Holmen
Annual Report 2024

Plain-text annual report

Annual Report 2024 beyond net zer0 When you reach Net Zero, should you just stop there? 2.1 Mtonnes CO2 Net growth in our growing forest 0.4 Mtonnes CO2 Stored in our products -0.8 Mtonnes CO2e Total emissions in our value chain Greenhouse gas emissions 2005–2024 from Holmen’s production, Ktonnes CO2e 70 75 80 85 90 95 100 2023 2010 2000 1990 1980 1970 0 200 400 600 800 Biodiversity Intactness Index Sweden 90% threshold value for healthy ecosystems 2    Holmen Annual Report 2024 2    Holmen Annual Report 2024 For us at Holmen, the answer is simple: We keep moving forward. The uptake of carbon dioxide by our growing forests and the storage of carbon dioxide in their products is already three times greater than our total fossil emissions. And while actively managing the forest in a responsible way and constantly replanting new trees improves the sequestering of carbon dioxide, the renewable raw material we process also helps other companies reduce their carbon footprint. Being climate positive is quite simply inherent to our core business. That said, it is also not in our nature to sit back and take credit for the power of the forest. On the contrary, it spurs everyone at Holmen to work harder, which is why we have reduced our own fossil emissions by more than 90 per cent over the past 20 years, while ensuring that forestry is not conducted at the expense of Sweden’s biodiversity. We are pleased to see that our efforts are resulting in a steady stream of positive developments for our forests and our industries. When we talk about going Beyond Net Zero, we mean not only looking at our own impact but also contributing positively to the rest of the world. A long-term climate agenda that we will continue to refine and invest in, for our own benefit and for future generations. Holmen Annual Report 2024    3 Holmen Annual Report 2024    3 2024 Business overview Holmen in brief   CEO’s message   06 Strategy and targets   08   12   Forest   18 Wood Products   22 Board and Paper   Renewable Energy   30   34   Biodiversity   38 Environment   40 42 Governance Corporate governance report   44 Risk management   Shareholder information   54 Board of Directors   56   58 Calendar and information   Financial report   60 Notes   66 Proposed appropriation of profits   93 Auditor’s report   95 Sustainability report General disclosures   98 Climate change   101 Pollution   105 Biodiversity and ecosystems   107 Resource use and circular economy   109 Own workforce   111 Workers in the value chain   113 Affected communities   115 Business conduct   116 Taxonomy   118 GRI index   122 Auditor’s Limited Assurance Report   126 Additional information Key figures   127 Ten-year review, finance   128 Five-year review, sustainability   130 Business overview   132 Definitions and glossary   134 100% Holmen-produced This entire annual report is made using Holmen’s own products. The cover is printed on Invercote Touch, manufactured at Iggesund Mill. This is an uncoated paperboard with a high, stable whiteness that delivers excellent colour reproduction proper- ties for print production. 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 Touch are made using fresh fibre from sustainably managed forests. Holmen Aktiebolag (publ.), corporate identity number 556001-3301, hereby submits the annual report for the parent company and the Group for the financial year 2024-01-01–2024-12-31. The annual report comprises the administration report (pages 4, 8–11, 16–17, 42–59, 93–94 and 127) and the financial statements, together with the notes and supplementary information (pages 60– 92). The statutory sustainability reporting in acc­ ordance with the Annual Accounts Act comprises pages 98–122. 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 98–126. The information is audited by a third party, see separate assurance report on page 126. 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 Touch 330 gsm. The insert is printed on Holmen TRND, 2.0 – 80 gsm. Layout: Identity Works. Production: Gylling Produktion AB. Photos: Jonas Westling, Ulla-Carin Ekblom, Malin Lauterbach, Christian Ekstrand, Kollberg & Karlsson, Amanda Sveed and others. Print: Larsson Offsettryck AB. 4    Holmen Annual Report 2024 Holmen grows houses We manage the forest actively and sustainably, while also using 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. 2024 in figures Net sales 22 759 SEKm Operating profit 3 721SEKm Cash flow* 3 728 SEKm No. of employees 3 498 *Before investments and changes in working capital Total shareholder return Holmen B and OMX Stockholm   Holmen B    Stockholm Stock Exchange (OMXSGI)  0 100 200 300 400 500 600 Jan 25 24 23 22 21 20 19 18 17 16 15 Index Holmen Annual Report 2024    5 Holmen in brief »We have created a platform for continued growth for many years to come.« »The more we produce, the greater our contribution to a better climate.« Dear Shareholders, CEO’s message In 2024, central banks brought inflation under control and began to implement interest rate cuts across the board. However, this has not yet reignited consump- tion or new construction, and market conditions remained­ challenging while competition for forest raw material was high. Despite a weak market, our indus- trial operations generated a healthy return on capital of 16 per cent. Coupled with high earnings from the forest­, we were able to maintain a good level of operating­ profit at SEK 3 721 million. Holmen’s business is based on the forest and land we own. We have been successful in generating value from our assets, and the merger of the Board and Paper business areas in early 2024 further strengthened our competitiveness. Our business model now focuses on four distinct business lines: forestry, hydro and wind power, the woodworking industry, and process industry operations. In light of the solid earnings and our strong financial position, the Board of Directors proposes that the ordinary dividend per share increases­ from SEK 8.5 to SEK 9, with the payment of an ­extra dividend of SEK 3. Focus on global competitiveness The EU’s ambitious plans to mitigate climate change and ­ protect biodiversity have been challenged by weak markets and an increasingly protectionist world. It is clear that the ­transition to a more sustainable society risks being sidelined as competitiveness is prioritised over green investments. Whether the necessary ­climate transition has simply lost momentum or is shifting focus from regulation and bureaucracy to increasing the pace of inno­vation and European competitiveness remains to be seen. It is clear that a green industrial policy that eases the EU’s regulatory­ burden and reduces dependence on fossil fuels can create­ ­opportunities for a growing European bioeconomy. Our sustainably managed forests capture and store carbon ­dioxide, and the renewable products we offer replace fossil alternatives­, while our production of hydro power and wind power contributes to the transformation of Europe’s energy system­. The more we produce, the greater our contribution to a better climate. With a large forest holding and the hydro power that is so critical for Sweden, well-invested industries and a strong balance sheet, Holmen is well positioned to contribute­ to the green transition. Forest and energy are in-demand resources 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. With the forest as a foundation, we grow trees for sustainable construction while also harnessing the energy that blows over the treetops and flows in the rivers. We then make renewable­ packaging, magazines and books from the forestry­ residues­. While the forest is a renewable resource, the supply of raw material­ is limited across much of the world. Even in a weak market­, demand for forest raw material has remained high and Swedish wood prices have climbed by more than 50 per cent since 2021. High wood prices are good for us in our capacity as a forest owner, but the competition for raw material makes it challenging to supply our industrial facilities with wood at a competitive cost. Nevertheless, with our large forest holdings behind us, we have a secure supply of raw material for the long term, which makes us well placed to continue developing our industries, even in times of timber­ shortages. Within Holmen, investments in fossil-free technology have drastically reduced fossil emissions from our plants and we are now largely fossil-free in our own production, while being a signifi- cant­ producer of renewable hydro and wind power. We have good potential to establish additional wind power on our land to support new green initiatives or the fossil-free electricity needs of emerg- ing data centres. Renewable products with a low carbon footprint The building sector is responsible for more than a third of ­Europe’s carbon emissions and making the manufacture of the dominant­ construction materials, cement and steel, sustainable is both expensive­ and difficult. Large-scale wood construction is an option­ that not only avoids fossil fuel emissions but also stores carbon in the building for a long time. Even with the weakness of the construction sector in recent years, we are seeing a growing interest in building in wood. With well-invested sawmills and expanded­ processing capacity, we are well positioned when construction­ picks up pace once more. In the area of paperboard and paper, we have chosen to focus on niches where fresh fibre comes into its own. Since the merger­ into one business area, we have advanced our market po- sitions, while increasing productivity and investing to enable the production of transport packaging. With well-invested production­ facilities and strong product offerings, we are favourably­ placed to continue developing our business and helping our customers reduce their carbon footprint without sacrificing competitiveness. The uptake of carbon dioxide by our growing forests and the storage of carbon dioxide in their products is already three times greater than the fossil emissions in our value chain. As the world strives for net zero, we are already there. The best thing we can do for the climate is to help more customers replace­ fossil materials with renewables, and we will continue to do so. For our sake and for future generations. Stockholm, 24 February 2025 Henrik Sjölund, President and CEO Holmen Annual Report 2024    7 CEO’s message Growing a sustainable future Strategy and targets Our business concept is to own and add value to the forest Holmen’s extensive forest holdings are the foun- dation of our business. Using our own produc- tion 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 cus- tomers and shareholders, but also contributes to a better climate and thriving rural communities. Wood Products The Wood Products business will grow through products and solutions for sustainable building. Board and Paper The consumer packaging and paper products business will build on its position as market leader and also develop by offering resource-efficient alternatives to traditional products. 8    Holmen Annual Report 2024 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. Renewable Energy The Renewable Energy business will grow by establishing wind power on Holmen’s own land. Holmen Annual Report 2024    9 Strategy and targets Strategy and targets We aim to create value that stands the test of time – while also contributing to a better climate Annual harvest, ’000 m3sub/year Industry’s return on capital employed, %* Deliveries of hydro and wind power, GWh   Harvest    Thinning    Storms and other events *Forecast *Excl. items affecting comparability   Hydro power    Wind power 0 400 800 1 200 1 600 2 000 24 23 22 21 20 19 18 17 16 15 Forest The forest is sustainably managed to pro- vide a good annual return and stable value growth. Growth and harvests will increase over time. In 2024, volumes amounted to 2.6 million m3sub, which is slightly lower than the current harvesting plan. The ­value of the Group’s forest assets has ­increased by more than 40 per cent since 2019 to SEK 58 billion. Industry The industrial operations are run with a ­focus on long-term profitability. The target is for a sustained return of over 10 per cent on capital employed. Over the past 10 years, the return for the industrial side of the business has averaged out at 19 per cent, and in 2024 the figure was 16 per cent, driven by good profitability in the ­paper business. Renewable Energy Deliveries of renewable energy will in- crease by complementing our existing ­hydro power with wind power on our own land. Holmen currently has two wholly owned wind farms that produced 510 GWh in 2024, and another wind farm ­under construction is expected to become operational in 2026. 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2040- 2044* 2035- 2039* 2030- 2034* 2025- 2029* 2020- 2024 2015- 2019 2010- 2014 2005- 2009 0 20 40 60 24 23 22 21 20 19 18 17 16 15 16 10    Holmen Annual Report 2024 Strategy and targets Climate benefit, million tonnes CO2e* Net debt as % of equity Dividend and share buy-back, SEKm *Climate benefit for 2023 and 2024 has been ­calculated using a new model. For further information, see page 104.   Ordinary dividend paid    Share buy-backs   Extra dividend paid    *Board proposal Climate benefit Climate benefit will increase 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. The erec- tion of new wind turbines and expansion of the wood products business have in- creased Holmen’s climate benefit, which in 2024 came in at 8.3 million tonnes CO2e, with all the business areas making a positive contribution. Capital structure Our financial position is to be strong in or- der to secure room for manoeuvre when making long-term commercial decisions. Net financial debt will not exceed 25 per cent of equity. Net financial debt in rela- tion to equity has consistently been below 10 per cent over the past five years, and amounted to 6 per cent in 2024. Good cash flow has allowed for a higher divi- dend and share buy-backs, while retaining a strong financial position. Dividend Holmen will generate a good annual divi- dend for shareholders. The level is deter- mined by the Group’s profitability, invest- ment plans and financial situation. The dividend is supplemented with share buy- backs where this is judged to create long- term value for shareholders. Alongside the gradual increase in the ordinary dividend, extra dividends and share buy-backs have also been implemented. The Board pro- poses that the 2025 AGM approve a divi- dend of SEK 9 per share and an extra divi- dend of SEK 3 per share. 0 2 4 6 8 10 24 23 22 21 20 19 8.3 0 10 20 30 24 23 22 21 20 19 18 17 16 15 6 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 25* 24 23 22 21 20 19 18 17 16 Holmen Annual Report 2024    11 Strategy and targets 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 interfer- ing on the forestry. Forest products have a key role in reduc- ing our dependence on fossil raw materi- als and demand will be in ever greater going­ forward. Active forestry improves the growth of trees and thus increases the amount of renewable raw material. Owning­ 1.3 million hectares of land gives Holmen big opportunities to create value over time. The growth in the forest is the result of 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 2024, Holmen’s total volume of standing timber amounted to 127 million m3 growing stock, solid over bark, which is 5 per cent higher than 10 years ago. In addition to 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 renew­ able packaging, magazines and books. Revenue from our forest holdings Owning forest naturally provides a chance to earn revenue when the forest is harvested. The best prices are achieved for the large logs that are turned into ­construction material. Holmen uses the narrower­ part of the tree and wood from thinning, along with residual wood chips from the sawmills, to manufacture paper- board and paper. Wood products used for houses­ and other structures add consider- able value by storing carbon for a long ­period while at the same time replacing fossil emissions from the manufacture of 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 renew- able 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 wind power on our land. This is a great way to derive added value from our land, as higher energy ­production provides a good cash flow. Holmen currently has two wholly owned wind farms, with annual production of 0.6 TWh, contributing to the 1.9 TWh hydro­ and wind power supplied in total in a ­normal year. In 2023, we obtained ­permits for another two wind farms on our land. One of these, Blisterliden Wind Farm, is under construction in Väster­ botten and is planned to be operational by 2026. Other opportunities on our land. The availability of cheap and fossil-free electricity makes northern Sweden attrac- tive for the establishment of data centres and other electricity-intensive industries. 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 Stockholm Stock Exchange 0 100 200 300 400 500 600 Jan 25 24 23 22 21 20 19 18 17 16 15 Index 0 5 000 10 000 15 000 20 000 25 000 24 23 22 21 20   Net sales    Operating costs   Holmen B    Stockholm Stock Exchange (OMXSGI) 12    Holmen Annual Report 2024 Investment case Value of forest confirmed by historical transactions Holmen’s land holdings cover 1.3 million hectares, of which a little over a million is productive forest land. The land holdings are split across around 4 300 forest properties from Småland in the south to Västerbotten in the north. A large number of forest property transac- tions are carried out every year in Sweden. 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 2024, the book value stands at SEK 57 843 (56 348) million, which averages out at SEK 55 (54) thousand 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. For more information about Holmen's valuation of forest land and biological ­assets, see pages 78–81. Holmen owns 1.3 million hectares of forest and land in Sweden, equivalent to almost two million football pitches. Holmen's wood prices, SEK/m3sub Price of forest properties, SEK/m3 growing stock, solid over bark 200 350 500 650 800 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002   Real    Nominal  0 100 200 300 400 500 600 700 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002   All of Sweden Source: Ludvig & Co based on transactions they have brokered themselves. Holmen Annual Report 2024    13 Investment case Investment case Focus on climate and biodiversity Our world is governed to a large ­extent by the EU’s high ambitions to limit global warming and protect biodiversity. Since energy accounts for almost three quarters of global greenhouse gas emissions, the ­energy issue is closely tied up with our opportunities to curb climate change. 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. If we are to successfully transition to a fossil-free society, we simply 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 popu- lation without compromising the ability of ­future generations to do the same. 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. Utilising the ­resources offered by growing forests­ ­enables the phasing out of fossil­-based ­alternatives, but it also comes with great responsibility. Forests have to be sustain- ably managed, with healthy ecosystems and rich biodiversity, in order­ to provide the renewable raw material­ needed for the transition. We contribute renewable products and green electricity Holmen has been managing forests since the 17th century and the trees we plant today will grow for almost 100 years ­before they are ready to be harvested. And an awful lot can happen in that time. The forest could be hit by drought, fires, storms and pests. Active management ­increases the resilience of the trees even as knowledge of how to create healthy ecosystems and thriving forests constant- ly grows. With a production cycle in the forest of almost a century, change does not happen overnight, but several indica- tors clearly show positive developments. International studies also show that the status of biodiversity in Sweden has improved over the last 50 years, currently putting it well above the European average. 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 timber supplies are coming under increased pressure. As one of ­Sweden’s biggest forest owners, we are largely able to supply our Swedish produc- tion units with renewable raw material from our own sources, which boosts our competitiveness while also promoting the development of our industrial­ facilities. At a time when the whole world needs to transition away from fossil materials and energy sources, electricity use is also expected to increase, creating substantial­ demand for more fossil-free electricity. Much of the energy transition has already been achieved within Holmen­ and we have drastically reduced the fossil­ emissions from our industrial sites – not least in comparison with European industry as a whole. In combining forestry and electri­ city production on our land, we are also taking responsibility for our electricity consumption, while playing our part in the energy transition that ­society so badly needs. Holmen’s sustainably managed forests capture and store carbon dioxide, and the renewable products we offer ­replace fossil alternatives, while our ­production of hydro power and wind power contributes to the transformation of Europe’s energy system. The more we produce, the greater our contribution to the green transition. Greenhouse gas emissions 2005–2023 Biodiversity Intactness Index 1970–2023*   European industry excl. incineration (left)    Holmen’s production, scope 1 emissions (right) *90 per cent is a threshold value for healthy ecosystems.   Europe    Sweden 0 100 200 300 400 500 600 700 2023 2020 2017 2014 2011 2008 2005 0 100 200 300 400 500 600 700 Mt CO2e Kt CO2e 70 75 80 85 90 95 100 % 2023 2010 2000 1990 1980 1970 14    Holmen Annual Report 2024 Investment case We reduce our customers’ fossil footprint Holmen gives quality-conscious customers all over the world access to products from the Swedish forest, and the best thing we can do for the climate is to help more customers replace fossil alternatives with renewables. It is here too that Holmen’s contribution to the green transition becomes 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. Wood products for sustainable building Building in wood offers many advantages. The manufacture of wood products is energy-efficient and the carbon dioxide absorbed by the growing trees continues to be stored in the buildings for a long time. Despite the weakness of the con- struction sector in recent years, wood construction has made positive advances in Sweden and interest in sustainable building in wood is steadily growing. According to a study by Prognoscentret, the share of ­timber frames in newbuilds grew from 12 per cent to 23 per cent in Sweden between 2018 and 2023. The greatest ­increase was seen in public buildings, including schools and care facilities, with the proportion of timber frames reaching 40 per cent in this category in 2023. Use of timber frames is increasing in Sweden, %   Wood    Concrete and steel Climate-smart fibre products With renewable raw material, fossil-free electricity and resource­-efficient production, we are able to offer products with a low carbon footprint. Holmen began planning for the transition from fossil energy use in our industries back in the early 2000s, and today we have switched to using­ mainly fossil-free electricity and renewable energy from biofuels in our production. This is also a major reason why our paper- board and paper products have a low carbon footprint ­compared to those of many of our competitors. Products with low footprint, tonnes CO2e/tonne product   Scope 1 (own emissions)    Scope 2 (emissions from purchased energy) Wind power creates opportunities for more green electricity 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. As a major landowner, Holmen also has considerable opportunities to generate more renewable electricity by building wind power at a ­competitive cost. Holmen’s entire land holdings, totalling 1.3 million ­hectares, have been analysed, and 260 areas appear to have potential for wind power. Of these, 160 areas are judged suitable sites for wind power. Holmen currently has around 30 projects in various stages of development, from in-depth analysis to handling the permit application. 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Holmen Sweden Finland France UK Italy Spain Germany Analysis of Holmen’s land holdings No. of areas Total area, hectares Analysed areas with potential for wind power 260 380 000 Of which, areas judged suitable for wind power 160 260 000 Of which, priority areas 30 80 000 0 20 40 60 80 100 2023 2018 Holmen Annual Report 2024    15 Investment case profits hold up in 2024 Operating profit* Business area, % Net sales and operating margin Operating profit/loss and return   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  Total: 3 721 SEKm   Forest 1 947 SEKm   Renewable Energy 265 SEKm   Wood Products 2 SEKm   Board and Paper 1 702 SEKm *Excl. Group-wide Cash flow, SEKm Net debt as % of equity Capital employed* Business area, %   Forest   Renewable Energy   Wood Products   Board and Paper *Excl. Group-wide 0 5 000 10 000 15 000 20 000 25 000 24 23 22 21 20 19 0 10 20 30 40 50 22 759 16 SEKm % 0 2 000 4 000 6 000 8 000 24 23 22 21 20 19 3 721 0 15 30 45 60 16 5 % SEKm 0 5 10 15 20 25 24 23 22 21 20 19 6   Dividend    Share buy-back   Investments    Acquisitions   Cash flow before investments and changes in working capital 0 2 000 4 000 6 000 8 000 24 23 22 21 20 19 647 2 066 1 831 3 728 75 8 13 4 50 7 43 0 16    Holmen Annual Report 2024 The year in brief The year in brief In 2024, central banks brought inflation under control and interest rates have been cut across the board, but this has not yet reignited consumption and new construction. Despite challenging market conditions, we were able to maintain a good profit level of SEK 3 721 million, thanks to our integrated business model. Business area Comments Outlook Forest Competition was high in the wood market and the supply of forest raw material has been insufficient to meet the growing demand from the forest industry and the energy sector. Wood prices climbed further in 2024, raising the operating profit from Forest to SEK 1 947 million. The value of Holmen’s forest properties, based on transaction prices, rose by SEK 1.5 billion to SEK 58 billion. Demand for logs remains high even with a weak construc- tion sector. Despite production constraints at Nordic mills, competition for pulpwood is favourable due to a combination of closed Russian borders, pulp mill expansion and increased use of biofuels by heating plants. 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. At the same time, it is becoming increasingly clear that forests have an important role to play in the transition to a fossil-free world. Renewable Energy Energy remains expensive in Europe due to high fossil fuel prices. Nevertheless, electricity prices in northern Sweden were 30 per cent lower than the average for the past twenty years, partly due to unusually high water flows. The low electricity prices contributed to a de- crease in operating profit to SEK 265 million. In 2024, Renewable Energy’s average sales price was 30 per cent higher than the market price in northern Sweden, as it was possible to steer production towards times when it was needed most. With renewable electricity in high demand, we continue to direct hydro power generation towards times of peak usage and offer services to stabilise the electricity grid. We are also focusing on the development of permits for new wind power, targeting projects with good wind conditions and a low cost of connection to the electricity grid. Wood Products The wood products market of 2024 was still marked by the weakness of the construction sector, while ­supply was limited due to global raw material shortages. Operating profit for Wood Products remained low in 2024, at SEK 2 million. Selling prices rose and revenue from wood chips and biofuel increased, but this was offset by rising costs for logs. There is great interest in building with wood because of its positive climate footprint, but the construction market is weak, with low rates of newbuild projects. With well-invest- ed sawmills and greater processing capacity, we neverthe- less see good opportunities to develop the wood products business in pace with the increasing demand for sustainable building materials. Board and Paper Demand for consumer paperboard in Europe improved in 2024 but remained below normal, while demand for paper was on a par with the previous year. Paperboard prices were broadly stable, but paper prices fell back from their very high level in 2023. Despite rising raw material costs, Board and Paper delivered an operating profit of SEK 1 702 million thanks to production effi- ciencies, increased deliveries and higher revenue from ancilliary services. The market for consumer paperboard improved in 2024 ­after the destocking of 2023, but consumption in Europe is still lower than it has been historically. 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. Given our strong market positions in selected ­niches, and our well-invested production facilities, we see good opportunities­ to create ample added value. Holmen’s financial position remains strong, even after dividends, share buy-backs and investments. The Group’s net financial debt at year end amounted to SEK 3 397 million, corresponding to 6 per cent of ­equity. With a strong financial position, we are well equipped for the transition to a fossil-free world. Key figures 2024 2023 Net sales, SEKm 22 759 22 795 Operating profit/loss, SEKm 3 721 4 755 Profit for the year, SEKm 2 861 3 697 Diluted earnings per share, SEK 18.0 23.0 Ordinary dividend per share, SEK 9.0* 8.5 Extra dividend per share, SEK 3.0* 3.0 Industry’s return on capital employed, % 16 27 Cash flow before investments and changes in working capital, SEKm 3 728 5 311 Cash flow from investments, SEKm** 2 066 1 653 Equity, SEKm 57 370 56 923 Net financial debt, SEKm 3 397 1 869 Net debt as % of equity 6 3 Average no. of employees (FTE) 3 498 3 546 *Board proposal. **Net including company acquisitions but excluding changes in non-current financial receivables. Holmen Annual Report 2024    17 The year in brief Holmen focuses on achieving high and profitable growth, while also ensuring that all naturally occurring species can thrive in the forest landscape. Holmen’s land hold- ings 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 have a strong position in the wood market and are largely able to supply our Swedish production units with renewable raw material from our own sources, which boosts our competitive- ness while also promoting the develop- ment of our industrial facilities. 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 possi- ble. As the trees grow, they absorb carbon dioxide, which remains stored in the wood products that are used to build homes. ­Using the renewable forest 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. When we harvest trees, nothing goes to waste. The logs are used for the produc- tion of wood products for sustainable building, while the narrower parts of the trees and wood from thinning, along with residual products from the sawmills in the form of wood chips, are used to manufac- ture ­paperboard and paper. The remain- der comprises branches, tops and bark, which are used to produce bioenergy. The forest ecocycle The forest is ready for harvesting when growth tails of, along with the tree’s capa­ city to absorb and store 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. 45 million seedlings. Holmen’s two ­nurseries – one in Gideå and one in Frigge- sund – produce 45 million spruce and pine seedlings each year, the majority of which are planted on our own land. Selected seeds and organic fertiliser produce healthy and vigorous seedlings that are given a special coating 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 forestry, and 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 man- aged over the long term in order to preserve existing natural assets and to create new ones. Holmen invests a little over SEK 200 million a year in future growth through silviculture and fertilisa- tion. Holmen’s­ forestry is certified and all the wood is traceable. Research and development Given the major contribution that the ­forest makes to both the climate and the Swedish economy, management of the forest is of great national, regional and ­local significance. It is in our interest and equally in the interest of society for us to manage our forests actively and sustaina- bly and for us to make wise use of the raw material. Holmen and other industry peers have therefore joined forces to make poli- ticians, authorities and the general public more aware of how vital the forest is for the climate, and the importance of forest- ry 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 re- search and collaboration. Therefore there are a hundred or so research projects con- ducted on our land, both independently and in partnership with research organisa- tions, universities and other stakeholders. Holmen’s Knowledge Forests. To raise awareness of our forestry and forest re- search, we have established four Knowl- edge Forests. The forests are selected for their specific biological conditions and are used to explore, gather and pass on knowledge. This is also our way of showing how sustainable forestry can promote growth while at the same time increasing biodiversity in the forest. Holmen’s nurseries produce 45 million seedlings each year sustainable forestry The forest is a stable source of revenue for Holmen and the strategy is to increase the revenue from and future value of the forest holdings through active and sustainable forestry with high growth. Forests also provide significant climate benefits by sequestering carbon dioxide and supplying industry with renewable raw materials. Forest 18    Holmen Annual Report 2024 Forest   Inventory * Estimate Operating profit   Operating profit/loss excluding items affecting comparability Key figures 2024 2023 Net sales, SEKm 9 318 7 996 Of which from own forest, SEKm 1 990 1 768 Operating profit/loss, SEKm 1 947 1 523 Investments, SEKm 229 222 Book value, forest assets, SEKm 57 843 56 348 Average no. of employees (FTE) 477 459 Deliveries, own forest, ’000 m3sub 2 643 2 702 Comment on results Competition was high in the wood market and the supply of forest raw material has been insufficient to meet the growing demand­ from the forest industry and the energy sector. Wood prices climbed fur- ther in 2024, raising the operating profit from Forest to SEK 1 947 million. The value­ of Holmen’s forest properties is rec- ognized based on transaction prices and rose by SEK 1.5 billion to SEK 58 billion. Holmen’s forests 2024 Total land acreage    1 303 000 ha Total forest land acreage*    1 160 000 ha – of which nature conservation areas    211 000 ha Productive forest land**    1 045 000 ha Total volume of standing timber on productive forest land    127 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 interna- tional 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. SEKm 0 500 1 000 1 500 2 000 24 23 22 21 20 19 1 947 0 50 100 150 2024* 2019 2010 2000 1993 1988 1975 1965 1955 1948 Volume of standing timber, m3 growing stock, solid over bark per hectare of productive forest land Holmen Annual Report 2024    19 Forest Forest High demand for 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, and the global supply of timber is becoming increasingly strained. In recent years, the forest raw material supply has been unable to keep up with the growing demand from the forest in- dustry and the energy sector. Fierce com- petition for the raw material has pushed up Swedish wood prices by 50 per cent since 2021. There are several factors behind the global timber shortage. Canada has been hit by major bark beetle infestations, which has severely cut the annual harvest. The province of British Columbia has seen harvests halve in the past ten years, from over 70 million m3 in 2014 to around 35 million m3 in 2023. Canada has also been badly hit by forest fires. In Europe, spruce bark beetle infestations 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 affected the supply of wood raw material on the European market, since EU sanctions have stopped wood imports from Russia. Sweden is a forestry nation In Sweden, we have managed our forests for generations and forestry is deeply rooted in our culture. This is perhaps not surprising, given that only 3 per cent of Sweden’s surface area is built up, while almost­ 70 per cent is forest. Despite our small size, Sweden is one of the world’s largest producers of wood products and fibre­ products, much of which are export- ed. 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 we have a well-developed forest­ industry. Over the past 100 years, the amount of forest in Sweden has doubled­, while harvests have increased. With many other major forestry nations suffering significant supply issues, the knock-on effect is to increase the global importance of products from Swedish forests. Own forest gives control over raw material Holmen’s large forest holdings and close partnerships with 15 000 private forest owners creates considerable economies of scale, giving us 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. Our substantial forest holdings ensure the long-term security­ of our raw material supplies and provide a solid foundation for the contin- ued development of our industries. 20    Holmen Annual Report 2024 Forest Traceable raw material from sustainably managed forests Holmen’s forestry operations are certified in accordance with the ISO 14001 environmental management system and our forestry has chain- of-custody certification, which means that all timber can be traced back to its origin. Holmen’s production facilities at which wood raw material is used also have chain-of-custody certification. This assures customers that our products are fully traceable to sustainably managed forests. The upcoming EU Deforestation Regulation (EUDR) aims to prevent trade in goods that contribute to deforestation and forest degradation worldwide. Under the EUDR, all operators must be able to confirm the origin of raw materials and that no deforestation has occurred during production. Holmen’s processes and traceability systems are well equipped to meet the three core requirements of the new EU legislation: deforestation-free production, compliance with national legislation and the issuance of a due diligence statement, i.e. our processes for identifying and managing risks in our value chain. Much of the forest raw material that Holmen processes comes from our own forest holdings, but we also buy raw material from private forest owners. In fact, the amount of forest we process at our own facilities is twice the amount harvested from our forests. Holmen has long-standing procedures for tracing all timber purchased in Sweden, and we do not buy timber 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 primary 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 human rights are actively impeded. – Have high conservation value. Taken all together, we thus have robust systems in place to ensure that our products fulfil the most stringent traceability requirements. This provides our customers with a dependable and transparent supply chain, from forest to end product. 50% How much Swedish wood prices have risen since 2021 Forest assets Proportion of forested land, % Source: FAO Global Forest Resources Assessment 2020   >66   51–65   31–50   11–30 Holmen Annual Report 2024    21 Forest Comment on results The wood products market of 2024 was still marked by the weakness of the construction sector, while supply was limited due to global raw material shortages. Operating profit for Wood Products remained low in 2024, at SEK 2 million. Selling prices rose and revenue from wood chips and biofuel increased, but was offset by rising costs for logs. Consumption of wood products 0 50 100 150 200 250 300 350 24 23 22 21 20 19 18 17 16 15 Million m3 Price development 0 100 200 300 400 500 24 23 22 21 20 19 18 17 Index   Europe    North America    China    Other Asia    MENA   Export price Sweden    US price 2024 2023 Net sales, SEKm 3 896 4 075 Operating profit/loss, SEKm 2 6 Investments, SEKm 364 391 Capital employed, SEKm 2 375 2 139 Average no. of employees (FTE) 770 773 Deliveries, ’000 m3 1 348 1 498 Key figures Operating profit/loss and return   Operating profit    Return on capital employed SEKm -400 0 400 800 1 200 1 600 2 000 24 23 22 21 20 19 0 2 -20 0 20 40 60 80 100 % 22    Holmen Annual Report 2024 Wood Products 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. The raw material comes from responsibly managed forests, and the business is being developed by in- creasing the value added and making bet- ter use of the wood raw material in combi- nation with large-scale production. 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 wood chips and biomass fuels have also become more important factors. Sustainable building Wood is a fantastic material. It is strong, versatile, lightweight and the only renewa- ble building material that can be used in load-bearing structures. 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 mate- rial can be reused, recycled or used for energy­ production to heat other buildings. Building in wood is therefore significantly better for the climate than building in con- crete­ and steel, since the manufacture of these materials requires large amounts of energy and generates considerable emis- sions of fossil carbon dioxide. In contrast to steel and concrete, the manufacture of wood products is highly energy-efficient, a key consideration in a world facing energy shortages. In addition, the whole chain from manufacture to transport is more energy­-efficient and cost-effective, since wood weighs less. Wood products thus create benefit for the climate on multiple fronts. Holmen offers everything from joinery timber and refined products for builders’ merchants to advanced construction com- ponents. Through Martinsons, we are also able to offer the planning and construction of complete timber frames for everything from sports halls and schools to ware- houses, apartment buildings and offices. 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 en- tire log, and the value is extracted accord- ing to the unique properties of each log. We optimise the sawing and drying in co- operation with our customers to minimise wastage and maximise customer benefit.  Local raw material. Holmen’s five saw- mills are strategically located close to our forest holdings from north to south, ensur- ing an efficient logistics chain from forest to sawmill. Proximity to the raw material, combined with efficient wood sourcing, is a key factor for profitability. With access to a global transport network via rail, road and, not least, sea, we supply customers all over the world with wood products from the Swedish forest. 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. Investment in capacity and adding value. Iggesund Sawmill has carried out exten- sive development projects in recent years, with investments in a new drying plant, timber sorting and a new planing mill cre- ating­ the scope to increase the sawmill’s capacity by 20 per cent. This modernisa- tion also means that lower grade pine for joinery can be replaced by construction timber in both spruce and pine. The final phase of the expansion is to install a new resaw that will provide a better saw yield, greater productivity and an improved product mix. Climate change driving demand With the building sector accounting for a third of carbon emissions in Europe, prop- erty developers, architects and construc- tion companies have high ambitions to reduce­ the carbon footprint of buildings. 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 start carrying their true cost to the climate. There is considerable poten- tial for growth, not least for medium-sized buildings such as schools, warehouses and apartment blocks. While building in wood is nothing new, there has been a surge of interest in large- scale wood construction in recent years. 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 as the market continues to recover. Wood Products Wood is the only renewable construction material Building the future in wood Holmen offers a wide range of wood and timber products for construction and joinery. Developing the wood products business is a natural extension of our forestry and a key dimension of our strategy of owning and adding value to the forest. Holmen Annual Report 2024    23 Wood Products Timber frames capture market share With the climate challenge high on the agenda, timber frames continue to take market share from steel and concrete structures. In fact, the proportion of timber frames has almost doubled over a five-year period, according to statistics from the independent market research company Prognoscentret. Sweden has seen the proportion of timber- framed buildings grow in most project categories­ in recent years. Between 2018 and 2023, the total market share of timber frames rose from 12 to 23 per cent. The success of timber frames can probably be attributed to a generally higher level of maturity in the market, where greater knowledge and acceptance at the client level has made wood construction solu- tions an increasingly common choice. The steady increase has been relatively even across different segments of the construction sector, although some areas in particular stand out. The trend has been strongest for public-sector buildings in health, education and social care, areas in which as much as 40 per cent of all new buildings are built with a timber frame. One explanation for the high demand for wooden buildings from public-sector clients­ is likely to be the sharper focus on climate change and the flexibility of the material, which allows for future remodelling. Larger industrial projects continue to use a high proportion of non-wood fram- ing materials, but among smaller projects, which are more numerous, wood is clearly making inroads. Between 2022 and 2024, the proportion of industrial projects with timber frames increased from 23 to 34 per cent. More and more developers are also choosing to build office buildings with tim- ber frames because of the positive effects of the material, including pleasant indoor environments, shorter production times and reduced transport due to the low weight of wood. With so many benefits to building with wood, creating sustainable, attractive solutions that more and more people ­value ensures a bright future for wood construction. Glulam extension for Arlanda After check-in and security control in Terminal 5 at Stockholm Arlanda Airport, travellers arrive at the airport’s new marketplace, with its shops, restaurants and cafés. Through Martinsons, Holmen supplied and assembled the glulam frame for the extension, which is a statement of Swedish design and engineering prowess. The architecture and retail provision of the new marketplace in Terminal 5 have a Nordic flavour, while the airy spaces also offer views of the aircraft taking off and landing. The architect’s vision for the extension­ of almost 3 000 square metres presented many technical challenges, not least due to the unique V-shaped columns and the slight curvature of the whole building. The ambition to combine sustainability, aesthetics and functionality made the pro- ject­ an excellent fit for what Martinsons offers. As part of Holmen, Martinsons is able to provide value-adding expertise at all stages, from responsible forestry and production of glulam and CLT to project planning, project management and final assembly. In addition to the delivery and assembly of the glulam frame, which was manufactured at Bygdsiljum Sawmill, the commission also included the design of the structure and construction documents. The terminal extension was completed in 2023, with construction of the restaurants and cafés continuing in 2024. The new marketplace is expected to be fully finished by early 2025. 23% ↓ 12% How much the total market share of timber frames rose between 2018 and 2023 24    Holmen Annual Report 2024 Wood Products Wood Products Drones ensure safer work environment Conducting inventories of log piles can be both hazardous and difficult. Holmen’s sawmills are therefore using drones as a way to improve the safety and accuracy of the measurements. A height-measuring drone flies over the tim- ber storage at ­s­awmill and takes hundreds of images, which are then processed into a final image using specific software. The image is then marked with the log piles to be meas- ured and the grades to which they belong. The software tool calculates the volume of the log piles and generates a report that forms the basis of a transparent inventory result. The previous manual process was both high-risk and time-consuming. The techno- logical advances that come with drone use have contributed to several efficiency gains. Instead of the nine hours that a traditional inventory of the timber storage takes, the drone images are taken in just over 15 min- utes. The new inventory­ method brings numerous­ advantages, not least from a safe- ty perspective. There is no need for people to be moving amongst conveyors, timber trucks and forklifts, and the method minimises downtime in production as the inventory­ can continue without interrupting log handling. We believe in nature, we believe in tech- nology, and we believe in the opportunities that exist at the intersection of the two. Bringing nature and technology together ­allows us to make progress that benefits people, the environment and society. In this case, we save time, obtain more accurate data and create a safer work environment for our employees. Holmen Annual Report 2024    25 Wood Products A common denominator for our paper- board and paper products is that they are much appreciated by conscious custom- ers with high ambitions, thanks to their ­excellent product characteristics and low climate footprint. We exclusively use chain-of-custody certified forest raw ma- terial and have a total of four production facilities in Sweden and the UK. Fresh fibre offers multiple benefits The multi-layered structure, with different fibre types in different layers, dictates the high performance of our paperboard, while the fresh fibre offers several product advantages. Higher strength and a neutral effect on smell and taste in contact with food are just a few of the properties that add clear value to our paperboard. Our paper­ products have high bulk, making them thick yet light, which means that the customer gets more paper with the same feel at no extra cost. A lighter paper also enables lower distribution costs. In con- trast to recycled fibre-based alternatives, fresh fibre produces a naturally high brightness that elevates the way text and images are experienced. As Holmen’s fibre products are made from a renewable, recyclable and biode- gradable material, they also promote the circular economy and the phasing out of fossil-based materials. Our products and customers Holmen’s paperboard and paper products can be divided into two main segments – packaging and graphical applications. Our customers are primarily converters, wholesalers, brand owners, publishers and printers. We take a long-term ap- proach to creating profitable product solu- tions that meet customer needs, and the growing interest in our climate-smart products reflects our strategy to help our customers achieve a more sustainable business. Packaging. The packaging segment in- cludes both consumer packaging and transport packaging. Holmen’s paper- board products for consumer packaging are marketed under three brands: Inver- cote, Incada and Inverform. The quality, strength and design properties of the p­aperboard mean that we can create world-leading products for brand owners with high ambitions. With a renewable raw material, fossil-free electricity and re- source-efficient production, we are also able to offer resource-efficient packaging paper for corrugated board solutions that allow customers to reduce their carbon footprint. Graphical applications. The graphical segment includes everything from books and magazines to advertising and note- books. The paperboard is used in areas such as book covers and gift cards, while Holmen’s book paper is the leading prod- uct for paperback books in Europe. Pub- lishers appreciate our papers because they offer bright and even surface proper- ties that enhance the reading experience, while also helping customers to improve the efficiency of both production and logistics. Holmen’s lightweight paper gives customers the opportunity to go up in format or print run without additional costs. Circular production process Holmen’s production facilities hold chain-of-custody certification and all the wood raw material comes from sus- tainably managed forests. Two of our ­production facilities, the paperboard mill in Iggesund and the paper mill in Braviken, are integrated with neighbouring saw- mills, which means that all parts of the tree are processed directly on site in a ­circular ­production process. Wood chips from the sawmills are used as a raw ­material in pulp production, while bark and wood shavings are used for biofuel. The circle is closed when the excess heat from the mills is utilised in the drying processes of the sawmills, making them energy efficient units. The strategic logis- tical locations of our three Swedish mills ensure short transport distances for the wood, plus they are all close to ports with good capacity. Holmen’s two paperboard mills were awarded EcoVadis Platinum in 2024 for their successful sustainability work, and the two paper mills received the same high rating in 2023. This accolade puts the mills in the top one per cent of more than 150 000 companies worldwide that are assessed on environmental, ethical and social responsibility criteria. Sustainability driving demand Reducing climate and environmental ­impact and avoiding plastic packaging are strong drivers for increasing the use of wood fibre-based products such as paper- board and paper. Demand for paperboard and paper is largely being driven by eco- nomic and demographic growth, but also by changing consumer behaviours and ­increased digitalisation. The packaging market is growing but with strong compe- tition, while the graphical paper market has been experiencing an underlying structural decline over the course of ­several years. Demand for paper varies across the segments, with the book market remaining stable, while other graphical segments such as magazine paper have weakened. With local wood raw material from our own forests and a sound energy situation, Holmen is in a strong position to further develop our offering. Board and Paper World-leading paperboard and paper products Holmen develops innovative paperboard and paper products for everything from cosmetics, electronics, pharmaceuticals and food to books, magazines, advertising and transport packaging. The business will build on our market-leading position and by offering resource-efficient alternatives to traditional products. Holmen’s book paper is the leading product for paperback books in Europe 26    Holmen Annual Report 2024 Board and Paper Comment on results Demand for consumer paperboard in ­Europe improved in 2024 but remained below normal, while demand for paper was on a par with the previous year. Paperboard­ prices were broadly stable, but paper prices fell back from their very high level in 2023. Despite rising raw material­ costs, Board and Paper ­delivered an operating profit of SEK 1 702 million thanks to production efficiencies, increased deliveries and higher revenue from ancilliary services. Price development   Operating profit/loss excluding items affecting comparability    Return on capital employed, excluding items affecting comparability 2024 2023 Net sales, SEKm 15 238 14 965 Operating profit/loss, SEKm 1 702 2 730 Investments, SEKm 949 1 011 Capital employed, SEKm 8 019 7 625 Average no. of employees (FTE) 2 083 2 148 Deliveries, ’000 tonnes 1 424 1 343 Key figures SEKm 0 1 000 2 000 3 000 4 000 24 23 22 21 20 19 1 702 21 % 0 20 40 60 80 Operating profit/loss and return European demand for SBB and FBB European demand for mechanical printing paper   Uncoated magazine and book    Coated magazine    Newsprint   FBB    Uncoated magazine   SBB and FBB 0 500 1 000 1 500 2 000 2 500 3 000 ktonnes 24 23 22 21 20 19 18 17 16 15 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 24 23 22 21 20 19 18 17 16 15 ktonnes 0 50 100 150 200 24 23 22 21 20 19 18 17 16 15 Index Holmen Annual Report 2024    27 Board and Paper Board and Paper Invercote Touch – paperboard with a matt, raw, uncoated surface Modern packaging can be subject to much greater demands than simply being ‘packaging’. It is also expected to convey a feeling that builds the product’s brand. We developed Invercote Touch for those customers who wanted to enhance their offering with a more natural, uncoated paperboard product with no glossy finish. Invercote Touch is designed for premium packaging and high-end graphic design that delivers a tactile sense of the raw ­material. The paperboard is made without any coatings in order to increase the natu- ral feel. And like all products produced by Holmen, it is based entirely on fresh fibre from sustainably managed forests. In common with our other paperboard prod- ucts, Invercote Touch is built up in several layers, using specific fibre compositions for each layer to optimise performance. The fibre is selected by shape and length, and treated in differ- ent ways to tailor the paper- board structure to the in- tended use. The outer layers of Invercote Touch are pre- dominantly hardwood fibre to provide a smooth surface with good printability, while the middle layer is softwood fibre for strength and flexi- bility. The combination makes the paperboard ideal for printing while having excellent­ converting properties­. Invercote Touch is suitable for a range of end uses, such as packaging premium products like cosmetics, perfume, choco- late, pharmaceuticals and electronics. It has good brightness and is a hygienic product with no taste or odour. All the mate- rials used in the manufac- ture of our Invercote prod- ucts are approved­ for food contact, making the paper- board suitable for packaging food and other sensitive goods. The paperboard is also perfectly suited to high- end brochu­res and graphics, such as the cover of an ­annual report­, for example. beyond net zer0 Årsredovisning 2024 The cover of Holmen’s 2024 Annual Report is printed on the new Invercote Touch paperboard product. 28    Holmen Annual Report 2024 Board and Paper Creating value from residual products Holmen grows houses, but not all forest can become wood products for sustainable building. Planks and boards have corners, while trees are round, and the trees that are thinned out to allow others to grow large are often too small or of too poor quality to become ­construction material. Producing paperboard and paper requires large amounts of raw material. Forest raw material comes from sustainably managed forests and for every tree we harvest, we plant at least two new ones. The wood fibre we use is left over from the production of construction materials and other wood products. Or from residual products in forestry. Efficient production But we need more than just fresh fibre – we also use a lot of ­energy and water in our production. The water is reused several times over, and before being returned to the sea, it goes through a multi-stage purification process. The paper production makes intensive­ use of electricity and most of the fossil-free electricity used is purchased externally, while our paperboard mills are largely self-sufficient in renewable heat and electricity. Holmen’s efficient use of resources, access to green electricity and smart energy recovery systems also ensure low carbon emissions­ from our production. Using paper and paperboard from Holmen­ will most likely enable our customers to reduce the carbon­ footprint of their purchased material. Recycled paper grows in the forest Many people who draw a distinction between paper and recycled paper forget that both actually come from the same fibre. When wood fibre is used for the first time, it is called fresh fibre, but when the paper or board is recycled, it is called recycled fibre. Holmen­ has a circular business and works to ensure that our products­ can be reused and recycled as much as possible. Making products from recycled fibre requires a lot of energy, and a wood fibre can only be used so many times. Each time the fibre is recycled­, it gets shorter and weaker, and eventually it becomes exhausted. The recycled paper system therefore needs a constant supply of fresh fibre in order to continue functioning. New packaging product and higher capacity for book paper In 2024, we rebuilt the PM52 paper ­machine at Braviken Paper Mill to be able to produce a stronger packaging paper and to smoothly switch between graphical paper and packaging paper. The rebuild also expands our book paper capacity and 2025 will see us launch a new product concept with a fresh fibre-based kraftliner and fluting for transport packaging. Our kraftliner combines low ­grammage with a low carbon footprint and great printability, as well as being ­approved for food contact. In choosing our kraftliner, customers get a lighter product with the lowest climate footprint on the market. PM52 is the paper machine with the lowest climate footprint in the market Holmen Annual Report 2024    29 Board and Paper Comment on results Energy remains expensive in Europe due to high fossil fuel prices. Nevertheless, electricity prices in northern Sweden were 30 per cent lower than the average for the past twenty years, partly due to unusually high water flows. The low electricity prices contributed to a decrease in operating profit to SEK 265 million. In 2024, Renew- able Energy’s average sales price was 30 per cent higher than the market price in northern Sweden, as it was possible to steer production towards times when it was needed most. Operating profit/loss and return   Operating profit/loss excluding items affecting comparability    Return on capital employed, excluding items affecting comparability Key figures 2024 2023 Net sales, SEKm 642 1 070 Operating profit/loss, SEKm 265 697 Investments, SEKm 559 59 Capital employed, SEKm 4 588 4 283 Average no. of employees (FTE) 34 29 Deliveries of hydro and wind power, GWh 1 728 1 658 SEKm 0 300 600 900 1 200 24 23 22 21 20 19 6 0 8 16 24 32 % 265 European electricity consumption 23 18 13 08 03 98 0 2 000 4 000 6 000 TWh EUR/MWh 0 100 200 300 400 500 600 24 23 22 21 20 19 European energy consumption, % 19 29 35 10 8 4 8 7   Electricity    Fossil fuels   Fossil gas   Nuclear power   Oil   Renewables   Coal   Other Source: Our World in Data   Fossil fuels    Nuclear power    Renewables   SE2 (Sundsvall)    SE3 (Stockholm)    Germany    Gas power Price development 30    Holmen Annual Report 2024 Renewable Energy Holmen produces renewable energy from water and wind. Hydro power is a vital en- ergy 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 energy production by building wind farms on our own land. Developing wind power on our land is a natural complement to our hydro power, while creating added value from our forest ownership. Strength in own energy assets Holmen supplied 1.7 TWh renewable electricity from hydro and wind power in 2024. Together with the renewable elec- trical 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. Flexible hydro power. The majority of Holmen’s­ electricity production is control- lable hydro power from our 21 wholly or partly owned power stations. Transition- ing the energy system to more weather- dependent energy sources will bring challenges­, since the power supply has to be maintained every minute of every day, all year round. As more of the weather- dependent­ production is added to the electricity system, more regulating capac- ity is needed to keep the system in bal- ance. Hydro­ power stations can generate both baseload power and regulating pow- er, which is the energy needed to meet fluctuations in demand. Production is tailored­ to demand or changes in other electricity production by reducing or in- creasing the flow of water through the tur- bines­. As the share of weather-dependent energy sources increases, the value of this stabilising capacity has grown 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 ser- vice 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 auto- mated. The climate impact of the opera- tion is also marginal, with minimal emissions. 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 it now the cheapest way of producing new renew­able electricity in Sweden. Wind power also works well with our 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. Investing in increased production. Blåbergsliden Wind Farm outside Skellefteå opened in 2022, and in the same year Holmen­ acquired the remaining shares in Varsvik Wind Farm in Uppland. These invest­ments boosted our renewable elec- tricity production and marked a significant step in the development of Holmen’s renewable­ energy business. As a major landowner, Holmen has excel- lent opportunities to build wind power at a competitive cost, and we have several projects in different phases of develop- ment. In addition to Varsvik and Blåbergs­ liden, Blisterliden Wind Farm is under con- struction­ in Västerbotten and is planned to be operational by 2026. Blisterliden com- prises 14 wind turbines with a total height of 250 metres. This investment will in- crease ­Holmen’s annual production of renewable­ energy from water and wind by around 20 per cent. Energy market in a state of flux The electricity market in the Nordic region has historically worked well, with harmo- nised pricing that usually tracks the mar- ginal cost of fossil energy. The expansion of renewable energy has reduced our de- pendence on fossil power, but it has also made electricity prices more volatile. At the same time, the price differences with- in Sweden have increased due to nuclear shutdowns and restrictions on transmis- sion capacity between northern and southern Sweden. Because the electricity market is interconnected with the rest of Europe, and the price is set according to the most expensive type of production at any given time, southern Sweden is also increasingly affected by prices on the continent­. The energy market in Europe is under- going major restructuring, and to meet ­climate targets, the continent will need to largely transition away from fossil-based energy use. With increasing electrification of both industry and transport, it is clear that electricity consumption is set to rise, creating additional demand for more renewable­ electricity. Green energy from our land Holmen’s production of renewable hydro and wind power contributes towards a sustainable electricity supply in Sweden and enables a growing green industry that is dependent on more fossil-free electricity. The business will grow through the construction of wind power on Holmen’s own land. Holmen has 21 wholly or partly owned hydro power stations and two of its own wind farms Renewable Energy Holmen Annual Report 2024    31 Renewable Energy Green electricity essential for Europe’s transition Over the past 50 years, the world’s energy consumption has tripled, and this increased demand has almost exclusively been met using fossil fuels. Global population growth and increased prosperity have come at a high price. To reduce greenhouse gas emissions, fossil fuels need to stay underground, rather than being extracted. Since energy use accounts for almost three quarters of global greenhouse gas emissions, energy production is closely tied to climate change. How we manage the energy transition will also affect the world’s ability to tackle climate change. To wean ourselves off fossil energy, much of the current fossil-based energy produc- tion will need to undergo a green transi- tion, 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. Sweden at the forefront Roughly half of electricity production in Europe is fossil-free, but electricity only accounts for a fifth of total energy con- sumption and almost all other energy use is fossil-based. Europe is being ambitious in driving the climate transition and is beginning­ to pave the way for new green industry. Although this trend has slowed due to subdued demand and a weaker economy, electricity use is expected to ­increase dramatically due to the electri­ fication of everything from transport to ­industry. Thanks to its early and widespread adoption of hydro power, coupled with ­nuclear and wind power, Sweden’s elec- tricity production is practically fossil free, with the lowest carbon intensity in Europe. With a fossil-free energy system and opportunities­ to increase renewable electricity­ production, Sweden is also well placed to lead the development of a new generation of fossil-free industrial processes. Building wind power on our own land has many advantages Major landowner Surveying and analysing our extensive land hold- ings enables us to iden- tify areas with favoura- ble wind conditions and choose the locations that make the most economic­ sense over time, taking account of the area’s­ unique circumstances. 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. Cheaper building Developing and operat- ing wind farms in-house instead of using inter- mediaries allows us to do so more cost-effec- tively. As we are also a major electricity con- sumer, access to cheap and fossil-free electricity is important for our industrial­ production. 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. 32    Holmen Annual Report 2024 Renewable Energy Holmen’s role in the Swedish electricity system 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 electricity consumption, while playing our part in the energy transition that society so badly needs. 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 valua- ble resource that generates renewable electricity at a low cost, and can be channelled to periods of peak energy demand­. As a major landowner, Holmen also has unique opportunities­ to find favourable locations for establishing wind power­ capacity on our land. Large-scale investment in different power sources and ex- panded capacity in the electricity grid are needed to meet the growing demand for fossil-free energy. Investments are also being made in increased flexibility and power output. Holmen has a significant role to play in the development of the Swed- ish energy system, not least through establishing wind power on our own land, and we have several projects in various phases­ of development. Our hydro power is also becoming in- creasingly important in a more weather-dependent electricity system that needs to be supplemented with controllable sources and flexibility in electricity consumption. Holmen already­ has a central role in this, through our hydro power, but also – as one of Sweden’s largest consumers of electricity – by adapting our consumption to support the electricity system. Our hydro power stabilises the electricity grid Large-scale hydro power acts as an ancillary service by stabi- lising the frequency in the grid. 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, creating motion and thus energy that a generator converts into electricity. Conversely, water can be held in the reservoir when other sources are generating electricity. There has always been a need for a stable electricity grid, but stabilising ancillary services have become more critical as the proportion of weather-dependent energy sources has in- creased. 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. Selling price*, SEK/MWh 0 200 400 600 800 1 000 1 200 1 400 1 600 Q4-24 Q3-24 Q2-24 Q1-24 Q4-23 Q3-23 Q2-23 Q1-23 Q4-22 Q3-22 Q2-22 Q1-22 Q4-21 Q3-21 Q2-21 Q1-21 Q4-20 Q3-20 Q2-20 Q1-20 Carbon intensity concerns emissions of greenhouse gases from electricity production, adopting a lifecycle perspective that in- cludes emissions from production and the fuels used, as well as the construction and demolition of the power stations. Source: electricitymaps.com Renewable Energy Carbon intensity from electricity production (g CO2e/kWh)   <100   101–200   201–300   301–500   >500   No data   Holmen Renewable Energy    Northern Sweden (SE2) *Excluding hedging. Holmen Annual Report 2024    33 Renewable Energy A sustainable business 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 the transition also means we need to manage our resources more efficiently and use them more wisely. Holmen’s business is based on the power of the forests, rivers and winds, with a firm focus on how we can use technology and engineering to create the products the world needs. Holmen grows houses. This means that we manage the forest in a future-smart way for the benefit of the wood. And we use the residual parts of the tree to make world-leading paperboard and innovative paper products. We also produce energy from wind and water on our land. Our growing forests sequester carbon and our products replace fossil materials and energy sources. When we grow houses, we are also growing change. As a Swedish forestry company, we are well placed to help with solutions to some of the world’s major challenges for the future. Not least climate change. And we can do so with nature as our founda- tion. At the same time, there is no denying that our activities leave a mark on nature. We have a responsibility for the tracks we leave behind and for the biodiversity of our landscapes. Holmen’s future depends on keeping the land and ecosystems viable. It is therefore equally in our interest and in the interest of society for us to manage the forest actively and sustainably, and for us to use the raw material in a wise and far-sighted way. We let the forest grow and give The trees growing, the water rushing down the rivers and the wind blowing over the treetops – this is the core of Holmen, a business built on the forest ecocycle and the renewable products we can create from it. Wooden housing, books, maga- zines and renewable consumer packaging are examples of end products from our forest. Through our active and sustainable forestry, we ensure that we have more ­forest producing the optimum raw mate­ rial. We then maximise the use of the raw material from the forest. In fact, we do it so well that nothing is left over. The most valuable parts of the wood are used to make wood products for climate-smart construction. The narrower parts of the tree, wood from thinning and chips from the sawmills are turned into paperboard and paper in our mills. The bark and wood shavings are put to use in producing bio- energy. We generate renewable energy from the water and wind on our land. And so it goes on. We plant new seedlings and manage the growing forest responsibly, creating ­productive forests that generate more raw material for us to process. Together we are circular Our business model is circular. The forest ecocycle gives us our wood. 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. Over the years, we have ­improved our capacity to create value in every part of our operations. 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. The use of renewable raw materials is a prerequisite for a circular economy. But if the circular society is to become a reality and fossil raw materials phased out, we will need more renewable products, and even better ones. This is why we are work- ing with our customers and suppliers to develop products and processes that can increase our contribution to the green transition. The power of customer choice We do the most good for the climate jointly with our customers when they choose our renewable products and energy sources, instead of fossil-based alternatives. 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 a circular business and their choice of renewable products from the forest, from wind and from water makes a positive difference. The best thing we can do for the climate is to help more ­customers to replace fossil sources with renewables. — For more information on Holmen’s contribution to a circular economy, see page 109. We grow houses, we grow change A sustainable business We manage the forest while preserving biodiversity Our mills and sawmills are resource- and energy-efficient Our products replace fossil- based products and can be reused to make recycled paper and energy We use all the raw material Our growing forests capture carbon dioxide We produce renewable energy 34    Holmen Annual Report 2024 A sustainable business The harvest 5% Branches, tops, bark and wood shavings become renewable bioenergy which can be used to produce electricity, heating and biofuels. 45% The narrower parts of the tree and wood from thinning are ground or digested down into pulp, which is used to produce paper and paperboard. 50% The large logs that make up half of the harvest go to sawmills, where they become building materials in the form of construction timber and joinery products.   About half of these logs in turn become wood products, while residual products such as wood chips and wood shavings are used to produce pulp and bioenergy. 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 every­ thing 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. Materiality assessment shows our impact on the world around us Sustainability is about balancing several perspectives – economic, environmental and social – and succeeding in doing so over time. For Holmen, successful busi- ness and a sustainable future go hand in hand. We contribute towards the transi- tion to a sustainable and circular society and focus our work on the areas where our operations have the greatest opportunity to make a difference. In 2024, we updated our materiality ­assessment. In analysing our own opera- tions and mapping the impact of our value chain, we have identified five areas where our impact is deemed to be of material significance. — For more information on Holmen’s materiality assessment, see page 98. We make use of the whole tree The tree trunk Wood – Planks and boards Wood chips – Pulp for paper Bark – Bioenergy Wood shavings – Bioenergy 1 Our climate benefit increases as the business grows 2 Our forestry fosters biodiversity 3 We develop the business within the framework of environmental permits and certifications 4 Our employees develop and thrive 5 We build long-term relationships based on responsible business conduct In the following sections, we explain how we are working to reduce our footprint and increase our positive contribution to the transition to a sustainable future. Holmen Annual Report 2024    35 Climate How we contribute to the climate »Our climate benefit increases as the business grows« The forest delivers the most benefit when it is put to use. With this at the heart of Holmen’s business, our goal is to increase our contribution to the climate transition throughout our value chain, mainly by increas- ing the positive impact that our business has, but also by reducing our negative footprint. In 2024, Holmen created a climate benefit of 8.3 million tonnes CO2e, which can be viewed in relation to Sweden’s total emis- sions of 45 million tonnes in 2023. Over the years, Holmen has developed long-term and rational management of its forest holdings, which has contributed to- wards a growing volume of standing timber and increased harvests. A growing volume of standing timber captures and stores carbon dioxide and after harvest, the forest raw material­ continues to create lasting benefit by storing carbon dioxide in products with a long lifetime and replacing fossil-based products with a larger carbon footprint. Growing forests capture carbon dioxide Young trees have the greatest capacity to bind carbon dioxide. When the trees be- come old, growth slows, and when they finally­ die and decay, the stored carbon dioxide­ returns to the atmosphere. Active 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 2024, it is calculated that the increase in the volume of standing timber in Holmen’s forests has absorbed 2.1 million tonnes of carbon dioxide, net after harvest. Once harvested, 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. In 2024, sales of our products contributed to an increase in global carbon sequestra- tion of 0.4 million tonnes. Products with a low carbon footprint Holmen’s strategy assumes that the world must make the transition to using energy and materials sustainably to limit global warming. With renewable raw material, fossil-free electricity and resource-efficient production, we are able to offer our cus- tomers products with a low carbon foot- print, thus helping the world to avoid fossil emissions. The building sector is responsible for more than a third of Europe’s carbon emis- sions and making the manufacture of the dominant construction materials cement and steel sustainable is both expensive and difficult. Wood is a renewable alternative that, in contrast to cement and steel, is also energy-efficient to produce, not to mention storing carbon in the buildings. In addition, reducing the climate and en- vironmental impact is a strong driver for in- creasing the use of wood fibre-based prod- ucts such as paperboard and paper. Replac- ing fossil-based materials such as plastics with bio-based alternatives reduces the car- bon­ footprint while minimising the amount of plastic waste that can end up in nature. The energy market in Europe is undergoing a major restructuring, with huge demand for more fossil-free electricity as industries transition and vehicle fleets are electrified. With our own production of renewable ­energy from hydro, wind and biomass ­sources, Holmen takes responsibility for its own electricity consumption while also furthering Europe’s green transition. We have cut our emissions by over 90 per cent We began planning for the transition away from using fossil energy in our industries back in the early 2000s, and in 2005 we set the target of reducing the use of fossil fuels in our production mills by 90 per cent by 2020. Focusing on fossil-free electricity and renewable energy from biofuels, as well as making energy efficiency improvements and investments in fossil-free technologies, has enabled us to reduce our fossil emissions by 91 per cent since 2005. This already puts Holmen’s emissions at the low levels that the UN’s Intergovernmental Panel on Cli- mate Change (IPCC) has stated our industry should be at by 2045 in order to achieve the Paris Agreement’s 1.5 degree target. The majority of our remaining emissions are ­generated from purchases of input products and transport to and from our industrial sites. We are therefore now focusing on ­cutting emissions in these areas. Holmen’s emissions targets have also been certified by the UN-associated organisation the Science­ Based Targets initiative (SBTi). — For more information on Holmen’s work for a better climate, see page 101. Active forestry creates climate benefits on multiple levels, million tonnes CO2e Holmen’s overall climate benefit in 2024 is calculated in line with Skogforsk report number 1187–2024. This is to align reporting with the upcoming ISO standard ISO 13391, which is a framework for value chain calculations for wood and wood-based products. -1 0 1 2 3 4 5 Holmen’s emissions in scope 1–3 Bioenergy replacing fossil energy Renewable electricity production replacing fossil energy Wood and fibre products replacing fossil material Storage in wood and fibre products Storage in Holmen’s forests Total net increase in carbon storage of 2.57 million tonnes Total reduction in greenhouse gas emissions of 6.52 million tonnes Emissions in Holmen’s value chain 2.13 4.44 0.44 1.24 0.84 -0.77 36    Holmen Annual Report 2024 Climate Products that reduce global emissions Greenhouse gas emissions from our production 2005–2024, tonnes CO2e 0 200 000 400 000 600 000 800 000 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 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 2013 New biofuel boiler at Workington Mill 0.4 million tonnes of CO2 stored in our wood and fibre products 4.4 million tonnes of CO2e avoided thanks to our wood and fibre products 2.1 million tonnes of CO2e emissions avoided through our renewable energy production Holmen Annual Report 2024    37 Climate Biodiversity How we create thriving forests »Our forestry fosters biodiversity« Holmen’s nature conservation strategy combines active forestry with protecting the diversity of habitats and species. The aim is to ensure the long-term survival of native plants and animals in the forest landscape. The trees we plant today will grow for ­almost a century before they can be ­harvested, and an awful lot can happen in that time. The forest could be hit by drought, fires, storms and pests. Forest management can also affect ecosystems and forest species that depend on differ- ent habitats for their survival, for example if it leaves too low a proportion of dead or old trees. Each year, we invest around SEK 200 million in caring for our forests and constantly work to improve everything from seedlings to nature conservation through research, development and edu- cation – all to ensure good growth and healthy ecosystems for future generations. Planning is the foundation of active and sustainable forestry. Every 10 years, we conduct an inventory of our entire forest holdings in order to calculate sustainable harvesting levels and ensure a growing volume of standing timber over time. ­Planning takes account of expected ­climate change and we carry out ongoing climate risk analyses and adaptation plans. 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. In total, a little over 20 per cent of Holmen’s forest area is used for different types of environmental pur- poses. This includes voluntary set-aside productive forest land, forested non-­ productive forest land which is protected by law, and environmental conservation in the managed forest. Holmen’s nature conservation work is founded on three elements: environ- mental considerations in managed forests­, conservation management and voluntary set-asides. 1. Environmental considerations in managed forests As an integral part of our active forest management, we give extensive consider- ation to both natural and cultural assets and implement various measures to ­preserve and enhance biodiversity. High stumps and dead wood are saved to pro- vide habitats for wood-living insects and fungi. Buffer zones along watercourses are preserved to protect aquatic species and improve water quality. During har- vesting, buffer zones are also left with trees and bushes intact to protect bio­ diversity. Large trees, both living and dead, are left as important nesting sites for birds and insects. 2. Conservation management As a natural part of forestry, we also carry out actions to develop or strengthen nature conservation, including burning forests and removing invasive spruce trees to benefit broadleaves. Burning is carried out under controlled conditions to create fire-damaged timber, an important habitat for many threatened species. ­Holmen also works to restore wetlands and create richly varied forest landscapes. Every year, Holmen carries out habitat management on approximately 400 ­hectares to improve biodiversity and help create healthy, resilient ecosystems. 3. Voluntary set-asides Holmen’s forest holdings include both for- mally protected forests and voluntary set- asides. In formally protected areas, such as nature reserves, natural processes are allowed to continue unhindered, benefit- ting species that require untouched forest. Holmen has also identified more than 9 000 areas that are voluntarily set aside or managed for purposes other than wood production, as they have high or unique conservation value. 38    Holmen Annual Report 2024 Biodiversity Five biodiversity indicators 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 preserve biodiversity while increasing forest growth. Forest biodiversity is affected by multiple factors. In order to monitor developments and evaluate implemented measures, Holmen has identified five indicators that show the health of selected key forest habitats. 1. Area of old forest 2. Area of old forest with specific indications of nature conservation value (SIN) 3. Volume of dead wood per hectare 4. Volume of broadleaves per hectare 5. Volume of large broadleaves per hectare The indicators represent different types of habitats which together provide a broad picture of the conditions for biodiversity on Holmen’s land. With a production cycle in the forests of almost a hundred years, change does not happen overnight, but statistics from independent inventories show that positive progress has been made over the past 30 years. — For more information on Holmen’s work to promote biodiversity, see page 107. Sweden’s forests offer good conditions for biodiversity 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. Together with Finland, Sweden is the most forested country in Europe, with almost 70 per cent forest land and a well-developed forest industry. According to the Biodiversity Intactness Index, conditions in Sweden are also good for functioning ecosystems, with 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 135. Biodiversity Intactness Index trends 1970–2023 Positive progress for key forest habitats 70 75 80 85 90 95 100 1970 1980 1990 2000 2010 2020 2023 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2002 2000 1996 1998 2004 2006 2008 2010 2012 2014 2016 2018 2003 2001 1997 1999 2005 2007 2009 2011 2013 2015 2017 2019 2020 2021   Sweden    Europe    Global average   Old forest    Old forest (SIN)    Dead wood    Broadleaves    Large broadleaves Old forest is important for several reasons. Old trees host birds, insects, mosses and lichens, while also being valuable indicators of healthy conditions in the soil and on the forest floor, which is good for ground vegetation and fungi. Old forest with specific indications of nature conservation value shows not just the age of the forest, but also whether it has special qualities that provide better condi- tions for more sensitive species, for example whether an area has very old and large trees, dead wood and trees of varied ages. Dead wood is important for biodiversity in the forest, providing­ a habitat and food source for birds, insects, fungi, mosses and lichens. It is estimated that around 20 per cent of all forest species depend on dead wood. Broadleaves large and small are impor- tant for birds and rare insect species, for both food and nesting. A number of mosses and lichens­ only grow on a single species of decid- uous tree – be it aspen, birch or more special- ist species such as elm, beech, oak and maple – and then usually only on old and large trees. The Biodiversity Intactness Index, based on the world’s largest database of changes in ecological communities in response to human pressures, is used to track biodiversity in different regions. Sources: Natural History Museum, Global Forest Watch. Source: SLU National Forest Inventory Holmen Annual Report 2024    39 Biodiversity Environment Environmental work defined by continuous improvement »We develop the business within the framework of environmental permits and certifications« Holmen’s renewable products help to reduce demand for fossil-based alternatives, while our active envi- ronmental work ensures that we comply with the rules and condi- tions imposed on our operations. With Holmen’s operations generating emissions to air and water, our environ- mental work focuses on managing our im- pact­ on people and the environment. In- dustrial­ production is contingent on envi- ronmental permits that specify authorised emission levels of various substances. The total environmental impact of the opera- tions is regulated in the individual permit process under the Swedish Environmental Code, and via the Industrial Emissions Ordinance­, which states that best availa- ble techniques (BAT) must be used. The comprehensive permit processes are based on the assumption that the impact of the activities must be acceptable for people and the environment in terms of both ongoing and discontinued opera- tions. At the same time, the permit process­ ensures a balance between economic­ viability and the environment. Resource-efficient production Holmen’s production is developed within the framework of our certified environ- mental and energy management systems. Environmental and energy considerations are an integral factor in the planning of both production and investments. Opera- tions are characterised by resource-effi- cient­ use of renewable raw material and energy, and by protecting the environme­ nt, applying the precautionary principle. Our environmental work entails meas- ures for continuous improvement within the framework of our management sys- tems. Over the years, we have effectively reduced our use of chemicals and other inputs, and we recover and reuse the waste that arises. Alongside the renewable forest raw ­material, water and electricity are also key raw materials in our production. The way we manage these resources is therefore a crucial aspect of our environmental work. More efficient water use Holmen’s industries use surface water from lakes and watercourses to transport and wash fibres in the mills and also for cooling and steam production. Water availability at Holmen’s production facili- ties is good and, as our paperboard and paper mills are located on the coast, our water use does not affect any other opera- tions. The same water is generally used multiple times, and different combina- tions of mechanical, biological and chemi- cal processes treat the water in several steps before it is returned to the natural ecocycle. As always, it is important to economise on resources and make the best use of them. The amount of water used in our production has steadily decreased over the years due to increasingly efficient pro- cesses and equipment. With such good availability of water at our pulp mills, there is currently an opportunity to increase wa- ter use in order to improve the efficiency of the pulp washing. This could then re- duce the need for chemicals in bleaching. Increased production of renewable electricity While Holmen uses large amounts of energy at our paper and paperboard mills, the vast majority of the energy we use is fossil- free. Through investments in fossil-free technology and the establishment of wind power, we have increased our renewable electricity production by over 40 per cent in the past 20 years. The mills produce electricity in the form of back-pressure power, which is generated together with the steam used in the mills. Holmen also supplied over 1.7 TWh of electricity from hydro and wind power in 2024. Together with the electricity ­generated by our production facilities, this equates to 60 per cent of our total electricity consumption. We also have the opportunity to increase our production of renewable electricity by establishing more wind power on our own land. — For more information on Holmen’s environmental work, see page 105. Holmen’s water use 2005–2024 Holmen’s renewable electricity production 2005–2024   Hydro and wind power    Back-pressure 0 20 40 60 80 100 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 09 08 07 06 05 Million m3 0 500 1 000 1 500 2 000 2 500 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 09 08 07 06 05 GWh 40    Holmen Annual Report 2024 Environment Air pollution Particles less than 2.5 micrometres per m3 (µg/m3)   <6   6–9   10–13   >13   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 Good access to water Access to clean water is crucial for human health and well-being and demand for everything from drinking water to water for industrial use and irrigation is growing. Aquatic pollutants fell in Europe between 1990 and 2010, but more than 50 per cent of the reported surface water has still failed to attain good ecological status. 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 Clean air Like clean water, clean air is vital for human life. Pollution in the form of small airborne particles can cause or exacerbate many chronic diseases. The air in Europe’s urban areas is cleaner today than it was half a century ago, when the EU introduced stricter air quality standards. However, large parts of Europe still have levels above the WHO recommendation of 5 micrograms per cubic metre of air (μg/m3). In 2022, the median concentration of particulate matter in Sweden was 5 μg/m3. Annual average concentration of fine particles (less than 2.5 micrometres in diameter) measured at urban background stations, average 2022. Source: European Environment Agency (EEA) Sweden has good conditions for industrial production Holmen gives customers across the world access to renewable products from the Swedish forests. Conducting forestry and industrial production in a forest nation like Sweden has several advantages. In addition to a good supply of raw materials, we also have plenty of water, a fossil-free energy mix and clean air. Holmen Annual Report 2024    41 Environment Employees and thriving rural communities We grow together »Our employees develop and thrive« We are committed to our employ- ees 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 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. Active participation gives responsibility to the individual Holmen has a philosophy of management by objectives and decentralised organisa- tion that sets great store by the active ­participation of employees. Applying our management model, the strategy, busi- ness plans and performance expectations are communicated across the organisa- tion. Based on this, our employees pro- pose targets that will lead to the expecta- tions being met. This helps us to make the most of the skills, potential and drive of every individual, team and unit. Holmen has a learning culture 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 objec- tives model is our way of making sure that everyone working at Holmen feels that they are focusing on the right things and joins in with implementing our strategy. Employees with courage, commitment and responsibility Holmen’s values are clearly front and ­c­entre. Our three values: courage, com- mitment and responsibility develop us as individuals, build further on our strong ­culture and make Holmen better. 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. The values are also integrated in our pro- cesses and tools, including our manage- ment by objectives model, and as a basis for our internal leadership and manage- ment programmes. Forever learning. Holmen is to be an ­attractive employer that continuously ­develops our employees by giving them stimulating duties and new challenges. It goes without saying that we actively pursue a healthy culture and a safe work environment for our employees and the contractors who work for us. Because we know that growth is great- est when development is part of day-to- day work, our employees are expected to take on considerable responsibility, but they are also encouraged and supported by committed and knowledgeable colleagues­ and managers. Based on our current and future skills needs, we are working on employee development at all levels. Holmen offers Group-wide leader- ship programmes and programmes for new and more experienced managers, and for specialists. In order for Holmen to continue to be a business that focuses on innovation and development, we need to attract and retain the right employees. We have an ­attractive offering as an employer and apply­ competency-based recruitment which helps us to bring in employees that represent a diversity of insights, experiences­ and cultures. — For more information on Holmen’s employees, see page 111. 42    Holmen Annual Report 2024 Employees and thriving rural communities Employees who recommend Holmen Holmen is to be an attractive employer where employees recommend Holmen as a workplace. The most recent ­employee surveys put Holmen’s ­employee Net Promotor Score (eNPS) at 26. This is a strong result as the benchmark for 250 companies in ­different industries is 16. 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 rose from 5.2 in 2023 to 5.3 in 2024. We continue to take a long- term approach focused on our vision of zero accidents. 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 oppor- tunities. We have a vision of zero dis- crimination and harassment, which is followed up internally via employee surveys, appraisal talks and reported cases. Work-related accidents with more than 8 hours of absence (LTI) per million hours worked. LTI 0 2 4 6 8 10 24 23 22 21 20 19 18 17 Strong relationships in thriving rural communities Active forestry is essential to thriving rural communities. It creates jobs in places where there are few employers and gives people an opportunity to work, live and enjoy quality of life all over the country. Holmen is one of Sweden’s largest forest owners, with a land holding of 1.3 million hectares from Småland in the south to Västerbotten in the north. 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 have chosen us as a forestry partner. In total, the Swedish forest industry employs 140 000 people and in several regions the local forest industry accounts for 20 per cent or more of industrial em- ployment. It is important for us to have good relations with forest owners, local residents and other businesses that may be affected by our activities. As well as our own workforce of around 3 500 employ- ees, we create employment for local contractors­ and companies across the country. We work extensively with local forestry contractors to plant, clear and harvest trees and we employ around a thousand seasonal workers in our forests every year. As a major employer in several locations, Holmen also cooperates with other local companies and associations to promote social and economic development. 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 of Public Access. Our forest roads enable people to access the countryside, to pick mush- rooms and berries on our land, and also open up excellent opportunities for hunting­ and fishing. — For more information on workers in Holmen’s value chain, see page 113, and for affected communi- ties, see page 115. »We build long-term relationships based on responsible business conduct« Holmen Annual Report 2024    43 Employees and thriving rural communities ↓ Board meetings The Board held twelve meetings in 2024, 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 2025. The Board also paid special attention to financial and accounting issues, and the monitoring of the energy market and the fibre market. In addition, the Board spent time on sustainability matters and reporting, study visits to major customers of the paper and board business and major investment matters. On one occasion the company’s auditor reported directly to the Board on the audit of the accounts and internal control. 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 require- ment under the Swedish Annual Accounts Act. The corporate gov- ernance report complies with the rules and instructions stipulated in the Swedish Code of Corporate Governance. Shareholders Holmen AB had 50 139 shareholders at year-end 2024. Swedish private individu- als accounted for the largest category of owners with 47 555 shareholders. The largest shareholder at year-end, with 62.7 per cent of the votes and 35.0 per cent of the capital, was L E Lundberg- företagen, which means that a Group relationship­ exists between L E Lundberg- företagen AB (corporate ID number 556056-8817), whose registered office is in Stockholm, and Holmen. The second- largest shareholder by votes was the Kempe Foundations and their holdings of Holmen shares amounted to 17.6 per cent of the votes and 7.6 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 2024 Annual General Meeting (AGM), the Board’s authorisation to acquire up to 10 per cent of the company’s shares was renewed. On 26 April 2024, the Board of Directors decided to exercise the buy-back authority in order to ensure the future delivery of shares to partici- pants in Holmen’s long-term share sav- ings programme. On 15 August 2024, the Board decided to use the buy-back authority to adjust the Group’s capital structure. In 2024, 1 554 163 shares were repurchased for SEK 647 million, corre- sponding to an average price of SEK 416/share. The buy-backs amount to 0.9 per cent of the total number of shares. The company already owned 2.1 per cent of its own shares, meaning that at 31 December 2024 Holmen held 3.0 per cent of the total number of shares. See pages 54–55 for further informa- tion on the shares and ownership struc- ture. 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 18 September 2024 that the 2025 AGM would take place on 31 March 2025. 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 com- pany that control the most votes at 31 August each year. The composition of the nomination committee for the 2024 and 2025 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. 44    Holmen Annual Report 2024 Corporate governance report ↓ 2024 Annual General Meeting The notice convening the meeting, the agenda and the minutes of the 2024 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, Henriette Zeuchner and Carina Åkerström. 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 a new share savings programme for Group management and to authorise the Board to acquire treasury shares. Fredrik Lundberg, John Erikmats, SEB, and Natasha Obradovic, Handelsbanken, checked and approved the minutes of the meeting. Shareholders Auditors Nomination committee General meeting of shareholders Four business areas Board of Directors Five group staffs Group management CEO The nomination committee applies rule 4.1 of the Swedish Corporate Governance Code (the Code) as a diversity policy when putting forward proposed Board mem- bers, which means the composition of the Board should reflect the company’s busi- ness operations, phase of development and other circumstances, and should be diverse and wide-ranging in terms of the expertise, experience and background of the members elected by general meet- ings. An even gender distribution is sought. Further information about the work of the nomination committee will be provided at the 2025 AGM. For the 2025 AGM, the nomination committee proposes that the Board con- sist 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), Alice Kempe, Louise Lindh, Ulf Lundahl, Fredrik Persson, Henrik Sjölund, Henriette Zeuchner, Carina Åkerström and the elec- tion of Stefan Widing. Lars Josefsson has declined re-election. Composition of the Board The members of the Board are elected each year by the AGM for the period until the end of the next AGM. According to the articles of association, the Board should consist of 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 2024 AGM decided to re-elect Fredrik­ Lundberg­, Lars Josefsson, ­Alice Kempe, Louise Lindh, Ulf Lundahl, Fredrik Persson, Henrik Sjölund, Henriette Zeuch- ner and Carina Åkerström to the Board. Fredrik Lundberg was re-elected Chair- man of the Board. At the statutory first meeting of the new Board in 2024, 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. Fur- ther information about the members of the Board is provided on pages 56–57. The Board’s activities The Board’s work aims to optimise the company’s profitability by taking a long- term approach to the company’s manage- ment and ensuring that the company’s objectives and strategy are sustainable. The Board’s activities follow a plan intended, among other things, to ensure that the Board receives all the information it requires and that it is kept up to date on issues that are strategically important for the company. 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 information that the Board is to receive continually on financial devel- opments and other key events. Company employees are consulted as experts on relevant issues. ↓ Members of the Board of Directors Attendance at meetings in 2024: Board members Elected Role on the Board Audit committee Remunera- tion committee Board of Directors Audit committee Remunera- tion committee Fee for 2024 decided by AGM (SEK ’000) Fredrik Lundberg 1988 Chairman Member Chairman 12/12 5/5 6/6 860 Lars Josefsson 2016 Member Member – 12/12 5/5 – 430 Alice Kempe 2019 Member – Member 12/12 – 6/6 430 Louise Lindh 2010 Member – – 12/12 – – 430 Ulf Lundahl 2004 Member Chairman – 12/12 5/5 – 430 Fredrik Persson 2022 Member – Member 12/12 – 6/6 430 Henriette Zeuchner 2015 Member – – 12/12 – – 430 Carina Åkerström 2023 Member – – 12/12 – – 430 Henrik Sjölund 2014 Member, President & CEO – – 12/12 – – – 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. Workers’ representatives Tommy Åsenbrygg, member, elected 2009/Ari Aula, member, elected 2022/John Nyberg, member, elected 2023/Martin Nyman, deputy member, elected 2021/Daniel Hägglund, deputy member, elected 2014/Johan Viklund, deputy member, elected 2024. Holmen Annual Report 2024    45 Corporate governance report The Board is provided with regular infor- mation about environmental and sustain- ability matters related to the company’s activities, including the company’s busi- ness ethics rules and business conduct.   An annual evaluation is undertaken whereby each Board member answers a questionnaire containing relevant ques- tions about the Board’s work and has the opportunity to make suggestions about how to enhance this work. Their respon­ ses are presented and discussed at a Board meeting. The results of the evalua- tion 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 committee The Board has created an audit committee made up of Board members. The audit committee’s task is to monitor the compa- ny’s financial reporting, sustainability reporting and the effectiveness of the company’s internal control and risk man- agement. The audit committee reviews and monitors the impartiality and inde- pendence of the auditor. The committee 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 members of Holmen’s audit commit- tee are Ulf Lundahl, Chairman, Fredrik Lundberg and Lars Josefsson. The audit committee met five times. Remuneration committee The Board has also appointed a remuner- ation committee consisting of Fredrik Lundberg, Fredrik Persson and Alice Kempe. The purpose of the committee is to prepare, in a smaller group, decisions concerning the remuneration of the CEO, guidelines for the remuneration of senior management and share- and share price-based incentive schemes. During the year, the committee prepared matters pertaining to the remuneration and other employment conditions of the CEO, and evaluated guidelines for remuneration, share savings programmes and short- term benefits. The committee also exam- ined remuneration structures, remunera- tion levels and methods for establishing 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 Direc- tors, 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 2024 AGM approved the Board fees and payment of the auditors’ fee as invoiced. The 2022 AGM approved a share sav- ings programme for key individuals in the Group. The programme will expire in April 2025. The 2024 AGM approved a new share savings programme for Group management­. The programme will expire in April 2027. Its aim is to strengthen common interests between shareholders and company management, as well as to create a long-term commitment to Hol- men. More information about the ­current share savings programmes and the finan- cial and sustainability targets set 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 division of responsibilities between the Board and the CEO. Holmen’s Group management consists of the company’s CEO, the heads of the four business areas, and the heads of the five Group staffs. Information about the CEO and other members of Group man- agement 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 meet- ings, strategic issues, budgets, invest- ments, internal control, work environ- ment, sustainability matters, climate and environmental issues and silviculture matters. The meetings were also devoted to reviews of the market situation, eco- nomic developments and other external factors affecting the business. The Group’s governance and the tools used for this governance, such as the manage- ment-by-objectives model and common policies, were also discussed. In 2024, Group management focused particularly on analysing the energy market and fibre supply in Europe and its impact on the Group’s competitiveness and activities. Group management also spent time moni- toring regulatory changes related to the company’s strategy and objectives, as well as the impact of future sustainability regulations on the company’s environ- mental and sustainability work. Internal management processes Holmen’s business strategy is formulated by Group management in order to create long-term value for both shareholders and customers. The strategy is adopted by the Board each year and forms the basis for the expectations that are set. On the basis of these expectations, each unit sets tar- gets and identifies success factors for achieving them. The Group’s strategy and objectives are set out on pages 10–11. Also see the sustainability report for the objectives related to sustainability mat- ters on page 100. Key performance indica- tors (KPIs) are linked to the success fac- tors 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 distribution of resources and tar- gets for the coming year are set. Use of a simple management-by-objectives tool for continuous follow-up ensures that the entire organisation is adopting the right priorities to meet the objectives set. Internal management processes and guideline documents. Strategy and targets Strategy, budget and management by objectives Business processes Earnings, reporting and monitoring Code of Conduct Powers Values Authorisation rules Management systems Guidelines Policies Group instructions 46    Holmen Annual Report 2024 Corporate governance report The business areas guide the operational activities towards these targets using pro- cesses for purchasing, production and sales, supported by financial manage- ment, IT, HR, environmental, sustainabil- ity 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, as well as climate- and sustainability-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 oppor- tunities. 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 tackled in the business areas, sup- ported by Group staff. Holmen has devel- oped procedures through policy docu- ments for identifying the risks of its opera- tions having negative impacts on the envi- ronment, people and business conduct, and for identifying the stakeholders affected by Holmen’s operations. For further information about risks, see the Risk management section on pages 49–53. Code of Conduct. Holmen’s Code of Con- duct 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 guides Holmen’s day-to- day operations, clarifying the expectations placed on employees. Holmen’s opera- tions should be based on responsible behaviour towards both internal and external stakeholders. Holmen’s Code of Conduct states that Holmen must endeav- our to ensure that due diligence is shown with regard to consequences for human rights, the environment and the climate. The Supplier Code of Conduct is also in keeping with the above principles, con- ventions and guidelines. Both Holmen’s Code of Conduct and Supplier Code of Conduct aim to prevent potential and actual negative impacts on people, the environment and business conduct in its own operations and in Holmen’s supply chain. 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, eth- nicity, 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. At Group level, Holmen has decided on policies, guidelines and Group instructions that will help to implement Holmen’s strategy and achieve its objec- tives. Policies, guidelines and Group instructions are reviewed annually and updated as necessary, based on develop- ments and changes in the material risks and opportunities associated with the business. Holmen’s CEO decides on the adoption of all policies and guidelines, except the financial policy, which is adopted by the Board. The Executive Vice President coordinates policy work. Each policy and their associated documents have an owner within Holmen’s Group management who is responsible for them. Heads of finance for each business area are responsible for implementation. Policies, guidelines and Group instruc- tions are intended to clarify how employ- ees should act in fundamental and critical areas where material risks and opportuni- ties may arise for the business.     The Group’s eleven policies cover mat- ters 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 treat- ment and employment conditions. A good work environment is also covered in terms of health and safety, anti-corruption and competition issues, and how good busi- ness practice is maintained in dealings with external contacts on different mar- kets. Employees in departments at risk of encountering unauthorised behaviour receive special training in business ethics. The policies specify that raw materials should be used efficiently, pollution should be prevented and and continuous improvements should be aspired. Produc- tion units must carry out a climate risk analysis and prepare climate adaptation plans. Financial risk is managed centrally and should be characterised by a low level of risk. The policies must also ensure that the company’s assets are managed in accordance with Group rules, risks of errors in financial and sustainability reporting are minimised and irregularities are prevented. The Group’s purchasing should contribute to long-term profitabil- ity. The sustainable sale of raw materials, products and services should be ensured in both the short and long term. Informa- tion communicated must be accurate, transparent and easily accessible and comply with legal requirements and ­commercial 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. Each business area is responsible for ensuring that the rules set out in policies are reflected in internal regulations. Compliance is monitored for example through employee surveys and appraisal talks, pay surveys, safety statis- tics 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 fail- ings are found in terms of the corporate culture, the issues are addressed on a case-by-case basis. Whistleblower function. A whistleblower function is available so that employees ↓ Composition of the nomination committee Name Before AGM: Independent of the: Representing 2025 2024 Company Largest shareholder (in terms of votes) Bo Selling L E Lundbergföretagen* x (Chairman) x (Chairman) Yes No Fredrik Lundberg Chairman of the Board x x Yes No Lars Ericson Kempe Foundations* x - Yes Yes Vegard Torsnes Norges Bank* x x Yes Yes *At 31 August 2024, L E Lundbergföretagen controlled 62.2 per cent of the votes, the Kempe Foundations controlled 17.5 per cent and Norges Bank controlled 2.2 per cent. Holmen Annual Report 2024    47 Corporate governance report and other stakeholders can highlight any deficiencies in Holmen’s financial report- ing, discrimination or other possible areas of concern or improprieties at the com- pany. Six cases were reported in 2024 that were deemed to constitute whistleblow- ing as defined by law. As at 31 December 2024, one case was open and under investigation. Other cases were closed after appropriate investigation. No cases of corruption or bribery were identified. Labour law issues were handled by follow- ing standard HR procedures. Internal control of reporting The Board’s responsibility for internal control, financial reporting and sustaina- bility 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 of these matters is delegated to the CEO. Purpose and structure. The purpose of internal control is to ensure that Holmen achieves its objectives both for financial and sustainability reporting (see below), to ensure that the company’s assets are being managed according to Group rules and to prevent irregularities. Group Finance coordinates and monitors the internal control process for reporting. It follows the COSO framework for internal control in its work. The framework comprises five basic elements: the control environment, risk assessment, control activities, information and communica- tion, 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 envi- ronment provides the basis for internal control of financial and sustainability reporting and is based in part on the com- pany’s internal management processes. The Board of Directors’ procedural rules and the instructions for the CEO establish the distribution of roles and responsibili- ties to ensure effective control and man- agement of the business’s risks. Policies, guidelines and instructions contribute to making individuals aware of their role in maintaining good internal con- trol. These documents also ensure that financial and sustainability reporting com- plies 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 activi- ties aim to identify and evaluate the risks that may result in the Group’s reporting objectives not being met. The results of these risk-related activities are compiled and assessed under the guidance of Group Finance. Holmen’s biggest financial reporting risks are linked to the valuation of forest assets, pension obligations, provisions and financial transactions. Holmen’s main sustainability reporting risks primarily relate to definitions and dependence on individuals for data genaration. The risk assessment also includes the identifica- tion and evaluation of operational risks, which are managed through each busi- ness area’s management system. For fur- ther information about risks, see the Risk management section on pages 49–53. Control activities. To ensure that Holmen’s­ financial and sustainability reporting objectives are met, control requirements are incorporated in the pro- cesses that are deemed relevant: sales, purchasing, investments, employees, financial statements, payments, IT and sustainability reporting. 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 information provision, both external and internal, adheres to a com- munication policy adopted by the CEO. The provision of information to Holmen’s shareholders and other stakeholders must be accurate, comprehensive, transparent and consistent, and must take place on equal terms and at the right time. 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 valua- tion of the business. Internal financial reporting must also support­ correct business decisions at all levels in the Group. 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 nonconformities are reported half-yearly to the Executive Vice President. The accu- racy 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 iden- tifying possible deficiencies within the Group and for addressing these through the development of new control require- ments. 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. Audit The audit firm PricewaterhouseCoopers AB (PwC), which has been Holmen’s audi- tor since 2021, was re-elected as auditor at the 2024 AGM for one year. Authorised public accountant Magnus Svensson Henryson­ was appointed as the principal auditor. PwC performs the audit for Holmen­ AB as well as for the majority of Holmen’s subsidiaries. The examination of internal procedures and control systems begins in the second quarter and continues thereafter until year-end. The interim report for January– September is subject to review by the auditors. The examination and audit of the final annual accounts and the annual report, including the sustainability report, take place in January–February.   The Board’s reporting instructions include requirements that the members of the Board receive a report each year from the auditors confirming that the compa- ny’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 2024, 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 con- sulted PwC on matters pertaining to taxa- tion, accounting and for various investiga- tions. The remuneration paid to PwC for 2024 is stated in Note 5 on page 75. PwC is required to assess its independence before making decisions on whether to provide Holmen with independent advice 48    Holmen Annual Report 2024 Corporate governance report Risk management The Group’s business and operational risks and climate- and sustainability- related­ risks and opportunities are man- aged by the relevant business areas. The business areas also make decisions re- garding 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 finan- cial 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 industrial facilities 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. 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. Chang- es in demand for wood may be catered for by moving the harvesting of our own forests be- tween years, while the production of hydro power during the year can be controlled by regulating water reservoir levels. In 2024, demand for wood products was lower than normal, while competition for timber was high. Wood product production was therefore ­curtailed due to weak construction activity. For ­information about how changes in deliveries would affect Holmen’s operating profit, given the circumstances on 31 December 2024, see the ­sensitivity analysis on page 53. Selling prices The market balance in each product segment governs the selling price and affects income. 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 fo- cus towards those products and markets deemed to have the best long-term condi- tions 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 harvest- ing from our own forests between years, and changes in the price of electricity can be part- ly managed by regulating water reservoir lev- els in order to move electricity production over the year. Market prices for paperboard remained broadly stable in 2024, while prices for paper products fell from a high level. Wood product prices increased in 2024, mainly as a result of supply shortages. In 2024, Swedish electricity prices were lower than the previous year. For information about how changes in prices would affect Holmen’s operating profit, given the circumstances on 31 December 2024, see the sensitivity analysis on page 53. 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 in- crease if there is a shortage of raw materials, or if prices increase for input goods. Nearly half of the Group’s wood needs are covered by harvesting from the Group’s own forests, while the remainder is mainly pur- chased 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 elec- tricity purchases. The price risk for this con- sumption is managed through physical fixed price contracts and financial hedging. The Group also sells electricity from its hydro power and wind power assets to the grid. The need for thermal energy is great and is met locally through recovery and production from residual products. Chemicals are a significant input, particularly in paperboard production, but the need is declining since used chemi- cals are being recovered at the mills. The price of wood continued to increase in 2024, while the price of chemicals slightly decreased. ­Virtually all electricity consumption for paper pro- duction was hedged in 2024. For information about how changes in commodity prices would affect Holmen’s operating profit, given the circumstances on 31 December 2024, see the sensitivity analysis on page 53. Holmen Annual Report 2024    49 Risk management Risk Risk management Comments Suppliers Deficiencies in the input supply chain in terms of security of supply and quality can lead to produc- tion 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. 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 require- ments, including respecting internationally recog- nised principles governing the prevention of cor- ruption, human rights, the work environment and the environment. Since 2017, Holmen has engaged an external party, EcoVadis, to monitor suppliers for their compliance with the Code. Compliance with silviculture contractor agreements is ensured through site visits to forests. All silviculture con- tractors are given annual training, through the silvi- culture training programme, in silviculture, and in labour law, and are informed about where to turn should irregularities occur. The supply chain risks relating to the climate, environ- ment, 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 2024, 1 (1) 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 (90) of the Group’s purchasing volumes comply with the principles of the Supplier Code of Conduct. Reducing fossil fuel emissions is discussed with the largest suppliers of input products. Customer credits The risk of the Group’s customers being unable to fulfil their payment obligations constitutes a credit risk. The risk that the Group’s customers will not fulfil their payment obligations is limited by means of creditworthiness checks, credit limits per custom- er and, in some cases, by insuring trade receiva- bles against credit losses. Credit limits are contin- ually monitored. Exposure to individual customers is limited. At 31 December 2024, the Group’s trade receivables totalled SEK 2 823 million (2 696), of which 39 per cent (41) were insured against credit losses. During the year, credit losses on trade receivables had no impact on earnings, - (SEK -2 million). Sales to the five largest customers accounted for 13 per cent (14) of the Group’s total sales in 2024. Installations Production may be seriously disrupted, for exam- ple in the event of a fire, machine breakdown or natural disaster. This can lead to supply problems, unexpected costs and reduced customer confi- dence. Production facilities require ongoing main- tenance and technical upgrades. Major mainte- nance shutdowns can entail higher costs and a greater loss of production than planned. Invest- ments in non-current assets may also be more costly than initially planned. Damage prevention measures, regular mainte- nance 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. In 2024, Holmen revised and restructured the busi- ness continuity planning framework to ensure better holistic management. Holmen invests continuously in fire protection and other damage prevention meas- ures. Planned maintenance shutdowns are carried out each year at the Group’s mills and sawmills to ensure continued good production and high quality products. In December, the solid fuel boiler at Braviken Paper Mill was damaged. Paper production was stopped for a couple of days but was later restarted, resulting in higher energy costs. The incident is believed to be covered­ by insurance, except for the deductible. IT systems Efficient IT support is required to be able to man- age and plan production, sales and purchasing. Disruptions in IT support and unauthorised access to information can have significant negative effects on the business. Operating disruptions and unauthorised access are prevented by security measures and preventive measures in the form of appropriate physical pro- tection, reliable server operation and secure net- works. Measures and procedures are in place to minimise the risk of interruption and to manage sit- uations if interruptions occur. Holmen is continual- ly developing protective measures to address changes in the risk profile. To make its systems and procedures secure, Holmen has created a function focused on IT and cyber securi- ty. A regularly recurring IT security training course for employees was provided in 2024. Forestry regulations 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 sinks may increase in the future. Such a develop- ment 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. Forest and land management are regulated both nationally and at EU level. In order to be able to en- gage in active and sustainable forestry, it is impor- tant that laws and regulations do not restrict the conditions necessary for sustainable operations. Holmen participates in national and international industry organisations to exert an influence on ­relevant political and regulatory issues. Last year, the spotlight was on the implementation of a number of EU regulations and Sweden’s competitive- ness. If Sweden is too ambitious with its implementa- tion, this risks affecting Sweden’s and Holmen’s ability to contribute to the climate transition. Holmen has continually played an active part in discussions, both on its own and through industry organisations, to influence­ the EU’s regulations and the Swedish govern- ment’s implementation planning, including by high- lighting the positive climate effects of a managed forest­ and the substitution brought about by forest products. 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 justi- fy the cost of insurance. To reduce the extent of grazing by wild animals, active efforts are under- taken 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. Spruce bark beetle infestations in southern Sweden continued to decline in 2024, allowing for more normal planning and harvesting of mature forest. The forest management programme has been evaluated in view of the increased risk of damage to forests in a changing climate. The programme is aimed at creating robust forests, meaning that further variation and risk diversi- fication is being considered. To limit the spread of spruce bark beetle, Holmen is prioritising the felling of infested forest and actively working to maintain the value of the wood and find outlets for damaged logs. Climate change Climate change may affect Holmen’s operations, but there are not currently thought to be any major physical risks. Warmer temperatures and changes in precipitation patterns may benefit pests such as fungi and insects, which may lead to lower timber volumes and quality. Longer droughts and higher temperatures may limit forestry activities due to the ground being frozen for shorter periods or stoppages due to a high risk of forest fires. At the same time, a warmer climate could increase forest growth with longer growth periods, more precipi- tation and higher levels of carbon dioxide, aiding photosynthesis. Producing climate adaptation plans is an ongoing process at the respective industrial facility and in forest operations. The management of each site participates in the process and must prioritise any activities to be carried out, taking the costs and risks of the actions and the other needs of the busi- ness into account. The risk of climate change hav- ing an impact on Holmen’s industrial facilities is being managed through each site’s continuity plans. The market’s ambitions to combat climate change are increasing demand for Holmen’s products. Holmen’s ability to manage its own forests is thus crucial to the Group’s contribution to limiting climate change. In- creased 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. 50    Holmen Annual Report 2024 Risk management Risk Risk management Comments Environment and permits Holmen runs operations that require environ- mental permits. The permits specify conditions regarding permitted production volumes, noise levels and permitted emissions to air and wa- ter, among others. 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 industri- al operations, the need for remediation may entail­ future costs. Environmental measures are organised and carried out in accordance with Holmen’s envi- ronmental 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 certified environmental and energy management sys- tems 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 2024, 46 (47) environment-related incidents were reported to the supervisory authorities. In 2024, a new sludge and sedimentation plant was installed at Workington Mill. The plant is being ad- justed so that the environmental permit threshold value for suspended solids will not be exceeded. Holmen is maintaining a continuous dialogue with the equipment’s supplier in order to get it working according to plan. The supervisory authority has been notified. Otherwise, there were no incidents that led to long-term consequences for the envi- ronment, production or human health in 2024. All matters were addressed through corrective ­actions, within the organisations’ environmental management systems. Holmen has several wind farm project applications in progress, but the authorisation­ procedure often takes a long time and its outcome is uncertain. 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. Holmen has a vision of zero work-related acci- dents and its work environment policy states how work-related injuries and illness are to be prevented. 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 ­contractors, are examples of activities to achieve a high level of safety in the workplace. In 2024, the rate of industrial accidents was 5.3 per 1 million hours worked (5.2). The most com- mon accidents were slips, trips and crush injuries. The most significant areas of risk involve work with overhead cranes and vehicles with people in move- ment. Last year, work was focused on launching a long-term initiative to reinforce and promote safe behaviour in the work environment. 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. Skilled labour shortages can delay work and disrupt production. Holmen is working continuously to enhance its employer brand. Each business area prepares a long-term talent management plan each year that identifies recruitment needs. Targeted dig- ital marketing combined with in-person events, such as career days and sponsorship collabora- tions, increase awareness of Holmen and allow it to attract and retain competent employees. Annual questionnaires for new recruits and em- ployee surveys show that employees appreciate Holmen as an employer. The percentage of em- ployees who would recommend Holmen as an employer­ is at a persistently high level. In 2024, Holmen received the accolades Karriärföretag (career­ company) 2024, and came 13th in Univer- sum’s ranking of Sweden’s Best Employers (Sveriges­ Bästa Arbetsgivare). 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. Devi- ations from principles and policies could have a negative impact on the Group’s reputation and business relationships. 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, work- ers’ 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. In 2024, no corruption-related adverse judgments were delivered against Holmen or its employees. There are also no such cases ongoing in court. Six cases were reported through Holmen’s whistle- blowing service in 2024 that were deemed to con- stitute whistleblowing as defined by law. As at 31 December 2024, one case was open and under investigation­. Other cases were closed after appro- priate investigation. No cases of corruption or bribery­ were identified. Labour law issues were handled by following standard HR procedures. 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 are- as such as the environment, real estate, labour law and taxation. Changes in laws and regula- tions may affect conditions for Holmen’s opera- tions and lead to increased costs for regulatory compliance. 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 ex- ample, through consultation and information meetings, visits to sites and meetings with de- cision-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. Following the war in Ukraine, Holmen has taken a number of measures to safeguard its raw material supply, logistics and IT security. Holmen complies with any sanctions adopted. Global trade barriers in the form of tariffs may affect our sales, both directly­ and indirectly through altered trade flows. 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. Holmen Annual Report 2024    51 Risk management 0 2 500 5 000 7 500 10 000 CNH/SEK EUR/GBP USD/SEK GBP/SEK EUR/SEK SEKm 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 curren- cies from costs. Translation exposure risk aris- es from the translation of foreign subsidiaries’ assets, liabilities and earnings into Swedish kronor. 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 normal- ly consist of trade receivables and outstanding orders. The Board may decide to hedge flows for a longer peri- od 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 distin- guished from other transaction exposures. Normally, 90–100 per cent of the currency exposure associated with major investments is hedged. Translation exposure. 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 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 consolidation. 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. Expected flows in EUR/SEK are hedged for just over two years at an average rate of 11.40. For other currencies, 4–5 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.   12 month net flow    Hedged transaction exposure Interest rates Changes in market interest rates affect the Group’s cost of borrowing. The fixed interest rate period for the Group’s net ­financial 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. SEKm <1 year 1–3 years 3–5 years >5 years Pension obligations Right-of- use agree- ments Total SEK 785 -1 000 -1 500 - 0 -175 -1 890 EUR 189 - - - -9 -41 138 GBP -1 792 - - - - -4 -1 796 Other items 156 - - - - -5 151 -662 -1 000 -1 500 - -9 -225 -3 397 Holmen’s average borrowing rate in 2024 was 3.2 per cent. The table below shows the Group’s fixed interest rate period by currency. Credit risk relating to financial counter- parties The risk of financial transactions giving rise to credit risks in relation to financial counterpar- ties. The creditworthiness of Holmen’s financial counter­ parties is assessed using reputable credit rating ­agencies or, where a counterparty has no credit rating, the company’s own analyses. A maximum credit risk and settlement risk are established for each financial counterparty and are continually monitored. The calcu- lation 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 2024, the Group had out- standing derivative contracts of a nominal amount of SEK 16 billion and a net fair ­value of SEK -0.2 billion. 52    Holmen Annual Report 2024 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 usu- ally 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 regu- larly updated. Net financial debt amounted to SEK 3 397 million, equal to 6 per cent of equity. Financial liabilities ­totalled SEK 3 694 million at the end of the year, of which SEK 1 048 million are due for payment in 2025, and financial assets totalled SEK 295 mil- lion, of which SEK 234 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.   Credit facility      Financial liabilities Sensitivity analysis Operational risks Impact on operating profit, SEKm Sale Change Price Deliveries Board and paper +/-1% 153 59 Wood products +/-1% 37 11 Wood from company forests +/-1% 20 14 Hydro and wind power +/-1% 6 5 Input goods Change Price Wood +/-1% 52 Electricity* +/-1% 3 Chemicals +/-1% 20 Other variable costs +/-1% 8 Delivery costs +/-1% 22 Employees +/-1% 30 Other fixed costs +/-1% 21 *Taking electricity price hedges for 2025 into account. Without taking hedges into account, the corresponding impact would be SEK 11 million. 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 part of the electricity consump- tion at the paper mills. For 2025, price hedges are in place covering 85 per cent of full produc- tion. 45 per cent is hedged for 2026 and 10 per cent for 2027. Financial risks Profit/loss before tax* Change SEKm Exchange rate total +/-5% 225 EUR/SEK +/-5% 33 USD/SEK +/-5% 100 GBP/SEK +/-5% 54 other currencies/SEK +/-5% 38 Borrowing rate +/-1% point 1 Equity Change SEKm Transaction hedging +/-5% 570 Investment hedging +/-5% 51 Equity hedging +/-5% 73 Electricity price hedging +/-60 % 986 Interest rate changes +/-1% point 61 *Estimated effect for 2025 including hedging. 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’ aver- age historical volatility for each instrument, which is deemed to be a reasonable change go- ing 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 508 million a year. 0 1 000 2 000 3 000 4 000 5 000 >2029 2028 2027 2026 2025 SEKm Holmen Annual Report 2024    53 Risk management 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 328 per cent, compared with 175 per cent for the OMX Stockholm GI. For ­Holmen, this corresponds to an ­annual return of 16 per cent. The number of shareholders has increased over the same period from 22 000 to 50 100. 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 classes of shares are currently listed on Nasdaq Stockholm, Large Cap. At the end of 2024, Holmen A was trading at SEK 399 (424) and Holmen B at SEK 406 (426), corresponding to a market capitalisation­ of SEK 63.7 billion (67.6). Holmen’s class B shares reached their highest closing price for the year, SEK 463, on 21 May. The lowest closing price, SEK 395, was recorded on 9 February. The daily average number of class B shares traded was 453 000, which corre- sponds to a value of SEK 190 million. The daily average number of class A shares traded was 854. 35 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. Dividend Decisions on shares 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 31 March 2025 ­approve an ordinary dividend of SEK 9 per share and an extra dividend of SEK 3 per share. Share buy-backs A total of 1 554 163 class B shares were repurchased for SEK 647 million during the year, corresponding to an average price of SEK 416/share. The buy-backs amount to 0.9 per cent of the total number of shares. When combined with the shares that it already owned, this means that at 31 December 2024 Holmen held 3.0 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 2025 AGM. Share structure After the share buy-backs, Holmen has 157 668 192 outstanding shares, of which 45 246 468 class A shares and 112 421 724 class B shares. The company also holds 4 844 132 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 restric- tions on the transferability of the shares. Ownership structure Holmen had a total of 50 139 sharehold- ers at year-end 2024. In terms of num- bers, Swedish private individuals were the largest category of owners with 47 555 shareholders. Shareholders registered in Sweden own 76 per cent (73) of the share capital. Among foreign shareholders, the largest proportion of shares are held in Total shareholder return Holmen B and OMX Stockholm Including reinvested dividends without tax   Holmen B    Stockholm Stock Exchange (OMXSGI) Source: Macrobond Share price performance Holmen B and OMX Stockholm 0 100 200 300 400 500 600 Jan 25 24 23 22 21 20 19 18 17 16 15 Index   Holmen B    OMX Stockholm 30 (OMXS30)   Total number of class B shares traded (thousands) 0 10 000 20 000 30 000 40 000 50 000 18 19 20 21 22 23 24Jan 25 15 16 17 0 100 200 300 400 500 600 Index No. of shares (thousands) 12 11 52 25 2 Shareholder categories Share of capital, %   Swedish institutions 52%   Swedish equity funds 11%   Swedish private individuals 12%   Foreign shareholders 25% Norway and the US, accounting for 8 per cent and 7 per cent of the capital, respec- tively. The largest owner at the turn of 2024/2025, with 62.7 per cent of the votes and 35.0 per cent of the capital, was L E Lundbergföretagen AB. Shareholder communication Information about the company is availa- ble 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. 54    Holmen Annual Report 2024 Shareholder information Earnings per share, SEK 18.0 Proposed dividend per share, SEK 9.0 + 3.0 Data per share (adjusted for the 2:1 share split in 2018) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Diluted earnings per share, SEK1) 18.0 23.0 36.3 18.5 12.2 52.6 13.5 9.9 8.5 3.3 Dividends, SEK Ordinary dividend, SEK 9.02) 8.5 8 7.5 7.25 3.5 6.75 6.5 6 5.5 Extra dividend, SEK 3.02) 3.0 8 4.0 3.5 - - - - - Total dividends as % of: Equity 3.3 3.2 4.6 4.0 4.1 1.4 4.8 5.0 4.7 4.2 Closing market price 3.0 2.7 3.9 2.6 2.7 1.2 3.9 3.0 3.7 4.0 Profit/loss for the year 67 50 44 62 88 6 50 65 71 158 Return on equity, %1) 5 7 11 7 5 35 10 8 7 3 Return on capital employed, %1) 3) 6 8 13 9 6 9 10 9 9 6 Equity per share, SEK 364 358 352 290 263 238 140 131 127 124 Closing market price, B, SEK 406 426 414 435 394 285 175 218 164 131 Average market price for year, B, SEK 422 414 459 404 310 220 213 186 141 132 Highest market price for year, B, SEK 463 459 573 469 396 297 240 218 163 153 Lowest market price for year, B, SEK 395 372 400 365 228 172 175 157 114 110 Total closing market capitalisation, ’000 SEKm 63.7 67.7 67.5 71.0 64.7 46.6 29.5 36.6 27.4 22.3 P/E ratio4) 23 19 11 23 32 5 13 22 19 39 EV/EBITDA3) 5) 13 11 8 14 19 14 9 13 10 11 Closing beta value (48 months), B, at year-end6) 0.67 0.72 0.74 0.83 0.83 0.89 0.85 0.84 0.81 0.75 Number of shareholders at year-end 50 139 53 344 52 701 48 126 48 104 38 904 33 573 30 903 28 159 28 176 1) See page 134: 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 OMXSGI over a period of 48 months. Share capital structure Equities Votes No. of shares No. of votes Quotient value SEKm A 10 45 246 468 452 464 680 26 1 180 B 1 117 265 856 117 265 856 26 3 058 Total no. of shares 162 512 324 569 730 536 4 238 Holding of repurchased class B shares -4 844 132 -4 844 132 Total number of outstanding shares 157 668 192 564 886 404 Changes in share capital 2000–2024 Change in no. of shares Total no. of shares Change in share capital Total share capital, SEKm 2001 Cancellation of repurchased shares -8 885 827 79 972 451 -444 3 999 2004 Conversion and subscription 4 783 711 84 756 162 239 4 238 2018 Share split 84 756 162 169 512 324 - 4 238 2020 Cancellation of repurchased shares -7 000 000 162 512 324 - 4 238 Ownership structure* 31 Dec 2024 % of capital % of votes L E Lundbergföretagen 35.0 62.7 Norges Bank 7.9 2.2 Kempe Foundations 7.6 17.6 Carnegie Funds (Sweden) 2.9 0.8 SEB Funds 2.4 0.7 BlackRock 2.2 0.6 Swedbank Robur Funds 2.1 0.6 Vanguard (US) 2.0 0.6 Handelsbanken Funds 1.6 0.4 Alecta 1.4 0.4 Total 65.2 86.7 Other 34.8 13.3 Total 100.0 100.0 Of which non-Swedish shareholders 24.8 7.2 *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’. Shareholder statistics at 31 Dec 2024 Holding classes, no. of shares No. of shareholders Share of capital, % 1–1 000 46 349 4 1 001–100 000 3 701 11 100 001– 89 85 Total 50 139 100 Annual return at 31 Dec 2024*, % 1 year 3 years 5 years 10 years Holmen B -1 2 11 16 Stockholm Stock Exchange (OMXSGI) 9 0 10 11 *Including reinvested dividends. Holmen’s total shareholder return has averaged 16 per cent a year over the past 10 years, which is 5 percentage points better than the OMX Stockholm GI. Holmen Annual Report 2024    55 Shareholder information 1. Fredrik Lundberg 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 Skanska, 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 SweTree Technologies AB. Shareholding: 322 792 shares. 4. Henriette Zeuchner Stockholm. Born in 1972. Member since 2015. M.Sc. in Economics and Bachelor of Law. Other significant appointments: Chairwoman of All Ears AB. Board member of the NTM Group and TVM Media. 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. 6. Louise Lindh 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, L E Lundbergföretagen AB and Svenska Handelsbanken AB. Shareholding: 200 000 shares. 7. Fredrik Persson 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 A Ahlström Oy, AB Industrivärden, Hufvudstaden AB, ICA Gruppen AB and Interogo Holding AG. Shareholding: 3 000 shares. 8. Carina Åkerström Stockholm. Born in 1962. Member since 2023. Legal counsel. Other significant appointments: Board member of the World Childhood Foundation, SkiStar and the Royal Swedish Academy of Engineering Sciences’ Business Executives Council. Shareholding: 630 shares. 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. Workers’ representatives 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. 11. John Nyberg Överklinten. Born in 1975. Member since 2024. Employee representative, Swedish Trade Union Confederation. Club chairman at Holmen’s sawmill in Bygdsiljum. 12. Johan Viklund Hudiksvall. Born in 1979. Deputy member since 2024. 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 Unionen Club. Shareholding: 760 shares. 14. Daniel Hägglund Örnsköldsvik. 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. Board of Directors This information relates to personal and related party shareholdings at 31 December 2024. 56    Holmen Annual Report 2024 Board of Directors 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. Johan Viklund 13. Martin Nyman 14. Daniel Hägglund 15. Tommy Åsenbrygg 1 7 3 4 8 5 9 10 14 6 2 11 13 12 15 Holmen Annual Report 2024    57 Board of Directors 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 relationships. Further information is provided on page 56. 2. Anders Jernhall Executive Vice President Born in 1970. Joined Holmen in 1997. Shareholding: 21 595 shares. 3. Stefan Loréhn* CFO Born in 1978. Joined Holmen in 2025. Shareholding: 3 000 shares. 4. Sören Petersson Senior Vice President Forest Born in 1969. Joined Holmen in 1994. Shareholding: 21 267 shares. 5. Fredrik Nordqvist Senior Vice President Renewable Energy Born in 1971. Joined Holmen in 2011. Shareholding: 700 shares. 6. Johan Padel Senior Vice President Wood Products Born in 1966. Joined Holmen in 2014. Shareholding: 1 880 shares. 7. Lars Lundin Senior Vice President Board and Paper Born in 1966. Joined Holmen in 2018. Shareholding: 4 200 shares. 8. Gunilla R Söderberg Senior Vice President Human Resources Born in 1966. Joined Holmen in 2013. Shareholding: 1 373 shares. 9. Ola Schultz-Eklund Senior Vice President Technology Born in 1961. Joined Holmen in 1994. Shareholding: 4 602 shares. 10. Stina Sandell Senior Vice President Sustainability and Communications Born in 1966. Joined Holmen in 2017. Shareholding: 2 145 shares. 11. Henrik Andersson Senior Vice President Legal Affairs Secretary of the Board of Directors. Born in 1971. Joined Holmen in 2008. Shareholding: 5 800 shares. Group management This information relates to personal and related party shareholdings at 31 December 2024. *Took up the post in February 2025. 1 2 8 3 5 4 9 10 11 6 7 58    Holmen Annual Report 2024 Group management Calendar and information Information The interim and year-end reports are presented at an online conference for press and analysts. The conference is held in English and is broadcast live on holmen.com. The annual report, togeth- er with year-end and interim reports, is published in Swedish and English, and the reports are sent automatically to the shareholders who have indicated their wish to receive them. The reports are also available at holmen.com. How to order printed documents: Holmen AB, Group staff 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 Holmen will publish the following financial reports for 2025: Interim report Jan–Mar: 8 May 2025 Interim report Jan–Jun: 14 August 2025 Interim report Jan–Sep: 23 October 2025 Year-end report: 30 January 2026 2025 AGM: 31 March 2025 Trading and dividend dates The last day for trading, including dividend rights: 31 March 2025 Record date for dividend: 2 April 2025 Payment date for dividend: 7 April 2025 Holmen Annual Report 2024    59 Calendar and information Operating profit for 2024 amounted to SEK 3 721 million (4 755). The decrease in profit is due to lower paper prices and the positive impact of income from the sale of surplus electricity the previous year. Net financial items totalled SEK -62 million (-49). Recognised tax totalled SEK -798 million (-1 008), corresponding to 22 per cent (21) of the profit/loss before tax. Statement of comprehensive income, SEKm Note 2024 2023 Profit/loss for the year 2 861 3 697 Other comprehensive income Revaluation of forest land 9 454 3 493 Revaluations of defined benefit pension plans 18 -5 -6 Tax attributable to items that will not be reclassified to profit/loss for the year 7 -92 -718 Total items that will not be reclassified to profit/loss for the year 357 2 769 Cash flow hedges Revaluation -95 -815 Transferred from equity to the income statement -406 -2 727 Transferred from equity to non-current assets - -6 Translation difference on foreign operations 181 55 Hedging of currency risk from foreign operations -127 -42 Tax attributable to items that will be reclassified to profit/loss for the year 7 129 740 Total items that will be reclassified to profit/loss for the year -318 -2 795 Total other comprehensive income after tax 39 -27 Total comprehensive income 2 900 3 671 Attributable to: Owners of the parent company 2 900 3 671 Financial statements 60    Holmen Annual Report 2024 Financial statements Income statement, SEKm Note 2024 2023 Net sales 2 22 759 22 795 Other operating income 3 2 083 1 996 Change in inventories 233 -79 Raw materials and consumables -12 752 -11 162 Personnel costs 4 -3 389 -3 312 Other operating expenses 5 -4 739 -4 691 Change in value of biological assets 9 907 562 Depreciation and amortisation according to plan 10, 11, 12 -1 388 -1 360 Profit from investments in associates 13 7 6 Operating profit 3 721 4 755 Financial income 6 39 49 Financial costs 6 -101 -98 Profit/loss before tax 3 660 4 705 Tax 7 -798 -1 008 Profit/loss for the year 2 861 3 697 Attributable to: Owners of the parent company 2 861 3 697 Earnings per share (SEK) 8 basic 18.0 23.0 diluted 18.0 23.0 Average number of shares (million) 8 basic 158.8 160.5 diluted 158.8 160.5 Group Financial statements Holmen Annual Report 2024    61 Balance sheet at 31 December, SEKm Note 2024 2023 Non-current assets Biological assets 9 31 600 30 555 Forest land 9 26 243 25 793 Non-current intangible assets 10 498 513 Property, plant and equipment 11 11 231 10 330 Right-of-use assets 12 220 244 Investments in associates 13 1 701 1 686 Other shares and participations 13 6 5 Non-current financial receivables 14 46 61 Deferred tax assets 7 3 3 Total non-current assets 71 549 69 190 Current assets Inventories 15 5 697 4 837 Trade receivables 16 2 823 2 696 Current tax assets 7 144 114 Other operating receivables 16 1 085 1 630 Current financial receivables 14 15 50 Cash and cash equivalents 14 234 1 202 Total current assets 9 999 10 529 Total assets 81 548 79 719 Equity Share capital 4 238 4 238 Other contributed capital 281 281 Reserves 20 726 20 667 Retained earnings including profit/loss for the year 32 125 31 738 Total equity attributable to owners of the parent company 57 370 56 923 Non-current liabilities Non-current financial liabilities 14 2 502 1 902 Non-current liabilities relating to right-of-use assets 132 160 Pension obligations 18 9 9 Non-current provisions 19 389 418 Deferred tax liabilities 7 14 252 13 858 Total non-current liabilities 17 285 16 347 Current liabilities Current financial liabilities 14 953 1 021 Current liabilities relating to right-of-use assets 95 91 Current provisions 19 45 31 Trade payables 20 3 808 3 394 Current tax liabilities 7 97 105 Other operating liabilities 20 1 895 1 808 Total current liabilities 6 893 6 449 Total liabilities 24 178 22 796 Total equity and liabilities 81 548 79 719 Group Financial statements 62    Holmen Annual Report 2024 Changes in equity, SEKm Reserves Share capital Other contri- buted capital Trans- lation reserve Hedge reserve Revaluation surplus Retained earnings incl. profit/loss for the year Total equity Opening equity balance 1 Jan 2023 4 238 281 126 3 137 17 426 31 742 56 950 Profit/loss for the year - - - - - 3 697 3 697 Other comprehensive income Revaluation of forest land - - - - 3 493 - 3 493 Revaluation of defined benefit pension plans - - - - - -6 -6 Cash flow hedges - - - -3 549 - - -3 549 Translation difference on foreign operations - - 55 - - - 55 Hedging of currency risk from foreign operations - - -42 - - - -42 Tax attributable to other comprehensive income - - 9 731 -720 1 22 Total other comprehensive income - - 22 -2 818 2 774 -5 -27 Total comprehensive income - - 22 -2 818 2 774 3 692 3 671 Dividends paid - - - - - -2 592 -2 592 Buy-backs of treasury shares - - - - - -1 119 -1 119 Share savings programmes - - - - - 13 13 Closing equity balance 31 Dec 2023 4 238 281 148 320 20 199 31 738 56 923 Profit/loss for the year - - - - - 2 861 2 861 Other comprehensive income Revaluation of forest land - - - - 454 - 454 Revaluation of defined benefit pension plans - - - - - -5 -5 Cash flow hedges - - - -501 - - -501 Translation difference on foreign operations - - 181 - - - 181 Hedging of currency risk from foreign operations - - -127 - - - -127 Tax attributable to other comprehensive income - - 26 103 -93 1 37 Total other comprehensive income - - 80 -398 360 -4 39 Total comprehensive income - - 80 -398 360 2 858 2 900 Gain/loss on currency hedges, acquisition of non-current assets - - - 16 - - 16 Dividends paid - - - - - -1 831 -1 831 Buy-backs of treasury shares - - - - - -647 -647 Share savings programmes - - - - - 11 11 Closing equity balance 31 Dec 2024 4 238 281 228 -61 20 560 32 125 57 370 Group Financial statements Holmen Annual Report 2024    63 Cash flow statement, SEKm Note 2024 2023 Operating activities Profit/loss before tax 25 3 660 4 705 Adjustments for non-cash items Depreciation and amortisation according to plan 1 388 1 360 Change in value of biological assets -907 -562 Change in provisions -16 -12 Other* 28 -19 Tax paid -425 -160 Cash flow from operating activities before changes in working capital 3 728 5 311 Cash flow from changes in working capital Change in inventories -824 11 Change in trade receivables and other operating receivables 4 899 Change in trade payables and other operating liabilities 409 -417 Cash flow from operating activities 3 317 5 805 Investing activities Acquisition of property, plant and equipment -1 956 -1 497 Disposal of property, plant and equipment 38 15 Acquisition of non-current intangible assets -1 -46 Investments in and acquisition of biological assets -158 -162 Disposal of biological assets 20 38 Acquisition of shares and participations -8 0 Disposal of shares and participations 0 0 Cash flow from investing activities -2 066 -1 653 Financing activities Long-term borrowings raised 25 1 500 - Repayment of long-term borrowings 25 -1 000 -1 000 Change in current financial liabilities 25 -112 -64 Repayment of debt related to right-of-use assets 25 -127 -114 Change in current financial receivables -3 0 Buy-backs of treasury shares -647 -1 119 Dividends paid to owners of the parent company -1 831 -2 592 Cash flow from financing activities -2 221 -4 888 Cash flow for the year -970 -736 Cash and cash equivalents at beginning of year 1 202 1 935 Exchange difference on cash and cash equivalents 2 3 Cash and cash equivalents at end of year 234 1 202 *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 2024 2023 Opening net financial debt -1 869 -2 145 Cash flow Operating activities 3 317 5 805 Investing activities (excl. financial receivables) -2 066 -1 653 Buy-backs of treasury shares -647 -1 119 Dividends paid -1 831 -2 592 Liabilities arising from new right-of-use agreements -105 -117 Revaluations of defined benefit pension plans -3 -6 Foreign exchange effects and changes in fair value -192 -43 Closing net financial debt -3 397 -1 869 Parent company Income statement, SEKm Note 2024 2023 Net sales 2 20 393 20 234 Other operating income 3 1 253 1 337 Change in inventories 192 -81 Raw materials and consumables -10 890 -9 551 Personnel costs 4 -2 814 -2 706 Other external costs 5 -7 048 -6 754 Depreciation and amortisation according to plan 10, 11 -60 -61 Operating profit 1 027 2 419 Profit/loss from investments in Group companies 6, 22 350 360 Interest income and similar income 6 215 175 Interest expenses and similar expenses 6 -281 -176 Profit/loss after financial items 1 311 2 778 Appropriations 23 366 190 Profit/loss before tax 1 677 2 968 Tax 7 -302 -547 Profit/loss for the year 1 375 2 421 Statement of comprehensive income, SEKm Note 2024 2023 Profit/loss for the year 1 375 2 421 Other comprehensive income Cash flow hedges Revaluation -108 -6 162 Transferred from equity to the income statement -395 2 727 Transferred from equity to non- current assets - 6 Tax attributable to other comprehensive income 7 104 706 Total items that will be reclassified to profit/loss for the year -400 -2 723 Total comprehensive income 976 -302 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 -127 million (-42). Cash flow statement, SEKm Note 2024 2023 Operating activities Profit/loss after financial items 1 311 2 778 Adjustments for non-cash items Depreciation and amortisation according to plan 60 61 Change in provisions 6 15 Other* 109 230 Tax paid -318 -55 Cash flow from operating activities before changes in working capital 1 168 3 029 Cash flow from changes in working capital Change in inventories -699 -89 Change in operating receivables 14 806 Change in operating liabilities 370 -336 Cash flow from operating activities 853 3 410 Investing activities Acquisition of property, plant and equipment -7 -102 Disposal of property, plant and equipment 6 51 Acquisition of shares and participations 0 -100 Disposal of shares and participations 1 - Cash flow from investing activities 0 -151 Financing activities Long-term borrowings raised 25 1 500 - Repayment of long-term borrowings 25 -1 000 -1 000 Change in other financial liabilities 25 -614 147 Change in other financial receivables -3 0 Buy-backs of treasury shares -647 -1 119 Dividends paid to owners of the parent company -1 831 -2 592 Group contributions received 921 988 Group contributions paid -89 -367 Cash flow from financing activities -1 763 -3 943 Cash flow for the year -910 -684 Cash and cash equivalents at beginning of year 1 090 1 774 Cash and cash equivalents at end of year 180 1 090 *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. Financial statements 64    Holmen Annual Report 2024 Parent company Balance sheet at 31 December, SEKm Note 2024 2023 Non-current assets Non-current intangible assets 10 8 8 Property, plant and equipment 11 3 106 3 098 Non-current financial assets Shares and participations 13, 22 11 896 11 896 Non-current financial receivables 14 4 365 3 809 Total non-current assets 19 374 18 810 Current assets Inventories 15 4 720 4 054 Operating receivables 16 3 131 3 618 Current tax assets 7 105 87 Current investments 14 15 50 Cash and cash equivalents 14 180 1 092 Total current assets 8 152 8 901 Total assets 27 527 27 711 Balance sheet at 31 December, SEKm Note 2024 2023 Equity 17 Restricted equity Share capital 4 238 4 238 Statutory reserve 1 577 1 577 Revaluation reserve 100 100 Non-restricted equity Retained earnings incl. hedge reserve 4 682 5 112 Profit/loss for the year 1 375 2 421 Total equity 11 972 13 448 Untaxed reserves 23 4 950 4 484 Provisions Pension obligations 18 0 1 Provisions 19 630 623 Deferred tax liabilities 7 584 683 Total provisions 1 215 1 308 Liabilities Non-current financial liabilities 14 3 241 2 684 Current financial liabilities 14 953 1 021 Operating liabilities 20 5 195 4 766 Total liabilities 9 389 8 471 Total equity and liabilities 27 527 27 711 Changes in equity, SEKm Restricted equity Non-restricted equity Share capital Statutory reserve Revaluation reserve Hedge reserve Retained earnings Profit/loss for the year Total equity Opening equity balance 1 Jan 2023 4 238 1 577 100 3 045 4 469 4 019 17 448 Appropriation of profits - - - - 4 019 -4 019 - Profit/loss for the year - - - - - 2 421 2 421 Other comprehensive income Cash flow hedges - - - -3 429 - - -3 429 Tax on other comprehensive income - - - 706 - - 706 Total other comprehensive income - - - -2 723 - - -2 723 Total comprehensive income - - - -2 723 4 019 -1 598 -302 Dividends paid - - - - -2 592 - -2 592 Buy-backs of treasury shares - - - - -1 119 - -1 119 Share savings programmes - - - - 13 - 13 Closing equity balance 31 Dec 2023 4 238 1 577 100 322 4 790 2 421 13 448 Appropriation of profits - - - - 2 421 -2 421 - Profit/loss for the year - - - - - 1 375 1 375 Other comprehensive income Cash flow hedges - - - -503 - - -503 Tax on other comprehensive income - - - 104 - - 104 Total other comprehensive income - - - -400 - - -400 Total comprehensive income - - - -400 2 421 -1 046 976 Gain/loss on currency hedges, acquisition of non-current assets - - - 16 - - 16 Dividends paid - - - - -1 831 - -1 831 Buy-backs of treasury shares - - - - -647 - -647 Share savings programmes - - - - 11 - 11 Closing equity balance 31 Dec 2024 4 238 1 577 100 -61 4 743 1 375 11 972 Financial statements Holmen Annual Report 2024    65 Note 1 Notes to the financial ­statements Amounts in SEKm, unless otherwise stated 1. Accounting policies 66 2. Operating segment reporting   71 3. Other operating income   72 4. Employees, personnel costs and remuneration of senior management 73 5. Auditors’ fee and remuneration  75 6. Net financial items and income from financial instruments   75 7. Tax    76 8. Earnings per share  78 9. Forest land and biological assets 78 10. Non-current intangible assets    82 11. Property, plant and equipment    82 12. Right-of-use assets (leases)    83 13. Investments in associates and other shares and participations    84 14. Financial instruments    85 15. Inventories    88 16. Operating receivables    88 17. Parent company equity    88 18. Pension obligations    88 19. Provisions    90 20. Operating liabilities   90 21. Related parties    90 22. Investments in Group companies    90 23. Untaxed reserves    91 24. Collateral and contingent liabilities    91  25. Cash flow statement    92 26. Critical accounting estimates and judgements    92 27. Events after the balance sheet date    92 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 ap- plied 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 environ- ments 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. Estimates and judgements in the financial statements Preparing the financial statements in accordance with IFRS requires the com­ pany’s management to make estimates and judgements, as well as to make ­assumptions that affect the application of the accounting policies and the recog- nised 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 26 ‘Critical accounting estimates and judgements’. Changes in accounting policies New and amended accounting policies applicable as of 2024 The new and amended IFRSs applicable from 1 January 2024 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. The precise consequences of the implementation of IFRS 18 Presentation and Disclosure in Financial Statements have not yet been determined. 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 criteria are based on the Group’s business areas. This is in line with the Group’s operating structure and the internal reporting to the CEO and the Board. The ­operating segments’ profits, assets and liabilities are recognised in accordance with the profits (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 segmentation and a presentation of the operating segments. 66    Holmen Annual Report 2024 Notes Note 1 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 and ­ other consolidated surplus and deficit values, 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 bal- ance 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. From 2025, all the ­operations of the Board and Paper business area will be conducted through the commission company Holmen Board and Paper AB, formerly Holmen Iggesund Paperboard AB, following the absorption by merger of the commission company Holmen Paper AB. The parent company is liable for all the commitments entered into by these ­companies. All the 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. 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 applica- ble practice on each market. Renewable energy certificates and guarantees of origin Some of the Group’s renewable 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. Emission allowances Holmen receives a free allocation of emission allowances under the EU ETS and UK ETS. The free allocation is recognised as income on the completion of deliv- ery to external parties for the emission allowances not used to cover emissions from its own activities. The income is recognised as 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 costs Financial income and costs 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 calcu­ lated 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 qualify- ing 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. Holmen Annual Report 2024  67 Notes Note 1 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 comprehen- sive 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. 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 (EPS) The calculation of earnings per share (EPS) is based on the Group’s profit/loss for the year attributable to owners of the parent company 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 instru- ment. 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 meas- ured 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 the occurrence of an event indicates an increased credit risk and that the entire book value may not be recovered, an individual ­assessment is made of each instrument. Missed payments from counterparties usually constitute such an event. Any impairment is recognised based on an ­individual estimate. For financial instruments for which no events have occurred that indicate a low credit quality, a provision is made for expected 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 compre- hensive income, to charge them against the hedged transactions. When invest- ments 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 recog- nised in the income statement as hedge accounting is not used. Holmen’s cash 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, elec- tricity purchases and capital expenditures. The hedge ratio is determined on an ongoing basis to reflect the economic relationship between the hedged item and the hedging instrument. The Group’s risk management of financial instruments is described on pages 52–53. Forest land and biological assets The Group’s forest land is recognised at fair value using the revaluation model in IAS 16 Property, Plant and Equipment. Fair value is calculated based on trans- action prices for forest properties in the counties where the Group owns forest land, less the fair value of standing trees recognised as biological assets in ­accordance with IAS 41 Biological Assets. Fair value measurement is based on measurement level 3. 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. Standing trees are recognised at fair value as biological assets in accordance with IAS 41 Biological Assets. The value of the biological assets is established by calculating the present value of the cash flows, less selling costs but before tax, expected from harvesting the currently standing trees. Fair value measurement is based on measurement level 3. Changes in the fair value of biological assets are recognised in the income statement. Recognition in the parent company’s accounts Forest land and standing trees are recognised in accordance with RFR 2 in the parent company’s accounts. This means that they are classified as non-current assets (forest land) 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 relat- ing to some energy assets, are recognised at cost after the deduction of accumu- lated amortisation and any impairment losses. The Group’s non-current intangi- ble 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 68    Holmen Annual Report 2024 Notes Note 1 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 finan- cial 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 10–20 Other machinery 10 Forest roads 20 Equipment 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 must 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 agree- ment is, or contains, a lease. An agreement is, or contains, a lease if the agree- ment 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 agree- ment’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 obso- lescence, 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. 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. 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 sepa- rately for each plan by estimating future benefits earned by employees through their employment in both current and previous periods. These benefits are dis- counted 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 ­comprehensive 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 ac- count 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, the 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 complies with the provisions of the Swedish Pension Obligations Vesting Act and the Swedish Financial Supervisory Authority’s regulations, because this is a ­condition for the right to make deductions for tax purposes. The main differences in relation to the rules in IAS 19 relate to how the discount rate of interest is ­established, the calculation of the defined benefit obligation on the basis of the current pay level without any assumption regarding 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 for payroll tax is recog- nised in the consolidated accounts 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 Holmen Annual Report 2024  69 Notes Note 1 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. 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 com- prises 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 ‘Invest- ments 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 (-). 70    Holmen Annual Report 2024 Notes Note 2 Note 2. Operating segment reporting 2024 Forest Renewable Energy Wood Products Board and Paper Group-wide and other Eliminations Total Group Net sales External 2 991 634 3 896 15 238 - - 22 759 Internal 6 327 8 - - - -6 335 - Other operating income 228 54 962 1 560 254 -975 2 083 Operating expenses -8 431 -327 -4 671 -14 112 -417 7 311 -20 647 Change in value of biological assets 907 - - - - - 907 Depreciation and amortisation according to plan -75 -111 -186 -984 -32 - -1 388 Profit from investments in associates - 6 1 - - - 7 Operating profit/loss 1 947 264 2 1 702 -194 - 3 721 Operating margin, % 21 41 0 11 - - 16 Return on capital employed, % 4 6 0 21 - - 6 Operating assets 60 950 5 428 3 319 11 536 750 -734 81 250 Operating liabilities -2 632 -276 -757 -2 218 -1 085 734 -6 234 Deferred tax, net -12 341 -564 -188 -1 300 143 - -14 249 Capital employed 45 978 4 588 2 375 8 019 -192 - 60 767 Acquisition of non-current assets 229 559 364 949 13 - 2 114 External net sales by market Sweden 2 991 634 1 237 562 - - 5 425 UK - - 587 1 953 - - 2 540 Germany - - 47 2 428 - - 2 475 Italy - - 13 1 257 - - 1 271 France - - 43 1 158 - - 1 201 Rest of Europe 0 - 898 5 020 - - 5 918 Asia - - 254 1 732 - - 1 986 Rest of the world - - 816 1 128 - - 1 944 Total 2 991 634 3 896 15 238 - - 22 759 Group Parent company Net sales by market 2024 2023 2024 2023 Sweden 5 425 5 637 5 827 5 670 UK 2 540 2 565 1 950 1 845 Germany 2 475 2 495 2 022 2 062 Italy 1 271 1 174 1 134 1 027 France 1 201 1 406 1 034 1 229 Rest of Europe 5 918 5 776 4 679 4 839 Asia 1 986 2 130 1 910 2 070 Rest of the world 1 944 1 612 1 838 1 492 Total 22 759 22 795 20 393 20 234 Income from external customers has been allocated to individual countries according to the country in which the customer is based. Group Parent company Non-current assets by country 2024 2023 2024 2023 Sweden 69 991 67 680 15 005 14 997 UK 1 499 1 437 - - Other 4 4 - - Total 71 494 69 121 15 005 14 997 Group Parent company Net sales by product group 2024 2023 2024 2023 Consumer paperboard 7 072 6 437 4 550 4 133 Pulp 384 328 610 454 Paper 7 782 8 200 7 782 8 200 Wood products 3 593 3 649 3 706 3 819 Wood construction solutions 302 422 - - Wood 2 991 2 692 2 991 2 691 Electricity 623 1 051 595 781 Other 12 17 159 156 Total 22 759 22 795 20 393 20 234 Holmen Annual Report 2024  71 Notes Notes 2–3 Note 2. Operating segment reporting, cont. 2023 Forest Renewable Energy Wood Products Board and Paper Group-wide and other Eliminations Total Group Net sales External 2 692 1 063 4 075 14 965 - - 22 795 Internal 5 304 7 - - - -5 311 - Other operating income 235 31 820 1 520 250 -861 1 996 Operating expenses -7 194 -299 -4 706 -12 799 -420 6 172 -19 245 Change in value of biological assets 562 - - - - - 562 Depreciation and amortisation according to plan -77 -110 -184 -957 -32 - -1 360 Profit from investments in associates - 5 1 - - - 6 Operating profit/loss 1 523 697 6 2 730 -202 - 4 755 Operating margin, % 19 65 0 18 - - 21 Return on capital employed, % 4 16 0 34 - - 8 Operating assets 59 005 5 142 3 015 10 846 1 011 -615 78 403 Operating liabilities -2 220 -338 -720 -2 010 -1 082 615 -5 755 Deferred tax, net -12 016 -522 -156 -1 210 49 - -13 856 Capital employed 44 768 4 283 2 139 7 625 -22 - 58 793 Acquisition of non-current assets 222 59 391 1 011 22 - 1 706 External net sales by market Sweden 2 691 1 063 1 336 547 - - 5 637 UK - - 621 1 944 - - 2 565 Germany - - 29 2 466 - - 2 495 France - - 41 1 365 - - 1 406 Italy - - 11 1 163 - - 1 174 Rest of Europe 1 - 851 4 924 - - 5 776 Asia - - 340 1 790 - - 2 130 Rest of the world - - 846 766 - - 1 612 Total 2 692 1 063 4 075 14 965 - - 22 795 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 Renewable Energy business area is responsible for the Group’s hydro power and wind power assets. Deliveries in 2024 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. The Wood Products business area supplies wood products for joinery and ­construction purposes to five sawmills in Sweden and operates a timber frame construction business. In 2024, 1.3 million m3 of wood products were delivered. The Board and Paper business area manufactures paperboard and paper ­products at four production facilities in Sweden and the UK. In 2024, 1.4 million tonnes of paperboard and paper were delivered. 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 Group Parent company 2024 2023 2024 2023 Sales of by-products 950 783 793 631 Sales of non-current assets 21 15 6 43 Certificates, renewable energy 646 557 0 0 Emission allowances 103 235 88 272 Insurance compensation 3 7 0 2 Rent and land lease income 57 48 50 47 Silviculture contracts 109 113 109 113 Other 194 238 207 229 Total 2 083 1 996 1 253 1 337 Of the sales of by-products in the consolidated accounts, SEK 237 million (178) relate to rejects from production, SEK 450 million (339) to wood shavings, bark and chips, as well as SEK 263 million (266) 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 under the EU ETS and the UK ETS that have been partly used for its own production. The value of the surplus is recognised on the external delivery of emission allowances sold, which has resulted in a recognised profit of SEK 103 million (235). 72    Holmen Annual Report 2024 Notes Note 4 Note 4. Employees, personnel costs and remuneration of senior management Group Parent company Wages, salaries and social security costs 2024 2023 2024 2023 Wages and other remuneration 2 356 2 311 1 897 1 841 Social security costs 958 922 858 803 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 remu- neration 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 trans- formed into everything from wood products for climate-smart building to renew- able 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 success- fully 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 compa- ny 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 person’s 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 created 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 Compa- nies 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 remunera- tion structures and levels in the company. Members of the remuneration com- mittee must be independent in relation to the company and its senior manage- ment. 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 sustainability, or to ensure the company’s financial viability. Share savings programmes In 2024, Holmen had two outstanding long-term directed share savings ­programmes, LTIP 2022 and LTIP 2024, decided on by the Annual General ­Meeting. The aim of the programmes is to strengthen common interests between key individuals and shareholders, as well as to foster a long-term commitment to Holmen. The 2022 AGM approved a share savings programme reserved for key individu- als in the Group (‘LTIP 2022’). Participation in LTIP 2022 requires a personal ­investment in Holmen shares (so-called savings shares) and continued employ- ment throughout the duration of the programme. The programme expires on 8 May 2025 and covers 67 participants who have invested in a total of 18 861 savings shares. The programme has performance conditions linked to the total return on capital employed for the industrial business areas Wood Products and Board and Paper (‘ROCE’) and to the total shareholder return on Holmen’s class B shares (‘TSR’) during the period 2022–2024. The performance condition linked to the ROCE may yield 3–6 shares per savings share, with the CEO receiv- ing 6 shares, the Executive Vice President 5 shares and other members of Group management 3–4 shares per savings share. For the performance condition linked to the ROCE, the maximum allocation will be made, as the ROCE during the period amounted to 32 per cent, exceeding the requirement for the maxi- mum allocation of a ROCE of more than 17 per cent. No allocation would have been made if the ROCE was less than 12 per cent. The performance condition linked to the TSR may yield 0.5 shares per savings share. No award for the ­performance condition linked to the TSR will be made as the total shareholder return amounted to 6 per cent, which was below the requirement of a TSR of 10 per cent. The number of shares expected to be allocated at the end of the ­programme in May 2025 is 66 400. The total recognised cost for LTIP 2022 for the period 2022–2024 amounts to SEK 42 million, of which SEK 9 million (16) was recognised in 2024. The 2024 AGM decided on a share savings programme reserved only for ­members of Group management (LTIP 2024). Participation in the programme ­requires a personal investment in Holmen shares (so-called savings shares) and continued employment throughout the duration of the programme. The ­programme expires in spring 2027 and covers 10 participants who have invested in a total of 8 940 savings shares. The programme has performance conditions linked to the total return on capital employed for the industrial business areas Wood Products and Board and Paper (‘ROCE’), the development of the Group’s climate benefit (‘Climate benefit’) and the total shareholder return on Holmen’s class B shares (‘TSR’) during the period 2024–2026. The performance condition linked to the ROCE may yield 5.4 shares for the CEO, 4.5 shares for the Executive Vice President and 3.6 shares per savings share for other members of Group management. A maximum allocation requires that the ROCE exceeds a maxi- mum level decided on by the Board. No allocation will be made if the ROCE is ­below a minimum level decided on by the Board. For an outcome between the minimum and maximum levels, the allocation will be adjusted on a straight-line basis. The performance condition linked to the Climate benefit may yield 0.6 shares for the CEO, 0.5 shares for the Executive Vice President and 0.4 shares per savings share for other members of Group management. The allocation of shares requires an increase in the reported climate benefit measured as an aver- age over the financial years 2024–2026 compared with the reported climate benefit during the reference year 2023. If the climate benefit decreases or ­remains unchanged during the measurement period, no allocation linked to the Climate benefit will be made. See pages 102 and 104 for the definition and calculation of the climate benefit for the financial year 2024. The performance condition linked to the TSR may yield 0.5 shares per savings share for the CEO, the Executive Vice President and other members of Group management. The maximum number of shares that may be allocated under the programme is 47 000. The total recognised cost for LTIP 2024 amounts to SEK 5 million (-). Holmen Annual Report 2024  73 Notes Note 4 Note 4. Employees, personnel costs and remuneration of senior management, cont. Summary of wages, remuneration and other benefits in 2024 SEK (kronor) Fixed wage Variable remuneration1) Others benefits Total wages, remuneration and other benefits Recognised wage cost, share savings programmes2) Pension cost3) Chief Executive Officer 11 400 000 2 736 000 479 605 14 615 605 2 403 206 6 796 262 Other members of senior management (9)4) 28 519 000 5 239 530 1 033 187 34 791 717 4 172 055 10 370 925 1) Variable remuneration consists of the short-term incentive programme for 2024 that will be paid out in 2025. 2) Refers to the recognised wage cost for the LTIP 2022 and LTIP 2024 share savings programmes. No allocations were made under share savings programmes during the year. 3) The pension cost for the CEO includes a SEK 3 375 599 recognised cost for an option to retire before the usual retirement age. The pension cost for other members of senior management includes a recognised cost of SEK 1 845 296 relating to an option to retire before the usual retirement age for three senior managers. 4) 10 people in January and 9 people for the rest of the year. Summary of wages, remuneration and other benefits in 2023 SEK (kronor) Fixed wage Variable remuneration1) Others benefits Total wages, remuneration and other benefits Recognised wage cost, share savings programmes2) Pension cost3) Chief Executive Officer 11 040 000 5 520 000 453 054 17 013 054 2 032 526 6 171 350 Other members of senior management (10) 29 739 862 9 548 400 1 212 904 40 501 166 3 873 303 10 597 299 1) Variable remuneration consists of the short-term incentive programme for 2023 that was paid out in 2024. 2)  Refers to the recognised wage cost for the LTIP 2022 share savings programme. No allocations were made under share savings programmes during the year. 3) The pension cost for the CEO includes a SEK 2 888 318 recognised cost for an option to retire before the usual retirement age. The pension cost for other members of senior management includes a recognised cost of SEK 1 715 132 relating to an option to retire before the usual retirement age for three senior managers. Short-term variable remuneration of members of senior management The short-term variable remuneration for members of senior management (‘STI’) is calculated annually and may amount to a maximum of 50 per cent of their annual fixed salary for the CEO and Executive Vice President and a maxi- mum of 35 per cent of their annual fixed salary for the rest of Group manage- ment. STI is not pensionable. The criteria for STI for 2024 to be paid out in 2025 are 90 per cent based on the return on capital employed (ROCE) for the industrial business areas (i.e. Wood Products and Board and Paper) and 10 per cent based on the accident rate at Holmen’s workplaces being reduced. For the heads of the industrial business areas, the allocation based on the ROCE was 70 per cent for the ROCE for their own business areas and 30 per cent for the overall ROCE for the industrial business areas. For the Senior Vice President Renewable Energy, specific quantitative parameters have been applied. The criterion for STI for 2023 paid out in 2024 was based on the return on capital employed (ROCE) of the industrial business areas. For STI for 2024, the range for the ROCE was 11–21 per cent, with no STI being paid for a ROCE of < 11%, maximum STI being paid for a ROCE of ≥ 21 per cent and a payout on a straight-line basis for a ROCE of 11–21 per cent. For STI for 2023, the range for the ROCE was 11–22 per cent. For 2024, the ROCE for the industrial business areas totalled 16.3 per cent and the accident rate increased to 5.3 accidents per million hours worked compared with 5.2 in 2023. This means that the payout to the CEO and the Executive Vice President in respect of STI for 2024 will amount to 48 per cent of the maximum STI. For other members of Group management, the outcome is between 11–81 per cent of the maximum STI. For 2023, the combined ROCE for the industrial business areas was 27 per cent. This means that the payout to the CEO and the Executive Vice President in respect of the STI for 2023 will amount to 100 per cent of the maximum STI. For the other members of Group management, the outcome is between 33–100 per cent of the maximum STI. Notice period for members of senior management 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 will be paid. These terms apply to the CEO and seven other people. For two senior manage- ment employment contracts, signed before 2011, the employee is required to give six months’ notice and the company must give 12 months’ notice. In the event of notice being given by the company for these people, severance pay ­corresponding to up to two years’ wages will be paid, depending on age. All members of senior management are employed by the parent company. Pension obligations in respect of senior management Holmen’s defined benefit pension obligations for the CEO amounted to SEK 46 million (40) at 31 December 2024 and, for the other members of senior manage- ment, to SEK 34 million (30), calculated in accordance with IAS 19. The obliga- tions 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. Proportion of women in Holmen’s Board of Directors and Group management Group Parent company Proportion of women, % 2024 2023 2024 2023 Board (excl. deputy members) 33 33 33 33 Senior management 20 18 20 18 Total 29 27 29 27 Remuneration of the Board and members of senior management Board of Directors A fixed Board fee is paid to the members of the Board elected by the AGM. The CEO does not receive a Board fee. For 2024, fees paid to the Board amounted to SEK 3 870 000 (3 690 000). The Chairman of the Board received a fee of SEK 860 000 (820 000), and each of the other seven (seven) members received SEK 430 000 (410 000). Senior management The remuneration and other benefits for the CEO and other members of senior management are set out below. Other members of senior management refers to the four (five) heads of the business areas and five (five) heads of the Group staffs. 74    Holmen Annual Report 2024 Notes Note 1 Notes 4–6 Average no. of employees (FTE) Average number of employees (FTE)* of whom women of whom men Average number of employees (FTE)* of whom women of whom men 2024 2023 Parent company Sweden 2 901 662 2 239 2 923 660 2 263 Group companies France 13 5 8 13 5 8 Netherlands 69 40 29 75 44 31 UK 387 39 348 407 44 364 Sweden 59 14 45 58 13 44 Germany 21 6 15 22 7 15 US 8 3 5 8 3 5 Other countries 40 15 25 41 15 26 Total Group companies 597 122 475 623 131 492 Total Group 3 498 784 2 714 3 546 792 2 755 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 2024 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. Group Parent company Remuneration of auditors 2024 2023 2024 2023 Audit assignments, PwC 10 9 7 6 Tax advice, PwC 0 1 0 1 Total 10 9 7 6 Other auditors 0 0 - - Total 10 9 7 6 Note 6. Net financial items and income from financial instruments Group Parent company Net financial items 2024 2023 2024 2023 Dividend income from Group companies - - 344 348 Foreign exchange effect on the liquidation of Group companies 4 - 6 - Interest income 35 49 215 175 Total financial income 39 49 565 535 Net gains/losses on financial instruments Measured at fair value through profit/loss -41 17 -172 -12 Cash and cash equivalents -4 1 0 0 Measured at amortised cost 45 -16 45 -16 Total net profit/loss 0 1 -127 -29 Interest expenses attributable to right-of-use agreements -7 -7 - - Interest expenses* -94 -93 -154 -136 Financial costs -101 -98 -281 -176 Net financial items -62 -49 284 359 *SEK -23 million (-19) relates to interest expenses for derivatives measured at fair value through other comprehensive income. SEK -3 million (-2) relates to interest expenses for derivatives recognised at fair value through profit/loss for the year. Interest expenses and interest income are usually calculated using the effective interest method from financial items measured 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. Holmen Annual Report 2024  75 Notes Notes 6–7 Note 6. Net financial items and income from financial instruments, cont. The income from financial instruments recognised in operating profit/loss is shown in the following table: Group Parent company 2024 2023 2024 2023 Exchange gains/losses on trade receivables and trade payables 244 459 250 449 Net gain/loss from derivatives recognised in operating profit/loss -570 536 -610 215 The derivatives recognised 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 2024 amounted to SEK -347 million (-477), the remainder being recognised in other comprehensive income as hedge accounting is applied. The fair value of outstanding currency hedges ­recognised in other comprehensive income was SEK -61 million (64) at 31 ­December 2024. Gains/losses on financial electricity hedges are recognised in the income state- ment when they expire; for 2024 they totalled SEK -223 million (872). The fair value of outstanding financial electricity hedges at 31 December 2024 was SEK -66 million (302). 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 the hedge reserve until expiry, at which point the gain/loss is moved from ­equity to the cost of the non-current asset that was hedged. The fair value of ­outstanding hedges of investment purchases amounted to SEK 12 million (-8) at 31 ­December 2024. In 2024, there was a SEK -14 million (12) impact on the cost of hedged items due to the result from hedging. The result from the hedging of foreign net assets amounted to SEK -127 million (-42) in 2024 and was recognised in other comprehensive income as hedge ­accounting was applied. In the parent company’s accounts, this result is recog- nised in the income statement. The translation of foreign net assets had an impact of SEK 181 million (55) on consolidated equity. The fair value of outstanding hedges of net assets at 31 December 2024 was SEK -15 million (43) and relates to financial derivatives. The fair value of the derivatives used to manage fixed interest rate periods amounted to SEK 38 million (45) at 31 December 2024, which was recognised in other comprehensive income as hedge accounting was applied. This value is expected to be recognised in the income statement in 2025 and later. Note 7. Tax Group Parent company Taxes stated in the income statement 2024 2023 2024 2023 Current tax -416 -655 -301 -546 Deferred tax -383 -353 0 0 Total -798 -1 008 -302 -547 Recognised tax totalled SEK -798 million (-1 008), corresponding to 22 per cent (21) of the profit/loss before tax. Group Parent company 2024 2023 2024 2023 Taxes stated in the income statement SEKm % SEKm % SEKm % SEKm % Recognised profit/loss before tax 3 660 4 705 1 677 2 968 Tax at applicable rate -754 20.6 -969 20.6 -346 20.6 -611 20.6 Difference in tax rate for foreign operations -17 0.5 -9 0.2 - - Tax-exempt income 9 -0.3 9 -0.2 75 -4.5 83 -2.8 Non-tax-deductible costs -10 0.3 -22 0.5 -6 0.3 -12 0.4 Standard interest on tax allocation reserve -24 0.7 -16 0.3 -24 1.4 -16 0.5 Tax attributable to previous periods -7 0.2 11 -0.2 -4 0.2 10 -0.3 Other 4 -0.1 -12 0.3 2 -0.1 0 0.0 Effective tax -798 21.7 -1 008 21.4 -302 18.0 -547 18.4 Group Parent company Before tax Tax After tax Before tax Tax After tax Before tax Tax After tax Before tax Tax After tax Tax attributable to other comprehensive income 2024 2023 2024 2023 Cash flow hedges -501 103 -398 -3 549 731 -2 818 -503 104 -400 -3 429 706 -2 723 Translation difference on foreign operations 181 - 181 55 - 55 - - - - - - Hedging of currency risk from foreign operations -127 26 -101 -42 9 -33 - - - - - - Revaluations of forest land 454 -93 360 3 493 -720 2 774 - - - - - - Revaluations of defined benefit pension plans -5 1 -4 -6 1 -5 - - - - - - Other comprehensive income 2 37 39 -48 22 -27 -503 104 -400 -3 429 706 -2 723 76    Holmen Annual Report 2024 Notes Note 7 Group Parent company Taxes as stated in the balance sheet 2024 2023 2024 2023 Tax receivables Deferred tax assets 3 3 - - Current tax assets 144 114 105 87 Total tax receivables 148 117 105 87 Deferred tax liabilities Non-current assets Biological assets 6 510 6 294 - - Forest land 5 360 5 272 602 601 Property, plant and equipment 1 293 1 210 4 3 Tax allocation reserve 1 028 932 - - Transactions subject to hedge accounting -16 83 -16 84 Other, including deferred tax assets stated net of deferred tax liabilities 77 68 -6 -4 Deferred tax liabilities 14 252 13 858 584 683 Current tax liabilities 97 105 - - Total tax liabilities 14 349 13 963 584 683 Change in the net amount of deferred tax assets and deferred tax liabilities Group Parent company 2024 Opening balance Stated in the income statement Recognised directly in equity Translation differences and other Closing balance Opening balance Stated in the income statement Recognised directly in equity Closing balance Biological assets -6 294 -215 - - -6 510 - - - 0 Forest land -5 272 5 -93 - -5 360 -601 -1 - -602 Property, plant and equipment -1 210 -66 - -17 -1 293 -3 -1 - -4 Tax allocation reserve -932 -97 - - -1 028 - - - 0 Transactions subject to hedge accounting -83 0 99 - 16 -83 - 99 17 Other -65 -10 1 0 -74 4 2 - 5 Deferred net tax liability -13 856 -382 6 -17 -14 249 -683 0 99 -584 Group Parent company 2023 Opening balance Stated in the income statement Recognised directly in equity Translation differences and other Closing balance Opening balance Stated in the income statement Recognised directly in equity Closing balance Biological assets -6 153 -142 - - -6 294 - - - - Forest land -4 553 1 -720 0 -5 272 -601 0 - -601 Property, plant and equipment -1 143 -68 - 1 -1 210 -2 0 - -3 Tax allocation reserve -850 -82 - - -932 - - - - Transactions subject to hedge accounting -789 - 706 - -83 -789 - 706 -83 Other 0 -63 1 -3 -65 3 0 - 4 Deferred net tax liability -13 488 -353 -12 -3 -13 856 -1 389 0 706 -683 The Group’s deferred tax liability for forest land and biological assets amounts to SEK 11 869 million (11 566) and is calculated based on the difference between the book value of SEK 57 843 million (56 348) and taxable cost of SEK 225 mil- lion (203). 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 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 2 million net (1), of which SEK 47 million (51) of deferred tax assets and SEK -45 million (-50) of deferred tax ­liabilities. Recognised directly in equity includes deferred tax mainly related to a change in the value of forest land of SEK 93 million (-720) and a hedge reserve of SEK -99 million (706). 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 Group is covered by the OECD’s Pillar Two model rules and legislation has been adopted in Sweden effective from 1 January 2024. According to Holmen’s evaluation of the legislation, the Group should not need to pay additional tax ­because of Pillar Two. Holmen Annual Report 2024  77 Notes Note 8. Earnings per share (EPS) Group 2024 2023 Total number of outstanding shares, 1 January 159 222 355 162 001 678 Buy-backs of treasury shares during the year -1 554 163 -2 779 323 Total number of outstanding shares, 31 December 157 668 192 159 222 355 Shareholders’ share of profit/loss for the year, SEK 2 861 454 499 3 697 317 688 Basic average number of shares 158 775 615 160 470 138 Basic EPS for the year, SEK 18.0 23.0 Shareholders’ share of profit/loss for the year, SEK 2 861 454 499 3 697 317 688 Diluted average number of shares 158 775 615 160 470 138 Diluted EPS for the year, SEK 18.0 23.0 The AGM has decided on two outstanding share savings programmes. Together they may lead to the allocation of 113 400 shares from Holmen’s own holding of shares. This may result in marginal dilutive effects on key figures and earnings per share. See Note 4 for more information about the share savings programmes. The Board of Directors decided on 26 April to exercise the authorisation granted by the 2024 AGM to acquire treasury shares linked to the future delivery of shares under Holmen’s long-term share savings programmes. The Board of ­Directors decided on 15 August to exercise its authorisation from the 2024 AGM to buy back treasury shares. During the year, 1 554 163 class B shares were ­repurchased for SEK 647 million, corresponding to an average price of SEK 416/ share. The buy-backs amount to 0.9 per cent of the total number of shares. When combined with the shares that it already owned, this means that at 31 December 2024 Holmen held 3.0 per cent of the total number of shares. Note 9. Forest land and biological assets Holmen’s land holdings amount to 1 303 000 hectares, of which 1 160 000 ­hectares are classified as forest land according to international definitions. 1 045 000 hectares are classified as productive forest land. The holdings are spread over five regions of Sweden. Total land holdings, thousand ha Productive forest land, thousand ha Västerbotten 486 371 Västernorrland 329 273 Jämtland 194 146 Gävleborg 184 163 Uppsala and further south 109 91 Total 1 303 1 045 Forest land is recognised at fair value calcu- lated based on transaction prices for forest properties in the counties where the Group owns forest land, less the fair value of stand- ing trees recognised as biological assets in ­accordance with IAS 41 Biological Assets. Only productive forest land is assigned a ­value. Below, valuation based on transactions in forest properties is described first, followed by the valuation of biological assets. Valuation based on transactions in forest properties Prices for individual forest properties vary mainly due to geographical location and the volume of standing timber. To address these differences, valuations are based on the amounts paid in relation to the properties’ volume of standing timber broken down by geographical area, mainly according to county. To obtain a sufficiently large population, three years of aggregated transactions are used. The calculation is carried out by aggregating valuations made based on: - Price statistics published by market participants. Holmen uses the price statis- tics together with the volume of standing timber for the productive forest land to calculate the value of the productive forest land for each county. - Detailed data on transactions in forest properties. Holmen uses the detailed transaction data to calculate the value of the forest land per hectare using a ­regression model based on the parameters location (county or part of a county), volume of standing timber and site quality (i.e. the productive capacity of the land) for the productive forest land. The calculation is carried out for each ­forest property owned by Holmen and the figures are aggregated to obtain a value for each county. The method is considered to reflect market conditions at the reporting date and has been applied consistently between years. Price statistics and transaction data The price statistics come from Ludvig & Co and Svefa, both of which are inde- pendent of Holmen. They are expressed in SEK per m3 growing stock, solid over bark of standing timber mainly broken down by county. Svefa processes the data by excluding transactions involving less than 10 hectares and transactions that may include other significant components besides forest land. Holmen does not process the price statistics. The detailed data on forest properties is based on transaction data that mainly come from the government agency Lantmäteriet and is supplied by Infotrader, which is independent of Holmen. Holmen processes the information by exclud- ing transactions for which Infotrader believes there are other significant compo- nents besides forest land and transactions involving less than 20 hectares. Volume of standing timber Data on Holmen’s volume of standing timber for each region valued are used for valuations. The volume of standing timber is calculated based on the most ­recent inventory, updated with the completed harvest and estimated growth ­after the inventory date. The inventory is usually carried out every ten years and last took place in 2019. The table 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 calculated volume of standing timber at 31 ­December 2024. Volume of standing timber 1988 1993 2000 2010 2019 2024 m3 growing stock, solid over bark per hectare of productive forest land 90 100 105 114 118 121 78    Holmen Annual Report 2024 Notes Notes 8–9 Västerbotten Västernorrland Jämtland Gävleborg Uppsala Stockholm Östergötland Södermanland Kalmar The table below shows Holmen’s volume of standing timber expressed in m3 growing stock, solid over bark, the site quality (i.e. the productive capacity of the land) of the productive forest land and the age distribution by region. Age distribution, % Volume of standing timber, million m3 growing stock, solid over bark Site quality, m³/ha 0–20 21–40 41–60 61–80 81–100 101+ Västerbotten 38 4.0 29 25 14 18 7 8 Västernorrland 32 4.3 27 24 18 15 6 10 Jämtland 15 3.5 24 22 17 6 3 29 Gävleborg 26 6.2 28 24 26 13 2 7 Uppsala and further south 15 7.4 27 26 24 12 4 7 Total 127 4.6 27 24 18 14 5 11 Valuation as at 31 December 2024 The valuation based on transactions in forest properties amounted to SEK 57 843 million (56 348) at 31 December 2024, corresponding to SEK 55 thousand (54) per hectare of productive forest land and SEK 456 per m3 growing stock, solid over bark (447) of standing timber on the productive forest land. The valuation per county is shown in the table below. For Västerbotten, Jämtland and Västernorrland, price differences within counties have been taken into account to the extent possible based on price statistics and detailed transaction data. Holmen’s forests Holmen’s book value Market statistics** 2024 Total land holdings, thousand ha Area of productive forest land, thousand ha Number of properties Average size, ha per property* SEKm SEK ’000/ ha* SEK/m3 growing stock, solid over bark Number of transactions Average size, ha per property* Västerbotten 486 371 1 376 270 13 772 37 358 330 102 Västernorrland 329 273 620 440 13 945 51 429 102 87 Jämtland 194 146 357 410 6 105 42 401 194 170 Gävleborg 184 163 1 434 114 12 076 74 462 115 74 Uppsala and further south 109 91 502 181 11 946 131 823 190 79 Total 1 303 1 045 4 289 244 57 843 55 456 931 106 Holmen’s forests Holmen’s book value Market statistics** 2023 Total land holdings, thousand ha Area of productive forest land, thousand ha Number of properties Average size, ha per property* SEKm SEK ’000/ ha* SEK/m3 growing stock, solid over bark Number of transactions Average size, ha per property* Västerbotten 489 371 1 378 270 13 048 35 346 309 102 Västernorrland 329 273 621 440 13 730 50 416 99 92 Jämtland 194 147 357 410 5 705 39 382 170 144 Gävleborg 184 164 1 432 114 12 064 74 465 134 76 Uppsala and further south 108 91 501 181 11 802 130 818 168 86 Total 1 305 1 046 4 289 244 56 348 54 447 880 102 *Refers to productive forest land. **Refers to transactions forming the basis for the valuation based on detailed information about transactions in forest properties. The chart below shows the change in the valuation, aggregated for each region, since the method was first introduced in 2019. The value per hectare varies between different parts of the country, the value of forest properties in southern Sweden being significantly higher. This is partly due to better site quality, a shorter harvest cycle and higher wood prices, but is also due to the fact that demand for forest land is greater closer to densely populated areas. The tables below show how the valuation per region has developed since the transition to recognising forest land at fair value. Valuation, SEK ’000/ha 2019 2020 2021 2022 2023 2024 Västerbotten 29 29 30 33 35 37 Västernorrland 32 33 39 45 50 51 Jämtland 25 26 28 34 39 42 Gävleborg 58 61 66 69 74 74 Uppsala and further south 98 104 113 125 130 131 Valuation, SEK/m3 growing stock, solid over bark 2019 2020 2021 2022 2023 2024 Västerbotten 283 287 301 329 346 358 Västernorrland 278 286 328 373 416 429 Jämtland 266 273 289 345 382 401 Gävleborg 370 388 418 434 465 462 Uppsala and further south 613 639 698 772 818 823 Book value, SEKm   Västerbotten    Västernorrland    Jämtland    Gävleborg    Uppsala and further south 0 20 000 40 000 60 000 2024 2023 2022 2021 2020 2019 Holmen Annual Report 2024    79 Notes Note 9 Note 9. Forest land and biological assets, cont. Sensitivity analysis There has been low volatility in forest property prices over time, as illustrated in the chart below showing annualised prices compiled by Ludvig & Co based on transactions brokered themselves. Price of forest properties, SEK/m3 growing stock, solid over bark Price development of forest properties, SEK/m3 growing stock, solid over bark   Västerbotten    Västernorrland    Jämtland    Gävleborg    Uppsala and further south Reference valuation To verify Holmen’s own valuation, a valuation of parts of the forest holdings is carried out each year by an external, independent valuation company. During the period 2019–2023, the company Forum Fastighetsekonomi carried out the external valuations and by the end of 2023 had valued all the forest holdings. The external valuations exceeded Holmen’s own valuations by an average of 7 per cent. In 2024, the company Svefa carried out an external valuation of the ­forest properties in Uppsala and further south, equal to 21 per cent of the book value. The external valuation exceeded Holmen’s own valuation by 13 per cent and took into account the size premium that is considered to exist for properties exceeding­ 200 hectares. Without taking such a premium into account, the valua- tion exceeded Holmen’s own valuation by 3 per cent. No size premium has been taken into account in Holmen’s own valuation. Biological assets The value of standing trees was determined by calculating the present value of expected future cash flows, less selling costs but before tax, from current standing trees. Costs for replanting after harvesting were not included. The standing trees are expected, on average, to be harvested when they reach an age of 85 years. The volumes are based on the long-term harvesting plan that was updated in 2020. The harvesting plan is based on the current forest management programme. The plan takes into account existing forestry regula- tions and projected future climate change. Under the plan, there should be an average harvest of 2.8 million m3sub per year between 2020 and 2029, gradually increasing to 3.9 million m3sub in 85 years, corresponding to an annual increase of 0.4 per cent per year. In 2020–2024, the harvest averaged 2.8 million m3sub per year. Compared with the 2000–2009 harvesting plan, the harvest under the 2020–2029 harvesting plan has increased by 12 per cent, corresponding to an annual increase of 0.6 per cent. The annual harvest is expected to consist, on ­average, of 48 per cent saw logs and 50 per cent pulpwood, with 2 per cent for energy production. Revenue is calculated based on an average price of SEK 603/m3sub, which is an increase from SEK 555/m3sub the previous year as a result of continued price increases for both pulpwood and logs. The price used is in line with historical prices adjusted for inflation, but 20 per cent lower than the average price for wood from own forests in 2024. The costs represent the current level adjusted for temporary effects. Prices and costs are assumed to increase in line with ­general inflation, which is estimated at 2 per cent per year in accordance with the Riksbank’s inflation target. The discount rate for the 2024 valuation is 4.75 per cent before tax, which is an increase from 4.5 per cent as was used in the period 2019–2023. This rate represents the estimated long-term cost of capital for investments in standing trees. The rate is calculated based on the real yield requirement derived from transactions in forest properties, the real interest rate applied when preparing the harvesting plan and the interest rate used by other large forest-owning com- panies in Sweden. When real interest rates were translated into nominal interest rates, 2 per cent inflation was assumed in line with the Riksbank’s target. The measurement of fair value is primarily dependent on price statistics and transaction data collected from external parties and how large the volume of standing timber is estimated to be. The table below shows how the value per ­region is affected by changes in these parameters. Price statistics and transaction data SEKm Västerbotten 5% (SEK 18/m3 growing stock, solid over bark) 690 Västernorrland 5% (SEK 21/m3 growing stock, solid over bark) 700 Jämtland 5% (SEK 20/m3 growing stock, solid over bark) 300 Gävleborg 5% (SEK 23/m3 growing stock, solid over bark) 600 Uppsala and further south 5% (SEK 41/m3 growing stock, solid over bark) 600 Holmen’s volume of standing timber SEKm Västerbotten 1% (0.4 mil. m3 growing stock, solid over bark) 140 Västernorrland 1% (0.3 mil. m3 growing stock, solid over bark) 140 Jämtland 1% (0.2 mil. m3 growing stock, solid over bark) 60 Gävleborg 1% (0.3 mil. m3 growing stock, solid over bark) 120 Uppsala and further south 1% (0.1 mil. m3 growing stock, solid over bark) 120 Transparency regarding forest property transactions is good in Sweden, creating a favourable environment for market participants to publish market statistics and create a basis for valuations based on detailed information about completed transactions. As the valuations are based on a combination of price statistics compiled by Ludvig & Co and Svefa, and detailed transaction data collected by Infotrader, the risk of valuations being affected by data collection or processing errors is reduced. The three methods yielded a value within +/- 1 per cent of the weighted value at year-end 2024. The volume of standing timber is based on sample inventories designed to provide the most reliable information possible about this volume. The last inventory was carried out in 2019 by an external party, with a mean error rate of 1.4 per cent for Holmen’s total volume of standing timber. The volume of standing timber is broken down by county based on information in the Group’s stand catalogue. The change in the volume of standing timber after the inventory is based on ­harvest data and the estimated growth on which the current harvesting plan is based. As the valuations are based on three years of transactions, sufficiently large ­populations are considered to be obtained in each geographical area to arrive at reliable valuations and reduce the impact of individual transactions while reflect- ing current market conditions. If valuations were based on transactions conclud- ed over a shorter period of time, such as the past year, the quality and reliability of the valuations is estimated be reduced due to the greater impact of individual transactions and the small number of transactions in certain regions. The chart below illustrates how the value for each region would have been calculated based on one year of transactions. The total value of Holmen’s holdings in 2024 would have amounted to SEK 438/m3 growing stock, solid over bark, which is 4 per cent ­lower than the valuation on which the book value of the forest assets is based. 0 200 400 600 800 1 000 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 0 100 200 300 400 500 600 700 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 80    Holmen Annual Report 2024 Notes Note 9 Holmen’s wood prices, SEK/m3sub Sensitivity analysis The table below shows how the value of biological assets would be affected by changes in the most significant valuation assumptions. SEKm Annual change +0.1% per year Harvest rate 1 110 Price inflation 1 730 Cost inflation -810 Change in level +1% Harvest 390 Prices 620 Costs -310 Discount rate +0.1% -860 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). Forest land The fair value of forest land as at 31 December 2024 was SEK 26 243 million (25 793), calculated based on transactions in forest properties, SEK 57 843 million­ (56 348) less the fair value of standing trees, SEK 31 600 million (30 555). Of the change for the year, SEK 12 million (16) is due to the acquisition of forest land and SEK -16 million (0) to the disposal of forest land. The remain- der of the change, of SEK 454 million (3 493), consists of the unrealised change in fair value and is recognised in other comprehensive income. Sensitivity analysis The valuation of forest land depends on the same parameters as the valuation based on transactions in forest properties and the valuation of biological assets. The value of forest land may reflect existing and possible future revenue streams from the forest land, and the harvesting of future generations of trees, but there are also actors who assign value to land that is not linked to its ability to generate cash flows. Over the past five years, cash flow from land has amounted to ­approximately SEK 200 million per year, the major sources of existing cash flow being the sale of hydro power received in exchange for the use of waterfall rights (‘replacement power’), revenue from leases and property development, and leases linked to wind power. The portfolio of wind power projects is under devel- opment and there are currently 30 projects at various stages of completion that may generate revenue in the form of both sales of wind power licences and leases. A market for voluntary carbon credits, including from forestry, is emerging and could provide new revenue opportunities. The Group owns land close to densely populated areas with expansion plans, such as Uppsala, and also has land ­suit­able for the construction of data centres. The value of harvests from ­future ­generations of trees depends on the rate at which the trees grow and changes in the price of wood. The reasonableness of the forest land’s book value is assessed each year by estimating the present value of possible future cash flows from the land holdings. This assessment of reasonableness has resulted in a wide range of values that support the book value.   Real price    Nominal price    Price used in valuation (nominal) Harvesting plan, ’000 m3sub/year Harvest   Thinning    Storms & other events *Projection Valuation as at 31 December 2024 The valuation of biological assets at 31 December 2024 amounts to SEK 31 600 million (30 555), which is an increase of SEK 1 045 million (688). The value of ­biological assets has been positively affected by investments in reforestation of SEK 140 million (145) and the acquisition of forest land, with standing trees valued at SEK 18 million (17), while sales of forest land reduced the value of standing trees by SEK 20 million (36). The remaining change, of SEK 907 million (562), is the net of the change resulting from harvesting and the unrealised change in fair value and is stated net as the change in value of biological assets in the ­income statement. 200 400 600 800 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Biological assets Forest land Total forest land and biological assets SEKm 2024 2023 2024 2023 2024 2023 Book value at beginning of year 30 555 29 867 25 793 22 284 56 348 52 151 Acquisitions 18 17 12 16 30 33 Disposals -20 -36 -16 0 -36 -36 Investment in reforestation 140 145 - - 140 145 Change due to harvesting -1 078 -977 - - -1 078 -977 Unrealised change in fair value 1 985 1 539 454 3 493 2 439 5 032 Book value at end of year 31 600 30 555 26 243 25 793 57 843 56 348 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2040- 2044* 2035- 2039* 2030- 2034* 2025- 2029* 2020- 2024 2015- 2019 2010- 2014 2005- 2009 Holmen Annual Report 2024    81 Notes Note 9 Note 10. Non-current intangible assets Group Parent company Goodwill Other intangible assets Total Non-current intangible assets 2024 2023 2024 2023 2024 2023 2024 2023 Accumulated acquisition costs Opening balance 358 358 438 392 797 750 66 67 Investments - - 1 46 1 46 - - Reclassifications - - - 64 - 64 - - Disposal and retirement of assets - - -4 -63 -4 -63 - 0 Translation differences - - 2 0 2 0 - - Total 358 358 437 438 796 797 66 66 Accumulated amortisation, depreciation and impairment losses Opening balance - - 283 323 283 323 58 58 Depreciation and amortisation for the year - - 16 9 16 9 - 1 Reclassifications - - - 15 - 15 - - Disposal and retirement of assets - - -4 -63 -4 -63 - 0 Translation differences - - 2 0 2 0 - - Total - - 298 283 298 283 58 58 Residual value according to plan at end of year 358 358 140 155 498 513 8 8 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. Changing conditions due to climate change are not expected to have a significant impact. 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 78 million (89), and the value of the right of use relating to certain energy assets, amounting to SEK 54 million (58). 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 Group 2024 2023 2024 2023 2024 2023 2024 2023 Accumulated acquisition costs Opening balance 7 022 6 845 33 963 32 839 359 381 41 344 40 065 Investments 134 155 1 233 1 084 664 256 2 031 1 494 Reclassifications 13 17 227 284 -240 -269 - 32 Disposal and retirement of assets -3 -5 - 1 031 -308 - -17 -1 034 -330 Translation differences 54 10 429 64 2 7 484 82 Total 7 219 7 022 34 821 33 963 784 359 42 825 41 344 Accumulated amortisation, depreciation and impairment losses Opening balance 4 376 4 234 26 638 25 706 - - 31 014 29 940 Depreciation and amortisation according to plan for the year 141 138 1 103 1 098 - - 1 244 1 236 Reclassifications - 2 - 79 - - - 81 Disposal and retirement of assets -3 -5 -1 025 -298 - - -1 028 -304 Translation differences 41 7 323 53 - - 364 60 Total 4 555 4 376 27 039 26 638 - - 31 594 31 014 Residual value according to plan at end of year 2 665 2 646 7 782 7 325 784 359 11 231 10 330 *Other land refers to land other than forest land. The solid fuel boiler at Braviken Paper Mill has been damaged following a fire at the end of 2024. The incident is believed to be covered by insurance. The remaining book value has been written off and options are being explored for how the solid fuel boiler can be restored to operation. 82    Holmen Annual Report 2024 Notes Notes 10–11 Forest land Buildings, other land* and land installations Machinery and equipment Work in progress and advance payments to suppliers Total Parent company 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Accumulated acquisition costs Opening balance 502 499 228 215 407 332 4 9 1 141 1 055 Investments 12 3 4 6 42 65 11 4 68 78 Reclassifications - - 2 7 - 32 -2 -7 0 32 Disposal and retirement of assets 0 0 0 0 -40 -22 - -2 -40 -25 Total 514 502 234 228 408 407 13 4 1 169 1 141 Accumulated depreciation and amortisation according to plan Opening balance - - 153 148 273 210 - - 426 357 Depreciation and amortisation according to plan for the year - - 6 5 54 54 - - 60 59 Reclassifications - - - - - 32 - - - 32 Disposal and retirement of assets - - - 0 -40 -22 - - -40 -22 Total - - 159 153 286 273 - - 445 426 Accumulated revaluations Opening balance 2 382 2 388 1 1 - - - - 2 382 2 388 Disposal and retirement of assets 0 -6 - - - - - - 0 -6 Total 2 382 2 382 1 1 - - - - 2 382 2 382 Residual value according to plan at end of year 2 896 2 884 76 76 122 134 13 4 3 106 3 098 *Other land refers to land other than forest land. For forest assets in the Group see Note 9. In 2024, capitalised borrowing costs totalled SEK 19 million (3). An interest rate of 2.6 per cent (1.5) was used to determine the amount. Note 12. Right-of-use assets (leases) Buildings Machinery and equipment Total Group 2024 2023 2024 2023 2024 2023 Accumulated acquisition costs Value at beginning of year 283 257 223 172 506 429 Additional leases 36 33 73 84 108 117 Completed leases -40 -7 -94 -33 -134 -40 Total 278 283 202 223 480 506 Accumulated depreciation and amortisation Value at beginning of year 140 96 122 91 262 187 Depreciation and amortisation for the year 59 51 69 64 128 115 Completed leases -40 -7 -90 -33 -131 -40 Total 158 140 102 122 260 262 Value at end of year 120 143 100 101 220 244 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 2024 2023 Depreciation and amortisation 128 115 Interest expenses 7 7 Costs related to current lease liabilities 3 3 Costs related to low-value leases 2 2 Costs related to variable lease payments 0 0 Total 140 127 In 2024, the Group’s payments attributable to leases amounted to SEK 140 mil- lion (127). 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. Holmen Annual Report 2024    83 Notes Notes 11–12 Note 13. Investments in associates and other shares and participations Group Profit from associates 2024 2023 Recognised in profit/loss for the year 7 6 Total comprehensive income 7 6 Group Parent company Associates 2024 2023 2024 2023 Book value at beginning of year 1 686 1 680 93 93 Investments 8 0 - - Share of earnings 7 6 - - Translation difference - - - - Disposals - - - - Book value at end of year 1 701 1 686 93 93 Parent company and Group holdings of shares and investments in associates 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 Corporate ID No. Registered office Number of shares Holding %* Associates 2024 2023 Harrsele AB 556036-9398 Vännäs 9 886 49.4 1 534 - 49.4 1 527 - Vattenfall Tuggen AB 556504-2826 Lycksele 683 6.8 90 90 6.8 90 90 Brännälvens Kraft AB 556017-6678 Arbrå 5 556 13.9 45 - 13.9 36 - Gidekraft AB 556016-0953 Örnsköldsvik 990 9.9 0 0 9.9 0 0 Uni4 Marketing AB 556594-6984 Stockholm 2 050 41.0 22 3 41.0 21 3 Rebio AB 556594-3015 Umeå 2 014 40.3 10 1 40.3 10 1 Other associates 1 - 1 - Total 1 701 93 1 686 93 *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 1 668 million (1 654) and SEK 33 million (32) respectively. 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 1 534 ­million (1 527). Holmen purchased 472 GWh (451) of electrical power from Harrsele AB in 2024, giving Holmen an operating profit of SEK 166 million (319) from market sales. Harrsele AB owns power assets that generate 950 GWh of electrical power in a normal year. These assets were originally constructed in 1957–58 and the book value of the non-current assets in Harrsele AB amounts to SEK 188 million (176). 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. Group Parent company Other shares and participations 2024 2023 2024 2023 Book value at beginning of year 5 2 4 0 Investments 1 4 1 4 Disposals - - - - Translation difference 0 0 - - Book value at end of year 6 5 5 4 Notes 84    Holmen Annual Report 2024 Note 13 Note 14. Financial instruments Non-current financial receivables consist of interest-bearing financial receiva- bles 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 essen- tially 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 is 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 953 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 -150 million (380). Assets and liabilities are not offset in the report. Recognised derivatives totalled SEK 427 million (941) on the asset side and SEK -578 million (561) 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 in- cluded 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 discount- ed 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 measure­ ment level 2. Other valuations, for which a variable is based on own assess- ments, 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. Group Maturity structure, undiscounted amounts 2025 2026 2027 2028 2029- Financial liabilities Derivatives -26 - - - - Derivatives attributable to working capital -404 -138 -29 - - Trade payables -3 808 - - - - Liabilities relating to right-of-use assets* -98 -71 -38 -22 -9 Other financial liabilities -1 028 -589 -562 -551 -1 028 Financial receivables Derivatives 41 17 -3 4 -1 Derivatives attributable to working capital 274 109 10 - - Trade receivables 2 823 - - - - Other financial receivables 240 5 5 5 5 *Liabilities relating to right-of-use assets are not classified as financial instru- ments under IFRS 9. Parent company Maturity structure, undiscounted amounts 2025 2026 2027 2028 2029- Financial liabilities Derivatives -26 - - - - Derivatives attributable to working capital -407 -138 -29 - - Trade payables -3 586 - - - - Other financial liabilities -1 028 -1 330 -562 -551 -1 026 Financial receivables Derivatives 41 17 -3 4 -1 Derivatives attributable to working capital 275 109 10 - - Trade receivables 2 336 - - - - Other financial receivables 186 4 325 4 4 4 Holmen Annual Report 2024  85 Notes Note 14 Note 14. Financial instruments, cont. Group Financial instruments included in net financial debt Recognised at fair value through profit/loss* Hedging instruments Recognised at amortised cost Total book value Fair value 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Non-current financial receivables Derivatives - - 34 45 - - 34 45 34 45 Other financial receivables - - - - 12 16 12 16 12 16 - - 34 45 12 16 46 61 46 61 Current financial receivables Accrued interest - - - - - 2 - 2 - 2 Derivatives 1 1 8 43 - - 10 43 10 43 Other financial receivables - - - - 6 5 6 5 6 5 1 1 8 43 6 7 16 50 16 50 Cash and cash equivalents Cash and cash equivalents - - - - 234 1 202 234 1 202 234 1 202 - - - - 234 1 202 234 1 202 234 1 202 Non-current liabilities Bonds - - - - -2 500 -1 900 -2 500 -1 900 -2 534 -1 900 Derivatives - - - - - - - - - - Other non-current liabilities - - - - -2 -2 -2 -2 -2 -2 - - - - -2 502 -1 902 -2 502 -1 902 -2 536 -1 902 Current liabilities Certificate programme - - - - - - - - - - Derivatives -2 -3 -19 - - - -21 -3 -21 -3 Accrued interest - - - - -22 -18 -22 -18 -22 -18 Other current liabilities - - - - -911 -1 000 -911 -1 000 -904 -1 000 -2 -3 -19 - -932 -1 018 -953 -1 021 -947 -1 021 Financial instruments not included in net financial debt Other shares and participations 6 5 - - - - 6 5 6 5 Trade receivables - - - - 2 823 2 696 2 823 2 696 2 823 2 696 Derivatives (recognised in operating receivables) 15 61 370 791 - - 384 852 384 852 Trade payables - - - - -3 808 -3 394 -3 808 -3 394 -3 808 -3 394 Derivatives (recognised in operating liabilities) -72 -124 -485 -434 - - -557 -558 -557 -558 -51 -58 -115 358 -985 -698 -1 151 -398 -1 151 -398 Total financial instruments -52 -60 -93 446 -4 167 -2 394 -4 311 -2 008 -4 338 -2 008 *Refers to instruments that must be measured at fair value in accordance with IFRS 9. Notes 86    Holmen Annual Report 2024 Note 14 Parent company Financial instruments included in net financial debt Recognised at fair value through profit/loss* Hedging instruments Recognised at amortised cost Total book value Fair value 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Non-current financial receivables Derivatives - - 34 45 - - 34 45 34 45 Receivables in respect of Group companies - - - - 4 321 3 751 4 321 3 751 4 321 3 751 Other financial receivables - - - - 10 13 10 13 10 13 - - 34 45 4 331 3 764 4 365 3 809 4 365 3 809 Current financial receivables Accrued interest - - - - - 2 - 2 - 2 Derivatives 5 43 5 - - - 10 43 10 43 Other financial receivables - - - - 6 5 6 5 6 5 5 43 5 - 6 7 16 50 16 50 Cash and cash equivalents Cash and cash equivalents - - - - 180 1 092 180 1 092 180 1 092 - - 180 1 092 180 1 092 180 1 092 Non-current liabilities Bonds - - - - -2 500 -1 900 -2 500 -1 900 -2 534 -1 900 Liabilities in respect of Group companies - - - - -741 -784 741 -784 -741 -784 Derivatives - - - - - - - - - - - - - - -3 241 -2 684 -3 241 -2 684 -3 275 -2 684 Current liabilities Certificate programme - - - - - - - - - - Derivatives -21 -3 - - - - -21 -3 -21 -3 Accrued interest - - - - -22 -18 -22 -18 -22 -18 Other current liabilities - - - - -911 -1 000 -911 -1 000 -904 -1 000 -21 -3 - - -932 -1 018 -953 -1 021 -947 -1 021 Financial instruments not included in net financial debt Other shares and participations 5 4 - - - - 5 4 5 4 Trade receivables - - - - 2 336 2 226 2 336 2 226 2 336 2 226 Derivatives (recognised in operating receivables) 15 67 371 794 - - 385 861 385 861 Trade payables - - - - -3 586 -3 196 -3 586 -3 196 -3 586 -3 196 Derivatives (recognised in operating liabilities) -80 -106 -486 -434 - - -566 -539 -566 -539 -60 -35 -115 360 -1 250 -970 -1 426 -644 -1 426 -644 Total financial instruments -76 6 -77 406 -906 190 -1 059 601 -1 087 601 *Refers to instruments that must be measured at fair value in accordance with IFRS 9. Holmen Annual Report 2024  87 Notes Note 14 Note 15. Inventories Group Parent company 2024 2023 2024 2023 Felling rights 1 298 982 1 298 982 Logs and pulpwood 576 414 530 388 Raw materials and consumables 1 198 1 119 833 834 Finished products and work in progress 2 625 2 296 2 059 1 822 Electricity certificates and emission allowances 0 27 0 27 Total 5 697 4 837 4 720 4 054 During the year, impairment losses and reversals of previous impairment losses for finished stock had an effect of SEK +6 million (-5) on Group profit, while ­impairment losses on other stock had an effect of SEK -3 million (-4). Impair- ment losses and reversals of previous impairment losses for finished stock had an ­effect of SEK +24 million (-5) on the parent company, with impairment losses on other stock of SEK -2 million (-4). 31 Dec 2023 Registered share capital Number of shares Quotient value SEKm Class A 45 246 468 26 1 180 Class B 117 265 856 26 3 058 Total no. of shares 162 512 324 4 238 Holding of repurchased class B shares -3 289 969 Total number of outstanding shares 159 222 355 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 2024, the Group’s own shareholding was 4 844 132 shares (3 289 969). In 2024, 1 554 163 shares were repurchased for SEK 647 million, corresponding to an average price of SEK 416 per share. The buy-backs amount to 0.9 per cent of the total number of shares. The company already owned 2.1 per cent of its own shares, meaning that at 31 December 2024 Holmen held 3.0 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 -153 million (412) on the parent company’s equity. In the consolidated accounts, the valuation of derivatives and other financial instruments had an impact of SEK -144 million (386) on equity. Decisions on dividends are based on an appraisal of the Group’s profitability, future investment plans and financial position. The objective is to maintain a strong ­financial position and for the Group’s net financial debt as a percentage of equity not to exceed 25 per cent. The AGM has at its disposal the company’s earnings amounting to SEK 6 057 619 489. The Board proposes to the AGM, to be held on 31 March 2025, that it approve a total dividend of SEK 12.0 per share. The proposed ­dividend totals SEK 1 892 million. The Board also proposes that the remaining amount of SEK 4 165 601 185 be carried forward. The preceding year, the dividend paid was a total of SEK 11.50 per share (SEK 1 831 million). Net financial debt as a percentage of equity was 6 per cent (3). 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 16. Operating receivables Group Parent company 2024 2023 2024 2023 Trade receivables Group companies - - 45 50 Associates 55 68 55 68 Other 2 768 2 628 2 235 2 108 Total trade receivables 2 823 2 696 2 336 2 226 Current receivables 349 434 251 333 Derivatives 384 852 385 861 Prepayments and accrued income 353 344 158 198 Total other operating receivables 1 085 1 630 795 1 392 Total operating receivables 3 909 4 326 3 131 3 618 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 (30). During the year, the provision decreased by SEK -4 million (-3) as a result of actual credit losses, and increased by SEK 5 million (4) as a result of changes in the provision for antici- pated or expected credit losses. At 31 December 2024, SEK 75 million (56) 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 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. Group Parent company Cost recognised in profit/loss for the year 2024 2023 2024 2023 Defined benefit plans Personnel costs -6 -5 -12 6 Financial income and costs 12 14 0 0 Total defined benefit plans stated in profit/loss for the year 6 9 -12 6 Defined contribution plans Personnel costs -210 -197 -173 -160 Total recognised in profit/loss for the year -204 -188 -184 -154 Note 17. Equity, parent company 31 Dec 2024 Registered share capital Number of shares Quotient value SEKm Class A 45 246 468 26 1 180 Class B 117 265 856 26 3 058 Total no. of shares 162 512 324 4 238 Holding of repurchased class B shares -4 844 132 Total number of outstanding shares 157 668 192 Notes 88    Holmen Annual Report 2024 Notes 15–18 Group Cost recognised in other comprehensive income 2024 2023 Return on plan assets excl. recognised interest income -134 47 Actuarial gains and losses from changes in demographic assumptions 19 -42 Actuarial gains and losses from changes in financial assumptions 131 -51 Actuarial gains and losses from experiential adjustments -23 -19 Payroll tax -2 0 Effect of asset ceiling 4 59 Total recognised in other comprehensive income -5 -6 Group Parent company Obligations 2024 2023 2024 2023 Obligations at 1 January -1 581 -1 471 -179 -175 Current service cost -6 -5 -20 -14 Payroll tax 0 -3 - - Interest expenses -70 -71 0 0 Actuarial gains/losses 128 -112 - - Benefits paid 105 100 12 13 Exchange differences -114 -20 - - Obligations at 31 December -1 539 -1 581 -185 -176 Plan assets Fair value of assets at 1 January 1 809 1 753 175 161 Recognised interest income 82 85 0 - Expected return excl. recognised interest income -134 47 - - Real return (parent company) - - 10 20 Administrative expenses -15 -10 - - Amounts paid in and paid out by employer 12 6 0 -7 Benefits paid -105 -100 - - Exchange differences 133 27 - - Fair value of assets at 31 December 1 782 1 809 185 175 Effect of asset ceiling -252 -237 - - Pension obligations, net -9 -9 0 -1 The change in defined benefit obligations and the change in plan assets are set out in the table above. 89 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 representatives of ­Holmen and the beneficiaries. Holmen’s UK subsidiaries have commitments to cover any shortfalls. In 2022, the trusts entered into an agreement 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 10 years. Of the Group’s total obligations, SEK 9 million (9) are unfunded obligations, while the rest are wholly or partially funded obligations. Of the parent company’s obligations, SEK 0 million (1) are secured in accordance with the Swedish Pension Obligations Vesting Act. The plan assets by type are as shown below: Group Parent company Plan assets 2024 2023 2024 2023 Equities 80 79 80 79 Bonds and bank account balances 420 406 105 96 Life insurance company receivables 1 282 1 323 - - 1 782 1 809 185 175 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, 73 per cent are government bonds and 27 per cent corporate bonds. UK Key actuarial assumptions, Group (weighted average) 31 Dec 2024 31 Dec 2023 Discount rate, % 5.5 4.6 Rate of salary increase, % - - Rate of price inflation, % 2.7 2.7 Life expectancy after 65 for men/women, years 21/24 21/24 Life expectancy table SAPS S3PA SAPS S3PA Sweden Key actuarial assumptions, Group 31 Dec 2024 31 Dec 2023 Discount rate, % 3.3 3.3 Rate of salary increase, % 3.0 3.0 Rate of price inflation, % 2.0 2.0 Life expectancy after 65 for men/women, years 22/24 22/24 Life expectancy table DUS23 DUS23 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 0.5 per cent (1.0) and salary levels at the balance sheet date were used for calculating the amount of the parent company’s pension ­obligation. The table below shows how the obligations would be affected in the event of a change in key actuarial assumptions (- reduces debt, + increases debt). Group Sensitivity analysis 31 Dec 2024 31 Dec 2023 Discount rate (+0.5%) -69 -79 Rate of salary increase (+0.5%) 1 1 Rate of price inflation (+0.5%) 53 58 Mortality (+1 year of life expectancy) 71 69 The Group’s payments into the funded defined benefit plans in 2025 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 26 million (23) and are included in personnel costs in the income statement. The active members of the plan at Holmen amounted to 597 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 consol- idation, one measure may be to raise the agreed price for new policy subscrip- tions 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 2024, Alecta’s­ collective consolidation level was 162 per cent (157) and Alecta has decided­ to introduce a premium reduction for 2025. The expected premiums payable to Alecta in 2025 amount to SEK 22 million, taking the premium reduction­ into account. Holmen Annual Report 2024  89 Notes Note 18 Note 19. Provisions Group 2024 2023 Book value at beginning of year 449 441 Provisions during the year 32 20 Amount utilised during the year -46 -27 Unutilised amount reversed during the year -1 -5 Reclassification - 20 Translation differences 0 0 Book value at end of year 433 449 Of which total non-current portion of the provisions 389 418 Of which total current portion of the provisions 45 31 Parent company Book value at beginning of year 623 609 Provisions during the year 179 160 Amount utilised during the year -164 -145 Unutilised amount reversed during the year - - Book value at end of year 630 623 Of which total non-current portion of the provisions 460 453 Of which total current portion of the provisions 170 170 Provisions mainly relate to obligations to restore the environment at discontin- ued material sites. SEK 85 million of these provisions are expected to be settled within three years, while the remainder is expected to be settled over a longer time horizon. Note 20. Operating liabilities Group Parent company 2024 2023 2024 2023 Trade payables Group companies - - 49 14 Other 3 808 3 394 3 537 3 182 Total trade payables 3 808 3 394 3 586 3 196 Current liabilities Associates 11 4 11 4 Other 345 278 263 235 Derivatives 557 558 566 539 Accruals and deferred income 982 968 769 792 Total other operating liabilities 1 895 1 808 1 609 1 570 Total operating liabilities 5 703 5 202 5 195 4 766 All trade payables are due for payment within one year. Accruals and deferred income in the parent company principally consist of ­personnel costs of SEK 391 million (395), discounts of SEK 92 million (88) and goods and services delivered but not yet invoiced of SEK 50 million (77). The fair values of derivatives relate to hedges of future cash flows. See Note 14. Note 21. Related parties Of the parent company’s net sales of SEK 20 393 million (20 234), SEK 370 mil- lion (333) relate to deliveries of goods to Group companies. The parent compa- ny’s purchases of goods from Group companies amounted to SEK 236 million (74). Parent company net sales also include income from the sale of silviculture services to subsidiaries for an amount of SEK 570 million (528). SEK 2 746 mil- lion (2 561) of expenses for the leasing of non-current assets from subsidiaries are recognised in the parent company’s accounts. 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 22. L E Lundbergföretagen AB is a major shareholder in Holmen (see pages 54–55). Holmen rents office premises for SEK 9 million (8) from Fastighets AB L E Lund- berg, which is a Group company within L E Lundbergföretagen AB. In 2024, ­Fredrik Lundberg, who is CEO of and principal shareholder in L E Lundberg­ företagen, received a fee of SEK 860 000 (820 000) as Chairman of Holmen’s Board. Louise Lindh, who is Chairwoman of the Board of Fastighets AB L E Lund- berg and who is also a party related to Fredrik Lundberg, received a Board fee of SEK 430 000 (410 000). 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. Transactions with related parties Sale of goods to related parties Purchase of goods from related parties Other (e.g. interest, dividend) Liabilities in respect of related parties Receivables in respect of related parties Group 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Associates 565 704 60 63 2 2 11 4 65 78 Parent company Subsidiaries 370 333 236 74 496 463 797 799 4 368 3 804 Associates 565 704 60 63 2 2 11 4 65 78 See Note 4 for remuneration paid to members of the Board. Note 22. Investments in Group companies Parent company Accumulated acquisition costs 2024 2023 Value at beginning of year 13 155 13 054 Shareholder contributions and investments 0 100 Disposals - - Liquidations -1 - Total 13 154 13 155 Accumulated impairment losses Value at beginning of year 1 357 1 357 Impairment losses for the year - - Total 1 357 1 357 Book value at end of year 11 797 11 798 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’. 90    Holmen Annual Report 2024 Notes Notes 19–22 Corporate ID No. Registered office No. of shares Holding %1) Book value in the parent company’s accounts Holding %1) Book value in the parent company’s accounts Parent company’s direct holdings of investments in subsidiaries 2024 2023 Holmen Skog AB 556220-0658 Örnsköldsvik 1 000 100 0 100 0 Holmen Wood Products AB 556099-0672 Hudiksvall 1 000 100 0 100 0 Holmen Paper AB3) 556005-6383 Norrköping 100 100 0 100 0 Holmen Iggesund Paperboard AB3) 556088-5294 Hudiksvall 1 000 100 0 100 0 Holmen Energi AB 556524-8456 Örnsköldsvik 1 000 100 0 100 0 Holmen Skog Mitt AB 559165-6623 Stockholm 1 000 100 2 856 100 2 856 Holmen Skog Syd AB 559165-6631 Stockholm 1 000 100 1 527 100 1 527 Martinsons Skogsfastigheter AB 556738-2154 Stockholm 1 000 100 70 100 70 Terminalen i Bastuträsk AB 556591-5898 Stockholm 1 000 100 18 100 18 Holmen Sågverk AB 559165-6672 Stockholm 1 000 100 422 100 422 Martinsons Såg AB 556218-2856 Skellefteå 50 000 100 831 100 831 Holmens Bruk AB 559165-6615 Stockholm 1 000 100 383 100 383 Iggesunds Bruk AB 559165-6656 Stockholm 1 000 100 740 100 740 Holmen Vattenkraft AB 559165-6664 Stockholm 1 000 100 2 663 100 2 663 Ljusnan Vattenkraft AB 559165-6680 Stockholm 1 000 100 276 100 276 Blåbergsliden Vind AB 559138-5181 Stockholm 500 100 200 100 200 Varsvik AB 556914-9833 Stockholm 500 100 263 100 263 Other Swedish Group companies 2 2 Total Swedish holdings 10 253 10 253 Holmen UK Ltd, UK Workington 1 197 100 100 1 519 100 1 519 Holmen Paper Ltd2) London - 100 - 100 - Holmen Iggesund Paperboard (Workington) Ltd2),4) Workington - 100 - 100 - Holmen France S.A.S., France Paris 10 000 100 0 100 0 Holmen GmbH, Germany Hamburg - 100 1 100 1 Holmen Paper S.A., Spain Madrid 60 000 100 1 100 1 Holmen Singapore Pte Ltd, Singapore Singapore 800 000 100 4 100 4 Iggesund Paperboard Inc, US5) Lyndhurst 1 000 100 7 100 7 Holmen Hongkong Ltd, China Hong Kong 4 000 000 100 5 100 5 Holmen B.V., Netherlands Amsterdam 35 100 7 100 7 AS Holmen Mets, Estonia Tallinn 500 100 0 100 0 Other non-Swedish Group companies 1 2 Total non-Swedish holdings 1 544 1 545 Total 11 797 11 798 1) The holdings correspond to the percentage of votes for the total number of shares held. 2) Indirect holdings. 3) In 2025, Holmen Paper AB was absorbed by Iggesund Paperboard AB through a merger and renamed Holmen Board and Paper AB. 4) Renamed Holmen Board and Paper Ltd in 2025. 5) Renamed Holmen Inc in 2025. Note 23. Untaxed reserves Parent company Untaxed reserves 31 Dec 2023 Appropriations 31 Dec 2024 Accumulated depreciation and amortisation in excess of plan Non-current intangible assets 0 0 0 Property, plant and equipment 16 -4 12 16 -4 12 Tax allocation reserves 2019 fiscal year 700 700 2020 fiscal year 700 700 2021 fiscal year 680 680 2022 fiscal year 1 488 1 488 2023 fiscal year 900 900 2024 fiscal year - 470 470 4 468 470 4 938 Total 4 484 466 4 950 Group contributions received amounted to SEK 921 million (988) and Group ­contributions paid amounted to SEK -89 million (-367). Total appropriations amounted to SEK 366 million (190). Note 24. Collateral and contingent liabilities Group Parent company Contingent liabilities 2024 2023 2024 2023 Guarantees on behalf of Group companies - 158 114 Other contingent liabilities 68 41 68 41 Total 68 41 227 155 Other contingent liabilities for the Group largely comprise guarantee undertak- ings 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. Holmen Annual Report 2024    91 Notes Notes 22–24 Note 25. Cash flow statement Note 26. 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 land and biological assets The Group’s forest land is recognised at a fair value of SEK 26 243 million (25 793) based on transaction in forest properties, less the fair value of standing trees recognised as biological assets with a fair value of SEK 31 600 million (30 555). The valuation based on transactions in forest properties draws on ­detailed data about transactions and price statistics published by different mar- ket operators. To obtain a sufficiently large population, three years of aggregated transactions are used. 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. Valuations are primarily dependent on price ­statistics and transaction data collected from external parties and how large the volume of standing timber is estimated to be. The value of standing trees is determined by calculating the present value of the expected future cash flows based on estimates of future harvest volumes, changes in prices and costs and discount rates. Environmental and climate factors were taken into account when preparing both the forest management programme and the harvesting plan, which forms the ­basis for the forecasting of future harvest volumes. A deferred tax liability of SEK 5 360 million (5 272) has been recognised in respect of forest land and SEK 6 510 million (6 294) in respect of biological assets. 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. ­Value in use is calculated by discounting the present value of the expected future cash flows based on estimates of future volumes, changes in prices and costs and discount rates. Changes in conditions may have an effect on the estimated recoverable amount applied in connection with future impairment tests. Pension obligations The Group has defined benefit pension obligations measured at SEK 1 539 ­million (1 581) and SEK 1 782 million (1 809) 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 has mainly recognised provisions for uncertainties related to obligations to restore the environment at abandoned sites where its operations have created pollutants. 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. Group Parent company Interest paid and dividends received 2024 2023 2024 2023 Dividends received - - 344 348 Interest received 37 47 217 172 Interest paid -104 -80 -139 -113 Total -67 -33 422 407 In 2024, the Group redeemed bonds totalling SEK 1 000 (1 000) million and ­issued new bonds totalling SEK 1 500 million. See Note 14 for a breakdown of cash and cash equivalents. Group 2023 New leases Cash flow Currency and market revaluation 2024 Bonds 2 900 - 500 - 3 400 Commercial paper - - - - - Other financial liabilities 23 - -10 43 55 Liabilities relating to right-of-use assets 250 105 -127 - 228 Pension obligations 9 - -4 3 9 Financial liabilities* 3 182 105 359 46 3 692 *Including liabilities relating to right-of-use assets and pension obligations. Group 2022 New leases Cash flow Currency and market revaluation 2023 Bonds 3 900 - -1 000 - 2 900 Commercial paper - - - - - Other financial liabilities 41 - -60 42 23 Liabilities relating to right-of-use assets 247 117 -121 7 250 Pension obligations 7 - -4 6 9 Financial liabilities* 4 195 117 -1 185 55 3 182 *Including liabilities relating to right-of-use assets and pension obligations. Parent company 2023 Cash flow Currency and market revaluation 2024 Bonds 2 900 500 - 3 400 Commercial paper - - - - Liabilities in respect of Group companies 784 -43 0 741 Other financial liabilities 21 -10 43 53 Pension obligations 1 - -1 0 Financial liabilities* 3 706 447 42 4 195 *Including pension obligations. Parent company 2022 Cash flow Currency and market revaluation 2023 Bonds 3 900 -1 000 - 2 900 Commercial paper - - - - Liabilities in respect of Group companies 434 342 8 784 Other financial liabilities 39 -60 42 21 Pension obligations 13 -13 1 1 Financial liabilities* 4 386 -730 51 3 706 *Including pension obligations. Note 27. Events after the balance sheet date No significant events have occurred since the end of the reporting period. 92    Holmen Annual Report 2024 Notes Notes 25–27 Appropriation of profits SEK The following earnings of the parent company are at the disposal of the AGM: Net profit for the 2024 financial year 1 375 483 021 Retained earnings 4 682 136 469 6 057 619 489 The Board proposes that the following be allocated to the shareholders an ordinary dividend of SEK 9.00 per share (157 668 192 shares), 1 419 013 728 an extra dividend of SEK 3.00 per share (157 668 192 shares) 473 004 576 1 892 018 304 and that the remaining amount be carried forward 4 165 601 185 The Board of Holmen AB has proposed that the 2025 AGM resolve in favour of paying an ordinary dividend of SEK 9.0 per share, and an extra dividend of SEK 3.0 per share, for a total of SEK 1 892 million. The previous year, an ordinary ­dividend of SEK 8.5 per share and an extra dividend of SEK 3.0 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 66 per cent of the profit for 2024 for the Group and means that 3 per cent of the Group’s equity at 31 December 2024 will be paid out by way of dividends. The Board has established that the Group should have a strong financial posi- tion, with net financial debt not exceeding 25 per cent of equity. At 31 December 2024 it amounted to 6 per cent. The proposed dividends would increase the net debt to equity by 4 percentage points. Holmen AB’s equity at 31 December 2024 amounted to SEK 11 972 million, of which non-restricted equity was SEK 6 058 million. Assets and liabilities meas- ured at fair value in accordance with Chapter 4, §14a of the Swedish Annual ­Accounts Act had an impact of SEK -153 million on equity. The Group’s equity at 31 December 2024 amounted to SEK 57 370 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 accord- ance 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 2024    93 Proposed appropriation of profits Proposed appropriation of profits 94    Holmen Annual Report 2024 Signatures The annual accounts and the consolidated accounts were approved for publication by the Board in its decision of 24 February 2025. 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 31 March 2025. Stockholm, 24 February 2025 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 John Nyberg Board member, employee representative Tommy Åsenbrygg Board member, employee representative Our audit report was submitted on 25 February 2025. PricewaterhouseCoopers AB Magnus Svensson Henryson Authorised Public Accountant Principal Auditor Signatures Auditor’s report Holmen Annual Report 2024    95 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 2024, except for the corporate governance statement and the sustainability report on pages 44-48 and 98–122, respectively. The annual accounts and consoli- dated accounts of the company are included on pages 4, 8–11, 16–17, 42–94 and 127 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 position of the parent company as of 31 December 2024 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2024 and its financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the ­corporate governance statement and the sustainability report on pages 44-48 and 98–122, respectively. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of shareholders adopts the ­income 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 Regulation (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 responsibi­ lities under these standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the Group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes, based on the best of our knowledge and belief, that no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies ­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 considered where the Managing Director and the Board of Directors have made significant ­accounting estimates about future events or outcomes that are inherently uncertain. In the audit, we have also addressed the risk that the Board of Directors and the Managing Director may have overridden internal controls, including considering whether there is evidence of systematic deviations that could indicate irregularities. We have designed our audit to enable us to provide an opinion on the financial statements as a whole, taking into account how the Group is organised, the pro- cesses for financial reporting and the industry in which the operations are active. Materiality The scope of our audit has been influenced by our application of materiality. An ­audit is designed to obtain reasonable assurance about whether the financial state- ments are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if they, individually or in aggregate, could ­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 thresholds for materiality concerning the financial statements as a whole. With the help of these and qualitative considerations, we have established the audit orientation and scope and the character and point in time for our audit procedures. Quantitative thresholds for materiality have also been used to assess the effect of potential misstatements, individual and aggregated, in the financial statements as a whole. Key audit matters Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated ­accounts for the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated 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 22 759 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 pulpwood that are sold to customers. Sales of goods are transaction-rich, put requirements on book- keeping, monitoring and internal controls. The services provided are limited and primarily relate to forest management 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 examined ­individually. A description of the area is presented in Note 2. Accounting and valuation principles are presented in Note 1 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. Valuation of forest assets The Group’s forest assets amount to SEK 57 843 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 recognised in accordance with IAS 16 Property, Plant and Equipment. A description of the measurement of value of forest assets and important assumptions is presented in Note 9. The measurement process is complex since it requires assessments and as- sumptions 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 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 valuations. • Examined that the disclosed information in Note 9 of the annual report meets the require- ments according to IFRS and provides a fair presentation of the company’s valuation. Auditor’s report 96    Holmen Annual Report 2024 Other information than the annual accounts and consolidated ­accounts This document also contains information other than the annual accounts and con- solidated accounts, which is found on pages 2–3, 5–7, 12–15, 18–41, 123–126, 128–136 .(“Other information”). The remuneration report that we obtained prior to the date of this auditor’s report also constitutes Other information. The Board of Directors and the Managing Director are responsible for Other information. Our opinion on the annual accounts and consolidated accounts does not cover ­other information and we do not express any form of assurance conclusion regarding ­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 knowledge obtained in the audit and assess whether Other information otherwise appears to be materially misstated. If we, based on the work performed concerning Other information, conclude that the Other information contains a material misstatement, we are required to report this. We have nothing to report in this regard. The Board of Directors’ and Managing Director’s responsibilities The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presenta- tion in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they deter- mine is necessary to enable the preparation of annual accounts and consolidated ­accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, the Board of Directors and the Managing Director are responsible for assessing the company’s and the Group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern assumption applies unless the Board and the Managing Director intend to liquidate or cease to operate the company or have no realistic alternative to doing so. The auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual ­accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individu- ally 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 2024 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 appropri- ated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis of opinion We have conducted our audit in accordance with generally accepted auditing stand- ards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the Group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these ­requirements. We believe that the audit evidence we have obtained is sufficient and adequate as a basis for our opinion. The Board of Directors’ and Managing Director’s responsibilities Responsibility for the proposed appropriation of the company’s profit or loss rests with the Board of Directors. In conjunction with the proposal of a dividend, this ­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, consolidation 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 guidelines 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 obliga- tions 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. 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.revisors­inspektionen.se/revisornsansvar. This description forms part of the statutory annual report. Auditor’s report Holmen Annual Report 2024    97 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 2024. Our examination and our opinion refer only to the statutory requirement. In our opinion, the ESEF report has been prepared in a format that in all significant respects facilitates uniform electronic reporting. Basis for Opinion We have conducted our examination in accordance with FAR’s recommendation, RevR 18 Examination of the Esef report. Our responsibilities under this recommen- dation are further described in the Auditor’s Responsibilities section. We are inde- pendent of Holmen AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to ­provide a basis for our opinion. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for ensuring that the Esef report has been prepared in accordance with Chapter 16, Section 4 a of the Securities Market Act (2007:528) and for ensuring that there is such internal ­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 proce- dures performed. RevR 18 requires us to plan and execute procedures to achieve reasonable assur- ance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individu- ally or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef report. The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits and ­Reviews of Financial Statements, and other Assurance and Related Services ­Engagements and accordingly maintains a comprehensive system of quality ­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 circum- stances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors (and the Managing ­Director), but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also includes an evaluation of the appro- priateness and reasonableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHTML format and a reconciliation of the Esef report with the audited ­annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the 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 accord- ance with what follows from the Esef regulation. Auditor’s opinion regarding the corporate governance ­statement The Board of Directors is responsible for ensuring that the corporate governance statement on pages 44-48 has been prepared in accordance with the Annual ­Accounts Act. Focus and scope of the examination Our examination has been conducted in accordance with FAR’s auditing standard RevR 16 The Auditor’s Examination of the Corporate Governance Statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with Internation- al Standards on Auditing and generally accepted auditing standards in Sweden. We believe that this examination has provided us with sufficient basis for our opinions. Opinion A corporate governance statement has been prepared. Disclosures in accordance with Chapter 6, Section 6, second paragraph, points 2–6 of the Annual Accounts Act and Chapter 7, Section 31, second paragraph of the same law are consistent with the other parts of the annual accounts and the consolidated accounts and are in ­accordance with the Annual Accounts Act. Auditor’s opinion regarding the statutory sustainability report Assignment and division of responsibilities The Board of Directors is responsible for ensuring that the sustainability report on pages 98–122 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 substantially more limited in scope compared with the focus and scope of an audit conducted in ­accordance with International Standards on Auditing, and generally accepted ­auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion. Opinion A statutory sustainability report has been prepared. PricewaterhouseCoopers AB, Torsgatan 21, 113 97 Stockholm, was appointed auditor of Holmen AB by the general meeting of the shareholders on 16 April 2024 and has been the company’s auditor since 22 April 2021. Stockholm, 25 February 2025 PricewaterhouseCoopers AB Magnus Svensson Henryson Authorised Public Accountant Auditor in Charge General disclosures Basis for preparation General basis for preparation of the sustainability statement Holmen’s sustainability report covers the financial year 1 January to 31 December 2024. Holmen publishes sustainability data annually, and this year’s report is published on 7 March 2025. The sustainability report comprises pages 98–126 and is prepared in line with the Global Reporting Initiative’s GRI Standards 2021 and the aspects that are material to the Group have been identified. The sustainability report has under- gone review by Holmen’s auditors, see the separate assurance report on page 126. Holmen’s statutory sustainability report in accordance with the Swedish Annual Accounts Act can be found on pages 98–122. Holmen’s statutory sustainability report has been reviewed by Holmen’s auditors in line with requirements laid down in national law. 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. Disclosures in relation to specific circumstances Time horizons In the sustainability report, material sustainability matters have been identified and assessed as to whether they arise in the short, medium and long term. Definition of time horizons Short term The period Holmen has adopted as the reporting period in the financial reports Medium term Up to five years from the end of the reporting period (as zabove) Long term More than five years Value chain estimation Where estimates have been made, this is stated under the respective metrics, see the relevant section of the sustainability report. Sources of estimation and outcome uncertainty Estimation and outcome uncertainties have been commented on in conjunction with the information concerned. Changes in preparation or presentation of sustainability information Reporting in Holmen’s Annual Report 2024 is based on a materiality assessment in line with GRI and is simultaneously updated as inspired by the European ­Sustainability Reporting Standards (ESRS) (’double materiality assessment’), see page 100 for more information about the materiality assessment. The struc- ture of the sustainability information provided is modelled on the way ESRS structures its reporting areas. In 2024, Holmen has updated the methodology used to calculate climate ­benefit. For further information, see page 104. For scope 2, in 2024, Holmen has updated the source of emission factors and the calculation method. See page 103. The key figures for HR information have been revised to align Holmen’s ­sustainability report with ESRS. See pages 112–113. In 2024, the key figures for waste were updated to align with the requirements of ESRS, and the figure for hazardous waste in 2023 has been updated from 1.4 to 1.5 accordingly. See page 130. Governance 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. Integration of sustainability-related performance in incentive schemes Holmen’s short and long-term incentive programmes for Group management are linked to sustainability-related matters (see Note 4 on page 74). Strategy Strategy, business model and value chain Holmen’s business concept is to own and add value to the forest. Our forest ­holdings are the foundation of our business. Using Holmen’s own industrial ­installations, the growing trees are refined into everything from wood for ­climate-smart building to renewable packaging, magazines and books, while at the same time hydro and wind power are generated on Holmen’s own land. Holmen’s strategy draws on the fact that the world must make the transition to using energy and materials sustainably to limit global warming. With renewable raw material, fossil-free electricity and resource-efficient production, Holmen is able to offer products with a low climate footprint. Holmen has 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. An increasing volume of standing timber and sustainable building in wood contribute to a better climate by binding and storing carbon, but the greatest benefit is created when the production of renewable electricity, wood products, paperboard and paper replaces fossil alternatives. Buildings account for considerable emissions of greenhouse gases, in construc- tion and during the building’s lifecycle, and the construction industry is working 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. In recent years, acquisitions and investments have seen Holmen expanding its wood products business by increasing capacity and broadening its range of goods and services. With a strong position in the wood market and well-invested sawmills, Holmen is excellently placed to continue to expand the wood products business. Holmen grows houses. This means that the forest is managed in a way that ­generates as much timber as possible. When the wood is sawn, residual prod- ucts are produced, which are used in the Group’s paper and paperboard mills, where wood chips and shavings from the sawmills are topped up with the trees that are too narrow to become construction material. 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 Holmen’s products has increasingly become a competitive advantage. Over the past 50 years, the world’s energy consumption has tripled, and this ­increasing demand has almost exclusively been met using fossil fuels. To reduce fossil dependence, Europe must transform its energy supply and significant ­elements of industrial production, heating, and transport must be electrified. Holmen’s­ controllable hydro power contributes fossil-free and renewable ­electricity when it is most needed, while helping to stabilise an increasingly weather-dependent electricity system. Holmen’s extensive land holdings also create an opportunity to add more renewable energy in the form of wind power. Developing wind power is a natural complement to controllable hydro power and a good way to derive added value from forest ownership. General disclosures 98    Holmen Annual Report 2024 Sustainability report Business model and value chain The forest ecocycle gives the business wood. The wood is refined at Holmen’s own industrial installations and made into products which 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. 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. Holmen also uses its large land holdings to produce renewable ­energy from both wind and water. Forest: Holmen carries out active and sustainable forestry on over a million ­hectares of its own productive forest land. Large forest holdings and close part- nerships with approximately 15 000 private forest owners create considerable economies of scale, which give Holmen a strong position in the wood market. Alongside extensive timber trading, Holmen’s industrial installations are provid- ed with raw material that is distributed via efficient logistics solutions. In addi- tion to logs and pulpwood, bark, treetops and branches have their own uses and are sold on for bioenergy production. Wood Products: The five sawmills play a key role in Holmen’s circular business. This is where the wood is split and the processing of the harvested forest begins. Developing the wood products business is a natural extension of forestry and an important dimension in Holmen’s strategy of owning and adding value to the forest. Growing capacity to produce wood products near the undertaking’s own forest holdings means Holmen is able to process an ever-increasing proportion of the forest at its own industrial sites. Holmen offers a wide range of wood and timber products for construction and joinery. 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. Board and Paper: Holmen develops premium paperboard and innovative paper products for everything from cosmetics, electronics, pharmaceuticals and food to books, magazines, advertising and transport packaging. Holmen’s board and paperboard products are manufactured entirely from fresh fibre. With renewable raw material, fossil-free electricity and resource-efficient production at a total of four industrial facilities in Sweden and the UK, Holmen is able to offer products with a low climate footprint. Renewable Energy: Holmen produces renewable energy from hydro and wind power. The majority of energy production is hydro power from 21 wholly or partly owned power plants. With a large land holding, developing large-scale wind power is a natural complement to controllable hydro power, and today Holmen has two wholly owned power plants, Varsvik and Blåbergsliden, while another wind power plant, Blisterliden, is under construction. The most important raw materials for Holmen’s operations are wood and elec- tricity. Approximately half of the wood raw material is harvested from Holmen’s own forests. The remaining amounts are bought in, mainly from private forest owners in Sweden. Only a small proportion is imported. Holmen managing the harvesting of a large proportion of its wood procurement enables good control of the supply chain and reduces potential risks. Besides raw materials, the larg- est areas for purchasing are inputs, production materials and transport. Holmen is also a major purchaser of contracted forestry services. Holmen carries out industrial production at a total of nine installations, eight in Sweden and one in Workington, UK, which require environmental permits. The permits specify conditions regarding permitted production volumes, noise levels and permitted emissions to air and water. Additionally, the converting plant in Strömsbruk is a notifiable activity. Holmen also has environmental permits for wind power and commercial quarries. Furthermore, the six wholly owned and 15 partly owned hydro power plants have environmental permits for the production plant, reservoirs and water regulation. The Holmen Group has approximately 3 500 employees, 2 960 of whom are in Sweden and about 400 are in the UK. See page 75 (Note 4) for the geographical distribution of Holmen’s employees. Interests and views of stakeholders Holmen’s stakeholders have been identified based on the activity carried out, how it affects the world around us, and the actors that affect Holmen. Some of these stakeholders, such as employees, customers, suppliers, the local commu- nity, 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 stakeholders’ perspectives on operations. Working with industry organisations, discussions are held with politicians and stakeholder 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, the views of employees are voiced and heard, supplemented by employee surveys and one-to-one dialogues at all levels of the company. Good dialogues with local decision-makers, local residents and other businesses enable Holmen to pick up on signals about how the local community is affected and how this may affect Holmen’s operations. The information sources set out above are taken into account in developing the strategy to ensure that Holmen will be a successful company into the future. The strategy is constantly revised with the help of business intelligence and studies of how the world may develop in different scenarios, with the management teams of all the business areas involved. Dialogue with customers and suppliers fosters an understanding of how they may act to deal with a world in which ­sustainable energy and sustainable raw materials are in short supply. This is ­supplemented by targeted studies bringing in external consultants to under- stand how areas outside the immediate industry may develop. Material impacts, risks and opportunities and their interaction with strategy and business model Material impacts, risks and opportunities and their interaction with the strategy and business model are described under the respective relevant section, see sections on Climate change, Biodiversity, Own workforce, Workers in the value chain, Affected communities and Business conduct below. Business area Products Customer segment Primary markets Competitors (selected) Forest Logs, pulpwood and biofuel Sawmills, pulp mills, board and paper mills Sweden SCA, Sveaskog and a number of large forest owner associations Wood Products 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 and North Africa, North America Moelven, SCA, Setra, Södra, Vida and a large number of foreign companies Board and Paper Premium paperboard for consumer packaging and paper products for books, magazines, advertising and transport packaging Brand owners, converters, wholesalers, publishers, printers and retailers Europe, Asia, North America Metsä Board, Mayr- Melnhof, Norske Skog, Smurfit Westrock, Stora Enso, UPM Renewable Energy Renewable energy from hydro and wind power Nordic electricity market Fortum, Statkraft, Vattenfall, Uniper Sustainability report General disclosures Holmen Annual Report 2024    99 Impact, risk and opportunity management Description of the processes to identify and assess material impacts, risks and opportunities Since 2004, Holmen has reported sustainability information following a materi- ality assessment in which the information is selected based on the sustainability areas that are most significant to the Group. In 2024, Holmen has updated the materiality assessment drawing on GRI’s cri- teria and inspired by the forthcoming rules in ESRS, known as double materiality assessment. The materiality assessment is based on Holmen’s business concept and strategy, which have been reworded in recent years driven by the climate­ ­issue and the transition to a circular economy. Furthermore, earlier and ongoing dialogues with stakeholders such as customers and suppliers, unions and ­employees, local residents and local decision-makers have been taken into ­account as input data. Knowledge of the impact Holmen’s operations have on the environment has been obtained and is constantly monitored in the business, partly via the requirements laid down for operations in environmental permits and voluntary certifications. Holmen’s value chain has been surveyed by examining key activities occurring in Holmen’s own operations and in the value chain. Impacts, risks and opportuni- ties have subsequently been identified, taking into account whether they arise in the short, medium or long term. Impacts on the environment and people Holmen’s identified negative impacts on the environment and people have been evaluated based on an assessment of the scale and scope of the impact, its irremediable character and its likelihood. Positive impacts have been assessed based on severity and likelihood. Financial risk and opportunities for Holmen The risks and opportunities linked to environmental and social requirements identified in the value chain have been assessed based on the likelihood of their occurring and the potential financial effect. See further description under the respective section for material sustainability matters. Sustainability matters covered by the company’s sustainability statement The sustainability matters reported in Holmen’s sustainability report 2024 are presented below. Policies adopted to manage material sustainability matters and actions and resources in relation to material sustainability matters Information on policy work at Holmen is described in the Corporate Governance Report, see pages 44–48. See also the respective section for material sustaina- bility matters. Metrics and targets Metrics in relation to material sustainability matters and tracking ­effectiveness of policies and actions through targets Sustainability is about balancing several perspectives – economic, environmen- tal and social – and succeeding in doing so over time. For Holmen, successful business and a sustainable future go hand in hand. We contribute towards the transition to a sustainable and circular society and focus our work on the areas where our operations have the greatest opportunity to make a difference. • Holmen’s climate benefit is to increase by growing the business. • Holmen’s forestry fosters biodiversity. • Holmen develops the business within the framework of environmental permits and certifications. • Holmen’s workforce develop and thrive. • Holmen builds long-term relationships based on responsible business conduct. Indicators are linked to these five material areas to measure development and progress. See also the respective section for material sustainability matters. Material impact, risk or opportunity See Capture and storage of carbon dioxide in the volume of standing timber and wood products Climate change, page 101 Greenhouse gas emissions in the value chain (in production and transport) Climate change, page 101 Production of renewable electricity Climate change, page 101 Electricity-intensive production Climate change, page 101 Production produces emissions of pollutants to water, air and soil Pollution, page 105 Forestry impacts on the local environment and water Biodiversity, page 107 Hydro power generation impacts on the landscape and aquatic environments Biodiversity, page 107 Production of renewable products Circular economy, page 109 Industrial production generates waste Circular economy, page 109 Need for skilled workers Own workforce, page 111 Industrial production involves a risk of accidents Own workforce, page 111 Forestry is dependent on subcontractors Workers in the value chain, page 113 Operations impact on local residents and local businesses Affected communities, page 115 Exposure to business conduct risks Business conduct, page 116 General disclosures 100    Holmen Annual Report 2024 Sustainability report Climate change Strategy Transition plan for climate change mitigation Holmen’s strategy draws on the fact that the world must make the transition to using energy and materials sustainably to limit global warming. Actively and sus- tainably managing the forest means carbon dioxide is stored in Holmen’s grow- ing forest and products, while wood-based products and renewable energy replace fossil alternatives. Holmen’s target to increase the company’s positive contribution in the climate transition supports the Paris Agreement’s goal to hold the increase in the global average temperature to well below 2 °C above pre-in- dustrial levels and pursue efforts to limit the temperature increase to 1.5 °C. In 2024 Holmen’s operations contributed to creating climate benefits equivalent to 8.3 (7.8) million tonnes of CO2e, see calculation on page 104. Holmen has long worked to reduce the negative climate impact of its operations and as early as 2005 set the target to reduce the use of fossil fuel at the Group’s material sites by 90 per cent by 2020. Actions to improve energy efficiency and investments in fossil-free technology have led to a reduction in fossil emissions from production by 91 per cent since 2005 and today the business’ emissions are at the low lev- els defined by the IPCC that the industry should meet by 2045 to be in line with the 2 °C target in the Paris Agreement. Holmen’s scope 1 emissions also meet the necessary reduction rate for attaining the 1.5 °C target of the Paris Agree- ment. The majority of emissions are generated from purchases of inputs and from transport to and from Holmen’s industrial facilities. Holmen is committed to working towards well below 2 °C in line with the Science Based Targets initiative (SBTi) and has set scientific targets to endeavour to reduce emissions even further. Material impacts, risks and opportunities and their interaction with strategy and business model The market’s ambitions to combat climate change have been incorporated in Holmen’s strategy for a long time. Holmen has identified material impacts, risks and opportunities related to climate change and the wider world’s ambition to limit them, as described below. Capture and storage of carbon dioxide in the volume of standing timber and wood products Over the years, Holmen has developed long-term and rational management of its forest holdings, which has contributed towards a growing volume of standing timber and increased harvests. A growing volume of standing timber captures and stores carbon dioxide and after harvest, the forest raw material continues to create benefit by storing carbon dioxide in products with a long lifetime. The forest has a key role to play in the climate transition and demand for forest raw material is expected to increase, both logs and pulpwood. Although the forest is a renewable resource and Holmen’s large forest holdings give Holmen a strong position in the wood market, the supply of raw material is limited. Forest and land management are also strictly regulated both nationally and at EU level. ­Requirements on increased use of the forest as a carbon sink or requirements to change forestry methods could thus lead to reduced growth and lower harvests. The builiding sector is responsible for more than a third of Europe’s carbon emissions­ and making the manufacture of the dominant construction materials cement and steel sustainable is both expensive and difficult. Wood is a renewa- ble alternative which, in contrast to cement and steel, is energy-efficient to ­produce, while also storing carbon in the buildings. This means that the market outlook for wood products is good. Not least, when fossil-intensive construction materials are starting to have to bear their true climate cost as free allocation of emission allowances is being phased out. On the other hand, greater competition for logs may affect Holmen’s opportunities to grow in balance with access to wood raw material. Production of renewable electricity There is a great need for more fossil-free electricity and Holmen is contributing by producing renewable energy in the form of hydro power, wind power and bio- mass. Expanding existing hydro power is not judged to be possible, while future environmental permit applications involve a risk that existing production may be restricted. On the other hand, Holmen has significant potential to build wind power on its own land. The length of the permit processes poses a challenge, as does the fact that wind power construction often comes up against local opposition. Electricity-intensive production The electricity used in production at Holmen’s material sites is fossil free and largely comes from self-generated renewable energy production. Adapting ­electricity-intensive paper production also gives Holmen an opportunity to help to stabilise an increasingly weather-dependent electricity system. Regulation ­affecting energy prices, access to fossil-free energy or requirements to reduce emissions may have financial and operational consequences for the business. Greenhouse gas emissions in the value chain (in production and transport) Holmen has long worked to reduce fossil emissions from its own operations and today Holmen’s industries have a low climate footprint, which means the majori- ty of emissions are generated from purchases of inputs and from transport to and from Holmen’s industrial installations. Addressing indirect emissions may mean investments or higher costs. Holmen currently receives a free allocation of emission allowances under EU ETS and UK ETS. Approximately 10 per cent of these are used to cover the emissions of Holmen’s own operations and the ­remainder is sold to external parties. The phasing out of the emission allowance trading system may thus have a financial effect on Holmen due to lost income. Physical risks and opportunities in Holmen’s forestry and energy production Climate change may affect Holmen’s business, but the impacts of physical risks linked to a changed climate are currently not judged to be material to its opera- tions. The operation identified with the greatest potential impact from a changed climate is forestry. A warmer climate could increase the growth of Holmen’s for- ests, with a longer growing season, more precipitation and higher levels of car- bon dioxide in the air, aiding photosynthesis. Warmer temperatures and changed precipitation patterns could also create favourable conditions for pests such as fungi and insects, which could lead to reduced timber volumes and poorer quality. Long periods of drought and higher temperatures may also affect oppor- tunities to actively manage the forest as a result of shorter periods of frozen ground or standstills due to high fire risk. Changed wind patterns may affect wind power production, which is governed by the strength and stability of the wind. Changed precipitation patterns, with longer dry periods or more intense periods of rain, may affect rivers and the ­levels of lakes and watercourses. Low water levels could lead to lower hydro power production, while heavy rain and flooding could pose technical challenges and risks for installations. By the end of the reporting period, no need for material adaptations to Holmen’s industrial facilities due to climate change has been identified. Work is in progress on an updated analysis, which is expected to be complete in 2025. Impact, risk and opportunity management Description of the processes to identify and assess material climate-­ related impacts, risks and opportunities Regulatory risks and changes in external requirements driven by sustainability matters are monitored and tackled in the business areas, supported by Group staff. Part of this external monitoring is also carried out by active participation in national and international industry organisations whose purpose is to handle the monitoring of social trends, conduct advocacy work, and put forward Holmen’s position and view on relevant political and regulatory issues. Holmen is active via dialogue, responses to consultations, preparedness and lobbying, on Holmen’s own behalf and together with industry organisations. Holmen also conducts its own research projects and engages in research carried out by other actors. To identify physical climate-related risks in forestry and for wind and hydro pow- er production, Holmen has used the IPCC’s forecast that the global temperature will increase by 2.7 degrees by 2050. Accordingly, an average value of the Swedish­ Meteorological and Hydrological Institute’s (SMHI) climate scenarios, defined as Representative Concentration Pathways (RCP) RCP 4.5 and RCP 8.5, has been taken into account. A reference period has been chosen to finally assess­ the impacts of the climate scenarios. Producing climate adaptation plans is an ongoing process at the respective ­material site and in forest operations. The management of each material site participates in the process and must prioritise potential activities, taking the costs and risks of the actions and the other needs of the business into account. Policies related to climate change mitigation and adaptation Holmen’s environmental and energy policy covers all operations and is founded on the use of natural, renewable wood raw material and fossil-free energy in a business that mitigates climate change. Holmen’s sawmills, paperboard and ­paper mills must comply with applicable standards and be ISO certified in order to survey energy consumption and improve energy performance. Energy is to be recovered and used for internal and external purposes with the aim of mini- mising environmental impact and reducing the need for purchased energy. ­Purchased electricity is to come from fossil-free generation. Holmen is also to contribute to the transition of the energy system by increasing renewable energy production. The climate and system benefit must be protect- ed and the installations must be environmentally adapted in line with the nation- al plan for modern environmental conditions for hydropower. Holmen Annual Report 2024  101 Climate change Sustainability report All material sites and forest operations must prepare a climate adaptation plan. The plan must describe the relevant climate risks, their potential impacts on op- erations and the actions that can be taken. The plan must also cover proposed actions that seize opportunities. Implementation of the plan must be integrated in the material site’s management system and comply with standards laid down. Holmen’s commitment to the Science Based Targets initiative (SBTi) are to be taken into account in long-term investment planning. Actions and resources in relation to climate change policies Holmen’s work is characterised by constant improvement measures within the framework of the material sites’ certified environmental and energy manage- ment systems, which ensure compliance with legislation and requirements set by authorities. Responsibility for the management systems rests with the re- spective material site, which also bears the actual environmental responsibility. During the reporting period, actions have been carried out to reduce greenhouse gas emissions and improve energy efficiency at Holmen’s material sites. For ­example, hybrid timber trucks have been purchased to reduce fuel consumption, and heating and ventilation systems have been improved. At some material sites, productivity programmes have also been introduced to optimise energy use per unit produced. As part of developing Holmen’s energy business, Holmen has around 30 wind power projects in different stages of development, from in-depth analysis to managing permit applications. The work is in line with the strategy to create long-term value and at the same time enable the green transition by increasing electrification. 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 nurseries are selected to grow and thrive in a changing climate and when planting, tree species are chosen based on the specific conditions of the soil to ensure the trees can better with- stand extreme weather such as storms, rain and drought. Metrics and targets Targets related to climate change mitigation and adaptation Holmen’s climate benefit is to increase by growing the business. This means that Holmen will contribute to a better climate through higher growth and harvesting of forests and higher sales of renewable products that store carbon dioxide and replace fossil-based alternatives. Deliveries of renewable energy will increase by complementing existing hydro power with wind power on Holmen’s own land, and the fossil emissions in Holmen’s value chain will be reduced. Key activities to achieve the targets The following key activities have been identified to achieve the targets of increased climate benefit: • Increased growth and harvest in Holmen’s own forests through growth promotion actions. • Increased production and refining of wood raw material into wood products for sustainable building. • Increased production of renewable energy by developing wind power on Holmen’s own land. • Resource and energy efficiency improvements within the framework of environmental permits and management systems. Outcomes climate benefit In 2024, Holmen’s operations helped to generate a climate benefit amounting to 8.3 (7.8) million tonnes of CO2e, with positive contributions from all the business areas. Read more about Holmen’s climate benefit on pages 36–37. Climate benefit, million tonnes CO2e* 2024 2023 Storage in Holmen’s forests1) 2.13 1.58 Storage in wood and fibre products 0.44 0.44 Wood and fibre products replacing fossil material 4.44 4.39 Renewable electricity production replacing fossil energy 1.24 1.18 Bioenergy replacing fossil energy 0.84 0.86 Holmen’s emissions in scope 1–3 -0.77 -0.68 Total climate benefit 8.32 7.79 1) For 2024 the value of storage in Holmen’s forests has increased by 0.55 Mtonnes CO2e compared with 2023. This is mainly due to the fact that data for a new year is available in the National Inventory Report (NIR), which forms the basis for calcula- ting the net carbon dioxide sink in forest and land. *See page 104 for accounting principles. Outcomes energy production In 2024, the decision was taken to build Blisterliden Wind Farm, marking an ­investment of SEK 1.5 billion. Work to build the wind farm is in progress and it is planned to be operational in 2026. This investment will increase Holmen’s ­annual deliveries of renewable energy from water and wind by around 20 per cent to just over 2 TWh. Electricity production, MWh* 2024 2023 Own production of hydro and wind power 1 572 740 1 501 739 Electricity production at the mills 627 880 565 592 *See page 104 for accounting principles. Outcomes emission reduction targets As part of Holmen’s target to increase climate benefit, Group management set greenhouse gas emission reduction targets in 2021. Comparison is with 2019 levels. The targets have been approved by the UN-affiliated Science Based Targets­ initiative (SBTi) based on the ‘below 2 °C’ ambition. • 15 per cent reduction in CO2e emissions from production per tonne of pulp and paper by 2030 (scope 1 and 2). • 22 per cent reduction in CO2e emissions from transport per tonne kilometre by 2030 (scope 3). • 22 per cent reduction in CO2e emissions from forest machinery per tonne wood raw material by 2030 (scope 3). • Suppliers accounting for 35 per cent of emissions from purchased goods and services are to have climate targets in line with Science Based Targets by 2025. Own emissions and emissions from purchased energy in relation to the produc- tion of paperboard and paper have reduced more than the target since the base year 2019, thanks to reduced use of fossil gas at the mill in the UK and because purchased electricity has lower carbon intensity. Good progress has also been made on buying in from suppliers with climate targets. On the other hand, emis- sions from transport and from forest machinery have not reduced. The abolition of the reduction obligation in Sweden, which governs the inclusion of biofuels, has had a negative impact. Additionally, emissions from forest machinery have been affected by the fact that more work is being carried out in difficult terrain, which requires heavier machinery with higher fuel consumption to ensure safe and efficient harvesting and timber transport. Outcomes emissions targets* Base year 2019 2024 Targets 2030 Emissions per tonne of pulp and paper, kg CO2e/tonne pulp & paper 85.5 -47% -15% Emissions from transport, g CO2e/tonne km 23.6 14% -22% Emissions from forest machinery, g CO2e/tonne wood raw material 3.5 48% -22% Proportion of emissions from suppliers with climate targets N/A 37% 35%1) 1) The target for the proportion of emissions from suppliers with climate targets runs to 2025. *See page 104 for accounting principles. Energy consumption and mix Holmen uses large amounts of energy and the vast majority of the energy pur- chased and acquired is fossil-free. Only 3 per cent is fossil based, mainly from use of oil and diesel, while 97 per cent comes from fossil-free sources. Holmen does not use coal or coal products as fuel. During the reporting period, Holmen purchased or acquired a total 7.6 (7.4) TWh of energy. Paperboard production produces the majority of the energy needed in Holmen’s own mills. Manufactur- ing thermo-mechanical pulp at Holmen’s two paper mills is electricity intensive and the majority of the electrical energy used is bought in. During the reporting period, total electricity purchased or acquired amounted to 3.2 (3.0) TWh. Holmen­ buys 0.2 TWh a year from a wind farm on Holmen’s land at a price that is fixed until 2032. Total energy purchased or acquired per net revenue in 2024 was 336 (326) MWh/SEKm. 102    Holmen Annual Report 2024 Climate change Sustainability report Fuel purchased or acquired, MWh* 2024 2023 Fuel from coal and coal products N/A N/A Fuel from crude oil and petroleum products 160 180 130 760 Fuel from fossil gas 38 139 29 870 Fuel from other fossil sources 942 1 091 Fuel from renewable energy sources 4 259 113 4 185 000 Total fuel purchased or acquired 4 458 374 4 346 721 Electricity and heat purchased or acquired, MWh* Electricity from fossil sources 90 - Electricity from renewable sources 1 219 838 1 466 872 Heat from renewable sources 4 776 4 670 Electricity from nuclear power 1 954 453 1 609 773 Total electricity and heat purchased or acquired 3 179 157 3 081 315 Total purchased or acquired, MWh Fossil energy 199 351 161 721 Renewable energy 5 483 727 5 656 542 Nuclear power 1 954 453 1 609 773 Total energy purchased or acquired 7 637 531 7 428 036 Proportion of energy consumption and mix, % Share of fossil sources in total energy consumption 3% 2% Share of consumption from nuclear sources in total energy consumption 26% 22% Share of renewable sources in total energy consumption 72% 76% *See page 104 for accounting principles. Externally supplied energy Much of the energy consumed comes from Holmen’s own value chain. Holmen produces bioenergy in the form of solid biofuels, mainly comprising wood ­shavings, bark and branches and treetops. In total, Holmen supplied solid bio­ fuel amounting to 2.3 (2.6) TWh in 2024. During the same period, the mill in Workington­ supplied 0.1 (0.1) TWh of surplus electricity to the UK national grid. Additionally, approximately 0.1 (0.1) TWh of tall oil and 29 (25) GWh of district heating was supplied to neighbouring communities. In a normal year, Holmen produces just over 1.1 TWh of hydro power from 21 wholly or partly owned power stations. 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 Holmen­ has two wholly owned wind farms with normal annual production of approximately­ 0.6 GWh. In addition to self-generated wind power, Holmen purchases­ 0.2 TWh a year from a wind farm on Holmen’s land. Externally supplied energy, MWh 2024 2023 Own production of hydro and wind power 1 572 740 1 501 739 Externally produced wind power 155 477 155 052 Solid biofuels 2 311 161 2 586 947 Tall oil 138 140 145 690 District heating 28 879 25 000 Externally supplied energy from mills 143 836 127 331 *See page 104 for accounting principles. Gross scopes 1, 2, 3 and Total GHG emissions* Retrospective GHG emissions, thousand tonnes CO2e Base year 2019 2023 2024 2024/ 2023,% Scope 1 GHG emissions Gross scope 1 GHG emissions1) 90 54 61 13% Percentage of scope 1 GHG emissions from regulated emission trading schemes (%)    56 57 1%  Scope 2 GHG emissions Gross location-based scope 2 GHG emissions 42 73 202) -72% Gross market-based scope 2 GHG emissions 46 12 13) -96% Significant scope 3 GHG emissions Total Gross indirect (scope 3) GHG emissions 453 609 708 16% 1 Purchased goods and services 101 196 227 16% 2 Capital goods 80 116 150 29% 3 Fuel and energy-related activities (not included in scope 1 or scope 2) 31 40 584) 47% 4 Upstream transportation and distribution 57 55 72 32% 6 Business travelling 1 1 1 0% 7 Employee commuting 3 3 3 0% 9 Downstream transportation 180 199 197 -1% Total GHG emissions Total GHG emissions (location-based) 584 737 789 7% Total GHG emissions (market-based) 588 675 769 14% *See page 104 for accounting principles. 1) Emissions of methane and nitrous oxide at installations amount to 13 ktonnes CO2e in the reporting period. 2) Holmen updated the source of emission factors in 2024, which means the figures for 2023/2024 are not comparable. 3) In 2024 Holmen updated the method for calculating gross market-based GHG emissions. Emissions from the value chain for the production of market-based electricity were previously in scope 2. These emissions have been moved to scope 3, category 3, in line with the GHG Protocol. 4) Increased due to updated calculation method. From 2024, emissions in the value chain from electricity production are also included. Internal carbon pricing Today, Holmen applies an internal carbon pricing scheme, in which every ­material site bears the cost of its emissions at the market price for emission allowances. GHG intensity based on net revenue Total GHG emissions (location-based) per net revenue in 2024 were 34.7 (32.3) tonnes CO2e/SEKm. Total GHG emissions (market-based) per net revenue in 2024 were 33.8 (29.1) tonnes CO2e/SEKm. Holmen Annual Report 2024  103 Climate change Sustainability report Accounting principles Climate change Climate benefit, million tonnes CO2e Holmen updated the climate benefit calculation model in 2024 in line with Forestry Research Institute of Sweden (Skogforsk) report number 1187–2024. This is to align reporting with the upcoming ISO standard ISO 13391, a framework for value chain calculations for wood and wood-based products. In the table, the values for storage and substitution for 2023 have been re­ calculated in line with the new model in order to render the data comparable. Carbon storage in Holmen’s forests is based on growth of the volume of standing timber in line with harvesting calculations. Net storage in land 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, which is based on an inventory of 30 000 test areas over a 5-year cycle. Net storage in wood and fibre products is based on the IPCC’s methodology. According to the IPCC, fibre products have a half-life of 2 years and wood products 30 years. The methodology 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. Holmen’s wood products replace fossil-based materials such as concrete and steel, while paperboard and packaging paper replace other packaging, e.g. plastic packaging. Previous calculations assumed that all fibre products go straight to energy recovery. In the new calculation methods, the fibre products are divided into additional categories, where a calculation factor for avoided emissions has been identified for the categories paperboard and packaging paper. The calculation factor for wood and fibre products is taken from Skogforsk’s database of calculation factors. Bioenergy from branches and treetops and by-products from Holmen’s operations replace other, fossil, fuels. The calculation factor is based on data in the Renewable Energy Directive. Calculation of renewable electricity production from wind and hydro power that replaces fossil energy is not included in the climate benefit calculation model in line with Skogsforsk report number 1187–2024. Therefore, a separate calculation has been made, in which wind and hydro power are assumed to substitute for coal and gas power via electricity exports to Europe. The dis­ placement factor for wind power is based on data from the wind power climate benefit network, Nätverket Vindkraftens klimatnytta, and the calculation factor for hydro power is based on data from the Association of Issuing Bodies (AIB). Holmen’s emissions are calculated for scope 1, 2 and 3 in line with the GHG Protocol. Today the majority of Holmen’s emissions are generated from purchases of inputs and from transport to and from Holmen’s industrial facilities. More information on calculations and sources is provided at holmen.com. Outcomes emission reduction targets To monitor progress towards the emission reduction targets, GHG emissions (expressed as carbon dioxide equivalents, CO2e) are calculated annually, see outcomes on page 103. CO2e are divided into three categories: emissions per tonne of paper and pulp, emissions from transport and emissions from forest machinery, and are compared with the base year 2019. Holmen’s emission reduction targets do not include purchases of carbon credits to offset CO2e emissions. Emissions per tonne of paper and pulp are calculated according to the total amount of scope 1 and scope 2 (market-based) and parts of the emissions from scope 3, category 3, Fuel and energy-related activities, regarding emissions in the value chain for electricity production divided by the total amount of paperboard, paper and pulp produced. The transport target includes emissions from scope 3, category 3 Fuel and energy-related activities, category 4, Upstream transport and distribution and category 9, Downstream transportation and distribution. The proportion of emissions from suppliers with climate targets is calculated based on the amount of purchased goods that come from suppliers with climate targets. The data is based on first-hand contact with suppliers. Electricity production, MWh Electricity production from hydro and wind refers to production from wholly owned installations and Holmen’s share of partly owned installations. Fuel and energy purchased or acquired, MWh Total energy purchased or acquired in Holmen’s consolidated operations, reported by energy source and referring to electricity, heat and fuel consumption. Does not include recovered energy in Holmen’s processes. Externally supplied energy, MWh Only refers to supplied energy. Electricity production from hydro and wind refers to production from wholly owned installations and Holmen’s share of partly owned installations. District heating refers to supplied heat energy from Hallsta Paper Mill and Iggesund Mill. Externally supplied electricity refers to electricity supplied by Workington Mill. Greenhouse gas emissions ’000 tonnes CO2e Total direct and indirect (scope 1 and 2) greenhouse gas emissions (GHG) for Holmen’s consolidated operations. Emissions are reported for the whole Group. Greenhouse gas emissions have been calculated based on the principles in the GHG Protocol, in line with the principle of operational control. Direct GHG emissions (scope 1) are calculated based on emissions of carbon dioxide (CO2) from incineration of fossil fuel, emissions of methane (CH4), nitrous oxide (N2O), refrigerants (HFCs) and emissions of fossil carbon dioxide in conjunction with preparation and handling of biofuels. The reported direct emissions are equivalent to scope 1 emissions in the GHG Protocol. All reported greenhouse gas emissions have been recalculated as carbon dioxide equivalents (CO2e). Biogenic emissions amounted to 1.7 million tonnes of CO2 in 2024. The effect of the different gases is calculated in line with the following GWP (Global warming potential): 1 kg carbon dioxide (CO2) = 1 kg CO2e 1 kg methane (CH4) = 28 kg CO2e 1 kg nitrous oxide (N2O) = 298 kg CO2e Indirect GHG emissions (scope 2) are calculated based on Holmen’s electricity consumption. Reported indirect emissions include GHG emissions from purchased electricity and are equivalent to scope 2 emissions under the GHG Protocol. Holmen reports indirect emissions in line with both the location-based method and the market-based method. Location-based emissions in scope 2 are calculated using emission factors from the Association of Issuing Bodies (AIB). Market-based emissions in scope 2 are calculated using emission factors based on environmental product declarations (EPDs) from Vattenfall. Indirect GHG emissions (scope 3) are reported for emissions related to purchased goods and services, capital goods, fuel and energy-related activities, upstream transport and distribution, business travel, employee commuting and downstream transportation. Calculating and reporting of Holmen’s scope 3 emissions follow the GHG Protocol’s guidance for calculating scope 3 emissions. Holmen’s scope 3 emissions largely comprise purchased goods and services and downstream transportation. 104    Holmen Annual Report 2024 Climate change Sustainability report Pollution Today the air in Europe is cleaner than it was half a century ago when the EU introduced stricter air quality controls in the form of preventive actions and measures to combat environmental pollutants. Access to clean water is vital to human health and well-being. Although levels of aquatic pollutants fell between 1990 and 2010, more than 50 per cent of the reported surface water in Europe has failed to attain good ecological status. Actions at European, national and local level have helped to reduce pollutants from the transport, industry and energy sectors. However, studies of real-time measurements show that air pollution still constitutes a risk to the environment and human health. Air quality in Sweden is good, also at regional level at Holmen’s material sites, but pollutants to air and water can spread a long way and therefore are not only regional impacts. Holmen’s operations cause emissions to air and water and every material site requires an environmental permit for industrial production. The environmental permits set out approved emission levels for different substances and the total environmental impact of the operations is regulated in the individual permit process under the Swedish Environmental Code and the Industrial Emissions Ordinance, which states that the best available techniques (BAT) must be used. The environmental permit process works in a similar way in Sweden and the UK. Impact, risk and opportunity management Description of the processes to identify and assess material pollution- related impacts, risks and opportunities Holmen’s impact on the environment and human health is established and assessed in the environmental permit process. When an operation applies for an environmental permit, the material site must identify its actual and potential pollution-related impacts. This is done in a statutory process with the stated supervisory authority. In Sweden, this is the responsibility of the County Administrative Board. Where environmentally hazardous operations are carried out, consultation documentation is produced describing at an overarching level how changes in the operations might impact on affected communities and the environment. Information in the consultation documentation forms the basis for a delimitation consultation where authorities concerned and the general public are given an opportunity to ask questions and voice opinions on the operations. Once the consultation is complete, a consultation report is written and the operation applying for a permit is given the opportunity to adapt its application in response to the concerns of the various parties. The next step in the permit process is for the applicant to produce a technical description and an environmental impact assessment. These two documents form the basis of the application for an environmental permit. The technical description must set out how the applicant plans to implement changes at the site. The environmental impact assessment is extensive and requires investigations of the expected impact on air, water and soil, noise impacts, waste management and risk assessments. Biological studies may be required to investigate pollution-related impacts in aquatic areas at the site location, and permit requirements may include demands for follow-up studies. The permit application is then sent to the Land and Environment Court, where the applicant requests the desired conditions for its operations. When the Land and Environment Court considers that the application is complete, the application is circulated to a large number of government agencies, affected municipalities and other stakeholders for consultation. There may be several rounds of consultation in which statements on the application can be made, as the parties may have different views on which conditions should be imposed on the operations. Next there is a negotiation in the Land and Environment Court with all parties present, before a decision is made on the case. The parties involved in the process are also able to appeal against the decision to the Land and Environment Court. Holmen’s material risks of pollution of air, water and land are linked to legislation, technology and reputation. Production disruptions can cause breaches of the emission conditions set for the material site and have negative environmental impacts. Breaches of the conditions not only cause reputational damage but may, if they occur repeatedly, also lead to the supervisory authority deciding that the environmental permit must be reassessed. Updated conditions regarding best available techniques (BAT conclusions) in line with the Industrial Emissions Ordinance can mean that Holmen’s material sites do not meet approved emission levels and may require investment. Under Swedish law, Holmen also has commitments to investigate and where necessary remediate discontinued material sites whose historic operations led to pollution of land and water. Material sites with a permit to run environmentally hazardous operations are checked regularly by the supervisory authority in the form of inspection visits. At the inspection, any incidents that have occurred which have been reported to the authority are discussed, including their environmental impacts, if any. In cases where incidents lead to non-compliance with permit conditions, the operator may be charged an environmental penalty. Neighbouring communities are affected by Holmen’s operations and where the community has concerns, there are processes in place for every material site to receive and handle questions. For more information about contact channels, see the section on Affected communities on page 115. Policies related to pollution Holmen’s industrial installations are under strict environmental controls. Besides Holmen’s environmental and energy policy, risks and pollutants are regulated by acts and ordinances that every material site with environmentally hazardous operations must comply with. A complete list of the acts and ordinances that affect operations must be available at each material site. Holmen’s environmental and energy policy describes how the material site is to follow applicable standards and states that they must be ISO certified, with the aim of identifying, prioritising and tackling the operation’s environmental impact. In its operations, Holmen is to work in line with the precautionary principle, such that harm and detriment to human health and the environment are prevented, hindered or mitigated. In the event of process disruptions, the environment takes precedence over production. In ongoing and discontinued operations, the environmental impact must be acceptable to humans and the environment. Investment needs must be taken into account before changes to environmental permits. The policy covers the whole Group. The President and CEO has overarching responsibility for the issues covered by the environmental and energy policy and these are delegated in writing in one or more steps. All Holmen’s material sites have ISO-certified environmental management systems. The purpose of ISO certification is to aim to constantly improve the environmental situation at the site location. Certification differs from the environmental permit in that the permit seeks to ensure an acceptable level for health and the environment, while the environmental management system seeks to develop the work of the material site on environmental matters. Certification means that environmental work must be part of all processes, from policies and procedures on environmental work to management responsibility and risk analyses. Certification requires internal audits to check that the criteria of the ISO standard are met. Audits are carried out regularly by external experts to check that the material site is complying with the certification. Environmentally hazardous process chemicals are used at several of Holmen’s site locations. To avoid incidents and emergencies, the Seveso legislation is in place setting out actions to prevent and limit the consequences of serious chemical accidents. The environmental permits for the site locations concerned contain conditions covering the handling of such process chemicals, and regular exercises are carried out to ensure that the operation complies with the legislation. Actions and resources related to pollution The environmental management system sets the framework for constant improvement efforts at every material site and requires analysis of key environmental aspects. The analysis results in an environmental aspects register which addresses the most important environmental matters. Based on this register, every material site must set up environmental targets, which may require actions to achieve. During the reporting period, actions regarding water treatment have been taken at the industrial installation in Workington and actions regarding dust treatment have been carried out at Linghem Sawmill. An operation must prevent and control pollution so as to do no significant harm under environmental objective 4 of the EU’s Taxonomy Regulation. For Holmen’s taxonomy activity 1.3 Forest management, work is regulated by the Swedish Forestry Act, in which nature conservation and environmental values must be taken into consideration. There are also regulations and general advice on handling pesticides and nitrogen fertiliser for Holmen’s forest certification. For activity 4.8, Electricity generation from bioenergy, Holmen’s industrial installations are below the permitted thresholds in line with best available techniques. Under Swedish law, Holmen also has commitments to investigate and, where necessary, remediate discontinued material sites. In consultation with the environmental authorities (County Administrative Board or municipality), 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 2024, studies were in progress at different stages regarding the former sawmill in Stocka, the sulphite mills at Holmen Annual Report 2024  105 Pollution Sustainability report Strömsbruk, Domsjö, Loddby and Mariannelund, the paper mill at Silverdalen and the groundwood mill at Bureå. The former sawmill area in Lännaholm was remediated during the reporting period. Metrics and targets Targets related to pollution Holmen’s overarching objective is for operations to be run within the permits awarded and developed within the management system framework. The common environmental objective for Holmen’s material sites is to restrict emissions to levels set in conditions for environmental permits and in line with best available techniques. Based on the analysis every site carries out regarding key environmental aspects in its operations, targets must also be set for prioritised environmental matters. Pollution of air, water and soil In 2006, a European pollutant emissions register was set up to demonstrate progress in reducing emissions and to provide the public with easily accessible information on environmental conditions and environmental trends in Europe. The register enables social, economic and health trends to be monitored and analysed in relation to emissions. The threshold for different pollutants is constantly updated to capture at least 90 per cent of emissions of every pollutant from operations with a duty to report. Holmen’s operations are covered by this reporting obligation, which means that emissions to air, water and soil that are higher than the threshold for the pollutant must be reported to the register on an annual basis. The table below shows emissions from Holmen’s sites where emissions were higher for different parameters than the stated threshold value during the reporting period. During the year, there were 14 exceedances relating to emissions to air and water. Action was taken in all cases. Emissions to air, tonnes 2024 2023 Sulphur dioxide (counted as sulphur, S) 59 54 Nitrogen oxides 946 892 Particulates 62 53 Methane 45 42 Nitrous oxide 39 37 Fossil carbon dioxide, ’000 tonnes 46 41 Biogenic carbon dioxide, ’000 tonnes 1 731 1 676 Emissions to water, tonnes 2024 2023 AOX (chlorinated organic matter) 34 36 Nitrogen 207 182 Phosphorus 20 18 COD (organic matter), ’000 tonnes 17 17 Suspended solids (SS), ’000 tonnes 3.0 3.8 The environmental permits contain conditions that require self-inspection programmes at the installations. These inspection programmes describe what is to be measured, at what times and by what method. The self-inspection programme must be approved by the supervisory authority. Where conditions require daily checks there are accredited laboratories at Holmen’s production faclilities which perform these analyses. There are also automatic measurement systems that are constantly calibrated, as well as external accredited laboratories used for certain analyses. What all the analyses that are to be conducted under the self-inspection programme have in common is that they are performed in line with internationally adopted standards. Additionally, there are pollutants that require periodic measurement. Finally, there are measurement methods calculated based on public pollution factors, which refer to emissions of metals to air from boiler thermal input. Complying with conditions laid down in permits requires significant efforts in collecting and measuring data. Each site has processes and procedures for measuring pollutants in line with the self-inspection programme stated. Data collected is used for internal and external reporting. Holmen’s operations are covered by the Industrial Emissions Ordinance, which seeks to reduce pollutants by applying the best available techniques, known as BAT conclusions. This applies to all industrial installations in the EU, and in the UK, which has implemented legislation on best available techniques. In Sweden, best available techniques apply in parallel with environmental permits. BAT conclusions with emission levels, BAT Associated Emission Level (BAT-AEL), refer to emission levels and are stated as a range where the upper level for emissions is binding, unless special derogation has been granted, and the lower level shows emissions of the best installations in Europe. Holmen’s UK site in Workington has been granted dispensation regarding emissions to water. Investments in a new water treatment plant have been made but there are still problems with exceeding levels at the end of the reporting period. The exceedance is not judged to have any significant impact on the environment. The site is constantly in contact with the supervisory authority in the UK. The table below shows Holmen’s site locations which, besides running operations that require a permit, also comply with the Industrial Emissions Ordinance and its associated conditions. It is also at these installations that emissions of pollutants to air, water and soil occur. 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 actions to enable continuous improvement in the work on the various management systems. Certificates can be viewed at holmen.com. Environmental permits and management system certification Certification Production facilities1) Environmental permits Environment ISO 14001 Energy ISO 50001 Quality ISO 9001 Occupational health and safety ISO 45001 Iggesund Mill2,3) 2018 2001 2005 1990 2016 Workington Mill3) 2022 2003 2015 1990 2005 Hallsta Paper Mill 2000 2001 2005 1993 2012 Braviken Paper Mill 2023 1999 2006 1996 2015 Iggesund Sawmill 2014 1999 2006 1997 2017 Braviken Sawmill 2010 2011 2011 2011 2017 Linghem Sawmill4) 2003 2023 2023 2020 Bygdsiljum Sawmill4) 2018 1999 2022 2023 Kroksjön Sawmill4) 2020 2005 2022 2023 1) Holmen Forest is certified under ISO 14001 and ISO 45001 and forest operations have forest management and chain-of-custody certification. All production installations 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, notifiable operations 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 business area Wood Products’ ISO 9001 certificates. This is expected to be completed in 2025. 106    Holmen Annual Report 2024 Pollution Sustainability report Biodiversity Strategy Transition plan and consideration of biodiversity and ecosystems in strategy and business model Holmen owns 1.3 million hectares of land in Sweden, almost 1.2 million hectares of which is productive forest land. The large forest holding is the basis of opera- tions, where at Holmen’s own industrial sites, the growing trees are refined into everything from wood for climate-smart building to renewable packaging, maga- zines and books, while at the same time hydro and wind power are generated on Holmen’s own land. Approximately half of the wood required by its industrial op- erations comes from Holmen’s own forests, while other wood is bought in from private forest owners. Holmen’s nature conservation strategy combines active and sustainable forestry with protecting the diversity of habitats and species. The strategy has been developed in partnership with other forest companies and Swedish government agencies to ensure robust and adaptable nature conserva- tion that addresses biodiversity and ecosystem-related risks. The nature conservation strategy is designed in line with the Swedish nature conservation model in which consideration is taken at several levels – from ­ecological landscape planning to taking individual stands and trees into consid- eration. Local conservation plans are used to identify and protect areas with high conservation value and in the managed forests, conservation is adapted to needs and the conditions of each stand. The basis for this work is the forest sector’s common objectives for good environmental conservation, which are produced jointly with the Swedish Forest Agency based on current forest policy and ­industry knowledge and Sweden’s targets in forest and environmental policy. Holmen’s­ nature conservation strategy thus encompasses both identifying and managing areas of high conservation value and incorporating nature conserva- tion into active forestry. In total, approximately 20 per cent of Holmen’s forest area is used for different types of environmental purposes. This includes voluntary set-aside productive forest land, tree-bearing non-productive land which is protected by law, and environmental­ conservation in the managed forest. Holmen’s environmental conservation also includes renewable energy generation from wind and hydro power, which can impact biodiversity and therefore requires specific assessment processes and action plans. Material impacts, risks and opportunities and their interaction with strategy and business model Holmen’s business depends on healthy ecosystems and the ability to pursue ­active forestry. Growing requirements to set land aside for purposes other than forestry can lead to lower harvests and pose a business risk. In the same way, legislation on land and water use can inhibit the expansion and generation of ­renewable energy, which can affect Holmen’s opportunities to play its part in the transition to a fossil-free energy system. Holmen has identified two main material impacts, risks and opportunities ­related to biodiversity and ecosystems: the impact of forestry on the local envi- ronment and water, and the impact of hydro power generation on landscapes and aquatic environments. Potential local impact on biodiversity from Holmen’s production installations is described under Pollution. Impacts of forestry on and dependency on biodiversity Managing the forest can affect ecosystems and forest-dwelling species which are dependent on different habitats for their survival. Shorter times from ­regeneration to harvesting can, for example, lead to a loss of habitats if there is a reduction in the number of old and dead trees. Forestry can also affect the structure of the forest landscape by creating a more fragmented landscape with homogenous forest stands. In some cases, this can mean that species depend- ent on larger, connected and richly varied forests find it more difficult to spread and find suitable habitats. Modern forest management has also led to a reduc- tion in natural disruption in the form of forest fires, which impacts negatively on some species as forest fires are a natural part of the ecosystems. Systemic and physical risks related to biodiversity are closely interwoven with climate change. Higher temperatures and changing precipitation patterns in- crease the risk of pests such as fungi and insects, for example, which threaten the growth and quality of the forest. See the section on Climate change for more information about the impact of climate change. The impact of energy production on biodiversity Holmen’s hydro power production affects water flows, which can disrupt natural habitats for fish and other aquatic organisms. Water regulation can also affect the reproduction and migration of species dependent on free migration routes in watercourses. Wind power development can lead to fragmentation of habitats and disturb species sensitive to changes in their habitat. At the same time, areas surrounding wind turbines can benefit some species, such as plants and insects, by creating more open environments with more light and more varied vegetation. Impact, risk and opportunity management Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities Holmen works systematically to assess impacts, risks and opportunities for bio- diversity and ecosystems, both in forestry and in energy production. The impact of forestry on and dependency on thriving ecosystems is mainly determined by ecological landscape planning and nature conservation assessments, while en- vironmental impact assessments and inspection programmes are used to under- stand the impact of energy generation on biodiversity. Wind and hydro power are also regulated by extensive permit processes that include impact on biodiversity. Process to assess the impact of forestry on biodiversity Ecological landscape planning and nature conservation assessments are impor- tant tools in Holmen’s assessment of the impact of forestry on biodiversity and ecosystems. Landscape planning maps the existing environmental assets and local conservation plans identify areas with a lack of key habitats. The plans are constantly updated, providing a tool for understanding the impact of forestry over time. Nature conservation assessments supplement landscape planning by providing a detailed picture of the conditions in specific forest areas. Nature con- servation assessments identify environments and structures that are important to biodiversity such as older forests and dead wood. These assessment criteria help Holmen to make informed decisions on how the forests are to be managed over the long term so as to protect existing natural assets and create new ones. Holmen also uses the Swedish Species Information Centre as a tool for assess- ing the impact of forestry on biodiversity and ecosystems. The Swedish Species Information Centre publishes the Red List, which describes the state of species in Sweden, focusing on species that are declining or under threat. Using the Swedish Species Information Centre’s data enables Holmen to identify and ­protect environments and structures that are important for the conservation of threatened species. Holmen has also established four Knowledge Forests to increase knowledge about the impact of forestry. Holmen’s Knowledge Forests are land specifically designated to collect and pass on knowledge about the forest. The Knowledge Forests are carefully selected for their unique biological conditions and are used for research on the ecosystem dynamics and the impacts of forestry. Process to assess the impact of energy generation on biodiversity Environmental impact assessments are conducted to investigate the impact of hydro power generation on aquatic ecosystems, including fish migration routes and water quality. These assessments follow the national plan for reviewing ­hydro power plant permits, where biodiversity is weighed against other societal benefits. Follow-up programmes are implemented to monitor how water flows and ecosystems are affected during power plant operation. The permit process for new wind energy development begins with extensive ­environmental impact assessments, where the natural environment is surveyed to identify habitats and species that are particularly sensitive to wind power. To ensure compliance with the environmental conditions, operations are ­monitored via inspection programmes that incorporate monitoring the impact of operations on birds, bats and other wildlife. Policies related to biodiversity and ecosystems 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 discontinued operations, the environmental impact must be acceptable to humans and the environment. Holmen’s forestry is to be conducted with the aim of achieving high-volume, ­sustainable production of raw material, so that the growing forest and its prod- ucts make a positive contribution to the climate. The long-term productive ­capacity of the soil must be safeguarded, aquatic environments protected and historically valuable heritage environments preserved. Furthermore, the policy states that Holmen’s forests are to be managed responsibly in a way that ensures the long-term survival of native species in the forest landscape. Similarly, the ­impact of wind and hydro power on biodiversity is to be taken into account. Holmen Annual Report 2024  107 Biodiversity Sustainability report Holmen’s material sites are certified under the environmental management ­system ISO 14001. Furthermore, forest operations have forestry and chain-of- cust­ody certification. All Holmen’s production facilities at which wood raw material is used have chain-of-custody certification. Hydro power generation is regulated by water judgements, which set threshold values for water levels and rivers. Due diligence is to ensure that Holmen’s raw materials and products are de- forestation free, to comply with the EU’s upcoming Deforestation Regulation. The origin of all wood must be traceable. Wood purchasing must also comply with rules and guidelines from the Swedish Forest Agency and the relevant ­certification system where applicable. Environmental conservation objectives are observed in harvest contracting in Sweden unless otherwise agreed. The requi­re­ments of the Swedish Forestry Act are the minimum level of environmen- tal conservation when buying wood. Before wood is bought from private forest owners in the form of felling rights in Sweden, the area’s conservation value must be assessed and if a site has high conservation value, additional information must be obtained before a decision to purchase is made. Holmen will not buy 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 primary 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 human rights are actively impeded. • Are High Conservation Value Forests. Actions and resources related to biodiversity and ecosystems Holmen’s work for biodiversity is based on a mitigation hierarchy, which means seeking to avoid negative impacts on biodiversity, ecosystems and ecosystem services. When this is not possible, actions are taken to minimise impact, partly by creating or improving habitats. Holmen’s nature conservation work is founded on three elements: environmental considerations in managed forests, conserva- tion management and voluntary set-asides. Environmental considerations in managed forests Each year, Holmen invests approximately SEK 200 million in silviculture and ­constantly works to improve everything from seedlings to nature conservation through research, development and training. Several actions are carried out as part of active forestry to preserve and strengthen biodiversity. High stumps and dead wood are saved to provide ­habitats for wood-living insects and fungi. Buffer zones along watercourses are preserved to protect aquatic species and improve water quality. During harvest- ing, buffer zones are also left with trees and bushes intact to protect biodiversity. Large trees, both living and dead, are left as important nesting and feeding sites for birds and insects. Conservation management As a natural part of forestry, Holmen also carries out actions to develop or strengthen nature conservation, for example by burning forests or removing ­invasive spruce trees to benefit broadleaves. Prescribed burnings are carried out under controlled conditions to create fire-damaged timber, an important habitat for many threatened species. Holmen also works to restore wetlands and create richly varied forest landscapes. Every year, Holmen carries out ­habitat management on approximately 400 hectares to improve biodiversity and help create healthy, resilient ecosystems. Voluntary set-asides Holmen works to increase biodiversity and strengthen ecosystems by perform- ing actions in formally protected forest and voluntary set-asides. In formally ­protected areas, such as nature reserves, natural processes are allowed to ­continue unhindered, benefitting species that require untouched forest. Holmen has identified more than 9 000 areas that have voluntarily been chosen not to be harvested as they have high conservation value. The fact that these areas are set aside voluntarily or managed for purposes other than wood production sees ­Holmen relinquishing approximately 9 per cent of potential annual wood volume. The set-aside forests are spread across all of Holmen’s forest holdings. Energy generation actions When generating hydro power, aquatic ecosystems are to be preserved by adapt- ing water flows and protecting fish migration routes. Hydro power generation complies with strict environmental permits, known as water-rights court ruling, to ensure­ that impacts on ecosystems are minimised. Environmental impact assessments­ are carried out to assess the impact on aquatic species, and ­inspection programmes monitor water quality and ecosystem health. When developing wind power, the actions include environmental impact assess- ments, where surveys identify sensitive species and environments that may be affected. This can lead to adapting the location of turbines to minimise impact on birds and bats, and adapting forestry in surrounding areas. Furthermore, in- spection programmes are set up to monitor the impact of operations and ensure compliance­ with environmental requirements over time. Metrics and targets Targets related to biodiversity and ecosystems and impact metrics ­related to biodiversity and ecosystems change Holmen’s biodiversity and ecosystem target linked to forestry is that all naturally occurring species can thrive in the forest landscape in the long term. Biodiversity is affected by several factors, but in order to monitor developments and evaluate actions carried out, Holmen bases its work on inventory data from the Swedish National Forest Inventory at the Swedish University of Agricultural Sciences (SLU). Five indicators have been identified showing how a selection of important forest habitats are developing: • Area of old forest • Area of old forest with specific indications of nature conservation value (SIN) • Volume of dead wood per hectare • Volume of large broadleaves per hectare • Volume of broadleaves per hectare The indicators represent different types of biotopes and substrates which to- gether provide a broad picture of the conditions for biodiversity on Holmen’s land. When choosing indicators, Holmen has also taken into account the Swedish Forest Industries Federation’s biodiversity targets and has conducted a stake- holder dialogue to adapt the choice of indicators and make them comparable with other Swedish forest companies. The ambition is for the selected indicators to show a positive trend over time. Because nature conservation is integrated in Holmen’s forestry strategy, the ­biodiversity indicators have developed positively over the past 30 years. This is verified by statistics from independent surveys carried out by the National Forest Inventory at SLU. The target for Holmen’s energy production is to increase the generation of ­renewable energy on its own land with no negative impact on biodiversity. The boundaries for acceptable impact on affected ecosystems are determined by the environmental permit concerned. Accounting principles Biodiversity indicators Data collection is based on sample areas in Holmen’s own holdings of productive forest land. To obtain a representative reference and current value, the values are based on five-year rolling averages. 1996 is the first year in which the Swedish­ National Forest Inventory was able to report a five-year average,­ ­following the revision of the Forestry Act in 1993. The current value for 2021 is the most recent available five-year average. Old forest is defined as forest over 140 years old in northern Sweden and over 120 years old in southern Sweden. Old forest with specific indications of nature conservation value (SIN) cover high stand age, large trees, dead wood and strati- fication. The first year with an available five-year average for SIN is 2005, which is why SIN has a different reference value. Biodiversity indicators Indicator Holmen’s starting point 1996 Holmen’s current situation 2021 Holmen’s development Old forest, proportion of productive forest land 4.5% 6.3% 41% Old forest with SIN, proportion of productive forest land 2% 3.5% 73% Dead wood, m3 growing stock, solid over bark/ha 5.6 10.2 81% Broadleaves, m3 growing stock, solid over bark/ha 14.4 16.5 15% Large broadleaves (> 35 cm) m3 growing stock, solid over bark/ha 0.8 1.2 61% 108    Holmen Annual Report 2024 Biodiversity Sustainability report Resource use and circular economy Impact, risk and opportunity management Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities Holmen’s business model is circular. The forest ecocycle provides a renewable raw material that is refined at Holmen’s own industrial sites. As the lifecycle of the products draws to a close, they can be recovered and come back to life in a new form, or be put to use as bioenergy. Holmen’s environmental management system identifies relevant environmental aspects linked to resource use, waste management and material flows for the respective material site. This covers ­analysing the products’ lifecycles to assess reuse opportunities and whether and how the material can be recovered, reworked or reused in production. The assessment seeks to determine which environmental aspects have a significant or long-term impact and to identify the risks and opportunities that can be linked to material environmental aspects. Holmen has identified two material impacts, risks and opportunities related to resource use and circular economy, which are described below. Production of renewable products In producing products from renewable raw material, which are designed to be reused and recovered, Holmen contributes towards a circular economy and a functioning recovered paper system. Where downgraded material arises in the production process, other potential areas of use are identified. Waste generated by industrial production Holmen uses by-products and waste as raw materials in its own processes, reducing­ the need for new raw materials and reducing the amount of waste that needs to be dealt with. By-products and waste that cannot be dealt with in Holmen’s­ own processes are sold to external partners. The use of chemicals is necessary in the production of paperboard and paper to give products specific characteristics. Some of these chemicals form waste, some of which is classified as hazardous waste, which can pose environmental risks. Policies related to resource use and circular economy Holmen’s environmental and energy policy covers resource use, chemicals, by-products and waste. The environmental and energy policy states that envi- ronmental and energy work is to be characterised by a holistic approach where the Group’s forests, processes and products are part of a natural ecocycle. The policy further states that raw materials must be used efficiently, waste must be minimised, by-products arising in operations must be dealt with and used for different­ purposes and constant improvements must be sought. Forestry is to be conducted with the aim of achieving high-volume, sustainable production of wood raw material, so that the growing forest and its products make a positive contribution to the climate. Forests should be managed respon- sibly in a way that ensures the long-term survival of native plants and animals in the forest landscape. The origin of all wood must be traceable. Actions and resources in relation to resource use and circular economy Holmen works with customers and industry organisations to develop products and processes that can make recycling easier and do their bit for the circular economy. The greatest value added governs what is manufactured from the different­ parts of the wood raw material. Sawing and drying are optimised at Holmen’s­ sawmills to minimise waste. Investments in expanded capacity and processing have increased Holmen’s production of wood products and timber products for construction and joinery. During the reporting period, an investment has been made in timber sorting and a new planing mill at Iggesund Sawmill, which will increase the sawmill’s capacity by 20 per cent. In the same period, Holmen has also invested in increased capacity and a broader palette of paper products at Braviken Paper Mill. Holmen has carried out several projects to identify alternative areas of use for the waste that arises in the production process. Following treatment, some waste, such as biological and chemical sludge from treatment plants and green liquor sludge from the sulphate pulp process, can be used as a soil improver, road construction material or to cap landfill sites. As a result of efforts to find alternative­ areas of use, the amount of waste sent to landfill has reduced and now constitutes only 2 per cent of the waste that arises at the production ­facilities. Every year, contracts are procured with commercial recycling companies to deal with the waste that arises and the Group works constantly to separate different waste fractions to ensure that they can be recovered and used for meaningful material purposes as much as possible. Constant work is carried out to monitor chemicals harmful to health and the ­environment, with a focus on chemicals containing substances listed in REACH (Registration, Evaluation, Authorisation and restriction of Chemicals). REACH also sets requirements on which substances hazardous products are allowed to contain, which are followed up regularly. Metrics and targets Targets related to resource use and circular economy Holmen’s operations are to be run within the permits awarded and developed within the management system framework. The wood products business is to grow through products and solutions for sustainable building, and the paper- board and paper business is to advance by developing and offering renewable products made from fresh fibre. The climate benefit that Holmen’s wood prod- ucts and paperboard and paper products contribute is reported in the section on Climate change, see page 101. Holmen has no specific measurable targets for resource use and circular ­economy, and instead manages this work based on the Group’s environmental and energy policy. Continuous monitoring of relevant key figures is carried out for every site and at Group level to follow up this work, providing an overview of the operation’s amounts of waste, resource use and other environmental factors. Regular data collection and analysis is used to monitor developments, making it possible to identify trends, nonconformities or potential negative changes. Corrective action can be taken if necessary. Chemical handling is reviewed ­regularly by an external partner conducting periodic inspections, supervisory visits and audits, and risk analyses initiated by the site itself. Use of chemicals is reported to the supervisory authority annually. Holmen conducts its operations within the framework of environmental permits, which means that each site location must comply with specific environmental requirements and conditions laid down by the Land and Environment Court. Each site annually submits environmental reports containing information about resource use, waste, actions and any noncompliances. Environmental impacts such as resource use and waste are monitored and measured within the framework of the site location’s environmental manage- ment system. The process includes regular internal and external audits and monitoring environmental aspects and impacts to ensure compliance and ­identify improvement potential. Resource outflows Products and materials The forest ecocycle produces a renewable raw material which is refined into products that Holmen’s customers can refine further in their turn. As the lifecycle draws to a close, the products can be reused or recovered and come back to life in a new form, or be put to use as bioenergy. Wood products can be reused as other wood products, while fresh fibre-based paperboard and paper products that are used for packaging, books and magazines and then recycled feed a re- covered paper system that constantly needs topping up with fresh fibre in order to function. In this way, Holmen’s products based on a renewable raw material contribute to a circular material flow. Holmen works with customers and industry organisations to develop products and processes that can make recycling easier and do their bit for the circular economy. Holmen also uses its large land holdings to produce renewable energy from wind and water. Read more about Holmen’s products on pages 18–33. Products 2024 2023 Wood products, ’000 m3 1 418 1 447 Paperboard, ’000 tonnes 575 462 Paper, ’000 tonnes 932 888 Market pulp, ’000 tonnes 76 76 Hydro and wind power, MWh 1 572 740 1 501 739 Electricity production at the mills, MWh 627 880 565 592 *See page 110 for accounting principles. Holmen Annual Report 2024  109 Resource use and circular economy Sustainability report Material use rate 2024 2023 Wood, million m3sub 5.93 5.94 Purchased pulp, ’000 tonnes 84 71 Plastic granules/foiling material, ’000 tonnes 3.1 2.6 Chemicals, ’000 tonnes 131 139 Filler, pigment, ’000 tonnes 199 184 Water use, million m3 69 68 Water use Holmen uses surface water from lakes and watercourses to transport and wash fibres at the Group’s paperboard and paper mills. Water is also used for 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 69 (68) million m3 in the reporting period. Of the water used, approximately 4 per cent of the raw water intake is consumed by vaporisation or captured in prod- ucts. 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 Holmen’s production installations is good and amounts of precipitation are high as a rule, keeping watercourses topped up all year round. Resource efficiency in the forest Holmen manages the forest to produce as much wood as possible, and the ­greatest possible value added governs what is made from the different parts of the tree. In the first instance, planks and boards are sawn from the harvested tree. Half of the harvest consists of large logs that are used to produce construc- tion 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. A large proportion of the wood raw material comes from the local area around Holmen’s Swedish site locations. Harvests from Holmen’s own forests cover just over 45 per cent of wood needs. The remaining amounts are bought in, mainly from private forest owners in Sweden. Only a small proportion is imported. For the paperboard mill in Workington, in the UK, approximately a quarter comes from state-owned forests while the remainder is bought in from private forest owners. All wood purchasing is subject to chain-of-custody requirements. Waste and waste streams Holmen strives to minimise the amount of waste it produces and to use the high- est proportion possible. Solid waste mainly comprises process waste, packaging, metal waste and electronic waste, where the greatest proportion is process waste, which in turn comprises green liquor sludge, chemical sludge, lime mud and fly ash. The process waste is largely recycled by being used as a raw material in other processes, such as in the production of construction material, or by ­being sent for energy recovery. The single largest amount of waste is waste sent for energy and material recov- ery. Only a small amount goes to landfill. Of total materials supplied, only 2 per cent becomes waste sent to landfill, while 98 per cent goes to be recovered for energy and material purposes. All sites separate waste, and employees and contractors are constantly trained in waste procedures. Holmen also works with external parties to reuse and ­recover end-of-life electronics such as computers, mobile phones and monitors. Only a small proportion of the total waste is hazardous waste, which includes oil, paint, grease, solvents and electronics. The hazardous waste is dealt with by authorised recycling companies. Some waste fractions are recycled and others are destroyed under controlled conditions. Waste, tonnes 2024 2023 Hazardous waste 1 515 1 501 To energy recovery 553 421 To material recovery 898 958 To landfill 64 122 Non-hazardous waste 101 257 92 406 To energy recovery 19 067 14 131 To material recovery 80 289 77 101 To landfill 1 901 1 174 Total waste 102 772 93 907 Accounting principles Products Reported amount of product refers to sold volume. Data is collected manually from production reports at unit level and compiled at Group level. Hydro and wind power refers to self-generated production from wholly and partly owned power plants. Material use rate At Group level, wood consumption is computed net, taking into account internal deliveries, which include roundwood and pulp chips from the sawmills. Chemicals and fillers are stated as dry substance. Waste Waste generated by Holmen’s consolidated operations, reported after waste management. The amount of waste data is collected from the waste reporting conducted by the production units in line with the Swedish Environmental ­Protection Agency’s environmental reporting regulations. Waste is measured at weighed weight and data is largely provided by the ­supplier who deals with the waste. 110    Holmen Annual Report 2024 Resource use and circular economy Sustainability report Own workforce Strategy Material impacts, risks and opportunities and their interaction with strategy and business model Holmen has identified material impacts, risks and opportunities related to its own workforce. Industrial production involves a risk of accidents Work in sawmills and paperboard and paper mills, and at power stations and ­ in forests are all jobs with an inherent risk of accidents. Incidents and accidents in the workplace have an effect on human life and health. This can also lead to production disruptions and increased costs. Workplaces where accidents occur can impact on Holmen’s opportunity to attract and retain a workforce. Employees working in production are those who are most at risk of accidents. The most significant areas of risk involve work with overhead cranes and and vehicles­ with people in movement. Workers who are not employees but who are affected by Holmen’s operations are found throughout the business. When these people are working at Holmen’s sites, Holmen is responsible for managing their work and providing a safe work environment for them too. Contractors working on harvesting, silviculture and planting in the forest, ground work for Holmen’s roads, transport workers, contractors working during planned downtime and port personnel at Holmen’s ports are all workers in Holmen’s value chain. Need for skilled workers Skilled and motivated employees are key to being able to conduct business ­operations with good profitability over the long term. There is a structural short- age of many occupational groups, including employees trained in forestry and automation technology. Recruiting skilled labour at Holmen’s site locations in sparsely populated areas is also a challenge. Skilled labour shortages can delay work and disrupt production. It is important for Holmen to work actively on talent management and to create stimulating workplaces to retain and attract a skilled workforce. Impact, risk and opportunity management Policies related to own workforce Holmen’s ambition is for no work-related accidents to occur and Holmen’s work environment policy states how work-related injuries and illness are to be pre- vented. The policy sets out how both preventive and operational work is to be conducted, working with employees and their representatives in all areas, focus- ing on risks and safe behaviours. Safety equipment must always be in place and there must be procedures for all health and safety activities, describing what is to be done, how it is to be done and who is to do the work. Accidents, incidents and observed risks must be reported and analysed, and result in corrective ­actions. Sites with production must have certified management systems and Holmen­ is to constantly improve health and safety management systems. Holmen’s HR policy complies with relevant processes on own workforce in line with the UN’s Guiding Principles on Business and Human Rights, the ILO Decla- ration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. The policy states that all employees at Holmen should be able to feel a sense of security, job satisfaction and commitment, and have the same rights, obligations and ­opportunities irrespective of their status under the statutory protected grounds for discrimination. Holmen is to work for a good relationship with trade unions representing the workforce. In line with Holmen’s guidelines, each business area is to prepare a long-term talent management plan each year, where recruitment needs are identified based on the development of operations, skills shortages at Holmen and on the labour market, as well as age structure, gender distribution, employee turnover and other factors involved. The plan is to describe long-term and short-term actions. Additionally, each material site is to draw up an equal treatment plan identifying risks of discrimination and harassment and other ­barriers to equal treatment. The plan also describes processes and procedures to combat discrimination and promote equal treatment. Any cases of discrimina- tion arising must be investigated and remedied immediately. The guidelines on diversity and inclusive culture state that cases of victimisation must be investigated as soon as possible, followed up and remedied. The nature of the potential remedy is assessed based on what is considered appropriate. See the section on Processes to remediate negative impacts below. Both the work environment and HR policies cover all of Holmen’s own workforce. Other policies and guidelines affecting Holmen’s own workforce and how it is to act are found in Holmen’s Code of Conduct for its own workforce, which ­describes Holmen’s approach to business conduct. The environment and energy policy describes how work is to be carried out in line with the precautionary ­principle to avoid injury and detriment to human health and the environment. Procedures for contact with workers Systematic health and safety work is carried out together with employees and their representatives in all areas, focusing on risks and safe behaviours. ­Holmen’s Work Environment Network meets quarterly and initiates activities, plans actions to prevent accidents and draws up indicators based on identified risks and risk assessments. Risk areas are followed up and reported to Group management. Accidents must be investigated on the day they occur and reported incidents are followed up at team meetings and local health and safety meet- ings. All identified risks are tackled within the framework of each business area’s management system. Holmen advocates engagement and the opportunity to exert influence. There- fore, employees are encouraged to engage in direct dialogue with their line ­manager where necessary. There is also an opportunity to consult an immediate superior, HR or a trade union representative at the workplace. Managers must have an appraisal talk with their employees at least once a year. Heads of the business areas and HR Directors are jointly responsible for provid- ing operational information and liaising with the trade union representatives, and for ensuring that appraisal talks and employee surveys are carried out. There are trade union representatives at each material site in Sweden, the UK and the Netherlands who are informed about developments at the unit or under- taking on an ongoing basis. Trade union cooperation in other countries is in line with the law and other forms of collective employee engagement based on local standards. 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 consulta- tion bodies on various issues. Recurring surveys of employee engagement are conducted and the results of these surveys are compared with indices to provide an indication of the ­effectiveness of contact with Holmen’s own workforce. Processes to remediate negative impacts and channels for own workers to raise concerns Dialogues are conducted on remedying negative impacts regarding own work- force in cooperation with the trade union representatives. Initially situations are discussed in general and in the first instance Holmen tries to achieve consensus regarding solutions. Where a trade union considers that the employer is in breach of agreements, a fine may be charged or the incident may be reported to the Swedish Work Environment Authority, which can lead to disciplinary meas- ures and compensation. Holmen follows up on whether the actions taken have been successful in consultation with the unions. If an employee suffers illness or an accident at work, processes and procedures are in place for rehabilitation and support in returning to work. Employees can contact their line manager or another manager at Holmen, HR or their union representative to raise concerns. As part of the systematic preventive health and safety work, employees can report accidents in an online health and safety information system (IA reporting system). Employees can also use Holmen’s­ whistleblower function. There is information on Holmen’s intranet stating how an employee can report an issue, and Holmen’s Code of Conduct states that Holmen will not tolerate any kind of reprisals against anyone who has reported an incident in good faith. Taking action on material impacts on own workforce Holmen works systematically on health and safety to facilitate a good work ­environment as part of its strategy. All material sites and forest operations have health and safety certification (ISO 45001) Committees and other groups carry out preventive safety work to combat incidents, accidents and work-related illness. Holmen’s employees must not be under the influence of alcohol or drugs in the workplace. There are processes for sick leave, rehabilitation and work ­adaptation on returning to work. Employees are also offered a fitness allowance and regular health checks. In 2024, a Group-wide project was launched to improve the safety culture in the Group. Holmen’s Work Environment Network is tasked with managing and co­ordinating this work, which is expected to be concluded by the end of 2025. The aim of the project is to create commitment and greater consideration for each other’s health and safety. Success is measured in accident statistics and recurring employee surveys which include questions about health and ­safety at work. Holmen Annual Report 2024    111 Own workforce Sustainability report Talent management is handled within the respective business area, which ­produces action plans based on the needs of each material site. As the needs of different material sites may vary, no Group-wide key actions have been identi- fied or taken. To strengthen the brand and attract labour, Holmen works to ­ensure a consistent, true and transparent picture of Holmen as a company at Group-wide level. Holmen actively involves company ambassadors representing a diversity of backgrounds, occupational roles and geographical areas. Addition- ally, Holmen­ works with other organisations in the same sector on how future needs to attract a skilled workforce can be met. Success is measured in brand surveys, external rankings and indices and interest at different events attended by Holmen. The industry is currently overwhelmingly male and Holmen is working to achieve a more even gender distribution among all employees. In recruitment processes, Holmen strives to bring in more candidates from the underrepresented sex for vacancies where this is possible. When recruiting for summer jobs, the aim is an equal distribution of men and women. Efforts are monitored by gender distri- bution indicators. Holmen draws up action plans and annual pay surveys as part of work to create an inclusive workplace in which everyone is given the same ­development opportunities. Metrics and targets Targets related to own workforce Holmen’s workforce must develop and thrive. A healthy culture and a safe work environment go without saying and Holmen is to be an attractive employer that develops its employees by giving them stimulating duties and new challenges. Indicators are linked to this target to measure whether Holmen is on track. Acci- dent statistics indicate that appropriate actions are creating a safer and more se- cure working environment. The ambition is for zero accidents. Sickness absence, employee turnover and Employee Net Promotor Score (eNPS) are indicators that show the health of Holmen’s employees and how they feel. The ambition is to ­attract and retain the right employees to secure future talent management. It is important to Holmen to have committed and satisfied employees. One of the ways in which Holmen measures this is through regular employee surveys, which form the basis for an Employee Net Promotor Score (eNPS). This is monitored against industry indices and every department analyses the results together, an action plan is then drawn up and further monitoring carried out. The heads of the business areas are responsible for the survey in their respective business area and Holmen’s HR Director and the CEO follow up outcomes for central functions at Holmen. In the reporting period, the average eNPS amounted to 26 (25). This is a strong result compared with the industry index for 250 companies in different sectors, which reached 16 for the most recent two-year period (2022/2023). This indi- cates that Holmen’s work for satisfied employees is focusing on the right areas. Characteristics of the undertaking’s employees The number of employees in the reporting period was 3 498 (3 546). The propor- tion of women was 22.4 (22.3) per cent in the same period. Number of employees, head count 2024 2023 Female 838 816 Male 2 786 2 804 Total no. of employees 3 624 3 620 Total number of employees per country, head count 2024 2023 Sweden 3 094 2 981 UK 383 407 Netherlands 73 72 Other countries 74 86 Total no. of employees 3 624 3 546 2024 2023 Number full-time equivalent* Female Male Total Female Male Total Permanent employees 658 2 536 3 194 664 2 600 3 264 Part-time employees 60 41 101 55 34 89 Temporary employees 66 137 203 73 120 193 Total full-time equivalent (FTE) 784 2 714 3 498 792 2 754 3 546 *Full-time equivalent calculated taking into account absence and overtime. Employee turnover* 2024 2023 Employee turnover, % 7.3 7.4 Number of employees who left the undertaking during the reporting period 264 267 Recruitments 199 253 *Relates to permanent employees. Collective bargaining coverage and social dialogue In the reporting period, the proportion of Holmen’s employees covered by ­collective bargaining agreements amounts to 98 (95) per cent. The calculation is based on Holmen’s permanent and fixed-term employees in Sweden, the UK and the Netherlands who have collective bargaining agreements. In other coun- tries, there are national standards for collective labour arrangements, which ­Holmen backs. Diversity indicators Information on the gender distribution at top management level is shown in Note 4 on page 74, and on pages 56–58. Age distribution of employees, FTE* 2024 2023 Under 30 404 446 30–50 1 581 1 623 Over 50 1 209 1 196 *Calculated based on FTE taking into account absence and overtime for permanent employees. Training and skills development metrics Employee development is taking place at all levels to safeguard Holmen’s ­current and future skills needs. Many employees complete regular compulsory training to maintain skills in specific areas. Training in business conduct is ­carried out on the basis of Holmen’s Code of Conduct. Holmen offers Group-wide leadership programmes and programmes for new and more experienced manag- ers, and for specialists. Ongoing competence development sees Holmen paving the way for employee development with stimulating duties and new challenges. New employees at Holmen’s material sites are trained in health and safety, and employees complete regular online health and safety training based on the risks and competence requirements of the site concerned. Contractors undergo train- ing before being granted access to Holmen’s material sites. Health and safety metrics During the reporting period, all Holmen employees are covered by statutory health and safety requirements. During the reporting period, 38 work-related accidents were recorded, 20 of which were considered to be severe. Of the total work-related accidents, 31 accidents involved employees in Holmen’s own workforce. The accident frequency for own workforce was 5.3 (5.2) accidents per million hours worked. The most common accidents were slips, trips and crush injuries. None of the accidents which occurred during the period led to ­fatalities. Holmen defines an accident that leads to more than seven days of sickness absence as severe. 112    Holmen Annual Report 2024 Own workforce Sustainability report Total sickness absence is an indicator of employee health and well-being and a way for Holmen to measure progress. Sickness absence is divided into short term and long term (more than 15 days). Sickness absence linked to recordable work-related ill-health is difficult to identify and Holmen considers that total sickness absence describes the health of Holmen’s own workforce in general. Sickness absence, %* 2024 2023 Total 4.7 4.6 Of which long-term sickness absence** 2.4 1.9 *Number of days of accidents in relation to total number of hours worked. **From 2024 onwards, long-term sickness absence is calculated as more than 15 days. Previously it was calculated as more than 60 days. Hence the increase in ­long-term sickness absence in 2024 compared with the previous period. Compensation metrics (pay gap and total compensation) 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. Action plans and annual pay surveys are drawn up in line with the Swedish Equality Act as part of Holmen’s 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. For information about the total remuneration ratio, see Holmen’s remuneration report for 2024 which is available at holmen.com. Incidents, complaints and severe human rights impacts No cases of human rights incidents related to the undertaking’s employees have occurred during the year (or in the previous year). Also see information on the whistleblower function in the section on Business conduct, page 116. No issues of discrimination were reported via this function during the year. Workers in the value chain Strategy Material impacts, risks and opportunities and their interaction with strategy and business model Holmen works with many suppliers of goods and services, but it is from suppliers in forestry that impacts on workers in the value chain are judged to be material. Forestry is dependent on subcontractors Holmen’s forestry is largely dependent on contracted services in harvesting and silviculture (thinning, site preparation and planting). In recent decades ­Holmen has switched from carrying out its own harvesting and silviculture to ­hiring contractors. Streamlining their operations better enables contractors to develop efficient working methods with greater flexibility through the year. ­Forestry uses a high proportion of migrant labour and seasonal labour. Workers from other countries can find it especially difficult to know what rights they have and the labour law conditions that apply in Sweden. Silviculture work in Holmen’s forests employs approximately 1 000 seasonal workers every year and it is important that Holmen hires and works with responsible contractors. If difficulties arise in accessing labour to carry out silviculture services, for exam- ple in the event of external events that mean migrant labour is unable to travel, Holmen’s dependence on contractor services may have financial effects. ­Operations may be affected in the form of reduced forest growth and poorer ­forest management. Additionally, Holmen’s reputation may be harmed if the ­human rights of value chain workers are not upheld. Impact, risk and opportunity management Policies related to value chain workers For many years now, Holmen has worked with a Supplier Code of Conduct which sets out what Holmen expects of its suppliers. The policy is based on the UN’s Guiding Principles on Business and Human Rights, the ILO Declaration on Funda- mental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Areas addressed are business conduct, human rights and labour conditions, the environment and climate and suppliers working to ensure that due diligence is demonstrated in their opera- tions regarding impacts in these areas. The Code of Conduct specifically states that neither child labour nor forced labour may occur. The Code of Conduct ­requires that working conditions and pay are respected in line with legislation or agreements. Compliance with the Code of Conduct is a contractual condition for Holmen and if irregularities arise, Holmen has the right to terminate the agreement with the supplier concerned. Holmen’s Supplier Code of Conduct is included in new contracts with suppliers and in agreements with forestry ­contractors. The Code of Conduct covers all types of suppliers to Holmen and also requires that the supplier ensures that their sub-suppliers follow the code. Holmen’s management system for forest operations includes a specific procure- ment process adapted to the forest supply chain which seeks to ensure that everyone carrying out silviculture work for Holmen receives contractual pay and has a good work environment and decent terms of employment. Besides requir- ing compliance with Holmen’s Supplier Code of Conduct, Holmen’s fundamental requirements regarding forestry contractors are that they comply with Swedish law, apply collective agreements and are certified for sustainable forestry in line with PEFC’s contractor certification. The certification commits the contractor to operate in line with certain sustainability requirements and have procedures in place for administration, health and safety, handling hazardous waste, risk prevention and further training. Holmen’s management system also includes a process for monitoring and ­management during the performance of the contract. During the contract, social checks on forestry contractors are carried out by on-site visits on a sample basis. The head of the business area is the person ultimately responsible for the ­process of procuring forestry contractors. Holmen Annual Report 2024    113 Workers in the value chain Sustainability report Processes for engaging with value chain workers about impacts When hiring forestry contractors, Holmen conducts ongoing dialogue with the supplier, the supplier’s employees and trade union representatives, both before procurement and during procurement and performance of the contract. As part of Holmen’s supplier approval process, information is obtained from the forestry contractor in line with a separate protocol with a specific focus on health and safety and compliance with decent conditions for workers, in line with the requirements of Holmen’s Supplier Code of Conduct. Where suppliers hire sub-suppliers, the supplier is responsible for ensuring that the information and the requirements cover sub-suppliers. Holmen works with the union GS, which covers the forest industry, the wood ­industry and the graphic industry, regarding which forestry contractors are to be hired ahead of each season. Supplier approval and decisions are taken in con- sultation with the union representative concerned and potential views from the GS union must be obtained and taken into account. All forestry contractors hired must be reported to the GS union via the union’s main bargaining representative. All forest workers are trained in forestry by Holmen using training provided by the forestry training organisation Skogsbrukets yrkesnämnd (SYN). Training is provided both on site in the forest and online. The training covers Holmen’s ­instructions and work procedures. The safety and quality of the work is vitally important to Holmen and therefore the training is predominantly provided by Holmen’s­ own workforce. Additionally, forestry contractors are to complete the online silviculture training course ‘Skötselskolan’, which provides information on workers’ rights, including access to healthcare. Skötselskolan also includes information about ways to report suspected or actual irregularities. All planters and thinners must have completed and passed the training before being allowed to work in the forest, no matter how long the contract is for. The training is pro- vided in seven languages. During the contract, site visits are made to forestry contractors in line with a ­process drawn up and field visits are made to the forestry contractors’ work teams, in which Holmen conducts a dialogue with both managers at the forestry contractor and their workers. A survey is handed out to all workers present, which is to be answered anonymously. The answers are taken in and analysed. Processes to remediate negative impacts and channels for value chain workers to raise concerns Compliance with the Supplier Code of Conduct is a contractual condition for Holmen­. If the supplier has caused or contributed to material negative impacts for workers in the value chain, Holmen is to be informed promptly. In the event of failings caused by the supplier, the supplier is to immediately present an ­action plan for corrective action, and take action and provide adequate evidence of improvements. Action plans and corrective actions are followed up. The forestry contractor and its employees are informed of where they should turn if they suspect irregularities. It is also made clear that Holmen will not toler- ate any form of reprisals against anyone who reports to Holmen’s whistleblower function in good faith. Any nonconformities noted at site visits and field visits, or through other ­channels, are analysed and an action plan is produced. Corrective actions are followed up, even if the nonconformities do not qualify as a breach of the Supplier Code of Conduct. Taking action on material impacts on workers in the value chain In the reporting period, site visits were made to 26 (27) per cent of Holmen’s cleaning and planting work teams. No suspected breaches of the Supplier Code of Conduct were noted during the site visits. No contractual employees reported any experienced irregularities via the channels provided by Holmen. During the reporting period, a Group-wide project was run with the aim of ­reviewing Holmen’s due diligence process, based on Holmen’s material sustain- ability risks in the supply chain. Among other things, the purchasing policy and its associated guidelines have been revised in terms of work with risk-based due diligence in the supply chain. Procedures for risk assessments related to sustain- ability have been introduced with the aim of implementing a more Group-wide approach. In 2025, work will continue to deepen knowledge of risks related to human rights in Holmen’s supply chain and to follow up on whether existing working methods are sufficiently effective. The actions cover the whole Group. Metrics and targets Targets related to value chain workers Holmen builds long-term relationships based on responsible business conduct. It is important that Holmen’s suppliers have a safe and healthy work environ- ment and provide good working conditions. Within the framework of procurement of forestry services, constant improve- ment efforts are made in which the management process for procuring forestry contractors is reviewed each year. Work is partly based on any nonconformities and issues noted during the year, and on the views and information that have emerged in contacts with suppliers, their employees, union representatives and other stakeholders. During the reporting period, no reports have come in of disregard for the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Funda- mental Principles and Rights at Work or the OECD Guidelines for Multinational Enterprises covering workers in Holmen’s own value chain. Of the suppliers in the value chain that Holmen has evaluated during the period, there is no in- creased risk related to the principles in Holmen’s Supplier Code of Conduct. No supplier collaboration has been terminated due to shortcomings in the supply chain. 114    Holmen Annual Report 2024 Workers in the value chain Sustainability report Affected communities Strategy Material impacts, risks and opportunities and their interaction with strategy and business model Holmen’s operations affect local residents and local stakeholders, including commercial actors, while its operations in their turn are affected by the sur- rounding community. The greatest impact comes from Holmen’s own operations, particularly forestry, which also affects Sami interests in the form of reindeer husbandry. Holmen depends on the consent of Sami reindeer herding associa- tions to carry out forestry in the areas that overlap the association’s reindeer grazing lands. Developing and generating wind and hydro power can impact on local residents due to changed land use and regulating water flows. Wind power generation on Holmen’s land is an important element in the climate transition, but the permit process is often long and dependent on the support of municipali- ties and local residents, which can lead to demands for compensation and affect the projects’ viability. The production of wood products, paperboard and paper can cause odours and noise in nearby communities. Transport of wood can also cause noise in neighbouring communities. Holmen creates conditions that enable thriving rural communities and gives ­people the opportunity to work, live and enjoy quality of life outside the city re- gions. Holmen’s operations contribute to local communities by providing jobs and tax income and as a major employer in several locations, Holmen also works with other local companies and associations to promote social and economic ­development. Local presence is important to Holmen and affected communities. ­Holmen’s need for labour and contractors is crucial to the success of its opera- tions, while Holmen’s operations contribute to thriving rural communities as the forest industry is a central element in the local economy in many locations. For- estry also makes the forest easily accessible for outdoor recreation and there are good opportunities for hunting and fishing on Holmen’s land. Impact, risk and opportunity management Policies related to affected communities Holmen’s environmental and energy policy states that operations must be ­carried out in line with the precautionary principle to prevent injury and detri- ment to human health and the environment. Environmental impact must be ­acceptable to people and nature both in ongoing and discontinued operations, and in the event of process disruptions the environment takes precedence over production. Holmen takes reindeer husbandry into consideration through dia- logue with representatives from Sami reindeer herding associations as laid down by law. The policy covers the communities in which Holmen operates. Holmen has steering documents setting out procedures concerning reindeer husbandry, including consultation meetings and communication with Sami rein- deer herding associations affected. Mutual understanding of the conditions in which the respective businesses operate is fundamental to good collaboration. In the joint planning process, the parties seek shared solutions for silviculture work. Joint planning of silviculture must be conducted in good faith, and reindeer grazing must be taken into consideration, as must cultural sites, such as trees bearing carvings. Holmen must support and respect protection of internationally recognised ­human rights, including rights under the UN Convention on the Rights of the Child. Holmen’s policies, combined with the Code of Conduct, require responsi- ble business conduct. Holmen conducts an ongoing dialogue with the local com- munity, including local representatives, politicians and the local business community. Processes for engaging with affected communities about impacts Good relations with local communities around Holmen’s material sites are ­important and there is a desire to maintain dialogue, as contact with the local community is extremely important in working to minimise the impact on Hol- men’s surroundings. At the sites where operations take place, there is continu- ous contact with local representatives, and in permit cases work is coordinated with the authorities affected. Operational responsibility for contact with affected communities rests with Holmen’s business areas, and internal monitoring is ­carried out to evaluate whether the contacts are effective. Local consultations are held to maintain contact with affected Sami reindeer herding associations. At these consultations, representatives of Holmen’s field operations and representatives of the Sami reindeer herding association meet to discuss planned operations and potential impact on reindeer husbandry. An online tool gives the Sami reindeer herding associations access to relevant ­information ahead of the consultation. Dialogue with the affected Sami reindeer herding association is always required in permit processes and notifiable activi- ties such as wind power development and notification of harvesting. Processes to remediate negative impacts and channels for affected communities to raise concerns There are different actions that can be taken to remediate negative impacts on affected communities caused by Holmen. The majority of such events are handled­ in direct dialogue with those affected, while certain situations may ­demand legal processes to investigate responsibility. Different events may ­demand different types of consideration and depend on the specific situation. Where operations require a permit, action is directly required regarding reindeer husbandry, especially when land is being used for wind power production. To reduce­ any impact on reindeer husbandry, fences and feeding stations are built for the reindeer, and in some cases it may be necessary to temporarily shut down wind turbines. Consultation with representatives of the Sami reindeer herding association concerned creates an opportunity to find solutions that meet the needs of both parties. To enable complaints or reporting of irregularities, affected communities can contact representatives from Holmen directly or use Holmen’s whistleblower function. More information is provided in the section on Business conduct. Holmen’s material sites have established procedures and processes to tackle complaints from affected communities, and an ongoing dialogue is maintained by local representatives for Holmen to enable effective handling of incoming concerns. At several material sites, there is an opportunity for local residents to get in touch with Holmen quickly via a dedicated phone number and online contact channels. It is also possible to contact Holmen via its website. It is ­necessary to continue developing these processes to make sure that concerns are handled efficiently and transparently. Taking action on material impacts on affected communities No needs for action related to negative impacts on affected communities were identified in the reporting period. Impacts on affected communities are largely linked to the operations that require permits, and in the event of nonconformities there are other processes for handling such situations. A project is in progress to review and improve the joint planning processes ­regarding operations that affect the reindeer husbandry community. This in- volves more effective consultation meetings, developing actions taken out of consideration, greater access to resources and improved communication with the affected Sami reindeer herding associations. Metrics and targets Targets related to affected communities In line with business conduct, Holmen must build long-term relationships and operations must develop within the framework of environmental permits and certifications. Impact on humans and the environment must be acceptable in line with Holmen’s environmental and energy policy. The effectiveness of the policy in relation to affected communities is evaluated by ensuring that levels of noise and pollutants to air, water and soil laid down in permits are met. Holmen Annual Report 2024    115 Affected communities Sustainability report Business conduct Governance See the corporate governance report on pages 44–48 for the responsibilities of the administrative, supervisory and management bodies. Impact, risk and opportunity management Description of the processes to identify and assess material impacts, risks and opportunities Business conduct helps to create a more competitive economy. Holmen oper- ates in a global market and sells products to many countries around the world. Holmen is exposed to political risks, risks of corruption and risks in the value chain, for example. Nationally and internationally, customers and partners make demands of Holmen as a stable and reliable supplier that stands for good busi- ness conduct and clear sustainability principles. Deviations from principles and policies could have a negative impact on the Group’s reputation and business relationships. A good reputation as a responsible and trustworthy company is fundamental to Holmen’s business. The collaborations that Holmen enters into must be in line with the Group’s fundamental values on sound business ethics and follow inter- nal steering documents on business conduct. External requirements governing Holmen’s responsibility for behaviour in the value chain may be changed by new legislation. Changes in laws and regulations may affect conditions for Holmen’s operations and lead to increased costs for regulatory compliance. Business conduct policies and corporate culture Holmen supports the ten principles of the UN Global Compact, the core conven- tions of the International Labour Organization (ILO) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Holmen’s Code of Conduct, which is based on these principles, provides guidance day to day and makes clear what every employee can expect from their colleagues in the areas of business ethics, information management, human rights, workers’ rights and the environment. Holmen’s business ethics policy, with its associated guidelines, supplements the Code of Conduct and contains rules linked to business conduct, anti-corruption, tax, money laundering and other business conduct-related areas. Holmen does not tolerate any form of corruption. Employees may not give, promise, offer, re- quest or receive payment or benefits that are contrary to applicable legislation, good business practice or which may affect, or be considered to affect, the ­objectivity of decisions. Employees must manage contact with competitors with caution and in a manner that ensures compliance with competition rules. By working actively with steering documents, Holmen creates a responsible corporate­ culture. Alongside the Code of Conduct and the business ethics policy, there are internal documents describing the business model, governance model, values and views of leadership and employeeship. Holmen also works with the values of courage, commitment and responsibility, which are to develop employ- ees in the Group but also build further on Holmen’s strong culture. Holmen holds recurring training on the Code of Conduct for all employees. New employees must complete training in the Code of Conduct as part of their induc- tion. Additionally, themed training is run for departments where there is a great- er risk of corruption and bribery, such as sales staff, purchasers and managers. In 2024, training was held for all employees in personal data protection law and themed training on competition law was held for one group of sales staff. Holmen has a whistleblower function and established functions for receiving ­reports that come in under the Swedish Act on the Protection of Persons Report- ing Irregularities (the Whistleblowing Act), which covers Holmen. Holmen’s whistleblower function can be accessed via Holmen’s intranet and Holmen’s ­external website, and makes it possible for employees and other stakeholders to report suspected breaches of the law, other irregularities or serious misconduct either anonymously or openly. During the reporting period, Holmen replaced a previous internal whistleblowing tool with an external service which includes functions for case management and handling data protection issues. Holmen’s Group instruction for the whistleblow- er function describes the process. During the year, training on the Whistleblow- ing Act was held for the functions receiving whistleblowing reports, including rules on protection for whistleblowers and investigation procedures. Cases received by the whistleblowing service are reviewed by the respective ­receiving function. The reviewers must have a sufficiently independent role in the Group. If the case concerns people in a leadership role, for example, an ­external investigator will normally be hired. The case must be investigated in a satisfactory way and feedback must be provided to the whistleblower. The ­reviewers can also propose preventive actions if necessary. The conclusion of a case at Holmen does not preclude information being handed over to an external authority. Management of relationships with suppliers Under Holmen’s Purchasing policy, Holmen is to apply good business ethics and all purchasing must ensure objectivity and competition. Holmen’s purchasing functions are to contribute to the company’s long-term profitability by ensuring a sustainable supply of goods and services. This assumes good forward planning and effective cooperation between the purchasing function and operations. The purchasing function is also tasked with identifying, evaluating and preventing risks in Holmen’s supply chain. Holmen has had a Supplier Code of Conduct for many years now. The Supplier Code of Conduct follows the UN’s principles and includes the requirement that Holmen’s suppliers must respect internationally recognised principles concern- ing 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 the climate, which involves identifying potential and actual negative impacts and taking action to tackle such impacts. Purchasers at Holmen are trained in Holmen’s purchasing policy and Supplier Code of Conduct on an ongoing basis. Holmen hires an external body, EcoVadis, to conduct an in-depth assessment of how well certain suppliers are complying with the principles of the Supplier Code of Conduct. This includes climate, environment, labour law, human rights, business conduct and sustainable purchasing. At the end of 2024, 112 (130) suppliers had undergone an EcoVadis assessment. 100 (97) per cent of Holmen’s assessed suppliers scored above the Group’s pass level. Of the suppliers evalu- ated and followed up in 2024, no supplier has been found to have a heightened risk related to the principles in Holmen’s Supplier Code of Conduct. In 2024, no supplier collaboration was terminated due to shortcomings in the supply chain. Holmen works with local suppliers and suppliers that hold various certifications. The contractors used in forestry are subject to a fundamental requirement that the supplier complies with Swedish law and applies collective bargaining agreements, and is certified for sustainable forestry under PEFC’s contractor certification. Holmen’s purchasing guidelines state that payment times should follow the practice for the product or service and country in which purchasing takes place. Prevention and detection of corruption and bribery Holmen’s steering documents, in the form of the business ethics policy with its associated guidelines and the Code of Conduct for employees, provide informa- tion and guidance on how employees should act in business conduct matters. Employees must be familiar with the Code of Conduct and this is ensured through recurring training. A Supplier Code of Conduct is to be included in all new supp­ lier agreements and compliance is a requirement. If a supplier fails to comply with the Code of Conduct, this constitutes breach of contract. The majority of customer agreements also include anti-corruption compliance requirements. Besides being able to contact their manager, HR or union representatives or bring up issues at regular appraisal talks, employees are able to use the whistle- blower function to supplement other channels for reporting irregularities regard- ing corruption and bribery. Metrics and targets Whistleblower function Six cases were reported in 2024 that were deemed to constitute whistleblowing as defined by law. As at 31 December 2024, one case was open and under inves- tigation. Other cases were closed after appropriate investigation. No cases of corruption or bribery were identified. No issues of discrimination were reported via this function during the year. Labour law issues were handled by following standard HR procedures. Confirmed incidents of corruption and bribery No cases of corruption or bribery were identified during the reporting period. Holmen has not been convicted of or fined for breaking the law regarding ­corruption or bribery. 116    Holmen Annual Report 2024 Business conduct Sustainability report Political influence and lobbying activities To promote the climate transition, Holmen is active via dialogue, responding to consultations and engaging in contingency planning and lobbying, on Holmen’s own behalf and together with industry organisations. Holmen is a member of ­national and international industry organisations in order to promote Holmen’s position and opinion on issues relevant to Holmen’s business. In the locations in which Holmen operates, Holmen is in ongoing dialogue with the general public, for example at consultation and information meetings. In 2024, Holmen has worked to increase awareness of the climate benefit of the forest industry in order to publicise the risks Holmen sees in the EU’s Forest Strategy, which may mean limiting the climate benefit of the forest industry. In addition, ongoing dialogue is conducted regarding LULUCF, EUDR, Nature ­Restoration and the Swedish Species Protection Ordinance, all of which may ­impact on future opportunities for sustainable and profitable forest manage- ment in Sweden. In its wind and hydro power operations, Holmen has worked to create lasting ground rules in Sweden with shorter permit processes and a wind power exami- nation process in line with the rule of law, and asserted that it is necessary that the Government safeguard environmental permit processes regarding hydro power in Sweden so that the result is acceptable from an electricity system perspective. Holmen has also engaged in lobbying regarding the EU’s new emission allowances system ETS, so that the right incentives are in place to continue prioritising invest­ ments to reduce fossil energy use. Holmen does not engage in party politics and does not support political parties, candidates or their representatives financially. Holmen’s employees are free to engage in political activities. However, such engagement must not be able to be seen as being supported by Holmen. The Senior Vice President Sustainability and Communications bears overarching responsibility for Holmen’s lobbying work and standpoints. Holmen’s work on ­issues that affect its business must be derived from Holmen’s overall strategy and direction, and be coordinated with Group Sustainability and Communications. Payment practices Holmen has used employee numbers as the selection method for reporting ­payment deadlines for small and medium-sized enterprises. The average time Holmen takes to pay an invoice from the date when the contractual or statutory term of payment starts to be calculated is 31.6 days. Suppliers with up to 9 employees: 28 days Suppliers with up to 49 employees: 29 days Suppliers with up to 249 employees: 31 days As at 31 December 2024, Holmen has no legal proceedings currently ­outstanding for late payments. 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 Holmen Annual Report 2024    117 Business conduct 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. In 2023, the Taxonomy Regulation was extended to cover all six environmental objectives. Companies must report the proportion of their turnover, capital expenditure and operating expenditure for activities covered by the Taxonomy Regulation, and the proportion that meets the requirements to be considered sustainable. Each activity is tested against the technical criteria in the regulation to determine the extent to which it makes a substantial contribution and does no significant harm. Sustainable activities must also comply with minimum social safeguards. In ad- dition, fundamental human rights must be respected and good business practic- es followed. Detailed information about Holmen’s operations that are covered by the taxono- my can be found in the tables below. For the financial year, the share of taxono- my-aligned turnover was 9 (10) per cent, capital expenditure 34 (16) per cent and operating expenditure 27 (20) per cent. All activities fulfil the criteria to be called sustainable. The key figures have been calculated in accordance with the definitions in the Taxonomy Disclosures Delegated Act. 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 expen­ diture and operating expenditure (the denominators). The following sections ­describe the calculation principles applied by Holmen. Allocation of turnover, capital expenditure and operating expenditure to the denominators The total turnover in accordance with the taxonomy’s definition corresponds to the Group’s sales as presented in the income statement, which are defined in ­accordance with IFRS 15, and some of the Group’s other operating income as presented in Note 3. Sales of by-products, renewable energy certificates, emis- sion allowances and silviculture contracts, and some rent and land lease income and other items are included in the denominator according to the definition in the Taxonomy Regulation and amount to SEK 2 000 (1 895) million. Internal sales from activities covered by the taxonomy are not factored in. Total capital expenditure relates to investments and acquisitions for the current year in line with Note 9 Forest assets, Note 10 Intangible assets, Note 11 Proper- ty, plant and equipment, and Note 12 Right-of-use assets (leases). No capital ex- penditure is related to CapEx plans. The total operating expenditure that is applicable to Holmen under the taxono- my relates to repairs and maintenance and research and development. For the financial year, operating expenditure totalled SEK 1 747 (1 718) million. 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, hy- dro power and bioenergy (NACE code 35.11). These operations correspond to taxonomy activities 1.3 (harvesting of own forests), 4.3, 4.5 and 4.8 (electricity production from wind power, hydro power and bioenergy). Holmen generates Turnover for 2024 Economic activities (1) Code (2) Turnover (3) Proportion of turnover, year 2024 (4) Unit SEKm % A. Taxonomy-eligible activities 9 A.1 Environmentally sustainable activities (taxonomy-aligned) Harvesting of own forest CCM 1.3 811 3 Wind power CCM 4.3 169 1 Hydro power CCM 4.5 454 2 Bioenergy CCM 4.8 784 3 Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1) 2 218 9 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) 2 218 9 B. Taxonomy-non-eligible activities Turnover of taxonomy-non-eligible activities (B) 22 541 91 Total (A + B) 24 759 100 Taxonomy-related turnover amounts to SEK 2 218 million, most of which is attributable to the Group’s turnover and is shown in the income statement on page 60. The taxonomy-aligned turnover from other operating income totals SEK 784 million and relates to bioenergy. CCM = Climate Change Mitigation 118    Holmen Annual Report 2024 Taxonomy Sustainability report no external turnover from other NACE codes (economic activities) that are cov- ered by the Taxonomy Regulation. All the activities have been judged to contrib- ute 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. There were no changes in major taxonomy-aligned activities during the financial year. Turnover from the harvesting of our own forests above all consists of external sales of logs and pulpwood, but excludes what is processed by Holmen’s own ­industrial facilities. 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, ancilliary services for the stabilisation of the electricity grid, guar- antees of origin and green electricity certificate revenue. Capital expenditure in- cludes 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. In the 2024 reporting period, the taxonomy-aligned share of capital expenditure increased from 16 per cent to 34 per cent, mainly related to the construction of wind power. The share of operating expenditure increased from 20 per cent to 27 per cent due to higher silviculture costs. The change in the taxonomy-aligned share of turnover was marginal. Taxonomy-aligned activities within Holmen are able to be separately identified in the company’s financial reporting, which prevents any double counting of turnover, capital expenditure and operating expenditure. Evaluation of compliance with the criteria Holmen annually evaluates the technical screening criteria to determine wheth- er the economic activities are considered to significantly contribute to climate change mitigation and not cause significant harm to any of the other environ- mental objectives under the Climate Delegated Act. 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 con- sidered 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 signifi- cant harm. Third-party audits were carried out during the year in accordance with the technical screening criteria. With regard to the Group’s production of wind and hydro power and bioenergy, an analysis of each power plant’s individu- al 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 and 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 the OECD’s six-step framework for ­human rights due diligence. See also pages 111–117 for further information. Substantial contribution criteria Does Not Significantly Harm (DNSH) criteria Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circular economy (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circular economy (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned (A.1.) or eligible (A.2.) turnover, year 2023 (18) Category enabling activity (19) Category transitional activity (20) Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T Y N/EL N/EL N/EL N/EL N/EL - Y Y Y Y Y Y 3 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - Y Y Y 1 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - - Y Y 3 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y Y - Y Y 3 - - 100 - - - - - 10 - - - - - - - - - - - - - - - - - - - - - - - - - - 10 - - Holmen Annual Report 2024    119 Taxonomy Sustainability report Capital expenditure 2024 Economic activities (1) Code (2) Capital expenditure (3) Proportion of capital expenditure, year 2024 (4) Unit SEKm % A. Taxonomy-eligible activities 34 A.1 Environmentally sustainable activities (taxonomy-aligned) Harvesting of own forest CCM 1.3 221 10 Wind power CCM 4.3 503 22 Hydro power CCM 4.5 67 3 Bioenergy CCM 4.8 - - Capital expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1) 791 34 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) 791 34 B. Taxonomy-non-eligible activities Capital expenditure of taxonomy-non-eligible activities (B) 1 520 66 Total (A + B) 2 310 100 Taxonomy-aligned capital expenditure amounts to SEK 790 million. For harvesting of own forests, SEK 170 million relates to investments in forest assets, SEK 37 million in property, plant and equipment and SEK 14 million in leases. Wind power includes investments in property, plant and equipment totalling SEK 503 million, which relate to the construction of wind power production. Hydro power includes SEK 66 million of investments in property, plant and equipment. The percentage deriving from acquisitions in the financial year relates to purchases of forest properties to the amount of SEK 30 million. Operating expenditure 2024 Economic activities (1) Code (2) Operating expenditure (3) Proportion of operating expenditure, year 2024 (4) Unit SEKm % A. Taxonomy-eligible activities 27 A.1 Environmentally sustainable activities (taxonomy-aligned) Harvesting of own forest CCM 1.3 381 22 Wind power CCM 4.3 15 1 Hydro power CCM 4.5 35 2 Bioenergy CCM 4.8 38 2 Operating expenditure of environmentally sustainable activities (taxonomy-aligned) (A.1) 469 27 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) 469 27 B. Taxonomy-non-eligible activities Operating expenditure of taxonomy-non-eligible activities (B) 1 277 73 Total (A + B) 1 747 100 Taxonomy-aligned operating expenditure amounts to SEK 469 million. Mostly attributable to maintenance and repairs. 120    Holmen Annual Report 2024 Taxonomy Sustainability report Substantial contribution criteria Does Not Significantly Harm (DNSH) criteria Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circular economy (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circular economy (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned (A.1.) or eligible (A.2.) CapEx, year 2023 (18) Category enabling activity (19) Category transitional activity (20) Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T Y N/EL N/EL N/EL N/EL N/EL - Y Y Y Y Y Y 13 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - Y Y Y 0 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - - Y Y 3 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y Y - Y Y 0 - - 100 - - - - - 16 - - - - - - - - - - - - - - - - - - - - - - - - - - 16 - - Substantial contribution criteria Does Not Significantly Harm (DNSH) criteria Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circular economy (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circular economy (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned (A.1.) or eligible (A.2.) operating expenditure, year 2023 (18) Category enabling activity (19) Category transitional activity (20) Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T Y N/EL N/EL N/EL N/EL N/EL - Y Y Y Y Y Y 17 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - Y Y Y 0 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y - - Y Y 2 - - Y N/EL N/EL N/EL N/EL N/EL - Y Y Y - Y Y 1 - - 100 - - - - - 20 - - - - - - - - - - - - - - - - - - - - - - - - - - 20 - - Holmen Annual Report 2024    121 Taxonomy Sustainability report Nuclear energy related activities Yes/No 1 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. No 2 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 the best available technologies. No 3 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. No Fossil gas related activities Yes/No 4 The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. No 5 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. No 6 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. No Statement of use Holmen AB has reported the information cited in this GRI content index for the period 1 January–31 December 2024 with reference to the GRI Standards. GRI 1 used GRI 1: Foundation 2021 Omission GRI standard / other source Disclosure Page reference Require- ment omitted Reason Explanation General disclosures GRI 2: General disclosures 2021 2-1 Organisational details 4, 132 2-2 Entities included in the organisation’s sustainability reporting 90-91, Note 22, 98 2-3 Reporting period, frequency and contact point 4, 59, 98 2-4 Restatements of information 98 2-5 External assurance 126 2-6 Activities, value chain and other business relationships 8-9, 10, 16, 43, 99 2-7 Employees 75, Note 4, 112, 131 2-7 b-ii 2-7 b-iii 2-7 b-iv 2-7 b-v Not applicable Holmen has not reported employees by region broken down by type of employment during the reporting period as this information is not considered relevant. 2-8 Workers who are not employees 113 2-9 Governance structure and composition 44-48, 54-58, 74 2-10 Nomination and selection of the highest governance body 44-46, 54-58 2-11 Chair of the highest governance body 45 2-12 Role of the highest governance body in overseeing the management of impacts 45-47 2-13 Delegation of responsibility for managing impacts 45-47 2-14 Role of the highest governance body in sustainability reporting 45-47, 96 2-15 Conflicts of interest 44-47, 116 2-16 Communication of critical concerns 47-48 2-17 Collective knowledge of the highest governance body 45-44, 56 2-18 Evaluation of the performance of the highest governance body 45 2-19 Remuneration policies 45-46, 73-74 (Note 4) GRI index 122    Holmen Annual Report 2024 GRI index Sustainability report Omission GRI standard / other source Disclosure Page reference Requirement omitted Reason Explanation General disclosures GRI 2: General disclosures 2021 2-20 Process to determine remuneration 45-46, 73-74, Note 4 2-21 Annual total compensation ratio 73-74, 113 2-22 Statement on sustainable development strategy 7, 117 2-23 Policy commitments 47-48, 101-102, 105, 107-109, 111, 113, 115- 116 https://www. holmen.com/en/ about/ Corporate- governance/ code-of- conduct-and- policies/ holmens-code- of-conduct/ 2-24 Embedding policy commitments 47, 101-102, 105, 107-109, 111, 113, 115- 116 2-25 Processes to remediate negative impacts 47-48, 102, 105, 108-109, 111- 112, 114-115 2-26 Mechanisms for seeking advice and raising concerns 47-48, 116 2-27 Compliance with laws and regulations 51, 113, 116- 117 2-28 Membership associations 116-117 2-29 Approach to stakeholder engagement 99, 111, 114 2-30 Collective bargaining agreements 112 Material topics GRI 3: Material topics 2021 3-1 Process to determine material topics 100-101, 105, 107, 109, 111, 113, 115-116 3-2 List of material topics 100 Economic performance GRI 3: Material topics 2021 3-3 Management of material topics 44-48, 98 GRI 201: Economic performance 2016 201-1 Direct economic value generated and distributed 71-72 Anti-corruption GRI 3: Material topics 2021 3-3 Management of material topics 116 GRI 205: Anti- corruption 2016 205-3 Confirmed incidents of corruption and actions taken 116 Materials GRI 3: Material topics 2021 3-3 Management of material topics 109 GRI 301: Materials 2016 301-1 Materials used by weight or volume 110 Holmen Annual Report 2024    123 GRI index Sustainability report Omission GRI standard / other source Disclosure Page reference Requirement omitted Reason Explanation Renewable Energy GRI 3: Material topics 2021 3-3 Management of material topics 103 GRI 302: Energy 2016 302-1 Energy consumption within the organisation 103 302-1 c. iii 302-1 c. iv 302-1 d. iii 302-1 d. iv Not applicable Holmen has not reported the steam consumed as it is self-produced and is produced from the reported fuels. Accounting for steam consumed would have resulted in double counting. Holmen has not purchased cooling. Holmen has not sold steam or cooling. Water and effluents GRI 3: Material topics 2021 3-3 Management of material topics 110 GRI 303: Water and effluents 2018 303-1 Interactions with water as a shared resource 110 303-2 Management of water discharge-related impacts 105-106 303-3 Water withdrawal 110 Biodiversity GRI 3: Material topics 2021 3-3 Management of material topics 107-108 GRI 304: Biodiversity 2016 304-2 Significant impacts of activities, products and services on biodiversity 108 Emissions GRI 3: Material topics 2021 3-3 Management of material topics 101-102, 105- 106 GRI 305: Emissions 2016 305-1 Direct (scope 1) GHG emissions 103-104 305-2 Energy indirect (scope 2) GHG emissions 103-104 305-3 Other indirect (scope 3) GHG emissions 103-104 305-7 Nitrogen oxides (NOx), sulphur oxides (SOx), and other significant air emissions 106 Waste GRI 3: Material topics 2021 3-3 Management of material topics 109-110 GRI 306: Waste 2020 306-1 Waste generation and significant waste-related impacts 109-110 306-2 Management of significant waste-related impacts 109-110 306-3 Waste generated 109-110 Supplier environmental assessment GRI 3: Material topics 2021 3-3 Management of material topics 114, 116 GRI 308: Supplier environmental assessment 2016 308-1 New suppliers that were screened using environmental criteria 114, 116 308-2 Negative environmental impacts in the supply chain and actions taken 114, 116 Employment GRI 3: Material topics 2021 3-3 Management of material topics 111, 113-114 GRI 401: Employment 2016 401-1 New employee hires and employee turnover 112 401-1 a 404-1 b Not applicable Holmen has not reported the number or proportion of new employees or employee turnover by age group or region during the reporting period, as this information is not considered relevant. 124    Holmen Annual Report 2024 GRI index Sustainability report Omission GRI standard / other source Disclosure Page reference Requirement omitted Reason Explanation Occupational health and safety GRI 3: Material topics 2021 3-3 Management of material topics 111-114 GRI 403: Occupational health and safety 2018 403-1 Occupational health and safety management system 111, 113-114 403-2 Hazard identification, risk assessment, and incident investigation 111, 114 403-3 Occupational health services 112, 114 403-4 Worker participation, consultation, and communication on occupational health and safety 111-112 403-5 Worker training on occupational health and safety 111 403-6 Promotion of worker health 111 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 111, 114 Comment: There are no sites where Holmen does not have control over the work and workplace. 403-8 Workers covered by an occupational health and safety management system 106, 111 403-9 Work-related injuries 112-113 403-9 a. v 403-9 b. v Not applicable Holmen has not reported the number of hours worked by employees or non-employed workers, as this information is not considered relevant. Training and education GRI 3: Material topics 2021 3-3 Management of material topics 111-112 GRI 404: Training and education 2016 404-2 Programmes for upgrading employee skills and transition assistance programmes 112-113 404-2 b Not applicable Holmen has not reported end-of- career management as we have not had any major redundancies or retirements. Diversity and equal opportunity GRI 3: Material topics 2021 3-3 Management of material topics 111-112 GRI 405: Diversity and equal opportunity 2016 405-1 Diversity of governance bodies and employees 75 Note 4, 112 405-1 a. ii Not applicable Holmen has not reported the proportion of individuals within Holmen’s governance bodies by age group, as the age of Holmen’s governance bodies can be found on pages 56 and 58. Non-discrimination GRI 3: Material topics 2021 3-3 Management of material topics 111-112 GRI 406: Non- discrimination 2016 406-1 Incidents of discrimination and corrective actions taken 113 Local communities GRI 3: Material topics 2021 3-3 Management of material topics 115 GRI 413: Local communities 2016 413-2 Operations with significant actual and potential negative impacts on local communities 115 Supplier social assessment GRI 3: Material topics 2021 3-3 Management of material topics 116 GRI 414: Supplier social assessment 2016 414-1 New suppliers that were screened using social criteria 116 414-2 Negative social impacts in the supply chain and actions taken 116 Holmen Annual Report 2024    125 GRI index Sustainability report Auditor’s Limited Assurance Report on Holmen AB’s Sustainability Report and state- ment on the Statutory Sustainability Report To the annual general meeting of Holmen AB, corporate identity number 556001-3301 Introduction We have been engaged by the Board and Group Management of Holmen to un- dertake a limited assurance of Holmen’s Sustainability Report for the year 2024. The statutory sustainability report is defined on page 2, which also constitutes the statutory sustainability report. Responsibilities of the Board and Group Management The Board of Directors and Group Management are responsible for the prepara- tion of the Sustainability Report, including the statutory sustainability report, in accordance with the applicable criteria and the Annual Accounts Act in the older version that applied before 1 July 2024. The criteria are described on page 2 of the Sustainability Report, and consists of the parts of the sustainability reporting framework issued by the GRI (Global Reporting Initiative) Sustainability Report- ing Standards which are applicable to the Sustainability Report, as well as the accounting and calculation principles that Holmen has developed. This responsi- bility also includes the internal control which is deemed necessary to establish a sustainability report that does not contain material misstatement, whether due to fraud or error. Responsibilities of the auditor Our responsibility is to express a conclusion on the Sustainability Report based on the limited assurance procedures we have performed and to provide a state- ment on the statutory sustainability report. Our assignment is limited to the his- torical information that is presented and thus does not include future-oriented information. We conducted our limited assurance engagement in accordance with ISAE 3000 (revised) Assurance Engagements Other than Audits or Reviews of Historical Fi- nancial Information. A limited assurance engagement consists of making inquir- ies, primarily of persons responsible for the preparation of the Sustainability Re- port and applying analytical and other limited assurance procedures. We have conducted our examination regarding the statutory sustainability report in accordance with FAR’s recommendation RevR 12, the Auditor’s Opinion on the Statutory Sustainability Report. A limited assurance engagement and an exami- nation according to RevR 12 have a different focus and a considerably smaller scope compared to the focus and scope of an audit in accordance with Interna- tional Standards on Auditing and generally accepted auditing standards in Sweden. The audit firm applies ISQM 1 (International Standard on Quality Management) and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical require- ments, professional standards and applicable legal and regulatory require- ments. We are independent in relation to Holmen according to generally accept- ed auditing standards in Sweden and have fulfilled our professional ethics re- sponsibility according to these requirements. The procedures performed in a limited assurance engagement and an examina- tion according to RevR 12 do not allow us to obtain such assurance that we be- come aware of all significant matters that could have been identified if an audit was performed. The conclusion based on a limited assurance engagement and an examination in accordance with RevR 12, therefore, does not provide the same level of assurance as a conclusion based on an audit has. Our procedures are based on the criteria defined by the Board of Directors and the Group Management as described above. We consider these criteria as suita- ble for the preparation of the Sustainability Report. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion below. Conclusion Based on the limited assurance procedures we have performed, nothing has come to our attention that causes us to believe that the Sustainability Report is not prepared, in all material respects, in accordance with the criteria defined by the Board of Directors and Group Management. A Statutory Sustainability Report has been prepared. Stockholm, 25 February 2025 PricewaterhouseCoopers AB Magnus Svensson Henryson Authorised Public Accountant Auditor in Charge 126    Holmen Annual Report 2024 Auditor’s Limited Assurance Report 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 compara- ble with performance measures with the same names published by other companies. Reconciliation of key figures, SEKm 2024 2023 2022 2021 2020 Operating profit/loss, EBITDA and items affecting comparability EBITDA 5 110 6 114 8 607 5 321 3 651 Depreciation and amortisation according to plan -1 388 -1 360 -1 345 -1 261 -1 172 Operating profit/loss excluding items affecting comparability 3 721 4 755 7 262 4 061 2 479 Items affecting comparability* - - 266 -330 - Operating profit 3 721 4 755 7 527 3 731 2 479 Operating margin Operating profit/loss excluding items affecting comparability 3 721 4 755 7 262 4 061 2 479 Net sales 22 759 22 795 23 952 19 479 16 327 Operating margin, % 16.4 20.9 30.3 20.8 15.2 Capital employed Equity 57 370 56 923 56 950 46 992 42 516 Net financial debt 3 397 1 869 2 145 4 101 4 181 Capital employed 60 767 58 793 59 095 51 093 46 697 Return on capital employed Operating profit/loss excluding items affecting comparability 3 721 4 755 7 262 4 061 2 479 Average capital employed 59 613 56 046 54 570 47 557 44 128 Return, % 6.2 8.5 13.3 8.5 5.6 Return on equity Profit after tax 2 861 3 697 5 874 3 004 1 979 Average equity 56 746 54 140 51 299 43 326 40 718 Return, % 5.0 6.8 11.5 6.9 4.8 Net financial debt Non-current financial liabilities 2 502 1 902 2 902 3 911 3 919 Non-current liabilities relating to right-of-use assets 132 160 158 173 175 Current financial liabilities 953 1 021 1 039 736 605 Current liabilities relating to right-of-use assets 95 91 89 71 112 Pension obligations 9 9 7 24 48 Non-current financial receivables -46 -61 -97 -268 -290 Current financial receivables -15 -50 -18 -39 -43 Cash and cash equivalents -234 -1 202 -1 935 -507 -346 Net financial debt 3 397 1 869 2 145 4 101 4 181 Debt/equity ratio Net financial debt 3 397 1 869 2 145 4 101 4 181 Equity 57 370 56 923 56 950 46 992 42 516 Net debt as % of equity 6 3 4 9 10 Equity/assets ratio Equity 57 370 56 923 56 950 46 992 42 516 Assets 81 548 79 719 81 436 68 101 62 543 Equity/assets ratio, % 70 71 70 69 68 *See page 128 for what items affecting comparability refers to. Holmen Annual Report 2024    127 Key figures 2024 Ten-year review, finance SEKm 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Income statement Net sales 22 759 22 795 23 952 19 479 16 327 16 959 16 055 16 133 15 513 16 014 Operating expenses** -18 563 -17 249 -15 865 -14 622 -13 250 -13 961 -12 984 -13 379 -12 626 -13 348 Change in value of biological assets 907 562 509 464 579 487 425 415 315 267 Share of profits of associates and joint ventures 7 6 10 0 -6 0 -9 -12 -22 7 EBITDA 5 110 6 114 8 607 5 321 3 651 3 486 3 488 3 157 3 179 2 940 Depreciation and amortisation according to plan -1 388 -1 360 -1 345 -1 261 -1 172 -1 141 -1 012 -991 -1 018 -1 240 Operating profit/loss excluding items affecting comparability 3 721 4 755 7 262 4 061 2 479 2 345 2 476 2 166 2 162 1 700 Items affecting comparability* - - 266 -330 - 8 770 -94 - -232 -931 Operating profit 3 721 4 755 7 527 3 731 2 479 11 115 2 382 2 166 1 930 769 Net financial items -62 -49 -87 -39 -42 -34 -25 -53 -71 -90 Profit/loss before tax 3 660 4 705 7 441 3 691 2 437 11 081 2 356 2 113 1 859 679 Tax -798 -1 008 -1 567 -688 -458 -2 351 -89 -445 -436 -120 Profit/loss for the year 2 861 3 697 5 874 3 004 1 979 8 731 2 268 1 668 1 424 559 Diluted earnings per share, SEK*** 18.0 23.0 36.3 18.5 12.2 52.6 13.5 9.9 8.5 3.4 Net sales Forest 9 318 7 996 7 342 6 509 5 883 6 286 5 944 5 535 5 302 5 481 Renewable Energy 642 1 070 1 226 488 378 378 319 315 314 359 Wood Products 3 896 4 075 5 015 4 872 2 222 1 695 1 747 1 562 1 342 1 314 Board and Paper 15 238 14 965 15 105 11 702 11 066 11 986 11 356 10 934 10 682 11 620 Group-wide costs and eliminations -6 335 -5 311 -4 737 -4 092 -3 222 -3 385 -3 311 -2 214 -2 128 -2 760 Group 22 759 22 795 23 952 19 479 16 327 16 959 16 055 16 133 15 513 16 014 Operating profit Forest 1 947 1 523 1 401 1 495 1 367 1 172 1 185 1 069 1 001 905 Renewable Energy 265 697 1 006 347 215 336 181 135 120 176 Wood Products 2 6 1 237 1 668 185 62 246 80 -3 9 Board and Paper 1 702 2 730 3 796 743 886 944 1 018 1 053 1 192 772 Group-wide costs and eliminations -194 -202 -178 -193 -174 -168 -154 -170 -148 -163 3 721 4 755 7 262 4 061 2 479 2 345 2 476 2 166 2 162 1 700 Items affecting comparability* - - 266 -330 - 8 770 -94 - -232 -931 Group 3 721 4 755 7 527 3 731 2 479 11 115 2 382 2 166 1 930 769 Cash flow Profit/loss before tax 3 660 4 705 7 441 3 691 2 437 11 081 2 356 2 113 1 859 679 Adjustment items 494 766 966 346 544 -8 208 540 418 965 1 802 Income tax paid -425 -160 -1 639 -662 -569 -147 -396 -221 -504 -398 Changes in working capital -412 494 -1 284 -145 46 158 -214 199 -360 443 Cash flow from operating activities 3 317 5 805 5 484 3 229 2 457 2 884 2 286 2 509 1 961 2 526 Cash flow from investing activities**** -2 066 -1 653 -1 352 -1 332 -1 924 -1 050 -1 005 -644 -123 -824 Cash flow after investments 1 251 4 153 4 132 1 897 533 1 834 1 281 1 865 1 838 1 702 Dividends paid -1 831 -2 592 -1 862 -1 741 -567 -1 134 -1 092 -1 008 -882 -840 Share buy-backs -647 -1 119 - - - -1 430 - - - - *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. **Net after other operating income. ***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. 128    Holmen Annual Report 2024 Ten-year review, finance For a ten-year review of the data per share, see page 55. SEKm 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Balance sheet Forest land and biological assets 57 843 56 348 52 151 47 080 43 202 41 345 18 701 17 971 17 595 17 340 Other non-current assets* 13 659 12 781 12 477 12 251 11 784 10 781 10 586 10 780 11 106 12 184 Current assets 9 750 9 277 14 758 7 956 6 878 6 264 6 845 5 710 5 852 5 607 Financial receivables 295 1 313 2 050 814 679 950 781 430 338 325 Total assets 81 548 79 719 81 436 68 101 62 543 59 340 36 912 34 891 34 891 35 456 Equity 57 370 56 923 56 950 46 992 42 516 40 111 23 453 22 035 21 243 20 853 Deferred tax liabilities 14 252 13 858 13 490 11 610 10 570 10 299 5 839 5 650 5 613 5 508 Financial liabilities and interest-bearing provisions 3 692 3 182 4 195 4 915 4 860 4 733 3 587 3 366 4 283 5 124 Operating liabilities 6 234 5 755 6 801 4 584 4 597 4 196 4 033 3 840 3 752 3 971 Total equity and liabilities 81 548 79 719 81 436 68 101 62 543 59 340 36 912 34 891 34 891 35 456 Capital employed Forest 45 978 44 768 41 354 37 300 34 230 32 718 14 830 13 824 13 536 13 401 Renewable Energy 4 588 4 283 4 618 4 069 3 351 3 058 3 082 3 115 3 153 3 075 Wood Products 2 375 2 139 2 067 2 278 1 846 1 000 927 862 859 897 Board and Paper 8 019 7 625 7 571 6 806 7 246 7 491 7 387 7 626 8 053 8 964 Group-wide and other -192 -22 3 485 640 24 -372 34 -455 -410 -684 Capital employed 60 767 58 793 59 095 51 093 46 697 43 895 26 261 24 972 25 190 25 653 Key figures Operating margin, %** Wood Products 0 0 25 34 8 4 14 5 0 1 Board and Paper 11 18 25 6 8 8 9 10 11 7 Group 16 21 30 21 15 14 15 13 14 11 Return on capital employed, %** Industry (Wood Products, Board and Paper) 16 27 52 26 12 12 15 13 13 6 Group 6 8 13 9 6 9 10 9 9 6 Return on equity, % 5 7 11 7 5 35 10 8 7 3 Net debt as % of equity 6 3 4 9 10 9 12 13 19 23 Deliveries Own forests, ’000 m3sub 2 643 2 702 2 813 2 833 2 841 2 699 2 816 2 883 2 945 3 132 Hydro and wind power, GWh 1 728 1 658 1 639 1 230 1 352 1 109 1 145 1 169 1 080 1 441 Wood products, ’000 m3 1 348 1 498 1 435 1 373 1 052 879 828 852 776 730 Paperboard and paper, ’000 tonnes 1 424 1 343 1 498 1 573 1 426 1 534 1 561 1 643 1 630 1 824 *Excluding non-current financial receivables. **Excluding items affecting comparability. Ten-year review, finance Holmen Annual Report 2024    129 2024 Five-year review, sustainability 2024 2023 2022 2021 2020 Production Paperboard, ’000 tonnes 575 462 513 529 551 Market pulp, ’000 tonnes 76 76 77 80 84 Paper, ’000 tonnes 932 888 1 016 998 891 Wood products, ’000 m3 1 418 1 447 1 468 1 465 1 021 Hydro and wind power, GWh1) 1 573 1 502 1 561 1 230 1 352 Electricity production at the mills, GWh 628 2) 566 520 445 621 Material use rate Wood, million m3sub3) 5.93 5.94 6.36 6.34 5.62 Purchased pulp, ’000 tonnes 84 71 77 77 78 Plastic granules/foiling material, ’000 tonnes 3.1 2.6 3.0 3.3 2.8 Energy purchased or acquired, GWh4) 7 638 7 428 8 416 8 754 7 875 Water use, million m3 5) 69 68 71 70 69 Chemicals, ’000 tonnes6) 131 139 147 147 147 Filler, pigment, ’000 tonnes6) 199 184 162 162 156 Emissions to air, tonnes Sulphur dioxide (counted as sulphur, S) 59 54 49 50 64 Nitrogen oxides 946 892 899 811 902 Particulates 62 53 49 52 33 Methane 45 42 47 33 41 Nitrous oxide 39 37 48 46 51 Fossil carbon dioxide, ’000 tonnes 46 41 42 81 63 Biogenic carbon dioxide, ’000 tonnes 1 731 1 676 1 657 1 423 1 545 Emissions to water, tonnes AOX (chlorinated organic matter) 34 36 36 39 38 Nitrogen 207 182 162 187 210 Phosphorus 20 18 12 16 19 COD (organic matter), ’000 tonnes 17 17 19 19 20 Suspended solids (SS), ’000 tonnes 3.0 3.8 3.6 3.2 3.5 Waste, ’000 tonnes7) Hazardous waste 1.5 1.5 1.8 2.0 2.3 To energy recovery 0.6 0.4 To material recovery 0.9 1.0 To landfill 0.1 0.1 Non-hazardous waste 101 92 To energy recovery 19 14 To material recovery 80 77 To landfill 1.9 1.2 External energy supplies, GWh Solid biofuels 2 311 2 587 2 004 1 907 1 638 Tall oil 138 146 156 164 158 District heating8) 29 25 26 23 11 Externally supplied energy9) 144 127 123 44 114 1) Own production of hydro and wind power refers to both wholly owned power plants and Holmen’s share in partly owned power plants. 2) 622 GWh was bio-based electricity production. 3) At Group level, wood consumption is computed net, taking into account internal deliveries, which include roundwood and pulp chips from the sawmills. 4) As of 2023, energy recovered in Holmen’s processes is not included. 5) Surface water from lakes and rivers is used almost 100 per cent. 2.9 million m3 was consumed out of 69 million m3. 6) Expressed as dry matter. 7) From 2023 onwards, more key figures have been included for waste, to align reporting with ESRS requirements. Hence, data is only reported for the current year and the previous year. As a result of new key figures for waste, the figure for hazardous waste in 2023 has also been updated from 1.4 to 1.5. 8) Refers to thermal energy supplied by Hallsta Paper Mill and Iggesund Mill. 9) Refers to electricity supplied from the mill in Workington. 130    Holmen Annual Report 2024 Five-year review, sustainability 2024 2023 2022 2021 2020 Employees Employees, head count1) 3 624 3 620 3 520 3 514 3 436 of whom women 838 816 757 725 687 of whom men 2 786 2 804 2 763 2 789 2 749 of whom in Sweden 3 094 3 064 2 975 2 975 2 905 of whom in the UK 383 398 382 376 371 of whom in the Netherlands 73 75 79 82 83 of whom in other countries 74 84 84 81 77 Employees, FTE2) 3) 3 498 3 546 Permanent employees women 658 664 Permanent employees men 2 536 2 600 Part-time employees women 60 55 Part-time employees men 41 34 Temporary employees women 66 73 Temporary employees men 137 120 Employees under 30 years of age4) 404 446 Employees aged 30–504) 1 581 1 623 Employees over 50 years of age4) 1 209 1 196 Employee turnover, % 7.3 7.4 8.3 8.9 7.3 Total number of employees who left the company 264 267 New recruitments 199 253 Sickness absence, % Total 4.7 4.6 4.7 4.1 4.3 of which long-term sickness absence5) 2.4 1.9 1.4 1.4 1.7 Number of work-related accidents6) Work-related accidents, more than 8 hours of absence, per million hours worked 5.3 5.2 7.6 5.6 4.3 1) Number of employees calculated as the average number of permanent employees for the reporting period. 2) From 2023 onwards, the key figures for employees have been updated to align reporting with ESRS requirements. Hence, data is only reported for the current year and the previous year. 3) See page 74 Note 4. 4) Relates to permanent employees. 5) From 2024 onwards, long-term sickness absence is calculated as more than 15 days. Previously it was calculated as more than 60 days. Hence the increase in long-term sickness absence in 2024, compared with the previous period. 6) Relates to employees. No work-related accidents with a fatal outcome occurred during the year. Greenhouse gas emissions scope 1–3, ’000 tonnes CO2e 2024 2023 2022 2021 2020 Scope 1: Direct GHG emissions 61 54 58 97 79 Scope 2: Indirect GHG emissions from purchased electrical energy1) 0.5 12 29 60 38 Scope 3: Emissions in the value chain 708 609 604 550 460 of which category 1: Purchased goods and services 227 196 191 136 100 of which category 2: Capital goods 150 116 95 120 80 of which category 3: Fuel and energy-related activities2) 58 40 40 38 36 of which category 4: Upstream transportation 72 54 54 56 56 of which categories 6 and 7: Travel3) 4 4 4 4 4 of which category 9: Downstream transportation 197 199 220 196 184 Total emissions 769 675 691 707 577 1) In 2024 Holmen updated the method for calculating gross market-based GHG emissions. Emissions from the value chain for the production of market-based electricity were previously­ in scope 2. These emissions have been moved to scope 3, category 3, in line with the GHG Protocol. 2) Increased due to updated calculation method. From 2024, emissions­ in the value chain from electricity production are also included. 3) Based on the travel survey conducted by Holmen in 2019. Holmen Annual Report 2024    131 Five-year review, sustainability Business overview holmen 2024 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 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 Iggesund Power Station Iggesund Iggesund Mill Iggesund Sawmill Ljusnan Sveg Byaforsen Krokströmmen Långströmmen Ljusne Strömmar Hallstavik Hallsta Paper Mill Varsvik Wind Farm Stockholm Head Office Norrköping Braviken Paper Mill Braviken Sawmill Linghem Sawmill Motala Ström Holmen Bergsbron-Havet UK Workington Mill 132    Holmen Annual Report 2024 Business overview Production facilities Iggesund Mill Products: Solid Bleached Board. 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 transport packaging. Hallsta Paper Mill Products: Paper for books, magazines, advertising and packaging. Braviken Sawmill Products: Spruce and pine construction products. Iggesund Sawmill Products: Spruce and pine products for joinery and construction. 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 builders’ merchants and the construction industry. Forest holdings Holmen’s forests 2024 Total land acreage    1 303 000 ha Total forest land acreage*    1 160 000 ha – of which nature conservation areas    211 000 ha Productive forest land**    1 045 000 ha Total volume of standing timber on productive forest land     127 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) Commis- sioned Umeälven Harrsele 49 489 1957 Tuggen 22 98 1962 Gideälven Stennäs 10 3 1989 Gammelbyforsen 10 1 1993 Björna 10 8 1986 Gideå 10 9 1986 Gidböle 10 6 1985 Gideåbacka 10 8 1995 Faxälven Linnvasselv 7 16 1962 Junsterforsen 100 130 1961 Gäddede 30 22 1974 Bågede 100 71 1974 Iggesundsån Pappersfallet 100 6 1915 Iggesund Power Station 100 22 2009 Ljusnan Sveg 20 22 1975 Byaforsen 20 21 1975 Krokströmmen 9 42 1952 Långströmmen 11 32 1961 Ljusne Strömmar 7 17 1976 Motala Ström Holmen 100 106 1990 Bergsbron-Havet 100 8 1923 Wind power Varsvik Wind Farm 100 149 2014 Blåbergsliden Wind Farm 100 430 2021 1) Holmen’s share of production. 2) Holmen’s share of production in a normal year. Business area Products Customer segment Primary markets Competitors Forest Logs, pulpwood and biofuel Sawmills, pulp mills, board and paper mills Sweden SCA, Sveaskog and a number of large forest owner associations Wood Products 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 Board and Paper Premium paperboard for consumer packaging and paper products for books, magazines, advertising and transport packaging Brand owners, converters, wholesalers, publishers, printers and retailers Europe, Asia, North America Metsä Board, Mayr-Melnhof, Norske Skog, Smurfit Westrock, Stora Enso, UPM Renewable Energy Renewable energy from hydro and wind power Nordic electricity market Fortum, Statkraft, Vattenfall, Uniper Holmen Annual Report 2024    133 Business overview Definitions and glossary Definitions Capital employed Net financial debt plus equity, which corresponds to fixed assets (excluding non-current financial ­receivables) plus working capital less the net sum of deferred tax liabilities and deferred tax assets. Average values are calculated on the basis of ­quarterly data. Cash flow after investments Cash flow from operating activities less cash flow from investing activities. Debt/equity ratio Net financial debt divided by total equity. Earnings per share (EPS) Profit for the year divided by the weighted average number of shares outstanding, adjusted for buy- back of shares, if any, during the year. Diluted EPS means that any diluting effect from outstanding call options has been taken into account. EBITDA Earnings before interest, taxes, depreciation, ­amortisation and impairment, excl. items affecting comparability. Equity/assets ratio Equity expressed as a percentage of total assets. Financial assets Non-current and current financial receivables and cash and cash equivalents. Items affecting comparability Used to clarify how the earnings measures are ­affected by matters outside normal business opera- tions, 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 shut- downs are not treated as an item affecting compara- bility. Page 128 states which items have been treat- ed as items affecting comparability over the past 10 years. Net financial debt Non-current and current financial liabilities, non-current and current liabilities regarding ­right-of-use assets, and pension obligations, less financial assets. Operating margin Operating profit/loss (excluding items affecting comparability) 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 aver- age capital employed, based on quarterly data. Return on equity Profit for the year expressed as a percentage of ­average equity, calculated on the basis of quarterly data. Glossary Biofuel Renewable fuels such as wood, black liquor, bark and tall oil. Fuels that do not generate any net emis- sion of carbon dioxide into the atmosphere, since the quantity of carbon dioxide formed during ­combustion is part of the carbon cycle. Biotope and substrate A biotope is an area with specific habitats. Substrate is the surface on which an organism lives. Bulk Measure of the paper’s volume. Paper of the same grammage can have different thicknesses depend- ing on the paper’s bulk. High bulk means thick, but relatively light, paper. Carbon dioxide (CO2) Carbon is the building block of life and is part of all living things. Biogenic carbon dioxide is released when biological material decays or 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. Climate adaptation plan Plan to manage climate-related risks and adapt ­operations to climate change. COD Chemical oxygen demanding substances. A meas- ure of the amount of oxygen needed for the com- plete decomposition of organic material in water. CSRD (Corporate Sustainability Reporting Directive) EU law requiring large and listed companies to ­report their sustainability impact. Environmental Impact Assessment A systematic analysis of the environmental impacts of a planned activity or measure. ESRS (European Sustainability Reporting Standards) Standards that companies must follow when report- ing under the CSRD. FBB Folding Box Board. Multi-layered paperboard made from mechanical and chemical pulp. Filler 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. GRI (Global Reporting Initiative) International cooperation body, in which many dif- ferent groups of stakeholders in society have drawn up global guidelines for how companies are to report on activities encompassed by the umbrella term of sustainable development. ISO 9001 An international standard for quality management systems. Primarily aimed at companies and organi- sations 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 man- agement. 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 man- agement system for health and safety. The manage- ment 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 Cubic metre 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. National Forest Inventory A national inventory of Sweden’s forests that ­provides data on the state of the forest and changes over time. Nitrogen (N) An element contained in wood. Nitrogen emissions to water may cause eutrophication. Nitrogen oxides (NOx) Gases that consist of nitrogen and oxygen that are formed in combustion. In moist air, nitrogen oxides are converted into nitric acid, which creates acid rain. Nitrogen oxides also have a fertilising effect. Particulates Particles of ash formed in incineration of bark or ­liquor, for example. Phosphorus (P) An element contained in wood. Excessive phos­ phorus in the water may cause over-fertilisation (eutrophication) and oxygen depletion. Precautionary principle Persons who pursue an activity or take a measure, or intend to do so, shall implement protective meas- ures, 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 techniques shall be used in connection with profes- sional activities. SBB Solid Bleached Board. Multi-layer paperboard made from bleached chemical pulp. Skogforsk Forestry Research Institute of Sweden. Substitution factor A measure of how much greenhouse gas emissions are reduced when fossil raw materials are replaced with renewable materials. Sulphate pulp Chemical pulp that is produced by cooking wood ­under high pressure and at a high temperature ­together with white liquor (sodium hydroxide and sodium sulphide). Sulphur dioxide (SO2) A gas consisting of sulphur and oxygen that is formed in combustion of sulphur-containing fuels, such as oil. In contact with moist air, sulphur dioxide is converted into sulphuric acid, which creates acid rain. Suspended solids (SS) Waterborne substances consisting of fibres and ­particles that can largely be removed using a fine mesh filter. Transition plan Describes how an organisation will reduce its ­climate impact and achieve its climate objectives. Tall oil By-product of the sulphate pulp process used for making soft soap, paints, biodiesel and other ­products. 134    Holmen Annual Report 2024 Definitions and glossary Good rating in CDP’s annual assessment CDP is an independent organisation that analyses climate data from more than 24 000 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 2024 assessment, Holmen was rated A- in the CDP Climate Program and B in the CDP Forest Program. Top EcoVadis rating On their most recent assessment, all Holmen’s paperboard and paper mills were awarded a Platinum rating by the international analysis company EcoVadis. Holmen’s two paperboard mills were awarded EcoVadis Platinum in 2024 for their successful sustainability work, and in 2023 the two paper mills received the same high rating. This award places Holmen among the top percentage of the more than 150 000 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 we constantly work to find long-term solutions to current chal- lenges. Thanks to sustainable use of our forests’ ecosys- tems, today we are able to operate a circular, renewable and bio-based business that benefits our customers, shareholders­, employees and local communities. Our production­, business and organisation contribute to the UN’s Sustainable Development Goals and thus also to the 2030 Agenda. The Biodiversity Intactness Index Description of the Biodiversity Intactness Index on page 39 Ahead of the UN biodiversity conference in Montreal in 2022 (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 biodiversity remains. The index can assume values between 0 and 100, where 100 means that the function of an ecosystem is intact and that the ecosystem is functioning as it always has, while 0 indicates an ecosystem that is com­ pletely 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 of how ecological communities have been affected by mankind. The database contains more than 4.7 million data points from over 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 2024    135 Holmen AB (publ) P.O. Box 5407, SE-114 84 Stockholm, Sweden +46 8 666 21 00 info@holmen.com Corporate ID No. 556001-3301 Registered office Stockholm

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