, impairment losses and reversals of previous impairment losses
for finished stock had an effect of SEK -5 million (-65) on Group profit, while
impairment losses on other stock had an effect of SEK -4 million (-7). Impairment
losses and reversals of previous impairment losses for finished stock had an
effect of SEK -5 million (-35) on the parent company, with impairment losses on
other stock of SEK -4 million (-5).

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

2023

2022

2023

2022

-
68
2 628

2 696
434
852
344

1 630

-
69
2 860

2 929
907
4 933
563

6 402

50
68
2 108

2 226
333
861
198

1 392

12
69
2 373

2 454
797
5 007
347

6 152

Total operating receivables

4 326

9 332

3 618

8 606

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 relating to 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 (0). The
provision for expected credit losses was SEK 30 million (28). During the year,
the provision decreased by SEK -3 million (-3) as a result of actual credit losses,
and increased by SEK 4 million (3) as a result of changes in the provision for
anticipated or expected credit losses. At 31 December 2023, SEK 56 million (29)
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.

Note 17. Equity, parent company

31 Dec 2023

Registered share capital

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

Total number of
outstanding shares

Number

45 246 468
117 265 856
162 512 324

-3 289 969

159 222 355

Quotient
value

26
26

SEKm

1 180
3 058
4 238

Holmen Annual Report 2023

Notes

31 Dec 2022

Registered share capital

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

Total number of
outstanding shares

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

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 1 vote.
Otherwise, there are no restrictions between classes of shares.

At 31 December 2023, the Group’s own shareholding was 3 289 969 shares
(510 646). In 2023, 2 779 323 shares were repurchased for SEK 1 119 million,
corresponding to an average price of SEK 403/share. The buy-backs amount
to 1.7 per cent of the total number of shares. The company already owned
0.3 per cent of its own shares, meaning that at 31 December 2023 Holmen
held 2.0 per cent of the total number of shares.

Assets and liabilities measured at fair value in accordance with Chapter 4, § 14a of
the Swedish Annual Accounts Act had an impact of SEK 412 million (4 064) on the
parent company’s equity. In the consolidated accounts, the valuation of derivatives
and other financial instruments had an impact of SEK 386 million (3 834) 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 7 533 041 268. The Board proposes that the AGM, to be held on 16 April
2024, approve a total dividend of SEK 11.50 per share. The proposed dividend
totals SEK 1 831 million. The Board also proposes that the remaining amount of
SEK 5 701 984 186 be carried forward.

The preceding year, the dividend paid was a total of SEK 16.00 per share
(SEK 2 592 million).

Net financial debt as a percentage of equity was 3 per cent (4).

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 49–53.

Note 18. Pension obligations

Holmen provides defined benefit pension plans to some office-based
employees in Sweden. Most of these obligations 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. There are some defined
benefit obligations in addition to the ITP plan for Group management, which
are secured by means of a pension fund. The occupational pensions for other
office-based employees and all employees covered by collective agreements in
Sweden are all defined contribution plans. There are two defined benefit plans
in the UK that have been closed to new pension accruals since 2015. These
obligations are recognised in the consolidated accounts as defined benefit
plans in accordance with IAS 19.

Cost recognised in profit/loss
for the year

Defined benefit plans
Personnel costs*
Financial income and costs

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

Total recognised in profit/loss
for the year

Group

Parent company

2023

2022

2023

2022

-5
14

-6
10

6
0

-26
0

-26

-197

-184

-160

-148

-188

-180

-154

-174

*SEK 11 million (-20) is included in the parent company’s accounts relating to an
item that is recognised in the consolidated accounts as an actuarial revaluation in
other comprehensive income.

Note 18

Group

The plan assets by type are as shown below:

Cost recognised in other comprehensive income

2023

2022

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

-827

-42

-51

-19
0
59

-6

593

-48
1
247

-6

Group

Parent company

Obligations
Obligations at 1 January
Current service cost
Payroll tax
Interest expenses
Actuarial gains/losses
Benefits paid
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
Amounts paid in and paid out
by employer
Benefits paid
Exchange differences
Fair value of assets at 31
December

Effect of asset ceiling
Pension obligations, net

2023

2022
-1 471 -2 070
-6
6
-39
574
116
-52
-1 581 -1 471

-5
-3
-71
-112
100
-20

2023
-175
-14
-
0
-
13
-
-176

1 753
85

2 568
49

161
-

47
-
-10

6
-100
27

-827
-
-3

17
-116
65

-
20
-

-7
-
-

1 809

1 753

175

-237
-9

-289
-7

-
-1

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

174
-

-
-13
-

-
-
-

161

-
-13

The change in defined benefit obligations and the change in plan assets are set
out in the table above. Some 90 per cent of the obligations relate to pension
schemes in the UK. The obligations arising out of pension plans in the UK have
been placed in two trusts. These are governed by boards consisting of represent-
atives of Holmen and the beneficiaries. Holmen’s UK subsidiaries have commit-
ments to cover any deficits that exist. In 2022, the trusts entered into an agree-
ment with a life insurance company according to which, in exchange for a one-
time payment, the trusts will be compensated for all their future pension payments
and the life insurance company therefore assumes 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 obligations, but no surplus may be included
in the accounts. This adjustment is referred to as an asset ceiling in the tables.

The weighted average duration is 11 years.

Of the Group’s total obligations, SEK 9 million (10) are unfunded obligations,
while the rest are wholly or partially funded obligations. Of the parent company’s
obligations, SEK 1 million (13) are secured in accordance with the Swedish
Pension Obligations Vesting Act.

Plan assets

Equities
Bonds and bank account balances
Life insurance company
receivables

Group

Parent company

2023

2022

2023

2022

79
406

71
405

1 323

1 809

1 277

1 753

79
96

71
90

175

161

The plan assets do not include any financial instruments issued by Group
companies or assets used by the Group. Most of the assets in the UK trustees are
receivables relating to the life insurance agreement. Of the shares, 100 per cent
are Swedish shares, and of the bonds, 72 per cent are government bonds and
28 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

31 Dec 2023 31 Dec 2022

4.6
-
2.7

4.9
-
2.8

21/24
SAPS S3PA

Sweden

Key actuarial assumptions, Group

31 Dec 2023 31 Dec 2022

Discount rate, %
Rate of salary increase, %
Rate of price inflation, %
Life expectancy after 65 for men/
women, years
Life expectancy table

3.3
3.0
2.0

3.7
3.0
2.0

22/24
DUS23

22/24
DUS21

The discount rate for pension obligations was determined based on high quality
corporate bonds in the currency and country of the obligations, i.e. mainly the UK.
A discount rate of 1.0 per cent (0.2) andand 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 obligations would be affected in the event of a
change in key actuarial assumptions (- reduces debt, + increases debt).

Group

Sensitivity analysis

31 Dec 2023 31 Dec 2022

Discount rate (+0.5%)
Rate of wage increase (+0.5%)
Rate of price inflation (+0.5%)
Mortality (+1 year of life expectancy)

-79
1
58
69

-71
1
55
62

The Group’s payments into the funded defined benefit plans in 2024 are expected
to amount to SEK 0 million.

Multi-employer plans
The premiums for the year for pension insurance policies taken out under Alecta’s
ITP 2 plan amounted to SEK 23 million (32) and are included in personnel costs in
the income statement. The active members of the plan at Holmen amounted to
633 people, which corresponds to 0.17 per cent of the plan’s active members.
Alecta’s surplus may be allocated to policyholders and/or the people insured.
If Alecta’s collective consolidation level falls below 125 per cent or exceeds
150 per cent, measures will be taken to create the conditions to ensure that the
consolidation level returns to a 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 2023, Alecta’s collective
consolidation level was 157 (172) per cent and Alecta decided to introduce a
premium reduction for 2024. The expected premiums payable to Alecta in 2024
amount to SEK 26 million, taking the premium reduction into account.

Notes

Holmen Annual Report 2023

Notes 19–22

Note 19. Provisions

Note 20. Operating liabilities

Group

2023

2022

Book value at beginning of year
Business combinations
Provisions during the year
Amount utilised during the year
Unutilised amount reversed during the year
Reclassification
Translation differences

Book value at end of year
Of which non-current portion of the provisions
Of which current portion of the provisions

Parent company

Book value at beginning of year
Provisions during the year
Amount 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

441
-
20
-27
-5
20
0

449
418
31

609
160
-145
-

623
453
170

409
6
66
-31
-9
-
0

441
441
-

599
130
-118
-2

609
454
155

Provisions mainly relate to obligations to restore the environment at discontinued
factory sites. SEK 95 million of these provisions are expected to be settled within
three years, while the remainder is expected to be settled over a longer time ho-
rizon.

Group

Parent company

2023

2022

2023

2022

Trade payables

Group companies
Other

Total trade payables
Current liabilities

Associates
Other
Derivatives
Accruals and deferred income

-
3 394

3 394

4
278
558
968

Total other operating liabilities

1 808

-
3 848

3 848

3
359
1 180
853

2 395

14
3 182

3 196

4
235
539
792

1 570

2
3 615

3 617

3
289
1 010
674

1 976

Total operating liabilities

5 202

6 243

4 766

5 593

All trade payables are due for payment within one year.

Accruals and deferred income in the parent company’s principally consist of
personnel costs of SEK 395 million (248), discounts of SEK 88 million (92) and
goods and services delivered but not yet invoiced of SEK 77 million (78).

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

2023

2022

2023

2022

-
41

-
51

114
41

155

69
51

120

Other contingent liabilities for the Group largely comprise guarantee undertakings
for third parties. Holmen has environment-related contingent liabilities that
cannot currently be quantified but could result in future costs. Under Swedish
law, Holmen has strictly unlimited liability for harm caused to third parties by
dam failures. Holmen has liability insurance for such harm.

Note 22. Related parties

Of the parent company’s net sales of SEK 20 234 million (21 995),
SEK 333 million (438) relate to deliveries of goods to Group companies. The
parent company’s purchases of goods from Group companies amounted to
SEK 74 million (95). Parent company net sales also include income from the sale
of silviculture services to subsidiaries for an amount of SEK 528 million (475).
SEK 2 561 million (2 469) of expenses for the leasing of non-current assets from
subsidiaries are recognised in the parent company’s.

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 54–55).
Holmen rents office premises for SEK 8 million (7) from Fastighets AB L E Lundberg,

Transactions with related parties

which is a Group company within the L E Lundbergföretagen AB. In 2023,
Fredrik Lundberg, who is CEO of and principal shareholder in L E Lundbergföretagen,
received a fee of SEK 820 000 (780 000) as Chairman of Holmen’s Board. 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 410 000 (390 000).

In February 2022, Holmen acquired the remaining 50 per cent of the shares in
wind power company Varsvik AB and the company has since been 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 line with 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.

Group

Associates
Joint ventures

Parent company

Subsidiaries
Associates
Joint ventures

Sale of goods to
related parties

Purchase of goods
from related parties

Other (e.g. interest,
dividends)

Liabilities in
respect of related
parties

Receivables in
respect of related
parties

2023

704
-

333
704
-

2022

541
0

438
541
0

2023

2022

2023

2022

2023

2022

2023

2022

63
-

74
63
-

64
-

95
64
-

2
-

463
2
-

0
1

510
0
1

4
-

799
4
-

3
-

439
3
-

78
-

3 804
78
-

81
-

3 646
81
-

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

Holmen Annual Report 2023

Notes

Note 23

The parent company’s impairment losses on investments in Group companies
are stated in the income statement in ‘Profit/loss from investments in Group
companies’.

Note 23. Investments in Group companies

Accumulated acquisition costs

Value at beginning of year
Shareholder contributions and investments
Reclassifications from joint ventures
to subsidiaries
Disposals
Liquidations

Total

Accumulated impairment losses

Value at beginning of year
Impairment losses for the year

Total

Book value at end of year

Parent company

2023

13 054
100

2022

12 831
156

-
0
-

67
0
0

13 155

13 054

1 357
-

1 357

1 357
-

1 357

11 798

11 697

Corporate ID No.

Registered office

Number of
holdings

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 holdings correspond to the percentage of votes for the total number of shares held.

**Indirect holdings.

Book value
in the parent
company’s

Holding %*

accounts Holding %*

Book value
in the parent
company’s
accounts

2023

2022

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
263
2

10 253

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

1 545

11 798

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

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

1 545

11 697

Notes

Holmen Annual Report 2023

Notes 24–25

Note 24. Untaxed reserves

Parent company

Untaxed reserves

31 Dec 2022

Appropria-
tions

31 Dec 2023

Group contributions received amounted to SEK 988 million (1 013) and Group
contributions paid amounted to SEK -367 million (-322). Total appropriations
amounted to SEK 190 million (-511).

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

Tax allocation reserves
2017 fiscal year
2019 fiscal year
2020 fiscal year
2021 fiscal year
2022 fiscal year
2023 fiscal year

Total

470
700
700
680
1 490
-

4 040

4 053

-470

-2
900

428

431

-
700
700
680
1 488
900

4 468

4 484

Note 25. Cash flow statement

Group

Parent company

In 2023, the Group repaid a SEK 1 000 (500) million bond issue.
See Note 14 for a breakdown of cash and cash equivalents.

Interest paid and
dividends received

Dividends received
Interest received
Interest paid

Total

Group

Bonds
Commercial paper
Other financial liabilities
Liabilities relating to
right-of-use assets
Pension obligations

2021

4 400
200
47

244
24

Financial liabilities*

4 915

2023

2022

2023

2022

-
47
-80

-33

-
9
-48

-39

348
172
-113

407

446
81
-59

467

Business
combinations

New

leases Cash flow

Currency
and market
revaluation

-
-
3

-
-

-
-
-

93
-

-500
-200
-37

-95
-24

-856

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

Parent company

Bonds
Commercial paper
Liabilities in respect of Group
companies
Other financial liabilities
Pension obligations

Financial liabilities*

*Including pension obligations.

2021 Cash flow

Currency
and market
revaluation

4 400
200

607
42
0

5 250

-500
-200

-171
-26
13

-884

-
-

-2
22
-

Holmen Annual Report 2023

Notes

2023

2 900
-
23

250
9

-
-
42

7
6

3 182

New
leases

Cash
flow

Currency
and market
revaluation

2022

3 900
-
41

247
7

-
-
28

5
7

4 195

2022 Cash flow

3 900
-

434
39
13

4 386

-1 000
-

342
-60
-13

-730

-
-
-

117
-

117

-1 000
-
-60

-121
-4

-1 185

Currency
and market
revaluation

-
-

8
42
1

2023

2 900
-

784
21
1

3 706

Note 26. Business combinations

Note 28. Events after the balance sheet date

Notes 26–28

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 was recognised in
connection with the acquisition. The previously owned proportion of equity of a fair
value of SEK 10 million was recognised in 2022 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 2023 was
SEK 56 348 million (52 151), divided into SEK 30 555 million (29 867) for biological
assets and SEK 25 793 million (22 284) for forest land. A deferred tax liability of
SEK 11 556 million (10 706) has been recognised relating to the forest assets. The
valuation of the forest assets is based on detailed data about transactions and price
statistics published by different market operators. The valuation takes account of
where in the country the forest land is located and differences in the forests 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 biological assets, and forest
land. How much of the value is allocated to biological assets is established by
calculating the present value of the expected future cash flows from growing trees
based on estimates of future harvest volumes, price and cost development and a
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 1 581 million
(1 471) and SEK 1 809 million (1 753) of 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 pension provision recognised. 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 environmental restoration obligations. See Note 19.

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

On 31 January 2024, Holmen’s Board of Directors decided to bring the Group’s
paperboard and paper operations together in a new combined business area,
known as Holmen Board and Paper. The decision is part of the continued
strategic development of Holmen’s business based on four well-defined
business lines, i.e. forestry, hydro and wind power, woodworking industry and
process industry operations.

Given the organisational change, from the first quarter of 2024 Holmen will
change its reporting, breaking it down into four segments: forest, hydro and wind
power, wood products and board and paper.

Notes

Holmen Annual Report 2023

Appropriation of profits

ProPosed 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 8.50 per share (159 222 355 shares),
an extra dividend of SEK 3.00 per share (159 222 355 shares)

and that the remaining amount be carried forward

SEK

2 421 099 401
5 111 941 867

7 533 041 268

1 353 390 017
477 667 065

1 831 057 082

5 701 984 186

The Board of Holmen AB has proposed that the 2024 AGM resolve in favour of
paying an ordinary dividend of SEK 8.5 per share, and an extra dividend of
SEK 3.0 per share, for a total of SEK 1 831 million. The previous year, an ordinary
dividend of SEK 8.0 per share and an extra dividend of SEK 8.0 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 50 per cent of the profit for 2023 for the
Group and means that 3 per cent of the Group’s equity at 31 December 2023 will
be paid out by way of dividends.

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 2023 it amounted to 3 per cent. The proposed dividends would
increase the net debt to equity by 3 percentage points.

Holmen AB’s equity at 31 December 2023 amounted to SEK 13 448 million, of
which non-restricted equity was SEK 7 533 million. Assets and liabilities
measured at fair value in accordance with Chapter 4, §14a of the Swedish
Annual Accounts Act had an impact of SEK 412 million on equity. The Group’s
equity at 31 December 2023 amounted to SEK 56 923 million. In accordance
with IFRS, no distinction is made at Group level between restricted and non-
restricted equity.

The Board considers that the payment of dividends 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
the Group’s financial position in other respects. Its financial position will remain
strong after payment of the proposed dividends and is considered to be entirely
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 the material risks and uncertainties to which the
parent company and the other companies in the Group are exposed.

Holmen Annual Report 2023

Proposed appropriation of profits

Signatures

The annual accounts and the consolidated accounts were approved for publication by the Board in its decision of 22 February 2024. 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 16 April 2024.

Stockholm, 22 February 2024

Fredrik Lundberg
Chairman

Lars Josefsson
Board member

Alice Kempe
Board member

Louise Lindh
Board member

Ulf Lundahl
Board member

Fredrik Persson
Board member

Henriette Zeuchner
Board member

Carina Åkerström
Board member

Henrik Sjölund
Board member
and Chief Executive Officer

Ari Aula
Board member,
employee representative

Christer Johansson
Board member,
employee representative

Tommy Åsenbrygg
Board member,
employee representative

Our audit report was submitted on 23 February 2024.
PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised Public Accountant
Principal Auditor

Linda Corneliusson
Authorised Public Accountant

Signatures

Holmen Annual Report 2023

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 2023, except for the corporate governance statement and the sustaina-
bility report on pages 44-48 and 97-110, respectively. The annual accounts and
consolidated accounts of the company are included on pages 2, 6–9, 14–15, 42-
93 and 111 of this document.

In our opinion, the annual accounts have been prepared in accordance with the
Annual Accounts Act, and present fairly, in all material respects, the financial posi-
tion of the parent company as of 31 December 2023 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 Annu-
al Accounts Act and present fairly, in all material respects, the financial position of
the Group as of 31 December 2023 and its financial performance and cash flow for
the year then ended in accordance with International Financial Reporting Stand-
ards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do
not cover the corporate governance statement and the sustainability report on
pages 44-48 and 97-110, respectively. The statutory administration report is con-
sistent 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
Auditing (ISA) and generally accepted auditing standards in Sweden. Our respon-
sibilities under these standards are further described in the Auditor’s Responsibil-
ities section. We are independent of the parent company and the Group in accord-
ance with professional ethics for accountants in Sweden and have otherwise ful-
filled our ethical responsibilities in accordance with these requirements. This in-
cludes, 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 within 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 consid-
ered where the Managing Director and the Board of Directors have made signifi-
cant accounting estimates about future events or outcomes that are inherently
uncertain. In the audit, we have also addressed the risk that the Board of Direc-
tors and the Managing Director may have overridden internal controls, including
considering whether there is evidence of systematic deviations that could indi-
cate 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.

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 consolidat-
ed 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 con-
solidated accounts as a whole, but we do not provide a separate opinion on these matters.

Description of key audit matter

How our audit addressed the key audit matter

Revenue recognition
Net sales amount to SEK 22 795 million and is 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 pulp-
wood that are sold to customers. Sales of goods are transaction-rich,
put requirements 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 ex-
amined individually.

Valuation of forest assets

The Group’s forest assets amount to SEK 56 348 million and constitute
a significant item in the consolidated balance sheet.

The assets are divided into biological assets that are recognised in
accordance with IAS 41 Agriculture, and properties that are recog-
nised 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
timber prices and felling costs. The measurement is classified as a
Level 3 measurement in accordance with IFRS 13. In view of the
material nature of the item and the inherent complexity, the valuation
of the group’s forest assets is considered key audit matter in our audit.

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

We have:

• 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 discount rate, timber prices, harvest plan as well as costs
for forestry and harvesting activities.

• We have reviewed portions of the input data used in the valuation of forest assets, as
well as assessed the controls in place to ensure the accurate transfer of this input
data.

• Our valuation specialists have reviewed the assumptions and documentation utilized
to determine the discount rate, placing particular emphasis on the sensitivity of the
calculations.

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

tions.

• 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.

94 Holmen Annual Report 2023

Auditor’s Report

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

Based on our professional judgement, we have determined quantitative thresh-
olds 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. Quantita-
tive thresholds for materiality have also been used to assess the effect of poten-
tial misstatements, individual and aggregated, in the financial statements as a
whole.

Other information than the annual accounts and consolidated
accounts
This document also contains information other than the annual accounts and
consolidated accounts, which is found on pages 3–5, 10–13, 16-41 and 112-120
1(“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 re-
garding Other 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 knowl-
edge 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 prepara-
tion 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 con-
trol 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 Direc-
tors 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
accounts and consolidated accounts as a whole are free from material misstate-
ment, 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 guar-
antee that an audit conducted in accordance with ISAs and generally accepted
auditing standards in Sweden will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material
if, individually or 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 2023 as well as the proposed appropriations
of the company’s profit or loss.

We recommend to the general meeting of shareholders that the profit be appro-
priated 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
standards 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 includes an assessment of whether the dividend is justifiable considering the
requirements 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, consolida-
tion requirements, liquidity and position in general.

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 designed so that the accounting, management of assets and the company’s
financial affairs otherwise are controlled in a reassuring manner. The Managing
Director is responsible for day-to-day management in accordance with the guide-
lines and instructions issued by the Board and is required to take such actions as
may be necessary 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 compa-
ny’s profit or loss, and thus for our opinion on the same, is to obtain reasonable
assurance 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
available on the website of the Swedish Inspectorate of Auditors: www.revisorsin-
spektionen.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 facilitates uniform electronic reporting (the ESEF report) according to
Chapter 16, Section 4 a of the Securities Market Act (2007:528) for Holmen AB
for the year 2023.

Auditor’s Report

Holmen Annual Report 2023

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 signifi-
cant respects facilitates uniform electronic reporting.

the effectiveness of those internal controls. The examination also includes an
evaluation of the appropriateness and reasonableness of assumptions made by
the Board of Directors and the Managing Director.

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 recom-
mendation are further described in the Auditor’s Responsibilities section. We
are independent 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 control as the Board of Directors and the Managing Director regard
as necessary to prepare 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 procedures 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, indi-
vidually or in aggregate, they could reasonably be expected to influence the eco-
nomic 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
control, including documented policies and procedures regarding compliance
with professional ethical requirements, professional standards and legal and
regulatory requirements.

The 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 depend 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 circumstances, 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 procedures mainly include a validation that the Esef report has been pre-
pared 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 consoli-
dated statement of financial performance, financial position, changes in equity,
cash flow and disclosures in the Esef report has been marked with iXBRL in
accordance 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 44-48 has been prepared in accordance with the Annual Ac-
counts 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 Inter-
national 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 97-110 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 12 The auditor’s opinion regarding the statutory sustainability report. This
means that our examination of the sustainability report is different and substan-
tially more limited in scope compared with the focus and scope of an audit con-
ducted in accordance with International Standards on Auditing, and generally ac-
cepted auditing standards in Sweden. We believe that the examination has pro-
vided 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 28 March 2023
and has been the company’s auditor since 22 April 2021.

Stockholm, 23 February 2024

PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised Public Accountant
Auditor in Charge

Linda Corneliusson
Authorised Public Accountant

96 Holmen Annual Report 2023

Auditor’s Report

Sustainability report

GENERAL
INFORMATION

Holmen’s sustainability report is published on an annual basis and covers the
period 1 January to 31 December 2023.

Sustainability work is reported in accordance with the Global Reporting
Initiative’s GRI Standards 2021. The sustainability report comprises pages
97–110 of the annual report and also includes the GRI index on the website
holmen.com. The sustainability report has undergone review by Holmen’s
auditors, see the separate assurance report on page 110. The auditors conduct
this review in line with the requirements laid down in national law. The
sustainability report for 2023 was published on 6 March 2024. Information in
line with Swedish legal requirements for statutory sustainability reporting is
found on pages 97–110. The Board of Directors is responsible for the statutory
sustainability report and for ensuring that it is prepared in accordance with the
Swedish Annual Accounts Act.

Holmen’s annual report and sustainability report cover the parent company
Holmen AB, all subsidiaries in the Group and hydro power plants in which
Holmen is a minority owner. The sustainability report does not include other
companies of which Holmen is a minority owner. All data is collected, quality-
assured and evaluated. No material changes have been made to the principles
of reporting in 2023.

The reporting in Holmen’s annual report for 2023 draws on the ongoing double
materiality assessment and the structure of the sustainability information
presented has been influenced by the way in which the European Sustainability
Reporting Standards (ESRS) divide up the topics to be reported on. There have
been no significant changes to the information reported in Holmen’s
sustainability report for 2023 compared with the previous year.

Strategy
In recent years, the Board of Directors and Group management have rewritten
Holmen’s business concept and strategy in light of the way in which the global
climate transition is driving demand for sustainable building materials and
renewable energy while also fuelling growing competition for forest raw
material. As part of this process, sustainability matters have been integrated into
the governance of Holmen. Corporate governance is described on pages 44–48.

Holmen’s business concept is to own and add value to the forest. Our 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.

Holmen’s strategy, which is presented on pages 6–7, assumes that the world
must make the transition to using energy and materials sustainably to limit
global warming.

Over the past 50 years, the world’s energy consumption has tripled, and this
increasing demand has almost exclusively been met using fossil fuels. Europe
needs to restructure its energy supply to wean us off fossil dependence. 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. Recent Swedish initiatives on 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 growing industry
with green electricity when it is most needed, while at the same time helping to
stabilise an increasingly weather-dependent electricity system. However, it is
not deemed possible to expand hydro power while upcoming environmental
permit reviews pose a risk that production may need to be limited. On the other
hand, there is major potential to build wind power on Holmen’s land. In 2023,
permits were granted for two new wind farms on Holmen’s own land and work is
in progress to obtain permits for additional wind farms. The length of the permit
processes poses a challenge, as does the fact that wind power construction
often comes up against local opposition.

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 now 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, while also storing carbon in the buildings. This means that
the market outlook for wood is good, especially as fossil construction materials
will now have to carry the cost of their climate impact as free allocation of
emission allowances starts to be phased out. The acquisitions and investments
of recent years have expanded our wood products business and seen us shift
ourselves forward in the value chain. With a strong position in the wood market
and well-invested sawmills, Holmen is excellently placed to continue to expand
the wood products business. The greatest challenge lies in growing in line with
the supply of wood raw material.

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. Thanks to a secure and virtually fossil-free energy supply,
we provide the market with products with a low carbon footprint. A desire to
reduce climate impact and avoid plastic packaging is helping to increase demand
for wood-based fibre products, while the low carbon footprint of our products
has increasingly become a competitive advantage when fossil-free energy is in
short supply on the European continent. For paperboard, the biggest challenge is
that significant investments in expanding capacity in recent years are increasing
competition and making greater demands in terms of cost-efficiency. For paper,
on the other hand, the greatest challenge is the structural fall in demand from
the major customer segments, magazine publishers and retailers. Although the
forest is a renewable resource and our large forest holdings give us a strong
position in the wood market, the supply of raw material is nevertheless limited
and competition for wood raw material is growing.

The world’s forests absorb increasing amounts of carbon dioxide every year, but
this increase mainly occurs in the forests that are actively managed. We have
long combined active forestry with preservation of biodiversity, and this has
resulted in a steadily 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 2023, our total business created a climate benefit of just over
7.5 (7.2) million tonnes CO2e, which can be viewed in relation to Sweden’s total
emissions of just over 50 million tonnes. Despite our major contribution to a
better climate, dealing with the wide range of opinions voiced on the impact of
forestry on biodiversity and the role of the forest as a carbon sink is a challenge.

Objectives
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 our production, business and organisation have the greatest opportunities
to make a difference: climate, customers’ sustainable choices, and our employees
and the local communities in which we operate.

The Group’s targets, as presented on pages 8–9 of the annual report, include
increasing climate benefit through greater growth in our forests and higher
sales of renewable products and renewable energy to replace fossil-based
alternatives.

Stakeholders and stakeholder dialogue
We have identified our stakeholders based on the activity carried out, how it
affects the world around us, and the actors that influence Holmen. Some of
these stakeholders, such as employees, customers, suppliers, the local
community, financiers and public authorities are important for day-to-day
operation. Others, such as future employees, owners, analysts, decision-makers,
industry organisations and the media, are important for long-term development.

Holmen seeks continuous, open dialogue to increase internal understanding of
our stakeholders’ perspectives on our business. Working with industry organisations,
we conduct discussions with politicians, government agencies and stakeholder

General information

Holmen Annual Report 2023

Sustainability report

organisations on how the ground rules of the future will be designed, with a focus
on forestry and energy supply, and taking climate and biodiversity as the most
important parameters. Thanks to good union relations, we are alert to the views
of employees, which we supplement with employee surveys and one-to-one
dialogues at all levels of the company. Good dialogue with local decision-makers
and neighbours enables us to tell how we are affecting the local communities in
which we operate and how they may affect us.

and on how well the organisation is equipped to face future sustainability
challenges. 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. Since then, the materiality
assessment has been reviewed to ensure that the areas remain relevant and
that Holmen has an actual or potential (negative and positive) impact.

The stakeholder groups most affected by Holmen’s operations or which most
affect our operations are:

In 2023, a new double materiality assessment was launched based on the
requirements of ESRS, and this will be completed in 2024.

• existing and new customers

• existing and new employees

• existing and new suppliers

• shareholders, investors and analysts

• government agencies and other public bodies

• politicians and decision-makers

• the media

• local communities, neighbours and reindeer owners

Materiality assessment
Since 2006, Holmen has reported sustainability information based on a materiality
assessment in which the information is selected based on the sustainability areas
that are most significant to the Group.

In 2018 an extensive materiality assessment was conducted to identify the
areas in which Holmen has the greatest opportunity to contribute towards
sustainable development. The materiality assessment was founded on the
expectations of our most important stakeholders and their demands of Holmen,

Environmental permits and management systems
Holmen runs operations that require environmental permits. The permits specify
conditions regarding permitted production volumes, noise levels and permitted
emissions to air and water. At the turn of 2023/2024, Holmen was running industrial
production operations that require environmental permits at nine facilities.
Additionally, the converting plant in Strömsbruk is a notifiable activity. Eight of the
facilities are located in Sweden and one is in Workington in the UK. The facilities’
turnover amounted to 82 (84) per cent of the Group’s net sales in 2023.

Holmen also has four environmental permits for wind power and 18 environmental
permits for commercial quarries. Additionally, the six wholly owned and 15 partly
owned hydro power plants have environmental permits for the production plant,
reservoirs and water regulation.

Holmen’s environmental work is characterised by constant improvement
measures within the framework of our 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.

Environmental permits and management system certification

Production facilities1)

Iggesund Mill2,3)
Workington Mill3)
Hallsta Paper Mill
Braviken Paper Mill
Iggesund Sawmill
Braviken Sawmill
Linghem Sawmill4)
Bygdsiljum Sawmill4)
Kroksjön Sawmill4)

Environmental
permits

Environment
ISO 14001

Energy
ISO 50001

Quality
ISO 9001

Health and safety
ISO 45001

Certification

2018
2022
2000
2023
2014
2010
2003
2018
2020

2001
2003
2001
1999
1999
2011
2023
1999
2005

2005
2015
2005
2006
2006
2011
2023
2022
2022

1990
1990
1993
1996
1997
2011

2016
2005
2012
2015
2017
2017
2020
2023
2023

The years in the table denote the year in which the most recent environmental permit was obtained and when management system certificates were first issued. Certification
means that procedures 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.

1) Holmen Forest is certified under the environmental management system ISO 14001 and forest operations have forest management and chain-of-custody certification.

All Holmen’s facilities at which wood raw material is used have chain-of-custody certification.

2) 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. Certification includes the production unit in Strömsbruk and operations at Skärnäs Terminal.

3) Iggesund Mill and Workington Mill have been certified under the food safety management system FSSC 22000 since 2021.

4) Work is in progress to include Linghem, Bygdsiljum and Kroksjön in the other sawmills’ ISO 9001 certificates. This is expected to be completed in 2025.

Holmen Annual Report 2023

General information

ENVIRONMENT

Climate change

Impact, risks and opportunities

Taking nature as the starting point of everything we do means that climate issues
are very closely integrated in our operations. This concerns both our capacity to
contribute towards positive development and how our operations may be affected
by a changed climate. 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.

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
capacity to take up carbon dioxide over time. After harvest, the raw material from
the forests continues to bind carbon dioxide even in its processed form. In
products with a long service life 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. 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. In the same way, our sales of our own renewable electricity from
hydro power, wind power and biomass replace coal and gas power.

In 2023, Holmen’s operations helped to generate a climate benefit amounting to
7.5 (7.2) million tonnes of CO2e, with positive contributions from all the business
areas. See page 38 for more information about how we are contributing towards
a better climate.

Climate benefit, Mtonnes CO2e
Storage in own forests

Storage in wood products

Storage in paper and paperboard

Total increased net storage of carbon dioxide

Substitution wood products
Substitution paper and paperboard
Substitution hydro and wind power
Substitution bioenergy

Total substitution

Emissions, Scope 1, 2 and 3

Total climate benefit

2023
1.6

0.5

0.1

2.2

2.6
1.4
1.2
0.8

6.0

-0.7

7.5

2022

1.3

0.5

0.1

1.9

2.6
1.5
1.3
0.6

6.0

-0.7

7.2

Physical transition risks and opportunities
A warmer climate could increase the growth of our forests with a longer growth
period, more precipitation and higher levels of carbon dioxide in the air, aiding
photosynthesis. However, it could also increase the risk of fungal attack and insect
damage, while shorter periods of frozen ground and stoppages due to a high risk of
forest fires could impact on forest management. Climate risk analyses and adaptation
plans are carried out in forestry to ensure healthy, resilient forests suited to a changing
climate. Seedlings and planting, cleaning, thinning and harvesting processes are
being developed and adapted to a warmer and wetter climate. The seeds for our
nurseries are selected to grow and thrive in a changing climate and when planting, we
choose tree species based on the specific conditions of the soil to ensure the trees can
better withstand extreme weather such as storms, rain and drought.

Climate change may also affect Holmen’s industries, due to physical risks and
changed customer requirements or changed rules. This is analysed and managed
as part of the respective production plant’s continuity plan. Climate risks in the
supply chain are managed by the Group purchasing function, while risks in terms
of energy consumption and greenhouse gas emissions are managed through our
ISO-certified environmental and energy management systems. To evaluate
opportunities and mitigate climate risks linked to investments, Holmen’s
investment process includes environmental and climate impact.

Demand for Holmen’s products is rising in response to the market’s ambitions to
counteract climate change, since our customers want renewable alternatives.
Holmen’s opportunity to manage its own forest is thus crucial to our contribution
to limiting climate change. Increased requirements to set land aside for purpos-
es other than forestry could lead to reduced harvests and thus reduced opportu-
nities for the forest to contribute renewable products.

Sustainability report

Energy
Energy consumption and mix
Holmen uses large amounts of energy and the vast majority of the energy we use
is fossil-free. In 2023, Holmen used a total of 8.0 (9.0) TWh, 7.9 (8.7) GWh of
which was fossil-free, equivalent to 98 (97) per cent.

Biofuels, mainly in the form of bark and wood-containing liquors, meet 96 (97)
per cent of Holmen’s thermal energy requirements. Remaining quantities of heat
are produced primarily at and close to the mills using fossil gas, oil and LPG.

Manufacturing thermo-mechanical pulp at Holmen’s two paper mills is heavy on
electricity and the majority of the electrical energy needed at these plants is
bought in. The paperboard business generates the majority of the electricity
needed at its own mills. In 2023, total electricity consumption amounted to 3.5
(3.9) TWh.

Energy consumption, %

Renewables

Fossil

Energy consumption, GWh

Electrical energy
Thermal energy

2023

3 501
4 594

2022

3 930
4 648

Energy production
Holmen supplied 1.5 (1.6) TWh renewable electricity from hydro and wind
power in 2023. Together with the renewable electrical energy that was produced
at the Group’s mills, this equates to 59 (55) per cent of Holmen’s overall energy
consumption.

In a normal year, Holmen produces 1 100 GWh of hydro power from 21 wholly
or partly owned hydro power plants. Hydro power provides a secure energy
supply and contributes major benefit to society in the transition towards more
renewable energy sources, as hydro power production can be controlled by
adjusting the water level in the reservoirs. The establishment of large-scale wind
power provides a logical complement to controllable hydro power. Today we
have two wind farms of our own with normal annual production of approximately
600 GWh. We also buy 160 GWh a year from wind farms on Holmen’s land at a
price that is fixed until 2032.

In addition, Holmen supplies biofuel from our sawmills and Hallsta Paper Mill
and branches and treetops from the forest. In total, solid biofuel amounting to
2.7 (2.1) TWh was delivered in 2023.

As our mills have high internal production of electricity and thermal energy, the
surplus is sold. In 2023, Workington Mill supplied a surplus of 127 (123) GWh to
the national grid, while Iggesund Mill and Hallsta Paper Mill supplied 25 (26)
GWh of district heating to neighbouring communities.

Energy production, GWh
Own production of hydro and wind power
Electricity production at the mills

2023
1 502
566

2022
1 561
520

Environment

Holmen Annual Report 2023

Sustainability report

Transition plan
Holmen started to plan for the industrial transition from fossil energy in the early
2000s. Today, Holmen mainly uses fossil-free electricity and renewable energy
from biofuel. Combined with energy efficiencies, emissions of fossil carbon dioxide
from the production facilities have fallen by 93 per cent since 2005. Holmen’s own
emissions are currently at the low levels defined by the IPCC for the industry to
reach by 2045 to be in line with the Paris Agreement. Holmen’s own low climate
footprint means that the majority of emissions are generated from purchases of
input products, along with transport to and from Holmen’s industrial sites.

Greenhouse gas emissions Scope 1–3,
’000 tonnes CO2e

Scope 1: Direct greenhouse gas emissions
Scope 2: Indirect greenhouse gas emissions
from purchased electrical energy*
Scope 3: Emissions in the value chain

Total emissions

2023

2022

12
609

675

29
604

691

*Refers to emissions from production and maintenance of the electricity-produc-
ing facilities and emissions from downstream electricity distribution. Calculated
in line with market-based methodology, with EPDs from Vattenfall.

Emissions targets
In 2021, Holmen’s Group management set the target of reducing greenhouse gas
emissions. Figures are compared with 2019 levels and the emissions targets are in
line with the UN’s climate goals under the Paris Agreement, as confirmed by the
UN-backed organisation the Science Based Targets initiative (SBTi). Holmen’s
science-based targets are to reduce greenhouse gas emissions by 2030 in:

• Scope 1 and 2 by 15% per tonne of paper and pulp.

• Scope 3 from transport to and from our industrial facilities by 22% per tonne

kilometre.

• Scope 3 from forest machinery by 22% per tonne wood raw material.

Additionally, suppliers accounting for 35% of emissions from purchased goods and
services are to have climate targets in line with Science Based Targets by 2025.

Outcomes emissions targets, %

Scope 1 and 2: Emissions per tonne paper and pulp
Scope 3: Emissions from transport
Scope 3: Emissions from forest machinery
Proportion of suppliers with climate targets

2023

2022

-48
-6
9
51

-36
-8
13
35

Pollution

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. Work is steered by our environmental and energy policy
and operations are characterised by resource-efficient use of renewable raw
material and energy, and by protecting the environment, applying the precau-
tionary principle. In the event of process disruptions, the environment takes
precedence over production. Energy, chemicals and fibres are recovered as far
as possible, in order to minimise the environmental impact of production and
prevent pollution. By-products that occur in business operations should be
collected and used for different purposes and any waste is to be minimised.

Holmen’s environmental work is governed by a number of different laws, regulations
and directives. These include the conditions set out in our permits, which are adapted
to the nature of operations and the sensitivity of the surroundings. Additionally, bind-
ing limit values are set in the Ordinances on large and medium combustion plants,
the Ordinance on the incineration of waste, the Swedish Environmental Protection
Agency’s regulations on sending waste to landfill and requirements on Best Available
Techniques (BAT) for the sectors covered by the Industrial Emissions Directive. Hol-
men works in line with a large number of quality, energy and environmental targets
set within the management systems for the respective business area and production
plant. The targets are owned by the Senior Vice President Forest and by the respec-
tive mill managers in Paper, Paperboard and Wood Products.

Follow-up
The industrial operations are regularly subject to the oversight of the environ-
mental authorities and forest operations are supervised by the Swedish Forest

Agency. All certified systems are regularly checked by external, certified auditors.
Holmen reports environmental data to the supervisory authorities on a monthly
and annual basis and data from all mills is reported to the EU each year. Expendi-
ture on environmental protection is reported in accordance with Statistics Sweden
guidelines. Environmental taxes and charges amounted to SEK 25 (18) million
in 2023.

The environment managers in the respective facilities deal with the incidents
that arise and Holmen engages in close dialogue with local residents to identify
and tackle any issues. The environmental incidents reported to the supervisory
authorities during the year were tackled by means of corrective measures within
the facilities’ environmental management systems.

Environmental risks
Production disruptions can cause breaches of emissions conditions set for the
business by environmental authorities and such breaches could impact on the
environment. There is also a financial risk of exceeding the limits laid down by
the environmental authorities for operations.

Holmen makes continuous efforts to prevent and manage risks related to the
environment, where the main impact is emissions to air and water and the
occurrence of noise and waste. 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.

Aquatic environments
Holmen’s environmental and energy policy states that aquatic environments
must be protected and that the use of water must be resource-efficient and that
water is to be recycled with the aim of minimising environmental impact from
production. Conditions governing the emission of different substances are laid
down by the environmental authorities, and the requirements set in the environ-
mental permits regarding the type of treatment are determined based on the
status of the water neighbouring the production facilities. At Holmen’s sites this
involves various combinations of mechanical, biological and chemical treatment.
Holmen continuously monitors the status of recipient aquatic environments in
close cooperation with the environmental authorities.

Discontinued operations
In consultation with the authorities, Holmen investigates polluted industrial sites
where Holmen previously conducted industrial operations. Remediation may involve
future costs, and funds are earmarked for the costs judged to be incurred. In 2023,
studies were in progress at different stages regarding the former sawmills Stocka
and Lännaholm, the sulphite mills at Strömsbruk, Domsjö, Loddby and
Mariannelund, the paper mill at Silverdalen and the groundwood mill at Bureå.

Emissions to air, tonnes*

Sulphur dioxide (counted as sulphur, S)
Nitrogen oxides
Particulates
Fossil carbon dioxide, ’000 tonnes
Biogenic carbon dioxide, ’000 tonnes

2023

2022

54
892
53
41
1 676

49
899
49
42
1 657

*Relates to emissions at facilities. Emissions of methane and nitrous oxide at the
facilities constitute the majority of remaining greenhouse gas emissions and
amounted to 12 000 tonnes of carbon dioxide equivalents.

Emissions to water, tonnes

AOX (chlorinated organic matter)
Nitrogen
Phosphorus
COD (organic matter), ’000 tonnes
Suspended solids (SS), ’000 tonnes

2023

2022

36
182
18
17
3.8

36
162
12
19
3.6

Water use
Holmen uses surface water from lakes and watercourses to transport and wash
fibres at our paperboard and paper mills. Water is also used for other operations,
such as cooling and steam production. The same water is often used several
times and is treated in several stages before it is discharged. Holmen’s total
water use amounted to 68 (71) million m3 in 2023. Of the water used,
approximately 5 per cent of the raw water intake is consumed by vaporisation or
captured in products. The volume of water used in production is steadily

100

Holmen Annual Report 2023

Environment

declining, following the adoption of increasingly efficient methods and
equipment. The use of groundwater is negligible and no seawater, produced
water or water from stressed sources is used at all.

Access to surface water at our production plants is good and amounts of precipi-
tation are high as a rule, keeping watercourses topped up all year round. Risks
linked to our use of water and potential impact on aquatic environments are de-
scribed in the sections on pollution and biodiversity.

Biodiversity

Our work for biodiversity
We have worked actively on nature conservation for many years with a view to
making a positive contribution to biodiversity in our forests. Holmen focuses on
achieving high and profitable growth, while also ensuring that all naturally occur-
ring species can thrive in the forest landscape. Of Holmen’s almost 1.2 million
hectares of forest land, we manage about 80 per cent for wood production and
we always take wide-ranging environmental considerations into account when
managing and harvesting our forest.

Planning is the foundation of active and sustainable forestry. The conservation
value of our forests is detailed in local ecological landscape plans, which also
describe how the forests are to be managed over the long term in order to
preserve important habitats and to create new ones.

Promoting biodiversity in our forests
Since forest-dwelling species depend on different habitats for their survival,
large broadleaves, 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 conifers in
broadleaf forest 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 and
agricultural land. These sites are 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.

Each year, we invest SEK 190 million in caring for our forests and constantly
work to improve everything from seedlings to nature conservation through
research, development and education. To raise awareness of our forestry and
contribute to our 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. In total, a hundred or so research
projects is running on our land, both independently and in partnership with
research organisations, universities and other stakeholders.

Preserving aquatic environments
Holmen’s land contains lakes, streams and other water-rich environments, which
are all sensitive ecosystems with an abundance of flora and fauna. The water in the
forest is a priority area for Holmen and active efforts are made in practical work.
Ongoing training for field personnel and contractors is an important aspect of this
work, focusing on water issues in practice. Environmental work at our production
facilities is organised and run in line with Holmen’s environmental and energy
policy, under which aquatic environments must be protected.

Certification and management systems
The organisation and management of environmental activities are stipulated in
Holmen’s environmental and energy policy. In the event of disruptions, the
environment takes precedence over production. In ongoing and concluded
operations, the environmental impact must be acceptable to humans and the
environment. Forests should be managed responsibly in a way that ensures the
long-term survival of native plants and animals in the forest landscape. The
policy further states that Holmen’s forestry should be conducted with the aim of
achieving high-volume, sustainable production of raw material, so that the
growing forest and its products make a positive contribution to the climate.

All Holmen’s forestry is certified. Holmen Forest also applies the environmental
management system ISO 14001. The forestry certifications are a way to ensure
that Holmen’s forests are managed responsibly according to recognised
standards that take account of environmental, production and social assets.
Iggesund Mill, Iggesund Sawmill, Braviken Sawmill, Linghem Sawmill, Hallsta
Paper Mill and Braviken Paper Mill have their own chain-of-custody certificates.

Sustainability report

Thriving forests
Rich biodiversity is vital to create healthy and resilient forests that are able to
cope with climate change and more extreme weather. However, biodiversity
itself is affected by climate change. Therefore, sustainable forestry that stores
carbon dioxide and replaces fossil material and energy sources is an important
component in slowing climate change and so fostering biodiversity.

A variation of habitats nurture individual species as well as functioning
ecosystems. In working to create thriving forests, we have identified a shortage
of certain habitats. To monitor and develop these environments, we have
produced four indicators, all of which have a clear link to forest biodiversity:

• Area of old forest

• Area of old forest with high conservation value

• Volume of dead wood per hectare

• Volume of standing timber from large broadleaves per hectare

Since measurement began, progress on these indicators in Sweden’s forests has
been strongly positive, showing that environmental conservation work is effective.

Areas with high conservation value are exempt from forestry
Some forests have large or unique assets that should be preserved. Holmen
identifies such areas both within its own forest holdings and when purchasing
wood from other forest owners. Forests can have high conservation value for
different reasons and as such we take into consideration:

• areas with high concentrations of endangered species and/or key biotopes and
that the Swedish Environmental Protection Agency has classified as being of
national interest for nature conservation.

• subalpine forests.

• water protection areas.

Holmen has applied clear guidelines for purchases of wood since 1998. These
contain environmental requirements and define types of forest from which the
Group does not buy wood. Holmen does not purchase wood from forests that:

• are key habitats in Sweden according to the Swedish Forest Agency’s definition

and methodology.

• are protected for nature conservation reasons.

• are ancient forests, that is to say layered natural forests of differing age with
ample presence of old, large trees and ample dead wood in various stages of
decomposition.

• have been harvested illegally.

• originate from genetically modified trees.

• grow in areas in which traditional customs and human rights are actively

impeded.

• are High Conservation Value Forests.

• are natural forests that have been converted to plantations or other land use.

Risks and opportunities
Holmen’s opportunity to manage forests and add value to forest raw material is
vital to our contribution to limiting climate change, which in turn may affect
biodiversity. Increased requirements to set land aside for purposes other than
forestry can lead to reduced harvests and thus reduced opportunities for the
forest to contribute renewable and fossil-free products. In the same way,
legislation on land and water may inhibit the expansion of renewable energy
production from hydro and wind power, which can limit our contribution to a
fossil-free energy system.

Production disruptions can cause limits set for operations by the authorities in
environmental permits to be exceeded and such breaches could impact on the
environment and local ecosystems.

Environment

Holmen Annual Report 2023

101

By-products and waste
Holmen strives to minimise the amount of waste it produces and to use the
highest proportion possible. All units separate waste, and employees and
contractors are constantly trained in waste procedures. Our work to find
alternative uses has reduced the amount of waste sent to landfill from
6 300 tonnes in 2022 to 800 tonnes in 2023.

By-products

To energy production, GWh
To material production, ’000 tonnes

Waste, ’000 tonnes

Waste sent to landfill
Hazardous waste

2023

2 292
412

2022

1 801
469

2023

2022

0.8
1.4

6.3
1.8

Risks and opportunities
The market’s ambitions to combat climate change are increasing demand for
Holmen’s renewable products. Wood products are energy-efficient to produce,
and store carbon in the buildings in which they are used. The market outlook for
wood is good, especially once fossil construction materials are made to carry
their true cost to the climate. With a secure and largely fossil-free supply of
energy, we also provide the market with paperboard and paper with a low carbon
footprint, able to replace fossil-based alternatives. Our controllable hydro power
means we can play our part in supplying the growing industry with renewable
electricity when it is most needed, while at the same time helping to stabilise an
increasingly weather-dependent electricity system. We also have significant
potential to build wind power on our land.

Holmen’s opportunity to manage forest and add value to forest raw material is
crucial to our contribution to a circular economy. Increased requirements to set
land aside for purposes other than forestry can lead to reduced harvests and
thus reduced opportunities for the forest to contribute renewable and fossil-free
products. In the same way, regulation of land and water may inhibit the expan-
sion of renewable energy production from hydro and wind power, which could
limit our contribution to a fossil-free energy system.

Sustainability report

Resource use and circular economy

Circular business
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. Efficient
management of raw materials and circular ecocycles are the foundation of our
business. 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. After harvesting, all the land is reforested, with at least
two seedlings planted for every tree harvested. We also use water and wind on
our land to produce renewable energy.

The wood 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
work with our customers and industry organisations to develop products and
processes that can increase the use of renewable products and encourage
recycling.

Resource-efficient use of raw materials and energy
Holmen’s environmental and energy policy states that raw materials must be
used efficiently and the use of water, chemicals and other input goods must be
resource efficient. The use of fossil fuels should be minimised. Chemicals, fibres
and water should be recovered in order to minimise the environmental impact of
production. By-products that occur in business operations should be collected
and used for different purposes and waste is to be minimised. Holmen must also
contribute to the transition of the energy system through increased production of
renewable energy, and energy must be recovered and used for internal or exter-
nal purposes in order to minimise environmental impact and to reduce the need for
purchased energy. Purchased electricity should come from fossil-free generation.

Over the years, we have effectively reduced our use of energy, water and chemi-
cals, 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.

Holmen makes active efforts to identify and implement energy-saving measures
and to increase the level of self-sufficiency in energy. This mainly involves
improving efficiency in the use of energy and increasing the proportion of
Holmen-produced electricity from hydro and wind power, as well as making
greater use of waste heat and increasing the proportion of bioenergy. All the
Group’s facilities have certified energy management systems and programmes
to improve the efficiency of energy use.

Production

Paperboard, ’000 tonnes
Market pulp, ’000 tonnes
Paper, ’000 tonnes
Wood products, ’000 m3
Own production of hydro and wind power, GWh
Electricity production at the mills, GWh

Material use rate
Wood, million m3sub*
Purchased pulp, ’000 tonnes
Plastic granules/foiling material, ’000 tonnes
Chemicals, ’000 tonnes**
Filler, pigment, ’000 tonnes**

2023

462
76
888
1 447
1 502
566

2022

513
77
1 016
1 468
1 561
520

2023

2022

5.94
71
2.6
139
184

6.36
77
3.0
147
162

* At Group level, wood consumption is computed net, taking into account internal
deliveries of chips from the sawmills to the nearby mills.

** Non-renewable raw material stated as 100 per cent dry substance, equivalent

to 173 000 tonnes of commodities for chemicals and 255 000 tonnes of
commodities for filler and pigment.

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Holmen Annual Report 2023

Environment

SOCIAL

Employees

Health and safety
It goes without saying that we actively pursue a healthy culture and an accident-
free workplace for Holmen’s employees and the contractors who work with
Holmen. Health and safety is a priority and it is our responsibility as an employer
to ensure a work environment that is safe in terms of physical, health and
psychosocial aspects. Systematic health and safety sees us working with
employees and their representatives in all areas, focusing on risks and safe
behaviours. Holmen’s Work Environment Network meets every quarter. It initiates
activities and sets targets and indicators which are followed up and reported to
Group management. Holmen has a zero vision for accidents and all production
plants have certified management systems. Holmen works to identify significant
hazards using our IA reporting system and by conducting risk assessments.
KPIs based on identified hazards and risk areas are monitored regularly against
improvement targets, and hazards are addressed within the management systems
of each business area. Reported events are followed up at group meetings and
local health and safety meetings. Accidents must be investigated on the day on
which they occurred. Holmen defines an accident that leads to more than seven
days of sickness absence as severe. In 2023, 16 of the 31 accidents that occurred
in Holmen’s operations were severe. In addition to the accidents that affected
Holmen employees in 2023, there were also eight accidents leading to absence
linked to Holmen’s operations where contractors were affected. None of the
accidents that took place in 2023 led to a fatal outcome and all those affected
recovered within six months.

New employees at Holmen’s production facilities are trained in health and safety,
and employees complete regular online health and safety training based on the
risks and competence requirements of the business area. Managers and safety
officers undergo longer training. Contractors complete the online health and safety
training SSG Entré and SSG Lokal before being granted access to Holmen’s sites.

All employees have access to fitness activities and a company health service that
includes rehabilitation and supports return to work. Employees are also offered
a fitness allowance and regular health checks.

Inclusion and diversity
Holmen’s employees must be treated with dignity and respect. Harassment and
discrimination must not occur in the workplace.

Holmen’s approach to gender equality, diversity and equal opportunities is clearly
communicated in both the Group’s Code of Conduct and the company’s HR policy.

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. Holmen’s employees must be
able to work and deliver to their full potential without cultural barriers posing
obstacles. As our industry is currently overwhelmingly male, Holmen is 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. Where unwarranted pay differences have been
discovered, action plans have been adopted in consultation with the unions.

Competence development
Based on Holmen’s current and future skills needs, we are working on employee
development at all levels every day. Many employees complete regular compul-
sory training to maintain skills in specific areas. Holmen’s leadership is about
giving employees a great deal of responsibility, as well as the motivation and
support of a team of committed and expert colleagues and managers. Holmen
offers Group-wide leadership programmes and programmes for new and more
experienced managers, and for specialists who are driving change. Ongoing
competence development sees us paving the way for everyone to grow, with
stimulating duties and new challenges.

Collective agreements and union representation
Holmen has a constructive relationship of mutual trust with the unions and
sees it as self-evident that all employees are able to join a union. Employees are
represented on the Group Board by three members and three deputy members.
The unions meet regularly in consultation groups at Group, business area and
workplace level and participate in or act as consultation bodies on various issues.

All the Swedish units and Holmen’s paperboard mill in Workington in the UK have
collective agreements. At other units outside Sweden, Holmen operates in line
with the law and other forms of collective employee engagement based on local
standards.

Sustainability report

Pay
Holmen is to pay market salaries and apply differentiated and individual pay
setting, within the limits set by pay agreements, based on the difficulty and
responsibilities of the position and the individual’s performance. Minimum
wage requirements, statutory or contractual, must be complied with.

Employees

Average number of employees (FTE)*

of whom women, %
of whom men, %
of whom temporary employees, %

Average age**

2023

3 546
22.3
77.7
10.4
41.2

2022

3 466
20.9
79.1
11.4
42.9

*For further information, see note 4 on page 74. **Relates to permanent employees.

Employees covered by collective
bargaining agreements, %
Female
Male
aged <30
aged 30–44
aged 45–60
aged >60

Office workers, %
Female
Male
aged <30
aged 30–44
aged 45–60
aged >60

Personnel turnover, %

Personnel turnover

of which given notice
of which retiring
of which leaving at own request

New employees

*Relates to permanent employees.

Sickness absence, %

Total

of which longer than 60 days

Industrial accidents*, no.

Industrial accidents, more than 8 hours of absence,
per million hours worked

2023
14
86
18
33
34
16

2023
32
68
8
37
45
10

2022
13
87
17
33
35
13

2022
32
68
8
38
44
9

2023

2022

7.4
0.2
1.6
4.5
7.0

8.3
0.1
2.3
5.1
5.3

2023

2022

4.6
1.9

4.7
1.4

2023

2022

5.2

7.6

*No industrial accidents with a fatal outcome occurred during the year.

Gender equality*, %

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

*Relates to permanent employees.

Union cooperation*, %

Percentage of employees that work at a unit with
a collective agreement**

*Relates to permanent and temporary employees.

2023

2022

24.8
75.2
33.8
66.2

23.8
76.2
44.4
55.6

2023

2022

**Relates to Swedish and UK units, all of which have collective agreements. At other units
outside Sweden, Holmen supports different forms of collective employee engagement in
line with local standards, e.g. Works Councils.

Social

Holmen Annual Report 2023

103

Sustainability report

GOVERNANCE

Social impact

Business conduct

Economic and social values
In much of Sweden, active forestry is essential to thriving rural communities.
It creates jobs in places where there are few large employers and gives people
an opportunity to live, work and enjoy quality of life outside the city regions.
Holmen is also a major exporter, resulting in income flowing into Sweden. In
addition, Holmen contributes significant tax revenue in Sweden and in the other
countries in which we operate. We pay taxes in line with legislation and
regulations in all the countries in which we operate. Beyond this, Holmen’s
operations contribute to economic development through investments, research
and development, and cooperation with other companies and organisations in
several of the places where we do business.

Forestry also makes the forests easily accessible for outdoor recreation under
Sweden’s right to roam. Our forest roads help people to get out and enjoy the
natural world, while thinning means the forest does not become overgrown.
Our land is accessible to walkers, for picking mushrooms and berries, and is
excellent for hunting and fishing. Sustainably managed forests are thus not
only important from an environmental and economic perspective, they are also
important for people’s wellbeing.

Local stakeholder engagement
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. Permit application processes enable authorities, the general public and
local residents to make their views known.

As a major employer in many locations, Holmen takes part in many local activities.
This participation ranges from representation in various research contexts and
municipal marketing companies to scholarship activities. Holmen also works
with a large number of local organisations, clubs and events of various kinds.

Indigenous population
Large parts of Holmen’s land in northern Sweden overlap Sami winter grazing land
for reindeer. Consultation with the reindeer husbandry community provides an
opportunity to find solutions that take the needs of both parties into account as
well as possible. The consultation process involves meetings between Holmen’s
local field workers and representatives of the affected Sami reindeer herding
association to discuss Holmen’s planned activity and whether this might have any
impact on the reindeer husbandry community. All such meetings are fully minuted.

The Global Compact and the UN’s Sustainable Development Goals
Holmen has a holistic approach to business conduct and has been part of the
UN Global Compact and its corresponding Nordic network since 2007. We see it
as natural to support its ten principles on human rights, social and environmental
responsibility, and anti-corruption. As a signatory to the Global Compact, Holmen
has also undertaken to uphold and respect human rights in its sphere of influence.
As suppliers are part of this sphere, it is important that risk assessments are carried
out and that relevant supplier requirements are set. Every year we report on our
work and on the progress made in line with the ten principles of the Global Compact.

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. The
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.
All employees are trained in the Code of Conduct, and training is compulsory for
office workers every three years.

Holmen expects employees and other stakeholders who suspect a breach of the
Code of Conduct to report it. Employees can contact their immediate superior or
another manager at Holmen.

During 2023, no deviations from the Code of Conduct have been identified.

Responsible purchasing
Holmen’s purchasing function is to contribute to the company’s long-term profita-
bility by ensuring a sustainable supply of goods and services. The purchasing
function is also tasked with identifying, evaluating and preventing risks in our
supply chain. Our approval process and close collaboration with our suppliers
ensure that we live up to Holmen’s environmental and social requirements.
Holmen’s purchasers are constantly trained in our purchasing policy, the Supplier
Code of Conduct, ethical purchasing guidelines and supplier risk management.

Our largest supplier categories are wood and electricity, which we largely
produce ourselves. This gives us control of our supply chain and minimises
potential risks in the supply chain. We make use of well-developed chain-of-
custody mechanisms for the wood and electricity we buy in, to ensure that it is
sustainably produced. Other significant purchasing areas are transport, input
products and production materials.

Holmen requires that suppliers of goods and services take energy and environ-
mental aspects into account in their business activities. We aim to have at least
two approved suppliers per area of use and require the highest energy rating
when purchasing energy-demanding equipment. When purchasing transport, we
require that our suppliers only use known, contracted subcontractors who meet
the criteria we set for our suppliers.

Holmen is also a major purchaser of contracted services linked to our forestry.
Our management system includes a specific procurement process adapted to the
forest supply chain, which seeks to ensure that everyone carrying out silviculture
work for us receives contractual pay and has a good work environment and decent
terms of employment.

Supplier Code of Conduct
Holmen has had a Supplier Code of Conduct for many years now. The Supplier
Code of Conduct follows the UN’s guidelines and includes the requirement that
our suppliers must respect internationally recognised principles concerning
anti-corruption, human rights, health and safety, and environmental impact. The
Supplier Code of Conduct is based on these principles and clarifies what Holmen
expects of its suppliers. It states that the supplier is to seek to ensure that due
diligence is shown in their operations regarding the consequences for human
rights, the environment and climate, which involves identifying potential and
actual negative impacts and taking action to tackle such impacts.

104

Holmen Annual Report 2023

Social/Governance

Audits and site visits
Holmen’s Supplier Code of Conduct is included in all new contracts and at the
end of 2023, suppliers representing 90 (88) per cent of the Group’s purchasing
volume were judged to comply with its principles.

Since 2017, Holmen has hired an external body, EcoVadis, to conduct an in-
depth assessment of how well suppliers are complying with the principles
of our Supplier Code of Conduct. At the end of 2023, 130 (130) suppliers had
undergone an EcoVadis assessment. 97 (97) per cent of our assessed suppliers
scored above our pass level.

Of the suppliers we have evaluated and followed up in 2023, no supplier has
been found to have a heightened risk related to the principles in Holmen’s
Supplier Code of Conduct. In 2023 no supplier collaboration has been
terminated due to shortcomings in the supply chain.

Holmen works with 98 different forestry contractors for cleaning and planting.
The forestry contractors who work in silviculture employ a total of approximately
1 000 seasonal workers on Holmen’s behalf each year. Holmen works with the
Swedish union of forestry, wood and graphic workers, GS, in hiring contractors
for each season. Our fundamental requirements are that these comply with
Swedish law and apply collective agreements, and are certified in line with
PEFC’s certification for contractors.

Compliance with silviculture contractor agreements is ensured through site
visits in the forest, and all silviculture contractors are trained in silviculture and
labour law and are informed about where to turn if irregularities should occur.
In 2023, site visits were made to 27 (33) per cent of Holmen’s cleaning and
planting work teams. No nonconformities were found on site visits, although
some minor shortcomings were highlighted. Action plans have been produced
to correct the shortcomings identified and no contractor has needed to be
dismissed as a result. No contractual employees reported any experienced
irregularities via the channels provided by Holmen.

Human rights and fair working conditions
Holmen safeguards human rights and the equal value of all people in everything
we do, both in day-to-day operations 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. Holmen has clear guidelines on what applies and where to turn
in cases where Holmen’s Code of Conduct is not being followed.

Holmen is subject to the UK Modern Slavery Act and a report on this is available
at holmen.com.

Business ethics and anti-corruption
Holmen’s Code of Conduct and Holmen’s business ethics policy and associated
guidelines provide clear guidance on how to maintain good business ethics when
dealing with external contacts. 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 all complete training in all aspects of Holmen’s Code of Conduct.

Compliance is monitored for example through employee surveys and appraisal
talks, pay surveys, safety statistics and audits of the organisational and social work
environment. The Board is informed of any breaches 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 in line with internal procedures.

Political influence and lobbying activities
Holmen is 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 participates in national and international industry
organisations whose purpose is to handle the monitoring of social trends and
advocacy, with the aim of putting forward Holmen’s position and view on relevant

Sustainability report

political and regulatory issues. In the locations in which Holmen operates,
contacts are made with local representatives and the general public, for example
at consultation and information meetings. Strategic evaluation and prioritisation
of issues that may affect Holmen in the longer term is carried out under the
leadership of the CEO. These priorities form the basis of in-depth initiatives such
as inquiries and, where appropriate, clarification of Holmen’s stance on important
key issues and lobbying questions.

Whistleblowing
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. Providing information is
voluntary and the function serves as an alternative to other reporting methods.
Issues may be raised anonymously and Holmen does not tolerate any form of
reprisals against anyone who reports in good faith.

Two matters were raised through this function in 2023. The matters concerned
work-related issues, which were managed through ordinary procedures.
No issues of discrimination were reported during the year.

More information about Holmen’s whistleblower function is available at
holmen.com.

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

Governance

Holmen Annual Report 2023

105

Sustainability report

Taxonomy

The EU Taxonomy Regulation is a classification tool that will provide guidance to
financial operators on the identification of economic activities that significantly
contribute to the EU complying with its environmental objectives and green growth
strategy. Economic activities with a significant impact on the climate and the
climate change adaptation measures taken were already covered (environmental
objectives 1 and 2). In 2023, the European Commission adopted a new set of
taxonomy criteria that are not climate-related (environmental objectives 3 to 6).

In accordance with the 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 business is examined to see whether it meets the
regulation’s criteria for compliance with the environmental objectives without
causing significant harm to any other environmental objectives, and whether it has
minimum social safeguards in place.

Detailed information about Holmen’s operations that are covered by the
taxonomy can be found in the tables below. These show that 10 per cent of
Holmen’s turnover, 17 per cent of its capital expenditure and 20 per cent of its
operating expenditure are covered by the taxonomy, and that all the operations
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 income and other items,
which together total SEK 1 895 million. Internal sales eliminated from the
consolidated accounts, 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 Right-of-use assets (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 1 718 million for 2023.

Allocation of turnover, capital expenditure and operating
expenditure to the numerators
Holmen’s operations that are covered by the taxonomy are the harvesting of
our own forests (NACE code 02.20) and electricity production from wind power,
hydro power and bioenergy (NACE code 35.11). No changes in scope took
place in 2023 compared with 2022. These operations correspond to taxonomy
activities 1.3 (harvesting of own forests), 4.3, 4.5 and 4.8 (electricity production

Turnover for 2023

Economic activities (1)

Unit
A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

Harvesting of own forest

Wind power

Hydro power

Bioenergy

)
3
(
r
e
v
o
n
r
u
T

SEKm

726

263

790

766

f
o
n
o
i
t
r
o
p
o
r
P

,
r
e
v
o
n
r
u
t

)
4
(
3
2
0
2
r
a
e
y

%
10

)
2
(
e
d
o
C

CCM 1.3

CCM 4.3

CCM 4.5

CCM 4.8

Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1)

2 545

Of which enabling

Of which transitional

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)

2 545

22 145

24 691

100

Of the SEK 2 545 million of taxonomy-aligned turnover, most is attributable to the Group’s sales and is presented in the income statement on page 60.
The taxonomy-aligned turnover consisting of other operating income totals SEK 766 million and relates to bioenergy.

CCM = Climate Change Mitigation

106

Holmen Annual Report 2023

Taxonomy

Sustainability report

from wind power, hydro power and bioenergy). Holmen generates no external
turnover from other NACE codes (economic activities) that are covered by the
Taxonomy Regulation. All the activities have been judged to contribute to
environmental objective 1, Climate change mitigation. Capital expenditure
relating to suppliers whose operations 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, guarantees
of origin and green electricity certificate revenue. Capital expenditure includes
upgrades, new installations 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 taxonomy-aligned percentage of turnover and operating expenditure, of 10
per cent (11) and 20 per cent (20) respectively, was in line with the previous year,
whereas the taxonomy-aligned percentage of capital expenditure decreased
from 47 per cent to 16 per cent in 2023, above all because the completion of the
building of Blåbergsliden Wind Farm was included in capital expenditure in 2022.

The different operations 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,
along 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
relating to forest management. Forest management takes place in accordance
with the Group’s certifications, which, along with the legal requirements and the
climate adaptation plan prepared, 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 operation.

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. The Group has processes in place to ensure the
existence of minimum social safeguards relating to the prevention of corruption,
and fair competition and taxation, according to OECD’s six-step framework for
human rights due diligence.

Substantial contribution criteria

Does Not Significantly Harm (DNSH) criteria

e
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)
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N/EL

)
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Taxonomy

Holmen Annual Report 2023

107

Sustainability report

Capital expenditure for 2023

Economic activities (1)

Unit

A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

Harvesting of own forest

Wind power

Hydro power

Bioenergy

Capital expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1)

Of which enabling

Of which transitional

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)

)
2
(
e
d
o
C

CCM 1.3

CCM 4.3

CCM 4.5

CCM 4.8

)
3
(
e
r
u
t
i
d
n
e
p
x
e
l
a
t
i
p
a
C

SEKm

240

301

l
a
t
i
p
a
c
f
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n
o
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r
o
p
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r
P

,
e
r
u
t
i
d
n
e
p
x
e

)
4
(
3
2
0
2
r
a
e
y

301

1 535

1 835

100

Of the SEK 240 million of taxonomy-aligned capital expenditure relating to the harvesting of our own forests, SEK 178 million were invested in forest assets,
SEK 50 million in property, plant and equipment and SEK 12 million in leases. Of the SEK 4 million of taxonomy-aligned capital expenditure relating to wind
power, SEK 4 million were invested in property, plant and equipment. Of the SEK 48 million of taxonomy-aligned capital expenditure relating to hydro power,
SEK 44 million were invested in property, plant and equipment and SEK 3 million in intangible assets. Of the SEK 9 million of taxonomy-aligned capital
expenditure relating to bioenergy, SEK 9 million were invested in property, plant and equipment. The percentage deriving from acquisitions in 2023 totalled
10 per cent and relates to purchases of forest properties (SEK 33 million).

Operating expenditure for 2023

)
2
(
e
d
o
C

CCM 1.3

CCM 4.3

CCM 4.5

CCM 4.8

g
n
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t
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,
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i
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p
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e

)
4
(
3
2
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y

)
3
(
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r
u
t
i
d
n
e
p
x
e

g
n
i
t
a
r
e
p
O

SEKm

281

343

1 375

1 718

100

Economic activities (1)

Unit

A. Taxonomy-eligible activities

A.1 Environmentally sustainable activities (taxonomy-aligned)

Harvesting of own forest

Wind power

Hydro power

Bioenergy

Operating expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1)

Of which enabling

Of which transitional

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 343 million of taxonomy-aligned operating expenditure relates to maintenance and repairs.

108

Holmen Annual Report 2023

Taxonomy

Sustainability report

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Taxonomy

Holmen Annual Report 2023

109

Substantial contribution criteria

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Y/N

Sustainability report

Nuclear energy related activities

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative
electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as
well as their safety upgrades, using best available technologies.

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity
or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear
energy, as well as their safety upgrades.

Fossil gas related activities

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce
electricity using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and
power generation facilities using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that
produce heat/cool using fossil gaseous fuels.

Yes/No

Auditor’s report
on its review

Holmen’s sustainability report, as defined on page 2 of Holmen’s Annual
Report 2023, was reviewed separately in accordance with ISAE 3000
Assurance engagements other than audits or reviews of historical
financial information.

A complete assurance report on the sustainability report can be found on
holmen.com.

This contains the following conclusion:

Based on our review procedures, nothing has come to our attention that
causes us to believe that the sustainability report has not, in all material
aspects, been prepared in accordance with the criteria stated by Group
management.

Stockholm, 23 February 2024

PricewaterhouseCoopers AB

Magnus Svensson Henryson
Authorised public accountant
Principal auditor

Linda Corneliusson
Authorised public accountant

110

Holmen Annual Report 2023

Taxonomy/Auditor’s report on its review

Key figures

Holmen uses performance measures in its reporting in addition to
the metrics defined by IFRS, 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 the calculations
used to arrive at the performance measures used within the
Group. For further information, also see Definitions.

The ESMA’s (European Securities and Markets Authority)
‘Guidelines – Alternative Performance Measures’ are applied. The
alternative performance measures published in this report should
not be regarded as replacing the financial metrics defined by IFRS,
but rather as a complement, and they do not need to be comparable
with performance measures with the same names published by
other companies.

Key figures, SEKm

2023

2022

2021

2020

2019

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

Operating profit/loss excluding items affecting comparability

Items affecting comparability*

Operating profit/loss

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 112 for what items affecting comparability refers to.

6 114
-1 360

4 755

4 755
22 795

20.9

56 923
1 869

58 793

4 755
56 046

8.5

3 697
54 140

6.8

1 902
160
1 021
91
9
-61
-50
-1 202

1 869

1 869
56 923

56 923
79 719

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

4 101

4 101
46 992

46 992
68 101

3 651
-1 172

2 479

2 479
16 327

15.2

42 516
4 181

46 697

2 479
44 128

5.6

1 979
40 718

4.8

3 919
175
605
112
48
-290
-43
-346

4 181

4 181
42 516

42 516
62 543

3 486
-1 141

2 345

8 770

11 115

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

3 784

3 784
40 111

40 111
59 340

Key figures

Holmen Annual Report 2023

111

Diluted earnings per share, SEK**

23.0

36.3

18.5

12.2

52.6

13.5

9.9

8.5

2023

TeN-yeAr reVieW,
fiNANCe

SEKm

2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

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

19 479

23 952

15 994
22 795
-17 249 -15 865 -14 622 -13 250 -13 961 -12 984 -13 379 -12 626 -13 348 -13 270
282
-7

487
0

425
-9

267
7

415
-12

464
0

509
10

315
-22

579
-6

562
6

16 959

16 055

16 133

15 513

16 014

16 327

EBITDA

6 114

8 607

5 321

3 651

3 486

3 488

3 157

3 179

2 940

2 999

Depreciation and amortisation according to plan

-1 360

-1 345

-1 261

-1 172

-1 141

-1 012

-991

-1 018

-1 240

-1 265

4 755

7 262

4 061

2 479

2 345

2 476

2 166

2 162

1 700

1 734

Operating profit/loss excluding items
affecting comparability

Items affecting comparability*

Operating profit/loss

Net financial items

Profit/loss before tax

Tax

Profit/loss for the year

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

Group

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

Items affecting comparability*

Group

Cash flow
Profit/loss before tax
Adjustment items
Income tax paid
Changes in working capital

Cash flow from operating activities

266

-330

8 770

-94

-232

-931

4 755

7 527

3 731

2 479

11 115

2 382

2 166

1 930

-49

-87

-39

-42

-34

-25

-53

-71

4 705

7 441

3 691

2 437

11 081

2 356

2 113

1 859

-1 008

-1 567

-688

-458

-2 351

-89

-445

-436

3 697

5 874

3 004

1 979

8 731

2 268

1 668

1 424

-450

1 284

-147

1 137

-230

907

5.4

769

-90

679

-120

559

3.4

7 996
6 765
8 200
4 075
1 070
-5 311

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

5 641
5 113
6 247
1 352
389
-2 748

22 795

23 952

19 479

16 327

16 959

16 055

16 133

15 513

16 014

15 994

1 523
192
2 538
6
697
-202

4 755

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

7 262

266

1 495
673
70
1 668
347
-193

4 061

-330

1 367
812
73
185
215
-174

2 479

1 172
435
509
62
336
-168

2 345

8 770

1 185
689
329
246
181
-154

2 476

-94

1 069
764
288
80
135
-170

2 166

1 001
903
289
-3
120
-148

2 162

-232

4 755

7 527

3 731

2 479

11 115

2 382

2 166

1 930

905
847
-74
9
176
-163

817
674
141
37
212
-146

1 700

1 734

-931

769

-450

1 284

4 705
766
-160
494

5 805

7 441
966
-1 639
-1 284

5 484

3 691
346
-662
-145

3 229

2 437
544
-569
46

2 457

11 081
-8 208
-147
158

2 884

2 356
540
-396
-214

2 286

2 113
418
-221
199

2 509

-644

1 859
965
-504
-360

1 961

-123

679
1 802
-398
443

2 526

-824

1 137
1 448
-191
-217

2 176

-815

Cash flow from investing activities***

-1 653

-1 352

-1 332

-1 924

-1 050

-1 005

Cash flow after investments

4 153

4 132

1 897

533

1 834

1 281

1 865

1 838

1 702

1 361

Dividends paid
Share buy-backs

-2 592
-1 119

-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 loss of revenue, associated with the turbine breakdown in Workington (SEK 266 million).
2021: Increased energy costs of SEK -330 million due to the turbine breakdown in Workington.
2019: Revaluation of biological assets amounting to SEK 9 079 million, impairment loss for associates of SEK -109 million and provisions of SEK -200 million.
2018: Restructuring costs of SEK -94 million.
2016: Disposal 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.
**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.

112

Holmen Annual Report 2023

Ten-year review, finance

SEKm

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

Total assets

2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

For a ten-year review of the data per share, see page 55.

56 348
12 781
9 277
1 313

52 151
12 477
14 758
2 050

47 080
12 251
7 956
814

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

79 719

81 436

68 101

62 543

59 340

36 912

34 891

35 456

36 434

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

56 923
13 858
3 182
5 755

56 950
13 490
4 195
6 801

46 992
11 610
4 915
4 584

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

Total equity and liabilities

79 719

81 436

68 101

62 543

59 340

36 912

34 891

35 456

36 434

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 on capital employed, %**
Industry (Paperboard, Paper & Wood Products)
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.

44 768
5 889
1 737
2 139
4 283
-22

41 354
5 632
1 939
2 067
4 618
3 485

37 300
5 169
1 637
2 278
4 069
640

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

58 793

59 095

51 093

46 697

43 895

26 261

24 972

25 190

25 653

26 876

3
31
0
21

27
8

7
3

16
32
25
30

52
13

11
4

11
1
34
21

26
9

7
9

13
2
8
15

12
6

5
10

7
9
4
14

12
9

35
9

12
6
14
15

15
10

10
12

14
5
5
13

13
9

8
13

17
5
0
14

13
9

7
19

15
-1
1
11

6
6

3
23

13
2
3
11

7
6

4
28

2 702
448
896
1 498
1 658

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

Ten-year review, finance

Holmen Annual Report 2023

113

2023

fiVe-yeAr reVieW,
sustaiNAbiliTy

Production
Paperboard, ’000 tonnes
Market pulp, ’000 tonnes
Paper, ’000 tonnes
Wood products, ’000 m3
Own production of hydro and wind power, GWh
Electricity production at the mills, GWh

Raw materials
Wood, million m3sub
Purchased pulp, ’000 tonnes
Thermal energy, GWh1)
Electrical energy, GWh
Water use, million m3
Plastic granules/foiling material, ’000 tonnes
Chemicals, ’000 tonnes
Filler, pigment, ’000 tonnes

Emissions to air, tonnes
Sulphur dioxide (counted as sulphur, S)
Nitrogen oxides
Particulates
Fossil carbon dioxide, ’000 tonnes
Biogenic carbon dioxide, ’000 tonnes

Emissions to water, tonnes
AOX (chlorinated organic matter)
Nitrogen
Phosphorus
COD (organic matter), ’000 tonnes
Suspended solids (SS), ’000 tonnes

By-products, ’000 tonnes
To material production2)

Waste, ’000 tonnes
Hazardous
Sent to landfill (wet)

Energy supplies, GWh
Branches, treetops and peat
Electrical and thermal energy, internal and external
To energy production, external

2023 2022 2021 2020 2019

462
76
888
1 447
1 502
566

5.94
71
4 594
3 501

68
2.6
139
184

54
892
53
41
1 676

36
182
18
17
3.8

513
77
1 016
1 468
1 561
520

6.36
77
4 648
3 930

71
3.0
147
162

49
899
49
42
1 657

36
162
12
19
3.6

529
80
998
1 465
1 230
445

6.34
77
5 291
3 872

70
3.3
147
162

50
811
52
81
1 423

39
187
16
19
3.2

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

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

412

469

412

252

208

1.4
0.8

1.8
6.3

2.0
3.7

2.3
4.9

2.5
0.9

367
367
2 292

325
377
1 801

291
317
1 719

115
351
1 418

101
372
1 186

1) The calculation model was modified in 2022, which means that the data is not fully comparable with the data for 2019–2021.
2) The business area Wood Products has been included since 2021.

Greenhouse gas emissions Scope 1–3, ’000 tonnes CO2e

2023 2022 2021 2020 2019

Scope 1: Direct greenhouse gas emissions

Scope 2: Indirect greenhouse gas emissions from purchased electrical energy

Scope 3: Emissions in the value chain

of which category 1: Purchased goods and services
of which category 2: Capital goods
of which category 3: Fuel and energy-related activities1)
of which category 4: Upstream transport2)
of which categories 6 & 7: Travel3)
of which category 9: Downstream transport4)

Total emissions

609
196
116
40
54
4
199
675

604
191
95
40
54
4
220
691

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) Transport of fuel and emissions from forestry, such as emissions from logging, forestry and chipping. 2) Transport of woody biomass, Well to Wheel.
3) Based on the travel survey conducted by Holmen in 2019. 4) Refers to transport of finished products, Well to Wheel.

114

Holmen Annual Report 2023

Five-year review, sustainability

Employees
Employees
Average no. of employees (FTE)

of whom women, %
of whom men, %
of whom temporary employees, %
Average age1)

Employees covered by collective bargaining agreements, %
Female
Male
aged <30
aged 30–44
aged 45–60
aged >60

Office workers, %
Female
Male
aged <30
aged 30–44
aged 45–60
aged >60

Personnel turnover, %1)
Personnel turnover

of which given notice
of which retiring
of which leaving at own request

New employees

Sickness absence, %
Total

of which longer than 60 days

Number of industrial accidents 2)
Industrial accidents, more than 8 hours of absence,
per million hours worked

Gender equality, %1)
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

Union cooperation, %3)
Percentage of employees that work at a unit with a collective agreement4)

1) Relates to permanent employees.
2) Relates to employees.
3) Relates to permanent and temporary employees.
4) Relates to Swedish and UK units, all of which have collective agreements.

2023 2022 2021 2020 2019

3 546
22.3
77.7
10.4
41.2

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

14
86
18
33
34
16

32
68
8
37
45
10

7.4
0.2
1.6
4.5
7.0

4.6
1.9

13
87
17
33
35
13

32
68
8
38
44
9

8.3
0.1
2.3
5.1
5.3

4.7
1.4

12
88
16
32
31
21

31
69
8
37
45
10

8.9
0.3
3.0
4.3
5.1

4.1
1.4

12
88
13
29
38
19

26
73
6
26
34
8

7.3
0.6
3.1
3.0
2.6

4.3
1.7

12
88
12
28
40
19

29
71
7
37
45
11

7.9
0.9
2.2
4.4
2.5

3.8
1.6

5.2

7.6

5.6

4.3

5.7

24.8
75.2
33.8
66.2

23.8
76.2
44.4
55.6

23.1
76.9
30.3
69.7

22.7
77.3
35.5
64.5

22.9
77.1
39.5
60.5

Five-year review, sustainability

Holmen Annual Report 2023

115

Business overview

holmeN 2023

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

116

Holmen Annual Report 2023

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 2023
Total land acreage
Total forest land acreage*
– of which nature conservation areas
Productive forest land**

Total volume of standing timber
on productive forest land

1 305 000 ha
1 161 000 ha
207 000 ha
1 046 000 ha

126 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

River

Hydro power plant %1)

GWh2) Commissioned

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

1) Holmen’s share of production. 2) Holmen’s share of production in a normal year.

Customers and market

1957
1962

1989
1993
1986
1986
1985
1995

1962
1961
1974
1974

1915
2009

1975
1975
1952
1961
1976

1990
1923

2014

2021

Production
facilities

Iggesund Mill
Products: Multi-layered paperboard made
from bleached chemical pulp (SBB).
Brands: 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 products for joinery and
construction plus planed and painted
construction products.

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 2023

117

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

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.

Net financial debt divided by total equity.

Carbon dioxide (CO2)

Carbon is the building block of life and is part of all
living things. Biogenic carbon dioxide is released
when biological material decays or 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.

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,
amortization and impairment.

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
112 states which items have been treated as items
affecting comparability over the past 10 years.

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 compara-
bility) expressed as a percentage of net sales.

Operating profit

Profit before net financial items and tax.

Return on capital employed

Operating profit/loss (excluding items affecting
comparability) expressed as a percentage of
average capital employed, based on quarterly data.

Return on equity

Profit for the year expressed as a percentage of
average equity, calculated on the basis of quarterly
data.

Net financial debt

GRI

Nitrogen

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.

Particulates

Particles of ash formed in incineration of bark or
liquor, for example.

Phosphorus (P)

An element contained in wood. Excessive phosphorus
in the water may cause over-fertilisation (eutrophica-
tion) 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.

FBB

SBB

Folding Box Board. Multi-layered paperboard made
from mechanical and chemical pulp.

Solid Bleached Board. Multi-layer paperboard made
from bleached chemical pulp.

Filler

Sulphate pulp

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.

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.

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 (SS)

Waterborne substances consisting of fibres and
particles that can largely be removed using a fine
mesh filter.

ISO 9001

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.

An international standard for quality management
systems. Primarily aimed at companies and
organisations that wish to improve two aspects
of their operations, i.e. to ensure more satisfied
customers and lower costs.

ISO 14001

An international standard for environmental
management. Important principles in ISO 14001
include regular environmental audits and a gradual
increase in the requirements.

ISO 45001

A series of international standards regarding a
management system for health and safety. The
management system includes monitoring,
evaluating and reporting on health and safety work.

ISO 50001

An international energy management systems
standard that provides a framework for energy
efficiency measures.

m3 growing stock, solid over bark

The volume of tree stems, including 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.

118

Holmen Annual Report 2023

Definitions and glossary

A LIST
2023
FORESTS

High rating in CDP’s
annual assessment
CDP is an independent organisation that analyses climate
data from more than 21 000 companies every 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 to the
CDP Forest Program since 2013. The results show that we
have a good strategy and management to mitigate negative
impacts of climate change. In the 2023 assessment, Holmen
was rated A- in the CDP Climate Program and was one of
30 companies to be rated A in the CDP Forest Program.

Top EcoVadis rating
All Holmen’s paperboard and paper mills have once
more been awarded a Platinum rating by the international
analysis company EcoVadis. This confirms 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.

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

Calculation of Holmen’s climate benefit

Comments to accompany calculations on page 38
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 2023 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.

The Biodiversity
Intactness Index

Description of the Biodiversity Intactness Index
on page 41
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 stated as a Biodiversity Intactness Index
showing what percentage of a region’s natural biodi-
versity 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 function-
ing as it always has, while 0 indicates an ecosystem
that is completely depleted. The desirable level in an
area should be 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.
Sources: Natural History Museum. Global Forest Watch.

Holmen Annual Report 2023

119

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